Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving Proposed Rule Change, as Modified by Amendment No. 1 Thereto, Introducing NYSE OptX, 2417-2418 [2017-00097]
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Federal Register / Vol. 82, No. 5 / Monday, January 9, 2017 / Notices
regarding programmatic inquiries, and
will facilitate the appropriate level of
communication and exchange of
information between Tribal officials and
the NRC staff. The Tribal liaisons will
also educate the NRC staff about Tribal
issues including cultural sensitivity and
the Federal Trust Responsibility. The
designated official will have the
authority to delegate tasks to the NRC
Tribal liaisons as he/she deems fit.
[FR Doc. 2017–00091 Filed 1–6–17; 8:45 am]
BILLING CODE 7590–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79719; File No. SR–
NYSEArca–2016–143]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Approving Proposed
Rule Change, as Modified by
Amendment No. 1 Thereto, Introducing
NYSE OptX
January 3, 2017.
I. Introduction
On November 3, 2016, NYSE Arca,
Inc. (the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
introduce NYSE OptX, an order entry
platform that will allow for the
submission of Qualified Contingent
Cross orders (‘‘QCC Orders’’) by OTP
Holders and OTP Firms. On November
15, 2016, the Exchange filed
Amendment No. 1 to the proposal.3 The
proposed rule change, as modified by
Amendment No. 1, was published for
comment in the Federal Register on
November 22, 2016.4 The Commission
received no comment letters on the
proposed rule change. This order
approves the proposed rule change, as
modified by Amendment No. 1.
II. Description of the Proposed Rule
Change
The Exchange proposes to introduce
NYSE OptX, an order entry platform
that will allow OTP Holders 5 and OTP
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 In Amendment No. 1, the Exchange clarified
that QCC Orders sent through NYSE OptX to the
Exchange for execution will comply with the order
format and EOC entry requirements established by
the Exchange, which are set forth in Exchange Rule
6.67.
4 See Securities Exchange Act Release No. 79327
(November 16, 2016), 81 FR 83890 (‘‘Notice’’).
5 The term ‘‘OTP Holder’’ refers to a natural
person, in good standing, who has been issued an
sradovich on DSK3GMQ082PROD with NOTICES
2 17
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21:14 Jan 06, 2017
Jkt 241001
Firms 6 (collectively, ‘‘OTPs’’) to submit
QCC Orders to the Exchange. According
to the Exchange, OTPs currently send
QCC Orders to the Exchange through the
use of third-party front end order
management systems or by calling Floor
Brokers and relaying their orders by
telephone.7
According to the Exchange, NYSE
OptX is an order entry platform that will
utilize a combination of Instant
Messaging (‘‘IM’’) and browser-based
technology to allow OTPs to submit
QCC Orders for execution on the
Exchange’s trading system.8 To execute
a QCC Order through NYSE OptX, an
OTP will send the order in plain text to
NYSE OptX,9 which will then translate
the message into a pre-populated order
ticket with details of the order and
return the order ticket to the OTP in a
browser-based URL. The OTP will then
confirm the order ticket and submit the
order to the Exchange for execution, or
send the order to a Floor Broker for
execution. After an order is executed on
the Exchange, NYSE OptX will remit
details of the execution back to the OTP.
According to the Exchange, NYSE
OptX is designed as an alternative to
front end order management systems
and the use of telephones for the
sending of QCC Orders to the
Exchange.10 The Exchange notes that
NYSE OptX will not provide OTPs with
the capability to send any other type of
orders or the capability to send QCC
Orders for execution to other options
markets.11 Further, OTPs will continue
OTP, or has been named as a Nominee. An OTP
Holder must be a registered broker or dealer
pursuant to Section 15 of the Act, or a nominee or
an associated person of a registered broker or dealer
that has been approved by the Exchange to conduct
business on the Exchange’s Trading Facilities. See
Exchange Rule 1.1(q).
6 The term ‘‘OTP Firm’’ refers to a sole
proprietorship, partnership, corporation, limited
liability company, or other organization in good
standing that holds an OTP or upon which an
individual OTP Holder has conferred trading
privileges on the Exchange’s Trading Facilities
pursuant to and in compliance with Exchange
Rules. An OTP Firm must be a registered broker or
dealer pursuant to Section 15 of the Act. See
Exchange Rule 1.1(r).
7 See Notice, supra note 4, at 83891.
8 See id. The Exchange represents that NYSE
OptX will not require any changes to the
Exchange’s communication or surveillance rules.
Id. at 83891, n.9.
9 The Exchange states that OTPs will be required
to provide all the essential information regarding
the QCC Order when sending it to NYSE OptX,
including the price of the option and the stock, the
size and side of the order, and delta. The Exchange
further represents that QCC Orders sent to the
Exchange for execution will comply with the order
format and EOC entry requirements established by
the Exchange. See Notice, supra note 4, at 83891,
n.11. See also Exchange Rule 6.67—Order Format
and System Entry Requirements.
10 See Notice, supra note 4, at 83891.
11 See id.
PO 00000
Frm 00109
Fmt 4703
Sfmt 4703
2417
to be able to submit QCC Orders through
the use of a third-party front end order
management system, or by telephone, as
they currently do.12 The Exchange notes
that use of OptX to send QCC Orders to
the Exchange is optional and
voluntary.13
The Exchange stated that it will
announce the effective date of NYSE
OptX in a Trader Update to be
published no later than 90 days
following approval of this proposal, and
that such effective date will be no later
than 270 days following publication of
the Trader Update.14
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of
Section 6 of the Act 15 and the rules and
regulations thereunder applicable to a
national securities exchange.16 In
particular, the Commission finds that
the proposed rule change is consistent
with Section 6(b)(5) of the Act,17 which
requires, among other things, that the
rules of a national securities exchange
be designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest and that the rules not be
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
In particular, the Commission notes
that, according to the Exchange, NYSE
OptX will provide OTPs an alternative
to third-party front end order
management systems and the use of
telephones to send QCC Orders to the
Exchange.18 Such an alternative may
help protect the interests of investors by
12 See
id.
id.
14 See id.
15 15 U.S.C. 78f.
16 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
17 15 U.S.C. 78f(b)(5).
18 See Notice, supra note 4, at 83891. As stated
above, the Exchange represented that OTPs will be
required to provide all the essential information
regarding the QCC Order when sending the order
to NYSE OptX and QCC Orders sent to the
Exchange for execution will comply with the order
format and EOC entry requirements established by
the Exchange. Id. at 83891, n.11.
13 See
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09JAN1
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Federal Register / Vol. 82, No. 5 / Monday, January 9, 2017 / Notices
offering OTPs an additional way to send
QCC Orders to the Exchange for
execution. The Commission notes that
the use of OptX will be entirely
voluntary and OTPs will still be able to
submit QCC Orders as they do today,
either through the use of third-party
front end order management systems or
by telephone. For these reasons, the
Commission finds that the proposed
rule change, as modified by Amendment
No. 1, is consistent with Section 6(b)(5)
of the Act and the rules and regulations
thereunder applicable to a national
securities exchange.
IV. Conclusion
IT IS THEREFORE ORDERED,
pursuant to Section 19(b)(2) of the
Act,19 that the proposed rule change
(SR–NYSEArca–2016–143), as modified
by Amendment No. 1, be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–00097 Filed 1–6–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79724; File No. SR–Phlx–
2016–105]
Self-Regulatory Organizations;
NASDAQ PHLX LLC; Notice of Filing of
Proposed Rule Change To Amend
Rules 501, 507, 508, 510, and 511
January 3, 2017.
sradovich on DSK3GMQ082PROD with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
21, 2016, NASDAQ PHLX LLC (‘‘Phlx’’
or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 501 (Specialist Appointment), Rule
507 (Application for Approval as an
19 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
20 17
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21:14 Jan 06, 2017
Jkt 241001
SQT, RSQT, or RSQTO and Assignment
in Options), Rule 508 (Transfer
Application), Rule 510 (SQT and RSQT
Performance Evaluation), and Rule 511
(Specialist Allocation and Performance
Evaluation).3 The proposed
amendments are described further
below.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqphlx.cchwallstreet
.com/, at the principal office of the
Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend: (1)
Rule 501 to delete a reference to a backup specialist; (2) Rule 507 to: Update
the reference to ‘‘Board’’ to permit the
Board to appoint a panel; update the
composition of the review committee;
and update the reference to Rule 510; (3)
Rule 508 to delete the reference to
‘‘lease’’ and the cross-reference to Rule
511; (4) Rule 510 to re-entitle the rule
‘‘Good Standing for Specialist, SQT, and
RSQT,’’ 4 and add relevant good
standing language, and appeal rights;
and (5) Rule 511 to delete the rule.
Rules 501, 507, 508, 510, and 511 are
part of the 500 series of rules in the
Rules of the Exchange (the ‘‘Series 500
Rules’’), which are entitled ‘‘Allocation,
SQT, RSQT, and Evaluation Rules (Rule
500–599).’’ 5 Many Series 500 Rules
3 References to rules are to Phlx rules unless
otherwise noted. The terms SQT, RSQT, RSQTO,
and Specialist are discussed below.
4 ‘‘Specialist’’ is an Exchange member who is
registered as an options specialist pursuant to Rule
1020(a). ‘‘Remote Specialist’’ is a specialist that
does not have a physical presence on the floor of
the Exchange. Streaming quote trader (‘‘SQT’’) and
remote streaming quote trader (‘‘RSQT’’) are
electronic traders on the Exchange pursuant to Rule
1014(b)(ii)(A) and Rule 1014(b)(ii)(B), respectively.
5 These Series 500 Rules apply to Exchange
members that trade options. The Exchange
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
were established more than three
decades ago with the advent of options
trading on the Exchange,6 at which time
Exchange options trading was strictly
on-floor open outcry through specialists.
Exchange options trading has, since that
time, developed into a robust hybrid
system that is currently largely
electronic and off-floor 7 but continues
to have an on-floor specialist 8 and an
open outcry trading floor. The Exchange
is now updating and modernizing the
Series 500 Rules as discussed below.9
Updating Rule 501
The Exchange proposes in Rule 501 to
delete the reference to a back-up
specialist.
Currently, Rule 501 states that initial
application(s) to become a specialist
unit shall include information regarding
the specialist, back-up specialist unit
and a substitute specialist unit. With the
development of liquidity-enhancing
electronic market makers on the
Exchange such as RSQTs, which make
markets in the same options issues as
specialists, and the diminution of the
continues to have a hybrid options floor, but no
longer has an equities floor or a commodities floor.
6 For example, Rules 501, 505, and 506, were
adopted on a pilot basis in 1982. See Securities
Exchange Act Release No. 18975 (August 17, 1982),
47 FR 37019 (August 24, 1982) (approval order
regarding pilot in respect of Rules 501–506 and
authorizing the Phlx Allocation, Evaluation and
Securities Committee, which no longer exists). See
also Securities Exchange Act Release No. 18975
(August 17, 1982), 47 FR 37019 (August 24, 1982)
(SR–Phlx–81–1) (approval order regarding Rules
100, 201, 203 and 214 in combination with Rules
500 through 505). Rules 500, 501, 505, 506, 508,
511, 515, 520, 522, 523, 525, and 526 (of which
Rules 500, 515, 516, 520, 522, 523, 525, and 526
no longer exist) were permanently approved in
1991. See Securities Exchange Act Release No.
29369 (June 26, 1991), 56 FR 30604 (July 3, 1991)
(SR–Phlx–87–42) (order granting permanent
approval). Rule 507 was adopted in 2004. See
Securities Exchange Act Release No. 50100 (July 27,
2004), 69 FR 46612 (August 3, 2004) (SR–Phlx–
2003–59) (order granting approval). Rule 510 was
adopted in 2007. See Securities Exchange Act
Release No. 55080 (January 10, 2007), 72 FR 2324
(January 18, 2007) (SR–Phlx–2006–51) (order
granting approval). The Exchange has filed a
separate proposal regarding two of the rules in the
Series 500 Rules, namely Rules 505 and 506. See
Securities Exchange Act Release No. 77121
(February 11, 2016), 81 FR 8308 (February 18, 2016)
(SR–Phlx–2016–22) (notice of filing and immediate
effectiveness to delete Rule 505 and update Rule
506).
7 Electronic traders include Registered Options
Traders or ‘‘ROTs,’’ that are Streaming Quote
Traders or ‘‘SQTs’’, Remote Streaming Quote
Traders or ‘‘RSQTs,’’ as well as off-floor specialists
(Remote Specialists) (collectively ‘‘market makers’’).
See Rules 1014(b)(ii)(A), 1014(b)(ii)(B), and 1020.
8 Unlike specialists, Remote Specialists do not
have a physical presence on the floor of the
Exchange. Rule 1020.
9 While the vast majority of options-related rules
are found in Rule 1000 and higher (with option
index rules found in Rule 1000A and higher), some
of the older options-related rules are, as discussed,
in the Series 500 Rules.
E:\FR\FM\09JAN1.SGM
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]]>Agencies
[Federal Register Volume 82, Number 5 (Monday, January 9, 2017)]
[Notices]
[Pages 2417-2418]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00097]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79719; File No. SR-NYSEArca-2016-143]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Approving
Proposed Rule Change, as Modified by Amendment No. 1 Thereto,
Introducing NYSE OptX
January 3, 2017.
I. Introduction
On November 3, 2016, NYSE Arca, Inc. (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'') \1\
and Rule 19b-4 thereunder,\2\ a proposed rule change to introduce NYSE
OptX, an order entry platform that will allow for the submission of
Qualified Contingent Cross orders (``QCC Orders'') by OTP Holders and
OTP Firms. On November 15, 2016, the Exchange filed Amendment No. 1 to
the proposal.\3\ The proposed rule change, as modified by Amendment No.
1, was published for comment in the Federal Register on November 22,
2016.\4\ The Commission received no comment letters on the proposed
rule change. This order approves the proposed rule change, as modified
by Amendment No. 1.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange clarified that QCC Orders
sent through NYSE OptX to the Exchange for execution will comply
with the order format and EOC entry requirements established by the
Exchange, which are set forth in Exchange Rule 6.67.
\4\ See Securities Exchange Act Release No. 79327 (November 16,
2016), 81 FR 83890 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The Exchange proposes to introduce NYSE OptX, an order entry
platform that will allow OTP Holders \5\ and OTP Firms \6\
(collectively, ``OTPs'') to submit QCC Orders to the Exchange.
According to the Exchange, OTPs currently send QCC Orders to the
Exchange through the use of third-party front end order management
systems or by calling Floor Brokers and relaying their orders by
telephone.\7\
---------------------------------------------------------------------------
\5\ The term ``OTP Holder'' refers to a natural person, in good
standing, who has been issued an OTP, or has been named as a
Nominee. An OTP Holder must be a registered broker or dealer
pursuant to Section 15 of the Act, or a nominee or an associated
person of a registered broker or dealer that has been approved by
the Exchange to conduct business on the Exchange's Trading
Facilities. See Exchange Rule 1.1(q).
\6\ The term ``OTP Firm'' refers to a sole proprietorship,
partnership, corporation, limited liability company, or other
organization in good standing that holds an OTP or upon which an
individual OTP Holder has conferred trading privileges on the
Exchange's Trading Facilities pursuant to and in compliance with
Exchange Rules. An OTP Firm must be a registered broker or dealer
pursuant to Section 15 of the Act. See Exchange Rule 1.1(r).
\7\ See Notice, supra note 4, at 83891.
---------------------------------------------------------------------------
According to the Exchange, NYSE OptX is an order entry platform
that will utilize a combination of Instant Messaging (``IM'') and
browser-based technology to allow OTPs to submit QCC Orders for
execution on the Exchange's trading system.\8\ To execute a QCC Order
through NYSE OptX, an OTP will send the order in plain text to NYSE
OptX,\9\ which will then translate the message into a pre-populated
order ticket with details of the order and return the order ticket to
the OTP in a browser-based URL. The OTP will then confirm the order
ticket and submit the order to the Exchange for execution, or send the
order to a Floor Broker for execution. After an order is executed on
the Exchange, NYSE OptX will remit details of the execution back to the
OTP.
---------------------------------------------------------------------------
\8\ See id. The Exchange represents that NYSE OptX will not
require any changes to the Exchange's communication or surveillance
rules. Id. at 83891, n.9.
\9\ The Exchange states that OTPs will be required to provide
all the essential information regarding the QCC Order when sending
it to NYSE OptX, including the price of the option and the stock,
the size and side of the order, and delta. The Exchange further
represents that QCC Orders sent to the Exchange for execution will
comply with the order format and EOC entry requirements established
by the Exchange. See Notice, supra note 4, at 83891, n.11. See also
Exchange Rule 6.67--Order Format and System Entry Requirements.
---------------------------------------------------------------------------
According to the Exchange, NYSE OptX is designed as an alternative
to front end order management systems and the use of telephones for the
sending of QCC Orders to the Exchange.\10\ The Exchange notes that NYSE
OptX will not provide OTPs with the capability to send any other type
of orders or the capability to send QCC Orders for execution to other
options markets.\11\ Further, OTPs will continue to be able to submit
QCC Orders through the use of a third-party front end order management
system, or by telephone, as they currently do.\12\ The Exchange notes
that use of OptX to send QCC Orders to the Exchange is optional and
voluntary.\13\
---------------------------------------------------------------------------
\10\ See Notice, supra note 4, at 83891.
\11\ See id.
\12\ See id.
\13\ See id.
---------------------------------------------------------------------------
The Exchange stated that it will announce the effective date of
NYSE OptX in a Trader Update to be published no later than 90 days
following approval of this proposal, and that such effective date will
be no later than 270 days following publication of the Trader
Update.\14\
---------------------------------------------------------------------------
\14\ See id.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of Section 6 of the Act \15\
and the rules and regulations thereunder applicable to a national
securities exchange.\16\ In particular, the Commission finds that the
proposed rule change is consistent with Section 6(b)(5) of the Act,\17\
which requires, among other things, that the rules of a national
securities exchange be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest and that the rules not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78f.
\16\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\17\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the Commission notes that, according to the
Exchange, NYSE OptX will provide OTPs an alternative to third-party
front end order management systems and the use of telephones to send
QCC Orders to the Exchange.\18\ Such an alternative may help protect
the interests of investors by
[[Page 2418]]
offering OTPs an additional way to send QCC Orders to the Exchange for
execution. The Commission notes that the use of OptX will be entirely
voluntary and OTPs will still be able to submit QCC Orders as they do
today, either through the use of third-party front end order management
systems or by telephone. For these reasons, the Commission finds that
the proposed rule change, as modified by Amendment No. 1, is consistent
with Section 6(b)(5) of the Act and the rules and regulations
thereunder applicable to a national securities exchange.
---------------------------------------------------------------------------
\18\ See Notice, supra note 4, at 83891. As stated above, the
Exchange represented that OTPs will be required to provide all the
essential information regarding the QCC Order when sending the order
to NYSE OptX and QCC Orders sent to the Exchange for execution will
comply with the order format and EOC entry requirements established
by the Exchange. Id. at 83891, n.11.
---------------------------------------------------------------------------
IV. Conclusion
IT IS THEREFORE ORDERED, pursuant to Section 19(b)(2) of the
Act,\19\ that the proposed rule change (SR-NYSEArca-2016-143), as
modified by Amendment No. 1, be, and hereby is, approved.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-00097 Filed 1-6-17; 8:45 am]
BILLING CODE 8011-01-P
