Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rule 7.35 To Specify Order Handling for an IPO Auction, 21434-21437 [2017-09194]

Download as PDF 21434 Federal Register / Vol. 82, No. 87 / Monday, May 8, 2017 / Notices Alberta Butler, Room 2347–E, or sent via electronic mail to Alberta.Butler@ opm.gov. FOR FURTHER INFORMATION CONTACT: A asabaliauskas on DSK3SPTVN1PROD with NOTICES copy of this ICR, with applicable supporting documentation, may be obtained by contacting the Retirement Services Publications Team, Office of Personnel Management, 1900 E Street NW., Room 3316–L, Washington, DC 20415, Attention: Cyrus S. Benson or sent via electronic mail to Cyrus.Benson@opm.gov or faxed to (202) 606–0910. SUPPLEMENTARY INFORMATION: As required by the Paperwork Reduction Act of 1995 (Pub. L. 104–13, 44 U.S.C. chapter 35) as amended by the ClingerCohen Act (Pub. L. 104–106), OPM is soliciting comments for this collection (OMB No. 3206–0174). The Office of Management and Budget is particularly interested in comments that: 1. Evaluate whether the proposed collection of information is necessary for the proper performance of functions of OPM, including whether the information will have practical utility; 2. Evaluate the accuracy of OPM’s estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; 3. Enhance the quality, utility, and clarity of the information to be collected; and 4. Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submissions of responses. Form RI 20–63 is used by annuitants to elect a reduced annuity with a survivor annuity for their spouse. Form RI 20–116 is a cover letter for RI 20–63 giving information about the cost to elect less than the maximum survivor annuity. This letter is used to supply the information that may have been requested by the annuitant about the cost of electing less than the maximum survivor annuity. Form RI 20–117 is a cover letter for RI 20–63 giving information about the cost to elect the maximum survivor annuity. Analysis Agency: Retirement Operations, Retirement Services, Office of Personnel Management. Title: Survivor Annuity Election for a Spouse/Cover Letter Giving Information about the Cost to Elect Less Than the Maximum Survivor Annuity/Cover VerDate Sep<11>2014 18:27 May 05, 2017 Jkt 241001 Letter Giving Information about the Cost to Elect the Maximum Survivor Annuity. OMB Number: 3206–0174. Frequency: On occasion. Affected Public: Individuals or Households. Number of Respondents: RI 20–63 = 2,400; RI 20–116 & RI 20–117 = 200. Estimated Time per Respondent: 55 minutes [RI 20–63 = 45 min., RI 20–116 & 20–117 = 10 min.]. Total Burden Hours: 1,834. U.S. Office of Personnel Management. Kathleen M. McGettigan, Acting Director. [FR Doc. 2017–09264 Filed 5–5–17; 8:45 am] BILLING CODE 6325–38–P Sunshine Act Meeting May 18, 2017, at 11 a.m. Commission hearing room, 901 New York Avenue NW., Suite 200, Washington, DC 20268–0001. STATUS: The Postal Regulatory Commission will hold a public meeting to discuss the agenda items outlined below. Part of the meeting will be open to the public as well as live-webcast, and the live-webcast may be accessed via the Commission’s Web site at http:// www.prc.gov. Part of the meeting will be closed. MATTERS TO BE CONSIDERED: The agenda for the Commission’s May 18, 2017 meeting includes the items identified below. PORTIONS OPEN TO THE PUBLIC: 1. Report from the Office of Public Affairs and Government Relations. 2. Report from the Office of General Counsel. 3. Report from the Office of Accountability and Compliance. 4. Report from the Office of the Secretary and Administration. PORTIONS CLOSED TO THE PUBLIC: 5. Discussion of pending litigation. CONTACT PERSON FOR MORE INFORMATION: David A. Trissell, General Counsel, Postal Regulatory Commission, 901 New York Avenue NW., Suite 200, Washington, DC 20268–0001, at 202– 789–6820 (for agenda-related inquiries) and Stacy L. Ruble, Secretary of the Commission, at 202–789–6800 or stacy.ruble@prc.gov (for inquiries related to meeting location, changes in date or time of the meeting, access for handicapped or disabled persons, the live-webcast, or similar matters). The Commission’s Web site may also PLACE: PO 00000 Frm 00071 Fmt 4703 By direction of the Commission. Stacy L. Ruble, Secretary. [FR Doc. 2017–09330 Filed 5–4–17; 11:15 am] BILLING CODE 7710–FW–P POSTAL SERVICE Product Change—Priority Mail Express and Priority Mail Negotiated Service Agreement Postal ServiceTM. Notice. AGENCY: ACTION: The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Effective date: May 8, 2017. FOR FURTHER INFORMATION CONTACT: Maria W. Votsch, 202–268–6525. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on May 1, 2017, it filed with the Postal Regulatory Commission a Request of the United States Postal Service to Add Priority Mail Express & Priority Mail Contract 48 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2017–126, CP2017–179. SUMMARY: POSTAL REGULATORY COMMISSION TIMES AND DATES: provide information on changes in the date or time of the meeting. Sfmt 4703 Stanley F. Mires, Attorney, Federal Compliance. [FR Doc. 2017–09220 Filed 5–5–17; 8:45 am] BILLING CODE 7710–12–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80576; File No. SR– NYSEArca–2017–47] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rule 7.35 To Specify Order Handling for an IPO Auction May 2, 2017. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’),2 and Rule 19b–4 thereunder,3 notice is hereby given that on April 21, 2017, NYSE Arca, Inc. (the ‘‘Exchange’’ 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 E:\FR\FM\08MYN1.SGM 08MYN1 Federal Register / Vol. 82, No. 87 / Monday, May 8, 2017 / Notices or ‘‘NYSE Arca’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 the Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Arca Equities Rule 7.35 (Auctions) to specify order handling for an IPO Auction. The proposed rule change is available on the Exchange’s website at www.nyse.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 self-regulatory organization 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 those 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 parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change asabaliauskas on DSK3SPTVN1PROD with NOTICES 1. Purpose The Exchange proposes to amend NYSE Arca Equities Rule 7.35 (Auctions) (‘‘Rule 7.35’’) to specify order handling for an IPO Auction. Under Rule 7.35(f), IPO Auctions follow the processing rules of a Core Open Auction, provided that: (1) The Exchange will specify the time an IPO Auction will be conducted; (2) there will be no Auction Imbalance Freeze, Auction Collars, or restrictions on the entry or cancellation of orders for an IPO Auction; and (3) an IPO Auction will not be conducted if there are only Market Orders on both sides of the market. The Exchange proposes to amend Rule 7.35(f)(2) to provide that order types that are not eligible to participate in the IPO Auction would be rejected until such time that the Auction Processing Period for the IPO Auction has concluded. Specifically, Limit VerDate Sep<11>2014 18:27 May 05, 2017 Jkt 241001 Orders designated IOC, Limit NonDisplayed Orders, MPL Orders, Tracking Orders, Market Pegged Orders, Discretionary Pegged Orders, Cross Orders, Retail Orders, and Retail Price Improvement Orders are not eligible to participate in auctions, including IPO Auctions.4 Because none of these order types are eligible to participate in an auction and because there would be no trading in a security before an IPO Auction, the Exchange believes it would be appropriate to reject such orders until after the Auction Processing Period concludes, at which time they would be eligible to trade. Accordingly, the Exchange proposes to amend Rule 7.35(f)(2) to specify that the Exchange would reject these orders until after the Auction Processing Period for the IPO Auction has concluded. In conjunction with this change, the Exchange proposes to delete the current text in Rule 7.32(f)(2) stating that there will be no restriction on the entry of orders for an IPO Auction. As proposed, amended Rule 7.35(f)(2) would provide (deleted text bracketed, new text underlined): (2) There will be no Auction Imbalance Freeze, Auction Collars, or restrictions on the [entry or] cancellation of orders for an IPO Auction. Limit Orders designated IOC, Limit Non-Displayed Orders, MPL Orders, Tracking Orders, Market Pegged Orders, Discretionary Pegged Orders, Cross Orders, Retail Orders, and Retail Price Improvement Orders will be rejected until after the Auction Processing Period for the IPO Auction has concluded. The Exchange also proposes to amend Rule 7.35(h)(3), which describes the transition to continuous trading following an auction, to specify how the Exchange would transition to continuous trading following an IPO Auction. Currently, Rule 7.35(h)(3)(A) provides that when transitioning to continuous trading from a prior trading session or following an auction, a quote will be published based on unexecuted 4 See Rules 7.31(b)(2) (A Limit Order designated IOC is not eligible to participate in any auctions); 7.31(d)(2) (Limit Non-Displayed Order does not participate in an auction); 7.31(d)(3) (MPL Order does not participate in an auction); 7.31(d)(4) (Tracking Orders are not triggered to trade during an auction because the Exchange does not route during an auction); 7.31(h)(1) (Market Pegged Orders will not participate in any auctions); 7.31(g) (A Cross Order is not eligible to participate in any auctions); and 7.44(m) (the Retail Liquidity Program operates only during the Core Trading Session and Retail Orders will be accepted during Core Trading Hours only). Because Discretionary Pegged Orders are non-displayed Pegged Orders, they are processed similarly to Market Pegged Orders in that they would not participate in auctions, would be rejected if entered or cancelled if cancel/replaced during a halt or pause in a security listed on the Exchange, and would be rejected if entered before or during the Early Trading Session. The Exchange proposes to amend Rules 7.18(c)(4), 7.31(h)(3)(A), and 7.34(c)(1)(A) to specify this behavior. PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 21435 orders that were eligible to trade in the trading sessions both before and after the transition or auction, i.e., previously-live orders. To make the text more specific, the Exchange proposes to define the term ‘‘previously-live order’’ separately for an IPO Auction to mean unexecuted orders that were entered before the IPO Auction Processing Period began. In the case of an IPO Auction, there is no prior trading session. In addition, as described in detail above, the Exchange would reject orders that are not eligible to participate in the IPO Auction until after the Auction Processing Period for the IPO Auction has concluded. Therefore, the only unexecuted orders following an IPO Auction would be those orders that would have been eligible to participate in the IPO Auction. The Exchange further proposes to specify that the current definition of previously-live orders would be applicable for the Core Open Auction, Trading Halt Auction, and Closing Auction. In addition, the Exchange believes that in the context of transitioning to continuous trading, an IPO Auction is more akin to a Trading Halt Auction than to the Core Open Auction because there is no trading in such security immediately preceding the auction, but there may be a previously-published quote.5 Accordingly, the Exchange proposes to amend Rule 7.35(h)(3)(A)(ii) to provide that the procedures for publishing a quote after an IPO Auction would be the same as are currently applicable for publishing a quote following a Trading Halt Auction.6 Because all marketable orders at the indicative match price would trade in an IPO Auction and the Exchange would reject orders that are not eligible to participate in the IPO Auction, following an IPO Auction there would not be any previously-live orders that would be marketable against other orders in the NYSE Arca Book. For this reason, the Exchange proposes to specify that the second step specified in 5 In limited circumstances, the first day of trading of a new listing on an exchange may not be an initial public offering, e.g., first day of listing of a new rights security, and therefore another exchange that trades such security on an unlisted trading privileges basis may begin quoting and trading in such security before the Exchange’s IPO Auction. In such case, there may be a quote in that symbol before the IPO Auction, just as there would be a previously-published quote in a security that is subject to a Trading Halt Auction. 6 Rule 7.35(h)(3)(A)(i) currently specifies order processing following an Early Open Auction, Core Open Auction, and Closing Auction. Because there is no trading in a security before an Early Open Auction and no previously-published quote against which to compare the new quote, the Exchange proposes to amend this rule text to remove reference to the Early Open Auction. E:\FR\FM\08MYN1.SGM 08MYN1 asabaliauskas on DSK3SPTVN1PROD with NOTICES 21436 Federal Register / Vol. 82, No. 87 / Monday, May 8, 2017 / Notices that rule would be for the Trading Halt Auction only. The Exchange also proposes to amend this rule to correct a typographical error to remove the hyphen between ‘‘trade’’ and ‘‘through.’’ Finally, the Exchange proposes to amend Rule 7.35(h)(3)(B). The rule currently provides that unexecuted orders that were not eligible to trade in the prior trading session (or were received during a halt or pause) or that were received during the Auction Processing Period, will be assigned a new working time at the end of the Auction Processing Period in time sequence relative to one another based on original entry time. The Exchange proposes to clarify this rule text by adding sub-numbering, specifying that existing rule text relates to a Trading Halt Auction, adding how orders entered before an Early Open Auction would be assigned a working time, and specifying that all such unexecuted orders would be processed in time sequence, i.e., such orders would be quoted, traded, or routed consistent with Rules 7.36 and 7.37. As proposed, the rule would provide that ‘‘unexecuted orders that (1) were not eligible to trade in the prior trading session, (2) for a Trading Halt Auction, were received during a halt or pause, (3) for the Early Open Auction, were received before the Early Open Auction Processing Period, or (4) that were received during the Auction Processing Period’’ would be assigned a new working time at the end of the Auction Processing Period in time sequence relative to one another based on original time entry [sic] and would be processed in time sequence.7 This proposed rule text represents current functionality. The Exchange further proposes to amend how the Exchange would assign working times to previously-live orders following an IPO Auction. The Exchange proposes to amend Rule 7.35(h)(3)(B) to specify that for an IPO Auction, previously-live orders (as defined in proposed Rule 7.35(h)(3)(A) above) that did not trade in the auction would retain the working time assigned at original entry time. The Exchange proposes this difference for IPO Auctions because, as proposed above, the Exchange would be rejecting orders that are not eligible to trade in an IPO Auction until after the Auction Processing Period concludes. Therefore, there would not be any other orders that 7 For example, for the Early Open Auction, unexecuted orders that either did not participate in an auction or, if there were no auction, were not represented in the first quote would be added to the NYSE Arca Book in time sequence and processed consistent with Rule 7.36 and 7.37 and the terms of the order. VerDate Sep<11>2014 18:27 May 05, 2017 Jkt 241001 need to be re-ranked with such previously-live orders and therefore the previously-live orders may retain their previously-assigned working times as they are processed in time sequence. * * * * * Because of the technology changes associated with this proposed rule change, the Exchange will announce by Trader Update the implementation date, which the Exchange anticipates will be in the third quarter of 2017. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’),8 in general, and furthers the objectives of Section 6(b)(5),9 in particular, because it is 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 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. Specifically, the Exchange believes that the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and a national market system by rejecting orders that are not yet eligible to trade. Similar to how the Exchange rejects Limit Orders designated IOC, Cross Orders, and Market Pegged Orders that are entered during the Early Trading Session and designated for the Core Trading Session, as provided for in Rule 7.34(c)(1), the Exchange believes that it provides greater certainty for ETP Holders for the Exchange to reject an order that is not yet eligible to trade. Because Limit Orders designated IOC, Limit Non-Displayed Orders, MPL Orders, Tracking Orders, Market Pegged Orders, Discretionary Pegged Orders, Cross Orders, Retail Orders, and Retail Price Improvement Orders are not eligible to participate in an auction and because there would be no trading in a security before an IPO Auction, the Exchange believes it would be consistent with the protection of investors and the public interest to reject such orders until after the Auction Processing Period concludes, at which time they would be eligible to trade. The Exchange further believes that it would remove impediments to and perfect the mechanism of a free and open market and a national market 8 15 9 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00073 Fmt 4703 Sfmt 4703 system to align its rules governing how the Exchange transitions from an IPO Auction to continuous trading with its proposal to reject orders that are not yet eligible to trade. Specifically, because immediately following an IPO Auction, the only available orders would be previously-entered orders that were eligible to participate in the IPO Auction, the proposed rule changes are designed to reflect how this order processing would be reflected in the transition to continuous trading following an IPO Auction. For example, there would be no need to adjust the working time of such orders. The Exchange believes that specifying such order processing in its rules would promote transparency and therefore remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that the proposed amendments to Rule 7.35(h)(3)(A) and (B) would remove impediments to and perfect the mechanism of a free and open market and a national market system because the proposed changes would provide greater specificity regarding how orders would be processed following an auction, including defining what constitutes a ‘‘previously-live order’’ for different auctions, how previously-live orders would be quoted following an auction, and how unexecuted orders would be processed following all auctions, including an Early Open Auction, thereby promoting transparency and clarity in exchange rules. The Exchange further believes that the proposed amendments to Rules 7.18(c)(4) and 7.34(c)(1)(A) would remove impediments to and perfect the mechanism of a free and open market and a national market system because the Exchange proposes to process Discretionary Pegged Orders, like [sic] Market Pegged Orders are non-displayed Pegged Orders, in the same manner as Market Pegged Orders, which are also non-displayed Pegged Orders. Accordingly, the Exchange proposes that Discretionary Pegged Orders would not participate in auctions, would be rejected if entered or cancelled if cancel/replaced during a halt or pause for an Exchange-listed security, and would be rejected if entered before or during the Early Trading Session. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The E:\FR\FM\08MYN1.SGM 08MYN1 Federal Register / Vol. 82, No. 87 / Monday, May 8, 2017 / Notices Exchange believes that the proposed rule change would not impose any burden on competition because it is not designed to address any competitive issues. Rather, the proposed rule change is designed to provide specificity in Exchange rules regarding how the Exchange would process orders before and after all auctions, including the Early Open Auction and an IPO Auction. In addition the proposed changes regarding Discretionary Pegged Orders would not impose any burden on competition because Discretionary Pegged Orders, like Market Pegged Orders are non-displayed orders, and the proposed changes are based on how Market Pegged Orders operate. change is consistent with the Act. Comments may be submitted by any of the following methods: C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. All submissions should refer to File Number SR–NYSEArca–2017–47. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEArca–2017–47, and should be submitted on or before May 30, 2017. asabaliauskas on DSK3SPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6) thereunder.11 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. 11 17 VerDate Sep<11>2014 18:27 May 05, 2017 Jkt 241001 Electronic Comments • Use the Commission’s Internet comment form (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2017–47 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–09194 Filed 5–5–17; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80573; File No. SR–GEMX– 2017–04] Self-Regulatory Organizations; Nasdaq GEMX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Quote Mitigation May 2, 2017. 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 April 26, 2017, Nasdaq GEMX, LLC (‘‘GEMX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II 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 GEMX Rule 804(h) regarding quote mitigation. The text of the proposed rule change is available on the Exchange’s Web site at www.ise.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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend GEMX Rule 804, entitled ‘‘Market Maker Quotations,’’ to specifically amend Rule 804(h) which addresses the Exchange’s quote traffic mitigation plan to adopt a BILLING CODE 8011–01–P 1 15 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00074 Fmt 4703 Sfmt 4703 21437 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\08MYN1.SGM 08MYN1

Agencies

[Federal Register Volume 82, Number 87 (Monday, May 8, 2017)]
[Notices]
[Pages 21434-21437]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09194]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80576; File No. SR-NYSEArca-2017-47]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Equities Rule 7.35 To Specify Order Handling for an IPO Auction

May 2, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on April 21, 2017, NYSE Arca, Inc. (the ``Exchange''

[[Page 21435]]

or ``NYSE Arca'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend NYSE Arca Equities Rule 7.35 
(Auctions) to specify order handling for an IPO Auction. The proposed 
rule change is available on the Exchange's website at www.nyse.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 self-regulatory organization 
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend NYSE Arca Equities Rule 7.35 
(Auctions) (``Rule 7.35'') to specify order handling for an IPO 
Auction.
    Under Rule 7.35(f), IPO Auctions follow the processing rules of a 
Core Open Auction, provided that: (1) The Exchange will specify the 
time an IPO Auction will be conducted; (2) there will be no Auction 
Imbalance Freeze, Auction Collars, or restrictions on the entry or 
cancellation of orders for an IPO Auction; and (3) an IPO Auction will 
not be conducted if there are only Market Orders on both sides of the 
market.
    The Exchange proposes to amend Rule 7.35(f)(2) to provide that 
order types that are not eligible to participate in the IPO Auction 
would be rejected until such time that the Auction Processing Period 
for the IPO Auction has concluded. Specifically, Limit Orders 
designated IOC, Limit Non-Displayed Orders, MPL Orders, Tracking 
Orders, Market Pegged Orders, Discretionary Pegged Orders, Cross 
Orders, Retail Orders, and Retail Price Improvement Orders are not 
eligible to participate in auctions, including IPO Auctions.\4\ Because 
none of these order types are eligible to participate in an auction and 
because there would be no trading in a security before an IPO Auction, 
the Exchange believes it would be appropriate to reject such orders 
until after the Auction Processing Period concludes, at which time they 
would be eligible to trade. Accordingly, the Exchange proposes to amend 
Rule 7.35(f)(2) to specify that the Exchange would reject these orders 
until after the Auction Processing Period for the IPO Auction has 
concluded.
---------------------------------------------------------------------------

    \4\ See Rules 7.31(b)(2) (A Limit Order designated IOC is not 
eligible to participate in any auctions); 7.31(d)(2) (Limit Non-
Displayed Order does not participate in an auction); 7.31(d)(3) (MPL 
Order does not participate in an auction); 7.31(d)(4) (Tracking 
Orders are not triggered to trade during an auction because the 
Exchange does not route during an auction); 7.31(h)(1) (Market 
Pegged Orders will not participate in any auctions); 7.31(g) (A 
Cross Order is not eligible to participate in any auctions); and 
7.44(m) (the Retail Liquidity Program operates only during the Core 
Trading Session and Retail Orders will be accepted during Core 
Trading Hours only). Because Discretionary Pegged Orders are non-
displayed Pegged Orders, they are processed similarly to Market 
Pegged Orders in that they would not participate in auctions, would 
be rejected if entered or cancelled if cancel/replaced during a halt 
or pause in a security listed on the Exchange, and would be rejected 
if entered before or during the Early Trading Session. The Exchange 
proposes to amend Rules 7.18(c)(4), 7.31(h)(3)(A), and 7.34(c)(1)(A) 
to specify this behavior.
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    In conjunction with this change, the Exchange proposes to delete 
the current text in Rule 7.32(f)(2) stating that there will be no 
restriction on the entry of orders for an IPO Auction.
    As proposed, amended Rule 7.35(f)(2) would provide (deleted text 
bracketed, new text underlined):

    (2) There will be no Auction Imbalance Freeze, Auction Collars, 
or restrictions on the [entry or] cancellation of orders for an IPO 
Auction. Limit Orders designated IOC, Limit Non-Displayed Orders, 
MPL Orders, Tracking Orders, Market Pegged Orders, Discretionary 
Pegged Orders, Cross Orders, Retail Orders, and Retail Price 
Improvement Orders will be rejected until after the Auction 
Processing Period for the IPO Auction has concluded.

    The Exchange also proposes to amend Rule 7.35(h)(3), which 
describes the transition to continuous trading following an auction, to 
specify how the Exchange would transition to continuous trading 
following an IPO Auction. Currently, Rule 7.35(h)(3)(A) provides that 
when transitioning to continuous trading from a prior trading session 
or following an auction, a quote will be published based on unexecuted 
orders that were eligible to trade in the trading sessions both before 
and after the transition or auction, i.e., previously-live orders. To 
make the text more specific, the Exchange proposes to define the term 
``previously-live order'' separately for an IPO Auction to mean 
unexecuted orders that were entered before the IPO Auction Processing 
Period began. In the case of an IPO Auction, there is no prior trading 
session. In addition, as described in detail above, the Exchange would 
reject orders that are not eligible to participate in the IPO Auction 
until after the Auction Processing Period for the IPO Auction has 
concluded. Therefore, the only unexecuted orders following an IPO 
Auction would be those orders that would have been eligible to 
participate in the IPO Auction. The Exchange further proposes to 
specify that the current definition of previously-live orders would be 
applicable for the Core Open Auction, Trading Halt Auction, and Closing 
Auction.
    In addition, the Exchange believes that in the context of 
transitioning to continuous trading, an IPO Auction is more akin to a 
Trading Halt Auction than to the Core Open Auction because there is no 
trading in such security immediately preceding the auction, but there 
may be a previously-published quote.\5\ Accordingly, the Exchange 
proposes to amend Rule 7.35(h)(3)(A)(ii) to provide that the procedures 
for publishing a quote after an IPO Auction would be the same as are 
currently applicable for publishing a quote following a Trading Halt 
Auction.\6\ Because all marketable orders at the indicative match price 
would trade in an IPO Auction and the Exchange would reject orders that 
are not eligible to participate in the IPO Auction, following an IPO 
Auction there would not be any previously-live orders that would be 
marketable against other orders in the NYSE Arca Book. For this reason, 
the Exchange proposes to specify that the second step specified in

[[Page 21436]]

that rule would be for the Trading Halt Auction only. The Exchange also 
proposes to amend this rule to correct a typographical error to remove 
the hyphen between ``trade'' and ``through.''
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    \5\ In limited circumstances, the first day of trading of a new 
listing on an exchange may not be an initial public offering, e.g., 
first day of listing of a new rights security, and therefore another 
exchange that trades such security on an unlisted trading privileges 
basis may begin quoting and trading in such security before the 
Exchange's IPO Auction. In such case, there may be a quote in that 
symbol before the IPO Auction, just as there would be a previously-
published quote in a security that is subject to a Trading Halt 
Auction.
    \6\ Rule 7.35(h)(3)(A)(i) currently specifies order processing 
following an Early Open Auction, Core Open Auction, and Closing 
Auction. Because there is no trading in a security before an Early 
Open Auction and no previously-published quote against which to 
compare the new quote, the Exchange proposes to amend this rule text 
to remove reference to the Early Open Auction.
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    Finally, the Exchange proposes to amend Rule 7.35(h)(3)(B). The 
rule currently provides that unexecuted orders that were not eligible 
to trade in the prior trading session (or were received during a halt 
or pause) or that were received during the Auction Processing Period, 
will be assigned a new working time at the end of the Auction 
Processing Period in time sequence relative to one another based on 
original entry time. The Exchange proposes to clarify this rule text by 
adding sub-numbering, specifying that existing rule text relates to a 
Trading Halt Auction, adding how orders entered before an Early Open 
Auction would be assigned a working time, and specifying that all such 
unexecuted orders would be processed in time sequence, i.e., such 
orders would be quoted, traded, or routed consistent with Rules 7.36 
and 7.37. As proposed, the rule would provide that ``unexecuted orders 
that (1) were not eligible to trade in the prior trading session, (2) 
for a Trading Halt Auction, were received during a halt or pause, (3) 
for the Early Open Auction, were received before the Early Open Auction 
Processing Period, or (4) that were received during the Auction 
Processing Period'' would be assigned a new working time at the end of 
the Auction Processing Period in time sequence relative to one another 
based on original time entry [sic] and would be processed in time 
sequence.\7\ This proposed rule text represents current functionality.
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    \7\ For example, for the Early Open Auction, unexecuted orders 
that either did not participate in an auction or, if there were no 
auction, were not represented in the first quote would be added to 
the NYSE Arca Book in time sequence and processed consistent with 
Rule 7.36 and 7.37 and the terms of the order.
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    The Exchange further proposes to amend how the Exchange would 
assign working times to previously-live orders following an IPO 
Auction. The Exchange proposes to amend Rule 7.35(h)(3)(B) to specify 
that for an IPO Auction, previously-live orders (as defined in proposed 
Rule 7.35(h)(3)(A) above) that did not trade in the auction would 
retain the working time assigned at original entry time. The Exchange 
proposes this difference for IPO Auctions because, as proposed above, 
the Exchange would be rejecting orders that are not eligible to trade 
in an IPO Auction until after the Auction Processing Period concludes. 
Therefore, there would not be any other orders that need to be re-
ranked with such previously-live orders and therefore the previously-
live orders may retain their previously-assigned working times as they 
are processed in time sequence.
* * * * *
    Because of the technology changes associated with this proposed 
rule change, the Exchange will announce by Trader Update the 
implementation date, which the Exchange anticipates will be in the 
third quarter of 2017.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\8\ in general, and 
furthers the objectives of Section 6(b)(5),\9\ in particular, because 
it is 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 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that the proposed rule change 
would remove impediments to and perfect the mechanism of a free and 
open market and a national market system by rejecting orders that are 
not yet eligible to trade. Similar to how the Exchange rejects Limit 
Orders designated IOC, Cross Orders, and Market Pegged Orders that are 
entered during the Early Trading Session and designated for the Core 
Trading Session, as provided for in Rule 7.34(c)(1), the Exchange 
believes that it provides greater certainty for ETP Holders for the 
Exchange to reject an order that is not yet eligible to trade. Because 
Limit Orders designated IOC, Limit Non-Displayed Orders, MPL Orders, 
Tracking Orders, Market Pegged Orders, Discretionary Pegged Orders, 
Cross Orders, Retail Orders, and Retail Price Improvement Orders are 
not eligible to participate in an auction and because there would be no 
trading in a security before an IPO Auction, the Exchange believes it 
would be consistent with the protection of investors and the public 
interest to reject such orders until after the Auction Processing 
Period concludes, at which time they would be eligible to trade.
    The Exchange further believes that it would remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system to align its rules governing how the Exchange transitions 
from an IPO Auction to continuous trading with its proposal to reject 
orders that are not yet eligible to trade. Specifically, because 
immediately following an IPO Auction, the only available orders would 
be previously-entered orders that were eligible to participate in the 
IPO Auction, the proposed rule changes are designed to reflect how this 
order processing would be reflected in the transition to continuous 
trading following an IPO Auction. For example, there would be no need 
to adjust the working time of such orders. The Exchange believes that 
specifying such order processing in its rules would promote 
transparency and therefore remove impediments to and perfect the 
mechanism of a free and open market and a national market system.
    The Exchange believes that the proposed amendments to Rule 
7.35(h)(3)(A) and (B) would remove impediments to and perfect the 
mechanism of a free and open market and a national market system 
because the proposed changes would provide greater specificity 
regarding how orders would be processed following an auction, including 
defining what constitutes a ``previously-live order'' for different 
auctions, how previously-live orders would be quoted following an 
auction, and how unexecuted orders would be processed following all 
auctions, including an Early Open Auction, thereby promoting 
transparency and clarity in exchange rules.
    The Exchange further believes that the proposed amendments to Rules 
7.18(c)(4) and 7.34(c)(1)(A) would remove impediments to and perfect 
the mechanism of a free and open market and a national market system 
because the Exchange proposes to process Discretionary Pegged Orders, 
like [sic] Market Pegged Orders are non-displayed Pegged Orders, in the 
same manner as Market Pegged Orders, which are also non-displayed 
Pegged Orders. Accordingly, the Exchange proposes that Discretionary 
Pegged Orders would not participate in auctions, would be rejected if 
entered or cancelled if cancel/replaced during a halt or pause for an 
Exchange-listed security, and would be rejected if entered before or 
during the Early Trading Session.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The

[[Page 21437]]

Exchange believes that the proposed rule change would not impose any 
burden on competition because it is not designed to address any 
competitive issues. Rather, the proposed rule change is designed to 
provide specificity in Exchange rules regarding how the Exchange would 
process orders before and after all auctions, including the Early Open 
Auction and an IPO Auction. In addition the proposed changes regarding 
Discretionary Pegged Orders would not impose any burden on competition 
because Discretionary Pegged Orders, like Market Pegged Orders are non-
displayed orders, and the proposed changes are based on how Market 
Pegged Orders operate.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2017-47 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2017-47. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2017-47, and should 
be submitted on or before May 30, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09194 Filed 5-5-17; 8:45 am]
BILLING CODE 8011-01-P