Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.31-E Relating to Mid-Point Liquidity Orders and the Minimum Trade Size Modifier and Rule 7.36-E To Add a Definition of “Aggressing Order”, 3038-3043 [2018-00975]
Download as PDF
<![CDATA[
3038
Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices
subparagraph (f)(6) of Rule 19b–4
thereunder.9
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of its filing. However, Rule 19b–
4(f)(6)(iii) 10 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay so that the proposed rule change
will become operative on filing. The
Exchange stated that the proposed rule
change promotes the protection of
investors and the public interest by
improving the organization and
readability of the Exchange’s rules.
Waiver of the operative delay would
allow the Exchange, without delay, to
continue to amend other sections of
Rule 1080 for improved readability,
therefore, the Commission believes that
waiver of the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Accordingly, the Commission hereby
waives the operative delay and
designates the proposed rule change
operative upon filing.11
At any time within 60 days of the
filing of such 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
ethrower on DSK3G9T082PROD with NOTICES
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:
9 17 CFR 240.19b-4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
the proposed rule change, along with a brief
description and 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. The Exchange
has satisfied this requirement.
10 17 CFR 240.19b–4(f)(6)(iii).
11 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
VerDate Sep<11>2014
19:00 Jan 19, 2018
Jkt 244001
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
Phlx–2018–06 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–Phlx–2018–06. 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 website (https://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 website 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–Phlx–2018–06, and should
be submitted on or before February 12,
2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–00976 Filed 1–19–18; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82504; File No. SR–
NYSEArca–2018–01]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Rule 7.31–E
Relating to Mid-Point Liquidity Orders
and the Minimum Trade Size Modifier
and Rule 7.36–E To Add a Definition of
‘‘Aggressing Order’’
January 16, 2018.
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 January
3, 2018, NYSE Arca, Inc. (the
‘‘Exchange’’ 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 Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 7.31–E relating to Mid-Point
Liquidity Orders and the Minimum
Trade Size modifier and Rule 7.36–E to
add a definition of ‘‘Aggressing Order.’’
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.
BILLING CODE 8011–01–P
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
12 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00081
Fmt 4703
Sfmt 4703
E:\FR\FM\22JAN1.SGM
22JAN1
Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Mid-Point Liquidity (‘‘MPL’’) Orders
and the Minimum Trade Size (‘‘MTS’’)
modifier and Rule 7.36–E (Order
Ranking and Display) to add a definition
of ‘‘Aggressing Order.’’ [sic] For MPL
Orders, the Exchange proposes to
amend the price at which a marketable
MPL Order would trade when there are
resting orders priced better than the
midpoint. The Exchange further
proposes to amend functionality related
to MPL–ALO Orders to describe how
orders would trade if an MPL–ALO
Order locks contra-side same-priced
interest on the NYSE Arca Book. For
MTS, the Exchange proposes to move all
discussion relating to the MTS modifier
to new sub-paragraph (i)(3) of Rule
7.31–E and in so doing, amend how
resting orders with an MTS modifier
would trade in specified circumstances.
ethrower on DSK3G9T082PROD with NOTICES
Background
As provided for in current Rule 7.31–
E(d)(3)(C), on arrival, an MPL Order to
buy (sell) that is eligible to trade will
trade with resting orders to sell (buy)
with a working price at or below (above)
the midpoint of the PBBO (i.e., priced
better than the midpoint of the PBBO).
The rule further provides that resting
MPL Orders to buy (sell) will trade at
the midpoint of the PBBO against all
incoming orders to sell (buy) priced at
or below (above) the midpoint of the
PBBO (i.e., priced better than the
midpoint of the PBBO).
Current Rule 7.31–E(d)(3)(F) provides
that an MPL Order may be designated
with an ALO Modifier (an ‘‘MPL–ALO
Order’’) and that on arrival, an MPL–
ALO Order to buy (sell) will trade with
resting orders to sell (buy) with a
working price below (above) the
midpoint of the PBBO, but will not
trade with resting orders to sell (buy)
priced at the midpoint of the PBBO. The
rule further provides that a resting
MPL–ALO Order to buy (sell) will trade
with an arriving order to sell (buy) that
is eligible to trade at the midpoint of the
PBBO.
The MTS modifier is currently
available for Limit IOC Orders,4 MPL
4 See Rule 7.31–E(b)(2)(A) (‘‘A Limit IOC Order to
buy (sell) may be designated with a minimum trade
size (‘‘MTS’’), which will trade against sell (buy)
orders in the NYSE Arca Book that in the aggregate,
meets its MTS. On entry, a Limit IOC Order with
an MTS must have a minimum of one round lot and
will be rejected on arrival if the MTS is larger than
the size of the Limit IOC Order. A Limit IOC Order
with an MTS that cannot be immediately traded at
its minimum size will be cancelled in its entirety.’’)
VerDate Sep<11>2014
19:00 Jan 19, 2018
Jkt 244001
Orders,5 and Tracking Orders.6 As such,
the MTS modifier is currently available
only for orders that are not displayed
and do not route. On arrival, both Limit
IOC Orders and MPL Orders with an
MTS modifier will trade against contraside orders in the NYSE Arca Book that
in the aggregate, meet the MTS.7 Once
resting, MPL Orders and Tracking
Orders with an MTS modifier function
similarly: If a contra-side order does not
meet the MTS, the incoming order will
not trade with and may trade through
the resting order with the MTS modifier.
In addition, both MPL Orders and
Tracking Orders with an MTS modifier
will be cancelled if such orders are
traded in part or reduced in size and the
remaining quantity is less than the MTS.
Proposed Definition of ‘‘Aggressing
Order’’
The Exchange proposes to amend
Rule 7.36–E to add a definition that
would be used for purposes of Rule
7–E. Proposed Rule 7.36–E(a)(5) would
define the term ‘‘Aggressing Order’’ to
mean a buy (sell) order that is or
becomes marketable against sell (buy)
interest on the NYSE Arca Book.8 This
term would therefore refer to orders that
are marketable against other orders on
the NYSE Arca Book, such as incoming
orders and orders that have returned
unexecuted after routing.
This term would also be applicable to
resting orders that become marketable
due to one or more events. For the most
part, resting orders will have already
traded with contra-side orders against
5 See Rule 7.31–E(d)(3)(D) (‘‘An MPL Order may
be designated with an MTS of a minimum of one
round lot and will be rejected on arrival if the MTS
is larger than the size of the MPL Order. On arrival,
an MPL Order to buy (sell) with an MTS will trade
with sell (buy) orders in the NYSE Arca Book that
in the aggregate, meets its MTS. If the sell (buy)
orders do not meet the MTS, the MPL Order to buy
(sell) will not trade on arrival and will be ranked
in the NYSE Arca Book. Once resting, an MPL
Order to buy (sell) with an MTS will trade with an
order to sell (buy) that meets the MTS and is priced
at or below (above) the midpoint of the PBBO. If
an order does not meet an MPL Order’s MTS, the
order will not trade with and may trade through
such MPL Order. If an MPL Order with an MTS is
traded in part or reduced in size and the remaining
quantity of the order is less than the MTS, the MPL
Order will be cancelled.’’)
6 See Rule 7.31–E(d)(4)(C) (‘‘A Tracking Order
may be designated with an MTS of one round lot
or more. If an incoming order cannot meet the MTS,
a Tracking Order with a later working time will
trade ahead of the Tracking Order designated with
an MTS with an earlier working time. If a Tracking
Order with an MTS is traded in part or reduced in
size and the remaining quantity is less than the
MTS, the Tracking Order will be cancelled.’’)
7 Tracking Orders, including Tracking Orders
with an MTS modifier, are passive orders that do
not trade on arrival. See Rule 7.31–E(d)(4)(A).
8 The term ‘‘marketable’’ is defined in Rule 1.1(y)
to mean for a Limit Order, an order than [sic] can
be immediately executed or routed.
PO 00000
Frm 00082
Fmt 4703
Sfmt 4703
3039
which they are marketable. However,
there are circumstances when a resting
order may become marketable, such as
orders that become eligible to trade
when a PBBO unlocks or uncrosses (e.g.,
MPL and Pegged Orders) or orders that
have a trading restriction at specified
prices (e.g., as discussed in greater
detail below, MPL–ALO Orders or
orders with an MTS Modifier). To
maximize the potential for orders to
trade, the Exchange continually
evaluates whether resting orders may
become marketable. Events that could
trigger a resting order to become
marketable include updates to the
working price of such order, updates to
the PBBO or NBBO, changes to other
orders on the NYSE Arca Book, or
processing of inbound messages (e.g., an
update to Price Bands under the
Regulation NMS Plan to Address
Extraordinary Market Volatility). To
address such circumstances, the
Exchange proposes to include in
proposed Rule 7.36–E(a)(5) that a resting
order may become an Aggressing Order
if its working price changes, if the PBBO
or NBBO is updated, because of changes
to other orders on the NYSE Arca Book,
or when processing inbound messages.
The order that becomes the
Aggressing Order is the liquidity-taking
order. Generally, if resting orders on
both sides are determined to be an
Aggressing Order, e.g., a locked PBBO
becomes unlocked and as a result, MPL
Orders are repriced, the later-arriving
order will be the liquidity-taking order.9
However, if the evaluation results in
only one side becoming an Aggressing
Order, e.g., an order with an MTS
Modifier becomes eligible to trade and
the contra-side order(s) have no working
price changes, the order with the MTS
Modifier would become the liquiditytaking Aggressing Order. As described
below, the Exchange proposes to use the
term ‘‘Aggressing Order’’ in the rule text
relating to the MTS Modifier and the
MPL–ALO Order. Because an
Aggressing Order becomes a liquidity
taker, such term could be applicable to
other circumstances. For example, an
order with a Non-Display Remove
Modifier that trades as a liquidity taker
would also be considered an Aggressing
Order. However, at this time, the
Exchange does not propose to amend its
rules to use the term ‘‘Aggressing
Order’’ because the rule already
specifies which order is the liquidity
taker.
9 See,
E:\FR\FM\22JAN1.SGM
e.g., Rule 7.31–E(d)(3)(B).
22JAN1
ethrower on DSK3G9T082PROD with NOTICES
3040
Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices
Proposed Amendments Relating to MPL
and MPL–ALO Orders
The Exchange proposes to amend the
first sentence of current Rule 7.31–
E(d)(3)(C) to make this text applicable to
any marketable MPL Order, and not just
an arriving MPL Order. To effect this
change, the Exchange proposes to use
the term ‘‘Aggressing Order’’ and
replace the phrase ‘‘[o]n arrival, an MPL
Order to buy (sell) that is eligible to
trade’’ with the phrase, ‘‘[a]n Aggressing
MPL Order to buy (sell).’’
The Exchange also proposes to amend
the first sentence of current Rule 7.31–
E(d)(3)(C) to describe at what price an
Aggressing MPL Order would trade with
contra-side resting orders that are priced
better than the midpoint. The rule
currently provides that an arriving MPL
Order to buy (sell) would trade with
resting orders to sell (buy) with a
working price at or below (above) the
midpoint of the PBBO. The Exchange
proposes to specify that when an
Aggressing MPL Order trades with
resting orders priced better than the
midpoint, it will trade at the working
price of the resting orders, which is
current functionality. For example, if
the PBB is 10.10 and the midpoint is
10.13, and there are non-displayed sell
orders of 100 shares with working prices
of 10.11 and 10.12, an Aggressing MPL
Order to buy with a limit of 10.13 for
200 shares would trade with such nondisplayed sell orders at 10.11 and 10.12,
respectively. The Exchange believes that
this proposed amendment would
promote transparency in Exchange rules
regarding at what price an Aggressing
MPL Order would trade.
By using the term ‘‘Aggressing
Order,’’ this rule would be applicable to
a resting MPL Order that becomes
marketable, such as after a PBBO
unlocks or uncrosses. In the above
example, if the MPL Order to buy is
ineligible to trade because of a crossed
PBBO, and while the PBBO is crossed,
the Exchange receives the two nondisplayed sell orders, when the PBBO
uncrosses and the new midpoint is
10.13, the resting MPL Order would
become an Aggressing Order and would
trade with the non-displayed sell orders
at 10.11 and 10.12, respectively.
The Exchange also proposes to amend
the second sentence of Rule 7.31–
E(d)(3)(C) to replace the term ‘‘incoming
orders’’ with the term ‘‘Aggressing
Orders.’’ This proposed rule change
would provide greater specificity that
any contra-side order that is an
Aggressing Order, as defined in
proposed Rule 7.36–E(a)(5), would trade
with a resting MPL Order at the
midpoint of the PBBO.
VerDate Sep<11>2014
19:00 Jan 19, 2018
Jkt 244001
The Exchange also proposes to amend
the rule governing MPL–ALO Orders to
make similar changes. Currently, MPL–
ALO Orders are described in Rule 7.31–
E(d)(3)(F). Because of changes described
below relating to MTS, as proposed,
MPL–ALO Orders would be described
in Rule 7.31–E(d)(3)(E).
In amending proposed Rule 7.31–
E(d)(3)(E), the Exchange proposes to
break the current rule text into three
sub-paragraphs. The first sentence of
current Rule 7.31–E(d)(3)(F), which
provides that an MPL Order may be
designated with an ALO Modifier,
would follow Rule 7.31–E(d)(3)(E). The
current second sentence of Rule 7.31–
E(d)(3)(F) would be set forth in
proposed Rule 7.31–E(d)(3)(E)(i). The
Exchange proposes to amend this rule in
the same manner that it is proposing to
amend the first sentence of Rule 7.31–
E(d)(3)(C), described above. In addition,
the Exchange proposes a nonsubstantive, clarifying amendment to
add that an arriving MPL–ALO Order
would trade with a contra-side samepriced order that has been designated
with a Non-Display Remove Modifier,
which is current functionality.
Accordingly, proposed Rule 7.31–
E(d)(3)(E)(i) would provide that an
Aggressing MPL–ALO Order to buy (sell)
will trade with resting orders to sell
(buy) with a working price below
(above) the midpoint of the PBBO at the
working price of the resting orders, but
will not trade with resting orders to sell
(buy) priced at the midpoint of the
PBBO unless such resting order is
designated with a Non-Display Remove
Modifier pursuant to paragraph (d)(3)(F)
of this Rule (proposed new text
italicized).10
Because an Aggressing MPL–ALO
Order does not trade with resting
contra-side orders priced at the
midpoint of the PBBO (unless the
resting order has the Non-Display
Remove Modifier), the Exchange
proposes to specify the circumstances of
when an MPL–ALO Order would be
eligible to trade if it locks contra-side
orders, which would differ depending
on whether the contra-side order is
displayed.11 The first sentence of
Proposed Rule 7.31–E(d)(3)(E)(ii) would
provide that if an MPL–ALO Order to
buy (sell) cannot trade with a same10 A resting MPL–ALO Order that becomes an
Aggressing Order would trade consistent with
proposed Rule 7.31–E(d)(3)(E)(i) and therefore
would trade with contra-side orders priced better
than the midpoint, but would not trade at the
midpoint unless such order had a Non-Display
Remove Modifier.
11 A displayed odd-lot order that is not included
in the calculation of the PBBO could be at the same
price as an MPL Order.
PO 00000
Frm 00083
Fmt 4703
Sfmt 4703
priced resting order to sell (buy), a
subsequently arriving order to sell (buy)
eligible to trade at the midpoint would
trade ahead of a resting order to sell
(buy) that is not displayed at that price.
Accordingly, if an MPL–ALO Order
locks a non-displayed order, such
resting MPL–ALO Order can trade at
that price with a subsequent order.
By contrast, the second sentence of
proposed Rule 7.31–E(d)(3)(E)(ii) would
provide that if such resting order to sell
(buy) is displayed, the MPL–ALO Order
to buy (sell) would not be eligible to
trade at that price. Accordingly, if an
MPL–ALO Order locks a displayed
order, such resting MPL–ALO Order
would not be eligible to trade at that
price with any interest. The Exchange
proposes to treat displayed orders
locked by an MPL–ALO Order
differently to avoid having nondisplayed orders trade ahead of a samepriced, same-side displayed order.
Proposed Amendments Relating to MTS
The Exchange proposes to consolidate
all references to MTS modifiers in Rule
7.31–E in proposed Rule 7.31–E(i)(3) as
a new additional order instruction and
modifier to be referred to as the
‘‘Minimum Trade Size (‘MTS’)
Modifier.’’ As proposed, Rule 7.31–
E(i)(3) would provide that a Limit IOC
Order, MPL Order, or Tracking Order
may be designated with an MTS
Modifier, which is existing
functionality. Because this proposed
rule would specify which orders would
be eligible for the MTS Modifier, the
Exchange proposes to delete existing
rule text specifying which orders are
and are not eligible for an MTS
Modifier.12 Proposed Rule 7.31–E(i)(3)
is based in part on NYSE American Rule
7.31E(i)(3).
Proposed Rule 7.31–E(i)(3)(A) would
provide that an MTS must be a
minimum of a round lot and that an
order with an MTS Modifier would be
rejected if the MTS is less than a round
lot or if the MTS is larger than the size
of the order. This proposed rule text is
based on the next-to-last sentence of
current Rule 7.31–E(b)(2)(A) and the
first sentence of current Rule 7.31–
E(d)(3)(D), and in part on the first
sentence of current Rule 7.31–E(d)(4)(C),
with non-substantive differences to use
common terminology when applying
12 The Exchange proposes to delete references to
MTS in Rules 7.31–E(b)(2)(A), 7.31–E(b)(2)(B),
7.31–E(d)(3)(D), 7.31–E(d)(4)(C), 7.31–E(e)(3)(B),
and 7.46–E(f)(1)(A). As noted above, because
current Rule 7.31–E(d)(3)(D) would be deleted in its
entirety, the remaining sub-paragraphs of Rule
7.31–E(d)(3) would be renumbered accordingly. In
addition, current Rule 7.31–E(d)(4)(C) would be
deleted in its entirety.
E:\FR\FM\22JAN1.SGM
22JAN1
ethrower on DSK3G9T082PROD with NOTICES
Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices
this requirement to all of the order types
eligible for an MTS Modifier.13
Proposed Rule 7.31–E(i)(3)(A) is based
on NYSE American Rule 7.31E(i)(3)(A)
without any differences.
Proposed Rule 7.31–E(i)(3)(B) would
provide that an order to buy (sell) with
an MTS Modifier would trade with sell
(buy) orders in the NYSE Arca Book that
in the aggregate meet such order’s MTS.
This proposed rule text is based on the
third sentence of Rule 7.31–E(b)(2)(A)
and the second sentence of Rule 7.31–
E(d)(3)(D) with non-substantive
differences to use common terminology
when applying this requirement to all of
the order types eligible for an MTS
Modifier.
Because Tracking Orders do not trade
on arrival, this rule text would be
applicable only to MPL Orders and
Limit IOC Orders with an MTS
Modifier. Proposed Rule 7.31–E(i)(3)(B)
is based on NYSE American Rule
7.31E(i)(3)(B)(i) without any differences.
Proposed Rule 7.31–E(i)(3)(C) would
provide that an order with an MTS
Modifier that is designated Day and
cannot be satisfied on arrival would not
trade and would be ranked in the NYSE
Arca Book. This proposed rule text is
based on the third sentence of Rule
7.31–E(d)(3)(D) with non-substantive
differences to reference orders
designated Day, i.e., MPL Orders and
MPL–ALO Orders. The first sentence of
Rule 7.31–E(i)(3)(C) is based on NYSE
American Rule 7.31E(i)(3)(C) without
any differences.
The Exchange further proposes to
describe new functionality relating to
when an order with an MTS Modifier
that is designated Day would not be
eligible to trade. In short, if a laterarriving contra-side order can meet the
MTS of a resting order with an MTS
Modifier, the two orders would trade
unless the execution would be
inconsistent with either intra-market
price priority or would result in a nondisplayed order trading ahead of a sameside, same-priced displayed order.14
Therefore, as proposed, the Exchange
would not permit an order with an MTS
Modifier that crosses other displayed or
non-displayed orders on the NYSE Arca
Book to trade at prices that are worse
than the price of such contra-side
orders. As further proposed, the
Exchange would not permit a resting
order with an MTS Modifier to trade at
13 Nasdaq also requires that its Minimum
Quantity Order also have a size of at least a round
lot. See Nasdaq Rule 4703(e).
14 Rule 7.36–E(c) provides that the Exchange
ranks all non-marketable orders on the NYSE Arca
Book according to price—time priority.
VerDate Sep<11>2014
19:00 Jan 19, 2018
Jkt 244001
a price equal to a displayed contra-side
order.15
To reflect these changes, the second
sentence of Rule 7.31–E(i)(3)(C) would
provide that when a buy (sell) order
with an MTS Modifier that is designated
Day is ranked in the NYSE Arca Book,
it would not be eligible to trade:
(i) At a price equal to or above (below)
any sell (buy) orders that are displayed
and that have a working price equal to
or below (above) the working price of
such order with an MTS Modifier, or
(ii) at a price above (below) any sell
(buy) orders that are not displayed and
that have a working price below (above)
the working price of such order with an
MTS Modifier.
For example,
• If the PBBO is 10.10 x 10.16, on the
NYSE Arca Book there is a sell order
(‘‘Order A’’) ranked Priority 3—NonDisplay Orders for 50 shares at 10.12
and a sell order (‘‘Order B’’) ranked
Priority 2—Display Orders for 25 shares
at 10.11, and the Exchange receives a
buy MPL Order (‘‘Order C’’) with an
MTS Modifier for 100 shares with a
10.16 limit, because the MTS cannot be
met, Order C will not trade and will be
ranked in the NYSE Arca Book at the
midpoint of 10.13. At this point, the
Exchange would have a non-displayed
buy order crossing both non-displayed
and displayed sell orders on the NYSE
Arca Book. If the Exchange then
receives a non-displayed sell order
(‘‘Order D’’) for 100 shares at 10.11,
even though Order D would be
marketable against Order C, it would not
trade because a trade at 10.13 would be
above the price of resting sell orders.16
Order D would be added to the NYSE
Arca Book at 10.11.
• If next, the Exchange receives a buy
order (‘‘Order E’’) to buy 25 shares at
10.11, it would trade with Order B. As
discussed above, this execution would
trigger the Exchange to evaluate whether
Order C becomes marketable against
contra-side orders.17 In this scenario,
because Order B has now executed,
Order C is no longer restricted from
trading at 10.11. Because Order C’s
restriction has been lifted and Order D
does not have a working price change,
Order C would become an Aggressing
15 At this time, the only resting orders with an
MTS on the Exchange subject to this requirement
would be MPL Orders. In such case, a contra-side
order that is displayed and between the PBBO
would be an odd-lot sized order; a round-lot sized
displayed order would be reflected in the PBBO.
16 Pursuant to Rule 7.31–E(d)(3)(C), an Aggressing
Order will trade with a resting MPL Order at the
midpoint of the PBBO.
17 See discussion infra regarding the second
sentence to proposed Rule 7.36–E(a)(5).
PO 00000
Frm 00084
Fmt 4703
Sfmt 4703
3041
Order and trade as the liquidity taker
with Order D at 10.11.
Proposed Rule 7.31–E(i)(3)(D) would
provide that an order with an MTS
Modifier that is designated IOC and
cannot be immediately satisfied would
be cancelled in its entirety. This
proposed rule text is based on the last
sentence of Rule 7.31–E(b)(2)(A), with
non-substantive differences to specify
that this functionality would be
applicable to any orders designated IOC
that have an MTS Modifier, i.e., Limit
IOC Orders and MPL–IOC Orders.
Proposed Rule 7.31–E(i)(3)(D) is based
on NYSE American Rule 7.31E(i)(3)(D)
without any differences.
Proposed Rule 7.31–E(i)(3)(E) would
provide that a resting order to buy (sell)
with an MTS Modifier would trade with
individual sell (buy) orders that each
meets the MTS.18 This proposed rule
text is based on the fourth sentence of
Rule 7.31–E(d)(3)(D) with a nonsubstantive difference to use the same
terminology as proposed Rule 7.31–
E(i)(3)(B) because a resting order with
an MTS Modifier only trades if contraside individual orders each meets such
order’s MTS. The Exchange proposes
non-substantive differences to use
common terminology when applying
this requirement to all of the order types
eligible for an MTS Modifier. Proposed
Rule 7.31–E(i)(3)(E) is based on NYSE
American Rule 7.31E(i)(3)(E) without
any differences.
Proposed Rules 7.31–E(i)(3)(E)(i)–(ii)
would set forth additional requirements
for how a resting order with an MTS
Modifier would trade. Proposed Rule
7.31–E(i)(3)(E)(i) would provide that if
an Aggressing Order to sell (buy) does
not meet the MTS of the resting order
to buy (sell) with an MTS Modifier, that
Aggressing Order would not trade with
and may trade through such order with
an MTS Modifier. This proposed rule
text is based on the fifth sentence of
current Rule 7.31–E(d)(3)(D) and the
second sentence of current Rule 7.31–
E(d)(4)(C) with non-substantive
differences to use common terminology
when applying this requirement to all of
the order types eligible for an MTS
Modifier. Proposed Rule 7.31–
E(i)(3)(E)(i) is based on NYSE American
Rule 7.31E(i)(3)(E)(i) with a nonsubstantive difference to use the term
‘‘Aggressing Order.’’
Proposed Rule 7.31–E(i)(3)(E)(ii)
would provide that if a resting nondisplayed sell (buy) order did not meet
the MTS of a same-priced resting order
18 A resting order with an MTS Modifier that
becomes an Aggressing Order would trade
consistent with proposed Rule 7.31–E(i)(3)(E) and
therefore would trade with individual orders that
each meet the MTS.
E:\FR\FM\22JAN1.SGM
22JAN1
3042
Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices
ethrower on DSK3G9T082PROD with NOTICES
to buy (sell) with an MTS Modifier, a
subsequently arriving sell (buy) order
that meets the MTS would trade ahead
of such resting non-displayed sell (buy)
order at that price. This proposed rule
text is based in part on the second
sentence of Rule 7.31–E(d)(4)(C) with
non-substantive differences to use
common terminology when applying
this requirement to all of the order types
eligible for an MTS Modifier. This
proposed rule text is also based in part
on NYSE American Rule
7.31E(i)(3)(E)(ii).
However, the Exchange proposes a
difference from current text and the
NYSE American Rule to add that the
subsequently arriving order could trade
ahead of a resting non-displayed order
at that price, e.g., at the internal locking
price. This proposed behavior is
consistent with the proposed
amendment to MPL–ALO Orders,
described above in proposed Rule 7.31–
E(d)(3)(E)(ii). In addition, as discussed
above, pursuant to proposed Rule 7.31–
E(i)(3)(C)(i), if an order with an MTS
Modifier is locked by a displayed order,
the resting order with an MTS Modifier
would not be eligible to trade at that
price. In such case, the subsequently
arriving order would not trade with the
order with an MTS Modifier.
Proposed Rule 7.31–E(i)(3)(F) would
provide that a resting order with an
MTS Modifier would be cancelled if it
is traded in part or reduced in size and
the remaining quantity is less than such
order’s MTS. This proposed rule text is
based on the last sentence of Rule 7.31–
E(d)(3)(D) and the last sentence of Rule
7.31–E(d)(4)(C) with non-substantive
differences to use common terminology
when applying this requirement to all of
the order types eligible for an MTS
Modifier. Proposed Rule 7.31–E(i)(3)(F)
is based on NYSE American Rule
7.31E(i)(3)(F) without any differences
Because of the technology changes
associated with these proposed rule
change, the Exchange will announce the
implementation date of this proposed
rule change by Trader Update. The
Exchange anticipates that the
implementation date will be in the first
quarter of 2018.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),19 in general, and furthers the
objectives of Section 6(b)(5),20 in
particular, because it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
19 15
U.S.C. 78f(b).
20 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014
19:00 Jan 19, 2018
Jkt 244001
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.
The Exchange believes that the
proposed definition of ‘‘Aggressing
Order’’ in Rule 7.36–E would remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system and, in
general, protect investors and the public
interest because it would provide for a
definition in Exchange rules that
describes orders that are or become
marketable. The Exchange believes that
the proposed definition would promote
transparency in Exchange rules by
providing detail regarding
circumstances when a resting order may
become marketable, and thus would be
an Aggressing Order. The Exchange
further believes that use of such
definition would promote clarity in
Exchange rules, particularly in the
context of the amendments to MPL
Orders and orders with an MTS
Modifier.
The Exchange believes that the
proposed amendments to Rule 7.31–
E(d)(3)(C) and (E) to use the term
‘‘Aggressing Order’’ and to describe the
prices at which an Aggressing MPL
Order would trade would remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system and, in
general, protect investors and the public
interest because it would promote
clarity and transparency in Exchange
rules regarding the behavior of
marketable MPL and MPL–ALO Orders.
In particular, the rule would provide
greater specificity regarding how a
resting MPL Order that becomes an
Aggressing Order would trade.
The Exchange believes that the
proposed amendments to Rule 7.31–
E(d)(3)(E) regarding when a resting
MPL–ALO Order that locks contra-side,
same-priced orders would be eligible to
trade would remove impediments to,
and perfect the mechanism of, a free and
open market and a national market
system and, in general, protect investors
and the public interest because it would
describe circumstances when a
subsequently arriving order could trade
with the MPL–ALO Order. The
proposed rule change would protect
displayed orders by not allowing a
subsequently arriving order to trade
ahead of a same-priced, same-side
displayed order.
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
The Exchange believes that the
proposed amendment to describe the
existing MTS Modifier in proposed Rule
7.31–E(i)(3) would remove impediments
to, and perfect the mechanism of, a free
and open market and a national market
system and, in general, protect investors
and the public interest because it would
promote transparency in Exchange rules
because MTS Modifiers for different
order types operate in the same manner.
The Exchange believes that by
consolidating such references in a single
location in Rule 7.31–E, the rule will be
easier for members, the Commission,
and the public to navigate.
Finally, the Exchange believes that
the proposal regarding when a resting
order with an MTS Modifier would be
eligible to trade would remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system and, in
general, protect investors and the public
interest, because the proposed rule
change would ensure that there would
not be an execution of a resting order
with an MTS Modifier that either would
be inconsistent with intra-market price
priority or would result in a nondisplayed order trading ahead of a sameside, same-priced displayed order. This
proposed rule change would therefore
promote just and equitable principles of
trade by ensuring that displayed interest
does not get traded through by a nondisplayed order.
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
Exchange believes that the proposed
rule change is not designed to address
any competitive issues, but rather to add
further clarity to Exchange rules by
defining the term ‘‘Aggressing Order,’’
using that term in connection with MPL
Orders, and consolidating references to
MTS Modifiers in a single location in
Exchange rules. In addition, the rule is
designed to ensure that resting orders
with trading restrictions, such as MPL–
ALO Orders and resting orders with an
MTS Modifier, would not trade through
displayed orders or violate intra-market
price priority.
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.
E:\FR\FM\22JAN1.SGM
22JAN1
Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the 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 prior to 30 days from the date
on which it was filed, or such shorter
time as the Commission may designate,
the proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 21 and Rule 19b–4(f)(6)
thereunder.22
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEArca–2018–01 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
21 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission 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. The
Exchange has satisfied this requirement.
ethrower on DSK3G9T082PROD with NOTICES
22 17
VerDate Sep<11>2014
19:00 Jan 19, 2018
Jkt 244001
All submissions should refer to File
Number SR–NYSEArca–2018–01. 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 website (https://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 website 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 the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSEArca–2018–01 and
should be submitted on or before
February 12, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–00975 Filed 1–19–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Sunshine Act Meetings
2:00 p.m. on Wednesday,
January 24, 2018.
PLACE: Closed Commission Hearing
Room 10800.
TIME AND DATE:
23 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00086
Fmt 4703
Sfmt 4703
3043
This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
Commissioner Piwowar, as duty
officer, voted to consider the items
listed for the closed meeting in closed
session.
The subject matters of the closed
meeting will be:
Settlement of injunctive actions;
Institution and settlement of
administrative proceedings; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed; please contact
Brent J. Fields from the Office of the
Secretary at (202) 551–5400.
STATUS:
Dated: January 17, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018–01164 Filed 1–18–18; 4:15 pm]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–82503; File Nos. SR–
BatsBYX–2017–11; SR–BatsBZX–2017–38;
SR–BatsEDGA–2017–13; SR–BatsEDGX–
2017–22; SR–BOX–2017–16; SR–BX–2017–
023; SR–C2–2017–017; SR–CBOE–2017–
040; SR–CHX–2017–08; SR–FINRA–2017–
011; SR–GEMX–2017–17; SR–IEX–2017–16;
SR–ISE–2017–45; SR–MIAX–2017–18; SR–
MRX–2017–04; SR–NASDAQ–2017–046;
SR–NYSE–2017–22; SR–NYSEArca–2017–
52; SR–NYSEMKT–2017–26; SR–PEARL–
2017–20; SR–PHLX–2017–37]
E:\FR\FM\22JAN1.SGM
22JAN1
]]>Agencies
[Federal Register Volume 83, Number 14 (Monday, January 22, 2018)]
[Notices]
[Pages 3038-3043]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00975]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-82504; File No. SR-NYSEArca-2018-01]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.31-
E Relating to Mid-Point Liquidity Orders and the Minimum Trade Size
Modifier and Rule 7.36-E To Add a Definition of ``Aggressing Order''
January 16, 2018.
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 January 3, 2018, NYSE Arca, Inc. (the ``Exchange'' 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 Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 7.31-E relating to Mid-Point
Liquidity Orders and the Minimum Trade Size modifier and Rule 7.36-E to
add a definition of ``Aggressing Order.'' 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.
[[Page 3039]]
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Mid-Point Liquidity (``MPL'') Orders and the Minimum Trade Size
(``MTS'') modifier and Rule 7.36-E (Order Ranking and Display) to add a
definition of ``Aggressing Order.'' [sic] For MPL Orders, the Exchange
proposes to amend the price at which a marketable MPL Order would trade
when there are resting orders priced better than the midpoint. The
Exchange further proposes to amend functionality related to MPL-ALO
Orders to describe how orders would trade if an MPL-ALO Order locks
contra-side same-priced interest on the NYSE Arca Book. For MTS, the
Exchange proposes to move all discussion relating to the MTS modifier
to new sub-paragraph (i)(3) of Rule 7.31-E and in so doing, amend how
resting orders with an MTS modifier would trade in specified
circumstances.
Background
As provided for in current Rule 7.31-E(d)(3)(C), on arrival, an MPL
Order to buy (sell) that is eligible to trade will trade with resting
orders to sell (buy) with a working price at or below (above) the
midpoint of the PBBO (i.e., priced better than the midpoint of the
PBBO). The rule further provides that resting MPL Orders to buy (sell)
will trade at the midpoint of the PBBO against all incoming orders to
sell (buy) priced at or below (above) the midpoint of the PBBO (i.e.,
priced better than the midpoint of the PBBO).
Current Rule 7.31-E(d)(3)(F) provides that an MPL Order may be
designated with an ALO Modifier (an ``MPL-ALO Order'') and that on
arrival, an MPL-ALO Order to buy (sell) will trade with resting orders
to sell (buy) with a working price below (above) the midpoint of the
PBBO, but will not trade with resting orders to sell (buy) priced at
the midpoint of the PBBO. The rule further provides that a resting MPL-
ALO Order to buy (sell) will trade with an arriving order to sell (buy)
that is eligible to trade at the midpoint of the PBBO.
The MTS modifier is currently available for Limit IOC Orders,\4\
MPL Orders,\5\ and Tracking Orders.\6\ As such, the MTS modifier is
currently available only for orders that are not displayed and do not
route. On arrival, both Limit IOC Orders and MPL Orders with an MTS
modifier will trade against contra-side orders in the NYSE Arca Book
that in the aggregate, meet the MTS.\7\ Once resting, MPL Orders and
Tracking Orders with an MTS modifier function similarly: If a contra-
side order does not meet the MTS, the incoming order will not trade
with and may trade through the resting order with the MTS modifier. In
addition, both MPL Orders and Tracking Orders with an MTS modifier will
be cancelled if such orders are traded in part or reduced in size and
the remaining quantity is less than the MTS.
---------------------------------------------------------------------------
\4\ See Rule 7.31-E(b)(2)(A) (``A Limit IOC Order to buy (sell)
may be designated with a minimum trade size (``MTS''), which will
trade against sell (buy) orders in the NYSE Arca Book that in the
aggregate, meets its MTS. On entry, a Limit IOC Order with an MTS
must have a minimum of one round lot and will be rejected on arrival
if the MTS is larger than the size of the Limit IOC Order. A Limit
IOC Order with an MTS that cannot be immediately traded at its
minimum size will be cancelled in its entirety.'')
\5\ See Rule 7.31-E(d)(3)(D) (``An MPL Order may be designated
with an MTS of a minimum of one round lot and will be rejected on
arrival if the MTS is larger than the size of the MPL Order. On
arrival, an MPL Order to buy (sell) with an MTS will trade with sell
(buy) orders in the NYSE Arca Book that in the aggregate, meets its
MTS. If the sell (buy) orders do not meet the MTS, the MPL Order to
buy (sell) will not trade on arrival and will be ranked in the NYSE
Arca Book. Once resting, an MPL Order to buy (sell) with an MTS will
trade with an order to sell (buy) that meets the MTS and is priced
at or below (above) the midpoint of the PBBO. If an order does not
meet an MPL Order's MTS, the order will not trade with and may trade
through such MPL Order. If an MPL Order with an MTS is traded in
part or reduced in size and the remaining quantity of the order is
less than the MTS, the MPL Order will be cancelled.'')
\6\ See Rule 7.31-E(d)(4)(C) (``A Tracking Order may be
designated with an MTS of one round lot or more. If an incoming
order cannot meet the MTS, a Tracking Order with a later working
time will trade ahead of the Tracking Order designated with an MTS
with an earlier working time. If a Tracking Order with an MTS is
traded in part or reduced in size and the remaining quantity is less
than the MTS, the Tracking Order will be cancelled.'')
\7\ Tracking Orders, including Tracking Orders with an MTS
modifier, are passive orders that do not trade on arrival. See Rule
7.31-E(d)(4)(A).
---------------------------------------------------------------------------
Proposed Definition of ``Aggressing Order''
The Exchange proposes to amend Rule 7.36-E to add a definition that
would be used for purposes of Rule 7-E. Proposed Rule 7.36-E(a)(5)
would define the term ``Aggressing Order'' to mean a buy (sell) order
that is or becomes marketable against sell (buy) interest on the NYSE
Arca Book.\8\ This term would therefore refer to orders that are
marketable against other orders on the NYSE Arca Book, such as incoming
orders and orders that have returned unexecuted after routing.
---------------------------------------------------------------------------
\8\ The term ``marketable'' is defined in Rule 1.1(y) to mean
for a Limit Order, an order than [sic] can be immediately executed
or routed.
---------------------------------------------------------------------------
This term would also be applicable to resting orders that become
marketable due to one or more events. For the most part, resting orders
will have already traded with contra-side orders against which they are
marketable. However, there are circumstances when a resting order may
become marketable, such as orders that become eligible to trade when a
PBBO unlocks or uncrosses (e.g., MPL and Pegged Orders) or orders that
have a trading restriction at specified prices (e.g., as discussed in
greater detail below, MPL-ALO Orders or orders with an MTS Modifier).
To maximize the potential for orders to trade, the Exchange continually
evaluates whether resting orders may become marketable. Events that
could trigger a resting order to become marketable include updates to
the working price of such order, updates to the PBBO or NBBO, changes
to other orders on the NYSE Arca Book, or processing of inbound
messages (e.g., an update to Price Bands under the Regulation NMS Plan
to Address Extraordinary Market Volatility). To address such
circumstances, the Exchange proposes to include in proposed Rule 7.36-
E(a)(5) that a resting order may become an Aggressing Order if its
working price changes, if the PBBO or NBBO is updated, because of
changes to other orders on the NYSE Arca Book, or when processing
inbound messages.
The order that becomes the Aggressing Order is the liquidity-taking
order. Generally, if resting orders on both sides are determined to be
an Aggressing Order, e.g., a locked PBBO becomes unlocked and as a
result, MPL Orders are repriced, the later-arriving order will be the
liquidity-taking order.\9\ However, if the evaluation results in only
one side becoming an Aggressing Order, e.g., an order with an MTS
Modifier becomes eligible to trade and the contra-side order(s) have no
working price changes, the order with the MTS Modifier would become the
liquidity-taking Aggressing Order. As described below, the Exchange
proposes to use the term ``Aggressing Order'' in the rule text relating
to the MTS Modifier and the MPL-ALO Order. Because an Aggressing Order
becomes a liquidity taker, such term could be applicable to other
circumstances. For example, an order with a Non-Display Remove Modifier
that trades as a liquidity taker would also be considered an Aggressing
Order. However, at this time, the Exchange does not propose to amend
its rules to use the term ``Aggressing Order'' because the rule already
specifies which order is the liquidity taker.
---------------------------------------------------------------------------
\9\ See, e.g., Rule 7.31-E(d)(3)(B).
---------------------------------------------------------------------------
[[Page 3040]]
Proposed Amendments Relating to MPL and MPL-ALO Orders
The Exchange proposes to amend the first sentence of current Rule
7.31-E(d)(3)(C) to make this text applicable to any marketable MPL
Order, and not just an arriving MPL Order. To effect this change, the
Exchange proposes to use the term ``Aggressing Order'' and replace the
phrase ``[o]n arrival, an MPL Order to buy (sell) that is eligible to
trade'' with the phrase, ``[a]n Aggressing MPL Order to buy (sell).''
The Exchange also proposes to amend the first sentence of current
Rule 7.31-E(d)(3)(C) to describe at what price an Aggressing MPL Order
would trade with contra-side resting orders that are priced better than
the midpoint. The rule currently provides that an arriving MPL Order to
buy (sell) would trade with resting orders to sell (buy) with a working
price at or below (above) the midpoint of the PBBO. The Exchange
proposes to specify that when an Aggressing MPL Order trades with
resting orders priced better than the midpoint, it will trade at the
working price of the resting orders, which is current functionality.
For example, if the PBB is 10.10 and the midpoint is 10.13, and there
are non-displayed sell orders of 100 shares with working prices of
10.11 and 10.12, an Aggressing MPL Order to buy with a limit of 10.13
for 200 shares would trade with such non-displayed sell orders at 10.11
and 10.12, respectively. The Exchange believes that this proposed
amendment would promote transparency in Exchange rules regarding at
what price an Aggressing MPL Order would trade.
By using the term ``Aggressing Order,'' this rule would be
applicable to a resting MPL Order that becomes marketable, such as
after a PBBO unlocks or uncrosses. In the above example, if the MPL
Order to buy is ineligible to trade because of a crossed PBBO, and
while the PBBO is crossed, the Exchange receives the two non-displayed
sell orders, when the PBBO uncrosses and the new midpoint is 10.13, the
resting MPL Order would become an Aggressing Order and would trade with
the non-displayed sell orders at 10.11 and 10.12, respectively.
The Exchange also proposes to amend the second sentence of Rule
7.31-E(d)(3)(C) to replace the term ``incoming orders'' with the term
``Aggressing Orders.'' This proposed rule change would provide greater
specificity that any contra-side order that is an Aggressing Order, as
defined in proposed Rule 7.36-E(a)(5), would trade with a resting MPL
Order at the midpoint of the PBBO.
The Exchange also proposes to amend the rule governing MPL-ALO
Orders to make similar changes. Currently, MPL-ALO Orders are described
in Rule 7.31-E(d)(3)(F). Because of changes described below relating to
MTS, as proposed, MPL-ALO Orders would be described in Rule 7.31-
E(d)(3)(E).
In amending proposed Rule 7.31-E(d)(3)(E), the Exchange proposes to
break the current rule text into three sub-paragraphs. The first
sentence of current Rule 7.31-E(d)(3)(F), which provides that an MPL
Order may be designated with an ALO Modifier, would follow Rule 7.31-
E(d)(3)(E). The current second sentence of Rule 7.31-E(d)(3)(F) would
be set forth in proposed Rule 7.31-E(d)(3)(E)(i). The Exchange proposes
to amend this rule in the same manner that it is proposing to amend the
first sentence of Rule 7.31-E(d)(3)(C), described above. In addition,
the Exchange proposes a non-substantive, clarifying amendment to add
that an arriving MPL-ALO Order would trade with a contra-side same-
priced order that has been designated with a Non-Display Remove
Modifier, which is current functionality. Accordingly, proposed Rule
7.31-E(d)(3)(E)(i) would provide that an Aggressing MPL-ALO Order to
buy (sell) will trade with resting orders to sell (buy) with a working
price below (above) the midpoint of the PBBO at the working price of
the resting orders, but will not trade with resting orders to sell
(buy) priced at the midpoint of the PBBO unless such resting order is
designated with a Non-Display Remove Modifier pursuant to paragraph
(d)(3)(F) of this Rule (proposed new text italicized).\10\
---------------------------------------------------------------------------
\10\ A resting MPL-ALO Order that becomes an Aggressing Order
would trade consistent with proposed Rule 7.31-E(d)(3)(E)(i) and
therefore would trade with contra-side orders priced better than the
midpoint, but would not trade at the midpoint unless such order had
a Non-Display Remove Modifier.
---------------------------------------------------------------------------
Because an Aggressing MPL-ALO Order does not trade with resting
contra-side orders priced at the midpoint of the PBBO (unless the
resting order has the Non-Display Remove Modifier), the Exchange
proposes to specify the circumstances of when an MPL-ALO Order would be
eligible to trade if it locks contra-side orders, which would differ
depending on whether the contra-side order is displayed.\11\ The first
sentence of Proposed Rule 7.31-E(d)(3)(E)(ii) would provide that if an
MPL-ALO Order to buy (sell) cannot trade with a same-priced resting
order to sell (buy), a subsequently arriving order to sell (buy)
eligible to trade at the midpoint would trade ahead of a resting order
to sell (buy) that is not displayed at that price. Accordingly, if an
MPL-ALO Order locks a non-displayed order, such resting MPL-ALO Order
can trade at that price with a subsequent order.
---------------------------------------------------------------------------
\11\ A displayed odd-lot order that is not included in the
calculation of the PBBO could be at the same price as an MPL Order.
---------------------------------------------------------------------------
By contrast, the second sentence of proposed Rule 7.31-
E(d)(3)(E)(ii) would provide that if such resting order to sell (buy)
is displayed, the MPL-ALO Order to buy (sell) would not be eligible to
trade at that price. Accordingly, if an MPL-ALO Order locks a displayed
order, such resting MPL-ALO Order would not be eligible to trade at
that price with any interest. The Exchange proposes to treat displayed
orders locked by an MPL-ALO Order differently to avoid having non-
displayed orders trade ahead of a same-priced, same-side displayed
order.
Proposed Amendments Relating to MTS
The Exchange proposes to consolidate all references to MTS
modifiers in Rule 7.31-E in proposed Rule 7.31-E(i)(3) as a new
additional order instruction and modifier to be referred to as the
``Minimum Trade Size (`MTS') Modifier.'' As proposed, Rule 7.31-E(i)(3)
would provide that a Limit IOC Order, MPL Order, or Tracking Order may
be designated with an MTS Modifier, which is existing functionality.
Because this proposed rule would specify which orders would be eligible
for the MTS Modifier, the Exchange proposes to delete existing rule
text specifying which orders are and are not eligible for an MTS
Modifier.\12\ Proposed Rule 7.31-E(i)(3) is based in part on NYSE
American Rule 7.31E(i)(3).
---------------------------------------------------------------------------
\12\ The Exchange proposes to delete references to MTS in Rules
7.31-E(b)(2)(A), 7.31-E(b)(2)(B), 7.31-E(d)(3)(D), 7.31-E(d)(4)(C),
7.31-E(e)(3)(B), and 7.46-E(f)(1)(A). As noted above, because
current Rule 7.31-E(d)(3)(D) would be deleted in its entirety, the
remaining sub-paragraphs of Rule 7.31-E(d)(3) would be renumbered
accordingly. In addition, current Rule 7.31-E(d)(4)(C) would be
deleted in its entirety.
---------------------------------------------------------------------------
Proposed Rule 7.31-E(i)(3)(A) would provide that an MTS must be a
minimum of a round lot and that an order with an MTS Modifier would be
rejected if the MTS is less than a round lot or if the MTS is larger
than the size of the order. This proposed rule text is based on the
next-to-last sentence of current Rule 7.31-E(b)(2)(A) and the first
sentence of current Rule 7.31-E(d)(3)(D), and in part on the first
sentence of current Rule 7.31-E(d)(4)(C), with non-substantive
differences to use common terminology when applying
[[Page 3041]]
this requirement to all of the order types eligible for an MTS
Modifier.\13\ Proposed Rule 7.31-E(i)(3)(A) is based on NYSE American
Rule 7.31E(i)(3)(A) without any differences.
---------------------------------------------------------------------------
\13\ Nasdaq also requires that its Minimum Quantity Order also
have a size of at least a round lot. See Nasdaq Rule 4703(e).
---------------------------------------------------------------------------
Proposed Rule 7.31-E(i)(3)(B) would provide that an order to buy
(sell) with an MTS Modifier would trade with sell (buy) orders in the
NYSE Arca Book that in the aggregate meet such order's MTS. This
proposed rule text is based on the third sentence of Rule 7.31-
E(b)(2)(A) and the second sentence of Rule 7.31-E(d)(3)(D) with non-
substantive differences to use common terminology when applying this
requirement to all of the order types eligible for an MTS Modifier.
Because Tracking Orders do not trade on arrival, this rule text
would be applicable only to MPL Orders and Limit IOC Orders with an MTS
Modifier. Proposed Rule 7.31-E(i)(3)(B) is based on NYSE American Rule
7.31E(i)(3)(B)(i) without any differences.
Proposed Rule 7.31-E(i)(3)(C) would provide that an order with an
MTS Modifier that is designated Day and cannot be satisfied on arrival
would not trade and would be ranked in the NYSE Arca Book. This
proposed rule text is based on the third sentence of Rule 7.31-
E(d)(3)(D) with non-substantive differences to reference orders
designated Day, i.e., MPL Orders and MPL-ALO Orders. The first sentence
of Rule 7.31-E(i)(3)(C) is based on NYSE American Rule 7.31E(i)(3)(C)
without any differences.
The Exchange further proposes to describe new functionality
relating to when an order with an MTS Modifier that is designated Day
would not be eligible to trade. In short, if a later-arriving contra-
side order can meet the MTS of a resting order with an MTS Modifier,
the two orders would trade unless the execution would be inconsistent
with either intra-market price priority or would result in a non-
displayed order trading ahead of a same-side, same-priced displayed
order.\14\ Therefore, as proposed, the Exchange would not permit an
order with an MTS Modifier that crosses other displayed or non-
displayed orders on the NYSE Arca Book to trade at prices that are
worse than the price of such contra-side orders. As further proposed,
the Exchange would not permit a resting order with an MTS Modifier to
trade at a price equal to a displayed contra-side order.\15\
---------------------------------------------------------------------------
\14\ Rule 7.36-E(c) provides that the Exchange ranks all non-
marketable orders on the NYSE Arca Book according to price--time
priority.
\15\ At this time, the only resting orders with an MTS on the
Exchange subject to this requirement would be MPL Orders. In such
case, a contra-side order that is displayed and between the PBBO
would be an odd-lot sized order; a round-lot sized displayed order
would be reflected in the PBBO.
---------------------------------------------------------------------------
To reflect these changes, the second sentence of Rule 7.31-
E(i)(3)(C) would provide that when a buy (sell) order with an MTS
Modifier that is designated Day is ranked in the NYSE Arca Book, it
would not be eligible to trade:
(i) At a price equal to or above (below) any sell (buy) orders that
are displayed and that have a working price equal to or below (above)
the working price of such order with an MTS Modifier, or
(ii) at a price above (below) any sell (buy) orders that are not
displayed and that have a working price below (above) the working price
of such order with an MTS Modifier.
For example,
If the PBBO is 10.10 x 10.16, on the NYSE Arca Book there
is a sell order (``Order A'') ranked Priority 3--Non-Display Orders for
50 shares at 10.12 and a sell order (``Order B'') ranked Priority 2--
Display Orders for 25 shares at 10.11, and the Exchange receives a buy
MPL Order (``Order C'') with an MTS Modifier for 100 shares with a
10.16 limit, because the MTS cannot be met, Order C will not trade and
will be ranked in the NYSE Arca Book at the midpoint of 10.13. At this
point, the Exchange would have a non-displayed buy order crossing both
non-displayed and displayed sell orders on the NYSE Arca Book. If the
Exchange then receives a non-displayed sell order (``Order D'') for 100
shares at 10.11, even though Order D would be marketable against Order
C, it would not trade because a trade at 10.13 would be above the price
of resting sell orders.\16\ Order D would be added to the NYSE Arca
Book at 10.11.
---------------------------------------------------------------------------
\16\ Pursuant to Rule 7.31-E(d)(3)(C), an Aggressing Order will
trade with a resting MPL Order at the midpoint of the PBBO.
---------------------------------------------------------------------------
If next, the Exchange receives a buy order (``Order E'')
to buy 25 shares at 10.11, it would trade with Order B. As discussed
above, this execution would trigger the Exchange to evaluate whether
Order C becomes marketable against contra-side orders.\17\ In this
scenario, because Order B has now executed, Order C is no longer
restricted from trading at 10.11. Because Order C's restriction has
been lifted and Order D does not have a working price change, Order C
would become an Aggressing Order and trade as the liquidity taker with
Order D at 10.11.
---------------------------------------------------------------------------
\17\ See discussion infra regarding the second sentence to
proposed Rule 7.36-E(a)(5).
---------------------------------------------------------------------------
Proposed Rule 7.31-E(i)(3)(D) would provide that an order with an
MTS Modifier that is designated IOC and cannot be immediately satisfied
would be cancelled in its entirety. This proposed rule text is based on
the last sentence of Rule 7.31-E(b)(2)(A), with non-substantive
differences to specify that this functionality would be applicable to
any orders designated IOC that have an MTS Modifier, i.e., Limit IOC
Orders and MPL-IOC Orders. Proposed Rule 7.31-E(i)(3)(D) is based on
NYSE American Rule 7.31E(i)(3)(D) without any differences.
Proposed Rule 7.31-E(i)(3)(E) would provide that a resting order to
buy (sell) with an MTS Modifier would trade with individual sell (buy)
orders that each meets the MTS.\18\ This proposed rule text is based on
the fourth sentence of Rule 7.31-E(d)(3)(D) with a non-substantive
difference to use the same terminology as proposed Rule 7.31-E(i)(3)(B)
because a resting order with an MTS Modifier only trades if contra-side
individual orders each meets such order's MTS. The Exchange proposes
non-substantive differences to use common terminology when applying
this requirement to all of the order types eligible for an MTS
Modifier. Proposed Rule 7.31-E(i)(3)(E) is based on NYSE American Rule
7.31E(i)(3)(E) without any differences.
---------------------------------------------------------------------------
\18\ A resting order with an MTS Modifier that becomes an
Aggressing Order would trade consistent with proposed Rule 7.31-
E(i)(3)(E) and therefore would trade with individual orders that
each meet the MTS.
---------------------------------------------------------------------------
Proposed Rules 7.31-E(i)(3)(E)(i)-(ii) would set forth additional
requirements for how a resting order with an MTS Modifier would trade.
Proposed Rule 7.31-E(i)(3)(E)(i) would provide that if an Aggressing
Order to sell (buy) does not meet the MTS of the resting order to buy
(sell) with an MTS Modifier, that Aggressing Order would not trade with
and may trade through such order with an MTS Modifier. This proposed
rule text is based on the fifth sentence of current Rule 7.31-
E(d)(3)(D) and the second sentence of current Rule 7.31-E(d)(4)(C) with
non-substantive differences to use common terminology when applying
this requirement to all of the order types eligible for an MTS
Modifier. Proposed Rule 7.31-E(i)(3)(E)(i) is based on NYSE American
Rule 7.31E(i)(3)(E)(i) with a non-substantive difference to use the
term ``Aggressing Order.''
Proposed Rule 7.31-E(i)(3)(E)(ii) would provide that if a resting
non-displayed sell (buy) order did not meet the MTS of a same-priced
resting order
[[Page 3042]]
to buy (sell) with an MTS Modifier, a subsequently arriving sell (buy)
order that meets the MTS would trade ahead of such resting non-
displayed sell (buy) order at that price. This proposed rule text is
based in part on the second sentence of Rule 7.31-E(d)(4)(C) with non-
substantive differences to use common terminology when applying this
requirement to all of the order types eligible for an MTS Modifier.
This proposed rule text is also based in part on NYSE American Rule
7.31E(i)(3)(E)(ii).
However, the Exchange proposes a difference from current text and
the NYSE American Rule to add that the subsequently arriving order
could trade ahead of a resting non-displayed order at that price, e.g.,
at the internal locking price. This proposed behavior is consistent
with the proposed amendment to MPL-ALO Orders, described above in
proposed Rule 7.31-E(d)(3)(E)(ii). In addition, as discussed above,
pursuant to proposed Rule 7.31-E(i)(3)(C)(i), if an order with an MTS
Modifier is locked by a displayed order, the resting order with an MTS
Modifier would not be eligible to trade at that price. In such case,
the subsequently arriving order would not trade with the order with an
MTS Modifier.
Proposed Rule 7.31-E(i)(3)(F) would provide that a resting order
with an MTS Modifier would be cancelled if it is traded in part or
reduced in size and the remaining quantity is less than such order's
MTS. This proposed rule text is based on the last sentence of Rule
7.31-E(d)(3)(D) and the last sentence of Rule 7.31-E(d)(4)(C) with non-
substantive differences to use common terminology when applying this
requirement to all of the order types eligible for an MTS Modifier.
Proposed Rule 7.31-E(i)(3)(F) is based on NYSE American Rule
7.31E(i)(3)(F) without any differences
Because of the technology changes associated with these proposed
rule change, the Exchange will announce the implementation date of this
proposed rule change by Trader Update. The Exchange anticipates that
the implementation date will be in the first quarter of 2018.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\19\ in general, and
furthers the objectives of Section 6(b)(5),\20\ 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.
---------------------------------------------------------------------------
\19\ 15 U.S.C. 78f(b).
\20\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed definition of ``Aggressing
Order'' in Rule 7.36-E would remove impediments to, and perfect the
mechanism of, a free and open market and a national market system and,
in general, protect investors and the public interest because it would
provide for a definition in Exchange rules that describes orders that
are or become marketable. The Exchange believes that the proposed
definition would promote transparency in Exchange rules by providing
detail regarding circumstances when a resting order may become
marketable, and thus would be an Aggressing Order. The Exchange further
believes that use of such definition would promote clarity in Exchange
rules, particularly in the context of the amendments to MPL Orders and
orders with an MTS Modifier.
The Exchange believes that the proposed amendments to Rule 7.31-
E(d)(3)(C) and (E) to use the term ``Aggressing Order'' and to describe
the prices at which an Aggressing MPL Order would trade would remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system and, in general, protect investors and the
public interest because it would promote clarity and transparency in
Exchange rules regarding the behavior of marketable MPL and MPL-ALO
Orders. In particular, the rule would provide greater specificity
regarding how a resting MPL Order that becomes an Aggressing Order
would trade.
The Exchange believes that the proposed amendments to Rule 7.31-
E(d)(3)(E) regarding when a resting MPL-ALO Order that locks contra-
side, same-priced orders would be eligible to trade would remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system and, in general, protect investors and the
public interest because it would describe circumstances when a
subsequently arriving order could trade with the MPL-ALO Order. The
proposed rule change would protect displayed orders by not allowing a
subsequently arriving order to trade ahead of a same-priced, same-side
displayed order.
The Exchange believes that the proposed amendment to describe the
existing MTS Modifier in proposed Rule 7.31-E(i)(3) would remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system and, in general, protect investors and the
public interest because it would promote transparency in Exchange rules
because MTS Modifiers for different order types operate in the same
manner. The Exchange believes that by consolidating such references in
a single location in Rule 7.31-E, the rule will be easier for members,
the Commission, and the public to navigate.
Finally, the Exchange believes that the proposal regarding when a
resting order with an MTS Modifier would be eligible to trade would
remove impediments to, and perfect the mechanism of, a free and open
market and a national market system and, in general, protect investors
and the public interest, because the proposed rule change would ensure
that there would not be an execution of a resting order with an MTS
Modifier that either would be inconsistent with intra-market price
priority or would result in a non-displayed order trading ahead of a
same-side, same-priced displayed order. This proposed rule change would
therefore promote just and equitable principles of trade by ensuring
that displayed interest does not get traded through by a non-displayed
order.
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 Exchange believes that
the proposed rule change is not designed to address any competitive
issues, but rather to add further clarity to Exchange rules by defining
the term ``Aggressing Order,'' using that term in connection with MPL
Orders, and consolidating references to MTS Modifiers in a single
location in Exchange rules. In addition, the rule is designed to ensure
that resting orders with trading restrictions, such as MPL-ALO Orders
and resting orders with an MTS Modifier, would not trade through
displayed orders or violate intra-market price priority.
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.
[[Page 3043]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \21\ and Rule 19b-
4(f)(6) thereunder.\22\
---------------------------------------------------------------------------
\21\ 15 U.S.C. 78s(b)(3)(A).
\22\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
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. The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEArca-2018-01 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2018-01. 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 website (https://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 website 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 the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2018-01 and should be submitted
on or before February 12, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------
\23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-00975 Filed 1-19-18; 8:45 am]
BILLING CODE 8011-01-P
