[Federal Register Volume 77, Number 76 (Thursday, April 19, 2012)]
[Notices]
[Pages 23536-23538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9410]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66811; File No. SR-NYSEArca-2012-29]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca
Equities Rule 7.31(t) To Provide for Limit-on-Open Orders and Market-
on-Open Orders
April 13, 2012.
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 3, 2012, 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 Exchange. The Exchange has designated
the proposed rule change as constituting a rule change under Rule 19b-
4(f)(6) under the Act,\3\ which renders the proposal effective upon
filing with the Commission. The Commission is publishing this notice to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Arca Equities Rule 7.31(t) to
provide for Limit-on-Open Orders (``LOO Orders'') and Market-on-Open
Orders (``MOO Orders''). The text of the proposed rule change is
available at the Exchange, www.nyse.com, and 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 7.31(t) to
provide for LOO and MOO Orders.
NYSE Arca Equities Rule 7.31(t) currently provides for Auction-Only
Orders, which are limit or market orders that are only executed within
an auction.\4\ As proposed, LOO and MOO Orders would be defined under
NYSE Arca Equities Rule 7.31(t)(1) and (2), respectively, as specific
types of Auction-Only Orders. More specifically, a LOO Order would be
defined as an Auction-Only Limit Order that is to be executed only
during the Market Order Auction, which is the auction that opens the
Core Trading Session on the Exchange for Exchange-listed securities.\5\
Any portion of a LOO Order that remains unfilled after completion of
the Market Order Auction would be cancelled. A MOO Order would be
defined as an Auction-Only Market Order that is to be executed only
during the Market Order Auction. As with LOO Orders, any portion of a
MOO Order that remains unfilled after completion of the Market Order
Auction would be cancelled. MOO and LOO orders would not participate in
the Opening Auction, as defined in NYSE Arca Equities Rule 7.35(b), the
Closing Auction, as defined in NYSE Arca Equities Rule 7.35(e), or
[[Page 23537]]
Trading Halt Auctions, as defined in NYSE Arca Equities Rule 7.35(f).
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\4\ An Auction-Only Order is executable during the next auction
following entry of the order. If the order is not executed in the
auction, the balance is cancelled. An Auction-Only Order is only
available for auctions that take place on the Exchange. Auction-Only
Orders are not routed to other exchanges and are cancelled where the
next auction after entry of the order is cancelled or does not
occur. An Auction-Only Order may not be designated as good until
cancelled.
\5\ The Market Order Auction is described in NYSE Arca Equities
Rule 7.35(c).
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The Exchange also proposes the following technical amendments to
NYSE Arca Equities Rule 7.35(c):
First, the Exchange proposes to remove certain text from
NYSE Arca Equities Rule 7.35(c) that cross-references New York Stock
Exchange (``NYSE'') Rule 123D and NYSE-listed securities subject to a
sub-penny trading condition, which was previously described within NYSE
Rule 123D(3). NYSE has removed this text from NYSE Rule 123D and
eliminated the sub-penny trading condition in its entirety.\6\ The
proposed removal of the cross-reference would therefore remove obsolete
text from NYSE Arca Equities Rule 7.35(c).
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\6\ See Securities Exchange Act Release No. 58936 (November 13,
2008), 73 FR 69704 (November 19, 2008) (SR-NYSE-2008-117).
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Second, the Exchange proposes to specify that, for
purposes of NYSE Arca Equities Rule 7.35(c), and unless stated
otherwise, references to Market Orders include Auction-Only Market
Orders. This proposed change would add greater specificity regarding
the handling of Auction-Only Market Orders, including MOO Orders,
during the Market Order Auction.
Third, the Exchange proposes to delete duplicative text
from NYSE Arca Equities Rule 7.35(c) describing that, after the first
opening print on the primary market, all Market Orders and Limit Orders
are processed pursuant to NYSE Arca Equities Rule 7.37.
Finally, the Exchange proposes to specify in NYSE Arca
Equities Rule 7.35(c)(3)(A)(3) that only Market Orders that are
eligible for both the Market Order Auction and the Core Trading
Session, but are not executed in the Market Order Auction, become
eligible for execution in the Core Trading Session immediately upon
conclusion of the Market Order Auction.\7\ This proposed change would
add greater specificity regarding the handling of certain Market
Orders, like MOO Orders, that are not eligible for the Core Trading
Session.
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\7\ The Exchange also proposes to remove duplicative text from
NYSE Arca Equities Rule 7.35(c)(3)(A)(4).
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Because of the related technology changes that this proposed rule
change would require, the Exchange proposes to announce the date on
which LOO and MOO Orders would be available via Trader Update.
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. The proposed
rule change is also not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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As proposed, LOO and MOO Orders would be a subset of the existing
Auction-Only Orders that are currently available on the Exchange. In
this regard, the availability of LOO and MOO Orders would enhance the
tools available to ETP Holders when entering their trading interest by
providing for an Auction-Only Order that could only be executed during
the Market Order Auction. Furthermore, the proposed addition of LOO and
MOO Orders on the Exchange could contribute to the quality of the
Exchange's opening by increasing the amount of liquidity that ETP
Holders are willing to enter to participate in the Market Order
Auction. For these reasons, the Exchange believes that its proposal to
provide for LOO and MOO Orders 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. The
Exchange notes that order types similar to LOO and MOO Orders are
available on other exchanges.\10\ Accordingly, making these order types
available for ETP Holders to utilize would promote just and equitable
principles of trade and foster cooperation and coordination with
persons engaged in facilitating transactions in securities.
Furthermore, LOO and MOO Orders would be available for all ETP Holders
to utilize on the Exchange. In this regard, the Exchange believes that
the proposed rule change is not designed to permit unfair
discrimination. The proposed technical changes would also benefit ETP
Holders and investors by adding greater specificity and precision to
the Exchange's Rules.
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\10\ See NASDAQ Stock Market LLC (``NASDAQ'') Rule 4752(a)(3)
and (4), which define ``Limit On Open Order'' and ``Market On Open
Order,'' respectively. See also BATS Exchange, Inc. (``BATS'') Rule
11.23(a)(14) and (16), which define ``Limit-On-Open'' orders and
``Market-On-Open'' orders, respectively.
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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.
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 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 if consistent with the protection of investors
and the public interest, provided that the self-regulatory organization
has given the Commission written notice of its intent to file 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 proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6)
thereunder.\12\ 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.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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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
[[Page 23538]]
Send an email to [email protected]. Please include
File Number SR-NYSEArca-2012-29 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2012-29. 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
a.m. and 3 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; 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-2012-29 and
should be submitted on or before May 10, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9410 Filed 4-18-12; 8:45 am]
BILLING CODE 8011-01-P