[Federal Register Volume 78, Number 92 (Monday, May 13, 2013)]
[Notices]
[Pages 28008-28010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11224]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69527; File No. SR-NYSEArca-2013-45]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca
Equities Rule 7.11(a)(6)(C) To Add Inside Limit Orders as Eligible for
Repricing Instructions
May 7, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 23, 2013, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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
7.11(a)(6)(C) to add Inside Limit Orders as eligible for repricing
instructions. The text of the proposed rule change is available on the
Exchange's Web site 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 28009]]
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing to amend NYSE Arca Equities Rule 7.11
(``Rule 7.11''), which implements the Limit Up--Limit Down Plan,\3\ the
first phase of which became effective on April 8, 2013, to add Inside
Limit Orders as eligible for repricing. Under Rule 7.11, buy or sell
interest that is priced or could be executed above or below the Price
Bands, as that term is used in the Rule, would be canceled, with one
exception. That exception, set out in sub-paragraph (a)(6) of the Rule,
permits an ETP Holder to instruct the Exchange to reprice eligible
limit orders that are priced above or below the Price Bands, rather
than cancel such orders. Eligible limit orders would be repriced to the
Price Bands.
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\3\ As defined in Rule 7.11, ``Plan'' means the Plan to Address
Extraordinary Market Volatility Submitted to the Securities and
Exchange Commission Pursuant to Rule 608 of Regulation NMS under the
Securities Exchange Act of 1934, Exhibit A to Securities Exchange
Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012), as
it may be amended from time to time.
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The Exchange proposes to amend Rule 7.11(a)(6)(C) to add another
limit order type that is eligible for repricing instructions.
Specifically, the Exchange proposes to add Inside Limit Orders, which
are defined in Rule 7.31(d),\4\ to the list of orders eligible for
repricing instructions. The Exchange proposes to announce by Trader
Update when the functionality associated with repricing instructions
for Inside Limit Orders will be made available and anticipates that
such instructions will be made available to ETP Holders before the roll
out of the implementation of Phase I of the Plan has been completed.
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\4\ An Inside Limit Order is a Limit Order, which, if routed
away pursuant to NYSE Arca Equities Rule 7.37(d), will be routed to
the market participant with the best displayed price. Any unfilled
portion of the order will not be routed to the next best price level
until all quotes at the current best bid or offer are exhausted.
Once each current best bid or offer is exhausted, Exchange systems
reevaluate the next best displayed price and route to that single
price point and continue such assessment at each new best displayed
price level until the order is filled or no longer marketable. If
the order is no longer marketable it will be ranked in the NYSE Arca
Book pursuant to Rule 7.36.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\5\ in general, and
furthers the objectives of Section 6(b)(5),\6\ in particular, in that
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, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
The Exchange believes that adding Inside Limit Orders to the list of
orders eligible for repricing instructions removes impediments to and
perfects the mechanism of a free and open market because it provides
greater choice to ETP Holders of how to instruct the Exchange to handle
their orders under the Plan.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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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. The Exchange believes that
the proposed amendment will reduce burdens on competition by giving ETP
Holders greater flexibility to add repricing instructions for
additional limit orders, specifically, Inside Limit Orders.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\
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, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\10\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because such waiver
would allow the Exchange immediately to provide that Inside Limit
Orders will be treated similar to other limit orders eligible for
repricing instructions under the recently implemented Limit Up--Limit
Down Plan. Accordingly, the Commission hereby grants the Exchange's
request and designates the proposal operative upon filing.\11\
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NYSEArca-2013-45 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.
[[Page 28010]]
All submissions should refer to File Number SR-NYSEArca-2013-45. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make publicly available. All
submissions should refer to File Number SR-NYSEArca-2013-45 and should
be submitted on or before June 3, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11224 Filed 5-10-13; 8:45 am]
BILLING CODE 8011-01-P