[Federal Register Volume 79, Number 80 (Friday, April 25, 2014)]
[Notices]
[Pages 23032-23034]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09396]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71982; File No. SR-NYSEARCA-2014-39])
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca
Equities Rules 1.1, 7.31, 7.34, 7.35, 7.37 and 7.43 To Update Rules
Related to the Exchange's Order Types and Modifiers
April 21, 2014.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on April 8, 2014, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 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 Rules 1.1, 7.31,
7.34, 7.35, 7.37 and 7.43 in order to update rules related to the
Exchange's order types and modifiers. 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.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend NYSE Arca Equities Rules 7.31, 7.34
and 7.35 \4\ to delete the Timed Modifier and related references.
Second, the Exchange proposes to eliminate references in Rules 1.1,
7.31, 7.34, 7.37, and 7.43 to the Directed Order and Directed Fill
order types, which were recently deleted.
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\4\ All references to rules in this filing are to the rules of
NYSE Arca Equities.
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Elimination of Timed Modifier and References to Timed Order Rule
7.31(c)(2)(C)--Timed Modifier
The Exchange proposes to delete Rule 7.31(c)(2)(C), which describes
the operation of the Timed Modifier. Because of the lack of use, the
Exchange proposes to eliminate the use of the Timed Modifier and
therefore proposes to delete this functionality from its rules. The
Exchange believes that deleting little-used functionality would
streamline its order processing and reduce confusion of available
functionality.
The Exchange also proposes to delete references to Timed Order in
Rules 7.34 and 7.35. The Exchange recently relocated the Timed Order
from former Rule 7.31(q) to its current location in Rule 7.31(c)(2)(C)
and changed the description of the functionality to ``Modifier'' from
``Order''.\5\ Given the elimination of Rule 7.31(c)(2)(C), the
following references to Timed Order should be deleted:
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\5\ See Securities Act Release No. 71331 (January 16, 2014), 79
FR 3907 (January 23, 2014) (SR-NYSEArca-2013-92).
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Rule 7.34(d)(1)(F), describing orders permitted during the
Opening Session;
Rule 7.34(d)(2)(C), providing that Timed Orders designated
as good from 1:00 p.m. (Pacific Time) are not eligible to participate
in the Closing Auction;
Rule 7.35(a)(2), providing that Limited Price Orders
designated for the Opening Session and entered as a Timed Order good
from 1:00 a.m. (Pacific Time) are not eligible for execution during the
Opening Auction and Market Order Auction, respectively;
Rule 7.35(b)(1), providing that Limited Price Orders
designated for the Opening Session and entered as a Timed Order good
from 1:00 a.m. (Pacific Time) are not eligible for execution during the
Opening Auction); and
Rule 7.35(b)(4), providing that a Limited Price Orders
designated for the Opening Session and entered as a Timed Order good
from 6:30 a.m. (Pacific Time) are not eligible for execution during the
Market Order Auction.
The Exchange will announce by Trader Update the date when the Timed
Modifier will no longer be available.
Elimination of References to Directed Order and Directed Fill Order
Types
The Directed Order and Directed Fill order types were recently
eliminated.\6\ The Exchange proposes to remove the remaining references
to these order types in the following Rules.
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\6\ See id.
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Rule 1.1(a) and Rule 1.1(bbb)--Definitions
The Exchange proposes to eliminate references to the Directed Order
Process in Rule 1.1(a), which defines the NYSE Arca Book, and Rule
1.1(bbb), which defines a ``Designated Market Maker'' as a registered
Market Maker that participates in the Directed Order Process.
Rule 7.34(d)(1)(C) and Rule 7.34(d)(2)(A)--Trading Sessions
The Exchange proposes to eliminate references to Directed Orders in
Rule 7.34 to clarify that these order types are no longer available
during the Opening and Core Trading Sessions on the Exchange.
Specifically, the Exchange proposes to amend Rule 7.34(d)(1)(C) to
remove references to ``market Directed Orders'', which are no longer
included in the Market Order Auction for purposes of the Opening
Session. Similarly, the Exchange proposes to amend Rule 7.34(d)(2)(A)
to remove the
[[Page 23033]]
reference to Directed Order and clarify that such orders are no longer
eligible for entry and execution on the Exchange during the Core
Trading Session.
Rule 7.37(a)--Trading Sessions
The Exchange proposes to eliminate the Directed Order Process in
Rule 7.37(a), currently Step 1 in the process of matching and executing
like-priced orders, bids and offers under the Rule. With the
elimination of the Directed Order process, the Exchange proposes to
reduce the number of steps from 5 to 4 beginning with the Display Order
Process (formerly Step 2) as new Step 1 and continuing with the Working
Order Process (formerly Step 3) as new Step 2, the Tracking Order
Process (formerly Step 4) as new Step 3, and Routing Away (formerly
Step 5) as the new Step 4. The proposed revision to Rule 7.37(a) will
also eliminate references to the Directed Fill order type, which is no
longer available to Users on Exchange systems.
Rule 7.43--Use of Directed Order Process
The Exchange proposes to eliminate Rule 7.43, which prohibits the
use of the Directed Order Process for the purpose of bypassing
otherwise applicable fees. The Exchange is proposing eliminating
references to the Directed Order Process since Directed Orders are
order types not available to Users on Exchange systems.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \7\ of the
Act, in general, and furthers the objectives of Section 6(b)(5),\8\ 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. Specifically, the Exchange
believes that removing cross-references to the Directed Order and
Directed Fill order types, which the Exchange recently eliminated in a
separate rule filing,\9\ would remove impediments to and perfect the
mechanism of a free and open market because it would reduce potential
confusion that may result from having such cross references in the
Exchange's rulebook. Removing such obsolete cross references will also
further the goal of transparency and add clarity to the Exchange's
rules. The Exchange also believes that removing the Timed Modifier
time-in-force condition removes impediments to and perfects a national
market system by eliminating little-used functionality from its
rulebook. The Exchange believes that removing the Timed Modifier would
not be inconsistent with the public interest and the protection of
investors because investors will not be harmed by the removal of
little-utilized functionality.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ See supra note 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 imposes
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The proposed change is not
designed to address any competitive issue but rather would remove
obsolete cross-references and remove little-used functionality, thereby
reducing confusion and making the Exchange's rules easier to understand
and navigate.
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 \10\ and Rule 19b-4(f)(6) thereunder.\11\
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.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
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At any time within 60 days of the filing of 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 under
Section 19(b)(2)(B) \13\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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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
Send an email to [email protected]. Please include
File Number SR-NYSEARCA-2014-39 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-2014-39. 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 Section, 100 F Street
NE., Washington, DC 20549-1090. Copies of the filing will also be
available for inspection and copying at the NYSE's principal office and
on its Internet Web
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site at www.nyse.com. 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-2014-39 and should be submitted on or before May 16, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-09396 Filed 4-24-14; 8:45 am]
BILLING CODE 8011-01-P