[Federal Register Volume 79, Number 164 (Monday, August 25, 2014)]
[Notices]
[Pages 50718-50719]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-20080]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72864; File No. SR-NYSEArca-2014-86]
Self-Regulatory Organizations; NYSEArca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.70
to Make the Rule Applicable to All Transactions on the Exchange
August 19, 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 August 11, 2014, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II, and III 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 the
Substance of the Proposed Rule Change
The Exchange proposes to proposes to [sic] amend Rule 6.70 to make
the rule applicable to all transactions on the Exchange. 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Rule 6.70 to make the rule
applicable to all transactions on the Exchange.
Rule 6.70 currently provides that the price at which a non-
electronic order is executed shall be binding notwithstanding that an
erroneous report in respect thereto may have been rendered, or no
report rendered. The rule further provides that a report shall not be
binding if a non-electronic order was not actually executed but was in
error reported to have been executed. For example, if a report is
issued that an non-electronic execution occurred, when in fact it did
not, that report is not binding. This rule is relevant because OTP
Holders rely on reports from the Exchange to determine whether they
have engaged in a transaction on the Exchange. Commentary .02 to Rule
6.70 further provides that the terms of the rule apply only to
transactions occurring on the floor of the Exchange and does not apply
to transactions occurring on the NYSE Arca electronic trading system.
The Exchange proposes to amend Rule 6.70 to make it applicable to
all reports on the Exchange, including reports relating to transactions
occurring on the NYSE Arca electronic trading system. As proposed, if
the Exchange issues a report of an electronic transaction to an OTP
Holder when in fact that execution did not occur, that report of an
execution would not be binding. The Exchange believes the proposed rule
change would enable the Exchange to apply the same rule to all reports
of executions, regardless of whether it is an electronic transaction.
To effect this change, the Exchange proposes to delete the term ``non
electronic'' in the first and second sentences of the rule text and
delete Commentary .02 to the rule. The Exchange notes that the proposed
rule change would harmonize the rules of the Exchange with the rules of
NYSE MKT LLC (``NYSE MKT''), which operates NYSE Amex Options LLC, as
well as the rules of the Chicago Board Options Exchange Incorporated
(``CBOE''), International Securities Exchange, LLC (``ISE''), BATS
Exchange,
[[Page 50719]]
Inc. (``BATS''), and Miami International Securities Exchange, LLC
(``MIAX'').\4\
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\4\ See NYSE MKT Rule 958NY, CBOE Rule 6.52, ISE Rule 719, BATS
Rule 21.11, and MIAX Rule 522. The Exchange notes that ISE, BATS,
and MIAX operate all-electronic options exchanges, accordingly, the
rule is not limited on other markets to solely floor-based
transactions.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that the proposed rule change would remove
impediments to and perfect the mechanism of a free and open market and
national market system and promote a fair and orderly market because it
would govern all reports regarding transactions that execute at the
Exchange, regardless of whether the transaction occurred on the Floor
or electronically. Accordingly, the proposed rule change would remove
impediments to and perfect the mechanism of free and open market by
ensuring that Rule 6.70 governs all reports similarly, and not just
those relating to non-electronic transactions. The proposed rule change
would also remove impediments to and perfect the mechanism of a free
and open market and national market system because it would promote
harmonization among options exchange market rules for rules of similar
meaning. Specifically, only the NYSE Arca version of the rule limits
its application to non-electronic transactions. By contrast, NYSE MKT
and CBOE, which both operate trading floors, do not limit their
versions of the same rule to non-electronic transactions. Moreover,
options exchanges that only trade electronically have in place similar
rules.\7\
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\7\ Supra n. 3.
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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. Rather, the Exchange
believes that the proposed rule change is pro-competitive because it
would align the Exchange's rules with the rules of other markets,
including CBOE, NYSE MKT, ISE and MIAX.
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 \8\ and Rule 19b-4(f)(6) thereunder.\9\
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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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\11\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
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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) \12\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\12\ 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-2014-86 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-2014-86 This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2014-86, and should
be submitted on or before September 15, 2014.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-20080 Filed 8-22-14; 8:45 am]
BILLING CODE 8011-01-P