Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 27061 

43The preference management fee, which is 

otherwise permitted to be up to 32 cents for each 

such distribution per ‘‘suppressed’’ account, is 16 

cents instead. NYSE rule 451.90(4). The preference 

management fee for distributing interim reports, 

annual reports mailed separately and other material 

is 10 cents irrespective of whether it is being 

charged for a regular account or a managed account. 

44See id. 

45See supra note 12. See rule 22c–2 under the 

Investment Company Act [17 CFR 270.22c–2] 

(permitting certain funds to impose redemption fees 

for holders redeeming securities within seven 

calendar days after purchase). We understand, 

however, that certain funds whose shares are traded 

in the secondary market, such as exchange-traded 

funds and closed-end funds, may be intermediated 

in the same manner as operating companies and 

thus do not have the same contractual relationships 

with the intermediary that many open-end funds 

do. 

46See generally Division of Investment 

Management Guidance Update No. 2016–01 (Jan. 

2016) (discussing mutual fund distribution and subaccounting fees); rule 12b–1 under the Investment 

Company Act [17 CFR 270.12b–1]. 

47See, e.g., 2013 ICI Letter, supra note 10 

(questioning, ‘‘for example, the extent to which 

preference management fees might be duplicative in 

light of contractual arrangements between [funds] 

and broker-dealers holding street name accounts 

that already provide for compensation to the brokerdealer to maintain distribution preferences’’). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3An Electronic Complex Order is any Complex 

Order, as defined in Exchange Rule 900.3NY(e), that 

is entered into the Exchange’s electronic order 

delivery, execution and reporting System. See 

Exchange Rules 980NY and 900.2NY(48). A 

Complex Order is ‘‘any order involving the 

simultaneous purchase and/or sale of two or more 

different option series in the same underlying 

security, for the same account, in a ratio that is 

equal to or greater than one-to-three (.333) and less 

than or equal to three-to-one (3.00) and for the 

purpose of executing a particular investment 

strategy.’’ See Exchange Rule 900.3NY(e). 

4See Securities Exchange Act Release No. 82802 

(March 2, 2018), 83 FR 9769 (‘‘Notice’’). 

management fee, for managed accounts 

with five or fewer shares.43

Request for Comment 

• How are processing fees for Fund 

Materials assessed with respect to 

managed accounts? Should certain 

kinds of accounts, such as separately 

managed accounts, where multiple 

investors may delegate their investment 

decisions to a single investment 

manager, be eligible for further different 

treatment under the current fee 

structure? If so, why and how should 

they be treated differently? 

• Is the current application of 

processing fees for distributions of Fund 

Materials to managed account investors 

appropriate? Should such distributions 

to managed accounts be charged at a 

reduced rate as they are in the proxy 

distribution context? 44 If so, what rate? 

• What services do intermediaries or 

fulfillment service providers typically 

provide to managed account investors? 

F. Other Arrangements Between a Fund 

and Intermediary 

As discussed above, unlike in the 

operating company context, a 

‘‘securities intermediary’’ through 

which shares are held in street name is 

also generally a ‘‘financial 

intermediary’’ under Investment 

Company Act rule 22c–2. Therefore, a 

fund is required to contract with the 

financial intermediary to share 

information about the submission of 

purchase and redemption orders.45 In 

some cases, financial intermediaries 

may enter into ‘‘sub-transfer agent’’ or 

‘‘sub-accounting’’ servicing 

arrangements with funds to provide 

administrative or shareholder services 

to investors whose shares are held in 

‘‘omnibus accounts.’’ Many funds also 

have ‘‘selling’’ agreements with certain 

intermediaries for the distribution of 

fund shares.46 An operating company, 

by contrast, may have no direct 

relationship with the intermediary. 

Some commenters have questioned 

whether fund payments under the SRO 

rules may be duplicative of payments 

made for similar services under 

contractual arrangements between a 

fund and an intermediary.47

Request for Comment 

• Do funds present facts and 

circumstances that merit differentiating 

them from other types of issuers as to 

appropriate levels of processing fees for 

the distribution of Fund Materials to 

beneficial owners? How, if at all, are 

fund payments to intermediaries 

pursuant to plans adopted by funds 

pursuant to rule 12b–1 under the 

Investment Company Act (‘‘12b–1 

plans’’), shareholder service agreements, 

or other similar arrangements with 

intermediaries relevant considerations 

in differentiating Fund Material 

distributions from distributions of 

operating company materials? 

• Does this framework result in 

duplicative payments from a fund to an 

intermediary for the same services? 

Does the presence of any such 

arrangement bear on the 

appropriateness of the practice of 

paying remittances? 

• Do operating companies have 

arrangements with intermediaries 

similar to agreements related to 12b–1 

plans? 

• How does the presence of subtransfer agent, sub-accounting, or selling 

arrangements affect the appropriateness 

of the payment of a preference 

management fee or notice and access 

fees? Are such payments duplicative? 

• Would some funds be more 

adversely impacted by potential fee 

duplication than others? 

• Are the costs of distributing 

shareholder reports and other materials 

to fund investors covered by 

administrative services, recordkeeping, 

or other similar contractual 

arrangements? If the fee schedule did 

not apply in such cases, would the costs 

of distributing Fund Materials to fund 

investors increase or decrease? Why? 

IV. General Request for Comment 

This request for comment is not 

intended to limit the scope of 

comments, views, issues, or approaches 

to be considered. In addition to 

investors and funds, we welcome 

comment from other market participants 

and particularly welcome statistical, 

empirical, and other data from 

commenters that may support their 

views or support or refute the views or 

issues raised by other commenters. 

By the Commission. 

Dated: June 5, 2018. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–12422 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83384; File No. SR– 

NYSEAMER–2018–05] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing of 

Amendment No. 1 and Order Granting 

Accelerated Approval of a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Establish an 

Electronic Price Improvement Auction 

for Complex Orders 

June 5, 2018. 

I. Introduction 

On February 15, 2018, NYSE 

American LLC (the ‘‘Exchange’’ or 

‘‘NYSE American’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

adopt new Exchange Rule 971.2NY to 

establish the Complex Customer Best 

Execution Auction (‘‘Complex CUBE 

Auction’’ or ‘‘Auction’’), a price 

improvement auction for Electronic 

Complex Orders (referred to herein as 

‘‘Complex Orders’’), and to make related 

changes to other rules.3 The proposed 

rule change was published for comment 

in the Federal Register on March 7, 

2018.4 On April 18, 2018, pursuant to 


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5 15 U.S.C. 78s(b)(2). 

6See Securities Exchange Act Release No. 83061, 

83 FR 17869 (April 24, 2018). 

7Amendment No. 1 revises the proposal to: (1) 

Add Exchange Rules 971.1NY, Commentary .01, 

and 971.2NY, Commentary .03 to specify that a 

Single-Leg CUBE Auction for a single series may 

occur concurrently with a Complex CUBE Auction 

for a Complex Order that includes that series, and 

to describe the processing of such concurrent 

auctions; (2) add definitions of ‘‘single stop price’’ 

and ‘‘auto-match limit price,’’ add examples to the 

defined terms in proposed Exchange Rule 971.2NY, 

Commentary .02, and clarify that in both the SingleLeg and Complex CUBE Auctions, a Contra Order 

will trade solely with the CUBE Order; (3) indicate 

that after a Complex CUBE Order has been filled, 

RFR Responses, including Complex GTX Orders, 

may trade with Complex Orders on the same side 

of the market as the Complex CUBE Order; (4) 

further explain the rationale for not allowing 

customer interest on a Contra Order; (5) further 

explain the reasons for early Auction terminations 

when the same-side CUBE BBO crosses RFR 

Responses or a single stop price; (6) provide an 

example showing the allocation of a Complex CUBE 

Order guaranteed with an auto-match limit price; 

(7) modify the description of the proposed changes 

to Exchange Rules 980NY(e)(6)(A) and (B); and (8) 

provide further support for the Exchange’s 

argument that the proposal is consistent with 

Section 11(a) of the Act and the rules thereunder. 

To promote transparency of its proposed 

amendment, when NYSE American filed 

Amendment No. 1 with the Commission, it also 

submitted Amendment No. 1 as a comment letter 

to the file, which the Commission posted on its 

website and placed in the public comment file for 

SR–NYSEAMER–2018–05 (available at https://

www.sec.gov/comments/sr-nyseamer-2018-05/ 

nyseamer201805-3649246-162408.pdf). The 

Exchange also posted a copy of its Amendment No. 

1 on its website (available at https://www.nyse.com/ 

publicdocs/nyse/markets/nyse-american/rulefilings/filings/2018/NYSEAmer-2018- 

05,%20Pt.%20Am.%201.pdf). 

8See Exchange Rule 971.1NY. 

9See Notice, 83 FR at 9769. NYSE American 

notes that the Complex CUBE Auction follows the 

fundamental principles of the Single-Leg CUBE 

mechanism but with the priority and allocation 

rules used in auctions for Complex Orders. See id. 

at 9779 (citing Exchange Rule 980NY(e)). 

10See id. (citing Chicago Board Options 

Exchange, Inc. (‘‘CBOE’’) Rule 6.74A; Nasdaq 

PHLX, LLC (‘‘Phlx’’) Rule 1087; BOX Options 

Exchange LLC (‘‘BOX’’) Rule 7245; Nasdaq ISE, LLC 

(‘‘ISE’’) Rule 723; and Miami International 

Securities Exchange, LLC (‘‘MIAX’’) Rule 515A, 

Interpretation and Policy .12). 

11See proposed Exchange Rule 971.2NY(a). An 

‘‘ATP Holder’’ is a natural person, sole 

proprietorship, partnership, corporation, limited 

liability company or other organization, in good 

standing, that has been issued an American Trading 

Permit (‘‘ATP’’) issued by the Exchange for effecting 

approved securities transactions on the Exchange’s 

Trading Facilities. An ATP Holder must be a 

registered broker or dealer pursuant to Section 15 

of the Act and has status as a ‘‘member’’ of the 

Exchange, as defined in Section 3 of the Act. See 

Exchange Rules 900.2NY(4) and (5). 

12See proposed Exchange Rule 971.2NY(a)(1). 

Requiring the Complex Contra Order to include 

only principal interest or non-Customer interest 

will preserve the intended allocation methodology 

for the Auction. See Amendment No. 1. NYSE 

American notes that a Complex Contra Order is 

guaranteed to trade with at least 40% of the 

Complex CUBE Order if RFR Responses do not 

improve the guaranteed price(s). See proposed 

Exchange Rules 971.2NY(c)(4)(B)(i)(b) and (ii)(b). 

NYSE American also notes that, because Customer 

interest on the Exchange is afforded first priority at 

a price, allowing Customer interest on the Complex 

Contra Order would disrupt the intended allocation 

methodology for the Auction because the Complex 

Contra Order would be entitled to 100% of the 

Complex CUBE Order rather than 40% of the order. 

NYSE American further notes that allowing 

customer interest on the Complex Contra Order 

could reduce competition in the Auction and 

undermine its price improvement aim if other 

market participants choose not to participate in the 

Auction because they believe it is unlikely that they 

would receive an allocation in the Auction. See id. 

NYSE American states that it will file a proposed 

rule change if it intends to establish a customer-tocustomer cross mechanism in the future. See id. 

The proposal likewise revises the Single-Leg CUBE 

rules to indicate that the Contra Order in a SingleLeg CUBE Auction must represent principal or nonCustomer Interest. See Exchange Rule 971.1NY(a) 

and Amendment No. 1. 

13See Notice, 83 FR at 9771, and proposed 

Exchange Rule 971.2NY(b)(2). The Consolidated 

Book (‘‘Book’’) is ‘‘the Exchange’s electronic book 

of limit orders for the accounts of Customers and 

broker-dealers, and Quotes with Size. All orders 

and Quotes with Size that are entered into the Book 

will be ranked and maintained in accordance with 

the rules of priority as provided in Rule 964NY.’’ 

See Exchange Rule 900.2NY(14). 

14See proposed Exchange Rule 971.2NY(b)(2). 

15See proposed Exchange Rule 971.2NY(a)(2). 

The proposal revises the current definition of 

‘‘Complex BBO’’ to define the Complex BBO as the 

complex orders with the lowest-priced (i.e., the 

most aggressive) net debit/credit price on each side 

of the Consolidated Book for the same complex 

order strategy. See proposed Exchange Rule 

971.2NY(b). 

16The BBO is the best bid or offer in the System. 

See Exchange Rule 900.2NY(7)(a). The ‘‘Derived 

BBO’’ is calculated using the BBO from the 

Consolidated Book for each of the options series 

comprising a given complex order strategy. See 

proposed Exchange Rule 900.2NY(7)(c). The 

definition of Derived BBO, which does not change 

the manner in which the Exchange determines what 

was formerly referred to as the ‘‘Complex BBO,’’ is 

designed to make clear that the Derived BBO is 

derived from the BBO of the leg markets. See 

Notice, 83 FR at 9771. The proposal makes 

conforming amendments to Exchange Rule 980NY 

to replace references to the ‘‘Complex BBO’’ with 

the ‘‘Derived BBO.’’ See id. 

17See proposed Exchange Rule 971.2NY(b)(2). 

NYSE American notes that a Complex CUBE Order 

that is not priced equal to or better than the sameside CUBE BBO is not the best-priced interest 

available and should not trade ahead of betterpriced interest on the same side of the market. See 

Notice, 83 FR at 9773. A Complex CUBE Order and 

the Complex Contra Order also will be rejected if 

they are submitted before the opening of trading, 

during the final second of the trading session in the 

component series, or during a trading halt. See 

proposed Exchange Rules 971.2NY(b)(3), (4), and 

(5). 

18See proposed Exchange Rule 971.2NY(a)(2). 

Section 19(b)(2) of the Act,5 the 

Commission extended the time for 

Commission action on the proposal 

until June 5, 2018.6 The Commission 

received no comments regarding the 

proposal. On May 15, 2018, the 

Exchange filed Amendment No. 1 to the 

proposed rule change.7 The Commission 

is publishing this notice to solicit 

comments on Amendment No. 1 from 

interested persons, and is approving the 

proposed rule change, as modified by 

Amendment No. 1, on an accelerated 

basis. 

I. Description of the Proposal, as 

Modified by Amendment No. 1 

A. Background 

NYSE American currently provides a 

CUBE Auction for single-leg option 

orders (the ‘‘Single-Leg CUBE’’).8 As 

described more fully in the Notice, the 

Exchange proposes to adopt new 

Exchange Rule 971.2NY, ‘‘Complex 

Electronic Cross Transactions,’’ to 

establish a Complex CUBE Auction for 

Complex Orders that will operate in a 

manner that is substantially similar to 

the Single-Leg CUBE, with differences 

to account for the different processing of 

and priority rules for Complex Orders.9

NYSE American states that the Complex 

CUBE Auction will operate in a manner 

consistent with the electronic price 

improvement auctions for complex 

orders that are available on other 

options exchanges.10

B. Initiation of a Complex CUBE 

Auction 

To initiate a Complex CUBE Auction, 

an ATP Holder (the ‘‘Initiating 

Participant’’) electronically submits into 

the Complex CUBE Auction a Complex 

Order that the Initiating Participant 

represents as agent on behalf of a public 

customer, broker dealer, or other 

entity.11 The Initiating Participant 

guarantees the execution of the Complex 

CUBE Order by submitting a contra-side 

order (the ‘‘Complex Contra Order’’) 

representing principal interest or nonCustomer interest the Initiating 

Participant has solicited to trade solely 

with the CUBE Order at either a single 

stop price or an auto-match limit price, 

as discussed below.12

The Complex CUBE Order must be 

priced better than the interest resting on 

the Consolidated Book.13 In particular, a 

Complex CUBE Order must have a net 

debit/credit price that is equal to or 

better than the ‘‘CUBE BBO’’ on the 

same side of the market as the Complex 

CUBE Order (the ‘‘same-side CUBE 

BBO’’).14 The CUBE BBO is the more 

aggressive of (i) the Complex BBO 

improved by $0.01,15 or (ii) the Derived 

BBO improved by $0.01 multiplied by 

the smallest leg of the complex order 

strategy.16 A Complex CUBE Order that 

does not meet this requirement will be 

rejected, along with the Complex Contra 

Order.17 The CUBE BBO may be 

updated during the Auction.18 If the 

CUBE BBO updates during the Auction 

(the ‘‘updated CUBE BBO’’), the range of 

permissible executions for the Complex 

CUBE Order will adjust in accordance 

with the updated CUBE BBO, unless the 


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19See proposed Exchange Rule 971.2NY(a)(4)(A). 

The ‘‘range of permissible executions’’ for a 

Complex CUBE Order is all prices equal to or 

between the initiating price and the same-side 

CUBE BBO. See proposed Exchange Rule 

971.2NY(a)(4). The ‘‘initiating price’’ for a Complex 

CUBE Order is the less aggressive of the net debit/ 

credit price of the order or the price that locks the 

contra-side CUBE BBO. See proposed Exchange 

Rule 971.2NY(a)(3). 

20See proposed Exchange Rules 971.2NY(b)(1)(A) 

and (B). A single stop price is the price at which 

the Initiating Participant guarantees the Complex 

CUBE Order. An auto-match limit price is the most 

aggressive price at which the Initiating Participant 

is willing to trade with the Complex CUBE Order. 

21See proposed Exchange Rule 971.2NY(b)(1)(A) 

and Notice, 83 FR at 9772. 

22See proposed Exchange Rule 971.2NY(b)(1)(B). 

23See id. 

24See proposed Exchange Rule 971.2NY(c). 

25See id. 

26See proposed Exchange Rule 971.2NY(c)(1)(A). 

27See proposed Exchange Rule 971.2NY(c)(1)(B). 

The minimum/maximum parameters for the 

Response Time Interval will be no less than 100 

milliseconds and no more than one second. See id. 

The proposed Response Time Interval provisions 

are the same as the Response Time Interval 

provisions for the Single-Leg CUBE Auction. See 

Exchange Rule 971.1NY(c)(2)(B). 

28See proposed Exchange Rule 971.2NY(c)(1)(C). 

29A Complex GTX Order will not be displayed 

on the Consolidated Book or disseminated to any 

participants, and a Complex GTX Order that is not 

fully executed will be cancelled at the conclusion 

of the Auction. Complex GTX Orders with a size 

greater than the size of the Complex CUBE Order 

will be capped at the size of the Complex CUBE 

Order. Complex GTX Orders may be cancelled or 

modified, and a Complex GTX Order on the same 

side of the market as the CUBE Order will be 

rejected. See proposed Exchange Rule 

971.2NY(c)(1)(C)(i). NYSE American notes that 

because Complex GTX Orders can only trade 

against a Complex CUBE Order or an unrelated 

order on the same side as the Complex CUBE Order, 

same-side Complex GTX Orders are unnecessary to 

the Complex CUBE Auction. See Notice, 83 FR at 

9774. 

30See proposed Exchange Rule 

971.2NY(c)(1)(C)(ii). 

31See Notice, 83 FR at 9775. NYSE American 

notes that quotes and orders in the leg markets for 

a complex strategy underlying a Complex CUBE 

Order will not be eligible to participate in the 

Auction, although updates to the leg markets may 

cause an Auction to conclude early to preserve the 

priority of interest at that price. NYSE American 

states that limiting participation in the Complex 

CUBE Auction to Complex Orders, but allowing 

certain updates to the leg markets to cause an 

Auction to conclude early, is consistent with the 

manner in which the Exchange treats interest in the 

COA process, as described in Exchange Rule 

980NY(e)(7)(B). See id. 

32See proposed Exchange Rule 971.2NY(c)(2). 

33See Notice, 83 FR at 9776. 

34See id. 

35See proposed Exchange Rules 

971.2NY(c)(4)(B)(i)(c) and (ii)(c). 

interest that updated the CUBE BBO 

would cause the Auction to conclude 

early pursuant to proposed Exchange 

Rule 971.2NY(c)(3).19

C. Auction Process 

An Initiating Participant must 

guarantee the execution of a Complex 

CUBE Order by submitting a Complex 

Contra Order with either a single stop 

price or an auto-match limit price, 

which must be executable against the 

initiating price of the Auction.20 If the 

single stop price crosses the same-side 

CUBE BBO (i.e., would be outside the 

range of permissible executions), the 

Complex CUBE Order is not eligible to 

initiate an Auction and will be rejected 

along with the Complex Contra Order.21

A Complex Contra Order with an automatch limit price may trade with the 

Complex CUBE Order at prices that are 

better than or equal to the initiating 

price until trading at the auto-match 

limit price.22 If the auto-match limit 

price crosses the same-side CUBE BBO, 

the Complex Contra Order will be 

priced back to lock the same-side CUBE 

BBO.23

The time at which the Auction is 

initiated will be considered the time of 

execution for the Complex CUBE 

Order.24 Only one Complex CUBE 

Auction may be conducted at a time in 

any given complex order strategy and, 

once commenced, the Complex CUBE 

Order (as well as the Complex Contra 

Order) may not be cancelled or 

modified. 25

Upon receipt of a Complex CUBE 

Order, NYSE American will send a 

Request for Responses (‘‘RFR’’) 

identifying the complex order strategy, 

the side and size of the Complex CUBE 

Order, and the initiating price to all 

ATP Holders who subscribe to receive 

RFR messages.26 ATP Holders may 

submit responses to the RFR during the 

Response Time Interval, which will last 

for a random period of time within 

parameters that NYSE American 

determines and announces by Trader 

Update.27 Any ATP Holder may 

respond to the RFR, provided the 

response is properly marked specifying 

price, size, and side of the market (‘‘RFR 

Response’’).28 The Auction will accept 

the following RFR Responses: (i) A 

Complex GTX Order, defined as an 

Electronic Complex Order with a timein-force contingency for the Response 

Time Interval, which must specify the 

price, size, and side of the market; 29

and (ii) unrelated Complex Orders, 

including Complex Order Auction 

(‘‘COA’’)-eligible orders, on the opposite 

side of the market as the Complex CUBE 

Order that are received during the 

Response Time Interval, provided the 

unrelated orders can participate within 

the range of permissible executions 

specified pursuant to proposed 

Exchange Rule 971.2NY(a)(4).30 NYSE 

American believes that considering 

unrelated Complex Orders to be RFR 

Reponses would increase the number of 

orders against which the Complex CUBE 

Order could execute and thus should 

maximize price improvement 

opportunities for the Complex CUBE 

Order.31

D. Early Termination of a Complex 

CUBE Auction 

An Auction will conclude at the end 

of the Response Time Interval unless 

there is a trading halt in any component 

series of the Complex CUBE Order or an 

early conclusion event, as provided in 

proposed Exchange Rule 

971.2NY(c)(3).32 NYSE American states 

that ending the Auction early, as 

provided in proposed Exchange Rule 

971.2NY(c)(3), will preserve the priority 

of incoming interest and allow a 

Complex CUBE Auction to operate 

seamlessly with the Consolidated 

Book.33 Proposed Exchange Rule 

971.2NY(c)(3) provides that an Auction 

will conclude early if, during the 

Response Time Interval: 

(A) The Exchange receives a new 

Complex CUBE Order in the same 

complex order strategy that meets the 

conditions of proposed Exchange Rule 

971.2NY(b); 

(B) the Exchange receives interest that 

adjusts the same-side CUBE BBO to be 

better than the initiating price; 

(C) the Exchange receives interest that 

adjusts the same-side CUBE BBO to 

cross any RFR Response(s); 

(D) the Exchange receives interest that 

adjusts the same-side CUBE BBO to 

cross the single stop price specified by 

the Initiating Participant; 

(E) the Exchange receives interest that 

crosses the same-side CUBE BBO; or 

(F) the Exchange receives interest in 

the leg market that causes the contraside CUBE BBO to be better than the 

stop price or auto-match limit price. 

E. Allocations at the Conclusion of a 

Complex CUBE Auction 

Proposed Exchange Rule 

971.2NY(c)(4) describes the allocation of 

trading interest at the conclusion of an 

Auction. NYSE American notes that if 

RFR Responses can fill the Complex 

CUBE Order at a price or prices better 

than the stopped price or auto-match 

limit price, the Complex CUBE Order 

will be matched against the betterpriced RFR Responses to provide the 

Complex CUBE Order the maximum 

amount of price improvement 

possible.34 If there are no RFR 

Responses, a Complex Contra Order 

with a single stop price will execute 

against the Complex CUBE Order at the 

stop price, and a Complex Contra Order 

with an auto-match limit price will 

execute against the Complex CUBE 

Order at the initiating price.35 If there 


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36See proposed Exchange Rule 971.2NY(c)(4)(A). 

Any RFR Response that exceeds the size of the 

Complex CUBE Order will be capped at the 

Complex CUBE Order size for purposes of size pro 

rata allocation of the Complex CUBE Order. See 

proposed Exchange Rule 971.2NY(c)(4). In addition, 

a single RFR Response will not be allocated a 

volume that is greater than its size. See proposed 

Exchange Rule 971.2NY(c)(4)(C). 

37See proposed Exchange Rules 

971.2NY(c)(4)(B)(i)(a) and (ii)(a). The Complex 

CUBE Order will be allocated among RFR 

Responses pursuant to the size pro rata algorithm 

in Exchange Rule 964NY(b)(3) at each price point. 

See id. 

38For a Complex Contra Order with a single stop 

price, the remaining size of the Complex CUBE 

Order will execute at the stop price, and the 

Complex Contra Order will receive an allocation of 

the greater of 40% of the original Complex CUBE 

Order size or one contract, or the greater of 50% of 

the original Complex CUBE Order size or one 

contract if there is only one RFR Response. Any 

remaining size of the Complex CUBE Order at the 

stop price will be allocated among the remaining 

RFR Responses on a size pro rata basis pursuant to 

Exchange Rule 964NY(b)(3). If all RFR Responses 

are filled, any remaining size of the Complex CUBE 

Order will be allocated to the Complex Contra 

Order. See proposed Exchange Rule 

971.2NY(c)(4)(B)(i)(b). 

39For a Complex Contra Order with an automatch limit price, the remaining size of the 

Complex CUBE Order will execute at the Complex 

Contra Order’s auto-match limit price and, if 

volume remains, at prices worse than the automatch limit price. At each price point equal to or 

worse than the auto-match limit price, the Complex 

Contra Order will receive an allocation equal to the 

aggregate size of all other RFR Responses starting 

with the best price at which an execution against 

an RFR Response occurs within the range of 

permissible executions until a price point is 

reached where the balance of the CUBE Order can 

be fully executed (the ‘‘clean-up price’’). At the 

clean-up price, if there is sufficient size of the 

Complex CUBE Order still available after executing 

at better prices or against Customer interest, the 

Complex Contra Order will be allocated additional 

volume required to achieve an allocation of the 

greater of 40% of the original Complex CUBE Order 

size or one contract or the greater of 50% of the 

original Complex CUBE Order size or one contract 

if there is only one RFR Response. If the Complex 

Contra Order meets its allocation guarantee at a 

price better than the clean-up price, it will cease 

matching RFR Responses that may be priced worse 

than the price at which the Complex Contra Order 

received its allocation guarantee. If there are other 

RFR Responses at the clean-up price, the remaining 

size of the Complex CUBE Order will be allocated 

to such interest pursuant to the size pro rata 

algorithm set forth in Rule 964NY(b)(3). Any 

remaining portion of the Complex CUBE Order will 

be allocated to the Complex Contra Order at the 

initiating price. See proposed Exchange Rule 

971.2NY(c)(4)(B)(ii)(b). 

40The proposed rules indicate that to the extent 

that Single-Leg and Complex CUBE Auctions 

involving the same option series occur 

concurrently, each CUBE Auction will be processed 

sequentially based on the time each CUBE Auction 

commenced. At the time each CUBE Auction 

concludes, including when it concludes early, it 

will be processed pursuant to Exchange Rule 

971.1NY(c)(5) or proposed Exchange Rule 

971.2NY(c)(4), as applicable. See proposed 

Exchange Rules 971.1NY, Commentary .01, and 

971.2NY, Commentary .03. 

41See Notice, 83 FR at 9780. 

42See id. 

43See Amendment No. 1. 

44See proposed Exchange Rule 971.2NY, 

Commentary .01, and Notice, 83 FR at 9777. 

Proposed Exchange Rule 971.2NY, Commentary .01 

provides that the following conduct would be 

inconsistent with just and equitable principles of 

trade: (a) An ATP Holder entering RFR Responses 

to an Auction for which the ATP Holder is the 

Initiating Participant; (b) engaging in a pattern and 

practice of trading or quoting activity for the 

purpose of causing an Auction to conclude before 

the end of the Response Time Interval; (c) an 

Initiating Participant that breaks up an agency order 

into separate Complex CUBE Orders for the purpose 

of gaining a higher allocation percentage than the 

Initiating Participant would have otherwise 

received in accordance with the allocation 

procedures contained in proposed Exchange Rule 

971.2NY(c)(5); and (d) engaging in a pattern and 

practice of sending multiple RFR Responses at the 

same price that in the aggregate exceed the size of 

the Complex CUBE Order. 

45See id. at 9777 n.47 (citing PHLX Rule 1087(c)– 

(e); ISE Rule 723, Supplementary Material .01; and 

BOX Rule 7150, IM–7150–2(a) and (b)). NYSE 

American also proposes to correct a typographical 

error in Exchange Rule 971.1NY, Commentary .02, 

by adding the word ‘‘of’’ to the rule text, which was 

inadvertently omitted. 

46A User is any ATP Holder that is authorized 

to obtain access to the System. See Exchange Rule 

900.2NY(87). 

47See Notice, 83 FR at 9778. 

48See id. 

are RFR Responses, any Customer 

orders that arrive during an Auction as 

RFR Responses will have first priority to 

execute at each price level, and they 

will be allocated on a size pro rata basis 

pursuant to Exchange Rule 

964NY(b)(3).36 After Customer interest 

at a price level has been satisfied, any 

remaining size of a Complex CUBE 

Order will be allocated first to RFR 

Responses within the permissible range 

of executions that are priced better than 

the stop price or the auto-match limit 

price, as applicable.37 The allocation of 

any remaining size of the Complex 

CUBE Order varies, depending on 

whether the Complex Contra Order has 

a single stop price 38 or an auto-match 

limit price.39

F. Concurrent Single-Leg and Complex 

CUBE Auctions 

Although there will be only one 

Complex CUBE Auction at a time for a 

particular Complex Order strategy, a 

Single-Leg CUBE Auction for a series 

may occur concurrently with a Complex 

CUBE Auction for a strategy that 

includes that series, as provided in 

proposed Exchange Rules 971.1NY, 

Commentary .01, and 971.2NY, 

Commentary .03.40 Thus, the Exchange 

will accept orders designated for the 

CUBE on a single option series when a 

Complex CUBE Auction in a Complex 

Order strategy that includes that series 

is in progress.41 The Exchange will also 

accept Complex Orders designated for 

the Complex CUBE Auction when a 

Single-Leg CUBE Auction in any of the 

component series is in progress.42 The 

Exchange believes that providing for 

these concurrent auctions could reduce 

the potential for an Auction to be 

terminated early by other incoming 

orders designated for CUBE in the same 

single options series and that this could, 

in turn, reduce order cancelations.43

G. Conduct Inconsistent With Just and 

Equitable Principles of Trade 

NYSE American also proposes to 

adopt rules identifying conduct that 

would be considered inconsistent with 

just and equitable principles of trade 

with respect to a Complex CUBE 

Auction to discourage ATP Holders 

from attempting to misuse or 

manipulate the Auction process.44

NYSE American notes that proposed 

Exchange Rule 971.2NY, Commentary 

.01 is based on Exchange Rule 971.1NY, 

Commentary, 02 relating to the SingleLeg CUBE, and is consistent with the 

rules of other options exchanges that 

offer electronic price improvement 

auction mechanisms.45

H. Order Exposure Requirements 

Current Exchange Rule 935NY 

prohibits Users 46 from executing as 

principal any orders they represent as 

agent unless (i) agency orders are first 

exposed on the Exchange for at least one 

second; (ii) the User has been bidding or 

offering on the Exchange for at least one 

second prior to receiving an agency 

order that is executable against such bid 

or offer; (iii) the User utilizes the SingleLeg CUBE Auction pursuant to 

Exchange Rule 971.1.NY; or (iv) the 

User utilizes the COA auction process 

pursuant to Exchange Rule 980NY(e). 

NYSE American proposes to amend 

Exchange Rule 935NY to provide that a 

User may execute as principal an order 

that the User represents as agent, 

provided that the User utilizes the 

Complex CUBE Auction process. Such a 

Complex CUBE Order would not be 

subject to the one-second order 

exposure requirement of Exchange Rule 

935NY.47 NYSE American believes that 

the proposed Response Time Interval, 

with a random length of no less than 

100 milliseconds and no greater than 

one second (as determined and 

announced by the Exchange), is of 

sufficient length to permit ATP Holders 

time to respond to a Complex CUBE 

Auction, thereby enhancing 

opportunities for competition among 

participants and increasing the 

likelihood of price improvement for the 

Complex CUBE Order.48

I. Changes to the Single-Leg CUBE 

Auction and COA Rules 

The proposal revises the title of 

Exchange Rule 971.1NY to ‘‘Single-Leg 


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49See Exchange Rule 971.1NY(a). Alternatively, 

the Contra Order may represent principal interest. 50See Exchange Rule 971.1NY(a) and proposed 

Exchange Rule 971.1NY(b)(10). 51 In particular, NYSE American proposes to 

specify in Exchange Rule 971.1NY(c)(1)(C) that it 

would adjust the auto-match limit price to within 

the range of permissible executions by adding a 

new sentence stating that: ‘‘An auto-match limit 

price specified for a CUBE Order to buy (sell) that 

is below (above) the lower (upper) bound of the 

range of permissible executions will be repriced to 

the lower (upper) bound.’’ See Notice, 83 FR at 

9773. 

52Exchange Rule 980NY(e)(6)(A)(i), as amended 

by the current proposal, will provide that an 

incoming Complex Order, including an incoming 

Complex CUBE Order, or a COA-eligible order on 

the opposite side of the market as the initiating 

COA-eligible order, that locks or crosses the initial 

Derived BBO will cause the COA to end early. 

Exchange Rule 980NY(e)(6)(B)(i), as amended by 

the current proposal, will provide that an incoming 

Complex Order, including a Complex CUBE Order, 

or COA-eligible order that is priced equal to or 

lower (higher) than the initiating COA-eligible order 

to buy (sell), and also locks or crosses the contraside initial Derived BBO, will cause the COA to end 

early. As noted above, the proposal also revises 

Exchange Rule 980NY(e)(6) to replace references to 

the ‘‘Complex BBO’’ with references to the ‘‘Derived 

BBO.’’ 

53See Amendment No. 1. 

54See Notice, 83 FR at 9780, and Exchange Rule 

900.2NY(18A). 

55Proposed Exchange Rule 971.2NY, 

Commentary .02 provides definitions and examples 

of ‘‘better-priced’’ and ‘‘more aggressive’’ interest, 

and ‘‘worse-priced’’ and ‘‘less aggressive’’ interest; 

interest that ‘‘improves the BBO;’’ interest that 

‘‘locks’’ contra-side interest; interest that ‘‘crosses’’ 

contra-side interest; and ‘‘executable’’ interest. The 

Exchange notes that the definitions use the term 

‘‘interest’’ because they apply to any interest that 

could interact with a Complex Order, including 

quotes and orders in the leg markets that comprise 

the complex order strategy. See Notice, 83 FR at 

9771. 

56See id. 

57See id. at 9779. 

58See id. 

59See id. 

60 In approving this proposed rule change, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 61 15 U.S.C. 78f(b)(5). 62See, e.g., Phlx Rule 1080(n); MIAX Rule 515A, 

Interpretation and Policy .12(a); CBOE Rule 6.74A; 

BOX Rule 7245; and ISE Rule 723, Supplementary 

Material .09. 63See Notice, 83 FR at 9769. 64See proposed Exchange Rules 971.2NY(b)(2) 

and (a)(1). 

Electronic Cross Transactions,’’ to 

distinguish Exchange Rule 971.1NY 

from proposed Exchange Rule 971.2NY, 

‘‘Complex Electronic Cross 

Transactions.’’ The proposal revises also 

revises Exchange Rule 971.1NY to 

indicate, as discussed above, that an 

Initiating Participant that solicits 

interest to trade with a Single-Leg CUBE 

Order may solicit only non-Customer 

interest to be the Contra Order.49 In 

addition, the proposal amends Exchange 

Rule 971.1NY to clarify that the Contra 

Order will trade solely with the CUBE 

Order and to indicate that a CUBE Order 

and Contra Order submitted during a 

trading halt will be rejected.50 The 

proposal revises the auto-match 

provisions in Exchange Rule 

971.1NY(c)(1)(C) to indicate that the 

auto-match limit price for a CUBE Order 

that is outside of the range of 

permissible executions may be repriced 

so that it is within the range of 

permissible executions.51 The proposal 

modifies Exchange Rule 

971.1NY(c)(2)(i)(d) to indicate that a 

GTX Order may be modified, as well as 

cancelled. Finally, as discussed above, 

the proposal adds new Commentary .01 

to Exchange Rule 971.1NY, which 

addresses concurrent CUBE Auctions 

for a single option series and for a 

Complex Order that includes that series. 

The proposal also amends Exchange 

Rule 980NY(e)(6)(A) and (B) to indicate 

that incoming Complex CUBE Orders 

are among the incoming Complex 

Orders that could cause a COA Auction 

to end early.52 The Exchange notes that 

this is consistent with the principle that 

the Exchange will conduct only one 

auction in a given Complex Order 

strategy at a time, as provided in 

proposed Exchange Rule 971.2NY(c) 

and Exchange Rule 980NY(e)(3).53

J. Additional Changes 

The proposal revises the definition of 

‘‘Professional Customer’’ in Exchange 

Rule 900.2NY(18A) to add the Complex 

CUBE Auction provisions in proposed 

Exchange Rule 971.2NY to the existing 

list of Exchange rules for which a 

Professional Customer will be treated in 

the same manner as a Broker/Dealer (or 

non-Customer) in securities. NYSE 

American notes that this is consistent 

with the treatment of Professional 

Customer Orders in the Single-Leg 

CUBE Auction.54 NYSE American also 

proposes to add Commentary .02 to 

proposed Exchange Rule 971.2NY to 

further explain the defined terms used 

in proposed Rule 971.2NY.55 NYSE 

American believes that these definitions 

will help to clarify how the Auction will 

operate.56

K. Implementation 

NYSE American will announce the 

implementation date of the proposed 

rule change in a Trader Update to be 

published no later than 60 days 

following Commission approval of the 

proposal.57 The implementation date 

would be no later than 60 days 

following publication of the Trader 

Update announcing Commission 

approval.58 The Exchange believes that 

this implementation schedule will 

provide ATP Holders with adequate 

notice of the Complex CUBE Auction 

and allow time for ATP Holders that 

intend to participate in Complex CUBE 

Auctions to prepare their systems for 

participation in the Auctions.59

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change, as 

modified by Amendment No. 1, is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.60 In particular, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1, is consistent with Section 6(b)(5) 

of the Act,61 which requires, among 

other things, that the rules of a national 

securities exchange be 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 regulating, clearing, 

settling, processing information with 

respect to, and 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; and 

not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Commission notes that NYSE 

American’s Complex CUBE Auction 

mechanism is similar to rules on other 

options exchanges that permit the entry 

of complex orders into an electronic 

price improvement auction 

mechanism.62 In addition, NYSE 

American states that the Complex CUBE 

Auction will operate in a manner that is 

substantially similar to the Single-Leg 

CUBE Auction, with differences to 

account for the different processing of 

and priority rules for Complex Orders.63

The Commission believes that allowing 

ATP Holders to enter orders into the 

Complex CUBE Auction mechanism 

may provide additional opportunities 

for Complex Orders to receive price 

improvement. 

The Commission notes that Initiating 

Participant must enter a Complex CUBE 

Order with a net debit/credit price that 

is equal to or better than the same-side 

CUBE BBO (i.e., the more aggressive of 

the Complex BBO improved by $0.01 or 

the Derived BBO improved by $0.01 

multiplied by the smallest leg of the 

complex order strategy), and that the 

Initiating Participant must submit a 

Complex Contra Order for the full size 

of the Complex CUBE Order.64 Once the 

Complex CUBE Auction begins, the 

Complex CUBE Order and the Complex 


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65See proposed Exchange Rule 971.2NY(c). 

66 15 U.S.C. 78k(a)(1). 

67 17 CFR 240.11a2–2(T). 

68See Notice, 83 FR at 9778–79, and Amendment 

No. 1. 

69 Id. 

70The member may, however, participate in 

clearing and settling the transaction. See Securities 

Exchange Act Release No. 14563 (March 14, 1978), 

43 FR 11542 (March 17, 1978) (regarding the 

Designated Order Turnaround System of the New 

York Stock Exchange (‘‘1978 Release’’)). 

71See Notice, 83 FR at 9778. 

72 In considering the operation of automated 

execution systems operated by an exchange, the 

Commission has noted that, while there is no 

independent executing exchange member, the 

execution of an order is automatic once it has been 

transmitted into each system. Because the design of 

these systems ensures that members do not possess 

any special or unique trading advantages in 

handling their orders after transmitting them to the 

exchange, the Commission has stated that 

executions obtained through these systems satisfy 

the independent execution requirement of Rule 

11a2–2(T). See Securities Exchange Act Release No. 

15533 (January 29, 1979), 44 FR 6084 (January 31, 

1979) (regarding the American Stock Exchange’s 

Post Execution Reporting System and Switching 

System, the Intermarket Trading System, the 

Multiple Dealer Trading Facility of the Cincinnati 

Stock Exchange, the PCX Communications and 

Execution System, and the Philadelphia Stock 

Exchange Automated Communications and 

Execution System (‘‘1979 Release’’)). 

73See Notice, 83 FR at 9779. 

74See id. at 9778. 

75See, e.g., Securities Exchange Act Release Nos. 

59154 (December 23, 2008), 73 FR 80468 (December 

31, 2008) (SR–BSE–2008–48) (approving, among 

other things, the equity rules of the Boston Stock 

Exchange (‘‘BSE’’)); 57478 (March 12, 2008), 73 FR 

14521 (March 18, 2008) (SR–NASDAQ–2007–004 

and SR–NASDAQ–2007–080) (approving rules 

governing the trading of options on The NASDAQ 

Options Market); 49068 (January 13, 2004), 69 FR 

2775 (January 20, 2004) (SR–BSE–2002–15) 

(approving the Boston Options Exchange as an 

options trading facility of BSE); the 1979 Release; 

and the 1978 Release. 

76The Exchange further represents that there may 

be instances of orders for a covered account that 

may be sent by an off-floor ATP Holder to an 

unaffiliated Floor Broker for entry into the Complex 

CUBE Auction mechanism. The Exchange 

represents that at the current time, Exchangesponsored Floor Broker systems are not enabled to 

accept orders into the Complex CUBE Auction 

mechanism from Floor Brokers. The Exchange 

further represents that, if a Floor Broker were to 

gain access to the Complex CUBE Auction 

mechanism via a third-party system, that Floor 

Broker may not rely on any exceptions found in 

Section 11(a) of the Act or rules thereunder to enter 

orders for their own covered accounts into the 

Auction mechanism from on the floor, or transmit 

such orders from on the floor to off of the floor for 

entry into the Complex CUBE Auction mechanism. 

See Amendment No. 1. 

77See Notice, 83 FR at 9778–79. 

78See Notice, 83 FR at 9779. The Exchange notes 

that the Initiating Participant may not cancel or 

modify a Complex CUBE Order once a Complex 

CUBE Auction has started. See id. at 9779 n.60 and 

proposed Exchange Rule 971.2NY(c). 

Contra Order may not be cancelled or 

modified.65 Therefore, a Complex CUBE 

Order submitted to the Complex CUBE 

Auction will be guaranteed price 

improvement over the Complex BBO or 

the Derived BBO at the time the 

Complex CUBE Order was entered into 

the System, and will be given an 

opportunity for further price 

improvement by being exposed to ATP 

Holders during the Complex CUBE 

Auction. 

IV. Section 11(a) of the Act 

Section 11(a)(1) of the Act 66 prohibits 

a member of a national securities 

exchange from effecting transactions on 

that exchange for its own account, the 

account of an associated person, or an 

account over which it or its associated 

person exercises discretion (collectively, 

‘‘covered accounts’’), unless an 

exception applies. Section 11(a)(1) and 

the rules thereunder contain a number 

of exceptions for principal transactions 

by members and their associated 

persons, including the exceptions set 

forth in Rule 11a2–2(T) under the Act.67

The Exchange has represented that it 

has analyzed its rule proposed 

hereunder, and believes that they are 

consistent with the requirements of 

Section 11(a) of the Act and rules 

thereunder.68 For the reason set forth 

below, the Commission believes that the 

proposed Complex CUBE Auction rules 

are consistent with the requirements of 

Section 11(a) of the Act and the rules 

thereunder. 

A. Rule 11a2–2(T) Under the Act 

(‘‘Effect Versus Execute’’ Rule) 

Rule 11a2–2(T) under the Act,69

known as the ‘‘effect versus execute’’ 

rule, provides exchange members with 

an exception from the Section 11(a)(1) 

prohibition. Rule 11a2–2(T) permits an 

exchange member, subject to certain 

conditions, to effect transactions for 

covered accounts by arranging for an 

unaffiliated member to execute the 

transactions on the exchange. To 

comply with the conditions of Rule 

11a2–2(T), a member: (1) May not be 

affiliated with the executing member; 

(2) must transmit the order from off the 

exchange floor; (3) may not participate 

in the execution of the transaction once 

it has been transmitted to the member 

performing the execution; 70 and (4) 

with respect to an account over which 

the member has investment discretion, 

neither the member nor its associated 

person may retain any compensation in 

connection with effecting the 

transaction except as provided in the 

Rule. The Exchange believes that orders 

sent by off-floor ATP Holders, for 

covered accounts, to the proposed 

Complex CUBE Auction would qualify 

for this ‘‘effect versus execute’’ 

exception.71

Rule 11a2–2(T) requires that the order 

be executed by an exchange member 

who is unaffiliated with the member 

initiating the order. The Commission 

has stated that the requirement is 

satisfied when automated exchange 

facilities, such as the Exchange’s 

Complex CUBE Auction, are used, as 

long as the design of these systems 

ensures that members do not possess 

any special or unique trading 

advantages in handling their orders after 

transmitting them to the Exchange.72

The Exchange represents that the design 

of the Complex CUBE Auction ensures 

that ATP Holders do not have any 

special or unique trading advantages in 

the handling of their orders after 

transmission.73 Based on the Exchange’s 

representations, the Commission 

believes that the Complex CUBE 

Auction’s rules satisfy this requirement. 

Second, Rule 11a2–2(T) requires 

orders for covered accounts be 

transmitted from off the exchange floor. 

The Exchange represents that orders for 

covered accounts sent to the Complex 

CUBE Auction from off-floor ATP 

Holders will be transmitted from remote 

terminals directly to the Complex CUBE 

Auction by electronic means.74 In the 

context of other automated trading 

systems, the Commission has found that 

the off-floor transmission requirement is 

met if a covered account order is 

transmitted from a remote location 

directly to an exchange’s floor by 

electronic means.75 With respect to such 

orders transmitted electronically from 

remote terminals directly to the 

Complex CUBE Auction, the 

Commission believes that the Complex 

CUBE Auction’s rules satisfy the offfloor transmission requirement.76 The 

Commission believes that, based on the 

foregoing, the proposal satisfies the offfloor transmission requirement for the 

purposes of ‘‘effect versus execute’’ rule. 

Third, Rule 11a2–2(T) requires that 

the member not participate in the 

execution of its order once it has been 

transmitted to the member performing 

the execution. The Exchange represents 

that, upon submission to the Complex 

CUBE Auction, an order will be 

executed automatically pursuant to the 

proposed rules set forth for the 

Auction.77 The Exchange states that, in 

particular, execution of an order sent to 

the Auction depends not on the ATP 

Holder entering the order, but rather on 

what other orders are present and the 

priority of those orders. Thus, at no time 

following the submission of an order is 

an ATP Holder able to acquire control 

or influence over the result or timing of 

order execution.78 Accordingly, the 

Commission believes that an ATP 

Holder does not participate in the 

execution of an order submitted into the 


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79 17 CFR 240.11a2–2(T)(a)(2)(iv). In addition, 

Rule 11a2–2(T)(d) requires a member or associated 

person authorized by written contract to retain 

compensation, in connection with effecting 

transactions for covered accounts over which such 

member or associated person thereof exercises 

investment discretion, to furnish at least annually 

to the person authorized to transact business for the 

account a statement setting forth the total amount 

of compensation retained by the member in 

connection with effecting transactions for the 

account during the period covered by the statement. 

See 17 CFR 240.11a2–2(T)(d). See also 1978 Release 

(stating ‘‘[t]he contractual and disclosure 

requirements are designed to assure that accounts 

electing to permit transaction-related compensation 

do so only after deciding that such arrangements are 

suitable to their interests’’). 

80See Amendment No. 1. See also EDGX Rule 

21.20, Interpretation and Policy .02. Although the 

EDGX COA Auction is distinct from the CUBE 

Auctions in that the EDGX COA Auction is not an 

auction of paired orders, NYSE American believes 

that its proposed rules describing the sequential 

processing of Single-Leg and Complex CUBE 

Auctions are consistent with the sequential 

processing of COAs described in EDGX’s rules. See 

Amendment No. 1. 

81See id. 

82See id. 

83 15 U.S.C. 78s(b)(2). 

Complex CUBE Auction. Based on the 

Exchange’s representations, the 

Commission believes that the proposal 

satisfies the non-participation 

requirement of Rule 11a2–2(T). 

Fourth, in the case of a transaction 

effected for an account with respect to 

which the initiating member or an 

associated person thereof exercises 

investment discretion, neither the 

initiating member nor any associated 

person thereof may retain any 

compensation in connection with 

effecting the transaction, unless the 

person authorized to transact business 

for the account has expressly provided 

otherwise by written contract referring 

to Section 11(a) of the Act and Rule 

11a2–2(T).79 The Commission notes that 

ATP Holders trading for covered 

accounts over which they exercise 

investment discretion must comply with 

this condition in order to rely on the 

rule’s exemption. 

V. Solicitation of Comments on 

Amendment No. 1 to the Proposed Rule 

Change 

Interested persons are invited to 

submit written data, views, and 

arguments concerning whether 

Amendment No. 1 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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEAMER–2018–05 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–NYSEAMER–2018–05. 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 (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 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–NYSEAMER–2018–05, and 

should be submitted on or before July 2, 

2018. 

VI. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 1 

The Commission finds good cause to 

approve the proposed rule change, as 

modified by Amendment No. 1, prior to 

the thirtieth day after the date of 

publication of notice of the filing of 

Amendment No. 1 in the Federal 

Register. As discussed above, 

Amendment No. 1 revises the proposal 

to: (1) Add Exchange Rules 971.1NY, 

Commentary .01, and 971.2NY, 

Commentary .03 to specify that a SingleLeg CUBE Auction for a single series 

may occur concurrently with a Complex 

CUBE Auction for a Complex Order that 

includes that series, and to describe the 

processing of such concurrent auctions; 

(2) add definitions of ‘‘single stop price’’ 

and ‘‘auto-match limit price,’’ add 

examples to the defined terms in 

proposed Exchange Rule 971.2NY, 

Commentary .02, and clarify that in both 

the Single-Leg and Complex CUBE 

Auctions, a Contra Order will trade 

solely with the CUBE Order; (3) indicate 

that after the Complex CUBE Order has 

been filled, RFR Responses, including 

Complex GTX Orders, may trade with 

Complex Orders on the same side of the 

market as the Complex CUBE Order; (4) 

further explain the rationale for not 

allowing customer interest on a Contra 

Order; (5) further explain the reasons for 

early Auction terminations when the 

same-side CUBE BBO crosses RFR 

Responses or a single stop price; (6) 

provide an example showing the 

allocation of a Complex CUBE Order 

guaranteed with an auto-match limit 

price; (7) modify the description of the 

proposed changes to Exchange Rules 

980NY(e)(6)(A) and (B); and (8) provide 

further support for the Exchange’s 

argument that the proposal is consistent 

with Section 11(a) of the Act and the 

rules thereunder. 

With respect to the processing of 

Single-Leg and Complex CUBE 

Auctions, NYSE American believes that 

the new rule language describing the 

sequential processing of these auctions 

is consistent with the handling by Cboe 

EDGX Exchange, Inc. (‘‘EDGX’’) of 

orders executed in concurrent complex 

order auctions (‘‘COAs’’) involving the 

same complex order strategy.80 Thus, 

NYSE American believes that its 

proposed rules describing the 

processing of Single-Leg and Complex 

CUBE Auctions do not raise new or 

novel regulatory issues.81 NYSE 

American also notes that none of the 

proposed changes that provide 

additional details regarding the 

operation of the Single-Leg and 

Complex CUBE Auctions alter the 

functionality of the proposed Complex 

CUBE mechanism (or Single-Leg CUBE), 

as described in the original filing, but 

rather, provide additional details 

regarding the operation of the 

Auctions.82 In addition, the 

Commission believes that Amendment 

No. 1 provides additional clarity in the 

rule text and additional analysis of 

several aspects of the proposal, thus 

facilitating the Commission’s ability to 

make the findings set forth above to 

approve the proposal. For these reasons, 

the Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,83 to approve the proposed rule 

change, as modified by Amendment No. 

1, on an accelerated basis. 


daltland on DSKBBV9HB2PROD with NOTICES
27068 Federal Register / Vol. 83, No. 112 / Monday, June 11, 2018 / Notices 

84 Id. 

85 17 CFR 200.30–3(a)(12). 

VII. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,84 that the 

proposed rule change (SR–NYSEAMER– 

2018–05), as modified by Amendment 

No. 1, is approved on an accelerated 

basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.85

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–12432 Filed 6–8–18; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice: 10440] 

U.S. National Commission for UNESCO 

Notice of Teleconference Meeting 

The U.S. National Commission for 

UNESCO will hold a conference call on 

Thursday, June 28, 2018, from 11:00 

a.m. until 12:00 p.m. Eastern Daylight 

Time. This will be a teleconference 

meeting to consider the 

recommendations of the Commission’s 

National Committee for the 

Intergovernmental Oceanographic 

Commission (IOC). The Commission 

will accept brief oral comments during 

a portion of this conference call. The 

public comment period will be limited 

to approximately 10 minutes in total, 

with two minutes allowed per speaker. 

For more information, or to arrange to 

participate in the conference call, 

individuals must make arrangements 

with the Executive Director of the 

National Commission by June 26, 2018. 

The National Commission may be 

contacted via email at DCUNESCO@

state.gov. 

Paul T. Mungai, 

Acting Executive Director, U.S. National 

Commission for UNESCO, Department of 

State. 

[FR Doc. 2018–12504 Filed 6–8–18; 8:45 am] 

BILLING CODE 4710–19–P 

DEPARTMENT OF STATE 

[Public Notice: 10439] 

Notice of Determinations; Culturally 

Significant Objects Imported for 

Exhibition Determinations: ‘‘The 

History of the Bible—in the Beginning’’ 

Exhibition 

SUMMARY: Notice is hereby given of the 

following determinations: I hereby 

determine that certain objects to be 

included in the exhibition ‘‘The History 

of the Bible—in the Beginning,’’ 

imported from abroad for temporary 

exhibition within the United States, are 

of cultural significance. The objects are 

imported pursuant to a loan agreement 

with the foreign owner or custodian. I 

also determine that the exhibition or 

display of the exhibit objects at the 

Museum of the Bible, Washington, 

District of Columbia, from on or about 

June 20, 2018, until on or about June 1, 

2019, and at possible additional 

exhibitions or venues yet to be 

determined, is in the national interest. 

I have ordered that Public Notice of 

these determinations be published in 

the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Elliot Chiu, Attorney-Adviser, Office of 

the Legal Adviser, U.S. Department of 

State (telephone: 202–632–6471; email: 

section2459@state.gov). The mailing 

address is U.S. Department of State, L/ 

PD, SA–5, Suite 5H03, Washington, DC 

20522–0505. 

SUPPLEMENTARY INFORMATION: The 

foregoing determinations were made 

pursuant to the authority vested in me 

by the Act of October 19, 1965 (79 Stat. 

985; 22 U.S.C. 2459), E.O. 12047 of 

March 27, 1978, the Foreign Affairs 

Reform and Restructuring Act of 1998 

(112 Stat. 2681, et seq.; 22 U.S.C. 6501 

note, et seq.), Delegation of Authority 

No. 234 of October 1, 1999, and 

Delegation of Authority No. 236–3 of 

August 28, 2000. 

Marie Therese Porter Royce, 

Assistant Secretary for Educational and 

Cultural Affairs, Department of State. 

[FR Doc. 2018–12491 Filed 6–8–18; 8:45 am] 

BILLING CODE 4710–05–P 

DEPARTMENT OF STATE 

[Delegation of Authority No. 280–2] 

Delegation by the Secretary of State to 

the Under Secretary for Political Affairs 

of Authorities Regarding 

Congressional Reporting 

By virtue of the authority vested in 

the Secretary of State by the laws of the 

United States, including 22 U.S.C. 

2651a, I hereby delegate to the Under 

Secretary of State for Political Affairs, to 

the extent authorized by law, the 

authority to approve submission of 

reports to the Congress. 

This delegation covers the decision to 

submit to the Congress both one-time 

reports and recurring reports. However, 

this delegation shall not be construed to 

authorize the Under Secretary to make 

waivers, certifications, determinations, 

findings, or other such statutorily 

required substantive actions that may be 

called for in connection with the 

submission of a report. The Under 

Secretary shall be responsible for 

referring to the Secretary or the Deputy 

Secretary any matter on which action 

would appropriately be taken by such 

official. 

Any authority covered by this 

delegation may also be exercised by the 

Deputy Secretary, to the extent 

authorized by law, or by the Secretary 

of State. This delegation does not repeal 

or amend any other delegation currently 

in effect. 

This delegation of authority shall be 

published in the Federal Register. 

Dated: May 17, 2018. 

Michael R. Pompeo, 

Secretary of State. 

[FR Doc. 2018–12450 Filed 6–8–18; 8:45 am] 

BILLING CODE 4710–10–P 

OFFICE OF THE UNITED STATES 

TRADE REPRESENTATIVE 

[Docket Number USTR–2018–0013] 

Dispute Number WT/DS545; WTO 

Dispute Settlement Proceeding: United 

States—Safeguard Measure on Imports 

of Crystalline Silicon Photovoltaic 

Products 

AGENCY: Office of the United States 

Trade Representative. 

ACTION: Notice with request for 

comments. 

SUMMARY: The Office of the United 

States Trade Representative (USTR) is 

providing notice that on May 14, 2018, 

the Government of the Republic of 

Korea requested consultations with the 

United States under the Marrakesh 

Agreement Establishing the World Trade 

Organization concerning a safeguard 

measure the United States implemented 

on imports of crystalline silicon 

photovoltaic cells, whether or not 

partially or fully assembled into other 

products (solar products). That request 

is available at www.wto.org in a 

document designated as WT/DS545/1. 

USTR invites written comments from 

the public concerning the issues raised 

in this dispute. 

DATES: Although USTR will accept any 

comments during the course of the 

dispute settlement proceedings, you 

should submit your comment on or 

before July 11, 2018, to be assured of 

timely consideration by USTR. 

ADDRESSES: USTR strongly prefers 

electronic submissions made through 

the Federal eRulemaking Portal: http:// 


daltland on DSKBBV9HB2PROD with NOTICES