Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 3697 

36 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 73367 

(October 15, 2014), 79 FR 63009 (‘‘Notice’’). 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 73718, 

79 FR 72748 (December 8, 2014). The Commission 

designated January 19, 2014, as the date by which 

it should approve, disapprove, or institute 

proceedings to determine whether to disapprove the 

proposed rule change. 

6See Letter from Elizabeth King, Secretary & 

General Counsel, Exchange, to Kevin O’Neill, 

Deputy Secretary, Commission, dated January 8, 

2015 (‘‘NYSE MKT Letter’’) available at http://

www.sec.gov/comments/sr-nysemkt-2014-86/

nysemkt201486-1.pdf. 

7 15 U.S.C. 78s(b)(2)(B). 

8See Securities and Exchange Release No. 55162 

(January 24, 2007), 72 FR 4738 (February 1, 2007) 

(Order Granting Approval of SR–Amex–2006–106) 

(‘‘Quote Mitigation Approval Order’’). 

9See Notice, supra note 3, at 63009. 

10See Exchange Rule 970.1NY, and Notice, supra 

note 3, at 63009. 

11See id. 

12 In addition, the Exchange proposes to amend 

paragraphs (b)(1) and (b)(2) of Exchange Rule 

970NY (Firm Quotes) to delete references to the 

‘‘Quote Mitigation Plan.’’ See Notice, supra note 3, 

at 63010. 

13See Amendment to Plan for the Purpose of 

Developing and Implementing Procedures Designed 

to Facilitate the Listing and Trading of 

Standardized Options Submitted Pursuant to 

Section 11A(a)(3)(B) of the Securities Exchange Act 

available at http://www.theocc.com/clearing/

industry-services/olpp.jsp (providing for the most 

current OLPP). See also Securities and Exchange 

Release No. 44521 (July 6, 2001), 66 FR 36809 (July 

13, 2001) (order approving the OLPP). 

14See Notice, supra note 3, at 63009. See also 

Securities and Exchange Release No. 61978 (April 

23, 2010), 75 FR 22886 (April 30, 2010) (in which 

the Exchange adopted select provisions of the OLPP 

into Exchange Rule 903A). 

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–BYX–2015–03. 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 the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BYX– 

2015–03 and should be submitted on or 

before February 13, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.36

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01064 Filed 1–22–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74087; File No. SR– 

NYSEMKT–2014–86] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To Remove the 

Exchange’s Quote Mitigation Plan as 

Provided by Exchange Rule 970.1NY 

January 16, 2015. 

I. Introduction 

On October 2, 2014, NYSE MKT LLC, 

(‘‘NYSE MKT’’ or ‘‘Exchange’’) 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 remove the Exchange’s quote 

mitigation plan as provided by NYSE 

MKT Rule 970.1NY. The proposed rule 

change was published for comment in 

the Federal Register on October 21, 

2014.3 On December 2, 2014, pursuant 

to Section 19(b)(2) of the Act,4 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, disapprove the proposed 

rule change, or institute proceedings to 

determine whether to disapprove the 

proposed rule change.5 On January 8, 

2015, the Exchange submitted a letter in 

further support of the proposal.6 The 

Commission received no comments on 

the proposal. This order institutes 

proceedings under Section 19(b)(2)(B) of 

the Act 7 to determine whether to 

approve or disapprove the proposal. 

II. Description of the Proposal 

In 2007, the Exchange adopted a 

quote mitigation plan in connection 

with the Penny Pilot Program.8

According to the Exchange, the quote 

mitigation plan was designed to reduce 

the number of quotation messages sent 

by the Exchange to the Options Price 

Reporting Authority (‘‘OPRA’’) by only 

submitting quote messages for ‘‘active’’ 

series.9 The Exchange defines active 

series under the quote mitigation plan 

in Exchange Rule 970.1NY as: (i) Series 

that have traded on any options 

exchange in the previous 14 calendar 

days; or (ii) series that are solely listed 

on the Exchange; or (iii) series that have 

been trading ten days or less, or; (iv) 

series for which the Exchange has 

received an order.10 In addition, under 

the Exchange’s quote mitigation plan, 

the Exchange may define a series as 

active on an intraday basis if: (i) The 

series trades at any options exchange; 

(ii) the Exchange receives an order in 

the series; or (iii) the Exchange receives 

a request for quote from a customer in 

that series.11

The Exchange proposes to remove its 

quote mitigation plan from its rules by 

deleting Exchange Rule 970.1NY.12 The 

Exchange believes that its quote 

mitigation plan is no longer necessary 

primarily for three reasons. First, the 

Exchange states that its incorporation of 

select provisions of the Options Listing 

Procedures Plan (‘‘OLPP’’) 13 in 

Exchange Rule 903A serves to reduce 

the potential for excess quoting because 

the OLPP limits the number of options 

series eligible to be listed, which, 

according to the Exchange, reduces the 

number of options series a market maker 

would be obligated to quote.14 Second, 

the Exchange states its view that 

Exchange Rule 925.1NY Commentary 

.01, which removes certain options 

series from market makers’ continuous 

quoting obligations, reduces the number 

of quote message traffic that the 


tkelley on DSK3SPTVN1PROD with NOTICES
3698 Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 

15Commentary .01 to Exchange Rule 925.1NY 

provides that Exchange market makers continuous 

quoting obligations do not apply ‘‘to adjusted 

option series, and series with a time to expiration 

of nine months or greater, for options on equities 

and Exchange Traded Fund Shares, and series with 

a time to expiration of twelve months or greater for 

Index options.’’ See also Notice, supra note 3, at 

63010. 

16See id. The Exchange states its view that 

limiting the number of options series listed on the 

Exchange is preferable to suppressing the quotes of 

inactive options series, as required under current 

Exchange Rule 970.1NY, because all quotes sent by 

Exchange market makers are actionable even if not 

displayed. See id. 

17See Notice, supra note 3, at 63010. 

18See id. 

19See id. 

20See id. at n.13 (citing to Commentary .09(b) to 

Exchange Rule 915). 

21See id. at n.14 (citing to NYSE Amex Options 

Fee Schedule, available at, https://www.theice.com/ 

publicdocs/nyse/markets/amex-options/NYSE_

Amex_Options_Fee_Schedule.pdf). 

22See Notice, supra note 3, at 63010. 

23 15 U.S.C. 78s(b)(2)(B). 

24 Id. Section 19(b)(2)(B) of the Exchange Act also 

provides that proceedings to determine whether to 

disapprove a proposed rule change must be 

concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding. 

See id. 

25See NYSE MKT Letter, supra note 6. 

26 15 U.S.C. 78f(b)(5). 

27Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Pub. L. 94–29 

(June 4, 1975), grants the Commission flexibility to 

determine what type of proceeding—either oral or 

notice and opportunity for written comments—is 

appropriate for consideration of a particular 

proposal by a self-regulatory organization. See 

Securities Act Amendments of 1975, Senate Comm. 

on Banking, Housing & Urban Affairs, S. Rep. No. 

75, 94th Cong., 1st Sess. 30 (1975). 

28 Id. 

29See supra note 8 and accompanying text. 

30See Securities and Exchange Release No. 60711 

(September 23, 2009), 74 FR 49419, 49422 

(September 28, 2009) (Order Granting Partial 

Accelerated Approval of a Proposed Rule Change, 

as Modified by Amendment Nos. 1 and 3 thereto, 

Amending NYSE Arca Rule 6.72 and Expanding the 

Penny Pilot Program). 

31See id. The Commission stated: ‘‘While the 

Commission anticipates that NYSE Arca’s proposed 

expansion of the Pilot Program will contribute to 

further increases in quotation message traffic, the 

Commission believes that NYSE Arca’s proposal is 

sufficiently limited such that it is unlikely to 

increase quotation message traffic beyond the 

capacity of market participants’ systems and disrupt 

the timely receipt of quote information. NYSE Arca 

has proposed to roll out the additional 300 classes 

over time, in groups of 75 classes each quarter 

beginning on October 26, 2009. The Commission 

Exchange sends to OPRA.15 The 

Exchange states that reliance on the 

OLPP, via Exchange Rule 930A, and the 

refined market maker quoting 

obligations, pursuant to Commentary 

.01 to Exchange Rule 925.1NY, is 

sufficient as a quote mitigation plan.16

Third, the Exchange states that both its 

systems capacity and OPRA’s systems 

capacity are more than sufficient to 

accommodate any additional increase in 

quote traffic that might be sent to OPRA 

as a result of the deletion of the quote 

mitigation strategy.17 The Exchange 

represents that it continually assesses its 

capacity needs and ensures that the 

capacity that it requests from OPRA is 

sufficient and compliant with the 

requirements established in the OPRA 

Capacity Guidelines.18

The Exchange represents that it has in 

place certain measures that the 

Exchange believes serve as additional 

safeguards against excessive quoting.19

According to the Exchange, these 

safeguards include monitoring and 

alerting market makers disseminating an 

unusual number of quotes, a business 

plan designed to ensure that new 

listings are actively traded,20 and 

excessive bandwidth utilization fees 

designed to encourage the efficient 

quoting.21

The Exchange proposes to announce 

the implementation date of the 

proposed rule change by Trader Update 

and publish such announcement no 

later than 60 days following the 

effective date of this proposal.22

III. Proceedings To Determine Whether 

To Approve or Disapprove SR– 

NYSEMKT–2014–86 and Grounds for 

Disapproval Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 23 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of such proceedings is 

appropriate at this time in view of the 

legal and policy issues raised by the 

proposed rule change, as discussed 

below. Institution of proceedings does 

not indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, as 

described in greater detail below, the 

Commission seeks and encourages 

interested persons to provide additional 

comment on the proposed rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,24 the Commission is providing 

notice of the grounds for disapproval 

under consideration. The Commission is 

instituting proceedings to allow for 

additional analysis of, and input from 

commenters with respect to the 

consistency of the proposed rule 

change, as supplemented by the NYSE 

MKT Letter,25 with Section 6(b)(5) of the 

Act, which require that the rules of a 

national securities exchange be 

designed, among other things, to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, 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.26

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data, and 

arguments with respect to the concerns 

identified above, as well as any other 

concerns they may have with the 

proposed rule change. Although there 

do not appear to be any issues relevant 

to approval or disapproval which would 

be facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.27 Interested persons are 

invited to submit written data, views, 

and arguments regarding whether the 

proposal should be approved or 

disapproved by February 13, 2015. Any 

person who wishes to file a rebuttal to 

any other person’s submission must file 

that rebuttal by February 27, 2015. 

The Commission invites the written 

views of interested persons concerning 

whether the proposal is consistent with 

Section 6(b)(5) 28 or any other provision 

of the Act, or the rules and regulations 

thereunder. The Commission asks that 

commenters address the sufficiency and 

merit of the Exchange’s statements in 

support of the proposed rule change, in 

addition to any other comments they 

may wish to submit about the proposed 

rule change. In particular, the 

Commission seeks comment on the 

following: 

1. As described above, the Exchange 

adopted its quote mitigation plan as 

provided in Exchange Rule 970.1NY in 

connection with its adoption of the 

Penny Pilot Program, which permits 

quoting of certain options series in 

certain increments.29 The Commission 

has previously noted that the Penny 

Pilot Program has contributed to an 

increase in quotation message traffic 

from the options markets.30 In 

approving the extension and expansion 

of the Penny Pilot Program in 2009 by 

the Exchange’s affiliated exchange, 

NYSE Arca, Inc., the Commission relied, 

in part, on the NYSE Arca’s 

representation that it would continue to 

use quote mitigation strategies that 

would continue to mitigate quotation 

traffic sent to OPRA.31


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 15 / Friday, January 23, 2015 / Notices 3699 

further notes that a June 2, 2009 sustained message 

traffic peak of 852,350 messages per second 

reported by OPRA is still well below OPRA’s 

current messages per second capacity limit of 

2,050,000. Moreover, NYSE Arca has adopted and 

will continue to utilize quote mitigation strategies 

that should continue to mitigate the expected 

increase in quotation traffic.’’ Id. The Exchange 

extended and expanded its participation the Penny 

Pilot Program and made other changes to its Penny 

Pilot Program consistent with the changes proposed 

by its affiliate exchange, NYSE Arca, Inc. See 

Securities and Exchange Release No. 61106 

(December 3, 2009), 74 FR 65193 (December 9, 

2009) (citing Securities and Exchange Release No. 

60711 (September 23, 2009), 74 FR 49419 

(September 28, 2009)). 

32See supra notes 13–18 and accompanying text. 33 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–73731 

(Dec. 3, 2014), 79 FR 73126 (Dec. 9, 2014) (SR– 

ICEEU–2014–20). 

As noted above, the Exchange 

believes that its quote mitigation 

strategy is no longer necessary because: 

(1) The Exchange has incorporated 

select provisions of the OLPP in 

Exchange Rule 930A, which the 

Exchange believes limits the number of 

series eligible to be listed; (2) current 

Exchange Rule 925.1NY Commentary 

.01 removes certain options series from 

market makers’ continuous quoting 

obligations, which the Exchange 

believes reduces the number of quote 

messages that the Exchange sends to 

OPRA; and (3) both the Exchange’s 

systems capacity and OPRA’s systems 

capacity are more than sufficient to 

accommodate any additional increase in 

quote traffic that might be sent to OPRA 

as a result of the deletion of the quote 

mitigation strategy.32 Do commenters 

believe that reliance on the Exchange’s 

current rules and the existing systems 

capacity of the Exchange and OPRA are 

sufficient or insufficient means to 

mitigate quote message traffic from the 

Exchange to OPRA? Please explain. 

2. What are commenters’ views on the 

impact, if any, that might result from the 

Exchange’s proposal to remove its 

current quote mitigation plan as 

provided in Exchange Rule 970.1NY? 

For example, what are commenters’ 

views on the impact the Exchange’s 

proposal would have, if any, on OPRA’s 

system capacity? Please explain. Or, 

what are commenters’ views on the 

impact the Exchange’s proposal would 

have on market participants using 

OPRA and/or the Exchange’s quotation 

message feeds? Please explain. 

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– 

NYSEMKT–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–NYSEMKT–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 

filings 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– 

NYSEMKT–2014–86 and should be 

submitted on or before February 13, 

2015. Rebuttal comments should be 

submitted by February 27, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01107 Filed 1–22–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74085; File No. SR–ICEEU– 

2014–20] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Order Granting 

Approval of Proposed Rule Change 

Relating to CDS Pricing Policy 

January 16, 2015. 

I. Introduction 

On November 24, 2014, ICE Clear 

Europe Limited (‘‘ICE Clear Europe’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–ICEEU–2014– 

20 pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder.2

The proposed rule change was 

published for comment in the Federal 

Register on December 9, 2014.3 The 

Commission received no comment 

letters regarding the proposed change. 

For the reasons discussed below, the 

Commission is granting approval of the 

proposed rule change. 

II. Description of the Proposed Rule 

Change 

ICE Clear Europe is proposing this 

change to revise the ICE Clear Europe 

CDS End-of-Day Price Discovery Policy 

(‘‘CDS Pricing Policy’’) to incorporate 

enhancements to its price discovery 

process. The revisions do not require 

any changes to ICE Clear Europe’s 

Clearing Rules or Procedures. 

According to ICE Clear Europe, it 

currently uses a ‘‘cross and lock’’ 

algorithm as part of its price discovery 

process for CDS Contracts. As described 

by ICE Clear Europe, under this 

algorithm, bids and offers derived from 

Clearing Member submissions are 

matched by sorting them from highest to 

lowest and lowest to highest levels, 

respectively. This sorting process pairs 

the Clearing Member submitting the 

highest bid price with the Clearing 

Member submitting the lowest offer 

price, the Clearing Member submitting 

the second highest bid price with the 

Clearing Member submitting the secondlowest offer price, and so on. The 

algorithm then identifies crossed and/or 

locked pairs (or ‘‘markets’’). Crossed 

markets are the Clearing Member pairs 

generated by the sorting process for 

which the bid price of one Clearing 

Member is above the offer price of the 

matched Clearing Member. Locked 


tkelley on DSK3SPTVN1PROD with NOTICES