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###### Securities and Exchange Commission

          - [Release No. 34-74308; File No. SR-NYSEArca-2015-07]

                    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),[1]                                          and Rule 19b-4 thereunder,[2]                                          notice is hereby given that on February 18, 2015, NYSE Arca, Inc. (the “Exchange” or “NYSE Arca”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.                

## I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change

                    The Exchange proposes to extend the pilot period applicable to Rule 6.65A(c), which addresses how the Exchange treats Obvious and Catastrophic Errors during periods of extreme market volatility, until October 23, 2015. The pilot period is currently set to expire on February 20, 2015. 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 extend the pilot period applicable to Rule 6.65A(c), which addresses how the Exchange treats Obvious and Catastrophic Errors during periods of extreme market volatility, until October 23, 2015. The pilot period is currently set to expire on February 20, 2015.

                    In April 2013, in connection with the Plan to Address Extraordinary Market Volatility Pursuant to Rule 608 of Regulation NMS (the “Plan”),[3]                                          the Exchange adopted Rule 6.65A(c) to provide that options executions would not be adjusted or nullified if the execution occurs during periods of extreme market volatility.[4]                                          Specifically, Rule 6.65A(c) provides that, during the pilot period, electronic transactions in options that overlay an NMS Stock that occur during a Limit State or a Straddle State (as defined by the Plan) are not subject to review under Rule 6.87(a) for Obvious Errors or Rule 6.87(d) for Catastrophic Errors. Nothing in Rule 6.65A(c) prevents electronic transactions in options that overlay an NMS Stock that occur during a Limit State or a Straddle State from being reviewed on Exchange motion pursuant to 6.87(b)(3).                

                    The Plan has been amended several times since inception and was not implemented until February 24, 2014. The Participants to the Plan recently filed to extend the Plan's pilot period until October 23, 2015 (the “Eighth Amendment”).[5]                                          The purpose of this proposed extension is to provide time for the Participants to prepare a supplemental assessment and recommendation regarding the Plan and for the public to comment on such assessment for the purpose of determining whether there should be any modifications to the Plan.                

In order to align the pilot period for Rule 6.65A(c) with the proposed pilot period for the Plan, the Exchange similarly proposes to extend the pilot period until October 23, 2015. The Exchange believes the benefits afforded to market participants under Rule 6.65A(c) should continue on a pilot basis during the same period as the Plan pilot. The Exchange continues to believe that adding certainty to the execution of orders in Limit or Straddle States would encourage market participants to continue to provide liquidity to the Exchange, and thus, promote a fair and orderly market during those periods. Thus, the Exchange believes that the protections of current Rule 6.65A(c) should continue while the industry gains further experience operating the Plan. In addition, the Exchange believes that extending the pilot period for Rule 6.65A(c) would allow the Exchange to continue to collect and evaluate data, as well as to conduct further data analyses, related to this provision.

                    Specifically, in connection with the adoption of Rule 6.65A(c), the Exchange committed to review the operation of this provision and to analyze the impact of Limit and Straddle States accordingly.[6]                                          The Exchange agreed to and has been providing to the Commission and the public data for each Straddle State and Limit State in NMS Stocks underlying options traded on the Exchange beginning in April 2013, limited to those option classes that have at least one (1) trade on the Exchange during a Straddle State or Limit State.[7]                                          For each of those option classes affected, each data record contains the following information:                
    - Stock symbol, option symbol, time at the start of the Straddle or Limit       ( print page 10188)                          State, an indicator for whether it is a Straddle or Limit State.                
    - For activity on the Exchange:
    - executed volume, time-weighted quoted bid-ask spread, time-weighted average quoted depth at the bid, time-weighted average quoted depth at the offer;
    - high execution price, low execution price;
    - number of trades for which a request for review for error was received during Straddle and Limit States;
    - an indicator variable for whether those options outlined above have a price change exceeding 30% during the underlying stock's Limit or Straddle state compared to the last available option price as reported by OPRA before the start of the Limit or Straddle State (1 if observe 30% and 0 otherwise). Another indicator variable for whether the option price within five minutes of the underlying stock leaving the Limit or Straddle state (or halt if applicable) is 30% away from the price before the start of the Limit or Straddle state.

In addition, the Exchange has committed to provide to the Commission by May 29, 2015 assessments relating to the impact of the operation of the Obvious Error rules during Limit and Straddle States as follows: (1) Evaluate the statistical and economic impact of Limit and Straddle States on liquidity and market quality in the options markets; and (2) Assess whether the lack of Obvious Error rules in effect during the Straddle and Limit States are problematic. The Exchange notes that, to date, there have not been any requests for review of Obvious Error of options trades that occur during a Limit or Straddle State in the underlying security.

The Exchange believes that the extension of the pilot period of Rule 6.65A(c) would allow the Exchange to continue to observe the operation of the pilot and conduct its assessments relating to the impact of the operation of the Rule during Limit and Straddle States, which information will continue to be shared with the Commission and the public as set forth above.

#### 2. Statutory Basis

                    The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act [8]                                          in general, and furthers the objectives of Section 6(b)(5),[9]                                          in particular, in that it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of, a free and open market and a national market system and, in general, to protect investors and the public interest.                

Specifically, the proposal to extend the pilot program of Rule 6.65A(c) until October 23, 2015 would align that pilot program with the Pilot Period for the Plan, as proposed in the Eighth Amendment to the Plan. The Exchange believes that aligning the pilot periods would ensure that trading in options that overlay NMS Stocks continues to be appropriately modified to reflect market conditions that occur during a Limit State or a Straddle State in a manner that promotes just and equitable principles of trade and removes impediments to, and perfects the mechanism of, a free and open market and a national market system. The Exchange believes that the extension of Rule 6.65A(c) would help encourage market participants to continue to provide liquidity during extraordinary market volatility.

Moreover, the Exchange believes that extending the pilot period for Rule 6.65A(c) would remove impediments to, and perfect the mechanisms of, a free and open market because it would enable the Exchange to continue to continue to conduct its assessments relating to the impact of the operation of the Obvious Error rules during Limit and Straddle States as set forth above, which, in turn, provides the Exchange with more information from which to assess the impact of Rule 6.65A(c).

### B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed changes will not impose any burden on competition and will instead provide certainty regarding the treatment and execution of options orders, specifically the treatment of Obvious and Catastrophic Errors during periods of extraordinary volatility in the underlying NMS Stock, and will facilitate appropriate liquidity during a Limit State or Straddle State.

### 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 

                    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 for 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 [10]                                          and Rule 19b-4(f)(6)(iii) thereunder.[11] 

                    The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, as it will allow the obvious error pilot program to continue uninterrupted while the industry gains further experience operating under the Plan, and avoid any investor confusion that could result from a temporary interruption in the pilot program. For this reason, the Commission designates the proposed rule change to be operative upon filing.[12] 

At any time within 60 days of the filing of the 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 to determine whether the proposed rule should be approved or disapproved.

## 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                           ( print page 10189)      
    - Send an email to rule-comments@sec.gov.                      Please include File Number SR-NYSEArca-2015-07 on the subject line.                

### Paper Comments 

    - Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

                    All submissions should refer to File Number SR-NYSEArca-2015-07. 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-2015-07, and should be submitted on or before March 18, 2015.                

                        For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[13] 

Brent J. Fields,  

Secretary. 

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
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2.                             17 CFR 240.19b-4.                    
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3.                                                     *See*                         Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (Order Approving, on a Pilot Basis, the Plan). The Plan is designed to prevent trades in individual NMS Stocks from occurring outside of specified Price Bands, which are described in more detail in the Plan.                    
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4.                                                     *See*                         Securities and Exchange Act Release No. 69340 (April 8, 2013), 78 FR 22004 (April 12, 2013) (SR-NYSEArca-2013-10) (“Approval Order”).                    
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5.                                                     *See*                         Securities Exchange Act Release No. 74110 (January 21, 2015), 80 FR 4321 (January 27, 2015) (File No. 4-631) (notice of proposed Eighth Amendment to the Plan).                    
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6.                             Specifically, the Exchange committed to: “(1) Evaluate the options market quality during Limit States and Straddle States; (2) assess the character of incoming order flow and transactions during Limit States and Straddle States; and (3) review any complaints from members and their customers concerning executions during Limit States and Straddle States.”                         *See*                         Approval Order, 78 FR at 22008.                    
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7.                                                     *See*                         Securities Exchange Act Release No. 71869 (April 4, 2014), 79 FR 19689 (April 9, 2014) (SR-NYSEArca-2014-36).                    
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8.                             15 U.S.C. 78f(b).                    
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9.                             15 U.S.C. 78f(b)(5).                    
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10.                             15 U.S.C. 78s(b)(3)(A).                    
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11.                             17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission.                    
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12.                             For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation.                         *See*15 U.S.C. 78c(f).                    
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13.                                 17 CFR 200.30-3(a)(12).                        
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[FR Doc. 2015-03816 Filed 2-24-15; 8:45 am]

BILLING CODE 8011-01-P