20274 Federal Register / Vol. 80, No. 72 / Wednesday, April 15, 2015 / Notices 

10Similarly, as noted above, supra n. 4, the 

proposed fee is reasonable, equitable and not 

unfairly discriminatory because there is currently 

no LMM in IWM and, therefore, no LMM is 

impacted by this proposed fee change. 

11 15 U.S.C. 78f(b)(8). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(2). 

14 15 U.S.C. 78s(b)(2)(B). 

15 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

discriminate between customers, 

issuers, brokers or dealers. 

Overall, the Exchange believes that 

the proposed changes to IWM pricing 

for Manual transactions are reasonable, 

equitable and not unfairly 

discriminatory because the reduced 

rates are based on the executions in 

IWM transacted on the Exchange. In 

addition, the Exchange believes the 

proposed fees are reasonable, equitable 

and not unfairly discriminatory because 

the fees are designed to incentivize IWM 

Participants to conduct Manual trades 

in IWM and apply equally to all IWM 

Participants.10 The Exchange believes 

the proposed fee changes may result in 

an increase in volume and liquidity to 

the Exchange, which would provide 

more trading opportunities and tighter 

spreads, to the benefit of all market 

participants even non-IWM Participants, 

all of which perfects the mechanism for 

a free and open market and national 

market system. 

For these reasons, the Exchange 

believes that the proposal is consistent 

with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,11 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 Exchange believes the proposed 

fees associated with IWM are procompetitive as they may attract more 

volume and liquidity to the Exchange 

through the proposed reduced rates, 

which would benefit all Exchange 

participants through increased 

opportunities to trade as well as 

enhancing price discovery. 

The Exchange notes that it operates in 

a highly competitive market in which 

market participants can readily favor 

competing venues. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees and credits to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed 

rule change reflects this competitive 

environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 12 of the Act and 

subparagraph (f)(2) of Rule 19b–4 13

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 14 of the Act to 

determine whether the proposed rule 

change 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 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2015–28 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. 

All submissions should refer to File 

Number SR–NYSEArca–2015–28. 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–2015–28 and should be 

submitted on or before May 6, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–08548 Filed 4–14–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74695; File No. SR– 

NYSEMKT–2015–28] 

Self-Regulatory Organizations; NYSE 

MKT, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the Pilot 

Period Applicable to the Customer 

Best Execution Auction per Rule 971.1 

NY, Until July 17, 2015 

April 9, 2015. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that on April 7, 

2015, NYSE MKT LLC (the ‘‘Exchange’’ 

or ‘‘NYSE MKT’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 72 / Wednesday, April 15, 2015 / Notices 20275 

4The Exchange notes that the proposed extension 

would align the expiration of the pilot period with 

that of other competing options exchanges that offer 

electronic price improvement auctions similar to 

the CUBE. See, e.g., ISE Rule 723 Supplementary 

Material .03 (pilot period for price improvement 

mechanism extended until Friday, July 17, 2015); 

PHLX Rule 1080(n)(vii); (pilot period for price 

improvement mechanism extended until Saturday, 

July 18, 2015); CBOE Rule 6.74A Interpretation and 

Policies .03 (same); BOX IM–7150–1 (same). 

Because July 18, 2015 is a Saturday and the 

Exchange is not open, the Exchange proposes to 

extend the pilot until Friday, July 17, 2015. 

5See generally Rule 971.1NY (Electronic Cross 

Transactions). 

6See Securities Exchange Act Release No. 72025 

(April 25, 2014), 79 FR 24779 (May 1, 2014) 

(NYSEMKT–2014–17) (the ‘‘CUBE Approval 

Order’’). 

7 In addition, CUBE provides for the automatic 

execution, under certain conditions, of a crossing 

transaction where there is a public customer order 

in the same options series on each side. 

8Subject to specified exceptions, a CUBE Order 

to buy (sell) may execute at prices equal to or 

between the initiating price as the upper (lower) 

bound and the National Best Bid (‘‘NBB’’) (National 

Best Offer (‘‘NBO’’)) as the lower (upper) bound. 

See Rule 971.1NY(b). 

9See Rule 971.1NY(b)(1)(B). Rule 971.1NY(b)(8), 

also subject to the pilot period, provides that the 

minimum size for a CUBE Auction is one contract. 

See Rule (b)(8). 

10See Rule 971.1NY(b)(1)(B). 

11See CUBE Approval Order, supra, n. 6. 

12See also Commentary .01 to Rule 971.1NY 

(establishing one-year pilot period for Rules 

971.1NY(b)(1)(B) and 971.1NY(b)(8)). 

13See CUBE Approval Order, supra, n. 6 at 79 FR 

24779, at 24785–86, fn. 94–95. See also 

Commentary .01 to Rule 971.1NY. 

14 Id. 

15See proposed Commentary .01 to Rule 

971.1NY. 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(5). 

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 Substance of 

the Proposed Rule Change 

The Exchange proposes to extend the 

pilot period applicable to the Customer 

Best Execution Auction (‘‘CUBE’’), per 

Rule 971.1NY, until July 17, 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 the 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to extend the 

pilot period applicable to certain 

aspects of the Customer Best 

Execution—or CUBE—Auction, which 

is currently set to expire on April 24, 

2015, until July 17, 2015.4

Background 

Rule 971.1NY sets forth an electronic 

crossing mechanism for single-leg 

orders with a price improvement 

auction on the Exchange, referred to as 

the CUBE Auction.5 The CUBE Auction, 

which was approved in April 2014, is 

designed to provide price improvement 

for paired orders of any size.6 Two 

aspects of the CUBE were approved for 

a one-year pilot period—Rule 

971.1NY(b)(1)(B), which establishes the 

permissible range of executions for 

CUBE Auctions for fewer than 50 

contracts; and Rule 971.1NY(b)(8), 

which establishes that the minimum 

size for a CUBE Auction is one contract 

(together, the ‘‘CUBE Pilot’’). 

An ATP Holder may initiate a CUBE 

Auction by electronically submitting for 

execution a limit order it represents as 

agent on behalf of a public customer, 

broker dealer, or any other entity 

(‘‘CUBE Order’’) against principal 

interest or against any other order it 

represents as agent, provided the 

initiating ATP Holder complies with 

Rule 971.1NY.7 Rule 971.1NY(b)(1) sets 

forth the permissible range of 

executions for a CUBE Order.8 Pursuant 

to the CUBE Pilot, a CUBE Order for 

fewer than 50 contracts is subject to 

tighter ranges of execution than larger 

CUBE Orders to maximize price 

improvement.9 Specifically, if the CUBE 

Order is for fewer than 50 contracts, the 

range of permissible execution will be 

equal to or better than the National Best 

Bid/Offer (‘‘NBBO’’), provided that such 

price must be at least one cent better 

than any displayed interest in the 

Exchange’s Consolidated Book.10

The CUBE Pilot was initially 

approved for a one-year pilot.11

Pursuant to Commentary .01 to Rule 

971.1NY, the CUBE Pilot would, if not 

amended, end on April 24, 2015.12 In 

connection with the CUBE Pilot, the 

Exchange agreed to submit certain data 

to provide supporting evidence that, 

among other things, there is meaningful 

competition for all size orders and that 

there is an active and liquid market 

functioning on the Exchange outside of 

the CUBE Auction.13

Proposal To Extend the Operation of the 

CUBE Pilot 

The Exchange implemented the CUBE 

Auction to provide an electronic 

crossing mechanism for single-leg 

orders with a price improvement 

auction. The CUBE Pilot was designed 

to create tighter markets and ensure that 

each order receives the best possible 

price. The Exchange believes that the 

CUBE Pilot attracts order flow and 

promotes competition and price 

improvement opportunities for CUBE 

Orders of fewer than 50 contracts. The 

Exchange believes that extending the 

pilot period is appropriate because it 

will allow the Exchange and the 

Commission additional time to analyze 

data regarding the CUBE Pilot that the 

Exchange has committed to provide.14

As such, the Exchange believes that it is 

appropriate to extend the current 

operation of the Pilot. Through this 

filing, the Exchange seeks to amend 

Commentary .01 to Rule 971.1NY and 

extend the current pilot period until 

July 17, 2015.15 The Exchange notes that 

it would retain the text of Rules 

971.1NY(b)(1)(B) and 971.1NY(b)(8). In 

further support of this proposed rule 

change, the Exchange would continue to 

submit to the Commission detailed data 

from, and analysis of, the CUBE Pilot. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 16 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 17

in particular, in that it is designed 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. 

The Exchange believes that extending 

the pilot period is consistent with these 

principles because the CUBE Pilot is 

reasonably designed to create tighter 

markets and ensure that each order 

receives the best possible price, which 

benefits investors by increasing 

competition thereby maximizing 

opportunities for price improvement. 

The proposed extension would allow 


tkelley on DSK3SPTVN1PROD with NOTICES
20276 Federal Register / Vol. 80, No. 72 / Wednesday, April 15, 2015 / Notices 

18 15 U.S.C. 78s(b)(3)(A)(iii). Rule 19b–4(f)(6) 

requires a self-regulatory organization to give the 

Commission written notice of its intent to file 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. The Exchange has satisfied this 

requirement. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6). 

21 17 CFR 240.19b–4(f)(6)(iii). 

22For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

23 15 U.S.C. 78s(b)(2)(B). 24 17 CFR 200.30–3(a)(12). 

the CUBE Pilot to continue 

uninterrupted, thereby avoiding any 

potential investor confusion that could 

result from a temporary interruption in 

the CUBE Pilot. Because the CUBE Pilot 

is applicable to all CUBE Orders for 

fewer than 50 contracts, and to the 

requirement that the minimum size of 

the CUBE Auction is one contract, the 

proposal to extend the pilot merely acts 

to maintain status quo on the Exchange, 

which 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 

extension of the pilot period will allow 

the Commission and the Exchange to 

continue to monitor the CUBE Pilot to 

ascertain whether there is meaningful 

competition for all size orders and 

whether there is an active and liquid 

market functioning on the Exchange 

outside of the CUBE Auction. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change simply extends an 

established pilot program for an 

additional period and would allow for 

further analysis of the CUBE Pilot. In 

addition, the proposed extension would 

allow the CUBE Pilot to continue 

uninterrupted, thereby avoiding any 

potential investor confusion that could 

result from a temporary interruption in 

the CUBE Pilot. Thus, the proposal 

would also serve to promote regulatory 

clarity and consistency, thereby 

reducing burdens on the marketplace 

and facilitating investor protection. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 18 and Rule 

19b–4(f)(6) thereunder.19 Because the 

foregoing 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, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 20 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),21 the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. 

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 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because such waiver will allow the pilot 

program to continue without 

interruption. Therefore, the Commission 

designates the proposal operative upon 

filing.22

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 

under Section 19(b)(2)(B) 23 of the Act to 

determine whether the proposed rule 

change 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 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEMKT–2015–28 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–NYSEMKT–2015–28. 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 

offices 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–2015–28, and should be 

submitted on or before May 6, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–08549 Filed 4–14–15; 8:45 am] 

BILLING CODE 8011–01–P 


tkelley on DSK3SPTVN1PROD with NOTICES