3038 Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices 

9 17 CFR 240.19b-4(f)(6). In addition, 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, along with a brief 

description and 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. The Exchange 

has satisfied this requirement. 

10 17 CFR 240.19b–4(f)(6)(iii). 

11For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 12 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. 

subparagraph (f)(6) of Rule 19b–4 

thereunder.9

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of its filing. However, Rule 19b– 

4(f)(6)(iii) 10 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposed rule change 

will become operative on filing. The 

Exchange stated that the proposed rule 

change promotes the protection of 

investors and the public interest by 

improving the organization and 

readability of the Exchange’s rules. 

Waiver of the operative delay would 

allow the Exchange, without delay, to 

continue to amend other sections of 

Rule 1080 for improved readability, 

therefore, the Commission believes that 

waiver of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the operative delay and 

designates the proposed rule change 

operative upon filing.11

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 

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– 

Phlx–2018–06 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–Phlx–2018–06. 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–Phlx–2018–06, and should 

be submitted on or before February 12, 

2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00976 Filed 1–19–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82504; File No. SR– 

NYSEArca–2018–01] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 7.31–E 

Relating to Mid-Point Liquidity Orders 

and the Minimum Trade Size Modifier 

and Rule 7.36–E To Add a Definition of 

‘‘Aggressing Order’’ 

January 16, 2018. 

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 January 

3, 2018, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 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 amend 

Rule 7.31–E relating to Mid-Point 

Liquidity Orders and the Minimum 

Trade Size modifier and Rule 7.36–E to 

add a definition of ‘‘Aggressing Order.’’ 

The proposed rule change is available 

on the Exchange’s website 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. 


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4See Rule 7.31–E(b)(2)(A) (‘‘A Limit IOC Order to 

buy (sell) may be designated with a minimum trade 

size (‘‘MTS’’), which will trade against sell (buy) 

orders in the NYSE Arca Book that in the aggregate, 

meets its MTS. On entry, a Limit IOC Order with 

an MTS must have a minimum of one round lot and 

will be rejected on arrival if the MTS is larger than 

the size of the Limit IOC Order. A Limit IOC Order 

with an MTS that cannot be immediately traded at 

its minimum size will be cancelled in its entirety.’’) 

5See Rule 7.31–E(d)(3)(D) (‘‘An MPL Order may 

be designated with an MTS of a minimum of one 

round lot and will be rejected on arrival if the MTS 

is larger than the size of the MPL Order. On arrival, 

an MPL Order to buy (sell) with an MTS will trade 

with sell (buy) orders in the NYSE Arca Book that 

in the aggregate, meets its MTS. If the sell (buy) 

orders do not meet the MTS, the MPL Order to buy 

(sell) will not trade on arrival and will be ranked 

in the NYSE Arca Book. Once resting, an MPL 

Order to buy (sell) with an MTS will trade with an 

order to sell (buy) that meets the MTS and is priced 

at or below (above) the midpoint of the PBBO. If 

an order does not meet an MPL Order’s MTS, the 

order will not trade with and may trade through 

such MPL Order. If an MPL Order with an MTS is 

traded in part or reduced in size and the remaining 

quantity of the order is less than the MTS, the MPL 

Order will be cancelled.’’) 

6See Rule 7.31–E(d)(4)(C) (‘‘A Tracking Order 

may be designated with an MTS of one round lot 

or more. If an incoming order cannot meet the MTS, 

a Tracking Order with a later working time will 

trade ahead of the Tracking Order designated with 

an MTS with an earlier working time. If a Tracking 

Order with an MTS is traded in part or reduced in 

size and the remaining quantity is less than the 

MTS, the Tracking Order will be cancelled.’’) 

7Tracking Orders, including Tracking Orders 

with an MTS modifier, are passive orders that do 

not trade on arrival. See Rule 7.31–E(d)(4)(A). 

8The term ‘‘marketable’’ is defined in Rule 1.1(y) 

to mean for a Limit Order, an order than [sic] can 

be immediately executed or routed. 9See, e.g., Rule 7.31–E(d)(3)(B). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Mid-Point Liquidity (‘‘MPL’’) Orders 

and the Minimum Trade Size (‘‘MTS’’) 

modifier and Rule 7.36–E (Order 

Ranking and Display) to add a definition 

of ‘‘Aggressing Order.’’ [sic] For MPL 

Orders, the Exchange proposes to 

amend the price at which a marketable 

MPL Order would trade when there are 

resting orders priced better than the 

midpoint. The Exchange further 

proposes to amend functionality related 

to MPL–ALO Orders to describe how 

orders would trade if an MPL–ALO 

Order locks contra-side same-priced 

interest on the NYSE Arca Book. For 

MTS, the Exchange proposes to move all 

discussion relating to the MTS modifier 

to new sub-paragraph (i)(3) of Rule 

7.31–E and in so doing, amend how 

resting orders with an MTS modifier 

would trade in specified circumstances. 

Background 

As provided for in current Rule 7.31– 

E(d)(3)(C), on arrival, an MPL Order to 

buy (sell) that is eligible to trade will 

trade with resting orders to sell (buy) 

with a working price at or below (above) 

the midpoint of the PBBO (i.e., priced 

better than the midpoint of the PBBO). 

The rule further provides that resting 

MPL Orders to buy (sell) will trade at 

the midpoint of the PBBO against all 

incoming orders to sell (buy) priced at 

or below (above) the midpoint of the 

PBBO (i.e., priced better than the 

midpoint of the PBBO). 

Current Rule 7.31–E(d)(3)(F) provides 

that an MPL Order may be designated 

with an ALO Modifier (an ‘‘MPL–ALO 

Order’’) and that on arrival, an MPL– 

ALO Order to buy (sell) will trade with 

resting orders to sell (buy) with a 

working price below (above) the 

midpoint of the PBBO, but will not 

trade with resting orders to sell (buy) 

priced at the midpoint of the PBBO. The 

rule further provides that a resting 

MPL–ALO Order to buy (sell) will trade 

with an arriving order to sell (buy) that 

is eligible to trade at the midpoint of the 

PBBO. 

The MTS modifier is currently 

available for Limit IOC Orders,4 MPL 

Orders,5 and Tracking Orders.6 As such, 

the MTS modifier is currently available 

only for orders that are not displayed 

and do not route. On arrival, both Limit 

IOC Orders and MPL Orders with an 

MTS modifier will trade against contraside orders in the NYSE Arca Book that 

in the aggregate, meet the MTS.7 Once 

resting, MPL Orders and Tracking 

Orders with an MTS modifier function 

similarly: If a contra-side order does not 

meet the MTS, the incoming order will 

not trade with and may trade through 

the resting order with the MTS modifier. 

In addition, both MPL Orders and 

Tracking Orders with an MTS modifier 

will be cancelled if such orders are 

traded in part or reduced in size and the 

remaining quantity is less than the MTS. 

Proposed Definition of ‘‘Aggressing 

Order’’ 

The Exchange proposes to amend 

Rule 7.36–E to add a definition that 

would be used for purposes of Rule 

7–E. Proposed Rule 7.36–E(a)(5) would 

define the term ‘‘Aggressing Order’’ to 

mean a buy (sell) order that is or 

becomes marketable against sell (buy) 

interest on the NYSE Arca Book.8 This 

term would therefore refer to orders that 

are marketable against other orders on 

the NYSE Arca Book, such as incoming 

orders and orders that have returned 

unexecuted after routing. 

This term would also be applicable to 

resting orders that become marketable 

due to one or more events. For the most 

part, resting orders will have already 

traded with contra-side orders against 

which they are marketable. However, 

there are circumstances when a resting 

order may become marketable, such as 

orders that become eligible to trade 

when a PBBO unlocks or uncrosses (e.g., 

MPL and Pegged Orders) or orders that 

have a trading restriction at specified 

prices (e.g., as discussed in greater 

detail below, MPL–ALO Orders or 

orders with an MTS Modifier). To 

maximize the potential for orders to 

trade, the Exchange continually 

evaluates whether resting orders may 

become marketable. Events that could 

trigger a resting order to become 

marketable include updates to the 

working price of such order, updates to 

the PBBO or NBBO, changes to other 

orders on the NYSE Arca Book, or 

processing of inbound messages (e.g., an 

update to Price Bands under the 

Regulation NMS Plan to Address 

Extraordinary Market Volatility). To 

address such circumstances, the 

Exchange proposes to include in 

proposed Rule 7.36–E(a)(5) that a resting 

order may become an Aggressing Order 

if its working price changes, if the PBBO 

or NBBO is updated, because of changes 

to other orders on the NYSE Arca Book, 

or when processing inbound messages. 

The order that becomes the 

Aggressing Order is the liquidity-taking 

order. Generally, if resting orders on 

both sides are determined to be an 

Aggressing Order, e.g., a locked PBBO 

becomes unlocked and as a result, MPL 

Orders are repriced, the later-arriving 

order will be the liquidity-taking order.9

However, if the evaluation results in 

only one side becoming an Aggressing 

Order, e.g., an order with an MTS 

Modifier becomes eligible to trade and 

the contra-side order(s) have no working 

price changes, the order with the MTS 

Modifier would become the liquiditytaking Aggressing Order. As described 

below, the Exchange proposes to use the 

term ‘‘Aggressing Order’’ in the rule text 

relating to the MTS Modifier and the 

MPL–ALO Order. Because an 

Aggressing Order becomes a liquidity 

taker, such term could be applicable to 

other circumstances. For example, an 

order with a Non-Display Remove 

Modifier that trades as a liquidity taker 

would also be considered an Aggressing 

Order. However, at this time, the 

Exchange does not propose to amend its 

rules to use the term ‘‘Aggressing 

Order’’ because the rule already 

specifies which order is the liquidity 

taker. 


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10A resting MPL–ALO Order that becomes an 

Aggressing Order would trade consistent with 

proposed Rule 7.31–E(d)(3)(E)(i) and therefore 

would trade with contra-side orders priced better 

than the midpoint, but would not trade at the 

midpoint unless such order had a Non-Display 

Remove Modifier. 

11A displayed odd-lot order that is not included 

in the calculation of the PBBO could be at the same 

price as an MPL Order. 

12The Exchange proposes to delete references to 

MTS in Rules 7.31–E(b)(2)(A), 7.31–E(b)(2)(B), 

7.31–E(d)(3)(D), 7.31–E(d)(4)(C), 7.31–E(e)(3)(B), 

and 7.46–E(f)(1)(A). As noted above, because 

current Rule 7.31–E(d)(3)(D) would be deleted in its 

entirety, the remaining sub-paragraphs of Rule 

7.31–E(d)(3) would be renumbered accordingly. In 

addition, current Rule 7.31–E(d)(4)(C) would be 

deleted in its entirety. 

Proposed Amendments Relating to MPL 

and MPL–ALO Orders 

The Exchange proposes to amend the 

first sentence of current Rule 7.31– 

E(d)(3)(C) to make this text applicable to 

any marketable MPL Order, and not just 

an arriving MPL Order. To effect this 

change, the Exchange proposes to use 

the term ‘‘Aggressing Order’’ and 

replace the phrase ‘‘[o]n arrival, an MPL 

Order to buy (sell) that is eligible to 

trade’’ with the phrase, ‘‘[a]n Aggressing 

MPL Order to buy (sell).’’ 

The Exchange also proposes to amend 

the first sentence of current Rule 7.31– 

E(d)(3)(C) to describe at what price an 

Aggressing MPL Order would trade with 

contra-side resting orders that are priced 

better than the midpoint. The rule 

currently provides that an arriving MPL 

Order to buy (sell) would trade with 

resting orders to sell (buy) with a 

working price at or below (above) the 

midpoint of the PBBO. The Exchange 

proposes to specify that when an 

Aggressing MPL Order trades with 

resting orders priced better than the 

midpoint, it will trade at the working 

price of the resting orders, which is 

current functionality. For example, if 

the PBB is 10.10 and the midpoint is 

10.13, and there are non-displayed sell 

orders of 100 shares with working prices 

of 10.11 and 10.12, an Aggressing MPL 

Order to buy with a limit of 10.13 for 

200 shares would trade with such nondisplayed sell orders at 10.11 and 10.12, 

respectively. The Exchange believes that 

this proposed amendment would 

promote transparency in Exchange rules 

regarding at what price an Aggressing 

MPL Order would trade. 

By using the term ‘‘Aggressing 

Order,’’ this rule would be applicable to 

a resting MPL Order that becomes 

marketable, such as after a PBBO 

unlocks or uncrosses. In the above 

example, if the MPL Order to buy is 

ineligible to trade because of a crossed 

PBBO, and while the PBBO is crossed, 

the Exchange receives the two nondisplayed sell orders, when the PBBO 

uncrosses and the new midpoint is 

10.13, the resting MPL Order would 

become an Aggressing Order and would 

trade with the non-displayed sell orders 

at 10.11 and 10.12, respectively. 

The Exchange also proposes to amend 

the second sentence of Rule 7.31– 

E(d)(3)(C) to replace the term ‘‘incoming 

orders’’ with the term ‘‘Aggressing 

Orders.’’ This proposed rule change 

would provide greater specificity that 

any contra-side order that is an 

Aggressing Order, as defined in 

proposed Rule 7.36–E(a)(5), would trade 

with a resting MPL Order at the 

midpoint of the PBBO. 

The Exchange also proposes to amend 

the rule governing MPL–ALO Orders to 

make similar changes. Currently, MPL– 

ALO Orders are described in Rule 7.31– 

E(d)(3)(F). Because of changes described 

below relating to MTS, as proposed, 

MPL–ALO Orders would be described 

in Rule 7.31–E(d)(3)(E). 

In amending proposed Rule 7.31– 

E(d)(3)(E), the Exchange proposes to 

break the current rule text into three 

sub-paragraphs. The first sentence of 

current Rule 7.31–E(d)(3)(F), which 

provides that an MPL Order may be 

designated with an ALO Modifier, 

would follow Rule 7.31–E(d)(3)(E). The 

current second sentence of Rule 7.31– 

E(d)(3)(F) would be set forth in 

proposed Rule 7.31–E(d)(3)(E)(i). The 

Exchange proposes to amend this rule in 

the same manner that it is proposing to 

amend the first sentence of Rule 7.31– 

E(d)(3)(C), described above. In addition, 

the Exchange proposes a nonsubstantive, clarifying amendment to 

add that an arriving MPL–ALO Order 

would trade with a contra-side samepriced order that has been designated 

with a Non-Display Remove Modifier, 

which is current functionality. 

Accordingly, proposed Rule 7.31– 

E(d)(3)(E)(i) would provide that an 

Aggressing MPL–ALO Order to buy (sell) 

will trade with resting orders to sell 

(buy) with a working price below 

(above) the midpoint of the PBBO at the 

working price of the resting orders, but 

will not trade with resting orders to sell 

(buy) priced at the midpoint of the 

PBBO unless such resting order is 

designated with a Non-Display Remove 

Modifier pursuant to paragraph (d)(3)(F) 

of this Rule (proposed new text 

italicized).10

Because an Aggressing MPL–ALO 

Order does not trade with resting 

contra-side orders priced at the 

midpoint of the PBBO (unless the 

resting order has the Non-Display 

Remove Modifier), the Exchange 

proposes to specify the circumstances of 

when an MPL–ALO Order would be 

eligible to trade if it locks contra-side 

orders, which would differ depending 

on whether the contra-side order is 

displayed.11 The first sentence of 

Proposed Rule 7.31–E(d)(3)(E)(ii) would 

provide that if an MPL–ALO Order to 

buy (sell) cannot trade with a samepriced resting order to sell (buy), a 

subsequently arriving order to sell (buy) 

eligible to trade at the midpoint would 

trade ahead of a resting order to sell 

(buy) that is not displayed at that price. 

Accordingly, if an MPL–ALO Order 

locks a non-displayed order, such 

resting MPL–ALO Order can trade at 

that price with a subsequent order. 

By contrast, the second sentence of 

proposed Rule 7.31–E(d)(3)(E)(ii) would 

provide that if such resting order to sell 

(buy) is displayed, the MPL–ALO Order 

to buy (sell) would not be eligible to 

trade at that price. Accordingly, if an 

MPL–ALO Order locks a displayed 

order, such resting MPL–ALO Order 

would not be eligible to trade at that 

price with any interest. The Exchange 

proposes to treat displayed orders 

locked by an MPL–ALO Order 

differently to avoid having nondisplayed orders trade ahead of a samepriced, same-side displayed order. 

Proposed Amendments Relating to MTS 

The Exchange proposes to consolidate 

all references to MTS modifiers in Rule 

7.31–E in proposed Rule 7.31–E(i)(3) as 

a new additional order instruction and 

modifier to be referred to as the 

‘‘Minimum Trade Size (‘MTS’) 

Modifier.’’ As proposed, Rule 7.31– 

E(i)(3) would provide that a Limit IOC 

Order, MPL Order, or Tracking Order 

may be designated with an MTS 

Modifier, which is existing 

functionality. Because this proposed 

rule would specify which orders would 

be eligible for the MTS Modifier, the 

Exchange proposes to delete existing 

rule text specifying which orders are 

and are not eligible for an MTS 

Modifier.12 Proposed Rule 7.31–E(i)(3) 

is based in part on NYSE American Rule 

7.31E(i)(3). 

Proposed Rule 7.31–E(i)(3)(A) would 

provide that an MTS must be a 

minimum of a round lot and that an 

order with an MTS Modifier would be 

rejected if the MTS is less than a round 

lot or if the MTS is larger than the size 

of the order. This proposed rule text is 

based on the next-to-last sentence of 

current Rule 7.31–E(b)(2)(A) and the 

first sentence of current Rule 7.31– 

E(d)(3)(D), and in part on the first 

sentence of current Rule 7.31–E(d)(4)(C), 

with non-substantive differences to use 

common terminology when applying 


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13Nasdaq also requires that its Minimum 

Quantity Order also have a size of at least a round 

lot. See Nasdaq Rule 4703(e). 

14Rule 7.36–E(c) provides that the Exchange 

ranks all non-marketable orders on the NYSE Arca 

Book according to price—time priority. 

15At this time, the only resting orders with an 

MTS on the Exchange subject to this requirement 

would be MPL Orders. In such case, a contra-side 

order that is displayed and between the PBBO 

would be an odd-lot sized order; a round-lot sized 

displayed order would be reflected in the PBBO. 

16Pursuant to Rule 7.31–E(d)(3)(C), an Aggressing 

Order will trade with a resting MPL Order at the 

midpoint of the PBBO. 

17See discussion infra regarding the second 

sentence to proposed Rule 7.36–E(a)(5). 

18A resting order with an MTS Modifier that 

becomes an Aggressing Order would trade 

consistent with proposed Rule 7.31–E(i)(3)(E) and 

therefore would trade with individual orders that 

each meet the MTS. 

this requirement to all of the order types 

eligible for an MTS Modifier.13

Proposed Rule 7.31–E(i)(3)(A) is based 

on NYSE American Rule 7.31E(i)(3)(A) 

without any differences. 

Proposed Rule 7.31–E(i)(3)(B) would 

provide that an order to buy (sell) with 

an MTS Modifier would trade with sell 

(buy) orders in the NYSE Arca Book that 

in the aggregate meet such order’s MTS. 

This proposed rule text is based on the 

third sentence of Rule 7.31–E(b)(2)(A) 

and the second sentence of Rule 7.31– 

E(d)(3)(D) with non-substantive 

differences to use common terminology 

when applying this requirement to all of 

the order types eligible for an MTS 

Modifier. 

Because Tracking Orders do not trade 

on arrival, this rule text would be 

applicable only to MPL Orders and 

Limit IOC Orders with an MTS 

Modifier. Proposed Rule 7.31–E(i)(3)(B) 

is based on NYSE American Rule 

7.31E(i)(3)(B)(i) without any differences. 

Proposed Rule 7.31–E(i)(3)(C) would 

provide that an order with an MTS 

Modifier that is designated Day and 

cannot be satisfied on arrival would not 

trade and would be ranked in the NYSE 

Arca Book. This proposed rule text is 

based on the third sentence of Rule 

7.31–E(d)(3)(D) with non-substantive 

differences to reference orders 

designated Day, i.e., MPL Orders and 

MPL–ALO Orders. The first sentence of 

Rule 7.31–E(i)(3)(C) is based on NYSE 

American Rule 7.31E(i)(3)(C) without 

any differences. 

The Exchange further proposes to 

describe new functionality relating to 

when an order with an MTS Modifier 

that is designated Day would not be 

eligible to trade. In short, if a laterarriving contra-side order can meet the 

MTS of a resting order with an MTS 

Modifier, the two orders would trade 

unless the execution would be 

inconsistent with either intra-market 

price priority or would result in a nondisplayed order trading ahead of a sameside, same-priced displayed order.14

Therefore, as proposed, the Exchange 

would not permit an order with an MTS 

Modifier that crosses other displayed or 

non-displayed orders on the NYSE Arca 

Book to trade at prices that are worse 

than the price of such contra-side 

orders. As further proposed, the 

Exchange would not permit a resting 

order with an MTS Modifier to trade at 

a price equal to a displayed contra-side 

order.15

To reflect these changes, the second 

sentence of Rule 7.31–E(i)(3)(C) would 

provide that when a buy (sell) order 

with an MTS Modifier that is designated 

Day is ranked in the NYSE Arca Book, 

it would not be eligible to trade: 

(i) At a price equal to or above (below) 

any sell (buy) orders that are displayed 

and that have a working price equal to 

or below (above) the working price of 

such order with an MTS Modifier, or 

(ii) at a price above (below) any sell 

(buy) orders that are not displayed and 

that have a working price below (above) 

the working price of such order with an 

MTS Modifier. 

For example, 

• If the PBBO is 10.10 x 10.16, on the 

NYSE Arca Book there is a sell order 

(‘‘Order A’’) ranked Priority 3—NonDisplay Orders for 50 shares at 10.12 

and a sell order (‘‘Order B’’) ranked 

Priority 2—Display Orders for 25 shares 

at 10.11, and the Exchange receives a 

buy MPL Order (‘‘Order C’’) with an 

MTS Modifier for 100 shares with a 

10.16 limit, because the MTS cannot be 

met, Order C will not trade and will be 

ranked in the NYSE Arca Book at the 

midpoint of 10.13. At this point, the 

Exchange would have a non-displayed 

buy order crossing both non-displayed 

and displayed sell orders on the NYSE 

Arca Book. If the Exchange then 

receives a non-displayed sell order 

(‘‘Order D’’) for 100 shares at 10.11, 

even though Order D would be 

marketable against Order C, it would not 

trade because a trade at 10.13 would be 

above the price of resting sell orders.16

Order D would be added to the NYSE 

Arca Book at 10.11. 

• If next, the Exchange receives a buy 

order (‘‘Order E’’) to buy 25 shares at 

10.11, it would trade with Order B. As 

discussed above, this execution would 

trigger the Exchange to evaluate whether 

Order C becomes marketable against 

contra-side orders.17 In this scenario, 

because Order B has now executed, 

Order C is no longer restricted from 

trading at 10.11. Because Order C’s 

restriction has been lifted and Order D 

does not have a working price change, 

Order C would become an Aggressing 

Order and trade as the liquidity taker 

with Order D at 10.11. 

Proposed Rule 7.31–E(i)(3)(D) would 

provide that an order with an MTS 

Modifier that is designated IOC and 

cannot be immediately satisfied would 

be cancelled in its entirety. This 

proposed rule text is based on the last 

sentence of Rule 7.31–E(b)(2)(A), with 

non-substantive differences to specify 

that this functionality would be 

applicable to any orders designated IOC 

that have an MTS Modifier, i.e., Limit 

IOC Orders and MPL–IOC Orders. 

Proposed Rule 7.31–E(i)(3)(D) is based 

on NYSE American Rule 7.31E(i)(3)(D) 

without any differences. 

Proposed Rule 7.31–E(i)(3)(E) would 

provide that a resting order to buy (sell) 

with an MTS Modifier would trade with 

individual sell (buy) orders that each 

meets the MTS.18 This proposed rule 

text is based on the fourth sentence of 

Rule 7.31–E(d)(3)(D) with a nonsubstantive difference to use the same 

terminology as proposed Rule 7.31– 

E(i)(3)(B) because a resting order with 

an MTS Modifier only trades if contraside individual orders each meets such 

order’s MTS. The Exchange proposes 

non-substantive differences to use 

common terminology when applying 

this requirement to all of the order types 

eligible for an MTS Modifier. Proposed 

Rule 7.31–E(i)(3)(E) is based on NYSE 

American Rule 7.31E(i)(3)(E) without 

any differences. 

Proposed Rules 7.31–E(i)(3)(E)(i)–(ii) 

would set forth additional requirements 

for how a resting order with an MTS 

Modifier would trade. Proposed Rule 

7.31–E(i)(3)(E)(i) would provide that if 

an Aggressing Order to sell (buy) does 

not meet the MTS of the resting order 

to buy (sell) with an MTS Modifier, that 

Aggressing Order would not trade with 

and may trade through such order with 

an MTS Modifier. This proposed rule 

text is based on the fifth sentence of 

current Rule 7.31–E(d)(3)(D) and the 

second sentence of current Rule 7.31– 

E(d)(4)(C) with non-substantive 

differences to use common terminology 

when applying this requirement to all of 

the order types eligible for an MTS 

Modifier. Proposed Rule 7.31– 

E(i)(3)(E)(i) is based on NYSE American 

Rule 7.31E(i)(3)(E)(i) with a nonsubstantive difference to use the term 

‘‘Aggressing Order.’’ 

Proposed Rule 7.31–E(i)(3)(E)(ii) 

would provide that if a resting nondisplayed sell (buy) order did not meet 

the MTS of a same-priced resting order 


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3042 Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices 

19 15 U.S.C. 78f(b). 

20 15 U.S.C. 78f(b)(5). 

to buy (sell) with an MTS Modifier, a 

subsequently arriving sell (buy) order 

that meets the MTS would trade ahead 

of such resting non-displayed sell (buy) 

order at that price. This proposed rule 

text is based in part on the second 

sentence of Rule 7.31–E(d)(4)(C) with 

non-substantive differences to use 

common terminology when applying 

this requirement to all of the order types 

eligible for an MTS Modifier. This 

proposed rule text is also based in part 

on NYSE American Rule 

7.31E(i)(3)(E)(ii). 

However, the Exchange proposes a 

difference from current text and the 

NYSE American Rule to add that the 

subsequently arriving order could trade 

ahead of a resting non-displayed order 

at that price, e.g., at the internal locking 

price. This proposed behavior is 

consistent with the proposed 

amendment to MPL–ALO Orders, 

described above in proposed Rule 7.31– 

E(d)(3)(E)(ii). In addition, as discussed 

above, pursuant to proposed Rule 7.31– 

E(i)(3)(C)(i), if an order with an MTS 

Modifier is locked by a displayed order, 

the resting order with an MTS Modifier 

would not be eligible to trade at that 

price. In such case, the subsequently 

arriving order would not trade with the 

order with an MTS Modifier. 

Proposed Rule 7.31–E(i)(3)(F) would 

provide that a resting order with an 

MTS Modifier would be cancelled if it 

is traded in part or reduced in size and 

the remaining quantity is less than such 

order’s MTS. This proposed rule text is 

based on the last sentence of Rule 7.31– 

E(d)(3)(D) and the last sentence of Rule 

7.31–E(d)(4)(C) with non-substantive 

differences to use common terminology 

when applying this requirement to all of 

the order types eligible for an MTS 

Modifier. Proposed Rule 7.31–E(i)(3)(F) 

is based on NYSE American Rule 

7.31E(i)(3)(F) without any differences 

Because of the technology changes 

associated with these proposed rule 

change, the Exchange will announce the 

implementation date of this proposed 

rule change by Trader Update. The 

Exchange anticipates that the 

implementation date will be in the first 

quarter of 2018. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),19 in general, and furthers the 

objectives of Section 6(b)(5),20 in 

particular, because it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, 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 the 

proposed definition of ‘‘Aggressing 

Order’’ in Rule 7.36–E would remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest because it would provide for a 

definition in Exchange rules that 

describes orders that are or become 

marketable. The Exchange believes that 

the proposed definition would promote 

transparency in Exchange rules by 

providing detail regarding 

circumstances when a resting order may 

become marketable, and thus would be 

an Aggressing Order. The Exchange 

further believes that use of such 

definition would promote clarity in 

Exchange rules, particularly in the 

context of the amendments to MPL 

Orders and orders with an MTS 

Modifier. 

The Exchange believes that the 

proposed amendments to Rule 7.31– 

E(d)(3)(C) and (E) to use the term 

‘‘Aggressing Order’’ and to describe the 

prices at which an Aggressing MPL 

Order would trade would remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest because it would promote 

clarity and transparency in Exchange 

rules regarding the behavior of 

marketable MPL and MPL–ALO Orders. 

In particular, the rule would provide 

greater specificity regarding how a 

resting MPL Order that becomes an 

Aggressing Order would trade. 

The Exchange believes that the 

proposed amendments to Rule 7.31– 

E(d)(3)(E) regarding when a resting 

MPL–ALO Order that locks contra-side, 

same-priced orders would be eligible to 

trade would remove impediments to, 

and perfect the mechanism of, a free and 

open market and a national market 

system and, in general, protect investors 

and the public interest because it would 

describe circumstances when a 

subsequently arriving order could trade 

with the MPL–ALO Order. The 

proposed rule change would protect 

displayed orders by not allowing a 

subsequently arriving order to trade 

ahead of a same-priced, same-side 

displayed order. 

The Exchange believes that the 

proposed amendment to describe the 

existing MTS Modifier in proposed Rule 

7.31–E(i)(3) would remove impediments 

to, and perfect the mechanism of, a free 

and open market and a national market 

system and, in general, protect investors 

and the public interest because it would 

promote transparency in Exchange rules 

because MTS Modifiers for different 

order types operate in the same manner. 

The Exchange believes that by 

consolidating such references in a single 

location in Rule 7.31–E, the rule will be 

easier for members, the Commission, 

and the public to navigate. 

Finally, the Exchange believes that 

the proposal regarding when a resting 

order with an MTS Modifier would be 

eligible to trade would remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system and, in 

general, protect investors and the public 

interest, because the proposed rule 

change would ensure that there would 

not be an execution of a resting order 

with an MTS Modifier that either would 

be inconsistent with intra-market price 

priority or would result in a nondisplayed order trading ahead of a sameside, same-priced displayed order. This 

proposed rule change would therefore 

promote just and equitable principles of 

trade by ensuring that displayed interest 

does not get traded through by a nondisplayed order. 

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 

Exchange believes that the proposed 

rule change is not designed to address 

any competitive issues, but rather to add 

further clarity to Exchange rules by 

defining the term ‘‘Aggressing Order,’’ 

using that term in connection with MPL 

Orders, and consolidating references to 

MTS Modifiers in a single location in 

Exchange rules. In addition, the rule is 

designed to ensure that resting orders 

with trading restrictions, such as MPL– 

ALO Orders and resting orders with an 

MTS Modifier, would not trade through 

displayed orders or violate intra-market 

price priority. 

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. 


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Federal Register / Vol. 83, No. 14 / Monday, January 22, 2018 / Notices 3043 

21 15 U.S.C. 78s(b)(3)(A). 

22 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission 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. The 

Exchange has satisfied this requirement. 23 17 CFR 200.30–3(a)(12). 

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 prior to 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 21 and Rule 19b–4(f)(6) 

thereunder.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 

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–2018–01 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2018–01. 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–NYSEArca–2018–01 and 

should be submitted on or before 

February 12, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–00975 Filed 1–19–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Wednesday, 

January 24, 2018. 

PLACE: Closed Commission Hearing 

Room 10800. 

STATUS: This meeting will be closed to 

the public. 

MATTERS TO BE CONSIDERED: 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the closed meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

Commissioner Piwowar, as duty 

officer, voted to consider the items 

listed for the closed meeting in closed 

session. 

The subject matters of the closed 

meeting will be: 

Settlement of injunctive actions; 

Institution and settlement of 

administrative proceedings; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed; please contact 

Brent J. Fields from the Office of the 

Secretary at (202) 551–5400. 

Dated: January 17, 2018. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–01164 Filed 1–18–18; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82503; File Nos. SR– 

BatsBYX–2017–11; SR–BatsBZX–2017–38; 

SR–BatsEDGA–2017–13; SR–BatsEDGX– 

2017–22; SR–BOX–2017–16; SR–BX–2017– 

023; SR–C2–2017–017; SR–CBOE–2017– 

040; SR–CHX–2017–08; SR–FINRA–2017– 

011; SR–GEMX–2017–17; SR–IEX–2017–16; 

SR–ISE–2017–45; SR–MIAX–2017–18; SR– 

MRX–2017–04; SR–NASDAQ–2017–046; 

SR–NYSE–2017–22; SR–NYSEArca–2017– 

52; SR–NYSEMKT–2017–26; SR–PEARL– 

2017–20; SR–PHLX–2017–37] 


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