Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Notices 62227 

45See 17 CFR 242.610(d). 

46See NYSE Rule 19; NYSE MKT Rule 19— 

Equities. 

47 15 U.S.C. 78s(b)(2). 

48 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. 

4See Securities Exchange Act Release No. 71176 

(Dec. 23, 2013), 78 FR 79524 (Dec. 30, 2013) (SR– 

NYSEArca–2013–107). 

5RPIs not designated as MPL Orders would 

alternatively need to be designated as a Passive 

Liquidity (‘‘PL’’) Order. 

things, that each SRO adopt, maintain, 

and enforce written rules that prohibit 

its members from engaging in a pattern 

or practice of displaying quotations that 

lock or cross protected quotations.45

The Exchanges have adopted rules 

pursuant to Rule 610, and their rules 

include an ISO exception.46 Under the 

ISO exception, market participants are 

permitted to ‘‘ship and post.’’ The 

exchanges have not proposed to amend 

this exception. Under the Exchanges’ 

proposed amendments to their rules, the 

Day ISO subjected to an Exchange 

would be immediately executed against 

the Exchange’s displayed quote, and 

then the remainder, if any, would be 

posted to the book, where it may lock 

or cross a protected quotation that is 

displayed at the time the Day ISO 

arrives. Under the ‘‘ship and post’’ 

exception, the market participants 

submitting the Day ISO would have to 

send one or more additional ISOs to 

execute against the protected quotations 

on other exchanges that would be 

locked or crossed, and thus, the Day ISO 

is consistent with Rule 610 of 

Regulation NMS. The Day ISO with the 

ALO modifier would function in a 

similar manner as the day limit order 

with the ALO modifier and the Day ISO, 

including re-pricing and re-displaying. 

For the reasons discussed above, the 

Commission finds that the Exchanges’ 

proposals are consistent with the Act. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,47 that the 

proposed rule changes SR–NYSE–2014– 

32 and SR–NYSEMKT–2014–56, be and 

hereby are, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.48

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24547 Filed 10–15–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73329; File No. SR– 

NYSEARCA–2014–115] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Retail Liquidity Program and NYSE 

Arca Equities Rule 7.44 To Provide 

That Retail Price Improvement Orders 

That Are Not Priced Better Than the 

Best Protected Bid or Best Protected 

Offer Will Not Be Rejected Upon Entry 

October 9, 2014. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that, on October 

1, 2014, NYSE Arca, Inc. (‘‘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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Arca Equities Rule 7.44 to 

provide that Retail Price Improvement 

Orders that are not priced better than 

the best protected bid or best protected 

offer will not be rejected upon entry. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to amend 

NYSE Arca Equities Rule 7.44 (‘‘Rule 

7.44’’) to provide that Retail Price 

Improvement Orders (‘‘RPI’’) that are 

not priced better than the best protected 

bid (‘‘PBB’’) or best protected offer 

(‘‘PBO’’) will not be rejected upon entry. 

Rule 7.44 sets forth the Exchange’s 

pilot Retail Liquidity Program (the 

‘‘Program’’).4 Under the Program, ETP 

Holders are able to provide price 

improvement to Retail Orders, as 

defined in Rule 7.44(a)(3) and (k), by 

submitting an RPI, which is nondisplayed liquidity in NYSE Arca-listed 

securities and UTP Securities, excluding 

NYSE-listed (Tape A) securities, that is 

priced more aggressively than the PBBO 

by at least $0.001 per share and that is 

identified as an RPI in a manner 

prescribed by the Exchange. RPIs are 

entered at a single limit price, rather 

than being pegged to the PBBO; 

however, RPIs can be designated as a 

Mid-Point Passive Liquidity (‘‘MPL’’) 

Order, in which case the order will reprice as the PBBO changes.5 RPIs 

remain non-displayed and only execute 

against Retail Orders. 

Rule 7.44(a)(4) currently provides that 

an order that is identified as an RPI but 

is not priced better than the PBB or PBO 

will be rejected upon entry. The 

Exchange proposes to amend Rule 

7.44(a)(4) to permit entry of RPI’s that 

are not priced better than the PBB or 

PBO. The Exchange believes that by 

accepting all RPIs, regardless of price, 

the Exchange will expand the interest 

that would be available to provide price 

improvement for Retail Orders, 

particularly if the PBB or PBO moves 

such that an RPI that otherwise would 

have been rejected could become priceimproving interest. 

To effect this change, the Exchange 

proposes to delete the third sentence of 

Rule 7.44(a)(4) that provides for such 

inferior-priced RPIs to be rejected upon 

entry. The Exchange further proposes to 

amend the fourth sentence of Rule 

7.44(a)(4) to conform the rule text to this 

proposed change. Specifically, the 

current rule text provides that ‘‘[a] 

previously entered RPI that becomes 

priced at or inferior to the PBBO will 

not be eligible to interact with incoming 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
62228 Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Notices 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A). 

9 17 CFR 240.19b–4(f)(6). 

10 In addition, Rule 19b–4(f)(6)(iii) requires the 

Exchange to give the Commission written notice of 

the Exchange’s 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. 

11 17 CFR 240.19b–4(f)(6)(iii). 

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

Retail Orders, and such an RPI will 

cancel if a Retail Order executes against 

all displayed liquidity at the PBBO and 

the [sic] attempt [sic] to execute against 

the RPI.’’ Because the Exchange would 

no longer be rejecting RPIs that are not 

priced better than the PBB or PBO, the 

Exchange believes that use of the term 

‘‘previously entered’’ would no longer 

reflect the universe of RPIs that may not 

be priced better than the PBB or PBO. 

The Exchange therefore proposes to 

amend this sentence to delete the term 

‘‘previously entered’’ and instead state 

that an RPI that is or becomes priced at 

or inferior to the PBBO would be subject 

to the treatment currently described in 

the rule. 

The Exchange does not intend to 

make any other changes to the Program 

with this rule filing. The Exchange will 

announce the implementation date of 

the systems functionality associated 

with the proposed rule change by 

Trader Update to be published no later 

than 30 days following the effective 

date. The implementation date will be 

no later than 30 days following the 

issuance of the Trader Update. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the Act,6

in general, and furthers the objectives of 

Section 6(b)(5),7 in particular, in that it 

is designed 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 the 

proposed rule change removes 

impediments to and perfects the 

mechanism of a free and open market 

and national market system because it 

would enable additional RPI interest to 

be entered regardless of price, thereby 

allowing that RPI interest to remain in 

Exchange systems and become eligible 

to provide price improvement if the PBB 

or PBO changes such that the RPI 

interest becomes priced better than the 

PBB or PBO. The Exchange further 

believes that the proposed rule change 

protects investors and the public 

interest because it potentially increases 

the amount of RPI interest available to 

provide price improvement to incoming 

Retail Orders if the PBB or PBO moves 

such that the RPI becomes eligible to 

provide price improvement. The 

Exchange further believes the proposal 

will protect investors and the public 

interest because the proposed rule 

change will increase the incentives of 

liquidity providers to enter RPIs because 

liquidity providers will no longer need 

to risk rejection of RPIs that may be 

priced inferior to the PBB or PBO upon 

entry. 

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 Program is 

designed to increase competition among 

execution venues, encourage additional 

liquidity, and offer the potential for 

price improvement to retail investors. 

The Exchange notes that a significant 

percentage of the orders of individual 

investors are executed over-the-counter. 

The Exchanges believes that it is 

appropriate to create a financial 

incentive to bring more retail order flow 

to a public market. The Exchange 

believes that the proposed rule change 

supports this objective by eliminating 

the possibility that liquidity-providing 

interest would be rejected based on 

price. 

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 has become 

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

of the Act 8 and Rule 19b–4(f)(6) 9

thereunder because the proposal does 

not: (i) Significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) by its 

terms, 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.10

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b– 

4(f)(6)(iii) 11 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. 

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.12

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–2014–115 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–2014–115. 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 


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Federal Register / Vol. 79, No. 200 / Thursday, October 16, 2014 / Notices 62229 

13 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. 

4See Securities Exchange Act Release No. 71989 

(April 22, 2014), 79 FR 23391 (April 28, 2014) (SR– 

NYSE–2014–21). See also FINRA Regulatory 

Notices 14–10 and 14–11. 

5 In 2013, the NYSE adopted a new set of 

procedural rules modeled on the rules of the 

Financial Industry Regulatory Authority (‘‘FINRA’’) 

that included aspects of FINRA’s process and fine 

levels for minor rule violations. The Exchange 

maintained the specific list of rules set forth in 

NYSE Rule 476A, which were moved to new Rule 

9217. See Securities Exchange Act Release Nos. 

68678 (Jan. 16, 2013), 78 FR 5213 (Jan. 24, 2013), 

and 69045 (Mar. 5, 2013), 78 FR 15394 (Mar. 11, 

2013) (SR–NYSE–2013–02). Rule 476A continues to 

apply to disciplinary proceedings filed prior to July 

1, 2013. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A)(iii). 

9 17 CFR 240.19b–4(f)(6). 

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–2014–115 and should be 

submitted on or before November 6, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–24543 Filed 10–15–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[(Release No. 34–73325; File No. SR–NYSE– 

2014–55] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Make 

Conforming Amendments To Reflect 

Recent Deletion of Rule 343 

October 9, 2014. 

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 October 

6, 2014, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) 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 proposes to 

[sic] make conforming amendments to 

reflect its recent deletion of Rule 343. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to make 

conforming amendments to reflect its 

recent deletion of Rule 343. The 

Exchange deleted Rule 343 and its 

interpretation, effective as of April 7, 

2014.4 The Exchange accordingly 

proposes to delete obsolete references to 

Rule 343 in Rule 321, governing 

formation or acquisition of subsidiaries 

by member organizations, and Rules 

476A and 9217, which govern minor 

rule violations.5

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,6 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,7 in particular, because it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

foster cooperation and coordination 

with persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, help to protect investors and 

the public interest. Specifically, the 

Exchange believes that deleting 

references to obsolete rules removes 

impediments to and perfects the 

mechanism of a free and open market by 

removing confusion that may result 

from having references to obsolete rules 

in the Exchange’s rulebook. The 

Exchange further believes that the 

proposal removes impediments to and 

perfects the mechanism of a free and 

open market by ensuring that persons 

subject to the Exchange’s jurisdiction, 

regulators, and the investing public can 

more easily navigate and understand the 

Exchange’s rulebook. The Exchange 

believes that eliminating references to 

obsolete rules would not be inconsistent 

with the public interest and the 

protection of investors because investors 

will not be harmed and in fact would 

benefit from increased transparency as 

to which rules are operable, thereby 

reducing potential confusion. Removing 

such obsolete cross references will also 

further the goal of transparency and add 

clarity to the Exchange’s rules. 

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 change is not designed to 

address any competitive issue but rather 

would make the Exchange’s rules 

internally consistent, thereby reducing 

confusion and making the Exchange’s 

rules easier to understand and navigate. 

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 8 and Rule 

19b–4(f)(6) thereunder.9 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, if 

consistent with the protection of 

investors and the public interest, the 


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