67488 Federal Register / Vol. 79, No. 219 / Thursday, November 13, 2014 / Notices 

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. 

4The Exchange adopted Rule 6.60 governing 

Trade Collar Protection in 2013. See, Exchange Rule 

6.60 (Securities Exchange Act Release No. 70038) 

(July 25, 2013), 78 FR 46392 (July 31, 2013) 

(NYSEArca-2013–72). 

5The bid-ask differential changes as the price 

increases. Rule 6.37(b)(1) sets the bid-ask 

differential at no more than $0.40 where the bid is 

$2.00 or more but does not exceed $5.00. 

Accordingly, if the NBBO for XYZ is $3.00 bid and 

$3.50 offer, certain orders the Exchange receives 

will be subject to a $0.40 Trading Collar Protection. 

6A Trading Official, as defined by Rule 6.1(b)(34) 

is an officer or employee of the Exchange. Trading 

Officials are not affiliated with OTP Holders. 

7See, Rule 6.60(a)(4)(B). 

8Rule 6.60(a)(4)(C)(iv) states that a new Market 

Order on the same side as a collared order will not 

cause the order subject to Trade Collar Protection 

to be recalculated (but will redisplay with the 

additional size of the new Market Order). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26841 Filed 11–12–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73543; File No. SR– 

NYSEArca-2014–14] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change Amending Rule 6.60 To 

Enhance the Functionality of the Trade 

Collar Protection Mechanism 

November 6, 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 

24, 2014, 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, II, and III below, which Items 

have been prepared by the selfregulatory 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 amend 

Rule 6.60 to enhance the functionality 

of the trade collar protection 

mechanism. 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 is proposing to amend 

Rule 6.60(a) to clarify and conform with 

the functionality of the trade collar 

protection mechanism in use on the 

Exchange. The Exchange’s amendment 

is to specify (a) how marketable Limit 

Orders behave when received in a wide 

market, (b) how subsequently-arriving 

Market Orders effect collared orders, 

and (c) the values associated with a 

Trading Collar. The Exchange also seeks 

to make non-substantive wording 

changes to Rule 6.60(a) and fix a 

typographical error in Rule 6.37(b)(1)(E). 

Background 

Pursuant to Rule 6.60(a), the 

Exchange applies a ‘‘Trade Collar 

Protection’’ mechanism that prevents 

the immediate execution of certain 

orders at prices outside of a specified 

parameter (referred to as a ‘‘Trading 

Collar’’).4 Pursuant to Rule 6.60(a)(3), 

the Trade Collar Protection mechanism 

is not available for quotes or for orders 

with execution conditions IOC, AON, 

FOK and NOW. 

Trading Collars are determined by the 

Exchange on a class-by-class basis and, 

unless announced otherwise via Trader 

Update, are the same value as the bidask differential guidelines established 

pursuant to Rule 6.37(b)(1), as set forth 

in Rule 6.60(a)(2). For example, Rule 

6.37(b)(1) sets the bid-ask differential for 

an option priced less than $2.00 at 

$0.25. For any option that has a bid less 

than $2.00, the Trading Collar will be 

$0.25. Accordingly, if the National Best 

Bid and Offer (‘‘NBBO’’) for XYZ is 

$0.75 bid and $1.75 offer, certain orders 

the Exchange receives will be subject to 

a $0.25 Trading Collar.5 If necessary to 

preserve a fair and orderly market, the 

Exchange may, with the approval of two 

Trading Officials,6 widen or narrow the 

Trading Collar for one or more option 

series. 

Trade Collar Protection applies to two 

scenarios. First, pursuant to Rule 

6.60(a)(1)(i), Trade Collar Protection 

prevents executions of certain orders 

when the difference between the 

National Best Offer (‘‘NBO’’) and the 

National Best Bid (‘‘NBB’’) is greater 

than one Trading Collar. Second, 

pursuant to Rule 6.60(a)(1)(ii), Trade 

Collar Protection prevents the execution 

of the balance of an eligible buy order 

if it were to execute at a price that is the 

NBO plus a Trading Collar (or a price 

that is the NBB minus a Trading Collar 

for an eligible sell orders). 

Pursuant to Rule 6.60(a)(1)(i), if the 

difference between the NBO and the 

NBB is greater than one Trading Collar, 

the Exchange will prevent execution or 

routing of certain orders. Instead, 

pursuant to Rule 6.60(a)(4)(A), the 

Exchange will display the order at a 

price equal to the NBO minus one 

Trading Collar for sell orders or the NBB 

plus one Trading Collar for buy orders 

(the ‘‘collared order’’). The Exchange 

will then attempt to execute or route the 

collared order to buy (sell) against any 

contra interest priced within one 

Trading Collar above (below) the 

displayed price of the collared order.7

As set forth in Rule 6.60(a)(4)(C)(iii), 

should market conditions prevent the 

order from trading or recalculating for a 

period of one second, the order will 

improve its displayed price by an 

amount equal to an additional Trading 

Collar. 

The collared order will re-price before 

the expiration of one second as a result 

of certain changes in the market. 

Pursuant to Rule 6.60(a)(4)(C)(i), an 

update to the NBBO (based on another 

market center or a quote or order on the 

Exchange) that improves the same side 

of the market as the collared order will 

cause the collared order to be 

redisplayed at the same price as the 

updated NBBO. In accordance with Rule 

6.60(a)(4)(C)(ii), a Limit Order (which is 

not an IOC Order, AON Order, FOK 

Order or NOW Order) on the same side 

of the market priced better than one 

Trading Collar from the collared order 

will also become subject to Trade Collar 

Protection and will cause the collared 

order to improve by one Trading Collar 

(which will redisplay at the new price 

and additional size of the new Limit 

Order).8


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 219 / Thursday, November 13, 2014 / Notices 67489 

9Rule 6.60(a)(4)(C)(ii) and 6.60(b) explain two 

scenarios where marketable Limit Orders might not 

immediately execute: (1) When there is already a 

collared order or (2) when the Limit Order is priced 

significantly through the contra-side BBO. 

As set forth in Rule 6.60(a)(1)(ii), 

when the difference between the NBB 

and NBO is within the bid-ask 

differential guidelines, orders execute 

against the NBB or NBO, but Trade 

Collar Protection prevents execution of 

the balance of certain order at prices 

that are a Trading Collar above the NBO 

for buy orders (or at prices that are a 

Trading Collar below the NBB for sell 

orders). Essentially, the Exchange will 

permit the immediate execution of a 

Market Order or a marketable Limit 

Order (together a ‘‘marketable order’’) 

up to a Trading Collar away from the 

NBBO. Pursuant to Rule 6.60(a)(5), the 

balance of the partially executed order 

will be subject to Trade Collar 

Protection and will display at the last 

sale price. However, if there is an 

opportunity for trading within one 

Trading Collar of the last sale price, the 

order will continue to be displayed at 

the NBB (NBO) established at the time 

of the initial execution. Once subject to 

Trade Collar Protection, the order will 

follow the re-pricing mechanism 

described above. 

Proposed Change 

The Exchange seeks to clarify and 

correct Rule 6.60 so as to conform to 

current functionality. Pursuant to the 

language of Rule 6.60(a)(1)(i), the 

Exchange will prevent the immediately 

[sic] execution of ‘‘Market Orders or 

marketable Limit Orders’’ if the width of 

the bid-ask differential of the NBBO is 

greater than one Trading Collar. 

However, during wide market 

conditions, the Exchange only prevents 

the immediate execution of Market 

Orders. Orders with limit prices that are 

executable against the NBB or NBO, 

regardless of the width of the bid-ask 

differential of the NBBO, immediately 

execute.9 The Exchange believes that 

Market Orders need this additional level 

of protection as such orders do not 

suggest that the submitting market 

participant is aware of the market (or 

the dislocation associated therewith). 

Conversely, the Exchange believes that 

an order with a limit price evidences 

specific interest at which the submitting 

market participant is willing to trade. 

While marketable Limit Orders are 

immediately executable in situations 

where the bid-ask differential of the 

NBBO is greater than one Trading 

Collar, they nonetheless remain subject 

to the protections of the Limit Order 

Filter of 6.60(b). 

The Exchange also seeks to delete 

6.60(a)(4)(C)(iv), which states that a 

Market Order that arrives while another 

order is being displayed due to Trade 

Collar Protection will join the collared 

order and display at the same price. 

While the Exchange believes this 

behavior beneficial to the market, it has 

not yet deployed the functionality. 

While it intends to incorporate such an 

enhancement in the near future, the 

Exchange is deleting (a)(4)(C)(iv) in 

order for its rules to comply with 

current functionality. Market Orders 

that arrive while another order is 

displayed due to Trade Collar Protection 

will behave in the same manner as laterarriving marketable Limit Orders. 

Specifically, the later-arriving Market 

Order will join the already collared 

order and both will display at a price 

one Trading Collar above (below) the 

previous displayed price. The Exchange 

intends to make another filing to reestablishing the language of (a)(4)(C)(iv) 

once the functionality is available. 

The Exchange also proposes to amend 

Rule 6.60(a) to add language that 

clarifies the current operation of the 

trading collar mechanism. In particular, 

the Exchange proposes to delete the 

reference to Rule 6.37(b)(1) and instead 

codify the values of the Trading Collar 

directly in Rule 6.60(a). Rule 6.37(b)(1) 

sets the bid-ask differentials based 

exclusively on the bid price. The trading 

collar mechanism employs the same 

values for determining the Trading 

Collar. However, while those values are 

based upon the NBB for buy orders, the 

value of the Trading Collar for sell 

orders is based upon the NBO. The 

Exchange uses the NBB for buy orders 

because it believes that a market 

participant who is looking to buy would 

derive its price off of what other market 

participants are willing to pay (i.e. the 

prevailing bid). Similarly, the Exchange 

uses the NBO for sell orders because it 

believes that a market participant who 

is looking to sell would derive its price 

off of what other market participants are 

willing to sell (i.e. the prevailing offer). 

Accordingly, the Exchange proposes 

new sections (a)(2)(A) and (a)(2)(B) to 

Rule 6.60, which specifies the values 

based upon whether the order subject to 

Trade Collar Protection is to buy or sell. 

As an example, the NBBO for XYZ is 

$1.00 bid and $6.00 offer. Based upon 

Rule 6.60’s reference to Rule 6.37(b)(1), 

it could be interpreted that the Trading 

Collar would be $0.25 regardless of 

whether the Exchange received an order 

to buy or sell (based upon the bid being 

less than $2.00). However, collared sell 

orders currently derive their Trading 

Collar and display price from the NBO. 

Accordingly, a Market Order to buy 

would display at $1.25 (i.e., the $1.00 

NBB plus the $0.25 Trading Collar 

(based upon the NBB being less than 

$2.00)) and would attempt to execute 

against any contra interest (on any 

market) priced $1.50 or less (i.e., $1.25 

bid plus the $0.25 Trading Collar). 

However, a Market Order to sell would 

display at $5.50 (i.e., the $6.00 NBO 

minus the $0.50 Trading Collar (based 

upon the NBO being more than $5.00 

but does not exceed $10.00)) and would 

attempt to execute against any contra 

interest (on any market) priced $5.00 or 

greater (i.e., $5.50 offer minus the $0.50 

Trading Collar). 

As a further example, the NBBO for 

XYZ is $1.45 × 200 bid and $2.10 × 200 

offer with a $0.05 MPV. If the Exchange 

receives a market order to buy 100 

contracts, the Trading Collar would be 

$0.25 (pursuant to new section 

(a)(2)(B)(i)). Accordingly, the order will 

be displayed at $1.70 (i.e., $1.45 bid 

plus the $0.25 Trading Collar). For a 

period of one second, the Exchange will 

attempt to execute the buy order against 

any contra interest (on any market) 

priced $1.95 or less (i.e., $1.70 plus the 

$0.25 Trading Collar). Under Rule 

6.60(a)(4)(C)(iii), at the expiration of one 

second, the Exchange will attempt to 

redisplay the market buy order subject 

to Trade Collar Protection at $1.95 (i.e., 

$1.70 plus the $0.25 Trading Collar). 

However, since the $2.10 NBO 

represents contra interest priced $2.20 

or less (i.e. $1.95 plus the $0.25 Trading 

Collar), the market buy order would 

execute its 100 contracts against the 

NBO at $2.10. In comparison, in the 

same market for XYZ, if the Exchange 

receives a market order to sell 100 

contracts, the Trading Collar would be 

$0.40 (pursuant to new section 

(a)(2)(B)(ii)). Accordingly, the Exchange 

will attempt to display the market sell 

order at $1.70 (i.e., $2.10 offer minus the 

$0.40 Trading Collar). However, since 

the $1.45 NBB represents contra interest 

priced $1.45 or greater, (i.e. $1.70 minus 

the $0.25 Trading Collar), the market 

sell order would execute its 100 

contracts against the NBB at $1.45. 

The Exchange also proposes to amend 

Rule 6.60(a) to strike the extraneous 

term ‘‘inbound’’ from the rule, which 

could cause confusion as to when Trade 

Collar Protection is available because 

the trade collar mechanism continues to 

apply to resting orders. In addition, the 

Exchange proposes to delete the 

reference in 6.60(a)(3) to the 

cancellation of IOC Orders, AON 

Orders, FOK Orders and NOW Orders if 

not immediately executed, as such is 

not the behavior of AON Orders. The 

Exchange also proposes to capitalize the 

term ‘‘limit order’’ as used in Rule 


tkelley on DSK3SPTVN1PROD with NOTICES
67490 Federal Register / Vol. 79, No. 219 / Thursday, November 13, 2014 / Notices 

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78k–1(a)(1). 

6.60(a)(4)(D) to conform with its use in 

the rest of the rule. Further, the 

Exchange proposes to make nonsubstantive changes to Rule 

6.60(a)(4)(C)(i) and (ii) to better clarify 

behavior in situations where there 

already exists an already collared order. 

Finally, the Exchange seeks to amend 

Rule 6.37(b)(1)(E) to rectify a 

typographical error. Specifically, the 

rule currently states that the bid-ask 

differentials should be no more than $1 

when the last bid is $20.10 or more. The 

rule should instead refer to the last bid 

being $20.01 or more. 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of the 

Securities Exchange Act of 1934 (the 

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

objectives of Section 6(b)(5) 10 which 

requires the rules of an exchange 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 

proposed rule change also is designed to 

support the principles of Section 

11A(a)(1) 11 of the Act in that it seeks to 

assure fair competition among brokers 

and dealers and among exchange 

markets. The Exchange believes that the 

proposed rule amendments relating to 

the behavior of Limit Orders in a wide 

market and the effect on Market Orders 

on already collared orders assist with 

the maintenance of fair and orderly 

markets and protects investors by 

correcting inaccurate language and 

clarifying existing functionality so that 

market participants better understand 

how the Exchange handles certain 

orders in times of market dislocation. 

The Exchange also believes that it 

promotes just and equitable principles 

of trade to allow marketable Limit 

Orders received in a wide market to 

immediately execute against contra-side 

interest before receiving Trade Collar 

Protection because Limit Orders provide 

evidence of prices for which market 

participants are willing to trade. 

Accordingly, to the extent contra-side 

interest exists at the NBBO, the 

Exchange believes it is appropriate to 

permit such executions before providing 

Trade Collar Protection for potential 

subsequent executions at inferior prices. 

Furthermore, the Exchange believes that 

it assists in the fair and orderly market 

to have Market Orders advance an 

already collared order in the same 

fashion as marketable Limit Orders as 

both are subsequent orders representing 

executable interest. The Exchange 

believes that its proposal to clarify that 

Trading Collar values are based upon 

the NBB for buy orders and the NBO for 

sell orders removes impediments to and 

perfects the mechanism of a free and 

open market by basing the Trading 

Collar upon the benchmark from which 

a market participant would most likely 

derive its price. The Exchange 

recognizes that there could be potential 

market conditions that result in 

different Trading Collar values 

depending on whether the order 

submitted is to buy or sell. However, the 

Exchange believes that any such 

differences are outweighed by meeting 

the expectations of market participants 

who submit buy orders based upon the 

price of the prevailing NBB and sell 

orders based upon the price of the 

prevailing NBO. Further, the Exchange 

believes that clearly setting forth these 

benchmarks removes impediments to 

and perfects the mechanism of a free 

and open market by ensuring that 

market participants better understand 

the functionality of the trade collar 

mechanism on the Exchange and the 

execution opportunities afforded their 

orders in certain market conditions. The 

Exchange also believes that making nonsubstantive wording changes enhances 

the description of Trade Collar 

Protection will add transparency and 

clarity to the Exchange’s rules. Finally, 

the Exchange believes that fixing a 

typographical error found in Rule 

6.37(b)(1)(E) will protect investors and 

the public interest by reducing 

confusion that the error would 

otherwise create. 

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 

Exchange believes the proposal will 

provide market participants with clarity 

relating to how the Exchange systems 

provides protection from anomalous 

executions. Thus, the Exchange does not 

believe the proposal creates any 

significant impact on competition. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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–2014–14 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–2014–14. 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 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 219 / Thursday, November 13, 2014 / Notices 67491 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 72750 

(August 4, 2014), 79 FR 46494. 

4See Letter from Ira D. Hammerman, General 

Counsel, SIFMA, to Kevin M. O’Neill, Deputy 

Secretary, Commission, dated August 28, 2014 

(‘‘SIFMA Letter’’). 

5See Letter from Martha Redding, Chief Counsel, 

NYSE, dated October 31, 2014 (‘‘NYSE Letter’’). 

6See Securities Exchange Act Release No. 73137, 

79 FR 57160 (Nov. 24, 2014). 

7 In Amendment No. 1, the Exchange modified 

the proposal to (i) remove language proposing 

specific fee amounts for NYSE BQT, (ii) clarify that 

it intended to propose fees that would be no lower 

than the cost to a vendor of creating a comparable 

product, including the costs of the underlying 

feeds, and (iii) represent that it would not offer 

NYSE BQT until after the proposal has been 

approved by the Commission, the Exchange has 

filed fees for NYSE BQT with the Commission, and 

such fees have become effective. The Commission 

notes that the Exchange submitted a comment letter 

attaching Amendment No. 1 on October 31, 2013, 

and, consequently, Amendment No. 1 is available 

in the public comment file for SR–NYSE–2014–40 

on the Commission’s Web site. 

The Exchange has represented that it does not 

currently offer the NYSE BQT data feed. 

8NYSE BBO, NYSE Arca BBO, and NYSE MKT 

BBO are existing data feeds that distribute on a realtime basis the same BBO information that NYSE, 

NYSE Arca, and NYSE MKT, respectively, report 

under the Consolidated Quotation (‘‘CQ’’) Plan for 

inclusion in the CQ Plan’s consolidated quotation 

information data stream. NYSE Trades, NYSE Arca 

Trades, and NYSE MKT Trades are existing data 

feeds that distribute on a real-time basis the same 

last sale information that NYSE, NYSE Arca, and 

NYSE MKT, respectively, report under the 

Consolidated Tape Association (‘‘CTA’’) Plan for 

inclusion in the CTA Plan’s consolidated data 

streams. 

9The ‘‘securities information processor plans’’ 

refer to the CTA Plan and Nasdaq UTP Plan. See 

Telephone conversations between Leah Mesfin, 

Special Counsel, Division of Trading and Markets, 

Commission, and Marija Willen, Chief Counsel of 

NYSE Group Inc., NYSE (July 30, 2014 and Nov. 6, 

2014). 

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–2014–14, and should be 

submitted on or before December 4, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–26842 Filed 11–12–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73553; File No. SR–NYSE– 

2014–40] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Amendment No. 1 and Order Granting 

Accelerated Approval to a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Establish the 

NYSE Best Quote & Trades Data Feed 

November 6, 2014. 

I. Introduction 

On July 21, 2014, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

establish the NYSE Best Quote & Trades 

(‘‘NYSE BQT’’) data feed. The NYSE 

BQT data feed would provide a unified 

view of best bid and offer (‘‘BBO’’) and 

last sale information for the Exchange 

and its affiliates, NYSE Arca Equities, 

Inc. (‘‘NYSE Arca’’) and NYSE MKT 

LLC (‘‘NYSE MKT’’). The proposed rule 

change was published for comment in 

the Federal Register on August 8, 2014.3

Two comment letters on the proposal 

have been received: One letter opposing 

the proposal,4 and a letter from the 

Exchange responding to the opposing 

comment letter.5 On September 18, 

2014, the Commission extended the 

time to act on the proposal until 

November 6, 2014.6 On October 31, 

2014, the Exchange filed Amendment 

No. 1 to the proposed rule change.7 The 

Commission is publishing this Notice 

and Order to solicit comment on 

Amendment No. 1 and to approve the 

proposed rule change, as modified by 

Amendment No. 1, on an accelerated 

basis. 

II. Description of the Proposal 

The Exchange proposes to establish 

the NYSE BQT data feed, a data feed 

consisting of certain data elements from 

six existing market data feeds: NYSE 

Trades, NYSE BBO, NYSE Arca Trades, 

NYSE Arca BBO, NYSE MKT Trades, 

and NYSE MKT BBO.8 The NYSE BQT 

data feed would have three channels: 

One channel for the last sale data (the 

‘‘last sale channel’’); another channel for 

the BBO data (the ‘‘best quotes 

channel’’); and a third channel for 

consolidated volume data (the 

‘‘consolidated volume channel’’). 

The last sale channel would provide 

an aggregation of the same data that is 

available through NYSE Trades, NYSE 

Arca Trades, and NYSE MKT Trades. 

The best quotes channel would 

provide the ‘‘NYSE BQT BBO,’’ which 

would be the best quote from among the 

NYSE BBO, NYSE Arca BBO, and NYSE 

MKT BBO based on the following 

criteria, in order: 

• Price—the exchange with the 

highest bid or the lowest offer would 

have overall priority; 

• Size—the largest size would take 

precedence when multiple exchanges 

submit the same bid or offer price; and 

• Time—the earliest time would take 

precedence when multiple exchanges 

submit the same bid or offer price with 

the same sizes. 

For each security, the best quotes 

channel would only include one best 

bid and one best offer from among the 

three exchanges. The NYSE BQT BBO 

would be marked with a market center 

ID identifying the exchange from which 

the BBO originated. For example, if XYZ 

stock were traded on both NYSE and 

NYSE Arca, and the highest bid and 

lowest offer according to the NYSE BBO 

were 1,000 shares at $10.00 and 1,000 

shares at $10.03, respectively, and the 

highest bid and lowest offer for XYZ 

stock according to the NYSE Arca BBO 

were 1,200 shares at $9.99 and 900 

shares at $10.02, respectively, then the 

NYSE BQT data feed would generate the 

best bid for XYZ stock as 1,000 shares 

at $10.00 on NYSE and the best offer as 

900 shares at $10.02 on NYSE Arca. 

The consolidated volume channel 

would carry consolidated volume for all 

listed equities, which the Exchange 

would obtain from the securities 

information processors and then 

distribute in a manner consistent with 

the requirements for redistributing such 

data as set forth in the securities 

information processor plans.9

The NYSE BQT data feed would also 

provide related data elements, such as 

trade and security status updates (e.g., 

trade corrections and trading halts), that 

are contained in the NYSE Trades, 

NYSE Arca Trades, and NYSE MKT 

Trades feeds. 

The Exchange proposes to offer the 

NYSE BQT data feed through the 

Exchange’s Secure Financial 

Transaction Infrastructure (‘‘SFTI’’) 

network and market data vendors, as the 

Exchange does with its other proprietary 

market data products. 

The Exchange has stated that it 

believes that the NYSE BQT data feed 

would provide high-quality, 

comprehensive last sale and BBO data 

for the Exchange, NYSE Arca, and NYSE 

MKT in a unified view and would 

respond to subscriber demand for such 

a product. The Exchange anticipates 

that an end user might use the NYSE 


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