Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices 70907 

15 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange intends to require firms to 

identify Professional Customer orders submitted 

electronically to the system by identifying them 

with the number ‘‘8’’ in the customer type field— 

a mandatory field required for order entry. Manual 

orders submitted outside the electronic system 

would be marked with an origin code ‘‘PC.’’ 

5Orders for any customer that had an average of 

more than 390 orders per day during any month of 

a calendar quarter must be represented as 

Professional Customer orders for the next calendar 

quarter. OTP Holders would be required to conduct 

a quarterly review and make any appropriate 

changes to the way in which they are representing 

orders within five business days after the end of 

each calendar quarter. While members only would 

be required to review their accounts on a quarterly 

Continued 

affect any securities clearing operations 

of the clearing agency or any rights or 

obligations of the clearing agency with 

respect to securities clearing or persons 

using such securities clearing service, 

within the meaning of Rule 19b– 

4(f)(4)(ii). 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. 

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– 

ICEEU–2014–23 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–ICEEU–2014–23. 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 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Europe and on ICE 

Clear Europe’s Web site at https://

www.theice.com/clear-europe/

regulation#rule-filings. 

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–ICEEU–2014–23 and 

should be submitted on or before 

December 19, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28080 Filed 11–26–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73665; File No. SR– 

NYSEArca–2014–133] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Rule 6.1A To 

Adopt a Definition of ‘‘Professional 

Customer’’ on the Exchange 

November 21, 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 November 

17, 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, II and III 

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 6.1A (Definitions and References— 

OX) to adopt a definition of 

‘‘Professional Customer’’ on the 

Exchange. The text of the proposed rule 

change is available on the Exchange’s 

Web site at www.nyse.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to amend 

Rule 6.1A (Definitions and References— 

OX) to include a definition of 

‘‘Professional Customer’’ and to amend 

Commentary .03 of Rule 6.69 to specify 

how all Professional Customer orders 

should be marked. 

As proposed, the new term, 

‘‘Professional Customer’’ would be 

defined in Exchange Rule 6.1A(a)(4A), 

as a person or entity that (i) is not a 

broker or dealer in securities, and (ii) 

places more than 390 orders in listed 

options per day on average during a 

calendar month for its own beneficial 

account(s). In connection with this new 

definition, the Exchange proposes to 

add to Commentary of Rule 6.69 the 

origin code OTP Holders would be 

required to use to properly represent 

orders of a ‘‘Professional Customer.’’ 4

To determine whether an order is a 

Professional Customer order, OTP 

Holders would be required to review 

their customers’ activity on at least a 

quarterly basis to determine whether 

orders that are not for the account of a 

broker or dealer should be represented 

as Customer orders or Professional 

Customer orders.5


tkelley on DSK3SPTVN1PROD with NOTICES
70908 Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices 

basis, if during a quarter the Exchange identifies a 

customer for which orders are being represented as 

Customer orders but that has averaged more than 

390 orders per day during a month, the Exchange 

would notify the OTP Holder and the OTP Holder 

would be required to change the manner in which 

it is representing the customer’s orders within five 

business days. 

6 In approving a similar filing of the International 

Securities Exchange, LLC (‘‘ISE’’), the Commission 

referenced statements made by ISE that 390 orders 

is equal to the total number of orders that a person 

would place in a day if that person entered one 

order every minute from market open to market 

close. Many of the largest retail-oriented electronic 

brokers offer lower commission rates to customers 

they define as ‘‘active traders.’’ Publicly available 

information from the Web sites of Charles Schwab, 

Fidelity, TD Ameritrade and OptionsXpress all 

define ‘‘active trader’’ as someone who executes 

only a few options trades per month. The highest 

required trading activity to qualify as an active 

trader among these four firms was 35 trades per 

quarter. See note 14 of Securities Exchange Act 

Release No. 59287 (January 23, 2009), 74 FR 5694, 

5695 (January 30, 2009) (which also notes that a 

study of one of the largest retail-oriented options 

brokerage firms indicated that on a typical trading 

day, options orders were entered with respect to 

5,922 different customer accounts. There was only 

one order entered with respect to 3,765 of the 5,922 

different customer accounts on this day, and there 

were only 17 customer accounts with respect to 

which more than ten orders were entered. The 

highest number of orders entered with respect to 

any one account over the course of an entire week 

was 27). 

7See BATS Exchange, Inc. (‘‘BATS’’) Rule 

16.1(a)(45), Boston Options Exchange LLC (‘‘BOX’’) 

Rule 100(a)(5), NASDAQ OMX BX, Inc. (‘‘BX’’) 

Chapter I, Section 1(a)(49), Chicago Board Options 

Exchange, Incorporated, (‘‘CBOE’’) Rule 1.1(ggg), C2 

Options Exchange, Incorporated (‘‘C2’’) Rule 1.1, 

the International Securities Exchange, LLC (‘‘ISE’’) 

Rule 100(a)(37A), Miami International Securities 

Exchange, LLC (‘‘MIAX’’) Rule 100, the Nasdaq 

Stock Market LLC on behalf of the NASDAQ 

Options Market (‘‘NOM’’) Chapter I, Section 

1(a)(48), NYSE MKT LLC on behalf of NYSE Amex 

Options (‘‘NYSE Amex Options’’) Rule 

900.2NY(18A), NASDAQ OMX PHLX, Inc. 

(‘‘PHLX’’) Rule 1000(b)(14), and Topaz Exchange, 

LLC (d/b/a ISE Gemini) (‘‘Topaz’’) Rule 100(a)(37A). 

8The Exchange’s proposed definition of 

Professional Customer is the same as in the rules 

of BATS and NOM. In addition, like the Exchange’s 

proposal, BATS and NOM do not treat Professional 

Customers differently than Customers for purposes 

of execution or processing. See Securities Exchange 

Act Release Nos. 65500 (October 6, 2011), 76 FR 

63686 (October 13, 2011) (SR–BATS–2011–041) and 

63028 (October 1, 2010), 75 FR 62443 (October 8, 

2010) (SR–NASDAQ–2010–099). 

9While the Exchange is not proposing to change 

the priority rules applicable to orders of 

Professional Customers, it may, in the future, 

propose to change its rules to differentiate between 

Professional Customer orders and other orders for 

purposes of priority or fees. The Exchange would 

not implement such changes until proposed rule 

changes were appropriately filed with the 

Commission and effective under Commission rules. 

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

11 15 U.S.C. 78f(b)(5). 12 15 U.S.C. 78s(b)(3)(A)(iii). 

The Exchange believes that 

identifying Professional Customer 

accounts based upon the average 

number of orders entered in qualified 

accounts is an appropriate, objective 

approach that will reasonably 

distinguish such persons and entities 

from non-professional, retail investors 

or market participants. The Exchange 

believes that the proposed threshold of 

390 orders per day on average over a 

calendar month far exceeds the number 

of orders that are entered by retail 

investors in a single day and therefore 

is an appropriate threshold for 

identifying non-retail Customers.6 In 

addition, basing the standard on the 

number of orders that are entered in 

listed options for a qualified account(s) 

assures that Professional Customer 

account holders cannot inappropriately 

avoid the purpose of the rule by 

spreading their trading activity over 

multiple exchanges, and using an 

average number over a calendar month 

will prevent gaming of the 390 order 

threshold. The Exchange also proposes 

to make corresponding changes to Rule 

6.69 regarding the marking of orders. 

The Professional Customer definition 

proposed by the Exchange, including 

the 390 orders per day threshold, is 

similar to designations that have been 

adopted by all other options exchanges.7

The Exchange is not proposing at this 

time to revise any order execution or 

processing rules, including its priority 

rules, to change the treatment of 

Professional Customers.8 Instead, 

Professional Customer orders will be 

treated as Customer orders under 

Exchange rules for all purposes, except 

those related to order marking.9 As the 

only options Exchange to have not yet 

adopted the Professional Customer 

definition, the Exchange’s proposal will 

allow OTP Holders to mark their 

Professional Customer orders similarly 

regardless of whether the order is placed 

on the Exchange or another options 

exchange. Moreover, with the proposed 

Professional Customer designation in 

place, the Exchange’s rules will 

facilitate cross-market initiatives (such 

as harmonizing rules relating to Obvious 

Errors). 

The Exchange will announce by 

Trader Update when it will implement 

this proposed rule change and when the 

functionality to support the marking of 

Professional Customer orders is 

available. In order to provide sufficient 

time for OTP Holders to prepare any 

system changes, the date of 

implementation shall be no sooner than 

30 calendar days after the publication of 

the Trader Update. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 10 of the 

Act, in general, and furthers the 

objectives of Section 6(b)(5),11 in 

particular, in that it is designed to 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest. 

The Exchange believes that the 

proposed rule change, by defining 

Professional Customer, will remove 

impediments to, and perfect the 

mechanism of, a free and open market 

and a national market system, by 

providing consistent regulation for OTP 

Holders that are members of other SROs 

with analogous rules, thus allowing 

market participants to route orders to all 

markets using the same capacity. 

Further, the Exchange believes that, by 

harmonizing its rules with every other 

options market to add the term 

Professional Customer, it will promote 

just and equitable principles of trade by 

better allowing the market participants 

to be treated similarly across exchanges. 

In requiring market participants to 

identify their orders, the Exchange 

believes it promotes just and equitable 

principles of trade by allowing it a 

better understanding of the trading 

activity on its market. 

Finally, the Exchange believes that 

amending Rule 6.69 to conform with the 

addition of the Professional Customer 

designation will protect investors and 

the public interest by providing 

guidance to OTP Holders regarding the 

marking of Professional Customer 

orders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change is not designed to 

address any aspect of competition, 

whether between the Exchange and its 

competitors, or among market 

participants. Instead, the proposed rule 

change is designed to adopt a category 

of market participant on the same terms 

as that of every other options exchange. 

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 12 and Rule 


tkelley on DSK3SPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / Notices 70909 

13 17 CFR 240.19b–4(f)(6). 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). 

16 15 U.S.C. 78s(b)(2)(B). 17 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. 

19b–4(f)(6) thereunder.13 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 

proposed rule change has become 

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

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b4(f)(6)(iii),15 the Commission 

may 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 such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 16 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File No. SR– 

NYSEArca–2014–133 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–2014–133. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. 

The Commission will post all 

comments on the Commission’s Internet 

Web site (http://www.sec.gov/rules/

sro.shtml). Copies of the submission, all 

subsequent amendments, all written 

statements with respect to the proposed 

rule change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEArca–2014–133, and should be 

submitted on or before December 19, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28078 Filed 11–26–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73672; File No. SR–NYSE– 

2014–63] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change 

Amending Rules 311 and 313 To Add 

Limited Liability Companies as Eligible 

Member Organizations and Delineate 

the Information Limited Liability 

Companies Must Submit to the 

Exchange as Part of the Membership 

Process; Eliminate the Requirement 

That a Member Corporation Be Created 

or Organized, and Maintain Its 

Principal Place of Business, in the 

United States; and Make Additional 

Related Amendments To Update Its 

Membership Rules 

November 21, 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 

November 12, 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 

substantially 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rules 311 and 313 to add limited 

liability companies as eligible member 

organizations and delineate the 

information limited liability companies 

must submit to the Exchange as part of 

the membership process; eliminate the 

requirement that a member corporation 

be created or organized, and maintain 

its principal place of business, in the 

United States; and make additional 

related amendments to update its 

membership rules. 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. 


tkelley on DSK3SPTVN1PROD with NOTICES