Federal Register / Vol. 79, No. 233 / Thursday, December 4, 2014 / Notices 72039 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). As required under Rule 

19b–4(f)(6)(iii), the Exchange provided the 

Commission with 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. 

21For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 22 15 U.S.C. 78s(b)(2)(B). 

23 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. 

proposed rule change has become 

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

of the Act 19 and Rule 19b–4(f)(6) 

thereunder.20

The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. The Exchange states that the 

proposed change will provide 

additional transparency to platinum and 

palladium pricing compared to the 

previous London Fix for several reasons. 

The Exchange represents that LME’s 

electronic price fixing processes will be 

fully transparent in real time to the 

platinum and palladium market 

participants and, at the close of each 

electronic fixing, to the general public. 

The Exchange represents that LME’s 

electronic price fixing processes also 

will be fully auditable by third parties 

because an audit trail exists from the 

beginning of each fixing session. 

Moreover, the Exchange states that the 

market operation, compliance, internal 

audit and third-party complaint 

handling capabilities of the LME will 

support the integrity of the LME AM 

and PM Fix. The Exchange represents 

that the number of platinum and 

palladium participants that initially are 

expected to participate in the 

LMEbullion fixing process 

(approximately ten LPPM members) 

exceeds the number of market 

participants determining the London 

Fix prior to December 1, 2014 (currently 

four LPPM fixing members), and will 

contribute to the integrity and reliability 

of the pricing process. 

The Commission believes that waiver 

of the operative delay is consistent with 

the protection of investors and the 

public interest. Waiver of the operative 

delay will allow the Trusts, whose 

Shares are actively traded, to use the 

LME Fix as the basis for calculating the 

NAV by December 1, 2014, thereby 

facilitating the transition to the new 

price mechanism without disruption in 

trading. Therefore, the Commission 

designates the proposed rule change to 

be operative upon filing.21

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) 22 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2014–135 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–2014–135. 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 will also 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–2014–135 and should be 

submitted on or before December 26, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–28473 Filed 12–3–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73703; File No. SR–NYSE– 

2014–59] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change 

Amending Rule 13 and Related Rules 

Governing Order Types and Modifiers 

To Clarify the Nature of Order Types 

November 28, 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 

November 14, 2014, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) 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 

Rule 13 and related rules governing 

order types and modifiers. 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. 

mstockstill on DSK4VPTVN1PROD with NOTICES

72040 Federal Register / Vol. 79, No. 233 / Thursday, December 4, 2014 / Notices 

4See Mary Jo White, Chair, Securities and 

Exchange Commission, Speech at the Sandler, 

O’Neill & Partners, L.P. Global Exchange and 

Brokerage Conference (June 5, 2014) (available at 

www.sec.gov/News/Speech/Detail/Speech/

1370542004312#.U5HI-fmwJiw). 

5See Letter from James Burns, Deputy Director, 

Division of Trading and Markets, Securities and 

Exchange Commission, to Jeffrey C. Sprecher, Chief 

Executive Officer, Intercontinental Exchange, Inc., 

dated June 20, 2014. 

6See Securities Exchange Act Release No. 71897 

(April 8, 2014), 79 FR 20953 (April 14, 2014) (SR– 

NYSE–2014–16) (amending rules governing pegging 

interest to conform to functionality that is available 

at the Exchange). 

7See, e.g., Securities Exchange Act Release Nos. 

68302 (Nov. 27, 2012), 77 FR 71658 (Dec. 3, 2012) 

(SR–NYSE–2012–65) (amending rules governing 

pegging interest to, among other things, make nonsubstantive changes, including moving the rule text 

from Rule 70.26 to Rule 13, to make the rule text 

more focused and streamlined) (‘‘2012 Pegging 

Filing’’), and 71175 (Dec. 23, 2013), 78 FR 79534 

(Dec. 30, 2013) (SR–NYSE–2013–21) (approval 

order for rule proposal that, among other things, 

amended Rule 70 governing Floor broker reserve equotes that streamlined the rule text without 

making substantive changes) (‘‘2013 Reserve eQuote Filing’’). 

8The Exchange notes that its affiliated exchange, 

NYSE MKT LLC has filed a proposed rule change 

with a similar restructuring of its respective order 

type rules to group order types and modifiers. See 

SR–NYSEMKT–2014–95. 

9The Exchange proposes to replace the term 

‘‘Display book’’ with the term ‘‘Exchange systems’’ 

when use of the term refers to the Exchange systems 

that receive and execute orders. The Exchange 

proposes to replace the term ‘‘Display Book’’ with 

the term ‘‘Exchange’s book’’ when use of the term 

refers to the interest that has been entered and 

ranked in Exchange systems. 

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 

On June 5, 2014, in a speech entitled 

‘‘Enhancing Our Market Equity 

Structure,’’ Mary Jo White, Chair of the 

Securities and Exchange Commission 

(‘‘SEC’’ or the ‘‘Commission’’) requested 

the equity exchanges to conduct a 

comprehensive review of their order 

types and how they operate in practice, 

and as part of this review, consider 

appropriate rule changes to help clarify 

the nature of their order types.4

Subsequent to the Chair’s speech, the 

SEC’s Division of Trading and Markets 

requested that the equity exchanges 

complete their reviews and submit any 

proposed rule changes by November 1, 

2014.5

The Exchange notes that it 

continually assesses its rules governing 

order types and undertook on its own 

initiative a review of its rules related to 

order functionality to assure that its 

various order types, which have been 

adopted and amended over the years, 

accurately describe the functionality 

associated with those order types, and 

more specifically, how different order 

types may interact. As a result of that 

review, the Exchange submitted a 

proposed rule change to delete rules 

relating to functionality that was not 

available.6 In addition, over the years, 

when filing rule changes to adopt new 

functionality, the Exchange has used 

those filings as an opportunity to 

streamline related existing rule text for 

which functionality has not changed.7

The Exchange is filing this proposed 

rule change to continue with its efforts 

to review and clarify its rules governing 

order types, as appropriate. Specifically, 

the Exchange notes that Rule 13 is 

currently structured alphabetically, and 

does not include subsection numbering. 

The Exchange proposes to provide 

additional clarity to Rule 13 by regrouping and re-numbering current rule 

text and making other non-substantive, 

clarifying changes. The proposed rule 

changes are not intended to reflect 

changes to functionality but rather to 

clarify Rule 13 to make it easier to 

navigate.8 In addition, the Exchange 

proposes to amend certain rules to 

remove references to functionality that 

is no longer operative. 

Proposed Rule 13 Restructure 

The Exchange proposes to re-structure 

Rule 13 to re-group existing order types 

and modifiers together along functional 

lines. 

Proposed new subsection (a) of Rule 

13 would set forth the Exchange’s order 

types that are the foundation for all 

other order type instructions, i.e., the 

primary order types. The proposed 

primary order types would be: 

• Market Orders. Rule text governing 

Market Orders would be moved to new 

Rule 13(a)(1). The Exchange proposes a 

non-substantive change to replace the 

reference to ‘‘Display Book’’ with a 

reference to ‘‘Exchange systems.’’ 9 The 

Exchange notes that it proposes to 

capitalize the term ‘‘Market Order’’ 

throughout new Rule 13. 

• Limit Orders. Rule text governing 

Limit Orders would be moved to new 

Rule 13(a)(2). The Exchange proposes a 

non-substantive change to capitalize the 

term ‘‘Limit Order,’’ and to shorten the 

definition in a manner that streamlines 

the rule text without changing the 

meaning of the rule. The Exchange notes 

that it proposes to capitalize the term 

‘‘Limit Order’’ throughout new Rule 13. 

The Exchange notes that it proposes 

to delete the definition of ‘‘Auto Ex 

Order’’ because all orders entered 

electronically at the Exchange are 

eligible for automatic execution in 

accordance with Rules 1000–1004 and 

therefore the Exchange does not believe 

that it needs to separately define an 

Auto Ex Order. Rather than maintain a 

separate definition, the Exchange 

proposes to specify in proposed Rule 

13(a) that all orders entered 

electronically at the Exchange are 

eligible for automatic execution 

consistent with the terms of the order 

and Rules 1000–1004. The Exchange 

notes that Rule 13 currently provides for 

specified instructions for orders that 

may not execute on arrival, even if 

marketable, e.g., a Limit Order 

designated ALO, or may only be eligible 

to participate in an auction, accordingly, 

the terms of the order also control 

whether a marketable order would 

automatically execute upon arrival. The 

Exchange further proposes to specify 

that interest represented manually by 

Floor brokers, i.e., orally bid or offered 

at the point of sale on the Trading Floor, 

is not eligible for automatic execution. 

The Exchange notes that the order types 

currently specified in the definition for 

auto ex order are already separately 

defined in Rule 13 or Rule 70(a)(ii) 

(definition of G order). 

Proposed new subsection (b) of Rule 

13 would set forth the existing Time in 

Force Modifiers that the Exchange 

makes available for orders entered at the 

Exchange. The Exchange proposes to: (i) 

Move rule text governing Day Orders to 

new Rule 13(b)(1), without any 

substantive changes to the rule text; (ii) 

move rule text governing Good til 

Cancelled Orders to new Rule 13(b)(2), 

without any substantive changes to the 

rule text; and (iii) move rule text 

governing Immediate or Cancel Orders 

to new Rule 13(b)(3) without any 

changes to rule text. The Exchange notes 

that these time-in-force conditions are 

not separate order types, but rather are 

modifiers to orders. Accordingly, the 

Exchange proposes to re-classify them 

as modifiers and remove the references 

to the term ‘‘Order.’’ In addition, as 

noted above, the Exchange proposes to 

capitalize the term ‘‘Limit Order’’ in 

Rule 13(b). 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 233 / Thursday, December 4, 2014 / Notices 72041 

10See Rule 123C.10 (‘‘Closings may be effectuated 

manually or electronically’’) and Rule 123D(1) 

(‘‘Openings may be effectuated manually or 

electronically’’). 

11The Exchange notes that because of technology 

changes associated with rejecting MPL Orders that 

have an MTV larger than the size of the order, the 

Exchange will announce by Trader Update when 

this element of the proposed rule change will be 

implemented. 

12See Rule 70.25 (Discretionary Instructions for 

Bids and Offers Represented via Floor Broker 

Agency Interest Files (e-QuotesSM)). 

13See Securities Exchange Act Release No. 57688 

(April 18, 2008), 73 FR 22194 at 22197 (April 24, 

2008) (SR–NYSE–2008–30) (order approving rule 

change that, among other things, adopted new 

Reserve Order for which the non-displayed portion 

of the order is eligible to participate in manual 

executions) (‘‘2008 Reserve Order Filing’’). 

14See 2013 Reserve e-Quote Filing, supra n. 7. 

15See Securities Exchange Act Release No. 58845 

(Oct. 24, 2008), 73 FR 64379 at 64384 (Oct. 29, 

2008) (SR–NYSE–2008–46) (order approving the 

Exchange’s New Market Model, including adopting 

a Non-Displayed Reserve Order that would not be 

eligible to participate in manual executions). 

16See 2013 Reserve e-Quote Filing, supra n. 7. 

17See 2008 Reserve Order Filing supra n. 13 at 

22196 (displayable portion of Reserve Order 

executed together with other displayable interest at 

a price point before executing with reserve portion 

of the order). 

Proposed new subsection (c) of Rule 

13 would specify the Exchange’s 

existing Auction-Only Orders. In 

moving the rule text, the Exchange 

proposes the following non-substantive 

changes: (i) Capitalize the terms ‘‘Limit 

Order,’’ ‘‘CO Order,’’ and ‘‘Market 

Order’’; (ii) move the rule text for CO 

Orders to new Rule 13(c)(1); (iii) rename 

a ‘‘Limit ‘At the Close’ Order’’ as a 

‘‘Limit-on-Close (LOC) Order’’ and move 

the rule text to new Rule 13(c)(2); (iv) 

rename a ‘‘Limit ‘On-the-Open’ Order’’ 

as a ‘‘Limit-on-Open (LOO) Order’’ and 

move the rule text to new Rule 13(c)(3); 

(v) rename a ‘‘Market ‘At-the-Close’ 

Order’’ as a ‘‘Market-on-Close (MOC) 

Order’’ and move the rule text to new 

Rule 13(c)(4); and (vi) rename a ‘‘Market 

‘On-the-Open’ Order’’ as a ‘‘Market-onOpen (MOO) Order’’ and move the rule 

text to new Rule 13(c)(5). 

Proposed new subsection (d) of Rule 

13 would specify the Exchange’s 

existing orders that include instructions 

not to display all or a portion of the 

order. The order types proposed to be 

included in this new subsection are: 

• Mid-point Passive Liquidity 

(‘‘MPL’’) Orders. Existing rule text 

governing MPL Orders would be moved 

to new Rule 13(d)(1) with nonsubstantive changes to capitalize the 

term Limit Order, update cross 

references, and refer to ‘‘Add Liquidity 

Only’’ as ALO, since ALO is now a 

separately defined term in new Rule 

13(e)(1). The Exchange also proposes to 

clarify the rule text by deleting the term 

‘‘including’’ from the phrase ‘‘[a]n MPL 

Order is not eligible for manual 

executions, including openings, reopenings, and closings,’’ because MPL 

Orders would not participate in an 

opening, re-opening, or closing that is 

effectuated electronically.10 The 

Exchange further proposes to make a 

substantive amendment to the rule text 

set forth in new Rule 13(d)(1)(C) to 

specify that Exchange systems would 

reject an MPL Order on entry if the 

Minimum Triggering Volume (‘‘MTV’’) 

is larger than the size of the order and 

would reject a request to partially cancel 

a resting MPL Order if it would result 

in the MTV being larger than the size of 

the order and make conforming changes 

to the existing rule text. The Exchange 

would continue to enforce an MTV 

restriction if the unexecuted portion of 

an MPL Order with an MTV is less than 

the MTV. The Exchange believes that 

this proposed rule change would 

prevent an entering firm from causing 

an MPL Order to have an MTV that is 

larger than the order, thereby bypassing 

contra-side interest that is larger than 

the size of the MPL Order.11 Finally, the 

Exchange proposes to make a nonsubstantive change to new Rule 

13(d)(1)(E) to replace the term 

‘‘discretionary trade’’ with ‘‘d-Quote,’’ 

because d-Quotes are the only type of 

Exchange interest that is eligible to 

include discretionary pricing 

instructions.12

• Reserve Orders. Existing rule text 

governing Reserve Orders would be 

moved to new Rule 13(d)(2) with nonsubstantive changes to capitalize the 

term ‘‘Limit Order’’ and hyphenate the 

term ‘‘Non-Displayed.’’ The Exchange 

proposes further non-substantive 

changes to the rule text governing 

Minimum Display Reserve Orders, 

which would be in new Rule 

13(d)(2)(C), to clarify that a Minimum 

Display Reserve Order would 

participate in both automatic and 

manual executions. This is existing 

functionality relating to Minimum 

Display Reserve Orders 13 and the 

proposed rule text aligns with Rule 

70(f)(i) governing Floor broker 

Minimum Display Reserve e-Quotes.14

Similarly, the Exchange proposes nonsubstantive changes to the rule text 

governing Non-Displayed Reserve 

Orders, which would be in new Rule 

13(d)(2)(D), to clarify that a NonDisplayed Reserve Order would not 

participate in manual executions. This 

is existing functionality relating to NonDisplayed Reserve Orders 15 and the 

proposed rule text aligns with Rule 

70(f)(ii) governing Non-Display Reserve 

eQuotes excluded from the DMM.16

Finally, in proposed new Rule 

13(d)(2)(E), the Exchange proposes to 

clarify that the treatment of reserve 

interest, which is available for execution 

only after all displayable interest at that 

price point has been executed, is 

applicable to all Reserve Orders, and is 

not limited to Non-Displayed Reserve 

Orders.17

Proposed new subsection (e) of Rule 

13 would specify the Exchange’s 

existing order types that, by definition, 

do not route. The order types proposed 

to be included in this new subsection 

are: 

• Add Liquidity Only (‘‘ALO’’) 

Modifiers. Existing rule text governing 

ALO modifiers would be moved to new 

Rule 13(e)(1) with non-substantive 

changes to capitalize the term ‘‘Limit 

Order’’ and update cross-references. 

Existing rule text that is being moved to 

new Rule 13(e)(1)(A) currently provides 

that Limit Orders designated ALO may 

participate in opens and closes, but that 

the ALO instructions would be ignored. 

Because Limit Orders designated ALO 

could also participate in re-openings, 

and the ALO instructions would 

similarly be ignored, the Exchange 

proposes to clarify new Rule 13(e)(1)(A) 

to provide that Limit Orders designated 

ALO could participate in openings, reopenings, and closings, but that the 

ALO instructions would be ignored. 

• Do Not Ship (‘‘DNS’’) Orders. 

Existing rule text governing DNS Orders 

would be moved to new Rule 13(e)(2) 

with non-substantive changes to 

capitalize the term ‘‘Limit Order’’ and 

replace the reference to ‘‘Display Book’’ 

with a reference to ‘‘Exchange systems.’’ 

• Intermarket Sweep Order. Existing 

rule text governing ISOs would be 

moved to new Rule 13(e)(3) with nonsubstantive changes to capitalize the 

term ‘‘Limit Order’’, update crossreferences, and replace the reference to 

‘‘Display Book’’ with a reference to 

‘‘Exchange’s book.’’ 

Proposed new subsection (f) of Rule 

13 would specify the Exchange’s other 

existing order instructions and 

modifiers, including: 

• Do Not Reduce (‘‘DNR’’) Modifier. 

Existing rule text governing DNR Orders 

would be moved to new Rule 13(f)(1) 

with non-substantive changes to 

capitalize the terms ‘‘Limit Order’’ and 

‘‘Stop Order.’’ In addition, the Exchange 

believes that because DNR instructions 

would be added to an order, DNR is 

more appropriately referred to as a 

modifier rather than as an order type. 

• Do Not Increase (‘‘DNI’’) Modifiers. 

Existing rule text governing DNI Orders 

would be moved to new Rule 13(f)(2) 

with non-substantive changes to 

capitalize the terms ‘‘Limit Order’’ and 

mstockstill on DSK4VPTVN1PROD with NOTICES

72042 Federal Register / Vol. 79, No. 233 / Thursday, December 4, 2014 / Notices 

18See Securities Exchange Act Release Nos. 

71330 (Jan. 16, 2014), 79 FR 3895 (Jan. 16, 

2014)[sic] (SR–NYSE–2013–71) (approval order for 

the Exchange’s adoption of the MPL Order); and 

67347 (July 3, 2012), 77 FR 40673 (July 10, 2012) 

(SR–NYSE–2011–55) (approval order for the 

Exchange’s Retail Liquidity Program, which 

adopted the new RPI). 

19For example, assume the best protected bid 

(‘‘PBB’’) is $10.00, the Exchange has pegging 

interest to buy at $9.99, an MPL Order priced at 

$9.98 and a Non-Displayed Reserve Order to buy 

priced at $9.97. Because the PBB is outside the 

specified price range of the pegging interest to buy, 

it would peg to the next available best-priced 

interest, which in this scenario would be the NonDisplayed Reserve Order to buy priced at $9.97. The 

pegging interest to buy would not peg to the MPL 

Order to buy priced at $9.98. 

20See FINRA Regulatory Notice 11–29, Answer 3 

(June 2011) (‘‘Generally, a ‘not held’ order is an 

unpriced, discretionary order voluntarily 

categorized as such by the customer and with 

respect to which the customer has granted the firm 

price and time discretion.’’). See also Definition of 

Market Not Held Order on Nasdaq.com Glossary of 

Stock Market Terms, available at http://

www.nasdaq.com/investing/glossary/m/market-notheld-order. 

21See FINRA OATS Frequently Asked 

Questions—Technical, at T21 (‘‘An order submitted 

by a customer who gives the broker discretion as 

to the price and time of execution is denoted as a 

‘‘Not Held’’ order.’’), available at http://

www.finra.org/Industry/Compliance/

MarketTransparency/OATS/FAQ/P085542. 

‘‘Stop Order.’’ In addition, the Exchange 

believes that because DNI instructions 

would be added to an order, DNI is 

more appropriately referred to as a 

modifier rather than as an order type. 

• Pegging Interest. Existing rule text 

governing Pegging Interest and related 

subsections would be moved to new 

Rule 13(f)(3) with one clarifying change 

to the existing rule text and one 

proposed clarifying addition to the rule 

text. Because Pegging Interest is 

currently available for e-Quotes and dQuotes only, the Exchange proposes to 

replace the term ‘‘can’’ with the term 

‘‘must’’ in new Rule 13(f)(3)(a)(i) to 

provide that Pegging Interest ‘‘must be 

an e-Quote or d-Quote.’’ In addition, the 

Exchange proposes to add rule text to 

new Rule 13(f)(3)(A)(iv)(a) to clarify the 

definition of ‘‘next best-priced available 

interest’’[sic] in that Rule. Specifically, 

the Exchange has recently adopted nondisplayed order types that are priced 

based on the PBBO, including MPL 

Orders, discussed above, and Retail 

Price Improvement Orders (‘‘RPI’’), 

defined in Rule 107C(a)(4).18 Because 

Pegging Interest would not peg to either 

MPL Orders or RPIs, the Exchange 

proposes to clarify that for purposes of 

new Rule 13(f)(3)(A)(iv)(a), the term 

next available best-priced interest refers 

to the highest-(lowest-) priced buy (sell) 

interest within the specified price range 

of pegging interest to buy (sell), 

including displayable bids (offers), NonDisplay Reserve Orders, Non-Display 

Reserve e-Quotes, odd-lot sized interest, 

and protected bids (offers) on away 

markets, but does not include nondisplayed interest that is priced based 

on the PBBO. The Exchange notes that 

this would be applicable regardless of 

whether an MPL Order or RPI is 

marketable.19

• Retail Modifiers. Existing rule text 

governing Retail Modifiers and related 

subsections would be moved to new 

Rule 13(f)(4) with non-substantive 

changes to update cross-references. 

• Self-Trade Prevention (‘‘STP’’) 

Modifier. Existing rule text governing 

STP Modifiers and related subsections 

would be moved to new Rule 13(f)(5) 

with non-substantive changes to 

capitalize the terms ‘‘Limit Orders,’’ 

‘‘Market Orders,’’ and ‘‘Stop Orders’’ 

and hyphenate the term ‘‘Self-Trade 

Prevention.’’ 

• Sell ‘‘Plus’’—Buy ‘‘Minus’’ 

Instructions. Existing rule text 

governing Sell ‘‘Plus’’—Buy ‘‘Minus’’ 

Orders would be moved to new Rule 

13(f)(6) with non-substantive changes to 

break the rule into subsections, 

capitalize the terms ‘‘Market Order,’’ 

‘‘Limit Order,’’ and ‘‘Stop Order,’’ and 

replace the references to Display Book 

with references to Exchange systems. In 

addition, the Exchange proposes to reclassify this as an order instruction 

rather than as a separate order. 

• Stop Orders. Existing rule text 

governing Stop Orders would be moved 

to new Rule 13(f)(7) with nonsubstantive changes to break the rule 

into subsections, capitalize the term 

‘‘Market Order,’’ and replace references 

to ‘‘Exchange’s automated order routing 

system’’ with references to ‘‘Exchange 

systems.’’ 

As part of the proposed restructure of 

Rule 13, the Exchange proposes to move 

existing rule text in Rule 13 governing 

the definition of ‘‘Routing Broker’’ to 

Rule 17(c), without any change to the 

rule text. The Exchange believes that 

Rule 17 is a more logical location for the 

definition of Routing Broker because 

Rule 17(c) governs the operations of 

Routing Brokers. 

In addition, the Exchange proposes to 

delete existing rule text in Rule 13 

governing Not Held Orders and add rule 

text relating to not held instructions to 

supplementary material .20 to Rule 13. 

Supplementary material .20 to Rule 13 

reflects obligations that members have 

in handling customer orders. Because 

not held instructions are instructions 

from a customer to a member or member 

organization regarding the handling of 

an order, and do not relate to 

instructions accepted by Exchange 

systems for execution, the Exchange 

believes that references to not held 

instructions are better suited for this 

existing supplementary material. 

Accordingly, the Exchange proposes 

to amend supplementary material .20 to 

Rule 13 to add that generally, an 

instruction that an order is ‘‘not held’’ 

refers to an unpriced, discretionary 

order voluntarily categorized as such by 

the customer and with respect to which 

the customer has granted the member or 

member organization price and time 

discretion. The Exchange believes that 

this proposed amendment aligns the 

definition of ‘‘not held’’ with guidance 

from the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) and other 

markets regarding not held 

instructions.20 The Exchange notes that 

the existing Rule 13 text regarding how 

to mark a Not Held Order, e.g., ‘‘not 

held,’’ ‘‘disregard tape,’’ ‘‘take time,’’ 

etc., are outdated references regarding 

order marking between a customer and 

a member or member organization. All 

Exchange members and member 

organizations that receive customer 

orders are subject to Order Audit Trail 

System (‘‘OATS’’) obligations, 

consistent with Rule 7400 Series and 

FINRA Rule 7400 Series, which require 

that order-handling instructions be 

documented in OATS. Among the 

order-handling instructions that can be 

captured in OATS is whether an order 

is not held.21 The Exchange believes 

that these OATS-related obligations now 

govern how a member or member 

organization records order-handling 

instructions from a customer and 

therefore the terms currently set forth in 

Rule 13 relating to Not Held Orders are 

no longer necessary. 

Finally, the Exchange proposes to 

amend Rule 70.25 governing d-Quotes 

to clarify that certain functionality set 

forth in the Rule is no longer available. 

Specifically, Rule 70.25(c)(ii) currently 

provides that a Floor broker may 

designate a maximum size of contra-side 

volume with which it is willing to trade 

using discretionary pricing instructions. 

Because this functionality is not 

available, the Exchange proposes to 

delete references to the maximum 

discretionary size parameter from Rules 

70.25(c)(ii) and (c)(v). In addition, the 

Exchange proposes to amend Rule 

70.25(c)(iv) to clarify that the 

circumstances of when the Exchange 

would consider interest displayed by 

other market centers at the price at 

which a d-Quote may trade are not 

limited to determining when a dQuote’s minimum or maximum size 

range is met. Accordingly, the Exchange 

proposes to delete the clause ‘‘when 

determining if the d-Quote’s minimum 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 233 / Thursday, December 4, 2014 / Notices 72043 

22 15 U.S.C. 78f(b). 

23 15 U.S.C. 78f(b)(5). 

24See supra nn. 13–18. 25 17 CFR 200.30–3(a)(12). 

and/or maximum size range is met.’’ 

The Exchange believes that the 

proposed changes to Rule 70.25(c) will 

provide clarity and transparency 

regarding the existing functionality 

relating to d-Quotes at the Exchange. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),22 in general, and furthers the 

objectives of Section 6(b)(5),23 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. Specifically, the 

Exchange believes that the proposed 

restructuring of Rule 13, to group 

existing order types to align by 

functionality, would remove 

impediments to and perfect the 

mechanism of a free and open market by 

ensuring that members, regulators, and 

the public can more easily navigate the 

Exchange’s rulebook and better 

understand the order types available for 

trading on the Exchange. In addition, 

the Exchange believes that the proposed 

revisions to Rule 13 promote clarity 

regarding existing functionality that has 

been approved in prior rule filings, but 

which may not have been codified in 

rule text.24 Moreover, the Exchange 

believes that moving rule text defining 

a Routing Broker to Rule 17 represents 

a more logical location for such 

definition, thereby making it easier for 

market participants to navigate 

Exchange rules. Likewise, the Exchange 

believes the proposed changes to ‘‘Not 

Held Order,’’ to move it to 

supplementary material .20 to Rule 13 

and revise the rule text to conform with 

guidance from FINRA and OATS 

requirements, would remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system by 

applying a uniform definition of not 

held instructions across multiple 

markets, thereby reducing the potential 

for confusion regarding the meaning of 

not held instructions. 

The Exchange further believes that the 

proposed amendment regarding MPL 

Orders to reject both MPL Orders with 

an MTV larger than the size of the order 

and instructions to partially cancel an 

MPL Order that would result in an MTV 

larger than the size of the order would 

remove impediments to and perfect the 

mechanism of a free and open market 

and national market system in general 

because it could potentially reduce the 

ability of a member organization from 

using MPL Orders to bypass contra-side 

interest that may be larger than the size 

of the MPL Order. 

Finally, the Exchange believes that 

the proposed changes to Rule 70.25(c) 

would remove impediments to and 

perfect the mechanism of a free and 

open market and national market system 

in general because it assures that the 

Exchange’s rules align with the existing 

functionality available at the Exchange 

for d-Quotes. 

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 re-structure Rule 13 and remove 

rule text that relates to functionality that 

is no longer operative, thereby reducing 

confusion and making the Exchange’s 

rules easier to 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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days of such date (i) as the 

Commission may designate 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– 

NYSE–2014–59 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–NYSE–2014–59. 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 

a.m. and 3 p.m. Copies of such filing 

also will be available for inspection and 

copying at the principal office of the 

Exchange. All comments received will 

be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–NYSE– 

2014–59 and should be submitted on or 

before December 26, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–28476 Filed 12–3–14; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on DSK4VPTVN1PROD with NOTICES