78930 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

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. 

4See Securities Exchange Act Release No. 58845 

(October 24, 2008), 73 FR 64379 (October 29, 2008) 

(SR–NYSE–2008–46). See also Securities Exchange 

Act Release Nos. 60756 (October 1, 2009), 74 FR 

51628 (October 7, 2009) (SR–NYSE–2009–100) 

(extending Pilot to November 30, 2009); 61031 

(November 19, 2009), 74 FR 62368 (November 27, 

2009) (SR–NYSE–2009–113) (extending Pilot to 

March 30, 2010); 61724 (March 17, 2010), 75 FR 

14221 (March 24, 2010) (SR–NYSE–2010–25) 

(extending Pilot to September 30, 2010); 62819 

(September 1, 2010), 75 FR 54937 (September 9, 

2010) (SR–NYSE–2010–61) (extending Pilot to 

January 31, 2011); 63616 (December 29, 2010), 76 

FR 612 (January 5, 2011) (SR–NYSE–2010–86) 

(extending Pilot to August 1, 2011); 64761 (June 28, 

2011), 76 FR 39147 (July 5, 2011) (SR–NYSE–2011– 

29) (extending Pilot to January 31, 2012); 66046 

(December 23, 2011), 76 FR 82340 (December 30, 

2011) (SR–NYSE–2011–65) (extending Pilot to July 

31, 2012); 67494 (July 25, 2012), 77 FR 45408 (July 

31, 2012) (SR–NYSE–2012–26) (extending Pilot to 

January 31, 2013); 68558 (January 2, 2013), 78 FR 

1288 (January 8, 2013) (SR–NYSE–2012–75) 

(extending Pilot to July 31, 2013); 69813 (June 20, 

2013), 78 FR 38753 (June 27, 2013) (SR–NYSE– 

2013–43) (extending Pilot to January 31, 2014); 

71345 (January 17, 2014), 79 FR 4221 (January 24, 

2014) (SR–NYSE–2014–01) (extending Pilot to July 

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, it has 

become effective pursuant to section 

19(b)(3)(A) of the Act 13 and Rule 19b– 

4(f)(6) thereunder.14

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

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–2014–145 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEARCA–2014–145. 

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 the 

filing also will be available for 

inspection and copying at the principal 

office of NYSE Arca. 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–2014–145 and should be 

submitted on or before January 21, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30589 Filed 12–30–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73919; File No. SR–NYSE– 

2014–71] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Extending the 

Operation of Its New Market Model 

Pilot, Until the Earlier of Securities and 

Exchange Commission Approval To 

Make Such Pilot Permanent or July 31, 

2015 

December 23, 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 December 

18, 2014, New York Stock Exchange 

LLC (‘‘NYSE’’ or ‘‘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 extend the 

operation of its New Market Model 

Pilot, currently scheduled to expire on 

December 31, 2014, until the earlier of 

Securities and Exchange Commission 

(‘‘Commission’’) approval to make such 

pilot permanent or July 31, 2015. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to extend the 

operation of its New Market Model Pilot 

(‘‘NMM Pilot’’),4 currently scheduled to 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 78931 

31, 2014); and 72627 (July 16, 2014), 79 FR 42598 

(July 22, 2014) (SR–NYSE–2014–33) (extending 

Pilot to December 31, 2014). 

5See SR–NYSEMKT–2014–109. 

6The information contained herein is a summary 

of the NMM Pilot. See supra note 4 for a fuller 

description. 

7See NYSE Rule 103. 

8See NYSE Rule 104. 

9See NYSE Rule 60; see also NYSE Rules 104 and 

1000. 

10See NYSE Rule 1000. 

11The Display Book system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

DMMs, contains the order information, and 

provides a mechanism to execute and report 

transactions and publish the results to the 

Consolidated Tape. The Display Book system is 

connected to a number of other Exchange systems 

for the purposes of comparison, surveillance, and 

reporting information to customers and other 

market data and national market systems. 

12See NYSE Rule 72(a)(ii). 

13See supra note 4. 

14 15 U.S.C. 78f(b). 

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

16 15 U.S.C. 78f(b)(8). 

expire on December 31, 2014, until the 

earlier of Commission approval to make 

such pilot permanent or July 31, 2015. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of NYSE MKT LLC.5

Background 6

In October 2008, the NYSE 

implemented significant changes to its 

market rules, execution technology and 

the rights and obligations of its market 

participants all of which were designed 

to improve execution quality on the 

Exchange. These changes are all 

elements of the Exchange’s enhanced 

market model. Certain of the enhanced 

market model changes were 

implemented through a pilot program. 

As part of the NMM Pilot, NYSE 

eliminated the function of specialists on 

the Exchange creating a new category of 

market participant, the Designated 

Market Maker or DMM.7 The DMMs, 

like specialists, have affirmative 

obligations to make an orderly market, 

including continuous quoting 

requirements and obligations to re-enter 

the market when reaching across to 

execute against trading interest. Unlike 

specialists, DMMs have a minimum 

quoting requirement 8 in their assigned 

securities and no longer have a negative 

obligation. DMMs are also no longer 

agents for public customer orders.9

In addition, the Exchange 

implemented a system change that 

allowed DMMs to create a schedule of 

additional non-displayed liquidity at 

various price points where the DMM is 

willing to interact with interest and 

provide price improvement to orders in 

the Exchange’s system. This schedule is 

known as the DMM Capital 

Commitment Schedule (‘‘CCS’’).10 CCS 

provides the Display Book® 11 with the 

amount of shares that the DMM is 

willing to trade at price points outside, 

at and inside the Exchange Best Bid or 

Best Offer (‘‘BBO’’). CCS interest is 

separate and distinct from other DMM 

interest in that it serves as the interest 

of last resort. 

The NMM Pilot further modified the 

logic for allocating executed shares 

among market participants having 

trading interest at a price point upon 

execution of incoming orders. The 

modified logic rewards displayed orders 

that establish the Exchange’s BBO. 

During the operation of the NMM Pilot, 

orders or portions thereof that establish 

priority 12 retain that priority until the 

portion of the order that established 

priority is exhausted. Where no one 

order has established priority, shares are 

distributed among all market 

participants on parity. 

The NMM Pilot was originally 

scheduled to end operation on October 

1, 2009, or such earlier time as the 

Commission may determine to make the 

rules permanent. The Exchange filed to 

extend the operation of the Pilot on 

several occasions in order to prepare a 

rule filing seeking permission to make 

the above described changes 

permanent.13 The Exchange is currently 

still preparing such formal submission 

but does not expect that filing to be 

completed and approved by the 

Commission before December 31, 2014. 

Proposal To Extend the Operation of the 

NMM Pilot 

The NYSE established the NMM Pilot 

to provide incentives for quoting, to 

enhance competition among the existing 

group of liquidity providers and to add 

a new competitive market participant. 

The Exchange believes that the NMM 

Pilot allows the Exchange to provide its 

market participants with a trading 

venue that utilizes an enhanced market 

structure to encourage the addition of 

liquidity, facilitate the trading of larger 

orders more efficiently and operates to 

reward aggressive liquidity providers. 

As such, the Exchange believes that the 

rules governing the NMM Pilot should 

be made permanent. Through this filing 

the Exchange seeks to extend the 

current operation of the NMM Pilot 

until July 31, 2015, in order to allow the 

Exchange time to formally submit a 

filing to the Commission to convert the 

pilot rules to permanent rules. 

The proposed change is not otherwise 

intended to address any other issues 

and the Exchange is not aware of any 

problems that member organizations 

would have in complying with the 

proposed change. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

section 6(b) of the Act,14 in general, and 

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

of the Act,15 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 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to, and perfect the 

mechanisms of, a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest and because it is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange believes the proposed 

rule change is designed to prevent 

fraudulent and manipulative acts and 

practices and to promote just and 

equitable principles of trade because it 

seeks to extend a pilot program that has 

already been approved by the 

Commission. The Exchange believes the 

proposed rule change is designed to 

facilitate transactions in securities and 

to remove impediments to, and perfect 

the mechanisms of, a free and open 

market and a national market system 

because the NMM Pilot provides its 

market participants with a trading 

venue that utilizes an enhanced market 

structure to encourage the addition of 

liquidity, facilitate the trading of larger 

orders more efficiently and operates to 

reward aggressive liquidity providers. 

Moreover, requesting an extension of 

the NMM Pilot will permit adequate 

time for: (i) The Exchange to prepare 

and submit a filing to make the rules 

governing the NMM Pilot permanent; 

(ii) public notice and comment; and (iii) 

completion of the 19b–4 approval 

process. Finally, the Exchange believes 

that it is subject to significant 

competitive forces, as described below 

in the Exchange’s statement regarding 

the burden on competition. For these 

reasons, the Exchange believes that the 

proposal is consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with section 6(b)(8) of 

the Act,16 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

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78932 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Notices 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). 

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

Exchange to give the Commission written notice of 

the Exchange’s intent to file the proposed rule 

change, along with a brief description and text of 

the proposed rule change, at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

20 17 CFR 240.19b–4(f)(6)(iii). 

21For purposes only of waiving the operative 

delay for this proposal, 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)(3)(C). 

23 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Exchange believes that extending the 

operation of the NMM Pilot will 

enhance competition among liquidity 

providers and thereby improve 

execution quality on the Exchange. The 

Exchange will continue to monitor the 

efficacy of the program during the 

proposed extended pilot period. 

Finally, the Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily favor competing venues. In such 

an environment, the Exchange must 

continually review, and consider 

adjusting the services it offers and the 

requirements it imposes to remain 

competitive with other U.S. equity 

exchanges. For the reasons described 

above, the Exchange believes that the 

proposed rule change reflects this 

competitive environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act 17 and Rule 19b–4(f)(6) 18

thereunder because the proposal does 

not: (i) Significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) by its 

terms, become operative for 30 days 

from the date on which it was filed, or 

such shorter time as the Commission 

may designate if consistent with the 

protection of investors and the public 

interest.19

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b– 

4(f)(6)(iii) 20 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay period so that the proposal may 

become operative before the pilot’s 

expiration. The Exchange stated that an 

immediate operative date is necessary in 

order to immediately implement the 

proposed rule change so that member 

organizations could continue to benefit 

from the pilot program without 

interruption after December 31, 2014. 

The Commission believes that waiver 

of the 30-day operative delay period is 

consistent with the protection of 

investors and the public interest. 

Specifically, the Commission believes 

that the proposal would allow the pilot 

to continue uninterrupted, thereby 

avoiding any potential investor 

confusion that could result from the 

temporary interruption in the pilot 

program. For these reasons, the 

Commission believes that waiving the 

30-day operative delay is consistent 

with the protection of investors and the 

public interest, and designates the 

proposed rule change to be operative on 

December 31, 2014.21

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.22

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–2014–71 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2014–71. 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 

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– 

2014–71 and should be submitted on or 

before January 21, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–30587 Filed 12–30–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73930; File No. SR–BATS– 

2014–072] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Related to Fees of BATS 

Exchange, Inc. 

December 23, 2014. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

17, 2014, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) 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 Exchange. The 

mstockstill on DSK4VPTVN1PROD with NOTICES