Federal Register / Vol. 80, No. 2 / Monday, January 5, 2015 / Notices 269 

14See id. at 68746. 

15See Notice, supra note 3, at 68746. 

16See id. Alternatively, the underwriter may, 

with the concurrence of the Exchange, determine to 

postpone and reschedule the IPO. See id. 

17See id. 

18The Exchange states that the information 

provided by the IPO Indicator is limited to the 

subscribing member firm’s orders. See id. 

19See Notice, supra note 3, at 68746. 

20See id. 

21 In approving 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. 78f(b)(5). 

23 15 U.S.C. 78f(b)(8). 

24See Notice, supra note 3 at 68746. 

25The Exchange notes, for example, that the IPO 

Indicator may help an underwriter to make a 

determination to launch an IPO at a time when the 

IPO security would likely pass the validation 

checks, which the Exchange believes could increase 

the likelihood of a fair and orderly launch of the 

IPO security. See id. 

26See Notice, supra note 3, at 68746. 

27See supra note 25. 

28 15 U.S.C. 78s(b)(2). 

29 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

once the underwriter informs the 

Exchange that it is ready to launch the 

IPO, the NASDAQ system calculates the 

Current Reference Price at that time (the 

‘‘Expected Price’’) and displays it to the 

underwriter.14 If the underwriter then 

approves proceeding, the NASDAQ 

system conducts two validation checks: 

(1) The NASDAQ system determines 

whether all market orders will execute 

in the cross; and (2) whether the 

Expected Price and the price calculated 

by the Cross differ by an amount in 

excess of the price band selected by the 

underwriter.15 According to the 

Exchange, if either of the validation 

checks fails, the security will not be 

released for trading and the Pre-Launch 

Period will continue until all 

requirements are met.16

The Exchange proposes to offer the 

IPO Indicator to provide information 

about the number and price at which 

shares of a member firm’s orders entered 

for execution in an IPO Halt Cross (‘‘IPO 

shares’’) would execute in an IPO if it 

were to price at the present time.17

Under the proposal, the IPO Indicator 

would be offered through the NASDAQ 

Workstation and would use the NOII 

information already currently available 

through a Workstation subscription 

together with the information about the 

member firm’s orders on NASDAQ.18

Under the proposal, the Exchange states 

that member firms using the IPO 

Indicator would be able to see the 

Current Reference Price, the number of 

paired shares, the number of imbalance 

shares, the total number of IPO shares 

the member firm has entered for 

execution in the IPO Halt Cross, the 

nature of such shares (buy or sell), and 

the number of IPO shares that would be 

executed in the Halt Cross at that time 

for each of those categories.19 In 

addition, the Exchange states that 

member firms using the IPO Indicator 

would also be able to see details about 

its IPO shares presented by individual 

orders or order blocks, which would 

include the number of IPO shares in a 

particular order or order block, the 

number and percentage of IPO shares of 

the order or order block that would be 

executed in the Halt Cross if it occurred 

at any given time in the process, based 

on the NOII disseminated every five 

seconds, and the price at which the 

order or order block was submitted.20

III. Discussion and Commission 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange.21 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,22 which requires, 

among other things, that the rules of a 

national securities exchange be 

designed to prevent fraudulent and 

manipulative acts and practices, 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, and 

Section 6(b)(8) of the Act,23 which 

requires that the rules of the exchange 

do not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

As described above, the Exchange 

proposes to adopt an IPO Indicator as a 

new feature to the NASDAQ 

Workstation. The Exchange believes the 

IPO Indicator would provide member 

firms with information consistent with 

what the Exchange currently 

disseminates during the IPO launch 

process, but as that information relates 

to a member firm’s orders and in greater 

detail.24 The Exchange further believes 

that IPO Indicator would provide 

member firms and underwriters with 

more information regarding their orders 

submitted for participation in an IPO 

Halt Cross, which the Exchange believes 

would allow them to make better 

informed investment decisions.25

The Commission notes that the 

Exchange is not proposing to increase 

the fee for usage of the NASDAQ 

Workstation in connection with the 

addition of the IPO Indicator feature. In 

addition, under the proposal, the 

information provided by the IPO 

Indicator would be limited to the 

subscribing member firm’s orders.26

Accordingly, the Commission believes 

that the proposed rule change adopting 

the IPO Indicator feature is designed to 

protect investors and the public interest 

by providing them with more 

information regarding their orders 

submitted for participation in an IPO 

Halt Cross. Further, the new IPO 

Indicator feature may also facilitate the 

fair and orderly launch of an IPO 

security.27

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,28 that the 

proposed rule change (SR–NASDAQ– 

2014–100) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30809 Filed 1–2–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73951; File No. SR–ICC– 

2014–23] 

Self-Regulatory Organizations; ICE 

Clear Credit LLC; Notice of Filing of 

Proposed Rule Change To Revise ICC 

End-of-Day Price Discovery Policies 

and Procedures 

December 29, 2014. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

18, 2014, ICE Clear Credit LLC (‘‘ICC’’) 

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 primarily by ICC. 

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 principal purpose of the 

proposed rule change is to remove the 

ability for Clearing Participants to 

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270 Federal Register / Vol. 80, No. 2 / Monday, January 5, 2015 / Notices 

3 15 U.S.C. 78q–1(b)(3)(F). 

4 Id. 

5 Id. 

submit end-of-day submissions for 

Single Name instruments in terms of 

spread and associated recovery rate. 

This revision does not require any 

changes to the ICC Clearing Rules. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, ICC 

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 these statements 

may be examined at the places specified 

in Item IV below. ICC has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of these statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

ICC proposes revising the ICC End-ofDay Price Discovery Policies and 

Procedures to remove the ability for 

Clearing Participants to submit end-ofday submissions for Single Name 

instruments in terms of spread and 

associated recovery rate. 

ICC believes such revisions will 

facilitate the prompt and accurate 

clearance and settlement of securities 

transactions and derivative agreements, 

contracts, and transactions for which it 

is responsible. The proposed revisions 

are described in detail as follows. 

ICC requires all Clearing Participants 

to provide end-of-day submissions for 

specific instruments related to their 

cleared open interest. ICC uses these 

submissions as inputs to its price 

discovery algorithm, which determines 

end-of-day levels. 

Despite the fact that ICC computes 

margin and guaranty fund requirements, 

and all other money movements, in 

price terms, it currently supports 

Clearing Participant submissions in 

terms of price (or the equivalent points 

upfront), or spread and associated 

recovery rate. The first step in the price 

discovery algorithm for Single Name 

instruments is to convert any 

submissions in terms of spread and 

associated recovery rate to the 

equivalent submission in price terms 

using the ISDA standard model. 

ICC is revising its End-of-Day Price 

Discovery Policies and Procedures to 

remove the ability for Clearing 

Participants to provide end-of-day 

submissions for Single Name 

instruments in terms of spread and 

associated recovery rate. Rather, ICC 

will require price (or the equivalent 

points upfront) submissions for all 

Single Name instruments. This change 

will result in the elimination of the use 

of the ISDA standard model to 

determine end-of-day prices for Single 

Name instruments. ICC also clarified 

language regarding its determination of 

implied recovery rates. There are no 

changes to ICC’s Clearing Rules as a 

result of these enhancements. 

Section 17A(b)(3)(F) of the Act 3

requires, among other things, that the 

rules of a clearing agency be designed to 

promote the prompt and accurate 

clearance and settlement of securities 

transactions, and to the extent 

applicable, derivative agreements, 

contracts and transactions and to 

comply with the provisions of the Act 

and the rules and regulations 

thereunder. ICC believes that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to ICC, in particular, to 

Section 17(A)(b)(3)(F),4 because ICC 

believes that the proposed rule change 

will assure the prompt and accurate 

clearance and settlement of securities 

transactions, derivatives agreements, 

contracts, and transactions, as the 

proposed revisions ensure ICC considers 

its Clearing Participants’ view of the 

price of a given Single Name 

instrument, without the use of a model 

to imply a view on price from a 

submitted view on spread and 

associated recovery rate, resulting in an 

end-of-day price that is not subject to 

any potential model limitations or 

assumptions. With this change, ICC 

seeks to follow a common industry 

practice adopted for Single Name 

instruments that have become distressed 

to avoid potential model limitations, 

namely the observed market transition 

to quoting and trading in price (or 

points upfront) terms. As such, the 

proposed change is designed to promote 

the prompt and accurate clearance and 

settlement of securities transactions, 

derivatives agreements, contracts, and 

transactions within the meaning of 

Section 17A(b)(3)(F) of the Act.5

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

ICC does not believe the proposed 

rule change would have any impact, or 

impose any burden, on competition. 

The elimination of spread submissions 

for Single Names instruments applies 

uniformly across all market participants. 

Therefore, ICC does not believe the 

proposed rule change imposes any 

burden on competition that is 

inappropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments relating to the 

proposed rule change have not been 

solicited or received. ICC will notify the 

Commission of any written comments 

received by ICC. 

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 (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 

such 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– 

ICC–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 20549–1090. 

All submissions should refer to File 

Number SR–ICC–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 

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Federal Register / Vol. 80, No. 2 / Monday, January 5, 2015 / Notices 271 

6 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. 

4At the time the current rule was approved, 

Exchange systems could not accept orders with a 

size greater than one million shares. See Securities 

Exchange Act Release No. 71331 (January 16, 2014), 

79 FR 3907 (January 23, 2014) (SR–NYSEArca– 

2014–92) [sic]. Exchange systems are now ready to 

accept orders up to five million shares. 

5The Exchange notes that the New York Stock 

Exchange, LLC (‘‘NYSE’’) supports the entry of 

orders up to 25,000,000 in size. See NYSE Rule 

1000. 

6 17 CFR 240.15c3–5. 

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

8 15 U.S.C. 78f(b)(5). 

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 Credit and on ICE 

Clear Credit’s Web site at https://www.

theice.com/clear-credit/regulation. 

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–ICC–2014–23 and should 

be submitted on or before January 26, 

2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30802 Filed 1–2–15; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73952; File No. SR– 

NYSEArca–2014–146] 

Self-Regulatory Organizations; NYSE 

Arca Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Equities Rules 7.32 in Order To 

Increase the Maximum Order Entry 

Size to Five Million Shares 

December 29, 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 December 

18, 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 and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Arca Equities Rules 7.32 in order 

to increase the maximum order entry 

size to five million shares. 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 

NYSE Arca Equities Rule 7.32 (‘‘Rule 

7.32’’) currently provides that orders 

entered with a size greater than one 

million shares shall be rejected. The 

Exchange proposes to amend Rule 7.32 

to increase the size of orders that may 

be entered on the Exchange. As 

proposed, Rule 7.32 would be amended 

to specify that orders entered with a size 

greater than five million shares would 

be rejected.4 The Exchange believes that 

the increased maximum order size 

would enable ETP Holders with orders 

sized larger than one million shares to 

enter a single order at the Exchange 

rather than have to break such order 

into separate orders of one million 

shares or less for purposes of order entry 

at the Exchange.5 The Exchange notes 

that ETP Holders entering such largesized orders would be subject to the 

market access control requirements set 

forth in Rule 15c3–5 under the Act 

(‘‘Rule 15c3–5’’) relating to the entry of 

orders.6 The Exchange also proposes, 

upon at least 24 hours advance notice to 

market participants, to decrease the 

maximum order size of five million 

shares on a security-by-security basis. 

Because of the technology changes 

associated with the proposed rule 

change, the Exchange proposes to 

announce the implementation date via 

Trader Update. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 7 of the Act, 

in general, and furthers the objectives of 

Section 6(b)(5),8 in particular, in that it 

is designed to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

Specifically, the Exchange believes that 

increasing the maximum order size 

would remove impediments to and 

perfect a national market system by 

increasing capacity and providing more 

efficient methods for ETP Holders to 

transmit large-sized orders to the 

Exchange. The Exchange believes that 

the proposed rule change would not be 

inconsistent with the public interest and 

the protection of investors because 

investors would not be harmed by the 

increase in the maximum size of orders 

that the Exchange would accept since 

ETP Holders entering such large-sized 

orders would continue to be subject to 

the market access control requirements 

of Rule 15c3–5. The Exchange further 

believes that the proposed ability for the 

Exchange to decrease the maximum 

order size on a security-by-security basis 

following notice to the market also 

would remove impediments and perfect 

the mechanism of a free and open 

market because it provides the Exchange 

with the flexibility to reduce order entry 

size to respond to a market event that 

may warrant a smaller order size entry 

for a symbol. The Exchange believes 

that providing at least 24 hours-notice 

would be consistent with the public 

interest and the protection of investors 

at is [sic] would provide time for ETP 

Holders to adjust their order entry for a 

symbol should such a decrease be 

warranted for a symbol. 

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