40812 Federal Register / Vol. 82, No. 165 / Monday, August 28, 2017 / Notices 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6)(iii). 

5See Nasdaq Rule 4703(e) (defining Minimum 

Quantity). See also Securities Exchange Act Release 

No. 73959 (December 30, 2014), 80 FR 582 (January 

6, 2015) (order approving new optional 

functionality for Minimum Quantity Orders). See 

IEX Rule 11.190(b)(11) and Supplementary Material 

.03 (defining Minimum Quantity Orders and 

MinExec with Cancel Remaining and MinExec with 

AON Remaining). See also Securities Exchange Act 

Release No. 78101 (June 17, 2016), 81 FR 41141 

(June 23, 2016) (order approving the IEX exchange 

application, which included IEX’s Minimum 

Quantity Orders). See also IEX Rule 11.190(d)(3) 

(allowing the minimum quantity size of an order to 

be changed via a replace message). 

6See id. 

7The term ‘‘User’’ is defined as ‘‘any Member or 

Sponsored Participant who is authorized to obtain 

access to the System pursuant to Rule 11.3.’’ See 

Exchange Rule 1.5(ee). 

8The term ‘‘Non-Displayed’’ is defined as ‘‘[a]n 

instruction the User may attach to an order stating 

that the order is not to be displayed by the System 

on the EDGX Book.’’ See Exchange Rule 11.6(e)(2). 

9As discussed below, the Exchange also proposes 

to clarify within Rule 11.6(h) that a Minimum 

Quantity instruction may also be added to an order 

with a TIF of IOC. See e.g., Exchange Rules 

11.8(a)(3) and (c)(2) (specifying that the Minimum 

Quantity instruction may be included on Market 

Orders and ISOs with a TIF of IOC). 

10The term ‘‘System’’ is defined as ‘‘the 

electronic communications and trading facility 

designated by the Board through which securities 

orders of Users are consolidated for ranking, 

execution and, when applicable, routing away.’’ See 

Exchange Rule 1.5(cc). 

11Today, the System will aggregate multiple 

resting orders to satisfy the incoming order’s 

minimum quantity and a User cannot elect the 

incoming order to execute against a single resting 

contra-side order. 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on August 22, 

2017, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Contract 344 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2017–179, 

CP2017–280. 

Elizabeth A. Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2017–18129 Filed 8–25–17; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81457; File No. SR– 

BatsEDGX–2017–34] 

Self-Regulatory Organizations; Bats 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change to Rules 11.6, 

Definitions, 11.8, Order Types, and 

11.10, Order Execution 

August 22, 2017. 

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 August 

11, 2017, Bats EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) 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 

Exchange has designated this proposal 

as a ‘‘non-controversial’’ proposed rule 

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

of the Act 3 and Rule 19b–4(f)(6)(iii) 

thereunder,4 which renders it effective 

upon filing with the Commission. 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 filed a proposal to: (i) 

Add new optional functionality to 

orders that include the Minimum 

Execution Quantity instruction by 

amending paragraph (h) of Exchange 

Rule 11.6, Definitions; (ii) amend 

paragraph (b)(3) of Exchange Rule 11.8 

to specify that a Minimum Execution 

Quantity instruction may be included 

on a Limit Order with a TIF of IOC; and 

(iii) amend paragraph (e)(3) of Exchange 

Rule 11.10, Order Execution, to specify 

that a change to the minimum quantity 

of an order with a Minimum Execution 

Quantity instruction may be included in 

a Replace message. The proposed 

amendments are substantially similar to 

the rules of the Nasdaq Stock Market 

LLC (‘‘Nasdaq’’) and the Investors 

Exchange LLC (‘‘IEX’’).5

The text of the proposed rule change 

is available at the Exchange’s Web site 

at www.bats.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 

Exchange 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. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant parts of such 

statements. 

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to: (i) Add 

new optional functionality to orders that 

include the Minimum Execution 

Quantity instruction by amending 

paragraph (h) of Exchange Rule 11.6, 

Definitions; (ii) amend paragraph (b)(3) 

of Exchange Rule 11.8 to specify that a 

Minimum Execution Quantity 

instruction may be included on a Limit 

Order with a TIF of IOC; and (iii) amend 

paragraph (e)(3) of Exchange Rule 11.10, 

Order Execution, to specify that a 

change to the minimum quantity of an 

order with a Minimum Execution 

Quantity instruction may be included in 

a Replace message. These proposed 

amendments are substantially similar to 

the rules of Nasdaq and IEX.6

Exchange Rule 11.6(h), Proposed 

Individual Minimum Size 

The Exchange proposes to add new 

optional functionality that would 

enhance the utility of the Minimum 

Execution Quantity instruction by 

amending paragraph (h) of Exchange 

Rule 11.6, Definitions. In sum, the 

proposal would permit an incoming 

order with a Minimum Execution 

Quantity to forego executions where 

multiple resting orders could otherwise 

be aggregated to satisfy the order’s 

minimum quantity. 

A Minimum Execution Quantity 

enables a User 7 to specify a minimum 

share amount at which the order will 

execute. An order with a Minimum 

Execution Quantity will not execute 

unless the volume of contra-side 

liquidity available to execute against the 

order meets or exceeds the designated 

minimum. Specifically, Minimum 

Execution Quantity is an instruction a 

User may attach to an order with a NonDisplayed 8 instruction or a TIF of IOC9

requiring the System 10 to execute the 

order only to the extent that a minimum 

quantity can be satisfied by execution 

against a single order or multiple 

aggregated orders simultaneously.11

Today, an order with a Minimum 

Execution Quantity will execute upon 

entry against a single order or multiple 

orders if the sum of those orders is equal 

to or greater than its minimum quantity. 

An order with a Minimum Execution 

Quantity instruction may be partially 

executed upon entry so long as the 

execution size is equal to or exceeds the 

minimum quantity provided in the 

instruction. Any shares remaining after 

a partial execution will continue to be 

executed at a size that is equal to or 

exceeds the quantity provided in the 

instruction. Where the number of shares 


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12See Exchange Rule 11.8(a)(3). 

13See Exchange Rule 11.8(b)(3). 

14See Exchange Rule 11.8(c)(2). 

15See Exchange Rule 11.8(d)(2). 

16See Exchange Rule 11.8(f)(2). 

17The Commission has long recognized this 

concern: ‘‘[a]nother type of implicit transaction cost 

reflected in the price of a security is short-term 

price volatility caused by temporary imbalances in 

trading interest. For example, a significant implicit 

cost for large investors (who often represent the 

consolidated investments of many individuals) is 

the price impact that their large trades can have on 

the market. Indeed, disclosure of these large orders 

can reduce the likelihood of their being filled.’’ See 

Securities Exchange Act Release No. 42450 

(February 23, 2000), 65 FR 10577, 10581 (February 

28, 2000) (SR–NYSE–99–48). 

18See supra note 5. 

19 If no election is made, the System will 

aggregate multiple resting orders to satisfy the 

incoming order’s minimum quantity. 20The term ‘‘EDGX Book’’ is defined as ‘‘the 

System’s electronic file of orders.’’ See Exchange 

Rule 1.5(d). 

21See supra notes 11 through 16 for a description 

of the functionality associated with orders that may 

include a Minimum Execution Quantity. 

remaining after a partial execution are 

less than the quantity provided in the 

instruction, the Minimum Execution 

Quantity shall be equal to the number 

of shares remaining. The Minimum 

Execution Quantity instruction may be 

coupled with Market Orders with a TIF 

of IOC,12 Limit Orders with a NonDisplayed instruction 13 or TIF of IOC 

(as discussed below), Intermarket Sweep 

Orders (‘‘ISO’’) with a TIF of IOC,14

MidPoint Peg Orders,15 and 

Supplemental Peg Orders.16

The Exchange has observed that some 

market participants avoid sending large 

orders with a Minimum Execution 

Quantity instruction to the Exchange 

out of concern that such orders may 

interact with small orders entered by 

professional traders, possibly adversely 

impacting the execution of their larger 

order. Institutional orders are often 

much larger in size than the average 

order in the marketplace. To facilitate 

the liquidation or acquisition of a large 

position, market participants tend to 

submit multiple orders into the market 

that may only represent a fraction of the 

overall institutional position to be 

executed. Various strategies used by 

institutional market participants to 

execute large orders are intended to 

limit price movement of the security at 

issue. Executing in small sizes, even if 

in the aggregate it meets the order’s 

minimum quantity, may impact the 

market for that security such that the 

additional orders the market participant 

has yet to enter into the market may be 

more costly to execute. If an institution 

is able to execute in larger sizes, the 

contra-party to the execution is less 

likely to be a participant that reacts to 

short term changes in the stock price, 

and as such, the price impact to the 

stock may be less acute when larger 

individual executions are obtained.17 As 

a result, these orders are often executed 

away from the Exchange in dark pools 

or other exchanges that offer the same 

functionality as proposed herein,18 or 

via broker-dealer internalization. 

To attract larger orders with a 

Minimum Execution Quantity, the 

Exchange proposes to add new optional 

functionality that would enhance the 

utility of the Minimum Execution 

Quantity instruction. In sum, the 

proposal would permit a User to elect 

that its incoming order with a Minimum 

Execution Quantity execute solely 

against one or more resting individual 

orders, each of which must satisfy the 

order’s minimum quantity condition. In 

such case, the order would forego 

executions where multiple resting 

orders could otherwise be aggregated to 

satisfy the order’s minimum quantity, 

but do not individually satisfy the 

minimum quantity condition.19 As 

discussed above, under the current rule 

an order with a Minimum Execution 

Quantity will execute upon entry 

against any number of smaller contraside orders that, in aggregate, meet the 

minimum quantity set by the User. This 

default behavior will remain. For 

example, assume there are two orders to 

sell resting on the EDGX Book 20—the 

first for 300 shares and a second for 400 

shares, with the 300 share order having 

time priority ahead of the 400 share 

order. If a User entered an order with a 

Minimum Execution Quantity to buy 

1,000 shares at $10.00 with a minimum 

quantity of 500 shares, and the order 

was marketable against the two resting 

sell orders for 300 and 400 shares, the 

System would aggregate both sell orders 

for purposes of meeting the minimum 

quantity, thus resulting in executions of 

300 shares and then 400 shares 

respectively with the remaining 300 

shares of the an order with a Minimum 

Execution Quantity being posted to the 

EDGX Book with a minimum quantity 

restriction of 300 shares. 

The proposed new optional 

functionality will not allow aggregation 

of smaller executions to satisfy the 

minimum quantity of an incoming order 

with a Minimum Execution Quantity. 

Using the same scenario as above, but 

with the proposed new functionality 

and a Minimum Execution Quantity 

requirement of 400 shares selected by 

the User, the order with a Minimum 

Execution Quantity would not execute 

against the two sell orders because the 

300 share order with time priority at the 

top of the EDGX Book is less than the 

incoming order’s 400 share Minimum 

Execution Quantity. The new 

functionality will cause the order with 

a Minimum Execution Quantity to be 

cancelled or posted to the EDGX Book, 

Non-Displayed, in accordance with the 

characteristics of the underlying order 

type 21 when encountering an order with 

time priority that is of insufficient size 

to satisfy the minimum execution 

requirement. If posted, the order with a 

Minimum Execution Quantity will 

operate as it does currently and will 

only execute against individual orders 

that satisfy its minimum quantity as 

proposed herein. The Exchange notes 

that the User entering the order with a 

Minimum Execution Quantity has 

expressed its intention not to execute 

against liquidity below a certain 

minimum size, and therefore, cedes 

execution priority when it would lock 

an order against which it would 

otherwise execute if it were not for the 

minimum execution size restriction. 

The Exchange proposes to add language 

to paragraph (h) of Rule 11.6 to make 

clear that the order would cede 

execution priority in such in scenario. 

As amended, the description of 

Minimum Execution Quantity under 

paragraph (h) of Exchange Rule 11.6 

would set forth the default behavior of 

the Minimum Quantity instruction of 

executing upon entry against a single 

order or multiple aggregated orders 

simultaneously. Amended Rule 11.6(h) 

would set forth the proposed optional 

functionality where a User may 

alternatively specify that the incoming 

order’s minimum quantity condition be 

satisfied by each order resting on the 

EDGX Book that would execute against 

the order with the Minimum Execution 

Quantity instruction. If there are such 

orders, but there are also orders that do 

not satisfy the minimum quantity 

condition, the incoming order with the 

Minimum Execution Quantity 

instruction will execute against orders 

resting on the EDGX Book in accordance 

with Rule 11.9, Order Priority, until it 

reaches an order that does not satisfy 

the minimum quantity condition at 

which point it would be posted to the 

EDGX Book or cancelled in accordance 

with the terms of the order. If, upon 

entry, there are no orders that satisfy the 

minimum quantity condition resting on 

the EDGX Book, the order will either be 

posted to the EDGX Book or cancelled 

in accordance with the terms of the 

order. 

The Exchange also proposes to reprice incoming orders with a Minimum 

Execution Quantity instruction where 

that order may cross an order posted on 

the EDGX Book. Specifically, where 

there is insufficient size to satisfy an 


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22 ‘‘Locking Price’’ is defined as ‘‘[t]he price at 

which an order to buy (sell), that if displayed by 

the System on the EDGX Book, either upon entry 

into the System, or upon return to the System after 

being routed away, would be a Locking Quotation.’’ 

See Exchange Rule 11.6(f). 

23See Exchange Rule 11.6(l)(3). 

24See Nasdaq Rule 4703(e). See IEX Rule 

11.190(h)(2). 

25Orders will only post to the EDGX Book if they 

are designated with a TIF instruction that allows for 

posting. For example, an order a TIF of IOC or FOK 

will never post to the EDGX Book. 

26See supra note 5. 27See Exchange Rule 11.6(q)(1). 28See BZX Rule 11.9(c)(5) (stating that BZX will 

only honor a specified minimum quantity on BZX 

Only Orders that are non-displayed or IOCs). 

29See Exchange Rules 11.8(a)(1) and (b)(1). 30See Exchange Rule 11.6(o). 

31See Exchange Rule 11.6(m)(1). 

32The Exchange also proposes to amend this 

paragraph to specify that the Max Floor is 

associated with an order with a Reserve Quantity 

and to replace the phrase ‘‘and quantity terms’’ with 

the word ‘‘size’’. The Exchange believes these 

changes will add additional specificity to the rule 

and ensure the rule uses terminology consistent 

with the description of Replace messages and their 

impact on an order’s priority under Exchange Rule 

11.9(a)(4). 

33A change to the minimum quantity of an order 

via a Replace message will result in such order 

losing time priority as compared to other orders in 

the EDGX Book and the time stamp for such order 

being revised to reflect the time of the modification. 

34See IEX Rule 11.190(d)(3) (allowing a replace 

message to change the minimum quantity of a 

Minimum Quantity Order). 

35 15 U.S.C. 78f(b). 

36 15 U.S.C. 78f(b)(5). 

incoming order’s minimum quantity 

condition and that incoming order, if 

posted at its limit price, would cross an 

order(s) resting on the EDGX Book, the 

order with the minimum quantity 

condition will be re-priced to and 

ranked at the Locking Price.22 For 

example, an order to buy at $11.00 with 

a minimum quantity condition of 500 

shares is entered and there is an order 

resting on the EDGX Book to sell 200 

shares at $10.99. The resting order to 

sell does not contain sufficient size to 

satisfy the incoming order’s minimum 

quantity condition of 500 shares. The 

price of the incoming buy order, if 

posted to the EDGX Book, would cross 

the price of the resting sell order. In 

such case, to avoid an internally crossed 

book, the System will re-price the 

incoming buy order to $10.99, the 

Locking Price. This behavior is similar 

to how the Exchange currently reprices 

Non-Displayed orders that cross the 

Protected Quotation of an external 

market.23 In addition, both IEX and 

Nasdaq also re-price similar orders to 

avoid an internally crossed book.24

The rule would further be amended to 

account for the partial execution against 

an individual order in accordance with 

the proposed rule change. Specifically, 

paragraph (h) of Exchange Rule 11.6 

would further be amended to state that 

that an order with a Minimum 

Execution Quantity instruction may be 

partially executed so long as the 

execution size of the individual order or 

aggregate size of multiple orders, as 

applicable, are equal to or exceed the 

minimum quantity provided in the 

instruction. 

The Exchange also proposes to amend 

the description of the Minimum 

Execution Quantity instruction to clarify 

its operation upon order entry and when 

the order is posted to the EDGX Book. 

The Exchange proposes to clarify that 

upon entry, and by default, an order 

with a Minimum Execution Quantity 

will execute against a single order or 

multiple aggregated orders 

simultaneously or only against orders 

that individually satisfy the order’s 

minimum quantity condition, as 

proposed herein. Once posted to the 

EDGX Book,25 the order may only 

execute against individual incoming 

orders with a size that satisfies the 

minimum quantity condition. The 

Exchange also proposed to clarify that 

an order that includes a Minimum 

Execution Quantity instruction is not 

eligible to be routed to another Trading 

Center in accordance with Exchange 

Rule 11.11, Routing to Away Trading 

Centers. These proposed changes would 

add additional specificity to the 

operation of the Minimum Execution 

Quantity instruction and are consistent 

with similar functionality offered by IEX 

and Nasdaq.26

Exchange Rule 11.8(b)(3), Limit Order 

Clarification 

The Exchange also proposes to amend 

paragraph (b)(3) of Exchange Rule 11.8 

to specify that a Minimum Execution 

Quantity instruction may be included 

on a Limit Order with a TIF of IOC. 

Currently, paragraph (b)(3) of Exchange 

Rule 11.8 states that Minimum 

Execution Quantity instruction may be 

placed on a Limit Order with a NonDisplayed instruction. As stated above, 

the Minimum Execution Quantity 

instruction may be coupled with, among 

other order types, Market Orders with a 

TIF of IOC and ISOs with a TIF of IOC. 

A Limit Order with a TIF of IOC will 

never be displayed or posted on the 

EDGX Book because, by instruction, it is 

to only execute upon entry, route or 

cancel back to the User and will never 

be posted to the EDGX Book.27

Therefore, current functionality allows a 

Minimum Execution Quantity 

instruction to be included on a Limit 

Order with a TIF of IOC, as that order 

would not be displayed on the EDGX 

Book. The Exchange now seeks to add 

additional specificity to paragraph (b)(3) 

of Exchange Rule 11.6 to expressly state 

that a Minimum Execution Quantity 

instruction may be included on a Limit 

Order with a TIF of IOC. The Exchange 

notes that this is also consistent with 

the treatment of Minimum Quantity 

Orders on Bats BZX Exchange, Inc. 

(‘‘BZX’’).28

Exchange Rule 11.10(e)(3), Replace 

Messages 

The Exchange also proposes to amend 

paragraph (e)(3) of Rule 11.10, Order 

Execution, to specify that a change to 

the minimum quantity of an order with 

a Minimum Execution Quantity 

instruction may be included in a 

Replace message. The rule currently 

states that other than changing a Limit 

Order to a Market Order, only the price, 

Stop Price,29 the sell long indicator, 

Short Sale instruction,30 Max Floor 31

and quantity terms of the order may be 

changed with a Replace message.32 As 

amended, paragraph (e)(3) of Rule 11.10 

would also provide for a change to the 

minimum quantity of an order to be 

included in a Replace message.33 If a 

User desires to change any other terms 

of an existing order, the existing order 

must be cancelled and a new order must 

be entered. The Exchange notes that 

specifying within Rule 11.10(e)(3) that a 

change to the minimum quantity of an 

order may be included in a Replace 

message is consistent with current 

functionality offered by IEX.34

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 35 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 36

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, 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. 

Exchange Rule 11.6(h), Proposed 

Individual Minimum Size 

The proposed rule change would 

remove impediments to and promote 

just and equitable principles of trade 

because it would provide Users with 

optional functionality that enhances the 

use of the Minimum Execution Quantity 

instruction. The proposed change to the 

functioning of the Minimum Execution 

Quantity instruction will provide 

market participants, including 

institutional firms who ultimately 

represent individual retail investors in 


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37See Exchange Rule 11.8(b). 

38For example, the Exchange’s Post Only 

instruction. See Exchange Rule 11.6(n)(4). 

39As noted, the proposal is designed to attract 

liquidity to the Exchange by allowing market 

participants to designate a minimum size of a 

contra-side order to interact with, thus providing 

them with functionality available to them on dark 

markets. 

40See Exchange Rule 11.6(l)(3). 

41See Nasdaq Rule 4703(e). 

42See IEX Rule 11.190(h)(2). 

43See supra note 5. The Exchange also notes that 

a letter was submitted in strong support of Nasdaq 

at the time they proposed similar changes to the 

operation of their Minimum Quantity order 

attribute under Nasdaq Rule 4703(e). See letter to 

the Commission from James J. Angel, Associate 

Professor of Finance, Georgetown University, dated 

November 26, 2014. 

44See supra note 5. 

45See BZX Rule 11.9(c)(5) (stating that BZX will 

only honor a specified minimum quantity on BZX 

Only Orders that are non-displayed or IOCs). 

46See IEX Rule 11.190(d)(3). 

47See supra note 5. 

many cases, with better control over 

their orders, thereby providing them 

with greater potential to improve the 

quality of their order executions. 

Currently, the rule allows Users to 

designate a minimum acceptable 

quantity on an order that may aggregate 

multiple executions to meet the 

minimum quantity requirement. Once 

posted to the book, however, the 

minimum quantity requirement is 

equivalent to a minimum execution size 

requirement. The Exchange is now 

proposing to provide Users with control 

over the execution of their orders with 

a Minimum Execution Quantity 

instruction by allowing them an option 

to designate the minimum individual 

execution size upon entry. The control 

offered by the proposed change is 

consistent with the various types of 

control currently provided by exchange 

order types. For example, the Exchange 

and other exchanges offer limit orders, 

which allow a market participant 

control over the price it will pay or 

receive for a stock.37 Similarly, 

exchanges offer order types that allow 

market participants to structure their 

trading activity in a manner that is more 

likely to avoid certain transaction cost 

related economic outcomes.38

As discussed above, the functionality 

proposed herein would enable Users to 

avoid transacting with smaller orders 

that they believe ultimately increases 

the cost of the transaction. Because the 

Exchange does not have this 

functionality, market participants, such 

as large institutions that transact a large 

number of orders on behalf of retail 

investors, have avoided sending large 

orders to the Exchange to avoid 

potentially more expensive 

transactions.39 In this regard, the 

Exchange notes that the proposed new 

optional functionality may improve the 

Exchange’s market by attracting more 

order flow. Such new order flow will 

further enhance the depth and liquidity 

on the Exchange, which supports just 

and equitable principals of trade. 

Furthermore, the proposed modification 

to the Minimum Execution Quantity 

instruction is consistent with providing 

market participants with greater control 

over the nature of their executions so 

that they may achieve their trading goals 

and improve the quality of their 

executions. 

The Exchange also believes that repricing incoming orders with a 

Minimum Execution Quantity 

instruction where that order may cross 

an order posted on the EDGX Book 

promotes just and equitable principles 

of trade because it enables the Exchange 

to avoid an internally crossed book. The 

proposed re-pricing is also similar to 

how the Exchange currently reprices 

Non-Displayed orders that cross the 

Protected Quotation of an external 

market.40 In addition, both IEX and 

Nasdaq also re-price minimum quantity 

orders to avoid an internally crossed 

book. In certain circumstances, Nasdaq 

re-prices buy (sell) orders to one 

minimum price increment below 

(above) the lowest (highest) price of 

such orders.41 IEX re-prices nondisplayed orders, such as minimum 

quantity orders, that include a limit 

price more aggressive than the midpoint 

of the NBBO to the midpoint of the 

NBBO.42

Moreover, the proposed optional 

functionality for the Minimum 

Execution Quantity instruction is 

substantially similar to that offered by 

Nasdaq and IEX, both of which have 

been recently approved by the 

Commission.43 Lastly, the proposed 

clarifications of the handing [sic] of 

orders with a Minimum Execution 

Quantity upon entry and once posted to 

the EDGX Book would add additional 

specificity to the operation of the 

Minimum Execution Quantity 

instruction and are consistent with 

similar functionality offered by 

Nasdaq.44

Clarification to Exchange Rules 

11.8(b)(3) and 11.10(e)(3) 

The Exchange believes the proposed 

amendments to paragraph (b)(3) of Rule 

11.8 and paragraph (e)(3) of Rule 11.10 

are also consistent with the Act in that 

they will add additional specificity to 

the rules. In particular, the proposed 

amendments to paragraph (b)(3) to Rule 

11.8 would add additional specificity 

regarding the order type instructions 

that may be coupled with a Limit Order. 

The Exchange notes that this is also 

consistent with the treatment of 

Minimum Quantity Orders on BZX,45

thereby making the rule clearer and 

avoiding potential investor confusion. 

Also, the amendments to paragraph 

(e)(3) of Rule 11.10 will ensure the rule 

uses terminology consistent with the 

description of Replace messages and 

their impact on an order’s priority under 

Exchange Rule 11.9(a)(4). Also, the 

Exchange notes that specifying within 

Rule 11.10(e)(3) that a change to the 

minimum quantity of an order with a 

Minimum Execution Quantity 

instruction may be included in a 

Replace message is consistent with 

current functionality offered by IEX.46

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

On the contrary, the Exchange believes 

the proposed rule change promotes 

competition because it will enable the 

Exchange to offer functionality 

substantially similar to that offered by 

Nasdaq and IEX.47 In addition, the 

proposed amendments to paragraph 

(b)(3) of Rule 11.8 and paragraph (e)(3) 

of Rule 11.10 would not have any 

impact on competition as they simply 

add additional details to each rule and 

do not alter current System 

functionality. Therefore, the Exchange 

does not believe the proposed rule 

change will result in any burden on 

intermarket competition that is not 

necessary or appropriate 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 

No comments were solicited or 

received on the proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (A) Significantly affect 

the protection of investors or the public 

interest; (B) impose any significant 

burden on competition; and (C) 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 it has become effective 

pursuant to Section 19(b)(3)(A) of the 


asabaliauskas on DSKBBXCHB2PROD with NOTICES
40816 Federal Register / Vol. 82, No. 165 / Monday, August 28, 2017 / Notices 

48 15 U.S.C. 78s(b)(3)(A). 

49 17 CFR 240.19b–4. 

50 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. 

4Commentary .02 to NYSE Arca Equities Rule 

8.200 applies to Trust Issued Receipts that invest 

in ‘‘Financial Instruments.’’ The term ‘‘Financial 

Instruments,’’ as defined in Commentary .02(b)(4) to 

NYSE Arca Equities Rule 8.200, means any 

combination of investments, including cash; 

securities; options on securities and indices; futures 

contracts; options on futures contracts; forward 

contracts; equity caps, collars, and floors; and swap 

agreements. 

5On June 9, 2017, the Trust submitted to the 

Commission its draft registration statement on Form 

S–1 (the ‘‘Registration Statement’’) under the 

Securities Act of 1933 (15 U.S.C. 77a) (‘‘Securities 

Act’’). The Jumpstart Our Business Startups Act, 

enacted on April 5, 2012, added Section 6(e) to the 

Securities Act. Section 6(e) of the Securities Act 

Act 48 and paragraph (f)(6) of Rule 19b– 

4 thereunder,49 the Exchange has 

designated this rule filing as noncontroversial. The Exchange has given 

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. 

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: (1) Necessary or appropriate in 

the public interest; (2) for the protection 

of investors; or (3) 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– 

BatsEDGX–2017–34 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–BatsEDGX–2017–34. 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 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– 

BatsEDGX–2017–34 and should be 

submitted on or before September 18, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.50

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18127 Filed 8–25–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81453; File No. SR– 

NYSEArca–2017–88] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of Proposed 

Rule Change to List and Trade the 

Shares of the U.S. Equity Cumulative 

Dividends Fund—Series 2027 and the 

U.S. Equity Ex-Dividend Fund—Series 

2027 Under NYSE Arca Equities Rule 

8.200, Commentary .02 

August 22, 2017. 

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 August 

8, 2017, 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 list and 

trade the shares of the following under 

NYSE Arca Equities Rule 8.200, 

Commentary .02 (‘‘Trust Issued 

Receipts’’): The U.S. Equity Cumulative 

Dividends Fund—Series 2027 and the 

U.S. Equity Ex-Dividend Fund—Series 

2027. The proposed 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 list and 

trade shares (‘‘Shares’’) of the following 

under NYSE Arca Equities Rule 8.200, 

Commentary .02, which governs the 

listing and trading of Trust Issued 

Receipts: U.S. Equity Cumulative 

Dividends Fund—Series 2027 (the 

‘‘Dividend Fund’’) and U.S. Equity ExDividend Fund—Series 2027 (the ‘‘ExDividend Fund’’, and together with the 

Dividend Fund, the ‘‘Funds’’ and each, 

a ‘‘Fund’’).4

Each Fund will be a series of 

Metaurus Equity Component Trust (the 

‘‘Trust’’), a Delaware statutory trust.5


asabaliauskas on DSKBBXCHB2PROD with NOTICES