Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 42861 

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

2 17 CFR 240.19b–4. 

DATES: Date of notice required under 39 

U.S.C. 3642(d)(1): September 12, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

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

3642 and 3632(b)(3), on September 6, 

2017, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Contract 349 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2017–185, 

CP2017–286. 

Elizabeth A. Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2017–19270 Filed 9–11–17; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail Express 

Negotiated Service Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of notice required under 39 

U.S.C. 3642(d)(1): September 12, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

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

3642 and 3632(b)(3), on September 6, 

2017, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Express Contract 50 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2017–190, 

CP2017–291. 

Elizabeth A. Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2017–19275 Filed 9–11–17; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail and 

First-Class Package Service 

Negotiated Service Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of notice required under 39 

U.S.C. 3642(d)(1): September 12, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

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

3642 and 3632(b)(3), on September 6, 

2017, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail & First-Class Package Service 

Contract 54 to Competitive Product List. 

Documents are available at 

www.prc.gov, Docket Nos. MC2017–192, 

CP2017–293. 

Elizabeth A. Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2017–19277 Filed 9–11–17; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail 

Negotiated Service Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of notice required under 39 

U.S.C. 3642(d)(1): September 12, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

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

3642 and 3632(b)(3), on September 6, 

2017, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Contract 352 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2017–188, 

CP2017–289. 

Elizabeth A. Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2017–19273 Filed 9–11–17; 8:45 am] 

BILLING CODE 7710–12–P 

POSTAL SERVICE 

Product Change—Priority Mail 

Negotiated Service Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of notice required under 39 

U.S.C. 3642(d)(1): September 12, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

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

3642 and 3632(b)(3), on September 6, 

2017, it filed with the Postal Regulatory 

Commission a Request of the United 

States Postal Service to Add Priority 

Mail Contract 348 to Competitive 

Product List. Documents are available at 

www.prc.gov, Docket Nos. MC2017–184, 

CP2017–285. 

Elizabeth A. Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2017–19269 Filed 9–11–17; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81539; File No. SR– 

NYSEArca–2017–93] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt Commentary 

.06 to NYSE Arca Rule 6.91–O To 

Enhance the Price Protections for 

Complex Orders Executed on the 

Exchange 

September 6, 2017. 

Pursuant to the provisions of 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 August 25, 2017, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Commission is publishing this notice to 


pmangrum on DSK3GDR082PROD with NOTICES1
42862 Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 

3Rule 6.62–O(e) defines a Complex Order as any 

order involving the simultaneous purchase and/or 

sale of two or more different option series in the 

same underlying security, for the same account, in 

a ratio that is equal to or greater than one-to-three 

(.333) and less than or equal to three-to-one (3.00) 

and for the purpose of executing particular 

investment strategy. Per Rule 6.91–O, an ECO is a 

Complex Order that has been entered into the NYSE 

Arca System (‘‘System’’) for possible execution. See 

Rule 6.91–O(a). 

4See Commentary .05 to Rule 6.91–O (providing 

for the rejection of ECOs that are priced away from 

the current market by a ‘‘Specified Amount,’’ which 

Specified Amount varies depending on the smallest 

MPV of any leg in the ECO) (the ‘‘Price Protection 

Filter’’ or ‘‘Filter’’) . 

5See proposed Commentary .06 to Rule 6.91–O, 

which would provide that the Exchange would 

reject any incoming ECO that has a strategy 

described in paragraphs (a)(1)–(3) of proposed 

Commentary .06 to Rule 6.91–O. Because 

Reasonability Checks would be performed before 

the Price Protection Filter, the proposed rule text 

would provide that ‘‘[a]ny incoming Electronic 

Complex Order that passes this Reasonability Check 

would still be subject to the Price Protection Filter, 

per Commentary .05(b) of this Rule.’’ See id. 

6See e.g., ISE Rule 722, Supplementary Material 

.07(Price limits for complex orders and quotes). The 

Exchange notes that, as discussed herein, the 

proposed Reasonability Checks are similar to those 

initially adopted by ISE and do not include a later 

adopted pre-set value ‘‘buffer.’’ See infra nn. 12 and 

15 [sic]. Moreover, because the Exchange does not 

support ECOs entered as market orders, the 

Exchange has not adopted price checks related to 

such orders (which orders ISE supports). See e.g., 

ISE Rule 722, Supplementary Material .07(c)(1), (3). 

The Exchange also notes that the Chicago Board 

Options Exchange, Inc. (‘‘CBOE’’) likewise includes 

complex strategy price checks, which cover more 

strategies than proposed herein, but are nonetheless 

designed to accomplish the same goal of avoiding 

execution of erroneously priced complex orders. 

See CBOE Rule 6.53C, Interpretations and Policies 

.08 (Price Check Parameters). 

7See proposed Commentary .06(a)(1) to Rule 

6.91–O. 

8See Securities Exchange Act Release No. 71406 

(January 27, 2014), 79 FR 5495, 5496 (January 31, 

2014) (SR–ISE–2014–05) (‘‘ISE Price Reasonability 

Filing’’) (adopting ‘‘minimum net price’’ protection 

feature, providing that the ISE system would ‘‘reject 

any complex order strategy where all legs are to buy 

if it is entered at a price that is less than the 

minimum price, which is calculated as the sum of 

the ratio on each leg of the complex order 

multiplied by $0.01 per leg (e.g., an order to buy 

2 calls and buy 1 put would have a minimum price 

of $0.03)’’). 

9See proposed Commentary .06(a)(2) to Rule 

6.91–O. 

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 adopt 

Commentary .06 to Rule 6.91–O 

(Electronic Complex Order Trading) to 

enhance the price protections for 

Complex Orders executed on the 

Exchange. 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 

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 aspects 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 is proposing to adopt 

Commentary .06 to Rule 6.91–O to 

enhance the price protections applicable 

to Electronic Complex Orders (or 

‘‘ECOs’’).3

The Exchange currently provides 

price protection to ECOs, which is 

designed to prevent the execution of 

orders at prices that are priced a certain 

percentage away from the current 

market and, therefore, are potentially 

erroneous.4 The Exchange proposes an 

additional price protection that would 

be another check on whether an ECO’s 

limit price is correctly aligned to the 

complex strategy and would reject 

erroneously priced incoming ECOs (the 

‘‘Reasonability Checks’’).5 As discussed 

herein, the proposed price protections 

are materially identical to price 

protections available on other options 

exchanges, including Nasdaq ISE, LLC 

(‘‘ISE’’).6

First, the Exchange proposes 

Commentary .06(a)(1) to Rule 6.91–O, 

pursuant to which, upon entry into the 

System, the Exchange would reject any 

incoming order for a complex strategy 

where all legs are to sell (buy) if it is 

entered at a price that is less (more) than 

the minimum (maximum) price, which 

is calculated as the sum of the ratio on 

each leg of the Complex Order 

multiplied by $0.01 (¥$0.01) per leg 

(e.g., an order to sell (buy) 2 calls and 

sell (buy) 1 put would have a minimum 

(maximum) price of $0.03 (¥$0.03)).7

For example, an order to sell 2 calls 

and sell 1 put would have a minimum 

net credit price of $0.03. If such an 

order were entered at a price of $0.02, 

it would not be executable, as a price of 

zero would have to be assigned to one 

of the legs of the order. As proposed, 

this order would be rejected. 

As another example, if a market 

participant is entering the following ‘‘all 

sell’’ complex strategy for a debit: 

• Leg A: 100 × 0.01 ¥ 0.02 × 100 

• Leg B: 100 × 0.01 ¥ 0.02 × 100 

• Order 1: Sell1 Leg A, Sell 2 Leg B; Net 

price: ¥ $0.03 

Result: As proposed, Order 1 would 

be rejected because it is priced less than 

the minimum order price of $0.03. 

Based on each individual leg trading for 

at least $0.01, this complex strategy 

would never trade at a net credit price 

of less than $0.03. Thus, any sell order 

for this strategy with a limit price less 

than $0.03 would be rejected. 

If, for example, a market participant is 

entering the following ‘‘all buy’’ 

complex strategy: 

• Leg A: 100 × 0.01 ¥ 0.02 × 100 

• Leg B: 100 × 0.01 ¥ 0.02 × 100 

• Order 1: Buy Leg A, Buy 2 Leg B; Net 

price: ¥ $0.02 

Result: As proposed, Order 1 would 

be rejected because it is priced greater 

than the maximum net debit price of 

¥$0.03 (and only orders priced at 

¥$0.03 or less would be accepted). 

Because debit orders are entered into 

the Exchange System as a negative 

value, the ‘‘maximum’’ price check for 

buy orders is effectively a check for the 

minimum order price. Here, Order 1 @

¥$0.02 would represent an order to buy 

for a net debit price of $0.02, and 

therefore would be rejected. 

The Exchange notes that the price 

check in proposed Commentary .06(a)(1) 

to Rule 6.91–O is materially identical to 

price protections available on at least 

one other options exchange, ISE.8

Second, the Exchange proposes 

Commentary .06(a)(2) to Rule 6.91–O, 

pursuant to which, upon entry into the 

System, the Exchange would reject any 

incoming order for a vertical spread 

strategy (i.e., an order to sell a call (put) 

option and to buy another call (put) 

option in the same security with the 

same expiration but at a higher (lower) 

strike price) when entered with a net 

debit price of ¥$0.01 or less.9

For example, if a market participant is 

entering the following vertical call 

credit spread for a debit: 

• Leg A: April SPY 240 Call: 100 × 1.72 

¥ 1.73 × 100 

• Leg B: April SPY 241 Call: 100 × 1.36 

¥ 1.37 × 100 

• Order 1: Sell 1 Leg A, Buy 1 Leg B; 

Quantity 50; Net price: $ ¥ 0.35 

Result: As proposed, Order 1 would 

be rejected because it priced less than or 

equal to ¥$0.01 (i.e., it has a negative 

limit price). The Exchange notes that the 

lower strike call will always be more 


pmangrum on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 42863 

10The principle behind this check is based on the 

standard trading principle of ‘‘buy low, sell high.’’ 

The ability to buy stock at a lower price is more 

valuable than the ability to buy stock at a higher 

price, and thus a call with a lower strike price has 

more value, and thus is more expensive, than a call 

with a higher strike price. Similarly, the ability to 

sell stock at a higher price is more valuable than 

the ability to sell stock at a lower price, and thus 

a put with a higher strike price has more value, and 

thus is more expensive, than a put with a lower 

strike price. 

11See supra note 9 [sic], ISE Price Reasonability 

Filing (providing that, subject to certain limitations, 

the ISE system would ‘‘reject a vertical spread order 

(i.e., an order to buy a call (put) option and to sell 

another call (put) option in the same security with 

the same expiration but at a higher (lower) strike 

price) when entered with a net price of less than 

zero’’). The Exchange notes that ISE amended 

Supplementary Material .07(c)(1) to ISE Rule 722 to 

add a ‘‘pre-set value’’ less than zero to allow a 

buffer within which certain orders would not be 

rejected. See, e.g., See Securities Exchange Act 

Release No. 72254 (May 27, 2014), 79 FR 31372, 

31373 (June 2, 2014) (SR–ISE–2014–26) (‘‘ISE Price 

Reasonability Modification Filing’’). The Exchange 

has opted to hard code the reject value as $¥0.01, 

which aligns with the ISE Price Reasonability Filing 

and, would nonetheless operate in a manner similar 

to ISE’s current rule, notwithstanding the ‘‘buffer.’’ 

12See proposed Commentary .06(a)(3) to Rule 

6.91–O. 

13The principle behind this check is based on the 

general concept that locking in a price further into 

the future involves more risk for the buyer and 

seller and thus is more valuable, making an option 

(call or put) with a farther expiration more 

expensive than an option with a nearer expiration. 

This is similar, for example, to interest rates for 

mortgages: In general, an interest rate on a 30-year 

mortgage is higher than the interest rate on a 15- 

year mortgage due to the risk of potential interest 

rate changes over the longer period of time to both 

the mortgagor and mortgagee. 

14See, e.g., ISE Rule 722, Supplementary Material 

.07(c)(3) (providing, in part, that the ISE system will 

‘‘reject a calendar spread order (i.e., an order to buy 

a call (put) option with a longer expiration and to 

sell another call (put) option with a shorter 

expiration in the same security at the same strike 

price) when entered with a net price of less than 

zero (minus a pre-set value).’’ See also supra note 

12 [sic], ISE Price Reasonability Modification Filing 

(adopting ISE Rule 722, Supplementary Material 

.07(c)(2)). Rather than utilize a ‘‘pre-set value’’ (or 

buffer), the Exchange has opted to hard code the 

reject value as $¥0.01. See id. 

15See proposed Commentary .06(a)(3)(i) to Rule 

6.91–O. 

16The Exchange has not similarly retained 

discretion to deactivate the Reasonability Checks 

for minimum price and vertical spreads because 

corporate actions will not create a scenario where 

a lower strike call would be cheaper than a higher 

strike call, or a higher strike put will be cheaper 

than a lower strike put. 

17See, e.g., Rules 6.8–O (regarding position 

limits); 6.37A–O (regarding maximum quotation 

spreads); 6.60–O (regarding price protection for 

orders); 6.61–O (regarding price protection for 

Market Maker quotes) and Commentary .05 to Rule 

6.91–O (regarding the Price Protection Filter for 

ECOs). 

18See proposed Commentary .06(a)(3)(i) to Rule 

6.91–O. 

19See, e.g., CBOE Rule 6.53C, Interpretations and 

Policies .08(c)(6) (excluding from debit/credit 

reasonability checks ‘‘orders routed from a PAR 

workstation or order management terminal’’ 

because such orders would be subject to manual 

handling). The Exchange notes that CBOE’s 

exclusion of complex orders entered on the floor 

from its debit/credit reasonability checks is not 

limited to calendar spreads but applies to all such 

orders entered from the floor of the CBOE. 

20See proposed Commentary .06(b) to Rule 6.91– 

O; see also supra note 6 [sic]. 

21 15 U.S.C. 78f(b). 

22 15 U.S.C. 78f(b)(5). 

expensive than the higher strike call 

within the same expiration.10 Thus, 

entering this sell order with a negative 

limit price would result in it being 

rejected. 

The Exchange notes that the price 

check in proposed Commentary .06(a)(2) 

to Rule 6.91–O is materially identical to 

price protections available on at least 

one other options exchange, ISE.11

Finally, upon entry into the System, 

the Exchange proposes to reject any 

incoming order for a credit calendar 

spread strategy (i.e., an order to sell a 

call (put) option with a longer 

expiration and to buy another call (put) 

option with a shorter expiration in the 

same security at the same strike price) 

when entered with a net price of 

¥$0.01 or less.12

For example, if a market participant is 

entering the following calendar credit 

spread for a debit: 

• Leg A: May SPY 240 Call: 100 × 3.41 

¥ 3.43 × 100 

• Leg B: April SPY 240 Call: 100 × 1.72 

¥ 1.73 × 100 

• Order 1: Sell 1 Leg A, Buy 1 Leg B; 

Quantity: 50; Net price: ¥$1.68 

Result: As proposed, Order 1 would 

be rejected because it is priced less than 

or equal to ¥$0.01. The Exchange notes 

that the further out expiring call being 

sold will always be more expensive than 

a nearer expiring call being bought at 

the same strike price, and should always 

generate a credit.13 Thus, any order to 

sell the far expiration and buy the near 

expiration entered with a price of ¥0.01 

or less would result in this order being 

rejected. 

The Exchange notes that the price 

check in proposed Commentary .06(a)(3) 

to Rule 6.91–O is materially identical to 

price protections available on at least 

one other options exchange, ISE.14

Regarding calendar spread orders, the 

Exchange also proposes to retain 

discretion to deactivate this price check 

in the interest of fair and orderly 

markets.15 For example, the Exchange 

may deactivate this price check if there 

is a corporate action in a complex 

symbol that would result in an 

otherwise valid strategy being rejected 

by the proposed check.16 The Exchange 

believes this discretion to deactivate the 

Reasonability Check would be 

consistent with its obligation to assure 

a fair and orderly market, and that the 

need for such flexibility is recognized in 

other Exchange rules, such as those 

related to position limits, quote-width 

differentials and price protection 

filters.17 As proposed, the Exchange 

would announce by electronic message 

to ATP Holders that request to receive 

such messages if the Exchange 

deactivates (and later reactivates) the 

Reasonability Check for calendar spread 

orders. 

Further, the Exchange does not 

propose to apply the Reasonability 

Check on calendar orders entered on the 

Trading Floor, as such orders are subject 

to manual handling by individuals who 

will have evaluated the price of an order 

based on then-market conditions.18 The 

Exchange notes that other exchanges 

that offer price protections similar to 

those proposed for calendar spreads 

have similarly retained discretion to 

limit the application of this check.19

The Exchange notes that ECOs that 

are not rejected by the Reasonability 

Checks would still be subject to the 

Price Protection Filter.20

Implementation 

The Exchange will announce by 

Trader Update the implementation date 

of the proposed rule change within 90 

days of the effective date of this rule 

filing. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),21 in general, and furthers 

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

Act,22 in particular, in that it is 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. 

In particular, the Exchange believes 

the proposed Reasonability Checks 

would protect investors and the public 

interest and maintain fair and orderly 

markets by mitigating potential risks 

associated with market participants 

entering Complex Orders at clearly 

unintended prices that are inconsistent 

with their strategies. Specifically, a 

Complex Order strategy where all legs 

are to sell (buy) will be rejected if it is 

entered at a price that is less (more) than 

the minimum (maximum) price. The 

Exchange believes it is reasonable to 

reject such orders upon entry as they are 

not executable. Allowing such orders to 

be entered would create investor 

confusion; as such orders would not 

receive an execution and would remain 

pending until canceled. Similarly, the 


pmangrum on DSK3GDR082PROD with NOTICES1
42864 Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 

23See supra note 17 [sic]. 

24See supra note 18 [sic]. 

25See supra note 20 [sic]. 

26See supra note 7 [sic]. 

27 15 U.S.C. 78s(b)(3)(A). 

28 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. 

29 17 CFR 240.19b–4(f)(6). 

30 17 CFR 240.19b–4(f)(6)(iii). 

31As discussed above, the proposal also allows 

the Exchange to deactivate the Reasonability Check 

for calendar spread strategies. The Exchange will 

notify OTP Holders and OTP Firms by electronic 

message of any such deactivation or re-activation. 

The Exchange believes that this discretion is 

necessary because a corporate action, for example, 

could result in the Reasonability Check for calendar 

spread strategies rejecting an otherwise valid 

strategy. The proposal also provides that the 

Reasonability Check for calendar spread strategies 

will not apply to ECOs that are entered on the 

Trading Floor. The Exchange notes that such orders 

are subject to manual handling by individuals who 

will have evaluated the price of the order based on 

market conditions. The Exchange further notes that 

another exchange has adopted a similar rule. See 

note 19, supra. 

32For purposes only of waiving the 30-day 

operative delay, the Commission also has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

Exchange believes that rejecting orders 

for vertical spread strategies—as well as 

calendar spread strategies—that are 

entered at a negative price also protects 

investors from executing orders that 

were likely entered in error. 

Regarding orders for calendar spreads, 

the Exchange recognizes that it may not 

be appropriate to apply the 

Reasonability Checks to calendar 

spreads in unusual market conditions, 

such as corporate actions that result in 

changes in price to the underlying 

security.23 The Exchange therefore 

believes it would remove impediments 

and perfect the mechanism of a free and 

open market and a national market 

system for the Exchange to temporarily 

deactivate the checks in the event of 

unusual market conditions, which 

flexibility is consistent with other 

exchange rules.24 Further, the Exchange 

also recognizes that the applicable 

protections are not appropriate for 

orders entered manually on the Trading 

Floor, because such orders would be 

subject to an additional check of thenmarket conditions by the individual 

entering the order, which flexibility is 

consistent with the rules of other 

exchanges.25

The Exchange’s proposed 

Reasonability Checks are similar to 

similar protections offered on other 

options exchanges, including ISE. To 

the extent there are differences between 

the proposed Reasonability Checks, as 

described above (see supra notes12 and 

15) [sic], the Exchange does not believe 

such differences raise any new or 

significant policy concerns. Further, 

despite the differences, the proposed 

Reasonability Checks would otherwise 

operate in a similar manner to the 

checks on ISE. As such, the Exchange 

merely desires to adopt functionality 

that is similar to what already exists on 

ISE.26 Permitting the Exchange to 

operate on an even playing field relative 

to other exchanges that have similar 

functionality removes impediments to 

and perfects the mechanism for a free 

and open market and a national market 

system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

The proposed Reasonability Checks 

specify circumstances in which the 

Exchange would reject certain ECOs in 

the interest of protecting investors 

against the execution of erroneous 

orders or the execution of orders at 

erroneous prices. As such, the proposal 

does not impose any burden on 

competition. To the contrary, the 

Exchange believes that the proposed 

Reasonability Checks may foster more 

competition. Specifically, the Exchange 

notes that it operates in a highly 

competitive market in which market 

participants can readily favor competing 

venues. The Exchange’s proposed rule 

change would enhance its ability to 

compete with other exchanges that 

already offer similar reasonability 

checks. Thus, the Exchange believes 

that this type of competition amongst 

exchanges is beneficial to the market 

place as a whole as it can result in 

enhanced processes, functionality, and 

technologies. The Exchange further 

believes that because the proposed rule 

change would be applicable to all OTP 

Holders and OTP Firms, it would not 

impose any burden on intra-market 

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 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 

Because the proposed rule change 

does not (i) significantly affect the 

protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative 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 Act 27 and Rule 19b– 

4(f)(6) thereunder.28

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 29 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 30

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. NYSE Arca has asked 

the Commission to waive the 30-day 

operative delay. NYSE Arcs believes 

that waiving the operative delay would 

protect investors by enabling the 

Exchange to provide greater protections 

from potentially erroneous executions 

and potentially reduce the attendant 

risks of such executions. As noted 

above, the proposal provides that a 

Complex Order strategy where all legs 

are to sell (buy) will be rejected if it is 

entered at a price that is less (more) than 

the minimum (maximum) price. NYSE 

Arca notes that such an order is not 

executable, and that allowing such an 

order to be entered would create 

investor confusion because the order 

would not receive an execution and 

would remain pending until canceled. 

Similarly, the Exchange believes that 

rejecting orders for vertical and calendar 

spread strategies that are entered at a 

negative price will protect investors 

from executing orders that were likely 

entered in error.31 The Commission 

believes that waiver of the operative 

delay is consistent with the protection 

of investors and the public interest 

because the proposed rules are designed 

to reduce investor confusion and to 

prevent the entry and execution of 

erroneously priced ECOs. Therefore, the 

Commission hereby waives the 

operative delay and designates the 

proposed rule change operative upon 

filing.32

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 


pmangrum on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 82, No. 175 / Tuesday, September 12, 2017 / Notices 42865 

33 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 79792 

(Jan. 13, 2017), 82 FR 7891 (Jan. 23, 2017). 

4 15 U.S.C. 78s(b)(2). 

5See Securities Exchange Act Release No. 80094 

(Feb. 23, 2017), 82 FR 12268 (Mar. 1, 2017). The 

Commission designated April 23, 2017, as the date 

by which the Commission shall either approve or 

disapprove, or institute proceedings to determine 

whether to approve or disapprove, the proposed 

rule change. 

6See Securities Exchange Act Release No. 80501 

(Apr. 21, 2017), 82 FR 19397 (Apr. 27, 2017). 

7See Securities Exchange Act Release No. 81155 

(July 17, 2017), 82 FR 33938 (July 21, 2017). The 

Commission designated September 20, 2017, as the 

date by which the Commission shall either approve 

or disapprove the proposed rule change. 

8See Letters from Andrew Quentson (Apr. 26, 

2017); Charles K. Massey, III, Venture Private 

Equity Investment (Apr. 26, 2017); Anita Desai 

(Apr. 29, 2017); Luc Jean (May 3, 2017); Tisho P. 

(May 10, 2017); Kevin McSheehan (May 14, 2017); 

Bruce Granger (May 16, 2017); Bruce Granger (May 

16, 2017); Alen Lee (May 18, 2017). All comments 

on the proposed rule change are available on the 

Commission’s Web site at: https://www.sec.gov/ 

Continued 

Commission shall institute proceedings 

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–2017–93 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–2017–93. 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– 

NYSEArca–2017–93 and should be 

submitted on or before October 3, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19241 Filed 9–11–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Pub. L. 94–409, that the 

Securities and Exchange Commission 

Advisory Committee on Small and 

Emerging Companies will hold a public 

meeting on Wednesday, September 13, 

2017, in Multi-Purpose Room LL–006 at 

the Commission’s headquarters, 100 F 

Street, NE., Washington, DC. 

The meeting will begin at 9:30 a.m. 

(EDT) and will be open to the public. 

Seating will be on a first-come, firstserved basis. Doors will open at 9:00 

a.m. Visitors will be subject to security 

checks. The meeting will be webcast on 

the Commission’s Web site at 

www.sec.gov. 

On August 14, 2017, the Commission 

published notice of the Committee 

meeting (Release No. 33–10399), 

indicating that the meeting is open to 

the public and inviting the public to 

submit written comments to the 

Committee. This Sunshine Act notice is 

being issued because a majority of the 

Commission may attend the meeting. No 

earlier notice of this Meeting was 

practicable. 

The agenda for the meeting includes 

matters relating to rules and regulations 

affecting small and emerging companies 

under the federal securities laws. 

For further information, please 

contact Brent J. Fields from the Office of 

the Secretary at (202) 551–5400. 

Dated: September 8, 2017. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2017–19445 Filed 9–8–17; 4:15 pm] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81538; File No. SR– 

NYSEArca–2016–176] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Withdrawal of a 

Proposed Rule Change Relating to the 

Listing and Trading of Shares of the 

EtherIndex Ether Trust Under NYSE 

Arca Equities Rule 8.201 

September 6, 2017. 

On December 30, 2016, NYSE Arca, 

Inc. (‘‘NYSE Arca’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares of the 

EtherIndex Ether Trust. The proposed 

rule change was published for comment 

in the Federal Register on January 23, 

2017.3

On February 23, 2017, pursuant to 

Section 19(b)(2) of the Exchange Act,4

the Commission designated a longer 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change.5 On April 21, 2017, the 

Commission instituted proceedings to 

determine whether to approve or 

disapprove the proposed rule change.6

On July 17, 2017, the Commission 

designated a longer period for 

Commission action on the proposed rule 

change.7 The Commission received nine 

comment letters regarding the proposed 

rule change.8


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