43598 Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 

7 15 U.S.C. 78s(b)(3)(A). 

8 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. 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6)(iii). 

11For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer that has been admitted 

to membership in the Exchange.’’ See Exchange 

Rule 1.5(n). 

19(b)(3)(A) of the Act 7 and Rule 19b– 

4(f)(6) thereunder.8

A proposed rule change filed 

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

Act 9 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 10

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay. The Exchange states 

that waiver of the operative delay is 

consistent with the protection of 

investors and the public interest as it 

will allow the Exchange to immediately 

remove outdated language from Chapter 

19 and thereby avoid member confusion 

about how Flash auction allocations are 

performed on the Exchange. The 

Commission believes the waiver of the 

operative delay is consistent with the 

protection of investors and the public 

interest. Accordingly, the Commission 

hereby waives the operative delay and 

designates the proposed rule change 

operative upon filing.11

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

MRX–2017–17 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–MRX–2017–17. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–MRX– 

2017–17, and should be submitted on or 

before October 10, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19806 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81600; File No. SR– 

BatsEDGA–2017–23] 

Self-Regulatory Organizations; Bats 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Related to 

Transaction Fees 

September 13, 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 

31, 2017, Bats EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) 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 the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change 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 

amend the fee schedule applicable to 

Members 5 and non-Members of the 

Exchange pursuant to EDGA Rules 

15.1(a) and (c). 

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 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43599 

6See Exchange Rule 11.8(e). 7See Exchange Rule 11.8(e) for a complete 

description of the operation of MDOs. 8See Exchange Rule 1.5(d). 9See Exchange Rule 1.5(ee). 10See Update: Bats EDGA Exchange Announces 

Availability of Non-Displayed Midpoint 

Discretionary Orders (Non-Displayed MDO) 

Effective September 15, 2017, available at http://

cdn.batstrading.com/resources/release_notes/2017/ 

Update-Bats-EDGA-Exchange-Announces-HiddenMidpoint-Discretionary-Order-Hidden-MDOFunctionality-Available-Effective-September-15- 

2017.pdf. See also Securities Exchange Act Release 

No. 81454 (August 22, 2017), 82 FR 40823 (August 

28, 2017) (SR–BatsEDGA–2017–21) (Notice of Filing 

and Immediate Effectiveness of a Proposed Rule 

Change To Amend Rule 11.8, Order Types, To 

Permit Midpoint Discretionary Orders To Be NonDisplayed). 

11See the Standard Rates table of the Exchange’s 

fee schedule available at http://www.bats.com/us/ 

equities/membership/fee_schedule/edga/. 

12See the Exchange’s fee schedule available at 

http://www.bats.com/us/equities/membership/fee_

schedule/edga/. 

13Fee code PL is appended to orders that are 

routed to Bats BZX Exchange, Inc., Bats EDGX 

Exchange, Inc., the New York Stock Exchange, Inc., 

NYSE Arca, Inc. or the Nasdaq Stock Market LLC 

using the RMPL routing strategy and are assessed 

a fee of $0.0030 per share on securities priced over 

$1.00, and 30% of the transaction’s dollar value for 

securities priced below $1.00. Id. 

14ADV is generally defined as average daily 

volume calculated as the number of shares added 

to, removed from, or routed by, the Exchange, or 

any combination or subset thereof, per day. Id. 

15The RMPT routing strategy operates similarly 

to RMPL in that under both Mid-Point Peg Orders 

check the System for available shares and any 

remaining shares are then sent to destinations on 

the System routing table that support midpoint 

eligible orders. If any shares remain unexecuted 

after routing, they are posted on the EDGA Book as 

a Mid-Point Peg Order, unless otherwise instructed 

by the User. While RMPL and RMPT operate in an 

identical manner, the trading venues that each 

routing strategy routes to and the order in which it 

routes them differ. See Exchange Rule 11.11(g)(13). 

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 amend its 

fee schedule to: (i) Outline the fees for 

MidPoint Discretionary Orders 

(‘‘MDO’’) 6 by adopting new fee codes 

DA and DR as well as amending the 

descriptions of fee codes DM and DT; 

and (ii) amend the RMPT/RMPL Tiers 

under footnote 1. 

Fees for MidPoint Discretionary Orders 

In sum, an MDO is a limit order to 

buy that is displayed at and pegged to 

the National Best Bid (‘‘NBB’’), with 

discretion to execute at prices up to and 

including the midpoint of the National 

Best Bid and Offer (‘‘NBBO’’), or a limit 

order to sell that is displayed at and 

pegged to the National Best Offer 

(‘‘NBO’’), with discretion to execute at 

prices down to and including the 

midpoint of the NBBO.7 MDOs are 

designed to exercise discretion to 

execute to the midpoint of the NBBO 

and provide price improvement over the 

NBBO. Currently, an MDO is displayed 

on the EDGA Book 8 at the NBB or NBO 

to which it is pegged. Starting on 

September 15, 2017, the Exchange will 

permit Users 9 to elect that their MDO be 

non-displayed on the EDGA Book at the 

NBB or NBO to which it is pegged.10

Today, an MDO is subject to the 

standard rates for adding or removing 

liquidity when executed at the NBB or 

NBO to which it is pegged. The standard 

rate for adding or removing liquidity in 

securities priced at or above $1.00 is 

$0.0003 per share and free for securities 

priced below $1.00.11 MDOs that are 

executed within their discretionary 

range are free in securities priced at, 

above, or below $1.00. MDOs that are 

executed within their discretionary 

range yield fee code DM where they add 

liquidity and fee code DT where they 

remove liquidity. 

The Exchange now proposes to adopt 

new fee codes DA and DR as well as 

amend the descriptions of fee codes DM 

and DT in order to outline the fees for 

MDOs. Today, a non-displayed order 

that adds liquidity yields fee code HA 

and is free for securities priced at, 

above, or below $1.00. A non-displayed 

order that removes liquidity yields fee 

code HR and is charged a fee of $0.0005 

per share in securities priced at or above 

$1.00 and 0.05% of the transaction’s 

dollar value in securities priced below 

$1.00. Absent this proposed rule 

change, beginning on September 15, 

2017, an MDO that is non-displayed on 

the EDGA Book would yield fee codes 

HA or HR when executed at its pegged 

price. 

The Exchange now proposed to adopt 

new fee codes DA and DR that would 

apply to all MDO that are executed at 

their pegged price, regardless of whether 

they are displayed or not. Fee code DA 

would be appended to all MDOs that 

add liquidity not within their 

discretionary range (i.e., executed at 

their pegged price) and fee code DR 

would be appended to all MDOs that 

remove liquidity not within their 

discretionary range. MDOs that yield fee 

code DA or DR would be charged a rate 

of $0.0003 per share for orders priced at 

or above $1.00 and no fee for orders 

priced below $1.00. This results in no 

rate change for displayed MDOs and a 

fee decrease from $0.0005 per share to 

$0.003 per share for non-displayed 

MDOs when both are executed at their 

pegged price [sic]. 

The Exchange also proposes to amend 

the descriptions of fee codes DM and DT 

to clarify that those fee codes apply 

when an MDO is executed within its 

discretionary range. The description of 

fee code DM currently states that it 

applies to a non-displayed order that 

adds liquidity using an MDO. Likewise, 

the description of fee code DT states 

that it applies to a non-displayed order 

that removes liquidity using an MDO. 

These descriptions were designed to 

include an MDO executed at a nondisplayed price within its discretionary 

range and not at its displayed pegged 

price. In light of the proposed fee codes 

DA and DR that set forth fees for MDOs 

executed at their pegged price, the 

Exchange proposed to amend the 

descriptions of fee codes DM and DT to 

make clear they apply to MDOs 

executed within their discretionary 

range. As such, the description of fee 

code DM would be amended to state 

that it applies when an MDO adds 

liquidity within its discretionary range 

and the description of fee code DT 

would be amended to state that it 

applies when an MDO removes liquidity 

within its discretionary range. The 

Exchange does not propose to amend 

the rates applicable to fee codes DM and 

DT. 

RMPT/RMPL Tiers 

The Exchange offers two tiers under 

footnote 1, the RMPT/RMPL Tiers under 

which a Member receives a discounted 

fee of either $0.0006 or $0.0008 per 

share for orders yielding fee code PX 12

where that Member meets certain 

required criteria. Fee code PX is append 

to orders that are routed using the RMPL 

routing strategy to a destination not 

covered by fee code PL,13 or are routed 

using the RMPT routing strategy, and 

are assessed a fee of $0.0012 per share 

on securities priced over $1.00, and a 

fee of 30% of the total dollar value on 

securities priced below $1.00. Under 

Tier 1, a Members is charged a 

discounted fee of $0.0008 per share for 

orders yielding fee code PX where they 

add or remove an ADV 14 greater than or 

equal to 2,000,000 shares using the 

RMPT or RMPL15 routing strategies. 

Under Tier 2, a Member is charged a 

discounted fee of $0.0006 per share for 

orders yielding fee code PX where that 

Member adds or removes an ADV 

greater than or equal to 4,000,000 shares 

using the RMPT or RMPL routing 

strategies. The Exchange now proposes 

to delete Tier 1 and to increase the fee 

charged under Tier 2 from $0.0006 to 

$0.0008 per share. The Exchange also 

proposes to rename Tier 2 as Tier 1. The 

Exchange does not propose to amend 


sradovich on DSKBBY8HB2PROD with NOTICES
43600 Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 

16 15 U.S.C. 78f. 

17 15 U.S.C. 78f(b)(4). 

18 15 U.S.C. 78s(b)(3)(A). 

19 17 CFR 240.19b–4(f). 

the remaining tier’s required criteria. 

Lastly, the Exchange proposes to make 

ministerial changes to the introduction 

to the RMPT/RMPL Tiers and the 

heading of the second column to make 

clear the discounted rate only applies to 

routed orders and not orders that 

remove liquidity. 

Implementation Date 

The Exchange proposes to implement 

these changes to its fee schedule on 

September 1, 2017. The remaining 

changes to its fee schedule applicable to 

non-displayed MDOs will be applicable 

until September 15, 2017 when that 

functionality becomes available. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,16

in general, and furthers the objectives of 

Section 6(b)(4),17 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Members and 

other persons using its facilities. 

Fees for MidPoint Discretionary Orders 

The Exchange believes that its 

proposal to outline the fees for MDOs 

represents an equitable allocation of 

reasonable dues, fees, and other charges 

among Members and other persons 

using its facilities in that they are 

designed to clearly delineate the rates 

applicable when an MDO is executed at 

its pegged price or within its 

discretionary range, in light of 

upcoming functionality that would 

enable a User to elect that their MDO 

not be displayed on the EDGA Book. As 

noted above, proposed new fee codes 

DA and DR result in no rate change for 

displayed MDOs and a fee decrease 

from $0.0005 per share to $0.003 per 

share for non-displayed MDOs when 

both are executed at their pegged price 

[sic]. The Exchange believes it is 

equitable and reasonable to charge a 

lower fee to MDOs than other nondisplayed orders here as MDOs add 

liquidity at the NBBO while offering 

price improvement opportunities to 

incoming contra-side orders that 

execute within its discretionary range. 

The amendments to the descriptions of 

fee codes DM and DT are also equitable 

and reasonable in that they clarify the 

application of those fee codes, thereby 

avoiding potential investor confusion. 

Lastly, the Exchange also believes that 

the proposed amendments are nondiscriminatory because they apply 

uniformly to all Members. 

RMPT/RMPL Tiers 

The Exchange believe that the 

amendments to the RMPL/RMPT Tiers 

are also reasonable and equitable 

because it is designed to attract 

additional midpoint liquidity to the 

Exchange by removing a tier with lower 

ADV requirement, resulting in increased 

price improvement opportunities for 

orders seeking an execution at the 

midpoint of the NBBO on the Exchange 

or elsewhere. In addition, increasing the 

rate for the remaining tier is designed to 

cover the Exchange’s routing costs while 

continuing to provide the Exchange 

revenue to be used to fund the Exchange 

generally. This includes the cost of 

maintaining and improving the 

technology used to handle and route 

orders from the Exchange as well as 

programs that the Exchange believes 

help to attract additional liquidity and 

thus improve the depth of liquidity 

available on the Exchange. The 

Exchange notes that routing through the 

Exchange is voluntary. The Exchange 

also believes that the proposed 

amendments are non-discriminatory 

because it applies uniformly to all 

Members. 

In addition, volume-based rebates 

such as that proposed herein have been 

widely adopted by exchanges and are 

equitable because they are open to all 

Members on an equal basis and provide 

additional benefits or discounts that are 

reasonably related to: (i) The value to an 

exchange’s market quality; (ii) 

associated higher levels of market 

activity, such as higher levels of 

liquidity provision and/or growth 

patterns; and (iii) the introduction of 

higher volumes of orders into the price 

and volume discovery processes. The 

Exchange believes that the proposed tier 

is a reasonable, fair and equitable, and 

not an unfairly discriminatory 

allocation of fees and rebates, because it 

will provide Members with an 

additional incentive to reach certain 

thresholds on the Exchange. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

This proposed rule change does not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange does not believe that this 

change represents a significant 

departure from previous pricing offered 

by the Exchange or from pricing offered 

by the Exchange’s competitors. The 

proposed rates would apply uniformly 

to all Members, and Members may opt 

to disfavor the Exchange’s pricing if 

they believe that alternatives offer them 

better value. Accordingly, the Exchange 

does not believe that the proposed 

changes will impair the ability of 

Members or competing venues to 

maintain their competitive standing in 

the financial markets. Further, excessive 

fees would serve to impair an 

exchange’s ability to compete for order 

flow and members rather than 

burdening competition. The Exchange 

believes that its proposal would not 

burden intramarket competition because 

the proposed rate would apply 

uniformly to all Members. 

(C) Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any written 

comments from members or other 

interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act 18 and paragraph (f) of Rule 

19b–4 thereunder.19 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. 

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– 

BatsEDGA–2017–23 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–BatsEDGA–2017–23. This 

file number should be included on the 


sradovich on DSKBBY8HB2PROD with NOTICES
Federal Register / Vol. 82, No. 179 / Monday, September 18, 2017 / Notices 43601 

20 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities Exchange Act Release Nos. 81084 

(July 6, 2017), 82 FR 32216 (July12, 2017) (‘‘BATS 

Approval Order’’); 80709 (May 17, 2017), 82 FR 

23684 (May 23, 2017) (‘‘Notice of BATS Filing’’) 

(SR–BatsBZX–2017–35). See also Securities 

Exchange Act Release No. 81348 (August 8, 2017), 

82 FR 37910 (August 14, 2017) (SR–BX–2017–038) 

(immediately effective filing based on BATS 

Approval Order). 

5See Securities Exchange Act Release No. 74921 

(May 8, 2015), 80 FR 27816 (May 14, 2015) (SR– 

NYSEMKT–2015–39) (the ‘‘Initial Filing’’). 6For example, the Exchange, along with other 

options exchanges that offer complex orders on 

their options platforms, recently filed proposals 

related to rules for handling the adjustment and 

nullification of erroneous complex order 

transactions, which proposals were approved by the 

Commission or filed on an immediately effective 

basis. See Securities Exchange Act Release Nos. 

80040 (February 14, 2017), 82 FR 11248 (February 

21, 2017) (granting approval of CBOE proposal 

related to the nullification and adjustment of 

complex orders) (SR–CBOE–2016–088); 80497 

(April 20, 2017), 82 FR 19290 (April 26, 2017) 

(notice of filing and immediate effectiveness of 

Exchange proposal related to the nullification and 

adjustment of complex orders) (SR–NYSEMKT– 

2017–22). 

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– 

BatsEDGA–2017–23 and should be 

submitted on or before October 10, 

2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–19809 Filed 9–15–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81582; File No. SR– 

NYSEAMER–2017–12] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 975NY 

and Rule 953NY 

September 12, 2017. 

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 

September 1, 2017, NYSE American 

LLC (the ‘‘Exchange’’ or ‘‘NYSE 

American’’) 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 

Rule 975NY (Nullification and 

Adjustment of Options Transactions 

including Obvious Errors) and Rule 

953NY (Trading Halts and 

Suspensions). 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

Rule 975NY, relating to the adjustment 

and nullification of erroneous 

transactions, and Rule 953NY, regarding 

trading halts and suspensions. The 

Exchange’s proposal is based on that of 

Bats BZX (‘‘BATS’’), which the 

Commission approved on July 6, 2017, 

and those that the other options 

exchanges intend to file.4

Background 

The Exchange and other options 

exchanges adopted a harmonized rule 

related to the adjustment and 

nullification of erroneous options 

transactions, including a specific 

provision related to coordination in 

connection with large-scale events 

involving erroneous options 

transactions.5 The Exchange believes 

that the changes the options exchanges 

implemented with the harmonized rule 

have led to increased transparency and 

finality with respect to the adjustment 

and nullification of erroneous options 

transactions. As part of the initial 

initiative, however, the Exchange and 

other options exchanges deferred a few 

specific matters for further discussion.6

Specifically, as described in the Initial 

Filing, the Exchange and all other 

options exchanges have been working to 

further improve the review of 

potentially erroneous transactions as 

well as their subsequent adjustment by 

creating an objective and universal way 

to determine Theoretical Price in the 

event a reliable NBBO is not available. 

Because this initiative required 

additional exchange and industry 

discussion as well as additional time for 

development and implementation, the 

Exchange and the other options 

exchanges determined to proceed with 

the Initial Filing and to undergo an 

effort to complete any additional 

improvements to the applicable rule. In 

this filing, the Exchange proposes to 

adopt procedures that will lead to a 

more objective and uniform way to 

determine Theoretical Price in the event 

a reliable NBBO is not available. In 

addition to this change, the Exchange 

has proposed additional minor changes 

to its rules. 

Calculation of Theoretical Price Using a 

Third Party Provider 

Under the harmonized rule, when 

reviewing a transaction as potentially 

erroneous, the Exchange needs to first 

determine the ‘‘Theoretical Price’’ of the 

option, i.e., the Exchange’s estimate of 

the correct market price for the option. 

Pursuant to Rule 975NY, if the 


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