Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Notices 52757 

1Applicants request that the relief apply to: (1) 

Each registered, open-end management investment 

company or series thereof that currently or 

subsequently is part of the same ‘group of 

investment companies,’ within the meaning of 

Section 12(d)(1)(G)(ii) of the Act, as the Trust and 

is advised by the Adviser (included in the term 

‘Funds’); (2) each Investing Fund that enters into a 

Participation Agreement (as defined in the 

Application) with a Fund to purchase shares of the 

Fund; and (3) any principal underwriter to a Fund 

or Broker selling shares of a Fund. 

2Certain of the Funds created in the future may 

be registered under the Act as open-end 

management investment companies and may have 

received exemptive relief to permit their shares to 

be listed and traded on a national securities 

exchange at negotiated prices. 

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

2 17 CFR 240.19b–4. 

3NYSE Rules define ‘‘UTP Security’’ as a security 

that is listed on a national securities exchange other 

than the Exchange and that trades on the Exchange 

pursuant to unlisted trading privileges. See NYSE 

Rule 1.1(ii). 

4See Securities Exchange Act Release No. 81310 

(Aug. 3, 2017), 82 FR 37257 (Aug. 9, 2017) 

(‘‘Notice’’). 

excess of the limits in section 12(d)(1) 

of the Act. 

APPLICANTS: Meeder Funds Trust (the 

‘‘Trust’’), a Massachusetts business trust 

registered under the Act as an open-end 

investment company with multiple 

series; Meeder Asset Management, Inc., 

an Ohio corporation registered as an 

investment adviser under the 

Investment Advisers Act of 1940 (the 

‘‘Adviser,’’), and Adviser Dealer 

Services, Inc. (the ‘‘Distributor’’), an 

Ohio corporation registered as a brokerdealer under the Securities Exchange 

Act of 1934 (‘‘Exchange Act’’). 

FILING DATES: The application was filed 

on May 16, 2017 and amended on 

September 15, 2017. 

HEARING OR NOTIFICATION OF HEARING: 

An order granting the requested relief 

will be issued unless the Commission 

orders a hearing. Interested persons may 

request a hearing by writing to the 

Commission’s Secretary and serving 

applicants with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on December 4, 2017 and 

should be accompanied by proof of 

service on the applicants, in the form of 

an affidavit, or, for lawyers, a certificate 

of service. Pursuant to Rule 0–5 under 

the Act, hearing requests should state 

the nature of the writer’s interest, any 

facts bearing upon the desirability of a 

hearing on the matter, the reason for the 

request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

writing to the Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

Applicants: Michael Wible, Thompson 

Hine LLP, 41 South High Street, Suite 

1700, Columbus, Ohio 43215. 

FOR FURTHER INFORMATION CONTACT: 

James D. McGinnis, Senior Counsel, at 

(202) 551–3025, or Parisa Haghshenas, 

Branch Chief, at (202) 551–6723 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm, or by 

calling (202) 551–8090. 

Summary of the Application 

1. Applicants request an order to 

permit (a) registered open-end 

management investment companies (the 

‘‘Investing Funds’’) that are not part of 

the same ‘‘group of investment 

companies,’’ as defined in section 

12(d)(1)(G)(ii) of the Act, as the Trust, to 

acquire shares in series of the Trust (the 

‘‘Funds’’) 1 in excess of the limits in 

section 12(d)(1)(A) of the Act 2 and (b) 

the Funds, any principal underwriter for 

a Fund, and any broker or dealer 

registered under the Exchange Act (a 

‘‘Broker’’) to sell shares of the Funds to 

the Investing Funds in excess of the 

limits of section 12(d)(1)(B) of the Act. 

Applicants also request an order under 

sections 6(c) and 17(b) of the Act to 

exempt applicants from section 17(a) to 

the extent necessary to permit a Fund to 

sell its shares to, and redeem its shares 

from, an Investing Fund. 

2. Applicants agree that any order 

granting the requested relief will be 

subject to the terms and conditions 

stated in the Application. Such terms 

and conditions are designed to, among 

other things, help prevent any potential 

(i) undue influence over a Fund through 

control or in connection with certain 

services, transactions, and 

underwritings; (ii) excessive layering of 

fees; and (iii) overly complex fund 

structures, which are the concerns 

underlying the limits in sections 

12(d)(1)(A) and (B) of the Act. 

3. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–24628 Filed 11–13–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82028; File No. SR–NYSE– 

2017–36] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Adopt New 

Equity Trading Rules To trade 

Securities Pursuant to Unlisted 

Trading Privileges, Including Orders 

and Modifiers, Order Ranking and 

Display, and Order Execution and 

Routing on Pillar, the Exchange’s New 

Trading Technology Platform 

November 7, 2017. 

I. Introduction 

On July 28, 2017, New York Stock 

Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

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

19b–4 thereunder,2 a proposed rule 

change to adopt new equity trading 

rules to allow the Exchange to trade 

securities pursuant to unlisted trading 

privileges (‘‘UTP Securities’’) 3 on Pillar, 

the Exchange’s new trading technology 

platform. The proposed rule change was 

published for comment in the Federal 

Register on August 9, 2017.4 On 

September 18, 2017, 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 the proposed rule change 


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52758 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Notices 

5See Securities Exchange Act Release No. 81641 

(Sept. 18, 2017), 82 FR 44483 (Sept. 22, 2017) 

(‘‘Extension’’). 

6 15 U.S.C. 78s(b)(2)(B). 

7See Securities Exchange Act Release No. 76803 

(Dec. 30, 2015), 81 FR 536 (Jan. 6, 2016) (SR–NYSE– 

2015–67) (Notice of Filing and Immediate 

Effectiveness of Proposed Rule Change) (adopting a 

framework of rule numbering based on NYSE Arca 

rules in advance of the NYSE adopting Pillar). 

8The Pillar platform on NYSE Arca and NYSE 

American uses a price-time allocation model. See 

NYSE Arca Rule 7.37–E(a) and NYSE American 

Rule 7.37E(a). 

9See Notice, supra note 3, 82 FR at 37258. 

10See Proposed NYSE Rule 107B. 

11According to the Exchange, member 

organizations trading UTP Securities would be 

required to comply with Section 11(a)(1) of the Act, 

15 U.S.C. 78k(a)(1), and with any exceptions that 

are currently applicable to trading on the Exchange. 

See Notice, supra note 3, 82 FR at 37258 n.12. 

12See Notice, supra note 3, 82 FR at 37258. 

13The Exchange states that it plans to transition 

trading in NYSE-listed securities to Pillar at a later 

date, and will file separate proposed rule changes 

to implement that transition. See Notice, supra note 

3, 82 FR at 37258 n.9. 

14See NYSE Rule 1.1(h) (defining ‘‘BBO’’ as the 

best bid or offer on the Exchange). 

15See Proposed NYSE Rule 7.10. 16See Proposed NYSE Rule 7.34 and see infra the 

related discussion below. 17See Proposed NYSE Rule 7.31 and see infra the 

related discussion below. 18The Exchange proposes that current NYSE Rule 

128 (Clearly Erroneous Executions For NYSE 

Equities) would not be applicable for trading in 

UTP Securities on Pillar. 19See Proposed NYSE Rule 7.31 and the related 

discussion below. 

should be disapproved.5 The 

Commission received no comments on 

the proposed rule change. This order 

institutes proceedings under Section 

19(b)(2)(B) of the Exchange Act 6 to 

determine whether to approve or 

disapprove the proposed rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to adopt 

equities trading rules to implement 

Pillar, a new trading technology 

platform, in order to introduce trading 

of UTP Securities on the Exchange. 

Under the proposal, the Pillar platform 

rules, as set forth in NYSE Rules 1P– 

13P, would govern trading in UTP 

Securities on the Exchange.7 The 

Exchange proposes rule changes relating 

to clearly erroneous executions; the 

limit up-limit down plan; short sales; 

halts; orders and modifiers; order 

ranking, display, execution, and routing; 

odd and mixed lots; the tick size pilot 

plan. The Exchange also proposes to 

specify the current Exchange rules that 

would not be operative under Pillar. 

Pursuant to the proposal, UTP 

Securities would trade under the 

Exchange’s current parity allocation 

model.8 Designated market makers 

(‘‘DMMs’’) would not be assigned UTP 

Securities on Pillar.9 Supplemental 

Liquidity Providers 10 would be eligible 

to be assigned UTP Securities, and 

member organizations operating floor 

broker operations that are physically 

located on the floor would also be 

eligible to trade UTP Securities,11 but 

UTP Securities would not be available 

for floor-based point-of-sale trading. 

Finally, the Exchange would not 

conduct auctions in UTP Securities.12

The Exchange represents that it will 

continue to trade NYSE-listed securities 

on its current trading platform.13

The Exchange represents that the 

proposal to trade UTP Securities on 

Pillar is based in part on the equity 

trading rules of NYSE Arca, Inc. (‘‘NYSE 

Arca’’) and NYSE American LLC 

(‘‘NYSE American’’), with the following 

substantive differences. First, as noted 

earlier, the Exchange would use a parity 

allocation model with a setter priority 

allocation for the participant that sets 

the best bid or offer on the Exchange 

(‘‘BBO’’).14 Second, the Exchange would 

not offer a Retail Liquidity Program or 

the associated order types—Retail 

Orders and Retail Price Improvement 

Orders. Third, as noted above, the 

Exchange would not conduct auctions. 

Fourth, the Exchange would offer only 

two trading sessions—an Early Trading 

Session and a Core Trading Session. 

Finally, the Exchange’s order types and 

modifiers would differ from the order 

types and modifiers offered by NYSE 

Arca and NYSE American. 

The Exchange represents that it will 

announce the implementation of trading 

UTP Securities on Pillar by a Trader 

Update. The Exchange anticipates that 

the implementation will occur in the 

first quarter of 2018. If the Exchange 

begins trading UTP Securities on Pillar, 

certain current NYSE trading rules 

would not be applicable. The Exchange 

proposes to mark the affected Exchange 

rules with a preamble to state that the 

rules are not applicable to trading UTP 

Securities on Pillar. 

The Notice contains a detailed 

description of the proposal. The 

following section briefly summarizes 

the proposal. 

A. NYSE Rule 7P—Equities Trading 

The Exchange proposes several new 

rules and changes to existing rules in 

NYSE Rule 7P. Currently, Section 1 of 

NYSE Rule 7P sets forth general 

provisions relating to equities trading on 

Pillar, such as hours of business and 

clearance and settlement. The Exchange 

proposes to add NYSE Rules 7.10 

(clearly erroneous executions); 7.11 

(limit up-limit down); and 7.16 (short 

sales) to Section 1 of NYSE Rule 7P and 

amend NYSE Rule 7.18 (halts). 

Section 3 of NYSE Rule 7P sets forth 

the rules for trading on Pillar. The 

Exchange proposes to add to this section 

new NYSE Rules 7.31 (orders and 

modifiers); 7.34 (trading sessions); 7.36 

(order ranking and display); 7.37 (order 

execution and routing); and 7.38 (odd 

and mixed lots). Finally, the Exchange 

proposes to add new NYSE Rule 7.46 to 

Section 5 of NYSE Rule 7P to establish 

rules to implement the Tick Size Pilot 

Plan. 

1. General Provisions 

The Exchange proposes to establish 

rules relating to clearly erroneous 

executions, the limit up-limit down 

plan, short sales, and trading halts with 

respect to UTP Securities. 

Proposed NYSE Rule 7.10 would set 

forth the Exchange’s rules governing 

clearly erroneous executions.15 The 

proposed rule would set forth how a 

member organization could request a 

review of an order that was submitted 

erroneously, the timing of Exchange 

review, thresholds for determining 

clearly erroneous execution, review 

procedures, and other rules governing 

clearly erroneous executions. 

The Exchange represents that the 

proposed rule is based on NYSE Arca 

Rule 7.10–E and NYSE American Rule 

7.10E, except that the proposed rule 

would omit references to: (1) The Late 

Trading Session,16 since the Exchange 

would not offer a late trading session; 

(2) Cross Orders,17 since the Exchange 

would not offer cross orders; and (3) 

executions in the Trading Halt Auction, 

since the Exchange would not conduct 

auctions for UTP Securities.18

Proposed NYSE Rule 7.11 would 

establish rules governing how the 

Exchange would comply with the 

Regulation NMS Plan to Address 

Extraordinary Market Volatility (‘‘LULD 

Plan’’). The LULD Plan addresses 

extraordinary market volatility and is 

intended to prevent trades in NMS 

securities from occurring outside of 

specified price bands, and the proposed 

rule would implement the LULD Plan 

on the Exchange’s Pillar platform. The 

Exchange represents that the proposed 

rule is based on NYSE American 7.11E 

with the following differences: (1) There 

would be no option for member 

organizations to enter an instruction to 

cancel Limit Orders that cannot be 

traded or routed at prices within the 

price bands; (2) there would be no 

provisions and references relating to Q 

Orders, Limit IOC Cross Orders, or 

orders with specific routing instructions 

because the Exchange will not offer 

these order types; 19 (3) there would be 

no provision on reopenings since the 


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20As a result, the Exchange would not include 

rules based on NYSE Arca Rules 7.16–E(f)(3), 7.16– 

E(f)(4)(A), or 7.16–E(f)(4)(B) or NYSE American 

Rules 7.16E(f)(3), 7.16E(f)(4)(A), or 7.16E(f)(4)(B). 

21Current NYSE Rule 440B (Short Sales) would 

not be applicable to trading UTP Securities on 

Pillar. 

22See Proposed NYSE Rule 7.18(b). UTP 

Regulatory Halt is defined in current NYSE Rule 

1.1(kk) to mean a trade suspension, halt, or pause 

called by the UTP Listing Market in an UTP 

Security that requires all market centers to halt 

trading in that security. NYSE Rule 1.1(jj) defines 

the term ‘‘UTP Listing Market’’ as the primary 

listing market for an UTP Security. 

23See Proposed NYSE Rule 7.18(d)(1)(A). 

Specifically, this rule would apply if an UTP 

Exchange Traded Product begins trading on the 

Exchange in the Early Trading Session and a 

temporary interruption occurs in a major market 

vendor’s calculation or wide dissemination of either 

the Intraday Indicative Value or the value of the 

underlying index to the UTP Exchange Traded 

Product, as applicable. 

24The Exchange proposes two non-substantive 

changes: (1) Amend NYSE Rule 7.18(a) to update 

a cross-reference and (2) amend NYSE Rule 

7.18(d)(1)(B) to replace the phrase ‘‘Normal Trading 

Hours’’ with the phrase ‘‘Core Trading Session.’’ 

See Proposed NYSE Rule 7.34(a)(2) (defining Core 

Trading Session). 

25Currently, NYSE only offers pegged orders for 

floor brokers. See NYSE Rule 13(f)(1) (stating that 

pegging interest ‘‘must be an e-Quote or d-Quote’’). 

See NYSE Rule 70 for more information on e-Quote 

and d-Quote. 

26The Exchange would not offer Tracking Orders, 

Cross Orders, Q Orders, orders that include specific 

routing instructions (which includes Primary Only 

Orders), Inside Limit Orders, Limit IOC Cross 

Orders, Market Pegged Orders, Discretionary Pegged 

Orders, or the Proactive if Locked/Crossed Modifier. 

However, the Exchange would offer the order type 

Non-Displayed Primary Pegged Order, which NYSE 

Arca does not offer. The Exchange would also offer 

order types and modifiers not offered by NYSE 

American (Primary Pegged Orders, ALO Orders, 

Day ISO Orders, IOC ISO Orders, and MPL Orders 

with an ALO Modifier). 

27The Exchange proposes additional rules 

addressing how the self-trade prevention modifiers 

STP Cancel Newest and STP Cancel Oldest orders 

would interact with resting orders in a priority 

category that allocates orders based on parity. The 

Exchange proposes that current NYSE Rules 13 

(Orders and Modifiers) and 70 (Execution of Floor 

Broker Interest) would not be applicable for trading 

in UTP Securities on Pillar. 

28NYSE Arca and NYSE American also offer a 

Late Trading Session. See NYSE Arca Rule 7.34– 

E(a)(3) and NYSE American Rule 7.34E(a)(3). NYSE 

would not offer a Late Trading Session. 

29Proposed NYSE Rule 7.34(b) would also 

provide that an order would be deemed designated 

with a day time-in-force modifier if that order did 

not have a time-in-force designation. 

30See Proposed NYSE Rule 7.36(a)(6). An 

Aggressing Order is a buy (sell) order that is or 

becomes marketable against sell (buy) interest on 

the Exchange Book. 

Exchange will not conduct auctions; 

and (4) the proposed rules would not 

include references to Day ISO orders, an 

order type that NYSE American does 

not offer. 

Proposed NYSE Rule 7.16 would set 

forth the Exchange’s short sale rule, 

which would govern short sales and 

compliance with Regulation SHO. The 

Exchange represents that the proposed 

rule is based on NYSE Arca Rule 7.16– 

E and NYSE American Rule 7.16E with 

two substantive differences. First, 

because the proposed rule would not 

apply to the Exchange’s listed securities, 

the Exchange would not evaluate the 

triggering of the short sale price 

restrictions pursuant to Rule 201 of 

Regulation SHO for covered securities 

in which the Exchange is not the listing 

market.20 Second, the Exchange is not 

proposing a rule that relates to Tracking 

Orders, Cross Orders, or the Proactive if 

Locked/Crossed Modifier because the 

Exchange would not offer these order 

types for UTP Securities.21

Current NYSE Rule 7.18 governs 

trading halts in an UTP Security. The 

Exchange proposes to add proposed 

Rule 7.18(b), which would set forth how 

the Exchange would process new and 

existing orders in an UTP Security 

during an UTP Regulatory Halt.22 The 

Exchange represents that the proposed 

rule is based on NYSE Arca Rule 7.18– 

E(b) and subparagraphs (1)–(6), as well 

as NYSE American Rule 7.18E(b) and 

subparagraphs (1)–(6), except that the 

Exchange would not refer to ‘‘Primary 

Only’’ order types because the Exchange 

would not offer this order type. The 

Exchange also proposes to add NYSE 

Rule 7.18(d)(1)(A), which would allow 

the Exchange to continue to trade an 

UTP Exchange Traded Product for the 

remainder of the Early Trading Session 

in certain situations.23 The Exchange 

represents that the proposed rule is 

based on NYSE Arca Rule 7.18– 

E(d)(1)(A) and NYSE American Rule 

7.18E(d)(1)(A), with no substantive 

differences.24

2. Trading Rules for Pillar 

The Exchange proposes trading rules 

for Pillar, including a description of 

order types and modifiers, trading 

sessions, how orders are displayed and 

ranked, how orders are executed and 

routed, and how odd lots and mixed lots 

are ranked and executed. 

Proposed NYSE Rule 7.31 would set 

forth the primary order types, as well as 

time-in-force modifiers, auction-only 

orders, orders with conditional or 

undisplayed price and/or size, orders 

with instructions not to route, pegged 

orders, and other order instructions and 

modifiers that would be available on 

Pillar. The Exchange represents that the 

proposed orders and modifiers are a 

subset of those offered on NYSE Arca 

and NYSE American, with several 

substantive differences. 

The proposed NYSE rule differs from 

the NYSE Arca and NYSE American 

rules as follows: (1) NYSE would not 

offer auctions in UTP Securities 

(Auction-Only Orders would be routed 

to the primary listing markets); (2) Limit 

Orders entered before the Core Trading 

Session would be designated for both 

the Early and Core Trading Sessions; (3) 

the Exchange would not offer the option 

to designate certain orders with a NonDisplay Remove Modifier; (4) 

Intermarket Sweep Orders would not be 

available to floor brokers; (5) Pegged 

Orders would be available only to floor 

brokers; 25 and (6) the Exchange would 

not offer certain order types.26 The 

proposed rule also sets forth how Self 

Trade Prevention Modifiers would 

function consistent with the Exchange’s 

proposed allocation model.27

Proposed NYSE Rule 7.34 would 

specify that the Exchange would operate 

Early and Core Trading Sessions. The 

Exchange represents that the proposed 

rule is based on NYSE Arca Rule 7.34– 

E and NYSE American Rule 7.34E, 

except for the following substantive 

differences: (1) The Exchange would 

offer two trading sessions—an Early 

Trading Session and a Core Trading 

Session—instead of three trading 

sessions; 28 (2) the Early Trading Session 

would start at 7:00 a.m. Eastern Time 

(rather than 4:00 a.m. Eastern Time on 

NYSE Arca); (3) the Exchange would 

deem an order entered before or during 

the Early or Core Trading Session as 

designated for both trading sessions; 29

(4) the Exchange would not reference 

current NYSE Rule 7.44 because the 

Exchange would not offer a retail 

liquidity program; (5) in the Early 

Trading Session, Market Orders would 

be treated like Auction-Only Orders and 

would be routed to the primary listing 

market on arrival, instead of being 

rejected; and (6) the Exchange would 

not include provisions involving 

auctions and would not refer to order 

types that it does not offer (e.g., Cross 

Orders). 

Proposed NYSE Rule 7.36 would set 

forth how orders are ranked and 

displayed, and the priority of orders. As 

noted earlier, the Exchange would use a 

parity allocation model for the trading 

of UTP securities. The Exchange 

represents that proposed subsections 

NYSE Rule 7.36(a)–(g) are based on 

NYSE Arca Rule 7.36–E(a)–(g) and 

NYSE American Rule 7.36(a)–(g) with 

several substantive differences. The 

Exchange would add the term 

‘‘Participant’’ based on the term 

‘‘individual participant’’ in current 

NYSE Rule 72(c)(ii), and a new term 

‘‘Aggressing Order.’’ 30 Proposed NYSE 

Rule 7.36(b)(2) would not include the 


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31See Proposed NYSE Rule 7.36(e). The proposed 

priority categories are Priority 1—Market Orders, 

Priority 2—Display Orders, and Priority 3—NonDisplayed Orders. The category Tracking Orders, 

which appears as a Priority 4 category in NYSE 

Arca 7.36–E and NYSE American 7.36E, is not 

included in the Exchange’s proposed rule. 

32See NYSE Rule 1.1(h). 

33See NYSE Rule 1.1(dd) (defining NBBO as the 

national best bid or offer) and Rule 600(b)(42) of 

Regulation NMS (‘‘National best bid and national 

best offer means, with respect to quotations for an 

NMS security, the best bid and best offer for such 

security that are calculated and disseminated on a 

current and continuing basis by a plan processor 

pursuant to an effective national market system 

plan; provided, that in the event two or more 

market centers transmit to the plan processor 

pursuant to such plan identical bids or offers for an 

NMS security, the best bid or best offer (as the case 

may be) shall be determined by ranking all such 

identical bids or offers (as the case may be) first by 

size (giving the highest ranking to the bid or offer 

associated with the largest size), and then by time 

(giving the highest ranking to the bid or offer 

received first in time)’’). 17 CFR 242.600(b)(42). 

34See Proposed NYSE Rule 7.36(h)(4)(B). The 

Exchange proposes that resting orders that are the 

only interest at the price when that price becomes 

the BBO, and the replenished portion of a Reserve 

Order, would not be eligible for Setter Priority on 

Pillar in order to encourage displayed orders that 

are aggressively priced. 

35The Exchange proposes that NYSE Rules 72(a), 

(b), and (c)(xii) would not be applicable to trading 

UTP Securities on Pillar. 

36See Proposed NYSE Rule 7.36(h)(1)(B). 

37See Proposed NYSE Rule 7.36(h)(2)(E). 

38See Proposed NYSE Rule 7.36(h)(3)(B). 

39NYSE Arca Rule 7.37–E(b)(3) provides ETP 

Holders the option to bypass away markets that are 

not displaying protected quotations. NYSE Arca 

Rule 7.37–E(d)(1) states that NYSE Arca receives 

data feeds directly from broker-dealers for the 

purpose of routing interest to away markets that are 

not displaying protected quotations. 

40See supra note 37. 

41Current NYSE Rule 72(c)(viii) sets forth a single 

allocation wheel for each security. According to the 

Exchange, the proposed NYSE Rule for Pillar would 

permit a member organization to establish a 

position at each price point, instead of simply 

adding the order to a single allocation wheel with 

multiple price points. 

42See Proposed NYSE Rule 7.37(b)(1)(E)). 

43The Exchange proposes that NYSE Rules 15A, 

19, 72(c), 1000, 1001, 1002, and 1004 would not 

apply to trading UTP Securities on Pillar. As NYSE 

Rule 72(d) would also not apply to trading UTP 

Securities on the Pillar trading platform, the 

Exchange proposes that NYSE Rule 72 in its 

entirety would not apply to trading UTP Securities 

on Pillar. 

44The Exchange proposes that current NYSE Rule 

61 (Recognized Quotations) would not be 

applicable to trading UTP Securities on Pillar. 

reference to NYSE Arca Rule 7.7–E— 

which prohibits ETP Holders from 

transmitting through the facilities of the 

Exchange information regarding a bid, 

offer, indication of an order, or the ETP 

Holder’s identity unless the originating 

ETP Holder grants permission or 

affirmatively elects to disclose its 

identity—because all non-marketable 

displayed Limit Orders would be 

displayed on an anonymous basis. 

Proposed NYSE Rule 7.36(c) would not 

include a reference to price-time 

priority since the Exchange would 

operate under its existing parity 

allocation model, and there would be 

three priority categories for orders 

instead of four categories on NYSE Arca 

and NYSE American.31

Proposed NYSE Rule 7.36(h) sets forth 

the rules for Setter Priority. The 

Exchange represents that the proposed 

rule is based in part on current NYSE 

Rule 72, with several substantive 

differences: (1) In addition to 

establishing the BBO,32 an order would 

have to either establish a new national 

best bid or offer (‘‘NBBO’’) 33 or join an 

Away Market NBBO to be eligible for 

Setter Priority; (2) unlike current NYSE 

Rule 72(a)(ii), Setter Priority would not 

be available for a resting order solely 

because that order is the only interest at 

a given price when that price becomes 

the BBO; (3) Setter Priority would not be 

available for reserve quantities that 

replenish the display quantity of a 

Reserve Order; 34 and (4) orders that are 

routed and return unexecuted would be 

eligible for Setter Priority consistent 

with proposed NYSE Rules 7.16(f)(5)(H), 

7.36(f)(1)(A) and (B), and 7.38(b)(2), 

which govern the working time assigned 

to the return quantity of an order.35 In 

addition, the Exchange proposes that an 

order would be evaluated for Setter 

Priority when the order becomes eligible 

to trade for the first time upon the 

transition to a new trading session; 36

that an order would retain Setter 

Priority when transitioning from one 

trading session to another; 37 and that an 

order would lose Setter Priority if it is 

assigned a new display price.38

Proposed NYSE Rule 7.37 would 

govern how orders would execute and 

route. Proposed NYSE Rule 7.37(a) 

would govern order execution. Proposed 

NYSE Rule 7.37(b) would govern order 

allocation, as described further below. 

And proposed NYSE Rule 7.37(c)–(g) 

would govern routing, the data feeds the 

Exchange would use, the prohibition on 

quotations that lock or cross the 

protected best bid or offer, and 

exceptions to the Commission’s Order 

Protection Rule. 

The Exchange represents that 

proposed Rule 7.37 is based on NYSE 

Arca Rule 7.37–E(a)–(f) and NYSE 

American Rule 7.37E(a)–(f), with the 

following substantive differences. The 

proposed rule would not include 

references to Inside Limit Orders and 

orders with specific routing instructions 

since the Exchange will not offer these 

order types. Proposed NYSE Rule 7.37 

would not include rule text from NYSE 

Arca Rules 7.37–E(b)(3) or (d)(1) 39

because, like NYSE American, the 

Exchange would neither use data feeds 

from broker-dealers nor route to away 

markets that do not display protected 

quotations. Also, in proposed NYSE 

Rule 7.37(a), the Exchange would use 

the proposed new term ‘‘Aggressing 

Order’’ instead of ‘‘incoming marketable 

order’’ when referring to orders that 

would be matched for execution.40

Proposed NYSE Rule 7.37(b) would 

establish how Aggressing Orders are 

allocated against contra-side orders. The 

Exchange represents that the proposed 

rule is based in part on current NYSE 

Rule 72(c) with the following 

substantive differences: (1) The 

Exchange would maintain separate 

allocation wheels at each price for 

displayed and non-displayed orders on 

each side of the market; 41 (2) allocations 

to a Floor Broker Participant would be 

allocation to orders represented by that 

Floor Broker on parity; (3) the proposed 

rule would not reference DMM 

allocations as there would be no DMMs 

assigned to UTP Securities; (4) the 

Exchange would offer Mid-Point 

Liquidity Orders (‘‘MPL’’) with a 

Minimum Trading Size (‘‘MTS’’), and 

the orders would be allocated based on 

MTS size and time; 42 (5) if resting 

orders on one side of the market are 

repriced and become marketable against 

contra-side orders on the Exchange 

book, the Exchange would rank the repriced orders as described in proposed 

NYSE Rule 7.36(c) and trade them as 

Aggressing Orders consistent with their 

ranking; and (6) proposed NYSE Rule 

7.37(b)(9) would provide that if resting 

orders on both sides of the market are 

repriced and become marketable against 

one another, the Exchange would rank 

the orders based on proposed NYSE 

Rule 7.36(c) and determine which 

orders are the Aggressing Orders based 

on their ranking.43

Proposed NYSE Rule 7.38 sets forth 

how odd-lot and mixed-lot orders 

would be ranked and executed. The 

Exchange represents that the proposed 

rule is based on NYSE Arca Rule 7.38– 

E and NYSE American 7.38E, except 

that, if the display price of an odd-lot 

order to buy (sell) is greater than (less 

than) its working price, the order would 

be ranked and allocated based on its 

display price.44

3. Tick Size Pilot Plan 

Proposed NYSE Rule 7.46 sets forth 

the rules for the Tick Size Pilot Plan. 

The Exchange represents that the 

proposed rule is based on NYSE 

American Rule 7.46E, except that: (1) 

The Exchange would not include text 

relating to Market Pegged Orders or 

Limit IOC Cross Orders (as the Exchange 

would not offer these orders); (2) 


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Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Notices 52761 

45The Exchange did not provide a reason for this 

rule change. 

46The Exchange proposes that current NYSE Rule 

67 (Tick Size Pilot Plan) would not be applicable 

for trading in UTP Securities on Pillar. 

47See Notice, supra note 3, 82 FR at 37270, for 

a list of NYSE rules that are not applicable to Pillar. 

48 15 U.S.C. 78s(b)(2). 

49 15 U.S.C. 78f(b)(5) and (b)(8). 

50 Id. 

51 Id. 

52 15 U.S.C. 78f(b)(8). 

53After Market Orders trade based on time and 

the order with Setter Priority, if eligible, receives an 

allocation, Proposed NYSE Rule 7.37(b) allocates 

orders based on parity by Participant. Proposed 

NYSE Rule 7.36(a)(5) defines Participant as a Floor 

broker trading license (a ‘‘Floor Broker Participant’’) 

or orders collectively represented in the Exchange 

Book that have not been entered by a Floor broker 

(‘‘Book Participant’’). 

proposed NYSE Rules 7.46(f)(5)(A) and 

(B) would govern ranking and allocation 

for Pilot Securities in Test Group Three 

instead of Rules 7.36(e) and 7.37(b)(1), 

respectively; 45 and (3) proposed NYSE 

Rules 7.46(f)(5)(F)(i)(a) and (b) are based 

on NYSE Arca Rules 7.46–E(f)(5)(F)(i)(a) 

and (b) because NYSE American does 

not offer Day ISO orders. Proposed 

NYSE Rules 7.46(f)(5)(F)(ii) and (iii) 

include ALO orders, which, like Day 

ISO orders, are not offered by NYSE 

American.46

B. Amendments to NYSE Rules 103B 

and 107B 

The Exchange proposes to amend 

NYSE Rule 103B(I) (Security Allocation 

and Reallocation) to state that UTP 

Securities will not be allocated to a 

DMM Unit. Also, the Exchange proposes 

to amend NYSE Rule 107B 

(Supplemental Liquidity Providers) to 

change ‘‘NYSE-listed securities’’ to 

‘‘NYSE-traded securities.’’ According to 

the Exchange, the change reflects that 

UTP Securities would be eligible for 

assignment to Supplemental Liquidity 

Providers. 

C. Retail Liquidity Program Not 

Available on Pillar 

The Exchange does not plan to offer 

a retail liquidity program for UTP 

Securities on Pillar. For this reason, the 

Exchange proposes that NYSE Rule 

107C would not apply to trading UTP 

Securities on Pillar. Also, proposed 

rules based on NYSE Arca rules that 

cross reference NYSE Arca Rule 7.44–E 

would not include that rule reference. 

D. Current NYSE Rules Not Applicable 

to Pillar 

Under the Exchange’s proposal, 

several current NYSE rules would not 

apply to trading in UTP Securities as 

they are superseded by the proposed 

rules. Several additional rules, which do 

not have counterparts in the proposed 

Pillar rules, would not apply to trading 

in UTP Securities as they are related to 

auctions and floor-based point-of-sale 

trading. Further information about 

current NYSE rules that would not 

apply to UTP trading on the Pillar 

platform can be found in the Notice.47

III. Proceedings To Determine Whether 

To Approve or Disapprove the Proposal 

The Commission is instituting 

proceedings pursuant to Section 19(b)(2) 

of the Act 48 to determine whether the 

Exchange’s proposed rule change 

should be approved or disapproved. The 

Commission believes it is appropriate to 

institute proceedings at this time in 

view of the legal and policy issues 

raised by the proposal, as discussed 

below. Institution of proceedings does 

not indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, as 

described in greater detail below, the 

Commission seeks and encourages 

interested persons to provide additional 

comment on the proposed rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act, the Commission is providing notice 

of the grounds for disapproval under 

consideration. In particular, the 

Commission is instituting proceedings 

to allow for additional analysis of the 

proposed rule change’s consistency with 

Sections 6(b)(5) and 6(b)(8) of the Act.49

Section 6(b)(5) requires, among other 

things, that the rules of a national 

securities exchange be designed ‘‘to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest.’’ 50 In addition, Section 

6(b)(5) of the Act prohibits the rules of 

an exchange from being ‘‘designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers.’’ 51 Section 6(b)(8) of the Act, 

requires that the rules of a national 

securities exchange ‘‘not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of [the Act].’’ 52

As discussed above, NYSE proposes 

to commence UTP trading of Tape B and 

C securities and to do so on its new 

Pillar trading platform. There would be 

no DMM assigned to UTP Securities; 

there would be no Floor-based point of 

sale for UTP Securities; the Exchange 

would not conduct auctions in UTP 

Securities; and the Exchange would 

allocate executions in UTP Securities 

using a modified version of its parity 

allocation system, granting one place on 

the allocation wheel to each Floor 

Broker Participant and one place on the 

allocation wheel to orders collectively 

represented in the Exchange Book. 

Additionally, Floor Brokers would be 

able to use certain order types, such as 

Pegging Orders, that would not be 

available to other market participants.53

The Commission seeks commenters’ 

views on whether the Exchange’s 

proposal is consistent with Section 

6(b)(5) and Section 6(b)(8) of the Act. In 

particular, the Commission seeks 

commenters’ view on the following 

questions. 

• Unlike the Exchange’s existing 

trading model for its listed securities, 

there would be no DMM assigned to 

UTP Securities, no Floor-based point of 

sale for UTP Securities, no Crossing 

Orders, and no auction in UTP 

Securities. Given these differences from 

the market structure in which Floor 

Brokers currently operate, what are 

commenters’ views on the role that 

Floor Brokers would play in trading 

UTP Securities on the Exchange? 

• What benefits or costs, if any, 

would the activities of Floor Brokers 

create for trading of UTP Securities on 

the Exchange? What benefits or costs, if 

any, would accrue to the customers of 

the Floor Brokers? Would these benefits 

or costs vary depending on the type of 

Floor Broker customer or the means the 

customer used to submit an order 

through a Floor Broker? What benefits 

or costs, if any, would accrue to 

participants on the Exchange that are 

not customers of a Floor Broker? 

• Would providing Floor Brokers 

with parity allocation in UTP Securities, 

or providing them with exclusive use of 

certain order instructions, unfairly 

discriminate against market participants 

who do not submit orders through a 

Floor Broker? Would providing parity to 

Floor Brokers, or providing them with 

exclusive use of certain order 

instructions, impose a burden on 

competition that is not necessary or 

appropriate? 

IV. Solicitation of Comments 

The Commission requests that 

interested persons provide written 

submissions of their views, data and 

arguments with respect to the concerns 

identified above, as well as any others 

they may have with the proposal. In 

particular, the Commission invites the 

written views of interested persons 

concerning whether the proposal is 

inconsistent with Section 6(b)(5), 

Section 6(b)(8), or any other provision of 

the Act, or the rules and regulation 


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52762 Federal Register / Vol. 82, No. 218 / Tuesday, November 14, 2017 / Notices 

54Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Act Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

55 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 81675 

(Sept. 21, 2017) 82 FR 45080. 

4Amendment No. 1, which amended and 

replaced the proposed rule change in its entirety, 

is available on the Commission’s Web site at: 

https://www.sec.gov/comments/sr-nysearca-2017- 

110/nysearca2017110-2653767-161379.pdf. 

5 15 U.S.C. 78s(b)(2). 

6 Id. 

7 17 CFR 200.30–3(a)(31). 

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

thereunder. Although there do not 

appear to be any issues relevant to 

approval or disapproval which would 

be facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.54

Interested persons are invited to 

submit written data, views and 

arguments regarding whether the 

proposal should be disapproved by 

December 5, 2017. Any person who 

wishes to file a rebuttal to any other 

person’s submission must file that 

rebuttal by December 19, 2017. 

Comments may be submitted by any 

of the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSE–2017–36 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 

Numbers SR–NYSE–2017–36. The 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 proposal that are 

filed with the Commission, and all 

written communications relating to the 

proposal 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSE–2017–36 and should 

be submitted on or before December 5, 

2017. Rebuttal comments should be 

submitted by December 19, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.55

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–24577 Filed 11–13–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82026; File No. SR– 

NYSEArca–2017–110] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Designation of a 

Longer Period for Commission Action 

on a Proposed Rule Change, as 

Modified by Amendment No. 1, To List 

and Trade Shares of the GraniteShares 

Platinum Trust Under NYSE Arca Rule 

8.201–E 

November 7, 2017. 

On September 12, 2017, NYSE Arca, 

Inc. (‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

list and trade shares of the 

GraniteShares Platinum Trust under 

NYSE Arca Rule 8.201–E. The proposed 

rule change was published for comment 

in the Federal Register on September 

27, 2017.3 On October 24, 2017, the 

Exchange filed Amendment No. 1 to the 

proposed rule change.4 The Commission 

has received no comments on the 

proposed rule change. 

Section 19(b)(2) of the Act 5 provides 

that, within 45 days of the publication 

of notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is November 11, 

2017. The Commission is extending this 

45-day time period. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to take action on the 

proposed rule change so that it has 

sufficient time to consider the proposed 

rule change, as modified by Amendment 

No. 1. Accordingly, the Commission, 

pursuant to Section 19(b)(2) of the Act,6

designates December 26, 2017, as the 

date by which the Commission should 

either approve or disapprove, or 

institute proceedings to determine 

whether to disapprove, the proposed 

rule change (File No. SR–NYSEArca– 

2017–110), as modified by Amendment 

No. 1. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–24575 Filed 11–13–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82034] 

Order Scheduling Filing of Statements 

on Review 

November 8, 2017. 

In the Matter of the Chicago Stock 

Exchange, Inc. 

For an Order Granting the Approval of 

Proposed Rule Change to Adopt the 

CHX Liquidity Enhancing Access 

Delay on a Pilot Basis (File No. SR– 

CHX–2017–04) 

On February 10, 2017, the Chicago 

Stock Exchange, Inc. (‘‘CHX’’ or 

‘‘Exchange’’) 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 


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