Document ID: SEC-2017-0832-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2017-05-22T04:00Z

[Federal Register Volume 82, Number 97 (Monday, May 22, 2017)]
[Notices]
[Pages 23361-23363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10299]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80695; File No. SR-NYSEMKT-2017-28]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change to Rule 994NY, 
Broadcast Order Liquidity Delivery Mechanism

May 16, 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 May 10, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE 
MKT'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.

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[[Page 23362]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to clarify a change to Rule 994NY, Broadcast 
Order Liquidity Delivery (``BOLD'') Mechanism. The proposed rule change 
is available on the Exchange's Web site at www.nyse.com, at the 
principal office of the Exchange, and at the Commission's Public 
Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the filing is to make a clarifying change to a 
recently adopted Exchange rule that governs the operation of the BOLD 
Mechanism.\4\ The BOLD Mechanism is a feature within the Exchange's 
trading system that would provide automated order handling for eligible 
orders in designated classes. Under the current rule, after trading 
with eligible interest on the Exchange, the BOLD Mechanism will 
automatically process an eligible incoming order that is marketable 
against quotations disseminated by other exchanges that are 
participants in the Options Order Protection and Locked/Crossed Market 
Plan. With respect to order handling, orders that are received by the 
BOLD Mechanism pursuant to the rule will be electronically exposed at 
the National Best Bid or Offer (``NBBO'') upon receipt for a period of 
time determined by the Exchange.
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    \4\ See Securities Exchange Act Release No. 80494 (April 20, 
2017), 82 FR 19300 (April 26, 2017) (SR-NYSEMKT-2017-21).
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    Regarding the allocation of exposed orders, the current rule states 
that any interest priced at the prevailing NBBO or better will be 
executed pursuant to Rule 964NY (Display, Priority and Order 
Allocation).\5\ Rule 964NY provides the allocation procedures for 
orders that are displayed. The Exchange proposes to amend current Rule 
994NY to clarify that orders processed by the BOLD Mechanism will be 
considered displayed during the exposure period and will be treated as 
displayed orders pursuant to Rule 964NY. The Exchange does not propose 
to modify current Rule 964NY or the operation of the BOLD Mechanism. 
The Exchange simply seeks to clarify current system functionality 
within the Exchange's rules. The Exchange believes the proposed 
amendment will provide ATP Holders and the investing public with 
greater transparency regarding the operation of the BOLD Mechanism.
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    \5\ NYSE Amex provides customer priority and size pro-rata 
allocation. Pursuant to Rule 964NY, customers at a given price are 
executed first in priority. Non-customers are executed on a pro-rata 
basis pursuant to the size pro rata algorithm set forth in Rule 
964NY(b)(3).
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2. Statutory Basis
    The Exchange believes that its proposal to amend its rules to 
provide additional specificity regarding the functionality of the BOLD 
Mechanism is consistent with the requirements of the Securities 
Exchange Act of 1934 (the ``Act'') and the rules and regulations 
thereunder that are applicable to a national securities exchange, and, 
in particular, with the requirements of Section 6(b) of the Act.\6\ In 
particular, the proposal is consistent with Section 6(b)(5) of the Act 
\7\ because it would promote just and equitable principles of trade, 
remove impediments to, and perfect the mechanism of, a free and open 
market and a national market system, and, in general, protect investors 
and the public interest. The Exchange believes that the clarifying 
change to the operation of the BOLD Mechanism would promote just and 
equitable principles of trade and remove impediments to a free and open 
market by providing greater transparency concerning the operation of 
Exchange functionality. The Exchange also believes that the proposed 
amendment will contribute to the protection of investors and the public 
interest by making the Exchange's rules easier to understand. Moreover, 
the Exchange believes that the additional clarity and transparency of 
the proposed rule change would promote the efficient execution of 
investor transactions, and thus strengthen investor confidence in the 
market. In addition, the Exchange believes that additional specificity 
in its rules will lead to a better understanding of the operation of 
the BOLD Mechanism, thereby facilitating fair competition among market 
participants.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change to 
adopt the BOLD Mechanism will impose any burden on competition not 
necessary or appropriate in furtherance of the purposes of the Act. The 
Exchange is not proposing to substantively modify the operation of the 
BOLD Mechanism; rather, it intends to enhance the clarity of current 
system functionality. The proposed rule change is not designed to 
address any competitive issues, but rather provide additional 
specificity and transparency to ATP Holders and the investing public 
regarding the operation of the BOLD Mechanism. Since the Exchange does 
not propose to substantively modify the operation of exchange 
functionality, the proposed rule change will not impose any burden on 
competition.

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, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) 
thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the

[[Page 23363]]

public interest. The Exchange has asked the Commission to waive the 30-
day operative delay so that the proposal may become operative 
immediately upon filing. The Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and 
the public interest as it will allow the Exchange to provide additional 
clarity and transparency regarding the operation of the BOLD Mechanism 
prior to the introduction of the functionality to market participants. 
Accordingly, the Commission hereby waives the operative delay and 
designates the proposal operative upon filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For 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).
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    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-NYSEMKT-2017-28 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-NYSEMKT-2017-28. 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-NYSEMKT-2017-28, and should 
be submitted on or before June 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-10299 Filed 5-19-17; 8:45 am]
 BILLING CODE 8011-01-P