Document ID: SEC-2015-1634-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2015-10-13T04:00Z

[Federal Register Volume 80, Number 197 (Tuesday, October 13, 2015)]
[Notices]
[Pages 61513-61527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25864]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76085; File No. SR-NYSEARCA-2015-86]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change for New Equity Trading Rules Relating to 
Auctions for Pillar, the Exchange's New Trading Technology Platform

 October 6, 2015.
    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 22, 2015, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes new equity trading rules relating to auctions 
for Pillar, the Exchange's new trading technology platform. The text of 
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
    On April 30, 2015, the Exchange filed its first rule filing 
relating to the implementation of Pillar, which is an integrated 
trading technology platform designed to use a single specification for 
connecting to the equities and options markets operated by NYSE Arca 
and its affiliates, New York Stock Exchange LLC (``NYSE'') and NYSE MKT 
LLC (``NYSE MKT'').\4\ The Pillar I Filing, which was approved on July 
20, 2015, adopted new rules for Trading Sessions, Order Ranking and 
Display, and Order Execution.\5\ The second rule filing relating to the 
implementation of Pillar proposes to adopt new rules for Orders and 
Modifiers and the Retail Liquidity Program.\6\ The third rule filing 
relating to the implementation of Pillar proposes to adopt new rules 
for Trading Halts, Short Sales, Limit Up-Limit Down, and Odd Lots and 
Mixed Lots.\7\
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    \4\ See Securities Exchange Act Release No. 74951 (May 13, 
2015), 80 FR 28721 (May 19, 2015) (SR-NYSEArca-2015-38) (Notice of 
Filing) (``Pillar I Filing''). In the Pillar I Filing, the Exchange 
described its proposed implementation of Pillar, including that it 
would be submitting more than one rule filing to correspond to the 
anticipated phased migration to Pillar.
    \5\ See Securities Exchange Act Release No. 75494 (July 20, 
2015), 80 FR 44170 (July 24, 2015) (SR-NYSEArca-2015-38) (Pillar I 
Filing Approval Order).
    \6\ See Securities Exchange Act Release No. 75497 (July 21, 
2015), 80 FR 45022 (July 28, 2015) (SR-NYSEArca-2015-56) (Notice of 
Filing) (``Pillar II Filing'').
    \7\ See Securities Exchange Act Release No. 75467 (July 16, 
2015), 80 FR 43515 (July 22, 2015) (SR-NYSE-2015-58) (Notice of 
Filing) (``Pillar III Filing'').
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    This filing is the fourth and final set of proposed rule changes to 
support Pillar implementation and is intended to be read together with 
the rules approved in the Pillar I Filing, and the proposed rule 
changes in the Pillar II Filing and the Pillar III Filing. As described 
in the Pillar I Filing, new rules to govern trading on Pillar will have 
the same numbering as current rules, but with the modifier ``P'' 
appended to the rule number. For example, Rule 7.35, governing 
auctions, would remain unchanged and continue to apply to any trading 
in symbols on the current trading platform. Proposed Rule 7.35P would 
govern auctions for trading in symbols migrated to the Pillar platform. 
In addition, the proposed new rules to support Pillar in this filing 
would use the terms and definitions approved in the Pillar I Filing and 
proposed in the Pillar II Filing and Pillar III Filing.\8\
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    \8\ Capitalized terms not proposed to be defined in this filing 
are the defined terms set forth in the Pillar I Filing, Pillar II 
Filing, Pillar III Filing, or in Exchange rules.
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    In this filing, the Exchange proposes new Pillar Rule 7.35P 
relating to auctions. The Exchange also proposes to change definitions 
in Rule 1.1.
Rule 1.1 Definitions
    Rule 1.1 sets forth definitions. In the Pillar I Filing, the 
Exchange amended specified definitions and, in the Pillar II Filing and 
the Pillar III Filing, proposed additional amendments to Rule 1.1.\9\ 
In this filing, the Exchange proposes to amend Rules 1.1(r) and (s) to 
specify that these definitions would be applicable only for auctions 
conducted on the current trading platform.
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    \9\ As discussed in the Pillar I Filing, supra note 4, the 
Exchange appended the letter ``P'' for definitions that only would 
be applicable for symbols trading on the Pillar trading platform.
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    Current Rule 1.1(r) defines an Imbalance for the purposes of the 
Opening Auction, the Market Order Auction, the Closing Auction, and the 
Trading Halt Auction. Current Rule 1.1(s) defines the Indicative Match 
Price for the Opening Auction, the Market Order Auction, the Closing 
Auction, and the Trading Halt Auction. As discussed below, the Exchange 
proposes to define the terms ``Imbalance'' and ``Indicative Match 
Price'' for Pillar in Rule 7.35P, and therefore would not use these 
terms as defined in current Rules 1.1(r) and (s).
    In order to specify that the current Rules 1.1(r) and (s) 
definitions would be applicable only to trading on the current trading 
platform, the Exchange proposes to specify that each definition is for 
purposes of Rule 7.35 and delete the clause in each definition that 
provides ``the Opening Auction, the Market Order Auction, the Closing 
Auction, and the trading Auction, as the case may be.'' Because Rule 
7.35 governs auctions on the current trading platform, by specifying 
that these definitions are for purposes of Rule 7.35, these definitions 
would not be applicable to Rule 7.35P, which will govern auctions on 
Pillar.
Proposed New Rule 7.35P--Auctions
    The Exchange proposes new Rule 7.35P to describe auctions on the 
Pillar trading platform and is based on current Rule 7.35 and Rules 
1.1(r) and (s). Auctions in Pillar would function

[[Page 61514]]

similarly to auctions on the current trading platform. However, as with 
other proposed Pillar rules, the Exchange proposes new rule text for 
Rule 7.35P that uses Pillar terminology that includes both substantive 
and non-substantive differences and clarifications from the current 
rule text.
    For example, consistent with Rule 7.34P, in proposed Rule 7.35P, 
the Exchange would use Pillar terminology, including the terms ``Early 
Open Auction'' instead of ``Opening Auction,'' ``Core Open Auction'' 
instead of ``Market Order Auction,'' and the terms Early Trading 
Session, Core Trading Session, and Late Trading Session. In addition, 
proposed Rule 7.35P would use terms defined in Rule 7.36P, including 
terms relating to the priority ranking of orders in Pillar. Further, 
the Exchange proposes to include in Rule 7.35P the definitions that are 
used for auctions rather than have them be set forth in Rule 1.1.
    The Exchange also proposes the following substantive differences 
for auctions in Pillar:
     Consistent with the substantive difference proposed in the 
Pillar II Filing that MOO Orders would participate in Trading Halt 
Auctions, the term ``Market Orders'' in proposed Rule 7.35P would also 
mean MOO Orders for the Trading Halt Auction, unless otherwise 
specified. In addition, because in Pillar, unexecuted Market Orders 
would participate in the Closing Auction, for the Closing Auction, the 
term ``Market Orders'' would include MOC Orders, unless otherwise 
specified.
     The securities eligible to participate in an auction, 
i.e., ``Auction-Eligible Securities,'' would be defined more broadly to 
provide the Exchange with the ability to conduct auctions in all 
securities that trade on the Exchange.
     The Exchange would consolidate existing definitions 
relating to auctions in proposed Rule 7.35P and would create new 
definitions for Pillar for the terms Auction Processing Period, Auction 
Imbalance Freeze, Auction NBBO, Auction Ranking, and Auction Reference 
Price.\10\
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    \10\ Capitalized terms used in proposed Rule 7.35P are described 
below.
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     Auction Imbalance Information would be updated at least 
every second, rather than on a real-time basis, both for the 
proprietary data feed dissemination and for determining order entry 
eligibility during the applicable Auction Imbalance Freeze period.
     The Exchange is proposing a new term, ``Auction NBBO,'' 
which would be used as the basis for pricing the Core Open Auction and 
the Indicative Match Price for the Closing Auction when that auction 
consists only of Market Orders.
     The Exchange would allocate orders on the side of the 
Imbalance the same for all auctions and would consolidate the 
description of such ranking in the new defined term ``Auction 
Ranking.'' MOO and MOC Orders would be ranked Priority 1--Market 
Orders, LOO Orders and LOC Orders would be ranked as Priority 2--
Display Orders, and the limit price of an order would be used for 
ranking purposes,
     During a Short Sale Period, for purposes of pricing an 
auction and ranking orders for allocation in an auction, sell short 
orders that have been adjusted to a Permitted Price would be processed 
as Limit Orders ranked Priority 2--Display Orders. In addition, for 
Auction Imbalance Information, sell short orders that are not yet 
eligible to trade would be adjusted to a Permitted Price as the NBB 
moves up and down.\11\
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    \11\ In Pillar, the term ``Short Sale Period'' would be defined 
in proposed Rule 7.16P(f)(4) and the term ``Permitted Price'' would 
be defined in proposed Rule 7.16P(f)(5)(A). See Pillar III Filing, 
supra note 7. The term ``NBB'' is defined in Rule 1.1(dd).
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     The Market Imbalance would be Market Orders not matched 
for trading in an auction against any interest, and not just Market 
Orders not matched for trading against other Market Orders.
     To attract interest for an auction, the Exchange would 
publish an Indicative Match Price value when there is no Matched Volume 
but there is a published BBO.\12\ If the BB equals the BO volume, the 
Exchange would use the BB as the Indicative Match Price.
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    \12\ In Rule 1.1(h), the term ``BBO'' is defined as the best bid 
or offer on the NYSE Arca Marketplace, the term ``BB'' means the 
best bid on the NYSE Arca Marketplace, and the term ``BO'' means the 
best offer on the NYSE Arca Marketplace. The term ``NYSE Arca 
Marketplace'' is defined in Rule 1.1(e) as the electronic securities 
communications and trading facility designated by the Board of 
Directors through which orders of Users are consolidated for 
execution and/or display.
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     The Indicative Match Price would be determined for all 
securities in the same manner regardless of whether the Exchange is the 
primary listing market for a security or the security is a UTP 
Security.
     The Auction Reference Price for purposes of determining 
the Indicative Match Price and Auction Collars for the Core Open 
Auction would be based on the midpoint of an Auction NBBO and would use 
the prior trading day's Official Closing Price if there is no Auction 
NBBO.
     The Exchange would conduct a Closing Auction if there are 
only Market Orders on both sides of the market, in which case, the 
Indicative Match Price would be the midpoint of the Auction NBBO. For 
the Core Open Auction, if there are only Market Orders, the Indicative 
Match Price would also be the midpoint of the Auction NBBO.
     An Indicative Match Price that is outside the Auction 
Collars would be adjusted to be one MPV inside the Auction Collars, 
rather than to the Auction Collar.\13\
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    \13\ Rule 7.6 defines the term MPV as the minimum price 
variation for quoting and entry of orders.
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     As specified in Rule 7.34P, because the Core Open Auction 
would be conducted in the Core Trading Session and not the Early 
Trading Session, orders designated for the Early Trading Session would 
not be eligible to participate in the Core Open Auction.
     There would not be any order entry or cancellation 
restrictions during the one-minute Auction Imbalance Freeze before the 
Early Open Auction.
     The Core Open Auction Imbalance Freeze would be five 
seconds, instead of one minute, and during this period, MOO Orders and 
LOO Orders would be rejected regardless of the Imbalance. In addition, 
during the Core Open Auction Imbalance Freeze, the Exchange would 
accept Market Orders and Limit Orders designated for the Core Trading 
Session only on both sides of the market, but such orders would be 
eligible to participate in the auction only to offset the Imbalance as 
of the time of the scheduled Auction, and requests to cancel such 
orders would not be processed until after the Core Open Auction 
concludes. All other order instructions would be accepted during the 
Core Open Auction Imbalance Freeze. As with the current trading 
platform, requests to cancel MOO Orders and LOO Orders entered 
beginning one minute before the scheduled time for the Core Open 
Auction would be rejected.
    Definitions: Proposed Rule 7.35P(a) would set forth definitions 
used in Rule 7.35P and is based on text from Rules 1.1(r) and (s) as 
well as rule text throughout Rule 7.35.
    Rule 7.35P(a) would provide that for purposes of proposed Rule 
7.35P, unless otherwise specified, the term ``Market Orders'' includes 
MOO Orders (for the Core Open Auction and Trading Halt Auction) and MOC 
Orders (for the Closing Auction). With respect to the Core Open 
Auction, this text is based on the last clause of current Rule 7.35(c), 
which provides that unless stated otherwise, for the Market Order 
Auction, reference to Market Orders shall include MOO Orders.
    With respect to the Trading Halt Auction, the Exchange proposes a

[[Page 61515]]

substantive difference in Rule 7.35P to provide that Market Orders 
would include MOO Orders. This proposed substantive difference is 
consistent with the proposal in the Pillar II Filing that in Pillar, 
MOO Orders would be eligible to participate in a Trading Halt 
Auction.\14\
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    \14\ See Pillar II Filing, supra note 6 at proposed Rule 
7.31P(c)(2).
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    The Exchange further proposes to include in Rule 7.35P(a) that for 
the Closing Auction, Market Orders would include MOC Orders. Current 
Rule 7.35(e) refers only to MOC Orders for Closing Auctions. However, 
because unexecuted Market Orders that are held at a Trading Collar or 
NBBO would be eligible to participate in the Closing Auction and would 
be included in Closing Auction Imbalance Information, the Exchange 
proposes that Rule 7.35P would refer to Market Orders generally for the 
Closing Auction, which would include MOC Orders.\15\
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    \15\ Id. at proposed Rule 7.31P(a)(1)(A) and (B).
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    The Exchange proposes the following definitions for purposes of 
Rule 7.35P:
    Auction-Eligible Security. Proposed Rule 7.35P(a)(1)(A) would 
define an ``Auction-Eligible Security'' for the Early Open Auction, 
Core Open Auction, and Closing Auction, as all securities for which the 
Exchange is the primary listing market and UTP Securities \16\ 
designated by the Corporation.\17\ This rule text is based on the first 
sentence of the first paragraph of current Rule 7.35(c),\18\ Rule 
7.35(c)(1)(A), 7.35(c)(2)(A), 7.34(c)(3)(A), and the first sentence of 
the first paragraph of Rule 7.35(e), which provide that the Market 
Order Auction and Closing Auction will be conducted in exchange-listed 
securities, including: (i) Exchange-listed securities for which the 
Corporation is the primary market and (ii) all exchange-listed 
Derivative Securities Products as defined in Rule 7.34(a)(4)(A).\19\
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    \16\ The Exchange has proposed to define the term ``UTP 
Security'' to mean a security that is listed on a national 
securities exchange other than the Exchange and that trades on the 
NYSE Arca Marketplace pursuant to unlisted trading privileges. See 
Pillar III Filing, supra note 7 at proposed Rule 1.1(ii).
    \17\ The term ``Corporation'' is defined in Rule 1.1(k) as NYSE 
Arca Equities, Inc., as described in NYSE Arca Equities, Inc.'s 
Certificate of Incorporation and Bylaws.
    \18\ In Pillar, the subject matter of the second sentence of 
Rule 7.35(c) is set forth in Rule 7.34P(c)(2)(A).
    \19\ Current Rule 7.34(a)(4)(A) defines a ``Derivative 
Securities Product'' as a security described in NYSE Arca Equities 
Rules 5.1(b)(13), 5.1(b)(18), 5.2(j)(3), 8.100, 8.200, 8.201, 8.202, 
8.203, 8.204, 8.300, 8.400, 8.500, 8.600 and 8.700. The Exchange now 
defines the terms ``Derivative Securities Product'' and ``UTP 
Derivative Securities Product,'' in Rule 1.1(bbb).
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    As with the current rule, all securities for which the Exchange is 
the primary listing market would be Auction-Eligible Securities. The 
Exchange proposes a substantive difference for Pillar to provide that 
the Exchange would designate UTP Securities that would be Auction-
Eligible Securities. This proposed rule text would allow, as under the 
current rules, for the Exchange to conduct auctions in UTP Derivative 
Securities Products. It would also allow the Exchange to designate Tape 
A, B, or C securities that are not UTP Derivative Securities Products 
as being auction eligible. The Exchange believes this proposed rule 
change would support the initiatives of the Exchange, NYSE, and the 
NASDAQ Stock Market LLC (``Nasdaq'') to increase resiliency by having 
auctions on NYSE Arca serve as a back-up to either NYSE or Nasdaq if 
one of those markets is unable to conduct an auction.\20\
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    \20\ See NYSE press release dated July 22, 2015, available here: 
http://ir.theice.com/press-and-publications/press-releases/all-categories/2015/07-22-2015.aspx.
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    Proposed Rule 7.35P(a)(1)(B) would define Auction-Eligible 
Securities for the Trading Halt Auction as securities for which NYSE 
Arca is the primary listing market. This proposed rule text is 
consistent with the substantive difference proposed in the Pillar III 
Filing that the Exchange would not conduct a Trading Halt Auction in a 
UTP Security.\21\
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    \21\ See Pillar III Filing, supra note 7 at proposed Rule 
7.18P(b).
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    Auction Processing Period. Proposed Rule 7.35P(a)(2) would define 
the term ``Auction Processing Period'' to mean the period during which 
the applicable auction is being processed. This definition would be new 
in Pillar.
    Auction Imbalance Freeze. Proposed Rule 7.35P(a)(3) would define 
the term ``Auction Imbalance Freeze'' to mean the period that begins 
before the scheduled time for the Early Open Auction, Core Open 
Auction, or Closing Auction, which would be specified in paragraphs 
(b), (c), and (d) in proposed Rule 7.35P, as described below, and 
ending once the Auction Processing Period begins. The Auction Imbalance 
Freeze would be a new defined term in Rule 7.35P that would represent 
the period before the commencement of the Auction Processing Period 
during which Auction Imbalance Information may differ or order entry 
eligibility may be restricted. Currently, this period is described in 
Rules 7.35(a)(4), 7.35(c)(2)(A)(2) and (3), 7.35(d)(1) and (2), 
7.35(e)(2)(B) and (C), but is not a defined term. The Exchange proposes 
to use a defined term to describe this period for clarity.
    Auction Imbalance Information. Proposed Rule 7.35P(a)(4) would 
define the term ``Auction Imbalance Information'' to mean the 
information that is disseminated by the Corporation for an auction and 
includes, if applicable, the Total Imbalance, Market Imbalance, 
Indicative Match Price, and Matched Volume, each of which are proposed 
to be separately defined terms and are described below. The Auction 
Imbalance Information would be a new defined term in Rule 7.35P to 
refer collectively to the information that the Exchange currently 
provides in advance of an auction and, in Pillar, would continue to 
provide in advance of an auction.\22\ As described in greater detail 
below, using a single defined term would provide clarity in Exchange 
rules by using a common term to describe the information that is 
disseminated in advance of an auction.
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    \22\ The Exchange disseminates order imbalance information in 
advance of auctions through its NYSE Arca Integrated Data Feed. See 
Securities Exchange Act Release No. 65669 (Nov. 2, 2011), 76 FR 
69311 (Nov. 8, 2011) (SR-NYSEArca-2011-78).
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    Proposed Rule 7.35P(a)(4)(A) would provide that Auction Imbalance 
Information would be updated at least every second, unless there is no 
change to the information. The frequency of how often Auction Imbalance 
Information would be updated is based on rule text from Rules 
7.35(a)(3) (imbalance information before the Opening Auction will be 
published at ``various times . . . as determined from time to time by 
the Corporation''), 7.35(c)(1)(A)(1) (imbalance information before the 
Market Order Auction will be ``updated real-time''), 7.35(e)(1) 
(imbalance information before the Closing Auction will be ``updated 
real-time''), and 7.35(f)(2)(A) (imbalance information before a Trading 
Halt Auction will be ``updated real-time'').
    The Exchange proposes a substantive difference in Pillar that 
Auction Imbalance Information would be updated at least every second, 
unless there is no change to the information. To reflect that order 
entry eligibility would be based on the Imbalance that is updated on 
this schedule, if applicable for the respective auction as described 
below, proposed Rule 7.35P(a)(4)(B) would provide that order entry 
eligibility during an Auction Imbalance Freeze would be based on the 
most recently-updated Auction Imbalance Information.
    In addition, to reflect that in Pillar the Exchange would 
disseminate Auction Imbalance Information via a proprietary market data 
feed, proposed Rule

[[Page 61516]]

7.35P(a)(4)(C) would provide that the Corporation would disseminate 
Auction Imbalance Information via a proprietary data feed during the 
times specified in Rule 7.35P.\23\
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    \23\ This information is currently disseminated as part of the 
Exchange's NYSE Arca Integrated feed proprietary data product and 
would continue to be disseminated on this proprietary data feed in 
Pillar. In addition, for Pillar, the Exchange proposes to establish 
through a separate proposed rule change a stand-alone proprietary 
data feed that would disseminate Auction Imbalance Information only.
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    Auction NBBO. Proposed Rule 7.35P(a)(5) would define the term 
``Auction NBBO,'' which would be a new term in Pillar, as an NBBO \24\ 
that is used for purposes of pricing an auction. As described in 
greater detail below, the Exchange proposes to use the Auction NBBO as 
a basis for determining the Auction Reference Price for the Core Open 
Auction and for determining the Indicative Match Price in specified 
situations for the Closing Auction. As proposed, an NBBO would be an 
Auction NBBO when:
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    \24\ In Rule 1.1(dd), the term ``NBBO'' means the best bid or 
offer and the term ``NBB'' means the national best bid and the term 
``NBO'' means the national best offer.
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     There is an NBB above zero and NBO for the security; and
     The NBBO is not crossed
    In addition, for the Core Open Auction, the Exchange proposes that 
an NBBO would be an Auction NBBO when the midpoint of the NBBO when 
multiplied by the designated percentage, is greater than or equal to 
the spread of that NBBO. As further proposed, the designated percentage 
would be determined by the Corporation from time to time upon prior 
notice to ETP Holders. The proposed method for determining an Auction 
NBBO for the Core Open Auction is designed to validate whether an NBBO 
bears a relation to the value of the applicable security.
    The proposed definition of Auction NBBO is based in part on BATS 
Exchange, Inc. (``Bats'') Rule 11.23(a)(23), which defines a ``Valid 
NBBO'' as when there is both an NBB and NBO for a security, the NBBO is 
not crossed, and the midpoint of the NBBO is less than the Maximum 
Percentage way from both the NBB and the NBO. The Exchange proposes to 
include greater specificity than the Bats rule to describe that the 
requirement to have both an NBB and an NBO means that the NBB cannot be 
zero.
    In addition to requiring an NBB that is above zero and an NBBO that 
is not crossed, for the Core Open Auction, the Exchange proposes to 
validate whether an NBBO bears a relation to the value of the security. 
Similar to Bats, the Exchange would compare the midpoint price to the 
NBBO. However, unlike Bats, the Exchange proposes to multiply the 
midpoint by a designated percentage and compare this value to the 
spread of the NBBO. If the value of the midpoint when multiplied by the 
designated percentage is greater than or equal to the spread of the 
NBBO, the Exchange would use the NBBO as an Auction NBBO. The Exchange 
believes that if the NBBO spread is greater than the value of the 
midpoint as multiplied by the designated percentage, it would indicate 
that the spread is too wide, and therefore may not be representative of 
the value of the security. In such scenario, the NBBO would not be 
considered an Auction NBBO and therefore would not be used as an 
Auction Reference Price for the Core Open Auction.
    Bats determines the Maximum Percentage for determining its Valid 
NBBO and publishes that percentage to its members via a Circular. The 
Exchange proposes to similarly specify the designated percentage used 
for determining the Auction NBBO for the Core Open Auction via Trader 
Update. The Exchange believes that it is consistent with a fair and 
orderly market and the protection of investors and the public to be 
able to change the designated percentage on notice to ETP Holders 
because such flexibility would provide the Exchange with the ability to 
respond quickly to market-wide events that may warrant use of a 
different designated percentage.
    Auction Ranking. Proposed Rule 7.35P(a)(6) would define the term 
``Auction Ranking'' to mean how orders on the side of an Imbalance 
would be ranked for allocation in an auction. This proposed definition 
would be a new term in Pillar and is based on text from current Rule 
7.35(c)(2)(A)(1)(i)-(iv), which describes the priority of executions of 
orders on the side of the imbalance for the Market Order Auction,\25\ 
Rule 7.35(e)(2)(A)(i)-(iii), which describes the priority of executions 
of orders on the side of the imbalance for the Closing Auction,\26\ and 
Rule 7.35(f)(3)(A)(i)-(ii), which describes the priority of executions 
of orders on the side of the imbalance for the Trading Halt 
Auction.\27\
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    \25\ The current priority specified in Rule 7.35(c)(2)(A)(1)(i)-
(iv) is Market Orders, Limit Orders eligible for the Opening 
Session, Limit Orders designated for the Core Trading Session and 
entered before 6:29 a.m. (Pacific Time), and LOO Orders.
    \26\ The current priority specified in Rule 7.35(e)(2)(A)(i)-
(iii) is MOC Orders, Limit Orders eligible prior to the Closing 
Auction, and LOC Orders.
    \27\ The current priority specified in Rule 7.35(f)(3)(A)(i)-
(ii) is Market Orders and then Limit Orders.
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    The Exchange proposes a substantive difference in Pillar to 
allocate orders on the side of the Imbalance the same for all auctions 
and therefore would consolidate the description of how orders would be 
allocated in a single definition of Auction Ranking in new Rule 
7.35P(a)(6). As proposed, orders on the side of an Imbalance would be 
ranked in price-time priority under Rule 7.36P(c)-(g) consistent with 
the priority ranking associated with each order.\28\ Accordingly, 
Market Orders would trade first in priority, then at each price point, 
orders ranked Priority 2--Display Orders would trade before orders 
ranked Priority 3--Non-Display Orders.\29\ In addition, the Exchange 
proposes the following for auctions:
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    \28\ Proposed Rule 7.31P would specify the priority ranking 
associated with specific orders. See Pillar II Filing, supra note 6.
    \29\ The only order ranked Priority 3mNon-Display Orders that 
would be eligible to participate in an auction is the non-displayed 
quantity of a Reserve Order.
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     As proposed in Rule 7.35P(a)(6)(A), Limit Orders, LOO 
Orders, and LOC Orders would be ranked based on their limit price and 
not the price at which they would participate in the auction.\30\ A 
Limit Order, LOO Order, or LOC Order to buy (sell) priced higher 
(lower) than the Indicative Match Price would be eligible to 
participate in the auction at the Indicative Match Price, not the 
order's limit price. The Exchange proposes, however, to use the order's 
limit price for ranking purposes.
---------------------------------------------------------------------------

    \30\ The term ``limit price'' is defined in Rule 7.36P(a)(2) as 
the highest (lowest) specified price at which a Limit Order to buy 
(sell) is eligible to trade.
---------------------------------------------------------------------------

     As proposed in Rule 7.35P(a)(6)(B), MOO Orders and MOC 
Orders would be ranked Priority 1--Market Orders. This priority is 
based on current Rule 7.35(c), which provides that Market Orders 
includes MOO Orders, and then provides that Market Orders are executed 
first, but uses Pillar terminology to specify the priority ranking for 
MOO Orders and MOC Orders.
     As proposed in Rule 7.35P(a)(6)(C), LOO Orders and LOC 
Orders would be ranked in time priority with Limit Orders ranked 
Priority 2--Display Orders. For the Core Open Auction, this proposed 
ranking of LOO Orders would be a substantive difference in Pillar and 
differs from the ranking set forth in current Rule 7.35(c)(2)(1)(ii)-
(iv), which provides priority to Limit Orders eligible for the Opening 
Session first, then Limit Orders designated for the

[[Page 61517]]

Core Trading Session and entered before 6:29 a.m. (Pacific Time), and 
finally LOO Orders. For the Closing Auction, this proposed ranking of 
LOC Orders would be a substantive difference in Pillar and differs from 
the ranking set forth in current Rule 7.35(e)(2)(A)(i)-(iii), which 
provides priority to Limit Orders entered before the Closing Auction 
before LOC Orders. Finally, for the Trading Halt Auction, this proposed 
ranking of LOO Orders would be a substantive difference in Pillar 
because LOO Orders do not currently participate in a Trading Halt 
Auction.\31\
---------------------------------------------------------------------------

    \31\ The Exchange has proposed a substantive difference in 
Pillar that MOO Orders and LOO Orders would be eligible to 
participate in Trading Halt Auctions. See Pillar II Filing, supra 
note 6, at proposed Rule 7.31P(c)(1) and (2).
---------------------------------------------------------------------------

     As proposed in Rule 7.35P(a)(6)(D), orders on the side of 
the Imbalance would not be guaranteed to participate in an auction. 
This proposed rule text would be new in Pillar and makes explicit that 
the reason why orders are ranked for an auction is because not all 
orders on the side of the Imbalance are guaranteed to participate in an 
auction.
    Imbalance. Proposed Rule 7.35P(a)(7) would define the term 
``Imbalance'' to mean the number of buy (sell) shares that cannot be 
matched with sell (buy) shares at the Indicative Match Price at any 
given time and unless otherwise specified, includes the non-displayed 
quantity of Reserve Orders eligible to participate in the applicable 
auction. This proposed rule text is based on current Rule 1.1(r)(1), 
which defines the term ``Imbalance'' as the number of buy or sell 
shares that cannot be matched with other shares at the Indicative Match 
Price at any given time, with non-substantive differences regarding how 
buy and sell orders are described. The Exchange proposes an additional 
non-substantive difference to provide greater specificity in Pillar 
that unless otherwise specified (and as described below), the Imbalance 
would include information about the non-display quantity of Reserve 
Orders.
    Total Imbalance. Proposed Rule 7.35P(a)(7)(A) would define the term 
``Total Imbalance'' to mean the net Imbalance of all buy (sell) shares 
at the Indicative Match Price for all orders that are eligible to trade 
in the applicable auction. This proposed rule text is based on current 
Rule 1.1(r)(1)(A), which defines the term ``Total Imbalance'' as the 
net imbalance of buy (sell) shares at the Indicative Match price for 
all orders that are eligible for execution during the applicable 
auction, with non-substantive differences to use the term ``to trade'' 
instead of ``for execution.''
    Market Imbalance. Proposed Rule 7.35P(a)(7)(B) would define the 
term ``Market Imbalance'' to mean the imbalance of any remaining buy 
(sell) Market Orders that are not matched for trading in the applicable 
auction. This proposed rule text is based on current Rule 
1.1(r)(1)(B)(i) and (ii), which provides that the Market Imbalance, as 
it relates to the Market Order Auction, is the imbalance of any 
remaining buy (sell) Market Orders that are not matched for execution 
against Market Orders during the applicable auction and as it relates 
to the Closing Auction, the imbalance of any remaining buy (sell) 
Market-on-Close Orders that are not matched for execution against 
Market-on-Close Orders during the applicable auction.
    The Exchange proposes a substantive difference in Pillar regarding 
how it would calculate the Market Imbalance. As proposed, the Market 
Imbalance would be the volume of Market Orders that are not paired off 
with any interest, including Limit Orders. By contrast, under current 
rules, the Market Imbalance only shows the Market Orders that are not 
paired off with other Market Orders. The Exchange believes that this 
proposed substantive difference would provide transparency regarding 
the volume of Market Orders that are not paired up against any 
interest. The Exchange also proposes a non-substantive difference to 
use the term ``Market Orders'' generally for all applicable auctions, 
and not use the term ``Market-on-Close Orders'' for the Closing 
Auction. As discussed above, unless stated otherwise, the term ``Market 
Orders'' in Rule 7.35P would include MOO Orders or MOC Orders, as 
applicable.
    Indicative Match Price. Proposed Rule 7.35P(a)(8) would define 
``Indicative Match Price'' to mean the best price at which the maximum 
volume of shares, including the non-displayed quantity of Reserve 
Orders, is tradable in the applicable auction, subject to the Auction 
Collars. This proposed rule text is based on current Rule 1.1(s), which 
provides that the term ``Indicative Match Price'' means the best price 
at which the maximum volume of shares are executable. The Exchange 
proposes non-substantive differences to use the term ``tradable'' 
instead of ``executable,'' refer to Auction Collars, and to add clarity 
to the definition to specify that the non-displayed quantity of Reserve 
Orders would be included for purposes of determining the Indicative 
Match Price.
    Proposed Rule 7.35P(a)(8)(A)-(E) would provide greater specificity 
regarding how the Indicative Match Price in Pillar would be determined 
in different scenarios.
    Proposed Rule 7.35P(a)(8)(A) would provide that if there are two or 
more prices at which the maximum volume of shares is tradable, the 
Indicative Match Price would be the price closest to the Auction 
Reference Price, which would be specified in the rule text as follows:

------------------------------------------------------------------------
              Auction                      Auction reference price
------------------------------------------------------------------------
Early Open Auction................  Prior trading day's Official Closing
                                     Price.
Core Open Auction.................  The midpoint of the Auction NBBO or,
                                     if the Auction NBBO is locked, the
                                     locked price. If there is no
                                     Auction NBBO, the prior day's
                                     Official Closing Price.
Closing Auction...................  Last consolidated round-lot price of
                                     that trading day and, if none, the
                                     prior trading day's Official
                                     Closing Price.
Trading Halt Auction..............  Last consolidated round-lot price of
                                     that trading day and, if none, the
                                     prior trading day's Official
                                     Closing Price.
IPO Auction.......................  Zero, unless the Corporation is
                                     provided with a price for the
                                     security.
------------------------------------------------------------------------

    This rule text is based on current Rule 1.1(s), which provides that 
if there are two or more prices at which the maximum volume of shares 
are executable, the price that is closest to the closing price of the 
previous trading day's normal market hours (or, in the case of a 
Closing Auction or a Trading Halt Auction, the last sale during normal 
market hours), as determined by the consolidated tape will establish 
the opening price (or the closing price in the case of a Closing 
Auction). The Exchange proposes in Rule 7.35P(a)(8)(A) to add a new 
defined

[[Page 61518]]

term, the ``Auction Reference Price,'' to describe the prices used for 
determining the Indicative Match Price for auctions.
     For the Early Open Auction, the Exchange proposes that the 
Auction Reference Price would be the prior trading day's Official 
Closing Price. This proposed rule text is based on current rule text in 
Rule 1.1(s) that the Opening Auction uses the closing price of the 
previous trading day's normal market hours, with a non-substantive 
difference to use the term ``Official Closing Price,'' which would be a 
new defined term in Pillar.\32\
---------------------------------------------------------------------------

    \32\ See Pillar III Filing, supra note 7 at proposed Rule 
1.1(ggP).
---------------------------------------------------------------------------

     For the Core Open Auction, the Exchange proposes a 
substantive difference in Pillar that the Auction Reference Price would 
be the midpoint of the Auction NBBO or, if the Auction NBBO is locked, 
the locked price. The Exchange further proposes that if there is no 
Auction NBBO, e.g., the NBBO does not qualify as an Auction NBBO under 
proposed Rule 7.35P(a)(5), the Exchange would use the prior trading 
day's Official Closing Price as the Auction Reference Price. Because 
the Indicative Match Price would be included in the information for the 
Auction Imbalance Information, and because the Auction Reference Price 
for the Core Open Auction would be based on the Auction NBBO, the 
Exchange would begin calculating an Auction NBBO at the same time it 
begins disseminating Auction Imbalance Information for the Core Open 
Auction, described below.
     For the Trading Halt Auction and Closing Auction, the 
Exchange proposes that the Auction Reference Price would be the last 
consolidated round-lot price of that trading day and, if none, the 
prior trading day's Official Closing Price. This Auction Reference 
Price would be based on current rule text in Rule 1.1(s), with non-
substantive differences to provide more specificity that it would be a 
last consolidated round-lot price of that trading day, and to provide 
specificity regarding which reference price to use if there were no 
last consolidated round lot trades that day.
     For an IPO Auction, the Exchange proposes that the Auction 
Reference Price would be zero unless the Corporation is provided with a 
price for the security. This proposed rule text would be new for 
Pillar. As is currently used for an IPO Auction, the Exchange proposes 
to use zero as the Auction Reference Price if there are two prices at 
which the maximum volume of shares can be traded because there would 
not be any prior trading in that security. In Pillar, the Exchange 
proposes to add the ability to use a value other than zero in such 
cases if, for example, on the first day of trading of a new listing of 
a Derivative Securities Product, the Exchange is provided with a deal 
price for such Derivative Securities Product. In such a case, the deal 
price would be used as the Auction Reference Price in lieu of the 
default of zero.
    Proposed Rule 7.35P(a)(8)(A) would further provide that the 
Indicative Match Price would not be lower (higher) than the price of an 
order to buy (sell) ranked Priority 2--Display Orders that was eligible 
to participate in the applicable auction. This rule text is based on 
current rule text in Rule 1.1(s) that provides that if the Indicative 
Match price would trade through eligible Limited Price Order designated 
for such auction, then the auction price will occur at the best price 
level available where no trade through occurs. The Exchange proposes 
non-substantive differences in Rule 7.35P(a)(8)(A) to use Pillar 
terminology, including reference to priority ranking defined in Rule 
7.36P, to describe how the Indicative Match Price would not trade 
through an order that was eligible to participate in the auction. 
Rather than use the phrase ``trade through,'' the Exchange proposes a 
non-substantive difference to describe that the Indicative Match Price 
would not be lower (higher) than the price of an order to buy 
(sell).\33\
---------------------------------------------------------------------------

    \33\ The Exchange proposes to refer to an order ranked Priority 
2--Display Orders rather than a Limit Order ranked Priority 2--
Display Orders because, as discussed below in proposed Commentary 
.01(a) to Rule 7.35P, sell short Market Orders that are adjusted to 
a Permitted Price during a Short Sale Period would be ranked as 
Priority 2--Display Orders.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(a)(8)(B) would provide that if there are two 
prices at which the maximum volume of shares is tradable and both 
prices are equidistant to the Auction Reference Price, the Indicative 
Match Price would be the Auction Reference Price. This proposed rule 
text is based in part on rule text in current Rule 1.1(s), but is more 
specific regarding the price that would be used if the two prices at 
which the maximum volume of tradable shares are equidistant to the 
Auction Reference Price.
    Proposed Rule 7.35P(a)(8)(C) would specify the Indicative Match 
Price if the Matched Volume for an auction consists of buy and sell 
Market Orders only.
     For the Core Open Auction, the Indicative Match Price 
would be the Auction Reference Price, which as described above, would 
be the midpoint of the Auction NBBO and, if no Auction NBBO, the last 
Official Closing Price for that security. Matching Market Orders at the 
Auction Reference Price would be a substantive difference in Pillar. 
Accordingly, the Exchange would not include in Rule 7.35P the current 
rule text in Rule 7.35(c)(3)(A)(2)(i) and (ii), which describes how the 
Exchange currently determines the Market Order Auction price if there 
are no limit orders eligible for execution in the Market Order Auction.
    The Exchange proposes a substantive difference in Pillar that the 
Exchange would use the Auction Reference Price for all Auction-Eligible 
Securities, regardless of where the security is listed.
     For the Closing Auction, the Indicative Match Price would 
be the midpoint of the Auction NBBO as of the time the auction is 
conducted, provided that if the Auction NBBO is locked, it would be the 
locked price, and if there is no Auction NBBO, it would be the Auction 
Reference Price.
    This proposed rule text represents a substantive difference because 
in Pillar, the Exchange would conduct a Closing Auction if there are 
only buy and sell Market Orders, and would price such auction based on 
the Auction NBBO. The Exchange, therefore, is not proposing to include 
in the Pillar rule, text in current Rule 7.35(e)(3)(B) that provides 
that if there are no Limit Orders eligible for execution in the Closing 
Auction, MOC Orders would be rejected.
     For the Trading Halt Auction, the Indicative Match Price 
would be the Auction Reference Price. This rule text is based in part 
on current Rule 7.35(f)(4)(A), which provides that if equilibrium 
exists between buy and sell Market Orders, the match price shall be the 
last Corporation sale price in the security regardless of the trading 
session. In Pillar, by using the Auction Reference Price as the 
Indicative Match Price for a Trading Halt Auction, the Exchange would 
be using the last consolidated round lot trading price during that 
trading day, which could include an Early Trading Session trade, just 
as under current rules.\34\
---------------------------------------------------------------------------

    \34\ The Exchange would not include in the Pillar rule the 
current rule text set forth in current Rule 7.35(f)(4)(A) that for 
the Trading Halt Auction, if there are only Market Orders and the 
last Corporation sale price is lower than the BBO, the match price 
shall be the displayed bid in the security or, if the last 
Corporation sale price is higher than the BBO, the match price will 
be the displayed offer in the security.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(a)(8)(D) would provide that if there is a BBO, 
but no Matched Volume (i.e., the Exchange has

[[Page 61519]]

buy and sell Limit Orders that do not cross in price and no Market 
Orders), the Indicative Match Price and Total Imbalance for the Auction 
Imbalance Information would be (i) the side of the BBO that has the 
higher volume; or (ii) of the volume of the BB equals the volume of the 
BO, the BB. While there would be no Matched Volume with which to 
conduct an auction, this Indicative Match Price would be a benchmark 
price that could attract more interest for participation in the 
applicable auction. The Exchange proposes to use the side of the BBO 
that has more volume because it represents a volume imbalance of orders 
on the buy or sell side, and therefore the side likely to set the 
price. The Exchange proposes a substantive difference in Pillar that if 
the volumes of the BBO are equal, the Exchange would publish the price 
of the BB as the Indicative Match Price to provide ETP Holders with a 
benchmark price to attract additional interest.
    Proposed Rule 7.35P(a)(8)(E) would provide that, if there is no 
Matched Volume and Market Orders on only one side of the market, the 
Indicative Match Price for the Auction Imbalance Information would be 
zero. This proposed rule text would be new for Pillar and provides 
specificity regarding the price that would be disseminated as part of 
the Auction Imbalance Information if there is no Matched Volume and 
Market Orders on only one side of the market.
    Because of the additional level of specificity in proposed Rule 
7.35P regarding how the Exchange would determine the Indicative Match 
Price, as well as the substantive differences of how these values would 
be determined in Pillar, the Exchange proposes that Rule 7.35P would 
not include the examples of Indicative Match Price and Imbalance 
calculations set forth in current Rules 7.35(c)(1)(A) and 
7.35(e)(1)(A). Rather, the Exchange believes that the detailed rule 
text provides transparency regarding how the Indicative Match Price and 
Imbalances are determined without the need for examples.
    Matched Volume. Proposed Rule 7.35P(a)(9) would define ``Matched 
Volume'' to mean the number of buy and sell shares that can be matched 
at the Indicative Match Price at any given time. The term ``match 
volume'' is currently used in the examples set forth Rules 
7.35(c)(1)(A) and 7.35(e)(1)(A), but is not defined separately in the 
current rule. Because text from these rules would not be included in 
Rule 7.35P, the Exchange proposes to define the term ``Matched Volume'' 
separately in Pillar.
    Auction Collar. Proposed Rule 7.35P(a)(10) would define ``Auction 
Collar'' to mean the price collar thresholds for the Indicative Match 
Price for the Core Open Auction, Trading Halt Auction, or Closing 
Auction. This term is based on rule text set forth in current Rule 
1.1(s)(A), which provides that when the Market Order Auction Price or 
Closing Auction Price is established by NYSE Arca Equities Rule 
7.35(c)(3)(A)(1) or 7.35(e)(3), the Limit Orders eligible for 
determining the Indicative Match Price will be limited by the price 
collar thresholds established by the Corporation and that the 
Corporation sets and modifies such thresholds from time to time upon 
prior notice to ETP Holders.\35\
---------------------------------------------------------------------------

    \35\ The price collar thresholds were modified on April 13, 2015 
and September 8, 2015. See NYSE Arca Trader Update, ``NYSE Arca 
Equities Enhancements to Auction Collars,'' dated April 10, 2015, 
and NYSE Arca Trader Update, ``NYSE Arca Equities Enhancements to 
Auction Collars,'' dated September 4, 2015, available here: https://www.nyse.com/trader-update/history and here: https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Trader_Update_Auction_Collars_Sept_2015.pdf.
---------------------------------------------------------------------------

    The Exchange proposes a non-substantive difference in Pillar to 
provide that the Auction Collars would be applicable to the ``Core Open 
Auction'' instead of the ``Market Order Auction.'' The Exchange also 
proposes in Pillar to refer to it as a price collar threshold for the 
Indicative Match Price, rather than a price collar threshold for the 
Limit Orders eligible for determining the Indicative Match Price. Both 
manners of describing Auction Collars result in orders participating in 
an auction being priced within price collar thresholds. However, in 
Pillar, the Exchange has proposed new terminology to describe the limit 
price of an order being the highest (lowest) specified price at which a 
Limit Orders to buy (sell) is eligible to trade.\36\ As described 
above, when allocating Limit Orders in an auction, the Exchange would 
use the limit price for determining its ranking, even if it 
participates at an Indicative Match Price that is different from the 
limit price or if the Indicative Match Price has been collared. 
Accordingly, in Pillar, the Auction Collars would not re-price the 
limit price of Limit Orders, but would re-price the Indicative Match 
Price to be within the collar thresholds.
---------------------------------------------------------------------------

    \36\ See NYSE Arca Equities Rule 7.36P(a)(2).
---------------------------------------------------------------------------

    Proposed Rule 7.35P(a)(10)(A) would provide that the Auction Collar 
would be based on a price that is a specified percentage away from the 
Auction Reference Price for the applicable auction and that the 
Corporation would set and modify such thresholds from time to time upon 
prior notice to ETP Holders. The rule would further provide that the 
upper (lower) boundary of the Auction Collar would be the Auction 
Reference Price increased (decreased) by the specified percentage, 
truncated to the MPV. This proposed rule text specifies in detail how 
Auction Collars would be set in Pillar, except for the specified 
percentage. As provided for in current Rule 1.1(s)(A), the Exchange 
would continue to set and modify the thresholds from time to time upon 
prior notice to ETP Holders.\37\
---------------------------------------------------------------------------

    \37\ See, e.g., Nasdaq Rules 4752(b)(2)(E) and 4754(b)(2)(E) 
(Nasdaq establishes threshold benchmarks for its Opening Cross and 
Closing Cross).
---------------------------------------------------------------------------

    Proposed Rule 7.35P(a)(10)(B) would provide that an Indicative 
Match Price that is equal to or higher (lower) than the upper (lower) 
boundary of the Auction Collar would be adjusted to one MPV below 
(above) the upper (lower) boundary of the Auction Collar and orders 
eligible to participate in the applicable auction would trade at the 
collared Indicative Match Price. This proposed rule text uses Pillar 
terminology to provide specificity regarding how the Auction Collars 
would function and is based on current functionality. The Exchange 
proposes a substantive difference in Pillar that the Indicative Match 
Price would be at least one MPV inside the Auction Collars, and could 
not be equal to the Auction Collar.
    Proposed Rule 7.35P(a)(10)(C) would provide that Limit Orders to 
buy (sell) with a limit price at or above (below) the upper (lower) 
Auction Collar would be included in the Auction Imbalance Information 
at the collared Indicative Match Price and would be eligible to trade 
at the Indicative Match Price. Proposed Rule 7.35P(a)(10)(D) would 
further provide that Limit Orders to buy (sell) with a limit price 
below (above) the lower (upper) Auction Collar would not be included in 
the Auction Imbalance Information and would not participate in the 
applicable auction. This proposed rule text uses Pillar terminology to 
provide specificity regarding how Limit Orders would participate in an 
auction that is subject to Auction Collars and is based on current 
functionality.
    Early Open Auction: Proposed Rule 7.35P(b) would set forth how the 
Exchange would conduct the Early Open Auction in Pillar. As proposed, 
the Early Open Auction would be conducted at the beginning of the Early 
Trading Session, which is based on rule

[[Page 61520]]

text in current Rule 7.35(b)(1), which provides that at 1:00 a.m. 
(Pacific Time), Limit Orders designated for the Opening Session are 
matched and executed in the Opening Auction. In Pillar, Rule 7.34P sets 
forth the specific times associated with each trading session and, as 
set forth in Rule 7.34P(a)(1), the Early Trading Session will begin at 
4:00 a.m. Eastern Time. Accordingly, the Early Open Auction would be 
conducted at 4:00 a.m. Eastern Time.
    Proposed Rule 7.35P(b) would further provide that only Limit Orders 
in Auction-Eligible Securities would be eligible to participate in the 
Early Open Auction. This text is based on current Rule 7.35(a)(2), 
which provides that only Limit Orders designated for the Opening 
Session will be eligible for the Opening Auction.\38\ Proposed Rule 
7.35P(b) would also provide that if there is no Matched Volume for the 
Early Open Auction, the NYSE Arca Marketplace would open the Early 
Trading Session with a quote. This proposed rule text uses Pillar 
terminology to describe how the Exchange would open Early Trading 
Session trading in the absence of an Early Open Auction.
---------------------------------------------------------------------------

    \38\ The substance of the rule text set forth in current Rule 
7.35(a)(1) and the second and third sentence of Rule 7.35(a)(2) is 
set forth in Rule 7.34P(a)(1) and 7.34P(b)(1) and 7.34P(c).
---------------------------------------------------------------------------

    Proposed Rule 7.35P(b)(1) would provide that thirty minutes before 
the Early Trading Session begins, the NYSE Arca Marketplace would begin 
disseminating the Early Open Auction Imbalance Information. This 
proposed rule text is based on current Rule 7.35(a)(3), which provides 
that, beginning 30 minutes prior to the Opening Session, and various 
times thereafter as determined from time to time by the Corporation, 
the Indicative Match Price of the Opening Auction and any Imbalance 
associated therewith, shall be published by electronic means as 
determined from time to time by the Corporation. Proposed Rule 
7.35P(b)(1) would further provide that the non-displayed quantity of 
Reserve Orders eligible to participate in the Early Open Auction would 
not be included in the Matched Volume or Total Imbalance until the 
Early Open Auction Freeze begins, which would be new in Pillar. In 
addition, the Exchange proposes non-substantive differences for 
proposed Rule 7.35P(b)(1) to use Pillar terminology that is defined in 
proposed Rule 7.35P(a) to describe the same functionality as Rule 
7.35(a)(3).
    Proposed Rule 7.35P(b)(2) would provide that the Early Open Auction 
Imbalance Freeze would begin one minute before the scheduled time for 
the Early Open Auction. This proposed rule text is based on rule text 
in Rule 7.35(a)(4), which describes the one minute period prior to the 
Opening Auction as when orders may not be cancelled.
    In Pillar, the Exchange proposes a substantive difference that 
during the Early Open Auction Imbalance Freeze, there would be no 
restrictions on order entry or cancellation. Accordingly, the Exchange 
would not include in Rule 7.35P rule text from current Rule 7.35(a)(4), 
which provides that orders that are eligible for the Opening Auction 
may not be cancelled one minute prior to the Opening Session until the 
conclusion of the Opening Auction.
    Proposed Rule 7.35P(b)(3) would provide that Limit Orders eligible 
to trade in the Early Open Auction would be matched and traded in the 
Early Open Auction at the Indicative Match Price following Auction 
Ranking as of the time of the Early Open Auction. This proposed rule 
text is based on current Rule 7.35(b)(2), which provides that the 
orders in the Opening Auction shall be executed at the Indicative Match 
Price as of the time of the Opening Auction.
    Proposed Rule 7.35P(b)(4) would provide that the Early Open Auction 
trade would be designated with a modifier to identify it as an extended 
hour .T trade. This rule text is based on current Rule 7.34(f), which 
provides that trades on the NYSE Arca Marketplace executed and reported 
outside of the Core Trading Session shall be designated as .T trades. 
The Exchange proposes to include this text in Rule 7.35P to provide 
specificity that an auction that occurs outside the Core Trading 
Session would also be designated as a .T trade.
    Core Open Auction: Proposed Rule 7.35P(c) would set forth how the 
Exchange would conduct the Core Open Auction. As proposed, the Core 
Open Auction would be conducted at the beginning of the Core Trading 
Session. As noted in the Pillar I Filing and Rule 7.34P, the Exchange 
proposes a substantive difference in Pillar that the Core Open Auction 
would occur at the beginning of the Core Trading Session, rather than 
be the end of the Early Trading Session.\39\ Specifically, Rule 
7.34P(a)(2) provides that the Core Trading Session will begin for each 
security at 9:30 a.m. Eastern Time and that the Core Open Auction will 
begin the Core Trading Session. Accordingly, the Core Open Auction 
would be conducted at 9:30 a.m. Eastern Time.
---------------------------------------------------------------------------

    \39\ See Pillar I Filing, supra note 4. Rule 7.34(a)(2), which 
governs trading on the current platform, provides that the Core 
Trading Session shall begin for each security at 6:30:00 a.m. 
(Pacific Time) or at the conclusion of the Market Order Auction, 
whichever comes later.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(c) would further provide that orders in 
Auction-Eligible Securities that include a designation for the Core 
Trading Session and that are eligible to participate in an auction 
would be eligible to participate in the Core Open Auction. The Exchange 
has proposed in new Rule 7.31P to define which orders and modifiers are 
not eligible to participate in an auction.\40\ As noted in the Pillar I 
Filing, the Exchange proposes a substantive difference in Pillar that, 
because the Core Open Auction would occur during the Core Trading 
Session, orders designated to participate in the Early Trading Session 
only would not be eligible to participate in the Core Open Auction.\41\
---------------------------------------------------------------------------

    \40\ See Pillar II Filing, supra note 6 at Rules 7.31P(b)(2) 
(Limit Orders designated IOC, which would include Cross Orders, are 
not eligible to participate in auctions and would be cancelled if 
arrives during auction processing), 7.31P(d)(2) (Limit Non-Displayed 
Orders do not participate in any auctions), 7.31P(d)(3) (MPL Orders 
do not participate in any auctions), 7.31P(d)(4) (Tracking Orders 
are only triggered to trade by an order that would otherwise route 
to an Away Market), 7.31P(f) (Primary Only Orders route to the 
primary listing market), and 7.31P(h)(1) (Market Pegged Orders will 
not participate in any auctions).
    \41\ See supra note 39.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(c)(1) would provide that the NYSE Arca 
Marketplace would begin publishing Core Open Auction Imbalance 
Information at 8:00 a.m. Eastern Time. This rule text is based on 
current Rule 7.35(c)(1), which provides that beginning at 5:00 a.m. 
(Pacific Time), and updated real-time thereafter, the Indicative Match 
Price of the Market Order Auction and the volume of Market Orders and 
Limit Orders available to trade at such price, and the Market Imbalance 
and Total Imbalance, if any, shall be published via electronic means 
and that Market Orders shall be included for purposes of calculating 
the Total Imbalance and Market Imbalance. The Exchange proposes non-
substantive differences to use Eastern Time rather than Pacific Time, 
and to use new Pillar terminology, as proposed in Rule 7.35P(a)(7) 
above, to describe which information would be disseminated.
    Proposed Rule 7.35P(c)(1) would further provide that the non-
displayed quantity of Reserve Orders that are eligible to participate 
in the Core Open Auction would not be included in the Matched Volume, 
Total Imbalance, or Market Imbalance until the Core Open

[[Page 61521]]

Auction Imbalance Freeze begins.\42\ This would be new rule text for 
Pillar, to specify that for Reserve Orders that are eligible to 
participate in the Core Open Auction, the reserve quantity would not be 
included in specified Imbalance information until the Core Open Auction 
Imbalance Freeze begins.
---------------------------------------------------------------------------

    \42\ As with current functionality, the Indicative Match Price 
would include the non-display quantity of such Reserve Orders at all 
times.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(c)(3) would specify that the Core Open Auction 
Imbalance Freeze would begin five seconds before the scheduled time for 
the Core Open Auction. This proposed time frame would be a substantive 
difference for Pillar because on the current trading platform, order 
entry and cancellation restrictions begin one minute before the Market 
Order Auction. The Exchange also proposes substantive differences to 
how order entry and cancellation would be processed before the Core 
Open Auction. Accordingly, rule text in current Rule 7.35(c) and (d), 
which describe the order entry and cancellation requirements during the 
period between 6:29 a.m. (Pacific Time) and the conclusion of the 
Market Order Auction, would not be included in proposed Rule 7.35P.\43\
---------------------------------------------------------------------------

    \43\ The current rule provides for order entry and cancellation 
in the one-minute period before the Market Order Auction as follows: 
Limit Orders eligible for the Opening Session may be cancelled (Rule 
7.35(c)(2)(A)(2)); Limit Orders not eligible for the Opening 
Session, Market Orders, and LOO Orders may not be cancelled (Rule 
7.35(c)(2)(A)(2)); Market Orders and LOO Orders may not be entered 
on the same side of the Imbalance (Rule 7.35(c)(2)(A)(3)); Market 
Orders and LOO Orders may be entered on the opposite side of the 
Imbalance any time before the conclusion of the Market Order Auction 
(Rule 7.35(c)(2)(A)(3)); Limit Orders entered after 6:29 a.m. 
(Pacific Time) will become eligible for execution at 6:30 a.m. 
(Pacific Time) or the conclusion of the Market Order Auction, 
whichever is later (Rule 7.35(d)(1)); and Market Orders entered 
after 6:29 a.m. (Pacific Time), unless eligible to participate in 
the Auction because it reduces the Imbalance, will become eligible 
for execution at 6:30 a.m. (Pacific Time) or the conclusion of the 
Market Order Auction, whichever is later (Rule 7.35(d)(2)).
---------------------------------------------------------------------------

    The Exchange proposes a shorter Auction Imbalance Freeze period in 
order to provide additional time for market participants to enter 
orders for the Core Open Auction without restriction. As further 
proposed, in Pillar, the Exchange would not validate order entry during 
the freeze period based on whether an order offsets the real-time 
Imbalance. Rather, because of the shorter freeze period, MOO Orders and 
LOO Orders entered during the Core Open Auction Imbalance Freeze would 
be rejected, regardless of the side of the market. Market Orders and 
Limit Orders designated for the Core Trading Session only would be 
accepted during the Auction Imbalance Freeze without validating them on 
entry against the published Imbalance. Such orders would be eligible to 
participate in the Core Open Auction only to offset the Imbalance for 
the auction. The Exchange also proposes to retain the current 
functionality that MOO Orders and LOO Orders may not be cancelled 
beginning one minute before the scheduled time of the Core Open 
Auction.
    Specifically, the Exchange proposes to process order entry and 
cancellation of orders before and during the Core Open Auction 
Imbalance Freeze as follows:
     Proposed Rule 7.35P(c)(2) would provide that beginning one 
minute before the scheduled time for the Core Open Auction, requests to 
cancel and requests to cancel and replace MOO Orders and LOO Orders 
would be rejected. This is based on current Rule 7.35(c)(2)(A)(2), 
which provides that beginning at 6:29 a.m. (Pacific Time) Market Orders 
(which include MOO Orders) and Limit Orders designated for the Core 
Trading Session may not be cancelled. The Exchange proposes a non-
substantive difference to specify that such requests to cancel or 
cancel and replace would be rejected.
     Proposed Rule 7.35P(c)(3)(A) would provide that during the 
Core Open Auction Imbalance Freeze, MOO Orders and LOO Orders would be 
rejected. This proposed rule text would be a substantive difference in 
Pillar because currently, under Rule 7.35(c)(2)(A)(3), MOO Orders and 
LOO Orders may be entered to offset an Imbalance. Because the proposed 
Core Auction Imbalance Freeze period would be shorter in Pillar, the 
Exchange proposes instead to reject new MOO or LOO Orders, regardless 
of the side of the order.
     Proposed Rule 7.35P(c)(3)(B) would provide that Market 
Orders (other than MOO Orders) and Limit Orders designated for the Core 
Trading Session only would be accepted but would not be included in the 
calculation of the Indicative Match Price or the Core Open Auction 
Imbalance Information and that such orders would participate in the 
Core Open Auction only to offset the Imbalance that would remain after 
all orders entered before the Core Open Auction Imbalance Freeze, 
including the non-display quantity of Reserve Orders, are allocated in 
the Core Open Auction. The proposed rule would further provide that 
these offsetting orders would be allocated in price-time priority under 
Rule 7.36P(c)-(g) consistent with the priority ranking associated with 
each order.
    This proposed rule text would be similar to current Rules 
7.35(c)(2)(A)(3) 7.35(d)(2) in that Market Orders and Limit Orders 
designated for the Core Trading Session would participate in the 
auction only to reduce the Imbalance. The Exchange proposes a 
substantive difference in Pillar because the Exchange would not 
validate such orders on entry against the published Imbalance. Rather, 
such orders would be accepted but would only participate in the Core 
Open Auction if they were to offset the final Imbalance for the 
auction. As interest of last resort, such orders would be ranked in 
price-time priority after all other orders have been allocated.
    The Exchange proposes to process Market Orders and Limit Orders 
differently from MOO Orders and LOO Orders because such orders would 
not expire at the end of the Core Open Auction. Rather than rejecting 
Market Orders and Limit Orders upon entry, they would be accepted and 
would be eligible to be offsetting interest for the auction. If these 
orders do not participate in the Core Open Auction, they would become 
eligible to participate in the Core Trading Session.
     Proposed Rule 7.35P(c)(3)(C) would provide that requests 
to cancel and requests to cancel and replace Market Orders (other than 
MOO Orders) and Limit Orders designated for the Core Trading Session 
only would be accepted but not processed until after the Core Open 
Auction concludes. This proposed rule text is based on current Rule 
7.35(c)(2)(A)(2), but with a proposed substantive difference that order 
entry restrictions would be during a five-second rather than a one-
minute period. The proposed Pillar rule would function similarly to the 
current rule in that requests to cancel pending Market Orders and Limit 
Orders would not be permitted during the Core Open Auction Imbalance 
Freeze period.
     Proposed Rule 7.35P(c)(3)(D) would provide that all other 
order instructions would be accepted. Proposed Rule 7.35P(c)(3)(D) 
would therefore include that requests to cancel Limit Orders designated 
for both the Early Trading Session and Core Trading Session would be 
accepted, which is based on current Rule 7.35(c)(2)(A)(2).
    Proposed Rule 7.35P(c)(4) would provide that all orders eligible to 
trade in the Core Open Auction would be matched and traded at the 
Indicative Match Price following Auction Ranking as of the time of the 
Core Open Auction. This rule text is based on current Rule 7.35(c)(3), 
which specifies how the Market Order Auction Price is determined. As 
discussed above, in

[[Page 61522]]

Pillar, the Exchange proposes to describe how the Indicative Match 
Price would be determined in proposed Rule 7.35P(a)(6)(A)-(E), and 
therefore would not duplicate the text currently set forth in Rule 
7.35(c)(A)(3)(1)-(2) in the Pillar rule.
    Proposed Rule 7.35P(c)(5) would provide that the Core Open Auction 
trade would be designated with a modifier to identify it as a Core Open 
Auction trade. This rule text is based on current Rule 7.35(c)(4), with 
non-substantive differences to use Pillar terminology.
    Closing Auction: Proposed Rule 7.35P(d) would set forth how the 
Exchange would conduct the Closing Auction. As proposed, the Closing 
Auction would be conducted at the end of the Core Trading Session. As 
noted in the Pillar I Filing and Rule 7.34P(a)(2), the Core Trading 
Session ends at the conclusion of the Core Trading Hours or the Core 
Closing Auction, whichever comes later.\44\ Because Core Trading Hours 
end at 4:00 p.m. Eastern Time, the Exchange would conduct the Closing 
Auction at 4:00 p.m. Eastern Time, except on days when the Exchange has 
an early scheduled close, in which case, the Closing Auction would be 
conducted at 1:00 p.m. Eastern Time.\45\
---------------------------------------------------------------------------

    \44\ The Core Trading Hours are defined in Rule 1.1(j) to mean 
the hours of 9:30 a.m. Eastern Time through 4:00 p.m. Eastern Time, 
or such other hours as may be determined by the Corporation from 
time to time.
    \45\ The Exchange is scheduled to close early on the day after 
Thanksgiving and December 24 of each year. See NYSE holiday 
schedule, available here: https://www.nyse.com/markets/hours-calendars#holidays.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(d) would further provide that orders in 
Auction-Eligible Securities that include a designation for the Core 
Trading Session and that are eligible to participate in an auction 
would be eligible to participate in the Closing Auction. As discussed 
above, proposed Rule 7.31P would specify which orders are eligible to 
participate in an auction.\46\
---------------------------------------------------------------------------

    \46\ See supra note 40.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(d)(1) would provide that the NYSE Arca 
Marketplace would begin publishing Closing Auction Imbalance 
Information one hour before the scheduled time for the Closing Auction. 
This proposed rule text is based on current Rule 7.35(e)(1)(A), which 
provides that beginning at 12:00 p.m. (Pacific Time), and updated real-
time thereafter, the Indicative Match Price of the Closing Auction and 
volume available to trade at such price, and the Total Imbalance and 
Market Imbalance associated with the Closing Auction, if any, will be 
published via electronic means. The Exchange proposes non-substantive 
differences to specify that the information would begin being published 
one hour before the scheduled time for the Closing Auction, rather than 
specifying 12:00 p.m. Pacific Time. This proposed difference would 
address those days when the Exchange has an early scheduled close, in 
which case, Closing Auction Imbalance Information would be disseminated 
beginning at 12:00 p.m. Eastern Time, which is one hour before the 
early scheduled close of 1:00 p.m. Eastern Time. The Exchange also 
proposes non-substantive differences to use new Pillar terminology, as 
proposed in Rule 7.35P(a)(4) above, to describe which information would 
be disseminated. Proposed Rule 7.35P(d)(1) would further provide that 
the non-displayed quantity of Reserve Orders that would be eligible to 
participate in the Closing Auction would not be included in the Matched 
Volume, Total Imbalance, or Market Imbalance until the Closing Auction 
Imbalance Freeze would begin. This would be new rule text in Pillar.
    Proposed Rule 7.35P(d)(2) would specify that the Closing Auction 
Imbalance Freeze would begin one minute before the scheduled time for 
the Closing Auction. This proposed time frame is based on rule text in 
current Rule 7.35(e)(2)(B) and (C), which describe the order entry and 
cancellation requirements during the period between 12:59 p.m. (Pacific 
Time) and the conclusion of the Closing Auction.
    The Exchange proposes non-substantive differences in Pillar 
regarding how order entry and cancellation would be handled during the 
Closing Auction Imbalance Freeze. The Exchange proposes to process 
order entry and cancellation of orders during the Closing Auction 
Imbalance Freeze as follows:
     Proposed Rule 7.35P(d)(2)(A) would provide that LOC Orders 
and MOC Orders that are on the same side of the Imbalance, would flip 
the Imbalance, or would create a new Imbalance would be rejected. This 
proposed rule text is based on the first and third sentences of current 
Rule 7.35(e)(2)(C), which provides that MOC Orders and LOC Orders may 
not be entered on the same side as the Imbalance and that MOC Orders 
and LOC Orders that create equilibrium and thereafter convert the 
Imbalance from a buy to a sell (or convert the Imbalance from a sell to 
a buy) Imbalance will be rejected. The Exchange proposes non-
substantive differences in Rule 7.35P to use Pillar terminology and to 
specify that such orders would be rejected. The Exchange would not 
include the examples set forth in current Rule 7.35(e)(2)(C)(1) and (2) 
in the Pillar rule because the Exchange believes that the proposed 
Pillar rule describes which orders would be rejected without the need 
for examples.
     Proposed Rule 7.35P(d)(2)(B) would provide that requests 
to cancel and requests to cancel and replace MOC Orders and LOC Orders 
would be rejected. This proposed rule text is based on current Rule 
7.35(e)(2)(B), which provides that MOC Orders and LOC Orders may not be 
cancelled. The Exchange proposes a non-substantive difference to 
specify that any such requests would be rejected.
     Proposed Rule 7.35P(d)(2)(C) would provide that all other 
order instructions would be accepted. Because the Exchange would 
continue to accept requests to cancel Limit Orders, rule text set forth 
in Rule 7.35(e)(2)(B), which provides that Limit Orders (except LOC 
Orders) may be cancelled, would not be included in proposed Rule 
7.35P(d)(2). Similarly, because MOC Orders and LOC Orders, other than 
those specified in proposed Rule 7.35P(d)(2)(A), would be accepted 
during the Closing Auction Imbalance Freeze, the Exchange would not 
include text from the second sentence of Rule 7.35(e)(2)(C), which 
provides that MOC Orders and LOC Orders that reduce the Imbalance may 
be entered on the opposite side of the Imbalance any time before the 
conclusion of the Closing Auction, in the Pillar rule.
    Proposed Rule 7.35P(d)(3) would provide that all orders eligible to 
trade in the Closing Auction would be matched and traded at the 
Indicative Match Price following Auction Ranking as of the time of the 
Closing Auction. This rule text is based on current Rule 7.35(e)(3), 
which specifies how the Closing Auction Price is determined. As 
discussed above, in Pillar, the Exchange proposes to describe how the 
Indicative Match Price would be determined in proposed Rule 
7.35P(a)(6)(A)-(E), and therefore would not duplicate the text 
currently set forth in Rule 7.35(e)(3)(A)-(B) in the Pillar rule.\47\
---------------------------------------------------------------------------

    \47\ As described above, the Exchange proposes a substantive 
difference in Pillar and would conduct a Closing Auction if there 
are only Market Orders eligible to participate in the Closing 
Auction. See proposed Rule 7.35P(a)(6)(C)(ii).
---------------------------------------------------------------------------

    Proposed Rule 7.35P(d)(4) would provide that the Closing Auction 
trade would be designated with a modifier to identify it as a Closing 
Auction trade. This rule text is based on current Rule 7.35(e)(3)(D), 
with non-substantive differences to use Pillar terminology.

[[Page 61523]]

Proposed Rule 7.35P(d)(4) would further provide that the Exchange would 
publish an Official Closing Price for all securities that trade on the 
NYSE Arca Marketplace. This proposed rule text uses Pillar terminology, 
specifically the proposed term ``Official Closing Price,'' to describe 
current functionality that would continue in Pillar.
    Trading Halt Auction: Proposed Rule 7.35P(e) would set forth how 
the Exchange would conduct a Trading Halt Auction. As proposed, a 
Trading Halt Auction would be conducted to re-open trading in an 
Auction-Eligible Security following a halt or pause of trading in that 
security in either the Early Trading Session, Core Trading Session, or 
Late Trading Session, as applicable.\48\ The rule would further provide 
that orders that include a designation for the applicable trading 
session and are eligible to participate in an auction would be eligible 
to participate in a Trading Halt Auction.\49\ This proposed rule text 
is based on current Rule 7.35(f), with non-substantive differences to 
use Pillar terminology.
---------------------------------------------------------------------------

    \48\ As proposed in Rule 7.35P(a)(1)(B), described above, 
Auction-Eligible Securities for Trading Halt Auctions would be only 
those securities for which the Exchange is the primary listing 
market.
    \49\ As proposed in the Pillar II Filing, see supra note 6, MOO 
Orders and LOO Orders would be eligible to participate in Trading 
Halt Auctions. See Proposed Rule 7.31P(c)(1) and (2).
---------------------------------------------------------------------------

    Proposed Rule 7.35P(e)(1) would provide that immediately after 
trading in an Auction-Eligible Security is halted or paused, the NYSE 
Arca Marketplace would begin publishing Trading Halt Auction Imbalance 
Information. This proposed rule text is based on current Rule 
7.35(f)(2)(A) and (B), which provides that immediately after trading is 
halted in a security, and updated real-time thereafter, the Indicative 
Match Price of the Trading Halt Auction and the volume available to 
trade at such price, as well as the Market and Total Imbalance 
information, shall be published via electronic means and that if such a 
price does not exist, the NYSE Arca Marketplace shall indicate via 
electronic means that an Indicative Match Price does not exist. The 
Exchange proposes non-substantive differences to use new Pillar 
terminology, as proposed in Rule 7.35P(a)(4) above, to describe which 
information would be disseminated. The Exchange also proposes to 
specify that Trading Halt Auction Imbalance Information would be 
disseminated during a trading pause, which is current 
functionality.\50\
---------------------------------------------------------------------------

    \50\ In Pillar, the Exchange would not disseminate a ``SIG'' 
designator during a halt or pause if the difference between the 
Indicative Match Price and the last price before the halt is equal 
to or greater than a pre-determined amount. Accordingly, rule text 
in current Rule 7.35(f)(2)(C) would not be included in Rule 7.35P.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(e)(2) would provide that after trading in a 
security has been halted or paused, the NYSE Arca Marketplace would 
disseminate the estimated time at which trading in that security would 
re-open, which would be defined as the ``Re-Opening Time.'' This 
proposed rule text is based on current Rule 7.35(f)(1), which provides 
that after trading in a security has been halted, the NYSE Arca 
Marketplace shall disseminate the estimated time at which trading in 
that security will re-open (the ``Re-Opening Time''). The Exchange 
proposes non-substantive differences in the Pillar rule to specify that 
a Re-Opening Time would be disseminated during a trading pause and to 
use the term ``will'' instead of ``shall.''
    Proposed Rule 7.35P(e)(3) would provide that during a trading halt 
or pause in an Auction-Eligible Security, entry and cancellations of 
orders eligible to participate in the Trading Halt Auction would be 
processed as provided for in Rule 7.18P(c).\51\ This rule text would be 
new in Pillar to provide clarity of which rule would govern entry and 
cancellation of orders during a trading halt or pause.
---------------------------------------------------------------------------

    \51\ See Pillar III Filing, supra note 7, which proposes to 
adopt Rule 7.18P(c). Because proposed Rule 7.18P(c) would specify 
which orders may be entered during a halt, the Exchange would not 
include in Rule 7.35P rule text currently set forth in Rule 
7.35(f)(3)(B), which provides that Primary Only Orders may be 
submitted to the NYSE Arca Marketplace during a trading halt.
---------------------------------------------------------------------------

    Proposed Rule 7.35P(e)(4) would provide that all orders eligible to 
trade in a Trading Halt Auction would be matched and traded at the 
Indicative Match Price following Auction Ranking as of the Re-Opening 
Time. This rule text is based on the first sentence of current Rule 
7.35(f)(4)(A), which provides that for those issues for which the 
Corporation is the primary market, Orders will be executed at the 
Indicative Match Price at the Re-Opening Time. As discussed above, in 
Pillar, the Exchange proposes to describe how the Indicative Match 
Price would be determined in proposed Rule 7.35P(a)(6)(A)-(E), and 
therefore would not duplicate the remaining text currently set forth in 
Rule 7.35(f)(4) in the Pillar rule.
    Proposed Rule 7.35P(e)(5) would provide that a Trading Halt Auction 
that occurs during the Early Trading Session or the Late Trading 
Session would be designated with a modifier to identify it as an 
extended hour .T trade. A Trading Halt Auction that occurs during the 
Core Trading Session would be designated with a modifier to identify it 
as a halt auction. This would be new rule text in Pillar, but 
represents how trades are currently reported.
    In Pillar, the Exchange would not have a Trading Halt Auction 
Imbalance Freeze. Accordingly, rule text in current Rule 7.35(f)(3)(C), 
which provides that the Corporation, if it deems such action necessary, 
will disseminate the time, prior to the time that orders are matched 
pursuant to the Trading Halt Auction, at which orders may no longer be 
cancelled, would not be included in Rule 7.35P.
    IPO Auction: Proposed Rule 7.35P(f) would set forth how the 
Exchange would conduct an IPO Auction and would be new rule text for 
Pillar. As proposed, an IPO Auction would be conducted during the Core 
Trading Session on the first day of trading for any security, including 
a Derivative Securities Product, for which NYSE Arca is the primary 
listing market, excluding transfers. While the Exchange would define 
such auction as an ``IPO Auction,'' the first day of trading of a 
Derivative Securities Product may not technically be an initial public 
offering. However, the Exchange proposes to use the term ``IPO'' as 
signifying that this would be the auction on the first day of trading 
of a new listing on the Exchange, and thus is similar to an IPO of a 
new operating company.
    As further proposed, an IPO Auction would follow the processing 
rules of a Core Open Auction, provided that:
     As provided for in proposed Rule 7.35P(f)(1), the NYSE 
Arca Marketplace would specify the time that an IPO Auction would be 
conducted. While an IPO Auction would occur during the Core Trading 
Session, the Exchange proposes to provide the Exchange with discretion 
to designate the time for the IPO Auction.
     As provided for in proposed Rule 7.35P(f)(2), there would 
be no Auction Imbalance Freeze, Auction Collars, or restrictions on the 
entry or cancellation of orders for an IPO Auction. Because an IPO 
Auction would not be set at a specific time, nor would there be any 
trading in the security before the IPO Auction, the Exchange does not 
believe that an Auction Imbalance Freeze or Auction Collars would 
assist in the price discovery process. Similarly, because the time of 
an IPO Auction may change, the Exchange does not believe that there 
needs to be any restrictions on the entry or cancellation of orders, 
including cancellation of MOO Orders and LOO Orders, before an IPO 
Auction. Accordingly, an IPO Auction would not be subject to these 
requirements.
     As provided for in proposed Rule 7.35P(f)(3), an IPO 
Auction would not

[[Page 61524]]

be conducted if there were only Market Orders on both sides of the 
market. Because the Exchange would be able to specify the time for an 
IPO Auction, if there were only Market Orders on both sides of the 
market, the Exchange has the flexibility to change the time in order to 
attract more interest for the auction.
    Order Processing during an Auction Processing Period: Proposed Rule 
7.35P(g) would specify how the Exchange would process order 
instructions during an Auction Processing Period. This rule text would 
be new in Pillar. As proposed, new orders, requests to cancel, and 
requests to cancel and replace an order that are received during the 
Auction Processing Period would be accepted but would not be processed 
until after the applicable auction concludes. The rule would further 
provide that a request to cancel and replace an order that was entered 
during the Auction Processing Period for an order that was also entered 
during the Auction Processing Period would be rejected. The proposed 
rule text provides specificity in the Pillar rule of how order 
instructions that are received during the Auction Processing Period 
would be processed.
    Transition from Auction to Continuous Trading: Proposed Rule 
7.35P(h) would specify how the Exchange would transition from auction 
processing to continuous trading. As proposed, after auction processing 
concludes, including if there is no Matched Volume and an auction is 
not conducted, the Exchange would transition to continuous trading for 
the applicable trading session as specified in Rule 7.35P(h)(1)-(3).
    As proposed in Rule 7.35P(h)(1), after auction processing 
concludes, orders that are no longer eligible to trade, either because 
they are Auction-Only Orders or not eligible for the next trading 
session, would expire. This proposed rule text is based on current Rule 
7.35(e)(3)(C), which provides that MOC Orders that are eligible for, 
but not executed in, the Closing Auction, shall be cancelled 
immediately upon conclusion of the Closing Auction. The Exchange 
proposes non-substantive differences to specify that any order that is 
not eligible for the next trading session, and not just MOC Orders, 
would expire after the respective auction concludes.
    As proposed in Rule 7.35P(h)(2), orders that are designated for the 
trading session following an auction and that were received before the 
auction or during the Auction Processing Period, and that did not 
participate in the auction, would become eligible to trade. This 
proposed rule text is based on the following rules:
     Rule 7.35(b)(3), which provides that orders that are 
eligible for, but not executed in, the Opening Auction shall become 
eligible for the Opening Session immediately upon conclusion of the 
Opening Auction;
     Rule 7.35(c)(3)(A)(3), which provides that the Market 
Orders that are eligible for both the Market Order Auction and the Core 
Trading Session, but which are not executed in the Market Order 
Auction, shall become eligible for execution in the Core Trading 
Session immediately upon conclusion of the Market Order Auction;
     Rule 7.35(d)(1) and (2), which provide that Limit and 
Market Orders entered after 6:29 a.m. (Pacific Time) become eligible 
for execution at 6:30 a.m. (Pacific Time) or the conclusion of the 
Market Order Auction, whichever is later; and
     Rule 7.35(f)(5), which provides that if any orders are not 
executed in their entirety during the Trading Halt Auction, then such 
orders shall be executed in accordance with Rule 7.37 after the 
completion of the Trading Halt Auction.
    The Exchange proposes non-substantive differences in proposed Rule 
7.35P(h)(2) to consolidate the text of Rules 7.35(b)(3), 
7.35(c)(3)(A)(3), 7.35(d)(1) and (2), and 7.35(f)(5) into a single rule 
that uses Pillar terminology to describe that orders that do not 
participate in an auction and that are eligible for the trading session 
following such auction would become eligible to trade.
    Proposed Rule 7.35P(h)(3) would provide that before continuous 
trading in the Trading Session following the applicable auction begins, 
the Exchange would process orders as follows:
     As provided for in proposed Rule 7.35P(h)(3)(A), any order 
instructions received during either the Auction Imbalance Freeze or 
Auction Processing Period that were not processed will be processed. 
For example, a request to cancel a Limit Order designated for the Core 
Trading Session only and that was entered during the Core Open Auction 
Imbalance Freeze would be processed after the auction processing 
concludes. This rule text would be new in Pillar and uses Pillar 
terminology to specify when order instructions would be processed.
     As provided for in proposed Rule 7.35P(h)(3)(B), the 
working price of orders would be adjusted based on the PBBO or NBBO, as 
provided for in proposed Rule 7.31P. Before becoming eligible to trade 
in the next trading session, orders would have their working prices 
adjusted as provided for in proposed Rule 7.31P and consistent with the 
terms of the respective orders. This rule text would be new in Pillar 
and uses Pillar terminology regarding when an order would receive a new 
working price.
     As provided for in proposed Rule 7.35P(h)(3)(C), if orders 
that become eligible to trade would be marketable, such orders would 
trade and/or route based on price-time priority of individual orders as 
provided for in Rule 7.37P. This rule text would be new in Pillar and 
uses Pillar terminology to describe that following an auction, orders 
that are marketable would trade or route, as provided for in Rule 
7.37P, before the Exchange would disseminate its first quote following 
an auction. The Exchange proposes that following an auction, if orders 
that did not trade in an auction, or were not eligible to trade in an 
auction, are marketable, these orders should trade or route, as 
applicable, rather than publishing a locked or crossed quote from the 
NYSE Arca Book.
     As provided for in proposed Rule 7.35P(h)(3)(D), after 
marketable orders have been routed or traded, the NYSE Arca Marketplace 
would publish a quote for the next trading session. This rule text 
would be new in Pillar.
    Proposed Rule 7.35P(i): Proposed Rule 7.35P(i) would provide that 
whenever in the judgment of the Corporation the interest of a fair and 
order market so require, the Corporation may adjust the timing of or 
suspend the auctions set forth in this Rule with prior notice to ETP 
Holders. This proposed rule text is based on current Rule 7.35(g), 
which provides that whenever in the judgment of the Corporation the 
interests of a fair and orderly market so require, the Corporation may 
adjust the timing of or suspend the auctions set forth in this Rule 
with prior notice to ETP Holders.
    Proposed Rule 7.35P(j): Proposed Rule 7.35P(j) would provide that 
for purposes of Rule 611(b)(3) of Regulation NMS,\52\ the Early Open 
Auction, Core Open Auction, Closing Auction, Trading Halt Auction, and 
IPO Auction are single-priced opening, reopening, or closing 
transactions and may trade through any other Away Market's Manual or 
Protected Quotations. This proposed rule text is based on current Rule 
7.35(h), which provides that for purposes of Rule 611(b)(3) of 
Regulation NMS, orders executed pursuant to the Opening Auction, 
Closing Auction, Market Order Auction, and Halt Auction may trade-
through any other Trading Center Manual or Protected Quotation if

[[Page 61525]]

the transaction that constituted the trade-through was a single-priced 
opening, reopening, or closing transaction by the trading center. The 
Exchange proposes non-substantive differences to use Pillar terminology 
to specify that the auctions described in Rule 7.35P would be eligible 
for the exception set forth in Rule 611(b)(3) of Regulation NMS from 
trading through a protected quotation.
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    \52\ 17 CFR 242.611(b)(3).
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    Commentary: The Exchange proposes to add Commentary .01 to proposed 
Rule 7.35P to address how sell short orders would be processed during a 
Short Sale Period in auctions. As proposed in Commentary .01(a) to Rule 
7.35P, during a Short Sale Period, for purposes of pricing an auction 
and ranking orders for allocation in an auction, sell short Market 
Orders that would be adjusted to a Permitted Price would be processed 
as Limit Orders ranked Priority 2--Display Orders and would not be 
included in the Market Imbalance.
    This proposed treatment of sell short Market Orders would be 
applicable only for purposes of auctions because once adjusted to a 
Permitted Price, a sell short Market Order has a price and such price 
would be used for purposes of determining the price of an auction. For 
example, if there are only buy Market Orders and sell short Market 
Orders for an auction, the Permitted Price at which sell short Market 
Orders are priced to a Permitted Price would be the basis for 
determining the Indicative Match Price for that auction, instead of the 
applicable Auction Reference Price, as described above. Because the 
Permitted Price of sell short Market Orders would be used for purposes 
of determining the Indicative Match Price, the Exchange proposes that 
for purposes of order allocation during an auction, sell short Market 
Orders that have been adjusted to a Permitted Price would be ranked as 
Priority 2--Display Orders.
    Proposed Commentary .01(b) to Rule 7.35P would further provide 
that, during a Short Sale Period, sell short orders that would be 
included in Auction Imbalance Information, but which would not be 
eligible for continuous trading before the applicable auction, would be 
adjusted to a Permitted Price as the NBB moves both up and down. The 
Exchange believes this proposed rule text provides clarity that for 
purposes of calculating Auction Imbalance Information before each 
applicable auction, orders that are not eligible for continuous trading 
(e.g., Auction-Only Orders, or for the Core Open Auction, Market Orders 
and Limit Orders designated for the Core Trading Session only) would be 
continuously re-priced based on the then-applicable NBB. The Exchange 
believes that during a Short Sale Period, continuously re-pricing sell 
short orders that are not yet eligible to trade would provide greater 
transparency regarding the price at which such orders would be included 
in Auction Imbalance Information in advance of the applicable auction.
* * * * *
    As discussed in the Pillar I Filing, because of the technology 
changes associated with the migration to the Pillar trading platform, 
the Exchange will announce by Trader Update when rules with a ``P'' 
modifier will become operative and for which symbols. The Exchange 
believes that keeping existing rules pending the full migration of 
Pillar is necessary because they would continue to govern trading on 
the current trading platform pending the full migration.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\53\ in general, and 
furthers the objectives of Section 6(b)(5),\54\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system and, 
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \53\ 15 U.S.C. 78f(b).
    \54\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that new Rule 7.35P, together with the rules 
adopted in the Pillar I Filing and the rules proposed in the Pillar II 
Filing and Pillar III Filing, would remove impediments to and perfect 
the mechanism of a free and open market because they would promote 
transparency by using consistent terminology for rules governing 
equities trading, thereby ensuring that members, regulators, and the 
public can more easily navigate the Exchange's rulebook and better 
understand how equity trading would be conducted on the Pillar trading 
platform. Adding new rules with the modifier ``P'' to denote those 
rules that would be operative for the Pillar trading platform would 
remove impediments to and perfect the mechanism of a free and open 
market by providing transparency of which rules govern trading once a 
symbol has been migrated to the Pillar platform. In addition, the 
proposed use of new Pillar terminology would promote consistency in the 
Exchange's rulebook regarding how the Exchange would process orders 
during an auction.
    The Exchange believes that the proposed amendments to existing 
definitions in Rule 1.1 would remove impediments to and perfect the 
mechanism of a fair and orderly market because they would not make any 
substantive changes to Exchange rules, but rather are designed to 
reduce confusion by specifying that Rules 1.1(r) and (s) would be 
applicable to auctions on the current trading platform only, and would 
not be applicable to symbols trading on the Pillar platform.
    The Exchange believes that proposed Rule 7.35P, which would govern 
auctions in Pillar, would remove impediments to and perfect the 
mechanism of a fair and orderly market because it would set forth in a 
single rule the requirements for auctions in Pillar in both UTP 
Securities and Exchange-listed securities, which are currently 
described in Rules 1.1(r) and (s) and Rule 7.35. The proposed new 
definitions for new Rule 7.35P, including the new terms Auction 
Processing Period, Auction Imbalance Freeze, Auction NBBO, Auction 
Ranking, and Auction Reference Price, would promote transparency by 
using common definitions that incorporate Pillar terminology to 
describe how auctions would function in Pillar.
    The Exchange believes that the proposed substantive differences for 
Rule 7.35P as compared to the current rules would remove impediments to 
and perfect the mechanism of a fair and orderly market for the 
following reasons:
     The proposed substantive difference to add that Market 
Orders would include not only MOO Orders for the Core Open Auction, but 
also MOO Orders for a Trading Halt Auction and MOC Orders for the 
Closing Auction, and use Pillar terminology to specify that all such 
orders would be ranked Priority 1--Market Orders, would promote 
transparency in Exchange rules regarding how Market Orders, MOO Orders, 
and MOC Orders would be processed during an auction.
     The proposed substantive difference to define the term 
``Auction-Eligible Securities,'' to provide the Exchange with the 
ability to conduct auctions in all securities that trade on the 
Exchange, including UTP Securities, would support the initiatives of 
the Exchange, NYSE, and Nasdaq to increase resiliency by having 
auctions on the Exchange serve as a back-up to

[[Page 61526]]

either NYSE or Nasdaq if one of those markets is unable to conduct an 
auction.
     The proposed substantive difference to update Auction 
Imbalance Information at least every second, rather than on a real-time 
basis, both for the proprietary data feed dissemination and for 
determining order entry eligibility during the applicable Auction 
Imbalance Freeze period would promote transparency in Exchange rules 
regarding which Imbalance would be used to determine order entry 
eligibility during specified Auction Imbalance Freeze periods.
     The proposed substantive difference to define a new term, 
``Auction NBBO,'' to use as the basis for pricing the Core Open Auction 
and the Indicative Match Price for the Closing Auction when that 
auction consists only of Market Orders would promote transparency 
regarding how the Exchange would determine pricing for such auctions. 
Further to this point, the Exchange believes that creating a process to 
validate the Auction NBBO for the Core Open Auction by comparing the 
midpoint value to the spread of the NBBO, and if the NBBO is not valid, 
to use the prior day's Official Closing Price, would ensure that the 
NBBO is sufficiently tight to guarantee that the midpoint of the NBBO 
would be a meaningful and accurate basis for pricing the Core Open 
Auction.
     The proposed substantive difference to allocate orders on 
the side of the Imbalance the same for all auctions and describe such 
ranking in the new defined term ``Auction Ranking'' would promote 
transparency in Exchange rules by consolidating into a single location 
how orders would be ranked for auctions. In addition, using the same 
methodology to rank and allocate orders on the side of the Imbalance 
for all auctions based on the priority ranking described in Rule 7.36P 
would promote consistency in how the Exchange would rank orders on the 
Pillar trading platform, whether for continuous trading or for 
auctions.
     The proposed substantive difference that during a Short 
Sale Period, processing sell short Market Orders that have been 
adjusted to a Permitted Price as Limit Orders ranked Priority 2--
Display Orders for purposes of pricing an auction and ranking orders 
for allocation in an auction would ensure that such orders would not 
trade at or below the NBB. In addition, processing such re-priced sell 
short Market Orders as Limit Orders would promote transparency by 
processing all orders that have a price similarly in an auction.
     The proposed substantive difference that the Market 
Imbalance would be Market Orders not matched for trading in an auction 
against any interest, and not just Market Orders not matched for 
trading against other Market Orders, would promote transparency 
regarding the volume of Market Orders that have not been paired against 
any interest for an auction.
     The proposed substantive difference to publish an 
Indicative Match Price based on a published BBO when there is no 
Matched Volume, and more specifically, if the BB equals the BO volume, 
to use the BB as the Indicative Match Price, would serve as a benchmark 
price to attract additional interest for an auction, thereby promoting 
price discovery.
     The proposed substantive difference to determine the 
Indicative Match Price for all securities in the same manner regardless 
of whether the Exchange is the primary listing market for a security or 
the security is a UTP Security would promote clarity and transparency 
in Exchange rules and streamline how auctions would be processed.
     The proposed substantive difference to conduct a Closing 
Auction if there are only Market Orders on both sides of the market and 
use the midpoint of the Auction NBBO to price such auction would 
increase the potential for market participants that have entered MOC 
Orders to receive an execution in an auction that is priced based on 
the prevailing value of the security. Specifically, pricing such 
auction based on the midpoint of the Auction NBBO in effect as of the 
scheduled time of the Closing Auction would reflect the most recent 
quoting activity in a stock and therefore the market's view of the 
value of the security. If there is no Auction NBBO, which would 
indicate that there is not a good quote in a security, the Exchange 
would instead price the auction based on the last consolidated round 
lot sale, which, in the absence of an Auction NBBO, would reflect the 
most recent price for the security.
     The proposed substantive difference to adjust an 
Indicative Match Price that is outside the Auction Collars to be one 
MPV inside the Auction Collars, rather than to the Auction Collar, 
would reduce the potential for an auction to be priced at the Auction 
Collar. More specifically, if the Auction Collars are based on the 
clearly erroneous execution thresholds (which is currently the case for 
the Core Open Auction), pricing an auction one MPV inside the Auction 
Collar would potentially prevent an auction from being a clearly 
erroneous execution.
     The proposed substantive difference not to have any order 
entry or cancellation restrictions during the one-minute Auction 
Imbalance Freeze before the Early Open Auction reflects that there is 
not any trading occurring before the Early Open Auction, and therefore 
the risk to manipulate market prices before the Early Open Auction is 
minimal.
     The proposed substantive difference to have a Core Open 
Auction Imbalance Freeze of five seconds instead of one minute would 
increase the period during which orders may be entered to participate 
in the Core Open Auction, thereby promoting price discovery for the 
auction. To reduce the potential to manipulate pricing for the auction, 
the Exchange proposes to retain the current functionality that MOO 
Orders and LOO Orders may not be cancelled beginning one minute before 
the scheduled time for the auction.
    With respect to order entry and cancellation during the Core Open 
Auction Imbalance Freeze, the Exchange believes that rejecting all MOO 
Orders and LOO Orders during this period would remove the potential for 
such orders to impact the Imbalance. The Exchange further believes that 
accepting Market Orders and Limit Orders designated for the Core 
Trading Session only on both sides of the market during the Core Open 
Auction Freeze and then allowing such orders to participate in the Core 
Open Auction only if they offset the Imbalance in effect at the 
scheduled time of the Core Open Auction would eliminate the possibility 
for these orders to create an Imbalance or increase an Imbalance.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issue but rather to adopt new rules 
to support the Exchange's new Pillar trading platform. As discussed in 
detail above, the Exchange proposes a new rule for auctions in Pillar, 
which would be based on current rules with both substantive and non-
substantive differences. The proposed substantive differences would 
promote competition because the Exchange would be offering 
functionality that would promote price discovery and liquidity on the 
primary listing market for auctions, thereby supporting competition. 
The proposed

[[Page 61527]]

non-substantive differences in Rule 7.35P would be to use new Pillar 
terminology, which would promote consistent use of terminology to 
support the Pillar trading platform making the Exchange's rules easier 
to navigate.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or up to 90 days (i) as the Commission may designate 
if it finds such longer period to be appropriate and publishes its 
reasons for so finding or (ii) as to which the self-regulatory 
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEARCA-2015-86 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEARCA-2015-86. 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 will also be available 
for inspection and copying at the NYSE's principal office and on its 
Internet Web site at www.nyse.com. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEARCA-2015-86 and should be submitted on or before 
November 3, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\55\
---------------------------------------------------------------------------

    \55\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
 [FR Doc. 2015-25864 Filed 10-9-15; 8:45 am]
 BILLING CODE 8011-01-P