Document ID: SEC-2017-1736-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2017-10-24T04:00Z

[Federal Register Volume 82, Number 204 (Tuesday, October 24, 2017)]
[Notices]
[Pages 49253-49255]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-22973]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81894; File No. SR-NYSEArca-2017-119]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend NYSE Arca 
Rule 1.1 and Rule 7.35-E To Make Technical and Conforming Updates in 
Connection With the Recent Merger of NYSE Arca Equities, Inc.

October 18, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on October 5, 2017, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Arca Rule 1.1 and Rule 7.35-E 
to make technical and conforming updates in connection with the recent 
merger of NYSE Arca Equities, Inc. (``NYSE Arca Equities'') with and 
into the Exchange. The proposed rule change is available on the 
Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend NYSE Arca Rule 1.1 (Definitions) and 
Rule 7.35-E(d)(4) (Auctions) to make technical and conforming updates 
in connection with the recent merger of its wholly-owned subsidiary 
NYSE Arca Equities, Inc. with and into the Exchange (the ``Merger'').
    On June 2, 2017, the Exchange filed rule changes with the 
Securities and Exchange Commission (``Commission'') in connection with 
the proposed Merger.\4\ On August 15, 2017, the Exchange filed a 
partial amendment to such filing (as amended, the ``Merger 
Filing'').\5\ On August 17, 2017, the Commission approved the proposed 
rule changes, as amended, and the Merger occurred on that same date.\6\
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    \4\ See Securities Exchange Act Release No. 80929 (June 14, 
2017), 82 FR 28157 (June 20, 2017) (SR-NYSEArca-2017-40) (Notice).
    \5\ See Partial Amendment 2 to SR-NYSEArca-2017-40 (August 15, 
2017). The Amendment also was submitted to the Commission as a 
comment letter on the Original Filing. See letter from Martha 
Redding, Associate General Counsel, NYSE Group, to Brent J. Fields, 
Secretary, Commission (August 15, 2017), available at https://www.sec.gov/comments/sr-nysearca-2017-40/nysearca201740-2221802-160732.pdf.
    \6\ See Securities Exchange Act Release No. 81419 (August 17, 
2017), 82 FR 40044 (August 23, 2017) (SR-NYSEArca-2017-40) (Approval 
Order).
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    Prior to the Merger, NYSE Arca had two rulebooks: The NYSE Arca 
rules for its options market and the NYSE Arca Equities rules for its 
equities market. At the Merger, the NYSE Arca Equities rules were 
integrated into the NYSE Arca rules, so that there is now one NYSE Arca 
rulebook.\7\ In that process, NYSE Arca Rule 1.1 was amended to 
incorporate NYSE Arca Equities Rule 1.1 (Definitions), including by 
adding definitions from the NYSE Arca Equities rule that were unique to 
the equities market.\8\
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    \7\ See id. at 40044.
    \8\ See id. at 40047.
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    However, due to an oversight, the Merger Filing did not incorporate 
the NYSE Arca Equities definitions for ``NYSE Arca Book'' or ``UTP 
Security.'' Accordingly, the Exchange proposes to make the following 
amendments to Rule 1.1:
     Add new Rule 1.1(jj) with the following definition of NYSE 
Arca Book: ``The term `NYSE Arca Book' refers to the NYSE Arca 
Marketplace's electronic file of orders, which contains all orders 
entered on the NYSE Arca Marketplace.'' \9\
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    \9\ See Securities Exchange Act Release No. 79078 (October 11, 
2016), 81 FR 71559 (October 17, 2016) (SR-NYSEArca-2016-135).
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     Add new Rule 1.1(iii) with the following definition of 
NYSE Arca Book: ``The term `UTP Security' means 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.'' \10\
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    \10\ See Securities Exchange Act Release No. 75467 (July 16, 
2015), 80 FR 43515 (July 22, 2015) (SR-NYSEArca-2015-58). See also 
Securities Exchange Act Release No. 76198 (October 20, 2015), 80 FR 
65274 (October 26, 2015) (SR-NYSEArca-2015-58).
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     Renumber the other paragraphs in Rule 1.1 to reflect the 
addition of new paragraphs (jj) and (iii).
    In addition, the Exchange proposes to amend Rule 7.35-E(d)(4) to 
update cross references to the definition of ``Official Closing Price'' 
in Rule 1.1.
    Rule 7.35-E has a notice stating that an amended version of the 
rule has been approved but is not yet operative. The notice links to 
the amended version of the rule and the relevant approval order. 
Accordingly, the Exchange proposes to update the cross reference in the 
amended version of the rule. Exhibit 5B sets forth the proposed change 
to the amended but not yet operative version of the rule.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act,\11\ in general, and with Section 
6(b)(1) \12\ in particular, in that it enables the Exchange to be so 
organized as to have the capacity to be able to carry out the purposes 
of the Exchange Act and to comply, and to enforce compliance by its 
exchange members and persons associated with its exchange members, with 
the provisions of the Exchange Act, the rules and regulations 
thereunder, and the rules of the Exchange.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(1).

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[[Page 49254]]

    The Exchange believes that the proposed changes to Rule 1.1 would 
enable the Exchange to continue to be so organized as to have the 
capacity to carry out the purposes of the Exchange Act and comply and 
enforce compliance with the provisions of the Exchange Act by its 
members and persons associated with its members, because, by 
incorporating the definitions of NYSE Arca Book and UTP Security, the 
proposed change would correct the oversight of the definitions' 
omission and ensure that the changes made to Rule 1.1 to reflect the 
Merger were accurate and complete.
    For similar reasons, the Exchange also believes that the proposed 
rule change is consistent with Section 6(b)(5) of the Act,\13\ in that 
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.
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    \13\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system in general, to protect investors and the 
public interest, because, by incorporating the definitions of NYSE Arca 
Book and UTP Security, the proposed change would ensure that the 
changes made to Rule 1.1 to reflect the Merger were accurate and 
complete, thereby reducing potential investor or market participant 
confusion.
    Similarly, the Exchange believes that the non-substantive changes 
to Rule 1.1 to renumber the other paragraphs in Rule 1.1 to reflect the 
addition of new paragraphs (jj) and (iii) and to Rule 7.35-E(d)(4) to 
update the cross references would remove impediments to and perfect the 
mechanism of a free and open market and a national market system in 
general, to protect investors and the public interest, because such 
changes would add clarify [sic] and transparency to the Rules, ensuring 
that market participants can more easily navigate and understand the 
Exchange's rules and reducing potential market participant confusion.

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 rule change is 
not intended to address competitive issues but rather is concerned 
solely with updating the Exchange's rules to incorporate the 
definitions of NYSE Arca Book and UTP Security from the rules of NYSE 
Arca Equity [sic] in place prior to the Merger.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \16\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The Exchange indicates that the two definitions were omitted 
inadvertently from the Merger Filing and that waiver of the operative 
delay would ensure that the Exchange's rules include without delay the 
definitions of terms that are used elsewhere in the Exchange's 
rulebook.\18\ The Commission believes that allowing the definitions to 
be incorporated into the NYSE Arca rulebook without delay would add 
clarity to the rulebook and would help reduce any investor or market 
participant confusion that otherwise could result. Accordingly, the 
Commission hereby waives the operative delay and designates the 
proposal operative upon filing.\19\
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    \16\ Id.
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ See, e.g., Exchange Rules 1.1(ggg) (definition of 
Regulatory Halt), 7.11-E (Limit Up--Limit Down Plan and Trading 
Pauses in Individual Securities Due to Extraordinary Market 
Volatility), 7.18-E (Halts), and 7.23-E (Obligations of Market 
Makers).
    \19\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2017-119 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2017-119. 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

[[Page 49255]]

public in accordance with the provisions of 5 U.S.C. 552, will be 
available for Web site viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE., Washington, DC 20549 on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSEArca-2017-119 and should be submitted on or before 
November 14, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-22973 Filed 10-23-17; 8:45 am]
BILLING CODE 8011-01-P