Document ID: SEC-2017-2011-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE American LLC
Posted Date: 2017-12-08T05:00Z

[Federal Register Volume 82, Number 235 (Friday, December 8, 2017)]
[Notices]
[Pages 58036-58039]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26450]

[[Page 58036]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82212; File No. SR-NYSEAMER-2017-34]

Self-Regulatory Organizations; NYSE American LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Exchange Rules To Delete Obsolete Cash Equities Rules That Are Not 
Applicable to Trading on the Pillar Trading Platform and To Delete 
Other Obsolete Rules

December 4, 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 November 22, 2017, NYSE American LLC (``Exchange'' or ``NYSE 
American'') 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 Exchange rules to delete cash 
equities rules that are not applicable to trading on the Pillar trading 
platform. 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 its equity rules to delete rules 
that are not applicable to trading on the Pillar trading platform.
    To effect its transition of cash equities trading to Pillar, the 
Exchange adopted Pillar platform Rules 1E-13E. Because specified 
Exchange rules that govern trading cash equities on a Floor-based 
trading platform are not applicable to trading on Pillar, the Exchange 
designated specified rules governing cash equities trading with the 
following preamble: ``this rule is not applicable to trading on the 
Pillar trading platform.'' \4\
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    \4\ See Securities Exchange Act Release Nos. 80590 (May 4, 
2017), 82 FR 21843 (May 10, 2017) (Approval Order) and 79993 
(February 9, 2017), 82 FR 10814 (February 15, 2017) (SR-NYSEMKT-
2017-01) (Notice). See Securities Exchange Act Release Nos. 79982 
(February 7, 2017), 82 FR 105008 [sic] (February 13, 2017) (Notice) 
and 80577 (May 2, 2017), 82 FR 21446 (May 8, 2017) (SR-NYSEMKT-2017-
04) (Approval Order).
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    On July 24, 2017, the Exchange transitioned all cash equities 
trading to the Pillar platform. Because the cash equities rules that 
are not applicable to trading on the Pillar trading platform are now 
obsolete, the Exchange proposes to delete the following rules in their 
entirety: \5\
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    \5\ The Exchange also proposes to delete (i) section headings if 
all of the rules of a section are being deleted and (ii) the list of 
rules included in a section heading if rules are being deleted from 
that section.
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     Rule 1--Equities (``The Exchange and Related Entities'').
     Rule 3--Equities (``Security'').
     Rule 4--Equities (``Stock'').
     Rule 5--Equities (``Bond'').
     Rule 6--Equities (Floor).
     Rule 6A--Equities (Trading Floor).
     Rule 7--Equities (Exchange BBO).
     Rule 11--Equities (Effect of Definitions).
     Rule 12--Equities (``Business Day'').
     Rule 13--Equities (Orders and Modifiers).
     Rule 14--Equities (Non-Regular Way Settlement Instructions 
for Orders).
     Rule 15--Equities (Pre-Opening Indications and Opening 
Order Imbalance Information).
     Rule 15A--Equities (Order Protection Rule).
     Rule 17--Equities (Use of Exchange Facilities and Vendor 
Services).
     Rule 18--Equities (Compensation in Relation to Exchange 
System Failure).
     Rule 19--Equities (Locking or Crossing Protected 
Quotations in NMS Stocks).
     Rule 23--Equities (New York local time).
     Rule 24--Equities (Change in Procedure to Conform to 
Changes[sic] Hours of Trading).
     Rule 25--Equities (Exchange Liability for Legal Costs).
     Rule 27--Equities (Regulatory Cooperation).
     Rule 28--Equities (Fingerprint-Based Background Checks of 
Exchange Employees and Others).
     Rule 35--Equities (Floor Employees to be Registered).
     Rule 36--Equities (Communications Between Exchange and 
Members' Offices).
     Rule 37--Equities (Visitors).
     Rule 46--Equities (Floor Officials--Appointments).
     Rule 46A--Equities (Executive Floor Governors).
     Rule 47--Equities (Floor Officials--Unusual Situations).
     Rule 49--Equities (Exchange Business Continuity and 
Disaster Recovery Plans and Mandatory Testing).
     Rule 51--Equities (Hours for Business).
     Rule 52--Equities (Dealings on the Exchange--Hours).
     Rule 53--Equities (Dealings on Floor--Securities).
     Rule 54--Equities (Dealings on Floor--Persons).
     Rule 55--Equities (Unit of Trading--Stocks and Bonds).
     Rule 60--Equities (Dissemination of Quotations).
     Rule 61--Equities (Recognized Quotations).
     Rule 62--Equities (Variations).
     Rule 67--Equities (Tick Size Pilot Plan).
     Rule 70--Equities (Execution of Floor broker interest).
     Rule 71--Equities (Precedence of Highest Bid and Lowest 
Offer).
     Rule 72--Equities (Priority of Bids and Offers and 
Allocation of Executions).
     Rule 73--Equities (Seller's Option).
     Rule 74--Equities (Publicity of Bids and Offers).
     Rule 75--Equities (Disputes as to Bids and Offers).
     Rule 76--Equities (``Crossing'' Orders).
     Rule 77--Equities (Prohibited Dealings and Activities).
     Rule 78--Equities (Sell and Buy Orders Coupled at Same 
Price).
     Rule 79A--Equities (Miscellaneous Requirements on Stock 
Market Procedures).
     Rule 80B--Equities (Trading Halts Due to Extraordinary 
Market Volatility).
     Rule 80C--Equities (Limit Up--Limit Down Plan and Trading 
Pauses in

[[Page 58037]]

Individual Securities Due to Extraordinary Market Volatility).
     Rule 90--Equities (Dealings by Members on the Exchange).
     Rule 91--Equities (Taking or Supplying Securities Named in 
Order).
     Rule 93--Equities (Trading for Joint Account).
     Rule 94--Equities (Designated Market Makers' or Odd-Lot 
Dealers' Interest in Joint Accounts).
     Rule 95--Equities (Discretionary Transactions).
     Rule 96--Equities (Limitation on Members' Trading Because 
of Options).
     Rule 98--Equities (Operation of a DMM Unit).
     Rule 98A--Equities (Restrictions on Persons or Parties 
Affiliated with a DMM Unit).
     Rule 103--Equities (Registration and Capital Requirements 
of DMMs and DMM Units).
     Rule 103A--Equities (Member Education).
     Rule 103B--Equities (Security Allocation and 
Reallocation).
     Rule 104--Equities (Dealings and Responsibilities of 
DMMs).
     Rule 104A--Equities (DMMs--General).
     Rule 104B--Equities (DMM Commisions[sic]).
     Rule 105--Equities (DMMs' Interest in Pools).
     Rule 106A--Equities (Taking Book or Order of Another 
Member).
     Rule 107B--Equities (Supplemental Liquidity Providers).
     Rule 107C--Equities (Retail Liquidity Program).
     Rule 108--Equities (Limitation on Members' Bids and 
Offers).
     Rule 112--Equities (Orders Initiated ``Off the Floor'').
     Rule 113--Equities (DMM Unit's Public Customers).
     Rule 115A--Equities (Orders at Opening).
     Rule 116--Equities (``Stop'' Constitutes Guarantee).
     Rule 117--Equities (Orders of Members To Be in Writing).
     Rule 119--Equities (Change in Basis from ``And Interest'' 
to ``Flat'').
     Rule 121--Equities (Records of DMM Units).
     Rule 122--Equities (Orders with More than One Broker).
     Rule 123--Equities (Record of Orders).
     Rule 123A--Equities (Miscellaneous Requirements).
     Rule 123B--Equities (Exchange Automated Order Routing 
System).
     Rule 123C--Equities (The Closing Procedures).
     Rule 123D--Equities (Openings and Halts in Trading).
     Rule 123E--Equities (DMM Combination Review Policy).
     Rule 126--Equities (Odd-Lot Dealers General).
     Rule 127--Equities (Block Crosses Outside the Prevailing 
Exchange Quotation).
     Rule 128--Equities (Clearly Erroneous Executions for 
Equities).
     Rule 128A--Equities (Publication of Transactions).
     Rule 128B--Equities (Publication of Changes, Corrections, 
Cancellations or Omissions and Verifications of Transactions).
     Rule 130--Equities (Overnight Comparison of Exchange 
Transactions).
     Rule 131--Equities (Comparison--Requirements for Reporting 
Trades and Providing Facilities).
     Rule 131A--Equities (A Member Organization Shall Use Its 
Own Mnemonic When Entering Orders).
     Rule 132--Equities (Comparison and Settlement of 
Transactions Through a Fully-Interfaced or Qualified Clearing Agency).
     Rule 133--Equities (Comparison--Non-cleared Transactions).
     Rule 134--Equities (Differences and Omissions-Cleared 
Transactions (``QTs'')).
     Rule 135--Equities (Differences and Omissions--Non-cleared 
Transactions (``DKs'')).
     Rule 136--Equities (Comparison--Transactions Excluded from 
Clearance).
     Rule 235--Equities (Ex-Dividend, Ex-Rights).
     Rule 300--Equities (Trading Licenses).
     Rule 301--Equities (Qualifications for Membership).
     Rule 303--Equities (Limitation on Access to Floor).
     Rule 304A--Equities (Member Examination Requirements).
     Rule 345--Equities (Employees- Registration, Approval, 
Records).
     Rule 345A--Equities (Continuing Education for Registered 
Persons).
     Rule 388--Equities (Prohibition Against Fixed Rates of 
Commission).
     Rule 411--Equities (Erroneous Reports).
     Rule 440--Equities (Books and Records).
     Rule 440B--Equities (Short Sales).
     Rule 440H--Equities (Activity Assessment Fees).
     Rule 440I--Equities (Records of Compensation 
Arrangements--Floor Brokerage).
     Rule 460--Equities (DMMs Participating in Contests).
     Rules 500--Equities--525--Equities (rules governing UTP 
trading)
     Rule 600--Equities (Arbitration).
     Rules 900--Equities -907 Equities (Off-Hours Trading 
Facility Rules)
     Rule 1000--Equities (Capital Commitment Schedule).
     Rule 1001--Equities (Execution of Automatically Executing 
Orders).
     Rule 1002--Equities (Availability of Automatic Execution 
Feature).
     Rule 1004--Equities (Election of Buy Minus and Sell Plus).
* * * * *
    The Exchange also proposes to delete Rule 424--Equities. The 
Exchange believes that Rule 6.10E, regarding ETP Holders Holding 
Options, addresses the same topic, and therefore Rule 424--Equities is 
no longer necessary for trading on the Pillar trading platform.\6\ The 
Exchange also proposes to delete Rule 438--Equities, which relates to 
participating in decimal conversion testing, because by its terms, as 
specified in Supplementary Material .30 to that rule, that rule has 
expired because decimal pricing has been fully implemented.
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    \6\ Current Rule 424--Equities is based on New York Stock 
Exchange LLC Rule 424 and has more detailed reporting requirements 
than Rule 6.10E. Current Rule 6.10E, which is based on NYSE Arca, 
Inc. Rule 11.24 (formerly, NYSE Arca Equities, Inc. Rule 6.10), sets 
forth the restrictions currently applicable on other exchanges 
relating to the purchase or sale of options that are not listed on 
the Options Clearing Corporation. See, e.g., CBOE BZX Exchange, Inc. 
Rule 12.10(a) (Options). To align the Exchange's rules with those of 
other exchanges, the Exchange proposes to delete Rule 424--Equities.
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    The Exchange also proposes to delete Equities rules that are 
currently designated as ``Reserved.'' \7\ The Exchange believes it 
would reduce confusion and promote transparency to delete references to 
rules that do not have any substantive content. The Exchange further 
believes that because it is transitioning to a new rule numbering 
framework for cash equities trading, maintaining these rules on a 
reserved basis is no longer necessary.
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    \7\ See Rules 346- Equities (Deleted); Rules 348--Equities--
349--Equities; Rule 350--Equities; Rule 351--Equities; Rule 352--
Equities; Rule 354--Equities; Rules 355--Equities--374 Equities; 
Rules 376--Equities--381--Equities; Rule 382--Equities; Rules 383--
Equities--386--Equities; Rules 389--Equities--391--Equities; Rule 
392--Equities; Rules 393--Equities--Rule 400--Equities; Rule 401--
Equities; Rule 401A--Equities; Rule 405--Equities; Rule 405A--
Equities; 410A--Equities; Rule 413--Equities; Rule 414--Equities; 
Rule 415--Equities; Rule 417--Equities; Rule 418--Equities; Rule 
419--Equities; Rule 420--Equities; Rule 421--Equities; Rule 423--
Equities; Rules 425--Equities--429--Equities; 440D--Equities--440E--
Equities; 440F--Equities; 440G--Equities; Rules 441--Equities--444--
Equities; Rule 445--Equities; Rule 446--Equities; Rules 447--
Equities--449--Equities; Rules 461--Equities--464--Equities; Rules 
498--Equities--499--Equities; Rules 526--Equities--599--Equities; 
Rules 601--Equities--899--Equities; and Rules 908--Equities--999--
Equities. The Exchange also proposes to delete references to the 
term ``Reserved'' that do not correlate to a current rule number.

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[[Page 58038]]

    The Exchange also proposes a technical, non-substantive amendment 
to replace the term ``Non-routable Limit Order'' with the term ``Non-
Routable Limit Order'' in Rules 7.31E(d)(1)(C), 7.31E(e)(1), 
7.31E(j)(1), and 7.46E(f)(5)(F)(ii) and (iii). The Exchange believes 
that capitalizing the term ``Routable'' is more consistent with the 
naming methodology of other Exchange order types, such as the ``Non-
Displayed Limit Order,'' as defined in Rule 7.31E(d)(1).
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\8\ in general, and 
furthers the objectives of Section 6(b)(5),\9\ 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposed rule change to eliminate 
rules that are not applicable to trading on Pillar would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system because it would eliminate rules that are now 
obsolete or that do not have any substantive content. Eliminating 
obsolete rules would reduce potential confusion and add transparency 
and clarity to the Exchange's rules, thereby ensuring that members, 
regulators, and the public can more easily navigate and understand the 
Exchange's rulebook.

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 any competitive issues, but rather it is 
designed to eliminate obsolete rules.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
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, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative for 30 days after the date of the filing. 
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange requests that the 
Commission waive the 30-day operative delay. The Commission notes that 
the Exchange represented that it has transitioned cash equities trading 
to the Pillar trading technology in July 2017. Therefore, the 
Exchange's cash equities rules that govern floor-based trading are no 
longer in effect and are therefore obsolete. The Commission believes 
deleting Exchange rules that are no longer in effect and are obsolete 
would be consistent with the protection of investors and the public 
interest because it would reduce potential confusion and add 
transparency and clarity to NYSE American's rules. Further, the 
Commission notes that Exchange Rule 438-Equities, related to 
participation in decimal conversion testing, is obsolete as decimal 
conversion has been completed. Finally, the Commission believes that 
the replacement of the term ``Non-routable Limit Order'' with the term 
``Non-Routable Limit Order'' is a non-substantive change to conform the 
designation of the order type. For the foregoing reasons, the 
Commission finds that waiver of the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Accordingly, the Commission waives the 30-day operative delay and 
designates the proposed rule change operative upon filing.\14\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has 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 under 
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \15\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSEAMER-2017-34 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-NYSEAMER-2017-34. 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

[[Page 58039]]

Commission and any person, other than those that may be withheld from 
the public in accordance with the provisions of 5 U.S.C. 552, will be 
available for Web site viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE., Washington, DC 20549 on official 
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of 
the filing also will be available for inspection and copying at the 
principal office of the Exchange. All comments received will be posted 
without change. Persons submitting comments are cautioned that we do 
not redact or edit personal identifying information from comment 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSEAMER-2017-34 and should be submitted on or before December 29, 
2017.
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    \16\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26450 Filed 12-7-17; 8:45 am]
BILLING CODE 8011-01-P