Document ID: SEC-2014-1397-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE MKT LLC
Posted Date: 2014-08-18T04:00Z

[Federal Register Volume 79, Number 159 (Monday, August 18, 2014)]
[Notices]
[Pages 48783-48785]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-19473]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72815; File No. SR-NYSEMKT-2014-65]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Rule 935NY and 
Rule 964NY To Delete Obsolete References to Tracking Orders and Make 
Other Non-Substantive, Technical Changes to the Exchange Rules

August 12, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on July 31, 2014, NYSE MKT LLC (``Exchange'' or ``NYSE MKT'') 
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\ 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 Rule 935NY (Order Exposure 
Requirements) and Rule 964NY (Display, Priority and Order Allocation--
Trading Systems) to delete obsolete references to Tracking Orders and 
make other non-substantive, technical changes to the Exchange rules. 
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.

[[Page 48784]]

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

1. Purpose
    The Exchange recently filed and received approval of a rule change 
amending rules governing Exchange order types, which included the 
deletion of Tracking Orders, an order type which had been deemed 
obsolete due to a lack of demand by market participants.\3\ When the 
Exchange eliminated Tracking Orders, references to Tracking Orders were 
inadvertently left in Rule 935NY and Rule 964NY. This filing is 
intended to correct that oversight by deleting the references to 
Tracking Orders that are no longer relevant.
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    \3\ See Securities and Exchange Release 71630 (February 27, 
2014), 79 FR 12553 (March 5, 2014) (SR-NYSEMKT-2014-05).
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    First, the Exchange is proposing to delete Commentary .05 to Rule 
935NY to eliminate reference to Tracking Orders, which as noted are no 
longer valid for use on the Exchange, and to designate Commentary .05 
as Reserved.
    Similarly, the Exchange is proposing to delete section (F) from 
Rule 964NY(b)(2) to delete reference to Tracking Orders. In addition, 
the Exchange proposes to amend Rule 964NY(c)(2)(E) by combining 
subsections (ii) and (iii), in doing so the Exchange would eliminate 
reference to Tracking Orders and would update the subsequent rule text 
in that section to accurately describe the functionality now that 
Tracking Orders are no longer valid. In light of the foregoing change, 
the Exchange believes it is also appropriate to amend the paragraph 
following former subsection Rule 964NY(c)(2)(E)(iii) by deleting the 
clause bracketed below, as the Exchange believes that it is rendered 
superfluous by the proposed change:

    If [neither of the conditions specified in subsections (i) or 
(ii) apply, and] the order is no longer marketable, or, if an order 
has been designated as an order type that is not eligible to be 
routed away, the order either will be placed in the Consolidated 
Book or cancelled if such order would lock or cross the NBBO.

    The Exchange believes the proposed deletion of this clause is 
appropriate because the order is either going to be executed at the 
next available price (Rule 964NY(c)(2)(E)(i)) or, if it locks or 
crosses the NBBO, the Exchange will route it out (proposed Rule 
964NY(c)(2)(E)(ii), which incorporates language from current subsection 
(iii). Finally, the Exchange also proposes to delete the reference to 
Tracking Orders as contained in Rule 964NY(c)(3)(C) because it is an 
obsolete reference.
    The above mentioned rule changes are non-substantive and technical 
in nature and simply designed to remove references to an obsolete order 
type.
    Separately, the Exchange is also proposing to update an obsolete 
reference in Rule 964NY(d) (Prohibited Conduct Relating to Crossing 
Orders). In 2009, the Exchange filed and received approval of a rule 
change that reduced the exposure time during which Amex Users may not 
execute as principal against orders they represent as agent from three 
seconds to one second as found in Rule 935NY.\4\ However, Rule 
964NY(d)(1), which references the exposure time, was never adjusted to 
reflect the change. The Exchange now proposes to remove the outdated 
reference to the three-second exposure requirement found in Rule 
964NY(d)(1). The Exchange also proposes to add a reference to Rule 
935NY, in lieu of including the actual exposure time in Rule 
964NY(d)(1). The Exchange believes changing the rule text in Rule 
964NY(d)(1) to reference to Rule 935NY would ensure consistency and 
transparency in Exchange rules, as any future changes to Rule 935NY 
would automatically be taken into account by Rule 964NY(d)(1), and 
would reduce any confusion among market participants.
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    \4\ See Securities and Exchange Release No. 59956 (May 21, 
2009), 74 FR 25782, (May 29, 2009) (NYSEAmex-2009-15).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \5\ of the Securities Exchange Act of 1934 (the ``Act''), 
in general, and furthers the objectives of Section 6(b)(5),\6\ in 
particular, in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. Specifically, the Exchange 
believes that the proposed rule change will remove impediments to and 
perfect the mechanisms of a free and open market and add transparency 
and clarity to the Exchange's rules. The Exchange further believes that 
eliminating references to an obsolete order type and updating an 
outmoded reference promotes just and equitable principles of trade, 
fosters cooperation and coordination among persons engaged in 
facilitating securities transactions, and removes impediments to and 
perfects the mechanism of a free and open market by ensuring that 
members, regulators and the public can more easily navigate the 
Exchange's rulebook and better understand the order types available for 
trading on the Exchange.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change 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 revise obsolete 
or inaccurate rule text and to remove language pertaining to 
unavailable functionality in the Exchange's rulebook, thereby reducing 
confusion and making the Exchange's rules easier to understand and 
navigate. The Exchange believes that the proposed rule change will 
serve to promote regulatory clarity and consistency, thereby reducing 
burdens on the marketplace and facilitating investor protection.

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 \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
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)

[[Page 48785]]

of the Act and Rule 19b-4(f)(6)(iii) thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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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) \9\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \9\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEMKT-2014-65 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEMKT-2014-65. 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 Section, 100 F Street 
NE., Washington, DC 20549-1090. Copies of the filing will also be 
available for Web site viewing and printing 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-NYSEMKT-2014-65 and should 
be submitted on or before September 8, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-19473 Filed 8-15-14; 8:45 am]
BILLING CODE 8011-01-P