Document ID: SEC-2015-0863-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2015-05-19T04:00Z

[Federal Register Volume 80, Number 96 (Tuesday, May 19, 2015)]
[Notices]
[Pages 28721-28733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12028]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74951; File No. SR-NYSEARCA-2015-38]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Adopting New Equity Trading Rules Relating to 
Trading Sessions, Order Ranking and Display, and Order Execution To 
Reflect the Implementation of Pillar, the Exchange's New Trading 
Technology Platform

May 13, 2015.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\

[[Page 28722]]

notice is hereby given that, on April 30, 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\ 15 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 adopt new equity trading rules relating to 
Trading Sessions, Order Ranking and Display, and Order Execution to 
reflect the implementation of 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On January 29, 2015, the Exchange announced 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''). NYSE Arca 
Equities will be the first trading system to migrate to Pillar.\4\ NYSE 
Arca Equities trading on Pillar would be an all-electronic price-time 
priority equities trading platform.
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    \4\ See Trader Update dated January 29, 2015, available here: 
http://www1.nyse.com/pdfs/Pillar_Trader_Update_Jan_2015.pdf.
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    The Exchange will be submitting proposed rule changes to correspond 
to the anticipated migration to Pillar, which would be done in phases. 
During the first phase, ETP Holders would continue to connect to 
existing NYSE Arca gateways to access the Pillar trading platform. In 
the second phase, the Exchange will introduce new customer gateways and 
connectivity as well as additional order type processing. To implement 
the first phase of Pillar migration, the Exchange will be submitting 
more than one rule filing. The Exchange will later submit rule filings 
to implement the second phase of Pillar migration.
    During the first phase of Pillar implementation, the Exchange would 
roll out the new technology platform over a period of time based on a 
range of symbols. Because orders entered in symbols not yet migrated to 
Pillar would continue to operate under current rules, the Exchange will 
keep its current rules, pending complete migration of symbols to Pillar 
and retirement of the current trading system, and add new rules that 
would be applicable to symbols that trade on the Pillar trading 
platform. As proposed, the new rules governing trading on Pillar would 
have the same numbering as current rules, but with the modifier ``P'' 
appended to the rule number. For example, Rule 7.34, governing Trading 
Sessions, would remain unchanged and continue to apply to any trading 
in symbols on the current trading platform. Proposed Rule 7.34P would 
govern Trading Sessions for trading in symbols migrated to the Pillar 
platform. Once all symbols have migrated to the Pillar platform, the 
Exchange will file a rule proposal to delete rules that are no longer 
operative.
    In this filing, the Exchange proposes to adopt new Pillar rules 
relating to Trading Sessions (NYSE Arca Equities Rule 7.34 (``Rule 
7.34'')), Order Ranking and Display (NYSE Arca Equities Rule 7.36 
(``Rule 7.36'')), and Order Execution (NYSE Arca Equities Rule 7.37 
(``Rule 7.37'')). As proposed, the new rules would be NYSE Arca 
Equities Rules 7.34P (Trading Sessions) (``Rule 7.34P''), 7.36P (Order 
Ranking and Display) (``Rule 7.36P''), and 7.37P (Order Execution) 
(``Rule 7.37P''). These three rules would set forth the foundation of 
the Exchange's equity trading model in Pillar, including the hours of 
operation, how orders would be ranked and displayed, and how orders 
would be executed.
    As discussed in greater detail below, the Exchange is not proposing 
that the core functionality of rules applicable to trading on Pillar 
would be different from rules applicable to trading on the current NYSE 
Arca equities trading system. However, with Pillar, the Exchange would 
introduce new terminology. Further, because the Exchange would operate 
both its current trading system for some symbols and the Pillar trading 
platform for other symbols, until rollout of Pillar across all symbols 
is complete, the Exchange is proposing to add all new rule text for 
proposed Rules 7.34P, 7.36P, and 7.37P. Because these rules and related 
proposed terminology changes would be the foundation for all other rule 
changes that will be proposed in connection with Pillar, the Exchange 
believes that filing for these rule changes before other rule changes 
will provide the public notice of how Pillar would operate generally.
Proposed Use of ``P'' Modifier
    To reflect how the ``P'' modifier would operate, the Exchange 
proposes to add rule text immediately following the reference to ``Rule 
7 Equities Trading,'' and before ``Section 1. General Provisions'' that 
would provide that rules with a ``P'' modifier would be operative for 
symbols that are trading on the Pillar trading platform. As further 
proposed, if a symbol is trading on the Pillar trading platform, a rule 
with the same number as a rule with a ``P'' modifier would no longer be 
operative for that symbol and the Exchange would announce by Trader 
Update when symbols are trading on the Pillar trading platform.
    Similarly, the Exchange proposes to add rule text following the 
title ``Rule 1 Definitions'' that provides that definitions with a 
paragraph designation that includes a ``P'' modifier would be operative 
for symbols trading on the Pillar trading platform. A definition with 
the same paragraph designation as a definition with a ``P'' modifier 
would not be operative for symbols trading on Pillar. Finally, to 
provide clarity that definitions that do not have a version with a 
``P'' modifier would apply across all symbols, regardless of the 
trading platform, the Exchange proposes to state explicitly that 
definitions that do not have a companion version with a ``P'' modifier 
would continue to be operative for all symbols.
    The Exchange believes that adding these explanations regarding the 
``P'' modifier in Exchange rules would provide transparency regarding 
which rules and definitions would be operative depending on the trading 
platform on which a symbol is trading.

[[Page 28723]]

Trading Sessions
    Rule 7.34 governs trading sessions. As set forth in Rule 7.34(a), 
the Exchange has three trading sessions:
    (1) the Opening Session, which begins at 1:00:00 a.m. Pacific Time 
and concludes at the commencement of the Core Trading Session. The 
Opening Auction and Market Order Auction occur during the Opening 
Session;
    (2) the Core Trading Session, which begins at 6:30:00 a.m. Pacific 
Time or at the conclusion of the Market Order Auction, whichever comes 
later, and concludes at 1:00:00 p.m. Pacific Time; and
    (3) the Late Trading Session, which begins following the conclusion 
of the Core Trading Session and concludes at 5:00:00 p.m. Pacific Time.
    Proposed Rule 7.34P(a)(1)-(3) would similarly provide for three 
trading sessions, but with several proposed differences from Rule 
7.34(a):
     First, the Exchange proposes non-substantive differences 
in the names of the trading sessions on the Pillar trading platform. 
Specifically, for Pillar, the Exchange proposes to call its three 
trading sessions the ``Early Trading Session,'' the ``Core Trading 
Session,'' and the ``Late Trading Session.'' The Exchange believes that 
the use of the term ``Early Trading Session,'' rather than the 
``Opening Session,'' better describes when the session occurs, which is 
before the Core Trading Session, and therefore would be clearer to 
market participants. In addition, the Exchange proposes the auction 
that opens the ``Early Trading Session'' would be called the ``Early 
Open Auction,'' instead of the ``Opening Auction'' and that the auction 
that opens the ``Core Trading Session'' would be called the ``Core Open 
Auction'' instead of the ``Market Order Auction.'' The Exchange 
believes that the auctions that open the respective sessions should be 
named to reflect both the name of the session and that it is an opening 
auction for the respective session.
     Second, the Exchange proposes that all time references for 
the trading sessions would be to Eastern Time, and would not include 
references to seconds.\5\ The Exchange's current rules for trading 
sessions use references to Pacific Time. In today's national trading 
environment, the Exchange believes that use of Eastern Time would 
reduce investor confusion by conforming references to time to how all 
other exchanges denote time in their rules. The Exchange similarly 
believes that references to seconds in proposed Rule 7.34P are 
unnecessary, as none of the other Exchange rules for the beginning and 
end of trading sessions use seconds.
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    \5\ The Exchange also proposes to change the time in the 
definition of Core Trading Hours, which is defined in Rule 1.1(j), 
from Pacific to Eastern Time references.
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     Third, the Exchange proposes that Rule 7.34P(a)(1) 
regarding Early Trading Sessions would be more detailed than Rule 7.34 
by adding text that is currently in Rule 7.35(a)(1), without any 
substantive differences.\6\ Specifically, the Exchange proposes to 
include in Rule 7.34P(a)(1) that the Corporation \7\ would begin 
accepting orders 30 minutes before the Early Trading Session begins. 
Because this rule text concerns when orders may be entered, the 
Exchange believes that it should be included in the rule governing 
trading sessions for Pillar. Proposed Rule 7.34P(a)(1) would further 
provide that the Early Open Auction would begin the Early Trading 
Session.
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    \6\ In a separate rule filing, the Exchange will propose Rule 
7.35P, which would govern auctions in Pillar.
    \7\ The term ``Corporation'' is defined in Rule 1.1(k) as NYSE 
Arca Equities, Inc., as described in the NYSE Arca Equities, Inc.'s 
Certification of Incorporation and Bylaws.
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     Fourth, the Exchange proposes to provide that the Core 
Open Auction would occur during the Core Trading Session. Rule 7.34(a) 
currently provides that the Market Order Auction occurs during the 
Opening Session. Because this auction is intended to open trading for 
the Core Trading Session,\8\ the Exchange believes it should be 
considered part of the Core Trading Session, rather than the Early 
Trading Session. The Exchange therefore proposes to specify in proposed 
Rule 7.34P(a)(2) that the Core Open Auction would begin the Core 
Trading Session. The Exchange further proposes to specify that the Core 
Trading Session would end at the conclusion of Core Trading Hours or 
the Core Closing Auction, whichever comes later. The proposed cross 
reference to Core Trading Hours, which is defined in Rule 1.1(j), takes 
into consideration that the Core Trading Session may end earlier than 
4:00 p.m. when the Exchange has an early scheduled close, e.g., the day 
before Christmas.
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    \8\ Rule 7.35 currently specifies that the Market Order Auction 
occurs at 9:30 a.m., which is the same time that the Core Trading 
Session begins for securities that do not have an auction.
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     Fifth, the Exchange proposes not to include in proposed 
Rule 7.34P the text currently in Rule 7.34 relating to extended Core 
Trading Session hours. Rules 7.34(a)(3)(A) and (B) provide that the 
Core Trading Session for specified securities concludes at 1:15:00 p.m. 
Pacific Time unless otherwise determined by the Corporation and that 
the Exchange would maintain on its Web site which securities for which 
the Core Trading Session would extend to 1:15:00 p.m. Because the 
Exchange does not have any securities for which the Core Trading 
Session extends to 1:15:00 p.m. Pacific Time, nor does it plan to 
provide for such an extended Core Trading Session for any securities, 
the Exchange proposes not to include this provision in proposed Rule 
7.34P.
     Finally, the Exchange proposes that text currently found 
in Rules 7.34(a)(4), 7.34(a)(5), and 7.34(b) not be included in 
proposed Rule 7.34P. Rules 7.34(a)(4) and (5) currently describe how 
the Exchange handles trading halts in specified securities that occur 
during different trading sessions. The Exchange believes that rule text 
relating to halts should be centralized in a single rule and will be 
proposing in a separate rule filing to add the text of current Rule 
7.34(a)(4) and (5) to proposed Rule 7.18P. Rule 7.34(b) sets forth 
Market Maker obligations to enter Q Orders for securities in which they 
are registered. The Exchange believes that this topic is not related to 
trading sessions directly and that this rule text should be included 
with the definition of Q Orders and therefore will be proposing in a 
separate rule filing to add the text of current Rule 7.34(b) to 
proposed Rule 7.31P.\9\ Because Rule 7.34(a)(4) defines the term 
``Derivative Securities Product'' and because that definition would not 
be included in proposed Rule 7.34P, the Exchange proposes to add a new 
definition to Rule 1.1 to define the terms Derivative Securities 
Product and UTP Derivative Securities Product. As proposed, the term 
``Derivative Securities Product'' would mean a security that meets the 
definition of ``derivative securities product'' in Rule 19b-4(e) under 
the Securities Exchange Act of 1934 \10\ and a ``UTP Derivatives 
Securities Product'' would mean a Derivative Securities Product that 
trades on the Exchange pursuant to unlisted trading privileges.
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    \9\ The Exchange will be submitting a separate rule filing to 
propose Rule 7.31P, which would govern orders and modifiers in 
Pilar.
    \10\ 17 CFR 240.19b-4(e)
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    The Exchange proposes to include the text of Rule 7.34(c) in 
proposed Rule 7.34P(b) with non-substantive differences and to provide 
more detail. Rule 7.34(c) provides that any Day Order entered into the 
NYSE Arca Marketplace \11\ may remain in effect for

[[Page 28724]]

one or more consecutive trading sessions on a particular day and that 
for each Day Order entered, the User \12\ must designate for which 
trading session(s) the order will remain in effect. Proposed Rule 
7.34P(b) would instead provide that any order entered into the NYSE 
Arca Marketplace must include a designation for which trading 
session(s) the order would remain in effect.
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    \11\ The term ``NYSE Arca Marketplace'' is defined in Rule 
1.1(e) as the electronic securities communication and trading 
facility designated by the Board of Directors through which orders 
of Users are consolidated for execution and/or display.
    \12\ The term ``User'' is defined in Rule 1.1(yy) as any ETP 
Holder or Sponsored Participant who is authorized to obtain access 
to the NYSE Arca Marketplace pursuant to Rule 7.29.
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    Proposed new Rule 7.34P(b) would also provide that an order would 
be eligible to participate only in the designated trading session(s) 
and may remain in effect for one or more consecutive trading sessions 
on a particular day. The Exchange further proposes to add that unless 
otherwise specified, an order designated for a later trading session 
would be accepted but not eligible to trade until the designated 
trading session begins. For example, if an order is entered at 8:00 
a.m. Eastern Time and is designated for the Core Trading Session only, 
it would be accepted but would not participate in the Early Trading 
Session. As discussed in more detail below, proposed Rule 7.34P(c) 
would specify orders that may not be entered either during or in 
advance of a designated trading session. In addition, the Exchange 
proposes to add that an order designated solely for a trading session 
that has already ended would be rejected. For example, an order entered 
at 10:00 a.m. Eastern Time that is designated only for the Early 
Trading Session would be rejected. The Exchange believes that the 
proposed changes would provide transparency in Exchange rules of when 
orders may be entered and when orders would be rejected.
    The Exchange also proposes to add in Rule 7.34P(b)(2) and (3) that 
an order with a day time-in-force instruction entered before or during 
the Early Trading Session would be deemed designated for the Early 
Trading Session and the Core Trading Session and that an order with a 
day time-in-force instruction entered during the Core Trading session 
would be deemed designated for the Core Trading Session. The Exchange 
believes that the proposed rule text provides transparency regarding 
which sessions during which an order may be eligible to participate.
    The Exchange proposes to describe the processes currently set forth 
in Rule 7.34(d) in proposed Rule 7.34P(c). Rule 7.34(d) describes which 
orders are permitted in each session. The Exchange proposes to revise 
how this topic is described in proposed Rule 7.34P(c) to provide 
generally that orders are eligible to participate in a session, unless 
otherwise provided in the rule. Accordingly, rule text in Rule 7.34(d) 
that specifies order types that are eligible to participate in a 
particular session would not be included in new Rule 7.34P because the 
proposed new text would make it unnecessary to specify the order types 
eligible to participate in a particular session. Those order types that 
would not be eligible to participate in each of the Exchange's three 
trading sessions are described below.
    With respect to the Early Trading Session, the Exchange proposes in 
new Rule 7.34P(c)(1) to provide that, unless otherwise specified in 
proposed paragraphs (c)(1)(A)--(E) of the new rule, orders and 
modifiers defined in Rule 7.31P that have been designated for the Early 
Trading Session would be eligible to participate in the Early Trading 
Session. The Exchange believes that the proposed rule text makes clear 
that unless specified in paragraphs (c)(1)(A)-(E) of new Rule 7.34P, 
all orders and modifiers in Rule 7.31P, if designated for the Early 
Trading Session, would be eligible to participate in the Early Trading 
Session.
    Unlike under current rules, the Exchange proposes that Tracking 
Orders would be eligible to participate in the Early Trading Session on 
the Pillar trading platform. Because the Exchange routes orders during 
the Early Trading Session and because Tracking Orders are intended to 
be passive liquidity on the Exchange to interact with an order before 
it is routed, the Exchange believes that Tracking Orders should be 
available in the Early Trading Session. Accordingly, rule text from 
Rule 7.34(d)(1)(C) would not be included in new Rule 7.34P(c)(1).
    The Exchange proposes that the following orders and modifiers in 
Rule 7.31P would not be eligible to participate in the Early Trading 
Session:
     Proposed Rule 7.34P(c)(1)(A) would provide that Market 
Orders, Q Orders, and Pegged Orders would not be eligible to 
participate in the Early Trading Session, which is current 
functionality. The Exchange further proposes to specify that any Market 
Orders, Q Orders, and Pegged Orders that include a designation for the 
Early Trading Session would be rejected. Such orders would be rejected 
if they also include a designation for another trading session; the 
designation for the Early Trading Session whether alone or with another 
designation would result in a rejection of the order. The Exchange 
further proposes to add that Market Pegged Orders entered before or 
during the Early Trading Session would be rejected regardless of the 
session designated for the order.\13\ For example, a Market Order, Q 
Order, or Primary Pegged Order designated for the Core Trading Session 
only that is entered at 8:00 a.m. Eastern Time would be accepted, but a 
Market Pegged Order designated for the Core Trading Session only 
entered at the same time would be rejected.
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    \13\ As set forth in proposed Rule 7.34P(b), orders that are 
entered during the Early Trading Session and designated for a later 
session only would be accepted and become eligible to trade once the 
designated trading session begins.
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     Proposed Rule 7.34P(c)(1)(B) would specify that Limit 
Orders designated IOC and Cross Orders would not be eligible to 
participate in the Early Open Auction and would be rejected if entered 
before the Early Open Auction concludes. The reference to Limit Orders 
designated IOC includes any order with an IOC instruction, including 
MPL Orders. Limit Orders designated IOC and Cross Orders are not 
currently eligible to participate in auctions, accordingly, this 
proposed rule change does not represent new functionality. However, the 
Exchange believes that the proposed change promotes transparency in 
Exchange rules regarding when an order would be accepted or rejected.
     Proposed Rule 7.34P(c)(1)(C) would specify that Limit 
Orders designated IOC and Cross Orders entered before or during the 
Early Trading Session and designated for the Core Trading Session only 
would be rejected if entered before the Core Open Auction concludes. 
The Exchange believes that this proposed rule would provide 
transparency because orders designated IOC must be eligible for an 
immediate execution and are not eligible for auctions, and an IOC order 
designated with a later trading session is by its terms inconsistent.
     Proposed Rule 7.34P(c)(1)(D) would provide that for 
securities that are not eligible for an auction on the Exchange, Market 
Orders designated for Core Trading Session and Auction-Only Orders 
would be routed directly to the primary listing market on arrival. This 
proposed treatment of Market Orders and Auction-Only Orders in 
securities that are not eligible for an auction on the Exchange would 
be different from current functionality.\14\ Currently,

[[Page 28725]]

Market Orders or Auction-Only Orders are routed to the primary listing 
market on arrival only if they include a ``Primary Only'' order 
designation. The Exchange proposes that on the Pillar trading platform, 
during the Early Trading Session, a Market Order or Auction-Only Order 
in a security that is not eligible for an auction on the Exchange would 
be routed to the primary listing market regardless of whether it 
includes a Primary Only designation. The Exchange believes that this 
proposed functionality would be consistent with the expectations of a 
User with respect to such orders, which would not be eligible for an 
execution on the Exchange. The Exchange proposes to further provide 
that any order routed directly to the primary listing market on 
arrival, which includes the above-described orders and Primary Only 
Orders, would be cancelled if that market is not accepting orders.
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    \14\ Proposed Rule 7.34P(c)(1)(D) would also represent a change 
to current Exchange functionality regarding MOC Orders and LOC 
Orders. Currently, the Exchange does not accept such orders before 
9:30 a.m. Eastern Time. On the Pillar trading platform, the Exchange 
would accept such orders during the Early Trading Session, and if 
for a security that is not eligible for an auction on the Exchange, 
route such orders to the primary listing market if such market is 
accepting orders.
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     Proposed Rule 7.34P(c)(1)(E) would provide that MOO 
Orders, MOC Orders, LOC Orders, and Primary Only Orders designated for 
the Early Trading Session would be rejected. This represents current 
functionality. LOO Orders may be designated for the Early Trading 
System in order to participate in a reopening auction following a 
trading halt. LOO Orders in securities not eligible for an auction on 
the Exchange that are designated for an Early Trading Session would be 
routed to the primary listing market, consistent with proposed Rule 
7.34P(c)(1)(D) . The Exchange proposes to include this text in proposed 
Rule 7.34P in order to provide transparency of when an order would be 
rejected.
    With respect to the Core Trading Session, the Exchange proposes in 
new Rule 7.34P(c)(2) to provide that, unless otherwise specified in 
proposed paragraphs (c)(2)(A)-(B) of the new rule, orders and modifiers 
defined in Rule 7.31P and 7.44P that have been designated for the Core 
Trading Session would be eligible to participate in the Core Trading 
Session.\15\ The Exchange believes that the proposed rule text makes 
clear that, unless specified in paragraphs (c)(2)(A)-(B) of new Rule 
7.34P, all orders and modifiers in Rule 7.31P and 7.44P, if designated 
for the Core Trading Session, would be eligible to participate in the 
Core Trading Session. The proposed exceptions to the general rule would 
be:
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    \15\ The Exchange notes that orders and modifiers described in 
Rule 7.44 governing the Retail Liquidity Program (``RLP'') are 
eligible to participate in the Core Trading Session only. The 
Exchange will submit a separate rule filing to adopt Rule 7.44P to 
govern RLP in Pillar.
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     Proposed Rule 7.34P(c)(2)(A) would provide that Market 
Orders in securities that are not eligible for the Core Open Auction 
would be routed to the primary listing market until the first opening 
print of any size on the primary listing market or 10:00 a.m. Eastern 
Time, whichever is earlier. This proposed rule text is based on current 
Rule 7.35(c), which states that for all exchange-listed securities for 
which the Exchange does not conduct a Market Order Auction, ``the 
Corporation will route all Market Orders to the primary market until 
the first opening print on the primary market.'' This current rule 
makes clear that the Exchange refrains from processing Market Orders 
until the primary listing market has printed a transaction, and not 
just opened for trading based on an opening quote. Because this rule 
relates to how orders are treated during a trading session, the 
Exchange believes that it is more appropriately included in proposed 
Rule 7.34P(c) than in a rule governing auctions.
    In moving the rule text, the Exchange is proposing two substantive 
differences. First, to specify that the first opening print may include 
an odd-lot transaction, the Exchange proposes to provide in Rule 
7.34P(c)(2)(A) that Market Orders in securities that are not eligible 
for the Core Open Auction would be routed to the primary listing market 
until the first print of any size on the primary listing market. The 
Exchange believes it is appropriate to include an odd-lot transaction 
print because such a transaction indicates that trading has begun on 
the primary listing market. Second, the Exchange proposes to provide 
for an outside time frame for when the Exchange would stop routing 
Market Orders to the primary listing market and begin processing those 
orders on the Exchange. As proposed, the Exchange would continue 
routing Market Orders to the primary listing market until the first 
print of any size on such market or 10:00 a.m. Eastern Time, whichever 
is earlier. The Exchange believes that if the primary listing market 
has not opened for trading by 10:00 a.m. Eastern Time and has not 
halted the security, the Exchange should begin processing Market Orders 
in all securities. The proposed time of 10:00 a.m. Eastern Time is 
based on NYSE Rule 123D and NYSE MKT Rule 123D--Equities, which provide 
for delayed opening procedures for NYSE- and NYSE MKT-listed 
securities. Specifically, under those rules, a security is considered 
in a delayed opening if it is not open by 10:00 a.m. Eastern Time.
     Proposed Rule 7.34P(c)(2)(B) would provide that Auction-
Only Orders in securities that are not eligible for an auction on the 
Exchange would be accepted and routed directly to the primary listing 
market. This proposed rule text is a continuation of the treatment of 
such orders as described in proposed Rule 7.34P(c)(1)(D) in that during 
the Core Trading Session, the Exchange would continue to accept and 
route such orders directly to the primary listing market. This proposal 
represents a change from current practice, as Rule 7.31(t) currently 
provides that the Exchange does not route Auction-Only orders to other 
exchanges. Instead, the Exchange currently rejects Auction-Only Orders 
in securities that are not eligible for an auction on the Exchange, 
unless they include a Primary Only Order designation. In Pillar, the 
Exchange would accept such orders and route them to the primary listing 
market.\16\
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    \16\ Because the treatment of Auction-Only Orders in securities 
that are not eligible for any auction on the Exchange would be 
covered in proposed Rule 7.34P, the Exchange would propose that new 
Rule 7.31P not include this same topic.
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    With respect to the Late Trading Session, the Exchange proposes in 
new Rule 7.34P(c)(3) to provide that unless otherwise specified in 
proposed paragraphs (c)(3)(A)-(C) of the new rule, orders and modifiers 
defined in Rule 7.31P that have been designated for the Late Trading 
Session would be eligible to participate in the Late Trading Session. 
The Exchange believes that this proposed rule text makes clear that 
unless specified in paragraphs (c)(3)(A)-(C) of new Rule 7.34P, all 
orders and modifiers in Rule 7.31P, if designated for the Late Trading 
Session, would be eligible to participate in the Late Trading Session.
    Unlike under current rules, the Exchange proposes that Tracking 
Orders would be eligible to participate in the Late Trading Session, as 
they would be in the Early Trading Session, on the Pillar trading 
platform. Because the Exchange routes orders during the Late Trading 
Session and because Tracking Orders are intended to be passive 
liquidity on the Exchange to interact with an order before it is 
routed, the Exchange believes that Tracking Orders should be available 
in the Late Trading Sessions. Accordingly, rule text from current Rule 
7.34(d)(3)(C) would not be included in new Rule 7.34P(c)(3).
    The Exchange proposes that the following orders and modifiers in 
Rule 7.31P would not be eligible to participate in the Late Trading 
Session:

[[Page 28726]]

     Proposed Rule 7.34P(c)(3)(A) would provide that Market 
Orders, Q Orders, and Pegged Orders would not be eligible to 
participate in the Late Trading Session, which is current 
functionality. The rule would further provide that Market Orders, Q 
Orders, and Pegged Orders that include a designation for the Late 
Trading Session would be rejected. For example, if a Market Order, Q 
Order, or Pegged Order were entered during the Core Trading Session and 
designated for both the Core and Late Trading Session, because it 
includes a designation for the Late Trading Session, such order would 
be rejected. The Exchange believes that this proposed rule text 
provides transparency in Exchange rules of when an order would be 
accepted or rejected.
     Proposed Rule 7.34P(c)(3)(B) would provide that orders 
that route directly to the primary listing market on arrival would be 
cancelled if that market is not accepting orders, which is current 
functionality.
     Proposed Rule 7.34P(c)(3)(C) would provide that MOO 
Orders, MOC Orders, LOC Orders, and Primary Only Orders designated for 
the Late Trading Session would be rejected. This represents current 
functionality. LOO Orders may be designated for the Late Trading System 
in order to participate in a reopening auction following a trading 
halt. LOO Orders in securities not eligible for an auction on the 
Exchange that are designated for an Early Trading Session would be 
routed to the primary listing market. The Exchange proposes to include 
this text in proposed Rule 7.34P in order to provide transparency of 
when an order would be rejected.
    Proposed Rule 7.34P(d) regarding customer disclosures is based on 
Rule 7.34(e) with non-substantive differences to conform terminology 
with the proposed changes to new Rule 7.34P, including use of the term 
``Early Trading Session'' instead of ``Opening Session,'' ``Core Open 
Auction'' instead of ``Market Order Auction,'' and ``Limit Order'' 
instead of ``Limited Price Order.''
    Finally, proposed Rule 7.34P(e) is based on Rule 7.34(f) without 
any substantive differences and would provide that trades on the NYSE 
Arca Marketplace executed and reported outside of the Core Trading 
Session would be designated as .T trades.
Order Ranking and Display
    Rule 7.36 governs order ranking and display for the current Arca 
trading system. The rule provides that the NYSE Arca Marketplace shall 
display to Users and other market participants all non-marketable limit 
orders in the Display Order Process. The rule further provides that the 
NYSE Arca Marketplace will also disseminate current consolidated 
quotation/last sale information, and such other market information as 
may be available from time to time pursuant to agreement between the 
Corporation and other market centers.
    Rule 7.36(a) sets forth that orders of Users are ranked and 
maintained in the Display Order Process and/or the Working Order 
Process of the NYSE Arca Book \17\ according to price-time priority, 
such that within each price level, orders are organized by the time of 
entry in the manner described in the rule.
---------------------------------------------------------------------------

    \17\ The term ``NYSE Arca Book'' is defined in Rule 1.1(a) as 
the NYSE Arca Marketplace's electronic file of orders, which contain 
all of the User's orders in each of the Display Order, Working 
Order, and Tracking Order Processes.
---------------------------------------------------------------------------

    Rule 7.36(a)(1) describes the Display Order Process and Rule 
7.36(a)(2) describes the Working Order Process. Rule 7.36(a)(3) sets 
forth that if an order has been modified in size, the order retains 
priority if the modification involves a decrease in the size of the 
order, but if the modification increases the size of the order or 
changes the price, the order will be treated as a new order and receive 
a new time priority. Rule 7.36(b) provides that, except as provided in 
Rule 7.7, all orders displayed in the Display Order Process are 
displayed on an anonymous basis. Finally, Rule 7.36(c) provides that 
the best-ranked displayed orders to buy (sell) in the NYSE Arca Book 
and the aggregate size of such orders are collected and made available 
to quotation vendors for dissemination pursuant to Rule 11Ac1-1 under 
the Exchange Act. The rule further provides that if non-marketable odd-
lot sized orders can be aggregated to equal at least a round lot, such 
odd-lot sized orders will be displayed as the best ranked displayed 
orders to sell (buy) at the least aggressive price at which such odd-
lot sized orders can be aggregated to equal at least a round lot.
    Proposed Rule 7.36P would describe for the Pillar trading platform 
order ranking and display of orders, without any substantive 
differences from Rule 7.36. As discussed in detail below, the Exchange 
believes that the proposed new rule text provides transparency with 
respect to how the Exchange's price-time priority model would operate 
through the use of new terminology applicable to all orders on the 
Pillar trading platform.
    Rule 7.36P(a) would set forth definitions for purposes of all of 
Rule 7 Equities Trading on the Pillar trading platform, including Rule 
7.37P (Order Execution and Routing), described below. The Exchange 
believes that these proposed definitions would provide transparency 
regarding how the Exchange operates, and would serve as the foundation 
for amendments to orders and modifiers that will be in proposed Rule 
7.31P.
     Proposed Rule 7.36P(a)(1) would define the term ``display 
price'' to mean the price at which a Limit Order is displayed, which 
may be different from the limit price or working price of the order. 
For example, Rule 7.31 provides for order types that may be displayed 
at prices that are different from the limit price, such as a PNP Blind 
Order.\18\ The Exchange proposes to define the term ``display price'' 
in Pillar to explain these existing concepts uniformly in Exchange 
rules applicable to trading on the Pillar trading platform.
---------------------------------------------------------------------------

    \18\ See Rule 7.31(e)(4). The Exchange notes that in connection 
with Pillar, the Exchange will be renaming the PNP Blind Order as an 
``Arca Only Order,'' which will be proposed in a separate rule 
filing to adopt new Rule 7.31P. See Trader Update dated March 2, 
2015, available here: https://www.nyse.com/publicdocs/nyse/markets/nyse/Pillar_Trader_Update_Mar_2015.pdf.
---------------------------------------------------------------------------

     Proposed Rule 7.36P(a)(2) would define the term ``limit 
price'' to mean the highest (lowest) specified price at which a Limit 
Order to buy (sell) is eligible to trade. The limit price is designated 
by the User. As noted in the proposed definitions of display price and 
working price, the limit price designated by the User may differ from 
the price at which the order would be displayed or eligible to trade.
     Proposed Rule 7.36P(a)(3) would define the term ``working 
price'' to mean the price at which an order is eligible to trade at any 
given time, which may be different from the limit price or display 
price of an order. The new term ``working price'' identifies for all 
orders the price at which an order is eligible to trade at any given 
time. Some exchanges refer to this concept as the price at which an 
order is ``ranked.'' \19\ The Exchange believes that the term ``working 
price'' would provide clarity regarding the price at which an order may 
be executed at any given time. Specifically, the Exchange believes that 
use of the term ``working'' denotes that this is a price that is 
subject to change, depending on circumstances. The Exchange will be 
using this term in connection with orders and modifiers when it files a 
separate rule filing to adopt Rule 7.31P.
---------------------------------------------------------------------------

    \19\ See, e.g., BATS Exchange, Inc. Rule 11.9(g)(1)(A) 
(referring to where an order is ``ranked'' as the price of an 
order).
---------------------------------------------------------------------------

     Proposed Rule 7.36P(a)(4) would define the term ``working 
time'' to mean the effective time sequence assigned to

[[Page 28727]]

an order for purposes of determining its priority ranking. The Exchange 
proposes to use the term ``working time'' in its rules for trading on 
the Pillar trading platform instead of terms such as ``time sequence'' 
or ``time priority,'' which are used in rules governing trading on the 
Exchange's current system. The Exchange believes that use of the term 
``working'' denotes that this is a time assigned to an order for 
purpose of ranking and is subject to change, depending on 
circumstances.
    Proposed Rule 7.36P(b) would govern the display of non-marketable 
Limit Orders on the Pillar trading system and is intended to be 
comparable to the preamble to Rule 7.36, without any substantive 
differences. As proposed, the Exchange would display all non-marketable 
Limit Orders, unless the order or modifier instruction specifies that 
all or a portion of the order is not to be displayed.
    The Exchange proposes to define in proposed Rule 7.36P(b)(1) what 
it means for an order to be displayed for ranking purposes. As 
proposed, an order would be considered displayed for ranking purposes 
if the price, side, and size of the order are disseminated via a market 
data feed, which includes a proprietary market data feed of the 
Exchange. As further proposed, odd-lot sized Limit Orders and the 
displayed portion of Reserve Orders would be considered displayed for 
ranking purposes. This proposed rule text is intended to provide 
transparency in Exchange rules regarding which orders are considered 
displayed for ranking purposes, and therefore eligible to be considered 
Priority 2--Display Orders (described below). Specifically, odd-lot 
sized orders are displayed on the Exchange's proprietary data feed and 
would be displayed on the public feed if aggregated to equal a round 
lot or more would thus be considered ``displayed'' orders for purposes 
of priority ranking.
    Proposed Rule 7.36P(b)(2) would be comparable to Rule 7.36(b) 
without any substantive differences and would provide that except as 
otherwise permitted by Rule 7.7,\20\ all non-marketable displayed Limit 
Orders would be displayed on an anonymous basis. The Exchange proposes 
not to include reference to the Display Order Process in Rule 
7.36P(b)(2) because, as discussed above, the Exchange is not proposing 
to use that terminology in Pillar.
---------------------------------------------------------------------------

    \20\ Rule 7.7 provides that bids and offers disseminated by the 
Exchange will not include an ETP Holder's identify unless the ETP 
Holder affirmatively elects to disclosed its identify.
---------------------------------------------------------------------------

    Finally, proposed Rule 7.36P(b)(3) would be comparable to Rule 
7.36(c) regarding dissemination, without any substantive differences. 
The Exchange proposes to use the term ``will'' in Proposed Rule 
7.36P(b)(3) instead of ``shall.'' In addition, the Exchange would not 
include in proposed Rule 7.36P rule text from the second sentence of 
the preamble to Rule 7.36. The Exchange is a participant in the CQ Plan 
and CTA Plan for Tape A- and B-listed securities and a participant in 
the Nasdaq UTP Plan for Tape C-listed securities. The respective 
governing documents of those plans set forth the Exchange's obligations 
regarding dissemination of quotes and last-sale information and thus, 
the Exchange does not believe it is necessary to duplicate a subset of 
those requirements in its rules. Finally, the Exchange proposes to cite 
to the governing federal rule by referencing Rule 602 of Regulation NMS 
\21\ instead of Rule 11Ac1-1 under the Exchange Act, which was 
superseded by Regulation NMS.
---------------------------------------------------------------------------

    \21\ 17 CFR 242.602.
---------------------------------------------------------------------------

    Proposed Rule 7.36P(c) would describe the Exchange's general 
process for ranking orders and would be comparable to the text 
immediately following Rule 7.36(a), without any substantive 
differences. As proposed, Rule 7.36P(c) would provide that all non-
marketable orders would be ranked and maintained in the NYSE Arca Book 
according to price-time priority in the following manner: (1) Price; 
(2) priority category; (3) time; and (4) ranking restrictions 
applicable to an order or modifier condition. Accordingly, orders would 
be first ranked by price. Next, at each price level, orders would be 
assigned a priority category. Orders in each priority category would be 
required to be exhausted before moving to the next priority category. 
Within each priority category, orders would be ranked by time. These 
general requirements for order ranking are applicable to all orders, 
unless an order or modifier has a specified exception to this ranking 
methodology, as described in more detail below. The Exchange is 
proposing this ranking description instead of using the concepts of a 
Display Order Process, Working Order Process, and Tracking Order 
Process in Rule 7.36. However, substantively there would be no 
difference in how the Exchange ranks orders on the Pillar trading 
platform from how it ranks orders in in the current trading system. For 
example, a non-displayed order would always be ranked after a displayed 
order at the same price, even if the non-displayed order has an earlier 
working time.
    To provide transparency regarding the Exchange's ranking process, 
the Exchange proposes to set forth in Rule 7.36P additional detail 
regarding each step. Proposed Rule 7.36P(d) would describe how orders 
are ranked based on price. Specifically, as proposed, all orders would 
be ranked based on the working price of an order. Orders to buy would 
be ranked from highest working price to lowest working price and orders 
to sell would be ranked from lowest working price to highest working 
price. The rule would further provide that if the working price of an 
order changes, the price priority of an order would change. This price 
priority is current functionality, but the new rule would use the 
proposed term ``working price.'' The Exchange believes the proposed 
rule text provides transparency regarding the price-ranking process at 
the Exchange.
    Proposed Rule 7.36P(e) would describe the proposed priority 
categories for ranking purposes. As proposed, at each price point, all 
orders would be assigned a priority category. If at a price point there 
are no orders in a priority category, the next category would have 
first priority. The proposed rules applicable to the Pillar trading 
platform would not use the terms ``Display Order Process,'' ``Working 
Order Process'' and ``Tracking Order Process'' for describing priority 
categories. The Exchange does not believe that Rule 7.36P, which sets 
forth the general rule regarding ranking, should provide specifics for 
one or more order types and therefore the Exchange will address 
separately in new Rule 7.31P governing orders and modifiers which 
priority category correlates to order types and modifiers. Accordingly, 
details regarding which proposed priority categories would be assigned 
to the display and reserve portions of Reserve Orders, which is in Rule 
7.36, will be addressed in new Rule 7.31P and therefore not be included 
in proposed Rule 7.36P, except as described below.
    The proposed priority categories would be:
     Proposed Rule 7.36P(e)(1) would specify ``Priority 1--
Market Orders,'' which provides that unexecuted Market Orders would 
have priority over all other same-side orders with the same working 
price. This proposed priority is the same as current Exchange priority 
rules under which resting Market Orders have priority over other orders 
at

[[Page 28728]]

the same price.\22\ Circumstances when an unexecuted Market Order would 
be eligible to execute against an incoming contra-side order include 
when a Market Order has exhausted all interest at the NBBO and is 
waiting for an NBBO update before executing again, pursuant to Rule 
7.31(a), or when a Market Order is held unexecuted because it has 
reached a trading collar, pursuant to Rule 7.31(a)(3)(A). In such 
circumstances, the unexecuted Market Order(s) would have priority over 
all other resting orders at that price.
---------------------------------------------------------------------------

    \22\ This priority is currently specified in Rule 7.16(f)(viii).
---------------------------------------------------------------------------

     Proposed Rule 7.36P(e)(2) would specify ``Priority 2--
Display Orders.'' This proposed priority category would replace the 
``Display Order Process.'' As proposed, non-marketable Limit Orders 
with a displayed working price would have second priority. For an order 
that has a display price that differs from the working price of the 
order, if the working price is not displayed, the order would not be 
ranked Priority 2 at the working price.
     Proposed Rule 7.36P(e)(3) would specify ``Priority 3--Non-
Display Orders.'' This priority category would be used in Pillar rules, 
rather than the ``Working Order Process.'' As proposed, non-marketable 
Limit Orders for which the working price is not displayed, including 
the reserve interest of Reserve Orders, would have third priority.
     Proposed Rule 7.36P(e)(4) would specify ``Priority 4--
Tracking Orders.'' This priority category would replace the ``Tracking 
Order Process,'' as discussed in further detail below in connection 
with proposed Rule 7.37P. As proposed, Tracking Orders would have 
fourth priority.
    Proposed Rule 7.36P(f) would set forth that within each priority 
category, orders would be ranked based on time priority.
     Proposed Rule 7.36P(f)(1) would provide that an order is 
assigned a working time based on its original entry time, which is the 
time an order is first placed on the NYSE Arca Book. This proposed 
process of assigning a working time to orders is current functionality 
and is substantively the same as current references to the ``time of 
original order entry'' found in several places in Rule 7.36. To provide 
transparency in Exchange rules, the Exchange further proposes to 
include in proposed Rule 7.36P(f) how the working time would be 
determined for orders that are routed. As proposed:
    [cir] Proposed Rule 7.36P(f)(1)(A) would specify that an order that 
is fully routed to an Away Market \23\ on arrival would not be assigned 
a working time unless and until any unexecuted portion of the order 
returns to the NYSE Arca Book. The Exchange notes that this is the 
current process for assigning a working time to an order and proposes 
to include it in Exchange rules to provide transparency regarding what 
is considered the working time of an order that was fully routed on 
arrival.
---------------------------------------------------------------------------

    \23\ The Exchange proposes Rule 1.1(ffP), which would define the 
term ``Away Market.'' The proposed definition is based on the 
existing definition of ``NOW Recipient,'' which is a term that the 
Exchange would not be using in Pillar. For Pillar, the proposed 
definition of ``Away Market'' would reference the term ``alternative 
trading system'' instead of ECN.
---------------------------------------------------------------------------

    [cir] Proposed Rule 7.36P(f)(1)(B) would specify that for an order 
that is partially routed to an Away Market on arrival, the portion that 
is not routed would be assigned a working time. If any unexecuted 
portion of the order returns to the NYSE Arca Book and joins any 
remaining resting portion of the original order, the returned portion 
of the order would be assigned the same working time as the resting 
portion of the order. If the resting portion of the original order has 
already executed and any unexecuted portion of the order returns to the 
NYSE Arca Book, the returned portion of the order would be assigned a 
new working time. This process for assigning a working time to 
partially routed orders is the same as currently used by the Exchange. 
The Exchange proposes to include this detail in Exchange rules to 
provide transparency regarding what is considered the working time of 
an order.
     Proposed Rule 7.36P(f)(2) would provide that an order 
would be assigned a new working time any time the working price of an 
order changes. This proposed rule text would be based on the rule text 
in Rule 7.36(a)(3), without any substantive differences. A change to 
the working price could be because of a User's instruction or because 
the order or modifier has a price that can change based on a reference 
price, such as an MPL Order, which is priced based on the PBBO.
     Proposed Rule 7.36P(f)(3) would provide that an order 
would be assigned a new working time if the size of the order increases 
and that an order would retain its working time if the size of the 
order is decreased. This proposed rule text would be based on rule text 
in the first and second sentences of Rule 7.36(a)(3), without any 
substantive differences.
     Proposed Rule 7.36P(f)(4) would provide that an order 
retains its working time if the order marking is changed from: (A) Sell 
to sell short; (B) sell to sell short exempt; (C) sell short to sell; 
(D) sell short to sell short exempt; (E) sell short exempt to sell; and 
(F) sell short exempt to sell short. This rule text would use for the 
Pillar trading platform rules the same rule text as in Rule 
7.16(f)(viii), without any substantive differences. The Exchange 
proposes to include the text from Rule 7.16(f)(viii) regarding order 
priority when changing order marking to Rule 7.36P to consolidate 
ranking in a single rule.
    Proposed Rule 7.36P(g) would specify that the Exchange would 
enforce ranking restrictions applicable to specified order or modifier 
instructions. These order and modifier instructions would be identified 
in proposed new Rules 7.31P and 7.44P, which the Exchange will submit 
in a rule filing prior to implementing the Pillar trading platform.
    In addition, the Exchange proposes a definition in Rule 1.1(aP) of 
NYSE Arca Book that would be applicable to the Pillar rules. The 
proposed definition would differ from the current definition of NYSE 
Arca Book in Rule 1.1(a) in that it would not include references to the 
terms ``Display Order Process,'' ``Working Order Process,'' and 
``Tracking Order Process,'' which as discussed above, are terms that 
will not be used in Pillar. As proposed, new Rule 1.1(aP) would provide 
that 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.
Order Execution and Routing
    Current Rule 7.37, titled ``Order Execution,'' governs order 
execution and routing at the Exchange. The preamble to the rule 
provides that like-priced orders, bids and offers shall be matched for 
execution following steps 1 through 4 of the rule, provided, however, 
for an execution to occur in any Order Process, the price must be equal 
to or better than (1) the PBBO, in the case of a Limit Order or Q Order 
or (2) the NBBO in the case of an Inside Limit Order, a Pegged Limit 
Order, or a Market order. If such an order is not executable within 
those parameters, the rule provides that it may be routed to away 
markets as provided in Rule 7.37(d).
    The rule then sets forth steps 1 through 4. Step 1 is the Display 
Order Process, which provides that incoming orders are first matched 
for execution against other orders in the Display Order process. The 
rule provides further specificity regarding how certain orders are 
ranked. The rule also sets forth that the size of an incoming Reserve 
Order

[[Page 28729]]

includes both the displayed and reserve size and the size of the 
portion of the Reserve Order resident in the Display Order Process is 
equal to its displayed size. If an incoming marketable order is not 
executed in its entirety, the remaining part of the order is routed to 
the ``Working Order'' process. The rule further provides that an 
incoming order that is not marketable enters the Working Order Process 
to execute against any Discretionary Orders at or better than the NBBO.
    Step 2 is the Working Order Process, which provides that incoming 
marketable orders are matched against orders in the Working Order 
process by the order of ranking of the orders in the Working Order 
Process. The rule sets forth how specified orders, such as 
Discretionary Orders, interact within the Working Order Process. The 
rule further provides that if the incoming marketable order has not 
been executed in its entirety, the remaining portion of the order shall 
be routed to the Tracking Order Process.
    Step 3 is the Tracking Order Process, which is currently available 
during Core Trading Hours only. In the Tracking Order Process, if an 
order that is eligible to route to an away market has not been executed 
in its entirety under Steps 1 through 2, the NYSE Arca Marketplace 
shall match and execute any remaining part of such order in the 
Tracking Order Process in time/price priority.
    Step 4 sets forth the Exchange's process for routing away and 
specifies certain orders that are not eligible to be routed. For orders 
that are eligible to be routed, the rule specifies that if the order is 
designated as a Market, Inside Limit, or Pegged Order, the Exchange 
shall utilize all available quotes in the routing determination, or if 
the order is designated as a Limit Order, the Exchange shall utilize 
available Protected Quotations in the routing determination. The rule 
sets forth additional detail that orders will be routed as Intermarket 
Sweep Orders (``ISO'') and any remaining portion of the order will be 
ranked and displayed in the NYSE Arca Book pursuant to Rule 7.36.
    The rule further provides that an order that is routed away shall 
remain outside the NYSE Arca Marketplace for a prescribed period of 
time and may be executed in whole or in part subject to the applicable 
trading rules of the relevant market center or market participant and 
that when an order remains outside the NYSE Arca Marketplace, it will 
have no time standing relative to other orders received from Users at 
the same price that may be executed against the NYSE Arca Book. The 
rule also provides that when an order is outside the NYSE Arca 
Marketplace, it will not have time standing in the NYSE Arca Book. 
Finally, with respect to routing, the rule provides that for an order 
that is eligible to route away, Users may instruct NYSE Arca to bypass 
any market centers that are not posting Protected Quotations within the 
meaning of Regulation NMS.
    Rule 7.37(e), (f), and (g) set forth how the Exchange operates 
consistent with Regulation NMS for locking and crossing quotations and 
specified exceptions to Regulation NMS, including the self-help 
exception; ISO Exception; single price openings, reopenings, and 
closing transactions; benchmark trades; stopped orders; and the 
contingent order exemption.
    Commentary .01 to Rule 7.37 sets forth the Exchange's use of data 
feeds for the handling, execution, and routing of orders, as well as 
for regulatory compliance.
    The Exchange proposes Rule 7.37P to describe the order execution 
and routing rules for the Pillar trading platform. Proposed Rule 7.37P 
would not be substantively different from Rule 7.37. The Exchange 
proposes that the title for new Rule 7.37P would be ``Order Execution 
and Routing.'' The title of Rule 7.37 is ``Order Execution.'' The 
Exchange believes that because Rule 7.37P, like Rule 7.37, would 
include the Exchange's routing procedures, referencing to ``Routing'' 
in the rule's title would provide additional transparency in Exchange 
rules regarding what topics would be covered in new Rule 7.37P.
    Proposed Rule 7.37P(a) and its subsections would set forth the 
Exchange's order execution process and would cover the same subject as 
the preamble to Rule 7.37, without any substantive differences. As 
proposed, an incoming marketable order would be matched for execution 
against contra-side orders in the NYSE Arca Book according to the 
price-time priority ranking of the resting orders, subject to specified 
parameters. Proposed Rule 7.37P(a)(1) would provide that orders that 
are routed to an Away Market on arrival would not be assigned a working 
time or be matched for execution on the NYSE Arca Book. This provision 
would apply to orders that the Exchange routes based on the time an 
order is entered, e.g., a Market Order in a security that is not 
eligible for an auction on the Exchange that is entered during the 
Early Trading Session, or an order with an instruction to route 
directly to the primary market on arrival, e.g., a Primary Only Order. 
The Exchange believes that the proposed rule provides transparency that 
an order that is intended to route on arrival would not be subject to 
order execution at the Exchange.
    Proposed Rule 7.37P(a)(2) would provide that, unless an order 
qualifies for an exception to the Order Protection Rule in Rule 611 of 
Regulation NMS,\24\ orders will not trade at prices that would trade 
through a protected quotation.\25\ Proposed Rule 7.37P(a)(3) would 
provide that Limit Orders would be executed at prices equal to or 
better than the PBBO and proposed Rule 7.37P(a)(4) would provide that 
Market Orders and Inside Limit Orders would be executed at prices equal 
to or better than the NBBO. The proposed rule for the Pillar trading 
platform is based on existing requirements as set forth in the preamble 
to Rule 7.37 and is consistent with the order processing of Market 
Orders, Limit Orders, and Inside Limit Orders as set forth in Rule 
7.31.
---------------------------------------------------------------------------

    \24\ 17 CFR 242.611.
    \25\ The term ``trade through'' is defined in Rule 1.1(fff) as 
the purchase or sale of an NMS stock during regular trading hours, 
either as principal or agent, at a price that is lower than a 
Protected Bid or higher than a Protected Offer. The term ``protected 
quotation'' is defined in Rule 1.1(eee) as a quotation that is a 
Protected Bid or a Protected Offer, and those terms are defined in 
the rule as well.
---------------------------------------------------------------------------

    As discussed above, the Exchange proposes to eliminate the 
terminology associated with the Display Order Process, Working Order 
Process, and Tracking Order Process. Therefore, similar to proposed 
Rule 7.36P, the Exchange would not include these terms in new Rule 
7.37P. Moreover, the Exchange does not believe that it is necessary to 
restate in new Rule 7.37P the Exchange's ranking process, which would 
be set forth in proposed Rule 7.36P. In addition, consistent with the 
Exchange's proposed approach to new Rule 7.34P and 7.37P, the Exchange 
proposes to eliminate, where feasible, reference to specific order 
types and instead state the Exchange's general order execution 
methodology. Any exceptions to such general requirements would be set 
forth in connection with specific order or modifier definitions in 
proposed Rule 7.31P. Accordingly, the Exchange will not include in new 
Rule 7.37P the process currently referred to as ``Step 3'' and instead, 
details regarding how Tracking Orders would operate would be included 
in proposed Rule 7.36P(e)(3), as discussed above regarding ranking 
priority assigned to Tracking Orders, and new Rule 7.31P.
    Proposed Rule 7.37P(b) would set forth the Exchange's order routing 
process and is intended to cover the same subject as Rule 7.37(d), 
which is

[[Page 28730]]

currently referred to as ``Step 4'' in order processing, without any 
substantive differences. Proposed Rule 7.37P(b) would provide that 
unless an order has an instruction not to route, after being matched 
for execution with any contra-side orders in the NYSE Arca Book 
pursuant to proposed Rule 7.37P(a), marketable orders would be routed 
to Away Markets.
    The proposed rule would then set forth additional details regarding 
routing:
     Proposed Rule 7.37P(b)(1) would provide that an order that 
cannot meet the pricing parameters of proposed Rule 7.37P(a) may be 
routed to Away Market(s) before being matched for execution against 
contra-side orders in the NYSE Arca Book. The Exchange believes that 
this proposed rule text provides transparency that an order may be 
routed before being matched for execution, for example, to prevent 
locking or crossing or trading through a protected quotation.
     Proposed Rule 7.37P(b)(2) would provide that if an order 
with an instruction not to route would trade through or lock or cross a 
protected quotation and is not eligible for an exception to either Rule 
610 or 611 of Regulation NMS,\26\ it would cancel, re-price, or be held 
undisplayed on the NYSE Arca Book, as provided for in Rules 7.31P and 
7.44P.
---------------------------------------------------------------------------

    \26\ 17 CFR 242.610 and 17 CFR 242.611.
---------------------------------------------------------------------------

     Proposed Rule 7.37P(b)(3) would provide that orders 
eligible to route would be routed to all available Away Markets unless 
the order includes an instruction to bypass market centers that are not 
displaying protected quotations. This rule text covers the subject 
matter of current Rule 7.37(d)(2)(A), 7.37(d)(2)(B), and 7.37(d)(4), 
with no substantive differences. As with current functionality, 
proposed Rule 7.37P(b)(1) specifies that all Away Markets, as defined 
in proposed Rule 1.1(ffP), would be considered as part of the routing 
determination unless the User has opted out of routing to Away Markets 
that do not display protected quotations.
     Proposed Rule 7.37P(b)(4) would provide that Limit Orders 
that are routed to Away Market(s) may be routed to more than one price 
level, up (down) to the limit price of an order to buy (sell). This 
represents current routing functionality and means that a Limit Order 
may be routed to more than just the top of book bid or offer of an Away 
Market, provided that the order would not be routed to prices that are 
outside of the limit price of the order and consistent with Rule 611 of 
Regulation NMS,\27\ as provided for in proposed Rule 7.37P(a)(2). The 
Exchange believes that including this level of detail in the rule 
provides transparency regarding the potential for an order to be routed 
to more than one price level on an Away Market. The Exchange believes 
that routing to depth of Away Markets provides a greater opportunity 
for an order to be executed in full.
---------------------------------------------------------------------------

    \27\ 17 CFR 242.611.
---------------------------------------------------------------------------

     Proposed Rule 7.37P(b)(5) would provide that, except for 
orders routed to the primary listing market on arrival pursuant to Rule 
7.34P or designated to route to the primary listing market pursuant to 
Rule 7.31P, orders routed to Away Markets would be sent as IOC ISOs. 
This routing is based on current Rule 7.37(d)(2)(B)(i) with no 
substantive differences.
     Proposed Rule 7.37P(b)(6) would provide that after any 
order or portion thereof that has been routed would not be eligible to 
trade on the NYSE Arca Book, unless all or a portion of the order 
returns unexecuted. This routing methodology is current functionality 
and covers that same subject as current Rule 7.37(d)(2)(C) and (D), 
with no substantive differences. In contrast to Rule 7.37(d)(2)(C) and 
(D), however, the Exchange proposes that Rule 7.37P(b)(6) would focus 
on the fact that once routed, an order would not be eligible to trade 
on the Exchange, rather than stating the obvious that it would be 
subject to the routing destination's trading rules once routed. In 
addition, because, as discussed above, the working time assigned to 
orders that are routed is being proposed to be address in new Rule 
7.36P(f)(1)(A) and (B), the Exchange believes it would be duplicative 
to restate this information in new Rule 7.37P.
     Proposed Rule 7.37P(b)(7) would set forth how the Exchange 
would process requests to cancel orders that have been routed. Rule 
7.37(d)(2)(E) currently provides that requests from Users to cancel 
their orders while the order is routed away to another market center or 
market participant and remains outside the NYSE Arca Marketplace shall 
be processed, subject to the applicable trading rules of the relevant 
market center or market participant.
    The Exchange proposes to specify in new Rule 7.37P(b)(7)(A) that 
requests to cancel orders that are eligible to be matched for execution 
against orders in the NYSE Arca Book would not be processed unless and 
until all or a portion of the order returns unexecuted. New Rule 
7.37P(b)(7)(B) would specify that for orders routed to the primary 
listing market on arrival pursuant to Rule 7.34P or designated to route 
to the primary listing market pursuant to Rule 7.31P, requests to 
cancel would be routed to the primary listing market, which is current 
functionality.
    New Rule 7.37P(b)(7)(C) would provide, as currently set forth in 
Rule 7.31(x) regarding Primary Only Orders, for MOC Orders or LOC 
Orders in NYSE- or NYSE MKT-listed securities, requests to cancel or 
reduce in size that are electronically entered after the times 
specified in NYSE Rules 123C(3)(b) and NYSE MKT Rule 123C(3)(b)--
Equities and Supplementary Material .40 to those rules would be 
rejected.\28\ The Exchange proposes to include this text in proposed 
Rule 7.37P(b)(7) because it concerns how the Exchange would process 
requests to cancel orders with instructions to route on arrival. By 
including this rule text in proposed Rule 7.37P, the proposed 
processing of electronically entered requests to cancel MOC or LOC 
Orders in NYSE- or NYSE MKT-listed securities would also apply to such 
orders that do not include a Primary Only Order designation, but which, 
pursuant to Rule 7.34P, would be routed to the primary listing market 
on arrival. The Exchange believes that the proposed changes would 
provide transparency regarding how requests to cancel orders that have 
been routed would be processed in Pillar, which would not be 
substantively different from how the Exchange's current trading system 
operates.
---------------------------------------------------------------------------

    \28\ NYSE Rule 123C(3)(b) and NYSE MKT Rule 123C(3)(b)--Equities 
provide that between 3:45 p.m. and 3:58 p.m., MOC and LOC Orders may 
be cancelled or reduced in size only to correct a legitimate error, 
and NYSE Rule 123C(3)(c) and NYSE MKT Rule 123C(3)(c) provide that 
MOC and LOC Orders may not be cancelled or reduced in size at all 
after 3:58 p.m. Supplementary Material .40 to those rules provides, 
among other things, that the times specified in those rules will be 
adjusted based on the early scheduled closing time and references to 
4:00 p.m. mean the early scheduled close, 3:45 p.m. means 15 minutes 
before the early scheduled close, and 3:58 p.m. means two minutes 
before the early scheduled close.
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     Proposed Rule 7.37P(b)(8) would provide that an order 
marked ``short'' when a short sale price test restriction is in effect 
would not be routed. Instead of routing, the Exchange would reprice or 
cancel the order consistent with Rule 7.16, which will be proposed as 
Rule 7.16P in a separate rule filing for Pillar.
    The Exchange believes the specific routing methodologies for an 
order type or modifier should be included with how the order type is 
defined, which will be in Rule 7.31P. Accordingly, the Exchange does 
not believe it needs to specify in new Rule 7.37P whether an order is 
eligible to route, and if so, whether there are any specific routing

[[Page 28731]]

instructions applicable to the order and therefore will not be carrying 
over such specifics that are included in Rule 7.37.
    The remaining proposed rule text of Rule 7.37P is based on Rule 
7.37, with limited non-substantive differences:
     Proposed Rule 7.37P(c) would provide that after executing 
with eligible contra-side interest on the NYSE Arca Book and/or 
returning unexecuted after routing to Away Market(s), any unexecuted 
non-marketable portion of an order would be ranked consistent with new 
Rule 7.36P. This rule represents current functionality and is based on 
Rule 7.37(d)(3) without any substantive differences.
     Proposed Rule 7.37P(d) would set forth the Exchange's use 
of data feeds, and includes the rule text that is currently set forth 
in Commentary .01 to Rule 7.37, without any substantive differences. 
Proposed Rule 7.37P(d)(1) would not include the clause ``away market 
quotes disseminated by'' as unnecessary language, with the proposed 
rule text using the proposed defined term ``Away Markets'' as follows, 
``[t]he Exchange receives data feeds directly from broker dealers for 
purposes of routing interest to Away Markets that are not displaying 
protected quotations.''
     Proposed Rule 7.37P(e) would set forth the same rule text 
from Rule 7.37(e) regarding locking or crossing quotations in NMS 
stocks with a non-substantive difference to update a cross-reference in 
the rule to rule numbering in Rule 7.37P. The Exchange proposes an 
additional non-substantive difference to specify in Rule 7.37P(e)(3) 
that the prohibition against Locking and Crossing Quotations in 
paragraph Rule 7.37P(e)(2) would not apply in the circumstances 
specified in Rules 7.37P(e)(3)(A)-(C). Proposed Rules 7.37P(e)(3)(A)-
(C) is rule text that is identical to Rule 7.37(e)(3)(A)-(C).
     Proposed Rule 7.37P(f) would set forth the exceptions to 
the Order Protection Rule \29\ and would enumerate the self-help 
exception in Rule 7.37P(f)(1), which is based on Rule 7.37(f) regarding 
Self-Help Exceptions, with two proposed modifications. The Exchange 
would not include the second sentence of Rule 7.37(f)(1), which 
provides that the Exchange will disregard another Trading Center's bid 
and offer if the other Trading Center has repeatedly failed to respond 
within one second to an incoming IOC order after adjusting for order 
transmission time, in new Rule 7.37P(f)(1). The self-help exception set 
forth in Rule 611(b)(1) of Regulation NMS \30\ and related Securities 
and Exchange Commission staff guidance regarding this exception \31\ 
does not require trading centers to use the self-help exception if a 
destination trading trading center fails to respond within one second 
to an incoming IOC order, but state that such a failure would justify 
use of the exception. Rather, a trading center is free to adopt 
reasonable policies and procedures consistent with the flexible 
purposes of the self-help exception. Because the Exchange does not use 
the method described in the second sentence of current Rule 7.37(f)(1) 
to determine whether to declare self-help, the Exchange proposes not to 
include it in new Rule 7.37P(f)(1). Second, Rule 7.37(f)(1)(B) provides 
that the Exchange follows ``published NYSE Arca policies and procedures 
for electing the self-help exception.'' Because the Exchange publishes 
those policies and procedures internally only, to reduce investor 
confusion, the Exchange proposes to modify the text in proposed Rule 
7.37P(f)(1)(B) to provide instead that the Exchange would follow 
``established NYSE Arca policies and procedures for electing the self-
help exception.''
---------------------------------------------------------------------------

    \29\ 17 CFR 242.611(b).
    \30\ 17 CFR 611(b)(1).
    \31\ See Question 4.07, ``Responses to Frequently Asked 
Questions Concerning Rule 611 and Rule 610 of Regulation NMS,'' 
available at https://www.sec.gov/divisions/marketreg/nmsfaq610-11.htm (``Beyond this basic parameter of repeated failure to turn 
around an IOC order within one second, trading centers are free to 
adopt reasonable policies and procedures that are consistent with 
the flexible purposes of the self-help exception.'').
---------------------------------------------------------------------------

    Proposed Rules 7.37P(f)(2)-(4) are based on the rule text from Rule 
7.37(g) regarding Additional Exceptions to the Order Protection Rule, 
with non-substantive differences to reflect different rule numbering 
and update the rule text to reflect current operations. First, the 
Exchange proposes not to include the first and third sentences of Rule 
7.37(g)(1) in proposed Rule 7.37P(f)(2)(A) relating to the Intermarket 
Sweep Order Exception because when executing or displaying ISOs that it 
receives from ETP Holders, it is the responsibility of the entering 
broker dealer and not the Exchange to simultaneously route ISOs. 
Therefore, the current rule text does not represent how the Exchange 
operates, nor does it reflect the requirements of Regulation NMS. The 
Exchange proposes additional non-substantive differences to the rule 
text relating to this exception to update references, for example, to 
refer to NYSE Arca's best bid or best offer rather than its own 
protected quotation and remove reference to the ``NYSE Arca System.''
    Second, the Exchange proposes not to include the second sentence of 
Rule 7.37(g)(3) relating to how the Exchange would conduct a single-
price reopening in proposed Rule 7.37P(f)(3). To reduce investor 
confusion and promote transparency in its rules, the Exchange believes 
that its rule governing auctions should set forth how the Exchange 
conducts a single-price auction to reopen a stock following a trading 
halt. Third, the Exchange proposes not to include current Rule 
7.37(g)(5) text regarding Stopped Orders because the Exchange does not 
currently, and will not in Pillar, support Stopped Orders on the 
Exchange. Finally, the Exchange proposes not to include current Rule 
7.37(g)(6) text regarding transactions other than ``regular-way'' 
contracts because in Pillar, the Exchange would not execute any orders 
on terms other than standardized terms and conditions, i.e., ``regular 
way'' contracts.
    Proposed Rule 7.37P(f)(5) regarding the Contingent Order Exemption 
from the Order Protection Rule is based on rule text from Rule 7.37(h) 
regarding Exemptions with different rule numbering and one substantive 
difference. Rule 7.37(g)(2) specifies the requirements to meet the 
qualified contingent trade exemption to Rule 611(a) of Regulation NMS 
\32\ and are based on the requirements specified in the Commission's 
Order granting an exemption for qualified contingent trades.\33\ Rule 
7.37(f)(2)(G) currently specifies the original requirement that the 
exempted transaction must be part of a contingent trade that involves 
at least 10,000 shares or has a market value of at least $200,000. The 
Commission later modified the exemption for qualified contingent trades 
to remove that size condition.\34\ The Exchange therefore proposes not 
to include in its proposed Rule 7.37P(f)(2)(D) the size requirement.
---------------------------------------------------------------------------

    \32\ 17 CFR 242.611(a).
    \33\ See Securities Exchange Act Release No. 54389 (August 31, 
2006), 71 FR 52829 (September 7, 2006) (Order Granting an Exemption 
for Qualified Contingent Trades from Rule 611(a) of Regulation NMS 
under the Securities Exchange Act of 1934).
    \34\ See Securities Exchange Act Release No. 57620 (April 4, 
2008), 73 FR 19271 (April 9, 2008) (Order Modifying the Exemption 
for Qualified Contingent Trades from Rule 611(a) of Regulation NMS 
under the Securities Exchange Act of 1934).
---------------------------------------------------------------------------

* * * * *
    As discussed above, 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 on the book

[[Page 28732]]

pending the full migration of Pillar will reduce confusion because it 
will ensure that the rules governing trading on a trading platform will 
continue to be available 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''),\35\ in general, and 
furthers the objectives of Section 6(b)(5),\36\ 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. The Exchange 
believes that the proposed rules to support Pillar would remove 
impediments to and perfect the mechanism of a free and open market 
because the proposed rule set would promote transparency in Exchange 
rules by using consistent terminology 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 is conducted on the Exchange. 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.
---------------------------------------------------------------------------

    \35\ 15 U.S.C. 78f(b).
    \36\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed restructuring in new Rules 
7.34P, 7.36P, and 7.37P would remove impediments to and perfect the 
mechanism of a free and open market by assuring consistency of terms 
used in the Exchange's rulebook. The proposed revisions to the 
Exchange's equity trading rules to reflect terminology associated with 
Pillar would remove impediments to and perfect a free and open market 
because the proposed changes are designed to simplify the structure of 
the Exchanges rules and permit the use of consistent terminology 
throughout numerous rules, without changing the underlying 
functionality. For example, the Exchange believes the proposed 
definitions set forth in Rule 7.36P, i.e., display price, limit price, 
working price, and working time, promote transparency in Exchange rules 
and make them easier to understand because these proposed definitions 
will serve as the foundation for additional rule changes to support 
Pillar.
    The Exchange further believes that moving specified rule text that 
relates to specific order types that is set forth in Rules 7.34, 7.36 
and 7.37 to proposed Rule 7.31P (which will be the subject of a 
separate filing), and therefore not include such detail in proposed 
Rules 7.34P, 7.36P and 7.37P, would make Exchange rules easier to 
navigate because information regarding how a specific order type would 
operate would be in a single location in the Exchange's rule book.
    With respect to proposed Rule 7.34P, the Exchange believes that the 
proposed changes to functionality would remove impediments to and 
perfect the mechanism of a fair and orderly market. First, the Exchange 
believes that because an auction that opens a trading session should 
occur within that trading session, it would remove impediments to and 
perfect the mechanism of a fair and orderly market for the Core Open 
Auction to occur during the Core Trading Session instead of the Early 
Trading Session. Second, the Exchange believes that the proposed change 
to route to the primary listing market Market Orders and Auction-Only 
Orders in symbols that are not eligible for an execution on the 
Exchange would remove impediments to and perfect the mechanism of a 
free and open market by ensuring that such orders reach a destination 
where they may be eligible to obtain an execution or participate in an 
auction. This is current functionality, but it is only available for 
orders that have been designated as ``Primary Only.'' Expanding this 
functionality to orders that do not include that designation would also 
protect investors and the public interest by enabling such interest to 
reach a destination where it is more likely to obtain an execution 
opportunity or participate in an auction. Finally, the Exchange 
believes that making Tracking Orders available during the Early and 
Late Trading Sessions would remove impediments to and perfect the 
mechanism of a free and open market by providing additional execution 
opportunities on the Exchange through the availability of additional 
passive liquidity.
    With respect to proposed Rules 7.36P and 7.37P, as discussed above, 
the Exchange is not proposing any functional changes to how it ranks, 
displays, executes, or routes orders. The Exchange believes, however, 
that the proposed rule text promotes transparency through the use of 
consistent terminology that will serve as the foundation for additional 
Pillar-related rule proposals. The Exchange also believes that adding 
more detail regarding current functionality in new Rules 7.34P, 7.36P, 
and &.37P, as described above, would promote transparency by providing 
notice of when orders would be accepted, routed, rejected, cancelled, 
or be assigned a working time by the Exchange.

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, with this rule filing, the Exchange is not proposing to 
change its core functionality regarding its price-time priority model, 
and in particular, how it would rank, display, execute or route orders 
in Pillar. Rather, the Exchange believes that the proposed rule change 
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.

[[Page 28733]]

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-2015-38 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-2015-38. 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-2015-38, and should be 
submitted on or before June 9, 2015.
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    \37\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\37\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12028 Filed 5-18-15; 8:45 am]
 BILLING CODE 8011-01-P