[Federal Register Volume 77, Number 76 (Thursday, April 19, 2012)]
[Notices]
[Pages 23536-23538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9410]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66811; File No. SR-NYSEArca-2012-29]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Equities Rule 7.31(t) To Provide for Limit-on-Open Orders and Market-
on-Open Orders

April 13, 2012.
    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 April 3, 2012, 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 and II below, which 
Items have been prepared by the Exchange. The Exchange has designated 
the proposed rule change as constituting a rule change under Rule 19b-
4(f)(6) under the Act,\3\ which renders the proposal effective upon 
filing with the Commission. 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.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Arca Equities Rule 7.31(t) to 
provide for Limit-on-Open Orders (``LOO Orders'') and Market-on-Open 
Orders (``MOO Orders''). The text of the proposed rule change is 
available at the Exchange, www.nyse.com, and 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
    The Exchange proposes to amend NYSE Arca Equities Rule 7.31(t) to 
provide for LOO and MOO Orders.
    NYSE Arca Equities Rule 7.31(t) currently provides for Auction-Only 
Orders, which are limit or market orders that are only executed within 
an auction.\4\ As proposed, LOO and MOO Orders would be defined under 
NYSE Arca Equities Rule 7.31(t)(1) and (2), respectively, as specific 
types of Auction-Only Orders. More specifically, a LOO Order would be 
defined as an Auction-Only Limit Order that is to be executed only 
during the Market Order Auction, which is the auction that opens the 
Core Trading Session on the Exchange for Exchange-listed securities.\5\ 
Any portion of a LOO Order that remains unfilled after completion of 
the Market Order Auction would be cancelled. A MOO Order would be 
defined as an Auction-Only Market Order that is to be executed only 
during the Market Order Auction. As with LOO Orders, any portion of a 
MOO Order that remains unfilled after completion of the Market Order 
Auction would be cancelled. MOO and LOO orders would not participate in 
the Opening Auction, as defined in NYSE Arca Equities Rule 7.35(b), the 
Closing Auction, as defined in NYSE Arca Equities Rule 7.35(e), or

[[Page 23537]]

Trading Halt Auctions, as defined in NYSE Arca Equities Rule 7.35(f).
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    \4\ An Auction-Only Order is executable during the next auction 
following entry of the order. If the order is not executed in the 
auction, the balance is cancelled. An Auction-Only Order is only 
available for auctions that take place on the Exchange. Auction-Only 
Orders are not routed to other exchanges and are cancelled where the 
next auction after entry of the order is cancelled or does not 
occur. An Auction-Only Order may not be designated as good until 
cancelled.
    \5\ The Market Order Auction is described in NYSE Arca Equities 
Rule 7.35(c).
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    The Exchange also proposes the following technical amendments to 
NYSE Arca Equities Rule 7.35(c):
     First, the Exchange proposes to remove certain text from 
NYSE Arca Equities Rule 7.35(c) that cross-references New York Stock 
Exchange (``NYSE'') Rule 123D and NYSE-listed securities subject to a 
sub-penny trading condition, which was previously described within NYSE 
Rule 123D(3). NYSE has removed this text from NYSE Rule 123D and 
eliminated the sub-penny trading condition in its entirety.\6\ The 
proposed removal of the cross-reference would therefore remove obsolete 
text from NYSE Arca Equities Rule 7.35(c).
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    \6\ See Securities Exchange Act Release No. 58936 (November 13, 
2008), 73 FR 69704 (November 19, 2008) (SR-NYSE-2008-117).
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     Second, the Exchange proposes to specify that, for 
purposes of NYSE Arca Equities Rule 7.35(c), and unless stated 
otherwise, references to Market Orders include Auction-Only Market 
Orders. This proposed change would add greater specificity regarding 
the handling of Auction-Only Market Orders, including MOO Orders, 
during the Market Order Auction.
     Third, the Exchange proposes to delete duplicative text 
from NYSE Arca Equities Rule 7.35(c) describing that, after the first 
opening print on the primary market, all Market Orders and Limit Orders 
are processed pursuant to NYSE Arca Equities Rule 7.37.
     Finally, the Exchange proposes to specify in NYSE Arca 
Equities Rule 7.35(c)(3)(A)(3) that only Market Orders that are 
eligible for both the Market Order Auction and the Core Trading 
Session, but are not executed in the Market Order Auction, become 
eligible for execution in the Core Trading Session immediately upon 
conclusion of the Market Order Auction.\7\ This proposed change would 
add greater specificity regarding the handling of certain Market 
Orders, like MOO Orders, that are not eligible for the Core Trading 
Session.
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    \7\ The Exchange also proposes to remove duplicative text from 
NYSE Arca Equities Rule 7.35(c)(3)(A)(4).
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    Because of the related technology changes that this proposed rule 
change would require, the Exchange proposes to announce the date on 
which LOO and MOO Orders would be available via Trader Update.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\8\ in general, and 
furthers the objectives of Section 6(b)(5),\9\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, to remove impediments to and perfect the 
mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest. The proposed 
rule change is also not designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    As proposed, LOO and MOO Orders would be a subset of the existing 
Auction-Only Orders that are currently available on the Exchange. In 
this regard, the availability of LOO and MOO Orders would enhance the 
tools available to ETP Holders when entering their trading interest by 
providing for an Auction-Only Order that could only be executed during 
the Market Order Auction. Furthermore, the proposed addition of LOO and 
MOO Orders on the Exchange could contribute to the quality of the 
Exchange's opening by increasing the amount of liquidity that ETP 
Holders are willing to enter to participate in the Market Order 
Auction. For these reasons, the Exchange believes that its proposal to 
provide for LOO and MOO Orders would remove impediments to and perfect 
the mechanism of a free and open market and a national market system 
and, in general, protect investors and the public interest. The 
Exchange notes that order types similar to LOO and MOO Orders are 
available on other exchanges.\10\ Accordingly, making these order types 
available for ETP Holders to utilize would promote just and equitable 
principles of trade and foster cooperation and coordination with 
persons engaged in facilitating transactions in securities. 
Furthermore, LOO and MOO Orders would be available for all ETP Holders 
to utilize on the Exchange. In this regard, the Exchange believes that 
the proposed rule change is not designed to permit unfair 
discrimination. The proposed technical changes would also benefit ETP 
Holders and investors by adding greater specificity and precision to 
the Exchange's Rules.
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    \10\ See NASDAQ Stock Market LLC (``NASDAQ'') Rule 4752(a)(3) 
and (4), which define ``Limit On Open Order'' and ``Market On Open 
Order,'' respectively. See also BATS Exchange, Inc. (``BATS'') Rule 
11.23(a)(14) and (16), which define ``Limit-On-Open'' orders and 
``Market-On-Open'' orders, respectively.
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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.

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

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

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

    Because the proposed rule change does not (i) significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 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, provided that the self-regulatory organization 
has given the Commission written notice of its intent to file 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 proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) 
thereunder.\12\ 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
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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

[[Page 23538]]

     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2012-29 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2012-29. 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-NYSEArca-2012-29 and 
should be submitted on or before May 10, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-9410 Filed 4-18-12; 8:45 am]
BILLING CODE 8011-01-P