[Federal Register Volume 78, Number 92 (Monday, May 13, 2013)]
[Notices]
[Pages 28008-28010]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11224]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69527; File No. SR-NYSEArca-2013-45]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Equities Rule 7.11(a)(6)(C) To Add Inside Limit Orders as Eligible for 
Repricing Instructions

May 7, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on April 23, 2013, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Arca Equities Rule 
7.11(a)(6)(C) to add Inside Limit Orders as eligible for repricing 
instructions. The text of the proposed rule change is available on the 
Exchange's Web site at www.nyse.com, at the principal office of the 
Exchange, and at the Commission's Public Reference Room.

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

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

[[Page 28009]]

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

1. Purpose
    The Exchange is proposing to amend NYSE Arca Equities Rule 7.11 
(``Rule 7.11''), which implements the Limit Up--Limit Down Plan,\3\ the 
first phase of which became effective on April 8, 2013, to add Inside 
Limit Orders as eligible for repricing. Under Rule 7.11, buy or sell 
interest that is priced or could be executed above or below the Price 
Bands, as that term is used in the Rule, would be canceled, with one 
exception. That exception, set out in sub-paragraph (a)(6) of the Rule, 
permits an ETP Holder to instruct the Exchange to reprice eligible 
limit orders that are priced above or below the Price Bands, rather 
than cancel such orders. Eligible limit orders would be repriced to the 
Price Bands.
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    \3\ As defined in Rule 7.11, ``Plan'' means the Plan to Address 
Extraordinary Market Volatility Submitted to the Securities and 
Exchange Commission Pursuant to Rule 608 of Regulation NMS under the 
Securities Exchange Act of 1934, Exhibit A to Securities Exchange 
Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012), as 
it may be amended from time to time.
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    The Exchange proposes to amend Rule 7.11(a)(6)(C) to add another 
limit order type that is eligible for repricing instructions. 
Specifically, the Exchange proposes to add Inside Limit Orders, which 
are defined in Rule 7.31(d),\4\ to the list of orders eligible for 
repricing instructions. The Exchange proposes to announce by Trader 
Update when the functionality associated with repricing instructions 
for Inside Limit Orders will be made available and anticipates that 
such instructions will be made available to ETP Holders before the roll 
out of the implementation of Phase I of the Plan has been completed.
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    \4\ An Inside Limit Order is a Limit Order, which, if routed 
away pursuant to NYSE Arca Equities Rule 7.37(d), will be routed to 
the market participant with the best displayed price. Any unfilled 
portion of the order will not be routed to the next best price level 
until all quotes at the current best bid or offer are exhausted. 
Once each current best bid or offer is exhausted, Exchange systems 
reevaluate the next best displayed price and route to that single 
price point and continue such assessment at each new best displayed 
price level until the order is filled or no longer marketable. If 
the order is no longer marketable it will be ranked in the NYSE Arca 
Book pursuant to Rule 7.36.
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\5\ in general, and 
furthers the objectives of Section 6(b)(5),\6\ in particular, in that 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system. 
The Exchange believes that adding Inside Limit Orders to the list of 
orders eligible for repricing instructions removes impediments to and 
perfects the mechanism of a free and open market because it provides 
greater choice to ETP Holders of how to instruct the Exchange to handle 
their orders under the Plan.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that 
the proposed amendment will reduce burdens on competition by giving ETP 
Holders greater flexibility to add repricing instructions for 
additional limit orders, specifically, Inside Limit Orders.

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

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

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\10\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because such waiver 
would allow the Exchange immediately to provide that Inside Limit 
Orders will be treated similar to other limit orders eligible for 
repricing instructions under the recently implemented Limit Up--Limit 
Down Plan. Accordingly, the Commission hereby grants the Exchange's 
request and designates the proposal operative upon filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2013-45 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.


[[Page 28010]]


All submissions should refer to File Number SR-NYSEArca-2013-45. 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 such 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 publicly available. All 
submissions should refer to File Number SR-NYSEArca-2013-45 and should 
be submitted on or before June 3, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11224 Filed 5-10-13; 8:45 am]
BILLING CODE 8011-01-P