[Federal Register Volume 79, Number 130 (Tuesday, July 8, 2014)]
[Notices]
[Pages 38639-38641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-15813]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72501; File No. SR-NYSE-2014-31]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Rule 86 To Extend the Hours for the Core Bond Trading Session 
for NYSE Bonds \SM\ and Amending Rule 88 To Make Corresponding Changes 
Related to Bonds Liquidity Providers

July 1, 2014.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that June 25, 2014, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') 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\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 86 to extend the hours for the 
Core Bond Trading Session for NYSE Bonds \SM\ and to amend Rule 88 to 
make corresponding changes related to Bonds Liquidity Providers 
(``BLPs''). 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 86 to extend the hours for the 
Core Bond Trading Session for NYSE Bonds and to amend Rule 88 to make 
corresponding changes related to BLPs.\4\
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    \4\ Terms not defined herein shall have the meaning prescribed 
under Rule 86 or Rule 88, as applicable.
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    NYSE Bonds is the Exchange's electronic system for receiving, 
processing, executing, and reporting bids, offers, and executions in 
bonds. Rule 86 prescribes how bonds are traded through the NYSE Bonds 
trading platform, including the receipt, execution, and reporting of 
bond transactions. Rule 88 provides for BLPs, which are member 
organizations that electronically enter orders from off the Floor of 
the Exchange into NYSE Bonds.
    NYSE Bonds has three Bond Trading Sessions: (1) the Opening Bond 
Trading Session, (2) the Core Bond Trading Session, and (3) the Late 
Bond Trading Session. The Opening Bond Trading Session currently 
commences at 4:00 a.m. Eastern Time (``ET'') and concludes at 9:30 a.m. 
ET. The Core Bond Trading Session currently commences at 9:30 a.m. ET 
and concludes at 4:00 p.m. ET. The Late Bond Trading Session currently 
commences at 4:00 p.m. ET and concludes at 8:00 p.m. ET.
    The Exchange proposes to extend the hours of the Core Bond Trading 
Session so that it would commence at 8:00 a.m. ET and end at 5:00 p.m. 
ET, adding a total of 2.5 hours to the Core Bond Trading Session and 
better aligning its hours with those of other bond trading venues. The 
Exchange proposes to amend the references to the various time periods 
throughout Rule 86 to effect this change, including, for example, that 
the Core Bond Auction would commence at 8:00 a.m. ET instead of the 
current 9:30 a.m. ET. The Exchange would announce the date on which the 
expanded Core Bond Trading Session hours would take effect via Trader 
Update. The Exchange notes, for example, that the proposed extended 
Core Bond Trading Session would also result in the ability for an 
``NYSE Bonds Good `Til Cancelled

[[Page 38640]]

Order'' or an ``NYSE Bonds Day Order'' to remain in effect for a longer 
period of time.
    Rule 88(a) and (f) specify BLP bid and offer requirements to 
qualify for a financial incentive for transactions on NYSE Bonds, as 
set forth in Rule 88(b) and in the Exchange's Price List. The 
requirements currently refer to ``trading day'' or ``normal trading 
day'' when describing the time period during which they apply and are 
calculated, which, in practice, refers to the Core Bond Trading 
Session. The Exchange proposes to replace these references to ``trading 
day'' and ``normal trading day'' with ``Core Bond Trading Session.'' 
The Exchange believes that this proposed change would encourage BLPs to 
be active for greater periods of time each day, which would lead to 
increased liquidity throughout the day and contribute to the quality of 
NYSE Bonds for all Users. The Exchange notes that BLPs may already be 
active in bonds on other marketplaces on which they trade during the 
extended period of time and because BLPs are also currently active 
after the Core Bond Trading Session at levels that would contribute to 
satisfying the applicable requirements, BLPs would not have any 
problems in complying with the proposed change. Moreover, while the 
time period during with the requirements would apply would increase, so 
would the ability for BLPs to earn financial incentives for 
transactions on NYSE Bonds, as set forth in Rule 88(b) and in the 
Exchange's Price List, which are only available during the Core Bond 
Trading Session.
    The proposed change is not otherwise intended to address any other 
issues, and the Exchange is not aware of any problems Users, including 
BLPs, would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\6\ 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 regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to, and 
perfect the mechanisms of, a free and open market and a national market 
system and, in general, to protect investors and the public interest 
and because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed change would foster 
cooperation and coordination with persons engaged in bond transactions 
by more closely aligning the hours of the Core Bond Trading Session 
with the hours of other marketplaces on which bonds trade (e.g., 
various alternative trading systems). The proposed change would also 
remove impediments to, and perfect the mechanisms of, a free and open 
market and a national market system by permitting Users to be active in 
the Core Bond Trading Session for 2.5 additional hours each day. 
Expanding the time period during which the Core Bond Trading Session is 
active would also increase the time period during which BLP 
requirements would apply, which may also increase the amount of 
liquidity on NYSE Bonds, thereby contributing to protecting investors 
and the public interest. The Exchange further believes that expanding 
the time period during which BLP requirements would apply would remove 
impediments to and perfect the mechanism of a free and open market and 
national market system because it would encourage BLPs to be active for 
greater periods of time each day, which would lead to increased 
liquidity throughout the day and contribute to the quality of NYSE 
Bonds for all Users. The Exchange notes that because BLPs may already 
be active in bonds on other marketplaces on which they trade during the 
extended period of time and because BLPs are also currently active 
after the Core Bond Trading Session at levels that would contribute to 
satisfying the applicable requirements, BLPs would not have any 
problems in complying with the proposed change. Moreover, while the 
time period during with the requirements would apply would increase, so 
would the ability for BLPs to earn financial incentives for 
transactions on NYSE Bonds, as set forth in Rule 88(b) and in the 
Exchange's Price List, which are only available during the Core Bond 
Trading Session. Likewise, replacing references within Rule 88(a) and 
(f) to ``trading day'' and ``normal trading day'' with ``Core Bond 
Trading Session'' would foster cooperation and coordination with 
persons engaged in bond transactions by more precisely specifying the 
period during which BLP requirements would apply and be calculated.
    Finally, the Exchange believes that it is subject to significant 
competitive forces, as described below in the Exchange's statement 
regarding the burden on competition.
    For these reasons, the Exchange believes that the proposal is 
consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\7\ the Exchange 
believes that the proposed rule change would not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Instead, the Exchange believes that the proposed 
change would contribute to competition because it could lead to 
additional bond transactions on NYSE Bonds, a public market, which 
would contribute to greater transparency regarding such transactions. 
The Exchange also believes that the proposed change would place NYSE 
Bonds in a more competitive position compared to other marketplaces for 
bond transactions with respect to the time period during which bonds 
are traded.
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    \7\ 15 U.S.C. 78f(b)(8).
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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 \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
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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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\11\ the Commission 
may designate a shorter time if such

[[Page 38641]]

action is consistent with the protection of investors and the public 
interest.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \12\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \12\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2014-31 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-NYSE-2014-31. 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 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-NYSE-2014-31, and should be 
submitted on or before July 29, 2014.

    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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2014-15813 Filed 7-7-14; 8:45 am]
BILLING CODE 8011-01-P