[Federal Register Volume 80, Number 69 (Friday, April 10, 2015)]
[Notices]
[Pages 19383-19385]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-08197]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-74649; File No. SR-NYSE-2015-14]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Amending Rule 1000 To Reflect That Exchange Systems Will Reject
Incoming Orders of Over 1,000,000 Shares That Are Marketable Upon
Arrival
April 6, 2015.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on March 23, 2015, New York Stock Exchange LLC (``NYSE'' 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 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 1000 to reflect that Exchange
systems will reject incoming orders of over 1,000,000 shares that are
marketable upon arrival. 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 1000 (Automatic Executions) to
reflect that Exchange systems will reject incoming orders of over
1,000,000 shares that are marketable upon arrival against interest in
Exchange systems.
Currently, Exchange systems accept orders up to a maximum order
size of 25,000,000 shares.\4\ Rule 1000 provides that market and limit
orders of up to 1,000,000 shares are eligible to initiate or
participate in automatic executions on the Exchange. However, because
an order of over 1,000,000 shares in size is ineligible for automatic
execution, if such an order is marketable on arrival, the Exchange
suspends automatic executions in that security and it is auto-quoted
with a ``slow'' quote
[[Page 19384]]
condition. When a symbol is in a ``slow'' quote mode, its quote is not
protected under Regulation NMS.\5\ Orders for more than 1,000,000
shares that are not marketable upon arrival do not suspend automatic
executions or cause a slow quote condition. Rather, non-marketable
orders of over 1,000,000 shares in size rest on the Exchange's limit
order book and are available as liquidity to interact with incoming
contra-side interest.
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\4\ See Rule 1000.
\5\ Rule 611 of Regulation NMS requires that trading centers
have policies and procedures reasonably designed to prevent trade
throughs on that trading center of protected quotations in NMS
Stocks. 17 CFR 242.611(a). Importantly, to be a protected quotation,
it must be an automated quotation that is the best bid or offer of
an exchange. 17 CFR 242.603(b)(57)(iii).
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The Exchange proposes to amend Rule 1000 to provide that incoming
orders of over 1,000,000 shares that are marketable upon arrival would
be rejected. The Exchange believes it is appropriate to reject
marketable orders ineligible for automatic execution in order to reduce
the potential that the Exchange would suspend automatic executions and
disseminate a ``slow'' quote that permits other market centers to trade
through the Exchange's quotations in that security. In addition, the
Exchange notes that an order of such size that is marketable upon
arrival may be an order entry error, and therefore rejecting the order
puts the submitter of the order on notice of the large size of the
order.
Because of the technology changes associated with the proposed rule
change, the Exchange proposes to announce the implementation date via
Trader Update.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\7\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
promote just and equitable principles of trade, remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and protect investors and the public interest. In
particular, the Exchange believes that rejecting large orders
ineligible for automatic execution rather than triggering a suspension
of automatic executions in the relevant security would remove
impediments to and perfect the mechanism of a free and open market and
a national market system by reducing the potential that the Exchange
would suspend automatic executions and disseminate a ``slow'' quote
that permits other market centers to trade through the Exchange's
quotations in the relevant security. The Exchange also believes that
rejecting large orders ineligible for automatic execution would assist
with the maintenance of fair and orderly markets by helping to mitigate
the risk that a large order that is marketable upon arrival may be an
order entry error, and therefore rejecting the order puts the submitter
of the order on notice of the large size of the order. For the same
reasons, the proposal is also designed to protect investors as well as
the public interest.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
not intended to address competitive issues but rather to prevent
unnecessary suspension of automatic executions on the Exchange's
marketplace and reduce the likelihood that large, marketable orders may
be an order entry error.
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.\10\
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 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.\13\
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\13\ 15 U.S.C. 78s(b)(3)(C).
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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-2015-14 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2015-14. 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
[[Page 19385]]
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-NYSE-2015-14
and should be submitted on or before May 1, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(59).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-08197 Filed 4-9-15; 8:45 am]
BILLING CODE 8011-01-P