[Federal Register Volume 81, Number 17 (Wednesday, January 27, 2016)]
[Notices]
[Pages 4689-4691]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-01667]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76968; File No. SR-NYSEArca-2016-10]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Establishing the 
NYSE Arca Order Imbalances Proprietary Market Data Product

January 22, 2016.
    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 on January 13, 2016, 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 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 establish the NYSE Arca Order Imbalances 
proprietary market data product. 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
    The Exchange proposes to establish the NYSE Arca Order Imbalances 
datafeed as a separate, stand-alone market data product. The NYSE Arca 
Order Imbalances product would be a real-time datafeed of the 
information that the Exchange provides in advance of an auction.
    The Exchange is establishing the NYSE Arca Order Imbalances product 
in connection with the implementation of Pillar, the Exchange's 
proposed new technology trading platform.\4\ Pillar is the 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 would be the first trading

[[Page 4690]]

system to migrate to Pillar. Rule 7.35P(a)(4)(C) provides that the 
Exchange will disseminate Auction Imbalance Information via a 
proprietary data feed during the times specified in the rule, and 
through this filing, the Exchange proposes to establish the NYSE Arca 
Order Imbalances feed as the proprietary data feed to which Rule 
7.35P(a)(4)(C) refers.
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    \4\ See Securities Exchange Act Release Nos. 74951 (May 13, 
2015), 80 FR 28721 (May 19, 2015) (Notice) and 75494 (July 20, 
2015), 80 FR 44170 (July 24, 2015) (Order) (SR-NYSEArca-2015-38) 
(``Pillar I Filing''); 75497 (July 21, 2015), 80 FR 45022 (July 28, 
2015) (Notice) and 76267 (Oct. 26, 2015), 80 FR 66951 (Oct. 30, 
2015) (Order) (SR-NYSEArca-2015-56)(``Pillar II Filing''); 75467 
(July 16, 2015), 80 FR 43515 (July 22, 2015) (Notice) and 76198 
(Oct. 20, 2015), 80 FR 65274 (Oct. 26, 2015) (Order) (SR-NYSEArca-
2015-58) (``Pillar III Filing''); and 76085 (Oct. 6, 2015), 80 FR 
61513 (Oct. 13, 2015) (Notice) and 76869 (Jan. 11, 2016) (Order) 
(SR-NYSEArca-2015-86) (``Pillar Auction Filing'').
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    Rule 7.35P(a)(4) defines Auction Imbalance Information as the 
information disseminated by the Exchange for an auction. As set forth 
in Rule 7.35P, Auction Imbalance information includes, if applicable, 
the Total Imbalance, Market Imbalance, Indicative Match Price and 
Matched Volume, each as defined in Rule 7.35P(a). The Auction Imbalance 
Information would be disseminated on a time frame specified in Rule 
7.35P. The NYSE Arca Order Imbalances market data product would provide 
Auction Imbalance Information with respect to symbols migrated to the 
Pillar platform.
    NYSE Arca order imbalance information, as defined in Rule 7.35, is 
currently available through the NYSE ArcaBook and NYSE Arca Integrated 
proprietary market data products and would continue to be disseminated 
on these data feeds when symbols migrate to Pillar.\5\ When a symbol 
migrates to Pillar, the NYSE Arca order imbalance information available 
through NYSE ArcaBook and NYSE Arca Integrated proprietary market data 
products would be based on Rule 7.35P.
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    \5\ See Pillar Auction Filing Notice, footnotes 22 and 23. See 
also Securities Exchange Act Release Nos. 59039 (Dec. 2, 2008), 73 
FR 74770 (Dec. 9, 2008) (NYSE ArcaBook); and 65669 (Nov. 2, 2011), 
76 FR 69311 (Nov. 8, 2011) (NYSE Arca Integrated Data Feed).
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    The Exchange proposes to offer the NYSE Arca Order Imbalances 
product through networks in the Exchange's Mahwah, New Jersey data 
center that are available to users of the Exchange's co-location 
services. The Exchange also would offer the NYSE Arca Order Imbalances 
product through the Exchange's Secure Financial Transaction 
Infrastructure (SFTI) network, through which all other users and member 
organizations access the Exchange's trading and execution systems and 
other proprietary market data products.
    The Exchange will file a separate rule filing to establish the fees 
for the NYSE Arca Order Imbalances product. As noted above, the 
Exchange is establishing the NYSE Arca Order Imbalances product in 
conjunction with the implementation of Pillar, the Exchange's proposed 
new technology trading platform,\6\ and the Exchange will announce the 
date that the product will be available through an NYSE Market Data 
Notice.
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    \6\ See note 4, supra.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) \7\ of the Act, in general, and furthers the 
objectives of section 6(b)(5) \8\ of the Act, 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, 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, and it is not 
designed to permit unfair discrimination among customers, brokers, or 
dealers. This proposal is in keeping with those principles in that it 
promotes increased transparency through the dissemination of the NYSE 
Arca Order Imbalances market data product to those interested in 
receiving it.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes this proposal is consistent with section 
6(b)(5) of the Act because it protects investors and the public 
interest and promotes just and equitable principles of trade by 
providing investors with new options for receiving market data as 
requested by market data vendors and purchasers. The proposed rule 
change would benefit investors by facilitating their prompt access to 
the real-time information contained in the NYSE Arca Order Imbalances 
market data product.
    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations (``SROs'') and broker dealers increased authority and 
flexibility to offer new and unique market data to consumers of such 
data. It was believed that this authority would expand the amount of 
data available to users and consumers of such data and also spur 
innovation and competition for the provision of market data. The 
Exchange believes that the NYSE Arca Order Imbalances market data 
product is precisely the sort of market data product that the 
Commission envisioned when it adopted Regulation NMS. The Commission 
concluded that Regulation NMS would itself further the Act's goals of 
facilitating efficiency and competition:

    Efficiency is promoted when broker-dealers who do not need the 
data beyond the prices, sizes, market center identifications of the 
NBBO and consolidated last sale information are not required to 
receive (and pay for) such data. The Commission also believes that 
efficiency is promoted when broker-dealers may choose to receive 
(and pay for) additional market data based on their own internal 
analysis of the need for such data.\9\
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    \9\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    The Exchange further notes that the existence of alternatives to 
the Exchange's product, including order imbalances products offered by 
the Exchange's affiliates, NYSE and NYSE MKT,\10\ and by the Nasdaq 
Stock Market (``NASDAQ''),\11\ as well as real-time consolidated data, 
free delayed consolidated data, and proprietary data from other 
sources, ensures that the Exchange is not unreasonably discriminatory 
because vendors and subscribers can elect these alternatives as their 
individual business cases warrant. This proposed new data feed provides 
investors with new options for receiving market data, which was a 
primary goal of the market data amendments adopted by Regulation 
NMS.\12\
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    \10\ See Securities Act Release Nos. 59543 (March 9, 2009), 74 
FR 11159 (March 16, 2009) (SR-NYSE-2008-132) (NYSE Order Imbalances) 
and 59743 (April 9, 2009), 74 FR 17699 (April 16, 2009) (SR-
NYSEAmex-2009-11)(NYSE Amex Order Imbalances, n/k/a NYSE MKT Order 
Imbalances).
    \11\ See Nasdaq TotalView-ITCH, http://www.nasdaqtrader.com/Trader.aspx?id=Totalview2 (last visited November 25, 2015)(displays 
the full order book depth for Nasdaq market participants and also 
disseminates the Net Order Imbalance Indicator (NOII) for the Nasdaq 
Opening and Closing Crosses and Nasdaq IPO/Halt Cross).
    \12\ See Regulation NMS Adopting Release, supra, at 37503.
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    The NYSE Arca Order Imbalances market data product will help to 
protect a free and open market by providing additional data to the 
marketplace and by giving investors greater choices. In addition, the 
proposal would not permit unfair discrimination because the product 
will be available to all of the Exchange's customers and broker-dealers 
through both SFTI and the Liquidity Center Network.

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

    In accordance with section 6(b)(8) of the Act,\13\ 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. Because other exchanges already offer similar 
products, the Exchange's proposed NYSE Arca Order Imbalances market 
data product will enhance

[[Page 4691]]

competition. The NYSE Arca Order Imbalances product will foster 
competition by providing an alternative to similar products offered by 
other exchanges, including order imbalances products offered by the 
Exchange's affiliates, NYSE and NYSE MKT,\14\ and by NASDAQ.\15\ This 
proposed new data feed provides investors with new options for 
receiving market data, which was a primary goal of the market data 
amendments adopted by Regulation NMS.\16\
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    \13\ 15 U.S.C. 78f(b)(8).
    \14\ See note 10, supra.
    \15\ See note 11, supra.
    \16\ See Regulation NMS Adopting Release, supra, at 37503.
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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

    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, it has become effective pursuant to section 
19(b)(3)(A) of the Act \17\ and Rule 19b-4(f)(6) thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the 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.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \19\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \20\ permits the 
Commission to 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 Exchange 
stated that it anticipates migrating symbols to Pillar beginning 
February 1, 2016, and that waiver of the operative delay would permit 
market data that would be available in existing products for symbols 
that have migrated to Pillar to also be available in a stand-alone 
product, which would offer an alternative to currently available 
proprietary data products. The Commission believes the waiver of the 
operative delay is consistent with the protection of investors and the 
public interest. Therefore, the Commission hereby waives the operative 
delay and designates the proposal operative upon filing.\21\
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    \19\ 17 CFR 240.19b-4(f)(6).
    \20\ 17 CFR 240.19b-4(f)(6)(iii).
    \21\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 the 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 to 
determine whether the proposed rule change should be approved or 
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. 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-2016-10 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-NYSEArca-2016-10. 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 available publicly. All 
submissions should refer to File Number SR-NYSEArca-2016-10, and should 
be submitted on or before February 17, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-01667 Filed 1-26-16; 8:45 am]
 BILLING CODE 8011-01-P