[Federal Register Volume 82, Number 117 (Tuesday, June 20, 2017)]
[Notices]
[Pages 28157-28170]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-12770]



[[Page 28157]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80929; File No. SR-NYSEArca-2017-40]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change in Connection With the Proposed Merger of Its 
Wholly Owned Subsidiary NYSE Arca Equities, Inc. With and Into the 
Exchange

June 14, 2017.
    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 June 2, 2017, 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

    In connection with the proposed merger of its wholly owned 
subsidiary NYSE Arca Equities, Inc. (``NYSE Arca Equities'') with and 
into the Exchange, the Exchange proposes to amend (1) Article III, 
Sections 3.01, 2.02 and 4.02 of the Amended and Restated NYSE Arca, 
Inc. Bylaws (``Bylaws''); (2) certain Rules of the Exchange to 
facilitate the integration of NYSE Arca Equities and create a single 
rulebook; (3) the NYSE Arca Options Fee Schedule (the ``Options Fee 
Schedule''); and (4) the Schedule of Fees and Charges for Exchange 
Services (the ``Listing Fee Schedule''). In addition, the Exchange 
proposes to remove the NYSE Arca Equities organizational documents, 
rules of NYSE Arca Equities, and NYSE Arca Equities Schedule of Fees 
and Charges for Exchange Services (``Equities Fee Schedule'') from the 
Exchange rules and adopt a new fee schedule for the Exchange equity 
market (``NYSE Arca Equities Fee Schedule''). 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
    In connection with the proposed merger of its wholly owned 
subsidiary NYSE Arca Equities with and into the Exchange (``Merger''), 
the Exchange proposes to amend (1) Article III, Sections 3.01, 2.02 
[sic] and 4.02 of the Bylaws; (2) certain Rules of the Exchange to 
facilitate the integration of NYSE Arca Equities and create a single 
rulebook; (3) the Options Fee Schedule; and (4) the Listing Fee 
Schedule. In addition, the Exchange proposes to remove the NYSE Arca 
Equities organizational documents, rules of NYSE Arca Equities, and 
Equities Fee Schedule from the Exchange rules and adopt a new NYSE Arca 
Equities Fee Schedule in connection with the proposed merger.
    Presently, the Exchange has delegated certain responsibilities to 
its subsidiary NYSE Arca Equities to operate its equities market. The 
Exchange also has two rulebooks, the NYSE Arca rules for the options 
market and the NYSE Arca Equities rules for the equities market. 
Following the Merger, the Exchange will be the surviving entity, and it 
will directly operate both the Exchange's options and equities markets, 
with one rulebook. The Exchange is proposing amendments in order to 
reflect that change.
    More specifically, the proposed amendments would allow the Exchange 
to directly operate both markets by:
    1. Terminating the existing delegation to NYSE Arca Equities;
    2. amending the Exchange's corporate governance structure to (a) 
integrate Equities Trading Permit holders (``ETP Holders'') \4\ into 
the process for appointing members of the Board of Directors 
(``Board''), (b) provide that the holding member, NYSE Group, Inc. 
(``NYSE Group'') determines the size of the Board; (c) integrate ETP 
Holders into the Board and Permit Holder Committees; and (d) add the 
existing NYSE Arca Equities Business Conduct Committee to the Exchange 
rules;
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    \4\ An Equities Trading Permit is referred to as an ``ETP.''
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    3. integrating the current NYSE Arca Equities rules into the NYSE 
Arca rules, so that the Exchange has a single rulebook; and
    4. adopting the proposed NYSE Arca Equities Fee Schedule for the 
Exchange equity market and amending the Options Fee Schedule and 
Listing Fee Schedule.

The Exchange addresses each item in turn below.
    The Exchange proposes that the rule change proposed herein would 
become operative upon the completion of the Merger. The Exchange would 
complete the Merger following approval of this rule filing, on a date 
determined by its Board.

I. Termination of Delegation

    The Exchange has delegated certain responsibilities to its 
subsidiary NYSE Arca Equities to operate its equities market. However, 
the Exchange retains ultimate responsibility for its equities market, 
including the responsibility to ensure the fulfillment of statutory and 
self-regulatory obligations.\5\ NYSE Arca Equities is not a national 
securities exchange.
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    \5\ See NYSE Arca Equities Rule 3.4 (stating that NYSE Arca, 
``as a self-regulatory organization registered with the Securities 
and Exchange Commission pursuant to Section 6 of the Exchange Act, 
shall have ultimate responsibility in the administration and 
enforcement of rules governing the operation of its subsidiary, NYSE 
Arca Equities, Inc.''). See also NYSE Arca Equities Rule 14.1.
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    The Exchange proposes to terminate the delegation of functions to 
NYSE Arca Equities (``Delegation'') currently set forth in NYSE Arca 
Equities Rule 14.2 (NYSE Arca Equities Inc. (`NYSE Arca Equities')). 
NYSE Arca Equities Rule 14.1 (NYSE Arca, Inc.), which sets forth the 
authority and functions retained by the Exchange, would become obsolete 
as a result. Accordingly, neither would be carried over into the 
Exchange rules.
    In connection with the termination of the Delegation, the NYSE Arca 
Equities Certificate of Incorporation and Bylaws, rules of NYSE Arca 
Equities and Equities Fee Schedule would be removed from the Exchange 
rules.

[[Page 28158]]

II. Proposed Changes to the Exchange's Corporate Governance

A. Composition of the Board and Appointment of Non-Affiliated Directors 
of the Post-Merger Entity

    Pursuant to the Merger, the Exchange proposes to incorporate the 
ETP Holders into the process for selecting Exchange Board members. In 
addition, it proposes to implement certain other changes regarding the 
composition of the Board that would make the provisions regarding the 
Exchange's Board more consistent with the governing documents of the 
Exchange's national securities exchange affiliates, New York Stock 
Exchange LLC (``NYSE LLC''), NYSE MKT LLC (``NYSE MKT''), and NYSE 
National, Inc. (``NYSE National'' and collectively, the ``SRO 
Affiliates'').
    Because the relevant provisions are found in both the Bylaws and 
the Rules of the Exchange, in order to implement the proposed 
governance changes the Exchange would amend Bylaws Article III, 
Sections 3.01(b) (Powers) and 3.02(a) (Number; Election; Qualification; 
Term; Nomination) and Rule 3.2(b)(2) (Exchange Committees). These 
proposed changes are described below.
Bylaws Article III, Section 3.01(b)
    The Exchange proposes to amend Bylaws Article III, Section 3.01(b) 
to add definitions of ETP Holders, Options Trading Permit Holders 
(``OTP Holders'') \6\ and Permit Holders. The changes would also 
incorporate the ETP Holders in the statement of the authority of the 
Board. Accordingly, the Exchange proposes to make the following changes 
to Section 3.01(b) (new text italicized; deleted text bracketed):
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    \6\ An Options Trading Permit is referred to as an ``OTP.''

    (b) The Board of Directors shall exercise all such powers of the 
Exchange and do all such lawful acts and things as are not by law, 
the Certificate, these Bylaws or the Rules directed or required to 
be exercised, done or approved by the Holding Member, [or] the 
options trading permit holders who are permitted to trade on the 
Exchange's facilities for the trading of options that are securities 
as covered by the Exchange Act (collectively, ``Options Trading 
Permit Holders'') or the equities trading permit holders who are 
permitted to trade on the Exchange's facilities for the trading of 
equities that are securities as covered by the Exchange Act 
(collectively, ``Equities Trading Permit Holders'' and, together 
with the Options Trading Permit Holders, the ``Permit Holders'').
    Bylaws Article III, Section 3.02(a)

    The Exchange proposes to make several amendments to Bylaws Article 
III, Section 3.02(a), which sets forth the Board composition 
requirements.
    First, the Exchange proposes to remove the requirement that the 
Board consist of between eight and 12 directors, with the number to be 
determined by the Board itself. The revised provision would provide 
that the number of directors shall be determined from time to time by 
the holding member, NYSE Group, provided that the Board meets the 
composition requirements set forth in the provision. To clarify what 
specific composition requirements must be met, the Exchange proposes to 
move the third and fourth sentences of Section 3.02(a), which set forth 
the requirements, to clauses (1) and (2) of the first sentence. In the 
new clause (2), the Exchange proposes to add the defined term ``Non-
Affiliated Directors'' for directors nominated by the permit holders, 
which must make up at least 20 percent of the members of the Board.
    The proposed changes would make the revised first sentence of 
Section 3.02(a) consistent with the board composition provisions in the 
governing documents of the SRO Affiliates. Like the proposed changes, 
the governing documents of the SRO Affiliates provide that NYSE Group 
(as the sole member or sole shareholder, as applicable) determines the 
number of board members, set forth the relevant board's compensation 
requirements in numbered clauses, and require that at least 20 percent 
of the board shall be non-affiliated directors.\7\
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    \7\ See Article III, Section 3.2(a) of the Fourth Amended and 
Restated By-laws of NYSE National, Inc. (``NYSE National By-laws''); 
Section 2.03(a)(i) of the Eleventh Amended and Restated Operating 
Agreement of New York Stock Exchange LLC (``NYSE LLC Operating 
Agreement''); and Section 2.03(a)(i) of the Tenth Amended and 
Restated Operating Agreement of NYSE MKT LLC (``NYSE MKT Operating 
Agreement''). See also Securities Exchange Act Release Nos. 79902 
(January 30, 2017), 82 FR 9258 (February 3, 2017) (SR-NSX-2016-16) 
and 80523 (April 25, 2017), 82 FR 20399 (May 1, 2017) (SR-CBOE-2017-
017).
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    Currently, at least one Exchange Non-Affiliated Director is 
nominated by the OTP Holders and at least one is nominated by the ETP 
Holders. Proposed clause (2) of the revised first sentence would 
instead provide that the ``Permit Holders''--including both the OTP 
Holders and ETP Holders--nominate the Non-Affiliated Directors.
    The Exchange believes that the proposed change would be consistent 
with the process for nominating non-affiliated directors of NYSE MKT. 
Similar to the structure of NYSE Arca and NYSE Arca Equities, NYSE MKT 
operates the NYSE MKT equity market, and NYSE MKT's facility NYSE Amex 
Options LLC (``NYSE Amex Options'') operates its options market.\8\ 
Under the NYSE MKT Operating Agreement, all member organizations 
participate in the process for nominating non-affiliated directors.\9\ 
Because both options trading permit holders (``ATP Holders'') and 
equity member organizations are member organizations, as that term is 
defined in the NYSE MKT Operating Agreement, non-affiliated directors 
are nominated by both types of member organizations in a single 
process.\10\
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    \8\ See Amended and Restated Limited Liability Company Agreement 
of NYSE Amex Options LLC, Section 3.1(b). NYSE MKT is the only SRO 
Affiliate with both an equities and an options market.
    \9\ See NYSE MKT Operating Agreement, Article II, Section 
2.03(a) (iii)-(v). Under the NYSE MKT Operating Agreement, the 
nominating committee recommends candidates for the non-affiliate 
directors, and announces them to the member organizations. If a 
petition candidate receives sufficient member organization 
signatures, the recommended candidates and petition candidates are 
submitted to the member organizations for a vote.
    \10\ See NYSE MKT Operating Agreement, Article II Section 2.02 
(defining ``member organization'' to include members and member 
organizations of NYSE MKT); and NYSE MKT Rule 900.2NY(5) 
(``references to `member', `member organization' and `86 Trinity 
Permit Holder' as those terms are used in the Rules of the Exchange 
should be deemed to be references to ATP Holders''); see also NYSE 
MKT Rule 2--Equities (setting forth the definitions of member and 
member organization).
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    The Exchange believes that the proposed change also would be 
consistent with the governing documents of The NASDAQ Stock Market LLC 
(``Nasdaq LLC''), which is the sole member of The NASDAQ Options Market 
LLC (``NOM''). NOM, which operates the options trading facility of 
Nasdaq LLC, does not have its own board of directors.\11\ Under the 
bylaws of Nasdaq LLC, each ``member representative director'' is 
nominated by a member nominating committee. If the election is 
contested, the Nasdaq LLC members vote on the nomination in a single 
process.\12\ The options participants and other members do not vote 
separately.
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    \11\ See Limited Liability Company Agreement of The Nasdaq 
Options Market LLC, Section 9(a) (providing that the ``management of 
the Company shall be vested in the Member'').
    \12\ See By-laws of The NASDAQ Stock Market LLC, Article I (q) 
and Article II, Section 1 and 2. A Nasdaq LLC member is defined as 
``any registered broker or dealer that has been admitted to 
membership in the national securities exchange operated by'' Nasdaq 
LLC. Id., Article I(t).
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    The Exchange believes that the proposed change would also be 
consistent with the governing documents of Nasdaq BX, Inc. (``Nasdaq 
BX''). Nasdaq BX's controlled subsidiary, Nasdaq OMX BX Equities LLC, 
operates the equities trading facility of Nasdaq BX and, like NOM, does 
not have its own board of

[[Page 28159]]

directors.\13\ As with Nasdaq LLC, each ``member representative 
director'' of its board of directors is nominated by a member 
nominating committee. If the election is contested, the exchange 
members vote on the nomination in a single process.\14\
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    \13\ See NASDAQ OMX BX Equities LLC Fifth Amended and Restated 
Operating Agreement Article 3, Section 3.1; Article 4, Section 4.1; 
Delegation Agreement between Nasdaq BX and Nasdaq OMX BX Equities 
LLC.
    \14\ See By-laws of NASDAQ BX, Inc., Article IV, Section 4.4.
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    The Exchange proposes to add a new fifth sentence to Section 
3.02(a) stating that, if 20 percent of the directors is not a whole 
number, the number of directors to be nominated and selected by the 
Permit Holders will be rounded up to the next whole number. As a 
result, the current fifth sentence, which provides that the Board shall 
determine the exact number of each category of directors on the Board, 
would no longer be needed. The proposed change would be consistent with 
the governing documents of the SRO Affiliates, each of which have a 
similar provision for calculating the minimum number of non-affiliated 
directors, and do not authorize the SRO Affiliate's board of directors 
to determine the number of directors in each category.\15\
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    \15\ See Section 2.03(a)(i) of the NYSE LLC Operating Agreement; 
Section 2.03(a)(i) of the NYSE MKT Operating Agreement; and Article 
III, Section 3.2(a) of the NYSE National By-Laws. The Exchange notes 
that the term ``Permit Holder Directors,'' would be deleted in the 
proposed change. Such term is not used elsewhere in the By-laws.
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    The revised Section 3.02(a) would be as follows (new text 
italicized; deleted text bracketed):

    The Board of Directors shall consist of [not less than eight (8) 
or more than twelve (12) directors, with the Board of Directors to 
consist initially of ten (10) directors, including the Chief 
Executive Officer of the Holding Member. The authorized] a number of 
directors (``Directors'') [shall be] as determined from time to time 
by the [Board of Directors. A] Holding Member; provided that (1) at 
least fifty percent (50%) of the directors will be persons from the 
public and will not be, or be affiliated with, a broker-dealer in 
securities or employed by, or involved in any material business 
relationship with, the Exchange or its affiliates (``Public 
Directors'')[. A]; and (2) at least twenty percent (20%) of the 
directors shall consist of individuals nominated by the [trading 
permit holders, with at least one director nominated by the Equities 
Trading Permit Holders of NYSE Arca Equities, Inc., and with at 
least one director nominated by the] Permit Holders of the Exchange 
(``Non-Affiliated Directors''). For purposes of calculation of the 
minimum number of Non-Affiliated Directors, if 20 percent of the 
Directors is not a whole number, such number of Directors to be 
nominated and selected by the Permit Holders will be rounded up to 
the next whole number. [The exact number of Public Directors and 
Permit Holder Directors shall be determined from time to time by the 
Board of Directors, subject to the percentage restrictions described 
in this Section 3.02(a).] The term of office of a director shall not 
be affected by any decrease in the authorized number of directors.
Rule 3.2(b)(2)
    Current Rule 3.2(b)(2) sets forth the membership requirements for 
the nominating committee (``Nominating Committee''), which nominates 
the OTP Holder member of the Board, and sets forth the nominating 
committee and petition processes.\16\ The Exchange proposes to revise 
Rule 3.2(b)(2) to incorporate the proposed changes to Bylaws Section 
3.02(a).
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    \16\ Current Rule 3.2(b)(2) would be renumbered as proposed Rule 
3.2(b)(3). For ease of reference, the current rule numbering is 
used.
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    Pursuant to Rule 3.2(b)(2)(A), the Nominating Committee is made up 
of six OTP Holders or allied persons or associated persons of an OTP 
Firm. The Exchange proposes to incorporate the ETP Holders into the 
membership of the committee by amending Rule 3.2(b)(2)(A) to reduce the 
number of OTP-related members to three, and adding the requirement that 
the Nominating Committee include three ETP Holders or allied persons or 
associated persons of an ETP Holder.\17\
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    \17\ The rules regarding the Equities Market do not have ETP 
Firms.
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    Current Rule 3.2(b)(2)(C)(ii) sets forth the nominating committee 
and petition processes. In order to incorporate the ETP Holders into 
the nominating and petition processes and integrate the proposed 
changes to Bylaws Section 3.02(a), the Exchange proposes to make the 
following changes:
     To include ETP Holders, ``OTP Holder'' and ``OTP Holders'' 
would be replaced with ``Permit Holder'' and ``Permit Holders,'' 
respectively.
     The first sentence of the provision states that the 
Nominating Committee shall publish the name of one OTP Holder or allied 
person or associated person of an OTP Firm as its nominee for the 
Exchange Board. The sentence would be revised to (a) allow ETP Holders 
or Allied Persons or Associated Persons of an ETP Holder to be 
nominees; and (b) provide the option to nominate more than one Non-
Affiliated Director.
     The second sentence sets forth how, if the Board has more 
than 10 members, the determination will be made whether the additional 
permit holder representative should be an OTP or an ETP Holder. In 
continuation, the next sentence begins with ``If it is determined that 
the additional representative is an OTP Holder.'' The Exchange proposes 
to delete the second sentence and the cited text from the third 
sentence. The proposed changes to the Bylaws would no longer provide 
for two separate categories of permit holder directors, and so no 
determination would be required.
     The third sentence would be amended to clarify that the 
Nominating Committee would be required to name sufficient nominees so 
that at least 20 percent of the directors were Non-Affiliated 
Directors, by replacing ``nominate additional'' with ``name 
sufficient.'' The generic reference to ``individuals nominated by 
trading permit holders'' would be replaced with the more specific 
``Non-Affiliated Directors.''
     In the current fifth sentence, the definition of ``Permit 
Holders'' would be added, and ``OTP Holder position'' would be replaced 
with ``Non-Affiliated Director position.''
     The current sixth sentence sets forth the limits on what 
percentages of signatories to a petition can be from a given OTP 
Holder, OTP Firm or associated OTP Holders and Firms. In order to 
incorporate ETP Holders in the limitation, the Exchange would add a new 
clause (z), based on NYSE Arca Equities Rule 3.2(b)(2)(C)(i), including 
ETP Holders who are deemed affiliates of the relevant Permit Holder. 
Finally, ``an OTP Holder's position'' would be replaced with ``Non-
Affiliated Director position(s).''

The revised provision would be as follows (new text italicized; deleted 
text bracketed):

    The Nominating Committee shall publish the name of one (1) or 
more OTP Holder or Allied Person or Associated Person of an OTP Firm 
or ETP Holder or Allied Person or Associated Persons of an ETP 
Holder as its nominee(s) for Non-Affiliated Directors of the Board 
of Directors of the NYSE Arca, Inc. [Should the Board of Directors 
be made up of more than 10 individuals, as set forth in Section 3.02 
of the Bylaws, then the Public Directors, after consulting with the 
CEO, shall determine whether the additional permit holder 
representative is an OTP Holder or an Equity Trading Permit Holder 
of NYSE Arca Equities, Inc. If it is determined that the additional 
representative is an OTP Holder, then t]The Nominating Committee 
shall name sufficient[nominate additional] nominees so that at least 
twenty percent (20%) of the Directors consist of [individuals 
nominated by trading permit holders]Non-Affiliated Directors. The 
names of the nominees shall be published on a date in each year (the 
``Announcement Date'') sufficient to accommodate the process 
described in this Rule 3.2(b)(2)(C). After the name of proposed 
nominee(s) is published,

[[Page 28160]]

OTP Holders and ETP Holders (together, ``Permit Holders'') in good 
standing may submit a petition to the Exchange in writing to 
nominate additional eligible candidate(s) to fill the [OTP 
Holder]Non-Affiliated Director position(s) during the next term. If 
a written petition of at least 10 percent of [OTP]Permit Holders in 
good standing is submitted to the Nominating Committee within two 
weeks after the Announcement Date, such person(s) shall also be 
nominated by the Nominating Committee; provided, however, that no 
[OTP]Permit Holder, either alone or together with (x) other OTP 
Holders associated with the same OTP Firm that such [OTP]Permit 
Holder is associated with, [and] (y) OTP Holders associated with OTP 
Firms that are affiliated with the OTP Firm that such [OTP]Permit 
Holder is associated with, and (z) other ETP Holders who are deemed 
its affiliates, may account for more than 50% of the signatories to 
the petition endorsing a particular petition nominee for the [OTP 
Holder's] Non-Affiliated Director position(s) on the Board of 
Directors of the NYSE Arca, Inc. Each petition for a petition 
candidate must include a completed questionnaire used to gather 
information concerning director candidates (the Exchange shall 
provide the form of questionnaire upon the request of any 
[OTP]Permit Holder). Notwithstanding anything to the contrary, the 
Nominating Committee shall determine whether any petition candidate 
is eligible to serve on the Board of Directors (including whether 
such person is free of any statutory disqualification (as defined in 
section 3(a)(39) of the Exchange Act)), and such determination shall 
be final and conclusive.

    Current Rule 3.2(b)(2)(C)(iii) sets forth the process for selecting 
a nominee when the number of nominees exceeds the number of available 
seats. To integrate the ETP Holders into the process, the Exchange 
proposes to make the following changes:
     ``OTP Holder'' and ``OTP Holders'' would be replaced with 
``Permit Holder'' and ``Permit Holders,'' respectively, and ``OTP 
Holder's position'' would be replaced with ``Non-Affiliated Director 
position(s).''
     The third sentence sets forth the limits on what 
percentages of votes can be from a given OTP Holder, OTP Firm or 
associated OTP Holders and Firms. In order to incorporate ETP Holders 
in the limitation, the Exchange would add a new clause (z), based on 
NYSE Arca Equities Rule 3.2(b)(2)(C)(ii), including ETP Holders who are 
deemed affiliates of the relevant Permit Holder.
    The revised provision would be as follows (new text italicized; 
deleted text bracketed): In the event that the number of nominees 
exceeds the number of available seats, the Nominating Committee shall 
submit the contested nomination to the [OTP]Permit Holders for 
selection. [OTP]Permit Holders shall be afforded a confidential voting 
procedure and shall be given no less than 20 calendar days to submit 
their votes. Each [OTP]Permit Holder in good standing may select one 
nominee for the contested seat on the Board of Directors; provided, 
however that no [OTP]Permit Holder, either alone or together with (x) 
other OTP Holders associated with the same OTP Firm that such 
[OTP]Permit Holder is associated with, [and] (y) OTP Holders associated 
with OTP Firms that are affiliated with the OTP Firm that such 
[OTP]Permit Holder is associated with, and (z) other ETP Holders who 
are deemed its affiliates, may account for more than 20% of the votes 
cast for a particular nominee for the [OTP Holder's] Non-Affiliated 
Director position(s) on the Board of Directors of NYSE Arca, Inc. With 
respect to [the]any contested position, the nominee for the Board of 
Directors receiving the most votes of [OTP]Permit Holders shall be 
submitted by the Nominating Committee to the Board of Directors of the 
NYSE Arca, Inc. Tie votes shall be decided by the Board of Directors at 
its first meeting following the election.
    Finally, Rule 3.2(b)(2)(C)(i) sets forth the membership of the 
initial board of directors of the Exchange. The Exchange proposes to 
replace the obsolete provision with ``Reserved.''
Rule 3.3(a)(2)
    Rule 3.3 sets forth the provisions regarding Board Committees. In 
accordance with the proposed changes to the Board composition, the 
Exchange proposes to amend Rule 3.3(a)(2), regarding the Committee for 
Review (``CFR''). Specifically, in Rule 3.3(a)(2)(A) ``NYSE Arca 
Equities'' would be replaced with ``the Exchange'' and the text ``OTP 
Director(s), the ETP Director(s) and the Public Directors of both NYSE 
Arca and NYSE Arca Equities'' would be amended to state ``Non-
Affiliated Director(s) and the Public Directors of the Exchange.'' In 
Rule 3.3(a)(2)(B), the text ``Director that is an OTP Holder or Allied 
Person or Associated Person of an OTP Firm'' would be amended to state 
``Non-Affiliated Director.''

B. Board and Permit Holder Committees

    In order to integrate the ETP Holders and the NYSE Arca Equities 
committees into the Exchange committee structure, the Exchange proposes 
to amend Bylaws Article IV, Section 4.02 (``Permit Holder 
Committees''), Rule 3.1 (Overview), Rule 3.2 (Options Committees), and 
Rule 3.3 (Board Committees).
Article IV, Section 4.02
    Bylaws Article IV, Section 4.02 lists the Exchange committees. The 
Exchange proposes to add the Exchange disciplinary committee, called 
the ``Ethics and Business Conduct Committee'' (``EBCC'') \18\ to the 
list in the first sentence of Section 4.02 and to the defined term for 
``Permit Holder Committees'' in the second sentence. The NYSE Arca 
Equities disciplinary committee, the ``Business Conduct Committee'' 
(``BCC'') \19\ is already listed in Section 4.02.
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    \18\ See NYSE Arca Rule 3.2(b)(1) (Options Committees) (setting 
forth the composition, functions and authority of the EBCC).
    \19\ See NYSE Arca Equities Rule 3.2(b)(1) (Equity Committees) 
(setting forth the composition, functions and authority of the BCC).
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    In addition, the Exchange proposes to remove two obsolete 
references to the Permit Holder Advisory Committee. There are no other 
references to a Permit Holder Advisory Committee in the By-laws or 
rules of the Exchange. The Exchange believes that the references were 
meant to refer to the OTP Advisory Committee, which no longer exists, 
as its functions were assumed by the Committee for Review.\20\
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    \20\ See Securities Exchange Release No. 77898 (May 24, 2016), 
81 FR 34404 (May 31, 2016) (SR-NYSEArca-2016-11).
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Rules 3.1, 3.2 and 3.3
    Rule 3.1 sets forth the Board's authority to establish committees 
that consist partly or entirely of directors of the Exchange (each, a 
``Board Committee'') and committees consisting of people other than 
directors of the Exchange (each, an ``Options Committee''). Rule 3.2 
sets forth the provisions governing Options Committees, including the 
Ethics and Business Conduct Committee and Nominating Committee.
    The Exchange proposes to revise Rules 3.1 and 3.2 to integrate the 
ETP Holders. Specifically, the Exchange proposes to make the following 
changes:
     In Rules 3.1 and 3.2, the Exchange proposes to replace 
``Options Committee'' and ``Options Committees'' with ``Exchange 
Committee'' and ``Exchange Committees,'' respectively.
     In Rule 3.2(a)(8), which governs the eligibility for, and 
appointment to, Options Committees, the Exchange proposes to add ETP 
Holders to the list of persons eligible for appointment, by adding ``or 
ETP Holder'' after ``Any OTP Holder'' and adding ``or of an ETP 
Holder'' after ``OTP Firm'' in the first sentence, and ``, ETP 
Holders,'' after ``OTP Holders'' and ``or of an ETP Holder'' after 
``OTP Firm'' in the third sentence.
     In Rule 3.2(a)(9), which governs naming alternate members, 
the Exchange proposes to add ``ETP Holders,'' after ``OTP Holders.''

[[Page 28161]]

    The Exchange proposes to add the current NYSE Arca Equities BCC to 
the Exchange Rules as an Exchange Committee in new Rule 3.2(b)(2). The 
proposed text would be the same as the language in current NYSE Arca 
Equities Rule 3.2(b)(1), except that:
     The references to NYSE Arca Equities Rules 4, 10 and 11.9 
would be updated to references to Rules 4-E, 10 and 13.9, respectively.
     References to the ``Board,'' which in the present rule 
means the board of directors of NYSE Arca Equities, would become 
references to the Board of the Exchange.
    Pursuant to proposed Rule 3.2(b)(1) and (2), disciplinary 
proceedings of NYSE Arca involving OTP Holders, OTP Firms, and 
associated persons would continue to be heard by the EBCC, while 
disciplinary proceedings of NYSE Arca Equities involving ETP Holders 
and associated persons would continue to be heard by the BCC.
Conforming Changes in Rule 3
    The Exchange proposes to make conforming changes in other 
provisions of Rule 3. Specifically, in Rules 3.7 (Dues, Fees and 
Charges), 3.8 (Liability for Payment), and 3.10 (Certain 
Relationships), the Exchange proposes to add ``ETP Holders,'' before 
``OTP Holders'' and ``ETP Holder'' before ``OTP Holder,'' respectively. 
In Rule 3.10(b), the Exchange propose to add ``ETP Holder or'' before 
``OTP Firm.''

C. Proposed Rule 3.12

    The Exchange proposes to add new Rule 3.12 (NYSE Arca, L.L.C. and 
Archipelago Securities, L.L.C.), which would address the access to and 
status of the books, records, premises, officers, directors, agents and 
employees of NYSE Arca, L.L.C. and Archipelago Securities, L.L.C. 
Proposed Rule 3.12 would be substantially the same as current NYSE Arca 
Equities Rule 14.3 (NYSE Arca, L.L.C. and Archipelago Securities, 
L.L.C.), with the following exceptions:
     In proposed Rule 3.12(a), the text ``the Exchange'' would 
replace ``NYSE Arca Equities''; ``NYSE Arca and NYSE Arca Equities''; 
and ``the NYSE Arca, NYSE Arca Equities.''
     In proposed Rule 3.12(f), the text ``, NYSE Arca 
Equities'' would be deleted.

III. Integration of NYSE Arca Equities Rules Into the NYSE Arca Rules

A. Organization of the Proposed Revised NYSE Arca Rulebook

    Presently, the Exchange has two rulebooks: the NYSE Arca rules for 
the options market and the NYSE Arca Equities rules for the equities 
market. In connection with the Merger and the termination of the 
Delegation, the Exchange proposes to integrate the two sets of rules 
into a single rulebook. The resulting rulebook would have three types 
of rules: rules that apply to both markets; rules that apply only to 
the options market, indicated by an ``-O'' at the end of the rule 
number; and rules that apply only to the equities market, indicated by 
an ``-E'' at the end of the rule number. More specifically:
     The following amended rules would apply to both markets 
and would be grouped under the heading ``General Rules'': NYSE Arca 
Rules 0 (Regulation of the Exchange, OTP Holders, OTP Firms and ETP 
Holders); 1 (Definitions); 2 (Trading Permits); and 3 (Organization and 
Administration).
     The following amended rules would apply to only to [sic] 
the options market, and would be grouped under the heading ``Options 
Rules'': NYSE Arca Rules 4-O (Capital Requirements, Financial Reports, 
Margins--Options); 5-O (Options Contracts Traded on the Exchange); 6-O 
(Options Trading); 7-O (General Options Trading Rules); 8-O (Reserved) 
and 9-O (Conducting Business with the Public--Options) (collectively, 
the ``Options Rules'').
     The following amended rules would apply to only to [sic] 
the equities market, and would be grouped under the heading ``Equities 
Rules'': NYSE Arca Rules 4-E (Capital Requirements, Financial Reports, 
Margins--Equities); 5-E (Equities Listings); 6-E (Order Audit Trail 
System); 7-E (Equities Trading); 8-E (Trading of Certain Equity 
Derivatives); and 9-E (Conducting Business with the Public--Equities) 
(collectively, the ``Equities Rules'').
     The following amended rules would apply to both markets 
and would be grouped under the heading ``Disciplinary and Miscellaneous 
Rules'': 10 (Disciplinary Proceedings, Other Hearings and Appeals); 11 
(Business Conduct); 12 (Arbitration); 13 (Cancellation, Suspension and 
Reinstatement); and 14 (Liability of Directors and Exchange).
    The Exchange's organization of its rules would be similar to that 
of its affiliate NYSE MKT, which has rules of general application and 
rules specific to its equity and options markets.\21\
---------------------------------------------------------------------------

    \21\ See, e.g. NYSE MKT Office Rules, Rules 300-590; NYSE MKT 
Section 900NY (Rules Principally Applicable to Trading of Option 
Contracts); and NYSE MKT Rule 0-Equities through Rule 6140-Equities.
---------------------------------------------------------------------------

    Except as otherwise stated below, the proposed changes are not 
intended to change the substance of the NYSE Arca or NYSE Arca Equities 
rules, but are organizational in nature.\22\
---------------------------------------------------------------------------

    \22\ The Exchange will amend the present filing to reflect any 
amendments to Exchange rules before the date of approval.
---------------------------------------------------------------------------

Proposed Changes Applicable to Entire Rulebook
    The following proposed changes would apply to the entire set of 
Exchange rules. To avoid needless repetition, when discussing specific 
Rules, the Exchange does not repeat the description of these global 
changes.
    Throughout the rules, all cross references to the Options Rules 
would be updated to reflect the addition of ``-O'' to the rule numbers. 
Similarly, all cross references to the Equities Rules would be amended 
to reflect the addition of ``-E'' to the rule numbers and to delete 
``Equities'' from ``NYSE Arca Equities Rule.'' For example, a cross 
reference ``NYSE Arca Equities Rule 5.2(j)(6)'' would be amended to 
``NYSE Arca Rule 5.2-E(j)(6).''
    Throughout the rules, cross references would be updated as needed, 
including cross references within a renumbered rule to the rule itself. 
For example, the Exchange proposes to add Commentary .01 from NYSE Arca 
Equities Rule 2.17 to Rule 2.18. The references to ``Rule 2.17'' within 
the Commentary would be updated to ``Rule 2.18'' accordingly.
    The NYSE Arca Equities rules refer to NYSE Arca Equities, Inc., as 
the ``Corporation.'' \23\ The term will be obsolete subsequent to the 
Merger, as NYSE Arca Equities will cease to exist. Accordingly, in all 
proposed rule text based on the NYSE Arca Equities rules, the Exchange 
proposes to replace ``Corporation'' and ``Corporation's'' with 
``Exchange'' and ``Exchange's,'' respectively. Similarly, ``a 
Corporation'' would be changed to ``an Exchange.'' \24\
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    \23\ See NYSE Arca Equities Rule 1(k).
    \24\ See e.g., NYSE Arca Equities Rules 2.21(f) (``a Corporation 
employee'') and 5.4(a) (``a Corporation listing standard'').
---------------------------------------------------------------------------

B. General Rules

    Proposed revised Rules 0, 1, 2, and 3, which would apply to both 
the equities and options markets, would incorporate changes based on 
NYSE Arca Equities Rules 0 (Regulation of the Exchange and Exchange 
Trading Permit Holders); 1 (Definitions); 2 (Equity Trading Permits); 
and 3 (Organization and Administration), respectively. The proposed 
changes to Rules 0, 1 and 2 are addressed below. The proposed changes 
to Rule 3 are addressed in Part II, above.

[[Page 28162]]

Rule 0 (Regulation of the Exchange, OTP Holders, and OTP Firms)
    The text of Rule 0 and NYSE Arca Equities Rule 0 is the same. 
Accordingly, in order to incorporate the equities market, the sole 
change to Rule 0 would be to change its title to ``Regulation of the 
Exchange, OTP Holders, OTP Firms and ETP Holders.''
Rule 1 (Definitions)
    The Exchange proposes to integrate Rule 1 and NYSE Arca Equities 
Rule 1 (Definitions) by (a) incorporating the text of definitions that 
are unique to NYSE Arca Equities Rule 1.1, and (b) amending definitions 
that the two rules have in common, as needed. The Exchange also 
proposes to delete definitions marked ``Reserved,'' put the definitions 
in alphabetical order, and renumber the definitions to reflect the 
changes.
Proposed New Definitions
    The Exchange proposes to add the following definitions from NYSE 
Arca Equities Rule 1.1: Authorized Trader; Away Market; BBO; Core 
Trading Hours; Derivative Securities Product and UTP Derivative 
Securities Product; Effective National Market System Plan, Regular 
Trading Hours; Eligible Security; ETP; ETP Holder; FINRA; General 
Authorized Trader; Lead Market Maker; Marketable; Market Maker; Market 
Maker Authorized Trader; Market Participant; Nasdaq; NBBO, Best 
Protected Bid, Best Protected Offer, Protected Best Bid and Offer 
(PBBO); NMS Stock; Notice of Consent; Official Closing Price; Protected 
Bid, Protected Offer, Protected Quotation; Routing Agreement; Sponsored 
Participant; Sponsoring ETP Holder; Sponsorship Provisions; Stockholder 
Associate; Trade-Through; Trading Center: User; User Agreement; UTP 
Listing Market; and UTP Regulatory Halt.
    The phrase ``[w]ith respect to equities traded on the Exchange'' 
would be added to the start of all the added definitions except the 
definitions for Eligible Security, ETP, ETP Holder, FINRA, Nasdaq, and 
NMS Stock.
    The current definition of ETP Holder in NYSE Arca Equities Rule 1.1 
provides that an ETP Holder would ``have limited voting rights to 
nominate two directors to the Exchange's Board of Directors and one 
Governor to the Board of Governors of the NYSE Arca Parent.'' The 
Exchange believes that such statement is not relevant to the definition 
and would be adequately addressed in proposed Bylaw 3.02 and Rule 3.2. 
Accordingly, when integrating the definition of ETP Holder, the 
Exchange proposes not to include the cited sentence, as well as to 
change ``NYSE Arca Parent'' to ``Exchange.''
Proposed Amendments to Rule 1
    To incorporate NYSE Arca Equities Rule 1.1, the Exchange proposes 
to make the following amendments to the current definitions in Rule 
1.1:
     In definitions that would apply to both OTPs and ETPs, the 
Exchange proposes to add references to ETPs and ETP Holders. 
Accordingly, ``ETP Holder'' and/or ``ETP Holders'' \25\ would be added 
to the definitions of Allied Person; Approved Person; Associated 
Person; Good Standing; Participant; Registered Employee; and Trading 
Facilities. A reference to ``ETP'' would be added to the definition of 
Good Standing.
---------------------------------------------------------------------------

    \25\ Throughout the rules, when adding ``ETP,'' ``ETPs,'' ``ETP 
Holder'' or ``ETP Holders'' to a rule, the Exchange would utilize a 
comma, ``and'' or ``or'' as necessary to integrate it into the text.
---------------------------------------------------------------------------

     Both ``Board'' and ``Board of Directors'' are used in the 
Rules to refer to the Board of Directors of NYSE Arca, but only 
``Board'' is defined in Rule 1.1.\26\ Accordingly, the Exchange 
proposes to expand the definition of ``Board'' so that both ``Board'' 
and ``Board of Directors'' are defined to mean the Board of Directors 
of NYSE Arca.
---------------------------------------------------------------------------

    \26\ See, e.g., Rules 2.3 (Qualifications of Firm Applicants), 
2.14 (Allied Persons and Approved Persons), and 4.2(g) (Voting 
Agreement).
---------------------------------------------------------------------------

     The definitions of OTP Holder and OTP Firm provide that 
the OTP Holder or OTP Firm, as applicable, ``will have limited voting 
rights to nominate an OTP Holder to the Exchange's Board of Directors 
pursuant to Rule 3.2(b)(2)(C).'' As with the definition of ETP Holder, 
the Exchange believes that such statements are not relevant to the 
definitions and are addressed in Bylaw 3.02 and Rule 3.2. Accordingly 
it proposes to delete the cited sentences.\27\
---------------------------------------------------------------------------

    \27\ The Exchange believes that the proposed changes to the 
definitions of ETP Holder, OTP Holder and OTP Firm would be 
consistent with the definitions of ``Member'' and ``Member Firm'' in 
the governing documents of NYSE and NYSE MKT, which do not refer to 
voting for non-affiliated directors. See NYSE Rule 2 and NYSE MKT 
Rule 2-Equities. See also Nasdaq Stock Market Equity Rule 0129(i) 
(definition of ``Member'' or ``Nasdaq Member'') and Options Rule 
1(40) (definition of ``Options Participant'' or ``Participant'') and 
Seventh Amended and Restated Bylaws of Chicago Board Options 
Exchange, Inc., Article I, Section 1.1(f) (definition of ``Trading 
Permit Holder'').
---------------------------------------------------------------------------

     The definition of NYSE Arca Marketplace in the two 
rulebooks differs. However, while the term is used multiple times in 
the NYSE Arca Equities Rules, it is not used in the Exchange Rules 
other than in the definition itself. Accordingly, the Exchange proposes 
to delete the definition of NYSE Arca Marketplace in Rule 1.1(dd) and 
replace it with the definition in NYSE Arca Equities Rule 1(e), as well 
as to move it to conform to alphabetical order.
     In the definition of Security, the text ``, provided, 
however, that for purposes of Rule 7-E such term means any NMS stock'' 
would be added at the end of the definition, consistent with NYSE Arca 
Equities Rule 1(rr).
     In the definition of Trading Facilities, ``equities,'' 
would be added after ``trading of.''
Rule 2 (Options Trading Permits)
    The Exchange proposes to revise Rule 2 to incorporate NYSE Arca 
Equities Rule 2 (Equity Trading Permits), which sets forth the 
equivalent requirements for ETPs. To implement the change, the Exchange 
proposes to amend the title of Rule 2 from ``Options Trading Permits'' 
to ``Trading Permits,'' add two new rules, and amend the existing 
rules.
Proposed New Rules
    The first new rule would be proposed Rule 2.24 (Registration--
Employees of ETP Holders), which would be the same as current NYSE Arca 
Equities Rule 2.21 (Employees of ETP Holders Registration), with the 
exception of a revised title and updated rule references. Current Rules 
2.24 through 2.26 would be renumbered as Rules 2.25 through 2.27 to 
reflect the addition of proposed Rule 2.24.
    The second new rule would be proposed Rule 2.28 (Books and 
Records), which would be the same as current Rule 9.17 (Books and 
Records), with the addition of ``ETP Holder,'' ``ETP Holders,'' and ``, 
as applicable.'' \28\ To incorporate the provisions of current NYSE 
Arca Equities Rule 2.24 (ETP Books and Records), the Exchange proposes 
to add ``ETP Holders'' and ``ETP Holder'' before the terms ``OTP 
Holders and OTP Firms'' and ``OTP Holder or OTP Firm,'' 
respectively.\29\
---------------------------------------------------------------------------

    \28\ The Exchange proposes to replace the current text of Rule 
9.17 with ``reserved.'' See proposed Rule 9.17.
    \29\ Rule 11.16 (Books and Records) would only apply to OTP 
Holders and OTP Firms, as there is no equivalent provision in the 
NYSE Arca Equities rules.
---------------------------------------------------------------------------

Proposed Amendments to Rule 2
    The Exchange proposes the following revisions to the titles of 
rules in Rule 2:
     In rules that would only apply to OTPs, the Exchange 
proposes to add ``OTP'' in the title. Accordingly, the title of Rule 
2.2 (Qualifications and Application of Individual Applicants) would be 
revised to ``Qualifications and Application of Individual OTP

[[Page 28163]]

Applicants'' and the title of Rule 2.23 (Registration) would be revised 
to ``Registration--OTPs.''
     To indicate that the revised rule applies to both OTPs and 
ETPs, the Exchange proposes to (a) replace ``OTPs'' and ``OTP'' with 
``Trading Permits'' in the titles of Rules 2.5 (Denial of or Conditions 
to OTPs) and 2.11 (Sole Proprietors and Individual OTP Holders), 
respectively; (b) add ``ETP Holder,'' to the titles of Rules 2.9 
(Exchange Not Bound by OTP Holder and OTP Firm Agreements) and 2.17 
(Amendments to OTP Firm or OTP Holder Documents); (c) add ``ETP 
Holders,'' to the title of Rule 2.12 (OTP Holders and OTP Firms); (d) 
delete ``OTP'' from the title of Rule 2.16 (Responsibilities of Non-
Resident OTP Firms); (e) delete ``OTP Firm or OTP Holder'' from the 
title of Rule 2.19 (Exemption from OTP Firm or OTP Holder Registration 
Requirements); and (f) add ``ETP or'' to the title of Rules 2.21 
(Limited Transferability of an OTP) and 2.22 (Termination of an OTP).
     To make the title more reflective of the Rule, the 
Exchange proposes to change the title of Rule 2.10 (Only OTP Firms and 
OTP Holders to Trade Under) to ``Carrying Accounts for Customers and 
Conducting Business Under a Firm Name.''
     To indicate that the proposed heading applies to both OTPs 
and ETPs, the Exchange proposes to add ``ETP or'' to the heading 
``Requirements of Holding an OTP,'' which appears before Rule 2.7, and 
to the heading ``Obtaining an OTP,'' which appears before Rule 2.20. It 
also proposes to add ``and ETP Holders'' at the end of the heading 
``Employees of OTP Firms,'' which appears before Rule 2.23.
    The Exchange proposes the following revisions to the text of rules 
in Rule 2:
     In rules that would apply to both OTPs and ETP Holders, 
the Exchange proposes to add references to ETP Holders. Accordingly, 
``ETP Holder'' and/or ``ETP Holders'' would be added to Rules 2.1 
(Securities Business), 2.4(d) and (e) (Application Procedures), 2.5, 
2.7 (Requirements Applicable Generally Revocable Privilege) through 
2.9, 2.12 through 2.17, 2.18(a) and (b) (Activity Assessment Fees), 
2.19, 2.21(b), 2.22, and proposed Rules 2.26 (Electronic Mail Address) 
and 2.27 (Exchange Backup Systems and Mandatory Testing). In addition, 
the Exchange proposes to add ``, as applicable'' after ``OTP Firm'' in 
Rules 2.4(e) and 2.14(f).
     Similarly, the Exchange proposes to add ``ETP or'' before 
``OTP'' in Rules 2.3(a), 2.4(d), (e) and (g), 2.5(a), (b) and (f), 2.7, 
2.8 (No Liability for Using Facilities), 2.17(b), 2.21, and 2.22. In 
addition, the Exchange proposes to add ``, as applicable'' after 
``OTP'' in Rules 2.4(d) and (e), 2.8, 2.17(b) and 2.22(b).
     In Rules 2.1(b)(1) and 2.8, the Exchange proposes to add 
``Certificate of Incorporation,'' before ``Bylaws'' consistent with 
NYSE Arca Equities Rule 2.1(b) (Securities Business) and 2.7 (No 
Liability for Using Trading Facilities), respectively.
    Rule 2.4 sets forth the application procedures for OTPs. To add the 
procedures for ETPs, consistent with NYSE Arca Equities Rule 2.3 
(Application Procedures), the Exchange proposes to make the following 
changes:
     Unlike Rule 2.4, NYSE Arca Equities Rule 2.3(a) provides 
that application fees are not transferable. Accordingly, the Exchange 
proposes to add a sentence to the end of Rule 2.4(a) stating that 
application fees for ETPs are not transferrable. In addition, in the 
first sentence of (a), the Exchange proposes to add the text ``person 
applying to become an ETP Holder, every'' after ``Every.'' In the 
second sentence of (a), it proposes to add the text ``person seeking to 
become an ETP Holder, every'' after ``Every'' and update the obsolete 
reference to ``the NASD'' to ``FINRA's.''
     In the second sentence of Rule 2.4(d), the Exchange 
proposes to add ``for OTPs, sole proprietor applicants for ETPs,'' 
after ``Individual applicants'' consistent with NYSE Arca Equities Rule 
2.3(d), which references ``sole proprietor applicants'' but not 
individual applicants for ETPs.
     Rule 2.4(g) states that a petition for review of the 
denial of a trading permit must be filed within thirty calendar days of 
the date on which the Corporation's decision was mailed. The Exchange 
believes that the reference to the ``Corporation'' in Rule 2.4(g) is 
erroneous and should be to the ``Exchange's'' decision, as 
``Corporation'' is not a defined term in Exchange rules. Accordingly, 
the Exchange proposes to make the corresponding change.
     Rule 2.4(h) states that the approval shall be withdrawn if 
an approved application is not activated within six months, but NYSE 
Arca Equities Rule 2.3 does not have a similar provision. Accordingly, 
the Exchange proposes to clarify that the provision only applies to 
OTPs by adding ``for an OTP'' after ``application.''
     Rule 2.4(i) states that an ETP Holder may use an expedited 
process to become an OTP Holder. Consistent with NYSE Arca Equities 
Rule 2.3(b), the Exchange proposes to add a new second sentence stating 
that an OTP Holder may use an expedited process to become an ETP 
Holder. Consistent with the change, the Exchange proposes to add, in 
the current second sentence, the text ``and Short Form ETP Holder 
Application'' after ``Short Form OTP Holder Application'' and the text 
``or OTP Holder, as applicable,'' after ``ETP Holder.
    Rule 2.5 provides that the Exchange may deny or may condition 
trading privileges under an OTP. Consistent with NYSE Arca Equities 
Rule 2.4 (Denial of or Conditions to ETPs), the Exchange proposes to 
make the following changes:
     In Rule 2.5(b)(10), the Exchange proposes to add the 
heading ``Series 7 Requirement'' and corresponding text from NYSE Arca 
Equities Rule 2.4(b)(10).
     The first sentence of Rule 2.5(c) requires that applicants 
complete an Exchange Orientation Program prior to admission to the 
trading floor or participation on a trading system. NYSE Arca Equities 
Rule 2.4 does not have a similar provision. Accordingly, the Exchange 
proposes to change the term ``all applicants'' to ``all OTP 
applicants.''
     In Rule 2.5(f), the Exchange proposes to add a second 
sentence providing that the BCC ``may take action against an ETP Holder 
under Rule 10 when any of the above reasons for denying or conditioning 
issuance of an ETP come into existence after an application has been 
approved and an ETP has been issued,'' corresponding to NYSE Arca 
Equities Rule 2.4(f).
    Rule 2.10 addresses carrying accounts for customers and conducting 
business under a firm name. The Exchange proposes to add a second 
paragraph to Rule 2.10, with the text from NYSE Arca Equities Rule. 
2.09 (Only ETP Holder Organizations May Carry Customer Accounts).
    Rule 2.11 addresses sole proprietors. The Exchange proposes to 
update the title by replacing ``OTP'' with ``Trading Permit'' and to 
add a new section (e) to the Rule, with the text from NYSE Arca 
Equities Rule 2.10(b) (Sole Proprietors).
    Rule 2.14 sets forth provisions relating to allied persons and 
approved persons. Consistent with NYSE Arca Equities Rule 2.13 (Allied 
Persons and Approved Persons), the Exchange proposes to make the 
following changes:
     The Exchange proposes to add the text from NYSE Arca 
Equities Rule 2.13(c), (d), (g) and (i) to the end of Rule 2.14(c), 
(d), (g) and (i), respectively.
     Rule 2.14(f) states that the Exchange may require certain 
applicants to pass an examination. NYSE Arca Equities Rule 2.13(f) 
includes limited liability company member in its equivalent list.

[[Page 28164]]

Accordingly, the Exchange proposes to add the text ``, or a limited 
liability company member of any ETP Holder,'' after ``OTP Firm.''
    Rule 2.17 addresses amendments to trading permit holder documents. 
Consistent with NYSE Arca Equities Rule 2.16(c), the Exchange proposes 
to amend the first sentence of Rule 2.17(c) by revising ``termination 
of an OTP'' to state ``a person associated with that ETP Holder or an 
OTP, as applicable.''
    Rule 2.18 states that activity assessment fees will be collected 
through the Options Clearing Corporation on behalf of the Exchange.
     Consistent with NYSE Arca Equities Rule 2.17 (Activity 
Assessment Fees), the Exchange proposes to add text to Rule 2.18(a) 
stating that ``Activity Assessment Fees shall be due and payable from 
ETP Holders at such times and intervals as prescribed by the 
Exchange.''
     NYSE Arca Equities Rule 2.17(b) provides that the 
Corporation may fix and impose certain other charges or fees to be paid 
by ETP Holders, without specifying to whom they are paid. Rule 2.18(b), 
however, states that the Board of Directors sets the charges or fees, 
and that they are to be paid to the Exchange or its subsidiaries. The 
Exchange does not propose to amend this aspect of Rule 2.18(b), 
however, as it believes that the provisions are substantially similar 
in intent.
     The Exchange proposes to add commentary .01 from NYSE Arca 
Equities Rule 2.17 to Rule 2.18.
    Rule 2.19(a) sets forth the registration requirements for permit 
holders. The Exchange proposes to amend the references to ``member'' 
and ``member organization'' to include both terms, to incorporate NYSE 
Arca Equities Rule 2.18(a).
    Rule 2.21 sets forth the provisions on transfer of trading permits. 
Consistent with NYSE Arca Equities Rule 2.20 (Limited Transferability), 
the Exchange proposes to add the following text to the end of the first 
sentence in Rule 2.21(a): ``, and ETPs may not be purchased (other than 
from the Exchange), sold or leased.'' In addition, the Exchange 
proposes to add ``(other than from the Exchange'') after ``purported 
purchase'' in the second sentence.

C. Options Rules

    The Options Rules would be substantially the same as current NYSE 
Arca Rules 4, 5, 6, 7, 8, and 9, with the following changes:
     The word ``--Options'' would be added at the end of the 
headings for proposed Rules 4-O and 9-O, which would be called 
``Capital Requirements, Financial Reports, Margins--Options'' and 
``Conducting Business with the Public--Options,'' respectively. 
Similarly, the word ``Options'' would be added to the heading of 
proposed Rule 7-O, so that it becomes ``General Options Trading 
Rules.''
     ``Corporation'' would be replaced with ``Exchange'' in 
proposed Rules 4.1-O (Minimum Net Capital) and 9.26-O (Registration of 
Options Principals), and in the title of Rule 9.1-O(a) (Register with 
the Corporation). The Exchange believes that the references should be 
to the Exchange, as ``Corporation'' is not a defined term in the NYSE 
Arca rules.
     The text of Rule 9.17 (Books and Records) would be 
replaced with ``Reserved'' and the requirements of Rule 9.17 would be 
integrated with proposed Rule 2.28 (Books and Records), as discussed 
above.\30\
---------------------------------------------------------------------------

    \30\ See discussion accompanying notes 28 and 29, supra.
---------------------------------------------------------------------------

     A cross reference to Rule 6.1(a)(24) in Rule 4.16(d)(9)(G) 
(Other Provisions) would be corrected to reference subsection (b)(24), 
as the Exchange believes that the current reference is incorrect.\31\
---------------------------------------------------------------------------

    \31\ See Exhibit A, Rule 4, to SR-PCX-2004-08 (February 10, 
2004), available at https://www.sec.gov/rules/sro/pcx/34-49451_a4.pdf. See also Securities Exchange Release No. 49718 (May 
17, 2004), 69 FR 29611 (May 24, 2004).
---------------------------------------------------------------------------

D. Equities Rules

    The proposed new Equities Rules would be the same as current NYSE 
Arca Equities Rules 4, 5, 7, 8, 9, the Conduct Rules, and the Order 
Audit Trail System, subject to the following changes.
Organizational Changes
    The Exchange proposes to make the following organizational changes 
throughout the Equities Rules:
     The Exchange proposes to add the word ``--Equities'' to 
the end of the titles of proposed Rules 4-E and 9-E, which would be 
called ``Capital Requirements, Financial Reports, Margins--Equities'' 
and ``Conducting Business with the Public--Equities,'' respectively. 
``Equities'' would be added to the start of Rule 5-E, which would 
become ``Equities Listings.''
     The Conduct Rules, which are currently NYSE Arca Equities 
Rules 2010 through 5320, would be moved to the end of proposed Rule 9-
E, becoming Rules 9.2010-E through 9.5320-E, with the exception of NYSE 
Arca Equities Rule 5220 (Disruptive Quoting and Trading Activity 
Prohibited), which would be integrated into Rule 11.21 (Disruptive 
Quoting and Trading Activity Prohibited).
     The Order Audit Trail System Rules, which are currently 
NYSE Arca Equities Rules 7410 through 7470, would be moved to Rule 6-E, 
becoming Rules 6.7410-E through 6.7470-E.\32\
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    \32\ Current NYSE Arca Equities Rule 6 (Business Conduct) would 
be integrated into Rule 11 (Business Conduct). See ``Rule 11 
(Business Conduct)'', below.
---------------------------------------------------------------------------

Proposed Amendments
    Several of the NYSE Arca Equities rules refer to the Delegation or 
reference the relationship between NYSE Arca Equities and the Exchange 
through the use of the term ``NYSE Arca Parent.'' \33\ After the 
Merger, such references would be obsolete. Accordingly, to reflect the 
Merger, the Exchange proposes to make the following changes when 
incorporating NYSE Arca Equities rules into the Exchange rules:
---------------------------------------------------------------------------

    \33\ NYSE Arca Equities Rule 1(nn) defines ``NYSE Arca Parent'' 
as ``the NYSE Arca, Inc., a Delaware corporation and national 
securities exchange as that term is defined in Section 6 of the 
Securities Exchange Act of 1934, as amended.''
---------------------------------------------------------------------------

     The second sentence of NYSE Arca Equities Rule 5.1(a)(1) 
(General Provisions and Unlisted Trading Privileges) states that 
``[f]or the purposes of the Securities Exchange Act of 1934 (`Exchange 
Act'), securities traded on the Corporation shall be admitted to 
unlisted trading privileges or listed on the NYSE Arca Parent, subject 
to the NYSE Arca Parent's delegation of the responsibility for the 
administration and enforcement of the unlisted trading privileges and 
listing requirements to the Corporation.'' The Exchange proposes not to 
include the sentence when incorporating the provision into Rule 5.1-
E(a)(1) (General Provisions and Unlisted Trading Privileges).
     The Exchange proposes not to include the statement that `` 
`NYSE Arca Equities, Inc.' (the `Corporation') is a wholly owned 
subsidiary of ICE'' in NYSE Arca Equities Rule 5.1(c)(a)(3) (Listing of 
an Affiliate or Entity that Operates and/or Owns a Trading System or 
Facility of the Corporation) when incorporating the provision into 
proposed Rule 5.1-E(c)(a)(3) (Listing of an Affiliate or Entity that 
Operates and/or Owns a Trading System or Facility of the Exchange).
     The Exchange proposes to use the term ``Exchange'' instead 
of ``NYSE Arca Parent'' in proposed Rule 5.1-E(b)(4) (Definitions) and 
in place of ``Corporation and the NYSE Arca Parent'' in Rule 9.18-
E(b)(3) (Doing A Public Business In Options). Similarly, the Exchange 
proposes to use the term ``Exchange'' instead of ``NYSE Arca

[[Page 28165]]

Equities'' in proposed Rule 7.29-E(b)(2)(I).
    The Exchange proposes several changes to remove obsolete references 
in the Equities Rules, as follows:
     NYSE Arca Equities Rule 5.3(k)(4) (Independent Directors/
Board Committees) sets forth two versions of paragraph (k)(4) 
(Compensation Committee). One provides the operative text through June 
30, 2013, and one provides the operative text effective commencing July 
1, 2013. Proposed NYSE Arca Rule 5.3-E(k)(4) would only include the 
text that was operative commencing July 1, 2013.
     Similarly, present NYSE Arca Equities Rule 5.3(n) (Listed 
Foreign Private Issuer) includes two versions of the rule. One provides 
the operative text through June 30, 2013, and one provides the 
operative text effective commencing July 1, 2013. Proposed NYSE Arca 
Rule 5.3-E(n) would only include the text that was operative commencing 
July 1, 2013.
     Present NYSE Arca Equities Rules 7.18(a) (Halts) and 
7.46(f)(5)(C) and (F) (Tick Size Pilot Plan) cross reference Rules 
7.11P, 7.31P(a)(2)(C) and (F), and Rule 7.31P(e), respectively. Because 
the ``P'' modifier has been deleted from such Rules, proposed NYSE Arca 
Rules 7.18-E(a) and 7.46-E(f)(5)(C) and (F) would not include the ``P'' 
modifier in the cross references.\34\
---------------------------------------------------------------------------

    \34\ See Securities Exchange Act Release No. 79079 (October 11, 
2016), 81 FR 71559 (October 17, 2016).
---------------------------------------------------------------------------

     NYSE Arca Equities Rule 7.25 (Crowd Participant Program) 
expired on June 23, 2016. Accordingly, the Exchange proposes not to 
include an equivalent to NYSE Arca Equities Rule 7.25 in the Equities 
Rules. Instead, it would mark proposed Rule 7.25-E as ``Reserved.''
     In proposed Rule 8.203-E(g) (Commodity Index Trust Shares) 
Commentary .03, an obsolete reference to ``PCXE Rule 7.34'' in NYSE 
Arca Equities Rule 8.203(g) would be updated to ``Rule 7.34-E.'' The 
term ``PCXE'' refers to the Pacific Exchange, Inc. The Pacific 
Exchange, Inc. was a predecessor of the Exchange, and so the reference 
is obsolete.
    The Exchange proposes to make the following changes to cross 
references to the Exchange rules within the Equities Rules:
     Rule 4.15-E(d)(9)(G)(i) and (ii) (Other Provisions) 
includes references to ``Rule 6.1(a)(23) of the NYSE Arca Parent.'' The 
Exchange proposes to delete ``of the NYSE Arca Parent'' and revise the 
references to cite subsection (b)(24) instead of (a)(23), as the 
Exchange believes that the current reference is incorrect.\35\
---------------------------------------------------------------------------

    \35\ See note 31, supra.
---------------------------------------------------------------------------

     In Rule 9.18-E(b)(3) (Doing a Public Business in Options) 
the text ``Rules of the Corporation and the NYSE Arca Parent'' would be 
changed in the proposal to ``Rules of the Exchange.''
     In Rule 9.20-E(a) (Transactions for Public Customers) 
``NYSE Arca Parent Rule 6.35'' would be changed in the proposal to 
``Rule 6.35-O.''
Amendments That Are Approved but Not Yet Operative
    NYSE Arca Equities Rules 7.10, 7.11, 7.31, and 7.35 have a notice 
stating that an amended version of the rule has been approved but is 
not yet operative. The notices include links to the amended version of 
the rule and the relevant approval order. The notices and links would 
be retained in proposed rules 7.10-E (Clearly Erroneous Executions), 
7.11-E (Limit Up--Limit Down Plan and Trading Pauses in Individual 
Securities Due to Extraordinary Market Volatility), 7.31-E (Orders and 
Modifiers), and 7.35-E (Auctions). Exhibit 5C sets forth the proposed 
text of the amended but not yet operative versions of such rules. The 
Exchange will announce by Trader Update when the amended version of the 
rule will become operative.

E. Disciplinary and Miscellaneous Rules

    Proposed revised Rules 10, 11, 12, 13, and 14, which would apply to 
both the equities and options markets, would incorporate changes based 
on NYSE Arca Equities 10 (Disciplinary Proceedings, Other Hearings, and 
Appeals), 6 (Business Conduct), 12 (Arbitration), 11 (Cancellation, 
Suspension and Reinstatement), 13 (Liability of Directors and 
Corporation) and 5220. The proposed changes to each rule are addressed 
in turn below.
Rule 10 (Disciplinary Proceedings and Appeals)
    The Exchange proposes to revise Rule 10 to incorporate NYSE Arca 
Equities Rule 10 (Disciplinary Proceedings, Other Hearings, and 
Appeals), which sets forth the equivalent requirements for ETP Holders. 
As a result, a single set of rules would encompass all disciplinary 
proceedings and appeals. As described below, to implement the change, 
the Exchange proposes to amend the title of Rule 10 to ``Disciplinary 
Proceedings, Other Hearings and Appeals,'' add one new rule, and amend 
the existing rules.
Proposed New Rule
    The Exchange proposes to incorporate the entire text of current 
NYSE Arca Equities Rule 10.10 (Miscellaneous Provisions) into new Rule 
10.10 (Miscellaneous Provisions), which would provide that any charges, 
notices or other documents may be served upon the Respondent either 
personally or by leaving the same at Respondent's place of business or 
by deposit in the United States Post Office, postage prepaid via 
registered or certified mail addressed to the Respondent at its address 
as it appears on the books and records of the Exchange. The current 
text of NYSE Arca Rule 10.10 is marked ``Reserved.''
Proposed Amendments to Rule 10
    The Exchange proposes to add references to ETP Holders to show 
revised Rule 10's applicability to both categories of trading permit 
holders. Accordingly, the following proposed Rules would be updated to 
include references to ``ETP Holder'' and/or ``ETP Holders'' including, 
where appropriate, when referring to person(s) associated with an ETP 
Holder: Rule 10.1(a) and (b) (Disciplinary Jurisdiction); \36\ Rule 
10.2 (Investigations and Regulatory Cooperation); Rule 10.3(c) (Ex 
Parte Communications); Rule 10.4(a) (Complaints); Rule 10.5(d) 
(Hearing); Rule10.6(c) (Offers of Settlement); Rule 10.9(a) (Judgment 
and Penalty); Rule 10.11(a), (b), (d)(3) and (d)(5) (Appeal of Floor 
Citations and Minor Rule Plan Sanctions); Rule 10.12(a), (b), and (g) 
(Minor Rule Plan); Rule 10.14 (Hearings and Review of Decisions by the 
Exchange); and Rule 10.18(a)(2) (Expedited Client Suspension 
Proceeding). Rule 10.18(a)(2) would also include a reference to an 
``associated person of an ETP Holder.''
---------------------------------------------------------------------------

    \36\ The Exchange also proposes to delete a stray parenthetical 
in the first sentence, so that ``Rule 10.1)'' would be ``Rule 
10.1.''
---------------------------------------------------------------------------

    Similarly, the Exchange proposes to add references to the BCC, 
which is the NYSE Arca Equities disciplinary committee,\37\ to Rule 10. 
Accordingly, a definition of the BCC would be added to Rule 10.3(a)(1) 
and the following rules would be updated to include references to the 
BCC \38\: Rule 10.3(a), (c) and (e); Rule 10.4(c); Rule 10.5(a); Rule 
10.6(d), (h), (j) and (k); Rule 10.11(d)(1); Rule 10.12(c) and (d); and 
Rule 10.17(e)(2) (Release of Disciplinary Information Through the 
Public Disclosure Program). In addition,

[[Page 28166]]

subsection (g) of Rule 10.12 would be amended to add ``Business Conduct 
Committee or the'' before ``Ethics and Business Conduct Committee.''
---------------------------------------------------------------------------

    \37\ See NYSE Arca Equities Rule 3.2(b)(1) (Equity Committees) 
and proposed new Rule 3.2(b)(2).
    \38\ Throughout the rules, when adding ``BCC'' or ``Business 
Conduct Committee'' to a rule, the Exchange would utilize a comma, 
``and'' or ``or'' as necessary to integrate it into the text.
---------------------------------------------------------------------------

    The Exchange proposes to make the following additional changes to 
Rule 10:
     In the first sentence of Rule 10.1, the Exchange proposes 
to make the following non-substantive changes: ``on the Exchange'' 
would be amended to ``of the Exchange,'' and ``or policy or procedure'' 
would be amended to ``or any policy of procedure.'' In Rule 10.1(b), 
the Exchange proposes to change the semicolon after ``such 
termination'' to a comma.
     A new Commentary .02 would be added to Rule 10.3 that 
would provide that a disciplinary proceeding will be considered to be 
pending from the date that Complaint has been issued pursuant to Rule 
10.4 until the proceeding, including any appeals, becomes final. This 
is the same text as in current NYSE Arca Equities Rule 10.3.
     The Exchange notes that proposed Rule 10.5 differs from 
the current NYSE Arca Equities version in two respects. First, current 
NYSE Arca Rule 10.5 requires the EBCC to appoint three or more members 
to hear a matter. NYSE Arca Equities Rule 10.5 requires the BCC to 
appoint one or more. The Exchange determined to retain the three person 
NYSE Arca requirement in proposed Rule 10.5, which is consistent with 
the disciplinary rules of its affiliates NYSE and NYSE MKT.\39\
---------------------------------------------------------------------------

    \39\ See NYSE and NYSE MKT Rule 9231(b)(1), which requires a 
hearing Panel to be composed of a Hearing Officer and two panelists.
---------------------------------------------------------------------------

     In subsections (a) and (k) of proposed Rule 10.6, 
references to the ``Department of Enforcement'' would be shortened to 
``Enforcement.''
     Rule 10.8 (Review) would be amended as follows.
     First, subsection (b) would incorporate text from NYSE 
Arca Equities Rule 10.8(b) requiring a decision of the Review Board (as 
defined therein) to become final 15 calendar days after notifying the 
parties and that the decision would be stayed pending a request for 
review of such determination by the NYSE Arca Board of Directors filed 
pursuant Rule 10.8(c) or 10.8(d). The proposed change would add clarity 
to the current rule by specifying that a Board review stays a 
determination from becoming final. The second and third paragraphs of 
subsection (b) would be amended to replace ``Board of Directors'' with 
``CFR,'' which is the Board committee with the delegated authority to 
consider appeals on behalf of the Board and which appoints the Review 
Board under the Rule. As such, the proposed change would add clarity 
and transparency to the Exchange's Rules by specifying that the CFR, 
and not the full Board, would be acting with respect to the Review 
Board. In the third paragraph, the Exchange would also add ``or her'' 
before ``duties.''
     Second, paragraph (c) would be amended to incorporate text 
from current NYSE Arca Equities Rule 10.8(c), permitting the 
Complainant or Respondent to request review of a decision by the NYSE 
Arca Board of Directors and establishing the requirements for 
initiating such a review. ``NYSE Arca Board'' would be replaced with 
``Board of Directors'' as ``NYSE Arca Board'' is not a defined term.
     The Exchange proposes various changes to Rule 10.11. In 
the second sentence of subsection (d)(4), the Exchange proposes the 
non-substantive change of adding the word ``of'' between ``standard'' 
and ``review.'' Subsection (b) would be amended to shorten ``Department 
of Enforcement'' to ``Enforcement.''
     The Exchange proposes various changes to Rule 10.12.
     Subsection (e) would be amended to shorten ``Department of 
Enforcement'' to ``Enforcement.''
     New subsection (i) would incorporate those current NYSE 
Arca Equities trading Rules eligible for minor rule violation treatment 
as set forth in NYSE Arca Equities Rule 10.12(g). The heading would be 
``Minor Rule Plan: Minor Trading Rule Violations.'' Subsection (i) is 
currently marked ``Reserved.''
     Subsection (j) would be amended to add cross references to 
the relevant Equities Rules; add ``ETP Holder's or'' before ``OTP 
Holder'' in (j)(2); add ``filing and/or'' before ``notification'' in 
(j)(4); and add new item (13) to incorporate the provision in NYSE Arca 
Equities Rule 10.12(j)(13).
     The heading of Subsection (k) would be amended to add 
``Options.''
     New subsection (l) would be entitled ``Equities Minor Rule 
Plan: Recommended Fine Schedule'' and incorporate the current NYSE Arca 
Equities Rules eligible for minor rule violation treatment. Fine levels 
and eligible rules would remain the same as current NYSE Arca Equities 
Rule 10.12(i). Proposed subsection (l) reproduces current NYSE Arca 
Equities Rule 10.12(i) in its entirety.
     The word ``--Options'' would be added to the end of the 
titles of Rules 10.13 (Summary Sanction Procedure) and 10.16 (NYSE Arca 
Sanctioning Guidelines). Such rules have no equities analogues and 
would only apply to options matters. In the first sentence of the 
fourth paragraph of Rule 10.16(a), ``Principals'' would be replaced 
with ``Principles.''
     The Exchange proposes various changes to Rule 10.14:
     In subsection (a), ``ETP'' would be added before ``OTP'' 
and a reference to Rule 7.23-E would be added.
     Consistent with NYSE Arca Equities Rule 10.13(a)(5), a new 
subsection (a)(7) would be added to incorporate actions taken by the 
Exchange pursuant to proposed Rule 7.22-E, including the denial of the 
application for, or the termination or suspension of, a Market Maker's 
registration in a security or securities, as eligible for relief under 
Rule 10.14.
     Consistent with NYSE Arca Equities Rule 10.13(a), 
subsection (a) would also be amended to provide that provisions of Rule 
10.14 would not apply to reviews of delisting decisions for which 
review is already provided within Rule 5-E.
     Subsection (l) would be amended to add the Chairperson of 
the committee whose action was subject to the prior review as an 
additional person who can call a decision of the CFR Appeals Panel for 
review, consistent with NYSE Arca Equities Rule 10.13(k).
Rule 11 (Business Conduct)
    The Exchange proposes to revise Rule 11 to incorporate NYSE Arca 
Equities Rule 6 (Business Conduct) and NYSE Arca Equities Rule 5220. To 
implement the change, the Exchange proposes to add three new rules and 
amend the existing rules.
    Proposed New Rules
    The Exchange proposes to import the text of current NYSE Arca 
Equities Rule 6.7 (Trading Ahead of Research Reports) into new proposed 
Rule 11.22 (Trading Ahead of Research Reports) without changes other 
than those made to the entire rulebook.\40\
---------------------------------------------------------------------------

    \40\ See ``Proposed Changes Applicable to Entire Rulebook,'' 
above.
---------------------------------------------------------------------------

    The Exchange proposes to import the text of current NYSE Arca 
Equities Rule 6.9 (Taking or Supplying Securities to Fill Customer's 
Order) into new proposed Rule 11.23 (Taking or Supplying Securities to 
Fill Customer's Order) without changes other than those made to the 
entire rulebook and the use of ``Exchange'' in place of ``facilities of 
the Corporation'' in proposed Rule 11.23(5).
    The Exchange proposes to import the text of current NYSE Arca 
Equities Rule 6.10 (ETP Holders Holding Options)

[[Page 28167]]

into new proposed Rule 11.24 (ETP Holders Holding Options) without 
changes other than those made to the entire rulebook and the use of 
``Exchange'' in place of ``facilities of the Corporation.''
Proposed Amendments to Rule 11
    The Exchange proposes to add references to ETP Holders to show 
revised Rule 11's applicability to both categories of trading permit 
holders. Accordingly, the following proposed rules would be updated to 
include references to ``ETP Holder'' and/or ``ETP Holders'': Rule 11.1 
(Adherence to Law and Good Business Practice); Rule 11.2 (Prohibited 
Acts); Rule 11.3 (Prevention of the Misuse of Material, Nonpublic 
Information); Rule 11.4 (Rumors); Rule 11.5 (Manipulation); Rule 11.6 
(Front-running of Block Transactions); Rule 11.10 (Excessive Trading); 
Rule 11.11 (Disclosure of Financial Arrangements of OTP Holders); Rule 
11.12(a) (Joint Accounts); Rule 11.13 (Disciplinary Action By Other 
Organizations); Rule 11.18 (Supervision); Rule 11.19 (Anti-Money 
Laundering Compliance Program); Rule 11.20 (Miscellaneous Provisions); 
and Rule 11.21(a). Rule 11.21(a) would also include a reference to an 
``associated person of an ETP Holder.''
    Similarly, the heading of Rule 11.11 would be amended to include 
``ETP Holders'' and Rules 11.3 Commentary .02 (Prevention of the Misuse 
of Material, Nonpublic Information), 11.11(a), 11.18(b) and 11.19 would 
be amended to include references to ``ETP Holder's.''
    The Exchange proposes to make the following additional changes to 
Rule 11:
     The Exchange proposes to add a new subsection (g) to Rule 
11.2 that would state that an ETP Holder may not split any order into 
multiple orders for any purpose other than seeking the best execution 
of the entire order, which is the same text as NYSE Arca Equities Rule 
6.2(g).
     The Exchange proposes to make several revisions to 
proposed Rule 11.3. Subsection (a) of proposed Rule 11.3 would be 
amended to replace ``Options Surveillance Department'' with 
``Regulatory staff.'' Subsection (b) would also be amended to delete 
``the'' before ``Enforcement'' and ``Department'' after it. Finally, 
the Exchange proposes to add a new Commentary .04 which has the same 
text as NYSE Arca Equities Rule 6.3 Commentary .04.
     The Exchange proposes to make several revisions to 
proposed Rule 11.6. Rule 11.6 sets 5,000 shares as the threshold for 
when an OTP Holder, OTP Firm or Associated Person must take action 
under the Rule. Because NYSE Arca Equities Rule 6.6 sets a threshold of 
10,000 shares, the Exchange proposes to amend Rule 11.6 by adding 
``(10,000 shares or more in the case of an ETP Holder)'' after ``5,000 
shares or more.'' In addition, the reference to ``Pacific Exchange, 
Inc.'' in Rule 11.6 would be replaced with ``Exchange.'' The Pacific 
Exchange, Inc. was a predecessor of the Exchange, and so the reference 
is obsolete.
     The Exchange proposes to make several changes to proposed 
Rule 11.12. In the last sentence of subsection (a), the phrase ``or 
Market Maker'' would be added after ``specialist,'' and ``or she'' 
after ``he.'' The Exchange proposes to add a new Commentary .01 to 
proposed Rule 11.12, which is the same text as Commentary .01 of NYSE 
Arca Equities Rule 6.12 (Joint Accounts). Finally, the Exchange 
proposes to add the text from NYSE Arca Equities Rule 6.12(b) to a new 
subsection (b) governing ``Reporting.''
     In subsection (a) of Rule 11.18, the Exchange proposes to 
add the text '') and no ETP Holder'' after ``(DEA''. In addition, the 
Exchange proposes to add the text of current NYSE Arca Equities Rule 
6.18(d) and Commentary .01 and .02 to a new subsection (d) and 
Commentary.
Rule 12 (Arbitration)
    The Exchange proposes to revise Rule 12 (Arbitration) to 
incorporate NYSE Arca Equities Rule 12 (Arbitration). To implement the 
change, the Exchange proposes to amend the existing rules as follows.
     Subsections (a) and (c) would be amended to include a 
reference to ``ETP Holder.''
     References to the ``NASD'' in ``NASD Dispute Resolution'' 
and in the defined term ``NASD DR'' would be replaced with ``FINRA.''
    In addition, the Exchange proposes to delete the brackets around 
the title of Rule 12.
Rule 13 (Cancellation, Suspension and Reinstatement)
    The Exchange proposes to revise Rule 13 to incorporate NYSE Arca 
Equities Rule 11 (Cancellation, Suspension and Reinstatement). To 
implement the change, the Exchange proposes to amend the existing 
rules.
    The Exchange proposes to add references to ETP Holders to show the 
revised rules' applicability to both categories of trading permit 
holders. Accordingly, the following rules would be updated to include 
references to ``ETP Holder'' and/or ``ETP Holders'': Rule 13.1 (Notice 
of Expulsion or Suspension); Rule 13.2(a) (Procedures for Suspension); 
Rule 13.3 (Effect of Suspension or Cancellation); Rule 13.4 
(Disciplinary Measures During Suspension); Rule 13.5 (Investigation 
Following Summary Suspension); Rule 13.6 (Grounds for Cancellation); 
Rule 13.7 (Reinstatement); Rule 13.8 (Failure to Obtain Reinstatement); 
and Rule 13.9 (Failure to Meet the Eligibility or Qualification 
Standards or Prerequisites for Access to Services).
    Similarly, the Exchange proposes to add references to ETPs by 
adding ``the ETP or'' in place of ``an'' in the first sentence of Rule 
13.3, and by adding ``ETP or'' before ``OTP'' in Rule 13.8.
    The Exchange proposes to make the following additional changes to 
Rule 13.2:
     In subsection (a), the Exchange proposes to delete ``and'' 
from between ``bars'' and ``limitations,'' as a non-substantive 
grammatical change.
     The Exchange proposes to add the text of NYSE Arca 
Equities Rule 11.2(a)(1)(iii) as new subsection (a)(1)(C) of Rule 13.2. 
The current text of such subsection is marked ``Reserved.''
     The Exchange proposes to delete ``OTP'' before ``trading 
privileges'' in subsection (a)(2)(A), to reflect that the rule would 
apply to both OTP and ETP trading privileges.
     In subsection (a)(2)(B) and (C), the Exchange proposes to 
add a new cross reference to proposed Rule 3.8-E and correct a cross 
reference from Rule 10.2(b) to Rule 10.2(d).
     Subsection (a)(2)(E) provides that the Exchange may 
suspend all trading rights and privileges of an OTP Holder or OTP Firm 
for failure to comply with Rule 3.4. Rule 3.4 was deleted in 2012 at 
the time of the merger of Archipelago Holdings, Inc. into NYSE Group, 
and so the referenced obligations no longer exist.\41\ Accordingly, the 
Exchange proposes to delete subsection (a)(2)(E) as obsolete and 
replace the text with ``Reserved.''
---------------------------------------------------------------------------

    \41\ See Securities Exchange Act Release No. 67435 (July 13, 
2012), 77 FR 42533 (July 19, 2012), note 12. See also Rule 3.4 
(Reserved).
---------------------------------------------------------------------------

     Rule 13.9(c), (e), and (h) would be updated to include 
references to the BCC, the NYSE Arca Equities disciplinary 
committee.\42\
---------------------------------------------------------------------------

    \42\ See NYSE Arca Equities Rule 3.2(b)(1) (Equity Committees) 
and proposed new Rule 3.2(b)(2).
---------------------------------------------------------------------------

Rule 14 (Liability of Directors and Exchange)
    The Exchange proposes to revise Rule 14 to incorporate NYSE Arca 
Equities Rule 13 (Liability of Directors and Corporation).
    The Exchange proposes to add references to ETP Holders to show the

[[Page 28168]]

revised rules' applicability to both categories of trading permit 
holders. Accordingly, the following rules would be updated to include 
references to ``ETP Holder'' and/or ``ETP Holders'': Rules 14.1 
(Liability of Directors), 14.2 (Liability of Exchange), 14.3 (Legal 
Proceedings Against Exchange Directors, Officers, Employees or Agents) 
and 14.4 (Exchange's Costs of Defending Legal Proceedings).
    Rule 14.5 (Deleted) would be deleted, as it is not needed as a 
placeholder.

IV. Fee Schedules

A. Proposed NYSE Arca Equities Fee Schedule

    The Exchange proposes to delete the Equities Fee Schedule from the 
rules of the Exchange, and to adopt the NYSE Arca Equities Fee Schedule 
as the new fee schedule for the Exchange equity market.\43\ The 
proposed NYSE Arca Equities Fee Schedule would be the same as the 
current Equities Fee Schedule, subject to the following changes:
---------------------------------------------------------------------------

    \43\ The Exchange does not propose to amend the fee schedule for 
market data fees, the NYSE Arca Equities Proprietary Market Data 
Fees, which does not reference NYSE Arca Equities, Inc.
---------------------------------------------------------------------------

     The title of the NYSE Arca Equities Fee Schedule would be 
``NYSE Arca Equities Fees and Charges,'' consistent with the title of 
the Options Fee Schedule, which is ``NYSE Arca Options Fees and 
Charges.''
     The references to the current NYSE Arca Equities Rules 
would be amended to cite the proposed NYSE Arca Rules, by adding ``-E'' 
to the proposed rule numbers. In addition, in footnotes 8 and 9, the 
references to NYSE Arca Equities Rules 1.1(c) and 1.1(d) would be 
changed to refer to proposed NYSE Arca Rules 1.1(b) and (c), 
respectively.
     As noted above, NYSE Arca Equities Rule 7.25 expired on 
June 23, 2016, and the Exchange proposes not to include an equivalent 
to NYSE Arca Equities Rule 7.25 in the Equities Rules. Consistent with 
such change, the table under ``NYSE Arca Marketplace: Crowd Participant 
(`CP') Program Payments'' would not be included in the proposed NYSE 
Arca Equities Fee Schedule, as it is also obsolete.
     The heading ``NYSE Arca Equities: Regulatory Fees'' would 
be changed to ``Regulatory Fees.''
     In General Note 1 under the heading ``Co-Location Fees,'' 
the word ``Equities'' in ``NYSE Arca Equities Fee Schedule'' will be 
replaced with ``Options,'' as the Note is meant to refer to the options 
market fee schedule.

B. NYSE Arca Options Fee Schedule

    In the Options Fee Schedule, Note 8 under ``NYSE Arca Options: 
General'' refers to the ``Schedule of Fees and Charges for NYSE Arca 
Equities, Inc.'' General Note 1 under the heading ``Co-Location Fees'' 
refers to the same document as the ``NYSE Arca Equities Fee Schedule.'' 
The Exchange proposes to conform the two references to the name ``NYSE 
Arca Equities Fee Schedule.''
    In addition, the Exchange proposes to update cross references in 
Notes 2, 6, 9 and 15 to reflect the proposed addition of ``-O'' to the 
rule numbers.

C. Listing Fee Schedule

    In the Listing Fee Schedule, the Exchange proposes to update cross 
references in Item 6 under ``Listing Fees''; Item 7 under ``Annual Fee 
(Payable January in Each Calendar Year)''; and Notes 3 and 4 to reflect 
the proposed addition of ``-E'' to the rule numbers.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Exchange Act \44\ in general, and with Section 
6(b)(1) \45\ in particular, in that it enables the Exchange to be so 
organized as to have the capacity to be able to carry out the purposes 
of the Exchange Act and to comply, and to enforce compliance by its 
exchange members and persons associated with its exchange members, with 
the provisions of the Exchange Act, the rules and regulations 
thereunder, and the rules of the Exchange.
---------------------------------------------------------------------------

    \44\ 15 U.S.C. 78f(b).
    \45\ 15 U.S.C. 78f(b)(1).
---------------------------------------------------------------------------

    Specifically, termination of the Delegation would result in the 
Exchange directly operating the equities market facility of the 
Exchange, while continuing to bear the responsibility to ensure the 
fulfillment of its statutory and self-regulatory obligations. As is 
true now, the independent regulatory oversight committee (``ROC'') of 
the Board would oversee the Exchange's regulatory and self-regulatory 
organization responsibilities with regards to both the equities and 
options markets, and the Exchange's regulatory department would 
continue to carry out its regulatory functions with respect to both 
markets under the oversight of the ROC.\46\
---------------------------------------------------------------------------

    \46\ See NYSE Arca Rule 3.3(a)(1). NYSE Arca Equities does not 
have a regulatory oversight committee.
---------------------------------------------------------------------------

    For the same reasons, the Exchange believes that the proposal to 
remove from the Exchange rules the organizational documents of NYSE 
Arca Equities and NYSE Arca Equities Rules 14.1 and 14.3 in connection 
with the proposed termination of the Delegation is also consistent with 
Section 6(b)(1) of the Act.
    The Exchange believes that the proposed amendment to Bylaws Section 
3.01(b) to incorporate the ETP Holders into the existing statement of 
the authority of the Board would also be consistent with Section 
6(b)(1) of the Act. By incorporating the ETP Holders, the limits that 
section sets on the Board's ability to exercise all powers of the 
Exchange and do all lawful acts and things would include those things 
as are not by law, the certificate of incorporation, the Bylaws or the 
Rules directed or required to be exercised, done or approved by ETP 
Holders, as well as the OTP Holders or the holding member.
    Further, the Exchange believes that the proposed rule change would 
be consistent with the fair representation requirement of Section 
6(b)(3) of the Exchange Act,\47\ which is intended to give members a 
voice in the selection of an exchange's directors and the 
administration of its affairs. The proposed changes would ensure that 
all Permit Holders, irrespective of whether they are OTP Holders or ETP 
Holders, would have the same rights to participate in the Nominating 
Committee and the nomination of Non-Affiliated Directors and, in the 
case of a contested nomination, the same voting rights. Such process 
would also be consistent with the process for nominating non-affiliated 
directors of NYSE MKT, which also has both options and equity markets, 
as well as with the governing documents of Nasdaq LLC and Nasdaq 
BX.\48\
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    \47\ See 15 U.S.C. 78f(b)(3).
    \48\ See notes 12 and 14, supra.
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    The Exchange believes that the additional changes to Bylaws Section 
3.02(a) would also allow the Exchange to be so organized as to have the 
capacity to be able to carry out the purposes of the Exchange Act and 
to comply, and to enforce compliance by its exchange members and 
persons associated with its exchange members, with the provisions of 
the Exchange Act, the rules and regulations thereunder, and the rules 
of the Exchange. By clearly stating that the holding member determines 
the size of the Board, presenting the Board composition requirements in 
numbered clauses, and setting forth how the minimum number of Non-
Affiliated directors shall be calculated, the provision would 
contribute to the orderly operation of

[[Page 28169]]

the Exchange by adding clarity and transparency to the Bylaws. Further, 
the proposed amendments would align the provision with the governing 
documents of the SRO Affiliates.\49\
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    \49\ See note 15, supra.
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    Similarly, the Exchange believes that the changes to Bylaws Article 
IV, Section 4.02, which would remove obsolete references to the Permit 
Holder Advisory Committee and add references to the Ethics and Business 
Conduct Committee of the Exchange, and the deletion of Rule 
3.2(b)(2)(C)(i), which is an obsolete reference to the initial 
membership of the Board would contribute to the orderly operation of 
the Exchange by adding clarity and transparency to the Bylaws. 
Similarly, the Exchange believes that removing extraneous references to 
the voting process in the definitions of OTP Holder, OTP Firm and ETP 
Holder would add clarity and transparency to the Rules.
    The Exchange believes that the proposed amendments to Rule 3 
regarding the Board and Exchange Committees would allow the Exchange to 
be so organized as to have the capacity to be able to carry out the 
purposes of the Exchange Act and to comply, and to enforce compliance 
by its exchange members and persons associated with its exchange 
members, with the provisions of the Exchange Act, the rules and 
regulations thereunder, and the rules of the Exchange by ensuring that 
ETP Holders may participate in Exchange and Board Committees. 
Specifically, the proposed changes would ensure that ETP Holders and 
Allied Persons or Associated Persons of ETP Holders would be eligible 
for appointment to Exchange Committee [sic], just as OTP Holders and 
Allied Persons or Associated Persons of an OTP Firm are now. In 
addition, the proposed amendments would integrate the existing NYSE 
Arca Equities Business Conduct Committee into the Exchange rules, 
putting such committee on a par with the existing Ethics and Business 
Conduct Committee for OTP Holders. Similarly, the changes would mean 
that all reviews were conducted by a single CFR, and all CFR decisions 
were subject to the review of the Exchange Board, meaning that all 
Permit Holders were subject to the same rule. Presently, NYSE Arca and 
NYSE Arca Equities have separate CFRs, the NYSE Arca CFR decisions are 
subject to the review of the Exchange Board, and the NYSE Arca Equities 
CFR decisions are subject to the review of the NYSE Arca Equities board 
of directors.
    The Exchange believes that the inclusion of the ETP Holders as well 
as OTP Holders in the Exchange and Board Committees would provide for 
the fair representation of members in the administration of the affairs 
of the Exchange, including rulemaking and the disciplinary process, 
consistent with Section 6(b)(3) of the Exchange Act.\50\ Allowing ETP 
Holders and Allied Persons or Associated Persons of ETP Holders to be 
eligible for appointment to Exchange Committees, putting the NYSE Arca 
Equities disciplinary committee on a par with the Exchange disciplinary 
committee, having reviews conducted by a single CFR, and having those 
decisions subject to the review of the same Board, would provide for 
the fair representation of members in the ``administration of the 
affairs of the exchange,'' including the disciplinary process, 
consistent with Section 6(b)(3) of the Exchange Act.
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    \50\ See 15 U.S.C. 78f(b)(3).
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    The Exchange believes that the integration of its two rulebooks 
into a single rulebook, with three categories of rules, is consistent 
with Section 6(b) of the Exchange Act \51\ in general, and with Section 
6(b)(1) \52\ in particular because the integration and re-organization 
would contribute to the orderly operation of the Exchange by adding 
clarity and transparency to its Rules.
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    \51\ 15 U.S.C. 78f(b).
    \52\ 15 U.S.C. 78f(b)(1).
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    For similar reasons, the Exchange also believes that this filing 
furthers the objectives of Section 6(b)(5) of the Exchange Act \53\ 
because the proposed rule change would be consistent with and would 
create a governance and regulatory structure that 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 mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
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    \53\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the termination of the Delegation would 
be consistent with and facilitate a governance and regulatory structure 
that 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 mechanism of a free and open market and a national market 
system and, in general, to protect investors and the public interest, 
because the resulting structure would allow the Exchange to protect and 
maintain its self-regulatory functions and carry out its regulatory 
responsibilities under the Exchange Act.
    The Exchange believes that the proposed amendments to (a) 
incorporate the ETP Holders into the existing statement of the 
authority of the Board; (b) integrate the ETP Holders into the process 
for appointing members of the Board; (c) have ETP Holders and Allied 
Persons or Associated Persons of ETP Holders be eligible for 
appointment to Exchange Committees; (d) integrate the existing NYSE 
Arca Equities Business Conduct Committee into the Exchange rules; and 
(e) have all reviews conducted by a single CFR would 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, because all Permit Holders would be subject to the same 
rules, irrespective of whether they were ETP Holders or OTP Holders. In 
addition, having the organization and administration rules for both the 
equities and options markets in the same Bylaws and Rule 3 would 
simplify and streamline the Exchange's rules, as persons subject to the 
Exchange's jurisdiction, regulators, and the investing public would not 
have to look at two separate sets of governing documents and 
organization and administration rules in order to fully understand the 
Exchange's markets.
    The Exchange believes that the proposed deletion of the 
organizational documents of NYSE Arca Equities from the Exchange rules 
as well as NYSE Arca Equities Rules 14.1 and 14.2 in connection with 
the proposed termination of the Delegation would remove impediments to 
and perfect a national market system because it would reduce potential 
confusion that may result from having these documents and Rules 14.1 
and 14.2 remain rules of the Exchange following the proposed 
termination of the Delegation, when NYSE Arca Equities would no longer 
have responsibilities to operate the Exchange's equity market.
    Similarly, the Exchange believes that the proposed changes to (a) 
Bylaws Section 3.02(a), which would clearly state that the holding 
member determines the size of the Board, set forth the Board 
composition requirements in numbered clauses, and state how the minimum 
number of Non-

[[Page 28170]]

Affiliated directors shall be calculated; (b) Bylaws Article IV, 
Section 4.02, which would remove obsolete references to the Permit 
Holder Advisory Committee and add references to the Ethics and Business 
Conduct Committee of the Exchange; (c) deletion of Rule 
3.2(b)(2)(C)(i), which would remove an obsolete reference to the 
initial membership of the Board; and (d) removing extraneous references 
to the voting process in the definitions of OTP Holder, OTP Firm and 
ETP Holder in Rule 1 would remove impediments to and perfect a national 
market system by adding clarity and transparency to the Bylaws, 
ensuring that persons subject to the Exchange's jurisdiction, 
regulators, and the investing public can more easily navigate and 
understand the Exchange's governing documents.
    The Exchange believes that the integration of its two rulebooks 
into one single rulebook, with three categories of rules, would remove 
impediments to and perfect a national market system and, in general, 
protect investors and the public interest, by adding clarity and 
transparency to the Bylaws, ensuring that persons subject to the 
Exchange's jurisdiction, regulators, and the investing public can more 
easily navigate and understand the Exchange's rules.
    The Exchange believes that (a) adding an ``-O'' or ``-E'' at the 
end of the number of any rule that applies only to the options or 
equities market, respectively, and (b) adding ``--Equities'' or ``--
Options'' to the end of any rule that, despite being part of a rule of 
general application, only applies to one market, would allow trading 
permit holders and other market participants to quickly and easily 
identify which rules apply to each market, thereby removing impediments 
to and perfecting a national market system and, in general, protecting 
investors and the public interest.
    Similarly, the Exchange believes that (a) incorporating the NYSE 
Arca Equities Conduct Rules into proposed Rule 9-E and Rule 11.21; (b) 
incorporating the NYSE Arca Equities Order Audit Trail System Rules 
into proposed Rule 6-E; and (c) creating a new NYSE Arca Equities Fee 
Schedule and updating the NYSE Arca Options Fee Schedule and Listing 
Fee Schedule would remove impediments to and perfect a national market 
system and, in general, protect investors and the public interest, 
because the proposed changes would ensure that all present NYSE Arca 
Equities rules were incorporated into the Exchange rulebook.
    The Exchange believes that the proposed non-substantive changes to 
the rules, including (a) deleting definitions marked ``reserved'' in 
Rule 1; (b) deleting references to the Pacific Exchange Inc. in Rule 
11.6 and proposed Rule 8.203-E(g); and (c) removing obsolete text from 
proposed Rules 3.2(b), 5.3-E, 13.2(a) and 14.5, would remove 
impediments to and perfect a national market system by adding clarity 
and transparency to the Rules by deleting obsolete references or 
correcting minor typographical errors, ensuring that persons subject to 
the Exchange's jurisdiction, regulators, and the investing public can 
more easily navigate and understand the Exchange's governing documents.

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 Exchange Act. The proposed rule 
change is not designed to address any competitive issue but rather is 
concerned solely with the corporate structure of the Exchange and the 
administration and function of its corporate governance structures.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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-2017-40 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-NYSEArca-2017-40. 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-NYSEArca-2017-40 and should 
be submitted on or before July 11, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\54\
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    \54\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-12770 Filed 6-19-17; 8:45 am]
 BILLING CODE 8011-01-P