[Federal Register Volume 82, Number 152 (Wednesday, August 9, 2017)]
[Notices]
[Pages 37245-37247]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16737]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-81303; File No. SR-NYSEArca-2017-83]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Rule 7.37

August 3, 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 July 26, 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

    The Exchange proposes to [sic] Rule 7.37 (Order Execution and 
Routing). The proposed rule change is available on the Exchange's Web 
site at www.nyse.com, at the principal office of the Exchange, and at 
the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend Rule 7.37 (Order Execution and 
Routing) to reflect changes to how the Exchange would process MOC/LOC 
Orders \4\ routed to NYSE American LLC (``NYSE American'').\5\ Rule 
7.37(b)(7)(C) provides that the Exchange rejects requests to cancel or 
to reduce in size a Market-on-Close Order (``MOC Order'') or a Limit-
on-Close Order (``LOC Order'') in NYSE-listed securities or NYSE MKT-
listed securities (``NYSE American-listed securities'') \6\ that is 
electronically entered after the time specified in NYSE Rules [sic] 
123C(3)(b) and NYSE MKT Rule 123C(3)(b)--Equities (``NYSE American Rule 
123C(3)(b)--Equities'') \7\ and Supplementary Material .40 to those 
rules.\8\
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    \4\ A Market-on-Close Order is a Market Order that is to be 
traded only during the Closing Auction and a Limit-on-Close Order is 
a Limit Order that is to be traded only during the Closing Auction. 
See Rule 7.31(c)(3) and (4). If the Exchange does not conduct a 
closing auction in a UTP Security, the Exchange routes MOC/LOC 
Orders in such a UTP Security to the primary listing market. See 
Rule 7.34(c)(2)(B).
    \5\ On July 24, 2017, the Exchange's affiliate, NYSE MKT LLC, 
transitioned to the Pillar trading platform and was renamed NYSE 
American LLC. See Securities Exchange Act Release Nos. 79242 
(November 4, 2016), 81 FR 79081 (November 10, 2016) (SR-NYSEMKT-
2016-97); 79400 (November 25, 2016), 81 FR 86750 (December 1, 2016) 
(SR-NYSEMKT-2016-103); 80283 (March 21, 2017), 82 FR 15244 (March 
27, 2017) (SR-NYSEMKT-2017-14); and 80748 (May 23, 2017), 82 FR 
24764 (May 30, 2017) (SR-NYSEMKT-2017-20).
    \6\ See supra, note 5.
    \7\ See supra, note 5.
    \8\ NYSE Rule 123C(3)(b) and NYSE American Rule 123C(3)(b)--
Equities provide that between 3:45 p.m. and 3:58 p.m., MOC, LOC and 
CO Orders may be cancelled or reduced in size to correct a 
legitimate error, and NYSE Rule 123C(3)(c) and NYSE American Rule 
123C(3)(c)--Equities provide that MOC, LOC and CO Orders may not be 
cancelled or adjusted for any reason after 3:58 p.m. unless there is 
an Extreme Order Imbalance at or Near the Close, as provided in NYSE 
Rule 123C(9) and NYSE American Rule 123C(9)--Equities. Accordingly, 
between 3:45 p.m. and 3:58 p.m., NYSE and NYSE American accept 
requests to cancel MOC and LOC Orders.
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    The Exchange proposes to amend Rule 7.37(b)(7)(C) to provide that 
the Exchange would no longer reject requests to cancel or reduce in 
size MOC/LOC Orders in NYSE American-listed securities. The Exchange is 
enhancing functionality to coincide with the recent migration of NYSE 
American to the Pillar trading system. On Pillar, NYSE American no 
longer processes MOC or LOC Orders under NYSE American Rule 123C--
Equities and instead processes such orders under NYSE American Rule 
7.35E.\9\ Because NYSE American will systemically enforce its 
requirements by rejecting requests to cancel or requests to cancel

[[Page 37246]]

and replace \10\ a MOC or LOC Order in an NYSE American-listed 
security, the Exchange will no longer need to monitor the trading 
behavior on NYSE American. As a result, the Exchange proposes to accept 
and route all requests to cancel or reduce in size MOC/LOC Orders in 
NYSE American-listed securities, regardless of the time. The Exchange 
believes that the proposed changes would provide transparency regarding 
how requests to cancel orders or reduce in size would be processed on 
the Exchange.
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    \9\ NYSE American Rule 7.35E(d)(2)(B) provides that when the 
Closing Auction Imbalance Freeze begins, NYSE American will reject 
requests to cancel and requests to cancel and replace MOC Orders and 
LOC Orders.
    \10\ On the Pillar trading system, to reduce the size of an 
order, an ETP Holder submits a request to cancel a portion of the 
order.
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    Because of technology changes associated with this proposed rule 
change, the Exchange will announce the implementation date by Trader 
Update, which the Exchange anticipates will be in the third quarter of 
2017.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\11\ in general, and 
furthers the objectives of Section 6(b)(5),\12\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    Specifically, the Exchange believes that the proposed rule change 
would promote just and equitable principles of trade, and remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system by allowing the Exchange to accept and route 
requests to cancel or reduce in size MOC Orders and LOC Orders in NYSE 
American-listed securities regardless of the time. The Exchange 
believes that the proposed change would remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system because now that NYSE American has transitioned to Pillar, NYSE 
American systemically enforces whether it accepts a request to cancel 
or reduce in size a MOC or LOC Order, and the Exchange would no longer 
need to monitor this functionality.
    The Exchange further believes that the proposed amendments to Rule 
7.37(b)(7)(C) would remove impediments to and perfect the mechanism of 
a free and open market and a national market system because the 
proposed changes would provide greater clarity regarding how requests 
to cancel or reduce in size MOC Orders and LOC Orders in NYSE American-
listed securities would be processed by the Exchange, thereby promoting 
transparency and clarity in Exchange rules.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change is not 
designed to address any competitive issue but rather to make amendments 
to Rule 7.37 to reflect differences to how NYSE American processes 
requests to cancel or reduce in size MOC and LOC Orders on the Pillar 
trading system.

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

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

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written 
notice of its intent to file the proposed rule change, along with a 
brief description and the text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \15\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \16\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
stated that NYSE American has transitioned to the Pillar trading 
platform and now systemically enforces whether it accepts a request to 
cancel or reduce in size a MOC or LOC order, so the Exchange no longer 
needs to monitor this functionality. The Exchange also stated that 
waiver of the 30-day operative delay would allow it to implement the 
proposed rule change when the technology supporting the change becomes 
available, which the Exchange anticipates to be less than 30 days after 
the date of this filing. The Commission believes that waiving the 30-
day operative delay is consistent with the protection of investors and 
the public interest. Therefore, the Commission hereby waives the 
operative delay and designates the proposal operative upon filing.\17\
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSEArca-2017-83 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2017-83. This 
file number should be included on the

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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-2017-83 and should be submitted on or before 
August 30, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-16737 Filed 8-8-17; 8:45 am]
BILLING CODE 8011-01-P