[Federal Register Volume 84, Number 116 (Monday, June 17, 2019)]
[Notices]
[Pages 28119-28120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-12656]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86084; File No. SR-NYSE-2019-33]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 7.31 Relating to the Yielding Modifier

June 11, 2019.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that on June 4, 2019, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 7.31 relating to the Yielding 
Modifier. The proposed rule change is available on the Exchange's 
website 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 7.31(i)(5) relating to the 
Yielding Modifier. The Exchange recently amended its Pillar platform 
trading rules to provide for the Yielding Modifier.\4\ Separately, 
before that proposed rule change was approved, the Exchange filed to 
amend Rule 7.31 to make the Minimum Trade Size (``MTS'') Modifier 
available for additional non-displayed orders.\5\ The Exchange has 
announced that the changes described in both the Yielding Filing and 
the MTS Filing will be implemented on the same day, currently scheduled 
for June 17, 2019.\6\
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    \4\ See Securities Exchange Act Release No. 85158 (February 15, 
2019), 84 FR 5794 (February 22, 2019) (SR-NYSE-2018-52) (Approval 
Order) (``Yielding Filing'').
    \5\ See Securities Exchange Act Release No. 85071 (February 7, 
2019), 84 FR 3843 (February 13, 2019) (SR-NYSE-2019-01) (Notice of 
filing and immediate effectiveness) (``MTS Filing''). Prior to this 
proposed rule change, the MTS Modifier was available only for Limit 
IOC Orders and MPL Orders.
    \6\ See Trader Update dated April 16, 2019, available here: 
https://www.nyse.com/publicdocs/nyse/markets/nyse/Revised_Pillar_Migration_Timeline.pdf.
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    Because the Yielding Filing was filed before the MTS Filing, then-
proposed Rule 7.31(i)(5) did not reflect the change described in the 
MTS Filing to extend the availability of the MTS Modifier to additional 
non-displayed order types. The Exchange now proposes to update a 
reference to the MTS Modifier in Rule 7.31(i)(5)(B)(i) to reflect the 
changes described in the MTS Filing.
    Specifically, Rule 7.31(i)(5)(B)(i) describes the circumstances 
when an Aggressing Yielding Order with a limit price equal to the limit 
price of a same-side resting order could trigger such resting order to 
become an Aggressing Order. Two exceptions are if the contra-side 
resting order is either an MPL-ALO Order or an MPL Order with an MTS 
Modifier.\7\ As described in the Yielding Filing, a contra-side resting 
MPL Order with an MTS Modifier may not be eligible to trade at the 
price of the Yielding Order, which is why neither the Aggressing 
Yielding Order nor the resting order on the same side as the Yielding 
Order will trade.\8\ Because the MTS Modifier will be available to 
additional non-displayed order types and because any order with an MTS 
Modifier would be subject to the same conditions as described in the 
Yielding Filing for MPL Orders with an MTS Modifier, the Exchange 
proposes to amend Rule 7.31(i)(5)(B)(i) to replace the term ``MPL Order 
with an MTS Modifier'' with the term ``order with an MTS Modifier.''
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    \7\ Rule 7.31(i)(5)(B) and subparagraph (i) provide that ``An 
Aggressing Yielding Order to buy (sell) with a limit price equal to 
the limit price of a resting order to buy (sell) will either: (i) 
Trigger such resting order to become an Aggressing Order, unless the 
order to sell (buy) buy is an MPL ALO or MPL Order with an MTS 
Modifier, in which case neither the Yielding Order nor the same-side 
resting order will trade . . . .'' (emphasis added).
    \8\ See Securities Exchange Act Release No. 84806 (December 12, 
2018), 83 FR 64913, 64919 (December 18, 2018) (SR-NYSE-2018-52) 
(Notice of Filing of Yielding Filing).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\9\ in general, and 
furthers the objectives of Section 6(b)(5),\10\ 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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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change to amend Rule 
7.31(i)(5)(B)(i) would remove impediments to and perfect the mechanism 
of a free and open market and a national market system because it would 
update the rule relating to the Yielding Modifier to reflect changes 
made to the MTS Modifier as described in the MTS Filing. The rationale 
for referencing MPL Orders with an MTS Modifier in Rule 
7.31(i)(5)(B)(i), as described in the Yielding Filing, is equally 
applicable to any order with an MTS Modifier: Because of the MTS, such 
order may not be eligible to trade at the price of the Yielding Order. 
Accordingly, to ensure that all orders with an MTS Modifier would be 
treated similarly under these circumstances, the Exchange proposes to 
amend Rule 7.31(i)(5)(B)(i) to replace the term ``MTS [sic] Order with 
an MTS Modifier'' with the term ``order with an MTS Modifier.''

[[Page 28120]]

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed rule change is 
not designed to address any competitive issues, but rather, would 
update the rule relating to Yielding Orders to reflect changes to the 
MTS Modifier as described in the MTS Filing.

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

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

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) \12\ thereunder 
because the proposal does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; and (iii) by its terms, become operative for 30 days 
from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest.\13\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to 
give the Commission written notice of the Exchange's intent to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at least five business days prior to the 
date of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Exchange has satisfied this 
requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \14\ 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 requested that the 
Commission waive the 30-day operative delay period. The Exchange states 
that the proposed rule change would update the rule relating to the 
Yielding Modifier to reflect changes already made to the MTS Modifier 
as described in the MTS Filing. The Commission believes that waiver of 
the 30-day operative delay period is consistent with the protection of 
investors and the public interest and designates the proposed rule 
change operative upon filing.\15\
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    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has 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.\16\ If the 
Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule change should be 
approved or disapproved.
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    \16\ 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NYSE-2019-33 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2019-33. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSE-2019-33 and should be submitted on 
or before July 8, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-12656 Filed 6-14-19; 8:45 am]
BILLING CODE 8011-01-P