[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Notices]
[Pages 32802-32804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14626]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86300; File No. SR-NYSEArca-2019-46]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.37-
E To Update a Rule Cross Reference

July 3, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 25, 2019, NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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\ 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 7.37-E (Order Execution and 
Routing) to update a rule cross reference. 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,

[[Page 32803]]

set forth in sections A, B, and C below, of the most significant parts 
of such statements.

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

1. Purpose
    The Exchange proposes to amend Rule 7.37-E (Order Execution and 
Routing) to update a rule cross reference.
    Rule 7.37-E(b)(7) provides that electronically-entered requests to 
cancel or reduce in size MOC Orders or LOC orders in New York Stock 
Exchange LLC (``NYSE'') listed securities will be rejected if entered 
after the times specified in NYSE Rules 123C(3)(b) and Supplementary 
Materials .40 to that rule. The NYSE recently amended its rules to 
support the transition of NYSE-listed securities to the Pillar trading 
platform.\3\ Among other things, when NYSE transitions NYSE-listed 
securities to the Pillar trading platform, the NYSE Rule 7.35 Series 
will govern auctions on the NYSE and NYSE Rule 123C will no longer be 
applicable.\4\
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    \3\ See Securities Exchange Act Release No. 85962 (May 29, 
2019), 84 FR 26188 (June 5, 2019) (SR-NYSE-2019-05) (Approval 
Order).
    \4\ The NYSE has announced that, subject to rule approvals, the 
NYSE will begin transitioning NYSE-listed securities to Pillar on 
August 5, 2019, available here: https://www.nyse.com/publicdocs/nyse/markets/nyse/Revised_Pillar_Migration_Timeline.pdf. The NYSE 
will publish by separate Trader Update a complete symbol migration 
schedule.
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    The Exchange proposes to amend Rule 7.37-E(b)(7)(C) to update the 
cross reference to the NYSE rule that will be applicable when NYSE-
listed securities transition to the Pillar trading platform. Instead of 
cross referencing NYSE Rule 123C(3)(b) and Supplementary Material .40 
to that rule, the Exchange proposes to cross reference NYSE Rule 
7.35(a)(7), which defines the term ``Closing Auction Imbalance Freeze 
Time.'' As provided for in NYSE Rule 7.35B(f)(2), the NYSE will begin 
limiting the circumstances when a MOC or LOC Order may be cancelled or 
reduced in size beginning at that Closing Auction Imbalance Freeze 
Time. These NYSE Pillar rules are substantively the same as current 
NYSE Rule 123C(3)(b) as both sets of rules use the same cut-off time 
for when the NYSE begins restricting the circumstances when a MOC or 
LOC Order may be cancelled or reduced in size, i.e., ten minutes before 
the scheduled end of trading.
    The proposed amended rule text will provide as follows (deleted 
text in brackets, new text underlined):

    For MOC Orders or LOC Orders in NYSE listed securities, requests 
to cancel or reduce in size that are electronically entered after 
the ``Closing Auction Imbalance Freeze Time'' specified in NYSE Rule 
7.35(a)(7)[the times specified in NYSE Rule 123C(3)(b) and 
Supplementary Materials .40 to that rule] will be rejected.

    The Exchange also proposes to amend the rule to specify for which 
orders this provision would be applicable. As noted above, the current 
rule provides that the Exchange will reject electronic requests to 
cancel or reduce in size MOC Orders or LOC Orders in NYSE-listed 
securities. Because the Exchange now conducts Closing Auctions in NYSE-
listed securities, the Exchange proposes to amend this text to specify 
that this rule would be applicable to Primary Only MOC/LOC Orders, 
which are defined in Rule 7.31-E(f)(1)(C) as a Primary Only Order, 
i.e., an order that on arrival is routed directly to the primary 
listing market, designated for participation in the primary listing 
market's closing process as a MOC or LOC Order. The Exchange also 
proposes a non-substantive change to add a hyphen between ``NYSE'' and 
``listed.''
    The Exchange will implement these proposed rule changes on the same 
schedule that the NYSE transitions NYSE-listed securities to the Pillar 
trading platform. In other words, the current rule will remain 
operative for NYSE-listed securities until such time that they 
transition to NYSE's Pillar trading platform.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\5\ in general, and 
furthers the objectives of Section 6(b)(5),\6\ 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change to amend Rule 
7.37-E would remove impediments to and perfect the mechanism of a free 
and open market and a national market system because it would update 
the Exchange's rules to cross reference the NYSE rule that would be 
applicable when the NYSE transitions its listed securities to the 
Pillar trading platform. The proposed rule change does not propose any 
new or novel functionality because the NYSE Pillar rules provide for 
the same cut-off time and circumstances for cancelling or reducing in 
size MOC or LOC Orders as provided for in NYSE Rule 123C(3)(b) and 
Supplementary Material .40 to that rule. The Exchange therefore 
believes that the proposed rule change would protect investors and the 
public interest, in general, because it is designed to promote 
transparency and clarity in Exchange rules.
    In addition, the Exchange believes that the proposed rule change to 
specify that this rule provision would be applicable to Primary Only 
MOC/LOC Orders would remove impediments to and perfect the mechanism of 
a free and open market and a national market system because it would 
provide greater specificity that this Rule is only applicable to MOC or 
LOC Orders in NYSE-listed securities that have been routed to the NYSE. 
Because the Exchange now conducts Closing Auctions in NYSE-listed 
securities, this proposed rule change provides transparency that the 
Exchange would not cancel a MOC Order or a LOC Order in an NYSE-listed 
security if such order were intended for a Closing Auction on the 
Exchange.

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 Rule 7.37-E to update a cross reference to the NYSE rule that 
would be applicable when the NYSE transitions its listed securities to 
the Pillar trading platform and to provide greater specificity that the 
rule is intended only for MOC or LOC Orders in NYSE-listed securities 
that are routed to the NYSE. The Exchange therefore believes that the 
proposed rule change is designed to promote transparency and clarity in 
Exchange rules.

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.

[[Page 32804]]

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings under 
Section 19(b)(2)(B) \9\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \9\ 15 U.S.C. 78s(b)(2)(B).
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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-NYSEArca-2019-46 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-2019-46. 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 offices 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-NYSEArca-2019-46, and should be 
submitted on or before July 30, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-14626 Filed 7-8-19; 8:45 am]
 BILLING CODE 8011-01-P