Skip to Content

Notice

Self-Regulatory Organizations; NYSEArca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 6.70 to Make the Rule Applicable to All Transactions on the Exchange

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

Start Preamble August 19, 2014.

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 August 11, 2014, New York Stock Exchange LLC (“NYSE” or the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I, II, and III 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.

I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change

The Exchange proposes to proposes to [sic] amend Rule 6.70 to make the rule applicable to all transactions on the Exchange. The text of the proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room.

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

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

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

1. Purpose

The Exchange proposes to amend Rule 6.70 to make the rule applicable to all transactions on the Exchange.

Rule 6.70 currently provides that the price at which a non-electronic order is executed shall be binding notwithstanding that an erroneous report in respect thereto may have been rendered, or no report rendered. The rule further provides that a report shall not be binding if a non-electronic order was not actually executed but was in error reported to have been executed. For example, if a report is issued that an non-electronic execution occurred, when in fact it did not, that report is not binding. This rule is relevant because OTP Holders rely on reports from the Exchange to determine whether they have engaged in a transaction on the Exchange. Commentary .02 to Rule 6.70 further provides that the terms of the rule apply only to transactions occurring on the floor of the Exchange and does not apply to transactions occurring on the NYSE Arca electronic trading system.

The Exchange proposes to amend Rule 6.70 to make it applicable to all reports on the Exchange, including reports relating to transactions occurring on the NYSE Arca electronic trading system. As proposed, if the Exchange issues a report of an electronic transaction to an OTP Holder when in fact that execution did not occur, that report of an execution would not be binding. The Exchange believes the proposed rule change would enable the Exchange to apply the same rule to all reports of executions, regardless of whether it is an electronic transaction. To effect this change, the Exchange proposes to delete the term “non electronic” in the first and second sentences of the rule text and delete Commentary .02 to the rule. The Exchange notes that the proposed rule change would harmonize the rules of the Exchange with the rules of NYSE MKT LLC (“NYSE MKT”), which operates NYSE Amex Options LLC, as well as the rules of the Chicago Board Options Exchange Incorporated (“CBOE”), International Securities Exchange, LLC (“ISE”), BATS Exchange, Start Printed Page 50719Inc. (“BATS”), and Miami International Securities Exchange, LLC (“MIAX”).[4]

2. Statutory Basis

The proposed rule change is consistent with Section 6(b) of the Act,[5] in general, and furthers the objectives of Section 6(b)(5),[6] in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system.

The Exchange believes that the proposed rule change would remove impediments to and perfect the mechanism of a free and open market and national market system and promote a fair and orderly market because it would govern all reports regarding transactions that execute at the Exchange, regardless of whether the transaction occurred on the Floor or electronically. Accordingly, the proposed rule change would remove impediments to and perfect the mechanism of free and open market by ensuring that Rule 6.70 governs all reports similarly, and not just those relating to non-electronic transactions. The proposed rule change would also remove impediments to and perfect the mechanism of a free and open market and national market system because it would promote harmonization among options exchange market rules for rules of similar meaning. Specifically, only the NYSE Arca version of the rule limits its application to non-electronic transactions. By contrast, NYSE MKT and CBOE, which both operate trading floors, do not limit their versions of the same rule to non-electronic transactions. Moreover, options exchanges that only trade electronically have in place similar rules.[7]

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. Rather, the Exchange believes that the proposed rule change is pro-competitive because it would align the Exchange's rules with the rules of other markets, including CBOE, NYSE MKT, ISE and MIAX.

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 Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act [8] and Rule 19b-4(f)(6) thereunder.[9] 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.

A proposed rule change filed under Rule 19b-4(f)(6) [10] normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),[11] the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest.

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) [12] of the Act 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

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-2014-86 This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/​rules/​sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEArca-2014-86, and should be submitted on or before September 15, 2014.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13

Kevin M. O'Neill,

Deputy Secretary.

End Signature End Preamble

Footnotes

1.  15 U.S.C.78s(b)(1).

Back to Citation

4.  See NYSE MKT Rule 958NY, CBOE Rule 6.52, ISE Rule 719, BATS Rule 21.11, and MIAX Rule 522. The Exchange notes that ISE, BATS, and MIAX operate all-electronic options exchanges, accordingly, the rule is not limited on other markets to solely floor-based transactions.

Back to Citation

7.  Supra n. 3.

Back to Citation

8.  15 U.S.C. 78s(b)(3)(A)(iii).

Back to Citation

11.  17 CFR 240.19b-4(f)(6)(iii).

Back to Citation

[FR Doc. 2014-20080 Filed 8-22-14; 8:45 am]

BILLING CODE 8011-01-P