
[Federal Register Volume 78, Number 153 (Thursday, August 8, 2013)]
[Notices]
[Pages 48528-48532]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-19144]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70097; File No. SR-NYSEARCA-2013-77]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change to Amend NYSE Arca Equities Rule 2.100, Which 
Provides for Certain Emergency Powers

August 2, 2013.
    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 22, 2013, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend NYSE Arca Equities Rule 2.100 
(``Rule 2.100''), which provides for certain emergency powers. 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 2.100, which provides for 
certain emergency powers. As explained in more detail below, the 
proposed rule change would amend Rule 2.100 to better delineate the 
self-regulatory organization (``SRO'') functions of the Exchange and 
Affiliated Exchanges during an emergency condition, reflect the 
operational preferences of the industry, reflect the current structure 
of market participant connectivity to and system coding for exchange 
systems, and add NYSE MKT LLC (``NYSE MKT'') to the definition of 
``Affiliated Exchange.''
Current Rule
    In 2009, the Exchange amended Rule 2.100 to provide the Exchange 
with the authority to declare an emergency condition \4\ with respect 
to trading on or through the systems and facilities of the Exchange and 
to act as necessary in the public interest and for the protection of 
investors.\5\ The authority in Rule 2.100 may be exercised when, due to 
an emergency condition, an Affiliated Exchange's systems and facilities 
cannot be utilized. If such an emergency condition is declared, a 
qualified Exchange officer may designate the Exchange to serve as a 
backup facility to receive and process bids and offers and to execute 
orders on behalf of the Affiliated Exchange so that the Affiliated 
Exchange, as an SRO, can remain operational. During such an emergency 
condition, the Exchange also would continue to operate simultaneously. 
Currently, the only Affiliated Exchange with a rule authorizing it to 
designate the Exchange as a back-up trading facility is the New York 
Stock Exchange LLC (``NYSE''), and, to date, NYSE has not invoked the 
rule.\6\
---------------------------------------------------------------------------

    \4\ The definition of ``emergency'' is the one used in Section 
12(k)(7) of the Act and is also used by other exchanges and the 
Securities and Exchange Commission (``Commission''). Section 
12(k)(7) defines an emergency to mean ``(A) a major market 
disturbance characterized by or constituting--(i) sudden and 
excessive fluctuations of securities prices generally, or a 
substantial threat thereof, that threaten fair and orderly markets; 
or (ii) a substantial disruption of the safe or efficient operation 
of the national system for clearance and settlement of transactions 
in securities, or a substantial threat thereof; or (B) a major 
disturbance that substantially disrupts, or threatens to 
substantially disrupt--(i) the functioning of securities markets, 
investment companies, or any other significant portion or segment of 
the securities markets; or (ii) the transmission or processing of 
securities transactions.'' 15 U.S.C. 78l(k)(7).
    \5\ See Securities Exchange Act Release No. 61178 (December 16, 
2009), 74 FR 68434 (December 28, 2009) (SR-NYSEArca-2009-90). The 
text of Rule 2.100 refers to the ``Corporation,'' which is NYSE Arca 
Equities. See NYSE Arca Equities Rule 1.1(k).
    \6\ See NYSE Rule 49; see also Securities Exchange Act Release 
No. 61177 (December 16, 2009), 74 FR 68643 (December 24, 2009) (SR-
NYSE-2009-105).
---------------------------------------------------------------------------

    Under current Rule 2.100, in the event of an emergency, a qualified 
Exchange officer would have the authority to declare an emergency 
condition with respect to trading on or through the systems and 
facilities of the Exchange. No declaration of an emergency condition 
with respect to trading on or through the systems and facilities of the 
Corporation would be made pursuant to the rule unless (i) there was a 
regional or national emergency that would prevent the Exchange from 
operating normally; and (ii) such declaration was necessary so that the 
securities markets in general, and the Exchange's systems and 
facilities, in particular, could continue to operate in a manner 
consistent with the protection of investors and in pursuit of the 
public interest.
    If an emergency condition were declared with respect to trading on 
or

[[Page 48529]]

through the systems and facilities of an Affiliated Exchange, a 
qualified Exchange officer could designate the Exchange to receive and 
process bids and offers and to execute orders on behalf of such 
Affiliated Exchange. The Affiliated Exchange would halt all trading 
conducted on its systems and facilities and open trading on the systems 
and facilities of the Exchange as soon thereafter as possible, but not 
earlier than at least the next trading day. Any unexecuted orders on 
the Affiliated Exchange's systems and facilities at that time would not 
be transferred to the Exchange's systems and facilities.
    Quotes or orders of Affiliated Exchange-listed securities entered 
or executed on or through the systems and facilities of the Exchange 
following the declaration would be reported to the Consolidated 
Quotation System (``CQS'') as bids or offers or to the Consolidated 
Tape Association (``CTA'') as executions, respectively, made on or 
through the systems and facilities of the Affiliated Exchange. ETP 
Holders would be required to take appropriate actions as instructed by 
the Exchange to accommodate the use of its systems and facilities to 
trade Affiliated Exchange-listed securities.
    Affiliated Participants (which include an Affiliated Exchange's 
members, member organizations, and sponsored participants) would be 
permitted to enter bids and offers and to execute orders on or through 
the systems and facilities of the Exchange, regardless of whether such 
Affiliated Participants were ETP Holders or Sponsored Participants of 
the Exchange when the emergency condition was declared. Bids and offers 
entered pursuant to the rule would be deemed to be bids and offers of 
the Affiliated Exchange. The Exchange would, as needed, designate any 
Affiliated Participants that were not Exchange ETP Holders as temporary 
members. Such temporary members would not be required to meet any of 
the Exchange's membership requirements. The Exchange would, as needed, 
permit Affiliated Participants that did not have sponsored access to 
the Exchange to obtain temporary access through either an existing ETP 
Holder or through an Affiliated Participant that was granted temporary 
membership. For the duration of any such designation, Affiliated 
Participants registered as Designated Market Makers (``DMMs'') on their 
respective Affiliated Exchanges would not be considered DMMs for the 
purposes of the rules of the Affiliated Exchanges, but would be 
considered ``Market Makers'' pursuant to NYSE Arca Equities Rule 7.23 
for the purposes of trading Affiliated Exchange-listed securities on or 
through the systems and facilities of the Exchange. Temporary 
memberships or access granted under the rule would be valid only until 
regular trading resumed on the Affiliated Exchange's systems and 
facilities.
    All trades of Affiliated Exchange-listed securities entered or 
executed on or through the systems and facilities of the Exchange would 
be subject to the NYSE Arca Equities rules governing trading, and such 
rules would be considered the rules of the Affiliated Exchange for the 
purposes of such transactions, with certain exceptions. The rules of 
the Affiliated Exchange governing member firm conduct would continue to 
apply to its Affiliated Participants, including, but not limited to, 
membership requirements and net capital requirements, and the 
Affiliated Exchange's listing requirements for its listed securities 
would continue to apply.
    The surveillance of the trading of Affiliated Exchange-listed 
securities on or through the systems and facilities of the Exchange 
would be conducted by the Exchange on behalf of the listing Affiliated 
Exchange. Affiliated Participants would remain subject to the 
jurisdiction of their Affiliated Exchange for any disciplinary actions 
related to the trading of Affiliated Exchange-listed securities on or 
through the systems and facilities of the Exchange. Violations of NYSE 
Arca Equities rules would be referred to the appropriate Affiliated 
Exchange for prosecution according to its own disciplinary rules. 
Affiliated Participants could not assert as an affirmative defense to 
such prosecution the lack of jurisdiction of the Affiliated Exchange 
over trading of Affiliated Exchange-listed securities on or through the 
systems and facilities of the Exchange.
Events During Superstorm Sandy
    On October 29 and 30, 2012, due to the dangerous conditions that 
developed as a result of Superstorm Sandy, NYSE and NYSE MKT, as well 
as a number of their member organizations located in the tri-state 
area, were unable to open because of the risk of flooding at their 
physical locations. In addition, other broker-dealers and exchanges 
with facilities in the area were also faced with significant staffing 
challenges because the storm conditions prevented personnel from 
getting to work. As a result, it was agreed, after consulting with 
other exchanges, market participants, and Commission staff, and in 
light of concerns over the physical safety of personnel and the 
possibility of technical issues, that all U.S. equities and options 
markets would be closed for those two days.
Proposed Rule Change
    The Exchange proposes to amend Rule 2.100 to more effectively 
delineate the SRO functions of the Exchange and Affiliated Exchanges 
during an emergency condition, reflect the operational preferences of 
the industry, and reflect the current structure of market participants' 
connectivity to and system coding for exchange systems. As described 
above, the current rule contemplates an Affiliated Exchange remaining 
operational during the emergency condition and both the Exchange and 
Affiliated Exchange performing certain SRO functions with respect to 
the same trading activity that would be taking place on the Exchange. 
The Exchange and its affiliates believe that a more practical and 
effective structure would be to have all trading activity occurring on 
the Exchange under its authority, with one exception. The Exchange 
would, on behalf and at the direction of the Affiliated Exchanges, 
disseminate certain primary listing market messages as both Affiliated 
Exchange and Exchange messages so that market participants' systems 
could properly recognize such messages. The Exchange would do so 
beginning on the next trading day following the declaration of the 
emergency condition. All trading volume on the Exchange in Affiliated 
Exchange-listed securities during the emergency condition would be 
reported as Exchange volume, except for volume associated with the 
opening and closing prints in Affiliated Exchange-listed securities, 
which would be deemed Affiliated Exchange volume. The specific 
amendments to achieve these results are described in more detail below.
    The title of Rule 2.100 would be amended to be consistent with NYSE 
Rule 49, and the current text of Rule 2.100(a)(1) would be deleted and 
would be replaced with text that would provide that if a qualified 
Affiliated Exchange officer declares an emergency condition under the 
rules of the Affiliated Exchange, a qualified Exchange officer may 
authorize the Exchange to perform the functions under Rule 2.100. Rule 
2.100 would also provide a short form definition of the term 
``Emergency Condition.'' Rule 2.100(a)(2) would be deleted because the 
rules of the Affiliated Exchange would determine the procedures for the 
declaration of an Emergency Condition. Like the current NYSE Arca rule, 
each Affiliated Exchange's rule would

[[Page 48530]]

provide that no declaration of an Emergency Condition could be made 
unless there was a regional or national emergency (as defined in 
Section 12(k)(7) of the Act) that would prevent the Affiliated Exchange 
from operating normally, and such declaration was necessary so that the 
securities markets, in general, may continue to operate and trading in 
Affiliated Exchange-listed securities, in particular, may continue to 
occur in a manner consistent with the protection of investors and in 
pursuit of the public interest.
    Rule 2.100(a)(3) would be redesignated Rule 2.100(a)(2), and the 
subparagraphs would be redesignated so that the rule text follows a 
consistent convention. Current Rule 2.100(a)(3)(i), which defines 
``emergency,'' would be deleted because the Exchange would rely on the 
definition in the rules of the Affiliated Exchanges. Current Rule 
2.100(a)(3)(ii) would be amended to correct a typo. The term 
``qualified Corporation office'' should be ``qualified Corporation 
officer.'' \7\ Current Rule 2.100(a)(3)(iii) would be amended to add 
NYSE MKT to the definition of ``Affiliated Exchange'' in order to 
provide more robust business continuity planning for NYSE MKT that is 
consistent with NYSE. Current Rule 2.100(a)(3)(iv) would be deleted 
because all references to ``Affiliated Participant'' in the proposed 
rule would be deleted; therefore, it is not necessary to define the 
term.
---------------------------------------------------------------------------

    \7\ The Exchange notes that there is a pending amendment to 
subparagraph(a)(3)(ii). See Securities Exchange Act Release No. 
69850 (June 25, 2013), 78 FR 39352 (July 1, 2013) (SR-NYSEArca-2013-
62).
---------------------------------------------------------------------------

    Rules 2.100(b)(1) and 2.100(b)(2)(i), which include text describing 
how the Affiliated Exchange would halt trading and the Exchange would 
begin receiving and processing bids and offers and executing orders on 
behalf of the Affiliated Exchange beginning on the next trading day, 
would be deleted and replaced with text that more specifically 
describes the steps that each SRO would take upon the declaration of 
the Emergency Condition. Proposed Rule 2.100(b)(1) would provide that 
when an Emergency Condition is declared under paragraph (a), the 
Affiliated Exchange (A) would halt all trading conducted on the 
Affiliated Exchange's systems and facilities and would not route any 
unexecuted orders to the Exchange; (B) would accept cancellations for 
Good `Til Cancelled (``GTC'') orders; \8\ and (C) would purge any 
unexecuted orders from the Affiliated Exchange's own systems and 
facilities as soon as practicable following declaration of the 
Emergency Condition.
---------------------------------------------------------------------------

    \8\ See NYSE Rule 13 and NYSE MKT Rule 13--Equities.
---------------------------------------------------------------------------

    Proposed Rule 2.100(b)(2) would provide that beginning on the next 
trading day following the declaration of the Emergency Condition,\9\ 
the Exchange would, on behalf of and at the direction of the Affiliated 
Exchange, disseminate as messages of both the Affiliated Exchange and 
the Exchange (A) the official opening and closing prices of Affiliated 
Exchange-listed securities to CTA, and (B) notifications to CQS for 
Affiliated Exchange-listed securities of (i) regulatory halts and 
resumption of trading thereafter, (ii) trading pause and resumption of 
trading thereafter, and (iii) Short Sale Price Test trigger and lifting 
thereafter (collectively, ``primary listing market 
notifications'').\10\ The Exchange notes that in the event of an intra-
day declaration of an Emergency Condition, the Affiliated Exchanges 
would manually disseminate primary listing market notifications to CQS. 
Quotes or orders of Affiliated Exchange-listed securities entered on 
the Exchange during the Emergency Condition would be reported to CQS as 
bids or offers of the Exchange, and quotes or orders of Affiliated 
Exchange-listed securities executed on or through the Exchange during 
the Emergency Condition would be reported to CTA as executions of the 
Exchange, except that executions in the opening or closing auctions 
would be reported as Affiliated Exchange volume only in order to avoid 
any double counting.
---------------------------------------------------------------------------

    \9\ The current and proposed disaster recovery plans of the 
Affiliated Exchanges do not enable the intraday failover of their 
respective systems onto the Exchange, including dissemination of 
primary listing market notifications; such technology is only 
available on a next-day basis.
    \10\ See NYSE Rules 123D, 80B, 80C, and 440B and NYSE MKT Rules 
123D--Equities, 80B--Equities, 80C--Equities, and 440B--Equities. 
Each of these types of notifications is a responsibility of the 
primary listing market for the security.
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change would minimize 
the impact of declaring an Emergency Condition because the Exchange 
already trades Affiliated Exchange-listed securities on an unlisted 
trading privileges basis and prints such executions as Exchange or 
``P'' trades.\11\ This arrangement would be compatible with market 
participants' system coding conventions, where orders routed to an 
exchange generally come back as executions from that exchange, unless 
routed out. Thus, quotes and orders in Affiliated Exchange-listed 
securities routed to the Exchange during the Emergency Condition would 
come back to the entering firm as ``P'' executions, rather than ``N'' 
or ``A'' executions, as applicable.\12\ Similarly, the Exchange further 
understands that in order for many market participants' systems to 
recognize the primary listing market notifications, the notifications 
must carry an ``N'' or ``A'' designation, as applicable, to associate 
it with the respective Affiliated Exchange-listed securities. If the 
notifications were disseminated only as ``P'' notifications, they may 
not be properly recognized by these market participants' systems. 
However, other market participants may be able to read such primary 
listing market notifications if disseminated with the ``P'' 
designation. Accordingly, during an Emergency Condition, in order to 
accommodate various market participants' existing technological 
frameworks for the temporary measures addressed in proposed Rule 2.100, 
the Exchange would disseminate the official opening and closing prints 
for Affiliated Exchange-listed securities and primary listing market 
notifications with both ``P'' and ``N'' or ``A'' designations, as 
applicable. When the Exchange disseminates these messages on behalf of 
the Affiliated Exchanges, it will do so in accordance with its own 
rules and procedures for its primary listed securities.\13\ The 
Exchange believes that the proposed rule change offers a practical 
solution that will be compatible with most market participants' current 
system coding, which will allow the proposed rule change to be quickly 
and efficiently implemented and avoid the costs and delays associated 
with system reprogramming.
---------------------------------------------------------------------------

    \11\ The ``P'' designation reflects one of the Exchange's 
predecessor names, Pacific Exchange, Inc., before it was purchased 
by NYSE Euronext.
    \12\ The ``N'' designation is for NYSE, and the ``A'' 
designation is for NYSE MKT, reflecting one of NYSE MKT's 
predecessor names, American Stock Exchange LLC, before it was 
purchased by NYSE Euronext
    \13\ Nonetheless, the Affiliated Exchange will remain the SRO 
that is legally responsible for the notifications.
---------------------------------------------------------------------------

    The Exchange believes that maintaining a primary market print for 
an Affiliated Exchange-listed security's official opening price would 
assist market participants that rely on a primary market opening print 
as the basis for trading strategies for that trading day. For example, 
the pricing and valuation of certain indices, funds and derivative 
products require primary market prints. Similarly, private corporate 
transactional contracts involving stock purchases or valuations 
frequently make reference to the primary market print rather than to 
the CTA print. In addition, certain indexes rely on the primary listing 
market

[[Page 48531]]

closing print to calculate the index, and certain funds rely on the 
primary listing market closing print to calculate the fund's value. 
Thus, these market participants would benefit from the dissemination of 
the primary market prints as ``N'' or ``A'' messages, as applicable, 
and not have to engage in any system reprogramming to receive them.
    Rule 2.100(b)(2)(iii) currently provides that ETP Holders are 
required to take appropriate actions as instructed by the Exchange to 
accommodate the use of its systems and facilities to trade Affiliated 
Exchange-listed securities. This text would be deleted because it is 
unnecessary.
    Rule 2.100(b)(3), which provides for certain temporary memberships 
and would deem Affiliated Exchange DMMs that are designated as 
temporary members of the Exchange as Market Makers, would be deleted in 
its entirety. Because all trading would occur under the Exchange's SRO 
via a direct membership as an ETP Holder or indirectly via a service 
bureau that is an ETP Holder, temporary memberships would be 
unnecessary. Upon further review, the Exchange has also determined that 
there would be substantial technological difficulties for Affiliated 
Exchange DMMs to become established during the Emergency Condition as 
Market Makers and comply with NYSE Arca Equities Rule 7.23, as amended 
in 2011.\14\ It also would be technologically impracticable to attempt 
to impose an Affiliated Exchange's DMM requirements in a different 
market and inconsistent with the structure of the proposed rule change. 
If an Affiliated Exchange DMM wanted to be able to act as a Market 
Maker during the Emergency Condition, it would have to apply for and 
obtain such status in advance.
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 64422 (May 6, 
2011), 76 FR 27691 (May 12, 2011) (SR-NYSEArca-2011-26).
---------------------------------------------------------------------------

    Current Rule 2.100(b)(4) states that the Exchange's trading rules 
would apply to all trading on the Exchange during the emergency 
condition and would be deemed Affiliated Exchange rules. Under the 
proposed rule change, this text would be deleted and such trading rules 
would no longer be deemed Affiliated Exchange rules. In addition, this 
paragraph would be redesignated as paragraph (b)(3). To better 
delineate each SRO's authority, and for simplicity and clarity, during 
an Emergency Condition, all trading in Affiliated Exchange-listed 
securities on the Exchange would be subject to the Exchange's rules, 
surveillance, and discipline; as such, current Rule 2.100(b)(5) would 
be deleted. The Exchange would not be acting on behalf of the 
Affiliated Exchange, but rather under its own SRO authority. Thus, if a 
market participant violated an Exchange trading rule while trading on 
the Exchange during an Emergency Condition, it would be subject to 
discipline by the Exchange, not the Affiliated Exchange. The proposed 
rule change also would specify that such Exchange trading rules 
include, but are not limited to, the opening, reopening, and closing 
auction processes applicable to securities for which the Exchange is 
the primary listing market set forth in Rule 7.35--Equities. The 
Exchange's auction processes at the open and close and following a 
trading halt differ from those of its Affiliated Exchanges. However, 
the Affiliated Exchange's listing requirements would continue to apply 
to any Affiliated Exchange-listed security that was trading on the 
Exchange during the Emergency Condition.
    The Exchange also proposes to make typographical corrections to 
Rule 2.100(c).
    The Exchange notes that its affiliates have submitted related rule 
filings. NYSE has submitted a proposed rule change to amend NYSE Rule 
49 to make it consistent with proposed Rule 2.100.\15\ NYSE MKT also 
has submitted a proposed rule change to adopt the text of proposed NYSE 
Rule 49.\16\
---------------------------------------------------------------------------

    \15\ See SR-NYSE-2013-54.
    \16\ See SR-NYSEMKT-2013-66.
---------------------------------------------------------------------------

    The Exchange will announce by Trader Update when the Exchange and 
the Affiliated Exchanges will be ready to implement the proposed rule 
change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\17\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\18\ in particular, because it 
is designed to promote just and equitable principles of trade and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. In addition, the Exchange believes 
that the proposed rule change furthers the objectives of Section 
6(b)(7) of the Act,\19\ in particular, in that it provides fair 
procedures for the disciplining of members \20\ and persons associated 
with members, the denial of membership to any person seeking membership 
therein, the barring of any person from becoming associated with a 
member thereof, and the prohibition or limitation by the Exchange of 
any person with respect to access to services offered by the Exchange 
or a member thereof.
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
    \19\ 15 U.S.C. 78f(b)(7).
    \20\ The Exchange's equivalent to the term ``member'' in this 
context is ``ETP Holder.''
---------------------------------------------------------------------------

    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 
national market system because it offers a practical solution to 
facilitate trading in Affiliated Exchange-listed securities in the 
event of an Emergency Condition and would help to avoid a future 
market-wide closure. All quoting and trading activity in Affiliated 
Exchange-listed securities during the Emergency Condition would be 
deemed Exchange quoting and trading for purposes of CQS and CTA 
reporting and be subject to the Exchange's surveillance and discipline, 
except that the opening and closing prints and primary listing market 
notifications would be disseminated as both Affiliated Exchange and 
Exchange messages so that the majority of market participants' systems 
could properly receive and process them. As such, the proposed rule 
change reflects the operational preferences of the industry and the 
current structure of most member organizations' connectivity to and 
system coding for exchange systems and would reduce the systemic and 
administrative burdens on market participants by avoiding the need for 
reprogramming, depending on which message notifications their 
respective systems would be able to read during such Emergency 
Condition. Although market making requirements could not feasibly be 
imposed on DMMs of Affiliated Exchanges trading on the Exchange during 
an Emergency Condition, the Exchange believes that facilitating trading 
on the Exchange in Affiliated Exchange-listed securities under its SRO 
rules would benefit both issuers and investors by providing additional 
liquidity during the Emergency Condition.
    The Exchange also believes that the proposed rule change would 
remove impediments to and perfect the mechanism of a free and open 
market and national market system because it would assist market 
participants that rely on or reference a primary market opening print 
in their trading strategies or private corporate transactional 
contracts involving stock purchases or valuations. In addition, certain 
indexes rely on the primary listing market closing print to calculate 
the index and certain funds rely on the primary listing market closing 
print to calculate the

[[Page 48532]]

fund's value. The proposed rule change would assist these market 
participants in performing these functions without requiring them to 
reprogram their systems.
    The Exchange also believes that the proposed rule change would 
promote just and equitable principles of trade and provide for fair 
discipline by better delineating SRO surveillance and disciplinary 
functions. The Exchange believes that it would be more effective for 
the Exchange to discipline market participants under its rules rather 
than having the Affiliated Exchange enforce the Exchange's rules.
    The Exchange believes that adding NYSE MKT to the definition of 
``Affiliated Exchange'' would remove impediments to and perfect the 
mechanism of a free and open market and national market system because 
it would authorize the Exchange to serve as a back-up trading facility 
for NYSE MKT in the event that NYSE MKT declares an emergency condition 
an cannot operate at its physical premises.
    In sum, the Exchange believes that the proposed rule change would 
substantially strengthen business continuity planning for itself and 
its Affiliated Exchanges, thereby benefiting market participants and 
investors generally.

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 
designed to facilitate trading in Affiliated Exchange-listed securities 
on the Exchange during an Emergency Condition and remove certain 
requirements that cannot feasibly be imposed. As such, the Exchange 
believes that the proposed rule change would promote competition for 
the benefit of market participants and investors generally.

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 (i) as the Commission may 
designate up to 90 days of such date 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEARCA-2013-77 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEARCA-2013-77. 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 will also 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 publicly available. All 
submissions should refer to File Number SR-NYSEARCA-2013-77 and should 
be submitted on or before August 29, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
---------------------------------------------------------------------------

    \21\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-19144 Filed 8-7-13; 8:45 am]
BILLING CODE 8011-01-P


