
[Federal Register Volume 78, Number 227 (Monday, November 25, 2013)]
[Notices]
[Pages 70380-70382]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28159]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70899; File No. SR-NYSEMKT-2013-94]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Revising Rule 
61(a)(iii)--Equities To Harmonize the Existing Rule Text With the 
Recent Amendment to the CTA Plan, and Concordant Change to the Nasdaq 
UTP Plan, Which Provides That Odd-Lot Transactions Are To Be Reported 
On the Consolidated Tape

November 19, 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 November 12, 2013, NYSE MKT LLC (the ``Exchange'' or 
``NYSE MKT'') 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 revise Rule 61(a)(iii)--Equities to 
harmonize the existing rule text with the recent amendment to the CTA 
Plan (and concordant change to the Nasdaq UTP Plan) which provides that 
odd-lot transactions are to be reported on the Consolidated Tape. 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, on the 
Commission's Web site at http://www.sec.gov, 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 70381]]

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 purpose of the proposed change to Rule 61(a)(iii)--Equities is 
to harmonize the existing rule text with the recent amendment to the 
CTA Plan (and concordant change to the Nasdaq UTP Plan) which provides 
that odd-lot transactions are to be reported on the Consolidated Tape.
    On September 9, 2013, the various exchanges that comprise the 
Consolidated Tape Association (``CTA''), including the Exchange, filed 
with the Commission a proposal to amend the Second Restatement of the 
CTA Plan (``CTA Plan'') to remove odd-lot transactions from the list of 
transactions that are not to be reported for inclusion on the 
Consolidated Tape (the ``Amendment'').\4\ The rationale for the 
Amendment is that odd-lot transactions account for a not insignificant 
percentage of trading volume, and that including odd-lot transactions 
on the Consolidated Tape would add post-trade transparency to the 
marketplace. The Amendment, however, would not include odd-lot 
transactions in the calculation of last sale prices, given that many of 
these transactions do lack economic significance.\5\
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    \4\ See Securities Exchange Release No. 34-70428 (Sept. 17, 
2013), 78 FR 184 (Sept. 28, 2013) (Notice of the Amendment). In 
1974, the Commission declared the original CTA Plan effective. See 
Securities Exchange Release No. 10787 (May 10, 1974), 39 FR 17799. 
The CTA Plan, pursuant to which markets collect and disseminate last 
sale price information for non-NASDAQ listed securities, is a 
``transactional plan'' under Rule 601 of the Securities and Exchange 
Act (the ``Act''), 17 CFR 242.601, and a ``national market system 
plan'' under Rule 608 under the Act, 17 CFR 242.608.
    \5\ Thus, per the Amendment, odd-lot transactions would not be 
included in calculations of high and low prices and would not be 
subject to the Regulation NMS Plan to Address Extraordinary Market 
Volatility rules, nor would including odd-lot transactions on the 
Consolidated Tape trigger any short sale restrictions or trading 
halts. Odd-lot transactions, however, would be included in 
calculations of daily volume.
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    Consistent with the Amendment to the CTA Plan, the Nasdaq Unlisted 
Trading Privileges Plan (``Nasdaq UTP Plan'') is likewise being 
modified to similarly remove odd-lot transactions from the list of 
transactions that are not to be reported for inclusion on the 
Consolidated Tape.\6\ Pursuant to the NYSE MKT Rule 500--Equities 
Series, the Exchange trades Nasdaq-listed securities, which are subject 
to the Nasdaq UTP Plan, on an unlisted trading privileges basis.
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    \6\ See Nasdaq Announcement at http://www.nasdaqtrader.com/TraderNews.aspx?id=uva2013-6.
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    In early October 2013, both the CTA and Nasdaq announced that, 
subject to approval by the Commission, the release date for the 
proposed Amendment and modified Nasdaq UTP Plan would be December 9, 
2013.\7\ On October 31, 2013, the Commission approved the Amendment.\8\
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    \7\ See CTA Announcement at https://cta.nyxdata.com/cta/popup/news/2385 (``Pursuant to the latest notice on this subject . . . , 
pending regulatory approval we are postponing the October testing 
dates and the implementation which include Odd Lot trade reports to 
the Consolidated Tape. The new release dat[e] will be December 9, 
2013. . . .''). See also Nasdaq Announcement at http://www.nasdaqtrader.com/TraderNews.aspx?id=uva2013-11 (same).
    \8\ See Securities Exchange Release No. 34-70794 (Oct. 31, 2013) 
(``Approval Order'').
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    The Exchange, therefore, proposes to amend Rule 61(a)(iii)--
Equities to conform this rule with both the Amendment and the modified 
Nasdaq UTP Plan. Current Rule 61(a)(iii)--Equities states that ``[a] 
transaction of an amount less than one round lot shall not be published 
to the Consolidated Tape and does not qualify as a last sale.'' To 
harmonize the rule with the Amendment and the revised Nasdaq UTP Plan, 
the Exchange proposes to modify paragraph (a)(iii) of the current rule 
to provide that odd-lot sized transactions would be published to the 
Consolidated Tape, or to the Securities Information Processor accepting 
trade reports in that security, but would still not qualify as last 
sale transactions.\9\
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    \9\ The proposed revision to paragraph (a)(iii) to Rule 61--
Equities would thus read: ``A transaction of an amount less than one 
round lot shall be published to the Consolidated Tape, or to the 
Securities Information Processor accepting trade reports in that 
security, but does not qualify as a last sale.''
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    The Exchange proposes to implement the proposed changes to Rule 
61(a)(iii)--Equities on the same day that the changes to the CTA Plan 
and Nasdaq UTP Plan are effective, which is currently scheduled for 
December 9, 2013.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the requirements of Section 6(b) of the Act,\10\ in general, and 
Section 6(b)(5) of the Act,\11\ in particular, in that it is designed 
to foster cooperation and coordination with persons 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 and not to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change will foster 
cooperation and coordination with persons facilitating transactions in 
securities because the proposed rule change would harmonize Exchange 
rules with the Amendment to the CTA Plan, and with the concordant 
change to the Nasdaq UTP Plan. In addition, 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 by 
providing consistency and additional transparency into securities 
transactions, thus encouraging the proper functioning of the market. 
Increased post-trade transparency would, in turn, protect investors and 
the public interest. Indeed, the Commission's Approval Order concluded 
that ``including odd-lot transactions on the consolidated tape will 
enhance post-trade transparency, as well as price discovery, and 
consequently would further the goals of the Act.'' \12\ The Approval 
Order likewise concludes, and the Exchange agrees, that ``information 
about odd lot transactions would provide important information to 
investors and other market participants and therefore represents a 
positive development in the provision of market data.'' \13\
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    \12\ Approval Order at 5.
    \13\ Id.
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    Finally, the Exchange believes that the proposed rule change does 
not unfairly discriminate among the Exchange's member organizations 
because all members would equally benefit from the additional 
transparency provided by the proposed change.

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
believes that the proposed change adds to the integrity of trading on 
the securities markets by increasing post-trade transparency as well as 
price discovery and, if anything, the level of competition could 
increase as public confidence in the markets is solidified.

[[Page 70382]]

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 \14\ and Rule 19b-4(f)(6) thereunder.\15\ 
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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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission 
may 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. According to the 
Exchange, waiving the 30-day operative delay will enable market 
participants to benefit from the proposed rule change on the same day 
that both plans go into effect. The Exchange believes it would be 
appropriate that the Exchange rules be in conformance with the 
Amendment to the CTA Plan (and the concordant change to the Nasdaq UTP 
Plan) on the date that both changes are to become effective (i.e., on 
December 9, 2013).\18\ Based on the Exchange's statements and the non-
controversial nature of the proposed rule change, the Commission 
believes that waiving the operative delay is consistent with the 
protection of investors and the public interest. Accordingly, the 
Commission hereby grants the Exchange's request and waives the 30-day 
operative delay.\19\
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
    \18\ The Exchange stated that on the event that this rule 
proposal is operative prior to December 9, 2013, the Exchange would 
not implement the proposed rule change until December 9, 2013.
    \19\ For purposes only of waiving the operative delay, 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 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) \20\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \20\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEMKT-2013-94 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-NYSEMKT-2013-94. 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 available publicly. All 
submissions should refer to File Number SR-NYSEMKT-2013-94 and should 
be submitted on or before December 16, 2013.
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    \21\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-28159 Filed 11-22-13; 8:45 am]
BILLING CODE 8011-01-P


