
[Federal Register Volume 81, Number 238 (Monday, December 12, 2016)]
[Notices]
[Pages 89529-89531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-29648]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79476; File No. SR-NYSEARCA-2016-159]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Rule 7.46 
to Modify the Web Site Data Publication Requirements Relating To the 
Regulation NMS Plan To Implement a Tick Size Pilot Program

December 6, 2016.
    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 30, 2016, NYSE Arca, Inc. (the ``Exchange'' or 
``NYSE Arca'') 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 amend Rule 7.46 to modify the Web site 
data publication requirements relating to the Regulation NMS Plan to 
Implement a Tick Size Pilot Program (``Plan''). 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
    On August 25, 2014, NYSE Group, Inc., on behalf of the Exchange, 
New York Stock Exchange LLC, NYSE MKT LLC, the Bats BZX Exchange, Inc. 
f/k/a BATS Exchange, Inc. (``BZX''), BATS BYX Exchange, Inc. f/k/a BATS 
Y-Exchange, Inc. (``BYX''), Bats EDGA Exchange, Inc., Bats EDGX 
Exchange, Inc., Chicago Stock Exchange, Inc., Financial Industry 
Regulatory Authority, Inc. (``FINRA''), NASDAQ OMX BX, Inc., NASDAQ OMX 
PHLX LLC, and the Nasdaq Stock Market LLC (collectively 
``Participants'') filed with the Commission, pursuant to Section 11A of 
the Act \4\ and Rule 608 of Regulation NMS thereunder,\5\ the Plan to 
Implement a Tick Size Pilot Program.\6\ The Participants filed the Plan 
to comply with an order issued by the Commission on June 24, 2014.\7\ 
The Plan was published for comment in the Federal Register on November 
7, 2014, and approved by the Commission, as modified, on May 6, 
2015.\8\ The Commission approved the Pilot on a two-year basis, with 
implementation to begin no later than May 6, 2016.\9\ On November 6, 
2015, the SEC exempted the Participants from implementing the

[[Page 89530]]

Pilot until October 3, 2016.\10\ Under the revised Pilot implementation 
date, the Pre-Pilot data collection period commenced on April 4, 2016. 
On September 13, 2016, the SEC exempted the Participants from the 
requirement to fully implement the Pilot on October 3, 2016, to permit 
the Participants to implement the pilot on a phased-in basis, as 
described in the Participants' exemptive request.\11\
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    \4\ 15 U.S.C. 78k-1.
    \5\ 17 CFR 242.608.
    \6\ See Letter from Brendon J. Weiss, Vice President, 
Intercontinental Exchange, Inc., to Secretary, Commission, dated 
August 25, 2014.
    \7\ See Securities Exchange Act Release No 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014).
    \8\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 
80 FR 27513 (May 13, 2015) (``Approval Order'').
    \9\ See Approval Order at 27533 and 27545.
    \10\ See Securities Exchange Act Release No. 76382 (November 6, 
2015), 80 FR 70284 (November 13, 2015).
    \11\ See Letter from David S. Shillman, Associate Director, 
Division of Trading and Markets, Commission, to Eric Swanson, EVP, 
General Counsel and Secretary, Bats Global Markets, Inc., dated 
September 13, 2016; see also Letter from Eric Swanson, EVP, General 
Counsel and Secretary, Bats Global Markets, Inc., to Brent J. 
Fields, Secretary, Commission, dated September 9, 2016.
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    The Plan is designed to allow the Commission, market participants, 
and the public to study and assess the impact of increment conventions 
on the liquidity and trading of the common stock of small-
capitalization companies. Each Participant is required to comply, and 
to enforce compliance by its member organizations, as applicable, with 
the provisions of the Plan.
    The Exchange adopted rule amendments to implement the requirements 
of the Plan, including relating to the Plan's data collection 
requirements and requirements relating to Web site data 
publication.\12\ Specifically, with respect to the Web site data 
publication requirements pursuant to Section VII and Appendices B and C 
to the Plan, Rule 7.46(b)(2) provides, among other things, that the 
Exchange shall make the data required by Items I and II of Appendix B 
to the Plan, and collected pursuant to paragraph (b)(2) of Rule 7.46, 
publicly available on the Exchange's Web site on a monthly basis at no 
charge and shall not identify the Trading Center that generated the 
data. Rule 7.46(b)(3)(C), provides, among other things, that the 
Exchange shall make the data required by Item IV of Appendix B to the 
Plan, and collected pursuant to paragraph (b)(3)(A) of Rule 7.46, 
publicly available on the Exchange's Web site on a monthly basis at no 
charge and shall not identify the Trading Center that generated the 
data. Supplementary Material .70 to Rule 7.46 provides, among other 
things, that the requirement that the Exchange or their DEA make 
certain data publicly available on the Exchange's or DEA's Web site 
pursuant to Appendix B and C to the Plan shall commence at the 
beginning of the Pilot Period.
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    \12\ See Securities Exchange Act Release No. 77484 (March 31, 
2016), 81 FR 20024 (April 4, 2016) (Immediate Effectiveness of 
Proposed Rule Change Adopting Requirements for the Collection and 
Transmission of Data Pursuant to Appendices B and C of Regulation 
NMS Plan to Implement a Tick Size Pilot Program) (SR-NYSEARCA-2016-
52); see also Securities Exchange Act Release No. 78814 (September 
12, 2016), 81 FR 63818 (September 16, 2016) (Immediate Effectiveness 
of Proposed Rule Change to Amend Rule 7.46 to Modify Certain Data 
Collection Requirements of the Regulation NMS Plan to Implement a 
Tick Size Pilot Program) (SR-NYSEARCA-2016-124); see also Letter 
from John C. Roeser, Associate Director, Division of Trading and 
Markets, Commission, to Sherry Sandler, Associate General Counsel, 
NYSE Arca, dated April 4, 2016.
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    The Exchange is proposing amendments to Rule 7.46(b)(2) (regarding 
Appendix B.I and B.II data) and Rule 7.46(b)(3)(C) (regarding Appendix 
B.IV data), to provide that data required to be made available on the 
Exchange's Web site be published within 120 calendar days following 
month end. In addition, the proposed amendments to Supplementary 
Material .70 to Rule 7.46 would provide that, notwithstanding the 
provisions of paragraphs (b)(2), (b)(3)(C) and (b)(5), the Exchange 
shall make data for the Pre-Pilot period publicly available on the 
Exchange's or DEA's Web site pursuant to Appendix B and C to the Plan 
by February 28, 2017.\13\
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    \13\ With respect to data for the Pilot Period, the requirement 
that the Exchange or their DEA make data publicly available on the 
Exchange's or DEA's Web site pursuant to Appendix B and C to the 
Plan shall continue to commence at the beginning of the Pilot 
Period. Thus, the first Web site publication date for Pilot Period 
data (covering October 2016) would be published on the Exchange's or 
DEA's Web site by February 28, 2017, which is 120 days following the 
end of October 2016.
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    The purpose of delaying the publication of the Web site data is to 
address confidentiality concerns by providing for the passage of 
additional time between the market information reflected in the data 
and the public availability of such information.\14\
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    \14\ See supra note 10.
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    The proposed rule change also will provide that, with respect to 
Appendix C data, The Corporation, as DEA, shall collect the data 
required by Item I of Appendix C to the Plan for those ETP Holders that 
are Market Makers for which the Corporation is DEA, and on a monthly 
basis transmit such data, categorized by the Control Group and each 
Test Group, to the SEC in a pipe delimited format. The Corporation, as 
DEA, shall also make the data collected pursuant to subparagraph (4) of 
Rule 7.46(b) available to FINRA for aggregation and publication, 
categorized by the Control Group and each Test Group, on the FINRA Web 
site pursuant to FINRA Rules.\15\ The Corporation is proposing such an 
amendment in order to add a provision in its rules to comply with such 
requirement and provision in the Plan.\16\
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    \15\ FINRA will make this data publicly available on the FINRA 
Web site within 120 calendar days following month end at no charge 
and will not identify the Market Makers that generated the data or 
the individual securities. See FINRA Rule 6191(b)(4).
    \16\ See Section VII of the Plan.
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    Finally, the Corporation is proposing an amendment to Rule 
7.46(b)(5) (regarding data described in Item III of Appendix B) to add 
a provision identical to Rule 7.46(b)(2) (as amended above pursuant to 
the proposed changes described above to such Rule), which shall require 
the Corporation to make the data described in Item III of Appendix B 
publicly available on the Corporation Web site within 120 calendar days 
following month end at no charge and shall not identify the ETP Holder 
that generated the data. The Corporation is proposing such an amendment 
in order to add a provision in its rules to comply with such 
requirement and provision in the Plan.\17\
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    \17\ See supra note 14.
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    As noted in Item 2 of this filing, the Exchange has filed the 
proposed rule change for immediate effectiveness and has requested that 
the Commission waive the 30-day operative delay. If the Commission 
waives the 30-day operative delay, the operative date of the proposed 
rule change will be the date of filing.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\18\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\19\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, 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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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that this proposal is consistent with the Act 
because it is designed to assist the Participants in meeting their 
regulatory obligations pursuant to the Plan and is in furtherance of 
the objectives of the Plan, as identified by the SEC. The Exchange 
believes that the instant proposal is consistent with the Act in that 
it is designed to address confidentiality concerns by permitting the 
Exchange to delay Web site publication to provide for passage of 
additional time between the market information reflected in the data 
and the public availability of such information.

[[Page 89531]]

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 
notes that the proposed rule change implements the provisions of the 
Plan, and is designed to assist the Participants in meeting their 
regulatory obligations pursuant to the Plan.
    The proposal is intended to address confidentiality concerns that 
may adversely impact competition, especially for Pilot Securities that 
may have a relatively small number of designated Market Makers, by 
permitting the Exchange to delay Web site publication to provide for 
passage of additional time between the market information reflected in 
the data and the public availability of such information. The Exchange 
notes that the proposal does not alter the information required to be 
submitted to the SEC.

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

    Because the foregoing 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 for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) \20\ of the Act and Rule 19b-
4(f)(6) thereunder.\21\
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \22\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\23\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has filed 
the proposed rule change for immediate effectiveness and has requested 
that the Commission waive the requirement that the proposed rule change 
not become operative for 30 days after the date of the filing so that 
it may become operative immediately.
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    \22\ 17 CFR 240.19b-4(f)(6).
    \23\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange notes that the proposed rule change implements the 
provisions of the Plan, and is designed to assist the Participants in 
meeting their regulatory obligations pursuant to the Plan. The proposal 
is intended to address confidentiality concerns by permitting the 
Exchange to delay Web site publication to provide for passage of 
additional time between the market information reflected in the data 
and the public availability of such information. The proposal also does 
not alter the information required to be submitted to the SEC.
    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to implement proposed changes that 
are intended to address confidentiality concerns. The Commission notes 
that some Pilot data was scheduled to be published on November 30, 
2016. Therefore, the Commission hereby waives the 30-day operative 
delay and designates the proposed rule change to be operative as of 
November 30, 2016.\24\
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    \24\ 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.\25\ If the 
Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule should be approved 
or disapproved.
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    \25\ 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2016-159 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-2016-159. 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 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-2016-159, and 
should be submitted on or before January 3, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\26\
Eduardo A. Aleman,
Assistant Secretary.
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    \26\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2016-29648 Filed 12-9-16; 8:45 am]
 BILLING CODE 8011-01-P


