[Federal Register Volume 80, Number 65 (Monday, April 6, 2015)]
[Notices]
[Pages 18473-18490]
[FR Doc No: 2015-07750]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74617; File No. SR-BX-2015-015]

Self-Regulatory Organizations; NASDAQ OMX BX Inc.; Notice of
Proposed Rule Change To Amend and Restate Certain Rules That Govern the
NASDAQ OMX BX Equities Market

March 31, 2015.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on March 20, 2015, NASDAQ OMX BX, Inc. (``Exchange'' or ``BX'')
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 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

    BX proposes to amend and restate certain BX rules that govern the
NASDAQ OMX BX Equities Market in order to provide a clearer and more
detailed description of certain aspects of its functionality. The text
of the proposed rule change is available at nasdaq.cchwallstreet.com,
at the Exchange's principal office, 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, BX 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 these statements may be examined at the places specified in
Item IV below. BX has prepared summaries, set forth in Sections A, B,
and C below, of the most significant aspects 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 and restate certain Exchange rules
that govern the NASDAQ OMX BX Equities Market in order to provide a
clearer and more detailed description of certain aspects of its
functionality. The proposed rule change is responsive to the request of
Commission Chair White that each self-regulatory organization (``SRO'')
conduct a comprehensive review of each order type offered to members,
and how it operates in practice.\3\ The Exchange believes that its
current rules and other public disclosures provide a comprehensive
description of the operation of the NASDAQ OMX BX Equities Market, so
that members and the investing public have an accurate understanding of
its market structure. Nevertheless, the Exchange has concluded that a
restatement of certain rules will further enhance their clarity. In
particular, the Exchange believes that providing

additional examples of order type operation in the rule text will
promote greater understanding of the Exchange's market structure. In
addition, the Exchange notes that certain functionality added to its
market in past years has been described as an ``order type'' but would
be more precisely described as an attribute that may be added to a
particular order. Accordingly, the restated rules will distinguish
between ``Order Types'' and ``Order Attributes,'' while providing a
full description of the Order Attributes that may be attached to
particular Order Types. Except where specifically stated otherwise, all
proposed rules are restatements of existing rules and therefore do not
reflect substantive changes in the rule text or in the operation of the
Exchange.
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    \3\ See Mary Jo White, Chair, Commission, Speech at the Sandler
O'Neill & Partners, L.P. Global Exchange and Brokerage Conference
(June 5, 2014), available at http://www.sec.gov/News/Speech/Detail/Speech/1370542004312.
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General Framework for Rule Restatement
    At present, most of the rules governing Order Types and Order
Attributes are found in Rule 4751 (Definitions). The Exchange is
proposing to restate Rule 4751 as Rule 4701, which is currently not in
use, with certain amended definitions being adopted therein. The
Exchange is also proposing to remove definitions pertaining to Order
Types and Order Attributes and adopt them as separate new Rules 4702
(Order Types) and 4703 (Order Attributes). While the Exchange is also
proposing certain conforming changes to other rules, in subsequent
proposed rule changes the Exchange plans to restate the remainder of
the rules numbered 4752 through 4780 so that they appear sequentially
following Rule 4703.
Definitions
    New Rule 4701 will adopt revised definitions applicable to the Rule
4000 Series of the Exchange rules: \4\
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    \4\ Other definitions in current Rule 4751 are being superseded
by descriptions of Order Types and Order Attributes in Rules 4702
and 4703, or are being eliminated because they are no longer used.
In addition, Rule 4755 (Order Entry Parameters) is being deleted
because the material contained therein is superseded by proposed
Rules 4702 and 4703.
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     The terms ``Best Bid'', ``Best Offer'', ``National Best
Bid and National Best Offer'', ``Protected Bid'', ``Protected Offer'',
``Protected Quotation'', and ``Intermarket Sweep Order'' shall have the
meanings assigned to them under Rule 600 under SEC Regulation NMS; \5\
provided, however, that the terms ``Best Bid'', ``Best Offer'',
``Protected Bid'', ``Protected Offer'', and ``Protected Quotation''
shall, unless otherwise stated, refer to the bid, offer, or quotation
of a market center other than the Exchange. The term ``NBBO'' shall
mean the ``National Best Bid and National Best Offer''.
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    \5\ 17 CFR 242.600.
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     The term ``NASDAQ OMX BX Equities Market,'' or ``System'',
which defines the components of the securities execution and trade
reporting system owned and operated by the Exchange, is being modified
to state that the System includes a montage for ``Quotes'' and
``Orders'', referred to as the ``Exchange Book'', that collects and
ranks all Quotes and Orders submitted by ``Participants''.\6\ The
definition is further being modified to make it clear that data feeds
made available with respect to the System disseminate depth-of-book
data regarding Quotes and ``Displayed'' Orders \7\ and also such
additional information about Quotes, Orders, and transactions within
the System as shall be reflected in the Exchange Rules.
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    \6\ The modified definitions of ``Quotes'' and ``Orders'' are
described below. The term ``Participant'', which is being amended
only to add a clarifying reference to Regulation NMS and to Market
Makers, means an entity that fulfills the obligations contained in
Rule 4611 regarding participation in the System, and includes
Equities ECNs, Market Makers, and Order Entry Firms.
    \7\ As provided in proposed Rule 4703, a Displayed Order is an
Order with a Display Order Attribute that allows its price and size
to be disseminated to Participants.
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     The term ``Quote'' is being modified to make it clear that
a Quote is an Order with Attribution (as defined in Rule 4703) entered
by a Market Maker or Equities ECN for display (price and size) next to
the Participant's MPID in the Exchange Book. Accordingly, all Quotes
are also Orders.
     The definition of the term ``Order'' is being amended to
mean an instruction to trade a specified number of shares in a
specified System Security \8\ submitted to the System by a Participant.
An ``Order Type'' is a standardized set of instructions associated with
an Order that define how it will behave with respect to pricing,
execution, and/or posting to the Exchange Book when submitted to the
System. An ``Order Attribute'' is a further set of variable
instructions that may be associated with an Order to further define how
it will behave with respect to pricing, execution, and/or posting to
the Exchange Book when submitted to the System. The available Order
Types and Order Attributes, and the Order Attributes that may be
associated with particular Order Types, are described in Rules 4702 and
4703.
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    \8\ The definition of a ``System Security,'' which is not being
modified, includes ``any NMS stock, as defined in SEC Rule 600
except securities specifically excluded from trading via a list of
excluded securities posted on www.nasdaqtrader.com.''
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     The term ``ET'' means Eastern Standard Time or Eastern
Daylight Time, as applicable.
     The term ``Market Hours'' is being defined to mean the
period of time beginning at 9:30 a.m. ET and ending at 4 p.m. ET (or
such earlier time as may be designated by the Exchange on a day when
the Exchange closes early). The term ``System Hours'' means the period
of time beginning at 7 a.m. ET and ending at 7 p.m. ET (or such earlier
time as may be designated by the Exchange on a day when the Exchange
closes early). The term ``Pre-Market Hours'' means the period of time
beginning at 7 a.m. ET and ending immediately prior to the commencement
of Market Hours. The term ``Post-Market Hours'' means the period of
time beginning immediately after the end of Market Hours and ending at
7 p.m. ET.\9\
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    \9\ The proposed definition further notes that in certain
contexts, times cited in the Exchange Rules may be approximate.
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     The term ``marketable'' with respect to an Order to buy
(sell) means that, at the time it is entered into the System, the Order
is priced at the current Best Offer or higher (at the current Best Bid
or lower).
     The term ``market participant identifier'' or ``MPID''
means a unique four-letter mnemonic assigned to each Participant in the
System. A Participant may have one or more than one MPID.
     The term ``minimum price increment'' means $0.01 in the
case of a System Security priced at $1 or more per share, and $0.0001
in the case of a System Security priced at less than $1 per share.
     The definition of the term ``System Book Feed'', which
means a data feed for System Securities, is being amended to clarify
that it is the data feed generally known as the BX TotalView ITCH feed.
Order Types
    Proposed Rule 4702 provides that Participants may express their
trading interest in the NASDAQ OMX BX Equities Market by entering
Orders. The NASDAQ OMX BX Equities Market offers a range of Order Types
that behave in the manner specified for each particular Order Type.
Each Order Type may be assigned certain Order Attributes that further
define its behavior. All Order Types and Order Attributes operate in a
manner that is reasonably designed to comply with the requirements of
Rules 610 and 611 under Regulation NMS. Specifically, Orders are
reasonably designed to

prevent trade-throughs of Protected Quotations to the extent required
by Rule 611 under Regulation NMS, and to prevent the display of
quotations that lock or cross Protected Quotations to the extent
required by Rule 610 under Regulation NMS.\10\ Each Order must
designate whether it is to effect a buy, a long sale, a short sale, or
an exempt short sale.
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    \10\ It should be noted that Rule 4613(e), the Exchange's rule
with respect to locked and crossed markets, as adopted pursuant to
Rule 610(d) under Regulation NMS and approved by the Commission,
applies only during Market Hours (approved in Securities Exchange
Act Release No. 59154 (December 23, 2008), 73 FR 80468 (December 31,
2008) (SR-BSE-2008-48)). Note also that Rule 600 under Regulation
NMS defines a ``trade-through'' as ``the purchase or sale of an NMS
stock during regular trading hours, either as principal or agent, at
a price that is lower than a protected bid or higher than a
protected offer.'' ``Regular trading hours'' are defined, in
pertinent part, as ``the time between 9:30 a.m. and 4:00 p.m.
Eastern Time.'' 17 CFR 242.600.
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    Proposed Rule 4702 further provides that the Exchange maintains
several communications protocols for Participants to use in entering
Orders and sending other messages to the System:
     OUCH is an Exchange proprietary protocol.
     RASH is an Exchange proprietary protocol.
     FLITE is an Exchange proprietary protocol.
     FIX is a non-proprietary protocol.
    Except where otherwise stated, all protocols are available for all
Order Types and Order Attributes.
    Upon entry, an Order is processed to determine whether it may
execute against any contra-side Orders on the Exchange Book in
accordance with the parameters applicable to the Order Type and Order
Attributes selected by the Participant and in accordance with the
priority for Orders on the Exchange Book provided in Rule 4757.\11\
Thus, for example, a ``Price to Comply Order'' would be evaluated for
potential execution in accordance with different criteria than a
``Post-Only Order.'' \12\ In addition, the Order may have its price
adjusted in accordance with applicable parameters and may be routed to
other market centers for potential execution if designated as
``Routable.'' \13\ The Order may then be posted to the Exchange Book if
consistent with the parameters of the Order Type and Order Attributes
selected by the Participant. For example, an Order with a ``Time-in-
Force'' of ``Immediate or Cancel'' would not be posted.\14\
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    \11\ Under Rule 4757, the order in which Orders on the Exchange
Book are presented for execution against incoming Orders is
determined first by price (with better priced Orders presented
first). As among equally priced Orders, priority is determined by
Display characteristics and timestamps. Thus, Displayed Orders at a
given price are processed first based on their timestamps, with
earlier Orders processed first. Finally, Orders with a Non-Display
Attribute (including the Non-Displayed portion of an Order with
Reserve Size) are processed based on their respective timestamps.
The Exchange is amending Rule 4757 to make wording changes to
improve the clarity of the rule.
    \12\ These Order Types are described below and in proposed Rule
4702.
    \13\ The Routing Order Attribute is described below, in proposed
Rule 4703, and in current Rule 4758.
    \14\ Available Times-in-Force are described below and in
proposed Rule 4703.
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    Thereafter, as detailed in proposed Rules 4702 and 4703, and
current Rule 4758 (Order Routing), there are numerous circumstances in
which the Order on the Exchange Book may be modified and receive a new
timestamp. The sole instances in which the modification of an Order on
the Exchange Book will not result in a new timestamp are: (i) A
decrease in the size of the Order due to execution or modification by
the Participant or by the System, and (ii) a redesignation of a sell
Order as a long sale, a short sale, or an exempt short sale.\15\
Whenever an Order receives a new timestamp for any reason, it is
processed by the System as a new Order with respect to potential
execution against Orders on the Exchange Book, price adjustment,
routing, reposting to the Exchange Book, and subsequent execution
against incoming Orders, except where otherwise stated. Thus, for
example, if an Order with a ``Pegging'' Order Attribute had its price
changed due to a change in the NBBO,\16\ it would be processed by the
System as a new Order with respect to potential execution, price
adjustment, routing, reposting to the Exchange Book, and subsequent
execution against incoming Orders. An exception to the general rule is
noted in Rule 4703(h) with respect to Orders with ``Reserve Size'' \17\
that have a Routing Order Attribute; such Orders are not routed if
reentered due to a replenishment of the Order's Displayed Size.
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    \15\ Accordingly, there are no circumstances in which an Order
that was previously entered but not displayed on the Exchange Book
would be displayed without also receiving a new timestamp, and thus
no possibility for a Participant to ``jump the queue'' with respect
to other Orders.
     The Exchange is amending Rule 4756 to make it clear that the
redesignation of a sell Order as a long sale, short sale, or exempt
short sale can be done only with respect to Orders entered through
OUCH or FLITE; Orders entered through RASH or FIX would have to be
cancelled and reentered to change their designation. Similarly, Rule
4756 is being amended to clarify that modification of an Order by
the Participant to decrease its size is not possible with respect to
a Pegged Order (including a Discretionary Order that is Pegged).
Such an Order would have to be cancelled and reentered by the
Participant to reduce its size.
    \16\ The Pegging Order Attribute adjusts the price of the Order
based on changes in the NBBO and is described below and in proposed
Rule 4703.
    \17\ The Reserve Size Order Attribute is described below and in
Rule 4703.
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    In addition, the proposed rule notes that all Orders are also
subject to cancellation and/or repricing and reentry onto the Exchange
Book in the circumstances described in Rule 4120(a)(13) (providing for
compliance with Plan to Address Extraordinary Market Volatility) and
Rule 4763 (providing for compliance with Regulation SHO). In all
circumstances where an Order is repriced pursuant to those provisions,
it is processed by the System as a new Order with respect to potential
execution against Orders on the Exchange Book, price adjustment,
routing, reposting to the Exchange Book, and subsequent execution
against incoming Orders. If multiple Orders at a given price are
repriced, the Order in which they are reentered is random, based on the
respective processing time for each such Order; \18\ provided, however,
that in the case of Price to Comply Orders and Post-Only Orders that
have their prices adjusted upon entry because they lock a Protected
Quotation but that are subsequently displayed at their original entered
limit price as provided in Rules 4702(b)(1)(B) and (4)(B),\19\ they are
processed in accordance with the time priority under which they were
previously ranked on the Exchange Book. If an Order is repriced and/or
reentered 10,000 times for any reason, the Order will be cancelled.
This restriction is designed to conserve System resources by limiting
the persistence of Orders that update repeatedly without any reasonable
prospect of execution.
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    \18\ This is the case because when Orders are repriced, multiple
instructions to reprice are sent simultaneously through multiple
System gateways in order to modify the Orders as quickly as possible
and thereby minimize the possibility that they will be disadvantaged
vis-[agrave]-vis newly entered Orders.
    \19\ Governing handling of Price to Comply and Post-Only Orders
when formerly unavailable price levels become available.
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    Proposed Rule 4702 further describes the behavior of each Order
Type. Except where otherwise stated, each Order Type is available to
all Participants, although certain Order Types and Order Attributes may
require the use of a specific protocol. As a result, a Participant
would be required to use that protocol in order to use Order Types and
Order Attributes available through it. Moreover, a small number of
Order Types and Order Attributes are available only to registered
Market Makers in the security for which they are registered.

Price To Comply Order
    The Price to Comply Order is an Order Type designed to comply with
Rule 610(d) under Regulation NMS by having its price and display
characteristics adjusted to avoid the display of quotations that lock
or cross any Protected Quotation in a System Security during Market
Hours. The Price to Comply Order is also designed to provide potential
price improvement. The Exchange does not have a ``plain vanilla'' limit
order that attempts to execute at its limit price and is then posted at
its price or rejected if it cannot be posted; rather, the Price to
Comply Order, with its price and display adjustment features, is one of
the primary Order Types used by Participants to access and display
liquidity in the System. The price and display adjustment features of
the Order Type enhance efficiency and investor protection by offering
an Order Type that first attempts to access available liquidity and
then to post the remainder of the Order at prices that are designed to
maximize their opportunities for execution.
    When a Price to Comply Order is entered, the Price to Comply Order
will be executed against previously posted Orders on the Exchange Book
that are priced equal to or better than the price of the Price to
Comply Order, up to the full amount of such previously posted Orders,
unless such executions would trade through a Protected Quotation. Any
portion of the Order that cannot be executed in this manner will be
posted on the Exchange Book (and/or routed if it has been designated as
Routable).\20\
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    \20\ See Rule 4703(f) and 4758.
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    During Market Hours, the price at which a Price to Comply Order is
posted is determined in the following manner. If the entered limit
price of the Price to Comply Order would lock or cross a Protected
Quotation and the Price to Comply Order could not execute against an
Order on the Exchange Book at a price equal to or better than the price
of the Protected Quotation, the Price to Comply Order will be displayed
on the Exchange Book at a price one minimum price increment lower than
the current Best Offer (for a Price to Comply Order to buy) or higher
than the current Best Bid (for a Price to Comply Order to sell) but
will also be ranked on the Exchange Book with a non-displayed price
equal to the current Best Offer (for a Price to Comply Order to buy) or
to the current Best Bid (for a Price to Comply Order to sell). The
posted Order will then be available for execution at its non-displayed
price, thus providing opportunities for price improvement to incoming
Orders.
    For example, if a Price to Comply Order to buy at $11 would lock a
Protected Offer of $11, the Price to Comply Order will be ranked at a
non-displayed price of $11 but will be displayed at $10.99. An incoming
Order to sell at a price of $11 or lower would execute against the
Price to Comply Order at $11.\21\
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    \21\ Unless the incoming Order was an Order Type that was not
immediately executable, in which case the incoming Order would
behave in the manner specified for that Order Type. For example, in
some circumstances discussed below, a Post-Only Order would be
repriced and posted rather than executing.
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    During Pre-Market Hours and Post-Market Hours, a Price to Comply
Order will be ranked and displayed at its entered limit price without
adjustment. This is the case because the Exchange's rule with respect
to locked and crossed markets, as adopted pursuant to Rule 610(d) under
Regulation NMS and approved by the Commission, applies only during
Market Hours.\22\
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    \22\ See supra n. 10.
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    Depending on the protocol used to enter a Price to Comply Order,
Participants have different options with respect to adjustment of the
Price to Comply Order following its initial entry and posting to the
Exchange Book. Specifically, if a Price to Comply Order is entered
through RASH or FIX, during Market Hours the price of the Price to
Comply Order will be adjusted in the following manner after initial
entry and posting to the Exchange Book (unless the Order is assigned a
Routing Order Attribute that would cause it to be routed to another
market center rather than remaining on the Exchange Book):
     If the entered limit price of the Price to Comply Order
locked or crossed a Protected Quotation and the NBBO changes, the
displayed and non-displayed price of the Price to Comply Order will be
adjusted repeatedly in accordance with changes to the NBBO; provided,
however, that if the quotation of another market center moves in a
manner that would lock or cross the displayed price of a Price to
Comply Order, the prices of the Price to Comply Order will not be
adjusted. For example, if a Price to Comply Order to buy at $11.02
would cross a Protected Offer of $11, the Order will be ranked at a
non-displayed price of $11 but will be displayed at $10.99. If the Best
Offer then moves to $11.01, the displayed price will be changed to $11
and the Order will be ranked at a non-displayed price of $11.01.
However, if another market center then displays an offer of $11
(thereby locking the previously displayed price of the Price to Comply
Order, notwithstanding Rule 610(d) under Regulation NMS), the price of
the Price to Comply Order will not be changed.\23\ The Order may be
repriced repeatedly until such time as the Price to Comply Order is
able to be ranked and displayed at its original entered limit price
($11.02 in the example). The Price to Comply Order receives a new
timestamp each time its price is changed.
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    \23\ This means that, in general, the price of the Price to
Comply Order will move toward, but not away from, its original
entered limit price. Because a Price to Comply Order is removed from
the Exchange Book while it is being repriced, however, it is
possible that the Order's price will move away from its original
entered limit price in the case of a ``race condition'' where the
NBBO changes again while the Order is not on the Exchange Book.
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     If the original entered limit price of the Price to Comply
Order would no longer lock or cross a Protected Quotation, the Price to
Comply Order will be ranked and displayed at that price and will
receive a new timestamp, and will not thereafter be adjusted under this
provision.\24\
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    \24\ Thus, the price of the Order will not move beyond its limit
price.
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    If a Price to Comply Order is entered through OUCH or FLITE, during
Market Hours the price of the Price to Comply Order may be adjusted in
the following manner after initial entry and posting to the Exchange
Book:
     If the entered limit price of the Price to Comply Order
crossed a Protected Quotation and the NBBO changes so that the Price to
Comply Order could be displayed at a price at or closer to its entered
limit price without locking or crossing a Protected Quotation, the
Price to Comply Order may either remain on the Exchange Book unchanged
or may be cancelled back to the Participant, depending on its choice.
For example, if a Price to Comply Order to buy at $11.02 would cross a
Protected Offer of $11, the Order will be ranked at a non-displayed
price of $11 but will be displayed at $10.99. If the Best Offer changes
to $11.01, the Order will not be repriced, but rather will either
remain with a displayed price of $10.99 but ranked at a non-displayed
price of $11 or be cancelled back to the Participant, depending on its
choice. A Participant's choice with regard to maintaining the Price to
Comply Order or cancelling it is set in advance for each port through
which the Participant enters Orders.
     If the entered limit price of the Price to Comply Order
locked a Protected Quotation, the price of the Price to Comply Order
will be adjusted after initial entry only as follows. If the entered
limit price would no longer lock

a Protected Quotation, the Price to Comply Order may either remain on
the Exchange Book unchanged, may be cancelled back to the Participant,
or may be ranked and displayed at its original entered limit price,
depending on the Participant's choice. For example, if a Price to
Comply Order to buy at $11 would lock a Protected Offer of $11, the
Price to Comply Order will be ranked at a non-displayed price of $11
but will be displayed at $10.99. If the Best Offer changes to $11.01,
the Price to Comply Order may either remain with a displayed price of
$10.99 but ranked at a non-displayed price of $11, be cancelled back to
the Participant, or be ranked and displayed at $11, depending on the
Participant's choice. A Participant's choice with regard to maintaining
the Price to Comply Order, cancelling it, or allowing it to be
displayed is set in advance for each port through which the Participant
enters Orders. If the Price to Comply Order is ranked and displayed at
its original entered limit price, it will receive a new timestamp, and
will not thereafter be adjusted under this provision.\25\
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    \25\ Thus, the price of the Order will not move beyond its limit
price.
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    With regard to the foregoing options, it is important to emphasize
that the Price to Comply Order receives a new timestamp whenever its
price is changed, and also receives a new timestamp if the Price to
Comply Order would no longer lock a Protected Quotation and is
therefore displayed at its original entered limit price. Thus, there
are no circumstances under which a Price to Comply Order that
originally locked or crossed a Protected Quotation would ``jump the
queue'' and be displayed at its original entered limit price while
retaining its original time priority. In fact, as discussed throughout
this filing, the Exchange does not offer any functionality that enables
a Participant to ``jump the queue'' by displaying a previously entered
non-displayed Orders without also receiving a new timestamp.\26\
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    \26\ As a result, it is possible that a new Order that is
entered while previously booked Orders are being repriced may be
placed on the Exchange Book ahead of them.
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    The following Order Attributes may be assigned to a Price to Comply
Order. The effect of each Order Attribute is discussed in detail below
with respect to proposed new Rule 4703.
     Price. As described above, the price of the Order may be
adjusted to avoid locking or crossing a Protected Quotation, and may
include a displayed price as well as a non-displayed price.
     Size.
     Reserve Size (available through RASH and FIX only).
     A Time-in-Force other than ``Immediate or Cancel''
(``IOC'').\27\
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    \27\ As discussed below, IOC is a Time-in-Force under which an
Order is evaluated to determine if it is marketable, with unexecuted
shares cancelled. A Price to Comply Order entered with a Time-in-
Force of IOC would be accepted but would be processed as a Non-
Displayed Order with a Time-in-Force of IOC.
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     Designation as an ``ISO''. In accordance with Regulation
NMS, a Price to Comply Order designated as an ISO would be processed at
its entered limit price, since such a designation reflects a
representation by the Participant that it has simultaneously routed one
or more additional limit orders, as necessary, to execute against the
full displayed size of any Protected Quotations that the Price to
Comply Order would lock or cross.
     Routing (available through RASH and FIX only).
     ``Primary Pegging'' and ``Market Pegging'' (available
through RASH and FIX only).
     ``Discretion'' (available through RASH and FIX only).\28\
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    \28\ Primary Pegging, Market Pegging, and Discretion are
discussed below and in proposed Rule 4703.
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     Display. A Price to Comply Order is always displayed,
although, as provided above, it may also have a non-displayed price
and/or Reserve Size.
Price to Display Order
    A ``Price to Display Order'' is an Order Type designed to comply
with Rule 610(d) under Regulation NMS by avoiding the display of
quotations that lock or cross any Protected Quotation in a System
Security during Market Hours. Price to Display Orders are available
solely to Participants that are Market Makers and are always
Attributable.\29\ Like a Price to Comply Order, a Price to Display
Order is another form of priced Order that first accesses available
liquidity and then posts remaining shares, with price adjustment
features similar to those of the Price to Comply Order that provide a
means to post displayed Orders at prices that are designed to maximize
their opportunities for execution.
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    \29\ As described below and in proposed Rule 4703, Attribution
is an Order Attribute that allows for display of the price and size
of an Order next to a Market Maker's MPID. In the current rule, the
Price to Display Order is referred to as the ``Price to Comply Post
Order.'' The fact that this Order Type is Attributable and available
only to registered Market Makers reflects a substantive
clarification to the language of the existing rule.
---------------------------------------------------------------------------

    When a Price to Display Order is entered, if its entered limit
price would lock or cross a Protected Quotation, the Price to Display
Order will be repriced to one minimum price increment lower than the
current Best Offer (for a Price to Display Order to buy) or higher than
the current Best Bid (for a Price to Display Order to sell). For
example, if a Price to Display Order to buy at $11 would cross a
Protected Offer of $10.99, the Price to Display Order will be repriced
to $10.98. The Price to Display Order (whether repriced or not
repriced) will then be executed against previously posted Orders on the
Exchange Book that are priced equal to or better than the adjusted
price of the Price to Display Order, up to the full amount of such
previously posted Orders, unless such executions would trade through a
Protected Quotation. Any portion of the Order that cannot be executed
in this manner will be posted on the Exchange Book (and/or routed if it
has been designated as Routable).\30\
---------------------------------------------------------------------------

    \30\ See Rules 4703(f) and 4758.
---------------------------------------------------------------------------

    During Market Hours, the price at which a Price to Display Order is
displayed and ranked on the Exchange Book will be its entered limit
price if the Price to Display Order was not repriced upon entry, or the
adjusted price if the Price to Comply Order was repriced upon entry,
such that the price will not lock or cross a Protected Quotation.
During Pre-Market Hours and Post-Market Hours, a Price to Display Order
will be displayed and ranked at its entered limit price without
adjustment.
    As is the case with a Price to Comply Order, a Price to Display
Order may be adjusted after initial entry.\31\ Specifically, if a Price
to Display Order is entered through RASH or FIX, during Market Hours
the Price to Display Order may be adjusted in the following manner
after initial entry and posting to the Exchange Book (unless the Order
is assigned a Routing Order Attribute that would cause it to be routed
to another market center rather than remaining on the Exchange Book):
---------------------------------------------------------------------------

    \31\ These adjustments reflect a substantive clarification to
the language of the existing rule.
---------------------------------------------------------------------------

     If the entered limit price of the Price to Display Order
locked or crossed a Protected Quotation and the NBBO changes, the price
of the Order will be adjusted repeatedly in accordance with changes to
the NBBO; provided, however, that if the quotation of another market
center moves in a manner that would lock or cross the price of a Price
to Display Order, the price of the Price to Display Order will not be
adjusted.\32\

For example, if a Price to Display Order to buy at $11.02 would cross a
Protected Offer of $11, the Order will be displayed and ranked at
$10.99. If the Best Offer then moves to $11.01, the displayed/ranked
price will be changed to $11. However, if another market center then
displays an offer of $11 (thereby locking the previously displayed
price of the Price to Display Order, notwithstanding Rule 610(d) under
Regulation NMS), the price of the Price to Display Order will not be
changed. The Order may be repriced repeatedly until such time as the
Price to Display Order is able to be displayed and ranked at its
original entered limit price ($11.02 in the example). The Price to
Display Order receives a new timestamp each time its price is changed.
---------------------------------------------------------------------------

    \32\ This means that, in general, the price of the Price to
Display Order will move toward, but not away from, its original
entered limit price. Because a Price to Display Order is removed
from the Exchange Book while it is being repriced, however, it is
possible that the Order's price will move away from its original
entered limit price in the case of a ``race condition'' where the
NBBO changes again while the Order is not on the Exchange Book.
---------------------------------------------------------------------------

     If the original entered limit price of the Price to
Display Order would no longer lock or cross a Protected Quotation, the
Price to Display Order will be displayed and ranked at that price and
will receive a new timestamp, and will not thereafter be adjusted under
this provision.\33\
---------------------------------------------------------------------------

    \33\ Thus, the price of the Order will not move beyond its limit
price.
---------------------------------------------------------------------------

    If a Price to Display Order is entered through OUCH or FLITE,
during Market Hours the Price to Display Order may be adjusted in the
following manner after initial entry and posting to the Exchange Book:
     If the entered limit price of the Price to Display Order
locked or crossed a Protected Quotation and the NBBO changes so that
the Price to Display Order could be ranked and displayed at a price at
or closer to its original entered limit price without locking or
crossing a Protected Quotation, the Price to Display Order may either
remain on the Exchange Book unchanged or may be cancelled back to the
Participant, depending on the Participant's choice. For example, if a
Price to Display Order to buy at $11.02 would cross a Protected Offer
of $11, the Order will be ranked and displayed at $10.99. If the Best
Offer changes to $11.01, the Price to Display Order will not be
repriced, but rather will either remain at its current price or be
cancelled back to the Participant, depending on its choice. A
Participant's choice with regard to maintaining the Price to Display
Order or cancelling it is set in advance for each port through which
the Participant enters Orders.
    The following Order Attributes may be assigned to a Price to
Display Order:
     Price. As described above, the price of the Order may be
adjusted to avoid locking or crossing a Protected Quotation.
     Size.
     Reserve Size (available through RASH and FIX only).
     A Time-in-Force other than IOC.\34\
---------------------------------------------------------------------------

    \34\ A Price to Display Order entered with a Time-in-Force of
IOC would be processed as a Non-Displayed Order with a Time-in-Force
of IOC.
---------------------------------------------------------------------------

     Designation as an ISO. In accordance with Regulation NMS,
a Price to Display Order designated as an ISO would be processed at its
entered limit price, since such a designation reflects a representation
by the Participant that it has simultaneously routed one or more
additional limit orders, as necessary, to execute against the full
displayed size of any Protected Quotations that the Price to Display
Order would lock or cross.
     Routing (available through RASH and FIX only).\35\
---------------------------------------------------------------------------

    \35\ The availability of routing for Price to Display Orders
reflects a substantive clarification to the language of the existing
rule.
---------------------------------------------------------------------------

     Primary Pegging and Market Pegging (available through RASH
and FIX only).
     Discretion (available through RASH and FIX only).
     Attribution. All Price to Display Orders are Attributable
Orders.
     Display. A Price to Display Order is always displayed (but
may also have Reserve Size).
Non-Displayed Order
    A ``Non-Displayed Order'' is an Order Type that is not displayed to
other Participants, but nevertheless remains available for potential
execution against incoming Orders until executed in full or cancelled.
Thus, the Order Type provides a means by which Participants may access
and/or offer liquidity without signaling to other Participants the
extent of their trading interest. The Order may also serve to provide
price improvement vis-[agrave]-vis the NBBO. Under Regulation NMS, a
Non-Displayed Order may lock a Protected Quotation and may be traded-
through by other market centers.\36\ In addition to the Non-Displayed
Order Type, there are other Order Types that are not displayed on the
Exchange Book. Thus, ``Non-Display'' is both a specific Order Type and
an Order Attribute of certain other Order Types.
---------------------------------------------------------------------------

    \36\ Rule 611 requires exchanges to adopt rules that ``require .
. . members reasonably to avoid . . . [d]isplaying quotations that
lock or cross any protected quotations'' (emphasis added).
Similarly, under Rule 600, a Non-Displayed Order is not a Protected
Quotation because it is not displayed. Accordingly, the definition
of trade-through does not apply to a transaction at a price that is
worse than the price of a Non-Displayed Order. Thus, in opting to
use a Non-Displayed Order, a Participant must balance the benefits
of not disclosing its trading intentions against the loss of trade-
through protection. However, because a Non-Displayed Order may not
itself trade-through a Protected Quotation, as described below, the
System protects against such trade-throughs by repricing and/or
cancelling Non-Displayed Orders that cross or are crossed by a
Protected Quotation.
---------------------------------------------------------------------------

    When a Non-Displayed Order is entered, the Non-Displayed Order will
be executed against previously posted Orders on the Exchange Book that
are priced equal to or better than the price of the Non-Displayed
Order, up to the full amount of such previously posted Orders, unless
such executions would trade through a Protected Quotation. Any portion
of the Non-Displayed Order that cannot be executed in this manner will
be posted to the Exchange Book (unless the Non-Displayed Order has a
Time-in-Force of IOC) and/or routed if it has been designated as
Routable.\37\
---------------------------------------------------------------------------

    \37\ See Rules 4703(f) and 4758.
---------------------------------------------------------------------------

    During Market Hours, the price at which a Non-Displayed Order is
posted is determined in the following manner. If the entered limit
price of the Non-Displayed Order would lock a Protected Quotation, the
Non-Displayed Order will be placed on the Exchange Book at the locking
price. If the Non-Displayed Order would cross a Protected Quotation,
the Non-Displayed Order will be repriced to a price that would lock the
Protected Quotation and will be placed on the Exchange Book at that
price.\38\ For example, if a Non-Displayed Order to buy at $11 would
cross a Protected Offer of $10.99, the Non-Displayed Order will be
repriced and posted at $10.99. A Non-Displayed Order to buy at $10.99
would also be posted at $10.99. During Pre-Market Hours and Post-Market
Hours, a Non-Displayed Order will be posted at its entered limit price
without adjustment.
---------------------------------------------------------------------------

    \38\ Repricing the crossing Non-Displayed Order helps ensure
that the Non-Displayed Order will not trade-through the Protected
Quotation.
---------------------------------------------------------------------------

    As is the case with a Price to Comply Order, a Non-Displayed Order
may be adjusted after initial entry.\39\ Specifically, if a Non-
Displayed Order is entered through RASH or FIX, during Market Hours the
Non-Displayed Order may be adjusted in the following manner after
initial entry and posting to the Exchange Book (unless the Order is
assigned a Routing Order Attribute that would cause it to be routed to
another market center rather than remaining on the Exchange Book):
---------------------------------------------------------------------------

    \39\ These adjustments reflect a substantive clarification to
the language of the existing rule.
---------------------------------------------------------------------------

     If the original entered limit price of a Non-Displayed
Order is higher than the Best Offer (for an Order to buy) or lower than
the Best Bid (for an Order to sell) and the NBBO moves toward the
original entered limit price of the Non-

Displayed Order, the price of the Non-Displayed Order will be adjusted
repeatedly in accordance with changes to the NBBO. For example, if a
Non-Displayed Order to buy at $11.02 would cross a Protected Offer of
$11, the Non-Displayed Order will be priced and posted at $11. If the
Best Offer then changes to $11.01, the price of the Non-Displayed Order
will be changed to $11.01. The Order may be repriced repeatedly in this
manner, receiving a new timestamp each time its price is changed, until
the Non-Displayed Order is posted at its original entered limit
price.\40\ The Non-Displayed Order will not thereafter be repriced
under this provision, except as provided below with respect to crossing
a Protected Quotation.
---------------------------------------------------------------------------

    \40\ Note that because the Order receives a new timestamp, it is
processed like a new Order when it is repriced.
---------------------------------------------------------------------------

     If, after being posted to the Exchange Book, the NBBO
changes so that the Non-Displayed Order would cross a Protected
Quotation, the Non-Displayed Order will be repriced at a price that
would lock the new NBBO and receive a new timestamp.\41\ For example,
if a Non-Displayed Order to buy at $11 would lock a Protected Offer of
$11, the Non-Displayed Order will be posted at $11. If the Best Offer
then changes to $10.99, the Non-Displayed Order will be repriced at
$10.99, receiving a new timestamp. The Non-Displayed Order may be
repriced and receive a new timestamp repeatedly.
---------------------------------------------------------------------------

    \41\ Id. As noted above, the cancellation of a Non-Displayed
Order in this circumstance helps ensure that the Non-Displayed Order
will not trade through a Protected Quotation.
---------------------------------------------------------------------------

    If a Non-Displayed Order is entered through OUCH or FLITE, during
Market Hours the Non-Displayed Order may be adjusted in the following
manner after initial entry and posting to the Exchange Book:
     If the original entered limit price of the Non-Displayed
Order locked or crossed a Protected Quotation and the NBBO changes so
that the Non-Displayed Order could be posted at a price at or closer to
its original entered limit price without crossing a Protected
Quotation, the Non-Displayed Order may either remain on the Exchange
Book unchanged or may be cancelled back to the Participant, depending
on its choice. For example, if a Non-Displayed Order to buy at $11.02
would cross a Protected Offer of $11, the Order will be priced at $11.
If the Best Offer changes to $11.01, the Order will not be repriced,
but rather will either remain at its current $11 price or be cancelled
back to the Participant, depending on its choice. A Participant's
choice with regard to maintaining the Non-Displayed Order or cancelling
it is set in advance for each port through which the Participant enters
Orders.
     If, after a Non-Displayed Order is posted to the Exchange
Book, the NBBO changes so that the Non-Displayed Order would cross a
Protected Quotation, the Non-Displayed Order will be cancelled back to
the Participant. For example, if a Non-Displayed Order to buy at $11
would lock a Protected Offer of $11, the Non-Displayed Order will be
posted at $11. If the Best Offer then changes to $10.99, the Non-
Displayed Order will be cancelled back to the Participant.
     If a Non-Displayed Order entered through OUCH or FLITE is
assigned a Midpoint Pegging Order Attribute,\42\ and if, after being
posted to the Exchange Book, the NBBO changes so that the Non-Displayed
Order is no longer at the Midpoint between the NBBO, the Non-Displayed
Order will be cancelled back to the Participant. In addition, if a Non-
Displayed Order entered through OUCH or FLITE is assigned a Midpoint
Pegging Attribute and also has a limit price that is lower than the
midpoint between the NBBO for an Order to buy (higher than the midpoint
between the NBBO for an Order to sell), the Order will nevertheless be
accepted at its limit price and will be cancelled if the midpoint
between the NBBO moves lower than (higher than) the price of an Order
to buy (sell).
---------------------------------------------------------------------------

    \42\ Midpoint Pegging is described below and in proposed Rule
4703. Specifically, an Order with the Midpoint Pegging Attribute
that is entered through OUCH or FLITE is priced upon entry but is
not repriced based on changes to the NBBO. Accordingly, the Order is
cancelled if it is no longer at the midpoint between the NBBO.
---------------------------------------------------------------------------

    The following Order Attributes may be assigned to a Non-Displayed
Order:
     Price. As described above, the price of the Order may be
adjusted to avoid crossing a Protected Quotation.
     Size.
     ``Minimum Quantity''.\43\
---------------------------------------------------------------------------

    \43\ The Minimum Quantity Order Attribute is described below and
in proposed Rule 4703.
---------------------------------------------------------------------------

     Time-in-Force.
     Designation as an ISO. In accordance with Regulation NMS,
a Non-Displayed Order designated as an ISO would be processed at its
entered limit price, since such a designation reflects a representation
by the Participant that it has simultaneously routed one or more
additional limit orders, as necessary, to execute against the full
displayed size of any Protected Quotations that the Non-Displayed Order
would cross. As discussed above, a Non-Displayed Order would be
accepted at a price that locked a Protected Quotation, even if the
Order was not designated as an ISO, because the non-displayed nature of
the Order allows it to lock a Protected Quotation under Regulation NMS.
Accordingly, the System would not interpret receipt of a Non-Displayed
Order marked ISO that locked a Protected Quotation as the basis for
determining that the Protected Quotation had been executed for purposes
of accepting additional Orders at that price level.\44\
---------------------------------------------------------------------------

    \44\ For example, if a Non-Displayed Order to buy at $11 would
lock the price of a Protected Offer at $11, the Non-Displayed Order
could be posted at $11 regardless of whether it was marked as an
ISO. Accordingly, even if the Non-Displayed Order was marked as an
ISO, the System would not accept a Displayed Order priced at $11
unless (i) the Displayed Order was itself marked as an ISO, or (ii)
market data received by the System demonstrated that the Protected
Offer had been removed.
---------------------------------------------------------------------------

     Routing (available through RASH and FIX only).
     Primary Pegging and Market Pegging (available through RASH
and FIX only).
     Pegging to the Midpoint.\45\
---------------------------------------------------------------------------

    \45\ Pegging to the Midpoint is described below and in proposed
Rule 4703. The full functionality of Midpoint Pegging is available
through RASH and FIX, and more limited functionality is available
through OUCH and FLITE.
---------------------------------------------------------------------------

     Discretion (available through RASH and FIX only).

Post-Only Orders

    A ``Post-Only Order'' is an Order Type designed to have its price
adjusted as needed to post to the Exchange Book in compliance with Rule
610(d) under Regulation NMS by avoiding the display of quotations that
lock or cross any Protected Quotation in a System Security during
Market Hours, or to execute against locking or crossing quotations in
circumstances where economically beneficial to the Participant entering
the Post-Only Order. Post-Only Orders are always displayed, although as
discussed below, they may also have a non-displayed price in
circumstances similar to a Price to Comply Order. Post-Only Orders are
thus designed to allow Participants to help control their trading
costs, while also ``provid[ing] displayed liquidity to the market and
thereby contribut[ing] to public price discovery--an objective that is
fully consistent with the Act.'' \46\ In addition, under some
circumstances, Post-Only Orders provide price improvement.
---------------------------------------------------------------------------

    \46\ Securities Exchange Act Release No. 73333 (October 9,
2014), 79 FR 62223 (October 16, 2014) (SR-NYSE-2014-32 and SR-
NYSEMKT-2014-56) (hereinafter ``SR-NYSE-2014-32 Approval Order'')
(approving ``Add Liquidity Only'' modifier that operates in a manner
similar to Post-Only Order).
---------------------------------------------------------------------------

    During Market Hours, a Post-Only Order is evaluated at the time of
entry

with respect to locking or crossing other Orders on the Exchange Book,
Protected Quotations, and potential execution as follows: \47\
---------------------------------------------------------------------------

    \47\ Details regarding the processing of a Post-Only Order that
locks or crosses both a Protected Quotation and an Order on the
Exchange Book; the potential execution of a Post-Only Order priced
at more than $1 per share; and the processing of a Post-Only Order
with a Time-in-Force of IOC reflect substantive clarifications to
the language of the existing rule.
---------------------------------------------------------------------------

     If a Post-Only Order would lock or cross a Protected
Quotation, the price of the Order will first be adjusted. If the Order
is Attributable, its adjusted price will be one minimum price increment
lower than the current Best Offer (for bids) or higher than the current
Best Bid (for offers). If the Order is not Attributable, its adjusted
price will be equal to the current Best Offer (for bids) or the current
Best Bid (for offers). However, the Order will not post or execute
until the Order, as adjusted, is evaluated with respect to Orders on
the Exchange Book.
    [cir] If the adjusted price of the Post-Only Order would not lock
or cross an Order on the Exchange Book, the Order will be posted in the
same manner as a Price to Comply Order (if it is not Attributable) or a
Price to Display Order (if it is Attributable). Specifically, if the
Post-Only Order is not Attributable, it will be displayed on the
Exchange Book at a price one minimum price increment lower than the
current Best Offer (for bids) or higher than the current Best Bid (for
offers) but will be ranked on the Exchange Book with a non-displayed
price equal to the current Best Offer (for bids) or to the current Best
Bid (for offers). For example, if a Post-Only Order to buy at $11 would
lock a Protected Offer of $11, the Order will be ranked at a non-
displayed price of $11 but will be displayed at $10.99. If the Post-
Only Order is Attributable, it will be ranked and displayed on the
Exchange Book at a price one minimum increment lower than the current
Best Offer (for bids) or higher than the current Best Bid (for offers).
Thus, in the preceding example, the Post-Only Order to buy would be
ranked and displayed at $10.99.
    [cir] If the adjusted price of the Post-Only Order would lock or
cross an Order on the Exchange Book, the Post Only Order will be
repriced, ranked, and displayed at one minimum price increment below
the current best-priced Order to sell on the Exchange Book (for bids)
or above the current best-priced Order to buy on the Exchange Book (for
offers); provided, however, the Post-Only Order will execute if (i) it
is priced at $1.00 or more,\48\ or (ii) it is priced below $1.00 and
the value of price improvement associated with executing against an
Order on the Exchange Book (as measured against the original limit
price of the Order) equals or exceeds the sum of fees charged for such
execution and the value of any rebate that would be provided if the
Order posted to the Exchange Book and subsequently provided liquidity.
For example, if a Participant entered a Non-Attributable Post-Only
Order to buy at $11.01, another market center is displaying a Protected
Offer at $11, and there is a Non-Displayed Order on the Exchange Book
to sell at $11, the adjusted price of the Post-Only Order will be $11.
However, because the Post-Only Order would be executable against the
Non-Displayed Order on the Exchange Book, the Post-Only Order would
execute.
---------------------------------------------------------------------------

    \48\ This is the case because the Exchange's fees for securities
priced at $1 or more reflect a ``taker/maker'' pricing structure in
which Orders that access liquidity are paid a rebate. As a result,
it is always economically beneficial for an Order to execute against
posted liquidity and receive a rebate, even if the Order receives no
price improvement. In the event that the Exchange modified its
pricing structure so as to remove the applicable rebate, it would
also amend the rules governing Post-Only Orders to provide that
securities priced at $1 or more would execute against Orders on the
Exchange Book only if they would receive price improvement of $0.01
or more per share.
---------------------------------------------------------------------------

     If the Post-Only Order would not lock or cross a Protected
Quotation but would lock or cross an Order on the Exchange Book, the
Post Only Order will be repriced, ranked, and displayed at one minimum
price increment below the current best-priced Order to sell on the
Exchange Book (for bids) or above the current best-priced Order to buy
on the Exchange Book (for offers); provided, however, the Post-Only
Order will execute if (i) it is priced at $1.00 or more,\49\ or (ii) it
is priced below $1.00 and the value of price improvement associated
with executing against an Order on the Exchange Book (as measured
against the original limit price of the Order) equals or exceeds the
sum of fees charged for such execution and the value of any rebate that
would be provided if the Order posted to the Exchange Book and
subsequently provided liquidity. For example, if a Participant entered
a Post-Only Order to buy at $11.02, the Best Offer was $11.04, and
there was a Non-Displayed Order on the Exchange Book to sell at $11.02,
the Post-Only Order would execute.\50\
---------------------------------------------------------------------------

    \49\ Id.
    \50\ Thus, in circumstances where a Post-Only Order would lock
or cross an Order on the Exchange Book, the Post-Only Order will
either execute or post and offer displayed liquidity. A Post-Only
Order is not cancelled back to the Participant that entered it if it
cannot post at its original price. Thus, the Order Type does not
provide a means to ascertain the existence of locking or crossing
Orders on the Exchange Book without the Participant also committing
to execute against such Orders or display and potentially provide
liquidity at the Exchange's best price.
---------------------------------------------------------------------------

     If a Post-Only Order is entered with a Time-in-Force of
IOC, the price of an Order to buy (sell) will be repriced to the lower
of (higher of) (i) one minimum price increment below (above) the price
of the Order or (ii) the current Best Offer (Best Bid). The Order will
execute against any Order on the Exchange Book with a price equal to or
better than the adjusted price of the Post-Only Order. If the Post-Only
Order cannot execute, it will be cancelled. For example, if a Post-Only
Order to buy at $11 with a Time-in-Force of IOC was entered and the
current Best Offer was $11.01, the Order would be repriced to $10.99;
however, if the Best Offer was $10.98, the Order would be repriced to
$10.98.\51\
---------------------------------------------------------------------------

    \51\ This functionality reflects the overall purpose of the
Post-Only Order, which is not to post to the Exchange Book in all
circumstances, but rather to assist Participants in controlling
execution costs by allowing consideration of price improvement,
fees, and rebates in the handling of the Order. Thus, entering a
Post-Only Order with a Time-in-Force of IOC allows a Participant to
stipulate that an Order will execute only if it receives price
improvement.
---------------------------------------------------------------------------

     If a Post-Only Order would not lock or cross an Order on
the Exchange Book or any Protected Quotation, it will be posted on the
Exchange Book at its entered limit price.
    During Pre-Market and Post-Market Hours, a Post-Only Order will be
processed in a manner identical to Market Hours with respect to locking
or crossing Orders on the Exchange Book, but will not have its price
adjusted with respect to locking or crossing the quotations of other
market centers.
    If a Post-Only Order is entered through RASH or FIX, during System
Hours the Post-Only Order may be adjusted in the following manner after
initial entry and posting to the Exchange Book: \52\
---------------------------------------------------------------------------

    \52\ These adjustments reflect a substantive clarification to
the language of the existing rule.
---------------------------------------------------------------------------

     If the original entered limit price of the Post-Only Order
is not being displayed, the displayed (and non-displayed price, if any)
of the Order will be adjusted repeatedly in accordance with changes to
the NBBO or the best price on the Exchange Book, as applicable;
provided, however, that if the quotation of another market center moves
in a manner that would lock or cross the displayed price of a Post-Only
Order, the price(s) of the Post-Only Order will not be adjusted.\53\
For

example, if a Non-Attributable Post-Only Order to buy at $11.02 would
cross a Protected Offer of $11, the Order will be ranked at a non-
displayed price of $11 but will be displayed at $10.99. If the Best
Offer then moves to $11.01, the displayed price will be changed to $11
and the non-displayed price at which the Order is ranked will be
changed to $11.01. However, if another market center then displays an
offer of $11 (thereby locking the previously displayed price of the
Post-Only Order, notwithstanding Rule 610(d) under Regulation NMS), the
price of the Post-Only Order will not be changed. The Order may be
repriced repeatedly until such time as the Post-Only Order is able to
be displayed at its original entered limit price ($11.02 in the
example). The Post-Only Order receives a new timestamp each time its
price is changed. If the original entered limit price of the Post-Only
Order would no longer lock or cross a Protected Quotation or an Order
on the Exchange Book, the Post-Only Order will be ranked displayed at
that price and will receive a new timestamp, and will not thereafter be
adjusted under this provision.\54\
---------------------------------------------------------------------------

    \53\ This means that, in general, the price of the Post-Only
Order will move toward, but not away from, its original entered
limit price. Because a Post-Only Order is removed from the Exchange
Book while it is being repriced, however, it is possible that the
Order's price will move away from its original entered limit price
in the case of a ``race condition'' where the NBBO changes again
while the Order is not on the Exchange Book.
    \54\ Thus, the price of the Order will not move beyond its limit
price.
---------------------------------------------------------------------------

    If a Post-Only Order is entered through OUCH or FLITE, the Post-
Only Order may be adjusted in the following manner after initial entry
and posting to the Exchange Book: \55\
---------------------------------------------------------------------------

    \55\ These adjustments reflect a substantive clarification to
the language of the existing rule.
---------------------------------------------------------------------------

     During Market Hours, if the original entered limit price
of the Post-Only Order locked or crossed a Protected Quotation, the
Post-Only Order may be adjusted after initial entry in the same manner
as a Price to Comply Order (or a Price to Display Order, if it is
Attributable). Thus, in the case of a Non-Attributable Post-Only Order
that crossed a Protected Quotation, if the NBBO changed so that the
Post-Only Order could be ranked and displayed at a price at or closer
to its original entered limit price without locking or crossing a
Protected Quotation, the Post-Only Order may either remain on the
Exchange Book unchanged or may be cancelled back to the Participant,
depending on its choice. In the case of a Non-Attributable Post-Only
Order that locked a Protected Quotation, if the limit price would no
longer lock a Protected Quotation, the Post-Only Order may either
remain on the Exchange Book unchanged, may be cancelled back to the
Participant, or may be ranked and displayed at its original entered
limit price, depending on the Participant's choice, and will not
thereafter be adjusted under this provision.\56\ If the Post-Only Order
is displayed at its original entered limit price, it will receive a new
timestamp. Finally, in the case of an Attributable Post-Only Order that
locked or crossed a Protected Quotation, if the NBBO changed so that
the Post-Only Order could be ranked and displayed at a price at or
closer to its original entered limit price without locking or crossing
a Protected Quotation, the Post-Only Order may either remain on the
Exchange Book unchanged or may be cancelled back to the Participant,
depending on the Participant's choice. A Participant's choice with
regard to adjustment of Post-Only Orders is set in advance for each
port through which the Participant enters Orders.
---------------------------------------------------------------------------

    \56\ Thus, the price of the Order will not move beyond its limit
price.
---------------------------------------------------------------------------

     During System Hours, if the original entered limit price
of the Post-Only Order locked or crossed an Order on the Exchange Book
and did not execute, and the Exchange Book changes so that the original
entered limit price would no longer lock or cross an Order on the
Exchange Book, the Post-Only Order may either remain on the Exchange
Book unchanged or may be cancelled back to the Participant, depending
on the Participant's choice. For example, if a Post-Only Order to buy
at $0.98 would lock an Order on the Exchange Book priced at $0.98, the
Post-Only Order will be ranked and displayed at $0.9799. If the Order
at $0.98 is cancelled or executed, the Post-Only Order may either
remain with a displayed price of $0.9799 or be cancelled back to the
Participant, depending on the Participant's choice. A Participant's
choice with regard to maintaining the Post-Only Order or cancelling it
is set in advance for each port through which the Participant enters
Orders.
    The following Order Attributes may be assigned to a Post-Only
Order:
     Price. As described above, the price of the Order may be
adjusted to avoid locking or crossing a Protected Quotation, and may
include a displayed price as well as a non-displayed price.
     Size.
     Time-in-Force.
     Designation as an ISO. In accordance with Regulation NMS,
a Post-Only Order designated as an ISO that locked or crossed a
Protected Quotation would be processed at its entered limit price,
since such a designation reflects a representation by the Participant
that it has simultaneously routed one or more additional limit orders,
as necessary, to execute against the full displayed size of any
Protected Quotations that the Post-Only Order would lock or cross.
However, as described above, a Post-Only Order designated as an ISO
that locked or crossed an Order on the Exchange Book would either
execute at time of entry or would have its price adjusted prior to
posting. Accordingly, the System would not interpret receipt of a Post-
Only Order marked ISO that had its price adjusted prior to posting as
the basis for determining that any Protected Quotation at the Order's
original entered limit price level had been executed for purposes of
accepting additional Orders at that price level. However, if the Post-
Only Order is ranked and displayed at its adjusted price, the System
would consider the adjusted price level to be open for purposes of
accepting additional Orders at that price level. For example, assume
that there is a Protected Offer at $0.98 and a Participant enters a
Post-Only Order marked ISO to buy at $0.98. If there are no Orders to
sell at $0.98 on the Exchange Book, the Order to buy will be displayed
and ranked at $0.98, since the designation of the Order as an ISO
reflects the Participant's representation that it has routed one or
more additional limit orders, as necessary, to execute against the full
displayed size of any Protected Quotations that the Post-Only Order
would lock or cross. However, if there was also an Order to sell at
$0.98 on the Exchange Book, the Post-Only Order may be repriced,
ranked, and displayed at $0.9799. In that case, the mere fact that the
Post-Only Order was designated as an ISO would not allow the Exchange
to conclude that the $0.98 price level was ``open'' for receiving
orders to buy at that price; the $0.98 price level would be considered
open only if market data received by the System demonstrated that the
Protected Offer at $0.98 had been removed or if a subsequent Displayed
Order marked ISO was received and ranked at that price.
     Attribution.
     Display. A Post-Only Order is always displayed, although,
as provided above, it may also have a non-displayed price.

Retail Price Improving Order and Retail Order \57\
---------------------------------------------------------------------------

    \57\ The definitions of Retail Price Improving Order and Retail
Order are currently found in Rule 4780. Accordingly, conforming
amendments are proposed to that rule to reflect the adoption of the
proposed new definitions in Rule 4701.
---------------------------------------------------------------------------

    A ``Retail Price Improving Order'' or ``RPI Order'' is an Order
Type with a Non-Display Order Attribute that is held on the Exchange
Book in order to provide liquidity at a price at least $0.001 better
than the NBBO through a special execution process described in Rule
4780. A Retail Price Improving Order may be entered in price increments
of $0.001. RPI Orders collectively may be referred to as ``RPI
Interest.''
    An RPI Order will be posted to the Exchange Book regardless of its
price, but an RPI Order may execute only against a Retail Order, and
only if its price is at least $0.001 better than the NBBO.
    The following Order Attributes may be assigned to an RPI Order:
     Price. The price of an RPI Order must be at least $0.001
better than the NBBO in order to execute.
     Size.
     A Time-in-Force other than IOC.
     Primary Pegging (available through RASH and FIX only).
     Midpoint Pegging (available through RASH and FIX only).
     Non-Display. All RPI Orders are Non-Displayed.
    A ``Retail Order'' is an Order Type with a Non-Display Order
Attribute submitted to the Exchange by a Retail Member Organization (as
defined in Rule 4780). A Retail Order must be an agency Order, or
riskless principal Order that satisfies the criteria of FINRA Rule
5320.03. The Retail Order must reflect trading interest of a natural
person with no change made to the terms of the underlying order of the
natural person with respect to price (except in the case of a market
order that is changed to a marketable limit order) or side of market
and that does not originate from a trading algorithm or any other
computerized methodology.
    A Retail Order may be designated as either a Type-1 Retail Order or
a Type-2 Retail Order. Upon entry, a Type-1 Retail Order will attempt
to execute against RPI Orders and any other Orders on the Exchange Book
with a price that is (i) equal to or better than the price of the Type-
1 Retail Order and (ii) at least $0.001 better than the NBBO. A Type-1
Retail Order is not Routable and will thereafter be cancelled.
    Upon entry, a Type-2 Retail Order will first attempt to execute
against RPI Orders and any other Orders on the Exchange Book with a
price that is (i) equal to or better than the price of the Type-2
Retail Order and (ii) at least $0.001 better than the NBBO and will
then attempt to execute against any other Order on the Exchange Book
with a price that is equal to or better than the price of the Type-2
Retail Order, unless such executions would trade through a Protected
Quotation. A Type-2 Retail Order may be designated as Routable.
    The following Order Attributes may be assigned to a Retail Order:
     Price.
     Size.
     A Time-in-Force of IOC.
     Routing (available through RASH and FIX only).
     Midpoint Pegging (available through RASH and FIX only).
     Non-Display. All Retail Orders are Non-Displayed.
Order Attributes
    Proposed Rule 4702 lists the Order Attributes that may be assigned
to specific Order Types. Proposed Rule 4703 details the parameters of
each Order Attribute.
Time-in-Force
    The ``Time-in-Force'' assigned to an Order means the period of time
that the System will hold the Order for potential execution.
Participants specify an Order's Time-in-Force by designating a time at
which the Order will become active and a time at which the Order will
cease to be active. The available times for activating Orders are:
     The time of the Order's receipt by the System;
     the beginning of Market Hours;
     the end of Market Hours;
     the resumption of trading, in the case of a security that
is the subject of a trading halt.
    The available times for deactivating Orders are:
     ``Immediate'' (i.e., immediately after determining whether
the Order is marketable);
     the end of Market Hours;
     the end of System Hours;
     one year after entry; or
     a specific time identified by the Participant; provided,
however, that an Order specifying an expire time beyond the current
trading day will be cancelled at the end of the current trading day.
    Notwithstanding the Time-in-Force originally designated for an
Order, a Participant may always cancel an Order after it is entered.
    The following Times in Force are referenced elsewhere in the
Exchange's Rules by the designations noted below:
     An Order that is designated to deactivate immediately
after determining whether the Order is marketable may be referred to as
having a Time in Force of ``Immediate or Cancel'' or ``IOC''. Any Order
with a Time-in-Force of IOC entered between 9:30 a.m. ET and 4 p.m. ET
may be referred to as having a Time-in-Force of ``Market Hours
Immediate or Cancel'' or ``MIOC''. An Order with a Time-in-Force of IOC
that is entered at any time between 7 a.m. ET and 7 p.m. ET may be
referred to as having a Time-in-Force of ``System Hours Immediate or
Cancel'' or ``SIOC''.
     An Order that is designated to deactivate at 7 p.m. may be
referred to as having a Time in Force of ``System Hours Day'' or
``SDAY''.
     An Order that is designated to deactivate one year after
entry may be referred to as a ``Good-till-Cancelled'' or ``GTC'' Order.
If a GTC Order is designated as eligible for execution during Market
Hours only, it may be referred to as having a Time in Force of ``Market
Hours Good-till-Cancelled'' or ``MGTC''. If a GTC is designated as
eligible for execution during System Hours, it may be referred to as
having a Time in Force of ``System Hours Good-till-Cancelled'' or
``SGTC''.
     An Order that is designated to deactivate at the time
specified in advance by the entering Participant may be referred to as
having a Time-in-Force of ``System Hours Expire Time'' or ``SHEX''.
     An Order that is designated to activate at any time during
Market Hours and deactivate at 4 p.m. ET may be referred to as having a
Time-in-Force of ``Market Hours Day'' or ``MDAY''. An Order entered
with a Time-in-Force of MDAY after 4 p.m. ET will be accepted but given
a Time-in-Force of IOC.
     An Order that is designated to activate when entered and
deactivate at 4 p.m. ET may be referred to as having a Time in Force of
``Good-till-Market Close'' or ``GTMC''. GTMC Orders entered after 4
p.m. ET will be treated as having a Time-in-Force of SIOC.
Size
    Except as otherwise provided, an Order may be entered in any whole
share size between one share and 999,999 shares. Orders for fractional
shares are not permitted. The following terms may be used to describe
particular Order sizes:
     ``normal unit of trading'' or ``round lot'' means the size
generally employed by traders when trading a particular security, which
is 100 shares in most instances;
     ``mixed lot'' means a size of more than one normal unit of
trading but not a multiple thereof; and

     ``odd lot'' means a size of less than one normal unit of
trading.
Price
    With limited exceptions, all Orders must have a price, such that
they will execute only if the price available is equal to or better
than the price of the Order. The maximum price that the System will
accept is $199,999.99. Certain Orders have a price that is determined
by the System based on the NBBO or other reference prices, rather than
by the Participant. As described below with respect to the Pegging
Order Attribute, an Order may have a price that is pegged to the
opposite side of the market, in which case the Order will behave like a
``market order'' or ``unpriced order'' (i.e., an Order that executes
against accessible liquidity on the opposite side of the market,
regardless of its price).
Pegging
    Pegging is an Order Attribute that allows an Order to have its
price automatically set with reference to the NBBO; provided, however,
that if the Exchange is the sole market center at the Best Bid or Best
Offer (as applicable), then the price of any Displayed Order with
Pegging will be set with reference to the highest bid or lowest offer
disseminated by a market center other than the Exchange.\58\ An Order
with a Pegging Order Attribute may be referred to as a ``Pegged
Order.'' The price to which an Order is pegged is referred to as the
Inside Quotation, the Inside Bid, or the Inside Offer, as appropriate.
There are three varieties of Pegging:
---------------------------------------------------------------------------

    \58\ This is the case because otherwise the Pegged Order would
become pegged to itself if it set the NBBO.
---------------------------------------------------------------------------

     Primary Pegging means Pegging with reference to the Inside
Quotation on the same side of the market. For example, if the Inside
Bid was $11, an Order to buy with Primary Pegging would be priced at
$11.
     Market Pegging means Pegging with reference to the Inside
Quotation on the opposite side of the market. For example, if the
Inside Offer was $11.06, an Order to buy with Market Pegging would be
priced at $11.06.
     Midpoint Pegging means Pegging with reference to the
midpoint between the Inside Bid and the Inside Offer (the
``Midpoint''). Thus, if the Inside Bid was $11 and the Inside Offer was
$11.06, an Order with Midpoint Pegging would be priced at $11.03. An
Order with Midpoint Pegging is not displayed. An Order with Midpoint
Pegging may be executed in sub-pennies if necessary to obtain a
midpoint price.
    Pegging is available only during Market Hours. An Order with
Pegging may specify a limit price beyond which they Order may not be
executed; provided, however, that if an Order has been assigned a
Pegging Order Attribute and a Discretion Order Attribute, the Order may
execute at any price within the discretionary price range, even if
beyond the limit price specified with respect to the Pegging Order
Attribute. If an Order with Pegging is priced at its limit price, the
price of the Order may nevertheless be changed to a less aggressive
price based on changes to the Inside Quotation.\59\ In addition, an
Order with Primary Pegging or Market Pegging may specify an Offset
Amount, such that the price of the Order will vary from the Inside
Quotation by the selected Offset Amount. The Offset Amount may be
either aggressive or passive. Thus, for example, if a Participant
entered an Order to buy with Primary Pegging and a passive Offset
Amount of $0.05 and the Inside Bid was $11, the Order would be priced
at $10.95. If the Participant selected an aggressive Offset Amount of
$0.02, however, the Order would be priced at $11.02. An Order with
Primary Pegging and an Offset Amount will not be Displayed, unless the
Order is Attributable. An Order with Midpoint Pegging will not be
Displayed. An Order with Market Pegging and no Offset behaves as a
``market order'' with respect to any liquidity on the Exchange Book at
the Inside Quotation on the opposite side of the market because it is
immediately executable at that price. If, at the time of entry, there
is no price to which a Pegged Order can be pegged, the Order will be
rejected. In the case of an Order with Midpoint Pegging, if the Inside
Bid and Inside Offer are locked, the Order will be priced at the
locking price, if the Inside Bid and Inside Offer are crossed, the
Order will nevertheless be priced at the midpoint between the Inside
Bid and Inside Offer, and if there is no Inside Bid and/or Inside
Offer, the Order will be rejected.
---------------------------------------------------------------------------

    \59\ For example, if an Order to buy with Primary Pegging is
entered with a limit price of $11.05 at a time when the Inside Bid
is $11, the initial price of the Order will be $11. If, thereafter,
the Inside Bid changes to $11.05, $11.06, and $11.04, the price of
the Order at such times will be $11.05, $11.05, and $11.04.
---------------------------------------------------------------------------

    Primary Pegging and Market Pegging are available through RASH and
FIX only. An Order entered through OUCH or FLITE with Midpoint Pegging
will have its price set upon initial entry to the Midpoint, unless the
Order has a limit price that is lower than the Midpoint for an Order to
buy (higher than the Midpoint for an Order to sell), in which case the
Order will be ranked on the Exchange Book at its limit price.
Thereafter, if the NBBO changes so that the Midpoint is lower than
(higher than) the price of an Order to buy (sell), the Pegged Order
will be cancelled back to the Participant.
    An Order entered through RASH or FIX with Pegging will have its
price set upon initial entry and will thereafter have its price reset
in accordance with changes to the relevant Inside Quotation. An Order
with Pegging receives a new timestamp whenever its price is updated and
therefore will be evaluated with respect to possible execution (and
routing, if it has been assigned a Routing Order Attribute) in the same
manner as a newly entered Order. If the price to which an Order is
pegged is not available, the Order will be rejected.
    Pegging functionality allows a Participant to have the System
adjust the price of the Order continually in order to keep the price
within defined parameters. Thus, the System performs price adjustments
that would otherwise be performed by the Participant through
cancellation and reentry of Orders. The fact that a new timestamp is
created for a Pegged Order whenever it has its price adjusted allows
the Order to seek additional execution opportunities and ensures that
the Order does not ``jump the queue'' with respect to any Orders that
were previously at the Pegged Order's new price level.
    If an Order with Primary Pegging is updated 1,000 times, it will be
cancelled; if an Order with other forms of Pegging is updated 10,000
times, it will be cancelled. This restriction is designed to conserve
System resources by limiting the persistence of Orders that update
repeatedly without any reasonable prospect of execution.
Minimum Quantity
    Minimum Quantity is an Order Attribute that allows a Participant to
provide that an Order will not execute unless a specified minimum
quantity of shares can be obtained. Thus, the functionality serves to
allow a Participant that may wish to buy or sell a large amount of a
security to avoid signaling its trading interest unless it can purchase
a certain minimum amount. An Order with a Minimum Quantity Order
Attribute may be referred to as a ``Minimum Quantity Order.'' For
example, a Participant could enter an Order with a Size of 1000 shares
and specify a Minimum Quantity of 500 shares. In that case, upon entry,
the System would determine whether there were posted Orders executable
against the incoming Order with a size

of at least 500 shares.\60\ If there were not, the Order would post on
the Exchange Book in accordance with the characteristics of its
underlying Order Type. Once posted to the Exchange Book, the Minimum
Quantity Order retains its Minimum Quantity Order Attribute, such that
the Order may execute only against incoming Orders with a size of at
least the minimum quantity condition. An Order that has a Minimum
Quantity Order Attribute and that posts to the Exchange Book will not
be displayed.
---------------------------------------------------------------------------

    \60\ As reflected in the proposed rule, the System currently
allows an incoming Order with a Minimum Quantity to execute if one
or more Orders on the Exchange Book satisfy the Minimum Quantity
condition.
---------------------------------------------------------------------------

    Upon entry, an Order with a Minimum Quantity Order Attribute must
have a size of at least one round lot. An Order entered through OUCH or
FLITE may have a minimum quantity condition of any size of at least one
round lot. An Order entered through RASH or FIX must have a minimum
quantity of one round lot or any multiple thereof, and a mixed lot
minimum quantity condition will be rounded down to the nearest round
lot. In the event that the shares remaining in the size of an Order
with a Minimum Quantity Order Attribute following a partial execution
thereof are less than the minimum quantity specified by the Participant
entering the Order, the minimum quantity value of the Order will be
reduced to the number of shares remaining. An Order with a Minimum
Quantity Order Attribute may not be displayed; if a Participant marks
an Order with both a Minimum Quantity Order Attribute and a Display
Order Attribute, the System will accept the Order but will give a Time-
in-Force of IOC, regardless of the Time-in-Force marked by the
Participant. An Order marked with a Minimum Quantity Order Attribute
and a Routing Order Attribute will be rejected.
Routing
    Routing is an Order Attribute that allows a Participant to
designate an Order to employ one of several Routing Strategies offered
by the Exchange, as described in Rule 4758; such an Order may be
referred to as a ``Routable Order.'' Upon receipt of an Order with the
Routing Order Attribute, the System will process the Order in
accordance with the applicable Routing Strategy. In the case of a
limited number of Routing Strategies, the Order will be sent directly
to other market centers for potential execution. For most other Routing
Strategies, the Order will attempt to access liquidity available on the
Exchange in the manner specified for the underlying Order Type and will
then be routed in accordance with the applicable Routing Strategy.
Shares of the Order that cannot be executed are then returned to the
Exchange, where they will (i) again attempt to access liquidity
available on the Exchange and (ii) post to the Exchange Book or be
cancelled, depending on the Time-in-Force of the Order. Under certain
Routing Strategies, the Order may be routed again if the System
observes an accessible quotation of another market center, and returned
to the Exchange again for potential execution and/or posting to the
Exchange Book.
    In connection with the trading of securities governed by Regulation
NMS, all Orders shall be routed for potential execution in compliance
with Regulation NMS. Where appropriate, Routable Orders will be marked
as Intermarket Sweep Orders.
Discretion
    Discretion is an Order Attribute under which an Order has a non-
displayed discretionary price range within which the entering
Participant is willing to trade; such an Order may be referred to as a
``Discretionary Order.'' \61\ Thus, an Order with Discretion has both a
price (for example, buy at $11) and a discretionary price range (for
example, buy up to $11.03). Depending on the Order Type used, the price
may be displayed (for example, a Price to Display Order) or non-
displayed (for example, a Non-Displayed Order). The discretionary price
range is always non-displayed. In addition, it should be noted that the
Discretion Order Attribute may be combined with the Pegging Order
Attribute, in which case either the price of the Order or the
discretionary price range or both may be pegged in the ways described
in Rule 4702(d) with respect to the Pegging Order Attribute. For
example, an Order with Discretion to buy might be pegged to the Best
Bid with a $0.05 passive Offset and might have a discretionary price
range pegged to the Best Bid with a $0.02 passive Offset. In that case,
if the Best Bid was $11, the price of the Order would be $10.95, with a
discretionary price range up to $10.98. If the Best Bid moved to
$10.99, the price of the Order would then be $10.94, with a
discretionary price range up to $10.97. Alternatively, if the price of
the Order was pegged but the discretionary price range was not, the
price of the Order would be $10.94, but the discretionary price range
would continue to range up to $10.98. Likewise, if the discretionary
price range was pegged but the price of the Order was not, the Order
would remain priced at $10.95 but with a discretionary price range of
up to $10.97. A Participant may also specify a limit price beyond which
the discretionary price range may not extend.
---------------------------------------------------------------------------

    \61\ The proposed rule text reflects a substantive clarification
to the existing description of Discretionary Orders.
---------------------------------------------------------------------------

    Under the circumstances described below, the System processes an
Order with Discretion by generating a Non-Displayed Order with a Time-
in-Force of IOC (a ``Discretionary IOC'') that will attempt to access
liquidity available within the discretionary price range. The
Discretionary IOC will not be permitted to execute, however, if the
price of the execution would trade through a Protected Quotation. If
more than one Order with Discretion satisfies conditions that would
cause the generation of a Discretionary IOC simultaneously, the order
in which such Discretionary IOCs are presented for execution is random,
based on the respective processing time for each such Order. Whenever a
Discretionary IOC is generated, the underlying Order with Discretion
will be withheld or removed from the Exchange Book and will then be
routed and/or placed on the Exchange Book if the Discretionary IOC does
not exhaust the full size of the underlying Order with Discretion, with
its price determined by the underlying Order Type and Order Attributes
selected by the Participant.\62\ Because the circumstances under which
a Discretionary IOC will be generated are dependent upon a range of
factors, several specific scenarios are described below.
---------------------------------------------------------------------------

    \62\ It should be noted that a Discretionary IOC is deemed to be
accessing liquidity for purposes of the Exchange's schedule of fees
and rebates, unless one Discretionary IOC executes against another
Discretionary IOC, in which case the Order that had reached the
Exchange Book first would be deemed to provide liquidity. Because
the Exchange has a ``taker/maker'' pricing model under which a
Participant that accesses liquidity receives a rebate, a rebate
would be paid with respect to a Discretionary IOC.
---------------------------------------------------------------------------

     If an Order has been assigned a Discretion Order
Attribute, but has not been assigned a Routing Order Attribute, upon
entry of the Order, the System will automatically generate a
Discretionary IOC with a price equal to the highest price for an Order
with Discretion to buy (lowest price for an Order with Discretion to
sell) within the discretionary price range and a size equal to the full
size of the underlying Order to determine if there are any Orders
within the discretionary price range on the Exchange Book. If the
Discretionary IOC does not exhaust the

full size of the Order with Discretion, the remaining size of the Order
with Discretion will post to the Exchange Book in accordance with the
parameters that apply to the underlying Order Type. Thus, for example,
if a Participant enters a Price to Display Order to buy at $11 with a
discretionary price range of up to $11.03, upon entry the System will
generate a Discretionary IOC to buy priced at $11.03. If there is an
Order on the Exchange Book to sell priced at $11.02 and an execution at
$11.02 would not trade through a Protected Quotation, the Discretionary
IOC will execute against the Order on the Exchange Book, up to the full
size of each Order. Any remaining size of the Price to Display Order
would post to the Exchange Book in accordance with its parameters.
     After the Order posts to the Exchange Book, the System
will examine whether at any time there is an Order on the Exchange Book
with a price in the discretionary price range against which the Order
with Discretion could execute. In doing so, the System will examine all
Orders (including Orders that are not Displayed). If the System
observes such an Order, it will generate a Discretionary IOC with a
price equal to the highest price for an Order to buy (lowest price for
an Order to sell) within the discretionary price range and a size equal
to the full size of the Order.
     If an Order that uses a passive routing strategy (i.e., a
strategy such as BSCN \63\ that does not seek routing opportunities
after posting to the Exchange Book) has been assigned a Discretion
Order Attribute but does not have a pegged discretionary price range,
upon entry of the Order, the System will examine all Orders (including
Orders that are not Displayed) on the Exchange Book to determine if
there is an Order on the Exchange Book with a price in the
discretionary price range against which the Order with Discretion could
execute. If the System observes such an Order, it will generate a
Discretionary IOC with a price equal to the price of the Order on the
Exchange Book and a size equal to the applicable size of the Order on
the Exchange Book. The System will also determine if there are any
accessible quotations with prices that are within the discretionary
price range at destinations on the applicable routing table for the
selected routing strategy. If there are such quotations, the System
will generate one or more Discretionary IOCs to route to such
destinations, with a price and size that match the price and size of
the market center's quotation. If necessary to maximize execution
opportunities and comply with Regulation NMS, the System's routing
broker may mark such Discretionary IOCs as Intermarket Sweep Orders. If
the Discretionary IOC(s) do not exhaust the full size of the Order with
Discretion, the remaining size of the Order with Discretion will post
to the Exchange Book in accordance with the parameters that apply to
the underlying Order Type. The System will then examine whether at any
time there is an Order on the Exchange Book with a price in the
discretionary price range against which the Order with Discretion could
execute. In doing so, the System will examine all Orders (including
Orders that are not Displayed). If the System observes such an Order,
it will generate a Discretionary IOC with a price equal to the price of
the Order on the Exchange Book and a size equal to the applicable size
of the Order on the Exchange Book.
---------------------------------------------------------------------------

    \63\ The BSCN routing strategy is described in Rule 4758.
---------------------------------------------------------------------------

     If an Order that uses a reactive routing strategy (i.e., a
strategy such as BSTG \64\ that seeks routing opportunities after
posting to the Exchange Book) has been assigned a Discretion Order
Attribute but does not have a pegged discretionary price range, upon
entry of the Order, the System will examine all Orders (including
Orders that are not Displayed) on the Exchange Book to determine if
there is an Order on the Exchange Book with a price in the
discretionary price range against which the Order with Discretion could
execute. If the System observes such an Order, it will generate a
Discretionary IOC with a price equal to the price of the Order on the
Exchange Book and a size equal to the applicable size of the Order on
the Exchange Book. The System will also determine if there are any
accessible quotations with prices that are within the discretionary
price range at destinations on the applicable routing table for the
selected routing strategy. If there are such quotations, the System
will generate one or more Discretionary IOCs to route to such
destinations, with a price and size that match the price and size of
the market center's quotation. If necessary to maximize execution
opportunities and comply with Regulation NMS, the System may mark such
Discretionary IOCs as Intermarket Sweep Orders. If the Discretionary
IOC(s) do not exhaust the full size of the Order with Discretion, the
remaining size of the Order with Discretion will post to the Exchange
Book in accordance with the parameters that apply to the underlying
Order Type. The System will then examine whether at any time there is
an Order on the Exchange Book or an accessible quotation at another
trading venue with a price in the discretionary price range against
which the Order with Discretion could execute. In examining the
Exchange Book, the System will examine all Orders (including Orders
that are not Displayed). If the System observes such an Order or
quotation, it will generate a Discretionary IOC with a price equal to
the price of such the Order or quotation and a size equal to the
applicable size of the Order on the Exchange Book or the displayed size
of the quotation.
---------------------------------------------------------------------------

    \64\ The BSTG routing strategy is described in Rule 4758.
---------------------------------------------------------------------------

     If an Order that uses a passive routing strategy has been
assigned a Discretion Order Attribute and does have a pegged
discretionary price range, upon entry of the Order, the System will
examine all Orders (including Orders that are not Displayed) on the
Exchange Book to determine if there is an Order on the Exchange Book
with a price in the discretionary price range against which the Order
with Discretion could execute. If the System observes such an Order, it
will generate a Discretionary IOC with a price equal to the price of
the Order on the Exchange Book and a size equal to the applicable size
of the Order on the Exchange Book. The System will also determine if
there are any accessible quotations with prices that are within the
discretionary price range at destinations on the applicable routing
table for the selected routing strategy. If there are such quotations,
the System will generate one or more Discretionary IOCs to route to
such destinations, with a price and size that match the price and size
of the market center's quotation. If necessary to maximize execution
opportunities and comply with Regulation NMS, the System may mark such
Discretionary IOCs as Intermarket Sweep Orders. If the Discretionary
IOC(s) do not exhaust the full size of the Order with Discretion, the
remaining size of the Order with Discretion will post to the Exchange
Book in accordance with the parameters that apply to the underlying
Order Type. Thereafter, the Order will not generate further
Discretionary IOCs unless the Order is updated in a manner that causes
it to receive a new timestamp, in which case the Order will behave in
the same manner as a newly entered Order.
     If an Order that uses a reactive routing strategy has been
assigned a Discretion Order Attribute and does have a pegged
discretionary price range,

upon entry of the Order, the System will examine all Orders (including
Orders that are not Displayed) on the Exchange Book to determine if
there is an Order on the Exchange Book with a price in the
discretionary price range against which the Order with Discretion could
execute. If the System observes such an Order, it will generate a
Discretionary IOC with a price equal to the price of the Order on the
Exchange Book and a size equal to the applicable size of the Order on
the Exchange Book. The System will also determine if there are any
accessible quotations with prices that are within the discretionary
price range at destinations on the applicable routing table for the
selected routing strategy. If there are such quotations, the System
will generate one or more Discretionary IOCs to route to such
destinations, with a price and size that match the price and size of
the market center's quotation. If necessary to maximize execution
opportunities and comply with Regulation NMS, the System may mark such
Discretionary IOCs as Intermarket Sweep Orders. If the Discretionary
IOC(s) do not exhaust the full size of the Order with Discretion, the
remaining size of the Order with Discretion will post to the Exchange
Book in accordance with the parameters that apply to the underlying
Order Type. The System will then examine whether at any time there is
an Order on the Exchange Book or an accessible quotation at another
trading venue with a price in the discretionary price range against
which the Order with Discretion could execute. In examining the
Exchange Book, the System will examine Displayed Orders but will not
examine Non-Displayed Orders. If the System observes such an Order or
quotation, it will generate a Discretionary IOC with a price equal to
the price of such the Order or quotation and a size equal to the
applicable size of the Order on the Exchange Book or the displayed size
of the quotation.
Reserve Size
    Reserve Size is an Order Attribute that permits a Participant to
stipulate that an Order Type that is displayed may have its displayed
size replenished from additional non-displayed size. An Order with
Reserve Size may be referred to as a ``Reserve Order.'' At the time of
entry, the displayed size of such an Order selected by the Participant
must be one or more normal units of trading; an Order with a displayed
size of a mixed lot will be rounded down to the nearest round lot. A
Reserve Order with displayed size of an odd lot will be accepted but
with the full size of the Order displayed. Reserve Size is not
available for Orders that are not displayed; provided, however, that if
a Participant enters Reserve Size for a Non-Displayed Order with a
Time-in-Force of IOC, the full size of the Order, including Reserve
Size, will be processed as a Non-Displayed Order.
    Whenever a Participant enters an Order with Reserve Size, the
System will process the Order as two Orders: A Displayed Order (with
the characteristics of its selected Order Type) and a Non-Displayed
Order. Upon entry, the full size of each such Order will be processed
for potential execution in accordance with the parameters applicable to
the Order Type. For example, a Participant might enter a Price to
Display Order with 200 shares displayed and an additional 3,000 shares
non-displayed. Upon entry, the Order would attempt to execute against
available liquidity on the Exchange Book, up to 3,200 shares.
Thereafter, unexecuted portions of the Order would post to the Exchange
Book as a Displayed Price to Display Order and a Non-Displayed Order;
provided, however, that if the remaining total size is less than the
display size stipulated by the Participant, the Displayed Order will
post without Reserve Size. Thus, if 3,050 shares executed upon entry,
the Price to Display Order would post with a size of 150 shares and no
Reserve Size.
    When an Order with Reserve Size is posted, if there is an execution
against the Displayed Order that causes its size to decrease below a
normal unit of trading, another Displayed Order will be entered at the
level stipulated by the Participant while the size of the Non-Displayed
Order will be reduced by the same amount. Any remaining size of the
original Displayed Order will remain on the Exchange Book. The new
Displayed Order will receive a new timestamp, but the Non-Displayed
Order (and the original Displayed Order, if any) will not; although the
new Displayed Order will be processed by the System as a new Order in
most respects at that time, if it was designated as Routable, the
System will not automatically route it upon reentry.\65\ For example,
if a Price to Comply Order with Reserve Size posted with a Displayed
Size of 200 shares, along with a Non-Displayed Order of 3,000 and the
150 shares of the Displayed Order was executed, the remaining 50 shares
of the original Price to Comply Order would remain, a new Price to
Comply Order would post with a size of 200 shares and a new timestamp,
and the Non-Displayed Order would be decremented to 2,800 shares.\66\
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    \65\ Of course, if the Order uses a reactive routing strategy,
such as BSTG, that routes out whenever the System observes a
quotation against which the Order is marketable at another market
center, the Order could be routed at any time.
    \66\ Because the Displayed Order is reentered and the Non-
Displayed Order is not, there are circumstances in which the
Displayed Order may receive a different price than the Non-Displayed
Order. For example, if, upon reentry, a Price to Display Order would
lock or cross a newly posted Protected Quotation, the price of the
Order will be adjusted but its associated Non-Displayed Order would
not be adjusted. In that circumstance, it would be possible for the
better priced Non-Displayed Order to execute prior to the Price to
Display Order.
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    A Participant may stipulate that the Displayed Order should be
replenished to its original size. Alternatively, the Participant may
stipulate that the original and subsequent displayed size will be an
amount randomly determined based on factors selected by the
Participant.\67\ Specifically, the Participant would select both a
theoretical displayed size and a range size, which may be any share
amount less than the theoretical displayed size. The actual displayed
size will then be determined by the System within a range in which the
minimum size is the theoretical displayed size minus the range size,
and the maximum size is (i) the minimum size plus (ii) an amount that
is two times the range size minus one round lot. For example, if the
theoretical displayed size is 600 shares and the range size is 500, the
minimum displayed size will be 100 shares (600-500), and the maximum
size will be 1,000 shares ((600-500) + ((2 x 500)-100)).
---------------------------------------------------------------------------

    \67\ The ability to specify a random size reflects a substantive
clarification of existing rules.
---------------------------------------------------------------------------

    When the Displayed Order with Reserve Size is executed and
replenished, applicable market data disseminated by the Exchange will
show the execution and decrementation of the Displayed Order, followed
by replenishment of the Displayed Order. In all cases, if the remaining
size of the Non-Displayed Order is less than the fixed or random amount
stipulated by the Participant, the full remaining size of the Non-
Displayed Order will be displayed and the Non-Displayed Order will be
removed.
Attribution
    Attribution is an Order Attribute that permits a Participant to
designate that the price and size of the Order will be displayed next
to the Participant's MPID in market data disseminated by the Exchange.
An Order with Attribution is referred to as an ``Attributable Order''
and an Order without attribution is referred to as a ``Non-Attributable
Order.''

Intermarket Sweep Order
    Designation of an Order as an Intermarket Sweep Order, or ISO, is
an Order Attribute that allows the Order to be executed within the
System by Participants at multiple price levels without respect to
Protected Quotations of other market centers within the meaning of Rule
600(b) under Regulation NMS. ISOs are immediately executable within the
System against Orders against which they are marketable. An Order
designated as an ISO may not be assigned a Routing Order Attribute.\68\
In connection with the trading of securities governed by Regulation
NMS, Intermarket Sweep Orders shall be executed exclusively within the
System and the entering Participant shall be responsible for compliance
with Rules 610 and 611 under Regulation NMS with respect to order
protection and locked and crossed markets with respect to such Orders.
---------------------------------------------------------------------------

    \68\ However, Orders that are assigned a Routing Order Attribute
may be designated as ISOs by the Exchange when routed to other
market centers to maximize their opportunities for execution.
---------------------------------------------------------------------------

    Simultaneously with the routing of an ISO to the System, one or
more additional limit orders, as necessary, are routed by the entering
Participant to execute against the full displayed size of any Protected
Quotation with a price that is superior to the price of the Order
identified as an Intermarket Sweep Order (as defined in Rule 600(b)
under Regulation NMS). These additional routed orders must be
identified as Intermarket Sweep Orders.
    Upon receipt of an ISO, the System will consider the stated price
of the ISO to be available for other Orders to be entered at that
price, unless the ISO is not itself accepted at that price level (for
example, a Post-Only Order that has its price adjusted to avoid
executing against an Order on the Exchange Book) or the ISO is not
Displayed.\69\
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    \69\ Thus, for example, a Non-Displayed Order with a Time-in-
Force of IOC marked ISO could execute against Orders on the Exchange
Book. However, the price level of the Non-Displayed Order would be
considered open for Orders to post only if applicable market data
showed that the price level was available.
---------------------------------------------------------------------------

    In addition, as described with respect to various Order Types, such
as the Price to Comply Order, Orders on the Exchange Book that had
their price adjusted may be eligible to be reentered at the stated
price of the ISO. For example, if a Price to Comply Order to buy at $11
would lock a Protected Offer at $11, the Price to Comply Order will be
posted with a non-displayed price of $11 and a displayed price of
$10.99. If the System then receives an ISO to buy at $11, the ISO will
be posted at $11 and the Price to Comply Order will be reentered at $11
(if the Participant opted to have its Orders reentered). The respective
priority of such reentered Orders will be maintained among multiple
repriced Orders; however, other new Orders may also be received after
receipt of the ISO but before the repricing of the Price to Comply
Order is complete; accordingly, the priority of an Order on the
Exchange Book vis-[agrave]-vis a newly entered Order is not guaranteed.
Display
    Display is an Order Attribute that allows the price and size of an
Order to be displayed to market participants via market data feeds. All
Orders that are Attributable are also displayed, but an Order may be
displayed without being Attributable. As discussed in Rule 4702, a Non-
Displayed Order is a specific Order Type, but other Order Types may
also be non-displayed if they are not assigned a Display Order
Attribute; however, depending on context, all Orders that are not
displayed may be referred to as ``Non-Displayed Orders.'' An Order with
a Display Order Attribute may be referred to as a ``Displayed Order.''
Statistics on Order Types Usage
    Although the Exchange, like many exchanges, offers a wide range of
possible combinations of Order Types and Order Attributes in order to
provide options that support of a range of legitimate trading
strategies, the Exchange believes that an analysis of the extent of
usage of particular Order Type permutations is important to promoting a
deeper understanding of current market structure. Based on analysis of
a month of data for the period from August 26, 2013 through September
29, 2013, the Exchange offers the following observations about the
usage of different Order Types on its market:
     38.63% of entered Order volume was Price to Comply Orders
with no Order Attributes other than price and size. Such Orders were
involved in 28.38% of execution volume.\70\
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    \70\ Data about executions reflect both sides of a trade in
instances where trades executed on the Exchange and one side of a
trade in instances where a Routable Order executed at another market
center. The data does not include information about Orders with a
Time-in-Force of GTC to the extent that such Orders executed on a
day after the day of their original entry.
---------------------------------------------------------------------------

     0.02% of entered Order volume was Post-Only Orders with no
Order Attributes other than price and size. Such Orders were involved
in 0.69% of execution volume.
     Non-Displayed Orders with a Time-in-Force of IOC and no
special Order Attributes accounted for 9.84% of entered Order volume
and 21.58% of execution volume. Non-Displayed Orders with a Time-in-
Force of IOC marked as ISOs but with no other special Order Attributes
accounted for 1.44% of entered Order volume and 25.02% of execution
volume.
     Non-Displayed Orders with a Time-in-Force longer than IOC
but no special Order Attributes accounted for 25.58% of entered Order
volume and 3.25% of execution volume.
     Use of Post-Only Orders marked ISO but with no other
special Order Attributes accounted for less than 0.01% of entered Order
volume and execution volume. Price to Comply Orders marked ISO but with
no other special Order Attributes accounted for 17.8% of entered Order
volume and 13.42% of execution volume.
     All other Order Type and Order Attribute combinations
accounted for 6.68% of entered Order volume and 7.66% of execution
volume.
    Thus, while a range of combinations of Order Types and Order
Attributes can exist on the Exchange, the Exchange believes that these
data support the conclusion that many of these possible combinations
are not used to any appreciable extent. Rather, the vast majority of
Order entry and Order execution volume is attributable to a small
number of simple combinations: IOC Orders designed to access posted
liquidity and various forms of priced limit Orders designed to access
available liquidity and thereafter post to the Exchange Book to provide
liquidity, which promote price discovery by offering displayed
liquidity at a price that may narrow the bid/offer spread on the
Exchange and/or provide price improvement to subsequent Orders. The
inclusion of an ISO Order Attribute on Orders is done in full
compliance with Regulation NMS and serves to provide notice to the
Exchange that liquidity has been accessed liquidity on other markets at
a given price level in order to allow it to post liquidity on the
Exchange at that price. While the Exchange does not believe that its
Order Type offerings are excessively complex, given the relatively
limited usage of certain Order Types and Order Attributes, the Exchange
is continuing to analyze whether changes may be made to eliminate any
Order Types, Order Attributes, or permissible combinations in a manner
that would further promote the goals of transparency and ease of use
for Participants.

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\71\ in general, and with
Section 6(b)(5) of the Act \72\ in particular, in that the proposal 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 regulating, clearing,
settling, processing information with respect to, and 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. The proposed
rule change also is designed to support the principles of Section
11A(a)(1) \73\ of the Act in that it seeks to assure fair competition
among brokers and dealers and among exchange markets. In particular,
the Exchange believes that the reorganized and enhanced descriptions of
its Order Types, Order Attributes, and related System functionality
will promote just and equitable principles of trade and perfect the
mechanisms of a free and open market and the national market system by
providing greater clarity concerning certain aspects of the System's
operations. The Exchange further believes that the proposed rule change
will contribute to the protection of investors and the public interest
by making the Exchange's rules easier to understand. The Exchange
further believes that the proposed rules, together with the presented
statistics regarding Order Type and Order Attribute usage, will promote
the efficient execution of investor transactions and further enhance
public understanding of the Exchange's operations, and thereby
strengthen investor confidence in the Exchange and in the national
market system. In addition, the Exchange believes that additional
specificity in its rules will promote a better understanding of the
Exchange's operation, thereby facilitating fair competition among
brokers and dealers and among exchange markets.
---------------------------------------------------------------------------

    \71\ 15 U.S.C. 78f.
    \72\ 15 U.S.C. 78f(b)(5).
    \73\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

    Most of the System functionality described in the proposed rule
change has already been described in previous proposed rule changes by
the Exchange and approved or permitted to take effect on an immediate
basis by the Commission. However, the Exchange believes that the
reiteration of several principles underlying its Order Types and Order
Attributes might be helpful in promoting a fuller understanding of
these rules' operation and their consistency with the Act.
    The functionality underlying Price to Comply Orders and Price to
Display Orders provides a means by which Participants may enter a
displayed limit order in compliance with Regulation NMS without the
Participant definitively ascertaining whether the price of the Order
would lock or cross a Protected Quotation. In the absence of the
repricing functionality associated with the Order, the Exchange would
need to reject the Order if it locked or crossed a Protected Quotation.
    By accepting a Price to Comply Order with a locking, non-displayed
price and displayed price that is one minimum increment inferior to the
locking price, the Exchange allows this Order Type to achieve several
purposes. First, the displayed price of the Order promotes price
discovery by establishing a new NBBO or adding to liquidity available
at the NBBO. Second, the non-displayed price of the Order allows the
Order to provide price improvement when the Order is executed. A Price
to Display Order similarly promotes price discovery by establishing a
new NBBO or adding liquidity available at the NBBO. It also provides
one of the Order Types through which a Market Maker may offer displayed
liquidity that is Attributable to its MPID. Notably, given the price
adjustment functionality of the Order, it allows a Market Maker to
offer Attributable liquidity at the NBBO.
    In addition, the repricing functionality associated with Price to
Comply Orders and Price to Display Orders, whereby an Order that has
been repriced by the System upon entry may be cancelled or reentered if
a previously unavailable price level becomes available, promotes price
discovery and provision of greater liquidity by facilitating the
display of an Order at its chosen limit price. Because a reentered
Order always receives a new timestamp, moreover, the functionality does
not present fairness concerns that might arise if an Order that was not
displayed became displayed at a different price level while retaining
the timestamp that it received when originally entered.
    The Non-Displayed Order provides a means by which Participants may
access and/or offer liquidity without signaling to other Participants
the extent of their trading interest. Moreover, because the Non-
Displayed Order may lock a Protected Quotation, it provides a means by
which a Participant may provide price improvement. For example, if the
Best Bid was $11 and the Best Offer was $11.01, a Non-Displayed Order
to buy at $11.01 would provide $0.01 price improvement to an incoming
sell Order priced at the Best Bid.
    In addition, the repricing functionality associated with Non-
Displayed Order promotes provision of greater liquidity and eventual
price discovery (via reporting of Order executions) because it
facilitates the posting of a Non-Displayed Order at its chosen limit