[Federal Register Volume 81, Number 60 (Tuesday, March 29, 2016)]
[Notices]
[Pages 17523-17525]
[FR Doc No: 2016-06990]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77425; File No. SR-NYSEArca-2016-47]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot
Period for the Exchange's Retail Liquidity Program, Which Is Currently
Scheduled To Expire on March 31, 2016, Until August 31, 2016

March 23, 2016.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 21, 2016, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to extend the pilot period for the Exchange's
Retail Liquidity Program (the ``Retail Liquidity Program'' or the
``Program''), which is currently scheduled to expire on March 31, 2016,
until August 31, 2016. The

proposed rule change is available on the Exchange's Web site at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.

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

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

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

1. Purpose
    The purpose of this filing is to extend the pilot period of the
Retail Liquidity Program, currently scheduled to expire on March 31,
2016, until August 31, 2016.
Background
    In December 2013, the Commission approved the Retail Liquidity
Program on a pilot basis.\4\ The Program is designed to attract retail
order flow to the Exchange, and allows such order flow to receive
potential price improvement. The Program is currently limited to trades
occurring at prices equal to or greater than $1.00 per share. Under the
Program, Retail Liquidity Providers (``RLPs'') are able to provide
potential price improvement in the form of a non-displayed order that
is priced better than the Exchange's best protected bid or offer
(``PBBO''), called a Retail Price Improvement Order (``RPI''). When
there is an RPI in a particular security, the Exchange disseminates an
indicator, known as the Retail Liquidity Identifier, indicating that
such interest exists. Retail Member Organizations (``RMOs'') can submit
a Retail Order to the Exchange, which would interact, to the extent
possible, with available contra-side RPIs.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 71176 (December 23,
2013), 78 FR 79524 (December 30, 2013) (SR-NYSEArca-2013-107) (``RLP
Approval Order'').
---------------------------------------------------------------------------

    The Retail Liquidity Program was approved by the Commission on a
pilot basis. Pursuant to NYSE Arca Equities Rule 7.44(m), the pilot
period for the Program was originally scheduled to end twelve months
after the date of implementation. Because the Program was implemented
on April 14, 2014, the first pilot period for the Program ended on
April 14, 2015 and the Exchange extended the pilot period to March 31,
2016.\5\ In 2015, the Exchange adopted NYSE Arca Equities Rule 7.44P,
which will govern the Retail Liquidity Program when the Exchange
implements its Pillar trading platform.\6\
---------------------------------------------------------------------------

    \5\ The Exchange announced the implementation date by Trader
Update, which is available here: https://www.nyse.com/publicdocs/nyse/notifications/trader-update/2014_04_07_Arca_RLP%20GO%20LIVE.pdf. See Securities Exchange Act
Release No. 75994 (September 28, 2015), 80 FR 59834 (October 2,
2015) (SR-NYSEArca-2015-84).
    \6\ See Securities Exchange Act Release No. 76267 (Oct. 26,
2015), 80 FR 66951 (Oct. 30, 2015) (SR-NYSEArca-2015-56) (``Pillar
Approval Order''). NYSE Arca Equities Rule 7.44P(m) was recently
amended to reflect the current date the Retail Liquidity Program
expires. See Securities Exchange Act Release No. 77236 (February 25,
2016), 81 FR 10943 (March 2, 2016) (SR-NYSEArca-2016-30).
---------------------------------------------------------------------------

Proposal To Extend the Operation of the Program
    The Exchange established the Retail Liquidity Program in an attempt
to attract retail order flow to the Exchange by potentially providing
price improvement to such order flow. The Exchange believes that the
Program promotes competition for retail order flow by allowing Exchange
members to submit RPIs to interact with Retail Orders. Such competition
has the ability to promote efficiency by facilitating the price
discovery process and generating additional investor interest in
trading securities, thereby promoting capital formation. The Exchange
believes that extending the pilot is appropriate because it will allow
the Exchange and the Commission additional time to analyze data
regarding the Program that the Exchange has committed to provide.\7\ As
such, the Exchange believes that it is appropriate to extend the
current operation of the Program.\8\ Through this filing, the Exchange
seeks to amend NYSE Arca Equities Rule 7.44(m) and Rule 7.44P(m) and
extend the current pilot period of the Program until March 31, 2016.
---------------------------------------------------------------------------

    \7\ See RLP Approval Order, supra n. 4, 78 FR at 79529.
    \8\ Concurrently with this filing, the Exchange has submitted a
request for an extension of the exemption under Regulation NMS Rule
612 previously granted by the Commission that permits it to accept
and rank the undisplayed RPIs. See Letter from Martha Redding, Asst.
Corporate Secretary, NYSE Group, Inc. to Brent J. Fields, Secretary,
Securities and Exchange Commission, dated March 17, 2016.
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the
Act,\9\ in general, and furthers the objectives of Section 6(b)(5),\10\
in particular, in that it is designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system, and, in
general, to protect investors and the public interest. The Exchange
believes that extending the pilot period for the Retail Liquidity
Program is consistent with these principles because the Program is
reasonably designed to attract retail order flow to the exchange
environment, while helping to ensure that retail investors benefit from
the better price that liquidity providers are willing to give their
orders. Additionally, as previously stated, the competition promoted by
the Program may facilitate the price discovery process and potentially
generate additional investor interest in trading securities. The
extension of the pilot period will allow the Commission and the
Exchange to continue to monitor the Program for its potential effects
on public price discovery, and on the broader market structure.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change
simply extends an established pilot program for an additional six
months, thus allowing the Retail Liquidity Program to enhance
competition for retail order flow and contribute to the public price
discovery process.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the proposed rule change does not: (i)

Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative prior to 30 days from the date on which it was filed,
or such shorter time as the Commission may designate, if consistent
with the protection of investors and the public interest, the proposed
rule change has become effective pursuant to Section 19(b)(3)(A) of the
Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative before the current expiration of the
pilot period. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest, because waiver would allow the pilot period to continue
uninterrupted after its current expiration date of March 31, 2016,
thereby avoiding any potential investor confusion that could result
from temporary interruption in the pilot program. For this reason, the
Commission hereby waives the 30-day operative delay and designates the
proposal operative upon filing.\17\
---------------------------------------------------------------------------

    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEArca-2016-47 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2016-47. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEArca-2016-47 and should
be submitted on or before April 19, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Brent J. Fields,
Secretary.
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

[FR Doc. 2016-06990 Filed 3-28-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register: February 15, 2006 (Volume 71, Number 31)]
[Notices]
[Page 8012-8014]
[DOCID:fr15fe06-139]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53252; File No. SR-CBOE-2006-05]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change To Extend the Duration of the SizeQuote Mechanism Pilot

February 8, 2006.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on January 30, 2006, the Chicago Board Options Exchange,
Incorporated (``Exchange'' or ``CBOE'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the Exchange. The Exchange filed the proposal as a ``non-
controversial'' proposed rule change pursuant to section 19(b)(3)(A) of
the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders it
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    The Exchange proposes to extend the pilot in CBOE Rule 6.74(f)
pertaining to the SizeQuote Mechanism, which is a process by which a
Floor Broker may execute and facilitate large-sized orders in open
outcry. The Exchange is proposing to extend the pilot program, which
would otherwise expire on February 15, 2006, through February 15, 2007.
No other changes are being made to the pilot program through this rule
filing.\5\ The text of the proposed rule change is available on the
Exchange's Web site (http://www.cboe.com), at the Exchange's Office of

the Secretary and at the Commission.
---------------------------------------------------------------------------

    \5\ A separate rule change proposal has been filed and is
currently pending with the Commission that would make amendments to
the SizeQuote Mechanism. See SR-CBOE-2005-115 (proposal to modify
the pilot program in various respects, including to permit a Floor
Broker to execute the entire SizeQuote Order at a price at least one
trading increment better than the best price communicated by the in-
crowd market participants (``ICMPs'') in their responses to the
SizeQuote request).
---------------------------------------------------------------------------

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

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

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

1. Purpose
    CBOE Rule 6.74(f), which relates to the open outcry ``SizeQuote''
Mechanism, was approved on a pilot basis in February 2005; was recently
expanded, in January 2006, to include solicited orders; and will expire
on February 15, 2006.\6\ This pilot program

provides a process by which a Floor Broker, using his or her exercise
of due diligence to execute orders at the best price(s), may execute
and facilitate large-sized orders in open outcry. Under the pilot
program, the ICMPs have priority to trade a SizeQuote Order at the best
price communicated by the ICMPs in their response to a Floor Broker's
SizeQuote request and at one increment better, while a Floor Broker can
execute the entire SizeQuote Order with a facilitation order, one or
more solicited orders, or a combination of solicited and facilitation
orders at a price two trading increments better than the best price
provided by the ICMPs in their response to the SizeQuote request. For
purposes of the pilot program, the minimum qualifying order size is 250
contracts \7\ and Floor Brokers must stand ready to facilitate the
entire size of the order for which they request SizeQuotes.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release Nos. 51205 (February 15,
2005), 70 FR 8647 (February 22, 2005) (approving SR-CBOE-2004-72 on
a pilot basis through February 15, 2006) and 53135 (January 17,
2006), 71 FR 3908 (January 24, 2006) (approving SR-CBOE-2005-83,
which modified the pilot program to enable a Floor Broker to execute
a SizeQuote Order with either a Floor Broker's facilitation order,
one or more solicited orders, or a combination of the Floor Broker's
facilitation order and such solicited order(s)).
    \7\ The appropriate Exchange committee determines the classes in
which SizeQuote operates and may vary the minimum qualifying order
size, provided that such number may not be less than 250 contracts.
---------------------------------------------------------------------------

    The instant proposed rule change seeks to extend the existing pilot
program, which would otherwise expire on February 15, 2006, through
February 15, 2007. The Exchange notes that, as part of the original
pilot program approval order,\8\ the Exchange represented that it would
provide the Commission a report at the end of the initial pilot period
summarizing the effectiveness of the SizeQuote program. In that regard,
though the SizeQuote Mechanism has been made available during the pilot
period in all equity option classes traded on the Exchange for orders
of 250 contracts or more, Floor Brokers have not generally availed
themselves of the SizeQuote Mechanism to facilitate large-sized
orders.\9\ However, the Exchange continues to believe that the
SizeQuote Mechanism enhances ICMPs' ability and incentive to quote
competitively and participate in open outcry trades while at the same
time creates a process that gives greater certainty to Floor Brokers in
the execution of large orders in that ICMPs only have one opportunity
to respond with a quote response (which further enhances an ICMP's
incentive to quote competitively). The Exchange is therefore seeking to
extend the existing pilot program, including the amendment made thereto
pursuant to SR-CBOE-2005-83,\10\ for another year, through February 15,
2007, in order to continue its evaluation of the utility of the
SizeQuote Mechanism.
---------------------------------------------------------------------------

    \8\ See note 6, supra.
    \9\ The Exchange believes the SizeQuote Mechanism has not been
actively utilized due to some of the limitations and risks inherent
in the original design of the pilot program. Thus, apart from the
instant proposal to extend the pilot period, CBOE recently expanded
the pilot program to include solicited orders. Originally the pilot
program only applied to facilitation orders. See note 6, supra, and
accompanying text. CBOE has also proposed to modify the pilot
program in various other respects. See note 5, supra.
    \10\ See note 6, supra.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
section 6(b) of the Act \11\ in general and furthers the objectives of
section 6(b)(5) of the Act \12\ in particular in that it is designed to
promote just and equitable principles of trade, serve to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and protect investors and the public
interest.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    CBOE does not believe that the proposed rule change will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the foregoing proposed rule change, as amended, does not:
    (i) Significantly affect the protection of investors or the public
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to section 19(b)(3)(A) of the Act \13\ and
Rule 19b-4(f)(6) thereunder.\14\ At any time within 60 days after the
filing of the proposed rule change, the Commission may summarily
abrogate the rule change if it appears to the Commission such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
    Pursuant to Rule 19b-4(f)(6)(iii) under the Act, the Exchange is
required to give the Commission written notice of its intent to file
the proposed rule change, along with a brief description and text of
the proposed rule change, at least five business days prior to the
date of filing of the proposed rule change, or such shorter time as
designated by the Commission. The Commission notes that the Exchange
provided notice of the filing at least five business days prior to
the date of filing.
---------------------------------------------------------------------------

    A proposed rule change filed under section 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of its filing.\15\
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest.\16\ CBOE has requested that the Commission waive
the 30-day operative delay. The Commission believes that waiving the
30-day operative delay is consistent with the protection of investors
and the public interest so that the pilot program may continue until
February 15, 2007 without interruption.\17\
---------------------------------------------------------------------------

    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ Id.
    \17\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to<EMAIL_ADDRESS>Please include

File Number SR-CBOE-2006-05 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CBOE-2006-05. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all

written statements with respect to the proposed rule change that are
filed with the Commission, and all written

communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for inspection and copying in the Commission's Public
Reference Section, 100 F Street, NE., Washington, DC 20549. Copies of
such filing also will be available for inspection and copying at the
principal office of the CBOE. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-CBOE-2006-05 and should be submitted on or before March
8, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-2111 Filed 2-14-06; 8:45 am]

BILLING CODE 8010-01-P