[Federal Register Volume 81, Number 179 (Thursday, September 15, 2016)]
[Notices]
[Pages 63552-63560]
[FR Doc No: 2016-22152]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78803; File No. SR-NYSEMKT-2016-83]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of
Proposed Rule Change Amending Rule 67--Equities Relating to the Tick
Size Pilot Program

September 9, 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 August 25, 2016, NYSE MKT LLC (the ``Exchange'' or
``NYSE MKT'') filed with the Securities and Exchange Commission (the
``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend Rule 67--Equities to (1) describe
system functionality requirements necessary to implement the Plan to
Implement a Tick Size Pilot Program submitted to the Commission
pursuant to Rule 608 of Regulation NMS \4\ under the Act (``Plan''),
and (2) clarify the operation of certain exceptions to the Trade-at

Prohibition \5\ on Pilot Securities in the third test group. 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.
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    \4\ 17 CFR 242.608.
    \5\ Rule 67(e)(4)(A)--Equities defines the ``Trade-at
Prohibition'' to mean the prohibition against executions by a
Trading Center of a sell order for a Pilot Security at the price of
a Protected Bid or the execution of a buy order for a Pilot Security
at the price of a Protected Offer during regular trading hours.
Unless otherwise specified, capitalized terms used in this rule
filing are based on the defined terms of the Plan.
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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 Exchange proposes to amend Rule 67--Equities (``Rule 67'') to
(1) describe system functionality requirements necessary to implement
the Plan \6\ and (2) clarify the operation of certain exceptions to the
Trade-at Prohibition \7\ on Pilot Securities in the third test group
(``Test Group Three'').\8\
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    \6\ See Securities and Exchange Act Release No. 74892 (May 6,
2015), 80 FR 27513 (File No. 4-657) (``Tick Plan Approval Order'').
See, also, Securities and Exchange Act Release No. 76382 (November
6, 2015) (File No. 4-657), 80 FR 70284 (File No. 4-657) (November
13, 2015), which extended the pilot period commencement date from
May 6, 2015 to October 3, 2016. The Plan was submitted to the
Commission pursuant to Rule 608 of Regulation NMS. 17 CFR 242.608.
    \7\ See note 5, supra.
    \8\ See infra notes 14-17 and accompanying text for a
description of Test Group Three.
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    The Plan is designed to study and assess the impact of increment
conventions on the liquidity and trading of the common stocks of small
capitalization companies and is currently scheduled to begin on October
3, 2016. Rule 67, adopted earlier this year to implement the quoting
and trading requirements of the Plan, will be in effect on a two-year
pilot period that coincides with pilot period for the Plan.
Background
    On August 25, 2014, NYSE Group, Inc., on behalf of Bats BZX
Exchange, Inc. (f/k/a BATS Exchange, Inc.), Bats BYX Exchange, Inc. (f/
k/a BATS Y-Exchange, Inc.), Chicago Stock Exchange, Inc., Bats EDGA
Exchange, Inc. (f/k/a EDGA Exchange, Inc.), Bats EDGX Exchange, Inc.
(f/k/a EDGX Exchange, Inc.), the Financial Industry Regulatory
Authority, Inc. (``FINRA''), NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC,
the Nasdaq Stock Market LLC, New York Stock Exchange LLC, NYSE Arca,
Inc., and the Exchange (collectively ``Participants''), filed the Plan
with the Commission, pursuant to Section 11A of the Act \9\ and Rule
608 of Regulation NMS thereunder.\10\ The Participants filed the Plan
to comply with an order issued by the Commission on June 24, 2014 (the
``June 2014 Order'').\11\ The Plan was published for comment in the
Federal Register on November 7, 2014,\12\ and approved by the
Commission, as modified, on May 6, 2015.\13\
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    \9\ 15 U.S.C. 78k-1.
    \10\ See Letter from Brendon J. Weiss, Vice President,
Intercontinental Exchange, Inc., to Secretary, Commission, dated
August 25, 2014.
    \11\ See Securities Exchange Act Release No. 72460 (June 24,
2014), 79 FR 36840 (June 30, 2014).
    \12\ See Securities and Exchange Act Release No. 73511 (November
3, 2014), 79 FR 66423 (File No. 4-657) (Tick Plan Filing).
    \13\ See Tick Plan Approval Order, supra note 6. See also
Securities Exchange Act Release No. 77277 (March 3, 2016), 81 FR
12162 (March 8, 2016) (File No. 4-657), amending the Plan to add
National Stock Exchange, Inc. as a Participant.
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    The Plan is designed to allow the Commission, market participants,
and the public to study and assess the impact of increment conventions
on the liquidity and trading of the common stocks of small
capitalization companies. The Tick Size Pilot Program will enable the
Commission to assess whether wider tick sizes would enhance the market
quality of Pilot Securities for the benefit of issuers and investors.
Each Participant is required to comply with, and to enforce compliance
by its member organizations, as applicable, with the provisions of the
Plan.
    The Tick Size Pilot Program will include stocks of companies with
$3 billion or less in market capitalization, an average daily trading
volume of one million shares or less, and a volume weighted average
price of at least $2.00 for every trading day. The Tick Pilot Program
will consist of a control group of approximately 1400 Pilot Securities
and three test groups with 400 Pilot Securities in each selected by a
stratified sampling.\14\
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    \14\ See Section V of the Plan for identification of Pilot
Securities, including criteria for selection and grouping.
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    During the pilot, Pilot Securities in the control group will be
quoted at the current tick size increment of $0.01 per share and will
trade at the currently permitted increments. Pilot Securities in the
first test group (``Test Group One'') will be quoted in $0.05 minimum
increments but will continue to trade at any price increment that is
currently permitted.\15\ Pilot Securities in the second test group
(``Test Group Two'') will be quoted in $0.05 minimum increments and
will trade at $0.05 minimum increments subject to a midpoint exception,
a retail investor exception, and a negotiated trade exception.\16\
Pilot Securities in Test Group Three will be subject to the same terms
as Test Group Two and also will be subject to the ``Trade-at''
requirement to prevent price matching by a person not displaying at a
price of a Trading Center's ``Best Protected Bid or ``Best Protected
Offer,'' unless an enumerated exception applies.\17\ In addition to the
exceptions provided under Test Group Two, an exception for Block Size
orders and exceptions that closely resemble those under Rule 611 of
Regulation NMS (``Rule 611'') \18\ will apply to the Trade-at
requirement.
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    \15\ See Section VI(B) of the Plan. Pilot Securities in Test
Group One will be subject to a midpoint exception and a retail
investor exception.
    \16\ See Section VI(C) of the Plan.
    \17\ See Section VI(D) of the Plan.
    \18\ 17 CFR 242.611.
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    The Plan requires the Exchange to establish, maintain, and enforce
written policies and procedures that are reasonably designed to comply
with applicable quoting and trading requirements specified in the Plan.
Accordingly, the Exchange adopted paragraphs (a) and (c)-(e) of Rule 67
to require member organizations to comply with the quoting and trading
provisions of the Plan.\19\ The Exchange also adopted paragraph (b) of
Rule 67 to require member organizations to comply with the data
collection provisions under Appendix B and C of the Plan.\20\
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    \19\ See, Securities Exchange Act Release No. 77949 (May 31,
2016), 81 FR 36367 (June 6, 2016) (SR-NYSEMKT-2016-56) (``Quoting &
Trading Rules Proposal'').
    \20\ See Securities Exchange Act Release No. 77478 (March 30,
2016), 81 FR 19665 (April 5, 2016) (SR-NYSEMKT-2016-40).
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Trade-At Intermarket Sweep Orders
    The Plan defines a Trade-at Intermarket Sweep Order (``ISO'') as a
limit order for a Pilot Security that, when routed to a Trading Center,
is

identified as an ISO, and simultaneous with the routing of the limit
order identified as an ISO, one or more additional limit orders, as
necessary, are routed to execute against the full displayed size of any
protected bid (in the case of a limit order to sell) or the full
displayed size of any protected offer (in the case of a limit order to
buy) for the Pilot Security with a price that is equal to the limit
price of the limit order identified as an ISO. These additional routed
orders also must be marked as ISOs.\21\
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    \21\ See Plan, Section I(MM).
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    The Exchange clarified the use of an ISO in connection with the
``Trade-at'' requirement in Test Group Three by adopting a
comprehensive definition of ``Trade-at ISO'' under Rule
67(a)(1)(D).\22\ The Exchange now proposes to further clarify that,
when a Trade-at ISO is routed to a Trading Center, when simultaneously
routing additional limit orders to execute against the full displayed
size of any protected bid, in the case of a limit order to sell, or the
full displayed size of any protected offer, in the case of a limit
order to buy, such additional limit orders can be routed as either
Trade-at ISOs or ISOs. Therefore, the Exchange is proposing to
distinguish Trade-at ISOs from ISOs by adding the phrase ``or
Intermarket Sweep Orders'' to the end of Rule 67(a)(1)(D)(ii), so that
any such additional routed orders sent to execute against the Trade-at
ISO limit order would need to be marked as either Trade-at ISOs or
ISOs.
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    \22\ Rule 67(a)(1)(D) defines Trade-at ISO to mean a limit order
for a Pilot Security that meets the following requirements:
    (i) When routed to a Trading Center, the limit order is
identified as a Trade-at Intermarket Sweep Order; and
    (ii) Simultaneously with the routing of the limit order
identified as a Trade-at Intermarket Sweep Order, one or more
additional limit orders, as necessary, are routed to execute against
the full size of any protected bid, in the case of a limit order to
sell, or the full displayed size of any protected offer, in the case
of a limit order to buy, for the Pilot Security with a price that is
better than or equal to the limit price of the limit order
identified as a Trade-at Intermarket Sweep Order. These additional
routed orders also must be marked as Trade-at Intermarket Sweep
Orders.
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    Likewise, the Exchange is proposing to amend Rule 67(e)(4)(C)(x) to
add the phrase ``or Intermarket Sweep Orders'' into the Trade-at ISO
exemption to the Trade-at Prohibition, to clarify that a Trading Center
can simultaneously route Trade-at ISOs or ISOs to execute against the
full displayed size of the Protected Quotation that was traded at.
Block Size Exemption to Trade-At Prohibition
    The Plan defines Block Size as an order (1) of at least 5,000
shares, or (2) for a quantity of stock having a market value of at
least $100,000. The Block Size exception to the Trade-at Prohibition
permits a Trading Center to immediately execute a Block size order
against displayed and undisplayed liquidity at a price equal to the
National Best Bid or National Best Offer, as applicable, without
satisfying all Protected Quotations at the National Best Bid or
National Best Offer, as applicable.\23\
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    \23\ See Plan, Section VI(D).
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    The Exchange proposes to amend Rule 67(e)(4)(C)(iii) to clarify how
the Block Size exception to the Trade-at Prohibition would operate
under the requirements of the Plan. The Exchange proposes to delete
subparagraph (C) of Rule 67(e)(4)(C)(iii), which state that, to qualify
for the Block Size exception, an order may not be executed on multiple
Trading Centers. By deleting this requirement, the Block Size exception
to the Trade At Prohibition would apply to an order received by a
market that has sufficient liquidity to execute such Block Size,
irrespective of whether the receiving market routes a portion of the
Block Size order to another Trading Center to comply with Rule 611 or
Regulation NMS. Any routed interest that returns unexecuted may be
immediately executed under the same Block Size exception, provided such
interest remains marketable.
Proposed Amendments to Rule 67 for Tick-Pilot Specific System Changes
    The Exchange proposes to add paragraph (f) of Rule 67 to describe
changes to system functionality necessary to implement the Plan.
Paragraph (f) of Rule 67 would set forth the Exchange's specific
procedures for handling, executing, re-pricing and displaying certain
order types and order type instructions applicable to Pilot Securities
in Test Groups One, Two, and Three.
    In determining the scope of these proposed changes to implement the
Plan, the Exchange reviewed its order types and identified which orders
and instructions would be inconsistent with the Plan and propose to
modify the operation of such order types so they will comply with the
Plan, or, to the extent inconsistent with the Plan, eliminate them.
These proposed changes are designed to comply with the Plan and to
allow the Exchange to meet its regulatory obligations under the Plan.
    As part of this review, the Exchange identified order types that
were designed to comply with the requirements of Regulation NMS. Among
other things, Regulation NMS requires a trading center to have policies
and procedures to reasonably avoid displaying quotations that lock or
cross any protected quotation \24\ and to prevent trade-throughs in NMS
stocks that do not fall within an exception enumerated in Rule 611(b)
to Regulation NMS.\25\ As such, under Regulation NMS, an exchange may
rank undisplayed orders at the price of a protected quotation on an
away market and execute such non-displayed orders at the price of a
protected quotation on an away market. By contrast, in Test Group
Three, an undisplayed order may not trade at the price of a protected
quotation on an away market. Accordingly, as described below, in order
to comply with the Plan for Test Group Three securities, the Exchange
is proposing to modify the behavior of specified orders that are
currently permitted to trade undisplayed at the price of the PBBO or
NBBO.
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    \24\ See 17 CFR 242.610(d).
    \25\ See 17 CFR 242.611(b).
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    As described in greater detail below, the Exchange is also
proposing to reject specified orders in Pilot Securities in Test Group
Three because the operation of such order types are, by their terms,
inconsistent with the requirements of the Trade At Prohibition.
Proposed Rule 67(f)(1)--Trade-At Intermarket Sweep Orders
    Proposed Rule 67(f)(1) would describe the handling of Trade-at
Intermarket Sweep Orders (``TA ISO'') on the Exchange. As described
above, the requirements for a member organization that enters a TA ISO
are specified in Rule 67(a)(1)(D)(ii) and differ from the requirements
for a member organization that enters an IOC ISO (as specified in Rule
13(e)(3)(A)--Equities). However, the Exchange will handle a TA ISO the
same way it handles an IOC ISO in all securities.
    As proposed in Rule 67(f)(1)(A), the Exchange would accept TA ISOs
in all securities. Further, TA ISOs must be designated as IOC, may
include a minimum trade size, and do not route. These requirements are
based on existing IOC functionality, as specified in Rule 13(b)(2)--
Equities governing IOC Modifiers.
    In addition, proposed Rule 67(f)(1)(B) would provide that the
Exchange would immediately and automatically execute

a TA ISO against the displayed and non-displayed bid (offer) up to its
full size in accordance with and to the extent provided by Exchange
Rules 1000--Equities-1004--Equities and will then sweep the Exchange's
book as provided in Rule 1000(d)(iii)--Equities. Any portion of the TA
ISO that is not executed would be immediately and automatically
cancelled. This proposed rule text is based on current Rule
13(e)(3)(B)--Equities.
    As with Limit Orders designated IOC, proposed Rule 67(f)(1)(C)
would provide that TA ISOs would be accepted before the Exchange opens
and would be eligible to participate in the opening transaction at its
limit price, but would not be accepted during a trading halt or pause
for participation in a reopening transaction. This proposed rule text
is based on current Rule 13(b)(2)(D)--Equities governing IOC Order
participation in the opening transaction.
    As noted, TA ISOs would not be accepted during a trading halt or
pause of participation in a reopening transaction, which represents a
change from the way the Exchange currently handles NYSE IOC Orders,
which are also Limit Orders designated IOC.\26\ Currently, NYSE IOC
Orders received during a trading halt are held for participation in the
reopening trade and, if not executed as part of the reopening trade,
are fully or partially cancelled.\27\
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    \26\ NYSE IOC Orders automatically execute against the displayed
quotation up to its full size and sweep the Exchange book, as
provided in Rule 1000--Equities to the extent possible, with
portions of the order routed to other markets if necessary. See Rule
13(b)(2)(B)--Equities.
    \27\ See Rule 13(b)(2)(E)--Equities.
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    Finally, proposed Rule 67(f)(1)(D) would provide that TA ISOs may
not be entered as e-Quotes, d-Quotes, or g-Quotes. This proposed rule
text is based on current Rule 70(a)(i)--Equities, which provides that
Floor broker agency interest files (i.e., e-Quotes, d-Quotes, and g-
Quotes) do not include ISOs.
Proposed Rule 67(f)(2)--Pilot Securities in Test Groups One, Two, and
Three
    Proposed Rule 67(f)(2) would describe the procedures for handling,
executing, re-pricing and displaying of certain order types and order
type instructions applicable to Pilot Securities in Test Groups One,
Two and Three.
     Proposed Rule 67(f)(2)(A) would provide that references in
Exchange rules to the minimum price variation (``MPV''), as defined in
Supplementary Material .10 to Rule 62--Equities, would instead mean the
quoting minimum price variation specified in paragraphs (c), (d), and
(e) of this Rule. This proposed rule text promotes transparency in
Exchange rules to be clear that if a rule specifies that an order will
be priced based off of the MPV, for Pilot Securities in Test Groups
One, Two, and Three, the applicable MPV will be the quoting MPV
required by the Plan.\28\ For example, Rule 13(e)(1)(B)--Equities
provides that if a Limit Order designated with an Add Liquidity Only
(``ALO'') modifier is marketable against Exchange interest or would
lock or cross a protected quotation in violation of Rule 610(d) of
Regulation NMS, the order will be re-priced and displayed one MPV, as
defined in Supplementary Material .10 to Rule 62--Equities, below the
best-priced sell interest (for bids) or above the best-priced buy
interest (for offers). As provided for in proposed Rule 67(f)(2)(A), on
arrival, the MPV applicable for Limit Orders designated ALO in Test
Groups One, Two, and Three would be $0.05.
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    \28\ See, e.g., Rules 13(a)(1)(A)(iv)--Equities, 13(e)(1)(B)--
Equities, and 13(e)(3)(C)(ii)--Equities.
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     Consistent with the Plan, proposed Rule 67(f)(2)(B) would
provide that pre-opening indications, as defined in Rule 15(a)--
Equities,\29\ would be published in $0.05 pricing increments for Pilot
Securities in Test Groups One, Two, and Three.
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    \29\ Rule 15(a)--Equities provides that pre-opening indications
will include the security and the price range within which the
opening price is anticipated to occur and will be published via the
securities information processor and proprietary data feeds.
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     Proposed Rule 67(f)(2)(C) would provide that Mid-Point
Passive Liquidity (``MPL'') Orders, which are undisplayed limit orders
that automatically execute at the mid-point of the protected best bid
(``PBB'') and the protected best offer (``PBO''),\30\ must be entered
with a limit price in a $0.05 pricing increment consistent with the
Plan. While MPL Orders in all Test Groups would be eligible to trade at
the midpoint of the PBBO, which may not be in a $0.05 pricing
increment, the Exchange proposes that the limit price specified for
such orders must be in the quoting MPV for Test Groups One, Two, and
Three.
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    \30\ See Rule 13(d)(1)(A)--Equities.
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     Proposed Rule 67(f)(2)(D) would clarify that trading
collars that are not in the trading MPV for the security would be moved
to the nearest price in the trading MPV for that security. Trading
collars applicable to incoming Market Orders and marketable Limit
Orders are specified in Rule 1000(c). As specified in that rule, Trade
Collars are calculated as a specified percentage above the NBO (for buy
orders) or below the NBB (for sell orders). As described in greater
detail below, if the application of the percentage against the NBBO
results in a price that is not in the applicable MPV, the Exchange will
round the result down to the nearest MPV. For Pilot Securities in Test
Groups One and Two, because the trading MPV is $0.01, the Exchange will
use the $0.01 MPV when rounding down the Trading Collar. For Pilot
Securities in Test Group Three, the Exchange will use the $0.05 MPV
when rounding down the Trading Collar.
Proposed Rule 67(f)(3)--Pilot Securities in Test Groups Two and Three
    Proposed Rule 67(f)(3) would specify procedures for handling,
executing, and re-pricing of Retail Price Improvement Orders (``RPI'')
applicable to Pilot Securities in Test Groups Two and Three. An RPI is
a non-displayed order that is priced better than the best protected bid
or offer (``PBBO'') utilized by Retail Liquidity Providers (``RLPs'')
and non-RLP member organizations to provide potential price improvement
to retail investor orders.\31\ Consistent with the requirements of the
Plan, which requires a minimum of $0.005 price improvement in retail
programs in Test Groups Two and Three instead of the $0.001 price
improvement specified in Rule 107C--Equities, proposed Rule 67(f)(3)
would provide that RPIs must be entered with a limit price and an
offset in a $0.005 increment.
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    \31\ See Rule 107C--Equities. In July 2012, the Commission
approved the Retail Liquidity Program on a pilot basis. See
Securities Exchange Act Release No. 67347 (July 3, 2012), 77 FR
40673 (July 10, 2012) (``RLP Approval Order'') (SR-NYSEAmex-2011-
84). See also Securities Exchange Act Release No. 78602 (August 17,
2016), 81 FR 57639 (August 23, 2016) (SR-NYSEMKT-2016-76) (extending
pilot to December 31, 2016). The Exchange established the Program to
attract retail order flow to the Exchange, and allow such order flow
to receive potential price improvement. See RLP Approval Order, 77
FR at 40674.
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Proposed Rule 67(f)(4)--Pilot Securities in Test Group Three
    Proposed Rule 67(f)(4) would specify procedures for handling,
executing, re-pricing and displaying of certain order types and order
type instructions applicable to Pilot Securities in Test Group Three.
The proposed changes to order behavior for Pilot Securities in Test
Group Three are designed to comply with the Trade-at prohibition by
changing the ranking of orders that trade at non-displayed prices
unless the execution is eligible for an exception.
     Under Rule 72(c)(i)--Equities, an automatically executing
order will trade first with any unexecuted Market Orders, allocated on
time priority, and then with displayable bids (offers). If there is
insufficient displayable volume to fill the order, an automatically

executing order will trade next with non-displayable interest on
parity. The Exchange proposes to modify these requirements for Pilot
Securities in Test Group Three. Under proposed Rule 67(f)(4)(A), an
incoming automatically executing order to sell (buy) will trade with
displayable bids (offers) and route to protected bids (offers) before
trading with an unexecuted Market Order held undisplayed at the same
price. Further, proposed Rule 67(f)(4)(A) would provide that, after
trading or routing, or both, any remaining balance of such an incoming
automatically executing order would satisfy any unexecuted Market
Orders in time priority before trading with non-displayable interest on
parity. As such, proposed Rule 67(f)(4)(A) would specify the ranking of
orders for Pilot Securities in Test Group Three and is designed to
assure that non-displayed orders, including unexecuted Market Orders,
will not price match protected quotations. Instead, the Exchange will
either route or cancel an incoming order, consistent with the order's
instructions, before trading with either unexecuted Market Orders or
non-displayed orders.\32\
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    \32\ For example, a Do Not Ship (DNS) Order will cancel if
compliance with Exchange rules or federal securities laws requires
that all or part of such order be routed to another market center
for execution. See Rule 13(e)(2)--Equities.
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     Proposed Rule 67(f)(4)(B) would set forth the trading
restrictions applicable to ISOs in Test Group Three.
    [cir] Proposed Rule 67(f)(4)(B)(i) would provide that, on entry,
Day ISOs would be eligible for the Trade-at ISO exception set forth in
proposed Rule 67(e)(4)(C)(x). Because a member organization that enters
a Day ISO to buy (sell) must simultaneously route one or more limit
orders to execute against the full displayed size of any protected
offer (bid), a member organization entering a Day ISO would have met
the obligations specified in Rule 67(e)(4)(C)(x). Accordingly, proposed
Rule 67(f)(4)(B)(i) would provide that on entry, Day ISOs would be
eligible for the exception set forth in Rule 67(e)(4)(C)(x).
    [cir] Proposed Rule 67(f)(4)(B)(ii) would provide that an IOC ISO
to buy (sell) would not trade with non-displayed interest to sell (buy)
that is the same price as a protected offer (bid) unless the limit
price of such IOC ISO is higher (lower) than the price of the protected
offer (bid). As such, an arriving IOC ISO would be permitted to trade
with undisplayed orders resting on the NYSE order book only if the
limit price of the arriving IOC ISO order is better than the PBBO. This
would be permitted under the Trade-at Prohibition because to enter an
IOC ISO to buy (sell) at a price higher (lower) than PBO (PBB), the
entering firm would have been required to simultaneously route limit
orders to execute against the full size of the PBO (PBB).
     Proposed Rule 67(f)(4)(C) would set forth the restrictions
applicable to resting non-displayed interest, i.e., a resting order to
buy (sell) that is not displayed at the price at which it is eligible
to trade. Resting non-displayed interest on the Exchange could include
Non-Display Reserve Orders,\33\ Non-Display Reserve e-Quotes,\34\ the
reserve interest of Minimum Display Reserve Orders and Minimum Display
Reserve e-Quotes,\35\ and pegging interest that is not displayed.\36\
The proposed rule changes are designed to assure that these orders
would not price match a protected quotation.
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    \33\ A ``Non Displayed Reserve Order'' is a Limit Order that is
not displayed, but remains available for potential execution against
all incoming automatically executing orders until executed in full
or cancelled. See Rule 13(d)(1)(A)--Equities.
    \34\ See Rule 70(f)(ii)--Equities.
    \35\ A ``Minimum Display Reserve Order'' is a Limit Order that
will have a portion of the interest displayed when the order is or
becomes the Exchange BBO and a portion of the interest (``reserve
interest'') that is not displayed. See Rules 13(d)(2)(C)--Equities
and 70(f)(i)--Equities.
    \36\ See Rule 13(f)(1)(A)--Equities (Pegging interest includes
non-displayable interest to buy or sell at a price to track the
same-side PBBO). d-Quotes enable Floor brokers to enter
discretionary instructions as to the price at which the d-Quote may
trade and the number of shares to which the discretionary price
instructions apply. Executions of d-Quotes within a discretionary
pricing instruction range are considered non-displayable interest
for purposes of Rule 72--Equities. See Rule 70.25(a)(ii)--Equities.
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    [cir] Proposed Rule 67(f)(4)(C)(i) would provide that resting non-
displayed interest to buy (sell) would not trade at the price of a
protected offer (bid).
    [cir] Proposed Rule 67(f)(4)(C)(ii) would provide that resting non-
displayed interest to buy (sell) would not trade at the price of a
protected bid (offer) unless the incoming order to sell (buy) is a TA
ISO, Day ISO, or IOC ISO that has a limit price lower (higher) than the
price of the non-displayed interest. In such case, the arriving TA ISO,
Day ISO, or IOC ISO would be eligible to trade with resting contra-side
non-displayed interest that is priced equal to a same-side protected
quote because the entering firm would have met its obligation to
simultaneously route additional limit orders to trade with such
protected quotation. Proposed Rule 67(f)(4)(C)(iii) would provide that,
in order to avoid trading with an arriving order at the price of a
protected quotation, resting non-displayed interest will either be
routed, cancelled, or re-priced, consistent with the terms of the
order.
     Proposed Rule 67(f)(4)(D) would provide that d-Quotes in
Pilot Securities in Test Group Three would not exercise discretion as
provided for in Rule 70.25--Equities if (i) exercising such discretion
would result in an execution at the price of a protected quotation, or
(ii) the price of a protected bid (offer) is equal to or higher (lower)
than the filed price of the d-Quote. As defined in Rule 70.25--
Equities, a d-Quote is an e-Quote, i.e., a Floor broker agency interest
file, that has discretionary instructions as to size or price, or both.
The discretionary price or size at which a d-Quote may trade is not
displayed. If the discretionary instructions of a d-Quote cannot be
met, it will trade as a regular e-Quote at its filed price.\37\ As
provided for in Rule 70.25(e)(v)(A)(1)--Equities, to determine whether
to exercise discretion for d-Quotes on the Exchange's book, the
Exchange will use the amount of discretion necessary to permit a trade
on the Exchange consistent with Rule 611. Therefore, a d-Quote may
exercise discretion to trade at the price of a protected quotation, but
not through the price of a protected quotation. Because interest that
is non-displayed cannot price match protected quotations under the
Trade-at Prohibition, the Exchange proposes to amend the operation of
d-Quotes in Pilot Securities in Test Group Three to prevent the
possibility that exercising discretion, i.e., a trade at a non-
displayed price, would result in a trade at the price of a protected
quotation. To effect this change, the Exchange proposes that the
Exchange would not exercise discretion for a d-Quote if exercising
discretion would result in an execution at the price of a protected
quotation. In addition, the Exchange proposes that if the protected bid
(offer) is equal to or higher (lower) than the filed price of the d-
Quote, the Exchange would not exercise discretion for that d-Quote.\38\
The Exchange believes that restricting d-Quote discretion in these
circumstances would reduce the potential for non-displayed interest to

execute at the price of a protected quotation, in violation of the
Trade-at Prohibition.
---------------------------------------------------------------------------

    \37\ See Rule 70.25(a)(iv)--Equities.
    \38\ For example, assume the Exchange has a resting d-Quote to
buy with $0.10 of price discretion that is filed at $10.05 and there
is a protected bid of $10.05 and a protected offer of $10.20. Assume
that the Exchange receives a sell order priced at $10.10. Under Rule
70.25, the resting d-Quote to buy could exercise price discretion to
trade with that incoming order. However, under proposed Rule
67(f)(4)(D), for Pilot Securities in Test Group Three, that resting
d-Quote order to buy would not exercise price discretion because it
would result in a trade based on a non-displayed price that would be
ahead of the same-side protected bid.
---------------------------------------------------------------------------

     Proposed Rule 67(f)(4)(E) would provide that only buy and
sell orders that are entered into the Cross Function pursuant to
Supplementary Material .10 to Rule 76--Equities \39\ would be eligible
for the Block Size exception to the Trade-at Prohibition set forth in
Rule 67(e)(4)(C)(iii), as amended. Rule 67(e)(4)(C)(iii), described in
more detail above, sets forth the Block Size exception to the Trade-at
Prohibition. The Exchange believes that orders that meet the Block Size
definition and that are entered pursuant to Rule 76.10--Equities would
meet this exception because the Cross Function identifies when eligible
orders can be executed at a price.\40\
---------------------------------------------------------------------------

    \39\ Supplementary Material .10 to Rule 76--Equities provides
for a ``Cross Function'' that Floor brokers may use to monitor
compliance with Rule 611 of Regulation NMS. To be eligible for this
Cross Function, the proposed cross transaction must be for at least
10,000 shares or a quantity of stock having a market value of
$200,000 or more.
    \40\ See Rule 76.10(a)--Equities.
---------------------------------------------------------------------------

     Proposed Rule 67(f)(4)(G) would specify behavior of
certain Self-Trade Prevention (``STP) Modifiers in Test Group Three and
would provide that incoming orders designated with an STPN Modifier
would cancel before routing or trading with non-displayed orders if the
opposite-side resting interest marked with an STP modifier with the
same market participant identifier (``MPID'') is a displayed order.
Rule 13(f)(3)--Equities describes the Exchange's STP Modifiers. As
provided for in Rule 13(f)(3)(A)--Equities, an incoming order
designated with an STP modifier will be prevented from executing
against a resting opposite-side order also designated with an STP
modifier with the same MPID. Such incoming order will execute against
all available opposite-side interest, displayed and non-displayed, and
will be evaluated for cancellation only to the extent it would execute
against opposite-side interest with an STP modifier with the same MPID.
Rule 13(f)(3)(C)(i)--Equities further describes the STP Cancel Newest
(``STPN'') modifier, pursuant to which, after executing with all other
opposite-side interest that does not have an STP modifier with the same
MPID, the remaining balance of the incoming order would cancel. For
Pilot Securities in Test Group Three, because an incoming order cannot
trade with non-displayed interest before routing to protected
quotations, orders with an STP modifier will first be evaluated against
displayed orders, then routed to protected quotations, if applicable.
Only then would an incoming order with an STP modifier be evaluated
against resting non-displayed orders with an STP modifier from the same
MPID. However, for Pilot Securities in Test Group Three with an STPN
modifier, the Exchange proposes that if there are opposite-side
displayed orders with an STP modifier from the same MPID, consistent
with the STPN instruction, such incoming order with an STPN modifier
would cancel in order to prevent an execution of that order against the
resting displayed order with the matching STP modifier. As such, an
order with an STPN modifier will not route or trade with resting non-
displayed orders that do not include an STP modifier from the same MPID
if there is a resting displayed order with an STP modifier from the
same MPID.
     Finally, proposed Rule 67(f)(4)(G) would provide that g-
Quotes and Buy Minus/Zero Plus Orders, as defined in Rule 13--Equities,
would be rejected.
    [cir] A g-Quote is an electronic method for Floor brokers to
represent orders that yield priority, parity and precedence based on
size to displayed and non-displayed orders on the Exchange's book, in
compliance with Section 11(a)(1)(G) of the Act.\41\ Under the Trade-at
Prohibition, however, because incoming orders would route to protected
quotations before trading with non-displayed interest, a resting g-
Quote would be required to yield not only to non-displayed orders on
the Exchange's book, but also protected quotations, even if the g-Quote
were displayed. Because the Exchange believes that yielding to away
protected quotations does not further the goals of Section 11(a)(1)(G)
of the Act and Rule 11a1-1(T) thereunder,\42\ the Exchange has
determined to reject G-quotes in Pilot Securities in Test Group Three.
The Exchange notes that making g-Quotes unavailable in Test Group Three
would not disadvantage member organizations from effecting transactions
for their own account, the account of an associated person, or any
other account of which it or an associated person exercises discretion
at the Exchange. Such orders could be routed to an unaffiliated Floor
broker for entry on the Exchange or entered electronically into
Exchange systems from an off-Floor location.
---------------------------------------------------------------------------

    \41\ Section 11(a)(1) of the Act, 15 U.S.C. 78k(a)(1), generally
prohibits a member of a national securities exchange from effecting
transactions on that exchange for its own account, the account of an
associated person, or any account over which it or an associated
person exercises discretion. Subsection (G) of Section 11(a)(1) and
provides an exemption allowing an exchange member to have its own
floor broker execute a proprietary transaction, also known as a ``G
order'' provided such order yields priority, parity, and precedence.
    \42\ See 15 U.S.C. 78k(a)(1); 17 CFR 240.11a2-2(T).
---------------------------------------------------------------------------

    [cir] An order with a ``Buy Minus Zero Plus'' instruction will not
trade at a price that is higher than the last sale, subject to its
limit price, if applicable.\43\ As such, Buy Minus/Zero Plus Orders
assist member organizations with compliance with the ``safe harbor''
provisions of Rule 10b-18 under the Act (``Rule 10b-18'') for issuer
repurchases.\44\ Under regular processing, an incoming order that
trades with both displayed and non-displayed resting orders is reported
as a single transaction to the Consolidated Tape. Under Rule 1004--
Equities, that bundled reported transaction would be used to determine
whether to elect a Buy Minus/Zero Plus Order. However, for Pilot
Securities in Test Group Three, because the Exchange would trade an
incoming order first with displayed orders and then route to protected
quotations before trading with non-displayed orders, any executions
against displayed orders and non-displayed orders at the same price
would be reported as separate transactions to the Consolidated Tape. As
such, under Rule 1004--Equities, that first print of the displayed
orders could elect a Buy Minus/Zero Plus Order. The Exchange does not
believe that this processing would be consistent with how Buy Minus/
Zero Plus Orders function on the Exchange as it would result in the
elected Buy Minus/Zero Plus Order, which would trade as a Market Order,
interrupting the allocation process of that incoming order. To prevent
this result, the Exchange proposes not to make this order type
available for Pilot Securities in Test Group Three. As proposed, Buy
Minus/Zero Plus Orders would therefore be rejected if entered in Pilot
Securities in Test Group Three.
---------------------------------------------------------------------------

    \43\ The Exchange recently filed to amend Rule 13--Equities to
eliminate orders with a sell ``plus'' and buy ``minus'' instruction
and retain the ``Buy Minus Zero Plus'' instruction. See SR-NYSEMKT-
2016-81.
    \44\ See 17 CFR 240.10b-18.
---------------------------------------------------------------------------

Proposed Amendments to Other Exchange Rules
    The Exchange also proposes to amend Rule 80C governing the Limit
Up/Limit Down (``LULD'') price controls pursuant to the NMS Plan to
Address Extraordinary Market Volatility (``LULD Plan'') \45\ and Rule
1000(c)--Equities governing Trading Collars in order to facilitate
compliance with the Plan. These proposed rule changes are designed to
facilitate compliance with

the Plan and would be applicable across all securities that trade at
the Exchange, regardless of the applicable MPV.
---------------------------------------------------------------------------

    \45\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012) (File No. 4-631).
---------------------------------------------------------------------------

    In particular, the Exchange proposes to add a new subsection (8) to
Rule 80C(a)--Equities that would specify that, after the Exchange opens
or reopens an Exchange-listed security but before receiving Price Bands
from the SIP under the LULD Plan, the Exchange would calculate Price
Bands based on the first Reference Price provided to the SIP and, if
such Price Bands are not in the MPV for the security, round such Price
Bands to the nearest price at the applicable MPV. The Exchange would
apply this standard rounding calculation regardless of the MPV of the
security.
    The Exchange also proposes to amend Rule 1000(c)(i)--Equities,
which describes the calculation of Trading Collars, to specify that
Trading Collars for both buy and sell orders that are not in the MPV
for the security, as defined in Supplemental Material .10 to Rule 62--
Equities, would be rounded down to the nearest price at the applicable
MPV.
Proposed Non-Substantive Amendments to Rule 67
    Finally, the Exchange proposes to make non-substantive, technical
amendments to Rule 67. First, the Exchange proposes to amend Rule
67(a)(1)(D)(ii) to add the word ``displayed'' between the words
``full'' and ``size'' so that the full clause would provide ``are
routed to execute against the full displayed size of any protected
bid.'' This proposed amendment makes the rule text parallel with the
existing rule text that provides ``or the full displayed size of any
protected offer.'' Second, the Exchange proposes to amend Rule
67(e)(4)(C)(xv) to correct a typographical error and change the word
``bond'' to ``bona'' when using the phrase ``bona fide error.''
Implementation Date
    If the Commission approves the proposed rule changes, the proposed
rule changes will be effective upon Commission approval and shall
become operative upon commencement of the Pilot Period.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \46\ in general, and furthers the objectives of Section
6(b)(5) of the Act \47\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in 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.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78f(b).
    \47\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Plan requires the Exchange to establish, maintain, and enforce
written policies and procedures that are reasonably designed to comply
with applicable quoting and trading requirements specified in the Plan.
The proposed rule change is designed to comply with the Plan, reduce
complexity and enhance system resiliency while not adversely affecting
the data collected under the Plan. The Exchange believes that the
proposed rule changes are thus reasonably designed to comply with
applicable quoting and trading requirements specified in the Plan and,
as discussed further below, other applicable regulations.
    The Exchange believes that the proposed changes to order behavior
for Pilot Securities in Test Group Three would remove impediments to
and perfect the mechanism of a free and open market and a national
market system because they are designed, and necessary, to modify order
behavior to comply with the Trade-at Prohibition by eliminating the
ability for orders that can trade at a non-displayed price to price
match protected quotations. As the Commission noted in the Tick Plan
Approval Order, the Plan is reasonably designed to provide measurable
data that should facilitate the ability of the Commission, the public,
and market participants to review and analyze the effect of tick size
on the trading, liquidity, and market quality of securities of smaller
capitalization companies.\48\ The Plan thus provides for a mechanism to
provide a data-driven approach to evaluate whether certain changes to
market structure for Pilot Securities would be consistent with the
Commission's mission to protect investors, maintain fair and orderly
and efficient markets, and facilitate capital formation.\49\ By having
three test groups, the data that will be collected will demonstrate how
behavior will change based on the differing requirements of the test
groups. Because there are different requirements for the three Test
Groups, a logical consequence is that order behavior will change
depending on the requirements of each Test Group, which is the purpose
of having a pilot with three test groups.
---------------------------------------------------------------------------

    \48\ See Tick Plan Approval Order, supra note 6, at 27529.
    \49\ Id.
---------------------------------------------------------------------------

    With respect to Pilot Securities in Test Group Three, the
Commission recognized the particular complexity of implementing and
complying with the Trade-at Prohibition, including that trading centers
would need to ``monitor protected quotations on other trading centers
and prevent an execution that would match the price of any such
quotation unless the trading center itself was displaying a protected
quotation'' and that ``compliance with the Trade-at Prohibition would
require systems changes by trading centers.''\50\ Trading centers that
are not registered exchanges will be able to implement compliance with
the Trade-at Prohibition by modifying the behavior of order types that
currently price match protected quotations and without public notice
and without filing any rule changes with the Commission. Such modified
behavior would be applicable, and indeed required, only for Pilot
Securities in Test Group Three. Applying the modified order behavior
for compliance with the Trade-at Prohibition to Pilot Securities in
other Test Groups would moot the differences between the Test Groups,
which would thwart the ability to assess any meaningful differences in
order behavior for the three Test Groups.
---------------------------------------------------------------------------

    \50\ Id. at 27530.
---------------------------------------------------------------------------

    As a trading center, the Exchange must also modify behavior of
order types to comply with the Trade-at Prohibition. However, as a
registered exchange, the Exchange has rules that are filed with the
Commission that describe in detail order behavior, including current
order behavior that is designed in compliance with Rules 610(d) and 611
of Regulation NMS. These existing rules provide for non-displayed order
types to price match protected quotations even if not displaying a
quote at that price. Unlike a trading center that is not a registered
exchange, the Exchange is required to file a proposed rule change to
describe how it would modify order behavior in compliance with the
Plan.\51\ For the Exchange to implement compliance with the Plan, and
specifically the requirements of the Trade-at Prohibition, the Exchange
assessed its order type behavior and identified those changes that
would be necessary to prevent an execution on a non-

displayed order that would match the price of protected quotation
unless that Away Market is displaying a protected quotation.
---------------------------------------------------------------------------

    \51\ Section 19(b)(1) of the Act requires that each self-
regulatory organization shall file with the Commission, in
accordance with Rule 19b-4 thereunder, copies of any proposed rule
or any proposed change in, addition to, or deletion from the rules
of such self-regulatory organization. 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

    The Exchange believes that the proposed changes regarding ISOs, MPL
Orders, RPI Orders, resting non-displayed interest, d-Quotes, buy and
sell orders entered into the Cross Function, STPN Modifiers, Buy Minus/
Zero Plus Orders, and g-Quotes and how the Exchange allocates and
routes incoming orders are consistent with the Act because they are
intended to modify the Exchange's system to comply with the provisions
of the Plan and the different requirements for the three Test Groups
and are designed to assist the Exchange in meeting its regulatory
obligations pursuant to the Plan. For Pilot Securities in Test Group
Three, the Exchange believes that the proposed modifications to order
behavior are designed to prevent executions of orders with a non-
displayed working price from price matching a protected quotation.
These are precisely the type of order behavior changes contemplated by
the Plan; complying with the Trade-at Prohibition by definition
requires differing order behavior as compared to the other Test Groups
or the control group. For example, the Exchange proposes that order
types that are eligible to trade at non-displayed prices that would be
equal to the PBBO would be re-priced, cancelled, or routed to assure
that such orders would not price match a protected quotation in
violation of the Trade-at Prohibition. Likewise, for d-Quotes, for
Pilot Securities in Test Group Three only, the Exchange would not
exercise discretion if it could result in a violation of the Trade-at
Prohibition. The Exchange would not apply these order behavior changes
to Pilot Securities in Test Groups One and Two because to do so would
subvert the quality of data collected; Test Groups One and Two do not
have the Trade-at Prohibition and therefore non-displayed orders in
those Test Groups may price match a protected quotation, provided such
executions are in the applicable MPV for the security.
    In addition, the Exchange proposes to reject g-Quotes and Buy
Minus/Zero Plus Orders and modifying the behavior of incoming orders
with an STPN modifier in Test Group Three only because application of
the Trade-at Prohibition to these order types would impair the function
of those order types. For g-Quotes, in order to meet the requirement to
yield to all orders on the Exchange's book, including non-displayed
orders, to comply with the Trade-at Prohibition, g-Quotes would also
have to yield to protected quotations, even if the g-Quote were
displayed. The Exchange believes that this processing would be
inconsistent with the purpose of g-Quotes. The Exchange notes that
making g-Quotes unavailable in Test Group Three would not disadvantage
member organizations from effecting transactions for their own account,
the account of an associated person, or any other account of which it
or an associated person exercises discretion at the Exchange. Such
orders could be routed to an unaffiliated Floor broker for entry on the
Exchange or entered electronically into Exchange systems from an off-
Floor location. For Buy Minus/Zero Plus Orders, such orders are
currently elected based on a bundled transaction that is reported to
the Tape that includes executions of both displayed and non-displayed
orders. Under the Trade-at Prohibition, because executions against
displayed interest would be reported to the Consolidated Tape
separately from executions against non-displayed interest, under Rule
1004, a Buy Minus/Zero Plus Order would be elected and converted to a
Market Order in the middle of processing an incoming order. The
Exchange believes that this would undermine the purpose of a Buy Minus/
Zero Plus Order and would introduce unnecessary complexity into the
processing of orders. The Exchange notes that no other exchange offers
an instruction similar to the Buy Minus/Zero Plus Order. Because these
proposed rule changes are intended to comply with the Plan, the
Exchange believes that these proposals are in furtherance of the
objectives of the Plan, as identified by the Commission, and are
therefore consistent with the Act.
    The Exchange further believes that that rejecting g-Quotes and Buy
Minus/Zero Plus Orders for Pilot Securities in Test Group Three is
consistent with the Act because the proposed changes are designed to
eliminate unnecessary trading system complexity and risk. Regulation
SCI required the Exchange to establish written policies and procedures
reasonably designed to ensure that their systems have levels of
capacity, integrity, resiliency, availability, and security adequate to
maintain their operational capability and promote the maintenance of
fair and orderly markets, and that they operate in a manner that
complies with the Exchange Act. The proposed change is intended to
reduce trading system complexity and risk to ensure the Exchange's
technology remains robust and resilient.\52\ Specifically, as noted
above, to comply with the Trade-at Prohibition, both g-Quotes and Buy
Minus/Zero Plus Orders would not function in the same manner as
currently provided for, and the Exchange believes that applying the
Trade-at Prohibition to these order types would introduce unnecessary
complexity and risk that would not further the objectives of how these
order types are intended to function.
---------------------------------------------------------------------------

    \52\ The Commission has expressed concern regarding potential
market instability caused by technological risks. See Chair Mary Jo
White, Commission, ``Enhancing Our Equity Market Structure'' (June
5, 2014), available at https://www.sec.gov/News/Speech/Detail/Speech/1370542004312#.VD2HW610w6Y.
---------------------------------------------------------------------------

    Lastly, the Exchange believes that the proposed amendments to Rules
80C and 1000(c) would remove impediments to and perfect the mechanism
of a free and open market and a national market system as they provide
transparency regarding (1) how the Exchange would calculate and round
Price Bands under the LULD Plan after the Exchange opens or reopens an
Exchange-listed security but before receiving Price Bands from the SIP,
and (2) that Trading Collars for both buy and sell orders that are not
in the MPV for the security would be rounded down to the nearest price
at the applicable MPV.

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

    The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed rule change is
intended to assist the Exchange in meeting its regulatory obligations
pursuant to the Plan, reduce system complexity, and enhance resiliency.
The Plan requires all trading centers, including over-the-counter
markets, to implement changes to comply with the requirements of the
Plan and specifically the Trade-at Prohibition. The Exchange fully
expects that, in order to comply with the Trade-at Prohibition, trading
centers other than registered exchanges will modify the behavior of
orders for Pilot Securities in Test Group Three that will not be
applied to Pilot Securities in Test Groups One and Two. Unlike such
trading centers, as a self-regulatory organization, under Section
19(b)(1) of the Act,\53\ the Exchange is required to file proposed rule
changes for any modifications to order behavior that it proposes for
the Plan. The absence of Commission approval of these proposed rule
changes would impose a burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act because trading

centers that are not registered exchanges would be able to implement
changes to comply with the Plan, but the Exchange would not. The
Exchange believes that a disapproval of the Exchange's proposed rules
would therefore put the Exchange at a competitive disadvantage vis-
[agrave]-vis the over-the-counter markets because such trading centers
would be able to modify the behavior of non-displayed orders in Test
Group Three without restriction. The Exchange further notes that the
proposed rule change will apply equally to all member organizations
that trade Pilot Securities.
---------------------------------------------------------------------------

    \53\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

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 respectfully requests accelerated effectiveness of
this proposed rule change pursuant to Section 19(b)(2) of the Act.\54\
The Exchange believes that there is good cause for the Commission to
accelerate effectiveness because the proposed rule changes are designed
to specify procedures for the handling, executing, re-pricing and
displaying of certain order types and order type instructions
applicable to Pilot Securities in Test Groups One, Two, and Three. In
determining the scope of these proposed changes to implement the Plan,
the Exchange reviewed its order types and identified which orders and
instructions would be inconsistent with the Plan and propose to modify
the operation of such order types so they will comply with the Plan,
or, to the extent inconsistent with the Plan, eliminate them. These
proposed changes are consistent with the protection of investors and
the public interest because they are designed to comply with the Plan
and to allow the Exchange to meet its regulatory obligations under the
Plan. Because the Plan will be implemented beginning on October 3,
2016, the Exchange believes there is good cause to accelerate
effectiveness so that the Exchange may implement the proposed changes
concurrent with the implementation date of the Plan.
---------------------------------------------------------------------------

    \54\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    Within 45 days of the date of publication of this notice in the
Federal Register or up to 90 days (i) as the Commission may designate
if it finds such longer period to be appropriate and publishes its
reasons for so finding or (ii) as to which the self-regulatory
organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSEMKT-2016-83 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-NYSEMKT-2016-83. 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-NYSEMKT-2016-83, and should
be submitted on or before September 29, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\55\
---------------------------------------------------------------------------

    \55\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-22152 Filed 9-14-16; 8:45 am]
BILLING CODE 8011-01-P


0
                                       0
                                       0
                                       0
                                                                            $0
iii.  Record each enclosure used to control air emissions and certifies to its specifications
                                     0.25
                                       1
                                     0.25
                                       0
                                       0
                                       0
                                       0
                                                                            $0
iv.  Records for each closed vent and control device it is designed to operate at the performance level for tank, surface impoundments, or container
                                     0.25
                                       1
                                     0.25
                                       0
                                       0
                                       0
                                       0
                                                                            $0
v.  Records all Method 27 tests performed by owner/operator for each container
                                      0.5
                                       1
                                      0.5
                                     6,760
                                     3,380
                                      169
                                      338
                                                                   $455,980.59
vi.  Records all visual inspections for each tank, surface impoundment and container, including covers
                                       1
                                       1
                                       1
                                     6,760
                                     6,760
                                      338
                                      676
                                                                   $911,961.18
Tanks with air emission controls:

vii.  Records date of each attempts to repair leak, repair methods applied and date of successful repair
                                      0.5
                                       2
                                       1
                                     6,760
                                     6,760
                                      338
                                      676
                                                                   $911,961.18
viii.  Records all continuous monitoring
                                     0.25
                                      365
                                     91.25
                                      676
                                    61,685
                                     3,084
                                     6,169
                                                                 $8,321,645.77
ix.  Records management of carbon removed from a carbon absorption system
                                      0.5
                                       2
                                       1
                                     3,380
                                     3,380
                                      169
                                      338
                                                                   $455,980.59
x.  Records date and time of each sample
                                     0.25
                                       2
                                      0.5
                                     6,760
                                     3,380
                                      169
                                      338
                                                                   $455,980.59
xi.  Records results of each sample
                                     0.25
                                       2
                                      0.5
                                     6,760
                                     3,380
                                      169
                                      338
                                                                   $455,980.59
xii.  Records tank dimensions and design capacity
                                      0.3
                                       1
                                      0.3
                                       0
                                       0
                                       0
                                       0
                                                                            $0
Tanks with alternative emission control (floating roofs):

xiii.  Records in the facility operating plan of the internal floating roof
                                     0.25
                                       1
                                     0.25
                                       0
                                       0
                                       0
                                       0
                                                                            $0
xiv.  Record the equipment design and certifies that it meet applicable requirements
                                     0.25
                                       1
                                     0.25
                                       0
                                       0
                                       0
                                       0
                                                                            $0
xv.  Record each inspection, the tank, date, and what components were inspected
                                     0.25
                                       2
                                      0.5
                                     6,760
                                     3,380
                                      169
                                      338
                                                                   $455,980.59
(1)  If defects found, identify the tank and describe the repairs that were made
                                     0.25
                                       2
                                      0.5
                                     6,760
                                     3,380
                                      169
                                      338
                                                                   $455,980.59
xvi.  Record in the facility operating plan the external floating roof
                                     0.25
                                       1
                                     0.25
                                       0
                                       0
                                       0
                                       0
                                                                            $0
xvii.  Record the equipment design and certifies that it meets applicable requirements
                                     0.25
                                       1
                                     0.25
                                       0
                                       0
                                       0
                                       0
                                                                            $0
xviii.  Record gap measurements of the tank, date of inspection, raw data and calculations
                                     0.25
                                       1
                                     0.25
                                     6,760
                                     1,690
                                      85
                                      169
                                                                   $227,990.30
(1)  If defects found, record the tank, date tank was emptied, or repairs make and the nature of repair
                                     0.25
                                       1
                                     0.25
                                     6,760
                                     1,690
                                      85
                                      169
                                                                   $227,990.30
xix.  Continuous monitoring inspections

(1)  Closed-vent systems
                                       4
                                       1
                                       4
                                     6,760
                                    27,040
                                     1,352
                                     2,704
                                                                 $3,647,844.72
xx.  Roof inspections/gap measurements:

(1)  Secondary seal inspection (once a year)
                                       4
                                       1
                                       4
                                     6,760
                                    27,040
                                     1,352
                                     2,704
                                                                 $3,647,844.72
(2)  Primary seal inspection (once every 5 years) [n]
                                       4
                                      0.2
                                      0.8
                                     1,352
                                     1,082
                                      54
                                      108
                                                                   $145,913.79
G.  Train personnel

i.  Waste determination methods
                                       8
                                       1
                                       8
                                     6,760
                                    54,080
                                     2,704
                                     5,408
                                                                 $7,295,689.44
ii.  Control equipment inspection and monitor
                                       8
                                       1
                                       8
                                     6,760
                                    54,080
                                     2,704
                                     5,408
                                                                 $7,295,689.44
H.  Audits
                                      N/A

Recordkeeping Subtotal

                                    733,882
                                                                   $86,091,070
Total Labor Burden and Costs (Rounded) [o]

                                    775,000
                                                                   $91,000,000
Total Capital and O&M Costs (Rounded) [o]

                                                                   $13,500,000
Grand Total (Rounded) [o]

                                                                  $105,000,000

Assumptions:

[a]  We have assumed that the average number of respondents that will be subject to this rule will be 6,760.  There will be no new additional sources during the three year period of this ICR.
[b]  This ICR uses the following labor rates: $148.45 per hour for Executive, Administrative, and Managerial labor; $121.46 per hour for Technical labor, and $60.23 per hour for Clerical labor.  These rates are from the United States Department of Labor, Bureau of Labor Statistics, March 2020, "Table 2. Civilian Workers, by Occupational and Industry group." The rates are from column 1, "Total Compensation."  The rates have been increased by 110 percent to account for the benefit packages available to those employed by private industry.
[c]  We have assumed that all of the respondents will familiarize with the regulatory requirements each year.
[d]  We have assumed that only the Sistersville, WV Plant XL Project will be reporting.
[e]  We have assumed that 0.5 percent of respondents will report control devices malfunction, resulting in exceedance annually (0.5% x 6,760 = 34), along with the Sistersville Plant XL project (1) always reports semiannually for a total of 34 + 1 = 35 semiannual reports.
[f]  We have assumed that 1 percent of waste determination will result in exceedance annually (1% x 6,760 = 67.6, rounded to 68).
[g]  We have assumed that only one facility currently uses the exemption regarding hydrogen peroxide management located at 40 CFR 264.1080(d) and 40 CFR 265.1080(d).
[h]  We have assumed that 20 percent of the tank roofs will be inspected each year (external roof) (20% x 6,760 = 1,352).
[i]  We have assumed that 10 percent of respondents will empty and refill a tank (internal floating roof) (10% x 6,760 = 676).
[j]  We assume recordkeeping only for the Sistersville, WV Plant XL Project.
[k]  We have assumed that it will take each respondent sixteen hours once per year to plan activities.
[l]  We have assumed that 50 percent of respondent will be required on a daily basis to inspect and monitor each closed vent system (50% x 6,760 = 3,380).
m  We have assumed that 20 percent of respondents will take 4 hours once every five years to complete the primary seal inspection. (20% x 6,760 = 1,352).
[n]  We have assumed that 20 percent of tanks with alternative emission controls (floating roofs) will each take 4 hours 0.2 times per year, which equates to once every 5 years, to complete  the primary seal inspection.  (20% x 6,760 = 1,352).
o  Totals have been rounded to 3 significant figures. Figures may not add exactly due to rounding.

Table 2: Average Annual EPA Burden and Cost  -  Air Emission Standards for Tanks, Surface Impoundment and Containers (40 CFR Part 264, Subpart CC, and 40 CFR Part 265, Subpart CC) (Renewal)

                                   Activity
                      (A)
EPA person hours per occurrence
                   (B)
No. of occurrences per plant per year
             (C)
EPA person hours per respondent per year
(C=AxB)
                           (D)
Plants per year  [a]
                (E)
Technical person- hours per year
(E=CxD)
               (F)
Management person hours per year
(F=Ex0.05)
                 (G)
Clerical person hours per year
(G=Ex0.1)
                        (H)
Total Cost Per Year ($) [b]
A.  Review report

1.  Waste exceedance reports [c]
                                       4
                                       1
                                       4
                                      68
                                      272
                                      14
                                      27
                                                                    $15,472.58
2.  Control device exceedance reports [d]
                                       4
                                       2
                                       8
                                      35
                                      280
                                      14
                                      28
                                                                    $15,927.66
3.  Notification reports [e]
                                       1
                                       1
                                       1
                                     2,029
                                     2,029
                                      101
                                      203
                                                                   $115,418.65
    4.  Annual project report [f]
                                       4
                                       1
                                       4
                                       1
                                       4
                                      0.2
                                      0.4
                                                                       $227.54
B.  Review Records

1.  Select site and review permit [g]
                                       8
                                       1
                                       8
                                      520
                                     4,160
                                      208
                                      416
                                                                   $236,639.52
TOTAL (Rounded) [h]

                                     7,760
                                                                      $384,000

Assumptions:

[a]  We have assumed that the average number of respondents that will be subject to this rule will be 6,760.  There will be no new additional sources during the next three years of this ICR.
b The cost is based on the following labor rate which incorporates a 1.6 benefits multiplication factor to account for government overhead expenses.  Managerial rates of $68.37 (GS-13, Step 5, $42.73 x 1.6), Technical rate of $50.72 (GS-12, Step 1, $31.70 x 1.6), and Clerical rate of $27.46 (GS-6, Step 3, $17.16 x 1.6).  These rates are from the Office of Personnel Management (OPM), 2020 General Schedule, which excludes locality, rates of pay.
[c]  Annual responses assume 1 percent of waste determination results in an exceedance (1% x 6,760 = 67.6. rounded to 68).
[d]  Semiannual responses assumes 0.5% of control devices malfunction resulting in an exceedance (0.5% x 6,760 = 34) plus the Sistersville, WV Plant. (34 + 1 = 35)
[e]  We have assumed that 10 percent of internal floating roof respondents (10% x 6,760 = 676), plus 20% of external roof respondents (20% x 6,760 = 1,352), and one facility using hydrogen peroxide exemption (676 + 1,352 + 1 = 2,029) will submit notification reports.
[f]  We have assumed that the Sisterville Plant will submit an annual project report.
g  We have assumed that it will take respondents 8 hours once per year to review selected sites and review permit records.
h  Totals have been rounded to 3 significant figures. Figures may not add exactly due to rounding[.]


Cooling Water Intake Structure ( CWIS) Information Data Required Rig Information Rig Name Rowan Louisiana Rowan Alaska Rowan Juneau Rowan Odessa Rig Type Jack up LeTourneau 116 S and 84 class Total Installed Power Generation Capacity 6625 HP Number of Cooling Water Intake Structures ( CWISs) 4 Brief description of each CWIS ( e. g., sea chest, simple pipe) 1 sea chest 3 simple pipe Rough dimensions of each CWIS and indicate whether onboard CWIS has an existing flange Sea chest   6" pipe with Simple pipes   12.5" to 14.75" ID pipes Screen type ( e. g., strainer, wedge wire) with mesh size Sea chests   14" x14" wire mesh screens Simple pipes  none Total Design Specifications for Daily Maximum Water Intake Volume of each CWIS 1,727,964 to 2,303,994 gal ( 41,142 to 54,857 bbls) Total Daily Water Intake Volume of each CWIS ( Set up/ Drilling) 1,727,964 to 2,303,994 gal ( 41,142 to 54,857 bbls) Design Specs for Through Screen Velocity of each CWIS ( i. e., Q= V* A) ( Set up/ Drilling) 1.72 to 3.66 fps List of Purposes of Cooling Water Intakes ( e. g., cool crude oil, produced water, power generators, drill pipe brakes) Brake water cooling, engine oil cooling, electric motor cooling List of Purposes of Non cooling Water Intakes ( e. g., fire water, hotel loads) Fire main, ballast, sanitary, pits, drill water, hotel loads, distiller input, washdown Total Volume of Water Intake for Ballasting, Duration of the Ballast intake, and the Through Screen Velocity of the Ballast intake 1,195,824 gal ( 28,472 bbls) Duration = 12 18 hours.

Mitigation Measures for reducing Exotic Species Migration through Ballast water The rig does not carry ballast/ preload water from location to location. It is taken on and dumped at the same location. Mitigation Measures for reducing Impingement and Entrainment of Aquatic Organisms, as well as Bio fouling Prevention Measures Sea chest screens, basket strainers Is the Rig equipped with a Radiator Cooling System for the Main Engines? No


[Federal Register Volume 84, Number 150 (Monday, August 5, 2019)]
[Notices]
[Pages 38091-38092]
[FR Doc No: 2019-16649]

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

DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2019-0032]

Qualification of Drivers; Exemption Applications; Epilepsy and
Seizure Disorders

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of denials.

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

SUMMARY: FMCSA announces its decision to deny applications from 40
individuals who requested an exemption from the Federal Motor Carrier
Safety Regulations (FMCSRs) prohibiting persons with a clinical
diagnosis of epilepsy or any other condition that is likely to cause a
loss of consciousness or any loss of ability to operate a commercial
motor vehicle (CMV) from operating CMVs in interstate commerce.

FOR FURTHER INFORMATION CONTACT: Ms. Christine A. Hydock, Chief,
Medical Programs Division,<PHONE_NUMBER><EMAIL_ADDRESS>FMCSA,
Department of Transportation, 1200 New Jersey Avenue SE, Room W64-224,
Washington, DC 20590-0001. Office hours are from 8:30 a.m. to 5 p.m.,
ET, Monday through Friday, except Federal holidays. If you have
questions regarding viewing or submitting material to the docket,
contact Docket Services, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

I. Public Participation

A. Viewing Documents and Comments

    To view comments, as well as any documents mentioned in this notice
as being available in the docket, go to http://www.regulations.gov.
Insert the docket number, FMCSA-2019-0032, in the keyword box, and
click ``Search.'' Next, click the ``Open Docket Folder'' button and
choose the document to review. If you do not have access to the
internet, you may view the docket online by visiting the Docket
Management Facility in Room W12-140 on the ground floor of the DOT West
Building, 1200 New Jersey Avenue SE, Washington, DC 20590, between 9
a.m. and 5 p.m., ET, Monday through Friday, except Federal holidays.

B. Privacy Act

    In accordance with 5 U.S.C. 553(c), DOT solicits comments from the
public to better inform its rulemaking process. DOT posts these
comments, without edit, including any personal information the
commenter provides, to www.regulations.gov, as described in the system
of records notice (DOT/ALL-14 FDMS), which can be reviewed at
www.dot.gov/privacy.

II. Background

    FMCSA received applications from 40 individuals who requested an
exemption from the FMCSRs prohibiting persons with a clinical diagnosis
of epilepsy or any other condition that is likely to cause a loss of
consciousness or any loss of ability to operate a CMV from operating
CMVs in interstate commerce.
    FMCSA has evaluated the eligibility of these applicants and
concluded that granting these exemptions would not provide a level of
safety that would be equivalent to, or greater than, the level of
safety that would be obtained by complying with the regulation 49 CFR
391.41(b)(8).

III. Basis for Exemption Determination

    Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption
for five years if it finds such an exemption would likely achieve a
level of safety that is equivalent to, or greater than, the level that
would be achieved absent such an exemption. FMCSA grants exemptions
from the FMCSRs for a two-year period to align with the maximum
duration of a driver's medical certification.
    The Agency's decision regarding these exemption applications is
based on the eligibility criteria, the terms and conditions for Federal
exemptions, and an individualized assessment of each applicant's
medical information provided by the applicant.

IV. Conclusion

    The Agency has determined that these applicants do not satisfy the
eligibility criteria or meet the terms and conditions of the Federal
exemption and granting these exemptions would not provide a level of
safety that would be equivalent to or greater than, the level of safety
that would be obtained by complying with the regulation 49 CFR
391.41(b)(8). Therefore, the 40 applicants in this notice have been
denied exemptions from the physical qualification standards in 49 CFR
391.41(b)(8).
    Each applicant has, prior to publication of this notice, received a
letter of final disposition regarding his/her exemption request. Those
decision letters fully outlined the basis for the denial and constitute
final action by the Agency. This notice summarizes the Agency's recent
denials as required under 49 U.S.C. 31315(b)(4) by periodically
publishing names and reasons for denial.
    The following 40 applicants do not meet the minimum time
requirement for being seizure-free, either on or off of anti-seizure
medication:

Virgen L. Acevedo (NJ)
Niles Bartelson (UT)
Alex Becker (WV)
Joseph Bellamy (MD)
Randson Burdette (OH)
Lorenzo Cardenas (CA)
Lucas Choinard (WA)
Walter Cook (AK)
Kyle Dona (WY)
Jeffrey Douglass (ME)
Pamela Eastridge (VA)
Leonel Escobedo (TX)
Mark A. Gallegos (NM)
Lamont Hardy (MS)
Dustan Hendrickson (OR)
Zachary C. Herrin (OK)
Terry Kahle (PA)
Nickon Knight (MI)
David Kummer (MN)
Dan Liners (MN)
Bradley W. Looney (NC)
Wesley Moses (NC)
Christopher Nelson (SC)
Johanna Pfiester (SD)
Gary Pierson (CA)
Shadow T. Ramsay (NH)
Joel Rowe (MD)
Elsa Santos (NJ)
Robert G. Schauer III (IA)
Earl Seams (ME)
Michael Shea (NJ)
Brian D. Six (IA)
Sergio Soto Huicochea (AZ)
Tyler Sozcka (WI)
Joseph Stark (WI)
Matthew Stoss (WI)
Daisy Tapia (NY)
Juan Toribio (CA)
Shawn M. Tupick (NH)
Jason Viar (FL)

    Issued on: July 26, 2019.
Larry W. Minor,
Associate Administrator for Policy.
[FR Doc. 2019-16649 Filed 8-2-19; 8:45 am]
BILLING CODE 4910-EX-P