Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Commentary .14 to Rule 4770 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot), 87106-87109 [2016-28931]
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87106
Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices
rejecting all SPX/SPXW orders during
extended hours is currently not unduly
burdensome it is not unduly
burdensome to allow a subset of SPX/
SPXW orders to continue to be treated
in such a manner. Additionally,
allowing such orders to be executed
electronically will not impose any
burden on intermarket competition as
options on the S&P 500 are exclusively
listed on the Exchange. To the extent
the proposed changes make CBOE a
more attractive marketplace for market
participants at other exchanges, such
market participants are welcome to
become CBOE market participants.
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 proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
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 Exchange consents, the Commission
will:
A. By order approve or disapprove
such 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:
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CBOE–2016–080 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–CBOE–2016–080. This file
number should be included on the
subject line if email is used. To help the
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17:55 Dec 01, 2016
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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 (https://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–CBOE–
2016–080 and should be submitted on
or before December 23, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.42
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–28929 Filed 12–1–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79408; File No. SR–
NASDAQ–2016–159]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
Commentary .14 to Rule 4770
(Compliance With Regulation NMS
Plan To Implement a Tick Size Pilot)
November 28, 2016.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
14, 2016, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
42 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Commentary .14 to Rule 4770
(Compliance with Regulation NMS Plan
to Implement a Tick Size Pilot) to
provide the SEC with notice of its efforts
to re-program its systems to eliminate a
re-pricing functionality for certain
orders in Test Group Three securities in
connection with the Regulation NMS
Plan to Implement a Tick Size Pilot
Program (‘‘Plan’’ or ‘‘Pilot’’).3
The text of the proposed rule change
is set forth below. Proposed new
language is italicized; deleted text is in
brackets.
*
*
*
*
*
The NASDAQ Stock Market Rules
*
*
*
*
*
4770. Compliance With Regulation
NMS Plan To Implement a Tick Size
Pilot
(a) through (d) No Change.
Commentary: .01–.13 No change.
.14 Until [November 14,
2016]December 12, 2016, the treatment
of Price to Comply Orders, Price to
Display Orders, Non-Displayed Orders,
and Post-Only Orders that are entered
through the OUCH or FLITE protocols
in Test Group Three securities shall be
as follows:
Following entry, and if market
conditions allow, a Price to Comply
Order in a Test Group Three Pilot
Security will be adjusted repeatedly in
accordance with changes to the NBBO
until such time as the Price to Comply
Order is able to be ranked and displayed
at its original entered limit price.
Following entry, and if market
conditions allow, a Price to Display
Order in a Test Group Three Pilot
Security will be adjusted repeatedly in
accordance with changes to the NBBO
until such time as the Price to Display
Order is able to be ranked and displayed
at its original entered limit price.
Following entry, and if market
conditions allow, a Non-Displayed
Order in a Test Group Three Pilot
Security will be adjusted repeatedly in
3 See Securities Exchange Act Release No. 74892
(May 6, 2015), 80 FR 27513 (May 13, 2015)
(‘‘Approval Order’’).
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accordance with changes to the NBBO
up (down) to the Order’s limit price.
Following entry, and if market
conditions allow, the Post-Only Order
in a Test Group Three Pilot Security
will be adjusted repeatedly in
accordance with changes to the NBBO
or the best price on the Nasdaq Book, as
applicable until such time as the PostOnly Order is able to be ranked and
displayed at its original entered limit
price.
*
*
*
*
*
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
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
asabaliauskas on DSK3SPTVN1PROD with NOTICES
1. Purpose
On September 7, 2016, The Nasdaq
Stock Market LLC (‘‘Nasdaq’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) a proposed rule change
(‘‘Proposal’’) to adopt paragraph (d) and
Commentary .12 to Exchange Rule 4770
to describe changes to system
functionality necessary to implement
the Plan. The Exchange also proposed
amendments to Rule 4770(a) and (c) to
clarify how the Trade-at exception may
be satisfied. The SEC published the
Proposal in the Federal Register for
notice and comment on September 20,
2016.4 Nasdaq subsequently filed three
Partial Amendments to clarify aspects of
the Proposal. The Commission approved
the Proposal, as amended, on October 7,
2016.5
In SR–NASDAQ–2016–126, Nasdaq
had initially proposed a re-pricing
functionality for Price to Comply
Orders, Non-Displayed Orders, and
Post-Only Orders entered through the
OUCH and FLITE protocols in Group
4 See Securities Exchange Act Release No. 78837
(September 14, 2016), 81 FR 64544 (September 20,
2016) (SR–NASDAQ–2016–126).
5 See Securities Exchange Act Release No. 79075
(October 7, 2016) (SR–NASDAQ–2016–126).
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Three securities.6 Nasdaq subsequently
determined that it would not offer this
re-pricing functionality for Price to
Comply Orders, Non-Displayed Orders,
and Post-Only Orders entered through
the OUCH and FLITE protocols in
Group Three securities. As part of
Partial Amendment No. 2 to SR–
NASDAQ–2016–126, Nasdaq proposed
to delete the relevant language from
Rule 4770 related to this re-pricing
functionality.
In that amendment, Nasdaq noted that
this change would only impact the
treatment of Price to Comply Orders,
Non-Displayed Orders, and Post-Only
orders that are submitted through the
OUCH and FLITE protocols in Test
Group Three Pilot Securities, as these
types of Orders that are currently
submitted to Nasdaq through the RASH,
QIX or FIX protocols are already subject
to this re-pricing functionality and will
remain subject to this functionality
under the Pilot.
In the Amendment, Nasdaq further
noted that its systems are currently
programmed so that Price to Comply
Orders, Non-Displayed Orders and PostOnly Orders entered through the OUCH
and FLITE protocols in Test Group
Three Securities may be adjusted
repeatedly to reflect changes to the
NBBO and/or the best price on the
Nasdaq book. Nasdaq stated that it is reprogramming its systems to remove this
functionality for Price to Comply
Orders, Non-Displayed Orders and PostOnly Orders entered through the OUCH
and FLITE protocols in Test Group
Three Securities. In the Amendment,
Nasdaq stated that it anticipated that
this re-programming shall be completed
no later than November 30, 2016. If it
appeared that this functionality would
remain operational by October 17, 2016,
Nasdaq indicated that it would file a
proposed rule change with the SEC and
will provide notice to market
participants sufficiently in advance of
that date to provide effective notice. The
rule change and the notice to market
participants would describe the current
6 As originally proposed, Rule 4770(d)(2) stated
that Price to Comply Orders in a Test Group Three
Pilot Security will be adjusted repeatedly in
accordance with changes to the NBBO until such
time as the Price to Comply Order is able to be
ranked and displayed at its original entered limit
price. Rule 4770(d)(3) stated that, if market
conditions allow, a Non-Displayed Order in a Test
Group Three Pilot Security will be adjusted
repeatedly in accordance with changes to the NBBO
up (down) to the Order’s limit price. Rule
4770(d)(4) stated that, if market conditions allow,
the Post-Only Order in a Test Group Three Pilot
Security will be adjusted repeatedly in accordance
with changes to the NBBO or the best price on the
Nasdaq Book, as applicable until such time as the
Post-Only Order is able to be ranked and displayed
at its original entered limit price.
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87107
operation of the Nasdaq systems in this
regard, and the timing related to the reprogramming.
On October 17, 2016, Nasdaq filed a
proposal to extend the date by which it
would complete the re-programing of its
systems to eliminate the re-pricing
functionality in Test Group Three
securities for Price to Comply Orders,
Price to Display Orders, Non-Displayed
Orders, and Post-Only Orders that are
entered through the OUCH or FLITE
protocols.7 In that proposal, Nasdaq
stated that it anticipated that this reprogramming shall be complete on or
before October 31, 2016.8
On October 31, 2016, Nasdaq
submitted a proposed rule change to
extend the date by which it would
eliminate the re-pricing functionality to
November 14, 2016.9 In that proposal,
Nasdaq stated that it was still
determining how to modify its systems
to eliminate the current re-pricing
functionality in Test Group Three
securities for Price to Comply Orders,
Price to Display Orders, Non-Displayed
Orders, and Post-Only Orders that are
entered through the OUCH or FLITE
protocols.
At this time, Nasdaq is in the process
of re-programming its systems to
eliminate the re-pricing functionality in
Test Group Three securities for Price to
Comply Orders, Price to Display Orders,
Non-Displayed Orders, and Post-Only
Orders that are entered through the
OUCH or FLITE protocols. Nasdaq
anticipates that this re-programming
shall be complete on or before December
12, 2016.
Therefore, the current treatment of
Price to Comply Orders, Price to Display
Orders, Non-Displayed Orders, and
Post-Only Orders that are entered
through the OUCH or FLITE protocols
in Test Group Three securities shall be
as follows:
Following entry, and if market
conditions allow, a Price to Comply
Order in a Test Group Three Pilot
Security will be adjusted repeatedly in
accordance with changes to the NBBO
until such time as the Price to Comply
Order is able to be ranked and displayed
at its original entered limit price.
7 See Securities Exchange Act Release No. 79155
(October 25, 2016) (SR–NASDAQ–2016–143).
Subsequent to the approval of SR–NASDAQ–
2016–126, Nasdaq become aware that this re-pricing
functionality also applies to Price to Display Orders
that are entered through the OUCH and FLITE
protocols in Test Group Three Securities, and
included those Orders as part of SR–NASDAQ–
2016–143 accordingly. Price to Display Orders will
be treated in the same manner as Price to Comply
Orders under the re-pricing functionality.
8 Id.
9 See Securities Exchange Release No. 79263
(November 8, 2016) (SR–NASDAQ–2016–151).
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Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Following entry, and if market
conditions allow, a Price to Display
Order in a Test Group Three Pilot
Security will be adjusted repeatedly in
accordance with changes to the NBBO
until such time as the Price to Display
Order is able to be ranked and displayed
at its original entered limit price.
Following entry, and if market
conditions allow, a Non-Displayed
Order in a Test Group Three Pilot
Security will be adjusted repeatedly in
accordance with changes to the NBBO
up (down) to the Order’s limit price.
Following entry, and if market
conditions allow, a Post-Only Order in
a Test Group Three Pilot Security will
be adjusted repeatedly in accordance
with changes to the NBBO or the best
price on the Nasdaq Book, as applicable
until such time as the Post-Only Order
is able to be ranked and displayed at its
original entered limit price.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Section 6(b)(5) of the Act,11
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
purpose of this filing is to inform the
SEC and market participants of the
status of Nasdaq’s attempts to reprogram its systems to remove the repricing functionality in Test Group
Three securities for Price to Comply
Orders, Price to Display Orders, NonDisplayed Orders, and Post-Only Orders
that are entered through the OUCH or
FLITE protocols, and the current
treatment of such orders pending the
removal of this functionality. This
proposal is consistent with the Act
because it provides the SEC and market
participants with notice of Nasdaq’s
efforts in this regard, and is being
submitted in connection with the
statements made by Nasdaq in SR–
NASDAQ–2016–126, SR–NASDAQ–
2016–143 and SR–NASDAQ–2016–151
in proposing the removal of this
functionality.
Nasdaq also believes that the proposal
is consistent with the Act because the
re-pricing functionality will not
significantly impact the data gathered
pursuant to the Pilot. Nasdaq notes that
this re-pricing functionality only affects
Price to Comply Orders, Price to Display
Orders, Non-Displayed Orders, and
10 15
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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17:55 Dec 01, 2016
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Post-Only Orders that are entered
through the OUCH or FLITE protocols
for Test Group Three securities until the
re-pricing functionality is eliminated,
and only becomes relevant when an
Order in a Test Group Three security
would cross a Protected Quotation of
another market center. Nasdaq has
analyzed data relating to the frequency
with which Orders in Test Group Three
securities are entered with a limit price
that would cross a Protected Quotation
of another market center, and believes
that the re-pricing functionality will be
triggered infrequently.12 The Exchange
also notes that it is diligently working
to eliminate the current re-pricing
functionality in Test Group Three
securities for Price to Comply Orders,
Price to Display Orders, Non-Displayed
Orders, and Post-Only Orders that are
entered through the OUCH or FLITE
protocols, and that it anticipates this reprogramming to be complete on or
before December 12, 2016.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The purpose
of this proposal is to provide the SEC
and market participants with notice of
Nasdaq’s efforts to remove its re-pricing
functionality in Test Group Three
securities for Price to Comply Orders,
Price to Display Orders, Non-Displayed
Orders, and Post-Only Orders that are
entered through the OUCH or FLITE
protocols, consistent with its statements
in SR–NASDAQ–2016–126, SR–
NASDAQ–2016–143, and SR–
NASDAQ–2016–151.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing change has become
effective pursuant to Section
19(b)(3)(A)(iii) 13 of the Act and Rule
19b–4(f)(6) 14 thereunder, in that it
effects a change that: (i) Does not
significantly affect the protection of
12 For example, for the time period between
October 17 and November 11, 2016, 0.08% of orders
that were entered on Nasdaq in Test Group Three
securities were entered at a price that crossed the
NBBO.
13 15 U.S.C. 78s(b)(3)(A)(iii).
14 17 CFR 240.19b–4(f)(6).
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investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) by its terms, does
not become operative for 30 days after
the date of the filing, or such shorter
time as the Commission may designate
if consistent with the protection of
investors and the public interest.
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) 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
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2016–159 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2016–159. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://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
E:\FR\FM\02DEN1.SGM
02DEN1
Federal Register / Vol. 81, No. 232 / Friday, December 2, 2016 / Notices
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–
NASDAQ–2016–159 and should be
submitted on or before December 23,
2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–28931 Filed 12–1–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. IC–32373]
Notice of Applications for
Deregistration Under Section 8(f) of the
Investment Company Act of 1940
asabaliauskas on DSK3SPTVN1PROD with NOTICES
November 28, 2016.
The following is a notice of
applications for deregistration under
section 8(f) of the Investment Company
Act of 1940 for the month of November
2016. A copy of each application may be
obtained via the Commission’s Web site
by searching for the file number, or for
an applicant using the Company name
box, at https://www.sec.gov/search/
search.htm or by calling (202) 551–
8090. An order granting each
application will be issued unless the
SEC orders a hearing. Interested persons
may request a hearing on any
application by writing to the SEC’s
Secretary at the address below and
serving the relevant applicant with a
copy of the request, personally or by
mail. Hearing requests should be
received by the SEC by 5:30 p.m. on
December 23, 2016, and should be
accompanied by proof of service on
applicants, in the form of an affidavit or,
for lawyers, a certificate of service.
Pursuant to Rule 0–5 under the Act,
hearing requests should state the nature
of the writer’s interest, any facts bearing
upon the desirability of a hearing on the
matter, the reason for the request, and
the issues contested. Persons who wish
to be notified of a hearing may request
notification by writing to the
Commission’s Secretary.
15 17
CFR 200.30–3(a)(12).
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17:55 Dec 01, 2016
Jkt 241001
The Commission: Secretary,
U.S. Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Jessica Shin, Attorney-Adviser, at (202)
551–5921 or Chief Counsel’s Office at
(202) 551–6821; SEC, Division of
Investment Management, Chief
Counsel’s Office, 100 F Street NE.,
Washington, DC 20549–8010.
Dreyfus/Laurel Tax-Free Municipal
Funds [File No. 811–03700]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On October 28,
2015, applicant made a liquidating
distribution to its shareholders, based
on net asset value. Expenses of
$1,700.10 incurred in connection with
the liquidation were paid by the
applicant’s investment adviser. A notice
of applicant’s application was included
in the notice of applications for
deregistration for September 2016
(Investment Company Act Release No.
32299). However, applicants
subsequently amended their application
on October 25, 2016 to correct an error
in connection with the liquidation.
Filing Dates: The application was
filed on August 8, 2016, and amended
on August 31, 2016, October 13, 2016,
and October 25, 2016.
Applicant’s Address: c/o The Dreyfus
Corporation, 200 Park Avenue, New
York, New York 10166.
Templeton Russia and East European
Fund, Inc. [File No. 811–08788]
Summary: Applicant, a closed-end
investment company, seeks an order
declaring that it has ceased to be an
investment company. On December 16,
2015 and December 18, 2016, applicant
made liquidating distributions to its
shareholders, based on net asset value.
As of October 26, 2016, there remained
17,126.077 shares that have not been
surrendered for exchange. The
applicant’s transfer agent will hold the
shares’ distribution pending surrender
of the shares for exchange. If the holders
do not surrender their shares for the
payment and there is no contact from
the holder, then the property will be
deemed to be abandoned. Expenses of
approximately $122,038 incurred in
connection with the liquidation were
paid by the applicant.
Filing Dates: The application was
filed on October 4, 2016, and amended
on November 4, 2016.
Applicant’s Address: 300 SE 2nd
Street, Fort Lauderdale, Florida 33301.
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87109
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–28935 Filed 12–1–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79403; File No. SR–
BatsEDGX–2016–65]
Self-Regulatory Organizations; Bats
EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change To Make a
Ministerial Change to Exchange Rules
11.8, 11.14, and 11.22
November 28, 2016.
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 November
17, 2016, Bats EDGX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘EDGX’’) 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 has
designated this proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6)(iii)
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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange filed a proposal to
make a ministerial change to Exchange
Rules 11.8(d)(5), 11.14(g)(4), and
11.22(a)(7)(A)(i)(2) in order to remove
erroneous and irrelevant rule text as
well as correct a typographical error.
The text of the proposed rule change
is available at the Exchange’s Web site
at www.batstrading.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
Exchange included statements
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6)(iii).
2 17
E:\FR\FM\02DEN1.SGM
02DEN1
Agencies
[Federal Register Volume 81, Number 232 (Friday, December 2, 2016)]
[Notices]
[Pages 87106-87109]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-28931]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79408; File No. SR-NASDAQ-2016-159]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Commentary .14 to Rule 4770 (Compliance With Regulation NMS Plan
To Implement a Tick Size Pilot)
November 28, 2016.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 14, 2016, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Commentary .14 to Rule 4770
(Compliance with Regulation NMS Plan to Implement a Tick Size Pilot) to
provide the SEC with notice of its efforts to re-program its systems to
eliminate a re-pricing functionality for certain orders in Test Group
Three securities in connection with the Regulation NMS Plan to
Implement a Tick Size Pilot Program (``Plan'' or ``Pilot'').\3\
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\3\ See Securities Exchange Act Release No. 74892 (May 6, 2015),
80 FR 27513 (May 13, 2015) (``Approval Order'').
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The text of the proposed rule change is set forth below. Proposed
new language is italicized; deleted text is in brackets.
* * * * *
The NASDAQ Stock Market Rules
* * * * *
4770. Compliance With Regulation NMS Plan To Implement a Tick Size
Pilot
(a) through (d) No Change.
Commentary: .01-.13 No change.
.14 Until [November 14, 2016]December 12, 2016, the treatment of
Price to Comply Orders, Price to Display Orders, Non-Displayed Orders,
and Post-Only Orders that are entered through the OUCH or FLITE
protocols in Test Group Three securities shall be as follows:
Following entry, and if market conditions allow, a Price to Comply
Order in a Test Group Three Pilot Security will be adjusted repeatedly
in accordance with changes to the NBBO until such time as the Price to
Comply Order is able to be ranked and displayed at its original entered
limit price.
Following entry, and if market conditions allow, a Price to Display
Order in a Test Group Three Pilot Security will be adjusted repeatedly
in accordance with changes to the NBBO until such time as the Price to
Display Order is able to be ranked and displayed at its original
entered limit price.
Following entry, and if market conditions allow, a Non-Displayed
Order in a Test Group Three Pilot Security will be adjusted repeatedly
in
[[Page 87107]]
accordance with changes to the NBBO up (down) to the Order's limit
price.
Following entry, and if market conditions allow, the Post-Only
Order in a Test Group Three Pilot Security will be adjusted repeatedly
in accordance with changes to the NBBO or the best price on the Nasdaq
Book, as applicable until such time as the Post-Only Order is able to
be ranked and displayed at its original entered limit price.
* * * * *
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 Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On September 7, 2016, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') a proposed rule change (``Proposal'') to
adopt paragraph (d) and Commentary .12 to Exchange Rule 4770 to
describe changes to system functionality necessary to implement the
Plan. The Exchange also proposed amendments to Rule 4770(a) and (c) to
clarify how the Trade-at exception may be satisfied. The SEC published
the Proposal in the Federal Register for notice and comment on
September 20, 2016.\4\ Nasdaq subsequently filed three Partial
Amendments to clarify aspects of the Proposal. The Commission approved
the Proposal, as amended, on October 7, 2016.\5\
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\4\ See Securities Exchange Act Release No. 78837 (September 14,
2016), 81 FR 64544 (September 20, 2016) (SR-NASDAQ-2016-126).
\5\ See Securities Exchange Act Release No. 79075 (October 7,
2016) (SR-NASDAQ-2016-126).
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In SR-NASDAQ-2016-126, Nasdaq had initially proposed a re-pricing
functionality for Price to Comply Orders, Non-Displayed Orders, and
Post-Only Orders entered through the OUCH and FLITE protocols in Group
Three securities.\6\ Nasdaq subsequently determined that it would not
offer this re-pricing functionality for Price to Comply Orders, Non-
Displayed Orders, and Post-Only Orders entered through the OUCH and
FLITE protocols in Group Three securities. As part of Partial Amendment
No. 2 to SR-NASDAQ-2016-126, Nasdaq proposed to delete the relevant
language from Rule 4770 related to this re-pricing functionality.
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\6\ As originally proposed, Rule 4770(d)(2) stated that Price to
Comply Orders in a Test Group Three Pilot Security will be adjusted
repeatedly in accordance with changes to the NBBO until such time as
the Price to Comply Order is able to be ranked and displayed at its
original entered limit price. Rule 4770(d)(3) stated that, if market
conditions allow, a Non-Displayed Order in a Test Group Three Pilot
Security will be adjusted repeatedly in accordance with changes to
the NBBO up (down) to the Order's limit price. Rule 4770(d)(4)
stated that, if market conditions allow, the Post-Only Order in a
Test Group Three Pilot Security will be adjusted repeatedly in
accordance with changes to the NBBO or the best price on the Nasdaq
Book, as applicable until such time as the Post-Only Order is able
to be ranked and displayed at its original entered limit price.
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In that amendment, Nasdaq noted that this change would only impact
the treatment of Price to Comply Orders, Non-Displayed Orders, and
Post-Only orders that are submitted through the OUCH and FLITE
protocols in Test Group Three Pilot Securities, as these types of
Orders that are currently submitted to Nasdaq through the RASH, QIX or
FIX protocols are already subject to this re-pricing functionality and
will remain subject to this functionality under the Pilot.
In the Amendment, Nasdaq further noted that its systems are
currently programmed so that Price to Comply Orders, Non-Displayed
Orders and Post-Only Orders entered through the OUCH and FLITE
protocols in Test Group Three Securities may be adjusted repeatedly to
reflect changes to the NBBO and/or the best price on the Nasdaq book.
Nasdaq stated that it is re-programming its systems to remove this
functionality for Price to Comply Orders, Non-Displayed Orders and
Post-Only Orders entered through the OUCH and FLITE protocols in Test
Group Three Securities. In the Amendment, Nasdaq stated that it
anticipated that this re-programming shall be completed no later than
November 30, 2016. If it appeared that this functionality would remain
operational by October 17, 2016, Nasdaq indicated that it would file a
proposed rule change with the SEC and will provide notice to market
participants sufficiently in advance of that date to provide effective
notice. The rule change and the notice to market participants would
describe the current operation of the Nasdaq systems in this regard,
and the timing related to the re-programming.
On October 17, 2016, Nasdaq filed a proposal to extend the date by
which it would complete the re-programing of its systems to eliminate
the re-pricing functionality in Test Group Three securities for Price
to Comply Orders, Price to Display Orders, Non-Displayed Orders, and
Post-Only Orders that are entered through the OUCH or FLITE
protocols.\7\ In that proposal, Nasdaq stated that it anticipated that
this re-programming shall be complete on or before October 31, 2016.\8\
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\7\ See Securities Exchange Act Release No. 79155 (October 25,
2016) (SR-NASDAQ-2016-143).
Subsequent to the approval of SR-NASDAQ-2016-126, Nasdaq become
aware that this re-pricing functionality also applies to Price to
Display Orders that are entered through the OUCH and FLITE protocols
in Test Group Three Securities, and included those Orders as part of
SR-NASDAQ-2016-143 accordingly. Price to Display Orders will be
treated in the same manner as Price to Comply Orders under the re-
pricing functionality.
\8\ Id.
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On October 31, 2016, Nasdaq submitted a proposed rule change to
extend the date by which it would eliminate the re-pricing
functionality to November 14, 2016.\9\ In that proposal, Nasdaq stated
that it was still determining how to modify its systems to eliminate
the current re-pricing functionality in Test Group Three securities for
Price to Comply Orders, Price to Display Orders, Non-Displayed Orders,
and Post-Only Orders that are entered through the OUCH or FLITE
protocols.
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\9\ See Securities Exchange Release No. 79263 (November 8, 2016)
(SR-NASDAQ-2016-151).
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At this time, Nasdaq is in the process of re-programming its
systems to eliminate the re-pricing functionality in Test Group Three
securities for Price to Comply Orders, Price to Display Orders, Non-
Displayed Orders, and Post-Only Orders that are entered through the
OUCH or FLITE protocols. Nasdaq anticipates that this re-programming
shall be complete on or before December 12, 2016.
Therefore, the current treatment of Price to Comply Orders, Price
to Display Orders, Non-Displayed Orders, and Post-Only Orders that are
entered through the OUCH or FLITE protocols in Test Group Three
securities shall be as follows:
Following entry, and if market conditions allow, a Price to Comply
Order in a Test Group Three Pilot Security will be adjusted repeatedly
in accordance with changes to the NBBO until such time as the Price to
Comply Order is able to be ranked and displayed at its original entered
limit price.
[[Page 87108]]
Following entry, and if market conditions allow, a Price to Display
Order in a Test Group Three Pilot Security will be adjusted repeatedly
in accordance with changes to the NBBO until such time as the Price to
Display Order is able to be ranked and displayed at its original
entered limit price.
Following entry, and if market conditions allow, a Non-Displayed
Order in a Test Group Three Pilot Security will be adjusted repeatedly
in accordance with changes to the NBBO up (down) to the Order's limit
price.
Following entry, and if market conditions allow, a Post-Only Order
in a Test Group Three Pilot Security will be adjusted repeatedly in
accordance with changes to the NBBO or the best price on the Nasdaq
Book, as applicable until such time as the Post-Only Order is able to
be ranked and displayed at its original entered limit price.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ 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 purpose of this filing is to inform the SEC and market
participants of the status of Nasdaq's attempts to re-program its
systems to remove the re-pricing functionality in Test Group Three
securities for Price to Comply Orders, Price to Display Orders, Non-
Displayed Orders, and Post-Only Orders that are entered through the
OUCH or FLITE protocols, and the current treatment of such orders
pending the removal of this functionality. This proposal is consistent
with the Act because it provides the SEC and market participants with
notice of Nasdaq's efforts in this regard, and is being submitted in
connection with the statements made by Nasdaq in SR-NASDAQ-2016-126,
SR-NASDAQ-2016-143 and SR-NASDAQ-2016-151 in proposing the removal of
this functionality.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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Nasdaq also believes that the proposal is consistent with the Act
because the re-pricing functionality will not significantly impact the
data gathered pursuant to the Pilot. Nasdaq notes that this re-pricing
functionality only affects Price to Comply Orders, Price to Display
Orders, Non-Displayed Orders, and Post-Only Orders that are entered
through the OUCH or FLITE protocols for Test Group Three securities
until the re-pricing functionality is eliminated, and only becomes
relevant when an Order in a Test Group Three security would cross a
Protected Quotation of another market center. Nasdaq has analyzed data
relating to the frequency with which Orders in Test Group Three
securities are entered with a limit price that would cross a Protected
Quotation of another market center, and believes that the re-pricing
functionality will be triggered infrequently.\12\ The Exchange also
notes that it is diligently working to eliminate the current re-pricing
functionality in Test Group Three securities for Price to Comply
Orders, Price to Display Orders, Non-Displayed Orders, and Post-Only
Orders that are entered through the OUCH or FLITE protocols, and that
it anticipates this re-programming to be complete on or before December
12, 2016.
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\12\ For example, for the time period between October 17 and
November 11, 2016, 0.08% of orders that were entered on Nasdaq in
Test Group Three securities were entered at a price that crossed the
NBBO.
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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 not necessary or appropriate in
furtherance of the purposes of the Act. The purpose of this proposal is
to provide the SEC and market participants with notice of Nasdaq's
efforts to remove its re-pricing functionality in Test Group Three
securities for Price to Comply Orders, Price to Display Orders, Non-
Displayed Orders, and Post-Only Orders that are entered through the
OUCH or FLITE protocols, consistent with its statements in SR-NASDAQ-
2016-126, SR-NASDAQ-2016-143, and SR-NASDAQ-2016-151.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing change has become effective pursuant to Section
19(b)(3)(A)(iii) \13\ of the Act and Rule 19b-4(f)(6) \14\ thereunder,
in that it effects a change that: (i) Does not significantly affect the
protection of investors or the public interest; (ii) does not impose
any significant burden on competition; and (iii) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) 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 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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2016-159 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2016-159. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://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
[[Page 87109]]
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-NASDAQ-2016-159 and should be submitted on or before
December 23, 2016.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-28931 Filed 12-1-16; 8:45 am]
BILLING CODE 8011-01-P