Consolidated Tape Association; Order Approving the Eighteenth Substantive Amendment to the Second Restatement of the CTA Plan, 66789-66790 [2013-26557]

Download as PDF Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices For purposes of allocating revenue among the Participants under the Nasdaq/UTP Plan, the Participants would include odd-lot transactions in the Security Income Allocation for each Eligible Security under Paragraph 2 (Security Income Allocation) of Exhibit 1 to the Nasdaq/UTP Plan. Just as with round lot transactions, an odd-lot transaction with a dollar value of $5000 or more would constitute one qualified transaction report and an odd-lot transaction with a dollar value of less than $5000 would constitute a fraction of a qualified transaction report that equals the dollar value of the transaction report divided by $5000. The Participants do not anticipate that this would produce a significant shift in revenue allocation among the Participants. According to the Participants, this treatment of odd-lot transactions for revenue allocation purposes does not require a change to the language of Exhibit 1 to the Nasdaq/ UTP Plan. mstockstill on DSK4VPTVN1PROD with NOTICES III. Discussion and Commission’s Findings After careful review, the Commission finds that the Amendment to the Nasdaq/UTP Plan is consistent with the requirements of the Act and the rules and regulations thereunder,9 and, in particular, Section 11A(a)(1)(C)(iii) of the Act 10 and Rule 608 thereunder 11 in that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to transactions in securities. As the Participants stated in the proposal, oddlot transactions comprise a noteworthy percentage of total trading volume. Thus, including odd-lot transactions on the consolidated tape will enhance posttrade transparency, as well as price discovery, and consequently would further the goals of the Act. The Commission believes that information about odd-lot transactions would provide important information to investors and other market participants and therefore represents a positive development in the provision of market data. IV. Conclusion It is therefore ordered, pursuant to Section 11A of the Act,12 and the rules 9 In approving the Amendment, the Commission has considered the proposed Amendment’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 10 15 U.S.C. 78k–1(a)(1)(C)(iii). 11 17 CFR 240.608. 12 15 U.S.C. 78k–1. VerDate Mar<15>2010 17:25 Nov 05, 2013 Jkt 232001 thereunder, that the proposed amendment to the Nasdaq/UTP Plan (S7–24–89), be, and hereby is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–26556 Filed 11–5–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70794; File No. SR–CTA– 2013–05] Consolidated Tape Association; Order Approving the Eighteenth Substantive Amendment to the Second Restatement of the CTA Plan October 31, 2013. I. Introduction On September 9, 2013, the Consolidated Tape Association (‘‘CTA’’) Plan participants (‘‘Participants’’) 1 filed with the Securities and Exchange Commission (‘‘Commission’’) pursuant to Section 11A of the Securities Exchange Act of 1934 (‘‘Act’’),2 and Rule 608 thereunder,3 a proposal to amend the Second Restatement of the CTA Plan (‘‘CTA Plan’’).4 The proposal represents the eighteenth substantive amendment to the CTA Plan (‘‘Amendment’’) and reflects changes unanimously adopted by the Participants. The Amendment was published for comment in the Federal Register on September 23, 2013.5 No comment letters were received in response to the Notice. The Amendment would require that odd-lot transactions be reported to the consolidated tape. The Plan was amended to remove odd13 17 CFR 200.30–3(a)(27). participant executed the proposed amendment. The Participants are: BATS Exchange, Inc., BATS–Y Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., Nasdaq Stock Market LLC, National Stock Exchange, New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. 2 15 U.S.C. 78k–1. 3 17 CFR 242.608. 4 See Securities Exchange Act Release No. 10787 (May 10, 1974), 39 FR 17799 (declaring the CTA Plan effective). The CTA Plan, pursuant to which markets collect and disseminate last sale price information for non-NASDAQ listed securities, is a ‘‘transaction reporting plan’’ under Rule 601 under the Act, 17 CFR 242.601, and a ‘‘national market system plan’’ under Rule 608 under the Act, 17 CFR 242.608. 5 See Securities Exchange Act Release No. 70428 (September 17, 2013), 78 FR 58362 (‘‘Notice’’). 1 Each PO 00000 Frm 00109 Fmt 4703 Sfmt 4703 66789 lots from the list of transactions that are not to be reported for inclusion on the consolidated tape. This order approves the Amendment to the CTA Plan. II. Description of the Proposal Currently, Section VIII(a) (Responsibility of Exchange Participants) of the CTA Plan provides that each Participant will ‘‘collect and report to the Processor all last sale price information to be reported by it relating to transactions in Eligible Securities taking place on its floor.’’ However, Section VI(d) (Transactions not reported (related messages)) provides a list of transactions that ‘‘are not to be reported for inclusion on the consolidated tape.’’ That list includes odd-lot transactions. According to the Participants, ‘‘because odd-lot transactions account for a not insignificant percentage of trading volume, the Participants have determined that including odd-lot transactions on the consolidated tape of CTA last sale prices would add posttrade transparency to the marketplace.’’ 6 Accordingly, the Amendment proposes to add odd-lot transactions to the consolidated tape by removing them from Section VI(d)’s list of transactions that are not to be reported for inclusion on the consolidated tape. Due to the lack of economic significance of many individual odd-lot orders, the Participants did not propose to include bids and offers for odd-lots in the best bid and best offer calculations that the Participants make available under the Consolidated Quotation Plan. Additionally, the Participants did not propose to include odd-lot transactions in calculations of last sale prices. Therefore, odd-lot transactions would not be included in calculations of high and low prices and would not be subject to the Limit Up-Limit Down Plan 7 (i.e., the National Market System Plan to Address Extraordinary Market Volatility). Moreover, including odd-lot transactions on the consolidated tape would not trigger short sale restrictions or trading halts. However, odd-lot transactions would be included in calculations of daily consolidated volume. For purposes of allocating revenue among the Participants under the CTA Plan, the Participants would include odd-lot transactions in the Security Income Allocation for each Eligible Security under Section XII(a)(ii) (Security Income Allocation) of the CTA 6 Id. at 58363. Securities Exchange Act Release No. 67091, 77 FR 33498 (June 6, 2012) (File No. 4–631) (the Limit Up-Limit Down Plan, as originally approved). 7 See E:\FR\FM\06NON1.SGM 06NON1 66790 Federal Register / Vol. 78, No. 215 / Wednesday, November 6, 2013 / Notices plan. Just as with round lot transactions, an odd-lot transaction with a dollar value of $5000 or more would constitute one qualified transaction report and an odd-lot transaction with a dollar value of less than $5000 would constitute a fraction of a qualified transaction report that equals the dollar value of the transaction report divided by $5000. The Participants do not anticipate that this would produce a significant shift in revenue allocation among the Participants. According to the Participants, this treatment of odd-lot transactions for revenue allocation purposes does not require a change to the language of the CTA Plan. III. Discussion and Commission’s Findings After careful review, the Commission finds that the Amendment to the CTA Plan is consistent with the requirements of the Act and the rules and regulations thereunder,8 and, in particular, Section 11A(a)(1)(C)(iii) of the Act 9 and Rule 608 thereunder 10 in that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to transactions in securities. As the Participants stated in the proposal, odd-lot transactions comprise a noteworthy percentage of total trading volume. Thus, including odd-lot transactions on the consolidated tape will enhance post-trade transparency, as well as price discovery, and consequently would further the goals of the Act. The Commission believes that information about odd-lot transactions would provide important information to investors and other market participants and therefore represents a positive development in the provision of market data. IV. Conclusion mstockstill on DSK4VPTVN1PROD with NOTICES It is therefore ordered, pursuant to Section 11A of the Act,11 and the rules thereunder, that the proposed amendment to the CTA Plan (SR–CTA– 2013–05), be, and hereby is approved. 8 In approving the Amendment, the Commission has considered the proposed Amendment’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 9 15 U.S.C. 78k–1(a)(1)(C)(iii). 10 17 CFR 240.608. 11 15 U.S.C. 78k–1. VerDate Mar<15>2010 17:25 Nov 05, 2013 Jkt 232001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–26557 Filed 11–5–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70789; File No. SR–CFE– 2013–006] Self-Regulatory Organizations; CBOE Futures Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Notification Provisions for Exchange of Contract for Related Position Transactions and Block Trades October 31, 2013. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (‘‘Act’’),1 notice is hereby given that on October 17, 2013, CBOE Futures Exchange, LLC (‘‘CFE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change described in Items I, II, and III below, which Items have been prepared by CFE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. CFE also has filed this proposed rule change with the Commodity Futures Trading Commission (‘‘CFTC’’). CFE filed a written certification with the CFTC under Section 5c(c) of the Commodity Exchange Act (‘‘CEA’’) 2 on October 17, 2013. I. Self-Regulatory Organization’s Description of the Proposed Rule Change CFE proposes to revise the notification provisions contained in CFE Rules 414 (Exchange of Contract for Related Position) (‘‘ECRP’’) and 415 (Block Trading). The scope of this filing is limited solely to the application of the rule changes to security futures traded on CFE. The only security futures currently traded on CFE are traded under Chapter 16 of CFE’s Rulebook which is applicable to Individual Stock Based and Exchange-Traded Fund Based Volatility Index (‘‘Volatility Index’’) security futures. The text of the proposed rule change is attached as Exhibit 4 to the filing 12 17 CFR 200.30–3(a)(27). U.S.C. 78s(b)(7). 2 7 U.S.C. 7a–2(c). 1 15 PO 00000 Frm 00110 Fmt 4703 Sfmt 4703 submitted by the Exchange but is not attached to the published notice of the filing. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CFE 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. CFE 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 CFE recently amended the notification and reporting provisions contained in CFE Rule 414 (which sets forth requirements relating to ECRP transactions) and CFE Rule 415 (which sets forth requirements relating to Block Trades).3 One provision of the recent amendment was to extend the time frames during which ECRP transactions and Block Trades may be reported. As described in SR–CFE–2013–005, the impetus for that filing was the first phase of implementation of the expansion of extended trading hours for CBOE Volatility Index (‘‘VIX’’) futures.4 The current proposal seeks to amend the notification provisions of CFE Rules 414 and 415 in connection with implementation of the second phase of the extension of extended trading hours for VIX futures. The CFE Help Desk will now be staffed to support VIX futures trading that commences at 2:00 a.m. (instead of 7:00 a.m.) on calendar days Monday through Friday. As a result, the Exchange is proposing to amend the notification provisions for ECRP transactions and Block trades that were 3 See Securities Exchange Act Release No. 70611 (October 4, 2013) [sic] (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Notification and Reporting Provisions for Exchange of Contract for Related Position Transactions and Block Trades) (SR–CFE– 2013–005). 4 All times included in this filing and in CFE’s Rules are Chicago time. The first phase of expanded extended trading hours introduces an additional 45minute extended trading hours period from 3:30 p.m.–4:15 p.m. Monday through Thursday for VIX futures. The second phase will change the time that trading starts on a calendar day from 7:00 a.m. to 2:00 a.m. for Business Days Monday through Friday for VIX futures. E:\FR\FM\06NON1.SGM 06NON1

Agencies

[Federal Register Volume 78, Number 215 (Wednesday, November 6, 2013)]
[Notices]
[Pages 66789-66790]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26557]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70794; File No. SR-CTA-2013-05]


Consolidated Tape Association; Order Approving the Eighteenth 
Substantive Amendment to the Second Restatement of the CTA Plan

October 31, 2013.

I. Introduction

    On September 9, 2013, the Consolidated Tape Association (``CTA'') 
Plan participants (``Participants'') \1\ filed with the Securities and 
Exchange Commission (``Commission'') pursuant to Section 11A of the 
Securities Exchange Act of 1934 (``Act''),\2\ and Rule 608 
thereunder,\3\ a proposal to amend the Second Restatement of the CTA 
Plan (``CTA Plan'').\4\ The proposal represents the eighteenth 
substantive amendment to the CTA Plan (``Amendment'') and reflects 
changes unanimously adopted by the Participants. The Amendment was 
published for comment in the Federal Register on September 23, 2013.\5\ 
No comment letters were received in response to the Notice. The 
Amendment would require that odd-lot transactions be reported to the 
consolidated tape. The Plan was amended to remove odd-lots from the 
list of transactions that are not to be reported for inclusion on the 
consolidated tape. This order approves the Amendment to the CTA Plan.
---------------------------------------------------------------------------

    \1\ Each participant executed the proposed amendment. The 
Participants are: BATS Exchange, Inc., BATS-Y Exchange, Inc., 
Chicago Board Options Exchange, Incorporated, Chicago Stock 
Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial 
Industry Regulatory Authority, Inc., International Securities 
Exchange, LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., Nasdaq 
Stock Market LLC, National Stock Exchange, New York Stock Exchange 
LLC, NYSE MKT LLC, and NYSE Arca, Inc.
    \2\ 15 U.S.C. 78k-1.
    \3\ 17 CFR 242.608.
    \4\ See Securities Exchange Act Release No. 10787 (May 10, 
1974), 39 FR 17799 (declaring the CTA Plan effective). The CTA Plan, 
pursuant to which markets collect and disseminate last sale price 
information for non-NASDAQ listed securities, is a ``transaction 
reporting plan'' under Rule 601 under the Act, 17 CFR 242.601, and a 
``national market system plan'' under Rule 608 under the Act, 17 CFR 
242.608.
    \5\ See Securities Exchange Act Release No. 70428 (September 17, 
2013), 78 FR 58362 (``Notice'').
---------------------------------------------------------------------------

II. Description of the Proposal

    Currently, Section VIII(a) (Responsibility of Exchange 
Participants) of the CTA Plan provides that each Participant will 
``collect and report to the Processor all last sale price information 
to be reported by it relating to transactions in Eligible Securities 
taking place on its floor.'' However, Section VI(d) (Transactions not 
reported (related messages)) provides a list of transactions that ``are 
not to be reported for inclusion on the consolidated tape.'' That list 
includes odd-lot transactions. According to the Participants, ``because 
odd-lot transactions account for a not insignificant percentage of 
trading volume, the Participants have determined that including odd-lot 
transactions on the consolidated tape of CTA last sale prices would add 
post-trade transparency to the marketplace.'' \6\ Accordingly, the 
Amendment proposes to add odd-lot transactions to the consolidated tape 
by removing them from Section VI(d)'s list of transactions that are not 
to be reported for inclusion on the consolidated tape.
---------------------------------------------------------------------------

    \6\ Id. at 58363.
---------------------------------------------------------------------------

    Due to the lack of economic significance of many individual odd-lot 
orders, the Participants did not propose to include bids and offers for 
odd-lots in the best bid and best offer calculations that the 
Participants make available under the Consolidated Quotation Plan. 
Additionally, the Participants did not propose to include odd-lot 
transactions in calculations of last sale prices. Therefore, odd-lot 
transactions would not be included in calculations of high and low 
prices and would not be subject to the Limit Up-Limit Down Plan \7\ 
(i.e., the National Market System Plan to Address Extraordinary Market 
Volatility). Moreover, including odd-lot transactions on the 
consolidated tape would not trigger short sale restrictions or trading 
halts. However, odd-lot transactions would be included in calculations 
of daily consolidated volume.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 67091, 77 FR 33498 
(June 6, 2012) (File No. 4-631) (the Limit Up-Limit Down Plan, as 
originally approved).
---------------------------------------------------------------------------

    For purposes of allocating revenue among the Participants under the 
CTA Plan, the Participants would include odd-lot transactions in the 
Security Income Allocation for each Eligible Security under Section 
XII(a)(ii) (Security Income Allocation) of the CTA

[[Page 66790]]

plan. Just as with round lot transactions, an odd-lot transaction with 
a dollar value of $5000 or more would constitute one qualified 
transaction report and an odd-lot transaction with a dollar value of 
less than $5000 would constitute a fraction of a qualified transaction 
report that equals the dollar value of the transaction report divided 
by $5000. The Participants do not anticipate that this would produce a 
significant shift in revenue allocation among the Participants. 
According to the Participants, this treatment of odd-lot transactions 
for revenue allocation purposes does not require a change to the 
language of the CTA Plan.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the Amendment to 
the CTA Plan is consistent with the requirements of the Act and the 
rules and regulations thereunder,\8\ and, in particular, Section 
11A(a)(1)(C)(iii) of the Act \9\ and Rule 608 thereunder \10\ in that 
it is in the public interest and appropriate for the protection of 
investors and the maintenance of fair and orderly markets to assure the 
availability to brokers, dealers, and investors of information with 
respect to transactions in securities. As the Participants stated in 
the proposal, odd-lot transactions comprise a noteworthy percentage of 
total trading volume. Thus, including odd-lot transactions on the 
consolidated tape will enhance post-trade transparency, as well as 
price discovery, and consequently would further the goals of the Act. 
The Commission believes that information about odd-lot transactions 
would provide important information to investors and other market 
participants and therefore represents a positive development in the 
provision of market data.
---------------------------------------------------------------------------

    \8\ In approving the Amendment, the Commission has considered 
the proposed Amendment's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \10\ 17 CFR 240.608.
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act,\11\ 
and the rules thereunder, that the proposed amendment to the CTA Plan 
(SR-CTA-2013-05), be, and hereby is approved.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78k-1.

For the Commission, by the Division of Trading and Markets, pursuant 
to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(27).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-26557 Filed 11-5-13; 8:45 am]
BILLING CODE 8011-01-P
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