Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving the Proposed Rule Change Relating to Alternative Display Facility New Entrant, 7245-7246 [2014-02503]

Download as PDF Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71457; File No. SR–FINRA– 2013–052] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Approving the Proposed Rule Change Relating to Alternative Display Facility New Entrant January 31, 2014. I. Introduction On December 2, 2013, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to add a new entrant to the Alternative Display Facility (the ‘‘Proposal’’). The Proposal was published for comment in the Federal Register on December 17, 2013.3 The Commission received no comments on the Proposal. This order approves the proposed rule change. II. Description of the Proposed Rule Change The Alternative Display Facility (‘‘ADF’’) is a quotation collection and trade reporting facility that provides ADF Market Participants (i.e., ADFregistered market makers or electronic communications networks (‘‘ECNs’’)) 4 the ability to post quotations, display orders and report transactions in NMS stocks 5 for submission to the Securities Information Processors for consolidation and dissemination to vendors and other market participants.6 The ADF is also designed to deliver real-time data to FINRA for regulatory purposes, including enforcement of requirements imposed by Regulation NMS.7 In particular, Rule 610 of Regulation NMS 8 requires that a trading center displaying quotations in an NMS stock through a self-regulatory organization (‘‘SRO’’) display-only facility (such as the ADF) ‘‘provide a level and cost of access to such quotations that is substantially equivalent to the level and cost of access to quotations displayed by mstockstill on DSK4VPTVN1PROD with NOTICES 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 71042 (December 11, 2013), 78 FR 76341 (‘‘Notice’’). 4 See FINRA Rule 6220(a)(3). 5 See 17 CFR 242.600. 6 See Notice, 78 FR at 76341. 7 See 17 CFR 242.600. 8 See Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005) (‘‘NMS Adopting Release’’). 2 17 VerDate Mar<15>2010 18:18 Feb 05, 2014 Jkt 232001 SRO trading facilities in that stock.’’ 9 Rule 610 also requires that a trading center displaying quotations in an NMS stock through an SRO display-only facility not impose unfairly discriminatory terms that prevent or inhibit any person from obtaining efficient access to such quotations through a member, subscriber, or customer of the trading center.10 In articulating this standard, the Commission noted that the level and cost of access would ‘‘encompass both (1) the policies, procedures, and standards that govern access to quotations of the trading center, and (2) the connectivity through which market participants can obtain access and the cost of such connectivity.’’ 11 The nature and cost of connections for market participants seeking to access the ADF participant’s quotations would need to be substantially equivalent to the nature and cost of connections to SRO trading facilities.12 In determining whether ADF participants have satisfied the access standards under Rule 610, Regulation NMS also requires FINRA to submit a proposed rule change under Section 19(b) of the Act in order to add a new ADF participant.13 Accordingly, FINRA is proposing to add LavaFlow (‘‘FLOW’’) as a new ADF Market Participant.14 FLOW provided FINRA with a summary of its policies and procedures regarding access to its quotations in an NMS stock displayed on the ADF, and a summary of its proposed fees for such access.15 According to FINRA, FLOW has proposed policies and procedures that are designed to ensure that the level of access to its quotations is substantially equivalent to the level of access to quotations displayed by SRO trading facilities, and to ensure that FLOW does not impose unfairly discriminatory terms that prevent or inhibit any person from obtaining efficient access to such quotations.16 In particular, FINRA states that FLOW allows firms to access its liquidity in a variety of ways.17 FLOW also allows a subscriber to determine its level of 9 17 CFR 242.610(b)(1). CFR 242.610(b)(2). 11 NMS Adopting Release, 70 FR at 37549. 12 Id. 13 See Notice, 78 FR at 76342. 14 According to FINRA, there have been no ADF Market Participants since the second quarter of 2010. See id. 15 See Notice, 78 FR at 76341. 16 See Notice, 78 FR at 76342. 17 Firms that are FLOW subscribers may connect to FLOW via the FLOW Smart Order Router, or through the FLOW Gateway. Non-FLOW subscribers may connect via a third party vendor or connectivity provider, or through an exchange or a third-party broker-dealer subscriber. See id. 10 17 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 7245 connectivity, and does not have any tiers or rules regarding execution of orders based upon Market Participant Identification.18 Additionally, the FLOW matching engine does not give priority to any participant and is blind to a participant’s identity, with the exception of orders using the antiinternalization feature.19 FLOW also maintains policies and procedures that require FLOW to respond to orders by non-subscribers as promptly as it responds to orders by subscribers, and allow for non-subscribers to be able to automatically execute against quotations displayed by the system.20 In addition, FINRA states that FLOW has established, and regularly maintains, policies and procedures designed to maintain a linkage with at least one SRO trading facility, or SRO display-only facility (together, ‘‘SRO Facility’’).21 FLOW also maintains policies and procedures to transmit to such SRO Facility for display either the best priced order of those orders entered by OTC market makers and exchange market makers for those securities in which they make markets (or act as specialists) or the best priced orders entered by all ECN subscribers.22 Moreover, FLOW has represented to FINRA that it has policies and procedures to provide, to any broker or dealer, access to such orders that is functionally equivalent to the access that is generally available for quotes displayed by an SRO Facility, at a level and cost of access that is substantially similar to the level and cost of access to quotations displayed by SRO trading facilities in that stock.23 FLOW also has policies and procedures to conduct continuous monitoring of its connections with SRO Facilities and regular periodic system capacity reviews and tests to ensure future capacity and system integrity.24 Furthermore, FINRA states that FLOW has policies and procedures designed to ensure that the cost of access to its quotations is substantially equivalent to the cost of access to quotations displayed by SRO trading facilities, and that FLOW will not charge a fee for accessing its quotations that exceeds the maximum fee permitted by Rule 610 of Regulation NMS.25 Specifically, the cost of accessing the quotations of a trading center may involve several distinct 18 See id. id. 20 See id. 21 See id. 22 See id. 23 See id. 24 See id. 25 See id. 19 See E:\FR\FM\06FEN1.SGM 06FEN1 7246 Federal Register / Vol. 79, No. 25 / Thursday, February 6, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES costs, such as port fees,26 market data fees,27 general connectivity fees,28 and transaction fees,29 and FLOW proposes to assess costs in these respects that are substantially equivalent to the costs assessed by SRO trading facilities.30 FINRA also notes that the FLOW fee structure is currently a maker-taker model where FLOW pays a rebate for added executed liquidity and charges a fee for removed liquidity.31 FLOW charges a standard rate of $0.0030 to remove liquidity.32 Pricing is subject to change with advance notice provided to subscribers, and for non-subscribers, notice of a price change is published on the FLOW Web site in advance of such price change.33 In addition, FLOW charges subscribers and non-subscribers the same fees for utilizing its system, and monitors the average fee charged to non-subscribers and compares it to the average fee paid by subscribers in order to ensure the prices are the same.34 Finally, FINRA states that all members in good standing of an SRO are 26 FLOW charges port fees to subscribers based upon the number of ports requested. Fee-eligible port connections may be charged $400 per connection, per month. In comparison, exchange port fees on average range from $100 to $1,000 per port, per month. See id. 27 According to FINRA, FLOW has represented that it does not have any plans to charge its subscribers or non-subscribers for access to FLOW’s market data. In comparison, market data fees vary by exchange, with some exchanges charging fees that range from under $100 per month to $750 to $2,500, and some exchanges charging $5,000 for external distribution. See Notice, 78 FR at 76342– 43. 28 According to FINRA, FLOW is connected in its production environment to most outbound routers via intranets, cross connects and other direct connections. FLOW has also represented to FINRA that the cost to establish connections to FLOW for users of these services and for individual firms not using these services should be substantially the same as the costs to connect to an exchange. Both FLOW subscribers and non-subscribers are responsible for paying for their own external telecommunications costs to connect to FLOW. FLOW has represented to FINRA that such fees would be equivalent to the costs to connect to other trading center. See Notice, 78 FR at 76342. 29 Exchanges currently charge a range of other fees, including but not limited to membership fees, trading rights fees, risk gateway fees and other miscellaneous fees. According to FINRA, FLOW has represented that it does not assess similar charges. See Notice, 78 FR at 76343. 30 See Notice, 78 FR at 76342. 31 See Notice, 78 FR at 76343. 32 FLOW also pays a current base rebate of $0.0024 per share for added executed visible liquidity and $0.0010 per share of added executed non-visible liquidity. There are increased rebate incentives for FLOW subscribers that maintain higher volumes on a daily basis. See Notice, 78 FR at 76343, n. 20. 33 See Notice, 78 FR at 76343. 34 FINRA states that in the event that FLOW makes a material change to its policies and procedures governing access to FLOW, including a change to its fees, FLOW will submit to FINRA, and FINRA will post on its Web site, an amended description of FLOW’s policies, procedures and fees governing access. See Notice, 78 FR at 76343, n. 21. VerDate Mar<15>2010 18:18 Feb 05, 2014 Jkt 232001 eligible to become FLOW subscribers, and will be subject to credit limits set by FLOW.35 III. Discussion and Commission Findings After carefully considering the Proposal, the Commission finds that the Proposal is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association.36 In particular, the Commission finds that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,37 which requires, in part, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. Specifically, the Commission believes that the Proposal is consistent with Section 15A(b)(6) of the Act because the fees and the policies and procedures governing access to protected quotations displayed on the ADF by FLOW as described above should provide market participants with fair and efficient access, and are not unfairly discriminatory such that they would prevent a market participant from obtaining efficient access to such quotations. All members in good standing of an SRO are eligible to become FLOW subscribers, and both subscribers and non-subscribers may access FLOW liquidity. FLOW offers both subscribers and non-subscribers multiple options to access FLOW liquidity. In addition, FLOW also has policies and procedures that require FLOW to respond to orders by nonsubscribers as promptly as it responds to orders by subscribers, and allow for non-subscribers to be able to automatically execute against quotations displayed by the system. Finally, the Commission notes FINRA’s representation that the proposed level and cost of access is, in relative terms, substantially equivalent to the level and cost of access provided by SRO trading facilities.38 For these reasons, the Commission believes that the proposed rule change is consistent with the Act. 35 See Notice, 78 FR at 76343. approving the proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 37 15 U.S.C. 78o–3(b)(6). 38 See Notice at 78 FR at 76343 for a more detailed comparison of FLOW fees against those of other SROs. 36 In PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,39 that the proposed rule change (SR–FINRA– 2013–052), is hereby approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.40 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–02503 Filed 2–5–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71454; File No. SR–NYSE– 2014–06] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Its Price List To (i) Increase the Credit for Agency Cross Trades; (ii) Increase the Fee for Certain Executions at the Close; (iii) Increase the ‘‘Tier 1 Adding Credit;’’ (iv) Increase the Fee for Certain Floor Broker Discretionary eQuotes; (v) Increase the Credit for Certain Floor Broker Executions That Add Liquidity; (vi) Increase the Credit for Certain Supplemental Liquidity Provider Executions; and (vii) Increase the Fee for Executions in Crossing Session II January 31, 2014. 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 January 23, 2014, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) 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 selfregulatory organization. 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 its Price List to (i) increase the credit for agency cross trades; (ii) increase the fee for certain executions at the close; (iii) increase the ‘‘Tier 1 Adding Credit;’’ (iv) increase the fee for certain Floor broker 39 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 40 17 E:\FR\FM\06FEN1.SGM 06FEN1

Agencies

[Federal Register Volume 79, Number 25 (Thursday, February 6, 2014)]
[Notices]
[Pages 7245-7246]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-02503]



[[Page 7245]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71457; File No. SR-FINRA-2013-052]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Order Approving the Proposed Rule Change Relating to 
Alternative Display Facility New Entrant

January 31, 2014.

I. Introduction

    On December 2, 2013, the Financial Industry Regulatory Authority, 
Inc. (``FINRA'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to add a new entrant to the Alternative Display 
Facility (the ``Proposal''). The Proposal was published for comment in 
the Federal Register on December 17, 2013.\3\ The Commission received 
no comments on the Proposal. This order approves the proposed rule 
change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 71042 (December 11, 
2013), 78 FR 76341 (``Notice'').
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II. Description of the Proposed Rule Change

    The Alternative Display Facility (``ADF'') is a quotation 
collection and trade reporting facility that provides ADF Market 
Participants (i.e., ADF-registered market makers or electronic 
communications networks (``ECNs'')) \4\ the ability to post quotations, 
display orders and report transactions in NMS stocks \5\ for submission 
to the Securities Information Processors for consolidation and 
dissemination to vendors and other market participants.\6\ The ADF is 
also designed to deliver real-time data to FINRA for regulatory 
purposes, including enforcement of requirements imposed by Regulation 
NMS.\7\
---------------------------------------------------------------------------

    \4\ See FINRA Rule 6220(a)(3).
    \5\ See 17 CFR 242.600.
    \6\ See Notice, 78 FR at 76341.
    \7\ See 17 CFR 242.600.
---------------------------------------------------------------------------

    In particular, Rule 610 of Regulation NMS \8\ requires that a 
trading center displaying quotations in an NMS stock through a self-
regulatory organization (``SRO'') display-only facility (such as the 
ADF) ``provide a level and cost of access to such quotations that is 
substantially equivalent to the level and cost of access to quotations 
displayed by SRO trading facilities in that stock.'' \9\ Rule 610 also 
requires that a trading center displaying quotations in an NMS stock 
through an SRO display-only facility not impose unfairly discriminatory 
terms that prevent or inhibit any person from obtaining efficient 
access to such quotations through a member, subscriber, or customer of 
the trading center.\10\ In articulating this standard, the Commission 
noted that the level and cost of access would ``encompass both (1) the 
policies, procedures, and standards that govern access to quotations of 
the trading center, and (2) the connectivity through which market 
participants can obtain access and the cost of such connectivity.'' 
\11\ The nature and cost of connections for market participants seeking 
to access the ADF participant's quotations would need to be 
substantially equivalent to the nature and cost of connections to SRO 
trading facilities.\12\
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    \8\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496 (June 29, 2005) (``NMS Adopting Release'').
    \9\ 17 CFR 242.610(b)(1).
    \10\ 17 CFR 242.610(b)(2).
    \11\ NMS Adopting Release, 70 FR at 37549.
    \12\ Id.
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    In determining whether ADF participants have satisfied the access 
standards under Rule 610, Regulation NMS also requires FINRA to submit 
a proposed rule change under Section 19(b) of the Act in order to add a 
new ADF participant.\13\ Accordingly, FINRA is proposing to add 
LavaFlow (``FLOW'') as a new ADF Market Participant.\14\ FLOW provided 
FINRA with a summary of its policies and procedures regarding access to 
its quotations in an NMS stock displayed on the ADF, and a summary of 
its proposed fees for such access.\15\ According to FINRA, FLOW has 
proposed policies and procedures that are designed to ensure that the 
level of access to its quotations is substantially equivalent to the 
level of access to quotations displayed by SRO trading facilities, and 
to ensure that FLOW does not impose unfairly discriminatory terms that 
prevent or inhibit any person from obtaining efficient access to such 
quotations.\16\
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    \13\ See Notice, 78 FR at 76342.
    \14\ According to FINRA, there have been no ADF Market 
Participants since the second quarter of 2010. See id.
    \15\ See Notice, 78 FR at 76341.
    \16\ See Notice, 78 FR at 76342.
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    In particular, FINRA states that FLOW allows firms to access its 
liquidity in a variety of ways.\17\ FLOW also allows a subscriber to 
determine its level of connectivity, and does not have any tiers or 
rules regarding execution of orders based upon Market Participant 
Identification.\18\ Additionally, the FLOW matching engine does not 
give priority to any participant and is blind to a participant's 
identity, with the exception of orders using the anti-internalization 
feature.\19\ FLOW also maintains policies and procedures that require 
FLOW to respond to orders by non-subscribers as promptly as it responds 
to orders by subscribers, and allow for non-subscribers to be able to 
automatically execute against quotations displayed by the system.\20\
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    \17\ Firms that are FLOW subscribers may connect to FLOW via the 
FLOW Smart Order Router, or through the FLOW Gateway. Non-FLOW 
subscribers may connect via a third party vendor or connectivity 
provider, or through an exchange or a third-party broker-dealer 
subscriber. See id.
    \18\ See id.
    \19\ See id.
    \20\ See id.
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    In addition, FINRA states that FLOW has established, and regularly 
maintains, policies and procedures designed to maintain a linkage with 
at least one SRO trading facility, or SRO display-only facility 
(together, ``SRO Facility'').\21\ FLOW also maintains policies and 
procedures to transmit to such SRO Facility for display either the best 
priced order of those orders entered by OTC market makers and exchange 
market makers for those securities in which they make markets (or act 
as specialists) or the best priced orders entered by all ECN 
subscribers.\22\ Moreover, FLOW has represented to FINRA that it has 
policies and procedures to provide, to any broker or dealer, access to 
such orders that is functionally equivalent to the access that is 
generally available for quotes displayed by an SRO Facility, at a level 
and cost of access that is substantially similar to the level and cost 
of access to quotations displayed by SRO trading facilities in that 
stock.\23\ FLOW also has policies and procedures to conduct continuous 
monitoring of its connections with SRO Facilities and regular periodic 
system capacity reviews and tests to ensure future capacity and system 
integrity.\24\
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    \21\ See id.
    \22\ See id.
    \23\ See id.
    \24\ See id.
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    Furthermore, FINRA states that FLOW has policies and procedures 
designed to ensure that the cost of access to its quotations is 
substantially equivalent to the cost of access to quotations displayed 
by SRO trading facilities, and that FLOW will not charge a fee for 
accessing its quotations that exceeds the maximum fee permitted by Rule 
610 of Regulation NMS.\25\ Specifically, the cost of accessing the 
quotations of a trading center may involve several distinct

[[Page 7246]]

costs, such as port fees,\26\ market data fees,\27\ general 
connectivity fees,\28\ and transaction fees,\29\ and FLOW proposes to 
assess costs in these respects that are substantially equivalent to the 
costs assessed by SRO trading facilities.\30\
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    \25\ See id.
    \26\ FLOW charges port fees to subscribers based upon the number 
of ports requested. Fee-eligible port connections may be charged 
$400 per connection, per month. In comparison, exchange port fees on 
average range from $100 to $1,000 per port, per month. See id.
    \27\ According to FINRA, FLOW has represented that it does not 
have any plans to charge its subscribers or non-subscribers for 
access to FLOW's market data. In comparison, market data fees vary 
by exchange, with some exchanges charging fees that range from under 
$100 per month to $750 to $2,500, and some exchanges charging $5,000 
for external distribution. See Notice, 78 FR at 76342-43.
    \28\ According to FINRA, FLOW is connected in its production 
environment to most outbound routers via intranets, cross connects 
and other direct connections. FLOW has also represented to FINRA 
that the cost to establish connections to FLOW for users of these 
services and for individual firms not using these services should be 
substantially the same as the costs to connect to an exchange. Both 
FLOW subscribers and non-subscribers are responsible for paying for 
their own external telecommunications costs to connect to FLOW. FLOW 
has represented to FINRA that such fees would be equivalent to the 
costs to connect to other trading center. See Notice, 78 FR at 
76342.
    \29\ Exchanges currently charge a range of other fees, including 
but not limited to membership fees, trading rights fees, risk 
gateway fees and other miscellaneous fees. According to FINRA, FLOW 
has represented that it does not assess similar charges. See Notice, 
78 FR at 76343.
    \30\ See Notice, 78 FR at 76342.
---------------------------------------------------------------------------

    FINRA also notes that the FLOW fee structure is currently a maker-
taker model where FLOW pays a rebate for added executed liquidity and 
charges a fee for removed liquidity.\31\ FLOW charges a standard rate 
of $0.0030 to remove liquidity.\32\ Pricing is subject to change with 
advance notice provided to subscribers, and for non-subscribers, notice 
of a price change is published on the FLOW Web site in advance of such 
price change.\33\ In addition, FLOW charges subscribers and non-
subscribers the same fees for utilizing its system, and monitors the 
average fee charged to non-subscribers and compares it to the average 
fee paid by subscribers in order to ensure the prices are the same.\34\
---------------------------------------------------------------------------

    \31\ See Notice, 78 FR at 76343.
    \32\ FLOW also pays a current base rebate of $0.0024 per share 
for added executed visible liquidity and $0.0010 per share of added 
executed non-visible liquidity. There are increased rebate 
incentives for FLOW subscribers that maintain higher volumes on a 
daily basis. See Notice, 78 FR at 76343, n. 20.
    \33\ See Notice, 78 FR at 76343.
    \34\ FINRA states that in the event that FLOW makes a material 
change to its policies and procedures governing access to FLOW, 
including a change to its fees, FLOW will submit to FINRA, and FINRA 
will post on its Web site, an amended description of FLOW's 
policies, procedures and fees governing access. See Notice, 78 FR at 
76343, n. 21.
---------------------------------------------------------------------------

    Finally, FINRA states that all members in good standing of an SRO 
are eligible to become FLOW subscribers, and will be subject to credit 
limits set by FLOW.\35\
---------------------------------------------------------------------------

    \35\ See Notice, 78 FR at 76343.
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III. Discussion and Commission Findings

    After carefully considering the Proposal, the Commission finds that 
the Proposal is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
association.\36\ In particular, the Commission finds that the proposed 
rule change is consistent with the provisions of Section 15A(b)(6) of 
the Act,\37\ which requires, in part, that FINRA rules must be designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, and, in general, to protect 
investors and the public interest.
---------------------------------------------------------------------------

    \36\ In approving the proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \37\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    Specifically, the Commission believes that the Proposal is 
consistent with Section 15A(b)(6) of the Act because the fees and the 
policies and procedures governing access to protected quotations 
displayed on the ADF by FLOW as described above should provide market 
participants with fair and efficient access, and are not unfairly 
discriminatory such that they would prevent a market participant from 
obtaining efficient access to such quotations. All members in good 
standing of an SRO are eligible to become FLOW subscribers, and both 
subscribers and non-subscribers may access FLOW liquidity. FLOW offers 
both subscribers and non-subscribers multiple options to access FLOW 
liquidity. In addition, FLOW also has policies and procedures that 
require FLOW to respond to orders by non-subscribers as promptly as it 
responds to orders by subscribers, and allow for non-subscribers to be 
able to automatically execute against quotations displayed by the 
system. Finally, the Commission notes FINRA's representation that the 
proposed level and cost of access is, in relative terms, substantially 
equivalent to the level and cost of access provided by SRO trading 
facilities.\38\
---------------------------------------------------------------------------

    \38\ See Notice at 78 FR at 76343 for a more detailed comparison 
of FLOW fees against those of other SROs.
---------------------------------------------------------------------------

    For these reasons, the Commission believes that the proposed rule 
change is consistent with the Act.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\39\ that the proposed rule change (SR-FINRA-2013-052), is hereby 
approved.
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    \39\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\40\
---------------------------------------------------------------------------

    \40\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02503 Filed 2-5-14; 8:45 am]
BILLING CODE 8011-01-P
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