Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Implementation Date of Market Participant Identifier Requirements for Alternative Trading Systems, 62500-62502 [2014-24682]

Download as PDF 62500 Federal Register / Vol. 79, No. 201 / Friday, October 17, 2014 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEArca–2014–114 and should be submitted on or November 7, 2014. 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 self-regulatory organization 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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.29 Kevin M. O’Neill, Deputy Secretary. IV. Solicitation of Comments [FR Doc. 2014–24683 Filed 10–16–14; 8:45 am] 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: BILLING CODE 8011–01–P Electronic Comments SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73340; File No. SR–FINRA– 2014–042] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Implementation Date of Market Participant Identifier Requirements for Alternative Trading Systems Paper Comments mstockstill on DSK4VPTVN1PROD with NOTICES • 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– NYSEArca–2014–114 on the subject line. October 10, 2014. • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSEArca–2014–114. 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 VerDate Sep<11>2014 17:59 Oct 16, 2014 Jkt 235001 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 October 2, 2014, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) 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 FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to 29 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 1 15 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 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 FINRA is proposing to postpone until February 2, 2015, the implementation date of the requirement that alternative trading systems (‘‘ATSs’’) use unique market participant identifiers (‘‘MPIDs’’) when reporting order and trade information to FINRA. The proposed rule change does not make any changes to the text of FINRA rules. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA 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. FINRA 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, Proposed Rule Change 1. Purpose On January 17, 2014, the Commission approved SR–FINRA–2013–042, a proposed rule change to (i) adopt Rule 4552 to require ATSs to report to FINRA weekly volume information and number of trades regarding securities transactions within the ATS; and (ii) amend Rules 6160, 6170, 6480, and 6720 to require each ATS to acquire and use a single, unique MPID when reporting information to FINRA.4 Rule 4552 was implemented on May 12, 2014, and the MPID requirement for ATSs is currently scheduled to be implemented on November 10, 2014.5 The proposed rule change postpones the implementation date for ATSs to 4 See Securities Exchange Act Release No. 71341 (January 17, 2014), 79 FR 4213 (January 24, 2014) (Order Approving SR–FINRA–2013–042). On April 3, 2014, FINRA filed with the Commission for immediate effectiveness a proposed rule change to amend Rules 6160, 6170, 6480, and 6720 to permit an ATS that trades both TRACE-Eligible Securities and equity securities (OTC Equity Securities or NMS stocks) to use two MPIDs, rather than a single unique MPID, if each MPID is used exclusively for either TRACE-Eligible Securities or equity securities. See Securities Exchange Act Release No. 71911 (April 9, 2014), 79 FR 21316 (April 15, 2014). 5 See Regulatory Notice 14–07 (February 2014). E:\FR\FM\17OCN1.SGM 17OCN1 Federal Register / Vol. 79, No. 201 / Friday, October 17, 2014 / Notices comply with the new MPID requirement until February 2, 2015. At the time FINRA filed SR–FINRA– 2013–042, FINRA recognized that ‘‘given the potential systems changes required by the MPID requirement, FINRA will provide additional time for firms to implement the MPID requirement.’’ 6 Because of the time necessary to make many of these systems changes, FINRA also noted in its response to comments on SR– FINRA–2013–042 that ‘‘FINRA believes increased transparency in the over-thecounter market is necessary and beneficial and can be more readily achieved through reporting requirements before the MPID requirement is implemented. Consequently, FINRA declines to eliminate the reporting requirement from the first phase of the Proposal but reaffirms its commitment to reassessing its need following implementation of the MPID requirement.’’ 7 The selfreporting requirements in Rule 4552 were implemented on May 12, 2014, and FINRA began publishing ATS data on June 2, 2014; consequently, the transparency benefits of the new selfreporting rule are already in place, and ATS volume information is currently available on FINRA’s Web site.8 For the past several months, FINRA staff has been discussing implementation issues arising with the MPID requirement with various ATSs and industry trade groups. In large part, these issues involved specific, detailed scenarios ATSs must program for to report trades to a FINRA trade reporting facility or to report order information to FINRA’s Order Audit Trail System (‘‘OATS’’). In response to these inquiries, FINRA published written guidance for ATSs on trade reporting and OATS reporting on September 15, 2014.9 As part of this guidance, FINRA clarified ATSs’ trade reporting obligations regarding the appropriate indication of MPIDs in various trade reporting scenarios, the use of tape and non-tape reports for ATS transactions, the capacity of ATSs on trade reports, and the inclusion of short sale indicators on trade reports. Members have requested that FINRA postpone the implementation date for mstockstill on DSK4VPTVN1PROD with NOTICES 6 Securities Exchange Act Release No. 70676 (October 11, 2013), 78 FR 62862, 62856 (October 22, 2013) (Notice of Filing of SR–FINRA–2013–042). 7 Letter from Brant K. Brown, Associate General Counsel, FINRA, to Elizabeth Murphy, Secretary, SEC, dated January 15, 2014, at 7. 8 FINRA has created a page on its Web site dedicated to the new ATS requirements, including a link to the ATS data reported pursuant to Rule 4552. See www.finra.org/ats. 9 See www.finra.org/Industry/Compliance/Market Transparency/ATS/FAQ/. VerDate Sep<11>2014 17:59 Oct 16, 2014 Jkt 235001 the ATS MPID requirement so that members can ensure that their trade reports and OATS reports comply with this guidance. FINRA believes that it would be beneficial to postpone the implementation date by approximately three months to provide firms with sufficient time to incorporate this guidance into their coding for the MPID requirement. A postponement should help ensure that firms are consistently reporting similar information to FINRA and that FINRA’s audit trail information is correct and reliable. FINRA believes that, if additional time is not provided, firms may not be ready to comply with the new guidance by November 10, 2014, and FINRA’s audit trail could be less accurate as a result. FINRA has filed the proposed rule change for immediate effectiveness. The effective date and the implementation date will be the date of filing, October 2, 2014. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,10 which requires, among other things, 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. FINRA believes postponing the implementation date of the ATS MPID requirement by three months will provide firms with sufficient time to incorporate FINRA’s new trade reporting and OATS guidance into their coding for the MPID requirement. This additional time should help ensure that firms are reporting information to FINRA so that FINRA’s audit trail information is consistent, correct, and reliable. FINRA believes that, if additional time is not provided, firms may not be ready to comply with the new guidance and FINRA’s audit trail could be less accurate. Inconsistent reporting of ATS order and trade information could also adversely affect FINRA’s ability to rely on automated surveillance patterns to detect potential misconduct. B. Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. FINRA believes that extending the implementation date of the new ATS MPID requirement will provide firms 10 15 PO 00000 U.S.C. 78o–3(b)(6). Frm 00090 Fmt 4703 Sfmt 4703 62501 with needed additional time so that they can better comply with recently-issued FINRA guidance on an ATS’s trade reporting and OATS obligations. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 11 and Rule 19b– 4(f)(6) thereunder.12 FINRA has requested that the Commission waive the 30-day operative delay, so that the proposed rule change would be operative on filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. By making the proposed rule change operative immediately FINRA’s ATS members can immediately be afforded notice of the additional time available for compliance with the MPID requirement. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.13 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 11 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change along with a brief description and text of the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 13 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 12 17 E:\FR\FM\17OCN1.SGM 17OCN1 62502 Federal Register / Vol. 79, No. 201 / Friday, October 17, 2014 / Notices 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: [FR Doc. 2014–24682 Filed 10–16–14; 8:45 am] • 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– FINRA–2014–042 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. All submissions should refer to File Number SR–FINRA–2014–042. 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 business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of FINRA. 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–FINRA–2014–042 and should be submitted on or before November 7, 2014. [Release No. 34–73338; File No. SR–CBOE– 2014–076] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend a Pilot Program October 10, 2014. 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 October 3, 2014, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the 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 extend a pilot program. The text of the proposed rule change is available on the Exchange’s Web site (https:// www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, 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 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 14 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 19:11 Oct 16, 2014 Jkt 235001 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 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Electronic Comments mstockstill on DSK4VPTVN1PROD with NOTICES For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 1. Purpose On February 8, 2013, the Exchange received approval of a rule change that established a Pilot Program that allows the Exchange to list options on the S&P 500 Index whose exercise settlement value is derived from closing prices on the last trading day prior to expiration (‘‘SPXPM’’).3 On July 31, 2013, the Exchange received approval of a rule change that amended the Pilot Program to allow the Exchange to list options on the Mini-SPX Index (‘‘XSP’’) whose exercise settlement value is derived from closing prices on the last trading day prior to expiration (‘‘P.M.-settled’’) 4 (together, SPXPM and P.M.-settled XSP to be referred to herein as the ‘‘Pilot Products’’).5 In January 2014, the Exchange filed a proposed rule change that extended the pilot period from February 8, 2014 to November 3, 2014.6 The Exchange hereby proposes to extend the duration of this pilot period to end on May 3, 2016. During the course of the Pilot Program and in support of the extension of the Pilot Program, the Exchange has submitted to the Commission reports regarding the Pilot Program which detail the Exchange’s experience with the Pilot Program, pursuant to the SPXPM Approval Order and the P.M.-settled XSP Approval Order. Specifically, the Exchange has submitted a Pilot Program report to the Commission (the ‘‘annual report’’). The annual report has contained an analysis of volume, open interest, and trading patterns. The analysis examines trading in Pilot Products as well as trading in the securities that comprise the underlying index. In addition, for series that exceed certain minimum open interest parameters, the annual report provides analysis of index price volatility and share trading activity. In addition to the annual report, the Exchange provides the Commission with periodic interim 3 See Securities Exchange Act Release No. 68888 (February 8, 2013), 78 FR 10668 (February 14, 2013) (SR–CBOE–2012–120) (the ‘‘SPXPM Pilot Program Approval Order’’). 4 See Securities Exchange Act Release No. 70087 (July 31, 2013), 78 FR 47809 (August 6, 2013) (SR– CBOE–2013–055) (the ‘‘P.M.-settled XSP Approval Order’’). 5 For more information on SPXPM, P.M.-settled XSP or the Pilot Program, see the SPXPM Approval Order and the P.M.-settled XSP Approval Order. 6 See Securities Exchange Act Release No. 71424 (January 28, 2014), 79 FR 6249 (February 3, 2014) (SR–CBOE–2014–004). E:\FR\FM\17OCN1.SGM 17OCN1

Agencies

[Federal Register Volume 79, Number 201 (Friday, October 17, 2014)]
[Notices]
[Pages 62500-62502]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-24682]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73340; File No. SR-FINRA-2014-042]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change Relating to the Implementation Date of Market 
Participant Identifier Requirements for Alternative Trading Systems

October 10, 2014.
    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 October 2, 2014, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') 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 FINRA. FINRA has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which 
renders the proposal effective upon receipt of this filing by the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

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

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

    FINRA is proposing to postpone until February 2, 2015, the 
implementation date of the requirement that alternative trading systems 
(``ATSs'') use unique market participant identifiers (``MPIDs'') when 
reporting order and trade information to FINRA.
    The proposed rule change does not make any changes to the text of 
FINRA rules.

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

    In its filing with the Commission, FINRA 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. FINRA 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, Proposed Rule Change

1. Purpose
    On January 17, 2014, the Commission approved SR-FINRA-2013-042, a 
proposed rule change to (i) adopt Rule 4552 to require ATSs to report 
to FINRA weekly volume information and number of trades regarding 
securities transactions within the ATS; and (ii) amend Rules 6160, 
6170, 6480, and 6720 to require each ATS to acquire and use a single, 
unique MPID when reporting information to FINRA.\4\ Rule 4552 was 
implemented on May 12, 2014, and the MPID requirement for ATSs is 
currently scheduled to be implemented on November 10, 2014.\5\ The 
proposed rule change postpones the implementation date for ATSs to

[[Page 62501]]

comply with the new MPID requirement until February 2, 2015.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 71341 (January 17, 
2014), 79 FR 4213 (January 24, 2014) (Order Approving SR-FINRA-2013-
042). On April 3, 2014, FINRA filed with the Commission for 
immediate effectiveness a proposed rule change to amend Rules 6160, 
6170, 6480, and 6720 to permit an ATS that trades both TRACE-
Eligible Securities and equity securities (OTC Equity Securities or 
NMS stocks) to use two MPIDs, rather than a single unique MPID, if 
each MPID is used exclusively for either TRACE-Eligible Securities 
or equity securities. See Securities Exchange Act Release No. 71911 
(April 9, 2014), 79 FR 21316 (April 15, 2014).
    \5\ See Regulatory Notice 14-07 (February 2014).
---------------------------------------------------------------------------

    At the time FINRA filed SR-FINRA-2013-042, FINRA recognized that 
``given the potential systems changes required by the MPID requirement, 
FINRA will provide additional time for firms to implement the MPID 
requirement.'' \6\ Because of the time necessary to make many of these 
systems changes, FINRA also noted in its response to comments on SR-
FINRA-2013-042 that ``FINRA believes increased transparency in the 
over-the-counter market is necessary and beneficial and can be more 
readily achieved through reporting requirements before the MPID 
requirement is implemented. Consequently, FINRA declines to eliminate 
the reporting requirement from the first phase of the Proposal but 
reaffirms its commitment to reassessing its need following 
implementation of the MPID requirement.'' \7\ The self-reporting 
requirements in Rule 4552 were implemented on May 12, 2014, and FINRA 
began publishing ATS data on June 2, 2014; consequently, the 
transparency benefits of the new self-reporting rule are already in 
place, and ATS volume information is currently available on FINRA's Web 
site.\8\
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 70676 (October 11, 
2013), 78 FR 62862, 62856 (October 22, 2013) (Notice of Filing of 
SR-FINRA-2013-042).
    \7\ Letter from Brant K. Brown, Associate General Counsel, 
FINRA, to Elizabeth Murphy, Secretary, SEC, dated January 15, 2014, 
at 7.
    \8\ FINRA has created a page on its Web site dedicated to the 
new ATS requirements, including a link to the ATS data reported 
pursuant to Rule 4552. See www.finra.org/ats.
---------------------------------------------------------------------------

    For the past several months, FINRA staff has been discussing 
implementation issues arising with the MPID requirement with various 
ATSs and industry trade groups. In large part, these issues involved 
specific, detailed scenarios ATSs must program for to report trades to 
a FINRA trade reporting facility or to report order information to 
FINRA's Order Audit Trail System (``OATS''). In response to these 
inquiries, FINRA published written guidance for ATSs on trade reporting 
and OATS reporting on September 15, 2014.\9\ As part of this guidance, 
FINRA clarified ATSs' trade reporting obligations regarding the 
appropriate indication of MPIDs in various trade reporting scenarios, 
the use of tape and non-tape reports for ATS transactions, the capacity 
of ATSs on trade reports, and the inclusion of short sale indicators on 
trade reports.
---------------------------------------------------------------------------

    \9\ See www.finra.org/Industry/Compliance/MarketTransparency/ATS/FAQ/.
---------------------------------------------------------------------------

    Members have requested that FINRA postpone the implementation date 
for the ATS MPID requirement so that members can ensure that their 
trade reports and OATS reports comply with this guidance. FINRA 
believes that it would be beneficial to postpone the implementation 
date by approximately three months to provide firms with sufficient 
time to incorporate this guidance into their coding for the MPID 
requirement. A postponement should help ensure that firms are 
consistently reporting similar information to FINRA and that FINRA's 
audit trail information is correct and reliable. FINRA believes that, 
if additional time is not provided, firms may not be ready to comply 
with the new guidance by November 10, 2014, and FINRA's audit trail 
could be less accurate as a result.
    FINRA has filed the proposed rule change for immediate 
effectiveness. The effective date and the implementation date will be 
the date of filing, October 2, 2014.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\10\ which requires, among 
other things, 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. FINRA believes postponing the implementation date of 
the ATS MPID requirement by three months will provide firms with 
sufficient time to incorporate FINRA's new trade reporting and OATS 
guidance into their coding for the MPID requirement. This additional 
time should help ensure that firms are reporting information to FINRA 
so that FINRA's audit trail information is consistent, correct, and 
reliable. FINRA believes that, if additional time is not provided, 
firms may not be ready to comply with the new guidance and FINRA's 
audit trail could be less accurate. Inconsistent reporting of ATS order 
and trade information could also adversely affect FINRA's ability to 
rely on automated surveillance patterns to detect potential misconduct.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

B. Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. FINRA believes that extending 
the implementation date of the new ATS MPID requirement will provide 
firms with needed additional time so that they can better comply with 
recently-issued FINRA guidance on an ATS's trade reporting and OATS 
obligations.

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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
---------------------------------------------------------------------------

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

    FINRA has requested that the Commission waive the 30-day operative 
delay, so that the proposed rule change would be operative on filing. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. By 
making the proposed rule change operative immediately FINRA's ATS 
members can immediately be afforded notice of the additional time 
available for compliance with the MPID requirement. Therefore, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change operative upon filing.\13\
---------------------------------------------------------------------------

    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

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

[[Page 62502]]

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-FINRA-2014-042 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.

All submissions should refer to File Number SR-FINRA-2014-042. 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 business days between the hours of 10 
a.m. and 3 p.m. Copies of such filing also will be available for 
inspection and copying at the principal office of FINRA. 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-FINRA-2014-042 and should be 
submitted on or before November 7, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-24682 Filed 10-16-14; 8:45 am]
BILLING CODE 8011-01-P
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.