Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Unify Procedures for the Handling of Resting Orders in a Security Subject to a Trading Halt, Pause or Suspension on the Exchange, 67440-67443 [2015-27792]

Download as PDF 67440 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Notices minimize the burden of collections on respondents, including the use of automated collection techniques or other forms of information technology. Comments to the RRB or OIRA must contain the OMB control number of the ICR. For proper consideration of your comments, it is best if the RRB and OIRA receive them within 30 days of the publication date. Under Section 8 of the Railroad Unemployment Insurance Act (RUIA), as amended by the Railroad Unemployment Improvement Act of 1988 (Pub. L. 100–647), the RRB determines the amount of an employer’s contribution, primarily on the basis of the RUIA benefits paid, both unemployment and sickness, to the employees of the railroad employer. These experienced-based contributions take into account the frequency, volume, and duration of the employees’ unemployment and sickness benefits. Each employer’s contribution rate includes a component for administrative expenses as well as a component to cover costs shared by all employers. The regulations prescribing the manner and conditions for remitting the contributions and for adjusting overpayments or underpayments of contributions are contained in 20 CFR 345. RRB Form DC–1, Employer’s Quarterly Report of Contributions under the Railroad Unemployment Insurance Act, is used by railroad employers to report and remit their quarterly contributions to the RRB. Employers can use either the manual version of the form or its Internet equivalent. One response is requested quarterly of each respondent and completion is mandatory. Previous Requests for Comments: The RRB has already published the initial 60-day notice (80 FR 41099 on July 14, 2015) required by 44 U.S.C. 3506(c)(2). That request elicited no comments. Information Collection Request (ICR) Title: Employer’s Quarterly Report of Contributions Under the RUIA. OMB Control Number: 3220–0012. Form(s) submitted: DC–1. Type of request: Reinstatement without change of a previously approved collection. Affected public: Private Sector: Businesses or other for-profits. Abstract: Railroad employers are required to make contributions to the Railroad Unemployment Insurance fund quarterly or annually equal to a percentage of the creditable compensation paid to each employee. The information furnished on the report accompanying the remittance is used to determine correctness of the amount paid. Changes proposed: The RRB proposes no changes to Form DC–1. THE BURDEN ESTIMATE FOR THE ICR IS AS FOLLOWS Annual responses Form No. Time (minutes) Burden (hours) DC–1 (Paper Copy) ..................................................................................................................... DC–1 (Internet) ............................................................................................................................ 1,235 1,365 25 25 515 569 Total ...................................................................................................................................... 2,600 ........................ 1,084 Additional Information or Comments: Copies of the forms and supporting documents can be obtained from Dana Hickman at (312) 751–4981 or Dana.Hickman@RRB.GOV. Comments regarding the information collection should be addressed to Charles Mierzwa, Railroad Retirement Board, 844 North Rush Street, Chicago, Illinois, 60611–2092 or Charles.Mierzwa@RRB.GOV and to the OMB Desk Officer for the RRB, Fax: 202–395–6974, Email address: OIRA_ Submission@omb.eop.gov. SECURITIES AND EXCHANGE COMMISSION I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change [Release No. 34–76262; File No. SR–CHX– 2015–05] Charles Mierzwa, Chief of Information Resources Management. 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 19, 2015, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’) 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. CHX proposes to amend CHX Rules to unify procedures for the handling of resting orders in a security subject to a trading halt, pause or suspension on the Exchange. CHX has designated this proposed rule change as noncontroversial pursuant to Section 19(b)(3)(A) 3 of the Act and Rule 19b– 4(f)(6) 4 thereunder and has provided the Commission with the notice required by Rule 19b–4(f)(6)(iii).5 The text of this proposed rule change is available on the Exchange’s Web site at (www.chx.com) and in the Commission’s Public Reference Room. [FR Doc. 2015–27826 Filed 10–30–15; 8:45 am] asabaliauskas on DSK5VPTVN1PROD with NOTICES BILLING CODE 7905–01–P Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Unify Procedures for the Handling of Resting Orders in a Security Subject to a Trading Halt, Pause or Suspension on the Exchange October 26, 2015. 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 CHX included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received on the 3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 5 17 CFR 240.19b–4(f)(6)(iii). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. VerDate Sep<11>2014 18:55 Oct 30, 2015 Jkt 238001 PO 00000 Frm 00059 Fmt 4703 4 17 Sfmt 4703 E:\FR\FM\02NON1.SGM 02NON1 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Notices proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The CHX 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 asabaliauskas on DSK5VPTVN1PROD with NOTICES The Exchange proposes to amend CHX Rules to unify procedures for the handling of resting orders in a security subject to a trading halt, pause or suspension on the Exchange.6 Specifically, the Exchange proposes to apply the current procedures for the handling of resting orders in a security subject to a Limit Up-Limit Down (‘‘LULD’’) trading pause 7 to all trading halts on the Exchange (‘‘proposed unification’’). Currently, upon initiation of any trading halt, pause or suspension in a security on the Exchange, the Exchange will take the following actions: • Stop all trading in the security; • Cancel all resting orders marked Cancel On Halt, as defined under Article 1, Rule 2(b)(1)(B); and • Reject all incoming orders; provided valid incoming Sub-second Non-displayed Auction Process Auction Only Orders (‘‘SNAP AOOs’’), as defined under Article 1, Rule 2(h)(3),8 not marked Cancel On Halt received during a trading halt on the Exchange will be placed in the SNAP AOO Queue, pursuant to Article 18, Rule 1(c)(4),9 and not cancelled.10 However, the Exchange handles resting orders in a security subject to a trading halt, pause or suspension on the Exchange differently depending on whether trading is stopped due to a LULD trading pause. In the case of a LULD trading pause, the Exchange will cancel all resting orders in the subject security, except that SNAP AOOs not marked Cancel On Halt will be placed or remain in the SNAP AOO Queue and 6 The Exchange may initiate a trading halt, pause or suspension for various reasons, including, but not limited to, technical issues with the Matching System or in response to a regulatory halt initiated by the primary listing market. 7 See CHX Article 20, Rule 2A(c). 8 CHX Article 1, Rule 2(h)(3) is effective, but not yet operative. See infra note 10. 9 CHX Article 20, Rule 8(b)(2)(A) is effective, but not yet operative. See infra note 10. 10 The proposed rule change to adopt SNAP was recently approved, but is not yet operative. See Securities Exchange Act Release No. 76087 (October 6, 2015), 80 FR 61540 (October 13, 2015). VerDate Sep<11>2014 18:55 Oct 30, 2015 Jkt 238001 not cancelled.11 However, for all other trading halts, pauses or suspensions, the Exchange will maintain the resting orders in the subject security, except that orders marked Cancel On Halt will be cancelled.12 Upon the initiation of any trading halt, pause or suspension in a security on the Exchange, the Exchange now proposes to cancel all resting orders in the security, while maintaining the current exception for SNAP AOOs not marked Cancel On Halt. To this end, the Exchange proposes various amendments to CHX Rules, as described below. Initially, as a global amendment, the Exchange proposes to replace certain references throughout CHX Rules to trading halts, suspensions and/or pauses, or some combination thereof, with the more uniform ‘‘trading halts, suspensions or pauses.’’ The Exchange believes that this consistency will promote clarity of CHX Rules. Specifically, the Exchange proposes to make such amendments to Article 1, Rule 2(b)(1)(B); Article 18, Rule 1(b)(3); Article 20, Rule 1(b) and (d); 13 and paragraph .02 of Article 20, Rule 1. Amended paragraph .02 of Article 20, Rule 1 Current paragraph .02 of Article 20, Rule 1 provides as follows: If trading in one or more issues is suspended or halted, which requires the Exchange to suspend trading in the issue, other than a LULD Trading Pause, all orders in those issues shall remain in the Matching System unless they are cancelled by the Participant that submitted the order. The Matching System shall not accept any orders, or any changes to orders (other than cancellations), in those issues during a trading suspension or halt, subject to Article 18, Rule 1(c). Immediately after the trading halt or suspension has ended, the Matching System shall begin accepting orders and shall match them as provided in Rule 8(d), below. The Exchange now proposes to amend paragraph. 02 to contemplate the proposed unification. The Exchange also proposes to clarify that ‘‘resting’’ 11 See CHX Article 20, Rule 2A(c); see also CHX Article 18, Rule 1(c) (which is effective, but not yet operative); see also supra note 10. 12 See paragraph .02 of CHX Article 20, Rule 1. 13 Incidentally, the Exchange proposes to amend CHX Article 20, Rule 1(b) to replace reference to ‘‘Rules 1(d) and (2)’’ with ‘‘CHX Rules’’ generally, as trading halts, pauses or suspensions may be effected on the Exchange pursuant to various CHX Rules, including, but not limited to, Article 20, Rules 1(d) and (2). Similarly, the Exchange proposes to amend CHX Article 20, Rule 1(d) to provide that trading may also be halted, paused or suspended on the Exchange, and resumed thereafter, pursuant to other CHX Rules. Specifically, trading halts, pauses or suspensions may be declared and lifted pursuant to the following CHX Rules: Article 20, Rules 1(d), 2, 2A and 10; and Article 22, Rule 6. PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 67441 orders shall be cancelled and that the amended rule applies to trading halts, pauses and suspensions ‘‘on the Exchange,’’ which obviates current language providing that the rule applies to trading halts that require the Exchange to suspend trading in the issue. As such, amended paragraph .02 provides as follows: If trading in one or more issues is halted, paused or suspended on the Exchange, all resting orders in those issues shall be cancelled from the Matching System, subject to Article 18, Rule 1(c). The Matching System shall not accept any orders in those issues during a trading halt, pause or suspension, subject to Article 18, Rule 1(c). Immediately after the trading halt, pause or suspension has ended, the Matching System shall begin accepting orders and shall match them as provided in Rule 8(d), below. Amended Article 1, Rule 2(b)(1)(B) (Cancel On Halt) Current Article 1, Rule 2(b)(1)(B) defines ‘‘Cancel On Halt’’ as follows: A limit order modifier that requires an order to be automatically cancelled by the Matching System if a trading halt or suspension is declared in that security. The Exchange now proposes to amend the definition to clarify that orders marked Cancel On Halt will be cancelled if a trading halt, pause or suspension is declared in the security ‘‘on the Exchange,’’ as certain operational halts declared by away markets may not require the Exchange to suspend trading in the security. Moreover, since the Exchange proposes to cancel all resting orders, except for SNAP AOOs, during a trading halt, pause or suspension, the Exchange proposes to adopt additional language that provides that all limit orders, except for SNAP AOOs, as defined under Article 1, Rule 2(h)(3), shall be deemed to have been received Cancel On Halt, which cannot be overridden by an order sender. The Exchange submits that this is appropriate because the current rules require SNAP AOOs to be placed in, or remain on, the SNAP AOO Queue during a trading halt, pause or suspension and, thus, such queued SNAP AOOs would already be inactive and removed from the SNAP CHX book, without the need for cancellations.14 As such, amended Rule 2(b)(1)(B) provides as follows: ‘‘Cancel On Halt’’: a limit order modifier that requires an order to be automatically cancelled by the Matching System if a trading halt, pause or suspension is declared in that security by the Exchange. 14 See CHX Article 18, Rule 1(c)(2) (which is effective, but not yet operative); see also supra note 10. E:\FR\FM\02NON1.SGM 02NON1 67442 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Notices All limit orders, except for SNAP AOOs, as defined under paragraph (h)(3), shall be deemed to have been received Cancel On Halt, which cannot be overridden by an order sender. Amended Article 18, Rule 1(c) (Halt or Pause During the SNAP Cycle) Current Article 18, Rule 1(c)(1) details the actions that would be taken if a trading halt is initiated on the Exchange during a SNAP Cycle.15 With respect to the handling of orders resting on the SNAP CHX book, current Rule 1(c)(1) substantively tracks current paragraphs .02 of Article 20, Rule 1 for trading halts, pauses and suspensions that are not LULD trading pauses and Article 20, Rule 2A(c) for LULD trading pauses.16 The Exchange now proposes to amend Rule 1(c)(1) to eliminate that distinction. As such, amended Rule 1(c)(1) provides as follows: asabaliauskas on DSK5VPTVN1PROD with NOTICES SNAP CHX book (A) During stages one or two. If the market snapshot taken pursuant to paragraph (b)(2)(E) or (F) indicates that a material halt, pause or suspension is in effect, the SNAP Cycle shall be aborted and not proceed to stage three or stage five, as applicable. The Exchange shall then cancel all orders resting on the SNAP CHX book, subject to paragraph (c)(2) below. (B) During stages three or four. If the market snapshot taken pursuant to paragraph (b)(3)(B) or (b)(4)(B) indicates that a material halt, pause or suspension is in effect for the subject security, the SNAP Cycle shall be aborted and not proceed to stage five. The Exchange shall then cancel the unexecuted remainders of all orders resting on the SNAP CHX book, subject to paragraph (c)(2) below. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act 17 in that it would further enable the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its Participants and persons associated with its Participants, with the provisions of the Act, the rules and regulations thereunder, and the rules of the Exchange, in furtherance of the objectives of Section 6(b)(1),18 and it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transaction in securities, to remove impediments to, and perfect the mechanisms of, a free and open market 15 See CHX Article 18, Rule 1(b) (which is effective, but not yet operative); see also supra note 10. 16 See supra note 10. 17 15 U.S.C. 78f(b). 18 15 U.S.C. 78f(b)(1). VerDate Sep<11>2014 18:55 Oct 30, 2015 Jkt 238001 and, in general, by protecting investors and the public interest, in furtherance of the objectives of Section 6(b)(5).19 Specifically, the Exchange believes that the proposed unification of the Exchange’s procedures regarding resting orders in a security subject to a trading halt, pause or suspension on the Exchange will simplify the Exchange’s operational procedures, which will remove impediments to, and perfect the mechanisms of, a free and open market, in furtherance of the objectives of Section 6(b)(5). Moreover, the Exchange believes that the proposed unification and other clarifying amendments, will simplify CHX Rules, which will further enable the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its Participants and persons associated with its Participants, with the provisions of the Act, the rules and regulations thereunder, and the rules of the Exchange, in furtherance of the objectives of Section 6(b)(1). B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. To the contrary, the Exchange believes that the proposed rule change does not implicate any competitive issues as it is intended to simplify and clarify CHX operational procedures with respect to trading halts, pauses and suspensions. 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 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 20 and Rule 19b–4(f)(6) thereunder.21 19 15 U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A). 21 17 CFR 240.19b–4(f)(6). As required under Rule 19b–4(f)(6)(iii), CHX provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text 20 15 PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 The Exchange has requested that the Commission waive the requirement that the rule change, by its terms, not become operative for 30 days after the date of the filing as set forth in Rule 19b–4(f)(6)(iii),22 so that the proposal may become immediately operative upon filing. The Exchange anticipates its recently approved SNAP functionality will become operative during the thirty day pre-operative waiting period for this filing.23 The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest because it eliminates a source of potential for confusion regarding the Exchange’s rules governing SNAPrelated trading halt, pause and suspension procedures. Therefore, the Commission hereby waives the thirtyday operative delay and designates the proposal effective upon filing.24 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. 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 NumberSR– CHX–2015–05 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. 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. 22 17 CFR 240.19b–4(f)(6)(iii). 23 See supra note 10. 24 For purposes 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). E:\FR\FM\02NON1.SGM 02NON1 Federal Register / Vol. 80, No. 211 / Monday, November 2, 2015 / Notices All submissions should refer to File Number SR–CHX–2015–05. 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 20549–1090. Copies of the filing will also be available for inspection and copying at the Exchange’s principal office. 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–CHX–2015–05 and should be submitted on or before November 23, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Robert W. Errett, Deputy Secretary. [FR Doc. 2015–27792 Filed 10–30–15; 8:45 am] BILLING CODE 8011–01–P 16, 2015, 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 delete Rule 410B governing reporting requirements for off-Exchange transactions. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose SECURITIES AND EXCHANGE COMMISSION [Release No. 34–76277; File No. SR–NYSE– 2015–48] asabaliauskas on DSK5VPTVN1PROD with NOTICES Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Deleting Rule 410B Governing Reporting Requirements for OffExchange Transactions Background Rule 410B October 27, 2015. 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 October 25 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 18:55 Oct 30, 2015 Jkt 238001 The Exchange proposes to delete Rule 410B, which sets forth certain regulatory reporting requirements for member or member organizations effecting offExchange transactions in Exchange listed securities that are not reported to the Consolidated Tape, and to make conforming amendments to Rule 9217 to delete a reference to Rule 410B. Currently, Rule 410B requires members or member organizations to report to the Exchange transactions in NYSE-listed securities effected for the account of a member or member organization, or for the account of a customer of a member or member organization, that are not reported to the Consolidated Tape. Reports prepared PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 67443 pursuant to the Rule must contain the following information: • Time and date of the transaction; • stock symbol of the listed security; • number of shares; • price; • marketplace where the transaction was executed; • an indication whether the transaction was a buy (B), sell (S) or cross (C); • an indication whether the transaction was executed as principal or agent; and • the name of the contra-side brokerdealer to the trade.4 Rule 410B was adopted in 1992. At the time, transactions in NYSE-listed stocks effected outside of business hours or in foreign markets were not reported to the Consolidated Tape and, with the exception of program trading information, were not reported to the Exchange. The Exchange (then the New York Stock Exchange, Inc.) believed that ‘‘all transactions in NYSE-listed stocks that are not reported to the Consolidated Tape should be reported to the Exchange in order to provide an accurate record of overall trading activity in NYSE-listed stocks.’’ 5 The Rule 410B reporting requirement would thus ‘‘augment and enhance’’ the Exchange’s ability to ‘‘surveil for and investigate, among other matters, insider trading, frontrunning and manipulative activities’’ and ‘‘provide a more complete audit trail and depiction of member trading in each NYSE-listed stock, which should facilitate surveillance by the Exchange in NYSElisted stocks.’’ 6 Despite the significant changes to the marketplace and the regulatory landscape in the ensuing decades, Rule 410B has not been substantively amended since it was adopted.7 Changes to Regulatory Landscape On July 30, 2007, the NASD, NYSE, and NYSE Regulation, Inc. (‘‘NYSE Regulation’’) consolidated their member firm regulation operations to create the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’), and entered into a plan to allocate to FINRA regulatory responsibility for common rules and common members (‘‘17d–2 4 See Rule 410B. Securities Exchange Act Release No. 31358 (October 26, 1992), 57 FR 1294 (January 6, 1992) (SR–NYSE–91–45) (‘‘Rule 410B Approval Order’’). 6 See id., 57 FR at 1294. 7 Rule 410B was amended in 2007 in connection with a filing updating the definition of program trading in Rule 80A.40(b) to make conforming changes to the rule. See Securities Exchange Act Release No. 55793 (May 22, 2007), 72 FR 29567 (May 29, 2007) (SR–NYSE–2007–34). 5 See E:\FR\FM\02NON1.SGM 02NON1

Agencies

[Federal Register Volume 80, Number 211 (Monday, November 2, 2015)]
[Notices]
[Pages 67440-67443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-27792]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76262; File No. SR-CHX-2015-05]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Unify Procedures for the Handling of Resting Orders in a Security 
Subject to a Trading Halt, Pause or Suspension on the Exchange

October 26, 2015.
    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 19, 2015, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') 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 
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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CHX proposes to amend CHX Rules to unify procedures for the 
handling of resting orders in a security subject to a trading halt, 
pause or suspension on the Exchange. CHX has designated this proposed 
rule change as non-controversial pursuant to Section 19(b)(3)(A) \3\ of 
the Act and Rule 19b-4(f)(6) \4\ thereunder and has provided the 
Commission with the notice required by Rule 19b-4(f)(6)(iii).\5\ The 
text of this proposed rule change is available on the Exchange's Web 
site at (www.chx.com) and in the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ 17 CFR 240.19b-4(f)(6)(iii).
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II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the CHX included statements 
concerning the purpose of and basis for the proposed rule changes and 
discussed any comments it received on the

[[Page 67441]]

proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The CHX 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
    The Exchange proposes to amend CHX Rules to unify procedures for 
the handling of resting orders in a security subject to a trading halt, 
pause or suspension on the Exchange.\6\ Specifically, the Exchange 
proposes to apply the current procedures for the handling of resting 
orders in a security subject to a Limit Up-Limit Down (``LULD'') 
trading pause \7\ to all trading halts on the Exchange (``proposed 
unification'').
---------------------------------------------------------------------------

    \6\ The Exchange may initiate a trading halt, pause or 
suspension for various reasons, including, but not limited to, 
technical issues with the Matching System or in response to a 
regulatory halt initiated by the primary listing market.
    \7\ See CHX Article 20, Rule 2A(c).
---------------------------------------------------------------------------

    Currently, upon initiation of any trading halt, pause or suspension 
in a security on the Exchange, the Exchange will take the following 
actions:
     Stop all trading in the security;
     Cancel all resting orders marked Cancel On Halt, as 
defined under Article 1, Rule 2(b)(1)(B); and
     Reject all incoming orders; provided valid incoming Sub-
second Non-displayed Auction Process Auction Only Orders (``SNAP 
AOOs''), as defined under Article 1, Rule 2(h)(3),\8\ not marked Cancel 
On Halt received during a trading halt on the Exchange will be placed 
in the SNAP AOO Queue, pursuant to Article 18, Rule 1(c)(4),\9\ and not 
cancelled.\10\
---------------------------------------------------------------------------

    \8\ CHX Article 1, Rule 2(h)(3) is effective, but not yet 
operative. See infra note 10.
    \9\ CHX Article 20, Rule 8(b)(2)(A) is effective, but not yet 
operative. See infra note 10.
    \10\ The proposed rule change to adopt SNAP was recently 
approved, but is not yet operative. See Securities Exchange Act 
Release No. 76087 (October 6, 2015), 80 FR 61540 (October 13, 2015).
---------------------------------------------------------------------------

    However, the Exchange handles resting orders in a security subject 
to a trading halt, pause or suspension on the Exchange differently 
depending on whether trading is stopped due to a LULD trading pause. In 
the case of a LULD trading pause, the Exchange will cancel all resting 
orders in the subject security, except that SNAP AOOs not marked Cancel 
On Halt will be placed or remain in the SNAP AOO Queue and not 
cancelled.\11\ However, for all other trading halts, pauses or 
suspensions, the Exchange will maintain the resting orders in the 
subject security, except that orders marked Cancel On Halt will be 
cancelled.\12\
---------------------------------------------------------------------------

    \11\ See CHX Article 20, Rule 2A(c); see also CHX Article 18, 
Rule 1(c) (which is effective, but not yet operative); see also 
supra note 10.
    \12\ See paragraph .02 of CHX Article 20, Rule 1.
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    Upon the initiation of any trading halt, pause or suspension in a 
security on the Exchange, the Exchange now proposes to cancel all 
resting orders in the security, while maintaining the current exception 
for SNAP AOOs not marked Cancel On Halt. To this end, the Exchange 
proposes various amendments to CHX Rules, as described below.
    Initially, as a global amendment, the Exchange proposes to replace 
certain references throughout CHX Rules to trading halts, suspensions 
and/or pauses, or some combination thereof, with the more uniform 
``trading halts, suspensions or pauses.'' The Exchange believes that 
this consistency will promote clarity of CHX Rules. Specifically, the 
Exchange proposes to make such amendments to Article 1, Rule 
2(b)(1)(B); Article 18, Rule 1(b)(3); Article 20, Rule 1(b) and (d); 
\13\ and paragraph .02 of Article 20, Rule 1.
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    \13\ Incidentally, the Exchange proposes to amend CHX Article 
20, Rule 1(b) to replace reference to ``Rules 1(d) and (2)'' with 
``CHX Rules'' generally, as trading halts, pauses or suspensions may 
be effected on the Exchange pursuant to various CHX Rules, 
including, but not limited to, Article 20, Rules 1(d) and (2). 
Similarly, the Exchange proposes to amend CHX Article 20, Rule 1(d) 
to provide that trading may also be halted, paused or suspended on 
the Exchange, and resumed thereafter, pursuant to other CHX Rules. 
Specifically, trading halts, pauses or suspensions may be declared 
and lifted pursuant to the following CHX Rules: Article 20, Rules 
1(d), 2, 2A and 10; and Article 22, Rule 6.
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Amended paragraph .02 of Article 20, Rule 1
    Current paragraph .02 of Article 20, Rule 1 provides as follows:

    If trading in one or more issues is suspended or halted, which 
requires the Exchange to suspend trading in the issue, other than a 
LULD Trading Pause, all orders in those issues shall remain in the 
Matching System unless they are cancelled by the Participant that 
submitted the order. The Matching System shall not accept any 
orders, or any changes to orders (other than cancellations), in 
those issues during a trading suspension or halt, subject to Article 
18, Rule 1(c). Immediately after the trading halt or suspension has 
ended, the Matching System shall begin accepting orders and shall 
match them as provided in Rule 8(d), below.

    The Exchange now proposes to amend paragraph. 02 to contemplate the 
proposed unification. The Exchange also proposes to clarify that 
``resting'' orders shall be cancelled and that the amended rule applies 
to trading halts, pauses and suspensions ``on the Exchange,'' which 
obviates current language providing that the rule applies to trading 
halts that require the Exchange to suspend trading in the issue. As 
such, amended paragraph .02 provides as follows:

    If trading in one or more issues is halted, paused or suspended 
on the Exchange, all resting orders in those issues shall be 
cancelled from the Matching System, subject to Article 18, Rule 
1(c). The Matching System shall not accept any orders in those 
issues during a trading halt, pause or suspension, subject to 
Article 18, Rule 1(c). Immediately after the trading halt, pause or 
suspension has ended, the Matching System shall begin accepting 
orders and shall match them as provided in Rule 8(d), below.
Amended Article 1, Rule 2(b)(1)(B) (Cancel On Halt)
    Current Article 1, Rule 2(b)(1)(B) defines ``Cancel On Halt'' as 
follows:

    A limit order modifier that requires an order to be 
automatically cancelled by the Matching System if a trading halt or 
suspension is declared in that security.

    The Exchange now proposes to amend the definition to clarify that 
orders marked Cancel On Halt will be cancelled if a trading halt, pause 
or suspension is declared in the security ``on the Exchange,'' as 
certain operational halts declared by away markets may not require the 
Exchange to suspend trading in the security. Moreover, since the 
Exchange proposes to cancel all resting orders, except for SNAP AOOs, 
during a trading halt, pause or suspension, the Exchange proposes to 
adopt additional language that provides that all limit orders, except 
for SNAP AOOs, as defined under Article 1, Rule 2(h)(3), shall be 
deemed to have been received Cancel On Halt, which cannot be overridden 
by an order sender. The Exchange submits that this is appropriate 
because the current rules require SNAP AOOs to be placed in, or remain 
on, the SNAP AOO Queue during a trading halt, pause or suspension and, 
thus, such queued SNAP AOOs would already be inactive and removed from 
the SNAP CHX book, without the need for cancellations.\14\ As such, 
amended Rule 2(b)(1)(B) provides as follows:
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    \14\ See CHX Article 18, Rule 1(c)(2) (which is effective, but 
not yet operative); see also supra note 10.

    ``Cancel On Halt'': a limit order modifier that requires an 
order to be automatically cancelled by the Matching System if a 
trading halt, pause or suspension is declared in that security by 
the Exchange.

[[Page 67442]]

    All limit orders, except for SNAP AOOs, as defined under 
paragraph (h)(3), shall be deemed to have been received Cancel On 
Halt, which cannot be overridden by an order sender.
Amended Article 18, Rule 1(c) (Halt or Pause During the SNAP Cycle)
    Current Article 18, Rule 1(c)(1) details the actions that would be 
taken if a trading halt is initiated on the Exchange during a SNAP 
Cycle.\15\ With respect to the handling of orders resting on the SNAP 
CHX book, current Rule 1(c)(1) substantively tracks current paragraphs 
.02 of Article 20, Rule 1 for trading halts, pauses and suspensions 
that are not LULD trading pauses and Article 20, Rule 2A(c) for LULD 
trading pauses.\16\ The Exchange now proposes to amend Rule 1(c)(1) to 
eliminate that distinction. As such, amended Rule 1(c)(1) provides as 
follows:
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    \15\ See CHX Article 18, Rule 1(b) (which is effective, but not 
yet operative); see also supra note 10.
    \16\ See supra note 10.

    SNAP CHX book
    (A) During stages one or two. If the market snapshot taken 
pursuant to paragraph (b)(2)(E) or (F) indicates that a material 
halt, pause or suspension is in effect, the SNAP Cycle shall be 
aborted and not proceed to stage three or stage five, as applicable. 
The Exchange shall then cancel all orders resting on the SNAP CHX 
book, subject to paragraph (c)(2) below.
    (B) During stages three or four. If the market snapshot taken 
pursuant to paragraph (b)(3)(B) or (b)(4)(B) indicates that a 
material halt, pause or suspension is in effect for the subject 
security, the SNAP Cycle shall be aborted and not proceed to stage 
five. The Exchange shall then cancel the unexecuted remainders of 
all orders resting on the SNAP CHX book, subject to paragraph (c)(2) 
below.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \17\ in that it would further enable the 
Exchange to be so organized as to have the capacity to be able to carry 
out the purposes of the Act and to comply, and to enforce compliance by 
its Participants and persons associated with its Participants, with the 
provisions of the Act, the rules and regulations thereunder, and the 
rules of the Exchange, in furtherance of the objectives of Section 
6(b)(1),\18\ and it is designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
to foster cooperation and coordination with persons engaged in 
facilitating transaction in securities, to remove impediments to, and 
perfect the mechanisms of, a free and open market and, in general, by 
protecting investors and the public interest, in furtherance of the 
objectives of Section 6(b)(5).\19\
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(1).
    \19\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Specifically, the Exchange believes that the proposed unification 
of the Exchange's procedures regarding resting orders in a security 
subject to a trading halt, pause or suspension on the Exchange will 
simplify the Exchange's operational procedures, which will remove 
impediments to, and perfect the mechanisms of, a free and open market, 
in furtherance of the objectives of Section 6(b)(5). Moreover, the 
Exchange believes that the proposed unification and other clarifying 
amendments, will simplify CHX Rules, which will further enable the 
Exchange to be so organized as to have the capacity to be able to carry 
out the purposes of the Act and to comply, and to enforce compliance by 
its Participants and persons associated with its Participants, with the 
provisions of the Act, the rules and regulations thereunder, and the 
rules of the Exchange, in furtherance of the objectives of Section 
6(b)(1).

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. To the contrary, the 
Exchange believes that the proposed rule change does not implicate any 
competitive issues as it is intended to simplify and clarify CHX 
operational procedures with respect to trading halts, pauses and 
suspensions.

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

    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 \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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    \20\ 15 U.S.C. 78s(b)(3)(A).
    \21\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), CHX provided the Commission with written notice of its 
intent to file the proposed rule change, along with a brief 
description and the 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.
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    The Exchange has requested that the Commission waive the 
requirement that the rule change, by its terms, not become operative 
for 30 days after the date of the filing as set forth in Rule 19b-
4(f)(6)(iii),\22\ so that the proposal may become immediately operative 
upon filing. The Exchange anticipates its recently approved SNAP 
functionality will become operative during the thirty day pre-operative 
waiting period for this filing.\23\ The Commission believes that waiver 
of the operative delay is consistent with the protection of investors 
and the public interest because it eliminates a source of potential for 
confusion regarding the Exchange's rules governing SNAP-related trading 
halt, pause and suspension procedures. Therefore, the Commission hereby 
waives the thirty-day operative delay and designates the proposal 
effective upon filing.\24\
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    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ See supra note 10.
    \24\ For purposes 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.

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 NumberSR-CHX-2015-05 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.


[[Page 67443]]


All submissions should refer to File Number SR-CHX-2015-05. 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 20549-1090. Copies of the filing will also be available 
for inspection and copying at the Exchange's principal office. 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-CHX-2015-05 and should be 
submitted on or before November 23, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
Robert W. Errett,
Deputy Secretary.
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    \25\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2015-27792 Filed 10-30-15; 8:45 am]
 BILLING CODE 8011-01-P
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