Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Extend the Tier Size Pilot of FINRA Rule 6433 (Minimum Quotation Size Requirements for OTC Equity Securities), 75155-75157 [2015-30413]
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Federal Register / Vol. 80, No. 230 / Tuesday, December 1, 2015 / Notices
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such 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
under Section 19(b)(2)(B) 34 of the Act to
determine whether the proposed rule
change 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:
tkelley on DSK3SPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEMKT–2015–95 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2015–95. 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
34 15
U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
23:35 Nov 30, 2015
Jkt 238001
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
offices 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–
NYSEMKT–2015–95, and should be
submitted on or before December 22,
2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.35
Brent J. Fields,
Secretary.
[FR Doc. 2015–30480 Filed 11–30–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76519; File No. SR–FINRA–
2015–051]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend the Tier Size
Pilot of FINRA Rule 6433 (Minimum
Quotation Size Requirements for OTC
Equity Securities)
November 24, 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 November
23, 2015, 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to amend FINRA
Rule 6433 (Minimum Quotation Size
35 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 00113
Fmt 4703
Sfmt 4703
75155
Requirements for OTC Equity
Securities) to extend the Tier Size Pilot,
which currently is scheduled to expire
on December 11, 2015, until June 10,
2016.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA, on the Commission’s
Web site at https://www.sec.gov, 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,
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, the Proposed Rule
Change
1. Purpose
FINRA proposes to amend FINRA
Rule 6433 (Minimum Quotation Size
Requirements for OTC Equity
Securities) (the ‘‘Rule’’) to extend, until
June 10, 2016, the amendments set forth
in File No. SR–FINRA–2011–058 (‘‘Tier
Size Pilot’’ or ‘‘Pilot’’), which currently
are scheduled to expire on December 11,
2015.4
The Tier Size Pilot was filed with the
SEC on October 6, 2011,5 to amend the
minimum quotation sizes (or ‘‘tier
sizes’’) for OTC Equity Securities.6 The
goals of the Pilot were to simplify the
tier structure, facilitate the display of
customer limit orders, and expand the
scope of the Rule to apply to additional
quoting participants. During the course
of the pilot, FINRA collected and
provided to the SEC specified data with
4 See Securities Exchange Act Release No. 75639
(August 7, 2015), 80 FR 48615 (August 13, 2015)
(Notice of Filing and Immediate Effectiveness of
File No. SR–FINRA–2015–028); see also Securities
Exchange Act Release No. 67208 (June 15, 2012), 77
FR 37458 (June 21, 2012) (Order Approving File No.
SR–FINRA–2011–058, as amended).
5 See Securities Exchange Act Release No. 65568
(October 14, 2011), 76 FR 65307 (October 20, 2011)
(Notice of Filing of File No. SR–FINRA–2011–058).
6 ‘‘OTC Equity Security’’ means any equity
security that is not an ‘‘NMS stock’’ as that term is
defined in Rule 600(b)(47) of SEC Regulation NMS;
provided, however, that the term OTC Equity
Security shall not include any Restricted Equity
Security. See FINRA Rule 6420.
E:\FR\FM\01DEN1.SGM
01DEN1
75156
Federal Register / Vol. 80, No. 230 / Tuesday, December 1, 2015 / Notices
which to assess the impact of the Pilot
tiers on market quality and limit order
display.7 On September 13, 2013,
FINRA provided to the Commission an
assessment on the operation of the Tier
Size Pilot utilizing data covering the
period from November 12, 2012 through
June 30, 2013.8 As noted in the 2013
Assessment, FINRA believed that the
analysis of the data generally showed
that the Tier Size Pilot had a neutral to
positive impact on OTC market quality
for the majority of OTC Equity
Securities and tiers; and that there was
an overall increase of 13% in the
number of customer limit orders that
met the minimum quotation sizes to be
eligible for display under the Pilot tiers.
In the 2013 Assessment, FINRA
recommended adopting the tiers as
permanent, but extended the pilot
period to allow more time to gather and
analyze data after the November 12,
2012 through June 30, 2013 assessment
period.9 On January 29, 2015, FINRA
further extended the Pilot period to
permit FINRA and the Commission to
consider the implications of the data
collected since June 30, 2013.10 FINRA
has reviewed this post-June 30, 2013
data, and believes that the impact
described in the 2013 Assessment has
continued to hold (and has improved in
certain areas).
The purpose of this filing is to extend
the operation of the Tier Size Pilot until
June 10, 2016, to provide FINRA with
additional time to finalize its
recommendation with regard to the Tier
Size Pilot.
FINRA has filed the proposed rule
change for immediate effectiveness. The
operative date of the proposed rule
change will be December 11, 2015.
tkelley on DSK3SPTVN1PROD with NOTICES
2. Statutory Basis
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,11 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
7 FINRA ceased collecting Pilot data for
submission to the Commission on February 13,
2015.
8 The assessment is part of the SEC’s comment file
for SR–FINRA–2011–058 and also is available on
FINRA’s Web site at: https://www.finra.org/Industry/
Regulation/RuleFilings/2011/P124615 (‘‘Pilot
Assessment’’).
9 See Securities Exchange Act Release No. 70839
(November 8, 2013), 78 FR 68893 (November 15,
2013) (Notice of Filing and Immediate Effectiveness
of File No. SR–FINRA–2013–049).
10 See Securities Exchange Act Release No. 74251
(February 11, 2015), 80 FR 8741 (February 18, 2015)
(Notice of Filing and Immediate Effectiveness of
File No. SR–FINRA–2015–002).
11 15 U.S.C. 78o–3(b)(6).
VerDate Sep<11>2014
23:35 Nov 30, 2015
Jkt 238001
general, to protect investors and the
public interest. FINRA also believes that
the proposed rule change is consistent
with the provisions of Section
15A(b)(11) of the Act.12 Section
15A(b)(11) requires that FINRA rules
include provisions governing the form
and content of quotations relating to
securities sold otherwise than on a
national securities exchange which may
be distributed or published by any
member or person associated with a
member, and the persons to whom such
quotations may be supplied.
FINRA believes that the extension of
the Tier Size Pilot until June 10, 2016,
is consistent with the Act in that it
would provide the Commission and
FINRA with additional time to
determine whether the pilot tiers should
be made permanent.
B. Self-Regulatory 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.
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 13 and Rule 19b–
4(f)(6) thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative prior to 30 days after
the date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii),16 the Commission
may designate a shorter time if such
12 15
U.S.C. 78o–3(b)(11).
U.S.C. 78s(b)(3)(A).
14 17 CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange 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.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
13 15
PO 00000
Frm 00114
Fmt 4703
Sfmt 4703
action is consistent with the protection
of investors and the public interest.
FINRA has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing. The
Commission believes that waiver of the
operative delay is consistent with the
protection of investors and the public
interest because such waiver will allow
the pilot program to continue without
interruption. Therefore, the Commission
designates the proposal operative upon
filing.17
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 Number SR–
FINRA–2015–051 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–FINRA–2015–051. 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
17 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).
E:\FR\FM\01DEN1.SGM
01DEN1
Federal Register / Vol. 80, No. 230 / Tuesday, December 1, 2015 / Notices
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of 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
publicly available. All submissions
should refer to File Number SR–FINRA–
2015–051 and should be submitted on
or before December 22, 2015.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Robert W. Errett,
Deputy Secretary.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2015–30413 Filed 11–30–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76520; File No. SR–BX–
2015–071]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Establish
Fees and Rebates Related to BX Price
Improvement Auction (PRISM)
tkelley on DSK3SPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 thereunder,2
notice is hereby given that on November
12, 2015, NASDAQ OMX BX, Inc. (‘‘BX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, 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.
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
23:35 Nov 30, 2015
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
November 24, 2015.
VerDate Sep<11>2014
The Exchange proposes to amend its
Options Pricing at Chapter XV, Section
2, entitled ‘‘BX Options Market—Fees
and Rebates,’’ which governs pricing for
BX members using the BX Options
Market (‘‘BX Options’’). The Exchange
proposes to adopt new subsection (5) to
add fees and rebates for BX Price
Improvement Auction (‘‘PRISM’’),
which is a mechanism for price
improvement on BX Options (‘‘Price
Improvement Mechanism’’).
While the changes proposed herein
are effective upon filing, the Exchange
has designated that the amendments be
operative on November 16, 2015.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://nasdaqomxbx.cchwallstreet
.com/, at the principal office of the
Exchange, and at the Commission’s
Public Reference Room.
Jkt 238001
The Exchange proposes to amend its
Chapter XV, Section 2 to adopt new
subsection (5) to add fees and rebates for
PRISM.
Effective on or about November 16,
2015, BX Options is introducing PRISM,
which is codified in BX Chapter VI,
Section 9 (also known as the ‘‘PRISM
Rule’’).3 PRISM is a Price Improvement
3 See Securities Exchange Act Release Nos. 76301
(October 29, 2015), 80 FR 68347 (November 4, 2015)
(SR–BX–2015–032) (approval order) (‘‘PRISM
Approval’’); and 75827 (September 3, 2015), 80 FR
54601 (September 10, 2015) (SR–BX–2015–032)
(‘‘PRISM Filing’’). In the PRISM Approval the
Exchange noted that it will file a rule change
separately with the Commission to remove Price
Improving and Post-Only Order types from its
Rules. The Exchange will not commence offering
BX PRISM until such time as it has an effective and
operative rule in place from the Commission to
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Sfmt 4703
75157
Mechanism for all-electronic BX
Options whereby a buy and sell order
may be submitted in one order message
to initiate an auction at a ‘stop price’
and seek potential price improvement.
Options are traded electronically on BX
Options, and all options participants
may respond to a PRISM Auction,4 the
duration of which will be set at 200
milliseconds.5 PRISM includes automatch functionality in which a
Participant (an ‘‘Initiating Participant’’)
may electronically submit for execution
an order it represents as agent on behalf
of a Public Customer,6 Professional
customer, broker dealer, or any other
entity (‘‘PRISM Order’’) against
principal interest or against any other
order it represents as agent (an
‘‘Initiating Order’’) provided it submits
the PRISM Order for electronic
execution into the PRISM Auction
pursuant to Chapter VI, Section 9.7 The
PRISM Rule describes the circumstances
under which an Initiating Participant
may initiate an Auction. A PRISM Order
that is for a Non-Customer (account of
a broker-dealer or any other person or
entity that is not a Public Customer) is
always required to improve the same
side of the BX BBO even if there is no
resting limit order on the book. PRISM
Orders that do not comply with the
remove Price Improving and Post-Only Orders and
removes the ability to submit Price Improving and
Post-Only Orders into the auction. In the event the
Exchange determines to amend its order types to
allow the entry of non-displayed order types, e.g.
Price Improving or Post-Only Orders, the Exchange
will file a proposed rule change pursuant to Section
19(b)(2) with the Commission to seek approval for
such rule change. See also Options Technical
Update #2015–6.
4 PRISM Auction eligibility requirements and the
early conclusion of the PRISM Auction are, with
certain other PRISM features, subject to a pilot
program scheduled to expire July 18, 2016. See BX
Chapter VI, Section 9.
5 Other exchanges that have price improvement
auctions have developed different durations. See,
e.g., CBOE Rule 6.74A(b)(1)(C) (CBOE’s AIM
auction has a duration of one second); and BOX
Rule 7150(f)(1) (BOX’s PIP auction has a duration
of one hundred milliseconds, commencing on the
dissemination of the PIP broadcast).
6 For purposes of the PRISM Rule in Chapter XV,
Section 2, a Public Customer order does not include
a Professional order, and therefore a Professional
would not be entitled to Public Customer priority
as described herein. A Public Customer means a
person that is not a broker or dealer in securities.
See BX Options Rules at Chapter I, Section 1(a)(50).
A Public Customer order does not include a
Professional order for purposes of BX Rule at
Chapter VI, Section 10(a)(C)(1)(a), which governs
allocation priority. A ‘‘Professional’’ means any
person or entity that (i) is not a broker or dealer in
securities, and (ii) places more than 390 orders in
listed options per day on average during a calendar
month for its own beneficial account(s). A
Participant or a Public Customer may, without
limitation, be a Professional. All Professional orders
shall be appropriately marked by Participants. See
BX Rules at Chapter I, Section 1(a)(49).
7 BX PRISM will only conduct an auction for
simple (non-complex) Orders.
E:\FR\FM\01DEN1.SGM
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]]>Agencies
[Federal Register Volume 80, Number 230 (Tuesday, December 1, 2015)]
[Notices]
[Pages 75155-75157]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-30413]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76519; File No. SR-FINRA-2015-051]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Extend the Tier Size Pilot of FINRA Rule 6433
(Minimum Quotation Size Requirements for OTC Equity Securities)
November 24, 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 November 23, 2015, 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 amend FINRA Rule 6433 (Minimum Quotation Size
Requirements for OTC Equity Securities) to extend the Tier Size Pilot,
which currently is scheduled to expire on December 11, 2015, until June
10, 2016.
The text of the proposed rule change is available on FINRA's Web
site at https://www.finra.org, at the principal office of FINRA, on the
Commission's Web site at https://www.sec.gov, 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, 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, the Proposed Rule Change
1. Purpose
FINRA proposes to amend FINRA Rule 6433 (Minimum Quotation Size
Requirements for OTC Equity Securities) (the ``Rule'') to extend, until
June 10, 2016, the amendments set forth in File No. SR-FINRA-2011-058
(``Tier Size Pilot'' or ``Pilot''), which currently are scheduled to
expire on December 11, 2015.\4\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 75639 (August 7,
2015), 80 FR 48615 (August 13, 2015) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2015-028); see also Securities
Exchange Act Release No. 67208 (June 15, 2012), 77 FR 37458 (June
21, 2012) (Order Approving File No. SR-FINRA-2011-058, as amended).
---------------------------------------------------------------------------
The Tier Size Pilot was filed with the SEC on October 6, 2011,\5\
to amend the minimum quotation sizes (or ``tier sizes'') for OTC Equity
Securities.\6\ The goals of the Pilot were to simplify the tier
structure, facilitate the display of customer limit orders, and expand
the scope of the Rule to apply to additional quoting participants.
During the course of the pilot, FINRA collected and provided to the SEC
specified data with
[[Page 75156]]
which to assess the impact of the Pilot tiers on market quality and
limit order display.\7\ On September 13, 2013, FINRA provided to the
Commission an assessment on the operation of the Tier Size Pilot
utilizing data covering the period from November 12, 2012 through June
30, 2013.\8\ As noted in the 2013 Assessment, FINRA believed that the
analysis of the data generally showed that the Tier Size Pilot had a
neutral to positive impact on OTC market quality for the majority of
OTC Equity Securities and tiers; and that there was an overall increase
of 13% in the number of customer limit orders that met the minimum
quotation sizes to be eligible for display under the Pilot tiers. In
the 2013 Assessment, FINRA recommended adopting the tiers as permanent,
but extended the pilot period to allow more time to gather and analyze
data after the November 12, 2012 through June 30, 2013 assessment
period.\9\ On January 29, 2015, FINRA further extended the Pilot period
to permit FINRA and the Commission to consider the implications of the
data collected since June 30, 2013.\10\ FINRA has reviewed this post-
June 30, 2013 data, and believes that the impact described in the 2013
Assessment has continued to hold (and has improved in certain areas).
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 65568 (October 14,
2011), 76 FR 65307 (October 20, 2011) (Notice of Filing of File No.
SR-FINRA-2011-058).
\6\ ``OTC Equity Security'' means any equity security that is
not an ``NMS stock'' as that term is defined in Rule 600(b)(47) of
SEC Regulation NMS; provided, however, that the term OTC Equity
Security shall not include any Restricted Equity Security. See FINRA
Rule 6420.
\7\ FINRA ceased collecting Pilot data for submission to the
Commission on February 13, 2015.
\8\ The assessment is part of the SEC's comment file for SR-
FINRA-2011-058 and also is available on FINRA's Web site at: https://www.finra.org/Industry/Regulation/RuleFilings/2011/P124615 (``Pilot
Assessment'').
\9\ See Securities Exchange Act Release No. 70839 (November 8,
2013), 78 FR 68893 (November 15, 2013) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2013-049).
\10\ See Securities Exchange Act Release No. 74251 (February 11,
2015), 80 FR 8741 (February 18, 2015) (Notice of Filing and
Immediate Effectiveness of File No. SR-FINRA-2015-002).
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The purpose of this filing is to extend the operation of the Tier
Size Pilot until June 10, 2016, to provide FINRA with additional time
to finalize its recommendation with regard to the Tier Size Pilot.
FINRA has filed the proposed rule change for immediate
effectiveness. The operative date of the proposed rule change will be
December 11, 2015.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\11\ 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 also believes that the proposed rule change is
consistent with the provisions of Section 15A(b)(11) of the Act.\12\
Section 15A(b)(11) requires that FINRA rules include provisions
governing the form and content of quotations relating to securities
sold otherwise than on a national securities exchange which may be
distributed or published by any member or person associated with a
member, and the persons to whom such quotations may be supplied.
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\11\ 15 U.S.C. 78o-3(b)(6).
\12\ 15 U.S.C. 78o-3(b)(11).
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FINRA believes that the extension of the Tier Size Pilot until June
10, 2016, is consistent with the Act in that it would provide the
Commission and FINRA with additional time to determine whether the
pilot tiers should be made permanent.
B. Self-Regulatory 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.
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 \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange 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.
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
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FINRA has asked the Commission to waive the 30-day operative delay
so that the proposal may become operative immediately upon filing. The
Commission believes that waiver of the operative delay is consistent
with the protection of investors and the public interest because such
waiver will allow the pilot program to continue without interruption.
Therefore, the Commission designates the proposal operative upon
filing.\17\
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\17\ 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).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is 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 Number SR-FINRA-2015-051 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2015-051. 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
[[Page 75157]]
communications relating to the proposed rule change between the
Commission and any person, other than those that may be withheld from
the public in accordance with the provisions of 5 U.S.C. 552, will be
available for Web site viewing and printing in the Commission's Public
Reference Room, 100 F Street NE., Washington, DC 20549, on official
business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of
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 publicly available. All submissions should refer to File Number
SR-FINRA-2015-051 and should be submitted on or before December 22,
2015.
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\18\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-30413 Filed 11-30-15; 8:45 am]
BILLING CODE 8011-01-P
