Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt Article 20, Rule 13 To Implement the Regulation NMS Plan To Implement a Tick Size Pilot Program (“Plan”), 19275-19282 [2016-07515]
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Federal Register / Vol. 81, No. 64 / Monday, April 4, 2016 / Notices
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–NYSE–
2016–27, and should be submitted on or
before April 25, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.43
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–07586 Filed 4–1–16; 8:45 am]
II. 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
[Release No. 34–77469; File No. SR–CHX–
2016–03]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Adopt
Article 20, Rule 13 To Implement the
Regulation NMS Plan To Implement a
Tick Size Pilot Program (‘‘Plan’’)
March 29, 2016.
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Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on March 28,
2016, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or the ‘‘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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
CHX proposes to adopt Article 20,
Rule 13 to implement the Regulation
NMS Plan to Implement a Tick Size
Pilot Program (‘‘Plan’’). Specifically, the
Exchange proposes to adopt Article 20,
Rule 13 to set forth the requirements for
the collection and transmission of data
pursuant to Appendices B and C of the
Plan. The proposed rule change is
substantially similar to proposed rule
changes recently approved or published
by the Commission by the Bats BZX
Exchange, Inc. f/k/a BATS Exchange,
Inc. (‘‘BZX’’) to adopt BZX Rule
43 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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11.27(b) 3 and by the Financial Industry
Regulatory Authority (‘‘FINRA’’) to
adopt FINRA Rule 6191(b),4 both of
which also sets forth requirements for
the collection and transmission of data
pursuant to Appendices B and C of the
Plan. Therefore, the Exchange has
designated this proposal as ‘‘noncontroversial’’ and provided the
Commission with the notice required by
Rule 19b–4(f)(6)(iii) under the Act.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.
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
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
On August 25, 2014, NYSE Group,
Inc., on behalf of the Exchange, Bats
BYX Exchange, Inc., BZX, Bats EDGA
Exchange, Inc., Bats EDGX Exchange,
Inc., FINRA, NASDAQ OMX BX, Inc.,
NASDAQ OMX PHLX LLC, the Nasdaq
Stock Market LLC, New York Stock
Exchange LLC (‘‘NYSE’’), NYSE MKT
LLC, and NYSE Arca, Inc. (collectively
‘‘Plan Participants’’), filed with the
Commission, pursuant to Section 11A of
the Act 6 and Rule 608 of Regulation
NMS thereunder,7 the Plan to
Implement a Tick Size Pilot Program
(‘‘Pilot’’).8 The Plan Participants filed
the Plan to comply with an order issued
3 See Securities Exchange Act Release Nos. 77105
(February 10, 2016), 81 FR 8112 (February 17, 2016)
(order approving SR–BATS–2015–102); and 77310
(March 7, 2016) (notice for comment and immediate
effectiveness of SR–BATS–2016–27).
4 See Securities Exchange Act Release No. 77164
(February 17, 2016), 81 FR 9043 (February 23, 2016)
(order approving SR–FINRA–2015–048).
5 17 CFR 240.19b–4(f)(6)(iii).
6 15 U.S.C. 78k–1.
7 17 CFR 242.608.
8 See Letter from Brendon J. Weiss, Vice
President, Intercontinental Exchange, Inc., to
Secretary, Commission, dated August 25, 2014.
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19275
by the Commission on June 24, 2014.9
The Plan 10 was published for comment
in the Federal Register on November 7,
2014, and approved by the Commission,
as modified, on May 6, 2015.11
The Plan is designed to allow the
Commission, market participants, and
the public to study and assess the
impact of increment conventions on the
liquidity and trading of the common
stocks of small-capitalization
companies. Each Plan Participant is
required to comply, and to enforce
compliance by its members, as
applicable, with the provisions of the
Plan. As is described more fully below,
the proposed rules would require CHX
Participants 12 to comply with the
applicable data collection requirements
of the Plan.13
The Pilot will include stocks of
companies with $3 billion or less in
market capitalization, an average daily
trading volume of one million shares or
less, and a volume weighted average
price of at least $2.00 for every trading
day. The Pilot will consist of a control
group of approximately 1400 Pilot
Securities and three test groups with
400 Pilot Securities in each (selected by
a stratified random sampling process).14
During the pilot, Pilot Securities in the
control group will be quoted at the
current tick size increment of $0.01 per
share and will trade at the currently
permitted increments. Pilot Securities in
the first test group (‘‘Test Group One’’)
will be quoted in $0.05 minimum
increments but will continue to trade at
any price increment that is currently
permitted.15 Pilot Securities in the
second test group (‘‘Test Group Two’’)
will be quoted in $0.05 minimum
increments and will trade at $0.05
minimum increments subject to a
midpoint exception, a retail investor
order exception, and a negotiated trade
9 See Securities Exchange Act Release No. 72460
(June 24, 2014), 79 FR 36840 (June 30, 2014).
10 Unless otherwise specified, capitalized terms
used in this rule filing are based on the defined
terms of the Plan.
11 See Securities Exchange Act Release No. 74892
(May 6, 2015), 80 FR 27513 (May 13, 2015)
(‘‘Approval Order’’).
12 A ‘‘Participant’’ is a ‘‘member’’ of the Exchange
for purposes of the Act. See CHX Article 1, Rule
1(s). For clarity, the Exchange proposes to utilize
the term ‘‘CHX Participant’’ when referring to
members of the Exchange and the term ‘‘Plan
Participant’’ when referring to Participants of the
Plan.
13 The Exchange proposes Interpretations and
Policies .11 to proposed Article 20, Rule 13 to
provide that the Rule shall be in effect during a
pilot period to coincide with the pilot period for the
Plan (including any extensions to the pilot period
for the Plan).
14 See Section V of the Plan for identification of
Pilot Securities, including criteria for selection and
grouping.
15 See Section VI(B) of the Plan.
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exception.16 Pilot Securities in the third
test group (‘‘Test Group Three’’) will be
subject to the same quoting and trading
increments as Test Group Two and also
will be subject to the ‘‘Trade-at’’
requirement to prevent price matching
by a market Plan Participant that is not
displaying at a Trading Center’s ‘‘Best
Protected Bid’’ or ‘‘Best Protected
Offer,’’ unless an enumerated exception
applies.17 In addition to the exceptions
provided under Test Group Two, an
exception for Block Size orders and
exceptions that mirror those under Rule
611 of Regulation NMS 18 will apply to
the Trade-at requirement.
In approving the Plan, the
Commission noted that the Trading
Center data reporting requirements
would facilitate an analysis of the
effects of the Pilot on liquidity (e.g.,
transaction costs by order size),
execution quality (e.g., speed of order
executions), market maker activity,
competition between trading venues
(e.g., routing frequency of market
orders), transparency (e.g., choice
between displayed and hidden orders),
and market dynamics (e.g., rates and
speed of order cancellations).19 The
Commission noted that Market Maker
profitability data would assist the
Commission in evaluating the effect, if
any, of a widened tick increment on
market marker profits and any
corresponding changes in the liquidity
of small-capitalization securities.20
Compliance With the Data Collection
Requirements of the Plan
The Plan contains requirements for
collecting and transmitting data to the
Commission and to the public.21
Specifically, Appendix B.I of the Plan
(Market Quality Statistics) requires
Trading Centers 22 to submit a variety of
market quality statistics, including
16 See
Section VI(C) of the Plan.
Section VI(D) of the Plan.
18 17 CFR 242.611.
19 See Approval Order, 80 FR at 27543.
20 Id.
21 The Exchange is also required by the Plan to
establish, maintain, and enforce written policies
and procedures that are reasonably designed to
comply with applicable quoting and trading
requirements specified in the Plan. The Exchange
intends to separately propose rules that would
require compliance by its CHX Participants with the
applicable quoting and trading requirements
specified in the Plan, and has reserved paragraph
(a) of proposed Article 20, Rule 13 for such rules.
22 The Plan incorporates the definition of a
‘‘Trading Center’’ from Rule 600(b)(78) of
Regulation NMS. Regulation NMS defines a
‘‘Trading Center’’ as ‘‘a national securities exchange
or national securities association that operates an
SRO trading facility, an alternative trading system,
an exchange market maker, an OTC market maker,
or any other broker or dealer that executes orders
internally by trading as principal or crossing orders
as agent.’’ See 17 CFR 242.600(b).
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17 See
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information about an order’s original
size, whether the order was displayable
or not, the cumulative number of orders,
the cumulative number of shares of
orders, and the cumulative number of
shares executed within specific time
increments, e.g., from 30 seconds to less
than 60 seconds after the time of order
receipt. This information shall be
categorized by security, order type,
original order size, hidden status, and
coverage under Rule 605.23 Appendix
B.I of the Plan also contains additional
requirements for market orders and
marketable limit orders, including the
share-weighted average effective spread
for executions of orders; the cumulative
number of shares of orders executed
with price improvement; and, for shares
executed with price improvement, the
share-weighted average amount per
share that prices were improved.
Appendix B.II of the Plan (Market and
Marketable Limit Order Data) requires
Trading Centers to submit information
relating to market orders and marketable
limit orders, including the time of order
receipt, order type, the order size, the
National Best Bid and National Best
Offer (‘‘NBBO’’) quoted price, the NBBO
quoted depth, the average execution
price-share-weighted average, and the
average execution time-share-weighted
average.
The Plan requires Appendix B.I and
B.II data to be submitted by Plan
Participants that operate a Trading
Center, and by members of the Plan
Participants that operate Trading
Centers. The Plan provides that each
Plan Participant that is the Designated
Examining Authority (‘‘DEA’’) for a
member of the Plan Participant that
operates a Trading Center shall collect
such data in a pipe delimited format,
beginning six months prior to the Pilot
Period and ending six months after the
end of the Pilot Period. The Plan also
requires the Plan Participant, operating
as DEA, to transmit this information to
the SEC within 30 calendar days
following month end.
The Exchange is therefore proposing
Article 20, Rule 13(b) to set forth the
requirements for the collection and
transmission of data pursuant to
Appendices B and C of the Plan.
Proposed Article 20, Rule 13(b) is
substantially similar to proposed rule
changes by BZX that were recently
approved or published by the
Commission to adopt BZX Rule 11.27(b)
which also sets forth requirements for
the collection and transmission of data
pursuant to Appendices B and C of the
Plan; 24 provided the following:
23 17
CFR 242.605.
supra note 3.
24 See
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• Proposed Article 20, Rule
13(b)(2)(A) is similar to proposed rule
changes by FINRA that were recently
approved or published by the
Commission to adopt FINRA Rule
6191(b)(2).25
• Proposed Article 20, Rule
13(b)(3)(B) is similar to approved BZX
Rule 11.27(b)(3)(B), except that the
Exchange is also proposing to require
CHX Participant Market Makers for
which the Exchange is the DEA to
transmit Appendix B.IV data to FINRA
directly, as discussed below.26
• Proposed Article 20, Rule
13(b)(4)(B) is similar to approved BZX
Rule 11.27(b)(4)(B), except that the
Exchange is also proposing to require
CHX Participant Market Makers for
which the Exchange is the DEA to
transmit Appendix C.I data to FINRA
directly, as discussed below.27
Appendices B.I and B.II
Proposed Article 20, Rule 13(b)(1)
requires that a CHX Participant that
operates a Trading Center shall
establish, maintain and enforce written
policies and procedures that are
reasonably designed to comply with the
data collection and transmission
requirements of Items I and II to
Appendix B of the Plan, and a CHX
Participant that is a Market Maker shall
establish, maintain and enforce written
policies and procedures that are
reasonably designed to comply with the
data collection and transmission
requirements of Item IV of Appendix B
of the Plan and Item I of Appendix C of
the Plan.
The Exchange notes that the data
requirements of Items I and II to
Appendix B of the Plan necessitates that
the Exchange adopt two sets of rules:
One for CHX Participants that operate
Trading Centers subject to the Plan for
which the Exchange is the DEA (i.e.,
proposed Article 20, Rule 13(b)(2)(A))
and another for the Trading Center
operated by the Exchange (i.e., proposed
Article 20, Rule 13(b)(2)(B)), as
discussed below.
25 Prior to the operative date of the proposed rule
change, the Exchange will enter into a Tick Size
Pilot Program Regulatory Services Agreement with
FINRA (‘‘TSPP RSA’’), pursuant to which FINRA
will consume and process certain data elements
required under Appendices B.I, B.II, B.IV and C.I
of the Plan that would either be submitted to FINRA
by the Exchange (for Appendices B.I and B.II data)
or by CHX Participants directly (for Appendices
B.IV and C.I data). In turn, FINRA would provide
the Exchange with processed data in a form as
required for submission to the SEC under the Plan.
At all times, the Exchange will maintain its data
reporting obligations pursuant to the Plan.
26 See id.
27 See id.
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Certain CHX Participant Trading
Centers
Similar to FINRA Rule
6191(b)(2)(A)(i), proposed Article 20,
Rule 13(b)(2)(A)(i) requires that a CHX
Participant that operates a Trading
Center subject to the Plan, and for
which CHX is the DEA, shall collect and
transmit to the Exchange the data
described in Items I and II of Appendix
B of the Plan with respect to each PrePilot Data Collection Security for the
period beginning six months prior to the
Pilot Period through the trading day
immediately preceding the Pilot Period;
and each Pilot Security for the period
beginning on the first day of the Pilot
Period through six months after the end
of the Pilot Period.28
Section IV of the Plan (Policies and
Procedures) provides that each Plan
Participant that is the DEA of a member
of a Plan Participant operating a Trading
Center is required to develop
appropriate policies and procedures for
collecting and reporting the data
described in Items I and II of Appendix
B, as applicable, to the DEA Plan
Participant. The Exchange has
determined that all of the data required
by Appendix B.I and B.II to the Plan
currently is reported to the Exchange
pursuant to CHX Article 11, Rule 3,
which requires CHX Participants for
which the Exchange is the DEA, among
others, to record certain order and
execution information into an electronic
system designated by the Exchange. In
the interest of increasing the efficiency
of the data collection process and the
consistency of that data to be collected
under the Plan, the Exchange proposes
to use Article 11, Rule 3 as the vehicle
through which Trading Centers must
comply with their reporting obligations
pursuant to Appendix B.I and B.II of the
Plan.
Accordingly, similar to FINRA Rule
6191(b)(2)(A)(ii), proposed Article 20,
Rule 13(b)(2)(A)(ii) provides that each
CHX Participant that operates a Trading
Center subject to the Plan, and for
which CHX is the DEA, shall meet the
data collection and reporting
requirements in Items I and II of
Appendix B through their submission of
data elements required pursuant to
Article 11, Rule 3, as well as the
following additional data elements,
when an order in a Pilot Security or PrePilot Data Collection Security is
received or originated: (a) Whether the
CHX Participant is a Trading Center in
either the Pilot Security or the Pre-Pilot
28 As of the date of this filing, the Exchange has
three CHX Participants that would be subject to the
requirements of proposed paragraph (b)(2)(A). All
three of these firms are also members of FINRA.
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Data Collection Security; and (b)
whether the order is routable.
Moreover, similar to FINRA Rule
6191(b)(2)(A)(iii), proposed CHX Article
20, Rule 13(b)(2)(A)(iii) provides that
when an order in a Pilot Security or PrePilot Data Collection Security is
executed, each CHX Participant subject
to this paragraph (b)(2)(A) shall comply
with its collection and transmission
obligations under Items I and II of
Appendix B to the Plan and this Rule by
identifying whether CHX Participant is
relying upon the Retail Investor Order
exception with respect to the execution
of the order.
As an initial matter, only those CHX
Participants that operate a Trading
Center and for which the Exchange is
the DEA are required to make any
changes to their Article 11, Rule 3 data
recording. CHX Participants that do not
operate Trading Centers or that have
another self-regulatory organization as
DEA will be permitted to leave the new
fields blank. CHX Participants that
operate Trading Centers and which the
Exchange is the DEA will be required to
indicate their status as a Trading Center
for new orders involving Pre-Pilot Data
Collection Securities and Pilot
Securities.29
Moreover, the proposed rule change
adds a new requirement to capture
whether an order in a Pre-Pilot Data
Collection Security or a Pilot Security
received by a CHX Participant that
operates a Trading Center and for which
the Exchange is the DEA is routable 30
and whether the CHX Participant is
relying on the Retail Investor Order
exception in the Plan with respect to the
execution of the order. These additional
fields are necessary so that the Exchange
can capture the information required by
Item II(n) and II(o) of Appendix B to the
Plan.
Similar to FINRA Rule
6191(b)(2)(A)(iv), proposed Article 20,
Rule 13(b)(2)(A)(iv) provides that each
CHX Participant that operates a Trading
Center subject to the Tick Size Pilot
Program, and for which the Exchange is
the DEA, shall submit data required
under this paragraph (b)(2)(A) by 8:00
29 The Exchange notes that CHX Participants are
already required to record the display size of an
order, pursuant to the CHX Article 11, Rule 3(c)(5)
and (16), and thus, the Exchange already captures
information required by Appendix B regarding
hidden and displayed size.
30 The Exchange notes that it currently requires
CHX Participants for which the Exchange is the
DEA to record whether an order received by the
CHX Participant is routable, pursuant to CHX
Article 11, Rule 3(c)(27), which provides that the
Exchange may require CHX Participants to record
‘‘such other information as the Exchange may from
time to time require.’’
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a.m. CST the calendar day following the
reportable event.
As set forth in Section VII of the Plan
(Collection of Pilot Data) and similar to
FINRA Rule 6191(b)(2)(B), proposed
Article 20, Rule 13(b)(2)(A)(v) provides
that the Exchange shall collect and
transmit to the SEC the data described
in Items I and II of Appendix B of the
Plan and collected pursuant to this
paragraph (b)(2)(A).31 The Exchange
shall transmit such data to the SEC in
a pipe delimited format, on a
disaggregated basis by Trading Center,
within 30 calendar days following
month end. Also, the Exchange shall
make such data publicly available on
the CHX Web site on a monthly basis at
no charge and shall not identify the
Trading Center that generated the data.
CHX Trading Center
Proposed Article 20, Rule
13(b)(2)(B)(i) provides that the Exchange
shall collect and transmit to the SEC the
data described in Items I and II of
Appendix B of the Plan relating to
trading activity in Pre-Pilot Securities
and Pilot Securities on a Trading Center
operated by the Exchange. The
Exchange shall transmit such data to the
SEC in a pipe delimited format, on a
disaggregated basis by Trading Center,
within 30 calendar days following
month end for: (i) Each Pre-Pilot Data
Collection Security for the period
beginning six months prior to the Pilot
Period through the trading day
immediately preceding the Pilot Period;
and (ii) each Pilot Security for the
period beginning on the first day of the
Pilot Period through six months after
the end of the Pilot Period. The
Exchange also shall make such data
publicly available on the Exchange Web
site on a monthly basis at no charge and
will not identify the CHX Participant
that generated the data.
Appendix B.IV
Appendix B.IV (Daily Market Maker
Participation Statistics) requires a Plan
Participant to collect data related to
Market Maker participation from each
Market Maker 32 engaging in trading
activity on a Trading Center operated by
the Plan Participant. The Exchange is
therefore proposing Article 20, Rule
13(b)(3) to gather data about a Market
Maker’s participation in Pilot Securities
and Pre-Pilot Data Collection Securities.
Proposed Article 20, Rule 13(b)(3)(A)
provides that a CHX Participant that is
31 See
supra note 25.
Plan defines a Market Maker as ‘‘a dealer
registered with any self-regulatory organization, in
accordance with the rules thereof, as (i) a market
maker or (ii) a liquidity provider with an obligation
to maintain continuous, two-sided trading interest.’’
32 The
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a Market Maker shall collect and
transmit to their DEA data relating to
Item IV of Appendix B of the Plan with
respect to activity conducted on any
Trading Center in Pilot Securities and
Pre-Pilot Data Collection Securities in
furtherance of its status as a registered
Market Maker, including a Trading
Center that executes trades otherwise
than on a national securities exchange,
for transactions that have settled or
reached settlement date. The proposed
rule requires Market Makers to transmit
such data in a format required by their
DEA, by 12:00 p.m. EST on T+4 for: (i)
Transactions in each Pre-Pilot Data
Collection Security for the period
beginning six months prior to the Pilot
Period through the trading day
immediately preceding the Pilot Period;
and (ii) for transactions in each Pilot
Security for the period beginning on the
first day of the Pilot Period through six
months after the end of the Pilot Period.
However, the Exchange understands
that some CHX Participants may utilize
a DEA that is not a Plan Participant to
the Plan and that their DEA would not
be subject to the Plan’s data collection
requirements. In such case, a DEA that
is not a Plan Participant of the Plan
would not be required to collect the
required data and may not establish
procedures for CHX Participants for
which it acts as DEA to report the data
required under subparagraphs (b)(3)(A)
of proposed Article 20, Rule 13(b)(3)(A)
and in accordance with Item IV of
Appendix B of the Plan.
Moreover, to facilitate the linking of
relevant transactions across various
Trading Centers by a CHX Participant
Market Maker, the Exchange proposes to
require CHX Participants Market Makers
for which the Exchange is the DEA to
submit data relating to Item IV of
Appendix B to FINRA directly.33
Therefore, the Exchange proposes to
adopt subparagraph (b)(3)(B) to
proposed Article 20, Rule 13 to require
a CHX Participant that is a Market
Maker whose DEA (i) is not a Plan
Participant to the Plan or (ii) is the
Exchange to transmit the data collected
pursuant to paragraph (3)(A) of
proposed Article 20, Rule 13 to FINRA,
which is a Plan Participant to the Plan
and is to collect data relating to Item IV
of Appendix B of the Plan on behalf of
the Plan Participants. For Market
Makers for which it is the DEA, FINRA
issued a Market Maker Transaction Data
Technical Specification to collect data
on Pre-Pilot Data Collection Securities
and Pilot Securities from Trading
33 See
supra note 25.
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Centers to comply with the Plan’s data
collection requirements.34
Proposed Article 20, Rule 13(b)(3)(C)
provides that the Exchange shall
transmit the data collected by the DEA
or FINRA pursuant to proposed Article
20, Rule 13(b)(3)(A) and (B) above
relating to Market Maker activity on a
Trading Center operated by the
Exchange to the SEC in a pipe delimited
format within 30 calendar days
following month end. The Exchange
shall also make such data publicly
available on the Exchange Web site on
a monthly basis at no charge and shall
not identify the Trading Center that
generated the data.
Appendix C.I
Appendix C.I (Market Maker
Profitability) requires a Plan Participant
to collect data related to Market Maker
profitability from each Market Maker for
which it is the DEA. Specifically, the
Plan Participant is required to collect
the total number of shares of orders
executed by the Market Maker; the raw
Market Maker realized trading profits,
and the raw Market Maker unrealized
trading profits. Data shall be collected
for dates starting six months prior to the
Pilot Period through six months after
the end of the Pilot Period. This data
shall be collected on a monthly basis, to
be provided in a pipe delimited format
to the Plan Participant, as DEA, within
30 calendar days following month end.
Appendix C.II (Aggregated Market
Maker Profitability) requires the Plan
Participant, as DEA, to aggregate the
Appendix C.I data, and to categorize
this data by security as well as by the
control group and each Test Group. That
aggregated data shall contain
information relating to total raw Market
Maker realized trading profits, volumeweighted average of raw Market Maker
realized trading profits, the total raw
Market Maker unrealized trading profits,
and the volume-weighted average of
Market Maker unrealized trading profits.
The Exchange is therefore proposing
Article 20, Rule 13(b)(4) to set forth the
requirements for the collection and
transmission of data pursuant to
Appendix C.I of the Plan. Proposed
Article 20, Rule 13(b)(4)(A) requires that
a CHX Participant that is a Market
Maker shall collect and transmit to their
DEA the data described in Item I of
Appendix C of the Plan with respect to
executions in Pilot Securities that have
34 CHX Participant Market Makers that would be
obligated to submit data relating to Item IV of
Appendix B to FINRA directly should refer to the
Market Maker Transaction Data Technical
Specification on the FINRA Web site at https://
www.finra.org/sites/default/files/market-makertransaction-data-tech-specs.pdf.
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settled or reached settlement date that
were executed on any Trading Center.
The proposed rule also requires CHX
Participants to provide such data in a
format required by their DEA by 12 p.m.
EST on T+4 for executions during and
outside of Regular Trading Hours in
each: (i) Pre-Pilot Data Collection
Security for the period beginning six
months prior to the Pilot Period through
the trading day immediately preceding
the Pilot Period; and (ii) Pilot Security
for the period beginning on the first day
of the Pilot Period through six months
after the end of the Pilot Period.
For the same reasons set forth above
for subparagraph (b)(3)(B) to proposed
Article 20, Rule 13, the Exchange
proposes to adopt subparagraph
(b)(4)(B) to proposed Article 20, Rule 13
to require a CHX Participant that is a
Market Maker whose DEA (i) is not a
Plan Participant to the Plan or (ii) the
Exchange to transmit the data collected
pursuant to paragraph (4)(A) of Article
20, Rule 13 to FINRA directly. As stated
above, FINRA is a Plan Participant to
the Plan and is to collect data relating
to Item I of Appendix C of the Plan on
behalf of the Plan Participants. For
Market Makers for which it is the DEA,
FINRA issued a Market Maker
Transaction Data Technical
Specification to collect data on Pre-Pilot
Data Collection Securities and Pilot
Securities from Trading Centers to
comply with the Plan’s data collection
requirements.35
Appendix B.III
The Exchange is also adopting a rule
setting forth the manner in which
Market Maker participation will be
calculated. Item III of Appendix B of the
Plan requires each Plan Participant that
is a national securities exchange to
collect daily Market Maker registration
statistics categorized by security,
including the following information: (i)
Ticker symbol; (ii) the Plan Participant
exchange; (iii) number of registered
market makers; and (iv) the number of
other registered liquidity providers.
Therefore, the Exchange proposes to
adopt proposed Article 20, Rule 13(b)(5)
providing that the Exchange shall
collect and transmit to the SEC the data
described in Item III of Appendix B of
the Plan relating to daily Market Maker
registration statistics in a pipe delimited
format within 30 calendar days
following month end for: (i)
Transactions in each Pre-Pilot Data
Collection Security for the period
beginning six months prior to the Pilot
Period through the trading day
immediately preceding the Pilot Period;
35 Id.
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and (ii) transactions in each Pilot
Security for the period beginning on the
first day of the Pilot Period through six
months after the end of the Pilot Period.
The Exchange is also proposing,
through Interpretations and Policies, to
clarify other aspects of the data
collection requirements.36 Proposed
Interpretations and Policies .02 relates
to the use of the retail investor order flag
for purposes of Appendix B.II(n)
reporting. The Plan currently states that
market and marketable limit orders shall
include a ‘‘yes/no’’ field relating to the
Retail Investor Order flag. The Exchange
is proposing Interpretations and Policies
.02 to clarify that, for purposes of the
reporting requirement in Appendix
B.II(n), a Trading Center shall report ‘‘y’’
to their DEA where it is relying upon
the Retail Investor Order exception to
Test Groups Two and Three, and ‘‘n’’ for
all other instances.37 The Exchange
believes that requiring the identification
of a Retail Investor Orders only where
the exception may apply (i.e., Pilot
Securities in Test Groups Two and
Three) is consistent with Appendix
B.II(n).
Interpretations and Policies .03
requires that CHX Participants populate
a field to identify to their DEA whether
an order is affected by the bands in
place pursuant to the National Market
System Plan to Address Extraordinary
Market Volatility.38 Pursuant to the
Limit-Up Limit-Down Plan, between
9:30 a.m. and 4:00 p.m., the Securities
Information Processor (‘‘SIP’’) calculates
a lower price band and an upper price
band for each NMS stock. These price
bands represent a specified percentage
above or below the stock’s reference
price, which generally is calculated
based on reported transactions in that
stock over the preceding five minutes.
When one side of the market for an
36 The Exchange is also proposing Interpretations
and Policies .01 to Article 20, Rule 13 to clarify that
certain enumerated terms used throughout Article
20, Rule 13 shall have the same meaning as set forth
in the Plan.
37 FINRA, on behalf of the Plan Participants
submitted a letter to Commission requesting
exemption from certain provisions of the Plan
related to data collection. See letter from Marcia E.
Asquith, Senior Vice President and Corporate
Secretary, FINRA dated December 9, 2015 to Robert
W. Errett, Deputy Secretary, Commission
(‘‘Exemption Request’’). The Commission, pursuant
to its authority under Rule 608(e) of Regulation
NMS, granted BZX a limited exemption from the
requirement to comply with certain provisions of
the Plan as specified in the letter and noted herein.
See letter from David Shillman, Associate Director,
Division of Trading and Markets, Commission to
Eric Swanson, General Counsel, BZX, dated
February 10, 2016 (‘‘Exemption Letter’’).
38 See National Market System Plan to Address
Extraordinary Market Volatility, Securities
Exchange Act Release No. 67091 (May 31, 2012), 77
FR 33498 (June 6, 2012) (File No. 4–631) (‘‘LimitUp Limit-Down Plan’’).
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individual security is outside the
applicable price band, the SIP identifies
that quotation as non-executable. When
the other side of the market reaches the
applicable price band (e.g., the offer
reaches the lower price band), the
security enters a Limit State. The stock
would exit a Limit State if, within 15
seconds of entering the Limit State, all
Limit State Quotations were executed or
canceled in their entirety. If the security
does not exit a Limit State within 15
seconds, then the primary listing
exchange declares a five-minute trading
pause, which would be applicable to all
markets trading the security.
The Exchange and the other Plan
Participants have determined that it is
appropriate to create a new flag for
reporting orders that are affected by the
Limit-Up Limit-Down bands.
Accordingly, a Trading Center shall
report a value of ‘‘Y’’ to their DEA when
the ability of an order to execute has
been affected by the Limit-Up LimitDown bands in effect at the time of
order receipt. A Trading Center shall
report a value of ‘‘N’’ to their DEA when
the ability of an order to execute has not
been affected by the Limit-Up LimitDown bands in effect at the time of
order receipt.
Interpretations and Policies .03 also
requires, for securities that may trade in
a foreign market, that the Plan
Participant indicate whether the order
was handled domestically, or routed to
a foreign venue. Accordingly, the Plan
Participant will indicate, for purposes of
Appendix B.I, whether the order was:
(1) Fully executed domestically, or (2)
fully or partially executed on a foreign
market. For purposes of Appendix B.II,
the Plan Participant will classify all
orders in securities that may trade in a
foreign market Pilot and Pre-Pilot
Securities as: (1) Directed to a domestic
venue for execution; (2) may only be
directed to a foreign venue for
execution; or (3) was fully or partially
directed to a foreign venue at the
discretion of the CHX Participant. The
Exchange believes that this proposed
flag will better identify orders in
securities that may trade in a foreign
market, as such orders that were routed
to foreign venues would not be subject
to the Plan’s quoting and trading
requirements, and could otherwise
compromise the integrity of the data.
Interpretations and Policies .04 relates
to the time ranges specified in
Appendix B.I.a(14), B.I.a(15), B.I.a(21)
and B.I.a(22).39 The Exchange and the
39 Specifically, Appendix B.I.a(14) requires
reporting of the cumulative number of shares of
orders executed from 0 to less than 100
microseconds after the time of order receipt;
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19279
other Plan Participants have determined
that it is appropriate to change the
reporting times in these provisions to
require more granular reporting for
these categories. Accordingly, the
Exchange proposes to add Appendix
B.I.a(14A), which will require Trading
Centers to report the cumulative number
of shares of orders executed from 100
microseconds to less than 1 millisecond
after the time of order receipt. Appendix
B.I.a(15) will be changed to require the
cumulative number of shares of orders
executed from 1 millisecond to less than
100 milliseconds after the time of order
receipt. The Exchange also proposes to
add Appendix B.I.a(21A), which will
require Trading Centers to report the
cumulative number of shares of orders
canceled from 100 microseconds to less
than 1 millisecond after the time of
order receipt. Appendix B.I.a(22) will be
changed to require the cumulative
number of shares of orders canceled
from 1 millisecond to less than 100
milliseconds after the time of order
receipt. The Exchange believes that
these new reporting requirements will
contribute to a meaningful analysis of
the Pilot by producing more granular
data on these points.40
Interpretations and Policies .05 relates
to the relevant measurement for
purposes of Appendix B.I.a(31)–(33)
reporting. Currently, the Plan states that
this data shall be reported as of the time
of order execution. The Exchange and
the other Plan Participants believe that
this information should more properly
be captured at the time of order receipt
as evaluating share-weighted average
prices at the time of order receipt is
more consistent with the goal of
observing the effect of the Pilot on the
liquidity of Pilot Securities. The
Exchange is therefore proposing to make
this change through Interpretations and
Policies .05.41 This change will make
these provisions consistent with the
remainder of the statistics in Appendix
B.I.a, which are all based on order
receipt.
Interpretations and Policies .06
addresses the status of not-held and
auction orders for purposes of Appendix
Appendix B.I.a(15) requires reporting of the
cumulative number of shares of orders executed
from 100 microseconds to less than 100
milliseconds after the time of order receipt;
Appendix B.I.a(21) requires reporting of the
cumulative number of shares of orders cancelled
from 0 to less than 100 microseconds after the time
of order receipt; and Appendix B.I.a(22) requires
reporting of the cumulative number of shares of
orders cancelled from 100 microseconds to less
than 100 milliseconds after the time of order
receipt.
40 The Commission granted BZX an exemption
from Rule 608(c) related to this provision. See
Exemption Letter, supra note 37.
41 Id.
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B.I reporting. Currently, Appendix B.I
sets forth eight categories of orders,
including market orders, marketable
limit orders, and inside-the-quote
resting limit orders, for which daily
market quality statistics must be
reported. Currently, Appendix B.I does
not provide a category for not held
orders, clean cross orders, auction
orders, or orders received when the
NBBO is crossed. The Exchange and the
other Plan Participants have determined
that it is appropriate to include separate
categories for these orders types for
purposes of Appendix B reporting. The
Exchange is therefore proposing
Interpretations and Policies .06 to
provide that not held orders shall be
included as an order type for purposes
of Appendix B reporting, and shall be
assigned the number (18). Clean cross
orders shall be included as an order
type for purposes of Appendix B
reporting, and shall be assigned the
number (19); auction orders shall be
included an as order type for purposes
of Appendix B reporting, and shall be
assigned the number (20); and orders
that cannot otherwise be classified,
including, for example, orders received
when the NBBO is crossed shall be
included as an order type for purposes
of Appendix B reporting, and shall be
assigned the number (21). All of these
orders already are included in the scope
of Appendix B; however, without this
proposed change, these order types
would be categorized with other orders,
such as regular held orders, that should
be able to be fully executed upon
receipt, which would compromise the
value of this data.
The Exchange is proposing
Interpretations and Policies .07 to
clarify the scope of the Plan as it relates
to CHX Participants that only execute
orders limited purposes. Specifically,
the Exchange and the other Plan
Participants believe that a CHX
Participant that only executes orders
otherwise than on a national securities
exchange for the purpose of: (1)
Correcting a bona fide error related to
the execution of a customer order; (2)
purchasing a security from a customer at
a nominal price solely for purposes of
liquidating the customer’s position; or
(3) completing the fractional share
portion of an order 42 shall not be
deemed a Trading Center for purposes
of Appendix B to the Plan. The
Exchange is therefore proposing
42 The Exchange notes that where a CHX
Participant purchases a fractional share from a
customer, the Trading Center that executes the
remaining whole shares of that customer order
would subject to subject to Appendix B of the Plan.
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Supplementary Material .09 to make
this clarification.
The Exchange is proposing
Interpretations and Policies .08 to
clarify that, for purposes of the Plan,
Trading Centers must begin the data
collection required pursuant to
Appendix B.I.a(1) through B.II.(y) of the
Plan and Item I of Appendix C of the
Plan on April 4, 2016. While the
Exchange or the CHX Participant’s DEA
will provide the information required by
Appendix B and C of the Plan during
the Pilot Period, the requirement that
the Exchange or their DEA provide
information to the SEC within 30 days
following month end and make such
data publicly available on its Web site
pursuant to Appendix B and C shall
commence six months prior to the
beginning of the Pilot Period.43
The Exchange is proposing
Interpretations and Policies .09 to
address the requirement in Appendix
C.I(b) of the Plan that the calculation of
raw Market Maker realized trading
profits utilize a last in, first out
(‘‘LIFO’’)-like method to determine
which share prices shall be used in that
calculation. The Exchange and the other
Plan Participants believe that it is more
appropriate to utilize a methodology
that yields LIFO-like results, rather than
utilizing a LIFO-like method, and the
Exchange is therefore proposing
Interpretations and Policies .09 to make
this change.44 The Exchange is
proposing that, for purposes of Item I of
Appendix C, the Plan Participants shall
calculate daily Market Maker realized
profitability statistics for each trading
43 In its order approving the Plan, the SEC noted
that the Pilot shall be implemented within one year
of the date of publication of its order, e.g., by May
6, 2016. See Approval Order, 80 FR at 27545.
However, on November 6, 2015, the SEC extended
the implementation date approximately five months
to October 3, 2016. See Securities Exchange Act
Release No. 76382 (November 6, 2015), 80 FR 70284
(File No. 4–657) (Order Granting Exemption From
Compliance With the National Market System Plan
To Implement a Tick Size Pilot Program); see also
Letter from Brendon J. Weiss, Co-Head, Government
Affairs, Intercontinental Exchange/NYSE, to Brent J.
Fields, Secretary, Commission, dated November 4,
2015 (requesting the data collection period be
extended until six months after the requisite SRO
rules are approved, and the implementation data of
the Tick Size Pilot until six months thereafter).
44 Appendix C.I currently requires Market Maker
profitability statistics to include (1) the total
number of shares of orders executed by the Market
Maker; (2) raw Market Maker realized trading
profits, which is the difference between the market
value of Market Maker shares and the market value
of Market Maker purchases, using a LIFO-like
method; and (3) raw Market Maker unrealized
trading profits, which is the difference between the
purchase or sale price of the end-of-day inventory
position of the Market Maker and the Closing Price.
In the case of a short position, the Closing Price
from the sale will be subtracted; in the case of a
long position, the purchase price will be subtracted
from the Closing Price.
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day on a daily LIFO basis using reported
trade price and shall include only trades
executed on the subject trading day. The
daily LIFO calculation shall not include
any positions carried over from previous
trading days. For purposes of Item I.c of
Appendix C, the Plan Participants shall
calculate daily Market Maker unrealized
profitability statistics for each trading
day on an average price basis.
Specifically, the Plan Participants must
calculate the volume weighted average
price of the excess (deficit) of buy
volume over sell volume for the current
trading day using reported trade price.
The gain (loss) of the excess (deficit) of
buy volume over sell volume shall be
determined by using the volume
weighted average price compared to the
closing price of the security as reported
by the primary listing exchange. In
reporting unrealized trading profits, the
Plan Participant shall also report the
number of excess (deficit) shares held
by the Market Maker, the volume
weighted average price of that excess
(deficit) and the closing price of the
security as reported by the primary
listing exchange used in reporting
unrealized profit.45
Finally, the Exchange is proposing
Interpretations and Policies .10 to
address the securities that will be used
for data collection purposes prior to the
commencement of the Pilot. The
Exchange and the other Plan
Participants have determined that it is
appropriate to collect data for a group of
securities that is larger, and using
different quantitative thresholds, than
the group of securities that will be Pilot
Securities. The Exchange is therefore
proposing Interpretations and Policies
.10 to define ‘‘Pre-Pilot Data Collection
Securities’’ as the securities designated
by the Plan Participants for purposes of
the data collection requirements
described in Items I, II and IV of
Appendix B and Item I of Appendix C
of the Plan for the period beginning six
months prior to the Pilot Period and
ending on the trading day immediately
preceding the Pilot Period. The Plan
Participants shall compile the list of
Pre-Pilot Data Collection Securities by
selecting all NMS stocks with a market
capitalization of $5 billion or less, a
Consolidated Average Daily Volume
(CADV) of 2 million shares or less and
a closing price of $1 per share or more.
The market capitalization and the
closing price thresholds shall be applied
to the last day of the Pre-Pilot
measurement period, and the CADV
threshold shall be applied to the
45 The Commission granted BZX an exemption
from Rule 608(c) related to this provision. See
Exemption Letter, supra note 37.
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duration of the Pre-Pilot measurement
period. The Pre-Pilot measurement
period shall be the three calendar
months ending on the day when the PrePilot Data Collection Securities are
selected. The Pre-Pilot Data Collection
Securities shall be selected thirty days
prior to the commencement of the sixmonth Pre-Pilot Period. On the trading
day that is the first trading day of the
Pilot Period through six months after
the end of the Pilot Period, the data
collection requirements will become
applicable to the Pilot Securities only. A
Pilot Security will only be eligible to be
included in a Test Group if it was a PrePilot Security.
mstockstill on DSK4VPTVN1PROD with NOTICES
Implementation Date
The proposed rule change will be
operative on April 4, 2016.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 46 in general, and furthers the
objectives of Section 6(b)(5) of the Act 47
in particular, in that it is designed to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
The Exchange believes that this
proposal is consistent with the Act
because it implements and clarifies the
provisions of the Plan, and is designed
to assist the Exchange in meeting its
regulatory obligations pursuant of the
Plan. In approving the Plan, the SEC
noted that the Pilot was an appropriate,
data-driven test that was designed to
evaluate the impact of a wider tick size
on trading, liquidity, and the market
quality of securities of smaller
capitalization companies, and was
therefore in furtherance of the purposes
of the Act. The Exchange believes that
this proposal is in furtherance of the
objectives of the Plan, as identified by
the SEC, and is therefore consistent with
the Act because the proposal
implements and clarifies the
requirements of the Plan and applies
specific obligations to CHX Participants
in furtherance of compliance with the
Plan.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
46 15
47 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange notes that the proposed rule
change implements the provisions of the
Plan, and is designed to assist the
Exchange in meeting its regulatory
obligations pursuant of the Plan. The
Exchange also notes that the data
collection requirements for CHX
Participants that operate Trading
Centers will apply equally to all such
CHX Participants, as will the data
collection requirements for Market
Makers.
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 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 48 and Rule 19b–
4(f)(6) thereunder.49
A proposed rule change filed
pursuant to Rule 19b–4(f)(6) under the
Act 50 normally does not become
operative for 30 days after the date of its
filing. However, Rule 19b–4(f)(6)(iii) 51
permits the Commission to designate a
shorter time if such action is consistent
with the protection of investors and the
public interest. The Exchange has asked
the Commission to waive the 30-day
operative delay. The Commission
believes that waiver of the operative
delay is consistent with the protection
of investors and the public interest
because it would allow the Exchange to
implement the proposed amendments
on April 4, 2016, the date upon which
the data collection requirements of the
Plan become effective.52 Therefore, the
48 15
U.S.C. 78s(b)(3)(A).
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, or such
shorter time as designated by the Commission.
50 17 CFR 240.19b–4(f)(6).
51 17 CFR 240.19b–4(f)(6)(iii).
52 See Securities Exchange Act Release No. 76382
(November 6, 2015), 80 FR 70284 (File No. 4–657)
(Order Granting Exemption From Compliance With
49 17
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19281
Commission hereby waives the
operative delay and designates the
proposal operative on April 4, 2016.53
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
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:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–CHX–2016–03 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–CHX–2016–03. 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
the National Market System Plan To Implement a
Tick Size Pilot Program).
53 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
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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 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–CHX–
2016–03, and should be submitted on or
before April 25, 2016.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.54
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–07515 Filed 4–1–16; 8:45 am]
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration # 14667 and # 14668]
Louisiana Disaster Number LA–00062
U.S. Small Business
Administration.
ACTION: Amendment 3.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for the State of Louisiana
(FEMA–4263–DR), dated 03/13/2016.
Incident: Severe Storms and Flooding.
Incident Period: 03/08/2016 and
continuing.
Effective Date: 03/25/2016.
Physical Loan Application Deadline
Date: 05/12/2016.
EIDL Loan Application Deadline Date:
12/13/2016.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the Presidential disaster declaration
for the State of Louisiana, dated 03/13/
2016 is hereby amended to include the
following areas as adversely affected by
the disaster:
Primary Parishes: (Physical Damage and
Economic Injury Loans):
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54 17
CFR 200.30–3(a)(12).
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(Catalog of Federal Domestic Assistance
Numbers 59008)
James E. Rivera,
Associate Administrator for Disaster
Assistance.
[FR Doc. 2016–07651 Filed 4–1–16; 8:45 am]
The Interest Rates are:
Percent
For Physical Damage:
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations Without Credit Available Elsewhere .....................................
2.625
2.625
2.625
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #14677 and #14678]
Pennsylvania Disaster #PA–00069
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
PO 00000
Frm 00171
Fmt 4703
Sfmt 4703
The number assigned to this disaster
for physical damage is 14677B and for
economic injury is 14678B.
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
James E. Rivera,
Associate Administrator for Disaster
Assistance.
[FR Doc. 2016–07603 Filed 4–1–16; 8:45 am]
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Pennsylvania (FEMA–4267–
DR), dated 03/23/2016.
Incident: Severe Winter Storm and
Snowstorm.
Incident Period: 01/22/2016 through
01/23/2016.
Effective Date: 03/23/2016.
Physical Loan Application Deadline
Date: 05/23/2016.
Economic Injury (EIDL) Loan
Application Deadline Date: 12/23/2016.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration Processing, and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
03/23/2016, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Adams, Bedford,
Berks, Blair, Bucks, Chester,
Cumberland, Dauphin, Fayette,
Franklin, Fulton, Juniata, Lancaster,
Lebanon, Lehigh, Montgomery,
Northampton, Perry, Philadelphia,
Schuylkill, Somerset, Westmoreland,
York.
SUMMARY:
BILLING CODE 8011–01–P
SUMMARY:
Jackson, Rapides, Red River, Sabine.
Contiguous Counties: (Economic Injury
Loans Only):
Texas: Sabine.
All other information in the original
declaration remains unchanged.
BILLING CODE 8025–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration # 14656 and # 14657]
Georgia Disaster Number GA–00066
U.S. Small Business
Administration.
ACTION: Amendment 1.
AGENCY:
This is an amendment of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Georgia (FEMA–4259–DR),
dated 02/26/2016.
Incident: Severe Storms and Flooding.
Incident Period: 12/22/2015 through
01/13/2016.
Effective Date: 03/28/2016.
Physical Loan Application Deadline
Date: 04/26/2016.
Economic Injury (EIDL) Loan
Application Deadline Date: 11/28/2016.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster
declaration for Private Non-Profit
organizations in the State of Georgia,
dated 02/26/2016, is hereby amended to
include the following areas as adversely
affected by the disaster.
Primary Counties:
Union.
SUMMARY:
E:\FR\FM\04APN1.SGM
04APN1
Agencies
[Federal Register Volume 81, Number 64 (Monday, April 4, 2016)]
[Notices]
[Pages 19275-19282]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-07515]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77469; File No. SR-CHX-2016-03]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Adopt Article 20, Rule 13 To Implement the Regulation NMS Plan To
Implement a Tick Size Pilot Program (``Plan'')
March 29, 2016.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on March 28, 2016, the Chicago Stock Exchange, Inc. (``CHX'' or
the ``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.
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\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 adopt Article 20, Rule 13 to implement the
Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan'').
Specifically, the Exchange proposes to adopt Article 20, Rule 13 to set
forth the requirements for the collection and transmission of data
pursuant to Appendices B and C of the Plan. The proposed rule change is
substantially similar to proposed rule changes recently approved or
published by the Commission by the Bats BZX Exchange, Inc. f/k/a BATS
Exchange, Inc. (``BZX'') to adopt BZX Rule 11.27(b) \3\ and by the
Financial Industry Regulatory Authority (``FINRA'') to adopt FINRA Rule
6191(b),\4\ both of which also sets forth requirements for the
collection and transmission of data pursuant to Appendices B and C of
the Plan. Therefore, the Exchange has designated this proposal as
``non-controversial'' and provided the Commission with the notice
required by Rule 19b-4(f)(6)(iii) under the Act.\5\
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\3\ See Securities Exchange Act Release Nos. 77105 (February 10,
2016), 81 FR 8112 (February 17, 2016) (order approving SR-BATS-2015-
102); and 77310 (March 7, 2016) (notice for comment and immediate
effectiveness of SR-BATS-2016-27).
\4\ See Securities Exchange Act Release No. 77164 (February 17,
2016), 81 FR 9043 (February 23, 2016) (order approving SR-FINRA-
2015-048).
\5\ 17 CFR 240.19b-4(f)(6)(iii).
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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.
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 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
On August 25, 2014, NYSE Group, Inc., on behalf of the Exchange,
Bats BYX Exchange, Inc., BZX, Bats EDGA Exchange, Inc., Bats EDGX
Exchange, Inc., FINRA, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, the
Nasdaq Stock Market LLC, New York Stock Exchange LLC (``NYSE''), NYSE
MKT LLC, and NYSE Arca, Inc. (collectively ``Plan Participants''),
filed with the Commission, pursuant to Section 11A of the Act \6\ and
Rule 608 of Regulation NMS thereunder,\7\ the Plan to Implement a Tick
Size Pilot Program (``Pilot'').\8\ The Plan Participants filed the Plan
to comply with an order issued by the Commission on June 24, 2014.\9\
The Plan \10\ was published for comment in the Federal Register on
November 7, 2014, and approved by the Commission, as modified, on May
6, 2015.\11\
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\6\ 15 U.S.C. 78k-1.
\7\ 17 CFR 242.608.
\8\ See Letter from Brendon J. Weiss, Vice President,
Intercontinental Exchange, Inc., to Secretary, Commission, dated
August 25, 2014.
\9\ See Securities Exchange Act Release No. 72460 (June 24,
2014), 79 FR 36840 (June 30, 2014).
\10\ Unless otherwise specified, capitalized terms used in this
rule filing are based on the defined terms of the Plan.
\11\ See Securities Exchange Act Release No. 74892 (May 6,
2015), 80 FR 27513 (May 13, 2015) (``Approval Order'').
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The Plan is designed to allow the Commission, market participants,
and the public to study and assess the impact of increment conventions
on the liquidity and trading of the common stocks of small-
capitalization companies. Each Plan Participant is required to comply,
and to enforce compliance by its members, as applicable, with the
provisions of the Plan. As is described more fully below, the proposed
rules would require CHX Participants \12\ to comply with the applicable
data collection requirements of the Plan.\13\
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\12\ A ``Participant'' is a ``member'' of the Exchange for
purposes of the Act. See CHX Article 1, Rule 1(s). For clarity, the
Exchange proposes to utilize the term ``CHX Participant'' when
referring to members of the Exchange and the term ``Plan
Participant'' when referring to Participants of the Plan.
\13\ The Exchange proposes Interpretations and Policies .11 to
proposed Article 20, Rule 13 to provide that the Rule shall be in
effect during a pilot period to coincide with the pilot period for
the Plan (including any extensions to the pilot period for the
Plan).
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The Pilot will include stocks of companies with $3 billion or less
in market capitalization, an average daily trading volume of one
million shares or less, and a volume weighted average price of at least
$2.00 for every trading day. The Pilot will consist of a control group
of approximately 1400 Pilot Securities and three test groups with 400
Pilot Securities in each (selected by a stratified random sampling
process).\14\ During the pilot, Pilot Securities in the control group
will be quoted at the current tick size increment of $0.01 per share
and will trade at the currently permitted increments. Pilot Securities
in the first test group (``Test Group One'') will be quoted in $0.05
minimum increments but will continue to trade at any price increment
that is currently permitted.\15\ Pilot Securities in the second test
group (``Test Group Two'') will be quoted in $0.05 minimum increments
and will trade at $0.05 minimum increments subject to a midpoint
exception, a retail investor order exception, and a negotiated trade
[[Page 19276]]
exception.\16\ Pilot Securities in the third test group (``Test Group
Three'') will be subject to the same quoting and trading increments as
Test Group Two and also will be subject to the ``Trade-at'' requirement
to prevent price matching by a market Plan Participant that is not
displaying at a Trading Center's ``Best Protected Bid'' or ``Best
Protected Offer,'' unless an enumerated exception applies.\17\ In
addition to the exceptions provided under Test Group Two, an exception
for Block Size orders and exceptions that mirror those under Rule 611
of Regulation NMS \18\ will apply to the Trade-at requirement.
---------------------------------------------------------------------------
\14\ See Section V of the Plan for identification of Pilot
Securities, including criteria for selection and grouping.
\15\ See Section VI(B) of the Plan.
\16\ See Section VI(C) of the Plan.
\17\ See Section VI(D) of the Plan.
\18\ 17 CFR 242.611.
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In approving the Plan, the Commission noted that the Trading Center
data reporting requirements would facilitate an analysis of the effects
of the Pilot on liquidity (e.g., transaction costs by order size),
execution quality (e.g., speed of order executions), market maker
activity, competition between trading venues (e.g., routing frequency
of market orders), transparency (e.g., choice between displayed and
hidden orders), and market dynamics (e.g., rates and speed of order
cancellations).\19\ The Commission noted that Market Maker
profitability data would assist the Commission in evaluating the
effect, if any, of a widened tick increment on market marker profits
and any corresponding changes in the liquidity of small-capitalization
securities.\20\
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\19\ See Approval Order, 80 FR at 27543.
\20\ Id.
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Compliance With the Data Collection Requirements of the Plan
The Plan contains requirements for collecting and transmitting data
to the Commission and to the public.\21\ Specifically, Appendix B.I of
the Plan (Market Quality Statistics) requires Trading Centers \22\ to
submit a variety of market quality statistics, including information
about an order's original size, whether the order was displayable or
not, the cumulative number of orders, the cumulative number of shares
of orders, and the cumulative number of shares executed within specific
time increments, e.g., from 30 seconds to less than 60 seconds after
the time of order receipt. This information shall be categorized by
security, order type, original order size, hidden status, and coverage
under Rule 605.\23\ Appendix B.I of the Plan also contains additional
requirements for market orders and marketable limit orders, including
the share-weighted average effective spread for executions of orders;
the cumulative number of shares of orders executed with price
improvement; and, for shares executed with price improvement, the
share-weighted average amount per share that prices were improved.
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\21\ The Exchange is also required by the Plan to establish,
maintain, and enforce written policies and procedures that are
reasonably designed to comply with applicable quoting and trading
requirements specified in the Plan. The Exchange intends to
separately propose rules that would require compliance by its CHX
Participants with the applicable quoting and trading requirements
specified in the Plan, and has reserved paragraph (a) of proposed
Article 20, Rule 13 for such rules.
\22\ The Plan incorporates the definition of a ``Trading
Center'' from Rule 600(b)(78) of Regulation NMS. Regulation NMS
defines a ``Trading Center'' as ``a national securities exchange or
national securities association that operates an SRO trading
facility, an alternative trading system, an exchange market maker,
an OTC market maker, or any other broker or dealer that executes
orders internally by trading as principal or crossing orders as
agent.'' See 17 CFR 242.600(b).
\23\ 17 CFR 242.605.
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Appendix B.II of the Plan (Market and Marketable Limit Order Data)
requires Trading Centers to submit information relating to market
orders and marketable limit orders, including the time of order
receipt, order type, the order size, the National Best Bid and National
Best Offer (``NBBO'') quoted price, the NBBO quoted depth, the average
execution price-share-weighted average, and the average execution time-
share-weighted average.
The Plan requires Appendix B.I and B.II data to be submitted by
Plan Participants that operate a Trading Center, and by members of the
Plan Participants that operate Trading Centers. The Plan provides that
each Plan Participant that is the Designated Examining Authority
(``DEA'') for a member of the Plan Participant that operates a Trading
Center shall collect such data in a pipe delimited format, beginning
six months prior to the Pilot Period and ending six months after the
end of the Pilot Period. The Plan also requires the Plan Participant,
operating as DEA, to transmit this information to the SEC within 30
calendar days following month end.
The Exchange is therefore proposing Article 20, Rule 13(b) to set
forth the requirements for the collection and transmission of data
pursuant to Appendices B and C of the Plan. Proposed Article 20, Rule
13(b) is substantially similar to proposed rule changes by BZX that
were recently approved or published by the Commission to adopt BZX Rule
11.27(b) which also sets forth requirements for the collection and
transmission of data pursuant to Appendices B and C of the Plan; \24\
provided the following:
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\24\ See supra note 3.
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Proposed Article 20, Rule 13(b)(2)(A) is similar to
proposed rule changes by FINRA that were recently approved or published
by the Commission to adopt FINRA Rule 6191(b)(2).\25\
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\25\ Prior to the operative date of the proposed rule change,
the Exchange will enter into a Tick Size Pilot Program Regulatory
Services Agreement with FINRA (``TSPP RSA''), pursuant to which
FINRA will consume and process certain data elements required under
Appendices B.I, B.II, B.IV and C.I of the Plan that would either be
submitted to FINRA by the Exchange (for Appendices B.I and B.II
data) or by CHX Participants directly (for Appendices B.IV and C.I
data). In turn, FINRA would provide the Exchange with processed data
in a form as required for submission to the SEC under the Plan. At
all times, the Exchange will maintain its data reporting obligations
pursuant to the Plan.
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Proposed Article 20, Rule 13(b)(3)(B) is similar to
approved BZX Rule 11.27(b)(3)(B), except that the Exchange is also
proposing to require CHX Participant Market Makers for which the
Exchange is the DEA to transmit Appendix B.IV data to FINRA directly,
as discussed below.\26\
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\26\ See id.
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Proposed Article 20, Rule 13(b)(4)(B) is similar to
approved BZX Rule 11.27(b)(4)(B), except that the Exchange is also
proposing to require CHX Participant Market Makers for which the
Exchange is the DEA to transmit Appendix C.I data to FINRA directly, as
discussed below.\27\
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\27\ See id.
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Appendices B.I and B.II
Proposed Article 20, Rule 13(b)(1) requires that a CHX Participant
that operates a Trading Center shall establish, maintain and enforce
written policies and procedures that are reasonably designed to comply
with the data collection and transmission requirements of Items I and
II to Appendix B of the Plan, and a CHX Participant that is a Market
Maker shall establish, maintain and enforce written policies and
procedures that are reasonably designed to comply with the data
collection and transmission requirements of Item IV of Appendix B of
the Plan and Item I of Appendix C of the Plan.
The Exchange notes that the data requirements of Items I and II to
Appendix B of the Plan necessitates that the Exchange adopt two sets of
rules: One for CHX Participants that operate Trading Centers subject to
the Plan for which the Exchange is the DEA (i.e., proposed Article 20,
Rule 13(b)(2)(A)) and another for the Trading Center operated by the
Exchange (i.e., proposed Article 20, Rule 13(b)(2)(B)), as discussed
below.
[[Page 19277]]
Certain CHX Participant Trading Centers
Similar to FINRA Rule 6191(b)(2)(A)(i), proposed Article 20, Rule
13(b)(2)(A)(i) requires that a CHX Participant that operates a Trading
Center subject to the Plan, and for which CHX is the DEA, shall collect
and transmit to the Exchange the data described in Items I and II of
Appendix B of the Plan with respect to each Pre-Pilot Data Collection
Security for the period beginning six months prior to the Pilot Period
through the trading day immediately preceding the Pilot Period; and
each Pilot Security for the period beginning on the first day of the
Pilot Period through six months after the end of the Pilot Period.\28\
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\28\ As of the date of this filing, the Exchange has three CHX
Participants that would be subject to the requirements of proposed
paragraph (b)(2)(A). All three of these firms are also members of
FINRA.
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Section IV of the Plan (Policies and Procedures) provides that each
Plan Participant that is the DEA of a member of a Plan Participant
operating a Trading Center is required to develop appropriate policies
and procedures for collecting and reporting the data described in Items
I and II of Appendix B, as applicable, to the DEA Plan Participant. The
Exchange has determined that all of the data required by Appendix B.I
and B.II to the Plan currently is reported to the Exchange pursuant to
CHX Article 11, Rule 3, which requires CHX Participants for which the
Exchange is the DEA, among others, to record certain order and
execution information into an electronic system designated by the
Exchange. In the interest of increasing the efficiency of the data
collection process and the consistency of that data to be collected
under the Plan, the Exchange proposes to use Article 11, Rule 3 as the
vehicle through which Trading Centers must comply with their reporting
obligations pursuant to Appendix B.I and B.II of the Plan.
Accordingly, similar to FINRA Rule 6191(b)(2)(A)(ii), proposed
Article 20, Rule 13(b)(2)(A)(ii) provides that each CHX Participant
that operates a Trading Center subject to the Plan, and for which CHX
is the DEA, shall meet the data collection and reporting requirements
in Items I and II of Appendix B through their submission of data
elements required pursuant to Article 11, Rule 3, as well as the
following additional data elements, when an order in a Pilot Security
or Pre-Pilot Data Collection Security is received or originated: (a)
Whether the CHX Participant is a Trading Center in either the Pilot
Security or the Pre-Pilot Data Collection Security; and (b) whether the
order is routable.
Moreover, similar to FINRA Rule 6191(b)(2)(A)(iii), proposed CHX
Article 20, Rule 13(b)(2)(A)(iii) provides that when an order in a
Pilot Security or Pre-Pilot Data Collection Security is executed, each
CHX Participant subject to this paragraph (b)(2)(A) shall comply with
its collection and transmission obligations under Items I and II of
Appendix B to the Plan and this Rule by identifying whether CHX
Participant is relying upon the Retail Investor Order exception with
respect to the execution of the order.
As an initial matter, only those CHX Participants that operate a
Trading Center and for which the Exchange is the DEA are required to
make any changes to their Article 11, Rule 3 data recording. CHX
Participants that do not operate Trading Centers or that have another
self-regulatory organization as DEA will be permitted to leave the new
fields blank. CHX Participants that operate Trading Centers and which
the Exchange is the DEA will be required to indicate their status as a
Trading Center for new orders involving Pre-Pilot Data Collection
Securities and Pilot Securities.\29\
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\29\ The Exchange notes that CHX Participants are already
required to record the display size of an order, pursuant to the CHX
Article 11, Rule 3(c)(5) and (16), and thus, the Exchange already
captures information required by Appendix B regarding hidden and
displayed size.
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Moreover, the proposed rule change adds a new requirement to
capture whether an order in a Pre-Pilot Data Collection Security or a
Pilot Security received by a CHX Participant that operates a Trading
Center and for which the Exchange is the DEA is routable \30\ and
whether the CHX Participant is relying on the Retail Investor Order
exception in the Plan with respect to the execution of the order. These
additional fields are necessary so that the Exchange can capture the
information required by Item II(n) and II(o) of Appendix B to the Plan.
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\30\ The Exchange notes that it currently requires CHX
Participants for which the Exchange is the DEA to record whether an
order received by the CHX Participant is routable, pursuant to CHX
Article 11, Rule 3(c)(27), which provides that the Exchange may
require CHX Participants to record ``such other information as the
Exchange may from time to time require.''
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Similar to FINRA Rule 6191(b)(2)(A)(iv), proposed Article 20, Rule
13(b)(2)(A)(iv) provides that each CHX Participant that operates a
Trading Center subject to the Tick Size Pilot Program, and for which
the Exchange is the DEA, shall submit data required under this
paragraph (b)(2)(A) by 8:00 a.m. CST the calendar day following the
reportable event.
As set forth in Section VII of the Plan (Collection of Pilot Data)
and similar to FINRA Rule 6191(b)(2)(B), proposed Article 20, Rule
13(b)(2)(A)(v) provides that the Exchange shall collect and transmit to
the SEC the data described in Items I and II of Appendix B of the Plan
and collected pursuant to this paragraph (b)(2)(A).\31\ The Exchange
shall transmit such data to the SEC in a pipe delimited format, on a
disaggregated basis by Trading Center, within 30 calendar days
following month end. Also, the Exchange shall make such data publicly
available on the CHX Web site on a monthly basis at no charge and shall
not identify the Trading Center that generated the data.
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\31\ See supra note 25.
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CHX Trading Center
Proposed Article 20, Rule 13(b)(2)(B)(i) provides that the Exchange
shall collect and transmit to the SEC the data described in Items I and
II of Appendix B of the Plan relating to trading activity in Pre-Pilot
Securities and Pilot Securities on a Trading Center operated by the
Exchange. The Exchange shall transmit such data to the SEC in a pipe
delimited format, on a disaggregated basis by Trading Center, within 30
calendar days following month end for: (i) Each Pre-Pilot Data
Collection Security for the period beginning six months prior to the
Pilot Period through the trading day immediately preceding the Pilot
Period; and (ii) each Pilot Security for the period beginning on the
first day of the Pilot Period through six months after the end of the
Pilot Period. The Exchange also shall make such data publicly available
on the Exchange Web site on a monthly basis at no charge and will not
identify the CHX Participant that generated the data.
Appendix B.IV
Appendix B.IV (Daily Market Maker Participation Statistics)
requires a Plan Participant to collect data related to Market Maker
participation from each Market Maker \32\ engaging in trading activity
on a Trading Center operated by the Plan Participant. The Exchange is
therefore proposing Article 20, Rule 13(b)(3) to gather data about a
Market Maker's participation in Pilot Securities and Pre-Pilot Data
Collection Securities. Proposed Article 20, Rule 13(b)(3)(A) provides
that a CHX Participant that is
[[Page 19278]]
a Market Maker shall collect and transmit to their DEA data relating to
Item IV of Appendix B of the Plan with respect to activity conducted on
any Trading Center in Pilot Securities and Pre-Pilot Data Collection
Securities in furtherance of its status as a registered Market Maker,
including a Trading Center that executes trades otherwise than on a
national securities exchange, for transactions that have settled or
reached settlement date. The proposed rule requires Market Makers to
transmit such data in a format required by their DEA, by 12:00 p.m. EST
on T+4 for: (i) Transactions in each Pre-Pilot Data Collection Security
for the period beginning six months prior to the Pilot Period through
the trading day immediately preceding the Pilot Period; and (ii) for
transactions in each Pilot Security for the period beginning on the
first day of the Pilot Period through six months after the end of the
Pilot Period.
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\32\ The Plan defines a Market Maker as ``a dealer registered
with any self-regulatory organization, in accordance with the rules
thereof, as (i) a market maker or (ii) a liquidity provider with an
obligation to maintain continuous, two-sided trading interest.''
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However, the Exchange understands that some CHX Participants may
utilize a DEA that is not a Plan Participant to the Plan and that their
DEA would not be subject to the Plan's data collection requirements. In
such case, a DEA that is not a Plan Participant of the Plan would not
be required to collect the required data and may not establish
procedures for CHX Participants for which it acts as DEA to report the
data required under subparagraphs (b)(3)(A) of proposed Article 20,
Rule 13(b)(3)(A) and in accordance with Item IV of Appendix B of the
Plan.
Moreover, to facilitate the linking of relevant transactions across
various Trading Centers by a CHX Participant Market Maker, the Exchange
proposes to require CHX Participants Market Makers for which the
Exchange is the DEA to submit data relating to Item IV of Appendix B to
FINRA directly.\33\
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\33\ See supra note 25.
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Therefore, the Exchange proposes to adopt subparagraph (b)(3)(B) to
proposed Article 20, Rule 13 to require a CHX Participant that is a
Market Maker whose DEA (i) is not a Plan Participant to the Plan or
(ii) is the Exchange to transmit the data collected pursuant to
paragraph (3)(A) of proposed Article 20, Rule 13 to FINRA, which is a
Plan Participant to the Plan and is to collect data relating to Item IV
of Appendix B of the Plan on behalf of the Plan Participants. For
Market Makers for which it is the DEA, FINRA issued a Market Maker
Transaction Data Technical Specification to collect data on Pre-Pilot
Data Collection Securities and Pilot Securities from Trading Centers to
comply with the Plan's data collection requirements.\34\
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\34\ CHX Participant Market Makers that would be obligated to
submit data relating to Item IV of Appendix B to FINRA directly
should refer to the Market Maker Transaction Data Technical
Specification on the FINRA Web site at https://www.finra.org/sites/default/files/market-maker-transaction-data-tech-specs.pdf.
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Proposed Article 20, Rule 13(b)(3)(C) provides that the Exchange
shall transmit the data collected by the DEA or FINRA pursuant to
proposed Article 20, Rule 13(b)(3)(A) and (B) above relating to Market
Maker activity on a Trading Center operated by the Exchange to the SEC
in a pipe delimited format within 30 calendar days following month end.
The Exchange shall also make such data publicly available on the
Exchange Web site on a monthly basis at no charge and shall not
identify the Trading Center that generated the data.
Appendix C.I
Appendix C.I (Market Maker Profitability) requires a Plan
Participant to collect data related to Market Maker profitability from
each Market Maker for which it is the DEA. Specifically, the Plan
Participant is required to collect the total number of shares of orders
executed by the Market Maker; the raw Market Maker realized trading
profits, and the raw Market Maker unrealized trading profits. Data
shall be collected for dates starting six months prior to the Pilot
Period through six months after the end of the Pilot Period. This data
shall be collected on a monthly basis, to be provided in a pipe
delimited format to the Plan Participant, as DEA, within 30 calendar
days following month end. Appendix C.II (Aggregated Market Maker
Profitability) requires the Plan Participant, as DEA, to aggregate the
Appendix C.I data, and to categorize this data by security as well as
by the control group and each Test Group. That aggregated data shall
contain information relating to total raw Market Maker realized trading
profits, volume-weighted average of raw Market Maker realized trading
profits, the total raw Market Maker unrealized trading profits, and the
volume-weighted average of Market Maker unrealized trading profits.
The Exchange is therefore proposing Article 20, Rule 13(b)(4) to
set forth the requirements for the collection and transmission of data
pursuant to Appendix C.I of the Plan. Proposed Article 20, Rule
13(b)(4)(A) requires that a CHX Participant that is a Market Maker
shall collect and transmit to their DEA the data described in Item I of
Appendix C of the Plan with respect to executions in Pilot Securities
that have settled or reached settlement date that were executed on any
Trading Center. The proposed rule also requires CHX Participants to
provide such data in a format required by their DEA by 12 p.m. EST on
T+4 for executions during and outside of Regular Trading Hours in each:
(i) Pre-Pilot Data Collection Security for the period beginning six
months prior to the Pilot Period through the trading day immediately
preceding the Pilot Period; and (ii) Pilot Security for the period
beginning on the first day of the Pilot Period through six months after
the end of the Pilot Period.
For the same reasons set forth above for subparagraph (b)(3)(B) to
proposed Article 20, Rule 13, the Exchange proposes to adopt
subparagraph (b)(4)(B) to proposed Article 20, Rule 13 to require a CHX
Participant that is a Market Maker whose DEA (i) is not a Plan
Participant to the Plan or (ii) the Exchange to transmit the data
collected pursuant to paragraph (4)(A) of Article 20, Rule 13 to FINRA
directly. As stated above, FINRA is a Plan Participant to the Plan and
is to collect data relating to Item I of Appendix C of the Plan on
behalf of the Plan Participants. For Market Makers for which it is the
DEA, FINRA issued a Market Maker Transaction Data Technical
Specification to collect data on Pre-Pilot Data Collection Securities
and Pilot Securities from Trading Centers to comply with the Plan's
data collection requirements.\35\
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\35\ Id.
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Appendix B.III
The Exchange is also adopting a rule setting forth the manner in
which Market Maker participation will be calculated. Item III of
Appendix B of the Plan requires each Plan Participant that is a
national securities exchange to collect daily Market Maker registration
statistics categorized by security, including the following
information: (i) Ticker symbol; (ii) the Plan Participant exchange;
(iii) number of registered market makers; and (iv) the number of other
registered liquidity providers. Therefore, the Exchange proposes to
adopt proposed Article 20, Rule 13(b)(5) providing that the Exchange
shall collect and transmit to the SEC the data described in Item III of
Appendix B of the Plan relating to daily Market Maker registration
statistics in a pipe delimited format within 30 calendar days following
month end for: (i) Transactions in each Pre-Pilot Data Collection
Security for the period beginning six months prior to the Pilot Period
through the trading day immediately preceding the Pilot Period;
[[Page 19279]]
and (ii) transactions in each Pilot Security for the period beginning
on the first day of the Pilot Period through six months after the end
of the Pilot Period.
The Exchange is also proposing, through Interpretations and
Policies, to clarify other aspects of the data collection
requirements.\36\ Proposed Interpretations and Policies .02 relates to
the use of the retail investor order flag for purposes of Appendix
B.II(n) reporting. The Plan currently states that market and marketable
limit orders shall include a ``yes/no'' field relating to the Retail
Investor Order flag. The Exchange is proposing Interpretations and
Policies .02 to clarify that, for purposes of the reporting requirement
in Appendix B.II(n), a Trading Center shall report ``y'' to their DEA
where it is relying upon the Retail Investor Order exception to Test
Groups Two and Three, and ``n'' for all other instances.\37\ The
Exchange believes that requiring the identification of a Retail
Investor Orders only where the exception may apply (i.e., Pilot
Securities in Test Groups Two and Three) is consistent with Appendix
B.II(n).
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\36\ The Exchange is also proposing Interpretations and Policies
.01 to Article 20, Rule 13 to clarify that certain enumerated terms
used throughout Article 20, Rule 13 shall have the same meaning as
set forth in the Plan.
\37\ FINRA, on behalf of the Plan Participants submitted a
letter to Commission requesting exemption from certain provisions of
the Plan related to data collection. See letter from Marcia E.
Asquith, Senior Vice President and Corporate Secretary, FINRA dated
December 9, 2015 to Robert W. Errett, Deputy Secretary, Commission
(``Exemption Request''). The Commission, pursuant to its authority
under Rule 608(e) of Regulation NMS, granted BZX a limited exemption
from the requirement to comply with certain provisions of the Plan
as specified in the letter and noted herein. See letter from David
Shillman, Associate Director, Division of Trading and Markets,
Commission to Eric Swanson, General Counsel, BZX, dated February 10,
2016 (``Exemption Letter'').
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Interpretations and Policies .03 requires that CHX Participants
populate a field to identify to their DEA whether an order is affected
by the bands in place pursuant to the National Market System Plan to
Address Extraordinary Market Volatility.\38\ Pursuant to the Limit-Up
Limit-Down Plan, between 9:30 a.m. and 4:00 p.m., the Securities
Information Processor (``SIP'') calculates a lower price band and an
upper price band for each NMS stock. These price bands represent a
specified percentage above or below the stock's reference price, which
generally is calculated based on reported transactions in that stock
over the preceding five minutes. When one side of the market for an
individual security is outside the applicable price band, the SIP
identifies that quotation as non-executable. When the other side of the
market reaches the applicable price band (e.g., the offer reaches the
lower price band), the security enters a Limit State. The stock would
exit a Limit State if, within 15 seconds of entering the Limit State,
all Limit State Quotations were executed or canceled in their entirety.
If the security does not exit a Limit State within 15 seconds, then the
primary listing exchange declares a five-minute trading pause, which
would be applicable to all markets trading the security.
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\38\ See National Market System Plan to Address Extraordinary
Market Volatility, Securities Exchange Act Release No. 67091 (May
31, 2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (``Limit-Up
Limit-Down Plan'').
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The Exchange and the other Plan Participants have determined that
it is appropriate to create a new flag for reporting orders that are
affected by the Limit-Up Limit-Down bands. Accordingly, a Trading
Center shall report a value of ``Y'' to their DEA when the ability of
an order to execute has been affected by the Limit-Up Limit-Down bands
in effect at the time of order receipt. A Trading Center shall report a
value of ``N'' to their DEA when the ability of an order to execute has
not been affected by the Limit-Up Limit-Down bands in effect at the
time of order receipt.
Interpretations and Policies .03 also requires, for securities that
may trade in a foreign market, that the Plan Participant indicate
whether the order was handled domestically, or routed to a foreign
venue. Accordingly, the Plan Participant will indicate, for purposes of
Appendix B.I, whether the order was: (1) Fully executed domestically,
or (2) fully or partially executed on a foreign market. For purposes of
Appendix B.II, the Plan Participant will classify all orders in
securities that may trade in a foreign market Pilot and Pre-Pilot
Securities as: (1) Directed to a domestic venue for execution; (2) may
only be directed to a foreign venue for execution; or (3) was fully or
partially directed to a foreign venue at the discretion of the CHX
Participant. The Exchange believes that this proposed flag will better
identify orders in securities that may trade in a foreign market, as
such orders that were routed to foreign venues would not be subject to
the Plan's quoting and trading requirements, and could otherwise
compromise the integrity of the data.
Interpretations and Policies .04 relates to the time ranges
specified in Appendix B.I.a(14), B.I.a(15), B.I.a(21) and
B.I.a(22).\39\ The Exchange and the other Plan Participants have
determined that it is appropriate to change the reporting times in
these provisions to require more granular reporting for these
categories. Accordingly, the Exchange proposes to add Appendix
B.I.a(14A), which will require Trading Centers to report the cumulative
number of shares of orders executed from 100 microseconds to less than
1 millisecond after the time of order receipt. Appendix B.I.a(15) will
be changed to require the cumulative number of shares of orders
executed from 1 millisecond to less than 100 milliseconds after the
time of order receipt. The Exchange also proposes to add Appendix
B.I.a(21A), which will require Trading Centers to report the cumulative
number of shares of orders canceled from 100 microseconds to less than
1 millisecond after the time of order receipt. Appendix B.I.a(22) will
be changed to require the cumulative number of shares of orders
canceled from 1 millisecond to less than 100 milliseconds after the
time of order receipt. The Exchange believes that these new reporting
requirements will contribute to a meaningful analysis of the Pilot by
producing more granular data on these points.\40\
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\39\ Specifically, Appendix B.I.a(14) requires reporting of the
cumulative number of shares of orders executed from 0 to less than
100 microseconds after the time of order receipt; Appendix B.I.a(15)
requires reporting of the cumulative number of shares of orders
executed from 100 microseconds to less than 100 milliseconds after
the time of order receipt; Appendix B.I.a(21) requires reporting of
the cumulative number of shares of orders cancelled from 0 to less
than 100 microseconds after the time of order receipt; and Appendix
B.I.a(22) requires reporting of the cumulative number of shares of
orders cancelled from 100 microseconds to less than 100 milliseconds
after the time of order receipt.
\40\ The Commission granted BZX an exemption from Rule 608(c)
related to this provision. See Exemption Letter, supra note 37.
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Interpretations and Policies .05 relates to the relevant
measurement for purposes of Appendix B.I.a(31)-(33) reporting.
Currently, the Plan states that this data shall be reported as of the
time of order execution. The Exchange and the other Plan Participants
believe that this information should more properly be captured at the
time of order receipt as evaluating share-weighted average prices at
the time of order receipt is more consistent with the goal of observing
the effect of the Pilot on the liquidity of Pilot Securities. The
Exchange is therefore proposing to make this change through
Interpretations and Policies .05.\41\ This change will make these
provisions consistent with the remainder of the statistics in Appendix
B.I.a, which are all based on order receipt.
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\41\ Id.
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Interpretations and Policies .06 addresses the status of not-held
and auction orders for purposes of Appendix
[[Page 19280]]
B.I reporting. Currently, Appendix B.I sets forth eight categories of
orders, including market orders, marketable limit orders, and inside-
the-quote resting limit orders, for which daily market quality
statistics must be reported. Currently, Appendix B.I does not provide a
category for not held orders, clean cross orders, auction orders, or
orders received when the NBBO is crossed. The Exchange and the other
Plan Participants have determined that it is appropriate to include
separate categories for these orders types for purposes of Appendix B
reporting. The Exchange is therefore proposing Interpretations and
Policies .06 to provide that not held orders shall be included as an
order type for purposes of Appendix B reporting, and shall be assigned
the number (18). Clean cross orders shall be included as an order type
for purposes of Appendix B reporting, and shall be assigned the number
(19); auction orders shall be included an as order type for purposes of
Appendix B reporting, and shall be assigned the number (20); and orders
that cannot otherwise be classified, including, for example, orders
received when the NBBO is crossed shall be included as an order type
for purposes of Appendix B reporting, and shall be assigned the number
(21). All of these orders already are included in the scope of Appendix
B; however, without this proposed change, these order types would be
categorized with other orders, such as regular held orders, that should
be able to be fully executed upon receipt, which would compromise the
value of this data.
The Exchange is proposing Interpretations and Policies .07 to
clarify the scope of the Plan as it relates to CHX Participants that
only execute orders limited purposes. Specifically, the Exchange and
the other Plan Participants believe that a CHX Participant that only
executes orders otherwise than on a national securities exchange for
the purpose of: (1) Correcting a bona fide error related to the
execution of a customer order; (2) purchasing a security from a
customer at a nominal price solely for purposes of liquidating the
customer's position; or (3) completing the fractional share portion of
an order \42\ shall not be deemed a Trading Center for purposes of
Appendix B to the Plan. The Exchange is therefore proposing
Supplementary Material .09 to make this clarification.
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\42\ The Exchange notes that where a CHX Participant purchases a
fractional share from a customer, the Trading Center that executes
the remaining whole shares of that customer order would subject to
subject to Appendix B of the Plan.
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The Exchange is proposing Interpretations and Policies .08 to
clarify that, for purposes of the Plan, Trading Centers must begin the
data collection required pursuant to Appendix B.I.a(1) through B.II.(y)
of the Plan and Item I of Appendix C of the Plan on April 4, 2016.
While the Exchange or the CHX Participant's DEA will provide the
information required by Appendix B and C of the Plan during the Pilot
Period, the requirement that the Exchange or their DEA provide
information to the SEC within 30 days following month end and make such
data publicly available on its Web site pursuant to Appendix B and C
shall commence six months prior to the beginning of the Pilot
Period.\43\
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\43\ In its order approving the Plan, the SEC noted that the
Pilot shall be implemented within one year of the date of
publication of its order, e.g., by May 6, 2016. See Approval Order,
80 FR at 27545. However, on November 6, 2015, the SEC extended the
implementation date approximately five months to October 3, 2016.
See Securities Exchange Act Release No. 76382 (November 6, 2015), 80
FR 70284 (File No. 4-657) (Order Granting Exemption From Compliance
With the National Market System Plan To Implement a Tick Size Pilot
Program); see also Letter from Brendon J. Weiss, Co-Head, Government
Affairs, Intercontinental Exchange/NYSE, to Brent J. Fields,
Secretary, Commission, dated November 4, 2015 (requesting the data
collection period be extended until six months after the requisite
SRO rules are approved, and the implementation data of the Tick Size
Pilot until six months thereafter).
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The Exchange is proposing Interpretations and Policies .09 to
address the requirement in Appendix C.I(b) of the Plan that the
calculation of raw Market Maker realized trading profits utilize a last
in, first out (``LIFO'')-like method to determine which share prices
shall be used in that calculation. The Exchange and the other Plan
Participants believe that it is more appropriate to utilize a
methodology that yields LIFO-like results, rather than utilizing a
LIFO-like method, and the Exchange is therefore proposing
Interpretations and Policies .09 to make this change.\44\ The Exchange
is proposing that, for purposes of Item I of Appendix C, the Plan
Participants shall calculate daily Market Maker realized profitability
statistics for each trading day on a daily LIFO basis using reported
trade price and shall include only trades executed on the subject
trading day. The daily LIFO calculation shall not include any positions
carried over from previous trading days. For purposes of Item I.c of
Appendix C, the Plan Participants shall calculate daily Market Maker
unrealized profitability statistics for each trading day on an average
price basis. Specifically, the Plan Participants must calculate the
volume weighted average price of the excess (deficit) of buy volume
over sell volume for the current trading day using reported trade
price. The gain (loss) of the excess (deficit) of buy volume over sell
volume shall be determined by using the volume weighted average price
compared to the closing price of the security as reported by the
primary listing exchange. In reporting unrealized trading profits, the
Plan Participant shall also report the number of excess (deficit)
shares held by the Market Maker, the volume weighted average price of
that excess (deficit) and the closing price of the security as reported
by the primary listing exchange used in reporting unrealized
profit.\45\
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\44\ Appendix C.I currently requires Market Maker profitability
statistics to include (1) the total number of shares of orders
executed by the Market Maker; (2) raw Market Maker realized trading
profits, which is the difference between the market value of Market
Maker shares and the market value of Market Maker purchases, using a
LIFO-like method; and (3) raw Market Maker unrealized trading
profits, which is the difference between the purchase or sale price
of the end-of-day inventory position of the Market Maker and the
Closing Price. In the case of a short position, the Closing Price
from the sale will be subtracted; in the case of a long position,
the purchase price will be subtracted from the Closing Price.
\45\ The Commission granted BZX an exemption from Rule 608(c)
related to this provision. See Exemption Letter, supra note 37.
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Finally, the Exchange is proposing Interpretations and Policies .10
to address the securities that will be used for data collection
purposes prior to the commencement of the Pilot. The Exchange and the
other Plan Participants have determined that it is appropriate to
collect data for a group of securities that is larger, and using
different quantitative thresholds, than the group of securities that
will be Pilot Securities. The Exchange is therefore proposing
Interpretations and Policies .10 to define ``Pre-Pilot Data Collection
Securities'' as the securities designated by the Plan Participants for
purposes of the data collection requirements described in Items I, II
and IV of Appendix B and Item I of Appendix C of the Plan for the
period beginning six months prior to the Pilot Period and ending on the
trading day immediately preceding the Pilot Period. The Plan
Participants shall compile the list of Pre-Pilot Data Collection
Securities by selecting all NMS stocks with a market capitalization of
$5 billion or less, a Consolidated Average Daily Volume (CADV) of 2
million shares or less and a closing price of $1 per share or more. The
market capitalization and the closing price thresholds shall be applied
to the last day of the Pre-Pilot measurement period, and the CADV
threshold shall be applied to the
[[Page 19281]]
duration of the Pre-Pilot measurement period. The Pre-Pilot measurement
period shall be the three calendar months ending on the day when the
Pre-Pilot Data Collection Securities are selected. The Pre-Pilot Data
Collection Securities shall be selected thirty days prior to the
commencement of the six-month Pre-Pilot Period. On the trading day that
is the first trading day of the Pilot Period through six months after
the end of the Pilot Period, the data collection requirements will
become applicable to the Pilot Securities only. A Pilot Security will
only be eligible to be included in a Test Group if it was a Pre-Pilot
Security.
Implementation Date
The proposed rule change will be operative on April 4, 2016.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \46\ in general, and furthers the objectives of Section
6(b)(5) of the Act \47\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest.
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\46\ 15 U.S.C. 78f(b).
\47\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that this proposal is consistent with the Act
because it implements and clarifies the provisions of the Plan, and is
designed to assist the Exchange in meeting its regulatory obligations
pursuant of the Plan. In approving the Plan, the SEC noted that the
Pilot was an appropriate, data-driven test that was designed to
evaluate the impact of a wider tick size on trading, liquidity, and the
market quality of securities of smaller capitalization companies, and
was therefore in furtherance of the purposes of the Act. The Exchange
believes that this proposal is in furtherance of the objectives of the
Plan, as identified by the SEC, and is therefore consistent with the
Act because the proposal implements and clarifies the requirements of
the Plan and applies specific obligations to CHX Participants in
furtherance of compliance with the Plan.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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. The Exchange
notes that the proposed rule change implements the provisions of the
Plan, and is designed to assist the Exchange in meeting its regulatory
obligations pursuant of the Plan. The Exchange also notes that the data
collection requirements for CHX Participants that operate Trading
Centers will apply equally to all such CHX Participants, as will the
data collection requirements for Market Makers.
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 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 \48\ and Rule 19b-4(f)(6) thereunder.\49\
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\48\ 15 U.S.C. 78s(b)(3)(A).
\49\ 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, or such shorter time as designated by the Commission.
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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \50\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \51\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay. The
Commission believes that waiver of the operative delay is consistent
with the protection of investors and the public interest because it
would allow the Exchange to implement the proposed amendments on April
4, 2016, the date upon which the data collection requirements of the
Plan become effective.\52\ Therefore, the Commission hereby waives the
operative delay and designates the proposal operative on April 4,
2016.\53\
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\50\ 17 CFR 240.19b-4(f)(6).
\51\ 17 CFR 240.19b-4(f)(6)(iii).
\52\ See Securities Exchange Act Release No. 76382 (November 6,
2015), 80 FR 70284 (File No. 4-657) (Order Granting Exemption From
Compliance With the National Market System Plan To Implement a Tick
Size Pilot Program).
\53\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 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:
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-CHX-2016-03 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-CHX-2016-03. 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
[[Page 19282]]
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
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-CHX-2016-03, and should be submitted on or before April
25, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\54\
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\54\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-07515 Filed 4-1-16; 8:45 am]
BILLING CODE 8011-01-P