Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Liquidity Program Until June 30, 2017, 93719-93720 [2016-30814]

Download as PDF Federal Register / Vol. 81, No. 245 / Wednesday, December 21, 2016 / Notices 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)(iii) of the Act 13 and subparagraph (f)(6) of Rule 19b–4 thereunder.14 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative for 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 15 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. In its filing with the Commission, the Exchange requests that the Commission waive the 30-day operative delay. The Exchange proposes that the new billing process become operative on December 1, 2016. Starting December 1, 2016, the Exchange will bill the market data fees separately and will continue to direct debit its members for all of the other fees that are covered under Rule 213, in each case for the previous month’s billing. The Exchange represents that waiver of the 30-day operative delay would allow it to conform its billing process similar to the process in place at the Nasdaq exchanges.16 The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission designates the proposed rule change operative upon filing.17 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 13 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission deems this requirement to have been met. 15 17 CFR 240.19b–4(f)(6)(iii). 16 See NASDAQ Phlx LLC Rule 909, The NASDAQ Stock Market LLC Rule 7007, NASDAQ Options Market LLC Rules at Chapter XV, Section 1, NASDAQ BX, Inc. Rule 7011 and BX Option Rules at Chapter XV, Section 1. 17 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). asabaliauskas on DSK3SPTVN1PROD with NOTICES 14 17 VerDate Sep<11>2014 18:38 Dec 20, 2016 Jkt 241001 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–ISE–2016–28 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–ISE–2016–28. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 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–ISE– 2016–28 and should be submitted on or before January 11, 2017. PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 93719 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2016–30686 Filed 12–20–16; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79586; File No. SR– NYSEArca–2013–107] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange’s Retail Liquidity Program Until June 30, 2017 December 16, 2016. On December 23, 2013, the Securities and Exchange Commission (‘‘Commission’’) issued an order pursuant to its authority under Rule 612(c) of Regulation NMS (‘‘Sub-Penny Rule’’) 1 that granted NYSE Arca, Inc. (‘‘Exchange’’) a limited exemption from the Sub-Penny Rule in connection with the operation of the Exchange’s Retail Liquidity Program (‘‘Program’’).2 The limited exemption was granted concurrently with the Commission’s approval of the Exchange’s proposal to adopt the Program for a one-year pilot term.3 The exemption was granted coterminous with the effectiveness of the pilot Program; both the pilot Program and exemption are scheduled to expire on December 31, 2016.4 18 17 CFR 200.30–3(a)(12). CFR 242.612(c). 2 See Securities Exchange Act Release No. 71176 (Dec. 23, 2013), 78 FR 79524 (Dec. 30, 2013) (SR– NYSEArca–2013–107) (‘‘Order’’). 3 See id. 4 The pilot term of the Program was originally scheduled to end on April 14, 2015, but the Exchange initially extended the term through September 30, 2015, see Securities Exchange Act Release No. 74572 (Mar. 24, 2015), 80 FR 16705 (Mar. 30, 2015) (NYSEArca–2015–22), and then, through various extensions, through December 31, 2016. See Securities Exchange Act Release Nos. 75994 (Sept. 28, 2015), 80 FR 59834 (Oct. 2, 2015) (SR–NYSEArca–2015–84), 77236 (Feb. 25, 2016), 81 FR 10943 (Mar. 2, 2016) (SR–NYSEArca–2016–30), 77425 (Mar. 23, 2016), 81 FR 17523 (Mar. 29, 2016) (SR–NYSEArca–2016–47), and 78601 (Aug. 17, 2016), 81 FR 57632 (Aug. 23, 2016) (SR–NYSEArca– 2016–113). Each time the pilot term of the Program was extended, the Commission also granted the Exchange’s request to extend the Sub-Penny exemption. See Securities Exchange Act Release Nos. 74609 (Mar. 30, 2015), 80 FR 18272 (Apr. 3, 2015); 76021 (Sept. 29, 2015), 80 FR 60207 (Oct. 5, 2015); 77437 (Mar. 24, 2016), 81 FR 17752 (Mar. 30, 2016); and 78677 (Aug. 25, 2016), 81 FR 60037 (Aug. 31, 2016). The current exemption expires December 31, 2016. 1 17 E:\FR\FM\21DEN1.SGM 21DEN1 93720 Federal Register / Vol. 81, No. 245 / Wednesday, December 21, 2016 / Notices The Exchange now seeks to extend the exemption until June 30, 2017.5 The Exchange’s request was made in conjunction with an immediately effective filing that extends the operation of the Program through the same date.6 In its request to extend the exemption, the Exchange notes that the participation in the Program has increased more recently. Accordingly, the Exchange has asked for additional time to allow itself and the Commission to analyze more robust data concerning the Program, which the Exchange committed to provide to the Commission.7 For this reason and the reasons stated in the Order originally granting the limited exemption, the Commission finds that extending the exemption, pursuant to its authority under Rule 612(c) of Regulation NMS, is appropriate in the public interest and consistent with the protection of investors. Therefore, it is hereby ordered that, pursuant to Rule 612(c) of Regulation NMS, the Exchange is granted a limited exemption from Rule 612 of Regulation NMS that allows it to accept and rank orders priced equal to or greater than $1.00 per share in increments of $0.001, in connection with the operation of its Retail Liquidity Program, until June 30, 2017. The limited and temporary exemption extended by this Order is subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the Federal securities laws must rest with the persons relying on the exemption that is the subject of this Order. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Brent J. Fields, Secretary. [FR Doc. 2016–30814 Filed 12–20–16; 8:45 am] asabaliauskas on DSK3SPTVN1PROD with NOTICES BILLING CODE 8011–01–P 5 See Letter from Martha Redding, Assistant Secretary, NYSE, to Brent J. Fields, Secretary, Securities and Exchange Commission, dated November 28, 2016. 6 See Securities Exchange Act Release No. 79495 (Dec. 7, 2016), 81 FR 90033 (Dec. 13, 2016) (SR– NYSEArca–2016–157). 7 See Order, supra note 2, 78 FR at 79529. 8 17 CFR 200.30–3(a)(83). VerDate Sep<11>2014 18:38 Dec 20, 2016 Jkt 241001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79570; File No. SR–FINRA– 2016–045] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rule 4554 Reporting Requirements for Alternative Trading Systems December 15, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 8, 2016, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b–4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change FINRA is proposing to amend Rule 4554 to require alternative trading systems (‘‘ATSs’’) to submit additional order information to FINRA. The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose FINRA proposes to amend Rule 4554 (Alternative Trading Systems— Recording and Reporting Requirements of Order and Execution Information for NMS Stocks) to require ATSs to provide additional order sequence information on reports submitted to the Order Audit Trail System (‘‘OATS’’). In May 2016, the SEC approved Rule 4554 to further enhance FINRA’s ability to reconstruct an ATS’s order book and better perform its order-based surveillance, which includes surveillance for layering, quote spoofing and mid-point pricing manipulation. To accomplish this, Rule 4554 requires ATSs to report order information for each order they receive in an NMS stock beyond that set forth in the OATS rules, such as order repricing events (e.g., changes to an order that is pegged to the National Best Bid or Offer (‘‘NBBO’’)) and order display and reserve size information.4 Rule 4554 sets forth four categories of reporting requirements: (1) Data to be reported by all ATSs at the time of order receipt; (2) data to be reported by all ATSs at the time of order execution; (3) data to be reported by ATSs that display subscriber orders; and (4) data specific to ATSs that are registered as ADF Trading Centers. Rule 4554(b) requires that all ATSs report eight categories of information at the time of order receipt, including the sequence number assigned to the order event by the ATS’s matching engine.5 4 See Securities Exchange Act Release No. 77798 (May 10, 2016), 81 FR 30395 (May 16, 2016) (SR– FINRA–2016–010). With the exception of the requirement for ATSs to report sequence numbers, Rule 4554 was implemented on November 7, 2016. See Regulatory Notice 16–28 (August 2016). FINRA delayed the implementation for the requirement to report sequence numbers until the requirement could be extended to apply to all OATS reports. See Securities Exchange Act Release No. 79289 (November 10, 2016), 81 FR 81202 (November 17, 2016) (Notice of Filing and Immediate Effectiveness of SR–FINRA–2016–041). 5 Rule 4554(b)(8). Rule 4554(b) also requires all ATSs, at the time of order receipt, to report: (1) Whether the ATS displays subscriber orders outside of the ATS and, if the ATS displays subscriber orders outside of the ATS, whether subscriber orders are displayed to subscribers only, or are distributed for publication in the consolidated quotation data; (2) whether the ATS is an ADF Trading Center as defined in FINRA Rule 6220; (3) whether the order can be routed away from the ATS for execution; (4) whether there are any counterparty restrictions on the order; (5) a unique identifier representing the specific order type other than market and limit orders that have no other special handling instructions; (6) the NBBO (or relevant reference price) in effect at the time of order receipt and the timestamp of when the ATS captured the effective NBBO (or relevant reference E:\FR\FM\21DEN1.SGM 21DEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 81, Number 245 (Wednesday, December 21, 2016)]
[Notices]
[Pages 93719-93720]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-30814]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79586; File No. SR-NYSEArca-2013-107]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting an 
Extension to Limited Exemption From Rule 612(c) of Regulation NMS in 
Connection With the Exchange's Retail Liquidity Program Until June 30, 
2017

December 16, 2016.
    On December 23, 2013, the Securities and Exchange Commission 
(``Commission'') issued an order pursuant to its authority under Rule 
612(c) of Regulation NMS (``Sub-Penny Rule'') \1\ that granted NYSE 
Arca, Inc. (``Exchange'') a limited exemption from the Sub-Penny Rule 
in connection with the operation of the Exchange's Retail Liquidity 
Program (``Program'').\2\ The limited exemption was granted 
concurrently with the Commission's approval of the Exchange's proposal 
to adopt the Program for a one-year pilot term.\3\ The exemption was 
granted coterminous with the effectiveness of the pilot Program; both 
the pilot Program and exemption are scheduled to expire on December 31, 
2016.\4\
---------------------------------------------------------------------------

    \1\ 17 CFR 242.612(c).
    \2\ See Securities Exchange Act Release No. 71176 (Dec. 23, 
2013), 78 FR 79524 (Dec. 30, 2013) (SR-NYSEArca-2013-107) 
(``Order'').
    \3\ See id.
    \4\ The pilot term of the Program was originally scheduled to 
end on April 14, 2015, but the Exchange initially extended the term 
through September 30, 2015, see Securities Exchange Act Release No. 
74572 (Mar. 24, 2015), 80 FR 16705 (Mar. 30, 2015) (NYSEArca-2015-
22), and then, through various extensions, through December 31, 
2016. See Securities Exchange Act Release Nos. 75994 (Sept. 28, 
2015), 80 FR 59834 (Oct. 2, 2015) (SR-NYSEArca-2015-84), 77236 (Feb. 
25, 2016), 81 FR 10943 (Mar. 2, 2016) (SR-NYSEArca-2016-30), 77425 
(Mar. 23, 2016), 81 FR 17523 (Mar. 29, 2016) (SR-NYSEArca-2016-47), 
and 78601 (Aug. 17, 2016), 81 FR 57632 (Aug. 23, 2016) (SR-NYSEArca-
2016-113). Each time the pilot term of the Program was extended, the 
Commission also granted the Exchange's request to extend the Sub-
Penny exemption. See Securities Exchange Act Release Nos. 74609 
(Mar. 30, 2015), 80 FR 18272 (Apr. 3, 2015); 76021 (Sept. 29, 2015), 
80 FR 60207 (Oct. 5, 2015); 77437 (Mar. 24, 2016), 81 FR 17752 (Mar. 
30, 2016); and 78677 (Aug. 25, 2016), 81 FR 60037 (Aug. 31, 2016). 
The current exemption expires December 31, 2016.

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[[Page 93720]]

    The Exchange now seeks to extend the exemption until June 30, 
2017.\5\ The Exchange's request was made in conjunction with an 
immediately effective filing that extends the operation of the Program 
through the same date.\6\ In its request to extend the exemption, the 
Exchange notes that the participation in the Program has increased more 
recently. Accordingly, the Exchange has asked for additional time to 
allow itself and the Commission to analyze more robust data concerning 
the Program, which the Exchange committed to provide to the 
Commission.\7\ For this reason and the reasons stated in the Order 
originally granting the limited exemption, the Commission finds that 
extending the exemption, pursuant to its authority under Rule 612(c) of 
Regulation NMS, is appropriate in the public interest and consistent 
with the protection of investors.
---------------------------------------------------------------------------

    \5\ See Letter from Martha Redding, Assistant Secretary, NYSE, 
to Brent J. Fields, Secretary, Securities and Exchange Commission, 
dated November 28, 2016.
    \6\ See Securities Exchange Act Release No. 79495 (Dec. 7, 
2016), 81 FR 90033 (Dec. 13, 2016) (SR-NYSEArca-2016-157).
    \7\ See Order, supra note 2, 78 FR at 79529.
---------------------------------------------------------------------------

    Therefore, it is hereby ordered that, pursuant to Rule 612(c) of 
Regulation NMS, the Exchange is granted a limited exemption from Rule 
612 of Regulation NMS that allows it to accept and rank orders priced 
equal to or greater than $1.00 per share in increments of $0.001, in 
connection with the operation of its Retail Liquidity Program, until 
June 30, 2017.
    The limited and temporary exemption extended by this Order is 
subject to modification or revocation if at any time the Commission 
determines that such action is necessary or appropriate in furtherance 
of the purposes of the Securities Exchange Act of 1934. Responsibility 
for compliance with any applicable provisions of the Federal securities 
laws must rest with the persons relying on the exemption that is the 
subject of this Order.
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(83).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
Brent J. Fields,
Secretary.
[FR Doc. 2016-30814 Filed 12-20-16; 8:45 am]
 BILLING CODE 8011-01-P

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