Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 11.26 Regarding the Data Collection Requirements of the Regulation NMS Plan To Implement a Tick Size Pilot Program January 17, 2017, 8249-8252 [2017-01461]

Download as PDF sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 14 / Tuesday, January 24, 2017 / Notices is publishing this notice of a proposed revision to the previously approved collection of information. Description: The SEC previously received OMB approval for a voluntary information collection with respect to the Joint Standards, pursuant to which entities regulated by the SEC voluntarily self-assess their diversity policies and practices.1 This proposed revision to the previously approved collection would add a form entitled ‘‘Diversity Assessment Report for Entities Regulated by the SEC’’ (Diversity Assessment Report) to assist with collection of information regarding regulated entities’ policies and practices relating to diversity and inclusion. The Diversity Assessment Report (1) asks for general information about a respondent; (2) includes a checklist and questions relating to the standards set forth in the Joint Standards; (3) seeks data related to workforce diversity and supplier diversity; and (4) provides an opportunity for comments. The SEC estimates that use of the Diversity Assessment Report would reduce the average response time for this collection per respondent from 12 hours to 10 hours. A draft of this Diversity Assessment Report can be viewed at https://www.sec.gov/omwi/sec-entitydiversity-assessment-report-draft.pdf. The SEC may use the information submitted by the entities it regulates to monitor progress and trends in the financial services industry with regard to diversity and inclusion in employment and contracting activities and to identify and highlight those policies and practices that have been successful. The SEC will continue to reach out to the regulated entities and other interested parties to discuss diversity and inclusion in the financial services industry and share leading practices. The SEC may also publish information disclosed by the entity, such as any identified leading practices, in any form that does not identify a particular institution or disclose confidential business information. The SEC will not publish diversity and inclusion information that identifies any particular regulated entity unless the regulated entity consents in writing to such use. Type of Review: Revision. Frequency of Response: Annually. Burden Estimates: Revised Number of Respondents: 1,300.2 1 80 FR 33016 (June 10, 2015). number has been modified to account for the ever changing number of entities regulated by the SEC. It still, however, represents about 5% of regulated entities, as set forth in the original PRA notice for the Joint Standards. 2 This VerDate Sep<11>2014 19:36 Jan 23, 2017 Jkt 241001 Revised Annual Burden Per Respondent for the Diversity Assessment Report and Joint Standards: 10 hours. Revised Total Annual Burden: 13,000 hours. Obligation to Respond: Voluntary. Request for Comments: The comments submitted in response to this notice will be summarized and included in the request for OMB approval. All comments will become a matter of public record. Comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the SEC, including whether the information has practical utility; (b) The accuracy of the SEC’s estimate of the information collection burden, including the validity of the methods and the assumptions used; (c) Ways to enhance the quality, utility, and clarity of the information proposed to be collected; (d) Ways to minimize the burden of the collection on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. Dated: January 18, 2017. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–01566 Filed 1–23–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79806; File No. SR–NSX– 2017–01] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Exchange Rule 11.26 Regarding the Data Collection Requirements of the Regulation NMS Plan To Implement a Tick Size Pilot Program January 17, 2017 Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 6, 2017, National Stock Exchange, Inc. (‘‘NSX’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) a proposed rule change, as described in 1 15 2 17 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00076 Fmt 4703 Sfmt 4703 8249 Items I, and II below, which Items have been substantially prepared by the Exchange. The Exchange has designated this proposal as a non-controversial proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6)(iii) 4 thereunder, which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to amend NSX Rule 11.26(b) and Rule 11.26, Interpretations and Policies .08 to modify certain data collection requirements of the Regulation NMS Plan to Implement a Tick Size Pilot Program (the ‘‘Plan’’). The proposed rule change is the same as proposed rule changes recently approved or published by the Commission for Bats BZX Exchange f/k/a BATS Exchange, Inc. (‘‘BZX’’) to amend BZX Rule 11.27 which also sets forth amendments to the requirements for the Web site data publication requirements pursuant to Appendices B and C of the Plan.5 The text of the proposed rule change is available on the Exchange’s Web site at www.nsx.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and statutory basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts 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 BZX, Bats BYX Exchange, Inc., f/k/a BATS–Y Exchange, 3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). 5 See Securities Exchange Act Release No. 79533 (December 13, 2016), 81 FR 91990 (December 19, 2016) (SR–BatsBZX–2016–82). 4 17 E:\FR\FM\24JAN1.SGM 24JAN1 8250 Federal Register / Vol. 82, No. 14 / Tuesday, January 24, 2017 / Notices Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Chicago Stock Exchange, Inc., Financial Industry Regulatory Authority, 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 ‘‘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 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 was thereafter approved by the Commission, as modified, on May 6, 2015.11 On November 6, 2015, the Commission granted the Participants an exemption from implementing the Plan until October 3, 2016.12 On March 3, 2016, the Commission published an amendment to the Plan adding NSX as a Participant.13 On September 13, 2016, the Commission exempted the Plan Participants from the requirement to fully implement the Pilot on October 3, 2016, to permit the Plan Participants to implement the pilot on a phased-in basis, as described in the Plan Participants’ exemptive request.14 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 Participant is required to comply, and to enforce compliance by its member organizations, as 6 15 U.S.C. 78k–1. 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) (File No. 4–657) (‘‘Approval Order’’). 12 See Securities Exchange Act Release No. 76382 (November 6, 2015), 80 FR 70284 (November 13, 2015) (File No. 4–657) (Order Granting Exemption From Compliance With the National Market System Plan To Implement a Tick Size Pilot Program). 13 See Securities Exchange Act Release No. 77277 (March 3, 2016), 81 FR 12162 (March 8, 2016). 14 See Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Eric Swanson, EVP, General Counsel and Secretary, Bats Global Markets, Inc., dated September 13, 2016; see also Letter from Eric Swanson, EVP, General Counsel and Secretary, Bats Global Markets, Inc., to Brent J. Fields, Secretary, Commission, dated September 9, 2016. sradovich on DSK3GMQ082PROD with NOTICES 7 17 VerDate Sep<11>2014 19:36 Jan 23, 2017 Jkt 241001 applicable, with the provisions of the Plan. The Exchange adopted rule amendments to implement the requirements of the Plan, including relating to the Plan’s data collection requirements and requirements relating to Web site data publication.15 Specifically, with respect to the Web site data publication requirements pursuant to Section VII and Appendices B and C to the Plan, Exchange Rule 11.26(b)(2)(B) provides, among other things, that the Exchange shall make the data required by Items I and II of Appendix B to the Plan, and collected pursuant to paragraph (b)(2) of Rule 11.26, publicly available on the Exchange’s Web site on a monthly basis at no charge and shall not identify the Trading Center that generated the data. Exchange Rule 11.26(b)(3)(C), provides, among other things, that the Exchange shall make the data required by Item IV of Appendix B to the Plan, and collected pursuant to paragraph (b)(3)(A) of Rule 11.26, publicly available on the Exchange Web site on a monthly basis at no charge and shall not identify the Trading Center [sic] that generated the data. Exchange Rule 11.26(b)(5) provides, among other things, that the Exchange shall collect and transmit to the Commission data described in Item III of Appendix B of the Plan relating to daily Market Maker registration statistics, but does not currently include a provision requiring the Exchange to publish such data to its Web site. Rule 11.26, Interpretation and Policy .08 provides, among other things, that the requirement that the Exchange or the Designated Examining Authority (‘‘DEA’’) make certain data publicly available on the Exchange’s or the DEA’s Web site pursuant to Appendix B and C to the Plan shall commence at the beginning of the Pilot Period. The Exchange is proposing amendments to Rule 11.26(b)(2)(B) (regarding Appendix B.I and B.II data) and Rule 11.26(b)(3)(C) (regarding Appendix B.IV data) to provide that data required to be made available on the Exchange’s Web site be published within 120 calendar days following month end. The Exchange also proposes to add a provision to Rule 11.26(b)(5) to state that the Exchange shall make data collected under Appendix B.III publicly available on the Exchange’s Web site within 120 calendar days following 15 See Securities Exchange Act Release No. 77483 (March 31, 2016), 81 FR 20040 (April 6, 2016) (File No. SR–NSX–2016–01); see also Securities Exchange Act Release No. 78960 (September 28, 2016), 81 FR 68476 (October 4, 2016) (File No. SR– NSX–2016–12). PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 month end at no charge.16 In addition, the proposed amendments to Rule 11.26, Interpretations and Policies .08 would provide that, notwithstanding the provisions of paragraphs (b)(2)(B), (b)(3)(C), and (b)(5), the Exchange or the DEA shall make data for the Pre-Pilot period publicly available on the Exchange’s or the DEA’s Web site pursuant to Appendix B and C to the Plan by February 28, 2017.17 The purpose of delaying the publication of the Web site data is to address confidentiality concerns by providing for the passage of additional time between the market information reflected in the data and the public availability of such information.18 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 19 in general, and furthers the objectives of Section 6(b)(5) of the Act 20 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating 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 is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan and is 16 The Exchange notes that it does not currently have any Market Makers and, therefore, does not currently collect Market Maker registration statistics. 17 With respect to data for the Pilot Period, the requirement that the Exchange or the DEA make data publicly available on the Exchange’s or the DEA’s Web site pursuant to Appendix B and C to the Plan shall continue to commence at the beginning of the Pilot Period. Thus, the first Web site publication date for Pilot Period data (covering October 2016) would be published on the Exchange’s or the DEA’s Web site by February 28, 2017, which is 120 days following the end of October 2016. 18 On November 30, 2016, the Commission granted each Participant a limited exemption from the requirement to publish certain Pilot data on a monthly basis. For each Participants that is the DEA of a Market Maker, the Commission granted a limited exemption to allow FINRA to aggregate and publish certain data on the FINRA Web site, rather than each Participant that is a DEA of a Market Maker publishing such data on its respective Web site. The exemptions were granted to the Participants so long as each Participant submits proposed rule changes to reflect the exemptions. See Letter dated November 30, 2016 from David S. Shillman, Associate Directors, Division of Trading and Markets to Ms. Marcia E. Asquith, Senior Vice President and Corporate Secretary, FINRA. 19 15 U.S.C. 78f(b). 20 15 U.S.C. 78f(b)(5). E:\FR\FM\24JAN1.SGM 24JAN1 Federal Register / Vol. 82, No. 14 / Tuesday, January 24, 2017 / Notices in furtherance of the objectives of the Plan, as identified by the SEC. The Exchange further believes that the instant proposal is consistent with the Act in that it is designed to address confidentiality concerns by permitting the Exchange to delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information. 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 Participants in meeting their regulatory obligations pursuant to the Plan. The proposal is intended to address confidentiality concerns that may adversely impact competition by permitting the Exchange to delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information. The proposal also does not alter the information required to be submitted to the Commission. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From ETP Holders, Participants or Others The Exchange has neither solicited nor received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) 21 of the Exchange Act and Rule 19b–4(f)(6) thereunder.22 U.S.C. 78(s)(b)(3)(A). CFR 240.19b–4(f)(6). See Securities Exchange Act Release No. 58092 (July 3, 2008), 73 FR 40144 (July 11, 2008) (‘‘Commission Guidance and Amendment to the Rule Relating to Organization and Program Management Concerning Proposed Rule Changes by Self-Regulatory Organizations’’) (the ‘‘Streamlining Release’’). As set forth in the Streamlining Release, Rule 19b– 4(f)(6) permits a proposed rule change to become immediately effective to the extent such proposal is a proposed rule change to implement provisions of A proposed rule change filed under paragraph (f)(6) of Rule 19b–4 23 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b– 4(f)(6)(iii),24 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange filed the proposed rule change for immediate effectiveness and has requested that the Commission waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing so that it may become operative immediately. The Exchange notes that the proposed rule change implements the provisions of the Plan, and is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan. The proposal is intended to address confidentiality concerns by permitting the Exchange to delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information. The proposal does not alter the information required to be submitted to the SEC. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it will allow the Exchange to implement proposed changes that are intended to address confidentiality concerns. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative as of 6 January, 2017.25 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, otherwise in furtherance of the purposes of the Act.26 If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 21 15 sradovich on DSK3GMQ082PROD with NOTICES 22 17 VerDate Sep<11>2014 19:36 Jan 23, 2017 Jkt 241001 an approved national market system plan or a Commission rule. Id. at 40148. 23 17 CFR 240.19b–4(f)(6)(iii). 24 17 CFR 240.19b–4(f)(6)(iii). 25 For purposes of only waiving the operative delay for this rule proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 26 15 U.S.C. 78s(b)(3)(C). PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 8251 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– NSX–2017–01 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File No. SR–NSX–2017–01. This file number should be included in the subject line if email is used. To help the Commission process and review comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (http://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing will also 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–NSX–2017–01 and should be submitted on or before February 14, 2017. E:\FR\FM\24JAN1.SGM 24JAN1 8252 Federal Register / Vol. 82, No. 14 / Tuesday, January 24, 2017 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.27 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–01461 Filed 1–23–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–79808; File No. SR–CBOE– 2017–004] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fees Schedule January 17, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 3, 2017, Chicago Board Options Exchange, Incorporated (the ‘‘Exchange’’ or ‘‘CBOE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The text of the proposed rule change is available on the Exchange’s Web site (http://www.cboe.com/AboutCBOE/ CBOELegalRegulatoryHome.aspx), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. sradovich on DSK3GMQ082PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. 27 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 19:36 Jan 23, 2017 Jkt 241001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend its Fees Schedule. The Exchange is adding fees for functionality related to its PULSe workstation. The fees herein will be effective on January 3, 2017. By way of background, the PULSe workstation is a front-end order entry system designed for use with respect to orders that may be sent to the trading systems of the Exchange. Exchange Trading Permit Holders (‘‘TPHs’’) may also make workstations available to their customers, which may include TPHs, non-broker dealer public customers and non-TPH broker dealers. Drop Copies Financial Information eXchange (‘‘FIX’’) language-based connectivity, upon request, provides customers (both TPH and non-TPH) of TPHs that are brokers and PULSe users (‘‘PULSe brokers’’) with the ability to receive ‘‘drop-copy’’ order fill messages from their PULSe brokers. These fill messages allow customers to update positions, risk calculations and streamline backoffice functions. The Exchange is proposing a monthly fee to be assessed on TPHs who are either receiving or sending drop copies via a PULSe workstation. This fee will allow for the recoupment of costs of maintaining and supporting drop copy functionality. Whether the drop copy sender or receiver is assessed the fee is dependent upon whether the customer receiving the drop copies is a TPH or non-TPH. If a customer receiving drop copies is a TPH, that TPH customer (the receiving TPH) will be charged a fee of $1000 per month, per PULSe broker from whom it receives drop copies via PULSe. For example, if TPH customer A receives drop copies from each of PULSe broker A, PULSe broker B, and PULSe broker C (all of which are TPHs), TPH A (the receiving TPH) will be charged a fee of $3000 per month for receiving drop copies via PULSe from PULSe brokers A, B and C (the sending TPHs). If a customer receiving drop copies is a non-TPH, the PULSe broker (the sending TPH) who sends drop copies via PULSe to that customer will be charged a fee of $500 per month. If that PULSe broker sends drop copies via PULSe to multiple non-TPH customers, the PULSe broker will be charged the fee for each customer. For example, if PULSe broker A sends drop copies via its PULSe workstation to each of non- PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 TPH customer A, non-TPH customer B and non-TPH customer C, PULSe broker A (the sending TPH) will be charged a fee of $1500 per month for drop copies it sends via PULSe to non-TPH customers A, B and C (the receiving non-TPHs). Non-PULSe-to-PULSe Routing Upon request, the Exchange provides customers, both TPH and non-TPH, of PULSe brokers with the ability to transmit orders electronically to PULSe brokers’ PULSe workstations using order management systems other than PULSe (i.e., non-PULSe-to-PULSe).3 These customers utilize the existing infrastructure of such systems to send orders to their PULSe brokers electronically. The Exchange is proposing a monthly fee payable by TPH customers who request non-PULSe-to-PULSe functionality. This fee will allow for the recoupment of costs of maintaining and supporting non-PULSe-to-PULSe routing functionality. A TPH customer sending orders electronically to PULSe brokers through these non-PULSe systems will be charged a fee of $500 a month per PULSe broker to which the customer sends orders. For example, if TPH customer A transmits orders electronically through a non-PULSe order management terminal to PULSe workstations of each of PULSe broker A, PULSe broker B, and PULSe broker C, TPH customer A (the sending TPH) will be charged a fee of $1500 per month for the ability to send orders electronically to the PULSe workstations of PULSe brokers A, B and C.4 The Exchange does not assess any fee, to the PULSe broker or otherwise, for a non-TPH customer electing to use non-PULSe-to-PULSe routing functionality. FIX Integration Drop Copy Start-Up/ Cancellation Fees The Exchange is proposing fees for both the start-up and cancellation of the FIX integration needed to send and receive drop copies from PULSe workstations. The Exchange is proposing a one-time fee of $500 to recoup the costs required to connect a new drop copy customer to workstations of its PULSe broker(s) and add the drop copy functionality for that customer. Additionally, the Exchange is 3 Non-PULSe-to-PULSe routing is an ‘‘add-on’’ feature to drop copy connectivity. If a TPH or nonTPH customer of a PULSe brokers elects to send orders through its third-party order management system to its broker’s PULSe workstations, it must also elect to have the drop copy connectivity. 4 In Addition, the TPH customer would be charged $3,000/month for receiving drop copies from the three PULSe brokers, as discussed above. E:\FR\FM\24JAN1.SGM 24JAN1

Agencies

[Federal Register Volume 82, Number 14 (Tuesday, January 24, 2017)]
[Notices]
[Pages 8249-8252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01461]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79806; File No. SR-NSX-2017-01]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend Exchange Rule 11.26 Regarding the Data Collection Requirements 
of the Regulation NMS Plan To Implement a Tick Size Pilot Program 
January 17, 2017

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 6, 2017, National Stock Exchange, Inc. (``NSX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') a proposed rule change, as described in 
Items I, and II below, which Items have been substantially prepared by 
the Exchange. The Exchange has designated this proposal as a non-
controversial proposed rule change pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(6)(iii) \4\ thereunder, which renders it 
effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend NSX Rule 11.26(b) and Rule 11.26, 
Interpretations and Policies .08 to modify certain data collection 
requirements of the Regulation NMS Plan to Implement a Tick Size Pilot 
Program (the ``Plan''). The proposed rule change is the same as 
proposed rule changes recently approved or published by the Commission 
for Bats BZX Exchange f/k/a BATS Exchange, Inc. (``BZX'') to amend BZX 
Rule 11.27 which also sets forth amendments to the requirements for the 
Web site data publication requirements pursuant to Appendices B and C 
of the Plan.\5\
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    \5\ See Securities Exchange Act Release No. 79533 (December 13, 
2016), 81 FR 91990 (December 19, 2016) (SR-BatsBZX-2016-82).
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    The text of the proposed rule change is available on the Exchange's 
Web site at www.nsx.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and statutory basis for the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. The Exchange has prepared summaries, set 
forth in Sections A, B, and C below, of the most significant parts 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 BZX, Bats BYX 
Exchange, Inc., f/k/a BATS-Y Exchange,

[[Page 8250]]

Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Chicago Stock 
Exchange, Inc., Financial Industry Regulatory Authority, 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 ``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 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 was thereafter approved by the Commission, as modified, on May 6, 
2015.\11\ On November 6, 2015, the Commission granted the Participants 
an exemption from implementing the Plan until October 3, 2016.\12\ On 
March 3, 2016, the Commission published an amendment to the Plan adding 
NSX as a Participant.\13\ On September 13, 2016, the Commission 
exempted the Plan Participants from the requirement to fully implement 
the Pilot on October 3, 2016, to permit the Plan Participants to 
implement the pilot on a phased-in basis, as described in the Plan 
Participants' exemptive request.\14\
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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) (File No. 4-657) (``Approval 
Order'').
    \12\ See Securities Exchange Act Release No. 76382 (November 6, 
2015), 80 FR 70284 (November 13, 2015) (File No. 4-657) (Order 
Granting Exemption From Compliance With the National Market System 
Plan To Implement a Tick Size Pilot Program).
    \13\ See Securities Exchange Act Release No. 77277 (March 3, 
2016), 81 FR 12162 (March 8, 2016).
    \14\ See Letter from David S. Shillman, Associate Director, 
Division of Trading and Markets, Commission, to Eric Swanson, EVP, 
General Counsel and Secretary, Bats Global Markets, Inc., dated 
September 13, 2016; see also Letter from Eric Swanson, EVP, General 
Counsel and Secretary, Bats Global Markets, Inc., to Brent J. 
Fields, Secretary, Commission, dated September 9, 2016.
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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 Participant is required to comply, and 
to enforce compliance by its member organizations, as applicable, with 
the provisions of the Plan.
    The Exchange adopted rule amendments to implement the requirements 
of the Plan, including relating to the Plan's data collection 
requirements and requirements relating to Web site data 
publication.\15\ Specifically, with respect to the Web site data 
publication requirements pursuant to Section VII and Appendices B and C 
to the Plan, Exchange Rule 11.26(b)(2)(B) provides, among other things, 
that the Exchange shall make the data required by Items I and II of 
Appendix B to the Plan, and collected pursuant to paragraph (b)(2) of 
Rule 11.26, publicly available on the Exchange's Web site on a monthly 
basis at no charge and shall not identify the Trading Center that 
generated the data. Exchange Rule 11.26(b)(3)(C), provides, among other 
things, that the Exchange shall make the data required by Item IV of 
Appendix B to the Plan, and collected pursuant to paragraph (b)(3)(A) 
of Rule 11.26, publicly available on the Exchange Web site on a monthly 
basis at no charge and shall not identify the Trading Center [sic] that 
generated the data. Exchange Rule 11.26(b)(5) provides, among other 
things, that the Exchange shall collect and transmit to the Commission 
data described in Item III of Appendix B of the Plan relating to daily 
Market Maker registration statistics, but does not currently include a 
provision requiring the Exchange to publish such data to its Web site. 
Rule 11.26, Interpretation and Policy .08 provides, among other things, 
that the requirement that the Exchange or the Designated Examining 
Authority (``DEA'') make certain data publicly available on the 
Exchange's or the DEA's Web site pursuant to Appendix B and C to the 
Plan shall commence at the beginning of the Pilot Period.
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    \15\ See Securities Exchange Act Release No. 77483 (March 31, 
2016), 81 FR 20040 (April 6, 2016) (File No. SR-NSX-2016-01); see 
also Securities Exchange Act Release No. 78960 (September 28, 2016), 
81 FR 68476 (October 4, 2016) (File No. SR-NSX-2016-12).
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    The Exchange is proposing amendments to Rule 11.26(b)(2)(B) 
(regarding Appendix B.I and B.II data) and Rule 11.26(b)(3)(C) 
(regarding Appendix B.IV data) to provide that data required to be made 
available on the Exchange's Web site be published within 120 calendar 
days following month end. The Exchange also proposes to add a provision 
to Rule 11.26(b)(5) to state that the Exchange shall make data 
collected under Appendix B.III publicly available on the Exchange's Web 
site within 120 calendar days following month end at no charge.\16\ In 
addition, the proposed amendments to Rule 11.26, Interpretations and 
Policies .08 would provide that, notwithstanding the provisions of 
paragraphs (b)(2)(B), (b)(3)(C), and (b)(5), the Exchange or the DEA 
shall make data for the Pre-Pilot period publicly available on the 
Exchange's or the DEA's Web site pursuant to Appendix B and C to the 
Plan by February 28, 2017.\17\ The purpose of delaying the publication 
of the Web site data is to address confidentiality concerns by 
providing for the passage of additional time between the market 
information reflected in the data and the public availability of such 
information.\18\
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    \16\ The Exchange notes that it does not currently have any 
Market Makers and, therefore, does not currently collect Market 
Maker registration statistics.
    \17\ With respect to data for the Pilot Period, the requirement 
that the Exchange or the DEA make data publicly available on the 
Exchange's or the DEA's Web site pursuant to Appendix B and C to the 
Plan shall continue to commence at the beginning of the Pilot 
Period. Thus, the first Web site publication date for Pilot Period 
data (covering October 2016) would be published on the Exchange's or 
the DEA's Web site by February 28, 2017, which is 120 days following 
the end of October 2016.
    \18\ On November 30, 2016, the Commission granted each 
Participant a limited exemption from the requirement to publish 
certain Pilot data on a monthly basis. For each Participants that is 
the DEA of a Market Maker, the Commission granted a limited 
exemption to allow FINRA to aggregate and publish certain data on 
the FINRA Web site, rather than each Participant that is a DEA of a 
Market Maker publishing such data on its respective Web site. The 
exemptions were granted to the Participants so long as each 
Participant submits proposed rule changes to reflect the exemptions. 
See Letter dated November 30, 2016 from David S. Shillman, Associate 
Directors, Division of Trading and Markets to Ms. Marcia E. Asquith, 
Senior Vice President and Corporate Secretary, FINRA.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \19\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \20\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating 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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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that this proposal is consistent with the Act 
because it is designed to assist the Participants in meeting their 
regulatory obligations pursuant to the Plan and is

[[Page 8251]]

in furtherance of the objectives of the Plan, as identified by the SEC. 
The Exchange further believes that the instant proposal is consistent 
with the Act in that it is designed to address confidentiality concerns 
by permitting the Exchange to delay Web site publication to provide for 
passage of additional time between the market information reflected in 
the data and the public availability of such information.

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 Participants in meeting their 
regulatory obligations pursuant to the Plan.
    The proposal is intended to address confidentiality concerns that 
may adversely impact competition by permitting the Exchange to delay 
Web site publication to provide for passage of additional time between 
the market information reflected in the data and the public 
availability of such information. The proposal also does not alter the 
information required to be submitted to the Commission.

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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) \21\ of the Exchange Act and 
Rule 19b-4(f)(6) thereunder.\22\
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    \21\ 15 U.S.C. 78(s)(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(6). See Securities Exchange Act Release 
No. 58092 (July 3, 2008), 73 FR 40144 (July 11, 2008) (``Commission 
Guidance and Amendment to the Rule Relating to Organization and 
Program Management Concerning Proposed Rule Changes by Self-
Regulatory Organizations'') (the ``Streamlining Release''). As set 
forth in the Streamlining Release, Rule 19b-4(f)(6) permits a 
proposed rule change to become immediately effective to the extent 
such proposal is a proposed rule change to implement provisions of 
an approved national market system plan or a Commission rule. Id. at 
40148.
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    A proposed rule change filed under paragraph (f)(6) of Rule 19b-4 
\23\ normally does not become operative prior to 30 days after the date 
of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\24\ the 
Commission may designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
filed the proposed rule change for immediate effectiveness and has 
requested that the Commission waive the requirement that the proposed 
rule change not become operative for 30 days after the date of the 
filing so that it may become operative immediately.
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    \23\ 17 CFR 240.19b-4(f)(6)(iii).
    \24\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange notes that the proposed rule change implements the 
provisions of the Plan, and is designed to assist the Participants in 
meeting their regulatory obligations pursuant to the Plan. The proposal 
is intended to address confidentiality concerns by permitting the 
Exchange to delay Web site publication to provide for passage of 
additional time between the market information reflected in the data 
and the public availability of such information. The proposal does not 
alter the information required to be submitted to the SEC.
    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to implement proposed changes that 
are intended to address confidentiality concerns. Therefore, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change to be operative as of 6 January, 2017.\25\
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    \25\ For purposes of only waiving the operative delay for this 
rule proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. See 15 
U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: necessary 
or appropriate in the public interest, for the protection of investors, 
otherwise in furtherance of the purposes of the Act.\26\ If the 
Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule should be approved 
or disapproved.
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    \26\ 15 U.S.C. 78s(b)(3)(C).
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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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NSX-2017-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-NSX-2017-01. This file 
number should be included in the subject line if email is used. To help 
the Commission process and review comments more efficiently, please use 
only one method. The Commission will post all comments on the 
Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10 a.m. and 3 
p.m. Copies of the filing will also 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-NSX-2017-01 
and should be submitted on or before February 14, 2017.


[[Page 8252]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01461 Filed 1-23-17; 8:45 am]
 BILLING CODE 8011-01-P