Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend Rule 6191 To Implement an Anonymous, Grouped Masking Methodology for Over-the-Counter Activity in Connection With Web Site Data Publication of Appendix B Data Pursuant to the Regulation NMS Plan To Implement a Tick Size Pilot Program, 13901-13905 [2017-05082]

Download as PDF Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices to the tier schedule are not unfairly discriminatory as all members will be able to attain higher rebates by executing the required volume of QCC and/or other solicited crossing orders on the Exchange. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,9 the Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change merely allows for the aggregation of volume from affiliates for purposes of the QCC and Solicitation rebate, consistent with treatment of volume for other purposes in the Schedule of Fees, and with volume aggregation on other options markets. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment. 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. asabaliauskas on DSK3SPTVN1PROD with NOTICES2 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act,10 and Rule 19b–4(f)(2) 11 thereunder. 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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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. U.S.C. 78f(b)(8). U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 240.19b–4(f)(2). 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– ISE–2017–17 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–2017–17. 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 (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 10:00 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– 2017–17 and should be submitted on or before April 5, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–05086 Filed 3–14–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80193; File No. SR–FINRA– 2017–006] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend Rule 6191 To Implement an Anonymous, Grouped Masking Methodology for Over-the-Counter Activity in Connection With Web Site Data Publication of Appendix B Data Pursuant to the Regulation NMS Plan To Implement a Tick Size Pilot Program March 9, 2017. 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 March 3, 2017, 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. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change FINRA is proposing to amend Rule 6191 to implement an anonymous, grouped masking methodology for overthe-counter (‘‘OTC’’) activity in connection with Web site data publication of Appendix B data pursuant to the Regulation NMS Plan to Implement a Tick Size Pilot Program (‘‘Plan’’). The text of the proposed rule change is available on FINRA’s Web site at http://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. 9 15 1 15 10 15 VerDate Sep<11>2014 18:19 Mar 14, 2017 12 17 Jkt 241001 PO 00000 CFR 200.30–3(a)(12). Frm 00114 Fmt 4703 Sfmt 4703 13901 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. E:\FR\FM\15MRN1.SGM 15MRN1 13902 Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / 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, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change asabaliauskas on DSK3SPTVN1PROD with NOTICES2 1. Purpose Rule 6191(b) (Compliance with Data Collection Requirements) 3 implements the data collection and Web site publication requirements of the Plan.4 Rule 6191(b)(2)(B) provides, among other things, that FINRA will publish data pursuant to Appendix B.I. and B.II. of the Plan on its Web site within 120 calendar days following month end at no charge,5 and that such publication will not identify the Trading Center that 3 See, e.g., Securities Exchange Act Release No. 76484 (November 19, 2015), 80 FR 73858 (November 25, 2015) (Notice of Filing of File No. SR–FINRA–2015–048); see also Securities Exchange Act Release No. 77164 (February 17, 2016), 81 FR 9043 (February 23, 2016) (Notice of Filing of Partial Amendment No. 1 and Order Granting Accelerated Approval of File No. SR–FINRA–2015–048) (‘‘Accelerated Approval Order’’). 4 The Participants filed the Plan to comply with an order issued by the Commission on June 24, 2014. See Letter from Brendon J. Weiss, Vice President, Intercontinental Exchange, Inc., to Secretary, Commission, dated August 25, 2014 (‘‘SRO Tick Size Plan Proposal’’). See Securities Exchange Act Release No. 72460 (June 24, 2014), 79 FR 36840 (June 30, 2014). See also Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) (‘‘Approval Order’’). 5 On November 30, 2016, the SEC granted exemptive relief to the Participants, and FINRA filed proposed rule changes, to, among other things, delay the publication of Web site data pursuant to Appendices B and C to the Plan until February 28, 2017, and to delay the ongoing Web site publication by ninety days such that it would be published within 120 calendar days following the end of the month. See, e.g., Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Marcia E. Asquith, Senior Vice President and Corporate Secretary, FINRA dated November 30, 2016; see also Securities Exchange Act Release No. 79424 (November 29, 2016), 81 FR 87603 (December 5, 2016) (Notice of Filing and Immediate Effectiveness of File No. SR– FINRA–2016–042). FINRA recently filed a proposed rule change to revert to the 30-day delay with regard to Appendix C data Web site publication. See File No. SR–FINRA–2017–005 (Proposed Rule Change to Amend FINRA Rule 6191 to Modify the Date of Appendix B Web site Data Publication Pursuant to the Regulation NMS Plan to Implement a Tick Size Pilot Program). VerDate Sep<11>2014 18:19 Mar 14, 2017 Jkt 241001 generated the data. Rule 6191(b)(3)(C) provides, among other things, that FINRA will publish data pursuant to Appendix B.IV. to the Plan on its Web site within 120 calendar days following month end at no charge, and that such publication will not identify the OTC Trading Center that generated the data. In consultation with SEC staff, FINRA is proposing new supplementary material to Rule 6191 to implement the aggregation methodology described further below. Specifically, FINRA is proposing to provide for an anonymous, grouped masking methodology for Appendix B.I., B.II. and B.IV. data in furtherance of the Plan’s requirement that the data made publicly available will not identify the Trading Center that generated the data.6 The proposed methodology also is intended to mitigate confidentiality concerns previously raised by commenters 7 regarding the publication of data related to OTC activity. Chicago Stock Exchange, Inc. (‘‘CHX’’) is the designated examining authority (‘‘DEA’’) for a relatively small number of OTC Trading Centers; thus, FINRA also will incorporate the firms for which CHX is the DEA into the anonymous, grouped masking methodology and publish OTC-wide statistics for Appendix B.I., B.II. and B.IV. data on the FINRA Web site.8 Grouping Methodology For purposes of the data to be made available on the FINRA Web site pursuant to the Plan, FINRA proposes to aggregate individual OTC Trading Center Appendix B data within groupings of Trading Centers by ATS and non-ATS categories, using an undisclosed methodology for assigning each Trading Center to a group. FINRA believes that an anonymous, grouped masking methodology for purposes of publishing the required data related to OTC activity will support the Plan’s requirement that the data to be made publicly available will not identify the Trading Center that generated the data.9 In furtherance of this objective, the details of the methodology used to formulate the anonymous groupings 6 See Section VII.(A) of the Plan (Collection of Trading Center Pilot Data). 7 See infra note 20. 8 In connection with the instant filing, FINRA and CHX requested exemptive relief from the Plan to permit the publication on the FINRA Web site of data relating to OTC activity pursuant to Appendix B.I., B.II. and B.IV. on an aggregated basis using an anonymous, grouped masking methodology. See Letter from Marcia E. Asquith, Executive Vice President, Board and External Relations, FINRA, to Robert W. Errett, Deputy Secretary, Commission, dated March 2, 2017. 9 See Section VII.(A) of the Plan. PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 will not be disclosed. FINRA believes that the proposed approach strikes an appropriate balance between mitigating confidentiality concerns while supporting the public availability of useful Plan data. Trading Center group assignments will not be published and generally will remain unchanged for the duration of the data publication period, with the exception of the entrance of a new Trading Center (new FINRA member). The anonymized identifier used for each group will remain unchanged for the duration of the data publication period and the same groups and group identifiers will be used for all Appendix B data sets. The number of Trading Centers assigned to each group will not specifically be disclosed; however, each group will contain between five and 25 market participant identifiers (MPIDs). In addition, for each day’s statistics, the number of MPIDs in each group with activity in any Pilot Security for that day will be disclosed. Disclosing the number of active MPIDs each day is intended to inform evaluators of the data of whether the number of Trading Centers reflected in the statistics each day has changed—for example, because a Trading Center in the group didn’t register activity on a given day.10 Appendix B.I. Data Aggregation Methodology FINRA proposes to aggregate the Appendix B.I. data to be made publicly available on the FINRA Web site by aggregating statistics within each group by Pilot Security for each trading day. The methodology used for computing the statistics at the group level will be the same methodology used to compute these statistics at the Trading Center level in the non-public version of the data (and in the public version of the exchange data).11 Specifically, FINRA would calculate group-level sums for statistics that are quantity counts 12 and use all underlying data within a group to calculate statistics requiring averages or weighted averages.13 Data will be aggregated separately for each order 10 FINRA will disclose the number of MPIDs in each group with activity in any Pilot Security for that day either within each Appendix B data set or in an associated file. 11 See Tick Size Appendix B and C Statistics FAQs (available at http://www.finra.org/sites/ default/files/Tick-Size-Pilot-Appendix-B-and-CFAQ.pdf). 12 See, e.g., Appendix B.I.a(7) (cumulative number of orders). 13 See, e.g., Appendix B.I.a(28) (the share weighted average realized spread for executions of orders); and Appendix B.I.a(29) (the received shareweighted average percentage for shares not displayable as of order receipt). FINRA will calculate averages for all price variables and percentages. E:\FR\FM\15MRN1.SGM 15MRN1 13903 Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices type and subcategory, and will not be aggregated across order types or subcategories. aggregated across order types or subcategories. TABLE 1—ILLUSTRATIVE SAMPLE B.I. DATA AGGREGATION 14 Trading center Date Ticker symbol Number of active MPIDs in masked group across all pilot stocks Cumulative number of shares of orders Cumulative number of orders Order type Share weighted average realized spread for execution of orders on trading center only Cumulative number of shares of orders executed at an away trading center Unmasked Data 20160926 ............................................ 20160926 ............................................ 20160926 ............................................ ABCD EFGH IJKL ZZZZ ZZZZ ZZZZ 18 18 18 2 2 4 100,000 100,000 750,000 75,000 100,000 35,000 ¥0.01 0.01 0.011 18 n/a n/a n/a 8 950,000 210,000 0.0090 Masked Data 20160926 ............................................ G1 ZZZZ Appendix B.II. Data Aggregation Methodology 5 time of order receipt to help minimize confidentiality concerns that may occur if other ordering methods were used, such as showing the original chronological order per Trading Center. for all Trading Centers within a group, with each order attributed to the group rather than the underlying Trading Center. In addition, Appendix B.II. order information would be displayed in pure chronological order based on Appendix B.II. data includes orderlevel statistics; thus, FINRA proposes that all individual orders be displayed TABLE 2—ILLUSTRATIVE SAMPLE B.II. DATA AGGREGATION 15 Trading center Date Issue Number of active MPIDs in masked group across all pilot stocks Order received time Order shares quantity Order type B/S code Limit price Unmasked Data 20160906 20160906 20160906 20160906 20160906 20160906 ............................................ ............................................ ............................................ ............................................ ............................................ ............................................ ABCD ABCD ABCD EFGH EFGH EFGH ZZZZ ZZZZ ZZZZ ZZZZ ZZZZ ZZZZ n/a n/a n/a n/a n/a n/a 93,605.41 94,114.99 101,140.05 93,605.42 94,114.99 101,140.07 10 11 11 10 11 11 500 100 900 600 100 700 B S S B S S (null) 52.45 52.31 (null) 52.45 52.37 10 10 11 11 11 11 500 600 100 100 900 700 B B S S S S (null) (null) 52.45 52.45 52.31 52.37 Masked Data 20160906 20160906 20160906 20160906 20160906 20160906 ............................................ ............................................ ............................................ ............................................ ............................................ ............................................ G1 G1 G1 G1 G1 G1 ZZZZ ZZZZ ZZZZ ZZZZ ZZZZ ZZZZ asabaliauskas on DSK3SPTVN1PROD with NOTICES2 FINRA proposes to aggregate Appendix B.IV. data by aggregating 14 For purposes of illustration, this table reflects only a sample of the data—specifically, the fields described in Appendix B.I.a.(1), (2), (3), (7), (8), (13) and (28). The published data would reflect all fields described in Appendix B.I. to the Plan and as further specified in FINRA Rule 6191 and related rule filings, the Tick Size Appendix B and C Statistics FAQs (available at http://www.finra.org/ sites/default/files/Tick-Size-Pilot-Appendix-B-andC–FAQ.pdf), and in FINRA’s Appendix B and C Requirements and Finra.org File Specifications document (available at http://www.finra.org/sites/ 18:19 Mar 14, 2017 Jkt 241001 93,605.41 93,605.42 94,114.99 94,114.99 101,140.05 101,140.07 statistics within each group by trading day by summing the statistics of all market maker activity represented within the group. The number of market Appendix B.IV. Data Aggregation Methodology VerDate Sep<11>2014 5 5 5 5 5 5 makers would be displayed as the unique number of market makers 16 across all Trading Centers within the group. default/files/Appendix-B-and-C-ReportingSpecifications.pdf). 15 For purposes of illustration, this table reflects only a sample of the data—specifically, the fields required by items a. through h. of Appendix B.II. The published data would reflect all fields described in Appendix B.II. to the Plan and as further specified in FINRA Rule 6191 and related rule filings, the Tick Size Appendix B and C Statistics FAQs (available at http://www.finra.org/ sites/default/files/Tick-Size-Pilot-Appendix-B-andC-FAQ.pdf), and in FINRA’s Appendix B and C Requirements and Finra.org File Specifications document (available at http://www.finra.org/sites/ default/files/Appendix-B-and-C-ReportingSpecifications.pdf). 16 As provided in FINRA Rule 6191.11, FINRA will provide a count of the number of Market Makers used in the participation calculations. Thus, if a single unique Market Maker traded on multiple Trading Centers within the same masking group, for the Appendix B.IV. count of unique Market Makers on a given trading day, FINRA will count this activity as attributed to one unique Market Maker. PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 E:\FR\FM\15MRN1.SGM 15MRN1 13904 Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices TABLE 3—ILLUSTRATIVE SAMPLE B.IV. DATA AGGREGATION 17 Trading center Date Number of active MPIDs in masked group across all pilot stocks Number unique MMs buy side Number unique MMs sell side Shares participation (buy) Shares participation (sell) Unmasked Data 20160906 ............................................................ 20160906 ............................................................ 20160906 ............................................................ ABCD EFGH IJKL n/a n/a n/a 2 1 4 1 1 1 700,000 200 35,000 225,000 5,000 500,000 5 2 735,200 730,000 Masked Data 20160906 ............................................................ If the Commission approves the proposed rule change, the effective date of the proposed rule change will be 120 days following Commission approval. 2. Statutory Basis asabaliauskas on DSK3SPTVN1PROD with NOTICES2 FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,18 which requires, among other things, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest, and Section 15A(b)(9) of the Act,19 which requires that FINRA rules not impose any burden on competition that is not necessary or appropriate. 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 stock of small-capitalization companies. FINRA consulted extensively with SEC staff in connection with the instant proposal to design a grouped masking methodology that is consistent with the objectives of Section VII(A) of the Plan to make Appendix B data publicly available while not identifying the Trading Center that generated the data. 17 For purposes of illustration, this table reflects only a sample of the data—specifically, the fields required by items a. and b. of Appendix B.IV and FINRA Rule 6191.11. The published data would reflect all fields described in Appendix B.IV. to the Plan and as further specified in FINRA Rule 6191 and related rule filings, the Tick Size Appendix B and C Statistics FAQs (available at http:// www.finra.org/sites/default/files/Tick-Size-PilotAppendix-B-and-C-FAQ.pdf), and in FINRA’s Appendix B and C Requirements and Finra.org File Specifications document (available at http:// www.finra.org/sites/default/files/Appendix-B-andC-Reporting-Specifications.pdf). 18 15 U.S.C. 78o–3(b)(6). 19 15 U.S.C. 78o–3(b)(9). VerDate Sep<11>2014 18:19 Mar 14, 2017 Jkt 241001 G1 5 B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. FINRA notes that the proposed rule change implements the provisions of the Plan. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Commission previously received comment letters from FIF and Citadel Securities expressing concern over FINRA’s intent to publish Appendix B data on a Trading Center-by-Trading Center basis.20 FIF stated that publishing Appendix B.I. and B.II. statistics on FINRA’s Web site in a disaggregated format does not satisfy the requirements of the Plan or Rule 6191 that the publicly available data will not identify the trading center that generated the data.21 Similarly, Citadel Securities stated that market participants would be able to determine the identity of Trading Centers in violation of the Plan if the Appendix B data were to be published in a disaggregated format.22 In consultation with SEC staff, FINRA is filing the instant proposed rule change to mitigate the confidentiality concerns raised by commenters by providing for an anonymized, grouped masking methodology for Appendix B 20 See Letters from William Hebert, Managing Director, Financial Information Forum (‘‘FIF’’), to Robert W. Errett, Deputy Secretary, Commission, dated December 21, 2016 (‘‘FIF letter’’); and Adam C. Cooper, Senior Managing Director and Chief Legal Officer, Citadel Securities, to Brent J. Fields, Secretary, Commission, dated December 21, 2016 (‘‘Citadel letter’’). See also Securities Exchange Act Release No. 79424 (November 29, 2016), 81 FR 87603 (December 5, 2016) (Notice of Filing and Immediate Effectiveness of File No. SR–FINRA– 2016–042). 21 See FIF letter. 22 See Citadel letter. PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 data for all OTC activity in furtherance of the objectives of the Plan. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include File Number SR– FINRA–2017–006 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–FINRA–2017–006. 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 E:\FR\FM\15MRN1.SGM 15MRN1 Federal Register / Vol. 82, No. 49 / Wednesday, March 15, 2017 / Notices 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 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–FINRA– 2017–006, and should be submitted on or before April 5, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.23 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–05082 Filed 3–14–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80199; File No. SR–NYSE– 2016–72] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Granting Approval of a Proposed Rule Change Amending Initial and Continued Listing Standards for Special Purpose Acquisition Companies asabaliauskas on DSK3SPTVN1PROD with NOTICES2 March 10, 2017. I. Introduction On December 8, 2016, the New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend initial listing 23 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 18:19 Mar 14, 2017 Jkt 241001 standards for Special Purpose Acquisition Companies (‘‘SPACs’’) to provide an option to hold a tender offer in lieu of a shareholder vote on a proposed acquisition; and amend initial and continued listing standards to, among other things, lower quantitative standards. The proposed rule change was published for comment in the Federal Register on December 29, 2016.3 The Commission received no comments on the proposal. On February 10, 2017, the Commission extended the time period for Commission action on the proposal to March 29, 2017.4 This order approves the proposed rule change. II. Description of the Proposal A. Background A SPAC is a special purpose company that raises capital in an initial public offering (‘‘IPO’’) to enter into future undetermined business combinations through mergers, capital stock exchanges, assets acquisitions, stock purchases, reorganizations or similar business combinations with one or more operating businesses or assets. In its filing, the Exchange stated that in the IPO, a SPAC typically sells units consisting of one share of common stock and one or more warrants (or fraction of a warrant) to purchase common stocks. The units are separable at some point after the IPO. The Exchange also noted that management of the SPAC typically receives a percentage of the equity at the outset and may be required to purchase additional shares in a private placement at the time of the IPO. Due to their unique structure, SPACs do not have any prior financial history, at the time of their listing, like operating companies. NYSE Listed Company Manual (‘‘Manual’’) Section 102.06 sets forth the listing standards that apply to SPACs.5 In addition to requiring SPACs to meet certain quantitative standards, Section 102.06 of the Manual provides additional investor protection safeguards for shareholders investing in SPACs. Currently, Section 102.06 of the Manual requires at least 90% of the proceeds raised in a SPAC IPO, and any 3 See Securities Exchange Act Release No. 79676 (December 22, 2016), 81 FR 96150 (December 29, 2016) (‘‘Notice’’). 4 See Securities Exchange Act Release No. 80022 (February 10, 2017), 82 FR 10947 (February 16, 2017) (‘‘Extension’’). 5 The Commission notes that throughout this order we have used the term ‘‘SPAC’’ or ‘‘SPACs’’, but these terms have the same meaning as ‘‘Acquisition Company’’ or ‘‘Acquisition Companies’’ which are the terms used for listing, and continued listing, in Sections 102.06 and 802.01B of the Manual. See NYSE Listed Company Manual Sections 102.06 and 802.01B. PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 13905 concurrent sale of equity securities, be placed in a trust account.6 Further within three years, or such shorter time period as specified by the SPAC, the SPAC must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the trust account.7 Until the SPAC has completed a business combination, or a series of business combinations, representing at least 80% of the trust account’s aggregate fair market value, the SPAC must, among other things, submit the business combination to a shareholder vote.8 Any public shareholders who vote against the business combination have a right to convert their shares of common stock into a pro rata share of the aggregate amount then in the trust account, if the business combination is approved and consummated.9 The Manual further states that a business combination cannot be consummated by the SPAC if the public shareholders owning in excess of a threshold amount (to be set no higher than 40%) of the shares of common stock exercise their conversion rights.10 In addition to these safeguards, a SPAC must also meet minimum quantitative initial and continued listing standards to list, and remain listed on the Exchange, as well as specified continued listing standards to remain listed after consummation of a business combination.11 B. Option To Hold a Tender Offer in Lieu of a Shareholder Vote The Exchange proposes to add an option for the SPAC to conduct a tender offer in lieu of a shareholder vote to complete a business combination. First, under the proposal if a shareholder vote is not held on a business combination for which the SPAC must file and furnish a proxy or information statement subject to Regulation 14A or 14C under the Exchange Act, the SPAC must provide all shareholders with the opportunity to redeem all their shares for cash equal to their pro rata share of the aggregate amount then in the deposit account pursuant to Rule 13e–4 and Regulation 14E under the Exchange Act.12 The proposal states that a SPAC 6 See NYSE Listed Company Manual Section 102.06. 7 Id. The 80% fair market value is the net assets held in trust net of amounts disbursed to management for working capital purposes and excluding the amount of any deferred underwriting discount held in trust. 8 Id. 9 Id. 10 Id. 11 See notes 16–18, infra and accompanying text. 12 See Notice, supra note 4. E:\FR\FM\15MRN1.SGM 15MRN1

Agencies

[Federal Register Volume 82, Number 49 (Wednesday, March 15, 2017)]
[Notices]
[Pages 13901-13905]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-05082]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80193; File No. SR-FINRA-2017-006]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing of a Proposed Rule Change To Amend 
Rule 6191 To Implement an Anonymous, Grouped Masking Methodology for 
Over-the-Counter Activity in Connection With Web Site Data Publication 
of Appendix B Data Pursuant to the Regulation NMS Plan To Implement a 
Tick Size Pilot Program

March 9, 2017.
    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 March 3, 2017, 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. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend Rule 6191 to implement an anonymous, 
grouped masking methodology for over-the-counter (``OTC'') activity in 
connection with Web site data publication of Appendix B data pursuant 
to the Regulation NMS Plan to Implement a Tick Size Pilot Program 
(``Plan'').
    The text of the proposed rule change is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA and at 
the Commission's Public Reference Room.

[[Page 13902]]

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

    In its filing with the Commission, FINRA included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. FINRA has prepared summaries, set forth in sections A, 
B, and C below, of the most significant aspects of such statements.

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

1. Purpose
    Rule 6191(b) (Compliance with Data Collection Requirements) \3\ 
implements the data collection and Web site publication requirements of 
the Plan.\4\ Rule 6191(b)(2)(B) provides, among other things, that 
FINRA will publish data pursuant to Appendix B.I. and B.II. of the Plan 
on its Web site within 120 calendar days following month end at no 
charge,\5\ and that such publication will not identify the Trading 
Center that generated the data. Rule 6191(b)(3)(C) provides, among 
other things, that FINRA will publish data pursuant to Appendix B.IV. 
to the Plan on its Web site within 120 calendar days following month 
end at no charge, and that such publication will not identify the OTC 
Trading Center that generated the data.
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    \3\ See, e.g., Securities Exchange Act Release No. 76484 
(November 19, 2015), 80 FR 73858 (November 25, 2015) (Notice of 
Filing of File No. SR-FINRA-2015-048); see also Securities Exchange 
Act Release No. 77164 (February 17, 2016), 81 FR 9043 (February 23, 
2016) (Notice of Filing of Partial Amendment No. 1 and Order 
Granting Accelerated Approval of File No. SR-FINRA-2015-048) 
(``Accelerated Approval Order'').
    \4\ The Participants filed the Plan to comply with an order 
issued by the Commission on June 24, 2014. See Letter from Brendon 
J. Weiss, Vice President, Intercontinental Exchange, Inc., to 
Secretary, Commission, dated August 25, 2014 (``SRO Tick Size Plan 
Proposal''). See Securities Exchange Act Release No. 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014). See also Securities Exchange Act 
Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) 
(``Approval Order'').
    \5\ On November 30, 2016, the SEC granted exemptive relief to 
the Participants, and FINRA filed proposed rule changes, to, among 
other things, delay the publication of Web site data pursuant to 
Appendices B and C to the Plan until February 28, 2017, and to delay 
the ongoing Web site publication by ninety days such that it would 
be published within 120 calendar days following the end of the 
month. See, e.g., Letter from David S. Shillman, Associate Director, 
Division of Trading and Markets, Commission, to Marcia E. Asquith, 
Senior Vice President and Corporate Secretary, FINRA dated November 
30, 2016; see also Securities Exchange Act Release No. 79424 
(November 29, 2016), 81 FR 87603 (December 5, 2016) (Notice of 
Filing and Immediate Effectiveness of File No. SR-FINRA-2016-042). 
FINRA recently filed a proposed rule change to revert to the 30-day 
delay with regard to Appendix C data Web site publication. See File 
No. SR-FINRA-2017-005 (Proposed Rule Change to Amend FINRA Rule 6191 
to Modify the Date of Appendix B Web site Data Publication Pursuant 
to the Regulation NMS Plan to Implement a Tick Size Pilot Program).
---------------------------------------------------------------------------

    In consultation with SEC staff, FINRA is proposing new 
supplementary material to Rule 6191 to implement the aggregation 
methodology described further below. Specifically, FINRA is proposing 
to provide for an anonymous, grouped masking methodology for Appendix 
B.I., B.II. and B.IV. data in furtherance of the Plan's requirement 
that the data made publicly available will not identify the Trading 
Center that generated the data.\6\ The proposed methodology also is 
intended to mitigate confidentiality concerns previously raised by 
commenters \7\ regarding the publication of data related to OTC 
activity. Chicago Stock Exchange, Inc. (``CHX'') is the designated 
examining authority (``DEA'') for a relatively small number of OTC 
Trading Centers; thus, FINRA also will incorporate the firms for which 
CHX is the DEA into the anonymous, grouped masking methodology and 
publish OTC-wide statistics for Appendix B.I., B.II. and B.IV. data on 
the FINRA Web site.\8\
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    \6\ See Section VII.(A) of the Plan (Collection of Trading 
Center Pilot Data).
    \7\ See infra note 20.
    \8\ In connection with the instant filing, FINRA and CHX 
requested exemptive relief from the Plan to permit the publication 
on the FINRA Web site of data relating to OTC activity pursuant to 
Appendix B.I., B.II. and B.IV. on an aggregated basis using an 
anonymous, grouped masking methodology. See Letter from Marcia E. 
Asquith, Executive Vice President, Board and External Relations, 
FINRA, to Robert W. Errett, Deputy Secretary, Commission, dated 
March 2, 2017.
---------------------------------------------------------------------------

Grouping Methodology
    For purposes of the data to be made available on the FINRA Web site 
pursuant to the Plan, FINRA proposes to aggregate individual OTC 
Trading Center Appendix B data within groupings of Trading Centers by 
ATS and non-ATS categories, using an undisclosed methodology for 
assigning each Trading Center to a group. FINRA believes that an 
anonymous, grouped masking methodology for purposes of publishing the 
required data related to OTC activity will support the Plan's 
requirement that the data to be made publicly available will not 
identify the Trading Center that generated the data.\9\ In furtherance 
of this objective, the details of the methodology used to formulate the 
anonymous groupings will not be disclosed. FINRA believes that the 
proposed approach strikes an appropriate balance between mitigating 
confidentiality concerns while supporting the public availability of 
useful Plan data.
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    \9\ See Section VII.(A) of the Plan.
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    Trading Center group assignments will not be published and 
generally will remain unchanged for the duration of the data 
publication period, with the exception of the entrance of a new Trading 
Center (new FINRA member). The anonymized identifier used for each 
group will remain unchanged for the duration of the data publication 
period and the same groups and group identifiers will be used for all 
Appendix B data sets. The number of Trading Centers assigned to each 
group will not specifically be disclosed; however, each group will 
contain between five and 25 market participant identifiers (MPIDs). In 
addition, for each day's statistics, the number of MPIDs in each group 
with activity in any Pilot Security for that day will be disclosed. 
Disclosing the number of active MPIDs each day is intended to inform 
evaluators of the data of whether the number of Trading Centers 
reflected in the statistics each day has changed--for example, because 
a Trading Center in the group didn't register activity on a given 
day.\10\
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    \10\ FINRA will disclose the number of MPIDs in each group with 
activity in any Pilot Security for that day either within each 
Appendix B data set or in an associated file.
---------------------------------------------------------------------------

Appendix B.I. Data Aggregation Methodology
    FINRA proposes to aggregate the Appendix B.I. data to be made 
publicly available on the FINRA Web site by aggregating statistics 
within each group by Pilot Security for each trading day. The 
methodology used for computing the statistics at the group level will 
be the same methodology used to compute these statistics at the Trading 
Center level in the non-public version of the data (and in the public 
version of the exchange data).\11\ Specifically, FINRA would calculate 
group-level sums for statistics that are quantity counts \12\ and use 
all underlying data within a group to calculate statistics requiring 
averages or weighted averages.\13\ Data will be aggregated separately 
for each order

[[Page 13903]]

type and subcategory, and will not be aggregated across order types or 
subcategories.
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    \11\ See Tick Size Appendix B and C Statistics FAQs (available 
at http://www.finra.org/sites/default/files/Tick-Size-Pilot-Appendix-B-and-C-FAQ.pdf).
    \12\ See, e.g., Appendix B.I.a(7) (cumulative number of orders).
    \13\ See, e.g., Appendix B.I.a(28) (the share weighted average 
realized spread for executions of orders); and Appendix B.I.a(29) 
(the received share-weighted average percentage for shares not 
displayable as of order receipt). FINRA will calculate averages for 
all price variables and percentages.

                                                  Table 1--Illustrative Sample B.I. Data Aggregation 14
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                               Share
                                                                                                                            Cumulative       weighted
                                                             Number of                                                       number of        average
                                                           active MPIDs                     Cumulative      Cumulative       shares of       realized
             Date                 Trading       Ticker       in masked      Order type       number of       number of        orders        spread for
                                   center       symbol     group across                       orders         shares of      executed at    execution of
                                                             all pilot                                        orders          an away        orders on
                                                              stocks                                                          trading         trading
                                                                                                                              center        center only
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Unmasked Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
20160926......................  ABCD         ZZZZ                    n/a              18               2         100,000          75,000           -0.01
20160926......................  EFGH         ZZZZ                    n/a              18               2         100,000         100,000            0.01
20160926......................  IJKL         ZZZZ                    n/a              18               4         750,000          35,000           0.011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Masked Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
20160926......................  G1           ZZZZ                      5              18               8         950,000         210,000          0.0090
--------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix B.II. Data Aggregation Methodology
    Appendix B.II. data includes order-level statistics; thus, FINRA 
proposes that all individual orders be displayed for all Trading 
Centers within a group, with each order attributed to the group rather 
than the underlying Trading Center. In addition, Appendix B.II. order 
information would be displayed in pure chronological order based on 
time of order receipt to help minimize confidentiality concerns that 
may occur if other ordering methods were used, such as showing the 
original chronological order per Trading Center.
---------------------------------------------------------------------------

    \14\ For purposes of illustration, this table reflects only a 
sample of the data--specifically, the fields described in Appendix 
B.I.a.(1), (2), (3), (7), (8), (13) and (28). The published data 
would reflect all fields described in Appendix B.I. to the Plan and 
as further specified in FINRA Rule 6191 and related rule filings, 
the Tick Size Appendix B and C Statistics FAQs (available at http://www.finra.org/sites/default/files/Tick-Size-Pilot-Appendix-B-and-C-FAQ.pdf), and in FINRA's Appendix B and C Requirements and Finra.org 
File Specifications document (available at http://www.finra.org/sites/default/files/Appendix-B-and-C-Reporting-Specifications.pdf).

                                                 Table 2--Illustrative Sample B.II. Data Aggregation 15
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Number of
                                                           active MPIDs
                                  Trading                    in masked    Order received                   Order shares
             Date                  center       Issue      group across        time         Order type       quantity        B/S code       Limit price
                                                             all pilot
                                                              stocks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Unmasked Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
20160906......................  ABCD         ZZZZ                    n/a       93,605.41              10             500               B          (null)
20160906......................  ABCD         ZZZZ                    n/a       94,114.99              11             100               S           52.45
20160906......................  ABCD         ZZZZ                    n/a      101,140.05              11             900               S           52.31
20160906......................  EFGH         ZZZZ                    n/a       93,605.42              10             600               B          (null)
20160906......................  EFGH         ZZZZ                    n/a       94,114.99              11             100               S           52.45
20160906......................  EFGH         ZZZZ                    n/a      101,140.07              11             700               S           52.37
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Masked Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
20160906......................  G1           ZZZZ                      5       93,605.41              10             500               B          (null)
20160906......................  G1           ZZZZ                      5       93,605.42              10             600               B          (null)
20160906......................  G1           ZZZZ                      5       94,114.99              11             100               S           52.45
20160906......................  G1           ZZZZ                      5       94,114.99              11             100               S           52.45
20160906......................  G1           ZZZZ                      5      101,140.05              11             900               S           52.31
20160906......................  G1           ZZZZ                      5      101,140.07              11             700               S           52.37
--------------------------------------------------------------------------------------------------------------------------------------------------------

Appendix B.IV. Data Aggregation Methodology
    FINRA proposes to aggregate Appendix B.IV. data by aggregating 
statistics within each group by trading day by summing the statistics 
of all market maker activity represented within the group. The number 
of market makers would be displayed as the unique number of market 
makers \16\ across all Trading Centers within the group.
---------------------------------------------------------------------------

    \15\ For purposes of illustration, this table reflects only a 
sample of the data--specifically, the fields required by items a. 
through h. of Appendix B.II. The published data would reflect all 
fields described in Appendix B.II. to the Plan and as further 
specified in FINRA Rule 6191 and related rule filings, the Tick Size 
Appendix B and C Statistics FAQs (available at http://www.finra.org/sites/default/files/Tick-Size-Pilot-Appendix-B-and-C-FAQ.pdf), and 
in FINRA's Appendix B and C Requirements and Finra.org File 
Specifications document (available at http://www.finra.org/sites/default/files/Appendix-B-and-C-Reporting-Specifications.pdf).
    \16\ As provided in FINRA Rule 6191.11, FINRA will provide a 
count of the number of Market Makers used in the participation 
calculations. Thus, if a single unique Market Maker traded on 
multiple Trading Centers within the same masking group, for the 
Appendix B.IV. count of unique Market Makers on a given trading day, 
FINRA will count this activity as attributed to one unique Market 
Maker.

[[Page 13904]]



                                                 Table 3--Illustrative Sample B.IV. data aggregation 17
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                             Number of
                                                                           active MPIDs
                                                                             in masked     Number unique   Number unique      Shares          Shares
                    Date                            Trading center         group across    MMs buy side    MMs sell side   participation   participation
                                                                             all pilot                                         (buy)          (sell)
                                                                              stocks
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                      Unmasked Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
20160906....................................  ABCD                                   n/a               2               1         700,000         225,000
20160906....................................  EFGH                                   n/a               1               1             200           5,000
20160906....................................  IJKL                                   n/a               4               1          35,000         500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                       Masked Data
--------------------------------------------------------------------------------------------------------------------------------------------------------
20160906....................................  G1                                       5               5               2         735,200         730,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    If the Commission approves the proposed rule change, the effective 
date of the proposed rule change will be 120 days following Commission 
approval.
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    \17\ For purposes of illustration, this table reflects only a 
sample of the data--specifically, the fields required by items a. 
and b. of Appendix B.IV and FINRA Rule 6191.11. The published data 
would reflect all fields described in Appendix B.IV. to the Plan and 
as further specified in FINRA Rule 6191 and related rule filings, 
the Tick Size Appendix B and C Statistics FAQs (available at http://www.finra.org/sites/default/files/Tick-Size-Pilot-Appendix-B-and-C-FAQ.pdf), and in FINRA's Appendix B and C Requirements and Finra.org 
File Specifications document (available at http://www.finra.org/sites/default/files/Appendix-B-and-C-Reporting-Specifications.pdf).
---------------------------------------------------------------------------

2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\18\ which requires, among 
other things, that FINRA rules must be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest, and Section 15A(b)(9) of the Act,\19\ which requires 
that FINRA rules not impose any burden on competition that is not 
necessary or appropriate.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78o-3(b)(6).
    \19\ 15 U.S.C. 78o-3(b)(9).
---------------------------------------------------------------------------

    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 stock of small-
capitalization companies. FINRA consulted extensively with SEC staff in 
connection with the instant proposal to design a grouped masking 
methodology that is consistent with the objectives of Section VII(A) of 
the Plan to make Appendix B data publicly available while not 
identifying the Trading Center that generated the data.

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

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. FINRA notes that the proposed 
rule change implements the provisions of the Plan.

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

    The Commission previously received comment letters from FIF and 
Citadel Securities expressing concern over FINRA's intent to publish 
Appendix B data on a Trading Center-by-Trading Center basis.\20\ FIF 
stated that publishing Appendix B.I. and B.II. statistics on FINRA's 
Web site in a disaggregated format does not satisfy the requirements of 
the Plan or Rule 6191 that the publicly available data will not 
identify the trading center that generated the data.\21\ Similarly, 
Citadel Securities stated that market participants would be able to 
determine the identity of Trading Centers in violation of the Plan if 
the Appendix B data were to be published in a disaggregated format.\22\
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    \20\ See Letters from William Hebert, Managing Director, 
Financial Information Forum (``FIF''), to Robert W. Errett, Deputy 
Secretary, Commission, dated December 21, 2016 (``FIF letter''); and 
Adam C. Cooper, Senior Managing Director and Chief Legal Officer, 
Citadel Securities, to Brent J. Fields, Secretary, Commission, dated 
December 21, 2016 (``Citadel letter''). See also Securities Exchange 
Act Release No. 79424 (November 29, 2016), 81 FR 87603 (December 5, 
2016) (Notice of Filing and Immediate Effectiveness of File No. SR-
FINRA-2016-042).
    \21\ See FIF letter.
    \22\ See Citadel letter.
---------------------------------------------------------------------------

    In consultation with SEC staff, FINRA is filing the instant 
proposed rule change to mitigate the confidentiality concerns raised by 
commenters by providing for an anonymized, grouped masking methodology 
for Appendix B data for all OTC activity in furtherance of the 
objectives of the Plan.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-FINRA-2017-006 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2017-006. 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

[[Page 13905]]

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 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of FINRA. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-FINRA-2017-006, and should be submitted 
on or before April 5, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05082 Filed 3-14-17; 8:45 am]
 BILLING CODE 8011-01-P