Consolidated Tape Association; Notice of Filing and Immediate Effectiveness of the Twenty-Second Charges Amendment to the Second Restatement of the CTA Plan and the Thirteenth Charges Amendment to the Restated CQ Plan, 15404-15407 [2017-06083]

Download as PDF 15404 Federal Register / Vol. 82, No. 58 / Tuesday, March 28, 2017 / Notices requirements.31 If a Fund is not in compliance with the applicable listing requirements, the Exchange will commence delisting procedures under NYSE Arca Equities Rule 5.5(m). This approval order is based on all of the Exchange’s representations and description of the Funds, including those set forth above and in Amendment Nos. 1, 3, and 4. The Commission notes that the Shares must comply with the requirements of NYSE Arca Equities Rule 8.200 and Commentary .02 thereto to be listed and traded on the Exchange on an initial and continuing basis. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment Nos. 1, 3, and 4 thereto, is consistent with Section 6(b)(5) of the Act 32 and the rules and regulations thereunder applicable to a national securities exchange. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Exchange Act,33 that the proposed rule change (SR– NYSEArca–2017–07), as modified by Amendment Nos. 1, 3, and 4 thereto, be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.34 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–06053 Filed 3–27–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80300; File No. SR–CTA/ CQ–2017–02] Consolidated Tape Association; Notice of Filing and Immediate Effectiveness of the Twenty-Second Charges Amendment to the Second Restatement of the CTA Plan and the Thirteenth Charges Amendment to the Restated CQ Plan March 23, 2017. Pursuant to Section 11A of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 608 thereunder,2 notice is hereby given that on March 2, 2017, the Consolidated Tape Association (‘‘CTA’’) Plan participants (‘‘Participants’’) 3 filed with the Securities and Exchange Commission (‘‘Commission’’) a proposal to amend the Second Restatement of the CTA Plan and the Restated Consolidated Quotation (‘‘CQ’’) Plan (‘‘Plans’’).4 These amendments represent the twenty-second Charges Amendment to the CTA Plan and the thirteenth Charges Amendment to the CQ Plan (‘‘Amendments’’). The Amendments seek to amend the Plans’ fee schedule as well as the non-display use policy to clarify the applicability on the nondisplay fee, the device fee, and the access fee. The Commission is publishing this notice to solicit comments from interested persons on the proposed Amendments. 1 15 U.S.C. 78k–1. CFR 242.608. 3 The Participants are: BATS Exchange, Inc., BATS–Y Exchange, Inc., Chicago Board Options Exchange, Inc., Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, Investors’ Exchange LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., Nasdaq Stock Market LLC, National Stock Exchange, New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. 4 See Securities Exchange Act Release Nos. 10787 (May 10, 1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan effective); 15009 (July 28, 1978), 43 FR 34851 (August 7, 1978) (temporarily authorizing the CQ Plan); and 16518 (January 22, 1980), 45 FR 6521 (January 28, 1980) (permanently authorizing the CQ Plan). The most recent restatement of both Plans was in 1995. The CTA Plan, pursuant to which markets collect and disseminate last sale price information for nonNASDAQ listed securities, is a ‘‘transaction reporting plan’’ under Rule 601 under the Act, 17 CFR 242.601, and a ‘‘national market system plan’’ under Rule 608 under the Act, 17 CFR 242.608. The CQ Plan, pursuant to which markets collect and disseminate bid/ask quotation information for listed securities, is a ‘‘national market system plan’’ under Rule 608 under the Act, 17 CFR 242.608. sradovich on DSK3GMQ082PROD with NOTICES 2 17 31 The Commission notes that certain other proposals for the listing and trading of Managed Fund Shares include a representation that the exchange will ‘‘surveil’’ for compliance with the continued listing requirements. See, e.g., Securities Exchange Act Release No. 77499 (April 1, 2016), 81 FR 20428 (April 7, 2016) (Notice of Filing of Amendment No. 2, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendment No. 2, to List and Trade Shares of the SPDR DoubleLine Short Duration Total Return Tactical ETF of the SSgA Active Trust), available at: http://www.sec.gov/rules/sro/bats/2016/3477499.pdf. In the context of this representation, it is the Commission’s view that ‘‘monitor’’ and ‘‘surveil’’ both mean ongoing oversight of the Fund’s compliance with the continued listing requirements. Therefore, the Commission does not view ‘‘monitor’’ as a more or less stringent obligation than ‘‘surveil’’ with respect to the continued listing requirements. 32 15 U.S.C. 78f(b)(5). 33 15 U.S.C. 78s(b)(2). 34 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 17:14 Mar 27, 2017 Jkt 241001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 I. Rule 608(a) A. Purpose of the Amendments 1. Background In October 2014, the Participants amended the Plans’ fee schedules to establish fees for non-display uses of data and to reduce the device fees assessed on professional subscribers.5 In so doing, the Participants determined that such a change provided an equitable allocation of fees to the industry that would reflect the value of non-display data usage (subject to the non-display fees) versus display data usage (subject to the lower device fees). At that time, non-display use was defined as consisting of accessing, processing, or consuming real-time Network A or Network B quotation information or last sale price information, whether delivered via direct and/or redistributor data feeds, for a purpose other than in support of a data recipient’s display or further internal or external distribution. The Participants established three categories of non-display uses of market data: • Category 1 applies when a data recipient makes non-display uses of real-time market data on its own behalf. • Category 2 applies when a data recipient makes non-display uses of real-time market data on behalf of its clients. • Category 3 applies when a data recipient makes non-display uses of real-time market data for the purpose of internally matching buy and sell orders within an organization. Data recipients can be charged for each of the three categories of nondisplay uses. Category 3 is the only nondisplay fee that can be charged multiple times; a data recipient would be charged for each ATS, exchange, or ECN operated by the data recipient. In the October 2014 Non-Display Filing, the Participants also provided the following non-exhaustive list of examples of nondisplay use: • Any trading in any asset class; • Automated order or quote generation and/or order pegging; • Price referencing for algorithmic trading; • Price referencing for smart order routing; • Operations control programs; • Investment analysis; • Order verification; • Surveillance programs; • Risk management; • Compliance; and • Portfolio valuation. 5 See Securities Exchange Act Release No. 73278 (October 1, 2014), 79 FR 60536 (October 7, 2014) (‘‘October 2014 Non-Display Filing’’). E:\FR\FM\28MRN1.SGM 28MRN1 Federal Register / Vol. 82, No. 58 / Tuesday, March 28, 2017 / Notices The Participants propose to clarify that any use of data that does not make the data visibly available to the data recipient on a device should be considered non-display use. When a data recipient is using data solely for display purposes, the data recipient will only be charged the device fee.6 As a result, the Participants believe it would be beneficial to provide additional clarification regarding the definition of non-display use to resolve any ambiguity. The Participants further propose to clarify that a data recipient is subject to the access fee when the data it is receiving is used for non-display, or can be manipulated and disseminated to other devices even if the data is also displayed on a device. As described below, the Participants are amending the Plans’ fee schedules to clarify the applicability of the access fee. sradovich on DSK3GMQ082PROD with NOTICES 2. Amended Definition of Non-Display Use The Participants are proposing to amend the definition of ‘‘Non-Display Use’’ in footnote eight of the Plans’ fee schedules to explicitly state that any use of data that does not make data visibly available to a data recipient on a device is a Non-Display Use. The Participants are proposing to make a parallel amendment to footnote two of the Plans’ fee schedules to state that the device fee will only be applicable where the data is visibly available to the data recipient; any other data use on a device will be considered Non-Display Use.7 In the October 2014 Non-Display Filing, the Participants recognized the relative values of non-display versus display data usage. With the proliferation of automated and algorithmic trading, non-display devices consume large amounts of data and are critical to a firm’s businesses. The black boxes and application programming interfaces utilized by these firms process data far more quickly, and as a result, the relative value between nondisplay and display data usage is pronounced. The disparity in value between non-display and display data usage led the Participants to decrease the professional subscriber device charges in the October 2014 Non6 A data recipient can be charged both the nondisplay fee and the device fee. For instance, a data recipient may be displaying data on a device and also using data to operate an ATS. In such instances, the data recipient would be charged both a device fee and a non-display fee (the data recipient would also be charged an access fee due to its non-display use, as described below). 7 In addition to the amendments outlined in this transmittal letter, the Participants are making nonsubstantive edits to correct capitalization in the Plans’ fee schedules. VerDate Sep<11>2014 17:14 Mar 27, 2017 Jkt 241001 Display Filing while establishing the non-display fees. However, if data is used for non-display purposes, but is subject to the device fee and not the non-display fee, such interpretation would disrupt the balance struck by the Participants in setting the fees. The Participants believe that amending the language of the fee schedule will create a clear understanding of when the non-display fee is applicable and therefore effectuate the change originally contemplated by the October 2014 Non-Display Filing. To notify data recipients of the amended definition, the Participants will be updating the CTA Market Data NonDisplay Use Policy. The CTA Market Data Non-Display Use Policy describes the applicability of the non-display fee to specific uses of real-time Network A and Network B last sale information and quotation information. The CTA Market Data Non-Display Use Policy currently reflects the applicability of the nondisplay fee as established by the October 2014 Non-Display Filing. The Participants are amending this policy to include the updated definition of NonDisplay Use as reflected in the Plans’ amended fee schedules. The CTA Market Data Non-Display Use Policy is also being updated to specify that Redistributors that provide market data to their customers and/or data recipients who use the data for Non-Display Use must submit a data feed request to the administrator, and must require that the customers and data recipients of such market data complete the necessary documentation for the data feed request. The Participants are also amending footnote two and footnote eight of the Plans’ fee schedules to make clear that the Participants reserve the right to make the sole determination as to whether a data recipient’s use is subject to the non-display fee or the device fee and, if subject to the non-display fee, the category of such Non-Display Use. 3. Access Fee Applicability The Participants are amending footnote ten of the Plans’ fee schedules to clarify when the access fee is applicable. Access fees are charged to those who obtain Network A and Network B data feeds. The Participants are not proposing to modify the current access fees. Instead, the Participants are proposing to clarify in the Plans’ fee schedules that the access fee is applicable if: (1) The data recipient uses the data for non-display; or (2) the data recipient receives the data in such a manner that the data can be manipulated and disseminated to one or more devices, display or otherwise, regardless of encryption or instructions PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 15405 from the redistribution vendor regarding who has authorized access to the data. As discussed above, the device fee is applicable when data is displayed only. However, if the data is also used for non-display or can be manipulated and disseminated, the data recipient is subject to the access fee. For example, a data recipient may be receiving data to display on a device. In addition to being displayed on the device, if the data recipient is also able to manipulate the data via a calculation to create additional data and distribute the end result data to other users in a display format or for non-display use, that data recipient should also be subject to the access fee. In such case, even if the data recipient is reporting use for display purposes and is subject to the device fee, if the data is being manipulated and disseminated, that data recipient should also be subject to an access fee and any applicable additional device fees or non-display use fee, as may be applicable for that data recipient’s use of the data. As with the proposed amendments to the fee schedule described above, this proposed clarification to the access fee is designed to address that the manner by which a data recipient uses the data drives which fees apply. B. Governing or Constituent Documents Not applicable. C. Implementation of the Amendments Pursuant to Rule 608(b)(3)(i) under Regulation NMS, the Participants have designated the proposed clarification as establishing or changing fees and are submitting the amendment for immediate effectiveness. D. Development and Implementation Phases See Item C above. E. Analysis of Impact on Competition The Amendments proposed herein do not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. Additionally, the Participants do not believe that the proposed amendments introduce terms that are unreasonably discriminatory for the purposes of Section 11A(c)(1)(D) of the Act. The Participants have submitted this amendment to simply clarify the applicability of the non-display fees established in the October 2014 NonDisplay Filing. The Amendments proposed herein will allow data recipients to understand whether a given use will be subject to the nondisplay fee, the device fee, or the access fee, or a combination of these fees. E:\FR\FM\28MRN1.SGM 28MRN1 15406 Federal Register / Vol. 82, No. 58 / Tuesday, March 28, 2017 / Notices As explained in the October 2014 Non-Display Filing, the non-display fees were established to comport with the proliferation of the use of data for dark pools and other non-display trading applications. In conjunction with the establishment of non-display fees, the Participants reduced the rates for professional subscriber devices in hopes of fostering the widespread availability of real-time market data. At the same time, the non-display fees allowed those who make non-display uses of data to make appropriate contributions to the costs of collecting, processing, and redistributing the data. The clarification proposed herein maintains the balance struck by the Participants in reducing the device fee while establishing the non-display fees. Additionally, the Participants believe that the Amendments will have a positive effect on competition because the Amendments will ensure that different vendors are classifying their customer’s usage in the same manner. A vendor would gain a competitive advantage if they were willing to incorrectly classify a customer’s use as subject to the lower device fee rather than the non-display fee. By eliminating the ambiguity in the Plans’ fee schedules, the Participants believe that all vendors will be subjected to and subject their customers to the similar fees for similar uses of data. sradovich on DSK3GMQ082PROD with NOTICES F. Written Understanding or Agreements Relating to Interpretation of, or Participation in, Plan As previously stated, the Participants have amended the CTA Market Data Non-Display Use Policy to implement the proposed Amendments. A copy of the changes to the Non-Display Use Policy is attached to the Amendment. G. Approval by Sponsors in Accordance With Plan Section XII (b)(iii) of the CTA Plan provides that ‘‘[a]ny addition of any charge to . . . the charges set forth in Exhibit E . . . shall be effected by an amendment to this CTA Plan . . . that is approved by affirmative vote of not less than two-thirds of all of the then voting members of CTA. Any such amendment shall be executed on behalf of each Participant that appointed a voting member of CTA who approves such amendment and shall be filed with the SEC.’’ Further, Section IX(b)(iii) of the CQ Plan provides that ‘‘additions, deletions, or modifications to any charges under this CQ Plan shall be effected by an amendment . . . that is approved by affirmative vote of twothirds of all the members of the Operating Committee.’’ VerDate Sep<11>2014 17:14 Mar 27, 2017 Jkt 241001 The Participants have executed this Amendment and represent not less than two-thirds of all of the parties to the Plan. That satisfies the Plans’ Participant-approval requirements H. Description of Operation of Facility Contemplated by the Proposed Amendments Not applicable. I. Terms and Conditions of Access Not applicable. J. Method of Determination and Imposition, and Amount of, Fees and Charges The Participants believe that the proposed fee is fair and reasonable and provides for an equitable allocation of dues, fees, and other charges among vendors, data recipients and other persons. As previously stated, the Amendments proposed herein simply clarify the amendments to fees set forth in the October 2014 Non-Display Filing and ensure that the relative value of non-display versus display data usage is reflected in the fees charged for such uses. The Participants have consulted with members of the industry regarding the proposed fee amendments contained herein. K. Method and Frequency of Processor Evaluation Not applicable. L. Dispute Resolution Not applicable. II. Rule 601(a) A. Equity Securities for Which Transaction Reports Shall Be Required by the Plan Not applicable. B. Reporting Requirements Not applicable. C. Manner of Collecting, Processing, Sequencing, Making Available and Disseminating Last Sale Information Not applicable. D. Manner of Consolidation Not applicable. E. Standards and Methods Ensuring Promptness, Accuracy and Completeness of Transaction Reports Not applicable F. Rules and Procedures Addressed to Fraudulent or Manipulative Dissemination Not applicable. PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 G. Terms of Access to Transaction Reports Not applicable. H. Identification of Marketplace of Execution Not applicable. III. Solicitation of Comments The Commission seeks general comments on the Amendments. Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed Amendments are 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– CTA/CQ–2017–02 on the subject line. Paper Comments • Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CTA/CQ–2017–02. 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 Amendments that are filed with the Commission, and all written communications relating to the Amendments 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 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the Amendments also will be available for inspection and copying at the principal office of the CTA. 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–CTA/CQ–2017–02 and should be submitted on or before April 18, 2017. E:\FR\FM\28MRN1.SGM 28MRN1 Federal Register / Vol. 82, No. 58 / Tuesday, March 28, 2017 / Notices By the Commission. Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–06083 Filed 3–27–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 32540; File No. 812–14677] AB Bond Fund, Inc., et al. March 22, 2017. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice. sradovich on DSK3GMQ082PROD with NOTICES AGENCY: Notice of an application for an order pursuant to: (a) Section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) granting an exemption from sections 18(f) and 21(b) of the Act; (b) section 12(d)(1)(J) of the Act granting an exemption from section 12(d)(1) of the Act; (c) sections 6(c) and 17(b) of the Act granting an exemption from sections 17(a)(1), 17(a)(2) and 17(a)(3) of the Act; and (d) section 17(d) of the Act and rule 17d–1 under the Act to permit certain joint arrangements and transactions. Applicants request an order that would permit certain registered open-end management investment companies to participate in a joint lending and borrowing facility. APPLICANTS: AB Bond Fund, Inc., AB Cap Fund, Inc., AB Core Opportunities Fund, Inc., AB Corporate Shares, AB Discovery Growth Fund, Inc., AB Equity Income Fund, Inc., AB Government Exchange Reserves, AB Fixed-Income Shares, Inc., AB Global Bond Fund, Inc., AB Global Real Estate Investment Fund, Inc., AB Global Risk Allocation Fund, Inc., AB Sustainable Global Thematic, Inc., AB Relative Value Fund, Inc., AB High Income Fund, Inc., AB Institutional Funds, Inc., AB International Growth Fund, Inc., AB Large Cap Growth Fund, Inc., AB Municipal Income Fund, Inc., AB Municipal Income Fund II, AB Trust, AB Unconstrained Bond Fund, Inc., AB Variable Products Series Fund, Inc., Sanford C. Bernstein Fund, Inc., Sanford C. Bernstein Fund II, Inc., Bernstein Fund, Inc., The AB Pooling Portfolios, The AB Portfolios, Alliance California Municipal Income Fund, Inc., Alliance Bernstein Global High Income Fund, Inc., AllianceBernstein National Municipal Income Fund, Inc. and AB Multi-Manager Alternative Fund, each an investment company organized as a Maryland corporation or a Massachusetts business trust and VerDate Sep<11>2014 17:14 Mar 27, 2017 Jkt 241001 registered under the Act as an open-end or closed-end management investment company,1 and AllianceBernstein L.P. (the ‘‘Adviser’’), a Delaware limited partnership registered as an investment adviser under the Investment Advisers Act of 1940. FILING DATES: The application was filed on July 22, 2016 and amended on January 11, 2017. HEARING OR NOTIFICATION OF HEARING: An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on April 17, 2017 and should be accompanied by proof of service on the applicants, in the form of an affidavit, or, for lawyers, a certificate of service. Pursuant to Rule 0–5 under the Act, hearing requests should state the nature of the writer’s interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC, 20549–1090; Applicants: Emile D. Wrapp, AllianceBernstein L.P., 1345 Avenue of the Americas, New York, New York 10105 and Paul M. Miller, Seward & Kissel LLP, 901 K Street NW., Suite 800, Washington, DC 20001. FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Senior Counsel, at (202) 551–6868 or Nadya Roytblat, Assistant Chief Counsel, at (202) 551– 6823 (Division of Investment Management, Chief Counsel’s Office). SUPPLEMENTARY INFORMATION: The following is a summary of the application. The complete application may be obtained via the Commission’s Web site by searching for the file number, or an applicant using the Company name box, at http:// www.sec.gov/search/search.htm or by calling (202) 551–8090. Summary of the Application 1. Applicants request an order that would permit the applicants to participate in an interfund lending facility where each Fund could lend money directly to and borrow money 1 The Funds (as defined below) that are closedend management investment companies will not participate as borrowers in the interfund lending facility. PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 15407 directly from other Funds to cover unanticipated cash shortfalls, such as unanticipated redemptions or trade fails.2 The Funds will not borrow under the facility for leverage purposes and the loans’ duration will be no more than 7 days.3 2. Applicants anticipate that the proposed facility would provide a borrowing Fund with a source of liquidity at a rate lower than the bank borrowing rate at times when the cash position of the Fund is insufficient to meet temporary cash requirements. In addition, Funds making short-term cash loans directly to other Funds would earn interest at a rate higher than they otherwise could obtain from investing their cash in repurchase agreements or certain other short term money market instruments. Thus, applicants assert that the facility would benefit both borrowing and lending Funds. 3. Applicants agree that any order granting the requested relief will be subject to the terms and conditions stated in the application. Among others, the Adviser, through a designated committee, would administer the facility as a disinterested fiduciary as part of its duties under the investment management and administrative agreements with the Funds and would receive no additional fee as compensation for its services in connection with the administration of the facility. The facility would be subject to oversight and certain approvals by the Funds’ Board, including, among others, approval of the interest rate formula and of the method for allocating loans across Funds, as well as review of the process in place to evaluate the liquidity implications for the Funds. A Fund’s aggregate outstanding interfund loans will not exceed 15% of its net assets, and the Fund’s loans to any one Fund will not exceed 5% of the lending Fund’s net assets.4 4. Applicants assert that the facility does not raise the concerns underlying 2 Applicants request that the order apply to the applicants and to any existing or future registered open-end or closed-end management investment company or series thereof for which the Adviser or any successor thereto or an investment adviser controlling, controlled by, or under common control with the Adviser or any successor thereto serves as investment adviser (each a ‘‘Fund’’ and collectively the ‘‘Funds’’ and each such investment adviser an ‘‘Adviser’’). For purposes of the requested order, ‘‘successor’’ is limited to any entity that results from a reorganization into another jurisdiction or a change in the type of a business organization. 3 Any Fund, however, will be able to call a loan on one business day’s notice. 4 Under certain circumstances, a borrowing Fund will be required to pledge collateral to secure the loan. E:\FR\FM\28MRN1.SGM 28MRN1

Agencies

[Federal Register Volume 82, Number 58 (Tuesday, March 28, 2017)]
[Notices]
[Pages 15404-15407]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-06083]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80300; File No. SR-CTA/CQ-2017-02]


Consolidated Tape Association; Notice of Filing and Immediate 
Effectiveness of the Twenty-Second Charges Amendment to the Second 
Restatement of the CTA Plan and the Thirteenth Charges Amendment to the 
Restated CQ Plan

March 23, 2017.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on March 2, 2017, the Consolidated Tape Association (``CTA'') Plan 
participants (``Participants'') \3\ filed with the Securities and 
Exchange Commission (``Commission'') a proposal to amend the Second 
Restatement of the CTA Plan and the Restated Consolidated Quotation 
(``CQ'') Plan (``Plans'').\4\ These amendments represent the twenty-
second Charges Amendment to the CTA Plan and the thirteenth Charges 
Amendment to the CQ Plan (``Amendments''). The Amendments seek to amend 
the Plans' fee schedule as well as the non-display use policy to 
clarify the applicability on the non-display fee, the device fee, and 
the access fee.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ The Participants are: BATS Exchange, Inc., BATS-Y Exchange, 
Inc., Chicago Board Options Exchange, Inc., Chicago Stock Exchange, 
Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry 
Regulatory Authority, Inc., International Securities Exchange, LLC, 
Investors' Exchange LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., 
Nasdaq Stock Market LLC, National Stock Exchange, New York Stock 
Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc.
    \4\ See Securities Exchange Act Release Nos. 10787 (May 10, 
1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan 
effective); 15009 (July 28, 1978), 43 FR 34851 (August 7, 1978) 
(temporarily authorizing the CQ Plan); and 16518 (January 22, 1980), 
45 FR 6521 (January 28, 1980) (permanently authorizing the CQ Plan). 
The most recent restatement of both Plans was in 1995. The CTA Plan, 
pursuant to which markets collect and disseminate last sale price 
information for non-NASDAQ listed securities, is a ``transaction 
reporting plan'' under Rule 601 under the Act, 17 CFR 242.601, and a 
``national market system plan'' under Rule 608 under the Act, 17 CFR 
242.608. The CQ Plan, pursuant to which markets collect and 
disseminate bid/ask quotation information for listed securities, is 
a ``national market system plan'' under Rule 608 under the Act, 17 
CFR 242.608.
---------------------------------------------------------------------------

    The Commission is publishing this notice to solicit comments from 
interested persons on the proposed Amendments.

I. Rule 608(a)

A. Purpose of the Amendments

1. Background
    In October 2014, the Participants amended the Plans' fee schedules 
to establish fees for non-display uses of data and to reduce the device 
fees assessed on professional subscribers.\5\ In so doing, the 
Participants determined that such a change provided an equitable 
allocation of fees to the industry that would reflect the value of non-
display data usage (subject to the non-display fees) versus display 
data usage (subject to the lower device fees). At that time, non-
display use was defined as consisting of accessing, processing, or 
consuming real-time Network A or Network B quotation information or 
last sale price information, whether delivered via direct and/or 
redistributor data feeds, for a purpose other than in support of a data 
recipient's display or further internal or external distribution. The 
Participants established three categories of non-display uses of market 
data:
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 73278 (October 1, 
2014), 79 FR 60536 (October 7, 2014) (``October 2014 Non-Display 
Filing'').
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     Category 1 applies when a data recipient makes non-display 
uses of real-time market data on its own behalf.
     Category 2 applies when a data recipient makes non-display 
uses of real-time market data on behalf of its clients.
     Category 3 applies when a data recipient makes non-display 
uses of real-time market data for the purpose of internally matching 
buy and sell orders within an organization.
    Data recipients can be charged for each of the three categories of 
non-display uses. Category 3 is the only non-display fee that can be 
charged multiple times; a data recipient would be charged for each ATS, 
exchange, or ECN operated by the data recipient. In the October 2014 
Non-Display Filing, the Participants also provided the following non-
exhaustive list of examples of non-display use:
     Any trading in any asset class;
     Automated order or quote generation and/or order pegging;
     Price referencing for algorithmic trading;
     Price referencing for smart order routing;
     Operations control programs;
     Investment analysis;
     Order verification;
     Surveillance programs;
     Risk management;
     Compliance; and
     Portfolio valuation.

[[Page 15405]]

    The Participants propose to clarify that any use of data that does 
not make the data visibly available to the data recipient on a device 
should be considered non-display use. When a data recipient is using 
data solely for display purposes, the data recipient will only be 
charged the device fee.\6\ As a result, the Participants believe it 
would be beneficial to provide additional clarification regarding the 
definition of non-display use to resolve any ambiguity.
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    \6\ A data recipient can be charged both the non-display fee and 
the device fee. For instance, a data recipient may be displaying 
data on a device and also using data to operate an ATS. In such 
instances, the data recipient would be charged both a device fee and 
a non-display fee (the data recipient would also be charged an 
access fee due to its non-display use, as described below).
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    The Participants further propose to clarify that a data recipient 
is subject to the access fee when the data it is receiving is used for 
non-display, or can be manipulated and disseminated to other devices 
even if the data is also displayed on a device. As described below, the 
Participants are amending the Plans' fee schedules to clarify the 
applicability of the access fee.
2. Amended Definition of Non-Display Use
    The Participants are proposing to amend the definition of ``Non-
Display Use'' in footnote eight of the Plans' fee schedules to 
explicitly state that any use of data that does not make data visibly 
available to a data recipient on a device is a Non-Display Use. The 
Participants are proposing to make a parallel amendment to footnote two 
of the Plans' fee schedules to state that the device fee will only be 
applicable where the data is visibly available to the data recipient; 
any other data use on a device will be considered Non-Display Use.\7\
---------------------------------------------------------------------------

    \7\ In addition to the amendments outlined in this transmittal 
letter, the Participants are making non-substantive edits to correct 
capitalization in the Plans' fee schedules.
---------------------------------------------------------------------------

    In the October 2014 Non-Display Filing, the Participants recognized 
the relative values of non-display versus display data usage. With the 
proliferation of automated and algorithmic trading, non-display devices 
consume large amounts of data and are critical to a firm's businesses. 
The black boxes and application programming interfaces utilized by 
these firms process data far more quickly, and as a result, the 
relative value between non-display and display data usage is 
pronounced. The disparity in value between non-display and display data 
usage led the Participants to decrease the professional subscriber 
device charges in the October 2014 Non-Display Filing while 
establishing the non-display fees. However, if data is used for non-
display purposes, but is subject to the device fee and not the non-
display fee, such interpretation would disrupt the balance struck by 
the Participants in setting the fees.
    The Participants believe that amending the language of the fee 
schedule will create a clear understanding of when the non-display fee 
is applicable and therefore effectuate the change originally 
contemplated by the October 2014 Non-Display Filing. To notify data 
recipients of the amended definition, the Participants will be updating 
the CTA Market Data Non-Display Use Policy. The CTA Market Data Non-
Display Use Policy describes the applicability of the non-display fee 
to specific uses of real-time Network A and Network B last sale 
information and quotation information. The CTA Market Data Non-Display 
Use Policy currently reflects the applicability of the non-display fee 
as established by the October 2014 Non-Display Filing. The Participants 
are amending this policy to include the updated definition of Non-
Display Use as reflected in the Plans' amended fee schedules. The CTA 
Market Data Non-Display Use Policy is also being updated to specify 
that Redistributors that provide market data to their customers and/or 
data recipients who use the data for Non-Display Use must submit a data 
feed request to the administrator, and must require that the customers 
and data recipients of such market data complete the necessary 
documentation for the data feed request.
    The Participants are also amending footnote two and footnote eight 
of the Plans' fee schedules to make clear that the Participants reserve 
the right to make the sole determination as to whether a data 
recipient's use is subject to the non-display fee or the device fee 
and, if subject to the non-display fee, the category of such Non-
Display Use.
3. Access Fee Applicability
    The Participants are amending footnote ten of the Plans' fee 
schedules to clarify when the access fee is applicable. Access fees are 
charged to those who obtain Network A and Network B data feeds. The 
Participants are not proposing to modify the current access fees. 
Instead, the Participants are proposing to clarify in the Plans' fee 
schedules that the access fee is applicable if: (1) The data recipient 
uses the data for non-display; or (2) the data recipient receives the 
data in such a manner that the data can be manipulated and disseminated 
to one or more devices, display or otherwise, regardless of encryption 
or instructions from the redistribution vendor regarding who has 
authorized access to the data.
    As discussed above, the device fee is applicable when data is 
displayed only. However, if the data is also used for non-display or 
can be manipulated and disseminated, the data recipient is subject to 
the access fee. For example, a data recipient may be receiving data to 
display on a device. In addition to being displayed on the device, if 
the data recipient is also able to manipulate the data via a 
calculation to create additional data and distribute the end result 
data to other users in a display format or for non-display use, that 
data recipient should also be subject to the access fee. In such case, 
even if the data recipient is reporting use for display purposes and is 
subject to the device fee, if the data is being manipulated and 
disseminated, that data recipient should also be subject to an access 
fee and any applicable additional device fees or non-display use fee, 
as may be applicable for that data recipient's use of the data. As with 
the proposed amendments to the fee schedule described above, this 
proposed clarification to the access fee is designed to address that 
the manner by which a data recipient uses the data drives which fees 
apply.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of the Amendments

    Pursuant to Rule 608(b)(3)(i) under Regulation NMS, the 
Participants have designated the proposed clarification as establishing 
or changing fees and are submitting the amendment for immediate 
effectiveness.

D. Development and Implementation Phases

    See Item C above.

E. Analysis of Impact on Competition

    The Amendments proposed herein do not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act. Additionally, the Participants do not believe that 
the proposed amendments introduce terms that are unreasonably 
discriminatory for the purposes of Section 11A(c)(1)(D) of the Act. The 
Participants have submitted this amendment to simply clarify the 
applicability of the non-display fees established in the October 2014 
Non-Display Filing. The Amendments proposed herein will allow data 
recipients to understand whether a given use will be subject to the 
non-display fee, the device fee, or the access fee, or a combination of 
these fees.

[[Page 15406]]

    As explained in the October 2014 Non-Display Filing, the non-
display fees were established to comport with the proliferation of the 
use of data for dark pools and other non-display trading applications. 
In conjunction with the establishment of non-display fees, the 
Participants reduced the rates for professional subscriber devices in 
hopes of fostering the widespread availability of real-time market 
data. At the same time, the non-display fees allowed those who make 
non-display uses of data to make appropriate contributions to the costs 
of collecting, processing, and redistributing the data. The 
clarification proposed herein maintains the balance struck by the 
Participants in reducing the device fee while establishing the non-
display fees.
    Additionally, the Participants believe that the Amendments will 
have a positive effect on competition because the Amendments will 
ensure that different vendors are classifying their customer's usage in 
the same manner. A vendor would gain a competitive advantage if they 
were willing to incorrectly classify a customer's use as subject to the 
lower device fee rather than the non-display fee. By eliminating the 
ambiguity in the Plans' fee schedules, the Participants believe that 
all vendors will be subjected to and subject their customers to the 
similar fees for similar uses of data.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    As previously stated, the Participants have amended the CTA Market 
Data Non-Display Use Policy to implement the proposed Amendments. A 
copy of the changes to the Non-Display Use Policy is attached to the 
Amendment.

G. Approval by Sponsors in Accordance With Plan

    Section XII (b)(iii) of the CTA Plan provides that ``[a]ny addition 
of any charge to . . . the charges set forth in Exhibit E . . . shall 
be effected by an amendment to this CTA Plan . . . that is approved by 
affirmative vote of not less than two-thirds of all of the then voting 
members of CTA. Any such amendment shall be executed on behalf of each 
Participant that appointed a voting member of CTA who approves such 
amendment and shall be filed with the SEC.'' Further, Section 
IX(b)(iii) of the CQ Plan provides that ``additions, deletions, or 
modifications to any charges under this CQ Plan shall be effected by an 
amendment . . . that is approved by affirmative vote of two-thirds of 
all the members of the Operating Committee.''
    The Participants have executed this Amendment and represent not 
less than two-thirds of all of the parties to the Plan. That satisfies 
the Plans' Participant-approval requirements

H. Description of Operation of Facility Contemplated by the Proposed 
Amendments

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

J. Method of Determination and Imposition, and Amount of, Fees and 
Charges

    The Participants believe that the proposed fee is fair and 
reasonable and provides for an equitable allocation of dues, fees, and 
other charges among vendors, data recipients and other persons. As 
previously stated, the Amendments proposed herein simply clarify the 
amendments to fees set forth in the October 2014 Non-Display Filing and 
ensure that the relative value of non-display versus display data usage 
is reflected in the fees charged for such uses.
    The Participants have consulted with members of the industry 
regarding the proposed fee amendments contained herein.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 601(a)

A. Equity Securities for Which Transaction Reports Shall Be Required by 
the Plan

    Not applicable.

B. Reporting Requirements

    Not applicable.

C. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

D. Manner of Consolidation

    Not applicable.

E. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable

F. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

G. Terms of Access to Transaction Reports

    Not applicable.

H. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The Commission seeks general comments on the Amendments. Interested 
persons are invited to submit written data, views, and arguments 
concerning the foregoing, including whether the proposed Amendments are 
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-CTA/CQ-2017-02 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CTA/CQ-2017-02. 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 Amendments that are filed with 
the Commission, and all written communications relating to the 
Amendments 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 on official business days between 
the hours of 10:00 a.m. and 3:00 p.m. Copies of the Amendments also 
will be available for inspection and copying at the principal office of 
the CTA.
    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-CTA/CQ-2017-02 
and should be submitted on or before April 18, 2017.


[[Page 15407]]


    By the Commission.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-06083 Filed 3-27-17; 8:45 am]
 BILLING CODE 8011-01-P