Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Anonymous Trade Reporting and Clearing, 23078-23080 [2017-10128]
Download as PDF
<![CDATA[
23078
Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices
U.S.C. 3642 and 39 CFR 3020.30 et seq.;
Public Representative: Christopher C.
Mohr; Comments Due: May 22, 2017.
3. Docket No(s).: MC2017–133 and
CP2017–188; Filing Title: Request of the
United States Postal Service to Add
Priority Mail Contract 319 to
Competitive Product List and Notice of
Filing (Under Seal) of Unredacted
Governors’ Decision, Contract, and
Supporting Data; Filing Acceptance
Date: May 12, 2017; Filing Authority: 39
U.S.C. 3642 and 39 CFR 3020.30 et seq.;
Public Representative: Christopher C.
Mohr; Comments Due: May 22, 2017.
This notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
[FR Doc. 2017–10119 Filed 5–18–17; 8:45 am]
BILLING CODE 7710–FW–P
POSTAL SERVICE
Effective date: May 19, 2017.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on May 12, 2017,
it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 319 to Competitive
Product List. Documents are available at
www.prc.gov, Docket Nos. MC2017–133,
CP2017–188.
SUPPLEMENTARY INFORMATION:
[FR Doc. 2017–10116 Filed 5–18–17; 8:45 am]
BILLING CODE 7710–12–P
Postal ServiceTM.
Notice.
AGENCY:
POSTAL SERVICE
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Effective date: May 19, 2017.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on May 12, 2017,
it filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Express, Priority Mail, & First-Class
Package Service Contract 19 to
Competitive Product List. Documents
are available at www.prc.gov, Docket
Nos. MC2017–132, CP2017–187.
SUMMARY:
Product Change—Priority Mail
Negotiated Service Agreement
AGENCY:
ACTION:
Postal ServiceTM.
Notice.
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
SUMMARY:
DATES:
Effective date: May 19, 2017.
FOR FURTHER INFORMATION CONTACT:
Elizabeth A. Reed, 202–268–3179.
POSTAL SERVICE
The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on May 5, 2017, it
filed with the Postal Regulatory
Commission a Request of the United
States Postal Service to Add Priority
Mail Contract 317 to Competitive
Product List. Documents are available at
www.prc.gov, Docket Nos. MC2017–129,
CP2017–182.
Product Change—Priority Mail
Negotiated Service Agreement
Stanley F. Mires,
Attorney, Federal Compliance.
Stanley F. Mires,
Attorney, Federal Compliance.
[FR Doc. 2017–10117 Filed 5–18–17; 8:45 am]
BILLING CODE 7710–12–P
asabaliauskas on DSK3SPTVN1PROD with NOTICES
DATES:
Stanley F. Mires,
Attorney, Federal Compliance.
Product Change—Priority Mail
Express, Priority Mail, & First-Class
Package Service Negotiated Service
Agreement
ACTION:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
SUMMARY:
[FR Doc. 2017–10115 Filed 5–18–17; 8:45 am]
Postal ServiceTM.
ACTION: Notice.
AGENCY:
VerDate Sep<11>2014
19:15 May 18, 2017
SUPPLEMENTARY INFORMATION:
BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80673; File No. SR–CHX–
2017–09]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Regarding
Anonymous Trade Reporting and
Clearing
May 15, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on May 11,
2017, the Chicago Stock Exchange, Inc.
(‘‘CHX’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
CHX proposes to amend Article 21,
Rule 5 of the Rules of the Exchange
(‘‘CHX Rules’’) regarding anonymous
trade reporting and clearing. The text of
this proposed rule change is available
on the Exchange’s Web site at
(www.chx.com) and in the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
CHX included statements concerning
the purpose of and basis for the
proposed rule changes [sic] and
discussed any comments it received on
the proposed rule change. The text of
these statements may be examined at
the places specified in Item IV below.
The CHX has prepared summaries, set
forth in sections A, B and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
Article 21, Rule 5 to mandate anonymity
for all transaction and clearing reports
resulting from all executions on the
1 15
2 17
Jkt 241001
PO 00000
Frm 00126
Fmt 4703
Sfmt 4703
U.S.C. 78s(b)(1).
CFR 240.19b–4.
E:\FR\FM\19MYN1.SGM
19MYN1
Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices
Exchange, which would include
executions resulting from both singlesided and cross orders,3 subject to
certain current exceptions. To this end,
the Exchange proposes to eliminate (1)
the requirement that a Participant 4
affirmatively request that its identity
remain anonymous on transaction and
clearing reports and (2) the exclusion of
cross orders from the scope of Article
21, Rule 5.
The Exchange is proposing the
amendments to update its outdated
trade and clearing anonymity rule and
to harmonize the rule with similar rules
and practices of other exchanges, such
as Bats BYX Exchange and the Investors
Exchange (‘‘IEX’’).5 Aside from these
changes, the Exchange does not propose
any other amendments to the CHX
Rules.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
(1) Background
In October 2007, the Exchange
adopted current Article 21, Rule 5
(Anonymous Trade Reporting and
Clearing).6 Thereunder, current Rule
5(a) provides that, except as provided
under current Rule 5(e), transaction
reports for all trades executed on the
Exchange will indicate the details of the
transaction, but will not reveal a
Participant’s identity as a contra party if
that Participant has requested that its
identity remain anonymous. Also,
current Rule 5(e) provides that the
provisions of Rule 5 shall not apply to
any type of cross trade executed on the
Exchange, the result of which is that
transaction reports for cross executions
will always reveal the identity of the
parties.
However, in recent years, trading
activity on the Exchange has evolved
such that trade and clearing anonymity
have become routinely necessary for
Participants for all types of executions
on the Exchange. In particular, trade
and clearing anonymity have become
ubiquitous market wide and many
Participants are members of other
national securities exchanges that
mandate trade and clearing anonymity,
subject to certain exceptions.7 At CHX,
all of the most active Participants have
requested trade anonymity and the
Exchange is not aware of any Participant
that requires its identity be disclosed on
transaction and clearing reports.
3 See
CHX Article 1, Rule 2(a)(2) defining ‘‘cross
order.’’
4 A Participant is a ‘‘member’’ of the Exchange for
purposes of the Act. See CHX Article 1, Rule 1(s).
5 See Bats BYX Rule 11.15(d); see also IEX Rule
11.250(c).
6 See Exchange Act Release No. 56704 (October
25, 2007), 72 FR 61921 (November 1, 2007) (SR–
CHX–2007–20).
7 See supra note 5.
VerDate Sep<11>2014
19:15 May 18, 2017
Jkt 241001
Consequently, the Exchange believes
that the current requirement that a
Participant elect anonymity for singlesided executions imposes an
unnecessary compliance burden on
Participants, especially on those
Participants that are members of other
national securities exchanges with
mandatory trade and clearing
anonymity, which would be eliminated
by harmonizing Article 21, Rule 5 with
the rules of other national securities
exchanges, such [sic] Bats BYX.
With respect to cross executions, the
Exchange believes that the original
purpose for excluding cross executions
from the scope of Article 21, Rule 5,
which was to provide Participants [sic]
‘‘with a sufficiently detailed trade or
clearing report to permit it to effectively
service its customers’ needs,’’ 8 has been
obviated by enhancements to back office
operations realized by Participants that
submit cross orders. As such, the
disclosure of the identity of parties to
the trade on a cross transaction report is
no longer necessary. In fact, the
Participants that submit cross orders
have recently expressed a strong
preference for anonymous transaction
reports. Accordingly, the Exchange
believes it necessary and appropriate to
apply mandatory trade and clearing
anonymity to cross executions.
(2) Amended Article 21, Rule 5
In light of the above, the Exchange
proposes to amend current Rule 5(a) to
mandate trade and clearing anonymity
for all executions on the Exchange.
Specifically, amended Rule 5(a) would
provide that transaction reports
produced by the Exchange will indicate
the details of transactions executed on
the Exchange, but shall not reveal contra
party identities. Amended Rule 5(a)
would further provide that except as set
forth in paragraph (b) below,9
transactions executed on the Exchange
will also be cleared and settled
anonymously. In addition, in order to
mandate trade and clearing anonymity
for cross executions, the Exchange
proposes to delete current Rule 5(e) in
its entirety and, since two or more
Participants may be parties to a
8 See
SR–CHX–2007–20, id, at 61921.
CHX Article 21, Rule 5(b) provides that
the Exchange will reveal the identity of a
Participant or a Participant’s clearing firm in the
following circumstances: (1) For regulatory
purposes or to comply with an order of a court or
arbitrator; (2) when the National Securities Clearing
Corporation (‘‘NSCC’’) ceases to act for a Participant
or a Participant’s clearing firm and NSCC
determines not to guarantee the settlement of a
Participant’s trades; or (3) if both parties to the trade
consent.
9 Current
PO 00000
Frm 00127
Fmt 4703
Sfmt 4703
23079
particular cross execution,10 the
Exchange proposes to amend current
Rule 5(b)(3) 11 to provide that the
Exchange will reveal the identity of a
Participant or a Participant’s clearing
firm if all parties to the trade consent.
2. Statutory Basis
The Exchange believes that proposed
rule change is consistent with Section
6(b) of the Act 12 in general and Section
6(b)(5) of the Act 13 in particular, which
requires, among other things, that the
Exchange’s rules be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, protect
investors and the public interest.
In particular, the Exchange believes
that the proposed rule change will
remove impediments to and perfect the
mechanism of a free and open market
and a national market system by
promoting consistency and uniformity
among different markets 14 regarding
trade and clearing anonymity. For
Participants that are members of other
exchanges, the proposed rule change
will result in efficiencies with respect to
such Participants’ rule compliance
efforts.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
rule change will reduce the regulatory
burden placed on market participants
that are members of various markets, as
well as reduce administrative burden on
the Exchange. The Exchange believes
that the harmonization of the
anonymous trade reporting and clearing
provisions across the various markets 15
will reduce burdens on competition by
removing impediments to participation
in the national market system.
10 See Exchange Act Release No. 77785 (May 9,
2016), 81 FR 29936 (May 13, 2016) (SR–CHX–2016–
06).
11 See supra note 9.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
14 See supra note 5.
15 See id.
E:\FR\FM\19MYN1.SGM
19MYN1
23080
Federal Register / Vol. 82, No. 96 / Friday, May 19, 2017 / Notices
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 NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not (i) significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(iii) of the Act 16 and
subparagraph (f)(6) of Rule 19b–4
thereunder.17
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of its filing. However, Rule 19b–
4(f)(6)(iii) 18 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay so that the proposed rule change
will become operative on May 15, 2017.
The Exchange stated that the proposed
rule change is consistent with the
protection of investors and the public
interest by immediately eliminating the
administrative burden of enforcing an
outdated rule and by facilitating
compliance with CHX Rules by current
and new Participants that are already
accustomed to the mandatory trade and
clearing anonymity rules and practices
of other exchanges. Waiver of the
operative delay would allow the
Exchange, without delay, to make its
trade and clearing anonymity rules
consistent with the rules and practices
of other exchanges. The Commission
believes that waiver of the 30-day
operative delay is consistent with the
protection of investors and the public
interest as it will permit CHX to
harmonize its trade and clearing rules
with those of the other exchanges
without delay. Therefore, the
Commission designates the proposed
rule change to be operative on May 15,
2017.19
16 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
18 17 CFR 240.19b–4(f)(6)(iii).
19 For purposes only of waiving the 30-day
operative delay, the Commission also has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
17 17
VerDate Sep<11>2014
19:15 May 18, 2017
Jkt 241001
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
CHX–2017–09 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–CHX–2017–09. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
PO 00000
Frm 00128
Fmt 4703
Sfmt 4703
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–CHX–
2017–09, and should be submitted on or
before June 9, 2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–10128 Filed 5–18–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80674; File No. SR–ICEEU–
2017–007]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of
Proposed Rule Change, SecurityBased Swap Submission or Advance
Notice Relating to Amendments to the
ICE Clear Europe Limited Articles of
Association
May 15, 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 May 2,
2017, ICE Clear Europe Limited (‘‘ICE
Clear Europe’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
changes described in Items I, II, and III
below, which Items have been prepared
primarily by ICE Clear Europe. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change, Security-Based Swap
Submission, or Advance Notice
The principal purpose of the
proposed rule change is to modify
certain provisions of the ICE Clear
Europe Articles of Association.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change, Security-Based
Swap Submission or Advance Notice
In its filing with the Commission, ICE
Clear Europe 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
20 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\19MYN1.SGM
19MYN1
]]>Agencies
[Federal Register Volume 82, Number 96 (Friday, May 19, 2017)]
[Notices]
[Pages 23078-23080]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10128]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80673; File No. SR-CHX-2017-09]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding Anonymous Trade Reporting and Clearing
May 15, 2017.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on May 11, 2017, the Chicago Stock Exchange, Inc. (``CHX'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
CHX proposes to amend Article 21, Rule 5 of the Rules of the
Exchange (``CHX Rules'') regarding anonymous trade reporting and
clearing. The text of this proposed rule change is available on the
Exchange's Web site at (www.chx.com) and in the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the CHX included statements
concerning the purpose of and basis for the proposed rule changes [sic]
and discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The CHX has prepared summaries, set forth in sections A,
B and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend Article 21, Rule 5 to mandate
anonymity for all transaction and clearing reports resulting from all
executions on the
[[Page 23079]]
Exchange, which would include executions resulting from both single-
sided and cross orders,\3\ subject to certain current exceptions. To
this end, the Exchange proposes to eliminate (1) the requirement that a
Participant \4\ affirmatively request that its identity remain
anonymous on transaction and clearing reports and (2) the exclusion of
cross orders from the scope of Article 21, Rule 5.
---------------------------------------------------------------------------
\3\ See CHX Article 1, Rule 2(a)(2) defining ``cross order.''
\4\ A Participant is a ``member'' of the Exchange for purposes
of the Act. See CHX Article 1, Rule 1(s).
---------------------------------------------------------------------------
The Exchange is proposing the amendments to update its outdated
trade and clearing anonymity rule and to harmonize the rule with
similar rules and practices of other exchanges, such as Bats BYX
Exchange and the Investors Exchange (``IEX'').\5\ Aside from these
changes, the Exchange does not propose any other amendments to the CHX
Rules.
---------------------------------------------------------------------------
\5\ See Bats BYX Rule 11.15(d); see also IEX Rule 11.250(c).
---------------------------------------------------------------------------
(1) Background
In October 2007, the Exchange adopted current Article 21, Rule 5
(Anonymous Trade Reporting and Clearing).\6\ Thereunder, current Rule
5(a) provides that, except as provided under current Rule 5(e),
transaction reports for all trades executed on the Exchange will
indicate the details of the transaction, but will not reveal a
Participant's identity as a contra party if that Participant has
requested that its identity remain anonymous. Also, current Rule 5(e)
provides that the provisions of Rule 5 shall not apply to any type of
cross trade executed on the Exchange, the result of which is that
transaction reports for cross executions will always reveal the
identity of the parties.
---------------------------------------------------------------------------
\6\ See Exchange Act Release No. 56704 (October 25, 2007), 72 FR
61921 (November 1, 2007) (SR-CHX-2007-20).
---------------------------------------------------------------------------
However, in recent years, trading activity on the Exchange has
evolved such that trade and clearing anonymity have become routinely
necessary for Participants for all types of executions on the Exchange.
In particular, trade and clearing anonymity have become ubiquitous
market wide and many Participants are members of other national
securities exchanges that mandate trade and clearing anonymity, subject
to certain exceptions.\7\ At CHX, all of the most active Participants
have requested trade anonymity and the Exchange is not aware of any
Participant that requires its identity be disclosed on transaction and
clearing reports. Consequently, the Exchange believes that the current
requirement that a Participant elect anonymity for single-sided
executions imposes an unnecessary compliance burden on Participants,
especially on those Participants that are members of other national
securities exchanges with mandatory trade and clearing anonymity, which
would be eliminated by harmonizing Article 21, Rule 5 with the rules of
other national securities exchanges, such [sic] Bats BYX.
---------------------------------------------------------------------------
\7\ See supra note 5.
---------------------------------------------------------------------------
With respect to cross executions, the Exchange believes that the
original purpose for excluding cross executions from the scope of
Article 21, Rule 5, which was to provide Participants [sic] ``with a
sufficiently detailed trade or clearing report to permit it to
effectively service its customers' needs,'' \8\ has been obviated by
enhancements to back office operations realized by Participants that
submit cross orders. As such, the disclosure of the identity of parties
to the trade on a cross transaction report is no longer necessary. In
fact, the Participants that submit cross orders have recently expressed
a strong preference for anonymous transaction reports. Accordingly, the
Exchange believes it necessary and appropriate to apply mandatory trade
and clearing anonymity to cross executions.
---------------------------------------------------------------------------
\8\ See SR-CHX-2007-20, id, at 61921.
---------------------------------------------------------------------------
(2) Amended Article 21, Rule 5
In light of the above, the Exchange proposes to amend current Rule
5(a) to mandate trade and clearing anonymity for all executions on the
Exchange. Specifically, amended Rule 5(a) would provide that
transaction reports produced by the Exchange will indicate the details
of transactions executed on the Exchange, but shall not reveal contra
party identities. Amended Rule 5(a) would further provide that except
as set forth in paragraph (b) below,\9\ transactions executed on the
Exchange will also be cleared and settled anonymously. In addition, in
order to mandate trade and clearing anonymity for cross executions, the
Exchange proposes to delete current Rule 5(e) in its entirety and,
since two or more Participants may be parties to a particular cross
execution,\10\ the Exchange proposes to amend current Rule 5(b)(3) \11\
to provide that the Exchange will reveal the identity of a Participant
or a Participant's clearing firm if all parties to the trade consent.
---------------------------------------------------------------------------
\9\ Current CHX Article 21, Rule 5(b) provides that the Exchange
will reveal the identity of a Participant or a Participant's
clearing firm in the following circumstances: (1) For regulatory
purposes or to comply with an order of a court or arbitrator; (2)
when the National Securities Clearing Corporation (``NSCC'') ceases
to act for a Participant or a Participant's clearing firm and NSCC
determines not to guarantee the settlement of a Participant's
trades; or (3) if both parties to the trade consent.
\10\ See Exchange Act Release No. 77785 (May 9, 2016), 81 FR
29936 (May 13, 2016) (SR-CHX-2016-06).
\11\ See supra note 9.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that proposed rule change is consistent with
Section 6(b) of the Act \12\ in general and Section 6(b)(5) of the Act
\13\ in particular, which requires, among other things, that the
Exchange's rules be designed to prevent fraudulent and manipulative
acts and practices, to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
facilitating transactions in securities, and to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, protect investors and the public
interest.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the Exchange believes that the proposed rule change
will remove impediments to and perfect the mechanism of a free and open
market and a national market system by promoting consistency and
uniformity among different markets \14\ regarding trade and clearing
anonymity. For Participants that are members of other exchanges, the
proposed rule change will result in efficiencies with respect to such
Participants' rule compliance efforts.
---------------------------------------------------------------------------
\14\ See supra note 5.
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The Exchange believes that
the proposed rule change will reduce the regulatory burden placed on
market participants that are members of various markets, as well as
reduce administrative burden on the Exchange. The Exchange believes
that the harmonization of the anonymous trade reporting and clearing
provisions across the various markets \15\ will reduce burdens on
competition by removing impediments to participation in the national
market system.
---------------------------------------------------------------------------
\15\ See id.
---------------------------------------------------------------------------
[[Page 23080]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not (i)
significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(iii) of the Act \16\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\17\
---------------------------------------------------------------------------
\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of its filing. However,
Rule 19b-4(f)(6)(iii) \18\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay so that the proposed rule
change will become operative on May 15, 2017. The Exchange stated that
the proposed rule change is consistent with the protection of investors
and the public interest by immediately eliminating the administrative
burden of enforcing an outdated rule and by facilitating compliance
with CHX Rules by current and new Participants that are already
accustomed to the mandatory trade and clearing anonymity rules and
practices of other exchanges. Waiver of the operative delay would allow
the Exchange, without delay, to make its trade and clearing anonymity
rules consistent with the rules and practices of other exchanges. The
Commission believes that waiver of the 30-day operative delay is
consistent with the protection of investors and the public interest as
it will permit CHX to harmonize its trade and clearing rules with those
of the other exchanges without delay. Therefore, the Commission
designates the proposed rule change to be operative on May 15,
2017.\19\
---------------------------------------------------------------------------
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-CHX-2017-09 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-CHX-2017-09. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-CHX-2017-09, and should be
submitted on or before June 9, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
---------------------------------------------------------------------------
\20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-10128 Filed 5-18-17; 8:45 am]
BILLING CODE 8011-01-P
