Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Granting Approval of a Proposed Rule Change To Shorten the Standard Settlement Cycle From Three Business Days After the Trade Date to Two Business Days After the Trade Date, 26147-26148 [2017-11609]

Download as PDF Federal Register / Vol. 82, No. 107 / Tuesday, June 6, 2017 / Notices begun investigating different methods for gathering all of the data elements requested by the Commission.2 There, the Postal Service noted that its investigation into the Commission’s directive would have two distinct phases. Id. The Postal Service described the first phase as exploring whether the requisite data could be practically gathered and, if so, whether those data would be reliable and accurate. Id. It stated that the second phase was to determine whether it would be possible to use the obtained data to construct a single-equation city carrier letter route cost model for street time. Id. The Postal Service stated that it had only recently started to record the required data and that, therefore, it had just begun the first phase. Id. In Docket No. ACR2015, the Postal Service reported that it had initiated an investigation into updating its city carrier Special Purpose Route (SPR) cost model for street time.3 The Postal Service uses the SPR study data approved in Docket No. R97–1 in conjunction with current data from its In-Office Cost System (IOCS) to form SPRs street time cost pools and to develop attributable costs.4 In its response to Order No. 2792, the Postal Service stated that it also was investigating the feasibility of using operational data to estimate variability equations for its parcel and collection route cost models.5 III. Public Inquiry The Commission establishes PI2017– 1 to obtain an update on the Postal Service’s progress in investigating the data required for, and the viability of, a single equation city carrier letter route cost model as well as in reviewing the SPR cost model for street time. Chairman’s Information Request No. 1 is issued contemporaneously with this Notice and Order. It seeks an update to the Postal Service’s Response to Order No. 2792 and further clarification on designated IOCS-estimated city carrier costs and City Carrier Cost System volumes. Comments on these topics are due no later than August 29, 2017. Comments are to be submitted via the Commission’s online filing system at http://www.prc.gov, unless a waiver is obtained. Information on how to obtain a waiver may be found by contacting the Commission’s dockets office at 202– 789–6846. IV. Public Representative mstockstill on DSK30JT082PROD with NOTICES No. RM2015–7, Response of the United States Postal Service to Commission Order No. 2792, February 16, 2016, at 14 (Postal Service Response to Order No. 2792). 3 See Docket No. ACR2015, Library Reference USPS–FY15–9, file ‘‘USPS–FY15–9_Roadmap.pdf,’’ December 29, 2015, at 122; Docket No. R97–1, Opinion and Recommended Decision, Volume 1, May 11, 1998, at 188 (Opinion and Recommended Decision). 4 See Opinion and Recommended Decision at 188. 5 The Commission’s Order No. 2792 describes this as the cost model used to assign the costs of Sunday delivery hours and parcel routes. See Order No. 2792 at 66. The Postal Service describes this as the Parcel and Collection Route Models which are limited to non-Sunday city carrier SPR costs. Postal Service Response to Order No. 2792 at 16. V. Ordering Paragraphs It is ordered: 1. The Commission hereby establishes Docket No. PI2017–1 to review the Postal Service’s progress towards the Commission directives in Order No. 2792 and to inquire about the current data and methodology used to estimate city carrier costs and City Carrier Cost System volumes. 2. Comments are due no later than August 29, 2017. 3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. Clendenin to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket. 4. The Secretary shall arrange for publication of this order in the Federal Register. By the Commission. Stacy L. Ruble, Secretary. [FR Doc. 2017–11586 Filed 6–5–17; 8:45 am] BILLING CODE 7710–FW–P POSTAL SERVICE Product Change—Priority Mail Negotiated Service Agreement Postal ServiceTM. ACTION: Notice. VerDate Sep<11>2014 20:52 Jun 05, 2017 Jkt 241001 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: June 6, 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. SUMMARY: PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 3642 and 3632(b)(3), on May 31, 2017, it filed with the Postal Regulatory Commission a Request of the United States Postal Service to Add Priority Mail Contract 323 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2017–138, CP2017–196. Stanley F. Mires, Attorney, Federal Compliance. [FR Doc. 2017–11581 Filed 6–5–17; 8:45 am] BILLING CODE 7710–12–P Pursuant to 39 U.S.C. 505, Katalin K. Clendenin, is designated as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding. AGENCY: 2 Docket 26147 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80825; File No. SR–CHX– 2017–06] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Granting Approval of a Proposed Rule Change To Shorten the Standard Settlement Cycle From Three Business Days After the Trade Date to Two Business Days After the Trade Date May 31, 2017. I. Introduction On April 6, 2017, the Chicago Stock Exchange, Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to conform its rules to an amendment adopted by the Commission to Rule 15c6–1(a) under the Act 3 to shorten the standard settlement cycle for most broker-dealer transactions from three business days after the trade date (‘‘T+3’’) to two business days after the trade date (‘‘T+2’’).4 The Commission adopted the amendment to Rule 15c6– 1(a) under the Act to shorten the standard settlement cycle to T+2 on March 22, 2017 and set a compliance date of September 5, 2017.5 The Exchange’s proposed rule change was published for comment in the Federal Register on April 21, 2017.6 The Commission did not receive any comment letters on the proposed rule change. This order approves the proposed rule change. 1 15 U.S.C. 78s(b)(1). CFR 240.19b-4. 3 17 CFR 240.15c6–1. 4 See Securities Exchange Act Release No. 80295 (March 22, 2017), 82 FR 15564 (March 29, 2017) (‘‘SEC Adopting Release’’). 5 See id. 6 See Securities Exchange Act Release No. 80467 (April 17, 2017), 82 FR 18800. 2 17 E:\FR\FM\06JNN1.SGM 06JNN1 26148 Federal Register / Vol. 82, No. 107 / Tuesday, June 6, 2017 / Notices mstockstill on DSK30JT082PROD with NOTICES II. Description of the Proposal The Exchange proposes to amend Article 1, Rule 2(e) and Article 9, Rule 7 to conform to the Commission’s amendment to Rule 15c6–1(a) under the Act 7 which shortens the standard settlement cycle from T+3 to T+2 for most broker-dealer transactions. Current Article 1, Rule 2(e)(1) relating to order settlement terms defines ‘‘Regular Way Settlement’’ as ‘‘a transaction for delivery on the third full business day following the day of the contract.’’ The Exchange proposes to shorten the ‘‘third full business day’’ time period to ‘‘second full business day.’’ Current Article 1, Rule 2(e)(2)(C) defines ‘‘Seller’s Option’’ as ‘‘a transaction for delivery within the time specified in the option, which time shall not be less than four (4) full business days nor more than 60 days following the day of the contract; except that the Exchange may provide otherwise in specific issues of stocks or classes of stocks.’’ The Exchange proposes to shorten the ‘‘four (4) full business days’’ time period to ‘‘three (3) full business days.’’ Current Article 9, Rule 7(a) governing ex-dividend transactions provides in part that transactions in stocks shall be ex-dividend or ex-rights two full business days immediately preceding the date of record fixed by the corporation for the determination of stockholders entitled to receive such dividends or rights, except when such record date occurs upon a holiday or half-holiday, transactions in the stock shall be ex-dividend or ex-rights three full business days immediately preceding the record date. The Exchange proposes amendments to shorten the ‘‘two full business days’’ time period to a ‘‘business day’’ under Rule 7(a) and the ‘‘three full business days’’ time period to ‘‘two full business days’’ under Rule 7(a)(1). The Exchange proposes similar changes to current Article 9, Rule 7(b) pertaining to ex-warrants that provides, in pertinent part, that transactions in securities which have subscription warrants attached (except those made for ‘‘cash’’) shall be ex-warrants on the second full business day preceding the date of expiration of the warrants, except when the day of expiration occurs on a holiday or Sunday, the transactions shall be ex-warrants on the third full business day preceding the day of expiration. The Exchange proposes to shorten the ‘‘second full business day’’ time period to a 7 See id; see also supra note 4. VerDate Sep<11>2014 23:20 Jun 05, 2017 Jkt 241001 ‘‘business day’’ under Rule 7(b) and the ‘‘third full business day’’ time period to ‘‘second full business day’’ under Rule 7(b)(1). III. Discussion and Commission’s Findings After careful review of the proposed rule change, the Commission finds that the proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange.8 Specifically, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,9 which requires that the rules of a national securities exchange be designed, among other things, 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 regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and to protect investors and the public interest. The Commission notes that the proposed rule change would amend Exchange rules to conform to the amendment that the Commission has adopted to Rule 15c6–1(a) under the Act 10 and support a move to a T+2 standard settlement cycle. In the SEC Adopting Release, the Commission stated its belief that shortening the standard settlement cycle from T+3 to T+2 will result in a reduction of credit, market, and liquidity risk,11 and as a result, a reduction in systemic risk for U.S. market participants.12 The compliance date for the amendment to Rule 15c6–1(a) under the Act is September 5, 2017.13 The Exchange has represented that the operative date of the proposed rule change would 8 In approving this proposed rule change the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 9 15 U.S.C. 78f(b)(5). 10 See SEC Adopting Release, supra note 4. 11 Credit risk refers to the risk that the credit quality of one party to a transaction will deteriorate to the extent that it is unable to fulfill its obligations to its counterparty on settlement date. Market risk refers to the risk that the value of securities bought and sold will change between trade execution and settlement such that the completion of the trade would result in a financial loss. Liquidity risk describes the risk that an entity will be unable to meet financial obligations on time due to an inability to deliver funds or securities in the form required though it may possess sufficient financial resources in other forms. See id., 82 FR at 15564 n. 3. 12 See id., 82 FR at 15564. 13 See id. PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 correspond to the compliance date of the amendment to Rule 15c6–1(a) under the Act. For the reasons noted above, the Commission finds that the proposal is consistent with the requirements of the Act and would foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, remove impediments to and perfect the mechanism of a free and open market and a national market system, and protect investors and the public interest. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,14 that the proposed rule change, (SR–CHX–2017– 06), be and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–11609 Filed 6–5–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–80822; File No. SR– BatsBZX–2017–38] Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on Bats BZX Exchange, Inc. May 31, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 23, 2017, Bats BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Bats’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. The Exchange has designated the proposed rule change as one establishing or changing a member due, fee, or other charge imposed by the Exchange under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposed rule change effective upon filing with the Commission. The Commission is publishing this notice to 14 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 15 17 E:\FR\FM\06JNN1.SGM 06JNN1

Agencies

[Federal Register Volume 82, Number 107 (Tuesday, June 6, 2017)]
[Notices]
[Pages 26147-26148]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-11609]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80825; File No. SR-CHX-2017-06]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Order Granting Approval of a Proposed Rule Change To Shorten the 
Standard Settlement Cycle From Three Business Days After the Trade Date 
to Two Business Days After the Trade Date

May 31, 2017.

I. Introduction

    On April 6, 2017, the Chicago Stock Exchange, Inc. (``CHX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to conform its rules to an amendment adopted by 
the Commission to Rule 15c6-1(a) under the Act \3\ to shorten the 
standard settlement cycle for most broker-dealer transactions from 
three business days after the trade date (``T+3'') to two business days 
after the trade date (``T+2'').\4\ The Commission adopted the amendment 
to Rule 15c6-1(a) under the Act to shorten the standard settlement 
cycle to T+2 on March 22, 2017 and set a compliance date of September 
5, 2017.\5\ The Exchange's proposed rule change was published for 
comment in the Federal Register on April 21, 2017.\6\ The Commission 
did not receive any comment letters on the proposed rule change. This 
order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.15c6-1.
    \4\ See Securities Exchange Act Release No. 80295 (March 22, 
2017), 82 FR 15564 (March 29, 2017) (``SEC Adopting Release'').
    \5\ See id.
    \6\ See Securities Exchange Act Release No. 80467 (April 17, 
2017), 82 FR 18800.

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[[Page 26148]]

II. Description of the Proposal

    The Exchange proposes to amend Article 1, Rule 2(e) and Article 9, 
Rule 7 to conform to the Commission's amendment to Rule 15c6-1(a) under 
the Act \7\ which shortens the standard settlement cycle from T+3 to 
T+2 for most broker-dealer transactions.
---------------------------------------------------------------------------

    \7\ See id; see also supra note 4.
---------------------------------------------------------------------------

    Current Article 1, Rule 2(e)(1) relating to order settlement terms 
defines ``Regular Way Settlement'' as ``a transaction for delivery on 
the third full business day following the day of the contract.'' The 
Exchange proposes to shorten the ``third full business day'' time 
period to ``second full business day.''
    Current Article 1, Rule 2(e)(2)(C) defines ``Seller's Option'' as 
``a transaction for delivery within the time specified in the option, 
which time shall not be less than four (4) full business days nor more 
than 60 days following the day of the contract; except that the 
Exchange may provide otherwise in specific issues of stocks or classes 
of stocks.'' The Exchange proposes to shorten the ``four (4) full 
business days'' time period to ``three (3) full business days.''
    Current Article 9, Rule 7(a) governing ex-dividend transactions 
provides in part that transactions in stocks shall be ex-dividend or 
ex-rights two full business days immediately preceding the date of 
record fixed by the corporation for the determination of stockholders 
entitled to receive such dividends or rights, except when such record 
date occurs upon a holiday or half-holiday, transactions in the stock 
shall be ex-dividend or ex-rights three full business days immediately 
preceding the record date. The Exchange proposes amendments to shorten 
the ``two full business days'' time period to a ``business day'' under 
Rule 7(a) and the ``three full business days'' time period to ``two 
full business days'' under Rule 7(a)(1).
    The Exchange proposes similar changes to current Article 9, Rule 
7(b) pertaining to ex-warrants that provides, in pertinent part, that 
transactions in securities which have subscription warrants attached 
(except those made for ``cash'') shall be ex-warrants on the second 
full business day preceding the date of expiration of the warrants, 
except when the day of expiration occurs on a holiday or Sunday, the 
transactions shall be ex-warrants on the third full business day 
preceding the day of expiration. The Exchange proposes to shorten the 
``second full business day'' time period to a ``business day'' under 
Rule 7(b) and the ``third full business day'' time period to ``second 
full business day'' under Rule 7(b)(1).

III. Discussion and Commission's Findings

    After careful review of the proposed rule change, the Commission 
finds that the proposal is consistent with the requirements of the Act 
and the rules and regulations thereunder that are applicable to a 
national securities exchange.\8\ Specifically, the Commission finds 
that the proposed rule change is consistent with Section 6(b)(5) of the 
Act,\9\ which requires that the rules of a national securities exchange 
be designed, among other things, 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 
regulating, clearing, settling, processing information with respect to, 
and facilitating transactions in securities, to remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and to protect investors and the public interest.
---------------------------------------------------------------------------

    \8\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the proposed rule change would amend 
Exchange rules to conform to the amendment that the Commission has 
adopted to Rule 15c6-1(a) under the Act \10\ and support a move to a 
T+2 standard settlement cycle. In the SEC Adopting Release, the 
Commission stated its belief that shortening the standard settlement 
cycle from T+3 to T+2 will result in a reduction of credit, market, and 
liquidity risk,\11\ and as a result, a reduction in systemic risk for 
U.S. market participants.\12\ The compliance date for the amendment to 
Rule 15c6-1(a) under the Act is September 5, 2017.\13\ The Exchange has 
represented that the operative date of the proposed rule change would 
correspond to the compliance date of the amendment to Rule 15c6-1(a) 
under the Act.
---------------------------------------------------------------------------

    \10\ See SEC Adopting Release, supra note 4.
    \11\ Credit risk refers to the risk that the credit quality of 
one party to a transaction will deteriorate to the extent that it is 
unable to fulfill its obligations to its counterparty on settlement 
date. Market risk refers to the risk that the value of securities 
bought and sold will change between trade execution and settlement 
such that the completion of the trade would result in a financial 
loss. Liquidity risk describes the risk that an entity will be 
unable to meet financial obligations on time due to an inability to 
deliver funds or securities in the form required though it may 
possess sufficient financial resources in other forms. See id., 82 
FR at 15564 n. 3.
    \12\ See id., 82 FR at 15564.
    \13\ See id.
---------------------------------------------------------------------------

    For the reasons noted above, the Commission finds that the proposal 
is consistent with the requirements of the Act and would foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and protect investors and the public interest.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change, (SR-CHX-2017-06), be and hereby 
is, approved.
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    \14\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11609 Filed 6-5-17; 8:45 am]
 BILLING CODE 8011-01-P