Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Granting Approval of Proposed Rule Change To Reduce the Delay Period for Transactions Included in the Historic TRACE Data Sets Relating to Corporate and Agency Debt Securities, 29597-29598 [2017-13586]
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sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices
The Commission believes that the
amendments to Chapter Six of the
Company Guide will add clarity to the
periodic reporting requirements in
connection with proposed Section 1007.
For example, as noted above, the
deletion and replacement in Section
610(a) of a reference to Section 1002(d)
regarding delisting procedures with
proposed Section 1007 will avoid
confusion among investors and
companies about the applicable rules for
failure to timely file an annual report
with the Commission. In addition, the
Commission believes the proposed
modifications to delete Sections 611
through 613 of the Company Guide are
reasonably designed to protect investors
and the public interest by removing
obsolete language that will be replaced
with a more detailed compliance regime
in proposed Section 1007.
The Commission further believes the
Exchange’s deletion of the specific
enumerated disclosures with regard to
outstanding options in Section 610(a) of
the Company Guide is consistent with
the Exchange Act since listed
companies are already required to
comply with the Commission’s
disclosure regime for options in the
companies’ Form 10–K. In this regard
the Commission believes it is reasonable
for the Exchange to determine it will
defer to Commission disclosure
requirements as to options, some of
which are similar to the NYSE
requirements.49 Similarly, the deletion
of outdated references to the Exchange’s
StockWatch and Listing Qualifications
Departments in Section 610(b) of the
Company Guide and their replacement
with a statement that companies should
comply with the Exchange’s material
news policies set forth in Sections 401
and 402 would provide additional
transparency to a listed company on the
disclosure steps that it must take when
it receives an audit opinion that
contains a going concern emphasis.50
Additionally, the Commission
believes that the amendment to require
the public announcement of the
existence of a going concern in an audit
opinion be made contemporaneously
with the filing of such audit opinion
with the Commission furthers investor
protection by ensuring that investors are
made aware, as soon as possible, of
material information that may impact
their investment decisions. The
Commission also notes that eliminating
49 See
supra note 5 and accompanying text.
Commission further believes that the
Exchange’s proposal to update the reference to a
going concern ‘‘qualification’’ with a reference to a
going concern ‘‘emphasis’’ would align the
Exchange’s rules more accurately with general
accounting characterizations.
50 The
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the possibility that a company can delay
the public announcement of a going
concern opinion for up to seven days, as
currently permitted under the Company
Guide, will help to further investor
protection consistent with Section
6(b)(5) of the Exchange Act.
Finally, the Commission believes the
proposed amendment to harmonize the
semi-annual reporting requirement by
foreign private issuers in new Section
110(e) with the applicable rule in the
NYSE Manual would provide a more
precise compliance guideline and
establish a minimum interim reporting
regime applicable to all listed foreign
private issuers.51 Additionally, the
Commission believes the proposed
amendment is consistent with the
investor protection objectives of Section
6(b)(5) because it is reasonably designed
to ensure that foreign private issuers
provide timely financial information
that is necessary to enable investors to
make informed investment decisions.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,52
that the proposed rule change (SR–
NYSEMKT–2017–23) be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.53
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–13590 Filed 6–28–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–81011; File No. SR–FINRA–
2017–012]
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend FINRA
Rule 7730 (Trade Reporting and
Compliance Engine (TRACE)) to reduce
the minimum delay from 18 months to
six months for transactions included in
the Historic TRACE Data Sets relating to
corporate and agency debt securities.
The proposed rule change was
published for comment in the Federal
Register on May 22, 2017.3 The
Commission did not receive any
comments on the proposal.4 For the
reasons discussed below, the
Commission approving the proposed
rule change.
II. Description of the Proposal
FINRA Rule 7730, among other
things, sets forth the TRACE data
products offered by FINRA and the fees
applicable to such products. In addition
to a real-time data feed, FINRA offers a
Historic Corporate Bond Data Set,
Agency Data Set, Securitized Product
Data Set, and Rule 144A Data Set
(collectively, the ‘‘Historic TRACE
Data’’).5 The Historic TRACE Data
includes information such as the price,
date, time of execution, yield, and
uncapped volume for each transaction
occurring at least 18 months ago.6
FINRA originally established this 18month delay to address the possibility
that the Historic TRACE Data might be
used to identify positions or strategies of
market participants.7 FINRA has
proposed to reduce the delay applicable
to transactions included in the Historic
Corporate Bond Data Set and the
Historic Agency Data Set—and Rule
144A transactions in corresponding
securities (together, the ‘‘Corporate and
Agency Historic TRACE Data’’)—from a
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 80685
(May 16, 2017), 82 FR 23385 (May 22, 2017)
(‘‘Notice’’).
4 FINRA previously solicited comments on the
proposal as Regulatory Notice 15–24 (June 2015)
and received four comments. Regulatory Notice 15–
24 and the related comment letters are available as
Exhibit 2 to the Notice on both FINRA and the
SEC’s Web sites.
5 The Historic TRACE Data originally included
only the Corporate Bond and Agency Data Sets. The
Securitized Product Data Set and the Rule 144A
Data Set were added later as information about
transactions in those securities became subject to
public dissemination. FINRA has stated that
additional securities may be included in Historic
TRACE Data as they become subject to public
dissemination.
6 Historic TRACE Data also may include
transactions or items of information that were not
previously disseminated, such as exact trade
volumes, where the real-time disseminated amount
was capped.
7 See Securities Exchange Act Release No. 56327
(August 28, 2007), 72 FR 51689, 51690 (September
10, 2007).
2 17
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Order Granting
Approval of Proposed Rule Change To
Reduce the Delay Period for
Transactions Included in the Historic
TRACE Data Sets Relating to
Corporate and Agency Debt Securities
June 23, 2017.
I. Introduction
On May 12, 2017, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
51 See,
e.g., Section 203.03 of the NYSE Manual.
U.S.C. 78f(b)(2).
53 17 CFR 200.30–3(a)(12).
52 15
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Federal Register / Vol. 82, No. 124 / Thursday, June 29, 2017 / Notices
sradovich on DSK3GMQ082PROD with NOTICES
minimum of 18 months to a minimum
of six months.8
FINRA has stated that researchers and
other non-dealers have been the primary
subscribers to Historic TRACE Data.
FINRA has attributed the lack of usage
by dealers to the minimum 18-month
delay period for including transactions
in the Corporate and Agency Historic
TRACE Data. FINRA has stated that it is
not aware of any complaints regarding
information leakage under the current
18-month delay, and that market
participants have indicated that a
reduction in the minimum delay to six
months would make the product more
useful.
FINRA believes that a minimum sixmonth delay would promote the goal of
increased transparency for transactions
in TRACE-Eligible Securities while
continuing to address information
leakage concerns.9 In support of that
belief, FINRA conducted a sampling
analysis of past transactions in both
corporate and agency bonds to assess
whether positions or strategies of market
participants could be identified if the
Corporate and Agency Historic TRACE
Data had included transactions that
were aged only six months.10 Based on
this analysis, FINRA concluded that
‘‘the proposed rule, if it had been in
place, would have provided little
additional information to the public
relative to these positions’’ 11 and that a
reduction of the delay would be ‘‘a
limited risk for smaller issues that are
held by a limited number of market
participants.’’ 12
To further address concerns about
information leakage, FINRA solicited
comment from its members on an earlier
iteration of the proposed rule change.13
FINRA received four comment letters
and made certain revisions to its initial
proposal to respond to those concerns
before filing the current proposal with
the Commission.14 The Commission
notes that it has received no comments
on the version of the proposed rule
change published by the Commission.
8 FINRA has not proposed to change the 18month delay for transactions included in the
Historic Securitized Product Data Set.
9 FINRA noted that the Municipal Securities
Rulemaking Board (‘‘MSRB’’) disseminates in real
time the exact par value on all transactions with a
par value of $5 million or less, and includes an
indicator (‘‘MM+’’) in place of the exact par value
on transactions where the par value is greater than
$5 million until the fifth business day. MSRB
disseminates the exact par value for each
transaction on the fifth day after the transaction.
See MSRB Rule G–14.
10 See Notice, 82 FR 23387–89.
11 Id. at 23388.
12 Id. at 23389.
13 See supra note 4.
14 See Notice, 82 FR at 23389.
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FINRA stated that it will announce
the effective date of the proposed rule
change in a Regulatory Notice to be
published no later than 60 days
following Commission approval. The
effective date will be no later than 120
days following publication of the
Regulatory Notice.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Eduardo A. Aleman,
Assistant Secretary.
III. Discussion
SECURITIES AND EXCHANGE
COMMISSION
After carefully consideration, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act and the rules
and regulations thereunder applicable to
a national securities association.15 In
particular, the Commission finds that
the proposed rule change is consistent
with Section 15A(b)(6) of the Act,16
which requires, among other things, that
FINRA rules be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
The Commission notes that, because
the proposed rule change does not
require firms to provide FINRA with
any additional data, it will not have any
operational impact on firms.
Furthermore, the purchase of TRACE
data products is optional for members
and others. Finally, in light of FINRA’s
analysis of past transactions in
corporate and agency debt securities
and the revisions that FINRA made to
its first iteration of the proposal, the
Commission believes that reducing the
period before which transactions in
such securities are included in the
Historic TRACE Data from a minimum
of 18 months to six months is
reasonably designed to promote
transparency and respond to consumer
demand for a more useful market data
product, while minimizing the potential
for information leakage.
IV. Conclusion
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 17 that the
proposed rule change (SR–FINRA–
2017–012) be, and hereby is, approved.
[FR Doc. 2017–13586 Filed 6–28–17; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–81008; File No. SR–OCC–
2017–015]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Concerning
the U.S. Market Transition to a
Shortened Settlement Cycle
June 23, 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 June 9,
2017, The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below. Items I and
II have been prepared primarily by OCC.
OCC filed the proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(4)(i) 4
thereunder so that the proposal was
effective upon filing with the
Commission. 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
This proposed rule change by OCC
concerns the amendment of OCC’s ByLaws and Rules in connection with
recent amendments adopted by the
Commission to Rule 15c6–1(a) 5 under
the Act. The amendments to Rule 15c6–
1(a) 6 shorten the standard settlement
cycle for most broker-dealer securities
transactions from three business days
after the trade date to two business days
after the trade date.
The proposed changes to OCC’s ByLaws and Rules were included in
Exhibits 5A and 5B of the filing,
respectively.
18 17
15 In
approving this proposed rule change, the
Commission has considered the proposed rule
change’s impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).
16 15 U.S.C. 78o–3(b)(6).
17 15 U.S.C. 78s(b)(2).
PO 00000
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Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(4)(i).
5 17 CFR 240.15c6–1(a).
6 Id.
1 15
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]]>Agencies
[Federal Register Volume 82, Number 124 (Thursday, June 29, 2017)]
[Notices]
[Pages 29597-29598]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-13586]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81011; File No. SR-FINRA-2017-012]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Order Granting Approval of Proposed Rule Change To
Reduce the Delay Period for Transactions Included in the Historic TRACE
Data Sets Relating to Corporate and Agency Debt Securities
June 23, 2017.
I. Introduction
On May 12, 2017, the Financial Industry Regulatory Authority, Inc.
(``FINRA'') 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 amend FINRA Rule 7730 (Trade Reporting and
Compliance Engine (TRACE)) to reduce the minimum delay from 18 months
to six months for transactions included in the Historic TRACE Data Sets
relating to corporate and agency debt securities. The proposed rule
change was published for comment in the Federal Register on May 22,
2017.\3\ The Commission did not receive any comments on the
proposal.\4\ For the reasons discussed below, the Commission approving
the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 80685 (May 16,
2017), 82 FR 23385 (May 22, 2017) (``Notice'').
\4\ FINRA previously solicited comments on the proposal as
Regulatory Notice 15-24 (June 2015) and received four comments.
Regulatory Notice 15-24 and the related comment letters are
available as Exhibit 2 to the Notice on both FINRA and the SEC's Web
sites.
---------------------------------------------------------------------------
II. Description of the Proposal
FINRA Rule 7730, among other things, sets forth the TRACE data
products offered by FINRA and the fees applicable to such products. In
addition to a real-time data feed, FINRA offers a Historic Corporate
Bond Data Set, Agency Data Set, Securitized Product Data Set, and Rule
144A Data Set (collectively, the ``Historic TRACE Data'').\5\ The
Historic TRACE Data includes information such as the price, date, time
of execution, yield, and uncapped volume for each transaction occurring
at least 18 months ago.\6\ FINRA originally established this 18-month
delay to address the possibility that the Historic TRACE Data might be
used to identify positions or strategies of market participants.\7\
FINRA has proposed to reduce the delay applicable to transactions
included in the Historic Corporate Bond Data Set and the Historic
Agency Data Set--and Rule 144A transactions in corresponding securities
(together, the ``Corporate and Agency Historic TRACE Data'')--from a
[[Page 29598]]
minimum of 18 months to a minimum of six months.\8\
---------------------------------------------------------------------------
\5\ The Historic TRACE Data originally included only the
Corporate Bond and Agency Data Sets. The Securitized Product Data
Set and the Rule 144A Data Set were added later as information about
transactions in those securities became subject to public
dissemination. FINRA has stated that additional securities may be
included in Historic TRACE Data as they become subject to public
dissemination.
\6\ Historic TRACE Data also may include transactions or items
of information that were not previously disseminated, such as exact
trade volumes, where the real-time disseminated amount was capped.
\7\ See Securities Exchange Act Release No. 56327 (August 28,
2007), 72 FR 51689, 51690 (September 10, 2007).
\8\ FINRA has not proposed to change the 18-month delay for
transactions included in the Historic Securitized Product Data Set.
---------------------------------------------------------------------------
FINRA has stated that researchers and other non-dealers have been
the primary subscribers to Historic TRACE Data. FINRA has attributed
the lack of usage by dealers to the minimum 18-month delay period for
including transactions in the Corporate and Agency Historic TRACE Data.
FINRA has stated that it is not aware of any complaints regarding
information leakage under the current 18-month delay, and that market
participants have indicated that a reduction in the minimum delay to
six months would make the product more useful.
FINRA believes that a minimum six-month delay would promote the
goal of increased transparency for transactions in TRACE-Eligible
Securities while continuing to address information leakage concerns.\9\
In support of that belief, FINRA conducted a sampling analysis of past
transactions in both corporate and agency bonds to assess whether
positions or strategies of market participants could be identified if
the Corporate and Agency Historic TRACE Data had included transactions
that were aged only six months.\10\ Based on this analysis, FINRA
concluded that ``the proposed rule, if it had been in place, would have
provided little additional information to the public relative to these
positions'' \11\ and that a reduction of the delay would be ``a limited
risk for smaller issues that are held by a limited number of market
participants.'' \12\
---------------------------------------------------------------------------
\9\ FINRA noted that the Municipal Securities Rulemaking Board
(``MSRB'') disseminates in real time the exact par value on all
transactions with a par value of $5 million or less, and includes an
indicator (``MM+'') in place of the exact par value on transactions
where the par value is greater than $5 million until the fifth
business day. MSRB disseminates the exact par value for each
transaction on the fifth day after the transaction. See MSRB Rule G-
14.
\10\ See Notice, 82 FR 23387-89.
\11\ Id. at 23388.
\12\ Id. at 23389.
---------------------------------------------------------------------------
To further address concerns about information leakage, FINRA
solicited comment from its members on an earlier iteration of the
proposed rule change.\13\ FINRA received four comment letters and made
certain revisions to its initial proposal to respond to those concerns
before filing the current proposal with the Commission.\14\ The
Commission notes that it has received no comments on the version of the
proposed rule change published by the Commission.
---------------------------------------------------------------------------
\13\ See supra note 4.
\14\ See Notice, 82 FR at 23389.
---------------------------------------------------------------------------
FINRA stated that it will announce the effective date of the
proposed rule change in a Regulatory Notice to be published no later
than 60 days following Commission approval. The effective date will be
no later than 120 days following publication of the Regulatory Notice.
III. Discussion
After carefully consideration, the Commission finds that the
proposed rule change is consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities association.\15\ In particular, the Commission finds that
the proposed rule change is consistent with Section 15A(b)(6) of the
Act,\16\ which requires, among other things, that FINRA rules be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------
\15\ In approving this proposed rule change, the Commission has
considered the proposed rule change's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\16\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------
The Commission notes that, because the proposed rule change does
not require firms to provide FINRA with any additional data, it will
not have any operational impact on firms. Furthermore, the purchase of
TRACE data products is optional for members and others. Finally, in
light of FINRA's analysis of past transactions in corporate and agency
debt securities and the revisions that FINRA made to its first
iteration of the proposal, the Commission believes that reducing the
period before which transactions in such securities are included in the
Historic TRACE Data from a minimum of 18 months to six months is
reasonably designed to promote transparency and respond to consumer
demand for a more useful market data product, while minimizing the
potential for information leakage.
IV. Conclusion
It is therefore ordered pursuant to Section 19(b)(2) of the Act
\17\ that the proposed rule change (SR-FINRA-2017-012) be, and hereby
is, approved.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------
\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-13586 Filed 6-28-17; 8:45 am]
BILLING CODE 8011-01-P
