Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4759, 58042-58045 [2017-26448]

Download as PDF 58042 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Notices in order to provide transparency that the only cure under Exchange rules is for the company to file the periodic financial report or hold its annual meeting. Finally, the Exchange believes that it is consistent with the protection of investors and the public interest to correct the three nonsubstantive typographical errors in Rules 14.502(b) and 14.504 to avoid any confusion among potential listed companies. change should be approved or disapproved. B. Self-Regulatory Organization’s Statement on Burden on Competition IEX does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed rule change is designed to promote consistent and fair regulation, rather than for any competitive purpose. Moreover, as a new listing exchange, IEX has extremely limited ability to impose any burden on competition. • 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– IEX–2017–41 on the subject line. sradovich on DSK3GMQ082PROD with NOTICES C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange has designated this rule filing as non-controversial under Section 19(b)(3)(A) 30 of the Act and Rule 19b–4(f)(6) 31 thereunder. Because the 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) of the Act and Rule 19b– 4(f)(6) thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is 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 under Section 19(b)(2)(B) 32 of the Act to determine whether the proposed rule 30 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 32 15 U.S.C. 78s(b)(2)(B). 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 20:38 Dec 07, 2017 [FR Doc. 2017–26447 Filed 12–7–17; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–82210; File No. SR–BX– 2017–052] Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4759 Paper Comments December 4, 2017. • 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–IEX–2017–41. 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–IEX–2017–41 and should be submitted on or before December 29, 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 November 28, 2017, Nasdaq BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘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. 31 17 VerDate Sep<11>2014 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.33 Eduardo A. Aleman, Assistant Secretary. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to add additional detail about the purposes for which the Exchange uses securities information processor data pursuant to Rule 4759, and to make other technical corrections to that rule. The text of the proposed rule change is available on the Exchange’s Web site at https://nasdaqbx.cchwallstreet.com/, at the principal office of the Exchange, and at 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 Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of 1 15 33 17 Jkt 244001 PO 00000 CFR 200.30–3(a)(12). Frm 00096 Fmt 4703 Sfmt 4703 2 17 E:\FR\FM\08DEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 08DEN1 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Notices 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 sradovich on DSK3GMQ082PROD with NOTICES 1. Purpose The purpose of the proposed rule change is to add additional detail about the purposes for which the Exchange uses securities information processor (‘‘SIP’’) data pursuant to Rule 4759, and to make other technical corrections to that rule. Rule 4759 lists the proprietary and network processor feeds that are utilized for the handling, routing, and execution of orders, as well as for the regulatory compliance processes related to those functions. The BX trading system utilizes proprietary market data as the Primary Source of quotation data for the following markets that provide a reliable direct feed: NYSE American, Nasdaq BX, CBOE EDGA, CBOE EDGX, CHX, NYSE, NYSE Arca, Nasdaq, Nasdaq PSX, CBOE BYX, and CBOE BZX.3 For each of these markets, the Exchange uses SIP data as the Secondary Source of quotation data.4 Generally, Rule 4759 provides that the Primary Source of data is used for the handling, routing, and execution of orders, as well as for the regulatory compliance processes related to those functions, unless it is delayed by a configurable amount compared to the Secondary Source of data. While this is true for quotation data used by the trading system for the handling, routing, and execution of orders, and also regulatory compliance processes related to those functions, including, for example, determination of tradethroughs under Rule 611 of Regulation NMS, the Exchange uses SIP data for certain trade and administrative messages. For example, the Exchange uses SIP data for limit-up limit-down price bands, market-wide circuit breaker decline and status messages, Regulation SHO state messages, trading state messages (i.e., halts and resumes), and trade messages (i.e., last sale). As described in more detail below, with the exception of last sale information, these messages originate from the SIP, and are often not available on the direct feeds. To mitigate risks associated with a potential SIP outage, however, where 3 Several of the exchanges mentioned in this filing have been renamed recently; the names used herein reflect the current names of the exchanges. This proposed rule change also includes amendments to reflect the new names for these exchanges. 4 SIP data is used as the Primary Source for NYSE National, FINRA ADF, and IEX. There is no Secondary Source for these markets. VerDate Sep<11>2014 20:38 Dec 07, 2017 Jkt 244001 the information is available on a direct feed from one or more exchanges, the Exchange uses such direct feed data solely as a backup to the SIP data. The Exchange therefore proposes to amend Rule 4759 to provide that the BX System consumes quotation data from the listed proprietary and network processor feeds for the handling, routing, and execution of orders, as well as for the regulatory compliance processes related to those functions.5 Furthermore, with the proposed changes, Rule 4759 will provide that the SIP is the Primary Source of certain trade and administrative messages such as limit-up limit-down price bands, market-wide circuit breaker decline and status messages, Regulation SHO state messages, halts and resumes, and last sale information, and that, where available, the direct feeds are the Secondary Source of such information. For the reasons discussed in this filing, the Exchange believes that it is appropriate to use the SIP as the Primary Source of data for these trade and administrative messages. Limit-up limit down price bands, for instance, are not available on any of the direct feeds used by the Exchange as these bands are calculated and disseminated by the SIP pursuant to the Plan to Address Extraordinary Market Volatility. Similarly, market-wide circuit breaker decline and status messages, Regulation SHO state messages, and trading state messages are available on some but not other direct feeds. Again, the SIP is responsible for calculating any decline in the S&P 500 Index and disseminating halt messages for the market-wide circuit breaker, and also for disseminating other halts, resumes, and Regulation SHO state messages. In addition, the Exchange’s trading system consumes last sale information from the SIP, which is used for the limited purpose of determining when the Exchange can open securities after an IPO.6 Although last sale information is disseminated on proprietary market data feeds, this information is typically included in a different market data product than the Exchange uses for quotation data, and the Exchange’s trading system therefore also consumes last sale information from the SIP for the limited purpose described above. 5 The Exchange notes that the rule language currently provides that the Exchange ‘‘utilizes’’ these feeds. As a non-substantive change, the Exchange is changing this word to ‘‘consumes’’ as this word fits better with language being added to the rule. 6 The Exchange waits for a last sale from the listing market prior to starting the Exchange’s opening process following an IPO on another market. PO 00000 Frm 00097 Fmt 4703 Sfmt 4703 58043 Finally, the Exchange proposes to make additional technical amendments to Rule 4759. Specifically, several of the exchanges and direct market data feeds described in the rule have been renamed since the Exchange adopted the rule. The Exchange therefore propose to: (1) Rename the exchanges described in the rule so that the exchanges are identified by their new names,7 and (2) replace the names of the individual direct feeds with a generic notation that the ‘‘Direct Feed’’ is used to avoid the need for future updates every time an exchange changes the name of its proprietary market data offerings. These changes are technical amendments and will have no impact on the operation of the Exchange or its use of the identified market data feeds. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,8 in general, and furthers the objectives of Section 6(b)(5) of the Act,9 in particular, in that it is designed 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 Exchange believes that the proposed rule change removes impediments to and perfects the mechanism of a free and open market and protects investors and the public interest because it provides additional transparency around the purposes for which the Exchange uses SIP data. The proposed rule change does not change the operation of the Exchange or its use of data feeds; rather it clarifies the Exchange’s rules with regard to information consumed from the SIP. Specifically, the proposed rule change indicates that the Exchange uses SIP data for certain administrative messages, including, limit-up limit-down price bands, market-wide circuit breaker decline and status messages, Regulation SHO state messages, and trading state messages (i.e., halts and resumes), as well as trade messages (i.e., last sale). At least one other exchange uses SIP data for these purposes, while continuing to use the direct feeds for quotation data where the direct feeds often offer reduced latency.10 The Exchange believes that it is appropriate to use SIP data as the primary source for administrative 7 The new names of each of the exchanges described in Rule 4759 are used earlier in this filing. See notes 4–5 supra and accompanying text. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). 10 See IEX Rule 11.410(a)(3). E:\FR\FM\08DEN1.SGM 08DEN1 sradovich on DSK3GMQ082PROD with NOTICES 58044 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Notices messages that originate from the SIP and may or may not be available on particular proprietary market data feeds. Although quote data used for the handling, routing, and execution of orders is typically available with a lower latency over the direct feeds, the same is not true for the administrative messages described above that originate from the SIP and are re-disseminated (or not disseminated at all) by the various direct feeds. The Exchange therefore believes that it is consistent with the public interest and protection of investors to get this information directly from the SIP, i.e., the official source of the information, rather than indirectly from proprietary market data feeds that may or may not redistribute such information. Furthermore, with respect to last sale information, such information is used by the trading system for the limited purposes described in this filing, and is not typically available on the direct feeds that the Exchange uses for quotation data. The Exchange therefore also believes that it is appropriate to get last sale information from the SIP. Where the information described in this filing is available on a direct feed, however, direct feed data will be used in the event failover is necessary, thereby adding redundancy and mitigating risks associated with a potential SIP outage. The proposed rule change also makes certain technical amendments to Rule 4759, including updating the names of exchanges that have been renamed since the adoption of this rule. The Exchange believes that it is consistent with the public interest and the protection of investors to update the names of the exchanges listed in Rule 4759 as this change will make it easier for market participants to identify the exchanges for which the Exchange uses the direct feed and/or SIP for the purposes described in the rule. Furthermore, the proposed rule change replaces the names of the direct feeds with a generic notation that the ‘‘Direct Feed’’ is used. The Exchange believes that this change is consistent with the protection of investors and the public interest as the exchanges may change the names of their data feeds periodically, resulting in the list being out of date. Rather than update the list every time a market changes the names of their [sic] proprietary market data products, the Exchange believes that it is preferable to simply explain that the direct feed is used. Several other exchanges also similarly note that the direct feed is VerDate Sep<11>2014 20:38 Dec 07, 2017 Jkt 244001 used rather than spelling out the names of each feed.11 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 proposed rule change is not designed to address any competitive issue but rather would provide members and other market participants with information about the purposes for which the Exchange uses SIP data, and make other technical corrections to Rule 4759. No changes to the Exchange’s trading or other systems are being introduced with the proposed rule change, and the Exchange believes that the proposed changes will increase transparency around the operation of the Exchange and its use of market data feeds without any significant impact on competition. 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 12 and subparagraph (f)(6) of Rule 19b–4 thereunder.13 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 14 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 15 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 asked 11 See e.g. IEX Rule 11.410(a); CBOE BZX Rule 11.26. 12 15 U.S.C. 78s(b)(3)(A)(iii). 13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 14 17 CFR 240.19b–4(f)(6). 15 17 CFR 240.19b–4(f)(6)(iii). PO 00000 Frm 00098 Fmt 4703 Sfmt 4703 the Commission to waive the 30-day operative delay so that the proposal may become operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest as it will allow the Exchange to clarify the purposes for which the Exchange uses SIP data and avoid potential confusion among market participants. Accordingly, the Commission hereby waives the operative delay and designates the proposal operative upon filing.16 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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– BX–2017–052 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–BX–2017–052. 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 16 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). E:\FR\FM\08DEN1.SGM 08DEN1 Federal Register / Vol. 82, No. 235 / Friday, December 8, 2017 / Notices 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–BX–2017–052 and should be submitted on or before December 29, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017–26448 Filed 12–7–17; 8:45 am] BILLING CODE 8011–01–P SURFACE TRANSPORTATION BOARD [Docket No. AB 6 (Sub-No. 497X)] sradovich on DSK3GMQ082PROD with NOTICES BNSF Railway Company— Abandonment Exemption—in Benton County, Minn. BNSF Railway Company (BNSF) has filed a verified notice of exemption under 49 CFR pt. 1152 subpart F– Exempt Abandonments to abandon a 1.75-mile line of railroad located between milepost 0.0 and milepost 1.75 in Benton County, Minn. (the Line).1 The Line traverses United States Postal Zip Code 56379. BNSF has certified that: (1) No local or overhead freight rail traffic has traveled over the Line since July 2015; (2) no formal complaint filed by a user of a rail service on the Line (or by a state or local government entity acting on behalf of such user) regarding cessation of service over the Line is either 17 17 CFR 200.30–3(a)(12). originally filed, the verified notice indicated that the Line is in Stearns County, Minn. On December 4, 2017, BNSF filed a correction (including an updated map) indicating that the Line is located in Benton County, Minn., a short distance north and east of Stearns County. According to BNSF, its notice is correct in all other respects. 1 As VerDate Sep<11>2014 20:38 Dec 07, 2017 Jkt 244001 pending with the Surface Transportation Board (Board) or with any U.S. District Court or has been decided in favor of a complainant within the two-year period; and (3) the requirements at 49 CFR 1105.11 (transmittal letter), 49 CFR 1105.12 (newspaper publication), and 49 CFR 1152.50(d)(1) (notice to governmental agencies) have been met.2 As a condition to this exemption, any employee adversely affected by the abandonment shall be protected under Oregon Short Line Railroad— Abandonment Portion Goshen Branch Between Firth & Ammon, in Bingham & Bonneville Counties, Idaho, 360 I.C.C. 91 (1979). To address whether this condition adequately protects affected employees, a petition for partial revocation under 49 U.S.C. 10502(d) must be filed. Provided no formal expression of intent to file an offer of financial assistance (OFA) has been received, this exemption will be effective on January 9, 2018, unless stayed pending reconsideration. Petitions to stay that do not involve environmental issues,3 formal expressions of intent to file an OFA under 49 CFR 1152.27(c)(2),4 and interim trail use/rail banking requests under 49 CFR 1152.29 must be filed by December 18, 2017. Petitions to reopen or requests for public use conditions under 49 CFR 1152.28 must be filed by December 28, 2017, with the Surface Transportation Board, 395 E Street SW., Washington, DC 20423–0001.5 A copy of any petition filed with the Board should be sent to Karl Morell, Karl Morell & Associates, 440 1st Street NW., Suite 440, Washington, DC 20001. If the verified notice contains false or misleading information, the exemption is void ab initio. 2 BNSF’s December 4 correction indicates that the St. Cloud Times, where notice of the proposed abandonment was published, is a newspaper of general circulation in Benton County. BNSF also states that it will serve a copy of the Environmental Report on the Administrator for Benton County, Minn. 3 The Board will grant a stay if an informed decision on environmental issues (whether raised by a party or by the Board’s Office of Environmental Analysis (OEA) in its independent investigation) cannot be made before the exemption’s effective date. See Exemption of Out-of-Serv. Rail Lines, 5 I.C.C.2d 377 (1989). Any request for a stay should be filed as soon as possible so that the Board may take appropriate action before the exemption’s effective date. 4 Each OFA must be accompanied by the filing fee, which is currently set at $1,800. See Regulations Governing Fees for Servs. Performed in Connection with Licensing & Related Servs.—2017 Update, EP 542 (Sub-No. 25), slip op. App. C at 20 (STB served July 28, 2017). 5 BNSF states that the Line may be suitable for other public purposes and that there are 18.60 acres on the Line of which 0.02 acres are reversionary. PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 58045 BNSF has filed a combined environmental and historic report that addresses the effects, if any, of the abandonment on the environment and historic resources. OEA will issue an environmental assessment (EA) by December 15, 2017. Interested persons may obtain a copy of the EA by writing to OEA (Room 1100, Surface Transportation Board, Washington, DC 20423–0001) or by calling OEA at (202) 245–0305. Assistance for the hearing impaired is available through the Federal Information Relay Service at (800) 877–8339. Comments on environmental and historic preservation matters must be filed within 15 days after the EA becomes available to the public. Environmental, historic preservation, public use, or trail use/rail banking conditions will be imposed, where appropriate, in a subsequent decision. Pursuant to the provisions of 49 CFR 1152.29(e)(2), BNSF shall file a notice of consummation with the Board to signify that it has exercised the authority granted and fully abandoned the Line. If consummation has not been effected by BNSF’s filing of a notice of consummation by December 7, 2018, and there are no legal or regulatory barriers to consummation, the authority to abandon will automatically expire. Board decisions and notices are available on our Web site at WWW.STB.GOV. Decided: December 5, 2017. By the Board, Scott M. Zimmerman, Acting Director, Office of Proceedings. Jeffrey Herzig, Clearance Clerk. [FR Doc. 2017–26515 Filed 12–7–17; 8:45 am] BILLING CODE 4915–01–P DEPARTMENT OF TRANSPORTATION Pipeline and Hazardous Materials Safety Administration [Docket No. PHMSA–2017–0129] Pipeline Safety: Underground Natural Gas Storage Facility User Fee Pipeline and Hazardous Materials Safety Administration (PHMSA), Department of Transportation (DOT). ACTION: Notice of agency action and request for comment. AGENCY: On August 16, 2017, the Office of Management and Budget approved the collection of calendar year (CY) 2017 Underground Natural Gas Storage (UNGS) Facility Annual Reports. This notice includes a PHMSA SUMMARY: E:\FR\FM\08DEN1.SGM 08DEN1

Agencies

[Federal Register Volume 82, Number 235 (Friday, December 8, 2017)]
[Notices]
[Pages 58042-58045]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-26448]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82210; File No. SR-BX-2017-052]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4759

December 4, 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 November 28, 2017, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to add additional detail about the purposes 
for which the Exchange uses securities information processor data 
pursuant to Rule 4759, and to make other technical corrections to that 
rule.
    The text of the proposed rule change is available on the Exchange's 
Web site at https://nasdaqbx.cchwallstreet.com/, at the principal office 
of the Exchange, and at 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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of

[[Page 58043]]

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 purpose of the proposed rule change is to add additional detail 
about the purposes for which the Exchange uses securities information 
processor (``SIP'') data pursuant to Rule 4759, and to make other 
technical corrections to that rule. Rule 4759 lists the proprietary and 
network processor feeds that are utilized for the handling, routing, 
and execution of orders, as well as for the regulatory compliance 
processes related to those functions. The BX trading system utilizes 
proprietary market data as the Primary Source of quotation data for the 
following markets that provide a reliable direct feed: NYSE American, 
Nasdaq BX, CBOE EDGA, CBOE EDGX, CHX, NYSE, NYSE Arca, Nasdaq, Nasdaq 
PSX, CBOE BYX, and CBOE BZX.\3\ For each of these markets, the Exchange 
uses SIP data as the Secondary Source of quotation data.\4\
---------------------------------------------------------------------------

    \3\ Several of the exchanges mentioned in this filing have been 
renamed recently; the names used herein reflect the current names of 
the exchanges. This proposed rule change also includes amendments to 
reflect the new names for these exchanges.
    \4\ SIP data is used as the Primary Source for NYSE National, 
FINRA ADF, and IEX. There is no Secondary Source for these markets.
---------------------------------------------------------------------------

    Generally, Rule 4759 provides that the Primary Source of data is 
used for the handling, routing, and execution of orders, as well as for 
the regulatory compliance processes related to those functions, unless 
it is delayed by a configurable amount compared to the Secondary Source 
of data. While this is true for quotation data used by the trading 
system for the handling, routing, and execution of orders, and also 
regulatory compliance processes related to those functions, including, 
for example, determination of trade-throughs under Rule 611 of 
Regulation NMS, the Exchange uses SIP data for certain trade and 
administrative messages. For example, the Exchange uses SIP data for 
limit-up limit-down price bands, market-wide circuit breaker decline 
and status messages, Regulation SHO state messages, trading state 
messages (i.e., halts and resumes), and trade messages (i.e., last 
sale). As described in more detail below, with the exception of last 
sale information, these messages originate from the SIP, and are often 
not available on the direct feeds. To mitigate risks associated with a 
potential SIP outage, however, where the information is available on a 
direct feed from one or more exchanges, the Exchange uses such direct 
feed data solely as a backup to the SIP data.
    The Exchange therefore proposes to amend Rule 4759 to provide that 
the BX System consumes quotation data from the listed proprietary and 
network processor feeds for the handling, routing, and execution of 
orders, as well as for the regulatory compliance processes related to 
those functions.\5\ Furthermore, with the proposed changes, Rule 4759 
will provide that the SIP is the Primary Source of certain trade and 
administrative messages such as limit-up limit-down price bands, 
market-wide circuit breaker decline and status messages, Regulation SHO 
state messages, halts and resumes, and last sale information, and that, 
where available, the direct feeds are the Secondary Source of such 
information. For the reasons discussed in this filing, the Exchange 
believes that it is appropriate to use the SIP as the Primary Source of 
data for these trade and administrative messages. Limit-up limit down 
price bands, for instance, are not available on any of the direct feeds 
used by the Exchange as these bands are calculated and disseminated by 
the SIP pursuant to the Plan to Address Extraordinary Market 
Volatility. Similarly, market-wide circuit breaker decline and status 
messages, Regulation SHO state messages, and trading state messages are 
available on some but not other direct feeds. Again, the SIP is 
responsible for calculating any decline in the S&P 500 Index and 
disseminating halt messages for the market-wide circuit breaker, and 
also for disseminating other halts, resumes, and Regulation SHO state 
messages. In addition, the Exchange's trading system consumes last sale 
information from the SIP, which is used for the limited purpose of 
determining when the Exchange can open securities after an IPO.\6\ 
Although last sale information is disseminated on proprietary market 
data feeds, this information is typically included in a different 
market data product than the Exchange uses for quotation data, and the 
Exchange's trading system therefore also consumes last sale information 
from the SIP for the limited purpose described above.
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    \5\ The Exchange notes that the rule language currently provides 
that the Exchange ``utilizes'' these feeds. As a non-substantive 
change, the Exchange is changing this word to ``consumes'' as this 
word fits better with language being added to the rule.
    \6\ The Exchange waits for a last sale from the listing market 
prior to starting the Exchange's opening process following an IPO on 
another market.
---------------------------------------------------------------------------

    Finally, the Exchange proposes to make additional technical 
amendments to Rule 4759. Specifically, several of the exchanges and 
direct market data feeds described in the rule have been renamed since 
the Exchange adopted the rule. The Exchange therefore propose to: (1) 
Rename the exchanges described in the rule so that the exchanges are 
identified by their new names,\7\ and (2) replace the names of the 
individual direct feeds with a generic notation that the ``Direct 
Feed'' is used to avoid the need for future updates every time an 
exchange changes the name of its proprietary market data offerings. 
These changes are technical amendments and will have no impact on the 
operation of the Exchange or its use of the identified market data 
feeds.
---------------------------------------------------------------------------

    \7\ The new names of each of the exchanges described in Rule 
4759 are used earlier in this filing. See notes 4-5 supra and 
accompanying text.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ in particular, in that it is designed 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change removes 
impediments to and perfects the mechanism of a free and open market and 
protects investors and the public interest because it provides 
additional transparency around the purposes for which the Exchange uses 
SIP data. The proposed rule change does not change the operation of the 
Exchange or its use of data feeds; rather it clarifies the Exchange's 
rules with regard to information consumed from the SIP. Specifically, 
the proposed rule change indicates that the Exchange uses SIP data for 
certain administrative messages, including, limit-up limit-down price 
bands, market-wide circuit breaker decline and status messages, 
Regulation SHO state messages, and trading state messages (i.e., halts 
and resumes), as well as trade messages (i.e., last sale). At least one 
other exchange uses SIP data for these purposes, while continuing to 
use the direct feeds for quotation data where the direct feeds often 
offer reduced latency.\10\
---------------------------------------------------------------------------

    \10\ See IEX Rule 11.410(a)(3).
---------------------------------------------------------------------------

    The Exchange believes that it is appropriate to use SIP data as the 
primary source for administrative

[[Page 58044]]

messages that originate from the SIP and may or may not be available on 
particular proprietary market data feeds. Although quote data used for 
the handling, routing, and execution of orders is typically available 
with a lower latency over the direct feeds, the same is not true for 
the administrative messages described above that originate from the SIP 
and are re-disseminated (or not disseminated at all) by the various 
direct feeds. The Exchange therefore believes that it is consistent 
with the public interest and protection of investors to get this 
information directly from the SIP, i.e., the official source of the 
information, rather than indirectly from proprietary market data feeds 
that may or may not redistribute such information. Furthermore, with 
respect to last sale information, such information is used by the 
trading system for the limited purposes described in this filing, and 
is not typically available on the direct feeds that the Exchange uses 
for quotation data. The Exchange therefore also believes that it is 
appropriate to get last sale information from the SIP. Where the 
information described in this filing is available on a direct feed, 
however, direct feed data will be used in the event failover is 
necessary, thereby adding redundancy and mitigating risks associated 
with a potential SIP outage.
    The proposed rule change also makes certain technical amendments to 
Rule 4759, including updating the names of exchanges that have been 
renamed since the adoption of this rule. The Exchange believes that it 
is consistent with the public interest and the protection of investors 
to update the names of the exchanges listed in Rule 4759 as this change 
will make it easier for market participants to identify the exchanges 
for which the Exchange uses the direct feed and/or SIP for the purposes 
described in the rule. Furthermore, the proposed rule change replaces 
the names of the direct feeds with a generic notation that the ``Direct 
Feed'' is used. The Exchange believes that this change is consistent 
with the protection of investors and the public interest as the 
exchanges may change the names of their data feeds periodically, 
resulting in the list being out of date. Rather than update the list 
every time a market changes the names of their [sic] proprietary market 
data products, the Exchange believes that it is preferable to simply 
explain that the direct feed is used. Several other exchanges also 
similarly note that the direct feed is used rather than spelling out 
the names of each feed.\11\
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    \11\ See e.g. IEX Rule 11.410(a); CBOE BZX Rule 11.26.
---------------------------------------------------------------------------

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 proposed rule change is 
not designed to address any competitive issue but rather would provide 
members and other market participants with information about the 
purposes for which the Exchange uses SIP data, and make other technical 
corrections to Rule 4759. No changes to the Exchange's trading or other 
systems are being introduced with the proposed rule change, and the 
Exchange believes that the proposed changes will increase transparency 
around the operation of the Exchange and its use of market data feeds 
without any significant impact on competition.

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 \12\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \14\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ 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 asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative upon filing. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest as it will allow the 
Exchange to clarify the purposes for which the Exchange uses SIP data 
and avoid potential confusion among market participants. Accordingly, 
the Commission hereby waives the operative delay and designates the 
proposal operative upon filing.\16\
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

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 [email protected]. Please include 
File Number SR-BX-2017-052 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-BX-2017-052. 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

[[Page 58045]]

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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-BX-2017-052 and should be submitted on 
or before December 29, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26448 Filed 12-7-17; 8:45 am]
 BILLING CODE 8011-01-P
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