Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing of Amendment No. 2 to a Proposed Rule Change To Establish a Corporate Bond New Issue Reference Data Service and Designation of a Longer Period for Commission Action on Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To Establish a Corporate Bond New Issue Reference Data Service, 54712-54714 [2019-22142]
Download as PDF
54712
Federal Register / Vol. 84, No. 197 / Thursday, October 10, 2019 / Notices
members and updating the training of
existing compliance staff members to
use EFFS, for a total annual burden of
420 hours (42 respondent SROs × 10
hours).
In connection with Security-Based
Swap Submissions, counterparties may
apply for a stay from a mandatory
clearing requirement under Rule 3Ca–1.
The Commission estimates that each
clearing agency will submit five
applications for stays from a clearing
requirement per year and it will take
approximately 18 hours to retrieve,
review, and submit each application.
Thus, the total annual reporting burden
for the Rule 3Ca–1 stay of clearing
requirement would be 270 hours (3
respondent clearing agencies × 5 stay of
clearing applications per year × 18
hours to retrieve, review, and submit the
stay of clearing information).
Based on the above, the total
estimated annual response burden
pursuant to Rule 19b–4 and Form 19b–
4 is the sum of the total annual
reporting burdens for filing proposed
rule changes, Advance Notices, and
Security-Based Swap Submissions;
training staff to file such proposals;
drafting, modifying, and implementing
internal policies and procedures for
filing such proposals; posting each
proposal on the respondents’ websites;
updating websites to enable posting of
proposals; updating the respondents’
online rulebooks to reflect the proposals
that became effective; submitting copies
of Advance Notices to the Board; and
applying for stays from clearing
requirements, which is 91,300 hours.
Compliance with Rule 19b–4 is
mandatory. Information received in
response to Rule 19b–4 shall not be kept
confidential; the information collected
is public information.
An agency may not conduct or
sponsor, and a person is not required to
respond to, a collection of information
under the PRA unless it displays a
currently valid OMB control number.
The public may view background
documentation for this information
collection at the following website:
www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the
Securities and Exchange Commission,
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Room 10102, New Executive
Office Building, Washington, DC 20503,
or by sending an email to:
Lindsay.M.Abate@omb.eop.gov; and (ii)
Charles Riddle, Acting Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Cynthia
Roscoe, 100 F Street NE, Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov. Comments must
VerDate Sep<11>2014
19:50 Oct 09, 2019
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be submitted to OMB within 30 days of
this notice.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22222 Filed 10–9–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87225; File No. SR–ICC–
2019–010]
Self-Regulatory Organizations; ICE
Clear Credit LLC; Notice of
Designation of Longer Period for
Commission Action on Proposed Rule
Change Relating to Amendments to
the ICC Clearing Rules To Address
Non-Default Losses
October 4, 2019.
On August 8, 2019, ICE Clear Credit
LLC (‘‘ICC’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (the ‘‘Act’’),1 and Rule 19b–4
thereunder,2 a proposed rule change to
make certain changes to ICC’s Clearing
Rules. The proposed rule change was
published for comment in the Federal
Register on August 28, 2019.3 The
Commission has received comments
regarding the proposed rule change.4
Section 19(b)(2) of the Act 5 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day from the
publication of notice of filing of this
proposed rule change is October 12,
2019.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Self-Regulatory Organizations; ICE Clear Credit
LLC; Proposed Rule Change, Security-Based Swap
Submission, or Advance Notice Relating to the ICC
Clearing Rules; Exchange Act Release No. 86729
(Aug. 22, 2019); 84 FR 45191 (Aug. 28, 2019)
(‘‘Notice’’).
4 See letter from Jacqueline Mesa, Chief Operating
Officer & Senior Vice President of Global Policy
Futures Industry Association, dated September 18,
2019, to Vanessa Countryman, Secretary,
Commission, available at https://www.sec.gov/
comments/sr-icc-2019-010/sr-icc-2019-0106154164-192307.pdf.
5 15 U.S.C. 78s(b)(2).
2 17
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The Commission is extending the 45day time period for Commission action
on the proposed rule change. The
Commission finds it is appropriate to
designate a longer period within which
to take action on the proposed rule
change so that it has sufficient time to
consider ICC’s proposed rule change.
Accordingly, pursuant to Section
19(b)(2) 6 of the Act, and for the reasons
discussed above, the Commission
designates November 26, 2019, as the
date by which the Commission should
either approve or disapprove, or
institute proceedings to determine
whether to disapprove, the proposed
rule change (File No. SR–ICC–2019–
010).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.7
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22145 Filed 10–9–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–87232; File No. SR–FINRA–
2019–008]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Amendment No. 2 to a Proposed Rule
Change To Establish a Corporate Bond
New Issue Reference Data Service and
Designation of a Longer Period for
Commission Action on Proceedings To
Determine Whether To Approve or
Disapprove a Proposed Rule Change,
as Modified by Amendment No. 1, To
Establish a Corporate Bond New Issue
Reference Data Service
October 4, 2019.
I. Introduction
On March 27, 2019, 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 establish a new
issue reference data service for
corporate bonds. The Commission
published notice of filing of the
proposed rule change in the Federal
Register on April 8, 2019.3 On May 22,
6 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(31).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 85488
(April 2, 2019), 84 FR 13977 (‘‘Notice’’).
7 17
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Federal Register / Vol. 84, No. 197 / Thursday, October 10, 2019 / Notices
2019, the Commission designated a
longer period within which to approve
the proposed rule change, disapprove
the proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved.4 On July 1, 2019, the
Commission instituted proceedings
under Section 19(b)(2)(B) of the Act 5 to
determine whether to approve or
disapprove the proposed rule change.6
On October 3, 2019, the Exchange filed
partial Amendment No. 2 to the
proposed rule change.7 The Commission
received twenty comment letters on the
proposal from fourteen commenters.8
4 See Securities Exchange Act Release No. 85911,
83 FR 24839 (May 29, 2019). The Commission
designated July 7, 2019, as the date by which it
should approve, disapprove, or institute
proceedings to determine whether to disapprove the
proposed rule change.
5 15 U.S.C. 78s(b)(2)(B).
6 See Securities Exchange Act Release No. 86256,
84 FR 32506 (July 8, 2019).
7 Partial Amendment No. 1 was also filed on
October 3, 2019 and subsequently withdrawn on
the same day due to a non-substantive
administrative error and replaced with Amendment
No. 2. In Amendment No. 2, the Exchange: (i)
Withdrew the proposed fees for receipt of corporate
new issue reference data in the current proposal
and stated that a separate proposed rule change
would be filed to establish fees related to the
corporate bond new issue reference data service at
a future date prior to implementing the service; (ii)
revised the list of data fields to be collected under
the proposal to clarify certain proposed data fields
and to add six new data fields; and (iii) included
additional rationale for the data fields proposed to
be collected. Amendment No. 2 is available at:
https://www.sec.gov/comments/sr-finra-2019-008/
srfinra2019008.htm.
8 See Letters from: (1) Cathy Scott, Director, Fixed
Income Forum, on behalf of The Credit Roundtable,
dated April 29, 2019 (‘‘Credit Roundtable Letter’’);
(2) Salman Banaei, Executive Director, IHS Markit,
dated April 29, 2019 (‘‘IHS Markit Letter’’); (3)
David R. Burton, Senior Fellow in Economic Policy,
The Heritage Foundation, dated April 29, 2019
(‘‘Heritage Letter’’); (4) Tom Quaadman, Executive
Vice President, U.S. Chamber of Commerce, dated
April 29, 2019 (‘‘Chamber Letter’’); (5) Lynn Martin,
President and COO, ICE Data Services, dated April
29, 2019 (‘‘ICE Data Letter’’); (6) Tyler Gellasch,
Executive Director, Healthy Markets Association,
dated April 29, 2019 (‘‘Healthy Markets Letter’’); (7)
Greg Babyak, Global Head of Regulatory Affairs,
Bloomberg L.P. dated April 29, 2019 (‘‘Bloomberg
Letter’’); (8) Marshall Nicholson and Thomas S.
Vales, ICE Bonds dated April 29, 2019 (‘‘ICE Bonds
Letter’’); (9) Christopher B. Killian, Managing
Director, SIFMA, dated April 29, 2019 (‘‘SIFMA
Letter’’); (10) Larry Tabb, TABB Group, dated May
15, 2019 (‘‘Tabb Letter’’); (11) Larry Harris, Fred V.
Keenan Chair in Finance, USC Marshall School of
Business, dated May 17, 2019 (‘‘Harris Letter’’); (12)
John Plansky, Executive Vice President and Chief
Executive Officer, Charles River Development,
dated May 24, 2019 (‘‘Charles River Letter’’); (13)
SEC Fixed Income Market Structure Advisory
Committee, dated June 11, 2019 (‘‘FIMSAC Letter’’);
(14) Greg Babyak, Global Head of Regulatory
Affairs, Bloomberg L.P., dated July 1, 2019
(‘‘Bloomberg Letter II’’); (15) John Thornton, CoChair, et al., Committee on Capital Markets
Regulation, dated July 27, 2019 (‘‘Committee
Letter’’); (16) Greg Babyak, Global Head of
Regulatory Affairs, Bloomberg L.P., dated July 29,
2019 (‘‘Bloomberg Letter III’’); (17) Christopher B.
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19:50 Oct 09, 2019
Jkt 250001
The Commission is publishing this
notice to solicit comments on the
proposed rule change, as modified by
Amendment No. 2, from interested
persons and is designating a longer
period within which to approve or
disapprove the proposed rule change, as
modified by Amendment No. 2.
II. Summary of the Proposed Rule
Change, as Modified by Amendment
No. 2
As described in more detail in the
Notice and Amendment No. 2,9 FINRA
proposes to establish a new issue
reference data service for corporate
bonds. FINRA states that its proposal is
in line with a recommendation from the
SEC Fixed Income Market Structure
Advisory Committee, which
recommended that FINRA establish a
new issue data service which would
contain specified data elements on
TRACE-eligible corporate bond new
issues.10
Specifically, FINRA is proposing to
amend Rule 6760 (Obligation to Provide
Notice) 11 to require that underwriters
subject to Rule 6760 12 report to FINRA
a number of data elements, including
some already specified by the rule, for
new issues in Corporate Debt
Securities.13 Proposed Rule 6760(b)(2)
Killian, Managing Director, SIFMA, dated July 29,
2019 (‘‘SIFMA Letter II’’); (18) Tyler Gellasch,
Executive Director, Healthy Markets Association,
dated July 29, 2019 (‘‘Healthy Markets Letter II’’);
(19) David R. Burton, Senior Fellow in Economic
Policy, The Heritage Foundation, dated July 29,
2019 (‘‘Heritage Letter II’’); and (20) Tom
Quaadman, Executive Vice President, U.S. Chamber
of Commerce, dated July 29, 2019 (‘‘Chamber Letter
II ’’). All comments on the proposed rule change are
available at: https://www.sec.gov/comments/srfinra-2019-008/srfinra2019-008.htm.
9 See supra notes 3 and 7.
10 See Fixed Income Market Structure Advisory
Committee Recommendation (October 29, 2018)
available at: https://www.sec.gov/spotlight/fixedincome-advisory-committee/fimsac-corporate-bondnew-issue-reference-data-recommendation.pdf.
11 As part of the proposal, FINRA would amend
the title of the Rule to ‘‘Obligation to Provide Notice
and Dissemination of Corporate Debt Security New
Issue Reference Data.’’
12 As part of the proposal, FINRA would amend
Rule 6760(a)(1) to clarify that underwriters subject
to the rule must report required information for the
purpose of providing market participants in the
corporate debt security markets with reliable and
timely new issue reference data to facilitate the
trading and settling of these securities, in addition
to the current purpose of facilitating trade reporting
and dissemination in TRACE-Eligible Securities.
13 In connection with the proposal, FINRA
proposes to move the definition of ‘‘Corporate Debt
Security,’’ which is currently located in FINRA
Rule 2232 (Customer Confirmations), into the
TRACE Rule Series (specifically Rule 6710
(Definitions)) and to make corresponding technical
edits to Rule 2232 to refer to the relocated
definition in Rule 6710. In addition, FINRA
proposes to make two changes to the definition of
‘‘Corporate Debt Security’’ which FINRA states are
technical, non-substantive edits that reflect the
original intent of the definition and are consistent
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54713
would require that, in addition to the
information required by Rule
6760(b)(1),14 for a new issue in a
Corporate Debt Security, excluding
bonds issued by religious organizations
or for religious purposes, the following
information must be reported, if
applicable: (A) The International
Securities Identification Number (ISIN);
(B) the currency; (C) the issue date; (D)
the first settle date; (E) the interest
accrual date; (F) the day count
description; (G) the coupon frequency;
(H) the first coupon payment date; (I) a
Regulation S indicator; (J) the security
type; (K) the bond type; (L) the first
coupon period type; (M) a convertible
indicator; (N) a call indicator; (O) the
first call date; (P) a put indicator; (Q) the
first put date; (R) the minimum
increment; (S) the minimum piece/
denomination; (T) the issuance amount;
(U) the first call price; (V) the first put
price; (W) the coupon type; (X) rating
(TRACE Grade); (Y) a perpetual maturity
indicator; (Z) a Payment-In-Kind (PIK)
indicator; (AA) first conversion date;
(BB) first conversion ratio; (CC) spread;
(DD) reference rate; (EE) floor; and (FF)
underlying entity ticker.15
FINRA proposes to require
underwriters to report all data fields for
Corporate Debt Securities prior to the
first transaction in the security. FINRA
would disseminate the corporate bond
new issue reference data collected
under Rule 6760 upon receipt.16 FINRA
with current FINRA guidance. See Notice, at 13978,
n.6. Specifically, FINRA proposes to revise the
current definition of Corporate Debt Security to (i)
clarify that the definition is limited to TRACEEligible Securities, and (ii) update the definition to
exclude Securitized Products (in Rule 6710(m)),
rather than Asset-Backed Securities (defined in
Rule 6710(cc)).
14 Rule 6760(b), proposed to be renumbered as
Rule 6760(b)(1), currently requires the following
information to be reported to FINRA: (A) The
CUSIP number or if a CUSIP number is not
available, a similar numeric identifier (e.g., a
mortgage pool number); (B) the issuer name, or, for
a Securitized Product, the names of the Securitizers;
(C) the coupon rate; (D) the maturity; (E) whether
Securities Act Rule 144A applies; (F) the time that
the new issue is priced, and, if different, the time
that the first transaction in the offering is executed;
(G) a brief description of the issue (e.g., senior
subordinated note, senior note); and (H) such other
information FINRA deems necessary to properly
implement the reporting and dissemination of a
TRACE-Eligible Security, or if any of items (B)
through (H) has not been determined or a CUSIP
number (or a similar numeric identifier) is not
assigned or is not available when notice must be
given, such other information that FINRA deems
necessary and is sufficient to identify the security
accurately.
15 In Amendment No. 2, FINRA included its
rationale for each data field proposed to be
collected for new issue Corporate Debt Securities.
See Amendment No. 2, supra note 7, at Exhibit 3.
16 FINRA states that under proposed Rule
6760(d), there may be some information collected
under the rule for security classification or other
E:\FR\FM\10OCN1.SGM
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Federal Register / Vol. 84, No. 197 / Thursday, October 10, 2019 / Notices
states that it will submit a separate filing
to establish fees related to the new issue
reference data service at a future date
and will implement the service after
those fees are adopted.17
If the Commission approves the filing,
FINRA proposes to announce the
effective date of the proposed rule
change in a Regulatory Notice to be
published no later than 90 days
following publication of the Regulatory
Notice. The effective date will be no
later than 270 days following
Commission approval.
III. Solicitation of Comments on
Amendment No. 2 to the Proposed Rule
Change
Interested persons are invited to
submit written views, data, and
arguments concerning whether
Amendment No. 2 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–
FINRA–2019–008 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–FINRA–2019–008. 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 website (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 website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
purposes that would not be disseminated. This may
include, for example, information about ratings that
is restricted by agreement. In addition, CUSIP
Global Services’ (‘‘CGS’’) information would not be
disseminated to subscribers that do not have a valid
license regarding use of CGS data.
17 See Amendment No. 2, supra note 7, at 4.
VerDate Sep<11>2014
19:50 Oct 09, 2019
Jkt 250001
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 FINRA. 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–FINRA–
2019–008 and should be submitted on
or before October 24, 2019.
IV. Notice of Designation of a Longer
Period for Commission Action on
Proceedings To Determine Whether To
Approve or Disapprove a Proposed
Rule Change, as Modified by
Amendment No. 2, To Establish a
Corporate Bond New Issue Reference
Data Service
Section 19(b)(2) of the Act 18 provides
that, after initiating proceedings, the
Commission shall issue an order
approving or disapproving the proposed
rule change not later than 180 days after
the date of publication of notice of filing
of the proposed rule change. The
Commission may, however, extend the
period for issuing an order approving or
disapproving the proposed rule change
by not more than 60 days if the
Commission determines that a longer
period is appropriate and publishes the
reasons for such determination. The
proposed rule change was published for
notice and comment in the Federal
Register on April 8, 2019. October 5,
2019 is 180 days from that date, and
December 4, 2019 is 240 days from that
date.
The Commission finds it appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider this proposed rule change,
as modified by Amendment No. 2, and
the comments received. Accordingly,
the Commission, pursuant to Section
19(b)(2) of the Act,19 designates
December 4, 2019, as the date by which
the Commission shall either approve or
disapprove the proposed rule change
(File No. SR–FINRA–2019–008).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–22142 Filed 10–9–19; 8:45 am]
BILLING CODE 8011–01–P
18 15
PO 00000
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
Frm 00130
Fmt 4703
[Release No. 34–87230; File No. SR–
NASDAQ–2019–061]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Designation of a Longer Period for
Commission Action on a Proposed
Rule Change Relating to the Nasdaq
Official Closing Price for NasdaqListed Exchange-Traded Products
October 4, 2019.
On August 8, 2019, The Nasdaq Stock
Market LLC (‘‘Nasdaq’’) 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
relating to how the Nasdaq Official
Closing Price will be determined for a
Nasdaq-listed security that is an
exchange-traded product. The proposed
rule change was published for comment
in the Federal Register on August 23,
2019.3 The Commission has received no
comments on the proposed rule change.
Section 19(b)(2) of the Act 4 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding, or as to which the
self-regulatory organization consents,
the Commission shall either approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved. The 45th day after
publication of the notice for this
proposed rule change is October 7,
2019. The Commission is extending this
45-day time period.
The Commission finds it appropriate
to designate a longer period within
which to take action on the proposed
rule change so that it has sufficient time
to consider the proposed rule change.
Accordingly, the Commission, pursuant
to Section 19(b)(2) of the Act,5
designates November 21, 2019, as the
date by which the Commission shall
either approve or disapprove, or
institute proceedings to determine
whether to disapprove, the proposed
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 86705
(August 19, 2019), 84 FR 44343.
4 15 U.S.C. 78s(b)(2).
5 Id.
2 17
19 Id.
20 17
SECURITIES AND EXCHANGE
COMMISSION
Sfmt 4703
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10OCN1
Agencies
[Federal Register Volume 84, Number 197 (Thursday, October 10, 2019)]
[Notices]
[Pages 54712-54714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-22142]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87232; File No. SR-FINRA-2019-008]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing of Amendment No. 2 to a Proposed Rule
Change To Establish a Corporate Bond New Issue Reference Data Service
and Designation of a Longer Period for Commission Action on Proceedings
To Determine Whether To Approve or Disapprove a Proposed Rule Change,
as Modified by Amendment No. 1, To Establish a Corporate Bond New Issue
Reference Data Service
October 4, 2019.
I. Introduction
On March 27, 2019, 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 establish a new issue reference data service
for corporate bonds. The Commission published notice of filing of the
proposed rule change in the Federal Register on April 8, 2019.\3\ On
May 22,
[[Page 54713]]
2019, the Commission designated a longer period within which to approve
the proposed rule change, disapprove the proposed rule change, or
institute proceedings to determine whether the proposed rule change
should be disapproved.\4\ On July 1, 2019, the Commission instituted
proceedings under Section 19(b)(2)(B) of the Act \5\ to determine
whether to approve or disapprove the proposed rule change.\6\ On
October 3, 2019, the Exchange filed partial Amendment No. 2 to the
proposed rule change.\7\ The Commission received twenty comment letters
on the proposal from fourteen commenters.\8\ The Commission is
publishing this notice to solicit comments on the proposed rule change,
as modified by Amendment No. 2, from interested persons and is
designating a longer period within which to approve or disapprove the
proposed rule change, as modified by Amendment No. 2.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 85488 (April 2,
2019), 84 FR 13977 (``Notice'').
\4\ See Securities Exchange Act Release No. 85911, 83 FR 24839
(May 29, 2019). The Commission designated July 7, 2019, as the date
by which it should approve, disapprove, or institute proceedings to
determine whether to disapprove the proposed rule change.
\5\ 15 U.S.C. 78s(b)(2)(B).
\6\ See Securities Exchange Act Release No. 86256, 84 FR 32506
(July 8, 2019).
\7\ Partial Amendment No. 1 was also filed on October 3, 2019
and subsequently withdrawn on the same day due to a non-substantive
administrative error and replaced with Amendment No. 2. In Amendment
No. 2, the Exchange: (i) Withdrew the proposed fees for receipt of
corporate new issue reference data in the current proposal and
stated that a separate proposed rule change would be filed to
establish fees related to the corporate bond new issue reference
data service at a future date prior to implementing the service;
(ii) revised the list of data fields to be collected under the
proposal to clarify certain proposed data fields and to add six new
data fields; and (iii) included additional rationale for the data
fields proposed to be collected. Amendment No. 2 is available at:
https://www.sec.gov/comments/sr-finra-2019-008/srfinra2019008.htm.
\8\ See Letters from: (1) Cathy Scott, Director, Fixed Income
Forum, on behalf of The Credit Roundtable, dated April 29, 2019
(``Credit Roundtable Letter''); (2) Salman Banaei, Executive
Director, IHS Markit, dated April 29, 2019 (``IHS Markit Letter'');
(3) David R. Burton, Senior Fellow in Economic Policy, The Heritage
Foundation, dated April 29, 2019 (``Heritage Letter''); (4) Tom
Quaadman, Executive Vice President, U.S. Chamber of Commerce, dated
April 29, 2019 (``Chamber Letter''); (5) Lynn Martin, President and
COO, ICE Data Services, dated April 29, 2019 (``ICE Data Letter'');
(6) Tyler Gellasch, Executive Director, Healthy Markets Association,
dated April 29, 2019 (``Healthy Markets Letter''); (7) Greg Babyak,
Global Head of Regulatory Affairs, Bloomberg L.P. dated April 29,
2019 (``Bloomberg Letter''); (8) Marshall Nicholson and Thomas S.
Vales, ICE Bonds dated April 29, 2019 (``ICE Bonds Letter''); (9)
Christopher B. Killian, Managing Director, SIFMA, dated April 29,
2019 (``SIFMA Letter''); (10) Larry Tabb, TABB Group, dated May 15,
2019 (``Tabb Letter''); (11) Larry Harris, Fred V. Keenan Chair in
Finance, USC Marshall School of Business, dated May 17, 2019
(``Harris Letter''); (12) John Plansky, Executive Vice President and
Chief Executive Officer, Charles River Development, dated May 24,
2019 (``Charles River Letter''); (13) SEC Fixed Income Market
Structure Advisory Committee, dated June 11, 2019 (``FIMSAC
Letter''); (14) Greg Babyak, Global Head of Regulatory Affairs,
Bloomberg L.P., dated July 1, 2019 (``Bloomberg Letter II''); (15)
John Thornton, Co-Chair, et al., Committee on Capital Markets
Regulation, dated July 27, 2019 (``Committee Letter''); (16) Greg
Babyak, Global Head of Regulatory Affairs, Bloomberg L.P., dated
July 29, 2019 (``Bloomberg Letter III''); (17) Christopher B.
Killian, Managing Director, SIFMA, dated July 29, 2019 (``SIFMA
Letter II''); (18) Tyler Gellasch, Executive Director, Healthy
Markets Association, dated July 29, 2019 (``Healthy Markets Letter
II''); (19) David R. Burton, Senior Fellow in Economic Policy, The
Heritage Foundation, dated July 29, 2019 (``Heritage Letter II'');
and (20) Tom Quaadman, Executive Vice President, U.S. Chamber of
Commerce, dated July 29, 2019 (``Chamber Letter II ''). All comments
on the proposed rule change are available at: https://www.sec.gov/comments/sr-finra-2019-008/srfinra2019-008.htm.
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II. Summary of the Proposed Rule Change, as Modified by Amendment No. 2
As described in more detail in the Notice and Amendment No. 2,\9\
FINRA proposes to establish a new issue reference data service for
corporate bonds. FINRA states that its proposal is in line with a
recommendation from the SEC Fixed Income Market Structure Advisory
Committee, which recommended that FINRA establish a new issue data
service which would contain specified data elements on TRACE-eligible
corporate bond new issues.\10\
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\9\ See supra notes 3 and 7.
\10\ See Fixed Income Market Structure Advisory Committee
Recommendation (October 29, 2018) available at: https://www.sec.gov/spotlight/fixed-income-advisory-committee/fimsac-corporate-bond-new-issue-reference-data-recommendation.pdf.
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Specifically, FINRA is proposing to amend Rule 6760 (Obligation to
Provide Notice) \11\ to require that underwriters subject to Rule 6760
\12\ report to FINRA a number of data elements, including some already
specified by the rule, for new issues in Corporate Debt Securities.\13\
Proposed Rule 6760(b)(2) would require that, in addition to the
information required by Rule 6760(b)(1),\14\ for a new issue in a
Corporate Debt Security, excluding bonds issued by religious
organizations or for religious purposes, the following information must
be reported, if applicable: (A) The International Securities
Identification Number (ISIN); (B) the currency; (C) the issue date; (D)
the first settle date; (E) the interest accrual date; (F) the day count
description; (G) the coupon frequency; (H) the first coupon payment
date; (I) a Regulation S indicator; (J) the security type; (K) the bond
type; (L) the first coupon period type; (M) a convertible indicator;
(N) a call indicator; (O) the first call date; (P) a put indicator; (Q)
the first put date; (R) the minimum increment; (S) the minimum piece/
denomination; (T) the issuance amount; (U) the first call price; (V)
the first put price; (W) the coupon type; (X) rating (TRACE Grade); (Y)
a perpetual maturity indicator; (Z) a Payment-In-Kind (PIK) indicator;
(AA) first conversion date; (BB) first conversion ratio; (CC) spread;
(DD) reference rate; (EE) floor; and (FF) underlying entity ticker.\15\
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\11\ As part of the proposal, FINRA would amend the title of the
Rule to ``Obligation to Provide Notice and Dissemination of
Corporate Debt Security New Issue Reference Data.''
\12\ As part of the proposal, FINRA would amend Rule 6760(a)(1)
to clarify that underwriters subject to the rule must report
required information for the purpose of providing market
participants in the corporate debt security markets with reliable
and timely new issue reference data to facilitate the trading and
settling of these securities, in addition to the current purpose of
facilitating trade reporting and dissemination in TRACE-Eligible
Securities.
\13\ In connection with the proposal, FINRA proposes to move the
definition of ``Corporate Debt Security,'' which is currently
located in FINRA Rule 2232 (Customer Confirmations), into the TRACE
Rule Series (specifically Rule 6710 (Definitions)) and to make
corresponding technical edits to Rule 2232 to refer to the relocated
definition in Rule 6710. In addition, FINRA proposes to make two
changes to the definition of ``Corporate Debt Security'' which FINRA
states are technical, non-substantive edits that reflect the
original intent of the definition and are consistent with current
FINRA guidance. See Notice, at 13978, n.6. Specifically, FINRA
proposes to revise the current definition of Corporate Debt Security
to (i) clarify that the definition is limited to TRACE-Eligible
Securities, and (ii) update the definition to exclude Securitized
Products (in Rule 6710(m)), rather than Asset-Backed Securities
(defined in Rule 6710(cc)).
\14\ Rule 6760(b), proposed to be renumbered as Rule 6760(b)(1),
currently requires the following information to be reported to
FINRA: (A) The CUSIP number or if a CUSIP number is not available, a
similar numeric identifier (e.g., a mortgage pool number); (B) the
issuer name, or, for a Securitized Product, the names of the
Securitizers; (C) the coupon rate; (D) the maturity; (E) whether
Securities Act Rule 144A applies; (F) the time that the new issue is
priced, and, if different, the time that the first transaction in
the offering is executed; (G) a brief description of the issue
(e.g., senior subordinated note, senior note); and (H) such other
information FINRA deems necessary to properly implement the
reporting and dissemination of a TRACE-Eligible Security, or if any
of items (B) through (H) has not been determined or a CUSIP number
(or a similar numeric identifier) is not assigned or is not
available when notice must be given, such other information that
FINRA deems necessary and is sufficient to identify the security
accurately.
\15\ In Amendment No. 2, FINRA included its rationale for each
data field proposed to be collected for new issue Corporate Debt
Securities. See Amendment No. 2, supra note 7, at Exhibit 3.
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FINRA proposes to require underwriters to report all data fields
for Corporate Debt Securities prior to the first transaction in the
security. FINRA would disseminate the corporate bond new issue
reference data collected under Rule 6760 upon receipt.\16\ FINRA
[[Page 54714]]
states that it will submit a separate filing to establish fees related
to the new issue reference data service at a future date and will
implement the service after those fees are adopted.\17\
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\16\ FINRA states that under proposed Rule 6760(d), there may be
some information collected under the rule for security
classification or other purposes that would not be disseminated.
This may include, for example, information about ratings that is
restricted by agreement. In addition, CUSIP Global Services'
(``CGS'') information would not be disseminated to subscribers that
do not have a valid license regarding use of CGS data.
\17\ See Amendment No. 2, supra note 7, at 4.
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If the Commission approves the filing, FINRA proposes to announce
the effective date of the proposed rule change in a Regulatory Notice
to be published no later than 90 days following publication of the
Regulatory Notice. The effective date will be no later than 270 days
following Commission approval.
III. Solicitation of Comments on Amendment No. 2 to the Proposed Rule
Change
Interested persons are invited to submit written views, data, and
arguments concerning whether Amendment No. 2 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-FINRA-2019-008 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-FINRA-2019-008. 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 website (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 website 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 FINRA. 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-FINRA-2019-008 and should be submitted
on or before October 24, 2019.
IV. Notice of Designation of a Longer Period for Commission Action on
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change, as Modified by Amendment No. 2, To Establish a Corporate
Bond New Issue Reference Data Service
Section 19(b)(2) of the Act \18\ provides that, after initiating
proceedings, the Commission shall issue an order approving or
disapproving the proposed rule change not later than 180 days after the
date of publication of notice of filing of the proposed rule change.
The Commission may, however, extend the period for issuing an order
approving or disapproving the proposed rule change by not more than 60
days if the Commission determines that a longer period is appropriate
and publishes the reasons for such determination. The proposed rule
change was published for notice and comment in the Federal Register on
April 8, 2019. October 5, 2019 is 180 days from that date, and December
4, 2019 is 240 days from that date.
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\18\ 15 U.S.C. 78s(b)(2).
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The Commission finds it appropriate to designate a longer period
within which to take action on the proposed rule change so that it has
sufficient time to consider this proposed rule change, as modified by
Amendment No. 2, and the comments received. Accordingly, the
Commission, pursuant to Section 19(b)(2) of the Act,\19\ designates
December 4, 2019, as the date by which the Commission shall either
approve or disapprove the proposed rule change (File No. SR-FINRA-2019-
008).
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\19\ Id.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\20\
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\20\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-22142 Filed 10-9-19; 8:45 am]
BILLING CODE 8011-01-P