Self-Regulatory Organizations; New York Stock Exchange LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend the NYSE Rule 6800 Series, the Exchange's Compliance Rule Regarding the National Market System Plan Governing the Consolidated Audit Trail, 23083-23085 [2020-08701]

Download as PDF Federal Register / Vol. 85, No. 80 / Friday, April 24, 2020 / Notices described above, in a manner consistent with the February 19, 2020 Exemption Request, including each of the representations made in the February 19, 2020 Exemption Request, as modified by the discussion in Section IV of this Order. As noted above, the Participants have represented in their February 19, 2020 Exemption Request that the full scope of CAT Data required under the CAT NMS Plan will be available when all five phases of Phased Reporting are complete, subject to any applicable exemptive relief or amendments to the CAT NMS Plan.114 Accordingly, it is hereby ordered, pursuant to Section 36 of the Exchange Act 115 and Rule 608(e) of Regulation NMS,116 that the Commission grants the Participants’ request for exemptive relief, as set forth in the February 19, 2020 Exemption Request from the requirements in Sections 6.4, 6.7(a)(v) and 6.7(a)(vi) of the CAT NMS Plan related to Industry Member reporting of Industry Member Data to the Central Repository to allow for the implementation of Phased Reporting, subject to the conditions described above. By the Commission. Vanessa A. Countryman, Secretary. [FR Doc. 2020–08705 Filed 4–23–20; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION April 20, 2020. khammond on DSKJM1Z7X2PROD with NOTICES I. Introduction On January 3, 2020, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘the Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 115 15 116 17 February 19, 2020 Exemption Request at U.S.C. 78mm(a)(1). CFR 242.608(e). VerDate Sep<11>2014 17:03 Apr 23, 2020 Jkt 250001 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The CAT NMS Plan was approved by the Commission, as modified, on November 15, 2016. See Securities Exchange Act Release No79318 (November 15, 2016), 81 FR 84696 (November 23, 2016). 4 See Securities Exchange Act Release No. 87990 (January 16, 2020), 85 FR 3963 (‘‘Notice’’). 5 See Securities Exchange Act Release No. 88329, 85 FR 14265 (March 11, 2020). 6 15 U.S.C. 78(s)(b)(2)(B). 7 Industry Member means a member of a national securities exchange or a member of a national securities association. See CAT NMS Plan, supra note 3, at Section 1.1. See also proposed NYSE Rule 6810(s). 8 The Participants include BOX Exchange LLC, Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc., Investors’ Exchange LLC, Long-Term Stock Exchange, Inc., Miami International Securities Exchange LLC, MIAX Emerald, LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq PHLX LLC, The Nasdaq Stock Market LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE National, Inc. 9 As proposed, ‘‘Firm Designated ID’’ would mean a unique and persistent identifier for each trading account designated by Industry Members for purposes of providing data to the Central Repository, where each such identifier is unique among all identifiers from any given Industry 2 17 Self-Regulatory Organizations; New York Stock Exchange LLC; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change To Amend the NYSE Rule 6800 Series, the Exchange’s Compliance Rule Regarding the National Market System Plan Governing the Consolidated Audit Trail 114 See II. Description of the Proposed Rule Change The Exchange proposes to amend the NYSE Rule 6800 Series (‘‘Compliance Rule’’), which sets forth rules regarding Industry Member 7 compliance with the CAT NMS Plan. Specifically, the proposed rule change would make the following changes to the Compliance Rule to be consistent with certain proposed amendments to and exemption requests submitted by the Participants 8 of the CAT NMS Plan: (1) Revise data reporting requirements for the Firm Designated ID 9 based on a 1 15 [Release No. 34–88700; File No. SR–NYSE– 2020–01] 2. (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend the Exchange’s compliance rules regarding the National Market System Plan Governing the Consolidated Audit Trail (‘‘CAT NMS Plan’’).3 The proposed rule change was published for comment in the Federal Register on January 23, 2020.4 On March 5, 2020, the Commission extended the time period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to approve or disapprove the proposed rule change, to April 22, 2020.5 The Commission received no comments on the proposal. This order institutes proceedings pursuant to Exchange Act Section 19(b)(2)(B) to determine whether to approve or disapprove File No. SR– NYSE–2020–01.6 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 23083 proposed amendment to the CAT NMS Plan filed with the Commission; 10 (2) amend the dates for required testing and reporting in the Compliance Rule for Industry Member reporting; 11 (3) amend the rules to require Industry Members to submit trade reports for executions and cancellations for cancelled trades to the FINRA’s Trade Reporting Facilities, FINRA’s OTC Reporting Facility or FINRA’s Alternative Display Facility; 12 (4) revise the timestamp granularity requirement to require Industry Members with order handling or execution systems that utilize time stamps in increments finer than milliseconds to report timestamps up to nanoseconds when reporting Industry Member data 13 to the Central Member; provided, however, such identifier may not be the account number for such trading account if the trading account is not a proprietary account. See proposed NYSE Rule 6810(r). 10 See Notice, supra note 4, at 3964. See also Letter to Vanessa Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan Operating Committee Chair re: Notice of Filing of Amendment to the National Market System Plan Governing the Consolidated Audit Trail (April 14, 2020). The Commission has not approved or disapproved the changes proposed in this amendment. 11 See Notice, supra note 4, at 3967–72. On February 19, 2020, the Participants submitted a request for exemptive relief from the reporting dates required by the CAT NMS Plan. See Letter to Vanessa Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan Operating Committee Chair, re: Request for Exemption from Provisions of the National Market System Plan Governing the Consolidated Audit Trail related to Industry Member Reporting Dates (Feb. 19, 2020). 12 See Notice, supra note 4, at 3972. On February 12, 2020, the Participants submitted a request for exemptive relief from the requirement in Sections 6.4(d)(ii)(A)(2) and (B) of the CAT NMS Plan to require Industry Members to record and report, if an order is executed, the SRO-Assigned Market Participant Identifier of the clearing broker, and if a trade is cancelled, the cancelled trade indicator. See Letter to Vanessa Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan Operating Committee Chair, re: Request for Exemption from Certain Provisions of the National Market System Plan Governing the Consolidated Audit Trail related to FINRA Facility Data Linkage (Feb. 12, 2020). If granted, the exemptive relief would revise CAT reporting requirements regarding cancelled trades and SRO-Assigned Market Participant Identifiers of clearing brokers, if applicable, in connection with order executions, as such information would be available from FINRA’s trade reports submitted to CAT. 13 See Notice, supra note 4, at 3972–73. On February 3, 2020, the Participants filed a request for exemptive relief from the current CAT NMS Plan requirement to record and report Industry Member Data with time stamps consistent with their system, a requirement from which the Exchange requests an exemption. See Letter to Vanessa Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan Operating Committee Chair, re: Request for Exemption from Certain Provisions of the National Market System Plan Governing the Consolidated Audit Trail related to Granularity of Timestamps and Relationship Identifiers (Feb. 3, 2020). On April 8, 2020, the Commission granted the exemptive relief for timestamp granularity. See Securities Exchange Act Release No. 88608 (April 8, 2020), 85 FR 20743 (April 14, 2020). E:\FR\FM\24APN1.SGM 24APN1 23084 Federal Register / Vol. 85, No. 80 / Friday, April 24, 2020 / Notices khammond on DSKJM1Z7X2PROD with NOTICES Repository; 14 (5) revise the reporting requirements for circumstances in which an Industry Member uses an established trading relationship for an individual Customer, instead of an account, on the order reported to CAT; 15 and (6) revise the CAT reporting requirements so Industry Members would not be required to report to the Central Repository dates of birth, social security numbers, or account numbers for individuals.16 The Exchange also proposes to amend the Exchange’s Compliance Rule to facilitate the retirement of certain existing regulatory systems, specifically the Financial Industry Regulatory Authority, Inc.’s (‘‘FINRA’’) Order Audit Trail System, by adding additional data elements to the CAT reporting requirements for Industry Members,17 additional reporting requirements for alternative trading systems,18 and additional data elements related to OTC Equity Securities 19 that FINRA 14 The Central Repository, as defined in the CAT NMS Plan, means ‘‘the repository responsible for the receipt, consolidation, and retention of all information reported to the CAT pursuant to SEC Rule 613 and this Agreement.’’ See CAT NMS Plan, supra note 3, at Section 1.1. 15 See Notice, supra note 4, at 3973. On February 3, 2020, the Participants filed a request for exemptive relief from the CAT NMS Plan requirement that Participants, through their Compliance Rules, require Industry Members to record and report to the Central Repository the account number, the date account opened, and the account type for individual customers in circumstances in which an Industry Member uses an established trading relationship for the individual customer. Instead, the Participant would require Industry Members to record and report to the Central Repository for the original receipt or origination of an order: (i) The relationship identifier instead of the account number, (ii) the ‘‘account type’’ as a ‘‘relationship’’, and (3) the account effective date instead of the ‘‘date account opened.’’ See Letter to Vanessa Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan Operating Committee Chair, re: Request for Exemption from Certain Provisions of the National Market System Plan Governing the Consolidated Audit Trail related to Granularity of Timestamps and Relationship Identifiers (Feb. 3, 2020). 16 See Notice, supra note 4, at 3973. The Participants requested and have received exemptive relief from the requirement of Section 6.4(d)(ii)(C) of the CAT NMS Plan for the Participants, in their Compliance Rules, to require their members to provide dates of birth, account numbers and social security numbers for individuals to the CAT. See Securities Exchange Act Release No. 88393 (March 17, 2020), 85 FR 16152 (March 20, 2020). See also Letter to Vanessa Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan Operating Committee Chair, re: Request for Exemptive Relief from Certain Provisions of the CAT NMS Plan related to Social Security Numbers, Dates of Birth and Account Numbers (Jan. 29, 2020). 17 See Notice, supra note 4, at 3965–67. 18 See Notice, supra note 4, at 3964–65. 19 OTC Equity Security, as defined in the CAT NMS Plan, means any equity security, other than an NMS Security, subject to prompt last sale reporting rules of a registered national securities association and reported to one of such VerDate Sep<11>2014 17:03 Apr 23, 2020 Jkt 250001 currently receives from alternative trading systems that trade OTC Equity Securities.20 III. Proceedings To Determine Whether To Approve or Disapprove the Proposed Rule Change The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act 21 to determine whether the proposed rule change should be approved or disapproved. Institution of proceedings does not indicate that the Commission has reached any conclusions with respect to any of the issues involved. Rather, the Commission seeks and encourages interested persons to provide additional comment on the proposed rule change to inform the Commission’s analysis of whether to approve or disapprove the proposed rule change. Pursuant to Section 19(b)(2)(B) of the Act,22 the Commission is providing notice of the grounds for possible disapproval under consideration. The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act,23 which requires, among other things, that the rules of a national securities exchange be ‘‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’’ and ‘‘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.’’ 24 The Commission believes that several of the proposed rule changes are not consistent with the CAT NMS Plan or exemptive relief that has been granted as of the date of this Order. IV. Commission’s Solicitation of Comments The Commission requests that interested persons provide written submissions of their views, data, and arguments with respect to the issues identified above, as well as any other concerns they may have with the proposal. In particular, the Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) 25 or any other provision of the Act, or the rules and regulations thereunder. Although there do not association’s equity trade reporting facilities. See CAT NMS Plan, supra note 3, at Section 1.1. 20 Id. at 3967. 21 15 U.S.C. 78s(b)(2)(B). 22 15 U.S.C. 78s(b)(2)(B). 23 15 U.S.C. 78f(b)(5). 24 15 U.S.C. 78f(b)(5). 25 15 U.S.C. 78f(b)(5). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 appear to be any issues relevant to approval or disapproval that would be facilitated by an oral presentation of views, data, and arguments, the Commission will consider, pursuant to Rule 19b–4 under the Act,26 any request for an opportunity to make an oral presentation.27 Interested persons are invited to submit written data, views, and arguments regarding whether the proposal should be approved or disapproved by May 15, 2020. Any person who wishes to file a rebuttal to any other person’s submission must file that rebuttal by May 29, 2020. 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 Numbers SR–NYSE–2020–01 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–NYSE–2020–01. 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 26 17 CFR 240.19b–4. 19(b)(2) of the Exchange Act, as amended by the Securities Act Amendments of 1975, Public Law 94–29 (June 4, 1975), grants the Commission flexibility to determine what type of proceeding—either oral or notice and opportunity for written comments—is appropriate for consideration of a particular proposal by a selfregulatory organization. See Securities Act Amendments of 1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 27 Section E:\FR\FM\24APN1.SGM 24APN1 Federal Register / Vol. 85, No. 80 / Friday, April 24, 2020 / Notices 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–NYSE–2020–01 and should be submitted on or before May 15, 2020 Rebuttal comments should be submitted by May 29, 2020. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.28 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2020–08701 Filed 4–23–20; 8:45 am] BILLING CODE 8011–01–P 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 self-regulatory organization 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 those 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 the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose SECURITIES AND EXCHANGE COMMISSION [Release No. 34–88692; File No. SR– NYSENAT–2020–16] Self-Regulatory Organizations; NYSE National, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 1.1 To Include Managed Portfolio Shares in the Definition of ‘‘UTP Exchange Traded Product’’ April 20, 2020. khammond on DSKJM1Z7X2PROD with NOTICES Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on April 16, 2020, NYSE National, Inc. (‘‘NYSE National’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 1.1 to include Managed Portfolio Shares in the definition of ‘‘UTP Exchange Traded Product.’’ The proposed rule change is available on the Exchange’s website at www.nyse.com, at the principal office of the Exchange, and 28 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 VerDate Sep<11>2014 17:03 Apr 23, 2020 Jkt 250001 The Exchange proposes to amend Rule 1.1(m), which sets forth the meanings of ‘‘Exchange Traded Product’’ and ‘‘UTP Exchange Traded Product’’ as those terms are used in Exchange rules. Specifically, the Exchange proposes to amend the definition of ‘‘UTP Exchange Traded Product’’ to include Managed Portfolio Shares 4 as an additional type of Exchange Traded Product (‘‘ETP’’) that may trade on the Exchange pursuant to unlisted trading privileges (‘‘UTP’’). To effect this change, the Exchange proposes to add a bullet point listing ‘‘Managed Portfolio Shares’’ in Rule 1.1(m) to include them in the enumerated list of ETPs that may trade on the Exchange on a UTP basis. The Exchange also proposes a nonsubstantive grammatical change to accommodate the addition of ‘‘Managed Portfolio Shares’’ as the final item in the bulleted list in Rule 1.1(m). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,5 in general, and furthers the objectives of Section 6(b)(5) of the Act,6 in particular, because it is designed to remove impediments to and perfect the mechanism of a free and 4 Managed Portfolio Shares are shares of actively managed exchange-traded funds for which the portfolio is disclosed in accordance with standard mutual fund disclosure rules. See, e.g., Cboe BZX Exchange, Inc. (‘‘BZX’’) Rule 14.11(k). On April 2, 2020, BZX commenced trading its first securities listed under BZX Rule 14.11(k) (American Century Focused Dynamic Growth ETF (FDG) and American Century Focused Large Cap Value ETF (FLV)). 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4) & (5). PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 23085 open market, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. The proposed rule change is designed to remove impediments to and perfect the mechanism of a free and open market, promote just and equitable principles of trade, and, in general, to protect investors and the public interest because it ensures that Rule 1.1(m) correctly identifies and publicly states the complete list of ETPs that may trade on a UTP basis on the Exchange, providing additional specificity, clarity, and transparency in the Exchange’s rules. Moreover, the proposed rule change will facilitate the trading of an additional type of ETP on the Exchange pursuant to UTP, thereby enhancing competition among market participants for the benefit of investors and the marketplace. 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 change would provide the public and investors with up-to-date information about the types of ETPs that can trade on the Exchange on a UTP basis and would promote competition by adding an additional type of ETP that may trade on the Exchange pursuant to UTP. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. 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) of the Act 7 and Rule 19b– 4(f)(6) thereunder.8 7 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, 8 17 E:\FR\FM\24APN1.SGM Continued 24APN1

Agencies

[Federal Register Volume 85, Number 80 (Friday, April 24, 2020)]
[Notices]
[Pages 23083-23085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08701]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88700; File No. SR-NYSE-2020-01]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Instituting Proceedings To Determine Whether To Approve or Disapprove a 
Proposed Rule Change To Amend the NYSE Rule 6800 Series, the Exchange's 
Compliance Rule Regarding the National Market System Plan Governing the 
Consolidated Audit Trail

April 20, 2020.

I. Introduction

    On January 3, 2020, New York Stock Exchange LLC (``NYSE'' or ``the 
Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend the Exchange's compliance rules regarding 
the National Market System Plan Governing the Consolidated Audit Trail 
(``CAT NMS Plan'').\3\ The proposed rule change was published for 
comment in the Federal Register on January 23, 2020.\4\ On March 5, 
2020, the Commission extended the time period within which to approve 
the proposed rule change, disapprove the proposed rule change, or 
institute proceedings to determine whether to approve or disapprove the 
proposed rule change, to April 22, 2020.\5\ The Commission received no 
comments on the proposal. This order institutes proceedings pursuant to 
Exchange Act Section 19(b)(2)(B) to determine whether to approve or 
disapprove File No. SR-NYSE-2020-01.\6\
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The CAT NMS Plan was approved by the Commission, as 
modified, on November 15, 2016. See Securities Exchange Act Release 
No79318 (November 15, 2016), 81 FR 84696 (November 23, 2016).
    \4\ See Securities Exchange Act Release No. 87990 (January 16, 
2020), 85 FR 3963 (``Notice'').
    \5\ See Securities Exchange Act Release No. 88329, 85 FR 14265 
(March 11, 2020).
    \6\ 15 U.S.C. 78(s)(b)(2)(B).
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The Exchange proposes to amend the NYSE Rule 6800 Series 
(``Compliance Rule''), which sets forth rules regarding Industry Member 
\7\ compliance with the CAT NMS Plan. Specifically, the proposed rule 
change would make the following changes to the Compliance Rule to be 
consistent with certain proposed amendments to and exemption requests 
submitted by the Participants \8\ of the CAT NMS Plan: (1) Revise data 
reporting requirements for the Firm Designated ID \9\ based on a 
proposed amendment to the CAT NMS Plan filed with the Commission; \10\ 
(2) amend the dates for required testing and reporting in the 
Compliance Rule for Industry Member reporting; \11\ (3) amend the rules 
to require Industry Members to submit trade reports for executions and 
cancellations for cancelled trades to the FINRA's Trade Reporting 
Facilities, FINRA's OTC Reporting Facility or FINRA's Alternative 
Display Facility; \12\ (4) revise the timestamp granularity requirement 
to require Industry Members with order handling or execution systems 
that utilize time stamps in increments finer than milliseconds to 
report timestamps up to nanoseconds when reporting Industry Member data 
\13\ to the Central

[[Page 23084]]

Repository; \14\ (5) revise the reporting requirements for 
circumstances in which an Industry Member uses an established trading 
relationship for an individual Customer, instead of an account, on the 
order reported to CAT; \15\ and (6) revise the CAT reporting 
requirements so Industry Members would not be required to report to the 
Central Repository dates of birth, social security numbers, or account 
numbers for individuals.\16\
---------------------------------------------------------------------------

    \7\ Industry Member means a member of a national securities 
exchange or a member of a national securities association. See CAT 
NMS Plan, supra note 3, at Section 1.1. See also proposed NYSE Rule 
6810(s).
    \8\ The Participants include BOX Exchange LLC, Cboe BYX 
Exchange, Inc., Cboe BZX Exchange, Inc., Cboe C2 Exchange, Inc., 
Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe Exchange, 
Inc., Financial Industry Regulatory Authority, Inc., Investors' 
Exchange LLC, Long-Term Stock Exchange, Inc., Miami International 
Securities Exchange LLC, MIAX Emerald, LLC, MIAX PEARL, LLC, Nasdaq 
BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC, Nasdaq 
PHLX LLC, The Nasdaq Stock Market LLC, New York Stock Exchange LLC, 
NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE 
National, Inc.
    \9\ As proposed, ``Firm Designated ID'' would mean a unique and 
persistent identifier for each trading account designated by 
Industry Members for purposes of providing data to the Central 
Repository, where each such identifier is unique among all 
identifiers from any given Industry Member; provided, however, such 
identifier may not be the account number for such trading account if 
the trading account is not a proprietary account. See proposed NYSE 
Rule 6810(r).
    \10\ See Notice, supra note 4, at 3964. See also Letter to 
Vanessa Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan 
Operating Committee Chair re: Notice of Filing of Amendment to the 
National Market System Plan Governing the Consolidated Audit Trail 
(April 14, 2020). The Commission has not approved or disapproved the 
changes proposed in this amendment.
    \11\ See Notice, supra note 4, at 3967-72. On February 19, 2020, 
the Participants submitted a request for exemptive relief from the 
reporting dates required by the CAT NMS Plan. See Letter to Vanessa 
Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan 
Operating Committee Chair, re: Request for Exemption from Provisions 
of the National Market System Plan Governing the Consolidated Audit 
Trail related to Industry Member Reporting Dates (Feb. 19, 2020).
    \12\ See Notice, supra note 4, at 3972. On February 12, 2020, 
the Participants submitted a request for exemptive relief from the 
requirement in Sections 6.4(d)(ii)(A)(2) and (B) of the CAT NMS Plan 
to require Industry Members to record and report, if an order is 
executed, the SRO-Assigned Market Participant Identifier of the 
clearing broker, and if a trade is cancelled, the cancelled trade 
indicator. See Letter to Vanessa Countryman, Secretary, SEC, from 
Michael Simon, CAT NMS Plan Operating Committee Chair, re: Request 
for Exemption from Certain Provisions of the National Market System 
Plan Governing the Consolidated Audit Trail related to FINRA 
Facility Data Linkage (Feb. 12, 2020). If granted, the exemptive 
relief would revise CAT reporting requirements regarding cancelled 
trades and SRO-Assigned Market Participant Identifiers of clearing 
brokers, if applicable, in connection with order executions, as such 
information would be available from FINRA's trade reports submitted 
to CAT.
    \13\ See Notice, supra note 4, at 3972-73. On February 3, 2020, 
the Participants filed a request for exemptive relief from the 
current CAT NMS Plan requirement to record and report Industry 
Member Data with time stamps consistent with their system, a 
requirement from which the Exchange requests an exemption. See 
Letter to Vanessa Countryman, Secretary, SEC, from Michael Simon, 
CAT NMS Plan Operating Committee Chair, re: Request for Exemption 
from Certain Provisions of the National Market System Plan Governing 
the Consolidated Audit Trail related to Granularity of Timestamps 
and Relationship Identifiers (Feb. 3, 2020). On April 8, 2020, the 
Commission granted the exemptive relief for timestamp granularity. 
See Securities Exchange Act Release No. 88608 (April 8, 2020), 85 FR 
20743 (April 14, 2020).
    \14\ The Central Repository, as defined in the CAT NMS Plan, 
means ``the repository responsible for the receipt, consolidation, 
and retention of all information reported to the CAT pursuant to SEC 
Rule 613 and this Agreement.'' See CAT NMS Plan, supra note 3, at 
Section 1.1.
    \15\ See Notice, supra note 4, at 3973. On February 3, 2020, the 
Participants filed a request for exemptive relief from the CAT NMS 
Plan requirement that Participants, through their Compliance Rules, 
require Industry Members to record and report to the Central 
Repository the account number, the date account opened, and the 
account type for individual customers in circumstances in which an 
Industry Member uses an established trading relationship for the 
individual customer. Instead, the Participant would require Industry 
Members to record and report to the Central Repository for the 
original receipt or origination of an order: (i) The relationship 
identifier instead of the account number, (ii) the ``account type'' 
as a ``relationship'', and (3) the account effective date instead of 
the ``date account opened.'' See Letter to Vanessa Countryman, 
Secretary, SEC, from Michael Simon, CAT NMS Plan Operating Committee 
Chair, re: Request for Exemption from Certain Provisions of the 
National Market System Plan Governing the Consolidated Audit Trail 
related to Granularity of Timestamps and Relationship Identifiers 
(Feb. 3, 2020).
    \16\ See Notice, supra note 4, at 3973. The Participants 
requested and have received exemptive relief from the requirement of 
Section 6.4(d)(ii)(C) of the CAT NMS Plan for the Participants, in 
their Compliance Rules, to require their members to provide dates of 
birth, account numbers and social security numbers for individuals 
to the CAT. See Securities Exchange Act Release No. 88393 (March 17, 
2020), 85 FR 16152 (March 20, 2020). See also Letter to Vanessa 
Countryman, Secretary, SEC, from Michael Simon, CAT NMS Plan 
Operating Committee Chair, re: Request for Exemptive Relief from 
Certain Provisions of the CAT NMS Plan related to Social Security 
Numbers, Dates of Birth and Account Numbers (Jan. 29, 2020).
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    The Exchange also proposes to amend the Exchange's Compliance Rule 
to facilitate the retirement of certain existing regulatory systems, 
specifically the Financial Industry Regulatory Authority, Inc.'s 
(``FINRA'') Order Audit Trail System, by adding additional data 
elements to the CAT reporting requirements for Industry Members,\17\ 
additional reporting requirements for alternative trading systems,\18\ 
and additional data elements related to OTC Equity Securities \19\ that 
FINRA currently receives from alternative trading systems that trade 
OTC Equity Securities.\20\
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    \17\ See Notice, supra note 4, at 3965-67.
    \18\ See Notice, supra note 4, at 3964-65.
    \19\ OTC Equity Security, as defined in the CAT NMS Plan, means 
any equity security, other than an NMS Security, subject to prompt 
last sale reporting rules of a registered national securities 
association and reported to one of such association's equity trade 
reporting facilities. See CAT NMS Plan, supra note 3, at Section 
1.1.
    \20\ Id. at 3967.
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III. Proceedings To Determine Whether To Approve or Disapprove the 
Proposed Rule Change

    The Commission is instituting proceedings pursuant to Section 
19(b)(2)(B) of the Act \21\ to determine whether the proposed rule 
change should be approved or disapproved. Institution of proceedings 
does not indicate that the Commission has reached any conclusions with 
respect to any of the issues involved. Rather, the Commission seeks and 
encourages interested persons to provide additional comment on the 
proposed rule change to inform the Commission's analysis of whether to 
approve or disapprove the proposed rule change.
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    \21\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act,\22\ the Commission is 
providing notice of the grounds for possible disapproval under 
consideration. The Commission is instituting proceedings to allow for 
additional analysis of the proposed rule change's consistency with 
Section 6(b)(5) of the Act,\23\ which requires, among other things, 
that the rules of a national securities exchange be ``designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade,'' and ``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.'' \24\ The Commission believes that several of the proposed 
rule changes are not consistent with the CAT NMS Plan or exemptive 
relief that has been granted as of the date of this Order.
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    \22\ 15 U.S.C. 78s(b)(2)(B).
    \23\ 15 U.S.C. 78f(b)(5).
    \24\ 15 U.S.C. 78f(b)(5).
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IV. Commission's Solicitation of Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the proposal. In particular, the Commission invites the written 
views of interested persons concerning whether the proposal is 
consistent with Section 6(b)(5) \25\ or any other provision of the Act, 
or the rules and regulations thereunder. Although there do not appear 
to be any issues relevant to approval or disapproval that would be 
facilitated by an oral presentation of views, data, and arguments, the 
Commission will consider, pursuant to Rule 19b-4 under the Act,\26\ any 
request for an opportunity to make an oral presentation.\27\
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    \25\ 15 U.S.C. 78f(b)(5).
    \26\ 17 CFR 240.19b-4.
    \27\ Section 19(b)(2) of the Exchange Act, as amended by the 
Securities Act Amendments of 1975, Public Law 94-29 (June 4, 1975), 
grants the Commission flexibility to determine what type of 
proceeding--either oral or notice and opportunity for written 
comments--is appropriate for consideration of a particular proposal 
by a self-regulatory organization. See Securities Act Amendments of 
1975, Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 
75, 94th Cong., 1st Sess. 30 (1975).
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    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposal should be approved or 
disapproved by May 15, 2020. Any person who wishes to file a rebuttal 
to any other person's submission must file that rebuttal by May 29, 
2020. 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 Numbers SR-NYSE-2020-01 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-NYSE-2020-01. 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

[[Page 23085]]

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-NYSE-2020-01 and should be 
submitted on or before May 15, 2020 Rebuttal comments should be 
submitted by May 29, 2020.
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    \28\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-08701 Filed 4-23-20; 8:45 am]
 BILLING CODE 8011-01-P
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