Consolidated Tape Association; Order Approving the Thirty-Sixth Substantive Amendment to the Second Restatement of the CTA Plan and the Twenty-Seventh Substantive Amendment to the Restated CQ Plan, 29849-29852 [2021-11686]
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Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices
particular, Section 11A of the Act 51 and
Rule 608 52 thereunder in that the
Amendment, as modified by
Amendment Nos. 1 and 2, is necessary
or appropriate in the public interest, for
the protection of investors and the
maintenance of fair and orderly markets,
to remove impediments to, and perfect
the mechanisms of, a national market
system. Section 11A of the Act 53 sets
forth Congress’ finding that it is in the
public interest and appropriate for the
protection of investors and the
maintenance of fair and orderly markets
to ensure the prompt, accurate, reliable
and fair collection, processing,
distribution, and publication of
information with respect to quotations
for and transactions in such securities
and the fairness and usefulness of the
form and content of such information.
The Commission believes that the
Amendment, as modified by
Amendment Nos. 1 and 2, furthers these
goals set forth by Congress.
IV. Conclusion
It is therefore ordered, pursuant to
Section 11A of the Act,54 and Rule
608(b)(2) thereunder,55 that the Fiftieth
Amendment to the Nasdaq/UTP Plan, as
modified by Amendment Nos. 1 and 2,
(File No. S7–24–89) is approved.
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–11687 Filed 6–2–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92070; File No. SR–CTA/
CQ–2021–01]
Consolidated Tape Association; Order
Approving the Thirty-Sixth Substantive
Amendment to the Second
Restatement of the CTA Plan and the
Twenty-Seventh Substantive
Amendment to the Restated CQ Plan
May 28, 2021.
I. Introduction
On February 3, 2021,1 the
Consolidated Tape Association (‘‘CTA’’)
51 15
U.S.C. 78k–1.
CFR 242.608.
53 15 U.S.C. 78k–1(c)(1)(B).
54 15 U.S.C. 78k–1.
55 17 CFR 242.608(b)(2).
1 See Letter from Robert Books, Chair, CTA/CQ
Operating Committee, to Vanessa Countryman,
Secretary, Commission (Feb. 3, 2021). The
Amendments were posted to the Plans’ website on
February 12, 2021. See Email from James P.
Dombach, Counsel to the Plans, to Michael E. Coe,
Assistant Director, Commission (Feb. 12, 2021).
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52 17
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Plan participants 2 filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’), pursuant to
Section 11A of the Securities Exchange
Act of 1934 (‘‘Act’’) 3 and Rule 608 of
Regulation National Market System
(‘‘NMS’’) thereunder,4 a proposal to
amend the Second Restatement of the
CTA Plan and the Restated Consolidated
Quotation (‘‘CQ’’) Plan (collectively
‘‘CTA/CQ Plans’’ or ‘‘Plans’’).5 These
amendments represent the Thirty-Sixth
Substantive Amendment to the Second
Restatement of the CTA Plan and the
Twenty-Seventh Substantive
Amendment to the Restated CQ Plan
(‘‘Amendments’’).
The Amendments were published for
comment in the Federal Register on
March 1, 2021.6 One comment letter
was received.7 This order approves the
Amendments to the Plans.
II. Description of the Proposal
The Amendments propose revisions
to the Plans’ provisions governing
Regulatory Halts 8 and Operational
2 These participants are: Cboe BYX Exchange,
Inc., Cboe BZX Exchange, Inc., Cboe EDGA
Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe
Exchange, Inc., Financial Industry Regulatory
Authority, Inc., The Investors’ Exchange LLC, LongTerm Stock Exchange, Inc., MEMX LLC, MIAX
PEARL, LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC,
Nasdaq PHLX, Inc., The Nasdaq Stock Market LLC,
New York Stock Exchange LLC, NYSE American
LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and
NYSE National, Inc. (each a ‘‘Participant,’’ and
collectively the ‘‘Participants’’).
3 15 U.S.C. 78k–1(a)(3).
4 17 CFR 242.608.
5 The CTA Plan, pursuant to which markets
collect and disseminate last-sale price information
for non-Nasdaq-listed securities, is a ‘‘transaction
reporting plan’’ under Rule 601 of Regulation NMS,
17 CFR 242.601, and a ‘‘national market system
plan’’ under Rule 608 of Regulation NMS, 17 CFR
242.608. The CQ Plan, pursuant to which markets
collect and disseminate bid/ask quotation
information for non-Nasdaq-listed securities, is a
‘‘national market system plan’’ under Rule 608
under the Act, 17 CFR 242.608. See Securities
Exchange Act Release Nos. 10787 (May 10, 1974),
39 FR at 17799 (May 20, 1974) (declaring the CTA
Plan effective); 15009 (July 28, 1978), 43 FR at
34851 (Aug. 7, 1978) (temporarily authorizing the
CQ Plan); and 16518 (Jan. 22, 1980), 45 FR at 6521
(Jan. 28, 1980) (permanently authorizing the CQ
Plan). The most recent restatement of both Plans
was in 1995.
6 See Securities Exchange Act Release No. 91189
(Feb. 23, 2021), 86 FR 12038 (Mar. 1, 2021)
(‘‘Notice’’).
7 Comments received in response to the Notice
are available at https://www.sec.gov/comments/srctacq-2021-01/srctacq202101.htm.
8 The Amendments would define ‘‘Regulatory
Halt’’ as ‘‘a halt declared by the Primary Listing
Market in trading in one or more securities on all
Trading Centers for regulatory purposes, including
for the dissemination of material news, news
pending, suspensions, or where otherwise
necessary to maintain a fair and orderly market. A
Regulatory Halt includes a trading pause triggered
by Limit Up Limit Down, a halt based on
Extraordinary Market Activity, a trading halt
triggered by a Market-Wide Circuit Breaker, and a
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29849
Halts.9 The Participants state that ‘‘[t]he
purpose of the amendments is to
incorporate into the Plans the same
processes for Regulatory Halts that are
proposed by the equity exchanges.’’ 10
A. Regulatory Halts
1. Declaration of a Regulatory Halt
With respect to declaration of a
Regulatory Halt, the Amendments
would provide that the Primary Listing
Market 11 may declare a Regulatory Halt
in trading for any security for which it
is the Primary Listing Market (1) as
provided for in the rules of the Primary
Listing Market; 12 (2) if it determines 13
there is a SIP Outage,14 Material SIP
Latency,15 or Extraordinary Market
Activity; 16 or (3) in the event of
SIP Halt.’’ See Section XI(a)(i)(J) of the CTA Plan,
as amended.
9 The Amendments would define ‘‘Operational
Halt’’ as ‘‘a halt in trading in one or more securities
only on a Market declared by such Participant and
is not a Regulatory Halt.’’ See Section XI(a)(i)(G) of
the CTA Plan, as amended.
10 See Notice, supra note 6, 86 FR at 12039.
11 The Amendments would define ‘‘Primary
Listing Market’’ as ‘‘the national securities exchange
on which an Eligible Security is listed. If an Eligible
Security is listed on more than one national
securities exchange, Primary Listing Market means
the exchange on which the security has been listed
the longest.’’ See Section XI(a)(i)(H) of the CTA
Plan, as amended.
12 See Section XI(a)(iii)(A)(1) of the CTA Plan, as
amended.
13 See Section XI(a)(iii)(A)(2) of the CTA Plan, as
amended.
14 The Amendments would define ‘‘SIP Outage’’
as ‘‘a situation in which the Processor has ceased,
or anticipates being unable, to provide updated
and/or accurate quotation or last sale price
information in one or more securities for a material
period that exceeds the time thresholds for an
orderly failover to backup facilities established by
mutual agreement among the Processor, the Primary
Listing Market for the affected securities, and the
Operating Committee unless the Primary Listing
Market, in consultation with the Processor and the
Operating Committee, determines that resumption
of accurate data is expected in the near future.’’ See
Section XI(a)(i)(M) of the CTA Plan, as amended.
15 The Amendments would define ‘‘Material SIP
Latency’’ as ‘‘a delay of quotation or last sale price
information in one or more securities between the
time data is received by the Processor and the time
the Processor disseminates the data over the high
speed line or over the ‘‘high speed line’’ under the
CQ Plan, which delay the Primary Listing Market
determines, in consultation with, and in accordance
with, publicly disclosed guidelines established by
the Operating Committee, to be (a) material and (b)
unlikely to be resolved in the near future.’’ See
Section XI(a)(i)(E) of the CTA Plan, as amended.
16 The Amendments would define ‘‘Extraordinary
Market Activity’’ as ‘‘a disruption or malfunction of
any electronic quotation, communication, reporting,
or execution system operated by, or linked to, the
Processor or a Trading Center or a member of such
Trading Center that has a severe and continuing
negative impact, on a market-wide basis, on
quoting, order, or trading activity or on the
availability of market information necessary to
maintain a fair and orderly market. For purposes of
this definition, a severe and continuing negative
impact on quoting, order, or trading activity
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Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices
national, regional, or localized
disruption that necessitates a Regulatory
Halt to maintain a fair and orderly
market.17
The Amendments would further
provide that, in determining whether to
declare a Regulatory Halt, the Primary
Listing Market will consider the totality
of information available concerning the
severity of the issue, its likely duration,
and potential impact on Member Firms
and other market participants, and will
make a good-faith determination that
the criteria to declare a Regulatory Halt
have been satisfied and that a
Regulatory Halt is appropriate.18 The
Amendments would also provide that,
the Primary Listing Market will consult,
if feasible, with the affected Trading
Center(s), other Participants, or the
Processor, as applicable, regarding the
scope of the issue and what steps are
being taken to address the issue, and
that the Primary Listing Market will
continue to evaluate the circumstances
to determine when trading may resume
in accordance with the rules of the
Primary Listing Market.19
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2. Initiating a Regulatory Halt
The Amendments would specify
procedures for initiating a Regulatory
Halt. Specifically, when initiating a
Regulatory Halt, the start time of a
Regulatory Halt would be when the
Primary Listing Market declares the
halt, regardless of whether an issue with
communications impacts the
dissemination of the notice.20 The
Amendments would further provide
that if the Processor is unable to
disseminate notice of a Regulatory Halt
or the Primary Listing Market is not
open for trading, the Primary Listing
Market will take reasonable steps to
provide notice of a Regulatory Halt,
which shall include both the type and
start time of the Regulatory Halt, by
dissemination through: (1) Proprietary
data feeds containing quotation and last
includes (i) a series of quotes, orders, or
transactions at prices substantially unrelated to the
current market for the security or securities; (ii)
duplicative or erroneous quoting, order, trade
reporting, or other related message traffic between
one or more Trading Centers or their members; or
(iii) the unavailability of quoting, order, transaction
information, or regulatory messages for a sustained
period.’’ See Section XI(a)(i)(A) of the CTA Plan, as
amended.
17 See Section XI(a)(iii)(A)(3) of the CTA Plan, as
amended.
18 See Section XI(a)(iii)(B) of the CTA Plan, as
amended.
19 See id. The Amendments would further
provide that once a Regulatory Halt has been
declared, the Primary Listing Market will continue
to evaluate the circumstances to determine when
trading may resume in accordance with the rules of
the Primary Listing Market. See id.
20 See Section XI(a)(iv)(A) of the CTA Plan, as
amended.
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sale price information that the Primary
Listing Market also sends to the
Processor; (2) posting on a publiclyavailable Participant website; or (3)
system status messages.21 The
Amendments would further specify that
a Participant will halt trading for any
security traded on its Market if the
Primary Listing Market declares a
Regulatory Halt for the security.22
3. Resumption of Trading After a
Regulatory Halt
The Amendments would specify
certain procedures for the resumption of
trading following (1) Regulatory Halts
other than a SIP Halts and (2) SIP
Halts.23
a. Resumption of Trading After a
Regulatory Halt Other Than a SIP Halt
With respect to the resumption of
trading after a Regulatory Halt other
than a SIP Halt, the Amendments would
provide that the Primary Listing Market
will declare a resumption of trading
when it makes a good-faith
determination that trading may resume
in a fair and orderly manner and in
accordance with its rules.24 The
Amendments would further provide
that for a Regulatory Halt that is
initiated by another Participant that is a
Primary Listing Market, a Participant
may resume trading after the Participant
receives notification from the Primary
Listing Market that the Regulatory Halt
has been terminated.25
b. Resumption of Trading After a SIP
Halt
With respect to the resumption of
trading after a SIP Halt, the
Amendments would provide that the
Primary Listing Market will determine
the SIP Halt Resume Time.26 The
Amendments would further provide
that, in making such determination, the
21 See Section XI(a)(iv)(B) of the CTA Plan, as
amended. The Amendments would further provide
that, except in exigent circumstances, the Primary
Listing Market will not declare a Regulatory Halt
retroactive to a time earlier than the notice of such
halt. See Section XI(a)(iv)(C) of the CTA Plan, as
amended.
22 See Section XI(a)(vii) of the CTA Plan, as
amended.
23 The Amendments would define ‘‘SIP Halt’’ as
‘‘a Regulatory Halt to trading in one or more
securities that a Primary Listing Market declares in
the event of a SIP Outage or Material SIP Latency.’’
See Section XI(a)(i)(K) of the CTA Plan, as
amended.
24 See Section XI(a)(v)(A) of the CTA Plan, as
amended.
25 See Section XI(a)(v)(B) of the CTA Plan, as
amended.
26 See Section XI(a)(vi)(A) of the CTA Plan, as
amended. The Amendments would define ‘‘SIP Halt
Resume Time’’ as ‘‘the time that the Primary Listing
Market determines as the end of a SIP Halt.’’ See
Section XI(a)(i)(L) of the CTA Plan, as amended.
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Primary Listing Market will make a
good-faith determination and consider
the totality of information to determine
whether resuming trading would
promote a fair and orderly market,
including input from the Processor, the
Operating Committee, or the operator of
the system in question (as well as any
Trading Center(s) to which such system
is linked), regarding operational
readiness to resume trading.27 The
Amendments would also provide that
the Primary Listing Market retains
discretion to delay the SIP Halt Resume
Time if it believes trading will not
resume in a fair and orderly manner.28
Also, with respect to termination of the
SIP Halt, the Amendments would
provide that the Primary Listing Market
will terminate a SIP Halt with a
notification that specifies a SIP Halt
Resume Time.29 The Amendments
would further provide that the Primary
Listing Market shall provide a minimum
notice of a SIP Halt Resume Time, as
specified by the rules of the Primary
Listing Market, during which period
market participants may enter quotes
and orders in the affected securities.30
Under the Amendments, the Primary
Listing Market would be permitted to
stagger the SIP Halt Resume Times for
multiple symbols in order to reopen in
a fair and orderly manner.31
Finally, the Amendments would
provide that during Regular Trading
Hours, if the Primary Listing Market
does not open a security within the
amount of time as specified by the rules
of the Primary Listing Market after the
SIP Halt Resume Time, a Participant
may resume trading in that security.32
Under the Amendments, a Participant
may, outside Regular Trading Hours,
resume trading immediately after the
SIP Halt Resume Time.33
B. Communications
The Amendments address
communications regarding trading halts.
Specifically, the Amendments would
provide that, whenever in the exercise
of its regulatory functions the Primary
Listing Market for an Eligible Security
determines it is appropriate to initiate a
Regulatory Halt, the Primary Listing
27 See
id.
id.
29 See Section XI(a)(vi)(B) of the CTA Plan, as
amended.
30 See id. The Amendments would further
provide that, during regular Trading Hours, the last
SIP Halt Resume Time before the end of Regular
Trading Hours shall be an amount of time as
specified by the rules of the Primary Listing Market.
See id.
31 See id.
32 See Section XI(a)(vi)(C) of the CTA Plan, as
amended.
33 See id.
28 See
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Market will notify all other Participants
and the Processor of such Regulatory
Halt and will provide notice that a
Regulatory Halt has been lifted using
such protocols and other emergency
procedures as may be mutually agreed
to between the Operating Committee
and the Primary Listing Market.34 The
Amendments would further provide
that the Processor shall disseminate to
Participants notice of the Regulatory
Halt (as well as notice of the lifting of
a Regulatory Halt) through the high
speed line or through the ‘‘high speed
line’’ under the CQ Plan, and (ii) any
other means the Processor, in its sole
discretion, considers appropriate. Under
the Amendments, each Participant
would be required to continuously
monitor these communication protocols
established by the Operating Committee
and the Processor during market
hours.35
C. Operational Halts
With respect to Operational Halts,36
the Amendments would provide that a
Participant must notify the Processor if
it has concerns about its ability to
collect and transmit quotes, orders or
last sale prices, or where it has declared
an Operational Halt or suspension of
trading in one or more Eligible
Securities, pursuant to the procedures
adopted by the Operating Committee.37
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III. Discussion and Commission
Findings
After careful review, the Commission
is approving the Amendments, for the
reasons discussed below. Section 11A of
the Act authorizes the Commission, by
rule or order, to authorize or require the
self-regulatory organizations to act
jointly with respect to matters as to
which they share authority under the
Act in planning, developing, operating,
or regulating a facility of the national
market system.38 Pursuant to this
authority, the Commission adopted
Regulation NMS.39 Rule 603 of
Regulation NMS requires the SROs to
act jointly pursuant to NMS plans to
‘‘disseminate consolidated information,
34 See Section XI(a)(viii) of the CTA Plan, as
amended.
35 See id. The Amendments would further
provide that the failure of a Participant to
continuously monitor such communication
protocols as established by the Operating
Committee and the Processor during market hours
will not prevent the Primary Listing Market from
initiating a Regulatory Halt in accordance with the
procedures specified in these Amendments. See id.
36 See supra note 9 and accompanying text.
37 See Section XI(a)(ii) of the CTA Plan, as
amended.
38 See 15 U.S.C. 78k–1(a)(3)(B).
39 17 CFR 242.600–612; see also Regulation NMS,
Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37495, 37560 (June 29, 2005).
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including a national best bid and
national best offer, on quotations for and
transactions in NMS stocks.’’ 40 And
Rule 608 of Regulation NMS authorizes
two or more SROs, acting jointly, to file
with the Commission a national market
system plan (‘‘NMS plan’’) or a
proposed amendment to an effective
NMS plan.41 Rule 608 further provides
that the Commission shall approve an
amendment to an NMS plan if it finds
that the amendment is necessary or
appropriate in the public interest, for
the protection of investors and the
maintenance of fair and orderly markets,
to remove impediments to, and perfect
the mechanisms of, a national market
system, or otherwise in furtherance of
the purposes of the Act.42
As stated above, the Commission
received one comment letter regarding
the proposed Amendments. The
commenter states that the Amendments
should be approved as filed.43
According to the commenter, the
purpose of the Amendments is to
incorporate into the Plans the same
processes for Regulatory and
Operational Halts that are proposed by
the equity exchanges, including that the
Primary Listing Market be vested with
the authority to determine when to
initiate and end a Regulatory Halt,
consistent with its rules.44 The
commenter states that the Primary
Listing Market would be enabled to
declare a Regulatory Halt as provided
for in the Primary Listing Market’s rules,
if it determines that there is a SIP
Outage, Material SIP Latency,
Extraordinary Market Activity, or in the
event of national, regional, or localized
disruption that necessitates a Regulatory
Halt to maintain a fair and orderly
market. The commenter states that the
Commission should thus approve the
Amendments because they are
consistent with the Act and Rule 608
thereunder.45
The Commission agrees that the
Amendments are consistent with the
Act and Rule 608 of Regulation NMS.46
The Commission believes that the
Amendments further the goals of
Section 11A of the Act and of Rules 603
and 608 of Regulation NMS by
establishing a clear and uniform
approach with respect to trading halts
40 17
CFR 242.603(b).
17 CFR 242.608.
42 See 17 CFR 242.608(b)(2).
43 See Letter from Elizabeth K. King, Chief
Regulatory Officer, ICE and General Counsel and
Corporate Secretary, NYSE Group, Inc., to Vanessa
Countryman, Secretary, Commission, at 2 (Mar. 18,
2021) (‘‘NYSE Letter’’).
44 See id.
45 See id.
46 See 17 CFR 242.608.
41 See
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29851
under various defined circumstances.
The Plans’ provisions currently lack
clarity with respect to whether a
Primary Listing Market may declare a
Regulatory Halt due to underlying
problems at the SIP, as well as the
standard and process for calling a halt
and resuming trading thereafter. The
Amendments—and in particular the
revisions that address Regulatory Halts
in connection with SIP Outages,
Material SIP Latency, Extraordinary
Market Activity, and national, regional,
or localized disruptions that necessitate
a Regulatory Halt to maintain a fair and
orderly market—address this
shortcoming by providing for uniform
rules governing how Participants will
address, among other things, the
initiation, implementation, and
communication of trading halts, as well
as the resumption of trading after a
trading halt or SIP Halt, thereby
clarifying the procedures to be followed
and the standards to be applied,
improving coordination and certainty
among the Participants and other market
participants, and enhancing the
resiliency and integrity of market
systems. Accordingly, the Commission
believes that the Amendments are in the
public interest, support the protection of
investors, and help the maintenance of
fair and orderly markets because the
Amendments are reasonably designed to
assist market participants in
understanding the processes to be
followed during circumstances
potentially warranting a regulatory halt,
such as events involving the loss,
timeliness, or accuracy of information
that is processed or disseminated by the
SIPs. Additionally, the Commission
believes that the Amendments are
reasonably designed to enhance the
resiliency of the national market system
by clearly memorializing the
coordinated actions to be taken by the
Participants during such events so that
trading may resume in a fair and orderly
manner.
The Commission further believes that
the proposed requirement for Primary
Listing Markets to make good-faith
determinations 47 in consultation with
other market participants, as may be
applicable concerning the
appropriateness of declaring a
regulatory halt and resuming trading
thereafter, should promote fairness and
orderliness in decision-making by the
Primary Listing Markets. In particular,
the good-faith determination standard
promotes fair and orderly markets and
the protection of investors because it
addresses potential concerns that
47 See, e.g., Sections XI(a)(iii)(B); XI(a)(v)(A); and
XI(a)(vi)(A) of the CTA Plan, as amended.
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Federal Register / Vol. 86, No. 105 / Thursday, June 3, 2021 / Notices
Primary Listing Markets may be subject
to commercial pressures in making
decisions to call a Regulatory Halt and
resuming trading thereafter.
Accordingly, the Commission believes
that the good-faith-determination
standard encourages Primary Listing
Markets to consider the broader
interests of the national market system
with respect to declaring trading halts
and resuming trading thereafter, thereby
promoting the maintenance of fair and
orderly markets and enhancing the
protection of investors.48
For the reasons discussed, the
Commission finds that the Amendments
to the Plans, are consistent with the
requirements of the Act and the rules
and regulations thereunder, and in
particular, Section 11A of the Act 49 and
Rule 608 50 thereunder in that the
Amendments are necessary or
appropriate in the public interest, for
the protection of investors and the
maintenance of fair and orderly markets,
to remove impediments to, and perfect
the mechanisms of, a national market
system. Section 11A of the Act 51 sets
forth Congress’ finding that it is in the
public interest and appropriate for the
protection of investors and the
maintenance of fair and orderly markets
to ensure the prompt, accurate, reliable
and fair collection, processing,
distribution, and publication of
information with respect to quotations
for and transactions in such securities
and the fairness and usefulness of the
form and content of such information.
The Commission believes that the
Amendments further these goals set
forth by Congress.
IV. Conclusion
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It is therefore ordered, pursuant to
Section 11A of the Act,52 and Rule
608(b)(2) thereunder,53 that the
Amendments to the CTA and CQ Plans
(File No. SR–CTA/CQ–2021–01) are
approved.
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021–11686 Filed 6–2–21; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–92051; File No. SR–C2–
2021–009]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Align the Exchange’s
Rulebook With the Rulebook of Its
Affiliated Exchange, Cboe Options, Inc.
(‘‘Cboe Options’’) and Make Other
Formatting Changes
May 27, 2021.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 19,
2021, Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III 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
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) proposes to align
the Exchange’s rulebook with the
rulebook of its affiliated Exchange, Cboe
Options, Inc. (‘‘Cboe Options’’) and
make other formatting changes. The text
of the proposed rule change is provided
in Exhibit 5.
The text of the proposed rule change
is also available on the Exchange’s
website (https://markets.cboe.com/us/
options/regulation/rule_filings/ctwo/),
at the Exchange’s Office of the
Secretary, 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
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 Exchange proposes to align the
numbers of its rules in the Exchange’s
Rulebook with the numbers of the same
(or substantially similar) rules within
the rulebook of its affiliated exchange,
Cboe Options.3 The Exchange believes
aligning the numbers of its rules with
those of the same (or substantially
similar) rules of Cboe Options to the
extent practicable 4 will reduce potential
confusion for market participants. The
below table sets forth the rules in the
Exchange’s Rulebook, their current rule
numbers, and the proposed rule
numbers. As noted in the table below,
the proposed rule change deletes certain
reserved rule numbers and adds certain
reserved rule numbers to maintain
number alignment with Cboe Options
rule numbers.
Rule name
Current rule No.
Definitions ................................................................................................
Exchange Determinations .......................................................................
Time .........................................................................................................
Trading Permit Holder Fees ....................................................................
Exchange’s Costs of Defending Legal Proceedings ...............................
Regulatory Revenues ..............................................................................
Reserved .................................................................................................
Trading Permits .......................................................................................
1.1 ..................................................
1.2 ..................................................
1.3 ..................................................
2.1 ..................................................
2.2 ..................................................
2.3 ..................................................
N/A .................................................
3.1 5 ................................................
48 This commenter also urges the Commission to
publish and provide notice of any material changes
that the Commission is considering with respect to
the Amendments. See NYSE Letter, supra note 43,
at 2. The Commission has determined to approve
the Amendments without modification.
49 15 U.S.C. 78k–1.
50 17 CFR 242.608.
VerDate Sep<11>2014
17:23 Jun 02, 2021
Jkt 253001
51 15
U.S.C. 78k–1(c)(1)(B).
U.S.C. 78k–1.
53 17 CFR 242.608(b)(2).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 In separate rule filings, the Exchange intends to
similarly align the rule numbers of the Exchange’s
52 15
PO 00000
Frm 00116
Fmt 4703
Sfmt 4703
Proposed new rule No.
No change.
1.5.
1.6.
No change.
2.5.
2.2.
2.4.
No change.
other affiliated options exchanges, Cboe BZX
Exchange, Inc. and Cboe EDGX Exchange, Inc. with
the rule numbers of Cboe Options and the
Exchange.
4 The Exchange notes that certain rules are
applicable to it and not Cboe Options, and vice
versa.
E:\FR\FM\03JNN1.SGM
03JNN1
]]>Agencies
[Federal Register Volume 86, Number 105 (Thursday, June 3, 2021)]
[Notices]
[Pages 29849-29852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11686]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-92070; File No. SR-CTA/CQ-2021-01]
Consolidated Tape Association; Order Approving the Thirty-Sixth
Substantive Amendment to the Second Restatement of the CTA Plan and the
Twenty-Seventh Substantive Amendment to the Restated CQ Plan
May 28, 2021.
I. Introduction
On February 3, 2021,\1\ the Consolidated Tape Association (``CTA'')
Plan participants \2\ filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 11A of the Securities
Exchange Act of 1934 (``Act'') \3\ and Rule 608 of Regulation National
Market System (``NMS'') thereunder,\4\ a proposal to amend the Second
Restatement of the CTA Plan and the Restated Consolidated Quotation
(``CQ'') Plan (collectively ``CTA/CQ Plans'' or ``Plans'').\5\ These
amendments represent the Thirty-Sixth Substantive Amendment to the
Second Restatement of the CTA Plan and the Twenty-Seventh Substantive
Amendment to the Restated CQ Plan (``Amendments'').
---------------------------------------------------------------------------
\1\ See Letter from Robert Books, Chair, CTA/CQ Operating
Committee, to Vanessa Countryman, Secretary, Commission (Feb. 3,
2021). The Amendments were posted to the Plans' website on February
12, 2021. See Email from James P. Dombach, Counsel to the Plans, to
Michael E. Coe, Assistant Director, Commission (Feb. 12, 2021).
\2\ These participants are: Cboe BYX Exchange, Inc., Cboe BZX
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc.,
The Investors' Exchange LLC, Long-Term Stock Exchange, Inc., MEMX
LLC, MIAX PEARL, LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq PHLX,
Inc., The Nasdaq Stock Market LLC, New York Stock Exchange LLC, NYSE
American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., and NYSE
National, Inc. (each a ``Participant,'' and collectively the
``Participants'').
\3\ 15 U.S.C. 78k-1(a)(3).
\4\ 17 CFR 242.608.
\5\ The CTA Plan, pursuant to which markets collect and
disseminate last-sale price information for non-Nasdaq-listed
securities, is a ``transaction reporting plan'' under Rule 601 of
Regulation NMS, 17 CFR 242.601, and a ``national market system
plan'' under Rule 608 of Regulation NMS, 17 CFR 242.608. The CQ
Plan, pursuant to which markets collect and disseminate bid/ask
quotation information for non-Nasdaq-listed securities, is a
``national market system plan'' under Rule 608 under the Act, 17 CFR
242.608. See Securities Exchange Act Release Nos. 10787 (May 10,
1974), 39 FR at 17799 (May 20, 1974) (declaring the CTA Plan
effective); 15009 (July 28, 1978), 43 FR at 34851 (Aug. 7, 1978)
(temporarily authorizing the CQ Plan); and 16518 (Jan. 22, 1980), 45
FR at 6521 (Jan. 28, 1980) (permanently authorizing the CQ Plan).
The most recent restatement of both Plans was in 1995.
---------------------------------------------------------------------------
The Amendments were published for comment in the Federal Register
on March 1, 2021.\6\ One comment letter was received.\7\ This order
approves the Amendments to the Plans.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 91189 (Feb. 23,
2021), 86 FR 12038 (Mar. 1, 2021) (``Notice'').
\7\ Comments received in response to the Notice are available at
https://www.sec.gov/comments/sr-ctacq-2021-01/srctacq202101.htm.
---------------------------------------------------------------------------
II. Description of the Proposal
The Amendments propose revisions to the Plans' provisions governing
Regulatory Halts \8\ and Operational Halts.\9\ The Participants state
that ``[t]he purpose of the amendments is to incorporate into the Plans
the same processes for Regulatory Halts that are proposed by the equity
exchanges.'' \10\
---------------------------------------------------------------------------
\8\ The Amendments would define ``Regulatory Halt'' as ``a halt
declared by the Primary Listing Market in trading in one or more
securities on all Trading Centers for regulatory purposes, including
for the dissemination of material news, news pending, suspensions,
or where otherwise necessary to maintain a fair and orderly market.
A Regulatory Halt includes a trading pause triggered by Limit Up
Limit Down, a halt based on Extraordinary Market Activity, a trading
halt triggered by a Market-Wide Circuit Breaker, and a SIP Halt.''
See Section XI(a)(i)(J) of the CTA Plan, as amended.
\9\ The Amendments would define ``Operational Halt'' as ``a halt
in trading in one or more securities only on a Market declared by
such Participant and is not a Regulatory Halt.'' See Section
XI(a)(i)(G) of the CTA Plan, as amended.
\10\ See Notice, supra note 6, 86 FR at 12039.
---------------------------------------------------------------------------
A. Regulatory Halts
1. Declaration of a Regulatory Halt
With respect to declaration of a Regulatory Halt, the Amendments
would provide that the Primary Listing Market \11\ may declare a
Regulatory Halt in trading for any security for which it is the Primary
Listing Market (1) as provided for in the rules of the Primary Listing
Market; \12\ (2) if it determines \13\ there is a SIP Outage,\14\
Material SIP Latency,\15\ or Extraordinary Market Activity; \16\ or (3)
in the event of
[[Page 29850]]
national, regional, or localized disruption that necessitates a
Regulatory Halt to maintain a fair and orderly market.\17\
---------------------------------------------------------------------------
\11\ The Amendments would define ``Primary Listing Market'' as
``the national securities exchange on which an Eligible Security is
listed. If an Eligible Security is listed on more than one national
securities exchange, Primary Listing Market means the exchange on
which the security has been listed the longest.'' See Section
XI(a)(i)(H) of the CTA Plan, as amended.
\12\ See Section XI(a)(iii)(A)(1) of the CTA Plan, as amended.
\13\ See Section XI(a)(iii)(A)(2) of the CTA Plan, as amended.
\14\ The Amendments would define ``SIP Outage'' as ``a situation
in which the Processor has ceased, or anticipates being unable, to
provide updated and/or accurate quotation or last sale price
information in one or more securities for a material period that
exceeds the time thresholds for an orderly failover to backup
facilities established by mutual agreement among the Processor, the
Primary Listing Market for the affected securities, and the
Operating Committee unless the Primary Listing Market, in
consultation with the Processor and the Operating Committee,
determines that resumption of accurate data is expected in the near
future.'' See Section XI(a)(i)(M) of the CTA Plan, as amended.
\15\ The Amendments would define ``Material SIP Latency'' as ``a
delay of quotation or last sale price information in one or more
securities between the time data is received by the Processor and
the time the Processor disseminates the data over the high speed
line or over the ``high speed line'' under the CQ Plan, which delay
the Primary Listing Market determines, in consultation with, and in
accordance with, publicly disclosed guidelines established by the
Operating Committee, to be (a) material and (b) unlikely to be
resolved in the near future.'' See Section XI(a)(i)(E) of the CTA
Plan, as amended.
\16\ The Amendments would define ``Extraordinary Market
Activity'' as ``a disruption or malfunction of any electronic
quotation, communication, reporting, or execution system operated
by, or linked to, the Processor or a Trading Center or a member of
such Trading Center that has a severe and continuing negative
impact, on a market-wide basis, on quoting, order, or trading
activity or on the availability of market information necessary to
maintain a fair and orderly market. For purposes of this definition,
a severe and continuing negative impact on quoting, order, or
trading activity includes (i) a series of quotes, orders, or
transactions at prices substantially unrelated to the current market
for the security or securities; (ii) duplicative or erroneous
quoting, order, trade reporting, or other related message traffic
between one or more Trading Centers or their members; or (iii) the
unavailability of quoting, order, transaction information, or
regulatory messages for a sustained period.'' See Section
XI(a)(i)(A) of the CTA Plan, as amended.
\17\ See Section XI(a)(iii)(A)(3) of the CTA Plan, as amended.
---------------------------------------------------------------------------
The Amendments would further provide that, in determining whether
to declare a Regulatory Halt, the Primary Listing Market will consider
the totality of information available concerning the severity of the
issue, its likely duration, and potential impact on Member Firms and
other market participants, and will make a good-faith determination
that the criteria to declare a Regulatory Halt have been satisfied and
that a Regulatory Halt is appropriate.\18\ The Amendments would also
provide that, the Primary Listing Market will consult, if feasible,
with the affected Trading Center(s), other Participants, or the
Processor, as applicable, regarding the scope of the issue and what
steps are being taken to address the issue, and that the Primary
Listing Market will continue to evaluate the circumstances to determine
when trading may resume in accordance with the rules of the Primary
Listing Market.\19\
---------------------------------------------------------------------------
\18\ See Section XI(a)(iii)(B) of the CTA Plan, as amended.
\19\ See id. The Amendments would further provide that once a
Regulatory Halt has been declared, the Primary Listing Market will
continue to evaluate the circumstances to determine when trading may
resume in accordance with the rules of the Primary Listing Market.
See id.
---------------------------------------------------------------------------
2. Initiating a Regulatory Halt
The Amendments would specify procedures for initiating a Regulatory
Halt. Specifically, when initiating a Regulatory Halt, the start time
of a Regulatory Halt would be when the Primary Listing Market declares
the halt, regardless of whether an issue with communications impacts
the dissemination of the notice.\20\ The Amendments would further
provide that if the Processor is unable to disseminate notice of a
Regulatory Halt or the Primary Listing Market is not open for trading,
the Primary Listing Market will take reasonable steps to provide notice
of a Regulatory Halt, which shall include both the type and start time
of the Regulatory Halt, by dissemination through: (1) Proprietary data
feeds containing quotation and last sale price information that the
Primary Listing Market also sends to the Processor; (2) posting on a
publicly-available Participant website; or (3) system status
messages.\21\ The Amendments would further specify that a Participant
will halt trading for any security traded on its Market if the Primary
Listing Market declares a Regulatory Halt for the security.\22\
---------------------------------------------------------------------------
\20\ See Section XI(a)(iv)(A) of the CTA Plan, as amended.
\21\ See Section XI(a)(iv)(B) of the CTA Plan, as amended. The
Amendments would further provide that, except in exigent
circumstances, the Primary Listing Market will not declare a
Regulatory Halt retroactive to a time earlier than the notice of
such halt. See Section XI(a)(iv)(C) of the CTA Plan, as amended.
\22\ See Section XI(a)(vii) of the CTA Plan, as amended.
---------------------------------------------------------------------------
3. Resumption of Trading After a Regulatory Halt
The Amendments would specify certain procedures for the resumption
of trading following (1) Regulatory Halts other than a SIP Halts and
(2) SIP Halts.\23\
---------------------------------------------------------------------------
\23\ The Amendments would define ``SIP Halt'' as ``a Regulatory
Halt to trading in one or more securities that a Primary Listing
Market declares in the event of a SIP Outage or Material SIP
Latency.'' See Section XI(a)(i)(K) of the CTA Plan, as amended.
---------------------------------------------------------------------------
a. Resumption of Trading After a Regulatory Halt Other Than a SIP Halt
With respect to the resumption of trading after a Regulatory Halt
other than a SIP Halt, the Amendments would provide that the Primary
Listing Market will declare a resumption of trading when it makes a
good-faith determination that trading may resume in a fair and orderly
manner and in accordance with its rules.\24\ The Amendments would
further provide that for a Regulatory Halt that is initiated by another
Participant that is a Primary Listing Market, a Participant may resume
trading after the Participant receives notification from the Primary
Listing Market that the Regulatory Halt has been terminated.\25\
---------------------------------------------------------------------------
\24\ See Section XI(a)(v)(A) of the CTA Plan, as amended.
\25\ See Section XI(a)(v)(B) of the CTA Plan, as amended.
---------------------------------------------------------------------------
b. Resumption of Trading After a SIP Halt
With respect to the resumption of trading after a SIP Halt, the
Amendments would provide that the Primary Listing Market will determine
the SIP Halt Resume Time.\26\ The Amendments would further provide
that, in making such determination, the Primary Listing Market will
make a good-faith determination and consider the totality of
information to determine whether resuming trading would promote a fair
and orderly market, including input from the Processor, the Operating
Committee, or the operator of the system in question (as well as any
Trading Center(s) to which such system is linked), regarding
operational readiness to resume trading.\27\ The Amendments would also
provide that the Primary Listing Market retains discretion to delay the
SIP Halt Resume Time if it believes trading will not resume in a fair
and orderly manner.\28\ Also, with respect to termination of the SIP
Halt, the Amendments would provide that the Primary Listing Market will
terminate a SIP Halt with a notification that specifies a SIP Halt
Resume Time.\29\ The Amendments would further provide that the Primary
Listing Market shall provide a minimum notice of a SIP Halt Resume
Time, as specified by the rules of the Primary Listing Market, during
which period market participants may enter quotes and orders in the
affected securities.\30\ Under the Amendments, the Primary Listing
Market would be permitted to stagger the SIP Halt Resume Times for
multiple symbols in order to reopen in a fair and orderly manner.\31\
---------------------------------------------------------------------------
\26\ See Section XI(a)(vi)(A) of the CTA Plan, as amended. The
Amendments would define ``SIP Halt Resume Time'' as ``the time that
the Primary Listing Market determines as the end of a SIP Halt.''
See Section XI(a)(i)(L) of the CTA Plan, as amended.
\27\ See id.
\28\ See id.
\29\ See Section XI(a)(vi)(B) of the CTA Plan, as amended.
\30\ See id. The Amendments would further provide that, during
regular Trading Hours, the last SIP Halt Resume Time before the end
of Regular Trading Hours shall be an amount of time as specified by
the rules of the Primary Listing Market. See id.
\31\ See id.
---------------------------------------------------------------------------
Finally, the Amendments would provide that during Regular Trading
Hours, if the Primary Listing Market does not open a security within
the amount of time as specified by the rules of the Primary Listing
Market after the SIP Halt Resume Time, a Participant may resume trading
in that security.\32\ Under the Amendments, a Participant may, outside
Regular Trading Hours, resume trading immediately after the SIP Halt
Resume Time.\33\
---------------------------------------------------------------------------
\32\ See Section XI(a)(vi)(C) of the CTA Plan, as amended.
\33\ See id.
---------------------------------------------------------------------------
B. Communications
The Amendments address communications regarding trading halts.
Specifically, the Amendments would provide that, whenever in the
exercise of its regulatory functions the Primary Listing Market for an
Eligible Security determines it is appropriate to initiate a Regulatory
Halt, the Primary Listing
[[Page 29851]]
Market will notify all other Participants and the Processor of such
Regulatory Halt and will provide notice that a Regulatory Halt has been
lifted using such protocols and other emergency procedures as may be
mutually agreed to between the Operating Committee and the Primary
Listing Market.\34\ The Amendments would further provide that the
Processor shall disseminate to Participants notice of the Regulatory
Halt (as well as notice of the lifting of a Regulatory Halt) through
the high speed line or through the ``high speed line'' under the CQ
Plan, and (ii) any other means the Processor, in its sole discretion,
considers appropriate. Under the Amendments, each Participant would be
required to continuously monitor these communication protocols
established by the Operating Committee and the Processor during market
hours.\35\
---------------------------------------------------------------------------
\34\ See Section XI(a)(viii) of the CTA Plan, as amended.
\35\ See id. The Amendments would further provide that the
failure of a Participant to continuously monitor such communication
protocols as established by the Operating Committee and the
Processor during market hours will not prevent the Primary Listing
Market from initiating a Regulatory Halt in accordance with the
procedures specified in these Amendments. See id.
---------------------------------------------------------------------------
C. Operational Halts
With respect to Operational Halts,\36\ the Amendments would provide
that a Participant must notify the Processor if it has concerns about
its ability to collect and transmit quotes, orders or last sale prices,
or where it has declared an Operational Halt or suspension of trading
in one or more Eligible Securities, pursuant to the procedures adopted
by the Operating Committee.\37\
---------------------------------------------------------------------------
\36\ See supra note 9 and accompanying text.
\37\ See Section XI(a)(ii) of the CTA Plan, as amended.
---------------------------------------------------------------------------
III. Discussion and Commission Findings
After careful review, the Commission is approving the Amendments,
for the reasons discussed below. Section 11A of the Act authorizes the
Commission, by rule or order, to authorize or require the self-
regulatory organizations to act jointly with respect to matters as to
which they share authority under the Act in planning, developing,
operating, or regulating a facility of the national market system.\38\
Pursuant to this authority, the Commission adopted Regulation NMS.\39\
Rule 603 of Regulation NMS requires the SROs to act jointly pursuant to
NMS plans to ``disseminate consolidated information, including a
national best bid and national best offer, on quotations for and
transactions in NMS stocks.'' \40\ And Rule 608 of Regulation NMS
authorizes two or more SROs, acting jointly, to file with the
Commission a national market system plan (``NMS plan'') or a proposed
amendment to an effective NMS plan.\41\ Rule 608 further provides that
the Commission shall approve an amendment to an NMS plan if it finds
that the amendment is necessary or appropriate in the public interest,
for the protection of investors and the maintenance of fair and orderly
markets, to remove impediments to, and perfect the mechanisms of, a
national market system, or otherwise in furtherance of the purposes of
the Act.\42\
---------------------------------------------------------------------------
\38\ See 15 U.S.C. 78k-1(a)(3)(B).
\39\ 17 CFR 242.600-612; see also Regulation NMS, Securities
Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37495, 37560
(June 29, 2005).
\40\ 17 CFR 242.603(b).
\41\ See 17 CFR 242.608.
\42\ See 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------
As stated above, the Commission received one comment letter
regarding the proposed Amendments. The commenter states that the
Amendments should be approved as filed.\43\ According to the commenter,
the purpose of the Amendments is to incorporate into the Plans the same
processes for Regulatory and Operational Halts that are proposed by the
equity exchanges, including that the Primary Listing Market be vested
with the authority to determine when to initiate and end a Regulatory
Halt, consistent with its rules.\44\ The commenter states that the
Primary Listing Market would be enabled to declare a Regulatory Halt as
provided for in the Primary Listing Market's rules, if it determines
that there is a SIP Outage, Material SIP Latency, Extraordinary Market
Activity, or in the event of national, regional, or localized
disruption that necessitates a Regulatory Halt to maintain a fair and
orderly market. The commenter states that the Commission should thus
approve the Amendments because they are consistent with the Act and
Rule 608 thereunder.\45\
---------------------------------------------------------------------------
\43\ See Letter from Elizabeth K. King, Chief Regulatory
Officer, ICE and General Counsel and Corporate Secretary, NYSE
Group, Inc., to Vanessa Countryman, Secretary, Commission, at 2
(Mar. 18, 2021) (``NYSE Letter'').
\44\ See id.
\45\ See id.
---------------------------------------------------------------------------
The Commission agrees that the Amendments are consistent with the
Act and Rule 608 of Regulation NMS.\46\ The Commission believes that
the Amendments further the goals of Section 11A of the Act and of Rules
603 and 608 of Regulation NMS by establishing a clear and uniform
approach with respect to trading halts under various defined
circumstances. The Plans' provisions currently lack clarity with
respect to whether a Primary Listing Market may declare a Regulatory
Halt due to underlying problems at the SIP, as well as the standard and
process for calling a halt and resuming trading thereafter. The
Amendments--and in particular the revisions that address Regulatory
Halts in connection with SIP Outages, Material SIP Latency,
Extraordinary Market Activity, and national, regional, or localized
disruptions that necessitate a Regulatory Halt to maintain a fair and
orderly market--address this shortcoming by providing for uniform rules
governing how Participants will address, among other things, the
initiation, implementation, and communication of trading halts, as well
as the resumption of trading after a trading halt or SIP Halt, thereby
clarifying the procedures to be followed and the standards to be
applied, improving coordination and certainty among the Participants
and other market participants, and enhancing the resiliency and
integrity of market systems. Accordingly, the Commission believes that
the Amendments are in the public interest, support the protection of
investors, and help the maintenance of fair and orderly markets because
the Amendments are reasonably designed to assist market participants in
understanding the processes to be followed during circumstances
potentially warranting a regulatory halt, such as events involving the
loss, timeliness, or accuracy of information that is processed or
disseminated by the SIPs. Additionally, the Commission believes that
the Amendments are reasonably designed to enhance the resiliency of the
national market system by clearly memorializing the coordinated actions
to be taken by the Participants during such events so that trading may
resume in a fair and orderly manner.
---------------------------------------------------------------------------
\46\ See 17 CFR 242.608.
---------------------------------------------------------------------------
The Commission further believes that the proposed requirement for
Primary Listing Markets to make good-faith determinations \47\ in
consultation with other market participants, as may be applicable
concerning the appropriateness of declaring a regulatory halt and
resuming trading thereafter, should promote fairness and orderliness in
decision-making by the Primary Listing Markets. In particular, the
good-faith determination standard promotes fair and orderly markets and
the protection of investors because it addresses potential concerns
that
[[Page 29852]]
Primary Listing Markets may be subject to commercial pressures in
making decisions to call a Regulatory Halt and resuming trading
thereafter. Accordingly, the Commission believes that the good-faith-
determination standard encourages Primary Listing Markets to consider
the broader interests of the national market system with respect to
declaring trading halts and resuming trading thereafter, thereby
promoting the maintenance of fair and orderly markets and enhancing the
protection of investors.\48\
---------------------------------------------------------------------------
\47\ See, e.g., Sections XI(a)(iii)(B); XI(a)(v)(A); and
XI(a)(vi)(A) of the CTA Plan, as amended.
\48\ This commenter also urges the Commission to publish and
provide notice of any material changes that the Commission is
considering with respect to the Amendments. See NYSE Letter, supra
note 43, at 2. The Commission has determined to approve the
Amendments without modification.
---------------------------------------------------------------------------
For the reasons discussed, the Commission finds that the Amendments
to the Plans, are consistent with the requirements of the Act and the
rules and regulations thereunder, and in particular, Section 11A of the
Act \49\ and Rule 608 \50\ thereunder in that the Amendments are
necessary or appropriate in the public interest, for the protection of
investors and the maintenance of fair and orderly markets, to remove
impediments to, and perfect the mechanisms of, a national market
system. Section 11A of the Act \51\ sets forth Congress' finding that
it is in the public interest and appropriate for the protection of
investors and the maintenance of fair and orderly markets to ensure the
prompt, accurate, reliable and fair collection, processing,
distribution, and publication of information with respect to quotations
for and transactions in such securities and the fairness and usefulness
of the form and content of such information. The Commission believes
that the Amendments further these goals set forth by Congress.
---------------------------------------------------------------------------
\49\ 15 U.S.C. 78k-1.
\50\ 17 CFR 242.608.
\51\ 15 U.S.C. 78k-1(c)(1)(B).
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 11A of the Act,\52\
and Rule 608(b)(2) thereunder,\53\ that the Amendments to the CTA and
CQ Plans (File No. SR-CTA/CQ-2021-01) are approved.
---------------------------------------------------------------------------
\52\ 15 U.S.C. 78k-1.
\53\ 17 CFR 242.608(b)(2).
By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11686 Filed 6-2-21; 8:45 am]
BILLING CODE 8011-01-P
