Securities Exchange Act of 1934, 52933-52937 [2021-20554]

Download as PDF Federal Register / Vol. 86, No. 182 / Thursday, September 23, 2021 / Notices The NRC welcomes comments from the public on these and any areas that they believe are relevant to these topics. The NRC encourages all interested parties to comment on the Full Draft Strategic Plan. Stakeholder feedback will be valuable in helping the Commission develop a final draft Strategic Plan that has the benefit of the many views of the public and the regulated civilian nuclear industry. The NRC will consider the comments submitted, as appropriate, in the preparation of the final draft FYs 2022– 2026 Strategic Plan. The NRC does not anticipate preparing individual responses to each comment received. Dated: September 17, 2021. For the Nuclear Regulatory Commission. Wesley W. Held, (Acting), Secretary of the Commission. [FR Doc. 2021–20542 Filed 9–22–21; 8:45 am] BILLING CODE 7590–01–P NUCLEAR REGULATORY COMMISSION [NRC–2020–0278] Measuring, Evaluating, and Reporting Radioactive Material in Liquid and Gaseous Effluents and Solid Waste Nuclear Regulatory Commission. ACTION: Regulatory guide; issuance. AGENCY: The U.S. Nuclear Regulatory Commission (NRC) is issuing revision 3 of Regulatory Guide (RG) 1.21, ‘‘Measuring, Evaluating, and Reporting Radioactive Material in Liquid and Gaseous Effluents and Solid Waste.’’ The revision of RG describes an approach that is acceptable to the staff of the NRC to meet regulatory requirements for; (1) measuring, evaluating, and reporting plant related radioactivity in effluents and solid radioactive waste shipments from NRC licensed facilities, and (2) assessing and reporting the public dose to demonstrate compliance with NRC regulations. DATES: Revision 3 of RG 1.21 is available on September 23, 2021. ADDRESSES: Please refer to Docket ID NRC–2020–0278 when contacting the NRC about the availability of information regarding this document. You may obtain publicly available information related to this document using any of the following methods: • Federal Rulemaking Website: Go to https://www.regulations.gov and search for Docket ID NRC–2020–0278. Address questions about Docket IDs in Regulations.gov to Stacy Schumann; telephone: 301–415–0624; email: Stacy. lotter on DSK11XQN23PROD with NOTICES1 SUMMARY: VerDate Sep<11>2014 17:19 Sep 22, 2021 Jkt 253001 Schumann@nrc.gov. For technical questions, contact the individual(s) listed in the FOR FURTHER INFORMATION CONTACT section of this document. • NRC’s Agencywide Documents Access and Management System (ADAMS): You may obtain publicly available documents online in the ADAMS Public Documents collection at https://www.nrc.gov/reading-rm/ adams.html. To begin the search, select ‘‘Begin Web-based ADAMS Search.’’ For problems with ADAMS, please contact the NRC’s Public Document Room (PDR) reference staff at 1–800–397–4209, 301– 415–4737, or by email to pdr.resource@ nrc.gov. The ADAMS accession number for each document referenced (if it is available in ADAMS) is provided the first time that it is mentioned in this document. • Attention: The PDR, where you may examine and order copies of public documents is currently closed. You may submit your request to the PDR via email at pdr.resource@nrc.gov or call 1– 800–397–4209 or 301–415–4737 between 8:00 a.m. and 4:00 p.m. (ET), Monday through Friday, except Federal holidays. Revision 3 of RG 1.21 and the regulatory analysis may be found in ADAMS under Accession Nos. ML21139A224 and ML20287A434, respectively. Regulatory guides are not copyrighted, and NRC approval is not required to reproduce them. FOR FURTHER INFORMATION CONTACT: Steven Garry, Office of Nuclear Reactor Regulation, telephone: 301–415–2766, email: Steven.Garry@nrc.gov, and Kyle Song, Office of Nuclear Regulatory Research, telephone: 301–415–3637, email: Kyle.Song@nrc.gov. Both are staff of the U.S. Nuclear Regulatory Commission, Washington, DC 20555– 0001. 52933 published a notice of the availability of DG–1377 in the Federal Register on January 5, 2021, (86 FR 326) for a 45day public comment period. The public comment period closed on February 19, 2021. Public comments on DG–1377 and the staff responses to the public comments are available under ADAMS under Accession No. ML21132A226. III. Congressional Review Act This RG is a rule as defined in the Congressional Review Act (5 U.S.C. 801–808). However, the Office of Management and Budget has not found it to be a major rule as defined in the Congressional Review Act. IV. Backfitting, Forward Fitting and Issue Finality Revision 3 of RG 1.21 does not constitute backfitting as defined in 10 CFR 50.109, ‘‘Backfitting,’’ and as described in NRC Management Directive (MD) 8.4, ‘‘Management of Backfitting, Forward Fitting, Issue Finality, and Information Requests’’; constitute forward fitting as that term is defined and described in MD 8.4; or affect the issue finality of any approval issued under 10 CFR part 52. As explained in Revision 3 of RG 1.21, applicants and licensees would not be required to comply with the positions set forth in the RG. Dated: September 17, 2021. For the Nuclear Regulatory Commission. Meraj Rahimi, Chief, Regulatory Guide and Programs Management Branch, Division of Engineering, Office of Nuclear Regulatory Research. [FR Doc. 2021–20565 Filed 9–22–21; 8:45 am] BILLING CODE 7590–01–P SECURITIES AND EXCHANGE COMMISSION SUPPLEMENTARY INFORMATION: [File No. 4–757; Release No. 93051/ September 17, 2021] I. Discussion Securities Exchange Act of 1934 The NRC is issuing a new guide in the NRC’s ‘‘Regulatory Guide’’ series. This series was developed to describe and make available to the public information regarding methods that are acceptable to the NRC staff for implementing specific parts of the agency’s regulations, techniques that the NRC staff uses in evaluating specific issues or postulated events, and data that the NRC staff needs in its review of applications for permits and licenses. II. Additional Information Revision 3 of RG 1.21 was issued with a temporary identification of Draft Regulatory Guide (DG) 1377. The NRC PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 In the Matter of: Joint Industry Plan; Order Approving, as Modified, a National Market System Plan Regarding Consolidated Equity Market Data. Order Denying Stay On August 6, 2021, the Commission issued Joint Industry Plan; Order Approving, as Modified, a National Market System Plan Regarding Consolidated Equity Market Data, Release, No. 34–92586 (the ‘‘CT Plan Order’’). It was published five days later in the Federal Register. See 86 FR 44,142 (Aug. 11, 2021). Later that month, The Nasdaq Stock Market LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC, E:\FR\FM\23SEN1.SGM 23SEN1 52934 Federal Register / Vol. 86, No. 182 / Thursday, September 23, 2021 / Notices lotter on DSK11XQN23PROD with NOTICES1 New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE Chicago, Inc., NYSE National, Inc., Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., and Cboe Exchange, Inc. (the ‘‘exchanges’’) filed with the Commission a motion to stay the effect of the CT Plan Order pending final resolution of their petitions for review filed in the U.S. Court of Appeals for the D.C. Circuit that challenge the CT Plan Order and the Order Directing the Exchanges and the Financial Industry Regulatory Authority to Submit a New National Market System Plan Regarding Consolidated Equity Market Data, Release No. 88827, 85 FR 28,702 (May 13, 2020) (the ‘‘NMS Governance Order’’).1 Pursuant to Section 25(c)(2) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’) and Section 705 of the Administrative Procedure Act, the Commission has discretion to stay the CT Plan Order. See 15 U.S.C. 78y(c)(2); 5 U.S.C. 705. As discussed below, however, the exchanges have not met their burden to demonstrate that a stay of the CT Plan Order is appropriate. Accordingly, the exchanges’ stay motion is denied. 1. Staying a final agency action pending review is an ‘‘extraordinary remedy.’’ 85 FR 36,921, 36,921 (June 18, 2020) (Commission order denying stay of NMS Governance Order). The Commission has discretion to grant a stay of its rules pending judicial review if it finds that ‘‘justice so requires.’’ 15 U.S.C. 78y(c)(2); 5 U.S.C. 705. Traditionally, the Commission uses ‘‘the familiar four-factor framework’’ when considering whether a stay during litigation is appropriate: Whether there is a strong likelihood that a party will succeed on the merits in a proceeding challenging the particular Commission action (or, if the other factors strongly favor a stay, that there is a substantial case on the merits); whether the issuance of a stay would likely serve the public interest; whether there would be substantial harm to any person if the stay were granted; and whether, without a stay, a party will suffer imminent, irreparable injury. In re Am. Petroleum Inst., Release No. 68197, 1 Petitioners filed a stay motion with the Commission dated August 19, 2021. Due to an administrative oversight, Commission staff did not learn of the filing and bring it to the Commissioners’ attention until three weeks later. The Commission has issued this order expeditiously after becoming aware of the filing and, in any event, well within ‘‘a reasonable period’’ under Section 25(c)(2). VerDate Sep<11>2014 17:19 Sep 22, 2021 Jkt 253001 2012 WL 5462858, at *2 (Nov. 8, 2012); see Nken v. Holder, 556 U.S. 418, 434– 35 (2009) (noting that the harm-to-others factor and the public-interest factor ‘‘merge when the Government is the opposing party’’). 2. The exchanges have not met their burden to demonstrate a likelihood of success on the merits. The Commission has previously addressed the three arguments the exchanges make, not only in the CT Order itself, but also in denying a stay of the NMS Governance Order and in the prior litigation challenging that order. None has merit. First, the exchanges state that the CT Plan Order ‘‘unlawfully vests representatives of [non-self-regulatory organizations, or non-SROs] with voting power on the plan’s operating committee,’’ Mot. 5, because, in their view, SROs—and only SROs—may have voting power on a national market system operating committee. This argument misunderstands the statutory scheme and the Commission’s authority. Section 11A(a)(2) directs the Commission to use its authority under the Exchange Act to facilitate the establishment of the national market system in accordance with and in furtherance of Congress’s specific findings and objectives. One of Congress’s express objectives in Section 11A(a)(1) is to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities. See 15 U.S.C. 78k–1(a)(1)(C). And Congress expressly authorized the Commission in Section 11A(c)(1)(B) to prescribe rules ‘‘to assure the prompt, accurate, reliable, and fair collection, processing, distribution, and publication of information with respect to quotations for and transactions in’’ NMS securities. Id. § 78k–1(c)(1)(B). Section 11A(a)(3) grants the Commission additional authority, including ‘‘to authorize or require self-regulatory organizations to act jointly’’ with respect to ‘‘matters as to which they share authority under this chapter in planning, developing, operating, or regulating a national market system.’’ Id. § 78k–1(a)(3)(B); see also 17 CFR 242.608(a). Pursuant to its authority under Section 11A, as the CT Plan Order explained, the Commission may permit or require the operating committee to include voting rights for non-SROs. See 86 FR at 44,156–58. Against this backdrop, the exchanges insist that Section 11A(a)(3)(B) forecloses the Commission from extending voting power to representatives of non-SROs. But nothing in the text of that provision constrains the manner in which the Commission can regulate the operating PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 committee. Section 11A(a)(3)(B) authorizes the Commission to require the SROs to act ‘‘jointly’’ in furtherance of Section 11A’s goals—which the CT Plan Order does. It does not provide that the Commission can only include the SROs in its regulation of the national market system or indicate that acting ‘‘jointly’’ means acting ‘‘jointly and exclusively.’’ CT Plan Order, 86 FR at 44,157. Indeed, here the Commission is requiring joint action with respect to the planning, development, and operation of a national market system plan governing dissemination of consolidated equity market data to further the goals of Section 11A(c). That provision tasks the Commission with prescribing rules to ensure ‘‘the prompt, accurate, reliable, and fair collection, processing, distribution, and publication of information with respect to quotations for and transactions in securities and the fairness and usefulness of the form and content of such information,’’ and expressly contemplates the involvement of non-SROs in that process. See 15 U.S.C. 78k–1(c)(1). Moreover, as the CT Plan Order stated, ‘‘an operating committee that takes into account views from non-SRO members that are charged with carrying out the objectives of the CT Plan will have an overall improved governance structure that better supports those goals, because it will reflect a more diverse set of perspectives from a range of market participants, including significant subscribers of SIP core data products.’’ 86 FR at 44,157. Relying on the expressio unius canon, the exchanges claim that Section 11A’s reference to the Commission’s ability to order SROs to ‘‘act jointly’’ categorically precludes the Commission from allowing any non-SRO entity to participate in plan governance. Mot. 6– 7. But, given the express contemplation of the involvement of non-SROs in the dissemination of national market system data elsewhere in Section 11A, see 15 U.S.C. 78k–1(c)(1), this reference to joint SRO action does not preclude their inclusion. Section 11A’s text, structure, and history demonstrate Congress’s intent to provide the Commission with flexibility in carrying out the enumerated statutory goals. And granting non-SROs voting power is consistent with Section 11A for the reasons discussed above. Nor is the Commission expanding its authority to regulate entities over which it does not otherwise have authority. Instead, the CT Plan Order requires the plan operating committee to include non-SROs. Any specific non-SRO selected to be on an operating E:\FR\FM\23SEN1.SGM 23SEN1 lotter on DSK11XQN23PROD with NOTICES1 Federal Register / Vol. 86, No. 182 / Thursday, September 23, 2021 / Notices committee can choose to participate or not. The exchanges likewise err in arguing that ‘‘Section 11A’s reference to ‘selfregulatory organizations’ would be entirely superfluous if . . . the statute does not in fact limit the Commission’s ‘act jointly’ authority to SROs alone.’’ Mot. 8. As the CT Plan Order explained, in granting the Commission broad powers, Congress was cognizant of how doing so could raise antitrust concerns. The provision allowing or requiring SROs to ‘‘act jointly’’ enables the Commission to require joint activity that otherwise might raise antitrust concerns. 86 FR at 44,157–58 & n.242; see Brief for NYSE Group, Inc. as Amicus Curiae, 2007 WL 173673, at *8, in Credit Suisse Sec. (USA) LLC v. Billing, 551 U.S. 264 (2007) (NYSE previously acknowledging that the Exchange Act ‘‘enables the Commission to require joint activity that otherwise might be asserted to have an impact on competition, where the activity serves the public interest and the interests of investors’’). And even if Section 11A’s grant of authority to permit or require SROs to act jointly could be read as superfluous or redundant of other Commission authority to oversee SROs, Congress’s decision to remove any doubt that the Commission may authorize joint action by SROs cannot fairly be read as a conscious choice to limit the Commission’s ability to require non-SRO participation. The exchanges are on no firmer ground in arguing that, ‘‘even if the Exchange Act did not foreclose the Commission’s effort to grant voting power to representatives of non-SROs, Rule 608 ‘‘plainly’’ does. Mot. 9. Rule 608 implements Section 11A(a)(3)(B), authorizing joint action in the creation, operation, and implementation of national market system plans. Specifically, it provides that ‘‘[a]ny two or more self-regulatory organizations, acting jointly, may file a national market system plan’’ and that ‘‘[s]elf-regulatory organizations are authorized to act jointly in’’ ‘‘[p]lanning, developing, and operating any national market subsystem or facility contemplated by a national market system plan,’’ ‘‘[p]reparing and filing a national market system plan,’’ and ‘‘[i]mplementing or administering an effective national market system plan.’’ 17 CFR 242.608(a). Nothing in the rule, which authorizes the SROs to act jointly, limits the Commission’s ability to extend voting right to non-SROs under the Commission’s Section 11A authority. To ‘‘act jointly’’ means to act together or cooperatively. There is no indication that in using the same phrase as in VerDate Sep<11>2014 17:19 Sep 22, 2021 Jkt 253001 Section 11A the Commission intended to attribute a different meaning to that phrase or to constrain its own discretion in achieving Section 11A’s goals. Nor does the exchanges’ reference (Mot. 6) to a remark at oral argument in the prior litigation regarding the NMS Governance Order satisfy their burden to show that they now have a likelihood of success on the merits. See In re Adelphia Commc’ns Corp., 336 B.R. 610, 636 n.44 (Bankr. S.D.N.Y. 2006) (‘‘Thoughts voiced by judges in oral argument do not always find their way into final decisions, often intentionally and for good reason.’’), aff’d, 342 B.R. 122 (S.D.N.Y. 2006); Bd. of Trade of City of Chicago v. SEC, 883 F.2d 525, 530 (7th Cir. 1989) (‘‘Comments by Commissioners during a meeting are no more the ‘decision’ of the Commission than comments by judges of this court during oral argument are our opinion or judgment.’’). Second, the exchanges contend that ‘‘the CT Plan Order impermissibly allocates operating committee votes to ‘exchange groups’—rather than to each individual affiliated exchange—with each group limited to a maximum of two votes, no matter the number of exchanges in the group,’’ which under the exchanges’ view gives too much power to non-SROs and also disadvantages affiliated SROs. Mot. 10. The Commission in the CT Plan Order, just as it did in the NMS Governance Order, thoroughly considered and rejected that argument. E.g., CT Plan Order, 86 FR at 44,163–65. The ‘‘proposed allocation of votes to NonSRO Voting Representatives will provide the Non-SRO Voting Representatives a meaningful presence and opportunity to vote on Operating Committee matters, while assuring that their voting power does not equal or exceed that of the SRO Voting Representatives.’’ Id. at 44,165. Under this structure, SROs will control twothirds of the votes on the new plan operating committee and can collectively govern the plan without a single vote from a voting member that is not a self-regulatory organization. The exchanges assert that it is improper to take into account corporate affiliations of the exchanges when deciding how votes should be allocated on the operating committee. Mot. 11. But as the Commission explained in the CT Plan Order, that argument fails for several reasons. ‘‘Sometimes, the Commission treats affiliated entities independently,’’ while ‘‘[o]ther times, the Commission takes into account corporate relationships when deciding how to regulate.’’ 86 FR at 44,164 (citing examples). Here, ‘‘[b]ecause of the PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 52935 concentrated power affiliated SROs exert in the governance structure of consolidated equity market data, as demonstrated by the indisputable fact that affiliated SROs vote as blocs, the Commission has determined that affiliated exchanges under common management and control should be treated as one SRO Group limited to one vote, or at most two votes, in the context of NMS plan governance.’’ Id. Third, the exchanges assert that the CT Plan Order ‘‘arbitrarily and capriciously requires that the administrator of the CT Plan be ‘independent.’ ’’ Mot. 11. But the Commission acted reasonably in finding that the new plan’s administrator should not at the same time offer for sale its own proprietary data products because such an entity would have access to confidential information as administrator that would benefit its proprietary data business. The exchanges claim that the Commission did not adequately demonstrate that current administrators have ‘‘misused customer audit data or that the combination of existing safeguards and the new confidentiality measures imposed by the CT Plan Order will be insufficient to eliminate that purported risk.’’ Id. at 12. But the exchanges do not dispute the existence of this conflict of interest, or that such information is sensitive and commercially valuable. Further, as explained in the CT Plan Order, the Commission has ‘‘provided evidence of problems in the current Administrator framework for the existing Equity Data Plans.’’ CT Plan Order, 86 FR at 44,195. Moreover, ‘‘the conflicts of interest faced by a nonindependent Administrator are so great that these conflicts cannot be sufficiently mitigated by policies and procedures alone.’’ Id. And the exchanges’ concerns about costs were similarly addressed and rejected in the CT Plan Order. Id. at 44,196–97. 3. The CT Plan Order serves a strong public interest. The governance model for the Equity Data Plans was established in 1970s. Since then, critical developments in the equities markets— including the heightening of an inherent conflict of interest between the for-profit and regulatory roles of the exchanges and the concentration of voting power in the Equity Data Plans among a few large exchange groups—have demonstrated the need for an updated governance model. See CT Plan Order, 86 FR at 44,142. The public interest will be served by the enhanced decisionmaking and potential for innovation in the provision of equity market data that will result from the governance changes compelled by the E:\FR\FM\23SEN1.SGM 23SEN1 lotter on DSK11XQN23PROD with NOTICES1 52936 Federal Register / Vol. 86, No. 182 / Thursday, September 23, 2021 / Notices CT Plan Order. And the governance of the consolidated data feeds can be improved by consolidating the three existing, separate Equity Data Plans into a single New Consolidated Data Plan that will reduce existing redundancies, inefficiencies, and inconsistencies between and among the Equity Data Plans. See id.; see also NMS Governance Order, 85 FR at 28,711. Moreover, ‘‘[a]ddressing the issues with the current governance structure of the Equity Data Plans discussed in [the CT Plan Order] is a key step in responding to broader concerns about the consolidated data feeds.’’ 86 FR at 44,142. Any further delay in establishing a new governance structure will impede the achievement of these benefits, including the Commission’s efforts to mitigate the clear, inherent conflict between the exchanges’ commercial interests in selling proprietary data products and their regulatory obligations to produce and disseminate consolidated market data. Indeed, the exchanges nowhere contest that this intractable conflict exists. The exchanges state that ‘‘the CT Plan Order will not yield any immediate benefits for market participants’’ because the Commission set forth an implementation schedule. Mot. 15. That argument could be made every time any agency adopts any rule or order that does not take effect immediately, yet a stay in those circumstances remains an extraordinary remedy. The exchanges also claim that any benefit from the CT Plan is ‘‘purely speculative,’’ id. at 16, but the Commission determined that the exchanges’ inherent conflict affects their incentives to meaningfully enhance the provision of consolidated data and concluded that the current governance structure of the Equity Data Plans is inadequate to respond to these changes or to the evolving needs of investors and other market participants. The exchanges also claim that the operating committee of the CT Plan may set the fees for core data at the same level or a higher level than they are now. Mot. 16. That argument, however, is speculative and the exchanges offer no reason why that unsubstantiated concern warrants a stay. And that argument is particularly misplaced because the exchanges themselves will play a major role in setting those fees. In any event, the CT Plan Order is reasonably designed to improve the governance of the national market system by, among other things, addressing the conflict of interest between the exchanges’ for-profit and regulatory roles. The exchanges speculate that, if the D.C. Circuit vacates the CT Plan, there VerDate Sep<11>2014 17:19 Sep 22, 2021 Jkt 253001 will be market uncertainty regarding the distribution of core data. Mot. 16–17. But that speculation is insufficient to justify the extraordinary remedy of a stay, particularly when weighed against the harms from the delay of efforts to mitigate the undisputed conflicts of interest faced by the exchanges through their for-profit and regulatory roles. The Court could act before the CT Plan becomes operative in August 2022 and, in doing so, confirm the validity of the plan. And even if the Court were to decide in favor of the exchanges, the decision may not affect the entirety of the CT Plan. Moreover, the three Equity Data Plans will not simply cease to exist in August 2022 or automatically lose their ability to fulfill their functions if the CT Plan Order were vacated. The exchanges’ contention that vacatur would complicate the implementation of the Market Data Infrastructure rule, see 86 FR 18,596 (Apr. 9, 2021), is likewise off base. As the Commission has already made clear, its initiatives to improve the governance and infrastructure of the national market system are mutually reinforcing but ‘‘[n]either initiative depends on the other initiative being implemented before it may take effect.’’ Order Denying Stay, Market Data Infrastructure Rule 5, Release No. 34– 91397, (Mar. 24, 2021). Finally, the exchanges argue that ‘‘a decision invalidating the CT Plan Order would raise a host of legally complicated and practically fraught questions about the validity of actions already taken by the CT Plan and the prospective implications of those actions.’’ Mot. 17. That speculative concern is routinely present any time an agency rule or order is subject to legal challenge and in this case does not warrant a stay. 4. The exchanges’ stay request also mischaracterizes the harm that will result from their compliance with the CT Plan Order. The exchanges assert that they will incur ‘‘out-of-pocket expenditures’’ and devote ‘‘substantial time and effort’’ as they work toward implementing the CT Plan. Mot. 14. But ‘‘ordinary compliance costs are typically insufficient to constitute irreparable harm,’’ Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112, 115 (2d Cir. 2005), and ‘‘it proves too much to suggest that ‘irreparable’ injury exists, as a matter of course, whenever a regulated party seeks preliminarily to enjoin the implementation of a new regulatory burden,’’ California Ass’n of Private Postsecondary Sch. v. DeVos, 344 F. Supp. 3d 158, 170 (D.D.C. 2018). Otherwise, a regulated party would always suffer cognizable irreparable harm whenever it faces compliance PO 00000 Frm 00065 Fmt 4703 Sfmt 4703 costs from agency action while its legal challenge proceeds. The costs of complying with a new regulatory burden do not qualify as irreparable harm except in extraordinary circumstances. See Nat’l Lifeline Ass’n v. FCC, No. 18–1026, 2018 WL 4154794, at *1 (D.C. Cir. Aug. 10, 2018) (stay justified where implementation of order ‘‘will result in substantial, unrecoverable losses . . . that may indeed threaten the future existence of [petitioners’] businesses’’ and ‘‘is likely to result in a major reduction, or outright elimination, of critical telecommunications services for many tribal residents, which are vital for dayto-day medical, educational, family care, and other functions’’). Here, the exchanges have made no attempt to offer even an estimate of their compliance costs or explain the extent to which those costs may affect their businesses. 5. Finally, a stay is not warranted under the statutory provision granting the Commission authority to issue a stay where ‘‘justice so requires.’’ 15 U.S.C. 78y(c)(2). As the Commission has explained, the traditional four-factor analysis provides ‘‘a useful framework to guide our consideration’’ under the justice-so-requires standard. In re Am. Petroleum Inst., 2012 WL 5462858, at *2 n.1. As already discussed, the exchanges have failed to carry their burden to meet the traditional requirements for a stay. Although the exchanges cite two cases in which the Commission granted stays under this standard, Mot. 18–19, neither case involved the Commission’s determination that a stay was justified despite the petitioner’s failure to satisfy the traditional four-factor stay analysis. See In re Rule 610T of Regulation NMS, Release No. 85447, 2019 WL 1424351 (Mar. 28, 2019); In re Motion of Business Roundtable and the Chamber of Commerce of the United States of America for Stay of Effect of Commission’s Facilitating Shareholder Director Nominations Rules, Release No. 9149, 2010 WL 3862548 (Oct. 4, 2010). And in this matter, the exchanges cannot meet any of the factors. The exchanges have not demonstrated that the Commission should grant a stay even though they cannot meet their burden to show a strong likelihood of success on the merits, they have not shown that the issuance of a stay would serve the public interest, and they offer no evidence of legally cognizable irreparable harm. Accordingly, it is ordered, pursuant to Exchange Act Section 25(c)(2) and Section 705 of the Administrative Procedure Act that the motion for a stay be denied. E:\FR\FM\23SEN1.SGM 23SEN1 Federal Register / Vol. 86, No. 182 / Thursday, September 23, 2021 / Notices By the Commission. J. Matthew DeLesDernier, Assistant Secretary. 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. [FR Doc. 2021–20554 Filed 9–22–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–93045; File No. SR–BOX– 2021–22] Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Options Market LLC Facility To Reduce the Amount of the Options Regulatory Fee (‘‘ORF’’) September 17, 2021. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on September 14, 2021, BOX Exchange LLC (‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. lotter on DSK11XQN23PROD with NOTICES1 I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change to amend the Fee Schedule on the BOX Options Market LLC (‘‘BOX’’) options facility. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission’s Public Reference Room and also on the Exchange’s internet website at https://boxexchange.com. 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 VerDate Sep<11>2014 17:19 Sep 22, 2021 Jkt 253001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Currently, the Exchange assesses ORF in the amount of $0.0038 per contract side. The Exchange proposes to reduce the amount of ORF from $0.0038 per contract side to $0.00295 per contract side in order to help ensure that revenue collected from the ORF, in combination with other regulatory fees and fines, does not exceed the Exchange’s total regulatory costs. The Exchange’s proposed change to the ORF should balance the Exchange’s regulatory revenue against the anticipated regulatory costs. Collection of ORF Currently, the Exchange assesses the per-contract ORF to each Participant 5 for all options transactions, including Mini Options, cleared or ultimately cleared by the Participant, which are cleared by the Options Clearing Corporation (‘‘OCC’’) in the ‘‘customer’’ range,6 regardless of the exchange on which the transaction occurs. The ORF is collected by OCC on behalf of the Exchange from either: (1) A Participant that was the ultimate clearing firm for the transaction; or (2) a non-Participant that was the ultimate clearing firm where a Participant was the executing clearing firm for the transaction. The Exchange uses reports from OCC to determine the identity of the executing clearing firm and ultimate clearing firm. To illustrate how the Exchange assesses and collects ORF, the Exchange provides the following set of examples. For a transaction that is executed on the Exchange and the ORF is assessed, if there is no change to the clearing account of the original transaction, then the ORF is collected from the Participant that is the executing clearing 5 The term ‘‘Participant’’ or ‘‘Options Participant’’ means a firm, or organization that is registered with the Exchange pursuant to the Rule 2000 Series for purposes of participating in trading on a facility of the Exchange. See BOX Rule 100(a)(41). 6 Exchange Participants must record the appropriate account origin code on all orders at the time of entry in order. The Exchange represents that it has surveillances in place to verify that Participants mark orders with the correct account origin code. PO 00000 Frm 00066 Fmt 4703 Sfmt 4703 52937 firm for the transaction (the Exchange notes that, for purposes of the Fee Schedule, when there is no change to the clearing account of the original transaction, the executing clearing firm is deemed to be the ultimate clearing firm). If there is a change to the clearing account of the original transaction (i.e., the executing clearing firm ‘‘gives-up’’ or ‘‘CMTAs’’ 7 the transaction to another clearing firm), then the ORF is collected from the clearing firm that ultimately clears the transaction—the ‘‘ultimate clearing firm.’’ The ultimate clearing firm may be either a Participant or nonParticipant of the Exchange. If the transaction is executed on an away exchange and the ORF is assessed, then the ORF is collected from the ultimate clearing firm for the transaction. Again, the ultimate clearing firm may be either a Participant or non-Participant of the Exchange. The Exchange notes, however, that when the transaction is executed on an away exchange, the Exchange does not assess the ORF when neither the executing clearing firm nor the ultimate clearing firm is a Participant (even if a Participant is ‘‘given-up’’ or ‘‘CMTAed’’ and then such Participant subsequently ‘‘givesup’’ or ‘‘CMTAs’’ the transaction to another non-Participant via a CMTA reversal). Finally, the Exchange does not assess the ORF on outbound linkage trades, whether executed at the Exchange or an away exchange. ‘‘Linkage trades’’ are tagged in the Exchange’s system, so the Exchange can readily tell them apart from other trades. A customer order routed to another exchange results in two customer trades, one from the originating exchange and one from the recipient exchange. Charging ORF on both trades could result in double-billing of ORF for a single customer order; thus, the Exchange does not assess ORF on outbound linkage trades in a linkage scenario. As a practical matter, when a transaction that is subject to the ORF is not executed on the Exchange, the Exchange lacks the information necessary to identify the order-entering market participant for that transaction. There are a multitude of order-entering market participants throughout the industry, and such participants can make changes to the market centers to which they connect, including dropping their connection to one market center and establishing themselves as participants on another. For these reasons, it is not possible for the 7 ‘‘CMTA’’ or Clearing Member Trade Assignment is a form of ‘‘give-up’’ whereby the position will be assigned to a specific clearing firm at OCC. E:\FR\FM\23SEN1.SGM 23SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 86, Number 182 (Thursday, September 23, 2021)]
[Notices]
[Pages 52933-52937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-20554]


=======================================================================
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SECURITIES AND EXCHANGE COMMISSION

[File No. 4-757; Release No. 93051/September 17, 2021]


Securities Exchange Act of 1934

    In the Matter of: Joint Industry Plan; Order Approving, as 
Modified, a National Market System Plan Regarding Consolidated 
Equity Market Data.

Order Denying Stay

    On August 6, 2021, the Commission issued Joint Industry Plan; Order 
Approving, as Modified, a National Market System Plan Regarding 
Consolidated Equity Market Data, Release, No. 34-92586 (the ``CT Plan 
Order''). It was published five days later in the Federal Register. See 
86 FR 44,142 (Aug. 11, 2021). Later that month, The Nasdaq Stock Market 
LLC, Nasdaq BX, Inc., Nasdaq PHLX LLC,

[[Page 52934]]

New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc., NYSE 
Chicago, Inc., NYSE National, Inc., Cboe BYX Exchange, Inc., Cboe BZX 
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., and 
Cboe Exchange, Inc. (the ``exchanges'') filed with the Commission a 
motion to stay the effect of the CT Plan Order pending final resolution 
of their petitions for review filed in the U.S. Court of Appeals for 
the D.C. Circuit that challenge the CT Plan Order and the Order 
Directing the Exchanges and the Financial Industry Regulatory Authority 
to Submit a New National Market System Plan Regarding Consolidated 
Equity Market Data, Release No. 88827, 85 FR 28,702 (May 13, 2020) (the 
``NMS Governance Order'').\1\
---------------------------------------------------------------------------

    \1\ Petitioners filed a stay motion with the Commission dated 
August 19, 2021. Due to an administrative oversight, Commission 
staff did not learn of the filing and bring it to the Commissioners' 
attention until three weeks later. The Commission has issued this 
order expeditiously after becoming aware of the filing and, in any 
event, well within ``a reasonable period'' under Section 25(c)(2).
---------------------------------------------------------------------------

    Pursuant to Section 25(c)(2) of the Securities Exchange Act of 1934 
(``Exchange Act'') and Section 705 of the Administrative Procedure Act, 
the Commission has discretion to stay the CT Plan Order. See 15 U.S.C. 
78y(c)(2); 5 U.S.C. 705. As discussed below, however, the exchanges 
have not met their burden to demonstrate that a stay of the CT Plan 
Order is appropriate. Accordingly, the exchanges' stay motion is 
denied.
    1. Staying a final agency action pending review is an 
``extraordinary remedy.'' 85 FR 36,921, 36,921 (June 18, 2020) 
(Commission order denying stay of NMS Governance Order). The Commission 
has discretion to grant a stay of its rules pending judicial review if 
it finds that ``justice so requires.'' 15 U.S.C. 78y(c)(2); 5 U.S.C. 
705. Traditionally, the Commission uses ``the familiar four-factor 
framework'' when considering whether a stay during litigation is 
appropriate:
    Whether there is a strong likelihood that a party will succeed on 
the merits in a proceeding challenging the particular Commission action 
(or, if the other factors strongly favor a stay, that there is a 
substantial case on the merits);
    whether the issuance of a stay would likely serve the public 
interest;
    whether there would be substantial harm to any person if the stay 
were granted; and
    whether, without a stay, a party will suffer imminent, irreparable 
injury. In re Am. Petroleum Inst., Release No. 68197, 2012 WL 5462858, 
at *2 (Nov. 8, 2012); see Nken v. Holder, 556 U.S. 418, 434-35 (2009) 
(noting that the harm-to-others factor and the public-interest factor 
``merge when the Government is the opposing party'').
    2. The exchanges have not met their burden to demonstrate a 
likelihood of success on the merits. The Commission has previously 
addressed the three arguments the exchanges make, not only in the CT 
Order itself, but also in denying a stay of the NMS Governance Order 
and in the prior litigation challenging that order. None has merit.
    First, the exchanges state that the CT Plan Order ``unlawfully 
vests representatives of [non-self-regulatory organizations, or non-
SROs] with voting power on the plan's operating committee,'' Mot. 5, 
because, in their view, SROs--and only SROs--may have voting power on a 
national market system operating committee. This argument 
misunderstands the statutory scheme and the Commission's authority. 
Section 11A(a)(2) directs the Commission to use its authority under the 
Exchange Act to facilitate the establishment of the national market 
system in accordance with and in furtherance of Congress's specific 
findings and objectives. One of Congress's express objectives in 
Section 11A(a)(1) is to assure the availability to brokers, dealers, 
and investors of information with respect to quotations for and 
transactions in securities. See 15 U.S.C. 78k-1(a)(1)(C). And Congress 
expressly authorized the Commission in Section 11A(c)(1)(B) to 
prescribe rules ``to assure the prompt, accurate, reliable, and fair 
collection, processing, distribution, and publication of information 
with respect to quotations for and transactions in'' NMS securities. 
Id. Sec.  78k-1(c)(1)(B). Section 11A(a)(3) grants the Commission 
additional authority, including ``to authorize or require self-
regulatory organizations to act jointly'' with respect to ``matters as 
to which they share authority under this chapter in planning, 
developing, operating, or regulating a national market system.'' Id. 
Sec.  78k-1(a)(3)(B); see also 17 CFR 242.608(a). Pursuant to its 
authority under Section 11A, as the CT Plan Order explained, the 
Commission may permit or require the operating committee to include 
voting rights for non-SROs. See 86 FR at 44,156-58.
    Against this backdrop, the exchanges insist that Section 
11A(a)(3)(B) forecloses the Commission from extending voting power to 
representatives of non-SROs. But nothing in the text of that provision 
constrains the manner in which the Commission can regulate the 
operating committee. Section 11A(a)(3)(B) authorizes the Commission to 
require the SROs to act ``jointly'' in furtherance of Section 11A's 
goals--which the CT Plan Order does. It does not provide that the 
Commission can only include the SROs in its regulation of the national 
market system or indicate that acting ``jointly'' means acting 
``jointly and exclusively.'' CT Plan Order, 86 FR at 44,157.
    Indeed, here the Commission is requiring joint action with respect 
to the planning, development, and operation of a national market system 
plan governing dissemination of consolidated equity market data to 
further the goals of Section 11A(c). That provision tasks the 
Commission with prescribing rules to ensure ``the prompt, accurate, 
reliable, and fair collection, processing, distribution, and 
publication of information with respect to quotations for and 
transactions in securities and the fairness and usefulness of the form 
and content of such information,'' and expressly contemplates the 
involvement of non-SROs in that process. See 15 U.S.C. 78k-1(c)(1). 
Moreover, as the CT Plan Order stated, ``an operating committee that 
takes into account views from non-SRO members that are charged with 
carrying out the objectives of the CT Plan will have an overall 
improved governance structure that better supports those goals, because 
it will reflect a more diverse set of perspectives from a range of 
market participants, including significant subscribers of SIP core data 
products.'' 86 FR at 44,157.
    Relying on the expressio unius canon, the exchanges claim that 
Section 11A's reference to the Commission's ability to order SROs to 
``act jointly'' categorically precludes the Commission from allowing 
any non-SRO entity to participate in plan governance. Mot. 6-7. But, 
given the express contemplation of the involvement of non-SROs in the 
dissemination of national market system data elsewhere in Section 11A, 
see 15 U.S.C. 78k-1(c)(1), this reference to joint SRO action does not 
preclude their inclusion. Section 11A's text, structure, and history 
demonstrate Congress's intent to provide the Commission with 
flexibility in carrying out the enumerated statutory goals. And 
granting non-SROs voting power is consistent with Section 11A for the 
reasons discussed above.
    Nor is the Commission expanding its authority to regulate entities 
over which it does not otherwise have authority. Instead, the CT Plan 
Order requires the plan operating committee to include non-SROs. Any 
specific non-SRO selected to be on an operating

[[Page 52935]]

committee can choose to participate or not.
    The exchanges likewise err in arguing that ``Section 11A's 
reference to `self-regulatory organizations' would be entirely 
superfluous if . . . the statute does not in fact limit the 
Commission's `act jointly' authority to SROs alone.'' Mot. 8. As the CT 
Plan Order explained, in granting the Commission broad powers, Congress 
was cognizant of how doing so could raise antitrust concerns. The 
provision allowing or requiring SROs to ``act jointly'' enables the 
Commission to require joint activity that otherwise might raise 
antitrust concerns. 86 FR at 44,157-58 & n.242; see Brief for NYSE 
Group, Inc. as Amicus Curiae, 2007 WL 173673, at *8, in Credit Suisse 
Sec. (USA) LLC v. Billing, 551 U.S. 264 (2007) (NYSE previously 
acknowledging that the Exchange Act ``enables the Commission to require 
joint activity that otherwise might be asserted to have an impact on 
competition, where the activity serves the public interest and the 
interests of investors''). And even if Section 11A's grant of authority 
to permit or require SROs to act jointly could be read as superfluous 
or redundant of other Commission authority to oversee SROs, Congress's 
decision to remove any doubt that the Commission may authorize joint 
action by SROs cannot fairly be read as a conscious choice to limit the 
Commission's ability to require non-SRO participation.
    The exchanges are on no firmer ground in arguing that, ``even if 
the Exchange Act did not foreclose the Commission's effort to grant 
voting power to representatives of non-SROs, Rule 608 ``plainly'' does. 
Mot. 9. Rule 608 implements Section 11A(a)(3)(B), authorizing joint 
action in the creation, operation, and implementation of national 
market system plans. Specifically, it provides that ``[a]ny two or more 
self-regulatory organizations, acting jointly, may file a national 
market system plan'' and that ``[s]elf-regulatory organizations are 
authorized to act jointly in'' ``[p]lanning, developing, and operating 
any national market subsystem or facility contemplated by a national 
market system plan,'' ``[p]reparing and filing a national market system 
plan,'' and ``[i]mplementing or administering an effective national 
market system plan.'' 17 CFR 242.608(a). Nothing in the rule, which 
authorizes the SROs to act jointly, limits the Commission's ability to 
extend voting right to non-SROs under the Commission's Section 11A 
authority. To ``act jointly'' means to act together or cooperatively. 
There is no indication that in using the same phrase as in Section 11A 
the Commission intended to attribute a different meaning to that phrase 
or to constrain its own discretion in achieving Section 11A's goals.
    Nor does the exchanges' reference (Mot. 6) to a remark at oral 
argument in the prior litigation regarding the NMS Governance Order 
satisfy their burden to show that they now have a likelihood of success 
on the merits. See In re Adelphia Commc'ns Corp., 336 B.R. 610, 636 
n.44 (Bankr. S.D.N.Y. 2006) (``Thoughts voiced by judges in oral 
argument do not always find their way into final decisions, often 
intentionally and for good reason.''), aff'd, 342 B.R. 122 (S.D.N.Y. 
2006); Bd. of Trade of City of Chicago v. SEC, 883 F.2d 525, 530 (7th 
Cir. 1989) (``Comments by Commissioners during a meeting are no more 
the `decision' of the Commission than comments by judges of this court 
during oral argument are our opinion or judgment.'').
    Second, the exchanges contend that ``the CT Plan Order 
impermissibly allocates operating committee votes to `exchange 
groups'--rather than to each individual affiliated exchange--with each 
group limited to a maximum of two votes, no matter the number of 
exchanges in the group,'' which under the exchanges' view gives too 
much power to non-SROs and also disadvantages affiliated SROs. Mot. 10. 
The Commission in the CT Plan Order, just as it did in the NMS 
Governance Order, thoroughly considered and rejected that argument. 
E.g., CT Plan Order, 86 FR at 44,163-65. The ``proposed allocation of 
votes to Non-SRO Voting Representatives will provide the Non-SRO Voting 
Representatives a meaningful presence and opportunity to vote on 
Operating Committee matters, while assuring that their voting power 
does not equal or exceed that of the SRO Voting Representatives.'' Id. 
at 44,165. Under this structure, SROs will control two-thirds of the 
votes on the new plan operating committee and can collectively govern 
the plan without a single vote from a voting member that is not a self-
regulatory organization.
    The exchanges assert that it is improper to take into account 
corporate affiliations of the exchanges when deciding how votes should 
be allocated on the operating committee. Mot. 11. But as the Commission 
explained in the CT Plan Order, that argument fails for several 
reasons. ``Sometimes, the Commission treats affiliated entities 
independently,'' while ``[o]ther times, the Commission takes into 
account corporate relationships when deciding how to regulate.'' 86 FR 
at 44,164 (citing examples). Here, ``[b]ecause of the concentrated 
power affiliated SROs exert in the governance structure of consolidated 
equity market data, as demonstrated by the indisputable fact that 
affiliated SROs vote as blocs, the Commission has determined that 
affiliated exchanges under common management and control should be 
treated as one SRO Group limited to one vote, or at most two votes, in 
the context of NMS plan governance.'' Id.
    Third, the exchanges assert that the CT Plan Order ``arbitrarily 
and capriciously requires that the administrator of the CT Plan be 
`independent.' '' Mot. 11. But the Commission acted reasonably in 
finding that the new plan's administrator should not at the same time 
offer for sale its own proprietary data products because such an entity 
would have access to confidential information as administrator that 
would benefit its proprietary data business. The exchanges claim that 
the Commission did not adequately demonstrate that current 
administrators have ``misused customer audit data or that the 
combination of existing safeguards and the new confidentiality measures 
imposed by the CT Plan Order will be insufficient to eliminate that 
purported risk.'' Id. at 12. But the exchanges do not dispute the 
existence of this conflict of interest, or that such information is 
sensitive and commercially valuable. Further, as explained in the CT 
Plan Order, the Commission has ``provided evidence of problems in the 
current Administrator framework for the existing Equity Data Plans.'' 
CT Plan Order, 86 FR at 44,195. Moreover, ``the conflicts of interest 
faced by a non-independent Administrator are so great that these 
conflicts cannot be sufficiently mitigated by policies and procedures 
alone.'' Id. And the exchanges' concerns about costs were similarly 
addressed and rejected in the CT Plan Order. Id. at 44,196-97.
    3. The CT Plan Order serves a strong public interest. The 
governance model for the Equity Data Plans was established in 1970s. 
Since then, critical developments in the equities markets--including 
the heightening of an inherent conflict of interest between the for-
profit and regulatory roles of the exchanges and the concentration of 
voting power in the Equity Data Plans among a few large exchange 
groups--have demonstrated the need for an updated governance model. See 
CT Plan Order, 86 FR at 44,142. The public interest will be served by 
the enhanced decisionmaking and potential for innovation in the 
provision of equity market data that will result from the governance 
changes compelled by the

[[Page 52936]]

CT Plan Order. And the governance of the consolidated data feeds can be 
improved by consolidating the three existing, separate Equity Data 
Plans into a single New Consolidated Data Plan that will reduce 
existing redundancies, inefficiencies, and inconsistencies between and 
among the Equity Data Plans. See id.; see also NMS Governance Order, 85 
FR at 28,711. Moreover, ``[a]ddressing the issues with the current 
governance structure of the Equity Data Plans discussed in [the CT Plan 
Order] is a key step in responding to broader concerns about the 
consolidated data feeds.'' 86 FR at 44,142. Any further delay in 
establishing a new governance structure will impede the achievement of 
these benefits, including the Commission's efforts to mitigate the 
clear, inherent conflict between the exchanges' commercial interests in 
selling proprietary data products and their regulatory obligations to 
produce and disseminate consolidated market data. Indeed, the exchanges 
nowhere contest that this intractable conflict exists.
    The exchanges state that ``the CT Plan Order will not yield any 
immediate benefits for market participants'' because the Commission set 
forth an implementation schedule. Mot. 15. That argument could be made 
every time any agency adopts any rule or order that does not take 
effect immediately, yet a stay in those circumstances remains an 
extraordinary remedy. The exchanges also claim that any benefit from 
the CT Plan is ``purely speculative,'' id. at 16, but the Commission 
determined that the exchanges' inherent conflict affects their 
incentives to meaningfully enhance the provision of consolidated data 
and concluded that the current governance structure of the Equity Data 
Plans is inadequate to respond to these changes or to the evolving 
needs of investors and other market participants.
    The exchanges also claim that the operating committee of the CT 
Plan may set the fees for core data at the same level or a higher level 
than they are now. Mot. 16. That argument, however, is speculative and 
the exchanges offer no reason why that unsubstantiated concern warrants 
a stay. And that argument is particularly misplaced because the 
exchanges themselves will play a major role in setting those fees. In 
any event, the CT Plan Order is reasonably designed to improve the 
governance of the national market system by, among other things, 
addressing the conflict of interest between the exchanges' for-profit 
and regulatory roles.
    The exchanges speculate that, if the D.C. Circuit vacates the CT 
Plan, there will be market uncertainty regarding the distribution of 
core data. Mot. 16-17. But that speculation is insufficient to justify 
the extraordinary remedy of a stay, particularly when weighed against 
the harms from the delay of efforts to mitigate the undisputed 
conflicts of interest faced by the exchanges through their for-profit 
and regulatory roles. The Court could act before the CT Plan becomes 
operative in August 2022 and, in doing so, confirm the validity of the 
plan. And even if the Court were to decide in favor of the exchanges, 
the decision may not affect the entirety of the CT Plan. Moreover, the 
three Equity Data Plans will not simply cease to exist in August 2022 
or automatically lose their ability to fulfill their functions if the 
CT Plan Order were vacated.
    The exchanges' contention that vacatur would complicate the 
implementation of the Market Data Infrastructure rule, see 86 FR 18,596 
(Apr. 9, 2021), is likewise off base. As the Commission has already 
made clear, its initiatives to improve the governance and 
infrastructure of the national market system are mutually reinforcing 
but ``[n]either initiative depends on the other initiative being 
implemented before it may take effect.'' Order Denying Stay, Market 
Data Infrastructure Rule 5, Release No. 34-91397, (Mar. 24, 2021). 
Finally, the exchanges argue that ``a decision invalidating the CT Plan 
Order would raise a host of legally complicated and practically fraught 
questions about the validity of actions already taken by the CT Plan 
and the prospective implications of those actions.'' Mot. 17. That 
speculative concern is routinely present any time an agency rule or 
order is subject to legal challenge and in this case does not warrant a 
stay.
    4. The exchanges' stay request also mischaracterizes the harm that 
will result from their compliance with the CT Plan Order. The exchanges 
assert that they will incur ``out-of-pocket expenditures'' and devote 
``substantial time and effort'' as they work toward implementing the CT 
Plan. Mot. 14. But ``ordinary compliance costs are typically 
insufficient to constitute irreparable harm,'' Freedom Holdings, Inc. 
v. Spitzer, 408 F.3d 112, 115 (2d Cir. 2005), and ``it proves too much 
to suggest that `irreparable' injury exists, as a matter of course, 
whenever a regulated party seeks preliminarily to enjoin the 
implementation of a new regulatory burden,'' California Ass'n of 
Private Postsecondary Sch. v. DeVos, 344 F. Supp. 3d 158, 170 (D.D.C. 
2018). Otherwise, a regulated party would always suffer cognizable 
irreparable harm whenever it faces compliance costs from agency action 
while its legal challenge proceeds. The costs of complying with a new 
regulatory burden do not qualify as irreparable harm except in 
extraordinary circumstances. See Nat'l Lifeline Ass'n v. FCC, No. 18-
1026, 2018 WL 4154794, at *1 (D.C. Cir. Aug. 10, 2018) (stay justified 
where implementation of order ``will result in substantial, 
unrecoverable losses . . . that may indeed threaten the future 
existence of [petitioners'] businesses'' and ``is likely to result in a 
major reduction, or outright elimination, of critical 
telecommunications services for many tribal residents, which are vital 
for day-to-day medical, educational, family care, and other 
functions''). Here, the exchanges have made no attempt to offer even an 
estimate of their compliance costs or explain the extent to which those 
costs may affect their businesses.
    5. Finally, a stay is not warranted under the statutory provision 
granting the Commission authority to issue a stay where ``justice so 
requires.'' 15 U.S.C. 78y(c)(2). As the Commission has explained, the 
traditional four-factor analysis provides ``a useful framework to guide 
our consideration'' under the justice-so-requires standard. In re Am. 
Petroleum Inst., 2012 WL 5462858, at *2 n.1. As already discussed, the 
exchanges have failed to carry their burden to meet the traditional 
requirements for a stay. Although the exchanges cite two cases in which 
the Commission granted stays under this standard, Mot. 18-19, neither 
case involved the Commission's determination that a stay was justified 
despite the petitioner's failure to satisfy the traditional four-factor 
stay analysis. See In re Rule 610T of Regulation NMS, Release No. 
85447, 2019 WL 1424351 (Mar. 28, 2019); In re Motion of Business 
Roundtable and the Chamber of Commerce of the United States of America 
for Stay of Effect of Commission's Facilitating Shareholder Director 
Nominations Rules, Release No. 9149, 2010 WL 3862548 (Oct. 4, 2010). 
And in this matter, the exchanges cannot meet any of the factors. The 
exchanges have not demonstrated that the Commission should grant a stay 
even though they cannot meet their burden to show a strong likelihood 
of success on the merits, they have not shown that the issuance of a 
stay would serve the public interest, and they offer no evidence of 
legally cognizable irreparable harm.
    Accordingly, it is ordered, pursuant to Exchange Act Section 
25(c)(2) and Section 705 of the Administrative Procedure Act that the 
motion for a stay be denied.


[[Page 52937]]


    By the Commission.
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-20554 Filed 9-22-21; 8:45 am]
BILLING CODE 8011-01-P

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