80 FR 10169 - Joint Industry Plan; Order Approving the Eighth Amendment to the National Market System Plan To Address Extraordinary Market Volatility by BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc.
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 37 (February 25, 2015)
Federal Register Volume 80, Issue 37 (February 25, 2015)
| Page Range | 10169-10171 | |
| FR Document | 2015-03875 |
[Federal Register Volume 80, Number 37 (Wednesday, February 25, 2015)] [Notices] [Pages 10169-10171] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-03875] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74323; File No. 4-631] Joint Industry Plan; Order Approving the Eighth Amendment to the National Market System Plan To Address Extraordinary Market Volatility by BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. February 19, 2015. I. Introduction On December 24, 2014, Financial Industry Regulatory Authority, Inc. (``FINRA''), on behalf of the following parties to the National Market System Plan: BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., NASDAQ OMX [[Page 10170]] BX, Inc., NASDAQ OMX PHLX LLC, the Nasdaq Stock Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. (collectively with FINRA, the ``Participants''), filed with the Securities and Exchange Commission (``Commission'') pursuant to Section 11A of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 608 thereunder,\2\ a proposal to amend the Plan to Address Extraordinary Market Volatility (``Plan'').\3\ The proposal represents the eighth amendment to the Plan (``Eighth Amendment''), and reflects proposed changes unanimously approved by the Participants. The Eighth Amendment was published for comment in the Federal Register on January 27, 2015.\4\ The Commission has received no comment letters regarding the Eighth Amendment. This order approves the Eighth Amendment to the Plan. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78k-1. \2\ 17 CFR 242.608. \3\ See Letter from Christopher B. Stone, Vice President, FINRA, to Brent Fields, Secretary, Commission, dated December 24, 2014 (``Transmittal Letter''). \4\ See Securities Exchange Act Release No. 74110 (January 21, 2015), 80 FR 4321 (``Notice''). --------------------------------------------------------------------------- II. Description of the Proposal A. Eighth Amendment to the Plan The Eighth Amendment includes two proposed changes to the Plan. First, the Participants propose to amend the Plan to establish a requirement for the Participants to submit a Supplemental Joint Assessment to the Commission by May 29, 2015. Second, the Participants propose to extend the end date of the pilot period of the Plan from February 20, 2015 to October 23, 2015. B. Background and Purpose of the Plan The Plan, approved by the Commission in March 2012,\5\ establishes a market-wide limit up-limit down mechanism that is intended to address extraordinary market volatility in ``NMS Stocks,'' as defined in Rule 600(b)(47) of Regulation NMS under the Act.\6\ The Plan sets forth limit up-limit down requirements designed to prevent trades from occurring outside specified Price Bands.\7\ These limit up-limit down requirements are coupled with Trading Pauses, as defined in the Plan, to accommodate more fundamental price moves (as opposed to erroneous trades or momentary gaps in liquidity). The limit up-limit down mechanism is intended to reduce the negative impacts of sudden, unanticipated price movements in NMS Stocks, such as those experienced on May 6, 2010, thereby protecting investors and promoting a fair and orderly market. The initial date of Plan operations was April 8, 2013.\8\ --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release No. 67091, 77 FR 33498 (Jun. 6, 2012) (File No. 4-631). \6\ 17 CFR 242.600(b)(47). See also Section I(H) of the Plan. \7\ See Section V of the Plan. \8\ See Securities Exchange Act Release No. 68953 (February 20, 2013), 78 FR 13113 (February 26, 2013). --------------------------------------------------------------------------- III. Discussion and Commission Findings After careful review, the Commission finds that the Eighth Amendment is consistent with the requirements of the Act and the rules and regulations thereunder.\9\ Specifically, the Commission finds that the Eighth Amendment is consistent with Section 11A of the Act \10\ and Rule 608 thereunder \11\ in that it is appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, and that it removes impediments to, and perfects the mechanism of, a national market system. --------------------------------------------------------------------------- \9\ In approving the Eighth Amendment, the Commission has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). \10\ 15 U.S.C. 78k-1. \11\ 17 CFR 242.608. --------------------------------------------------------------------------- The Supplemental Joint Assessment will evaluate the impact of the Plan using the measures set forth in Appendix B of the Plan \12\ and provide the Commission with an extensive cross-market data analysis using methodology agreed upon by the Participants.\13\ The Participants stated that they intend to engage a third-party consultant to assist in conducting the cross-market analysis and preparing the Supplemental Joint Assessment.\14\ The Participants believe that the Supplemental Joint Assessment will facilitate the development of unified recommendations, if and where appropriate, regarding operation of the Plan.\15\ The Participants also state that they intend to make the Supplemental Joint Assessment publicly available.\16\ --------------------------------------------------------------------------- \12\ Appendix B of the Plan requires the Participants to: (a) Assess the statistical and economic impact on liquidity of approaching Price Bands; (b) assess the statistical and economic impact of the Price Bands on erroneous trades; (c) assess the statistical and economic impact of the appropriateness of the Percentage Parameters used for the Price Bands; (d) assess whether the Limit State is the appropriate length to allow for liquidity replenishment when a Limit State is reached because of a temporary liquidity gap; (e) evaluate concerns from the options markets regarding the statistical and economic impact of Limit States on liquidity and market quality in the options markets; (f) assess whether the process for entering a Limit State should be adjusted and whether Straddle States are problematic; (g) assess whether the process for exiting a Limit State should be adjusted; and (h) assess whether the Trading Pauses are too long or short and whether the reopening procedures should be adjusted. These areas are intended to capture the key measures necessary to assess the impact of the Plan and, if and where appropriate, to support recommendations relating to the calibration of the Percentage Parameters to help ensure that the stated objectives of the Plan are achieved. \13\ See Notice, supra, note 4 at 4323. \14\ See id. More recently, however, the Participants notified Commission staff that they have engaged a third-party consultant. Telephone conversation between Chris Grobbel, Attorney-Adviser, Commission, and Thushara Therrien, Director--Transparency Services, FINRA (February 3, 2015). \15\ See Notice, supra, note 4 at 4323. \16\ See id. --------------------------------------------------------------------------- The Participants further believe that extending the end date of the pilot period will: (i) Provide the Participants with time to use the information collected during the operation of the Plan to perform further analysis and recommend further amendments to the Plan, as necessary; (ii) provide a reasonable period of time for the public to comment on the Supplemental Joint Assessment and recommendations; and (iii) allow the Commission and the public adequate time to review the Supplemental Joint Assessment and any recommendations provided by the Participants, and to determine if any modifications to the Plan are appropriate.\17\ --------------------------------------------------------------------------- \17\ See id. --------------------------------------------------------------------------- The Commission believes that the Supplemental Joint Assessment and any resulting recommendations for modifications to the Plan from the Participants, along with any public comment in response thereto, will assist the Commission in assessing the operation of the Plan and in considering any future determinations regarding the Plan. For the reasons noted above, the Commission finds that the Eighth Amendment to the Plan is consistent with Section 11A of the Act \18\ and Rule 608 thereunder.\19\ The Commission reiterates its expectation that the Participants will continue to monitor the scope and operation of the Plan and study the data produced, and will propose any modifications to the Plan that may be necessary or appropriate.\20\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 78k-1. \19\ 17 CFR 242.608. \20\ See Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR 33498 (June 6, 2012). --------------------------------------------------------------------------- IV. Conclusion It is therefore ordered, pursuant to Section 11A of the Act \21\ and Rule 608 thereunder,\22\ that the Eighth [[Page 10171]] Amendment to the Plan (File No. 4-631) be, and it hereby is, approved. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78k-1. \22\ 17 CFR 242.608. Brent J. Fields, Secretary. [FR Doc. 2015-03875 Filed 2-24-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10169
SUMMARY: The Commission is noticing a 3633, or 3642, 39 CFR part 3015, and 39 POSTAL SERVICE
recent Postal Service filing concerning CFR part 3020, subpart B. Comments are
an addition of Priority Mail Contract due no later than February 26, 2015. Product Change—Priority Mail
113 to the competitive product list. This The public portions of these filings can Negotiated Service Agreement
notice informs the public of the filing, be accessed via the Commission’s Web
AGENCY: Postal ServiceTM.
invites public comment, and takes other site (http://www.prc.gov).
administrative steps. The Commission appoints James F. ACTION: Notice.
DATES: Comments are due: February 26, Callow to serve as Public Representative SUMMARY: The Postal Service gives
2015. in these dockets. notice of filing a request with the Postal
ADDRESSES: Submit comments III. Ordering Paragraphs Regulatory Commission to add a
electronically via the Commission’s domestic shipping services contract to
Filing Online system at http:// It is ordered:
the list of Negotiated Service
1. The Commission establishes Docket
www.prc.gov. Those who cannot submit Agreements in the Mail Classification
Nos. MC2015–33 and CP2015–43 to
comments electronically should contact Schedule’s Competitive Products List.
consider the matters raised in each
the person identified in the FOR FURTHER DATES: Effective date: February 25, 2015.
docket.
INFORMATION CONTACT section by
2. Pursuant to 39 U.S.C. 505, James F. FOR FURTHER INFORMATION CONTACT:
telephone for advice on filing Elizabeth A. Reed, 202–268–3179.
Callow is appointed to serve as an
alternatives.
officer of the Commission to represent SUPPLEMENTARY INFORMATION: The
FOR FURTHER INFORMATION CONTACT: the interests of the general public in United States Postal Service® hereby
David A. Trissell, General Counsel, at these proceedings (Public gives notice that, pursuant to 39 U.S.C.
202–789–6820. Representative). 3642 and 3632(b)(3), on February 18,
SUPPLEMENTARY INFORMATION: 3. Comments are due no later than 2015, it filed with the Postal Regulatory
February 26, 2015. Commission a Request of the United
Table of Contents
4. The Secretary shall arrange for States Postal Service to Add Priority
I. Introduction publication of this order in the Federal Mail Contract 112 to Competitive
II. Notice of Commission Action Register. Product List. Documents are available at
III. Ordering Paragraphs www.prc.gov, Docket Nos. MC2015–32,
By the Commission.
I. Introduction Ruth Ann Abrams, CP2015–42.
In accordance with 39 U.S.C. 3642 Acting Secretary. Stanley F. Mires,
and 39 CFR 3020.30 et seq., the Postal [FR Doc. 2015–03829 Filed 2–24–15; 8:45 am] Attorney, Federal Requirements.
Service filed a formal request and BILLING CODE 7710–FW–P [FR Doc. 2015–03802 Filed 2–24–15; 8:45 am]
associated supporting information to BILLING CODE 7710–12–P
add Priority Mail Contract 113 to the
competitive product list.1 POSTAL SERVICE
The Postal Service SECURITIES AND EXCHANGE
contemporaneously filed a redacted Product Change—Priority Mail COMMISSION
contract related to the proposed new Negotiated Service Agreement
product under 39 U.S.C. 3632(b)(3) and [Release No. 34–74323; File No. 4–631]
39 CFR 3015.5. Id. Attachment B. AGENCY: Postal ServiceTM.
ACTION: Notice.
Joint Industry Plan; Order Approving
To support its Request, the Postal
the Eighth Amendment to the National
Service filed a copy of the contract, a
SUMMARY: The Postal Service gives Market System Plan To Address
copy of the Governors’ Decision
notice of filing a request with the Postal Extraordinary Market Volatility by
authorizing the product, proposed
Regulatory Commission to add a BATS Exchange, Inc., BATS Y-
changes to the Mail Classification
domestic shipping services contract to Exchange, Inc., Chicago Board
Schedule, a Statement of Supporting
the list of Negotiated Service Options Exchange, Incorporated,
Justification, a certification of
Agreements in the Mail Classification Chicago Stock Exchange, Inc., EDGA
compliance with 39 U.S.C. 3633(a), and
Schedule’s Competitive Products List. Exchange, Inc., EDGX Exchange, Inc.,
an application for non-public treatment
DATES: Effective date: February 25, 2015. Financial Industry Regulatory
of certain materials. It also filed
Authority, Inc., NASDAQ OMX BX, Inc.,
supporting financial workpapers. FOR FURTHER INFORMATION CONTACT:
NASDAQ OMX PHLX LLC, The Nasdaq
Elizabeth A. Reed, 202–268–3179.
II. Notice of Commission Action Stock Market LLC, National Stock
SUPPLEMENTARY INFORMATION: The Exchange, Inc., New York Stock
The Commission establishes Docket United States Postal Service® hereby
Nos. MC2015–33 and CP2015–43 to Exchange LLC, NYSE MKT LLC, and
gives notice that, pursuant to 39 U.S.C. NYSE Arca, Inc.
consider the Request pertaining to the 3642 and 3632(b)(3), on February 18,
proposed Priority Mail Contract 113 2015, it filed with the Postal Regulatory February 19, 2015.
product and the related contract, Commission a Request of the United
respectively. I. Introduction
States Postal Service to Add Priority
The Commission invites comments on On December 24, 2014, Financial
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Mail Contract 113 to Competitive
whether the Postal Service’s filings in Product List. Documents are available at Industry Regulatory Authority, Inc.
the captioned dockets are consistent www.prc.gov, Docket Nos. MC2015–33, (‘‘FINRA’’), on behalf of the following
with the policies of 39 U.S.C. 3632, CP2015–43. parties to the National Market System
Plan: BATS Exchange, Inc., BATS Y-
1 Request of the United States Postal Service to Stanley F. Mires, Exchange, Inc., Chicago Board Options
Add Priority Mail Contract 113 to Competitive Attorney, Federal Requirements.
Product List and Notice of Filing (Under Seal) of
Exchange, Incorporated, Chicago Stock
Unredacted Governors’ Decision, Contract, and [FR Doc. 2015–03804 Filed 2–24–15; 8:45 am] Exchange, Inc., EDGA Exchange, Inc.,
Supporting Data, February 18, 2015 (Request). BILLING CODE 7710–12–P EDGX Exchange, Inc., NASDAQ OMX
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![Federal Register / Vol. 80, No. 37 / Wednesday, February 25, 2015 / Notices 10171
Amendment to the Plan (File No. 4–631) SECURITIES AND EXCHANGE Background
be, and it hereby is, approved. COMMISSION According to OCC, under OCC’s By-
Brent J. Fields, Laws, the novation of confirmed trades
Secretary.
[Release No. 34–74302; File No. SR–OCC– (i.e., transactions in options, futures, or
2014–23] other ‘‘cleared contracts’’ effected
[FR Doc. 2015–03875 Filed 2–24–15; 8:45 am]
through an exchange and submitted to
BILLING CODE 8011–01–P Self-Regulatory Organizations; the OCC for clearing) occurs at the
Options Clearing Corporation; Order ‘‘commencement time’’ for such
Approving Proposed Rule Change To transactions.6 The ‘‘commencement
SECURITIES AND EXCHANGE Clarify That OCC Would not Treat a time’’ for most confirmed trades is when
COMMISSION Futures Transaction That Is an daily position reports are made
Exchange-for-Physical or Block Trade available to clearing members.7
Sunshine Act Meeting as a Non-Competitively Executed However, transactions in certain cleared
Trade if the Exchange on Which Such products and certain types of
Notice is hereby given, pursuant to Trade Is Executed Has Provided OCC transactions, including non-
the provisions of the Government in the With Representations That it Has competitively executed EFPs and Block
Sunshine Act, Public Law 94–409, that Policies or Procedures Requiring That Trades, have delayed commencement
the Securities and Exchange Such Trades Be Executed at times that are tailored to address risks
Commission will hold a Closed Meeting Reasonable Prices and That Such specific to such products or
on Thursday, February 26, 2015 at 2:00 Price Is Validated by the Exchange transactions,8 including, but not limited
p.m. to, those risks presented by off-market
February 19, 2015.
Commissioners, Counsel to the transactions.
Commissioners, the Secretary to the On December 19, 2014, the Options When OCC began clearing EFPs and
Commission, and recording secretaries Clearing Corporation (‘‘OCC’’) filed with Block Trades, it established that the
will attend the Closed Meeting. Certain the Securities and Exchange commencement time for such
Commission (‘‘Commission’’) the transactions is expressly conditioned
staff members who have an interest in
proposed rule change File No. SR–OCC– upon the receipt by OCC of variation
the matters also may be present.
2014–23 pursuant to Section 19(b)(1) of payments due from purchasing and
The General Counsel of the the Securities Exchange Act of 1934 selling clearing members because EFPs
Commission, or her designee, has (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 and Block Trades could be executed
certified that, in her opinion, one or The proposed rule change was away from the market and be executed
more of the exemptions set forth in 5 published for comment in the Federal at other than market prices. These
U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) Register on January 6, 2015.3 The factors were viewed as creating
and 17 CFR 200.402(a)(3), (5), (7), 9(ii) Commission did not receive any heightened exposure to OCC if a
and (10), permit consideration of the comments on the proposed rule change. clearing member defaults on a trade
scheduled matter at the Closed Meeting. This order approves the proposed rule executed at an off-market price and, as
Commissioner Stein, as duty officer, change. a result, Article XII, Section 7 of OCC’s
voted to consider the items listed for the I. Description By-Laws establishes that the
Closed Meeting in closed session, and commencement time for an EFP or
determined that no earlier notice thereof OCC is modifying its By-Laws to add Block Trade is the time of the first
was possible. an interpretation and policy to Section variation payment after the trade is
7 of Article XII of its By-Laws to clarify reported to OCC (typically 9:00 a.m.
The subject matter of the Closed that OCC will not treat a futures Central Time the following business
Meeting will be: transaction that is an exchange-for- day).9 OCC delays its novation of these
Institution and settlement of physical (‘‘EFP’’) 4 or block trade in non-competitively executed futures
injunctive actions; futures (‘‘Block Trade’’) 5 as a non- trades because OCC is bound to pay the
Institution and settlement of competitively executed trade, and first variation settlement amount to the
therefore subject to delayed novation, if counterparty once novation has
administrative proceedings; and
the exchange on which the EFP or Block occurred, and if the agreed-upon price
Other matters relating to enforcement Trade is executed has provided OCC at which the trade is entered differs
proceedings. with representations that it has rules, from the competitive market price, there
At times, changes in Commission policies or procedures requiring that is an increased likelihood that OCC may
priorities require alterations in the such trades be executed at reasonable
scheduling of meeting items. prices and that such prices are validated 6 Cleared Contracts and Commencement Time are
by the exchange. defined terms set forth in Article 1, Section 1 of
For further information and to OCC’s By-Laws.
ascertain what, if any, matters have been 1 15
7 See OCC’s By-Laws Article VI, Section 5.
U.S.C. 78s(b)(1). According to OCC, in a practical sense, however,
added, deleted or postponed, please 2 17 CFR 240.19b–4. most trades are novated upon proper submission to
contact the Office of the Secretary at 3 Securities Exchange Act Release No. OCC for clearing since OCC’s By-Laws, with limited
(202) 551–5400. 73961(December 30, 2014), 80 FR 568 (January 6, exception, do not permit OCC to reject any
asabaliauskas on DSK5VPTVN1PROD with NOTICES
2015) (SR–OCC–2014–23). confirmed trade due to the failure of the purchasing
Dated: February 20, 2015. 4 According to OCC, an EFP is a transaction clearing member to pay any amount due to OCC at
Brent J. Fields, between two parties in which a futures contract on or before the settlement time. See also Securities
a commodity or security is exchanged for the actual Exchange Act Release No. 65990 (December 16,
Secretary. physical good. 2011), 76 FR 79731 (December 22, 2011) (SR–OCC–
[FR Doc. 2015–03947 Filed 2–23–15; 11:15 am] 5 According to OCC, a block trade is a trade 2011–17).
8 Id.
BILLING CODE 8011–01–P involving a large number of shares being traded at
an arranged price between parties, outside of the 9 See Securities Exchange Act Release No. 44727
open markets, in order to lessen the impact of such (August 20, 2001), 66 FR 45351 (August 28, 2001)
a large trade being made public. (SR–OCC–2001–07).
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Document Created: 2015-12-18 13:09:16
Document Modified: 2015-12-18 13:09:16
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 10169 |
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