80 FR 48940 - Consolidated Tape Association; Order Approving the Twenty Third Substantive Amendment to the Second Restatement of the CTA Plan

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 157 (August 14, 2015)

Page Range		48940-48941
FR Document		2015-20147
Federal Register, Volume 80 Issue 157 (Friday, August 14, 2015)
[Federal Register Volume 80, Number 157 (Friday, August 14, 2015)]
[Notices]
[Pages 48940-48941]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-20147]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75660; File No. SR-CTA-2015-02]


Consolidated Tape Association; Order Approving the Twenty Third 
Substantive Amendment to the Second Restatement of the CTA Plan

August 11, 2015.

I. Introduction

    On June 19, 2015, certain participants (``Approving Participants'') 
\1\ of the Consolidated Tape Association (``CTA'') Plan filed with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') pursuant 
to Section 11A of the Securities Exchange Act of 1934 (``Act''),\2\ and 
Rule 608 thereunder,\3\ a proposal to amend the Second Restatement of 
the CTA Plan (``CTA Plan'').\4\ The proposal represents the Twenty 
Third Substantive Amendment to the CTA Plan (``Amendment'').\5\ The 
Amendment proposes to establish a fee that will be charged to a vendor 
or other data redistributor that fails to comply with the CTA Plan 
participants' Consolidated Volume display statement, and related 
requirements. The non-compliance charge seeks to provide incentives for 
data redistributors to comply with the participants' consolidated 
volume requirements. The proposed Amendment was published for comment 
in the Federal Register on July 10, 2015.\6\ No comment letters were 
received in response to the Notice. This order approves the proposed 
Amendment to the Plan.
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    \1\ More than two-thirds of the CTA Plan participants approved 
the amendment. The Approving Participants are: 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., International 
Securities Exchange, LLC, National Stock Exchange, New York Stock 
Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. NASDAQ OMX BX, Inc., 
NASDAQ OMX PHLX, Inc., and the Nasdaq Stock Market LLC are also CTA 
Plan participants (``participants'').
    \2\ 15 U.S.C. 78k-1.
    \3\ 17 CFR 242.608.
    \4\ See Securities Exchange Act Release No. 10787 (May 10, 
1974), 39 FR 17799 (declaring the CTA Plan effective). 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 under the Act, 17 CFR 242.601, and a 
``national market system plan'' under Rule 608 under the Act, 17 CFR 
242.608.
    \5\ The Amendment was originally submitted on an immediately 
effective basis pursuant to Rule 608(b)(3)(i) under Regulation NMS. 
See Letter from Emily Kasparov, Chairman, CTA Plan Operating 
Committee to Brent J. Fields, Secretary, Commission, dated May 18, 
2015. On June 19, 2015, the Approving Participants filed a letter to 
indicate the proposal should be considered under Rule 608(b)(1) and 
Rule 608(b)(2) of Regulation NMS. As a result, the Amendment must be 
approved by the Commission. See Letter from Emily Kasparov, 
Chairman, CTA Plan Operating Committee to Brent J. Fields, 
Secretary, Commission, dated June 17, 2015. The Amendment was 
originally designated as the Twenty Second Charges Amendment to the 
Plan. The Commission noted that the proposal is the Twenty Third 
Substantive Amendment to the Plan. See Notice, infra note 6, 80 FR 
at 39822 at note 5. On August 7, 2015, the Approving Participants 
filed a letter to indicate the proposal should be designated as the 
Twenty Third Substantive Amendment of the Plan. See Letter from 
Emily Kasparov, Chairman, CTA Plan Operating Committee to Brent J. 
Fields, Secretary, Commission, dated August 6, 2015 (``August 6 
Letter'').
    \6\ See Securities Exchange Act Release No. 75363 (July 6, 
2015), 80 FR 39821 (``Notice'').
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II. Description of the Proposal

    Historically, the Plan participants have not applied device fees to 
devices that receive consolidated volume (i.e., aggregate volume for 
trades taking place on all market centers under the Plan) in displays 
that do not also include CTA Plan prices or CQ Plan quotation 
information. The participants do not plan to change this policy.
    However, some data redistributors include consolidated volume in 
displays of unconsolidated last sale prices and/or unconsolidated bid-
asked quotes, such as displays of one exchange's trade prices and 
quotes. The Participants believe that such displays, whether displayed 
internally or externally, could mislead investors regarding the nature 
of the information they are viewing. A significant number of data users 
receive proprietary trade prices and quotes. Unless the data users 
understand the content being displayed, they could mistakenly think 
that they are seeing consolidated trades and quotes because the volume 
is consolidated volume.
    To make the displays transparent and less likely to mislead, data 
redistributors that include consolidated volume in displays of 
unconsolidated prices and quotes must incorporate into those displays 
the following statement (or a close iteration of the statement that the 
network administrator(s) have approved): ``Realtime quote and/or trade 
prices are not sourced from all markets.''
    A data redistributor must also assure that any person included in 
the redistribution chain starting with the data redistributor places 
the statement in any such display that it provides. The statement must 
be clearly visible to the end users so that they understand the 
differences in the sources of the data. In addition, data 
redistributors need to assure that they, and any person or entity 
included in the redistribution chain starting with them, clearly 
incorporate the display statement into any advertisement, sales 
literature or other material displaying CTA Consolidated Volume 
alongside unconsolidated prices or quotes. These requirements apply to 
both real-time and delayed displays of consolidated volume.
    In order to ensure compliance with these requirements, all 
recipients of the CTA last sale price datafeed (whether directly or 
indirectly) must submit a declaration. The Amendment will require firms 
that include consolidated volume in displays of unconsolidated prices 
and quotes to submit to NYSE a screen print of the displays, which 
include the display statement. The CTA Administrator will work with 
firms to facilitate their compliance.\7\
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    \7\ A firm with access to CTA consolidated volume data must 
submit the declaration and, if applicable, the screen print within 
120 days from the effective date of the amendment or within 30 days 
of the effective date of the firm's market data agreement with the 
participants that governs its receipt of the CTA datafeed (its 
``Vendor Agreement''). Thereafter, each firm must submit its 
declaration and, if applicable, its screen print annually by the 
31st day of January.
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    The Approving Participants' representatives met with SIFMA and the 
CTA Plan's Advisory Committee to discuss the consolidated volume 
requirements and responded to their questions. They shortened the 
display statement in response to comments and made clear that a 
datafeed recipient that provides an exchange's trading volume with 
displays of the exchange's trade prices and quotes is not subject to 
the display requirement.

[[Page 48941]]

    In order to motivate data recipients to comply with the display 
statement requirements, including the requisite declarations and screen 
submissions, the Amendment establishes a non-compliance fee for each 
month of non-compliance. For each of Network A and Network B, the 
monthly fee is $3,000.
    A datafeed recipient must submit the required screen prints upon 
the Amendment's implementation date \8\ or within thirty days of the 
effective date of its Vendor Agreement. It must submit those screen 
prints (including previously provided, new, or changed screen prints) 
annually by the 31st day of January.
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    \8\ The Approving Participants indicated that they will give 
notice of the compliance fee to all data redistributors no less than 
120 days prior to its implementation. See August 6 Letter.
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    The non-compliance charges will be assessed against a data 
redistributor for each month in which it fails to provide the 
declaration or a copy of a Consolidated Volume screen print with the 
required display statement in a timely manner. The charge will also be 
assessed against a data redistributor each month for non-compliance by 
persons in the redistribution chain starting with the data 
redistributor where such persons have not entered into an applicable 
agreement with CTA.
    The Approving Participants expect the non-compliance charges to 
provide incentives for data redistributors to comply with the 
consolidated volume requirements; they do not view the non-compliance 
fee as establishing a new revenue source. Rather, they hope it 
encourages all data redistributors to submit their declarations and 
screen prints (where applicable) in a timely fashion. They hope that 
the fee will motivate non-compliant redistributors to adopt the same 
practices that the majority of redistributors follow.
    The Approving Participants included delayed displays of 
consolidated volume in the Amendment to make it clear that if a data 
redistributor accompanies displays of real-time unconsolidated prices 
and quotes with delayed consolidated volume, it is subject to the new 
requirement.

III. Discussion

    After careful review, the Commission finds that the proposed 
Amendment to the Plan is consistent with the requirements of the Act 
and the rules and regulations thereunder,\9\ and, in particular, 
Section 11A(a)(1) of the Act \10\ and Rule 608 thereunder \11\ in that 
it 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.
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    \9\ The Commission has considered the proposed amendment's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
    \10\ 15 U.S.C. 78k-1(a)(1).
    \11\ 17 CFR 240.608.
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    The proposal is consistent with Section 11A(a)(1)(C)(iii) of the 
Act,\12\ which 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 assure the availability to 
brokers, dealers, and investors of information with respect to 
quotations and transactions in securities. These goals are furthered by 
the proposed changes to establish a fee that will be charged to a 
vendor or other data redistributor that fails to comply with the CTA 
Plan participants' Consolidated Volume display statement, and related 
requirements. Consolidated data continues to provide a great deal of 
value for investors in assessing the current market for trades and the 
quality of the execution they receive for their trades. The Commission 
believes it is important for market participants to know when 
Consolidated Volume is displayed alongside unconsolidated prices and 
quotes by data redistributors. The Consolidated Volume display policy 
should provide greater transparency on the source of the data for users 
of displays that contain both consolidated and proprietary data from 
redistributors. Additionally, the non-compliance charge should provide 
incentives for data redistributors to comply with the Consolidated 
Volume requirement.
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    \12\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act,\13\ 
and the rules thereunder, that the proposed Amendment to the CTA Plan 
(File No. SR-CTA-2015-02) is approved.
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    \13\ 15 U.S.C. 78k-1.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(27).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-20147 Filed 8-13-15; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 80, No. 157 / Friday, August 14, 2015 / Notices 48941

In order to motivate data recipients to Act 10 and Rule 608 thereunder 11 in that SECURITIES AND EXCHANGE
comply with the display statement it is necessary or appropriate in the COMMISSION
requirements, including the requisite public interest, for the protection of
declarations and screen submissions, investors and the maintenance of fair [Release No. 34–75655; File No. SR–FINRA–
the Amendment establishes a non- and orderly markets, to remove 2015–029]
compliance fee for each month of non- impediments to, and perfect the
compliance. For each of Network A and mechanisms of, a national market Self-Regulatory Organizations;
Network B, the monthly fee is $3,000. system. Financial Industry Regulatory
A datafeed recipient must submit the The proposal is consistent with Authority, Inc.; Notice of Filing of a
required screen prints upon the Section 11A(a)(1)(C)(iii) of the Act,12 Proposed Rule Change To Adopt
Amendment’s implementation date 8 or FINRA Rule 3210 (Accounts At Other
which sets forth Congress’ finding that
within thirty days of the effective date Broker-Dealers and Financial
it is in the public interest and
of its Vendor Agreement. It must submit Institutions) in the Consolidated FINRA
appropriate for the protection of Rulebook
those screen prints (including
investors and the maintenance of fair
previously provided, new, or changed
screen prints) annually by the 31st day and orderly markets to assure the August 10, 2015.
of January. availability to brokers, dealers, and Pursuant to Section 19(b)(1) of the
investors of information with respect to Securities Exchange Act of 1934 (‘‘Act’’
The non-compliance charges will be quotations and transactions in
assessed against a data redistributor for or ‘‘SEA’’) 1 and Rule 19b–4
securities. These goals are furthered by thereunder,2 notice is hereby given that
each month in which it fails to provide
the proposed changes to establish a fee on July 31, 2015, Financial Industry
the declaration or a copy of a
Consolidated Volume screen print with that will be charged to a vendor or other Regulatory Authority, Inc. (‘‘FINRA’’)
the required display statement in a data redistributor that fails to comply filed with the Securities and Exchange
timely manner. The charge will also be with the CTA Plan participants’ Commission (‘‘SEC’’ or ‘‘Commission’’)
assessed against a data redistributor Consolidated Volume display statement, the proposed rule change as described
each month for non-compliance by and related requirements. Consolidated in Items I, II, and III below, which Items
persons in the redistribution chain data continues to provide a great deal of have been substantially prepared by
starting with the data redistributor value for investors in assessing the FINRA. The Commission is publishing
where such persons have not entered current market for trades and the quality this notice to solicit comments on the
into an applicable agreement with CTA. of the execution they receive for their proposed rule change from interested
trades. The Commission believes it is persons.
The Approving Participants expect
the non-compliance charges to provide important for market participants to I. Self-Regulatory Organization’s
incentives for data redistributors to know when Consolidated Volume is Statement of the Terms of Substance of
comply with the consolidated volume displayed alongside unconsolidated the Proposed Rule Change
requirements; they do not view the non- prices and quotes by data redistributors.
compliance fee as establishing a new The Consolidated Volume display FINRA is proposing to adopt FINRA
revenue source. Rather, they hope it policy should provide greater Rule 3210 (Accounts at Other Broker-
encourages all data redistributors to transparency on the source of the data Dealers and Financial Institutions) in
submit their declarations and screen for users of displays that contain both the Consolidated FINRA Rulebook, and
prints (where applicable) in a timely consolidated and proprietary data from to delete NASD Rule 3050, Incorporated
fashion. They hope that the fee will redistributors. Additionally, the non- NYSE Rules 407 and 407A and
motivate non-compliant redistributors compliance charge should provide Incorporated NYSE Rule Interpretations
to adopt the same practices that the incentives for data redistributors to 407/01 and 407/02.
majority of redistributors follow. comply with the Consolidated Volume The text of the proposed rule change
The Approving Participants included requirement. is available on FINRA’s Web site at
delayed displays of consolidated http://www.finra.org, at the principal
volume in the Amendment to make it IV. Conclusion office of FINRA and at the
clear that if a data redistributor It is therefore ordered, pursuant to Commission’s Public Reference Room.
accompanies displays of real-time Section 11A of the Act,13 and the rules II. Self-Regulatory Organization’s
unconsolidated prices and quotes with thereunder, that the proposed Statement of the Purpose of, and
delayed consolidated volume, it is Amendment to the CTA Plan (File No. Statutory Basis for, the Proposed Rule
subject to the new requirement. SR–CTA–2015–02) is approved. Change
III. Discussion For the Commission, by the Division of In its filing with the Commission,
After careful review, the Commission Trading and Markets, pursuant to delegated FINRA included statements concerning
finds that the proposed Amendment to authority.14 the purpose of and basis for the
the Plan is consistent with the Jill M. Peterson, proposed rule change and discussed any
requirements of the Act and the rules Assistant Secretary. comments it received on the proposed
and regulations thereunder,9 and, in rule change. The text of these statements
asabaliauskas on DSK5VPTVN1PROD with NOTICES

[FR Doc. 2015–20147 Filed 8–13–15; 8:45 am]
particular, Section 11A(a)(1) of the BILLING CODE 8011–01–P may be examined at the places specified
in Item IV below. FINRA has prepared
8 The Approving Participants indicated that they summaries, set forth in sections A, B,
will give notice of the compliance fee to all data 10 15 U.S.C. 78k–1(a)(1). and C below, of the most significant
redistributors no less than 120 days prior to its 11 17 aspects of such statements.
CFR 240.608.
implementation. See August 6 Letter.
12 15 U.S.C. 78k–1(a)(1)(C)(iii).
9 The Commission has considered the proposed
13 15 U.S.C. 78k–1. 1 15
amendment’s impact on efficiency, competition, U.S.C. 78s(b)(1).
and capital formation. 15 U.S.C. 78c(f). 14 17 CFR 200.30–3(a)(27). 2 17 CFR 240.19b–4.

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Document Created: 2018-02-23 10:59:11
Document Modified: 2018-02-23 10:59:11
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 48940