80 FR 58796 - Joint Industry Plan; Order Approving Amendment No. 2 to the National Market System Plan Governing the Process of Selecting a Plan Processor and Developing a Plan for the Consolidated Audit Trail by BATS Exchange, Inc., BATS-Y Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, ISE Gemini, LLC, Miami International Securities Exchange LLC, 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 189 (September 30, 2015)
Federal Register Volume 80, Issue 189 (September 30, 2015)
| Page Range | 58796-58797 | |
| FR Document | 2015-24717 |
[Federal Register Volume 80, Number 189 (Wednesday, September 30, 2015)] [Notices] [Pages 58796-58797] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-24717] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75980; File No. 4-668] Joint Industry Plan; Order Approving Amendment No. 2 to the National Market System Plan Governing the Process of Selecting a Plan Processor and Developing a Plan for the Consolidated Audit Trail by BATS Exchange, Inc., BATS-Y Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, ISE Gemini, LLC, Miami International Securities Exchange LLC, 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. September 24, 2015. I. Introduction On March 6, 2015, BATS Exchange, Inc., BATS-Y Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial Industry Regulatory Authority, Inc., International Securities Exchange, LLC, ISE Gemini, LLC, Miami International Securities Exchange LLC, 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. (collectively, ``SROs'' or ``Participants'') filed with the Securities and Exchange Commission (``Commission'' or ``SEC'') pursuant to Section 11A of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 608 thereunder,\2\ an amendment (``Amendment No. 2'') to the National Market System (``NMS'') Plan Governing the Process of Selecting a Plan Processor and Developing a Plan for the Consolidated Audit Trail (``Selection Plan'').\3\ Amendment No. 2 was published for comment in the Federal Register on June 23, 2015.\4\ The Commission received no comment letters on this proposal. This Order approves Amendment No. 2 to the Selection Plan. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78k-1. \2\ 17 CFR 242.608. \3\ The Selection Plan is an NMS Plan approved by the Commission pursuant to Section 11A of the Act and Rule 608 thereunder. See Securities Exchange Act Release No. 71596 (Feb. 21, 2014), 79 FR 11152 (Feb. 27, 2014) (``Order Approving Selection Plan''); see also Securities Exchange Act Release No. 70892 (Nov. 15, 2013), 78 FR 69910 (Nov. 21, 2013) (``Notice of Selection Plan''). \4\ See Securities Exchange Act Release No. 75193 (June 17, 2015), 80 FR 36006 (June 23, 2015) (``Notice of Amendment No. 2''). --------------------------------------------------------------------------- II. Background and Description of the Proposal A. Background The Commission adopted Rule 613 on July 11, 2012, to require the SROs to jointly submit an NMS plan to create, implement, and maintain a consolidated audit trail (``CAT NMS Plan'').\5\ In response, the SROs engaged in a request for proposal (``RFP'') process to help them develop an NMS Plan proposal and solicit bids (``Bids'') for the role of Plan Processor \6\ to build, operate, administer, and maintain the consolidated audit trail. The Selection Plan, which was approved by the Commission on February 21, 2014, sets forth the process by which the Participants will review, evaluate, and narrow down the Bids submitted in response to the RFP to ``Shortlisted Bids,'' and ultimately select the Plan Processor following Commission approval of the proposed CAT NMS Plan.\7\ Amendment No.1 to the Selection Plan, which the Commission approved on June 17, 2015, among other things, permits the SROs to vote to narrow the set of Shortlisted Bids to an even shorter list prior to Commission approval of the proposed CAT NMS Plan.\8\ The Selection Plan, as amended, provides that the SROs' Selection Committee will vote to select the Plan Processor from among the remaining bidders, using a two-round voting process, within two months of Commission approval of the proposed CAT NMS Plan.\9\ --------------------------------------------------------------------------- \5\ Securities Exchange Act Release No. 67457 (July 18, 2012), 77 FR 45722 (Aug. 1, 2012). \6\ Unless otherwise noted, capitalized terms are used as defined in Rule 613, in the Selection Plan, or in this Order. \7\ See Order Approving Selection Plan, supra note 3. \8\ See Securities Exchange Act Release No. 75192, 80 FR 36028 (June 23, 2015) (``Order Approving Amendment No. 1''). \9\ See Order Approving Selection Plan, supra note 3; Order Approving Amendment No. 1, supra note 8. --------------------------------------------------------------------------- B. Description of the Proposal Amendment No. 1 included a provision providing that no SRO shall vote in the process narrowing the set of Shortlisted Bidders if a Bid submitted by the SRO or an Affiliate of the SRO is a Shortlisted Bid or if the SRO or its Affiliate is included as a material subcontractor as part of a Bid (a [[Page 58797]] ``Bidding Participant'' \10\).\11\ The same recusal provision exists in the second--but not the first--round of a two-round voting process by the Selection Committee \12\ to select the Plan Processor from among the Shortlisted Bidders.\13\ The SROs state that they included the recusal provision to address potential conflicts of interest in selecting the Plan Processor. --------------------------------------------------------------------------- \10\ The Selection Plan defines ``Bidding Participant'' as a Participant that: (1) Submits a Bid; (2) is an Affiliate of an entity that submits a Bid; or (3) is included, or is an Affiliate of an entity that is included, as a Material Subcontractor as part of a Bid. See Notice of Selection Plan, supra note 3, Exhibit A, at 2. \11\ See Order Approving Amendment No. 1, supra note 8. \12\ The Selection Committee is composed of one senior officer from each Participant. See Section V.A of the Selection Plan. \13\ This two-round voting process would take place after any further narrowing of the Shortlisted Bids, if such narrowing were to occur pursuant to Amendment No. 1. See Order Approving Amendment No. 1, supra note 8, at 36029 & n.21. --------------------------------------------------------------------------- In Amendment No. 2, the SROs propose to modify the Selection Plan to require that an SRO that is a Bidding Participant be recused from voting in any round to select the Plan Processor in which a Bid from or including such Bidding Participant or its Affiliate is being considered.\14\ Amendment No. 2 therefore would extend to the first selection round the recusal requirement that is currently only in place for the second selection round and the vote, if any, that narrows the list of Shortlisted Bidders. --------------------------------------------------------------------------- \14\ Notice of Amendment No. 2, supra note 4, at 36007. --------------------------------------------------------------------------- The SROs reiterate that the Selection Plan balances the competing goals of ensuring all SROs participate meaningfully in the process of developing the CAT NMS Plan and mitigating potential conflicts of interest related to the involvement of a bidding SRO through information barriers and the voting limitations.\15\ The SROs state that, based on their experience with these existing measures, the Selection Plan adequately addresses the potential conflicts of interest related to bidding SROs.\16\ Nonetheless, the SROs explain that requiring recusal in all rounds of the selection process will further the SROs' goal of ensuring the fair and impartial consideration and selection of the CAT Plan Processor.\17\ --------------------------------------------------------------------------- \15\ Id. \16\ Id. \17\ Id. --------------------------------------------------------------------------- III. Discussion After careful review, the Commission finds that Amendment No. 2 is appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, and to remove impediments to, and perfect the mechanisms of, a national market system. By extending the aforementioned recusal requirement to both selection rounds, Amendment No. 2 adds an additional procedural safeguard that is designed to further the fairness and impartiality of the Plan Processor selection. IV. Conclusion For the reasons discussed above, the Commission finds that Amendment No. 2 is appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, and to remove impediments to, and perfect the mechanisms of, a national market system, or otherwise in furtherance of the purposes of the Act. It is therefore ordered, pursuant to Section 11A of the Act,\18\ and the rules thereunder, that Amendment No. 2 to the Selection Plan be, and it hereby is, approved. --------------------------------------------------------------------------- \18\ 15 U.S.C. 78k-1. By the Commission. Robert W. Errett, Deputy Secretary. [FR Doc. 2015-24717 Filed 9-29-15; 8:45 am] BILLING CODE 8011-01-P
![58796 Federal Register / Vol. 80, No. 189 / Wednesday, September 30, 2015 / Notices
Commission process and review your SECURITIES AND EXCHANGE Federal Register on June 23, 2015.4 The
comments more efficiently, please use COMMISSION Commission received no comment
only one method. The Commission will letters on this proposal. This Order
[Release No. 34–75980; File No. 4–668]
post all comments on the Commission’s approves Amendment No. 2 to the
Internet Web site (http://www.sec.gov/ Joint Industry Plan; Order Approving Selection Plan.
rules/sro.shtml). Copies of the Amendment No. 2 to the National II. Background and Description of the
submission, all subsequent Market System Plan Governing the Proposal
amendments, all written statements Process of Selecting a Plan Processor
with respect to the proposed rule and Developing a Plan for the A. Background
change that are filed with the Consolidated Audit Trail by BATS The Commission adopted Rule 613 on
Commission, and all written Exchange, Inc., BATS–Y Exchange, July 11, 2012, to require the SROs to
communications relating to the Inc., BOX Options Exchange LLC, C2 jointly submit an NMS plan to create,
proposed rule change between the Options Exchange, Incorporated, implement, and maintain a consolidated
Commission and any person, other than Chicago Board Options Exchange, audit trail (‘‘CAT NMS Plan’’).5 In
those that may be withheld from the Incorporated, Chicago Stock response, the SROs engaged in a request
public in accordance with the Exchange, Inc., EDGA Exchange, Inc., for proposal (‘‘RFP’’) process to help
EDGX Exchange, Inc., Financial them develop an NMS Plan proposal
provisions of 5 U.S.C. 552, will be
Industry Regulatory Authority, Inc., and solicit bids (‘‘Bids’’) for the role of
available for Web site viewing and
International Securities Exchange, Plan Processor 6 to build, operate,
printing in the Commission’s Public administer, and maintain the
Reference Section, 100 F Street NE., LLC, ISE Gemini, LLC, Miami
International Securities Exchange LLC, consolidated audit trail. The Selection
Washington, DC 20549 on official Plan, which was approved by the
NASDAQ OMX BX, Inc., NASDAQ OMX
business days between 10 a.m. and 3 Commission on February 21, 2014, sets
PHLX LLC, The NASDAQ Stock Market
p.m. Copies of the filing will also be forth the process by which the
LLC, National Stock Exchange, Inc.,
available for inspection and copying at New York Stock Exchange LLC, NYSE Participants will review, evaluate, and
the NYSE’s principal office and on its MKT LLC, and NYSE Arca, Inc. narrow down the Bids submitted in
Internet Web site at www.nyse.com. All response to the RFP to ‘‘Shortlisted
comments received will be posted September 24, 2015. Bids,’’ and ultimately select the Plan
without change; the Commission does I. Introduction Processor following Commission
not edit personal identifying approval of the proposed CAT NMS
information from submissions. You On March 6, 2015, BATS Exchange, Plan.7 Amendment No.1 to the Selection
should submit only information that Inc., BATS–Y Exchange, Inc., BOX Plan, which the Commission approved
you wish to make available publicly. All Options Exchange LLC, C2 Options on June 17, 2015, among other things,
submissions should refer to File Exchange, Incorporated, Chicago Board permits the SROs to vote to narrow the
Options Exchange, Incorporated, set of Shortlisted Bids to an even shorter
Number SR–NYSEArca–2015–79 and
Chicago Stock Exchange, Inc., EDGA list prior to Commission approval of the
should be submitted on or before
Exchange, Inc., EDGX Exchange, Inc., proposed CAT NMS Plan.8 The
October 21, 2015.
Financial Industry Regulatory Selection Plan, as amended, provides
For the Commission, by the Division of Authority, Inc., International Securities that the SROs’ Selection Committee will
Trading and Markets, pursuant to delegated Exchange, LLC, ISE Gemini, LLC, Miami vote to select the Plan Processor from
authority.14 International Securities Exchange LLC, among the remaining bidders, using a
Robert W. Errett, NASDAQ OMX BX, Inc., NASDAQ two-round voting process, within two
Deputy Secretary. OMX PHLX LLC, The NASDAQ Stock months of Commission approval of the
[FR Doc. 2015–24715 Filed 9–29–15; 8:45 am]
Market LLC, National Stock Exchange, proposed CAT NMS Plan.9
Inc., New York Stock Exchange LLC,
BILLING CODE 8011–01–P
NYSE MKT LLC, and NYSE Arca, Inc. B. Description of the Proposal
(collectively, ‘‘SROs’’ or ‘‘Participants’’) Amendment No. 1 included a
filed with the Securities and Exchange provision providing that no SRO shall
Commission (‘‘Commission’’ or ‘‘SEC’’) vote in the process narrowing the set of
pursuant to Section 11A of the Shortlisted Bidders if a Bid submitted
Securities Exchange Act of 1934 by the SRO or an Affiliate of the SRO
(‘‘Act’’),1 and Rule 608 thereunder,2 an is a Shortlisted Bid or if the SRO or its
amendment (‘‘Amendment No. 2’’) to Affiliate is included as a material
the National Market System (‘‘NMS’’) subcontractor as part of a Bid (a
Plan Governing the Process of Selecting
4 See Securities Exchange Act Release No. 75193
a Plan Processor and Developing a Plan
(June 17, 2015), 80 FR 36006 (June 23, 2015)
for the Consolidated Audit Trail (‘‘Notice of Amendment No. 2’’).
(‘‘Selection Plan’’).3 Amendment No. 2 5 Securities Exchange Act Release No. 67457 (July
was published for comment in the 18, 2012), 77 FR 45722 (Aug. 1, 2012).
6 Unless otherwise noted, capitalized terms are
1 15 U.S.C. 78k–1. used as defined in Rule 613, in the Selection Plan,
mstockstill on DSK4VPTVN1PROD with NOTICES
2 17 CFR 242.608. or in this Order.
3 The Selection Plan is an NMS Plan approved by 7 See Order Approving Selection Plan, supra note
the Commission pursuant to Section 11A of the Act 3.
8 See Securities Exchange Act Release No. 75192,
and Rule 608 thereunder. See Securities Exchange
Act Release No. 71596 (Feb. 21, 2014), 79 FR 11152 80 FR 36028 (June 23, 2015) (‘‘Order Approving
(Feb. 27, 2014) (‘‘Order Approving Selection Plan’’); Amendment No. 1’’).
see also Securities Exchange Act Release No. 70892 9 See Order Approving Selection Plan, supra note
(Nov. 15, 2013), 78 FR 69910 (Nov. 21, 2013) 3; Order Approving Amendment No. 1, supra note
14 17 CFR 200.30–3(a)(12). (‘‘Notice of Selection Plan’’). 8.
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![Federal Register / Vol. 80, No. 189 / Wednesday, September 30, 2015 / Notices 58797
‘‘Bidding Participant’’ 10).11 The same maintenance of fair and orderly markets, I. Self-Regulatory Organization’s
recusal provision exists in the second— and to remove impediments to, and Statement of the Terms of Substance of
but not the first—round of a two-round perfect the mechanisms of, a national the Proposed Rule Change
voting process by the Selection market system. By extending the The Exchange proposes to reflect a
Committee 12 to select the Plan aforementioned recusal requirement to change to the secondary benchmark
Processor from among the Shortlisted both selection rounds, Amendment No. index applicable to shares of the PIMCO
Bidders.13 The SROs state that they 2 adds an additional procedural Global Advantage® Inflation-Linked
included the recusal provision to safeguard that is designed to further the Bond Active Exchange-Traded Fund.
address potential conflicts of interest in fairness and impartiality of the Plan The Fund is currently listed and traded
selecting the Plan Processor. Processor selection. on the Exchange under NYSE Arca
In Amendment No. 2, the SROs Equities Rule 8.600. The text of the
IV. Conclusion
propose to modify the Selection Plan to proposed rule change is available on the
require that an SRO that is a Bidding For the reasons discussed above, the
Exchange’s Web site at www.nyse.com,
Participant be recused from voting in Commission finds that Amendment No.
at the principal office of the Exchange,
any round to select the Plan Processor 2 is appropriate in the public interest,
and at the Commission’s Public
in which a Bid from or including such for the protection of investors and the
Reference Room.
Bidding Participant or its Affiliate is maintenance of fair and orderly markets,
being considered.14 Amendment No. 2 and to remove impediments to, and II. Self-Regulatory Organization’s
therefore would extend to the first perfect the mechanisms of, a national Statement of the Purpose of, and
selection round the recusal requirement market system, or otherwise in Statutory Basis for, the Proposed Rule
that is currently only in place for the furtherance of the purposes of the Act. Change
second selection round and the vote, if It is therefore ordered, pursuant to In its filing with the Commission, the
any, that narrows the list of Shortlisted Section 11A of the Act,18 and the rules self-regulatory organization included
Bidders. thereunder, that Amendment No. 2 to statements concerning the purpose of,
The SROs reiterate that the Selection the Selection Plan be, and it hereby is, and basis for, the proposed rule change
Plan balances the competing goals of approved. and discussed any comments it received
ensuring all SROs participate By the Commission. on the proposed rule change. The text
meaningfully in the process of Robert W. Errett, of those statements may be examined at
developing the CAT NMS Plan and the places specified in Item IV below.
Deputy Secretary.
mitigating potential conflicts of interest The Exchange has prepared summaries,
[FR Doc. 2015–24717 Filed 9–29–15; 8:45 am]
related to the involvement of a bidding set forth in sections A, B, and C below,
SRO through information barriers and BILLING CODE 8011–01–P
of the most significant parts of such
the voting limitations.15 The SROs state statements.
that, based on their experience with
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
these existing measures, the Selection
COMMISSION Statement of the Purpose of, and the
Plan adequately addresses the potential
conflicts of interest related to bidding [Release No. 34–75979; File No. SR– Statutory Basis for, the Proposed Rule
SROs.16 Nonetheless, the SROs explain NYSEArca–2015–80] Change
that requiring recusal in all rounds of 1. Purpose
the selection process will further the Self-Regulatory Organizations; NYSE
SROs’ goal of ensuring the fair and Arca, Inc.; Notice of Filing and The Commission has approved a
impartial consideration and selection of Immediate Effectiveness of Proposed proposed rule change relating to listing
the CAT Plan Processor.17 Rule Change Relating to a Change to and trading on the Exchange of shares
the Secondary Benchmark Index (‘‘Shares’’) of the PIMCO Global
III. Discussion Applicable to Shares of the PIMCO Advantage® Inflation-Linked Bond
After careful review, the Commission Global Advantage® Inflation-Linked Active Exchange-Traded Fund (‘‘Fund’’)
finds that Amendment No. 2 is Bond Active Exchange-Traded Fund under NYSE Arca Equities Rule 8.600,4
appropriate in the public interest, for which governs the listing and trading of
September 24, 2015. Managed Fund Shares.5 The Shares are
the protection of investors and the
Pursuant to Section 19(b)(1) 1 of the
10 The Selection Plan defines ‘‘Bidding Securities Exchange Act of 1934 (the 4 See Securities Exchange Act Release No. 66381
Participant’’ as a Participant that: (1) Submits a Bid; ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 (February 10, 2012), 77 FR 9281 (February 16, 2012)
(2) is an Affiliate of an entity that submits a Bid; notice is hereby given that, on (SR–NYSEArca–2012–09) (notice of filing of
or (3) is included, or is an Affiliate of an entity that proposed rule change relating to listing and trading
September 11, 2015, NYSE Arca, Inc. of Shares of the Fund on the Exchange) (‘‘Prior
is included, as a Material Subcontractor as part of
a Bid. See Notice of Selection Plan, supra note 3, (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed Notice’’); Securities Exchange Act Release No.
Exhibit A, at 2. with the Securities and Exchange 66670 (March 28, 2012), 77 FR 20087 (April 3,
11 See Order Approving Amendment No. 1, supra Commission (the ‘‘Commission’’) the 2012) (SR–NYSEArca–2012–09) (order approving
note 8. listing and trading of Shares of the Fund on the
proposed rule change as described in Exchange) (‘‘Prior Order’’ and, together with the
12 The Selection Committee is composed of one
Items I and II below, which Items have Prior Notice, the ‘‘Prior Release’’).
senior officer from each Participant. See Section
V.A of the Selection Plan. been prepared by the self-regulatory 5 A Managed Fund Share is a security that
13 This two-round voting process would take organization. The Commission is represents an interest in an investment company
registered under the Investment Company Act of
mstockstill on DSK4VPTVN1PROD with NOTICES
place after any further narrowing of the Shortlisted publishing this notice to solicit 1940 (15 U.S.C. 80a–1) (‘‘1940 Act’’) organized as
Bids, if such narrowing were to occur pursuant to comments on the proposed rule change an open-end investment company or similar entity
Amendment No. 1. See Order Approving
Amendment No. 1, supra note 8, at 36029 & n.21.
from interested persons. that invests in a portfolio of securities selected by
14 Notice of Amendment No. 2, supra note 4, at
its investment adviser consistent with its
investment objectives and policies. In contrast, an
36007. 18 15 U.S.C. 78k–1. open-end investment company that issues
15 Id. 1 15 U.S.C.78s(b)(1). Investment Company Units, listed and traded on
16 Id. 2 15 U.S.C. 78a.
the Exchange under NYSE Arca Equities Rule
17 Id. 3 17 CFR 240.19b–4. Continued
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Document Created: 2015-12-15 09:31:22
Document Modified: 2015-12-15 09:31:22
| 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 58796 |
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