80 FR 66600 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule To Adopt CHX SNAP Execution Fees
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 209 (October 29, 2015)
Federal Register Volume 80, Issue 209 (October 29, 2015)
| Page Range | 66600-66603 | |
| FR Document | 2015-27519 |
[Federal Register Volume 80, Number 209 (Thursday, October 29, 2015)] [Notices] [Pages 66600-66603] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-27519] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76249; File No. SR-CHX-2015-06] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule To Adopt CHX SNAP Execution Fees October 23, 2015. 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 October 19, 2015, the Chicago Stock Exchange, Inc. (``CHX'' or ``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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CHX proposes to amend its Schedule of Fees and Assessments (the ``Fee Schedule'') to adopt CHX SNAP execution fees. The text of this proposed rule change is available on the Exchange's Web site at (www.chx.com) and in the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the CHX included statements concerning the purpose of and basis for the proposed rule changes and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The CHX has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to adopt and amend fees for CHX SNAP (``SNAP''). On October 6, 2015, the SEC approved a proposed rule change to adopt SNAP, an intra-day, sub-second and on-demand auction service.\3\ A SNAP Cycle \4\ is comprised of the following five stages: --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 76087 (October 6, 2015), 80 FR 61540 (October 13, 2015); see also Securities Exchange Act Release No. 75346 (July 1, 2015), 80 FR 39172 (July 8, 2015) (SR-CHX-2015-03). The approved rule change is not yet operative and will become operative with two weeks' notice by the Exchange to its Participants. \4\ See supra note 3; see also CHX Article 18, Rule 1(b). ---------------------------------------------------------------------------Stage one--Initiating the SNAP Cycle; Stage two--SNAP Order Acceptance Period; Stage three--Pricing and Satisfaction Period; Stage four--Order Matching Period; and Stage five--Transition to the Open Trading State.\5\ --------------------------------------------------------------------------- \5\ See supra note 3; see also CHX Article 1, Rule 1(qq). --------------------------------------------------------------------------- In sum, SNAP Cycles will never be scheduled by the Exchange and will always be driven by market demand for bulk trading in a subject security. The key features of a SNAP Cycle are as follows: \6\ --------------------------------------------------------------------------- \6\ A complete description of SNAP may be found in the Approval Order and associated rule filing. See supra note 3. --------------------------------------------------------------------------- The entire SNAP Cycle is designed to be completed in less than one second. SNAP Cycles could occur numerous times in a subject security during the regular trading session only.\7\ --------------------------------------------------------------------------- \7\ CHX Article 20, Rule 1(b) provides that the ``regular trading session--shall begin at 8:30 a.m. and shall end at 3:00 p.m. each day for all securities.'' All times are in central time, unless noted otherwise. --------------------------------------------------------------------------- [[Page 66601]] Order cancellations would be prohibited during a SNAP Cycle. Only limit orders marked Start SNAP \8\ that meet minimum size, price and time of receipt requirements could initiate a SNAP Cycle. --------------------------------------------------------------------------- \8\ See supra note 3; CHX Article 1, Rule 2(h)(1). --------------------------------------------------------------------------- [cir] During the stage one Initiating the SNAP Cycle, automated trading in the subject security on the Exchange would be suspended and remain suspended for the duration of the SNAP Cycle; provided, however, automated trading in the subject security may continue to occur simultaneously elsewhere in the national market system. During the stage two SNAP Order Acceptance Period, the Exchange will transition precedent SNAP Eligible Orders \9\ to the SNAP CHX book and accept new SNAP Eligible Orders for a randomized time period for inclusion on the SNAP CHX book.\10\ During the stage three Pricing and Satisfaction Period, the Exchange will attempt to ascertain a single auction price (i.e., ``SNAP Price'') \11\ from SNAP Eligible Orders resting on the SNAP CHX book. --------------------------------------------------------------------------- \9\ See supra note 3; see also CHX Article 1, Rule 1(ss). \10\ See supra note 3; see also CHX Article 18, Rule 1(b)(2); see also CHX Article 20, Rule 8(b)(3). \11\ See supra note 3; see also CHX Article 1, Rule 1(rr). --------------------------------------------------------------------------- [cir] If the SNAP Price is determined to be at a price that would require orders to be routed away, the Exchange would route away SNAP Eligible Orders resting on the SNAP CHX book.\12\ Immediately after the necessary orders are routed away, the SNAP Cycle would enter the Satisfaction Period, during which time the Exchange would delay proceeding to the stage four Order Matching Period for a period of time not to exceed 200 milliseconds to allow for confirmations of routed orders to be received from away markets. --------------------------------------------------------------------------- \12\ See supra note 3; see also CHX Article 19, Rule 3(a)(4) and (5). --------------------------------------------------------------------------- [cir] If the SNAP Price does not require orders to be routed away, the SNAP Cycle would immediately proceed to the stage four Order Matching Period. During the stage four Order Matching Period, SNAP Eligible Orders on the SNAP CHX book would execute at the SNAP Price within the Matching System.\13\ --------------------------------------------------------------------------- \13\ See supra note 3; see also CHX Article 18, Rule 1(b)(4). --------------------------------------------------------------------------- During the stage five Transition to the Open Trading State,\14\ unexecuted SNAP Eligible Orders, as well as other orders and cancel messages that have been queued during the SNAP Cycle, would be transitioned to the CHX book for automated trading.\15\ During the transition, orders may, among other things, be executed within the Matching System or be routed away in a manner consistent with how orders are currently executed and routed during automated trading.\16\ --------------------------------------------------------------------------- \14\ See supra note 3; see also CHX Article 1, Rule 1(qq). \15\ See supra note 3; see also CHX Article 18, Rule 1(b)(5). \16\ See CHX Article 19, Rule 3(a)(1)-(3); see also CHX Article 20, Rule 8(e)(1). --------------------------------------------------------------------------- As such, during a SNAP Cycle, orders may execute within the Matching System during either the stage four Order Matching Period (``stage four executions'') or the stage five Transition to the Open Trading State (``stage five executions''), whereas orders may be routed away during either the stage three Pricing and Satisfaction Period or the stage five Transition to the Open Trading State.\17\ --------------------------------------------------------------------------- \17\ See CHX Article 19, Rule 3(a)(1)-(3). --------------------------------------------------------------------------- The Exchange now proposes the following SNAP execution fees: All away executions resulting from orders routed away during a SNAP Cycle shall be assessed the current CHX Routing Services fee, pursuant to Section E.6 of the Fee Schedule, without amendment. Stage four executions within the Matching System shall be assessed new fees, pursuant to proposed Section E.9.\18\ --------------------------------------------------------------------------- \18\ The Exchange will continue to assess fees related to Section 31 of the Act for all Matching System executions, pursuant to Section E.5 of the Fee Schedule. --------------------------------------------------------------------------- Stage five executions within the Matching System shall be assessed the current CHX fees and credits pursuant to Sections E.1-4, without amendment.\19\ --------------------------------------------------------------------------- \19\ Id. --------------------------------------------------------------------------- Proposed Section E.9 outlines these proposed SNAP execution fees, as discussed below. In order to incentivize Participants to initiate and participate in SNAP Cycles, the Exchange proposes to assess no fee for stage four executions.\20\ However, the Exchange proposes to adopt a fee structure for stage four executions so that market participants would be notified as to how the Exchange would charge fees for stage four executions if it decides to assess such fees in the future.\21\ To this end, proposed Section E.9(a) provides as follows: --------------------------------------------------------------------------- \20\ The Exchange would continue to assess the CHX Section 31 fees, pursuant to Section E.5 of the Fee Schedule. \21\ Any change to proposed Section E.9 of the Fee Schedule would be effected through a proposed rule filing, pursuant to Rule 19b-4 under the Act. Stage four executions. For all executions within the Matching System during a stage four Order Matching Period, as described under Article 18, Rule 1(b)(4), the Exchange shall charge a fee for each buy order per share executed and a fee for each sell order per share executed, regardless of the original size of the orders, depending on the single SNAP Price, as defined under Article 1, Rule 1(rr), at which the orders executed relative to the National Best Bid and Offer (``NBBO'') at the time the SNAP Price was calculated. Only one of the following rows shall apply per SNAP Cycle.\22\ ------------------------------------------------------------------------ SNAP Price Buy order Sell order ------------------------------------------------------------------------ 1. SNAP Price < NBB................ No Fee........... No Fee. 2. SNAP Price = NBB................ No Fee........... No Fee. 3. NBB < SNAP Price < NBO.......... No Fee........... No Fee. 4. SNAP Price = NBO................ No Fee........... No Fee. 5. SNAP Price > NBO................ No Fee........... No Fee. 6. SNAP Price = Locked NBBO........ No Fee........... No Fee. ------------------------------------------------------------------------ The following examples illustrate how the proposed Section E.9(a) fee would be applied: --------------------------------------------------------------------------- \22\ Pursuant to CHX Article 18, Rule 1(b)(2)(E), a SNAP Cycle would only proceed to the stage three Pricing and Satisfaction Period if the market snapshot taken to establish the SNAP Price shows that a two-sided NBBO exists and the CHX Routing Services are available. In calculating the NBBO for this purpose, the Exchange would utilize its current CHX NBBO calculation protocol to ascertain the first uncrossed NBBO. See supra note 3; see also paragraph .01(d) of CHX Article 20, Rule 5. Thus, the NBBO utilized to establish the SNAP Price may be uncrossed or locked, but never crossed. --------------------------------------------------------------------------- Example 1. Assume that stage four executions occurred at a SNAP Price of $50.00/share and the relevant NBBO was 50.01 x 50.03. Under this Example 1, since the SNAP Price is less than the NBB, the Exchange would charge fees to all buy and sell orders per share executed, pursuant to proposed Section E.9(a)(1). Example 2. Assume the same as Example 1, except that the SNAP Price was $50.01/share. Under this Example 2, since the SNAP Price is equal to the NBB, the Exchange would charge fees to all buy and sell orders per share executed, pursuant to proposed Section E.9(a)(2) Example 3. Assume the same as Example 1, except that the SNAP Price was $50.02. Under this Example 3, since the SNAP Price is in between the NBBO, the Exchange would charge fees to all buy and sell orders per share executed, pursuant to proposed Section E.9(a)(3). Example 4. Assume the same as Example 1, except that the SNAP Price was $50.03. Under this Example 4, since the SNAP Price is equal to the NBO, the Exchange would charge fees to all buy and sell orders per share executed, pursuant to proposed Section E.9(a)(4). Example 5. Assume the same as Example 1, except that the SNAP Price [[Page 66602]] was $50.04. Under this Example 5, since the SNAP Price is greater than the NBO, the Exchange would charge fees to all buy and sell orders per share executed, pursuant to proposed Section E.9(a)(5). Example 6. Assume the same as Example 1, except that the relevant NBBO is locked at 50.00 x 50.00. Under this Example 5 [sic], since the SNAP Price is locked than the NBO [sic], the Exchange would charge fees to all buy and sell orders per share executed, pursuant to proposed Section E.9(a)(6). Also, the Exchange proposes to amend current Sections E.1, E.3 and E.4 to provide that each of those sections are subject to proposed Section E.9.\23\ The Exchange does not propose to substantively modify Sections E.1, E.3 or E.4 in any other way. --------------------------------------------------------------------------- \23\ Section E.1 of the Fee Schedule provides fees and credits for Matching System executions resulting from single-sided orders submitted as at least a Round Lot. Section E.2 of the Fee Schedule provides fees and credits for Matching System executions from orders submitted by Institutional Brokers registered with the Exchange pursuant CHX Article 17, which includes fees for both single-sided and cross orders. See CHX Article 1, Rule 2(a)(2). Section E.4 of the Fee Schedule provides fees for Matching System executions resulting from single-sided orders submitted as Odd Lots. The Exchange notes that it does not propose to amend Section E.2 of the Fee Schedule, which addresses cross orders executed within the Matching System, to contemplate proposed Section E.9 because cross orders cannot be executed within the Matching System during the stage four Order Matching Period. See CHX Article 1, Rule 2(a)(2); see also supra note 3; see also CHX Article 18, Rule 1(b)(2)(C)(iv). --------------------------------------------------------------------------- Proposed Section E.9(b) provides as follows: Stage five executions. For all executions within the Matching System during a stage five Transition to the Open Trading State, as described under Article 18, Rule 1(b)(5), the Exchange shall charge fees and attribute credits, pursuant to Sections E.1-4 above. Since stage five executions within the Matching System will occur in a manner similar to the current automated execution of orders within the Matching System,\24\ the Exchange proposes to apply the current Matching System execution fees and credits to such executions. The Exchange notes that current Sections E.1-4 apply to all Matching System executions and, thus, Sections E.1-4 do not need to be amended to contemplate stage five executions, in particular. --------------------------------------------------------------------------- \24\ See supra note 3. --------------------------------------------------------------------------- Proposed Section E.9(c) provides as follows: Away executions. For all away executions resulting from orders routed away during a SNAP Cycle, the Exchange shall charge the CHX Routing Services fee, pursuant to Section E.6 of the Fee Schedule. The proposed language clarifies that all away executions resulting from orders routed away during a SNAP Cycle will be subject to the current CHX Routing Services fee. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act \25\ in general, and furthers the objectives of Section 6(b)(4) of the Act \26\ in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using its facilities. --------------------------------------------------------------------------- \25\ 15 U.S.C. 78f. \26\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- Specifically, the Exchange believes that proposed Section E.9(a) equitably allocates fees among Participants in a non-discriminatory manner because no Participant will be charged an execution fee for stage four executions. Moreover, in the event that the Exchange decides to adopt stage four executions fees,\27\ the Exchange believes that proposed Section E.9(a) will allocate fees among Participants in a non- discriminatory manner because the same fees would be assessed to all orders executed during the stage four Order Matching Period. --------------------------------------------------------------------------- \27\ See supra note 21. --------------------------------------------------------------------------- The Exchange also believes that applying the current Matching System execution fees and credits for stage five executions, pursuant to current Sections E.1-4 and the current CHX Routing Services fees for all away executions resulting from orders routed away during a SNAP Cycle, pursuant to current Section E.6, equitably allocates fees among Participants in a non-discriminatory manner, as such fees and credits will continue to apply equally to all Participants that submit orders to the Matching System pursuant to current fees and credits. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels set by the Exchange to be excessive. The Exchange believes that the proposed SNAP execution fees will encourage Participants to utilize SNAP, which is an innovative trading functionality that addresses a market need.\28\ Thus, the proposed rule change is a competitive proposal that is intended to add additional liquidity and order executions to the Exchange, which will, in turn, benefit the Exchange and all Participants. --------------------------------------------------------------------------- \28\ See supra note 3; see also Mary Jo White, Chair, Securities and Exchange Commission, Speech at Sandler O'Neil & Partners L.P. Global Exchange and Brokerage Conference (June 5, 2014). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act \29\ and subparagraph(f)(2) of Rule 19b-4 thereunder \30\ because it establishes or changes a due, fee or other charge imposed by the Exchange. --------------------------------------------------------------------------- \29\ 15 U.S.C. 78s(b)(3)(A)(ii). \30\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-CHX-2015-06 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-CHX-2015-06. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will [[Page 66603]] post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Section, 100 F Street NE., Washington, DC 20549-1090. Copies of the filing will also be available for inspection and copying at the Exchange's principal office. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CHX-2015-06 and should be submitted on or before November 19, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\31\ Robert W. Errett, Deputy Secretary. --------------------------------------------------------------------------- \31\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2015-27519 Filed 10-28-15; 8:45 am] BILLING CODE 8011-01-P
![66600 Federal Register / Vol. 80, No. 209 / Thursday, October 29, 2015 / Notices
C. Self-Regulatory Organization’s printing in the Commission’s Public and in the Commission’s Public
Statement on Comments on the Reference Room, 100 F Street NE., Reference Room.
Proposed Rule Change Received From Washington, DC 20549, on official
II. Self-Regulatory Organization’s
Members, Participants or Others business days between the hours of
Statement of the Purpose of, and
Written comments were neither 10:00 a.m. and 3:00 p.m. Copies of such
filing will also be available for Statutory Basis for, the Proposed Rule
solicited nor received. Change
inspection and copying at the principal
III. Date of Effectiveness of the office of the Exchange. All comments In its filing with the Commission, the
Proposed Rule Change and Timing for received will be posted without change; CHX included statements concerning
Commission Action the Commission does not edit personal the purpose of and basis for the
Within 45 days of the date of identifying information from proposed rule changes and discussed
publication of this notice in the Federal submissions. You should submit only any comments it received on the
Register or within such longer period information that you wish to make proposed rule change. The text of these
up to 90 days (i) as the Commission may available publicly. All submissions statements may be examined at the
designate if it finds such longer period should refer to File Number SR– places specified in Item IV below. The
NASDAQ–2015–124 and should be CHX has prepared summaries, set forth
to be appropriate and publishes its
submitted on or before November 19, in sections A, B and C below, of the
reasons for so finding or (ii) as to which
2015. most significant aspects of such
the Exchange consents, the Commission
shall: (a) By order approve or For the Commission, by the Division of statements.
disapprove such proposed rule change, Trading and Markets, pursuant to delegated A. Self-Regulatory Organization’s
authority.26
or (b) institute proceedings to determine Statement of the Purpose of, and
whether the proposed rule change Robert W. Errett,
Statutory Basis for, the Proposed Rule
should be disapproved. Deputy Secretary. Change
[FR Doc. 2015–27515 Filed 10–28–15; 8:45 am]
IV. Solicitation of Comments BILLING CODE 8011–01–P
1. Purpose
Interested persons are invited to The Exchange proposes to adopt and
submit written data, views, and amend fees for CHX SNAP (‘‘SNAP’’).
arguments concerning the foregoing, SECURITIES AND EXCHANGE On October 6, 2015, the SEC approved
including whether the proposed rule COMMISSION a proposed rule change to adopt SNAP,
change is consistent with the Act. [Release No. 34–76249; File No. SR–CHX– an intra-day, sub-second and on-
Comments may be submitted by any of 2015–06] demand auction service.3 A SNAP
the following methods: Cycle 4 is comprised of the following
Self-Regulatory Organizations; five stages:
Electronic Comments Chicago Stock Exchange, Inc.; Notice • Stage one—Initiating the SNAP
• Use the Commission’s Internet of Filing and Immediate Effectiveness Cycle;
comment form (http://www.sec.gov/ of a Proposed Rule Change To Amend • Stage two—SNAP Order
rules/sro.shtml); or the Fee Schedule To Adopt CHX SNAP Acceptance Period;
• Send an email to rule-comments@ Execution Fees • Stage three—Pricing and
sec.gov. Please include File Number SR– Satisfaction Period;
October 23, 2015.
NASDAQ–2015–124 on the subject line. • Stage four—Order Matching Period;
Pursuant to Section 19(b)(1) of the and
Paper Comments Securities Exchange Act of 1934 • Stage five—Transition to the Open
• Send paper comments in triplicate (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Trading State.5
to Secretary, Securities and Exchange notice is hereby given that, on October In sum, SNAP Cycles will never be
Commission, 100 F Street NE., 19, 2015, the Chicago Stock Exchange, scheduled by the Exchange and will
Washington, DC 20549–1090. Inc. (‘‘CHX’’ or ‘‘Exchange’’) filed with always be driven by market demand for
the Securities and Exchange bulk trading in a subject security. The
All submissions should refer to File Commission (‘‘Commission’’) the
Number SR–NASDAQ–2015–124. This key features of a SNAP Cycle are as
proposed rule change as described in follows: 6
file number should be included on the Items I, II and III below, which Items
subject line if email is used. To help the • The entire SNAP Cycle is designed
have been prepared by the Exchange. to be completed in less than one second.
Commission process and review your The Commission is publishing this
comments more efficiently, please use • SNAP Cycles could occur numerous
notice to solicit comments on the times in a subject security during the
only one method. The Commission will proposed rule change from interested
post all comments on the Commission’s regular trading session only.7
persons.
Internet Web site (http://www.sec.gov/ 3 See Securities Exchange Act Release No. 76087
rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s
(October 6, 2015), 80 FR 61540 (October 13, 2015);
submission, all subsequent Statement of the Terms of Substance of see also Securities Exchange Act Release No. 75346
amendments, all written statements the Proposed Rule Change (July 1, 2015), 80 FR 39172 (July 8, 2015) (SR–CHX–
with respect to the proposed rule 2015–03). The approved rule change is not yet
CHX proposes to amend its Schedule operative and will become operative with two
change that are filed with the
asabaliauskas on DSK5VPTVN1PROD with NOTICES
of Fees and Assessments (the ‘‘Fee weeks’ notice by the Exchange to its Participants.
Commission, and all written Schedule’’) to adopt CHX SNAP 4 See supra note 3; see also CHX Article 18, Rule
communications relating to the execution fees. The text of this proposed 1(b).
proposed rule change between the rule change is available on the 5 See supra note 3; see also CHX Article 1, Rule
Commission and any person, other than 1(qq).
Exchange’s Web site at (www.chx.com) 6 A complete description of SNAP may be found
those that may be withheld from the
in the Approval Order and associated rule filing.
public in accordance with the 26 17 CFR 200.30–3(a)(12). See supra note 3.
provisions of 5 U.S.C. 552, will be 1 15 U.S.C. 78s(b)(1). 7 CHX Article 20, Rule 1(b) provides that the
available for Web site viewing and 2 17 CFR 240.19b–4. ‘‘regular trading session—shall begin at 8:30 a.m.
VerDate Sep<11>2014 23:37 Oct 28, 2015 Jkt 238001 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 E:\FR\FM\29OCN1.SGM 29OCN1](https://thefederalregister.org/doc/80_FR_66809/page/1.svg)
![66602 Federal Register / Vol. 80, No. 209 / Thursday, October 29, 2015 / Notices
was $50.04. Under this Example 5, since orders routed away during a SNAP is a competitive proposal that is
the SNAP Price is greater than the NBO, Cycle will be subject to the current CHX intended to add additional liquidity and
the Exchange would charge fees to all Routing Services fee. order executions to the Exchange, which
buy and sell orders per share executed, will, in turn, benefit the Exchange and
2. Statutory Basis
pursuant to proposed Section E.9(a)(5). all Participants.
• Example 6. Assume the same as The Exchange believes that the
Example 1, except that the relevant proposed rule change is consistent with C. Self-Regulatory Organization’s
NBBO is locked at 50.00 x 50.00. Under Section 6(b) of the Act 25 in general, and Statement on Comments on the
this Example 5 [sic], since the SNAP furthers the objectives of Section 6(b)(4) Proposed Rule Change Received From
Price is locked than the NBO [sic], the of the Act 26 in particular, in that it Members, Participants, or Others
Exchange would charge fees to all buy provides for the equitable allocation of No written comments were either
and sell orders per share executed, reasonable dues, fees and other charges solicited or received.
pursuant to proposed Section E.9(a)(6). among members and other persons
Also, the Exchange proposes to using its facilities. III. Date of Effectiveness of the
amend current Sections E.1, E.3 and E.4 Specifically, the Exchange believes Proposed Rule Change and Timing for
to provide that each of those sections that proposed Section E.9(a) equitably Commission Action
are subject to proposed Section E.9.23 allocates fees among Participants in a The foregoing rule change is effective
The Exchange does not propose to non-discriminatory manner because no upon filing pursuant to Section
substantively modify Sections E.1, E.3 Participant will be charged an execution 19(b)(3)(A)(ii) of the Act 29 and
or E.4 in any other way. fee for stage four executions. Moreover, subparagraph(f)(2) of Rule 19b–4
Proposed Section E.9(b) provides as in the event that the Exchange decides thereunder 30 because it establishes or
follows: to adopt stage four executions fees,27 the changes a due, fee or other charge
Stage five executions. For all executions Exchange believes that proposed imposed by the Exchange.
within the Matching System during a stage Section E.9(a) will allocate fees among At any time within 60 days of the
five Transition to the Open Trading State, as Participants in a non-discriminatory filing of the proposed rule change, the
described under Article 18, Rule 1(b)(5), the manner because the same fees would be Commission summarily may
Exchange shall charge fees and attribute assessed to all orders executed during temporarily suspend such rule change if
credits, pursuant to Sections E.1–4 above. the stage four Order Matching Period. it appears to the Commission that such
Since stage five executions within the The Exchange also believes that action is necessary or appropriate in the
Matching System will occur in a manner applying the current Matching System public interest, for the protection of
similar to the current automated execution fees and credits for stage five investors, or otherwise in furtherance of
execution of orders within the Matching executions, pursuant to current Sections the purposes of the Act. If the
System,24 the Exchange proposes to E.1–4 and the current CHX Routing Commission takes such action, the
apply the current Matching System Services fees for all away executions Commission shall institute proceedings
execution fees and credits to such resulting from orders routed away to determine whether the proposed rule
executions. The Exchange notes that during a SNAP Cycle, pursuant to should be approved or disapproved.
current Sections E.1–4 apply to all current Section E.6, equitably allocates
Matching System executions and, thus, fees among Participants in a non- IV. Solicitation of Comments
Sections E.1–4 do not need to be discriminatory manner, as such fees and Interested persons are invited to
amended to contemplate stage five credits will continue to apply equally to submit written data, views, and
executions, in particular. all Participants that submit orders to the arguments concerning the foregoing,
Proposed Section E.9(c) provides as Matching System pursuant to current including whether the proposed rule
follows: fees and credits. change is consistent with the Act.
Away executions. For all away executions B. Self-Regulatory Organization’s Comments may be submitted by any of
resulting from orders routed away during a Statement on Burden on Competition the following methods:
SNAP Cycle, the Exchange shall charge the
CHX Routing Services fee, pursuant to The Exchange does not believe that Electronic Comments
Section E.6 of the Fee Schedule. the proposed rule change will impose • Use the Commission’s Internet
The proposed language clarifies that any burden on competition that is not comment form (http://www.sec.gov/
all away executions resulting from necessary or appropriate in furtherance rules/sro.shtml); or
of the purposes of the Act. The • Send an email to rule-comments@
23 Section E.1 of the Fee Schedule provides fees Exchange operates in a highly sec.gov. Please include File Number SR–
and credits for Matching System executions competitive market in which market CHX–2015–06 on the subject line.
resulting from single-sided orders submitted as at participants can readily direct order
least a Round Lot. Section E.2 of the Fee Schedule
flow to competing venues if they deem Paper Comments
provides fees and credits for Matching System
executions from orders submitted by Institutional fee levels set by the Exchange to be • Send paper comments in triplicate
Brokers registered with the Exchange pursuant CHX excessive. The Exchange believes that to Brent J. Fields, Secretary, Securities
Article 17, which includes fees for both single-sided the proposed SNAP execution fees will and Exchange Commission, 100 F Street
and cross orders. See CHX Article 1, Rule 2(a)(2).
Section E.4 of the Fee Schedule provides fees for
encourage Participants to utilize SNAP, NE., Washington, DC 20549–1090.
Matching System executions resulting from single- which is an innovative trading All submissions should refer to File
sided orders submitted as Odd Lots. functionality that addresses a market
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Number SR–CHX–2015–06. This file
The Exchange notes that it does not propose to need.28 Thus, the proposed rule change
amend Section E.2 of the Fee Schedule, which
number should be included on the
addresses cross orders executed within the subject line if email is used. To help the
25 15 U.S.C. 78f.
Matching System, to contemplate proposed Section Commission process and review your
26 15 U.S.C. 78f(b)(4).
E.9 because cross orders cannot be executed within comments more efficiently, please use
the Matching System during the stage four Order 27 See supra note 21.
Matching Period. See CHX Article 1, Rule 2(a)(2); 28 See supra note 3; see also Mary Jo White, Chair,
only one method. The Commission will
see also supra note 3; see also CHX Article 18, Rule Securities and Exchange Commission, Speech at
1(b)(2)(C)(iv). 29 15 U.S.C. 78s(b)(3)(A)(ii).
Sandler O’Neil & Partners L.P. Global Exchange and
24 See supra note 3. Brokerage Conference (June 5, 2014). 30 17 CFR 240.19b–4(f)(2).
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![Federal Register / Vol. 80, No. 209 / Thursday, October 29, 2015 / Notices 66603
post all comments on the Commission’s ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with In April 2013, in connection with the
Internet Web site (http://www.sec.gov/ the Securities and Exchange Plan to Address Extraordinary Market
rules/sro.shtml). Copies of the Commission (‘‘Commission’’) the Volatility Pursuant to Rule 608 of
submission, all subsequent proposed rule change as described in Regulation NMS (the ‘‘Plan’’),3 the
amendments, all written statements Items I and II below, which Items have Exchange adopted Rule 6.65A(c) to
with respect to the proposed rule been prepared by the self-regulatory provide that options executions would
change that are filed with the organization. The Commission is not be adjusted or nullified if the
Commission, and all written publishing this notice to solicit execution occurs during periods of
communications relating to the comments on the proposed rule change extreme market volatility.4 Specifically,
proposed rule change between the from interested persons. Rule 6.65A(c) provides that, during the
Commission and any person, other than pilot period, electronic transactions in
those that may be withheld from the I. Self-Regulatory Organization’s options that overlay an NMS Stock that
public in accordance with the Statement of the Terms of the Substance occur during a Limit State or a Straddle
provisions of 5 U.S.C. 552, will be of the Proposed Rule Change State (as defined by the Plan) are not
available for Web site viewing and The Exchange proposes to extend the subject to review under Rule 6.87(c) for
printing in the Commission’s Public pilot period applicable to Rule 6.65A(c), Obvious Errors or Rule 6.87(d) for
Reference Section, 100 F Street NE., which addresses how the Exchange Catastrophic Errors. Nothing in Rule
Washington, DC 20549–1090. Copies of treats Obvious and Catastrophic Errors 6.65A(c) prevents electronic
the filing will also be available for during periods of extreme market transactions in options that overlay an
inspection and copying at the volatility to coincide with the pilot NMS Stock that occur during a Limit
Exchange’s principal office. All period for the Plan to Address State or a Straddle State from being
comments received will be posted Extraordinary Market Volatility reviewed on Exchange motion pursuant
without change; the Commission does Pursuant to Rule 608 of Regulation to Rule 6.87(c)(3), or a bust or adjust
not edit personal identifying pursuant to paragraphs (e) through (j) of
NMS. The pilot period is currently set
information from submissions. You Rule 6.87.5
to expire on October 23, 2015. The text
should submit only information that The Plan has been amended several
of the proposed rule change is available
you wish to make available publicly. All times since inception and was
on the Exchange’s Web site at
submissions should refer to File implemented on February 24, 2014. On
www.nyse.com, at the principal office of
Number SR–CHX–2015–06 and should May 28, 2015, the Participants
the Exchange, and at the Commission’s
be submitted on or before November 19, submitted to the Commission a
Public Reference Room.
2015. Supplemental Joint Assessment that
For the Commission, by the Division of II. Self-Regulatory Organization’s recommended that the Plan be adopted
Trading and Markets, pursuant to delegated Statement of the Purpose of, and as permanent with certain
authority.31 Statutory Basis for, the Proposed Rule modifications.6 The purpose of this
Robert W. Errett, Change proposed extension is to allow the
Deputy Secretary. Participants to conduct, and the
In its filing with the Commission, the Commission to consider, further
[FR Doc. 2015–27519 Filed 10–28–15; 8:45 am]
self-regulatory organization included analysis of data in support of the
BILLING CODE 8011–01–P
statements concerning the purpose of, recommendations made in the
and basis for, the proposed rule change Supplemental Joint Assessment,
SECURITIES AND EXCHANGE and discussed any comments it received including around the attributes of limit
COMMISSION on the proposed rule change. The text states; the length of trading pauses; the
of those statements may be examined at use of an alternative reference price at
[Release No. 34–76246; File No. SR– the places specified in Item IV below.
NYSEArca–2015–101] the open of trading; and the alignment
The Exchange has prepared summaries, of the percentage parameters with the
set forth in sections A, B, and C below, Clearly Erroneous Execution (CEE)
Self-Regulatory Organizations; NYSE
of the most significant parts of such thresholds (with the goal of largely
Arca, Inc.; Notice of Filing and
statements. eliminating the Participants’ CEE
Immediate Effectiveness of Proposed
Rule Change Extending the Pilot A. Self-Regulatory Organization’s authority).
Period Applicable to Rule 6.65A(c), Statement of the Purpose of, and In order to align the pilot period for
Which Addresses How the Exchange Statutory Basis for, the Proposed Rule Rule 6.65A(c) with the proposed pilot
Treats Obvious and Catastrophic Change
3 See Securities Exchange Act Release No. 67091
Errors During Periods of Extreme
Market Volatility To Coincide With the 1. Purpose (May 31, 2012), 77 FR 33498 (June 6, 2012) (File
No. 4–631) (Order Approving, on a Pilot Basis, the
Pilot Period for the Plan To Address The Exchange proposes to extend the Plan). The Plan is designed to prevent trades in
Extraordinary Market Volatility pilot period applicable to Rule 6.65A(c), individual NMS Stocks from occurring outside of
Pursuant to Rule 608 of Regulation specified Price Bands, which are described in more
which addresses how the Exchange detail in the Plan.
NMS treats Obvious and Catastrophic Errors 4 See Securities and Exchange Act Release No.
October 23, 2015. during periods of extreme market 69340 (April 8, 2013), 78 FR 22004 (April 12, 2013)
volatility to coincide with the pilot (SR–NYSEArca–2013–10) (‘‘Approval Order’’).
asabaliauskas on DSK5VPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) of the 5 See Rule 6.87, Commentary .03.
Securities Exchange Act of 1934 (the period for the Plan to Address 6 See Letter from Christopher B. Stone, Vice
‘‘Act’’),1 and Rule 19b–4 thereunder,2 Extraordinary Market Volatility President, FINRA, to Brent J. Fields, Secretary, SEC,
notice is hereby given that on October Pursuant to Rule 608 of Regulation dated May 28, 2015. In addition, the Participants to
22, 2015, NYSE Arca, Inc. (the NMS, as it may be amended from time the Plan recently filed to extend the Plan’s pilot
to time (‘‘LULD Plan’’), including any period until April 22, 2016 (the ‘‘Ninth
Amendment’’). See Securities Exchange Act Release
31 17 CFR 200.30–3(a)(12). extensions to the pilot period for the No. 75917 (September 14, 2015), 80 FR 56515
1 15 U.S.C. 78s(b)(1). LULD Plan. The pilot period is currently (September 18, 2015) (File No. 4–631) (notice of
2 17 CFR 240.19b–4. set to expire on October 23, 2015. proposed Ninth Amendment to the Plan).
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Document Created: 2015-12-14 15:21:46
Document Modified: 2015-12-14 15:21:46
| 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 66600 |
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