81 FR 11850 - Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Withdrawal of Proposed Rule Change to Adopt Limit Order Protection and Market Order Protection
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 44 (March 7, 2016)
Federal Register Volume 81, Issue 44 (March 7, 2016)
| Page Range | 11850-11851 | |
| FR Document | 2016-04907 |
[Federal Register Volume 81, Number 44 (Monday, March 7, 2016)] [Notices] [Pages 11850-11851] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-04907] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-77264; File No. SR-PHLX-2016-12] Self-Regulatory Organizations; NASDAQ OMX PHLX LLC; Notice of Withdrawal of Proposed Rule Change to Adopt Limit Order Protection and Market Order Protection March 1, 2016. On January 21, 2016, NASDAQ OMX PHLX LLC (the ``Exchange'') filed with the Securities and Exchange Commission (the ``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to adopt a Limit Order Protection and a Market Order Protection feature for members accessing PSX. The proposed rule change was published for comment in the Federal Register on February 5, 2016.\3\ The Commission received no comment letters on the proposal. On February 26, 2016, the Exchange withdrew the proposed rule change. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 77007 (February 1, 2016), 81 FR 6314. \4\ 17 CFR 200.30-3(a)(12). [[Page 11851]] --------------------------------------------------------------------------- For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\4\ Robert W. Errett, Deputy Secretary. [FR Doc. 2016-04907 Filed 3-4-16; 8:45 am] BILLING CODE 8011-01-P
![11850 Federal Register / Vol. 81, No. 44 / Monday, March 7, 2016 / Notices
8. Applicants submit that Congress of the following: (a) Holding 5% or closing price or Bid/Ask Price against
adopted section 22(e) to prevent more, or more than 25%, of the such NAV.
unreasonable, undisclosed or outstanding Shares of one or more 4. On each Business Day, before
unforeseen delays in the actual payment Funds; (b) an affiliation with a person commencement of trading in Shares on
of redemption proceeds. Applicants with an ownership interest described in the Listing Exchange, the Fund will
state that allowing redemption (a); or (c) holding 5% or more, or more disclose on its Web site the identities
payments for Creation Units of a Global than 25%, of the shares of one or more and quantities of the Portfolio Positions
Fund to be made within 15 calendar Affiliated Funds. held by the Fund that will form the
days would not be inconsistent with the 11. Applicants assert that no useful basis for the Fund’s calculation of NAV
spirit and intent of section 22(e).19 purpose would be served by prohibiting at the end of the Business Day.
Applicants state that each Global Fund’s the affiliated persons described above 5. The Adviser or any Fund Sub-
statement of additional information from making in-kind purchases or in- Adviser, directly or indirectly, will not
(‘‘SAI’’) will disclose those local kind redemptions of Shares of a Fund in cause any Authorized Participant (or
holidays (over the period of at least one Creation Units. Both the deposit any investor on whose behalf an
year following the date of the SAI), if procedures for in-kind purchases of Authorized Participant may transact
any, that are expected to prevent the Creation Units and the redemption with the Fund) to acquire any Deposit
delivery of redemption proceeds in procedures for in-kind redemptions will Instrument for the Fund through a
seven calendar days and the maximum be effected in exactly the same manner transaction in which the Fund could not
number of days, up to 15 calendar days, for all purchases and redemptions. The engage directly.
needed to deliver the proceeds for that valuation of the Deposit Instruments 6. The requested relief to permit ETF
Global Fund. Applicants are not seeking and Redemption Instruments will be operations will expire on the effective
relief from section 22(e) with respect to made in the same manner, and in the date of any Commission rule under the
Global Funds that do not effect same manner as the Fund’s Portfolio Act that provides relief permitting the
redemptions of Creation Units in kind. Positions, regardless of the identity of operation of actively managed
the purchaser or redeemer. Except with exchange-traded funds.
Sections 17(a)(1) and (2) of the Act respect to cash determined in For the Commission, by the Division of
9. Section 17(a)(1) and (2) of the Act accordance with the procedures Investment Management, under delegated
generally prohibit an affiliated person of described in section I.G.1. of the authority.
a registered investment company, or an application, Deposit Instruments and Robert W. Errett,
affiliated person of such a person Redemption Instruments will be the Deputy Secretary.
(‘‘second tier affiliate’’), from selling any same for all purchasers and redeemers.
[FR Doc. 2016–04913 Filed 3–4–16; 8:45 am]
security to or purchasing any security Therefore, applicants state that the in-
BILLING CODE 8011–01–P
from the company. Section 2(a)(3) of the kind purchases and redemptions will
Act defines ‘‘affiliated person’’ to afford no opportunity for the specified
include any person directly or indirectly affiliated persons of a Fund to effect a SECURITIES AND EXCHANGE
owning, controlling, or holding with transaction detrimental to other holders COMMISSION
power to vote 5% or more of the of Shares of that Fund. Applicants do
outstanding voting securities of the not believe that in-kind purchases and [Release No. 34–77264; File No. SR–PHLX–
other person and any person directly or redemptions will result in abusive self- 2016–12]
indirectly controlling, controlled by, or dealing or overreaching of the Fund.
under common control with, the other Self-Regulatory Organizations;
person. Section 2(a)(9) of the Act Applicant’s Conditions NASDAQ OMX PHLX LLC; Notice of
defines ‘‘control’’ of a fund as ‘‘the Applicants agree that any order of the Withdrawal of Proposed Rule Change
power to exercise a controlling Commission granting the requested to Adopt Limit Order Protection and
influence over the management or relief will be subject to the following Market Order Protection
policies’’ of the fund and provides that conditions: March 1, 2016.
a control relationship will be presumed 1. As long as the Funds operate in On January 21, 2016, NASDAQ OMX
where one person owns more than 25% reliance on the requested order, the PHLX LLC (the ‘‘Exchange’’) filed with
of another person’s voting securities. Shares of the Funds will be listed on a the Securities and Exchange
The Funds may be deemed to be Listing Exchange. Commission (the ‘‘Commission’’),
controlled by an Adviser and hence 2. Neither the Trust nor any Fund will
pursuant to Section 19(b)(1) of the
affiliated persons of each other. In be advertised or marketed as an open-
Securities Exchange Act of 1934 1 and
addition, the Funds may be deemed to end investment company or a mutual
Rule 19b–4 thereunder,2 a proposed rule
be under common control with any fund. Any advertising material that
change to adopt a Limit Order
other registered investment company (or describes the purchase or sale of
Protection and a Market Order
series thereof) advised by an Adviser (an Creation Units or refers to redeemability
Protection feature for members
‘‘Affiliated Fund’’). will prominently disclose that the
10. Applicants request an exemption accessing PSX. The proposed rule
Shares are not individually redeemable
from section 17(a) under sections 6(c) change was published for comment in
and that owners of the Shares may
and 17(b) to permit in-kind purchases the Federal Register on February 5,
acquire those Shares from the Fund and
and redemptions of Creation Units from 2016.3 The Commission received no
tender those Shares for redemption to
asabaliauskas on DSK3SPTVN1PROD with NOTICES
the Funds by persons that are affiliated comment letters on the proposal. On
the Fund in Creation Units only.
persons or second tier affiliates of the 3. The Web site for the Funds, which February 26, 2016, the Exchange
Funds solely by virtue of one or more is and will be publicly accessible at no withdrew the proposed rule change.
charge, will contain on a per Share 1 15
requires that most securities transactions be settled U.S.C. 78s(b)(1).
basis, for each Fund, the prior Business 2 17 CFR 240.19b–4.
within three business days of the trade date.
19 Certain countries in which a Global Fund may
Day’s NAV and the market closing price 3 See Securities Exchange Act Release No. 77007
invest have historically had settlement periods of or Bid/Ask Price, and a calculation of (February 1, 2016), 81 FR 6314.
up to 15 calendar days. the premium or discount of the market 4 17 CFR 200.30–3(a)(12).
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![Federal Register / Vol. 81, No. 44 / Monday, March 7, 2016 / Notices 11851
For the Commission, by the Division of and C below, of the most significant Proposed Order Receipt Reporting
Trading and Markets, pursuant to delegated aspects of such statements. Requirements Applicable to All ATSs
authority.4 That Trade NMS Stocks
Robert W. Errett, A. Self-Regulatory Organization’s
Statement of the Purpose of, and The first category of proposed changes
Deputy Secretary.
Statutory Basis for, the Proposed Rule applies to all ATSs when reporting the
[FR Doc. 2016–04907 Filed 3–4–16; 8:45 am] receipt of an order to OATS.
Change
BILLING CODE 8011–01–P Specifically, the proposed rule would
1. Purpose require each ATS to indicate on all
orders received whether it displays
SECURITIES AND EXCHANGE FINRA is proposing to adopt FINRA subscriber orders outside of the ATS
COMMISSION Rule 4554 to require ATSs to report (other than to alternative trading system
additional order information to FINRA. employees).5 This requirement will
[Release No. 34–77269; File No. SR–FINRA– While ATSs already submit order enable FINRA to distinguish between
2016–010] information to FINRA that is required ATSs that display orders outside the
by the Order Audit Trail System ATS, either to subscribers or through
Self-Regulatory Organizations; (‘‘OATS’’) rules, there is additional
Financial Industry Regulatory consolidated quote data (‘‘display
order information not currently required ATS’’) and ATSs that do not display
Authority, Inc.; Notice of Filing of a to be reported to OATS, such as order
Proposed Rule Change To Adopt orders outside the ATS (‘‘non-display
re-pricing events (e.g., changes to an ATS’’).6 A display ATS would also
FINRA Rule 4554 (Alternative Trading
order that is pegged to the National Best indicate whether the order book is
Systems—Recording and Reporting
Bid or Offer (‘‘NBBO’’)) and order displayed to subscribers only, or
Requirements of Order and Execution
display and reserve size information, distributed for publication in the
Information for NMS Stocks)
that, if available to FINRA, would consolidated quotation data. Each ATS
March 1, 2016. greatly enhance FINRA’s ability to would also be required to identify
Pursuant to Section 19(b)(1) of the perform certain order-based whether it is an ADF Trading Center as
Securities Exchange Act of 1934 surveillance, including layering, quote defined in FINRA Rule 6220. An ATS
(‘‘Act’’) 1 and Rule 19b-4 thereunder,2 spoofing and mid-point pricing would make these determinations on a
notice is hereby given that on February manipulation surveillance, by enabling general basis, but would provide this
29, 2016, Financial Industry Regulatory FINRA to more fully reconstruct an information through flags submitted on
Authority, Inc. (‘‘FINRA’’) filed with the ATS’s order book. FINRA therefore is every order event. Each ATS also would
Securities and Exchange Commission proposing to require ATSs to report be required to identify whether a
(‘‘SEC’’ or ‘‘Commission’’) the proposed additional ATS-specific data elements specific order can be routed away from
rule change as described in Items I, II, in existing OATS reports for orders in the ATS for execution, and whether
and III below, which Items have been NMS stocks. ATSs would be required to there are any counter-party restrictions
prepared by FINRA. The Commission is report this information to FINRA on the order. ATSs would also be
publishing this notice to solicit consistent with current OATS reporting required to provide FINRA with a
comments on the proposed rule change requirements (no later than 8:00 a.m. unique identifier representing the
from interested persons. Eastern Time on the calendar day specific order type other than market
following receipt of the order in an and limit orders that have no other
I. Self-Regulatory Organization’s special handling instructions. In order
Statement of the Terms of the Substance electronic form as prescribed by
FINRA). for FINRA to map the identifier to a
of the Proposed Rule Change specific order type, an ATS will also be
FINRA is proposing to adopt FINRA As described in more detail in Item C, required to provide FINRA with a list of
Rule 4554 to require alternative trading FINRA initially solicited comment on all of its order types twenty days before
systems (‘‘ATSs’’) to submit additional this proposal in Regulatory Notice 14– such order types become effective, and
order information to FINRA. 51.3 Based on concerns raised by if the ATS makes any subsequent
The text of the proposed rule change commenters about potential burdens changes to its order types, twenty days
is available on FINRA’s Web site at associated with the original proposal, before such changes become effective.7
http://www.finra.org, at the principal FINRA has revised the original proposal
office of FINRA and at the to narrow some aspects of the order 5 The proposed requirements apply to any
Commission’s Public Reference Room. information required to be reported alternative trading system, as defined in Rule
while still enhancing FINRA’s ability to 300(a)(1) of SEC Regulation ATS, that has filed a
II. Self-Regulatory Organization’s Form ATS with the SEC and is subject to FINRA’s
reconstruct an ATS’s order book for OATS and equity trade reporting rules. See 17 CFR
Statement of the Purpose of, and surveillance purposes. The proposal sets 242.300(a)(1).
Statutory Basis for, the Proposed Rule forth four categories of reporting For purposes of this rule, the term ‘‘order’’
Change requirements: (1) Data to be reported by includes a broker-dealer’s proprietary quotes that
are transmitted to an ATS.
In its filing with the Commission, all ATSs at the time of order receipt; (2) 6 If an ATS meets the applicable volume
FINRA included statements concerning data to be reported by all ATSs at the thresholds, it is required to make its best bid and
the purpose of and basis for the time of order execution; (3) data to be best offer available for publication in the
proposed rule change and discussed any reported by ATSs that display consolidated quotation data. See 17 CFR
asabaliauskas on DSK3SPTVN1PROD with NOTICES
242.301(b)(3).
comments it received on the proposed subscriber orders; and (4) data specific 7 In a Regulatory Notice announcing the
rule change. The text of these statements to ATSs that are registered as ADF implementation of this proposal, FINRA will
may be examined at the places specified Trading Centers. The proposed provide a deadline prior to the implementation date
in Item IV below. FINRA has prepared requirements would apply to order and by which current ATSs must initially submit lists
summaries, set forth in sections A, B, execution information for NMS stocks.4 of their existing order types to FINRA.
FINRA notes that, under current Rule 301(b)(2)(ii)
of Regulation ATS, ATSs are required to file an
1 15 U.S.C. 78s(b)(1). 3 See Regulatory Notice 14–51 (November 2014). amendment on Form ATS at least 20 calendar days
2 17 CFR 240.19b–4. 4 See 17 CFR 242.600(b)(47). Continued
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Document Created: 2018-02-02 15:07:57
Document Modified: 2018-02-02 15:07:57
| 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 | 81 FR 11850 |
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