81 FR 43689 - Self-Regulatory Organization; BATS BYX-Exchange, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Price Improvement Program
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 128 (July 5, 2016)
Federal Register Volume 81, Issue 128 (July 5, 2016)
| Page Range | 43689-43690 | |
| FR Document | 2016-15756 |
[Federal Register Volume 81, Number 128 (Tuesday, July 5, 2016)] [Notices] [Pages 43689-43690] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-15756] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78178; File No. SR-BYX-2012-019] Self-Regulatory Organization; BATS BYX-Exchange, Inc.; Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Price Improvement Program June 28, 2016. On November 27, 2012, the Securities and Exchange Commission (``Commission'') issued an order pursuant to its authority under Rule 612(c) of Regulation NMS (``Sub-Penny Rule'') \1\ that granted the BATS BYX-Exchange, Inc. (``BYX'' or the ``Exchange'') a limited exemption from the Sub-Penny Rule in connection with the operation of the Exchange's Retail Price Improvement (``RPI'') Program (the ``Program''). The limited exemption was granted concurrently with the Commission's approval of the Exchange's proposal to adopt the Program for a one-year pilot term.\2\ The exemption was granted coterminous with the effectiveness of the pilot Program and has been extended three times; \3\ both the pilot Program and exemption are scheduled to expire on July 31, 2016. --------------------------------------------------------------------------- \1\ 17 CFR 242.612(c). \2\ See Securities Exchange Act Release No. 68303 (November 27, 2012), 77 FR 71652 (December 3, 2012) (``RPI Approval Order'') (SR- BXY-2012-019). \3\ See Securities Exchange Act Release Nos. 71249 (January 7, 2014), 79 FR 2229 (January 13, 2012) (SR-BYX-2014-001) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Pilot Period for the RPI); 71250 (January 7, 2014), 79 FR 2234 (January 13, 2012) (Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Price Improvement Program); 74111 (January 22, 2015), 80 FR 4598 (January 28, 2015) (SR-BYX-2015-05) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Pilot Period for the RPI); and 74115 (January 22, 2015), 80 FR 4324 (January 27, 2015) (Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Price Improvement Program); 76965 (January 22, 2016), 81 FR 4682 (January 27, 2016) (SR-BYX-2016-01) (Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Pilot Period for the RPI); 76953 (January 21, 2016), 81 FR 4728 (January 27, 2016) (Order Granting an Extension to Limited Exemption From Rule 612(c) of Regulation NMS in Connection With the Exchange's Retail Price Improvement Program). --------------------------------------------------------------------------- The Exchange now seeks to extend the exemption until July 31, 2017.\4\ The Exchange's request was made in conjunction with an immediately effective filing that extends the operation of the Program until July 31, 2017.\5\ In its request to extend the exemption, the Exchange notes that the Program was implemented gradually over time. Accordingly, the Exchange has asked for additional time to allow itself and the Commission to analyze data concerning the Program, which the Exchange committed to provide to the Commission, as well as to allow additional opportunities for greater participation in the Program.\6\ For this reason and the reasons stated in the Order originally granting the limited exemption, the Commission finds that extending the exemption, pursuant to its authority under Rule 612(c) of Regulation NMS, is appropriate in the public interest and consistent with the protection of investors. --------------------------------------------------------------------------- \4\ See letter from Anders Franzon, Senior Vice President and Associate General Counsel, BYX, to Brent J. Fields, Secretary, Commission, dated June 23, 2016. \5\ See SR-BatsBYX-2016-15. \6\ See RPI Approval Order, supra note 2, at 77 FR at 71657. --------------------------------------------------------------------------- THEREFORE, IT IS HEREBY ORDERED, that, pursuant to Rule 612(c) [[Page 43690]] of Regulation NMS, the Exchange is granted a limited exemption from Rule 612(c) of Regulation NMS that allows it to accept and rank orders priced equal to or greater than $1.00 per share in increments of $0.001, in connection with the operation of its RPI Program. The limited and temporary exemption extended by this Order is subject to modification or revocation if at any time the Commission determines that such action is necessary or appropriate in furtherance of the purposes of the Securities Exchange Act of 1934. Responsibility for compliance with any applicable provisions of the federal securities laws must rest with the persons relying on the exemptions that are the subject of this Order. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\7\ --------------------------------------------------------------------------- \7\ 17 CFR 200.30-3(a)(83). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-15756 Filed 7-1-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 128 / Tuesday, July 5, 2016 / Notices 43689
burden on competition that is not comments more efficiently, please use Price Improvement (‘‘RPI’’) Program (the
necessary or appropriate in furtherance only one method. The Commission will ‘‘Program’’). The limited exemption was
of the purposes of the Act. The updated post all comments on the Commission’s granted concurrently with the
Series 50 examination content outline Internet Web site (http://www.sec.gov/ Commission’s approval of the
aligns with the functions and associated rules/sro.shtml). Copies of the Exchange’s proposal to adopt the
tasks currently performed by Municipal submission, all subsequent Program for a one-year pilot term.2 The
Advisor Representatives and tests amendments, all written statements exemption was granted coterminous
knowledge of the most current laws, with respect to the proposed rule with the effectiveness of the pilot
rules, and regulations and skills relevant change that are filed with the Program and has been extended three
to those functions and associated tasks. Commission, and all written times; 3 both the pilot Program and
As such, the proposed rule change communications relating to the exemption are scheduled to expire on
would make the Series 50 examination proposed rule change between the July 31, 2016.
more efficient and effective. Commission and any person, other than The Exchange now seeks to extend
those that may be withheld from the the exemption until July 31, 2017.4 The
C. Self-Regulatory Organization’s Exchange’s request was made in
public in accordance with the
Statement on Comments on the conjunction with an immediately
provisions of 5 U.S.C. 552, will be
Proposed Rule Change Received From effective filing that extends the
available for Web site viewing and
Members, Participants, or Others operation of the Program until July 31,
printing in the Commission’s Public
Written comments were neither Reference Room, 100 F Street NE., 2017.5 In its request to extend the
solicited nor received on the proposed Washington, DC 20549 on official exemption, the Exchange notes that the
rule change. business days between the hours of Program was implemented gradually
10:00 a.m. and 3:00 p.m. Copies of the over time. Accordingly, the Exchange
III. Date of Effectiveness of the has asked for additional time to allow
Proposed Rule Change and Timing for filing also will be available for
inspection and copying at the principal itself and the Commission to analyze
Commission Action data concerning the Program, which the
office of the MSRB. All comments
The foregoing proposed rule change received will be posted without change; Exchange committed to provide to the
has become effective pursuant to the Commission does not edit personal Commission, as well as to allow
Section 19(b)(3)(A) of the Act 12 and identifying information from additional opportunities for greater
paragraph (f)(1) of Rule 19b–4 submissions. You should submit only participation in the Program.6 For this
thereunder.13 At any time within 60 information that you wish to make reason and the reasons stated in the
days of the filing of the proposed rule available publicly. All submissions Order originally granting the limited
change, the Commission summarily may should refer to File Number SR–MSRB– exemption, the Commission finds that
temporarily suspend such rule change if 2016–08 and should be submitted on or extending the exemption, pursuant to its
it appears to the Commission that such before July 26, 2016. authority under Rule 612(c) of
action is necessary or appropriate in the Regulation NMS, is appropriate in the
public interest, for the protection of For the Commission, pursuant to delegated public interest and consistent with the
authority.14 protection of investors.
investors, or otherwise in furtherance of
the purposes of the Act. Robert W. Errett, THEREFORE, IT IS HEREBY
Deputy Secretary. ORDERED, that, pursuant to Rule 612(c)
IV. Solicitation of Comments [FR Doc. 2016–15759 Filed 7–1–16; 8:45 am]
Interested persons are invited to BILLING CODE 8011–01–P
2 See Securities Exchange Act Release No. 68303
submit written data, views, and (November 27, 2012), 77 FR 71652 (December 3,
2012) (‘‘RPI Approval Order’’) (SR–BXY–2012–019).
arguments concerning the foregoing, 3 See Securities Exchange Act Release Nos. 71249
including whether the proposed rule SECURITIES AND EXCHANGE (January 7, 2014), 79 FR 2229 (January 13, 2012)
change is consistent with the Act. COMMISSION (SR–BYX–2014–001) (Notice of Filing and
Comments may be submitted by any of Immediate Effectiveness of a Proposed Rule Change
[Release No. 34–78178; File No. SR–BYX– to Extend the Pilot Period for the RPI); 71250
the following methods: 2012–019] (January 7, 2014), 79 FR 2234 (January 13, 2012)
(Order Granting an Extension to Limited Exemption
Electronic Comments From Rule 612(c) of Regulation NMS in Connection
Self-Regulatory Organization; BATS
• Use the Commission’s Internet BYX-Exchange, Inc.; Order Granting an
With the Exchange’s Retail Price Improvement
Program); 74111 (January 22, 2015), 80 FR 4598
comment form (http://www.sec.gov/ Extension to Limited Exemption From (January 28, 2015) (SR–BYX–2015–05) (Notice of
rules/sro.shtml); or Rule 612(c) of Regulation NMS in Filing and Immediate Effectiveness of a Proposed
• Send an email to rule-comments@ Connection With the Exchange’s Retail Rule Change to Extend the Pilot Period for the RPI);
and 74115 (January 22, 2015), 80 FR 4324 (January
sec.gov. Please include File Number SR– Price Improvement Program 27, 2015) (Order Granting an Extension to Limited
MSRB–2016–08 on the subject line. Exemption From Rule 612(c) of Regulation NMS in
June 28, 2016. Connection With the Exchange’s Retail Price
Paper Comments Improvement Program); 76965 (January 22, 2016),
On November 27, 2012, the Securities
• Send paper comments in triplicate and Exchange Commission
81 FR 4682 (January 27, 2016) (SR–BYX–2016–01)
(Notice of Filing and Immediate Effectiveness of a
to Secretary, Securities and Exchange (‘‘Commission’’) issued an order Proposed Rule Change to Extend the Pilot Period for
Commission, 100 F Street NE., pursuant to its authority under Rule the RPI); 76953 (January 21, 2016), 81 FR 4728
Washington, DC 20549. 612(c) of Regulation NMS (‘‘Sub-Penny (January 27, 2016) (Order Granting an Extension to
Limited Exemption From Rule 612(c) of Regulation
sradovich on DSK3GDR082PROD with NOTICES
All submissions should refer to File Rule’’) 1 that granted the BATS BYX– NMS in Connection With the Exchange’s Retail
Number SR–MSRB–2016–08. This file Exchange, Inc. (‘‘BYX’’ or the Price Improvement Program).
number should be included on the ‘‘Exchange’’) a limited exemption from 4 See letter from Anders Franzon, Senior Vice
subject line if email is used. To help the the Sub-Penny Rule in connection with President and Associate General Counsel, BYX, to
Brent J. Fields, Secretary, Commission, dated June
Commission process and review your the operation of the Exchange’s Retail 23, 2016.
5 See SR-BatsBYX–2016–15.
12 15 U.S.C. 78s(b)(3)(A). 14 17 CFR 200.30–3(a)(12). 6 See RPI Approval Order, supra note 2, at 77 FR
13 17 CFR 240.19b–4(f)(1). 1 17 CFR 242.612(c). at 71657.
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![43690 Federal Register / Vol. 81, No. 128 / Tuesday, July 5, 2016 / Notices
of Regulation NMS, the Exchange is I. Self-Regulatory Organization’s lack of a central clearing counterparty to
granted a limited exemption from Rule Statement of the Terms of Substance of clear and settle CDS.7 On July 21, 2010,
612(c) of Regulation NMS that allows it the Proposed Rule Change President Obama signed into law the
to accept and rank orders priced equal FINRA is proposing to extend to July Dodd-Frank Wall Street Reform and
to or greater than $1.00 per share in 18, 2017 the implementation of FINRA Consumer Protection Act (the ‘‘Dodd-
increments of $0.001, in connection Rule 4240. FINRA Rule 4240 Frank Act’’),8 Title VII of which
with the operation of its RPI Program. implements an interim pilot program established a comprehensive new
The limited and temporary exemption with respect to margin requirements for regulatory framework for swaps and
extended by this Order is subject to certain transactions in credit default security-based swaps,9 including certain
modification or revocation if at any time swaps that are security-based swaps. CDS. The new legislation was intended,
the Commission determines that such The text of the proposed rule change among other things, to enhance the
action is necessary or appropriate in is available on FINRA’s Web site at authority of regulators to implement
furtherance of the purposes of the http://www.finra.org, at the principal new rules designed to reduce risk,
Securities Exchange Act of 1934. office of FINRA and at the increase transparency, and promote
Responsibility for compliance with any Commission’s Public Reference Room. market integrity with respect to such
applicable provisions of the federal products.
securities laws must rest with the II. Self-Regulatory Organization’s Pursuant to Title VII of the Dodd-
persons relying on the exemptions that Statement of the Purpose of, and Frank Act, the CFTC and the
are the subject of this Order. Statutory Basis for, the Proposed Rule Commission are engaged in ongoing
Change rulemaking with respect to swaps and
For the Commission, by the Division of
In its filing with the Commission, security-based swaps.10 The
Trading and Markets, pursuant to delegated
authority.7 FINRA included statements concerning Commission has, among other things,
the purpose of and basis for the proposed rules with respect to capital,
Robert W. Errett,
proposed rule change and discussed any margin and segregation requirements for
Deputy Secretary. security-based swap dealers and major
comments it received on the proposed
[FR Doc. 2016–15756 Filed 7–1–16; 8:45 am] security-based swap participants and
rule change. The text of these statements
BILLING CODE 8011–01–P
may be examined at the places specified capital requirements for broker-
in Item IV below. FINRA has prepared dealers.11 FINRA believes it is
summaries, set forth in sections A, B, appropriate to extend the Interim Pilot
SECURITIES AND EXCHANGE Program for a limited period, to July 18,
and C below, of the most significant
COMMISSION 2017, in light of the continuing
aspects of such statements.
[Release No. 34–78182; File No. SR–FINRA– A. Self-Regulatory Organization’s 7 See Approval Order, 74 FR at 25588–89.
2016–020] Statement of the Purpose of, and 8 See Dodd-Frank Wall Street Reform and
Statutory Basis for, the Proposed Rule Consumer Protection Act, Pub. L. 111–203, 124
Self-Regulatory Organizations;
Change Stat. 1376 (2010).
Financial Industry Regulatory 9 The terms ‘‘swap’’ and ‘‘security-based swap’’
Authority, Inc.; Notice of Filing and 1. Purpose are defined in Sections 721 and 761 of the Dodd-
Immediate Effectiveness of a Proposed On May 22, 2009, the Commission Frank Act. The Commodity Futures Trading
Rule Change To Extend the Commission (‘‘CFTC’’) and the Commission jointly
approved FINRA Rule 4240,4 which have approved rules to further define these terms.
Implementation of FINRA Rule 4240 implements an interim pilot program See Securities Exchange Act Release No. 67453
(Margin Requirements for Credit (the ‘‘Interim Pilot Program’’) with (July 18, 2012), 77 FR 48208 (August 13, 2012)
Default Swaps) respect to margin requirements for (Joint Final Rule; Interpretations; Request for
Comment on an Interpretation: Further Definition of
June 28, 2016. certain transactions in credit default ‘‘Swap,’’ ‘‘Security-Based Swap,’’ and ‘‘Security-
Pursuant to Section 19(b)(1) of the swaps (‘‘CDS’’).5 On May 20, 2015, Based Swap Agreement’’; Mixed Swaps; Security-
FINRA filed a proposed rule change for Based Swap Agreement Recordkeeping). See also
Securities Exchange Act of 1934 Securities Exchange Act Release No. 66868 (April
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 immediate effectiveness extending the 27, 2012), 77 FR 30596 (May 23, 2012) (Joint Final
notice is hereby given that on June 15, implementation of FINRA Rule 4240 to Rule; Joint Interim Final Rule; Interpretations:
July 18, 2016.6 Further Definition of ‘‘Swap Dealer,’’ ‘‘Security-
2016, Financial Industry Regulatory
As explained in the Approval Order, Based Swap Dealer,’’ ‘‘Major Swap Participant,’’
Authority, Inc. (‘‘FINRA’’) filed with the ‘‘Major Security-Based Swap Participant’’ and
FINRA Rule 4240, coterminous with
Securities and Exchange Commission ‘‘Eligible Contract Participant’’).
certain Commission actions, was
(‘‘SEC’’ or ‘‘Commission’’) the proposed 10 See, e.g., Securities Exchange Act Release No.
intended to address concerns arising 67177 (June 11, 2012), 77 FR 35625 (June 14, 2012)
rule change as described in Items I, II,
from systemic risk posed by CDS, (Notice of Statement of General Policy with Request
and III below, which Items have been for Public Comment: Statement of General Policy on
including, among other things, risks to
prepared by FINRA. FINRA has the Sequencing of the Compliance Dates for Final
the financial system arising from the
designated the proposed rule change as Rules Applicable to Security-Based Swaps Adopted
constituting a ‘‘non-controversial’’ rule Pursuant to the Securities Exchange Act of 1934
4 See Securities Exchange Act Release No. 59955
and the Dodd-Frank Wall Street Reform and
change under paragraph (f)(6) of Rule (May 22, 2009), 74 FR 25586 (May 28, 2009) (Order Consumer Protection Act).
19b–4 under the Act,3 which renders Approving File No. SR–FINRA–2009–012) 11 See Securities Exchange Act Release No. 68071
the proposal effective upon receipt of (‘‘Approval Order’’). (October 18, 2012), 77 FR 70214 (November 23,
5 In March 2012, the SEC approved amendments
this filing by the Commission. The 2012) (Proposed Rule: Capital, Margin, and
to FINRA Rule 4240 that, among other things, limit Segregation Requirements for Security-Based Swap
sradovich on DSK3GDR082PROD with NOTICES
Commission is publishing this notice to at this time the rule’s application to credit default Dealers and Major Security-Based Swap
solicit comments on the proposed rule swaps that are security-based swaps. See Securities Participants and Capital Requirements for Broker-
change from interested persons. Exchange Act Release No. 66527 (March 7, 2012), Dealers). See also Securities Exchange Act Release
77 FR 14850 (March 13, 2012) (Order Approving No. 71958 (April 17, 2014), 79 FR 25194 (May 2,
File No. SR–FINRA–2012–015). 2014) (Proposed Rule: Recordkeeping and Reporting
7 17 CFR 200.30–3(a)(83). 6 See Securities Exchange Act Release No. 75069 Requirements for Security-Based Swap Dealers,
1 15 U.S.C. 78s(b)(1). (May 29, 2015), 80 FR 31931 (June 4, 2015) (Notice Major Security-Based Swap Participants, and
2 17 CFR 240.19b–4.
of Filing and Immediate Effectiveness of File No. Broker-Dealers; Capital Rule for Certain Security-
3 17 CFR 240.19b–4(f)(6). SR–FINRA–2015–013). Based Swap Dealers).
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Document Created: 2016-07-01 23:50:18
Document Modified: 2016-07-01 23:50:18
| 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 43689 |
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