81 FR 50028 - Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to NSX Rule 11.25(a), Stating it Will Utilize IEX Market Data From the CQS/UQDF for Purposes of Order Handling, Routing, and Related Compliance Processes

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 146 (July 29, 2016)

[Federal Register Volume 81, Number 146 (Friday, July 29, 2016)]
[Notices]
[Pages 50028-50029]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-17906]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78403; File No. SR-NSX-2016-06]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
to NSX Rule 11.25(a), Stating it Will Utilize IEX Market Data From the 
CQS/UQDF for Purposes of Order Handling, Routing, and Related 
Compliance Processes

July 25, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 18, 2016, National Stock Exchange, Inc. (``NSX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change, as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Exchange has designated this proposal as a ``non-controversial'' 
proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(6)(iii)'' \4\ thereunder, which renders it effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange filed a proposal to update Exchange Rule 11.25 
regarding the public disclosure of the sources of data that the 
Exchange utilizes when performing: (i) Order handling; (ii) order 
routing; and (iii) related compliance processes to reflect the 
operation of the Investors Exchange LLC (``IEX'') as a registered 
national securities exchange \5\ beginning on August 19, 2016.\6\
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    \5\ See Securities Exchange Act Release No. 78101 (June 17, 
2016), 81 FR 41141 (June 23, 2016) (``IEX Approval Order'').
    \6\ See Letter dated June 17, 2016 from Brad Katsuyama, CEO, 
IEX, to IEX's Sell-Side and Buy-Side Partners (https://www.iextrading.com/) (stating that IEX will commence a symbol-by-
symbol roll-out on August 19, 2016, concluding on September 2, 
2016).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.nsx.com, at the principal office of the Exchange, and 
at 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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change 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 Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On June 17, 2016, the Commission approved IEX's application to 
register as a national securities exchange.\7\ As part of its 
transition to exchange status, IEX has announced that it will commence 
a phased symbol-by-symbol roll-out on August 19, 2016, concluding on 
September 2, 2016.\8\ The Exchange, therefore, proposes to update Rule 
11.25(a) regarding the public disclosure of the sources of data that 
the Exchange utilizes when performing: (i) Order handling; (ii) order 
routing; and (iii) related compliance processes to reflect the 
operation of IEX as a registered national securities exchange beginning 
on August 19, 2016. Specifically, the Exchange proposes to amend Rule 
11.25(a) to include IEX by stating it will utilize IEX market data from 
the CQS/UQDF for purposes of order handling, routing, and related 
compliance processes.
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    \7\ See supra note 5.
    \8\ See supra note 6.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \9\ in general, and furthers the

[[Page 50029]]

objectives of Section 6(b)(5) of the Act \10\ in particular, in that it 
is designed to promote just and equitable principles of trade, to 
foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system and, in general, to protect investors and the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that its proposal to update Exchange Rule 
11.25(a) to include IEX will ensure that the rule correctly identifies 
and publicly states on a market-by-market basis the specific network 
processor data feeds that the Exchange utilizes for the handling, 
routing, and execution of orders, and for performing the regulatory 
compliance checks related to each of those functions. The proposed rule 
change also removes impediments to and perfects the mechanism of a free 
and open market and protects investors and the public interest because 
it provides additional specificity, clarity and transparency.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. To the contrary, 
the Exchange believes the proposal would enhance competition because 
including all of the exchanges enhances transparency and enables 
investors to better assess the quality of the Exchange's execution and 
routing services.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    A. Significantly affect the protection of investors or the public 
interest;
    B. impose any significant burden on competition; and
    C. become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate,

it has become effective pursuant to Section 19(b)(3)(A) \11\ of the 
Exchange Act and Rule 19b-4(f)(6) thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and the text of the proposed rule change, 
at least five business days prior to the date of filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied this requirement.
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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-NSX-2016-06 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NSX-2016-06. 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 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 Room, 100 F Street NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. 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-NSX-2016-06, and should be 
submitted on or before August 19, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-17906 Filed 7-28-16; 8:45 am]
 BILLING CODE 8011-01-P