81 FR 63821 - Self Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Article 20, Rule 13(b) To Modify Certain Data Collection Requirements of the Regulation NMS Plan To Implement a Tick Size Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 180 (September 16, 2016)

Page Range		63821-63825
FR Document		2016-22251
Federal Register, Volume 81 Issue 180 (Friday, September 16, 2016)
[Federal Register Volume 81, Number 180 (Friday, September 16, 2016)]
[Notices]
[Pages 63821-63825]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-22251]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78812; File No. SR-CHX-2016-17]


Self Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend Article 20, Rule 13(b) To Modify Certain Data Collection 
Requirements of the Regulation NMS Plan To Implement a Tick Size Pilot 
Program

September 12, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on August 29, 2016, the Chicago Stock Exchange, Inc. (``CHX'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CHX proposes to amend Article 20, Rule 13(b) to modify certain data 
collection requirements of the Regulation NMS Plan to Implement a Tick 
Size Pilot Program.
    CHX has designated this proposed rule change as non-controversial 
pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-4(f)(6) \4\ 
thereunder and has provided the Commission with the notice required by 
Rule 19b-4(f)(6)(iii).\5\
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    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ 17 CFR 240.19b-4(f)(6)(iii).
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    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

[[Page 63822]]

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 Changes

1. Purpose
    On August 25, 2014, the Exchange, and several other self-regulatory 
organizations (the ``Plan Participants'' \6\) filed with the 
Commission, pursuant to Section 11A of the Act \7\ and Rule 608 of 
Regulation NMS thereunder,\8\ the Plan to Implement a Tick Size Pilot 
Program (the ``Plan'').\9\ The Plan Participants filed the Plan to 
comply with an order issued by the Commission on June 24, 2014.\10\ The 
Plan \11\ was published for comment in the Federal Register on November 
7, 2014, and approved by the Commission, as modified, on May 6, 
2015.\12\
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    \6\ A ``Participant'' is a ``member'' of the Exchange for 
purposes of the Act. See CHX Article 1, Rule 1(s). For clarity, the 
Exchange proposes to utilize the term ``CHX Participant'' when 
referring to members of the Exchange and the term ``Plan 
Participant'' when referring to Participants of the Plan.
    \7\ 15 U.S.C. 78k-1.
    \8\ 17 CFR 242.608.
    \9\ See Letter from Brendon J. Weiss, Vice President, 
Intercontinental Exchange, Inc., to Secretary, Commission, dated 
August 25, 2014.
    \10\ See Securities Exchange Act Release No. 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014).
    \11\ Unless otherwise specified, capitalized terms used in this 
rule filing are based on the defined terms of the Plan.
    \12\ See Securities Exchange Act Release No. 74892 (May 6, 
2015), 80 FR 27513 (May 13, 2015) (``Approval Order'').
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    The Plan is designed to allow the Commission, market participants, 
and the public to study and assess the impact of increment conventions 
on the liquidity and trading of the common stocks of small-
capitalization companies. Each Plan Participant is required to comply, 
and to enforce compliance by its members, as applicable, with the 
provisions of the Plan.
    The Plan provides for the creation of a group of Pilot Securities, 
which shall be placed in a control group and three separate test 
groups, with each subject to varying quoting and trading increments. 
Pilot Securities in the control group will be quoted at the current 
tick size increment of $0.01 per share and will trade at the currently 
permitted increments. Pilot Securities in the first test group will be 
quoted in $0.05 minimum increments but will continue to trade at any 
price increment that is currently permitted.\13\ Pilot Securities in 
the second test group (``Test Group Two'') will be quoted in $0.05 
minimum increments and will trade at $0.05 minimum increments subject 
to a midpoint exception, a retail investor order exception, and a 
negotiated trade exception.\14\ Pilot Securities in the third test 
group (``Test Group Three'') will be subject to the same quoting and 
trading increments as Test Group Two, and also will be subject to the 
``Trade-at'' requirement to prevent price matching by a market 
participant that is not displaying at the price of a Trading Center's 
``Best Protected Bid'' or ``Best Protected Offer,'' unless an 
enumerated exception applies.\15\ In addition to the exceptions 
provided under Test Group Two, an exception for Block Size orders and 
exceptions that mirror those under Rule 611 of Regulation NMS \16\ will 
apply to the Trade-at requirement.
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    \13\ See Section VI(B) of the Plan.
    \14\ See Section VI(C) of the Plan.
    \15\ See Section VI(D) of the Plan.
    \16\ 17 CFR 242.611.
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    The Plan also requires a Trading Center \17\ or a Market Maker \18\ 
to collect and transmit certain data to its designated examining 
authority (``DEA''), and requires DEAs to transmit this data to the 
Commission. Plan Participants that operate a Trading Center also are 
required under the Plan to collect certain data, which is then 
transmitted directly to the Commission. With respect to Trading 
Centers, Appendix B.I to the Plan (Market Quality Statistics) requires 
a Trading Center to submit to the Plan Participant that is its DEA a 
variety of market quality statistics. Appendix B.II to the Plan (Market 
and Marketable Limit Order Data) requires a Trading Center to submit 
information to its DEA relating to market orders and marketable limit 
orders, including the time of order receipt, order type, the order 
size, and the National Best Bid and National Best Offer quoted price.
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    \17\ The Plan incorporates the definition of a ``Trading 
Center'' from Rule 600(b)(78) of Regulation NMS. Regulation NMS 
defines a ``Trading Center'' as ``a national securities exchange or 
national securities association that operates an SRO trading 
facility, an alternative trading system, an exchange market maker, 
an OTC market maker, or any other broker or dealer that executes 
orders internally by trading as principal or crossing orders as 
agent.'' See 17 CFR 242.600(b).
    \18\ The Plan defines a Market Maker as ``a dealer registered 
with any self-regulatory organization, in accordance with the rules 
thereof, as (i) a market maker or (ii) a liquidity provider with an 
obligation to maintain continuous, two-sided trading interest.''
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    With respect to Market Makers, Appendix B.III requires a Plan 
Participant that is a national securities exchange to collect daily 
Market Maker Registration statistics. Appendix B.IV requires a Plan 
Participant to collect data related to Market Maker participation with 
respect to each Market Maker engaging in trading activity on a Trading 
Center operated by the Plan Participant. Appendix C.I requires a Plan 
Participant to collect data related to Market Maker profitability from 
each Market Maker for which it is the DEA. Appendix C.II requires the 
Plan Participant, as DEA, to aggregate the Appendix C.I data, and to 
transmit this data to the Commission.
    The Commission approved the Pilot on a two-year basis, with 
implementation to begin no later than May 6, 2016.\19\ On November 6, 
2015, the SEC exempted the Plan Participants from implementing the 
pilot until October 3, 2016.\20\ As set forth in Appendices B and C to 
the Plan, data that is reported pursuant to the appendices shall be 
provided for dates starting six months prior to the Pilot Period 
through six months after the end of the Pilot Period. Under the revised 
Pilot implementation date, the Pre-Pilot data collection period 
commenced on April 4, 2016.
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    \19\ See Approval Order at 27533 and 27545.
    \20\ See Securities Exchange Act Release No. 76382 (November 6, 
2015), 80 FR 70284 (November 13, 2015) (File No. 4-657).
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    On March 28, 2016, the Exchange filed with the Commission a 
proposed rule change to adopt Article 20, Rule 13(b) to implement the 
data collection requirements of the Plan, which was immediately 
effective upon filing.\21\ On December 9, 2015, FINRA, on behalf of the 
Plan Participants, submitted an exemptive request to the Commission, 
seeking an exemption from certain data collection and reporting 
requirements set forth in the Plan.\22\
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    \21\ See Securities Exchange Act Release No. 77469 (March 29, 
2016), 81 FR 19275 (April 4, 2016) (SR-CHX-2016-03).
     The Exchange also submitted a proposed rule change to implement 
the quoting and trading requirements of the Plan. See Securities 
Exchange Act Release No. 78146 (June 23, 2016), 81 FR 42380 (June 
29, 2016) (SR-CHX-2016-09).
    \22\ See Letter from Marcia E. Asquith, Senior Vice President 
and Corporate Secretary, FINRA, to Robert W. Errett, Deputy 
Secretary, Commission, dated December 9, 2015 (``Exemptive 
Request''). The Commission, pursuant to its authority under Rule 
608(e) of Regulation NMS, granted the Exchange a limited exemption 
from the requirement to comply with certain provisions of the Plan 
as specified in the letter and noted herein. See letter from John C. 
Roeser, Associate Director, Division of Trading and Markets, 
Commission, to Albert Kim, Vice President and Associate General 
Counsel, CHX, dated April 4, 2016 (``Exemption Letter'').
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    The Exchange now proposes to further amend Article 20, Rule 13(b) 
to modify additional data collection and reporting requirements.\23\ 
First,

[[Page 63823]]

Appendix B.I.a(21) through B.I.a(27) currently requires that Trading 
Centers report the cumulative number of shares of cancelled orders 
during a specified duration of time after receipt of the order that was 
cancelled. The Exchange and the other Plan Participants believe that, 
for purposes of reporting cancelled orders, it is appropriate to 
categorize unexecuted Immediate or Cancel orders separately as one 
bucket irrespective of the duration of time after order receipt, i.e., 
without a time increment, to better differentiate orders cancelled 
subsequent to entry from those where the customer's intent prior to 
order entry was to cancel the order if no execution could be 
immediately obtained. The Exchange, therefore, proposes to modify 
Interpretations and Policies paragraph .04 to provide that unexecuted 
Immediate or Cancel orders shall be categorized separately for purposes 
of Appendix B.I.a(21) through B.I.a(27).
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    \23\ The Exchange notes that, in connection with this proposed 
rule change, FINRA, on behalf of the Plan Participants, intends to 
file an exemptive request seeking relief from certain of the Plan's 
data collection requirements.
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    The second change relates to the reporting of daily market quality 
statistics pursuant to Appendix B.I. Currently, Appendix B.I sets forth 
categories of orders, including market orders, marketable limit orders, 
and inside-the-quote resting limit orders, for which daily market 
quality statistics must be reported. The Exchange and the other Plan 
Participants have determined that it is appropriate to include an order 
type for limit orders priced more than $0.10 away from the NBBO for 
purposes of Appendix B reporting. The Exchange therefore proposes to 
amend Interpretations and Policies paragraph .06 to provide that limit 
orders priced more than $0.10 away from the NBBO shall be included as 
an order type for purposes of Appendix B reporting, and shall be 
assigned the number (22). These orders are not currently required to be 
reported pursuant to Appendix B, and the Exchange and the other Plan 
Participants believe that requiring the reporting of such orders will 
produce a more comprehensive data set.
    The third change relates to the reporting of market quality 
statistics pursuant to Appendix B.I for a variety of order types, 
including inside-the-quote resting limit orders (12), at-the-quote 
resting limit orders (13), and near-the-quote resting limit orders 
(within $0.10 of the NBBO) (14). The Exchange and the other Plan 
Participants believe that it is appropriate to require Trading Centers 
to report all orders that fall within these categories, and not just 
those orders that are ``resting.'' The Exchange, therefore, proposes to 
amend Interpretations and Policies paragraph .06 to make this change.
    In the fourth change, the Exchange proposes to add new 
Interpretations and Policies paragraph .09 to modify the manner in 
which market maker participation statistics are calculated. Currently, 
Appendix B.IV provides that market maker participation statistics shall 
be calculated based on share participation, trade participation, cross-
quote share (trade) participation, inside-the-quote share (trade) 
participation, at-the-quote share (trade) participation, and outside-
the-quote share (trade) participation. The Exchange and the other Plan 
Participants have determined that it is appropriate to add the count of 
the number of Market Makers used in the calculation of share (trade) 
participation to each category. The Exchange is therefore proposing 
this change as part of Interpretations and Policies paragraph .09. In 
addition, Appendix B.IV(b) and (c) currently require that, when 
aggregating across Market Makers, share participation and trade 
participation shall be calculated using the share-weighted average and 
trade-weighted average, respectively. The Exchange and the other Plan 
Participants believe that it is more appropriate to calculate share and 
trade participation by providing the total count of shares or trades, 
as applicable, rather than weighted averages, and the Exchange is 
therefore proposing this change as part of Interpretations and Policies 
paragraph .09.
    The fifth change relates to the NBBO that a Trading Center is 
required to use when performing certain quote-related calculations. 
When calculating cross-quote share (trade) participation pursuant to 
Appendix B.IV(d) and inside-the-quote share (trade) participation 
pursuant to Appendix B.IV(e), the Plan requires the Trading Center to 
utilize the NBBO at the time of the trade for both share and trade 
participation calculations. When calculating at-the-quote share (trade) 
participation and outside-the-quote share (trade) participation 
pursuant to Appendix B.IV(f) and (g), the Plan allows the Trading 
Center to utilize the National Best Bid or National Best Offer (NBBO) 
at the time of or immediately before the trade for both share and trade 
participation calculations. The Exchange and the other Plan 
Participants believe that it is appropriate to calculate all quote 
participation (cross-quote share (trade) participation, inside-the-
quote share (trade) participation, at-the-quote share (trade) 
participation and outside-the-quote share (trade) participation) solely 
by reference to the NBBO in effect immediately prior to the trade. The 
Exchange therefore proposes to make this change as part of 
Interpretations and Policies paragraph .09.
    Finally, the Exchange proposes to change the end date until which 
the Pre-Pilot Data Collection Securities shall be used to fulfill the 
Plan's data collection requirements. Currently, Interpretations and 
Policies paragraph .10 provides that Pre-Pilot Data Collection 
Securities are the securities designated by the Plan Participants for 
purposes of the data collection requirements described in Items I, II 
and IV of Appendix B and Item I of Appendix C to the Plan for the 
period beginning six months prior to the Pilot Period and ending on the 
trading day immediately preceding the Pilot Period. The Exchange and 
the other Plan Participants believe that it is appropriate to use the 
Pilot Securities to satisfy the Plan's data collection requirements 
prior to the commencement of the Pilot. According, the Exchange is 
revising Interpretations and Policies paragraph .10 (which will be re-
numbered as Interpretations and Policies paragraph .11) to provide that 
the Pre-Pilot Data Collection Securities shall be used to satisfy the 
Plan's data collection requirements through thirty-one days prior to 
the Pilot Period, after which time the Pilot Securities shall be used 
for purposes of the data collection requirements.\24\
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    \24\ After regular trading hours on September 2, 2016, the 
national securities exchanges will establish which securities will 
be included as Pilot Securities for purposes of the Plan. The 
Exchange and the other Plan Participants have determined that 
members should use the Pilot Securities list for data collection 
purposes once it becomes available. Thus, the proposed rule change 
requires that, beginning thirty days prior to the first day of the 
Pilot Period--i.e., September 3, 2016--the Exchange and CHX 
Participants will comply with the data collection obligations of the 
Plan by collecting data on the Pilot Securities. As a result, 
beginning on September 3, 2016, CHX Participants must migrate from 
using the Exchange's published Pre-Pilot Data Collection Security 
list and begin using the Pilot Securities list. September 2, 2016 
will be the last day that CHX Participants use the Pre-Pilot Data 
Collection Security list.
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    The Exchange has filed the proposed rule change for immediate 
effectiveness. The Exchange has requested that the SEC waive the 30-day 
operative period so that the proposed rule change can become operative 
on August 30, 2016.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \25\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \26\ in particular, in that it is designed to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in

[[Page 63824]]

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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    \25\ 15 U.S.C. 78f(b).
    \26\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that this proposal is consistent with the Act 
because it implements and clarifies the provisions of the Plan, and is 
designed to assist the Exchange in meeting its regulatory obligations 
pursuant to the Plan. In approving the Plan, the SEC noted that the 
Pilot was an appropriate, data-driven test that was designed to 
evaluate the impact of a wider tick size on trading, liquidity, and the 
market quality of securities of smaller capitalization companies, and 
was therefore in furtherance of the purposes of the Act. The Exchange 
believes that this proposal is in furtherance of the objectives of the 
Plan, as identified by the SEC, and is therefore consistent with the 
Act because the proposal implements and clarifies the requirements of 
the Plan.

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

    The Exchange notes that the proposed rule change implements the 
provisions of the Plan, and is designed to assist the Exchange in 
meeting its regulatory obligations pursuant to the Plan. The Exchange 
also notes that, other than the change to require use of the Pilot 
Securities beginning thirty days prior to the beginning of the Pilot 
Period, the proposed changes will not affect the data collection and 
reporting requirements for CHX Participants that operate Trading 
Centers; the proposed changes will only affect how the Exchange and 
Plan Participants that operate Trading Centers collect and report data. 
The Exchange notes that, with respect to the change to require the use 
of the Pilot Securities beginning thirty days prior to the start of the 
Pilot Period, the proposed change reduces the number of securities on 
which affected CHX Participants otherwise would have been required to 
collect data pursuant to the Plan and Article 20, Rule 13(b). In 
addition, the proposed rule change applies equally to all similarly 
situated CHX Participants. Therefore, 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.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \27\ and Rule 19b-4(f)(6) \28\ thereunder 
because the proposal does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; and (iii) by its terms, become operative for 30 days 
from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest.
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    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \29\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\30\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that so that the 
proposed rule change can become operative on August 30, 2016.
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    \29\ 17 CFR 240.19b-4(f)(6).
    \30\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to implement the proposed rules 
immediately thereby preventing delays in the implementation of the 
Plan. The Commission notes that the Plan is scheduled to start on 
October 3, 2016. Therefore, the Commission hereby waives the 30-day 
operative delay and designates the proposed rule change to be operative 
upon filing with the Commission.\31\
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    \31\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.\32\
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    \32\ 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 No. SR-CHX-2016-17 on the subject line.

Paper Comments

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

All submissions should refer to File No. SR-CHX-2016-17. 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 changes 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 the filing also will be available 
for inspection and copying at the principal office of the CHX. 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 No. SR-CHX-2016-17 and should be 
submitted on or before October 7, 2016.


[[Page 63825]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\33\
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    \33\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-22251 Filed 9-15-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Notices 63821

shorter time as the Commission may • Send an email to rule-comments@ SECURITIES AND EXCHANGE
designate, if consistent with the sec.gov. Please include File Number SR– COMMISSION
protection of investors and the public NYSEARCA–2016–124 on the subject
[Release No. 34–78812; File No. SR–CHX–
interest. line. 2016–17]
A proposed rule change filed under
Rule 19b–4(f)(6) 25 normally does not Paper Comments
Self Regulatory Organizations;
become operative prior to 30 days after • Send paper comments in triplicate Chicago Stock Exchange, Inc.; Notice
the date of the filing. However, pursuant to Brent J. Fields, Secretary, Securities of Filing and Immediate Effectiveness
to Rule 19b4(f)(6)(iii),26 the Commission and Exchange Commission, 100 F Street of a Proposed Rule Change To Amend
may designate a shorter time if such Article 20, Rule 13(b) To Modify Certain
NE., Washington, DC 20549–1090.
action is consistent with the protection Data Collection Requirements of the
of investors and the public interest. The All submissions should refer to File Regulation NMS Plan To Implement a
Exchange has asked the Commission to Number SR–NYSEARCA–2016–124. Tick Size Pilot Program
waive the 30-day operative delay so that This file number should be included on
the proposal may become operative the subject line if email is used. To help September 12, 2016.
immediately upon filing. the Commission process and review Pursuant to Section 19(b)(1) of the
The Commission believes that your comments more efficiently, please Securities Exchange Act of 1934
waiving the 30 day operative delay is use only one method. The Commission (‘‘Act’’),1 and Rule 19b–4 2 thereunder,
consistent with the protection of will post all comments on the notice is hereby given that on August
investors and the public interest 29, 2016, the Chicago Stock Exchange,
Commission’s Internet Web site (http://
because it will allow the Exchange to Inc. (‘‘CHX’’ or the ‘‘Exchange’’) filed
www.sec.gov/rules/sro.shtml). Copies of
implement the proposed rules with the Securities and Exchange
the submission, all subsequent
immediately thereby preventing delays Commission (‘‘Commission’’) the
amendments, all written statements proposed rule change as described in
in the implementation of the Plan. The with respect to the proposed rule
Commission notes that the Plan is Items I and II below, which Items have
change that are filed with the been prepared by the Exchange. The
scheduled to start on October 3, 2016.
Commission, and all written Commission is publishing this notice to
Therefore, the Commission hereby
communications relating to the solicit comments on the proposed rule
waives the 30 day operative delay and
proposed rule change between the change from interested persons.
designates the proposed rule change to
be operative upon filing with the Commission and any person, other than
those that may be withheld from the I. Self-Regulatory Organization’s
Commission.27 Statement of the Terms of Substance of
At any time within 60 days of the public in accordance with the
the Proposed Rule Change
filing of such proposed rule change, the provisions of 5 U.S.C. 552, will be
Commission summarily may available for Web site viewing and CHX proposes to amend Article 20,
temporarily suspend such rule change if printing in the Commission’s Public Rule 13(b) to modify certain data
it appears to the Commission that such Reference Room, 100 F Street NE., collection requirements of the
action is necessary or appropriate in the Washington, DC 20549 on official Regulation NMS Plan to Implement a
public interest, for the protection of business days between the hours of Tick Size Pilot Program.
10:00 a.m. and 3:00 p.m. Copies of the CHX has designated this proposed
investors, or otherwise in furtherance of
filing also will be available for rule change as non-controversial
the purposes of the Act. If the
inspection and copying at the principal pursuant to Section 19(b)(3)(A) 3 of the
Commission takes such action, the
Act and Rule 19b–4(f)(6) 4 thereunder
Commission shall institute proceedings office of the Exchange. All comments
and has provided the Commission with
under Section 19(b)(2)(B) 28 of the Act to received will be posted without change;
the notice required by Rule 19b–
determine whether the proposed rule the Commission does not edit personal
4(f)(6)(iii).5
change should be approved or identifying information from The text of this proposed rule change
disapproved. submissions. You should submit only is available on the Exchange’s Web site
IV. Solicitation of Comments information that you wish to make at (www.chx.com) and in the
available publicly. All submissions Commission’s Public Reference Room.
Interested persons are invited to should refer to File Number SR–
submit written data, views, and NYSEARCA–2016–124 and should be II. Self-Regulatory Organization’s
arguments concerning the foregoing, submitted on or before October 7, 2016. Statement of the Purpose of, and
including whether the proposed rule Statutory Basis for, the Proposed Rule
change is consistent with the Act. For the Commission, by the Division of Change
Comments may be submitted by any of Trading and Markets, pursuant to delegated
authority.29 In its filing with the Commission, the
the following methods: CHX included statements concerning
Robert W. Errett,
Electronic Comments the purpose of and basis for the
Deputy Secretary. proposed rule changes and discussed
• Use the Commission’s Internet [FR Doc. 2016–22253 Filed 9–15–16; 8:45 am] any comments it received on the
comment form (http://www.sec.gov/ BILLING CODE 8011–01–P proposed rule change. The text of these
rules/sro.shtml); or
statements may be examined at the
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places specified in Item IV below. The
25 17 CFR 240.19b–4(f)(6).
26 17
CHX has prepared summaries, set forth
CFR 240.19b–4(f)(6)(iii).
27 For Purposes only of waiving the operative
1 15 U.S.C. 78s(b)(1).
delay for this proposal the Commission has
2 17 CFR 240.19b–4.
considered the proposed rule’s impact on
3 15 U.S.C. 78s(b)(3)(A).
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). 4 17 CFR 240.19b–4(f)(6).
28 15 U.S.C. 78s(b)(2)(B). 29 17 CFR 200.30–3(a)(12). 5 17 CFR 240.19b–4(f)(6)(iii).

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63824 Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Notices

facilitating transactions in securities, to C. Self-Regulatory Organization’s investors, or otherwise in furtherance of
remove impediments to and perfect the Statement on Comments Regarding the the purposes of the Act.32
mechanism of a free and open market Proposed Rule Changes Received From
IV. Solicitation of Comments
and a national market system and, in Members, Participants or Others
general, to protect investors and the No written comments were either Interested persons are invited to
public interest. solicited or received. submit written data, views and
The Exchange believes that this arguments concerning the foregoing,
III. Date of Effectiveness of the including whether the proposal is
proposal is consistent with the Act Proposed Rule Changes and Timing for consistent with the Act. Comments may
because it implements and clarifies the Commission Action be submitted by any of the following
provisions of the Plan, and is designed
The foregoing rule change has become methods:
to assist the Exchange in meeting its
regulatory obligations pursuant to the effective pursuant to Section 19(b)(3)(A) Electronic Comments
of the Act 27 and Rule 19b–4(f)(6) 28
Plan. In approving the Plan, the SEC
thereunder because the proposal does • Use the Commission’s Internet
noted that the Pilot was an appropriate,
not: (i) Significantly affect the comment form (http://www.sec.gov/
data-driven test that was designed to rules/sro.shtml); or
protection of investors or the public
evaluate the impact of a wider tick size
on trading, liquidity, and the market
interest; (ii) impose any significant • Send an email to rule-comments@
burden on competition; and (iii) by its sec.gov. Please include File No. SR–
quality of securities of smaller terms, become operative for 30 days CHX–2016–17 on the subject line.
capitalization companies, and was from the date on which it was filed, or
therefore in furtherance of the purposes such shorter time as the Commission Paper Comments
of the Act. The Exchange believes that may designate if consistent with the • Send paper comments in triplicate
this proposal is in furtherance of the protection of investors and the public to Robert W. Errett, Deputy Secretary,
objectives of the Plan, as identified by interest. Securities and Exchange Commission,
the SEC, and is therefore consistent with A proposed rule change filed under 100 F Street NE., Washington, DC
the Act because the proposal Rule 19b–4(f)(6) 29 normally does not 20549–1090.
implements and clarifies the become operative prior to 30 days after
requirements of the Plan. the date of the filing. However, pursuant All submissions should refer to File No.
to Rule 19b–4(f)(6)(iii),30 the SR–CHX–2016–17. This file number
B. Self-Regulatory Organization’s Commission may designate a shorter should be included on the subject line
Statement of Burden on Competition time if such action is consistent with the if email is used. To help the
protection of investors and the public Commission process and review your
The Exchange notes that the proposed comments more efficiently, please use
rule change implements the provisions interest. The Exchange has asked the
Commission to waive the 30-day only one method. The Commission will
of the Plan, and is designed to assist the post all comments on the Commission’s
operative delay so that so that the
Exchange in meeting its regulatory Internet Web site (http://www.sec.gov/
proposed rule change can become
obligations pursuant to the Plan. The rules/sro.shtml). Copies of the
operative on August 30, 2016.
Exchange also notes that, other than the The Commission believes that submission, all subsequent
change to require use of the Pilot waiving the 30-day operative delay is amendments, all written statements
Securities beginning thirty days prior to consistent with the protection of with respect to the proposed rule
the beginning of the Pilot Period, the investors and the public interest change that are filed with the
proposed changes will not affect the because it will allow the Exchange to Commission, and all written
data collection and reporting implement the proposed rules communications relating to the
requirements for CHX Participants that immediately thereby preventing delays proposed rule changes between the
operate Trading Centers; the proposed in the implementation of the Plan. The Commission and any person, other than
changes will only affect how the Commission notes that the Plan is those that may be withheld from the
Exchange and Plan Participants that scheduled to start on October 3, 2016. public in accordance with the
operate Trading Centers collect and Therefore, the Commission hereby provisions of 5 U.S.C. 552, will be
report data. The Exchange notes that, waives the 30-day operative delay and available for Web site viewing and
with respect to the change to require the designates the proposed rule change to printing in the Commission’s Public
use of the Pilot Securities beginning be operative upon filing with the Reference Room, 100 F Street NE.,
thirty days prior to the start of the Pilot Commission.31 Washington, DC 20549 on official
Period, the proposed change reduces the At any time within 60 days of the business days between the hours of
number of securities on which affected filing of the proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the
CHX Participants otherwise would have Commission summarily may filing also will be available for
temporarily suspend such rule change if inspection and copying at the principal
been required to collect data pursuant to
it appears to the Commission that such office of the CHX. All comments
the Plan and Article 20, Rule 13(b). In
action is necessary or appropriate in the received will be posted without change;
addition, the proposed rule change the Commission does not edit personal
applies equally to all similarly situated public interest, for the protection of
identifying information from
CHX Participants. Therefore, the submissions. You should submit only
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27 15 U.S.C. 78s(b)(3)(A).
Exchange does not believe that the 28 17 information that you wish to make
CFR 240.19b–4(f)(6).
proposed rule change will result in any 29 17 CFR 240.19b–4(f)(6). available publicly. All submissions
burden on competition that is not 30 17 CFR 240.19b–4(f)(6)(iii). should refer to File No. SR–CHX–2016–
necessary or appropriate in furtherance 31 For purposes only of waiving the operative
17 and should be submitted on or before
of the purposes of the Act. delay for this proposal, the Commission has October 7, 2016.
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f). 32 15 U.S.C. 78s(b)(3)(C).

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Document Created: 2016-09-16 00:25:10
Document Modified: 2016-09-16 00:25:10
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 63821