81 FR 63828 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4770
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 180 (September 16, 2016)
Federal Register Volume 81, Issue 180 (September 16, 2016)
| Page Range | 63828-63831 | |
| FR Document | 2016-22250 |
[Federal Register Volume 81, Number 180 (Friday, September 16, 2016)] [Notices] [Pages 63828-63831] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-22250] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78811; File No. SR-BX-2016-048] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4770 September 12, 2016. 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 August 29, 2016, NASDAQ BX, Inc. (``BX'' or ``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 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 The Exchange proposes to amend Rule 4770 to modify certain data collection requirements of the Regulation NMS Plan to Implement a Tick Size Pilot Program. The text of the proposed rule change is available on the Exchange's Web site at http://nasdaqbx.cchwallstreet. 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 aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On August 25, 2014, BX and several other self-regulatory organizations (the ``Participants'') filed with the Commission, pursuant to Section 11A of the Act \3\ and Rule 608 of Regulation NMS thereunder,\4\ the Plan to Implement a Tick Size Pilot Program (the ``Plan'').\5\ The Participants filed the Plan to comply with an order issued by the Commission on June 24, 2014.\6\ The Plan was published for comment in the Federal Register on November 7, 2014, and approved by the Commission, as modified, on May 6, 2015.\7\ --------------------------------------------------------------------------- \3\ 15 U.S.C. 78k-1. \4\ 17 CFR 242.608. \5\ See Letter from Brendon J. Weiss, Vice President, Intercontinental Exchange, Inc., to Secretary, Commission, dated August 25, 2014. \6\ See Securities Exchange Act Release No 72460 (June 24, 2014), 79 FR 36840 (June 30, 2014). \7\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) (``Approval Order''). --------------------------------------------------------------------------- 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 stock of small- capitalization companies. Each Participant is required to comply, and to enforce compliance by its member organizations, 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.\8\ 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.\9\ 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.\10\ 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 \11\ will apply to the Trade-at requirement. --------------------------------------------------------------------------- \8\ See Section VI(B) of the Plan. \9\ See Section VI(C) of the Plan. \10\ See Section VI(D) of the Plan. \11\ 17 CFR 242.611. --------------------------------------------------------------------------- The Plan also requires a Trading Center \12\ or a Market Maker \13\ to collect [[Page 63829]] and transmit certain data to its designated examining authority (``DEA''), and requires DEAs to transmit this data to the Commission. 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 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 or National Best Offer (``NBBO'') quoted price. --------------------------------------------------------------------------- \12\ 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). \13\ 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.'' --------------------------------------------------------------------------- With respect to Market Makers, Appendix B.III requires a Participant that is a national securities exchange to collect daily Market Maker Registration statistics. Appendix B.IV requires a 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 Participant. Appendix C.I requires a Participant to collect data related to Market Maker profitability from each Market Maker for which it is the DEA. Appendix C.II requires the 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.\14\ On November 6, 2015, the SEC exempted the Participants from implementing the Pilot until October 3, 2016.\15\ 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. --------------------------------------------------------------------------- \14\ See Approval Order at 27533 and 27545. \15\ See Securities Exchange Act Release No. 76382 (November 6, 2015), 80 FR 70284 (November 13, 2015) (File No. 4-657). --------------------------------------------------------------------------- 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.\16\ On February 17, 2016, the Commission granted Participants exemptive relief from complying with certain data collection and reporting requirements in the Plan.\17\ On March 23, 2016, the Exchange filed with the Commission a proposed rule change to adopt Rule 4770 to implement the data collection requirements of the Plan, which was effective on April 4, 2016.\18\ --------------------------------------------------------------------------- \16\ 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''). \17\ See Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Marcia E. Asquith, Senior Vice President and Corporate Secretary, FINRA, dated February 17, 2016. \18\ See Securities Exchange Act Release No. 77457 (March 28, 2016), 81 FR 18913 (April 1, 2016) (SR-BX-2016-019). --------------------------------------------------------------------------- The Exchange now proposes to further amend Rule 4770 to modify additional data collection and reporting requirements.\19\ First, 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 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 Commentary .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). --------------------------------------------------------------------------- \19\ In connection with this proposed rule change and others made by Participants, FINRA intends to file an exemptive request on behalf of Participants seeking relief from certain of the Plan's data collection requirements. --------------------------------------------------------------------------- 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 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 Commentary .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 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 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 Commentary .06 to make this change. In the fourth change, the Exchange proposes to add new Commentary .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 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 Commentary .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 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 Commentary .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 [[Page 63830]] 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 NBBO at the time of or immediately before the trade for both share and trade participation calculations. The Exchange and the other 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 Commentary .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, Commentary .10 provides that Pre-Pilot Data Collection Securities are the securities designated by the 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 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. Accordingly, the Exchange is revising Commentary .10 (which will be re- numbered as Commentary .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.\20\ As noted in Item 2 of this filing, 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. --------------------------------------------------------------------------- \20\ 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 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 Exchange members 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, members 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 members use the Pre-Pilot Data Collection Security list. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\21\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\22\ in particular, in that it is designed to promote just and equitable principles of trade, 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, and Section 6(b)(8) of the Act,\23\ which requires that the Exchange not impose any burden on competition that is not necessary or appropriate. --------------------------------------------------------------------------- \21\ 15 U.S.C. 78f(b). \22\ 15 U.S.C. 78f(b)(5). \23\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- 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 on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. 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 members that operate Trading Centers; the proposed changes will only affect how the Exchange and 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 members otherwise would have been required to collect data pursuant to the Plan and Rule 4770. In addition, the proposed rule change applies equally to all similarly situated members. 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 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 has become effective pursuant to Section 19(b)(3)(A) of the Act \24\ and Rule 19b-4(f)(6) \25\ 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. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78s(b)(3)(A). \25\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \26\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\27\ 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. --------------------------------------------------------------------------- \26\ 17 CFR 240.19b-4(f)(6). \27\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest [[Page 63831]] 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.\28\ --------------------------------------------------------------------------- \28\ 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). --------------------------------------------------------------------------- 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.\29\ --------------------------------------------------------------------------- \29\ 15 U.S.C. 78s(b)(3)(C). --------------------------------------------------------------------------- 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 CommentsUse 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-BX-2016-048 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-BX-2016-048. 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 a.m. and 3 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-BX-2016-048 and should be submitted on or before October 7, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\30\ --------------------------------------------------------------------------- \30\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-22250 Filed 9-15-16; 8:45 am] BILLING CODE 8011-01-P
![63828 Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Notices
All submissions should refer to File and Exchange Commission (‘‘SEC’’ or and approved by the Commission, as
Number SR–NYSE–2016–63. This file ‘‘Commission’’) the proposed rule modified, on May 6, 2015.7
number should be included on the change as described in Items I and II The Plan is designed to allow the
subject line if email is used. To help the below, which Items have been prepared Commission, market participants, and
Commission process and review your by the Exchange. The Commission is the public to study and assess the
comments more efficiently, please use publishing this notice to solicit impact of increment conventions on the
only one method. The Commission will comments on the proposed rule change liquidity and trading of the common
post all comments on the Commission’s from interested persons. stock of small-capitalization companies.
Internet Web site (http://www.sec.gov/ Each Participant is required to comply,
rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s and to enforce compliance by its
submission, all subsequent Statement of the Terms of Substance of member organizations, as applicable,
amendments, all written statements the Proposed Rule Change with the provisions of the Plan.
with respect to the proposed rule The Plan provides for the creation of
change that are filed with the The Exchange proposes to amend a group of Pilot Securities, which shall
Commission, and all written Rule 4770 to modify certain data be placed in a control group and three
communications relating to the collection requirements of the separate test groups, with each subject
proposed rule change between the Regulation NMS Plan to Implement a to varying quoting and trading
Commission and any person, other than Tick Size Pilot Program. increments. Pilot Securities in the
those that may be withheld from the The text of the proposed rule change control group will be quoted at the
public in accordance with the is available on the Exchange’s Web site current tick size increment of $0.01 per
provisions of 5 U.S.C. 552, will be at http://nasdaqbx.cchwallstreet. share and will trade at the currently
available for Web site viewing and com/, at the principal office of the permitted increments. Pilot Securities in
printing in the Commission’s Public the first test group will be quoted in
Exchange, and at the Commission’s
Reference Room, 100 F Street NE., $0.05 minimum increments but will
Public Reference Room.
Washington, DC 20549 on official continue to trade at any price increment
business days between the hours of II. Self-Regulatory Organization’s that is currently permitted.8 Pilot
10:00 a.m. and 3:00 p.m. Copies of the Statement of the Purpose of, and Securities in the second test group
filing also will be available for Statutory Basis for, the Proposed Rule (‘‘Test Group Two’’) will be quoted in
inspection and copying at the principal Change $0.05 minimum increments and will
office of the Exchange. All comments trade at $0.05 minimum increments
received will be posted without change; In its filing with the Commission, the subject to a midpoint exception, a retail
the Commission does not edit personal Exchange included statements investor order exception, and a
identifying information from concerning the purpose of and basis for negotiated trade exception.9 Pilot
submissions. You should submit only the proposed rule change and discussed Securities in the third test group (‘‘Test
information that you wish to make any comments it received on the Group Three’’) will be subject to the
available publicly. All submissions proposed rule change. The text of these same quoting and trading increments as
should refer to File Number SR–NYSE– statements may be examined at the Test Group Two, and also will be
2016–63 and should be submitted on or places specified in Item IV below. The subject to the ‘‘Trade-at’’ requirement to
before October 7, 2016. Exchange has prepared summaries, set prevent price matching by a market
For the Commission, by the Division of forth in sections A, B, and C below, of participant that is not displaying at the
Trading and Markets, pursuant to delegated the most significant aspects of such price of a Trading Center’s ‘‘Best
authority.29 statements. Protected Bid’’ or ‘‘Best Protected
Robert W. Errett, Offer,’’ unless an enumerated exception
Deputy Secretary.
A. Self-Regulatory Organization’s applies.10 In addition to the exceptions
Statement of the Purpose of, and provided under Test Group Two, an
[FR Doc. 2016–22252 Filed 9–15–16; 8:45 am]
Statutory Basis for, the Proposed Rule exception for Block Size orders and
BILLING CODE 8011–01–P
Change exceptions that mirror those under Rule
611 of Regulation NMS 11 will apply to
1. Purpose
SECURITIES AND EXCHANGE the Trade-at requirement.
COMMISSION On August 25, 2014, BX and several The Plan also requires a Trading
other self-regulatory organizations (the Center 12 or a Market Maker 13 to collect
[Release No. 34–78811; File No. SR–BX–
2016–048] ‘‘Participants’’) filed with the 7 See Securities Exchange Act Release No. 74892
Commission, pursuant to Section 11A of (May 6, 2015), 80 FR 27513 (May 13, 2015)
Self-Regulatory Organizations; the Act 3 and Rule 608 of Regulation (‘‘Approval Order’’).
NASDAQ BX, Inc.; Notice of Filing and NMS thereunder,4 the Plan to 8 See Section VI(B) of the Plan.
Immediate Effectiveness of Proposed Implement a Tick Size Pilot Program 9 See Section VI(C) of the Plan.
10 See Section VI(D) of the Plan.
Rule Change To Amend Rule 4770 (the ‘‘Plan’’).5 The Participants filed the
11 17 CFR 242.611.
Plan to comply with an order issued by
September 12, 2016. 12 The Plan incorporates the definition of a
the Commission on June 24, 2014.6 The ‘‘Trading Center’’ from Rule 600(b)(78) of
Pursuant to Section 19(b)(1) of the
Plan was published for comment in the Regulation NMS. Regulation NMS defines a
Securities Exchange Act of 1934
Federal Register on November 7, 2014, ‘‘Trading Center’’ as ‘‘a national securities exchange
mstockstill on DSK3G9T082PROD with NOTICES
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 or national securities association that operates an
notice is hereby given that on August SRO trading facility, an alternative trading system,
3 15 U.S.C. 78k–1.
29, 2016, NASDAQ BX, Inc. (‘‘BX’’ or an exchange market maker, an OTC market maker,
4 17 CFR 242.608. or any other broker or dealer that executes orders
‘‘Exchange’’) filed with the Securities 5 See Letter from Brendon J. Weiss, Vice internally by trading as principal or crossing orders
President, Intercontinental Exchange, Inc., to as agent.’’ See 17 CFR 242.600(b).
29 17 CFR 200.30–3(a)(12). Secretary, Commission, dated August 25, 2014. 13 The Plan defines a Market Maker as ‘‘a dealer
1 15 U.S.C. 78s(b)(1). 6 See Securities Exchange Act Release No 72460 registered with any self-regulatory organization, in
2 17 CFR 240.19b–4. (June 24, 2014), 79 FR 36840 (June 30, 2014). accordance with the rules thereof, as (i) a market
VerDate Sep<11>2014 17:55 Sep 15, 2016 Jkt 238001 PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 E:\FR\FM\16SEN1.SGM 16SEN1](https://thefederalregister.org/doc/81_FR_64008/page/1.svg)
![Federal Register / Vol. 81, No. 180 / Friday, September 16, 2016 / Notices 63831
because it will allow the Exchange to provisions of 5 U.S.C. 552, will be Western European Sovereign CDS
implement the proposed rules available for Web site viewing and contracts (collectively, ‘‘SWES
immediately thereby preventing delays printing in the Commission’s Public Contracts’’), and an additional Asia/
in the implementation of the Plan. The Reference Room, 100 F Street NE., Pacific Sovereign CDS contract (the
Commission notes that the Plan is Washington, DC 20549, on official ‘‘Asia/Pacific Contract’’).
scheduled to start on October 3, 2016. business days between the hours of 10
II. Self-Regulatory Organization’s
Therefore, the Commission hereby a.m. and 3 p.m. Copies of such filing
Statement of the Purpose of, and
waives the 30-day operative delay and also will be available for inspection and
Statutory Basis for, the Proposed Rule
designates the proposed rule change to copying at the principal office of the
Change
be operative upon filing with the Exchange. All comments received will
Commission.28 be posted without change; the In its filing with the Commission, ICC
At any time within 60 days of the Commission does not edit personal included statements concerning the
filing of the proposed rule change, the identifying information from purpose of and basis for the proposed
Commission summarily may submissions. You should submit only rule change and discussed any
temporarily suspend such rule change if information that you wish to make comments it received on the proposed
it appears to the Commission that such available publicly. All submissions rule change. The text of these statements
action is necessary or appropriate in the should refer to File Number SR–BX– may be examined at the places specified
public interest, for the protection of 2016–048 and should be submitted on in Item IV below. ICC has prepared
investors, or otherwise in furtherance of or before October 7, 2016. summaries, set forth in sections A, B,
the purposes of the Act.29 and C below, of the most significant
For the Commission, by the Division of
Trading and Markets, pursuant to delegated aspects of these statements.
IV. Solicitation of Comments
authority.30 A. Self-Regulatory Organization’s
Interested persons are invited to Robert W. Errett,
submit written data, views and Statement of the Purpose of, and
Deputy Secretary. Statutory Basis for, the Proposed Rule
arguments concerning the foregoing,
including whether the proposed rule [FR Doc. 2016–22250 Filed 9–15–16; 8:45 am] Change
change is consistent with the Act. BILLING CODE 8011–01–P The purpose of the proposed rule
Comments may be submitted by any of change is to adopt rules that will
the following methods: provide the basis for ICC to clear
SECURITIES AND EXCHANGE additional credit default swap contracts.
Electronic Comments COMMISSION ICC believes the addition of these
• Use the Commission’s Internet [Release No. 34–78818; File No. SR–ICC– contracts will benefit the market for
comment form (http://www.sec.gov/ 2016–012] credit default swaps by providing
rules/sro.shtml); or market participants the benefits of
• Send an email to rule-comments@ Self-Regulatory Organizations; ICE clearing, including reduction in
sec.gov. Please include File Number SR– Clear Credit LLC; Notice of Filing of counterparty risk and safeguarding of
BX–2016–048 on the subject line. Proposed Rule Change To Provide for margin assets pursuant to clearing house
the Clearance of Additional Credit rules.
Paper Comments Default Swap Contracts ICC proposes amending subchapter
• Send paper comments in triplicate 26D of its Rules to provide for the
to Secretary, Securities and Exchange September 12, 2016.
Pursuant to section 19(b)(1) of the clearance of additional EM Contracts,
Commission, 100 F Street NE., specifically the Republic of Panama,
Washington, DC 20549–1090. Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder 2 Abu Dhabi, Dubai, the State of Israel
All submissions should refer to File and the State of Qatar. ICC plans to offer
notice is hereby given that on August
Number SR–BX–2016–048. This file these additional EM Contracts on the
29, 2016, ICE Clear Credit LLC (‘‘ICC’’)
number should be included on the 2003 and 2014 ISDA Credit Derivatives
filed with the Securities and Exchange
subject line if email is used. To help the Definitions.
Commission (‘‘Commission’’) the
Commission process and review your These additional EM Contracts have
proposed rule change as described in
comments more efficiently, please use terms consistent with the other EM
Items I, II, and III below, which Items
only one method. The Commission will Contracts approved for clearing at ICC
have been prepared primarily by ICC.
post all comments on the Commission’s and governed by subchapter 26D of the
The Commission is publishing this
Internet Web site (http://www.sec.gov/ Rules. Minor revisions to Subchapter
notice to solicit comments on the
rules/sro.shtml). Copies of the 26D (Standard Emerging Market
proposed rule change from interested
submission, all subsequent Sovereign (‘‘SES’’) Single Name) are
persons.
amendments, all written statements made to provide for clearing the
with respect to the proposed rule I. Self-Regulatory Organization’s additional EM Contracts. Specifically, in
change that are filed with the Statement of the Terms of Substance of Rule 26D–102 (Definitions), ‘‘Eligible
Commission, and all written the Proposed Rule Change SES Reference Entities’’ is modified to
communications relating to the The principal purpose of the include the Republic of Panama, Abu
proposed rule change between the proposed rule change is to revise the Dhabi, Dubai, the State of Israel and the
Commission and any person, other than ICC Rulebook (the ‘‘Rules’’) to provide State of Qatar in the list of specific
those that may be withheld from the Eligible SES Reference Entities to be
mstockstill on DSK3G9T082PROD with NOTICES
for the clearance of additional Standard
public in accordance with the Emerging Market Sovereign CDS cleared by ICC.
contracts (collectively, ‘‘EM Contracts’’), Additionally, ICC proposes amending
28 For purposes only of waiving the operative
2003 ISDA Definitions of Standard subchapter 26I of its Rules to provide
delay for this proposal, the Commission has for the clearance of 2003 ISDA
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See 30 17 CFR 200.30–3(a)(12). Definitions of SWES Contracts. ICC
15 U.S.C. 78c(f). 1 15 U.S.C. 78s(b)(1). currently clears the 2014 ISDA
29 15 U.S.C. 78s(b)(3)(C). 2 17 CFR 240.19b–4. Definitions of ten SWES Contracts,
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Document Created: 2016-09-16 00:25:48
Document Modified: 2016-09-16 00:25:48
| 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 63828 |
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