81 FR 6555 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Implementation Date of the “No-Remuneration” Indicator

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 25 (February 8, 2016)

Page Range		6555-6556
FR Document		2016-02331
Federal Register, Volume 81 Issue 25 (Monday, February 8, 2016)
[Federal Register Volume 81, Number 25 (Monday, February 8, 2016)]
[Notices]
[Pages 6555-6556]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-02331]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77015; File No. SR-FINRA-2016-003]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change to Extend the Implementation Date of the ``No-
Remuneration'' Indicator

February 2, 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 January 27, 2016, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') 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 FINRA. 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

    FINRA is proposing to extend the implementation date of the No-
Remuneration indicator to July 18, 2016. The proposed rule change would 
not make any changes to FINRA rules.
    The text of the proposed rule change is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On July 20, 2015, FINRA filed a proposed rule change to amend FINRA 
Rule 6730 (Transaction Reporting), which governs the reporting of 
eligible transactions to its Trade Reporting and Compliance Engine 
(``TRACE'').\3\ Rule 6730 sets forth the requirements that apply to 
firms when reporting transactions in TRACE-eligible securities,\4\ and 
provides the specific items of information that must be included in a 
TRACE trade report. Among other things, Rules 6730(c) and (d) require 
that firms report the commission (total dollar amount) separately on 
the TRACE trade report for agency transactions. FINRA then combines the 
dollar amount that is reported as the commission with the amount that 
is reported in the price field, and disseminates to the market this 
aggregate amount as the transaction's price. For principal 
transactions, Rule 6730(d)(1) provides that firms must report a price 
that includes the mark-up/mark-down, and FINRA disseminates this price 
to the market.
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    \3\ See Securities Exchange Act Release No. 75588 (August 3, 
2015), 80 FR 47546 (August 7, 2015) (Notice of Filing of File No. 
SR-FINRA-2015-026).
    \4\ Rule 6710 generally defines a ``TRACE-eligible security'' 
as: (1) a debt security that is U.S. dollar-denominated and issued 
by a U.S. or foreign private issuer (and, if a ``restricted 
security'' as defined in Securities Act Rule 144(a)(3), sold 
pursuant to Securities Act Rule 144A); or (2) a debt security that 
is U.S. dollar denominated and issued or guaranteed by an ``Agency'' 
as defined in Rule 6710(k) or a ``Government-Sponsored Enterprise'' 
as defined in Rule 6710(n).
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    In SR-FINRA-2015-026, FINRA proposed to amend Rule 6730 to require 
that firms use a ``No-Remuneration'' indicator to identify those 
transactions for which a commission or mark-up/mark-down is not 
reflected in a TRACE trade report. The Commission approved the 
proposal, on October 16, 2015.\5\ In its filing, FINRA represented that 
the implementation date of these amendments would be May 23, 2016. 
FINRA has since determined to extend the implementation date for this 
proposal to July 18, 2016 to provide members additional time to 
complete systems changes necessary to comply with SR-FINRA-2015-026.
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    \5\ See Securities Exchange Act Release No. 76176 (October 16, 
2015), 80 FR 64039 (October 22, 2015) (Order Approving File No. SR-
FINRA-2015-026).
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    FINRA has filed the proposed rule change for immediate 
effectiveness.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\6\ which requires, among 
other things, that FINRA rules must be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest, and Section 15A(b)(9) of the Act,\7\ which requires 
that FINRA rules not impose any burden on competition that is not 
necessary or appropriate.
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    \6\ 15 U.S.C. 78o-3(b)(6).
    \7\ 15 U.S.C. 78o-3(b)(9).
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    FINRA believes that the extension of the implementation date until 
July 18, 2016, is consistent with the Act in that it would provide 
members with additional time to complete the systems changes necessary 
to comply with SR-FINRA-2015-026.

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

    FINRA 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

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
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) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
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 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. 
FINRA has satisfied this requirement.

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[[Page 6556]]

    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. 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-FINRA-2016-003 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2016-003. 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 FINRA. 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-FINRA-2016-003, and should 
be submitted on or before February 29, 2016.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-02331 Filed 2-5-16; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 81, No. 25 / Monday, February 8, 2016 / Notices 6555

Information Officer, Securities and in Item IV below. FINRA has prepared systems changes necessary to comply
Exchange Commission, c/o Remi Pavlik- summaries, set forth in sections A, B, with SR–FINRA–2015–026.
Simon, 100 F Street NE., Washington, and C below, of the most significant FINRA has filed the proposed rule
DC 20549, or send an email to: PRA_ aspects of such statements. change for immediate effectiveness.
Mailbox@sec.gov.
A. Self-Regulatory Organization’s 2. Statutory Basis
Dated: February 2, 2016. Statement of the Purpose of, and the
Robert W. Errett, FINRA believes that the proposed rule
Statutory Basis for, the Proposed Rule
Deputy Secretary. change is consistent with the provisions
Change
of Section 15A(b)(6) of the Act,6 which
[FR Doc. 2016–02337 Filed 2–5–16; 8:45 am]
1. Purpose requires, among other things, that
BILLING CODE 8011–01–P
FINRA rules must be designed to
On July 20, 2015, FINRA filed a prevent fraudulent and manipulative
proposed rule change to amend FINRA acts and practices, to promote just and
SECURITIES AND EXCHANGE Rule 6730 (Transaction Reporting),
COMMISSION equitable principles of trade, and, in
which governs the reporting of eligible general, to protect investors and the
[Release No. 34–77015; File No. SR–FINRA– transactions to its Trade Reporting and public interest, and Section 15A(b)(9) of
2016–003] Compliance Engine (‘‘TRACE’’).3 Rule the Act,7 which requires that FINRA
6730 sets forth the requirements that rules not impose any burden on
Self-Regulatory Organizations; apply to firms when reporting
Financial Industry Regulatory competition that is not necessary or
transactions in TRACE-eligible appropriate.
Authority, Inc.; Notice of Filing and securities,4 and provides the specific
Immediate Effectiveness of a Proposed FINRA believes that the extension of
items of information that must be
Rule Change to Extend the the implementation date until July 18,
included in a TRACE trade report.
Implementation Date of the ‘‘No- 2016, is consistent with the Act in that
Among other things, Rules 6730(c) and
Remuneration’’ Indicator it would provide members with
(d) require that firms report the
additional time to complete the systems
February 2, 2016. commission (total dollar amount)
changes necessary to comply with SR–
Pursuant to Section 19(b)(1) of the separately on the TRACE trade report
FINRA–2015–026.
Securities Exchange Act of 1934 for agency transactions. FINRA then
(‘‘Act’’)1 and Rule 19b–4 thereunder,2 combines the dollar amount that is B. Self-Regulatory Organization’s
notice is hereby given that on January reported as the commission with the Statement on Burden on Competition
27, 2016, Financial Industry Regulatory amount that is reported in the price FINRA does not believe that the
Authority, Inc. (‘‘FINRA’’) filed with the field, and disseminates to the market proposed rule change will result in any
Securities and Exchange Commission this aggregate amount as the burden on competition that is not
(‘‘Commission’’) the proposed rule transaction’s price. For principal necessary or appropriate in furtherance
change as described in Items I and II transactions, Rule 6730(d)(1) provides of the purposes of the Act.
below, which Items have been prepared that firms must report a price that
by FINRA. The Commission is includes the mark-up/mark-down, and C. Self-Regulatory Organization’s
publishing this notice to solicit FINRA disseminates this price to the Statement on Comments on the
comments on the proposed rule change market. Proposed Rule Change Received From
from interested persons. In SR–FINRA–2015–026, FINRA Members, Participants, or Others
proposed to amend Rule 6730 to require Written comments were neither
I. Self-Regulatory Organization’s
that firms use a ‘‘No-Remuneration’’ solicited nor received.
Statement of the Terms of Substance of
indicator to identify those transactions
the Proposed Rule Change III. Date of Effectiveness of the
for which a commission or mark-up/
FINRA is proposing to extend the mark-down is not reflected in a TRACE Proposed Rule Change and Timing for
implementation date of the No- trade report. The Commission approved Commission Action
Remuneration indicator to July 18, 2016. the proposal, on October 16, 2015.5 In Because the foregoing proposed rule
The proposed rule change would not its filing, FINRA represented that the change does not: (i) Significantly affect
make any changes to FINRA rules. implementation date of these the protection of investors or the public
The text of the proposed rule change amendments would be May 23, 2016. interest; (ii) impose any significant
is available on FINRA’s Web site at FINRA has since determined to extend burden on competition; and (iii) become
http://www.finra.org, at the principal the implementation date for this operative for 30 days from the date on
office of FINRA and at the proposal to July 18, 2016 to provide which it was filed, or such shorter time
Commission’s Public Reference Room. members additional time to complete as the Commission may designate, it has
II. Self-Regulatory Organization’s become effective pursuant to Section
Statement of the Purpose of, and 3 See Securities Exchange Act Release No. 75588 19(b)(3)(A) of the Act 8 and Rule 19b–
Statutory Basis for, the Proposed Rule (August 3, 2015), 80 FR 47546 (August 7, 2015) 4(f)(6) thereunder.9
(Notice of Filing of File No. SR–FINRA–2015–026).
Change 4 Rule 6710 generally defines a ‘‘TRACE-eligible
6 15 U.S.C. 78o-3(b)(6).
In its filing with the Commission, security’’ as: (1) a debt security that is U.S. dollar-
7 15 U.S.C. 78o-3(b)(9).
denominated and issued by a U.S. or foreign private
asabaliauskas on DSK5VPTVN1PROD with NOTICES

FINRA included statements concerning
issuer (and, if a ‘‘restricted security’’ as defined in 8 15 U.S.C. 78s(b)(3)(A).
the purpose of and basis for the Securities Act Rule 144(a)(3), sold pursuant to 9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
proposed rule change and discussed any Securities Act Rule 144A); or (2) a debt security that 4(f)(6)(iii) requires a self-regulatory organization to
comments it received on the proposed is U.S. dollar denominated and issued or give the Commission written notice of its intent to
rule change. The text of these statements guaranteed by an ‘‘Agency’’ as defined in Rule file the proposed rule change, along with a brief
6710(k) or a ‘‘Government-Sponsored Enterprise’’ as description and text of the proposed rule change,
may be examined at the places specified defined in Rule 6710(n). at least five business days prior to the date of filing
5 See Securities Exchange Act Release No. 76176 of the proposed rule change, or such shorter time
1 15 U.S.C. 78s(b)(1). (October 16, 2015), 80 FR 64039 (October 22, 2015) as designated by the Commission. FINRA has
2 17 CFR 240.19b–4. (Order Approving File No. SR–FINRA–2015–026). satisfied this requirement.

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6556 Federal Register / Vol. 81, No. 25 / Monday, February 8, 2016 / Notices

At any time within 60 days of the submissions. You should submit only II. Self-Regulatory Organization’s
filing of the proposed rule change, the information that you wish to make Statement of the Purpose of, and
Commission summarily may available publicly. All submissions Statutory Basis for, the Proposed Rule
temporarily suspend such rule change if should refer to File Number SR–FINRA– Change
it appears to the Commission that such 2016–003, and should be submitted on
action is necessary or appropriate in the In its filing with the Commission, the
or before February 29, 2016.
public interest, for the protection of Exchange included statements
investors, or otherwise in furtherance of For the Commission, by the Division of concerning the purpose of and basis for
the purposes of the Act. If the Trading and Markets, pursuant to delegated the proposed rule change and discussed
Commission takes such action, the authority.10 any comments it received on the
Commission shall institute proceedings Robert W. Errett, proposed rule change. The text of these
to determine whether the proposed rule Deputy Secretary. statements may be examined at the
should be approved or disapproved. [FR Doc. 2016–02331 Filed 2–5–16; 8:45 am] places specified in Item IV below. The
Exchange has prepared summaries, set
IV. Solicitation of Comments BILLING CODE 8011–01–P
forth in sections A, B, and C below, of
Interested persons are invited to the most significant aspects of such
submit written data, views, and SECURITIES AND EXCHANGE statements.
arguments concerning the foregoing,
COMMISSION A. Self-Regulatory Organization’s
including whether the proposed rule
Statement of the Purpose of, and
change is consistent with the Act.
Comments may be submitted by any of [Release No. 34–77035; File No. SR–MIAX– Statutory Basis for, the Proposed Rule
the following methods: 2016–02] Change

Electronic Comments 1. Purpose
Self-Regulatory Organizations; Miami
• Use the Commission’s Internet International Securities Exchange LLC; The Exchange proposes to amend
comment form (http://www.sec.gov/ Notice of Filing and Immediate Exchange Rule 301, Just and Equitable
rules/sro.shtml); or Effectiveness of a Proposed Rule Principles of Trade, to add
• Send an email to rule-comments@ Change To Amend Exchange Rule 301 Interpretations and Policies .03 to Rule
sec.gov. Please include File Number SR– 301 that states that the practice of
FINRA–2016–003 on the subject line. February 2, 2016. unbundling an order is considered
Paper Comments Pursuant to the provisions of Section conduct inconsistent with just and
19(b)(1) of the Securities Exchange Act equitable principles of trade. The
• Send paper comments in triplicate proposal codifies existing Exchange
of 1934 (‘‘Act’’) 1 and Rule 19b–4
to Brent J. Fields, Secretary, Securities procedures when dealing with the
thereunder,2 notice is hereby given that
and Exchange Commission, 100 F Street unlawful bundling of orders.
NE., Washington, DC 20549–1090. on January 20, 2016, Miami
International Securities Exchange LLC The purpose of the proposed rule
All submissions should refer to File change is to amend Exchange Rule 301
(‘‘MIAX’’ or ‘‘Exchange’’) filed with the
Number SR–FINRA–2016–003. This file by adding a new Interpretations and
number should be included on the Securities and Exchange Commission
(‘‘Commission’’) a proposed rule change Policies .03 to Rule 301 which will
subject line if email is used. To help the expressly prohibit the splitting-up of an
Commission process and review your as described in Items I and II below,
which Items have been prepared by the order into smaller orders; a practice also
comments more efficiently, please use known as unbundling, or trade
only one method. The Commission will Exchange. The Commission is
publishing this notice to solicit shredding. More specifically, the
post all comments on the Commission’s Exchange is proposing to add language
Internet Web site (http://www.sec.gov/ comments on the proposed rule change
from interested persons. to its existing rules to prohibit
rules/sro.shtml). Copies of the Members 3 from splitting orders into
submission, all subsequent I. Self-Regulatory Organization’s multiple smaller orders for any purpose
amendments, all written statements other than best execution.
Statement of the Terms of Substance of
with respect to the proposed rule
the Proposed Rule Change Unbundling, or trade shredding, is the
change that are filed with the
Commission, and all written practice of breaking up an order into
The Exchange is filing a proposal to
communications relating to the multiple smaller orders for some
amend Exchange Rule 301, Just and purpose other than best execution of the
proposed rule change between the Equitable Principles of Trade, to add
Commission and any person, other than order. The practice of unbundling has in
Interpretations and Policies .03 to Rule the past been used for such purposes as
those that may be withheld from the 301 to state in the Exchange’s rules that
public in accordance with the improperly maximizing commissions
the practice of unbundling an order is and fees charged to customers,
provisions of 5 U.S.C. 552, will be
considered conduct inconsistent with distorting trade data, or circumventing
available for Web site viewing and
just and equitable principles of trade. rules pertaining to maximum order size.
printing in the Commission’s Public
Reference Room, 100 F Street NE., The text of the proposed rule change In addition, the unbundling of a large
Washington, DC 20549 on official is available on the Exchange’s Web site order into several smaller orders could
asabaliauskas on DSK5VPTVN1PROD with NOTICES

business days between the hours of at http://www.miaxoptions.com/filter/ be done so as to affect the allocation of
10:00 a.m. and 3:00 p.m. Copies of such wotitle/rule_filing, at MIAX’s principal a trade among market participants
filing also will be available for office, and at the Commission’s Public pursuant to the allocation methodology
inspection and copying at the principal Reference Room.
3 The term ‘‘Member’’ means an individual or
office of FINRA. All comments received
organization approved to exercise trading rights
will be posted without change; the 10 17 CFR 200.30–3(a)(12). associated with a Trading Permit. Members are
Commission does not edit personal 1 15 U.S.C. 78s(b)(1). deemed ‘‘members’’ under the Exchange Act. See
identifying information from 2 17 CFR 240.19b–4. Exchange Rule 100.

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Document Created: 2016-02-06 00:24:16
Document Modified: 2016-02-06 00:24:16
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 6555