81 FR 71150 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing of Partial Amendment Nos. 1 and 3, and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Partial Amendment Nos. 1 and 3, to System Functionality Necessary To Implement the Regulation NMS Plan To Implement a Tick Size Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 199 (October 14, 2016)

[Federal Register Volume 81, Number 199 (Friday, October 14, 2016)]
[Notices]
[Pages 71150-71153]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-24842]



[[Page 71150]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79076; File No. SR-BX-2016-050]


Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing 
of Partial Amendment Nos. 1 and 3, and Order Granting Accelerated 
Approval of a Proposed Rule Change, as Modified by Partial Amendment 
Nos. 1 and 3, to System Functionality Necessary To Implement the 
Regulation NMS Plan To Implement a Tick Size Pilot Program

October 7, 2016.

I. Introduction

    On September 7, 2016, NASDAQ BX, Inc. (``Exchange'' or ``BX'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') pursuant to Section 19(b)(1) of the Securities Exchange 
Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to adopt paragraph (d) and 
Commentary .12 to BX Rule 4770 to change System \3\ functionality 
necessary to implement the Regulation NMS Plan to Implement a Tick Size 
Pilot Program (``Plan'' or ``Pilot'').\4\ The Exchange is also 
proposing amendments to BX Rule 4770(a) and (c) to clarify certain 
exceptions to the Trade-at Prohibition.\5\ The proposed rule change was 
published for comment in the Federal Register on September 20, 2016.\6\ 
The Commission received two comment letters in response to the 
Notice.\7\ On September 29, 2016, the Exchange filed Partial Amendment 
No. 1 to the proposed rule change.\8\ On October 4, 2016, the Exchange 
filed Partial Amendment No. 2 to the proposed rule change. On October 
7, 2016, the Exchange withdrew Amendment No. 2 and filed Partial 
Amendment No. 3 to the proposed rule change.\9\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The term ``System'' is defined as the automated system for 
order execution and trade reporting owned and operated by BX. See BX 
Rule 4701(a).
    \4\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 
80 FR 27513 (May 13, 2015) (``Approval Order''). Unless otherwise 
specified, capitalized terms used in this rule filing are defined as 
set forth in the Plan.
    \5\ BX Rule 4770(c)(3)(D)(i) defines the ``Trade-at 
Prohibition'' as the prohibition against executions by a Trading 
Center of a sell order for a Pilot Security at the price of a 
Protected Bid or the execution of a buy order for a Pilot Security 
at the price of a Protected Offer during regular trading hours. See 
also Plan Section VI(D).
    \6\ Securities Exchange Act Release No. 78838 (September 14, 
2016), 81 FR 64566 (``Notice'').
    \7\ See Letters to Brent J. Fields, Secretary, Commission, from 
Elizabeth K. King, General Counsel and Corporate Secretary, New York 
Stock Exchange, Inc.; Eric Swanson, EVP, General Counsel and 
Secretary, BATS Global Markets, Inc.; Thomas A. Wittman, EVP, Global 
Head of Equities, Nasdaq, Inc., dated September 9, 2016 (``Comment 
Letter No. 1'') and from Eric Swanson, EVP, General Counsel and 
Secretary, BATS Global Markets, Inc., dated September 12, 2016 
(``Comment Letter No. 2'').
    \8\ In Partial Amendment No. 1, the Exchange proposes to change 
references in the rule text from ``added to the Exchange Book'' to 
``ranked on the Exchange Book'' as applicable for Price to Comply 
Orders, Non-Displayed Orders, Post-Only Orders, and Orders with 
Reserve Size. The Exchange also proposes to clarify that in certain 
cases Price to Comply Orders, not attributable Post-Only Orders, and 
certain Orders with Reserve Size may be ranked on the Exchange Book 
at the midpoint of the National Best Bid or Offer (``NBBO''). 
Finally, the Exchange proposes three amendments related to the 
operation of Reserve Size for Test Group Three Pilot Securities: (i) 
Change references from ``Reserve Order'' to ``Order with Reserve 
Size''; (ii) clarify that the Reserve Size attribute is only 
available for Price to Comply Orders and Price to Display Orders 
entered via the RASH or FIX protocols; and (iii) clarify the 
handling of Orders with Reserve Size in scenarios where such Orders 
are entered at a price that locks a Protected Quotation on an away 
market center.
    \9\ In Partial Amendment No. 3, the Exchange proposes to delete 
certain rule text to remove the re-pricing functionality for resting 
Price to Comply Orders, resting Non-Displayed Orders, and resting 
Post-Only Orders entered via OUCH or FLITE protocols for Test Group 
Three Pilot Securities. The Exchange explained that its systems were 
re-programmed for Test Group Three Pilot Securities to permit 
resting Price to Comply Orders, resting Non-Displayed Orders, and 
resting Post-Only Orders entered via OUCH or FLITE protocols to 
repeatedly re-price in response to changes to the NBBO and/or the 
Exchange's best Bid or Offer (``BBO''). The Exchange noted that it 
is currently re-programming its systems to remove the proposed 
functionality. Further, the Exchange stated that if it appears that 
the multiple re-pricing functionality will remain operational by 
October 17, 2016, the Exchange will file a proposed rule change with 
the Commission and provide notice to market participants 
sufficiently in advance of that date. The proposed rule change and 
notice to market participants will describe the current operation of 
the systems and timing of re-programming. In any event, the Exchange 
states that the removal of this functionality shall be completed no 
later than November 30, 2016. In addition, the Exchange proposes to 
modify the Block Size Order exception to the Trade-at Prohibition. 
The Exchange also clarified that that it would not apply the Trade-
at Prohibition outside of Regular Trading Hours. Finally, the 
Exchange is making certain non-substantive, clarifying amendments.
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    This order provides notice of filing of Partial Amendment Nos. 1 
and 3, and approves the proposal, as modified by Partial Amendment Nos. 
1 and 3, on an accelerated basis.

II. Description of the Amended Proposal

    The Exchange's proposed rule change provides for changed 
functionality to certain Order Types \10\ and Order Attributes \11\ 
applicable to Pilot Securities to implement the Plan. Proposed BX Rule 
4770(d) would specify the order handling, executing, re-pricing and 
displaying for the following Order Types in Pilot Securities: (i) Price 
to Comply Orders; (ii) Non-Displayed Orders; (iii) Post-Only Orders; 
(iv) Retail Price Improving Orders; (v) Retail Orders; and (vi) Market 
Maker Peg Orders. The following Order Attributes would also be amended: 
(i) Midpoint Pegging; (ii) Reserve Size; and (iii) Good-till-Cancelled. 
In addition, amended BX Rule 4770(d)(1) specifies that any Order Type 
in a security of any of the Test Groups that requires a price and does 
not qualify for an exception, will not be accepted if it is in a 
minimum price increment (``MPI'') other than $0.05.\12\
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    \10\ An ``Order Type'' is a standardized set of instructions 
associated with an order that define its behavior with respect to 
pricing, execution, and/or posting to the Exchange Book when 
submitted to the System. See BX Rule 4701(e).
    \11\ An ``Order Attribute'' is a further set of variable 
instructions that may be associated with an Order to further define 
how it will behave with respect to pricing, execution, and/or 
posting to the Exchange Book when submitted to the System. See BX 
Rule 4701(e). The availability of, and interaction between, Order 
Types and Order Attributes is described in BX Rules 4702 and 4703.
    \12\ Proposed BX Rule 4770(d)(1) clarifies that the System will 
use $0.05 as the MPI when re-pricing or rounding by the System.
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    The Exchange also proposes to amend the definition of the term 
``Trade-at Intermarket Sweep Order'' (``TA ISO'') and one of the TA ISO 
exceptions to the Trade-at Prohibition.\13\ Finally, the Exchange is 
proposing to modify the Block Size Order exception to the Trade-at 
Prohibition and add a related commentary.\14\
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    \13\ See proposed BX Rule 4770(a)(1)(D)(ii) and proposed BX Rule 
4770(c)(3)(D)(iii)(j).
    \14\ See proposed BX Rule 4770(c)(3)(D)(iii)(c) and BX Rule 
4770, proposed Commentary .12.
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A. Amendments To Order Type Functionality

1. Price to Comply Orders \15\
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    \15\ See proposed BX Rule 4770(d)(2). See also Partial Amendment 
No. 3.
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    The Exchange proposes that a Price to Comply Order in a Test Group 
Pilot Security would operate consistent with current BX Rule 4702(b)(1) 
except as provided below. Specifically, if a Price to Comply Order for 
a Test Group Three Pilot Security partially executes on entry and the 
remainder would lock the Protected Quotation of another market center, 
the unexecuted portion of the Order would be cancelled. In addition, if 
a Price to Comply Order for a Test Group Three Pilot Security to buy 
(sell) is not executable against any orders residing on the Exchange 
Book and its limit price would lock or cross the Protected Quotation of 
another market center, the Order would display at one MPI below (above) 
the Protected

[[Page 71151]]

Quotation and be ranked at the current midpoint of the NBBO on the 
Exchange Book.\16\
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    \16\ See Partial Amendment No. 1.
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2. Non-Displayed Orders \17\
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    \17\ See proposed BX Rule 4770(d)(3). See also Partial Amendment 
No. 3.
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    The Exchange proposes that a Non-Displayed Order in a Test Group 
Pilot Security would operate consistent with current BX Rule 4702(b)(3) 
except as provided below. Specifically, a resting Non-Displayed Order 
in a Test Group Three Pilot Security could not execute at the price of 
a Protected Quotation of another market center unless the incoming 
Order qualifies for an exception to the Trade-at Prohibition.\18\ In 
addition, for Test Group Three Pilot Securities, if the limit price of 
a buy (sell) Non-Displayed Order would lock or cross a Protected 
Quotation of another market center, the Order would be ranked on the 
Exchange Book at either one MPI below (above) the National Best Offer 
(``NBO'') ((National Best Bid) (``NBB'')) or at the midpoint of the 
NBBO, whichever is higher (lower).\19\ Further, for a Non-Displayed 
Order in a Test Group Three Pilot Security entered via RASH or FIX, if 
after being posted to the Exchange Book, the NBBO changes such that the 
Order would not be executable at its posted price due to the 
requirements of Regulation NMS or the Plan, the Non-Displayed Order to 
buy (sell) would be re-priced to either one MPI below (above) the NBO 
(NBB) or the midpoint of the NBBO, whichever is higher (lower) and 
receive a new timestamp. In the same scenario, if the Non-Displayed 
Order was entered via OUCH or FLITE, instead of re-pricing, the Order 
would be cancelled back to the Participant.
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    \18\ See BX Rule 4770(c)(3)(D).
    \19\ See Partial Amendment No. 1.
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3. Post-Only Orders \20\
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    \20\ See proposed BX Rule 4770(d)(4). See also Partial Amendment 
No. 3.
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    The Exchange proposes that Post-Only Orders will operate consistent 
with current BX Rule 4702(b)(4) except as provided below. Specifically, 
for a not attributable Post-Only Order for a Test Group Three Pilot 
Security, if the limit price to buy (sell) would lock or cross a 
Protected Quotation of another market center, the Order would display 
at one MPI below (above) the Protected Quotation and would be ranked at 
the current midpoint of the NBBO on the Exchange Book.\21\
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    \21\ See Partial Amendment No. 1.
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4. Retail Price Improving Orders \22\
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    \22\ See proposed BX Rule 4770(d)(5).
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    The Exchange proposes that Retail Price Improving Orders for Test 
Group Pilot Securities will operate consistently with current BX Rule 
4702(b)(5) except as provided below. Specifically, a Retail Price 
Improving Order for a Test Group Two or Test Group Three Pilot Security 
must be entered in a MPI of $0.005 and will only execute against Retail 
Orders if its price is at least $0.005 better than the NBBO.
5. Retail Orders \23\
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    \23\ See proposed BX Rule 4770(d)(6).
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    The Exchange proposes that Retail Orders for Test Group Pilot 
Securities will operate consistently with current BX Rule 4702(b)(6) 
except as provided below. Specifically, a Retail Order in a Test Group 
One Pilot Security must be entered with a limit price in a MPI and may 
execute in an increment other than a MPI if the order is provided price 
improvement of at least $0.001 better than the NBBO. In addition, a 
Retail Order in a Test Group Two or Test Group Three Pilot Security 
must be entered in a MPI and may execute in an increment other than a 
MPI if the order is provided price improvement that is at least $0.005 
better than the NBBO.
6. Market Maker Peg Orders \24\
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    \24\ See proposed BX Rule 4770(d)(7).
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    The Exchange proposes that a Market Maker Peg Order for Test Group 
Pilot Securities will operate consistent with current BX Rule 
4702(b)(7) except the displayed price of such an Order would be rounded 
up for bids (down for offers) to the nearest MPI (i.e., $0.05) if it 
would otherwise display at an increment smaller than the MPI.

B. Amendments To Order Attribute Functionality

1. Midpoint Pegging \25\
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    \25\ See proposed BX Rule 4770(d)(8).
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    The Exchange proposes that an Order with a Midpoint Pegging 
attribute in a Test Group Pilot Security will operate consistent with 
current BX Rule 4703(d). The Exchange also specifies that such Orders 
may execute at the midpoint of the NBBO in an increment other than the 
MPI.
2. Reserve Size \26\
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    \26\ See proposed BX Rule 4770(d)(9). See also Partial Amendment 
No. 1.
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    The Exchange proposes that an Order with Reserve Size in a Test 
Group Pilot Security will operate consistent with current BX Rule 
4703(h) except as described below. Specifically, a resting Order with 
Reserve Size in a Test Group Three Pilot Security (i.e., a Price to 
Comply Order or a Price to Display Order entered via RASH or FIX) may 
not execute the non-displayed Reserve Size at the price of a Protected 
Quotation of another market center unless the incoming Order qualifies 
for an exception to the Trade-at Prohibition.\27\ If an Order with 
Reserve Size for a Test Group Three Pilot Security is partially 
executed upon entry and the remainder would lock a Protected Quotation 
of another market center, the unexecuted portion of the Order would be 
cancelled. If a Price to Comply Order with Reserve Size to buy (sell) a 
Test Group Three Pilot Security is not executable against previously 
posted Orders on the Exchange Book, and has a limit price that would 
lock or cross a Protected Quotation of another market center, the 
displayed portion of the Order would display one MPI below (above) the 
Protected Quotation, and the displayed and non-displayed portions of 
the Order, would be ranked at the current midpoint of the NBBO on the 
Exchange Book. If a Price to Display Order with Reserve Size is not 
executable against any previously posted Orders on the Exchange Book 
and its limit price would lock or cross a Protected Quotation of 
another market center, then the displayed portion of the Order would be 
displayed and ranked one MPI below (above) the Protected Quotation and 
the non-displayed portion of the Order would be ranked at the midpoint 
of the NBBO. If after being posted to the Exchange Book, the NBBO 
changes such that an Order with Reserve Size was not executable at its 
ranked price due to the requirements of Regulation NMS or the Plan, the 
Order would adjust as described above.
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    \27\ See BX Rule 4770(c)(3)(D).
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3. Good-till-Cancelled \28\
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    \28\ See proposed BX Rule 4770(d)(10).
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    The Exchange proposes that an Order with a Time-in-Force of Good-
till-Cancelled in a Test Group Pilot Security will operate consistent 
with current BX Rule 4703(a)(3) except such Order would be adjusted 
based on a $0.05 increment.

C. Amendments to Certain Trade-at Prohibition Exceptions

1. TA ISO \29\
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    \29\ See proposed BX Rule 4770(a)(1)(D)(ii).
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    The Exchange proposes to add the phrase ``or Intermarket Sweep 
Orders'' (``ISO'') to the definition of TA ISO as well as to the 
related TA ISO exception to the Trade-at Prohibition\30\ to clarify

[[Page 71152]]

that ISOs may be routed to execute against the full displayed size of 
the Protected Quotation that was traded at.
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    \30\ See proposed BX Rule 4770(c)(3)(D)(iii)(j).
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2. Block Size Order exception for the Trade-at Prohibition \31\
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    \31\ See proposed BX Rule 4770(c)(3)(D)(iii)(c) and BX Rule 
4770, proposed Commentary .12.
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    Currently, BX Rule 4770(c)(3)(D)(iii)(c) provides an exception to 
the Trade-at Prohibition for Block Size Orders.\32\ The Exchange 
proposes in Commentary .12 that for purposes of qualifying for the 
exception Orders must have a size of 5,000 shares or more and the 
resulting execution upon entry is for a size of 5,000 shares or more in 
aggregate. In addition, the Exchange proposes to amend the Block Size 
Order exception to the Trade-at Prohibition to allow execution on 
multiple Trading Centers to comply with Regulation NMS.\33\
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    \32\ The plan defines Block Size as ``an order (1) of at least 
5,000 shares or (2) for a quantity of stock having a market value of 
at least $100,000. See Plan Section I(F).
    \33\ See proposed BX Rule 4770(c)(3)(D)(iii)(c). See also 
Partial Amendment No. 3.
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III. Summary of Comments Received \34\
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    \34\ See supra note 7.
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    Both comment letters express support for the proposal and suggest 
that the Commission should approve the proposal. In Comment Letter No. 
1, the commenters stated that if the proposal is approved as proposed, 
then the Exchange would be able to meet the implementation date. 
Further, in Comment Letter No. 1, the commenters stated their belief 
that the requirements from the Commission have been unclear. In Comment 
Letter No. 2, the commenter questioned the Commission staff's 
authority.

IV. Discussion and Commission's Findings

    After careful review of the proposed rule change, as modified by 
both Partial Amendment Nos. 1 and No. 3, and the comment letters, the 
Commission finds that the proposal, as modified by Partial Amendment 
Nos. 1 and 3, is consistent with the requirements of the Act, Rule 608 
of Regulation NMS,\35\ and the rules and regulations thereunder that 
are applicable to a national securities exchange.\36\ Specifically, the 
Commission finds that the rule change is consistent with Section 
6(b)(5) of the Act,\37\ which requires that the rules of a national 
securities exchange be designed, among other things, to prevent 
fraudulent and manipulative acts and practices, 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 
to protect investors and the public interest; and are not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \35\ 17 CFR 242.608.
    \36\ In approving this rule change, the Commission has 
considered the rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \37\ 15 U.S.C. 78f(b)(5).
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    As noted in the Approval Order, the Plan is by design, an 
objective, data-driven test to evaluate how a wider tick size would 
impact trading, liquidity, and market quality of securities of smaller 
capitalization companies. In addition, the Plan is designed with three 
Test Groups and a Control Group, to allow analysis and comparison of 
incremental market structure changes on the Pilot Securities and is 
designed to produce empirical data that could inform future policy 
decisions. As such, any proposed changes targeted at particular Test 
Groups during the Pilot Period should be necessary for compliance with 
the Plan.
    The Exchange proposes to modify its handling of certain Order Types 
and Order Attributes during the Pilot Period. First, the Exchange 
proposes to clarify that it will not accept Orders in a Test Group 
Pilot Security in an increment other than $0.05 unless there is an 
applicable exception to the MPI. Second, the Exchange proposes to 
clarify that the displayed price of Market Maker Peg Orders for any 
Test Group Pilot Security would be rounded to the nearest MPI and that 
Good-till-Cancelled Orders for a Test Group Pilot Security would be 
adjusted based on the $0.05 increment. Finally, the Exchange proposes 
to clarify that Orders with Midpoint Pegging Attribute in a Test Group 
Pilot Security may execute at the midpoint of the NBBO in an increment 
other than the MPI.
    The Exchange clarifies the operation of Retail Price Improving 
Orders in Test Group Two and Test Group Three Pilot Securities. In 
addition, the Exchange proposes to clarify how Retail Orders for Test 
Group One Pilot Securities must be entered in the $0.05 MPI but may 
execute in an increment other than a MPI if it is provided with price 
improvement of at least $0.001. Retail Orders in Test Group Two and 
Test Group Three Pilot Securities must be entered in a MPI and may 
execute in an increment other than the $0.05 if the Order is provided 
with price improvement of at least $0.005 better than the NBBO.
    The Exchange also proposes to modify the handling of certain Orders 
and Order Attributes in Test Group Three Pilot Securities, including: 
(i) Price to Comply Orders; (ii) Non-Displayed Orders; (iii) Post-Only 
Orders; and (iv) Orders with Reserve Size. The proposed changes are 
intended to facilitate compliance with the Trade-at Prohibition.\38\
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    \38\ In Partial Amendment No. 3, the Exchange clarified that it 
would not apply the Trade-at Prohibition outside of Regular Trading 
Hours. The Commission notes that this is consistent with the Plan. 
See Plan Section I(LL).
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    Finally, the Exchange proposes to amend provisions related to two 
exceptions to the Trade-at Prohibition. First, the Exchange proposes to 
amend the definition of TA ISO to reflect that ISOs may be routed to 
the full displayed size of a Protected Quotation that is traded-at and 
to make the corresponding change to the applicable Trade-at Prohibition 
exception. Second, the Exchange proposes to amend the Trade-at 
Prohibition exception for Block Size Orders to allow such Orders to be 
executed on multiple Trading Centers. Further, the Exchange proposes 
that for purposes of the Block Size Order exception to the Trade-at 
Prohibition, the Order must have a size of 5,000 shares and the 
resulting execution upon entry must have a size of 5,000 shares or more 
in aggregate.\39\
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    \39\ See also BX Rule 4770(c)(3)(D)(iii)(c).
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    The Commission believes that the proposed changes are reasonably 
designed to comply with the Plan. Further, the Commission believes that 
the proposed changes that target particular Test Groups are necessary 
for compliance with the Plan.\40\ Accordingly, the Commission finds 
that these changes are consistent with Section 6(b)(5) of the Act \41\ 
and Rule 608 of Regulation NMS \42\ because they implement the Plan and 
clarify Exchange Rules.
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    \40\ The Commission notes that the Exchange originally proposed 
to modify the operation of Post to Comply Orders, Non-Displayed 
Orders, and Post Only Orders entered via OUCH and FLITE for Test 
Group Three Pilot Securities only. In Partial Amendment No. 3, the 
Exchange proposes to remove the proposed functionality. Thus, the 
Commission believes that the proposal, as modified, is consistent 
with the Plan. The Exchange has committed to make the system changes 
necessary to implement Partial Amendment No. 3. If it appears that 
the system changes will not be completed by October 17, 2016, the 
date on which the Participants will begin implementation of Test 
Group 3,the Exchange will file a proposed rule change with the 
Commission to propose any necessary changes to the Exchange's rules 
and provide notice to market participants sufficiently in advance of 
this date to adequately inform market participants of the current 
operation of the Exchange's systems. See Partial Amendment No. 3.
    \41\ 15 U.S.C. 78f(b)(5).
    \42\ 17 CFR 242.608.
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    For these reasons, the Commission finds that the proposed rule 
change, as modified by Partial Amendment Nos. 1

[[Page 71153]]

and 3, is consistent with the requirements of the Act \43\ and Rule 608 
of Regulation NMS.\44\
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    \43\ 15 U.S.C. 78f(b)(5).
    \44\ 17 CFR 242.608.
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V. Solicitation of Comments on Partial Amendment Nos. 1 and 3 to the 
Proposed Rule Change

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal, as 
modified by Partial Amendment Nos. 1 and 3, 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-BX-2016-050 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-2016-050. 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 20549-1090, on official business days between the hours 
of 10:00 a.m. and 3:00 p.m. Copies of such filing will also 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-
2016-050 and should be submitted on or before November 4, 2016.

VI. Accelerated Approval of Proposed Rule Change, as Modified by 
Partial Amendment Nos.1 and 3

    The Commission finds good cause to approve the proposed rule 
change, as modified by Partial Amendment Nos. 1 and 3, prior to the 
thirtieth day after the date of publication of notice of the proposed 
rule change, as modified by Partial Amendment Nos. 1 and 3 in the 
Federal Register. As described above, the Exchange proposes to amend 
its rules to comply with the Plan. The Commission notes that the Pilot 
started implementation on October 3, 2016, and accelerated approval of 
the proposal would ensure that the rules of the Exchange would be in 
place during implementation. Accordingly, the Commission finds good 
cause, pursuant to Section 19(b)(2) of the Exchange Act,\45\ to approve 
the proposed rule change, as modified by Partial Amendment Nos. 1 and 
3, on an accelerated basis.
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    \45\ 15 U.S.C. 78s(b)(2).
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VII. Conclusion

    It is therefore ordered that, pursuant to Section 19(b)(2) of the 
Exchange Act,\46\ that the proposed rule change (SR-BX-2016-050), as 
modified by Partial Amendment Nos. 1 and 3, be and hereby is approved 
on an accelerated basis.
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    \46\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\47\
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    \47\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-24842 Filed 10-13-16; 8:45 am]
 BILLING CODE 8011-01-P