81 FR 75458 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend EDGX Rule 11.11, Routing to Away Trade Centers
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 210 (October 31, 2016)
Federal Register Volume 81, Issue 210 (October 31, 2016)
| Page Range | 75458-75460 | |
| FR Document | 2016-26134 |
[Federal Register Volume 81, Number 210 (Monday, October 31, 2016)] [Notices] [Pages 75458-75460] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-26134] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79151; File No. SR-BatsEDGX-2016-54] Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend EDGX Rule 11.11, Routing to Away Trade Centers October 25, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on October 12, 2016, Bats EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as a ``non-controversial'' proposed rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)(iii) thereunder,\4\ which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A). \4\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange filed a proposal to amend Exchange Rule 11.11(a) to describe when an order that includes a Short Sale instruction may be eligible for routing when a short sale price test restriction is in effect. The text of the proposed rule change is available at the Exchange's Web site at www.batstrading.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Exchange Rule 11.11(a) to describe when an order that includes a Short Sale \5\ instruction may be eligible for routing when a short sale price test restriction is in effect. Under Rule 201 of Regulation SHO,\6\ a short sale order in a covered security \7\ generally cannot be executed or displayed by a Trading Center,\8\ such as the Exchange, at a price that is at or below the current national best bid (``NBB'') \9\ when a short sale circuit breaker is in effect for the covered security (the ``short sale price test restriction'').\10\ --------------------------------------------------------------------------- \5\ See Exchange Rule 11.6(o). The term ``short sale'' is defined as ``any sale of a security which the seller does not own or any sale which is consummated by the delivery of a security borrowed by, or for the account of, the seller.'' 17 CFR 242.200(a). \6\ See 17 CFR 242.201; Securities Exchange Act Release No. 61595 (February 26, 2010), 75 FR 11232 (March 10, 2010). \7\ Rule 201(a)(1) of Regulation SHO defines the term ``covered security'' to mean any ``NMS stock'' as defined under Rule 600(b)(47) of Regulation NMS. Rule 600(b)(47) of Regulation NMS defines an ``NMS stock'' as ``any NMS security other than an option.'' Rule 600(b)(46) of Regulation NMS defines an ``NMS security'' as ``any security or class of securities for which transaction reports are collected, processed, and made available pursuant to an effective transaction reporting plan, or an effective national market system plan for reporting transactions in listed options.'' 17 CFR 242.201(a)(1); 17 CFR 242.600(b)(46); and 17 CFR 242.600(b)(47). \8\ Rule 201(a)(9) of Regulation SHO states that the term ``Trading Center'' shall have the same meaning as in Rule 600(b)(78) of Regulation NMS. Rule 600(b)(78) of 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.'' 17 CFR 242.200(a)(9); 17 CFR 242.600(b)(78). \9\ 17 CFR 242.201(a)(4); 17 CFR 242.600(b)(42). \10\ 17 CFR 242.201(b)(1). --------------------------------------------------------------------------- Under Rule 11.11(a), an order that includes a Short Sale instruction when a short sale price test restriction pursuant to Rule 201 of Regulation SHO is in effect is not eligible for routing by the Exchange. If an order is ineligible for routing due to a Short Sale Circuit Breaker \11\ being in effect and such order contains a Time-in- Force of Immediate-or-Cancel (``IOC''),\12\ then the order will [[Page 75459]] be cancelled. For any other order ineligible for routing due to a Short Sale Circuit Breaker being in effect, the Exchange will post the unfilled balance of the order to the EDGX Book,\13\ treat the order as if it included a Book Only \14\ or Post Only \15\ instruction, and subject it to the Re-Pricing Instructions to Comply with Rule 201 of Regulation SHO, as described in Rule Exchange 11.6(l)(2),\16\ unless the User has elected the order Cancel Back as described in Exchange Rule 11.6(b). --------------------------------------------------------------------------- \11\ In order to use consistent terminology, the Exchange proposes to replace the term ``short sale price test restriction'' with ``Short Sale Circuit Breaker'' within the first sentence of Rule 11.11(a). \12\ See Exchange Rule 11.6(q)(1). \13\ See Exchange Rule 1.5(d). \14\ See Exchange Rule 11.6(n)(3). \15\ See Exchange Rule 11.6(n)(4). \16\ In sum, under Exchange Rule 11.6(l)(2), an order to sell with a Short Sale instruction that, at the time of entry, could not be executed or displayed in compliance with Rule 201 of Regulation SHO will be re-priced by the System at the Permitted Price. See Exchange Rule 11.6(l)(2) for a full description of the Exchange's Re-Pricing Instructions to Comply with Rule 201 of Regulation SHO. --------------------------------------------------------------------------- The Exchange proposes to specify in Rule 11.11(a) that orders that include a Short Sale instruction may be eligible for routing by the Exchange when a Short Sale Circuit Breaker is in effect where the User \17\ selects either the Post to Away \18\ or ROOC \19\ routing options. In contrast to all other routing strategies, which are routed to other Trading Centers for immediate, the Post to Away and ROOC routing options are orders that are sent to other Trading Centers for posting and/or later execution as further described below. Under the Post to Away routing option, the remainder of a routed order is routed to and posted to the order book of a destination on the System routing table,\20\ as specified by the User. ROOC is a routing option for orders that the User wishes to designate for participation in the opening, re-opening (following a halt, suspension, or pause), or closing process of a primary listing market other than the Exchange (e.g., the New York Stock Exchange, Inc. (``NYSE''), Nasdaq Stock Market LLC (``Nasdaq''), NYSE MKT LLC, or NYSE Arca, Inc. (``NYSE Arca'')) if received before the opening/re-opening/closing time of such market. If shares remain unexecuted after attempting to execute in the opening, re-opening, or closing process, they are either posted to the EDGX Book, executed, or routed to destinations on the System routing table.\21\ Orders routed pursuant to the Post to Away and ROOC routing options that include a Short Sale instruction are identified as ``short'' are subject to the receiving Trading Center's processes for handling short sale orders in compliance with Rule 201 of Regulation SHO.\22\ --------------------------------------------------------------------------- \17\ See Exchange Rule 1.5(cc). \18\ See 11.11(g)(12). \19\ See 11.11(g)(8). \20\ The term ``System routing table'' is defined as the ``the proprietary process for determining the specific trading venues to which the System routes orders and the order in which it routes them.'' See Exchange Rule 11.11(g). \21\ Shares returned to the Exchange after routing are handled in accordance with Exchange Rules, including Rule 11.10(a). \22\ See, e.g., Nasdaq Rule 4763; NYSE Rule 440B; and Nasdaq's Regulation SHO Frequently Asked Questions (updated March 10, 2011), available at https://nasdaqtrader.com/content/marketregulation/regsho/regshoFAQs.pdf. --------------------------------------------------------------------------- Under Exchange Rule 11.11(a), orders that include a Short Sale instruction and a Time-in-Force of IOC that are not eligible for routing during a Short Sale Circuit Breaker will continue to be cancelled. For any other order that includes a Short Sale instruction that is ineligible for routing due to a Short Sale Circuit Breaker being in effect, the Exchange will continue to post the unfilled balance of the order to the EDGX Book, treat the order as if it included a Book Only or Post Only instruction, and subject it to the Re-Pricing Instructions to Comply with Rule 201 of Regulation SHO, as described in Rule 11.6(l)(2), unless the User has elected the order Cancel Back as described in Rule 11.6(b). 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act \23\ and furthers the objectives of Section 6(b)(5) of the Act \24\ because it is designed to promote just and equitable principles of trade, remove impediments to and perfect the mechanism of a free and open market and a national market system, foster cooperation and coordination with persons engaged in facilitating transactions in securities, and, in general, protect investors and the public interest. Specifically, the proposed changes are designed to ensure clarity in the Exchange's rulebook with respect to the routing of orders in compliance with Rule 201 of Regulation SHO. In addition, providing Users the ability to send short sale orders that are routable pursuant to the Post to Away and ROOC routing options provides them additional flexibility with regard to the handling of their orders. The Exchange notes that orders that include a Short Sale instruction routed pursuant to the Post to Away or ROOC routing options are identified as ``short'' and, therefore, subject to the receiving Trading Center's processes for handling short sale orders in compliance with Regulation SHO.\25\ The Exchange also notes that other national securities exchanges do not expressly prohibit the routing of short sale orders. For example, Nasdaq and NYSE Arca allow for the routing of short sale orders generally, and do not limit a short sale order's ability to route to certain routing options.\26\ Thus, the proposal is directly targeted at removing impediments to and perfecting the mechanism of a free and open market and national market system. The proposed rule change also is designed to support the principles of Section 11A(a)(1) \27\ of the Act in that it seeks to assure fair competition among brokers and dealers and among exchange markets. --------------------------------------------------------------------------- \23\ 15 U.S.C. 78f(b). \24\ 15 U.S.C. 78f(b)(5). \25\ See supra note 21. \26\ See e.g., Nasdaq Rules 4702(a) (stating generally that an ``[o]rder may . . . may be routed to other market centers for potential execution if designated as `Routable' '') and 4763 (not prohibiting the routing of a short sale order during a short sale price test). See also e.g., NYSE Arca Rule 7.6P (not prohibiting the routing of a short sale order during a short sale price test). \27\ 15 U.S.C. 78k-1(a)(1). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange is simply proposing to reflect in its rules that orders that include a Short Sale instruction may be routed to an away marked for execution under two specific routing strategies offered by the Exchange. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange has neither solicited nor received written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (A) Significantly affect the protection of investors or the public interest; (B) impose any significant burden on competition; and (C) 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 it has become effective pursuant to Section 19(b)(3)(A) of the Act \28\ and paragraph (f)(6) of Rule 19b-4 thereunder,\29\ the Exchange has [[Page 75460]] designated this rule filing as non-controversial. The Exchange has given 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. --------------------------------------------------------------------------- \28\ 15 U.S.C. 78s(b)(3)(A). \29\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- 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: (1) Necessary or appropriate in the public interest; (2) for the protection of investors; or (3) 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 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-BatsEDGX-2016-54 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-BatsEDGX-2016-54. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BatsEDGX-2016-54, and should be submitted on or before November 21, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\30\ Brent J. Fields, Secretary. --------------------------------------------------------------------------- \30\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2016-26134 Filed 10-28-16; 8:45 am] BILLING CODE 8011-01-P
![75458 Federal Register / Vol. 81, No. 210 / Monday, October 31, 2016 / Notices
Comments may be submitted by any of SECURITIES AND EXCHANGE the most significant parts of such
the following methods: COMMISSION statements.
Electronic Comments [Release No. 34–79151; File No. SR– A. Self-Regulatory Organization’s
BatsEDGX–2016–54] Statement of the Purpose of, and
• Use the Commission’s Internet Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ Self-Regulatory Organizations; Bats Change
rules/sro.shtml); or EDGX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a 1. Purpose
• Send an email to rule-comments@
Proposed Rule Change To Amend The Exchange proposes to amend
sec.gov. Please include File Number SR–
EDGX Rule 11.11, Routing to Away Exchange Rule 11.11(a) to describe
BatsBYX–2016–27 on the subject line.
Trade Centers when an order that includes a Short
Paper Comments Sale 5 instruction may be eligible for
October 25, 2016. routing when a short sale price test
• Send paper comments in triplicate Pursuant to Section 19(b)(1) of the restriction is in effect. Under Rule 201
to Secretary, Securities and Exchange Securities Exchange Act of 1934 (the of Regulation SHO,6 a short sale order
Commission, 100 F Street NE., ‘‘Act’’),1 and Rule 19b–4 thereunder,2 in a covered security 7 generally cannot
Washington, DC 20549–1090. notice is hereby given that on October be executed or displayed by a Trading
12, 2016, Bats EDGX Exchange, Inc. (the Center,8 such as the Exchange, at a price
All submissions should refer to File ‘‘Exchange’’ or ‘‘EDGX’’) filed with the that is at or below the current national
Number SR–BatsBYX–2016–27. This Securities and Exchange Commission best bid (‘‘NBB’’) 9 when a short sale
file number should be included on the (‘‘Commission’’) the proposed rule circuit breaker is in effect for the
subject line if email is used. To help the change as described in Items I, II, and covered security (the ‘‘short sale price
Commission process and review your III below, which Items have been test restriction’’).10
comments more efficiently, please use prepared by the Exchange. The Under Rule 11.11(a), an order that
only one method. The Commission will Exchange has designated this proposal includes a Short Sale instruction when
post all comments on the Commission’s as a ‘‘non-controversial’’ proposed rule a short sale price test restriction
Internet Web site (http://www.sec.gov/ change pursuant to Section 19(b)(3)(A) pursuant to Rule 201 of Regulation SHO
rules/sro.shtml). Copies of the of the Act 3 and Rule 19b–4(f)(6)(iii) is in effect is not eligible for routing by
submission, all subsequent thereunder,4 which renders it effective the Exchange. If an order is ineligible for
amendments, all written statements upon filing with the Commission. The routing due to a Short Sale Circuit
with respect to the proposed rule Commission is publishing this notice to Breaker 11 being in effect and such order
change that are filed with the solicit comments on the proposed rule contains a Time-in-Force of Immediate-
Commission, and all written change from interested persons. or-Cancel (‘‘IOC’’),12 then the order will
communications relating to the
I. Self-Regulatory Organization’s
proposed rule change between the 5 See Exchange Rule 11.6(o). The term ‘‘short
Statement of the Terms of the Substance sale’’ is defined as ‘‘any sale of a security which the
Commission and any person, other than
of the Proposed Rule Change seller does not own or any sale which is
those that may be withheld from the consummated by the delivery of a security
public in accordance with the The Exchange filed a proposal to borrowed by, or for the account of, the seller.’’ 17
provisions of 5 U.S.C. 552, will be amend Exchange Rule 11.11(a) to CFR 242.200(a).
available for Web site viewing and describe when an order that includes a 6 See 17 CFR 242.201; Securities Exchange Act
Short Sale instruction may be eligible Release No. 61595 (February 26, 2010), 75 FR 11232
printing in the Commission’s Public (March 10, 2010).
Reference Room, 100 F Street NE., for routing when a short sale price test 7 Rule 201(a)(1) of Regulation SHO defines the
Washington, DC 20549 on official restriction is in effect. term ‘‘covered security’’ to mean any ‘‘NMS stock’’
business days between the hours of The text of the proposed rule change as defined under Rule 600(b)(47) of Regulation
10:00 a.m. and 3:00 p.m. Copies of such is available at the Exchange’s Web site NMS. Rule 600(b)(47) of Regulation NMS defines an
at www.batstrading.com, at the ‘‘NMS stock’’ as ‘‘any NMS security other than an
filing also will be available for option.’’ Rule 600(b)(46) of Regulation NMS defines
inspection and copying at the principal principal office of the Exchange, and at an ‘‘NMS security’’ as ‘‘any security or class of
office of the Exchange. All comments the Commission’s Public Reference securities for which transaction reports are
Room. collected, processed, and made available pursuant
received will be posted without change; to an effective transaction reporting plan, or an
the Commission does not edit personal II. Self-Regulatory Organization’s effective national market system plan for reporting
identifying information from Statement of the Purpose of, and transactions in listed options.’’ 17 CFR
242.201(a)(1); 17 CFR 242.600(b)(46); and 17 CFR
submissions. You should submit only Statutory Basis for, the Proposed Rule 242.600(b)(47).
information that you wish to make Change 8 Rule 201(a)(9) of Regulation SHO states that the
available publicly. All submissions term ‘‘Trading Center’’ shall have the same meaning
In its filing with the Commission, the
should refer to File Number SR– as in Rule 600(b)(78) of Regulation NMS. Rule
Exchange included statements 600(b)(78) of Regulation NMS defines a ‘‘Trading
BatsBYX–2016–27, and should be
concerning the purpose of and basis for Center’’ as ‘‘a national securities exchange or
submitted on or before November 21, the proposed rule change and discussed national securities association that operates an SRO
2016. any comments it received on the trading facility, an alternative trading system, an
exchange market maker, an OTC market maker, or
For the Commission, by the Division of proposed rule change. The text of these any other broker or dealer that executes orders
Trading and Markets, pursuant to delegated statements may be examined at the internally by trading as principal or crossing orders
sradovich on DSK3GMQ082PROD with NOTICES
authority.30 places specified in Item IV below. The as agent.’’ 17 CFR 242.200(a)(9); 17 CFR
242.600(b)(78).
Brent J. Fields, Exchange has prepared summaries, set 9 17 CFR 242.201(a)(4); 17 CFR 242.600(b)(42).
Secretary. forth in Sections A, B, and C below, of 10 17 CFR 242.201(b)(1).
[FR Doc. 2016–26131 Filed 10–28–16; 8:45 am] 11 In order to use consistent terminology, the
1 15 U.S.C. 78s(b)(1). Exchange proposes to replace the term ‘‘short sale
BILLING CODE 8011–01–P 2 17 CFR 240.19b–4. price test restriction’’ with ‘‘Short Sale Circuit
3 15 U.S.C. 78s(b)(3)(A). Breaker’’ within the first sentence of Rule 11.11(a).
30 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(6)(iii). 12 See Exchange Rule 11.6(q)(1).
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be cancelled. For any other order the System routing table.21 Orders in compliance with Regulation SHO.25
ineligible for routing due to a Short Sale routed pursuant to the Post to Away and The Exchange also notes that other
Circuit Breaker being in effect, the ROOC routing options that include a national securities exchanges do not
Exchange will post the unfilled balance Short Sale instruction are identified as expressly prohibit the routing of short
of the order to the EDGX Book,13 treat ‘‘short’’ are subject to the receiving sale orders. For example, Nasdaq and
the order as if it included a Book Only 14 Trading Center’s processes for handling NYSE Arca allow for the routing of short
or Post Only 15 instruction, and subject short sale orders in compliance with sale orders generally, and do not limit
it to the Re-Pricing Instructions to Rule 201 of Regulation SHO.22 a short sale order’s ability to route to
Comply with Rule 201 of Regulation Under Exchange Rule 11.11(a), orders certain routing options.26 Thus, the
SHO, as described in Rule Exchange that include a Short Sale instruction and proposal is directly targeted at removing
a Time-in-Force of IOC that are not impediments to and perfecting the
11.6(l)(2),16 unless the User has elected
eligible for routing during a Short Sale mechanism of a free and open market
the order Cancel Back as described in
Circuit Breaker will continue to be and national market system. The
Exchange Rule 11.6(b). cancelled. For any other order that proposed rule change also is designed to
The Exchange proposes to specify in includes a Short Sale instruction that is support the principles of Section
Rule 11.11(a) that orders that include a ineligible for routing due to a Short Sale 11A(a)(1) 27 of the Act in that it seeks to
Short Sale instruction may be eligible Circuit Breaker being in effect, the assure fair competition among brokers
for routing by the Exchange when a Exchange will continue to post the and dealers and among exchange
Short Sale Circuit Breaker is in effect unfilled balance of the order to the markets.
where the User 17 selects either the Post EDGX Book, treat the order as if it
included a Book Only or Post Only B. Self-Regulatory Organization’s
to Away 18 or ROOC 19 routing options.
instruction, and subject it to the Re- Statement on Burden on Competition
In contrast to all other routing strategies,
which are routed to other Trading Pricing Instructions to Comply with The Exchange does not believe that
Centers for immediate, the Post to Away Rule 201 of Regulation SHO, as the proposed rule change will result in
and ROOC routing options are orders described in Rule 11.6(l)(2), unless the any burden on competition that is not
that are sent to other Trading Centers for User has elected the order Cancel Back necessary or appropriate in furtherance
posting and/or later execution as further as described in Rule 11.6(b). of the purposes of the Act. The
described below. Under the Post to 2. Statutory Basis Exchange is simply proposing to reflect
Away routing option, the remainder of in its rules that orders that include a
The Exchange believes that the Short Sale instruction may be routed to
a routed order is routed to and posted proposed rule change is consistent with an away marked for execution under
to the order book of a destination on the Section 6(b) of the Act 23 and furthers two specific routing strategies offered by
System routing table,20 as specified by the objectives of Section 6(b)(5) of the the Exchange.
the User. ROOC is a routing option for Act 24 because it is designed to promote
orders that the User wishes to designate just and equitable principles of trade, C. Self-Regulatory Organization’s
for participation in the opening, re- remove impediments to and perfect the Statement on Comments on the
opening (following a halt, suspension, mechanism of a free and open market Proposed Rule Change Received From
or pause), or closing process of a and a national market system, foster Members, Participants, or Others
primary listing market other than the cooperation and coordination with The Exchange has neither solicited
Exchange (e.g., the New York Stock persons engaged in facilitating nor received written comments on the
Exchange, Inc. (‘‘NYSE’’), Nasdaq Stock transactions in securities, and, in proposed rule change.
Market LLC (‘‘Nasdaq’’), NYSE MKT general, protect investors and the public
LLC, or NYSE Arca, Inc. (‘‘NYSE Arca’’)) interest. Specifically, the proposed III. Date of Effectiveness of the
changes are designed to ensure clarity in Proposed Rule Change and Timing for
if received before the opening/re-
the Exchange’s rulebook with respect to Commission Action
opening/closing time of such market. If
shares remain unexecuted after the routing of orders in compliance with Because the foregoing proposed rule
attempting to execute in the opening, re- Rule 201 of Regulation SHO. In change does not: (A) Significantly affect
opening, or closing process, they are addition, providing Users the ability to the protection of investors or the public
either posted to the EDGX Book, send short sale orders that are routable interest; (B) impose any significant
executed, or routed to destinations on pursuant to the Post to Away and ROOC burden on competition; and (C) by its
routing options provides them terms, become operative for 30 days
13 See
additional flexibility with regard to the from the date on which it was filed or
Exchange Rule 1.5(d).
14 See Exchange Rule 11.6(n)(3).
handling of their orders. The Exchange such shorter time as the Commission
15 See Exchange Rule 11.6(n)(4). notes that orders that include a Short may designate it has become effective
16 In sum, under Exchange Rule 11.6(l)(2), an Sale instruction routed pursuant to the pursuant to Section 19(b)(3)(A) of the
order to sell with a Short Sale instruction that, at Post to Away or ROOC routing options Act 28 and paragraph (f)(6) of Rule 19b–
the time of entry, could not be executed or are identified as ‘‘short’’ and, therefore, 4 thereunder,29 the Exchange has
displayed in compliance with Rule 201 of
Regulation SHO will be re-priced by the System at
subject to the receiving Trading Center’s
the Permitted Price. See Exchange Rule 11.6(l)(2) processes for handling short sale orders 25 See supra note 21.
for a full description of the Exchange’s Re-Pricing 26 See e.g., Nasdaq Rules 4702(a) (stating
Instructions to Comply with Rule 201 of Regulation 21 Shares returned to the Exchange after routing generally that an ‘‘[o]rder may . . . may be routed
sradovich on DSK3GMQ082PROD with NOTICES
SHO. are handled in accordance with Exchange Rules, to other market centers for potential execution if
17 See Exchange Rule 1.5(cc). including Rule 11.10(a). designated as ‘Routable’ ’’) and 4763 (not
18 See 11.11(g)(12). 22 See, e.g., Nasdaq Rule 4763; NYSE Rule 440B; prohibiting the routing of a short sale order during
19 See 11.11(g)(8). and Nasdaq’s Regulation SHO Frequently Asked a short sale price test). See also e.g., NYSE Arca
20 The term ‘‘System routing table’’ is defined as Questions (updated March 10, 2011), available at Rule 7.6P (not prohibiting the routing of a short sale
the ‘‘the proprietary process for determining the https://nasdaqtrader.com/content/ order during a short sale price test).
specific trading venues to which the System routes marketregulation/regsho/regshoFAQs.pdf. 27 15 U.S.C. 78k–1(a)(1).
23 15 U.S.C. 78f(b). 28 15 U.S.C. 78s(b)(3)(A).
orders and the order in which it routes them.’’ See
Exchange Rule 11.11(g). 24 15 U.S.C. 78f(b)(5). 29 17 CFR 240.19b–4.
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designated this rule filing as non- Reference Room, 100 F Street NE., Amendment would implement changes
controversial. The Exchange has given Washington, DC 20549 on official to OPRA’s Non-Display Use Fees on
the Commission written notice of its business days between the hours of November 1, 2016. The Commission is
intent to file the proposed rule change, 10:00 a.m. and 3:00 p.m. Copies of such publishing this notice to provide
along with a brief description and text filing also will be available for interested persons an opportunity to
of the proposed rule change at least five inspection and copying at the principal submit written comments on the OPRA
business days prior to the date of filing office of the Exchange. All comments Plan amendment.
of the proposed rule change, or such received will be posted without change;
shorter time as designated by the the Commission does not edit personal I. Description and Purpose of the Plan
Commission. identifying information from Amendment
At any time within 60 days of the submissions. You should submit only OPRA proposes to amend footnotes 10
filing of the proposed rule change, the information that you wish to make and 11 in the OPRA Fee Schedule to
Commission summarily may available publicly. All submissions clarify the application of OPRA’s ‘‘Non-
temporarily suspend such rule change if should refer to File Number SR– Display Use’’ fees in certain respects.4
it appears to the Commission that such BatsEDGX–2016–54, and should be OPRA is not proposing any changes in
action is: (1) Necessary or appropriate in submitted on or before November 21, the Non-Display Use fees themselves,
the public interest; (2) for the protection 2016. although OPRA does propose to add the
of investors; or (3) otherwise in For the Commission, by the Division of word ‘‘Monthly’’ to the first phrase in
furtherance of the purposes of the Act. Trading and Markets, pursuant to delegated the Non-Display Use Fee entry in the
If the Commission takes such action, the authority.30 Fee Schedule.
Commission shall institute proceedings Brent J. Fields,
to determine whether the proposed rule (a) Elimination of the Term ‘‘Datafeed’’
Secretary.
should be approved or disapproved. [FR Doc. 2016–26134 Filed 10–28–16; 8:45 am]
OPRA proposes to eliminate the use
of the term ‘‘datafeed’’ in footnotes 10
IV. Solicitation of Comments BILLING CODE 8011–01–P
and 11. Some OPRA Vendors have
Interested persons are invited to argued that the use of the term
submit written data, views, and ‘‘datafeed’’ in these footnotes provides a
SECURITIES AND EXCHANGE
arguments concerning the foregoing, basis for saying that the Non-Display
COMMISSION
including whether the proposed rule Use fees are not applicable to their
change is consistent with the Act. [Release No. 34–79153; File No. SR–OPRA– downstream OPRA data recipients. That
Comments may be submitted by any of 2016–02] argument is based on a separate OPRA
the following methods: Policy entitled ‘‘Datafeeds.’’ 5 In that
Options Price Reporting Authority;
Electronic Comments Notice of Filing and Immediate Policy, the term ‘‘datafeed’’ is defined as
‘‘any uncontrolled retransmission of
• Use the Commission’s Internet Effectiveness of Proposed Amendment
OPRA market data.’’ The argument has
comment form (http://www.sec.gov/ to the Plan for Reporting of
Consolidated Options Last Sale been that an OPRA Vendor and its
rules/sro.shtml); or downstream data recipients are not
• Send an email to rule-comments@ Reports and Quotation Information To
making Non-Display Use of OPRA data
sec.gov. Please include File Number SR– Amend OPRA’s Non-Display Use Fees
if the Vendor ‘‘controls’’—that is,
BatsEDGX–2016–54 on the subject line. October 25, 2016. entitles—the server on which the Non-
Paper Comments Pursuant to Section 11A of the Display Use of the OPRA data is made.
• Send paper comments in triplicate Securities Exchange Act of 1934 From OPRA’s perspective, this is
to Secretary, Securities and Exchange (‘‘Act’’) 1 and Rule 608 thereunder,2 clearly incorrect. The Datafeeds Policy
Commission, 100 F Street NE., notice is hereby given that on is directed to describing how OPRA data
September 29, 2016, the Options Price is received, in order to explain the
Washington, DC 20549–1090.
Reporting Authority (‘‘OPRA’’) circumstances in which an OPRA data
All submissions should refer to File submitted to the Securities and recipient needs to be a party to a
Number SR–BatsEDGX–2016–54. This Exchange Commission (‘‘Commission’’) ‘‘Vendor Agreement’’, a ‘‘Direct Access
file number should be included on the an amendment to the Plan for Reporting Rider’’ and/or an ‘‘Indirect Access
subject line if email is used. To help the of Consolidated Options Last Sale Rider’’. The Datafeeds Policy is not
Commission process and review your Reports and Quotation Information relevant to the question of how OPRA
comments more efficiently, please use (‘‘OPRA Plan’’).3 The OPRA Plan data is used, specifically the question of
only one method. The Commission will
whether a particular use of OPRA data
post all comments on the Commission’s 30 17 CFR 200.30–3(a)(12). constitutes ‘‘Non-Display Use.’’ OPRA
Internet Web site (http://www.sec.gov/ 1 15 U.S.C. 78k–1. believes that the Datafeeds Policy is
rules/sro.shtml). Copies of the 2 17 CFR 242.608.
irrelevant to the question of the
submission, all subsequent 3 The OPRA Plan is a national market system plan
approved by the Commission pursuant to Section applicability of Non-Display Use fees.
amendments, all written statements
11A of the Act and Rule 608 thereunder. See Nonetheless, OPRA recognizes that
with respect to the proposed rule Securities Exchange Act Release No. 17638 (March the use of the term ‘‘datafeed’’ in
change that are filed with the 18, 1981), 22 SEC Docket 484 (March 31, 1981). The separate OPRA documents with
Commission, and all written full text of the OPRA Plan is available at http://
communications relating to the www.opradata.com. The OPRA Plan provides for
sradovich on DSK3GMQ082PROD with NOTICES
the collection and dissemination of last sale and Securities Exchange, LLC, NASDAQ BX, Inc.,
proposed rule change between the quotation information on options that are traded on NASDAQ PHLX LLC, The NASDAQ Stock Market
Commission and any person, other than the participant exchanges. The fourteen participants LLC, NYSE MKT LLC, and NYSE Arca, Inc.
those that may be withheld from the to the OPRA Plan are BATS BZX Exchange, Inc., 4 OPRA proposed its current Non-Display Use
public in accordance with the BATS EDGX Exchange, Inc., BOX Options fees in Securities Exchange Act Release No. 77584
Exchange, LLC, Chicago Board Options Exchange, (April 12, 2016), 81 FR 22670 (April 18, 2016) (File
provisions of 5 U.S.C. 552, will be Incorporated, C2 Options Exchange, Incorporated, No. OPRA–2015–01).
available for Web site viewing and International Securities Exchange, LLC, ISE Gemini, 5 This Policy is available on the OPRA Web site
printing in the Commission’s Public LLC, ISE Mercury, LLC, Miami International under the ‘‘Policies’’ tab.
VerDate Sep<11>2014 17:53 Oct 28, 2016 Jkt 241001 PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 E:\FR\FM\31OCN1.SGM 31OCN1](https://thefederalregister.org/doc/81_FR_75668/page/3.svg)
Document Created: 2018-02-02 12:13:43
Document Modified: 2018-02-02 12:13:43
| 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 75458 |
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