81 FR 83916 - Proposed Collection; Comment Request

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 225 (November 22, 2016)

Page Range		83916-83917
FR Document		2016-28027

Federal Register, Volume 81 Issue 225 (Tuesday, November 22, 2016)

[Federal Register Volume 81, Number 225 (Tuesday, November 22, 2016)]
[Notices]
[Pages 83916-83917]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-28027]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of FOIA Services, 100 F Street NE., Washington, DC 
20549-2736.

Extension:
    Rule 201 and Rule 200(g) of Regulation SHO, SEC File No. 270-
606, OMB Control No. 3235-0670.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.) (``PRA''), the Securities and Exchange 
Commission (``Commission'') is soliciting comments on the existing 
collection of information provided for in Rule 201 (17 CFR 242.201) and 
Rule 200(g) (17 CFR 242.200(g)) under the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.). The Commission plans to submit this 
existing collection of information to the Office of Management and 
Budget (``OMB'') for extension and approval.
    Rule 201 is a short sale-related circuit breaker rule that, if 
triggered, imposes a restriction on the prices at which securities may 
be sold short. Rule 200(g) provides that a broker-dealer may mark 
certain qualifying sell orders ``short exempt.'' The information 
collected under Rule 201's written policies and procedures requirement 
applicable to trading centers, the written policies and procedures 
requirement of the broker-dealer provision of Rule 201(c), the written 
policies and procedures requirement of the riskless principal provision 
of Rule 201(d)(6), and the ``short exempt'' marking requirement of Rule 
200(g) enable the Commission and self-regulatory organizations 
(``SROs'') to examine and monitor for compliance with the requirements 
of Rule 201 and Rule 200(g).
    In addition, the information collected under Rule 201's written 
policies and procedures requirement applicable to trading centers helps 
to ensure that trading centers do not execute or display any 
impermissibly priced short sale orders, unless an order is marked 
``short exempt,'' in accordance with the rule's requirements. 
Similarly, the information collected under the written policies and 
procedures requirement of the broker-dealer provision of Rule 201(c) 
and the riskless principal provision of Rule 201(d)(6) helps to ensure 
that broker-dealers comply with the requirements of these provisions. 
The information collected pursuant to the ``short exempt'' marking 
requirement of Rule 200(g) also provides an indication to a trading 
center of when it must execute or display a short sale order without 
regard to whether the short sale order is at a price that is less than 
or equal to the current national best bid.
    It is estimated that SRO and non-SRO respondents registered with 
the Commission and subject to the collection of information 
requirements of Rule 201 and Rule 200(g) incur an aggregate annual 
burden of 2,908,309 hours to comply with the rules and an aggregate 
annual external cost of $120,000.
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
estimates of the burden of the proposed collection of information; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on respondents, including through the use of automated 
collection techniques or other forms of information technology. 
Consideration will be given to comments and suggestions submitted in 
writing within 60 days of this publication.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information under the PRA unless it 
displays a currently valid OMB control number.
    Please direct your written comments to: Pamela Dyson, Director/
Chief Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or send an email 
to: [email protected].


[[Page 83917]]


     Dated: November 16, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-28027 Filed 11-21-16; 8:45 am]
 BILLING CODE 8011-01-P

83916 Federal Register / Vol. 81, No. 225 / Tuesday, November 22, 2016 / Notices

assure overall effectiveness of such or by sending an email to: Shagufta_ In addition, the information collected
controls and procedures. Each such Ahmed@omb.eop.gov; and (ii) Pamela under Rule 201’s written policies and
broker or dealer is required to preserve Dyson, Director/Chief Information procedures requirement applicable to
a copy of its supervisory procedures and Officer, Securities and Exchange trading centers helps to ensure that
a written description of its risk Commission, c/o Remi Pavlik-Simon, trading centers do not execute or
management controls as part of its books 100 F Street NE., Washington, DC display any impermissibly priced short
and records in a manner consistent with 20549, or by sending an email to: PRA_ sale orders, unless an order is marked
Rule 17a–4(e)(7) under the Exchange Mailbox@sec.gov. Comments must be ‘‘short exempt,’’ in accordance with the
Act. Such regular review is required to submitted to OMB within 30 days of rule’s requirements. Similarly, the
be conducted in accordance with this notice. information collected under the written
written procedures and is required to be Dated: November 16, 2016. policies and procedures requirement of
documented. The broker or dealer is the broker-dealer provision of Rule
Brent J. Fields,
required to preserve a copy of such 201(c) and the riskless principal
written procedures, and documentation Secretary.
[FR Doc. 2016–28028 Filed 11–21–16; 8:45 am] provision of Rule 201(d)(6) helps to
of each such review, as part of its books ensure that broker-dealers comply with
and records in a manner consistent with BILLING CODE 8011–01–P
the requirements of these provisions.
Rule 17a–4(e)(7) under the Exchange
The information collected pursuant to
Act, and Rule 17a–4(b) under the
SECURITIES AND EXCHANGE the ‘‘short exempt’’ marking
Exchange Act, respectively.
In addition, the Chief Executive COMMISSION requirement of Rule 200(g) also provides
Officer (or equivalent officer) is required an indication to a trading center of
to certify annually that the broker or Proposed Collection; Comment when it must execute or display a short
dealer’s risk management controls and Request sale order without regard to whether the
supervisory procedures comply with the short sale order is at a price that is less
Upon Written Request, Copies Available than or equal to the current national
rule, and that the broker-dealer
From: Securities and Exchange best bid.
conducted such review. Such
Commission, Office of FOIA Services,
certifications are required to be It is estimated that SRO and non-SRO
preserved by the broker or dealer as part 100 F Street NE., Washington, DC
20549–2736. respondents registered with the
of its books and records in a manner Commission and subject to the
consistent with Rule 17a–4(b) under the Extension: collection of information requirements
Exchange Act. Compliance with Rule Rule 201 and Rule 200(g) of Regulation
of Rule 201 and Rule 200(g) incur an
15c3–5 is mandatory. SHO, SEC File No. 270–606, OMB
Control No. 3235–0670. aggregate annual burden of 2,908,309
Respondents consist of broker-dealers hours to comply with the rules and an
with access to trading directly on an Notice is hereby given that pursuant aggregate annual external cost of
exchange or ATS. The Commission to the Paperwork Reduction Act of 1995 $120,000.
estimates that there are currently 640 (44 U.S.C. 3501 et seq.) (‘‘PRA’’), the
respondents. To comply with Rule Written comments are invited on: (a)
Securities and Exchange Commission Whether the proposed collection of
15c3–5, these respondents will spend a (‘‘Commission’’) is soliciting comments
total of approximately 102,400 hours information is necessary for the proper
on the existing collection of information
per year (160 hours per broker-dealer × provided for in Rule 201 (17 CFR
performance of the functions of the
640 broker-dealers = 102,400 hours). At Commission, including whether the
242.201) and Rule 200(g) (17 CFR information shall have practical utility;
an average internal cost per burden hour
242.200(g)) under the Securities (b) the accuracy of the Commission’s
of approximately $339.09, the resultant
Exchange Act of 1934 (15 U.S.C. 78a et estimates of the burden of the proposed
total related internal cost of compliance
seq.). The Commission plans to submit collection of information; (c) ways to
for these respondents is $34,722,560 per
this existing collection of information to enhance the quality, utility, and clarity
year (102,400 burden hours multiplied
the Office of Management and Budget of the information collected; and (d)
by approximately $339.09/hour). In
(‘‘OMB’’) for extension and approval.
addition, for hardware and software ways to minimize the burden of the
expenses, the Commission estimates Rule 201 is a short sale-related circuit collection of information on
that the average annual external cost breaker rule that, if triggered, imposes a respondents, including through the use
would be approximately $20,500 per restriction on the prices at which of automated collection techniques or
broker-dealer, or $13,120,000 in the securities may be sold short. Rule 200(g) other forms of information technology.
aggregate ($20,500 per broker-dealer × provides that a broker-dealer may mark Consideration will be given to
640 brokers and dealers = $13,120,000). certain qualifying sell orders ‘‘short comments and suggestions submitted in
An agency may not conduct or exempt.’’ The information collected writing within 60 days of this
sponsor, and a person is not required to under Rule 201’s written policies and publication.
respond to, a collection of information procedures requirement applicable to
trading centers, the written policies and An agency may not conduct or
under the PRA unless it displays a
procedures requirement of the broker- sponsor, and a person is not required to
currently valid OMB control number.
The public may view background dealer provision of Rule 201(c), the respond to, a collection of information
documentation for this information written policies and procedures under the PRA unless it displays a
collection at the following Web site: requirement of the riskless principal currently valid OMB control number.
sradovich on DSK3GMQ082PROD with NOTICES

www.reginfo.gov. Comments should be provision of Rule 201(d)(6), and the Please direct your written comments
directed to: (i) Desk Officer for the ‘‘short exempt’’ marking requirement of to: Pamela Dyson, Director/Chief
Securities and Exchange Commission, Rule 200(g) enable the Commission and Information Officer, Securities and
Office of Information and Regulatory self-regulatory organizations (‘‘SROs’’) Exchange Commission, c/o Remi Pavlik-
Affairs, Office of Management and to examine and monitor for compliance Simon, 100 F Street NE., Washington,
Budget, Room 10102, New Executive with the requirements of Rule 201 and DC 20549, or send an email to: PRA_
Office Building, Washington, DC 20503, Rule 200(g). Mailbox@sec.gov.

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Federal Register / Vol. 81, No. 225 / Tuesday, November 22, 2016 / Notices 83917

Dated: November 16, 2016. A. Self-Regulatory Organization’s apply to Market Orders, Market Maker
Brent J. Fields, Statement of the Purpose of, and Peg Orders 6 or Intermarket Sweep
Secretary. Statutory Basis for, the Proposed Rule Orders (ISO).7 The Exchange proposes
[FR Doc. 2016–28027 Filed 11–21–16; 8:45 am] Change to modify this language to specifically
BILLING CODE 8011–01–P 1. Purpose state that LOP would not apply to
Orders with Market and Primary
The Exchange recently adopted a new Pegging.8
SECURITIES AND EXCHANGE mechanism to protect against erroneous There are three types of Pegging
COMMISSION Limit Orders which are entered into Orders: Primary Pegging, Market
PSX at Rule 3307(f).3 This mechanism Pegging and Midpoint Pegging. Pegging
[Release No. 34–79326; File No. SR–Phlx– addresses risks to market participants of is an Order Attribute that allows an
2016–113] human error in entering Limit Orders at Order to have its price automatically set
unintended prices. Specifically, LOP with reference to the NBBO; provided,
Self-Regulatory Organizations;
prevents certain Limit Orders from however, that if PSX is the sole market
NASDAQ PHLX LLC; Notice of Filing
executing or being placed on the Order center at the Best Bid or Best Offer (as
and Immediate Effectiveness of
Book at prices outside pre-set standard applicable), then the price of any
Proposed Rule Change To Amend the
limits. The System rejects those Limit Displayed Order with Primary Pegging
Limit Order Protection
Orders, rather than executing them (as defined below) will be set with
November 16, 2016. automatically. LOP rejects Limit Orders reference to the highest bid or lowest
Pursuant to Section 19(b)(1) of the back to the member when the order offer disseminated by a market center
Securities Exchange Act of 1934 exceeds certain defined logic. other than PSX. An Order with a
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Specifically, LOP prevents certain Limit Pegging Order Attribute may be referred
notice is hereby given that on November Orders at prices outside of pre-set to as a ‘‘Pegged Order.’’9 For purposes
15, 2016, NASDAQ PHLX LLC (‘‘Phlx’’ standard limits (‘‘LOP Limit’’) from of this Rule 3301B, the price to which
or ‘‘Exchange’’) filed with the Securities being accepted by the System. an Order is pegged will be referred to as
and Exchange Commission (‘‘SEC’’ or Modifications of Orders the Inside Quotation, the Inside Bid, or
‘‘Commission’’) the proposed rule the Inside Offer, as appropriate. There
change as described in Items I and II In its adoptive filing, the Exchange
are three varieties of Pegging:
below, which Items have been prepared noted that LOP shall apply to all Quotes
and Orders, including any modified • Primary Pegging means Pegging with
by the Exchange. The Commission is reference to the Inside Quotation on the same
publishing this notice to solicit Orders.4 At this time, the Exchange
proposes to remove ‘‘including any side of the market. For example, if the Inside
comments on the proposed rule change Bid was $11, an Order to buy with Primary
modified Orders’’ from the rule text at
from interested persons. Pegging would be priced at $11.
rule 3307(f)(i). The Exchange proposes • Market Pegging means Pegging with
I. Self-Regulatory Organization’s to amend this language because it is reference to the Inside Quotation on the
Statement of the Terms of Substance of misleading and may cause confusion. opposite side of the market. For example, if
the Proposed Rule Change The Exchange proposes to state that the Inside Offer was $11.06, an Order to buy
The Exchange proposes to amend the LOP shall apply to all Quotes and with Market Pegging would be priced at
Orders, including Quotes and Orders $11.06.
Limit Order Protection or ‘‘LOP’’ for • Midpoint Pegging means Pegging with
members accessing PSX and adding rule that have been modified, where the
modification results in a new timestamp reference to the midpoint between the Inside
text related to a collar applicable to Bid and the Inside Offer (the ‘‘Midpoint’’).
Primary Pegging and Market Pegging and priority.5 Any Order that is
Thus, if the Inside Bid was $11 and the
Orders. modified within the System, but does Inside Offer was $11.06, an Order with
The text of the proposed rule change not lose priority, for example an Order Midpoint Pegging would be priced at $11.03.
is available on the Exchange’s Web site that was decremented, will not be
at http://nasdaqphlx.cchwallstreet.com/ subject to LOP after it was modified 6 A ‘‘Market Maker Peg Order’’ is an Order Type

, at the principal office of the Exchange, because the system does not cancel designed to allow a Market Maker to maintain a
and at the Commission’s Public decremented orders from the Order continuous two-sided quotation at a displayed price
Book. If an Order is cancelled either by that is compliant with the quotation requirements
Reference Room. for Market Makers set forth in Rule 3213(a)(2). The
the member or by the system and a new displayed price of the Market Maker Peg Order is
II. Self-Regulatory Organization’s Order entered into the System, the new set with reference to a ‘‘Reference Price’’ in order
Statement of the Purpose of, and Order would be subject to LOP. For to keep the displayed price of the Market Maker Peg
Statutory Basis for, the Proposed Rule example, if the price of an Order is Order within a bounded price range. A Market
Change Maker Peg Order may be entered through RASH or
modified, the system will cancel the FIX only. A Market Maker Peg Order must be
In its filing with the Commission, the Order and the modified Order would entered with a limit price beyond which the Order
Exchange included statements receive a new timestamp and priority may not be priced. The Reference Price for a Market
and this Order would be subject to LOP. Maker Peg Order to buy (sell) is the then-current
concerning the purpose of and basis for National Best Bid (National Best Offer) (including
the proposed rule change and discussed Exceptions to LOP PSX), or if no such National Best Bid or National
any comments it received on the Best Offer, the most recent reported last-sale eligible
proposed rule change. The text of these The Exchange also noted in its trade from the responsible single plan processor for
adoptive filing that LOP would not that day, or if none, the previous closing price of
statements may be examined at the the security as adjusted to reflect any corporate
sradovich on DSK3GMQ082PROD with NOTICES

places specified in Item IV below. The 3 See Securities Exchange Act Release No. 78246 actions (e.g., dividends or stock splits) in the
Exchange has prepared summaries, set [sic] (August 24, 2016), 81 FR 59672 (August 30, security. See PSX Rule 3301A(b)(5)(A).
7 An Intermarket Sweep or ISO Order, which is
forth in sections A, B, and C below, of 2016) (SR–Phlx–2016–58).
4 If an Order is modified, LOP will review the an Order that is immediately executable within PSX
the most significant aspects of such against Orders against which they are marketable,
order anew and, if LOP is triggered, such
statements. modification will not take effect and the original is not subject to LOP. See PSX Rule 3401(g).
order will be rejected. 8 Orders with Market and Primary Pegging
1 15 U.S.C. 78s(b)(1). 5 See Rule 4756 (Entry and Display of Quotes and available through RASH and FIX only.
2 17 CFR 240.19b–4. Orders) at (a)(3). 9 PSX Rule 3301B(d).

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Document Created: 2018-02-14 08:29:08
Document Modified: 2018-02-14 08:29:08

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 83916