81 FR 95241 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay the Implementation of the Limit Order Protection
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 248 (December 27, 2016)
Federal Register Volume 81, Issue 248 (December 27, 2016)
| Page Range | 95241-95243 | |
| FR Document | 2016-31101 |
[Federal Register Volume 81, Number 248 (Tuesday, December 27, 2016)] [Notices] [Pages 95241-95243] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-31101] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79609; File No. SR-BX-2016-072] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Delay the Implementation of the Limit Order Protection December 20, 2016. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ [[Page 95242]] notice is hereby given that on December 16, 2016, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III, below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to delay the implementation of the Limit Order Protection or ``LOP'' for members accessing the BX Market Center. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposal is to delay the implementation of the Exchange's mechanism to protect against erroneous Limit Orders, which are entered into BX Market Center, at Rule 4757(d).\3\ The Exchange received approval to implement this mechanism on August 24, 2016.\4\ Within that rule change, the Exchanges proposed to implement LOP within ninety days of the approval of the proposal, which was November 22, 2016.\5\ The Exchange subsequently filed a modification to the original proposal and delayed the implementation an additional sixty (60) days from the original timeframe in order to implement the LOP, which was January 21, 2017.\6\ --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 78246 (August 24, 2016), 81 FR 59672 (August 30, 2016) (SR-BX-2016-037). See also Securities Exchange Act Release No. 79329 (November 16, 2016), 81 FR 83902 (November 22, 2016) (SR-BX-2016-058). \4\ See Securities Exchange Act Release No. 78246 (August 24, 2016), 81 FR 59672 (August 30, 2016) (SR-BX-2016-037) (Notice of Filing of Amendments No. 1 and Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments No. 1, To Adopt Limit Order Protections). \5\ Id at 45321. \6\ See Securities Exchange Act Release No. 79329 (November 16, 2016), 81 FR 83902 (November 22, 2016) (SR-BX-2016-058) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Limit Order Protection). --------------------------------------------------------------------------- At this time the Exchange proposes to delay the implementation from January 21, 2017 until a date no later than March 31, 2017 in order to allow additional time to complete testing. The Exchange will announce the specific date in advance through an Equities Trader Alert. For more information regarding LOP see the previous LOP rule changes.\7\ --------------------------------------------------------------------------- \7\ See note 3 above. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act \8\ in general, and furthers the objectives of Section 6(b)(5) of the Act \9\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest, by permitting the Exchange additional time to implement the LOP in accordance with the Exchange's processes. The Exchange's proposal does not significantly affect the protection of investors or the public interest because this proposal does not modify the manner in which LOP operates, only the implementation date is impacted. The Exchange will provide advance notice to members with respect to the new date. --------------------------------------------------------------------------- \8\ 15 U.S.C. 78f(b). \9\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange's proposal does not impose any significant burden on competition because LOP will apply to all BX market participants in a uniform manner once implemented. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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)(iii) of the Act \10\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\11\ --------------------------------------------------------------------------- \10\ 15 U.S.C. 78s(b)(3)(A)(iii). \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. The Exchange has satisfied this requirement. --------------------------------------------------------------------------- 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: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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-BX-2016-072 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-BX-2016-072. 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/ [[Page 95243]] 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 the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BX- 2016-072 and should be submitted on or before January 17, 2017. --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2016-31101 Filed 12-23-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices 95241
market makers that meet heightened any burden on competition not number should be included on the
quoting obligations.59 necessary or appropriate in furtherance subject line if email is used. To help the
Finally, a commenter asserts that due of the purposes of the Exchange Act. Commission process and review your
to the implementation of the LTAD comments more efficiently, please use
IV. Procedure: Request for Written
through software, rather than hardware, only one method. The Commission will
Comments
the indeterminacy of the delay may post all comments on the Commission’s
result in the LTAD producing delays The Commission requests that Internet Web site (http://www.sec.gov/
inconsistent with the Commission’s interested persons provide written rules/sro.shtml). Copies of the
‘‘speed bump guidelines.’’ 60 In submissions of their views, data, and submission, all subsequent
response, the Exchange states that arguments with respect to the issues amendments, all written statements
system messaging delays and variable identified above, as well as any other with respect to the proposed rule
message queuing are irrelevant, stating concerns they may have with the change that are filed with the
that they exist today in every market proposal. In particular, the Commission Commission, and all written
that utilizes a continuous limit order invites the written views of interested communications relating to the
book to rank and match orders and are persons concerning whether the proposed rule change between the
a function of finite network and proposal is consistent with Sections Commission and any person, other than
processing resources.61 The commenter 6(b)(5), 6(b)(8), or any other provision of those that may be withheld from the
responds in turn that implementing the the Exchange Act, or the rules and public in accordance with the
LTAD through software could create regulations thereunder. Although there provisions of 5 U.S.C. 552, will be
opportunities for delays and queuing, do not appear to be any issues relevant available for Web site viewing and
and that the Exchange should outline to approval or disapproval that would printing in the Commission’s Public
how it plans to surveil for and be facilitated by an oral presentation of Reference Room, 100 F Street NE.,
remediate any implementation issues.62 views, data, and arguments, the Washington, DC 20549, on official
Commission will consider, pursuant to business days between the hours of
IV. Proceedings To Determine Whether Rule 19b-4, any request for an 10:00 a.m. and 3:00 p.m. Copies of these
To Approve or Disapprove SR–CHX– opportunity to make an oral filings also will be available for
2016–16 and Grounds for Disapproval presentation.66 inspection and copying at the principal
Under Consideration Interested persons are invited to office of the Exchange. All comments
The Commission is instituting submit written data, views, and received will be posted without change;
proceedings pursuant to Section arguments regarding whether the the Commission does not edit personal
19(b)(2)(B) of the Exchange Act 63 to proposal should be approved or identifying information from
determine whether the proposed rule disapproved by January 17, 2017. Any submissions. You should submit only
change should be approved or person who wishes to file a rebuttal to information that you wish to make
disapproved. Institution of such any other person’s submission must file available publicly. All submissions
proceedings is appropriate at this time that rebuttal by January 31, 2017. The should refer to File Number SR–CHX–
in view of the legal and policy issues Commission asks that commenters 2016–16 and should be submitted on or
raised by the proposed rule change. address the sufficiency of the before January 17, 2017]. Rebuttal
Institution of proceedings does not Exchange’s statements in support of the comments should be submitted by
indicate that the Commission has proposal, in addition to any other January 31, 2017.
reached any conclusions with respect to comments they may wish to submit
about the proposed rule change. For the Commission, by the Division of
any of the issues involved. Rather, as Trading and Markets, pursuant to delegated
stated below, the Commission seeks and Comments may be submitted by any
authority.67
encourages interested persons to of the following methods:
Eduardo A. Aleman,
provide comments on the proposed rule Electronic Comments Assistant Secretary.
change.
• Use the Commission’s Internet [FR Doc. 2016–31100 Filed 12–23–16; 8:45 am]
Pursuant to Section 19(b)(2)(B) of the
comment form (http://www.sec.gov/ BILLING CODE 8011–01–P
Exchange Act,64 the Commission is
rules/sro.shtml); or
providing notice of the grounds for • Send an email to rule-comments@
disapproval under consideration. The sec.gov. Please include File Number SR– SECURITIES AND EXCHANGE
Commission is instituting proceedings CHX–2016–16 on the subject line. COMMISSION
to allow for additional analysis of the
proposed rule change’s consistency with Paper Comments [Release No. 34–79609; File No. SR–BX–
Section 6(b)(5) of the Exchange Act, • Send paper comments in triplicate 2016–072]
which requires, among other things, that to Secretary, Securities and Exchange
the rules of a national securities Self-Regulatory Organizations;
Commission, 100 F Street NE.,
exchange not be designed to permit NASDAQ BX, Inc.; Notice of Filing and
Washington, DC 20549–1090.
unfair discrimination between Immediate Effectiveness of Proposed
All submissions should refer to File Rule Change To Delay the
customers, issuers, brokers, or dealers 65 Numbers SR–CHX–2016–16. This file
and Section 6(b)(8) of the Exchange Act, Implementation of the Limit Order
which requires that the rules of a Protection
asabaliauskas on DSK3SPTVN1PROD with NOTICES
66 Section 19(b)(2) of the Exchange Act, as
national securities exchange not impose amended by the Securities Act Amendments of December 20, 2016.
1975, Public Law 94–29 (June 4, 1975), grants the
59 See Commission flexibility to determine what type of Pursuant to Section 19(b)(1) of the
CTC Letter, supra note 6, at 6.
60 See Leuchtkafer Letter 1, supra note 6, at 1. proceeding—either oral or notice and opportunity Securities Exchange Act of 1934
61 See CHX Response, supra note 6, at 15. for written comments—is appropriate for (‘‘Act’’),1 and Rule 19b–4 thereunder,2
62 See Leuchtkafer Letter 2, supra note 6, at 2.
consideration of a particular proposal by a self-
regulatory organization. See Securities Act
63 15 U.S.C. 78s(b)(2)(B). 67 17 CFR 200.30–3(a)(57).
Amendments of 1975, Senate Comm. on Banking,
64 Id. 1 15 U.S.C. 78s(b)(1).
Housing & Urban Affairs, S. Rep. No. 75, 94th
65 15 U.S.C. 78f(b)(5). Cong., 1st Sess. 30 (1975). 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 81, No. 248 / Tuesday, December 27, 2016 / Notices 95243
rules/sro.shtml). Copies of the notice to solicit comments on the be satisfied. The SEC published the
submission, all subsequent proposed rule change from interested Proposal in the Federal Register for
amendments, all written statements persons. notice and comment on September 20,
with respect to the proposed rule 2016.4 Nasdaq subsequently filed three
I. Self-Regulatory Organization’s
change that are filed with the Partial Amendments to clarify aspects of
Statement of the Terms of Substance of
Commission, and all written the Proposal. The Commission approved
the Proposed Rule Change
communications relating to the the Proposal, as amended, on October 7,
proposed rule change between the The Exchange proposes to amend 2016.5
Commission and any person, other than Rule 4770 (Compliance with Regulation In SR–NASDAQ–2016–126, Nasdaq
those that may be withheld from the NMS Plan to Implement a Tick Size had initially proposed a re-pricing
public in accordance with the Pilot) relating to the handling to certain functionality for Price to Comply
provisions of 5 U.S.C. 552, will be Order Types in Test Group Three Pilot Orders, Non-Displayed Orders, and
available for Web site viewing and Securities in connection with the Post-Only Orders entered through the
printing in the Commission’s Public Regulation NMS Plan to Implement a OUCH and FLITE protocols in Test
Reference Room, 100 F Street NE., Tick Size Pilot Program (‘‘Plan’’ or Group Three Pilot securities.6 Nasdaq
Washington, DC 20549, on official ‘‘Pilot’’).3 Relatedly, Nasdaq also subsequently determined that it would
business days between the hours of proposes to delete Commentary .14, not offer this re-pricing functionality for
10:00 a.m. and 3:00 p.m. Copies of the which addresses the current handling of Price to Comply Orders, Non-Displayed
filing also will be available for those Order Types. Finally, Nasdaq Orders, and Post-Only Orders entered
inspection and copying at the principal proposes to add language to Rule through the OUCH and FLITE protocols
office of the Exchange. All comments 4770(d)(1) to clarify the treatment of in Test Group Three Pilot securities. As
received will be posted without change; orders in a Test Group Three Security part of Partial Amendment No. 2 to SR–
the Commission does not edit personal entered through the RASH, QIX or FIX NASDAQ–2016–126, Nasdaq proposed
identifying information from protocols. to delete the relevant language from
submissions. You should submit only The text of the proposed rule change Rule 4770 related to this re-pricing
information that you wish to make is available on the Exchange’s Web site functionality.
available publicly. All submissions at http://nasdaq.cchwallstreet.com, at In that amendment, Nasdaq noted that
should refer to File Number SR–BX– the principal office of the Exchange, and this change would only impact the
2016–072 and should be submitted on at the Commission’s Public Reference treatment of Price to Comply Orders,
or before January 17, 2017. Room. Non-Displayed Orders, and Post-Only
For the Commission, by the Division of II. Self-Regulatory Organization’s orders that are submitted through the
Trading and Markets, pursuant to delegated Statement of the Purpose of, and OUCH and FLITE protocols in Test
authority.12 Statutory Basis for, the Proposed Rule Group Three Pilot Securities, as these
Eduardo A. Aleman, Change types of Orders that are currently
Assistant Secretary. submitted to Nasdaq through the RASH,
In its filing with the Commission, the QIX or FIX protocols are already subject
[FR Doc. 2016–31101 Filed 12–23–16; 8:45 am]
Exchange included statements to this re-pricing functionality and will
BILLING CODE 8011–01–P concerning the purpose of and basis for remain subject to this functionality
the proposed rule change and discussed under the Pilot.
any comments it received on the In the Amendment, Nasdaq further
SECURITIES AND EXCHANGE
proposed rule change. The text of these noted that its systems are currently
COMMISSION
statements may be examined at the programmed so that Price to Comply
[Release No. 34–79616; File No. SR– places specified in Item IV below. The Orders, Non-Displayed Orders and Post-
NASDAQ–2016–171] Exchange has prepared summaries, set Only Orders entered through the OUCH
forth in sections A, B, and C below, of and FLITE protocols in Test Group
Self-Regulatory Organizations; The the most significant aspects of such
NASDAQ Stock Market LLC; Notice of Three Pilot Securities may be adjusted
statements. repeatedly to reflect changes to the
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule A. Self-Regulatory Organization’s NBBO and/or the best price on the
4770 (Compliance With Regulation Statement of the Purpose of, and
4 See Securities Exchange Act Release No. 78837
NMS Plan To Implement a Tick Size Statutory Basis for, the Proposed Rule
(September 14, 2016), 81 FR 64544 (September 20,
Pilot) Change 2016) (Notice of filing of SR–NASDAQ–2016–126).
5 See Securities Exchange Act Release No. 79075
December 20, 2016. 1. Purpose
(October 7, 2016) (Order approving SR–NASDAQ–
Pursuant to Section 19(b)(1) of the On September 7, 2016, The Nasdaq 2016–126).
Securities Exchange Act of 1934 Stock Market LLC (‘‘Nasdaq’’ or 6 As originally proposed, Rule 4770(d)(2) stated
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 ‘‘Exchange’’) filed with the Securities that Price to Comply Orders in a Test Group Three
notice is hereby given that on December Pilot Security will be adjusted repeatedly in
and Exchange Commission (‘‘SEC’’ or accordance with changes to the NBBO until such
13, 2016, The NASDAQ Stock Market ‘‘Commission’’) a proposed rule change time as the Price to Comply Order is able to be
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed (‘‘Proposal’’) to adopt paragraph (d) and ranked and displayed at its original entered limit
with the Securities and Exchange Commentary .12 to Exchange Rule 4770 price. Rule 4770(d)(3) stated that, if market
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Commission (‘‘SEC’’ or ‘‘Commission’’) conditions allow, a Non-Displayed Order in a Test
to describe changes to system Group Three Pilot Security will be adjusted
the proposed rule change as described functionality necessary to implement repeatedly in accordance with changes to the NBBO
in Items I and II below, which Items the Plan. The Exchange also proposed up (down) to the Order’s limit price. Rule
have been prepared by the Exchange. amendments to Rule 4770(a) and (c) to 4770(d)(4) stated that, if market conditions allow,
The Commission is publishing this the Post-Only Order in a Test Group Three Pilot
clarify how the Trade-at exception may Security will be adjusted repeatedly in accordance
with changes to the NBBO or the best price on the
12 17 CFR 200.30–3(a)(12). 3 See Securities Exchange Act Release No. 74892 Nasdaq Book, as applicable until such time as the
1 15 U.S.C. 78s(b)(1). (May 6, 2015), 80 FR 27513 (May 13, 2015) Post-Only Order is able to be ranked and displayed
2 17 CFR 240.19b–4. (‘‘Approval Order’’). at its original entered limit price.
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Document Created: 2018-02-14 09:13:32
Document Modified: 2018-02-14 09:13:32
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 81 FR 95241 |
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