82 FR 14054 - Self-Regulatory Organizations: Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Exchange Rule 11.340 To Modify the Date of Appendix B Web Site Data Publication Pursuant to the Regulation NMS Plan To Implement a Tick Size Pilot Program

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 50 (March 16, 2017)

[Federal Register Volume 82, Number 50 (Thursday, March 16, 2017)]
[Notices]
[Pages 14054-14056]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-05225]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80218; File No. SR-IEX-2017-07]


Self-Regulatory Organizations: Investors Exchange LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend 
Exchange Rule 11.340 To Modify the Date of Appendix B Web Site Data 
Publication Pursuant to the Regulation NMS Plan To Implement a Tick 
Size Pilot Program

March 10, 2017.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on February 28, 2017, the Investors Exchange LLC (``IEX'' 
or the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Pursuant to the provisions of Section 19(b)(1) under the Securities 
Exchange Act of 1934 (``Act''),\4\ and Rule 19b-4 thereunder,\5\ 
Investors Exchange LLC (``IEX'' or ``Exchange'') is filing with the 
Securities and Exchange Commission (``Commission'') a proposed rule 
change to amend Exchange Rule 11.340 to modify the date of Appendix B 
Web site data publication pursuant to the Regulation NMS Plan to 
Implement a Tick Size Pilot Program (``Plan''). The Exchange has 
designated this proposal as non-controversial and provided the 
Commission with the notice required by Rule 19b-4(f)(6)(iii) under the 
Act.\6\
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    \4\ 15 U.S.C. 78s(b)(1).
    \5\ 17 CFR 240.19b-4.
    \6\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available at the Exchange's 
Web site at www.iextrading.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 the 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
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 statement may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Rule 11.340(b) (Compliance with Data Collection Requirements) \7\ 
implements the data collection and Web site publication requirements of 
the Plan.\8\ Supplementary Material .09 to IEX Rule 11.340 provides, 
among other things, that the requirement that the Exchange or 
Designated Examining Authority (``DEA'') make certain data publicly 
available on their Web site pursuant to Appendix B and C to the Plan 
shall commence at the beginning of the Pilot Period,\9\ and that the 
Exchange or DEA shall make data for the Pre-Pilot Period publicly 
available on their Web site pursuant to Appendix B and C to the Plan by 
February 28, 2017.\10\
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    \7\ See Exchange Rule 11.340(b). See also Securities Exchange 
Act Release Nos. 77418 (March 22, 2016), 81 FR 17213 (March 28, 
2016); and 78795 (September 9, 2016), 81 FR 63508 (September 15, 
2016).
    \8\ The Participants filed the Plan to comply with an order 
issued by the Commission on June 24, 2014. See Letter from Brendon 
J. Weiss, Vice President, Intercontinental Exchange, Inc., to 
Secretary, Commission, dated August 25, 2014 (``SRO Tick Size Plan 
Proposal''). See Securities Exchange Act Release No 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014); see also Securities Exchange Act 
Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015).
    \9\ Unless otherwise defined herein, capitalized terms have the 
meaning ascribed to them in Rule 11.340.
    \10\ On November 30, 2016, the SEC granted exemptive relief to 
the Participants, and the Exchange filed proposed rule changes to, 
among other things, delay the publication of Web site data pursuant 
to Appendices B and C to the Plan until February 28, 2017, and to 
delay the ongoing Web site publication by ninety days such that data 
would be published within 120 calendar days following the end of the 
month. See Letter from David S. Shillman, Associate Director, 
Division of Trading and Markets, Commission, to Marcia E. Asquith, 
Senior Vice President and Corporate Secretary, FINRA dated November 
30, 2016; see also Securities Exchange Act Release No. 34-79473 
(December 6, 2016), 81 FR 89562 (December 12, 2016) (Notice of 
Filing and Immediate Effectiveness of File No. SR-IEX-2016-17).
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    The Exchange is proposing amendments to Supplementary Material .09 
to IEX Rule 11.340 to delay the date by which Pre-Pilot and Pilot 
Appendix B data is to be made publicly available on the Exchange or 
DEA's Web site from February 28, 2017, until April 28, 2017. Appendix C 
data for the Pre-Pilot Period through the month of January 2017, will 
be published on the Exchange or DEA's Web site on February 28, 2017, 
and, thereafter, on the original 30-day schedule.
    In the SRO Tick Size Plan Proposal, the Participants stated that 
the public data will be made available for free ``on a disaggregated 
basis by trading center'' on the Web sites of the Participants and the 
Designated Examining Authorities.\11\ However, market participants have 
expressed confidentiality concerns regarding this approach for over-
the-counter (``OTC'') data.\12\ Thus, the Exchange is filing the 
instant proposed rule change to provide additional time to assess a 
means of addressing the confidentiality concerns raised in connection 
with the publication of Appendix B data related to OTC activity in 
furtherance of the objectives of the Plan.\13\ Pursuant to this 
amendment, Appendix B data publication will be delayed until April 28, 
2017. The Participants anticipate filing an additional proposed rule 
change in the near future to address the Appendix B data publication.
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    \11\ See Securities Exchange Act Release No. 73511 (November 3, 
2014), 79 FR 66423 (November 7, 2014) (Notice of Filing of Proposed 
National Market System Plan to Implement a Tick Size Pilot Program 
on a One-Year Pilot Basis, File No. 4-657) (``Tick Size Plan 
Proposal'').
    \12\ See letters from Adam C. Cooper, Senior Managing Director 
and Chief Legal Officer, Citadel Securities, to Brent J. Fields, 
Secretary, Commission, dated December 21, 2016 (``Citadel letter''); 
and William Hebert, Managing Director, Financial Information Forum, 
to Robert W. Errett, Deputy Secretary, Commission, dated December 
21, 2016 (``FIF letter'').
    \13\ FINRA, on behalf of the Exchange, also is submitting an 
exemptive request with the SEC in connection with the instant 
filing.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \14\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \15\ in particular, in that it is designed to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the

[[Page 14055]]

mechanism of a free and open market and a national market system and, 
in general, to protect investors and the public interest.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
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    The Plan is designed to allow the Commission, market participants, 
and the public to study and assess the impact of increment conventions 
on the liquidity and trading of the common stock of small-
capitalization companies. The Exchange believes that this proposal is 
consistent with the Act because it is in furtherance of the objectives 
of Section VII(A) of the Plan in that it is designed to provide the 
Exchange with additional time to assess a means of addressing the 
confidentiality concerns raised in connection with the publication of 
Appendix B data, to comply with the Plan's requirements that the data 
made publicly available will not identify the trading center that 
generated the data.

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 
notes that the proposed rule change implements the provisions of the 
Plan.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \16\ and Rule 19b-
4(f)(6) thereunder.\17\
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has filed 
the proposed rule change for immediate effectiveness and has requested 
that the Commission waive the requirement that the proposed rule change 
not become operative for 30 days after the date of the filing so that 
it may become operative on February 28, 2017.
    The Exchange notes that the proposed rule change is intended to 
address confidentiality concerns raised in connection with the 
publication of OTC Appendix B data by permitting the Exchange to delay 
Web site publication of its Appendix B data from February 28, 2017 to 
April 28, 2017.\18\ The Exchange notes that the delay would provide 
additional time to assess a means of addressing the confidentiality 
concerns. The Exchange notes that it expects Participants to file 
proposed rule changes related to publishing Appendix B data.
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    \18\ See supra note 12. The Commission notes that FINRA has 
submitted a proposed rule change to delay the publication of OTC 
Appendix B data. See SR-FINRA-2017-005.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to delay publication of its Appendix 
B data until April 28, 2017. As noted above, commenters continue to 
raise concerns about the publication of OTC Appendix B data.\19\ 
Delaying publication of Exchange's Appendix B data \20\ will prevent 
the publication of partial (i.e., Exchange-only) Appendix B data 
required under the Plan. Therefore, the Commission hereby waives the 
30-day operative delay and designates the proposed rule change to be 
operative on February 28, 2017.\21\
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    \19\ The Commission notes that FINRA has filed a proposed rule 
change that is intended to mitigate confidentiality concerns raised 
by commenters regarding the publication of OTC Appendix B data. See 
SR-FINRA-2017-006.
    \20\ The Commission notes that other Participants have proposed 
to delay the publication of their Appendix B data until April 28, 
2017. See SR-BatsBYX-2017-05; SR-BatsBZX-2017-15; SR-BatsEDGA-2017-
05; SR-BatsEDGX-2017-13; SR-BX-2017-016; SR-CHX-2017-05; SR-FINRA-
2017-005; SR-NASDAQ-2017-024; SR-Phlx-2017-22; SR-NYSE-2017-10; SR-
NYSEArca-2017-19; SR-NYSEMKT-2017-11.
    \21\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-IEX-2017-07 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-IEX-2017-07. This file 
number should be included in 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 Section, 100 F Street 
NE., Washington, DC 20549-1090. Copies of the filing will also be 
available for inspection and copying at the IEX's principal office and 
on its Internet Web site at www.iextrading.com. 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-IEX-2017-07 and should be submitted on 
or before April 6, 2017.


[[Page 14056]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05225 Filed 3-15-17; 8:45 am]
 BILLING CODE 8011-01-P