82 FR 14263 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 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 51 (March 17, 2017)

Page Range		14263-14265
FR Document		2017-05342
Federal Register, Volume 82 Issue 51 (Friday, March 17, 2017)
[Federal Register Volume 82, Number 51 (Friday, March 17, 2017)]
[Notices]
[Pages 14263-14265]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-05342]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80227; File No. SR-CHX-2017-05]


Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
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 13, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on February 28, 2017, the Chicago Stock Exchange, Inc. (``CHX'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 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

    CHX proposes to amend Article 20, Rule 13(b) of the Rules of the 
Exchange (``CHX Rules'') 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 text of this proposed rule change is available on the 
Exchange's Web site at (www.chx.com) and in 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 CHX included statements 
concerning the purpose of and basis for the proposed rule changes 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 CHX 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
    Article 20, Rule 13(b) (Compliance with Data Collection 
Requirements) \3\ implements the data collection and Web site 
publication requirements of the Plan.\4\ Paragraph .08 of Article 20, 
Rule 13(b) provides, among other things, that the requirement that the 
Exchange make certain data publicly available on the Exchange or 
Designated Examining Authority's (``DEA's'') Web site pursuant to 
Appendix B and C to the Plan shall commence at the beginning of the 
Pilot Period,\5\ and that the Exchange shall make data for the Pre-
Pilot Period publicly available on the Exchange Web site pursuant to 
Appendix B to the Plan by February 28, 2017.\6\
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    \3\ See Securities Exchange Act Release No. 79538 (December 13, 
2016), 81 FR 91979 (December 19, 2016) (SR-CHX-2016-21); see also 
Securities Exchange Act Release No. 77469 (March 29, 2016), 81 FR 
19275 (April 4, 2016) (SR-CHX-2016-02).
    \4\ The Plan 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).
    \5\ Unless otherwise defined herein, capitalized terms have the 
meaning ascribed to them in CHX Article 20, Rule 13.
    \6\ On November 30, 2016, the SEC granted exemptive relief to 
the Plan Participants 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 SR-
CHX-2016-21, supra note 3.
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    The Exchange is proposing amendments to paragraph .08 of Article 
20, Rule 13(b) to delay the date by which Pre-Pilot and Pilot Appendix 
B data is to be made publicly available on the Exchange's Web site from 
February 28, 2017, until April 28, 2017.\7\
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    \7\ In addition, the Exchange is proposing an amendment to CHX 
Article 20, Rule 13(a)(6)(B) to clarify that no CHX Participant, 
irrespective of whether that member operates a trading center, may 
execute orders in any Pilot Security in Test Group Three in price 
increments other than $0.05, unless an exception applies. This 
proposed amendment makes the rule consistent with the Plan and 
conforms subparagraph (a)(6)(B) with subparagraph (a)(5)(B).
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    In the SRO Tick Size Plan Proposal, the Plan Participants stated 
that the public data will be made available for free ``on a 
disaggregated basis by trading

[[Page 14264]]

center'' on the Web sites of the Plan Participants and the Designated 
Examining Authorities.\8\ However, market participants have expressed 
confidentiality concerns regarding this approach for over-the-counter 
(``OTC'') data.\9\ 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.\10\ Pursuant to this amendment, Appendix B data 
publication will be delayed until April 28, 2017. The Plan Participants 
anticipate filing an additional proposed rule change in the near future 
to address Appendix B data publication.
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    \8\ 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'').
    \9\ 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'').
    \10\ The Exchange also is submitting an exemptive request to the 
SEC in connection with the instant filing.
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    The Exchange has filed the proposed rule change for immediate 
effectiveness. The operative date of the proposed rule change will be 
the date of filing.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \12\ 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 mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest; and are not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 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

    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) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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.\15\ 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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    \15\ See supra note 9. 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.\16\ 
Delaying publication of Exchange's Appendix B data \17\ 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.\18\
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    \16\ 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.
    \17\ 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-FINRA-2017-005; SR-IEX-
2017-07; SR-NASDAQ-2017-024; SR-Phlx-2017-22; SR-NYSE-2017-10; SR-
NYSEArca-2017-19; SR-NYSEMKT-2017-11.
    \18\ 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:

[[Page 14265]]

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-CHX-2017-05 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-CHX-2017-05. 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 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-CHX-2017-05, and should be 
submitted on or before April 7, 2017.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-05342 Filed 3-16-17; 8:45 am]
 BILLING CODE 8011-01-P
14264 Federal Register / Vol. 82, No. 51 / Friday, March 17, 2017 / Notices

center’’ on the Web sites of the Plan in that it is designed to provide the 28, 2017 to April 28, 2017.15 The
Participants and the Designated Exchange with additional time to assess Exchange notes that the delay would
Examining Authorities.8 However, a means of addressing the provide additional time to assess a
market participants have expressed confidentiality concerns raised in means of addressing the confidentiality
confidentiality concerns regarding this connection with the publication of concerns. The Exchange notes that it
approach for over-the-counter (‘‘OTC’’) Appendix B data, to comply with the expects Participants to file proposed
data.9 Thus, the Exchange is filing the Plan’s requirements that the data made rule changes related to publishing
instant proposed rule change to provide publicly available will not identify the Appendix B data.
additional time to assess a means of trading center that generated the data. The Commission believes that
addressing the confidentiality concerns waiving the 30-day operative delay is
raised in connection with the B. Self-Regulatory Organization’s
Statement on Burden on Competition consistent with the protection of
publication of Appendix B data related investors and the public interest
to OTC activity in furtherance of the The Exchange does not believe that because it will allow the Exchange to
objectives of the Plan.10 Pursuant to this the proposed rule change will result in delay publication of its Appendix B data
amendment, Appendix B data any burden on competition that is not until April 28, 2017. As noted above,
publication will be delayed until April necessary or appropriate in furtherance commenters continue to raise concerns
28, 2017. The Plan Participants of the purposes of the Act. The about the publication of OTC Appendix
anticipate filing an additional proposed Exchange notes that the proposed rule B data.16 Delaying publication of
rule change in the near future to address change implements the provisions of the Exchange’s Appendix B data 17 will
Appendix B data publication. Plan. prevent the publication of partial (i.e.,
The Exchange has filed the proposed Exchange-only) Appendix B data
rule change for immediate effectiveness. C. Self-Regulatory Organization’s
Statement on Comments on the required under the Plan. Therefore, the
The operative date of the proposed rule Commission hereby waives the 30-day
change will be the date of filing. Proposed Rule Change Received From
Members, Participants, or Others operative delay and designates the
2. Statutory Basis proposed rule change to be operative on
No written comments were either February 28, 2017.18
The Exchange believes that its
solicited or received. At any time within 60 days of the
proposal is consistent with Section 6(b)
of the Act 11 in general, and furthers the III. Date of Effectiveness of the filing of the proposed rule change, the
objectives of Section 6(b)(5) of the Act 12 Proposed Rule Change and Timing for Commission summarily may
in particular, in that it is designed to Commission Action temporarily suspend such rule change if
promote just and equitable principles of it appears to the Commission that such
Because the foregoing proposed rule action is necessary or appropriate in the
trade, to foster cooperation and
change does not: (i) Significantly affect public interest, for the protection of
coordination with persons engaged in
the protection of investors or the public investors, or otherwise in furtherance of
facilitating transactions in securities, to
interest; (ii) impose any significant the purposes of the Act. If the
remove impediments to and perfect the
burden on competition; and (iii) become Commission takes such action, the
mechanism of a free and open market
operative for 30 days from the date on Commission shall institute proceedings
and a national market system and, in
which it was filed, or such shorter time to determine whether the proposed rule
general, to protect investors and the
as the Commission may designate, it has should be approved or disapproved.
public interest; and are not designed to
become effective pursuant to Section
permit unfair discrimination between IV. Solicitation of Comments
19(b)(3)(A) of the Act 13 and Rule 19b–
customers, issuers, brokers, or dealers.
The Plan is designed to allow the 4(f)(6) thereunder.14 Interested persons are invited to
Commission, market participants, and A proposed rule change filed under submit written data, views, and
the public to study and assess the Rule 19b–4(f)(6) normally does not arguments concerning the foregoing,
impact of increment conventions on the become operative prior to 30 days after including whether the proposed rule
liquidity and trading of the common the date of the filing. However, pursuant change is consistent with the Act.
stock of small-capitalization companies. to Rule 19b–4(f)(6)(iii), the Commission Comments may be submitted by any of
The Exchange believes that this may designate a shorter time if such the following methods:
proposal is consistent with the Act action is consistent with the protection
because it is in furtherance of the of investors and the public interest. The 15 See supra note 9. The Commission notes that

objectives of Section VII(A) of the Plan Exchange has filed the proposed rule FINRA has submitted a proposed rule change to
change for immediate effectiveness and delay the publication of OTC Appendix B data. See
SR–FINRA–2017–005.
8 See Securities Exchange Act Release No. 73511 has requested that the Commission 16 The Commission notes that FINRA has filed a
(November 3, 2014), 79 FR 66423 (November 7, waive the requirement that the proposed proposed rule change that is intended to mitigate
2014) (Notice of Filing of Proposed National Market rule change not become operative for 30 confidentiality concerns raised by commenters
System Plan to Implement a Tick Size Pilot Program days after the date of the filing so that regarding the publication of OTC Appendix B data.
on a One-Year Pilot Basis, File No. 4–657) (‘‘Tick See SR–FINRA–2017–006.
Size Plan Proposal’’). it may become operative on February 17 The Commission notes that other Participants
9 See letters from Adam C. Cooper, Senior 28, 2017. have proposed to delay the publication of their
Managing Director and Chief Legal Officer, Citadel The Exchange notes that the proposed Appendix B data until April 28, 2017. See SR–
Securities, to Brent J. Fields, Secretary, rule change is intended to address BatsBYX–2017–05; SR–BatsBZX–2017–15; SR–
asabaliauskas on DSK3SPTVN1PROD with NOTICES

Commission, dated December 21, 2016 (‘‘Citadel BatsEDGA–2017–05; SR–BatsEDGX–2017–13; SR–
letter’’); and William Hebert, Managing Director, confidentiality concerns raised in
BX–2017–016; SR–FINRA–2017–005; SR–IEX–
Financial Information Forum, to Robert W. Errett, connection with the publication of OTC 2017–07; SR–NASDAQ–2017–024; SR–Phlx–2017–
Deputy Secretary, Commission, dated December 21, Appendix B data by permitting the 22; SR–NYSE–2017–10; SR–NYSEArca–2017–19;
2016 (‘‘FIF letter’’). Exchange to delay Web site publication SR–NYSEMKT–2017–11.
10 The Exchange also is submitting an exemptive 18 For purposes only of waiving the operative
request to the SEC in connection with the instant
of its Appendix B data from February
delay for this proposal, the Commission has
filing. considered the proposed rule’s impact on
11 15 U.S.C. 78f(b). 13 15 U.S.C. 78s(b)(3)(A). efficiency, competition, and capital formation. See
12 15 U.S.C. 78f(b)(5). 14 17 CFR 240.19b–4(f)(6). 15 U.S.C. 78c(f).

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Document Created: 2017-03-17 02:49:06
Document Modified: 2017-03-17 02:49:06
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		82 FR 14263