82 FR 18519 - Joint Industry Plan; Order Approving the Thirteenth Amendment to the National Market System Plan To Address Extraordinary Market Volatility by Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Chicago Stock Exchange, Inc., Financial Industry Regulatory Authority, Inc., Investors Exchange LLC, NASDAQ BX, Inc., NASDAQ PHLX LLC, The Nasdaq Stock Market LLC, NYSE National, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 74 (April 19, 2017)

[Federal Register Volume 82, Number 74 (Wednesday, April 19, 2017)]
[Notices]
[Pages 18519-18520]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-07878]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80455; File No. 4-631]


Joint Industry Plan; Order Approving the Thirteenth Amendment to 
the National Market System Plan To Address Extraordinary Market 
Volatility by Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., Bats 
EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Chicago Stock Exchange, 
Inc., Financial Industry Regulatory Authority, Inc., Investors Exchange 
LLC, NASDAQ BX, Inc., NASDAQ PHLX LLC, The Nasdaq Stock Market LLC, 
NYSE National, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and 
NYSE Arca, Inc.

April 13, 2017.

I. Introduction

    On February 13, 2017, NYSE Group, Inc., on behalf of the other 
parties \1\ to the National Market System Plan to Address Extraordinary 
Market Volatility (the ``Plan''), filed with the Securities and 
Exchange Commission (``Commission'') pursuant to Section 11A of the 
Securities Exchange Act of 1934 (``Act'') \2\ and Rule 608 
thereunder,\3\ a proposal to amend the Plan.\4\ The proposal represents 
the thirteenth amendment to the Plan, and reflects proposed changes 
unanimously approved by the Participants (``Thirteenth Amendment''). 
The proposed Thirteenth Amendment was published for comment in the 
Federal Register on March 16, 2017.\5\ The Commission received no 
comment letters regarding the amendment. This order approves the 
Thirteenth Amendment to the Plan as proposed.
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    \1\ Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., Bats EDGA 
Exchange, Inc., Bats EDGX Exchange, Inc., Chicago Stock Exchange, 
Inc., the Financial Industry Regulatory Authority, Inc., Investors 
Exchange LLC, NASDAQ BX, Inc., NASDAQ PHLX LLC, The NASDAQ Stock 
Market LLC, New York Stock Exchange LLC (``NYSE''), NYSE Arca, Inc., 
NYSE MKT LLC, and NYSE National Inc. (collectively, the 
``Participants'').
    \2\ 15 U.S.C. 78k-1.
    \3\ 17 CFR 242.608.
    \4\ See Letter from Elizabeth King, General Counsel, NYSE, to 
Brent J. Fields, Secretary, Commission, dated February 10, 2017 
(``Transmittal Letter'').
    \5\ See Securities Exchange Act Release No. 80203 (March 10, 
2017), 82 FR 14068.
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II. Description of the Proposal

    In the Thirteenth Amendment, the Participants propose to (1) extend 
the pilot period of the Plan from April 21, 2017 to April 16, 2018; (2) 
require the Processor to publish, in connection with a reopening after 
a Trading Pause, the auction reference price, auction collars,

[[Page 18520]]

and number of extensions to the reopening auction, as provided by the 
Primary Listing Exchange; and (3) amend the Plan to reflect name 
changes of certain Participants.\6\
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    \6\ Unless otherwise specified, the terms used herein have the 
same meaning as set forth in the Plan.
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III. Discussion and Commission Findings

    The Commission finds that the Thirteenth Amendment is consistent 
with the requirements of the Act and the rules and regulations 
thereunder. Specifically, the Commission finds that the Thirteenth 
Amendment is consistent with Section 11A of the Act \7\ and Rule 608 
thereunder \8\ in that it is appropriate in the public interest, for 
the protection of investors and the maintenance of fair and orderly 
markets, and that it removes impediments to, and perfects the mechanism 
of, a national market system.
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    \7\ 15 U.S.C. 78k-1.
    \8\ 17 CFR 242.608.
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    The Participants propose to extend the pilot period for an 
additional year to April 16, 2018. As the Participants note, the 
planned implementation date for the twelfth amendment to the Plan 
(``Twelfth Amendment'') \9\ and the related Primary Listing Exchanges' 
amended reopening procedures is scheduled to be during the third 
quarter of 2017, which is after the end date of the current pilot 
period. In addition, the Participants state that an extension of the 
pilot period would provide additional time for the Participants, the 
Commission, and the public to consider other potential modifications to 
the Plan that are currently under consideration, including changes to 
how NMS Stocks are tiered under the Plan and the applicable percentage 
parameters associated with such tiers, whether double-wide Price Bands 
at the open and close of trading should be eliminated, and 
recommendations made by the Equity Market Structure Advisory Committee 
with respect to Plan operations.\10\ Finally, the Commission 
understands that the Participants continue to review and analyze the 
harmonization of clearly erroneous execution rules with the Plan, such 
that these rules could not be used to break trades occurring within 
Price Bands absent a legitimate technical failure at a Self-Regulatory 
Organization.\11\
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    \9\ See Securities Exchange Act Release No. 79845 (January 19, 
2017), 82 FR 8551 (January 26, 2017) (order approving the Twelfth 
Amendment).
    \10\ See U.S. Securities and Exchange Commission Equity Market 
Structure Advisory Committee, Recommendations for Rulemaking on 
Issues of Market Quality, dated November 29, 2016, available at 
https://www.sec.gov/spotlight/emsac/emsac-recommendations-rulemaking-market-quality.pdf.
    \11\ See Securities Exchange Act Release No. 77679 (April 21, 
2016), 81 FR 24908, 24909 (April 27, 2016) (order approving the 
Tenth Amendment).
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    The Commission believes that a one-year extension of the Plan will 
allow the Participants to implement and assess the changes the Plan 
under the Twelfth Amendment. In addition, the extension of the pilot 
period will provide Participants with additional time to continue their 
examination and analysis of the matters described above. Accordingly, 
the Commission believes that it is appropriate in the public interest, 
for the protection of investors and the maintenance of a fair and 
orderly market to approve the amendment to extend the pilot period 
until April 16, 2018.
    The Participants also propose to amend Section VII(B)(1) of the 
Plan to specify that the Processor would publish certain information 
that the Primary Listing Exchange would provide to the Processor in 
connection with reopening an NMS Stock after a Trading Pause. 
Specifically, the Processor will publish the auction reference price; 
auction collars; and number of extensions to the reopening auction. 
This information will provide greater transparency regarding whether an 
NMS Stock will reopen at the end of the scheduled Trading Pause, or if 
such Trading Pause has been extended beyond the five-minute period 
contemplated in the Plan. The Commission believes that it is 
appropriate in the public interest, for the protection of investors and 
the maintenance of a fair and orderly market to approve this proposed 
change because it should enhance transparency about the reopening 
processes during a Trading Pause.
    Finally, the Participants propose to amend the Plan to reflect name 
changes of certain Participants. The Commission believes that it is 
appropriate in the public interest, for the protection of investors and 
the maintenance of a fair and orderly market to approve this proposed 
change because it ensures that the Plan remains accurate and up-to-
date.
    For the reasons noted above, the Commission finds that the 
Thirteenth Amendment to the Plan is consistent with Section 11A of the 
Act \12\ and Rule 608 thereunder.\13\ The Commission reiterates its 
expectation that the Participants will continue to monitor the scope 
and operation of the Plan and study the data produced, and will propose 
any modifications to the Plan that may be necessary or appropriate.\14\
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    \12\ 15 U.S.C. 78k-1.
    \13\ 17 CFR 242.608.
    \14\ See Securities Exchange Act Release No. 67091 (May 31, 
2012), 77 FR 33498 (June 6, 2012).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act \15\ 
and Rule 608 thereunder,\16\ that the Thirteenth Amendment to the Plan 
(File No. 4-631) be, and it hereby is, approved.
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    \15\ 15 U.S.C. 78k-1.
    \16\ 17 CFR 242.608.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(29).
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Brent J. Fields,
Secretary.
[FR Doc. 2017-07878 Filed 4-18-17; 8:45 am]
 BILLING CODE 8011-01-P