82 FR 25358 - Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing of Proposed Rule Change To Eliminate Requirements That Will Be Duplicative of CAT
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 104 (June 1, 2017)
Federal Register Volume 82, Issue 104 (June 1, 2017)
| Page Range | 25358-25362 | |
| FR Document | 2017-11371 |
[Federal Register Volume 82, Number 104 (Thursday, June 1, 2017)] [Notices] [Pages 25358-25362] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-11371] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80795; File No. SR-BatsEDGX-2017-23] Self-Regulatory Organizations; Bats EDGX Exchange, Inc.; Notice of Filing of Proposed Rule Change To Eliminate Requirements That Will Be Duplicative of CAT May 26, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on May 15, 2017, Bats EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') filed with the Securities and Exchange Commission (``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 filed a proposal to modify requirements for the collection of information that is duplicative of information intended to be collected for the consolidated audit trail (``CAT'') adopted pursuant to the National Market System Plan Governing the Consolidated Audit Trail (the ``CAT NMS Plan'' or ``Plan'').\3\ The Exchange will announce the implementation date of the proposed rule change and effective date of the retirement of any related systems by Regulatory Circular that will be published once the options exchanges determine the thresholds for accuracy and reliability described below have been met and that the Plan Processor for CAT is sufficiently meeting all of its obligations under the CAT NMS Plan. --------------------------------------------------------------------------- \3\ Unless otherwise specified, capitalized terms used in this rule filing are defined as set forth herein, or in the CAT Compliance Rule Series or in the CAT NMS Plan. --------------------------------------------------------------------------- The text of the proposed rule change is available at the Exchange's Web site at www.bats.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 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 parts of such statements. (A) Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Bats BYX Exchange, Inc., Bats BZX Exchange, Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., BOX Options Exchange LLC, C2 Options Exchange, Incorporated, Chicago Board Options Exchange, Incorporated, Chicago Stock Exchange, Inc., Financial Industry Regulatory Authority, Inc. (``FINRA''), Investors' Exchange LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, NASDAQ BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC,\4\ NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE MKT LLC, NYSE Arca, Inc. and NYSE National, Inc.\5\ (collectively, the ``Participants'') filed with the Commission, pursuant to Section 11A of the Exchange Act \6\ and [[Page 25359]] Rule 608 of Regulation NMS thereunder,\7\ the CAT NMS Plan.\8\ The Participants filed the Plan to comply with Rule 613 of Regulation NMS under the Exchange Act. The Plan was published for comment in the Federal Register on May 17, 2016,\9\ and approved by the Commission, as modified, on November 15, 2016.\10\ The Plan is designed to create, implement and maintain a CAT that would capture customer and order event information for orders in NMS Securities and OTC Equity Securities, across all markets, from the time of order inception through routing, cancellation, modification, or execution in a single consolidated data source. Pursuant to Appendix C of the CAT NMS Plan, each Participant is required to conduct analyses of which of its existing trade and order data rules and systems require the collection of information that is duplicative of information collected for the CAT.\11\ In addition, among other things, Section C.9 of Appendix C to the Plan, as modified by the Commission, requires each Participant to ``file with the SEC the relevant rule change filing to eliminate or modify its duplicative rules within six (6) months of the SEC's approval of the CAT NMS Plan.'' \12\ The Plan notes that ``the elimination of such rules and the retirement of such systems [will] be effective at such time as CAT Data meets minimum standards of accuracy and reliability.'' \13\ --------------------------------------------------------------------------- \4\ ISE Gemini, LLC, ISE Mercury, LLC and International Securities Exchange, LLC have been renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, and Nasdaq ISE, LLC, respectively. See Securities Exchange Act Rel. No. 80248 (Mar. 15, 2017), 82 FR 14547 (Mar. 21, 2017); Securities Exchange Act Rel. No. 80326 (Mar. 29, 2017), 82 FR 16460 (Apr. 4, 2017); and Securities Exchange Act Rel. No. 80325 (Mar. 29, 2017), 82 FR 16445 (Apr. 4, 2017). \5\ National Stock Exchange, Inc. has been renamed NYSE National, Inc. See Securities Exchange Act Rel. No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb. 3, 2017). \6\ 15 U.S.C. 78k-1. \7\ 17 CFR 242.608. \8\ See Letter from the Participants to Brent J. Fields, Secretary, Commission, dated September 30, 2014; and Letter from Participants to Brent J. Fields, Secretary, Commission, dated February 27, 2015. On December 24, 2015, the Participants submitted an amendment to the CAT NMS Plan. See Letter from Participants to Brent J. Fields, Secretary, Commission, dated December 23, 2015. \9\ Securities Exchange Act Rel. No. 77724 (Apr. 27, 2016), 81 FR 30614 (May 17, 2016). \10\ Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016), 81 FR 84696 (Nov. 23, 2016) (``Approval Order''). \11\ Appendix C of CAT NMS Plan, Approval Order at 85010. \12\ Id. \13\ Id. --------------------------------------------------------------------------- After conducting its analysis of its rules in accordance with the CAT NMS Plan, the Exchange determined Rules 22.7 and 24.4 require the reporting of information intended to be collected by the CAT. Therefore, the Exchange believes those provisions will no longer be necessary once the CAT is operational and proposes to modify those Rules as described below. Additionally, the Exchange describes below additional reporting requirements that it may reduce for which no rule changes are necessary. These changes will be implemented in accordance with the timeline described below. Initially, the Exchange notes that options exchanges, including the Exchange, utilize consolidated options audit trail system (``COATS'') to collect and review data regarding options orders, quotes and transactions. The Participants have provided COATS technical specifications to the Plan Processor for the CAT for use in developing the Technical Specifications for the CAT, and the Participants are working with the Plan Processor to include the necessary COATS data elements in the CAT Technical Specifications. Accordingly, although the Technical Specifications for the CAT have not yet been finalized, the Exchange and the other options exchanges propose to eliminate COATS in accordance with the proposed timeline discussed below. The Exchange notes that it does not have any specific rules or requirements related to COATS but refers to its retirement below in an effort to provide transparency. (1) Market Maker Equity Order Reports Rule 22.7(b) requires Market Makers, upon request and in the prescribed form, report to the Exchange every order entered by the Market Maker for the purchase or sale of (1) a security underlying options traded on the Exchange, or (2) a security convertible into or exchangeable for such underlying security, as well as opening and closing positions in all such securities held in each account reported pursuant to Rule 22.7(a). The report pertaining to orders must include the terms of each order, identification of the brokerage firms through which the orders were entered, the times of entry or cancellation, the times report of execution were received and, if all or part of the order was executed, the quantity and execution price. CAT will require Market Makers to report order information for such securities. Therefore, this rule provision as it relates to order reports is duplicative of CAT requirements, and the Exchange proposes to delete it. CAT does not require reporting of positions, so the Exchange will maintain the position reporting requirement in Rule 22.7(b). The Exchange also proposes a conforming change to the rule name and Interpretation and Policy .01. (2) EBS Rule 24.4 is the Exchange's rule regarding the automated submission of specific trading data to the Exchange upon request using the Electronic Blue Sheet (``EBS'') system. Rule 24.4 requires an Options Member \14\ to submit requested trade data elements in such automated format as may be prescribed by the Exchange from time to time, in regard to a transaction(s) that is the subject of the particular request for information. The Rule sets forth in paragraphs (b) and (c) the data elements required if the transaction was a proprietary transaction or if it was effected for a customer account, respectively. Paragraph (d) provides an Options Member must submit such other information as may from time to time be required. Paragraph (e) permits the Exchange to grant exceptions from these requirements in such cases and for such time periods as it deems appropriate. --------------------------------------------------------------------------- \14\ An Options Member is a Member of the Exchange that is registered to participate in options trading on EDGX Options. See Rule 16.1(a)(38). A Member is a registered broker or dealer that has been admitted to membership in the Exchange. See Rule 1.5(n). --------------------------------------------------------------------------- The Exchange proposes to amend Rule 24.4 to state it will request information under the Rule only if the information is not available in the CAT because, for example, the transaction(s) in question occurred before the firm was reporting information to the CAT or involved securities that are not reportable to the CAT. In essence, under the proposed rule change, the Exchange will make requests under Rule 24.4 if and only if the information is not otherwise available through the CAT. Once broker-dealer reporting to the CAT has begun, the CAT will contain the data the Participants would otherwise have requested via the EBS system for purposes of NMS Securities and OTC Equity Securities. Consequently, the Exchange will not need to use the EBS system or request information pursuant to Rule 24.4 for NMS Securities or OTC Equity Securities for time periods after CAT reporting has begun if the appropriate accuracy and reliability thresholds are achieved, including an acceptable accuracy rate for customer and account information. However, Rule 24.4 cannot be completely eliminated immediately upon the CAT achieving the appropriate thresholds because Exchange staff may still need to request information pursuant to Rule 24.4 for trading activity occurring before a member was reporting to the CAT.\15\ In addition, Rule 24.4 applies to information regarding transactions involving securities that [[Page 25360]] will not be reportable to the CAT, such as fixed-income securities; thus, the rule must remain in effect with respect to those transactions indefinitely or until those transactions are captured in the CAT. --------------------------------------------------------------------------- \15\ Firms are required to maintain the trade information for pre-CAT transactions in equities and options pursuant to applicable rules, such as books and records retention requirements, for the relevant time period, which is generally three or six years depending upon the record. See 17 CFR 240.17a-3(a), 240.17a-4. --------------------------------------------------------------------------- (3) Other Reports Various other Exchange Rules require Members to report information to the Exchange upon request.\16\ While the Exchange believes it is necessary to retain these Rules to ensure it has access to the necessary data to perform its regulatory duties and meet its surveillance obligations, it expects it will need to make fewer information requests pursuant to these Rule once Members begin reporting to the CAT and accuracy and reliability standards are met. --------------------------------------------------------------------------- \16\ See, e.g., Rule 4.2 (Furnishing of Records). --------------------------------------------------------------------------- In connection with these Rules requiring Members to report information to the Exchange upon request, Members must currently submit to the Exchange stock transaction information for each Qualified Contingent Cross order executed at the Exchange. CAT will require Members to report stock transaction information. Therefore, the Exchange intends to eliminate this reporting requirement in accordance with the proposed timeline below. (4) Timeline for Elimination of Duplicative Rules The CAT NMS Plan states that the elimination of rules that are duplicative of the requirements of the CAT and the retirement of the related systems should be effective at such time as CAT Data meets minimum standards of accuracy and reliability.\17\ As discussed in more detail below, the Exchange believes the Rule provisions and related systems described above may be retired at a date after all Industry Members are reporting to the CAT when the proposed error rate thresholds have been met, and the Exchange has determined that its usage of the CAT Data has not revealed material issues that have not been corrected, confirmed that the CAT includes all data necessary to allow the Exchange to continue to meet its surveillance obligations, and confirmed that the Plan Processor is sufficiently meeting all of its obligations under the CAT NMS Plan. --------------------------------------------------------------------------- \17\ Id. [sic] --------------------------------------------------------------------------- The Exchange believes the proposed rule changes should not be effective until all Participants and Industry Members that report data pursuant to the Rules described above are reporting comparable data to the CAT. In this way, the Exchange will continue to have access to the necessary data to perform its regulatory duties. The CAT NMS Plan requires that a rule filing to eliminate a duplicative rule address whether ``the availability of certain data from Small Industry Members two years after the Effective Date would facilitate a more expeditious retirement of duplicative systems.'' \18\ The Exchange believes COATS should not be retired until all Participants and Industry Members that report data to COATS are reporting comparable data to the CAT. While the early submission of options data to the CAT by Small Industry Members could expedite the retirement of COATS, the Exchange believes that it premature [sic] to consider such a change and that additional analysis would be necessary to determine whether such early reporting by Small Industry Members would be feasible. --------------------------------------------------------------------------- \18\ Id. --------------------------------------------------------------------------- The CAT NMS Plan requires that this rule filing address ``whether individual Industry Members can be exempted from reporting to duplicative systems once their CAT reporting meets specified accuracy and reliability standards, including, but not limited to, ways in which establishing cross-system regulatory functionality or integrating data from existing systems and the CAT would facilitate such Individual Industry Member exemptions.'' \19\ The Exchange believes that a single cut-over from the reporting requirements described above to CAT is highly preferable to a firm-by-firm approach and is not proposing to exempt members from such reporting requirements on a firm-by-firm basis. The Exchange believes that providing such individual exemptions to Industry Members would be inefficient, more costly, and less reliable than the single cut-over. Providing individual exemptions would require the options exchanges to create, for a brief temporary period, a cross-system regulatory function and to integrate data from reports received pursuant to the above requirements and the CAT to avoid creating any regulatory gaps as a result of such exemptions. Such a function would be costly to create and would give rise to a greater likelihood of data errors or other issues. Given the limited time in which such exemptions would be necessary, the Exchange does not believe that such exemptions would be an appropriate use of limited resources. --------------------------------------------------------------------------- \19\ Id. --------------------------------------------------------------------------- The CAT NMS Plan also requires that a rule filing to eliminate a duplicative rule to provide ``specific accuracy and reliability standards that will determine when duplicative systems will be retired, including, but not limited to, whether the attainment of a certain Error Rate should determine when a system duplicative of the CAT can be retired.'' \20\ The Exchange believes that it is critical that the CAT Data be sufficiently accurate and reliable for the Exchange to perform the regulatory functions that it now performs using the information it receives pursuant to the reporting requirements described above. Accordingly, the Exchange believes that the CAT Data should meet specific quantitative error rates, as well as certain qualitative requirements. --------------------------------------------------------------------------- \20\ Id. --------------------------------------------------------------------------- The Exchange believes (and the other options exchanges with respect to COATS and EBS) believe that, before reporting requirements may be modified or eliminated, as applicable, and related systems may be retired, the CAT would need to achieve a sustained error rate for a period of at least 180 days of 5% or lower measured on a pre-correction or as-submitted basis, and 2% or lower on a post-correction basis (measured at T+5).\21\ The Exchange proposes to measure the 5% pre- correction and 2% post-correction thresholds by averaging the error rate across the period, not require a 5% pre-correction and 2% post- correction maximum each day for 180 consecutive days. The Exchange believes that measuring each of the thresholds over the course of 180 days will ensure that the CAT consistently meets minimum accuracy and reliability thresholds while also ensuring that single-day measurements do not unduly affect the overall measurements. The Exchange proposes to measure the appropriate error rates in the aggregate, rather than firm- by-firm. In addition, with respect to COATS, the Exchange proposes to measure the error rates for options only, not equity securities, as only options are subject to COATS. The 2% and 5% error rates are in line with the proposed retirement threshold for FINRA's Order Audit Trail System (``OATS''). --------------------------------------------------------------------------- \21\ The Plan requires that the Plan Processor must ensure that regulators have access to corrected and linked order and Customer data by 8:00 a.m. Eastern Time on T+5. See CAT NMS Plan, at C-15. --------------------------------------------------------------------------- In addition to these minimum error rates before reporting requirements may be modified or eliminated, as applicable, and related systems may be retired, the Exchange believes that during the minimum 180-day period during which the thresholds are calculated, the Exchange's use of the data in the CAT must confirm that (i) usage over that time period has not [[Page 25361]] revealed material issues that have not been corrected, (ii) the CAT includes all data necessary to allow the Exchange to continue to meet its surveillance obligations, and (iii) the Plan Processor is sufficiently meeting all of its obligations under the CAT NMS Plan. The Exchange believes this time period to use the CAT Data is necessary to reveal any errors that may manifest themselves only after surveillance patterns and other queries have been run and to confirm that the Plan Processor is meeting its obligations and performing its functions adequately. If the Commission approves the proposed rule change, the Exchange will announce the date for modification or elimination, as applicable, of reporting requirements and retirement of related systems and the implementation date of the proposed rule change via Regulatory Circular that will be published once the Exchange (and other options exchanges with respect to COATS and EBS) determines that the thresholds for accuracy and reliability described above have been met and that the Plan Processor is sufficiently meeting all of its obligations under the CAT NMS Plan. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)(5) of the Exchange Act,\22\ which requires, among other things, that Exchange Rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest, and not designed to permit unfair discrimination between customers, issuers, brokers and dealer. The Exchange believes that this proposal is consistent with the Exchange Act because it fulfills the obligation in the CAT NMS Plan for the Exchange to submit a proposed rule change to eliminate or modify duplicative rules. In approving the Plan, the SEC noted that the Plan ``is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.'' \23\ As this proposal implements the Plan, the Exchange believes that this proposal furthers the objectives of the Plan, as identified by the SEC, and is therefore consistent with the Exchange Act. --------------------------------------------------------------------------- \22\ 15 U.S.C. 78f(b)(5). \23\ Approval Order at 84697. --------------------------------------------------------------------------- Moreover, the purpose of the proposed rule change is to amend rules that require the submission of duplicative data to the Exchange. The elimination of such duplicative requirements will reduce unnecessary costs and other compliance burdens for the Exchange and its Members, and therefore, will enhance the efficiency of the securities markets. Furthermore, the Exchange believes that the approach set forth in the proposed rule change strikes the appropriate balance between ensuring that the Exchange is able to continue to fulfill its statutory obligation to protect investors and the public interest by ensuring its surveillance of market activity remains accurate and effective while also establishing a reasonable timeframe for elimination or modification of its rules that will be rendered duplicative after implementation of the CAT. (B) Self-Regulatory Organization's Statement on Burden on Competition Section 6(b)(8) of the Exchange Act \24\ requires that Exchange Rules not impose any burden on competition that is not necessary or appropriate. 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 Exchange Act. The Exchange notes that the proposed rule change implements the requirements of the CAT NMS Plan approved by the Commission regarding the elimination of rules and systems that are duplicative the CAT, and is designed to assist the Exchange in meeting its regulatory obligations pursuant to the Plan. Similarly, all exchanges and FINRA are proposing the elimination of reporting requirements related to COATS and EBS, as well as other duplicative rules, to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive rule filing and, therefore, it does not raise competition issues between and among the self-regulatory organizations and/or their members. --------------------------------------------------------------------------- \24\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- (C) Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Although written comments on the proposed rule change were not solicited, the Exchange received comments from two commenters, the Financial Information Forum (``FIF'') and the Securities Industry and Financial Markets Association (``SIFMA''), regarding the retirement of systems related to the CAT.\25\ In its comment letters, with regard to the retirement of duplicative systems more generally, FIF recommended that the Participants continue the effort to incorporate current reporting obligations into the CAT in order to replace existing reportable systems with the CAT. In addition, FIF further recommended that, once a CAT Reporter achieved satisfactory reporting data quality, the CAT Reporter should be exempt from reporting to any duplicative reporting systems. FIF believed that these recommendations ``would serve both an underlying regulatory objective of more immediate and accurate access to data as well as an industry objective of reduced costs and burdens of regulatory oversight.'' \26\ In its comments about EBS specifically, FIF stated that the retirement of the EBS requirements should be a high priority, and that the CAT should be designed to include the requisite data elements to permit the rapid retirement of EBS.\27\ Similarly, SIFMA stated that ``the establishment of the CAT must be accompanied by the prompt elimination of duplicative systems,'' and ``recommend[ed] that the initial technical specifications be designed to facilitate the immediate retirement of . . . duplicative reporting systems.'' \28\ --------------------------------------------------------------------------- \25\ Letter from William H. Hebert, FIF, to Participants re: Milestone for Participants' rule change filings to eliminate/modify duplicative rules (Apr. 12, 2017) (``FIF Letter''); Letter from William H. Hebert, FIF, to Brent J. Fields, SEC re: Milestone for Participants' rule change filings to eliminate/modify duplicative rules (Apr. 12, 2017); and Letter from Kenneth E. Bentsen, Jr., SIFMA, to Participants re: Selection of Thesys as CAT Processor (Apr. 4, 2017) (``SIFMA Letter'') at 2. \26\ FIF Letter at 2. \27\ FIF Letter at 2. \28\ SIFMA Letter at 2. --------------------------------------------------------------------------- As discussed above, the Exchange agrees with the commenters that the reporting requirements proposed to be modified or eliminated should be replaced by the CAT reporting requirements as soon as accurate and reliable CAT Data is available. To this end, the Exchange anticipates that the CAT will be designed to collect the data necessary to permit the modification or elimination, as applicable, of these reporting requirements and the retirement of related systems. However, as discussed above, the Exchange disagrees with the recommendation to provide individual exemptions to those CAT Reporters who obtain satisfactory data reporting quality. [[Page 25362]] III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: (a) by order approve or disapprove such proposed rule change, or (b) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposal 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-BatsEDGX-2017-23 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-BatsEDGX-2017-23. 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 such filing will also 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-BatsEDGX-2017-23 and should be submitted on or before June 22, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\29\ --------------------------------------------------------------------------- \29\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-11371 Filed 5-31-17; 8:45 am] BILLING CODE 8011-01-P
![25358 Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices
III. Date of Effectiveness of the office of the Exchange. All comments related systems by Regulatory Circular
Proposed Rule Change and Timing for received will be posted without change; that will be published once the options
Commission Action the Commission does not edit personal exchanges determine the thresholds for
Within 45 days of the date of identifying information from accuracy and reliability described below
publication of this notice in the Federal submissions. You should submit only have been met and that the Plan
Register or within such longer period (i) information that you wish to make Processor for CAT is sufficiently
as the Commission may designate up to available publicly. All submissions meeting all of its obligations under the
90 days of such date if it finds such should refer to File Number SR–MIAX– CAT NMS Plan.
2017–19 and should be submitted on or The text of the proposed rule change
longer period to be appropriate and
before June 22, 2017. is available at the Exchange’s Web site
publishes its reasons for so finding or
at www.bats.com, at the principal office
(ii) as to which the Exchange consents, For the Commission, by the Division of
Trading and Markets, pursuant to delegated of the Exchange, and at the
the Commission shall: (a) By order Commission’s Public Reference Room.
approve or disapprove such proposed authority.61
rule change, or (b) institute proceedings Eduardo A. Aleman, II. Self-Regulatory Organization’s
to determine whether the proposed rule Assistant Secretary. Statement of the Purpose of, and
change should be disapproved. [FR Doc. 2017–11251 Filed 5–31–17; 8:45 am] Statutory Basis for, the Proposed Rule
BILLING CODE 8011–01–P Change
IV. Solicitation of Comments
In its filing with the Commission, the
Interested persons are invited to Exchange included statements
submit written data, views, and SECURITIES AND EXCHANGE concerning the purpose of and basis for
arguments concerning the foregoing, COMMISSION the proposed rule change and discussed
including whether the proposed rule any comments it received on the
[Release No. 34–80795; File No. SR–
change is consistent with the Act. proposed rule change. The text of these
BatsEDGX–2017–23]
Comments may be submitted by any of statements may be examined at the
the following methods: Self-Regulatory Organizations; Bats places specified in Item IV below. The
Electronic Comments EDGX Exchange, Inc.; Notice of Filing Exchange has prepared summaries, set
of Proposed Rule Change To Eliminate forth in Sections A, B, and C below, of
• Use the Commission’s Internet Requirements That Will Be Duplicative the most significant parts of such
comment form (http://www.sec.gov/ of CAT statements.
rules/sro.shtml); or
• Send an email to rule-comments@ May 26, 2017. (A) Self-Regulatory Organization’s
sec.gov. Please include File Number SR– Pursuant to Section 19(b)(1) of the Statement of the Purpose of, and
MIAX–2017–19 on the subject line. Securities Exchange Act of 1934 (the Statutory Basis for, the Proposed Rule
‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Change
Paper Comments
notice is hereby given that on May 15, 1. Purpose
• Send paper comments in triplicate 2017, Bats EDGX Exchange, Inc. (the
to Secretary, Securities and Exchange Bats BYX Exchange, Inc., Bats BZX
‘‘Exchange’’ or ‘‘EDGX’’) filed with the
Commission, 100 F Street NE., Exchange, Inc., Bats EDGA Exchange,
Securities and Exchange Commission Inc., Bats EDGX Exchange, Inc., BOX
Washington, DC 20549–1090. (‘‘Commission’’) the proposed rule Options Exchange LLC, C2 Options
All submissions should refer to File change as described in Items I, II, and Exchange, Incorporated, Chicago Board
Number SR–MIAX–2017–19. This file III below, which Items have been Options Exchange, Incorporated,
number should be included on the prepared by the Exchange. The Chicago Stock Exchange, Inc., Financial
subject line if email is used. To help the Commission is publishing this notice to Industry Regulatory Authority, Inc.
Commission process and review your solicit comments on the proposed rule (‘‘FINRA’’), Investors’ Exchange LLC,
comments more efficiently, please use change from interested persons. Miami International Securities
only one method. The Commission will
I. Self-Regulatory Organization’s Exchange, LLC, MIAX PEARL, LLC,
post all comments on the Commission’s
Statement of the Terms of Substance of NASDAQ BX, Inc., Nasdaq GEMX, LLC,
Internet Web site (http://www.sec.gov/
the Proposed Rule Change Nasdaq ISE, LLC, Nasdaq MRX, LLC,4
rules/sro.shtml). Copies of the
NASDAQ PHLX LLC, The NASDAQ
submission, all subsequent The Exchange filed a proposal to
Stock Market LLC, New York Stock
amendments, all written statements modify requirements for the collection
Exchange LLC, NYSE MKT LLC, NYSE
with respect to the proposed rule of information that is duplicative of
Arca, Inc. and NYSE National, Inc.5
change that are filed with the information intended to be collected for
(collectively, the ‘‘Participants’’) filed
Commission, and all written the consolidated audit trail (‘‘CAT’’)
with the Commission, pursuant to
communications relating to the adopted pursuant to the National
Section 11A of the Exchange Act 6 and
proposed rule change between the Market System Plan Governing the
Commission and any person, other than Consolidated Audit Trail (the ‘‘CAT 4 ISE Gemini, LLC, ISE Mercury, LLC and
those that may be withheld from the NMS Plan’’ or ‘‘Plan’’).3 The Exchange International Securities Exchange, LLC have been
public in accordance with the will announce the implementation date renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
provisions of 5 U.S.C. 552, will be of the proposed rule change and and Nasdaq ISE, LLC, respectively. See Securities
Exchange Act Rel. No. 80248 (Mar. 15, 2017), 82 FR
available for Web site viewing and effective date of the retirement of any
mstockstill on DSK30JT082PROD with NOTICES
14547 (Mar. 21, 2017); Securities Exchange Act Rel.
printing in the Commission’s Public No. 80326 (Mar. 29, 2017), 82 FR 16460 (Apr. 4,
Reference Room, 100 F Street NE., 61 17 CFR 200.30–3(a)(12). 2017); and Securities Exchange Act Rel. No. 80325
1 15 U.S.C. 78s(b)(1). (Mar. 29, 2017), 82 FR 16445 (Apr. 4, 2017).
Washington, DC 20549, on official
2 17 CFR 240.19b–4. 5 National Stock Exchange, Inc. has been renamed
business days between the hours of 3 Unless otherwise specified, capitalized terms NYSE National, Inc. See Securities Exchange Act
10:00 a.m. and 3:00 p.m. Copies of the used in this rule filing are defined as set forth Rel. No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb. 3,
filing also will be available for herein, or in the CAT Compliance Rule Series or in 2017).
inspection and copying at the principal the CAT NMS Plan. 6 15 U.S.C. 78k–1.
VerDate Sep<11>2014 18:32 May 31, 2017 Jkt 241001 PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 E:\FR\FM\01JNN1.SGM 01JNN1](https://thefederalregister.org/doc/82_FR_25462/page/1.svg)
![Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices 25359
Rule 608 of Regulation NMS Initially, the Exchange notes that requires an Options Member 14 to
thereunder,7 the CAT NMS Plan.8 The options exchanges, including the submit requested trade data elements in
Participants filed the Plan to comply Exchange, utilize consolidated options such automated format as may be
with Rule 613 of Regulation NMS under audit trail system (‘‘COATS’’) to collect prescribed by the Exchange from time to
the Exchange Act. The Plan was and review data regarding options time, in regard to a transaction(s) that is
published for comment in the Federal orders, quotes and transactions. The the subject of the particular request for
Register on May 17, 2016,9 and Participants have provided COATS information. The Rule sets forth in
approved by the Commission, as technical specifications to the Plan paragraphs (b) and (c) the data elements
modified, on November 15, 2016.10 The Processor for the CAT for use in required if the transaction was a
Plan is designed to create, implement developing the Technical Specifications proprietary transaction or if it was
and maintain a CAT that would capture for the CAT, and the Participants are effected for a customer account,
customer and order event information working with the Plan Processor to respectively. Paragraph (d) provides an
for orders in NMS Securities and OTC Options Member must submit such
include the necessary COATS data
Equity Securities, across all markets, other information as may from time to
elements in the CAT Technical
from the time of order inception through time be required. Paragraph (e) permits
routing, cancellation, modification, or Specifications. Accordingly, although the Exchange to grant exceptions from
execution in a single consolidated data the Technical Specifications for the these requirements in such cases and for
source. Pursuant to Appendix C of the CAT have not yet been finalized, the such time periods as it deems
CAT NMS Plan, each Participant is Exchange and the other options appropriate.
required to conduct analyses of which exchanges propose to eliminate COATS The Exchange proposes to amend
of its existing trade and order data rules in accordance with the proposed Rule 24.4 to state it will request
and systems require the collection of timeline discussed below. The Exchange information under the Rule only if the
information that is duplicative of notes that it does not have any specific information is not available in the CAT
information collected for the CAT.11 In rules or requirements related to COATS because, for example, the transaction(s)
addition, among other things, Section but refers to its retirement below in an in question occurred before the firm was
C.9 of Appendix C to the Plan, as effort to provide transparency. reporting information to the CAT or
modified by the Commission, requires involved securities that are not
(1) Market Maker Equity Order Reports reportable to the CAT. In essence, under
each Participant to ‘‘file with the SEC
the relevant rule change filing to Rule 22.7(b) requires Market Makers, the proposed rule change, the Exchange
eliminate or modify its duplicative rules upon request and in the prescribed will make requests under Rule 24.4 if
within six (6) months of the SEC’s form, report to the Exchange every order and only if the information is not
approval of the CAT NMS Plan.’’ 12 The entered by the Market Maker for the otherwise available through the CAT.
Plan notes that ‘‘the elimination of such Once broker-dealer reporting to the
purchase or sale of (1) a security
rules and the retirement of such systems CAT has begun, the CAT will contain
underlying options traded on the
[will] be effective at such time as CAT the data the Participants would
Exchange, or (2) a security convertible otherwise have requested via the EBS
Data meets minimum standards of
into or exchangeable for such system for purposes of NMS Securities
accuracy and reliability.’’ 13
After conducting its analysis of its underlying security, as well as opening and OTC Equity Securities.
rules in accordance with the CAT NMS and closing positions in all such Consequently, the Exchange will not
Plan, the Exchange determined Rules securities held in each account reported need to use the EBS system or request
22.7 and 24.4 require the reporting of pursuant to Rule 22.7(a). The report information pursuant to Rule 24.4 for
information intended to be collected by pertaining to orders must include the NMS Securities or OTC Equity
the CAT. Therefore, the Exchange terms of each order, identification of the Securities for time periods after CAT
believes those provisions will no longer brokerage firms through which the reporting has begun if the appropriate
be necessary once the CAT is orders were entered, the times of entry accuracy and reliability thresholds are
operational and proposes to modify or cancellation, the times report of achieved, including an acceptable
those Rules as described below. execution were received and, if all or accuracy rate for customer and account
Additionally, the Exchange describes part of the order was executed, the information. However, Rule 24.4 cannot
below additional reporting requirements quantity and execution price. CAT will be completely eliminated immediately
that it may reduce for which no rule require Market Makers to report order upon the CAT achieving the appropriate
changes are necessary. These changes information for such securities. thresholds because Exchange staff may
will be implemented in accordance with Therefore, this rule provision as it still need to request information
the timeline described below. relates to order reports is duplicative of pursuant to Rule 24.4 for trading
CAT requirements, and the Exchange activity occurring before a member was
7 17 CFR 242.608. proposes to delete it. CAT does not reporting to the CAT.15 In addition, Rule
8 See Letter from the Participants to Brent J. require reporting of positions, so the 24.4 applies to information regarding
Fields, Secretary, Commission, dated September 30,
2014; and Letter from Participants to Brent J. Fields, Exchange will maintain the position transactions involving securities that
Secretary, Commission, dated February 27, 2015. reporting requirement in Rule 22.7(b).
On December 24, 2015, the Participants submitted The Exchange also proposes a 14 An Options Member is a Member of the
an amendment to the CAT NMS Plan. See Letter Exchange that is registered to participate in options
from Participants to Brent J. Fields, Secretary, conforming change to the rule name and
trading on EDGX Options. See Rule 16.1(a)(38). A
Commission, dated December 23, 2015. Interpretation and Policy .01. Member is a registered broker or dealer that has
mstockstill on DSK30JT082PROD with NOTICES
9 Securities Exchange Act Rel. No. 77724 (Apr.
been admitted to membership in the Exchange. See
27, 2016), 81 FR 30614 (May 17, 2016). (2) EBS Rule 1.5(n).
10 Securities Exchange Act Rel. No. 79318 (Nov. 15 Firms are required to maintain the trade
15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘Approval Rule 24.4 is the Exchange’s rule information for pre-CAT transactions in equities
Order’’). regarding the automated submission of and options pursuant to applicable rules, such as
11 Appendix C of CAT NMS Plan, Approval Order
specific trading data to the Exchange books and records retention requirements, for the
at 85010. relevant time period, which is generally three or six
12 Id. upon request using the Electronic Blue years depending upon the record. See 17 CFR
13 Id. Sheet (‘‘EBS’’) system. Rule 24.4 240.17a–3(a), 240.17a–4.
VerDate Sep<11>2014 18:32 May 31, 2017 Jkt 241001 PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 E:\FR\FM\01JNN1.SGM 01JNN1](https://thefederalregister.org/doc/82_FR_25462/page/2.svg)
![25360 Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices
will not be reportable to the CAT, such access to the necessary data to perform reliability standards that will determine
as fixed-income securities; thus, the rule its regulatory duties. when duplicative systems will be
must remain in effect with respect to The CAT NMS Plan requires that a retired, including, but not limited to,
those transactions indefinitely or until rule filing to eliminate a duplicative whether the attainment of a certain
those transactions are captured in the rule address whether ‘‘the availability of Error Rate should determine when a
CAT. certain data from Small Industry system duplicative of the CAT can be
Members two years after the Effective retired.’’ 20 The Exchange believes that it
(3) Other Reports Date would facilitate a more expeditious is critical that the CAT Data be
Various other Exchange Rules require retirement of duplicative systems.’’ 18 sufficiently accurate and reliable for the
Members to report information to the The Exchange believes COATS should Exchange to perform the regulatory
Exchange upon request.16 While the not be retired until all Participants and functions that it now performs using the
Exchange believes it is necessary to Industry Members that report data to information it receives pursuant to the
retain these Rules to ensure it has access COATS are reporting comparable data to reporting requirements described above.
to the necessary data to perform its the CAT. While the early submission of Accordingly, the Exchange believes that
regulatory duties and meet its options data to the CAT by Small the CAT Data should meet specific
surveillance obligations, it expects it Industry Members could expedite the quantitative error rates, as well as
will need to make fewer information retirement of COATS, the Exchange certain qualitative requirements.
requests pursuant to these Rule once believes that it premature [sic] to The Exchange believes (and the other
Members begin reporting to the CAT consider such a change and that options exchanges with respect to
and accuracy and reliability standards additional analysis would be necessary COATS and EBS) believe that, before
are met. to determine whether such early reporting requirements may be modified
In connection with these Rules reporting by Small Industry Members or eliminated, as applicable, and related
requiring Members to report information would be feasible. systems may be retired, the CAT would
to the Exchange upon request, Members The CAT NMS Plan requires that this need to achieve a sustained error rate for
must currently submit to the Exchange rule filing address ‘‘whether individual a period of at least 180 days of 5% or
stock transaction information for each Industry Members can be exempted lower measured on a pre-correction or
Qualified Contingent Cross order from reporting to duplicative systems as-submitted basis, and 2% or lower on
executed at the Exchange. CAT will once their CAT reporting meets a post-correction basis (measured at
require Members to report stock specified accuracy and reliability T+5).21 The Exchange proposes to
transaction information. Therefore, the standards, including, but not limited to, measure the 5% pre-correction and 2%
Exchange intends to eliminate this ways in which establishing cross-system post-correction thresholds by averaging
reporting requirement in accordance regulatory functionality or integrating the error rate across the period, not
with the proposed timeline below. data from existing systems and the CAT
require a 5% pre-correction and 2%
would facilitate such Individual
(4) Timeline for Elimination of post-correction maximum each day for
Industry Member exemptions.’’ 19 The
Duplicative Rules 180 consecutive days. The Exchange
Exchange believes that a single cut-over
The CAT NMS Plan states that the believes that measuring each of the
from the reporting requirements
elimination of rules that are duplicative thresholds over the course of 180 days
described above to CAT is highly
of the requirements of the CAT and the will ensure that the CAT consistently
preferable to a firm-by-firm approach
retirement of the related systems should meets minimum accuracy and reliability
and is not proposing to exempt
be effective at such time as CAT Data thresholds while also ensuring that
members from such reporting
meets minimum standards of accuracy single-day measurements do not unduly
requirements on a firm-by-firm basis.
and reliability.17 As discussed in more The Exchange believes that providing affect the overall measurements. The
detail below, the Exchange believes the such individual exemptions to Industry Exchange proposes to measure the
Rule provisions and related systems Members would be inefficient, more appropriate error rates in the aggregate,
described above may be retired at a date costly, and less reliable than the single rather than firm-by-firm. In addition,
after all Industry Members are reporting cut-over. Providing individual with respect to COATS, the Exchange
to the CAT when the proposed error rate exemptions would require the options proposes to measure the error rates for
thresholds have been met, and the exchanges to create, for a brief options only, not equity securities, as
Exchange has determined that its usage temporary period, a cross-system only options are subject to COATS. The
of the CAT Data has not revealed regulatory function and to integrate data 2% and 5% error rates are in line with
material issues that have not been from reports received pursuant to the the proposed retirement threshold for
corrected, confirmed that the CAT above requirements and the CAT to FINRA’s Order Audit Trail System
includes all data necessary to allow the avoid creating any regulatory gaps as a (‘‘OATS’’).
Exchange to continue to meet its result of such exemptions. Such a In addition to these minimum error
surveillance obligations, and confirmed function would be costly to create and rates before reporting requirements may
that the Plan Processor is sufficiently would give rise to a greater likelihood be modified or eliminated, as
meeting all of its obligations under the of data errors or other issues. Given the applicable, and related systems may be
CAT NMS Plan. limited time in which such exemptions retired, the Exchange believes that
The Exchange believes the proposed would be necessary, the Exchange does during the minimum 180-day period
rule changes should not be effective not believe that such exemptions would during which the thresholds are
until all Participants and Industry calculated, the Exchange’s use of the
mstockstill on DSK30JT082PROD with NOTICES
be an appropriate use of limited
Members that report data pursuant to resources. data in the CAT must confirm that (i)
the Rules described above are reporting The CAT NMS Plan also requires that usage over that time period has not
comparable data to the CAT. In this a rule filing to eliminate a duplicative 20 Id.
way, the Exchange will continue to have rule to provide ‘‘specific accuracy and 21 The Plan requires that the Plan Processor must
ensure that regulators have access to corrected and
16 See, e.g., Rule 4.2 (Furnishing of Records). 18 Id.
linked order and Customer data by 8:00 a.m.
17 Id. [sic] 19 Id. Eastern Time on T+5. See CAT NMS Plan, at C–15.
VerDate Sep<11>2014 18:32 May 31, 2017 Jkt 241001 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 E:\FR\FM\01JNN1.SGM 01JNN1](https://thefederalregister.org/doc/82_FR_25462/page/3.svg)
![Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices 25361
revealed material issues that have not the SEC, and is therefore consistent with regarding the retirement of systems
been corrected, (ii) the CAT includes all the Exchange Act. related to the CAT.25 In its comment
data necessary to allow the Exchange to Moreover, the purpose of the letters, with regard to the retirement of
continue to meet its surveillance proposed rule change is to amend rules duplicative systems more generally, FIF
obligations, and (iii) the Plan Processor that require the submission of recommended that the Participants
is sufficiently meeting all of its duplicative data to the Exchange. The continue the effort to incorporate
obligations under the CAT NMS Plan. elimination of such duplicative current reporting obligations into the
The Exchange believes this time period requirements will reduce unnecessary CAT in order to replace existing
to use the CAT Data is necessary to costs and other compliance burdens for
reportable systems with the CAT. In
reveal any errors that may manifest the Exchange and its Members, and
addition, FIF further recommended that,
themselves only after surveillance therefore, will enhance the efficiency of
the securities markets. Furthermore, the once a CAT Reporter achieved
patterns and other queries have been satisfactory reporting data quality, the
run and to confirm that the Plan Exchange believes that the approach set
forth in the proposed rule change strikes CAT Reporter should be exempt from
Processor is meeting its obligations and reporting to any duplicative reporting
performing its functions adequately. the appropriate balance between
ensuring that the Exchange is able to systems. FIF believed that these
If the Commission approves the continue to fulfill its statutory recommendations ‘‘would serve both an
proposed rule change, the Exchange will obligation to protect investors and the underlying regulatory objective of more
announce the date for modification or public interest by ensuring its immediate and accurate access to data
elimination, as applicable, of reporting surveillance of market activity remains as well as an industry objective of
requirements and retirement of related accurate and effective while also reduced costs and burdens of regulatory
systems and the implementation date of establishing a reasonable timeframe for oversight.’’ 26 In its comments about
the proposed rule change via Regulatory elimination or modification of its rules EBS specifically, FIF stated that the
Circular that will be published once the that will be rendered duplicative after retirement of the EBS requirements
Exchange (and other options exchanges implementation of the CAT. should be a high priority, and that the
with respect to COATS and EBS) CAT should be designed to include the
determines that the thresholds for (B) Self-Regulatory Organization’s
Statement on Burden on Competition requisite data elements to permit the
accuracy and reliability described above
Section 6(b)(8) of the Exchange Act 24 rapid retirement of EBS.27 Similarly,
have been met and that the Plan
requires that Exchange Rules not impose SIFMA stated that ‘‘the establishment of
Processor is sufficiently meeting all of
any burden on competition that is not the CAT must be accompanied by the
its obligations under the CAT NMS
Plan. necessary or appropriate. The Exchange prompt elimination of duplicative
does not believe that the proposed rule systems,’’ and ‘‘recommend[ed] that the
2. Statutory Basis change will result in any burden on initial technical specifications be
competition that is not necessary or designed to facilitate the immediate
The Exchange believes that the retirement of . . . duplicative reporting
appropriate in furtherance of the
proposed rule change is consistent with systems.’’ 28
purposes of the Exchange Act. The
the provisions of Section 6(b)(5) of the
Exchange notes that the proposed rule As discussed above, the Exchange
Exchange Act,22 which requires, among
change implements the requirements of agrees with the commenters that the
other things, that Exchange Rules must
the CAT NMS Plan approved by the reporting requirements proposed to be
be designed to prevent fraudulent and
Commission regarding the elimination modified or eliminated should be
manipulative acts and practices, to
of rules and systems that are duplicative replaced by the CAT reporting
promote just and equitable principles of
the CAT, and is designed to assist the requirements as soon as accurate and
trade, and, in general, to protect
Exchange in meeting its regulatory
investors and the public interest, and reliable CAT Data is available. To this
obligations pursuant to the Plan.
not designed to permit unfair end, the Exchange anticipates that the
Similarly, all exchanges and FINRA are
discrimination between customers, proposing the elimination of reporting CAT will be designed to collect the data
issuers, brokers and dealer. The requirements related to COATS and necessary to permit the modification or
Exchange believes that this proposal is EBS, as well as other duplicative rules, elimination, as applicable, of these
consistent with the Exchange Act to implement the requirements of the reporting requirements and the
because it fulfills the obligation in the CAT NMS Plan. Therefore, this is not a retirement of related systems. However,
CAT NMS Plan for the Exchange to competitive rule filing and, therefore, it as discussed above, the Exchange
submit a proposed rule change to does not raise competition issues disagrees with the recommendation to
eliminate or modify duplicative rules. In between and among the self-regulatory provide individual exemptions to those
approving the Plan, the SEC noted that organizations and/or their members. CAT Reporters who obtain satisfactory
the Plan ‘‘is necessary and appropriate data reporting quality.
in the public interest, for the protection (C) Self-Regulatory Organization’s
of investors and the maintenance of fair Statement on Comments on the 25 Letter from William H. Hebert, FIF, to
and orderly markets, to remove Proposed Rule Change Received From Participants re: Milestone for Participants’ rule
impediments to, and perfect the Members, Participants or Others change filings to eliminate/modify duplicative rules
mechanism of a national market system, Although written comments on the (Apr. 12, 2017) (‘‘FIF Letter’’); Letter from William
or is otherwise in furtherance of the proposed rule change were not solicited, H. Hebert, FIF, to Brent J. Fields, SEC re: Milestone
mstockstill on DSK30JT082PROD with NOTICES
for Participants’ rule change filings to eliminate/
purposes of the Act.’’ 23 As this proposal the Exchange received comments from modify duplicative rules (Apr. 12, 2017); and Letter
implements the Plan, the Exchange two commenters, the Financial from Kenneth E. Bentsen, Jr., SIFMA, to
believes that this proposal furthers the Information Forum (‘‘FIF’’) and the Participants re: Selection of Thesys as CAT
objectives of the Plan, as identified by Securities Industry and Financial Processor (Apr. 4, 2017) (‘‘SIFMA Letter’’) at 2.
Markets Association (‘‘SIFMA’’), 26 FIF Letter at 2.
22 15 27 FIF Letter at 2.
U.S.C. 78f(b)(5).
23 Approval Order at 84697. 24 15 U.S.C. 78f(b)(8). 28 SIFMA Letter at 2.
VerDate Sep<11>2014 18:32 May 31, 2017 Jkt 241001 PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 E:\FR\FM\01JNN1.SGM 01JNN1](https://thefederalregister.org/doc/82_FR_25462/page/4.svg)
![25362 Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices
III. Date of Effectiveness of the inspection and copying at the principal (‘‘FINRA’’) publishes a notice
Proposed Rule Change and Timing for office of the Exchange. All comments announcing the date that it will retire its
Commission Action received will be posted without change; OATS and EBS rules. The proposed
Within 45 days of the date of the Commission does not edit personal change is available on the Exchange’s
publication of this notice in the Federal identifying information from Web site at www.nyse.com, at the
Register or within such longer period (i) submissions. You should submit only principal office of the Exchange, and at
as the Commission may designate up to information that you wish to make the Commission’s Public Reference
available publicly. All submissions Room.
90 days of such date if it finds such
should refer to File Number SR–
longer period to be appropriate and II. Self-Regulatory Organization’s
BatsEDGX–2017–23 and should be
publishes its reasons for so finding or Statement of the Purpose of, and
submitted on or before June 22, 2017.
(ii) as to which the Exchange consents, Statutory Basis for, the Proposed Rule
the Commission will: (a) by order For the Commission, by the Division of Change
approve or disapprove such proposed Trading and Markets, pursuant to delegated
authority.29 In its filing with the Commission, the
rule change, or (b) institute proceedings
to determine whether the proposed rule Eduardo A. Aleman, self-regulatory organization included
change should be disapproved. Assistant Secretary. statements concerning the purpose of,
[FR Doc. 2017–11371 Filed 5–31–17; 8:45 am] and basis for, the proposed rule change
IV. Solicitation of Comments BILLING CODE 8011–01–P and discussed any comments it received
Interested persons are invited to on the proposed rule change. The text
submit written data, views, and of those statements may be examined at
arguments concerning the foregoing, SECURITIES AND EXCHANGE the places specified in Item IV below.
including whether the proposal is COMMISSION The Exchange has prepared summaries,
consistent with the Act. Comments may set forth in sections A, B, and C below,
[Release No. 34–80791; File No. SR–
be submitted by any of the following NYSEArca–2017–59] of the most significant parts of such
methods: statements.
Self-Regulatory Organizations; NYSE A. Self-Regulatory Organization’s
Electronic Comments Arca, Inc.; Notice of Filing of Proposed Statement of the Purpose of, and the
• Use the Commission’s Internet Rule Change To Eliminate Statutory Basis for, the Proposed Rule
comment form (http://www.sec.gov/ Requirements That Will Be Duplicative Change
rules/sro.shtml); or of CAT
• Send an email to rule- 1. Purpose
comments@sec.gov. Please include File May 26, 2017.
Pursuant to Section 19(b)(1) of the Background
Number SR–BatsEDGX–2017–23 on the
subject line. Securities Exchange Act of 1934 Bats BYX Exchange, Inc., Bats BZX
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Exchange, Inc., Bats EDGA Exchange,
Paper Comments notice is hereby given that on May 22, Inc., Bats EDGX Exchange, Inc., BOX
• Send paper comments in triplicate 2017, NYSE Arca, Inc. (‘‘NYSE Arca’’ or Options Exchange LLC, C2 Options
to Secretary, Securities and Exchange the ‘‘Exchange’’) filed with the Exchange, Incorporated, Chicago Board
Commission, 100 F Street NE., Securities and Exchange Commission Options Exchange, Incorporated,
Washington, DC 20549–1090. (‘‘SEC’’ or ‘‘Commission’’) the proposed Chicago Stock Exchange, Inc., FINRA,
rule change as described in Items I, II, Investors’ Exchange LLC, Miami
All submissions should refer to File
and III below, which Items have been International Securities Exchange, LLC,
Number SR–BatsEDGX–2017–23. This
prepared by the Exchange. The MIAX PEARL, LLC, NASDAQ BX, Inc.,
file number should be included on the
Commission is publishing this notice to Nasdaq GEMX, LLC, Nasdaq ISE, LLC,
subject line if email is used. To help the
solicit comments on the proposed rule Nasdaq MRX, LLC,3 NASDAQ PHLX
Commission process and review your
change from interested persons. LLC, The NASDAQ Stock Market LLC,
comments more efficiently, please use
only one method. The Commission will I. Self-Regulatory Organization’s the New York Stock Exchange LLC,
post all comments on the Commission’s Statement of the Terms of Substance of NYSE MKT LLC, NYSE Arca, Inc. and
Internet Web site (http://www.sec.gov/ the Proposed Rule Change NYSE National, Inc.4 (collectively, the
rules/sro.shtml). Copies of the The Exchange proposes to to delete ‘‘Participants’’) filed with the
submission, all subsequent the Order Audit Trail System (‘‘OATS’’) Commission, pursuant to Section 11A of
amendments, all written statements rules in the NYSE Arca Equities Rule the Exchange Act 5 and Rule 608 of
with respect to the proposed rule 7400 Series (Order Audit Trail System) Regulation NMS thereunder,6 the CAT
change that are filed with the and amend NYSE Arca Rule 10.2
Commission, and all written (Investigations and Regulatory
3 ISE Gemini, LLC, ISE Mercury, LLC and
communications relating to the International Securities Exchange, LLC have been
Cooperation) and NYSE Arca Equities renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
proposed rule change between the Rule 10.2 (Investigations and Regulatory and Nasdaq ISE, LLC, respectively. See Securities
Commission and any person, other than Cooperation) governing submission of Exchange Act Release No. 80248 (March 15, 2017),
those that may be withheld from the Electronic Blue Sheet trading data 82 FR 14547 (March 21, 2017) (SR–ISEGemini–
public in accordance with the 2017–13); Securities Exchange Act Release No.
(‘‘EBS’’) as these Rules provide for the 80326 (March 29, 2017), 82 FR 16460 (April 4,
provisions of 5 U.S.C. 552, will be
mstockstill on DSK30JT082PROD with NOTICES
collection of information that is 2017) (SR–ISEMercury–2017–05); and Securities
available for Web site viewing and duplicative of the data collection Exchange Act Release No. 80325 (March 29, 2017),
printing in the Commission’s Public requirements of the CAT once the 82 FR 16445 (April 4, 2017) (SR–ISE–2017–25).
4 National Stock Exchange, Inc. has been renamed
Reference Room, 100 F Street NE., Financial Industry Regulatory Authority NYSE National, Inc. See Securities Exchange Act
Washington, DC 20549, on official Release No. 79902 (January 30, 2017), 82 FR 9258
business days between the hours of 29 17 CFR 200.30–3(a)(12). (February 3, 2017) (SR–NSX–2016–16).
10:00 a.m. and 3:00 p.m. Copies of such 1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78k–1.
filing will also be available for 2 17 CFR 240.19b–4. 6 17 CFR 242.608.
VerDate Sep<11>2014 18:32 May 31, 2017 Jkt 241001 PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 E:\FR\FM\01JNN1.SGM 01JNN1](https://thefederalregister.org/doc/82_FR_25462/page/5.svg)
Document Created: 2017-06-01 03:04:50
Document Modified: 2017-06-01 03:04:50
| 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 25358 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR