82 FR 25379 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change To Adopt Rule 6900 To Establish the Procedures for Resolving Potential Disputes Related to CAT Fees Charged to Industry Members
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 104 (June 1, 2017)
Federal Register Volume 82, Issue 104 (June 1, 2017)
| Page Range | 25379-25382 | |
| FR Document | 2017-11358 |
[Federal Register Volume 82, Number 104 (Thursday, June 1, 2017)] [Notices] [Pages 25379-25382] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-11358] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80782; File No. SR-NYSEMKT-2017-31] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing of Proposed Rule Change To Adopt Rule 6900 To Establish the Procedures for Resolving Potential Disputes Related to CAT Fees Charged to Industry Members May 26, 2017. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (``Act'' or the ``Exchange Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on May 16, 2017, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (``SEC'' or the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C.78s (b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to adopt Rule 6900 (Consolidated Audit Trail--Fee Dispute Resolutions) to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members.\4\ The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. --------------------------------------------------------------------------- \4\ Unless otherwise specified, capitalized terms used in this rule filing are defined as set forth herein or in the Consolidated Audit Trail Funding Fees sections of the Exchange's Equities Price List and Options Fee Schedule, the Exchange's CAT Compliance Rule Series or in the CAT NMS Plan. --------------------------------------------------------------------------- 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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those 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 the 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,\5\ NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE MKT LLC, NYSE Arca, Inc. and NYSE National, Inc.\6\ (collectively, the ``Participants'') filed with the Commission, pursuant to Section 11A of the Exchange Act \7\ and Rule 608 of Regulation NMS thereunder,\8\ the National Market System Plan Governing the Consolidated Audit Trail (the ``CAT NMS Plan'' or ``Plan'').\9\ 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,\10\ and approved by the Commission, as modified, on November 15, 2016.\11\ The Plan is designed to create, implement and maintain a consolidated audit trail (``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. The Plan accomplishes this by creating CAT NMS, LLC (the ``Company''), of which each Participant is a member, to operate the CAT.\12\ Under the CAT NMS Plan, the Operating Committee of the Company (``Operating Committee'') has discretion to establish funding for the Company to operate the CAT, including establishing fees that the Participants will pay, and establishing fees for Industry Members that will be implemented by the Participants (``CAT Fees'').\13\ The Participants are required [[Page 25380]] to file with the SEC under Section 19(b) of the Exchange Act any such CAT Fees applicable to Industry Members that the Operating Committee approves.\14\ Accordingly, the Exchange filed a proposed rule change with the SEC to adopt the Consolidated Audit Trail Funding Fees, which will require Industry Members that are Exchange members to pay the CAT Fees determined by the Operating Committee.\15\ The Exchange submits this rule filing to adopt Rule 6900 (Consolidated Audit Trail--Fee Dispute Resolution) to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members. Proposed Rule 6900 would apply to Industry Members of the Exchange's equities and options markets.\16\ Proposed Rule 6900 is described below. --------------------------------------------------------------------------- \5\ 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 Release Nos. 80248 (March 15, 2017), 82 FR 14547 (March 21, 2017); 80326 (March 29, 2017), 82 FR 16460 (April 4, 2017); and 80325 (March 29, 2017), 82 FR 16445 (April 4, 2017). \6\ National Stock Exchange, Inc. has been renamed NYSE National, Inc. See Securities Exchange Act Release No. 79902 (January 30, 2017), 82 FR 9258 (February 3, 2017). \7\ 15 U.S.C. 78k-1. \8\ 17 CFR 242.608. \9\ 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. \10\ Securities Exchange Act Release No. 77724 (April 27, 2016), 81 FR 30614 (May 17, 2016). \11\ Securities Exchange Act Release No. 79318 (November 15, 2016), 81 FR 84696 (November 23, 2016) (``Approval Order''). \12\ The Plan also serves as the limited liability company agreement for the Company. \13\ Section 11.1(b) of the CAT NMS Plan. Proposed Rule 6900 would be applicable to member organizations. The term ``member organization'' is defined in Rule 24 (Office Rules) as ``a partnership, corporation or such other entity as the Exchange may, by Rule, permit to become a member organization, and which meets the qualifications specified in the Rules.'' The term ``member organization'' is defined in Rule 2(b)(i) (Equities Rules) as [sic] a registered broker or dealer (unless exempt pursuant to the Securities Exchange Act of 1934) (the ``Act'') that is a member of the Financial Industry Regulatory Authority, Inc. (``FINRA'') or another registered securities exchange. Member organizations that transact business with public customers or conduct business on the Floor of the Exchange shall at all times be members of FINRA. A registered broker or dealer must also be approved by the Exchange and authorized to designate an associated natural person to effect transactions on the floor of the Exchange or any facility thereof. This term shall include a natural person so registered, approved and licensed who directly effects transactions on the floor of the Exchange or any facility thereof.'' The term ``member organization'' also [sic] includes any registered broker or dealer that is a member of FINRA or a registered securities exchange, consistent with the requirements of section 2(b)(i) of this Rule, which does not own a trading license and agrees to be regulated by the Exchange as a member organization and which the Exchange has agreed to regulate.'' See Rule 2(a)(ii) [sic] (Equities Rules). \14\ Section 11.1(b) of the CAT NMS Plan. \15\ See SR-NYSEMKT-2017-26, filed on May 10, 2017. \16\ A rule reference has been added to Rule 0--Equities to make clear that the proposed rule applies to transactions conducted on the Equities Trading Systems. --------------------------------------------------------------------------- (1) Definitions Paragraph (a) of proposed Rule 6900 sets forth the definitions for proposed Rule 6900. Paragraph (a)(1) of proposed Rule 6900 states that, for purposes of Rule 6900, the terms ``CAT NMS Plan'', ``Industry Member'', ``Operating Committee'', and ``Participant'' are defined as set forth in the Rule 6810 (Consolidated Audit Trail--Definitions), and the term ``CAT Fee'' is defined in the Consolidated Audit Trail Funding Fees section of the Exchange's Equities Price List and Options Fee Schedule. In addition, the Exchange proposes to add paragraph (a)(2) to proposed Rule 6900. New paragraph (a)(2) would define the term ``Subcommittee'' to mean a subcommittee designated by the Operating Committee pursuant to the CAT NMS Plan. This definition is the same substantive definition as set forth in Section 1.1 of the CAT NMS Plan. (2) Fee Dispute Resolution Section 11.5 of the CAT NMS Plan requires Participants to adopt rules requiring that disputes with respect to fees charged to Industry Members pursuant to the CAT NMS Plan be determined by the Operating Committee or Subcommittee. Section 11.5 of the CAT NMS Plan also states that decisions by the Operating Committee or Subcommittee on such matters will be binding on Industry Members, without prejudice to the right of any Industry Member to seek redress from the SEC pursuant to SEC Rule 608 or in any other appropriate forum. The Exchange proposes to adopt paragraph (b) of proposed Rule 6900. Paragraph (b) of proposed Rule 6900 states that disputes initiated by an Industry Member with respect to CAT Fees charged to such Industry Member pursuant to the Consolidated Audit Trail Funding Fees, including disputes related to the designated tier and the fee calculated pursuant to such tier, will be resolved by the Operating Committee, or a Subcommittee designated by the Operating Committee, of the CAT NMS Plan, pursuant to the Fee Dispute Resolution Procedures adopted pursuant to the CAT NMS Plan and set forth in paragraph (c) of proposed Rule 6900. Decisions on such matters will be binding on Industry Members, without prejudice to the rights of any such Industry Member to seek redress from the SEC or in any other appropriate forum. The Operating Committee has adopted ``Fee Dispute Resolution Procedures'' governing the manner in which disputes regarding CAT Fees charged pursuant to the Consolidated Audit Trail Funding Fees will be addressed. These Fee Dispute Resolution Procedures, as they relate to Industry Members, are set forth in paragraph (c) of proposed Rule 6900. Specifically, the Fee Dispute Resolution Procedures provide the procedure for Industry Members that dispute CAT Fees charged to such Industry Member pursuant to one or more of the Participants' Consolidated Audit Trail Funding Fees Rules, including disputes related to the designated tier and the fee calculated pursuant to such tier, to apply for an opportunity to be heard and to have the CAT Fees charged to such Industry Member reviewed. Under these Procedures, an Industry Member that disputes CAT Fees charged to such Industry Member and that desires to have an opportunity to be heard with respect to such disputed CAT Fees must file a written application with the Company within 15 business days after being notified of such disputed CAT Fees. The application must identify the disputed CAT Fees, state the specific reasons why the applicant takes exception to such CAT Fees, and set forth the relief sought. In addition, if the applicant intends to submit any additional documents, statements, arguments or other material in support of the application, the same should be so stated and identified. The Company will refer applications for hearing and review promptly to the Subcommittee designated by the Operating Committee pursuant to Section 4.12 of the CAT NMS Plan with responsibility for conducting the reviews of CAT Fee disputes pursuant to these Procedures. This Subcommittee will be referred to as the Fee Review Subcommittee. The members of the Fee Review Subcommittee will be subject to the provisions of Section 4.3(d) of the CAT NMS Plan regarding recusal and Conflicts of Interest. The Fee Review Subcommittee will keep a record of the proceedings. The Fee Review Subcommittee will hold hearings promptly. The Fee Review Subcommittee will set a hearing date. The parties to the hearing will furnish the Fee Review Subcommittee with all materials relevant to the proceedings at least 72 hours prior to the date of the hearing. Each party will have the right to inspect and copy the other party's materials prior to the hearing. The parties to the hearing will consist of the applicant and a representative of the Company who will present the reasons for the action taken by the Company that allegedly aggrieved the applicant. The applicant is entitled to be accompanied, represented and advised by counsel at all stages of the proceedings. The Fee Review Subcommittee will determine all questions concerning the admissibility of evidence and will otherwise regulate the conduct of the hearing. Each of the parties will be permitted to make an opening statement, present witnesses and documentary evidence, cross examine opposing witnesses and present closing arguments orally or in writing as determined by the Fee Review Subcommittee. The Fee Review Subcommittee also will have the right to question all parties and witnesses to the proceeding. The Fee Review Subcommittee must keep a record of the hearing. The formal rules of evidence will not apply. The Fee Review Subcommittee must set forth its decision in writing and send the written decision to the parties to the proceeding. Such decisions will contain the reasons supporting the conclusions of the Fee Review Subcommittee. The decision of the Fee Review Subcommittee will be subject to review by the Operating Committee either on its own motion within 20 business days after issuance of the decision or upon written request submitted by the applicant within 15 business days after issuance of the decision. The applicant's petition must be in writing and must specify the findings and conclusions to which the applicant objects, together [[Page 25381]] with the reasons for such objections. Any objection to a decision not specified in writing will be considered to have been abandoned and may be disregarded. Parties may petition to submit a written argument to the Operating Committee and may request an opportunity to make an oral argument before the Operating Committee. The Operating Committee will have sole discretion to grant or deny either request. The Operating Committee will conduct the review. The review will be made upon the record and will be made after such further proceedings, if any, as the Operating Committee may order. Based upon such record, the Operating Committee may affirm, reverse or modify, in whole or in part, the decision of the Fee Review Subcommittee. The decision of the Operating Committee will be in writing, will be sent to the parties to the proceeding and will be final. The Procedures state that a final decision regarding the disputed CAT Fees by the Operating Committee, or the Fee Review Subcommittee (if there is no review by the Operating Committee), must be provided within 90 days of the date on which the Industry Member filed a written application regarding disputed CAT Fees with the Company. The Operating Committee may extend the 90-day time limit at its discretion. In addition, the Procedures state that any notices or other documents may be served upon the applicant either personally or by leaving the same at its, his or her place of business or by deposit in the United States post office, postage prepaid, by registered or certified mail, addressed to the applicant at its, his or her last known business or residence address. The Procedures also state that any time limits imposed under the Procedures for the submission of answers, petitions or other materials may be extended by permission of the Operating Committee. All papers and documents relating to review by the Fee Review Subcommittee or the Operating Committee must be submitted to the Fee Review Subcommittee or Operating Committee, as applicable. The Procedures also note that decisions on such CAT Fee disputes made pursuant to these Procedures will be binding on Industry Members, without prejudice to the rights of any such Industry Member to seek redress from the SEC or in any other appropriate forum. Finally, an Industry Member that files a written application with the Company regarding disputed CAT Fees in accordance with these Procedures is not required to pay such disputed CAT Fees until the dispute is resolved in accordance with these Procedures, including any review by the SEC or in any other appropriate forum. For these purposes, the disputed CAT Fees means the amount of the invoiced CAT Fees that the Industry Member has asserted pursuant to these Procedures that such Industry Member does not owe to the Company. The Industry Member must pay any invoiced CAT Fees that are not disputed CAT Fees when due as set forth in the original invoice. Once the dispute regarding CAT Fees is resolved pursuant to these Procedures, if it is determined that the Industry Member owes any of the disputed CAT Fees, then the Industry Member must pay such disputed CAT Fees that are owed as well as interest on such disputed CAT Fees from the original due date (that is, 30 days after receipt of the original invoice of such CAT Fees) until such disputed CAT Fees are paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)(5) of the Act,\17\ which require, among other things, that the Exchange's 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 dealers, and Section 6(b)(8) of the Act,\18\ which requires that the Exchange's rules not impose any burden on competition that is not necessary or appropriate. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b)(5). \18\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- The Exchange believes that this proposal is consistent with the Act because it implements, interprets or clarifies Section 11.5 of the Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the Plan. 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.'' \19\ To the extent that this proposal implements, interprets or clarifies the Plan and applies specific requirements to Industry Members, the Exchange believes that this proposal furthers the objectives of the Plan, as identified by the SEC, and is therefore consistent with the Act. --------------------------------------------------------------------------- \19\ Approval Order at 84697. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposed rule change implements Section 11.5 of the CAT NMS Plan approved by the Commission, and is designed to assist the Exchange in meeting its regulatory obligations pursuant to the Plan. Similarly, all national securities exchanges and FINRA are proposing this proposed rule 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 exchanges and FINRA. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. 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 up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove the 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 proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or [[Page 25382]] Send an email to [email protected]. Please include File Number SR-NYSEMKT-2017-31 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-NYSEMKT-2017-31. 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-NYSEMKT-2017-31, and should be submitted on or before June 22, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\20\ --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-11358 Filed 5-31-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices 25379
No. 1 thereto, is consistent with Section change is available on the Exchange’s NMS Plan’’ or ‘‘Plan’’).9 The
6(b)(5) of the Act 15 and the rules and Web site at www.nyse.com, at the Participants filed the Plan to comply
regulations thereunder applicable to a principal office of the Exchange, and at with Rule 613 of Regulation NMS under
national securities exchange. the Commission’s Public Reference the Exchange Act. The Plan was
Room. published for comment in the Federal
IV. Conclusion
Register on May 17, 2016,10 and
It is therefore ordered, pursuant to II. Self-Regulatory Organization’s approved by the Commission, as
Section 19(b)(2) of the Exchange Act,16 Statement of the Purpose of, and modified, on November 15, 2016.11 The
that the proposed rule change (SR– Statutory Basis for, the Proposed Rule Plan is designed to create, implement
NYSEArca–2017–30), as modified by Change and maintain a consolidated audit trail
Amendment No. 1 thereto, be, and it (‘‘CAT’’) that would capture customer
hereby is, approved. In its filing with the Commission, the
and order event information for orders
self-regulatory organization included in NMS Securities and OTC Equity
For the Commission, by the Division of statements concerning the purpose of,
Trading and Markets, pursuant to delegated Securities, across all markets, from the
authority.17 and basis for, the proposed rule change time of order inception through routing,
Eduardo A. Aleman,
and discussed any comments it received cancellation, modification, or execution
on the proposed rule change. The text in a single consolidated data source.
Assistant Secretary.
of those statements may be examined at The Plan accomplishes this by creating
[FR Doc. 2017–11255 Filed 5–31–17; 8:45 am]
the places specified in Item IV below. CAT NMS, LLC (the ‘‘Company’’), of
BILLING CODE 8011–01–P
The Exchange has prepared summaries, which each Participant is a member, to
set forth in sections A, B, and C below, operate the CAT.12 Under the CAT NMS
SECURITIES AND EXCHANGE of the most significant parts of such Plan, the Operating Committee of the
COMMISSION statements. Company (‘‘Operating Committee’’) has
A. Self-Regulatory Organization’s discretion to establish funding for the
[Release No. 34–80782; File No. SR–
NYSEMKT–2017–31] Statement of the Purpose of, and the Company to operate the CAT, including
Statutory Basis for, the Proposed Rule establishing fees that the Participants
Self-Regulatory Organizations; NYSE Change will pay, and establishing fees for
MKT LLC; Notice of Filing of Proposed Industry Members that will be
Rule Change To Adopt Rule 6900 To 1. Purpose implemented by the Participants (‘‘CAT
Establish the Procedures for Resolving Fees’’).13 The Participants are required
Bats BYX Exchange, Inc., Bats BZX
Potential Disputes Related to CAT Exchange, Inc., Bats EDGA Exchange, 9 See Letter from the Participants to Brent J.
Fees Charged to Industry Members Inc., Bats EDGX Exchange, Inc., BOX Fields, Secretary, Commission, dated September 30,
May 26, 2017. Options Exchange LLC, C2 Options 2014; and Letter from Participants to Brent J. Fields,
Exchange, Incorporated, Chicago Board Secretary, Commission, dated February 27, 2015.
Pursuant to Section 19(b)(1) 1 of the On December 24, 2015, the Participants submitted
Securities Exchange Act of 1934 (‘‘Act’’ Options Exchange, Incorporated, an amendment to the CAT NMS Plan. See Letter
or the ‘‘Exchange Act’’) 2 and Rule 19b– Chicago Stock Exchange, Inc., Financial from Participants to Brent J. Fields, Secretary,
4 thereunder,3 notice is hereby given Industry Regulatory Authority, Inc. Commission, dated December 23, 2015.
10 Securities Exchange Act Release No. 77724
that, on May 16, 2017, NYSE MKT LLC (‘‘FINRA’’), Investors’ Exchange LLC,
(April 27, 2016), 81 FR 30614 (May 17, 2016).
(the ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed Miami International Securities 11 Securities Exchange Act Release No. 79318
with the Securities and Exchange Exchange, LLC, MIAX PEARL, LLC, (November 15, 2016), 81 FR 84696 (November 23,
Commission (‘‘SEC’’ or the NASDAQ BX, Inc., Nasdaq GEMX, LLC, 2016) (‘‘Approval Order’’).
‘‘Commission’’) the proposed rule Nasdaq ISE, LLC, Nasdaq MRX, LLC,5 12 The Plan also serves as the limited liability
NASDAQ PHLX LLC, The NASDAQ company agreement for the Company.
change as described in Items I and II 13 Section 11.1(b) of the CAT NMS Plan. Proposed
below, which Items have been prepared Stock Market LLC, New York Stock Rule 6900 would be applicable to member
by the self-regulatory organization. The Exchange LLC, NYSE MKT LLC, NYSE organizations. The term ‘‘member organization’’ is
Commission is publishing this notice to Arca, Inc. and NYSE National, Inc.6 defined in Rule 24 (Office Rules) as ‘‘a partnership,
solicit comments on the proposed rule (collectively, the ‘‘Participants’’) filed corporation or such other entity as the Exchange
may, by Rule, permit to become a member
change from interested persons. with the Commission, pursuant to organization, and which meets the qualifications
Section 11A of the Exchange Act 7 and specified in the Rules.’’ The term ‘‘member
I. Self-Regulatory Organization’s
Rule 608 of Regulation NMS organization’’ is defined in Rule 2(b)(i) (Equities
Statement of the Terms of Substance of Rules) as [sic] a registered broker or dealer (unless
thereunder,8 the National Market
the Proposed Rule Change exempt pursuant to the Securities Exchange Act of
System Plan Governing the 1934) (the ‘‘Act’’) that is a member of the Financial
The Exchange proposes to adopt Rule Consolidated Audit Trail (the ‘‘CAT Industry Regulatory Authority, Inc. (‘‘FINRA’’) or
6900 (Consolidated Audit Trail—Fee another registered securities exchange. Member
Dispute Resolutions) to establish the and Options Fee Schedule, the Exchange’s CAT
organizations that transact business with public
procedures for resolving potential customers or conduct business on the Floor of the
Compliance Rule Series or in the CAT NMS Plan.
Exchange shall at all times be members of FINRA.
disputes related to CAT Fees charged to 5 ISE Gemini, LLC, ISE Mercury, LLC and
A registered broker or dealer must also be approved
Industry Members.4 The proposed rule International Securities Exchange, LLC have been by the Exchange and authorized to designate an
renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, associated natural person to effect transactions on
15 15
and Nasdaq ISE, LLC, respectively. See Securities the floor of the Exchange or any facility thereof.
U.S.C. 78f(b)(5). Exchange Act Release Nos. 80248 (March 15, 2017), This term shall include a natural person so
mstockstill on DSK30JT082PROD with NOTICES
16 15 U.S.C. 78s(b)(2). 82 FR 14547 (March 21, 2017); 80326 (March 29, registered, approved and licensed who directly
17 17 CFR 200.30–3(a)(12).
2017), 82 FR 16460 (April 4, 2017); and 80325 effects transactions on the floor of the Exchange or
1 15 U.S.C.78s (b)(1). (March 29, 2017), 82 FR 16445 (April 4, 2017). any facility thereof.’’ The term ‘‘member
2 15 U.S.C. 78a. 6 National Stock Exchange, Inc. has been renamed
organization’’ also [sic] includes any registered
3 17 CFR 240.19b–4. NYSE National, Inc. See Securities Exchange Act broker or dealer that is a member of FINRA or a
4 Unless otherwise specified, capitalized terms Release No. 79902 (January 30, 2017), 82 FR 9258 registered securities exchange, consistent with the
used in this rule filing are defined as set forth (February 3, 2017). requirements of section 2(b)(i) of this Rule, which
7 15 U.S.C. 78k–1.
herein or in the Consolidated Audit Trail Funding does not own a trading license and agrees to be
Fees sections of the Exchange’s Equities Price List 8 17 CFR 242.608. Continued
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to file with the SEC under Section 19(b) prejudice to the right of any Industry Subcommittee designated by the
of the Exchange Act any such CAT Fees Member to seek redress from the SEC Operating Committee pursuant to
applicable to Industry Members that the pursuant to SEC Rule 608 or in any Section 4.12 of the CAT NMS Plan with
Operating Committee approves.14 other appropriate forum. The Exchange responsibility for conducting the
Accordingly, the Exchange filed a proposes to adopt paragraph (b) of reviews of CAT Fee disputes pursuant
proposed rule change with the SEC to proposed Rule 6900. Paragraph (b) of to these Procedures. This Subcommittee
adopt the Consolidated Audit Trail proposed Rule 6900 states that disputes will be referred to as the Fee Review
Funding Fees, which will require initiated by an Industry Member with Subcommittee. The members of the Fee
Industry Members that are Exchange respect to CAT Fees charged to such Review Subcommittee will be subject to
members to pay the CAT Fees Industry Member pursuant to the the provisions of Section 4.3(d) of the
determined by the Operating Consolidated Audit Trail Funding Fees, CAT NMS Plan regarding recusal and
Committee.15 The Exchange submits including disputes related to the Conflicts of Interest. The Fee Review
this rule filing to adopt Rule 6900 designated tier and the fee calculated Subcommittee will keep a record of the
(Consolidated Audit Trail—Fee Dispute pursuant to such tier, will be resolved proceedings.
Resolution) to establish the procedures by the Operating Committee, or a The Fee Review Subcommittee will
for resolving potential disputes related Subcommittee designated by the hold hearings promptly. The Fee
to CAT Fees charged to Industry Operating Committee, of the CAT NMS Review Subcommittee will set a hearing
Members. Proposed Rule 6900 would Plan, pursuant to the Fee Dispute date. The parties to the hearing will
apply to Industry Members of the Resolution Procedures adopted furnish the Fee Review Subcommittee
Exchange’s equities and options pursuant to the CAT NMS Plan and set with all materials relevant to the
markets.16 Proposed Rule 6900 is forth in paragraph (c) of proposed Rule proceedings at least 72 hours prior to
described below. 6900. Decisions on such matters will be the date of the hearing. Each party will
binding on Industry Members, without have the right to inspect and copy the
(1) Definitions prejudice to the rights of any such other party’s materials prior to the
Paragraph (a) of proposed Rule 6900 Industry Member to seek redress from hearing.
sets forth the definitions for proposed the SEC or in any other appropriate The parties to the hearing will consist
Rule 6900. Paragraph (a)(1) of proposed forum. of the applicant and a representative of
Rule 6900 states that, for purposes of The Operating Committee has the Company who will present the
Rule 6900, the terms ‘‘CAT NMS Plan’’, adopted ‘‘Fee Dispute Resolution reasons for the action taken by the
‘‘Industry Member’’, ‘‘Operating Procedures’’ governing the manner in Company that allegedly aggrieved the
Committee’’, and ‘‘Participant’’ are which disputes regarding CAT Fees applicant. The applicant is entitled to be
defined as set forth in the Rule 6810 charged pursuant to the Consolidated accompanied, represented and advised
(Consolidated Audit Trail—Definitions), Audit Trail Funding Fees will be by counsel at all stages of the
and the term ‘‘CAT Fee’’ is defined in addressed. These Fee Dispute proceedings.
Resolution Procedures, as they relate to The Fee Review Subcommittee will
the Consolidated Audit Trail Funding
Industry Members, are set forth in determine all questions concerning the
Fees section of the Exchange’s Equities
paragraph (c) of proposed Rule 6900. admissibility of evidence and will
Price List and Options Fee Schedule. In
Specifically, the Fee Dispute Resolution otherwise regulate the conduct of the
addition, the Exchange proposes to add
Procedures provide the procedure for hearing. Each of the parties will be
paragraph (a)(2) to proposed Rule 6900.
Industry Members that dispute CAT permitted to make an opening
New paragraph (a)(2) would define the
Fees charged to such Industry Member statement, present witnesses and
term ‘‘Subcommittee’’ to mean a
pursuant to one or more of the documentary evidence, cross examine
subcommittee designated by the
Participants’ Consolidated Audit Trail opposing witnesses and present closing
Operating Committee pursuant to the
Funding Fees Rules, including disputes arguments orally or in writing as
CAT NMS Plan. This definition is the
related to the designated tier and the fee determined by the Fee Review
same substantive definition as set forth
calculated pursuant to such tier, to Subcommittee. The Fee Review
in Section 1.1 of the CAT NMS Plan.
apply for an opportunity to be heard Subcommittee also will have the right to
(2) Fee Dispute Resolution and to have the CAT Fees charged to question all parties and witnesses to the
Section 11.5 of the CAT NMS Plan such Industry Member reviewed. proceeding. The Fee Review
requires Participants to adopt rules Under these Procedures, an Industry Subcommittee must keep a record of the
requiring that disputes with respect to Member that disputes CAT Fees charged hearing. The formal rules of evidence
to such Industry Member and that will not apply.
fees charged to Industry Members
desires to have an opportunity to be The Fee Review Subcommittee must
pursuant to the CAT NMS Plan be
heard with respect to such disputed set forth its decision in writing and send
determined by the Operating Committee
CAT Fees must file a written application the written decision to the parties to the
or Subcommittee. Section 11.5 of the
with the Company within 15 business proceeding. Such decisions will contain
CAT NMS Plan also states that decisions
days after being notified of such the reasons supporting the conclusions
by the Operating Committee or
disputed CAT Fees. The application of the Fee Review Subcommittee.
Subcommittee on such matters will be The decision of the Fee Review
must identify the disputed CAT Fees,
binding on Industry Members, without Subcommittee will be subject to review
state the specific reasons why the
applicant takes exception to such CAT by the Operating Committee either on
regulated by the Exchange as a member
Fees, and set forth the relief sought. In its own motion within 20 business days
mstockstill on DSK30JT082PROD with NOTICES
organization and which the Exchange has agreed to
regulate.’’ See Rule 2(a)(ii) [sic] (Equities Rules). addition, if the applicant intends to after issuance of the decision or upon
14 Section 11.1(b) of the CAT NMS Plan.
submit any additional documents, written request submitted by the
15 See SR–NYSEMKT–2017–26, filed on May 10,
statements, arguments or other material applicant within 15 business days after
2017. issuance of the decision. The applicant’s
16 A rule reference has been added to Rule 0—
in support of the application, the same
Equities to make clear that the proposed rule should be so stated and identified. petition must be in writing and must
applies to transactions conducted on the Equities The Company will refer applications specify the findings and conclusions to
Trading Systems. for hearing and review promptly to the which the applicant objects, together
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![25382 Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices
• Send an email to rule-comments@ SECURITIES AND EXCHANGE of the most significant parts of such
sec.gov. Please include File Number SR– COMMISSION statements.
NYSEMKT–2017–31 on the subject line. A. Self-Regulatory Organization’s
[Release No. 34–80780; File No. SR–NYSE– Statement of the Purpose of, and the
Paper Comments 2017–24] Statutory Basis for, the Proposed Rule
• Send paper comments in triplicate Change
Self-Regulatory Organizations; New
to Secretary, Securities and Exchange
York Stock Exchange LLC; Notice of 1. Purpose
Commission, 100 F Street NE., Filing of Proposed Rule Change To
Washington, DC 20549–1090. Bats BYX Exchange, Inc., Bats BZX
Adopt Rule 6900 To Establish the Exchange, Inc., Bats EDGA Exchange,
All submissions should refer to File Procedures for Resolving Potential Inc., Bats EDGX Exchange, Inc., BOX
Number SR–NYSEMKT–2017–31. This Disputes Related to CAT Fees Charged Options Exchange LLC, C2 Options
file number should be included on the to Industry Members Exchange, Incorporated, Chicago Board
subject line if email is used. To help the May 26, 2017. Options Exchange, Incorporated,
Commission process and review your Pursuant to Section 19(b)(1) 1 of the Chicago Stock Exchange, Inc., Financial
comments more efficiently, please use Securities Exchange Act of 1934 (‘‘Act’’ Industry Regulatory Authority, Inc.
only one method. The Commission will or ‘‘Exchange Act’’) 2 and Rule 19b–4 (‘‘FINRA’’), Investors’ Exchange LLC,
post all comments on the Commission’s Miami International Securities
thereunder,3 notice is hereby given that,
Internet Web site (http://www.sec.gov/ Exchange, LLC, MIAX PEARL, LLC,
on May 16, 2017, New York Stock
rules/sro.shtml). Copies of the NASDAQ BX, Inc., Nasdaq GEMX, LLC,
Exchange LLC (‘‘NYSE’’ or the
submission, all subsequent Nasdaq ISE, LLC, Nasdaq MRX, LLC,5
‘‘Exchange’’) filed with the Securities
amendments, all written statements NASDAQ PHLX LLC, The NASDAQ
and Exchange Commission (‘‘SEC’’ or
with respect to the proposed rule Stock Market LLC, New York Stock
the ‘‘Commission’’) the proposed rule
Exchange LLC, NYSE MKT LLC, NYSE
change that are filed with the change as described in Items I and II
Arca, Inc. and NYSE National, Inc.6
Commission, and all written below, which Items have been prepared
(collectively, the ‘‘Participants’’) filed
communications relating to the by the self-regulatory organization. The
with the Commission, pursuant to
proposed rule change between the Commission is publishing this notice to
Section 11A of the Exchange Act 7 and
Commission and any person, other than solicit comments on the proposed rule Rule 608 of Regulation NMS
those that may be withheld from the change from interested persons. thereunder,8 the National Market
public in accordance with the I. Self-Regulatory Organization’s System Plan Governing the
provisions of 5 U.S.C. 552, will be Statement of the Terms of Substance of Consolidated Audit Trail (the ‘‘CAT
available for Web site viewing and the Proposed Rule Change NMS Plan’’ or ‘‘Plan’’).9 The
printing in the Commission’s Public Participants filed the Plan to comply
The Exchange proposes to adopt Rule
Reference Room, 100 F Street NE., with Rule 613 of Regulation NMS under
6900 (Consolidated Audit Trail—Fee
Washington, DC 20549, on official the Exchange Act. The Plan was
Dispute Resolutions) to establish the
business days between the hours of published for comment in the Federal
procedures for resolving potential
10:00 a.m. and 3:00 p.m. Copies of the Register on May 17, 2016,10 and
disputes related to CAT Fees charged to approved by the Commission, as
filing also will be available for Industry Members.4 The proposed rule
inspection and copying at the principal modified, on November 15, 2016.11 The
change is available on the Exchange’s Plan is designed to create, implement
office of the Exchange. All comments Web site at www.nyse.com, at the
received will be posted without change; and maintain a consolidated audit trail
principal office of the Exchange, and at (‘‘CAT’’) that would capture customer
the Commission does not edit personal the Commission’s Public Reference
identifying information from and order event information for orders
Room. in NMS Securities and OTC Equity
submissions. You should submit only
information that you wish to make II. Self-Regulatory Organization’s
5 ISE Gemini, LLC, ISE Mercury, LLC and
available publicly. All submissions Statement of the Purpose of, and
International Securities Exchange, LLC have been
Statutory Basis for, the Proposed Rule
should refer to File Number SR– renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
Change and Nasdaq ISE, LLC, respectively. See Securities
NYSEMKT–2017–31, and should be
Exchange Act Release. Nos. 80248 (March 15, 2017),
submitted on or before June 22, 2017. In its filing with the Commission, the 82 FR 14547 (March 21, 2017); 80326 (March 29,
self-regulatory organization included 2017), 82 FR 16460 (April 4, 2017); and 80325
For the Commission, by the Division of
statements concerning the purpose of, (March 29, 2017), 82 FR 16445 (April 4, 2017).
Trading and Markets, pursuant to delegated
and basis for, the proposed rule change 6 National Stock Exchange, Inc. has been renamed
authority.20 NYSE National, Inc. See Securities Exchange Act
and discussed any comments it received
Eduardo A. Aleman, Release No. 79902 (January 30, 2017), 82 FR 9258
on the proposed rule change. The text (February 3, 2017).
Assistant Secretary. of those statements may be examined at 7 15 U.S.C. 78k–1.
[FR Doc. 2017–11358 Filed 5–31–17; 8:45 am] the places specified in Item IV below. 8 17 CFR 242.608.
BILLING CODE 8011–01–P The Exchange has prepared summaries, 9 See Letter from the Participants to Brent J.
set forth in sections A, B, and C below, Fields, Secretary, Commission, dated September 30,
2014; and Letter from Participants to Brent J. Fields,
Secretary, Commission, dated February 27, 2015.
mstockstill on DSK30JT082PROD with NOTICES
1 15 U.S.C. 78s(b)(1). On December 24, 2015, the Participants submitted
2 15 U.S.C. 78a. an amendment to the CAT NMS Plan. See Letter
3 17 CFR 240.19b–4. from Participants to Brent J. Fields, Secretary,
4 Unless otherwise specified, capitalized terms Commission, dated December 23, 2015.
10 Securities Exchange Act Release No. 77724
used in this rule filing are defined as set forth
herein or in the Consolidated Audit Trail Funding (April 27, 2016), 81 FR 30614 (May 17, 2016).
Fees section of the Exchange’s Price List, the 11 Securities Exchange Act Release No. 79318
Exchange’s CAT Compliance Rule Series or in the (November 15, 2016), 81 FR 84696 (November 23,
20 17 CFR 200.30–3(a)(12). CAT NMS Plan. 2016) (‘‘Approval Order’’).
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Document Created: 2017-06-01 03:05:04
Document Modified: 2017-06-01 03:05:04
| 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 25379 |
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