82 FR 25385 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 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)

Page Range		25385-25389
FR Document		2017-11374
Federal Register, Volume 82 Issue 104 (Thursday, June 1, 2017)
[Federal Register Volume 82, Number 104 (Thursday, June 1, 2017)]
[Notices]
[Pages 25385-25389]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-11374]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80798; File No. SR-C2-2017-018]


Self-Regulatory Organizations; C2 Options Exchange, Incorporated; 
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, C2 Options Exchange, Incorporated (the 
``Exchange'' or ``C2'') filed with the Securities and Exchange 
Commission (the ``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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes 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.
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    \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.
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    The text of the proposed rule change is available on the Exchange's 
Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), 
at the Exchange's Office of the Secretary, 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 aspects 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 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

[[Page 25386]]

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\
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    \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.
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    After conducting its analysis of its rules in accordance with the 
CAT NMS Plan, the Exchange determined C2 Rule 8.7(b) and Chicago Board 
Options Exchange, Incorporated (``CBOE'') Rule 15.7 \14\ 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.
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    \14\ Rule 15.7 is incorporated by reference to CBOE Rule 15.7. 
See C2 Chapter 15. CBOE, an exchange affiliate of C2, submitted rule 
filing SR-CBOE-2017-041 on the same date as this rule filing, which 
updates CBOE Rule 15.7 in accordance with the CAT NMS Plan. This 
rule filing describes the proposed rule change in the CBOE rule 
filing.
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    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 8.7(b) \15\ requires Market-Makers, upon request of the 
Exchange and in the prescribed form, report to the Exchange every order 
entered by the Market-Maker for the purchase or sale of (i) a security 
underlying options traded on the Exchange, or (ii) 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 8.7(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 
8.7(b). The proposed rule change also makes a conforming change to the 
rule name.
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    \15\ The Exchange recently submitted a rule filing to amend Rule 
8.7(b), which was filed for immediate effectiveness. See SR-C2-2017-
019. This proposed rule change reflects the amended rule text in 
that filing.
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(2) EBS
    CBOE Rule 15.7 (incorporated by reference) 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 15.7 requires a Trading Permit Holder to submit the trade data 
elements specified in the Rule in such automated format as may be 
prescribed by the Exchange from time to time, in regard to such 
transaction or transactions that are the subject of a particular 
request for information made by the Exchange. The Rule sets forth in 
paragraphs (a) and (b) the data elements required if the transaction 
was a proprietary transaction or if it was effected for a customer 
account, respectively. Paragraph (c) provides a Trading Permit Holder 
must submit such other information as may from time to time be 
required. Paragraph (d) permits the Exchange to grant exceptions from 
these requirements in such cases and for such time periods as it deems 
appropriate.
    CBOE proposes (in a separate rule filing, as described above) to 
amend CBOE Rule 15.7 to state it will request information under the 
Rule only if the information is not available in the CAT because, for 
example, the transactions 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 15.7 if and only if the 
information is not otherwise available through the CAT.\16\
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    \16\ The CBOE proposed rule change also capitalizes the first 
word of paragraph (a).
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    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 15.7 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 15.7 cannot be completely eliminated 
immediately upon the CAT achieving the appropriate thresholds because 
Exchange staff may still need to request information pursuant to Rule 
15.7 for trading activity occurring before a member was reporting to 
the CAT.\17\ In addition, Rule 15.7 applies to information regarding 
transactions involving securities that 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

[[Page 25387]]

those transactions are captured in the CAT.
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    \17\ 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.
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(3) Other Reports
    Various other C2 Rules require Trading Permit Holders to report 
information to the Exchange upon request.\18\ 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 Trading Permit Holders 
begin reporting to the CAT and accuracy and reliability standards are 
met.
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    \18\ See, e.g., CBOE Rule 17.2, Interpretation and Policy .04 
(incorporated by reference).
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(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.\19\ 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.
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    \19\ Id. [sic]
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    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.'' \20\ 
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.
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    \20\ Id.
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    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.'' \21\ 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.
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    \21\ Id.
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    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.'' \22\ 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.
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    \22\ Id.
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    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).\23\ 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'').
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    \23\ 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.
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    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 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.

[[Page 25388]]

    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,\24\ 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.'' \25\ 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.
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    \24\ 15 U.S.C. 78f(b)(5).
    \25\ Approval Order at 84697.
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    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 Trading 
Permit Holders, 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 \26\ 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.
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    \26\ 15 U.S.C. 78f(b)(8).
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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.\27\ 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.'' \28\ 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.\29\ 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.'' \30\
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    \27\ 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.
    \28\ FIF Letter at 2.
    \29\ FIF Letter at 2.
    \30\ SIFMA Letter at 2.
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    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.

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 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.

[[Page 25389]]

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-C2-2017-018 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-C2-2017-018. 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-C2-2017-018 and should be 
submitted on or before June 22, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\31\
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    \31\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11374 Filed 5-31-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices 25385

arguments concerning the foregoing, SECURITIES AND EXCHANGE II. Self-Regulatory Organization’s
including whether the proposed rule COMMISSION Statement of the Purpose of, and
change is consistent with the Act. Statutory Basis for, the Proposed Rule
Comments may be submitted by any of [Release No. 34–80798; File No. SR–C2–
Change
the following methods: 2017–018] In its filing with the Commission, the
Electronic Comments Exchange included statements
Self-Regulatory Organizations; C2 concerning the purpose of and basis for
• Use the Commission’s Internet Options Exchange, Incorporated; the proposed rule change and discussed
comment form (http://www.sec.gov/ Notice of Filing of Proposed Rule any comments it received on the
rules/sro.shtml); or Change To Eliminate Requirements proposed rule change. The text of these
• Send an email to rule-comments@ That Will Be Duplicative of CAT statements may be examined at the
sec.gov. Please include File Number SR– places specified in Item IV below. The
NYSE–2017–24 on the subject line. May 26, 2017. Exchange has prepared summaries, set
Pursuant to Section 19(b)(1) of the forth in sections A, B, and C below, of
Paper Comments
Securities Exchange Act of 1934 (the the most significant aspects of such
• Send paper comments in triplicate ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 statements.
to Secretary, Securities and Exchange notice is hereby given that on May 15, A. Self-Regulatory Organization’s
Commission, 100 F Street NE., 2017, C2 Options Exchange, Statement of the Purpose of, and
Washington, DC 20549–1090. Statutory Basis for, the Proposed Rule
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
All submissions should refer to File filed with the Securities and Exchange Change
Number SR–NYSE–2017–24. This file Commission (the ‘‘Commission’’) the 1. Purpose
number should be included on the proposed rule change as described in
subject line if email is used. To help the Items I, II, and III below, which Items Bats BYX Exchange, Inc., Bats BZX
Commission process and review your Exchange, Inc., Bats EDGA Exchange,
have been prepared by the Exchange.
comments more efficiently, please use Inc., Bats EDGX Exchange, Inc., BOX
The Commission is publishing this
only one method. The Commission will Options Exchange LLC, C2 Options
notice to solicit comments on the Exchange, Incorporated, Chicago Board
post all comments on the Commission’s proposed rule change from interested
Internet Web site (http://www.sec.gov/ Options Exchange, Incorporated,
persons. Chicago Stock Exchange, Inc., Financial
rules/sro.shtml). Copies of the
submission, all subsequent I. Self-Regulatory Organization’s Industry Regulatory Authority, Inc.
amendments, all written statements Statement of the Terms of Substance of (‘‘FINRA’’), Investors’ Exchange LLC,
with respect to the proposed rule the Proposed Rule Change Miami International Securities
change that are filed with the Exchange, LLC, MIAX PEARL, LLC,
Commission, and all written The Exchange proposes to modify NASDAQ BX, Inc., Nasdaq GEMX, LLC,
communications relating to the requirements for the collection of Nasdaq ISE, LLC, Nasdaq MRX, LLC,4
proposed rule change between the information that is duplicative of NASDAQ PHLX LLC, The NASDAQ
Commission and any person, other than information intended to be collected for Stock Market LLC, New York Stock
those that may be withheld from the the consolidated audit trail (‘‘CAT’’) Exchange LLC, NYSE MKT LLC, NYSE
public in accordance with the adopted pursuant to the National Arca, Inc. and NYSE National, Inc.5
provisions of 5 U.S.C. 552, will be Market System Plan Governing the (collectively, the ‘‘Participants’’) filed
available for Web site viewing and with the Commission, pursuant to
Consolidated Audit Trail (the ‘‘CAT
printing in the Commission’s Public Section 11A of the Exchange Act 6 and
NMS Plan’’ or ‘‘Plan’’).3 The Exchange
Reference Room, 100 F Street NE., Rule 608 of Regulation NMS
will announce the implementation date
Washington, DC 20549, on official thereunder,7 the CAT NMS Plan.8 The
of the proposed rule change and Participants filed the Plan to comply
business days between the hours of effective date of the retirement of any
10:00 a.m. and 3:00 p.m. Copies of the with Rule 613 of Regulation NMS under
related systems by Regulatory Circular the Exchange Act. The Plan was
filing also will be available for that will be published once the options
inspection and copying at the principal published for comment in the Federal
exchanges determine the thresholds for
office of the Exchange. All comments accuracy and reliability described below 4 ISE Gemini, LLC, ISE Mercury, LLC and
received will be posted without change;
have been met and that the Plan International Securities Exchange, LLC have been
the Commission does not edit personal renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
Processor for CAT is sufficiently
identifying information from and Nasdaq ISE, LLC, respectively. See Securities
submissions. You should submit only meeting all of its obligations under the Exchange Act Rel. No. 80248 (Mar. 15, 2017), 82 FR
information that you wish to make CAT NMS Plan. 14547 (Mar. 21, 2017); Securities Exchange Act Rel.
No. 80326 (Mar. 29, 2017), 82 FR 16460 (Apr. 4,
available publicly. All submissions The text of the proposed rule change 2017); and Securities Exchange Act Rel. No. 80325
should refer to File Number SR–NYSE– is available on the Exchange’s Web site (Mar. 29, 2017), 82 FR 16445 (Apr. 4, 2017).
2017–24, and should be submitted on or (http://www.cboe.com/AboutCBOE/ 5 National Stock Exchange, Inc. has been renamed

before June 22, 2017. CBOELegalRegulatoryHome.aspx), at NYSE National, Inc. See Securities Exchange Act
Rel. No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb. 3,
For the Commission, by the Division of the Exchange’s Office of the Secretary, 2017).
Trading and Markets, pursuant to delegated and at the Commission’s Public 6 15 U.S.C. 78k–1.
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authority.19 Reference Room. 7 17 CFR 242.608.
8 See Letter from the Participants to Brent J.
Eduardo A. Aleman,
Fields, Secretary, Commission, dated September 30,
Assistant Secretary. 1 15U.S.C. 78s(b)(1). 2014; and Letter from Participants to Brent J. Fields,
2 17CFR 240.19b–4.
[FR Doc. 2017–11356 Filed 5–31–17; 8:45 am] Secretary, Commission, dated February 27, 2015.
3 Unless otherwise specified, capitalized terms
BILLING CODE 8011–01–P
On December 24, 2015, the Participants submitted
used in this rule filing are defined as set forth an amendment to the CAT NMS Plan. See Letter
herein, or in the CAT Compliance Rule Series or in from Participants to Brent J. Fields, Secretary,
19 17 CFR 200.30–3(a)(12). the CAT NMS Plan. Commission, dated December 23, 2015.

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Register on May 17, 2016,9 and orders, quotes and transactions. The may be prescribed by the Exchange from
approved by the Commission, as Participants have provided COATS time to time, in regard to such
modified, on November 15, 2016.10 The technical specifications to the Plan transaction or transactions that are the
Plan is designed to create, implement Processor for the CAT for use in subject of a particular request for
and maintain a CAT that would capture developing the Technical Specifications information made by the Exchange. The
customer and order event information for the CAT, and the Participants are Rule sets forth in paragraphs (a) and (b)
for orders in NMS Securities and OTC working with the Plan Processor to the data elements required if the
Equity Securities, across all markets, include the necessary COATS data transaction was a proprietary
from the time of order inception through elements in the CAT Technical transaction or if it was effected for a
routing, cancellation, modification, or Specifications. Accordingly, although customer account, respectively.
execution in a single consolidated data the Technical Specifications for the Paragraph (c) provides a Trading Permit
source. Pursuant to Appendix C of the CAT have not yet been finalized, the Holder must submit such other
CAT NMS Plan, each Participant is Exchange and the other options information as may from time to time be
required to conduct analyses of which exchanges propose to eliminate COATS required. Paragraph (d) permits the
of its existing trade and order data rules in accordance with the proposed Exchange to grant exceptions from these
and systems require the collection of timeline discussed below. The Exchange requirements in such cases and for such
information that is duplicative of notes that it does not have any specific time periods as it deems appropriate.
information collected for the CAT.11 In rules or requirements related to COATS CBOE proposes (in a separate rule
addition, among other things, Section but refers to its retirement below in an filing, as described above) to amend
C.9 of Appendix C to the Plan, as effort to provide transparency. CBOE Rule 15.7 to state it will request
modified by the Commission, requires information under the Rule only if the
(1) Market Maker Equity Order Reports
each Participant to ‘‘file with the SEC information is not available in the CAT
the relevant rule change filing to Rule 8.7(b) 15 requires Market-Makers, because, for example, the transactions in
eliminate or modify its duplicative rules upon request of the Exchange and in the question occurred before the firm was
within six (6) months of the SEC’s prescribed form, report to the Exchange reporting information to the CAT or
approval of the CAT NMS Plan.’’ 12 The every order entered by the Market- involved securities that are not
Plan notes that ‘‘the elimination of such Maker for the purchase or sale of (i) a reportable to the CAT. In essence, under
rules and the retirement of such systems security underlying options traded on the proposed rule change, the Exchange
[will] be effective at such time as CAT the Exchange, or (ii) a security will make requests under Rule 15.7 if
Data meets minimum standards of convertible into or exchangeable for and only if the information is not
accuracy and reliability.’’ 13 such underlying security, as well as otherwise available through the CAT.16
After conducting its analysis of its opening and closing positions in all Once broker-dealer reporting to the
rules in accordance with the CAT NMS such securities held in each account CAT has begun, the CAT will contain
Plan, the Exchange determined C2 Rule reported pursuant to Rule 8.7(a). The the data the Participants would
8.7(b) and Chicago Board Options report pertaining to orders must include otherwise have requested via the EBS
Exchange, Incorporated (‘‘CBOE’’) Rule the terms of each order, identification of system for purposes of NMS Securities
15.7 14 require the reporting of the brokerage firms through which the and OTC Equity Securities.
information intended to be collected by orders were entered, the times of entry Consequently, the Exchange will not
the CAT. Therefore, the Exchange or cancellation, the times report of need to use the EBS system or request
believes those provisions will no longer execution were received and, if all or information pursuant to Rule 15.7 for
be necessary once the CAT is part of the order was executed, the NMS Securities or OTC Equity
operational and proposes to modify quantity and execution price. CAT will Securities for time periods after CAT
those Rules as described below. require Market-Makers to report order reporting has begun if the appropriate
Additionally, the Exchange describes information for such securities. accuracy and reliability thresholds are
below additional reporting requirements Therefore, this rule provision as it achieved, including an acceptable
that it may reduce for which no rule relates to order reports is duplicative of accuracy rate for customer and account
CAT requirements, and the Exchange information. However, Rule 15.7 cannot
changes are necessary. These changes
proposes to delete it. CAT does not be completely eliminated immediately
will be implemented in accordance with
require reporting of positions, so the upon the CAT achieving the appropriate
the timeline described below.
Initially, the Exchange notes that Exchange will maintain the position thresholds because Exchange staff may
options exchanges, including the reporting requirement in Rule 8.7(b). still need to request information
Exchange, utilize consolidated options The proposed rule change also makes a pursuant to Rule 15.7 for trading
audit trail system (‘‘COATS’’) to collect conforming change to the rule name. activity occurring before a member was
and review data regarding options (2) EBS reporting to the CAT.17 In addition, Rule
CBOE Rule 15.7 (incorporated by 15.7 applies to information regarding
9 Securities Exchange Act Rel. No. 77724 (Apr.
reference) is the Exchange’s rule transactions involving securities that
27, 2016), 81 FR 30614 (May 17, 2016). will not be reportable to the CAT, such
10 Securities Exchange Act Rel. No. 79318 (Nov. regarding the automated submission of
15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘Approval specific trading data to the Exchange as fixed-income securities; thus, the rule
Order’’). upon request using the Electronic Blue must remain in effect with respect to
11 Appendix C of CAT NMS Plan, Approval Order
Sheet (‘‘EBS’’) system. Rule 15.7 those transactions indefinitely or until
at 85010.
requires a Trading Permit Holder to
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12 Id. 16 The CBOE proposed rule change also
13 Id.
submit the trade data elements specified capitalizes the first word of paragraph (a).
14 Rule 15.7 is incorporated by reference to CBOE in the Rule in such automated format as 17 Firms are required to maintain the trade

Rule 15.7. See C2 Chapter 15. CBOE, an exchange information for pre-CAT transactions in equities
affiliate of C2, submitted rule filing SR–CBOE– 15 The Exchange recently submitted a rule filing and options pursuant to applicable rules, such as
2017–041 on the same date as this rule filing, which to amend Rule 8.7(b), which was filed for books and records retention requirements, for the
updates CBOE Rule 15.7 in accordance with the immediate effectiveness. See SR–C2–2017–019. relevant time period, which is generally three or six
CAT NMS Plan. This rule filing describes the This proposed rule change reflects the amended years depending upon the record. See 17 CFR
proposed rule change in the CBOE rule filing. rule text in that filing. 240.17a–3(a), 240.17a–4.

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those transactions are captured in the options data to the CAT by Small the CAT Data should meet specific
CAT. Industry Members could expedite the quantitative error rates, as well as
retirement of COATS, the Exchange certain qualitative requirements.
(3) Other Reports The Exchange believes (and the other
believes that it premature [sic] to
Various other C2 Rules require consider such a change and that options exchanges with respect to
Trading Permit Holders to report additional analysis would be necessary COATS and EBS) believe that, before
information to the Exchange upon to determine whether such early reporting requirements may be modified
request.18 While the Exchange believes reporting by Small Industry Members or eliminated, as applicable, and related
it is necessary to retain these Rules to would be feasible. systems may be retired, the CAT would
ensure it has access to the necessary The CAT NMS Plan requires that this need to achieve a sustained error rate for
data to perform its regulatory duties and rule filing address ‘‘whether individual a period of at least 180 days of 5% or
meet its surveillance obligations, it Industry Members can be exempted lower measured on a pre-correction or
expects it will need to make fewer from reporting to duplicative systems as-submitted basis, and 2% or lower on
information requests pursuant to these once their CAT reporting meets a post-correction basis (measured at
Rule once Trading Permit Holders begin specified accuracy and reliability T+5).23 The Exchange proposes to
reporting to the CAT and accuracy and standards, including, but not limited to, measure the 5% pre-correction and 2%
reliability standards are met. ways in which establishing cross-system post-correction thresholds by averaging
regulatory functionality or integrating the error rate across the period, not
(4) Timeline for Elimination of data from existing systems and the CAT
Duplicative Rules require a 5% pre-correction and 2%
would facilitate such Individual post-correction maximum each day for
The CAT NMS Plan states that the Industry Member exemptions.’’ 21 The 180 consecutive days. The Exchange
elimination of rules that are duplicative Exchange believes that a single cut-over believes that measuring each of the
of the requirements of the CAT and the from the reporting requirements thresholds over the course of 180 days
retirement of the related systems should described above to CAT is highly will ensure that the CAT consistently
be effective at such time as CAT Data preferable to a firm-by-firm approach meets minimum accuracy and reliability
meets minimum standards of accuracy and is not proposing to exempt thresholds while also ensuring that
and reliability.19 As discussed in more members from such reporting single-day measurements do not unduly
detail below, the Exchange believes the requirements on a firm-by-firm basis. affect the overall measurements. The
Rule provisions and related systems The Exchange believes that providing Exchange proposes to measure the
described above may be retired at a date such individual exemptions to Industry appropriate error rates in the aggregate,
after all Industry Members are reporting Members would be inefficient, more rather than firm-by-firm. In addition,
to the CAT when the proposed error rate costly, and less reliable than the single with respect to COATS, the Exchange
thresholds have been met, and the cut-over. Providing individual proposes to measure the error rates for
Exchange has determined that its usage exemptions would require the options options only, not equity securities, as
of the CAT Data has not revealed exchanges to create, for a brief only options are subject to COATS. The
material issues that have not been temporary period, a cross-system 2% and 5% error rates are in line with
corrected, confirmed that the CAT regulatory function and to integrate data the proposed retirement threshold for
includes all data necessary to allow the from reports received pursuant to the FINRA’s Order Audit Trail System
Exchange to continue to meet its above requirements and the CAT to (‘‘OATS’’).
surveillance obligations, and confirmed avoid creating any regulatory gaps as a In addition to these minimum error
that the Plan Processor is sufficiently result of such exemptions. Such a rates before reporting requirements may
meeting all of its obligations under the function would be costly to create and be modified or eliminated, as
CAT NMS Plan. would give rise to a greater likelihood applicable, and related systems may be
The Exchange believes the proposed of data errors or other issues. Given the retired, the Exchange believes that
rule changes should not be effective limited time in which such exemptions during the minimum 180-day period
until all Participants and Industry would be necessary, the Exchange does during which the thresholds are
Members that report data pursuant to not believe that such exemptions would calculated, the Exchange’s use of the
the Rules described above are reporting be an appropriate use of limited data in the CAT must confirm that (i)
comparable data to the CAT. In this resources. usage over that time period has not
way, the Exchange will continue to have The CAT NMS Plan also requires that
revealed material issues that have not
access to the necessary data to perform a rule filing to eliminate a duplicative
been corrected, (ii) the CAT includes all
its regulatory duties. rule to provide ‘‘specific accuracy and
data necessary to allow the Exchange to
The CAT NMS Plan requires that a reliability standards that will determine
continue to meet its surveillance
rule filing to eliminate a duplicative when duplicative systems will be
obligations, and (iii) the Plan Processor
rule address whether ‘‘the availability of retired, including, but not limited to,
is sufficiently meeting all of its
certain data from Small Industry whether the attainment of a certain
obligations under the CAT NMS Plan.
Members two years after the Effective Error Rate should determine when a
The Exchange believes this time period
Date would facilitate a more expeditious system duplicative of the CAT can be
to use the CAT Data is necessary to
retirement of duplicative systems.’’ 20 retired.’’ 22 The Exchange believes that it
reveal any errors that may manifest
The Exchange believes COATS should is critical that the CAT Data be
themselves only after surveillance
not be retired until all Participants and sufficiently accurate and reliable for the
patterns and other queries have been
Exchange to perform the regulatory
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Industry Members that report data to run and to confirm that the Plan
COATS are reporting comparable data to functions that it now performs using the
Processor is meeting its obligations and
the CAT. While the early submission of information it receives pursuant to the
performing its functions adequately.
reporting requirements described above.
18 See, e.g., CBOE Rule 17.2, Interpretation and Accordingly, the Exchange believes that 23 The Plan requires that the Plan Processor must
Policy .04 (incorporated by reference). ensure that regulators have access to corrected and
19 Id. [sic] 21 Id.
linked order and Customer data by 8:00 a.m.
20 Id. 22 Id. Eastern Time on T+5. See CAT NMS Plan, at C–15.

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25388 Federal Register / Vol. 82, No. 104 / Thursday, June 1, 2017 / Notices

If the Commission approves the statutory obligation to protect investors addition, FIF further recommended that,
proposed rule change, the Exchange will and the public interest by ensuring its once a CAT Reporter achieved
announce the date for modification or surveillance of market activity remains satisfactory reporting data quality, the
elimination, as applicable, of reporting accurate and effective while also CAT Reporter should be exempt from
requirements and retirement of related establishing a reasonable timeframe for reporting to any duplicative reporting
systems and the implementation date of elimination or modification of its rules systems. FIF believed that these
the proposed rule change via Regulatory that will be rendered duplicative after recommendations ‘‘would serve both an
Circular that will be published once the implementation of the CAT. underlying regulatory objective of more
Exchange (and other options exchanges immediate and accurate access to data
B. Self-Regulatory Organization’s
with respect to COATS and EBS) as well as an industry objective of
Statement on Burden on Competition
determines that the thresholds for reduced costs and burdens of regulatory
accuracy and reliability described above Section 6(b)(8) of the Exchange Act 26
oversight.’’ 28 In its comments about
have been met and that the Plan requires that Exchange Rules not impose
EBS specifically, FIF stated that the
Processor is sufficiently meeting all of any burden on competition that is not
necessary or appropriate. The Exchange retirement of the EBS requirements
its obligations under the CAT NMS should be a high priority, and that the
Plan. does not believe that the proposed rule
change will result in any burden on CAT should be designed to include the
2. Statutory Basis competition that is not necessary or requisite data elements to permit the
The Exchange believes that the appropriate in furtherance of the rapid retirement of EBS.29 Similarly,
proposed rule change is consistent with purposes of the Exchange Act. The SIFMA stated that ‘‘the establishment of
the provisions of Section 6(b)(5) of the Exchange notes that the proposed rule the CAT must be accompanied by the
Exchange Act,24 which requires, among change implements the requirements of prompt elimination of duplicative
other things, that Exchange Rules must the CAT NMS Plan approved by the systems,’’ and ‘‘recommend[ed] that the
be designed to prevent fraudulent and Commission regarding the elimination initial technical specifications be
manipulative acts and practices, to of rules and systems that are duplicative designed to facilitate the immediate
promote just and equitable principles of the CAT, and is designed to assist the retirement of . . . duplicative reporting
trade, and, in general, to protect Exchange in meeting its regulatory systems.’’ 30
investors and the public interest, and obligations pursuant to the Plan. As discussed above, the Exchange
not designed to permit unfair Similarly, all exchanges and FINRA are agrees with the commenters that the
discrimination between customers, proposing the elimination of reporting reporting requirements proposed to be
issuers, brokers and dealer. The requirements related to COATS and modified or eliminated should be
Exchange believes that this proposal is EBS, as well as other duplicative rules, replaced by the CAT reporting
consistent with the Exchange Act to implement the requirements of the requirements as soon as accurate and
because it fulfills the obligation in the CAT NMS Plan. Therefore, this is not a reliable CAT Data is available. To this
CAT NMS Plan for the Exchange to competitive rule filing and, therefore, it
end, the Exchange anticipates that the
submit a proposed rule change to does not raise competition issues
CAT will be designed to collect the data
eliminate or modify duplicative rules. In between and among the self-regulatory
necessary to permit the modification or
approving the Plan, the SEC noted that organizations and/or their members.
the Plan ‘‘is necessary and appropriate elimination, as applicable, of these
C. Self-Regulatory Organization’s reporting requirements and the
in the public interest, for the protection
Statement on Comments on the retirement of related systems. However,
of investors and the maintenance of fair
Proposed Rule Change Received From as discussed above, the Exchange
and orderly markets, to remove
Members, Participants, or Others disagrees with the recommendation to
impediments to, and perfect the
mechanism of a national market system, Although written comments on the provide individual exemptions to those
or is otherwise in furtherance of the proposed rule change were not solicited, CAT Reporters who obtain satisfactory
purposes of the Act.’’ 25 As this proposal the Exchange received comments from data reporting quality.
implements the Plan, the Exchange two commenters, the Financial
III. Date of Effectiveness of the
believes that this proposal furthers the Information Forum (‘‘FIF’’) and the
Securities Industry and Financial Proposed Rule Change and Timing for
objectives of the Plan, as identified by Commission Action
the SEC, and is therefore consistent with Markets Association (‘‘SIFMA’’),
the Exchange Act. regarding the retirement of systems Within 45 days of the date of
Moreover, the purpose of the related to the CAT.27 In its comment publication of this notice in the Federal
proposed rule change is to amend rules letters, with regard to the retirement of Register or within such longer period
that require the submission of duplicative systems more generally, FIF up to 90 days (i) as the Commission may
duplicative data to the Exchange. The recommended that the Participants designate if it finds such longer period
elimination of such duplicative continue the effort to incorporate to be appropriate and publishes its
requirements will reduce unnecessary current reporting obligations into the
reasons for so finding or (ii) as to which
costs and other compliance burdens for CAT in order to replace existing
the Exchange consents, the Commission
the Exchange and its Trading Permit reportable systems with the CAT. In
will:
Holders, and therefore, will enhance the
efficiency of the securities markets. 26 15 U.S.C. 78f(b)(8). A. By order approve or disapprove
Furthermore, the Exchange believes that
27 Letter from William H. Hebert, FIF, to such proposed rule change, or
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Participants re: Milestone for Participants’ rule
the approach set forth in the proposed change filings to eliminate/modify duplicative rules B. institute proceedings to determine
rule change strikes the appropriate (Apr. 12, 2017) (‘‘FIF Letter’’); Letter from William whether the proposed rule change
balance between ensuring that the H. Hebert, FIF, to Brent J. Fields, SEC re: Milestone should be disapproved.
for Participants’ rule change filings to eliminate/
Exchange is able to continue to fulfill its modify duplicative rules (Apr. 12, 2017); and Letter
28 FIFLetter at 2.
from Kenneth E. Bentsen, Jr., SIFMA, to
24 15U.S.C. 78f(b)(5). 29 FIFLetter at 2.
Participants re: Selection of Thesys as CAT
25 Approval Order at 84697. Processor (Apr. 4, 2017) (‘‘SIFMA Letter’’) at 2. 30 SIFMA Letter at 2.

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Document Created: 2017-06-01 03:05:14
Document Modified: 2017-06-01 03:05:14
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 25385