82 FR 25635 - Self-Regulatory Organizations; New York Stock Exchange LLC; 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 105 (June 2, 2017)
Federal Register Volume 82, Issue 105 (June 2, 2017)
| Page Range | 25635-25639 | |
| FR Document | 2017-11400 |
[Federal Register Volume 82, Number 105 (Friday, June 2, 2017)] [Notices] [Pages 25635-25639] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-11400] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80799; File No. SR-NYSE-2017-23] Self-Regulatory Organizations; New York Stock Exchange LLC; 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 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on May 22, 2017, New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to delete the Order Audit Trail System (``OATS'') rules in the Rule 7400 Series and amend Rule 8211 governing submission of Electronic Blue Sheet trading data (``EBS'') as these Rules provide for the collection of information that is duplicative of the data collection requirements of the CAT once the Financial Industry Regulatory Authority (``FINRA'') publishes a notice announcing the date that it will retire its OATS and EBS rules. 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. 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 Background 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., FINRA, Investors' Exchange LLC, Miami International Securities Exchange, LLC, MIAX PEARL, LLC, NASDAQ BX, Inc., Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Nasdaq MRX, LLC,\3\ NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, the Exchange, NYSE MKT LLC, NYSE Arca, Inc. and NYSE National, Inc.\4\ (collectively, the ``Participants'') filed with the Commission, pursuant to Section 11A of the Exchange Act \5\ and Rule 608 of Regulation NMS thereunder,\6\ the CAT NMS Plan.\7\ The Participants filed the Plan to comply with Rule 613 of Regulation NMS under the Exchange Act.\8\ The Plan was published for comment in the Federal Register on May 17, 2016,\9\ and approved by the Commission, as modified, on November 15, 2016.\10\ On March 21, 2017, the Commission approved \11\ the Exchange's new Rule 6800 Series to implement provisions of the CAT NMS Plan that are applicable to Exchange member organizations.\12\ --------------------------------------------------------------------------- \3\ 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 No. 80248 (March 15, 2017), 82 FR 14547 (March 21, 2017) (SR-ISEGemini-2017-13); Securities Exchange Act Release No. 80326 (March 29, 2017), 82 FR 16460 (April 4, 2017) (SR-ISEMercury-2017- 05); and Securities Exchange Act Release No. 80325 (March 29, 2017), 82 FR 16445 (April 4, 2017) (SR-ISE-2017-25). \4\ 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) (SR-NSX-2016-16). \5\ 15 U.S.C. 78k-1. \6\ 17 CFR 242.608. \7\ 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. \8\ 17 CFR 242.613. \9\ Securities Exchange Act Release No. 77724 (April 27, 2016), 81 FR 30614 (May 17, 2016) (File No. 4-698). \10\ Securities Exchange Act Release No. 79318 (Nov. 15, 2016), 81 FR 84696 (November 23, 2016) (File No. 4-698) (``Approval Order''). \11\ See Securities Exchange Act Release No. 80256 (March 15, 2017), 82 FR 14526 (March 21, 2017) (SR-NYSE-2017-01) (Order Approving Proposed Rule Changes to Adopt Consolidated Audit Trail Compliance Rules). \12\ The Rule 6800 Series utilizes the term ``Industry Member,'' which applies to the Exchange's member organizations. The term ``member organization'' means a ``registered broker or dealer (unless exempt pursuant to the Act) that is a member of 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.'' See Rule 2(b)(i). The term ``member organization'' also 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(b)(ii). --------------------------------------------------------------------------- [[Page 25636]] 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.\13\ 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.'' \14\ 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.'' \15\ --------------------------------------------------------------------------- \13\ Appendix C of CAT NMS Plan, Approval Order at 85010. \14\ Id. \15\ Id. --------------------------------------------------------------------------- After conducting its analysis of its rules in accordance with the CAT NMS Plan, the Exchange has determined that the information collected pursuant to the OATS and EBS rules is intended to be collected by CAT. Therefore, the Exchange believes that the Rule 7400 Series will no longer be necessary once FINRA publishes notice announcing the date it will retire its OATS rules. Similarly, the Exchange believes that it will be necessary to clarify how the Exchange will request EBS data under Rule 8211 after members are reporting to the CAT. Accordingly, the Exchange proposes to amend Rule 8211 to add new Supplementary Material clarifying how the Exchange will request data under these rules after member organizations are reporting to the CAT once FINRA publishes notice announcing the date it will retire its OATS rules. Discussed below is a description of the duplicative rule requirements as well as the timeline for eliminating the duplicative rules. If the Commission approves the proposed rule change, the rule text will be effective; however, the amendments will not be implemented until FINRA publishes a notice announcing the date that it will retire its OATS rules, at which time the Exchange will publish a regulatory notice announcing implementation date of the proposed rule change. As discussed below, FINRA will publish its notice once the CAT achieves certain specific accuracy and reliability standards and FINRA 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 FINRA to continue to meet its surveillance obligations,\16\ and confirmed that the Plan Processor is sufficiently meeting all of its obligations under the CAT NMS Plan. --------------------------------------------------------------------------- \16\ As noted in the Participants' September 23, 2016 response to comment letters on the Plan, the Participants ``worked to keep [the CAT] gap analyses up-to-date by including newly-added data fields in these duplicative systems, such as the new OATS data fields related to the tick size pilot and ATS order book changes, in the gap analyses.'' Letter from Participants to Brent J. Fields, Secretary, Commission, dated September 23, 2016, at 21. The Participants noted that they ``will work with the Plan Processor and the industry to develop detailed Technical Specifications to ensure that by the time Industry Members are required to report to the CAT, the CAT will include all data elements necessary to facilitate the rapid retirement of duplicative systems.'' Id. --------------------------------------------------------------------------- Duplicative OATS Requirements The Rule 7400 Series consists of Rules 7410 through 7470 and sets forth the recording and reporting requirements of the OATS Rules. The OATS Rules require all Exchange member organizations and associated persons to record in electronic form and report to FINRA, on a daily basis, certain information with respect to orders originated, received, transmitted, modified, canceled, or executed by members in all NMS stocks, as that term is defined in Rule 600(b)(47) of Regulation NMS,\17\ traded on the Exchange, including NYSE-listed securities. This information is used by FINRA staff to conduct surveillance and investigations of member firms for violations of FINRA rules and federal securities laws. The Exchange has determined that the requirements of the Rule 7400 Series are duplicative of information available in the CAT and thus will no longer be necessary once the CAT is operational. --------------------------------------------------------------------------- \17\ 17 CFR 242.600(B)(47). --------------------------------------------------------------------------- The Participants have provided OATS 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 OATS data elements in the CAT Technical Specifications. Accordingly, the Exchange proposes to eliminate its OATS Rules in accordance with the proposed timeline discussed below. 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.\18\ As discussed in more detail in its rule filing, FINRA believes that OATS 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 FINRA 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 FINRA 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.\19\ --------------------------------------------------------------------------- \18\ Appendix C of CAT NMS Plan, Approval Order at 85010. \19\ See SR-FINRA-2017-013. --------------------------------------------------------------------------- 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\ FINRA believes that there is no effective way to retire OATS until all current OATS reporters are reporting to the CAT. As discussed in FINRA's filing, FINRA believes that having data from those Small Industry Members currently reporting to OATS available two years after the Effective Date would substantially facilitate a more expeditious retirement of OATS and therefore supports an amendment to the Plan that would require current OATS Reporters that are ``Small Industry Members'' to report two years after the Effective Date (instead of three).\21\ --------------------------------------------------------------------------- \20\ Id. [sic]. \21\ See SR-FINRA-2017-013. FINRA has represented that it intends to work with the other Participants to submit a proposed amendment to the Plan to require Small Industry Members that are OATS Reporters to report two years after the Effective Date. --------------------------------------------------------------------------- The CAT NMS Plan also 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 [[Page 25637]] would facilitate such Individual Industry Member exemptions.'' \22\ --------------------------------------------------------------------------- \22\ Id. [sic]. --------------------------------------------------------------------------- FINRA believes that a single cut-over from OATS to CAT is highly preferable to a firm-by-firm approach and is not proposing to exempt members from the OATS requirements on a firm-by-firm basis. FINRA believes that that the overall accuracy and reliability thresholds for the CAT described above [sic] would need to be met under any conditions before firms could stop reporting to OATS. Moreover, as discussed above [sic], FINRA supports amending the Plan to accelerate the reporting requirements for Small Industry Members that are OATS Reporters to report on the same timeframe as all other OATS Reporters. If such an amendment were approved by the Commission, there would be no need to exempt members from OATS requirements on a firm-by-firm basis.\23\ --------------------------------------------------------------------------- \23\ Id. --------------------------------------------------------------------------- The CAT NMS Plan also requires that a rule filing to eliminate a duplicative rule to provide ``specific accuracy and reliability standards that will determine when duplicative systems will be retired, including, but not limited to, whether the attainment of a certain Error Rate should determine when a system duplicative of the CAT can be retired.'' \24\ As discussed in Section A.3.(b) of Appendix C to the CAT NMS Plan, the Participants established an initial Error Rate, as defined in the Plan, of 5% on initially submitted data (i.e., data as submitted by a CAT Reporter before any required corrections are performed). The Participants noted in the Plan that their expectation was that ``error rates after reprocessing of error corrections will be de minimis.'' \25\ The Participants based this Error Rate on their consideration of ``current and historical OATS Error Rates, the magnitude of new reporting requirements on the CAT Reporters and the fact that many CAT Reporters may have never been obligated to report data to an audit trail.'' \26\ --------------------------------------------------------------------------- \24\ Id. [sic]. \25\ See CAT NMS Plan, Appendix C, Section A.3(b), at n.102. \26\ Id. --------------------------------------------------------------------------- As set forth in its filing, FINRA believes that, when assessing the accuracy and reliability of the data for the purposes of retiring OATS, the error thresholds should be measured in more granular ways and should also include minimum error rates of post-correction data, which represents the data most likely to be used by FINRA to conduct surveillance. To ensure the CAT's accuracy and reliability, FINRA is thus proposing that, before OATS could be retired, the CAT would generally need to achieve a sustained error rate for Industry Member reporting in each of the categories below 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).\27\ FINRA is proposing 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. FINRA 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 for Industry Member reporting while also ensuring that single-day measurements do not unduly affect the overall measurements.\28\ Consequently, FINRA is proposing to use error rates in four categories, measured separately for options and for equities, to assess whether the threshold pre- and post-correction error rates are being met.\29\ --------------------------------------------------------------------------- \27\ 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, Appendix C, Section A.2(a). \28\ See SR-FINRA-2017-013. \29\ The categories are (1) rejection rates and data validations; (2) intra-firm linkages; (3) order linkage rates; and (4) Exchange and TRF/ORF match rates. --------------------------------------------------------------------------- In addition to these minimum error rates before OATS can be retired FINRA believes that during the minimum 180-day period during which the thresholds are calculated, FINRA'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.\30\ --------------------------------------------------------------------------- \30\ See SR-FINRA-2017-013. --------------------------------------------------------------------------- Rule 8211 In addition to the OATS rules, Rule 8211 will also be affected by the implementation of the CAT. Rule 8211 is the Exchange's rule regarding the automated submission of specific trading data to the Exchange upon request (commonly referred to as ``blue sheet'' data) using the EBS system. Once broker-dealer reporting to the CAT has begun, the CAT will contain much of 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 8211 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 8211 cannot be completely eliminated upon the CAT achieving the appropriate thresholds because Exchange staff may still need to request information pursuant to Rule 8211 for trading activity occurring before a member organization \31\ was reporting to the CAT.\32\ In addition, the Rule 8211 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 until those transactions are captured in the CAT. --------------------------------------------------------------------------- \31\ The Rule 6800 Series, the Exchange's Consolidated Audit Trail Compliance rule, utilizes the term ``Industry Member,'' which applies to the Exchange's member organizations. The term ``member organization'' means a ``registered broker or dealer (unless exempt pursuant to the Act) that is a member of 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.'' See Rule 2(b)(i). The term ``member organization'' also 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(b)(ii). \32\ 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. --------------------------------------------------------------------------- The proposed rule change proposes to add new Supplementary Material to the Rule 8211 to clarify how the Exchange will request data under these rules after member organizations are reporting to the CAT. Specifically, the proposed Supplementary Material to the Rule 8211 will note that the Exchange will [[Page 25638]] request information under Rule 8211 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 new Supplementary Material, the Exchange will make requests under these rules if and only if the information is not otherwise available through the CAT. However, as noted above, FINRA believes that the CAT must meet certain minimum accuracy and reliability standards before FINRA could rely on the CAT Data to replace existing regulatory tools, including EBS. Consequently, the proposed Supplementary Material will be implemented only after FINRA publishes its notice after the CAT achieves the thresholds set forth above with respect to OATS and an accuracy rate for customer and account information of 95% for pre- corrected data and 98% for post-correction data. In addition, as discussed above, FINRA can rely on CAT Data to replace EBS requests only after FINRA has determined that its usage of the CAT Data over a 180-day period has not revealed material issues that have not been corrected, confirmed that the CAT includes all data necessary to allow FINRA to continue to meet its surveillance obligations, and confirmed that the CAT Plan Processor is fulfilling its obligations under the CAT NMS Plan. As noted, if the Commission approves the proposed rule change, the Exchange will announce the implementation date of the proposed rule change in a regulatory notice that will be published once FINRA publishes a notice announcing the date that it will retire its EBS rules, which FINRA will do once it concludes 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 Section 6(b) of the Act,\33\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\34\ in particular, because it is designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \33\ 15 U.S.C. 78f(b). \34\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In particular, the Exchange believes that the proposed rule change implements, supports, interprets or clarifies the provisions of the Plan, and is designed to assist the Exchange and its Members in meeting regulatory obligations pursuant to, and milestones established by, the Plan. In approving the Plan, the SEC noted that it ``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.'' \35\ To the extent that this proposal implements, interprets or clarifies the Plan and applies specific requirements to 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. --------------------------------------------------------------------------- \35\ Approval Order, 81 FR at 84697. --------------------------------------------------------------------------- The Exchange also believes that adding a preamble to each current Rule impacted by the Plan would remove impediments to and perfect the mechanism of a free and open market and a national market system by adding clarity and transparency to the Exchange's rules, reducing potential confusion, and making the Exchange's rules easier to navigate and understand. 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 that is not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is not designed to address any competitive issue but rather implement provisions of the CAT NMS Plan, and is designed to assist the Exchange in meeting its regulatory obligations pursuant to the Plan. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were 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 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 Send an email to [email protected]. Please include File Number SR-NYSE-2017-23 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSE-2017-23. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing 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 [[Page 25639]] information that you wish to make available publicly. All submissions should refer to File Number SR-NYSE-2017-23, and should be submitted on or before June 23, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\36\ --------------------------------------------------------------------------- \36\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-11400 Filed 6-1-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 105 / Friday, June 2, 2017 / Notices 25635
records will consist of beneficiary 2017, New York Stock Exchange LLC Nasdaq MRX, LLC,3 NASDAQ PHLX
identifying information such as: Name, (‘‘NYSE’’ or the ‘‘Exchange’’) filed with LLC, The NASDAQ Stock Market LLC,
Social Security Number (SSN), date of the Securities and Exchange the Exchange, NYSE MKT LLC, NYSE
birth, and RRB Claim Number, if Commission (‘‘SEC’’ or ‘‘Commission’’) Arca, Inc. and NYSE National, Inc.4
known. The RRB will then conduct a the proposed rule change as described (collectively, the ‘‘Participants’’) filed
computer match on the state provided in Items I, II, and III below, which Items with the Commission, pursuant to
identifying information. have been prepared by the Exchange. Section 11A of the Exchange Act 5 and
If the matching operation reveals that The Commission is publishing this Rule 608 of Regulation NMS
an individual who received benefits notice to solicit comments on the thereunder,6 the CAT NMS Plan.7 The
under the Railroad Retirement Act also proposed rule change from interested Participants filed the Plan to comply
received benefits from the state for any persons. with Rule 613 of Regulation NMS under
days in the period, the RRB will notify the Exchange Act.8 The Plan was
I. Self-Regulatory Organization’s
the state agency and provide benefit published for comment in the Federal
Statement of the Terms of Substance of
payment and Medicare Entitlement data Register on May 17, 2016,9 and
the Proposed Rule Change approved by the Commission, as
for those matched individuals. The state
agency will then make adjustments, as The Exchange proposes to delete the modified, on November 15, 2016.10 On
necessary by law or regulation for those Order Audit Trail System (‘‘OATS’’) March 21, 2017, the Commission
matched records. rules in the Rule 7400 Series and amend approved 11 the Exchange’s new Rule
Systems of Records: This information Rule 8211 governing submission of 6800 Series to implement provisions of
is covered as a routine disclosure under Electronic Blue Sheet trading data the CAT NMS Plan that are applicable
the Privacy Act system of records RRB– (‘‘EBS’’) as these Rules provide for the to Exchange member organizations.12
20, Health Insurance and collection of information that is
Supplementary Medical Insurance duplicative of the data collection 3 ISE Gemini, LLC, ISE Mercury, LLC and
Enrollment and Premium Payment requirements of the CAT once the International Securities Exchange, LLC have been
renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
System (MEDICARE), or RRB–21, Financial Industry Regulatory Authority and Nasdaq ISE, LLC, respectively. See Securities
Railroad Unemployment and Sickness (‘‘FINRA’’) publishes a notice Exchange Act Release No. 80248 (March 15, 2017),
Insurance Benefit System, which were announcing the date that it will retire its 82 FR 14547 (March 21, 2017) (SR–ISEGemini–
OATS and EBS rules. The proposed rule 2017–13); Securities Exchange Act Release No.
published in the Federal Register on: 80326 (March 29, 2017), 82 FR 16460 (April 4,
RRB–20, September 30, 2014 (79 FR change is available on the Exchange’s 2017) (SR–ISEMercury–2017–05); and Securities
58886), and RRB–21 on May 15, 2015 Web site at www.nyse.com, at the Exchange Act Release No. 80325 (March 29, 2017),
(80 FR 28016). You can also find all principal office of the Exchange, and at 82 FR 16445 (April 4, 2017) (SR–ISE–2017–25).
4 National Stock Exchange, Inc. has been renamed
RRB Privacy Act Systems of Records the Commission’s Public Reference
NYSE National, Inc. See Securities Exchange Act
notices on our public Web site at: Room. Release No. 79902 (January 30, 2017), 82 FR 9258
(http://www.rrb.gov/bis/privacy_act/ II. Self-Regulatory Organization’s (February 3, 2017) (SR–NSX–2016–16).
SORNList.asp). Statement of the Purpose of, and
5 15 U.S.C. 78k–1.
Other information: The notice we are 6 17 CFR 242.608.
Statutory Basis for, the Proposed Rule 7 See Letter from the Participants to Brent J.
giving here is in addition to any
Change Fields, Secretary, Commission, dated September 30,
individual notice. 2014; and Letter from Participants to Brent J. Fields,
We will furnish a copy of this notice In its filing with the Commission, the Secretary, Commission, dated February 27, 2015.
to both Houses of Congress and the self-regulatory organization included On December 24, 2015, the Participants submitted
Office of Management and Budget. statements concerning the purpose of, an amendment to the CAT NMS Plan. See Letter
and basis for, the proposed rule change from Participants to Brent J. Fields, Secretary,
Dated: May 25, 2017. Commission, dated December 23, 2015.
and discussed any comments it received 8 17 CFR 242.613.
By Authority of the Board.
on the proposed rule change. The text 9 Securities Exchange Act Release No. 77724
Martha P. Rico, of those statements may be examined at (April 27, 2016), 81 FR 30614 (May 17, 2016) (File
Secretary to the Board. the places specified in Item IV below. No. 4–698).
[FR Doc. 2017–11414 Filed 6–1–17; 8:45 am] The Exchange has prepared summaries, 10 Securities Exchange Act Release No. 79318
BILLING CODE 7905–01–P set forth in sections A, B, and C below, (Nov. 15, 2016), 81 FR 84696 (November 23, 2016)
(File No. 4–698) (‘‘Approval Order’’).
of the most significant parts of such 11 See Securities Exchange Act Release No. 80256
statements. (March 15, 2017), 82 FR 14526 (March 21, 2017)
SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
(SR–NYSE–2017–01) (Order Approving Proposed
COMMISSION Rule Changes to Adopt Consolidated Audit Trail
Statement of the Purpose of, and the Compliance Rules).
[Release No. 34–80799; File No. SR–NYSE– Statutory Basis for, the Proposed Rule 12 The Rule 6800 Series utilizes the term
2017–23] Change ‘‘Industry Member,’’ which applies to the
Exchange’s member organizations. The term
Self-Regulatory Organizations; New 1. Purpose ‘‘member organization’’ means a ‘‘registered broker
or dealer (unless exempt pursuant to the Act) that
York Stock Exchange LLC; Notice of Background is a member of FINRA or another registered
Filing of Proposed Rule Change To securities exchange. Member organizations that
Bats BYX Exchange, Inc., Bats BZX transact business with public customers or conduct
Eliminate Requirements That Will Be
Exchange, Inc., Bats EDGA Exchange, business on the Floor of the Exchange shall at all
Duplicative of CAT
Inc., Bats EDGX Exchange, Inc., BOX times be members of FINRA. A registered broker or
May 26, 2017. Options Exchange LLC, C2 Options dealer must also be approved by the Exchange and
nlaroche on DSK30NT082PROD with NOTICES
authorized to designate an associated natural
Pursuant to Section 19(b)(1) of the Exchange, Incorporated, Chicago Board person to effect transactions on the floor of the
Securities Exchange Act of 1934 Options Exchange, Incorporated, Exchange or any facility thereof. This term shall
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Chicago Stock Exchange, Inc., FINRA, include a natural person so registered, approved
Investors’ Exchange LLC, Miami and licensed who directly effects transactions on
notice is hereby given that on May 22, the floor of the Exchange or any facility thereof.’’
International Securities Exchange, LLC, See Rule 2(b)(i). The term ‘‘member organization’’
1 15 U.S.C. 78s(b)(1). MIAX PEARL, LLC, NASDAQ BX, Inc., also includes any registered broker or dealer that is
2 17 CFR 240.19b–4. Nasdaq GEMX, LLC, Nasdaq ISE, LLC, Continued
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![25636 Federal Register / Vol. 82, No. 105 / Friday, June 2, 2017 / Notices
The Plan is designed to create, publishes a notice announcing the date Exchange proposes to eliminate its
implement and maintain a CAT that that it will retire its OATS rules, at OATS Rules in accordance with the
would capture customer and order event which time the Exchange will publish a proposed timeline discussed below.
information for orders in NMS regulatory notice announcing
Timeline for Elimination of Duplicative
Securities and OTC Equity Securities, implementation date of the proposed
rule change. As discussed below, FINRA Rules
across all markets, from the time of
order inception through routing, will publish its notice once the CAT The CAT NMS Plan states that the
cancellation, modification, or execution achieves certain specific accuracy and elimination of rules that are duplicative
in a single consolidated data source. reliability standards and FINRA has of the requirements of the CAT and the
Pursuant to Appendix C of the CAT determined that its usage of the CAT retirement of the related systems should
NMS Plan, each Participant is required Data has not revealed material issues be effective at such time as CAT Data
to conduct analyses of which of its that have not been corrected, confirmed meets minimum standards of accuracy
existing trade and order data rules and that the CAT includes all data necessary and reliability.18 As discussed in more
systems require the collection of to allow FINRA to continue to meet its detail in its rule filing, FINRA believes
information that is duplicative of surveillance obligations,16 and that OATS may be retired at a date after
information collected for the CAT.13 In confirmed that the Plan Processor is all Industry Members are reporting to
addition, among other things, Section sufficiently meeting all of its obligations the CAT when the proposed error rate
C.9 of Appendix C to the Plan, as under the CAT NMS Plan. thresholds have been met, and FINRA
modified by the Commission, requires has determined that its usage of the CAT
Duplicative OATS Requirements
each Participant to ‘‘file with the SEC Data has not revealed material issues
the relevant rule change filing to The Rule 7400 Series consists of Rules that have not been corrected, confirmed
eliminate or modify its duplicative rules 7410 through 7470 and sets forth the that the CAT includes all data necessary
within six (6) months of the SEC’s recording and reporting requirements of to allow FINRA to continue to meet its
approval of the CAT NMS Plan.’’ 14 The the OATS Rules. The OATS Rules surveillance obligations, and confirmed
Plan notes that ‘‘the elimination of such require all Exchange member that the Plan Processor is sufficiently
rules and the retirement of such systems organizations and associated persons to meeting all of its obligations under the
[will] be effective at such time as CAT record in electronic form and report to CAT NMS Plan.19
Data meets minimum standards of FINRA, on a daily basis, certain The CAT NMS Plan requires that a
accuracy and reliability.’’ 15 information with respect to orders rule filing to eliminate a duplicative
After conducting its analysis of its originated, received, transmitted, rule address whether ‘‘the availability of
rules in accordance with the CAT NMS modified, canceled, or executed by certain data from Small Industry
Plan, the Exchange has determined that members in all NMS stocks, as that term Members two years after the Effective
the information collected pursuant to is defined in Rule 600(b)(47) of Date would facilitate a more expeditious
the OATS and EBS rules is intended to Regulation NMS,17 traded on the retirement of duplicative systems.’’ 20
be collected by CAT. Therefore, the Exchange, including NYSE-listed FINRA believes that there is no effective
Exchange believes that the Rule 7400 securities. This information is used by way to retire OATS until all current
Series will no longer be necessary once FINRA staff to conduct surveillance and OATS reporters are reporting to the
FINRA publishes notice announcing the investigations of member firms for CAT. As discussed in FINRA’s filing,
date it will retire its OATS rules. violations of FINRA rules and federal FINRA believes that having data from
Similarly, the Exchange believes that it securities laws. The Exchange has those Small Industry Members currently
will be necessary to clarify how the determined that the requirements of the reporting to OATS available two years
Exchange will request EBS data under Rule 7400 Series are duplicative of after the Effective Date would
Rule 8211 after members are reporting information available in the CAT and substantially facilitate a more
to the CAT. Accordingly, the Exchange thus will no longer be necessary once expeditious retirement of OATS and
proposes to amend Rule 8211 to add the CAT is operational. therefore supports an amendment to the
The Participants have provided OATS Plan that would require current OATS
new Supplementary Material clarifying
technical specifications to the Plan Reporters that are ‘‘Small Industry
how the Exchange will request data
Processor for the CAT for use in Members’’ to report two years after the
under these rules after member
developing the Technical Specifications Effective Date (instead of three).21
organizations are reporting to the CAT
for the CAT, and the Participants are The CAT NMS Plan also requires that
once FINRA publishes notice
working with the Plan Processor to this rule filing address ‘‘whether
announcing the date it will retire its
include the necessary OATS data individual Industry Members can be
OATS rules. Discussed below is a
elements in the CAT Technical exempted from reporting to duplicative
description of the duplicative rule
Specifications. Accordingly, the systems once their CAT reporting meets
requirements as well as the timeline for
eliminating the duplicative rules. 16 As noted in the Participants’ September 23,
specified accuracy and reliability
If the Commission approves the 2016 response to comment letters on the Plan, the standards, including, but not limited to,
proposed rule change, the rule text will Participants ‘‘worked to keep [the CAT] gap ways in which establishing cross-system
be effective; however, the amendments analyses up-to-date by including newly-added data regulatory functionality or integrating
will not be implemented until FINRA fields in these duplicative systems, such as the new data from existing systems and the CAT
OATS data fields related to the tick size pilot and
ATS order book changes, in the gap analyses.’’
a member of FINRA or a registered securities Letter from Participants to Brent J. Fields, Secretary,
18 Appendix C of CAT NMS Plan, Approval Order
exchange, consistent with the requirements of at 85010.
nlaroche on DSK30NT082PROD with NOTICES
Commission, dated September 23, 2016, at 21. The
section 2(b)(i) of this Rule, which does not own a Participants noted that they ‘‘will work with the 19 See SR–FINRA–2017–013.
trading license and agrees to be regulated by the Plan Processor and the industry to develop detailed 20 Id. [sic].
Exchange as a member organization and which the Technical Specifications to ensure that by the time 21 See SR–FINRA–2017–013. FINRA has
Exchange has agreed to regulate. See Rule 2(b)(ii). Industry Members are required to report to the CAT, represented that it intends to work with the other
13 Appendix C of CAT NMS Plan, Approval Order
the CAT will include all data elements necessary Participants to submit a proposed amendment to
at 85010. to facilitate the rapid retirement of duplicative the Plan to require Small Industry Members that are
14 Id. systems.’’ Id. OATS Reporters to report two years after the
15 Id. 17 17 CFR 242.600(B)(47). Effective Date.
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![Federal Register / Vol. 82, No. 105 / Friday, June 2, 2017 / Notices 25637
would facilitate such Individual proposing that, before OATS could be request (commonly referred to as ‘‘blue
Industry Member exemptions.’’ 22 retired, the CAT would generally need sheet’’ data) using the EBS system.
FINRA believes that a single cut-over to achieve a sustained error rate for Once broker-dealer reporting to the
from OATS to CAT is highly preferable Industry Member reporting in each of CAT has begun, the CAT will contain
to a firm-by-firm approach and is not the categories below for a period of at much of the data the Participants would
proposing to exempt members from the least 180 days of 5% or lower, measured otherwise have requested via the EBS
OATS requirements on a firm-by-firm on a pre-correction or as-submitted basis system for purposes of NMS Securities
basis. FINRA believes that that the and 2% or lower on a post-correction and OTC Equity Securities.
overall accuracy and reliability basis (measured at T+5).27 FINRA is Consequently, the Exchange will not
thresholds for the CAT described above proposing to measure the 5% pre- need to use the EBS system or request
[sic] would need to be met under any correction and 2% post-correction information pursuant to Rule 8211 for
conditions before firms could stop thresholds by averaging the error rate NMS Securities or OTC Equity
reporting to OATS. Moreover, as across the period, not require a 5% pre- Securities for time periods after CAT
discussed above [sic], FINRA supports correction and 2% post-correction reporting has begun if the appropriate
amending the Plan to accelerate the maximum each day for 180 consecutive accuracy and reliability thresholds are
reporting requirements for Small days. FINRA believes that measuring achieved, including an acceptable
Industry Members that are OATS each of the thresholds over the course accuracy rate for customer and account
Reporters to report on the same of 180 days will ensure that the CAT information. However, Rule 8211 cannot
timeframe as all other OATS Reporters. consistently meets minimum accuracy be completely eliminated upon the CAT
If such an amendment were approved and reliability thresholds for Industry achieving the appropriate thresholds
by the Commission, there would be no Member reporting while also ensuring because Exchange staff may still need to
need to exempt members from OATS that single-day measurements do not request information pursuant to Rule
requirements on a firm-by-firm basis.23 unduly affect the overall 8211 for trading activity occurring
The CAT NMS Plan also requires that measurements.28 Consequently, FINRA before a member organization 31 was
a rule filing to eliminate a duplicative is proposing to use error rates in four reporting to the CAT.32 In addition, the
rule to provide ‘‘specific accuracy and categories, measured separately for Rule 8211 applies to information
reliability standards that will determine options and for equities, to assess regarding transactions involving
when duplicative systems will be whether the threshold pre- and post- securities that will not be reportable to
retired, including, but not limited to, correction error rates are being met.29 the CAT, such as fixed-income
whether the attainment of a certain In addition to these minimum error securities; thus, the rule must remain in
Error Rate should determine when a rates before OATS can be retired FINRA effect with respect to those transactions
system duplicative of the CAT can be believes that during the minimum 180- until those transactions are captured in
retired.’’ 24 As discussed in Section day period during which the thresholds the CAT.
A.3.(b) of Appendix C to the CAT NMS are calculated, FINRA’s use of the data The proposed rule change proposes to
Plan, the Participants established an in the CAT must confirm that (i) usage add new Supplementary Material to the
initial Error Rate, as defined in the Plan, over that time period has not revealed Rule 8211 to clarify how the Exchange
of 5% on initially submitted data (i.e., material issues that have not been will request data under these rules after
data as submitted by a CAT Reporter corrected, (ii) the CAT includes all data member organizations are reporting to
before any required corrections are necessary to allow the Exchange to the CAT. Specifically, the proposed
performed). The Participants noted in continue to meet its surveillance Supplementary Material to the Rule
the Plan that their expectation was that obligations, and (iii) the Plan Processor 8211 will note that the Exchange will
‘‘error rates after reprocessing of error is sufficiently meeting all of its 31 The Rule 6800 Series, the Exchange’s
corrections will be de minimis.’’ 25 The obligations under the CAT NMS Plan. Consolidated Audit Trail Compliance rule, utilizes
Participants based this Error Rate on The Exchange believes this time period the term ‘‘Industry Member,’’ which applies to the
their consideration of ‘‘current and to use the CAT Data is necessary to Exchange’s member organizations. The term
historical OATS Error Rates, the reveal any errors that may manifest ‘‘member organization’’ means a ‘‘registered broker
or dealer (unless exempt pursuant to the Act) that
magnitude of new reporting themselves only after surveillance is a member of FINRA or another registered
requirements on the CAT Reporters and patterns and other queries have been securities exchange. Member organizations that
the fact that many CAT Reporters may run and to confirm that the Plan transact business with public customers or conduct
have never been obligated to report data Processor is meeting its obligations and business on the Floor of the Exchange shall at all
times be members of FINRA. A registered broker or
to an audit trail.’’ 26 performing its functions adequately.30 dealer must also be approved by the Exchange and
As set forth in its filing, FINRA authorized to designate an associated natural
believes that, when assessing the Rule 8211
person to effect transactions on the floor of the
accuracy and reliability of the data for In addition to the OATS rules, Rule Exchange or any facility thereof. This term shall
8211 will also be affected by the include a natural person so registered, approved
the purposes of retiring OATS, the error and licensed who directly effects transactions on
thresholds should be measured in more implementation of the CAT. Rule 8211 the floor of the Exchange or any facility thereof.’’
granular ways and should also include is the Exchange’s rule regarding the See Rule 2(b)(i). The term ‘‘member organization’’
minimum error rates of post-correction automated submission of specific also includes any registered broker or dealer that is
trading data to the Exchange upon a member of FINRA or a registered securities
data, which represents the data most exchange, consistent with the requirements of
likely to be used by FINRA to conduct section 2(b)(i) of this Rule, which does not own a
27 The Plan requires that the Plan Processor must
surveillance. To ensure the CAT’s trading license and agrees to be regulated by the
ensure that regulators have access to corrected and
nlaroche on DSK30NT082PROD with NOTICES
accuracy and reliability, FINRA is thus Exchange as a member organization and which the
linked order and Customer data by 8:00 a.m. Exchange has agreed to regulate. See Rule 2(b)(ii).
Eastern Time on T+5. See CAT NMS Plan, 32 Firms are required to maintain the trade
22 Id. [sic]. Appendix C, Section A.2(a). information for pre-CAT transactions in equities
23 Id. 28 See SR–FINRA–2017–013.
and options pursuant to applicable rules, such as
24 Id. [sic]. 29 The categories are (1) rejection rates and data
books and records retention requirements, for the
25 See CAT NMS Plan, Appendix C, Section validations; (2) intra-firm linkages; (3) order linkage relevant time period, which is generally three or six
A.3(b), at n.102. rates; and (4) Exchange and TRF/ORF match rates. years depending upon the record. See 17 CFR
26 Id. 30 See SR–FINRA–2017–013. 240.17a–3(a), 240.17a–4.
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![Federal Register / Vol. 82, No. 105 / Friday, June 2, 2017 / Notices 25639
information that you wish to make the Exchange, and at the Commission’s Plan to comply with Rule 613 of
available publicly. All submissions Public Reference Room. Regulation NMS under the Exchange
should refer to File Number SR–NYSE– Act.8 The Plan was published for
II. Self-Regulatory Organization’s
2017–23, and should be submitted on or comment in the Federal Register on
Statement of the Purpose of, and
before June 23, 2017. May 17, 2016,9 and approved by the
Statutory Basis for, the Proposed Rule
For the Commission, by the Division of Change Commission, as modified, on November
Trading and Markets, pursuant to delegated 15, 2016.10
authority.36 In its filing with the Commission, the The Plan is designed to create,
Eduardo A. Aleman, self-regulatory organization included implement and maintain a CAT that
Assistant Secretary.
statements concerning the purpose of, would capture customer and order event
and basis for, the proposed rule change information for orders in NMS
[FR Doc. 2017–11400 Filed 6–1–17; 8:45 am]
and discussed any comments it received Securities and OTC Equity Securities,
BILLING CODE 8011–01–P
on the proposed rule change. The text across all markets, from the time of
of those statements may be examined at order inception through routing,
the places specified in Item IV below. cancellation, modification, or execution
SECURITIES AND EXCHANGE
The Exchange has prepared summaries, in a single consolidated data source.
COMMISSION
set forth in sections A, B, and C below, Pursuant to Appendix C of the CAT
[Release No. 34–80800; File No. SR– of the most significant parts of such NMS Plan, each Participant is required
NYSEArca–2017–57] statements. to conduct analyses of which of its
Self-Regulatory Organizations; NYSE A. Self-Regulatory Organization’s existing trade and order data rules and
Arca, Inc.; Notice of Filing of Proposed Statement of the Purpose of, and the systems require the collection of
Rule Change To Eliminate Statutory Basis for, the Proposed Rule information that is duplicative of
Requirements That Will Be Duplicative Change information collected for the CAT.11 In
of CAT addition, among other things, Section
1. Purpose C.9 of Appendix C to the Plan, as
May 26, 2017. Background modified by the Commission, requires
Pursuant to Section 19(b)(1) of the each Participant to ‘‘file with the SEC
Bats BYX Exchange, Inc., Bats BZX
Securities Exchange Act of 1934 the relevant rule change filing to
Exchange, Inc., Bats EDGA Exchange,
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 eliminate or modify its duplicative rules
Inc., Bats EDGX Exchange, Inc., BOX
notice is hereby given that on May 15, within six (6) months of the SEC’s
Options Exchange LLC, C2 Options
2017, NYSE Arca, Inc. (‘‘NYSE Arca’’ or approval of the CAT NMS Plan.’’ 12 The
Exchange, Incorporated, CBOE, Chicago
the ‘‘Exchange’’) filed with the Plan notes that ‘‘the elimination of such
Stock Exchange, Inc., Financial Industry
Securities and Exchange Commission rules and the retirement of such systems
Regulatory Authority, Inc. (‘‘FINRA’’),
(‘‘SEC’’ or ‘‘Commission’’) the proposed [will] be effective at such time as CAT
Investors’ Exchange LLC, Miami
rule change as described in Items I, II, Data meets minimum standards of
International Securities Exchange, LLC,
and III below, which Items have been accuracy and reliability.’’ 13
MIAX PEARL, LLC, NASDAQ BX, Inc.,
prepared by the self-regulatory After conducting its analysis of its
Nasdaq GEMX, LLC, Nasdaq ISE, LLC,
organization. The Commission is rules in accordance with the CAT NMS
Nasdaq MRX, LLC,3 NASDAQ PHLX
publishing this notice to solicit Plan, the Exchange determined that the
LLC, The NASDAQ Stock Market LLC,
comments on the proposed rule change information collected for COATS is
New York Stock Exchange LLC, the
from interested persons. intended to be collected by the CAT.
Exchange, NYSE Arca, Inc. and NYSE
I. Self-Regulatory Organization’s National, Inc.4 (collectively, the Therefore, the Exchange believes that
Statement of the Terms of Substance of ‘‘Participants’’) filed with the COATS will no longer be necessary
the Proposed Rule Change Commission, pursuant to Section 11A of once the CAT is operational and certain
the Exchange Act 5 and Rule 608 of accuracy and reliability standards are
The Exchange proposes to delete met. Accordingly, the Exchange submits
NYSE Arca Rule 6.20 (Time Regulation NMS thereunder,6 the CAT
NMS Plan.7 The Participants filed the this proposed rule change to delete
Synchronization) and subsections NYSE Arca Rule 6.20 and subsections
(a)(1)–(13) of NYSE Arca Rule 6.68 3 ISE Gemini, LLC, ISE Mercury, LLC and (a)(1)–(13) of NYSE Arca Rule 6.68,
(Record of Orders) as these Rules collect International Securities Exchange, LLC have been which set forth certain requirements
information for the consolidated options renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, related to COATS. Discussed below is a
audit trail system (‘‘COATS’’) that are and Nasdaq ISE, LLC, respectively. See Securities
description of the duplicative rule
duplicative of the data collection Exchange Act Release No. 80248 (March 15, 2017),
82 FR 14547 (March 21, 2017) (SR–ISEGemini– requirements as well as the timeline for
requirements of the CAT NMS Plan. The 2017–13); Securities Exchange Act Release No. eliminating the duplicative rule.
Exchange will announce the date for the 80326 (March 29, 2017), 82 FR 16460 (April 4, If the Commission approves the
retirement of COATS in a regulatory 2017) (SR–ISEMercury–2017–05); and Securities
Exchange Act Release No. 80325 (March 29, 2017), proposed rule change, the rule text will
notice that will be published once the 82 FR 16445 (April 4, 2017) (SR–ISE–2017–25). be effective; however, the amendments
options exchanges determine that the 4 National Stock Exchange, Inc. has been renamed
will not be implemented until the
thresholds for accuracy and reliability NYSE National, Inc. See Securities Exchange Act
described below have been met and that Release No. 79902 (January 30, 2017), 82 FR 9258 8 17
(February 3, 2017) (SR–NSX–2016–16). CFR 242.613.
the Plan Processor is sufficiently 5 15 U.S.C. 78k–1.
9 Securities Exchange Act Release No. 77724
meeting all of its obligations under the (April 27, 2016), 81 FR 30614 (May 17, 2016) (File
nlaroche on DSK30NT082PROD with NOTICES
6 17 CFR 242.608.
CAT NMS Plan. The proposed change is 7 See Letter from the Participants to Brent J.
No. 4–698).
10 Securities Exchange Act Release No. 79318
available on the Exchange’s Web site at Fields, Secretary, Commission, dated September 30,
(Nov. 15, 2016), 81 FR 84696 (November 23, 2016)
www.nyse.com, at the principal office of 2014; and Letter from Participants to Brent J. Fields,
Secretary, Commission, dated February 27, 2015. (File No. 4–698) (‘‘Approval Order’’).
11 Appendix C of CAT NMS Plan, Approval Order
On December 24, 2015, the Participants submitted
36 17 CFR 200.30–3(a)(12). at 85010.
an amendment to the CAT NMS Plan. See Letter
1 15 U.S.C. 78s(b)(1). 12 Id.
from Participants to Brent J. Fields, Secretary,
2 17 CFR 240.19b–4. Commission, dated December 23, 2015. 13 Id.
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Document Created: 2017-06-02 00:38:13
Document Modified: 2017-06-02 00:38:13
| 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 25635 |
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