82 FR 26523 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Adopt Rule 6.97, Consolidated Audit Trail (CAT) Compliance Rule-Fee Dispute Resolution
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 108 (June 7, 2017)
Federal Register Volume 82, Issue 108 (June 7, 2017)
| Page Range | 26523-26526 | |
| FR Document | 2017-11743 |
[Federal Register Volume 82, Number 108 (Wednesday, June 7, 2017)] [Notices] [Pages 26523-26526] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-11743] [[Page 26523]] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80832; File No. SR-CBOE-2017-043] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change To Adopt Rule 6.97, Consolidated Audit Trail (CAT) Compliance Rule--Fee Dispute Resolution June 1, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on May 23, 2017, Chicago Board Options Exchange, Incorporated (the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange Commission (the ``Commission'' or ``SEC'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposal to adopt Rule 6.97 (Consolidated Audit Trail--Fee Dispute Resolution) to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members.\3\ --------------------------------------------------------------------------- \3\ Unless otherwise specified, capitalized terms used in this rule filing are defined as set forth herein, or in the Consolidated Audit Trail Funding Fees Rule, the CAT Compliance Rule Series or in the CAT NMS Plan. --------------------------------------------------------------------------- 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 National Market System Plan Governing the Consolidated Audit Trail (the ``CAT NMS Plan'' or ``Plan'').\8\ The Participants filed the Plan to comply with Rule 613 of Regulation NMS under the Exchange Act. The Plan was published for comment in the Federal Register on May 17, 2016,\9\ and approved by the Commission, as modified, on November 15, 2016.\10\ The Plan is designed to create, implement and maintain a consolidated audit trail (``CAT'') that would capture customer and order event information for orders in NMS Securities and OTC Equity Securities, across all markets, from the time of order inception through routing, cancellation, modification, or execution in a single consolidated data source. The Plan accomplishes this by creating CAT NMS, LLC (the ``Company''), of which each Participant is a member, to operate the CAT.\11\ Under the CAT NMS Plan, the Operating Committee of the Company (``Operating Committee'') has discretion to establish funding for the Company to operate the CAT, including establishing fees that the Participants will pay, and establishing fees for Industry Members that will be implemented by the Participants (``CAT Fees'').\12\ The Participants are required to file with the SEC under Section 19(b) of the Exchange Act any such CAT Fees applicable to Industry Members that the Operating Committee approves.\13\ Accordingly, the Exchange has filed a proposed rule change with the SEC to adopt the Consolidated Audit Trail (CAT)-- Funding Fees, which will require Industry Members that are Members of the Exchange to pay the CAT Fees determined by the Operating Committee.\14\ The Exchange submits this rule filing to adopt Rule 6.97 (Consolidated Audit Trail (CAT) Compliance Rule--Fee Dispute Resolution) to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members. Proposed Rule 6.97 is described below. --------------------------------------------------------------------------- \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\ The Plan also serves as the limited liability company agreement for the Company. \12\ Section 11.1(b) of the CAT NMS Plan. \13\ Id. \14\ See Securities Exchange Act Release No. 80256 (March 15, 2017), 82 FR 14526 (March 21, 2017) (SR-CBOE-2017-012) [sic]. --------------------------------------------------------------------------- (1) Definitions Paragraph (a) of Proposed Rule 6.97 sets forth the definitions for Proposed Rule 6.97. Paragraph (a)(i) of Proposed Rule 6.97 states that, for purposes of Rule 6.97, the terms ``CAT NMS Plan'', ``Industry Member'', ``Operating Committee'', and ``Participant'' are defined as set forth in the Rule 6.85 (Consolidated Audit Trail (CAT) Compliance Rule--Definitions), and the term ``CAT Fee'' is defined as set forth in the Consolidated Audit Trail (CAT)--Funding Fees. In addition, the Exchange proposes to add paragraph (a)(ii) to Proposed Rule 6.97. New paragraph (a)(ii) would define the term ``Subcommittee'' to mean a subcommittee designated by the Operating Committee pursuant to the CAT NMS Plan. This definition is the same substantive definition as set forth in Section 1.1 of the CAT NMS Plan. [[Page 26524]] (2) Fee Dispute Resolution Section 11.5 of the CAT NMS Plan requires Participants to adopt rules requiring that disputes with respect to fees charged to Industry Members pursuant to the CAT NMS Plan be determined by the Operating Committee or Subcommittee. Section 11.5 of the CAT NMS Plan also states that decisions by the Operating Committee or Subcommittee on such matters shall be binding on Industry Members, without prejudice to the right of any Industry Member to seek redress from the SEC pursuant to SEC Rule 608 or in any other appropriate forum. The Exchange proposes to adopt paragraph (b) of Proposed Rule 6.97. Paragraph (b) of Proposed Rule 6.97 states that disputes initiated by an Industry Member with respect to CAT Fees charged to such Industry Member pursuant to the Consolidated Audit Trail Funding Fees, including disputes related to the designated tier and the fee calculated pursuant to such tier, shall be resolved by the Operating Committee, or a Subcommittee designated by the Operating Committee, of the CAT NMS Plan, pursuant to the Fee Dispute Resolution Procedures adopted pursuant to the CAT NMS Plan and set forth in paragraph (c) of Proposed Rule 6.97. Decisions on such matters shall be binding on Industry Members, without prejudice to the rights of any such Industry Member to seek redress from the SEC or in any other appropriate forum. The Operating Committee has adopted ``Fee Dispute Resolution Procedures'' governing the manner in which disputes regarding CAT Fees charged pursuant to the Consolidated Audit Trail Funding Fees will be addressed. These Fee Dispute Resolution Procedures, as they relate to Industry Members, are set forth in paragraph (c) of Proposed Rule 6.97. Specifically, the Fee Dispute Resolution Procedures provide the procedure for Industry Members that dispute CAT Fees charged to such Industry Member pursuant to one or more of the Participants' Consolidated Audit Trail Funding Fees Rules, including disputes related to the designated tier and the fee calculated pursuant to such tier, to apply for an opportunity to be heard and to have the CAT Fees charged to such Industry Member reviewed. The Procedures are modeled after the adverse action procedures adopted by various exchanges,\15\ and will be posted on the Web site for the CAT NMS Plan Web site.\16\ --------------------------------------------------------------------------- \15\ See, e.g., Chapter XIX of Chicago Board Options Exchange, Incorporated (Hearings and Review); and Chapter X of NYSE National, Inc. (Adverse Action). \16\ The CAT NMS Plan Web site is www.catnmsplan.com. --------------------------------------------------------------------------- Under these Procedures, an Industry Member that disputes CAT Fees charged to such Industry Member and that desires to have an opportunity to be heard with respect to such disputed CAT Fees must file a written application with the Company within 15 business days after being notified of such disputed CAT Fees. The application must identify the disputed CAT Fees, state the specific reasons why the applicant takes exception to such CAT Fees, and set forth the relief sought. In addition, if the applicant intends to submit any additional documents, statements, arguments or other material in support of the application, the same should be so stated and identified. The Company will refer applications for hearing and review promptly to the Subcommittee designated by the Operating Committee pursuant to Section 4.12 of the CAT NMS Plan with responsibility for conducting the reviews of CAT Fee disputes pursuant to these Procedures. This Subcommittee will be referred to as the Fee Review Subcommittee. The members of the Fee Review Subcommittee will be subject to the provisions of Section 4.3(d) of the CAT NMS Plan regarding recusal and Conflicts of Interest. The Fee Review Subcommittee will keep a record of the proceedings. The Fee Review Subcommittee will hold hearings promptly. The Fee Review Subcommittee will set a hearing date. The parties to the hearing shall furnish the Fee Review Subcommittee with all materials relevant to the proceedings at least 72 hours prior to the date of the hearing. Each party will have the right to inspect and copy the other party's materials prior to the hearing. The parties to the hearing will consist of the applicant and a representative of the Company who shall present the reasons for the action taken by the Company that allegedly aggrieved the applicant. The applicant is entitled to be accompanied, represented and advised by counsel at all stages of the proceedings. The Fee Review Subcommittee will determine all questions concerning the admissibility of evidence and will otherwise regulate the conduct of the hearing. Each of the parties will be permitted to make an opening statement, present witnesses and documentary evidence, cross examine opposing witnesses and present closing arguments orally or in writing as determined by the Fee Review Subcommittee. The Fee Review Subcommittee also will have the right to question all parties and witnesses to the proceeding. The Fee Review Subcommittee must keep a record of the hearing. The formal rules of evidence will not apply. The Fee Review Subcommittee must set forth its decision in writing and send the written decision to the parties to the proceeding. Such decisions will contain the reasons supporting the conclusions of the Fee Review Subcommittee. The decision of the Fee Review Subcommittee will be subject to review by the Operating Committee either on its own motion within 20 business days after issuance of the decision or upon written request submitted by the applicant within 15 business days after issuance of the decision. The applicant's petition must be in writing and must specify the findings and conclusions to which the applicant objects, together with the reasons for such objections. Any objection to a decision not specified in writing will be considered to have been abandoned and may be disregarded. Parties may petition to submit a written argument to the Operating Committee and may request an opportunity to make an oral argument before the Operating Committee. The Operating Committee will have sole discretion to grant or deny either request. The Operating Committee will conduct the review. The review will be made upon the record and will be made after such further proceedings, if any, as the Operating Committee may order. Based upon such record, the Operating Committee may affirm, reverse or modify, in whole or in part, the decision of the Fee Review Subcommittee. The decision of the Operating Committee will be in writing, will be sent to the parties to the proceeding and will be final. The Procedures state that a final decision regarding the disputed CAT Fees by the Operating Committee, or the Fee Review Subcommittee (if there is no review by the Operating Committee), must be provided within 90 days of the date on which the Industry Member filed a written application regarding disputed CAT Fees with the Company. The Operating Committee may extend the 90-day time limit at its discretion. In addition, the Procedures state that any notices or other documents may be served upon the applicant either personally or by leaving the same at its, his or her place of business or by deposit in the United States post office, postage prepaid, by registered or certified mail, addressed to the [[Page 26525]] applicant at its, his or her last known business or residence address. The Procedures also state that any time limits imposed under the Procedures for the submission of answers, petitions or other materials may be extended by permission of the Operating Committee. All papers and documents relating to review by the Fee Review Subcommittee or the Operating Committee must be submitted to the Fee Review Subcommittee or Operating Committee, as applicable. The Procedures also note that decisions on such CAT Fee disputes made pursuant to these Procedures will be binding on Industry Members, without prejudice to the rights of any such Industry Member to seek redress from the SEC or in any other appropriate forum. Finally, an Industry Member that files a written application with the Company regarding disputed CAT Fees in accordance with these Procedures is not required to pay such disputed CAT Fees until the dispute is resolved in accordance with these Procedures, including any review by the SEC or in any other appropriate forum. For these purposes, the disputed CAT Fees means the amount of the invoiced CAT Fees that the Industry Member has asserted pursuant to these Procedures that such Industry Member does not owe to the Company. The Industry Member must pay any invoiced CAT Fees that are not disputed CAT Fees when due as set forth in the original invoice. Once the dispute regarding CAT Fees is resolved pursuant to these Procedures, if it is determined that the Industry Member owes any of the disputed CAT Fees, then the Industry Member must pay such disputed CAT Fees that are owed as well as interest on such disputed CAT Fees from the original due date (that is, 30 days after receipt of the original invoice of such CAT Fees) until such disputed CAT Fees are paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)(5) of the Act,\17\ which require, among other things, that 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, and Section 15A(b)(5) [sic] of the Act,\18\ which requires that Exchange rules provide for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using its facilities. --------------------------------------------------------------------------- \17\ 15 U.S.C. 78f(b)(5). \18\ 15 U.S.C. 78o-3(b)(5) [sic]. --------------------------------------------------------------------------- The Exchange believes that this proposal is consistent with the Act because it implements, interprets or clarifies Section 11.5 of the Plan, and is designed to assist the Exchange and its Industry Members in meeting regulatory obligations pursuant to the Plan. In approving the Plan, the SEC noted that the Plan ``is necessary and appropriate in the public interest, for the protection of investors and the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanism of a national market system, or is otherwise in furtherance of the purposes of the Act.'' \19\ To the extent that this proposal implements, interprets or clarifies the Plan and applies specific requirements to Industry Members, the Exchange believes that this proposal furthers the objectives of the Plan, as identified by the SEC, and is therefore consistent with the Act. --------------------------------------------------------------------------- \19\ Approval Order at 84697. --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition Section 6(b)(8) of the Act \20\ require [sic] 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 Act. The Exchange notes that the proposed rule change implements Section 11.5 of the CAT NMS Plan approved by the Commission, and is designed to assist the Exchange in meeting its regulatory obligations pursuant to the Plan. Similarly, all national securities exchanges and FINRA are proposing this proposed rule to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive rule filing and, therefore, it does not raise competition issues between and among the exchanges and FINRA. --------------------------------------------------------------------------- \20\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. 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. 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-CBOE-2017-043 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-CBOE-2017-043. 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 [[Page 26526]] 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-CBOE-2017-043, and should be submitted on or before June 28, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-11743 Filed 6-6-17; 8:45 am] BILLING CODE 8011-01-P
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SECURITIES AND EXCHANGE the most significant aspects of such in NMS Securities and OTC Equity
COMMISSION statements. Securities, across all markets, from the
time of order inception through routing,
[Release No. 34–80832; File No. SR–CBOE– A. Self-Regulatory Organization’s
cancellation, modification, or execution
2017–043] Statement of the Purpose of, and
in a single consolidated data source.
Statutory Basis for, the Proposed Rule
Self-Regulatory Organizations; The Plan accomplishes this by creating
Change
Chicago Board Options Exchange, CAT NMS, LLC (the ‘‘Company’’), of
Incorporated; Notice of Filing of a 1. Purpose which each Participant is a member, to
Proposed Rule Change To Adopt Rule Bats BYX Exchange, Inc., Bats BZX operate the CAT.11 Under the CAT NMS
6.97, Consolidated Audit Trail (CAT) Exchange, Inc., Bats EDGA Exchange, Plan, the Operating Committee of the
Compliance Rule—Fee Dispute Inc., Bats EDGX Exchange, Inc., BOX Company (‘‘Operating Committee’’) has
Resolution Options Exchange LLC, C2 Options discretion to establish funding for the
Exchange, Incorporated, Chicago Board Company to operate the CAT, including
June 1, 2017. establishing fees that the Participants
Options Exchange, Incorporated,
Pursuant to Section 19(b)(1) of the Chicago Stock Exchange, Inc., Financial will pay, and establishing fees for
Securities Exchange Act of 1934 (the Industry Regulatory Authority, Inc. Industry Members that will be
‘‘Act’’ or ‘‘Exchange Act’’),1 and Rule (‘‘FINRA’’), Investors’ Exchange LLC, implemented by the Participants (‘‘CAT
19b–4 thereunder,2 notice is hereby Miami International Securities Fees’’).12 The Participants are required
given that on May 23, 2017, Chicago Exchange, LLC, MIAX PEARL, LLC, to file with the SEC under Section 19(b)
Board Options Exchange, Incorporated NASDAQ BX, Inc., Nasdaq GEMX, LLC, of the Exchange Act any such CAT Fees
(the ‘‘Exchange’’ or ‘‘CBOE’’) filed with Nasdaq ISE, LLC, Nasdaq MRX, LLC,4 applicable to Industry Members that the
the Securities and Exchange NASDAQ PHLX LLC, The NASDAQ Operating Committee approves.13
Commission (the ‘‘Commission’’ or Stock Market LLC, New York Stock Accordingly, the Exchange has filed a
‘‘SEC’’) the proposed rule change as Exchange LLC, NYSE MKT LLC, NYSE proposed rule change with the SEC to
described in Items I, II, and III below, Arca, Inc. and NYSE National, Inc.5 adopt the Consolidated Audit Trail
which Items have been prepared by the (collectively, the ‘‘Participants’’) filed (CAT)—Funding Fees, which will
Exchange. The Commission is with the Commission, pursuant to require Industry Members that are
publishing this notice to solicit Section 11A of the Exchange Act 6 and Members of the Exchange to pay the
comments on the proposed rule change Rule 608 of Regulation NMS CAT Fees determined by the Operating
from interested persons. thereunder,7 the National Market Committee.14 The Exchange submits
System Plan Governing the this rule filing to adopt Rule 6.97
I. Self-Regulatory Organization’s
Consolidated Audit Trail (the ‘‘CAT (Consolidated Audit Trail (CAT)
Statement of the Terms of Substance of
NMS Plan’’ or ‘‘Plan’’).8 The Compliance Rule—Fee Dispute
the Proposed Rule Change
Participants filed the Plan to comply Resolution) to establish the procedures
The Exchange filed a proposal to for resolving potential disputes related
with Rule 613 of Regulation NMS under
adopt Rule 6.97 (Consolidated Audit to CAT Fees charged to Industry
the Exchange Act. The Plan was
Trail—Fee Dispute Resolution) to Members. Proposed Rule 6.97 is
published for comment in the Federal
establish the procedures for resolving described below.
Register on May 17, 2016,9 and
potential disputes related to CAT Fees
approved by the Commission, as (1) Definitions
charged to Industry Members.3
The text of the proposed rule change modified, on November 15, 2016.10 The Paragraph (a) of Proposed Rule 6.97
is available on the Exchange’s Web site Plan is designed to create, implement sets forth the definitions for Proposed
(http://www.cboe.com/AboutCBOE/ and maintain a consolidated audit trail Rule 6.97. Paragraph (a)(i) of Proposed
CBOELegalRegulatoryHome.aspx), at (‘‘CAT’’) that would capture customer Rule 6.97 states that, for purposes of
the Exchange’s Office of the Secretary, and order event information for orders Rule 6.97, the terms ‘‘CAT NMS Plan’’,
and at the Commission’s Public 4 ISE Gemini, LLC, ISE Mercury, LLC and
‘‘Industry Member’’, ‘‘Operating
Reference Room. International Securities Exchange, LLC have been
Committee’’, and ‘‘Participant’’ are
renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, defined as set forth in the Rule 6.85
II. Self-Regulatory Organization’s (Consolidated Audit Trail (CAT)
and Nasdaq ISE, LLC, respectively. See Securities
Statement of the Purpose of, and Exchange Act Rel. No. 80248 (Mar. 15, 2017), 82 FR Compliance Rule—Definitions), and the
Statutory Basis for, the Proposed Rule 14547 (Mar. 21, 2017); Securities Exchange Act Rel. term ‘‘CAT Fee’’ is defined as set forth
Change No. 80326 (Mar. 29, 2017), 82 FR 16460 (Apr. 4,
in the Consolidated Audit Trail (CAT)—
2017); and Securities Exchange Act Rel. No. 80325
In its filing with the Commission, the (Mar. 29, 2017), 82 FR 16445 (Apr. 4, 2017). Funding Fees. In addition, the Exchange
Exchange included statements 5 National Stock Exchange, Inc. has been renamed proposes to add paragraph (a)(ii) to
concerning the purpose of and basis for NYSE National, Inc. See Securities Exchange Act Proposed Rule 6.97. New paragraph
Rel. No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb. 3,
the proposed rule change and discussed 2017).
(a)(ii) would define the term
any comments it received on the 6 15 U.S.C. 78k–1. ‘‘Subcommittee’’ to mean a
proposed rule change. The text of these 7 17 CFR 242.608. subcommittee designated by the
statements may be examined at the 8 See Letter from the Participants to Brent J. Operating Committee pursuant to the
places specified in Item IV below. The Fields, Secretary, Commission, dated September 30, CAT NMS Plan. This definition is the
Exchange has prepared summaries, set 2014; and Letter from Participants to Brent J. Fields, same substantive definition as set forth
Secretary, Commission, dated February 27, 2015.
in Section 1.1 of the CAT NMS Plan.
sradovich on DSK3GMQ082PROD with NOTICES
forth in sections A, B, and C below, of On December 24, 2015, the Participants submitted
an amendment to the CAT NMS Plan. See Letter
1 15U.S.C. 78s(b)(1). from Participants to Brent J. Fields, Secretary, 11 The Plan also serves as the limited liability
2 17CFR 240.19b–4. Commission, dated December 23, 2015. company agreement for the Company.
3 Unless otherwise specified, capitalized terms 9 Securities Exchange Act Rel. No. 77724 (Apr. 12 Section 11.1(b) of the CAT NMS Plan.
used in this rule filing are defined as set forth 27, 2016), 81 FR 30614 (May 17, 2016). 13 Id.
herein, or in the Consolidated Audit Trail Funding 10 Securities Exchange Act Rel. No. 79318 (Nov. 14 See Securities Exchange Act Release No. 80256
Fees Rule, the CAT Compliance Rule Series or in 15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘Approval (March 15, 2017), 82 FR 14526 (March 21, 2017)
the CAT NMS Plan. Order’’). (SR–CBOE–2017–012) [sic].
VerDate Sep<11>2014 16:37 Jun 06, 2017 Jkt 241001 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 E:\FR\FM\07JNN1.SGM 07JNN1](https://thefederalregister.org/doc/82_FR_26631/page/1.svg)
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applicant at its, his or her last known discrimination between customers, III. Date of Effectiveness of the
business or residence address. The issuers, brokers and dealer, and Section Proposed Rule Change and Timing for
Procedures also state that any time 15A(b)(5) [sic] of the Act,18 which Commission Action
limits imposed under the Procedures for requires that Exchange rules provide for Within 45 days of the date of
the submission of answers, petitions or the equitable allocation of reasonable publication of this notice in the Federal
other materials may be extended by dues, fees, and other charges among Register or within such longer period
permission of the Operating Committee. members and issuers and other persons up to 90 days (i) as the Commission may
All papers and documents relating to using its facilities. designate if it finds such longer period
review by the Fee Review Subcommittee The Exchange believes that this
to be appropriate and publishes its
or the Operating Committee must be proposal is consistent with the Act
reasons for so finding or (ii) as to which
submitted to the Fee Review because it implements, interprets or
the Exchange consents, the Commission
Subcommittee or Operating Committee, clarifies Section 11.5 of the Plan, and is
will:
as applicable. designed to assist the Exchange and its
The Procedures also note that A. By order approve or disapprove
Industry Members in meeting regulatory
decisions on such CAT Fee disputes such proposed rule change, or
obligations pursuant to the Plan. In
made pursuant to these Procedures will B. institute proceedings to determine
approving the Plan, the SEC noted that
be binding on Industry Members, whether the proposed rule change
the Plan ‘‘is necessary and appropriate
without prejudice to the rights of any should be disapproved.
in the public interest, for the protection
such Industry Member to seek redress of investors and the maintenance of fair IV. Solicitation of Comments
from the SEC or in any other and orderly markets, to remove Interested persons are invited to
appropriate forum. impediments to, and perfect the
Finally, an Industry Member that files submit written data, views, and
mechanism of a national market system, arguments concerning the foregoing,
a written application with the Company or is otherwise in furtherance of the
regarding disputed CAT Fees in including whether the proposed rule
purposes of the Act.’’ 19 To the extent change is consistent with the Act.
accordance with these Procedures is not that this proposal implements,
required to pay such disputed CAT Fees Comments may be submitted by any of
interprets or clarifies the Plan and the following methods:
until the dispute is resolved in applies specific requirements to
accordance with these Procedures, Industry Members, the Exchange Electronic Comments
including any review by the SEC or in believes that this proposal furthers the
any other appropriate forum. For these • Use the Commission’s Internet
objectives of the Plan, as identified by comment form (http://www.sec.gov/
purposes, the disputed CAT Fees means the SEC, and is therefore consistent with
the amount of the invoiced CAT Fees rules/sro.shtml); or
the Act. • Send an email to rule-comments@
that the Industry Member has asserted
pursuant to these Procedures that such B. Self-Regulatory Organization’s sec.gov. Please include File Number SR–
Industry Member does not owe to the Statement on Burden on Competition CBOE–2017–043 on the subject line.
Company. The Industry Member must Section 6(b)(8) of the Act 20 require Paper Comments
pay any invoiced CAT Fees that are not [sic] that Exchange rules not impose any • Send paper comments in triplicate
disputed CAT Fees when due as set burden on competition that is not to Secretary, Securities and Exchange
forth in the original invoice. necessary or appropriate. The Exchange
Once the dispute regarding CAT Fees Commission, 100 F Street NE.,
does not believe that the proposed rule Washington, DC 20549–1090.
is resolved pursuant to these change will result in any burden on
Procedures, if it is determined that the All submissions should refer to File
competition that is not necessary or
Industry Member owes any of the Number SR–CBOE–2017–043. This file
appropriate in furtherance of the
disputed CAT Fees, then the Industry number should be included on the
purposes of the Act. The Exchange notes
Member must pay such disputed CAT subject line if email is used. To help the
that the proposed rule change
Fees that are owed as well as interest on Commission process and review your
implements Section 11.5 of the CAT
such disputed CAT Fees from the comments more efficiently, please use
NMS Plan approved by the Commission,
original due date (that is, 30 days after only one method. The Commission will
and is designed to assist the Exchange
receipt of the original invoice of such post all comments on the Commission’s
in meeting its regulatory obligations
CAT Fees) until such disputed CAT Internet Web site (http://www.sec.gov/
pursuant to the Plan. Similarly, all
Fees are paid at a per annum rate equal rules/sro.shtml). Copies of the
national securities exchanges and
to the lesser of (i) the Prime Rate plus submission, all subsequent
FINRA are proposing this proposed rule
300 basis points, or (ii) the maximum amendments, all written statements
to implement the requirements of the
rate permitted by applicable law. with respect to the proposed rule
CAT NMS Plan. Therefore, this is not a
change that are filed with the
2. Statutory Basis competitive rule filing and, therefore, it
Commission, and all written
does not raise competition issues
The Exchange believes that the communications relating to the
between and among the exchanges and
proposed rule change is consistent with proposed rule change between the
FINRA.
the provisions of Section 6(b)(5) of the Commission and any person, other than
Act,17 which require, among other C. Self-Regulatory Organization’s those that may be withheld from the
things, that Exchange rules must be Statement on Comments on the public in accordance with the
Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be
sradovich on DSK3GMQ082PROD with NOTICES
designed to prevent fraudulent and
manipulative acts and practices, to Members, Participants, or Others available for Web site viewing and
promote just and equitable principles of Written comments were neither printing in the Commission’s Public
trade, and, in general, to protect solicited nor received. Reference Room, 100 F Street NE.,
investors and the public interest, and Washington, DC 20549, on official
not designed to permit unfair 18 15 U.S.C. 78o–3(b)(5) [sic]. business days between the hours of
19 Approval Order at 84697. 10:00 a.m. and 3:00 p.m. Copies of the
17 15 U.S.C. 78f(b)(5). 20 15 U.S.C. 78f(b)(8). filing also will be available for
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![26526 Federal Register / Vol. 82, No. 108 / Wednesday, June 7, 2017 / Notices
inspection and copying at the principal Web site at http:// Participants filed the Plan to comply
office of the Exchange. All comments www.miaxoptions.com/rule-filings, at with Rule 613 of Regulation NMS under
received will be posted without change; MIAX’s principal office, and at the the Exchange Act. The Plan was
the Commission does not edit personal Commission’s Public Reference Room. published for comment in the Federal
identifying information from Register on May 17, 2016,9 and
submissions. You should submit only II. Self-Regulatory Organization’s
approved by the Commission, as
information that you wish to make Statement of the Purpose of, and
modified, on November 15, 2016.10 The
available publicly. All submissions Statutory Basis for, the Proposed Rule
Plan is designed to create, implement
should refer to File Number SR–CBOE– Change
and maintain a consolidated audit trail
2017–043, and should be submitted on In its filing with the Commission, the (‘‘CAT’’) that would capture customer
or before June 28, 2017. Exchange included statements and order event information for orders
For the Commission, by the Division of concerning the purpose of and basis for in NMS Securities and OTC Equity
Trading and Markets, pursuant to delegated the proposed rule change and discussed Securities, across all markets, from the
authority.21 any comments it received on the time of order inception through routing,
Eduardo A. Aleman, proposed rule change. The text of these cancellation, modification, or execution
Assistant Secretary. statements may be examined at the in a single consolidated data source.
[FR Doc. 2017–11743 Filed 6–6–17; 8:45 am] places specified in Item IV below. The The Plan accomplishes this by creating
BILLING CODE 8011–01–P
Exchange has prepared summaries, set CAT NMS, LLC (the ‘‘Company’’), of
forth in sections A, B, and C below, of which each Participant is a member, to
the most significant aspects of such operate the CAT.11 Under the CAT NMS
SECURITIES AND EXCHANGE statements. Plan, the Operating Committee of the
COMMISSION A. Self-Regulatory Organization’s Company (‘‘Operating Committee’’) has
Statement of the Purpose of, and the discretion to establish funding for the
[Release No. 34–80837; File No. SR–MIAX–
2017–24] Statutory Basis for, the Proposed Rule Company to operate the CAT, including
Change establishing fees that the Participants
Self-Regulatory Organizations; Miami will pay, and establishing fees for
International Securities Exchange LLC; 1. Purpose Industry Members that will be
Notice of Filing of a Proposed Rule Bats BYX Exchange, Inc., Bats BZX implemented by the Participants (‘‘CAT
Change To Adopt Exchange Rule 1713 Exchange, Inc., Bats EDGA Exchange, Fees’’).12 The Participants are required
Consolidated Audit Trail—Fee Dispute Inc., Bats EDGX Exchange, Inc., BOX to file with the SEC under section 19(b)
Resolution Options Exchange LLC, C2 Options of the Exchange Act any such CAT Fees
Exchange, Incorporated, Chicago Board applicable to Industry Members that the
June 1, 2017. Operating Committee approves.13
Pursuant to the provisions of section Options Exchange, Incorporated,
Chicago Stock Exchange, Inc., Financial Accordingly, the Exchange has filed
19(b)(1) of the Securities Exchange Act with the SEC to adopt the Consolidated
of 1934 (‘‘Act’’ or the ‘‘Exchange Act’’) 1 Industry Regulatory Authority, Inc.
(‘‘FINRA’’), Investors’ Exchange LLC, Audit Trail Funding Fees, which will
and Rule 19b–4 thereunder,2 notice is require Industry Members that are
hereby given that, on May 23, 2017, Miami International Securities
Exchange, LLC, MIAX PEARL, LLC, Exchange members to pay the CAT Fees
Miami International Securities determined by the Operating
Exchange, LLC (‘‘MIAX Options’’ or the NASDAQ BX, Inc., Nasdaq GEMX, LLC,
Nasdaq ISE, LLC, Nasdaq MRX, LLC,4 Committee.14 The Exchange submits
‘‘Exchange’’) filed with the Securities this rule filing to adopt Rule 1713
and Exchange Commission (‘‘SEC’’ or NASDAQ PHLX LLC, The NASDAQ
Stock Market LLC, New York Stock (Consolidated Audit Trail—Fee Dispute
the ‘‘Commission’’) a proposed rule Resolution) to establish the procedures
change as described in Items I and II Exchange LLC, NYSE MKT LLC, NYSE
Arca, Inc. and NYSE National, Inc.5 for resolving potential disputes related
below, which Items have been prepared to CAT Fees charged to Industry
by the Exchange. The Commission is (collectively, the ‘‘Participants’’) filed
with the Commission, pursuant to Members. Proposed Rule 1713 is
publishing this notice to solicit described below.
comments on the proposed rule change section 11A of the Exchange Act 6 and
from interested persons. Rule 608 of Regulation NMS (1) Definitions
thereunder,7 the National Market
I. Self-Regulatory Organization’s System Plan Governing the Paragraph (a) of Proposed Rule 1713
Statement of the Terms of Substance of Consolidated Audit Trail (the ‘‘CAT sets forth the definitions for Proposed
the Proposed Rule Change NMS Plan’’ or ‘‘Plan’’).8 The Rule 1713. Paragraph (a)(1) of Proposed
Rule 1713 states that, for purposes of
The Exchange is filing a proposal to
4 ISE Gemini, LLC, ISE Mercury, LLC and
adopt Exchange Rule 1713 Secretary, Commission, dated February 27, 2015.
International Securities Exchange, LLC have been
(Consolidated Audit Trail—Fee Dispute renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, On December 24, 2015, the Participants submitted
Resolution) to establish the procedures and Nasdaq ISE, LLC, respectively. See Securities an amendment to the CAT NMS Plan. See Letter
for resolving potential disputes related Exchange Act Rel. No. 80248 (Mar. 15, 2017), 82 FR from Participants to Brent J. Fields, Secretary,
14547 (Mar. 21, 2017); Securities Exchange Act Rel. Commission, dated December 23, 2015.
to CAT Fees charged to Industry 9 See Securities Exchange Act Rel. No. 77724
No. 80326 (Mar. 29, 2017), 82 FR 16460 (Apr. 4,
Members.3 The text of the proposed rule 2017); and Securities Exchange Act Rel. No. 80325 (Apr. 27, 2016), 81 FR 30614 (May 17, 2016).
change is available on the Exchange’s (Mar. 29, 2017), 82 FR 16445 (Apr. 4, 2017). 10 See Securities Exchange Act Rel. No. 79318
sradovich on DSK3GMQ082PROD with NOTICES
5 National Stock Exchange, Inc. has been renamed (Nov. 15, 2016), 81 FR 84696 (Nov. 23, 2016)
21 17 CFR 200.30–3(a)(12). NYSE National, Inc. See Securities Exchange Act (‘‘Approval Order’’).
1 15 U.S.C. 78s(b)(1). Rel. No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb. 3, 11 The Plan also serves as the limited liability
2 17 CFR 240.19b–4. 2017). company agreement for the Company.
3 Unless otherwise specified, capitalized terms 6 15 U.S.C. 78k–1. 12 Section 11.1(b) of the CAT NMS Plan.
7 17 CFR 242.608. 13 Id.
used in this rule filing are defined as set forth
herein or in the Consolidated Audit Trail Funding 8 See Letter from the Participants to Brent J. 14 See Securities Exchange Act Rel. No. 80675
Fees Rule, the CAT Compliance Rule Series or in Fields, Secretary, Commission, dated September 30, (May 15, 2017), 82 FR 23100 (May 19, 2017) (SR–
the CAT NMS Plan. 2014; and Letter from Participants to Brent J. Fields, MIAX–2017–18).
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Document Created: 2017-06-07 02:00:37
Document Modified: 2017-06-07 02:00:37
| 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 26523 |
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