82 FR 27904 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Adopt Article 23, Rule 13, Consolidated Audit Trail-Fee Dispute Resolution
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 116 (June 19, 2017)
Federal Register Volume 82, Issue 116 (June 19, 2017)
| Page Range | 27904-27907 | |
| FR Document | 2017-12588 |
[Federal Register Volume 82, Number 116 (Monday, June 19, 2017)] [Notices] [Pages 27904-27907] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-12588] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80916; File No. SR-CHX-2017-11] Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Adopt Article 23, Rule 13, Consolidated Audit Trail--Fee Dispute Resolution June 13, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or ``Exchange Act''),\1\ notice is hereby given that on June 5, 2017, the Chicago Stock Exchange, Inc. (``CHX'' or ``Exchange'') filed with the Securities and Exchange Commission (the ``Commission'' or ``SEC'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change CHX proposes to amend the Rules of the Exchange (``CHX Rules'') to adopt Article 23, Rule 13 (Consolidated Audit Trail--Fee Dispute Resolution) to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members.\2\ The text of this proposed rule change is available on the Exchange's Web site at http://www.chx.com/regulatory-operations/rule-filings/, at the principal office of the Exchange, and at the Commission's Public Reference Room. --------------------------------------------------------------------------- \2\ 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. --------------------------------------------------------------------------- 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 The Exchange, 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, 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,\3\ NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE MKT LLC, NYSE Arca, Inc. and NYSE National, Inc.\4\ (collectively, the ``Plan Participants'' \5\) 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 Plan 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 Plan 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 Plan Participants will pay, and establishing fees for Industry Members that will be implemented by the Plan [[Page 27905]] Participants (``CAT Fees'').\12\ The Plan 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 Funding Fees, which will require Industry Members that are Exchange members to pay the CAT Fees determined by the Operating Committee.\14\ The Exchange submits this rule filing to adopt Rule 13 (Consolidated Audit Trail-- Fee Dispute Resolution) to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members. Proposed Rule 13 is described below. --------------------------------------------------------------------------- \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 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). \4\ 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). \5\ A ``Participant'' is a ``member'' of the Exchange for purposes of the Act. See CHX Article 1, Rule 1(s). For the avoidance of confusion, the term ``Plan Participant'' will be used when referring to Participants of the Plan. \6\ 15 U.S.C. 78k-1. \7\ 17 CFR 242.608. \8\ See Letter from the Plan Participants to Brent J. Fields, Secretary, Commission, dated September 30, 2014; and Letter from Plan Participants to Brent J. Fields, Secretary, Commission, dated February 27, 2015. On December 24, 2015, the Plan Participants submitted an amendment to the CAT NMS Plan. See Letter from Plan 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\ Securities Exchange Act Rel. No. 80691 (May 16, 2017), 82 FR 23344 (May 22, 2017) (SR-CHX-2017-08). --------------------------------------------------------------------------- (1) Definitions Paragraph (a) of Proposed Rule 13 sets forth the definitions for Proposed Rule 13. Paragraph (a)(1) of Proposed Rule 13 states that, for purposes of Rule 13, the terms ``CAT NMS Plan'', ``Industry Member'', ``Operating Committee'', and ``Plan Participant'' are defined as set forth in the Rule 1 (Consolidated Audit Trail--Definitions), and the term ``CAT Fee'' is defined as set forth in the Consolidated Audit Trail Funding Fees. In addition, the Exchange proposes to add paragraph (a)(2) to Proposed Rule 13. New paragraph (a)(2) would define the term ``Subcommittee'' to mean a subcommittee designated by the Operating Committee pursuant to the CAT NMS Plan. This definition is the same substantive definition as set forth in Section 1.1 of the CAT NMS Plan. (2) Fee Dispute Resolution Section 11.5 of the CAT NMS Plan requires Plan 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 13. Paragraph (b) of Proposed Rule 13 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 13. 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 13. 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 Plan 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 X of BATS BZX Exchange, Inc. (Adverse Action); 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 [[Page 27906]] 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 applicant at its, his or her last known business or residence address. The Procedures also state that any time limits imposed under the Procedures for the submission of answers, petitions or other materials may be extended by permission of the Operating Committee. All papers and documents relating to review by the Fee Review Subcommittee or the Operating Committee must be submitted to the Fee Review Subcommittee or Operating Committee, as applicable. The Procedures also note that decisions on such CAT Fee disputes made pursuant to these Procedures will be binding on Industry Members, without prejudice to the rights of any such Industry Member to seek redress from the SEC or in any other appropriate forum. Finally, an Industry Member that files a written application with the Company regarding disputed CAT Fees in accordance with these Procedures is not required to pay such disputed CAT Fees until the dispute is resolved in accordance with these Procedures, including any review by the SEC or in any other appropriate forum. For these purposes, the disputed CAT Fees means the amount of the invoiced CAT Fees that the Industry Member has asserted pursuant to these Procedures that such Industry Member does not owe to the Company. The Industry Member must pay any invoiced CAT Fees that are not disputed CAT Fees when due as set forth in the original invoice. Once the dispute regarding CAT Fees is resolved pursuant to these Procedures, if it is determined that the Industry Member owes any of the disputed CAT Fees, then the Industry Member must pay such disputed CAT Fees that are owed as well as interest on such disputed CAT Fees from the original due date (that is, 30 days after receipt of the original invoice of such CAT Fees) until such disputed CAT Fees are paid at a per annum rate equal to the lesser of (i) the Prime Rate plus 300 basis points, or (ii) the maximum rate permitted by applicable law. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b)(5) of the Act,\17\ which require, among other things, that the Exchange 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 6(b)(4) 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. 78f(b)(4). --------------------------------------------------------------------------- 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 No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. [[Page 27907]] 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-CHX-2017-11 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-CHX-2017-11. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-CHX-2017-11, and should be submitted on or before July 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\21\ Eduardo A. Aleman, Assistant Secretary. --------------------------------------------------------------------------- \21\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2017-12588 Filed 6-16-17; 8:45 am] BILLING CODE 8011-01-P
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applicable statutory and regulatory ‘‘Commission’’ or ‘‘SEC’’) the proposed NASDAQ PHLX LLC, The NASDAQ
requirements include 39 U.S.C. 3622, 39 rule change as described in Items I and Stock Market LLC, New York Stock
U.S.C. 3642, 39 CFR part 3010, and 39 II below, which Items have been Exchange LLC, NYSE MKT LLC, NYSE
CFR part 3020, subpart B. For request(s) prepared by the self-regulatory Arca, Inc. and NYSE National, Inc.4
that the Postal Service states concern organization. The Commission is (collectively, the ‘‘Plan Participants’’ 5)
competitive product(s), applicable publishing this notice to solicit filed with the Commission, pursuant to
statutory and regulatory requirements comments on the proposed rule change Section 11A of the Exchange Act 6 and
include 39 U.S.C. 3632, 39 U.S.C. 3633, from interested persons. Rule 608 of Regulation NMS
39 U.S.C. 3642, 39 CFR part 3015, and I. Self-Regulatory Organization’s thereunder,7 the National Market
39 CFR part 3020, subpart B. Comment Statement of the Terms of Substance of System Plan Governing the
deadline(s) for each request appear in the Proposed Rule Change Consolidated Audit Trail (the ‘‘CAT
section II. NMS Plan’’ or ‘‘Plan’’).8 The Plan
CHX proposes to amend the Rules of
II. Docketed Proceeding(s) Participants filed the Plan to comply
the Exchange (‘‘CHX Rules’’) to adopt
1. Docket No(s).: CP2017–207; Filing Article 23, Rule 13 (Consolidated Audit with Rule 613 of Regulation NMS under
Trail—Fee Dispute Resolution) to the Exchange Act. The Plan was
Title: Notice of United States Postal published for comment in the Federal
Service of Filing a Functionally establish the procedures for resolving
potential disputes related to CAT Fees Register on May 17, 2016,9 and
Equivalent Global Expedited Package
Services 7 Negotiated Service charged to Industry Members.2 The text approved by the Commission, as 10
Agreement and Application for Non- of this proposed rule change is available modified, on November 15, 2016. The
on the Exchange’s Web site at http:// Plan is designed to create, implement
Public Treatment of Materials Filed
www.chx.com/regulatory-operations/ and maintain a consolidated audit trail
Under Seal; Filing Acceptance Date:
June 13, 2017; Filing Authority: 39 CFR rule-filings/, at the principal office of the (‘‘CAT’’) that would capture customer
Exchange, and at the Commission’s and order event information for orders
3015.5; Public Representative: Katalin
Public Reference Room. in NMS Securities and OTC Equity
K. Clendenin; Comments Due: June 21,
Securities, across all markets, from the
2017. II. Self-Regulatory Organization’s
2. Docket No(s).: CP2017–208; Filing time of order inception through routing,
Statement of the Purpose of, and cancellation, modification, or execution
Title: Notice of United States Postal Statutory Basis for, the Proposed Rule
Service of Filing a Functionally in a single consolidated data source.
Change The Plan accomplishes this by creating
Equivalent Global Expedited Package
Services 3 Negotiated Service In its filing with the Commission, the CAT NMS, LLC (the ‘‘Company’’), of
Agreement and Application for Non- self-regulatory organization included which each Plan Participant is a
Public Treatment of Materials Filed statements concerning the purpose of, member, to operate the CAT.11 Under
Under Seal; Filing Acceptance Date: and basis for, the proposed rule change the CAT NMS Plan, the Operating
June 13, 2017; Filing Authority: 39 CFR and discussed any comments it received Committee of the Company (‘‘Operating
3015.5; Public Representative: Katalin on the proposed rule change. The text Committee’’) has discretion to establish
K. Clendenin; Comments Due: June 21, of those statements may be examined at funding for the Company to operate the
2017. the places specified in Item IV below. CAT, including establishing fees that
This notice will be published in the The Exchange has prepared summaries, the Plan Participants will pay, and
Federal Register. set forth in sections A, B and C below, establishing fees for Industry Members
of the most significant parts of such that will be implemented by the Plan
Stacy L. Ruble, statements.
Secretary. and Nasdaq ISE, LLC, respectively. See Securities
A. Self-Regulatory Organization’s
[FR Doc. 2017–12626 Filed 6–16–17; 8:45 am] Exchange Act Rel. No. 80248 (Mar. 15, 2017), 82 FR
Statement of the Purpose of, and the 14547 (Mar. 21, 2017); Securities Exchange Act Rel.
BILLING CODE 7710–FW–P
Statutory Basis for, the Proposed Rule No. 80326 (Mar. 29, 2017), 82 FR 16460 (Apr. 4,
Change 2017); and Securities Exchange Act Rel. No. 80325
(Mar. 29, 2017), 82 FR 16445 (Apr. 4, 2017).
SECURITIES AND EXCHANGE 1. Purpose 4 National Stock Exchange, Inc. has been renamed
COMMISSION The Exchange, Bats BYX Exchange, NYSE National, Inc. See Securities Exchange Act
Rel. No. 79902 (Jan. 30, 2017), 82 FR 9258 (Feb. 3,
[Release No. 34–80916; File No. SR–CHX– Inc., Bats BZX Exchange, Inc., Bats 2017).
2017–11] EDGA Exchange, Inc., Bats EDGX 5 A ‘‘Participant’’ is a ‘‘member’’ of the Exchange
Exchange, Inc., BOX Options Exchange for purposes of the Act. See CHX Article 1, Rule
Self-Regulatory Organizations; LLC, C2 Options Exchange, 1(s). For the avoidance of confusion, the term ‘‘Plan
Participant’’ will be used when referring to
Chicago Stock Exchange, Inc.; Notice Incorporated, Chicago Board Options Participants of the Plan.
of Filing of a Proposed Rule Change Exchange, Incorporated, Financial 6 15 U.S.C. 78k–1.
To Adopt Article 23, Rule 13, Industry Regulatory Authority, Inc. 7 17 CFR 242.608.
Consolidated Audit Trail—Fee Dispute (‘‘FINRA’’), Investors’ Exchange LLC, 8 See Letter from the Plan Participants to Brent J.
Resolution Miami International Securities Fields, Secretary, Commission, dated September 30,
Exchange, LLC, MIAX PEARL, LLC, 2014; and Letter from Plan Participants to Brent J.
June 13, 2017. Fields, Secretary, Commission, dated February 27,
NASDAQ BX, Inc., Nasdaq GEMX, LLC, 2015. On December 24, 2015, the Plan Participants
asabaliauskas on DSKBBXCHB2PROD with NOTICES
Pursuant to Section 19(b)(1) of the Nasdaq ISE, LLC, Nasdaq MRX, LLC,3 submitted an amendment to the CAT NMS Plan.
Securities Exchange Act of 1934 (‘‘Act’’ See Letter from Plan Participants to Brent J. Fields,
or ‘‘Exchange Act’’),1 notice is hereby 2 Unless otherwise specified, capitalized terms Secretary, Commission, dated December 23, 2015.
given that on June 5, 2017, the Chicago used in this rule filing are defined as set forth 9 Securities Exchange Act Rel. No. 77724 (Apr.
Stock Exchange, Inc. (‘‘CHX’’ or herein, or in the Consolidated Audit Trail Funding 27, 2016), 81 FR 30614 (May 17, 2016).
Fees Rule, the CAT Compliance Rule Series or in 10 Securities Exchange Act Rel. No. 79318 (Nov.
‘‘Exchange’’) filed with the Securities the CAT NMS Plan. 15, 2016), 81 FR 84696 (Nov. 23, 2016) (‘‘Approval
and Exchange Commission (the 3 ISE Gemini, LLC, ISE Mercury, LLC and Order’’).
International Securities Exchange, LLC have been 11 The Plan also serves as the limited liability
1 15 U.S.C. 78s(b)(1). renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, company agreement for the Company.
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issuance of the decision. The applicant’s Finally, an Industry Member that files impediments to, and perfect the
petition must be in writing and must a written application with the Company mechanism of a national market system,
specify the findings and conclusions to regarding disputed CAT Fees in or is otherwise in furtherance of the
which the applicant objects, together accordance with these Procedures is not purposes of the Act.’’ 19 To the extent
with the reasons for such objections. required to pay such disputed CAT Fees that this proposal implements,
Any objection to a decision not until the dispute is resolved in interprets or clarifies the Plan and
specified in writing will be considered accordance with these Procedures, applies specific requirements to
to have been abandoned and may be including any review by the SEC or in Industry Members, the Exchange
disregarded. Parties may petition to any other appropriate forum. For these believes that this proposal furthers the
submit a written argument to the purposes, the disputed CAT Fees means objectives of the Plan, as identified by
Operating Committee and may request the amount of the invoiced CAT Fees the SEC, and is therefore consistent with
an opportunity to make an oral that the Industry Member has asserted the Act.
argument before the Operating pursuant to these Procedures that such
Committee. The Operating Committee Industry Member does not owe to the B. Self-Regulatory Organization’s
will have sole discretion to grant or Company. The Industry Member must Statement on Burden on Competition
deny either request. pay any invoiced CAT Fees that are not Section 6(b)(8) of the Act 20 require
The Operating Committee will disputed CAT Fees when due as set [sic] that Exchange rules not impose any
conduct the review. The review will be forth in the original invoice. burden on competition that is not
made upon the record and will be made Once the dispute regarding CAT Fees
necessary or appropriate. The Exchange
after such further proceedings, if any, as is resolved pursuant to these
does not believe that the proposed rule
the Operating Committee may order. Procedures, if it is determined that the
change will result in any burden on
Based upon such record, the Operating Industry Member owes any of the
competition that is not necessary or
Committee may affirm, reverse or disputed CAT Fees, then the Industry
appropriate in furtherance of the
modify, in whole or in part, the decision Member must pay such disputed CAT
purposes of the Act. The Exchange notes
of the Fee Review Subcommittee. The Fees that are owed as well as interest on
that the proposed rule change
decision of the Operating Committee such disputed CAT Fees from the
implements Section 11.5 of the CAT
will be in writing, will be sent to the original due date (that is, 30 days after
NMS Plan approved by the Commission,
parties to the proceeding and will be receipt of the original invoice of such
CAT Fees) until such disputed CAT and is designed to assist the Exchange
final.
The Procedures state that a final Fees are paid at a per annum rate equal in meeting its regulatory obligations
decision regarding the disputed CAT to the lesser of (i) the Prime Rate plus pursuant to the Plan. Similarly, all
Fees by the Operating Committee, or the 300 basis points, or (ii) the maximum national securities exchanges and
Fee Review Subcommittee (if there is no rate permitted by applicable law. FINRA are proposing this proposed rule
review by the Operating Committee), to implement the requirements of the
must be provided within 90 days of the 2. Statutory Basis CAT NMS Plan. Therefore, this is not a
date on which the Industry Member The Exchange believes that the competitive rule filing and, therefore, it
filed a written application regarding proposed rule change is consistent with does not raise competition issues
disputed CAT Fees with the Company. the provisions of Section 6(b)(5) of the between and among the exchanges and
The Operating Committee may extend Act,17 which require, among other FINRA.
the 90-day time limit at its discretion. things, that the Exchange rules must be C. Self-Regulatory Organization’s
In addition, the Procedures state that designed to prevent fraudulent and Statement on Comments on the
any notices or other documents may be manipulative acts and practices, to Proposed Rule Change Received From
served upon the applicant either promote just and equitable principles of Members, Participants or Others
personally or by leaving the same at its, trade, and, in general, to protect
his or her place of business or by investors and the public interest, and No written comments were solicited
deposit in the United States post office, not designed to permit unfair or received with respect to the proposed
postage prepaid, by registered or discrimination between customers, rule change.
certified mail, addressed to the issuers, brokers and dealer, and Section
applicant at its, his or her last known III. Date of Effectiveness of the
6(b)(4) of the Act,18 which requires that
business or residence address. The Proposed Rule Change and Timing for
Exchange rules provide for the equitable
Procedures also state that any time Commission Action
allocation of reasonable dues, fees, and
limits imposed under the Procedures for other charges among members and Within 45 days of the date of
the submission of answers, petitions or issuers and other persons using its publication of this notice in the Federal
other materials may be extended by facilities. Register or within such longer period
permission of the Operating Committee. The Exchange believes that this up to 90 days (i) as the Commission may
All papers and documents relating to proposal is consistent with the Act designate if it finds such longer period
review by the Fee Review Subcommittee because it implements, interprets or to be appropriate and publishes its
or the Operating Committee must be clarifies Section 11.5 of the Plan, and is reasons for so finding or (ii) as to which
submitted to the Fee Review designed to assist the Exchange and its the self-regulatory organization
Subcommittee or Operating Committee, Industry Members in meeting regulatory consents, the Commission will:
asabaliauskas on DSKBBXCHB2PROD with NOTICES
as applicable. obligations pursuant to the Plan. In
The Procedures also note that (A) By order approve or disapprove
approving the Plan, the SEC noted that
decisions on such CAT Fee disputes such proposed rule change, or
the Plan ‘‘is necessary and appropriate
made pursuant to these Procedures will in the public interest, for the protection (B) institute proceedings to determine
be binding on Industry Members, of investors and the maintenance of fair whether the proposed rule change
without prejudice to the rights of any and orderly markets, to remove should be disapproved.
such Industry Member to seek redress
from the SEC or in any other 17 15 U.S.C. 78f(b)(5). 19 Approval Order at 84697.
appropriate forum. 18 15 U.S.C. 78f(b)(4). 20 15 U.S.C. 78f(b)(8)
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![Federal Register / Vol. 82, No. 116 / Monday, June 19, 2017 / Notices 27907
IV. Solicitation of Comments For the Commission, by the Division of (a) No change.
Trading and Markets, pursuant to delegated (b) Notwithstanding Interpretation
Interested persons are invited to authority.21 and Policy .01 and Interpretation and
submit written data, views, and Eduardo A. Aleman, Policy .08(a) above, the interval between
arguments concerning the foregoing, Assistant Secretary. strike prices of series of options on
including whether the proposed rule [FR Doc. 2017–12588 Filed 6–16–17; 8:45 am] Units of the Standard & Poor’s
change is consistent with the Act. BILLING CODE 8011–01–P Depository Receipts Trust (‘‘SPY’’),
Comments may be submitted by any of iShares S&P 500 Index ETF (‘‘IVV’’),
the following methods: and The DIAMONDS Trust (‘‘DIA’’) will
SECURITIES AND EXCHANGE be $1 or greater.
Electronic Comments COMMISSION .09–.23 No change.
• Use the Commission’s Internet [Release No. 34–80913; File No SR–CBOE– * * * * *
comment form (http://www.sec.gov/ 2017–048] The text of the proposed rule change
rules/sro.shtml); or is also available on the Exchange’s Web
Self-Regulatory Organizations; site (http://www.cboe.com/AboutCBOE/
• Send an email to rule-comments@ CBOELegalRegulatoryHome.aspx), at
Chicago Board Options Exchange,
sec.gov. Please include File Number SR– Incorporated; Notice of Filing and the Exchange’s Office of the Secretary,
CHX–2017–11 on the subject line. Immediate Effectiveness of a Proposed and at the Commission’s Public
Paper Comments Rule Change Related to Rule 5.5 Reference Room.
II. Self-Regulatory Organization’s
• Send paper comments in triplicate June 13, 2017.
Pursuant to Section 19(b)(1) of the Statement of the Purpose of, and
to Secretary, Securities and Exchange
Securities Exchange Act of 1934 (the Statutory Basis for, the Proposed Rule
Commission, 100 F Street NE., Change
Washington, DC 20549–1090. ‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 9, In its filing with the Commission, the
All submissions should refer to File 2017, Chicago Board Options Exchange, Exchange included statements
Number SR–CHX–2017–11. This file Incorporated (the ‘‘Exchange’’ or concerning the purpose of and basis for
number should be included on the ‘‘CBOE’’) filed with the Securities and the proposed rule change and discussed
subject line if email is used. To help the Exchange Commission (the any comments it received on the
Commission process and review your ‘‘Commission’’) the proposed rule proposed rule change. The text of these
comments more efficiently, please use change as described in Items I, II, and statements may be examined at the
only one method. The Commission will III below, which Items have been places specified in Item IV below. The
post all comments on the Commission’s prepared by the Exchange. The Exchange has prepared summaries, set
Internet Web site (http://www.sec.gov/ Exchange filed the proposal as a ‘‘non- forth in sections A, B, and C below, of
rules/sro.shtml). Copies of the controversial’’ proposed rule change the most significant aspects of such
submission, all subsequent pursuant to Section 19(b)(3)(A)(iii) of statements.
amendments, all written statements the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is A. Self-Regulatory Organization’s
with respect to the proposed rule Statement of the Purpose of, and
change that are filed with the publishing this notice to solicit
comments on the proposed rule change Statutory Basis for, the Proposed Rule
Commission, and all written Change
communications relating to the from interested persons.
proposed rule change between the I. Self-Regulatory Organization’s 1. Purpose
Commission and any person, other than Statement of the Terms of Substance of The Exchange proposes to amend
those that may be withheld from the the Proposed Rule Change Rule 5.5 (Series of Option Contracts
public in accordance with the Open for Trading) by modifying the
The Exchange proposes to amend
provisions of 5 U.S.C. 552, will be strike setting regime for IVV options.
Rule 5.5. The text of the proposed rule
available for Web site viewing and Specifically, the Exchange proposes to
change is provided below.
printing in the Commission’s Public modify the interval setting regime for
(additions are italicized; deletions are
Reference Room, 100 F Street NE., IVV options to allow $1 strike price
[bracketed])
Washington, DC 20549, on official intervals above $200. The Exchange
* * * * * believes that the proposed rule change
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the Chicago Board Options Exchange, would make IVV options easier for
Incorporated Rules investors and traders to use and more
filing also will be available for
tailored to their investment needs.
inspection and copying at the principal * * * * * Additionally, the interval setting regime
office of the Exchange. All comments the Exchange proposes to apply to IVV
Rule 5.5. Series of Option Contracts
received will be posted without change; options is currently applied to options
Open for Trading
the Commission does not edit personal on units of the Standard & Poor’s
identifying information from (a)–(e) No change.
Depository Receipts Trust (‘‘SPY’’),5
submissions. You should submit only
asabaliauskas on DSKBBXCHB2PROD with NOTICES
. . . Interpretations and Policies: which is an exchange-traded fund
information that you wish to make (‘‘ETF’’) that is identical in all material
available publicly. All submissions .01–.07 No change.
.08 respects to the IVV ETF.
should refer to File Number SR–CHX– The SPY and IVV ETFs are identical
2017–11, and should be submitted on or 21 17 CFR 200.30–3(a)(12). in all material respects. The SPY and
before July 10, 2017. 1 15 U.S.C. 78s(b)(1). IVV ETFs are designed to roughly track
2 17 CFR 240.19b–4. the performance of the S&P 500 Index
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6). 5 See Current Rule 5.5.08.
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Document Created: 2017-06-17 01:48:05
Document Modified: 2017-06-17 01:48:05
| 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 27904 |
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