82 FR 28702 - Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing of a Proposed Rule Change To Adopt Rule 912
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 120 (June 23, 2017)
Federal Register Volume 82, Issue 120 (June 23, 2017)
| Page Range | 28702-28705 | |
| FR Document | 2017-13097 |
[Federal Register Volume 82, Number 120 (Friday, June 23, 2017)] [Notices] [Pages 28702-28705] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-13097] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80966; File No. SR-MRX-2017-08] Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing of a Proposed Rule Change To Adopt Rule 912 June 19, 2017. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\, and Rule 19b-4 thereunder,\2\ notice is hereby given that on June 9, 2017, Nasdaq MRX, LLC (``MRX'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``Commission'') the proposed rule change as described in Items I and II, 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 adopt Rule 912 (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 at http://nasdaqmrx.cchwallstreet.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 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 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 912 (Consolidated Audit Trail-- Fee Dispute Resolution) to establish the procedures for resolving potential disputes related to CAT Fees charged to Industry Members. The proposed rules are 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 Release No. 80248 (March 15, 2017), 82 FR 14547 (March 21, 2017); Securities Exchange Act Release No. 80326 (March 29, 2017), 82 FR 16460 (April 4, 2017); and Securities Exchange Act Release No. 80325 (March 29, 2017), 82 FR 16445 (April 4, 2017). \5\ 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). \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 Release No. 77724 (April 27, 2016), 81 FR 30614 (May 17, 2016). \10\ Securities Exchange Act Rel. No. 79318 (November 15, 2016), 81 FR 84696 (November 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. 80726 (May 18, 2017), 82 FR 23915 (May 24, 2017) (SR-MRX-2017-04). --------------------------------------------------------------------------- (1) Definitions Paragraph (a) of Proposed Rule 912 sets forth the definitions for Proposed Rule 912. Paragraph (a)(1) of Proposed Rule 912 states that, for purposes of Rule 912, the terms ``CAT NMS Plan'', ``Industry Member'', ``Operating Committee'', and ``Participant'' are defined as set forth in the Rule 900 [[Page 28703]] (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 912. New paragraph (a)(2) would define the term ``Subcommittee'' to mean a subcommittee designated by the Operating Committee pursuant to the CAT NMS Plan. This definition is the same substantive definition as set forth in Section 1.1 of the CAT NMS Plan. (2) Fee Dispute Resolution Section 11.5 of the CAT NMS Plan requires Participants to adopt rules requiring that disputes with respect to fees charged to Industry Members pursuant to the CAT NMS Plan be determined by the Operating Committee or Subcommittee. Section 11.5 of the CAT NMS Plan also states that decisions by the Operating Committee or Subcommittee on such matters 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 912. Paragraph (b) of Proposed Rule 912 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 912. 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 912. 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 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 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 [[Page 28704]] 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 requires, 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 [sic], 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\ requires that Exchange rules not impose any burden on competition that is not necessary or appropriate. The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the proposed rule change implements Section 11.5 of the CAT NMS Plan approved by the Commission, and is designed to assist the Exchange in meeting its regulatory obligations pursuant to the Plan. Similarly, all national securities exchanges and FINRA are proposing this proposed rule to implement the requirements of the CAT NMS Plan. Therefore, this is not a competitive rule filing and, therefore, it does not raise competition issues between and among the exchanges and FINRA. --------------------------------------------------------------------------- \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 either solicited or 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-MRX-2017-08 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-MRX-2017-08. 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 [[Page 28705]] 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-MRX-2017-08, and should be submitted on or before July 14, 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. 2017-13097 Filed 6-22-17; 8:45 am] BILLING CODE 8011-01-P
![28702 Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices
or by sending an email to: Shagufta_ II. Self-Regulatory Organization’s Participants filed the Plan to comply
Ahmed@omb.eop.gov; and (ii) Pamela Statement of the Purpose of, and with Rule 613 of Regulation NMS under
Dyson, Director/Chief Information Statutory Basis for, the Proposed Rule the Exchange Act. The Plan was
Officer, Securities and Exchange Change published for comment in the Federal
Commission, c/o Remi Pavlik-Simon, In its filing with the Commission, the Register on May 17, 2016,9 and
100 F Street NE., Washington, DC 20549 Exchange included statements approved by the Commission, as
or send an email to: PRA_Mailbox@ concerning the purpose of and basis for modified, on November 15, 2016.10 The
sec.gov. Comments must be submitted to the proposed rule change and discussed Plan is designed to create, implement
OMB within 30 days of this notice. any comments it received on the and maintain a consolidated audit trail
proposed rule change. The text of these (‘‘CAT’’) that would capture customer
Dated: June 19, 2017. and order event information for orders
statements may be examined at the
Eduardo A. Aleman, places specified in Item IV below. The in NMS Securities and OTC Equity
Assistant Secretary. Exchange has prepared summaries, set Securities, across all markets, from the
[FR Doc. 2017–13145 Filed 6–22–17; 8:45 am] forth in sections A, B, and C below, of time of order inception through routing,
the most significant aspects of such cancellation, modification, or execution
BILLING CODE 8011–01–P
statements. in a single consolidated data source.
The Plan accomplishes this by creating
A. Self-Regulatory Organization’s CAT NMS, LLC (the ‘‘Company’’), of
SECURITIES AND EXCHANGE Statement of the Purpose of, and which each Participant is a member, to
COMMISSION Statutory Basis for, the Proposed Rule operate the CAT.11 Under the CAT NMS
Change Plan, the Operating Committee of the
[Release No. 34–80966; File No. SR–MRX– Company (‘‘Operating Committee’’) has
2017–08] 1. Purpose
discretion to establish funding for the
Bats BYX Exchange, Inc., Bats BZX Company to operate the CAT, including
Self-Regulatory Organizations; Nasdaq Exchange, Inc., Bats EDGA Exchange, establishing fees that the Participants
MRX, LLC; Notice of Filing of a Inc., Bats EDGX Exchange, Inc., BOX will pay, and establishing fees for
Proposed Rule Change To Adopt Rule Options Exchange LLC, C2 Options Industry Members that will be
912 Exchange, Incorporated, Chicago Board implemented by the Participants (‘‘CAT
Options Exchange, Incorporated, Fees’’).12 The Participants are required
June 19, 2017. Chicago Stock Exchange, Inc., Financial to file with the SEC under Section 19(b)
Pursuant to Section 19(b)(1) of the Industry Regulatory Authority, Inc. of the Exchange Act any such CAT Fees
Securities Exchange Act of 1934 (‘‘Act’’ (‘‘FINRA’’), Investors’ Exchange LLC, applicable to Industry Members that the
or ‘‘Exchange Act’’) 1, and Rule 19b–4 Miami International Securities Operating Committee approves.13
thereunder,2 notice is hereby given that Exchange, LLC, MIAX PEARL, LLC, Accordingly, the Exchange has filed a
on June 9, 2017, Nasdaq MRX, LLC NASDAQ BX, Inc., Nasdaq GEMX, LLC, proposed rule change with the SEC to
(‘‘MRX’’ or ‘‘Exchange’’) filed with the Nasdaq ISE, LLC, Nasdaq MRX, LLC,4 adopt the Consolidated Audit Trail
Securities and Exchange Commission NASDAQ PHLX LLC, The NASDAQ Funding Fees, which will require
(‘‘SEC’’ or ‘‘Commission’’) the proposed Stock Market LLC, New York Stock Industry Members that are Exchange
Exchange LLC, NYSE MKT LLC, NYSE members to pay the CAT Fees
rule change as described in Items I and
Arca, Inc. and NYSE National, Inc.5 determined by the Operating
II, below, which Items have been
(collectively, the ‘‘Participants’’) filed Committee.14 The Exchange submits
prepared by the Exchange. The with the Commission, pursuant to this rule filing to adopt Rule 912
Commission is publishing this notice to Section 11A of the Exchange Act 6 and (Consolidated Audit Trail—Fee Dispute
solicit comments on the proposed rule Rule 608 of Regulation NMS Resolution) to establish the procedures
change from interested persons. thereunder,7 the National Market for resolving potential disputes related
I. Self-Regulatory Organization’s System Plan Governing the to CAT Fees charged to Industry
Statement of the Terms of Substance of Consolidated Audit Trail (the ‘‘CAT Members. The proposed rules are
the Proposed Rule Change NMS Plan’’ or ‘‘Plan’’).8 The described below.
(1) Definitions
The Exchange proposes to adopt Rule 4 ISE Gemini, LLC, ISE Mercury, LLC and
912 (Consolidated Audit Trail—Fee International Securities Exchange, LLC have been Paragraph (a) of Proposed Rule 912
renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC, sets forth the definitions for Proposed
Dispute Resolution) to establish the and Nasdaq ISE, LLC, respectively. See Securities
procedures for resolving potential Exchange Act Release No. 80248 (March 15, 2017), Rule 912. Paragraph (a)(1) of Proposed
disputes related to CAT Fees charged to 82 FR 14547 (March 21, 2017); Securities Exchange Rule 912 states that, for purposes of
Industry Members.3 Act Release No. 80326 (March 29, 2017), 82 FR Rule 912, the terms ‘‘CAT NMS Plan’’,
16460 (April 4, 2017); and Securities Exchange Act ‘‘Industry Member’’, ‘‘Operating
The text of the proposed rule change Release No. 80325 (March 29, 2017), 82 FR 16445
(April 4, 2017). Committee’’, and ‘‘Participant’’ are
is available on the Exchange’s Web site 5 National Stock Exchange, Inc. has been renamed defined as set forth in the Rule 900
at http://nasdaqmrx.cchwallstreet.com/, NYSE National, Inc. See Securities Exchange Act
at the principal office of the Exchange, Release No. 79902 (January 30, 2017), 82 FR 9258 9 Securities Exchange Act Release No. 77724
and at the Commission’s Public (February 3, 2017). (April 27, 2016), 81 FR 30614 (May 17, 2016).
asabaliauskas on DSKBBXCHB2PROD with NOTICES
6 15 U.S.C. 78k–1. 10 Securities Exchange Act Rel. No. 79318
Reference Room. 7 17 CFR 242.608. (November 15, 2016), 81 FR 84696 (November 23,
8 See Letter from the Participants to Brent J. 2016) (‘‘Approval Order’’).
1 15U.S.C. 78s(b)(1). 11 The Plan also serves as the limited liability
Fields, Secretary, Commission, dated September 30,
2 17CFR 240.19b–4. 2014; and Letter from Participants to Brent J. Fields, company agreement for the Company.
3 Unless otherwise specified, capitalized terms 12 Section 11.1(b) of the CAT NMS Plan.
Secretary, Commission, dated February 27, 2015.
used in this rule filing are defined as set forth On December 24, 2015, the Participants submitted 13 Id.
herein, or in the Consolidated Audit Trail Funding an amendment to the CAT NMS Plan. See Letter 14 See Securities Exchange Act Release No. 80726
Fees Rule, the CAT Compliance Rule Series or in from Participants to Brent J. Fields, Secretary, (May 18, 2017), 82 FR 23915 (May 24, 2017) (SR–
the CAT NMS Plan. Commission, dated December 23, 2015. MRX–2017–04).
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filed a written application regarding 2. Statutory Basis to implement the requirements of the
disputed CAT Fees with the Company. The Exchange believes that the CAT NMS Plan. Therefore, this is not a
The Operating Committee may extend proposed rule change is consistent with competitive rule filing and, therefore, it
the 90-day time limit at its discretion. the provisions of Section 6(b)(5) of the does not raise competition issues
In addition, the Procedures state that Act,17 which requires, among other between and among the exchanges and
any notices or other documents may be things, that the Exchange rules must be FINRA.
served upon the applicant either designed to prevent fraudulent and C. Self-Regulatory Organization’s
personally or by leaving the same at its, manipulative acts and practices, to Statement on Comments on the
his or her place of business or by promote just and equitable principles of Proposed Rule Change Received From
deposit in the United States post office, trade, and, in general, to protect Members, Participants, or Others
postage prepaid, by registered or investors and the public interest, and
not designed to permit unfair No written comments were either
certified mail, addressed to the solicited or received.
applicant at its, his or her last known discrimination between customers,
business or residence address. The issuers, brokers and dealer [sic], and III. Date of Effectiveness of the
Procedures also state that any time Section 6(b)(4) of the Act,18 which Proposed Rule Change and Timing for
limits imposed under the Procedures for requires that Exchange rules provide for Commission Action
the submission of answers, petitions or the equitable allocation of reasonable
Within 45 days of the date of
dues, fees, and other charges among
other materials may be extended by publication of this notice in the Federal
members and issuers and other persons
permission of the Operating Committee. Register or within such longer period
using its facilities.
All papers and documents relating to The Exchange believes that this up to 90 days (i) as the Commission may
review by the Fee Review Subcommittee proposal is consistent with the Act designate if it finds such longer period
or the Operating Committee must be because it implements, interprets or to be appropriate and publishes its
submitted to the Fee Review clarifies Section 11.5 of the Plan, and is reasons for so finding or (ii) as to which
Subcommittee or Operating Committee, designed to assist the Exchange and its the Exchange consents, the Commission
as applicable. Industry Members in meeting regulatory will:
obligations pursuant to the Plan. In (A) By order approve or disapprove
The Procedures also note that
approving the Plan, the SEC noted that such proposed rule change, or
decisions on such CAT Fee disputes (B) institute proceedings to determine
made pursuant to these Procedures will the Plan ‘‘is necessary and appropriate
in the public interest, for the protection whether the proposed rule change
be binding on Industry Members, should be disapproved.
without prejudice to the rights of any of investors and the maintenance of fair
such Industry Member to seek redress and orderly markets, to remove IV. Solicitation of Comments
from the SEC or in any other impediments to, and perfect the
Interested persons are invited to
appropriate forum. mechanism of a national market system,
submit written data, views, and
or is otherwise in furtherance of the
Finally, an Industry Member that files arguments concerning the foregoing,
purposes of the Act.’’ 19 To the extent
a written application with the Company including whether the proposed rule
that this proposal implements,
regarding disputed CAT Fees in change is consistent with the Act.
interprets or clarifies the Plan and
accordance with these Procedures is not Comments may be submitted by any of
applies specific requirements to
required to pay such disputed CAT Fees the following methods:
Industry Members, the Exchange
until the dispute is resolved in believes that this proposal furthers the Electronic Comments
accordance with these Procedures, objectives of the Plan, as identified by
including any review by the SEC or in • Use the Commission’s Internet
the SEC, and is therefore consistent with comment form (http://www.sec.gov/
any other appropriate forum. For these the Act.
purposes, the disputed CAT Fees means rules/sro.shtml); or
B. Self-Regulatory Organization’s • Send an email to rule-comments@
the amount of the invoiced CAT Fees
Statement on Burden on Competition sec.gov. Please include File Number SR–
that the Industry Member has asserted
Section 6(b)(8) of the Act 20 requires MRX–2017–08 on the subject line.
pursuant to these Procedures that such
Industry Member does not owe to the that Exchange rules not impose any Paper Comments
Company. The Industry Member must burden on competition that is not • Send paper comments in triplicate
pay any invoiced CAT Fees that are not necessary or appropriate. The Exchange
to Secretary, Securities and Exchange
disputed CAT Fees when due as set does not believe that the proposed rule
Commission, 100 F Street NE.,
forth in the original invoice. change will impose any burden on
Washington, DC 20549–1090.
competition not necessary or
Once the dispute regarding CAT Fees All submissions should refer to File
appropriate in furtherance of the
is resolved pursuant to these Number SR–MRX–2017–08. This file
purposes of the Act. The Exchange notes
Procedures, if it is determined that the number should be included on the
that the proposed rule change
Industry Member owes any of the subject line if email is used. To help the
implements Section 11.5 of the CAT
disputed CAT Fees, then the Industry Commission process and review your
NMS Plan approved by the Commission,
Member must pay such disputed CAT comments more efficiently, please use
and is designed to assist the Exchange
Fees that are owed as well as interest on
asabaliauskas on DSKBBXCHB2PROD with NOTICES
in meeting its regulatory obligations only one method. The Commission will
such disputed CAT Fees from the pursuant to the Plan. Similarly, all post all comments on the Commission’s
original due date (that is, 30 days after national securities exchanges and Internet Web site (http://www.sec.gov/
receipt of the original invoice of such FINRA are proposing this proposed rule rules/sro.shtml). Copies of the
CAT Fees) until such disputed CAT submission, all subsequent
Fees are paid at a per annum rate equal 17 15 U.S.C. 78f(b)(5). amendments, all written statements
to the lesser of (i) the Prime Rate plus 18 15 U.S.C. 78f(b)(4). with respect to the proposed rule
300 basis points, or (ii) the maximum 19 Approval Order at 84697. change that are filed with the
rate permitted by applicable law. 20 15 U.S.C. 78f(b)(8). Commission, and all written
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![Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices 28705
communications relating to the Resolution) to establish the procedures Section 11A of the Exchange Act 6 and
proposed rule change between the for resolving potential disputes related Rule 608 of Regulation NMS
Commission and any person, other than to CAT Fees charged to Industry thereunder,7 the National Market
those that may be withheld from the Members.3 System Plan Governing the
public in accordance with the The text of the proposed rule change Consolidated Audit Trail (the ‘‘CAT
provisions of 5 U.S.C. 552, will be is available on the Exchange’s Web site NMS Plan’’ or ‘‘Plan’’).8 The
available for Web site viewing and at http://nasdaqbx.cchwallstreet.com/, Participants filed the Plan to comply
printing in the Commission’s Public at the principal office of the Exchange, with Rule 613 of Regulation NMS under
Reference Room, 100 F Street NE., and at the Commission’s Public the Exchange Act. The Plan was
Washington, DC 20549, on official Reference Room. published for comment in the Federal
business days between the hours of II. Self-Regulatory Organization’s Register on May 17, 2016,9 and
10:00 a.m. and 3:00 p.m. Copies of the Statement of the Purpose of, and approved by the Commission, as
filing also will be available for Statutory Basis for, the Proposed Rule modified, on November 15, 2016.10 The
inspection and copying at the principal Change Plan is designed to create, implement
office of the Exchange. All comments and maintain a consolidated audit trail
received will be posted without change; In its filing with the Commission, the (‘‘CAT’’) that would capture customer
the Commission does not edit personal Exchange included statements and order event information for orders
identifying information from concerning the purpose of and basis for in NMS Securities and OTC Equity
submissions. You should submit only the proposed rule change and discussed Securities, across all markets, from the
information that you wish to make any comments it received on the time of order inception through routing,
available publicly. All submissions proposed rule change. The text of these cancellation, modification, or execution
should refer to File Number SR–MRX– statements may be examined at the in a single consolidated data source.
2017–08, and should be submitted on or places specified in Item IV below. The The Plan accomplishes this by creating
before July 14, 2017. 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
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
the most significant aspects of such operate the CAT.11 Under the CAT NMS
authority.21 statements. Plan, the Operating Committee of the
Eduardo A. Aleman, A. Self-Regulatory Organization’s Company (‘‘Operating Committee’’) has
Assistant Secretary. Statement of the Purpose of, and discretion to establish funding for the
[FR Doc. 2017–13097 Filed 6–22–17; 8:45 am] Statutory Basis for, the Proposed Rule Company to operate the CAT, including
BILLING CODE 8011–01–P Change establishing fees that the Participants
will pay, and establishing fees for
1. Purpose Industry Members that will be
SECURITIES AND EXCHANGE Bats BYX Exchange, Inc., Bats BZX implemented by the Participants (‘‘CAT
COMMISSION Exchange, Inc., Bats EDGA Exchange, Fees’’).12 The Participants are required
Inc., Bats EDGX Exchange, Inc., BOX to file with the SEC under Section 19(b)
[Release No. 34–80968; File No. SR–BX– Options Exchange LLC, C2 Options of the Exchange Act any such CAT Fees
2017–029] applicable to Industry Members that the
Exchange, Incorporated, Chicago Board
Self-Regulatory Organizations; Options Exchange, Incorporated, Operating Committee approves.13
NASDAQ BX, Inc.; Notice of Filing of a Chicago Stock Exchange, Inc., Financial Accordingly, the Exchange has filed a
Proposed Rule Change To Adopt Rule Industry Regulatory Authority, Inc. proposed rule change with the SEC to
6896 and Chapter IX, Section 9 (‘‘FINRA’’), Investors’ Exchange LLC, adopt the Consolidated Audit Trail
Miami International Securities Funding Fees, which will require
June 19, 2017. Exchange, LLC, MIAX PEARL, LLC, Industry Members that are Exchange
Pursuant to Section 19(b)(1) of the NASDAQ BX, Inc., Nasdaq GEMX, LLC, members to pay the CAT Fees
Securities Exchange Act of 1934 (‘‘Act’’ Nasdaq ISE, LLC, Nasdaq MRX, LLC,4 determined by the Operating
or ‘‘Exchange Act’’),1 and Rule 19b–4 NASDAQ PHLX LLC, The NASDAQ Committee.14 The Exchange submits
thereunder,2 notice is hereby given that Stock Market LLC, New York Stock this rule filing to adopt Rule 6896 and
on June 9, 2017, NASDAQ BX, Inc. Exchange LLC, NYSE MKT LLC, NYSE Chapter IX, Section 9 (Consolidated
(‘‘BX’’ or ‘‘Exchange’’) filed with the Arca, Inc. and NYSE National, Inc.5
Securities and Exchange Commission (collectively, the ‘‘Participants’’) filed 6 15 U.S.C. 78k–1.
7 17 CFR 242.608.
(‘‘SEC’’ or ‘‘Commission’’) the proposed with the Commission, pursuant to
8 See Letter from the Participants to Brent J.
rule change as described in Items I and
Fields, Secretary, Commission, dated September 30,
II, below, which Items have been 3 Unless otherwise specified, capitalized terms
2014; and Letter from Participants to Brent J. Fields,
prepared by the Exchange. The used in this rule filing are defined as set forth
Secretary, Commission, dated February 27, 2015.
herein, or in the Consolidated Audit Trail Funding
Commission is publishing this notice to Fees Rule, the CAT Compliance Rule Series or in
On December 24, 2015, the Participants submitted
solicit comments on the proposed rule an amendment to the CAT NMS Plan. See Letter
the CAT NMS Plan.
from Participants to Brent J. Fields, Secretary,
change from interested persons. 4 ISE Gemini, LLC, ISE Mercury, LLC and
Commission, dated December 23, 2015.
International Securities Exchange, LLC have been 9 Securities Exchange Act Release No. 77724
I. Self-Regulatory Organization’s renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
(April 27, 2016), 81 FR 30614 (May 17, 2016).
Statement of the Terms of Substance of
asabaliauskas on DSKBBXCHB2PROD with NOTICES
and Nasdaq ISE, LLC, respectively. See Securities 10 Securities Exchange Act Rel. No. 79318
the Proposed Rule Change Exchange Act Release No. 80248 (March 15, 2017),
82 FR 14547 (March 21, 2017); Securities Exchange (November 15, 2016), 81 FR 84696 (November 23,
The Exchange proposes to adopt Rule Act Release No. 80326 (March 29, 2017), 82 FR 2016) (‘‘Approval Order’’).
11 The Plan also serves as the limited liability
6896 and Chapter IX, Section 9 16460 (April 4, 2017); and Securities Exchange Act
Release No. 80325 (March 29, 2017), 82 FR 16445 company agreement for the Company.
(Consolidated Audit Trail—Fee Dispute (April 4, 2017). 12 Section 11.1(b) of the CAT NMS Plan.
5 National Stock Exchange, Inc. has been renamed 13 Id.
21 17 CFR 200.30–3(a)(12). NYSE National, Inc. See Securities Exchange Act 14 See Securities Exchange Act Release No. 80697
1 15 U.S.C. 78s(b)(1). Release No. 79902 (January 30, 2017), 82 FR 9258 (May 16, 2017), 82 FR 23398 (May 22, 2017) (SR–
2 17 CFR 240.19b–4. (February 3, 2017). BX–2017–023).
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Document Created: 2017-06-23 03:37:19
Document Modified: 2017-06-23 03:37:19
| 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 28702 |
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