82 FR 28705 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing of a Proposed Rule Change To Adopt Rule 6896 and Chapter IX, Section 9
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 120 (June 23, 2017)
Federal Register Volume 82, Issue 120 (June 23, 2017)
| Page Range | 28705-28708 | |
| FR Document | 2017-13099 |
[Federal Register Volume 82, Number 120 (Friday, June 23, 2017)] [Notices] [Pages 28705-28708] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-13099] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80968; File No. SR-BX-2017-029] Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing of a Proposed Rule Change To Adopt Rule 6896 and Chapter IX, Section 9 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 BX, Inc. (``BX'' 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 6896 and Chapter IX, Section 9 (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://nasdaqbx.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 6896 and Chapter IX, Section 9 (Consolidated [[Page 28706]] 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. 80697 (May 16, 2017), 82 FR 23398 (May 22, 2017) (SR-BX-2017-023). --------------------------------------------------------------------------- (1) Definitions Paragraph (a) of Proposed Rule 6896 and Chapter IX, Section 9 sets forth the definitions for Proposed Rule 6896 and Chapter IX, Section 9. Paragraph (a)(1) of Proposed Rule 6896 and Chapter IX, Section 9 states that, for purposes of Rule 6896 and Chapter IX, Section 9, the terms ``CAT NMS Plan'', ``Industry Member'', ``Operating Committee'', and ``Participant'' are defined as set forth in the Rule 6810 and Chapter IX, Section 8(a) (Consolidated Audit Trail--Definitions), respectively, 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 6896 and Chapter IX, Section 9. 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 6896 and Chapter IX, Section 9. Paragraph (b) of Proposed Rule 6896 and Chapter IX, Section 9 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 6896 and Chapter IX, Section 9. 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 6896 and Chapter IX, Section 9. 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 [[Page 28707]] 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 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-BX-2017-029 on the subject line. [[Page 28708]] 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-BX-2017-029. 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-BX-2017-029, 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. 2017-13099 Filed 6-22-17; 8:45 am] BILLING CODE 8011-01-P
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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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will have sole discretion to grant or Company. The Industry Member must B. Self-Regulatory Organization’s
deny either request. pay any invoiced CAT Fees that are not Statement on Burden on Competition
The Operating Committee will disputed CAT Fees when due as set Section 6(b)(8) of the Act 20 requires
conduct the review. The review will be forth in the original invoice. that Exchange rules not impose any
made upon the record and will be made Once the dispute regarding CAT Fees burden on competition that is not
after such further proceedings, if any, as is resolved pursuant to these necessary or appropriate. The Exchange
the Operating Committee may order. Procedures, if it is determined that the does not believe that the proposed rule
Based upon such record, the Operating Industry Member owes any of the change will impose any burden on
Committee may affirm, reverse or disputed CAT Fees, then the Industry competition not necessary or
modify, in whole or in part, the decision Member must pay such disputed CAT appropriate in furtherance of the
of the Fee Review Subcommittee. The Fees that are owed as well as interest on purposes of the Act. The Exchange notes
decision of the Operating Committee such disputed CAT Fees from the that the proposed rule change
will be in writing, will be sent to the original due date (that is, 30 days after implements Section 11.5 of the CAT
parties to the proceeding and will be receipt of the original invoice of such NMS Plan approved by the Commission,
final. CAT Fees) until such disputed CAT
The Procedures state that a final and is designed to assist the Exchange
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
Fees by the Operating Committee, or the pursuant to the Plan. Similarly, all
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),
must be provided within 90 days of the 2. Statutory Basis to implement the requirements of the
date on which the Industry Member CAT NMS Plan. Therefore, this is not a
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
the 90-day time limit at its discretion. Act,17 which requires, among other FINRA.
In addition, the Procedures state that things, that the Exchange rules must be
designed to prevent fraudulent and C. Self-Regulatory Organization’s
any notices or other documents may be Statement on Comments on the
served upon the applicant either manipulative acts and practices, to
promote just and equitable principles of Proposed Rule Change Received From
personally or by leaving the same at its, Members, Participants, or Others
his or her place of business or by trade, and, in general, to protect
deposit in the United States post office, investors and the public interest, and No written comments were either
postage prepaid, by registered or not designed to permit unfair solicited or received.
certified mail, addressed to the discrimination between customers, III. Date of Effectiveness of the
applicant at its, his or her last known issuers, brokers and dealer [sic], and Proposed Rule Change and Timing for
business or residence address. The Section 6(b)(4) of the Act,18 which Commission Action
Procedures also state that any time requires that Exchange rules provide for
the equitable allocation of reasonable Within 45 days of the date of
limits imposed under the Procedures for
dues, fees, and other charges among publication of this notice in the Federal
the submission of answers, petitions or
members and issuers and other persons Register or within such longer period
other materials may be extended by
using its facilities. up to 90 days (i) as the Commission may
permission of the Operating Committee.
The Exchange believes that this designate if it finds such longer period
All papers and documents relating to
proposal is consistent with the Act to be appropriate and publishes its
review by the Fee Review Subcommittee
because it implements, interprets or reasons for so finding or (ii) as to which
or the Operating Committee must be
clarifies Section 11.5 of the Plan, and is the Exchange consents, the Commission
submitted to the Fee Review
designed to assist the Exchange and its will:
Subcommittee or Operating Committee, (A) By order approve or disapprove
as applicable. Industry Members in meeting regulatory
such proposed rule change, or
The Procedures also note that obligations pursuant to the Plan. In (B) institute proceedings to determine
decisions on such CAT Fee disputes approving the Plan, the SEC noted that whether the proposed rule change
made pursuant to these Procedures will the Plan ‘‘is necessary and appropriate should be disapproved.
be binding on Industry Members, in the public interest, for the protection
without prejudice to the rights of any of investors and the maintenance of fair IV. Solicitation of Comments
such Industry Member to seek redress and orderly markets, to remove Interested persons are invited to
from the SEC or in any other impediments to, and perfect the submit written data, views, and
appropriate forum. mechanism of a national market system, arguments concerning the foregoing,
Finally, an Industry Member that files or is otherwise in furtherance of the including whether the proposed rule
a written application with the Company purposes of the Act.’’ 19 To the extent change is consistent with the Act.
regarding disputed CAT Fees in that this proposal implements, Comments may be submitted by any of
accordance with these Procedures is not interprets or clarifies the Plan and the following methods:
required to pay such disputed CAT Fees applies specific requirements to
Electronic Comments
asabaliauskas on DSKBBXCHB2PROD with NOTICES
until the dispute is resolved in Industry Members, the Exchange
accordance with these Procedures, believes that this proposal furthers the • Use the Commission’s Internet
including any review by the SEC or in objectives of the Plan, as identified by comment form (http://www.sec.gov/
any other appropriate forum. For these the SEC, and is therefore consistent with rules/sro.shtml); or
purposes, the disputed CAT Fees means the Act. • Send an email to rule-comments@
the amount of the invoiced CAT Fees sec.gov. Please include File Number SR–
that the Industry Member has asserted 17 15U.S.C. 78f(b)(5). BX–2017–029 on the subject line.
pursuant to these Procedures that such 18 15U.S.C. 78f(b)(4).
Industry Member does not owe to the 19 Approval Order at 84697. 20 15 U.S.C. 78f(b)(8).
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![28708 Federal Register / Vol. 82, No. 120 / Friday, June 23, 2017 / Notices
Paper Comments or ‘‘Exchange Act’’),1 and Rule 19b–4 Exchange, LLC, MIAX PEARL, LLC,
• Send paper comments in triplicate thereunder,2 notice is hereby given that NASDAQ BX, Inc., Nasdaq GEMX, LLC,
to Secretary, Securities and Exchange on June 9, 2017, Nasdaq GEMX, LLC Nasdaq ISE, LLC, Nasdaq MRX, LLC,4
Commission, 100 F Street NE., (‘‘GEMX’’ or ‘‘Exchange’’) filed with the NASDAQ PHLX LLC, The NASDAQ
Washington, DC 20549–1090. Securities and Exchange Commission Stock Market LLC, New York Stock
(‘‘SEC’’ or ‘‘Commission’’) the proposed Exchange LLC, NYSE MKT LLC, NYSE
All submissions should refer to File
rule change as described in Items I and Arca, Inc. and NYSE National, Inc.5
Number SR–BX–2017–029. This file
II, below, which Items have been (collectively, the ‘‘Participants’’) filed
number should be included on the
prepared by the Exchange. The with the Commission, pursuant to
subject line if email is used. To help the
Commission is publishing this notice to Section 11A of the Exchange Act 6 and
Commission process and review your
solicit comments on the proposed rule Rule 608 of Regulation NMS
comments more efficiently, please use
change from interested persons. thereunder,7 the National Market
only one method. The Commission will
System Plan Governing the
post all comments on the Commission’s I. Self-Regulatory Organization’s
Consolidated Audit Trail (the ‘‘CAT
Internet Web site (http://www.sec.gov/ Statement of the Terms of Substance of
NMS Plan’’ or ‘‘Plan’’).8 The
rules/sro.shtml). Copies of the the Proposed Rule Change
Participants filed the Plan to comply
submission, all subsequent The Exchange proposes to adopt Rule with Rule 613 of Regulation NMS under
amendments, all written statements 912 (Consolidated Audit Trail—Fee the Exchange Act. The Plan was
with respect to the proposed rule Dispute Resolution) to establish the published for comment in the Federal
change that are filed with the procedures for resolving potential Register on May 17, 2016,9 and
Commission, and all written disputes related to CAT Fees charged to approved by the Commission, as
communications relating to the Industry Members.3 modified, on November 15, 2016.10 The
proposed rule change between the The text of the proposed rule change Plan is designed to create, implement
Commission and any person, other than is available on the Exchange’s Web site and maintain a consolidated audit trail
those that may be withheld from the at http:// (‘‘CAT’’) that would capture customer
public in accordance with the nasdaqgemx.cchwallstreet.com/, at the and order event information for orders
provisions of 5 U.S.C. 552, will be principal office of the Exchange, and at in NMS Securities and OTC Equity
available for Web site viewing and the Commission’s Public Reference Securities, across all markets, from the
printing in the Commission’s Public Room. time of order inception through routing,
Reference Room, 100 F Street NE., cancellation, modification, or execution
Washington, DC 20549, on official II. Self-Regulatory Organization’s
Statement of the Purpose of, and in a single consolidated data source.
business days between the hours of The Plan accomplishes this by creating
10:00 a.m. and 3:00 p.m. Copies of the Statutory Basis for, the Proposed Rule
Change CAT NMS, LLC (the ‘‘Company’’), of
filing also will be available for which each Participant is a member, to
inspection and copying at the principal In its filing with the Commission, the operate the CAT.11 Under the CAT NMS
office of the Exchange. All comments Exchange included statements Plan, the Operating Committee of the
received will be posted without change; concerning the purpose of and basis for Company (‘‘Operating Committee’’) has
the Commission does not edit personal the proposed rule change and discussed discretion to establish funding for the
identifying information from any comments it received on the Company to operate the CAT, including
submissions. You should submit only proposed rule change. The text of these establishing fees that the Participants
information that you wish to make statements may be examined at the will pay, and establishing fees for
available publicly. All submissions places specified in Item IV below. The Industry Members that will be
should refer to File Number SR–BX– Exchange has prepared summaries, set
2017–029, and should be submitted on forth in sections A, B, and C below, of 4 ISE Gemini, LLC, ISE Mercury, LLC and
or before July 14, 2017. the most significant aspects of such International Securities Exchange, LLC have been
statements. renamed Nasdaq GEMX, LLC, Nasdaq MRX, LLC,
For the Commission, by the Division of and Nasdaq ISE, LLC, respectively. See Securities
Trading and Markets, pursuant to delegated A. Self-Regulatory Organization’s Exchange Act Release No. 80248 (March 15, 2017),
authority.21 Statement of the Purpose of, and 82 FR 14547 (March 21, 2017); Securities Exchange
Eduardo A. Aleman, Statutory Basis for, the Proposed Rule Act Release No. 80326 (March 29, 2017), 82 FR
16460 (April 4, 2017); and Securities Exchange Act
Assistant Secretary. Change Release No. 80325 (March 29, 2017), 82 FR 16445
[FR Doc. 2017–13099 Filed 6–22–17; 8:45 am] (April 4, 2017).
1. Purpose 5 National Stock Exchange, Inc. has been renamed
BILLING CODE 8011–01–P
Bats BYX Exchange, Inc., Bats BZX NYSE National, Inc. See Securities Exchange Act
Exchange, Inc., Bats EDGA Exchange, Release No. 79902 (January 30, 2017), 82 FR 9258
(February 3, 2017).
SECURITIES AND EXCHANGE Inc., Bats EDGX Exchange, Inc., BOX 6 15 U.S.C. 78k–1.
COMMISSION Options Exchange LLC, C2 Options 7 17 CFR 242.608.
Exchange, Incorporated, Chicago Board 8 See Letter from the Participants to Brent J.
[Release No. 34–80970; File No. SR–GEMX– Options Exchange, Incorporated, Fields, Secretary, Commission, dated September 30,
2017–24]
Chicago Stock Exchange, Inc., Financial 2014; and Letter from Participants to Brent J. Fields,
Industry Regulatory Authority, Inc. Secretary, Commission, dated February 27, 2015.
Self-Regulatory Organizations; Nasdaq On December 24, 2015, the Participants submitted
asabaliauskas on DSKBBXCHB2PROD with NOTICES
GEMX, LLC; Notice of Filing of a (‘‘FINRA’’), Investors’ Exchange LLC, an amendment to the CAT NMS Plan. See Letter
Proposed Rule Change To Adopt Rule Miami International Securities from Participants to Brent J. Fields, Secretary,
Commission, dated December 23, 2015.
912 1 15 9 Securities Exchange Act Release No. 77724
U.S.C. 78s(b)(1).
June 19, 2017. 2 17CFR 240.19b–4. (April 27, 2016), 81 FR 30614 (May 17, 2016).
3 Unless otherwise specified, capitalized terms 10 Securities Exchange Act Rel. No. 79318
Pursuant to Section 19(b)(1) of the (November 15, 2016), 81 FR 84696 (November 23,
used in this rule filing are defined as set forth
Securities Exchange Act of 1934 (‘‘Act’’ herein, or in the Consolidated Audit Trail Funding 2016) (‘‘Approval Order’’).
Fees Rule, the CAT Compliance Rule Series or in 11 The Plan also serves as the limited liability
21 17 CFR 200.30–3(a)(12). the CAT NMS Plan. company agreement for the Company.
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Document Created: 2017-06-23 03:37:15
Document Modified: 2017-06-23 03:37:15
| 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 28705 |
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