82 FR 59037 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Amendment No. 2 to the Proposed Rule Change To Amend the Schedule of Fees and Assessments To Adopt a Fee Schedule To Establish Fees for Industry Members Related to the National Market System Plan Governing the Consolidated Audit Trail

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 239 (December 14, 2017)

Page Range		59037-59040
FR Document		2017-26919

Federal Register, Volume 82 Issue 239 (Thursday, December 14, 2017)

[Federal Register Volume 82, Number 239 (Thursday, December 14, 2017)]
[Notices]
[Pages 59037-59040]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2017-26919]

[[Page 59037]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82252; File No. SR-CHX-2017-08]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing of Amendment No. 2 to the Proposed Rule Change To
Amend the Schedule of Fees and Assessments To Adopt a Fee Schedule To
Establish Fees for Industry Members Related to the National Market
System Plan Governing the Consolidated Audit Trail

December 8, 2017.
On May 3, 2017, Chicago Stock Exchange, Inc. (``Exchange'' or
``CHX'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt a fee schedule to establish the fees for
Industry Members related to the National Market System Plan Governing
the Consolidated Audit Trail (``CAT NMS Plan''). The proposed rule
change was published in the Federal Register for comment on May 22,
2017.\3\ The Commission received seven comment letters on the proposed
rule change,\4\ and a response to comments from the CAT NMS Plan
Participants.\5\ On June 30, 2017, the Commission temporarily suspended
and initiated proceedings to determine whether to approve or disapprove
the proposed rule change.\6\ The Commission thereafter received seven
comment letters,\7\ and a response to comments from the
Participants.\8\ On November 9, 2017, the Exchange filed Amendment No.
1 to the proposed rule change.\9\ On November 9, 2017, the Commission
extended the time period within which to approve the proposed rule
change or disapprove the proposed rule change to January 14, 2018.\10\
On November 30, 2017, the Exchange filed Amendment No. 2 to 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 from interested persons on Amendment No. 2.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 80691 (May 16,
2017), 82 FR 23344 (May 22, 2017) (``Original Proposal'').
\4\ Since the CAT NMS Plan Participants' proposed rule changes
to adopt fees to be charged to Industry Members to fund the
consolidated audit trail are substantively identical, the Commission
is considering all comments received on the proposed rule changes
regardless of the comment file to which they were submitted. See
text accompanying notes 12-15 infra, for a list of the CAT NMS Plan
Participants. See Letter from Theodore R. Lazo, Managing Director
and Associate General Counsel, Securities Industry and Financial
Markets Association, to Brent J. Fields, Secretary, Commission
(dated June 6, 2017), available at: https://www.sec.gov/comments/sr-batsbzx-2017-38/batsbzx201738-1788188-153228.pdf; Letter from
Patricia L. Cerny and Steven O'Malley, Compliance Consultants, to
Brent J. Fields, Secretary, Commission (dated June 12, 2017),
available at: https://www.sec.gov/comments/sr-cboe-2017-040/cboe2017040-1799253-153675.pdf; Letter from Daniel Zinn, General
Counsel, OTC Markets Group Inc., to Eduardo A. Aleman, Assistant
Secretary, Commission (dated June 13, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-1801717-153703.pdf; Letter from Joanna Mallers, Secretary, FIA Principal
Traders Group, to Brent J. Fields, Secretary, Commission (dated June
22, 2017), available at: https://www.sec.gov/comments/sr-cboe-2017-040/cboe2017040-1819670-154195.pdf; Letter from Stuart J. Kaswell,
Executive Vice President and Managing Director, General Counsel,
Managed Funds Association, to Brent J. Fields, Secretary, Commission
(dated June 23, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-1822454-154283.pdf; and Letter from
Suzanne H. Shatto, Investor, to Commission (dated June 27, 2017),
available at: https://www.sec.gov/comments/sr-batsedgx-2017-22/batsedgx201722-154443.pdf. The Commission also received a comment
letter which is not pertinent to these proposed rule changes. See
Letter from Christina Crouch, Smart Ltd., to Brent J. Fields,
Secretary, Commission (dated June 5, 2017), available at: https://www.sec.gov/comments/sr-batsbzx-2017-38/batsbzx201738-1785545-153152.htm.
\5\ See Letter from CAT NMS Plan Participants to Brent J.
Fields, Secretary, Commission (dated June 29, 2017), available at:
https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-1832632-154584.pdf.
\6\ See Securities Exchange Act Release No. 81067 (June 30,
2017), 82 FR 31656 (July 7, 2017).
\7\ See Letter from W. Hardy Callcott, Partner, Sidley Austin
LLP, to Brent J. Fields, Secretary, Commission (dated July 27,
2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2148338-157737.pdf; Letter from Kevin Coleman,
General Counsel and Chief Compliance Officer, Belvedere Trading LLC,
to Brent J. Fields, Secretary, Commission (dated July 28, 2017),
available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2148360-157740.pdf; Letter from Joanna Mallers,
Secretary, FIA Principal Traders Group, to Brent J. Fields,
Secretary, Commission (dated July 28, 2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2151228-157745.pdf; Letter from Theodore R. Lazo, Managing Director and
Associate General Counsel, SIFMA, to Brent J. Fields, Secretary,
Commission (dated July 28, 2017), available at: https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2150977-157744.pdf; Letter
from Stuart J. Kaswell, Executive Vice President and Managing
Director, General Counsel, Managed Funds Association, to Brent J.
Fields, Secretary, Commission (dated July 28, 2017), available at:
https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2150818-157743.pdf; Letter from John Kinahan, Chief Executive
Officer, Group One Trading, L.P., to Brent J. Fields, Secretary,
Commission (dated August 10, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-2214568-160619.pdf; Letter from Joseph Molluso, Executive Vice President and
CFO, Virtu Financial, to Brent J. Fields, Commission (dated August
18, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/finra2017011-2238648-160830.pdf.
\8\ See Letter from Michael Simon, Chair, CAT NMS Plan Operating
Committee, to Brent J. Fields, Commission, Secretary (dated November
2, 2017), available at https://www.sec.gov/comments/sr-batsbyx-2017-11/batsbyx201711-2674608-161412.pdf.
\9\ Amendment No. 1 to the proposed rule change replaced and
superseded the Original Proposal in its entirety. See Securities
Exchange Act Release No. 82251 (December 8, 2017).
\10\ See Securities Exchange Act Release No. 82049 (November 9,
2017), 82 FR 53549 (November 16, 2017).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

On May 3, 2017, the Chicago Stock Exchange, Inc. (``Exchange'' or
``CHX'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') proposed rule change SR-CHX-2017-08 (the
``Original Proposal''), pursuant to which the Exchange proposed to
adopt a fee schedule to establish the fees for Industry Members related
to the National Market System Plan Governing the Consolidated Audit
Trail (the ``CAT NMS Plan'' or ``Plan'').\11\ On November 9, 2017, the
Exchange filed an amendment to the Original Proposal (``First
Amendment''). The Exchange files this proposed rule change (the
``Second Amendment'') to amend the Original Proposal as amended by the
First Amendment.
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\11\ Unless otherwise specified, capitalized terms used in this
fee filing are defined as set forth herein, the CAT Compliance Rule
Series, in the CAT NMS Plan, or the Original Proposal.
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The text of this proposed rule change is available on the
Exchange's website at (www.chx.com) and in 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 CHX included statements
concerning the purpose of and basis for the proposed rule changes 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 CHX 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 Changes

1. Purpose
The Exchange, BOX Options Exchange LLC, Cboe BYX Exchange, Inc.,
Cboe BZX Exchange, Inc., Cboe

[[Page 59038]]

EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe C2 Exchange, Inc.,
Cboe Exchange, Inc.,\12\ 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,\13\ NASDAQ PHLX LLC, The NASDAQ Stock
Market LLC, New York Stock Exchange LLC, NYSE American LLC,\14\ NYSE
Arca, Inc. and NYSE National, Inc.\15\ (collectively, the ``Plan
Participants'') \16\ filed with the Commission, pursuant to Section 11A
of the Exchange Act \17\ and Rule 608 of Regulation NMS thereunder,\18\
the CAT NMS Plan.\19\ 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,\20\ and
approved by the Commission, as modified, on November 15, 2016.\21\ 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.\22\ 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 Participants (``CAT
Fees'').\23\ 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.\24\
Accordingly, the Exchange submitted the Original Proposal to propose
the Consolidated Audit Trail Funding Fees, which would require Industry
Members that are Exchange members to pay the CAT Fees determined by the
Operating Committee.
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\12\ Note that Bats BYX Exchange, Inc., Bats BZX Exchange, Inc.,
Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., LLC, C2 Options
Exchange, Incorporated, and Chicago Board Options Exchange,
Incorporated, have been renamed Cboe BYX Exchange, Inc., Cboe BZX
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc.,
Cboe C2 Exchange, Inc., Cboe Exchange, Inc., respectively.
\13\ 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).
\14\ NYSE MKT LLC has been renamed NYSE American LLC. See
Securities Exchange Act Rel. No. 80283 (Mar. 21. 2017), 82 FR 15244
(Mar. 27, 2017).
\15\ 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).
\16\ A ``Participant'' is a ``member'' of the Exchange for
purposes of the Act. See CHX Article 1, Rule 1(s). For clarity, the
term ``Plan Participant'' will be used herein when referring to
Participants of the Plan.
\17\ 15 U.S.C. 78k-1.
\18\ 17 CFR 242.608.
\19\ 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.
\20\ Securities Exchange Act Rel. No. 77724 (Apr. 27, 2016), 81
FR 30614 (May 17, 2016).
\21\ Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016), 81
FR 84696 (Nov. 23, 2016) (``Approval Order'').
\22\ The Plan also serves as the limited liability company
agreement for the Company.
\23\ Section 11.1(b) of the CAT NMS Plan.
\24\ Id.
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The Commission published the Original Proposal for public comment
in the Federal Register on May 22, 2017,\25\ and received comments in
response to the Original Proposal or similar fee filings by other Plan
Participants.\26\ On June 30, 2017, the Commission suspended, and
instituted proceedings to determine whether to approve or disapprove,
the Original Proposal.\27\ The Commission received seven comment
letters in response to those proceedings.\28\
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\25\ Exchange Act Rel. No. 80691 (May 16, 2017), 82 FR 23344
(May 22, 2017).
\26\ For a summary of comments, see generally Securities
Exchange Act Rel. No. 81067 (June 30, 2017), 82 FR 31656 (July 7,
2017) (``Suspension Order'').
\27\ Suspension Order.
\28\ See Letter from Stuart J. Kaswell, Executive Vice
President, Managing Director and General Counsel, Managed Funds
Association, to Brent J. Fields, Secretary, SEC (July 28, 2017)
(``MFA Letter''); Letter from Theodore R. Lazo, Managing Director
and Associate General Counsel, SIFMA, to Brent J. Fields, Secretary,
SEC (July 28, 2017) (``SIFMA Letter''); Joanna Mallers, Secretary,
FIA Principal Traders Group, to Brent J. Fields, Secretary, SEC
(July 28, 2017) (``FIA Principal Traders Group Letter''); Letter
from Kevin Coleman, General Counsel & Chief Compliance Officer,
Belvedere Trading LLC, to Brent J. Fields, Secretary, SEC (July 28,
2017) (``Belvedere Letter''); Letter from W. Hardy Callcott, Sidley
Austin LLP, to Brent J. Fields, Secretary, SEC (July 27, 2017)
(``Sidley Letter''); Letter from John Kinahan, Chief Executive
Officer, Group One Trading, L.P., to Brent J. Fields, Secretary, SEC
(Aug. 10, 2017) (``Group One Letter''); and Letter from Joseph
Molluso, Executive Vice President, Virtu Financial, to Brent J.
Fields, Secretary, SEC (Aug. 18, 2017) (``Virtu Financial Letter'').
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In response to the comments on the Original Proposal, the Operating
Committee determined to make the following changes to the funding
model: (1) Adds two additional CAT Fee tiers for Equity Execution
Venues; (2) discounts the market share of Execution Venue ATSs
exclusively trading OTC Equity Securities as well as the market share
of the FINRA over-the-counter reporting facility (``ORF'') by the
average shares per trade ratio between NMS Stocks and OTC Equity
Securities (calculated as 0.17% based on available data from the second
quarter of June 2017) when calculating the market share of Execution
Venue ATS exclusively trading OTC Equity Securities and FINRA; (3)
discounts the Options Market Maker quotes by the trade to quote ratio
for options (calculated as 0.01% based on available data for June 2016
through June 2017) when calculating message traffic for Options Market
Makers; (4) discounts equity market maker quotes by the trade to quote
ratio for equities (calculated as 5.43% based on available data for
June 2016 through June 2017) when calculating message traffic for
equity market makers; (5) decreases the number of tiers for Industry
Members (other than the Execution Venue ATSs) from nine to seven; (6)
changes the allocation of CAT costs between Equity Execution Venues and
Options Execution Venues from 75%/25% to 67%/33%; (7) adjusts tier
percentages and recovery allocations for Equity Execution Venues,
Options Execution Venues and Industry Members (other than Execution
Venue ATSs); (8) focuses the comparability of CAT Fees on the
individual entity level, rather than primarily on the comparability of
affiliated entities; (9) commences invoicing of CAT Reporters as
promptly as possible following the latest of the operative date of the
Consolidated Audit Trail Funding Fees for each of the Plan Participants
and the operative date of the CAT NMS Plan amendment adopting CAT Fees
for Plan Participants; and (10) requires the proposed fees to
automatically expire two years from the operative date of the CAT NMS
Plan amendment adopting CAT Fees for Plan Participants. On November 9,
2017, the Exchange filed the First Amendment and proposed to amend the
Original Proposal to reflect these changes.
The Exchange submits this Second Amendment to revise the proposal
as set

[[Page 59039]]

forth in the First Amendment to discount the OTC Equity Securities
market share of all Execution Venue ATSs trading OTC Equity Securities,
rather than applying the discount solely to those Execution Venue ATSs
that exclusively trade OTC Equity Securities, when calculating the
market share of Execution Venue ATS trading OTC Equity Securities. As
discussed in the First Amendment:

The Operating Committee determined to discount the market share
of Execution Venue ATSs exclusively trading OTC Equity Securities as
well as the market share of the FINRA ORF in recognition of the
different trading characteristics of the OTC Equity Securities
market as compared to the market in NMS Stocks. Many OTC Equity
Securities are priced at less than one dollar--and a significant
number at less than one penny--per share and low-priced shares tend
to trade in larger quantities. Accordingly, a disproportionately
large number of shares are involved in transactions involving OTC
Equity Securities versus NMS Stocks. Because the proposed fee tiers
are based on market share calculated by share volume, Execution
Venue ATSs exclusively trading OTC Equity Securities and FINRA would
likely be subject to higher tiers than their operations may
warrant.\29\
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\29\ See Amendment No. 1 to SR-CHX-2016-08 (November 9, 2017) at
32.

The Operating Committee believes that this argument applies equally to
both Execution Venue ATSs exclusively trading OTC Equity Securities and
to Execution Venue ATSs that trade OTC Equity Securities as well as
other securities. Accordingly, the Exchange proposes to amend paragraph
(b)(2) of the Consolidated Audit Trail Funding Fees to apply the
discount to all Execution Venue ATSs trading OTC Equity Securities.
Specifically, the Exchange proposes to change the parenthetical
regarding the OTC Equity Securities discount in paragraph (b)(2) of the
proposed fee schedule from ``with a discount for Equity ATSs
exclusively trading OTC Equity Securities based on the average shares
per trade ratio between NMS Stocks and OTC Equity Securities'' to
``with a discount for OTC Equity Securities market share of Equity ATSs
trading OTC Equity Securities based on the average shares per trade
ratio between NMS Stocks and OTC Equity Securities.''
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b)(5) of the Act,\30\ which require,
among other things, that the Exchange's 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,\31\ 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. The Exchange believes that the proposed change is
consistent with the Act, and that the proposed fees are reasonable,
equitably allocated and not unfairly discriminatory. In particular, the
Exchange believes that the proposed change would treat all Equity ATSs
trading OTC Equity Securities in a comparable manner when calculating
applicable fees. In addition, the fee structure takes into
consideration distinctions in securities trading operations of CAT
Reporters, including all ATSs trading OTC Equity Securities.
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\30\ 15 U.S.C. 78f(b)(5).
\31\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement of Burden on Competition

Section 6(b)(8) of the Act \32\ require that the Exchange's 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. As previously
described, the Exchange believes that the proposed rule change fairly
and equitably allocates costs among CAT Reporters. In particular, the
proposed fee schedule is structured to impose comparable fees on
similarly situated CAT Reporters. The Exchange believes that the
proposed change would treat all Equity ATSs trading OTC Equity
Securities in a comparable manner when calculating applicable fees. In
addition, the fee structure takes into consideration distinctions in
securities trading operations of CAT Reporters, including all ATSs
trading OTC Equity Securities. Moreover, the Operating Committee
believes that the proposed changes address certain competitive concerns
raised by commenters related to ATSs trading OTC Equity Securities.
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\32\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments Regarding the
Proposed Rule Changes Received From Members, Plan Participants or
Others

The Exchange set forth responses to comments received regarding the
Original Proposal in the First Amendment. In addition, the proposed
changes set forth in this Second Amendment further respond to comments
made regarding ATSs trading OTC Equity Securities.

III. Solicitation of Comments

Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal, as
amended by Amendment No. 1 and Amendment No. 2, is consistent with the
Act. Comments may be submitted by any of the following methods:

Electronic Comments

Use 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-2017-08 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-CHX-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 website (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 website 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CHX-2017-08, and should

[[Page 59040]]

be submitted on or before January 4, 2018.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\33\
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\33\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26919 Filed 12-13-17; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 82, No. 239 / Thursday, December 14, 2017 / Notices 59037

SECURITIES AND EXCHANGE comments from the CAT NMS Plan January 14, 2018.10 On November 30,
COMMISSION Participants.5 On June 30, 2017, the 2017, the Exchange filed Amendment
Commission temporarily suspended and No. 2 to the proposed rule change, as
[Release No. 34–82252; File No. SR–CHX–
2017–08] initiated proceedings to determine described in Items I and II below, which
whether to approve or disapprove the Items have been prepared by the
Self-Regulatory Organizations; proposed rule change.6 The Commission Exchange. The Commission is
Chicago Stock Exchange, Inc.; Notice thereafter received seven comment publishing this notice to solicit
of Filing of Amendment No. 2 to the letters,7 and a response to comments comments from interested persons on
Proposed Rule Change To Amend the from the Participants.8 On November 9, Amendment No. 2.
Schedule of Fees and Assessments To 2017, the Exchange filed Amendment I. Self-Regulatory Organization’s
Adopt a Fee Schedule To Establish No. 1 to the proposed rule change.9 On Statement of the Terms of Substance of
Fees for Industry Members Related to November 9, 2017, the Commission the Proposed Rule Change
the National Market System Plan extended the time period within which
Governing the Consolidated Audit Trail On May 3, 2017, the Chicago Stock
to approve the proposed rule change or Exchange, Inc. (‘‘Exchange’’ or ‘‘CHX’’)
December 8, 2017. disapprove the proposed rule change to filed with the Securities and Exchange
On May 3, 2017, Chicago Stock Commission (‘‘Commission’’ or ‘‘SEC’’)
Exchange, Inc. (‘‘Exchange’’ or ‘‘CHX’’) comments/sr-batsedgx-2017-22/batsedgx201722- proposed rule change SR–CHX–2017–08
filed with the Securities and Exchange 154443.pdf. The Commission also received a (the ‘‘Original Proposal’’), pursuant to
comment letter which is not pertinent to these which the Exchange proposed to adopt
Commission (‘‘Commission’’), pursuant
proposed rule changes. See Letter from Christina
to Section 19(b)(1) of the Securities Crouch, Smart Ltd., to Brent J. Fields, Secretary, a fee schedule to establish the fees for
Exchange Act of 1934 (‘‘Act’’) 1 and Rule Commission (dated June 5, 2017), available at: Industry Members related to the
19b–4 thereunder,2 a proposed rule https://www.sec.gov/comments/sr-batsbzx-2017-38/ National Market System Plan Governing
change to adopt a fee schedule to batsbzx201738-1785545-153152.htm. the Consolidated Audit Trail (the ‘‘CAT
5 See Letter from CAT NMS Plan Participants to
establish the fees for Industry Members NMS Plan’’ or ‘‘Plan’’).11 On November
Brent J. Fields, Secretary, Commission (dated June
related to the National Market System 29, 2017), available at: https://www.sec.gov/
9, 2017, the Exchange filed an
Plan Governing the Consolidated Audit comments/sr-batsbyx-2017-11/batsbyx201711- amendment to the Original Proposal
Trail (‘‘CAT NMS Plan’’). The proposed 1832632-154584.pdf. (‘‘First Amendment’’). The Exchange
rule change was published in the 6 See Securities Exchange Act Release No. 81067 files this proposed rule change (the
Federal Register for comment on May (June 30, 2017), 82 FR 31656 (July 7, 2017). ‘‘Second Amendment’’) to amend the
7 See Letter from W. Hardy Callcott, Partner,
22, 2017.3 The Commission received Original Proposal as amended by the
Sidley Austin LLP, to Brent J. Fields, Secretary,
seven comment letters on the proposed Commission (dated July 27, 2017), available at:
First Amendment.
rule change,4 and a response to https://www.sec.gov/comments/sr-batsbyx-2017-11/ The text of this proposed rule change
batsbyx201711-2148338-157737.pdf; Letter from is available on the Exchange’s website at
1 15 U.S.C. 78s(b)(1). Kevin Coleman, General Counsel and Chief (www.chx.com) and in the
2 17 CFR 240.19b–4. Compliance Officer, Belvedere Trading LLC, to Commission’s Public Reference Room.
3 See Securities Exchange Act Release No. 80691 Brent J. Fields, Secretary, Commission (dated July
(May 16, 2017), 82 FR 23344 (May 22, 2017) 28, 2017), available at: https://www.sec.gov/ II. Self-Regulatory Organization’s
(‘‘Original Proposal’’). comments/sr-batsbyx-2017-11/batsbyx201711- Statement of the Purpose of, and
2148360-157740.pdf; Letter from Joanna Mallers,
4 Since the CAT NMS Plan Participants’ proposed
Secretary, FIA Principal Traders Group, to Brent J.
Statutory Basis for, the Proposed Rule
rule changes to adopt fees to be charged to Industry Change
Members to fund the consolidated audit trail are Fields, Secretary, Commission (dated July 28, 2017),
substantively identical, the Commission is available at: https://www.sec.gov/comments/sr- In its filing with the Commission, the
considering all comments received on the proposed batsbyx-2017-11/batsbyx201711-2151228-
157745.pdf; Letter from Theodore R. Lazo,
CHX included statements concerning
rule changes regardless of the comment file to
which they were submitted. See text accompanying Managing Director and Associate General Counsel, the purpose of and basis for the
notes 12–15 infra, for a list of the CAT NMS Plan SIFMA, to Brent J. Fields, Secretary, Commission proposed rule changes and discussed
Participants. See Letter from Theodore R. Lazo, (dated July 28, 2017), available at: https:// any comments it received on the
Managing Director and Associate General Counsel, www.sec.gov/comments/sr-batsbyx-2017-11/ proposed rule change. The text of these
Securities Industry and Financial Markets batsbyx201711-2150977-157744.pdf; Letter from
Association, to Brent J. Fields, Secretary, Stuart J. Kaswell, Executive Vice President and
statements may be examined at the
Commission (dated June 6, 2017), available at: Managing Director, General Counsel, Managed places specified in Item IV below. The
https://www.sec.gov/comments/sr-batsbzx-2017-38/ Funds Association, to Brent J. Fields, Secretary, CHX has prepared summaries, set forth
batsbzx201738-1788188-153228.pdf; Letter from Commission (dated July 28, 2017), available at: in sections A, B and C below, of the
Patricia L. Cerny and Steven O’Malley, Compliance https://www.sec.gov/comments/sr-batsbyx-2017-11/
Consultants, to Brent J. Fields, Secretary, most significant aspects of such
batsbyx201711-2150818-157743.pdf; Letter from
Commission (dated June 12, 2017), available at: John Kinahan, Chief Executive Officer, Group One statements.
https://www.sec.gov/comments/sr-cboe-2017-040/ Trading, L.P., to Brent J. Fields, Secretary,
cboe2017040-1799253-153675.pdf; Letter from A. Self-Regulatory Organization’s
Commission (dated August 10, 2017), available at:
Daniel Zinn, General Counsel, OTC Markets Group https://www.sec.gov/comments/sr-finra-2017-011/ Statement of the Purpose of, and
Inc., to Eduardo A. Aleman, Assistant Secretary, finra2017011-2214568-160619.pdf; Letter from Statutory Basis for, the Proposed Rule
Commission (dated June 13, 2017), available at:
https://www.sec.gov/comments/sr-finra-2017-011/
Joseph Molluso, Executive Vice President and CFO, Changes
Virtu Financial, to Brent J. Fields, Commission
finra2017011-1801717-153703.pdf; Letter from (dated August 18, 2017), available at: https:// 1. Purpose
Joanna Mallers, Secretary, FIA Principal Traders
www.sec.gov/comments/sr-finra-2017-011/
Group, to Brent J. Fields, Secretary, Commission
finra2017011-2238648-160830.pdf.
The Exchange, BOX Options
(dated June 22, 2017), available at: https:// 8 See Letter from Michael Simon, Chair, CAT Exchange LLC, Cboe BYX Exchange,
www.sec.gov/comments/sr-cboe-2017-040/
sradovich on DSK3GMQ082PROD with NOTICES

cboe2017040-1819670-154195.pdf; Letter from NMS Plan Operating Committee, to Brent J. Fields, Inc., Cboe BZX Exchange, Inc., Cboe
Stuart J. Kaswell, Executive Vice President and Commission, Secretary (dated November 2, 2017),
Managing Director, General Counsel, Managed available at https://www.sec.gov/comments/sr- 10 See Securities Exchange Act Release No. 82049

Funds Association, to Brent J. Fields, Secretary, batsbyx-2017-11/batsbyx201711-2674608- (November 9, 2017), 82 FR 53549 (November 16,
Commission (dated June 23, 2017), available at: 161412.pdf. 2017).
9 Amendment No. 1 to the proposed rule change 11 Unless otherwise specified, capitalized terms
https://www.sec.gov/comments/sr-finra-2017-011/
finra2017011-1822454-154283.pdf; and Letter from replaced and superseded the Original Proposal in used in this fee filing are defined as set forth herein,
Suzanne H. Shatto, Investor, to Commission (dated its entirety. See Securities Exchange Act Release the CAT Compliance Rule Series, in the CAT NMS
June 27, 2017), available at: https://www.sec.gov/ No. 82251 (December 8, 2017). Plan, or the Original Proposal.

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59040 Federal Register / Vol. 82, No. 239 / Thursday, December 14, 2017 / Notices

be submitted on or before January 4, comments from the Participants.5 On November 9, 2017, the Commission
2018. June 30, 2017, the Commission extended the time period within which
For the Commission, by the Division of temporarily suspended and initiated to approve the proposed rule change or
Trading and Markets, pursuant to delegated proceedings to determine whether to disapprove the proposed rule change to
authority.33 approve or disapprove the proposed January 14, 2018.10 On December 4,
Eduardo A. Aleman, rule change.6 The Commission 2017, the Exchange filed Amendment
Assistant Secretary. thereafter received seven comment No. 2 to the proposed rule change, as
letters,7 and a response to comments described in Items I and II below, which
[FR Doc. 2017–26919 Filed 12–13–17; 8:45 am]
from the Participants.8 On November 6, Items have been prepared by the
BILLING CODE 8011–01–P
2017, the Exchange filed Amendment Exchange.11 The Commission is
No. 1 to the proposed rule change.9 On publishing this notice to solicit
SECURITIES AND EXCHANGE comments from interested persons on
(dated June 22, 2017), available at: https://
COMMISSION www.sec.gov/comments/sr-cboe-2017-040/ Amendment No. 2.
cboe2017040-1819670-154195.pdf; Letter from
[Release No. 34–82285; File No. SR– Stuart J. Kaswell, Executive Vice President and I. Self-Regulatory Organization’s
NASDAQ–2017–046] Managing Director, General Counsel, Managed Statement of the Terms of Substance of
Funds Association, to Brent J. Fields, Secretary, the Proposed Rule Change
Self-Regulatory Organizations; The Commission (dated June 23, 2017), available at:
Nasdaq Stock Market LLC.; Notice of https://www.sec.gov/comments/sr-finra-2017-011/
finra2017011-1822454-154283.pdf; and Letter from
On May 2, 2017, The Nasdaq Stock
Filing of Amendment No. 2 to a Suzanne H. Shatto, Investor, to Commission (dated Market LLC filed with the Securities
Proposed Rule Change To Adopt Rule June 27, 2017), available at: https://www.sec.gov/ and Exchange Commission
7004 and Chapter XV, Section 11 comments/sr-batsedgx-2017-22/batsedgx201722-
154443.pdf. The Commission also received a
(‘‘Commission’’ or ‘‘SEC’’) proposed rule
December 11, 2017. comment letter which is not pertinent to these change SR–NASDAQ–2017–046 (the
On May 2, 2017, The Nasdaq Stock
proposed rule changes. See Letter from Christina ‘‘Original Proposal’’), pursuant to which
Crouch, Smart Ltd., to Brent J. Fields, Secretary,
Market LLC. (‘‘Nasdaq’’ or ‘‘Exchange’’) Commission (dated June 5, 2017), available at:
the Exchange proposed to adopt a fee
filed with the Securities and Exchange https://www.sec.gov/comments/sr-batsbzx-2017-38/ schedule to establish the fees for
Commission (‘‘Commission’’), pursuant batsbzx201738-1785545-153152.htm. Industry Members related to the
5 See Letter from CAT NMS Plan Participants to
to Section 19(b)(1) of the Securities National Market System Plan Governing
Brent J. Fields, Secretary, Commission (dated June
Exchange Act of 1934 (‘‘Act’’) 1 and Rule 29, 2017), available at: https://www.sec.gov/ the Consolidated Audit Trail (the ‘‘CAT
19b–4 thereunder,2 a proposed rule comments/sr-batsbyx-2017-11/batsbyx201711- NMS Plan’’ or ‘‘Plan’’).12 The Exchange
1832632-154584.pdf. is filing this proposed rule change (the
change to adopt a fee schedule to 6 See Securities Exchange Act Release No. 81067
establish the fees for Industry Members (June 30, 2017), 82 FR 31656 (July 7, 2017).
‘‘Amendment’’) to amend the Original
related to the National Market System 7 See Letter from W. Hardy Callcott, Partner, Proposal. On November 6, 2017, the
Plan Governing the Consolidated Audit Sidley Austin LLP, to Brent J. Fields, Secretary, Exchange filed an amendment to the
Trail (‘‘CAT NMS Plan’’). The proposed Commission (dated July 27, 2017), available at: Original Proposal (‘‘Amendment No.
https://www.sec.gov/comments/sr-batsbyx-2017-11/
rule change was published in the batsbyx201711-2148338-157737.pdf; Letter from 1’’), which replaced the Original
Federal Register for comment on May Kevin Coleman, General Counsel and Chief Proposal in its entirety. The Exchange is
22, 2017.3 The Commission received Compliance Officer, Belvedere Trading LLC, to now filing this Amendment No. 2 to
Brent J. Fields, Secretary, Commission (dated July
seven comment letters on the proposed 28, 2017), available at: https://www.sec.gov/
replace Amendment No. 1 in its
rule change,4 and a response to comments/sr-batsbyx-2017-11/batsbyx201711- entirety. This Amendment No. 2
2148360-157740.pdf; Letter from Joanna Mallers, describes the changes from the Original
33 17 CFR 200.30–3(a)(12). Secretary, FIA Principal Traders Group, to Brent J. Proposal.
1 15 U.S.C. 78s(b)(1). Fields, Secretary, Commission (dated July 28, 2017),
2 17 CFR 240.19b–4.
available at: https://www.sec.gov/comments/sr- With this Amendment No. 2, the
batsbyx-2017-11/batsbyx201711-2151228- Exchange is including Exhibit 4, which
3 See Securities Exchange Act Release No. 80696
157745.pdf; Letter from Theodore R. Lazo,
(May 16, 2017), 82 FR 23439 (May 22, 2017) Managing Director and Associate General Counsel, reflects the changes to the text of the
(‘‘Original Proposal’’). SIFMA, to Brent J. Fields, Secretary, Commission proposed rule change as set forth in the
4 Since the CAT NMS Plan Participants’ proposed
(dated July 28, 2017), available at: https:// Original Proposal, and Exhibit 5, which
rule changes to adopt fees to be charged to Industry www.sec.gov/comments/sr-batsbyx-2017-11/
Members to fund the consolidated audit trail are batsbyx201711-2150977-157744.pdf; Letter from reflects all proposed changes to the
substantively identical, the Commission is Stuart J. Kaswell, Executive Vice President and Exchange’s current rule text.
considering all comments received on the proposed Managing Director, General Counsel, Managed
rule changes regardless of the comment file to Funds Association, to Brent J. Fields, Secretary, The text of the proposed rule change
which they were submitted. See text accompanying Commission (dated July 28, 2017), available at: is available on the Exchange’s website at
notes 13–16 infra, for a list of the CAT NMS Plan https://www.sec.gov/comments/sr-batsbyx-2017-11/ http://nasdaq.cchwallstreet.com/, at the
Participants. See Letter from Theodore R. Lazo, batsbyx201711-2150818-157743.pdf; Letter from
Managing Director and Associate General Counsel, John Kinahan, Chief Executive Officer, Group One
principal office of the Exchange, and at
Securities Industry and Financial Markets Trading, L.P., to Brent J. Fields, Secretary, the Commission’s Public Reference
Association, to Brent J. Fields, Secretary, Commission (dated August 10, 2017), available at: Room.
Commission (dated June 6, 2017), available at: https://www.sec.gov/comments/sr-finra-2017-011/
https://www.sec.gov/comments/sr-batsbzx-2017-38/ finra2017011-2214568-160619.pdf; Letter from
batsbzx201738-1788188-153228.pdf; Letter from Joseph Molluso, Executive Vice President and CFO, its entirety. Amendment No. 1 is available on the
Patricia L. Cerny and Steven O’Malley, Compliance Virtu Financial, to Brent J. Fields, Commission Commission’s website for Nasdaq at: https://
Consultants, to Brent J. Fields, Secretary, (dated August 18, 2017), available at: https:// www.sec.gov/comments/sr-nasdaq-2017-046/
Commission (dated June 12, 2017), available at: www.sec.gov/comments/sr-finra-2017-011/ nasdaq2017046-2673136-161450.pdf.
sradovich on DSK3GMQ082PROD with NOTICES

10 See Securities Exchange Act Release No. 82049
https://www.sec.gov/comments/sr-cboe-2017-040/ finra2017011-2238648-160830.pdf.
cboe2017040-1799253-153675.pdf; Letter from 8 See Letter from Michael Simon, Chair, CAT (November 9, 2017), 82 FR 53549 (November 16,
Daniel Zinn, General Counsel, OTC Markets Group NMS Plan Operating Committee, to Brent J. Fields, 2017).
11 Amendment No. 2 replaces and supersedes
Inc., to Eduardo A. Aleman, Assistant Secretary, Commission, Secretary (dated November 2, 2017),
Commission (dated June 13, 2017), available at: available at https://www.sec.gov/comments/sr- Amendment No. 1 in its entirety.
https://www.sec.gov/comments/sr-finra-2017-011/ batsbyx-2017-11/batsbyx201711-2674608- 12 Unless otherwise specified, capitalized terms

finra2017011-1801717-153703.pdf; Letter from 161412.pdf. used in this fee filing are defined as set forth herein,
Joanna Mallers, Secretary, FIA Principal Traders 9 Amendment No. 1 to the proposed rule change the CAT Compliance Rule Series, in the CAT NMS
Group, to Brent J. Fields, Secretary, Commission replaced and superseded the Original Proposal in Plan, or the Original Proposal.

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Document Created: 2018-10-25 10:52:16
Document Modified: 2018-10-25 10:52:16

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 59037