82 FR 59900 - Self-Regulatory Organizations; Cboe BZX 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 240 (December 15, 2017)
Federal Register Volume 82, Issue 240 (December 15, 2017)
| Page Range | 59900-59902 | |
| FR Document | 2017-27004 |
[Federal Register Volume 82, Number 240 (Friday, December 15, 2017)] [Notices] [Pages 59900-59902] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-27004] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-82279; File No. SR-BatsBZX-2017-38] Self-Regulatory Organizations; Cboe BZX 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 11, 2017. I. Introduction On May 23, 2017, Bats BZX Exchange Inc., n/k/a Cboe BZX Exchange, Inc., (``Exchange'' or ``SRO'') 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 June 6, 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 3, 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 [[Page 59901]] rule change to January 14, 2018.\10\ On December 7, 2017, the Exchange filed Amendment No. 2 to the proposed rule change, as described in Item II, which Item has been prepared by the Exchange. The Commission is publishing this notice to solicit comments from interested persons on Amendment No. 2. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 80822 (May 31, 2017), 82 FR 26148 (June 6, 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 note 12 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. 34-82278 (December 11, 2017). \10\ See Securities Exchange Act Release No. 82049 (November 9, 2017), 82 FR 53549 (November 16, 2017). --------------------------------------------------------------------------- II. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Amendment On May 23, 2017, Cboe BZX Exchange, Inc. (``SRO'') filed with the Securities and Exchange Commission (``Commission'' or ``SEC'') proposed rule change SR-BatsBZX-2017-38 (the ``Original Proposal''), pursuant to which SRO 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 3, 2017, SRO filed an amendment to the Original Proposal (``First Amendment''). SRO files this proposed rule change (the ``Second Amendment'') to amend the Original Proposal as amended by the First Amendment. --------------------------------------------------------------------------- \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. --------------------------------------------------------------------------- With this Second Amendment, SRO is including Exhibits 4A and 4B, which reflect the changes to the text of the proposed rule change as set forth in the First Amendment, and Exhibits 5A and 5B, which reflect all proposed changes to SRO's current rule text. BOX Options Exchange LLC, Cboe BYX Exchange, Inc., Cboe BZX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe C2 Exchange, Inc., Cboe Exchange, Inc., 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, NASDAQ PHLX LLC, The NASDAQ Stock Market LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE Arca, Inc. and NYSE National, Inc. \12\ (collectively, the ``Participants'') filed with the Commission, pursuant to Section 11A of the Exchange Act \13\ and Rule 608 of Regulation NMS thereunder,\14\ the CAT NMS Plan.\15\ 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,\16\ and approved by the Commission, as modified, on November 15, 2016.\17\ 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.\18\ 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'').\19\ 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.\20\ Accordingly, SRO submitted the Original Proposal to propose the Consolidated Audit Trail Funding Fees, which would require Industry Members that are SRO members to pay the CAT Fees determined by the Operating Committee. --------------------------------------------------------------------------- \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\ 15 U.S.C. 78k-1. \14\ 17 CFR 242.608. \15\ 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. \16\ Securities Exchange Act Rel. No. 77724 (Apr. 27, 2016), 81 FR 30614 (May 17, 2016). \17\ Securities Exchange Act Rel. No. 79318 (Nov. 15, 2016), 81 FR 84696 (Nov. 23, 2016) (``Approval Order''). \18\ The Plan also serves as the limited liability company agreement for the Company. \19\ Section 11.1(b) of the CAT NMS Plan. \20\ Id. --------------------------------------------------------------------------- The Commission published the Original Proposal for public comment in the Federal Register on June 6, 2017,\21\ and received comments in response to the Original Proposal or similar fee filings by other Participants.\22\ On June 30, 2017, the Commission suspended, and instituted proceedings to determine whether to approve or disapprove, the Original Proposal.\23\ The Commission received seven comment letters in response to those proceedings.\24\ --------------------------------------------------------------------------- \21\ Securities Exchange Act Rel. No. 80822 (May 31, 2017), 82 FR 26148 (June 6, 2017) (SR-BatsBZX-2017-38). \22\ For a summary of comments, see generally Securities Exchange Act Rel. No. 81067 (June 30, 2017), 82 FR 31656 (July 7, 2017) (``Suspension Order''). \23\ Suspension Order. \24\ 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); Letter from Theodore R. Lazo, Managing Director and Associate General Counsel, SIFMA, to Brent J. Fields, Secretary, SEC (July 28, 2017); Joanna Mallers, Secretary, FIA Principal Traders Group, to Brent J. Fields, Secretary, SEC (July 28, 2017); Letter from Kevin Coleman, General Counsel & Chief Compliance Officer, Belvedere Trading LLC, to Brent J. Fields, Secretary, SEC (July 28, 2017); Letter from W. Hardy Callcott, Sidley Austin LLP, to Brent J. Fields, Secretary, SEC (July 27, 2017); Letter from John Kinahan, Chief Executive Officer, Group One Trading, L.P., to Brent J. Fields, Secretary, SEC (Aug. 10, 2017); and Letter from Joseph Molluso, Executive Vice President, Virtu Financial, to Brent J. Fields, Secretary, SEC (Aug. 18, 2017). --------------------------------------------------------------------------- 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 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 [[Page 59902]] 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 Participants and the operative date of the CAT NMS Plan amendment adopting CAT Fees for 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 Participants. On November 3, 2017, SRO filed the First Amendment and proposed to amend the Original Proposal to reflect these changes. SRO submits this Second Amendment to the revise the proposal as set 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.\25\ --------------------------------------------------------------------------- \25\ SR-BatsBZX-2017-38, Amendment No. 1 at page 30. 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, SRO 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, SRO 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.'' 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 CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-BatsBZX-2017-38 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-BatsBZX-2017-38. 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-BatsBZX-2017-38, and should be submitted on or before January 5, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\26\ --------------------------------------------------------------------------- \26\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2017-27004 Filed 12-14-17; 8:45 am] BILLING CODE 8011-01-P
![59900 Federal Register / Vol. 82, No. 240 / Friday, December 15, 2017 / Notices
All submissions should refer to File SECURITIES AND EXCHANGE and a response to comments from the
Number SR–NYSE–2017–22. This file COMMISSION CAT NMS Plan Participants.5 On June
number should be included on the 30, 2017, the Commission temporarily
[Release No. 34–82279; File No. SR– suspended and initiated proceedings to
subject line if email is used. To help the BatsBZX–2017–38]
Commission process and review your determine whether to approve or
comments more efficiently, please use Self-Regulatory Organizations; Cboe disapprove the proposed rule change.6
only one method. The Commission will BZX Exchange, Inc.; Notice of Filing of The Commission thereafter received
post all comments on the Commission’s Amendment No. 2 to the Proposed seven comment letters,7 and a response
internet website (http://www.sec.gov/ Rule Change To Amend the Schedule to comments from the Participants.8 On
of Fees and Assessments To Adopt a November 3, 2017, the Exchange filed
rules/sro.shtml). Copies of the
Fee Schedule To Establish Fees for Amendment No. 1 to the proposed rule
submission, all subsequent
Industry Members Related to the change.9 On November 9, 2017, the
amendments, all written statements Commission extended the time period
with respect to the proposed rule National Market System Plan
Governing the Consolidated Audit Trail within which to approve the proposed
change that are filed with the rule change or disapprove the proposed
Commission, and all written December 11, 2017.
communications relating to the finra2017011-1822454-154283.pdf; and Letter from
proposed rule change between the I. Introduction Suzanne H. Shatto, Investor, to Commission (dated
Commission and any person, other than June 27, 2017), available at: https://www.sec.gov/
On May 23, 2017, Bats BZX Exchange comments/sr-batsedgx-2017-22/batsedgx201722-
those that may be withheld from the Inc., n/k/a Cboe BZX Exchange, Inc., 154443.pdf. The Commission also received a
public in accordance with the (‘‘Exchange’’ or ‘‘SRO’’) filed with the comment letter which is not pertinent to these
provisions of 5 U.S.C. 552, will be Securities and Exchange Commission proposed rule changes. See Letter from Christina
Crouch, Smart Ltd., to Brent J. Fields, Secretary,
available for website viewing and (‘‘Commission’’), pursuant to Section Commission (dated June 5, 2017), available at:
printing in the Commission’s Public 19(b)(1) of the Securities Exchange Act https://www.sec.gov/comments/sr-batsbzx-2017-38/
Reference Room, 100 F Street NE, of 1934 (‘‘Act’’) 1 and Rule 19b–4 batsbzx201738-1785545-153152.htm.
5 See Letter from CAT NMS Plan Participants to
Washington, DC 20549, on official thereunder,2 a proposed rule change to
Brent J. Fields, Secretary, Commission (dated June
business days between the hours of adopt a fee schedule to establish the fees 29, 2017), available at: https://www.sec.gov/
10:00 a.m. and 3:00 p.m. Copies of the for Industry Members related to the comments/sr-batsbyx-2017-11/batsbyx201711-
filing also will be available for National Market System Plan Governing 1832632-154584.pdf.
6 See Securities Exchange Act Release No. 81067
inspection and copying at the principal the Consolidated Audit Trail (‘‘CAT
(June 30, 2017), 82 FR 31656 (July 7, 2017).
office of the Exchange. All comments NMS Plan’’). The proposed rule change 7 See Letter from W. Hardy Callcott, Partner,
received will be posted without change. was published in the Federal Register Sidley Austin LLP, to Brent J. Fields, Secretary,
for comment on June 6, 2017.3 The Commission (dated July 27, 2017), available at:
Persons submitting comments are
Commission received seven comment https://www.sec.gov/comments/sr-batsbyx-2017-11/
cautioned that we do not redact or edit batsbyx201711-2148338-157737.pdf; Letter from
letters on the proposed rule change,4
personal identifying information from Kevin Coleman, General Counsel and Chief
comment submissions. You should Compliance Officer, Belvedere Trading LLC, to
1 15 U.S.C. 78s(b)(1). Brent J. Fields, Secretary, Commission (dated July
submit only information that you wish 2 17 CFR 240.19b–4. 28, 2017), available at: https://www.sec.gov/
to make available publicly. All 3 See Securities Exchange Act Release No. 80822 comments/sr-batsbyx-2017-11/batsbyx201711-
submissions should refer to File (May 31, 2017), 82 FR 26148 (June 6, 2017) 2148360-157740.pdf; Letter from Joanna Mallers,
(‘‘Original Proposal’’). Secretary, FIA Principal Traders Group, to Brent J.
Number SR–NYSE–2017–22, and 4 Since the CAT NMS Plan Participants’ proposed Fields, Secretary, Commission (dated July 28, 2017),
should be submitted on or before rule changes to adopt fees to be charged to Industry available at: https://www.sec.gov/comments/sr-
January 5, 2018. Members to fund the consolidated audit trail are batsbyx-2017-11/batsbyx201711-2151228-
substantively identical, the Commission is 157745.pdf; Letter from Theodore R. Lazo,
For the Commission, by the Division of considering all comments received on the proposed Managing Director and Associate General Counsel,
Trading and Markets, pursuant to delegated rule changes regardless of the comment file to SIFMA, to Brent J. Fields, Secretary, Commission
authority.29 which they were submitted. See text accompanying (dated July 28, 2017), available at: https://
note 12 infra, for a list of the CAT NMS Plan www.sec.gov/comments/sr-batsbyx-2017-11/
Robert W. Errett, Participants. See Letter from Theodore R. Lazo, batsbyx201711-2150977-157744.pdf; Letter from
Deputy Secretary. Managing Director and Associate General Counsel, Stuart J. Kaswell, Executive Vice President and
Securities Industry and Financial Markets Managing Director, General Counsel, Managed
[FR Doc. 2017–27021 Filed 12–14–17; 8:45 am] Funds Association, to Brent J. Fields, Secretary,
Association, to Brent J. Fields, Secretary,
BILLING CODE 8011–01–P Commission (dated June 6, 2017), available at: Commission (dated July 28, 2017), available at:
https://www.sec.gov/comments/sr-batsbzx-2017-38/ https://www.sec.gov/comments/sr-batsbyx-2017-11/
batsbzx201738-1788188-153228.pdf; Letter from batsbyx201711-2150818-157743.pdf; Letter from
Patricia L. Cerny and Steven O’Malley, Compliance John Kinahan, Chief Executive Officer, Group One
Consultants, to Brent J. Fields, Secretary, Trading, L.P., to Brent J. Fields, Secretary,
Commission (dated June 12, 2017), available at: Commission (dated August 10, 2017), available at:
https://www.sec.gov/comments/sr-cboe-2017-040/ https://www.sec.gov/comments/sr-finra-2017-011/
cboe2017040-1799253-153675.pdf; Letter from finra2017011-2214568-160619.pdf; Letter from
Daniel Zinn, General Counsel, OTC Markets Group Joseph Molluso, Executive Vice President and CFO,
Inc., to Eduardo A. Aleman, Assistant Secretary, Virtu Financial, to Brent J. Fields, Commission
Commission (dated June 13, 2017), available at: (dated August 18, 2017), available at: https://
https://www.sec.gov/comments/sr-finra-2017-011/ www.sec.gov/comments/sr-finra-2017-011/
finra2017011-1801717-153703.pdf; Letter from finra2017011-2238648-160830.pdf.
8 See Letter from Michael Simon, Chair, CAT
Joanna Mallers, Secretary, FIA Principal Traders
sradovich on DSK3GMQ082PROD with NOTICES
Group, to Brent J. Fields, Secretary, Commission NMS Plan Operating Committee, to Brent J. Fields,
(dated June 22, 2017), available at: https:// Commission, Secretary (dated November 2, 2017),
www.sec.gov/comments/sr-cboe-2017-040/ available at: https://www.sec.gov/comments/sr-
cboe2017040-1819670-154195.pdf; Letter from batsbyx-2017-11/batsbyx201711-2674608-
Stuart J. Kaswell, Executive Vice President and 161412.pdf.
Managing Director, General Counsel, Managed 9 Amendment No. 1 to the proposed rule change
Funds Association, to Brent J. Fields, Secretary, replaced and superseded the Original Proposal in
Commission (dated June 23, 2017), available at: its entirety. See Securities Exchange Act Release
29 17 CFR 200.30–3(a)(12). https://www.sec.gov/comments/sr-finra-2017-011/ No. 34–82278 (December 11, 2017).
VerDate Sep<11>2014 23:42 Dec 14, 2017 Jkt 244001 PO 00000 Frm 00326 Fmt 4703 Sfmt 4703 E:\FR\FM\15DEN1.SGM 15DEN1](https://thefederalregister.org/doc/82_FR_60140/page/1.svg)
![59902 Federal Register / Vol. 82, No. 240 / Friday, December 15, 2017 / Notices
than Execution Venue ATSs); (8) paragraph (b)(2) of the proposed fee personal identifying information from
focuses the comparability of CAT Fees schedule from ‘‘with a discount for comment submissions. You should
on the individual entity level, rather Equity ATSs exclusively trading OTC submit only information that you wish
than primarily on the comparability of Equity Securities based on the average to make available publicly. All
affiliated entities; (9) commences shares per trade ratio between NMS submissions should refer to File
invoicing of CAT Reporters as promptly Stocks and OTC Equity Securities’’ to Number SR–BatsBZX–2017–38, and
as possible following the latest of the ‘‘with a discount for OTC Equity should be submitted on or before
operative date of the Consolidated Audit Securities market share of Equity ATSs January 5, 2018.
Trail Funding Fees for each of the trading OTC Equity Securities based on For the Commission, by the Division of
Participants and the operative date of the average shares per trade ratio Trading and Markets, pursuant to delegated
the CAT NMS Plan amendment between NMS Stocks and OTC Equity authority.26
adopting CAT Fees for Participants; and Securities.’’ Robert W. Errett,
(10) requires the proposed fees to III. Solicitation of Comments Deputy Secretary.
automatically expire two years from the [FR Doc. 2017–27004 Filed 12–14–17; 8:45 am]
operative date of the CAT NMS Plan Interested persons are invited to
amendment adopting CAT Fees for submit written data, views and BILLING CODE 8011–01–P
Participants. On November 3, 2017, SRO arguments concerning the foregoing,
filed the First Amendment and including whether the proposal, as
amended by Amendment No. 1 and SECURITIES AND EXCHANGE
proposed to amend the Original COMMISSION
Proposal to reflect these changes. Amendment No. 2, is consistent with
SRO submits this Second Amendment the Act. Comments may be submitted by [Release No. 34–82269; File No. SR–
to the revise the proposal as set forth in any of the following methods: BatsEDGA–2017–13]
the First Amendment to discount the Electronic Comments
OTC Equity Securities market share of Self-Regulatory Organizations; Cboe
• Use the Commission’s internet EDGA Exchange, Inc.; Notice of Filing
all Execution Venue ATSs trading OTC
comment form (http://www.sec.gov/ of Amendment No. 2 to the Proposed
Equity Securities, rather than applying
rules/sro.shtml); or Rule Change To Amend the Schedule
the discount solely to those Execution • Send an email to rule-comments@
Venue ATSs that exclusively trade OTC of Fees and Assessments To Adopt a
sec.gov. Please include File Number SR– Fee Schedule To Establish Fees for
Equity Securities, when calculating the BatsBZX–2017–38 on the subject line.
market share of Execution Venue ATS Industry Members Related to the
trading OTC Equity Securities. As Paper Comments National Market System Plan
Governing the Consolidated Audit Trail
discussed in the First Amendment: • Send paper comments in triplicate
The Operating Committee determined to to Secretary, Securities and Exchange December 11, 2017.
discount the market share of Execution Commission, 100 F Street NE,
Venue ATSs exclusively trading OTC Equity Washington, DC 20549–1090. I. Introduction
Securities as well as the market share of the All submissions should refer to File On May 16, 2017, Bats EDGA
FINRA ORF in recognition of the different Exchange, Inc., n/k/a Cboe EDGA
Number SR–BatsBZX–2017–38. This file
trading characteristics of the OTC Equity
Securities market as compared to the market number should be included on the Exchange, Inc., (‘‘Exchange’’ or ‘‘SRO’’)
in NMS Stocks. Many OTC Equity Securities subject line if email is used. To help the filed with the Securities and Exchange
are priced at less than one dollar—and a Commission process and review your Commission (‘‘Commission’’), pursuant
significant number at less than one penny— comments more efficiently, please use to Section 19(b)(1) of the Securities
per share and low-priced shares tend to trade only one method. The Commission will Exchange Act of 1934 (‘‘Act’’) 1 and Rule
in larger quantities. Accordingly, a post all comments on the Commission’s 19b–4 thereunder,2 a proposed rule
disproportionately large number of shares are internet website (http://www.sec.gov/ change to adopt a fee schedule to
involved in transactions involving OTC rules/sro.shtml). Copies of the establish the fees for Industry Members
Equity Securities versus NMS Stocks. related to the National Market System
Because the proposed fee tiers are based on
submission, all subsequent
market share calculated by share volume, amendments, all written statements Plan Governing the Consolidated Audit
Execution Venue ATSs exclusively trading with respect to the proposed rule Trail (‘‘CAT NMS Plan’’). The proposed
OTC Equity Securities and FINRA would change that are filed with the rule change was published in the
likely be subject to higher tiers than their Commission, and all written Federal Register for comment on June 1,
operations may warrant.25 communications relating to the 2017.3 The Commission received seven
The Operating Committee believes proposed rule change between the comment letters on the proposed rule
that this argument applies equally to Commission and any person, other than change,4 and a response to comments
both Execution Venue ATSs exclusively those that may be withheld from the
26 17 CFR 200.30–3(a)(12).
trading OTC Equity Securities and to public in accordance with the
1 15 U.S.C. 78s(b)(1).
Execution Venue ATSs that trade OTC provisions of 5 U.S.C. 552, will be 2 17 CFR 240.19b–4.
Equity Securities as well as other available for website viewing and 3 See Securities Exchange Act Release No. 80784
securities. Accordingly, SRO proposes printing in the Commission’s Public (May 26, 2017), 82 FR 25448 (June 1, 2017)
to amend paragraph (b)(2) of the Reference Room, 100 F Street NE, (‘‘Original Proposal’’).
Consolidated Audit Trail Funding Fees Washington, DC 20549, on official 4 Since the CAT NMS Plan Participants’ proposed
business days between the hours of rule changes to adopt fees to be charged to Industry
sradovich on DSK3GMQ082PROD with NOTICES
to apply the discount to all Execution Members to fund the consolidated audit trail are
Venue ATSs trading OTC Equity 10:00 a.m. and 3:00 p.m. Copies of the substantively identical, the Commission is
Securities. Specifically, SRO proposes filing also will be available for considering all comments received on the proposed
to change the parenthetical regarding inspection and copying at the principal rule changes regardless of the comment file to
office of the Exchange. All comments which they were submitted. See text accompanying
the OTC Equity Securities discount in note 12 infra, for a list of the CAT NMS Plan
received will be posted without change. Participants. See Letter from Theodore R. Lazo,
25 SR–BatsBZX–2017–38, Amendment No. 1 at Persons submitting comments are Managing Director and Associate General Counsel,
page 30. cautioned that we do not redact or edit Securities Industry and Financial Markets
VerDate Sep<11>2014 23:42 Dec 14, 2017 Jkt 244001 PO 00000 Frm 00328 Fmt 4703 Sfmt 4703 E:\FR\FM\15DEN1.SGM 15DEN1](https://thefederalregister.org/doc/82_FR_60140/page/3.svg)
Document Created: 2017-12-15 03:37:10
Document Modified: 2017-12-15 03:37:10
| 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 59900 |
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