83 FR 20126 - Consolidated Tape Association; Order of Summary Abrogation of the Twenty-Third Charges Amendment to the Second Restatement of the CTA Plan and the Fourteenth Charges Amendment to the Restated CQ Plan
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 88 (May 7, 2018)
Federal Register Volume 83, Issue 88 (May 7, 2018)
| Page Range | 20126-20129 | |
| FR Document | 2018-09579 |
[Federal Register Volume 83, Number 88 (Monday, May 7, 2018)] [Notices] [Pages 20126-20129] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-09579] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83148; File No. SR-CTA/CQ-2018-01] Consolidated Tape Association; Order of Summary Abrogation of the Twenty-Third Charges Amendment to the Second Restatement of the CTA Plan and the Fourteenth Charges Amendment to the Restated CQ Plan May 1, 2018. I. Introduction Notice is hereby given that the Securities and Exchange Commission (``Commission''), pursuant to Section 11A of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 608 thereunder,\2\ is summarily abrogating the Twenty-Third Charges Amendment [[Page 20127]] to the Second Restatement of the Consolidated Tape Association (``CTA'') Plan and the Fourteenth Charges Amendment to the Restated Consolidated Quotation (``CQ'') Plan (collectively, ``Plans'').\3\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78k-1. \2\ 17 CFR 242.608. \3\ See Securities Exchange Act Release Nos. 10787 (May 10, 1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan effective); 15009 (July 28, 1978), 43 FR 34851 (August 7, 1978) (temporarily authorizing the CQ Plan); and 16518 (January 22, 1980), 45 FR 6521 (January 28, 1980) (permanently authorizing the CQ Plan). The most recent restatement of both Plans was in 1995. The CTA Plan, pursuant to which markets collect and disseminate last sale price information for non-NASDAQ listed securities, is a ``transaction reporting plan'' under Rule 601 under the Act, 17 CFR 242.601, and a ``national market system plan'' under Rule 608 under the Act, 17 CFR 242.608. The CQ Plan, pursuant to which markets collect and disseminate bid/ask quotation information for listed securities, is a national market system plan. --------------------------------------------------------------------------- On March 5, 2018 \4\ the participants of the Plans (``Participants'') \5\ filed with the Commission a proposal to amend the Plans (``Amendment''), pursuant to Section 11A of the Act,\6\ and Rule 608 thereunder.\7\ The Amendment, which was effective upon filing pursuant to Rule 608(b)(3)(i) of Regulation NMS,\8\ modified the Plans' fee schedules to adopt changes to the Broker-Dealer Enterprise Maximum Monthly Charge and Per-Quote-Packet Charges. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 823937 (March 23, 2018), 83 FR 13539 (March 29, 2018) (``Notice of Filing''). \5\ The Participants are: Cboe BYX Exchange; Inc.; Cboe BZX Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.; Chicago Board Options Exchange, Incorporated; Chicago Stock Exchange, Inc.; Financial Industry Regulatory Authority, Inc.; Investors Exchange LLC; Nasdaq BX, Inc.; Nasdaq ISE, LLC; Nasdaq PHLX LLC; The Nasdaq Stock Market LLC; New York Stock Exchange LLC; NYSE Arca, Inc.; NYSE American LLC; NYSE National, Inc. \6\ 15 U.S.C. 78k-1. \7\ 17 CFR 242.608. \8\ 17 CFR 242.608(b)(3)(i). --------------------------------------------------------------------------- II. Description of the Amendment A. Amendments to Enterprise Cap The Amendment modified the Plans' fee schedules to increase the Broker-Dealer Enterprise Maximum Monthly Charge (``Enterprise Cap'') from $686,400 to $1,260,000 for Network A and from $520,000 to $680,000 for Network B. The Participants stated that as a result of industry consolidation, the Nonprofessional Subscriber base for entities subject to the Enterprise Cap may suddenly increase, and whereas before two entities may have benefited slightly from the Enterprise Cap, a combined entity could achieve a substantial decrease in fees by using the Enterprise Cap. Consequently, the Participants stated, the increase of the Enterprise Cap was designed to maintain the status quo and should not have, in conjunction with the Per-Quote-Packet Charges described below, resulted in an increase of revenue to the Plans or fees for any particular entity.\9\ --------------------------------------------------------------------------- \9\ The Participants noted that very few entities take advantage of the Enterprise Cap. --------------------------------------------------------------------------- In addition, the Amendment modified the Plans to remove a provision relating to annual increases of the Enterprise Cap after a two-thirds vote of the Participants. In 2013,\10\ the Participants amended the mechanism by which the Enterprise Cap would increase, from an automatic increase based on volume, to a requirement for an affirmative vote of the Participants. The Participants have not used this mechanism to increase the Enterprise Cap. The Participants believe that any future changes to the Enterprise Cap should be filed with the Commission and subject to public comment. Consequently, the Participants proposed to delete this provision. --------------------------------------------------------------------------- \10\ See Securities Exchange Act Release No. 70010 (July 19, 2013), 78 FR 44984 (July 25, 2013). --------------------------------------------------------------------------- B. Amendments to the Per-Quote-Packet Charges The Participants stated that because of the increase in the Enterprise Cap, there could have been broker-dealers that used the Enterprise Cap that, without a corresponding offset, could have faced an increase in fees. To offset the potential fee increase, the Amendment modified the text of the Plans' fee schedules to reduce the Plans' Per-Quote-Packet Charges for broker-dealers with 500,000 or more Nonprofessional Subscribers from $.0075 to $.0025. The Participants stated that by implementing a tiered structure for Per-Quote-Packet Charges, the proposal was designed to provide an offset to those firms most likely affected by the Enterprise Cap increase (i.e., those with a large Nonprofessional Subscriber base). Additionally, the Participants stated that the proposal would align the tiered structures for Networks A and B with those of Network C. Pursuant to Rule 608(b)(3)(i) under Regulation NMS,\11\ the Participants designated the Amendment as establishing or changing a fee or other charge collected on their behalf in connection with access to, or use of, the facilities contemplated by the Plans. As a result, the Amendment was effective upon filing with the Commission. The Amendment was published for comment in the Federal Register on March 29, 2018.\12\ --------------------------------------------------------------------------- \11\ 17 CFR 242.608(b)(3)(i). \12\ See Notice of Filing, supra note 4. --------------------------------------------------------------------------- III. Summary of Comments The Commission received two comment letters in response to the Notice of Filing,\13\ and a response thereto from the Participants.\14\ Healthy Markets \15\ urged the Commission to summarily abrogate the Amendment on grounds that it is not appropriately justified, is discriminatory, and is contrary to the original purpose of the Enterprise Cap. Healthy Markets also stated that the Enterprise Cap should be eliminated as part of the broader process of modernizing the CTA and CQ fee schedules. --------------------------------------------------------------------------- \13\ See letters from Tyler Gellasch, Executive Director, Healthy Markets Association (``Healthy Markets''), dated April 11, 2018 (``Healthy Markets Letter''), and Melissa MacGregor, Managing Director, Securities Industry and Financial Markets Association (``SIFMA''), dated April 19, 2018 (``SIFMA Letter''), to Brent J. Fields, Secretary, Commission. \14\ See Letter from Emily Kasparov to Brent J. Fields, Secretary, Commission, dated April 27, 2018 (``Participants' Response''). \15\ Healthy Markets also commented on other items that are not germane to the instant filing, such, as SR-CTA/CQ-2017-14 and broader recommendations for NMS Plans and Securities Information Processor Fees. --------------------------------------------------------------------------- Specifically, Healthy Markets stated that the Participants failed to support their representations regarding industry consolidation and noted that the Amendment lacks any detailed justification or analysis.\16\ In addition, Healthy Markets stated that the Participants' representation that the Amendment may be revenue neutral does not demonstrate that the Amendment is consistent with the Act whose goal is to protect the public interest by, amongst other things, promoting competition, the reasonable allocation of fees, and non- discrimination.\17\ Healthy Markets also argues that the Amendment is discriminatory in that it appears to target a very small segment of firms, possibly a single firm.\18\ Lastly, Healthy Market stated that the Enterprise Cap should be eliminated as part of the broader process of modernizing the CTA and CQ fee schedules to simply allow for the non-discriminatory, consistent access and pricing of public market data.\19\ --------------------------------------------------------------------------- \16\ See Healthy Markets Letter, supra note 13 at 6. \17\ See id. at 6-7. \18\ See id. at 6. \19\ See id. at 8. --------------------------------------------------------------------------- In its comment letter, SIFMA stated that the information provided by the Participants in the Amendment with respect to, among other things, cost, revenue, and customer data, is insufficient to permit the Commission to determine whether the Amendment is [[Page 20128]] consistent with the Act.\20\ SIFMA stated that only the Participants, and not SIFMA or other market participants, possess the information necessary to evaluate the Amendment.\21\ SIFMA also stated that, costs, and not revenue neutrality as the Participants suggest, is the relevant factor in assessing whether the Amendment is consistent with the Act.\22\ --------------------------------------------------------------------------- \20\ See SIFMA Letter, supra note 13 at 1-3. SIFMA also stated that absent data demonstrating a reasonable relationship between core data revenues and the costs of collecting and disseminating data, it is doubtful that maintaining the status quo with respect to market data fees is consistent with the Act. According to SIFMA, the governance structure for NMS plans is broken and market data fees are not restrained by competitive forces, thus maintaining the status quo with respect to market data fees could impose a burden on competition. See id. at 3. \21\ See id. at 1-3. \22\ See id. at 2. --------------------------------------------------------------------------- In response, the Participants stated that the comments received are misguided or incorrect, and require no further response from the Participants.\23\ In addition, the Participants stated that market participants have access to the information necessary to assess the impact of the Amendments on revenue,\24\ asserting that data subscribers can readily apply the new fee schedule to their historical usage to project future usage and thereby determine whether the Participants' representations concerning the effect on revenue hold true.\25\ The Participants also noted that only industry associations commented on the Amendments, and that individual market data subscribers could have commented on the Amendments had the Participants'analysis been incorrect.\26\ --------------------------------------------------------------------------- \23\ See Participants' Response, supra note 14 at 1-2. \24\ See Participants' Response, supra note 14 at 1. \25\ See id. \26\ See id. --------------------------------------------------------------------------- IV. Discussion Pursuant to Section 11A of the Act \27\ and Rule 608(b)(3)(iii) of Regulation NMS thereunder,\28\ at any time within 60 days of the filing of any such amendment, the Commission may summarily abrogate the amendment and require that the amendment be re-filed in accordance with paragraph (a)(1) of Rule 608 \29\ and reviewed in accordance with paragraph (b)(2) of Rule 608,\30\ if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanisms of, a national market system or otherwise in furtherance of the purposes of the Act. The Commission is concerned that the information and justifications provided by the Participants are not sufficient for the Commission to determine whether the Amendment is consistent with the Act. Accordingly, the Commission believes that the procedures set forth in Rule 608(b)(2) \31\ will provide a more appropriate mechanism for determining whether the Amendment is consistent with the Act. --------------------------------------------------------------------------- \27\ 15 U.S.C. 78k-1. \28\ 17 CFR 242.608. \29\ 17 CFR 242.608(a)(1). \30\ 17 CFR 242.608(b)(2). \31\ Id. --------------------------------------------------------------------------- The Commission believes that the Amendment raises questions as to whether the changes will result in fees that are fair and reasonable, not unreasonably discriminatory,\32\ and that will not impose an undue or inappropriate burden on competition under Section 11A of the Act.\33\ --------------------------------------------------------------------------- \32\ 17 CFR 242.603(a)(1)-(2), 17 CFR 242.608, and 15 U.S.C. 78k-1(a)(1)(C). \33\ 15 U.S.C. 78k-1 --------------------------------------------------------------------------- The Commission does not believe that the Participants have provided sufficient information regarding, or adequate justification for, the changes described in the Amendment. While the Participants represent that they used certain data to calibrate the fee changes to achieve a revenue neutral outcome \34\ none of that data is provided in the Amendment, nor do the Participants provide any such information in their response.\35\ The Commission is also concerned that the Participants provided little information concerning the basis for, the anticipated revenue effects of, and the effects on market participants from, the Amendment. The Participants have not provided sufficient information for the changes to be closely scrutinized for fairness and reasonableness and the Amendment lacks support for the basis of, as well as the application and likely effect of, the fees to determine that the Amendment is not unreasonably discriminatory. --------------------------------------------------------------------------- \34\ See Notice of Filing, supra note 4 at 13541. \35\ See Participants' Response, supra note 14. --------------------------------------------------------------------------- In addition, the Enterprise Cap is approximately doubled for Network A, while it is being raised by substantially less than half from $520,000 to $680,000 for Network B. The Participants have provided no justification for this difference. Similarly, the Participants did not provide information to support their assertion that the increase of the Enterprise Cap is designed to maintain the status quo and should not, in conjunction with the Per-Quote Packet fee changes, result in an increase of revenue to the Plans or of fees to any particular entity.\36\ The Participants lowered the Per-Quote Packet fee for firms with at least 500,000 non-professional accounts. However, the filing does not indicate why the Participants chose to limit the lower fee to firms that have 500,000 non-professional subscribers. The Participants state that the Amendment does not impose any burden on competition that is not necessary or appropriate because the fees are revenue neutral and maintain the status quo. Because the Participants did not provide the Commission with sufficient data to support their assertion that the fee change should not result in an increase of revenue to the Plans or to fees for any particular entity, the Commission is unable to evaluate the Participants' assertions that the Amendment does not impose any burden on competition that is not necessary or appropriate. --------------------------------------------------------------------------- \36\ Id. at 13540. --------------------------------------------------------------------------- V. Conclusion For the reasons stated above, the Commission believes it necessary or appropriate to summarily abrogate the Amendment and terminate its status as immediately effective. The Commission believes that the procedures set forth in Rule 608(b)(2) of Regulation NMS \37\ will provide a more appropriate mechanism for determining whether the Amendment is consistent with the Act. Therefore, the Commission believes that it is necessary or appropriate in the public interest, for the protection of investors, or the maintenance of fair and orderly markets, to remove impediments to, and perfect the mechanisms of, a national market system or otherwise in furtherance of the purposes of the Act, to summarily abrogate the Amendment. --------------------------------------------------------------------------- \37\ 17 CFR 242.608(b)(2). --------------------------------------------------------------------------- It is therefore ordered, pursuant to Section 11A of the Act,\38\ and Rule 608 thereunder,\39\ that the Twenty-Third Charges Amendment to the CTA Plan and the Fourteenth Charges Amendment to the Restated CQ Plan (SR-CTA/CQ-2018-01) be, and hereby is, summarily abrogated. If the Participants choose to re-file the Amendment, they must do so pursuant to Section 11A of the Act and the Amendment must be re-filed in accordance with paragraph (a)(1) of Rule 608 of Regulation NMS \40\ for review in accordance with paragraph (b)(2) of Rule 608 of Regulation NMS.\41\ --------------------------------------------------------------------------- \38\ 15 U.S.C. 78k-1. \39\ 17 CFR 242.608. \40\ 17 CFR 242.608(a)(1). \41\ 17 CFR 242.608(b)(2). [[Page 20129]] --------------------------------------------------------------------------- By the Commission. Brent J. Fields, Secretary. [FR Doc. 2018-09579 Filed 5-4-18; 8:45 am] BILLING CODE 8011-01-P
![20126 Federal Register / Vol. 83, No. 88 / Monday, May 7, 2018 / Notices
The Marker Order Spread Protection Exchange has requested that the only one method. The Commission will
feature will provide market participants Commission waive the 30-day operative post all comments on the Commission’s
with additional price protection from delay so that the proposed rule change internet website (http://www.sec.gov/
anomalous executions. The Exchange will become operative on filing. The rules/sro.shtml). Copies of the
does not believe the proposal creates Exchange states that waiver of the 30- submission, all subsequent
any significant impact on competition. day operative delay would allow the amendments, all written statements
The Exchange does not believe that Exchange to immediately offer a with respect to the proposed rule
accounting for Non-Displayed Orders, mandatory risk protection, similar to change that are filed with the
except for all-or-none orders, or NOM, for all market participants Commission, and all written
repricing due to trade-through and transacting in simple orders to protect communications relating to the
locked and crossed market restrictions market participants from entering proposed rule change between the
creates an undue burden on competition Market Orders outside of a reasonable Commission and any person, other than
because it will serve to provide range for execution. Based on the those that may be withheld from the
members with additional information in foregoing, the Commission believes that public in accordance with the
the rule text to anticipate the impact of waiving the 30-day operative delay is provisions of 5 U.S.C. 552, will be
the Market Order Spread Protection consistent with the protection of available for website viewing and
feature. Today, members are able to investors and the public interest. printing in the Commission’s Public
submit orders or quotes priced between Therefore, the Commission hereby Reference Room, 100 F Street NE,
the MPV for display at the nearest MPV. waives the operative delay and Washington, DC 20549 on official
The Exchange does not believe that designates the proposed rule change business days between the hours of
not applying the Market Order Spread operative upon filing.22 10:00 a.m. and 3:00 p.m. Copies of the
Protection during the Opening Process At any time within 60 days of the filing also will be available for
and during a trading halt creates an filing of the proposed rule change, the inspection and copying at the principal
undue burden on competition because Commission summarily may office of the Exchange. All comments
these mechanisms offer more restrictive temporarily suspend such rule change if received will be posted without change.
protections than the proposed initial it appears to the Commission that such Persons submitting comments are
setting for the Market Order Spread action is necessary or appropriate in the cautioned that we do not redact or edit
Protection, which is proposed at $5. public interest, for the protection of personal identifying information from
C. Self-Regulatory Organization’s investors, or otherwise in furtherance of comment submissions. You should
Statement on Comments on the the purposes of the Act. If the submit only information that you wish
Proposed Rule Change Received From Commission takes such action, the to make available publicly. All
Members, Participants, or Others Commission shall institute proceedings submissions should refer to File
to determine whether the proposed rule Number SR–Phlx–2018–32, and should
No written comments were either change should be approved or be submitted on or before May 29, 2018.
solicited or received. disapproved.
For the Commission, by the Division of
III. Date of Effectiveness of the IV. Solicitation of Comments Trading and Markets, pursuant to delegated
Proposed Rule Change and Timing for authority.23
Commission Action Interested persons are invited to
Eduardo A. Aleman,
submit written data, views, and
Because the foregoing proposed rule Assistant Secretary.
arguments concerning the foregoing,
change does not (i) significantly affect including whether the proposed rule [FR Doc. 2018–09571 Filed 5–4–18; 8:45 am]
the protection of investors or the public change is consistent with the Act. BILLING CODE 8011–01–P
interest; (ii) impose any significant Comments may be submitted by any of
burden on competition; and (iii) become the following methods:
operative for 30 days from the date on SECURITIES AND EXCHANGE
which it was filed, or such shorter time Electronic Comments COMMISSION
as the Commission may designate, it has • Use the Commission’s internet [Release No. 34–83148; File No. SR–CTA/
become effective pursuant to Section comment form (http://www.sec.gov/ CQ–2018–01]
19(b)(3)(A)(iii) of the Act 19 and rules/sro.shtml); or
subparagraph (f)(6) of Rule 19b–4 • Send an email to rule-comments@ Consolidated Tape Association; Order
thereunder.20 sec.gov. Please include File Number SR– of Summary Abrogation of the Twenty-
A proposed rule change filed under Phlx–2018–32 on the subject line. Third Charges Amendment to the
Rule 19b–4(f)(6) normally does not Second Restatement of the CTA Plan
become operative for 30 days after the Paper Comments
and the Fourteenth Charges
date of its filing. However, Rule 19b– • Send paper comments in triplicate Amendment to the Restated CQ Plan
4(f)(6)(iii) 21 permits the Commission to to Secretary, Securities and Exchange
designate a shorter time if such action Commission, 100 F Street NE, May 1, 2018.
is consistent with the protection of Washington, DC 20549–1090. I. Introduction
investors and the public interest. The All submissions should refer to File Notice is hereby given that the
Number SR–Phlx–2018–32. This file Securities and Exchange Commission
19 15 U.S.C. 78s(b)(3)(A)(iii). number should be included on the (‘‘Commission’’), pursuant to Section
20 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– subject line if email is used. To help the 11A of the Securities Exchange Act of
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4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
Commission process and review your 1934 (‘‘Act’’),1 and Rule 608
the proposed rule change, along with a brief comments more efficiently, please use thereunder,2 is summarily abrogating
description and text of the proposed rule change,
at least five business days prior to the date of filing 22 For purposes only of waiving the 30-day
the Twenty-Third Charges Amendment
of the proposed rule change, or such shorter time operative delay, the Commission also has
23 17 CFR 200.30–3(a)(12).
as designated by the Commission. The Exchange considered the proposed rule’s impact on
has satisfied this requirement. efficiency, competition, and capital formation. See 1 15 U.S.C. 78k–1.
21 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f). 2 17 CFR 242.608.
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![Federal Register / Vol. 83, No. 88 / Monday, May 7, 2018 / Notices 20129
By the Commission. pursuant to Section 11A of the Act,6 and schedule to reduce the Plan’s Per-Query
Brent J. Fields, Rule 608 thereunder.7 The Amendment, Fee for broker-dealers with 500,000 or
Secretary. which was effective upon filing more non-professional subscribers from
[FR Doc. 2018–09579 Filed 5–4–18; 8:45 am] pursuant to Rule 608(b)(3)(i) of $.0075 to $.0025.
BILLING CODE 8011–01–P
Regulation NMS,8 modified the Plan’s The Participants stated that by
fee schedule to adopt changes to the implementing a tiered structure for Per-
Nonprofessional Subscriber Enterprise Query Fees, the proposal was designed
SECURITIES AND EXCHANGE Cap and Per Query Fees. to provide an offset to those firms most
COMMISSION II. Description of the Amendment likely affected by the Enterprise Cap
increase (i.e., those with a large non-
[Release No. 34–83149; File No. S7–24–89] A. Amendments to Enterprise Cap professional subscriber base).
The Amendment modified the Plan’s Additionally, the Participants stated
Joint Industry Plan; Order of Summary that the proposal would align the tiered
Abrogation of the Forty-Second fee schedule to increase the
Nonprofessional Subscriber Enterprise structures for Network C with those of
Amendment to the Joint Self- Networks A and B.
Regulatory Organization Plan Cap (‘‘Enterprise Cap’’) from $686,400 to
$1,260,000. The Participants stated that Pursuant to Rule 608(b)(3)(i) under
Governing the Collection, Regulation NMS,11 the Participants
Consolidation and Dissemination of as a result of industry consolidation, the
non-professional subscriber base for designated the Amendment as
Quotation and Transaction Information establishing or changing a fee or other
for Nasdaq-Listed Securities Traded on entities subject to the Enterprise Cap
may suddenly increase, and whereas charge collected on their behalf in
Exchanges on an Unlisted Trading connection with access to, or use of, the
Privileges Basis before two entities may have benefited
slightly from the Enterprise Cap, a facilities contemplated by the Plan. As
May 1, 2018. combined entity could achieve a a result, the Amendment was effective
substantial decrease in fees by using the upon filing with the Commission. The
I. Introduction Amendment was published for
Enterprise Cap. Consequently, the
Notice is hereby given that the Participants stated, the increase of the comment in the Federal Register on
Securities and Exchange Commission Enterprise Cap was designed to March 29, 2018.12
(‘‘Commission’’), pursuant to Section maintain the status quo and should not III. Summary of Comments
11A of the Securities Exchange Act of have, in conjunction with the Per-Query
1934 (‘‘Act’’),1 and Rule 608 Fee change described below, resulted in The Commission received two
thereunder,2 is summarily abrogating an increase of revenue to the Plan or comment letters in response to the
the Forty-Second Amendment to the fees for any particular entity.9 Notice of Filing 13 and a response
Joint Self-Regulatory Organization Plan In addition, the Amendment modified thereto from the Participants.14 In its
Governing the Collection, Consolidation the Plan to remove a provision relating comment letter, SIFMA stated that the
and Dissemination of Quotation and to annual increases of the Enterprise information provided by the
Transaction Information for Nasdaq- Cap after a two-thirds vote of the Participants in the Amendment with
Listed Securities Traded on Exchanges Participants. In 2014 10 the Participants respect to, among other things, cost,
on an Unlisted Trading Privileges Basis amended the mechanism by which the revenue, and customer data, is
(‘‘Nasdaq/UTP Plan’’ or ‘‘Plan’’).3 Enterprise Cap would increase, from an insufficient to permit the Commission to
On March 5, 2018 4 the participants of automatic increase based on volume, to determine whether the Amendment is
the Plans (‘‘Participants’’) 5 filed with a requirement for an affirmative vote of consistent with the Act.15 SIFMA stated
the Commission a proposal to amend the Participants. The Participants have that only the Participants, and not
the Nasdaq/UTP Plan (‘‘Amendment’’), not used this mechanism to increase the SIFMA or other market participants,
Enterprise Cap. The Participants believe possess the information necessary to
1 15 U.S.C. 78k–1. that any future changes to the Enterprise
11 17 CFR 242.608(b)(3)(i).
2 17 CFR 242.608. Cap should be filed with the
3 The Plan governs the collection, processing, and 12 See Notice of Filing, supra note 4.
Commission and subject to public
dissemination on a consolidated basis of quotation 13 See letters from Melissa MacGregor, Managing
information and transaction reports in Eligible
comment. Consequently, the Director, Securities Industry and Financial Markets
Securities for each of its Participants. This Participants proposed to delete this Association (‘‘SIFMA’’), dated April 19, 2018
consolidated information informs investors of the provision. (‘‘SIFMA Letter’’), and Tyler Gellasch, Executive
current quotation and recent trade prices of Nasdaq Director, Healthy Markets Association (‘‘Healthy
securities. It enables investors to ascertain from one B. Amendments to the Per-Query Fee Markets’’), dated April 30, 2018 (‘‘Healthy Markets
data source the current prices in all the markets Letter’’), to Brent J. Fields, Secretary, Commission.
trading Nasdaq securities. The Plan serves as the The Participants stated that because of 14 See Letter from Emily Kasparov to Brent J.
required transaction reporting plan for its the increase in the Enterprise Cap, there Fields, Secretary, Commission, dated April 27, 2018
Participants, which is a prerequisite for their could have been broker-dealers that (‘‘Participants’ Response’’). The Participants
trading Eligible Securities. See Securities Exchange used the Enterprise Cap that, without a responded to the comments received on this
Act Release No. 55647 (April 19, 2007), 72 FR Amendment, as well as on SR–CTA/CQ–2018–01,
20891 (April 26, 2007). corresponding offset, could have faced which amended the CTA/CQ plan in a parallel
4 See Securities Exchange Act Release No. 82938 an increase in fees. To offset the fashion.
(March 23, 2018), 83 FR 13542 (March 29, 2018) potential fee increase, the Amendment 15 See SIFMA Letter, supra note 13 at 1–3. SIFMA
(‘‘Notice of Filing’’). modified the text of the Plan’s fee also stated that absent data demonstrating a
5 The Participants are: Cboe BYX Exchange; Inc.; reasonable relationship between core data revenues
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Cboe BZX Exchange, Inc.; Cboe EDGA Exchange, 6 15 and the costs of collecting and disseminating data,
U.S.C. 78k–1.
Inc.; Cboe EDGX Exchange, Inc.; Chicago Board 7 17
it is doubtful that maintaining the status quo with
Options Exchange, Incorporated; Chicago Stock CFR 242.608. respect to market data fees is consistent with the
8 17 CFR 242.608(b)(3)(i).
Exchange, Inc.; Financial Industry Regulatory Act. According to SIFMA, the governance structure
9 The Participants noted that very few entities
Authority, Inc.; Investors Exchange LLC; Nasdaq for NMS plans is broken and market data fees are
BX, Inc.; Nasdaq ISE, LLC; Nasdaq PHLX LLC; The take advantage of the Enterprise Cap. not restrained by competitive forces, thus
Nasdaq Stock Market LLC; New York Stock 10 See Securities Exchange Act Release No. 73279 maintaining the status quo with respect to market
Exchange LLC; NYSE Arca, Inc.; NYSE American (October 1, 2014), 79 FR 60522 (October 7, 2014) data fees could impose a burden on competition.
LLC; NYSE National, Inc. (describing the history of the Per-Query Fees). See id. at 3.
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Document Created: 2018-05-05 02:47:57
Document Modified: 2018-05-05 02:47:57
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 83 FR 20126 |
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