
[Federal Register Volume 78, Number 215 (Wednesday, November 6, 2013)]
[Notices]
[Pages 66789-66790]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26557]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70794; File No. SR-CTA-2013-05]


Consolidated Tape Association; Order Approving the Eighteenth 
Substantive Amendment to the Second Restatement of the CTA Plan

October 31, 2013.

I. Introduction

    On September 9, 2013, the Consolidated Tape Association (``CTA'') 
Plan participants (``Participants'') \1\ filed with the Securities and 
Exchange Commission (``Commission'') pursuant to Section 11A of the 
Securities Exchange Act of 1934 (``Act''),\2\ and Rule 608 
thereunder,\3\ a proposal to amend the Second Restatement of the CTA 
Plan (``CTA Plan'').\4\ The proposal represents the eighteenth 
substantive amendment to the CTA Plan (``Amendment'') and reflects 
changes unanimously adopted by the Participants. The Amendment was 
published for comment in the Federal Register on September 23, 2013.\5\ 
No comment letters were received in response to the Notice. The 
Amendment would require that odd-lot transactions be reported to the 
consolidated tape. The Plan was amended to remove odd-lots from the 
list of transactions that are not to be reported for inclusion on the 
consolidated tape. This order approves the Amendment to the CTA Plan.
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    \1\ Each participant executed the proposed amendment. The 
Participants are: BATS Exchange, Inc., BATS-Y Exchange, Inc., 
Chicago Board Options Exchange, Incorporated, Chicago Stock 
Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., Financial 
Industry Regulatory Authority, Inc., International Securities 
Exchange, LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., Nasdaq 
Stock Market LLC, National Stock Exchange, New York Stock Exchange 
LLC, NYSE MKT LLC, and NYSE Arca, Inc.
    \2\ 15 U.S.C. 78k-1.
    \3\ 17 CFR 242.608.
    \4\ See Securities Exchange Act Release No. 10787 (May 10, 
1974), 39 FR 17799 (declaring the CTA Plan effective). 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.
    \5\ See Securities Exchange Act Release No. 70428 (September 17, 
2013), 78 FR 58362 (``Notice'').
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II. Description of the Proposal

    Currently, Section VIII(a) (Responsibility of Exchange 
Participants) of the CTA Plan provides that each Participant will 
``collect and report to the Processor all last sale price information 
to be reported by it relating to transactions in Eligible Securities 
taking place on its floor.'' However, Section VI(d) (Transactions not 
reported (related messages)) provides a list of transactions that ``are 
not to be reported for inclusion on the consolidated tape.'' That list 
includes odd-lot transactions. According to the Participants, ``because 
odd-lot transactions account for a not insignificant percentage of 
trading volume, the Participants have determined that including odd-lot 
transactions on the consolidated tape of CTA last sale prices would add 
post-trade transparency to the marketplace.'' \6\ Accordingly, the 
Amendment proposes to add odd-lot transactions to the consolidated tape 
by removing them from Section VI(d)'s list of transactions that are not 
to be reported for inclusion on the consolidated tape.
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    \6\ Id. at 58363.
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    Due to the lack of economic significance of many individual odd-lot 
orders, the Participants did not propose to include bids and offers for 
odd-lots in the best bid and best offer calculations that the 
Participants make available under the Consolidated Quotation Plan. 
Additionally, the Participants did not propose to include odd-lot 
transactions in calculations of last sale prices. Therefore, odd-lot 
transactions would not be included in calculations of high and low 
prices and would not be subject to the Limit Up-Limit Down Plan \7\ 
(i.e., the National Market System Plan to Address Extraordinary Market 
Volatility). Moreover, including odd-lot transactions on the 
consolidated tape would not trigger short sale restrictions or trading 
halts. However, odd-lot transactions would be included in calculations 
of daily consolidated volume.
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    \7\ See Securities Exchange Act Release No. 67091, 77 FR 33498 
(June 6, 2012) (File No. 4-631) (the Limit Up-Limit Down Plan, as 
originally approved).
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    For purposes of allocating revenue among the Participants under the 
CTA Plan, the Participants would include odd-lot transactions in the 
Security Income Allocation for each Eligible Security under Section 
XII(a)(ii) (Security Income Allocation) of the CTA

[[Page 66790]]

plan. Just as with round lot transactions, an odd-lot transaction with 
a dollar value of $5000 or more would constitute one qualified 
transaction report and an odd-lot transaction with a dollar value of 
less than $5000 would constitute a fraction of a qualified transaction 
report that equals the dollar value of the transaction report divided 
by $5000. The Participants do not anticipate that this would produce a 
significant shift in revenue allocation among the Participants. 
According to the Participants, this treatment of odd-lot transactions 
for revenue allocation purposes does not require a change to the 
language of the CTA Plan.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the Amendment to 
the CTA Plan is consistent with the requirements of the Act and the 
rules and regulations thereunder,\8\ and, in particular, Section 
11A(a)(1)(C)(iii) of the Act \9\ and Rule 608 thereunder \10\ in that 
it is in the public interest and appropriate for the protection of 
investors and the maintenance of fair and orderly markets to assure the 
availability to brokers, dealers, and investors of information with 
respect to transactions in securities. As the Participants stated in 
the proposal, odd-lot transactions comprise a noteworthy percentage of 
total trading volume. Thus, including odd-lot transactions on the 
consolidated tape will enhance post-trade transparency, as well as 
price discovery, and consequently would further the goals of the Act. 
The Commission believes that information about odd-lot transactions 
would provide important information to investors and other market 
participants and therefore represents a positive development in the 
provision of market data.
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    \8\ In approving the Amendment, the Commission has considered 
the proposed Amendment's impact on efficiency, competition, and 
capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \10\ 17 CFR 240.608.
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IV. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act,\11\ 
and the rules thereunder, that the proposed amendment to the CTA Plan 
(SR-CTA-2013-05), be, and hereby is approved.
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    \11\ 15 U.S.C. 78k-1.

For the Commission, by the Division of Trading and Markets, pursuant 
to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(27).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-26557 Filed 11-5-13; 8:45 am]
BILLING CODE 8011-01-P


