
[Federal Register Volume 82, Number 14 (Tuesday, January 24, 2017)]
[Notices]
[Pages 8249-8252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01461]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79806; File No. SR-NSX-2017-01]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Amend Exchange Rule 11.26 Regarding the Data Collection Requirements 
of the Regulation NMS Plan To Implement a Tick Size Pilot Program 
January 17, 2017

    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on January 6, 2017, National Stock Exchange, Inc. (``NSX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') a proposed rule change, as described in 
Items I, and II below, which Items have been substantially prepared by 
the Exchange. The Exchange has designated this proposal as a non-
controversial proposed rule change pursuant to Section 19(b)(3)(A) of 
the Act \3\ and Rule 19b-4(f)(6)(iii) \4\ thereunder, which renders it 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to amend NSX Rule 11.26(b) and Rule 11.26, 
Interpretations and Policies .08 to modify certain data collection 
requirements of the Regulation NMS Plan to Implement a Tick Size Pilot 
Program (the ``Plan''). The proposed rule change is the same as 
proposed rule changes recently approved or published by the Commission 
for Bats BZX Exchange f/k/a BATS Exchange, Inc. (``BZX'') to amend BZX 
Rule 11.27 which also sets forth amendments to the requirements for the 
Web site data publication requirements pursuant to Appendices B and C 
of the Plan.\5\
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    \5\ See Securities Exchange Act Release No. 79533 (December 13, 
2016), 81 FR 91990 (December 19, 2016) (SR-BatsBZX-2016-82).
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    The text of the proposed rule change is available on the Exchange's 
Web site at www.nsx.com, at the principal office of the Exchange, and 
at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and statutory basis for the proposed rule 
change and discussed any comments it received on the proposed rule 
change. The text of these statements may be examined at the places 
specified in Item IV below. The Exchange has prepared summaries, set 
forth in Sections A, B, and C below, of the most significant parts of 
such statements.

A. Self -Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On August 25, 2014, NYSE Group, Inc., on behalf of BZX, Bats BYX 
Exchange, Inc., f/k/a BATS-Y Exchange,

[[Page 8250]]

Inc., Bats EDGA Exchange, Inc., Bats EDGX Exchange, Inc., Chicago Stock 
Exchange, Inc., Financial Industry Regulatory Authority, Inc. 
(``FINRA''), NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, the Nasdaq Stock 
Market LLC, New York Stock Exchange LLC (``NYSE''), NYSE MKT LLC, and 
NYSE Arca, Inc. (collectively ``Participants''), filed with the 
Commission, pursuant to Section 11A of the Act \6\ and Rule 608 of 
Regulation NMS thereunder,\7\ the Plan to Implement a Tick Size Pilot 
Program (``Pilot'').\8\ The Participants filed the Plan to comply with 
an order issued by the Commission on June 24, 2014.\9\ The Plan \10\ 
was published for comment in the Federal Register on November 7, 2014 
and was thereafter approved by the Commission, as modified, on May 6, 
2015.\11\ On November 6, 2015, the Commission granted the Participants 
an exemption from implementing the Plan until October 3, 2016.\12\ On 
March 3, 2016, the Commission published an amendment to the Plan adding 
NSX as a Participant.\13\ On September 13, 2016, the Commission 
exempted the Plan Participants from the requirement to fully implement 
the Pilot on October 3, 2016, to permit the Plan Participants to 
implement the pilot on a phased-in basis, as described in the Plan 
Participants' exemptive request.\14\
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    \6\ 15 U.S.C. 78k-1.
    \7\ 17 CFR 242.608.
    \8\ See Letter from Brendon J. Weiss, Vice President, 
Intercontinental Exchange, Inc., to Secretary, Commission, dated 
August 25, 2014.
    \9\ See Securities Exchange Act Release No. 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014).
    \10\ Unless otherwise specified, capitalized terms used in this 
rule filing are based on the defined terms of the Plan.
    \11\ See Securities Exchange Act Release No. 74892 (May 6, 
2015), 80 FR 27513 (May 13, 2015) (File No. 4-657) (``Approval 
Order'').
    \12\ See Securities Exchange Act Release No. 76382 (November 6, 
2015), 80 FR 70284 (November 13, 2015) (File No. 4-657) (Order 
Granting Exemption From Compliance With the National Market System 
Plan To Implement a Tick Size Pilot Program).
    \13\ See Securities Exchange Act Release No. 77277 (March 3, 
2016), 81 FR 12162 (March 8, 2016).
    \14\ See Letter from David S. Shillman, Associate Director, 
Division of Trading and Markets, Commission, to Eric Swanson, EVP, 
General Counsel and Secretary, Bats Global Markets, Inc., dated 
September 13, 2016; see also Letter from Eric Swanson, EVP, General 
Counsel and Secretary, Bats Global Markets, Inc., to Brent J. 
Fields, Secretary, Commission, dated September 9, 2016.
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    The Plan is designed to allow the Commission, market participants, 
and the public to study and assess the impact of increment conventions 
on the liquidity and trading of the common stocks of small-
capitalization companies. Each Participant is required to comply, and 
to enforce compliance by its member organizations, as applicable, with 
the provisions of the Plan.
    The Exchange adopted rule amendments to implement the requirements 
of the Plan, including relating to the Plan's data collection 
requirements and requirements relating to Web site data 
publication.\15\ Specifically, with respect to the Web site data 
publication requirements pursuant to Section VII and Appendices B and C 
to the Plan, Exchange Rule 11.26(b)(2)(B) provides, among other things, 
that the Exchange shall make the data required by Items I and II of 
Appendix B to the Plan, and collected pursuant to paragraph (b)(2) of 
Rule 11.26, publicly available on the Exchange's Web site on a monthly 
basis at no charge and shall not identify the Trading Center that 
generated the data. Exchange Rule 11.26(b)(3)(C), provides, among other 
things, that the Exchange shall make the data required by Item IV of 
Appendix B to the Plan, and collected pursuant to paragraph (b)(3)(A) 
of Rule 11.26, publicly available on the Exchange Web site on a monthly 
basis at no charge and shall not identify the Trading Center [sic] that 
generated the data. Exchange Rule 11.26(b)(5) provides, among other 
things, that the Exchange shall collect and transmit to the Commission 
data described in Item III of Appendix B of the Plan relating to daily 
Market Maker registration statistics, but does not currently include a 
provision requiring the Exchange to publish such data to its Web site. 
Rule 11.26, Interpretation and Policy .08 provides, among other things, 
that the requirement that the Exchange or the Designated Examining 
Authority (``DEA'') make certain data publicly available on the 
Exchange's or the DEA's Web site pursuant to Appendix B and C to the 
Plan shall commence at the beginning of the Pilot Period.
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    \15\ See Securities Exchange Act Release No. 77483 (March 31, 
2016), 81 FR 20040 (April 6, 2016) (File No. SR-NSX-2016-01); see 
also Securities Exchange Act Release No. 78960 (September 28, 2016), 
81 FR 68476 (October 4, 2016) (File No. SR-NSX-2016-12).
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    The Exchange is proposing amendments to Rule 11.26(b)(2)(B) 
(regarding Appendix B.I and B.II data) and Rule 11.26(b)(3)(C) 
(regarding Appendix B.IV data) to provide that data required to be made 
available on the Exchange's Web site be published within 120 calendar 
days following month end. The Exchange also proposes to add a provision 
to Rule 11.26(b)(5) to state that the Exchange shall make data 
collected under Appendix B.III publicly available on the Exchange's Web 
site within 120 calendar days following month end at no charge.\16\ In 
addition, the proposed amendments to Rule 11.26, Interpretations and 
Policies .08 would provide that, notwithstanding the provisions of 
paragraphs (b)(2)(B), (b)(3)(C), and (b)(5), the Exchange or the DEA 
shall make data for the Pre-Pilot period publicly available on the 
Exchange's or the DEA's Web site pursuant to Appendix B and C to the 
Plan by February 28, 2017.\17\ The purpose of delaying the publication 
of the Web site data is to address confidentiality concerns by 
providing for the passage of additional time between the market 
information reflected in the data and the public availability of such 
information.\18\
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    \16\ The Exchange notes that it does not currently have any 
Market Makers and, therefore, does not currently collect Market 
Maker registration statistics.
    \17\ With respect to data for the Pilot Period, the requirement 
that the Exchange or the DEA make data publicly available on the 
Exchange's or the DEA's Web site pursuant to Appendix B and C to the 
Plan shall continue to commence at the beginning of the Pilot 
Period. Thus, the first Web site publication date for Pilot Period 
data (covering October 2016) would be published on the Exchange's or 
the DEA's Web site by February 28, 2017, which is 120 days following 
the end of October 2016.
    \18\ On November 30, 2016, the Commission granted each 
Participant a limited exemption from the requirement to publish 
certain Pilot data on a monthly basis. For each Participants that is 
the DEA of a Market Maker, the Commission granted a limited 
exemption to allow FINRA to aggregate and publish certain data on 
the FINRA Web site, rather than each Participant that is a DEA of a 
Market Maker publishing such data on its respective Web site. The 
exemptions were granted to the Participants so long as each 
Participant submits proposed rule changes to reflect the exemptions. 
See Letter dated November 30, 2016 from David S. Shillman, Associate 
Directors, Division of Trading and Markets to Ms. Marcia E. Asquith, 
Senior Vice President and Corporate Secretary, FINRA.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \19\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \20\ in particular, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that this proposal is consistent with the Act 
because it is designed to assist the Participants in meeting their 
regulatory obligations pursuant to the Plan and is

[[Page 8251]]

in furtherance of the objectives of the Plan, as identified by the SEC. 
The Exchange further believes that the instant proposal is consistent 
with the Act in that it is designed to address confidentiality concerns 
by permitting the Exchange to delay Web site publication to provide for 
passage of additional time between the market information reflected in 
the data and the public availability of such information.

B. Self-Regulatory Organization's Statement on Burden on Competition

    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. The Exchange 
notes that the proposed rule change implements the provisions of the 
Plan, and is designed to assist the Participants in meeting their 
regulatory obligations pursuant to the Plan.
    The proposal is intended to address confidentiality concerns that 
may adversely impact competition by permitting the Exchange to delay 
Web site publication to provide for passage of additional time between 
the market information reflected in the data and the public 
availability of such information. The proposal also does not alter the 
information required to be submitted to the Commission.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From ETP Holders, Participants or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) \21\ of the Exchange Act and 
Rule 19b-4(f)(6) thereunder.\22\
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    \21\ 15 U.S.C. 78(s)(b)(3)(A).
    \22\ 17 CFR 240.19b-4(f)(6). See Securities Exchange Act Release 
No. 58092 (July 3, 2008), 73 FR 40144 (July 11, 2008) (``Commission 
Guidance and Amendment to the Rule Relating to Organization and 
Program Management Concerning Proposed Rule Changes by Self-
Regulatory Organizations'') (the ``Streamlining Release''). As set 
forth in the Streamlining Release, Rule 19b-4(f)(6) permits a 
proposed rule change to become immediately effective to the extent 
such proposal is a proposed rule change to implement provisions of 
an approved national market system plan or a Commission rule. Id. at 
40148.
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    A proposed rule change filed under paragraph (f)(6) of Rule 19b-4 
\23\ normally does not become operative prior to 30 days after the date 
of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\24\ the 
Commission may designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
filed the proposed rule change for immediate effectiveness and has 
requested that the Commission waive the requirement that the proposed 
rule change not become operative for 30 days after the date of the 
filing so that it may become operative immediately.
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    \23\ 17 CFR 240.19b-4(f)(6)(iii).
    \24\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange notes that the proposed rule change implements the 
provisions of the Plan, and is designed to assist the Participants in 
meeting their regulatory obligations pursuant to the Plan. The proposal 
is intended to address confidentiality concerns by permitting the 
Exchange to delay Web site publication to provide for passage of 
additional time between the market information reflected in the data 
and the public availability of such information. The proposal does not 
alter the information required to be submitted to the SEC.
    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to implement proposed changes that 
are intended to address confidentiality concerns. Therefore, the 
Commission hereby waives the 30-day operative delay and designates the 
proposed rule change to be operative as of 6 January, 2017.\25\
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    \25\ For purposes of only waiving the operative delay for this 
rule proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. See 15 
U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: necessary 
or appropriate in the public interest, for the protection of investors, 
otherwise in furtherance of the purposes of the Act.\26\ If the 
Commission takes such action, the Commission shall institute 
proceedings to determine whether the proposed rule should be approved 
or disapproved.
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    \26\ 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use 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-NSX-2017-01 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File No. SR-NSX-2017-01. This file 
number should be included in the subject line if email is used. To help 
the Commission process and review comments more efficiently, please use 
only one method. The Commission will post all comments on the 
Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10 a.m. and 3 
p.m. Copies of the filing will also be available for inspection and 
copying at the principal office of the Exchange. All comments received 
will be posted without change; the Commission does not edit personal 
identifying information from submissions.
    You should submit only information that you wish to make available 
publicly. All submissions should refer to file number SR-NSX-2017-01 
and should be submitted on or before February 14, 2017.


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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-01461 Filed 1-23-17; 8:45 am]
 BILLING CODE 8011-01-P


