[Federal Register Volume 85, Number 54 (Thursday, March 19, 2020)]
[Notices]
[Pages 15836-15837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05706]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88384; File No. SR-CTA-2019-02]


Consolidated Tape Association; Order Approving the Thirty-First 
Substantive Amendment to the Second Restatement of the CTA Plan 
Regarding Publication of Trade Reports During Race Conditions

March 13, 2020.

I. Introduction

    On September 11, 2019, participants \1\ of the Consolidated Tape 
Association Plan (``CTA Plan'' or ``Plan'') filed \2\ with the 
Securities and Exchange Commission (``SEC'' or ``Commission''), 
pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \3\ and Rule 608 of Regulation NMS thereunder,\4\ a proposal 
to amend the Second Restatement of the CTA Plan.\5\ This amendment 
represents the Thirty-First Substantive Amendment to the CTA Plan 
(``Amendment''). The Participants have proposed to align provisions of 
the Plan that govern dissemination of last-sale price reports by the 
Processor \6\ during a Regulatory Halt \7\ with corresponding 
provisions of the Nasdaq/UTP Plan.\8\ The Amendment was published for 
comment in the Federal Register on January 28, 2020.\9\ One comment 
letter was received.\10\ This order approves the Amendment to the Plan.
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    \1\ These participants are: Cboe BYX Exchange, Inc.; Cboe BZX 
Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.; 
Cboe Exchange, Inc.; Financial Industry Regulatory Authority, Inc.; 
The Investors' Exchange LLC; Long-Term Stock Exchange, Inc.; Nasdaq 
BX, Inc.; Nasdaq ISE, LLC; Nasdaq PHLX, Inc.; The Nasdaq Stock 
Market LLC; New York Stock Exchange LLC; NYSE American LLC; NYSE 
Arca, Inc.; NYSE Chicago, Inc.; and NYSE National, Inc. (each a 
``Participant'' and collectively, the ``Participants'').
    \2\ See Letter from Robert Books, Chairman, Operating Committee, 
CTA Plan, to Vanessa Countryman, Secretary, Commission (dated 
September 6, 2019).
    \3\ 15 U.S.C 78k-1(a)(3).
    \4\ 17 CFR 242.608.
    \5\ 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 of 
Regulation NMS, 17 CFR 242.601, and a ``national market system 
plan'' under Rule 608 of Regulation NMS, 17 CFR 242.608. See 
Securities Exchange Act Release No. 10787 (May 10, 1974), 39 FR at 
17799 (May 20, 1974) (declaring the CTA Plan effective).
    \6\ See Section I(x) of the Plan (defining ``Processor'').
    \7\ See Section XI(a) of the Plan (defining ``Regulatory 
Halt'').
    \8\ The Joint Self-Regulatory Organization Plan Governing the 
Collection, Consolidation and Dissemination of Quotation and 
Transaction Information for NASDAQ-Listed Securities Traded on 
Exchanges on an Unlisted Trading Privilege Basis (``Nasdaq/UTP 
Plan'') governs the collection, consolidation, processing, and 
dissemination of last-sale and quotation information for Network C 
securities.
    \9\ See Securities Exchange Act Release No. 88016 (January 23, 
2020), 85 FR 5060 (January 28, 2020).
    \10\ See Letter from Kelvin To, Founder and President, Data 
Boiler Technologies LLC, to Vanessa Countryman, Secretary, 
Commission (dated February 4, 2020). The comment letter is not 
germane to the Amendment.
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II. Description of the Proposal

    The Plan currently prohibits the Processor from disseminating last-
sale reports that are received by the Processor during a Regulatory 
Halt.\11\ This prohibition applies even if a trade occurs on the 
Participant just before the Participant receives notification from the 
Processor of a Regulatory Halt. If the Participant reports the trade to 
the Processor during this ``race condition,'' the Processor might not 
be able to determine whether the trade occurred before or after the 
Participant had received notification of the Regulatory Halt. Under the 
Nasdaq/UTP Plan, the Processor immediately disseminates trade reports 
in this instance.\12\
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    \11\ See Section XI(a) of the Plan (providing, in relevant part, 
that ``[d]uring the period of any Regulatory Halt in trading in any 
Eligible Security by the listing market therefor, the consolidated 
tape shall not include any reports of last-sale prices in such 
Security received by the Processor during the period of the 
Regulatory Halt'').
    \12\ See Section X.C of the Nasdaq/UTP Plan (providing, in 
relevant part, that ``[d]uring a Regulatory Halt, the Processor 
shall collect and disseminate Transaction Information'').
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    The Participants have proposed to amend the Plan to provide that, 
during a Regulatory Halt, the consolidated tape shall include any last-
sale report that is received by the Processor during the Regulatory 
Halt. Thus, the Processor would act as a pass-through for information 
received from the Participants, and the Processor would not have to 
attempt to ascertain whether a trade reported to it by a Participant 
happened before or after the Participant had received notification of a 
Regulatory Halt. This proposal by the CTA Plan Participants is designed 
to harmonize with Nasdaq/UTP Plan provisions for how trades are handled 
by Plan Processors during race conditions and apply a uniform procedure 
for all trading in NMS stocks throughout the national market system.

[[Page 15837]]

    The Participants also proposed to update certain cross-references 
to exchanges rules relating to re-opening procedures.

III. Discussion

    After careful review, the Commission finds that the Amendment is 
consistent with the requirements of the Act and the rules and 
regulations thereunder.\13\ In particular, the Commission finds that 
the Amendment is consistent with Section 11A of the Act which provides, 
among other things, that the Commission may prescribe rules as 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act to 
assure the prompt, accurate, reliable, and fair collection, processing, 
distribution, and publication of information with respect to quotations 
for and transactions in securities and the fairness and usefulness of 
the form and content of such information.\14\ The Commission also finds 
that the Amendment is consistent with Rule 608 of Regulation NMS, which 
provides that the Commission shall approve an amendment to a Plan if it 
finds that such amendment is necessary or appropriate in the public 
interest, for the protection of investors and 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.\15\
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    \13\ The Commission has considered the Amendment's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \14\ See 15 U.S.C. 78k-1(c)(1)(B).
    \15\ See 17 CFR 240.608(b)(2).
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    The Commission believes that the Amendment furthers these goals by 
eliminating any burden on the Processor to determine whether a trade 
that is reported to the Processor during a race condition occurred 
before or after the Participant who reported the trade had received 
notice of a Regulatory Halt. Under the Amendment, the Processor could 
presume that any such trades occurred before the Regulatory Halt, 
thereby allowing the Processor to continue publishing those trade 
reports to the consolidated tape. The Commission believes that market 
observers could derive benefits from continuing to learn about trades 
occurring just before a Regulatory Halt that, under the existing Plan 
provisions, the Plan Processor might not print to the consolidated 
tape.
    The Commission notes that it is also approving today a similar 
proposal by the Nasdaq/UTP Plan Participants to eliminate an ambiguity 
in that Plan regarding how the Processor handles last-sale price 
reports during a Regulatory Halt.\16\ As a result, both Plans will have 
uniform provisions in this regard. The Commission believes that 
approving these two Plan amendments furthers the principle set forth in 
Section 11A of the Act that ``[t]he linking of all markets for 
qualified securities through communication and data processing 
facilities will foster efficiency, enhance competition, increase the 
information available to brokers, dealers, and investors, facilitate 
the offsetting of investors' orders, and contribute to best execution 
of such orders'' \17\ by harmonizing across the entire national market 
system how last-sale price reports for all NMS stocks are printed to 
the consolidated tape during race conditions and by eliminating any 
ambiguity in the duties of the Plan Processors in this regard.
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    \16\ See Securities Exchange Act Release No. 34-88385 (March 13, 
2020) (File No. S7-24-89).
    \17\ 15 U.S.C. 78k-1(a)(1)(D).
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    Finally, the Commission finds that updating cross-references in the 
Plan is consistent with the Act.

VI. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act and the 
rules thereunder that the Amendment to the Plan (File No. SR-CTA-2019-
02) is approved.
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    \18\ 17 CFR 200.30-3(a)(29).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-05706 Filed 3-18-20; 8:45 am]
 BILLING CODE 8011-01-P


