[Federal Register Volume 86, Number 10 (Friday, January 15, 2021)]
[Notices]
[Pages 4142-4143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-00810]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90885; File No. 4-757]


Joint Industry Plan; Order Instituting Proceedings to Determine 
Whether To Approve or Disapprove a National Market System Plan 
Regarding Consolidated Equity Market Data

January 11, 2021.

I. Introduction

    On August 11, 2020, Cboe BYX Exchange, Inc., Cboe BZX Exchange, 
Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., Cboe 
Exchange, Inc., Investors Exchange LLC, Long Term Stock Exchange, Inc., 
MEMX LLC, Nasdaq BX, Inc., Nasdaq ISE, LLC, Nasdaq PHLX LLC, Nasdaq 
Stock Market LLC, New York Stock Exchange LLC, NYSE American LLC, NYSE 
Arca, Inc., NYSE Chicago, Inc., NYSE National, Inc., and Financial 
Industry Regulatory Authority, Inc. (``FINRA'') (collectively, the 
``SROs'' or ``Participants'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') a proposed new single national 
market system plan governing the public dissemination of real-time 
consolidated equity market data for national market system (``NMS'') 
stocks (the ``CT Plan''). The proposed CT Plan was published for 
comment in the Federal Register on October 13, 2020.\1\
---------------------------------------------------------------------------

    \1\ See Notice of Filing of a National Market System Plan 
Regarding Consolidated Equity Market Data, Securities Exchange Act 
Release No. 34-90096 (Oct. 6, 2020), 85 FR 64565 (Oct. 13, 2020) 
(``Notice''). Comments received in response to the Notice can be 
found on the Commission's website at https://www.sec.gov/comments/4-757/4-757.htm.
---------------------------------------------------------------------------

    This order institutes proceedings, under Rule 608(b)(2)(i) of 
Regulation NMS,\2\ to determine whether to disapprove the CT Plan or to 
approve the plan with any changes or subject to any conditions the 
Commission deems necessary or appropriate after considering public 
comment.
---------------------------------------------------------------------------

    \2\ 17 CFR 242.608(b)(2)(i).
---------------------------------------------------------------------------

II. Background

    The SROs filed the CT Plan pursuant to a Commission order directing 
the SROs to act jointly in developing and filing with the Commission a 
proposed new single national market system plan to replace the three 
existing national market system plans that govern the public 
dissemination of real-time, consolidated equity market data for NMS 
stocks (the ``Governance Order'').\3\
---------------------------------------------------------------------------

    \3\ Order Directing the Exchanges and the Financial Industry 
Regulatory Authority to Submit a New National Market System Plan 
Regarding Consolidated Equity Market Data, Securities Exchange Act 
Release No. 34-88827 (May 6, 2020), 85 FR 28702 (May 13, 2020).
---------------------------------------------------------------------------

    In issuing the Governance Order, the Commission stated that 
developments in technology and changes in the equities markets have 
heightened an inherent conflict of interest between the Participants' 
collective responsibilities in overseeing the existing equity data 
plans \4\ and their individual interests in maximizing the viability of 
proprietary data products that they sell to market participants.\5\ 
This conflict of interest, the Commission stated, combined with the 
concentration of voting power in the existing equity data plans among a 
few large ``exchange groups''--multiple exchanges operating under one 
corporate umbrella--has contributed to significant concerns regarding 
whether the consolidated feeds meet the purposes for them set out by 
Congress and by the Commission in adopting the national market 
system.\6\ The Commission therefore found it in the public interest to 
require the Participants to jointly develop and file with the 
Commission a single new consolidated data plan with specified terms and 
conditions regarding the governance of the new plan.\7\
---------------------------------------------------------------------------

    \4\ The three equity data plans that currently govern the 
collection, consolidation, processing, and dissemination of SIP data 
are (1) the Consolidated Tape Association Plan (``CTA Plan''), (2) 
the Consolidated Quotation Plan (``CQ Plan''), and (3) 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 Privileges Basis (``UTP Plan''). See Governance 
Order, supra note 3, 85 FR at 28703 & n.34.
    \5\ See Governance Order, supra note 3, 85 FR at 28702.
    \6\ See id. The Commission also stated in the Governance Order 
that the continued existence of three separate NMS plans for equity 
market data creates inefficiencies and unnecessarily burdens ongoing 
improvements in the provision of equity market data to market 
participants. See id.
    \7\ See Governance Order, supra note 3, 85 FR at 28729-31.
---------------------------------------------------------------------------

    The full text of the proposed CT Plan appears in Attachment A to 
the Notice.\8\
---------------------------------------------------------------------------

    \8\ See Notice, supra note 1, 85 FR 64574-95.
---------------------------------------------------------------------------

III. Proceedings To Determine Whether To Approve or Disapprove the 
Proposed CT Plan

    The Commission is instituting proceedings pursuant to Rule 
608(b)(2)(i) of Regulation NMS,\9\ and Rules 700 and 701 of the 
Commission's Rules of Practice,\10\ to determine whether to disapprove 
the CT Plan or to approve the plan with any changes or subject to any 
conditions the Commission deems necessary or appropriate after 
considering public comment. Institution of proceedings does not 
indicate that the Commission has reached any conclusions with respect 
to any of the issues involved. Rather, the Commission seeks and 
encourages interested persons to provide additional comment on the 
proposed CT Plan to inform the Commission's analysis.
---------------------------------------------------------------------------

    \9\ 17 CFR 242.608.
    \10\ 17 CFR 201.700; 17 CFR 201.701.
---------------------------------------------------------------------------

    Rule 608(b)(2) of Regulation NMS provides that the Commission 
``shall approve a national market system plan . . . with such changes 
or subject to such conditions as the Commission may deem necessary or 
appropriate, if it finds that such plan . . . 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.'' \11\ Rule 608(b)(2) 
further provides that the Commission shall disapprove a national market 
system plan or proposed amendment if it does not make such a 
finding.\12\ In the Notice, the Commission sought comment on elements 
of the proposed CT Plan that bear on the Commission's analysis of 
whether the plan should be approved, disapproved,

[[Page 4143]]

or approved with modifications.\13\ In this order, pursuant to Rule 
608(b)(2)(i) of Regulation NMS,\14\ the Commission is providing notice 
of the grounds for disapproval under consideration:
---------------------------------------------------------------------------

    \11\ See 17 CFR 242.608(b)(2).
    \12\ See id.
    \13\ See Notice, supra note 1, 85 FR at 64568-74.
    \14\ 17 CFR 242.608(b)(2)(i). See also Commission Rule of 
Practice 700(b)(2), 17 CFR 201.700(b)(2).
---------------------------------------------------------------------------

     Whether the proposed CT Plan is consistent with the 
Governance Order;
     Whether, consistent with Rule 608 of Regulation NMS, the 
proposed CT Plan 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\
---------------------------------------------------------------------------

    \15\ See 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

     Whether modifications to the proposed CT Plan, or 
conditions to its approval, would be required to make the proposed plan 
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; \16\
---------------------------------------------------------------------------

    \16\ See 17 CFR 242.608(b)(2).
---------------------------------------------------------------------------

     Whether the proposed CT Plan is consistent with Congress's 
finding, in Section 11A(1)(C)(iii) of the Act, that it is in the public 
interest and appropriate for the protection of investors and the 
maintenance of fair and orderly markets to ensure ``the availability to 
brokers, dealers, and investors or information with respect to 
quotations for and transactions in securities'' \17\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
---------------------------------------------------------------------------

     Whether, consistent with the purposes of Section 
11A(c)(1)(B) of the Act,\18\ the proposed CT Plan is appropriately 
structured, and whether its provisions are appropriately drafted, to 
support the prompt, accurate, reliable, and fair collection, 
processing, distribution, and publication of information with respect 
to quotations for and transactions in NMS securities, and the fairness 
and usefulness of the form and content of such information;
---------------------------------------------------------------------------

    \18\ See 15 U.S.C. 78k-1(c)(1)(B).
---------------------------------------------------------------------------

     Whether the proposed CT Plan effectively addresses the 
inherent conflict of interest between the Participants' collective 
responsibilities in overseeing the existing equity data plans and their 
individual interests in maximizing the viability of proprietary data 
products that they sell to market participants, as well as the 
concentration of voting power in the existing equity data plans among a 
few large exchange groups; and
     Whether the provisions of the proposed CT Plan that were 
not mandated by the Governance Order are consistent with the Act and 
the rules and regulations issued thereunder that are applicable to NMS 
plans.\19\
---------------------------------------------------------------------------

    \19\ See Rule 700(b)(3)(ii) of the Commission's Rules of 
Practice. 17 CFR 200.700(b)(3)(ii).
---------------------------------------------------------------------------

    The Commission is instituting proceedings to allow for additional 
consideration and comment on the issues raised above.

IV. Commission's Solicitation of Comments

    The Commission requests that interested persons provide written 
submissions of their views, data, and arguments with respect to the 
issues identified above, as well as any other concerns they may have 
with the proposals. In particular, the Commission invites the written 
views of interested persons concerning whether the proposals are 
consistent with Section 11A or any other provision of the Act, or the 
rules and regulations thereunder. Although there do not appear to be 
any issues relevant to approval or disapproval that would be 
facilitated by an oral presentation of views, data, and arguments, the 
Commission will consider, pursuant to Rule 608(b)(2)(i) of Regulation 
NMS,\20\ any request for an opportunity to make an oral 
presentation.\21\
---------------------------------------------------------------------------

    \20\ 17 CFR 242.608(b)(2)(i).
    \21\ Rule 700(c)(ii) of the Commission's Rules of Practice 
provides that ``[t]he Commission, in its sole discretion, may 
determine whether any issues relevant to approval or disapproval 
would be facilitated by the opportunity for an oral presentation of 
views.'' 17 CFR 201.700(c)(ii).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and 
arguments regarding whether the proposals should be approved or 
disapproved by February 5, 2021. Any person who wishes to file a 
rebuttal to any other person's submission must file that rebuttal by 
February 19, 2021. 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 4-757 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 4-757. 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 Participants' principal offices. 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 4-757 and should be submitted on or before 
February 5, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-00810 Filed 1-14-21; 8:45 am]
BILLING CODE 8011-01-P


