[Federal Register Volume 79, Number 193 (Monday, October 6, 2014)]
[Notices]
[Pages 60203-60205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-23655]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73239; File No. S7-24-89]
Joint Industry Plan; Notice of Filing of Amendment No. 32 to 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 Submitted by the 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, Inc., New York Stock Exchange LLC,
NYSE Arca, Inc. and NYSE MKT, LLC
September 26, 2014.
Pursuant to Rule 608 of the Securities Exchange Act of 1934
(``Act'') \1\ notice is hereby given that on September 12, 2014, the
Chicago Board Options Exchange, Incorporated, on behalf of Participants
\2\ in 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''
or ``Plan'') filed with the Securities and Exchange Commission
(``Commission'') an amendment to the Plan.\3\ This amendment represents
Amendment No. 32 to the Plan and reflects changes unanimously adopted
by the Plan's Participants. The amendment proposes to change certain of
the voting requirements under the Plan. The Commission is publishing
this notice to solicit comments from interested persons on the proposed
Amendment.
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\1\ 17 CFR 242.608.
\2\ The Plan Participants (collectively, ``Participants'') are
the: BATS Exchange, Inc. (``BATS''); BATS Y-Exchange, Inc.(``BATS
Y''); Chicago Board Options Exchange, Incorporated (``CBOE'');
Chicago Stock Exchange, Inc. (``CHX''); EDGA Exchange, Inc.
(``EDGA''); EDGX Exchange, Inc. (``EDGX''); Financial Industry
Regulatory Authority, Inc. (``FINRA''); International Securities
Exchange LLC (``ISE''); NASDAQ OMX BX, Inc. (``BX''); NASDAQ OMX
PHLX, Inc. (``PHLX''); Nasdaq Stock Market LLC (``Nasdaq'');
National Stock Exchange, Inc. (``NSX''); New York Stock Exchange LLC
(``NYSE''); NYSE Arca, Inc. (``NYSEArca''); and NYSE MKT LLC.
\3\ The Plan governs the collection, processing, and
dissemination on a consolidated basis of quotation information and
transaction reports in Eligible Securities for each of its
Participants. This consolidated information informs investors of the
current quotation and recent trade prices of Nasdaq securities. It
enables investors to ascertain from one data source the current
prices in all the markets trading Nasdaq securities. The Plan serves
as the required transaction reporting plan for its Participants,
which is a prerequisite for their trading Eligible Securities. See
Securities Exchange Act Release No. 55647 (April 19, 2007) 72 FR
20891 (April 26, 2007).
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A. Rule 608(a)
1. Purpose of the Amendment
The amendment proposes to change certain of the voting requirements
under the Plan. The changes seek to harmonize voting requirements under
the Plan with voting requirements under the CTA Plan and the CQ Plan.
The Participants understand that the Participants under the CTA Plan
and the CQ Plan intend to submit certain changes to the voting
requirements under those plans to cause them to harmonize with voting
under the Nasdaq/UTP Plan.
The voting requirements that this amendment seeks to revise include
the following:
To change the voting requirement needed to eliminate an
existing fee, or to reduce an existing fee, from unanimity to the
affirmative vote of two-thirds of all Participants entitled to vote;
to change the voting requirement needed to request system
changes other than those related to the processor function from a
unanimous vote to the affirmative vote of a majority of all
Participants entitled to vote;
to change the voting requirement needed to approve
procedures for selecting a successor processor from unanimity to the
affirmative vote of two-thirds of all Participants entitled to vote;
to establish that selecting a new processor requires the
affirmative vote of two-thirds of all Participants entitled to vote;
to change the voting requirement needed if the Plan does
not specify another voting requirement from unanimity to the
affirmative vote of a majority of all Participants entitled to vote.
(a) Fee Setting
In the Participants' view, a two-thirds vote of the Participants,
rather than unanimity, is the appropriate voting requirement for the
Participants to eliminate or reduce an existing fee. The Plan currently
requires a unanimous vote to eliminate a fee. The change with respect
to eliminating a fee would harmonize that voting requirement with the
voting requirements under the CTA and CQ Plans.
The Plan currently requires a unanimous vote to reduce a fee. The
CTA and CQ Plans also require unanimity to reduce a fee. However, the
Participants understand that the Participants under the CTA and CQ
Plans intend to amend those plans to require a two-thirds vote to
reduce a fee. In addition, subjecting fee reductions to a two-thirds
vote would harmonize the Plan with the counterpart requirement under
the OPRA Plan.
The Participants note that, after the amendment to the Plan and the
anticipated amendments to the CTA and CQ Plans, all three plans will
require a two-thirds vote to add, delete or eliminate a fee or to
establish a new fee. These changes would provide the Participants with
greater flexibility in respect of the plan's fee schedule.
(b) System Changes
The Plan currently requires a majority vote to approve system
changes related to the processor function, but requires a unanimous
vote to approve other system changes. The Participants do not believe
that this anomaly is warranted. Rather, in their view, the Plan should
subject all system changes to the same voting requirement. They believe
that that voting requirement should be a majority vote. A majority
voting requirement rather than unanimity would afford the Participants
greater flexibility and make it easier for the Participants to arrive
at decisions regarding necessary system upgrades and changes. The
Participants note that the CTA Plan, the CQ Plan and the OPRA Plan all
require a majority
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vote for decisions relating to system changes.
(c) Processor Selection Procedures
Section V (E) of the Plan sets forth a series of guidelines for the
Participants to follow in establishing procedures for selecting a new
processor. That section currently subjects the Participants' approval
of those procedures to a two-thirds majority vote. In the Participants'
view, a majority vote of the Participants, rather than a two-thirds
vote, is the appropriate voting requirement for approval of the
procedures for selecting a new processor. This vote is only to
establish the selection procedures. Because the Participants may have
divergent views on the form that those procedures should take, a
majority vote makes it easier for the Participants to arrive at a
decision. The Participants note that the CTA Plan, the CQ Plan and the
OPRA Plan all require a majority vote for decisions relating to
procedures for selecting a new processor.
(d) Processor Selection
The Plan does not currently specify the voting requirement for
selecting a new processor. Since the Plan is silent, the applicable
voting requirement would be the requirement that applies to matters for
which the Plan does not specify a voting requirement. That default
voting requirement is currently unanimity, but, as discussed above, the
amendment seeks to change that to a majority vote. The Participants
believe that a unanimous vote could make it too difficult for the
Participants to arrive at a decision and that a matter as significant
as selecting a Plan processor should require more than a simple
majority vote. In their view, a two-thirds majority vote strikes the
right balance of requiring a strong consensus without allowing a single
Participant or a small number of Participants to block the selection of
a new processor.
(e) Default Voting Requirement
The Plan currently requires a unanimous vote in respect of any
matter for which the Plan does not specify a voting requirement. This
requirement can make it unwieldy for the Participants to act, as all
Participants do not always agree on every matter. The Participants
believe that the affirmative vote of a majority of Participants
provides greater flexibility and facilitates their ability to take
action under the Plan. They note that the CTA Plan, the CQ Plan and the
OPRA Plan all require majority votes to act on matters for which those
plans do not specify a voting requirement.
2. Governing or Constituent Documents
Not applicable.
3. Implementation of Amendment
All of the Participants have manifested their approval of the
proposed amendment by means of their execution of the amendment. The
Plan amendment would become operational upon approval by the
Commission.
4. Development and Implementation Phases
Not applicable.
5. Analysis of Impact on Competition
The proposed amendment does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Exchange Act. The Participants do not believe that the proposed
plan amendments introduce terms that are unreasonably discriminatory
for the purposes of Section 11A(c)(1)(D) of the Exchange Act.
6. Written Understanding or Agreements Relating to Interpretation of,
or Participation in, Plan
Not applicable.
7. Approval by Sponsors in Accordance With Plan
See Item A(3) above.
8. Description of Operation of Facility Contemplated by the Proposed
Amendment
Not applicable.
9. Terms and Conditions of Access
See Item A(1) above.
10. Method of Determination and Imposition, and Amount of, Fees and
Charges
See Item A(1) above.
11. Method and Frequency of Processor Evaluation
Not applicable.
12. Dispute Resolution
Not applicable.
B. Rule 601(a)
1. Reporting Requirements
Not applicable.
2. Manner of Collecting, Processing, Sequencing, Making Available and
Disseminating Last Sale Information
Not applicable.
3. Manner of Consolidation
Not applicable.
4. Standards and Methods Ensuring Promptness, Accuracy and Completeness
of Transaction Reports
Not applicable.
5. Rules and Procedures Addressed to Fraudulent or Manipulative
Dissemination
Not applicable.
6. Terms of Access to Transaction Reports
Not applicable.
7. Identification of Marketplace of Execution
Not Applicable.
III. Solicitation of Comments
The Commission seeks general comments on Amendment No. 32.
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposal 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 [email protected]. Please include
File Number S7-24-89 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 Number S7-24-89. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of
the submission, all written statements with respect to the proposed
Plan amendment that are filed with the Commission, and all written
communications relating to the proposed Plan amendment between the
Commission and any person, other than those that may be withheld from
the
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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 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 Web
site viewing and printing at the Office of the Secretary of the
Committee, currently located at the CBOE, 400 S. LaSalle Street,
Chicago, IL 60605. 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 S7-24-
89 and should be submitted on or before October 27, 2014.
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\4\ 17 CFR 200.30-3(a)(27).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\4\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23655 Filed 10-3-14; 8:45 am]
BILLING CODE 8011-01-P