[Federal Register Volume 80, Number 132 (Friday, July 10, 2015)]
[Notices]
[Pages 39821-39823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16837]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75363; File No. SR-CTA-2015-02]
Consolidated Tape Association; Notice of Filing of the Twenty
Third Substantive Amendment to the Second Restatement of the CTA Plan
July 6, 2015.
Pursuant to Section 11A of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that
on June 19, 2015, certain participants (``Approving Participants'') \3\
in the Second Restatement of the Consolidated Tape Association Plan
(``CTA Plan'' or ``Plan'') filed with the Securities and Exchange
Commission (``Commission'') a proposal to amend the Plan.\4\ The
[[Page 39822]]
amendment represents the 23rd Substantive Amendment (``Amendment'') to
the CTA Plan.\5\ The Amendment proposes to establish a fee that will be
charged to a vendor or other data redistributor that fails to comply
with the CTA Plan participants' Consolidated Volume display statement,
and related requirements. The non-compliance charge seeks to provide
incentives for data redistributors to comply with the participants'
consolidated volume requirements.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78k-1.
\2\ 17 CFR 242.608.
\3\ More than two-thirds of the CTA Plan participants approved
the amendment. The Approving 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, National Stock Exchange, New York Stock
Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. NASDAQ OMX BX, Inc.,
NASDAQ OMX PHLX, Inc., and the Nasdaq Stock Market LLC are also CTA
Plan participants (``participants'').
\4\ See Securities Exchange Act Release Nos. 10787 (May 10,
1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan
effective). The most recent restatement of the Plan was in 1995. 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\ The Amendment was originally submitted on an immediately
effective basis pursuant to Rule 608(b)(3)(i) under Regulation NMS.
See Letter from Emily Kasparov, Chairman, CTA Plan Operating
Committee to Brent J. Fields, Secretary, Commission, dated May 18,
2015. On June 19, 2015, the Approving Participants filed a letter to
indicate the proposal should be considered under Rule 608(b)(1) and
Rule 608(b)(2) of Regulation NMS. As a result, the Amendment must be
approved by the Commission. See Letter from Emily Kasparov,
Chairman, CTA Plan Operating Committee to Brent J. Fields,
Secretary, Commission, dated June 17, 2015. The Amendment was
designated as the Twenty Second Charges Amendment to the Plan. The
Commission notes that the proposal is the Twenty Third Substantive
Amendment to the Plan.
---------------------------------------------------------------------------
The Commission is publishing this notice to solicit comments from
interested persons on the proposed Amendment.
I. Rule 608(a)
A. Purpose of the Amendment
Historically, the Plan participants have not applied device fees to
devices that receive consolidated volume (i.e., aggregate volume for
trades taking place on all market centers under the Plan) in displays
that do not also include CTA Plan prices or CQ Plan quotation
information. The participants do not plan to change this policy.
However, some data redistributors include consolidated volume in
displays of unconsolidated last sale prices and/or unconsolidated bid-
asked quotes, such as displays of one exchange's trade prices and
quotes.
Such displays, whether displayed internally or externally, could
mislead investors in respect of the nature of the information they are
viewing. A significant number of data users receive proprietary trade
prices and quotes. Unless the data users understand the content being
displayed, they could mistakenly think that they are seeing
consolidated trades and quotes because they see consolidated volume
without any explanation.
To make the displays transparent and less likely to mislead, the
Approving Participants have determined to require data redistributors
that include consolidated volume in displays of unconsolidated prices
and quotes to incorporate into those displays the following statement
(or a close iteration of the statement that the network
administrator(s) have approved): ``Realtime quote and/or trade prices
are not sourced from all markets.''
A data redistributor must also assure that any person included in
the redistribution chain starting with the data redistributor places
the statement in any such display that it provides. The statement must
be clearly visible to the end users so that they understand the
differences in the data sources.
In addition, data redistributors need to assure that they, and any
person or entity included in the redistribution chain starting with
them, clearly incorporate the display statement into any advertisement,
sales literature or other material displaying CTA Consolidated Volume
alongside unconsolidated prices or quotes.
These requirements apply to both real-time and delayed displays of
consolidated volume.
In order to ensure compliance with these requirements, the
participants will require all recipients of the CTA last sale price
datafeed (whether directly or indirectly) to submit a declaration. The
participants will require those firms that include consolidated volume
in displays of unconsolidated prices and quotes to submit to NYSE a
screen print of the displays, showing the display statement. As this is
a new requirement, the CTA Administrator will work with firms to
facilitate their compliance.
A firm with access to CTA consolidated volume data must submit the
declaration and, if applicable, the screen print within 120 days from
the effective date of the amendment or within 30 days of the effective
date of the firm's market data agreement with the participants that
governs its receipt of the CTA datafeed (its ``Vendor Agreement'').
Thereafter, each firm must submit its declaration and, if applicable,
its screen print annually by the 31st day of each January. The
declaration and screen print (if applicable) must be submitted to
[email protected].
The Approving Participants' representatives met with SIFMA and the
CTA Plan's Advisory Committee to discuss the consolidated volume
requirements and responded to their questions. The Approving
Participants shortened the display statement in response to comments
and made clear that a datafeed recipient is free to provide an
exchange's trading volume with displays of the exchanges trade prices
and quotes, without the need to include a display requirement.
In order to motivate data recipients to comply with the display
statement requirements, including the requisite declarations and screen
submissions, the Approving Participants have determined to establish a
non-compliance fee for each month of non-compliance. For each of
Network A and Network B, the monthly fee is $3,000.
A datafeed recipient must submit the required screen prints by July
9, 2015 \6\ or within thirty days of the effective date of its Vendor
Agreement. It must submit those screen prints (including previously
provided, new, or changed screen prints) annually by the 31st day of
each January thereafter.
---------------------------------------------------------------------------
\6\ The Commission notes that the Amendment shall not become
effective prior to Commission approval. See id.
---------------------------------------------------------------------------
The non-compliance charges will be assessed against a data
redistributor for each month in which it fails to provide the
declaration or a copy of a Consolidated Volume screen print with the
required display statement in a timely manner. The charge will also be
assessed against a data redistributor each month for non-compliance by
persons in the redistribution chain starting with the data
redistributor where such persons have not entered into an applicable
agreement with CTA.
The non-compliance charges seek to provide incentives for data
redistributors to comply with the consolidated volume requirements. The
Approving Participants do not view the non-compliance fee as
establishing a new revenue source. Rather, they hope it encourages all
data redistributors to submit their declarations and screen prints
(where applicable) in a timely fashion. They hope that the fee will
motivate non-compliant redistributors to adopt the same practices that
the majority of redistributors follow.
The inclusion of delayed displays of consolidated volume in the
consolidated volume requirements seeks to add clarity where a data
redistributor accompanies displays of real-time unconsolidated prices
and quotes with delayed consolidated volume. The Approving Participants
seek to prevent that data redistributor from misleading investors while
escaping the consolidated display requirements.
B. Governing or Constituent Documents
Not applicable.
C. Implementation of the Amendment
Approving Participants have manifested their approval of the
[[Page 39823]]
proposed Amendment by means of their execution of the Amendment. The
Plan Amendment would become operational upon approval by the
Commission.\7\
---------------------------------------------------------------------------
\7\ See supra note 5.
---------------------------------------------------------------------------
D. Development and Implementation Phases
The Approving Participants anticipate commencing to apply the
compliance fee on data redistributors that fail to submit declarations
or required screen prints by [DATE] [sic]. The Approving Participants
will give notice of the compliance fee to all data redistributors no
less than 120 days prior to its implementation.
E. Analysis of Impact on Competition
The amendment will impose no burden on competition.
F. Written Understanding or Agreements Relating to Interpretation of,
or Participation in, Plan
The participants have no written understandings or agreements
between or among them relating to interpretation of the CTA Plan as a
result of the amendment.
G. Approval by Sponsors in Accordance With Plan
Section XII (b)(iii) of the CTA Plan provides that ``[a]ny addition
of any charge to . . . the charges set forth in Exhibit E . . . shall
be effected by an amendment to this CTA Plan . . . that is approved by
affirmative vote of not less than two-thirds of all of the then voting
members of CTA. Any such amendment shall be executed on behalf of each
Participant that appointed a voting member of CTA who approves such
amendment and shall be filed with the SEC.''
The Approving Participants have executed this Amendment and
represent not less than two-thirds of all of the parties to the Plan.
That satisfies the Plan's participant-approval requirements.
H. Description of Operation of Facility Contemplated by the Proposed
Amendment
Not applicable.
I. Terms and Conditions of Access
Not applicable.
J. Method of Determination and Imposition, and Amount of, Fees and
Charges
The Approving Participants believe that the proposed compliance fee
is fair and reasonable and provides for an equitable allocation of
dues, fees, and other charges among vendors, data recipients and other
persons using CTA Network A facilities. They intend that it will
provide incentives for compliance with consolidated volume
requirements. The charge will be applied uniformly to vendors, data
recipients and other persons that fail to comply.
K. Method and Frequency of Processor Evaluation
Not applicable.
L. Dispute Resolution
Not applicable.
II. Rule 601(a)
A. Equity Securities for Which Transaction Reports Shall Be Required by
the Plan
Not applicable.
B. Reporting Requirements
Not applicable.
C. Manner of Collecting, Processing, Sequencing, Making Available and
Disseminating Last Sale Information
Not applicable.
D. Manner of Consolidation
Not applicable.
E. Standards and Methods Ensuring Promptness, Accuracy and Completeness
of Transaction Reports
Not applicable.
F. Rules and Procedures Addressed to Fraudulent or Manipulative
Dissemination
Not applicable.
G. Terms of Access to Transaction Reports
Not applicable.
H. Identification of Marketplace of Execution
Not applicable.
III. Solicitation of Comments
The Commission seeks general comments on the Amendment. Interested
persons are invited to submit written data, views, and arguments
concerning the foregoing, including whether the proposed Amendment are
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 SR-CTA-2015-02 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 SR-CTA-2015-02. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the Amendment that are filed with
the Commission, and all written communications relating to the
Amendment 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 Amendment also will be available for inspection and
copying at the principal office of the CTA. 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-CTA-2015-02 and should be submitted on
or before July 31, 2015.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(27).
---------------------------------------------------------------------------
Brent J. Fields,
Secretary.
[FR Doc. 2015-16837 Filed 7-9-15; 8:45 am]
BILLING CODE 8011-01-P