[Federal Register Volume 82, Number 97 (Monday, May 22, 2017)]
[Notices]
[Pages 23475-23477]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-10309]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80687; File No. SR-BatsBZX-2017-31]


Self-Regulatory Organizations; Bats BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to Rule 
11.27 of Bats BZX Exchange, Inc. To Modify the Date of Appendix B Web 
Site Data Publication Pursuant to the Regulation NMS Plan To Implement 
a Tick Size Pilot Program

May 16, 2017.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the

[[Page 23476]]

``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 4, 2017, Bats BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been 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) 
thereunder,\4\ 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 Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend Rule 11.27 to modify the 
date of Appendix B Web site data publication pursuant to the Regulation 
NMS Plan to Implement a Tick Size Pilot Program (``Plan'').
    The text of the proposed rule change is available at the Exchange's 
Web site at www.bats.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 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Rule 11.27(b) (Compliance with Data Collection Requirements) \5\ 
implements the data collection and Web site publication requirements of 
the Plan.\6\ Rule 11.27(b).08 provides, among other things, that the 
requirement that the Exchange or Designated Examining Authority 
(``DEA'') make certain data for the Pre-Pilot Period and Pilot Period 
\7\ publicly available on their Web site pursuant to Appendix B and C 
to the Plan shall commence on April 28, 2017.\8\ The Exchange is 
proposing to amend Rule 11.27.08 to delay the Appendix B data Web site 
publication date until August 31, 2017. The Exchange is proposing to 
further delay the Web site publication of Appendix B data until August 
31, 2017 to permit additional time to consider a methodology to 
mitigate concerns raised in connection with the publication of Appendix 
B data.
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    \5\ See Exchange Rule 11.27(b). See also Securities Exchange Act 
Release Nos. 77105 (February 10, 2016), 81 FR 8112 (February 17, 
2016); and 77310 (March 7, 2016), 81 FR 13012 (March 11, 2016).
    \6\ The Participants filed the Plan to comply with an order 
issued by the Commission on June 24, 2014. See Letter from Brendon 
J. Weiss, Vice President, Intercontinental Exchange, Inc., to 
Secretary, Commission, dated August 25, 2014 (``SRO Tick Size Plan 
Proposal''). See Securities Exchange Act Release No 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014); see also Securities Exchange Act 
Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015).
    \7\ Unless otherwise defined herein, capitalized terms have the 
meaning ascribed to them in Exchange Rule 11.27.
    \8\ See Exchange Rule 11.27.08. See also Securities Exchange Act 
Release No. 80207 (March 10, 2017), 82 FR 14056 (March 16, 2017). 
See also Letter from David S. Shillman, Associate Director, Division 
of Trading and Markets, Commission, to Robert L.D. Colby, Executive 
Vice President and Chief Legal Officer, FINRA, dated February 28, 
2017.
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    Pursuant to this proposed amendment, the Exchange or DEA would 
publish the required Appendix B data for the Pre-Pilot Period through 
April 30, 2017, by August 31, 2017.\9\ Thereafter, Appendix B data for 
a given month would be published within 120 calendar days following 
month end.\10\ Thus, for example, Appendix B data for May 2017 would be 
made available on the Exchange or DEA's Web site by September 28, 2017, 
and data for the month of June 2017 would be made available on the 
Exchange or DEA's Web site by October 28, 2017.
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    \9\ The Exchange initially submitted this proposed rule change 
on April 28, 2017. (SR-BatsBZX-2017-27). On May 4, 2017, the 
Exchange withdrew SR-BatsBZX-2017-27 and submitted this filing.
    \10\ FINRA, on behalf of the Exchange, also is submitting an 
exemptive request to the SEC in connection with the instant filing.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act \11\ in general, and furthers the objectives of section 
6(b)(5) of the Act \12\ in particular, in that it is designed 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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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 stock of small-
capitalization companies. The Exchange believes that this proposal is 
consistent with the Act because it is in furtherance of the objectives 
of section VII(A) of the Plan in that it is designed to provide the 
Exchange with additional time to consider a methodology to mitigate 
concerns raised in connection with the publication of Appendix B data.

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.

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

    The Exchange has neither solicited nor received written 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) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19(b)-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has filed 
the proposed rule change for immediate effectiveness and

[[Page 23477]]

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 on the date of filing.
    The Exchange notes that the proposed rule change is intended to 
mitigate confidentiality concerns raised in connection with section 
VII(A) of the Plan, which provides that the data made publicly 
available will not identify the Trading Center that generated the data. 
The Exchange states that the additional time would allow consideration 
of a methodology to mitigate concerns related to the publication of 
Appendix B data.\15\
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    \15\ The Commission recently approved a FINRA proposal to 
implement an aggregated, anonymous grouped masking methodology for 
the publication of Appendix B data related to OTC trading activity. 
See Securities Exchange Release No. 80551, (April 28, 2017), 82 FR 
20948 (May 4, 2017). See also Letter from David S. Shillman, 
Associate Director, Division of Trading and Markets, Commission, to 
Marcia E. Asquith, Executive Vice President FINRA, dated April 28, 
2017.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will synchronize the timing for publication of Appendix B 
data for all Participants, which should enhance the consistency and 
usefulness of the data.\16\ Therefore, the Commission hereby waives the 
30-day operative delay and designates the proposed rule change to be 
operative on the date of filing.\17\
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    \16\ The Commission recently granted exemptive relief to the 
Participants delay the publication of their Appendix B data until 
August 31, 2017. See Letter from David S. Shillman, Associate 
Director, Division of Trading and Markets, Commission, to Jennifer 
Piorko Mitchell, Vice President and Deputy Corporate Secretary, 
FINRA, dated April 28, 2017. The Commission notes that other 
Participants have submitted proposed rule changes to delay the 
publication of Appendix B data until August 31, 2017. See e.g., SR-
BatsBYX-2017-10; SR-BatsEDGA-2017-10; SR-BatsEDGX-2017-19; SR-BX-
2017-022; SR-CHX-2017-07; SR-FINRA-2017-010; SR-IEX-2017-12; SR-
NASDAQ-2017-044; SR-Phlx-2017-33; SR-NYSE-2017-19; SR-NYSEArca-2017-
49; SR-NYSEMKT-2017-24.
    \17\ For purposes only of waiving the operative delay for this 
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, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

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 [email protected]. Please include 
File Number SR-BatsBZX-2017-31 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-BatsBZX-2017-31. 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 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 
10:00 a.m. and 3:00 p.m. Copies of the filing also will 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-BatsBZX-2017-31 and should 
be submitted on or before June 12, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-10309 Filed 5-19-17; 8:45 am]
 BILLING CODE 8011-01-P