[Federal Register Volume 85, Number 18 (Tuesday, January 28, 2020)]
[Notices]
[Pages 5060-5061]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-01452]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88016; File No. SR-CTA-2019-02]


Consolidated Tape Association; Notice of Filing of the Thirty-
First Substantive Amendment to the Second Restatement of the CTA Plan

January 23, 2020.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on September 11, 2019,\3\ the Consolidated Tape Association (``CTA'') 
Plan participants (``Participants'') \4\ filed with the Securities and 
Exchange Commission (``Commission'') a proposal to amend the Second 
Restatement of the CTA Plan (``Plan'').\5\ This Amendment represents 
the Thirty-First Substantive Amendment to the CTA Plan (``Amendment''). 
Under the Amendment, the Participants propose to amend the Plan to 
align provisions governing the reporting of last sale prices in an 
Eligible Security \6\ by the Processor \7\ during a Regulatory Halt \8\ 
with corresponding provisions under the Nasdaq/UTP Plan.\9\ The 
Participants also propose a non-substantive amendment to update cross 
references to the rules of NYSE and NYSE American in Section XI(a) of 
the Plan.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ See Letter from Robert Books, Chair, CTA/CQ Operating 
Committee, to Vanessa Countryman, Secretary, Commission, dated 
September 6, 2019.
    \4\ The Participants are: Cboe BYX Exchange, Inc.; Cboe BZX 
Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.; 
Cboe Exchange, Inc.; NYSE Chicago, 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.; and NYSE National, Inc. 
(collectively, the ``Participants'').
    \5\ 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.
    \6\ Section VII(a) of the CTA Plan provides, in part, that the 
term ``Eligible Securities'' shall mean ``(i) NYSE and AMEX. Any 
common stock, long-term warrant or preferred stock registered or 
admitted to unlisted trading privileges on the NYSE or the AMEX on 
April 30, 1976; (ii) Other exchanges. Any common stock, long-term 
warrant or preferred stock registered or admitted to unlisted 
trading privileges on any other exchange which, on April 30, 1976, 
substantially met the original listing requirements of the NYSE or 
the AMEX for such securities; (iii) New listings. After April 30, 
1976, any common stock, long-term warrant or preferred stock which 
becomes registered on any exchange or is admitted to unlisted 
trading privileges thereon and which at the time of such 
registration or at the commencement of such trading substantially 
meets the original listing requirements of the NYSE or the AMEX for 
such securities, as the same may be amended from time to time; (iv) 
Rights. Any right admitted to trading on an exchange which entitles 
the holder thereof to purchase or acquire a share or shares of an 
Eligible Security, provided that both the right and the Eligible 
Security to the holders of which the right is granted are admitted 
to trading on the same exchange.''
    \7\ The term ``Processor'' is defined in Section I(x) of the CTA 
Plan as ``the organization designated as recipient and processor of 
last sale price information furnished by Participants pursuant to 
this CTA Plan, as Section V describes.''
    \8\ A ``Regulatory Halt'' is defined in Section Xl(a) of the CTA 
Plan as a halt or suspension of trading in an Eligible Security by a 
listing market ``because such listing market has determined (i) that 
there are matters relating to such Security or the issuer thereof 
which have not been adequately disclosed to the public, or (ii) that 
there are regulatory problems relating to such Security which should 
be clarified before trading therein is permitted to continue.''
    \9\ 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 (the ``Nasdaq/UTP 
Plan'') governs the collection, consolidation, processing, and 
dissemination of last sale and quotation information for Network C 
securities.
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    The proposed Amendment has been filed by the Participants pursuant 
to Rule 608(b)(2) under Regulation NMS.\10\ The Commission is 
publishing this notice to solicit comments from interested persons on 
the proposed Amendment. Set forth in Sections I and II is the statement 
of the purpose and summary of the Amendment, along with the information 
required by Rules 608(a) and 601(a) under the Act, prepared and 
submitted by the Participants to the Commission.
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    \10\ 17 CFR 242.608(b)(2).
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I. Rule 608(a)

A. Purpose of the Amendment

    Section XI(a) of the Plan currently prohibits the Processor from 
including any reports of last sale prices in an Eligible Security 
during a Regulatory Halt, even if the Processor receives a report due 
to a race condition or a late print where the trade occurred prior to 
the Regulatory Halt. The Processor only disseminates these reports of 
last sale prices after the Regulatory Halt is lifted or after the close 
of the market. In particular, when a primary market initiates a 
Regulatory Halt, it sends notifications to the Processor and other 
Participants. A trade may occur at a Participant before that 
Participant receives notification of the Regulatory Halt while a report 
of the trade is made to the Processor after the Processor receives 
notification of the Regulatory Halt. This race condition currently 
results in a transaction occurring at a Participant while the Processor 
delays the dissemination of the trade report.
    With respect to the UTP Plan, the Processor will immediately 
disseminate such reports of last sale prices that occurred prior to the 
Regulatory Halt but received by the Processor after the Regulatory 
Halt. The Participants, in consultation with the Advisory Committee, 
have deemed it appropriate to align the operation of the Plan with the 
operation of the UTP Plan. As a result, the Participants are amending 
the language of the Plan to permit the dissemination of reports of last 
sale prices during a Regulatory Halt.
    In addition, while the primary aim of this Amendment is to address 
situations associated with the race condition described above, it would 
be impractical for the Processor to determine that a transaction 
occurred either before or after a Participant received notification of 
a Regulatory Halt, and therefore whether to immediately disseminate or 
refrain from disseminating the trade report until permissible. 
Consequently, the Participants believe that it is appropriate to place 
the responsibility on the individual Participants to determine whether 
or not a transaction should be printed during a Regulatory Halt, and 
the Processor should simply act as a pass-through for the information 
that it receives from the Participants. Therefore, the Amendment will 
permit the Processor to disseminate any reports of last sale prices 
received during a Regulatory Halt, without reference to the specific 
race condition identified above.

[[Page 5061]]

    The Participants also proposes a non-substantive amendment to 
update cross references to the rules of NYSE and NYSE American in 
Section XI.(a) of the Plan. Currently, the Plan refers to NYSE Rule 
123D and AMEX Rule 119 as the rules that set forth those exchange's 
reopening procedures. The Participants propose to update those 
references to NYSE Rule 7.35 Series and NYSE American Rule 7.35E, which 
are the operative rules of those respective exchanges relating to 
reopening procedures.\11\
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    \11\ See Securities Exchange Act Release Nos. 85962 (May 29, 
2019), 84 FR 26188 (June 5, 2019) (SR-NYSE-2019-05) (Order approving 
NYSE trading rules relating to auctions, which will be implemented 
beginning August 5, 2019); 80590 (May 4, 2017), 82 FR 21843 (May 10, 
2017) (SR-NYSEMKT-2017-01) (Order approving new NYSE American equity 
trading rules, including auction rules).
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B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendment

    Each of the Participants has approved the amendments in accordance 
with Section IV(b) of the CTA Plan and Section IV(c) of the CQ Plan, as 
applicable. The Participants also received feedback from the Advisory 
Committee on aligning the operation of the Plan with the UTP Plan.

D. Development and Implementation Phases

    Not applicable.

E. Analysis of Impact on Competition

    The Participants believe that the proposed amendments do not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Securities Exchange Act of 1934 (the 
``Act''). The Participants believe that aligning the operation of the 
Plan with the UTP Plan with respect to dissemination of information 
during Regulatory Halts reduces inefficiencies and confusion among 
market participants with respect to the operation of the Plan and the 
UTP Plan during a Regulatory Halt. Additionally, the Participants 
believe that the amendment will serve to increase transparency in the 
marketplace by disseminating reports of last sale prices closer in time 
to when such transactions actually occurred.

F. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    Not applicable.

G. Approval by Sponsors in Accordance With Plan

    Section IV(c)(i) of the CQ Plan and Section IV(b)(i) of the CTA 
Plan require the Participants to unanimously approve the amendments 
proposed herein. They so approved it.

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

    Not applicable.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Regulation NMS Rule 601(a) (Solely in Its Application to the 
Amendments to the CTA Plan)

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

    As a result of the amendment, the Processor would be required to 
disseminate reports of last sale prices for transactions received by 
the Processor during a Regulatory Halt.

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 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-CTA-2019-02 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-2019-02. 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 website (http://www.sec.gov/rules/sro.shtml). Copies 
of the submission, all written statements with respect to the proposed 
Amendment that are filed with the Commission, and all written 
communications relating to the proposed 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 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 website viewing and printing at 
the principal office of the Plan. 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 SR-CTA-
2019-02 and should be submitted on or before February 18, 2020.

    By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2020-01452 Filed 1-27-20; 8:45 am]
 BILLING CODE 8011-01-P