[Federal Register Volume 89, Number 83 (Monday, April 29, 2024)]
[Notices]
[Pages 33412-33414]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-09067]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100017; 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

April 23, 2024.

I. Introduction

    On October 23, 2023, 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, MIAX PEARL, 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. (collectively, the 
``SROs'' or ``Participants'') filed with the Securities and Exchange 
Commission (``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 January 25, 2024.\1\
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    \1\ See Joint Industry Plan; Notice of Filing of a National 
Market System Plan Regarding Consolidated Equity Market Data, 
Securities Exchange Act Release No. 99403 (Jan. 19, 2024), 89 FR 
5002 (Jan. 25, 2024) (``Notice'').
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    This order institutes proceedings, under Rule 608(b)(2)(i) of 
Regulation NMS,\2\ to determine whether to approve or disapprove the 
proposed CT Plan or to approve it with any changes or subject to any 
conditions the Commission deems necessary or appropriate after 
considering public comment.\3\
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    \2\ 17 CFR 242.608(b)(2)(i).
    \3\ 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.
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II. Background

    On September 1, 2023, the Commission issued an amended order 
directing the SROs to submit a new national market system plan (``NMS 
plan'') regarding consolidated equity market data to replace the three 
NMS plans (``Equity Data Plans'') \4\ that govern the public 
dissemination of real-time consolidated market data for NMS stocks,\5\ 
and to include specified provisions in the proposed NMS plan.\6\ The 
SROs filed the proposed CT Plan pursuant to the Amended Governance 
Order.\7\
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    \4\ The three Equity Data Plans that currently govern the 
collection, consolidation, processing, and dissemination of 
consolidated equity market data via the exclusive securities 
information processors (``SIPs'') 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'').
    \5\ Amended Order Directing the Exchanges and the Financial 
Industry Regulatory Authority, Inc., to File a National Market 
System Plan Regarding Consolidated Equity Market Data, Securities 
Exchange Act Release No. 98271 (Sept. 1, 2023), 88 FR 61630, 61631 
(Sept. 7, 2023) (File No. 4-757) (``Amended Governance Order'').
    \6\ See id. at 61639-41.
    \7\ See Notice, supra note 1, 89 FR at 5003.
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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,\8\ and Rules 700 and 701 of the 
Commission's Rules of Practice,\9\ to determine whether to approve or 
disapprove the proposed CT Plan or to approve it with any changes or 
subject to any conditions the Commission deems necessary or appropriate 
after considering public comment. The Commission is instituting 
proceedings to have sufficient time to consider the issues raised by 
the proposed CT Plan, including comments received. 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.
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    \8\ 17 CFR 242.608.
    \9\ 17 CFR 201.700; 17 CFR 201.701.
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    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 Securities Exchange Act of 1934 
(``Exchange Act'').\10\ Rule 608(b)(2) of Regulation NMS further 
provides that the Commission shall disapprove a national market system 
plan or proposed amendment if it does not make such a finding.\11\ In 
this order, pursuant to Rule 608(b)(2)(i) of Regulation NMS,\12\ the 
Commission is providing notice of the grounds for disapproval under 
consideration:
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    \10\ See 17 CFR 242.608(b)(2).
    \11\ See id.
    \12\ 17 CFR 242.608(b)(2)(i).
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    1. Whether the proposed CT Plan is consistent with the Amended 
Governance Order;
    2. Whether, consistent with Rule 608(b)(2) of Regulation NMS,\13\ 
the terms of the proposed CT Plan are 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 Exchange Act;
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    \13\ See 17 CFR 242.608(b)(2).
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    3. Whether modifications to the proposed CT Plan, or conditions to 
its approval, would be necessary 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 Exchange Act;
    4. Whether the proposed CT Plan is consistent with Congress's 
finding, in section 11A(a)(1)(C)(iii) of the Exchange 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 of information with 
respect to quotations for and transactions in securities''; \14\
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    \14\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
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    5. Whether, consistent with the purposes of section 11A(c)(1)(B) of 
the Exchange Act, 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 stocks, and the fairness and usefulness of 
the form and content of such information; \15\ and
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    \15\ See 15 U.S.C. 78k-1(c)(1)(B).
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    6. Whether, consistent with Rule 608(b)(2) of Regulation NMS,\16\ 
the proposed timeline for implementation in Exhibit F \17\ of the 
proposed CT Plan is necessary or appropriate in the public interest, 
for the protection of investors

[[Page 33413]]

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 Exchange Act.
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    \16\ See 17 CFR 242.608(b)(2).
    \17\ See Notice, supra note 1, 89 FR at 5027-29.
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    Under the Commission's Rules of Practice, the ``burden to 
demonstrate that a NMS plan filing is consistent with the Exchange Act 
and the rules and regulations issued thereunder . . . is on the plan 
participants that filed the NMS plan filing.'' \18\ The description of 
the NMS plan filing, its purpose and operation, its effect, and a legal 
analysis of its consistency with applicable requirements must all be 
sufficiently detailed and specific to support an affirmative Commission 
finding.\19\ Any failure by the Participants to provide such detail and 
specificity may result in the Commission not having a sufficient basis 
to make an affirmative finding that the NMS plan filing is consistent 
with the Exchange Act and the applicable rules and regulations 
thereunder.\20\
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    \18\ 17 CFR 201.701(b)(3)(ii).
    \19\ Id.
    \20\ Id.
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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 proposed CT Plan. The Commission asks that commenters address 
the sufficiency and merit of the Participants' statements in support of 
the proposed CT Plan, in addition to any other comments they may wish 
to submit about the proposed CT Plan. In particular, the Commission 
seeks comment on the following:
    1. What are commenters' views on whether the proposed CT Plan is 
consistent with Section 11A or any other provisions of the Exchange 
Act, or the rules and regulations thereunder?
    2. Should any elements of the proposed timeline in Exhibit F \21\ 
of the proposed CT Plan be shortened to ensure that implementation of 
the proposed CT Plan can be achieved within a reasonable time? If so, 
which ones and why? Should any elements of the proposed timeline be 
extended? If so, which ones and why? If the Commission should modify 
any elements of the proposed timeline, how specifically should it 
change them? Should the Commission modify the proposed CT Plan to 
include a specific required end date for implementation? Why or why 
not? And if so, what should that date be and why?
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    \21\ See Notice, supra note 1, 89 FR at 5027-29.
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    3. Should the Commission modify the sequence of implementation 
steps identified in Exhibit F of the proposed CT Plan \22\ to provide 
for greater efficiencies, such as through increased parallel 
performance of workstream tasks? \23\ If so, what changes should be 
made? Do commenters believe that the proposed implementation schedule's 
dependencies--the steps that need to be completed before other steps 
can begin--are justified or otherwise reasonable? Are there 
dependencies that could be removed or modified to accelerate 
implementation of the proposed CT Plan? If so, which ones and why? What 
advantages or disadvantages, including risks or complications, would be 
associated with such modifications to the implementation timeline?
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    \22\ See id.
    \23\ Generally, the SROs believe there are six workstreams 
associated with the implementation of the proposed CT Plan: (1) 
Setting up the proposed CT Plan's governance; (2) Developing the 
proposed CT Plan's fees, policies, and data subscriber agreements; 
(3) Selecting the new Administrator; (4) Contract negotiations with 
the new Administrator; (5) Administrator setup; and (6) Retirement 
of the CTA Plan, CQ Plan, and UTP Plan. See Notice, supra note 1, 89 
FR at 5003.
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    4. What are commenters' views of Section 14.1 of the proposed CT 
Plan,\24\ which would allow the Operating Committee to lengthen the 
implementation timelines in Exhibit F by an affirmative vote of the 
Operating Committee? \25\ Should the proposed CT Plan include specific 
standards to be met before the implementation timelines are lengthened? 
Should any such changes be subject to Commission approval? Why or why 
not?
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    \24\ See Notice, supra note 1, 89 FR at 5021.
    \25\ Section 14.1 of the proposed CT Plan provides that the 
Operating Committee must make a reasonable determination that the 
timeline needs to be extended and provide written progress reports 
to the Commission noting the adjustments. See id.
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    5. Should the Commission modify the proposed CT Plan to allow the 
Operating Committee to appoint one or more of the current Equity Data 
Plan administrators to serve as interim Administrator(s) for the 
proposed CT Plan pending the selection and onboarding of a permanent 
independent Administrator that meets the Amended Governance Order's 
requirement that the independent plan Administrator shall not ``be 
owned or controlled by a corporate entity that, either directly or via 
another subsidiary, offers for sale its own proprietary market data 
product for NMS stocks''? \26\ How might an interim Administrator 
affect the implementation schedule for the proposed CT Plan? If the 
Commission modified the proposed CT Plan to permit interim 
Administrator(s), should it modify the implementation schedule 
accordingly? If so, how? What would be the advantages and disadvantages 
associated with the appointment of such an interim Administrator(s)?
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    \26\ Amended Governance Order, supra note 5, 88 FR at 61640.
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    6. Are there additional actions of the proposed CT Plan Operating 
Committee that should not be subject to the two-thirds-vote requirement 
in Section 4.3(b) of the proposed CT Plan? \27\ If so, which actions 
and why?
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    \27\ For example, Section 4.3(c) of the proposed CT Plan lists 
actions that may be taken by simple majority vote. See Notice, supra 
note 1, 89 FR at 5011.
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    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,\28\ any request for an opportunity 
to make an oral presentation.\29\
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    \28\ 17 CFR 242.608(b)(2)(i).
    \29\ 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).
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    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 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 CT Plan that are filed with the 
Commission, and all written communications relating to the proposed CT 
Plan between the Commission and any person, other than those that may 
be withheld from the public in accordance with the

[[Page 33414]]

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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the Participants' principal offices. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number 4-757 and should be submitted 
on or before May 20, 2024. Rebuttal comments should be submitted by 
June 3, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
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    \30\ 17 CFR 200.30-3(a)(85).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-09067 Filed 4-26-24; 8:45 am]
BILLING CODE 8011-01-P