[Federal Register Volume 86, Number 38 (Monday, March 1, 2021)]
[Notices]
[Pages 12038-12040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04088]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91189; File No. SR-CTA/CQ-2021-01]


Consolidated Tape Association; Notice of Filing of the Thirty-
Sixth Substantive Amendment to the Second Restatement of the CTA Plan 
and Twenty-Seventh Substantive Amendment to the Restated CQ Plan

February 23, 2021.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on February 3, 2021,\3\ the Participants \4\ in the Second Restatement 
of the Consolidated Tape Association (``CTA'') Plan and Restated 
Consolidated Quotation (``CQ'') Plan (collectively ``CTA/CQ Plans'' or 
``Plans'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') a proposal to amend the Plans.\5\ These amendment 
represents the Thirty-Sixth Substantive Amendment to the CTA Plan and 
Twenty-Seventh Substantive Amendment to the CQ Plan (``Amendments''). 
Under the Amendments, the Participants propose revisions to the 
provisions of the Plans governing regulatory and operational halts.\6\
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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 (Feb. 3, 
2021).
    \4\ The Participants are: Cboe BYX Exchange, Inc., Cboe BZX 
Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., 
Cboe Exchange, Inc., Financial Industry Regulatory Authority, Inc., 
The Investors' Exchange LLC, Long-Term Stock Exchange, Inc., MEMX 
LLC, MIAX PEARL, LLC, 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., NYSE Chicago, Inc., and NYSE 
National, Inc. (collectively, the ``Participants'').
    \5\ The Amendments were posted to the Plans' website on February 
12, 2021. See Email from James P. Dombach, Counsel to the Plans, to 
Michael E. Coe, Assistant Director, Commission, et al. (Feb. 12, 
2021).
    \6\ The Participants previously, on December 5, 2016, filed 
amendments to the provisions of the Plans governing regulatory and 
operation halts. These amendments were not acted upon by the 
Commission and were withdrawn by the Participants. See Letter from 
Robert Books, UTP Chair, to Vanessa Countryman, Secretary, 
Commission (Nov. 17, 2020).
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    The proposed Amendments have been filed by the Participants 
pursuant to Rule 608(b)(2) under Regulation NMS.\7\ The Commission is 
publishing this notice to solicit comments from interested persons on 
the proposed Amendments. Set forth in Sections I and II is the 
statement of the purpose and summary of the Amendments, along

[[Page 12039]]

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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    \7\ 17 CFR 242.608(b)(2).
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I. Rule 608(a)

A. Purpose of the Amendments

    The purpose of the Amendments is to incorporate into the Plans the 
same processes for Regulatory Halts that are proposed by the equity 
exchanges. Consistent with the proposals from the equity exchanges, the 
Primary Listing Market may declare a Regulatory Halt \8\ in trading for 
any security for which it is the Primary Listing Market.\9\ The 
Participants believe that it is appropriate for the Primary Listing 
Market to declare a Regulatory Halt in order to vest the authority to 
declare a Regulatory Halt in a single entity, and with respect to any 
given security, the Primary Listing Market is best positioned to 
determine when to initiate and end a Regulatory Halt.
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    \8\ Regulatory Halt is defined in Section XI(a)(i)(J) as ``a 
halt declared by the Primary Listing Market in trading in one or 
more securities on all Trading Centers for regulatory purposes, 
including for the dissemination of material news, news pending, 
suspensions, or where otherwise necessary to maintain a fair and 
orderly market. A Regulatory Halt includes a trading pause triggered 
by Limit Up Limit Down, a halt based on Extraordinary Market 
Activity, a trading halt triggered by a Market-Wide Circuit Breaker, 
and a SIP Halt.''
    \9\ The ``Primary Listing Market'' is defined in Section 
XI(a)(i)(H) as ``the national securities exchange on which an 
Eligible Security is listed. If an Eligible Security is listed on 
more than one national securities exchange, Primary Listing Market 
means the exchange on which the security has been listed the 
longest.''
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    The Primary Listing Market may declare a Regulatory Halt as 
provided for in the rules of the Primary Listing Market, if it 
determines that there is a SIP Outage,\10\ Material SIP Latency,\11\ 
Extraordinary Market Activity,\12\ or in the event of national, 
regional, or localized disruption that necessitates a Regulatory Halt 
to maintain a fair and orderly market.\13\ In making such 
determination, the Primary Listing Market will consider the totality of 
information available concerning the severity of the disruption, its 
likely duration, and potential impact on Member Firms and other market 
participants, and will make a good-faith determination that the 
criteria to declare a Regulatory Halt have been satisfied and that a 
Regulatory Halt is appropriate. The Primary Listing Market will 
consult, if feasible before declaring a Regulatory Halt, with the 
affected Trading Center(s), other Participants, or the Processor, as 
applicable, regarding the scope of the issue and what steps are being 
taken to address the issue.
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    \10\ SIP Outage is defined in Section XI(a)(i)(M) as ``a 
situation in which the Processor has ceased, or anticipates being 
unable, to provide updated and/or accurate quotation or last sale 
price information in one or more securities for a material period 
that exceeds the time thresholds for an orderly failover to backup 
facilities established by mutual agreement among the Processor, the 
Primary Listing Market for the affected securities, and the 
Operating Committee unless the Primary Listing Market, in 
consultation with the Processor and the Operating Committee, 
determines that resumption of accurate data is expected in the near 
future.''
    \11\ Material SIP Latency is defined in Section XI(a)(i)(E) as 
``a delay of quotation or last sale price information in one or more 
securities between the time data is received by the Processor and 
the time the Processor disseminates the data over the high speed 
line or over the ``high speed line'' under the CQ Plan, which delay 
the Primary Listing Market determines, in consultation with, and in 
accordance with, publicly disclosed guidelines established by the 
Operating Committee, to be (a) material and (b) unlikely to be 
resolved in the near future.''
    \12\ Extraordinary Market Activity is defined in Section 
XI(a)(i)(A) as ``a disruption or malfunction of any electronic 
quotation, communication, reporting, or execution system operated 
by, or linked to, the Processor or a Trading Center or a member of 
such Trading Center that has a severe and continuing negative 
impact, on a market-wide basis, on quoting, order, or trading 
activity or on the availability of market information necessary to 
maintain a fair and orderly market. For purposes of this definition, 
a severe and continuing negative impact on quoting, order, or 
trading activity includes (i) a series of quotes, orders, or 
transactions at prices substantially unrelated to the current market 
for the security or securities; (ii) duplicative or erroneous 
quoting, order, trade reporting, or other related message traffic 
between one or more Trading Centers or their members; or (iii) the 
unavailability of quoting, order, transaction information, or 
regulatory messages for a sustained period.'' In the originally 
proposed amendments in 2016, Extraordinary Market Activity was 
defined to include disruptions or malfunctions on a market. After 
discussions with SEC Staff, the Participants revised this provision 
to solely limit the definition to disruptions or malfunctions that 
occur on a market-wide basis.
    \13\ See Section XI(a)(iii). In the originally proposed 
amendments in 2016, the Primary Listing Market could have declared a 
Regulatory Halt ``when otherwise necessary to maintain a fair and 
orderly market or in the public interest.'' After discussions with 
SEC Staff, the Participants revised this provision as part of the 
current Amendments in order to provide greater detail as to when a 
Regulatory Halt may be declared. The definitions of SIP Outage, 
Material SIP Latency, and Extraordinary Market Activity appear in 
Section XI(a)(i).
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    Should the Primary Listing Market declare a Regulatory Halt, the 
Primary Listing Market will determine the SIP Halt Resume Time.\14\ The 
Primary Listing Market will declare a resumption of trading when it 
makes a good-faith determination and considers the totality of 
information to determine that trading may resume in a fair and orderly 
manner in accordance with its rules. The Primary Listing Market retains 
discretion to delay the SIP Halt Resume Time if it believes trading 
will not resume in a fair and orderly manner. The Primary Listing 
Market has the responsibility to notify all other Participants of the 
initiation of the halt as well as the lifting of the halt. The 
notification process will be mutually agreed to by the Operating 
Committee and the Primary Listing Market.\15\
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    \14\ SIP Halt Resume Time is defined in Section XI(a)(i)(L) as 
``the time that the Primary Listing Market determines as the end of 
a SIP Halt.''
    \15\ See Section XI(a)(viii).
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    During Regular Trading Hours, if the Primary Listing Market does 
not open a security within the amount of time as specified by the rules 
of the Primary Listing Market after the SIP Halt Resume Time, a 
Participant may resume trading in that security. Outside of Regular 
Trading Hours, a Participant may resume trading immediately after the 
SIP Halt Resume Time.
    The Amendments provide that the Processor shall disseminate to the 
Participants notice of the Regulatory Halt as well as notice of the 
lifting of a Regulatory Halt through any means the Processor considers 
appropriate.\16\
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    \16\ See id.
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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 solicited the Advisory Committee for 
its thoughts and any comments on the Amendments. The Amendments would 
become operational upon approval by the Commission.

D. Development and Implementation Phases

    The Amendments proposed herein would be implemented to coincide 
with amendments filed by the equity exchanges and approved by the 
Commission.

E. Analysis of Impact on Competition

    The Amendments proposed herein do not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because the amendments simply incorporate into the 
Plans the processes for Regulatory Halts that will be proposed by the 
equity exchanges. The Participants do not believe that the proposed 
Amendments introduce terms that are unreasonably discriminatory for the 
purposes of Section 11A(c)(1)(D) of the Act.

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

    Not applicable.

[[Page 12040]]

G. Approval by Sponsors in Accordance With Plans

    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 
Amendments

    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

    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 comments on the Amendments. Interested persons 
are invited to submit written data, views, and arguments concerning the 
foregoing, including whether the proposed Amendments are consistent 
with the Act and the rules and regulations thereunder applicable to 
national market system plans. Comments may be submitted by any of the 
following methods:

Electronic Comments

    <bullet> Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#7e0c0b121b531d1113131b100a0d3e0d1b1d50191108"><span class="__cf_email__" data-cfemail="097b7c656c246a6664646c677d7a497a6c6a276e667f">[email protected]</span></a>. Please include 
File Number SR-CTA/CQ-2021-01 on the subject line.

Paper Comments

    <bullet> 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/CQ-2021-01. 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 
Amendments that are filed with the Commission, and all written 
communications relating to the proposed Amendments 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 Plans. 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/CQ-2021-01 and should be submitted on or before 
March 22, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(85).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04088 Filed 2-26-21; 8:45 am]
BILLING CODE 8011-01-P


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