60874 Federal Register / Vol. 79, No. 195 / Wednesday, October 8, 2014 / Notices 

6See Securities Exchange Act Release No. 34– 

72834 (Aug. 13, 2014), 79 FR 48805 (Aug. 18, 2014) 

(SR–CME–2014–28) and Securities Exchange Act 

Release No. 34–72959 (Sep. 2, 2014), 79 FR 53234 

(Sep. 8, 2014) (SR–CME–2014–28). 

7 15 U.S.C. 78s(b)(2). 

8 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4Specifically, the FINRA Facilities are the ADF 

and TRFs, to which members report OTC 

transactions in NMS stocks, as defined in SEC Rule 

600(b) of Regulation NMS; and the ORF, to which 

members report transactions in ‘‘OTC Equity 

Securities,’’ as defined in FINRA Rule 6420 (i.e., 

non-NMS stocks such as OTC Bulletin Board and 

OTC Market securities), as well as transactions in 

Restricted Equity Securities, as defined in FINRA 

Rule 6420, effected pursuant to Securities Act Rule 

144A. 

5On February 14, 2014, FINRA filed Amendment 

No. 1 to (1) address the comments the Commission 

received in response to the Federal Register 

publication and propose amendments, where 

appropriate; and (2) propose technical amendments 

to update cross-references and make other nonsubstantive changes to the ADF rules as a result of 

the approval of SR–FINRA–2013–053. 

6See Securities Exchange Act Release No. 71623 

(February 27, 2014), 79 FR 12558 (March 5, 2014) 

(Order Granting Accelerated Approval of Proposed 

Rule Change, as Modified by Amendment No. 1; 

File No. SR–FINRA–2013–050). 

7See March 21, 2014 OATS Report, ‘‘Firms 

Capturing Time in Milliseconds Required to Report 

to OATS in Milliseconds Beginning April 7, 2014.’’ 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day from the 

publication of notice of filing of this 

proposed rule change is October 2, 

2014. The Commission is extending this 

45-day time period. 

CME is proposing to amend its 

clearing rules to enable CME to offer 

clearing of certain iTraxx Europe index 

untranched credit default swap (‘‘CDS’’) 

contracts on indices administered by 

Markit (‘‘iTraxx Contracts’’). In addition, 

CME has submitted to the Commission 

a proposed rule change to modify its 

risk model for broad-based index CDS 

products, including adding a selfreferencing risk component, to enable 

CME to offer, among other things, 

clearing of additional CDS instruments 

that entail self-referencing risk, such as 

the iTraxx Contracts.6 The clearing of 

iTraxx Contracts is contingent upon the 

approval of the proposed rule change 

with respect to the risk model, 

including the self-referencing risk 

component designed for clearing iTraxx 

Contracts, which is currently pending 

with the Commission. The Commission 

therefore finds it appropriate to 

designate a longer period within which 

to take action on the proposed rule 

change so that it has sufficient time to 

consider the complex issues under the 

proposed rule change. 

Accordingly, the Commission, 

pursuant to Section 19(b)(2) of the Act,7

designates November 16, 2014, as the 

date by which the Commission should 

either approve or disapprove, or 

institute proceedings to determine 

whether to disapprove, the proposed 

rule change (File No. SR–CME–2014– 

31). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–23983 Filed 10–7–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73289; File No. SR–FINRA– 

2014–039] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Delay the 

Implementation Date of the Trade 

Reporting Amendments Approved 

Pursuant to SR–FINRA–2013–050 

October 2, 2014. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 24, 2014, Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 

filed with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I and II below, which Items 

have been prepared by FINRA. FINRA 

has designated the proposed rule change 

as constituting a ‘‘non-controversial’’ 

rule change under paragraph (f)(6) of 

Rule 19b–4 under the Act,3 which 

renders the proposal effective upon 

receipt of this filing by the Commission. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

FINRA is proposing to delay the 

implementation date of amendments to 

the trade reporting rules relating to the 

OTC Reporting Facility (‘‘ORF’’), the 

Alternative Display Facility (‘‘ADF’’) 

and the Trade Reporting Facilities 

(‘‘TRFs’’) approved pursuant to SR– 

FINRA–2013–050. The proposed rule 

change would not make any changes to 

FINRA rules. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA has prepared 

summaries, set forth in sections A, B, 

and C below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

On November 12, 2013, FINRA filed 

proposed rule change SR–FINRA–2013– 

050 to amend FINRA rules governing 

the reporting of (i) over-the-counter 

(‘‘OTC’’) transactions in equity 

securities to the FINRA Facilities; 4 and 

(ii) orders in NMS stocks and OTC 

Equity Securities to the Order Audit 

Trail System (‘‘OATS’’). The proposed 

rule change, as amended,5 was 

approved by the Commission on 

February 27, 2014.6

In SR–FINRA–2013–050, FINRA 

proposed that the effective date of the 

proposed rule changes to the trade 

reporting rules would be no earlier than 

April 15, 2014, and no later than 

September 30, 2014, and the effective 

date of the proposed rule change to the 

OATS rules would be no later than 45 

days after Commission approval. In 

Amendment No. 1, FINRA clarified that 

it would implement the amendments to 

the trade reporting rules in phases, with 

the amendments becoming operative for 

the ORF first (upon migration of the 

ORF to FINRA’s multi-product platform 

(‘‘MPP’’)) and for the ADF and TRFs at 

a subsequent date. As previously 

announced by FINRA, the amendments 

to the OATS rules became effective on 

April 7, 2014.7 FINRA also announced 

that the amendments to the ORF rules 


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Federal Register / Vol. 79, No. 195 / Wednesday, October 8, 2014 / Notices 60875 

8See Regulatory Notice 14–21 (May 2014). 

9See letter dated August 8, 2014 from Manisha 

Kimmel, FIF, to Steve Joachim and Stephanie 

Dumont, FINRA (‘‘FIF Letter’’). By letter dated 

August 21, 2014, FINRA responded to the FIF 

Letter. See letter dated August 21, 2014 from Steven 

Joachim, FINRA, to Manisha Kimmel, FIF (‘‘FINRA 

Response’’). Copies of the FIF Letter and FINRA 

Response are attached to the proposed rule change 

as Exhibit 2. 

10See ‘‘Revised Migration Date for New OTC 

Reporting Facility Technology Platform,’’ available 

at www.finra.org/Industry/Compliance/

MarketTransparency/ORF/Notices/P580334. 

11See Rules 6282.04, 6380A.04, 6380B.04, 

7130.01, 7230A.01 and 7230B.01. 

12See paragraph (F) of Rules 6282(a)(4), 

6380A(a)(5) and 6380B(a)(5). 

‘‘Stop stock transaction’’ means a transaction 

resulting from an order in which a firm and another 

party agree that the order will be executed at a stop 

stock price or better, which price is based upon the 

prices at which the security is trading at the time 

the firm receives the order. See Rules 6220, 6320A 

and 6320B. 

13See paragraph (G) of Rules 6282(a)(4), 

6380A(a)(5) and 6380B(a)(5). 

14See Rules 6282.03, 6380A.03 and 6380B.03. 

15See Rules 6282(g), 6380A(g) and 6380B(f). 

16See Rules 6282(a)(2), 6380A(a)(2) and 

6380B(a)(2). 

17See Rules 7130(g), 7230A(i) and 7230B(h). 

18See Rules 7140, 7240A and 7240B. 19 15 U.S.C. 78o–3(b)(6). 

would be effective on September 15, 

2014 (the date of migration to the MPP), 

the amendments to the ADF and TRF 

rules relating to millisecond reporting 

would be effective on September 29, 

2014, and the remaining amendments to 

the ADF and TRF rules would be 

effective in the first quarter of 2015.8

By letter dated August 8, 2014, the 

Financial Information Forum (‘‘FIF’’) 

formally requested a delay of migration 

of the ORF to the MPP and 

implementation of the amendments to 

the trade reporting rules approved 

pursuant to SR–FINRA–2013–050 until 

February 23, 2015, stating that firms 

need additional time to complete and 

test the systems changes. Firms have 

indicated that they do not believe they 

could meet a September 2014 

implementation date, in light of the 

development efforts that the 

amendments will entail, as well as other 

development efforts currently 

underway.9

To accommodate this request and to 

provide additional time for firms to 

complete the necessary systems 

changes, FINRA is filing this proposed 

rule change to revise the time frame for 

implementation of the amendments to 

the trade reporting rules approved 

pursuant to SR–FINRA–2013–050. 

In response to the FIF’s request, 

FINRA believes a delay in the migration 

of the ORF to the MPP from September 

15, 2014 to November 17, 2014 is 

appropriate.10 Accordingly, FINRA is 

proposing that the amendments to the 

ORF rules (i.e., Rules 6622 and 7330) 

approved pursuant to SR–FINRA–2013– 

050 be effective on November 17, 2014. 

In addition, FINRA is proposing that 

the amendments to the ADF and TRF 

rules approved pursuant to SR–FINRA– 

2013–050 requiring firms to report time 

in milliseconds if their systems capture 

milliseconds 11 be effective on 

November 10, 2014. 

Finally, FINRA is proposing that the 

remaining amendments to the ADF and 

TRF trade reporting rules, as well as the 

technical and conforming amendments 

to the rules, approved pursuant to SR– 

FINRA–2013–050 be implemented no 

earlier than March 1, 2015 and no later 

than April 30, 2015. Specifically, the 

remaining amendments to the ADF and 

TRF rules (i) require firms to report an 

additional time field for Stop Stock 

transactions 12 and transactions that 

reflect an execution price that is based 

on a prior reference point in time,13 and 

when reporting block transactions using 

the exception for Intermarket Sweep 

Orders (ISOs) (outbound) under SEC 

Rule 611 of Regulation NMS, if the time 

the firm routed the ISOs is different 

from the execution time; 14 (ii) require 

firms to identify the original trade when 

reporting a reversal by including the 

control number and report date for the 

original trade report; 15 (iii) require firms 

to report trades executed on nonbusiness days and trades reported more 

than 365 days after trade date (T+365) 

to the ADF or a TRF (and not on ‘‘Form 

T’’ through FINRA’s Firm Gateway) and 

further to report non-business day 

trades on an ‘‘as/of’’ basis by 8:15 a.m. 

the next business day with the unique 

trade report modifier to denote their 

execution outside normal market 

hours; 16 (iv) provide that where both 

sides are submitting a clearing-only 

report to effectuate a step-out, the 

member transferring out of the position 

must report a step-out and the member 

receiving the position must report a 

‘‘step-in’’; 17 and (v) address the 

processing of trades that are submitted 

for clearing.18 In addition, SR–FINRA– 

2013–050 made a number of nonsubstantive technical and conforming 

changes to the ADF and TRF rules that 

were otherwise being amended. FINRA 

will announce the new effective dates 

for the amendments to the trade 

reporting rules approved under SR– 

FINRA–2013–050 in a Notice. 

FINRA has filed the proposed rule 

change for immediate effectiveness and 

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. The 

operative date will be the date of filing 

of the proposed rule change. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,19 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA believes the 

proposed rule change is consistent with 

the Act in that it provides firms 

additional time to complete the systems 

changes necessary to comply with SR– 

FINRA–2013–050, which amendments 

will, among other things, ensure a more 

accurate and complete audit trail, 

enable FINRA to recreate more 

accurately members’ market activity and 

enhance FINRA’s ability to surveil on an 

automated basis for compliance with 

FINRA trade reporting and other rules. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA 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. FINRA 

believes that providing adequate time 

for firms to make the systems changes 

necessary to comply with SR–FINRA– 

2013–050 will benefit all interested 

parties. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Copies of the FIF Letter and FINRA 

Response, which addresses the issues 

raised in the FIF Letter, are attached to 

this filing. In response to the FIF’s 

request, as discussed above, FINRA has 

delayed migration of the ORF and is 

proposing to delay implementation of 

the trade reporting amendments 

approved under SR–FINRA–2013–050. 

FINRA believes that the revised 

implementation timeline set forth above 

will provide members additional time to 

make the necessary system changes 

while balancing the need to implement 

the amendments without undue delay. 

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 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
60876 Federal Register / Vol. 79, No. 195 / Wednesday, October 8, 2014 / Notices 

20 15 U.S.C. 78s(b)(3)(A). 21 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

22 17 CFR 240.19b–4(f)(6)(iii). 

23 Id. 

24For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

25 15 U.S.C. 78s(b)(3)(C). 

26 Id. 27 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 72119 

(May 7, 2014), 79 FR 27351 (‘‘Notice’’). 

4See Securities Exchange Act Release No. 72447 

(June 23, 2014), 79 FR 36569 (June 27, 2014). 

5See Letter from Michael J. Simon, Secretary and 

General Counsel, International Securities Exchange, 

LLC, dated June 3, 2014 (‘‘ISE Letter I’’); Letter from 

Michael J. Simon, Secretary and General Counsel, 

International Securities Exchange, LLC, dated July 

8, 2014 (‘‘ISE Letter II’’). 

6See Letter from Carla Behnfeldt, Associate 

General Counsel, The NASDAQ OMX Group, Inc., 

dated June 20, 2014 (‘‘Phlx Response Letter’’). 

7 In Amendment No. 1, the Exchange clarifies a 

reference to a previous Phlx filing and an example. 

Amendment No. 1 has been placed in the public 

comment file for SR–Phlx–2014–23 at http:// 

www.sec.gov/comments/sr-phlx-2014-23/ 

phlx201423.shtml (see letter from Carla Behnfeldt, 

Associate General Counsel, The NASDAQ OMX 

Group, Inc., to Secretary, Commission, dated July 

30, 2014) and also is available on the Exchange’s 

Web site at http:// 

nasdaqomxphlx.cchwallstreet.com/ 

NASDAQOMXPHLX/pdf/phlx-filings/2014/SRPhlx-2014-23_Amendment_1.pdf. 

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 20 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.21

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing.22 However, Rule 19b– 

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest.23

FINRA has requested that the 

Commission waive the 30-day operative 

delay so that FINRA can immediately 

delay the implementation dates, as 

provided in this proposal. 

The Commission believes that the 

waiver of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest as it 

will allow FINRA to extend the 

implementation dates of certain changes 

approved pursuant to SR–FINRA–2013– 

050 in a timely manner. Therefore, the 

Commission designates the proposal 

operative upon filing.24

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act.25

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved.26

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 rule-comments@

sec.gov. Please include File Number SR– 

FINRA–2014–039 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–FINRA–2014–039. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of FINRA. 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–FINRA– 

2014–039, and should be submitted on 

or before October 29, 2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–23982 Filed 10–7–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73291; File No. SR–Phlx– 

2014–23] 

Self-Regulatory Organizations; 

NASDAQ OMX PHLX LLC; Order 

Approving Proposed Rule Change, as 

Modified by Amendment No. 1, Related 

to the Priority Afforded to In-Crowd 

Participants Respecting Crossing, 

Facilitation, and Solicited Orders in 

Open Outcry Trading 

October 2, 2014. 

I. Introduction 

On April 23, 2014, NASDAQ OMX 

PHLX LLC (‘‘Exchange’’ or ‘‘Phlx’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to revise the priority afforded to 

in-crowd participants respecting 

crossing, facilitation, and solicited 

orders in open outcry trading 

(‘‘Proposal’’). The proposed rule change 

was published for comment in the 

Federal Register on May 13, 2014.3 On 

June 23, 2014, the Commission 

extended the time period in which to 

either approve the Proposal, disapprove 

the Proposal, or institute proceedings to 

determine whether to approve or 

disapprove the Proposal to August 11, 

2014.4 The Commission received two 

comment letters from one commenter 

regarding the Proposal 5 and one 

response letter from Phlx.6 On July 30, 

2014, the Exchange filed Amendment 

No. 1 to the Proposal (‘‘Amendment No. 

1’’).7 On August 4, 2014, the 

Commission instituted proceedings 


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