40202 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

48 15 U.S.C. 78c(f). 49 15 U.S.C. 78s(b)(2). 

50 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. 80683 

(May 16, 2017), 82 FR 23320 (‘‘Notice’’). 

4See Securities Exchange Act Release No. 81072, 

82 FR 31792 (July 10, 2017). 

5See Letters to Brent J. Fields, Secretary, 

Commission, from: (1) Donald K. Ross, Jr., 

Executive Chairman, PDQ Enterprise, LLC, dated 

June 6, 2017 (‘‘PDQ Letter’’); (2) Edward S. Knight, 

Executive Vice President and General Counsel, 

Nasdaq, Inc., dated June 12, 2017 (‘‘NASDAQ 

Letter’’); (3) Ray Ross, Chief Technology Officer, 

Clearpool Group, dated June 12, 2017 (‘‘Clearpool 

Letter’’); (4) Venu Palaparthi, SVP, Compliance, 

Regulatory and Government Affairs, Virtu 

Financial, dated June 12, 2017 (‘‘Virtu Letter’’); (5) 

Theodore R. Lazo, Managing Director and Associate 

General Counsel, SIFMA, dated June 13, 2017 

(‘‘SIFMA Letter’’); (6) Elizabeth K. King, General 

Counsel and Corporate Secretary, New York Stock 

Exchange, dated June 13, 2017 (‘‘NYSE Letter 1’’); 

No. 1, on efficiency, competition, and 

capital formation.48 The Commission 

does not believe that the proposed rule 

change will impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Commission 

believes the proposed rule change 

would apply equally to all municipal 

fund securities dealers and may reduce 

inefficiencies and confusion for dealers 

by harmonizing MSRB rule 

requirements with comparable SEC 

requirements on advertising. The 

Commission believes that investors 

should benefit from better information 

in the form of more consistent and 

accurate advertising through updated 

requirements for certain municipal fund 

security advertisements, as investors 

generally value ease of comparison of 

different financial products. 

As noted above, the Commission 

received two comment letters on the 

filing. The Commission believes that the 

MSRB, through its responses and 

through Amendment No. 1, has 

addressed commenters’ concerns. 

For the reasons noted above, the 

Commission believes that the proposed 

rule change, as modified by Amendment 

No. 1, is consistent with the Act. 

V. Solicitation of Comments on 

Amendment No. 1 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether Amendment No. 1 to 

the proposed rule change is consistent 

with the Act. Comments may be 

submitted by any of the following 

methods: 

Electronic Comments 

• Use of 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– 

MSRB–2017–04 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE., 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–MSRB–2017–04. 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 MSRB. 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–MSRB– 

2017–04 and should be submitted on or 

before September 14, 2017. 

VI. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 1 

The Commission finds good cause for 

approving the proposed rule change, as 

amended by Amendment No. 1, prior to 

the 30th day after the date of 

publication of notice of Amendment No. 

1 in the Federal Register. As noted by 

the MSRB, Amendment No. 1 does not 

raise any significant issues with respect 

to the proposed rule change and only 

provides a minor technical change that 

clarifies that the proposed rule change 

to Rule G–21(e)(i)(A)(2)(c) would apply 

to an advertisement of a municipal fund 

security ‘‘that has an investment option 

that invests solely in a money market 

fund.’’ 

For the foregoing reasons, the 

Commission finds good cause for 

approving the proposed rule change, as 

modified by Amendment No. 1, on an 

accelerated basis, pursuant to Section 

19(b)(2) of the Act. 

VIII. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,49 that the 

proposed rule change, as modified by 

Amendment No. 1 (SR–MSRB–2017–04) 

be, and hereby is, approved on an 

accelerated basis. 

For the Commission, pursuant to delegated 

authority.50

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17905 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81437; File No. SR– 

BatsBZX–2017–34] 

Self-Regulatory Organizations; Bats 

BZX Exchange, Inc.; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To Introduce Bats Market 

Close, a Closing Match Process for 

Non-BZX Listed Securities Under New 

Exchange Rule 11.28 

August 18, 2017. 

I. Introduction 

On May 5, 2017, Bats BZX Exchange, 

Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed 

with the Securities and Exchange 

Commission (the ‘‘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 adopt Bats 

Market Close, a closing match process 

for non-BZX listed securities. The 

Commission published notice of filing 

of the proposed rule change in the 

Federal Register on May 22, 2017.3 On 

July 3, 2017, the Commission designated 

a longer period within which to approve 

the proposed rule change, disapprove 

the proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved.4 As of August 16, 2017, 

the Commission has received forty-six 

comment letters on the Exchange’s 

proposed rule change, including a 

response from the Exchange.5 This order 


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40203 

(7) John M. Bowers, Bowers Securities, dated June 

14, 2017 (‘‘Bowers Letter’’); (8) Jonathan D. Corpina, 

Senior Managing Partner, Meridian Equity Partners, 

dated June 16, 2017 (‘‘Meridian Letter’’); (9) Fady 

Tanios, Chief Executive Officer, and Brian Fraioli, 

Chief Compliance Officer, Americas Executions, 

LLC, dated June 16, 2017 (‘‘Americas Executions 

Letter’’); (10) Ari M. Rubenstein, Co-Founder and 

Chief Executive Officer, GTS Securities LLC, dated 

June 22, 2017 (‘‘GTS Securities Letter’’); (11) John 

Ramsay, Chief Market Policy Officer, Investors 

Exchange LLC, dated June 23, 2017 (‘‘IEX Letter’’); 

(12) Jay S. Sidhu, Chairman, Chief Executive 

Officer, Customers Bancorp, Inc., dated June 27, 

2017 (‘‘Customers Bancorp Letter’’); (13) Joanne 

Freiberger, Vice President, Treasurer, Masonite 

International Corporation, dated June 27, 2017 

(‘‘Masonite International Letter’’); (14) David B. 

Griffith, Investor Relations Manager, Orion Group 

Holdings, Inc., dated June 27, 2017 (‘‘Orion Group 

Letter’’); (15) Kieran O’Sullivan, Chairman, 

President and CEO, CTS Corporation, dated June 

28, 2017 (‘‘CTS Corporation Letter’’); (16) Sherri 

Brillon, Executive Vice-President and Chief 

Financial Officer, Encana Corporation, dated June 

29, 2017 (‘‘Encana Letter’’); (17) Steven C. Lilly, 

Chief Financial Officer, Triangle Capital 

Corporation, dated June 29, 2017 (‘‘Triangle Capital 

Letter’’); (18) Robert F. McCadden, Executive Vice 

President and Chief Financial Officer, Pennsylvania 

Real Estate Investment Trust, dated June 29, 2017 

(‘‘Pennsylvania REIT Letter’’); (19) Andrew Stevens, 

General Counsel, IMC Financial Markets, dated 

June 30, 2017 (‘‘IMC Letter’’); (20) Daniel S. Tucker, 

Senior Vice President and Treasurer, Southern 

Company, dated July 5, 2017 (‘‘Southern Company 

Letter’’); (21) Cole Stevens, Investor Relations 

Associate, Nobilis Health, dated July 6, 2017 

(‘‘Nobilis Health Letter’’); (22) Mehmet Kinak, Head 

of Global Equity Market Structure & Electronic 

Trading, et al., T. Rowe Price Associates, Inc., dated 

July 7, 2017 (‘‘T. Rowe Price Letter’’); (23) David L. 

Dragics, Senior Vice President, Investor Relations, 

CACI International Inc., dated July 7, 2017 (‘‘CACI 

Letter’’); (24) Mark A. Stegeman, Senior Vice 

President & CFO, Turning Point Brands, Inc., dated 

July 12, 2017 (‘‘Turning Point Letter’’); (25) Jon R. 

Moeller, Vice Chair and Chief Financial Officer, and 

Deborah J. Majoras, Chief Legal Officer and 

Secretary, The Proctor & Gamble Company, dated 

July 12, 2017 (‘‘P&G Letter’’); (26) Christopher A. 

Iacovella, Chief Executive Officer, Equity Dealers of 

America, dated July 12, 2017 (‘‘EDA Letter’’); (27) 

Rob Bernshteyn, Chief Executive Officer, Chairman 

Board of Directors, Coupa Software, Inc., dated July 

12, 2017 (‘‘Coupa Software Letter’’); (28) Sally J. 

Curley, Senior Vice President, Investor Relations, 

Cardinal Health, Inc., dated July 14, 2017 

(‘‘Cardinal Health Letter’’); (29) Mickey Foster, Vice 

President, Investor Relations, FedEx Corporation, 

dated July 14, 2017 (‘‘FedEx Letter’’); (30) 

Alexander J. Matturri, CEO, S&P Dow Jones Indices, 

dated July 18, 2017 (‘‘SPDJI Letter’’); (31) John L. 

Killea, Chief Legal Officer, Stewart Information 

Services, dated July 19, 2017 (‘‘Stewart Letter’’); 

(32) M. Farooq Kathwari, Chairman, President & 

CEO, Ethan Allen Interiors, Inc., dated July 24, 2017 

(‘‘Ethan Allen Letter’’); (33) Jeff Green, Founder, 

Chief Executive Officer and Chairman of the Board 

of Directors, The Trade Desk Inc., dated July 26, 

2017 (‘‘Trade Desk Letter’’); (34) James J. Angel, 

Associate Professor, McDonough School of 

Business, Georgetown University, dated July 30, 

2017 (‘‘Angel Letter’’); (35) Jon Stonehouse, CEO, 

and Tom Staab, CFO, BioCryst Pharmaceuticals, 

Inc., dated July 31, 2017 (‘‘BioCryst Letter’’); (36) 

Peter Campbell, Chief Financial Officer, Mimecast, 

dated July 31, 2017 (‘‘Mimecast Letter’’); (37) Joanne 

Moffic-Silver, Executive Vice President, General 

Counsel, and Corporate Secretary, Bats Global 

Markets, Inc., dated August 2, 2017 (‘‘BZX Letter’’); 

(38) David M. Weisberger, Head of Equities, 

ViableMkts, dated August 3, 2017 (‘‘ViableMkts 

Letter’’); (39) Charles Beck, Chief Financial Officer, 

Digimarc Corporation, dated August 3, 2017 

(‘‘Digimarc Letter’’); (40) Elizabeth K. King, General 

Counsel and Corporate Secretary, New York Stock 

Exchange, dated August 9, 2017 (‘‘NYSE Letter 2’’); 

(41) Representative Sean P. Duffy and 

Representative Gregory W. Meeks, dated August 9, 

2017 (‘‘Duffy/Meeks Letter’’); (42) Michael J. 

Chewens, Senior Executive Vice President & Chief 

Financial Officer, NBT Bancorp Inc., dated August 

11, 2017 (‘‘NBT Bancorp Letter’’); (43) Barry 

Zwarenstein, Chief Financial Officer, Five9, Inc., 

dated August 11, 2017 (‘‘Five9 Letter’’); (44) 

William A. Backus, Chief Financial Officer & 

Treasurer, Balchem Corporation, dated August 15, 

2017 (‘‘Balchem Letter’’); (45) Raiford Garrabrant, 

Director, Investor Relations, Cree, Inc., dated 

August 15, 2017 (‘‘Cree Letter’’); and (46) Steven 

Paladino, Executive Vice President & Chief 

Financial Officer, Henry Schein, Inc., dated August 

16, 2017 (‘‘Henry Schein Letter’’). All comments on 

the proposed rule change are available at: https:// 

www.sec.gov/comments/sr-batsbzx-2017-34/ 

batsbzx201734.htm. 

6 15 U.S.C. 78s(b)(2)(B). 

7The term ‘‘System’’ is defined as ‘‘the electronic 

communications and trading facility designated by 

the Board through which securities orders of Users 

are consolidated for ranking, execution and, when 

applicable, routing away.’’ See Exchange Rule 

1.5(aa). 

8The term ‘‘Market-On-Close’’ or ‘‘MOC’’ means 

a BZX market order that is designated for execution 

only in the Closing Auction. See Exchange Rule 

11.23(a)(15). The Exchange proposed to amend the 

description of Market-On-Close orders to include 

orders designated to execute in the proposed Bats 

Market Close. 

9The term ‘‘Member’’ is defined as ‘‘any 

registered broker or dealer that has been admitted 

to membership in the Exchange.’’ See Exchange 

Rule 1.5(n). 

10Currently, the NYSE designates the cut-off time 

for the entry of Market At-the-Close Orders as 3:45 

p.m. Eastern Time. See NYSE Rule 123C. Nasdaq, 

in turn, designates the ‘‘end of the order entry 

period’’ as 3:50 p.m. Eastern Time. See Nasdaq Rule 

4754. 

11As set forth in proposed Interpretation and 

Policy .02, the Exchange would cancel all MOC 

orders designated to participate in Bats Market 

Close in the event the Exchange becomes impaired 

prior to the MOC Cut-Off Time and is unable to 

recover within 5 minutes from the MOC Cut-Off 

Time. The Exchange states that this would provide 

Members time to route their orders to the primary 

listing market’s closing auction. Should the 

Exchange become impaired after the MOC Cut-Off 

Time, proposed Interpretation and Policy .02 states 

that it would retain all matched MOC orders and 

execute those orders at the official closing price 

once it is operational. 

12The Bats Auction Feed disseminates 

information regarding the current status of price 

and size information related to auctions conducted 

by the Exchange and is provided at no charge. See 

Exchange Rule 11.22(i). The Exchange also 

proposed to amend Exchange Rule 11.22(i) to reflect 

that the Bats Auction Feed would also include the 

total size of all buy and sell orders matched via Bats 

Market Close. 

13The Exchange would report the execution of all 

previously matched buy and sell orders to 

applicable securities information processor and will 

designate such trades as ‘‘.P’’, Prior Reference Price. 

See Notice, supra note 3, at 23321. 

14See proposed Interpretation and Policy .01. 

institutes proceedings under Section 

19(b)(2)(B) of the Exchange Act 6 to 

determine whether to approve or 

disapprove the proposed rule change. 

II. Summary of the Proposed Rule 

Change 

As described in more detail in the 

Notice, the Exchange proposes to 

introduce Bats Market Close, a closing 

match process for non-BZX listed 

securities. For non-BZX listed securities 

only, the Exchange’s System 7 would 

seek to match buy and sell Market-OnClose (‘‘MOC’’) 8 orders designated for 

participation in Bats Market Close at the 

official closing price for such security 

published by the primary listing market. 

Members 9 would be able to enter, 

cancel or replace MOC orders 

designated for participation in Bats 

Market Close beginning at 6:00 a.m. 

Eastern Time up until 3:35 p.m. Eastern 

Time (‘‘MOC Cut-Off Time’’).10

Members would not be able to enter, 

cancel or replace MOC orders 

designated for participation in the 

proposed Bats Market Close after the 

MOC Cut-Off Time. 

At the MOC Cut-Off Time, the System 

would match for execution all buy and 

sell MOC orders entered into the System 

based on time priority.11 Any remaining 

balance of unmatched shares would be 

cancelled back to the Member(s). The 

System would disseminate, via the Bats 

Auction Feed,12 the total size of all buy 

and sell orders matched per security via 

Bats Market Close. All matched buy and 

sell MOC orders would remain on the 

System until the publication of the 

official closing price by the primary 

listing market. Upon publication of the 

official closing price by the primary 

listing market, the System would 

execute all previously matched buy and 

sell MOC orders at that official closing 

price.13

The Exchange would utilize the 

official closing price published by the 

exchange designated by the primary 

listing market in the case where the 

primary listing market suffers an 

impairment and is unable to perform its 

closing auction process.14 In addition, 

proposed Interpretation and Policy .03, 

specifies that up until the closing of the 

applicable securities information 

processor at 8:00 p.m. Eastern Time, the 

Exchange intends to monitor the initial 

publication of the official closing price, 

and any subsequent changes to the 

published official closing price, and 

adjust the price of such trades 

accordingly. If there is no initial official 

closing price published by 8:00 p.m. 

Eastern Time for any security, the 

Exchange would cancel all matched 

MOC orders in such security. 

The Exchange states that it is 

proposing to adopt Bats Market Close in 

response to requests from market 

participants, particularly buy-side firms, 


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40204 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

15See Notice, supra note 3, at 23321. The 

Exchange represented that should the Commission 

approve the proposed rule change, it would file a 

separate proposal to offer executions of MOC orders 

at the official closing price, to the extent matched 

on the Exchange, at a rate less than the fee charged 

by the applicable primary listing market. The 

Exchange also represented that it intends for such 

fee to remain lower than the fee charged by the 

applicable primary listing market. See id. 

16See id. 

17See supra note 5. 

18See PDQ Letter, supra note 5; Clearpool Letter, 

supra note 5; Virtu Letter, supra note 5; SIFMA 

Letter, supra note 5; IEX Letter, supra note 5; and 

ViableMkts Letter, supra note 5. 

19See NASDAQ Letter, supra note 5; NYSE Letter 

1, supra note 5; Bowers Letter, supra note 5; 

Meridian Letter, supra note 5; Americas Executions 

Letter, supra note 5; GTS Securities Letter, supra 

note 5; Customers Bancorp Letter, supra note 5; 

Masonite International Letter, supra note 5; Orion 

Group Letter, supra note 5; CTS Corporation Letter, 

supra note 5; Encana Letter, supra note 5; Triangle 

Capital Letter, supra note 5; Pennsylvania REIT 

Letter, supra note 5; IMC Letter, supra note 5; 

Southern Company Letter, supra note 5; Nobilis 

Health Letter, supra note 5; T. Rowe Price Letter, 

supra note 5; CACI Letter, supra note 5; Turning 

Point Letter, supra note 5; P&G Letter, supra note 

5; EDA Letter, supra note 5; Coupa Software Letter, 

supra note 5; Cardinal Health Letter, supra note 5; 

FedEx Letter, supra note 5; SPDJI Letter, supra note 

5; Stewart Letter, supra note 5; Ethan Allen Letter, 

supra note 5; Trade Desk Letter, supra note 5; 

BioCryst Letter, supra note 5; Mimecast Letter, 

supra note 5; Digimarc Letter, supra note 5; NYSE 

Letter 2, supra note 5; NBT Bancorp Letter, supra 

note 5; Five9 Letter, supra note 5; Balchem Letter, 

supra note 5; Cree Letter, supra note 5; and Henry 

Schein Letter, supra note 5. In addition, one 

commenter urged the Commission to conduct a 

close analysis of the proposal and stated that if the 

Bats proposal would seriously degrade the quality 

of the closing price, then it should be rejected. See 

Angel Letter, supra note 5. Other commenters 

expressed concern that the proposal could disrupt 

the closing auction process on the primary listing 

markets and asked the Commission to carefully 

consider the impacts of the proposal and whether 

such impacts would be necessary and helpful to 

public companies. See Duffy/Meeks Letter, supra 

note 5, at 1–2. 

20See PDQ Letter, supra note 5; Clearpool Letter, 

supra note 5, at 2; Virtu Letter, supra note 5, at 2; 

SIFMA Letter, supra note 5, at 2; IEX Letter, supra 

note 5, at 1; and ViableMkts Letter, supra note 5, 

at 1–2. 

21See PDQ Letter, supra note 5; Clearpool Letter, 

supra note 5, at 2; Virtu Letter, supra note 5, at 2; 

SIFMA Letter, supra note 5, at 2; IEX Letter, supra 

note 5, at 1; and ViableMkts Letter, supra note 5, 

at 1. 

22See IEX Letter, supra note 5, at 3; Clearpool 

Letter, supra note 5, at 2; and ViableMkts Letter, 

supra note 5, at 1–2. However, one commenter also 

stated that it believes the fees charged by NYSE and 

NASDAQ for participating in their closing auctions 

are not excessive and there is no need for additional 

fee competition for executing orders at the official 

closing price. See GTS Letter, supra note 5, at 5. 

23See IEX Letter, supra note 5, at 3. 

24See ViableMkts Letter, supra note 5, at 5. 

25See id. ViableMkts also argued that the effect 

of this competition will most likely be increased 

volumes at the closing price because of lower 

marginal costs and the potential to attract new types 

of investors to transact at the closing price. See id. 

26See NYSE Letter 1, supra note 5, at 9–10; 

NASDAQ Letter, supra note 5, at 6 & 9; BioCryst 

Letter, supra note 5, at 2; Digimarc Letter, supra 

note 5, at 1–2; NBT Bancorp Letter, supra note 5, 

at 2; Balchem Letter, supra note 5, at 2; and Cree 

Letter, supra note 5, at 2. See also Angel Letter, 

supra note 5, at 3 (calling for a rationalization of 

intellectual property protection in order to foster 

productive innovation). 

27See NYSE Letter 1, supra note 5, at 9 and NYSE 

Letter 2, supra note 5, at 1–3 (adding that the 

proposal is anti-competitive because it is proposing 

to sell at a lower price the closing prices produced 

through resources expended by NYSE). 

28See NYSE Letter 1, supra note 5, at 9. NYSE 

also argued that the proposal impacts competition 

for listings, as issuers choose where to list their 

securities based on how primary listing exchanges 

are able to centralize liquidity and perform closing 

auctions. See infra note 116 and accompanying text. 

29See NYSE Letter 2, supra note 5, at 2. 

Moreover, NYSE stated that it dedicates resources 

to providing systems to designated market makers 

(‘‘DMMs’’) necessary to facilitate the closing of 

trading as well as to floor brokers to enter and 

manage their customers’ closing interest. See id. 

30See NYSE Letter 1, supra note 5, at 6 and NYSE 

Letter 2, supra note 5, at 3–4. 

31See NASDAQ Letter, supra note 5, at 9. 

32See NASDAQ Letter, supra note 5, at 10. See 

also infra notes 45–81 and accompanying text 

(discussing comments on the proposal’s impact on 

price discovery). 

33See id., at 13. 

for an alternative to the primary listing 

markets’ closing auctions that still 

provides an execution at a security’s 

official closing price.15 Moreover, the 

Exchange contends that the proposal 

would not compromise the price 

discovery function performed by the 

primary listing markets’ closing 

auctions because Bats Market Close 

would only accept MOC orders, and not 

limit orders, and the Exchange would 

only execute those matched MOC orders 

that naturally pair off and effectively 

cancel each other out.16

III. Summary of the Comments 

As of August 16, 2017, the 

Commission has received forty-six 

comment letters on the proposal, 

including a response from the 

Exchange.17 Six commenters supported 

the proposal,18 and thirty-six 

commenters opposed the proposal.19

Six commenters supported the 

proposal and stated that it would 

increase competition among exchanges 

for executions of orders at the close.20

These commenters asserted that 

increased competition could result in 

reduced fees for market participants.21

Three commenters characterized the 

primary listing markets as maintaining a 

‘‘monopoly’’ on orders seeking a closing 

price with no market competition, 

which they argued has, and would 

continue to, result in a continual 

increase in fees for such orders if the 

proposal were not approved.22 In 

addition, IEX argued that the proposal 

does not unduly burden competition as 

exchanges often attempt to compete by 

adopting functionality or fee schedules 

developed by competitors.23 ViableMkts 

also asserted that the proposal is not 

fully competitive with closing auctions, 

as it does not accept priced orders or 

disseminate imbalance information.24

Rather, the proposal competes with 

other un-priced orders in closing 

auctions, which in its view, is not 

destructive to the mission of the closing 

auction.25

In contrast, other commenters argued 

that the proposal would impede fair 

competition, including by ‘‘free-riding’’ 

on the investments the primary listing 

markets have made in their closing 

auctions.26 Specifically, NYSE asserted 

that the proposal is an unnecessary and 

inappropriate burden on competition as 

it would allow BZX to use the closing 

prices established through the auction 

of a primary listing market, without 

bearing any of the costs or risks 

associated with conducting a closing 

auction.27 NYSE added that the existing 

exchange fees for closing auctions 

reflect the value created by the primary 

listing exchange’s complex procedures 

and technology to determine the official 

closing price of a security.28 NYSE 

emphasized that it has invested 

significantly in intellectual property and 

software to implement systems that 

facilitate orderly price discovery in the 

closing auction, as well as surveillance 

tools necessary to monitor activity 

leading up to, and in, the closing 

process.29 NYSE also noted that the 

proposal differs from the NASDAQ and 

NYSE Arca competing auctions in 

securities not listed on their exchanges 

in that such auctions compete on a level 

playing field because they do not rely 

on prices established by the primary 

listing exchange and they serve as an 

alternative method of establishing an 

official closing price if a primary listing 

exchange is unable to conduct a closing 

auction due to a technology issue.30

NASDAQ also argued that the 

proposal would burden competition. 

Specifically, NASDAQ believed that the 

proposal undermines intra-market 

competition, by removing orders from 

NASDAQ’s auction book and 

prohibiting those orders from competing 

on NASDAQ, which NASDAQ argued is 

necessary for the exchange to arrive at 

the most accurate closing price.31

NASDAQ also stated that, by diverting 

orders away from NYSE and NASDAQ, 

the proposal would detract from robust 

price competition and discovery that 

closing auctions ensure.32 NASDAQ 

further argued that in order for BZX to 

meaningfully enhance competition, it 

would have to generate its own closing 

price, as opposed to merely utilizing the 

closing price generated by a primary 

listing market.33


rmajette on DSKBCKNHB2PROD with NOTICES
Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 40205 

34See NYSE Letter 1, supra note 5, at 8. 

35See id. 

36See NASDAQ Letter, supra note 5, at 5. 

37See BZX Letter, supra note 5, at 10–11. 

38See id., at 10. BZX further argued that 

NASDAQ’s assertion that the proposal would 

undermine competition amongst orders is 

misplaced because BZX believes that paired MOC 

orders, which are beneficiaries of price discovery 

and not price-setting orders do not impact 

interactions that take place on another exchange. 

See id., at 11. 

39See BZX Letter, supra note 5, at 6. In addition, 

in response to NASDAQ’s contention that it is 

aware of no regulator in any jurisdiction that has 

sanctioned a diversion of orders from the primary 

market close, BZX noted the Ontario Securities 

Commission’s approval of a similar proposal by 

Chi-X Canada ATS, which it said is currently 

owned by NASDAQ, to match MOC orders at the 

closing price established by the Toronto Stock 

Exchange. See NASDAQ Letter, supra note 5, at 10; 

BZX Letter, supra note 5, at 7 (stating that the 

Ontario Securities Commission stated that the 

proposal would not threaten the integrity of the 

price formation process and would pressure the 

Toronto Stock Exchange to competitively price 

executions during their closing auction). 

40See id. at 6 (describing NYSE’s after hours 

crossing sessions which executes orders at the 

NYSE official closing price and the ISE Stock 

Exchange functionality that only executed orders at 

the midpoint of the NBBO and did not display 

orders). 41See BZX Letter, supra note 5, at 10. 42See id., at 11 (asserting that the disapproval of 

that proposal was primarily because it raised issues 

under the Market Access Rule). 43See BZX Letter, supra note 5, at 5. 44See id. 45See PDQ Letter, supra note 5; Clearpool Letter, 

supra note 5, at 3; Virtu Letter, supra note 5, at 2; 

SIFMA Letter, supra note 5, at 2; IEX Letter, supra 

note 5, at 1–2; Angel Letter, supra note 5, at 4; and 

ViableMkts Letter, supra note 5, at 3–4. 

46See Clearpool, supra note 5, at 3; IEX Letter, 

supra note 5, at 2; and Angel Letter, supra note 5, 

at 4. 

47See Clearpool Letter, supra note 5, at 3; SIFMA 

Letter, supra note 5, at 2; IEX Letter, supra note 5, 

at 2; Angel Letter, supra note 5, at 4; and 

ViableMkts Letter, supra note 5, at 3. 

48See Clearpool, supra note 5, at 3; and 

ViableMkts Letter, supra note 5, at 4–5. One 

commenter further argued that to the extent BZX 

accrues market share as a result of the proposal it 

will likely result from less MOC pairing executed 

off-exchange. See Angel Letter, supra note 5, at 4. 

49See NASDAQ Letter, supra note 5; NYSE Letter 

1, supra note 5; Bowers Letter, supra note 5; 

Meridian Letter, supra note 5; Americas Executions 

Letter, supra note 5; GTS Securities Letter, supra 

note 5; Customers Bancorp Letter, supra note 5; 

Masonite International Letter, supra note 5; Orion 

Group Letter, supra note 5; CTS Corporation Letter, 

supra note 5; Encana Letter, supra note 5; Triangle 

Capital Letter, supra note 5; Pennsylvania REIT 

Letter, supra note 5; IMC Letter, supra note 5; 

Southern Company Letter, supra note 5; Nobilis 

Health Letter, supra note 5; T. Rowe Price Letter, 

supra note 5; CACI Letter, supra note 5; Turning 

Point Letter, supra note 5; P&G Letter, supra note 

5; EDA Letter, supra note 5; Coupa Software Letter, 

supra note 5; Cardinal Health Letter, supra note 5; 

FedEx Letter, supra note 5; Trade Desk Letter, supra 

note 5; BioCryst Letter, supra note 5; Mimecast 

Letter, supra note 5; Digimarc Letter, supra note 5; 

NBT Bancorp Letter, supra note 5; Balchem Letter, 

supra note 5; Cree Letter, supra note 5; and Henry 

Schein Letter, supra note 5. See also Duffy/Meeks 

Letter, supra note 5, at 1 (noting that public 

companies are expressing concern that the proposal 

will further fragment the market and cause harm to 

the pricing of their companies’ shares at the close, 

and as such, they are concerned the proposal may 

disrupt the process for determining the closing 

price on the primary listing market, which is 

viewed as ‘‘an incredibly well-functioning part of 

the capital markets’’). 

50See NASDAQ Letter, supra note 5, at 8 (noting 

that, for this reason NASDAQ did not believe the 

proposal promotes fair and orderly markets in 

accordance with Sections 6 and 11A of the 

Exchange Act). 

In addition, both NYSE and NASDAQ 

referenced the Commission’s 

disapproval of NASDAQ’s proposal to 

create a Benchmark Order as support 

that BZX has not sufficiently satisfied 

its obligation to justify that the proposal 

is consistent with the Act and not an 

inappropriate burden on competition. 

NYSE argued that BZX essentially 

proposes to compete with broker-dealer 

agency order matching services.34 NYSE 

asserted that the Commission 

disapproved NASDAQ’s Benchmark 

Order, in part because it would provide 

an exchange with an unfair advantage 

over competing broker-dealers, which 

was not consistent with Section 6(b)(8) 

of the Act.35 NASDAQ further argued 

that the disapproval of its Benchmark 

Order proposal supports the assertion 

that an exchange must articulate how a 

proposed service is consistent with the 

policy goals of the Act with respect to 

national securities exchanges.36

In response to commenters’ 

contentions that the proposal would 

burden competition, BZX asserted that 

the proposal would enhance rather than 

burden competition.37 In this regard, 

BZX argued that its proposal would 

promote competition in the use of MOC 

orders at the official closing price.38

Further, it asserted that the Commission 

has approved the operation of 

competing closing auctions, noting in 

particular the closing auctions on 

NASDAQ, NYSE Arca, and the 

American Stock Exchange.39 BZX 

further argued that there is precedent for 

an exchange to execute orders solely at 

reference prices while not also 

displaying priced orders for that 

security.40

BZX also argued that, rather than 

looking to compete with broker-dealer 

services, it is seeking to compete on 

price with the primary listing markets’ 

closing auctions.41 In addition, BZX 

argued that, contrary to the assertions by 

NYSE and NASDAQ, its proposal does 

not implicate the same issues as 

NASDAQ’s Benchmark Order 

proposal.42

BZX also challenged the assertion that 

it was ‘‘free-riding’’ on the primary 

listing exchanges’ closing auctions.43 In 

this regard, BZX argued that instead it 

was, on balance, providing a ‘‘a 

materially better value to the 

marketplace’’ in two ways: By not 

diverting price-forming limit orders 

away from the primary listing market; 

and by providing users with the official 

closing price because any other price 

would be undesirable to market 

participants and potentially harmful to 

price formation.44

The majority of commenters 

addressed the potential impacts of the 

proposal on price discovery in the 

closing auctions on the primary listing 

markets. Seven commenters stated that 

the proposal would not negatively 

impact price discovery in the primary 

listing markets’ closing auctions.45

These commenters asserted that because 

Bats Market Close would only execute 

paired MOC orders, and not limit-onclose orders, it would not impede the 

price discovery mechanisms of the 

primary listing markets’ closing 

auctions. Three commenters referenced 

the current NASDAQ and NYSE Arca 

closing auction processes for securities 

listed on other exchanges, stating that 

these competing closing auction 

processes, which have been permitted 

by the Commission, may attract limit 

orders from the primary listing market 

and impede price discovery, unlike the 

BZX proposal which is limited to 

market orders.46 In addition, five 

commenters argued that, because BZX 

will publish the size of matched MOC 

orders in advance of the primary 

market’s cut-off time, market 

participants would have available 

information needed to make further 

decisions regarding order execution and 

thus price discovery would not be 

impaired.47 Two commenters also 

asserted that many brokers already 

provide market-on-close pricing to 

customers through products that match 

orders internally, and the proposal may 

provide incentives for these brokers to 

send such orders to an exchange, 

thereby increasing transparency, 

reliability and price discovery at the 

close.48

Thirty-two commenters stated that the 

proposal would further fragment the 

markets and harm price discovery in the 

closing auctions on the primary listing 

markets.49 For example, NASDAQ 

argued that BZX’s MOC orders would be 

incapable of contributing to price 

discovery, and instead would further 

fragment the market by drawing orders 

and quotations away from primary 

closing auctions and undermine the 

mechanisms used to set closing prices.50

Specifically, NASDAQ expressed 

concern that the availability of Bats 

Market Close could cause a reduction in 

the number of limit-on-close orders 


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51See NASDAQ Letter, supra note 5, at 5 and 11. 

NASDAQ asserted that the impact of the proposal 

on the use of limit-on-close orders that may be 

submitted to NYSE and NASDAQ should be studied 

and carefully analyzed. 

52See NASDAQ Letter, supra note 5, at 12. 

NASDAQ also stated that a credible independent 

study of the potential risk to price discovery is 

essential in order to consider whether the proposal 

is consistent with the Act. See id. 

53See id., at 11. 

54See id. NASDAQ also notes that while BZX 

does not have a responsibility to contribute to price 

discovery in NASDAQ’s closing auction, it also is 

obligated to avoid affirmatively undermining price 

discovery. See id., at 5. 

55See id., at 4. 

56See NYSE Letter 1, supra note 5, at 3. 

57See NYSE Letter 1, supra note 5, at 4. 

58See NYSE Letter 1, supra note 5, at 4. In 

response to this assertion, ViableMkts argues that 

use of Bats Market Close is voluntary. Accordingly, 

if a market participant wanted a DMM to be aware 

of their closing activity they could still send their 

orders to the NYSE closing auction. See ViableMkts 

Letter, supra note 5, at 4. 

59See NYSE Letter 1, supra note 5, at 4. 

60See NYSE Letter 1, supra note 5, at 5. NYSE 

represented that once NYSE American transitions to 

Pillar technology, it will conduct a closing auction 

in an identical manner to NYSE Arca. 

61See id. 

62See GTS Securities Letter, supra note 5, at 2– 

3. 

63See Bowers Letter, supra note 5; Americas 

Executions Letter, supra note 5; and FedEx Letter, 

supra note 5. See also Coupa Software Letter, supra 

note 5; Trade Desk Letter, supra note 5; and 

Mimecast Letter, supra note 5 (arguing that 

gathering liquidity in a single venue ensures that 

the market reaches an accurate and reliable closing 

price for their stocks). 

64See NYSE Letter 1, supra note 5, at 3 (arguing 

that the proposal is indifferent to the potential risks 

to public companies and that the closing is the most 

important data point for shareholders); IMC 

Financial Letter, supra note 5, at 1–2; Nobilis 

Health Letter, supra note 5; EDA Letter, supra note 

5, at 1–2; Coupa Software Letter, supra note 5; 

Ethan Allen Letter, supra note 5; Trade Desk Letter, 

supra note 5; BioCryst Letter, supra note 5; 

Digimarc Letter, supra note 5; Duffy/Meeks Letter, 

supra note 5, at 1–2 (stating that public companies 

are concerned the proposal will have an unforeseen 

effect on the pricing of their companies’ shares at 

the close, ultimately harming a critical measure of 

the company’s value and harming its shareholders); 

NBT Bancorp Letter, supra note 5; Five9 Letter, 

supra note 5; Balchem Letter, supra note 5; Cree 

Letter, supra note 5; and Henry Schein Letter, supra 

note 5. Several issuers also asserted that 

decentralizing closing auctions will increase 

volatility, reduce visibility, and negatively impact 

liquidity for equity securities. See e.g., Customers 

Bancorp Letter, supra note 5; Orion Group Letter, 

supra note 5; Nobilis Health Letter, supra note 5; 

Cardinal Health Letter, supra note 5; and Stewart 

Letter, supra note 5. 

65See SPDJI Letter, supra note 5, at 3 (stating that 

it relies solely on primary market auction prices to 

calculate the official closing index values, and that 

these closing index values play an important role 

in the markets, including use by portfolio managers 

to measure their funds’ value and for use in 

calculating settlement prices for certain products); 

see also Coupa Software Letter, supra note 5; Trade 

Desk Letter, supra note 5; and Henry Schein Letter, 

supra note 5 (stating that the official closing price 

is used to value their stocks for purposes of various 

indexes and mutual funds). 

66See SPDJI Letter, supra note 5, at 2. In contrast, 

one commenter acknowledged that while impacting 

the quality of the closing price is an objection that 

deserves close analysis, as the closing price is ‘‘the 

most important price of the day,’’ and would 

warrant rejection of the proposal, the commenter 

does not believe the proposal would harm the 

quality of the closing price. See Angel Letter, supra 

note 5, at 4. 

submitted to the primary listing 

markets’ closing auctions, which 

NASDAQ asserted would harm price 

discovery at the market close.51

Moreover, NASDAQ argued that even if 

the proposal only resulted in fewer 

market-on-close orders submitted to 

NASDAQ closing auctions, investors 

would be harmed because the official 

closing price could potentially represent 

a stale or undermined price.52 NASDAQ 

asserted that its closing cross is 

designed to maximize the number of 

shares that can be executed at a single 

price and that the number of market-onclose orders impacts the number of 

shares able to execute in a closing 

cross.53 Accordingly, NASDAQ argued 

that any attempt to divert trading 

interest, including market-on-close 

orders, from its closing auction would 

be detrimental to investors as it would 

inhibit NASDAQ’s closing auction from 

functioning as intended and would 

negatively affect the quality of the 

official closing price.54 In addition, 

NASDAQ stated that it considered, but 

chose not to, disclose segmented 

information, such as matched MOC or 

LOC shares, for its closing auction in a 

piece-meal fashion, because NASDAQ 

believed it would lead to unintended 

consequences and undermine price 

discovery in the closing auction.55

NYSE similarly argued that even 

though Bats Market Close would only 

accept MOC orders, it could materially 

impact official closing prices 

determined through a NYSE closing 

auction.56 First, NYSE emphasized the 

importance of the centralization of 

orders during the closing auction on the 

primary listing exchange, noting that it 

allows for investors to find contra-side 

liquidity and assess whether to offset 

imbalances, and for orders to be priced 

based on the true supply and demand in 

the market.57 NYSE explained that its 

designated market makers (‘‘DMMs’’), 

which have an obligation to facilitate 

the close of trading in their assigned 

securities, factor in the size of paired-off 

volume, and the composition of the 

closing interest, in assessing the 

appropriate closing price.58 NYSE 

asserted that under the proposal, DMMs 

would lose full visibility into the size 

and composition of MOC interest, and 

thus would likely have to make more 

risk-adverse closing decisions, resulting 

in inferior price formation.59

Second, NYSE argued that the 

proposal would also detrimentally 

impact price discovery on the NYSE 

Arca and NYSE American automated 

closing auctions. NYSE stated that in 

the last six months there were 130 

instances where the official closing 

price determined through a NYSE Arca 

closing auction was based entirely on 

paired-off market order volume.60 In 

those instances, pursuant to NYSE Arca 

rules, the official closing price is the 

midpoint of the auction NBBO as of the 

time the auction is conducted. NYSE 

stated that if all market orders for a 

NYSE Arca listed security were sent to 

BZX, the official closing price would 

instead be the consolidated last sale 

price, which can differ from the 

midpoint of the auction NBBO by as 

much as 3.2%.61

Several other commenters similarly 

explained how the proposal may impact 

the integrity of official closing prices. In 

particular, GTS, a DMM on NYSE, 

argued that market-on-close orders are a 

vital component of closing prices and, 

should those orders be diverted away 

from the primary listing markets as a 

result of the proposal, it could 

undermine the official closing prices.62

Multiple commenters stated that one of 

the benefits of a centralized closing 

auction conducted by the primary 

listing market is that it allows market 

participants to fairly assess supply and 

demand such that the closing prices 

reflect both market sentiment and total 

market participation.63 Because the 

proposal may cause orders to be 

diverted away from the primary listing 

exchanges, these commenters argued 

that it would negatively affect the 

reliability and value of closing auction 

prices. 

Some commenters further argued that 

because the proposal undermines the 

reliability of the closing process and/or 

the official closing price it also poses a 

risk to listed companies and its 

shareholders.64 In addition, one 

commenter, SPDJI, argued that the 

proposal may also impact confidence in 

the pricing of benchmark indices as 

confidence in closing prices is a 

prerequisite for market participants to 

maintain confidence in the pricing of 

benchmark indices.65 Accordingly, 

SPDJI asserted that because the closing 

price is a critical data point for 

investors, great caution should be taken 

in any changes to the closing auction.66

Moreover, some commenters argued 

that the centralization of liquidity at the 

open and close of trading, and how 

primary listing markets perform during 

the opening and closing, are important 

factors for issuers in determining where 

to list their securities, and the 

additional risk posed to listed 


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67See NYSE Letter 1, supra note 5, at 3 and 9 

(noting that no single data point is more important 

than the closing price to the company or its 

shareholders); GTS Securities Letter, supra note 5, 

at 3–5; EDA Letter, supra note 5, at 1; Duffy/Meeks 

Letter, supra note 5, at 1 (stating that the closing 

price is a critical measure of a company’s value and 

that public companies view the closing auction on 

the listing exchange as a critical aspect of listing). 

See also infra note 116 and accompanying text. 

68See BZX Letter, supra note 5, at 3–4. 

69See id., at 4 and 12. BZX further asserted that 

it believed modern software can easily and simply 

add this data to data disseminated by the primary 

listing markets. See id., at 4. 

70See id., at 4–5 (noting that neither NYSE nor 

NASDAQ prohibits their members from 

withholding MOC orders from their closing 

auctions). In response, NYSE stated that it believed 

such broker-dealer services degrade the public price 

and size discovery of the primary listing exchanges’ 

closing auctions, but that such activities are not 

held to the same standards under the Act as 

national securities exchanges and against which the 

BZX proposal must be evaluated. See NYSE Letter 

2, supra note 5, at 4. 

71See BZX Letter, supra note 5, at 5. BZX 

provided evidence of 14 instances in June 2017 

where a NASDAQ-listed security had no volume in 

NASDAQ’s closing auction but did have volume in 

NYSE Arca’s closing auction. See id. In response, 

NYSE argued that it believed it was misleading to 

compare the proposal to the competing closing 

auctions because BZX would be offering neither a 

competing closing auction nor a facility to establish 

the official closing price should a primary listing 

exchange invoke its closing auction contingency 

plan. See NYSE Letter 2, supra note 5, at 3. 

72See id. at 4. BZX asserted that 86% of closing 

auctions conducted by NASDAQ for NYSE-listed 

securities in June 2017 resulted in closing prices 

different from the official closing price and 84% of 

competing closing auctions conducted by NYSE 

Arca for NASDAQ-listed securities in June 2017 

resulted in closing prices different from the official 

closing price. 

73See id. at 7–8. 

74See id. at 10. 

75 Id. In response, NYSE argued that BZX’s claims 

regarding the role of the DMM were not germane 

to whether the proposal is consistent with the Act 

and stated that it believed the scale of its closing 

auction and the low levels of volatility observed in 

the auction demonstrate its effectiveness. See NYSE 

Letter 2, supra note 5, at 4. 

76See BZX Letter, supra note 5, at 2 and 4. 

77See NASDAQ Letter, supra note 5, at 6; NYSE 

Letter 1, supra note 5, at 3. 

78See NYSE Letter 1, supra note 5, at 3. 

79See BZX Letter, supra note 5, at 8–9. 

80See id. 

81See id. 

82See SIFMA Letter, supra note 5, at 2 and 

ViableMkts Letter, supra note 5, at 3 (further noting 

that once BZX is able to process MOC orders, they 

would be in a position to develop the capability to 

offer a full backup closing auction process). 

83See Clearpool Letter, supra note 5, at 2. 

84See NYSE Letter 1, supra note 5, at 7; IMC 

Letter, supra note 5, at 1. 

companies from an unreliable or 

unrepresentative closing price and/or 

process could impact an issuer’s 

decision where to list and/or cause 

companies to forgo going public.67

In response to concerns regarding the 

impact of the proposal on the price 

discovery process, BZX argued that, 

because the proposal would only match 

MOC orders and would require the 

Exchange to publish the number of 

matched shares in advance of the 

primary listing markets’ cut-off times, 

BZX believes it would avoid any impact 

on price discovery.68 In addition, BZX 

offered to disseminate more information 

with regard to Bats Market Close and to 

disseminate such information via the 

applicable securities information 

processor, in addition to the Bats 

Auction Feed.69 BZX further challenged 

commenters’ concerns that Bats Market 

Close could pull all MOC orders away 

from the primary listing markets and 

alter the calculation of the closing price, 

noting that such a scenario could occur 

today as a result of competing closing 

auctions and broker-dealers that offer 

internal MOC order matching 

solutions.70 Furthermore, BZX argued 

that the competing auctions run by 

NASDAQ and NYSE Arca could not 

only pull all MOC interest away from 

the primary listing markets but could 

also divert all price-setting limit-onclose interest from those markets as 

well.71 BZX also asserted that such 

competing closing auctions often may 

produce bad auction prices on the nonprimary market, as compared to the 

proposed Bats Market Close which 

would ensure that market participants 

receive the official closing price.72

Accordingly, BZX contends that the 

proposal would not impose 

fragmentation on the market at the close 

that does not already exist today.73

In response to NYSE’s arguments 

regarding the impact on a DMM’s ability 

to price the close, BZX argued that this 

point highlights what it believes to be 

an additional benefit of allowing it to 

compete with NYSE’s closing auction.74

Specifically, BZX argued that its 

proposal would provide an alternative 

liquidity pool that would allow users to 

avoid the ‘‘subjective decision making 

of the DMMs.’’ 75

With regard to concerns about the 

impact of the proposal on issuers and 

their shareholders, BZX reaffirmed that 

the proposal is designed not to impact 

the trading environment for issuers and 

their securities or the price discovery 

function of the primary listing markets’ 

closing auction.76

In arguing that the proposal would 

cause fragmentation and thus impair the 

closing price, NYSE and NASDAQ also 

asserted that the proposal contradicts 

the Commission’s approval of recent 

amendments to the National Market 

System Plan to Address Extraordinary 

Market Volatility (the ‘‘LULD Plan’’) 

which, they argue, centralize re-opening 

auction liquidity at the primary listing 

exchange by prohibiting other market 

centers from re-opening following a 

trading pause until the primary listing 

exchange conducts a re-opening 

auction.77 Specifically, these 

commenters asserted that it would be 

inconsistent for the Commission to find 

it in the public interest to consolidate 

trading in a re-opening auction, while 

sanctioning fragmentation of trading in 

a closing auction.78

In response, BZX argued that this 

comparison is misplaced.79 Specifically, 

BZX said the amendment to the LULD 

Plan cited by NYSE and NASDAQ 

granted the primary listing market the 

ability set the re-opening price but did 

not mandate the consolidation of orders 

at the primary listing market following 

a trading halt.80 Accordingly, BZX 

believes the proposal is consistent with 

the LULD Plan as it seeks to avoid 

producing a ‘‘bad’’ or ‘‘outlier’’ closing 

price and does not affect the 

centralization of price-setting closing 

auction orders.81

Several commenters addressed the 

potential impact of the proposal on 

market complexity and operational risk 

as a result of increased market 

fragmentation. Some of these 

commenters believed that the proposal 

would not introduce significant 

additional complexity or operational 

risk. For example, two commenters 

argued that the proposal could enhance 

the resiliency of the closing auction 

process by providing market 

participants an additional mechanism 

through which to execute orders at the 

official closing price in the event of a 

disruption at a primary listing market.82

Another commenter argued that 

exchanges already have many market 

data feeds that firms must purchase to 

ensure that they have all of the 

information necessary to make informed 

execution decisions and that adding 

another data feed will not add 

complexity given the small amount of 

information that goes into the closing 

data feed and the current capabilities of 

market participants to re-aggregate 

multiple data feeds.83

In contrast, other commenters argued 

that the proposal would add 

unnecessary market complexity and 

operational risk. In particular, two 

commenters noted that the proposal 

would require market participants to 

monitor an additional data feed, the 

Bats Auction Feed, one noting that if 

additional exchanges adopted similar 

functionality to Bats Market Close, it 

would require monitoring of even more 

data feeds.84 These commenters argued 

that monitoring an additional data feed 

could increase operational risk by 

creating another point of failure at a 


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85See IMC Letter, supra note 5, at 1 and NYSE 

Letter 1, supra note 5, at 7. See also Ethan Allen 

Letter, supra note 5 (arguing the proposal would 

add a layer of complexity). 86See GTS Letter, supra note 5, at 6. 87See GTS Letter, supra note 5, at 6. Furthermore, 

NYSE argued that in certain situations, investors 

may not be able to participate in a closing auction 

on NYSE American or NYSE Arca if they wait until 

after their order was cancelled by BZX to send in 

a market-on-close order to closing auctions on 

NYSE Arca and NYSE American. NYSE explained 

that in situations where there is an order imbalance 

priced outside the Auction Collars, orders on the 

side of the imbalance are not guaranteed to 

participate in the closing auctions on those two 

exchanges. Earlier submitted market-on-close orders 

have priority. See NYSE Letter 1, supra note 5, at 

8. 

88See GTS Letter, supra note 5, at 6. 

89See T. Rowe Price Letter, supra note 5, at 1– 

2. See also NASDAQ Letter, supra note 5, at 8 

(noting that other exchanges may propose similar 

offerings but choose different pairing cut-off times 

which could further complicate investors’ decisions 

and programming requirements). 

90See BZX Letter, supra note 5, at 12. 

91See id. 

92See id. 

93See id., at 4 and 12. 94See id., at 4. 95See Angel Letter, supra note 5, at 5. 96See IEX Letter, supra note 5, at 2. 97See id., at 2–3. 

98See NASDAQ Letter, supra note 5, at 8. 

99See NASDAQ Letter, supra note 5, at 8. 

100See NYSE Letter 1, supra note 5, at 6. See also 

Americas Executions Letter, supra note 5 (stating 

that the proposal creates new opportunities to 

possibly manipulate the close). 

101See NYSE Letter 1, supra note 5, at 6. 

102See NYSE Letter 1, supra note 5, at 6. 

103See id. However, ViableMkts argued that 

because these market participants would not know 

the full magnitude of the imbalance, it does not 

believe the proposal creates an incremental risk of 

manipulation. See ViableMkts Letter, supra note 5, 

at 5. 

104See T. Rowe Price Letter, supra note 5, at 2– 

3. 

105See id. 

106See id. 

107See NYSE Letter 1, supra note 5, at 6. 

critical time of the trading day.85 One 

commenter also noted the increased 

complexity involved in sending order 

flow to more than one exchange in short 

periods of time near the close of the 

trading day.86 This commenter argued 

that the proposal increases operational 

risk and complexity at a critical point of 

the trading day by forcing market 

participants whose orders did not match 

in Bats Market Close to quickly send 

MOC orders from one exchange to 

another before the cut-off time at the 

primary market closing auction.87 This 

added complexity, GTS argued, puts 

additional stress on the systems of 

exchanges and increases the potential 

for disruptions.88 Lastly, two 

commenters argued that the proposal 

could encourage other exchanges, 

broker-dealers, and alternative trading 

systems to offer similar processes, 

which would introduce undesirable 

fragmentation to the market and lead to 

operational challenges for investors and 

traders.89

In response, BZX argued that the 

proposal would not increase operational 

risks, but rather would provide a way to 

address the single point of failure risk 

that exists for closing auctions 

conducted on the primary listing 

markets.90 BZX argued that despite the 

current system of designated auction 

backups, market participants can be 

confused about whether an exchange is 

in fact able to conduct a closing 

auction.91 BZX believes Bats Market 

Close could provide an alternative 

option for market participants to route 

orders, in the event there is an 

impairment at the primary listing 

market, and still receive the official 

closing price.92

In addition, as noted above, BZX 

stated that it would be willing to 

disseminate information regarding 

matched MOC orders, not only via the 

Bats Auction Feed, but also via the 

applicable securities information 

processor, if permissible.93 BZX added 

that modern software can easily and 

simply add volume data disseminated 

by the primary listing markets regarding 

the closing auction and data regarding 

matched MOC orders from the Bats 

Market Close.94

Several commenters addressed the 

issue of whether the proposal would 

facilitate manipulation of both the 

closing auctions on the primary listing 

markets, as well as continuous trading 

during the final minutes of the trading 

day. Some commenters did not believe 

it would do so. For example, one 

commenter noted that incentives to 

manipulate the closing price already 

exist and it is unlikely the proposal 

would result in increased manipulation 

of the market close.95 In addition, IEX 

argued that the proposal would make 

manipulation of closing crosses more 

conspicuous.96 IEX also claimed that the 

Consolidated Audit Trail would provide 

a new tool for detecting any such 

manipulation.97

In contrast, several commenters 

asserted that the proposal raises a risk 

of manipulation, in part due to the 

asymmetry of information that would be 

disseminated, which would allow 

market participants to utilize 

informational advantages to their own 

benefit. For example, NASDAQ argued 

that information concerning the amount 

of orders matched through Bats Market 

Close, would represent tradable 

information that market participants 

could use to ‘‘game’’ the closing crosses 

on the primary listing markets and 

undermine fair and orderly markets.98

In particular, NASDAQ argued that its 

closing auction was designed to 

carefully balance the amount and timing 

of data released so as to reduce the risk 

of gaming, but that this new information 

regarding paired MOC orders could be 

used to gauge the depth of the market, 

the direction of existing imbalances, and 

the likely depth remaining at NASDAQ, 

creating gaming opportunities.99 NYSE 

similarly argued that the proposal 

would increase potential 

manipulation.100 First, NYSE asserted 

that the potential for manipulative 

activity at the close would increase 

because primary listing exchange 

auctions would decrease in size and 

thus be easier to manipulate.101 NYSE 

also argued that the proposal facilitates 

manipulative activity by providing an 

incentive for market participants to 

inappropriately influence the closing 

price when they know they have been 

successfully paired-off on BZX.102

NYSE further asserted that the proposal 

could potentially provide some market 

participants, such as professional 

traders, with useful information that 

other market participants do not have, 

such as the direction of an imbalance, 

which could be used to influence the 

official closing price.103

Although not citing concerns 

regarding manipulation specifically, T. 

Rowe Price similarly argued that the 

proposal would lead to information 

asymmetries that could result in 

changes in continuous trading behavior 

leading into the market close as some 

market participants could be trading on 

information gathered from Bats Market 

Close pairing results.104 T. Rowe Price 

asserted that a market participant that is 

aware of the composition of volume 

paired through Bats Market Close at 3:35 

p.m. would be in a position to use that 

information to influence its trading 

behavior over the next ten to fifteen 

minutes leading in to the closing 

auction cut-off times on NYSE and 

NASDAQ respectively.105 T. Rowe Price 

argued that, as a result, the proposal 

could not only impact price discovery 

in closing auctions on the primary 

listing markets it could also impact 

continuous trading behavior.106

NYSE also stated that identifying 

manipulative activity would also 

become more difficult under the 

proposal due to the time difference 

between the Bats Market Close and 

primary market closing auctions and the 

cross-market nature of the 

manipulation.107 GTS similarly argued 

that the proposal would make 

surveillance of the market close more 

difficult and expensive due to 


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108See GTS Securities Letter, supra note 5, at 6. 

109See BZX Letter, supra note 5, at 11–12. 

110See id., at 11 

111See id., at 11–12. 

112See id., at 12. BZX also requested that the 

Commission review the appropriateness of NYSE’s 

use of the d-Quote and its potential for price 

manipulation of NYSE’s closing prices. See id., at 

9. 

113See id. 

114See Bowers Letter, supra note 5; Meridian 

Letter, supra note 5; and Americas Executions 

Letter, supra note 5. 

115See NYSE Letter 1, supra note 5, at 4; GTS 

Securities Letter, supra note 5, at 2–3; Customers 

Bancorp Letter, supra note 5; Masonite 

International Letter, supra note 5; Orion Group 

Letter, supra note 5; CTS Corporation Letter, supra 

note 5; Encana Letter, supra note 5; Triangle Capital 

Letter, supra note 5; Pennsylvania REIT Letter, 

supra note 5; IMC Letter, supra note 5, at 1–2; 

Southern Company Letter, supra note 5; Nobilis 

Health Letter, supra note 5; CACI Letter, supra note 

5; Turning Point Letter, supra note 5; P&G Letter, 

supra note 5; Cardinal Health Letter, supra note 5; 

FedEx Letter, supra note 5; and Stewart Letter, 

supra note 5. See also supra notes 57–59 and 

accompanying text. 

116See GTS Securities Letter, supra note 5, at 2– 

3; Masonite International Letter, supra note 5; 

Encana Letter, supra note 5; Triangle Capital Letter, 

supra note 5; Pennsylvania REIT Letter, supra note 

5; Nobilis Health Letter, supra note 5; CACI Letter, 

supra note 5; Turning Point Letter, supra note 5; 

P&G Letter, supra note 5; Cardinal Health Letter, 

supra note 5; FedEx Letter, supra note 5; and 

Stewart Letter, supra note 5. 

117See NASDAQ Letter, supra note 5, at 6–7; 

NYSE Letter 1, supra note 5, at 3; GTS Securities 

Letter, supra note 5, at 2–5; Customers Bancorp 

Letter, supra note 5; Orion Group Letter, supra note 

5; CTS Corporation Letter, supra note 5; IMC 

Financial Letter, supra note 5, at 1–2; Southern 

Company Letter, supra note 5; Nobilis Health 

Letter, supra note 5; EDA Letter, supra note 5, at 

1–2; Coupa Software Letter, supra note 5; Trade 

Desk Letter, supra note 5; Duffy/Meeks Letter, supra 

note 5, at 1; and Henry Schein Letter, supra note 

5. 

118See Customers Bancorp Letter, supra note 5; 

Orion Group Letter, supra note 5; CTS Corporation 

Letter, supra note 5; Southern Company Letter, 

supra note 5; Duffy/Meeks Letter, supra note 5, at 

1–2 (noting that the proposal could cause a 

disruption to the closing auction process, which 

could lead to discouraging investors from 

participating in and having confidence in our 

markets); and Five9 Letter, supra note 5. 

119See e.g., Bowers Letter, supra note 5; Americas 

Executions Letter, supra note 5; Customers Bancorp 

Letter, supra note 5; Orion Group Letter, supra note 

5; and Southern Company Letter, supra note 5. 

120See ViableMkts Letter, supra note 5, at 2. 

121See id. 

122See id. 

123See Clearpool Letter, supra note 5, at 4. 

124See T. Rowe Price Letter, supra note 5, at 3. 

125See NASDAQ Letter, supra note 5, at 13. 

Specifically, NASDAQ provides several scenarios to 

illustrate areas in which it believes how the Bats 

Market Close would operate is unclear, including 

where: (1) NASDAQ does not conduct a closing 

cross; (2) the official closing price for a NASDAQlisted security is the consolidated last sale price, 

which is an inferior price to the NBBO at 4:00 p.m.; 

and (3) the official closing price would trade 

through the Bats resting limit order book. In 

addition, NASDAQ argues that BZX did not 

adequately explain how it would avoid using a 

possibly ‘‘stale’’ price if there were no orders and 

thus no auction on a primary listing market, but 

there were MOC orders in Bats Market Close. 

126 15 U.S.C. 78s(b)(2). 

127 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of 

the Act also provides that proceedings to determine 

whether to disapprove a proposed rule change must 

be concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding, 

or if the exchange consents to the longer period. See 

id. 

fragmentation of order flow across 

multiple markets.108

In response, BZX argued that it does 

not believe that the proposal creates a 

potential for increased manipulation.109

Should the Commission approve the 

proposal, BZX notes that both it and 

FINRA as well as other exchanges 

would continue to surveil for 

manipulative activity and ‘‘seek to 

punish those that engage in such 

behavior.’’ 110 Furthermore, BZX argued 

that information asymmetries are 

inherent in trading, including the 

primary listing markets closing 

auctions.111 For example, BZX argued 

that the current operation of d-Quotes 

on NYSE carries a risk of manipulation 

as it provides an informational 

advantage to NYSE DMMs and floor 

brokers, and allows d-Quotes to be 

entered, modified or cancelled up until 

3:59:50 p.m. while other market 

participants are prohibited from 

entering, modifying or cancelling onclose orders after 3:45 p.m.112 Lastly, 

BZX argued that the information 

disseminated through the Bats Auction 

Feed would not provide an indication of 

whether the cancelling of a particular 

side of an order is meaningful, which 

limits its potential to impact the official 

closing price.113

Several commenters also addressed 

the potential impacts of the proposal on 

market participants that they assert play 

important roles in facilitating closing 

auctions on NYSE. Specifically, three 

commenters asserted that the proposal 

would have potentially detrimental 

impacts on NYSE floor brokers.114

Eighteen commenters asserted that the 

proposal would make it more difficult 

for Designated Market Makers to 

facilitate an orderly close of NYSE listed 

securities as they would lose the ability 

to continually assess the composition of 

market-on-close interest.115 Many of 

these commenters that are issuers 

asserted that one of the reasons they 

chose to list on NYSE was the ability to 

have access to a DMM that is 

responsible for facilitating an orderly 

closing auction.116

Several commenters stated that the 

proposal could harm issuers, 

particularly small and mid-cap 

companies.117 Many of these 

commenters, some of which are issuers, 

stated that the current centralized 

closing auctions on the primary listing 

markets contribute meaningful liquidity 

to a company’s stock, facilitates 

investment in the company, and helps 

to lower the cost of capital. Accordingly, 

these commenters expressed concern 

that potential fragmentation caused by 

the proposal could negatively impact 

liquidity during the closing auction, 

causing detrimental effects to listed 

issuers.118 Several commenters further 

argued that centralized closing auctions 

provide better opportunities to fill large 

orders with relatively little price 

impact.119

In contrast, one commenter argued 

that the proposal would improve 

aggregate liquidity at the official closing 

price.120 Specifically, this commenter 

asserted that the lower aggregate cost of 

trading would likely spur incremental 

increases in trading volumes.121 In 

addition, this commenter stated that the 

ability to enter MOC orders into Bats 

Market Close with little risk of 

information leakage may attract an 

additional source of liquidity.122

Finally, some commenters identified 

areas that they believed were not 

adequately addressed by the proposal 

and/or made suggestions for 

modifications to the Exchange’s 

proposal. For example, one commenter 

suggested that BZX extend the proposed 

MOC Cut-Off Time to closer to the 

primary market close.123 Another 

commenter suggested that, as an 

alternative, NYSE and NASDAQ should 

voluntarily review and reduce their 

auction fee structures, or, alternatively, 

the Commission should impose a cap on 

transaction fees for closing auctions.124

Lastly, NASDAQ also noted several 

areas, or scenarios, that it believed were 

not adequately explained by the 

proposal.125

IV. Proceedings To Determine Whether 

To Approve or Disapprove the BZX 

Proposal 

The Commission hereby institutes 

proceedings pursuant to Section 19(b)(2) 

of the Act 126 to determine whether the 

Exchange’s proposed rule change 

should be approved or disapproved. 

Further, pursuant to Section 19(b)(2)(B) 

of the Act,127 the Commission is hereby 

providing notice of the grounds for 

disapproval under consideration. The 

Commission believes it is appropriate to 

institute proceedings at this time in 

view of the legal and policy issues 

raised by the proposal. Institution of 

proceedings does not indicate, however, 

that the Commission has reached any 


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40210 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

128 15 U.S.C. 78f(b)(5). 

129 15 U.S.C. 78f(b)(8). 

130Securities Exchange Act Release No. 73639 

(November 19, 2014), 79 FR 72255, 72278 

(December 5, 2014). 

131Section 19(b)(2) of the Act, as amended by the 

Securities Act Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Act Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

132See Notice, supra note 3. 

conclusions with respect to any of the 

issues involved. 

In particular, the Commission is 

instituting proceedings to allow for 

additional analysis of the proposed rule 

change’s consistency with: (1) Section 

6(b)(5) of the Act which requires, among 

other things, that the rules of a national 

securities exchange be designed ‘‘to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, . . . 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;’’ 128 and (2) Section 

6(b)(8) of the Act, which requires that 

the rules of a national securities 

exchange ‘‘not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of [the Act].’’ 129

As described above, BZX proposes to 

introduce Bats Market Close, a closing 

match process for non-BZX listed 

securities that would match MOC orders 

submitted to the Bats Market Close at 

the official closing price for such 

security published by the primary 

listing market. Under the proposal, 

Members would be able to submit, 

cancel, and replace MOC orders 

designated for the Bats Market Close up 

until the MOC Cut-Off Time at 3:35 

p.m., after which time orders would be 

matched for execution and any 

remaining imbalance would be 

cancelled back to the Member(s). BZX 

would disseminate, via the Bats Auction 

Feed, the total size of all buy and sell 

orders matched for each security. The 

Exchange asserts that its proposal would 

increase competition and decrease fees 

for market participants, without 

impacting the price discovery process. 

The Commission has consistently 

recognized the importance of closing 

auctions of the primary listing markets. 

For example, in its adoption of 

Regulation SCI, the Commission 

identified systems used to support 

closings on the primary market as 

‘‘critical SCI systems,’’ stating that 

‘‘reliable . . . closings on the primary 

listing markets are key to the 

establishment of fair and orderly 

markets,’’ and noting that ‘‘closing 

auctions at the primary listing markets 

attract widespread participation, and 

the closing prices they establish are 

commonly used as benchmarks.’’ 130

Accordingly, the Commission is 

considering whether the proposal 

removes impediments to and perfects 

the mechanism of a free and open 

market and a national market system, 

and what its impact would be on the 

primary listing markets’ closing 

auctions, including their important 

price discovery functions, or the 

reliability and integrity of the closing 

prices that they establish. Further, the 

Commission is considering whether the 

proposal imposes any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act, including the 

potential competitive burdens that may 

be created when an exchange offers 

market participants the ability to 

execute orders at a lower cost at the 

closing price established by another 

exchange, without incurring the costs of 

developing and operating the closing 

auctions from which the price is 

derived. In addition, the Commission is 

considering whether the proposal is 

designed to prevent fraudulent and 

manipulative acts and practices and, in 

particular, whether it would provide 

increased incentives or opportunities for 

inappropriate utilization of information 

to manipulate the closing price. Finally, 

the Commission is considering whether 

the proposal would have additional 

impacts on the markets, including 

increased complexity and operational 

risk, that would be inconsistent with the 

protection of investors and the public 

interest. 

V. 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 

relevant concerns they may have with 

the proposal. In particular, the 

Commission invites the written views of 

interested persons concerning whether 

the proposal is consistent with Sections 

6(b)(5) and 6(b)(8) of the Act, or any 

other provision of the Act or rule or 

regulation thereunder. Although there 

do not appear to be any issues relevant 

to approval or disapproval which would 

be facilitated by an oral presentation of 

views, data, and arguments, the 

Commission will consider, pursuant to 

Rule 19b–4, any request for an 

opportunity to make an oral 

presentation.131

Such comments should be submitted 

by September 14, 2017. Rebuttal 

comments should be submitted by 

September 28, 2017. The Commission 

asks that commenters address the 

sufficiency and merit of the Exchange’s 

statements in support of the proposal, 

which are set forth in the Notice,132 in 

addition to any other comments they 

may wish to submit about the proposed 

rule change. In particular, the 

Commission seeks comment, including, 

where relevant, any specific data, 

statistics, or studies, on the following: 

1. Would the proposed rule change 

affect price discovery in the closing 

auction process on each primary listing 

exchange? If so, how? Would any such 

impact be the same at each of the 

primary listing exchanges? What 

information do market participants need 

going into the closing auction? Would 

the proposed rule change affect the 

information available to market 

participants during the closing auction 

process? If so, how? If commenters 

believe the proposal would harm price 

discovery in the closing auction process, 

to the extent possible please provide 

specific data, analyses, or studies for 

support. 

2. To what extent, if at all, would the 

availability of the Bats Market Close 

impact market participants’ use of limiton-close orders in the closing auction 

processes on the primary listing 

exchanges, including with respect to 

size and price? Please explain. Would 

market participants use MOC orders in 

the Bats Market Close as a substitute for 

using limit orders to participate in the 

closing auction processes at the primary 

listing exchanges? Would any such 

impacts be the same for each of the 

primary listing exchanges? Are there 

differences between the closing auction 

processes at each of the primary listing 

exchanges whereby the proposed Bats 

Market Close would have differing 

effects on each primary listing 

exchange? If so, please explain. How 

does information available in the 

closing auction process affect market 

participants’ order submissions and/or 

determination of the closing price? 

Would the proposed rule change affect 

market participants’ trading strategies in 

closing auctions? If so, how? If 

commenters believe the proposal would 

impact the use of limit-on-close orders 

in closing auctions, to the extent 

possible please provide specific data, 

analyses, or studies for support. 


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3. What analyses of available data 

could provide information about 

relationships between information 

disseminated during closing auctions, 

trading strategies in closing auctions, 

and closing prices? How would such 

analyses help estimate the impact, if 

any, of any changes in the availability 

of information under the proposed rule 

change on trading strategies and closing 

prices? In this regard, to the extent 

possible, please provide specific data, 

analyses, or studies in support. 

4. What amount of trading volume at 

the close occurs on venues other than 

the primary listing exchanges (such as 

competing closing auctions and/or 

broker-dealer internal matching 

processes for MOC orders) and how 

does such closing volume compare with 

that of the primary listing exchanges? 

How does that volume impact the 

closing auction process on each of the 

primary listing exchanges? If 

commenters believe the proposal would 

impact volume in the closing auction 

process, to the extent possible please 

provide specific data, analyses, or 

studies for support. How does the Bats 

Market Close proposal differ from such 

existing processes (i.e., competing 

closing auctions and/or broker-dealer 

internal MOC matching processes)? 

Would the proposal affect the existing 

level of fragmentation in the market? If 

so, how? Please describe. Would the 

proposal impact the aggregate liquidity 

at the primary listing markets during the 

closing auctions? If so, how? If 

commenters believe the proposal would 

impact the existing level of 

fragmentation in the market or aggregate 

liquidity at the primary listing markets 

during the closing auction, to the extent 

possible please provide specific data, 

analyses, or studies for support. Would 

the matching of a significant amount of 

MOC orders at a venue other than the 

primary listing market affect the 

integrity or reliability of the official 

closing auction and the resulting closing 

price? If so, how? Please describe in 

detail and provide examples if possible. 

Further, if commenters believe the 

proposal would affect the integrity or 

reliability of the official closing auction 

and the resulting closing price, to the 

extent possible please provide specific 

data, analyses, or studies for support. 

5. Would the proposal have a positive, 

negative, or neutral impact on 

competition? Please explain. How 

would any impact on competition from 

the proposal benefit or harm the 

national market system and/or the 

various market participants? Please 

describe and explain how, if at all, 

aspects of the national market system 

and/or different market participants 

would be affected. What are the current 

costs associated with a primary listing 

market developing and operating a 

closing auction, and to what extent (and 

if so, how) are these costs passed on to 

market participants today? How do the 

fixed costs associated with developing 

closing auctions compare to the variable 

costs of conducting closing auctions? 

How do the revenues collected from 

closing auctions compare to these costs? 

Would the proposal impact the current 

fees charged by the primary listing 

markets for participation in their closing 

auctions? If so, how? If commenters 

believe the proposal would impact 

competition, to the extent possible 

please provide specific data, analyses, 

or studies for support. 

6. What effect would the proposal 

have on market complexity and/or 

operational risk, if any? If commenters 

believe the proposal would impact 

market complexity and operational risk, 

to the extent possible, please provide 

specific data, analyses, or studies for 

support. Would the daily process of 

cancelling unmatched MOC orders back 

to members so that they can be routed 

to the primary listing markets before the 

closing auction cut-off times create 

operational or other risks for the 

markets or market participants? If so, 

please describe. Would any such risks 

be different than the risks that currently 

exist now for market participants? Are 

there alternative ways of managing 

unmatched orders that would have 

different implications for the 

operational risks of the proposal? If so, 

please describe. Would the monitoring 

of an additional data feed be difficult or 

increase risk for market participants? 

Why or why not? 

7. Would the proposal affect the 

potential for manipulation and, if so, 

what types of manipulative activity 

might result from, or be decreased by, 

the proposal? Would the proposal create 

informational advantages for certain 

market participants? If so, please detail 

these advantages and describe whether 

and how such information could be 

utilized to a market participant’s own 

advantage. Would such informational 

advantages differ from information 

asymmetries that exist in the markets 

today? If so, please describe. Would the 

proposal affect surveillance for 

manipulation negatively or positively, 

and are existing surveillance tools 

adequate to monitor any increased risk? 

Please explain. If commenters believe 

the proposal would increase or decrease 

the potential for manipulative activity, 

to the extent possible please provide 

specific data, analyses, or studies for 

support. 

8. What are the potential impacts of 

the proposal for listed issuers? For 

example, would the proposal impact the 

liquidity of an issuer’s stock? If so, how? 

Would the proposal affect an issuer’s 

decision as to whether to list their 

securities on a national securities 

exchange? If so, how? Would any 

impacts of the proposal affect small and 

mid-sized listed companies differently 

from larger listed companies? If so, 

please describe how. What other 

impacts, if any, could the proposal have 

on various other market participants, 

such as market makers and floor 

brokers, and in particular, their roles in 

the closing? If commenters believe the 

proposal would impact listed issuers or 

other market participants, to the extent 

possible please provide specific data, 

analyses, or studies for support. 

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– 

BatsBZX–2017–34 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–2017–34. The 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 the Exchange. All comments 

received will be posted without change; 

the Commission does not edit personal 


rmajette on DSKBCKNHB2PROD with NOTICES
40212 Federal Register / Vol. 82, No. 163 / Thursday, August 24, 2017 / Notices 

133 17 CFR 200.30–3(a)(57) and (58). 

identifying information from 

submissions. You should submit only 

information that you wish to make 

publicly available. All submissions 

should refer to File Number SR– 

BatsBZX–2017–34 and should be 

submitted on or before September 14, 

2017. Rebuttal comments should be 

submitted by September 28, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.133

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–17909 Filed 8–23–17; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15251 and #15252; 

Vermont Disaster Number VT–00033] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of Vermont 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of Vermont (FEMA–4330–DR), 

dated August 16, 2017. 

DATES: Issued on 08/16/2017. 

Physical Loan Application Deadline 

Date: 10/16/2017. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 05/16/2018. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW., Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

08/16/2017, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 

Incident: Severe Storms and Flooding. 

Incident Period: 06/29/2017 through 

07/01/2017. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Addison, Bennington, 

Caledonia, Orange, Rutland, 

Washington, Windsor 

The Interest Rates are: 

Percent 

For Physical Damage: 

Non-Profit Organizations With 

Credit Available Elsewhere ... 2.500 

Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.500 

For Economic Injury: 

Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.500 

The number assigned to this disaster 

for physical damage is 15251B and for 

economic injury is 152520. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

James E. Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2017–17900 Filed 8–23–17; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15247 and #15248; 

Kentucky Disaster Number KY–00065] 

Administrative Declaration of a 

Disaster for the State of Kentucky 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of KENTUCKY. 

Dated: 08/15/2017. 

DATES: Issued on: 08/15/2017. 

Physical Loan Application Deadline 

Date: 10/16/2017. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 05/15/2018. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW., Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

Administrator’s disaster declaration, 

applications for disaster loans may be 

filed at the address listed above or other 

locally announced locations. 

Incident: Torrential Rains, Flash 

Flooding and Mudslides. 

Incident Period: 07/23/2017. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Mason 

Contiguous Counties: 

Kentucky: Bracken, Fleming, Lewis, 

Robertson 

Ohio: Adams, Brown 

The Interest Rates are: 

Percent 

For Physical Damage: 

Homeowners With Credit Available Elsewhere ...................... 3.500 

Homeowners Without Credit 

Available Elsewhere .............. 1.750 

Businesses With Credit Available Elsewhere ...................... 6.610 

Businesses Without Credit 

Available Elsewhere .............. 3.305 

Non-Profit Organizations With 

Credit Available Elsewhere ... 2.500 

Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.500 

For Economic Injury: 

Businesses & Small Agricultural 

Cooperatives Without Credit 

Available Elsewhere .............. 3.305 

Non-Profit Organizations Without Credit Available Elsewhere ..................................... 2.500 

The number assigned to this disaster 

for physical damage is 15247 B and for 

economic injury is 15248 0. 

The States which received an EIDL 

Declaration # are Kentucky Ohio. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

Dated: August 15, 2017. 

Linda E. McMahon, 

Administrator. 

[FR Doc. 2017–17917 Filed 8–23–17; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15224 and #15225; 

California Disaster Number CA–00275] 

Administrative Declaration 

Amendment of Disaster for the State of 

California 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Amendment 1. 

SUMMARY: This is an amendment of the 

Administrative declaration of a disaster 

for the State of CALIFORNIA dated 08/ 

11/2017. 

DATES: Issued on 08/11/2017. 

Physical Loan Application Deadline 

Date: 09/29/2017. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 05/01/2018. 


rmajette on DSKBCKNHB2PROD with NOTICES