Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 42143 

20 15 U.S.C. 78s(b)(3)(A)(ii). 

21 15 U.S.C. 78s(b)(2)(B). 

22 17 CFR 200.30–3(a)(12). 

1New York Stock Exchange, LLC, NYSE Arca, 

Inc., NYSE MKT LLC, and Miami International 

Securities Exchange LLC filed their proposed rule 

changes on May 16, 2017. 

2Bats BYX Exchange, Inc., Bats BZX Exchange, 

Inc., Bats EDGA Exchange, Inc., Bats EDGX 

Exchange, Inc. and Chicago Board Options 

Exchange, Incorporated filed their proposed rule 

changes on May 23, 2017. 

3BOX Options Exchange LLC filed its proposed 

rule change on May 25, 2017. 

4 Investors Exchange LLC filed its proposed rule 

change on June 6, 2017. 

5The NASDAQ Stock Market LLC and NASDAQ 

PHLX LLC filed their proposed rule changes on 

June 8, 2017. 

6NASDAQ BX, Inc., Nasdaq GEMX, LLC, Nasdaq 

ISE, LLC, Nasdaq MRX, LLC filed their proposed 

rule changes on June 9, 2017. 

To the contrary, the Exchange believes 

that the proposed pricing structure will 

increase competition and hopefully 

draw additional volume to the Exchange 

for the Opening Process. The Exchange 

operates in a highly competitive market 

in which market participants can 

readily favor competing venues if fee 

schedules at other venues are viewed as 

more favorable. Consequently, the 

Exchange believes that the degree to 

which IEX fees could impose any 

burden on competition is extremely 

limited, and does not believe that such 

fees would burden competition of 

Members or competing venues in a 

manner that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intramarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because, while different fees are 

assessed in some circumstances, these 

different fees are not based on the type 

of Member entering the orders that 

execute in the Opening Process but on 

the type of order entered and all 

Members can submit any type of order. 

Further, the proposed fees are intended 

to encourage market participants to 

bring increased volume to the Exchange, 

which benefits all market participants. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) 20 of the Act. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 21 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

IEX–2017–28 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–IEX–2017–28. 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 Exchange. 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–IEX– 

2017–28, and should be submitted on or 

before September 27, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18796 Filed 9–5–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81500; File Nos. SR– 

BatsBYX–2017–13; SR–BatsBZX–2017–39; 

SR–BatsEDGA–2017–14; SR–BatsEDGX– 

2017–24; SR–BOX–2017–19; SR–CBOE– 

2017–043; SR–IEX–2017–21; SR–ISE–2017– 

52; SR–MRX–2017–08; SR–MIAX–2017–24; 

SR–NASDAQ–2017–059; SR–BX–2017–029; 

SR–GEMX–2017–24; SR–PHLX–2017–47; 

SR–NYSE–2017–24; SR–NYSEArca–2017– 

60; SR–NYSEMKT–2017–31] 

Self-Regulatory Organizations; Bats 

BYX Exchange Inc.; Bats BZX 

Exchange, Inc.; Bats EDGA Exchange, 

Inc.; Bats EDGX Exchange, Inc.; BOX 

Options Exchange LLC; Chicago 

Board Options Exchange, 

Incorporated; Investors Exchange 

LLC; Nasdaq ISE, LLC; Nasdaq MRX, 

LLC; Miami International Securities 

Exchange, LLC; The NASDAQ Stock 

Market LLC; NASDAQ BX, Inc.; Nasdaq 

GEMX, LLC; NASDAQ PHLX LLC; New 

York Stock Exchange LLC; NYSE Arca, 

Inc.; NYSE MKT LLC; Order Approving 

Proposed Rule Changes, as Modified 

by Amendments, To Adopt a 

Consolidated Audit Trail Fee Dispute 

Resolution Process 

August 30, 2017. 

I. Introduction 

On May 16, 2017,1 May 23, 2017,2

May 25, 2017,3 June 6, 2017,4 June 8, 

2017 5 and June 9, 2017,6 Bats BYX 

Exchange, Inc. (‘‘Bats BYX’’), Bats BZX 

Exchange, Inc. (‘‘Bats BZX’’), Bats EDGA 

Exchange, Inc. (‘‘Bats EDGA’’), Bats 

EDGX Exchange, Inc. (‘‘Bats EDGX’’), 

BOX Options Exchange LLC (‘‘BOX’’), 


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42144 Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 

7 15 U.S.C. 78s(b)(1). 

8 17 CFR 240.19b–4. 

9See Securities Exchange Act Release Nos. 80780 

(May 26, 2017), 82 FR 25382; 80781 (May 26, 2017), 

82 FR 25369; 80782 (May 26, 2017), 82 FR 25379. 10See Securities Exchange Act Release Nos. 

80837 (June 1, 2017), 82 FR 26526; 80836 (June 1, 

2017), 82 FR 26539; 80834 (June 1, 2017), 82 FR 

26542; 80835 (June 1, 2017), 82 FR 26549; 80833 

(June 1, 2017), 82 FR 26529; 80831 (June 1, 2017), 

82 FR 26536; and 80832 (June 1, 2017), 82 FR 

26523. 

11See Securities Exchange Act Release No. 80936 

(June 15, 2017), 82 FR 28153. 

12See Securities Exchange Act Release No. 80952 

(June 16, 2017), 82 FR 28540 (‘‘Notice’’). 

13See Securities Exchange Act Release Nos. 

80967 (June 19, 2017), 82 FR 28719; 80968 (June 19, 

2017), 82 FR 28705; 80970 (June 19, 2017), 82 FR 

28708; 80971 (June 19, 2017), 82 FR 28698; 80966 

(June 19, 2017), 82 FR 28702. 

14 15 U.S.C. 78s(b)(2). 

15See Securities Exchange Act Release No. 81110 

(July 10, 2017), 82 FR 32598 (July 14, 2017); 81112 

(July 10, 2017), 82 FR 32592 (July 14, 2017); 81113 

(July 10, 2017), 82 FR 32596 (July 14, 2017); 81156 

(July 18, 2017), 82 FR 34337 (July 24, 2017); 81157 

(July 18, 2017), 82 FR 34338 (July 24, 2017); 81158 

(July 18, 2017), 82 FR 34339 (July 24, 2017); 81159 

(July 18, 2017), 82 FR 34338 (July 24, 2017); 81161 

(July 18, 2017), 82 FR 34337 (July 24, 2017); 81162 

(July 18, 2017), 82 FR 34336 (July 24, 2017); 81164 

(July 18, 2017), 82 FR 34346 (July 24, 2017); 81165 

(July 18, 2017), 82 FR 34345 (July 24, 2017); 81166 

(July 18, 2017), 82 FR 34345 (July 24, 2017); 81167 

(July 18, 2017), 82 FR 34337 (July 24, 2017); 81178 

(July 20, 2017), 82 FR 34715 (July 26, 2017); 81179 

(July 20, 2017), 82 FR 34716 (July 26, 2017); 81180 

(July 20, 2017), 82 FR 34728 (July 26, 2017); and 

81181 (July 20, 2017), 82 FR 34727 (July 26, 2017). 

16NYSE, NYSE Arca and NYSE MKT filed 

Amendment No. 1 to their proposed rule changes 

on August 23, 2017. Amendment No. 1 is available 

on the Commission’s Web site for NYSE, NYSE 

Arca, and NYSE MKT, respectively, at: https://

www.sec.gov/comments/sr-nyse-2017-24/ 

nyse201724-2241267-160850.pdf; https://

www.sec.gov/comments/sr-nysearca-2017-60/ 

nysearca201760-2241265-160861.pdf; and https://

www.sec.gov/comments/sr-nysemkt-2017-31/ 

nysemkt201731-2241266-160862.pdf. 

17Bats BYX, Bats BZX, Bats EDGA, Bats EDGX, 

CBOE and BOX filed Amendment No. 1 to their 

proposed rule changes on August 24, 2017. 

Amendment No. 1 is available on the Commission’s 

Web site for Bats BYX, Bats BZX, Bats EDGA, Bats 

EDGX, CBOE and BOX, respectively, at: https://

www.sec.gov/comments/sr-batsbyx-2017-13/ 

batsbyx201713-2253932-160942.pdf; https://

www.sec.gov/comments/sr-batsbzx-2017-39/ 

batsbzx201739-2251466-160921.pdf; https://

www.sec.gov/comments/sr-batsedga-2017-14/ 

batsedga201714-2251458-160938.pdf; https://

www.sec.gov/comments/sr-batsedgx-2017-24/ 

batsedgx201724-2251462-160919.pdf; https://

www.sec.gov/comments/sr-cboe-2017-043/ 

cboe2017043-2251469-160922.pdf; and https://

www.sec.gov/comments/sr-box-2017-19/box201719- 

2250011-160918.pdf. MIAX filed Amendment No. 1 

on August 22, 2017, but withdrew it on August 24, 

2017. MIAX then filed Amendment No. 2 on August 

24, 2017. Amendment No. 2 for MIAX is available 

on the Commission’s Web site at: https://

www.sec.gov/comments/sr-miax-2017-24/ 

miax201724-2243335-160869.pdf. 

18 IEX, Phlx, Nasdaq, BX, GEMX, ISE and MRX 

filed Amendment No. 1 to their proposed rule 

changes on August 25, 2017. Amendment No. 1 is 

available on the Commission’s Web site for IEX, 

Phlx, Nasdaq, BX, GEMX, ISE and MRX, 

respectively, at: https://www.sec.gov/comments/sriex-2017-21/iex201721-2243778-160880.pdf; 

https://www.sec.gov/comments/sr-phlx-2017-47/ 

phlx201747-2257687-160924.pdf; https://

www.sec.gov/comments/sr-nasdaq-2017-059/ 

nasdaq2017059-2257689-160925.pdf; https://

www.sec.gov/comments/sr-bx-2017-029/bx2017029- 

2251461-160940.pdf; https://www.sec.gov/ 

comments/sr-gemx-2017-24/gemx201724-2244452- 

160897.pdf; https://www.sec.gov/comments/sr-ise2017-52/ise201752-2244293-160891.pdf; and 

https://www.sec.gov/comments/sr-mrx-2017-08/ 

mrx201708-2251467-160941.pdf. 

19The Amendments amended the original filings 

to make technical changes to the proposed rule 

changes. Specifically, each Participant amended the 

proposed rule text to remove references to proposed 

‘‘Consolidated Audit Trail Funding Fees,’’ as such 

fees are currently suspended, and replaced such 

term with the phrase ‘‘any fees contemplated by the 

CAT NMS Plan and imposed on Industry Members 

pursuant to Exchange Rules.’’ See infra note 24. 

Each Participant also removed references to 

‘‘Consolidated Audit Trail Funding Fees’’ from 

paragraphs (a)(1), (b) and (c)(1) of the proposed rule 

text. In addition, in connection with the merger of 

NYSE Arca Equities with and into NYSE Arca, 

Amendment No. 1 for NYSE Arca also combines 

NYSE Arca Equities Rule 6.6900 and NYSE Arca 

Rule 11.6900 into a single rule NYSE Rule 11.6900. 

See Securities Exchange Act Release No. 80781 

(May 26, 2017), 82 FR 25369. See also Securities 

Exchange Act Release No. 81419 (August 17, 2017), 

82 FR 40044 (August 23, 2017). The Amendments 

are not subject to notice and comment because they 

are technical amendments that do not materially 

alter the substance of the proposed rule changes or 

raise any novel regulatory issues. 

20The Commission notes that for purposes of this 

Order, unless otherwise specified, capitalized terms 

used in this Order are defined as set forth in the 

proposals, as modified by the Amendments, or in 

the CAT NMS Plan. See supra notes 16–18; see also 

infra note 23. 

21 15 U.S.C. 78k–1. 

22 17 CFR 242.608. 

23See Letter from the Participants to Brent J. 

Fields, Secretary, Commission, dated September 30, 

2014; and Letter from Participants to Brent J. Fields, 

Secretary, Commission, dated February 27, 2015. 

On December 24, 2015, the Participants submitted 

an amendment to the CAT NMS Plan. See Letter 

from Participants to Brent J. Fields, Secretary, 

Commission, dated December 23, 2015. The Plan 

was published for comment in the Federal Register 

on May 17, 2016, and approved by the Commission, 

as modified, on November 15, 2016. See Securities 

Exchange Act Release Nos. 77724 (April 27, 2016), 

81 FR 30614 (May 17, 2016); 79318 (November 15, 

2016), 81 FR 84696 (November 23, 2016). 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’), Investors 

Exchange LLC (‘‘IEX’’), Nasdaq ISE, LLC 

(‘‘ISE’’), Nasdaq MRX, LLC (‘‘MRX’’), 

Miami International Securities 

Exchange, LLC (‘‘MIAX’’), The 

NASDAQ Stock Market LLC (‘‘Nasdaq’’), 

NASDAQ BX, Inc. (‘‘BX’’), Nasdaq 

GEMX, LLC (‘‘GEMX’’), NASDAQ PHLX 

LLC (‘‘Phlx’’), New York Stock 

Exchange LLC (‘‘NYSE’’), NYSE Arca, 

Inc. (‘‘NYSE Arca’’) and NYSE MKT 

LLC (‘‘NYSE MKT’’) (collectively, the 

‘‘Participants’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 7 and Rule 19b–4 

thereunder,8 proposed rule changes to 

establish the procedures for resolving 

potential disputes related to CAT Fees 

charged to Industry Members. The 

proposed rule changes submitted by 

NYSE, NYSE Arca and NYSE MKT were 

published for comment in the Federal 

Register on June 1, 2017.9 The proposed 

rule changes submitted by MIAX, Bats 

BYX, Bats BZX, Bats EDGA, Bats EDGX, 

BOX and CBOE were published for 

comment in the Federal Register on 

June 7, 2017.10 The proposed rule 

change submitted by IEX was published 

for comment in the Federal Register on 

June 20, 2017.11 The proposed rule 

change submitted by Nasdaq was 

published for comment in the Federal 

Register on June 22, 2017.12 The 

proposed rule changes submitted by 

Phlx, BX, GEMX, ISE and MRX were 

published for comment in the Federal 

Register on June 23, 2017.13 Pursuant to 

Section 19(b)(2) of the Act,14 the 

Commission designated a longer period 

within which to approve, disapprove, or 

institute proceedings to determine 

whether to approve or disapprove the 

proposed rule changes.15 The 

Commission received no comments in 

response to the proposed rule changes. 

On August 23, 2017,16 August 24, 

2017 17 and August 25, 2017,18 the 

Participants filed Amendments to the 

proposed rule change.19 This order 

approves the proposed rule changes, as 

modified by the Amendments.20

II. Description of the Proposed Rule 

Changes, as Modified by the 

Amendments 

The Participants, along with C2 

Options Exchange, Inc., Chicago Stock 

Exchange, Inc., Financial Industry 

Regulatory Authority, Inc., MIAX 

PEARL, LLC, and NYSE National, Inc., 

filed with the Commission, pursuant to 

Section 11A of the Act 21 and Rule 608 

of Regulation NMS thereunder,22 the 

National Market System Plan Governing 

the Consolidated Audit Trail (‘‘CAT 

NMS Plan’’ or ‘‘Plan’’).23 The Plan is 

designed to create, implement and 

maintain a consolidated audit trail 

(‘‘CAT’’) that would capture customer 

and order event information for orders 

in NMS Securities and OTC Equity 

Securities, across all markets, from the 

time of order inception through routing, 

cancellation, modification, or execution 

in a single consolidated data source. 

The Plan accomplishes this by creating 

CAT NMS, LLC (‘‘Company’’), of which 

each Participant is a member, to operate 

the CAT. 

Under the CAT NMS Plan, the 

Operating Committee of the Company 

(‘‘Operating Committee’’) has the 

discretion to establish funding for the 

Company to operate the CAT, including 

establishing fees that the Participants 


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24Section 11.1(b) of the CAT NMS Plan. The 

Commission notes that the Participants filed 

proposed rule changes to adopt fees to be charged 

to Industry Members, including Industry Members 

that are Execution Venues. See Securities Exchange 

Act Release Nos. 80675 (May 15, 2017), 82 FR 

23100 (May 19, 2017) (SR–MIAX–2017–18); 80697 

(May 16, 2017), 82 FR 23398 (May 22, 2017) (SR– 

BX–2017–023); 80692 (May 16, 2017), 82 FR 23325 

(May 22, 2017) (SR–IEX–2017–16); 80696 (May 16, 

2017), 82 FR 23439 (May 22, 2017) (SR–NASDAQ– 

2017–046); 80693 (May 16, 2017), 82 FR 23363 

(May 22, 2017) (SR–NYSE–2017–22); 80698 (May 

16, 2017), 82 FR 23457 (May 22, 2017) (SR– 

NYSEArca–2017–52); 80694 (May 16, 2017), 82 FR 

23416 (May 22, 2017) (SR–NYSEMKT–2017–26); 

80721 (May 18, 2017), 82 FR 23864 (May 24, 2017) 

(SR–BOX–2017–16); 80713 (May 18, 2017), 82 FR 

23956 (May 24, 2017) (SR–GEMX–2017–17); 80715 

(May 18, 2017), 82 FR 23895 (May 24, 2017) (SR– 

ISE–2017–45); 80726 (May 18, 2017), 82 FR 23915 

(May 24, 2017) (SR–MRX–2017–04); 80725 (May 18, 

2017), 82 FR 23935 (May 24, 2017) (SR–PHLX– 

2017–37); 80785 (May 26, 2017), 82 FR 25404 (June 

1, 2017) (SR–CBOE–2017–040); 80784 (May 26, 

2017), 82 FR 25448 (June 1, 2017) (SR–BatsEDGA– 

2017–13); 80809 (May 30, 2017), 82 FR 25837 (June 

5, 2017) (SR–BatsBYX–2017–11); 80822 (May 31, 

2017), 82 FR 26148 (June 6, 2017) (SR–BatsBZX– 

2017–38); and 80821 (May 31, 2017), 82 FR 26177 

(June 6, 2017) (SR-BatsEDGX–2017–22). On June 30, 

2017, the Commission temporarily suspended the 

proposed rule changes and instituted proceedings 

to determine whether to approve or disapprove the 

proposed rule changes. See Securities Exchange Act 

Release No. 81067, 82 FR 31656 (July 7, 2017). 

25 17 CFR 242.608. 

26See, e.g., Notice, supra note 12, at 28541–42. 

The Participants also represent that the Fee Dispute 

Resolution Procedures were modeled after the 

adverse action procedures adopted by various 

exchanges and that such Procedures will be posted 

on the CAT NMS Plan Web site 

(www.catnmsplan.com). See, e.g., id. at 28542. 

27See, e.g., id. at 28541. 

28See, e.g., id. at 28542. 

29See, e.g., id. 

30See, e.g., id. 

31See, e.g., id. The Participants further indicate 

that the members of the Fee Review Subcommittee 

will be subject to the provisions of Section 4.3(d) 

of the CAT NMS Plan regarding recusal and 

Conflicts of Interest. See, e.g., id. 

32See, e.g., id. 

33See, e.g., id. 

34See, e.g., id. 

35See, e.g., id. 

36See, e.g., id. 

37See, e.g., id. The proposed rule changes note, 

however, that the formal rules of evidence will not 

apply. 

38See, e.g., id. 

39See, e.g., id. 

40See, e.g., id. 

41See, e.g., id. 

42See, e.g., id. 

43See, e.g., id. 

44See, e.g., id. 

and Industry Members will pay (‘‘CAT 

Fees’’).24 Section 11.5 of the CAT NMS 

Plan requires the Participants to adopt 

rules requiring that disputes with 

respect to fees charged to Industry 

Members pursuant to the CAT NMS 

Plan be determined by the Operating 

Committee or a designated 

Subcommittee. Section 11.5 of the CAT 

NMS Plan also states that decisions by 

the Operating Committee or a 

designated Subcommittee on such 

matters shall be binding on Industry 

Members, without prejudice to the right 

of any Industry Member to seek redress 

from the Commission pursuant to Rule 

608 25 or in any other appropriate 

forum. The Participants filed the 

proposed rule changes to establish the 

procedures for resolving potential 

disputes related to CAT Fees charged to 

Industry Members. 

Fee Dispute Resolution 

The proposals state that disputes 

initiated by an Industry Member with 

respect to CAT Fees charged to such 

Industry Member, including disputes 

related to the designated tier and the fee 

calculated pursuant to such tier, shall be 

resolved by the Operating Committee, or 

a Subcommittee designated by the 

Operating Committee, pursuant to the 

Fee Dispute Resolution Procedures 

adopted by the Operating Committee 

pursuant to the CAT NMS Plan.26 The 

proposals further indicate that decisions 

on such matters shall be binding on 

Industry Members, without prejudice to 

the rights of any such Industry Member 

to seek redress from the Commission or 

in any other appropriate forum.27

Under the Fee Dispute Resolution 

Procedures, an Industry Member that 

disputes CAT Fees charged to such 

Industry Member and that desires to 

have an opportunity to be heard with 

respect to such disputed CAT Fees must 

file a written application with the 

Company within 15 business days after 

being notified of such disputed CAT 

Fees.28 The application must identify 

the disputed CAT Fees, state the 

specific reasons why the applicant takes 

exception to such CAT Fees, and set 

forth the relief sought.29 In addition, if 

the applicant intends to submit any 

additional documents, statements, 

arguments or other material in support 

of the application, the same should be 

so stated and identified under the Fee 

Dispute Resolution Procedures.30

The Participants state that the 

Company will refer applications for 

hearing and review promptly to the Fee 

Review Subcommittee designated by the 

Operating Committee with 

responsibility for conducting the 

reviews of CAT Fee disputes pursuant 

to these Fee Dispute Resolution 

Procedures.31 The proposals note that 

the Fee Review Subcommittee will keep 

a record of the proceedings.32

The proposals further specify that the 

Fee Review Subcommittee will hold 

hearings promptly and will set a hearing 

date.33 Under the proposed rule 

changes, the parties to the hearing shall 

furnish the Fee Review Subcommittee 

with all materials relevant to the 

proceedings at least 72 hours prior to 

the hearing, and each party will have 

the right to inspect and copy the other 

party’s materials prior to the hearing.34

The Participants state that the parties 

to the hearing will consist of the 

applicant and a representative of the 

Company who shall present the reasons 

for the action taken by the Company 

that allegedly aggrieved the applicant.35

The applicant is entitled to be 

accompanied, represented and advised 

by counsel at all stages of the 

proceedings under the proposed rule 

changes.36

The proposals further indicate that 

the Fee Review Subcommittee will 

determine all questions concerning the 

admissibility of evidence and will 

otherwise regulate the conduct of the 

hearing.37 Each of the parties will be 

permitted, under the proposed rule 

changes, to make an opening statement, 

present witnesses and documentary 

evidence, cross examine opposing 

witnesses and present closing 

arguments orally or in writing as 

determined by the Fee Review 

Subcommittee.38 In addition, the Fee 

Review Subcommittee will have the 

right to question all parties and 

witnesses to the proceeding.39 The 

proposals require the Fee Review 

Subcommittee to keep a record of the 

hearing, to set forth its decision in 

writing, and to send the written 

decision to the parties to the 

proceeding.40 Such decisions must 

contain the reasons supporting the 

conclusions of the Fee Review 

Subcommittee under the proposed rule 

changes.41

The Participants state that the 

decision of the Fee Review 

Subcommittee will be subject to review 

by the Operating Committee either on 

its own motion within 20 business days 

after issuance of the decision or upon 

written request submitted by the 

applicant within 15 business days after 

issuance of the decision.42 The 

applicant’s petition for review must be 

in writing and must specify the findings 

and conclusions to which the applicant 

objects, together with the reasons for 

such objections.43 According to the 

proposed rule changes, any objection to 

a decision not specified in writing will 

be considered to have been abandoned 

and may be disregarded.44 The 

proposed rule changes allow parties to 

petition to submit a written argument to 

the Operating Committee and to request 

an opportunity to make an oral 

argument before the Operating 


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45See, e.g., id. 

46See, e.g., id. 

47See, e.g., id. 

48See, e.g., id. 

49See, e.g., id. 

50See, e.g., id. 

51See, e.g., id. 

52See, e.g., id. 

53See, e.g., id. The Participants clarify that the 

Industry Member may only withhold any invoiced 

CAT Fees that the Industry Member has disputed; 

under the proposed rule changes, the Industry 

Member must pay any invoiced CAT Fees that are 

not disputed when such fees are due, as set forth 

in the invoice. See, e.g., id. 

54See, e.g., id. at 28542–43. 

55 In approving these proposed rule changes, the 

Commission has considered the proposed rules’ 

impact on efficiency, competition, and capital 

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

56 15 U.S.C. 78f(b)(5). 

57 15 U.S.C. 78f(b)(8). 

58 15 U.S.C. 78f(b). 

59 15 U.S.C. 78f(b)(5). 

60 15 U.S.C. 78f(b)(5). 

61The Commission previously approved the CAT 

NMS Plan. See supra note 23. 

62 17 CFR 200.30–3(a)(12). 

Committee.45 The Operating Committee 

will then have sole discretion to grant 

or deny either request.46

Under the proposed rule changes, any 

review conducted by the Operating 

Committee will be made upon the 

record and will be made after such 

further proceedings, if any, as the 

Operating Committee may order.47

Based upon such record, the Operating 

Committee may affirm, reverse or 

modify, in whole or in part, the decision 

of the Fee Review Subcommittee.48 The 

Participants state that the decision of 

the Operating Committee will be in 

writing, will be sent to the parties to the 

proceeding, and will be final.49

A final decision regarding the 

disputed CAT Fees by the Operating 

Committee, or the Fee Review 

Subcommittee (if there is no review by 

the Operating Committee), must be 

provided within 90 days of the date on 

which the Industry Member filed a 

written application regarding disputed 

CAT Fees with the Company.50 The 

proposed rule changes indicate, 

however, that the Operating Committee 

may extend the 90-day time limit at its 

discretion.51 The Fee Dispute 

Resolution Procedures also state that 

any time limits for the submission of 

answers, petitions or other materials 

may be extended by permission of the 

Operating Committee.52

Finally, the Participants state that an 

Industry Member that files a written 

application with the Company disputing 

CAT Fees in accordance with the Fee 

Dispute Resolution Procedures is not 

required to pay such CAT Fees until the 

dispute is resolved in accordance with 

the Procedures, including any review by 

the Commission or in any other 

appropriate forum.53 The Participants 

state that, if it is determined that the 

Industry Member owes any of the 

disputed CAT Fees, then the Industry 

Member must pay such disputed CAT 

Fees that are owed as well as interest on 

such disputed CAT Fees from the 

original due date until such disputed 

CAT Fees are paid at a per annum rate 

equal to the lesser of (i) the Prime Rate 

plus 300 basis points, or (ii) the 

maximum rate permitted by applicable 

law.54

III. Discussion and Commission 

Findings 

After carefully considering the 

proposed rule changes, the Commission 

finds that the proposals, as modified by 

the Amendments, are consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to national securities 

exchanges.55 Specifically, the 

Commission finds that the proposed 

rule changes are consistent with Section 

6(b)(5) 56 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, and 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers or dealers. In addition, 

the Commission finds that the proposed 

rule changes are consistent with Section 

6(b)(8) 57 of the Act, which requires that 

the rules of a national securities 

exchange not impose any burden on 

competition that is not necessary or 

appropriate. 

The Commission believes that the 

proposals are consistent with Section 

6(b) 58 of the Act in general, and furthers 

the objectives of Section 6(b)(5) 59 of the 

Act 60 in particular, because they are 

designed 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, by providing a uniform 

mechanism by which Industry Members 

may dispute CAT Fees and receive a 

timely review of such disputes. The 

Commission notes that the Fee Dispute 

Resolution Procedures provide for a 

hearing before the Fee Review 

Subcommittee, and if the Industry 

Member is not satisfied with the 

decision of the Fee Review 

Subcommittee, it may request a review 

of the decision by the Operating 

Committee. Further, the proposals 

provide that, although the decisions of 

the Operating Committee or Fee Review 

Subcommittee are binding on an 

Industry Member, the Industry Member 

may seek redress from the Commission 

or in any other appropriate forum. 

The Commission also notes that the 

proposals implement Section 11.5 of the 

CAT NMS Plan.61 Specifically, Section 

11.5 states that the Participants will 

adopt rules requiring that disputes with 

respect to fees charged to Industry 

Members pursuant to Article XI of the 

CAT NMS Plan be determined by the 

Operating Committee or a designated 

Subcommittee. Section 11.5 further 

provides that such fee disputes will be 

determined by the Operating Committee 

or a designated Subcommittee, and that 

decisions on such matters will be 

binding on Industry Members without 

prejudice to the rights of any Industry 

Member to seek redress from the 

Commission pursuant to Rule 608 of 

Regulation NMS or in any other 

appropriate forum. 

IV. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule changes (SR–BatsBYX– 

2017–13; SR–BatsBZX–2017–39; SR– 

BatsEDGA–2017–14; SR–BatsEDGX– 

2017–24; SR–BOX–2017–19; SR–CBOE– 

2017–043; SR–IEX–2017–21; SR–ISE– 

2017–52; SR–MRX–2017–08; SR– 

MIAX–2017–24; SR–NASDAQ–2017– 

059; SR–BX–2017–029; SR–GEMX– 

2017–24; SR–PHLX–2017–47; SR– 

NYSE–2017–24; SR–NYSEArca–2017– 

60; SR–NYSEMKT–2017–31), as 

modified by the Amendments, are 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.62

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18794 Filed 9–5–17; 8:45 am] 

BILLING CODE 8011–01–P 


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