Document ID: SEC-2014-1686-0001
Agency: sec
Document Type: Notice
Title: Joint Industry Plans: BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Inc., et al.
Posted Date: 2014-10-06T04:00Z

[Federal Register Volume 79, Number 193 (Monday, October 6, 2014)]
[Notices]
[Pages 60203-60205]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-23655]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73239; File No. S7-24-89]

Joint Industry Plan; Notice of Filing of Amendment No. 32 to the 
Joint Self-Regulatory Organization Plan Governing the Collection, 
Consolidation and Dissemination of Quotation and Transaction 
Information for Nasdaq-Listed Securities Traded on Exchanges on an 
Unlisted Trading Privileges Basis Submitted by the BATS Exchange, Inc., 
BATS Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated, 
Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., 
Financial Industry Regulatory Authority, Inc., International Securities 
Exchange LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX, Inc., Nasdaq Stock 
Market LLC, National Stock Exchange, Inc., New York Stock Exchange LLC, 
NYSE Arca, Inc. and NYSE MKT, LLC

September 26, 2014.
    Pursuant to Rule 608 of the Securities Exchange Act of 1934 
(``Act'') \1\ notice is hereby given that on September 12, 2014, the 
Chicago Board Options Exchange, Incorporated, on behalf of Participants 
\2\ in the Joint Self-Regulatory Organization Plan Governing the 
Collection, Consolidation, and Dissemination of Quotation and 
Transaction Information for Nasdaq-Listed Securities Traded on 
Exchanges on an Unlisted Trading Privilege Basis (``Nasdaq/UTP Plan'' 
or ``Plan'') filed with the Securities and Exchange Commission 
(``Commission'') an amendment to the Plan.\3\ This amendment represents 
Amendment No. 32 to the Plan and reflects changes unanimously adopted 
by the Plan's Participants. The amendment proposes to change certain of 
the voting requirements under the Plan. The Commission is publishing 
this notice to solicit comments from interested persons on the proposed 
Amendment.
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    \1\ 17 CFR 242.608.
    \2\ The Plan Participants (collectively, ``Participants'') are 
the: BATS Exchange, Inc. (``BATS''); BATS Y-Exchange, Inc.(``BATS 
Y''); Chicago Board Options Exchange, Incorporated (``CBOE''); 
Chicago Stock Exchange, Inc. (``CHX''); EDGA Exchange, Inc. 
(``EDGA''); EDGX Exchange, Inc. (``EDGX''); Financial Industry 
Regulatory Authority, Inc. (``FINRA''); International Securities 
Exchange LLC (``ISE''); NASDAQ OMX BX, Inc. (``BX''); NASDAQ OMX 
PHLX, Inc. (``PHLX''); Nasdaq Stock Market LLC (``Nasdaq''); 
National Stock Exchange, Inc. (``NSX''); New York Stock Exchange LLC 
(``NYSE''); NYSE Arca, Inc. (``NYSEArca''); and NYSE MKT LLC.
    \3\ The Plan governs the collection, processing, and 
dissemination on a consolidated basis of quotation information and 
transaction reports in Eligible Securities for each of its 
Participants. This consolidated information informs investors of the 
current quotation and recent trade prices of Nasdaq securities. It 
enables investors to ascertain from one data source the current 
prices in all the markets trading Nasdaq securities. The Plan serves 
as the required transaction reporting plan for its Participants, 
which is a prerequisite for their trading Eligible Securities. See 
Securities Exchange Act Release No. 55647 (April 19, 2007) 72 FR 
20891 (April 26, 2007).
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A. Rule 608(a)

1. Purpose of the Amendment

    The amendment proposes to change certain of the voting requirements 
under the Plan. The changes seek to harmonize voting requirements under 
the Plan with voting requirements under the CTA Plan and the CQ Plan. 
The Participants understand that the Participants under the CTA Plan 
and the CQ Plan intend to submit certain changes to the voting 
requirements under those plans to cause them to harmonize with voting 
under the Nasdaq/UTP Plan.
    The voting requirements that this amendment seeks to revise include 
the following:
     To change the voting requirement needed to eliminate an 
existing fee, or to reduce an existing fee, from unanimity to the 
affirmative vote of two-thirds of all Participants entitled to vote;
     to change the voting requirement needed to request system 
changes other than those related to the processor function from a 
unanimous vote to the affirmative vote of a majority of all 
Participants entitled to vote;
     to change the voting requirement needed to approve 
procedures for selecting a successor processor from unanimity to the 
affirmative vote of two-thirds of all Participants entitled to vote;
     to establish that selecting a new processor requires the 
affirmative vote of two-thirds of all Participants entitled to vote;
     to change the voting requirement needed if the Plan does 
not specify another voting requirement from unanimity to the 
affirmative vote of a majority of all Participants entitled to vote.
(a) Fee Setting
    In the Participants' view, a two-thirds vote of the Participants, 
rather than unanimity, is the appropriate voting requirement for the 
Participants to eliminate or reduce an existing fee. The Plan currently 
requires a unanimous vote to eliminate a fee. The change with respect 
to eliminating a fee would harmonize that voting requirement with the 
voting requirements under the CTA and CQ Plans.
    The Plan currently requires a unanimous vote to reduce a fee. The 
CTA and CQ Plans also require unanimity to reduce a fee. However, the 
Participants understand that the Participants under the CTA and CQ 
Plans intend to amend those plans to require a two-thirds vote to 
reduce a fee. In addition, subjecting fee reductions to a two-thirds 
vote would harmonize the Plan with the counterpart requirement under 
the OPRA Plan.
    The Participants note that, after the amendment to the Plan and the 
anticipated amendments to the CTA and CQ Plans, all three plans will 
require a two-thirds vote to add, delete or eliminate a fee or to 
establish a new fee. These changes would provide the Participants with 
greater flexibility in respect of the plan's fee schedule.
(b) System Changes
    The Plan currently requires a majority vote to approve system 
changes related to the processor function, but requires a unanimous 
vote to approve other system changes. The Participants do not believe 
that this anomaly is warranted. Rather, in their view, the Plan should 
subject all system changes to the same voting requirement. They believe 
that that voting requirement should be a majority vote. A majority 
voting requirement rather than unanimity would afford the Participants 
greater flexibility and make it easier for the Participants to arrive 
at decisions regarding necessary system upgrades and changes. The 
Participants note that the CTA Plan, the CQ Plan and the OPRA Plan all 
require a majority

[[Page 60204]]

vote for decisions relating to system changes.
(c) Processor Selection Procedures
    Section V (E) of the Plan sets forth a series of guidelines for the 
Participants to follow in establishing procedures for selecting a new 
processor. That section currently subjects the Participants' approval 
of those procedures to a two-thirds majority vote. In the Participants' 
view, a majority vote of the Participants, rather than a two-thirds 
vote, is the appropriate voting requirement for approval of the 
procedures for selecting a new processor. This vote is only to 
establish the selection procedures. Because the Participants may have 
divergent views on the form that those procedures should take, a 
majority vote makes it easier for the Participants to arrive at a 
decision. The Participants note that the CTA Plan, the CQ Plan and the 
OPRA Plan all require a majority vote for decisions relating to 
procedures for selecting a new processor.
(d) Processor Selection
    The Plan does not currently specify the voting requirement for 
selecting a new processor. Since the Plan is silent, the applicable 
voting requirement would be the requirement that applies to matters for 
which the Plan does not specify a voting requirement. That default 
voting requirement is currently unanimity, but, as discussed above, the 
amendment seeks to change that to a majority vote. The Participants 
believe that a unanimous vote could make it too difficult for the 
Participants to arrive at a decision and that a matter as significant 
as selecting a Plan processor should require more than a simple 
majority vote. In their view, a two-thirds majority vote strikes the 
right balance of requiring a strong consensus without allowing a single 
Participant or a small number of Participants to block the selection of 
a new processor.
(e) Default Voting Requirement
    The Plan currently requires a unanimous vote in respect of any 
matter for which the Plan does not specify a voting requirement. This 
requirement can make it unwieldy for the Participants to act, as all 
Participants do not always agree on every matter. The Participants 
believe that the affirmative vote of a majority of Participants 
provides greater flexibility and facilitates their ability to take 
action under the Plan. They note that the CTA Plan, the CQ Plan and the 
OPRA Plan all require majority votes to act on matters for which those 
plans do not specify a voting requirement.

2. Governing or Constituent Documents

    Not applicable.

3. Implementation of Amendment

    All of the Participants have manifested their approval of the 
proposed amendment by means of their execution of the amendment. The 
Plan amendment would become operational upon approval by the 
Commission.

4. Development and Implementation Phases

    Not applicable.

5. Analysis of Impact on Competition

    The proposed amendment does not impose any burden on competition 
that is not necessary or appropriate in furtherance of the purposes of 
the Exchange Act. The Participants do not believe that the proposed 
plan amendments introduce terms that are unreasonably discriminatory 
for the purposes of Section 11A(c)(1)(D) of the Exchange Act.

6. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan

    Not applicable.

7. Approval by Sponsors in Accordance With Plan

    See Item A(3) above.

8. Description of Operation of Facility Contemplated by the Proposed 
Amendment

    Not applicable.

9. Terms and Conditions of Access

    See Item A(1) above.

10. Method of Determination and Imposition, and Amount of, Fees and 
Charges

    See Item A(1) above.

11. Method and Frequency of Processor Evaluation

    Not applicable.

12. Dispute Resolution

    Not applicable.

B. Rule 601(a)

1. Reporting Requirements

    Not applicable.

2. Manner of Collecting, Processing, Sequencing, Making Available and 
Disseminating Last Sale Information

    Not applicable.

3. Manner of Consolidation

    Not applicable.

4. Standards and Methods Ensuring Promptness, Accuracy and Completeness 
of Transaction Reports

    Not applicable.

5. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

6. Terms of Access to Transaction Reports

    Not applicable.

7. Identification of Marketplace of Execution

    Not Applicable.

III. Solicitation of Comments

    The Commission seeks general comments on Amendment No. 32. 
Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal 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 S7-24-89 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number S7-24-89. 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 Web site (http://www.sec.gov/rules/sro.shtml). Copies of 
the submission, all written statements with respect to the proposed 
Plan amendment that are filed with the Commission, and all written 
communications relating to the proposed Plan amendment between the 
Commission and any person, other than those that may be withheld from 
the

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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 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 Web 
site viewing and printing at the Office of the Secretary of the 
Committee, currently located at the CBOE, 400 S. LaSalle Street, 
Chicago, IL 60605. 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 S7-24-
89 and should be submitted on or before October 27, 2014.
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    \4\ 17 CFR 200.30-3(a)(27).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\4\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-23655 Filed 10-3-14; 8:45 am]
BILLING CODE 8011-01-P