Document ID: SEC-2017-0783-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2017-05-16T04:00Z

[Federal Register Volume 82, Number 93 (Tuesday, May 16, 2017)]
[Notices]
[Pages 22589-22590]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09818]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80646; File No. SR-FINRA-2017-010]

Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change To Amend FINRA Rule 6191 To Modify the Date of 
Appendix B Web Site Data Publication Pursuant to the Regulation NMS 
Plan To Implement a Tick Size Pilot Program

May 10, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 28, 2017, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by FINRA. FINRA has designated 
the proposed rule change as constituting a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which 
renders the proposal effective upon receipt of this filing by the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend Rule 6191 to modify the date of 
Appendix B Web site data publication pursuant to the Regulation NMS 
Plan to Implement a Tick Size Pilot Program (``Plan'').
    The text of the proposed rule change is available on FINRA's Web 
site at http://www.finra.org, at the principal office of FINRA and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, FINRA included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. FINRA has prepared summaries, set forth in sections A, 
B, and C below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Rule 6191(b) (Compliance with Data Collection Requirements) \4\ 
implements the data collection and Web site publication requirements of 
the Plan.\5\ Rule 6191.12 currently provides, among other things, that 
the requirement that FINRA make certain data for the Pre-Pilot Period 
and Pilot Period \6\ publicly available on the FINRA Web site pursuant 
to Appendix B to the Plan shall commence on April 28, 2017.\7\ FINRA is 
proposing to amend Rule 6191.12 to delay the Appendix B data Web site 
publication date until August 31, 2017. FINRA is proposing to further 
delay the Web site publication of Appendix B data until August 31, 2017 
to permit additional time to consider a methodology to mitigate 
concerns raised in connection with the publication of Appendix B 
data.\8\
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    \4\ See FINRA Rule 6191. See also Securities Exchange Act 
Release No. 76484 (November 19, 2015), 80 FR 73858 (November 25, 
2015) (Notice of Filing of File No. SR-FINRA-2015-048); and 
Securities Exchange Act Release No. 77164 (February 17, 2016), 81 FR 
9043 (February 23, 2016) (Notice of Filing of Partial Amendment No. 
1 and Order Granting Accelerated Approval of File No. SR-FINRA-2015-
048).
    \5\ The Participants filed the Plan to comply with an order 
issued by the Commission on June 24, 2014. See Letter from Brendon 
J. Weiss, Vice President, Intercontinental Exchange, Inc., to 
Secretary, Commission, dated August 25, 2014 (``SRO Tick Size Plan 
Proposal''). See Securities Exchange Act Release No. 72460 (June 24, 
2014), 79 FR 36840 (June 30, 2014); see also Securities Exchange Act 
Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015).
    \6\ Unless otherwise defined herein, capitalized terms have the 
meaning ascribed to them in Rule 6191.
    \7\ See FINRA Rule 6191.12. See also Securities Exchange Act 
Release No. 80179 (March 8, 2017), 82 FR 13698 (March 14, 2017) 
(Notice of Filing and Immediate Effectiveness of File No. SR-FINRA-
2017-005). See also Letter from David S. Shillman, Associate 
Director, Division of Trading and Markets, Commission, to Robert 
L.D. Colby, Executive Vice President and Chief Legal Officer, FINRA, 
dated February 28, 2017.
    \8\ On March 3, 2017, FINRA filed a proposed rule change to 
implement an anonymous, grouped masking methodology for Appendix 
B.I, B.II. and B.IV. data. The comment period ended on April 5, 
2017, and the Commission received three comment letters. See 
Securities Exchange Act Release No. 80193 (March 9, 2017) 82 FR 
13901 (March 15, 2017) (Notice of Filing of File No. SR-FINRA-2017-
006).
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    Pursuant to this proposed amendment, FINRA would publish the 
required Appendix B data for the Pre-Pilot Period through April 30, 
2017, by August 31, 2017. Thereafter, Appendix B data for a given month 
would be published within 120 calendar days following month end.\9\ 
Thus, for example, Appendix B data for May 2017 would be made available 
on the FINRA Web site by September 28, 2017, and data for the month of 
June 2017 would be made available on the FINRA Web site by October 28, 
2017.
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    \9\ FINRA also is submitting an exemptive request to the SEC in 
connection with the instant filing.
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    FINRA has filed the proposed rule change for immediate 
effectiveness. The operative date of the proposed rule change will be 
the date of filing.
2. Statutory Basis
    FINRA believes that the proposed rule change is consistent with the 
provisions of Section 15A(b)(6) of the Act,\10\ which requires, among 
other things, that FINRA rules must be designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest, and Section 15A(b)(9) of the Act,\11\ which requires 
that FINRA rules not impose any burden on competition that is not 
necessary or appropriate.
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    \10\ 15 U.S.C. 78o-3(b)(6).
    \11\ 15 U.S.C. 78o-3(b)(9).
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    The Plan is designed to allow the Commission, market participants, 
and the public to study and assess the impact of increment conventions 
on the liquidity and trading of the common stock of small-
capitalization companies. FINRA believes that this proposal is 
consistent with the Act because it is in furtherance of the objectives 
of Section VII(A) of the Plan in that it is designed to provide FINRA 
with additional time to consider a methodology to mitigate concerns 
raised in connection with the publication of Appendix B data.

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance

[[Page 22590]]

of the purposes of the Act. FINRA notes that the proposed rule change 
implements the provisions of the Plan.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19(b)-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii), the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. FINRA has filed the 
proposed rule change for immediate effectiveness and has requested that 
the Commission waive the requirement that the proposed rule change not 
become operative for 30 days after the date of the filing so that it 
may become operative on the date of filing.
    FINRA notes that the proposed rule change is intended to mitigate 
confidentiality concerns raised in connection with Section VII(A) of 
the Plan, which provides that the data made publicly available will not 
identify the Trading Center that generated the data. FINRA states that 
the additional time would allow consideration of a methodology to 
mitigate concerns related to the publication of Appendix B data.\14\
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    \14\ The Commission recently approved a FINRA proposal to 
implement an aggregated, anonymous grouped masking methodology for 
the publication of Appendix B data related to OTC trading activity. 
See Securities Exchange Release No. 80551, (April 28, 2017), 82 FR 
20948 (May 4, 2017). See also Letter from David S. Shillman, 
Associate Director, Division of Trading and Markets, Commission, to 
Marcia E. Asquith, Executive Vice President FINRA, dated April 28, 
2017.
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    The commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it will provide FINRA with additional time to develop the 
necessary systems changes to implement the anonymous, grouped masking 
methodology for Appendix B data related to OTC trading activity.\15\ 
Therefore, the Commission hereby waives the 30-day operative delay and 
designates the proposed rule change to be operative on the date of 
filing.\16\
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    \15\ The Commission recently granted exemptive relief to the 
Participants to delay the publication of their Appendix B data until 
August 31, 2017. See Letter from David S. Shillman, Associate 
Director, Division of Trading and Markets, Commission, to Jennifer 
Piorko Mitchell, Vice President and Deputy Corporate Secretary, 
FINRA, dated April 28, 2017. The Commission notes that other 
Participants have submitted proposed rule changes to delay the 
publication of Appendix B data until August 31, 2017. See e.g., SR-
BatsBYX-2017-10; SR-BatsBZX-2017-31; SR-BatsEDGA-2017-10; SR-
BatsEDGX-2017-19; SR-BX-2017-022; SR-CHX-2017-07; SR-IEX-2017-12; 
SR-NASDAQ-2017-044; SR-Phlx-2017-33; SR-NYSE-2017-19; SR-NYSEArca-
2017-49; SR-NYSEMKT-2017-24.
    \16\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 to 
determine whether the proposed rule 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-FINRA-2017-010 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2017-010. 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 FINRA. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-FINRA-2017-010 and should be 
submitted on or before June 6, 2017.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09818 Filed 5-15-17; 8:45 am]
 BILLING CODE 8011-01-P