Document ID: SEC-2020-0390-0001
Agency: sec
Document Type: Notice
Title: Joint Industry Plan; Order Approving Forty-Fifth Amendment 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
Posted Date: 2020-03-19T04:00Z

[Federal Register Volume 85, Number 54 (Thursday, March 19, 2020)]
[Notices]
[Pages 15843-15844]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05704]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88385; File No. S7-24-89]

Joint Industry Plan; Order Approving Forty-Fifth Amendment 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

March 13, 2020.

I. Introduction

    On September 11, 2019, participants \1\ of 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 (``Nasdaq/UTP Plan'' or ``Plan'') filed \2\ with the Securities 
and Exchange Commission (``SEC'' or ``Commission'') pursuant to Section 
11A of the Securities Exchange Act of 1934 (``Act'') \3\ and Rule 608 
of Regulation NMS thereunder,\4\ a proposal to amend the Nasdaq/UTP 
Plan.\5\ This amendment represents the Forty-Fifth Amendment to the 
Plan (``Amendment''). The Participants have proposed to resolve textual 
inconsistencies in Plan provisions governing the dissemination of last-
sale price reports by the Processor \6\ during a Regulatory Halt.\7\ 
The Amendment was published for comment in the Federal Register on 
January 28, 2020.\8\ One comment letter was received.\9\ This order 
approves the Amendment to the Plan.
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    \1\ These participants are: Cboe BYX Exchange, Inc.; Cboe BZX 
Exchange, Inc.; Cboe EDGA Exchange, Inc.; Cboe EDGX Exchange, Inc.; 
Cboe Exchange, Inc.; Financial Industry Regulatory Authority, Inc.; 
The Investors' Exchange LLC; Long-Term Stock Exchange, Inc.; Nasdaq 
BX, Inc.; Nasdaq ISE, LLC; Nasdaq PHLX, Inc.; The Nasdaq Stock 
Market LLC; New York Stock Exchange LLC; NYSE American LLC; NYSE 
Arca, Inc.; NYSE Chicago, Inc.; and NYSE National, Inc. (each a 
``Participant'' and collectively, the ``Participants'').
    \2\ See Letter from Robert Books, Chairman, Operating Committee, 
UTP Plan, to Vanessa Countryman, Secretary, Commission (dated 
September 6, 2019).
    \3\ 15 U.S.C 78k-1(a)(3).
    \4\ 17 CFR 242.608.
    \5\ The Nasdaq/UTP Plan, which governs the collection, 
processing, and dissemination on a consolidated basis of quotation 
information and transaction reports in Eligible Securities is a 
``transaction reporting plan'' under Rule 601 of Regulation NMS, 17 
CFR 242.601, and a ``national market system plan'' under Rule 608 of 
Regulation NMS, 17 CFR 242.608. See Securities Exchange Act Release 
No. 55647 (April 19, 2007), 72 FR at 20891 (April 26, 2007).
    \6\ See Section III.Q of the Plan (defining ``Processor'').
    \7\ See Section III.S of the Plan (defining ``Regulatory 
Halt'').
    \8\ See Securities Exchange Act Release No. 88017 (January 23, 
2020), 85 FR at 5062 (January 28, 2020).
    \9\ See Letter from Kelvin To, Founder and President, Data 
Boiler Technologies LLC, to Vanessa Countryman, Secretary, 
Commission (dated February 4, 2020). The comment letter is not 
germane to the Amendment.
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II. Description of the Proposal

    The Plan currently includes inconsistent language with respect to 
the Processor's ability to disseminate last-sale price reports during a 
Regulatory Halt. Section X.A of the Plan prohibits the Processor from 
including in the consolidated tape during a Regulatory Halt any last-
sale reports. Section X.C, however, includes language that specifically 
permits the Processor to ``collect and disseminate Transaction 
Information'' during a Regulatory Halt.
    The Participants have stated that, in practice, the Processor has 
been following Section X.C during Regulatory Halts and will immediately 
disseminate last-sale price reports during a Regulatory Halt. The 
Participants believe that the Processor's current practice helps to 
reduce inefficiencies and confusion among market participants with 
respect to the operation of the Plan during ``race conditions,'' when 
it might be unclear whether the trade reported by the Participant 
occurred before or after the Participant had received notice of the 
Regulatory Halt. As a result, the Participants have determined it 
appropriate to amend the language of the Plan to resolve the 
inconsistent language described above in order to confirm that the 
Processor may continue to disseminate last-sale price reports during a 
Regulatory Halt. In addition, the Amendment would align the Plan 
language with a corresponding amendment being proposed by the CTA 
Plan.\10\
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    \10\ See Securities Exchange Act Release No. 88016 (January 23, 
2020), 85 FR at 5060 (January 28, 2020) (proposal to amend CTA 
Plan).
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III. Discussion

    After careful review, the Commission finds that the Amendment is 
consistent with the requirements of the Act and the rules and 
regulations thereunder.\11\ In particular, the Commission finds that 
the amendment is consistent with Section 11A of the Act which provides, 
among other things, that the Commission may prescribe rules as

[[Page 15844]]

necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act to 
assure the prompt, accurate, reliable, and fair collection, processing, 
distribution, and publication of information with respect to quotations 
for and transactions in securities and the fairness and usefulness of 
the form and content of such information.\12\ The Commission also finds 
that the Amendment is consistent with Rule 608 of Regulation NMS, which 
provides that the Commission shall approve an amendment to a Plan if it 
finds that such plan or amendment is necessary or appropriate in the 
public interest, for the protection of investors and the maintenance of 
fair and orderly markets, to remove impediments to, and perfect the 
mechanisms of, a national market system, or otherwise in furtherance of 
the purposes of the Act.\13\
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    \11\ The Commission has considered the Amendment's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \12\ See 15 U.S.C. 78k-1(c)(1)(B).
    \13\ See 17 CFR 240.608(b)(2).
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    The Commission believes that the Amendment furthers these goals by 
eliminating any potential uncertainty in determining whether a trade 
reported to the Processor during race conditions occurred before or 
after the Participant who reported the trade had received notice of a 
Regulatory Halt. Under the Amendment, the Processor could presume that 
any such trades occurred before the Regulatory Halt, thereby allowing 
the Processor to continue publishing those trade reports to the 
consolidated tape. The Commission believes that market observers could 
derive benefits from continuing to learn about trades occurring just 
before a Regulatory Halt.
    The Commission notes that it is also approving today a similar 
proposal by the CTA Plan Participants to eliminate an ambiguity in that 
Plan regarding how the Processor handles last-sale price reports during 
a Regulatory Halt.\14\ As a result, both Plans will have uniform 
provisions regarding how the Processor handles last-sale price reports 
during race conditions. The Commission believes that approving these 
two Plan amendments furthers the principle set forth in Section 11A of 
the Act that ``[t]he linking of all markets for qualified securities 
through communication and data processing facilities will foster 
efficiency, enhance competition, increase the information available to 
brokers, dealers, and investors, facilitate the offsetting of 
investors' orders, and contribute to best execution of such orders'' 
\15\ by harmonizing across the entire national market system how last-
sale price reports for all NMS stocks are printed to the consolidated 
tape during race conditions and by eliminating any ambiguity in the 
duties of the Plan Processors in this regard.
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    \14\ See Securities Exchange Act Release No. 88384 (March 13, 
2020) (File No. SR-CTA-2019-02).
    \15\ 15 U.S.C. 78k-1(a)(1)(D).
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VI. Conclusion

    It is therefore ordered, pursuant to Section 11A of the Act \16\ 
and the rules thereunder, that the Amendment to the Nasdaq/UTP Plan 
(File No. S7-24-89) is approved.
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    \16\ 15 U.S.C. 78k-1.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(29).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-05704 Filed 3-18-20; 8:45 am]
BILLING CODE 8011-01-P