Document ID: SEC-2017-0400-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Financial Industry Regulatory Authority, Inc.
Posted Date: 2017-03-14T04:00Z

[Federal Register Volume 82, Number 48 (Tuesday, March 14, 2017)]
[Notices]
[Pages 13698-13699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-04926]

[[Page 13698]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80179; File No. SR-FINRA-2017-005]

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

March 8, 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 February 23, 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, 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 
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 provides, among other things, that the 
requirement that FINRA make certain data publicly available on the 
FINRA Web site pursuant to Appendix B and C to the Plan shall commence 
at the beginning of the Pilot Period,\6\ and that FINRA shall make data 
for the Pre-Pilot Period publicly available on the FINRA Web site 
pursuant to Appendix B and C to the Plan by February 28, 2017.\7\
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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\ On November 30, 2016, the SEC granted exemptive relief to 
the Participants to, among other things, delay the publication of 
Web site data pursuant to Appendices B and C to the Plan until 
February 28, 2017, and to delay the ongoing Web site publication by 
ninety days such that data would be published within 120 calendar 
days following the end of the month. See Letter from David S. 
Shillman, Associate Director, Division of Trading and Markets, 
Commission, to Marcia E. Asquith, Senior Vice President and 
Corporate Secretary, FINRA, dated November 30, 2016; see also 
Securities Exchange Act Release No. 79424 (November 29, 2016), 81 FR 
87603 (December 5, 2016) (Notice of Filing and Immediate 
Effectiveness of File No. SR-FINRA-2016-042).
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    FINRA is proposing amendments to Rule 6191.12 to delay the date by 
which Pre-Pilot and Pilot Appendix B data is to be made publicly 
available on FINRA's Web site from February 28, 2017, until April 28, 
2017.\8\ Appendix C data for the Pre-Pilot Period through the month of 
January 2017 will be published on the FINRA Web site on February 28, 
2017, and, thereafter, on the original 30-day schedule. Thus, FINRA is 
proposing an amendment to Rule 6191(b)(4)(B) to provide that Appendix C 
data will be published on the FINRA Web site within 30 calendar days, 
rather than 120 calendar days, following month end at no charge and 
that FINRA shall not identify the Market Makers that generated the data 
or the individual securities.
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    \8\ In addition, FINRA is proposing an amendment to Rule 
6191(a)(6)(B) to clarify that no member, irrespective of whether 
that member operates a trading center, may execute orders in any 
Pilot Security in Test Group Three in price increments other than 
$0.05, unless an exception applies. This proposed amendment makes 
the rule consistent with the Plan and conforms subparagraph 
(a)(6)(B) with subparagraph (a)(5)(B).
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    In the SRO Tick Size Plan Proposal, the Participants stated that 
the public data will be made available for free ``on a disaggregated 
basis by trading center'' on the Web sites of the Participants and the 
Designated Examining Authorities.\9\ However, market participants have 
expressed confidentiality concerns regarding this approach for over-
the-counter (``OTC'') data.\10\ Thus, FINRA is filing the instant 
proposed rule change to provide additional time to assess a means of 
addressing the confidentiality concerns raised in connection with the 
publication of Appendix B data related to OTC activity in furtherance 
of the objectives of the Plan.\11\ Pursuant to this amendment, Appendix 
B data publication will be delayed until April 28, 2017. FINRA 
anticipates filing an additional proposed rule change in the near 
future to address the data confidentiality issues raised regarding 
Appendix B data publication.
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    \9\ See Securities Exchange Act Release No. 73511 (November 3, 
2014), 79 FR 66423 (November 7, 2014) (Notice of Filing of Proposed 
National Market System Plan to Implement a Tick Size Pilot Program 
on a One-Year Pilot Basis, File No. 4-657) (``Tick Size Plan 
Proposal'').
    \10\ See letters from Adam C. Cooper, Senior Managing Director 
and Chief Legal Officer, Citadel Securities, to Brent J. Fields, 
Secretary, Commission, dated December 21, 2016 (``Citadel letter''); 
and William Hebert, Managing Director, Financial Information Forum, 
to Robert W. Errett, Deputy Secretary, Commission, dated December 
21, 2016 (``FIF letter'').
    \11\ 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,\12\ 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

[[Page 13699]]

the Act,\13\ which requires that FINRA rules not impose any burden on 
competition that is not necessary or appropriate.
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    \12\ 15 U.S.C. 78o-3(b)(6).
    \13\ 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 assess a means of addressing the 
confidentiality concerns raised in connection with the publication of 
Appendix B data, to comply with the Plan's requirements that the data 
made publicly available will not identify the trading center that 
generated the 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 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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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 February 28, 2017.
    FINRA notes that the proposed rule change is intended to address 
confidentiality concerns raised in connection with the publication of 
OTC Appendix B data by permitting FINRA to delay Web site publication 
of Appendix B data from February 28, 2017 to April 28, 2017.\16\ FINRA 
notes that the delay would provide it with additional time to assess 
and file a proposed rule change to address the confidentiality 
concerns.
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    \16\ See supra note 10.
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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 allow FINRA to delay publication of Appendix B data 
until April 28, 2017. As noted above, commenters continue to raise 
concerns about the publication of OTC Appendix B data. The Commission 
notes that FINRA has filed a proposed rule change that is intended to 
mitigate confidentiality concerns raised by commenters regarding the 
publication of Appendix B data.\17\ Delaying publication of Appendix B 
data will provide the Commission and the public with time to consider 
this proposed rule change. Therefore, the Commission hereby waives the 
30-day operative delay and designates the proposed rule change to be 
operative on February 28, 2017.\18\
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    \17\ See SR-FINRA-2017-006.
    \18\ 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-2017-005 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-FINRA-2017-005. 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 
a.m. and 3 p.m. Copies of such 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-2017-005 and should be 
submitted on or before April 4, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
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    \19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-04926 Filed 3-13-17; 8:45 am]
BILLING CODE 8011-01-P