Document ID: SEC-2015-1144-0001
Agency: sec
Document Type: Notice
Title: Consolidated Tape Association: Twenty Third Substantive Amendment to the Second Restatement of the Consolidated Tape Association Plan
Posted Date: 2015-07-10T04:00Z

[Federal Register Volume 80, Number 132 (Friday, July 10, 2015)]
[Notices]
[Pages 39821-39823]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-16837]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-75363; File No. SR-CTA-2015-02]

Consolidated Tape Association; Notice of Filing of the Twenty 
Third Substantive Amendment to the Second Restatement of the CTA Plan

July 6, 2015.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on June 19, 2015, certain participants (``Approving Participants'') \3\ 
in the Second Restatement of the Consolidated Tape Association Plan 
(``CTA Plan'' or ``Plan'') filed with the Securities and Exchange 
Commission (``Commission'') a proposal to amend the Plan.\4\ The

[[Page 39822]]

amendment represents the 23rd Substantive Amendment (``Amendment'') to 
the CTA Plan.\5\ The Amendment proposes to establish a fee that will be 
charged to a vendor or other data redistributor that fails to comply 
with the CTA Plan participants' Consolidated Volume display statement, 
and related requirements. The non-compliance charge seeks to provide 
incentives for data redistributors to comply with the participants' 
consolidated volume requirements.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ More than two-thirds of the CTA Plan participants approved 
the amendment. The Approving Participants are: 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, National Stock Exchange, New York Stock 
Exchange LLC, NYSE MKT LLC, and NYSE Arca, Inc. NASDAQ OMX BX, Inc., 
NASDAQ OMX PHLX, Inc., and the Nasdaq Stock Market LLC are also CTA 
Plan participants (``participants'').
    \4\ See Securities Exchange Act Release Nos. 10787 (May 10, 
1974), 39 FR 17799 (May 20, 1974) (declaring the CTA Plan 
effective). The most recent restatement of the Plan was in 1995. The 
CTA Plan, pursuant to which markets collect and disseminate last 
sale price information for non-NASDAQ listed securities, is a 
``transaction reporting plan'' under Rule 601 under the Act, 17 CFR 
242.601, and a ``national market system plan'' under Rule 608 under 
the Act, 17 CFR 242.608.
    \5\ The Amendment was originally submitted on an immediately 
effective basis pursuant to Rule 608(b)(3)(i) under Regulation NMS. 
See Letter from Emily Kasparov, Chairman, CTA Plan Operating 
Committee to Brent J. Fields, Secretary, Commission, dated May 18, 
2015. On June 19, 2015, the Approving Participants filed a letter to 
indicate the proposal should be considered under Rule 608(b)(1) and 
Rule 608(b)(2) of Regulation NMS. As a result, the Amendment must be 
approved by the Commission. See Letter from Emily Kasparov, 
Chairman, CTA Plan Operating Committee to Brent J. Fields, 
Secretary, Commission, dated June 17, 2015. The Amendment was 
designated as the Twenty Second Charges Amendment to the Plan. The 
Commission notes that the proposal is the Twenty Third Substantive 
Amendment to the Plan.
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    The Commission is publishing this notice to solicit comments from 
interested persons on the proposed Amendment.

I. Rule 608(a)

A. Purpose of the Amendment

    Historically, the Plan participants have not applied device fees to 
devices that receive consolidated volume (i.e., aggregate volume for 
trades taking place on all market centers under the Plan) in displays 
that do not also include CTA Plan prices or CQ Plan quotation 
information. The participants do not plan to change this policy.
    However, some data redistributors include consolidated volume in 
displays of unconsolidated last sale prices and/or unconsolidated bid-
asked quotes, such as displays of one exchange's trade prices and 
quotes.
    Such displays, whether displayed internally or externally, could 
mislead investors in respect of the nature of the information they are 
viewing. A significant number of data users receive proprietary trade 
prices and quotes. Unless the data users understand the content being 
displayed, they could mistakenly think that they are seeing 
consolidated trades and quotes because they see consolidated volume 
without any explanation.
    To make the displays transparent and less likely to mislead, the 
Approving Participants have determined to require data redistributors 
that include consolidated volume in displays of unconsolidated prices 
and quotes to incorporate into those displays the following statement 
(or a close iteration of the statement that the network 
administrator(s) have approved): ``Realtime quote and/or trade prices 
are not sourced from all markets.''
    A data redistributor must also assure that any person included in 
the redistribution chain starting with the data redistributor places 
the statement in any such display that it provides. The statement must 
be clearly visible to the end users so that they understand the 
differences in the data sources.
    In addition, data redistributors need to assure that they, and any 
person or entity included in the redistribution chain starting with 
them, clearly incorporate the display statement into any advertisement, 
sales literature or other material displaying CTA Consolidated Volume 
alongside unconsolidated prices or quotes.
    These requirements apply to both real-time and delayed displays of 
consolidated volume.
    In order to ensure compliance with these requirements, the 
participants will require all recipients of the CTA last sale price 
datafeed (whether directly or indirectly) to submit a declaration. The 
participants will require those firms that include consolidated volume 
in displays of unconsolidated prices and quotes to submit to NYSE a 
screen print of the displays, showing the display statement. As this is 
a new requirement, the CTA Administrator will work with firms to 
facilitate their compliance.
    A firm with access to CTA consolidated volume data must submit the 
declaration and, if applicable, the screen print within 120 days from 
the effective date of the amendment or within 30 days of the effective 
date of the firm's market data agreement with the participants that 
governs its receipt of the CTA datafeed (its ``Vendor Agreement''). 
Thereafter, each firm must submit its declaration and, if applicable, 
its screen print annually by the 31st day of each January. The 
declaration and screen print (if applicable) must be submitted to 
mdteam@nyx.com.
    The Approving Participants' representatives met with SIFMA and the 
CTA Plan's Advisory Committee to discuss the consolidated volume 
requirements and responded to their questions. The Approving 
Participants shortened the display statement in response to comments 
and made clear that a datafeed recipient is free to provide an 
exchange's trading volume with displays of the exchanges trade prices 
and quotes, without the need to include a display requirement.
    In order to motivate data recipients to comply with the display 
statement requirements, including the requisite declarations and screen 
submissions, the Approving Participants have determined to establish a 
non-compliance fee for each month of non-compliance. For each of 
Network A and Network B, the monthly fee is $3,000.
    A datafeed recipient must submit the required screen prints by July 
9, 2015 \6\ or within thirty days of the effective date of its Vendor 
Agreement. It must submit those screen prints (including previously 
provided, new, or changed screen prints) annually by the 31st day of 
each January thereafter.
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    \6\ The Commission notes that the Amendment shall not become 
effective prior to Commission approval. See id.
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    The non-compliance charges will be assessed against a data 
redistributor for each month in which it fails to provide the 
declaration or a copy of a Consolidated Volume screen print with the 
required display statement in a timely manner. The charge will also be 
assessed against a data redistributor each month for non-compliance by 
persons in the redistribution chain starting with the data 
redistributor where such persons have not entered into an applicable 
agreement with CTA.
    The non-compliance charges seek to provide incentives for data 
redistributors to comply with the consolidated volume requirements. The 
Approving Participants do not view the non-compliance fee as 
establishing a new revenue source. Rather, they hope it encourages all 
data redistributors to submit their declarations and screen prints 
(where applicable) in a timely fashion. They hope that the fee will 
motivate non-compliant redistributors to adopt the same practices that 
the majority of redistributors follow.
    The inclusion of delayed displays of consolidated volume in the 
consolidated volume requirements seeks to add clarity where a data 
redistributor accompanies displays of real-time unconsolidated prices 
and quotes with delayed consolidated volume. The Approving Participants 
seek to prevent that data redistributor from misleading investors while 
escaping the consolidated display requirements.

B. Governing or Constituent Documents

    Not applicable.

C. Implementation of the Amendment

    Approving Participants have manifested their approval of the

[[Page 39823]]

proposed Amendment by means of their execution of the Amendment. The 
Plan Amendment would become operational upon approval by the 
Commission.\7\
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    \7\ See supra note 5.
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D. Development and Implementation Phases

    The Approving Participants anticipate commencing to apply the 
compliance fee on data redistributors that fail to submit declarations 
or required screen prints by [DATE] [sic]. The Approving Participants 
will give notice of the compliance fee to all data redistributors no 
less than 120 days prior to its implementation.

E. Analysis of Impact on Competition

    The amendment will impose no burden on competition.

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

    The participants have no written understandings or agreements 
between or among them relating to interpretation of the CTA Plan as a 
result of the amendment.

G. Approval by Sponsors in Accordance With Plan

    Section XII (b)(iii) of the CTA Plan provides that ``[a]ny addition 
of any charge to . . . the charges set forth in Exhibit E . . . shall 
be effected by an amendment to this CTA Plan . . . that is approved by 
affirmative vote of not less than two-thirds of all of the then voting 
members of CTA. Any such amendment shall be executed on behalf of each 
Participant that appointed a voting member of CTA who approves such 
amendment and shall be filed with the SEC.''
    The Approving Participants have executed this Amendment and 
represent not less than two-thirds of all of the parties to the Plan. 
That satisfies the Plan's participant-approval requirements.

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

    Not applicable.

I. Terms and Conditions of Access

    Not applicable.

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

    The Approving Participants believe that the proposed compliance fee 
is fair and reasonable and provides for an equitable allocation of 
dues, fees, and other charges among vendors, data recipients and other 
persons using CTA Network A facilities. They intend that it will 
provide incentives for compliance with consolidated volume 
requirements. The charge will be applied uniformly to vendors, data 
recipients and other persons that fail to comply.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Rule 601(a)

A. Equity Securities for Which Transaction Reports Shall Be Required by 
the Plan

    Not applicable.

B. Reporting Requirements

    Not applicable.

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

    Not applicable.

D. Manner of Consolidation

    Not applicable.

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

    Not applicable.

F. Rules and Procedures Addressed to Fraudulent or Manipulative 
Dissemination

    Not applicable.

G. Terms of Access to Transaction Reports

    Not applicable.

H. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    The Commission seeks general comments on the Amendment. Interested 
persons are invited to submit written data, views, and arguments 
concerning the foregoing, including whether the proposed Amendment are 
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-CTA-2015-02 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-CTA-2015-02. 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 Amendment that are filed with 
the Commission, and all written communications relating to the 
Amendment 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 the Amendment also will be available for inspection and 
copying at the principal office of the CTA. 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-CTA-2015-02 and should be submitted on 
or before July 31, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(27).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-16837 Filed 7-9-15; 8:45 am]
 BILLING CODE 8011-01-P