Document ID: SEC-2013-1651-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Consolidated Tape Association
Posted Date: 2013-09-23T04:00Z

[Federal Register Volume 78, Number 184 (Monday, September 23, 2013)]
[Notices]
[Pages 58362-58364]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-23009]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70428; File No. SR-CTA-2013-05]

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

September 17, 2013.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on September 9, 2013, the Consolidated Tape Association (``CTA'') Plan 
participants (``Participants'') \3\ filed with

[[Page 58363]]

the Securities and Exchange Commission (``Commission'') a proposal to 
amend the Second Restatement of the CTA Plan (the ``CTA Plan'').\4\ The 
amendment proposes to remove odd-lot transactions from the list of 
transactions that are not to be reported for inclusion on the 
consolidated tape. The Commission is publishing this notice to solicit 
comments from interested persons on the proposed amendment.
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ Each participant executed the proposed amendment. The 
Participants are: BATS Exchange, Inc., BATS-Y Exchange, Inc., 
Chicago Board Options Exchange, Incorporated, Chicago Stock 
Exchange, Inc., EDGA Exchange, Inc. (``EDGA''), EDGX Exchange, Inc. 
(``EDGX''), Financial Industry Regulatory Authority, Inc. 
(``FINRA''), International Securities Exchange, LLC, NASDAQ OMX BX, 
Inc. (``Nasdaq BX''), NASDAQ OMX PHLX, Inc. (``Nasdaq PSX''), Nasdaq 
Stock Market LLC, National Stock Exchange, New York Stock Exchange 
LLC (``NYSE''), NYSE MKT LLC (formerly NYSE Amex, Inc.), and NYSE 
Arca, Inc. (``NYSE Arca'').
    \4\ See Securities Exchange Act Release No. 10787 (May 10, 
1974), 39 FR 17799 (declaring the CTA Plan effective). 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.
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I. Rule 608(a)

A. Purpose of the Amendments

    Currently, Section VIII(a) (Responsibility of Exchange 
Participants) of the CTA Plan provides that each Participant will 
``collect and report to the Processor all last sale price information 
to be reported by it relating to transactions in Eligible Securities 
taking place on its floor.'' However, Section VI(d) (Transactions not 
reported (related messages)) provides a list of transactions that ``are 
not to be reported for inclusion on the consolidated tape.'' That list 
includes odd-lot transactions.
    Because odd-lot transactions account for a not insignificant 
percentage of trading volume, the Participants have determined that 
including odd-lot transactions on the consolidated tape of CTA last 
sale prices would add post-trade transparency to the marketplace.
    This amendment proposes to add odd-lot transactions to the 
consolidated tape by removing them from Section VI(d)'s list of 
transactions that are not to be reported for inclusion on the 
consolidated tape.
    Due to the lack of economic significance of many individual odd-lot 
orders, the Participants are not proposing to include bids and offers 
for odd-lots in the best bid and best offer calculations that the 
Participants make available under the CQ Plan.
    For the same reason, the Participants do not propose to include 
odd-lot transactions in calculations of last sale prices. Therefore, 
odd-lot transactions would not be included in calculations of high and 
low prices and would not be subject to Limit Up/Limit Down rules. 
Similarly, including odd-lot transactions on the consolidated tape 
would not trigger short sale restrictions or trading halts. However, 
odd-lot transactions would be included in calculations of daily 
consolidated volume.
    For purposes of allocating revenue among the Participants under the 
CTA Plan, the Participants would include odd-lot transactions in the 
Security Income Allocation for each Eligible Security under Section 
XII(a)(ii) (Security Income Allocation) of the CTA plan. Just as with 
round lot transactions, an odd-lot transaction with a dollar value of 
$5000 or more would constitute one qualified transaction report and an 
odd-lot transaction with a dollar value of less than $5000 would 
constitute a fraction of a qualified transaction report that equals the 
dollar value of the transaction report divided by $5000. The 
Participants do not anticipate that this will produce a significant 
shift in revenue allocation among the Participants. This treatment of 
odd-lot transactions for revenue allocation purposes does not require a 
change to the language of the CTA Plan.

B. Additional Information Required by Rule 608(a)

1. Governing or Constituent Documents
    Not applicable.
2. Implementation of the Amendment
    All of the Participants have manifested their approval of the 
proposed amendment by means of their execution of the amendments. 
Subject to Commission approval of the Amendment, the Participants 
intend to add odd-lot transactions to the consolidated tape under the 
CTA Plan commencing October 21, 2013.
3. Development and Implementation Phases
    Not applicable.
4. 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. This change is being proposed and implemented in 
parallel with similar changes to the national market system plan 
governing the trading of stocks listed on NYSE, Amex, and other markets 
(i.e., the Nasdaq/UTP plan). The Participants do not believe that the 
proposed plan amendment introduces terms that are unreasonably 
discriminatory for the purposes of Section 11A(c)(1)(D) of the Act.\5\
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    \5\ 15 U.S.C. 78k-1(c)(1)(D).
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5. Written Understanding or Agreements Relating to Interpretation of, 
or Participation in, Plan
    Not applicable.
6. Approval by Sponsors in Accordance With Plan
    Under Section IV(b) of the CTA Plan, each Participant must execute 
a written amendment to the CTA Plan before the amendment can become 
effective. The amendment is so executed.
7. Description of Operation of Facility Contemplated by the Proposed 
Amendment
    Not applicable.
 8. Terms and Conditions of Access
    Not applicable.
9. Method of Determination and Imposition, and Amount of, Fees and 
Charges
    Not applicable.
10. Method of Frequency of Processor Evaluation
    Not applicable.
11. 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

    As a result of the amendment, each Participant would be required to 
report odd-lot transactions to the Nasdaq/UTP Plan's Processor for 
inclusion in the consolidated tape.

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

    Not applicable.

D. Manner of Consolidation

    Odd-lot transactions would not be eligible for inclusion in 
calculations of last sale prices and would not be included in 
calculations of high and low prices. However, odd-lot transactions 
would be included in calculations of daily consolidated volume.

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.

[[Page 58364]]

G. Terms of Access to Transaction Reports

    Not applicable.

H. Identification of Marketplace of Execution

    Not applicable.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed 
amendments 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-2013-05 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-CTA-2013-05. 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 Amendments that are filed with 
the Commission, and all written communications relating to the 
Amendments 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 Amendments 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-2013-05 
and should be submitted on or before October 15, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(27).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-23009 Filed 9-20-13; 8:45 am]
BILLING CODE 8011-01-P