Document ID: SEC-2021-0288-0001
Agency: sec
Document Type: Notice
Title: Filing: Joint Industry Plan
Posted Date: 2021-03-01T05:00Z

[Federal Register Volume 86, Number 38 (Monday, March 1, 2021)]
[Notices]
[Pages 12045-12047]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04089]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91190; File No. S7-24-89]

Joint Industry Plan; Notice of Filing and Immediate Effectiveness 
of the Fiftieth 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

February 23, 2021.
    Pursuant to Section 11A of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 608 thereunder,\2\ notice is hereby given that 
on February 11, 2021,\3\ the Participants \4\ in the Joint Self-
Regulatory Organization Plan Governing the Collection, Consolidation 
and Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges

[[Page 12046]]

on an Unlisted Trading Privileges Basis (``UTP Plan'' or ``Plan'') 
filed with the Securities and Exchange Commission (``Commission'') a 
proposal to amend the UTP Plan.\5\ The amendment represents the 
Fiftieth Amendment to the Plan (``Amendment''). Under the Amendment, 
the Participants propose revisions to the provisions of the Plan 
governing regulatory and operational halts.\6\
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    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 242.608.
    \3\ See Letter from Robert Books, Chair, UTP Operating 
Committee, to Vanessa Countryman, Secretary, Commission (Feb. 11, 
2021).
    \4\ The 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., MEMX 
LLC, MIAX PEARL, LLC, 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. (collectively, the ``Participants'').
    \5\ The Amendment was posted to the Plan website on February 12, 
2021. See Email from James P. Dombach, Counsel to the Plan, to 
Michael E. Coe, Assistant Director, Commission, et al. (Feb. 12, 
2021).
    \6\ The Participants previously, on December 5, 2016, filed an 
amendment to the provisions of the Plan governing regulatory and 
operation halts. This amendment was not acted upon by the Commission 
and was withdrawn by the Participants. See Letter from Robert Books, 
UTP Chair, to Vanessa Countryman, Secretary, Commission (Nov. 17, 
2020).
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    The proposed Amendment has been filed by the Participants pursuant 
to Rule 608(b)(2) under Regulation NMS.\7\ The Commission is publishing 
this notice to solicit comments from interested persons on the proposed 
Amendment. Set forth in Sections I and II is the statement of the 
purpose and summary of the Amendment, along with the information 
required by Rules 608(a) and 601(a) under the Act, prepared and 
submitted by the Participants to the Commission.
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    \7\ 17 CFR 242.608(b)(2).
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I. Rule 608(a)

A. Purpose of the Amendment

    The purpose of the Amendment is to incorporate into the UTP Plan 
the same processes for Regulatory Halts that are proposed by the equity 
exchanges. Consistent with the proposals from the equity exchanges, the 
Primary Listing Market may declare a Regulatory Halt \8\ in trading for 
any security for which it is the Primary Listing Market.\9\ The 
Participants believe that it is appropriate for the Primary Listing 
Market to declare a Regulatory Halt in order to vest the authority to 
declare a Regulatory Halt in a single entity, and with respect to any 
given security, the Primary Listing Market is best positioned to 
determine when to initiate and end a Regulatory Halt.
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    \8\ Regulatory Halt is defined in Section X.A.10 as ``a halt 
declared by the Primary Listing Market in trading in one or more 
securities on all Trading Centers for regulatory purposes, including 
for the dissemination of material news, news pending, suspensions, 
or where otherwise necessary to maintain a fair and orderly market. 
A Regulatory Halt includes a trading pause triggered by Limit Up 
Limit Down, a halt based on Extraordinary Market Activity, a trading 
halt triggered by a Market-Wide Circuit Breaker, and a SIP Halt.''
    \9\ The ``Primary Listing Market'' is defined in Section X.A.8 
as ``the national securities exchange on which an Eligible Security 
is listed. If an Eligible Security is listed on more than one 
national securities exchange, Primary Listing Market means the 
exchange on which the security has been listed the longest.''
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    The Primary Listing Market may declare a Regulatory Halt as 
provided for in the rules of the Primary Listing Market, if it 
determines that there is a SIP Outage,\10\ Material SIP Latency,\11\ 
Extraordinary Market Activity,\12\ or in the event of national, 
regional, or localized disruption that necessitates a Regulatory Halt 
to maintain a fair and orderly market.\13\ In making such 
determination, the Primary Listing Market will consider the totality of 
information available concerning the severity of the disruption, its 
likely duration, and potential impact on Member Firms and other market 
participants, and will make a good-faith determination that the 
criteria to declare a Regulatory Halt have been satisfied and that a 
Regulatory Halt is appropriate. The Primary Listing Market will 
consult, if feasible before declaring a Regulatory Halt, with the 
affected Trading Center(s), other Participants, or the Processor, as 
applicable, regarding the scope of the issue and what steps are being 
taken to address the issue.
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    \10\ SIP Outage is defined in Section X.A.13 as ``a situation in 
which the Processor has ceased, or anticipates being unable, to 
provide updated and/or accurate quotation or last sale price 
information in one or more securities for a material period that 
exceeds the time thresholds for an orderly failover to backup 
facilities established by mutual agreement among the Processor, the 
Primary Listing Market for the affected securities, and the 
Operating Committee unless the Primary Listing Market, in 
consultation with the Processor and the Operating Committee, 
determines that resumption of accurate data is expected in the near 
future.''
    \11\ Material SIP Latency is defined in Section X.A.5 as ``a 
delay of quotation or last sale price information in one or more 
securities between the time data is received by the Processor and 
the time the Processor disseminates the data over the high speed 
line or over the ``high speed line'' under the CQ Plan, which delay 
the Primary Listing Market determines, in consultation with, and in 
accordance with, publicly disclosed guidelines established by the 
Operating Committee, to be (a) material and (b) unlikely to be 
resolved in the near future.''
    \12\ Extraordinary Market Activity is defined in Section X.A.1 
as ``a disruption or malfunction of any electronic quotation, 
communication, reporting, or execution system operated by, or linked 
to, the Processor or a Trading Center or a member of such Trading 
Center that has a severe and continuing negative impact, on a 
market-wide basis, on quoting, order, or trading activity or on the 
availability of market information necessary to maintain a fair and 
orderly market. For purposes of this definition, a severe and 
continuing negative impact on quoting, order, or trading activity 
includes (i) a series of quotes, orders, or transactions at prices 
substantially unrelated to the current market for the security or 
securities; (ii) duplicative or erroneous quoting, order, trade 
reporting, or other related message traffic between one or more 
Trading Centers or their members; or (iii) the unavailability of 
quoting, order, transaction information, or regulatory messages for 
a sustained period.'' In the originally proposed amendment in 2016, 
Extraordinary Market Activity was defined to include disruptions or 
malfunctions on a market. After discussions with SEC Staff, the 
Participants revised this provision to solely limit the definition 
to disruptions or malfunctions that occur on a market-wide basis.
    \13\ See Section X.C. In the originally proposed amendment in 
2016, the Primary Listing Market could have declared a Regulatory 
Halt ``when otherwise necessary to maintain a fair and orderly 
market or in the public interest.'' After discussions with SEC 
Staff, the Participants revised this provision as part of the 
current Amendment in order to provide greater detail as to when a 
Regulatory Halt may be declared. The definitions of SIP Outage, 
Material SIP Latency, and Extraordinary Market Activity appear in 
Section X.A.
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    Should the Primary Listing Market declare a Regulatory Halt, the 
Primary Listing Market will determine the SIP Halt Resume Time.\14\ The 
Primary Listing Market will declare a resumption of trading when it 
makes a good-faith determination and considers the totality of 
information to determine that trading may resume in a fair and orderly 
manner in accordance with its rules. The Primary Listing Market retains 
discretion to delay the SIP Halt Resume Time if it believes trading 
will not resume in a fair and orderly manner. The Primary Listing 
Market has the responsibility to notify all other Participants of the 
initiation of the halt as well as the lifting of the halt. The 
notification process will be mutually agreed to by the Operating 
Committee and the Primary Listing Market.\15\
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    \14\ SIP Halt Resume Time is defined in Section X.A.12 as ``the 
time that the Primary Listing Market determines as the end of a SIP 
Halt.''
    \15\ See Section X.H.
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    During Regular Trading Hours, if the Primary Listing Market does 
not open a security within the amount of time as specified by the rules 
of the Primary Listing Market after the SIP Halt Resume Time, a 
Participant may resume trading in that security. Outside of Regular 
Trading Hours, a Participant may resume trading immediately after the 
SIP Halt Resume Time.
    The amendment provides that the Processor shall disseminate to the 
Participants notice of the Regulatory Halt as well as notice of the 
lifting of a Regulatory Halt through any means the Processor considers 
appropriate.\16\
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    \16\ See id.
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B. Governing or Constituent Documents

    Not applicable.

C. Implementation of Amendment

    All of the Participants have manifested their approval of the 
proposed amendment by means of their execution of the UTP Plan 
Amendment. The Participants also solicited the Advisory Committee for 
its thoughts and any comments on the amendment. The UTP Plan Amendment 
would

[[Page 12047]]

become operational upon approval by the Commission.

D. Development and Implementation Phases

    The amendment proposed herein would be implemented to coincide with 
amendments filed by the equity exchanges and approved by the 
Commission.

E. Analysis of Impact on Competition

    The amendment proposed herein does not impose any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act because the amendment simply incorporates into the 
UTP Plan the processes for Regulatory Halts that will be proposed by 
the equity exchanges. The Participants do not believe that the proposed 
amendment introduces terms that are unreasonably discriminatory for the 
purposes of Section 11A(c)(1)(D) of the Act.

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

    Not applicable.

G. Approval by Sponsors in Accordance With Plan

    Section IV(C)(1)(a) of the UTP Plan requires the Participants to 
unanimously approve the amendment proposed herein. They so approved it.

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

    Not applicable.

K. Method and Frequency of Processor Evaluation

    Not applicable.

L. Dispute Resolution

    Not applicable.

II. Regulation NMS Rule 601(a) (Solely in Its Application to the 
Amendment to the UTP Plan)

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 comments on the Amendment. Interested persons 
are invited to submit written data, views, and arguments concerning the 
foregoing, including whether the proposed Amendment is consistent with 
the Act and the rules and regulations thereunder applicable to national 
market system plans. 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 S7-24-89 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 S7-24-89. 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 website (http://www.sec.gov/rules/sro.shtml). Copies of 
the submission, all written statements with respect to the proposed 
Amendment that are filed with the Commission, and all written 
communications relating to the proposed 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 website 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 website viewing and printing at 
the principal office of the Plan. 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 S7-24-89 and should be submitted on or before March 22, 
2021.

    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)(85).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04089 Filed 2-26-21; 8:45 am]
BILLING CODE 8011-01-P