[Federal Register Volume 81, Number 64 (Monday, April 4, 2016)]
[Notices]
[Pages 19275-19282]
[FR Doc No: 2016-07515]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77469; File No. SR-CHX-2016-03]

Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Adopt Article 20, Rule 13 To Implement the Regulation NMS Plan To
Implement a Tick Size Pilot Program (``Plan'')

March 29, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on March 28, 2016, the Chicago Stock Exchange, Inc. (``CHX'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    CHX proposes to adopt Article 20, Rule 13 to implement the
Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan'').
Specifically, the Exchange proposes to adopt Article 20, Rule 13 to set
forth the requirements for the collection and transmission of data
pursuant to Appendices B and C of the Plan. The proposed rule change is
substantially similar to proposed rule changes recently approved or
published by the Commission by the Bats BZX Exchange, Inc. f/k/a BATS
Exchange, Inc. (``BZX'') to adopt BZX Rule 11.27(b) \3\ and by the
Financial Industry Regulatory Authority (``FINRA'') to adopt FINRA Rule
6191(b),\4\ both of which also sets forth requirements for the
collection and transmission of data pursuant to Appendices B and C of
the Plan. Therefore, the Exchange has designated this proposal as
``non-controversial'' and provided the Commission with the notice
required by Rule 19b-4(f)(6)(iii) under the Act.\5\
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    \3\ See Securities Exchange Act Release Nos. 77105 (February 10,
2016), 81 FR 8112 (February 17, 2016) (order approving SR-BATS-2015-
102); and 77310 (March 7, 2016) (notice for comment and immediate
effectiveness of SR-BATS-2016-27).
    \4\ See Securities Exchange Act Release No. 77164 (February 17,
2016), 81 FR 9043 (February 23, 2016) (order approving SR-FINRA-
2015-048).
    \5\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of this proposed rule change is available on the
Exchange's Web site at (www.chx.com) and in 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, the CHX included statements
concerning the purpose of and basis for the proposed rule changes 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. The CHX 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
    On August 25, 2014, NYSE Group, Inc., on behalf of the Exchange,
Bats BYX Exchange, Inc., BZX, Bats EDGA Exchange, Inc., Bats EDGX
Exchange, Inc., FINRA, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, the
Nasdaq Stock Market LLC, New York Stock Exchange LLC (``NYSE''), NYSE
MKT LLC, and NYSE Arca, Inc. (collectively ``Plan Participants''),
filed with the Commission, pursuant to Section 11A of the Act \6\ and
Rule 608 of Regulation NMS thereunder,\7\ the Plan to Implement a Tick
Size Pilot Program (``Pilot'').\8\ The Plan Participants filed the Plan
to comply with an order issued by the Commission on June 24, 2014.\9\
The Plan \10\ was published for comment in the Federal Register on
November 7, 2014, and approved by the Commission, as modified, on May
6, 2015.\11\
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    \6\ 15 U.S.C. 78k-1.
    \7\ 17 CFR 242.608.
    \8\ See Letter from Brendon J. Weiss, Vice President,
Intercontinental Exchange, Inc., to Secretary, Commission, dated
August 25, 2014.
    \9\ See Securities Exchange Act Release No. 72460 (June 24,
2014), 79 FR 36840 (June 30, 2014).
    \10\ Unless otherwise specified, capitalized terms used in this
rule filing are based on the defined terms of the Plan.
    \11\ See Securities Exchange Act Release No. 74892 (May 6,
2015), 80 FR 27513 (May 13, 2015) (``Approval Order'').
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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 stocks of small-
capitalization companies. Each Plan Participant is required to comply,
and to enforce compliance by its members, as applicable, with the
provisions of the Plan. As is described more fully below, the proposed
rules would require CHX Participants \12\ to comply with the applicable
data collection requirements of the Plan.\13\
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    \12\ A ``Participant'' is a ``member'' of the Exchange for
purposes of the Act. See CHX Article 1, Rule 1(s). For clarity, the
Exchange proposes to utilize the term ``CHX Participant'' when
referring to members of the Exchange and the term ``Plan
Participant'' when referring to Participants of the Plan.
    \13\ The Exchange proposes Interpretations and Policies .11 to
proposed Article 20, Rule 13 to provide that the Rule shall be in
effect during a pilot period to coincide with the pilot period for
the Plan (including any extensions to the pilot period for the
Plan).
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    The Pilot will include stocks of companies with $3 billion or less
in market capitalization, an average daily trading volume of one
million shares or less, and a volume weighted average price of at least
$2.00 for every trading day. The Pilot will consist of a control group
of approximately 1400 Pilot Securities and three test groups with 400
Pilot Securities in each (selected by a stratified random sampling
process).\14\ During the pilot, Pilot Securities in the control group
will be quoted at the current tick size increment of $0.01 per share
and will trade at the currently permitted increments. Pilot Securities
in the first test group (``Test Group One'') will be quoted in $0.05
minimum increments but will continue to trade at any price increment
that is currently permitted.\15\ Pilot Securities in the second test
group (``Test Group Two'') will be quoted in $0.05 minimum increments
and will trade at $0.05 minimum increments subject to a midpoint
exception, a retail investor order exception, and a negotiated trade

exception.\16\ Pilot Securities in the third test group (``Test Group
Three'') will be subject to the same quoting and trading increments as
Test Group Two and also will be subject to the ``Trade-at'' requirement
to prevent price matching by a market Plan Participant that is not
displaying at a Trading Center's ``Best Protected Bid'' or ``Best
Protected Offer,'' unless an enumerated exception applies.\17\ In
addition to the exceptions provided under Test Group Two, an exception
for Block Size orders and exceptions that mirror those under Rule 611
of Regulation NMS \18\ will apply to the Trade-at requirement.
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    \14\ See Section V of the Plan for identification of Pilot
Securities, including criteria for selection and grouping.
    \15\ See Section VI(B) of the Plan.
    \16\ See Section VI(C) of the Plan.
    \17\ See Section VI(D) of the Plan.
    \18\ 17 CFR 242.611.
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    In approving the Plan, the Commission noted that the Trading Center
data reporting requirements would facilitate an analysis of the effects
of the Pilot on liquidity (e.g., transaction costs by order size),
execution quality (e.g., speed of order executions), market maker
activity, competition between trading venues (e.g., routing frequency
of market orders), transparency (e.g., choice between displayed and
hidden orders), and market dynamics (e.g., rates and speed of order
cancellations).\19\ The Commission noted that Market Maker
profitability data would assist the Commission in evaluating the
effect, if any, of a widened tick increment on market marker profits
and any corresponding changes in the liquidity of small-capitalization
securities.\20\
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    \19\ See Approval Order, 80 FR at 27543.
    \20\ Id.
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Compliance With the Data Collection Requirements of the Plan
    The Plan contains requirements for collecting and transmitting data
to the Commission and to the public.\21\ Specifically, Appendix B.I of
the Plan (Market Quality Statistics) requires Trading Centers \22\ to
submit a variety of market quality statistics, including information
about an order's original size, whether the order was displayable or
not, the cumulative number of orders, the cumulative number of shares
of orders, and the cumulative number of shares executed within specific
time increments, e.g., from 30 seconds to less than 60 seconds after
the time of order receipt. This information shall be categorized by
security, order type, original order size, hidden status, and coverage
under Rule 605.\23\ Appendix B.I of the Plan also contains additional
requirements for market orders and marketable limit orders, including
the share-weighted average effective spread for executions of orders;
the cumulative number of shares of orders executed with price
improvement; and, for shares executed with price improvement, the
share-weighted average amount per share that prices were improved.
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    \21\ The Exchange is also required by the Plan to establish,
maintain, and enforce written policies and procedures that are
reasonably designed to comply with applicable quoting and trading
requirements specified in the Plan. The Exchange intends to
separately propose rules that would require compliance by its CHX
Participants with the applicable quoting and trading requirements
specified in the Plan, and has reserved paragraph (a) of proposed
Article 20, Rule 13 for such rules.
    \22\ The Plan incorporates the definition of a ``Trading
Center'' from Rule 600(b)(78) of Regulation NMS. Regulation NMS
defines a ``Trading Center'' as ``a national securities exchange or
national securities association that operates an SRO trading
facility, an alternative trading system, an exchange market maker,
an OTC market maker, or any other broker or dealer that executes
orders internally by trading as principal or crossing orders as
agent.'' See 17 CFR 242.600(b).
    \23\ 17 CFR 242.605.
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    Appendix B.II of the Plan (Market and Marketable Limit Order Data)
requires Trading Centers to submit information relating to market
orders and marketable limit orders, including the time of order
receipt, order type, the order size, the National Best Bid and National
Best Offer (``NBBO'') quoted price, the NBBO quoted depth, the average
execution price-share-weighted average, and the average execution time-
share-weighted average.
    The Plan requires Appendix B.I and B.II data to be submitted by
Plan Participants that operate a Trading Center, and by members of the
Plan Participants that operate Trading Centers. The Plan provides that
each Plan Participant that is the Designated Examining Authority
(``DEA'') for a member of the Plan Participant that operates a Trading
Center shall collect such data in a pipe delimited format, beginning
six months prior to the Pilot Period and ending six months after the
end of the Pilot Period. The Plan also requires the Plan Participant,
operating as DEA, to transmit this information to the SEC within 30
calendar days following month end.
    The Exchange is therefore proposing Article 20, Rule 13(b) to set
forth the requirements for the collection and transmission of data
pursuant to Appendices B and C of the Plan. Proposed Article 20, Rule
13(b) is substantially similar to proposed rule changes by BZX that
were recently approved or published by the Commission to adopt BZX Rule
11.27(b) which also sets forth requirements for the collection and
transmission of data pursuant to Appendices B and C of the Plan; \24\
provided the following:
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    \24\ See supra note 3.
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     Proposed Article 20, Rule 13(b)(2)(A) is similar to
proposed rule changes by FINRA that were recently approved or published
by the Commission to adopt FINRA Rule 6191(b)(2).\25\
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    \25\ Prior to the operative date of the proposed rule change,
the Exchange will enter into a Tick Size Pilot Program Regulatory
Services Agreement with FINRA (``TSPP RSA''), pursuant to which
FINRA will consume and process certain data elements required under
Appendices B.I, B.II, B.IV and C.I of the Plan that would either be
submitted to FINRA by the Exchange (for Appendices B.I and B.II
data) or by CHX Participants directly (for Appendices B.IV and C.I
data). In turn, FINRA would provide the Exchange with processed data
in a form as required for submission to the SEC under the Plan. At
all times, the Exchange will maintain its data reporting obligations
pursuant to the Plan.
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     Proposed Article 20, Rule 13(b)(3)(B) is similar to
approved BZX Rule 11.27(b)(3)(B), except that the Exchange is also
proposing to require CHX Participant Market Makers for which the
Exchange is the DEA to transmit Appendix B.IV data to FINRA directly,
as discussed below.\26\
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    \26\ See id.
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     Proposed Article 20, Rule 13(b)(4)(B) is similar to
approved BZX Rule 11.27(b)(4)(B), except that the Exchange is also
proposing to require CHX Participant Market Makers for which the
Exchange is the DEA to transmit Appendix C.I data to FINRA directly, as
discussed below.\27\
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    \27\ See id.
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Appendices B.I and B.II
    Proposed Article 20, Rule 13(b)(1) requires that a CHX Participant
that operates a Trading Center shall establish, maintain and enforce
written policies and procedures that are reasonably designed to comply
with the data collection and transmission requirements of Items I and
II to Appendix B of the Plan, and a CHX Participant that is a Market
Maker shall establish, maintain and enforce written policies and
procedures that are reasonably designed to comply with the data
collection and transmission requirements of Item IV of Appendix B of
the Plan and Item I of Appendix C of the Plan.
    The Exchange notes that the data requirements of Items I and II to
Appendix B of the Plan necessitates that the Exchange adopt two sets of
rules: One for CHX Participants that operate Trading Centers subject to
the Plan for which the Exchange is the DEA (i.e., proposed Article 20,
Rule 13(b)(2)(A)) and another for the Trading Center operated by the
Exchange (i.e., proposed Article 20, Rule 13(b)(2)(B)), as discussed
below.

Certain CHX Participant Trading Centers
    Similar to FINRA Rule 6191(b)(2)(A)(i), proposed Article 20, Rule
13(b)(2)(A)(i) requires that a CHX Participant that operates a Trading
Center subject to the Plan, and for which CHX is the DEA, shall collect
and transmit to the Exchange the data described in Items I and II of
Appendix B of the Plan with respect to each Pre-Pilot Data Collection
Security for the period beginning six months prior to the Pilot Period
through the trading day immediately preceding the Pilot Period; and
each Pilot Security for the period beginning on the first day of the
Pilot Period through six months after the end of the Pilot Period.\28\
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    \28\ As of the date of this filing, the Exchange has three CHX
Participants that would be subject to the requirements of proposed
paragraph (b)(2)(A). All three of these firms are also members of
FINRA.
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    Section IV of the Plan (Policies and Procedures) provides that each
Plan Participant that is the DEA of a member of a Plan Participant
operating a Trading Center is required to develop appropriate policies
and procedures for collecting and reporting the data described in Items
I and II of Appendix B, as applicable, to the DEA Plan Participant. The
Exchange has determined that all of the data required by Appendix B.I
and B.II to the Plan currently is reported to the Exchange pursuant to
CHX Article 11, Rule 3, which requires CHX Participants for which the
Exchange is the DEA, among others, to record certain order and
execution information into an electronic system designated by the
Exchange. In the interest of increasing the efficiency of the data
collection process and the consistency of that data to be collected
under the Plan, the Exchange proposes to use Article 11, Rule 3 as the
vehicle through which Trading Centers must comply with their reporting
obligations pursuant to Appendix B.I and B.II of the Plan.
    Accordingly, similar to FINRA Rule 6191(b)(2)(A)(ii), proposed
Article 20, Rule 13(b)(2)(A)(ii) provides that each CHX Participant
that operates a Trading Center subject to the Plan, and for which CHX
is the DEA, shall meet the data collection and reporting requirements
in Items I and II of Appendix B through their submission of data
elements required pursuant to Article 11, Rule 3, as well as the
following additional data elements, when an order in a Pilot Security
or Pre-Pilot Data Collection Security is received or originated: (a)
Whether the CHX Participant is a Trading Center in either the Pilot
Security or the Pre-Pilot Data Collection Security; and (b) whether the
order is routable.
    Moreover, similar to FINRA Rule 6191(b)(2)(A)(iii), proposed CHX
Article 20, Rule 13(b)(2)(A)(iii) provides that when an order in a
Pilot Security or Pre-Pilot Data Collection Security is executed, each
CHX Participant subject to this paragraph (b)(2)(A) shall comply with
its collection and transmission obligations under Items I and II of
Appendix B to the Plan and this Rule by identifying whether CHX
Participant is relying upon the Retail Investor Order exception with
respect to the execution of the order.
    As an initial matter, only those CHX Participants that operate a
Trading Center and for which the Exchange is the DEA are required to
make any changes to their Article 11, Rule 3 data recording. CHX
Participants that do not operate Trading Centers or that have another
self-regulatory organization as DEA will be permitted to leave the new
fields blank. CHX Participants that operate Trading Centers and which
the Exchange is the DEA will be required to indicate their status as a
Trading Center for new orders involving Pre-Pilot Data Collection
Securities and Pilot Securities.\29\
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    \29\ The Exchange notes that CHX Participants are already
required to record the display size of an order, pursuant to the CHX
Article 11, Rule 3(c)(5) and (16), and thus, the Exchange already
captures information required by Appendix B regarding hidden and
displayed size.
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    Moreover, the proposed rule change adds a new requirement to
capture whether an order in a Pre-Pilot Data Collection Security or a
Pilot Security received by a CHX Participant that operates a Trading
Center and for which the Exchange is the DEA is routable \30\ and
whether the CHX Participant is relying on the Retail Investor Order
exception in the Plan with respect to the execution of the order. These
additional fields are necessary so that the Exchange can capture the
information required by Item II(n) and II(o) of Appendix B to the Plan.
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    \30\ The Exchange notes that it currently requires CHX
Participants for which the Exchange is the DEA to record whether an
order received by the CHX Participant is routable, pursuant to CHX
Article 11, Rule 3(c)(27), which provides that the Exchange may
require CHX Participants to record ``such other information as the
Exchange may from time to time require.''
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    Similar to FINRA Rule 6191(b)(2)(A)(iv), proposed Article 20, Rule
13(b)(2)(A)(iv) provides that each CHX Participant that operates a
Trading Center subject to the Tick Size Pilot Program, and for which
the Exchange is the DEA, shall submit data required under this
paragraph (b)(2)(A) by 8:00 a.m. CST the calendar day following the
reportable event.
    As set forth in Section VII of the Plan (Collection of Pilot Data)
and similar to FINRA Rule 6191(b)(2)(B), proposed Article 20, Rule
13(b)(2)(A)(v) provides that the Exchange shall collect and transmit to
the SEC the data described in Items I and II of Appendix B of the Plan
and collected pursuant to this paragraph (b)(2)(A).\31\ The Exchange
shall transmit such data to the SEC in a pipe delimited format, on a
disaggregated basis by Trading Center, within 30 calendar days
following month end. Also, the Exchange shall make such data publicly
available on the CHX Web site on a monthly basis at no charge and shall
not identify the Trading Center that generated the data.
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    \31\ See supra note 25.
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CHX Trading Center
    Proposed Article 20, Rule 13(b)(2)(B)(i) provides that the Exchange
shall collect and transmit to the SEC the data described in Items I and
II of Appendix B of the Plan relating to trading activity in Pre-Pilot
Securities and Pilot Securities on a Trading Center operated by the
Exchange. The Exchange shall transmit such data to the SEC in a pipe
delimited format, on a disaggregated basis by Trading Center, within 30
calendar days following month end for: (i) Each Pre-Pilot Data
Collection Security for the period beginning six months prior to the
Pilot Period through the trading day immediately preceding the Pilot
Period; and (ii) each Pilot Security for the period beginning on the
first day of the Pilot Period through six months after the end of the
Pilot Period. The Exchange also shall make such data publicly available
on the Exchange Web site on a monthly basis at no charge and will not
identify the CHX Participant that generated the data.
Appendix B.IV
    Appendix B.IV (Daily Market Maker Participation Statistics)
requires a Plan Participant to collect data related to Market Maker
participation from each Market Maker \32\ engaging in trading activity
on a Trading Center operated by the Plan Participant. The Exchange is
therefore proposing Article 20, Rule 13(b)(3) to gather data about a
Market Maker's participation in Pilot Securities and Pre-Pilot Data
Collection Securities. Proposed Article 20, Rule 13(b)(3)(A) provides
that a CHX Participant that is

a Market Maker shall collect and transmit to their DEA data relating to
Item IV of Appendix B of the Plan with respect to activity conducted on
any Trading Center in Pilot Securities and Pre-Pilot Data Collection
Securities in furtherance of its status as a registered Market Maker,
including a Trading Center that executes trades otherwise than on a
national securities exchange, for transactions that have settled or
reached settlement date. The proposed rule requires Market Makers to
transmit such data in a format required by their DEA, by 12:00 p.m. EST
on T+4 for: (i) Transactions in each Pre-Pilot Data Collection Security
for the period beginning six months prior to the Pilot Period through
the trading day immediately preceding the Pilot Period; and (ii) for
transactions in each Pilot Security for the period beginning on the
first day of the Pilot Period through six months after the end of the
Pilot Period.
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    \32\ The Plan defines a Market Maker as ``a dealer registered
with any self-regulatory organization, in accordance with the rules
thereof, as (i) a market maker or (ii) a liquidity provider with an
obligation to maintain continuous, two-sided trading interest.''
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    However, the Exchange understands that some CHX Participants may
utilize a DEA that is not a Plan Participant to the Plan and that their
DEA would not be subject to the Plan's data collection requirements. In
such case, a DEA that is not a Plan Participant of the Plan would not
be required to collect the required data and may not establish
procedures for CHX Participants for which it acts as DEA to report the
data required under subparagraphs (b)(3)(A) of proposed Article 20,
Rule 13(b)(3)(A) and in accordance with Item IV of Appendix B of the
Plan.
    Moreover, to facilitate the linking of relevant transactions across
various Trading Centers by a CHX Participant Market Maker, the Exchange
proposes to require CHX Participants Market Makers for which the
Exchange is the DEA to submit data relating to Item IV of Appendix B to
FINRA directly.\33\
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    \33\ See supra note 25.
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    Therefore, the Exchange proposes to adopt subparagraph (b)(3)(B) to
proposed Article 20, Rule 13 to require a CHX Participant that is a
Market Maker whose DEA (i) is not a Plan Participant to the Plan or
(ii) is the Exchange to transmit the data collected pursuant to
paragraph (3)(A) of proposed Article 20, Rule 13 to FINRA, which is a
Plan Participant to the Plan and is to collect data relating to Item IV
of Appendix B of the Plan on behalf of the Plan Participants. For
Market Makers for which it is the DEA, FINRA issued a Market Maker
Transaction Data Technical Specification to collect data on Pre-Pilot
Data Collection Securities and Pilot Securities from Trading Centers to
comply with the Plan's data collection requirements.\34\
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    \34\ CHX Participant Market Makers that would be obligated to
submit data relating to Item IV of Appendix B to FINRA directly
should refer to the Market Maker Transaction Data Technical
Specification on the FINRA Web site at http://www.finra.org/sites/default/files/market-maker-transaction-data-tech-specs.pdf.
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    Proposed Article 20, Rule 13(b)(3)(C) provides that the Exchange
shall transmit the data collected by the DEA or FINRA pursuant to
proposed Article 20, Rule 13(b)(3)(A) and (B) above relating to Market
Maker activity on a Trading Center operated by the Exchange to the SEC
in a pipe delimited format within 30 calendar days following month end.
The Exchange shall also make such data publicly available on the
Exchange Web site on a monthly basis at no charge and shall not
identify the Trading Center that generated the data.
Appendix C.I
    Appendix C.I (Market Maker Profitability) requires a Plan
Participant to collect data related to Market Maker profitability from
each Market Maker for which it is the DEA. Specifically, the Plan
Participant is required to collect the total number of shares of orders
executed by the Market Maker; the raw Market Maker realized trading
profits, and the raw Market Maker unrealized trading profits. Data
shall be collected for dates starting six months prior to the Pilot
Period through six months after the end of the Pilot Period. This data
shall be collected on a monthly basis, to be provided in a pipe
delimited format to the Plan Participant, as DEA, within 30 calendar
days following month end. Appendix C.II (Aggregated Market Maker
Profitability) requires the Plan Participant, as DEA, to aggregate the
Appendix C.I data, and to categorize this data by security as well as
by the control group and each Test Group. That aggregated data shall
contain information relating to total raw Market Maker realized trading
profits, volume-weighted average of raw Market Maker realized trading
profits, the total raw Market Maker unrealized trading profits, and the
volume-weighted average of Market Maker unrealized trading profits.
    The Exchange is therefore proposing Article 20, Rule 13(b)(4) to
set forth the requirements for the collection and transmission of data
pursuant to Appendix C.I of the Plan. Proposed Article 20, Rule
13(b)(4)(A) requires that a CHX Participant that is a Market Maker
shall collect and transmit to their DEA the data described in Item I of
Appendix C of the Plan with respect to executions in Pilot Securities
that have settled or reached settlement date that were executed on any
Trading Center. The proposed rule also requires CHX Participants to
provide such data in a format required by their DEA by 12 p.m. EST on
T+4 for executions during and outside of Regular Trading Hours in each:
(i) Pre-Pilot Data Collection Security for the period beginning six
months prior to the Pilot Period through the trading day immediately
preceding the Pilot Period; and (ii) Pilot Security for the period
beginning on the first day of the Pilot Period through six months after
the end of the Pilot Period.
    For the same reasons set forth above for subparagraph (b)(3)(B) to
proposed Article 20, Rule 13, the Exchange proposes to adopt
subparagraph (b)(4)(B) to proposed Article 20, Rule 13 to require a CHX
Participant that is a Market Maker whose DEA (i) is not a Plan
Participant to the Plan or (ii) the Exchange to transmit the data
collected pursuant to paragraph (4)(A) of Article 20, Rule 13 to FINRA
directly. As stated above, FINRA is a Plan Participant to the Plan and
is to collect data relating to Item I of Appendix C of the Plan on
behalf of the Plan Participants. For Market Makers for which it is the
DEA, FINRA issued a Market Maker Transaction Data Technical
Specification to collect data on Pre-Pilot Data Collection Securities
and Pilot Securities from Trading Centers to comply with the Plan's
data collection requirements.\35\
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    \35\ Id.
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Appendix B.III
    The Exchange is also adopting a rule setting forth the manner in
which Market Maker participation will be calculated. Item III of
Appendix B of the Plan requires each Plan Participant that is a
national securities exchange to collect daily Market Maker registration
statistics categorized by security, including the following
information: (i) Ticker symbol; (ii) the Plan Participant exchange;
(iii) number of registered market makers; and (iv) the number of other
registered liquidity providers. Therefore, the Exchange proposes to
adopt proposed Article 20, Rule 13(b)(5) providing that the Exchange
shall collect and transmit to the SEC the data described in Item III of
Appendix B of the Plan relating to daily Market Maker registration
statistics in a pipe delimited format within 30 calendar days following
month end for: (i) Transactions in each Pre-Pilot Data Collection
Security for the period beginning six months prior to the Pilot Period
through the trading day immediately preceding the Pilot Period;

and (ii) transactions in each Pilot Security for the period beginning
on the first day of the Pilot Period through six months after the end
of the Pilot Period.
    The Exchange is also proposing, through Interpretations and
Policies, to clarify other aspects of the data collection
requirements.\36\ Proposed Interpretations and Policies .02 relates to
the use of the retail investor order flag for purposes of Appendix
B.II(n) reporting. The Plan currently states that market and marketable
limit orders shall include a ``yes/no'' field relating to the Retail
Investor Order flag. The Exchange is proposing Interpretations and
Policies .02 to clarify that, for purposes of the reporting requirement
in Appendix B.II(n), a Trading Center shall report ``y'' to their DEA
where it is relying upon the Retail Investor Order exception to Test
Groups Two and Three, and ``n'' for all other instances.\37\ The
Exchange believes that requiring the identification of a Retail
Investor Orders only where the exception may apply (i.e., Pilot
Securities in Test Groups Two and Three) is consistent with Appendix
B.II(n).
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    \36\ The Exchange is also proposing Interpretations and Policies
.01 to Article 20, Rule 13 to clarify that certain enumerated terms
used throughout Article 20, Rule 13 shall have the same meaning as
set forth in the Plan.
    \37\ FINRA, on behalf of the Plan Participants submitted a
letter to Commission requesting exemption from certain provisions of
the Plan related to data collection. See letter from Marcia E.
Asquith, Senior Vice President and Corporate Secretary, FINRA dated
December 9, 2015 to Robert W. Errett, Deputy Secretary, Commission
(``Exemption Request''). The Commission, pursuant to its authority
under Rule 608(e) of Regulation NMS, granted BZX a limited exemption
from the requirement to comply with certain provisions of the Plan
as specified in the letter and noted herein. See letter from David
Shillman, Associate Director, Division of Trading and Markets,
Commission to Eric Swanson, General Counsel, BZX, dated February 10,
2016 (``Exemption Letter'').
---------------------------------------------------------------------------

    Interpretations and Policies .03 requires that CHX Participants
populate a field to identify to their DEA whether an order is affected
by the bands in place pursuant to the National Market System Plan to
Address Extraordinary Market Volatility.\38\ Pursuant to the Limit-Up
Limit-Down Plan, between 9:30 a.m. and 4:00 p.m., the Securities
Information Processor (``SIP'') calculates a lower price band and an
upper price band for each NMS stock. These price bands represent a
specified percentage above or below the stock's reference price, which
generally is calculated based on reported transactions in that stock
over the preceding five minutes. When one side of the market for an
individual security is outside the applicable price band, the SIP
identifies that quotation as non-executable. When the other side of the
market reaches the applicable price band (e.g., the offer reaches the
lower price band), the security enters a Limit State. The stock would
exit a Limit State if, within 15 seconds of entering the Limit State,
all Limit State Quotations were executed or canceled in their entirety.
If the security does not exit a Limit State within 15 seconds, then the
primary listing exchange declares a five-minute trading pause, which
would be applicable to all markets trading the security.
---------------------------------------------------------------------------

    \38\ See National Market System Plan to Address Extraordinary
Market Volatility, Securities Exchange Act Release No. 67091 (May
31, 2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (``Limit-Up
Limit-Down Plan'').
---------------------------------------------------------------------------

    The Exchange and the other Plan Participants have determined that
it is appropriate to create a new flag for reporting orders that are
affected by the Limit-Up Limit-Down bands. Accordingly, a Trading
Center shall report a value of ``Y'' to their DEA when the ability of
an order to execute has been affected by the Limit-Up Limit-Down bands
in effect at the time of order receipt. A Trading Center shall report a
value of ``N'' to their DEA when the ability of an order to execute has
not been affected by the Limit-Up Limit-Down bands in effect at the
time of order receipt.
    Interpretations and Policies .03 also requires, for securities that
may trade in a foreign market, that the Plan Participant indicate
whether the order was handled domestically, or routed to a foreign
venue. Accordingly, the Plan Participant will indicate, for purposes of
Appendix B.I, whether the order was: (1) Fully executed domestically,
or (2) fully or partially executed on a foreign market. For purposes of
Appendix B.II, the Plan Participant will classify all orders in
securities that may trade in a foreign market Pilot and Pre-Pilot
Securities as: (1) Directed to a domestic venue for execution; (2) may
only be directed to a foreign venue for execution; or (3) was fully or
partially directed to a foreign venue at the discretion of the CHX
Participant. The Exchange believes that this proposed flag will better
identify orders in securities that may trade in a foreign market, as
such orders that were routed to foreign venues would not be subject to
the Plan's quoting and trading requirements, and could otherwise
compromise the integrity of the data.
    Interpretations and Policies .04 relates to the time ranges
specified in Appendix B.I.a(14), B.I.a(15), B.I.a(21) and
B.I.a(22).\39\ The Exchange and the other Plan Participants have
determined that it is appropriate to change the reporting times in
these provisions to require more granular reporting for these
categories. Accordingly, the Exchange proposes to add Appendix
B.I.a(14A), which will require Trading Centers to report the cumulative
number of shares of orders executed from 100 microseconds to less than
1 millisecond after the time of order receipt. Appendix B.I.a(15) will
be changed to require the cumulative number of shares of orders
executed from 1 millisecond to less than 100 milliseconds after the
time of order receipt. The Exchange also proposes to add Appendix
B.I.a(21A), which will require Trading Centers to report the cumulative
number of shares of orders canceled from 100 microseconds to less than
1 millisecond after the time of order receipt. Appendix B.I.a(22) will
be changed to require the cumulative number of shares of orders
canceled from 1 millisecond to less than 100 milliseconds after the
time of order receipt. The Exchange believes that these new reporting
requirements will contribute to a meaningful analysis of the Pilot by
producing more granular data on these points.\40\
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    \39\ Specifically, Appendix B.I.a(14) requires reporting of the
cumulative number of shares of orders executed from 0 to less than
100 microseconds after the time of order receipt; Appendix B.I.a(15)
requires reporting of the cumulative number of shares of orders
executed from 100 microseconds to less than 100 milliseconds after
the time of order receipt; Appendix B.I.a(21) requires reporting of
the cumulative number of shares of orders cancelled from 0 to less
than 100 microseconds after the time of order receipt; and Appendix
B.I.a(22) requires reporting of the cumulative number of shares of
orders cancelled from 100 microseconds to less than 100 milliseconds
after the time of order receipt.
    \40\ The Commission granted BZX an exemption from Rule 608(c)
related to this provision. See Exemption Letter, supra note 37.
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    Interpretations and Policies .05 relates to the relevant
measurement for purposes of Appendix B.I.a(31)-(33) reporting.
Currently, the Plan states that this data shall be reported as of the
time of order execution. The Exchange and the other Plan Participants
believe that this information should more properly be captured at the
time of order receipt as evaluating share-weighted average prices at
the time of order receipt is more consistent with the goal of observing
the effect of the Pilot on the liquidity of Pilot Securities. The
Exchange is therefore proposing to make this change through
Interpretations and Policies .05.\41\ This change will make these
provisions consistent with the remainder of the statistics in Appendix
B.I.a, which are all based on order receipt.
---------------------------------------------------------------------------

    \41\ Id.
---------------------------------------------------------------------------

    Interpretations and Policies .06 addresses the status of not-held
and auction orders for purposes of Appendix

B.I reporting. Currently, Appendix B.I sets forth eight categories of
orders, including market orders, marketable limit orders, and inside-
the-quote resting limit orders, for which daily market quality
statistics must be reported. Currently, Appendix B.I does not provide a
category for not held orders, clean cross orders, auction orders, or
orders received when the NBBO is crossed. The Exchange and the other
Plan Participants have determined that it is appropriate to include
separate categories for these orders types for purposes of Appendix B
reporting. The Exchange is therefore proposing Interpretations and
Policies .06 to provide that not held orders shall be included as an
order type for purposes of Appendix B reporting, and shall be assigned
the number (18). Clean cross orders shall be included as an order type
for purposes of Appendix B reporting, and shall be assigned the number
(19); auction orders shall be included an as order type for purposes of
Appendix B reporting, and shall be assigned the number (20); and orders
that cannot otherwise be classified, including, for example, orders
received when the NBBO is crossed shall be included as an order type
for purposes of Appendix B reporting, and shall be assigned the number
(21). All of these orders already are included in the scope of Appendix
B; however, without this proposed change, these order types would be
categorized with other orders, such as regular held orders, that should
be able to be fully executed upon receipt, which would compromise the
value of this data.
    The Exchange is proposing Interpretations and Policies .07 to
clarify the scope of the Plan as it relates to CHX Participants that
only execute orders limited purposes. Specifically, the Exchange and
the other Plan Participants believe that a CHX Participant that only
executes orders otherwise than on a national securities exchange for
the purpose of: (1) Correcting a bona fide error related to the
execution of a customer order; (2) purchasing a security from a
customer at a nominal price solely for purposes of liquidating the
customer's position; or (3) completing the fractional share portion of
an order \42\ shall not be deemed a Trading Center for purposes of
Appendix B to the Plan. The Exchange is therefore proposing
Supplementary Material .09 to make this clarification.
---------------------------------------------------------------------------

    \42\ The Exchange notes that where a CHX Participant purchases a
fractional share from a customer, the Trading Center that executes
the remaining whole shares of that customer order would subject to
subject to Appendix B of the Plan.
---------------------------------------------------------------------------

    The Exchange is proposing Interpretations and Policies .08 to
clarify that, for purposes of the Plan, Trading Centers must begin the
data collection required pursuant to Appendix B.I.a(1) through B.II.(y)
of the Plan and Item I of Appendix C of the Plan on April 4, 2016.
While the Exchange or the CHX Participant's DEA will provide the
information required by Appendix B and C of the Plan during the Pilot
Period, the requirement that the Exchange or their DEA provide
information to the SEC within 30 days following month end and make such
data publicly available on its Web site pursuant to Appendix B and C
shall commence six months prior to the beginning of the Pilot
Period.\43\
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    \43\ In its order approving the Plan, the SEC noted that the
Pilot shall be implemented within one year of the date of
publication of its order, e.g., by May 6, 2016. See Approval Order,
80 FR at 27545. However, on November 6, 2015, the SEC extended the
implementation date approximately five months to October 3, 2016.
See Securities Exchange Act Release No. 76382 (November 6, 2015), 80
FR 70284 (File No. 4-657) (Order Granting Exemption From Compliance
With the National Market System Plan To Implement a Tick Size Pilot
Program); see also Letter from Brendon J. Weiss, Co-Head, Government
Affairs, Intercontinental Exchange/NYSE, to Brent J. Fields,
Secretary, Commission, dated November 4, 2015 (requesting the data
collection period be extended until six months after the requisite
SRO rules are approved, and the implementation data of the Tick Size
Pilot until six months thereafter).
---------------------------------------------------------------------------

    The Exchange is proposing Interpretations and Policies .09 to
address the requirement in Appendix C.I(b) of the Plan that the
calculation of raw Market Maker realized trading profits utilize a last
in, first out (``LIFO'')-like method to determine which share prices
shall be used in that calculation. The Exchange and the other Plan
Participants believe that it is more appropriate to utilize a
methodology that yields LIFO-like results, rather than utilizing a
LIFO-like method, and the Exchange is therefore proposing
Interpretations and Policies .09 to make this change.\44\ The Exchange
is proposing that, for purposes of Item I of Appendix C, the Plan
Participants shall calculate daily Market Maker realized profitability
statistics for each trading day on a daily LIFO basis using reported
trade price and shall include only trades executed on the subject
trading day. The daily LIFO calculation shall not include any positions
carried over from previous trading days. For purposes of Item I.c of
Appendix C, the Plan Participants shall calculate daily Market Maker
unrealized profitability statistics for each trading day on an average
price basis. Specifically, the Plan Participants must calculate the
volume weighted average price of the excess (deficit) of buy volume
over sell volume for the current trading day using reported trade
price. The gain (loss) of the excess (deficit) of buy volume over sell
volume shall be determined by using the volume weighted average price
compared to the closing price of the security as reported by the
primary listing exchange. In reporting unrealized trading profits, the
Plan Participant shall also report the number of excess (deficit)
shares held by the Market Maker, the volume weighted average price of
that excess (deficit) and the closing price of the security as reported
by the primary listing exchange used in reporting unrealized
profit.\45\
---------------------------------------------------------------------------

    \44\ Appendix C.I currently requires Market Maker profitability
statistics to include (1) the total number of shares of orders
executed by the Market Maker; (2) raw Market Maker realized trading
profits, which is the difference between the market value of Market
Maker shares and the market value of Market Maker purchases, using a
LIFO-like method; and (3) raw Market Maker unrealized trading
profits, which is the difference between the purchase or sale price
of the end-of-day inventory position of the Market Maker and the
Closing Price. In the case of a short position, the Closing Price
from the sale will be subtracted; in the case of a long position,
the purchase price will be subtracted from the Closing Price.
    \45\ The Commission granted BZX an exemption from Rule 608(c)
related to this provision. See Exemption Letter, supra note 37.
---------------------------------------------------------------------------

    Finally, the Exchange is proposing Interpretations and Policies .10
to address the securities that will be used for data collection
purposes prior to the commencement of the Pilot. The Exchange and the
other Plan Participants have determined that it is appropriate to
collect data for a group of securities that is larger, and using
different quantitative thresholds, than the group of securities that
will be Pilot Securities. The Exchange is therefore proposing
Interpretations and Policies .10 to define ``Pre-Pilot Data Collection
Securities'' as the securities designated by the Plan Participants for
purposes of the data collection requirements described in Items I, II
and IV of Appendix B and Item I of Appendix C of the Plan for the
period beginning six months prior to the Pilot Period and ending on the
trading day immediately preceding the Pilot Period. The Plan
Participants shall compile the list of Pre-Pilot Data Collection
Securities by selecting all NMS stocks with a market capitalization of
$5 billion or less, a Consolidated Average Daily Volume (CADV) of 2
million shares or less and a closing price of $1 per share or more. The
market capitalization and the closing price thresholds shall be applied
to the last day of the Pre-Pilot measurement period, and the CADV
threshold shall be applied to the

duration of the Pre-Pilot measurement period. The Pre-Pilot measurement
period shall be the three calendar months ending on the day when the
Pre-Pilot Data Collection Securities are selected. The Pre-Pilot Data
Collection Securities shall be selected thirty days prior to the
commencement of the six-month Pre-Pilot Period. On the trading day that
is the first trading day of the Pilot Period through six months after
the end of the Pilot Period, the data collection requirements will
become applicable to the Pilot Securities only. A Pilot Security will
only be eligible to be included in a Test Group if it was a Pre-Pilot
Security.
Implementation Date
    The proposed rule change will be operative on April 4, 2016.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \46\ in general, and furthers the objectives of Section
6(b)(5) of the Act \47\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------

    \46\ 15 U.S.C. 78f(b).
    \47\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that this proposal is consistent with the Act
because it implements and clarifies the provisions of the Plan, and is
designed to assist the Exchange in meeting its regulatory obligations
pursuant of the Plan. In approving the Plan, the SEC noted that the
Pilot was an appropriate, data-driven test that was designed to
evaluate the impact of a wider tick size on trading, liquidity, and the
market quality of securities of smaller capitalization companies, and
was therefore in furtherance of the purposes of the Act. The Exchange
believes that this proposal is in furtherance of the objectives of the
Plan, as identified by the SEC, and is therefore consistent with the
Act because the proposal implements and clarifies the requirements of
the Plan and applies specific obligations to CHX Participants in
furtherance of compliance with the Plan.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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. The Exchange
notes that the proposed rule change implements the provisions of the
Plan, and is designed to assist the Exchange in meeting its regulatory
obligations pursuant of the Plan. The Exchange also notes that the data
collection requirements for CHX Participants that operate Trading
Centers will apply equally to all such CHX Participants, as will the
data collection requirements for Market Makers.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the 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 \48\ and Rule 19b-4(f)(6) thereunder.\49\
---------------------------------------------------------------------------

    \48\ 15 U.S.C. 78s(b)(3)(A).
    \49\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \50\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \51\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has asked the Commission to waive the 30-day operative delay. The
Commission believes that waiver of the operative delay is consistent
with the protection of investors and the public interest because it
would allow the Exchange to implement the proposed amendments on April
4, 2016, the date upon which the data collection requirements of the
Plan become effective.\52\ Therefore, the Commission hereby waives the
operative delay and designates the proposal operative on April 4,
2016.\53\
---------------------------------------------------------------------------

    \50\ 17 CFR 240.19b-4(f)(6).
    \51\ 17 CFR 240.19b-4(f)(6)(iii).
    \52\ See Securities Exchange Act Release No. 76382 (November 6,
2015), 80 FR 70284 (File No. 4-657) (Order Granting Exemption From
Compliance With the National Market System Plan To Implement a Tick
Size Pilot Program).
    \53\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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 change 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<EMAIL_ADDRESS>Please include
File Number SR-CHX-2016-03 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-CHX-2016-03. 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 10:00 a.m. and 3:00 p.m. Copies of
the filing also will be available for inspection and copying at the
principal office of the Exchange. 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-CHX-2016-03, and should be submitted on or before April
25, 2016.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\54\
---------------------------------------------------------------------------

    \54\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-07515 Filed 4-1-16; 8:45 am]
 BILLING CODE 8011-01-P


[Federal Register Volume 78, Number 173 (Friday, September 6, 2013)]
[Notices]
[Pages 54880-54881]
[FR Doc No: 2013-21669]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. IC13-17-000]

Commission Information Collection Activities (FERC-551); Comment
Request

AGENCY: Federal Energy Regulatory Commission, DOE.

ACTION: Comment request.

-----------------------------------------------------------------------

SUMMARY: In compliance with the requirements of the Paperwork Reduction
Act of 1995, 44 U.S.C. 3507(a)(1)(D), the Federal Energy Regulatory
Commission (Commission or FERC) is submitting the information
collection FERC-551, Reporting of Flow Volume and Capacity by
Interstate Natural Gas Pipelines, to the Office of Management and
Budget (OMB) for review of the information collection requirements. Any
interested person may file comments directly with OMB and should
address a copy of those comments to the Commission as explained below.
The Commission issued a Notice in the Federal Register (78 FR 36176, 6/
17/2013) requesting public comments. FERC received no comments on the
FERC-551 and is making this notation in its submittal to OMB.

DATES: Comments on the collection of information are due by October 7,
2013.

ADDRESSES: Comments filed with OMB, identified by the OMB Control No.
1902-0243, should be sent via email to the Office of Information and
Regulatory Affairs<EMAIL_ADDRESS>Attention: Federal Energy
Regulatory Commission Desk Officer. The Desk Officer may also be
reached via telephone at<PHONE_NUMBER>.
    A copy of the comments should also be sent to the Federal Energy
Regulatory Commission, identified by the Docket No. IC13-17-000, by
either of the following methods:
     eFiling at Commission's Web site: http://www.ferc.gov/docs-filing/efiling.asp.
     Mail/Hand Delivery/Courier: Federal Energy Regulatory
Commission, Secretary of the Commission, 888 First Street NE.,
Washington, DC 20426.
    Instructions: All submissions must be formatted and filed in
accordance with submission guidelines at: http://www.ferc.gov/help/submission-guide.asp. For user assistance contact FERC Online Support
by email at<EMAIL_ADDRESS>or by phone at:<PHONE_NUMBER>
(toll-free), or<PHONE_NUMBER> for TTY.
    Docket: Users interested in receiving automatic notification of
activity in this docket or in viewing/downloading comments and
issuances in this docket may do so at http://www.ferc.gov/docs-filing/docs-filing.asp.

FOR FURTHER INFORMATION CONTACT:  Ellen Brown may be reached by email
at<EMAIL_ADDRESS>by telephone at<PHONE_NUMBER>, and by fax
at<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:
    Title: Reporting of Flow Volume and Capacity by Interstate Natural
Gas Pipelines.
    OMB Control No.: 1902-0243.
    Type of Request: Three-year extension of the FERC-551 information
collection requirements with no changes to the reporting requirements.
    Abstract: Interstate pipelines are required to post on their Web
sites the volumes of no-notice service flows \1\ at each receipt and
delivery point before 11:30 a.m. central clock time three days after
the day of gas flow.
---------------------------------------------------------------------------

    \1\ See 18 CFR 284.7(a)(4) (requiring pipelines to provide no-
notice service).
---------------------------------------------------------------------------

    FERC implemented Order Nos. 720 and 720-A to comply with the Energy
Policy Act of 2005 (``EPAct 2005'') and specifically Section 23 of
EPAct 2005, which amended the NGA to direct FERC to ``facilitate price
transparency in markets for the sale or transportation of physical
natural gas in interstate commerce.'' On October 24, 2011, the United
States Court of Appeals for the Fifth Circuit issued a decision
granting the Texas Pipeline Association and the Railroad Commission's
petition for review and vacating FERC's Order Nos. 720 and 720-A. In
its order, the 5th Circuit held that Order Nos. 720 and 720-A exceeded
the scope of FERC' authority under the Natural Gas Act of 1938 and FERC
could not require intrastate natural gas pipelines to post the
information. However, the court's decision did not disrupt the
reporting and posting obligations of interstate natural gas
pipelines.\2\
---------------------------------------------------------------------------

    \2\ Order Granting Motion to Clarify Opinion, Texas Pipelines
Ass'n v. FERC, 661 F.3d 258 (Dec. 20. 2011).
---------------------------------------------------------------------------

    Type of Respondents: Interstate Natural Gas Pipelines.
    Estimate of Annual Burden: \3\ The Commission estimates the total
Public Reporting Burden for this information collection as:
---------------------------------------------------------------------------

    \3\ Burden is defined as the total time, effort, or financial
resources expended by persons to generate, maintain, retain, or
disclose or provide information to or for a Federal agency. For
further explanation of what is included in the information
collection burden, reference 5 Code of Federal Regulations 1320.3.

               FERC-551: Reporting of Flow Volume and Capacity by Interstate Natural Gas Pipelines
----------------------------------------------------------------------------------------------------------------
                                       Number of annual     Total number     Estimated burden   Estimated total
      Number of respondents (A)         responses per        responses          hours per        annual burden
                                        respondent (B)      (A)x(B)=(C)        response (D)         (C)x(D)
----------------------------------------------------------------------------------------------------------------
101.................................               366             36,966            \4\ 0.5             18,483
----------------------------------------------------------------------------------------------------------------

    The total estimated annual cost burden to respondents is $1,040,038
[18,483 hours * $56.27/hour \5\ = $1,040,038]
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    \4\ In the prior notice regarding this collection, FERC used 183
burden hours per response, and the assumption of one response per
year. In this notice we show the burden to a more detailed level,
indicating that there is one response per day per respondent. We use
366 days as this keeps the total burden hour figure consistent with
the prior notice.
    \5\ This figure includes wages plus benefits and comes from the
Bureau of Labor Statistics Management Analyst category (13-1111)
(http://bls.gov/oes/current/naics2_22.htm and http://www.bls.gov/news.release/ecec.nr0.htm).
---------------------------------------------------------------------------

    Comments: Comments are invited on: (1) Whether the collection of
information is necessary for the proper performance of the functions of
the Commission, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden and
cost of the collection of information, including the validity of the
methodology and assumptions used;

(3) ways to enhance the quality, utility and clarity of the information
collection; and (4) ways to minimize the burden of the collection of
information on those who are to respond, including the use of automated
---------------------------------------------------------------------------
collection techniques or other forms of information technology.

    Dated: August 29, 2013.
Kimberly D. Bose,
Secretary.
[FR Doc. 2013-21669 Filed 9-5-13; 8:45 am]
BILLING CODE 6717-01-P