80 FR 13940 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Amended, To Require a Member To Identify Transactions With a Non-Member Affiliate and To Change How FINRA Disseminates a Subset of Such Transactions
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 51 (March 17, 2015)
Federal Register Volume 80, Issue 51 (March 17, 2015)
| Page Range | 13940-13943 | |
| FR Document | 2015-06012 |
[Federal Register Volume 80, Number 51 (Tuesday, March 17, 2015)] [Notices] [Pages 13940-13943] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-06012] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74482; File No. SR-FINRA-2014-050] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of a Proposed Rule Change, as Amended, To Require a Member To Identify Transactions With a Non-Member Affiliate and To Change How FINRA Disseminates a Subset of Such Transactions March 11, 2015 I. Introduction On November 21, 2014, the Financial Industry Regulatory Authority, Inc. (``FINRA'') filed with the Securities and Exchange Commission (``Commission''), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 [[Page 13941]] (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to amend the FINRA Rule 6700 Series (Trade Reporting and Compliance Engine (TRACE)): (1) To add a new contra-party type to be used in TRACE reports to identify a transaction with a non-member affiliate, and (2) to require a firm to identify when a transaction with a non-member affiliate meets specified conditions, so that FINRA can suppress dissemination of such trade. The proposed rule change was published for comment in the Federal Register on December 11, 2014, and the comment period expired on January 2, 2015.\3\ The Commission received two comments on the proposal.\4\ --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ See Securities Exchange Act Release No. 73762 (December 5, 2015), 79 FR 73670 (December 11, 2015) (``Notice of Original Proposal''). \4\ See Letters to the Commission from Sean C. Davy, Managing Director, Securities Industry and Financial Markets Association, dated December 23, 2014 (``SIFMA Letter'') and Kyle C. Wooten, Deputy Director--Compliance and Regulatory, Thomson Reuters, dated January 2, 2015 (``Thomson Reuters Letter''). --------------------------------------------------------------------------- On January 14, 2015, FINRA granted the Commission an extension of time to act on the proposal until March 11, 2015. On February 24, 2015, FINRA filed Amendment No. 1 with the Commission to respond to the comment letters and to propose modifications and clarifications to its proposal.\5\ The Commission is publishing this notice and order to solicit comments on Amendment No. 1 and to approve the proposed rule change, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \5\ See FINRA Response to Comments, dated February 24, 2015 (``FINRA Response Letter''). The FINRA Response Letter is included in the public comment file for SR-FINRA-2014-050. --------------------------------------------------------------------------- II. Description of the Proposal FINRA has proposed to amend the TRACE rules 6700 Series: (1) To add a new contra-party type to be used in TRACE reports to identify a transaction with a non-member affiliate, and (2) to require a firm to identify when a transaction with a non-member affiliate meets specified conditions, so that FINRA can suppress dissemination of such trade. FINRA Rule 6730 (Transaction Reporting) sets forth the requirements applicable to members for reporting transactions in TRACE-Eligible Securities. Rule 6730(c) (Transaction Information To Be Reported) describes the items of information that must be included in a TRACE trade report. Among other things, a member must identify the other side (i.e., contra-party or counterparty) for each transaction.\6\ Where the contra-party is a member, the reporting member must provide the contra- party's designated Market Participant ID (``MPID'') in the trade report. All other contra-parties (including non-member affiliates) can be identified only as a ``customer'' when reporting the transaction to TRACE. --------------------------------------------------------------------------- \6\ FINRA Rule 6730(c)(6) provides that each TRACE trade report shall contain the contra-party's identifier. --------------------------------------------------------------------------- FINRA has proposed to amend Rule 6730 to introduce a new contra- party type to identify a non-member affiliate of the member reporting the trade, and to disseminate publicly this contra-party identifier.\7\ Currently, when a member engages in a transaction with a non-member affiliate, that transaction is reported by the member as a trade with a customer.\8\ Thus, the proposal would provide FINRA and market participants with additional identifying information regarding the contra-party in the case of a member trade with a non-member affiliate.\9\ --------------------------------------------------------------------------- \7\ The proposed rule change would define ``non-member affiliate'' in Rule 6710 as a non-member entity that controls, is controlled by, or is under common control with a member. For the purposes of this definition, ``control,'' along with any derivative thereof, means legal, beneficial, or equitable ownership, directly or indirectly, of 25 percent or more of the capital stock (or other ownership interest, if not a corporation) of any entity ordinarily having voting rights. The term ``common control'' means the same natural person or entity controls two or more entities. \8\ FINRA's Response Letter indicated that a member may conduct a periodic assessment of its affiliate relationships to determine whether a relationship qualifies for non-member affiliate identification requirements. See FINRA Response Letter at 5. \9\ The proposal would not change the way that a member reports a trade with an affiliate that also is a member; the reporting member would continue to identify the contra-party by MPID. --------------------------------------------------------------------------- FINRA also proposed to require members to identify a narrow subset of transactions with non-member affiliates. Specifically, a member would need to apply a ``Suppression Indicator'' to a transaction between itself and a non-member affiliate where: (1) Each party is trading for its own account, and (2) the transaction with the non- member affiliate occurs within the same day, at the same price, and in the same security as a transaction engaged in by the member with a different counterparty (``Suppression Criteria''). Identification of these transactions by members would enable FINRA to suppress the transactions from dissemination on the tape, as FINRA believes that these transactions are not economically distinct from the disseminated transaction between the member and the other contra-party to the trade. FINRA would suppress dissemination only where a member purchases or sells a security and then, within the same trading day, engages in a back-to-back trade with its non-member affiliate in the same security at the same price.\10\ Because the transaction between the member and its non-member affiliate represents a change in beneficial ownership between different legal entities, it is a reportable transaction and is publicly disseminated under the current rule. --------------------------------------------------------------------------- \10\ In FINRA's Response Letter, it clarified that, when a member and a non-member affiliate enter into a transaction in a TRACE-eligible security and do not initially include the Suppression Indicator, but meet the Suppression Criteria during the day, the member would not be required to correct the trade report to include the Suppression Indicator. However, if the Suppression Indicator is included but ultimately the transaction does not meet the Suppression Criteria, the member must correct the prior trade report and remove the Suppression Indicator. See FINRA Response Letter at 4-5. --------------------------------------------------------------------------- Implementation Schedule FINRA stated in the Notice of Original Proposal that it would announce the implementation date of the proposed rule change in a Regulatory Notice to be published no later than 60 days following Commission approval, and that the implementation date would be no later than 90 days following publication of the Regulatory Notice announcing Commission approval. In Amendment No. 1, FINRA revised its implementation schedule in response to commenters' concerns. FINRA stated that it would announce the implementation date in a Regulatory Notice to be published no later than 120 days following Commission approval, and the implementation date would be no sooner than 120 days, and no later than 270 days, following publication of the Regulatory Notice.\11\ --------------------------------------------------------------------------- \11\ See FINRA Response Letter at 5. --------------------------------------------------------------------------- III. Summary of Comments, FINRA's Response, and Proposed Modifications and Clarifications in Amendment No. 1 As noted above, the Commission received two comment letters concerning the proposal.\12\ Although both commenters were generally supportive of FINRA's goal to improve the quality of information reported to and disseminated by TRACE, one commenter supported the proposed requirement to identify and suppress back-to-back trades done with a non-member affiliate on the same day for the same price and in the same security \13\ while the other opposed it.\14\ --------------------------------------------------------------------------- \12\ See supra note 4. \13\ See SIFMA Letter at 1. \14\ See Thomson Reuters Letter at 3. --------------------------------------------------------------------------- The supporting comment letter acknowledged that continued dissemination of transactions that meet the Suppression Criteria would be [[Page 13942]] undesirable, but asked that FINRA permit members to check for affiliate status at specific or periodic points in time, because the level of ownership interest in an affiliate is subject to change over time.\15\ This commenter requested that FINRA better align and coordinate reporting changes both internally and with the MSRB. Coordination was requested to reduce the burden on updating technology and compliance processes by packaging potential changes together, thereby alleviating multiple changes at different times in the same year.\16\ This same commenter requested that FINRA and the MSRB work more closely to coordinate and use similar approaches and methodologies for trade reporting that would lower costs of implementation and maintenance.\17\ --------------------------------------------------------------------------- \15\ See SIFMA Letter at 2. \16\ See id. \17\ See id. --------------------------------------------------------------------------- The other commenter was opposed to the proposal's requirement to identify and suppress back-to-back trades done with a non-member affiliate.\18\ This commenter believed that the effort and cost to implement the change would be unduly burdensome.\19\ --------------------------------------------------------------------------- \18\ See Thomson Reuters Letter at 3. \19\ See id. --------------------------------------------------------------------------- Both commenters requested an extension in the implementation timeline of four \20\ to six \21\ months for technological implementation. One commenter requested the additional time to provide sufficient time for implementation and to be less disruptive to the technology budgets, plans, and priorities for 2015.\22\ The commenter stated that the proposed timeframe was ``too aggressive'' and would ``add to what already is a collective strain on industry technology and compliance resources and subject matter expertise.'' \23\ --------------------------------------------------------------------------- \20\ See SIFMA Letter at 1 (requesting an implementation period of four to five months). \21\ See Thomson Reuters Letter at 2 (requesting an implementation period of ``not less than six months. . .''). \22\ See Thomson Reuters Letter at 2. \23\ Id. --------------------------------------------------------------------------- FINRA's Response In response to these comments concerning the implementation and application of the proposed rule change, FINRA filed Amendment No. 1.\24\ FINRA extended the time period for implementation, as described above, and provided guidance on classifying an entity as a non-member affiliate. FINRA also reaffirmed that it would ``continue to coordinate with other regulators, where practicable.'' \25\ --------------------------------------------------------------------------- \24\ See supra note 5. \25\ FINRA Response Letter at note 7. --------------------------------------------------------------------------- In addition, FINRA agreed that there are instances where including the Suppression Indicator would cause operational difficulties. Therefore, FINRA clarified that, when a member and a non-member affiliate enter into a transaction in a TRACE-Eligible Security and do not initially include the Suppression Indicator but meet the Suppression Criteria during the day, the member would not be required to correct the trade report to include the Suppression Indicator.\26\ However, if the Suppression Indicator is included but ultimately the transaction does not meet the Suppression Criteria, the member must correct the prior trade report and remove the Suppression Indicator.\27\ --------------------------------------------------------------------------- \26\ See FINRA Response Letter at 4-5 (stating that ``where a member does not append the non-member affiliate--principal transaction indicator to a trade report reflecting a transaction with a non-member affiliate that ultimately proved to have been the initial leg of a same day, same price trade with another contra- party, the member would not be required to correct the prior trade report solely for the purpose of appending the indicator so long as the member did not reasonably expect (at the time of the initial trade report) to engage in a subsequent same day, same price transaction in the same security with another contra-party''). \27\ See FINRA Response Letter at 5. --------------------------------------------------------------------------- FINRA indicated that a member may conduct a periodic assessment of its affiliate relationships to determine whether a relationship qualifies for non-member affiliate identification requirements. The member may conduct a periodic assessment, no less than annually, unless the member has undergone an organizational or operational restructuring that would likely impact its prior identification of non-member affiliate relationships.\28\ --------------------------------------------------------------------------- \28\ See id. --------------------------------------------------------------------------- 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 CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-FINRA-2014-050 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-FINRA-2014-050. 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 will also be available for inspection and copying at the principal office of FINRA. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR-FINRA-2014-050 and should be submitted on or before April 7, 2015. V. Commission Findings After carefully considering the proposed rule change, the comments submitted, and FINRA's response to the comments and Amendment No. 1, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities association.\29\ In particular, the Commission finds that the proposed rule change, as modified by Amendment No. 1, is consistent with Section 15A(b)(6) of the Act,\30\ which requires, among other things, that FINRA rules be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \29\ In approving this proposed rule change, the Commission has considered the proposed rule change's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). \30\ 15 U.S.C. 78o-3(b)(6). --------------------------------------------------------------------------- The proposal requires a reporting member to include a new ``non- member affiliate'' identifier in the reports of a transaction in a TRACE-Eligible Security, and to identify a narrow subset [[Page 13943]] of such transactions that meet the Suppression Criteria. FINRA stated that this additional information would facilitate a more effective surveillance program and improve post-trade transparency. The Commission believes that these new requirements are reasonably designed to carry out these objectives and are therefore consistent with the Act. Furthermore, the Commission does not believe that commenters raised any issue that would preclude approval of this proposal, and that FINRA reasonably responded to the comments in Amendment No. 1. VI. Accelerated Approval The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,\31\ for approving the proposed rule change, as modified by Amendment No. 1 thereto, prior to the 30th day after publication of Amendment No. 1 in the Federal Register. Amendment No. 1 responds to the specific issue regarding the implementation timeframe raised by both comment letters. Furthermore, Amendment No. 1 clarifies when the Suppression Indicator should be included as well as when to determine non-member affiliate status. The Commission notes that the rest of the proposed rule change is not being amended and was subject to a full notice-and-comment period. These revisions add clarity to the proposal and do not raise any novel regulatory concerns. Accordingly, the Commission finds that good cause exists to approve the proposal, as modified by Amendment No. 1, on an accelerated basis. --------------------------------------------------------------------------- \31\ 15 U.S.C. 78s(b)(2). --------------------------------------------------------------------------- VII. Conclusion IT IS THEREFORE ORDERED pursuant to Section 19(b)(2) of the Act \32\ that the proposed rule change (SR-FINRA-2014-050), as modified by Amendment No. 1, be and hereby is approved on an accelerated basis. --------------------------------------------------------------------------- \32\ 15 U.S.C. 78s(b)(2). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\33\ --------------------------------------------------------------------------- \33\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-06012 Filed 3-16-15; 8:45 am] BILLING CODE 8011-01-P
![13940 Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices
that also assess different transaction fees highly competitive market in which post all comments on the Commission’s
for non-Penny Pilot options classes as market participants can readily favor Internet Web site (http://www.sec.gov/
compared to Penny Pilot options competing venues if they deem fee rules/sro.shtml). Copies of the
classes. The Exchange believes that levels at a particular venue to be submission, all subsequent
establishing different pricing for non- excessive. In such an environment, the amendments, all written statements
Penny Pilot options and Penny Pilot Exchange must continually adjust its with respect to the proposed rule
options is reasonable, equitable, and not fees to remain competitive with other change that are filed with the
unfairly discriminatory because Penny exchanges and to attract order flow. The Commission, and all written
Pilot options are more liquid options as Exchange believes that the proposal communications relating to the
compared to non-Penny Pilot options. reflects this competitive environment. proposed rule change between the
Additionally, other competing options Commission and any person, other than
exchanges differentiate pricing in the C. Self-Regulatory Organization’s
those that may be withheld from the
similar manner today.9 Statement on Comments on the
public in accordance with the
Proposed Rule Change Received From
B. Self-Regulatory Organization’s provisions of 5 U.S.C. 552, will be
Members, Participants or Others
Statement on Burden on Competition available for Web site viewing and
Written comments were neither printing in the Commission’s Public
The Exchange does not believe that solicited nor received. Reference Room, 100 F Street NE.,
the proposed rule change will impose Washington, DC 20549, on official
any burden on competition not III. Date of Effectiveness of the
Proposed Rule Change and Timing for business days between the hours of
necessary or appropriate in furtherance 10:00 a.m. and 3:00 p.m. Copies of such
of the purposes of the Act. The proposal Commission Action
filing also will be available for
is similar to the transaction fees found The foregoing rule change has become inspection and copying at the principal
on other options exchanges; therefore, effective pursuant to Section office of the Exchange. All comments
the Exchange believes the proposal is 19(b)(3)(A)(ii) of the Act.10 At any time received will be posted without change;
consistent with robust competition by within 60 days of the filing of the the Commission does not edit personal
increasing the intermarket competition proposed rule change, the Commission identifying information from
for order flow from market participants. summarily may temporarily suspend submissions. You should submit only
The proposal more closely aligns the such rule change if it appears to the information that you wish to make
fees for Public Customers that is not a Commission that such action is available publicly. All submissions
Priority Customer and Firms to those of necessary or appropriate in the public should refer to File Number SR–MIAX–
non-MIAX Market Makers and non- interest, for the protection of investors, 2015–16 and should be submitted on or
Member Broker-dealers. To the extent or otherwise in furtherance of the before April 7, 2015.
that there is additional competitive purposes of the Act. If the Commission
burden on non-member market takes such action, the Commission shall For the Commission, by the Division of
participants, the Exchange believes that Trading and Markets, pursuant to delegated
institute proceedings to determine authority.11
this is appropriate because charging whether the proposed rule should be
non-members higher transaction fees is Brent J. Fields,
approved or disapproved.
a common practice amongst exchanges Secretary.
and Members are subject to other fees IV. Solicitation of Comments [FR Doc. 2015–06009 Filed 3–16–15; 8:45 am]
and dues associated with their Interested persons are invited to BILLING CODE 8011–01–P
membership to the Exchange that do not submit written data, views and
apply to non-members. To the extent arguments concerning the foregoing,
that there is additional competitive including whether the proposed rule SECURITIES AND EXCHANGE
burden on market participants that are change is consistent with the Act. COMMISSION
Public Customer not Priority Customers Comments may be submitted by any of [Release No. 34–74482; File No. SR–FINRA–
or Firms, the Exchange believes that this the following methods: 2014–050]
is appropriate because the proposal
should incent Members to direct Electronic Comments
Self-Regulatory Organizations;
additional order flow to the Exchange • Use the Commission’s Internet Financial Industry Regulatory
and thus provide additional liquidity comment form (http://www.sec.gov/ Authority, Inc; Notice of Filing of
that enhances the quality of its markets rules/sro.shtml); or Amendment No. 1 and Order Granting
and increases the volume of contracts • Send an email to rule-comments@ Accelerated Approval of a Proposed
traded here. To the extent that this sec.gov. Please include File Number SR– Rule Change, as Amended, To Require
purpose is achieved, all the Exchange’s MIAX–2015–16 on the subject line. a Member To Identify Transactions
market participants should benefit from With a Non-Member Affiliate and To
Paper Comments
the improved market liquidity. Change How FINRA Disseminates a
Enhanced market quality and increased • Send paper comments in triplicate
Subset of Such Transactions
transaction volume that results from the to Brent J. Fields, Secretary, Securities
anticipated increase in order flow and Exchange Commission, 100 F Street March 11, 2015
directed to the Exchange will benefit all NE., Washington, DC 20549.
I. Introduction
market participants and improve All submissions should refer to File
On November 21, 2014, the Financial
mstockstill on DSK4VPTVN1PROD with NOTICES
competition on the Exchange. The Number SR–MIAX–2015–16. This file
Exchange notes that it operates in a number should be included on the Industry Regulatory Authority, Inc.
subject line if email is used. To help the (‘‘FINRA’’) filed with the Securities and
9 See NASDAQ OMX PHLX LLC Pricing
Commission process and review your Exchange Commission (‘‘Commission’’),
Schedule, Section II; NYSE Amex Options Fee comments more efficiently, please use pursuant to Section 19(b)(1) of the
Schedule, p. 6; Chicago Board Options Exchange, Securities Exchange Act of 1934
Incorporated, Fee Schedule, p. 1. See also Securities only one method. The Commission will
Exchange Act Release No. 68556 (January 2, 2013),
78 FR 1293 (January 8, 2013) (SR–BX–2012–074). 10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 200.30–3(a)(12).
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![Federal Register / Vol. 80, No. 51 / Tuesday, March 17, 2015 / Notices 13943
of such transactions that meet the SECURITIES AND EXCHANGE Exchange has prepared summaries, set
Suppression Criteria. FINRA stated that COMMISSION forth in sections A, B, and C below, of
this additional information would the most significant aspects of such
[Release No. 34–74475; File No. SR– statements.
facilitate a more effective surveillance
NASDAQ–2015–019]
program and improve post-trade A. Self-Regulatory Organization’s
transparency. The Commission believes Self-Regulatory Organizations; The Statement of the Purpose of, and
that these new requirements are NASDAQ Stock Market LLC; Notice of Statutory Basis for, the Proposed Rule
reasonably designed to carry out these Filing and Immediate Effectiveness of Change
objectives and are therefore consistent Proposed Rule Change Relating to
with the Act. Furthermore, the Penny Pilot Options 1. Purpose
Commission does not believe that
March 11, 2015. NASDAQ proposes to modify Chapter
commenters raised any issue that would
Pursuant to Section 19(b)(1) of the XV, entitled ‘‘Options Pricing,’’ at
preclude approval of this proposal, and
Securities Exchange Act of 1934 Section 2(1) governing the fees assessed
that FINRA reasonably responded to the for option orders entered into NOM.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
comments in Amendment No. 1. Specifically, the Exchange proposes to
notice is hereby given that on February
VI. Accelerated Approval 27, 2015, The NASDAQ Stock Market increase the Professional,4 Firm,5 NOM
LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed Market Maker,6 Non-NOM Market
The Commission finds good cause, with the Securities and Exchange Maker,7 and Broker-Dealer 8 Penny Pilot
pursuant to Section 19(b)(2) of the Commission (‘‘SEC’’ or ‘‘Commission’’) Options 9 Fees for Removing Liquidity.
Act,31 for approving the proposed rule the proposed rule change as described
change, as modified by Amendment No. in Items I, II, and III, below, which Items 4 The term ‘‘Professional’’ means any person or
1 thereto, prior to the 30th day after have been prepared by NASDAQ. The entity that (i) is not a broker or dealer in securities,
and (ii) places more than 390 orders in listed
publication of Amendment No. 1 in the Commission is publishing this notice to options per day on average during a calendar month
Federal Register. Amendment No. 1 solicit comments on the proposed rule for its own beneficial account(s) pursuant to
responds to the specific issue regarding change from interested persons. Chapter I, Section 1(a)(48). All Professional orders
the implementation timeframe raised by shall be appropriately marked by Participants. The
I. Self-Regulatory Organization’s Exchange initially established Professional pricing
both comment letters. Furthermore, Statement of the Terms of Substance of in order to ‘‘. . . bring additional revenue to the
Amendment No. 1 clarifies when the the Proposed Rule Change Exchange.’’ See Securities Exchange Act Release
Suppression Indicator should be No. 64494 (May 13, 2011), 76 FR 29014 (May 19,
included as well as when to determine NASDAQ proposes to modify Chapter 2011) (SR–NASDAQ–2011–066). In this filing, the
XV, entitled ‘‘Options Pricing,’’ at Exchange addressed the perceived favorable pricing
non-member affiliate status. The of Professionals who were assessed fees and paid
Commission notes that the rest of the Section 2 governing pricing for rebates like a Customer prior to the filing; and noted
NASDAQ members using the NASDAQ that a Professional, unlike a retail Customer, has
proposed rule change is not being
Options Market (‘‘NOM’’),3 NASDAQ’s access to sophisticated trading systems that contain
amended and was subject to a full functionality not available to retail Customers.
facility for executing and routing
notice-and-comment period. These 5 The term ‘‘Firm’’ applies to any transaction that
standardized equity and index options. is identified by a member or member organization
revisions add clarity to the proposal and Specifically, NOM proposes to amend for clearing in the Firm range at The Options
do not raise any novel regulatory certain Fees for Removing Liquidity. Clearing Corporation (‘‘OCC’’).
concerns. Accordingly, the Commission While the changes proposed herein 6 The term ‘‘NOM Market Maker’’ means a
finds that good cause exists to approve are effective upon filing, the Exchange Participant that has registered as a Market Maker on
the proposal, as modified by NOM pursuant to Chapter VII, Section 2, and must
has designated that the amendments be also remain in good standing pursuant to Chapter
Amendment No. 1, on an accelerated operative on March 2, 2015. VII, Section 4. In order to receive NOM Market
basis. The text of the proposed rule change Maker pricing in all securities, the Participant must
is available on the Exchange’s Web site be registered as a NOM Market Maker in at least one
VII. Conclusion security. See Chapter XV. ‘‘Participant’’ means a
at http:// firm, or organization that is registered with the
IT IS THEREFORE ORDERED www.nasdaq.cchwallstreet.com, at the Exchange pursuant to Chapter II of these Rules for
pursuant to Section 19(b)(2) of the Act 32 principal office of the Exchange, and at purposes of participating in options trading on
the Commission’s Public Reference NOM as a ‘‘Nasdaq Options Order Entry Firm’’ or
that the proposed rule change (SR– ‘‘Nasdaq Options Market Maker’’. See Chapter I,
FINRA–2014–050), as modified by Room. Section (a)(40).
Amendment No. 1, be and hereby is II. Self-Regulatory Organization’s
7 The term ‘‘Non-NOM Market Maker’’ is a
approved on an accelerated basis. registered market maker on another options
Statement of the Purpose of, and exchange that is not a NOM Market Maker. A Non-
For the Commission, by the Division of Statutory Basis for, the Proposed Rule NOM Market Maker must append the proper Non-
Trading and Markets, pursuant to delegated Change NOM Market Maker designation to orders routed to
NOM.
authority.33 In its filing with the Commission, the 8 The term ‘‘Broker-Dealer’’ applies to any
Brent J. Fields, Exchange included statements transaction which is not subject to any of the other
Secretary. concerning the purpose of and basis for transaction fees applicable within a particular
category.
[FR Doc. 2015–06012 Filed 3–16–15; 8:45 am] the proposed rule change and discussed 9 The Penny Pilot was established in March 2008
BILLING CODE 8011–01–P
any comments it received on the and was last extended in 2014. See Securities
proposed rule change. The text of these Exchange Act Release Nos. 57579 (March 28, 2008),
mstockstill on DSK4VPTVN1PROD with NOTICES
statements may be examined at the 73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008–
places specified in Item IV below. The 026) (notice of filing and immediate effectiveness
establishing Penny Pilot); and 73686 (November 25,
2014), 79 FR 71477 (December 2, 2014) (SR–
1 15 U.S.C. 78s(b)(1). NASDAQ–2014–115) (notice of filing and
2 17 CFR 240.19b–4.
31 15
immediate effectiveness extending the Penny Pilot
U.S.C. 78s(b)(2). 3 NOM is a facility of NASDAQ. References in through June 30, 2015). All Penny Pilot Options
32 15 U.S.C. 78s(b)(2).
this proposal to Chapter and Series refer to NOM listed on the Exchange can be found at http://
33 17 CFR 200.30–3(a)(12). rules, unless otherwise indicated. www.nasdaqtrader.com/Micro.aspx?id=phlx.
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Document Created: 2015-12-18 12:01:08
Document Modified: 2015-12-18 12:01:08
| Category | Regulatory Information | |
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| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| FR Citation | 80 FR 13940 |
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