80 FR 14427 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NASDAQ Rules 7014
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 53 (March 19, 2015)
Federal Register Volume 80, Issue 53 (March 19, 2015)
| Page Range | 14427-14428 | |
| FR Document | 2015-06264 |
[Federal Register Volume 80, Number 53 (Thursday, March 19, 2015)] [Notices] [Pages 14427-14428] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-06264] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-74506; File No. SR-NASDAQ-2015-020] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NASDAQ Rules 7014 March 13, 2015. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on March 2, 2015, The NASDAQ Stock Market LLC (``NASDAQ'' or the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') a proposed rule change as described in Items I, II, and III 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change NASDAQ is proposing changes to the Investor Support Program (``ISP'') and the Qualified Market Maker (``QMM'') Incentive Program under NASDAQ Rule 7014. The text of the proposed rule change is available at nasdaq.cchwallstreet.com, at NASDAQ's principal office, and at 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, NASDAQ included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose NASDAQ is proposing to amend NASDAQ Rule 7014(c) to remove a member's ISP credit at the $0.00005 rate with respect to all shares of displayed liquidity that are executed at a price of $1 or more in the Nasdaq Market Center during a given month, as well as the related qualifying requirements for an ISP member to qualify for such a credit. Also, the Exchange is proposing to amend NASDAQ Rule 7014(e)(1) to apply QMM rebates only to securities listed on NYSE (``Tape A'') and securities listed on exchanges other than NASDAQ and NYSE (``Tape B''). Specifically, only Tape A and Tape B securities will be eligible to receive the additional QMM rebate of $0.0002 per share executed with respect to orders that are executed at a price of $1 or more and (A) displayed a quantity of at least one round lot at the time of execution; (B) either established the NBBO or was the first order posted on NASDAQ that had the same price as an order posted at another trading center with a protected quotation that established the NBBO; (C) were entered through a QMM MPID; and (D) that no additional rebate will be issued with respect to Designated Retail Orders (as defined in NASDAQ Rule 7018) (``Additional QMM Rebate Criteria'').\3\ --------------------------------------------------------------------------- \3\ The correction of a typographical error in the numbering in the middle of NASDAQ Rule 7014(e)(1) will also be included (changing a ``(4)'' to (``E'')). --------------------------------------------------------------------------- Similarly, the Exchange is proposing to amend NASDAQ Rule 7014(e)(2) to have only Tape A and Tape B securities receive the credit of $0.0001 per share executed with respect to all other displayed orders (other than Designated Retail Orders, as defined in Rule 7018) in securities priced at $1 or more per share that provide liquidity and that are entered through a QMM MPID. The proposed changes are intended to better align credits within the ISP and QMM programs, as well as to fix a typographical error in the rule text of NASDAQ Rule 7014(e)(1). 2. Statutory Basis NASDAQ believes that the proposed rule change is consistent with the provisions of section 6 of the Act,\4\ in general, and with sections 6(b)(4) and 6(b)(5) of the Act,\5\ in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility or system which NASDAQ operates or controls, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \4\ 15 U.S.C. 78f. \5\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- NASDAQ believes that the proposed changes to the ISP Program in NASDAQ Rule 7014(c) is reasonable because it eliminates an unnecessary credit, and related qualifying requirements, at the $0.00005 rate with respect to all shares of displayed liquidity that are executed at a price of $1 or more in the Nasdaq Market Center during a given month. The Exchange believes that the two other credit tiers that remain available to ISP members provide sufficient incentive. Also, the credit proposed to be eliminated is the least economically advantageous to ISP members. The Exchange also believes this change is consistent with a fair allocation of a reasonable fee and not unfairly discriminatory because the removal of this credit applies to all ISP members equally. [[Page 14428]] The Exchange believes that the proposed change to the QMM Program in NASDAQ Rule 7014(e)(1) of only having Tape A and Tape B securities be eligible to receive the additional QMM rebate of $0.0002 per share executed with respect to orders that are executed at a price of $1 or more and that meet the Additional QMM Rebate Criteria, is reasonable because the Exchange believes that firms no longer need the additional incentive to quote at the NBBO in Nasdaq-listed securities (``Tape C''). The Exchange also believes this change is consistent with a fair allocation of a reasonable fee and not unfairly discriminatory because the additional rebate only applying to Tape A and Tape B securities will apply uniformly to all QMM members. The Exchange also believes that the proposed change to the QMM Program in NASDAQ Rule 7014(e)(2) of only having Tape A and Tape B securities receive the additional QMM credit of $0.0001 per share executed with respect to all other displayed orders (other than Designated Retail Orders, as defined in Rule 7018) in securities priced at $1 or more per share that provide liquidity and that are entered through a QMM MPID is reasonable because the Exchange believes that firms no longer need the additional incentive to quote in Tape C. The Exchange also believes that this change is consistent with a fair allocation of a reasonable fee and not unfairly discriminatory because the additional QMM credit only applying to Tape A and Tape B securities will apply uniformly to all QMM members. B. Self-Regulatory Organization's Statement on Burden on Competition NASDAQ does not believe that the proposed rule changes will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.\6\ NASDAQ notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, NASDAQ must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b)(8). --------------------------------------------------------------------------- NASDAQ believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited or even non- existent. In this instance, the changes to credits for the ISP and QMM programs do not impose a burden on competition because these NASDAQ incentive programs remain in place, still offer economically advantageous credits, and are reflective of the need for exchanges to offer and to let the financial incentives to attract order flow evolve. While the Exchange does not believe that the proposed changes will result in any burden on competition, if the changes proposed herein are unattractive to market participants it is likely that NASDAQ will lose market share as a result. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act.\7\ 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 should be approved or disapproved. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- 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-NASDAQ-2015-020 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-NASDAQ-2015-020. 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 such filing also will also 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- NASDAQ-2015-020, and should be submitted on or before April 9, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\8\ --------------------------------------------------------------------------- \8\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Brent J. Fields, Secretary. [FR Doc. 2015-06264 Filed 3-18-15; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices 14427
generally and specific penny stock with the Securities and Exchange execution; (B) either established the
transactions. Commission (‘‘Commission’’) a NBBO or was the first order posted on
The Commission estimates that proposed rule change as described in NASDAQ that had the same price as an
approximately 221 broker-dealers will Items I, II, and III below, which Items order posted at another trading center
spend an average of 87 hours annually have been prepared by the Exchange. with a protected quotation that
to comply with this rule. Thus, the total The Commission is publishing this established the NBBO; (C) were entered
compliance burden is approximately notice to solicit comments on the through a QMM MPID; and (D) that no
19,245 burden-hours per year. proposed rule change from interested additional rebate will be issued with
Rule 15g–4 contains record retention persons. respect to Designated Retail Orders (as
requirements. Compliance with the rule defined in NASDAQ Rule 7018)
I. Self-Regulatory Organization’s
is mandatory. The required records are (‘‘Additional QMM Rebate Criteria’’).3
Statement of the Terms of Substance of
available only to the examination staff Similarly, the Exchange is proposing
the Proposed Rule Change
of the Commission and the self to amend NASDAQ Rule 7014(e)(2) to
regulatory organizations of which the NASDAQ is proposing changes to the have only Tape A and Tape B securities
broker-dealer is a member. Investor Support Program (‘‘ISP’’) and receive the credit of $0.0001 per share
An agency may not conduct or the Qualified Market Maker (‘‘QMM’’) executed with respect to all other
sponsor, and a person is not required to Incentive Program under NASDAQ Rule displayed orders (other than Designated
respond to, a collection of information 7014. Retail Orders, as defined in Rule 7018)
under the PRA unless it displays a The text of the proposed rule change in securities priced at $1 or more per
currently valid OMB control number. is available at share that provide liquidity and that are
The public may view background nasdaq.cchwallstreet.com, at entered through a QMM MPID.
documentation for this information NASDAQ’s principal office, and at the The proposed changes are intended to
collection at the following Web site: Commission’s Public Reference Room. better align credits within the ISP and
www.reginfo.gov. Comments should be II. Self-Regulatory Organization’s QMM programs, as well as to fix a
directed to: (i) Desk Officer for the Statement of the Purpose of, and typographical error in the rule text of
Securities and Exchange Commission, Statutory Basis for, the Proposed Rule NASDAQ Rule 7014(e)(1).
Office of Information and Regulatory Change 2. Statutory Basis
Affairs, Office of Management and
Budget, Room 10102, New Executive In its filing with the Commission, NASDAQ believes that the proposed
Office Building, Washington, DC 20503 NASDAQ included statements rule change is consistent with the
or by sending an email to: Shagufta_ concerning the purpose of, and basis for, provisions of section 6 of the Act,4 in
Ahmed@omb.eop.gov; and (ii) Pamela the proposed rule change and discussed general, and with sections 6(b)(4) and
Dyson, Director/Chief Information any comments it received on the 6(b)(5) of the Act,5 in particular, in that
Officer, Securities and Exchange proposed rule change. The text of those it provides for the equitable allocation
Commission, c/o Remi Pavlik-Simon, statements may be examined at the of reasonable dues, fees and other
100 F Street NE., Washington, DC 20549 places specified in Item IV below. The charges among members and issuers and
or by sending an email to PRA_ Exchange has prepared summaries, set other persons using any facility or
Mailbox@sec.gov. Comments must be forth in sections A, B, and C below, of system which NASDAQ operates or
submitted to OMB within 30 days of the most significant parts of such controls, and is not designed to permit
this notice. statements. unfair discrimination between
Dated: March 13, 2015. A. Self-Regulatory Organization’s customers, issuers, brokers, or dealers.
Statement of the Purpose of, and NASDAQ believes that the proposed
Brent J. Fields,
Statutory Basis for, the Proposed Rule changes to the ISP Program in NASDAQ
Secretary.
Change Rule 7014(c) is reasonable because it
[FR Doc. 2015–06313 Filed 3–18–15; 8:45 am] eliminates an unnecessary credit, and
BILLING CODE 8011–01–P 1. Purpose related qualifying requirements, at the
NASDAQ is proposing to amend $0.00005 rate with respect to all shares
NASDAQ Rule 7014(c) to remove a of displayed liquidity that are executed
SECURITIES AND EXCHANGE at a price of $1 or more in the Nasdaq
COMMISSION member’s ISP credit at the $0.00005 rate
with respect to all shares of displayed Market Center during a given month.
[Release No. 34–74506; File No. SR– liquidity that are executed at a price of The Exchange believes that the two
NASDAQ–2015–020] $1 or more in the Nasdaq Market Center other credit tiers that remain available
during a given month, as well as the to ISP members provide sufficient
Self-Regulatory Organizations; The incentive. Also, the credit proposed to
related qualifying requirements for an
NASDAQ Stock Market LLC; Notice of be eliminated is the least economically
ISP member to qualify for such a credit.
Filing and Immediate Effectiveness of advantageous to ISP members. The
Also, the Exchange is proposing to
Proposed Rule Change To Amend Exchange also believes this change is
amend NASDAQ Rule 7014(e)(1) to
NASDAQ Rules 7014 consistent with a fair allocation of a
apply QMM rebates only to securities
March 13, 2015. listed on NYSE (‘‘Tape A’’) and reasonable fee and not unfairly
securities listed on exchanges other than discriminatory because the removal of
Pursuant to section 19(b)(1) of the
NASDAQ and NYSE (‘‘Tape B’’). this credit applies to all ISP members
Securities Exchange Act of 1934
Rmajette on DSK2VPTVN1PROD with NOTICES
Specifically, only Tape A and Tape B equally.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 2, securities will be eligible to receive the
3 The correction of a typographical error in the
2015, The NASDAQ Stock Market LLC additional QMM rebate of $0.0002 per
numbering in the middle of NASDAQ Rule
(‘‘NASDAQ’’ or the ‘‘Exchange’’) filed share executed with respect to orders 7014(e)(1) will also be included (changing a ‘‘(4)’’
that are executed at a price of $1 or to (‘‘E’’)).
1 15 U.S.C. 78s(b)(1). more and (A) displayed a quantity of at 4 15 U.S.C. 78f.
2 17 CFR 240.19b–4. least one round lot at the time of 5 15 U.S.C. 78f(b)(4) and (5).
VerDate Sep<11>2014 15:18 Mar 18, 2015 Jkt 235001 PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 E:\FR\FM\19MRN1.SGM 19MRN1](https://thefederalregister.org/doc/80_FR_14480/page/1.svg)
![14428 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices
The Exchange believes that the participants may readily adjust their Paper Comments
proposed change to the QMM Program order routing practices, • Send paper comments in triplicate
in NASDAQ Rule 7014(e)(1) of only NASDAQ believes that the degree to to Secretary, Securities and Exchange
having Tape A and Tape B securities be which fee changes in this market may Commission, 100 F Street NE.,
eligible to receive the additional QMM impose any burden on competition is Washington, DC 20549–1090.
rebate of $0.0002 per share executed extremely limited or even non-existent. All submissions should refer to File
with respect to orders that are executed In this instance, the changes to credits Number SR–NASDAQ–2015–020. This
at a price of $1 or more and that meet for the ISP and QMM programs do not file number should be included on the
the Additional QMM Rebate Criteria, is impose a burden on competition subject line if email is used. To help the
reasonable because the Exchange because these NASDAQ incentive Commission process and review your
believes that firms no longer need the programs remain in place, still offer comments more efficiently, please use
additional incentive to quote at the economically advantageous credits, and only one method. The Commission will
NBBO in Nasdaq-listed securities are reflective of the need for exchanges post all comments on the Commission’s
(‘‘Tape C’’). The Exchange also believes to offer and to let the financial Internet Web site (http://www.sec.gov/
this change is consistent with a fair incentives to attract order flow evolve. rules/sro.shtml). Copies of the
allocation of a reasonable fee and not While the Exchange does not believe submission, all subsequent
unfairly discriminatory because the that the proposed changes will result in amendments, all written statements
additional rebate only applying to Tape any burden on competition, if the with respect to the proposed rule
A and Tape B securities will apply changes proposed herein are change that are filed with the
uniformly to all QMM members. unattractive to market participants it is Commission, and all written
The Exchange also believes that the likely that NASDAQ will lose market communications relating to the
proposed change to the QMM Program share as a result. proposed rule change between the
in NASDAQ Rule 7014(e)(2) of only Commission and any person, other than
C. Self-Regulatory Organization’s
having Tape A and Tape B securities those that may be withheld from the
Statement on Comments on the
receive the additional QMM credit of public in accordance with the
Proposed Rule Change Received From
$0.0001 per share executed with respect provisions of 5 U.S.C. 552, will be
Members, Participants or Others
to all other displayed orders (other than available for Web site viewing and
Designated Retail Orders, as defined in Written comments were neither printing in the Commission’s Public
Rule 7018) in securities priced at $1 or solicited nor received. Reference Room, 100 F Street NE.,
more per share that provide liquidity Washington, DC 20549, on official
III. Date of Effectiveness of the
and that are entered through a QMM business days between the hours of
Proposed Rule Change and Timing for
MPID is reasonable because the 10:00 a.m. and 3:00 p.m. Copies of such
Commission Action
Exchange believes that firms no longer filing also will also be available for
need the additional incentive to quote The foregoing change has become inspection and copying at the principal
in Tape C. effective pursuant to section office of the Exchange. All comments
The Exchange also believes that this 19(b)(3)(A)(ii) of the Act.7 At any time received will be posted without change;
change is consistent with a fair within 60 days of the filing of the the Commission does not edit personal
allocation of a reasonable fee and not proposed rule change, the Commission identifying information from
unfairly discriminatory because the summarily may temporarily suspend submissions. You should submit only
additional QMM credit only applying to such rule change if it appears to the information that you wish to make
Tape A and Tape B securities will apply Commission that such action is available publicly. All submissions
uniformly to all QMM members. necessary or appropriate in the public should refer to File Number SR–
interest, for the protection of investors, NASDAQ–2015–020, and should be
B. Self-Regulatory Organization’s or otherwise in furtherance of the
Statement on Burden on Competition submitted on or before April 9, 2015.
purposes of the Act. If the Commission
NASDAQ does not believe that the takes such action, the Commission shall For the Commission, by the Division of
institute proceedings to determine Trading and Markets, pursuant to delegated
proposed rule changes will result in any
authority.8
burden on competition that is not whether the proposed rule should be
approved or disapproved. Brent J. Fields,
necessary or appropriate in furtherance
of the purposes of the Act, as amended.6 Secretary.
IV. Solicitation of Comments [FR Doc. 2015–06264 Filed 3–18–15; 8:45 am]
NASDAQ notes that it operates in a
highly competitive market in which Interested persons are invited to BILLING CODE 8011–01–P
market participants can readily favor submit written data, views, and
competing venues if they deem fee arguments concerning the foregoing,
levels at a particular venue to be including whether the proposed rule SECURITIES AND EXCHANGE
excessive, or rebate opportunities change is consistent with the Act. COMMISSION
available at other venues to be more Comments may be submitted by any of
the following methods: Submission for OMB Review;
favorable. In such an environment,
Comment Request
NASDAQ must continually adjust its Electronic Comments
fees to remain competitive with other Upon Written Request, Copies Available
exchanges and with alternative trading • Use the Commission’s Internet From: Securities and Exchange
Rmajette on DSK2VPTVN1PROD with NOTICES
systems that have been exempted from comment form (http://www.sec.gov/ Commission, Office of FOIA Services,
compliance with the statutory standards rules/sro.shtml); or Washington, DC 20549–2736.
applicable to exchanges. Because • Send an email to rule-comments@ Extension: Rule 15g-3,
competitors are free to modify their own sec.gov. Please include File Number SR– SEC File No. 270–346, OMB Control No.
fees in response, and because market NASDAQ–2015–020 on the subject line. 3235–0392.
6 15 U.S.C. 78f(b)(8). 7 15 U.S.C. 78s(b)(3)(A)(ii). 8 17 CFR 200.30–3(a)(12).
VerDate Sep<11>2014 15:18 Mar 18, 2015 Jkt 235001 PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 E:\FR\FM\19MRN1.SGM 19MRN1](https://thefederalregister.org/doc/80_FR_14480/page/2.svg)
Document Created: 2018-02-21 09:42:11
Document Modified: 2018-02-21 09:42:11
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 14427 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR