80 FR 50678 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rules 7014 and 7018
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 161 (August 20, 2015)
Federal Register Volume 80, Issue 161 (August 20, 2015)
| Page Range | 50678-50681 | |
| FR Document | 2015-20545 |
[Federal Register Volume 80, Number 161 (Thursday, August 20, 2015)] [Notices] [Pages 50678-50681] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-20545] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-75701; File No. SR-NASDAQ-2015-099] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Nasdaq Rules 7014 and 7018 August 14, 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 August 12, 2015, The NASDAQ Stock Market [[Page 50679]] 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 the Substance of the Proposed Rule Change Nasdaq is proposing changes to the national best bid or best offer (``NBBO'') program (``NBBO Program'') in Nasdaq Rule 7014, as well as proposed changes to amend Nasdaq Rule 7018, governing fees and credits assessed for execution and routing of securities. The text of the proposed rule change is available at nasdaq.cchwallstreet.com at Nasdaq 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 proposes to amend a qualification to receive a certain credit for execution and routing of orders in Nasdaq Rule 7018. Specifically, the proposed rule change applies to qualification to receive a credit in Rule 7018(a)(1), (2) and (3) and, respectively, the securities listed on Nasdaq (``Tape C''), the securities listed on the New York Stock Exchange (``NYSE'') (``Tape A'') and on exchanges other than Nasdaq and NYSE (``Tape B'') (collectively, the ``Tapes''). Currently, a $0.0029 per share executed credit is provided to member firms that add Customer,\3\ Professional,\4\ Firm,\5\ Non-Nasdaq Options Market (``NOM'') market maker \6\ and/or broker-dealer \7\ liquidity in Penny Pilot Options \8\ and/or Non-Penny Pilot Options \9\ of 1.25% or more of total industry average daily volume (``ADV'') in the customer clearing range for equity and ETF option contracts per day, in a month on NOM. The Exchange proposes to adjust the criteria from 1.25% to 1.15% or more of total industry ADV. The Exchange believes the revised criteria to receive the credit will provide a greater incentive to Nasdaq market participants to also provide liquidity in NOM. --------------------------------------------------------------------------- \3\ As defined by NASDAQ Options Rules, Chapter XV. \4\ Id. \5\ Id. \6\ Id. \7\ Id. \8\ The Penny Pilot allows market participants to quote in penny increments in certains series of options classes and is designed to narrow the average quoted spreads in all classes in the Pilot, which may result in customers and other market participants to [sic] trade options at better prices. See NASDAQ Options Rules, Chapter XV, Sec. 2(1). \9\Id. --------------------------------------------------------------------------- The Exchange also proposes to amend the NBBO Program under Nasdaq Rule 7014(g). The NBBO Program provides a per share executed rebate \10\ with respect to all other displayed orders (other than Designated Retail Orders, as defined in Nasdaq Rule 7018) in securities priced at $1 or more per share that provide liquidity and establish the NBBO. Nasdaq is proposing to harmonize the qualification criteria a member firm must meet to receive a rebate under the program for all three Tapes. Currently, a member firm may qualify for a $0.0002 per share executed NBBO Program rebate in the securities of all three Tapes [sic]: (1) Executes shares of liquidity provided in all securities through one or more of its Nasdaq Market Center MPIDs that represents 0.475% or more of Consolidated Volume during the month; or (2) Adds NOM Market Maker liquidity, as defined in Chapter XV, Section 2 of the Nasdaq Options Market rules, in Penny Pilot Options and/or Non-Penny Pilot Options above 0.90% of total industry customer equity and ETF option ADV contracts per day in a month. A member firm may qualify for a $0.0004 per share executed NBBO Program rebate in Tape A securities in lieu of the $0.0002 per share executed rebate if it executes shares of liquidity provided in all securities through one or more of its Nasdaq Market Center MPIDs that represents 0.50% or more of Consolidated Volume during the month. The Exchange proposes to increase the level of Consolidated Volume required to qualify for a $0.0002 per share executed rebate from 0.475% to 0.50%, which is the level of Consolidated Volume required to receive the $0.0004 per share executed rebate. As a consequence of increasing the required level of Consolidated Volume to receive the $0.0002 per share executed rebate to that of the current $0.0004 per share executed rebate in Tape A securities, member firms will no longer have an option to qualify for a $0.0002 per share executed rebate in Tape A securities. In addition, the Exchange is extending the optional NOM-based qualification criteria, currently only available for the $0.0002 NBBO program rebate, to rebates of $0.0004 in Tape A securities. As a consequence of these changes, the same qualification criteria will apply to all three Tapes, with only the amount of rebate provided differing. As such, the Exchange is proposing to integrate the current rule text under Rule 7014(g) that sets forth the qualification requirements for each NBBO Program rebate into a single requirement under the rule. --------------------------------------------------------------------------- \10\ The rebate is provided in addition to any rebate or credit payable under Nasdaq Rule 7018(a) and the Investor Support Program and Qualified Market Maker Progam under Nasdaq Rule 7014. --------------------------------------------------------------------------- 2. Statutory Basis Nasdaq believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,\11\ in general, and with Sections 6(b)(4) and 6(b)(5) of the Act,\12\ 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 designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and 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; and are not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f. \12\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- Nasdaq believes that the proposed changes to Nasdaq Rule 7018(a)(1), (2) and (3) to amend a qualification to receive the $0.0029 per share executed credit applied to securities of all three Tapes provided to member firms that add Customer, Professional, Firm, Non-NOM market maker and/or broker-dealer liquidity in Penny Pilot Options and/ or Non-Penny Pilot Options of 1.15% (decreasing from current 1.25%) [[Page 50680]] or more of total industry ADV in the customer clearing range for equity and ETF option contracts per day, in a month on NOM is reasonable because the Exchange believes the revised criteria to receive the credit will provide a greater incentive to Nasdaq market participants to also provide liquidity in NOM. The Exchange also believes that the proposed rule changes [sic] is equitable and not unfairly discriminatory because the amended qualification to receive the credit is applied uniformly to securities of all three Tapes and it is immediately available to all market participants that qualify. The Exchange believes the proposed changes that harmonize the criteria required to qualify for a rebate under the NBBO Program are reasonable because they will continue to provide incentives to market participants to improve the NBBO and increase their participation on the Exchange. In particular, increasing the Consolidated Volume required to qualify for a $0.0002 per share executed rebate under Rule 7014(g)(1) from 0.475% to 0.5% represents a modest increase to the requirement in return for the rebate, which the Exchange believes will continue to provide incentive to market participants with attainable criteria. Moreover, the Exchange believes that it is reasonable to apply a higher Consolidated Volume requirement to receive a rebate in Tape B and C securities notwithstanding that the amount of the rebate is lower than that of Tape A because the market in terms of setting the NBBO in Tape B and C securities is sufficiently robust to support higher requirements. As such, the Exchange believes that requiring member firms to provide more market-improving Consolidated Volume in return for the rebate is reasonable. The Exchange also believes that extending the NOM-based means by which a member firm may qualify for a rebate under Rule 7014(g)(2) to the $0.0004 rebate in Tape A securities under the program is reasonable because it will provide market participants another means by which they may qualify for a rebate, which is [sic] currently available as an option to qualify for the $0.0002 rebate. Additionally, Nasdaq believes the proposed changes to Rule 7014(g) are equitable and not unfairly discriminatory because all members that qualify under the conditions described above are eligible to receive the rebate under the NBBO Program. The NBBO Program is intended to encourage members to add liquidity at prices that benefit all Nasdaq market participants and the Nasdaq market itself, and enhance price discovery. Also, the Exchange believes that increasing the level of Consolidated Volume required to receive a rebate in Tape B and C securities under the NBBO Program is equitable and not unfairly discriminatory because it is the same level of Consolidated Volume currently required to qualify for a $0.0004 per share executed rebate in Tape A securities. As such, all market participants will receive a rebate if they meet the same Consolidated Volume requirement. The Exchange believes that making the NOM-based qualifying criteria of Rule 7014(g)(2) available to member firms in Tape A securities is an [sic] equitable and not unfairly discriminatory because all member firms will have the option to qualify under this criteria. In sum, the Exchange believes that these proposed rule changes are equitable and not unfairly discriminatory because they apply uniform criteria to all member firms in return for a rebate from the Exchange, the rate at which is set by the Exchange based on the Tape of the security in which it seeks to incentivize market participants to improve the NBBO. Finally, 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. 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. Nasdaq believes that the proposed rule change reflects this competitive environment because it is designed, in part, to increase rebates for members that enhance the quality of Nasdaq's market. 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.\13\ 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 [sic]. --------------------------------------------------------------------------- \13\ 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 Nasdaq Rules 7014 and 7018 do not impose a burden on competition because the NBBO Program, as amended, still offers economically advantageous credits and is reflective of the need for exchanges to offer and to let the financial incentives to attract order flow evolve, and the change to one of the qualifications to receive a credit in Nasdaq Rule 7018(a)(1), (2) and (3) does not impose a burden on competition because Nasdaq's execution services are completely voluntary and subject to extensive competition both from other exchanges and from off-exchange venues. 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.\14\ 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. --------------------------------------------------------------------------- \14\ 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: [[Page 50681]] 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-2015-099 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-2015-099. 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 be available for inspection and copying at the principal offices 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- 099, and should be submitted on or before September 10, 2015.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Trading and Markets, pursuant to delegated authority. Robert W. Errett, Deputy Secretary. [FR Doc. 2015-20545 Filed 8-19-15; 8:45 am] BILLING CODE 8011-01-P
![50678 Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices
implementation date. The C. Self-Regulatory Organization’s All submissions should refer to File
implementation date will be no later Statement on Comments on the Number SR–CBOE–2015–069. This file
than 365 days following the effective Proposed Rule Change Received From number should be included on the
date of this filing. Members, Participants, or Others subject line if email is used. To help the
Commission process and review your
2. Statutory Basis The Exchange neither solicited nor comments more efficiently, please use
received comments on the proposed only one method. The Commission will
The Exchange believes the proposed rule change. post all comments on the Commission’s
rule change is consistent with the
III. Date of Effectiveness of the Internet Web site (http://www.sec.gov/
Securities Exchange Act of 1934 (the rules/sro.shtml). Copies of the
Proposed Rule Change and Timing for
‘‘Act’’) and the rules and regulations submission, all subsequent
Commission Action
thereunder applicable to the Exchange amendments, all written statements
and, in particular, the requirements of Because the foregoing proposed rule with respect to the proposed rule
Section 6(b) of the Act.9 Specifically, change does not (i) significantly affect change that are filed with the
the Exchange believes the proposed rule the protection of investors or the public Commission, and all written
change is consistent with the Section interest; (ii) impose any significant communications relating to the
6(b)(5) 10 requirements that the rules of burden on competition; and (iii) become proposed rule change between the
an exchange be designed to prevent operative for 30 days from the date on Commission and any person, other than
fraudulent and manipulative acts and which it was filed, or such shorter time those that may be withheld from the
practices, to promote just and equitable as the Commission may designate, it has public in accordance with the
become effective pursuant to Section provisions of 5 U.S.C. 552, will be
principles of trade, to foster cooperation
19(b)(3)(A) of the Act 12 and Rule 19b– available for Web site viewing and
and coordination with persons engaged
4(f)(6) thereunder.13 printing in the Commission’s Public
in regulating, clearing, settling,
At any time within 60 days of the Reference Room, 100 F Street NE.,
processing information with respect to,
filing of the proposed rule change, the Washington, DC 20549, on official
and facilitating transactions in
Commission summarily may business days between the hours of
securities, to remove impediments to temporarily suspend such rule change if
and perfect the mechanism of a free and 10:00 a.m. and 3:00 p.m. Copies of the
it appears to the Commission that such filing also will be available for
open market and a national market action is necessary or appropriate in the inspection and copying at the principal
system, and, in general, to protect public interest, for the protection of office of the Exchange. All comments
investors and the public interest. investors, or otherwise in furtherance of received will be posted without change;
Additionally, the Exchange believes the the purposes of the Act. If the the Commission does not edit personal
proposed rule change is consistent with Commission takes such action, the identifying information from
the Section 6(b)(5) 11 requirement that Commission will institute proceedings submissions. You should submit only
the rules of an exchange not be designed to determine whether the proposed rule information that you wish to make
to permit unfair discrimination between change should be approved or available publicly. All submissions
customers, issuers, brokers, or dealers. disapproved. should refer to File Number SR–CBOE–
In particular, the Exchange believes IV. Solicitation of Comments 2015–069 and should be submitted on
delaying the implementation deadline or before September 10, 2015.
to allow the Exchange the necessary Interested persons are invited to For the Commission, by the Division of
time to finish the modifications to the submit written data, views and Trading and Markets, pursuant to delegated
arguments concerning the foregoing, authority.14
System, which will provide the
including whether the proposed rule Robert W. Errett,
functionality to route market orders to
change is consistent with the Act. Deputy Secretary.
sell in no-bid series from a PAR
Comments may be submitted by any of [FR Doc. 2015–20543 Filed 8–19–15; 8:45 am]
workstation to an electronic order book, the following methods:
helps protect investors by ensuring the BILLING CODE 8011–01–P
PAR workstation functions as intended. Electronic Comments
B. Self-Regulatory Organization’s • Use the Commission’s Internet SECURITIES AND EXCHANGE
Statement on Burden on Competition comment form (http://www.sec.gov/ COMMISSION
rules/sro.shtml); or
CBOE does not believe that the • Send an email to rule-comments@ [Release No. 34–75701; File No. SR–
NASDAQ–2015–099]
proposed rule change will impose any sec.gov. Please include File Number SR–
burden on competition that is not CBOE–2015–069 on the subject line. Self-Regulatory Organizations; The
necessary or appropriate in furtherance Paper Comments NASDAQ Stock Market LLC; Notice of
of the purposes of the Act. More Filing and Immediate Effectiveness of
specifically, the Exchange does not • Send paper comments in triplicate Proposed Rule Change To Amend
believe that the proposed rule change to Secretary, Securities and Exchange Nasdaq Rules 7014 and 7018
will impose any burden on intramarket Commission, 100 F Street NE.,
Washington, DC 20549–1090. August 14, 2015.
or intermarket competition because this
Pursuant to Section 19(b)(1) of the
filing simply seeks to delay the
12 15 U.S.C. 78s(b)(3)(A). Securities Exchange Act of 1934
implementation deadline of SR–CBOE–
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13 17 CFR 240.19b–4(f)(6). As required under Rule (‘‘Act’’),1 and Rule 19b–4 thereunder,2
2014–067. 19b-4(f)(6)(iii), the Exchange provided the notice is hereby given that on August
Commission with written notice of its intent to file 12, 2015, The NASDAQ Stock Market
the proposed rule change, along with a brief
9 15
description and the text of the proposed rule
U.S.C. 78f(b). 14 17 CFR 200.30–3(a)(12).
change, at least five business days prior to the date
10 15 U.S.C. 78f(b)(5). 1 15
of filing of the proposed rule change, or such U.S.C. 78s(b)(1).
11 Id. shorter time as designated by the Commission. 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices 50679
LLC (‘‘Nasdaq’’ or the ‘‘Exchange’’) filed Firm,5 Non-Nasdaq Options Market to qualify for a $0.0002 per share
with the Securities and Exchange (‘‘NOM’’) market maker 6 and/or broker- executed rebate from 0.475% to 0.50%,
Commission (‘‘Commission’’) a dealer 7 liquidity in Penny Pilot which is the level of Consolidated
proposed rule change as described in Options 8 and/or Non-Penny Pilot Volume required to receive the $0.0004
Items I, II and III below, which Items Options 9 of 1.25% or more of total per share executed rebate. As a
have been prepared by the Exchange. industry average daily volume (‘‘ADV’’) consequence of increasing the required
The Commission is publishing this in the customer clearing range for equity level of Consolidated Volume to receive
notice to solicit comments on the and ETF option contracts per day, in a the $0.0002 per share executed rebate to
proposed rule change from interested month on NOM. The Exchange proposes that of the current $0.0004 per share
persons. to adjust the criteria from 1.25% to executed rebate in Tape A securities,
1.15% or more of total industry ADV. member firms will no longer have an
I. Self-Regulatory Organization’s The Exchange believes the revised option to qualify for a $0.0002 per share
Statement of the Terms of the Substance criteria to receive the credit will provide executed rebate in Tape A securities. In
of the Proposed Rule Change a greater incentive to Nasdaq market addition, the Exchange is extending the
Nasdaq is proposing changes to the participants to also provide liquidity in optional NOM-based qualification
national best bid or best offer (‘‘NBBO’’) NOM. criteria, currently only available for the
program (‘‘NBBO Program’’) in Nasdaq The Exchange also proposes to amend $0.0002 NBBO program rebate, to
Rule 7014, as well as proposed changes the NBBO Program under Nasdaq Rule rebates of $0.0004 in Tape A securities.
to amend Nasdaq Rule 7018, governing 7014(g). The NBBO Program provides a As a consequence of these changes, the
fees and credits assessed for execution per share executed rebate 10 with respect same qualification criteria will apply to
and routing of securities. to all other displayed orders (other than all three Tapes, with only the amount of
The text of the proposed rule change Designated Retail Orders, as defined in rebate provided differing. As such, the
is available at nasdaq.cchwallstreet.com Nasdaq Rule 7018) in securities priced Exchange is proposing to integrate the
at Nasdaq principal office, and at the at $1 or more per share that provide current rule text under Rule 7014(g) that
Commission’s Public Reference Room. liquidity and establish the NBBO. sets forth the qualification requirements
Nasdaq is proposing to harmonize the for each NBBO Program rebate into a
II. Self-Regulatory Organization’s qualification criteria a member firm single requirement under the rule.
Statement of the Purpose of, and must meet to receive a rebate under the
Statutory Basis for, the Proposed Rule program for all three Tapes. Currently, 2. Statutory Basis
Change a member firm may qualify for a $0.0002 Nasdaq believes that the proposed
In its filing with the Commission, per share executed NBBO Program rule change is consistent with the
Nasdaq included statements concerning rebate in the securities of all three Tapes provisions of Section 6 of the Act,11 in
the purpose of, and basis for, the [sic]: (1) Executes shares of liquidity general, and with Sections 6(b)(4) and
proposed rule change and discussed any provided in all securities through one or 6(b)(5) of the Act,12 in particular, in that
comments it received on the proposed more of its Nasdaq Market Center MPIDs it provides for the equitable allocation
rule change. The text of those that represents 0.475% or more of of reasonable dues, fees and other
statements may be examined at the Consolidated Volume during the month; charges among members and issuers and
or (2) Adds NOM Market Maker other persons using any facility or
places specified in Item IV below. The
liquidity, as defined in Chapter XV, system which Nasdaq operates or
Exchange has prepared summaries, set
Section 2 of the Nasdaq Options Market controls and is designed to prevent
forth in sections A, B, and C below, of
rules, in Penny Pilot Options and/or fraudulent and manipulative acts and
the most significant parts of such
Non-Penny Pilot Options above 0.90% practices, to promote just and equitable
statements.
of total industry customer equity and principles of trade, to foster cooperation
A. Self-Regulatory Organization’s ETF option ADV contracts per day in a and coordination with persons engaged
Statement of the Purpose of, and month. A member firm may qualify for in regulating, clearing, settling,
Statutory Basis for, the Proposed Rule a $0.0004 per share executed NBBO processing information with respect to,
Change Program rebate in Tape A securities in and facilitating transactions in
lieu of the $0.0002 per share executed securities, to remove impediments to
1. Purpose
rebate if it executes shares of liquidity and perfect the mechanism of a free and
Nasdaq proposes to amend a provided in all securities through one or open market and a national market
qualification to receive a certain credit more of its Nasdaq Market Center MPIDs system, and, in general, to protect
for execution and routing of orders in that represents 0.50% or more of investors and the public interest; and
Nasdaq Rule 7018. Specifically, the Consolidated Volume during the month. are not designed to permit unfair
proposed rule change applies to The Exchange proposes to increase the discrimination between customers,
qualification to receive a credit in Rule level of Consolidated Volume required issuers, brokers, or dealers.
7018(a)(1), (2) and (3) and, respectively, Nasdaq believes that the proposed
the securities listed on Nasdaq (‘‘Tape 5 Id. changes to Nasdaq Rule 7018(a)(1), (2)
C’’), the securities listed on the New 6 Id. and (3) to amend a qualification to
York Stock Exchange (‘‘NYSE’’) (‘‘Tape 7 Id.
receive the $0.0029 per share executed
8 The Penny Pilot allows market participants to
A’’) and on exchanges other than credit applied to securities of all three
quote in penny increments in certains series of
Nasdaq and NYSE (‘‘Tape B’’) options classes and is designed to narrow the
Tapes provided to member firms that
(collectively, the ‘‘Tapes’’). average quoted spreads in all classes in the Pilot, add Customer, Professional, Firm, Non-
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Currently, a $0.0029 per share which may result in customers and other market NOM market maker and/or broker-
executed credit is provided to member participants to [sic] trade options at better prices. dealer liquidity in Penny Pilot Options
See NASDAQ Options Rules, Chapter XV, Sec. 2(1).
firms that add Customer,3 Professional,4 9Id.
and/or Non-Penny Pilot Options of
10 The rebate is provided in addition to any rebate
1.15% (decreasing from current 1.25%)
3 As defined by NASDAQ Options Rules, Chapter
or credit payable under Nasdaq Rule 7018(a) and
XV. the Investor Support Program and Qualified Market 11 15 U.S.C. 78f.
4 Id. Maker Progam under Nasdaq Rule 7014. 12 15 U.S.C. 78f(b)(4) and (5).
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![50680 Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices
or more of total industry ADV in the and the Nasdaq market itself, and systems that have been exempted from
customer clearing range for equity and enhance price discovery. Also, the compliance with the statutory standards
ETF option contracts per day, in a Exchange believes that increasing the applicable to exchanges. Because
month on NOM is reasonable because level of Consolidated Volume required competitors are free to modify their own
the Exchange believes the revised to receive a rebate in Tape B and C fees in response, and because market
criteria to receive the credit will provide securities under the NBBO Program is participants may readily adjust their
a greater incentive to Nasdaq market equitable and not unfairly order routing practices [sic].
participants to also provide liquidity in discriminatory because it is the same Nasdaq believes that the degree to
NOM. The Exchange also believes that level of Consolidated Volume currently which fee changes in this market may
the proposed rule changes [sic] is required to qualify for a $0.0004 per impose any burden on competition is
equitable and not unfairly share executed rebate in Tape A extremely limited or even non-existent.
discriminatory because the amended securities. As such, all market In this instance, the changes to Nasdaq
qualification to receive the credit is participants will receive a rebate if they Rules 7014 and 7018 do not impose a
applied uniformly to securities of all meet the same Consolidated Volume burden on competition because the
three Tapes and it is immediately requirement. The Exchange believes that NBBO Program, as amended, still offers
available to all market participants that making the NOM-based qualifying economically advantageous credits and
qualify. criteria of Rule 7014(g)(2) available to is reflective of the need for exchanges to
The Exchange believes the proposed member firms in Tape A securities is an offer and to let the financial incentives
changes that harmonize the criteria [sic] equitable and not unfairly to attract order flow evolve, and the
required to qualify for a rebate under the discriminatory because all member change to one of the qualifications to
NBBO Program are reasonable because firms will have the option to qualify receive a credit in Nasdaq Rule
they will continue to provide incentives under this criteria. In sum, the Exchange 7018(a)(1), (2) and (3) does not impose
to market participants to improve the believes that these proposed rule a burden on competition because
NBBO and increase their participation changes are equitable and not unfairly Nasdaq’s execution services are
on the Exchange. In particular, discriminatory because they apply completely voluntary and subject to
increasing the Consolidated Volume uniform criteria to all member firms in extensive competition both from other
required to qualify for a $0.0002 per return for a rebate from the Exchange, exchanges and from off-exchange
share executed rebate under Rule the rate at which is set by the Exchange venues. While the Exchange does not
7014(g)(1) from 0.475% to 0.5% based on the Tape of the security in believe that the proposed changes will
represents a modest increase to the which it seeks to incentivize market result in any burden on competition, if
requirement in return for the rebate, participants to improve the NBBO. the changes proposed herein are
which the Exchange believes will Finally, Nasdaq notes that it operates
unattractive to market participants it is
continue to provide incentive to market in a highly competitive market in which
likely that Nasdaq will lose market
participants with attainable criteria. market participants can readily favor
share as a result.
Moreover, the Exchange believes that it competing venues if they deem fee
is reasonable to apply a higher levels at a particular venue to be C. Self-Regulatory Organization’s
Consolidated Volume requirement to excessive. In such an environment, Statement on Comments on the
receive a rebate in Tape B and C Nasdaq must continually adjust its fees Proposed Rule Change Received From
securities notwithstanding that the to remain competitive with other Members, Participants, or Others
amount of the rebate is lower than that exchanges and with alternative trading
of Tape A because the market in terms systems that have been exempted from Written comments were neither
of setting the NBBO in Tape B and C compliance with the statutory standards solicited nor received.
securities is sufficiently robust to applicable to exchanges. Nasdaq III. Date of Effectiveness of the
support higher requirements. As such, believes that the proposed rule change Proposed Rule Change and Timing for
the Exchange believes that requiring reflects this competitive environment Commission Action
member firms to provide more market- because it is designed, in part, to
improving Consolidated Volume in increase rebates for members that The foregoing change has become
return for the rebate is reasonable. The enhance the quality of Nasdaq’s market. effective pursuant to Section
Exchange also believes that extending 19(b)(3)(A)(ii) of the Act.14 At any time
B. Self-Regulatory Organization’s within 60 days of the filing of the
the NOM-based means by which a
Statement on Burden on Competition proposed rule change, the Commission
member firm may qualify for a rebate
under Rule 7014(g)(2) to the $0.0004 Nasdaq does not believe that the summarily may temporarily suspend
rebate in Tape A securities under the proposed rule changes will result in any such rule change if it appears to the
program is reasonable because it will burden on competition that is not Commission that such action is
provide market participants another necessary or appropriate in furtherance necessary or appropriate in the public
means by which they may qualify for a of the purposes of the Act, as interest, for the protection of investors,
rebate, which is [sic] currently available amended.13 Nasdaq notes that it or otherwise in furtherance of the
as an option to qualify for the $0.0002 operates in a highly competitive market purposes of the Act.
rebate. in which market participants can IV. Solicitation of Comments
Additionally, Nasdaq believes the readily favor competing venues if they
proposed changes to Rule 7014(g) are deem fee levels at a particular venue to Interested persons are invited to
equitable and not unfairly be excessive, or rebate opportunities submit written data, views, and
tkelley on DSK3SPTVN1PROD with NOTICES
discriminatory because all members that available at other venues to be more arguments concerning the foregoing,
qualify under the conditions described favorable. In such an environment, including whether the proposed rule
above are eligible to receive the rebate Nasdaq must continually adjust its fees change is consistent with the Act.
under the NBBO Program. The NBBO to remain competitive with other Comments may be submitted by any of
Program is intended to encourage exchanges and with alternative trading the following methods:
members to add liquidity at prices that
benefit all Nasdaq market participants 13 15 U.S.C. 78f(b)(8). 14 15 U.S.C. 78s(b)(3)(A)(ii).
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![Federal Register / Vol. 80, No. 161 / Thursday, August 20, 2015 / Notices 50681
Electronic Comments SECURITIES AND EXCHANGE SUPPLEMENTARY INFORMATION: The
COMMISSION following is a summary of the
• Use the Commission’s Internet application. The complete application
comment form (http://www.sec.gov/ [Investment Company Act Release No. may be obtained via the Commission’s
rules/sro.shtml); or 31761; File No. 812–14434] Web site by searching for the file
• Send an email to rule-comments@ number, or for an applicant using the
sec.gov. Please include File Number SR– Archstone Alternative Solutions Fund Company name box, at http://
NASDAQ–2015–099 on the subject line. and A.P. Management Company, LLC; www.sec.gov/search/search.htm or by
Notice of Application calling (202) 551–8090.
Paper Comments
August 14, 2015. Applicants’ Representations
• Send paper comments in triplicate AGENCY: Securities and Exchange 1. The Fund will be a continuously
to Secretary, Securities and Exchange Commission (‘‘Commission’’). offered non-diversified, closed-end
Commission, 100 F Street NE., ACTION: Notice of an application under management investment company
Washington, DC 20549–1090. section 6(c) of the Investment Company registered under the Act and organized
Act of 1940 (the ‘‘Act’’) for an as a Delaware statutory trust. The
All submissions should refer to File
exemption from sections 18(c) and 18(i) Adviser, a New York limited liability
Number SR–NASDAQ–2015–099. This
of the Act and for an order pursuant to company, is registered as an investment
file number should be included on the section 17(d) of the Act and rule 17d– adviser under the Investment Advisers
subject line if email is used. To help the 1 under the Act. Act of 1940 and serves as investment
Commission process and review your adviser to the Fund.
comments more efficiently, please use SUMMARY: Summary of Application: 2. The Fund will continuously offer
only one method. The Commission will Applicants request an order to permit a its shares pursuant to its currently
post all comments on the Commission’s registered closed-end management effective registration statement under
Internet Web site (http://www.sec.gov/ investment company to issue multiple the Securities Act of 1933 (‘‘Securities
rules/sro.shtml). Copies of the classes of shares (‘‘Classes’’) with Act’’).1 The Fund’s shares are not listed
submission, all subsequent varying sales loads and to impose asset- on any securities exchange and do not
amendments, all written statements based service and/or distribution fees. trade on an over-the-counter system
with respect to the proposed rule Applicants: Archstone Alternative such as Nasdaq. Applicants do not
change that are filed with the Solutions Fund (‘‘Fund’’) and A.P. expect that any secondary market will
Commission, and all written Management Company, LLC develop for the Fund’s shares.
communications relating to the (‘‘Adviser’’). 3. The Fund currently intends to offer
proposed rule change between the DATES: Filing Dates: The application was
a Class of shares at net asset value per
filed on March 19, 2015 and amended share (‘‘NAV’’) which will not be subject
Commission and any person, other than
on July 14, 2015. to any sales load or distribution and/or
those that may be withheld from the
service fees. The Fund proposes to offer
public in accordance with the Hearing or Notification of Hearing: An
an additional Class of shares that will
provisions of 5 U.S.C. 552, will be order granting the requested relief will
adopt a distribution and service plan in
available for Web site viewing and be issued unless the Commission orders
compliance with rules 12b-1 and 17d-3
printing in the Commission’s Public a hearing. Interested persons may
under the Act as if such rules applied
Reference Room, 100 F Street NE., request a hearing by writing to the
to closed-end management investment
Washington, DC 20549 on official Commission’s Secretary and serving
companies (‘‘Distribution and Service
business days between the hours of applicants with a copy of the request,
Plan’’) and which may be subject to a
10:00 a.m. and 3:00 p.m. Copies of such personally or by mail. Hearing requests
sales load, a distribution fee
filing also will be available for should be received by the Commission
(‘‘Distribution Fee’’), and/or a service
by 5:30 p.m. on September 9, 2015, and fee (‘‘Service Fee’’).2
inspection and copying at the principal
should be accompanied by proof of 4. In order to provide a limited degree
offices of the Exchange. All comments
service on the applicants, in the form of of liquidity to shareholders, the Fund
received will be posted without change; an affidavit, or, for lawyers, a certificate may from time to time offer to
the Commission does not edit personal of service. Pursuant to Rule 0–5 under
identifying information from repurchase shares at their then-current
the Act, hearing requests should state NAV in accordance with rule 13e–4
submissions. You should submit only the nature of the writer’s interest, any
information that you wish to make under the 1934 Act pursuant to written
facts bearing upon the desirability of a
available publicly. All submissions hearing on the matter, the reasons for 1 Shares of the Fund will only be sold to
should refer to File Number SR– the request, and the issues contested. ‘‘accredited investors’’ as defined in regulation D
NASDAQ–2015–099, and should be Persons who wish to be notified of a under the Securities Act.
2 All Classes of shares will be subject to an ‘‘early
submitted on or before September 10, hearing may request notification by
withdrawal charge’’ (‘‘Repurchase Fee’’) if a
2015.15 writing to the Commission’s Secretary. shareholder has shares repurchased during the first
For the Commission, by the Division of ADDRESSES: Secretary, U.S. Securities eleven months following such shareholder’s initial
Trading and Markets, pursuant to delegated and Exchange Commission, 100 F Street investment in the Fund. The Repurchase Fee will
apply equally to all shareholders of a Fund,
authority. NE., Washington, DC 20549–1090; regardless of Class, consistent with section 18 of the
Robert W. Errett, Applicants: 360 Madison Avenue, 20th Act and rule 18f-3 thereunder. With respect to any
Floor, New York, NY 10017. waiver of, scheduled variation in, or elimination of
tkelley on DSK3SPTVN1PROD with NOTICES
Deputy Secretary. the Repurchase Fee, the Fund will comply with rule
[FR Doc. 2015–20545 Filed 8–19–15; 8:45 am] FOR FURTHER INFORMATION CONTACT: Jaea 22d-1 under the Act as if the Repurchase Fee were
F. Hahn, Senior Counsel, at (202) 551– a contingent deferred sales charge (‘‘CDSC’’) and as
BILLING CODE 8011–01–P
6870, or David P. Bartels, Branch Chief, if the Fund were an open-end investment company
and the Fund’s waiver of, scheduled variation in,
at (202) 551–6821 (Division of or elimination of the Repurchase Fee will apply
Investment Management, Chief uniformly to all shareholders of the Fund regardless
15 17 CFR 200.30–3(a)(12). Counsel’s Office). of Class.
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Document Created: 2015-12-15 11:08:57
Document Modified: 2015-12-15 11:08:57
| 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 50678 |
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