80 FR 70032 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify Chapter XV, Entitled “Options Pricing,” at Section 2 Governing Pricing for NASDAQ Members

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 218 (November 12, 2015)

Page Range		70032-70036
FR Document		2015-28683
Federal Register, Volume 80 Issue 218 (Thursday, November 12, 2015)
[Federal Register Volume 80, Number 218 (Thursday, November 12, 2015)]
[Notices]
[Pages 70032-70036]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-28683]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-76363; File No. SR-NASDAQ-2015-127]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify Chapter XV, Entitled ``Options Pricing,'' at Section 2 Governing 
Pricing for NASDAQ Members

November 5, 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 October 23, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's transaction fees at 
Chapter XV, Section 2 entitled ``NASDAQ Options Market--Fees and 
Rebates,'' which governs pricing for NASDAQ members using the NASDAQ 
Options Market (``NOM''), NASDAQ's facility for executing and routing 
standardized equity and index options.
    While these amendments are effective upon filing, the Exchange has 
designated the proposed amendments to be operative on November 2, 2015.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, 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, the Exchange 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 these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set

[[Page 70033]]

forth in sections A, B, and C below, of the most significant aspects of 
such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes the following two changes to the NOM 
transaction fees set forth at Chapter XV, Section 2 for executing and 
routing standardized equity and index options under the Penny Pilot \3\ 
and Non-Penny Pilot options program.
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    \3\ The Penny Pilot was established in March 2008 and has since 
been expanded and extended through June 30, 2016. See Securities 
Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR 18587 (April 
4, 2008) (SR-NASDAQ-2008-026) (notice of filing and immediate 
effectiveness establishing Penny Pilot); 60874 (October 23, 2009), 
74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091) (notice of 
filing and immediate effectiveness expanding and extending Penny 
Pilot); 60965 (November 9, 2009), 74 FR 59292 (November 17, 2009) 
(SR-NASDAQ-2009-097) (notice of filing and immediate effectiveness 
adding seventy-five classes to Penny Pilot); 61455 (February 1, 
2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-2010-013) (notice of 
filing and immediate effectiveness adding seventy-five classes to 
Penny Pilot); 62029 (May 4, 2010), 75 FR 25895 (May 10, 2010) (SR-
NASDAQ-2010-053) (notice of filing and immediate effectiveness 
adding seventy-five classes to Penny Pilot); 65969 (December 15, 
2011), 76 FR 79268 (December 21, 2011) (SR-NASDAQ-2011-169) (notice 
of filing and immediate effectiveness [sic] extension and 
replacement of Penny Pilot); 67325 (June 29, 2012), 77 FR 40127 
(July 6, 2012) (SR-NASDAQ-2012-075) (notice of filing and immediate 
effectiveness and extension and replacement of Penny Pilot through 
December 31, 2012); 68519 (December 21, 2012), 78 FR 136 (January 2, 
2013) (SR-NASDAQ-2012-143) (notice of filing and immediate 
effectiveness and extension and replacement of Penny Pilot through 
June 30, 2013); 69787 (June 18, 2013), 78 FR 37858 (June 24, 2013) 
(SR-NASDAQ-2013-082) (notice of filing and immediate effectiveness 
and extension and replacement of Penny Pilot through December 31, 
2013); 71105 (December 17, 2013), 78 FR 77530 (December 23, 2013) 
(SR-NASDAQ-2013-154) (notice of filing and immediate effectiveness 
and extension and replacement of Penny Pilot through June 30, 2014); 
79 FR 31151 [sic] (May 23, 2014), 79 FR 31151 (May 30, 2014) (SR-
NASDAQ-2014-056) (notice of filing and immediate effectiveness and 
extension and replacement of Penny Pilot through December 31, 2014); 
73686 (December 2, 2014), 79 FR 71477 (November 25, 2014) (SR-
NASDAQ-2014-115) (notice of filing and immediate effectiveness and 
extension and replacement of Penny Pilot through June 30, 2015) and 
75283 (June 24, 2015), 80 FR 37347 (June 30, 2015) (SR-NASDAQ-2015-
063) (Notice of Filing and Immediate Effectiveness of a Proposed 
Rule Change Relating to Extension of the Exchange's Penny Pilot 
Program and Replacement of Penny Pilot Issues That Have Been 
Delisted.) See also NOM Rules, Chapter VI, Section 5.
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    The proposed changes are as follows:
    Fees for Removing Liquidity in Penny Pilot Options: the Exchange 
proposes to:
    1. Decrease fees from $0.54 to $0.50 per contract for all 
Participant categories other than Customer, which remains at $0.48.
    2. Removes the Fees for Removing liquidity in SPY,\4\ which will be 
equivalent to other Fees for Removing Liquidity in Penny Pilot Options.
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    \4\ SPDR[supreg] S&P 500[supreg] ETF Trust.
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    3. Renumber current note ``3'' as note ``1'' in Chapter XX [sic], 
Section 2(1).
    Rebate to Add Liquidity in Penny Pilot Options: the Exchange 
proposes to
    1. Remove note ``d'' of Chapter XV, Section 2(1) because this 
incentive to reduce certain Fees for Removing Liquidity in Penny Pilot 
Options is no longer relevant as those fees are being reduced herein.
    2. Amend note ``e'' of Chapter XV, Section 2(1) to reduce one of 
the incentives being offered to Participants that qualify for Tier 8 of 
the Customer and Professional Penny Pilot Options Rebates to Add 
Liquidity and amend qualifications for the rebate to ``in a month.''
    3. Renumber current note ``e'' as note ``c'' in Chapter XV, Section 
2(1).
    Each specific change is described in greater detail below.
Change 1--Fees for Removing Liquidity in Penny Pilot Options
    The Exchange proposes, beginning November 2, 2015, to decrease from 
$0.54 to $0.50 per contract the Fees for Removing Liquidity in Penny 
Pilot Options for all Participant categories other than Customer,\5\ 
which will remain unchanged at $0.48. This will represent a decrease of 
$0.04 per contract of liquidity removed in the Professional,\6\ 
Firm,\7\ NOM Market Maker,\8\ Non-NOM Market Maker,\9\ and Broker 
Dealer \10\ categories. The Exchange believes that these fee reductions 
will benefit market participants and encourage them to send greater 
order flow to NOM.
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    \5\ The term ``Customer'' applies to any transaction that is 
identified by a Participant for clearing in the Customer range at 
The Options Clearing Corporation (``OCC'') which is not for the 
account of [sic] broker or dealer or for the account of a 
``Professional'' (as that term is defined in Chapter I, Section 
1(a)(48)).
    \6\ The term ``Professional'' means any person or entity that 
(i) is not a broker or dealer in securities, and (ii) places more 
than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s) pursuant to Chapter 
I, Section 1(a)(48). All Professional orders shall be appropriately 
marked by Participants.
    \7\ The term ``Firm'' or (``F'') applies to any transaction that 
is identified by a Participant for clearing in the Firm range at 
OCC.
    \8\ The term ``NOM Market Maker'' or (``M'') is a Participant 
that has registered as a Market Maker on NOM pursuant to Chapter 
VII, Section 2, and must also remain in good standing pursuant to 
Chapter VII, Section 4. In order to receive NOM Market Maker pricing 
in all securities, the Participant must be registered as a NOM 
Market Maker in at least one security.
    \9\ The term ``Non-NOM Market Maker'' or (``O'') is a registered 
market maker on another options exchange that is not a NOM Market 
Maker. A Non-NOM Market Maker must append the proper Non-NOM Market 
Maker designation to orders routed to NOM.
    \10\ The term ``Broker-Dealer'' or (``B'') applies to any 
transaction which is not subject to any of the other transaction 
fees applicable within a particular category.
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    The Exchange also proposes to remove the current fees listed in 
Chapter XV, Section 2(1) for executions in SPY, as these fees will now 
be the same fees assessed for all other Penny Pilot Options and are 
simply redundant with the proposed changes herein. Specifically, the 
fees assessed for executions in SPY will remain $0.48 per contact for 
Customer and $0.50 per contract for all other Participants, the same 
fees proposed herein for all other Penny Pilot Options.
    The Exchange also proposes to renumber current note ``3'' as note 
``1'' in Chapter XX [sic], Section 2(1) as notes ``1'' and ``2'' were 
previously eliminated.
Change 2--Rebate To Add Liquidity in Penny Pilot Options
    The Exchange is proposing to remove note ``d'' of Chapter XV, 
Section 2(1) because this incentive to reduce certain Fees for Removing 
Liquidity in Penny Pilot Options is no longer relevant as those fees 
are being reduced. Note ``d'' currently states:

    Participants that qualify for Customer or Professional Rebate to 
Add Liquidity Tier 8 in a given month will be assessed a 
Professional, Firm, Non-NOM Market Maker, NOM Market Maker or 
Broker-Dealer Fee for Removing Liquidity in Penny Pilot Options of 
$0.50 per contract

    The Exchange's proposal in Change 1 would reduce the Fees for 
Removing Liquidity in Penny Pilot Options for Professionals, Firms, NOM 
Market Makers, Non-NOM Market Makers, and Broker Dealers to $0.50 per 
contract. This incentive would no longer be relevant and the Exchange 
is therefore proposing to remove note ``d.''
    The Exchange also proposes to amend note ``e'' of Chapter XV, 
Section 2(1) to reduce one of the incentives being offered to 
Participants that qualify for Tier 8 of the Customer and Professional 
Penny Pilot Options Rebates to Add Liquidity.\11\ Note ``e'' currently 
states:
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    \11\ Participant adds Customer, Professional, Firm, Non-NOM 
Market Maker and/or Broker-Dealer liquidity in Penny Pilot Options 
and/or Non-Penny Pilot Options above 0.75% or more of total industry 
customer equity and ETF option ADV contracts per day in a month or 
Participant adds (1) Customer and/or Professional liquidity in Penny 
Pilot Options and/or Non-Penny Pilot Options of 30,000 or more 
contracts per day in a month, (2) the Participant has certified for 
the Investor Support Program set forth in Rule 7014, and (3) the 
Participant qualifies for rebates under the Qualified Market Maker 
(``QMM'') Program set forth in Rule 7014.


[[Page 70034]]


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    \e\ Participants that [sic] 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% or more of total 
industry customer equity and ETF option ADV contracts per day in a 
month will receive an additional $0.02 per contract Penny Pilot 
Options Customer Rebate to Add Liquidity for each transaction which 
adds liquidity in Penny Pilot Options in that month; or (2) add 
Customer, Professional, Firm, Non-NOM Market Maker and/or Broker-
Dealer liquidity in Penny Pilot Options and/or Non-Penny Pilot 
Options of 1.40% or more of total industry customer equity and ETF 
option ADV contracts per day in a month will receive an additional 
$0.05 per contract Penny Pilot Options Customer Rebate to Add 
Liquidity for each transaction which adds liquidity in Penny Pilot 
Options in that month; or (3) (a) add Customer, Professional, Firm, 
Non-NOM Market Maker and/or Broker-Dealer liquidity in Penny Pilot 
Options and/or Non-Penny Pilot Options above 0.85% of total industry 
customer equity and ETF option ADV contracts per day from October 
22, 2015 through October 30, 2015 and (b) has added liquidity in all 
securities through one or more of its Nasdaq Market Center MPIDs 
that represent 1.00% or more of Consolidated Volume from October 22, 
2015 through October 30, 2015 will receive an additional $0.05 per 
contract Penny Pilot Options Customer Rebate to Add Liquidity for 
each transaction which adds liquidity in Penny Pilot Options from 
October 22, 2015 through October 30, 2015. Consolidated Volume shall 
mean the total consolidated volume reported to all consolidated 
transaction reporting plans by all exchanges and trade reporting 
facilities during a month in equity securities, excluding executed 
orders with a size of less than one round lot. For purposes of 
calculating Consolidated Volume and the extent of an equity member's 
trading activity, expressed as a percentage of or ratio to 
Consolidated Volume, the date of the annual reconstitution of the 
Russell Investments Indexes shall be excluded from both total 
Consolidated Volume and the member's trading activity.

    Specifically, the Exchange is amending the third incentive in note 
``e'' which currently states:

    (a) add Customer, Professional, Firm, Non-NOM Market Maker and/
or Broker-Dealer liquidity in Penny Pilot Options and/or Non-Penny 
Pilot Options above 0.85% of total industry customer equity and ETF 
option ADV contracts per day from October 22, 2015 through October 
30, 2015 and (b) has added liquidity in all securities through one 
or more of its Nasdaq Market Center MPIDs that represent 1.00% or 
more of Consolidated Volume from October 22, 2015 through October 
30, 2015 will receive an additional $0.05 per contract Penny Pilot 
Options Customer Rebate to Add Liquidity for each transaction which 
adds liquidity in Penny Pilot Options from October 22, 2015 through 
October 30, 2015. Consolidated Volume shall mean the total 
consolidated volume reported to all consolidated transaction 
reporting plans by all exchanges and trade reporting facilities 
during a month in equity securities, excluding executed orders with 
a size of less than one round lot. For purposes of calculating 
Consolidated Volume and the extent of an equity member's trading 
activity, expressed as a percentage of or ratio to Consolidated 
Volume, the date of the annual reconstitution of the Russell 
Investments Indexes shall be excluded from both total Consolidated 
Volume and the member's trading activity.

    The Exchange proposes to reduce this incentive from $0.05 to $0.03 
per contract and amend the time period of October 22, 2015 through 
October 30, 2015 to ``in a month.'' The Exchange filed a mid-month 
amendment for October 2015 which necessitated this rule text. This text 
is not necessary going forward and will revert to the standard ``in a 
month.'' \12\ The Exchange believes that despite the decrease, this 
incentive will continue to encourage market participants to send 
additional order flow to achieve this incentive.
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    \12\ This incentive will apply monthly going forward.
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    The Exchange also proposes to renumber current note ``e'' as note 
``c'' in Chapter XV, Section 2(1) as note ``c'' was previously 
eliminated.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\13\ in general, and with 
Section 6(b)(4) and 6(b)(5) of the Act,\14\ 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.
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    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(4) and (5).
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Change 1--Fees for Removing Liquidity in Penny Pilot Options
    Decreasing the Fees for Removing Liquidity in Penny Pilot Options 
from $0.54 to $0.50 per contract for all Participant categories other 
than Customer is reasonable because the lower fees should encourage 
these participants to send additional order flow to the Exchange and 
the additional order flow should benefit all market participants.
    Decreasing the Fees for Removing Liquidity in Penny Pilot Options 
from $0.54 to $0.50 per contract for all Participant categories other 
than Customer is equitable and not unfairly discriminatory because the 
Exchange would uniformly assess all non-Customers a Penny Pilot Options 
Fee for Removing Liquidity of $0.50 per contract. Customers would be 
assessed the lowest Penny Pilot Options Fee for Removing Liquidity of 
$0.48 per contract. Customer order flow enhances liquidity on the 
Exchange for the benefit of all market participants and benefits all 
market participants by providing more trading opportunities, which 
attracts market makers. An increase in the activity of these market 
participants in turn facilitates tighter spreads, which may cause an 
additional corresponding increase in order flow from other market 
participants.
    The elimination of the SPY Fees for Removing Liquidity in Penny 
Pilot Options is reasonable because these fees will be the same as the 
Fees for Removing Liquidity in Penny Pilot Options for all other Penny 
Pilot Options. The pricing would be redundant.
    The elimination of the SPY Fees for Removing Liquidity in Penny 
Pilot Options is equitable and not unfairly discriminatory because the 
Exchange would uniformly assess all non-Customers a SPY Penny Pilot 
Options Fee for Removing Liquidity of $0.50 per contract, as is the 
case today and Customers would continue to be assessed the lowest Penny 
Pilot Options Fee for Removing Liquidity of $0.48 per contract. 
Customer order flow enhances liquidity on the Exchange for the benefit 
of all market participants and benefits all market participants by 
providing more trading opportunities, which attracts market makers.
    The Exchange's proposal to renumber current note ``3'' as note 
``1'' in Chapter XX [sic], Section 2(1) is reasonable, equitable and 
not unfairly discriminatory because it will add order to the pricing 
schedule.
Change 2--Rebate To Add Liquidity in Penny Pilot Options
    The Exchange's proposal to remove note ``d'' of Chapter XV, Section 
2(1) is reasonable because this incentive to reduce certain Fees for 
Removing Liquidity in Penny Pilot Options is no longer relevant as 
those fees are being reduced in this proposal.
    The Exchange's proposal to remove note ``d'' of Chapter XV, Section 
2(1) is equitable and not unfairly discriminatory because this 
incentive to reduce Fees for Removing Liquidity in Penny Pilot Options 
will not be offered to any Participant.
    The Exchange's proposal to amend note ``e'' of Chapter XV, Section 
2(1) to reduce one of the incentives being offered to Participants that 
qualify for Tier 8 of the Customer and Professional Penny Pilot Options 
Rebates to Add

[[Page 70035]]

Liquidity from an additional $0.05 per contract incentive to $0.03 per 
contract is reasonable because, despite the reduction in the incentive 
being offered, the opportunity to earn a higher rebate of $0.51 \15\ 
per contract, provided the qualifications are met, will incentivize 
Participants to transact an even greater number of qualifying Customer 
and/or Professional volume, which liquidity will benefit other market 
participants by providing them the opportunity to interact with that 
liquidity. The Exchange's proposal to permit Participants to obtain a 
higher rebate of $0.51 per contract, provided they qualify for the Tier 
8 rebate and the new criteria of note ``e'' \16\ by adding volume in a 
month, which includes the addition of options and equity volume, is 
reasonable because the Exchange is encouraging market participants to 
send order flow to both the options and equity markets to receive the 
rebate. Incentivizing Participants to add options liquidity through the 
payment of an additional rebate is not novel and exists today.\17\ 
Today, the Customer and Professional Penny Pilot Options Rebate to Add 
Liquidity Tier 8 includes, as part of the qualifying criteria, a 
certification for the Investor Support Program \18\ as set forth in 
Rule 7014 and qualification in the QMM Program.\19\ These two programs 
are equity programs which require participation in the form of adding 
liquidity. The concept of participating in the equities market as a 
means to qualify for an options rebate exists today. The Exchange's 
proposal would require Participants to add liquidity in all securities 
through one or more of its Nasdaq Market Center MPIDS that represent 
1.00% or more of Consolidated Volume during the month. Consolidated 
Volume shall mean the total consolidated volume reported to all 
consolidated transaction reporting plans by all exchanges and trade 
reporting facilities during a month in equity securities, excluding 
executed orders with a size of less than one round lot. For purposes of 
calculating Consolidated Volume and the extent of an equity member's 
trading activity, expressed as a percentage of or ratio to Consolidated 
Volume, the date of the annual reconstitution of the Russell 
Investments Indexes shall be excluded from both total Consolidated 
Volume and the member's trading activity.
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    \15\ Tier 8 pays a rebate of $0.48 per contract and the 
additional rebate proposed for note ``e'' (new note ``c'') would be 
a $0.03 per contract rebate for a total of $0.51 per contract.
    \16\ The note ``e'' incentive being amended requires 
Participants to (a) add Customer, Professional, Firm, Non-NOM Market 
Maker and/or Broker-Dealer liquidity in Penny Pilot Options and/or 
Non-Penny Pilot Options above 0.85% of total industry customer 
equity and ETF option ADV contracts per day in a month and (b) add 
liquidity in all securities through one or more of its Nasdaq Market 
Center MPIDs that represent 1.00% or more of Consolidated Volume in 
a month in order to receive an additional $0.03 per contract Penny 
Pilot Options Customer Rebate to Add Liquidity. This is the 
incentive as proposed in this rule change.
    \17\ Note ``e'' provides two other opportunities, aside from the 
incentive which is being amended, to earn a higher rebate. 
Participants 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% or more of total industry customer 
equity and ETF option ADV contracts per day in a month receive an 
additional $0.02 per contract Penny Pilot Options Customer Rebate to 
Add Liquidity for each transaction which adds liquidity in Penny 
Pilot Options in that month; or Participants may add Customer, 
Professional, Firm, Non-NOM Market Maker and/or Broker-Dealer 
liquidity in Penny Pilot Options and/or Non-Penny Pilot Options of 
1.40% or more of total industry customer equity and ETF option ADV 
contracts per day in a month to receive an additional $0.05 per 
contract Penny Pilot Options Customer Rebate to Add Liquidity for 
each transaction which adds liquidity in Penny Pilot Options in that 
month.
    \18\ For a detailed description of the Investor Support Program 
or ISP, see Securities Exchange Act Release No. 63270 (November 8, 
2010), 75 FR 69489 (November 12, 2010) (NASDAQ-2010-141) (notice of 
filing and immediate effectiveness) (the ``ISP Filing''). See also 
Securities Exchange Act Release Nos. 63414 (December 2, 2010), 75 FR 
76505 (December 8, 2010) (NASDAQ-2010-153) (notice of filing and 
immediate effectiveness); and 63628 (January 3, 2011), 76 FR 1201 
(January 7, 2011) (NASDAQ-2010-154) (notice of filing and immediate 
effectiveness).
    \19\ A QMM is a NASDAQ member that makes a significant 
contribution to market quality by providing liquidity at the 
national best bid and offer (``NBBO'') in a large number of stocks 
for a significant portion of the day. In addition, the NASDAQ equity 
member must avoid imposing the burdens on NASDAQ and its market 
participants that may be associated with excessive rates of entry of 
orders away from the inside and/or order cancellation. The 
designation ``QMM'' reflects the QMM's commitment to provide 
meaningful and consistent support to market quality and price 
discovery by extensive quoting at the NBBO in a large number of 
securities. In return for its contributions, certain financial 
benefits are provided to a QMM with respect to a particular MPID (a 
``QMM MPID''), as described under Rule 7014(e).
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    The Exchange's proposal to amend note ``e'' of Chapter XV, Section 
2(1) to reduce one of the incentives being offered to Participants that 
qualify for Tier 8 of the Customer and Professional Penny Pilot Options 
Rebates to Add Liquidity from an additional $0.05 per contract 
incentive to $0.03 per contract is equitable and not unfairly 
discriminatory because all Participants may qualify for Tier 8 and the 
additional note ``e'' incentive. Qualifying Participants will be 
uniformly paid the rebate provided the requirements are met in a month. 
The Exchange's proposal to permit Participants to receive an additional 
$0.03 per contract rebate in addition to the Tier 8 rebate of $0.48 per 
contract, provided they qualify for Tier 8 and add options and equity 
volume as specified in the new note ``e'' criteria,\20\ is equitable 
and not unfairly discriminatory because market participants today may 
qualify for a comparable or a higher rebate through alternative means 
that does not require participation in NOM.
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    \20\ See note 16.
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    The Exchange's proposal to amend the time period of October 22, 
2015 through October 30, 2015 to ``in a month'' is reasonable because 
unlike last month when the the [sic] Exchange filed a mid-month 
amendment for October 2015, the amended language is intended to capture 
the entire month going forward.
    The Exchange's proposal to amend the time period of October 22, 
2015 through October 30, 2015 to ``in a month'' is equitable and not 
unfairly discriminatory because the note ``e'' qualifications would be 
uniformly calculated for a month for all Participants.
    The Exchange's proposal to renumber current note ``e'' as note 
``c'' in Chapter XX [sic], Section 2(1) is reasonable, equitable and 
not unfairly discriminatory because it will add order to the pricing 
schedule.

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

    The Exchange does not believe that the proposed rule change will 
impose any inter-market burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
operates in a highly competitive market in which many sophisticated and 
knowledgeable market participants can readily and do send order flow to 
competing exchanges if they deem fee levels or rebate incentives at a 
particular exchange to be excessive or inadequate. Additionally, new 
competitors have entered the market and still others are reportedly 
entering the market shortly. These market forces ensure that the 
Exchange's fees and rebates remain competitive with the fee structures 
at other trading platforms. In that sense, the Exchange's proposal is 
actually pro-competitive because the Exchange is simply responding to 
competition by adjusting rebates and fees in order to remain 
competitive in the current environment.
    Decreasing the Fees for Removing Liquidity in Penny Pilot Options 
from $0.54 to $0.50 per contract for all Participant categories other 
than Customer does not create an intra-market undue burden on 
competition because all Participants would be

[[Page 70036]]

assessed the same fee, except Customers. Customer order flow is unique 
in that it enhances liquidity on the Exchange for the benefit of all 
market participants and benefits all market participants by providing 
more trading opportunities, which attracts market makers.
    The elimination of the SPY Fees for Removing Liquidity in Penny 
Pilot Options does not create an intra-market undue burden on 
competition because all Penny Pilot Options will be assessed the same 
[sic] as the Fees for Removing Liquidity.
    The Exchange's proposal to remove note ``d'' of Chapter XV, Section 
2(1) does not create an intra-market undue burden on competition 
because this incentive to reduce certain Fees for Removing Liquidity in 
Penny Pilot Options is no longer relevant as those fees are being 
reduced in this proposal.
    The Exchange's proposal to amend note ``e'' of Chapter XV, Section 
2(1) to reduce one of the incentives being offered to Participants that 
qualify for Tier 8 of the Customer and Professional Penny Pilot Options 
Rebates to Add Liquidity from an additional $0.05 per contract 
incentive to $0.03 per contract does not create an intra-market undue 
burden on competition because all Participants may qualify for Tier 8 
and the additional incentive.
    The Exchange's proposal to amend the time period of October 22, 
2015 through October 30, 2015 to ``in a month'' does not create an 
intra-market undue burden on competition because the amended language 
is intended to capture the entire month going forward and was 
previously intended to reflect the effectiveness of a prior rule 
change.
    The remaining renumbering changes do not create an intra-market 
undue burden on competition because the amendments are non-substantive 
in nature.

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

    No written comments were either solicited or received.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\21\
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    \21\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2015-127 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-NASDAQ-2015-127. 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 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-2015-127, and should 
be submitted on or before December 3, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
---------------------------------------------------------------------------

    \22\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-28683 Filed 11-10-15; 8:45 am]
BILLING CODE 8011-01-P
70032 Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices

increase the volume of contracts traded Paper Comments SECURITIES AND EXCHANGE
in options listed on NOM. To the extent COMMISSION
that this purpose is achieved, all the • Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities [Release No. 34–76363; File No. SR–
Exchange’s market participants should NASDAQ–2015–127]
benefit from the improved market and Exchange Commission, 100 F Street
liquidity. Enhanced market quality and NE., Washington, DC 20549–1090. Self-Regulatory Organizations; The
increased transaction volume that All submissions should refer to File NASDAQ Stock Market LLC; Notice of
results from the anticipated increase in Number SR±NASDAQ±2015±130. This Filing and Immediate Effectiveness of
order flow directed to the Exchange will file number should be included on the Proposed Rule Change To Modify
benefit all market participants and Chapter XV, Entitled ‘‘Options
subject line if email is used. To help the
improve competition on the Exchange. Pricing,’’ at Section 2 Governing
Commission process and review your
The Exchange notes that it operates in Pricing for NASDAQ Members
comments more efficiently, please use
a highly competitive market in which
only one method. The Commission will November 5, 2015.
market participants can readily favor
competing venues if they deem fee post all comments on the Commission’s Pursuant to Section 19(b)(1) of the
levels at a particular venue to be Internet Web site (http://www.sec.gov/ Securities Exchange Act of 1934
excessive. In such an environment, the rules/sro.shtml). Copies of the (‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Exchange must continually adjust its submission, all subsequent notice is hereby given that on October
fees to remain competitive with other amendments, all written statements 23, 2015, The NASDAQ Stock Market
exchanges and to attract order flow. The with respect to the proposed rule LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
Exchange believes that the proposal change that are filed with the with the Securities and Exchange
reflects this competitive environment. Commission, and all written Commission (‘‘SEC’’ or ‘‘Commission’’)
communications relating to the the proposed rule change as described
C. Self-Regulatory Organization's proposed rule change between the in Items I, II, and III below, which Items
Statement on Comments on the have been prepared by the Exchange.
Commission and any person, other than
Proposed Rule Change Received From The Commission is publishing this
those that may be withheld from the
Members, Participants, or Others notice to solicit comments on the
public in accordance with the
No written comments were either provisions of 5 U.S.C. 552, will be proposed rule change from interested
solicited or received. available for Web site viewing and persons.
III. Date of Effectiveness of the printing in the Commission’s Public I. Self-Regulatory Organization’s
Proposed Rule Change and Timing for Reference Room, 100 F Street, NE., Statement of the Terms of Substance of
Commission Action Washington, DC 20549, on official the Proposed Rule Change
business days between the hours of The Exchange proposes to amend the
The foregoing rule change has become 10:00 a.m. and 3:00 p.m. Copies of the
effective pursuant to Section Exchange’s transaction fees at Chapter
filing also will be available for XV, Section 2 entitled ‘‘NASDAQ
19(b)(3)(A)(ii) of the Act.10
inspection and copying at the principal Options Market—Fees and Rebates,’’
At any time within 60 days of the office of the Exchange. All comments
filing of the proposed rule change, the which governs pricing for NASDAQ
received will be posted without change; members using the NASDAQ Options
Commission summarily may
the Commission does not edit personal Market (‘‘NOM’’), NASDAQ’s facility for
temporarily suspend such rule change if
it appears to the Commission that such identifying information from executing and routing standardized
action is: (i) Necessary or appropriate in submissions. You should submit only equity and index options.
information that you wish to make While these amendments are effective
the public interest; (ii) for the protection
available publicly. All submissions upon filing, the Exchange has
of investors; or (iii) otherwise in
should refer to File Number SR± designated the proposed amendments to
furtherance of the purposes of the Act.
NASDAQ±2015±130 and should be be operative on November 2, 2015.
If the Commission takes such action, the The text of the proposed rule change
Commission shall institute proceedings submitted on or before December 3,
2015. is available on the Exchange’s Web site
to determine whether the proposed rule at http://nasdaq.cchwallstreet.com, at
should be approved or disapproved. For the Commission, by the Division of the principal office of the Exchange, and
IV. Solicitation of Comments Trading and Markets, pursuant to delegated at the Commission’s Public Reference
authority.11 Room.
Interested persons are invited to Robert W. Errett,
submit written data, views, and II. Self-Regulatory Organization’s
Deputy Secretary. Statement of the Purpose of, and
arguments concerning the foregoing,
including whether the proposed rule [FR Doc. 2015–28685 Filed 11–10–15; 8:45 am] Statutory Basis for, the Proposed Rule
change is consistent with the Act. BILLING CODE 8011–01–P Change
Comments may be submitted by any of In its filing with the Commission, the
the following methods: Exchange included statements
Electronic Comments concerning the purpose of and basis for
the proposed rule change and discussed
• Use the Commission’s Internet
mstockstill on DSK4VPTVN1PROD with NOTICES

any comments it received on the
comment form (http://www.sec.gov/ proposed rule change. The text of these
rules/sro.shtml); or statements may be examined at the
• Send an email to rule-comments@ places specified in Item IV below. The
sec.gov. Please include File Number SR– Exchange has prepared summaries, set
NASDAQ–2015–130 on the subject line.
1 15 U.S.C. 78s(b)(1).
10 15 U.S.C. 78s(b)(3)(A)(ii). 11 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.

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70034 Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices

e Participants that [sic] add Customer, facilities during a month in equity securities, Removing Liquidity of $0.50 per
Professional, Firm, Non-NOM Market Maker excluding executed orders with a size of less contract. Customers would be assessed
and/or Broker-Dealer liquidity in Penny Pilot than one round lot. For purposes of the lowest Penny Pilot Options Fee for
Options and/or Non-Penny Pilot Options of calculating Consolidated Volume and the Removing Liquidity of $0.48 per
1.15% or more of total industry customer extent of an equity member’s trading activity,
equity and ETF option ADV contracts per day expressed as a percentage of or ratio to contract. Customer order flow enhances
in a month will receive an additional $0.02 Consolidated Volume, the date of the annual liquidity on the Exchange for the benefit
per contract Penny Pilot Options Customer reconstitution of the Russell Investments of all market participants and benefits
Rebate to Add Liquidity for each transaction Indexes shall be excluded from both total all market participants by providing
which adds liquidity in Penny Pilot Options Consolidated Volume and the member’s more trading opportunities, which
in that month; or (2) add Customer, trading activity. attracts market makers. An increase in
Professional, Firm, Non-NOM Market Maker the activity of these market participants
and/or Broker-Dealer liquidity in Penny Pilot
The Exchange proposes to reduce this
incentive from $0.05 to $0.03 per in turn facilitates tighter spreads, which
Options and/or Non-Penny Pilot Options of
contract and amend the time period of may cause an additional corresponding
1.40% or more of total industry customer
equity and ETF option ADV contracts per day October 22, 2015 through October 30, increase in order flow from other market
in a month will receive an additional $0.05 2015 to ‘‘in a month.’’ The Exchange participants.
per contract Penny Pilot Options Customer filed a mid-month amendment for The elimination of the SPY Fees for
Rebate to Add Liquidity for each transaction October 2015 which necessitated this Removing Liquidity in Penny Pilot
which adds liquidity in Penny Pilot Options rule text. This text is not necessary Options is reasonable because these fees
in that month; or (3) (a) add Customer,
going forward and will revert to the will be the same as the Fees for
Professional, Firm, Non-NOM Market Maker Removing Liquidity in Penny Pilot
and/or Broker-Dealer liquidity in Penny Pilot standard ‘‘in a month.’’ 12 The Exchange
believes that despite the decrease, this Options for all other Penny Pilot
Options and/or Non-Penny Pilot Options Options. The pricing would be
above 0.85% of total industry customer incentive will continue to encourage
redundant.
equity and ETF option ADV contracts per day market participants to send additional
from October 22, 2015 through October 30, The elimination of the SPY Fees for
order flow to achieve this incentive.
2015 and (b) has added liquidity in all Removing Liquidity in Penny Pilot
The Exchange also proposes to
securities through one or more of its Nasdaq Options is equitable and not unfairly
renumber current note ‘‘e’’ as note ‘‘c’’
Market Center MPIDs that represent 1.00% or discriminatory because the Exchange
in Chapter XV, Section 2(1) as note ‘‘c’’
more of Consolidated Volume from October would uniformly assess all non-
22, 2015 through October 30, 2015 will was previously eliminated.
Customers a SPY Penny Pilot Options
receive an additional $0.05 per contract 2. Statutory Basis Fee for Removing Liquidity of $0.50 per
Penny Pilot Options Customer Rebate to Add contract, as is the case today and
Liquidity for each transaction which adds NASDAQ believes that the proposed
liquidity in Penny Pilot Options from rule change is consistent with the Customers would continue to be
October 22, 2015 through October 30, 2015. provisions of Section 6 of the Act,13 in assessed the lowest Penny Pilot Options
Consolidated Volume shall mean the total general, and with Section 6(b)(4) and Fee for Removing Liquidity of $0.48 per
consolidated volume reported to all 6(b)(5) of the Act,14 in particular, in that contract. Customer order flow enhances
consolidated transaction reporting plans by it provides for the equitable allocation liquidity on the Exchange for the benefit
all exchanges and trade reporting facilities of reasonable dues, fees and other of all market participants and benefits
during a month in equity securities, all market participants by providing
charges among members and issuers and
excluding executed orders with a size of less more trading opportunities, which
than one round lot. For purposes of other persons using any facility or
system which NASDAQ operates or attracts market makers.
calculating Consolidated Volume and the The Exchange’s proposal to renumber
extent of an equity member’s trading activity, controls, and is not designed to permit
expressed as a percentage of or ratio to unfair discrimination between current note ‘‘3’’ as note ‘‘1’’ in Chapter
Consolidated Volume, the date of the annual customers, issuers, brokers, or dealers. XX [sic], Section 2(1) is reasonable,
reconstitution of the Russell Investments equitable and not unfairly
Indexes shall be excluded from both total Change 1—Fees for Removing Liquidity discriminatory because it will add order
Consolidated Volume and the member’s in Penny Pilot Options to the pricing schedule.
trading activity. Decreasing the Fees for Removing Change 2—Rebate To Add Liquidity in
Specifically, the Exchange is Liquidity in Penny Pilot Options from Penny Pilot Options
amending the third incentive in note $0.54 to $0.50 per contract for all
‘‘e’’ which currently states: Participant categories other than The Exchange’s proposal to remove
Customer is reasonable because the note ‘‘d’’ of Chapter XV, Section 2(1) is
(a) add Customer, Professional, Firm, Non- reasonable because this incentive to
NOM Market Maker and/or Broker-Dealer lower fees should encourage these
participants to send additional order reduce certain Fees for Removing
liquidity in Penny Pilot Options and/or Non-
Penny Pilot Options above 0.85% of total flow to the Exchange and the additional Liquidity in Penny Pilot Options is no
industry customer equity and ETF option order flow should benefit all market longer relevant as those fees are being
ADV contracts per day from October 22, 2015 participants. reduced in this proposal.
through October 30, 2015 and (b) has added Decreasing the Fees for Removing The Exchange’s proposal to remove
liquidity in all securities through one or more Liquidity in Penny Pilot Options from note ‘‘d’’ of Chapter XV, Section 2(1) is
of its Nasdaq Market Center MPIDs that $0.54 to $0.50 per contract for all equitable and not unfairly
represent 1.00% or more of Consolidated discriminatory because this incentive to
Participant categories other than
Volume from October 22, 2015 through reduce Fees for Removing Liquidity in
October 30, 2015 will receive an additional Customer is equitable and not unfairly
mstockstill on DSK4VPTVN1PROD with NOTICES

discriminatory because the Exchange Penny Pilot Options will not be offered
$0.05 per contract Penny Pilot Options to any Participant.
Customer Rebate to Add Liquidity for each would uniformly assess all non-
The Exchange’s proposal to amend
transaction which adds liquidity in Penny Customers a Penny Pilot Options Fee for
Pilot Options from October 22, 2015 through
note ‘‘e’’ of Chapter XV, Section 2(1) to
October 30, 2015. Consolidated Volume shall 12 This incentive will apply monthly going reduce one of the incentives being
mean the total consolidated volume reported forward. offered to Participants that qualify for
to all consolidated transaction reporting 13 15 U.S.C. 78f. Tier 8 of the Customer and Professional
plans by all exchanges and trade reporting 14 15 U.S.C. 78f(b)(4) and (5). Penny Pilot Options Rebates to Add

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Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices 70035

Liquidity from an additional $0.05 per set forth in Rule 7014 and qualification provided they qualify for Tier 8 and add
contract incentive to $0.03 per contract in the QMM Program.19 These two options and equity volume as specified
is reasonable because, despite the programs are equity programs which in the new note ‘‘e’’ criteria,20 is
reduction in the incentive being offered, require participation in the form of equitable and not unfairly
the opportunity to earn a higher rebate adding liquidity. The concept of discriminatory because market
of $0.51 15 per contract, provided the participating in the equities market as a participants today may qualify for a
qualifications are met, will incentivize means to qualify for an options rebate comparable or a higher rebate through
Participants to transact an even greater exists today. The Exchange’s proposal alternative means that does not require
number of qualifying Customer and/or would require Participants to add participation in NOM.
Professional volume, which liquidity liquidity in all securities through one or The Exchange’s proposal to amend
will benefit other market participants by more of its Nasdaq Market Center the time period of October 22, 2015
providing them the opportunity to MPIDS that represent 1.00% or more of through October 30, 2015 to ‘‘in a
interact with that liquidity. The Consolidated Volume during the month. month’’ is reasonable because unlike
Exchange’s proposal to permit Consolidated Volume shall mean the last month when the the [sic] Exchange
Participants to obtain a higher rebate of total consolidated volume reported to filed a mid-month amendment for
$0.51 per contract, provided they all consolidated transaction reporting October 2015, the amended language is
qualify for the Tier 8 rebate and the new plans by all exchanges and trade intended to capture the entire month
criteria of note ‘‘e’’ 16 by adding volume reporting facilities during a month in going forward.
in a month, which includes the addition equity securities, excluding executed The Exchange’s proposal to amend
of options and equity volume, is orders with a size of less than one round the time period of October 22, 2015
reasonable because the Exchange is lot. For purposes of calculating through October 30, 2015 to ‘‘in a
encouraging market participants to send Consolidated Volume and the extent of month’’ is equitable and not unfairly
order flow to both the options and an equity member’s trading activity, discriminatory because the note ‘‘e’’
equity markets to receive the rebate. expressed as a percentage of or ratio to qualifications would be uniformly
Incentivizing Participants to add Consolidated Volume, the date of the calculated for a month for all
options liquidity through the payment annual reconstitution of the Russell Participants.
of an additional rebate is not novel and Investments Indexes shall be excluded The Exchange’s proposal to renumber
exists today.17 Today, the Customer and from both total Consolidated Volume current note ‘‘e’’ as note ‘‘c’’ in Chapter
Professional Penny Pilot Options Rebate and the member’s trading activity. XX [sic], Section 2(1) is reasonable,
to Add Liquidity Tier 8 includes, as part The Exchange’s proposal to amend equitable and not unfairly
of the qualifying criteria, a certification note ‘‘e’’ of Chapter XV, Section 2(1) to discriminatory because it will add order
for the Investor Support Program 18 as reduce one of the incentives being to the pricing schedule.
offered to Participants that qualify for B. Self-Regulatory Organization's
15 Tier 8 pays a rebate of $0.48 per contract and Tier 8 of the Customer and Professional Statement on Burden on Competition
the additional rebate proposed for note ‘‘e’’ (new Penny Pilot Options Rebates to Add
note ‘‘c’’) would be a $0.03 per contract rebate for
Liquidity from an additional $0.05 per The Exchange does not believe that
a total of $0.51 per contract. the proposed rule change will impose
16 The note ‘‘e’’ incentive being amended requires contract incentive to $0.03 per contract
Participants to (a) add Customer, Professional, Firm, is equitable and not unfairly any inter-market burden on competition
Non-NOM Market Maker and/or Broker-Dealer discriminatory because all Participants not necessary or appropriate in
liquidity in Penny Pilot Options and/or Non-Penny
may qualify for Tier 8 and the furtherance of the purposes of the Act.
Pilot Options above 0.85% of total industry The Exchange operates in a highly
customer equity and ETF option ADV contracts per additional note ‘‘e’’ incentive.
day in a month and (b) add liquidity in all Qualifying Participants will be competitive market in which many
securities through one or more of its Nasdaq Market uniformly paid the rebate provided the sophisticated and knowledgeable
Center MPIDs that represent 1.00% or more of
requirements are met in a month. The market participants can readily and do
Consolidated Volume in a month in order to receive send order flow to competing exchanges
an additional $0.03 per contract Penny Pilot Exchange’s proposal to permit
Options Customer Rebate to Add Liquidity. This is Participants to receive an additional if they deem fee levels or rebate
the incentive as proposed in this rule change.
$0.03 per contract rebate in addition to incentives at a particular exchange to be
17 Note ‘‘e’’ provides two other opportunities,
the Tier 8 rebate of $0.48 per contract, excessive or inadequate. Additionally,
aside from the incentive which is being amended, new competitors have entered the
to earn a higher rebate. Participants that add
Customer, Professional, Firm, Non-NOM Market Release Nos. 63414 (December 2, 2010), 75 FR
market and still others are reportedly
Maker and/or Broker-Dealer liquidity in Penny Pilot 76505 (December 8, 2010) (NASDAQ–2010–153) entering the market shortly. These
Options and/or Non- Penny Pilot Options of 1.15% (notice of filing and immediate effectiveness); and market forces ensure that the Exchange’s
or more of total industry customer equity and ETF 63628 (January 3, 2011), 76 FR 1201 (January 7, fees and rebates remain competitive
option ADV contracts per day in a month receive 2011) (NASDAQ–2010–154) (notice of filing and
an additional $0.02 per contract Penny Pilot immediate effectiveness).
with the fee structures at other trading
Options Customer Rebate to Add Liquidity for each 19 A QMM is a NASDAQ member that makes a platforms. In that sense, the Exchange’s
transaction which adds liquidity in Penny Pilot significant contribution to market quality by proposal is actually pro-competitive
Options in that month; or Participants may add providing liquidity at the national best bid and offer because the Exchange is simply
Customer, Professional, Firm, Non-NOM Market (‘‘NBBO’’) in a large number of stocks for a
Maker and/or Broker-Dealer liquidity in Penny Pilot
responding to competition by adjusting
significant portion of the day. In addition, the
Options and/or Non-Penny Pilot Options of 1.40% NASDAQ equity member must avoid imposing the rebates and fees in order to remain
or more of total industry customer equity and ETF burdens on NASDAQ and its market participants competitive in the current environment.
option ADV contracts per day in a month to receive that may be associated with excessive rates of entry Decreasing the Fees for Removing
an additional $0.05 per contract Penny Pilot of orders away from the inside and/or order
mstockstill on DSK4VPTVN1PROD with NOTICES

Options Customer Rebate to Add Liquidity for each
Liquidity in Penny Pilot Options from
cancellation. The designation ‘‘QMM’’ reflects the
transaction which adds liquidity in Penny Pilot QMM’s commitment to provide meaningful and $0.54 to $0.50 per contract for all
Options in that month. consistent support to market quality and price Participant categories other than
18 For a detailed description of the Investor discovery by extensive quoting at the NBBO in a Customer does not create an intra-
Support Program or ISP, see Securities Exchange large number of securities. In return for its market undue burden on competition
Act Release No. 63270 (November 8, 2010), 75 FR contributions, certain financial benefits are
69489 (November 12, 2010) (NASDAQ–2010–141) provided to a QMM with respect to a particular because all Participants would be
(notice of filing and immediate effectiveness) (the MPID (a ‘‘QMM MPID’’), as described under Rule
‘‘ISP Filing’’). See also Securities Exchange Act 7014(e). 20 See note 16.

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70036 Federal Register / Vol. 80, No. 218 / Thursday, November 12, 2015 / Notices

assessed the same fee, except it appears to the Commission that such NASDAQ–2015–127, and should be
Customers. Customer order flow is action is: (i) Necessary or appropriate in submitted on or before December 3,
unique in that it enhances liquidity on the public interest; (ii) for the protection 2015.
the Exchange for the benefit of all of investors; or (iii) otherwise in For the Commission, by the Division of
market participants and benefits all furtherance of the purposes of the Act. Trading and Markets, pursuant to delegated
market participants by providing more If the Commission takes such action, the authority.22
trading opportunities, which attracts Commission shall institute proceedings Robert W. Errett,
market makers. to determine whether the proposed rule Deputy Secretary.
The elimination of the SPY Fees for should be approved or disapproved.
[FR Doc. 2015–28683 Filed 11–10–15; 8:45 am]
Removing Liquidity in Penny Pilot
IV. Solicitation of Comments BILLING CODE 8011–01–P
Options does not create an intra-market
undue burden on competition because Interested persons are invited to
all Penny Pilot Options will be assessed submit written data, views, and
arguments concerning the foregoing, SECURITIES AND EXCHANGE
the same [sic] as the Fees for Removing COMMISSION
Liquidity. including whether the proposed rule
The Exchange’s proposal to remove change is consistent with the Act. [Release No. 34–76370; File No. SR–Phlx–
note ‘‘d’’ of Chapter XV, Section 2(1) Comments may be submitted by any of 2015–90]
does not create an intra-market undue the following methods:
burden on competition because this Self-Regulatory Organizations;
Electronic Comments NASDAQ OMX PHLX LLC; Notice of
incentive to reduce certain Fees for
Removing Liquidity in Penny Pilot • Use the Commission’s Internet Filing and Immediate Effectiveness of
Options is no longer relevant as those comment form (http://www.sec.gov/ Proposed Rule Change To Adopt
fees are being reduced in this proposal. rules/sro.shtml); or Business Continuity and Disaster
The Exchange’s proposal to amend • Send an email to rule-comments@ Recovery Plans Testing Requirements
note ‘‘e’’ of Chapter XV, Section 2(1) to sec.gov. Please include File Number SR–
NASDAQ–2015–127 on the subject line. November 5, 2015.
reduce one of the incentives being Pursuant to Section 19(b)(1) of the
offered to Participants that qualify for Paper Comments Securities Exchange Act of 1934
Tier 8 of the Customer and Professional • Send paper comments in triplicate (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Penny Pilot Options Rebates to Add to Brent J. Fields, Secretary, Securities notice is hereby given that on November
Liquidity from an additional $0.05 per and Exchange Commission, 100 F Street 2, 2015, NASDAQ OMX PHLX LLC
contract incentive to $0.03 per contract NE., Washington, DC 20549–1090. (‘‘Phlx’’ or ‘‘Exchange’’) filed with the
does not create an intra-market undue All submissions should refer to File Securities and Exchange Commission
burden on competition because all Number SR–NASDAQ–2015–127. This (‘‘SEC’’ or ‘‘Commission’’) the proposed
Participants may qualify for Tier 8 and file number should be included on the rule change as described in Items I and
the additional incentive. subject line if email is used. To help the II, below, which Items have been
The Exchange’s proposal to amend
Commission process and review your prepared by the Exchange. The
the time period of October 22, 2015
comments more efficiently, please use Commission is publishing this notice to
through October 30, 2015 to ‘‘in a
only one method. The Commission will solicit comments on the proposed rule
month’’ does not create an intra-market
post all comments on the Commission’s change from interested persons.
undue burden on competition because
Internet Web site (http://www.sec.gov/
the amended language is intended to I. Self-Regulatory Organization’s
rules/sro.shtml). Copies of the
capture the entire month going forward Statement of the Terms of Substance of
submission, all subsequent
and was previously intended to reflect the Proposed Rule Change
amendments, all written statements
the effectiveness of a prior rule change. The Exchange proposes to adopt
The remaining renumbering changes with respect to the proposed rule
change that are filed with the business continuity and disaster
do not create an intra-market undue
Commission, and all written recovery plans (‘‘BC/DR Plans’’) testing
burden on competition because the
communications relating to the requirements for certain Exchange
amendments are non-substantive in
proposed rule change between the Member Organizations 3 and PSX
nature.
Commission and any person, other than Participants 4 (‘‘Participants’’) in
C. Self-Regulatory Organization's those that may be withheld from the
22 17 CFR 200.30–3(a)(12).
Statement on Comments on the public in accordance with the
1 15 U.S.C. 78s(b)(1).
Proposed Rule Change Received From provisions of 5 U.S.C. 552, will be 2 17 CFR 240.19b–4.
Members, Participants, or Others available for Web site viewing and 3 The term ‘‘Member Organization’’ is defined as

No written comments were either printing in the Commission’s Public ‘‘a corporation, partnership (general or limited),
solicited or received. Reference Room, 100 F Street NE., limited liability partnership, limited liability
Washington, DC 20549 on official company, business trust or similar organization,
III. Date of Effectiveness of the business days between the hours of transacting business as a broker or a dealer in
Proposed Rule Change and Timing for securities and which has the status of a member
10:00 a.m. and 3:00 p.m. Copies of such organization by virtue of (i) admission to
Commission Action filing also will be available for membership given to it by the Membership
The foregoing rule change has become inspection and copying at the principal Department pursuant to the provisions of Rules
900.1 or 900.2 or the By-Laws or (ii) the transitional
mstockstill on DSK4VPTVN1PROD with NOTICES

effective pursuant to Section office of the Exchange. All comments
rules adopted by the Exchange pursuant to Section
19(b)(3)(A)(ii) of the Act.21 received will be posted without change; 6–4 of the By-Laws. References herein to officer or
At any time within 60 days of the the Commission does not edit personal partner, when used in the context of a member
filing of the proposed rule change, the identifying information from organization, shall include any person holding a
submissions. You should submit only similar position in any organization other than a
Commission summarily may corporation or partnership that has the status of a
temporarily suspend such rule change if information that you wish to make member organization.’’ See Exchange Rule 1(o).
available publicly. All submissions 4 The term ‘‘PSX Participant’’ or ‘‘Participant’’ is
21 15 U.S.C. 78s(b)(3)(A)(ii). should refer to File Number SR– defined as ‘‘an entity that fulfills the obligations

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Document Created: 2015-12-14 14:53:13
Document Modified: 2015-12-14 14:53:13
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 70032