81 FR 62212 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change Related to the NASDAQ Options Market LLC's Pricing at Chapter XV, Section 2(6)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 174 (September 8, 2016)

[Federal Register Volume 81, Number 174 (Thursday, September 8, 2016)]
[Notices]
[Pages 62212-62216]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-21492]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78749; File No. SR-NASDAQ-2016-121]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing of Proposed Rule Change Related to the NASDAQ Options 
Market LLC's Pricing at Chapter XV, Section 2(6)

September 1, 2016.
    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 29, 2016, The Nasdaq Stock Market LLC (``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I and II below, which 
Items have been prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes related to the NASDAQ Options Market LLC's 
(``NOM'') pricing at chapter XV, section 2(6).

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 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 to file to provide notice that Execution 
Access, LLC \3\ will offer a credit to its clients authorized to 
transact business at EA, provided those clients, who are also NOM 
Participants (``dual access client''), qualify for one of the two 
highest Market Access and Routing Subsidy or ``MARS'' Payment tiers 
available on NOM. The NOM Participant must qualify for the MARS Payment 
tier in order for the dual access client to receive a credit on EA. The 
dual access client may be an affiliate entity of the NOM Participant at 
EA.\4\ The qualification and credit are explained further below.\5\ The 
purpose

[[Page 62213]]

of this proposal is to lower prices to transact U.S. Treasury 
securities on EA in response to competitive forces in the treasury 
markets and increase trading on NOM.
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    \3\ Execution Access, LLC (``EA'') is a broker-dealer that 
operates a fully electronic central limit order book known as 
eSpeed. EA facilitates the matching of client orders in U.S. 
Treasury securities.
    \4\ Affiliates would include other legal entities under common 
control.
    \5\ Nasdaq believes that EA is not a ``facility'' of the 
Exchange. 15 U.S.C. 78c(a)(2). The Act defines ``facility'' to 
include an exchange's ``premises, tangible or intangible property 
whether on the premises or not, any right to the use of such 
premises or property or any service thereof for the purpose of 
effecting or reporting a transaction on an exchange (including, 
among other things, any system of communication to or from the 
exchange, by ticker or otherwise, maintained by or with the consent 
of the exchange), and any right of the exchange to the use of any 
property or service.'' EA is a distinct entity that is separate from 
NOM and engages in a discrete line of business that is not ``for the 
purpose of effecting or reporting a transaction'' on an exchange.
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MARS Program
    The Exchange currently offers MARS Payments to qualifying NOM 
Participants in chapter XV, section 2(6). NOM Participants that have 
System Eligibility \6\ and have executed the requisite number of 
Eligible Contracts \7\ in a month are paid rebates based on average 
daily volume (``ADV'') in a month. Today, MARS Payments are currently 
based on a 3 tier rebate based on ADV. The Exchange pays a MARS Payment 
of $0.07 for ADV of 2,500 Eligible Contracts. The Exchange pays a MARS 
Payment of $0.09 for ADV of 5,000 Eligible Contracts. Finally, the 
Exchange pays a MARS Payment of $0.11 for ADV of 10,000 Eligible 
Contracts. The Exchange pays a MARS Payment on all executed Eligible 
Contracts that add liquidity, which are routed to NOM through a 
participating NOM Participant's System and meet the requisite Eligible 
Contracts ADV.
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    \6\ To qualify for MARS, a Participant's routing system 
(``System'') is required to: (1) Enable the electronic routing of 
orders to all of the U.S. options exchanges, including NOM; (2) 
provide current consolidated market data from the U.S. options 
exchanges; and (3) be capable of interfacing with NOM's API to 
access current NOM match engine functionality. Further, the 
Participant's System would also need to cause NOM to be the one of 
the top three default destination exchanges for individually 
executed marketable orders if NOM is at the national best bid or 
offer (``NBBO''), regardless of size or time, but allow any user to 
manually override NOM as a default destination on an order-by-order 
basis. Any NOM Participant would be permitted to avail itself of 
this arrangement, provided that its order routing functionality 
incorporates the features described above and satisfies NOM that it 
appears to be robust and reliable. The Participant remains solely 
responsible for implementing and operating its System. See Chapter 
XV, Section 2(6).
    \7\ MARS Eligible Contracts include electronic Firm, Non-NOM 
Market Maker, Broker-Dealer or Joint Back Office orders that add 
liquidity, excluding Mini Options. See Chapter XV, Section 2(6).
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EA Credit Proposal
    Provided a dual access client qualifies for NOM's MARS Payment Tier 
2 or 3 in a given month, EA will credit the dual access client or its 
affiliate a specific dollar amount on its monthly billing statement for 
that same corresponding month, depending on the MARS Payment tier the 
dual access client qualified for in that month on NOM.\8\ If the dual 
access client qualified for NOM MARS Payment Tier 2, which requires ADV 
of 5,000 Eligible Contracts, the dual access client would receive a 
credit of $22,000 on its EA bill for the corresponding month. If the 
dual access client qualified for NOM MARS Payment Tier 3, which 
requires ADV of 10,000 Eligible Contracts, the dual access client would 
receive a credit of $40,000 on its EA bill for the corresponding 
month.\9\ These rebates are the same rebates that any qualifying NOM 
Participant would receive for transacting Eligible Contracts.
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    \8\ This credit will not be paid by NOM, but by EA. The credit 
is not transferable and will offset transaction fees.
    \9\ The Exchange would request that the dual access client 
consent to certain information sharing for purposes of providing 
information related to the credit.
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    By way of example, if the dual access client, who has System 
Eligibility, transacts ADV of 7,000 Eligible Contracts on NOM during 
the month of August 2016, the dual access client would be credited 
$22,000 on its EA August 2016 monthly statement because the dual access 
client qualified for NOM MARS Payment Tier 2. As provided in NOM's fee 
schedule, the dual access client would also be paid a $0.09 per 
contract rebate for all Eligible Contracts transacted on NOM during the 
month of August 2016. This rebate would be the same rebate paid to any 
qualifying NOM Participant. The NOM Participant would receive the MARS 
rebate on its NOM August 2016 monthly billing statement.
    The Exchange would offer the credit to dual access clients as of 
November 1, 2016, if approved by the SEC.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\10\ in general, and furthers the objectives of 
sections 6(b)(4) and 6(b)(5) of the Act,\11\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees and 
other charges among its members and issuers and other persons using its 
facilities, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
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    The Commission and the courts have repeatedly expressed their 
preference for competition over regulatory intervention in determining 
prices, products, and services in the securities markets. In Regulation 
NMS, while adopting a series of steps to improve the current market 
model, the Commission highlighted the importance of market forces in 
determining prices and SRO revenues and, also, recognized that current 
regulation of the market system ``has been remarkably successful in 
promoting market competition in its broader forms that are most 
important to investors and listed companies.'' \12\
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    \12\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
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    Likewise, in NetCoalition v. Securities and Exchange Commission 
\13\ (``NetCoalition'') the D.C. Circuit upheld the Commission's use of 
a market-based approach in evaluating the fairness of market data fees 
against a challenge claiming that Congress mandated a cost-based 
approach.\14\ As the court emphasized, the Commission ``intended in 
Regulation NMS that `market forces, rather than regulatory 
requirements' play a role in determining the market data . . . to be 
made available to investors and at what cost.'' \15\
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    \13\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
    \14\ See NetCoalition, at 534-535.
    \15\ Id. at 537.
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    Further, ``[n]o one disputes that competition for order flow is 
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market 
system, buyers and sellers of securities, and the broker-dealers that 
act as their order-routing agents, have a wide range of choices of 
where to route orders for execution'; [and] `no exchange can afford to 
take its market share percentages for granted' because `no exchange 
possesses a monopoly, regulatory or otherwise, in the execution of 
order flow from broker dealers'. . . .'' \16\ Although the court and 
the SEC were discussing the cash equities markets, the Exchange 
believes that these views apply with equal force to the options 
markets.
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    \16\ Id. at 539 (quoting Securities Exchange Act Release No. 
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008) 
(SR-NYSEArca-2006-21)).
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EA Credit Proposal
    Nasdaq, Inc., the parent company of NOM and EA, has various 
affiliates that offer services to firms conducting a securities 
business. In the U.S., Nasdaq has six options exchanges and three 
equities exchanges along with EA and a routing broker-dealer.\17\ Firms 
have overlapping memberships at various Nasdaq entities. Any firm may 
register to become a member of The NASDAQ Stock Market LLC and transact 
business on NOM. There are various NOM members that are members of 
other options exchanges and transact business on other platforms such 
as eSpeed. Today, NOM does not offer a U.S. Treasury securities 
product. EA and

[[Page 62214]]

NOM offer different services to firms, such as banking institutions 
seeking to establish securities positions and hedge their portfolios.
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    \17\ Nasdaq, Inc. owns and operates, among other entities, 
Nasdaq, NASDAQ PHLX, LLC, NASDAQ BX, INC., the International 
Securities Exchange, Inc., ISE GEMINI, LLC, ISE Mercury, LLC, EA and 
Nasdaq Execution Services.
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    This proposal for EA to pay a credit to a dual access client is 
reasonable because it would attract greater liquidity to NOM for the 
benefit of its market participants because it would encourage NOM 
Participants to execute a greater number of Eligible Contracts \18\ on 
NOM to qualify for the higher MARS Payment tiers. Order flow benefits 
all market participants that have an opportunity to interact with the 
additional order flow. NOM Participants receive a corresponding benefit 
in terms of a NOM MARS Payment in return for that order flow.
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    \18\ See note 6 above.
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    This proposal for EA to pay a credit to a dual access client is 
equitable and not unfairly discriminatory because all NOM Participants 
are eligible to qualify for MARS Payments provided they have System 
Eligibility and execute the requisite number of Eligible Contracts on 
NOM. The Exchange uniformly pays MARS Payments to NOM Participants.
    Diversity in the products and services offered by Nasdaq among its 
affiliates enhances competition and benefits consumers. Dual access 
clients seeking to transact business on NOM and also on EA are eligible 
to receive multiple benefits with this proposal that would result in 
lower costs to transact business on NOM and EA. This proposal will 
continue to treat all NOM Participants in a similar fashion as 
explained in more detail below. Likewise, all EA clients will be 
treated uniformly. The proposal does not create a disparity in the 
treatment of market participants transacting business on NOM or EA. 
This proposal would allow dual access clients to benefit from lower 
costs of transacting business as a result of providing a benefit to NOM 
in terms of order flow. NOM will reward all NOM Participants that 
execute Eligible Contracts on NOM in a uniform fashion; all NOM 
Participants are eligible to qualify for MARS and receive rebates.
    The Exchange believes that this proposal serves the interests of 
customers, issuers, broker-dealers, and other persons using the 
facilities of NOM because this proposal continues to offer rebates to 
NOM Participants directing order flow to NOM to the benefit of all NOM 
Participants who then have access to the additional liquidity. The 
credit being paid by EA is not inconsistent with the Act in any 
respect. The NOM rebates and the EA credit are both reasonable for the 
reasons mentioned herein. The proposed EA credit should attract order 
flow to NOM to the benefit of NOM Participants. The Exchange's proposal 
continues to provide all NOM Participants an opportunity to receive 
rebates and therefore enables them to lower costs. The proposal does 
not restrict any existing rebates or increase any other fees, and 
therefore will not place any NOM Participants that do not qualify for 
the rebate in a less favorable position. In fact, to the extent that 
the proposal succeeds in its competitive goal of attracting more order 
flow to NOM, it has the potential to benefit all NOM Participants.
    The proposed credit to dual access clients is consistent with an 
equitable allocation of fees because it benefits not only NOM 
Participants receiving the MARS rebate, but has the potential to 
benefit all other NOM Participants as well. Specifically, the proposal 
is intended to attract a larger amount of Eligible Contracts to the 
Exchange. Today, NOM offers MARS Payments to encourage NOM to direct 
Eligible Contracts to the Exchange, and the proposal will provide an 
additional incentive to direct order flow to NOM.
    The proposed credit to dual access clients is structured as a 
volume-based discount. The Commission has previously accepted such 
volume tiers, and they have been adopted by various options exchanges. 
Tiers are a well-established method for drawing liquidity to an 
exchange by paying higher rebates to those members that direct a 
greater amount of order flow to the Exchange. Volume tiers in both the 
cash equity and options markets provide reduced pricing to the heaviest 
liquidity providers and liquidity takers. As with existing tiers, the 
higher the percentage of a market participant's executed orders on NOM, 
the higher the rebate. This proposal pays MARS Payments on the volume 
executed only on NOM, thereby targeting the benefit on the exchange. 
The MARS rebate is an equitable means of incentivizing dual access 
clients to increase the amount of Eligible contracts transacted on NOM 
to receive multiple benefits.
    The Exchange's proposal is not unfairly discriminatory. MARS 
Payments will continue to be paid uniformly to NOM Participants that 
qualify for these rebates. Any NOM Participant may qualify for MARS. 
Those NOM Participants that send a certain amount of Eligible Contracts 
today already benefit by receiving MARS rebates for those Eligible 
Contracts when transacted on NOM. This proposal seeks to incentivize 
those Participants to send more Eligible Contracts to receive not only 
the MARS rebate, but also another benefit associated with their 
participation at EA. Any firm may register to access EA to transact 
U.S. Treasury securities and therefore would become eligible for the 
credit, provided the market participant transacted the requisite 
Eligible Contracts on NOM. Therefore, the proposal does not 
discriminate among NOM Participants, but rather continues to 
incentivize them to execute as many Eligible Contracts as possible on 
NOM in order to receive the benefit of the rebate on those orders. The 
proposal may also incentivize NOM Participants to register to transact 
business on EA to enjoy even more benefits in addition to the MARS 
rebates they may receive on NOM if they qualify.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. In terms of inter-market 
competition, the Exchange 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, the Exchange 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, 
the Exchange believes that the degree to which fee changes in this 
market may impose any burden on competition is extremely limited.
    The proposed fee changes are competitive and do not impose a burden 
on inter-market competition. Today, other venues offer rebate programs, 
discounted fees and incentives for maintain routing systems.\19\ In 
sum, if the changes proposed herein are unattractive to market 
participants, it is likely that the Exchange will lose market share as 
a result. Accordingly, the Exchange does not believe that the

[[Page 62215]]

proposed changes will impair the ability of members or competing order 
execution venues to maintain their competitive standing in the 
financial markets.
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    \19\ See Phlx's Pricing Schedule at Section B (Customer Rebate 
Program) and Section IV, Part E (MARS). Also, the International 
Securities Exchange LLC (``ISE'') offers a lower Market Maker Taker 
Fee for Select Symbols of $0.44 per contract for Market Makers with 
total affiliated Priority Customer Complex ADV of 150,000 or more 
contracts. See ISE's Fee Schedule.
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EA Credit Proposal
    This proposal is not anti-competitive in nature. Today, NOM 
Participants are eligible to receive MARS Payments without being 
clients of EA. The proposal does not require NOM Participants to become 
clients of EA; rather dual access clients are simply provided another 
benefit for transacting volume on NOM, as NOM Participants. The 
proposal does not burden intra-market competition on NOM; rather, it 
incentivizes NOM Participants to execute as many Eligible Contracts on 
NOM as possible to obtain higher MARS rebates and reduce costs--an 
inherently pro-competitive result. NOM and EA offer firms diverse 
product offerings. This proposal simply encourage NOM Participants to 
utilize EA's services and provides them discounted costs. NOM 
Participants that do not become clients of EA continue to receive the 
same rebates as NOM Participants that are clients of EA when executing 
the same number of Eligible Contracts on NOM. For these reasons the 
Exchange does not believe that the proposal imposes a burden on 
competition with respect to NOM Participants. The Exchange does not 
believe that a NOM Participant transacting Eligible Contracts on NOM is 
in any worse of a position with this proposal. All NOM Participants are 
eligible to participate in the MARS program and receive rebates, 
provided they qualify for MARS.
    The NOM Participant that does not choose to be a client of EA is 
not able to take advantage of the credit in this proposal, because it 
has not expended the effort to become a client of EA and therefore 
transacted business on eSpeed, but it is free to do so at any time. Any 
firm may register to access EA to transact U.S. Treasury securities and 
therefore would become eligible for the credit, provided the market 
participant transacted the requisite Eligible Contracts on NOM. 
Fundamentally, this proposal offers market participants a price 
decrease, the essence of competition. There is no evidence to support a 
conclusion that competition would be harmed with the implementation of 
this proposal. The interests of all investors are furthered by the 
lowering of prices as a result of robust competition. NOM does not have 
market power with respect to U.S. Treasury securities. Therefore, 
offering a credit to dual access clients on EA is not anti-competitive 
and does not result in an undue burden on inter-market competition with 
respect to U.S. Treasury securities.
    The Exchange believes that paying the proposed MARS Payment to 
qualifying NOM Participants that have System eligibility and have 
executed the Eligible Contracts in a month does not create an undue 
burden on intra-market competition because the Exchange is counting all 
Firm, JBO, Broker-Dealer and Professional volume toward the Eligible 
Contracts. The increased order flow will bring increased liquidity to 
the Exchange for the benefit of all Exchange participants. To the 
extent the purpose of the proposed MARS is achieved, all the Exchange's 
market participants, including Professionals and Broker-Dealers, should 
benefit from the improved market liquidity.
    The Exchange believes that the proposed change would increase both 
inter-market and intra-market competition by providing an opportunity 
to lower costs on eSpeed and offering NOM Participants continued 
rebates, thereby lowering costs. The proposed EA credit would enable 
dual access clients to lower their costs of transacting on eSpeed, as 
well as NOM, and incent them to provide additional liquidity at the 
Exchange, thereby enhancing the quality of its markets and increasing 
the volume of contracts traded on NOM. To the extent that this purpose 
is achieved, all the Exchange's market participants should benefit from 
the improved market liquidity.
    With respect to inter-market competition on NOM, today there is 
fierce competition in options pricing. Several exchanges offer programs 
similar to MARS.\20\ The rebates reduce the transaction cost of doing 
business on NOM, which ultimately reduces the costs passed on to 
investors. As a result, investors would be more likely to direct order 
flow to NOM, which results in tighter spreads, increased trading 
opportunities, and an overall better functioning trading platform. Thus 
both the liquidity provider and the investing public would benefit from 
the price reduction. The rebates on NOM would also provide an incentive 
for other options exchanges to match the discounted prices by 
developing their own innovative pricing strategies or increasing the 
quality of their execution services.
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    \20\ The Chicago Board of Options Exchange, Inc. (``CBOE'') 
currently offers a similar Order Routing Subsidy (``ORS'') and 
Complex Order Routing Subsidy (``CORS'') which, similar to the 
current proposal, allows CBOE members to enter into subsidy 
arrangements with CBOE Trading Permit Holders (``TPHs'') that 
provide certain order routing functionalities to other CBOE TPHs 
and/or use such functionalities themselves. See Securities Exchange 
Act Release Nos. 55629 (April 13, 2007), 72 FR 19992 (April 20, 
2007) (SR-CBOE-2007-34) and 57498 (March 14, 2008), 73 FR 15018 
(March 20, 2008) (SR-CBOE-2008-27). Also, NYSE MKT LLC (``NYSE 
MKT'') had a Market Access and Connectivity Subsidy (``MAC'') which 
allowed NYSE MKT members to enter into subsidy arrangements with ATP 
Holders that provided certain order routing functionalities to other 
ATP Holders and/or use such functionalities themselves. The NYSE MKT 
program was discontinued. See Securities Exchange Act Release Nos. 
71532 (February 19, 2014), 79 FR 9563 (February 12, 2015) (SR-
NYSEMKT-2014-12) and 75609 (August 11, 2015), 80 FR 48132 (August 5, 
2015) (SR-NYSEMKT-2015-59).
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    With respect to the intra-market burden on competition on EA, the 
market has very few barriers to entry. Many broker-dealers can 
facilitate transactions in U.S. Treasuries. EA is one of a number of 
broker-dealers that offers a trading platform in U.S. Treasury 
securities. The transaction fees are competitive and often bilaterally 
negotiated. Competition comes in the form of negotiation with clients 
over fees, which clients compare with similar fees they are charged on 
other similar competitive platforms. The Exchange does not believe this 
proposal imposes an undue burden on intra-market competition for EA 
because of the nature of its business model and competitive nature of 
its fees. With respect to the inter-market burden on competition, EA 
has various broker-dealer competitors. The competitive nature of 
pricing for EA's services vis-a-vis its competitors has led to the 
reduction of fees charged by EA over the last few years. The ability to 
negotiate pricing provides market participants with negotiating power 
at each venue. Furthermore, as compared to several years ago, the 
increased number of competitors in this space has forced pricing to be 
reduced on all venues, which has resulted in lower costs to 
participants of these venues, including EA. Introducing this credit for 
participants transacting business on EA, provided they transact 
business on NOM, will further lower costs to these participants on both 
venues.
    The Exchange believes EA's proposed pricing will not impose an 
undue harm on intra-market competition but rather will benefit market 
participants transacting business on EA by lowering costs and providing 
a more competitive environment to transact treasury securities. EA 
competitors can adjust their prices to compete with EA. There is no 
need for EA competitors to replicate the same proposal offered by EA. 
Fundamentally, the proposal is a price reduction, and therefore is 
consistent with achieving the benefits of the robust competition that 
clearly exists in this market. Forcing other

[[Page 62216]]

competitors to lower prices to compete with EA benefits investors.
    Given the robust competition for volume among options markets, many 
of which offer the same products, attracting order flow by offering 
rebates is consistent with the pro-competitive goals of the Act.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (a) By order approve or disapprove such proposed rule change, or
    (b) institute proceedings to determine whether the proposed rule 
change should be 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-2016-121 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-2016-121. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NASDAQ-2016-121 and should 
be submitted on or before September 29, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-21492 Filed 9-7-16; 8:45 am]
 BILLING CODE 8011-01-P