81 FR 72844 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Specialized Quote Feed Port Fees
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 204 (October 21, 2016)
Federal Register Volume 81, Issue 204 (October 21, 2016)
| Page Range | 72844-72847 | |
| FR Document | 2016-25467 |
[Federal Register Volume 81, Number 204 (Friday, October 21, 2016)] [Notices] [Pages 72844-72847] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-25467] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79105; File No. SR-NASDAQ-2016-133] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Specialized Quote Feed Port Fees October 17, 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 October 3, 2016, 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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Chapter XV, entitled ``Options Pricing,'' at Section 3, entitled ``NASDAQ Options Market--Access Services.'' Chapter XV governs pricing for Exchange members using the NASDAQ Options Market LLC (``NOM''), the Exchange's facility for executing and routing standardized equity and index options. The Exchange proposes to amend Specialized Quote Feed (``SQF'') Port \3\ Fees. --------------------------------------------------------------------------- \3\ SQF ports are ports that receive inbound quotes at any time within that month. The SQF Port allows a NOM Market Maker to access information such as execution reports and other relevant data through a single feed. For example, this data would show which symbols are trading on NOM and the current state of an options symbol (i.e., open for trading, trading, halted or closed). Auction notifications and execution reports are also available. NOM Market Makers rely on data available through the SQF Port to provide them the necessary information to perform market making activities. --------------------------------------------------------------------------- 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 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 amend the SQF Port Fees in Chapter XV, Section 3 of the NOM Rules, while the Exchange transitions to state-of- the-art hardware and software architecture to achieve a more efficient and more robust infrastructure to support the growing needs of our Options Participants (``NOM Refresh''). In connection with the NOM Refresh, NOM Market Makers will be required to make changes to [[Page 72845]] connect to the new NOM System via their SQF Ports, among other changes. The number of SQF Ports required by NOM Market Makers may be reduced, since a single connection may be utilized to quote across all symbols. The Exchange anticipates that NOM Market Makers will benefit from the efficiency of the service that will be available to them as a result of the NOM Refresh. While NOM Market Makers will be required to make network and other technical changes in order to connect to NOM via SQF, the Exchange believes that costs will decline overall as a result of the more efficient connectivity offered by the NOM Refresh. The Exchange intends to provide NOM Market Makers with new SQF ports for connectivity and functionality testing so that NOM Market Makers may migrate from the old to the new SQF Ports over a reasonable period of time. The Exchange proposes to amend the current SQF Port pricing of $750 per port, per month for purposes of the NOM Refresh. During the months of October and November 2016 (``NOM Refresh Period''), NOM Market Makers will be subject to a Fixed SQF Port Fee. The Fixed SQF Port Fee will be the amount that was paid by the NOM Market Maker for SQF Ports for the month of August 2016. NOM Market Makers will not be assessed an SQF Port Fee for their use of the new version of the SQF Ports to connect to the new environment during the NOM Refresh Period.\4\ The current SQF Port Fee of $750 will no longer be assessed to current NOM Market Makers. Only new SQF Ports would be utilized as of December 1, 2016; the current ports will be eliminated after the NOM Refresh is complete. --------------------------------------------------------------------------- \4\ For example if a NOM Market Maker obtained 1 new SQF Port to test during the NOM Refresh Period, the NOM Market Maker would not be assessed a new SQF Port Fee for that port, but would only pay the Fixed SQF Port Fee during the two months. --------------------------------------------------------------------------- If a NOM Participant applies to be a new NOM Market Maker after October 3, 2016 and requests an SQF Port during the time period from October 3, 2016 through November 30, 2016, the new NOM Market Maker would be assessed $750.00 per port, per month. The Exchange intends to file a separate rule change to propose new SQF Ports Fees for December 2016. The Exchange also proposes to delete the OTTO Port Transition Fee Waiver. This waiver states that NOM Participants will not be assessed an SQF Port Fee in the month in which the NOM Participant has cancelled an OTTO Port and transitioned to an SQF Port. In order to receive the waiver, the Participant is required to provide the Exchange with written notification of the transition. In light of the proposed amendments to SQF fees, the Exchange proposes to remove the OTTO Port Transition Fee Waive [sic]. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\5\ in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,\6\ 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, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. --------------------------------------------------------------------------- \5\ 15 U.S.C. 78f(b). \6\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- 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.'' \7\ --------------------------------------------------------------------------- \7\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting Release''). --------------------------------------------------------------------------- Likewise, in NetCoalition v. Securities and Exchange Commission \8\ (``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.\9\ 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.'' \10\ --------------------------------------------------------------------------- \8\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010). \9\ See NetCoalition, at 534-535. \10\ Id. at 537. --------------------------------------------------------------------------- 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' . . . . '' \11\ 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. --------------------------------------------------------------------------- \11\ 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)). --------------------------------------------------------------------------- The Exchange believes it is reasonable to allow NOM Market Makers to utilize new SQF Ports at no cost during the NOM Refresh Period to transition their current SQF Ports to the new SQF Ports that will be offered as a result of the NOM Refresh. In order to ease the transition from the current ports to new ports, NOM Market Makers would be given an extended period to test functionality and connectivity and resolve any issues that may arise during the testing phase with the new SQF Ports. Therefore, pursuant to this proposal, new SQF Ports will be offered at no cost to those NOM Market Makers that currently pay $750 per SQF Port, per month. The Exchange believes it is equitable and not unfairly discriminatory to allow NOM Market Makers to utilize new SQF Ports at no cost because the Exchange is permitting all current NOM Market Makers, who will be paying the SQF Port Fixed Fee, the opportunity to utilize the new SQF Ports at no costs. The Exchange's proposal to transition to a Fixed SQF Port Fee during the NOM Refresh Period (October and November 2016) is reasonable because NOM Market Makers will be able to continue to utilize their existing SQF Ports during the NOM Refresh Period to continue to conduct their business at a fixed cost. The Exchange believes that this will allow NOM Market Makers to have flexibility when testing the new SQF Ports as they will not be limited in number by cost. The Exchange believes that assessing a Fixed SQF Port Fee utilizing the August 2016 billing is reasonable because the Exchange desires to offer NOM Market Makers who currently have SQF Ports some certainty with respect to their costs through the NOM Refresh. The Exchange believes that utilizing the month of August 2016 as the Fixed SQF Port Fee is reasonable because it should reflect an accurate representation of the number of ports typically utilized by that particular NOM Market Maker for SQF Ports. The month of August is typically not an active trading month and should be representative of the typical pattern of [[Page 72846]] usage for the NOM Market Maker. Also, these NOM Market Makers would not be assessed any fees to utilize as many new SQF Ports as they require to test in the new system. The Exchange believes that assessing a Fixed SQF Port Fee utilizing the August 2016 billing is equitable and not unfairly discriminatory because the Exchange will assess all current users of SQF Ports a Fixed SQF Port Fee based on the same criteria. The Exchange believes that assessing new NOM Market Makers that do not have any SQF Ports and became NOM Market Makers after October 3, 2016, the current SQF Port fee of $750, per port, per month from October 3, 2016 through November 30, 2016 is reasonable because these NOM Market Makers would not be required to maintain two sets of ports during the transition.\12\ Existing NOM Market Makers will be required to maintain old as well as new SQF ports during portions of the migration. These NOM Market Makers would be able to commence utilizing the new SQF ports for testing. As previously explained, the technology refresh will increase the efficiency with which members can connect to the NOM System. As a result of the refresh, members would not be required to utilize the same number of ports as they do today to connect to the NOM System and therefore this should reduce the number of SQF ports required and lower costs. --------------------------------------------------------------------------- \12\ Currently, all NOM Market Makers are utilizing SQF Ports. If a NOM Participant applied to become a NOM Market Maker from October 3, 2016 through November 30, 2016, they could still obtain the current SQF Ports. After December 1, 2016, only the new SQF Ports would be offered to all NOM Market Makers. --------------------------------------------------------------------------- The Exchange believes that assessing new NOM Market Makers that do not have any SQF Ports and became NOM Market Makers after October 3, 2016, the current SQF Port fee of $750, per port, per month from October 3, 2016 through November 30, 2016 is equitable and not unfairly discriminatory because new NOM Market Makers would not be paying a Fixed SQF Port Fee for their current SQF Ports. All current NOM Market Makers would be paying a Fixed SQF Port Fee to utilize SQF Ports. The Exchange's proposal to remove the OTTO Port Transition Fee Waiver is reasonable because the Exchange is amending the pricing for SQF Ports. Today, the Exchange is assessing $750 to obtain either an OTTO or SQF Port. With the NOM Refresh, the Exchange proposed to amend pricing for SQF Ports and eliminate the waiver because the pricing for SQF Ports is currently changing and will be changed again in November. A NOM Market Maker that does not have any SQF Ports and desires to obtain an SQF Port would be assessed $750. The Exchange's proposal to remove the OTTO Port Transition Fee Waiver is equitable and not unfairly discriminatory because the Exchange will not offer any Participant the waiver. 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. In this instance, the proposed changes to the SQF Port Fee do not impose a burden on competition because 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 proposed changes will impair the ability of members or competing order execution venues to maintain their competitive standing in the financial markets. In terms of intra-market competition, offering NOM Market Makers the opportunity to utilize certain SQF Ports during the NOM Refresh Period at no cost does not impose an undue burden on competition. NOM Market Makers would be able to readily test ports at no additional cost and without limit. The Exchange is permitting all current NOM Market Makers, who will be paying the SQF Port Fixed Fee, the opportunity to utilize the new SQF Ports at no costs. The assessment of a Fixed SQF Port Fee does not impose an undue burden on competition because utilizing the month of August 2016 as the Fixed SQF Port Fee is an accurate representation of the number of ports typically utilized by that particular NOM Market Maker for SQF Ports. The month of August is typically not an active trading month and should be representative of the typical pattern of usage for the NOM Market Maker. All current users of SQF Ports will be assessed a Fixed SQF Port Fee based on the same criteria. The Exchange believes that assessing new NOM Market Makers that do not have any SQF Ports and become NOM Market Makers after October 3, 2016, the current SQF Port fee of $750, per port, per month from October 3, 2016 through November 30, 2016 does not impose an undue burden on competition because new NOM Market Makers would not be paying a Fixed SQF Port Fee for their current SQF Ports. All current NOM Market Makers would be paying a Fixed SQF Port Fee to utilize SQF Ports. The Exchange's proposal to delete the OTTO Port Transition Fee does not impose an undue burden on competition because the Exchange will not offer any Participant the waiver. 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.\13\ --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A)(ii). --------------------------------------------------------------------------- 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: [[Page 72847]] Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-NASDAQ-2016-133 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-2016-133. 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-2016-133 and should be submitted on or before November 14, 2016. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\14\ --------------------------------------------------------------------------- \14\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-25467 Filed 10-20-16; 8:45 am] BILLING CODE 8011-01-P
![72844 Federal Register / Vol. 81, No. 204 / Friday, October 21, 2016 / Notices
C. Self-Regulatory Organization’s rules/sro.shtml). Copies of the proposed rule change from interested
Statement on Comments on the submission, all subsequent persons.
Proposed Rule Change Received From amendments, all written statements
I. Self-Regulatory Organization’s
Members, Participants, or Others with respect to the proposed rule
Statement of the Terms of Substance of
No written comments were solicited change that are filed with the
the Proposed Rule Change
or received with respect to the proposed Commission, and all written
communications relating to the The Exchange proposes to amend
rule change.
proposed rule change between the Chapter XV, entitled ‘‘Options Pricing,’’
III. Date of Effectiveness of the Commission and any person, other than at Section 3, entitled ‘‘NASDAQ
Proposed Rule Change and Timing for those that may be withheld from the Options Market—Access Services.’’
Commission Action public in accordance with the Chapter XV governs pricing for
The foregoing rule change is effective provisions of 5 U.S.C. 552, will be Exchange members using the NASDAQ
upon filing pursuant to Section available for Web site viewing and Options Market LLC (‘‘NOM’’), the
19(b)(3)(A) 10 of the Act and printing in the Commission’s Public Exchange’s facility for executing and
subparagraph (f)(2) of Rule 19b–4 11 Reference Room, 100 F Street NE., routing standardized equity and index
thereunder, because it establishes a due, Washington, DC 20549 on official options. The Exchange proposes to
fee, or other charge imposed by the business days between the hours of amend Specialized Quote Feed (‘‘SQF’’)
Exchange. 10:00 a.m. and 3:00 p.m. Copies of such Port 3 Fees.
At any time within 60 days of the filing also will be available for The text of the proposed rule change
filing of such proposed rule change, the inspection and copying at the principal is available on the Exchange’s Web site
Commission summarily may office of the Exchange. All comments at http://nasdaq.cchwallstreet.com, at
received will be posted without change; the principal office of the Exchange, and
temporarily suspend such rule change if
at the Commission’s Public Reference
it appears to the Commission that such the Commission does not edit personal
Room.
action is necessary or appropriate in the identifying information from
public interest, for the protection of submissions. You should submit only II. Self-Regulatory Organization’s
investors, or otherwise in furtherance of information that you wish to make Statement of the Purpose of, and
the purposes of the Act. If the available publicly. All submissions Statutory Basis for, the Proposed Rule
Commission takes such action, the should refer to File Number SR–NYSE– Change
Commission shall institute proceedings 2016–65, and should be submitted on or In its filing with the Commission, the
under Section 19(b)(2)(B) 12 of the Act to before November 14, 2016. Exchange included statements
determine whether the proposed rule For the Commission, by the Division of concerning the purpose of and basis for
change should be approved or Trading and Markets, pursuant to delegated the proposed rule change and discussed
disapproved. authority.13 any comments it received on the
IV. Solicitation of Comments Robert W. Errett, proposed rule change. The text of these
Deputy Secretary. statements may be examined at the
Interested persons are invited to places specified in Item IV below. The
[FR Doc. 2016–25466 Filed 10–20–16; 8:45 am]
submit written data, views, and Exchange has prepared summaries, set
BILLING CODE 8011–01–P
arguments concerning the foregoing, forth in sections A, B, and C below, of
including whether the proposed rule the most significant aspects of such
change is consistent with the Act. statements.
SECURITIES AND EXCHANGE
Comments may be submitted by any of
COMMISSION A. Self-Regulatory Organization’s
the following methods:
[Release No. 34–79105; File No. SR– Statement of the Purpose of, and
Electronic Comments Statutory Basis for, the Proposed Rule
NASDAQ–2016–133]
• Use the Commission’s Internet Change
comment form (http://www.sec.gov/ Self-Regulatory Organizations; The
1. Purpose
rules/sro.shtml); or NASDAQ Stock Market LLC; Notice of
• Send an email to rule-comments@ Filing and Immediate Effectiveness of The Exchange proposes to amend the
sec.gov. Please include File Number SR– Proposed Rule Change To Amend SQF Port Fees in Chapter XV, Section 3
NYSE–2016–65 on the subject line. Specialized Quote Feed Port Fees of the NOM Rules, while the Exchange
transitions to state-of-the-art hardware
Paper Comments October 17, 2016. and software architecture to achieve a
• Send paper comments in triplicate Pursuant to Section 19(b)(1) of the more efficient and more robust
to Brent J. Fields, Secretary, Securities Securities Exchange Act of 1934 infrastructure to support the growing
and Exchange Commission, 100 F Street (‘‘Act’’),1 and Rule 19b–4 thereunder,2 needs of our Options Participants
NE., Washington, DC 20549–1090. notice is hereby given that on October (‘‘NOM Refresh’’). In connection with
All submissions should refer to File 3, 2016, The NASDAQ Stock Market the NOM Refresh, NOM Market Makers
Number SR–NYSE–2016–65. This file LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed will be required to make changes to
number should be included on the with the Securities and Exchange
subject line if email is used. To help the Commission (‘‘SEC’’ or ‘‘Commission’’) 3 SQF ports are ports that receive inbound quotes
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Commission process and review your the proposed rule change as described at any time within that month. The SQF Port allows
in Items I, II, and III, below, which Items a NOM Market Maker to access information such as
comments more efficiently, please use execution reports and other relevant data through
only one method. The Commission will have been prepared by the Exchange. a single feed. For example, this data would show
post all comments on the Commission’s The Commission is publishing this which symbols are trading on NOM and the current
Internet Web site (http://www.sec.gov/ notice to solicit comments on the state of an options symbol (i.e., open for trading,
trading, halted or closed). Auction notifications and
execution reports are also available. NOM Market
10 15 U.S.C. 78s(b)(3)(A). 13 17 CFR 200.30–3(a)(12). Makers rely on data available through the SQF Port
11 17 CFR 240.19b–4(f)(2). 1 15 U.S.C. 78s(b)(1). to provide them the necessary information to
12 15 U.S.C. 78s(b)(2)(B). 2 17 CFR 240.19b–4. perform market making activities.
VerDate Sep<11>2014 19:06 Oct 20, 2016 Jkt 241001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 E:\FR\FM\21OCN1.SGM 21OCN1](https://thefederalregister.org/doc/81_FR_73048/page/1.svg)
![Federal Register / Vol. 81, No. 204 / Friday, October 21, 2016 / Notices 72845
connect to the new NOM System via Participant is required to provide the because ‘no exchange possesses a
their SQF Ports, among other changes. Exchange with written notification of monopoly, regulatory or otherwise, in
The number of SQF Ports required by the transition. In light of the proposed the execution of order flow from broker
NOM Market Makers may be reduced, amendments to SQF fees, the Exchange dealers’ . . . . ’’ 11 Although the court
since a single connection may be proposes to remove the OTTO Port and the SEC were discussing the cash
utilized to quote across all symbols. The Transition Fee Waive [sic]. equities markets, the Exchange believes
Exchange anticipates that NOM Market that these views apply with equal force
2. Statutory Basis
Makers will benefit from the efficiency to the options markets.
of the service that will be available to The Exchange believes that its The Exchange believes it is reasonable
them as a result of the NOM Refresh. proposal is consistent with Section 6(b) to allow NOM Market Makers to utilize
While NOM Market Makers will be of the Act,5 in general, and furthers the new SQF Ports at no cost during the
required to make network and other objectives of Sections 6(b)(4) and 6(b)(5) NOM Refresh Period to transition their
technical changes in order to connect to of the Act,6 in particular, in that it current SQF Ports to the new SQF Ports
NOM via SQF, the Exchange believes provides for the equitable allocation of that will be offered as a result of the
that costs will decline overall as a result reasonable dues, fees and other charges NOM Refresh. In order to ease the
of the more efficient connectivity among members and issuers and other transition from the current ports to new
offered by the NOM Refresh. persons using any facility, and is not ports, NOM Market Makers would be
The Exchange intends to provide designed to permit unfair given an extended period to test
NOM Market Makers with new SQF discrimination between customers, functionality and connectivity and
ports for connectivity and functionality issuers, brokers, or dealers. resolve any issues that may arise during
testing so that NOM Market Makers may The Commission and the courts have the testing phase with the new SQF
migrate from the old to the new SQF repeatedly expressed their preference Ports. Therefore, pursuant to this
Ports over a reasonable period of time. for competition over regulatory proposal, new SQF Ports will be offered
The Exchange proposes to amend the intervention in determining prices, at no cost to those NOM Market Makers
current SQF Port pricing of $750 per products, and services in the securities that currently pay $750 per SQF Port,
port, per month for purposes of the markets. In Regulation NMS, while per month.
NOM Refresh. During the months of adopting a series of steps to improve the The Exchange believes it is equitable
October and November 2016 (‘‘NOM current market model, the Commission and not unfairly discriminatory to allow
Refresh Period’’), NOM Market Makers highlighted the importance of market NOM Market Makers to utilize new SQF
will be subject to a Fixed SQF Port Fee. forces in determining prices and SRO Ports at no cost because the Exchange is
The Fixed SQF Port Fee will be the revenues and, also, recognized that permitting all current NOM Market
amount that was paid by the NOM current regulation of the market system Makers, who will be paying the SQF
Market Maker for SQF Ports for the ‘‘has been remarkably successful in Port Fixed Fee, the opportunity to
month of August 2016. NOM Market promoting market competition in its utilize the new SQF Ports at no costs.
Makers will not be assessed an SQF Port broader forms that are most important to The Exchange’s proposal to transition
Fee for their use of the new version of investors and listed companies.’’ 7 to a Fixed SQF Port Fee during the
the SQF Ports to connect to the new Likewise, in NetCoalition v. Securities NOM Refresh Period (October and
environment during the NOM Refresh and Exchange Commission 8 November 2016) is reasonable because
Period.4 The current SQF Port Fee of (‘‘NetCoalition’’) the D.C. Circuit upheld NOM Market Makers will be able to
$750 will no longer be assessed to the Commission’s use of a market-based continue to utilize their existing SQF
current NOM Market Makers. Only new approach in evaluating the fairness of Ports during the NOM Refresh Period to
SQF Ports would be utilized as of market data fees against a challenge continue to conduct their business at a
December 1, 2016; the current ports will claiming that Congress mandated a cost- fixed cost. The Exchange believes that
be eliminated after the NOM Refresh is based approach.9 As the court this will allow NOM Market Makers to
complete. emphasized, the Commission ‘‘intended have flexibility when testing the new
If a NOM Participant applies to be a in Regulation NMS that ‘market forces, SQF Ports as they will not be limited in
new NOM Market Maker after October rather than regulatory requirements’ number by cost.
3, 2016 and requests an SQF Port during play a role in determining the market The Exchange believes that assessing
the time period from October 3, 2016 data . . . to be made available to a Fixed SQF Port Fee utilizing the
through November 30, 2016, the new investors and at what cost.’’ 10 August 2016 billing is reasonable
NOM Market Maker would be assessed Further, ‘‘[n]o one disputes that
because the Exchange desires to offer
$750.00 per port, per month. competition for order flow is ‘fierce.’
NOM Market Makers who currently
The Exchange intends to file a . . . As the SEC explained, ‘[i]n the U.S.
have SQF Ports some certainty with
separate rule change to propose new national market system, buyers and
respect to their costs through the NOM
SQF Ports Fees for December 2016. sellers of securities, and the broker-
The Exchange also proposes to delete Refresh. The Exchange believes that
dealers that act as their order-routing
the OTTO Port Transition Fee Waiver. utilizing the month of August 2016 as
agents, have a wide range of choices of
This waiver states that NOM the Fixed SQF Port Fee is reasonable
where to route orders for execution’;
Participants will not be assessed an SQF because it should reflect an accurate
[and] ‘no exchange can afford to take its
Port Fee in the month in which the representation of the number of ports
market share percentages for granted’
NOM Participant has cancelled an typically utilized by that particular
asabaliauskas on DSK3SPTVN1PROD with NOTICES
OTTO Port and transitioned to an SQF 5 15 U.S.C. 78f(b).
NOM Market Maker for SQF Ports. The
Port. In order to receive the waiver, the 6 15 U.S.C. 78f(b)(4) and (5). month of August is typically not an
7 Securities Exchange Act Release No. 51808 active trading month and should be
4 For example if a NOM Market Maker obtained (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) representative of the typical pattern of
1 new SQF Port to test during the NOM Refresh (‘‘Regulation NMS Adopting Release’’).
8 NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
Period, the NOM Market Maker would not be 11 Id. at 539 (quoting Securities Exchange Act
assessed a new SQF Port Fee for that port, but 2010). Release No. 59039 (December 2, 2008), 73 FR
9 See NetCoalition, at 534–535.
would only pay the Fixed SQF Port Fee during the 74770, 74782–83 (December 9, 2008) (SR–
two months. 10 Id. at 537. NYSEArca–2006–21)).
VerDate Sep<11>2014 19:06 Oct 20, 2016 Jkt 241001 PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 E:\FR\FM\21OCN1.SGM 21OCN1](https://thefederalregister.org/doc/81_FR_73048/page/2.svg)
![Federal Register / Vol. 81, No. 204 / Friday, October 21, 2016 / Notices 72847
Electronic Comments SMALL BUSINESS ADMINISTRATION Physical Loan Application Deadline
Date: 12/09/2016.
• Use the Commission’s Internet [Disaster Declaration #14811 and #14812] Eidl Loan Application Deadline Date:
comment form (http://www.sec.gov/ 07/10/2017.
Louisiana Disaster Number LA–00065.
rules/sro.shtml); or ADDRESSES: Submit completed loan
• Send an email to rule-comments@ AGENCY: U.S. Small Business applications to: U.S. Small Business
sec.gov. Please include File Number SR– Administration. Administration, Processing and
NASDAQ–2016–133 on the subject line. ACTION: Amendment 5. Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
Paper Comments SUMMARY: This is an amendment of the FOR FURTHER INFORMATION CONTACT: A.
Presidential declaration of a major Escobar, Office of Disaster Assistance,
• Send paper comments in triplicate disaster for the State of Louisiana
to Secretary, Securities and Exchange U.S. Small Business Administration,
(FEMA–4277–DR), dated 08/14/2016. 409 3rd Street SW., Suite 6050,
Commission, 100 F Street, NE., Incident: Severe Storms and Flooding. Washington, DC 20416.
Washington, DC 20549–1090. Incident Period: 08/11/2016 through
SUPPLEMENTARY INFORMATION: The notice
All submissions should refer to File 08/31/2016.
of the Presidential disaster declaration
Number SR–NASDAQ–2016–133. This EFFECTIVE DATE: 10/13/2016. for the State of North Carolina, dated
file number should be included on the Physical Loan Application Deadline 10/10/2016 is hereby amended to
subject line if email is used. To help the Date: 11/14/2016. include the following areas as adversely
Commission process and review your EIDL Loan Application Deadline Date: affected by the disaster:
comments more efficiently, please use 05/15/2017.
Primary Counties: (Physical Damage and
only one method. The Commission will ADDRESSES: Submit completed loan Economic Injury Loans): Bertie,
post all comments on the Commission’s applications to: U.S. Small Business Johnston, Wayne,Wilson.
Internet Web site (http://www.sec.gov/ Administration, Processing and Contiguous Counties: (Economic Injury
rules/sro.shtml). Copies of the Disbursement Center, 14925 Kingsport Loans Only):
Road, Fort Worth, TX 76155. North Carolina: Chowan, Hertford,
submission, all subsequent
amendments, all written statements FOR FURTHER INFORMATION CONTACT: A. Northampton.
with respect to the proposed rule Escobar, Office of Disaster Assistance, All other information in the original
change that are filed with the U.S. Small Business Administration, declaration remains unchanged.
Commission, and all written 409 3rd Street SW., Suite 6050,
Washington, DC 20416. (Catalog of Federal Domestic Assistance
communications relating to the Number 59008)
proposed rule change between the SUPPLEMENTARY INFORMATION: The notice
of the President’s major disaster James E. Rivera,
Commission and any person, other than
those that may be withheld from the declaration for the State of LOUISIANA, Associate Administrator
dated 08/14/2016 is hereby amended to for Disaster Assistance.
public in accordance with the
extend the deadline for filing [FR Doc. 2016–25445 Filed 10–20–16; 8:45 am]
provisions of 5 U.S.C. 552, will be
applications for physical damages as a BILLING CODE 8025–01–P
available for Web site viewing and result of this disaster to 11/14/2016.
printing in the Commission’s Public All other information in the original
Reference Room, 100 F Street NE., declaration remains unchanged. SMALL BUSINESS ADMINISTRATION
Washington, DC 20549, on official
(Catalog of Federal Domestic Assistance [Disaster Declaration #14911 and #14912]
business days between the hours of
Number 59008)
10:00 a.m. and 3:00 p.m. Copies of the North Carolina Disaster Number NC–
filing also will be available for James E. Rivera,
00081
inspection and copying at the principal Associate Administrator for Disaster
office of the Exchange. All comments Assistance. AGENCY: U.S. Small Business
received will be posted without change; [FR Doc. 2016–25450 Filed 10–20–16; 8:45 am] Administration.
the Commission does not edit personal BILLING CODE 8025–01–P ACTION: Amendment 2.
identifying information from
SUMMARY: This is an amendment of the
submissions. You should submit only Presidential declaration of a major
information that you wish to make SMALL BUSINESS ADMINISTRATION
disaster for the State of North Carolina
available publicly. All submissions [Disaster Declaration #14911 and #14912] (FEMA–4285–DR), dated 10/10/2016.
should refer to File Number SR– Incident: Hurricane Matthew.
NASDAQ–2016–133 and should be North Carolina Disaster Number NC– Incident Period: 10/04/2016 and
submitted on or before November 14, 00081 continuing.
2016. AGENCY: U.S. Small Business EFFECTIVE DATE: 10/12/2016.
For the Commission, by the Division of Administration. Physical Loan Application Deadline
Trading and Markets, pursuant to delegated ACTION: Amendment 1. Date: 12/09/2016.
authority.14 EIDL Loan Application Deadline Date:
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Robert W. Errett, SUMMARY: This is an amendment of the 07/10/2017.
Presidential declaration of a major ADDRESSES: Submit completed loan
Deputy Secretary.
disaster for the State of North Carolina applications to: U.S. Small Business
[FR Doc. 2016–25467 Filed 10–20–16; 8:45 am]
(FEMA—4285—DR), dated 10/10/2016. Administration, Processing and
BILLING CODE 8011–01–P Incident: Hurricane Matthew. Disbursement Center, 14925 Kingsport
Incident Period: 10/04/2016 and Road, Fort Worth, TX 76155.
continuing. FOR FURTHER INFORMATION CONTACT: A.
14 17 CFR 200.30–3(a)(12). DATES: EFFECTIVE DATE: 10/11/2016. Escobar, Office of Disaster Assistance,
VerDate Sep<11>2014 19:06 Oct 20, 2016 Jkt 241001 PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 E:\FR\FM\21OCN1.SGM 21OCN1](https://thefederalregister.org/doc/81_FR_73048/page/4.svg)
Document Created: 2018-02-13 16:36:21
Document Modified: 2018-02-13 16:36:21
| 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 | 81 FR 72844 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR