81 FR 75862 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend Rule 4702 To Adopt a New Retail Post-Only Order
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 211 (November 1, 2016)
Federal Register Volume 81, Issue 211 (November 1, 2016)
| Page Range | 75862-75865 | |
| FR Document | 2016-26301 |
[Federal Register Volume 81, Number 211 (Tuesday, November 1, 2016)] [Notices] [Pages 75862-75865] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-26301] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79163; File No. SR-NASDAQ-2016-141] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Amend Rule 4702 To Adopt a New Retail Post-Only Order October 26, 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 13, 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 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. --------------------------------------------------------------------------- \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 Rule 4702 (Order Types) [sic] adopt a New Retail Post-Only Order. 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. [[Page 75863]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this filing is to amend Rule 4702 (Order Types) to adopt a new Retail Post-Only Order type. Although based on the Post- Only Order, the Retail Post-Only Order differs from the Post-Only Order in two ways. First, the Retail Post-Only Order can only be used in connection with orders sent on behalf of retail customers, whereas a Post-Only Order is available for use by any market participant. Second, if a Retail Post Only Order would remove liquidity or if posting the order would require an adjustment to the price of the order for any reason, the order will be cancelled. In contrast, a Post-Only Order is designed to have its price adjusted as needed, for example, in order to avoid locking or crossing a Protected Quotation. With the Retail Post- Only Order, Nasdaq is providing firms with another way of managing their retail customer order flow. Currently, if a firm does not want a retail customer order to remove liquidity from the Exchange upon entry, the firm can select the RTFY routing option, which routes the order to destinations in the System routing table instead of immediately removing liquidity from the Exchange order book.\3\ Some firms, however, prefer to use their own routing infrastructure in seeking execution of a customer order rather than allowing that order to remove liquidity from the Exchange upon entry or instructing the Exchange to make a routing determination. In cancelling the order for any reason instead of adjusting its price, the Retail Post-Only Order will therefore provide firms with an alternative for handing [sic] retail customer orders. --------------------------------------------------------------------------- \3\ See Nasdaq Rule 4738(a)(1)(A)(v)(b); see also Securities Exchange Act Release No. 76718 (December 21, 2015), 80 FR 80847 (December 28, 2015) (SR-NASDAQ-2015-112). --------------------------------------------------------------------------- As noted above, the first key feature of the Retail Post-Only Order is that it is designed for use by retail customers. Accordingly, a Retail Post-Only Order must meet the criteria of a Designated Retail Order, as defined in Rule 7018, in addition to the criteria set forth in Rule 4702(b)(14).\4\ Nasdaq believes that defining a retail customer by reference to Rule 7018 is appropriate because this definition is already used in connection with other Nasdaq programs and fees, including the RTFY routing option, and defining a retail customer by reference to Rule 7018 will therefore keep the concept of ``retail''-- either as applied to a type of order or to a type of customer-- consistent across the Exchange. Nasdaq is offering this Order to retail customers because it will provide firms that handle retail customer order flow with an alternative to the methods of handling retail order flow that currently exist on the Exchange.\5\ By offering firms that handle retail order flow an additional choice, Nasdaq believes that the proposal could stimulate competition by attracting additional retail customer order flow to the Exchange. --------------------------------------------------------------------------- \4\ Rule 7018 provides that a Designated Retail Order is ``an agency or riskless principal order that meets the criteria of FINRA Rule 5320.03 and that originates from a natural person and is submitted to Nasdaq by a member that designates it pursuant to this rule, provided that no change is made to the terms of the order with respect to price or side of market and the order does not originate from a trading algorithm or any other computerized methodology. An order from a `natural person' can include orders on behalf of accounts that are held in a corporate legal form--such as an Individual Retirement Account, Corporation, or a Limited Liability Company--that has been established for the benefit of an individual or group of related family members, provided that the order is submitted by an individual. Members must submit a signed written attestation, in a form prescribed by Nasdaq, that they have implemented policies and procedures that are reasonably designed to ensure that substantially all orders designated by the member as `Designated Retail Orders' comply with these requirements. Orders may be designated on an order-by-order basis, or by designating all orders on a particular order entry port as Designated Retail Orders.'' \5\ As noted above, there are various options a member may currently use to efficiently manage its order flow, such as utilizing the RTFY routing option or allowing that order to have its price adjusted and potentially remove liquidity. --------------------------------------------------------------------------- The second key feature of the Retail Post-Only Order is that it will cancel if the price of the Order would otherwise adjust for any reason. Rule 4702(b)(14) therefore states that when a new Retail Post- Only order is received, it will attempt to post on the Exchange Book. A Retail Post-Only order that cannot post to the Nasdaq Book at its limit price without having its price adjusted or removing liquidity will be cancelled.\6\ --------------------------------------------------------------------------- \6\ An order may have its price adjusted, for example, to satisfy a regulatory obligation, such as the prohibition under Regulation NMS against locking or crossing a Protected Quotation. See 17 CFR 242.610(d). Another scenario where the price of an order may have to be adjusted for purposes of regulatory compliance is Rule 201 of Regulation SHO, which requires trading centers to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution or display of a short sale order at a price at or below the current National Best Bid under certain circumstances. See 17 CFR 242.201. --------------------------------------------------------------------------- The Retail Post-Only Order is based on the Post-Only Order, and will therefore share most of the attributes of a Post-Only Order.\7\ For example, a Retail Post-Only Order may be entered with reserve size. As with the Post-Only Order, a Retail Post-Only Order may be entered in any whole share size between one share and 999,999 shares. Orders for fractional shares are not permitted. --------------------------------------------------------------------------- \7\ As defined in Rule 4703, the potential attributes that may apply to an order are (1) time-in-force; (2) size; (3) price; (4) pegging; (5) minimum quantity; (6) routing; (7) discretion; (8) reserve size; (9) attribution; (10) Intermarket Sweep Order; (11) display; and (12) participation in the Nasdaq Opening Cross or the Nasdaq Closing Cross. --------------------------------------------------------------------------- With respect to Time-in-Force (the period of time that the Nasdaq Market Center will hold the Order for potential execution), the Retail Post-Only Order may be entered with all times permitted by Time-in- Force;\8\ however, a Retail Post-Only Order that is entered as ``Immediate or Cancel'' will be canceled (because an Immediate or Cancel order is incapable of posting to the Nasdaq Book). --------------------------------------------------------------------------- \8\ Under Rule 4703(a), Participants specify an Order's Time-in- Force by designating a time at which the Order will become active and a time at which the Order will cease to be active. The available times for activating Orders are (1) time of the Order's receipt by the Nasdaq Market Center; (2) the Nasdaq Opening Cross (or 9:30 a.m. ET in the case of a security for which no Nasdaq Opening Cross occurs); (3) Market Hours, beginning after the completion of the Nasdaq Opening Cross (or at 9:30 a.m. ET in the case of a security for which no Nasdaq Opening Cross occurs); (4) the Nasdaq Closing Cross (or the end of Market Hours in the case of a security for which no Nasdaq Closing Cross occurs); (5) 8:00 a.m. ET, in the case of an Order using the SCAN or RTFY routing strategy that is entered prior to 8:00 a.m. ET; (6) the beginning of the Display-Only Period, in the case of a security that is the subject of a trading halt and for which trading will resume pursuant to a halt cross; and (7) the resumption of trading, in the case of a security that is the subject of a trading halt and for which trading resumes without a halt cross. --------------------------------------------------------------------------- Unlike the Post-Only Order, Retail Post-Only Orders cannot be designated as Intermarket Sweep Orders (``ISO''). The purpose of the Order is to allow firms to utilize their own routing infrastructure in deciding how to execute a retail customer order. Retail Post Only orders will therefore not route and have no routing strategies used in conjunction with the order, and will also not support the ISO attribute. Unlike the Post-Only Order, the Retail Post-Only Order will also not utilize the ``display'' attribute, since a Retail Post-Only Order may be either displayed or non-displayed. As with Post-Only Orders, Retail Post-Only Orders will support attribution, which permits a Participant to designate that the price and size of the Order will be displayed next to the Participant's MPID in market data disseminated by Nasdaq. A Retail Post-Only order may also participate in the Nasdaq Opening Cross and/or the Nasdaq Closing Cross. As with Post-Only Orders, Retail Post Only Orders will not support pegging (the attribute by which the price of the Order is automatically set with [[Page 75864]] reference to the National Best Bid or Offer), since the purpose of this Order is to cancel if the price of the Order needs to be adjusted. For the same reason, Retail Post Only Orders will also not support discretion (where an order has a non-displayed discretionary price range within which the entering Participant is willing to trade). The Retail Post-Only Order will be available for entry through Nasdaq's RASH, FIX and QIX order entry protocols. Nasdaq notes that almost all Designated Retail Orders received by the Exchange are entered through the RASH and FIX protocols. A user may also enter a Retail Post-Only Order during Pre-Market and Post-Market Hours.\9\ During these times, a Retail Post-Only Order will be processed in a manner identical to Market Hours. --------------------------------------------------------------------------- \9\ The term ``Market Hours'' means the period of time beginning at 9:30 a.m. ET and ending at 4:00 p.m. ET (or such earlier time as may be designated by Nasdaq on a day when Nasdaq closes early). The term ``Pre-Market Hours'' means the period of time beginning at 4:00 a.m. ET and ending immediately prior to the commencement of Market Hours. The term ``Post-Market Hours'' means the period of time beginning immediately after the end of Market Hours and ending at 8:00 p.m. ET. See Rule 4701(g). --------------------------------------------------------------------------- 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 Section 6(b)(5) of the Act,\11\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. The Exchange believes that this proposal is consistent with the Act because it will add a new functionality (cancelling an order for any reason instead of adjusting its price) that is not currently available on the Exchange. The Exchange believes that this new functionality is consistent with the Act because it will allow firms that use this Order to utilize their own routing infrastructure in determining how to execute a retail customer order, which will facilitate the efficient execution of those orders. Nasdaq believes that it is reasonable to offer this Order to retail customers only, as this Order will provide firms that handle retail customer orders with an alternative to the functionality for handling retail order flow that currently exists on the Exchange. The Exchange also notes that it already offers functionalities that are tailored to retail customer order flow, such as the RTFY routing option. In offering firms that handle retail customer orders an alternative to the functionality that currently exists on Nasdaq for retail customer orders, the Exchange believes that it may attract additional retail customer order flow to the Exchange, which would increase the diversity of order flow on the Exchange and enhance the Exchange's market quality. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Nasdaq believes that the attributes of the Retail Post-Only Order are also consistent with the Act. Nasdaq notes that some of the Order's attributes, such as size and attribution, are the same as the attributes of the Post-Only Order, upon which the Retail Post-Only Order is based. Nasdaq also notes that the Order's attributes reflect the functionality of the Retail Post-Only Order. For example, pegging will not be offered as an order attribute, given that the purpose of the Order is to cancel rather than have its price adjusted. 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. The Retail Post-Only Order is an optional order type that will be available for entry through Nasdaq's order entry protocols that are most commonly used to submit retail customer orders. The Retail Post-Only Order will provide retail customers with an order type and a resulting functionality that is not currently available on the Exchange. Although the Retail Post-Only Order will be offered to retail customers only, Nasdaq believes that this does not impose a burden on competition that is not necessary or appropriate. In providing an alternative to the Exchange's current methods of handling retail customer orders, Nasdaq believes that the proposal could stimulate competition by attracting additional retail customer order flow to the Exchange, which would increase the diversity of order flow on the Exchange and enhance the Exchange's market quality. 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 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-2016-141 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-2016-141. 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 [[Page 75865]] available publicly. All submissions should refer to File Number SR- NASDAQ-2016-141 and should be submitted on or before November 22, 2016 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\12\ Brent J. Fields, Secretary. --------------------------------------------------------------------------- \12\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- [FR Doc. 2016-26301 Filed 10-31-16; 8:45 am] BILLING CODE 8011-01-P
![75862 Federal Register / Vol. 81, No. 211 / Tuesday, November 1, 2016 / Notices
Regulatory Commission to add a POSTAL SERVICE www.prc.gov, Docket Nos. MC2017–8,
domestic shipping services contract to CP2017–23.
the list of Negotiated Service Product Change—Priority Mail
Negotiated Service Agreement Stanley F. Mires,
Agreements in the Mail Classification
Attorney, Federal Compliance.
Schedule’s Competitive Products List.
AGENCY: Postal ServiceTM. [FR Doc. 2016–26277 Filed 10–31–16; 8:45 am]
DATES: Effective date: November 1, BILLING CODE 7710–12–P
ACTION: Notice.
2016.
FOR FURTHER INFORMATION CONTACT: SUMMARY: The Postal Service gives
Elizabeth A. Reed, 202–268–3179. notice of filing a request with the Postal SECURITIES AND EXCHANGE
Regulatory Commission to add a COMMISSION
SUPPLEMENTARY INFORMATION: The domestic shipping services contract to
United States Postal Service® hereby the list of Negotiated Service [Release No. 34–79163; File No. SR–
gives notice that, pursuant to 39 U.S.C. Agreements in the Mail Classification NASDAQ–2016–141]
3642 and 3632(b)(3), on October 25, Schedule’s Competitive Products List.
Self-Regulatory Organizations; The
2016, it filed with the Postal Regulatory
DATES: Effective date: November 1, Nasdaq Stock Market LLC; Notice of
Commission a Request of the United
2016. Filing of Proposed Rule Change To
States Postal Service to Add Priority
Amend Rule 4702 To Adopt a New
Mail Express Contract 43 to Competitive FOR FURTHER INFORMATION CONTACT: Retail Post-Only Order
Product List. Documents are available at Elizabeth A. Reed, 202–268–3179.
www.prc.gov, Docket Nos. MC2017–12, October 26, 2016.
SUPPLEMENTARY INFORMATION: The
CP2017–27. United States Postal Service®
hereby Pursuant to Section 19(b)(1) of the
gives notice that, pursuant to 39 U.S.C. Securities Exchange Act of 1934
Stanley F. Mires,
3642 and 3632(b)(3), on October 25, (‘‘Act’’),1 and Rule 19b–4 thereunder,2
Attorney, Federal Compliance. notice is hereby given that on October
2016, it filed with the Postal Regulatory
[FR Doc. 2016–26274 Filed 10–31–16; 8:45 am]
Commission a Request of the United 13, 2016, The Nasdaq Stock Market LLC
BILLING CODE 7710–12–P
States Postal Service to Add Priority (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Mail Contract 251 to Competitive Securities and Exchange Commission
Product List. Documents are available at (‘‘SEC’’ or ‘‘Commission’’) the proposed
POSTAL SERVICE rule change as described in Items I and
www.prc.gov, Docket Nos. MC2017–9,
CP2017–24. II below, which Items have been
Product Change—Priority Mail prepared by the Exchange. The
Negotiated Service Agreement Stanley F. Mires, Commission is publishing this notice to
Attorney, Federal Compliance. solicit comments on the proposed rule
AGENCY: Postal ServiceTM. [FR Doc. 2016–26281 Filed 10–31–16; 8:45 am] change from interested persons.
ACTION: Notice. BILLING CODE 7710–12–P I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
SUMMARY: The Postal Service gives the Proposed Rule Change
notice of filing a request with the Postal POSTAL SERVICE
The Exchange proposes to amend
Regulatory Commission to add a Product Change—Priority Mail Rule 4702 (Order Types) [sic] adopt a
domestic shipping services contract to Negotiated Service Agreement New Retail Post-Only Order. The text of
the list of Negotiated Service the proposed rule change is available on
Agreements in the Mail Classification AGENCY: Postal ServiceTM. the Exchange’s Web site at http://
Schedule’s Competitive Products List. nasdaq.cchwallstreet.com, at the
ACTION: Notice.
DATES: Effective date: November 1, principal office of the Exchange, and at
2016. SUMMARY: The Postal Service gives the Commission’s Public Reference
notice of filing a request with the Postal Room.
FOR FURTHER INFORMATION CONTACT: Regulatory Commission to add a II. Self-Regulatory Organization’s
Elizabeth A. Reed, 202–268–3179. domestic shipping services contract to Statement of the Purpose of, and
SUPPLEMENTARY INFORMATION: The the list of Negotiated Service Statutory Basis for, the Proposed Rule
United States Postal Service® hereby Agreements in the Mail Classification Change
gives notice that, pursuant to 39 U.S.C. Schedule’s Competitive Products List.
In its filing with the Commission, the
3642 and 3632(b)(3), on October 25, DATES: Effective date: November 1, Exchange included statements
2016, it filed with the Postal Regulatory 2016. concerning the purpose of and basis for
Commission a Request of the United the proposed rule change and discussed
FOR FURTHER INFORMATION CONTACT:
States Postal Service to Add Priority any comments it received on the
Elizabeth A. Reed, 202–268–3179.
Mail Contract 252 to Competitive proposed rule change. The text of these
Product List. Documents are available at SUPPLEMENTARY INFORMATION: The statements may be examined at the
asabaliauskas on DSK3SPTVN1PROD with NOTICES
www.prc.gov, Docket Nos. MC2017–10, United States Postal Service® hereby places specified in Item IV below. The
CP2017–25. gives notice that, pursuant to 39 U.S.C. Exchange has prepared summaries, set
3642 and 3632(b)(3), on October 25, forth in sections A, B, and C below, of
Stanley F. Mires, 2016, it filed with the Postal Regulatory the most significant aspects of such
Attorney, Federal Compliance. Commission a Request of the United statements.
[FR Doc. 2016–26278 Filed 10–31–16; 8:45 am] States Postal Service to Add Priority
BILLING CODE 7710–12–P Mail Contract 250 to Competitive 1 15 U.S.C. 78s(b)(1).
Product List. Documents are available at 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 81, No. 211 / Tuesday, November 1, 2016 / Notices 75863
A. Self-Regulatory Organization’s defining a retail customer by reference Retail Post-Only Order may be entered
Statement of the Purpose of, and to Rule 7018 is appropriate because this with reserve size. As with the Post-Only
Statutory Basis for, the Proposed Rule definition is already used in connection Order, a Retail Post-Only Order may be
Change with other Nasdaq programs and fees, entered in any whole share size between
including the RTFY routing option, and one share and 999,999 shares. Orders for
1. Purpose
defining a retail customer by reference fractional shares are not permitted.
The purpose of this filing is to amend to Rule 7018 will therefore keep the With respect to Time-in-Force (the
Rule 4702 (Order Types) to adopt a new concept of ‘‘retail’’—either as applied to period of time that the Nasdaq Market
Retail Post-Only Order type. Although a type of order or to a type of Center will hold the Order for potential
based on the Post-Only Order, the Retail customer—consistent across the execution), the Retail Post-Only Order
Post-Only Order differs from the Post- Exchange. Nasdaq is offering this Order may be entered with all times permitted
Only Order in two ways. First, the Retail to retail customers because it will by Time-in-Force;8 however, a Retail
Post-Only Order can only be used in provide firms that handle retail Post-Only Order that is entered as
connection with orders sent on behalf of customer order flow with an alternative ‘‘Immediate or Cancel’’ will be canceled
retail customers, whereas a Post-Only to the methods of handling retail order (because an Immediate or Cancel order
Order is available for use by any market flow that currently exist on the is incapable of posting to the Nasdaq
participant. Second, if a Retail Post Exchange.5 By offering firms that handle Book).
Only Order would remove liquidity or retail order flow an additional choice, Unlike the Post-Only Order, Retail
if posting the order would require an Nasdaq believes that the proposal could Post-Only Orders cannot be designated
adjustment to the price of the order for stimulate competition by attracting as Intermarket Sweep Orders (‘‘ISO’’).
any reason, the order will be cancelled. additional retail customer order flow to The purpose of the Order is to allow
In contrast, a Post-Only Order is the Exchange. firms to utilize their own routing
designed to have its price adjusted as The second key feature of the Retail infrastructure in deciding how to
needed, for example, in order to avoid Post-Only Order is that it will cancel if execute a retail customer order. Retail
locking or crossing a Protected the price of the Order would otherwise Post Only orders will therefore not route
Quotation. With the Retail Post-Only adjust for any reason. Rule 4702(b)(14) and have no routing strategies used in
Order, Nasdaq is providing firms with therefore states that when a new Retail conjunction with the order, and will
another way of managing their retail Post-Only order is received, it will also not support the ISO attribute.
customer order flow. Currently, if a firm attempt to post on the Exchange Book. Unlike the Post-Only Order, the Retail
does not want a retail customer order to A Retail Post-Only order that cannot Post-Only Order will also not utilize the
remove liquidity from the Exchange post to the Nasdaq Book at its limit ‘‘display’’ attribute, since a Retail Post-
upon entry, the firm can select the price without having its price adjusted Only Order may be either displayed or
RTFY routing option, which routes the or removing liquidity will be cancelled.6 non-displayed.
order to destinations in the System The Retail Post-Only Order is based As with Post-Only Orders, Retail Post-
routing table instead of immediately on the Post-Only Order, and will Only Orders will support attribution,
removing liquidity from the Exchange therefore share most of the attributes of which permits a Participant to designate
order book.3 Some firms, however, a Post-Only Order.7 For example, a that the price and size of the Order will
prefer to use their own routing be displayed next to the Participant’s
infrastructure in seeking execution of a methodology. An order from a ‘natural person’ can MPID in market data disseminated by
include orders on behalf of accounts that are held Nasdaq. A Retail Post-Only order may
customer order rather than allowing that in a corporate legal form—such as an Individual
order to remove liquidity from the Retirement Account, Corporation, or a Limited
also participate in the Nasdaq Opening
Exchange upon entry or instructing the Liability Company—that has been established for Cross and/or the Nasdaq Closing Cross.
Exchange to make a routing the benefit of an individual or group of related As with Post-Only Orders, Retail Post
family members, provided that the order is Only Orders will not support pegging
determination. In cancelling the order submitted by an individual. Members must submit
for any reason instead of adjusting its a signed written attestation, in a form prescribed by
(the attribute by which the price of the
price, the Retail Post-Only Order will Nasdaq, that they have implemented policies and Order is automatically set with
therefore provide firms with an procedures that are reasonably designed to ensure
that substantially all orders designated by the (6) routing; (7) discretion; (8) reserve size; (9)
alternative for handing [sic] retail member as ‘Designated Retail Orders’ comply with attribution; (10) Intermarket Sweep Order; (11)
customer orders. these requirements. Orders may be designated on an display; and (12) participation in the Nasdaq
As noted above, the first key feature order-by-order basis, or by designating all orders on Opening Cross or the Nasdaq Closing Cross.
of the Retail Post-Only Order is that it a particular order entry port as Designated Retail 8 Under Rule 4703(a), Participants specify an
Orders.’’ Order’s Time-in-Force by designating a time at
is designed for use by retail customers. 5 As noted above, there are various options a
which the Order will become active and a time at
Accordingly, a Retail Post-Only Order member may currently use to efficiently manage its which the Order will cease to be active. The
must meet the criteria of a Designated order flow, such as utilizing the RTFY routing available times for activating Orders are (1) time of
Retail Order, as defined in Rule 7018, in option or allowing that order to have its price the Order’s receipt by the Nasdaq Market Center; (2)
adjusted and potentially remove liquidity. the Nasdaq Opening Cross (or 9:30 a.m. ET in the
addition to the criteria set forth in Rule 6 An order may have its price adjusted, for
case of a security for which no Nasdaq Opening
4702(b)(14).4 Nasdaq believes that example, to satisfy a regulatory obligation, such as Cross occurs); (3) Market Hours, beginning after the
the prohibition under Regulation NMS against completion of the Nasdaq Opening Cross (or at 9:30
3 See Nasdaq Rule 4738(a)(1)(A)(v)(b); see also locking or crossing a Protected Quotation. See 17 a.m. ET in the case of a security for which no
Securities Exchange Act Release No. 76718 CFR 242.610(d). Another scenario where the price Nasdaq Opening Cross occurs); (4) the Nasdaq
(December 21, 2015), 80 FR 80847 (December 28, of an order may have to be adjusted for purposes
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Closing Cross (or the end of Market Hours in the
2015) (SR–NASDAQ–2015–112). of regulatory compliance is Rule 201 of Regulation case of a security for which no Nasdaq Closing
4 Rule 7018 provides that a Designated Retail SHO, which requires trading centers to establish, Cross occurs); (5) 8:00 a.m. ET, in the case of an
Order is ‘‘an agency or riskless principal order that maintain, and enforce written policies and Order using the SCAN or RTFY routing strategy that
meets the criteria of FINRA Rule 5320.03 and that procedures reasonably designed to prevent the is entered prior to 8:00 a.m. ET; (6) the beginning
originates from a natural person and is submitted execution or display of a short sale order at a price of the Display-Only Period, in the case of a security
to Nasdaq by a member that designates it pursuant at or below the current National Best Bid under that is the subject of a trading halt and for which
to this rule, provided that no change is made to the certain circumstances. See 17 CFR 242.201. trading will resume pursuant to a halt cross; and (7)
terms of the order with respect to price or side of 7 As defined in Rule 4703, the potential attributes the resumption of trading, in the case of a security
market and the order does not originate from a that may apply to an order are (1) time-in-force; (2) that is the subject of a trading halt and for which
trading algorithm or any other computerized size; (3) price; (4) pegging; (5) minimum quantity; trading resumes without a halt cross.
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![Federal Register / Vol. 81, No. 211 / Tuesday, November 1, 2016 / Notices 75865
available publicly. All submissions the Commission shall either approve the amended (‘‘Exchange Act’’), and Rules
should refer to File Number SR– proposed rule change, disapprove the 101 and 102 of Regulation M, in
NASDAQ–2016–141 and should be proposed rule change, or institute connection with secondary market
submitted on or before November 22, proceedings to determine whether the transactions in Shares and the creation
2016 proposed rule change should be or redemption of aggregations of Shares
For the Commission, by the Division of disapproved. The 45th day after of 50,000 shares (‘‘Creation Units’’).
Trading and Markets, pursuant to delegated publication of the notice for these The Trust is registered with the
authority.12 proposed rule changes is October 28, Securities and Exchange Commission
Brent J. Fields, 2016. The Commission is extending this (‘‘Commission’’) under the Investment
Secretary. 45-day time period. Company Act of 1940, as amended
[FR Doc. 2016–26301 Filed 10–31–16; 8:45 am] In order to provide the Commission (‘‘1940 Act’’), as an open-end
BILLING CODE 8011–01–P
with sufficient time to consider the management investment company. The
proposed rule changes, the Commission Fund seeks to track the performance of
finds that it is appropriate to designate an underlying index, the Premise
SECURITIES AND EXCHANGE a longer period within which to take Capital Frontier Advantage Diversified
COMMISSION action on the proposed rule changes. Tactical Index (the ‘‘Underlying
Accordingly, the Commission, pursuant Index’’). The Underlying Index seeks to
[Release No. 34–79165; File Nos. SR–DTC–
to Section 19(b)(2) of the Act,5 provide exposure to major U.S. and non-
2016–007; SR–FICC–2016–005; SR–NSCC–
2016–003] designates December 12, 2016 as the U.S. equity and fixed income asset
date by which the Commission shall classes.
Self-Regulatory Organizations; The either approve, disapprove, or institute The Fund will seek to track the
Depository Trust Company; Fixed proceedings to determine whether to performance of its Underlying Index by
Income Clearing Corporation; National disapprove the proposed rule changes normally investing at least 80% of its
Securities Clearing Corporation; (File Nos. SR–DTC–2016–007; SR– total assets in the ETFs that comprise
Notice of Designation of a Longer FICC–2016–005; SR–NSCC–2016–003). the Underlying Index.1 Except for the
Period for Commission Action on For the Commission, by the Division of fact that the Fund will operate as an
Proposed Rule Changes Relating to Trading and Markets, pursuant to delegated ETF of ETFs, the Fund will operate in
Clearing Agency Investment Policy authority.6 a manner identical to the underlying
Brent J. Fields, ETFs.
October 26, 2016.
Secretary. The Requestors represent, among
On August 25, 2016, The Depository
[FR Doc. 2016–26302 Filed 10–31–16; 8:45 am] other things, the following:
Trust Company (‘‘DTC’’), Fixed Income
Clearing Corporation (‘‘FICC’’), and BILLING CODE 8011–01–P • Shares of the Fund will be issued
National Securities Clearing Corporation by the Trust, an open-end management
(‘‘NSCC’’, and together with DTC and investment company that is registered
FICC, the ‘‘Clearing Agencies’’) filed SECURITIES AND EXCHANGE with the Commission;
with the Securities and Exchange COMMISSION • Creation Units will be continuously
Commission (‘‘Commission’’) proposed redeemable at the net asset value
[Release No. 34–79159; File No. TP 16–14]
rule changes SR–DTC–2016–007, SR– (‘‘NAV’’) next determined after receipt
FICC–2016–005, and SR–NSCC–2016– Order Granting Limited Exemptions of a request for redemption by the Fund,
003 pursuant to Section 19(b)(1) of the From Exchange Act Rule 10b–17 and and the secondary market price of the
Securities Exchange Act of 1934 Rules 101 and 102 of Regulation M to Shares should not vary substantially
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 Premise Capital Frontier Advantage from the NAV of such Shares;
to adopt the Clearing Agency Diversified Tactical ETF Pursuant to • Shares of the Fund will be listed
Investment Policy, which governs the Exchange Act Rule 10b–17(b)(2) and and traded on BATS Exchange, Inc., or
investment of funds of the Clearing Rules 101(d) and 102(e) of Regulation another exchange in accordance with
Agencies. The proposed rule changes M exchange listing standards that are, or
were published for comment in the will become, effective pursuant to
Federal Register on September 13, October 26, 2016. Section 19(b) of the Exchange Act (the
2016.3 To date, the Commission has not By letter dated October 26, 2016 (the ‘‘Listing Exchange’’); 2
received any comments on the proposed ‘‘Letter’’), as supplemented by • All ETFs in which the Fund is
rule changes. conversations with the staff of the invested will meet all conditions set
Section 19(b)(2) of the Act 4 provides Division of Trading and Markets, forth in one or more class relief letters,
that, within 45 days of the publication counsel for ETF Series Solutions (the will have received individual relief from
of notice of the filing of a proposed rule ‘‘Trust’’), on behalf of the Trust, Premise the Commission, will be able to rely
change, or within such longer period up Capital Frontier Advantage Diversified upon individual relief even though they
to 90 days as the Commission may Tactical ETF (the ‘‘Fund’’), any national are not named parties, or will be able to
designate if it finds such longer period securities exchange on or through which
to be appropriate and publishes its shares of the Fund (‘‘Shares’’) are listed 1 The remaining 20% of the Fund’s total assets
reasons for so finding, or as to which the and may subsequently trade, Quasar may be invested in securities (including other
self-regulatory organization consents, underlying funds) not included in the Underlying
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Distributors, LLC (the ‘‘Distributor’’),
Index and in cash, money market instruments, or
and persons engaging in transactions in funds that invest exclusively in money market
12 17 CFR 200.30–3(a)(12). Shares (collectively, the ‘‘Requestors’’), instruments, subject to applicable limitations under
1 15 U.S.C. 78s(b)(1). requested exemptions, or interpretive or the 1940 Act.
2 17 CFR 240.19b–4. 2 Further, Requestors represent in the Letter that
3 See Securities Exchange Act Release No. 78778
no-action relief, from Rule 10b-17 of the
should the Shares also trade on a market pursuant
(September 7, 2016), 81 FR 62963 (September 13, Securities Exchange Act of 1934, as to unlisted trading privileges, such trading will be
2016) (SR–DTC–2016–007; SR–FICC–2016–005; conducted pursuant to self-regulatory organization
SR–NSCC–2016–003). 5 Id.
rules that are, or will become, effective pursuant to
4 15 U.S.C. 78s(b)(2). 6 17 CFR 200.30–3(a)(31). Section 19(b) of the Exchange Act.
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Document Created: 2016-11-01 02:36:43
Document Modified: 2016-11-01 02:36:43
| 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 75862 |
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