81 FR 92932 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4770 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 244 (December 20, 2016)
Federal Register Volume 81, Issue 244 (December 20, 2016)
| Page Range | 92932-92935 | |
| FR Document | 2016-30552 |
[Federal Register Volume 81, Number 244 (Tuesday, December 20, 2016)] [Notices] [Pages 92932-92935] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-30552] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79546; File No. SR-NASDAQ-2016-165] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4770 (Compliance With Regulation NMS Plan To Implement a Tick Size Pilot) December 14, 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 November 30, 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 Nasdaq Rule 4770 to modify the Web site data publication requirements relating to the Regulation NMS Plan to Implement a Tick Size Pilot Program (``Plan'') and to clarify the timing and format of publishing Market Maker registration statistics. 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 92933]] A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose On August 25, 2014, Nasdaq, and several other self-regulatory organizations (the ``Participants'') filed with the Commission, pursuant to Section 11A of the Act \3\ and Rule 608 of Regulation NMS thereunder,\4\ the Plan to Implement a Tick Size Pilot Program.\5\ The Participants filed the Plan to comply with an order issued by the Commission on June 24, 2014.\6\ The Plan was published for comment in the Federal Register on November 7, 2014, and approved by the Commission, as modified, on May 6, 2015.\7\ The Commission approved the Pilot on a two-year basis, with implementation to begin no later than May 6, 2016.\8\ On November 6, 2015, the SEC exempted the Participants from implementing the Pilot until October 3, 2016.\9\ Under the revised Pilot implementation date, the Pre-Pilot data collection period commenced on April 4, 2016. On September 13, 2016, the SEC exempted the Participants from the requirement to fully implement the Pilot on October 3, 2016, to permit the Participants to implement the pilot on a phased-in basis, as described in the Participants' exemptive request.\10\ --------------------------------------------------------------------------- \3\ 15 U.S.C. 78k-1. \4\ 17 CFR 242.608. \5\ See Letter from Brendon J. Weiss, Vice President, Intercontinental Exchange, Inc., to Secretary, Commission, dated August 25, 2014. \6\ See Securities Exchange Act Release No 72460 (June 24, 2014), 79 FR 36840 (June 30, 2014). \7\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 80 FR 27513 (May 13, 2015) (``Approval Order''). \8\ See Approval Order at 27533 and 27545. \9\ See Securities Exchange Act Release No. 76382 (November 6, 2015), 80 FR 70284 (November 13, 2015). \10\ See Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Eric Swanson, EVP, General Counsel and Secretary, Bats Global Markets, Inc., dated September 13, 2016; see also Letter from Eric Swanson, EVP, General Counsel and Secretary, Bats Global Markets, Inc., to Brent J. Fields, Secretary, Commission, dated September 9, 2016. --------------------------------------------------------------------------- The Plan is designed to allow the Commission, market participants, and the public to study and assess the impact of increment conventions on the liquidity and trading of the common stock of small- capitalization companies. Each Participant is required to comply, and to enforce compliance by its member organizations, as applicable, with the provisions of the Plan. Nasdaq adopted rule amendments to implement the requirements of the Plan, including relating to the Plan's data collection requirements and requirements relating to Web site data publication.\11\ Specifically, with respect to the Web site data publication requirements pursuant to Section VII and Appendices B and C to the Plan, Nasdaq Rule 4770(b)(2)(B) provides, among other things, that Nasdaq shall make the data required by Items I and II of Appendix B to the Plan, and collected pursuant to paragraph (b)(2) of Rule 4770, publicly available on the Nasdaq Web site on a monthly basis at no charge and shall not identify the Trading Center that generated the data. Nasdaq Rule 4770(b)(3)(C), provides, among other things, that Nasdaq shall make the data required by Item IV of Appendix B to the Plan, and collected pursuant to paragraph (b)(3) of Rule 4770, publicly available on the Nasdaq Web site on a monthly basis at no charge and shall not identify the Trading Center that generated the data. Commentary .08 to Rule 4770 provides, among other things, that the requirement that Nasdaq make certain data publicly available on the Nasdaq Web site pursuant to Appendix B and C to the Plan shall commence at the beginning of the Pilot Period. --------------------------------------------------------------------------- \11\ See, e.g., Securities Exchange Act Release No. 77456 (March 28, 2016), 81 FR 18925 (April 1, 2016) (SR-NASDAQ-2016-043); see also Letter from David S. Shillman, Associate Director, Division of Trading and Markets, Commission, to Marcia E. Asquith, Senior Vice President and Corporate Secretary, FINRA, dated February 17, 2016. --------------------------------------------------------------------------- Nasdaq is proposing amendments to Rule 4770(b)(2)(B) (regarding Appendix B.I and B.II data) and Rule 4770(b)(3)(C) (regarding Appendix B.IV data) to provide that data required to be made available on Nasdaq's Web site be published within 120 calendar days following month end. In addition, the proposed amendments to Commentary .08 to Rule 4770 would provide that, notwithstanding the provisions of paragraphs (b)(2)(B), (b)(3)(C) and (b)(5), Nasdaq shall make data for the Pre- Pilot period publicly available on the Nasdaq Web site pursuant to Appendix B and C to the Plan by February 28, 2017.\12\ --------------------------------------------------------------------------- \12\ With respect to data for the Pilot Period, the requirement that Nasdaq make data publicly available on the Nasdaq Web site pursuant to Appendix B and C to the Plan shall continue to commence at the beginning of the Pilot Period. Thus, the first Web site publication date for Pilot Period data (covering October 2016) would be published on the Nasdaq Web site by February 28, 2017, which is 120 days following the end of October 2016. --------------------------------------------------------------------------- The purpose of delaying the publication of the Web site data is to address confidentiality concerns by providing for the passage of additional time between the market information reflected in the data and the public availability of such information. Nasdaq also proposes to amend Rule 4770(b)(5), which relates to the collection and transmission of Market Maker registration statistics. Currently, Rule 4770(b)(5) provides that the Exchange shall collect and transmit to the SEC the data described in Item III of Appendix B of the Plan relating to daily Market Maker registration statistics in a pipe delimited format within 30 calendar days following month end for (1) transactions in each Pre-Pilot Data Collection Security for the period beginning six months prior to the Pilot Period through the trading day immediately preceding the Pilot Period; and (2) transactions in each Pilot Security for the period beginning on the first day of the Pilot Period through six months after the end of the Pilot Period. Although the Plan requires that such data be made publicly available,\13\ Rule 4770(b)(5) does not currently include a provision requiring the Exchange to publish such data to its Web site. The Exchange therefore proposes to amend Rule 4770(b)(5) to provide that the Exchange shall make Market Maker registration data publicly available on the Exchange Web site within 120 calendar days following month end at no charge. --------------------------------------------------------------------------- \13\ See Section VII.A. 4 of the Plan. --------------------------------------------------------------------------- Nasdaq has filed the proposed rule change for immediate effectiveness and has requested that the Commission waive the 30-day operative delay. If the Commission waives the 30-day operative delay, the operative date of the proposed rule change will be the date of filing. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\14\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\15\ 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, because it is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan and is in furtherance of the objectives of the Plan, as identified by the SEC. --------------------------------------------------------------------------- \14\ 15 U.S.C. 78f(b). \15\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- In approving the Plan, the Commission recognized that requiring the publication of Market Maker data may raise confidentiality concerns, especially for Pilot Securities that may [[Page 92934]] have a relatively small number of designated Market Makers.\16\ For this reason, the Commission modified the Plan so that the data that would be made publicly available would not contain profitability measures for each security, but would be aggregated by the Control Group and each Test Group. Nasdaq believes that this proposal is consistent with the Act in that it is designed to address confidentiality concerns by permitting Nasdaq to delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information. With respect to the change to Rule 4770(b)(5), Nasdaq believes this change will clarify the timing and format of publishing Market Maker registration statistics. --------------------------------------------------------------------------- \16\ See Approval Order at 27543-27544. --------------------------------------------------------------------------- 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. Nasdaq notes that the proposed rule change implements the provisions of the Plan, and is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan. The proposal is intended to address confidentiality concerns that may adversely impact competition, especially for Pilot Securities that may have a relatively small number of designated Market Makers, by permitting Nasdaq to delay Web site publication to provide for passage of additional time between the market information reflected in the data and the public availability of such information. The proposal also does not alter the information required to be submitted to the SEC. 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.\17\ --------------------------------------------------------------------------- \17\ Nasdaq notes that Financial Information Forum (FIF) submitted a letter to the staff of the Commission raising concerns regarding the publication of certain Appendix B statistics on a disaggregated basis using a unique masked market participant identifier. See Letter from Mary Lou Von Kaenel, Managing Director, FIF, to David S. Shillman, Associate Director, Division of Trading and Markets, Commission, dated August 16, 2016, available at https:/ /www.fif.com/comment-letters. --------------------------------------------------------------------------- III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act \18\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\19\ --------------------------------------------------------------------------- \18\ 15 U.S.C. 78s(b)(3)(A)(iii). \19\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. In this filing, the Exchange has asked that the Commission waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing. --------------------------------------------------------------------------- \20\ Id. \21\ 17 CFR 240.19b-4(f)(6)(iii). --------------------------------------------------------------------------- The Exchange notes that the proposed rule change implements the provisions of the Plan, and is designed to assist the Participants in meeting their regulatory obligations pursuant to the Plan. The proposal is intended to address confidentiality concerns by permitting the Exchange to delay Web site publication to provide for passage of additional time between the market information reflected in the data and public availability of such information. The proposal does not alter the information required to be submitted to the Commission. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it will allow the Exchange to implement these proposed changes that are intended to address confidentiality concerns. The Commission notes that some Pilot data was scheduled to be published on November 30, 2016. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposed rule change to be operative on November 30, 2016.\22\ --------------------------------------------------------------------------- \22\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic 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-2016-165 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-2016-165. 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 [[Page 92935]] should refer to File Number SR-NASDAQ-2016-165 and should be submitted on or before January 10, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\23\ --------------------------------------------------------------------------- \23\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-30552 Filed 12-19-16; 8:45 am] BILLING CODE 8011-01-P
![92932 Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Notices
comply with the firm quote obligations that protects investors and the public SECURITIES AND EXCHANGE
in Rule 602 of Regulation NMS. interest. The Commission notes that the COMMISSION
C2 will require TPHs and Market- Exchange represented in its proposal
Makers to utilize these risk protection that the kill switch will operate [Release No. 34–79546; File No. SR–
parameters and mechanisms. However, consistently with a broker-dealer’s firm NASDAQ–2016–165]
TPHs and Market-Makers will have quote obligations pursuant to Rule 602
discretion to customize the parameters of Regulation NMS,46 and that the kill Self-Regulatory Organizations; The
in accordance with their respective risk switch does not diminish or relieve a NASDAQ Stock Market LLC; Notice of
management needs. In light of this Filing and Immediate Effectiveness of
Market-Maker of its obligation to
flexibility, the Commission reminds Proposed Rule Change To Amend Rule
provide continuous two-sided quotes.47
TPHs to be mindful of their obligations, 4770 (Compliance With Regulation
to among others, seek best execution of The Exchange also represented that the
kill switch message will be accepted by NMS Plan To Implement a Tick Size
orders they handle on an agency basis Pilot)
and consider their best execution the System in the order of receipt in the
obligations when establishing queue and will be processed in such December 14, 2016.
parameters for the order entry, order. As such, the System will process Pursuant to Section 19(b)(1) of the
execution, price parameter rate checks, interest already in the System prior to Securities Exchange Act of 1934
maximum contract size risk control, and receipt of the kill switch message prior (‘‘Act’’),1 and Rule 19b–4 thereunder,2
QRM.45 For example, an abnormally to processing the kill switch message.48 notice is hereby given that on November
low order entry parameter should be Based on these representations, the 30, 2016, The NASDAQ Stock Market
carefully scrutinized, particularly if a Commission believes that the kill switch LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
TPH’s order flow to the Exchange is reasonably designed to promote just with the Securities and Exchange
contains agency orders. To the extent and equitable principles of trade and Commission (‘‘SEC’’ or ‘‘Commission’’)
that a TPH chooses sensitive parameters perfect the mechanism of a free and the proposed rule change as described
and those parameters apply to open market. Lastly, the Commission in Items I, and II below, which Items
connections over which it transmits notes that in addition to the CBOE filing have been prepared by the Exchange.
customer orders to the Exchange, a TPH mentioned above, other exchanges have The Commission is publishing this
should consider the effect of its chosen established kill switches that operate in notice to solicit comments on the
settings on its ability to receive a timely a manner similar to that proposed by proposed rule change from interested
execution on marketable agency orders persons.
C2.49
that it sends to the Exchange in various
market conditions. The Commission Finally, the Commission believes that I. Self-Regulatory Organization’s
cautions brokers considering their best the proposal to authorize C2 to share Statement of the Terms of Substance of
execution obligations to be aware that with Clearing TPHs the risk mitigation the Proposed Rule Change
an agency order they represent may be settings selected by a TPH for whom the The Exchange proposes to amend
rejected as a result of these risk Clearing TPH clears may assist Clearing Nasdaq Rule 4770 to modify the Web
protections. TPHs manage their clearing risk site data publication requirements
In addition, in light of the Exchange’s exposure. In addition to the CBOE filing relating to the Regulation NMS Plan to
decision not to set maximum or mentioned above, the Commission notes Implement a Tick Size Pilot Program
minimum values, or default values, the that other exchanges have adopted (‘‘Plan’’) and to clarify the timing and
Commission expects C2 to periodically similar rules authorizing the sharing of format of publishing Market Maker
assess whether these risk protection similar risk settings with clearing registration statistics.
measures are operating in a manner that members.50
is consistent with the promotion of fair The text of the proposed rule change
and orderly markets, including whether IV. Conclusion is available on the Exchange’s Web site
not utilizing maximum and minimum at http://nasdaq.cchwallstreet.com, at
parameters or default values continues It Is therefore ordered, pursuant to the principal office of the Exchange, and
to be appropriate and in accordance Section 19(b)(2) of the Act,51 that the at the Commission’s Public Reference
with the Act and the rules thereunder. proposed rule change (SR–C2–2016– Room.
Further, the Commission believes that 020), be, and hereby is, approved. II. Self-Regulatory Organization’s
Proposed Rule 6.17(i), which creates an For the Commission, by the Division of Statement of the Purpose of, and
optional kill switch mechanism, is Trading and Markets, pursuant to delegated Statutory Basis for, the Proposed Rule
consistent with the Act as it may further authority.52 Change
enhance risk management capabilities of
Robert W. Errett, In its filing with the Commission, the
TPHs by providing them with the ability
to manage their risk exposure if they Deputy Secretary. Exchange included statements
experience a significant system failure. [FR Doc. 2016–30560 Filed 12–19–16; 8:45 am] concerning the purpose of and basis for
To the extent that the kill switch BILLING CODE 8011–01–P the proposed rule change and discussed
mechanism provides TPHs with an any comments it received on the
appropriate backstop in this manner, it 46 See
proposed rule change. The text of these
Notice, supra note 3, at 76681.
may encourage firms to provide 47 See
statements may be examined at the
id.
liquidity on C2 and thus contribute to places specified in Item IV below. The
mstockstill on DSK3G9T082PROD with NOTICES
48 See id.
fair and orderly markets in a manner 49 See, e.g., BOX Rule 7280(b) and PHLX Rule
Exchange has prepared summaries, set
1019(b). forth in sections A, B, and C below, of
45 See, e.g., Securities Exchange Act Release Nos.
50 See, e.g., MIAX Rule 500; BX Chapter VI, the most significant aspects of such
37619A (September 6, 1996), 61 FR 48290 statements.
Section 20; NYSE Arca Rule 6.2A(a); NYSE MKT
(September 12, 1996) (Order Handling Rules
Rule 902.1NY(a); and PHLX Rule 1016.
adopting release); 51808 (June 9, 2005), 70 FR
51 See id. 1 15
37496, 37537–8 (June 29, 2005) (Regulation NMS U.S.C. 78s(b)(1).
adopting release). 52 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.
VerDate Sep<11>2014 19:36 Dec 19, 2016 Jkt 241001 PO 00000 Frm 00163 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1](https://thefederalregister.org/doc/81_FR_93176/page/1.svg)
![Federal Register / Vol. 81, No. 244 / Tuesday, December 20, 2016 / Notices 92935
should refer to File Number SR– at the Commission’s Public Reference The proposed fee change is reasonable
NASDAQ–2016–165 and should be Room. and necessary because of the increase in
submitted on or before January 10, 2017. the value of ITTO and BONO to
II. Self-Regulatory Organization’s
For the Commission, by the Division of customers resulting from the growth in
Statement of the Purpose of, and
Trading and Markets, pursuant to delegated NOM listings and recent infrastructure
Statutory Basis for, the Proposed Rule
authority.23 upgrades. NOM listings have increased
Change
Robert W. Errett, from 663 in June of 2011 to over 2,800
Deputy Secretary.
In its filing with the Commission, the today—over a 300 percent increase—
Exchange included statements while NOM’s market share has jumped
[FR Doc. 2016–30552 Filed 12–19–16; 8:45 am]
concerning the purpose of and basis for more than 250 percent between July of
BILLING CODE 8011–01–P
the proposed rule change and discussed 2011 and November of 2016, according
any comments it received on the to data from the Options Clearing
proposed rule change. The text of these Corporation. In addition, in August of
SECURITIES AND EXCHANGE
statements may be examined at the 2016, NOM commenced a market-wide
COMMISSION
places specified in Item IV below. The technology refresh for several options
[Release No. 34–79556; File No. SR– Exchange has prepared summaries, set systems, including ITTO and BONO, to
NASDAQ–2016–167] forth in sections A, B, and C below, of provide a more efficient and robust
the most significant aspects of such infrastructure for options trading. The
Self-Regulatory Organizations; The statements.
NASDAQ Stock Market LLC; Notice of increase in the value of ITTO and BONO
Filing and Immediate Effectiveness of A. Self-Regulatory Organization’s to customers generated by the growth in
Proposed Rule Change To Modify Statement of the Purpose of, and NOM and infrastructure investments,
Distributor Fees for ITTO and BONO Statutory Basis for, the Proposed Rule together with Nasdaq’s reasonable
Change objective to recoup costs associated with
Data Feeds
the growth of NOM and infrastructure
December 14, 2016. 1. Purpose investments, justify the proposed price
Pursuant to Section 19(b)(1) of the The purpose of the proposed rule increase.
Securities Exchange Act of 1934 change is to separate the distributor fees The impact of the proposed change on
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 for the ITTO and BONO data feeds, firms that use BONO and ITTO will be
notice is hereby given that, on December which are now charged together as a minimal. Because BONO data is a subset
2, 2016, The NASDAQ Stock Market single fee, into two separate fees. of ITTO, most firms buy either ITTO or
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed ITTO and BONO are proprietary data BONO, but not both. To the extent that
with the Securities and Exchange feeds designed to facilitate trading in firms use both BONO and ITTO, the
Commission (‘‘SEC’’ or ‘‘Commission’’) options markets. ITTO provides in- higher fee is reasonable in light of the
the proposed rule change as described depth quote and order information, last higher demands placed on Nasdaq’s
in Items I, II, and III below, which Items sale information, and Net Order infrastructure by those firms.
have been prepared by the Exchange. Imbalance (‘‘NOI’’) data for NOM. The proposed changes do not affect
The Commission is publishing this BONO provides top-of-market data for the enterprise license fee for BONO and
notice to solicit comments on the NOM, including best bid and offer and ITTO. The Nasdaq Options Rules,
proposed rule change from interested last sale information. The information Chapter XV, Section 4(a), currently
persons. provided in BONO can be derived from present the Monthly Enterprise License
ITTO. Customers typically purchase (Non-Display) Fee of $10,000 in the
I. Self-Regulatory Organization’s either ITTO or BONO, but not both. same chart that sets forth the distributor
Statement of the Terms of Substance of Nasdaq currently charges a monthly fees for ITTO and BONO. To avoid
the Proposed Rule Change distributor fee of $1,500 for the internal implying that the enterprise license fee
The Exchange proposes to amend distribution of either ITTO or BONO or for ITTO and BONO will be separated
Chapter XV of the Options Rules for the both, and a monthly external distributor as well, the Exchange proposes taking
Nasdaq Stock Market, entitled ‘‘Options fee of $2,000 for the external the enterprise license fee out of that
Pricing,’’ at Section 4, which governs distribution of either or both feeds. chart, and placing it in a separate
Nasdaq Options Market (‘‘NOM’’) data Nasdaq also offers an enterprise license paragraph under Section 4(a).
distributor fees. Specifically, the for BONO and ITTO for a monthly fee The new paragraph will not change
Exchange proposes to separate the of $10,000. current fees: the $10,000 per month
distributor fees for the ITCH 3 to Trade enterprise license fee will permit the
Proposed Changes
Options (‘‘ITTO’’) and Best of Nasdaq distribution of BONO and ITTO as
Options (‘‘BONO’’) data feeds, which The Exchange proposes to separate provided in Section 4(c), and the fee
are now charged as a single fee, into two the internal and external distributor fees will be in addition to the monthly
separate fees, and conforming language for ITTO and BONO. After the proposed distributor fees set forth in Section 4(a).
to clarify that there will be no change to changes take effect, a firm that This is consistent with the current rule
the Monthly Non-Display Enterprise distributes either ITTO or BONO, but and practice.
License for ITTO and BONO. The not both, will be charged the current fee. The ITTO and BONO internal and
proposal is described further below. A firm that elects to distribute both external distributor fees are entirely
The text of the proposed rule change ITTO and BONO, however, will be optional in that they apply only to firms
charged a fee for the distribution of
mstockstill on DSK3G9T082PROD with NOTICES
is available on the Exchange’s Web site that opt to distribute ITTO and BONO.
at http://nasdaq.cchwallstreet.com, at ITTO and a separate fee for the The proposed changes do not impact or
the principal office of the Exchange, and distribution of BONO. The proposal will raise the cost of any other Nasdaq
not affect the other fees associated with product.
23 17 CFR 200.30–3(a)(12). ITTO and BONO: the monthly external
1 15 and internal per user fees and the 2. Statutory Basis
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4. monthly enterprise license fee will The Exchange believes that its
3 ITCH is a direct data feed interface for NOM. remain the same. proposal is consistent with Section 6(b)
VerDate Sep<11>2014 19:36 Dec 19, 2016 Jkt 241001 PO 00000 Frm 00166 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1](https://thefederalregister.org/doc/81_FR_93176/page/4.svg)
Document Created: 2018-02-14 09:09:31
Document Modified: 2018-02-14 09:09:31
| 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 92932 |
2025 Federal Register | Disclaimer | Privacy Policy
USC | CFR | eCFR