82 FR 11389 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Implementation Date of Its Functionality Relating to Post-Only Orders and Orders With Midpoint Pegging, and Its Trade-Now Functionality
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 82, Issue 34 (February 22, 2017)
Federal Register Volume 82, Issue 34 (February 22, 2017)
| Page Range | 11389-11391 | |
| FR Document | 2017-03400 |
[Federal Register Volume 82, Number 34 (Wednesday, February 22, 2017)] [Notices] [Pages 11389-11391] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2017-03400] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-80045; File No. SR-NASDAQ-2017-013] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Implementation Date of Its Functionality Relating to Post- Only Orders and Orders With Midpoint Pegging, and Its Trade-Now Functionality February 15, 2017. 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 February 3, 2017, 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 extend the implementation date of its functionality relating to Post-Only Orders and Orders with Midpoint Pegging, and its Trade-Now functionality. There is no rule text for this proposed rule change. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set [[Page 11390]] 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 Nasdaq is filing this proposal to extend the implementation date of its functionality relating to Post-Only Orders and Orders with Midpoint Pegging, and its Trade-Now functionality. The functionality relating to Post-Only Orders and Orders with Midpoint Pegging was approved by the SEC on November 10, 2016,\3\ and the Trade-Now functionality was submitted on an immediately effective basis on November 8, 2016.\4\ --------------------------------------------------------------------------- \3\ See Securities Exchange Act Release No. 79290 (November 10, 2016), 81 FR 81184 (November 17, 2016) (SR-NASDAQ-2016-111) (``Post- Only Approval Order''). \4\ See Securities Exchange Act Release No. 79282 (November 10, 2016), 81 FR 81219 (November 17, 2016) (SR-NASDAQ-2016-156). --------------------------------------------------------------------------- Under the new Post-Only functionality, the behavior of Post-Only orders would be altered when the adjusted price of such orders lock or cross a non-displayed price on the Exchange's Book. Specifically, if the adjusted price of the Post-Only Order would lock or cross a non- displayed price on the Exchange's Book, the Post-Only order would be posted in the same manner as a Price to Comply Order. However, the Post-Only Order would execute if (i) it is priced below $1.00 and the value of price improvement associated with executing against an Order on the Nasdaq Book (as measured against the original limit price of the Order) equals or exceeds the sum of fees charged for such execution and the value of any rebate that would be provided if the Order posted to the Nasdaq Book and subsequently provided liquidity, or (ii) it is priced at $1.00 or more and the value of price improvement associated with executing against an Order on the Nasdaq Book (as measured against the original limit price of the Order) equals or exceeds $0.01 per share.\5\ --------------------------------------------------------------------------- \5\ See Post-Only Approval Order, supra note 3. --------------------------------------------------------------------------- Additionally, if the Post-Only Order would not lock or cross a Protected Quotation but would lock or cross a Non-Displayed Order on the Exchange's Book, the Post-Only Order would be posted, ranked, and displayed at its limit price. The Post-Only Order would execute if (i) it is priced below $1.00 and the value of price improvement associated with executing against an Order on the Nasdaq Book equals or exceeds the sum of fees charged for such execution and the value of any rebate that would be provided if the Order posted to the Nasdaq Book and subsequently provided liquidity, or (ii) it is priced at $1.00 or more and the value of price improvement associated with executing against an Order on the Nasdaq Book equals or exceeds $0.01 per share.\6\ --------------------------------------------------------------------------- \6\ Id. --------------------------------------------------------------------------- Nasdaq also proposed to change its Midpoint Peg Post-Only Order, so that, if the NBBO is crossed, any existing Midpoint Peg Post-Only Order would be cancelled and any new Midpoint Peg Post-Only Order would be rejected. Similarly, if the Inside Bid and Inside Offer are crossed, any existing Order with Midpoint Pegging would be rejected and any new Order with Midpoint Pegging would be cancelled.\7\ --------------------------------------------------------------------------- \7\ Id. --------------------------------------------------------------------------- Under Nasdaq's Trade-Now functionality, participants could enter an instruction to have a locked resting buy (sell) order execute against the locking sell (buy) order. Nasdaq proposed to offer the functionality on its OUCH, RASH, FLITE and FIX protocols. Depending on the protocol used by the participant to access the Nasdaq system, the participant could either specify that the order execute against locking interest automatically, or the participant would be required to send a Trade Now instruction to the Exchange once the order has become locked. Nasdaq proposed to offer the Trade Now instruction for all orders that may be sent to the continuous Nasdaq book, and did not offer the instruction for orders that do not execute on the continuous book.\8\ --------------------------------------------------------------------------- \8\ See Securities Exchange Act Release No. 79282 (November 10, 2016), 81 FR 81219 (November 17, 2016) (SR-NASDAQ-2016-156). --------------------------------------------------------------------------- Nasdaq initially proposed to implement the new Post-Only, Midpoint Pegging and Trade-Now functionality on November 21, 2016.\9\ However, following testing, Nasdaq has decided to delay the implementation of these new functionalities to provide additional time for systems testing. The new functionality shall be implemented no later than March 31, 2017. Nasdaq will announce the new implementation date by an Equity Trader Alert, which shall be issued prior to the implementation date. --------------------------------------------------------------------------- \9\ See Equity Trader Alert #2016-291. --------------------------------------------------------------------------- 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 purpose of this proposal is to inform the SEC and market participants of the new implementation date for the Post-Only, Midpoint Pegging, and Trade Now functionalities. The functionalities themselves were previously proposed in rule filings that were submitted to the SEC, and this proposal does not change the substance of those functionalities.\12\ Nasdaq is delaying the implementation date of these functionalities to provide for further systems testing prior to implementing these functionalities. --------------------------------------------------------------------------- \10\ 15 U.S.C. 78f(b). \11\ 15 U.S.C. 78f(b)(5). \12\ Nasdaq notes that the Trade-Now functionality was submitted to the SEC as an immediately effective filing, while the Post-Only and Midpoint Pegging functionalities were the subject of an SEC approval order. See supra notes 3 and 4. --------------------------------------------------------------------------- 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. As noted above, the purpose of this proposal is to extend the implementation date for Post-Only, Midpoint Pegging and Trade-Now functionalities so that Nasdaq may perform additional systems testing prior to implementing these functionalities. 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 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) of the Act \13\ and Rule 19b- 4(f)(6) thereunder.\14\ --------------------------------------------------------------------------- \13\ 15 U.S.C. 78s(b)(3)(A). \14\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- [[Page 11391]] 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-2017-013 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-2017-013. 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-2017-013 and should be submitted on or before March 15, 2017. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\15\ --------------------------------------------------------------------------- \15\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2017-03400 Filed 2-21-17; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 82, No. 34 / Wednesday, February 22, 2017 / Notices 11389
special advantages to market makers. Interested persons are invited to For the Commission, by the Division of
Although an exchange may reward such submit written data, views and Trading and Markets, pursuant to delegated
participants for the benefits they arguments regarding whether the authority.18
provide to the exchange’s market, such proposal should be disapproved by Eduardo A. Aleman,
rewards must not be disproportionate to March 15, 2017. Any person who Assistant Secretary.
the services provided.’’ 13 In 2015, when wishes to file a rebuttal to any other [FR Doc. 2017–03399 Filed 2–21–17; 8:45 am]
the Commission approved the NYSE’s person’s submission must file that BILLING CODE 8011–01–P
proposal to make the New Market rebuttal by March 29, 2017.
Model permanent,14 the Commission Comments may be submitted by any
noted the Rule 104(g)(i)(A)(III) of the following methods: SECURITIES AND EXCHANGE
Prohibition,15 among many aspects of COMMISSION
the New Market Model, and reiterated Electronic Comments
[Release No. 34–80045; File No. SR–
that the pilot program had been • Use the Commission’s Internet NASDAQ–2017–013]
conducted, among other reasons, to seek comment form (http://www.sec.gov/
‘‘further evidence that the benefits rules/sro.shtml); or Self-Regulatory Organizations; The
proposed for DMMs are not
• Send an email to rule-comments@ NASDAQ Stock Market LLC; Notice of
disproportionate to their obligations.’’ 16 Filing and Immediate Effectiveness of
Under the proposal, the Exchange sec.gov. Please include File Number SR–
NYSE–2016–71 on the subject line. Proposed Rule Change To Extend the
seeks to eliminate the Rule Implementation Date of Its
104(g)(i)(A)(III) Prohibition—an Paper Comments Functionality Relating to Post-Only
obligation imposed on DMMs—thereby Orders and Orders With Midpoint
altering the existing set of obligations • Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities Pegging, and Its Trade-Now
and benefits of DMM status. Functionality
Accordingly, the Commission seeks and Exchange Commission, 100 F Street
public comment on whether the NE., Washington, DC 20549–1090. February 15, 2017.
Exchange’s proposal would maintain an All submissions should refer to File Pursuant to Section 19(b)(1) of the
appropriate balance between the Numbers SR–NYSE–2016–71. The file Securities Exchange Act of 1934
benefits and obligations of being a DMM number should be included on the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
on the Exchange and whether the subject line if email is used. To help the notice is hereby given that on February
obligations of DMMs under remaining Commission process and review your 3, 2017, The NASDAQ Stock Market
Exchange rules are reasonably designed comments more efficiently, please use LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
to prevent DMMs from inappropriately only one method. The Commission will with the Securities and Exchange
influencing or manipulating the close in post all comments on the Commission’s Commission (‘‘SEC’’ or ‘‘Commission’’)
light of DMMs’ special responsibility for Internet Web site (http://www.sec.gov/ the proposed rule change as described
closing auctions under Exchange rules. rules/sro.shtml). Copies of the in Items I and II below, which Items
IV. Solicitation of Comments submission, all subsequent have been prepared by the Exchange.
amendments, all written statements The Commission is publishing this
The Commission requests that with respect to the proposal that are notice to solicit comments on the
interested persons provide written filed with the Commission, and all proposed rule change from interested
submissions of their views, data and written communications relating to the persons.
arguments with respect to the concerns proposal between the Commission and
identified above, as well as any others I. Self-Regulatory Organization’s
any person, other than those that may be
they may have with the proposal. In Statement of the Terms of Substance of
withheld from the public in accordance
particular, the Commission invites the the Proposed Rule Change
with the provisions of 5 U.S.C. 552, will
written views of interested persons be available for Web site viewing and The Exchange proposes to extend the
concerning whether the proposal is printing in the Commission’s Public implementation date of its functionality
inconsistent with Section 6(b)(5) or any Reference Room, 100 F Street NE., relating to Post-Only Orders and Orders
other provision of the Act, or the rules Washington, DC 20549, on official with Midpoint Pegging, and its Trade-
and regulation thereunder. Although business days between the hours of Now functionality.
there do not appear to be any issues 10:00 a.m. and 3:00 p.m. Copies of such There is no rule text for this proposed
relevant to approval or disapproval filings also will be available for rule change.
which would be facilitated by an oral inspection and copying at the principal
presentation of views, data, and II. Self-Regulatory Organization’s
office of the Exchanges. All comments Statement of the Purpose of, and
arguments, the Commission will received will be posted without change;
consider, pursuant to Rule 19b–4, any Statutory Basis for, the Proposed Rule
the Commission does not edit personal Change
request for an opportunity to make an identifying information from
oral presentation.17 submissions. You should submit only In its filing with the Commission, the
information that you wish to make Exchange included statements
13 See id. at 64388.
available publicly. All submissions concerning the purpose of and basis for
14 See Securities Exchange Act Release No. 75578
(Jul. 31, 2015), 80 FR 47008 (Aug.6, 2015) (SR– should refer to File Number SR–NYSE– the proposed rule change and discussed
NYSE–2015–26) (‘‘NMM Approval Order’’). 2016–71 and should be submitted on or any comments it received on the
sradovich on DSK3GMQ082PROD with NOTICES
15 See NMM Approval Order, 80 FR at 47010.
before March 15, 2017. Rebuttal proposed rule change. The text of these
16 See id. at 47013.
comments should be submitted by statements may be examined at the
17 Section 19(b)(2) of the Act, as amended by the
March 29, 2017. places specified in Item IV below. The
Securities Act Amendments of 1975, Public Law Exchange has prepared summaries, set
94–29 (June 4, 1975), grants the Commission
flexibility to determine what type of proceeding— organization. See Securities Act Amendments of
18 17 CFR 200.30–3(a)(57).
either oral or notice and opportunity for written 1975, Senate Comm. on Banking, Housing & Urban
1 15 U.S.C. 78s(b)(1).
comments—is appropriate for consideration of a Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30
particular proposal by a self-regulatory (1975). 2 17 CFR 240.19b–4.
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![Federal Register / Vol. 82, No. 34 / Wednesday, February 22, 2017 / Notices 11391
At any time within 60 days of the received will be posted without change; aides the Commission in determining
filing of the proposed rule change, the the Commission does not edit personal whether such changes are consistent
Commission summarily may identifying information from with the purposes of Section 17A of the
temporarily suspend such rule change if submissions. You should submit only Exchange Act. Also, the Commission
it appears to the Commission that such information that you wish to make uses the information to determine
action is: (i) Necessary or appropriate in available publicly. All submissions whether a clearing agency has changed
the public interest; (ii) for the protection should refer to File Number SR– its rules without reporting the actual or
of investors; or (iii) otherwise in NASDAQ–2017–013 and should be prospective change to the Commission
furtherance of the purposes of the Act. submitted on or before March 15, 2017. as required under Section 19(b) of the
If the Commission takes such action, the For the Commission, by the Division of Exchange Act.
Commission shall institute proceedings Trading and Markets, pursuant to delegated The respondents to Rule 17a–22 are
to determine whether the proposed rule authority.15 registered clearing agencies. The
should be approved or disapproved. Eduardo A. Aleman, frequency of filings made by clearing
IV. Solicitation of Comments Assistant Secretary. agencies pursuant to Rule 17a–22 varies
[FR Doc. 2017–03400 Filed 2–21–17; 8:45 am] but on average there are approximately
Interested persons are invited to
BILLING CODE 8011–01–P 200 filings per year per active clearing
submit written data, views, and
agency. There are seven active
arguments concerning the foregoing,
registered clearing agencies. The
including whether the proposed rule SECURITIES AND EXCHANGE Commission staff estimates that each
change is consistent with the Act. COMMISSION response requires approximately .25
Comments may be submitted by any of
hours (fifteen minutes), which
the following methods: Proposed Collection; Comment represents the time it takes for a staff
Electronic Comments Request person at the clearing agency to
• Use the Commission’s Internet Upon Written Request, Copies Available properly identify a document subject to
comment form (http://www.sec.gov/ From: Securities and Exchange the rule, print and makes copies, and
rules/sro.shtml); or Commission, Office of FOIA Services, mail that document to the Commission.
• Send an email to rule-comments@ 100 F Street NE., Washington, DC Thus, the total annual burden for all
sec.gov. Please include File Number SR– 20549–2736. active clearing agencies is 350 hours (7
NASDAQ–2017–013 on the subject line. Extension: clearing agencies multiplied by 200
Rule 17a–22; SEC File No. 270–202, OMB filings per clearing agency multiplied by
Paper Comments Control No. 3235–0196. .25 hours) and a total of 50 hours (1400
• Send paper comments in triplicate Notice is hereby given that pursuant responses multiplied by .25 hours,
to Brent J. Fields, Secretary, Securities to the Paperwork Reduction Act of 1995 divided by 7 active clearing agencies)
and Exchange Commission, 100 F Street (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the per year are expended by each
NE., Washington, DC 20549–1090. Securities and Exchange Commission respondent to comply with the rule.
All submissions should refer to File (‘‘Commission’’) is soliciting comments Written comments are invited on: (a)
Number SR–NASDAQ–2017–013. This on the collection of information Whether the proposed collection of
file number should be included on the provided for in Rule 17a–22 (17 CFR information is necessary for the proper
subject line if email is used. To help the 240.17a–22) under the Securities performance of the functions of the
Commission process and review your Exchange Act of 1934 (‘‘Exchange Act’’) Commission, including whether the
comments more efficiently, please use (15 U.S.C. 78a et seq.). The Commission information shall have practical utility;
only one method. The Commission will plans to submit this existing collection (b) the accuracy of the Commission’s
post all comments on the Commission’s of information to the Office of estimates of the burden of the proposed
Internet Web site (http://www.sec.gov/ Management and Budget (‘‘OMB’’) for collection of information; (c) ways to
rules/sro.shtml). Copies of the extension and approval. enhance the quality, utility, and clarity
submission, all subsequent Rule 17a–22 requires all registered of the information to be collected; and
amendments, all written statements clearing agencies to file with the (d) ways to minimize the burden of the
with respect to the proposed rule Commission three copies of all materials collection of information on
change that are filed with the they issue or make generally available to respondents, including through the use
Commission, and all written their participants or other entities with of automated collection techniques or
communications relating to the whom they have a significant other forms of information technology.
proposed rule change between the relationship. The filings with the Consideration will be given to
Commission and any person, other than Commission must be made within ten comments and suggestions submitted in
those that may be withheld from the days after the materials are issued or writing within 60 days of this
public in accordance with the made generally available. When the publication.
provisions of 5 U.S.C. 552, will be Commission is not the clearing agency’s
An agency may not conduct or
available for Web site viewing and appropriate regulatory agency, the
sponsor, and a person is not required to
printing in the Commission’s Public clearing agency must file one copy of
respond to, a collection of information
Reference Room, 100 F Street NE., the material with its appropriate
under the PRA unless it displays a
Washington, DC 20549, on official regulatory agency.
currently valid OMB control number.
sradovich on DSK3GMQ082PROD with NOTICES
business days between the hours of The Commission is responsible for
10:00 a.m. and 3:00 p.m. Copies of the overseeing clearing agencies and uses Please direct your written comments
filing also will be available for the information filed pursuant to Rule to: Pamela Dyson, Director/Chief
inspection and copying at the principal 17a–22 to determine whether a clearing Information Officer, Securities and
office of the Exchange. All comments agency is implementing procedural or Exchange Commission, c/o Remi Pavlik-
policy changes. The information filed Simon, 100 F Street NE., Washington,
of filing of the proposed rule change, or such DC 20549, or send an email to: PRA_
shorter time as designated by the Commission. 15 17 CFR 200.30–3(a)(12). Mailbox@sec.gov.
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Document Created: 2017-02-22 00:08:38
Document Modified: 2017-02-22 00:08:38
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
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| Section | Notices | |
| FR Citation | 82 FR 11389 |
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