82_FR_58043 82 FR 57809 - Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period for the Retail Price Improvement Program Until June 30, 2018

82 FR 57809 - Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period for the Retail Price Improvement Program Until June 30, 2018

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 234 (December 7, 2017)

Page Range57809-57811
FR Document2017-26318

Federal Register, Volume 82 Issue 234 (Thursday, December 7, 2017)
[Federal Register Volume 82, Number 234 (Thursday, December 7, 2017)]
[Notices]
[Pages 57809-57811]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26318]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82192; File No. SR-BX-2017-055]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot 
Period for the Retail Price Improvement Program Until June 30, 2018

December 1, 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 November 28, 2017, Nasdaq BX, Inc. (``BX'' 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the pilot period for the Exchange's 
Retail Price Improvement (``RPI'') Program (the ``Program''), which is 
set to expire on December 1, 2017, for an additional period, to expire 
on June 30, 2018.
    The Exchange has designated December 1, 2017 as the date the 
proposed rule change becomes effective.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://nasdaqbx.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 those 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 parts of such 
statements.

[[Page 57810]]

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 extend the pilot period of the RPI 
Program,\3\ currently scheduled to expire on December 1, 2017, for an 
additional period, to expire on June 30, 2018.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 73702 (November 28, 
2014), 79 FR 72049 (December 4, 2014) (``RPI Approval Order'') (SR-
BX-2014-048).
---------------------------------------------------------------------------

Background
    In November 2014, the Commission approved the RPI Program on a 
pilot basis.\4\ The Program is designed to attract retail order flow to 
the Exchange, and allow such order flow to receive potential price 
improvement. The Program is currently limited to trades occurring at 
prices equal to or greater than $1.00 per share. Under the Program, a 
new class of market participant called a Retail Member Organization 
(``RMO'') is eligible to submit certain retail order flow (``Retail 
Orders'') \5\ to the Exchange. BX members (``Members'') are permitted 
to provide potential price improvement for Retail Orders in the form of 
non-displayed interest that is priced more aggressively than the 
Protected National Best Bid or Offer (``Protected NBBO'').\6\
---------------------------------------------------------------------------

    \4\ See id.
    \5\ A ``Retail Order'' is defined in BX Rule 4780(a)(2) by 
referencing BX Rule 4702, and BX Rule 4702(b)(6) says it is an order 
type with a non-display order attribute submitted to the Exchange by 
a RMO. A Retail Order must be an agency order, or riskless principal 
order that satisfies the criteria of FINRA Rule 5320.03. The Retail 
Order must reflect trading interest of a natural person with no 
change made to the terms of the underlying order of the natural 
person with respect to price (except in the case of a market order 
that is changed to a marketable limit order) or side of market and 
that does not originate from a trading algorithm or any other 
computerized methodology.
    \6\ The term Protected Quotation is defined in Chapter XII, Sec. 
1(19) and has the same meaning as is set forth in Regulation NMS 
Rule 600(b)(58). The Protected NBBO is the best-priced protected bid 
and offer. Generally, the Protected NBBO and the national best bid 
and offer (``NBBO'') will be the same. However, a market center is 
not required to route to the NBBO if that market center is subject 
to an exception under Regulation NMS Rule 611(b)(1) or if such NBBO 
is otherwise not available for an automatic execution. In such case, 
the Protected NBBO would be the best-priced protected bid or offer 
to which a market center must route interest pursuant to Regulation 
NMS Rule 611.
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    The Program was approved by the Commission on a pilot basis running 
one-year from the date of implementation.\7\ The Commission approved 
the Program on November 28, 2014.\8\ The Exchange implemented the 
Program on December 1, 2014 and the pilot has since been extended for a 
one year period twice with it now scheduled to end on December 1, 
2017.\9\
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    \7\ See RPI Approval Order, supra note 3 at 72053.
    \8\ Id. at 72049.
    \9\ See Securities Exchange Act Release No. 76490 (November 20, 
2015), 80 FR 74165 (November 27, 2015) (SR-BX-2015-073); Securities 
Exchange Act Release No. 79446 (December 1, 2016), 81 FR 88290 
(December 7, 2016) (SR-BX-2016-065).
---------------------------------------------------------------------------

Proposal To Extend the Operation of the Program
    The Exchange established the RPI Program in an attempt to attract 
retail order flow to the Exchange by potentially providing price 
improvement to such order flow. The Exchange believes that the Program 
promotes competition for retail order flow by allowing Exchange members 
to submit Retail Price Improvement Orders (``RPI Orders'') \10\ to 
interact with Retail Orders. Such competition has the ability to 
promote efficiency by facilitating the price discovery process and 
generating additional investor interest in trading securities, thereby 
promoting capital formation. The Exchange believes that extending the 
pilot is appropriate because it will allow the Exchange and the 
Commission additional time to analyze data regarding the Program that 
the Exchange has committed to provide.\11\ As such, the Exchange 
believes that it is appropriate to extend the current operation of the 
Program.\12\ Through this filing, the Exchange seeks to extend the 
current pilot period of the Program until June 30, 2018.
---------------------------------------------------------------------------

    \10\ A Retail Price Improvement Order is defined in BX Rule 
4780(a)(3) by referencing BX Rule 4702 and BX Rule 4702(b)(5) says 
that it is as an order type with a non-display order attribute that 
is held on the Exchange Book in order to provide liquidity at a 
price at least $0.001 better than the NBBO through a special 
execution process described in Rule 4780.
    \11\ See RPI Approval Order, supra note 3 at 72051.
    \12\ Concurrently with this filing, the Exchange has submitted a 
request for an extension of the exemption under Regulation NMS Rule 
612 previously granted by the Commission that permits it to accept 
and rank the RPI orders in sub-penny increments. See Letter from 
Jeffrey S. Davis, Vice President and Deputy General Counsel and 
Secretary, Nasdaq BX, Inc. to Eduardo A. Aleman, Assistant 
Secretary, Securities and Exchange Commission dated November 28, 
2017.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\13\ in general, and with 
Section 6(b)(5) of the Act,\14\ 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f.
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes that extending the pilot period for the RPI 
Program is consistent with these principles because the Program is 
reasonably designed to attract retail order flow to the exchange 
environment, while helping to ensure that retail investors benefit from 
the better price that liquidity providers are willing to give their 
orders. Additionally, as previously stated, the competition promoted by 
the Program may facilitate the price discovery process and potentially 
generate additional investor interest in trading securities. The 
extension of the pilot period will allow the Commission and the 
Exchange to continue to monitor the Program for its potential effects 
on public price discovery, and on the broader market structure.

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

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. The 
proposed rule change extends an established pilot program for an 
additional period, to expire on June 30, 2018, thus allowing the RPI 
Program to enhance competition for retail order flow and contribute to 
the public price discovery process.

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) 
by its terms, become operative for 30 days from the date on which it 
was filed, or such shorter time as the Commission may designate, the 
proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) of the Act \15\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\16\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 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.

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[[Page 57811]]

    A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally 
does not become operative for 30 days after the date of its filing. 
However, Rule 19b-4(f)(6)(iii) \18\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay period. The Exchange states 
that waiving the operative delay would allow the pilot period to 
continue uninterrupted, which the Exchange argues would be beneficial 
to market participants and would help to eliminate the potential for 
investor confusion.
---------------------------------------------------------------------------

    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The Commission believes that waiver of the 30-day operative delay 
period is consistent with the protection of investors and the public 
interest. Specifically, the Commission believes that the proposal would 
allow the RPI Program to continue uninterrupted and to provide 
additional time for data about the program to be generated and 
analyzed. For these reasons, the Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest, and designates the proposed rule change 
operative upon filing.\19\
---------------------------------------------------------------------------

    \19\ 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.\20\
---------------------------------------------------------------------------

    \20\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BX-2017-055 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BX-2017-055. 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.
    All submissions should refer to File Number SR-BX-2017-055 and 
should be submitted on or before December 28, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26318 Filed 12-6-17; 8:45 am]
BILLING CODE 8011-01-P



                                                                           Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices                                             57809

                                                current offering price described in a                   redemptions and Deposit Instruments                     SECURITIES AND EXCHANGE
                                                Fund’s prospectus, and not at a price                   and Redemption Instruments will be                      COMMISSION
                                                based on NAV. Applicants state that (a)                 valued in the same manner as those
                                                secondary market trading in shares does                 investment positions currently held by                  [Release No. 34–82192; File No. SR–BX–
                                                not involve a Fund as a party and will                  the Funds. Applicants also seek relief                  2017–055]
                                                not result in dilution of an investment                 from the prohibitions on affiliated
                                                in shares, and (b) to the extent different              transactions in section 17(a) to permit a               Self-Regulatory Organizations; Nasdaq
                                                prices exist during a given trading day,                Fund to sell its shares to and redeem its               BX, Inc.; Notice of Filing and
                                                or from day to day, such variances occur                shares from a Fund of Funds, and to                     Immediate Effectiveness of Proposed
                                                as a result of third-party market forces,                                                                       Rule Change To Extend the Pilot
                                                                                                        engage in the accompanying in-kind
                                                such as supply and demand. Therefore,                                                                           Period for the Retail Price
                                                                                                        transactions with the Fund of Funds.3
                                                applicants assert that secondary market                                                                         Improvement Program Until June 30,
                                                transactions in shares will not lead to                 The purchase of Creation Units by a
                                                                                                        Fund of Funds directly from a Fund will                 2018
                                                discrimination or preferential treatment
                                                among purchasers. Finally, applicants                   be accomplished in accordance with the                  December 1, 2017.
                                                represent that share market prices will                 policies of the Fund of Funds and will                     Pursuant to Section 19(b)(1) of the
                                                be disciplined by arbitrage                             be based on the NAVs of the Funds.                      Securities Exchange Act of 1934
                                                opportunities, which should prevent                        9. Section 6(c) of the Act permits the               (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                shares from trading at a material                       Commission to exempt any persons or                     notice is hereby given that on November
                                                discount or premium from NAV.                           transactions from any provision of the                  28, 2017, Nasdaq BX, Inc. (‘‘BX’’ or
                                                   6. With respect to Funds that effect                 Act if such exemption is necessary or                   ‘‘Exchange’’) filed with the Securities
                                                creations and redemptions of Creation                   appropriate in the public interest and                  and Exchange Commission (‘‘SEC’’ or
                                                Units in kind and that are based on                     consistent with the protection of                       ‘‘Commission’’) the proposed rule
                                                certain Underlying Indexes that include                                                                         change as described in Items I and II
                                                                                                        investors and the purposes fairly
                                                foreign securities, applicants request                                                                          below, which Items have been prepared
                                                                                                        intended by the policy and provisions of
                                                relief from the requirement imposed by                                                                          by the Exchange. The Commission is
                                                section 22(e) in order to allow such                    the Act. Section 12(d)(1)(J) of the Act
                                                                                                        provides that the Commission may                        publishing this notice to solicit
                                                Funds to pay redemption proceeds                                                                                comments on the proposed rule change
                                                within fifteen calendar days following                  exempt any person, security, or
                                                                                                                                                                from interested persons.
                                                the tender of Creation Units for                        transaction, or any class or classes of
                                                redemption. Applicants assert that the                  persons, securities, or transactions, from              I. Self-Regulatory Organization’s
                                                requested relief would not be                           any provision of section 12(d)(1) if the                Statement of the Terms of Substance of
                                                inconsistent with the spirit and intent of              exemption is consistent with the public                 the Proposed Rule Change
                                                section 22(e) to prevent unreasonable,                  interest and the protection of investors.                  The Exchange proposes to extend the
                                                undisclosed or unforeseen delays in the                 Section 17(b) of the Act authorizes the                 pilot period for the Exchange’s Retail
                                                actual payment of redemption proceeds.                  Commission to grant an order                            Price Improvement (‘‘RPI’’) Program (the
                                                   7. Applicants request an exemption to                permitting a transaction otherwise                      ‘‘Program’’), which is set to expire on
                                                permit Funds of Funds to acquire Fund                   prohibited by section 17(a) if it finds                 December 1, 2017, for an additional
                                                shares beyond the limits of section                     that (a) the terms of the proposed                      period, to expire on June 30, 2018.
                                                12(d)(1)(A) of the Act; and the Funds,                  transaction are fair and reasonable and
                                                and any principal underwriter for the                                                                              The Exchange has designated
                                                                                                        do not involve overreaching on the part                 December 1, 2017 as the date the
                                                Funds, and/or any broker or dealer                      of any person concerned; (b) the
                                                registered under the Exchange Act, to                                                                           proposed rule change becomes effective.
                                                                                                        proposed transaction is consistent with                    The text of the proposed rule change
                                                sell shares to Funds of Funds beyond
                                                                                                        the policies of each registered                         is available on the Exchange’s Web site
                                                the limits of section 12(d)(1)(B) of the
                                                Act. The application’s terms and                        investment company involved; and (c)                    at http://nasdaqbx.cchwallstreet.com/,
                                                conditions are designed to, among other                 the proposed transaction is consistent                  at the principal office of the Exchange,
                                                things, help prevent any potential (i)                  with the general purposes of the Act.                   and at the Commission’s Public
                                                undue influence over a Fund through                       For the Commission, by the Division of                Reference Room.
                                                control or voting power, or in                          Investment Management, under delegated                  II. Self-Regulatory Organization’s
                                                connection with certain services,                       authority.                                              Statement of the Purpose of, and
                                                transactions, and underwritings, (ii)                   Eduardo A. Aleman,                                      Statutory Basis for, the Proposed Rule
                                                excessive layering of fees, and (iii)                   Assistant Secretary.                                    Change
                                                overly complex fund structures, which
                                                                                                        [FR Doc. 2017–26343 Filed 12–6–17; 8:45 am]
                                                are the concerns underlying the limits                                                                            In its filing with the Commission, the
                                                in sections 12(d)(1)(A) and (B) of the                  BILLING CODE 8011–01–P                                  Exchange included statements
                                                Act.                                                                                                            concerning the purpose of and basis for
                                                   8. Applicants request an exemption                                                                           the proposed rule change and discussed
                                                from sections 17(a)(1) and 17(a)(2) of the                                                                      any comments it received on the
                                                Act to permit persons that are Affiliated                  3 The requested relief would apply to direct sales   proposed rule change. The text of those
                                                Persons, or Second Tier Affiliates, of the              of shares in Creation Units by a Fund to a Fund of      statements may be examined at the
                                                Funds, solely by virtue of certain                                                                              places specified in Item IV below. The
sradovich on DSK3GMQ082PROD with NOTICES




                                                                                                        Funds and redemptions of those shares. Applicants,
                                                ownership interests, to effectuate                      moreover, are not seeking relief from section 17(a)     Exchange has prepared summaries, set
                                                purchases and redemptions in-kind. The                  for, and the requested relief will not apply to,        forth in sections A, B, and C below, of
                                                                                                        transactions where a Fund could be deemed an
                                                deposit procedures for in-kind                                                                                  the most significant parts of such
                                                                                                        Affiliated Person, or a Second-Tier Affiliate, of a
                                                purchases of Creation Units and the                     Fund of Funds because an Adviser or an entity
                                                                                                                                                                statements.
                                                redemption procedures for in-kind                       controlling, controlled by or under common control
                                                redemptions of Creation Units will be                   with an Adviser provides investment advisory             1 15   U.S.C. 78s(b)(1).
                                                the same for all purchases and                          services to that Fund of Funds.                          2 17   CFR 240.19b–4.



                                           VerDate Sep<11>2014   18:50 Dec 06, 2017   Jkt 244001   PO 00000   Frm 00107   Fmt 4703   Sfmt 4703   E:\FR\FM\07DEN1.SGM      07DEN1


                                                57810                       Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices

                                                A. Self-Regulatory Organization’s                         pilot has since been extended for a one                 general to protect investors and the
                                                Statement of the Purpose of, and                          year period twice with it now scheduled                 public interest.
                                                Statutory Basis for, the Proposed Rule                    to end on December 1, 2017.9                               The Exchange believes that extending
                                                Change                                                                                                            the pilot period for the RPI Program is
                                                                                                          Proposal To Extend the Operation of the                 consistent with these principles because
                                                1. Purpose                                                Program                                                 the Program is reasonably designed to
                                                   The purpose of this filing is to extend                                                                        attract retail order flow to the exchange
                                                                                                             The Exchange established the RPI
                                                the pilot period of the RPI Program,3                                                                             environment, while helping to ensure
                                                currently scheduled to expire on                          Program in an attempt to attract retail
                                                                                                                                                                  that retail investors benefit from the
                                                December 1, 2017, for an additional                       order flow to the Exchange by
                                                                                                                                                                  better price that liquidity providers are
                                                period, to expire on June 30, 2018.                       potentially providing price
                                                                                                                                                                  willing to give their orders.
                                                                                                          improvement to such order flow. The
                                                Background                                                                                                        Additionally, as previously stated, the
                                                                                                          Exchange believes that the Program
                                                                                                                                                                  competition promoted by the Program
                                                   In November 2014, the Commission                       promotes competition for retail order
                                                                                                                                                                  may facilitate the price discovery
                                                approved the RPI Program on a pilot                       flow by allowing Exchange members to
                                                                                                                                                                  process and potentially generate
                                                basis.4 The Program is designed to                        submit Retail Price Improvement Orders
                                                                                                                                                                  additional investor interest in trading
                                                attract retail order flow to the Exchange,                (‘‘RPI Orders’’) 10 to interact with Retail
                                                                                                                                                                  securities. The extension of the pilot
                                                and allow such order flow to receive                      Orders. Such competition has the ability
                                                                                                                                                                  period will allow the Commission and
                                                potential price improvement. The                          to promote efficiency by facilitating the               the Exchange to continue to monitor the
                                                Program is currently limited to trades                    price discovery process and generating                  Program for its potential effects on
                                                occurring at prices equal to or greater                   additional investor interest in trading                 public price discovery, and on the
                                                than $1.00 per share. Under the                           securities, thereby promoting capital                   broader market structure.
                                                Program, a new class of market                            formation. The Exchange believes that
                                                participant called a Retail Member                        extending the pilot is appropriate                      B. Self-Regulatory Organization’s
                                                Organization (‘‘RMO’’) is eligible to                     because it will allow the Exchange and                  Statement on Burden on Competition
                                                submit certain retail order flow (‘‘Retail                the Commission additional time to                          The Exchange does not believe that
                                                Orders’’) 5 to the Exchange. BX members                   analyze data regarding the Program that                 the proposed rule change will result in
                                                (‘‘Members’’) are permitted to provide                    the Exchange has committed to                           any burden on competition that is not
                                                potential price improvement for Retail                    provide.11 As such, the Exchange                        necessary or appropriate in furtherance
                                                Orders in the form of non-displayed                       believes that it is appropriate to extend               of the purposes of the Act, as amended.
                                                interest that is priced more aggressively                 the current operation of the Program.12                 The proposed rule change extends an
                                                than the Protected National Best Bid or                   Through this filing, the Exchange seeks                 established pilot program for an
                                                Offer (‘‘Protected NBBO’’).6                              to extend the current pilot period of the               additional period, to expire on June 30,
                                                   The Program was approved by the                        Program until June 30, 2018.                            2018, thus allowing the RPI Program to
                                                Commission on a pilot basis running                                                                               enhance competition for retail order
                                                                                                          2. Statutory Basis
                                                one-year from the date of                                                                                         flow and contribute to the public price
                                                implementation.7 The Commission                             The Exchange believes that the                        discovery process.
                                                approved the Program on November 28,                      proposed rule change is consistent with                 C. Self-Regulatory Organization’s
                                                2014.8 The Exchange implemented the                       the provisions of Section 6 of the Act,13               Statement on Comments on the
                                                Program on December 1, 2014 and the                       in general, and with Section 6(b)(5) of                 Proposed Rule Change Received From
                                                                                                          the Act,14 in particular, in that it is                 Members, Participants, or Others
                                                  3 Securities Exchange Act Release No. 73702
                                                                                                          designed to promote just and equitable
                                                (November 28, 2014), 79 FR 72049 (December 4,
                                                                                                          principles of trade, to remove                            No written comments were either
                                                2014) (‘‘RPI Approval Order’’) (SR–BX–2014–048).                                                                  solicited or received.
                                                  4 See id.                                               impediments to and perfect the
                                                  5 A ‘‘Retail Order’’ is defined in BX Rule              mechanism of a free and open market                     III. Date of Effectiveness of the
                                                4780(a)(2) by referencing BX Rule 4702, and BX            and a national market system, and, in                   Proposed Rule Change and Timing for
                                                Rule 4702(b)(6) says it is an order type with a non-                                                              Commission Action
                                                display order attribute submitted to the Exchange
                                                                                                             9 See Securities Exchange Act Release No. 76490
                                                by a RMO. A Retail Order must be an agency order,                                                                    Because the foregoing proposed rule
                                                or riskless principal order that satisfies the criteria   (November 20, 2015), 80 FR 74165 (November 27,
                                                                                                          2015) (SR–BX–2015–073); Securities Exchange Act
                                                                                                                                                                  change does not: (i) Significantly affect
                                                of FINRA Rule 5320.03. The Retail Order must
                                                reflect trading interest of a natural person with no      Release No. 79446 (December 1, 2016), 81 FR 88290       the protection of investors or the public
                                                change made to the terms of the underlying order          (December 7, 2016) (SR–BX–2016–065).                    interest; (ii) impose any significant
                                                of the natural person with respect to price (except          10 A Retail Price Improvement Order is defined in
                                                                                                                                                                  burden on competition; and (iii) by its
                                                in the case of a market order that is changed to a        BX Rule 4780(a)(3) by referencing BX Rule 4702          terms, become operative for 30 days
                                                marketable limit order) or side of market and that        and BX Rule 4702(b)(5) says that it is as an order
                                                does not originate from a trading algorithm or any        type with a non-display order attribute that is held    from the date on which it was filed, or
                                                other computerized methodology.                           on the Exchange Book in order to provide liquidity      such shorter time as the Commission
                                                  6 The term Protected Quotation is defined in            at a price at least $0.001 better than the NBBO         may designate, the proposed rule
                                                Chapter XII, Sec. 1(19) and has the same meaning          through a special execution process described in        change has become effective pursuant to
                                                as is set forth in Regulation NMS Rule 600(b)(58).        Rule 4780.
                                                                                                             11 See RPI Approval Order, supra note 3 at 72051.
                                                                                                                                                                  Section 19(b)(3)(A)(iii) of the Act 15 and
                                                The Protected NBBO is the best-priced protected
                                                bid and offer. Generally, the Protected NBBO and             12 Concurrently with this filing, the Exchange has   subparagraph (f)(6) of Rule 19b–4
                                                the national best bid and offer (‘‘NBBO’’) will be the    submitted a request for an extension of the             thereunder.16
                                                same. However, a market center is not required to         exemption under Regulation NMS Rule 612
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                                                route to the NBBO if that market center is subject        previously granted by the Commission that permits         15 15  U.S.C. 78s(b)(3)(A)(iii).
                                                to an exception under Regulation NMS Rule                 it to accept and rank the RPI orders in sub-penny         16 17  CFR 240.19b–4(f)(6). As required under Rule
                                                611(b)(1) or if such NBBO is otherwise not available      increments. See Letter from Jeffrey S. Davis, Vice      19b–4(f)(6)(iii), the Exchange provided the
                                                for an automatic execution. In such case, the             President and Deputy General Counsel and                Commission with written notice of its intent to file
                                                Protected NBBO would be the best-priced protected         Secretary, Nasdaq BX, Inc. to Eduardo A. Aleman,        the proposed rule change, along with a brief
                                                bid or offer to which a market center must route          Assistant Secretary, Securities and Exchange            description and the text of the proposed rule
                                                interest pursuant to Regulation NMS Rule 611.             Commission dated November 28, 2017.                     change, at least five business days prior to the date
                                                  7 See RPI Approval Order, supra note 3 at 72053.           13 15 U.S.C. 78f.
                                                                                                                                                                  of filing of the proposed rule change, or such
                                                  8 Id. at 72049.                                            14 15 U.S.C. 78f(b)(5).                              shorter time as designated by the Commission.



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                                                                           Federal Register / Vol. 82, No. 234 / Thursday, December 7, 2017 / Notices                                                  57811

                                                   A proposed rule change filed under                   Paper Comments                                         DATES: Thursday, December 14, 2017,
                                                Rule 19b–4(f)(6) 17 normally does not                      • Send paper comments in triplicate                 from 9:00 a.m. to 4:00 p.m.
                                                become operative for 30 days after the                  to Secretary, Securities and Exchange                  ADDRESSES: U.S. Small Business
                                                date of its filing. However, Rule 19b–                  Commission, 100 F Street NE.,                          Administration, 409 3rd Street SW.,
                                                4(f)(6)(iii) 18 permits the Commission to               Washington, DC 20549–1090.                             Washington, DC 20416.
                                                designate a shorter time if such action                                                                           Where: Office of Entrepreneurial
                                                                                                        All submissions should refer to File
                                                is consistent with the protection of                                                                           Development Conference Room, 6th
                                                                                                        Number SR–BX–2017–055. This file
                                                investors and the public interest. The                                                                         Floor. Due to limited seating, the
                                                                                                        number should be included on the
                                                Exchange has requested that the                                                                                general public is requested to attend the
                                                                                                        subject line if email is used. To help the
                                                Commission waive the 30-day operative                                                                          meeting via teleconference or webinar.
                                                                                                        Commission process and review your
                                                delay period. The Exchange states that                                                                            Contact Info: (Teleconference Dial-in)
                                                                                                        comments more efficiently, please use
                                                waiving the operative delay would                                                                              1–888–858–2144, Access Code:
                                                                                                        only one method. The Commission will
                                                allow the pilot period to continue                                                                             7805798; (Webinar) https://
                                                                                                        post all comments on the Commission’s
                                                uninterrupted, which the Exchange                                                                              connect16.uc.att.com/sba/meet/?Ex
                                                                                                        Internet Web site (http://www.sec.gov/
                                                argues would be beneficial to market                                                                           EventID=87805798; Access Code:
                                                                                                        rules/sro.shtml).
                                                participants and would help to                                                                                 7805798.
                                                                                                           Copies of the submission, all
                                                eliminate the potential for investor
                                                                                                        subsequent amendments, all written                     SUPPLEMENTARY INFORMATION:     Pursuant
                                                confusion.
                                                   The Commission believes that waiver                  statements with respect to the proposed                to section 10(a)(2) of the Federal
                                                of the 30-day operative delay period is                 rule change that are filed with the                    Advisory Committee Act (5 U.S.C.,
                                                consistent with the protection of                       Commission, and all written                            Appendix 2), SBA announces the
                                                investors and the public interest.                      communications relating to the                         meeting of the Advisory Committee on
                                                Specifically, the Commission believes                   proposed rule change between the                       Veterans Business Affairs (ACVBA). The
                                                that the proposal would allow the RPI                   Commission and any person, other than                  ACVBA is established pursuant to 15
                                                Program to continue uninterrupted and                   those that may be withheld from the                    U.S.C. 657(b) note, and serves as an
                                                to provide additional time for data about               public in accordance with the                          independent source of advice and
                                                the program to be generated and                         provisions of 5 U.S.C. 552, will be                    policy. The purpose of this meeting is
                                                analyzed. For these reasons, the                        available for Web site viewing and                     to focus on strategic planning, updates
                                                Commission believes that waiving the                    printing in the Commission’s Public                    on past and current events, and the
                                                30-day operative delay is consistent                    Reference Room, 100 F Street NE.,                      ACVBA’s objectives for 2018.
                                                with the protection of investors and the                Washington, DC 20549, on official                        This meeting is open to the public.
                                                public interest, and designates the                     business days between the hours of                     Advance notice of attendance is
                                                proposed rule change operative upon                     10:00 a.m. and 3:00 p.m. Copies of the                 requested. Anyone wishing to attend
                                                filing.19                                               filing also will be available for                      and/or make comments to the ACVBA
                                                   At any time within 60 days of the                    inspection and copying at the principal                must contact SBA’s Office of Veterans
                                                filing of the proposed rule change, the                 office of the Exchange. All comments                   Business Development no later than
                                                Commission summarily may                                received will be posted without change.                December 8, 2017 at veteransbusiness@
                                                temporarily suspend such rule change if                    All submissions should refer to File                sba.gov. Comments for the record will
                                                it appears to the Commission that such                  Number SR–BX–2017–055 and should                       be limited to five minutes to
                                                action is: (i) Necessary or appropriate in              be submitted on or before December 28,                 accommodate as many participants as
                                                the public interest; (ii) for the protection            2017.                                                  possible. Written comments should be
                                                of investors; or (iii) otherwise in                       For the Commission, by the Division of               sent to the above by December 8, 2017.
                                                furtherance of the purposes of the Act.20               Trading and Markets, pursuant to delegated             Special accommodation requests should
                                                                                                        authority.21                                           also be directed to SBA’s Office of
                                                IV. Solicitation of Comments                            Eduardo A. Aleman,                                     Veterans Business Development at (202)
                                                  Interested persons are invited to                     Assistant Secretary.                                   205–6773 or veteransbusiness@sba.gov.
                                                submit written data, views, and                         [FR Doc. 2017–26318 Filed 12–6–17; 8:45 am]              For more information on veteran
                                                arguments concerning the foregoing,                     BILLING CODE 8011–01–P
                                                                                                                                                               owned small business programs, please
                                                including whether the proposed rule                                                                            visit www.sba.gov/veterans.
                                                change is consistent with the Act.                                                                               Dated: November 21, 2017.
                                                Comments may be submitted by any of                     SMALL BUSINESS ADMINISTRATION                          Richard W. Kingan,
                                                the following methods:                                                                                         SBA Committee Management Officer.
                                                Electronic Comments                                     Meeting of the Advisory Committee on                   [FR Doc. 2017–26352 Filed 12–6–17; 8:45 am]
                                                                                                        Veterans Business Affairs
                                                  • Use the Commission’s Internet                                                                              BILLING CODE P
                                                comment form (http://www.sec.gov/                       AGENCY: U.S. Small Business
                                                rules/sro.shtml); or                                    Administration.
                                                  • Send an email to rule-                              ACTION: Notice of open Federal Advisory                DEPARTMENT OF STATE
                                                comments@sec.gov. Please include File                   Committee Meeting.                                     [Public Notice: 10219]
                                                Number SR–BX–2017–055 on the
                                                subject line.                                           SUMMARY:   The U.S. Small Business                     Certification Pursuant to Section
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                                                                                                        Administration (SBA) is issuing this                   7045(A)(4)(B) of the Department of
                                                  17 17  CFR 240.19b–4(f)(6).                           notice to announce the location, date,                 State, Foreign Operations, and Related
                                                  18 17  CFR 240.19b–4(f)(6)(iii).                      time, and agenda for the next meeting of               Programs Appropriations Act, 2017
                                                   19 For purposes only of waiving the operative
                                                                                                        the Advisory Committee on Veterans
                                                delay for this proposal, the Commission has                                                                      By virtue of the authority vested in
                                                considered the proposed rule’s impact on
                                                                                                        Business Affairs. The meeting is open to
                                                efficiency, competition, and capital formation. See     the public.                                            me as the Secretary of State, including
                                                15 U.S.C. 78c(f).                                                                                              pursuant to section 7045(a)(4)(B) of the
                                                   20 15 U.S.C. 78s(b)(3)(C).                             21 17   CFR 200.30–3(a)(12).                         Department of State, Foreign


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Document Created: 2017-12-07 00:34:41
Document Modified: 2017-12-07 00:34:41
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 57809 

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