83_FR_4737 83 FR 4715 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make a Technical Adjustment to its Rules To Allow Sub-Penny Quoting and Order Entry in Managed Fund Shares Priced Less Than $1.00

83 FR 4715 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Make a Technical Adjustment to its Rules To Allow Sub-Penny Quoting and Order Entry in Managed Fund Shares Priced Less Than $1.00

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 22 (February 1, 2018)

Page Range4715-4716
FR Document2018-01950

Federal Register, Volume 83 Issue 22 (Thursday, February 1, 2018) 
[Federal Register Volume 83, Number 22 (Thursday, February 1, 2018)]
[Notices]
[Pages 4715-4716]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-01950]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82589; File No. SR-NASDAQ-2018-006]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Make a Technical Adjustment to its Rules To Allow Sub-Penny Quoting and 
Order Entry in Managed Fund Shares Priced Less Than $1.00

January 26, 2018.
    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 January 23, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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 amend Nasdaq Rule 5735 to make a technical 
adjustment to its rules to allow sub-penny quoting and order entry in 
Managed Fund Shares. This filing is substantively identical to the 
relevant portion of a NYSE Arca, Inc. filing (SR-NYSEArca-2010-36).\3\
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    \3\ See Securities Exchange Act Release No. 62006 (April 29, 
2010), 75 FR 25019 (May 6, 2010) (SR-NYSEArca-2010-36).
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    The text of the proposed rule change is available on the Exchange's 
website at http://nasdaq.cchwallstreet.com, at the principal office of 
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to make a technical adjustment [sic] its 
rules to allow sub-penny quoting of Managed Fund Shares. Currently, 
Nasdaq Rule 5735 restricts the minimum price variation for quoting and 
order entry to $0.01. Consistent with Regulation NMS Rule 612, the 
Exchange proposes to remove this provision to allow such securities to 
be quoted in a minimum pricing increment of $0.0001 for securities 
priced less than $1.00. The Exchange notes that it has not had any of 
the aforementioned securities quote below a dollar nor does it 
anticipate such an occurrence in the reasonably foreseeable future. The 
Exchange simply seeks to harmonize the minimum price variation in the 
aforementioned product with other equity securities traded on the 
Exchange.\4\
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    \4\ See Nasdaq Rule 4613(a)(2)(I).
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    Moreover, the Exchange notes that this approach is substantially 
similar to the approach taken by NYSE Arca in 2010 in eliminating NYSE 
Arca Equities Rule 8.600 Commentary .03, which restricted the minimum 
price variation for quoting and order entry for Managed Fund Shares to 
$0.01.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\6\ in particular, because it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to, and perfect the mechanisms of, a 
free and open market and a national market system.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed amendment is consistent 
with the goal of removing impediments to a free and open market because 
the changes proposed herein will substantially harmonize Nasdaq's sub-
penny quoting and order entry rules with Rule 612 of Regulation NMS 
which allows a minimum pricing increment of $0.0001 for securities 
priced less than $1.00.

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 and the proposed rule change may 
serve to enhance competition and put the exchange on an equal 
competitive footing as it pertains to sub-penny quoting and order entry 
for Managed Fund Shares.

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

[[Page 4716]]

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 \7\ and Rule 19b-4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \9\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \10\ 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 asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. As noted 
above, NYSE Arca, Inc. has already adopted a substantively identical 
change to its rules.\11\ According to the Exchange, the proposed rule 
change will put the Exchange on an equal competitive footing with 
respect to sub-penny quoting and order entry for Managed Fund Shares 
priced less than $1.00. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Therefore, the Commission hereby waives the 30-day 
operative delay and designates the proposal operative upon filing.\12\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ See supra note 3 and accompanying text.
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 necessary or 
appropriate in the public interest, for the protection of investors, or 
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 change 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 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-NASDAQ-2018-006 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NASDAQ-2018-006. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2018-006 and should be submitted 
on or before February 22, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2018-01950 Filed 1-31-18; 8:45 am]
 BILLING CODE 8011-01-P

Federal Register / Vol. 83, No. 22 / Thursday, February 1, 2018 / Notices 4715 additional information regarding the below, which Items have been prepared with other equity securities traded on Fund’s holdings in Inflation Hedging by the Exchange. The Commission is the Exchange.4 Instruments; (2) making additional publishing this notice to solicit Moreover, the Exchange notes that representations regarding the Fund and comments on the proposed rule change this approach is substantially similar to Shares, including representations from interested persons. the approach taken by NYSE Arca in relating to the Fund’s investments in 2010 in eliminating NYSE Arca Equities I. Self-Regulatory Organization’s Rule 8.600 Commentary .03, which derivatives and the ability of the Statement of the Terms of Substance of restricted the minimum price variation Exchange to surveil trading in the the Proposed Rule Change for quoting and order entry for Managed Shares and certain of the underlying investments; and (3) providing The Exchange proposes to amend Fund Shares to $0.01. additional justification for why the Nasdaq Rule 5735 to make a technical adjustment to its rules to allow sub- 2. Statutory Basis Fund’s proposed investments are consistent with the Act. These changes penny quoting and order entry in The Exchange believes that its assist the Commission in evaluating the Managed Fund Shares. This filing is proposal is consistent with Section 6(b) Exchange’s proposal and in determining substantively identical to the relevant of the Act,5 in general, and furthers the that the listing and trading of the Shares portion of a NYSE Arca, Inc. filing (SR– objectives of Section 6(b)(5) of the Act,6 is consistent with the Act. Accordingly, NYSEArca–2010–36).3 in particular, because it is designed to the Commission finds good cause, The text of the proposed rule change prevent fraudulent and manipulative pursuant to Section 19(b)(2) of the is available on the Exchange’s website at acts and practices, to promote just and Act,67 to approve the proposed rule http://nasdaq.cchwallstreet.com, at the equitable principles of trade, to foster change, as modified by Amendment No. principal office of the Exchange, and at cooperation and coordination with 4, on an accelerated basis. the Commission’s Public Reference persons engaged in regulating, clearing, Room. settling, processing information with VI. Conclusion respect to, and facilitating transactions II. Self-Regulatory Organization’s It is therefore ordered, pursuant to in securities, to remove impediments to, Statement of the Purpose of, and Section 19(b)(2) of the Act,68 that the and perfect the mechanisms of, a free Statutory Basis for, the Proposed Rule proposed rule change (SR–BatsBZX– and open market and a national market Change system. 2017–54), as modified by Amendment No. 4 thereto, be, and it hereby is, In its filing with the Commission, the The Exchange believes that the approved on an accelerated basis. Exchange included statements proposed amendment is consistent with concerning the purpose of and basis for the goal of removing impediments to a For the Commission, by the Division of the proposed rule change and discussed free and open market because the Trading and Markets, pursuant to delegated authority.69 any comments it received on the changes proposed herein will proposed rule change. The text of these substantially harmonize Nasdaq’s sub- Robert W. Errett, statements may be examined at the penny quoting and order entry rules Deputy Secretary. with Rule 612 of Regulation NMS which places specified in Item IV below. The [FR Doc. 2018–01951 Filed 1–31–18; 8:45 am] Exchange has prepared summaries, set allows a minimum pricing increment of BILLING CODE 8011–01–P forth in sections A, B, and C below, of $0.0001 for securities priced less than the most significant aspects of such $1.00. statements. B. Self-Regulatory Organization’s SECURITIES AND EXCHANGE COMMISSION A. Self-Regulatory Organization’s Statement on Burden on Competition Statement of the Purpose of, and The Exchange does not believe that [Release No. 34–82589; File No. SR– NASDAQ–2018–006] Statutory Basis for, the Proposed Rule the proposed rule change will impose Change any burden on competition not Self-Regulatory Organizations; The 1. Purpose necessary or appropriate in furtherance Nasdaq Stock Market LLC; Notice of of the purposes of the Act and the Filing and Immediate Effectiveness of The Exchange proposes to make a proposed rule change may serve to Proposed Rule Change To Make a technical adjustment [sic] its rules to enhance competition and put the Technical Adjustment to its Rules To allow sub-penny quoting of Managed exchange on an equal competitive Allow Sub-Penny Quoting and Order Fund Shares. Currently, Nasdaq Rule footing as it pertains to sub-penny Entry in Managed Fund Shares Priced 5735 restricts the minimum price quoting and order entry for Managed Less Than $1.00 variation for quoting and order entry to Fund Shares. $0.01. Consistent with Regulation NMS January 26, 2018. Rule 612, the Exchange proposes to C. Self-Regulatory Organization’s Pursuant to Section 19(b)(1) of the remove this provision to allow such Statement on Comments on the Securities Exchange Act of 1934 securities to be quoted in a minimum Proposed Rule Change Received From (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 pricing increment of $0.0001 for Members, Participants, or Others notice is hereby given that on January securities priced less than $1.00. The No written comments were either 23, 2018, The Nasdaq Stock Market LLC Exchange notes that it has not had any solicited or received. (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the of the aforementioned securities quote Securities and Exchange Commission below a dollar nor does it anticipate III. Date of Effectiveness of the sradovich on DSK3GMQ082PROD with NOTICES (‘‘Commission’’) the proposed rule such an occurrence in the reasonably Proposed Rule Change and Timing for change as described in Items I and II foreseeable future. The Exchange simply Commission Action seeks to harmonize the minimum price Because the foregoing proposed rule 67 15 U.S.C. 78s(b)(2). variation in the aforementioned product change does not: (i) Significantly affect 68 15 U.S.C. 78s(b)(2). 69 17 CFR 200.30–3(a)(12). 3 See Securities Exchange Act Release No. 62006 4 See Nasdaq Rule 4613(a)(2)(I). 1 15 U.S.C. 78s(b)(1). 5 15 U.S.C. 78f(b). (April 29, 2010), 75 FR 25019 (May 6, 2010) (SR– 2 17 CFR 240.19b–4. NYSEArca–2010–36). 6 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 19:34 Jan 31, 2018 Jkt 244001 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 E:\FR\FM\01FEN1.SGM 01FEN1

4716 Federal Register / Vol. 83, No. 22 / Thursday, February 1, 2018 / Notices the protection of investors or the public IV. Solicitation of Comments For the Commission, by the Division of interest; (ii) impose any significant Trading and Markets, pursuant to delegated burden on competition; and (iii) become Interested persons are invited to authority.13 operative for 30 days from the date on submit written data, views, and Robert W. Errett, which it was filed, or such shorter time arguments concerning the foregoing, Deputy Secretary. as the Commission may designate, it has including whether the proposed rule [FR Doc. 2018–01950 Filed 1–31–18; 8:45 am] become effective pursuant to Section change is consistent with the Act. BILLING CODE 8011–01–P 19(b)(3)(A) of the Act 7 and Rule 19b– Comments may be submitted by any of 4(f)(6) thereunder.8 the following methods: SECURITIES AND EXCHANGE A proposed rule change filed Electronic Comments COMMISSION pursuant to Rule 19b–4(f)(6) under the Act 9 normally does not become • Use the Commission’s internet [Investment Advisers Act Release No. 4849] operative for 30 days after the date of its comment form (http://www.sec.gov/ rules/sro.shtml); or Notice of Intention To Cancel filing. However, Rule 19b–4(f)(6)(iii) 10 Registrations of Certain Investment permits the Commission to designate a • Send an email to rule-comments@ Advisers Pursuant to Section 203(h) of shorter time if such action is consistent sec.gov. Please include File Number SR– the Investment Advisors Act of 1940 with the protection of investors and the NASDAQ–2018–006 on the subject line. public interest. The Exchange has asked January 26, 2018. Paper Comments Notice is given that the Securities and the Commission to waive the 30-day Exchange Commission (the operative delay so that the proposal may • Send paper comments in triplicate become operative immediately upon ‘‘Commission’’) intends to issue an to Secretary, Securities and Exchange filing. As noted above, NYSE Arca, Inc. order or orders, pursuant to Section Commission, 100 F Street NE, 203(h) of the Investment Advisers Act of has already adopted a substantively Washington, DC 20549–1090. identical change to its rules.11 1940 (the ‘‘Act’’), cancelling the According to the Exchange, the All submissions should refer to File registrations of the investment advisers Number SR–NASDAQ–2018–006. This whose names appear in the attached proposed rule change will put the file number should be included on the Appendix, hereinafter referred to as the Exchange on an equal competitive subject line if email is used. To help the ‘‘registrants’’. footing with respect to sub-penny Section 203(h) of the Act provides, in quoting and order entry for Managed Commission process and review your pertinent part, that if the Commission Fund Shares priced less than $1.00. The comments more efficiently, please use finds that any person registered under Commission believes that waiving the only one method. The Commission will Section 203, or who has pending an 30-day operative delay is consistent post all comments on the Commission’s application for registration filed under with the protection of investors and the internet website (http://www.sec.gov/ that section, is no longer in existence, is public interest. Therefore, the rules/sro.shtml). Copies of the not engaged in business as an Commission hereby waives the 30-day submission, all subsequent investment adviser, or is prohibited operative delay and designates the amendments, all written statements from registering as an investment proposal operative upon filing.12 with respect to the proposed rule adviser under section 203A, the At any time within 60 days of the change that are filed with the Commission shall by order cancel the filing of the proposed rule change, the Commission, and all written registration of such person. Commission summarily may communications relating to the Each registrant listed in the attached temporarily suspend such rule change if proposed rule change between the Appendix either (a) has not filed a Form it appears to the Commission that such Commission and any person, other than ADV amendment with the Commission action is necessary or appropriate in the those that may be withheld from the as required by rule 204–1 under the Act public interest, for the protection of public in accordance with the and appears to be no longer in business investors, or otherwise in furtherance of provisions of 5 U.S.C. 552, will be as an investment adviser or (b) has the purposes of the Act. If the available for website viewing and indicated on Form ADV that it is no Commission takes such action, the printing in the Commission’s Public longer eligible to remain registered with Commission shall institute proceedings Reference Room, 100 F Street NE, the Commission as an investment to determine whether the proposed rule Washington, DC 20549 on official adviser but has not filed Form ADV–W change should be approved or business days between the hours of to withdraw its registration. 10:00 a.m. and 3:00 p.m. Copies of the Accordingly, the Commission believes disapproved. filing also will be available for that reasonable grounds exist for a finding that these registrants are no 7 15 U.S.C. 78s(b)(3)(A). inspection and copying at the principal longer in existence, are not engaged in 8 17 CFR 240.19b–4(f)(6). As required under Rule office of the Exchange. All comments 19b–4(f)(6)(iii), the Exchange provided the business as investment advisers, or are received will be posted without change. prohibited from registering as Commission with written notice of its intent to file the proposed rule change, along with a brief Persons submitting comments are investment advisers under section description and the text of the proposed rule cautioned that we do not redact or edit 203A, and that their registrations should change, at least five business days prior to the date personal identifying information from of filing of the proposed rule change, or such be cancelled pursuant to section 203(h) comment submissions. You should sradovich on DSK3GMQ082PROD with NOTICES shorter time as designated by the Commission. of the Act. 9 17 CFR 240.19b–4(f)(6). submit only information that you wish Notice is also given that any 10 17 CFR 240.19b–4(f)(6)(iii). to make available publicly. All interested person may, by February 26, 11 See supra note 3 and accompanying text. submissions should refer to File 2018, at 5:30 p.m., submit to the 12 For purposes only of waiving the 30-day Number SR–NASDAQ–2018–006 and Commission in writing a request for a operative delay, the Commission has also considered the proposed rule’s impact on should be submitted on or before hearing on the cancellation of the efficiency, competition, and capital formation. See February 22, 2018. 15 U.S.C. 78c(f). 13 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 19:34 Jan 31, 2018 Jkt 244001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 E:\FR\FM\01FEN1.SGM 01FEN1


Document Created: 2018-10-26 13:46:21
Document Modified: 2018-10-26 13:46:21
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 Citation83 FR 4715 
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