83 FR 48354 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate the Market Quality Program (Rule 5950)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 185 (September 24, 2018)
Federal Register Volume 83, Issue 185 (September 24, 2018)
| Page Range | 48354-48356 | |
| FR Document | 2018-20660 |
[Federal Register Volume 83, Number 185 (Monday, September 24, 2018)] [Notices] [Pages 48354-48356] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-20660] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-84179; File No. SR-Nasdaq-2018-074] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Eliminate the Market Quality Program (Rule 5950) September 18, 2018. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that, on September 7, 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 [[Page 48355]] solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C.78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 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 eliminate the Market Quality Program at Rule 5950. 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 the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to eliminate its Market Quality Program (``MQP'') and delete corresponding Rule 5950. The Exchange established the MQP in 2013 \4\ to promote market quality in certain securities listed on Nasdaq (``MQP Securities''), including by providing financial incentives to market makers in MQP Securities (``MQP Market Makers'') to maintain certain quoting and liquidity standards for them. --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 74580 (March 25, 2015), 80 FR 17126 (March 31, 2015) (SR-NASDAQ-2015-025) (reducing MQP fees to MQP Market Makers). --------------------------------------------------------------------------- The MQP is designed to be a one year pilot program that is set to commence if and when certain conditions are satisfied: (i) The Exchange's acceptance of an MQP Company,\5\ on behalf of an MQP Security; and (ii) the entry of a relevant MQP Market Maker into the Program. To date, however, neither of these conditions for the commencement of the MQP have occurred despite efforts by the Exchange over time to make the MQP more enticing to market makers.\6\ Because the MQP has yet to even satisfy the necessary pre-conditions for launching its pilot period, neither the Exchange nor the Commission has been able to assess whether or to what extent the Program is successful. --------------------------------------------------------------------------- \5\ The term ``MQP Company'' is defined in Rule 5950(e)(5) as the trust or company housing the Exchange Traded Fund (``ETF'') or, if the ETF is not a series of a trust or company, then the ETF itself. \6\ See Securities Exchange Act Release No. 69195 (March 20, 2013), 78 FR 18393 (March 26, 2013) (SR-NASDAQ-2012-137) (order granting approval of Market Quality Program) (SR-NASDAQ-2012-137) (``MQP order''). See also Securities Exchange Act Release No. 68515 (December 21, 2012), 77 FR 77141 (December 31, 2012) (SR-NASDAQ- 2012-137) (notice of filing Market Quality Program as pilot, with extensive description of program) (``MQP proposal''). --------------------------------------------------------------------------- At the Commission's suggestion and pursuant to its general initiative to end pilot programs that have failed to achieve their stated objectives, the Exchange is now proposing to eliminate the MQP and delete Rule 5950, which comprises the Program. The Exchange notes that it plans to develop a replacement market quality program in the future that it hopes will be more successful in attracting market maker interest than the existing Program. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\7\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\8\ in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general to protect investors and the public interest. The Exchange believes that it is consistent with the Act to eliminate the MQP because the Exchange has limited resources available to it to devote to the operation of special programs like MQP and as such, it is reasonable and equitable for the Exchange to allocate those resources to those programs that are effective and away from those programs that are ineffective. The Exchange believes that the objectives of the MQP would best be served through a re-design of the program at a future date. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f(b). \8\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange notes that the MQP is not and has not ever been utilized and, as such, the elimination of the Program will have no impact on competition whatsoever. 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 The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ Because the 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 prior to 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6)(iii) thereunder.\11\ --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A)(iii). \10\ 17 CFR 240.19b-4(f)(6). \11\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19 b- 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 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. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission may 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. The Exchange states that waiver of the 30-day delayed operative date is consistent with the protection of investors and the public interest because the MQP program has never been utilized and there is no reason for such a delay. The Commission agrees. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.\14\ --------------------------------------------------------------------------- \12\ 17 CFR 240.19b-4(f)(6). \13\ 17 CFR 240.19b-4(f)(6)(iii). \14\ 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). --------------------------------------------------------------------------- [[Page 48356]] At any time within 60 days of the filing of such 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 under Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed rule change should be approved or disapproved. --------------------------------------------------------------------------- \15\ 15 U.S.C. 78s(b)(2)(B). --------------------------------------------------------------------------- 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-2018-074 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-2018-074. 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-2018-074, and should be submitted on or before October 15, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-20660 Filed 9-21-18; 8:45 am] BILLING CODE 8011-01-P
![48354 Federal Register / Vol. 83, No. 185 / Monday, September 24, 2018 / Notices
continuing to provide an audit trail for III. Date of Effectiveness of the submission, all subsequent
orders submitted through the FBMS FIX Proposed Rule Change and Timing for amendments, all written statements
interface. Commission Action with respect to the proposed rule
The Exchange notes that while it is Because the foregoing proposed rule change that are filed with the
change does not: (i) Significantly affect Commission, and all written
permitting a broader group of market
the protection of investors or the public communications relating to the
participants to have access to FBMS, in
interest; (ii) impose any significant proposed rule change between the
this case with the FBMS FIX Interface, Commission and any person, other than
the Exchange does not believe that this burden on competition; and (iii) become
operative for 30 days from the date on those that may be withheld from the
amendment raises concern with respect public in accordance with the
to the quality of information received by which it was filed, or such shorter time
as the Commission may designate, it has provisions of 5 U.S.C. 552, will be
the Floor Broker because the Floor available for website viewing and
Broker remains responsible for ensuring become effective pursuant to Section
printing in the Commission’s Public
the order is in the proper form and 19(b)(3)(A) of the Act 9 and Rule 19b–
Reference Room, 100 F Street NE,
4(f)(6) thereunder.10
contains the appropriate information for At any time within 60 days of the Washington, DC 20549 on official
submission. As noted herein, members filing of the proposed rule change, the business days between the hours of
and non-members would not be able to Commission summarily may 10:00 a.m. and 3:00 p.m. Copies of the
send orders directly for execution into temporarily suspend such rule change if filing also will be available for
the matching engine through the FBMS it appears to the Commission that such inspection and copying at the principal
FIX Interface. The Exchange believes action is: (i) Necessary or appropriate in office of the Exchange. All comments
that this expansion only seeks to the public interest; (ii) for the protection received will be posted without change.
provide a Floor Broker with an order Persons submitting comments are
of investors; or (iii) otherwise in
that is available for representation cautioned that we do not redact or edit
furtherance of the purposes of the Act.
without the need for the Floor Broker to personal identifying information from
If the Commission takes such action, the
comment submissions. You should
manually enter the order into FBMS. Commission shall institute proceedings
submit only information that you wish
to determine whether the proposed rule
B. Self-Regulatory Organization’s to make available publicly. All
should be approved or disapproved.
Statement on Burden on Competition submissions should refer to File
IV. Solicitation of Comments Number SR–Phlx–2018–58 and should
The Exchange does not believe that be submitted on or before October
Interested persons are invited to
the proposed rule change will impose 15,2018.
submit written data, views, and
any burden on competition not arguments concerning the foregoing, For the Commission, by the Division of
necessary or appropriate in furtherance including whether the proposed rule Trading and Markets, pursuant to delegated
of the purposes of the Act. The change is consistent with the Act. authority.11
Exchange’s proposal offers market Comments may be submitted by any of Eduardo A. Aleman,
participants the ability to send an order the following methods: Assistant Secretary.
via the FBMS FIX Interface to a [FR Doc. 2018–20659 Filed 9–21–18; 8:45 am]
particular Floor Broker. The Exchange Electronic Comments
BILLING CODE 8011–01–P
believes that these proposed • Use the Commission’s internet
amendments do not create a burden on comment form (http://www.sec.gov/
inter-market competition because all rules/sro.shtml); or SECURITIES AND EXCHANGE
members and non-members may send • Send an email to rule-comments@ COMMISSION
orders to a Floor Broker via the FBMS sec.gov. Please include File Number SR–
[Release No. 34–84179; File No. SR–
FIX Interface. As is the case today, any Phlx–2018–58 on the subject line. Nasdaq–2018–074]
member or non-member may contact a Paper Comments
Floor Broker to submit an order to the Self-Regulatory Organizations; The
• Send paper comments in triplicate Nasdaq Stock Market LLC; Notice of
Phlx trading floor. The Exchange notes to Secretary, Securities and Exchange
that the proposed rule creates a new Filing and Immediate Effectiveness of
Commission, 100 F Street NE, Proposed Rule Change To Eliminate
modality for member and non-members Washington, DC 20549–1090.
to send orders to a Floor Broker for the Market Quality Program (Rule 5950)
All submissions should refer to File
representation. Floor Brokers conduct Number SR–Phlx–2018–58. This file September 18, 2018.
an agency business. Other market number should be included on the Pursuant to Section 19(b)(1) 1 of the
participants that conduct a market subject line if email is used. To help the Securities Exchange Act of 1934
making business have varied workflows Commission process and review your (‘‘Act’’) 2 and Rule 19b–4 thereunder,3
as compared to a Floor Broker and comments more efficiently, please use notice is hereby given that, on
would not benefit from a similar FBMS only one method. The Commission will September 7, 2018, The Nasdaq Stock
FIX Interface. The Exchange believes post all comments on the Commission’s Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’)
that this new interface does not create internet website (http://www.sec.gov/ filed with the Securities and Exchange
an intra-market burden on competition rules/sro.shtml). Copies of the Commission (‘‘Commission’’) the
for these reasons. proposed rule change as described in
Items I and II below, which Items have
amozie on DSK3GDR082PROD with NOTICES1
9 15 U.S.C. 78s(b)(3)(A).
C. Self-Regulatory Organization’s 10 17 CFR 240.19b–4(f)(6). As required under Rule been prepared by the Exchange. The
Statement on Comments on the 19b–4(f)(6)(iii), the Exchange provided the Commission is publishing this notice to
Proposed Rule Change Received From Commission with written notice of its intent to file
the proposed rule change, along with a brief
Members, Participants, or Others description and the text of the proposed rule
11 17 CFR 200.30–3(a)(12).
1 15 U.S.C.78s(b)(1).
change, at least five business days prior to the date
No written comments were either of filing of the proposed rule change, or such 2 15 U.S.C. 78a.
solicited or received. shorter time as designated by the Commission. 3 17 CFR 240.19b–4.
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![48356 Federal Register / Vol. 83, No. 185 / Monday, September 24, 2018 / Notices
At any time within 60 days of the filing also will be available for schedules adopted pursuant to
filing of such proposed rule change, the inspection and copying at the principal amendments filed in October 2017
Commission summarily may office of the Exchange. All comments (‘‘2017 Amendments’’).4 As a result of
temporarily suspend such rule change if received will be posted without change. the Participants’ decision to rescind the
it appears to the Commission that such Persons submitting comments are 2017 Amendments, the Participants
action is necessary or appropriate in the cautioned that we do not redact or edit believe that the stay order issued by the
public interest, for the protection of personal identifying information from Commission in connection with the
investors, or otherwise in furtherance of comment submissions. You should 2017 Amendments and the briefing
the purposes of the Act. If the submit only information that you wish schedule set therein are now moot.5
Commission takes such action, the to make available publicly. All Pursuant to Rule 608(b)(3) under
Commission shall institute proceedings submissions should refer to File Regulation NMS,6 the Participants
under Section 19(b)(2)(B) 15 of the Act to Number SR–Nasdaq–2018–074, and designate the Amendments as
determine whether the proposed rule should be submitted on or before establishing or changing a fee or other
change should be approved or October 15, 2018. charge collected on their behalf in
disapproved. For the Commission, by the Division of connection with access to, or use of, the
IV. Solicitation of Comments Trading and Markets, pursuant to delegated facilities contemplated by the Plans. As
authority.16 a result, the Amendments are effective
Interested persons are invited to Eduardo A. Aleman, upon filing with the Commission.
submit written data, views, and
Assistant Secretary. The Commission is publishing this
arguments concerning the foregoing,
[FR Doc. 2018–20660 Filed 9–21–18; 8:45 am] notice to solicit comments from
including whether the proposed rule
BILLING CODE 8011–01–P interested persons on the proposed
change is consistent with the Act.
Amendments. Set forth in Sections I and
Comments may be submitted by any of
II is the statement of the purpose and
the following methods:
SECURITIES AND EXCHANGE summary of the Amendments, along
Electronic Comments COMMISSION with the information required by Rules
• Use the Commission’s internet [Release No. 34–84194; File No. SR–CTA/
608(a) and 601(a) under the Act,
comment form (http://www.sec.gov/ CQ–2018–03] prepared and submitted by the
rules/sro.shtml); or Participants to the Commission.
• Send an email to rule-comments@ Consolidated Tape Association; Notice I. Rule 608(a)
sec.gov. Please include File Number SR– of Filing and Immediate Effectiveness
Nasdaq–2018–074 on the subject line. of the Twenty-Fourth Charges A. Purpose of the Amendments
Amendment to the Second As part of the 2017 Amendments, the
Paper Comments Restatement of the CTA Plan and the Participants amended the definition of
• Send paper comments in triplicate Fifteenth Charges Amendment to the ‘‘Non-Display Use’’ in footnote eight of
to Secretary, Securities and Exchange Restated CQ Plan the Plans’ fee schedules to explicitly
Commission, 100 F Street NE,
September 18, 2018. state that any use of data that does not
Washington, DC 20549–1090.
Pursuant to Section 11A of the make data visibly available to a data
All submissions should refer to File recipient on a device would be a Non-
Number SR–Nasdaq–2018–074. This file Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 608 thereunder,2 Display Use. The Participants also made
number should be included on the a parallel amendment to footnote two of
subject line if email is used. To help the notice is hereby given that on August
27, 2018, the Consolidated Tape the Plans’ fee schedules to state that the
Commission process and review your device fee would only be applicable
comments more efficiently, please use Association (‘‘CTA’’) Plan participants
(‘‘Participants’’) 3 filed with the where the data was visibly available to
only one method. The Commission will the data recipient; any other data use on
post all comments on the Commission’s Securities and Exchange Commission
(‘‘Commission’’) a proposal to amend a device would be considered Non-
internet website (http://www.sec.gov/ Display Use. The Participants also
rules/sro.shtml). Copies of the the Second Restatement of the CTA Plan
and the Restated CQ Plan (‘‘Plans’’). The amended footnote ten of the Plans’ fee
submission, all subsequent schedules to clarify when the access fee
amendments, all written statements amendment represents the twenty-
fourth Charges Amendment to the CTA was applicable. In particular, the
with respect to the proposed rule Participants amended footnote ten in
change that are filed with the Plan and the fifteenth Charges
Amendment to the CQ Plan the Plans’ fee schedules to provide the
Commission, and all written access fee would be applicable if: (1)
communications relating to the (‘‘Amendments’’). The Participants seek
to amend the Plans’ fee schedules The data recipient uses the data for non-
proposed rule change between the display; or (2) the data recipient
Commission and any person, other than (applicable to Network A and Network
B) to rescind the changes made to the receives the data in such a manner that
those that may be withheld from the the data can be manipulated and
public in accordance with the Non-Display Use and the access fee
disseminated to one or more devices,
provisions of 5 U.S.C. 552, will be 16 17 display or otherwise, regardless of
CFR 200.30–3(a)(12).
available for website viewing and 1 15 U.S.C. 78k–1. encryption or instructions from the
printing in the Commission’s Public 2 17 CFR 242.608. redistribution vendor regarding who has
Reference Room, 100 F Street NE,
amozie on DSK3GDR082PROD with NOTICES1
3 The Participants are: Cboe BYX Exchange, Inc.;
authorized access to the data.
Washington, DC 20549, on official Cboe BZX Exchange, Inc.; Cboe EDGA Exchange,
business days between the hours of Inc.; Cboe EDGX Exchange, Inc.; Cboe Exchange,
4 See Securities Exchange Act Release No. 82072
Inc.; Chicago Stock Exchange, Inc.; Financial
10:00 a.m. and 3:00 p.m. Copies of the Industry Regulatory Authority, Inc.; Investors’ (November 14, 2017), 82 FR 55137 (November 20,
Exchange LLC; Nasdaq BX, Inc.; Nasdaq ISE, LLC; 2017).
efficiency, competition, and capital formation. See Nasdaq PHLX Inc.; The Nasdaq Stock Market LLC; 5 See Securities Exchange Act Release No. 83755
15 U.S.C. 78c(f). New York Stock Exchange LLC; NYSE American (July 31, 2018) (‘‘Stay Order’’).
15 15 U.S.C. 78s(b)(2)(B). LLC; NYSE Arca, Inc.; NYSE National, Inc. 6 17 CFR 242.608(b)(3)(i).
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Document Created: 2018-09-22 00:33:21
Document Modified: 2018-09-22 00:33:21
| 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 | 83 FR 48354 |
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