Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Algo Test Facility, 61672-61674 [2014-24304]
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Federal Register / Vol. 79, No. 198 / Tuesday, October 14, 2014 / Notices
whether the information will have
practical use; the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the information
to be collected; and, ways to minimize
the burden of the collection of
information on those who are to
respond, including through the use of
automated collection techniques, when
appropriate, and other forms of
information technology.
This notice issued in Washington, DC,
on October 7, 2014.
Dated: October 7, 2014.
Denora Miller,
FOIA/Privacy Act Officer, Management.
[FR Doc. 2014–24312 Filed 10–10–14; 8:45 am]
BILLING CODE 6051–01–P
PEACE CORPS
Information Collection Request;
Submission for OMB Review
Peace Corps.
ACTION: 30-Day notice and request for
comments.
AGENCY:
The Peace Corps will be
submitting the following information
collection request to the Office of
Management and Budget (OMB) for
review and approval. The purpose of
this notice is to allow 30 days for public
comment in the Federal Register
preceding submission to OMB. We are
conducting this process in accordance
with the Paperwork Reduction Act of
1995 (44 U.S.C. Chapter 35).
DATES: Submit comments on or before
November 13, 2014.
ADDRESSES: Interested persons are
invited to submit comments regarding
this proposal. Comments should refer to
the proposal by name/or OMB approval
number and should be sent via email to:
oira_submission@omb.eop.gov or fax to:
202–395–3086. Attention: Desk Officer
for Peace Corps.
FOR FURTHER INFORMATION CONTACT:
Denora Miller, FOIA/Privacy Act
Officer, Peace Corps, 1111 20th Street
NW., Washington, DC 20526, (202) 692–
1236, or email at pcfr@peacecorps.gov.
SUPPLEMENTARY INFORMATION: Peace
Corps uses the confidential reference
form in order to learn from someone,
who knows a volunteer applicant and
his or her background, whether the
applicant possesses the necessary
characteristics and skills to serve as a
Volunteer.
OMB Control Number: 0420–0547.
Title: Peace Corps Response Volunteer
Application Form.
mstockstill on DSK4VPTVN1PROD with NOTICES
SUMMARY:
VerDate Sep<11>2014
16:59 Oct 10, 2014
Jkt 235001
Type of Review: Extension without
change of a currently approved
information collection.
Affected Public: Individuals.
Respondents’ Obligation to Reply:
Voluntary.
Burden to the Public:
a. Number of Respondents: 1,700.
b. Frequency of response: One time.
c. Completion time: 60 minutes.
d. Annual burden hours: 1,700.
General Description Of Collection:
The information collected in the Peace
Corps Response Volunteer Application
is used by Peace Corps Response staff to
perform initial screening for potential
candidates for Peace Corps Response
assignments. Applications contain basic
information concerning technical skills
and eligibility for Peace Corps Response
assignments.
Request For Comment: Peace Corps
invites comments on whether the
proposed collections of information are
necessary for proper performance of the
functions of the Peace Corps, including
whether the information will have
practical use; the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the information
to be collected; and, ways to minimize
the burden of the collection of
information on those who are to
respond, including through the use of
automated collection techniques, when
appropriate, and other forms of
information technology.
This notice issued in Washington, DC
on October 7, 2014.
Dated: October 7, 2014.
Denora Miller,
FOIA/Privacy Act Officer, Management.
[FR Doc. 2014–24311 Filed 10–10–14; 8:45 am]
BILLING CODE 6051–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73315; File No. SR–
NASDAQ–2014–097]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to the
Algo Test Facility
October 7, 2014.
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 October
2, 2014, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00077
Fmt 4703
Sfmt 4703
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III, below, which Items
have been prepared by NASDAQ. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ proposes to offer a new
testing environment, The NASDAQ
OMX Algo Test Facility (‘‘Algo Test
Facility’’).
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.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
NASDAQ is proposing to amend
NASDAQ Rule 7030 entitled ‘‘Other
Services’’ to offer NASDAQ Testing
Facility (NTF) 3 subscribers
(‘‘Subscriber’’) a new complement to the
existing NTF. The Algo Test Facility is
a sophisticated equity market
simulation environment based on a
detailed historical database which
includes NASDAQ display orders and
trades. During a simulation, Algo Test
Facility customers are able to use their
existing trading infrastructure to interact
and trade against this virtualized
Nasdaq historical market. By providing
a historically accurate market
3 The NASDAQ Testing Facilities provides firms
with the ability to test their automated systems that
integrate with Nasdaq services in a virtual trading
environment. This service supplies firms with
multiple venues to test upcoming Nasdaq releases
and product enhancements. In addition, firms may
use the NTF to test their new software development
prior to implementation.
E:\FR\FM\14OCN1.SGM
14OCN1
mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 198 / Tuesday, October 14, 2014 / Notices
simulation, the Algo Test Facility helps
increase the safety and security of the
market by mitigating aberrant trading
behavior.
The Algo Test Facility provides
electronic trading customers with: (i) A
safe environment to rigorously test and
calibrate their algorithmic strategies by
replaying and interacting with real
historical market data; (ii) significantly
higher accuracy and determinism on the
outcomes of individual orders versus
conventional paper-trading systems,
which are forced to make simple
probabilistic assumptions about fill
rates because they do not replicate and
replay the market microstructure; (iii) a
re-creation of the actual market’s
microstructure and real-world trading
conditions, providing accurate views of
adverse selection, time priority and fills
versus misses; (iv) support for order
entry allowing customers to interact via
OUCH 4 protocols; and (v) interaction of
customer activity with the actual
historic orders of other market
participants at the microstructure level.
The Algo Test Facility allows
customers to prototype, backtest, and
calibrate their strategies against a variety
of different kinds of real-world market
conditions and against real-world
market participants and competition.
The Algo Test Facility allows customers
to observe, correct, and test a large range
of potential unintended behaviors of
their algorithmic strategies before
committing real capital or impacting the
Exchange and other market participants.
Also, customers will be able to mitigate
the risk of aberrant or potentially
destabilizing behaviors, such as
inadvertent spamming or other
repetitive behaviors, or excessive risk in
open orders.
Customers would connect via their
existing trading infrastructure,
including risk systems, OMS, and feed
handlers currently housed in the
NASDAQ OMX Data Center in Carteret,
New Jersey. The Algo Testing Facility
will allow up to a certain number of
simulations to be run for all users to the
Algo Test Facility per day. While the
Algo Test Facility will be available to all
NTF subscribers, the capacity of
simulations is limited to a certain
number of simulations per day, which is
subject to change. The Algo Test Facility
will be available on a first-come firstserve basis. This limitation will apply
equally to all users and may increase
depending on customer interest. The
4 The Exchange plans to expand to other order
entry protocols and order types and include
latencies and intercolo latencies in future
enhancements.
VerDate Sep<11>2014
16:59 Oct 10, 2014
Jkt 235001
Exchange intends to evaluate the
capacity as the product is utilized.
Customers consume market data in a
format that is similar to ITCH from the
Algo Test Facility and send their orders
to the Algo Test Facility in response.
Delays on the customer side are based
uniquely on the customers’ actual
production trading infrastructure and its
ability to keep up with the Algo Test
Facility. Customer orders interact with
the actual historical order books. Both
queue priority and time priority are
preserved to the microsecond. For
example, if a customer lifts an offer in
the order book 100 microseconds before
a competitor tried to lift that offer, the
customer will get a fill and the
competitor will either consume the
additional liquidity on the book or form
a new bid. Automated reports will allow
customers to observe, correct, and test a
large range of potential unintended
behaviors of their algorithmic strategies
before committing real capital or
impacting the Exchange and other
market participants. Through new NTF
hand-offs in Carteret, customers will
receive market data in a format similar
to NASDAQ ITCH market data and have
the ability to execute trades via the
OUCH protocols.5
Customers desiring to utilize the Algo
Test Facility would be required to be
NTF Subscribers to access this
environment through NTF hand-offs in
Carteret. Currently, NTF Subscribers
with connectivity to Carteret are
assessed a fee of $1,000 per hand-off,
per month for connection to the NTF.6
The fees related to the NTF in Rule 7030
will continue to be assessed to current
NTF Subscribers. The Exchange intends
to not assess any other fees to NTF
Subscribers for use of the Algo Test
Facility at this time. The Exchange will
file a proposed rule change with the
Commission prior to commencing any
additional pricing specifically for this
product at a later time.
Currently, the NTF allows users to
test connectivity to the Exchange. As
discussed, the Algo Test Facility is a
complement to the NTF, and will be
available for testing algorithms, but not
for purposes of rule compliance or
validation.
2. Statutory Basis
NASDAQ believes that its proposal is
consistent with Section 6(b) of the Act 7
5 Nasdaq historical data will be available on a
rolling T+1 through six months basis. Only OUCH
order entry will be available in the initial launch.
6 The hand-off fee includes either a 1Gb or 10Gb
switch port and a cross connect to the NTF. NTF
Subscribers also pay a one-time installation fee of
$1,000 per handoff.
7 15 U.S.C. 78f(b).
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
61673
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 by offering this product without
charge at this time, NTF subscribers will
have the opportunity to test the product
and utilize the benefits the product
offers. The product will assist NTF
subscribers to protect investors and the
public interest by utilizing the
simulations to increase the safety and
security of the market by mitigating
aberrant trading behavior. Customers
will be able to mitigate the risk of
aberrant or potentially destabilizing
behaviors, such as inadvertent
spamming or other repetitive behaviors,
or excessive risk in open orders. The
Algo Test Facility allows customers to
observe, correct, and test a large range
of potential unintended behaviors of
their algorithmic strategies before
committing real capital.
NASDAQ believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,9 in
general, and with Sections 6(b)(4) and
6(b)(5) of the Act,10 in particular, in that
it provides for the equitable allocation
of reasonable dues, fees and other
charges among members and issuers and
other persons using any facility or
system which NASDAQ operates or
controls, and is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
This proposal is consistent with an
equitable allocation of fees and is not
unfairly discriminatory because it offers
NTF Subscribers a sophisticated equity
market simulation environment based
on a detailed historical database of
NASDAQ market data. Customers are
offered a safe environment to rigorously
test and calibrate their algorithmic
strategies by replaying and interacting
with real historical market data. Also,
the proposal is consistent with an
equitable allocation of fees and is not
unfairly discriminatory because the
Exchange operates in a highly
competitive market in which exchanges
offer various connectivity services as a
means to facilitate the trading activities
of customers.
The Exchange intends to offer this
product free of charge at this time to
NTF Subscribers at this time, so that
NTF Subscribers have the opportunity
8 15
U.S.C. 78f(b)(5).
U.S.C. 78f.
10 15 U.S.C. 78f(b)(4) and (5).
9 15
E:\FR\FM\14OCN1.SGM
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61674
Federal Register / Vol. 79, No. 198 / Tuesday, October 14, 2014 / Notices
to utilize the Algo Test Facility at no
cost in addition to the current NTF
Subscription fees set forth in Rule
7030(d)(1)(C). Moreover, the Exchange’s
fees for this service are equitably
allocated and non-discriminatory in that
all NTF Subscribers will receive the
service free of cost. Non-NTF
Subscribers would be required to
become NTF Subscribers and incur the
fees borne by these customers today in
order to receive the Algo Test Facility
services at no additional cost.
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.11 The Exchange does not
intend to assess fees to NTF Subscribers
at this time to utilize the Algo Test
Facility. While non-NTF Subscribers
would be required to become NTF
Subscribers in order to receive this
service, the Exchange does not believe
this requirement imposes an undue
burden on competition because NTF
Subscribers today pay costs for the
service they receive and the hand-offs
are necessary for use of the Algo Test
Facility. All customers are being treated
in the same manner and the Exchange
is offering the Algo Test Facility for free
to those NTF Subscribers incurring costs
today. Also, while there is a limit on the
number simulations per day for this
product, this limitation on the number
of simulations applies equally to all
users per day. Therefore, the Exchange
believes that the proposed rule change
enhances, rather than burdens,
competition by providing customers an
opportunity to utilize the product for
free.
mstockstill on DSK4VPTVN1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(ii) of the Act 12 and
subparagraph (f)(6) of Rule 19b–4
thereunder.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved. The
Exchange has provided the Commission
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.
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:
VerDate Sep<11>2014
16:59 Oct 10, 2014
Jkt 235001
[FR Doc. 2014–24304 Filed 10–10–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–73311; File No. SR–Phlx–
2014–65]
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2014–097. 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 (https://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
October 7, 2014.
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Rule 705 (Fidelity Bonds)
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
September 25, 2014, NASDAQ OMX
PHLX LLC (‘‘Phlx’’ 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to delete
certain extraneous language from
Exchange Rule 705 to amend an
inadvertent error in the rule text.
14 17
U.S.C. 78s(b)(3)(a)(ii).
13 17 CFR 240.19b–4(f)(6).
U.S.C. 78f(b)(8).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2014–097 on the subject line.
12 15
11 15
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2014–097 and should be
submitted on or before November 4,
2014.
PO 00000
Frm 00079
Fmt 4703
Sfmt 4703
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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]]>Agencies
[Federal Register Volume 79, Number 198 (Tuesday, October 14, 2014)]
[Notices]
[Pages 61672-61674]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-24304]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73315; File No. SR-NASDAQ-2014-097]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Algo Test Facility
October 7, 2014.
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 October 2, 2014, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by NASDAQ.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ proposes to offer a new testing environment, The NASDAQ OMX
Algo Test Facility (``Algo Test Facility'').
The text of the proposed rule change is available on the Exchange's
Web site at https://www.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
NASDAQ is proposing to amend NASDAQ Rule 7030 entitled ``Other
Services'' to offer NASDAQ Testing Facility (NTF) \3\ subscribers
(``Subscriber'') a new complement to the existing NTF. The Algo Test
Facility is a sophisticated equity market simulation environment based
on a detailed historical database which includes NASDAQ display orders
and trades. During a simulation, Algo Test Facility customers are able
to use their existing trading infrastructure to interact and trade
against this virtualized Nasdaq historical market. By providing a
historically accurate market
[[Page 61673]]
simulation, the Algo Test Facility helps increase the safety and
security of the market by mitigating aberrant trading behavior.
---------------------------------------------------------------------------
\3\ The NASDAQ Testing Facilities provides firms with the
ability to test their automated systems that integrate with Nasdaq
services in a virtual trading environment. This service supplies
firms with multiple venues to test upcoming Nasdaq releases and
product enhancements. In addition, firms may use the NTF to test
their new software development prior to implementation.
---------------------------------------------------------------------------
The Algo Test Facility provides electronic trading customers with:
(i) A safe environment to rigorously test and calibrate their
algorithmic strategies by replaying and interacting with real
historical market data; (ii) significantly higher accuracy and
determinism on the outcomes of individual orders versus conventional
paper-trading systems, which are forced to make simple probabilistic
assumptions about fill rates because they do not replicate and replay
the market microstructure; (iii) a re-creation of the actual market's
microstructure and real-world trading conditions, providing accurate
views of adverse selection, time priority and fills versus misses; (iv)
support for order entry allowing customers to interact via OUCH \4\
protocols; and (v) interaction of customer activity with the actual
historic orders of other market participants at the microstructure
level.
---------------------------------------------------------------------------
\4\ The Exchange plans to expand to other order entry protocols
and order types and include latencies and intercolo latencies in
future enhancements.
---------------------------------------------------------------------------
The Algo Test Facility allows customers to prototype, backtest, and
calibrate their strategies against a variety of different kinds of
real-world market conditions and against real-world market participants
and competition. The Algo Test Facility allows customers to observe,
correct, and test a large range of potential unintended behaviors of
their algorithmic strategies before committing real capital or
impacting the Exchange and other market participants. Also, customers
will be able to mitigate the risk of aberrant or potentially
destabilizing behaviors, such as inadvertent spamming or other
repetitive behaviors, or excessive risk in open orders.
Customers would connect via their existing trading infrastructure,
including risk systems, OMS, and feed handlers currently housed in the
NASDAQ OMX Data Center in Carteret, New Jersey. The Algo Testing
Facility will allow up to a certain number of simulations to be run for
all users to the Algo Test Facility per day. While the Algo Test
Facility will be available to all NTF subscribers, the capacity of
simulations is limited to a certain number of simulations per day,
which is subject to change. The Algo Test Facility will be available on
a first-come first-serve basis. This limitation will apply equally to
all users and may increase depending on customer interest. The Exchange
intends to evaluate the capacity as the product is utilized.
Customers consume market data in a format that is similar to ITCH
from the Algo Test Facility and send their orders to the Algo Test
Facility in response. Delays on the customer side are based uniquely on
the customers' actual production trading infrastructure and its ability
to keep up with the Algo Test Facility. Customer orders interact with
the actual historical order books. Both queue priority and time
priority are preserved to the microsecond. For example, if a customer
lifts an offer in the order book 100 microseconds before a competitor
tried to lift that offer, the customer will get a fill and the
competitor will either consume the additional liquidity on the book or
form a new bid. Automated reports will allow customers to observe,
correct, and test a large range of potential unintended behaviors of
their algorithmic strategies before committing real capital or
impacting the Exchange and other market participants. Through new NTF
hand-offs in Carteret, customers will receive market data in a format
similar to NASDAQ ITCH market data and have the ability to execute
trades via the OUCH protocols.\5\
---------------------------------------------------------------------------
\5\ Nasdaq historical data will be available on a rolling T+1
through six months basis. Only OUCH order entry will be available in
the initial launch.
---------------------------------------------------------------------------
Customers desiring to utilize the Algo Test Facility would be
required to be NTF Subscribers to access this environment through NTF
hand-offs in Carteret. Currently, NTF Subscribers with connectivity to
Carteret are assessed a fee of $1,000 per hand-off, per month for
connection to the NTF.\6\ The fees related to the NTF in Rule 7030 will
continue to be assessed to current NTF Subscribers. The Exchange
intends to not assess any other fees to NTF Subscribers for use of the
Algo Test Facility at this time. The Exchange will file a proposed rule
change with the Commission prior to commencing any additional pricing
specifically for this product at a later time.
---------------------------------------------------------------------------
\6\ The hand-off fee includes either a 1Gb or 10Gb switch port
and a cross connect to the NTF. NTF Subscribers also pay a one-time
installation fee of $1,000 per handoff.
---------------------------------------------------------------------------
Currently, the NTF allows users to test connectivity to the
Exchange. As discussed, the Algo Test Facility is a complement to the
NTF, and will be available for testing algorithms, but not for purposes
of rule compliance or validation.
2. Statutory Basis
NASDAQ 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 by offering this product without charge at
this time, NTF subscribers will have the opportunity to test the
product and utilize the benefits the product offers. The product will
assist NTF subscribers to protect investors and the public interest by
utilizing the simulations to increase the safety and security of the
market by mitigating aberrant trading behavior. Customers will be able
to mitigate the risk of aberrant or potentially destabilizing
behaviors, such as inadvertent spamming or other repetitive behaviors,
or excessive risk in open orders. The Algo Test Facility allows
customers to observe, correct, and test a large range of potential
unintended behaviors of their algorithmic strategies before committing
real capital.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\9\ in general, and with
Sections 6(b)(4) and 6(b)(5) of the Act,\10\ in particular, in that it
provides for the equitable allocation of reasonable dues, fees and
other charges among members and issuers and other persons using any
facility or system which NASDAQ operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. This proposal is consistent with an equitable
allocation of fees and is not unfairly discriminatory because it offers
NTF Subscribers a sophisticated equity market simulation environment
based on a detailed historical database of NASDAQ market data.
Customers are offered a safe environment to rigorously test and
calibrate their algorithmic strategies by replaying and interacting
with real historical market data. Also, the proposal is consistent with
an equitable allocation of fees and is not unfairly discriminatory
because the Exchange operates in a highly competitive market in which
exchanges offer various connectivity services as a means to facilitate
the trading activities of customers.
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\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange intends to offer this product free of charge at this
time to NTF Subscribers at this time, so that NTF Subscribers have the
opportunity
[[Page 61674]]
to utilize the Algo Test Facility at no cost in addition to the current
NTF Subscription fees set forth in Rule 7030(d)(1)(C). Moreover, the
Exchange's fees for this service are equitably allocated and non-
discriminatory in that all NTF Subscribers will receive the service
free of cost. Non-NTF Subscribers would be required to become NTF
Subscribers and incur the fees borne by these customers today in order
to receive the Algo Test Facility services at no additional cost.
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.\11\
The Exchange does not intend to assess fees to NTF Subscribers at this
time to utilize the Algo Test Facility. While non-NTF Subscribers would
be required to become NTF Subscribers in order to receive this service,
the Exchange does not believe this requirement imposes an undue burden
on competition because NTF Subscribers today pay costs for the service
they receive and the hand-offs are necessary for use of the Algo Test
Facility. All customers are being treated in the same manner and the
Exchange is offering the Algo Test Facility for free to those NTF
Subscribers incurring costs today. Also, while there is a limit on the
number simulations per day for this product, this limitation on the
number of simulations applies equally to all users per day. Therefore,
the Exchange believes that the proposed rule change enhances, rather
than burdens, competition by providing customers an opportunity to
utilize the product for free.
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\11\ 15 U.S.C. 78f(b)(8).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(a)(ii).
\13\ 17 CFR 240.19b-4(f)(6).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved. The Exchange has
provided the Commission 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.
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 (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2014-097 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2014-097. 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 (https://www.sec.gov/rules/sro.shtml.) Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2014-097 and should
be submitted on or before November 4, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-24304 Filed 10-10-14; 8:45 am]
BILLING CODE 8011-01-P
