Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Add Routing Functionality to the NASDAQ System, 9957-9959 [2013-03098]
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Federal Register / Vol. 78, No. 29 / Tuesday, February 12, 2013 / Notices
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 such
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
publicly available. All submissions
should refer to File Number SR–BATS–
2013–009 and should be submitted on
or before March 5, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–03186 Filed 2–11–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–68839; File No. SR–
NASDAQ–2013–014]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Add
Routing Functionality to the NASDAQ
System
tkelley on DSK3SPTVN1PROD with NOTICES
February 6, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on January
23, 2013, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II below, which Items
have been prepared by Nasdaq. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Nasdaq proposes to amend Rule 4758,
Order Routing, to add routing
functionality to the NASDAQ System
(‘‘System’’).
The text of the proposed rule change
is below. Proposed new language is
italicized.
*
*
*
*
*
*
*
Equity Rules
*
*
*
4750. Execution Services
*
*
*
*
*
4758. Order Routing
(a) Order Routing Process
(1) No change.
(A) No change.
(i)–(xi) No change.
(xii) QDRK is a routing option under which
orders check the System for available shares
and simultaneously route the remaining
shares to destinations on the System routing
table that are not posting Protected
Quotations within the meaning of Regulation
NMS. If shares remain un-executed after
routing, they are posted on the book. Once
on the book, should the order subsequently
be locked or crossed by another market
center, the System will not route the order to
the locking or crossing market center.
(xiii) QCST is a routing option under which
orders check the System for available shares
and simultaneously route the remaining
shares to destinations on the System routing
table that are not posting Protected
Quotations within the meaning of Regulation
NMS and to certain, but not all, exchanges.
If shares remain un-executed after routing,
they are posted on the book. Once on the
book, should the order subsequently be
locked or crossed by another market center,
the System will not route the order to the
locking or crossing market center.
Orders that do not check the System for
available shares prior to routing may not be
sent to a facility of an exchange that is an
affiliate of Nasdaq, except for orders that are
sent to the NASDAQ OMX BX Equities
Market or to the NASDAQ OMX PSX facility
of NASDAQ OMX PHLX.
(B) No change.
(b)–(d) No change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change. 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,
PO 00000
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9957
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 purpose of the proposed rule
change is to attract additional business
to and enhance the functionality offered
by Nasdaq by providing additional
optional outbound routing services.
Most equities exchanges today provide
routing services and the Exchange offers
a variety of routing strategies. Currently,
Rule 4758, Order Routing, describes the
order routing process and states that all
routing shall be in compliance with
Rule 611 of Regulation NMS under the
Act.3 Furthermore, it enumerates
Nasdaq’s routing strategies: DOT, DOTI,
STGY, SKNY, SCAN, SKIP, TFTY,
MOPP, SAVE, SOLV, LIST and CART.
Proposed Rule 4758(a)(1)(A)(xii) will
provide that QDRK is a routing option
under which orders check the System
for available shares and simultaneously
route to certain destinations on the
System routing table that are not posting
Protected Quotations within the
meaning of Regulation NMS (i.e. ‘‘dark
venues’’ or ‘‘dark pools’’). If shares
remain un-executed after routing, they
are posted on the book. Once on the
book, should the order subsequently be
locked or crossed by another market
center, the System will not route the
order to the locking or crossing market
center. This strategy is intended to
attract market participants that seek to
execute on Nasdaq or on dark pools
without executing on another exchange.
Members may seek to execute in this
manner to interact with resting liquidity
in addition to that available on Nasdaq,
while also minimizing market impact
and transaction fees.
For example, if the National Best Bid/
Offer (‘‘NBBO’’) is $10.00–$10.01, and
Nasdaq, DarkVenueA and ARCA each
offer 100 shares at $10.01, a QDRK order
to buy 1000 shares at $10.01 IOC will
be handled as follows: 100 shares for
execution on Nasdaq and 100 shares
routed to DarkVenue A simultaneously
at $10.01; the remaining 800 shares are
not routed and not executed, and
cancelled back to the entering
participant because it was an IOC order.
The order did not route to ARCA
because it is not a dark venue. As a
second example, if the NBBO is $10.00–
$10.01, and Nasdaq, DarkVenueA and
ARCA each offer 100 shares at $10.01,
a QDRK order to buy 1000 shares at
3 17
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CFR 242.611.
12FEN1
tkelley on DSK3SPTVN1PROD with NOTICES
9958
Federal Register / Vol. 78, No. 29 / Tuesday, February 12, 2013 / Notices
$10.01 DAY will be handled as follows:
100 shares for execution on Nasdaq and
100 shares routed to DarkVenue A
simultaneously at $10.01; the remaining
800 shares are posted on the Nasdaq
book (because it is a DAY order). Once
again, the order did not route to ARCA
because it is not a dark venue.
Proposed Rule 4758(a)(1)(A)(xiii) will
provide that QCST is a routing option
under which orders check the System
for available shares and simultaneously
route to select dark venues and to
certain low cost exchanges. If shares
remain un-executed after routing, they
are posted on the book. Once on the
book, should the order subsequently be
locked or crossed by another market
center, the System will not route the
order to the locking or crossing market
center. This strategy is also intended to
attract market participants who seek to
save on trading fees by only executing
on the Exchange, on dark venues, or on
no cost and low cost exchanges.
For example, if the NBBO is $10.00–
$10.01, and Nasdaq, DarkVenueA and
ARCA each offer 100 shares at $10.01,
a QCST order to buy 1000 shares at
$10.01 DAY will be handled as follows:
100 shares for execution on Nasdaq and
100 shares routed to DarkVenue A
simultaneously at $10.01; the remaining
800 shares are posted on the Nasdaq
book (because it is a DAY order). The
order did not route to ARCA because it
is neither a dark venue nor a no cost or
low cost exchange. As a second
example, if the NBBO is $9.90–$10.00,
with BYX offering 100 shares at $10.00
and Nasdaq, DarkVenueA and ARCA
each offer 100 shares at $10.01, a QCST
order to buy 1000 shares at $10.01 DAY
will be handled as follows: 100 shares
routed to BYX at $10.00, 100 shares for
execution on Nasdaq and 100 shares
routed to DarkVenue A simultaneously
at $10.01; the remaining shares are
posted on the Nasdaq book (because it
is a DAY order). The order did not route
to ARCA because it is neither a dark
venue nor a no cost or low cost
exchange.
In all cases, these routing strategies
are designed to comply with SEC Rule
611 and the other provisions of
Regulation NMS.4 Accordingly, both
QDRK and QCST will honor Protected
Quotations within the meaning of
Regulation NMS and will not route to
any market centers included in their
respective routing table at a price
inferior to an available Protected
Quotation. For example, if the NBBO is
$9.90–$10.00, with NYSE offering 100
shares at $10.00 and Nasdaq,
DarkVenueA and ARCA each offering
100 shares at $10.01, a QCST order to
buy 1000 shares at $10.01 DAY will not
be routed because NYSE’s Protected
Quotation is not included in the routing
table, by definition, for QCST.
The Exchange will notify its
membership of the implementation
date, which the Exchange expects will
be on or about the 30th day after this
filing.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,5
in general, and with Sections 6(b)(5) of
the Act,6 in particular, in that the
proposal 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 mechanism of a free and
open market and a national market
system, and, in general, to protect
investors and the public interest,
because Nasdaq will be better able to
serve its customers and compete with
other markets by offering additional
optional routing services. Specifically,
the two new routing strategies will
provide market participants with greater
flexibility in routing orders without
developing order routing strategies on
their own.
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.
Nasdaq competes with many exchanges
and other execution venues for the
execution of orders in equities. Market
participants can choose where to send
their orders. Accordingly, the proposal
is pro-competitive in that it affords the
Exchange the opportunity to compete
with other exchanges in terms of
offering new routing strategies.
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.
5 15
4 17
CFR 242.611.
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U.S.C. 78f.
U.S.C. 78f(b)(5).
Frm 00076
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 7 and
subparagraph (f)(6) of Rule 19b–4
thereunder.8
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. 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 rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2013–014 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2013–014. 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
7 15
8 17
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E:\FR\FM\12FEN1.SGM
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
12FEN1
Federal Register / Vol. 78, No. 29 / Tuesday, February 12, 2013 / Notices
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–2013–014 and should be
submitted on orbefore March 5, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–03098 Filed 2–11–13; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
The Exchange is proposing to amend
its complex order rules. The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.c2exchange.com/Legal/
RuleFilings.aspx), at the Exchange’s
Office of the Secretary 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.
1. Purpose
[Release No. 34–68843; File No. SR–C2–
2013–003]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Related to the Opening of the
Complex Order Book
February 6, 2013.
tkelley on DSK3SPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
28, 2013, C2 Options Exchange,
Incorporated (the ‘‘Exchange’’ or ‘‘C2’’)
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
Exchange has designated the proposal as
a ‘‘non-controversial’’ proposed rule
change pursuant to Section 19(b)(3)(A)
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
of the Act 3 and Rule 19b–4(f)(6)
thereunder, which renders it effective
upon filing with the Commission.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
The purpose of this proposed rule
change is to include a description in
Rule 6.13 of the manner in which
complex orders are currently processed
through the Exchange’s complex order
book (‘‘COB’’) when the COB opens for
trading. Currently the rule does not
include this level of detail, so the
Exchange is proposing to include this
information within the rule to provide
additional clarity on the current
operation of the COB in response to
Trading Permit Holder inquiries about
its operation. The Exchange notes that it
is simply including additional detail in
its rules on the existing process when
the COB opens. No changes to the
process are being contemplated by this
rule change filing.
In particular, the proposed rule
change will provide that complex
orders, including stock-option orders,
do not participate in opening rotations
conducted pursuant to Rule 6.11 for
9 17
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U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
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9959
individual option series.5 When the last
of the individual component option
series legs that make up a complex order
strategy has opened (and, in the case of
a stock-option strategy, when the
underlying stock has opened), the COB
for that strategy will then open for
trading. The COB for a given complex
order strategy will open with no trade,6
except as follows:
First, the COB will open with a trade
against the individual component
option series legs if there are complex
orders on only one side of the COB that
are marketable against the opposite side
of the derived net market. The resulting
execution will occur at the derived net
market price to the extent marketable.
Any remaining balance would be
processed as it would on an intra-day
basis as set forth in Rule 6.13 (including
being subject to the applicable complex
order priority and price check parameter
provisions set forth in Rule 6.13). This
provision for ‘‘legging’’ against the
individual series legs is not applicable
to stock-option order strategies. (Stockoption orders processed through COB
generally only trade against other stockoption orders. Stock-option orders
processed through COB generally do not
trade against individual component
option series legs, except in one limited
circumstance for market orders at the
conclusion of a complex order RFQ
auction (‘‘COA’’).7)
For example, if the derived net market
for a given complex order strategy is
$1.00–$1.20 for 100 units and the only
interest in the COB is a complex order
to buy the strategy at a net debit price
5 The Exchange notes that, under the current
provisions of Rule 6.11, the Exchange could
determine whether to designate various complex
order types as eligible for the Rule 6.11 opening
process on a class-by-class basis (just as it would
for any other order type). See Rule 6.11(a)(1). To
date, the Exchange has not determined to include
complex orders (including stock-option orders) in
the Rule 6.11 opening process (this process has
instead been limited to simple orders). With this
proposed rule change, SR–C2–2013–003, the
Exchange would no longer be permitted to
designate complex order (including stock-option
order) order types as eligible for the Rule 6.11
opening process. If, in the future, the Exchange
would desire to designate certain complex order
(including stock-option order) order types as being
eligible to participate in the Rule 6.11 opening
process, such a determination would be subject to
a separate rule change filing.
6 For example, the COB would move to an open
state with no trade if there are no complex orders
resting for the strategy or if there are complex
orders on only one side of the COB at a net price(s)
that does not touch or cross the derived net market.
The ‘‘derived net market’’ for a stock-option order
strategy will be calculated using the Exchange’s best
bid or offer in the individual option series leg(s)
and the NBBO in the stock leg. The ‘‘derived net
market’’ for any other complex order strategy will
be calculated using the Exchange’s best bid or offer
in the individual series legs.
7 See Rule 6.13.06.
E:\FR\FM\12FEN1.SGM
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]]>Agencies
[Federal Register Volume 78, Number 29 (Tuesday, February 12, 2013)]
[Notices]
[Pages 9957-9959]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-03098]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68839; File No. SR-NASDAQ-2013-014]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Add Routing Functionality to the NASDAQ System
February 6, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on January 23, 2013, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by 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 amend Rule 4758, Order Routing, to add routing
functionality to the NASDAQ System (``System'').
The text of the proposed rule change is below. Proposed new
language is italicized.
* * * * *
Equity Rules
* * * * *
4750. Execution Services
* * * * *
4758. Order Routing
(a) Order Routing Process
(1) No change.
(A) No change.
(i)-(xi) No change.
(xii) QDRK is a routing option under which orders check the
System for available shares and simultaneously route the remaining
shares to destinations on the System routing table that are not
posting Protected Quotations within the meaning of Regulation NMS.
If shares remain un-executed after routing, they are posted on the
book. Once on the book, should the order subsequently be locked or
crossed by another market center, the System will not route the
order to the locking or crossing market center.
(xiii) QCST is a routing option under which orders check the
System for available shares and simultaneously route the remaining
shares to destinations on the System routing table that are not
posting Protected Quotations within the meaning of Regulation NMS
and to certain, but not all, exchanges. If shares remain un-executed
after routing, they are posted on the book. Once on the book, should
the order subsequently be locked or crossed by another market
center, the System will not route the order to the locking or
crossing market center.
Orders that do not check the System for available shares prior
to routing may not be sent to a facility of an exchange that is an
affiliate of Nasdaq, except for orders that are sent to the NASDAQ
OMX BX Equities Market or to the NASDAQ OMX PSX facility of NASDAQ
OMX PHLX.
(B) No change.
(b)-(d) No change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change. 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 purpose of the proposed rule change is to attract additional
business to and enhance the functionality offered by Nasdaq by
providing additional optional outbound routing services. Most equities
exchanges today provide routing services and the Exchange offers a
variety of routing strategies. Currently, Rule 4758, Order Routing,
describes the order routing process and states that all routing shall
be in compliance with Rule 611 of Regulation NMS under the Act.\3\
Furthermore, it enumerates Nasdaq's routing strategies: DOT, DOTI,
STGY, SKNY, SCAN, SKIP, TFTY, MOPP, SAVE, SOLV, LIST and CART.
---------------------------------------------------------------------------
\3\ 17 CFR 242.611.
---------------------------------------------------------------------------
Proposed Rule 4758(a)(1)(A)(xii) will provide that QDRK is a
routing option under which orders check the System for available shares
and simultaneously route to certain destinations on the System routing
table that are not posting Protected Quotations within the meaning of
Regulation NMS (i.e. ``dark venues'' or ``dark pools''). If shares
remain un-executed after routing, they are posted on the book. Once on
the book, should the order subsequently be locked or crossed by another
market center, the System will not route the order to the locking or
crossing market center. This strategy is intended to attract market
participants that seek to execute on Nasdaq or on dark pools without
executing on another exchange. Members may seek to execute in this
manner to interact with resting liquidity in addition to that available
on Nasdaq, while also minimizing market impact and transaction fees.
For example, if the National Best Bid/Offer (``NBBO'') is $10.00-
$10.01, and Nasdaq, DarkVenueA and ARCA each offer 100 shares at
$10.01, a QDRK order to buy 1000 shares at $10.01 IOC will be handled
as follows: 100 shares for execution on Nasdaq and 100 shares routed to
DarkVenue A simultaneously at $10.01; the remaining 800 shares are not
routed and not executed, and cancelled back to the entering participant
because it was an IOC order. The order did not route to ARCA because it
is not a dark venue. As a second example, if the NBBO is $10.00-$10.01,
and Nasdaq, DarkVenueA and ARCA each offer 100 shares at $10.01, a QDRK
order to buy 1000 shares at
[[Page 9958]]
$10.01 DAY will be handled as follows: 100 shares for execution on
Nasdaq and 100 shares routed to DarkVenue A simultaneously at $10.01;
the remaining 800 shares are posted on the Nasdaq book (because it is a
DAY order). Once again, the order did not route to ARCA because it is
not a dark venue.
Proposed Rule 4758(a)(1)(A)(xiii) will provide that QCST is a
routing option under which orders check the System for available shares
and simultaneously route to select dark venues and to certain low cost
exchanges. If shares remain un-executed after routing, they are posted
on the book. Once on the book, should the order subsequently be locked
or crossed by another market center, the System will not route the
order to the locking or crossing market center. This strategy is also
intended to attract market participants who seek to save on trading
fees by only executing on the Exchange, on dark venues, or on no cost
and low cost exchanges.
For example, if the NBBO is $10.00-$10.01, and Nasdaq, DarkVenueA
and ARCA each offer 100 shares at $10.01, a QCST order to buy 1000
shares at $10.01 DAY will be handled as follows: 100 shares for
execution on Nasdaq and 100 shares routed to DarkVenue A simultaneously
at $10.01; the remaining 800 shares are posted on the Nasdaq book
(because it is a DAY order). The order did not route to ARCA because it
is neither a dark venue nor a no cost or low cost exchange. As a second
example, if the NBBO is $9.90-$10.00, with BYX offering 100 shares at
$10.00 and Nasdaq, DarkVenueA and ARCA each offer 100 shares at $10.01,
a QCST order to buy 1000 shares at $10.01 DAY will be handled as
follows: 100 shares routed to BYX at $10.00, 100 shares for execution
on Nasdaq and 100 shares routed to DarkVenue A simultaneously at
$10.01; the remaining shares are posted on the Nasdaq book (because it
is a DAY order). The order did not route to ARCA because it is neither
a dark venue nor a no cost or low cost exchange.
In all cases, these routing strategies are designed to comply with
SEC Rule 611 and the other provisions of Regulation NMS.\4\
Accordingly, both QDRK and QCST will honor Protected Quotations within
the meaning of Regulation NMS and will not route to any market centers
included in their respective routing table at a price inferior to an
available Protected Quotation. For example, if the NBBO is $9.90-
$10.00, with NYSE offering 100 shares at $10.00 and Nasdaq, DarkVenueA
and ARCA each offering 100 shares at $10.01, a QCST order to buy 1000
shares at $10.01 DAY will not be routed because NYSE's Protected
Quotation is not included in the routing table, by definition, for
QCST.
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\4\ 17 CFR 242.611.
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The Exchange will notify its membership of the implementation date,
which the Exchange expects will be on or about the 30th day after this
filing.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\5\ in general, and with
Sections 6(b)(5) of the Act,\6\ in particular, in that the proposal 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
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest, because
Nasdaq will be better able to serve its customers and compete with
other markets by offering additional optional routing services.
Specifically, the two new routing strategies will provide market
participants with greater flexibility in routing orders without
developing order routing strategies on their own.
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\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(5).
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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.
Nasdaq competes with many exchanges and other execution venues for the
execution of orders in equities. Market participants can choose where
to send their orders. Accordingly, the proposal is pro-competitive in
that it affords the Exchange the opportunity to compete with other
exchanges in terms of offering new routing strategies.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
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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. 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-2013-014 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2013-014.
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
[[Page 9959]]
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-2013-014 and should
be submitted on or before March 5, 2013.
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\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03098 Filed 2-11-13; 8:45 am]
BILLING CODE 8011-01-P
