Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify NASDAQ's Optional Anti-Internalization Functionality, 52994-52995 [2013-20774]
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52994
Federal Register / Vol. 78, No. 166 / Tuesday, August 27, 2013 / Notices
All submissions should refer to File
Number SR–Phlx–2013–76. 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 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 offices 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–Phlx–
2013–76, and should be submitted on or
before September 17, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–20775 Filed 8–26–13; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–70241; File No. SR–
NASDAQ–2013–109]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify
NASDAQ’s Optional AntiInternalization Functionality
tkelley on DSK3SPTVN1PROD with NOTICES
August 21, 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 August
16, 2013, The NASDAQ Stock Market
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
15:54 Aug 26, 2013
I. Self-Regulatory Organization’s
Statement of the Terms of the Substance
of the Proposed Rule Change
NASDAQ proposes to modify
NASDAQ’s optional anti-internalization
functionality.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://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,
NASDAQ 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.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
VerDate Mar<15>2010
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 the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
Jkt 229001
NASDAQ is proposing to modify its
voluntary anti-internalization
functionality to provide an additional
option under that functionality. In
addition, the proposed rule change
contains certain clarifications to the text
of the rule. Anti-internalization
functionality is designed to assist
market participants in complying with
certain rules and regulations of the
Employee Retirement Income Security
Act (‘‘ERISA’’) that preclude and/or
limit broker-dealers managing accounts
governed by ERISA from trading as
principal with orders generated for
those accounts. The functionality can
also assist market participants in
avoiding execution fees that may result
from the interaction of executable buy
and sell trading interest from the same
firm. NASDAQ notes that use of the
functionality does not relieve or
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
otherwise modify the duty of best
execution owed to orders received from
public customers. As such, market
participants using anti-internalization
functionality will need to take
appropriate steps to ensure that public
customer orders that do not execute
because of the use of anti-internalization
functionality ultimately receive the
same execution price (or better) they
would have originally obtained if
execution of the order was not inhibited
by the functionality.
Currently, market participants may
apply anti-internalization logic to all
quotes/orders entered through a
particular MPID, or to all orders entered
through a particular order entry port, to
which a unique group identification
modifier is then appended. In other
words, the logic may be applied on an
MPID-by-MPID, or on a port-by-port
basis.3 Currently, two forms of antiinternalization logic may be applied: (i)
if quotes/orders are equivalent in size,
both quotes/orders will be cancelled, or
if they are not equivalent in size, the
smaller will be cancelled and the size of
the larger will be reduced by the size of
the smaller; or (ii) regardless of the size
of the quotes/orders, the oldest quote/
order will be cancelled in full. The
applicable logic may be applied to an
entire MPID, or alternatively, different
logic may be applied to different order
entry ports under a particular MPID.4
In response to member input, the
proposed rule change will add an
additional form of anti-internalization
logic that a market participant could
choose to apply, under which the most
recent quote/order would be cancelled.
As with the two existing forms of antiinternalization logic, the logic could be
applied to an entire MPID, or to selected
order entry ports under a particular
MPID.5 NASDAQ believes that the
change will provide members with an
additional tool for managing the book of
3 In the proposed rule change that introduced the
ability to assign a group identification modifier
with respect to anti-internalization processing,
NASDAQ stated that the modifier may be assigned
‘‘at the port level.’’ Securities Exchange Act Release
No. 65868 (December 2, 2011), 76 FR 76795
(December 8, 2011) (SR–NASDAQ–2011–158).
However, this level of specificity was not included
in the text of Rule 4757. In addition, although the
rule indicates that designation of functionality at
the port level is an option available to the market
participant, the rule does not make it clear that in
order to make use of these options, market
participants must use NASDAQ’s OUCH order entry
protocol. Thus, the proposed rule change also adds
additional specificity to the rule text with respect
to these aspects of the anti-internalization
functionality.
4 With respect to this functionality also,
participants wishing to make designations on the
order port level must use the OUCH order entry
protocol.
5 Id.
E:\FR\FM\27AUN1.SGM
27AUN1
Federal Register / Vol. 78, No. 166 / Tuesday, August 27, 2013 / Notices
orders that they submit to NASDAQ and
the associated execution costs.
2. Statutory Basis
NASDAQ believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,6 in
general, and with Section 6(b)(5) of the
Act 7 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. Specifically, NASDAQ
believes that the change, which is
responsive to member input, will
facilitate transactions in securities and
perfect the mechanism of a free and
open market by providing members
with additional optional functionality
that may assist them with managing the
book of orders that they submit to
NASDAQ and the associated execution
costs.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASDAQ 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.
Specifically, by offering market
participants additional options with
regard to preventing inadvertent
internalization of orders submitted to
NASDAQ, the change has the potential
to enhance NASDAQ’s competitiveness
with respect to other trading venues,
thereby promoting greater competition.
Moreover, the change does not burden
competition in that its use is optional
and provided at no additional cost to
members.
tkelley on DSK3SPTVN1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor 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 8 and
subparagraph (f)(6) of Rule 19b–4
thereunder.9 At any time within 60 days
of the filing of the proposed rule change,
the Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
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–2013–109 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–2013–109. 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 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 offices 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–2013–109, and should be
submitted on or before September 17,
2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–20774 Filed 8–26–13; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
Senior Executive Service: Performance
Review Board Members
U. S. Small Business
Administration.
AGENCY:
Notice of Members for the FY
2014 Performance Review Board.
ACTION:
Title 5 U.S.C. 4314(c)(4)
requires each agency to publish
notification of the appointment of
individuals who may serve as members
of that Agency’s Performance Review
Board (PRB). The following individuals
have been designated to serve on the FY
2014 Performance Review Board for the
U.S. Small Business Administration.
SUMMARY:
1. Robert Hill, (Chair), Associate
Administrator for Field Operations
2. Michele Chang, Deputy Chief of Staff
3. Paul Christy, Chief Operating Officer
4. Nicholas Coutsos, Assistant
Administrator, Congressional and
Legislative Affairs
5. John Klein, Assistant General Counsel
for Procurement
6. John Miller, Director, Financial
Program Operations, Office of
Capital Access
7. Judith Roussel, Director of
Government Contracting
Karen G. Mills,
Administrator.
[FR Doc. 2013–20859 Filed 8–26–13; 8:45 am]
BILLING CODE P
6 15
U.S.C. 78f.
7 15 U.S.C. 78f(b)(5).
VerDate Mar<15>2010
15:54 Aug 26, 2013
U.S.C. 78s(b)(3)(a)(ii).
9 17 CFR 240.19b–4(f)(6).
8 15
Jkt 229001
PO 00000
Frm 00100
Fmt 4703
Sfmt 9990
52995
10 17
E:\FR\FM\27AUN1.SGM
CFR 200.30–3(a)(12).
27AUN1
]]>Agencies
[Federal Register Volume 78, Number 166 (Tuesday, August 27, 2013)]
[Notices]
[Pages 52994-52995]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-20774]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70241; File No. SR-NASDAQ-2013-109]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify NASDAQ's Optional Anti-Internalization Functionality
August 21, 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 August 16, 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, II, and III 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change
NASDAQ proposes to modify NASDAQ's optional anti-internalization
functionality.
The text of the proposed rule change is available on the Exchange's
Web site at https://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, NASDAQ 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.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ is proposing to modify its voluntary anti-internalization
functionality to provide an additional option under that functionality.
In addition, the proposed rule change contains certain clarifications
to the text of the rule. Anti-internalization functionality is designed
to assist market participants in complying with certain rules and
regulations of the Employee Retirement Income Security Act (``ERISA'')
that preclude and/or limit broker-dealers managing accounts governed by
ERISA from trading as principal with orders generated for those
accounts. The functionality can also assist market participants in
avoiding execution fees that may result from the interaction of
executable buy and sell trading interest from the same firm. NASDAQ
notes that use of the functionality does not relieve or otherwise
modify the duty of best execution owed to orders received from public
customers. As such, market participants using anti-internalization
functionality will need to take appropriate steps to ensure that public
customer orders that do not execute because of the use of anti-
internalization functionality ultimately receive the same execution
price (or better) they would have originally obtained if execution of
the order was not inhibited by the functionality.
Currently, market participants may apply anti-internalization logic
to all quotes/orders entered through a particular MPID, or to all
orders entered through a particular order entry port, to which a unique
group identification modifier is then appended. In other words, the
logic may be applied on an MPID-by-MPID, or on a port-by-port basis.\3\
Currently, two forms of anti-internalization logic may be applied: (i)
if quotes/orders are equivalent in size, both quotes/orders will be
cancelled, or if they are not equivalent in size, the smaller will be
cancelled and the size of the larger will be reduced by the size of the
smaller; or (ii) regardless of the size of the quotes/orders, the
oldest quote/order will be cancelled in full. The applicable logic may
be applied to an entire MPID, or alternatively, different logic may be
applied to different order entry ports under a particular MPID.\4\
---------------------------------------------------------------------------
\3\ In the proposed rule change that introduced the ability to
assign a group identification modifier with respect to anti-
internalization processing, NASDAQ stated that the modifier may be
assigned ``at the port level.'' Securities Exchange Act Release No.
65868 (December 2, 2011), 76 FR 76795 (December 8, 2011) (SR-NASDAQ-
2011-158). However, this level of specificity was not included in
the text of Rule 4757. In addition, although the rule indicates that
designation of functionality at the port level is an option
available to the market participant, the rule does not make it clear
that in order to make use of these options, market participants must
use NASDAQ's OUCH order entry protocol. Thus, the proposed rule
change also adds additional specificity to the rule text with
respect to these aspects of the anti-internalization functionality.
\4\ With respect to this functionality also, participants
wishing to make designations on the order port level must use the
OUCH order entry protocol.
---------------------------------------------------------------------------
In response to member input, the proposed rule change will add an
additional form of anti-internalization logic that a market participant
could choose to apply, under which the most recent quote/order would be
cancelled. As with the two existing forms of anti-internalization
logic, the logic could be applied to an entire MPID, or to selected
order entry ports under a particular MPID.\5\ NASDAQ believes that the
change will provide members with an additional tool for managing the
book of
[[Page 52995]]
orders that they submit to NASDAQ and the associated execution costs.
---------------------------------------------------------------------------
\5\ Id.
---------------------------------------------------------------------------
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\6\ in general, and with Section
6(b)(5) of the Act \7\ 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. Specifically, NASDAQ
believes that the change, which is responsive to member input, will
facilitate transactions in securities and perfect the mechanism of a
free and open market by providing members with additional optional
functionality that may assist them with managing the book of orders
that they submit to NASDAQ and the associated execution costs.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f.
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ 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. Specifically, by
offering market participants additional options with regard to
preventing inadvertent internalization of orders submitted to NASDAQ,
the change has the potential to enhance NASDAQ's competitiveness with
respect to other trading venues, thereby promoting greater competition.
Moreover, the change does not burden competition in that its use is
optional and provided at no additional cost to members.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor 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 \8\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\9\ At any time within 60
days of the filing of the proposed rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(a)(ii).
\9\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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-2013-109 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-2013-109. 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 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
offices 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-2013-109, and should be submitted on or before September 17,
2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-20774 Filed 8-26-13; 8:45 am]
BILLING CODE 8011-01-P
