Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to NOM Penny and Non-Penny Pilot Options, 75949-75952 [2013-29740]
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Federal Register / Vol. 78, No. 240 / Friday, December 13, 2013 / Notices
I. Background
Background: Section 3304(a)(9)(B), of
the Internal Revenue Code (IRC) of
1986, requires states to participate in an
arrangement for combining employment
and wages covered under the different
state laws for the purpose of
determining unemployed workers’
entitlement to unemployment
compensation. The Interstate
Arrangement for Combining
Employment and Wages for combined
wage claims (CWC), promulgated at 20
CFR 616, requires the prompt transfer of
all relevant and available employment
and wage data between states upon
request. The Benefit Payment
Promptness Standard, 20 CFR 640,
requires the prompt payment of
unemployment compensation including
benefits paid under the CWC
arrangement. The ETA 586 report
provides the ETA/Office of
Unemployment Insurance with
information necessary to measure the
scope and effect of the CWC program
and to monitor the performance of each
state in responding to wage transfer data
requests and the payment of benefits.
II. Review Focus
The Department is particularly
interested in comments which:
• Evaluate whether the proposed
collection of information is necessary
for the proper performance of the
functions of the agency, including
whether the information will have
practical utility;
• evaluate the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the
methodology and assumptions used;
• enhance the quality, utility, and
clarity of the information to be
collected; and
• minimize the burden of the
collection of information on those who
are to respond, including through the
use of appropriate automated,
electronic, mechanical, or other
technological collection techniques or
other forms of information technology,
e.g., permitting electronic submissions
of responses.
ehiers on DSK2VPTVN1PROD with NOTICES
III. Current Actions
This information is necessary in order
for ETA to analyze program
performance, know when corrective
action plans are needed, and to target
technical assistance resources. Without
this report, it would be impossible for
the ETA to identify claims and benefit
activity under the CWC program and
carry out the Secretary’s responsibility
for program oversight.
VerDate Mar<15>2010
13:32 Dec 12, 2013
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Type of Review: Extension Without
Revisions.
Title: Interstate Arrangement for
Combining Employment and Wages.
OMB Number: 1205–0029.
Affected Public: State Workforce
Agencies.
Estimated Total Annual Respondents:
53.
Estimated Total Annual Responses:
212.
Estimated Total Annual Burden
Hours: 848.
Total Estimated Annual Other Costs
Burden: $0.
Comments submitted in response to
this comment request will be
summarized and/or included in the
request for OMB approval of the ICR;
they will also become a matter of public
record.
Signed in Washington, DC, this 5th day of
December, 2013.
Eric M. Seleznow,
Acting Assistant Secretary for Employment
and Training, Labor.
[FR Doc. 2013–29743 Filed 12–12–13; 8:45 am]
75949
Options Market (‘‘NOM’’), NASDAQ’s
facility for executing and routing
standardized equity and index options.
Specifically, NOM proposes to amend
the NOM Market Maker 3 Non-Penny
Pilot Options 4 Fee for Removing
Liquidity and the NOM Market Maker
Rebate to Add Liquidity in Penny Pilot
Options.5
While the changes proposed herein
are effective upon filing, the Exchange
has designated that the amendments be
operative on December 2, 2013.
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. The text of
BILLING CODE 4510–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71028; File No. SR–
NASDAQ–2013–149]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
NOM Penny and Non-Penny Pilot
Options
December 9, 2013.
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 November
29, 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 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 modify Chapter
XV, entitled ‘‘Options Pricing,’’ at
Section 2 governing pricing for
NASDAQ members using the NASDAQ
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00040
Fmt 4703
Sfmt 4703
3 The term ‘‘NOM Market Maker’’ means a
Participant that has registered as a Market Maker on
NOM pursuant to Chapter VII, Section 2, and must
also remain in good standing pursuant to Chapter
VII, Section 4. In order to receive NOM Market
Maker pricing in all securities, the Participant must
be registered as a NOM Market Maker in at least one
security.
4 This would include options on Nasdaq-100
Index (‘‘NDX’’). For transactions in NDX, a
surcharge of $0.10 per contract will be added to the
Fee for Adding Liquidity and the Fee for Removing
Liquidity in Non-Penny Pilot Options, except for a
Customer who will not be assessed a surcharge.
5 The Penny Pilot was established in March 2008
and in October 2009 was expanded and extended
through December 31, 2013. See Securities
Exchange Act Release Nos. 57579 (March 28, 2008),
73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008–
026) (notice of filing and immediate effectiveness
establishing Penny Pilot); 60874 (October 23, 2009),
74 FR 56682 (November 2, 2009) (SR–NASDAQ–
2009–091) (notice of filing and immediate
effectiveness expanding and extending Penny
Pilot); 60965 (November 9, 2009), 74 FR 59292
(November 17, 2009) (SR–NASDAQ–2009–097)
(notice of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 61455
(February 1, 2010), 75 FR 6239 (February 8, 2010)
(SR–NASDAQ–2010–013) (notice of filing and
immediate effectiveness adding seventy-five classes
to Penny Pilot); 62029 (May 4, 2010), 75 FR 25895
(May 10, 2010) (SR–NASDAQ–2010–053) (notice of
filing and immediate effectiveness adding seventyfive classes to Penny Pilot); 65969 (December 15,
2011), 76 FR 79268 (December 21, 2011) (SR–
NASDAQ–2011–169) (notice of filing and
immediate effectiveness extension and replacement
of Penny Pilot); 67325 (June 29, 2012), 77 FR 40127
(July 6, 2012) (SR–NASDAQ–2012–075) (notice of
filing and immediate effectiveness and extension
and replacement of Penny Pilot through December
31, 2012); 68519 (December 21, 2012), 78 FR 136
(January 2, 2013) (SR–NASDAQ–2012–143) (notice
of filing and immediate effectiveness and extension
and replacement of Penny Pilot through June 30,
2013); and 69787 (June 18, 2013), 78 FR 37858 (June
24, 2013) (SR–NASDAQ–2013–082). See also NOM
Rules, Chapter VI, Section 5.
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these statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
NASDAQ proposes to modify Chapter
XV, entitled ‘‘Options Pricing,’’ at
Section 2(1) governing the rebates and
fees assessed for option orders entered
into NOM.
The Exchange proposes to increase
the NOM Market Maker Fee for
Removing Liquidity in Non-Penny Pilot
Monthly volume
Tier 1 ................
Tier 2 ................
Tier 3 ................
ehiers on DSK2VPTVN1PROD with NOTICES
Tier 4 ................
Rebate to add liquidity
Participant adds NOM Market Maker liquidity in Penny Pilot
Options of up to 29,999 contracts per day in a month.
Participant adds NOM Market Maker liquidity in Penny Pilot
Options of 30,000 to 59,999 contracts per day in a month.
Participant adds NOM Market Maker liquidity in Penny Pilot
Options of 60,000 to 79,999 contracts per day in a month.
Participant adds NOM Market Maker liquidity in Penny Pilot
Options of 80,000 or more contracts per day in a month.
The Exchange is proposing to amend
the qualification for NOM Market Maker
Penny Pilot rebate Tiers 1 through 4 to
provide that Participants may qualify for
each tier by adding NOM Market Maker
liquidity in Penny Pilot Options and/or
Non-Penny Pilot Options. The Exchange
would continue to pay the rebates for
each volume tier on transactions in
Penny Pilot Options. This amendment
would only impact a Participant’s
ability to qualify for a certain rebate tier.
The Exchange anticipates that this
amendment would provide an
opportunity for Participants to qualify
for higher rebate tiers for their NOM
Market Maker liquidity.
The Exchange is also proposing to add
a new Tier 5 rebate to the Penny Pilot
Rebates to Add Liquidity. The Exchange
proposes to pay $0.40 per contract to a
Participant that adds NOM Market
Maker liquidity of 40,000 or more
contracts per day in a month in Penny
Pilot Options and/or Non-Penny Pilot
Options and also qualifies for Tier 7 or
8 of the Customer and/or Professional
Rebate to Add Liquidity in Penny Pilot
Options. The Exchange believes the
opportunity to earn a higher rebate will
encourage Participants to direct a
greater amount of NOM Market Maker
liquidity to NOM.
The Exchange also proposes to
relocate certain text in the fee schedule.
The Exchange proposes to relocate the
following text: ‘‘# The NOM Market
Maker Rebate to Add Liquidity in Penny
Pilot Options will be paid as noted
below.’’ The Exchange would place the
text above the NOM Market Maker tiers
in the fee schedule for ease of reference.
VerDate Mar<15>2010
Options from $0.85 to $0.86 per
contract. The Exchange believes that
despite the increase to the Fee for
Removing Liquidity the Exchange
continues to offer competitive rates to
NOM Market Makers.
The Exchange proposes to amend the
NOM Market Maker Penny Pilot
Options Rebate to Add Liquidity tiers.
Today, the Exchange offers a four-tiered
Rebate to Add Liquidity in Penny Pilot
Options to NOM Market Makers as
follows:
13:32 Dec 12, 2013
Jkt 232001
$0.25.
$0.30.
$0.32.
$0.32 or $0.38 in the following symbols BAC, GLD, IWM,
QQQ and VXX or $0.40 in SPY.
2. Statutory Basis
NASDAQ believes that its proposal to
amend its Pricing Schedule is consistent
with Section 6(b) of the Act 6 in general,
and furthers the objectives of Section
6(b)(4) and (b)(5) of the Act 7 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.
The Exchange’s proposal to increase
the NOM Market Maker Fee for
Removing Liquidity from $0.85 to $0.86
per contract is reasonable because the
rate remains competitive with other
Non-Penny Pilot Fees for Removing
Liquidity. The increase also permits the
Exchange to support providing liquidity
rebates to Participants executing NOM
Market Maker orders.
The Exchange’s proposal to increase
the NOM Market Maker Fee for
Removing Liquidity from $0.85 to $0.86
per contract is equitable and not
unfairly discriminatory because the rate
remains competitive with other NonPenny Pilot Fees for Removing
Liquidity. NOM Market Makers would
continue to be assessed a lower fee as
compared to other non-Customer
Participants.8 NOM Market Makers have
obligations to the market and regulatory
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4), (5).
8 All other non-Customer market participants
(Professionals, Firms, Non-NOM Market Makers
and Broker-Dealers) would continue to be assessed
$0.89 per contract.
7 15
PO 00000
Frm 00041
Fmt 4703
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requirements,9 which normally do not
apply to other market participants. A
NOM Market Maker has an obligation to
make continuous markets, engage in
course of dealings reasonably calculated
to contribute to the maintenance of a
fair and orderly market, and not make
bids or offers or enter into transactions
that are inconsistent with a course of
dealings. Customers would continue to
be assessed the lowest fee of $0.82 per
contract. Customer order flow brings
unique benefits to the market which
benefits all market participants through
increased liquidity.
The Exchange’s proposal to amend
the qualifications for the NOM Market
Maker Rebates to Add Liquidity in
Penny Pilot Options is reasonable
because by providing Participants the
opportunity to add NOM Market Maker
Penny and/or Non-Penny Pilot Option
liquidity to qualify for a rebate tier
provides a greater opportunity to qualify
for higher rebate tiers. The Exchange
would continue to only pay rebates on
Penny Pilot volume. By incentivizing
Participants to select the Exchange as a
venue to post NOM Market Maker
liquidity will benefit market
9 Pursuant to Chapter VII (Market Participants),
Section 5 (Obligations of Market Makers), in
registering as a market maker, an Options
Participant commits himself to various obligations.
Transactions of a Market Maker in its market
making capacity must constitute a course of
dealings reasonably calculated to contribute to the
maintenance of a fair and orderly market, and
Market Makers should not make bids or offers or
enter into transactions that are inconsistent with
such course of dealings. Further, all Market Makers
are designated as specialists on NOM for all
purposes under the Act or rules thereunder. See
Chapter VII, Section 5.
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participants through increased order
interaction.
The Exchange’s proposal to amend
the qualifications for the NOM Market
Maker Rebates to Add Liquidity in
Penny Pilot Options is equitable and not
unfairly discriminatory because this
amendment will be applied to all
Participants in a uniform manner. In
addition, Participants should continue
to qualify for the rebates that they
currently receive and may earn
increased rebates by qualifying for a
higher volume tier as a result of
combing Penny and Non-Penny Pilot
NOM Market Maker liquidity to qualify
for the rebate. The proposal does not
misalign the current rebate structure.
NOM Market Makers are valuable
market participants that provide
liquidity in the marketplace and incur
costs unlike other market participants.
The Exchange believes that NOM
Market Makers should be offered the
opportunity to earn higher rebates as
compared to Non-NOM Market Makers,
Firms and Broker Dealers because NOM
Market Makers add value through
continuous quoting 10 and the
commitment of capital. The Exchange
believes that encouraging NOM Market
Makers to be more aggressive when
posting liquidity benefits all market
participants through increased liquidity.
The Exchange also believes that
including Non-Penny volume in
calculating on the various NOM Market
Maker rebate tiers is equitable and not
unfairly discriminatory because NOM
Market Makers will continue to earn
higher rebates as compared to Firms,
Non-NOM Market Makers and BrokerDealers and will earn the same or lower
rebates as compared to Customers and
Professionals.11
The Exchange believes that
continuing to offer NOM Market Makers
the opportunity to receive higher rebates
as compared to Firms, Non-NOM
Market Makers and Broker-Dealers is
equitable and not unfairly
discriminatory because all Participants
may qualify for the NOM Market Maker
10 See
note 9.
Tier 1 NOM Market Maker Rebate to Add
Liquidity in Penny Pilot Options is the same rebate
as the Tier 1 Customer and Professional rebate in
Penny Pilot Options. The Exchange pays the highest
Tier 1 Rebates to Add Liquidity in Penny Pilot
Options of $0.25 per contract to Customers,
Professionals and NOM Market Makers for
transacting one qualifying contract as compared to
other market participants. Firms, Non-NOM Market
Makers and Broker-Dealers receive a $0.10 per
contract Penny Pilot Option Rebate to Add
Liquidity. In addition, Participant that adds Firm,
Non-NOM Market Maker or Broker-Dealer liquidity
in Penny Pilot Options and/or Non-Penny Pilot
Options of 15,000 contracts per day or more in a
given month will receive a Rebate to Add Liquidity
in Penny Pilot Options of $0.20 per contract.
ehiers on DSK2VPTVN1PROD with NOTICES
11 The
VerDate Mar<15>2010
13:32 Dec 12, 2013
Jkt 232001
rebate tiers and every Participant is
entitled to a rebate solely by adding one
contract of NOM Market Maker liquidity
on NOM. Also, as mentioned, the NOM
Market Maker would receive the same
rebate in Tier 1 as compared to
Customers and Professionals and a
higher rebate in all other tiers as
compared to a Firm, Non-NOM Market
Maker or Broker-Dealer because of the
obligations 12 borne by NOM Market
Makers as compared to other market
participants. Encouraging NOM Market
Makers to add greater liquidity benefits
all Participants in the quality of order
interaction.
The Exchange’s proposal to offer a
new Tier 5 NOM Market Maker Penny
Pilot Options Rebate to Add Liquidity is
reasonable because the new rebate
should incentivize Participants to select
the Exchange as a venue to post NOM
Market Maker liquidity. This added
liquidity will benefit market
participants through increased order
interaction.
The Exchange’s proposal to offer a
new Tier 5 NOM Market Maker Penny
Pilot Options Rebate to Add Liquidity is
equitable and not unfairly
discriminatory because this amendment
will be applied to all Participants in a
uniform manner.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASDAQ does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act. The Exchange
believes that incentivizing NOM Market
Makers to post liquidity on NOM
benefits market participants through
increased order interaction. Also, NOM
Market Makers have obligations 13 to the
market which are not borne by other
market participants and therefore the
Exchange believes that NOM Market
Makers are entitled to such higher
rebates. Permitting Participants to add
either Penny or Non-Penny Pilot Market
Maker liquidity should further
encourage NOM Market Makers to post
liquidity on NOM.
The proposed amendments do not
misalign the current rebate structure
because NOM Market Makers will
continue to earn higher rebates as
compared to Firms, Non-NOM Market
Makers and Broker-Dealers and will
earn the same or lower rebates as
compared to Customers and
Professionals. The Exchange believes
the differing outcomes, rebates and fees
created by the Exchange’s proposed
12 See
13 See
PO 00000
note 9.
note 9.
Frm 00042
Fmt 4703
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75951
pricing incentives contributes to the
overall health of the market place for the
benefit of all Participants that willing
choose to transact options on NOM. In
addition, NOM Market Makers will have
the opportunity to earn even higher
rebates. For the reasons specified
herein, the Exchange does not believe
this proposal creates an undue burden
on competition.
Additionally, NOM Market Maker
would continue to be assessed a lower
Non-Penny Pilot Fee for Removing
Liquidity as compared to other nonCustomer Participants.14 Customers
would continue to be assessed the
lowest Non-Penny Pilot Fee for
Removing Liquidity fee because of the
benefits that Customer order flow brings
to other market participants through
increased liquidity.
The Exchange operates in a highly
competitive market comprised of twelve
U.S. options exchanges in which many
sophisticated and knowledgeable
market participants can readily and do
send order flow to competing exchanges
if they deem fee levels or rebate
incentives at a particular exchange to be
excessive or inadequate. These market
forces support the Exchange belief that
the proposed rebate structure and tiers
proposed herein are competitive with
rebates and tiers in place on other
exchanges. The Exchange believes that
this competitive marketplace continues
to impact the rebates present on the
Exchange today and substantially
influences the proposals set forth above.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.15 At any time
within 60 days of the filing of the
proposed rule change, the Commission
summarily may temporarily suspend
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act. If the Commission
takes such action, the Commission shall
institute proceedings to determine
14 All other non-Customer market participants
(Professionals, Firms, Non-NOM Market Makers
and Broker-Dealers) would continue to be assessed
$0.89 per contract.
15 15 U.S.C. 78s(b)(3)(A)(ii).
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whether the proposed rule should be
approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
• 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–2013–149 on the subject line.
Paper Comments
ehiers on DSK2VPTVN1PROD with NOTICES
• 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–2013–149. 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–2013–149, and should be
submitted on or before January 3, 2014.
13:32 Dec 12, 2013
[FR Doc. 2013–29740 Filed 12–12–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–71029; File No. SR–NYSE–
2013–67]
Electronic Comments
VerDate Mar<15>2010
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
Jkt 232001
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Granting Approval to Proposed Rule
Change to Amend the Quantitative
Continued Listing Standards
Applicable to Companies Listed Under
Sections 102.01C and 103.01B of the
Listed Company Manual
December 9, 2013.
I. Introduction
On October 8, 2013, the New York
Stock Exchange, LLC (‘‘NYSE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend the quantitative continued
listing standards applicable to
companies listed under one of the
financial standards of Sections 102.01C
and 103.01B of the Exchange’s Listed
Company Manual (‘‘Manual’’). The
proposed rule change was published for
comment in the Federal Register on
October 25, 2013.3 The Commission
received no comments on the proposal.
This order approves the proposed rule
change.
II. Description of the Proposal
The Exchange proposes to amend the
continued listing standards in Section
802.01B of the Manual. Under current
Exchange initial listing rules, companies
applying to list equity securities on the
NYSE must meet one of the specific
financial standards,4 in addition to the
other listing requirements set out in
Section 102.00 for domestic companies
and Section 103.00 for non-U.S.
companies. Once listed, companies have
to meet the Exchanges continued listing
criteria set out in Section 802.01 of the
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 70728
(October 25, 2013), 78 FR 64043.
4 See Section 102.01C of the Manual (for domestic
issuers) and Section 103.01B (for non-U.S. issuers).
See also note 7, infra.
1 15
PO 00000
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Manual. In addition to the other
minimum continued listing
requirements that apply to capital or
common stock,5 companies with such
securities listed on the Exchange must
also meet certain quantitative financial
continued listing standards which
correspond to the standard under which
the securities were initially listed.6
There are currently four different
financial continued listing standards
which apply to the capital or common
stock of a listed company, depending
under which standard it was originally
listed under.7
A company that qualified to list under
the Earnings Test or Assets and Equity
Test, would be considered to be below
compliance if over a consecutive 30
trading-day period, the average global
market capitalization of its securities is
less than $50,000,000 and the total
stockholders’ equity is less than
$50,000,000.8
A company qualifying to list under
the Valuation/Revenue with Cash Flow
Test, would be considered to be below
compliance if (A) over a consecutive 30
trading-day period, the average global
market capitalization of its securities is
less than $250,000,000 and the total
revenues are less than $20,000,000 over
the last 12 months (unless the listed
company qualifies as an original listing
under one of the other original listing
standards) or (B) the average global
market capitalization over a consecutive
30 trading-day period is less than
$75,000,000.
A company that qualified to list under
the Pure Valuation/Revenue Test would
be considered to be below compliance if
(A) over a consecutive 30 trading-day
period, the average global market
capitalization of the company’s
securities is less than $375,000,000 and
5 See Section 802.01A of the Manual (distribution
criteria for capital or common stock); Section
802.01C of the Manual (maintaining a stock price
on a 30-day average basis of $1.00 per share); and
Section 802.01B (stating that ‘‘the Exchange will
promptly initiate suspension and delisting
procedures with respect to a company that is listed
under any financial standard set out in Sections
102.01C or 103.01B if a company is determined to
have average global market capitalization over a
consecutive 30 trading-day period of less than
$15,000,000, regardless of the original standard
under which it listed’’). See also Section 802.01D
of the Manual (listing other additional criteria for
continued listing). The Commission notes that the
Exchange has represented that the continued listing
standards would apply to American Depositary
Receipts.
6 See Section 802.01B of the Manual.
7 See Sections 802.01B(I), (II), (III) and (IV) of the
Manual. The filing states that these continued
listing standards apply to operating companies,
however, the Commission notes that the Manual
does not specifically refer to the term operating
companies.
8 See Section 802.01B(I) of the Manual.
E:\FR\FM\13DEN1.SGM
13DEN1
]]>Agencies
[Federal Register Volume 78, Number 240 (Friday, December 13, 2013)]
[Notices]
[Pages 75949-75952]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29740]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71028; File No. SR-NASDAQ-2013-149]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to NOM Penny and Non-Penny Pilot Options
December 9, 2013.
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 November 29, 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 NASDAQ.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ proposes to modify Chapter XV, entitled ``Options Pricing,''
at Section 2 governing pricing for NASDAQ members using the NASDAQ
Options Market (``NOM''), NASDAQ's facility for executing and routing
standardized equity and index options. Specifically, NOM proposes to
amend the NOM Market Maker \3\ Non-Penny Pilot Options \4\ Fee for
Removing Liquidity and the NOM Market Maker Rebate to Add Liquidity in
Penny Pilot Options.\5\
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\3\ The term ``NOM Market Maker'' means a Participant that has
registered as a Market Maker on NOM pursuant to Chapter VII, Section
2, and must also remain in good standing pursuant to Chapter VII,
Section 4. In order to receive NOM Market Maker pricing in all
securities, the Participant must be registered as a NOM Market Maker
in at least one security.
\4\ This would include options on Nasdaq-100 Index (``NDX'').
For transactions in NDX, a surcharge of $0.10 per contract will be
added to the Fee for Adding Liquidity and the Fee for Removing
Liquidity in Non-Penny Pilot Options, except for a Customer who will
not be assessed a surcharge.
\5\ The Penny Pilot was established in March 2008 and in October
2009 was expanded and extended through December 31, 2013. See
Securities Exchange Act Release Nos. 57579 (March 28, 2008), 73 FR
18587 (April 4, 2008) (SR-NASDAQ-2008-026) (notice of filing and
immediate effectiveness establishing Penny Pilot); 60874 (October
23, 2009), 74 FR 56682 (November 2, 2009) (SR-NASDAQ-2009-091)
(notice of filing and immediate effectiveness expanding and
extending Penny Pilot); 60965 (November 9, 2009), 74 FR 59292
(November 17, 2009) (SR-NASDAQ-2009-097) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
61455 (February 1, 2010), 75 FR 6239 (February 8, 2010) (SR-NASDAQ-
2010-013) (notice of filing and immediate effectiveness adding
seventy-five classes to Penny Pilot); 62029 (May 4, 2010), 75 FR
25895 (May 10, 2010) (SR-NASDAQ-2010-053) (notice of filing and
immediate effectiveness adding seventy-five classes to Penny Pilot);
65969 (December 15, 2011), 76 FR 79268 (December 21, 2011) (SR-
NASDAQ-2011-169) (notice of filing and immediate effectiveness
extension and replacement of Penny Pilot); 67325 (June 29, 2012), 77
FR 40127 (July 6, 2012) (SR-NASDAQ-2012-075) (notice of filing and
immediate effectiveness and extension and replacement of Penny Pilot
through December 31, 2012); 68519 (December 21, 2012), 78 FR 136
(January 2, 2013) (SR-NASDAQ-2012-143) (notice of filing and
immediate effectiveness and extension and replacement of Penny Pilot
through June 30, 2013); and 69787 (June 18, 2013), 78 FR 37858 (June
24, 2013) (SR-NASDAQ-2013-082). See also NOM Rules, Chapter VI,
Section 5.
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While the changes proposed herein are effective upon filing, the
Exchange has designated that the amendments be operative on December 2,
2013.
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. The
text of
[[Page 75950]]
these statements may be examined at the places specified in Item IV
below. The Exchange has prepared summaries, set forth in sections A, B,
and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ proposes to modify Chapter XV, entitled ``Options Pricing,''
at Section 2(1) governing the rebates and fees assessed for option
orders entered into NOM.
The Exchange proposes to increase the NOM Market Maker Fee for
Removing Liquidity in Non-Penny Pilot Options from $0.85 to $0.86 per
contract. The Exchange believes that despite the increase to the Fee
for Removing Liquidity the Exchange continues to offer competitive
rates to NOM Market Makers.
The Exchange proposes to amend the NOM Market Maker Penny Pilot
Options Rebate to Add Liquidity tiers. Today, the Exchange offers a
four-tiered Rebate to Add Liquidity in Penny Pilot Options to NOM
Market Makers as follows:
------------------------------------------------------------------------
Rebate to add
Monthly volume liquidity
------------------------------------------------------------------------
Tier 1...................... Participant adds NOM $0.25.
Market Maker
liquidity in Penny
Pilot Options of up
to 29,999 contracts
per day in a month.
Tier 2...................... Participant adds NOM $0.30.
Market Maker
liquidity in Penny
Pilot Options of
30,000 to 59,999
contracts per day
in a month.
Tier 3...................... Participant adds NOM $0.32.
Market Maker
liquidity in Penny
Pilot Options of
60,000 to 79,999
contracts per day
in a month.
Tier 4...................... Participant adds NOM $0.32 or $0.38 in
Market Maker the following
liquidity in Penny symbols BAC, GLD,
Pilot Options of IWM, QQQ and VXX or
80,000 or more $0.40 in SPY.
contracts per day
in a month.
------------------------------------------------------------------------
The Exchange is proposing to amend the qualification for NOM Market
Maker Penny Pilot rebate Tiers 1 through 4 to provide that Participants
may qualify for each tier by adding NOM Market Maker liquidity in Penny
Pilot Options and/or Non-Penny Pilot Options. The Exchange would
continue to pay the rebates for each volume tier on transactions in
Penny Pilot Options. This amendment would only impact a Participant's
ability to qualify for a certain rebate tier. The Exchange anticipates
that this amendment would provide an opportunity for Participants to
qualify for higher rebate tiers for their NOM Market Maker liquidity.
The Exchange is also proposing to add a new Tier 5 rebate to the
Penny Pilot Rebates to Add Liquidity. The Exchange proposes to pay
$0.40 per contract to a Participant that adds NOM Market Maker
liquidity of 40,000 or more contracts per day in a month in Penny Pilot
Options and/or Non-Penny Pilot Options and also qualifies for Tier 7 or
8 of the Customer and/or Professional Rebate to Add Liquidity in Penny
Pilot Options. The Exchange believes the opportunity to earn a higher
rebate will encourage Participants to direct a greater amount of NOM
Market Maker liquidity to NOM.
The Exchange also proposes to relocate certain text in the fee
schedule. The Exchange proposes to relocate the following text:
`` The NOM Market Maker Rebate to Add Liquidity in Penny Pilot
Options will be paid as noted below.'' The Exchange would place the
text above the NOM Market Maker tiers in the fee schedule for ease of
reference.
2. Statutory Basis
NASDAQ believes that its proposal to amend its Pricing Schedule is
consistent with Section 6(b) of the Act \6\ in general, and furthers
the objectives of Section 6(b)(4) and (b)(5) of the Act \7\ 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.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4), (5).
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The Exchange's proposal to increase the NOM Market Maker Fee for
Removing Liquidity from $0.85 to $0.86 per contract is reasonable
because the rate remains competitive with other Non-Penny Pilot Fees
for Removing Liquidity. The increase also permits the Exchange to
support providing liquidity rebates to Participants executing NOM
Market Maker orders.
The Exchange's proposal to increase the NOM Market Maker Fee for
Removing Liquidity from $0.85 to $0.86 per contract is equitable and
not unfairly discriminatory because the rate remains competitive with
other Non-Penny Pilot Fees for Removing Liquidity. NOM Market Makers
would continue to be assessed a lower fee as compared to other non-
Customer Participants.\8\ NOM Market Makers have obligations to the
market and regulatory requirements,\9\ which normally do not apply to
other market participants. A NOM Market Maker has an obligation to make
continuous markets, engage in course of dealings reasonably calculated
to contribute to the maintenance of a fair and orderly market, and not
make bids or offers or enter into transactions that are inconsistent
with a course of dealings. Customers would continue to be assessed the
lowest fee of $0.82 per contract. Customer order flow brings unique
benefits to the market which benefits all market participants through
increased liquidity.
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\8\ All other non-Customer market participants (Professionals,
Firms, Non-NOM Market Makers and Broker-Dealers) would continue to
be assessed $0.89 per contract.
\9\ Pursuant to Chapter VII (Market Participants), Section 5
(Obligations of Market Makers), in registering as a market maker, an
Options Participant commits himself to various obligations.
Transactions of a Market Maker in its market making capacity must
constitute a course of dealings reasonably calculated to contribute
to the maintenance of a fair and orderly market, and Market Makers
should not make bids or offers or enter into transactions that are
inconsistent with such course of dealings. Further, all Market
Makers are designated as specialists on NOM for all purposes under
the Act or rules thereunder. See Chapter VII, Section 5.
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The Exchange's proposal to amend the qualifications for the NOM
Market Maker Rebates to Add Liquidity in Penny Pilot Options is
reasonable because by providing Participants the opportunity to add NOM
Market Maker Penny and/or Non-Penny Pilot Option liquidity to qualify
for a rebate tier provides a greater opportunity to qualify for higher
rebate tiers. The Exchange would continue to only pay rebates on Penny
Pilot volume. By incentivizing Participants to select the Exchange as a
venue to post NOM Market Maker liquidity will benefit market
[[Page 75951]]
participants through increased order interaction.
The Exchange's proposal to amend the qualifications for the NOM
Market Maker Rebates to Add Liquidity in Penny Pilot Options is
equitable and not unfairly discriminatory because this amendment will
be applied to all Participants in a uniform manner. In addition,
Participants should continue to qualify for the rebates that they
currently receive and may earn increased rebates by qualifying for a
higher volume tier as a result of combing Penny and Non-Penny Pilot NOM
Market Maker liquidity to qualify for the rebate. The proposal does not
misalign the current rebate structure. NOM Market Makers are valuable
market participants that provide liquidity in the marketplace and incur
costs unlike other market participants. The Exchange believes that NOM
Market Makers should be offered the opportunity to earn higher rebates
as compared to Non-NOM Market Makers, Firms and Broker Dealers because
NOM Market Makers add value through continuous quoting \10\ and the
commitment of capital. The Exchange believes that encouraging NOM
Market Makers to be more aggressive when posting liquidity benefits all
market participants through increased liquidity. The Exchange also
believes that including Non-Penny volume in calculating on the various
NOM Market Maker rebate tiers is equitable and not unfairly
discriminatory because NOM Market Makers will continue to earn higher
rebates as compared to Firms, Non-NOM Market Makers and Broker-Dealers
and will earn the same or lower rebates as compared to Customers and
Professionals.\11\
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\10\ See note 9.
\11\ The Tier 1 NOM Market Maker Rebate to Add Liquidity in
Penny Pilot Options is the same rebate as the Tier 1 Customer and
Professional rebate in Penny Pilot Options. The Exchange pays the
highest Tier 1 Rebates to Add Liquidity in Penny Pilot Options of
$0.25 per contract to Customers, Professionals and NOM Market Makers
for transacting one qualifying contract as compared to other market
participants. Firms, Non-NOM Market Makers and Broker-Dealers
receive a $0.10 per contract Penny Pilot Option Rebate to Add
Liquidity. In addition, Participant that adds Firm, Non-NOM Market
Maker or Broker-Dealer liquidity in Penny Pilot Options and/or Non-
Penny Pilot Options of 15,000 contracts per day or more in a given
month will receive a Rebate to Add Liquidity in Penny Pilot Options
of $0.20 per contract.
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The Exchange believes that continuing to offer NOM Market Makers
the opportunity to receive higher rebates as compared to Firms, Non-NOM
Market Makers and Broker-Dealers is equitable and not unfairly
discriminatory because all Participants may qualify for the NOM Market
Maker rebate tiers and every Participant is entitled to a rebate solely
by adding one contract of NOM Market Maker liquidity on NOM. Also, as
mentioned, the NOM Market Maker would receive the same rebate in Tier 1
as compared to Customers and Professionals and a higher rebate in all
other tiers as compared to a Firm, Non-NOM Market Maker or Broker-
Dealer because of the obligations \12\ borne by NOM Market Makers as
compared to other market participants. Encouraging NOM Market Makers to
add greater liquidity benefits all Participants in the quality of order
interaction.
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\12\ See note 9.
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The Exchange's proposal to offer a new Tier 5 NOM Market Maker
Penny Pilot Options Rebate to Add Liquidity is reasonable because the
new rebate should incentivize Participants to select the Exchange as a
venue to post NOM Market Maker liquidity. This added liquidity will
benefit market participants through increased order interaction.
The Exchange's proposal to offer a new Tier 5 NOM Market Maker
Penny Pilot Options Rebate to Add Liquidity is equitable and not
unfairly discriminatory because this amendment will be applied to all
Participants in a uniform manner.
B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will impose
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Act. The Exchange believes that incentivizing
NOM Market Makers to post liquidity on NOM benefits market participants
through increased order interaction. Also, NOM Market Makers have
obligations \13\ to the market which are not borne by other market
participants and therefore the Exchange believes that NOM Market Makers
are entitled to such higher rebates. Permitting Participants to add
either Penny or Non-Penny Pilot Market Maker liquidity should further
encourage NOM Market Makers to post liquidity on NOM.
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\13\ See note 9.
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The proposed amendments do not misalign the current rebate
structure because NOM Market Makers will continue to earn higher
rebates as compared to Firms, Non-NOM Market Makers and Broker-Dealers
and will earn the same or lower rebates as compared to Customers and
Professionals. The Exchange believes the differing outcomes, rebates
and fees created by the Exchange's proposed pricing incentives
contributes to the overall health of the market place for the benefit
of all Participants that willing choose to transact options on NOM. In
addition, NOM Market Makers will have the opportunity to earn even
higher rebates. For the reasons specified herein, the Exchange does not
believe this proposal creates an undue burden on competition.
Additionally, NOM Market Maker would continue to be assessed a
lower Non-Penny Pilot Fee for Removing Liquidity as compared to other
non-Customer Participants.\14\ Customers would continue to be assessed
the lowest Non-Penny Pilot Fee for Removing Liquidity fee because of
the benefits that Customer order flow brings to other market
participants through increased liquidity.
---------------------------------------------------------------------------
\14\ All other non-Customer market participants (Professionals,
Firms, Non-NOM Market Makers and Broker-Dealers) would continue to
be assessed $0.89 per contract.
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The Exchange operates in a highly competitive market comprised of
twelve U.S. options exchanges in which many sophisticated and
knowledgeable market participants can readily and do send order flow to
competing exchanges if they deem fee levels or rebate incentives at a
particular exchange to be excessive or inadequate. These market forces
support the Exchange belief that the proposed rebate structure and
tiers proposed herein are competitive with rebates and tiers in place
on other exchanges. The Exchange believes that this competitive
marketplace continues to impact the rebates present on the Exchange
today and substantially influences the proposals set forth above.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\15\ At any time within 60 days of the
filing of the proposed rule change, the Commission summarily may
temporarily suspend such rule change if it appears to the Commission
that such action is necessary or appropriate in the public interest,
for the protection of investors, or otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine
[[Page 75952]]
whether the proposed rule should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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-2013-149 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-2013-149. 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-2013-149, and should
be submitted on or before January 3, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-29740 Filed 12-12-13; 8:45 am]
BILLING CODE 8011-01-P
