Self-Regulatory Organizations; the NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Joint Back Office Pricing, 34372-34374 [2014-13936]
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34372
Federal Register / Vol. 79, No. 115 / Monday, June 16, 2014 / Notices
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:
emcdonald on DSK67QTVN1PROD with NOTICES
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–
ICC–2014–09 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–ICC–2014–09. 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 such
filings will also be available for
inspection and copying at the principal
office of ICE Clear Credit and on ICE
Clear Credit’s Web site at https://
www.theice.com/notices/
Notices.shtml?regulatoryFilings.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
VerDate Mar<15>2010
16:36 Jun 13, 2014
Jkt 232001
you wish to make available publicly. All
submissions should refer to File
Number SR–ICC–2014–09 and should
be submitted on or before July 7, 2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary .
[FR Doc. 2014–13933 Filed 6–13–14; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72362; File No. SR–
NASDAQ–2014–060]
Self-Regulatory Organizations; the
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Joint Back Office Pricing
June 10, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 29,
2014, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by NASDAQ. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ proposes to amend Chapter
XV (Options Pricing) on The NASDAQ
Options Market (‘‘NOM’’), NASDAQ’s
facility for executing and routing
standardized equity and index options
to assess joint back office (‘‘JBO’’) 3
participants pricing the same as BrokerDealers 4 and require JBO participants to
utilize a new origin code to identify JBO
orders.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
www.nasdaq.cchwallstreet.com, at the
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 A JBO participant is a Participant organization
that maintains a JBO arrangement with a clearing
broker-dealer (‘‘JBO Broker’’) subject to the
requirements of Regulation T Section 220.7 of the
Federal Reserve System. See also Exchange Rules at
Chapter XIII, Section 5.
4 The term ‘‘Broker-Dealer’’ applies to any
transaction which is not subject to any of the other
transaction fees applicable within a particular
category.
1 15
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to introduce a
new origin code which will be used to
indicate orders for a JBO account to be
cleared into the Firm range at The
Options Clearing Corporation (‘‘OCC’’)
for purposes of pricing only. Further,
the Exchange proposes to assess fees
and pay rebates to JBO Orders the same
as Broker-Dealers.
Currently, JBO orders clear in the
Firm 5 range at OCC as do Firm orders.
The Exchange is proposing to introduce
an origin code for Participants to
identify orders for a JBO account. The
origin code will simplify the process of
identifying JBO orders for purposes of
pricing only. Participants would be
required to mark their JBO orders in
accordance with the technical
specifications definitions which are
provided by the Exchange. This rule
change will not impact the manner in
which JBO orders are treated for
purposes of other Exchange Rules
including but not limited to priority in
the Exchange’s System. With this
proposal, JBO orders will continue to be
cleared in the Firm range at OCC.
Today, JBO orders are assessed
transaction fees and paid rebates the
same as Firms. The Exchange’s current
pricing does not differentiate Firms and
Broker-Dealers. These market
participants are assessed the same fees
and paid the same rebates. There will be
no impact as a result of this rule change
as far as pricing because Firms and
5 The term ‘‘Firm’’ applies to any transaction that
is identified by a Participant for clearing in the Firm
range at OCC.
E:\FR\FM\16JNN1.SGM
16JNN1
Federal Register / Vol. 79, No. 115 / Monday, June 16, 2014 / Notices
emcdonald on DSK67QTVN1PROD with NOTICES
Broker-Dealers are assessed the same
fees and paid the same rebates.
The Exchange proposes to amend
Chapter XV of the NOM Rules to define
the term JBO in the preface as follows:
‘‘The term ‘‘Joint Back Office’’ or ‘‘JBO’’
applies to any transaction that is
identified by a Participant for clearing
in the Firm range at OCC and is
identified with an origin code as a JBO.
A JBO will be priced the same as a
Broker-Dealer as of September 1, 2014.’’
Also, the Exchange describes a JBO
participant as ‘‘a Participant that
maintains a JBO arrangement with a
clearing broker-dealer (‘‘JBO Broker’’)
subject to the requirements of
Regulation T Section 220.7 of the
Federal Reserve System as further
discussed in Chapter XIII, Section 5.’’
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 6 in general, and furthers the
objectives of Section 6(b)(5) of the Act 7
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest.
Adding an origin code to JBO orders is
a more efficient manner in which to
identify those orders separate and apart
from other orders entered on NOM. In
addition, JBO orders will continue to
clear in the Firm range at OCC as is the
case today. The Exchange will more
easily be able to discern the pricing
associated with clearly identified JBO
orders. This will eliminate any potential
confusion, thereby removing a potential
impediment to and perfecting the
mechanism for a free and open market
and a national market system, and, in
general, protecting investors and the
public interest. The Exchange believes
that automating this process of
manually identifying JBO Orders will
promote just and equitable principles of
trade by creating an identifiable method
of distinguishing JBO orders entered
into the Exchange’s System. The
Exchange believes that automating this
process is a more efficient manner in
which to identify and bill these types of
orders.
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,8
in general, and with Section 6(b)(4) and
6(b)(5) of the Act,9 in particular, in that
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 15 U.S.C. 78f.
9 15 U.S.C. 78f(b)(4) and (5).
7 15
VerDate Mar<15>2010
16:36 Jun 13, 2014
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 the Exchange operates or
controls, and is not designed to permit
unfair discrimination between
customers, issuers, brokers, or dealers.
The Exchange believes that its proposal
to assess pricing for JBO orders the same
as for Broker-Dealers is reasonable
because the Exchange believes that the
business of a JBO is similar to that of an
away market maker and other BrokerDealers. A JBO participant maintains a
JBO arrangement with a JBO Broker
pursuant to Section 220.7 of Regulation
T. Similarly, an away market maker is
a member of another national securities
exchange registered as a market maker
in an options class(es). An away marker
maker is considered to be a BrokerDealer as the market maker is not
subject to market making obligations on
the Exchange similar to other NOM
Market Makers. The Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’) assesses manual equity option
JBO orders fees the same as brokerdealer and electronic equity option JBO
orders fees the same as a Professional.10
The Exchange believes that it is
reasonable to assess the same fees and
pay the same rebates on JBO orders as
are paid and assessed to a Broker-Dealer
because the Exchange believes a JBO
participant’s business is similar to that
of a Broker-Dealer and should therefore
be priced the same. The Exchange
believes that its proposal to assess JBO
orders pricing the same as BrokerDealers is equitable and not unfairly
discriminatory because the Exchange
will uniformly assess JBO orders the
same fees and pay the same rebates as
today are assessed and paid to a BrokerDealer, which today are the same fees
and rebates applicable to a Firm. There
will be no impact as far as pricing with
this proposal because Firms and BrokerDealers are assessed the same fees and
paid the same rebates.
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 is
assessing fees to all JBOs in a similar
manner with this proposal. JBO
participants would be assessed fees and
paid rebates the same as Broker-Dealers.
The Exchange believes that assessing
JBO Orders the same as Broker-Dealers
does not impose a burden on
competition because a JBO participant’s
business is similar to that of a BrokerDealer and should therefore be priced
the same. Also, today, Firms and
Broker-Dealer fees and rebates are the
same.
Further, utilizing an origin code to
identify JBO Orders does not impose an
unfair burden on competition. The
Exchange believes that automating the
process of manually identifying JBO
Orders by creating an identifiable
method of distinguishing JBO orders
entered into the Exchange’s System
would assist the Exchange in regulating
its market. In addition, CBOE utilizes an
origin code today to identify JBO
Orders.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A)(ii) of the Act 11 and
subparagraph (f)(6) of Rule 19b–4
thereunder.12
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved. The
Exchange has provided the Commission
written notice of its intent to file the
proposed rule change, along with a brief
description and text of the proposed
rule change, at least five business days
prior to the date of filing of the
proposed rule change
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
11 15
10 See
Jkt 232001
PO 00000
CBOE’s Fees Schedule.
Frm 00100
Fmt 4703
Sfmt 4703
34373
12 17
E:\FR\FM\16JNN1.SGM
U.S.C. 78s(b)(3)(a)(ii).
CFR 240.19b–4(f)(6).
16JNN1
34374
Federal Register / Vol. 79, No. 115 / Monday, June 16, 2014 / Notices
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2014–060 on the subject line.
Paper Comments
emcdonald on DSK67QTVN1PROD with NOTICES
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2014–060. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml).
Copies of the submission, all
subsequent amendments, all written
statements with respect to the proposed
rule change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
All submissions should refer to File
Number SR–NASDAQ–2014–060 and
should be submitted on or before July 7,
2014.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2014–13936 Filed 6–13–14; 8:45 am]
BILLING CODE 8011–01–P
13 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
16:36 Jun 13, 2014
Jkt 232001
SECURITIES AND EXCHANGE
COMMISSION
the most significant aspects of such
statements.
[Release No. 34–72361; File No. SR–BX–
2014–029]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Joint Back Office Pricing
June 10, 2014.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 29,
2014, NASDAQ OMX BX, Inc. (‘‘BX’’ 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Chapter XV (Options Pricing) to assess
joint back office (‘‘JBO’’) 3 participants
pricing the same as Broker-Dealers 4 and
require JBO participants to utilize a new
origin code to identify JBO orders.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxbx.cchwallstreet.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 A JBO participant is a Participant organization
that maintains a JBO arrangement with a clearing
broker-dealer (‘‘JBO Broker’’) subject to the
requirements of Regulation T Section 220.7 of the
Federal Reserve System. See also Exchange Rules at
Chapter XIII, Section 5.
4 The term ‘‘Broker-Dealer’’ applies to any
transaction which is not subject to any of the other
transaction fees applicable within a particular
category.
2 17
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
1. Purpose
The Exchange proposes to introduce a
new origin code which will be used to
indicate orders for a JBO account to be
cleared into the Firm range at The
Options Clearing Corporation (‘‘OCC’’)
for purposes of pricing only. Further,
the Exchange proposes to assess fees
and pay rebates to JBO Orders the same
as Broker-Dealers.
Currently, JBO orders clear in the
Firm 5 range at OCC as do Firm orders.
The Exchange is proposing to introduce
an origin code for Participants to
identify orders for a JBO account. The
origin code will simplify the process of
identifying JBO orders for purposes of
pricing only. Participants would be
required to mark their JBO orders in
accordance with the technical
specifications definitions which are
provided by the Exchange. This rule
change will not impact the manner in
which JBO orders are treated for
purposes of other Exchange Rules
including but not limited to priority in
the Exchange’s System. With this
proposal, JBO orders will continue to be
cleared in the Firm range at OCC.
Today, JBO orders are assessed
transaction fees and paid rebates the
same as Firms. The Exchange’s current
pricing does not differentiate Firms and
Broker-Dealers. These market
participants are assessed the same fees
and paid the same rebates. There will be
no impact as a result of this rule change
as far as pricing because Firms and
Broker-Dealers are assessed the same
fees and paid the same rebates.
The Exchange proposes to amend
Chapter XV of the BX Rules to define
the term JBO in the preface as follows:
‘‘The term ‘‘Joint Back Office’’ or ‘‘JBO’’
applies to any transaction that is
identified by a Participant for clearing
in the Firm range at OCC and is
identified with an origin code as a JBO.
A JBO will be priced the same as a
Broker-Dealer as of September 1, 2014.’’
Also, the Exchange describes a JBO
participant as ‘‘a Participant that
maintains a JBO arrangement with a
clearing broker-dealer (‘‘JBO Broker’’)
subject to the requirements of
Regulation T Section 220.7 of the
Federal Reserve System as further
discussed in Chapter XIII, Section 5.’’
5 The term ‘‘Firm’’ applies to any transaction that
is identified by a Participant for clearing in the Firm
range at OCC.
E:\FR\FM\16JNN1.SGM
16JNN1
]]>Agencies
[Federal Register Volume 79, Number 115 (Monday, June 16, 2014)]
[Notices]
[Pages 34372-34374]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-13936]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72362; File No. SR-NASDAQ-2014-060]
Self-Regulatory Organizations; the NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Joint Back Office Pricing
June 10, 2014.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on May 29, 2014, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III below, which Items have been prepared by NASDAQ.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASDAQ proposes to amend Chapter XV (Options Pricing) on The NASDAQ
Options Market (``NOM''), NASDAQ's facility for executing and routing
standardized equity and index options to assess joint back office
(``JBO'') \3\ participants pricing the same as Broker-Dealers \4\ and
require JBO participants to utilize a new origin code to identify JBO
orders.
---------------------------------------------------------------------------
\3\ A JBO participant is a Participant organization that
maintains a JBO arrangement with a clearing broker-dealer (``JBO
Broker'') subject to the requirements of Regulation T Section 220.7
of the Federal Reserve System. See also Exchange Rules at Chapter
XIII, Section 5.
\4\ The term ``Broker-Dealer'' applies to any transaction which
is not subject to any of the other transaction fees applicable
within a particular category.
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaq.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to introduce a new origin code which will be
used to indicate orders for a JBO account to be cleared into the Firm
range at The Options Clearing Corporation (``OCC'') for purposes of
pricing only. Further, the Exchange proposes to assess fees and pay
rebates to JBO Orders the same as Broker-Dealers.
Currently, JBO orders clear in the Firm \5\ range at OCC as do Firm
orders. The Exchange is proposing to introduce an origin code for
Participants to identify orders for a JBO account. The origin code will
simplify the process of identifying JBO orders for purposes of pricing
only. Participants would be required to mark their JBO orders in
accordance with the technical specifications definitions which are
provided by the Exchange. This rule change will not impact the manner
in which JBO orders are treated for purposes of other Exchange Rules
including but not limited to priority in the Exchange's System. With
this proposal, JBO orders will continue to be cleared in the Firm range
at OCC. Today, JBO orders are assessed transaction fees and paid
rebates the same as Firms. The Exchange's current pricing does not
differentiate Firms and Broker-Dealers. These market participants are
assessed the same fees and paid the same rebates. There will be no
impact as a result of this rule change as far as pricing because Firms
and
[[Page 34373]]
Broker-Dealers are assessed the same fees and paid the same rebates.
---------------------------------------------------------------------------
\5\ The term ``Firm'' applies to any transaction that is
identified by a Participant for clearing in the Firm range at OCC.
---------------------------------------------------------------------------
The Exchange proposes to amend Chapter XV of the NOM Rules to
define the term JBO in the preface as follows: ``The term ``Joint Back
Office'' or ``JBO'' applies to any transaction that is identified by a
Participant for clearing in the Firm range at OCC and is identified
with an origin code as a JBO. A JBO will be priced the same as a
Broker-Dealer as of September 1, 2014.'' Also, the Exchange describes a
JBO participant as ``a Participant that maintains a JBO arrangement
with a clearing broker-dealer (``JBO Broker'') subject to the
requirements of Regulation T Section 220.7 of the Federal Reserve
System as further discussed in Chapter XIII, Section 5.''
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \6\ in general, and furthers the objectives of Section
6(b)(5) of the Act \7\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
Adding an origin code to JBO orders is a more efficient manner in which
to identify those orders separate and apart from other orders entered
on NOM. In addition, JBO orders will continue to clear in the Firm
range at OCC as is the case today. The Exchange will more easily be
able to discern the pricing associated with clearly identified JBO
orders. This will eliminate any potential confusion, thereby removing a
potential impediment to and perfecting the mechanism for a free and
open market and a national market system, and, in general, protecting
investors and the public interest. The Exchange believes that
automating this process of manually identifying JBO Orders will promote
just and equitable principles of trade by creating an identifiable
method of distinguishing JBO orders entered into the Exchange's System.
The Exchange believes that automating this process is a more efficient
manner in which to identify and bill these types of orders.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\8\ in general, and with
Section 6(b)(4) and 6(b)(5) of the Act,\9\ 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 the Exchange operates or controls, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The Exchange believes that its proposal to assess
pricing for JBO orders the same as for Broker-Dealers is reasonable
because the Exchange believes that the business of a JBO is similar to
that of an away market maker and other Broker-Dealers. A JBO
participant maintains a JBO arrangement with a JBO Broker pursuant to
Section 220.7 of Regulation T. Similarly, an away market maker is a
member of another national securities exchange registered as a market
maker in an options class(es). An away marker maker is considered to be
a Broker-Dealer as the market maker is not subject to market making
obligations on the Exchange similar to other NOM Market Makers. The
Chicago Board Options Exchange, Incorporated (``CBOE'') assesses manual
equity option JBO orders fees the same as broker-dealer and electronic
equity option JBO orders fees the same as a Professional.\10\
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(4) and (5).
\10\ See CBOE's Fees Schedule.
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The Exchange believes that it is reasonable to assess the same fees
and pay the same rebates on JBO orders as are paid and assessed to a
Broker-Dealer because the Exchange believes a JBO participant's
business is similar to that of a Broker-Dealer and should therefore be
priced the same. The Exchange believes that its proposal to assess JBO
orders pricing the same as Broker-Dealers is equitable and not unfairly
discriminatory because the Exchange will uniformly assess JBO orders
the same fees and pay the same rebates as today are assessed and paid
to a Broker-Dealer, which today are the same fees and rebates
applicable to a Firm. There will be no impact as far as pricing with
this proposal because Firms and Broker-Dealers are assessed the same
fees and paid the same rebates.
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 is assessing fees to all JBOs
in a similar manner with this proposal. JBO participants would be
assessed fees and paid rebates the same as Broker-Dealers. The Exchange
believes that assessing JBO Orders the same as Broker-Dealers does not
impose a burden on competition because a JBO participant's business is
similar to that of a Broker-Dealer and should therefore be priced the
same. Also, today, Firms and Broker-Dealer fees and rebates are the
same.
Further, utilizing an origin code to identify JBO Orders does not
impose an unfair burden on competition. The Exchange believes that
automating the process of manually identifying JBO Orders by creating
an identifiable method of distinguishing JBO orders entered into the
Exchange's System would assist the Exchange in regulating its market.
In addition, CBOE utilizes an origin code today to identify JBO Orders.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \11\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(a)(ii).
\12\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved. The Exchange has
provided the Commission written notice of its intent to file the
proposed rule change, along with a brief description and text of the
proposed rule change, at least five business days prior to the date of
filing of the proposed rule change
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing,
[[Page 34374]]
including whether the proposed rule change is consistent with the Act.
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2014-060 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2014-060. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change; the Commission does not edit
personal identifying information from submissions. You should submit
only information that you wish to make available publicly.
All submissions should refer to File Number SR-NASDAQ-2014-060 and
should be submitted on or before July 7, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-13936 Filed 6-13-14; 8:45 am]
BILLING CODE 8011-01-P
