Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Common Ownership, 73130-73132 [2014-28773]

Download as PDF 73130 Federal Register / Vol. 79, No. 236 / Tuesday, December 9, 2014 / Notices SECURITIES AND EXCHANGE COMMISSION withdrew the proposed rule change (SR–NYSEArca–2014–56). [Release No. 34–73730; File No. SR– NYSEArca–2014–56] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Kevin M. O’Neill, Deputy Secretary. Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Withdrawal of Proposed Rule Change Relating To Listing and Trading of Shares of the PIMCO Income Exchange-Traded Fund Under NYSE Arca Equities Rule 8.600 December 3, 2014. On May 1, 2014, NYSE Arca, Inc. 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 list and trade shares of the PIMCO Income Exchange-Traded Fund under NYSE Arca Equities Rule 8.600. The proposed rule change was published for comment in the Federal Register on May 21, 2014.3 On June 24, 2014, the Commission designated a longer period within which to approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether to disapprove the proposed rule change.4 On August 19, 2014, the Commission instituted proceedings under Section 19(b)(2)(B) of the Act 5 to determine whether to approve or disapprove the proposed rule change.6 On November 14, 2014, the Commission issued a notice of designation of longer period for Commission action on proceedings to determine whether to approve or disapprove the proposed rule change.7 The Commission received no comments on the proposed rule change. On December 2, 2014, the Exchange 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 72170 (May 15, 2014), 79 FR 29231. 4 See Securities Exchange Act Release No. 72458, 79 FR 36849 (Jun. 30, 2014). The Commission determined that it was appropriate to designate a longer period within which to take action on the proposed rule change so that it has sufficient time to consider the proposed rule change. Accordingly, the Commission designated August 19, 2014 as the date by which it should approve, disapprove, or institute proceedings to determine whether to disapprove the proposed rule change. 5 15 U.S.C. 78s(b)(2)(B). 6 See Securities Exchange Act Release No. 72867, 79 FR 50720 (Aug. 25, 2014). Specifically, the Commission instituted proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’’ and ‘‘to protect investors and the public interest.’’ See id. 7 See Securities Exchange Act Release No. 73598, 79 FR 69172 (Nov. 20, 2014). rljohnson on DSK3VPTVN1PROD with NOTICES 2 17 VerDate Sep<11>2014 14:48 Dec 08, 2014 Jkt 235001 [FR Doc. 2014–28771 Filed 12–8–14; 8:45 am] 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 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–73732; File No. SR– NASDAQ–2014–114] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Common Ownership December 3, 2014. Pursuant to Section 19(b)(1) of the Securities Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on November 20, 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 modify the definition of Common Ownership 3 in 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, the Exchange proposes to extend the application of Common Ownership to all Chapter XV, Section 2 pricing which requires a certain volume threshold or percentage of volume to obtain certain options pricing. While the changes proposed herein are effective upon filing, the Exchange has designated that the amendments be operative on December 1, 2014. The text of the proposed rule change is available on the Exchange’s Web site at https:// 8 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The term ‘‘Common Ownership’’ shall mean Participants under 75% common ownership or control. See NOM Rules at Chapter XV. 1 15 PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose NASDAQ proposes to modify Chapter XV, entitled ‘‘Options Pricing,’’ at Section 2 governing the rebates and fees assessed for option orders entered into NOM. The Exchange proposes to extend the application of Common Ownership to all Chapter XV, Section 2 pricing which requires a certain volume threshold or percentage of volume to obtain certain options pricing. Today, NOM Participants are permitted to aggregate affiliate activity to obtain certain pricing as specified in Chapter XV, Section 2, provided the NOM Participants are affiliated because they are under 75% common ownership or control with each other (‘‘Common Ownership’’). Today, the Exchange offers NOM Participants under Common Ownership the ability to obtain certain Customer 4 and Professional 5 Penny 4 The term ‘‘Customer’’ applies to any transaction that is identified by a Participant for clearing in the Customer range at The Options Clearing Corporation which is not for the account of broker or dealer or for the account of a ‘‘Professional’’ (as that term is defined in Chapter I, Section 1(a)(48)). 5 The term ‘‘Professional’’ means any person or entity that (i) is not a broker or dealer in securities, and (ii) places more than 390 orders in listed options per day on average during a calendar month for its own beneficial account(s) pursuant to Chapter I, Section 1(a)(48). All Professional orders shall be appropriately marked by Participants. E:\FR\FM\09DEN1.SGM 09DEN1 Federal Register / Vol. 79, No. 236 / Tuesday, December 9, 2014 / Notices rljohnson on DSK3VPTVN1PROD with NOTICES Pilot Options 6 Rebates to Add Liquidity in Tiers 5, 6, 7 and 8.7 The Exchange proposes to extend Common Ownership to apply to all pricing in Chapter XV, Section 2, which would include all Customer and Professional Penny Pilot Options Rebate to Add Liquidity Tiers (1 through 8) as well as NOM Market Maker 8 Penny Pilot Options Rebate to Add Liquidity Tiers (1 through 6). It would also include any other future pricing in Chapter XV, Section 2 that specifies a certain volume threshold or volume percentage to obtain certain pricing (fees or rebates). The Exchange believes that permitting NOM Participants to aggregate pricing with affiliated NOM Participants for all pricing that requires a certain volume threshold or volume 6 The Penny Pilot was established in March 2008 and in October 2009 was expanded and extended through December 31, 2014. 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); 69787 (June 18, 2013), 78 FR 37858 (June 24, 2013) (SR–NASDAQ–2013–082) (notice of filing and immediate effectiveness and extension and replacement of Penny Pilot through December 31, 2013); 71105 (December 17, 2013), 78 FR 77530 (December 23, 2013) (SR–NASDAQ–2013–154) (notice of filing and immediate effectiveness and extension and replacement of Penny Pilot through June 30, 2014); and 79 FR 31151 (May 23, 2014), 79 FR 31151 (May 30, 2014) (SR–NASDAQ–2014– 056) ((notice of filing and immediate effectiveness and extension and replacement of Penny Pilot through December 31, 2014). See also NOM Rules, Chapter VI, Section 5. 7 For purposes of Tiers 5, 6, 7 and 8, the Exchange will allow NOM Participants under Common Ownership to aggregate their volume to qualify for the rebate. 8 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. VerDate Sep<11>2014 14:48 Dec 08, 2014 Jkt 235001 percentage will enable NOM Participants to obtain higher rebates. The Exchange proposes to amend the rule text of Chapter XV by adding the following sentence to the defined term, Common Ownership: ‘‘Common Ownership shall apply to all pricing in Chapter XV, Section 2 for which a volume threshold or volume percentage is required to obtain the pricing.’’ The Exchange proposes to remove all other references to Common Ownership currently within the rule text of Chapter XV, Section 2(1). 2. Statutory Basis NASDAQ believes that the proposed rule changes are consistent with the provisions of Section 6 of the Act,9 in general, and with Section 6(b)(4) of the Act,10 in particular, in that they provide 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 as described in detail below. The Exchange believes the rule change avoids disparate treatment of members that have divided their various business activities between separate corporate entities as compared to members that operate those business activities within a single corporate entity. By way of example, subject to appropriate information barriers, many firms that are members of the Exchange operate both a market making desk and a public customer business within the same corporate entity. In contrast, other members may be part of a corporate structure that separates those business lines into different corporate affiliates, either for business, compliance or historical reasons, and those affiliates are not also considered wholly owned affiliates. Those corporate affiliates, in turn, are required to maintain separate memberships with the Exchange. Absent the proposed change, such corporate affiliates that cannot be considered wholly owned but are under common control would not receive the same treatment as members who are considered wholly owned affiliates. Accordingly, the Exchange believes that its proposed policy is fair and equitable, and not unreasonably discriminatory in permitting both wholly owned and common control. In addition to ensuring fair and equal treatment of its members, the Exchange does not want to create incentives for its members to restructure their business operations or compliance functions simply due to the Exchange’s pricing structure. 9 15 U.S.C. 78f. U.S.C. 78f(b)(4). 10 15 PO 00000 Frm 00106 Fmt 4703 Sfmt 4703 73131 Today the Exchange offers rebates to NOM Participants under Common Ownership by permitting these members to aggregate volume as between affiliated NOM Participants. The Exchange would continue to permit NOM Participants to aggregate volume as they do today for the Customer and Professional Penny Pilot Options Rebate to Add Liquidity Tiers 5, through 8, but would also permit members to aggregate volume with respect to Customer and Professional Penny Pilot Options Rebate to Add Liquidity Tiers 1 through 4 and all NOM Market Maker Penny Pilot Options Rebate to Add Liquidity Tiers. The Exchange believes it is reasonable to permit aggregation for all volume threshold and volume percentage pricing in Chapter XV, Section 2 and not limit such aggregation to certain Tiers as it will provide NOM Participants a greater opportunity to earn rebates. The Exchange also believes that it is equitable and not unfairly discriminatory to permit aggregation for all volume threshold and volume percentage pricing in Chapter XV, Section 2 because it is offering all NOM Participants the opportunity to aggregate volume. B. Self-Regulatory Organization’s Statement on Burden on Competition NASDAQ does not believe that the proposed rule changes will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. The Exchange offers NOM Participants the opportunity to aggregate affiliated volume today and this proposal would provide additional opportunities to aggregate volume to obtain rebates. The Exchange does not believe this proposal creates an undue burden on competition as all NOM Participants have the ability to aggregate in this manner today. The Exchange believes the differing outcomes, rebates and fees created by the Exchange’s proposed pricing incentives contribute to the overall health of the market place to the benefit of all Participants that willingly choose to transact options on NOM. For the reasons specified herein, the Exchange does not believe this proposal creates an undue burden on competition. 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’s belief that the proposed rebate structure and Tiers E:\FR\FM\09DEN1.SGM 09DEN1 73132 Federal Register / Vol. 79, No. 236 / Tuesday, December 9, 2014 / Notices 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.11 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 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: rljohnson on DSK3VPTVN1PROD 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– NASDAQ–2014–114 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–2014–114. 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 11 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Sep<11>2014 14:48 Dec 08, 2014 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–2014–114, and should be submitted on or before December 30, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–28773 Filed 12–8–14; 8:45 am] BILLING CODE 8011–01–P DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Intent To Rule on Disposal of Aeronautical Property at Concord Regional Airport, Concord, NC Federal Aviation Administration (FAA), DOT. ACTION: Request for Public Comment. AGENCY: The Federal Aviation Administration is requesting public comment on a request by the City of Concord, North Carolina, owner of the Concord Regional Airport, to release for disposal a portion of airport property at the Concord Regional Airport. The request consists of approximately 2.455 acres for a new Right-Of-Way for the Poplar Tent Road, .59 acres of temporary construction easements and .088 acres of permanent utility easements. This release will be retroactive for a project that improved Poplar Tent Road by the North Carolina Department of Transportation (NCDOT) SUMMARY: 12 17 Jkt 235001 PO 00000 CFR 200.30–3(a)(12). Frm 00107 Fmt 4703 Sfmt 4703 initiated on March 12, 2012. This action is taken under the provisions of Section 125 of the Wendell H. Ford Aviation Investment Reform Act for the 21st Century (AIR 21). DATES: Comments must be received on or before January 8, 2015. ADDRESSES: Documents are available for review at the Concord Regional Airport, 9000 Aviation Blvd., Concord, NC 28027; and the FAA Memphis Airports District Office, 2600 Thousand Oaks Boulevard, Suite 2250, Memphis, TN 38118–2482. Written comments on the Sponsor’s request must be delivered or mailed to: Mr. Phillip J. Braden, Manager, Memphis Airports District Office, 2600 Thousand Oaks Boulevard, Suite 2250, Memphis, TN 38118–2482. In addition, a copy of any comments submitted to the FAA must be mailed or delivered to Mr. Rick Cloutier, Aviation Director, Concord Regional Airport Authority, 9000 Aviation Blvd., Concord, NC 28027. FOR FURTHER INFORMATION CONTACT: Mr. Michael L. Thompson, Program Manager, Federal Aviation Administration, Memphis Airports District Office, 2600 Thousand Oaks Boulevard, Suite 2250, Memphis, TN 38118–2482. The application may be reviewed in person at this same location, by appointment. SUPPLEMENTARY INFORMATION: The FAA proposes to rule and invites public comment on the request to release property for disposal at Concord Regional Airport, Concord, NC 28027 under the provisions of AIR 21 (49 U.S.C. 47107(h)(2)). On November 20, 2014, the FAA determined that the request to release property for non-aeronautical purposes at Concord Regional Airport meets the procedural requirements of the Federal Aviation Administration. The FAA may approve the request, in whole or in part, no later than January 8, 2015. The following is a brief overview of the request: The Concord Regional Airport is proposing the release of approximately 2.455 acres for new Right-Of-Way for the Poplar Tent Road, .59 acres of temporary construction easements and .088 acres of permanent utility easements, to allow improvements to Poplar Tent Road by the NCDOT. This property is located along the existing airport northern property line extending approximately 335 feet along the Poplar Tent Road. Any person may inspect, by appointment, the request in person at the FAA office listed above under FOR FURTHER INFORMATION CONTACT. E:\FR\FM\09DEN1.SGM 09DEN1

Agencies

[Federal Register Volume 79, Number 236 (Tuesday, December 9, 2014)]
[Notices]
[Pages 73130-73132]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-28773]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-73732; File No. SR-NASDAQ-2014-114]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Common Ownership

December 3, 2014.
    Pursuant to Section 19(b)(1) of the Securities Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on November 20, 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 modify the definition of Common Ownership \3\ in 
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, the Exchange proposes to extend the 
application of Common Ownership to all Chapter XV, Section 2 pricing 
which requires a certain volume threshold or percentage of volume to 
obtain certain options pricing.
---------------------------------------------------------------------------

    \3\ The term ``Common Ownership'' shall mean Participants under 
75% common ownership or control. See NOM Rules at Chapter XV.
---------------------------------------------------------------------------

    While the changes proposed herein are effective upon filing, the 
Exchange has designated that the amendments be operative on December 1, 
2014.
    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 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 governing the rebates and fees assessed for option orders 
entered into NOM. The Exchange proposes to extend the application of 
Common Ownership to all Chapter XV, Section 2 pricing which requires a 
certain volume threshold or percentage of volume to obtain certain 
options pricing. Today, NOM Participants are permitted to aggregate 
affiliate activity to obtain certain pricing as specified in Chapter 
XV, Section 2, provided the NOM Participants are affiliated because 
they are under 75% common ownership or control with each other 
(``Common Ownership''). Today, the Exchange offers NOM Participants 
under Common Ownership the ability to obtain certain Customer \4\ and 
Professional \5\ Penny

[[Page 73131]]

Pilot Options \6\ Rebates to Add Liquidity in Tiers 5, 6, 7 and 8.\7\
---------------------------------------------------------------------------

    \4\ The term ``Customer'' applies to any transaction that is 
identified by a Participant for clearing in the Customer range at 
The Options Clearing Corporation which is not for the account of 
broker or dealer or for the account of a ``Professional'' (as that 
term is defined in Chapter I, Section 1(a)(48)).
    \5\ The term ``Professional'' means any person or entity that 
(i) is not a broker or dealer in securities, and (ii) places more 
than 390 orders in listed options per day on average during a 
calendar month for its own beneficial account(s) pursuant to Chapter 
I, Section 1(a)(48). All Professional orders shall be appropriately 
marked by Participants.
    \6\ The Penny Pilot was established in March 2008 and in October 
2009 was expanded and extended through December 31, 2014. 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); 69787 (June 18, 2013), 78 FR 37858 (June 24, 
2013) (SR-NASDAQ-2013-082) (notice of filing and immediate 
effectiveness and extension and replacement of Penny Pilot through 
December 31, 2013); 71105 (December 17, 2013), 78 FR 77530 (December 
23, 2013) (SR-NASDAQ-2013-154) (notice of filing and immediate 
effectiveness and extension and replacement of Penny Pilot through 
June 30, 2014); and 79 FR 31151 (May 23, 2014), 79 FR 31151 (May 30, 
2014) (SR-NASDAQ-2014-056) ((notice of filing and immediate 
effectiveness and extension and replacement of Penny Pilot through 
December 31, 2014). See also NOM Rules, Chapter VI, Section 5.
    \7\ For purposes of Tiers 5, 6, 7 and 8, the Exchange will allow 
NOM Participants under Common Ownership to aggregate their volume to 
qualify for the rebate.
---------------------------------------------------------------------------

    The Exchange proposes to extend Common Ownership to apply to all 
pricing in Chapter XV, Section 2, which would include all Customer and 
Professional Penny Pilot Options Rebate to Add Liquidity Tiers (1 
through 8) as well as NOM Market Maker \8\ Penny Pilot Options Rebate 
to Add Liquidity Tiers (1 through 6). It would also include any other 
future pricing in Chapter XV, Section 2 that specifies a certain volume 
threshold or volume percentage to obtain certain pricing (fees or 
rebates). The Exchange believes that permitting NOM Participants to 
aggregate pricing with affiliated NOM Participants for all pricing that 
requires a certain volume threshold or volume percentage will enable 
NOM Participants to obtain higher rebates.
---------------------------------------------------------------------------

    \8\ 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.
---------------------------------------------------------------------------

    The Exchange proposes to amend the rule text of Chapter XV by 
adding the following sentence to the defined term, Common Ownership: 
``Common Ownership shall apply to all pricing in Chapter XV, Section 2 
for which a volume threshold or volume percentage is required to obtain 
the pricing.'' The Exchange proposes to remove all other references to 
Common Ownership currently within the rule text of Chapter XV, Section 
2(1).
2. Statutory Basis
    NASDAQ believes that the proposed rule changes are consistent with 
the provisions of Section 6 of the Act,\9\ in general, and with Section 
6(b)(4) of the Act,\10\ in particular, in that they provide 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 as described in detail below.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes the rule change avoids disparate treatment of 
members that have divided their various business activities between 
separate corporate entities as compared to members that operate those 
business activities within a single corporate entity. By way of 
example, subject to appropriate information barriers, many firms that 
are members of the Exchange operate both a market making desk and a 
public customer business within the same corporate entity. In contrast, 
other members may be part of a corporate structure that separates those 
business lines into different corporate affiliates, either for 
business, compliance or historical reasons, and those affiliates are 
not also considered wholly owned affiliates. Those corporate 
affiliates, in turn, are required to maintain separate memberships with 
the Exchange. Absent the proposed change, such corporate affiliates 
that cannot be considered wholly owned but are under common control 
would not receive the same treatment as members who are considered 
wholly owned affiliates. Accordingly, the Exchange believes that its 
proposed policy is fair and equitable, and not unreasonably 
discriminatory in permitting both wholly owned and common control. In 
addition to ensuring fair and equal treatment of its members, the 
Exchange does not want to create incentives for its members to 
restructure their business operations or compliance functions simply 
due to the Exchange's pricing structure.
    Today the Exchange offers rebates to NOM Participants under Common 
Ownership by permitting these members to aggregate volume as between 
affiliated NOM Participants. The Exchange would continue to permit NOM 
Participants to aggregate volume as they do today for the Customer and 
Professional Penny Pilot Options Rebate to Add Liquidity Tiers 5, 
through 8, but would also permit members to aggregate volume with 
respect to Customer and Professional Penny Pilot Options Rebate to Add 
Liquidity Tiers 1 through 4 and all NOM Market Maker Penny Pilot 
Options Rebate to Add Liquidity Tiers. The Exchange believes it is 
reasonable to permit aggregation for all volume threshold and volume 
percentage pricing in Chapter XV, Section 2 and not limit such 
aggregation to certain Tiers as it will provide NOM Participants a 
greater opportunity to earn rebates. The Exchange also believes that it 
is equitable and not unfairly discriminatory to permit aggregation for 
all volume threshold and volume percentage pricing in Chapter XV, 
Section 2 because it is offering all NOM Participants the opportunity 
to aggregate volume.

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule changes will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended. The Exchange offers 
NOM Participants the opportunity to aggregate affiliated volume today 
and this proposal would provide additional opportunities to aggregate 
volume to obtain rebates. The Exchange does not believe this proposal 
creates an undue burden on competition as all NOM Participants have the 
ability to aggregate in this manner today.
    The Exchange believes the differing outcomes, rebates and fees 
created by the Exchange's proposed pricing incentives contribute to the 
overall health of the market place to the benefit of all Participants 
that willingly choose to transact options on NOM. For the reasons 
specified herein, the Exchange does not believe this proposal creates 
an undue burden on competition. 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's belief that the 
proposed rebate structure and Tiers

[[Page 73132]]

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.\11\ 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 whether the 
proposed rule should be approved or disapproved.
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    \11\ 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-2014-114 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-2014-114. 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-2014-114, and should 
be submitted on or before December 30, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-28773 Filed 12-8-14; 8:45 am]
BILLING CODE 8011-01-P
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