Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NASDAQ Rules 7014, 14427-14428 [2015-06264]

Download as PDF Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices generally and specific penny stock transactions. The Commission estimates that approximately 221 broker-dealers will spend an average of 87 hours annually to comply with this rule. Thus, the total compliance burden is approximately 19,245 burden-hours per year. Rule 15g–4 contains record retention requirements. Compliance with the rule is mandatory. The required records are available only to the examination staff of the Commission and the self regulatory organizations of which the broker-dealer is a member. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information under the PRA unless it displays a currently valid OMB control number. The public may view background documentation for this information collection at the following Web site: www.reginfo.gov. Comments should be directed to: (i) Desk Officer for the Securities and Exchange Commission, Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10102, New Executive Office Building, Washington, DC 20503 or by sending an email to: Shagufta_ Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or by sending an email to PRA_ Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. with the Securities and Exchange Commission (‘‘Commission’’) a 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. Dated: March 13, 2015. Brent J. Fields, Secretary. [FR Doc. 2015–06313 Filed 3–18–15; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P 1. Purpose SECURITIES AND EXCHANGE COMMISSION [Release No. 34–74506; File No. SR– NASDAQ–2015–020] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NASDAQ Rules 7014 Rmajette on DSK2VPTVN1PROD with NOTICES March 13, 2015. 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 March 2, 2015, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’) filed 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 15:18 Mar 18, 2015 Jkt 235001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASDAQ is proposing changes to the Investor Support Program (‘‘ISP’’) and the Qualified Market Maker (‘‘QMM’’) Incentive Program under NASDAQ Rule 7014. The text of the proposed rule change is available at nasdaq.cchwallstreet.com, at NASDAQ’s principal office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASDAQ included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. NASDAQ is proposing to amend NASDAQ Rule 7014(c) to remove a member’s ISP credit at the $0.00005 rate with respect to all shares of displayed liquidity that are executed at a price of $1 or more in the Nasdaq Market Center during a given month, as well as the related qualifying requirements for an ISP member to qualify for such a credit. Also, the Exchange is proposing to amend NASDAQ Rule 7014(e)(1) to apply QMM rebates only to securities listed on NYSE (‘‘Tape A’’) and securities listed on exchanges other than NASDAQ and NYSE (‘‘Tape B’’). Specifically, only Tape A and Tape B securities will be eligible to receive the additional QMM rebate of $0.0002 per share executed with respect to orders that are executed at a price of $1 or more and (A) displayed a quantity of at least one round lot at the time of PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 14427 execution; (B) either established the NBBO or was the first order posted on NASDAQ that had the same price as an order posted at another trading center with a protected quotation that established the NBBO; (C) were entered through a QMM MPID; and (D) that no additional rebate will be issued with respect to Designated Retail Orders (as defined in NASDAQ Rule 7018) (‘‘Additional QMM Rebate Criteria’’).3 Similarly, the Exchange is proposing to amend NASDAQ Rule 7014(e)(2) to have only Tape A and Tape B securities receive the credit of $0.0001 per share executed with respect to all other displayed orders (other than Designated Retail Orders, as defined in Rule 7018) in securities priced at $1 or more per share that provide liquidity and that are entered through a QMM MPID. The proposed changes are intended to better align credits within the ISP and QMM programs, as well as to fix a typographical error in the rule text of NASDAQ Rule 7014(e)(1). 2. Statutory Basis NASDAQ believes that the proposed rule change is consistent with the provisions of section 6 of the Act,4 in general, and with sections 6(b)(4) and 6(b)(5) of the Act,5 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. NASDAQ believes that the proposed changes to the ISP Program in NASDAQ Rule 7014(c) is reasonable because it eliminates an unnecessary credit, and related qualifying requirements, at the $0.00005 rate with respect to all shares of displayed liquidity that are executed at a price of $1 or more in the Nasdaq Market Center during a given month. The Exchange believes that the two other credit tiers that remain available to ISP members provide sufficient incentive. Also, the credit proposed to be eliminated is the least economically advantageous to ISP members. The Exchange also believes this change is consistent with a fair allocation of a reasonable fee and not unfairly discriminatory because the removal of this credit applies to all ISP members equally. 3 The correction of a typographical error in the numbering in the middle of NASDAQ Rule 7014(e)(1) will also be included (changing a ‘‘(4)’’ to (‘‘E’’)). 4 15 U.S.C. 78f. 5 15 U.S.C. 78f(b)(4) and (5). E:\FR\FM\19MRN1.SGM 19MRN1 14428 Federal Register / Vol. 80, No. 53 / Thursday, March 19, 2015 / Notices The Exchange believes that the proposed change to the QMM Program in NASDAQ Rule 7014(e)(1) of only having Tape A and Tape B securities be eligible to receive the additional QMM rebate of $0.0002 per share executed with respect to orders that are executed at a price of $1 or more and that meet the Additional QMM Rebate Criteria, is reasonable because the Exchange believes that firms no longer need the additional incentive to quote at the NBBO in Nasdaq-listed securities (‘‘Tape C’’). The Exchange also believes this change is consistent with a fair allocation of a reasonable fee and not unfairly discriminatory because the additional rebate only applying to Tape A and Tape B securities will apply uniformly to all QMM members. The Exchange also believes that the proposed change to the QMM Program in NASDAQ Rule 7014(e)(2) of only having Tape A and Tape B securities receive the additional QMM credit of $0.0001 per share executed with respect to all other displayed orders (other than Designated Retail Orders, as defined in Rule 7018) in securities priced at $1 or more per share that provide liquidity and that are entered through a QMM MPID is reasonable because the Exchange believes that firms no longer need the additional incentive to quote in Tape C. The Exchange also believes that this change is consistent with a fair allocation of a reasonable fee and not unfairly discriminatory because the additional QMM credit only applying to Tape A and Tape B securities will apply uniformly to all QMM members. Rmajette on DSK2VPTVN1PROD with NOTICES 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.6 NASDAQ notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive, or rebate opportunities available at other venues to be more favorable. In such an environment, NASDAQ must continually adjust its fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their own fees in response, and because market 6 15 U.S.C. 78f(b)(8). VerDate Sep<11>2014 15:18 Mar 18, 2015 participants may readily adjust their order routing practices, NASDAQ believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited or even non-existent. In this instance, the changes to credits for the ISP and QMM programs do not impose a burden on competition because these NASDAQ incentive programs remain in place, still offer economically advantageous credits, and are reflective of the need for exchanges to offer and to let the financial incentives to attract order flow evolve. While the Exchange does not believe that the proposed changes will result in any burden on competition, if the changes proposed herein are unattractive to market participants it is likely that NASDAQ will lose market share as a result. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act.7 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 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–2015–020 on the subject line. Jkt 235001 PO 00000 U.S.C. 78s(b)(3)(A)(ii). Frm 00072 Fmt 4703 Sfmt 4703 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Brent J. Fields, Secretary. [FR Doc. 2015–06264 Filed 3–18–15; 8:45 am] 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: 7 15 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–2015–020. 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 filing also will also 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–2015–020, and should be submitted on or before April 9, 2015. BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, Washington, DC 20549–2736. Extension: Rule 15g-3, SEC File No. 270–346, OMB Control No. 3235–0392. 8 17 CFR 200.30–3(a)(12). E:\FR\FM\19MRN1.SGM 19MRN1

Agencies

[Federal Register Volume 80, Number 53 (Thursday, March 19, 2015)]
[Notices]
[Pages 14427-14428]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06264]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74506; File No. SR-NASDAQ-2015-020]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend NASDAQ Rules 7014

March 13, 2015.
    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 March 2, 2015, The NASDAQ Stock Market LLC (``NASDAQ'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASDAQ is proposing changes to the Investor Support Program 
(``ISP'') and the Qualified Market Maker (``QMM'') Incentive Program 
under NASDAQ Rule 7014.
    The text of the proposed rule change is available at 
nasdaq.cchwallstreet.com, at NASDAQ's principal office, and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NASDAQ included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of those statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ is proposing to amend NASDAQ Rule 7014(c) to remove a 
member's ISP credit at the $0.00005 rate with respect to all shares of 
displayed liquidity that are executed at a price of $1 or more in the 
Nasdaq Market Center during a given month, as well as the related 
qualifying requirements for an ISP member to qualify for such a credit.
    Also, the Exchange is proposing to amend NASDAQ Rule 7014(e)(1) to 
apply QMM rebates only to securities listed on NYSE (``Tape A'') and 
securities listed on exchanges other than NASDAQ and NYSE (``Tape B''). 
Specifically, only Tape A and Tape B securities will be eligible to 
receive the additional QMM rebate of $0.0002 per share executed with 
respect to orders that are executed at a price of $1 or more and (A) 
displayed a quantity of at least one round lot at the time of 
execution; (B) either established the NBBO or was the first order 
posted on NASDAQ that had the same price as an order posted at another 
trading center with a protected quotation that established the NBBO; 
(C) were entered through a QMM MPID; and (D) that no additional rebate 
will be issued with respect to Designated Retail Orders (as defined in 
NASDAQ Rule 7018) (``Additional QMM Rebate Criteria'').\3\
---------------------------------------------------------------------------

    \3\ The correction of a typographical error in the numbering in 
the middle of NASDAQ Rule 7014(e)(1) will also be included (changing 
a ``(4)'' to (``E'')).
---------------------------------------------------------------------------

    Similarly, the Exchange is proposing to amend NASDAQ Rule 
7014(e)(2) to have only Tape A and Tape B securities receive the credit 
of $0.0001 per share executed with respect to all other displayed 
orders (other than Designated Retail Orders, as defined in Rule 7018) 
in securities priced at $1 or more per share that provide liquidity and 
that are entered through a QMM MPID.
    The proposed changes are intended to better align credits within 
the ISP and QMM programs, as well as to fix a typographical error in 
the rule text of NASDAQ Rule 7014(e)(1).
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of section 6 of the Act,\4\ in general, and with 
sections 6(b)(4) and 6(b)(5) of the Act,\5\ 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    NASDAQ believes that the proposed changes to the ISP Program in 
NASDAQ Rule 7014(c) is reasonable because it eliminates an unnecessary 
credit, and related qualifying requirements, at the $0.00005 rate with 
respect to all shares of displayed liquidity that are executed at a 
price of $1 or more in the Nasdaq Market Center during a given month. 
The Exchange believes that the two other credit tiers that remain 
available to ISP members provide sufficient incentive. Also, the credit 
proposed to be eliminated is the least economically advantageous to ISP 
members. The Exchange also believes this change is consistent with a 
fair allocation of a reasonable fee and not unfairly discriminatory 
because the removal of this credit applies to all ISP members equally.

[[Page 14428]]

    The Exchange believes that the proposed change to the QMM Program 
in NASDAQ Rule 7014(e)(1) of only having Tape A and Tape B securities 
be eligible to receive the additional QMM rebate of $0.0002 per share 
executed with respect to orders that are executed at a price of $1 or 
more and that meet the Additional QMM Rebate Criteria, is reasonable 
because the Exchange believes that firms no longer need the additional 
incentive to quote at the NBBO in Nasdaq-listed securities (``Tape 
C''). The Exchange also believes this change is consistent with a fair 
allocation of a reasonable fee and not unfairly discriminatory because 
the additional rebate only applying to Tape A and Tape B securities 
will apply uniformly to all QMM members.
    The Exchange also believes that the proposed change to the QMM 
Program in NASDAQ Rule 7014(e)(2) of only having Tape A and Tape B 
securities receive the additional QMM credit of $0.0001 per share 
executed with respect to all other displayed orders (other than 
Designated Retail Orders, as defined in Rule 7018) in securities priced 
at $1 or more per share that provide liquidity and that are entered 
through a QMM MPID is reasonable because the Exchange believes that 
firms no longer need the additional incentive to quote in Tape C.
    The Exchange also believes that this change is consistent with a 
fair allocation of a reasonable fee and not unfairly discriminatory 
because the additional QMM credit only applying to Tape A and Tape B 
securities will apply uniformly to all QMM members.

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.\6\ NASDAQ notes 
that it operates in a highly competitive market in which market 
participants can readily favor competing venues if they deem fee levels 
at a particular venue to be excessive, or rebate opportunities 
available at other venues to be more favorable. In such an environment, 
NASDAQ must continually adjust its fees to remain competitive with 
other exchanges and with alternative trading systems that have been 
exempted from compliance with the statutory standards applicable to 
exchanges. Because competitors are free to modify their own fees in 
response, and because market participants may readily adjust their 
order routing practices,
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    NASDAQ believes that the degree to which fee changes in this market 
may impose any burden on competition is extremely limited or even non-
existent. In this instance, the changes to credits for the ISP and QMM 
programs do not impose a burden on competition because these NASDAQ 
incentive programs remain in place, still offer economically 
advantageous credits, and are reflective of the need for exchanges to 
offer and to let the financial incentives to attract order flow evolve. 
While the Exchange does not believe that the proposed changes will 
result in any burden on competition, if the changes proposed herein are 
unattractive to market participants it is likely that NASDAQ will lose 
market share as a result.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing change has become effective pursuant to section 
19(b)(3)(A)(ii) of the Act.\7\ 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

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-2015-020 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-2015-020. 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 filing also will also 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-2015-020, and should be submitted on or before April 9, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2015-06264 Filed 3-18-15; 8:45 am]
BILLING CODE 8011-01-P
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