Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Approving Proposed Rule Change To Adopt a Kill Switch for NOM, 62591-62592 [2015-26327]
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Federal Register / Vol. 80, No. 200 / Friday, October 16, 2015 / Notices
whether a consulting fee would be
charged.
Listing Fees and Annual Fees
applicable to Derivatives Securities
Products would remain unchanged.
2. Statutory Basis
NYSE Arca believes that the proposal
is consistent with Section 6(b) 7 of the
Act, in general, and Section 6(b)(4) 8 of
the Act in particular, in that it provides
for the equitable allocation of reasonable
dues, fees and other charges among its
issuers and other persons using its
facilities. In addition, the Exchange
believes the proposal is consistent with
the requirement under Section 6(b)(5) 9
that an exchange have rules that are
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to, and
perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest. The
proposed elimination of the Sponsor
Fee is equitable and does not unfairly
discriminate between issuers because it
would apply uniformly to all Sponsors.
The Exchange believes elimination of
the Sponsor Fee is reasonable in that it
constitutes a reduction in fees for
Sponsors. Notwithstanding the
elimination of the Sponsor Fee, the
Exchange will continue to be able to
fund its regulatory obligations.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purpose of the Act. The Exchange
believes the proposed rule change
would promote competition because it
will permit the Exchange to better
compete with other exchanges that do
not charge a fee similar to the Sponsor
Fee.
srobinson on DSK5SPTVN1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 10 of the Act and
7 15
U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(4).
9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78s(b)(3)(A).
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18:54 Oct 15, 2015
subparagraph (f)(2) of Rule 19b–4 11
thereunder, because it establishes a due,
fee, or other charge imposed by the
Exchange.
At any time within 60 days of the
filing of such 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
under Section 19(b)(2)(B) 12 of the Act to
determine whether the proposed rule
change 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, as modified by Amendment No.
1, 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–
NYSEArca–2015–91 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–NYSEArca–2015–91. 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
11 17
12 15
Jkt 238001
PO 00000
CFR 240.19b–4(f)(2).
U.S.C. 78s(b)(2)(B).
Frm 00079
Fmt 4703
Sfmt 4703
62591
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 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–
NYSEArca–2015–91 and should be
submitted on or before November 6,
2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–26324 Filed 10–15–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34-76123; File No. SRNASDAQ-2015-096]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Order
Approving Proposed Rule Change To
Adopt a Kill Switch for NOM
October 9, 2015.
I. Introduction
On August 7, 2015, The NASDAQ
Stock Market LLC 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
adopt a risk protection functionality
referred to as a kill switch that will be
available to all Participants of the
NASDAQ Options Market (‘‘Exchange’’
or ‘‘NOM’’). The proposed rule change
was published for comment in the
FEDERAL REGISTER on August 26, 2015.3
The Commission received no comment
letters on the proposed rule change.
This order approves the proposed rule
change.
II. Description of the Proposed Rule
Change
The Exchange proposes to offer to all
its members a new optional risk
protection functionality for options to
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 75743
(August 26, 2015), 80 FR 51850 (‘‘Notice’’).
1 15
E:\FR\FM\16OCN1.SGM
16OCN1
62592
Federal Register / Vol. 80, No. 200 / Friday, October 16, 2015 / Notices
help members control their quote and
order activity on NOM.4 Referred to as
a ‘‘Kill Switch,’’ the functionality will
allow NOM Participants to remove
quotes and cancel open orders, and will
prevent the submission of new quotes
and orders until the Exchange reenables access to the NOM System for
the Participant.5
To use the Kill Switch, a Participant
will send a message 6 to the NOM
System to: (i) Promptly remove quotes;
and/or (ii) promptly cancel orders for
certain specified Identifiers (e.g., a
particular Exchange account, port, or
badge or mnemonic, or for a group of
Identifiers).7 The Exchange’s proposal
does not allow Participants to remove
quotes or cancel orders by symbol. The
NOM System will send an automated
message to the Participant when it has
processed a Kill Switch request.
The NOM Participant will be unable
to enter any new quotes or orders using
the affected Identifier(s) until the
Participant makes a verbal request to the
Exchange and Exchange staff enables reentry. Once enabled for re-entry, the
Exchange will send a message to the
Participant and, if it requests to receive
such notifications, to the Participant’s
clearing firm as well.
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange,8 and, in particular,
the requirements of Section 6 of the
Act.9 In particular, the Commission
finds that the proposed rule change is
consistent with Section 6(b)(5) of the
Act,10 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
4 See
id.
srobinson on DSK5SPTVN1PROD with NOTICES
5 Orders
submitted by NOM Market Makers over
Ouch to Trade Options (‘‘OTTO’’) interface will be
treated as quotes for purposes of this rule. See
Notice, supra note 3, at 51850.
6 NOM Participants will be able to utilize an
interface to send a message to the Exchange to
initiate the Kill Switch, or they may contact the
Exchange directly. See Notice, supra note 3, at note
3.
7 Permissible groups could be formed only within
a single broker-dealer. For example, a group could
include, but would not be limited to, all market
maker accounts or all order entry ports. See Notice,
supra note 3, at 51850.
8 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
9 15 U.S.C. 78f.
10 15 U.S.C. 78f(b)(5).
VerDate Sep<11>2014
18:54 Oct 15, 2015
Jkt 238001
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest and that the rules are not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
According to the Exchange, the
proposed rule change is designed to
protect Participants in the event that the
Participant encounters a situation, like a
systems issue, for which they would
like to withdraw temporarily from the
market.11 The Exchange further notes
that the proposed Kill Switch is
designed to increase systemic
protections and, in so doing, should
encourage liquidity generally while
removing impediments to market
participation.12 To the extent that the
Exchange’s proposal provides member
firms with greater control over their
quotes and orders, and allows firms to
remove quotes and cancel orders in an
appropriate manner, then the proposal
may encourage firms to provide
liquidity on NOM and thus contribute to
fair and orderly markets in a manner
that protects the public interest, protects
investors, and is not designed to permit
unfair discrimination.
Further, the Commission agrees that it
would be appropriate to notify a
Participant’s clearing member, at the
clearing member’s request, once a
Participant’s selected Identifiers are reenabled following the Participant’s use
of the Kill Switch. Because the clearing
member accepts financial responsibility
for clearing the Participant’s trades,
notifying the applicable clearing
member of a Participant’s re-enabled
Identifiers following use of the Kill
Switch may be appropriate and help the
clearing member manage the risk
associated with the Participant’s trading
activity.
The Commission notes that the
Exchange represented in its proposal
that the Kill Switch will operate
consistently with a broker-dealer’s firm
quote obligations pursuant to Rule 602
of Regulation NMS,13 and that the
proposal does not diminish a marketmaker’s obligation to provide
continuous two-sided quotes on a daily
basis under NOM rules.14 Specifically,
the Exchange represents that ‘‘any
interest that is executable against a
Notice, supra note 3, at 51851.
id.
13 See id.
14 See id.
NOM Participant’s quotes and orders
that are received by the Exchange prior
to the time the Kill Switch is processed
by the System will automatically
execute at the price up to the NOM
Participant’s size.’’ 15 In that respect, the
Exchange further represented that ‘‘[t]he
Kill Switch message will be accepted by
the System in the order of receipt in the
queue and will be processed in that
order so that interest that is already
accepted into the System will be
processed prior to the Kill Switch
message.’’ 16 Based on these
representations, the Commission
believes that the proposal is designed to
promote just and equitable principles of
trade and perfect the mechanism of a
free and open market.
Accordingly, the Commission finds
that the Exchange’s proposal is
consistent with the Act, including
Section 6(b)(5) thereof, in that it is
designed to promote just and equitable
principles of trade, foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, protect investors and the public
interest.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,17 that the
proposed rule change (SR–NASDAQ–
2015–096) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–26327 Filed 10–15–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–76063A; File No. SR–
NYSEARCA–2015–81]
Self-Regulatory Organizations; Notice
of Filing of Proposed Rule Change
Amending Several Rules To Address
Certain Order Handling Obligations on
the Part of Its Floor Brokers
October 9, 2015.
Securities and Exchange
Commission.
ACTION: Notice; correction.
AGENCY:
11 See
15 Id.
12 See
16 Id.
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
17 15
18 17
E:\FR\FM\16OCN1.SGM
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
16OCN1
Agencies
[Federal Register Volume 80, Number 200 (Friday, October 16, 2015)]
[Notices]
[Pages 62591-62592]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-26327]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-76123; File No. SR-NASDAQ-2015-096]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order
Approving Proposed Rule Change To Adopt a Kill Switch for NOM
October 9, 2015.
I. Introduction
On August 7, 2015, The NASDAQ Stock Market LLC 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 adopt a risk
protection functionality referred to as a kill switch that will be
available to all Participants of the NASDAQ Options Market
(``Exchange'' or ``NOM''). The proposed rule change was published for
comment in the Federal Register on August 26, 2015.\3\ The Commission
received no comment letters on the proposed rule change. This order
approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 75743 (August 26,
2015), 80 FR 51850 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposed Rule Change
The Exchange proposes to offer to all its members a new optional
risk protection functionality for options to
[[Page 62592]]
help members control their quote and order activity on NOM.\4\ Referred
to as a ``Kill Switch,'' the functionality will allow NOM Participants
to remove quotes and cancel open orders, and will prevent the
submission of new quotes and orders until the Exchange re-enables
access to the NOM System for the Participant.\5\
---------------------------------------------------------------------------
\4\ See id.
\5\ Orders submitted by NOM Market Makers over Ouch to Trade
Options (``OTTO'') interface will be treated as quotes for purposes
of this rule. See Notice, supra note 3, at 51850.
---------------------------------------------------------------------------
To use the Kill Switch, a Participant will send a message \6\ to
the NOM System to: (i) Promptly remove quotes; and/or (ii) promptly
cancel orders for certain specified Identifiers (e.g., a particular
Exchange account, port, or badge or mnemonic, or for a group of
Identifiers).\7\ The Exchange's proposal does not allow Participants to
remove quotes or cancel orders by symbol. The NOM System will send an
automated message to the Participant when it has processed a Kill
Switch request.
---------------------------------------------------------------------------
\6\ NOM Participants will be able to utilize an interface to
send a message to the Exchange to initiate the Kill Switch, or they
may contact the Exchange directly. See Notice, supra note 3, at note
3.
\7\ Permissible groups could be formed only within a single
broker-dealer. For example, a group could include, but would not be
limited to, all market maker accounts or all order entry ports. See
Notice, supra note 3, at 51850.
---------------------------------------------------------------------------
The NOM Participant will be unable to enter any new quotes or
orders using the affected Identifier(s) until the Participant makes a
verbal request to the Exchange and Exchange staff enables re-entry.
Once enabled for re-entry, the Exchange will send a message to the
Participant and, if it requests to receive such notifications, to the
Participant's clearing firm as well.
III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange,\8\
and, in particular, the requirements of Section 6 of the Act.\9\ In
particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\10\ 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, to foster cooperation
and coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest and that the rules are not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
---------------------------------------------------------------------------
\8\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f.
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
According to the Exchange, the proposed rule change is designed to
protect Participants in the event that the Participant encounters a
situation, like a systems issue, for which they would like to withdraw
temporarily from the market.\11\ The Exchange further notes that the
proposed Kill Switch is designed to increase systemic protections and,
in so doing, should encourage liquidity generally while removing
impediments to market participation.\12\ To the extent that the
Exchange's proposal provides member firms with greater control over
their quotes and orders, and allows firms to remove quotes and cancel
orders in an appropriate manner, then the proposal may encourage firms
to provide liquidity on NOM and thus contribute to fair and orderly
markets in a manner that protects the public interest, protects
investors, and is not designed to permit unfair discrimination.
---------------------------------------------------------------------------
\11\ See Notice, supra note 3, at 51851.
\12\ See id.
---------------------------------------------------------------------------
Further, the Commission agrees that it would be appropriate to
notify a Participant's clearing member, at the clearing member's
request, once a Participant's selected Identifiers are re-enabled
following the Participant's use of the Kill Switch. Because the
clearing member accepts financial responsibility for clearing the
Participant's trades, notifying the applicable clearing member of a
Participant's re-enabled Identifiers following use of the Kill Switch
may be appropriate and help the clearing member manage the risk
associated with the Participant's trading activity.
The Commission notes that the Exchange represented in its proposal
that the Kill Switch will operate consistently with a broker-dealer's
firm quote obligations pursuant to Rule 602 of Regulation NMS,\13\ and
that the proposal does not diminish a market-maker's obligation to
provide continuous two-sided quotes on a daily basis under NOM
rules.\14\ Specifically, the Exchange represents that ``any interest
that is executable against a NOM Participant's quotes and orders that
are received by the Exchange prior to the time the Kill Switch is
processed by the System will automatically execute at the price up to
the NOM Participant's size.'' \15\ In that respect, the Exchange
further represented that ``[t]he Kill Switch message will be accepted
by the System in the order of receipt in the queue and will be
processed in that order so that interest that is already accepted into
the System will be processed prior to the Kill Switch message.'' \16\
Based on these representations, the Commission believes that the
proposal is designed to promote just and equitable principles of trade
and perfect the mechanism of a free and open market.
---------------------------------------------------------------------------
\13\ See id.
\14\ See id.
\15\ Id.
\16\ Id.
---------------------------------------------------------------------------
Accordingly, the Commission finds that the Exchange's proposal is
consistent with the Act, including Section 6(b)(5) thereof, in that it
is designed to promote just and equitable principles of trade, foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, protect investors and the public interest.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\17\ that the proposed rule change (SR-NASDAQ-2015-096) be, and
hereby is, approved.
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(2).
\18\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-26327 Filed 10-15-15; 8:45 am]
BILLING CODE 8011-01-P