Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Include U.S. Non-Display Policies in the Nasdaq Rule Book, 15600-15602 [2016-06454]
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15600
Federal Register / Vol. 81, No. 56 / Wednesday, March 23, 2016 / Notices
jstallworth on DSK7TPTVN1PROD with NOTICES
to Commission regulation of securitybased swap data repositories (‘‘SDR’’),
the DFA Effective Date Order provided
exemptions from Exchange Act Sections
13(n)(5)(D)(i), 13(n)(5)(F), 13(n)(5)(G),
13(n)(5)(H), 13(n)(7)(A), 13(n)(7)(B), and
13(n)(7)(C), each of which will expire on
the earlier of (1) the date the
Commission grants registration to an
SDR and (2) the earliest compliance date
set forth in any of the final rules
regarding the registration of SDRs.2 The
DFA Effective Date Order also provided
an exemption from Exchange Act
Section 29(b) with respect to provisions
of the Exchange Act amended or added
by subtitle B of the Dodd-Frank Act for
which compliance is triggered by
registration or by adoption of final rules
by the Commission, or for which the
Commission has provided an exception
or exemptive relief, until such date as
the Commission specifies.3 Absent other
Commission action, these exemptions
relevant to SDRs (‘‘SDR Relief’’) will
expire as of March 18, 2016, as further
explained below.
In February 2015, the Commission
adopted Rules 13n–11 to 13n–112 under
the Exchange Act to govern SDRs (the
‘‘SDR Rules’’). The SDR Rules became
effective on May 18, 2015.4 The SDR
Rules Release states that SDRs must be
in compliance with the SDR Rules by
March 18, 2016, which is 365 days after
publication of the SDR Rules in the
Federal Register (the ‘‘SDR Rules
Compliance Date’’).5 The SDR Rules
Release also notes that (1) absent an
exemption, any SDR must be registered
with the Commission and in compliance
with the federal securities laws and the
rules and regulations thereunder
(including the applicable Dodd-Frank
Act provisions and all of the SDR Rules)
by the SDR Rules Compliance Date, and
(2) all exemptions that the Commission
provided in the DFA Effective Date
Order will expire on the compliance
date, including the exemptions set forth
in the DFA Effective Date Order.6 The
SDR Rules govern the SDR registration
process, duties, and core principles. The
12 core SDR Rules establish a
framework for SDRs to register with the
Commission by filing a new Form SDR,
and require an SDR to update its Form
Exchange Act Applicable to Security-Based Swaps,
Exchange Act Release No. 64678 (June 15, 2011), 76
FR 36287 (June 22, 2011) (the ‘‘DFA Effective Date
Order’’).
2 See DFA Effective Date Order, 76 FR at 36306.
3 See DFA Effective Date Order, 76 FR at 36305–
36306.
4 See Exchange Act Release No. 74246 (Feb. 11,
2015), 80 FR 14438 (Mar. 19, 2015) (‘‘SDR Rules
Release’’).
5 See SDR Rules Release, 80 FR at 14456.
6 See id.
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SDR when any information becomes
inaccurate. The SDR Rules also provide
a process for the Commission to cancel
or revoke the registration of an SDR.
In addition to the requirements set
forth in the SDR Rules, there are a
number of regulatory requirements
applicable to SDRs once registered
under Regulation SBSR, which was
adopted by the Commission at the same
time as the SDR Rules.7 Regulation
SBSR provides for the reporting of
security-based swap information to
registered SDRs, and the public
dissemination of security-based swap
transaction, volume, and pricing
information by registered SDRs. Rule
907 of Regulation SBSR requires a
registered SDR to establish and maintain
written policies and procedures for
carrying out its duties under Regulation
SBSR.8
II. Discussion
The Commission is using its authority
under Section 36 of the Exchange Act to
grant a temporary exemption from
compliance with the SDR Rules until
June 30, 2016 and to extend the SDR
Relief so that it will expire on the earlier
of (1) the date the Commission grants
registration to an SDR and (2) June 30,
2016. The temporary exemption is
designed to help facilitate the potential
submission of any SDR applications.
Subject to certain exceptions, Section
36 of the Exchange Act 9 authorizes the
Commission, by rule, regulation, or
order, to exempt, either conditionally or
unconditionally, any person, security,
or transaction, or any class or classes of
persons, securities, or transactions, from
any provision or provisions of the
Exchange Act or any rule or regulation
thereunder, to the extent that such
exemption is necessary or appropriate
in the public interest, and is consistent
with the protection of investors. The
Commission finds that it is necessary
and appropriate in the public interest,
and consistent with the protection of
investors to grant a temporary
exemption from compliance with the
SDR Rules until June 30, 2016. The SDR
Rules implement mandates under Title
VII of the Dodd-Frank Act and govern
the SDR registration process, duties and
core principles.
The Commission notes that the SDR
Rules Compliance Date is less than one
month away. The Commission believes
that granting the temporary exemption
along with an extension of the SDR
Relief will give additional time to
7 See Exchange Act Release No. 74244 (Feb. 11,
2015), 80 FR 14563 (Mar. 19, 2015).
8 See 17 CFR 242.907.
9 15 U.S.C. 78mm.
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
potential SDR registrants to thoroughly
develop and prepare a complete
application for registration. Notices of
completed Forms SDR will be published
to afford interested persons an
opportunity to submit written
comments concerning such
application.10 Given the SDR Rules
Compliance Date, the temporary
exemption should also provide staff
sufficient time to analyze adequately
any application materials that may be
submitted.
II. Conclusion
Accordingly, the Commission hereby
grants, pursuant to Section 36 of the
Exchange Act, a temporary exemption
from compliance with the SDR Rules
until June 30, 2016, and an extension of
the SDR Relief such that it will expire
on the earlier of (1) the date the
Commission grants registration to an
SDR and (2) June 30, 2016.
By the Commission.
Brent J. Fields,
Secretary.
[FR Doc. 2016–06546 Filed 3–22–16; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77392; File No. SR–
NASDAQ–2016–036]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Include U.S.
Non-Display Policies in the Nasdaq
Rule Book
March 17, 2016.
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 4,
2016, 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 the Exchange. The
Commission is publishing this notice to
10 In the SDR Rules Release, the Commission
stated that if a person files an amendment to its
application for registration after the Commission
has already published notice of the filing of its
Form SDR and the Commission finds that the
amendment renders the prior filing materially
incomplete, then the 90-day period pursuant to
Rule 13n–11(c) will reset from the time that the
Commission deems the amended application to be
complete for the Commission’s review.
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Federal Register / Vol. 81, No. 56 / Wednesday, March 23, 2016 / Notices
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 include
U.S. non-display policies in the Nasdaq
rule book under Nasdaq Rule 7023.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://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
jstallworth on DSK7TPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to amend
Nasdaq Rule 7023 (NASDAQ Depth-ofBook Data) by adding IM–7023–1.
Nasdaq Rule 7023(a)(2)(B) defines
‘‘Non-Display Usage’’ as any method of
accessing depth-of-book 3 ‘‘data that
involves access or use by a machine or
automated device without access or use
of a display by a natural person or
persons.’’ IM–7023–1 will incorporate
guidance regarding U.S. non-display
policies into the Nasdaq rule book to
provide additional detail with regard to
specific data usages and thereby ensure
greater transparency. The inclusion of
these policies into the Nasdaq rule book
will lessen ambiguity in this area
without necessitating any changes by
market participants. The Exchange has
been working with both the industry
and customers to ensure that they
understand these policies.
Specifically, IM–7023–1 will, in large
part, include guidance regarding: (i)
Devices (or servers) used in the
3 See Nasdaq Rule 7023(a)(1), which states that
‘‘Depth-of-Book’’ refers to data feeds containing
price quotations at more than one price level. These
Nasdaq data feeds include Nasdaq Level 2, Nasdaq
OpenView, and Nasdaq TotalView.
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transportation, dissemination or
aggregation of data and ways to count
such devices; (ii) examples and details
of what constitutes fee-liable NonDisplay Usage; (iii) examples and details
of what Non-Display Usage does not
include; and (iv) examples of how to
report Non-Display Usage.
IM–7023–1 will apply most
specifically to distributors 4 who access
Nasdaq U.S information and use it in a
non-display manner. IM–7023–1 will
also provide guidance in the form of
examples of use cases and details on
how the Nasdaq U.S. non-display
policies should be applied and reported.
The Exchange believes that it will be
beneficial to both distributors
specifically and to market participants
more generally to incorporate these
policies into the Nasdaq rule book
through the addition of IM–7023–1, as
well as adding IM–7026–1, IM–7037–1,
IM–7039–1, IM–7047–1, and IM–7057–
1 (collectively, the ‘‘IMs’’) that will be
added following each of their respective
rules and each refers back to IM–7023–
1.
The result will be to provide
distributors additional clarity through
increased transparency into U.S. nondisplay policies, including reporting
requirements pertaining to non-display
usage. The presentation of this guidance
in a more transparent manner will, in
turn, provide distributors with greater
precision in making fee-liable NonDisplay Usage determinations.
These policies are a result of the
Exchange working with the industry, as
well as soliciting feedback from
customers. Technology changes that
create any new use cases will result in
a separate Nasdaq filing. These U.S.
non-display policies already are
publicly available and can be found at
https://www.nasdaqtrader.com/
Trader.aspx?id=GDP_Ops, but their
inclusion into the Exchange’s rule book
provides an additional way for market
participants to easily find and review
such policies.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 5 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act 6 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
4 See
Nasdaq Rule 7023(a)(4).
U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(4) and (5).
5 15
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
15601
unfair discrimination between
customers, issuers, brokers, or dealers,
and is consistent with the Section
6(b)(5) 7 requirements that the rules of
an exchange be designed to promote just
and equitable principles of trade, to
prevent fraudulent and manipulative
acts and practices, to foster cooperation
and coordination with persons engaged
in facilitating transactions in securities,
to remove impediments to and to perfect
the mechanism for a free and open
market and a national market system,
and, in general, to protect investors and
the public interest.
The Commission and the courts have
repeatedly expressed their preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. In Regulation NMS, while
adopting a series of steps to improve the
current market model, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 8
Likewise, in NetCoalition v. Securities
and Exchange Commission 9
(‘‘NetCoalition’’) the DC Circuit upheld
the Commission’s use of a market-based
approach in evaluating the fairness of
market data fees against a challenge
claiming that Congress mandated a costbased approach.10 As the court
emphasized, the Commission ‘‘intended
in Regulation NMS that ‘market forces,
rather than regulatory requirements’
play a role in determining the market
data . . . to be made available to
investors and at what cost.’’ 11
Further, ‘‘[n]o one disputes that
competition for order flow is ‘fierce.’
. . . As the SEC explained, ‘[i]n the U.S.
national market system, buyers and
sellers of securities, and the brokerdealers that act as their order-routing
agents, have a wide range of choices of
where to route orders for execution’;
[and] ‘no exchange can afford to take its
market share percentages for granted’
because ‘no exchange possesses a
monopoly, regulatory or otherwise, in
the execution of order flow from broker
7 15
U.S.C. 78f(b)(5).
Exchange Act Release No. 51808 at
37499 (June 9, 2005) (‘‘Regulation NMS Adopting
Release’’).
9 NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
2010).
10 See NetCoalition, at 534.
11 Id. at 537.
8 Securities
E:\FR\FM\23MRN1.SGM
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15602
Federal Register / Vol. 81, No. 56 / Wednesday, March 23, 2016 / Notices
dealers’. . . .’’ 12 Although the court
and the SEC were discussing the cash
equities markets, the Exchange believes
that these views apply with equal force
to the options markets.
The proposed rule change to add IM–
7023–1 and the other IMs to the rule
book will, in large part, include
guidance regarding: (i) Devices (or
servers) used in the transportation,
dissemination or aggregation of data and
ways to count such devices; (ii)
examples and details of what constitutes
fee-liable Non-Display Usage; (iii)
examples and details of what NonDisplay Usage does not include; and (iv)
examples of how to report Non-Display
Usage.
The Exchange believes that the
proposed rule change is reasonable
because it does not change any of the
current practices or any dues, fees and
other charges among members and
issuers and other persons using any
facility or system which the Exchange
operates or controls. Rather, it adds
transparency for market participants
and provides for the equitable treatment
for distributors through making all such
U.S. non-display policies easily
available and accessible to all
distributors on an equal basis.
In sum, the Exchange believes that the
proposed rule change will provide
transparency, clarity, and eliminate
potential confusion that may exist for
distributors and market participants
regarding Non-Display Usage and,
thereby, will promote just and equitable
principles of trade.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
jstallworth on DSK7TPTVN1PROD with NOTICES
The Exchange does not believe that
the proposed rule change will impose a
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange believes that the proposed
rule change will provide market
participants guidance and greater clarity
in making fee-liable Non-Display Usage
determinations and, as a result, will
serve to enhance competition.
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.
12 Id. at 539 (quoting ArcaBook Order, 73 FR at
74782–74783).
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18:25 Mar 22, 2016
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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.13 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.
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–2016–036 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Brent J. Fields, Secretary, Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2016–036. 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
PO 00000
U.S.C. 78s(b)(3)(A)(ii).
Frm 00105
Fmt 4703
Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–06454 Filed 3–22–16; 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:
13 15
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–2016–036, and should be
submitted on or before April 13, 2016.
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #14673 and #14674]
Delaware Disaster #DE–00005
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of Delaware (FEMA–4265–DR),
dated 03/16/2016.
Incident: Severe Winter Storm and
Flooding.
Incident Period: 01/22/2016 through
01/23/2016.
Effective Date: 03/16/2016.
Physical Loan Application Deadline
Date: 05/16/2016.
Economic Injury (EIDL) Loan
Application Deadline Date: 12/16/2016.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
03/16/2016, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Sussex.
SUMMARY:
14 17
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CFR 200.30–3(a)(12).
23MRN1
]]>Agencies
[Federal Register Volume 81, Number 56 (Wednesday, March 23, 2016)]
[Notices]
[Pages 15600-15602]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-06454]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-77392; File No. SR-NASDAQ-2016-036]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Include U.S. Non-Display Policies in the Nasdaq Rule Book
March 17, 2016.
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 4, 2016, 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 the
Exchange. The Commission is publishing this notice to
[[Page 15601]]
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
The Exchange proposes to include U.S. non-display policies in the
Nasdaq rule book under Nasdaq Rule 7023.
The text of the proposed rule change is available on the Exchange's
Web site at https://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 amend Nasdaq Rule 7023 (NASDAQ Depth-of-
Book Data) by adding IM-7023-1. Nasdaq Rule 7023(a)(2)(B) defines
``Non-Display Usage'' as any method of accessing depth-of-book \3\
``data that involves access or use by a machine or automated device
without access or use of a display by a natural person or persons.''
IM-7023-1 will incorporate guidance regarding U.S. non-display policies
into the Nasdaq rule book to provide additional detail with regard to
specific data usages and thereby ensure greater transparency. The
inclusion of these policies into the Nasdaq rule book will lessen
ambiguity in this area without necessitating any changes by market
participants. The Exchange has been working with both the industry and
customers to ensure that they understand these policies.
---------------------------------------------------------------------------
\3\ See Nasdaq Rule 7023(a)(1), which states that ``Depth-of-
Book'' refers to data feeds containing price quotations at more than
one price level. These Nasdaq data feeds include Nasdaq Level 2,
Nasdaq OpenView, and Nasdaq TotalView.
---------------------------------------------------------------------------
Specifically, IM-7023-1 will, in large part, include guidance
regarding: (i) Devices (or servers) used in the transportation,
dissemination or aggregation of data and ways to count such devices;
(ii) examples and details of what constitutes fee-liable Non-Display
Usage; (iii) examples and details of what Non-Display Usage does not
include; and (iv) examples of how to report Non-Display Usage.
IM-7023-1 will apply most specifically to distributors \4\ who
access Nasdaq U.S information and use it in a non-display manner. IM-
7023-1 will also provide guidance in the form of examples of use cases
and details on how the Nasdaq U.S. non-display policies should be
applied and reported.
---------------------------------------------------------------------------
\4\ See Nasdaq Rule 7023(a)(4).
---------------------------------------------------------------------------
The Exchange believes that it will be beneficial to both
distributors specifically and to market participants more generally to
incorporate these policies into the Nasdaq rule book through the
addition of IM-7023-1, as well as adding IM-7026-1, IM-7037-1, IM-7039-
1, IM-7047-1, and IM-7057-1 (collectively, the ``IMs'') that will be
added following each of their respective rules and each refers back to
IM-7023-1.
The result will be to provide distributors additional clarity
through increased transparency into U.S. non-display policies,
including reporting requirements pertaining to non-display usage. The
presentation of this guidance in a more transparent manner will, in
turn, provide distributors with greater precision in making fee-liable
Non-Display Usage determinations.
These policies are a result of the Exchange working with the
industry, as well as soliciting feedback from customers. Technology
changes that create any new use cases will result in a separate Nasdaq
filing. These U.S. non-display policies already are publicly available
and can be found at https://www.nasdaqtrader.com/Trader.aspx?id=GDP_Ops, but their inclusion into the Exchange's rule
book provides an additional way for market participants to easily find
and review such policies.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \5\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act \6\ 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, and is consistent with the Section 6(b)(5) \7\ requirements
that the rules of an exchange be designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts and
practices, to foster cooperation and coordination with persons engaged
in facilitating transactions in securities, to remove impediments to
and to perfect the mechanism for a free and open market and a national
market system, and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(4) and (5).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \8\ Likewise, in
NetCoalition v. Securities and Exchange Commission \9\
(``NetCoalition'') the DC Circuit upheld the Commission's use of a
market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\10\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \11\
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\8\ Securities Exchange Act Release No. 51808 at 37499 (June 9,
2005) (``Regulation NMS Adopting Release'').
\9\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\10\ See NetCoalition, at 534.
\11\ Id. at 537.
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Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker
[[Page 15602]]
dealers'. . . .'' \12\ Although the court and the SEC were discussing
the cash equities markets, the Exchange believes that these views apply
with equal force to the options markets.
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\12\ Id. at 539 (quoting ArcaBook Order, 73 FR at 74782-74783).
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The proposed rule change to add IM-7023-1 and the other IMs to the
rule book will, in large part, include guidance regarding: (i) Devices
(or servers) used in the transportation, dissemination or aggregation
of data and ways to count such devices; (ii) examples and details of
what constitutes fee-liable Non-Display Usage; (iii) examples and
details of what Non-Display Usage does not include; and (iv) examples
of how to report Non-Display Usage.
The Exchange believes that the proposed rule change is reasonable
because it does not change any of the current practices or any dues,
fees and other charges among members and issuers and other persons
using any facility or system which the Exchange operates or controls.
Rather, it adds transparency for market participants and provides for
the equitable treatment for distributors through making all such U.S.
non-display policies easily available and accessible to all
distributors on an equal basis.
In sum, the Exchange believes that the proposed rule change will
provide transparency, clarity, and eliminate potential confusion that
may exist for distributors and market participants regarding Non-
Display Usage and, thereby, will promote just and equitable principles
of trade.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose a burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange believes that the
proposed rule change will provide market participants guidance and
greater clarity in making fee-liable Non-Display Usage determinations
and, as a result, will serve to enhance competition.
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 change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\13\ 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.
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\13\ 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-2016-036 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2016-036. 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-2016-036, and should
be submitted on or before April 13, 2016.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-06454 Filed 3-22-16; 8:45 am]
BILLING CODE 8011-01-P
