Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4702 (Order Types), 22364-22368 [2017-09713]
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Federal Register / Vol. 82, No. 92 / Monday, May 15, 2017 / Notices
days following publication of the
Regulatory Notice announcing
Commission approval.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
2. Statutory Basis
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve or disapprove
such proposed rule change, or
(B) institute proceedings to determine
whether the proposed rule change
should be disapproved.
FINRA believes that the proposed rule
change is consistent with the provisions
of Section 15A(b)(6) of the Act,12 which
requires, among other things, that
FINRA rules must be designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, and, in
general, to protect investors and the
public interest. The proposed rule
change is consistent with Section
15A(b)(6) of the Act. The proposal
would enable the parties, or their
counsel, to evaluate and rank the
arbitrator list or lists at the same time
that they prepare their responses in
those circumstances where the parties
request an extension to answer. Thus,
the proposal would shorten the time it
takes for such arbitrations to conclude
and, thereby, make the forum more
efficient and the case administration
process more expeditious for investors.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
jstallworth on DSK7TPTVN1PROD with NOTICES
FINRA does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. Where
parties agree to an extension or
modification of any deadline for serving
answers, the proposal would likely
result in parties, or their counsels,
evaluating the arbitrator list or lists and
ranking their selections, while
simultaneously preparing their
responses. Currently, these activities
occur serially. However, FINRA notes
that parties often jointly request that the
ODR Director send the list or lists before
the last answer due date deadline.
Therefore, FINRA believes that the
proposed rule change would not be
burdensome. As noted, the benefit to
parties arises from concluding arbitrator
selection earlier, thereby expediting the
arbitration process. FINRA anticipates
that this proposal would impose no
significant costs to forum users.
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.
12 15
U.S.C. 78o–3(b)(6).
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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–
FINRA–2017–009 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–FINRA–2017–009. 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
a.m. and 3 p.m. Copies of such filing
Frm 00060
Fmt 4703
Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–09716 Filed 5–12–17; 8:45 am]
BILLING CODE 8011–01–P
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:
PO 00000
also will be available for inspection and
copying at the principal office of
FINRA. 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–FINRA–2017–009 and
should be submitted on or before June
5, 2017.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80630; File No. SR–
NASDAQ–2017–043]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
4702 (Order Types)
May 9, 2017.
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 April 26,
2017, 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 and
II below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 4702 (Order Types) to modify the
behavior of Post-Only Orders in certain
situations.
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.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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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.
jstallworth on DSK7TPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this proposal is to
amend Rule 4702 (Order Types) to
modify the behavior of Post-Only Orders
in certain situations.
As stated in Rule 4702(b)(4)(A), a
Post-Only order is designed to have its
price adjusted as needed to post to the
Nasdaq Book in compliance with Rule
610(d) under Regulation NMS by
avoiding the display of quotations that
lock or cross any Protected Quotation in
a System Security during Market Hours,
or to execute against locking or crossing
quotations in circumstances where
economically beneficial to the
Participant entering the Post-Only
Order.
The purpose of this proposal is to
provide members with the option of
cancelling their order if the price of the
Post Only Order would otherwise have
its price adjusted. This functionality
will apply when (1) an incoming PostOnly Order locks or crosses a Protected
Quotation; (2) an adjusted Post-Only
Order locks or crosses a displayed Order
at its displayed price on the Nasdaq
Book; or (3) a Post-Only Order would
not lock or cross a Protected Quotation
but would lock or cross a displayed
Order at its displayed price on the
Nasdaq Book. This functionality will be
offered as a port setting and may be
applied to all orders entered under the
same MPID for Orders entered through
RASH, QIX and FIX, or, in the case of
market participants using the OUCH or
FLITE order entry protocol, may be
applied to all Orders entered through a
specific order entry port and under the
same MPID.
The first change relates to incoming
Post-Only Orders that lock or cross a
Protected Quotation. Currently, Rule
4702(b)(4)(A) states that, if a Post-Only
Order would lock or cross a Protected
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Quotation, the price of the Order will
first be adjusted. If the Order is
Attributable, its adjusted price will be
one minimum price increment lower
than the current Best Offer (for bids) or
higher than the current Best Bid (for
offers).3 If the Order is not Attributable,
its adjusted price will be equal to the
current Best Offer (for bids) or the
current Best Bid (for offers). However,
the Order will not post or execute until
the Order, as adjusted, is evaluated with
respect to Orders on the Nasdaq Book.
Nasdaq proposes to amend the
behavior for both incoming NonAttributable and Attributable Post-Only
Orders that lock or cross a Protected
Quotation on an away market center. In
both cases, the Post-Only Order may
either be adjusted or be cancelled back
to the Participant, depending on the
Participant’s choice. However, the PostOnly Order will execute if (i) it is priced
below $1.00 and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds the sum
of fees charged for such execution and
the value of any rebate that would be
provided if the Order posted to the
Nasdaq Book and subsequently
provided liquidity, or (ii) it is priced at
$1.00 or more and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds $0.01
per share. As with the current rule text,
the price of the Order will first be
adjusted if the Participant elects to have
the Post-Only Order adjusted. Similarly,
if the Order is Attributable, its adjusted
price will be one minimum price
increment lower than the current Best
Offer (for bids) or higher than the
current Best Bid (for offers). If the Order
is not Attributable, its adjusted price
will be equal to the current Best Offer
(for bids) or the current Best Bid (for
offers). However, the Order will not post
or execute until the Order, as adjusted,
is evaluated with respect to Orders on
the Nasdaq Book.
In addition to offering the new cancel
functionality where an incoming PostOnly Order locks or crosses a Protected
Quotation on an away market center,
Nasdaq is proposing to amend Rule
4702(b)(4)(A) to state when that Order
would execute, as described above.
3 As set forth in Rule 4703(i), an Order with
Attribution is referred to as an ‘‘Attributable Order’’
and an Order without attribution is referred to as
a ‘‘Non- Attributable Order.’’ Rule 4703(i) defines
Attribution as an Order Attribute that permits a
Participant to designate that the price and size of
the Order will be displayed next to the Participant’s
MPID in market data disseminated by Nasdaq.
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Fmt 4703
Sfmt 4703
22365
Nasdaq is making this change because it
believes that the instances pursuant to
which a locking or crossing Post-Only
order will execute in other scenarios
(such as a Post-Only Order that locks or
crosses a displayed Order at its
displayed price on the Nasdaq Book)
also apply here, e.g., the execution of
the Post-Only Order would be
economically beneficial to the
participant that entered the Order while
contributing to the price discovery
process.4
The second change relates to the
adjusted price of the Post-Only Order if
that price would lock or cross a
displayed Order at its displayed price
on the Nasdaq Book. Currently, Rule
4702(b)(4)(A) states that, if the adjusted
price of the Post-Only Order would lock
or cross a displayed Order at its
displayed price on the Nasdaq Book, the
Post Only Order will be repriced,
ranked, and displayed at one minimum
price increment below the current best
displayed price to sell on the Nasdaq
Book (for bids) or above the current best
displayed price to buy on the Nasdaq
Book (for offers). However, the PostOnly Order will execute if (i) it is priced
below $1.00 and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds the sum
of fees charged for such execution and
the value of any rebate that would be
provided if the Order posted to the
Nasdaq Book and subsequently
provided liquidity, or (ii) it is priced at
$1.00 or more and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds $0.01
per share.
Nasdaq proposes to amend this
provision to allow the Post-Only Order
to either be adjusted or be cancelled
back to the Participant in this scenario,
depending on the Participant’s choice.
As with the current language of this
section, however, the Post-Only Order
will execute if (i) it is priced below
$1.00 and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds the sum
of fees charged for such execution and
the value of any rebate that would be
provided if the Order posted to the
Nasdaq Book and subsequently
4 With this change, Nasdaq is not adding a new
functionality to Post-Only Orders where the
incoming Post-Only Order locks or crosses a
Protected Quotation on an away market center, but
is rather clarifying the instances in which the PostOnly Order in this scenario will execute.
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provided liquidity, or (ii) it is priced at
$1.00 or more and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds $0.01
per share. If the Participant elects to
have the Post-Only Order adjusted, the
Order will continue to be treated as
specified today in the Rule, so that the
Post Only Order will be repriced,
ranked, and displayed at one minimum
price increment below the current best
displayed price to sell on the Nasdaq
Book (for bids) or above the current best
displayed price to buy on the Nasdaq
Book (for offers).
The third change relates to a PostOnly Order that would not lock or cross
a Protected Quotation but would lock or
cross a displayed Order at its displayed
price on the Nasdaq Book. Currently,
Rule 4702(b)(4)(A) states that such an
Order will be repriced, ranked, and
displayed at one minimum price
increment below the current best-priced
Order to sell on the Nasdaq Book (for
bids) or above the current best-priced
Order to buy on the Nasdaq Book (for
offers). However, the Post-Only Order
will execute if (i) it is priced below
$1.00 and the value of price
improvement associated with executing
against an Order on the Nasdaq Book
equals or exceeds the sum of fees
charged for such execution and the
value of any rebate that would be
provided if the Order posted to the
Nasdaq Book and subsequently
provided liquidity, or (ii) it is priced at
$1.00 or more and the value of price
improvement associated with executing
against an Order on the Nasdaq Book
equals or exceeds $0.01 per share.
Nasdaq proposes to amend this
provision so that the Order may either
be adjusted or be cancelled back to the
Participant, depending on the
Participant’s choice. However, the PostOnly Order will execute if (i) it is priced
below $1.00 and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds the sum
of fees charged for such execution and
the value of any rebate that would be
provided if the Order posted to the
Nasdaq Book and subsequently
provided liquidity, or (ii) it is priced at
$1.00 or more and the value of price
improvement associated with executing
against an Order on the Nasdaq Book (as
measured against the original limit price
of the Order) equals or exceeds $0.01
per share. If the Participant elects to
have the Post Only Order adjusted, the
Post Only Order will be repriced,
ranked, and displayed at one minimum
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price increment below the current bestpriced Order to sell on the Nasdaq Book
(for bids) or above the current bestpriced Order to buy on the Nasdaq Book
(for offers).
Finally, Nasdaq is proposing to make
a corresponding change to the provision
in Rule 4702(b)(4)(A) relating to the
treatment of Post-Only Orders during
the Pre-Market and Post-Market Hours.
Currently, that provision states that,
during Pre-Market and Post-Market
Hours, a Post-Only Order will be
processed in a manner identical to
Market Hours with respect to locking or
crossing Orders on the Nasdaq Book, but
will not have its price adjusted with
respect to locking or crossing the
quotations of other market centers.
Nasdaq is proposing to amend this
language to provide that a Post-Only
Order that locks or crosses the quotation
of another market center during the PreMarket and Post-Market Hours will not
be cancelled or have its price adjusted.
The purpose of the proposed
functionality is to allow a member to
cancel its Post-Only Order in various
circumstances rather than have that
Order adjusted. To the extent that a
Post-Only Order will not have its price
adjusted if it locks or crosses the
quotation of another market center
during the Pre-Market or Post-Market
Hours, there is not a need to offer the
corresponding cancel functionality.
With these changes, the Exchange is
providing members with an added
functionality by allowing a member to
cancel a Post-Only Order when (1) an
incoming Post-Only Order locks or
crosses a Protected Quotation; (2) an
adjusted Post-Only Order locks or
crosses a displayed Order at its
displayed price on the Nasdaq Book;
and (3) a Post-Only Order would not
lock or cross a Protected Quotation but
would lock or cross a displayed Order
at its displayed price on the Nasdaq
Book, while still setting forth instances
in which the Order will execute. Nasdaq
notes that the proposed change only
relates to situations where a Post-Only
Order would lock or cross displayed
interest.
The proposed functionality is
consistent with functionalities that are
currently offered by other exchanges.
For example, Bats BZX Exchange, Inc.
(‘‘BZX’’) also offers a Post Only order
type,5 and allows users to select a
5 See BZX Rule 11.9(c)(6). That rule defines a Post
Only Order as an order that is to be ranked and
executed on BZX pursuant to Rule 11.12 and Rule
11.13(a)(4) or cancelled, as appropriate, without
routing away to another trading center except that
the order will not remove liquidity from the BZX
Book, other than as described elsewhere in Rule
11.9.
PO 00000
Frm 00062
Fmt 4703
Sfmt 4703
functionality that will cancel a Post
Only Order if, upon entry, such order
would create a violation of Rule 610(d)
of Regulation NMS by crossing a
Protected Quotation of an external
market, rather than adjusting the price
of that order.6 BZX also provides that
any display-eligible Post-Only or Partial
Post-Only Order that locks or crosses a
Protected Quotation displayed by the
Exchange upon entry will be executed
pursuant to Rule 11.9(c)(6) or Rule
11.9(c)(7), as applicable, or cancelled.7
Similarly, Bats EDGX Exchange, Inc.
(‘‘EDGX’’) provides that, if a Limit Order
would lock or cross a protected
quotation if displayed at its limit price
at the time of entry into the EDGX
system, the user may elect to have the
order immediately cancel back.8
Nasdaq believes that this proposal
will benefit liquidity providers and the
market in general by, among other
things, providing members with greater
flexibility when managing their order
flow, and thereby promoting the more
efficient execution of orders. Market
makers and liquidity providers are
essential to displayed price formation
on exchanges. The proposal seeks to
provide market participants, including
market makers and liquidity providers,
additional flexibility with which to
handle their orders. In some
circumstances, a market maker may
have its order prices adjusted due to
locking or crossing an away market
price (i.e., the displayed NBBO without
Nasdaq) or it may have its order price
adjusted due to locking or crossing a
displayed order on the Nasdaq order
book. In many cases, these liquidity
providers do not want to have their
price adjusted and would rather have
their order cancelled so that they can
reevaluate the market conditions at the
time. Today, the market maker may
therefore cancel its bid or offer once it
has determined that the Exchange has
repriced the order. Going forward, in
support of efficient markets that drive
price formation and price discovery via
continuous trading, the Exchange
believes that providing the flexibility
when an incoming order would lock or
cross an away displayed price or a
displayed order on the Nasdaq book will
increase efficiency and reduce message
6 See BZX Rule 11.9(g)(1)(A); see also Securities
Exchange Act Release No. 67657 (August 14, 2012),
77 FR 50199 (August 20, 2012) (SR–BATS–2012–
35).
7 See BZX Rule 11.9(g)(1)(D); see also Securities
Exchange Act Release No. 67657 (August 14, 2012),
77 FR 50199 (August 20, 2012) (SR–BATS–2012–
35).
8 See EDGX Rule 11.8(b)(10); see also Securities
Exchange Act Release No. 72676 (July 24, 2014), 79
FR 44520 (July 31, 2014) (SR–EDGX–2014–18).
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traffic both internal to the Exchange and
for external data feed consumers.
The Exchange intends to implement
this functionality on or before June 30,
2017. The Exchange will announce the
new implementation date by an Equity
Trader Alert, which shall be issued
prior to the implementation date.
jstallworth on DSK7TPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,9 in general, and furthers the
objectives of Section 6(b)(5) of the Act,10
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest. The
Exchange is proposing to add a new
functionality (cancelling a Post-Only
Order instead of adjusting its price) that
is not currently available on the
Exchange, and that is consistent with
functionalities that are currently offered
by other exchanges. The Exchange
believes that this new functionality is
consistent with the Act because, as
discussed above, it will provide
members with greater flexibility when
managing their order flow, which will
promote the more efficient execution of
orders. The proposal is also consistent
with the stated intent of the Post-Only
Order, which is to avoid the display of
quotations that would lock or cross a
Protected Quotation. Finally, Nasdaq
believes that amending Rule
4702(b)(4)(A) to specify when an
incoming Post-Only Order that locks or
crosses a Protected Quotation on an
away market center would execute is
consistent with the Act because, as with
other the instances pursuant to which a
locking or crossing Post-Only order will
execute, the execution of the Post-Only
Order would be economically beneficial
to the participant that entered the Order
while contributing to the price
discovery process.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The PostOnly Order is an optional order type
that is available for entry through
multiple Nasdaq order entry protocols.
No member is required to use any
specific Order type or attribute or even
to use any Exchange Order type or
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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attribute or any Exchange functionality
at all. If an Exchange member believes
for any reason that the proposed rule
change will be detrimental, that
perceived detriment can be avoided by
choosing not to enter or interact with
the Order types modified by this
proposed rule change. The proposed
changes will provide members with a
functionality that is not currently
available on the Exchange, and that is
consistent with functionalities that are
currently offered by other exchanges.
The proposed changes will apply
equally to all Orders that meet the
proposed criteria. This functionality
will facilitate the more efficient
execution of order flow, which could
increase the Exchange’s market quality
and thereby promote competition by
attracting additional liquidity to the
Exchange.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 11 and Rule 19b–
4(f)(6) thereunder.12
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is 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
change should be approved or
disapproved.
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). As required under Rule
19b–4(f)(6)(iii), the Exchange provided the
Commission with written notice of its intent to file
the proposed rule change, along with a brief
description and the text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
12 17
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22367
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–2017–043 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–2017–043. 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–2017–043 and should be
submitted on or before June 5, 2017.
E:\FR\FM\15MYN1.SGM
15MYN1
22368
Federal Register / Vol. 82, No. 92 / Monday, May 15, 2017 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–09713 Filed 5–12–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–80629; File No. SR–
BatsBZX–2017–29]
Self-Regulatory Organizations; Bats
BZX Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of a
Proposed Rule Change Related to Fees
for Use on the Exchange’s Equity
Options Platform
May 9, 2017.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on May 1,
2017, Bats BZX Exchange, Inc. (the
‘‘Exchange’’ or ‘‘BZX’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange has designated the proposed
rule change as one establishing or
changing a member due, fee, or other
charge imposed by the Exchange under
Section 19(b)(3)(A)(ii) of the Act 3 and
Rule 19b–4(f)(2) thereunder,4 which
renders the proposed rule change
effective upon filing with the
Commission. 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
jstallworth on DSK7TPTVN1PROD with NOTICES
The Exchange filed a proposal to
amend the fee schedule applicable to
Members 5 and non-members of the
Exchange pursuant to BZX Rules 15.1(a)
and (c).
The text of the proposed rule change
is available at the Exchange’s Web site
at www.bats.com, at the principal office
of the Exchange, and at the
Commission’s Public Reference Room.
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
5 The term ‘‘Member’’ is defined as ‘‘any
registered broker or dealer that has been admitted
to membership in the Exchange.’’ See Exchange
Rule 1.5(n).
1 15
VerDate Sep<11>2014
13:51 May 12, 2017
Jkt 241001
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 parts 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 its
fee schedule for its equity options
platform (‘‘BZX Options’’) to: (i)
Decrease the standard rebate provided
by fee code PF; and (ii) amend certain
(A) Customer Penny Pilot Add Tiers
under footnote 1; (B) Quoting Incentive
Program (‘‘QIP’’) Tiers under footnote 5;
and (C) Customer Non-Penny Pilot Add
Volume Tiers under footnote 12.
Fee Code PF
Currently, fee code PF provides a
standard rebate of $0.26 per contract for
Firm,6 Broker Dealer 7 and Joint Back
Office 8 orders that add liquidity on the
Exchange in Penny-Pilot securities.9
The Exchange proposes to reduce this
srebate [sic] to $0.25 per contract. The
Exchange also proposes to update the
Standard Rates table accordingly to
reflect new rate.
Customer Penny Pilot Add Tiers
The Exchange currently offers seven
Customer 10 Penny Pilot Add Tiers
6 ‘‘Firm’’
applies to any transaction identified by
a Member for clearing in the Firm range at the OCC,
excluding any Joint Back Office transaction. See the
Exchange’s fee schedule available at https://
www.bats.com/us/options/membership/fee_
schedule/bzx/.
7 ‘‘Broker Dealer’’ applies to any order for the
account of a broker dealer, including a foreign
broker dealer, that clears in the Customer range at
the Options Clearing Corporation (‘‘OCC’’). Id.
8 ‘‘Joint Back Office’’ applies to any transaction
identified by a Member for clearing in the Firm
range at the OCC that is identified with an origin
code as Joint Back Office. A Joint Back Office
participant is a Member that maintains a Joint Back
Office arrangement with a clearing broker-dealer.
Id.
9 ‘‘Penny Pilot Securities’’ are those issues quoted
pursuant to Exchange Rule 21.5, Interpretation and
Policy .01. Id.
10 ‘‘Customer’’ applies to any transaction
identified by a Member for clearing in the Customer
range at the OCC, excluding any transaction for a
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
under footnote 1, which provide an
enhanced rebate ranging from $0.40 to
$0.53 per contract for qualifying
Customer orders that add liquidity in
Penny Pilot Securities and yield fee
code PY. The Exchange now proposes to
modify Tier 3’ [sic] required criteria and
rebateas [sic] well as to add new Tier 7.
• Currently under Tier 3, a Member
may receive a rebate of $0.50 per
contract where they have an ADV 11
greater than or equal to 1.30% of
average OCV.12 As amended, a Member
may receive a rebate of $0.51 per
contract where they have an: (i)
ADAV 13 in Customer orders greater
than or equal to 0.50% of average OCV;
and (ii) ADAV in Market Maker 14 orders
greater than or equal to 2.75% of
average OCV.
• Under proposed Tier 7, a Member
would receive a rebate of $0.53 per
contract where they have an: (i) ADAV
in Customer orders greater than or equal
to 0.50% of average OCV; (ii) ADAV in
Market Maker orders greater than or
equal to 2.75% of average OCV; and (iii)
ADAV in Firm orders in Non-Penny
Pilot Securities greater than or equal to
0.05% of average OCV.
QIP Tiers
The Exchange currently offers four
QIP Tiers under footnote 5, which
provide an additional rebate ranging
from $0.02 to $0.05 per contract for
qualifying Market Maker orders that add
liquidity in: (i) Penny Pilot Securities
that yield fee code PM and; (ii) NonPenny Pilot Securities that yield fee
code NM. The additional rebate per
contract is for an order that adds
liquidity to the BZX Options in options
classes in which a Member is a Market
Maker registered pursuant to Exchange
Rule 22.2. A Market Maker must be
registered with BZX Options in an
average of 20% or more of the
Broker Dealer or a ‘‘Professional’’ as defined in
Exchange Rule 16.1. Id.
11 ‘‘ADV’’ means average daily volume calculated
as the number of contracts added or removed,
combined, per day. See the Exchange’s fee schedule
available at https://www.bats.com/us/options/
membership/fee_schedule/bzx/.
12 ‘‘OCV’’ means the total equity and ETF options
volume that clears in the Customer range at the
Options Clearing Corporation (‘‘OCC’’) for the
month for which the fees apply, excluding volume
on any day that the Exchange experiences an
Exchange System Disruption and on any day with
a scheduled early market close. Id.
13 ‘‘ADAV’’ means average daily added volume
calculated as the number of contracts added and
‘‘ADV’’ means average daily volume calculated as
the number of contracts added or removed,
combined, per day. Id.
14 ‘‘Market Maker’’ applies to any transaction
identified by a Member for clearing in the Market
Maker range at the OCC, where such Member is
registered with the Exchange as a Market Maker as
defined in Rule 16.1(a)(37). Id.
E:\FR\FM\15MYN1.SGM
15MYN1
]]>Agencies
[Federal Register Volume 82, Number 92 (Monday, May 15, 2017)]
[Notices]
[Pages 22364-22368]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09713]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-80630; File No. SR-NASDAQ-2017-043]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 4702 (Order Types)
May 9, 2017.
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 April 26, 2017, 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 and II 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
The Exchange proposes to amend Rule 4702 (Order Types) to modify
the behavior of Post-Only Orders in certain situations.
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.
[[Page 22365]]
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 purpose of this proposal is to amend Rule 4702 (Order Types) to
modify the behavior of Post-Only Orders in certain situations.
As stated in Rule 4702(b)(4)(A), a Post-Only order is designed to
have its price adjusted as needed to post to the Nasdaq Book in
compliance with Rule 610(d) under Regulation NMS by avoiding the
display of quotations that lock or cross any Protected Quotation in a
System Security during Market Hours, or to execute against locking or
crossing quotations in circumstances where economically beneficial to
the Participant entering the Post-Only Order.
The purpose of this proposal is to provide members with the option
of cancelling their order if the price of the Post Only Order would
otherwise have its price adjusted. This functionality will apply when
(1) an incoming Post-Only Order locks or crosses a Protected Quotation;
(2) an adjusted Post-Only Order locks or crosses a displayed Order at
its displayed price on the Nasdaq Book; or (3) a Post-Only Order would
not lock or cross a Protected Quotation but would lock or cross a
displayed Order at its displayed price on the Nasdaq Book. This
functionality will be offered as a port setting and may be applied to
all orders entered under the same MPID for Orders entered through RASH,
QIX and FIX, or, in the case of market participants using the OUCH or
FLITE order entry protocol, may be applied to all Orders entered
through a specific order entry port and under the same MPID.
The first change relates to incoming Post-Only Orders that lock or
cross a Protected Quotation. Currently, Rule 4702(b)(4)(A) states that,
if a Post-Only Order would lock or cross a Protected Quotation, the
price of the Order will first be adjusted. If the Order is
Attributable, its adjusted price will be one minimum price increment
lower than the current Best Offer (for bids) or higher than the current
Best Bid (for offers).\3\ If the Order is not Attributable, its
adjusted price will be equal to the current Best Offer (for bids) or
the current Best Bid (for offers). However, the Order will not post or
execute until the Order, as adjusted, is evaluated with respect to
Orders on the Nasdaq Book.
---------------------------------------------------------------------------
\3\ As set forth in Rule 4703(i), an Order with Attribution is
referred to as an ``Attributable Order'' and an Order without
attribution is referred to as a ``Non- Attributable Order.'' Rule
4703(i) defines Attribution as an Order Attribute that permits a
Participant to designate that the price and size of the Order will
be displayed next to the Participant's MPID in market data
disseminated by Nasdaq.
---------------------------------------------------------------------------
Nasdaq proposes to amend the behavior for both incoming Non-
Attributable and Attributable Post-Only Orders that lock or cross a
Protected Quotation on an away market center. In both cases, the Post-
Only Order may either be adjusted or be cancelled back to the
Participant, depending on the Participant's choice. However, the Post-
Only Order will execute if (i) it is priced below $1.00 and the value
of price improvement associated with executing against an Order on the
Nasdaq Book (as measured against the original limit price of the Order)
equals or exceeds the sum of fees charged for such execution and the
value of any rebate that would be provided if the Order posted to the
Nasdaq Book and subsequently provided liquidity, or (ii) it is priced
at $1.00 or more and the value of price improvement associated with
executing against an Order on the Nasdaq Book (as measured against the
original limit price of the Order) equals or exceeds $0.01 per share.
As with the current rule text, the price of the Order will first be
adjusted if the Participant elects to have the Post-Only Order
adjusted. Similarly, if the Order is Attributable, its adjusted price
will be one minimum price increment lower than the current Best Offer
(for bids) or higher than the current Best Bid (for offers). If the
Order is not Attributable, its adjusted price will be equal to the
current Best Offer (for bids) or the current Best Bid (for offers).
However, the Order will not post or execute until the Order, as
adjusted, is evaluated with respect to Orders on the Nasdaq Book.
In addition to offering the new cancel functionality where an
incoming Post-Only Order locks or crosses a Protected Quotation on an
away market center, Nasdaq is proposing to amend Rule 4702(b)(4)(A) to
state when that Order would execute, as described above. Nasdaq is
making this change because it believes that the instances pursuant to
which a locking or crossing Post-Only order will execute in other
scenarios (such as a Post-Only Order that locks or crosses a displayed
Order at its displayed price on the Nasdaq Book) also apply here, e.g.,
the execution of the Post-Only Order would be economically beneficial
to the participant that entered the Order while contributing to the
price discovery process.\4\
---------------------------------------------------------------------------
\4\ With this change, Nasdaq is not adding a new functionality
to Post-Only Orders where the incoming Post-Only Order locks or
crosses a Protected Quotation on an away market center, but is
rather clarifying the instances in which the Post-Only Order in this
scenario will execute.
---------------------------------------------------------------------------
The second change relates to the adjusted price of the Post-Only
Order if that price would lock or cross a displayed Order at its
displayed price on the Nasdaq Book. Currently, Rule 4702(b)(4)(A)
states that, if the adjusted price of the Post-Only Order would lock or
cross a displayed Order at its displayed price on the Nasdaq Book, the
Post Only Order will be repriced, ranked, and displayed at one minimum
price increment below the current best displayed price to sell on the
Nasdaq Book (for bids) or above the current best displayed price to buy
on the Nasdaq Book (for offers). However, the Post-Only Order will
execute if (i) it is priced below $1.00 and the value of price
improvement associated with executing against an Order on the Nasdaq
Book (as measured against the original limit price of the Order) equals
or exceeds the sum of fees charged for such execution and the value of
any rebate that would be provided if the Order posted to the Nasdaq
Book and subsequently provided liquidity, or (ii) it is priced at $1.00
or more and the value of price improvement associated with executing
against an Order on the Nasdaq Book (as measured against the original
limit price of the Order) equals or exceeds $0.01 per share.
Nasdaq proposes to amend this provision to allow the Post-Only
Order to either be adjusted or be cancelled back to the Participant in
this scenario, depending on the Participant's choice. As with the
current language of this section, however, the Post-Only Order will
execute if (i) it is priced below $1.00 and the value of price
improvement associated with executing against an Order on the Nasdaq
Book (as measured against the original limit price of the Order) equals
or exceeds the sum of fees charged for such execution and the value of
any rebate that would be provided if the Order posted to the Nasdaq
Book and subsequently
[[Page 22366]]
provided liquidity, or (ii) it is priced at $1.00 or more and the value
of price improvement associated with executing against an Order on the
Nasdaq Book (as measured against the original limit price of the Order)
equals or exceeds $0.01 per share. If the Participant elects to have
the Post-Only Order adjusted, the Order will continue to be treated as
specified today in the Rule, so that the Post Only Order will be
repriced, ranked, and displayed at one minimum price increment below
the current best displayed price to sell on the Nasdaq Book (for bids)
or above the current best displayed price to buy on the Nasdaq Book
(for offers).
The third change relates to a Post-Only Order that would not lock
or cross a Protected Quotation but would lock or cross a displayed
Order at its displayed price on the Nasdaq Book. Currently, Rule
4702(b)(4)(A) states that such an Order will be repriced, ranked, and
displayed at one minimum price increment below the current best-priced
Order to sell on the Nasdaq Book (for bids) or above the current best-
priced Order to buy on the Nasdaq Book (for offers). However, the Post-
Only Order will execute if (i) it is priced below $1.00 and the value
of price improvement associated with executing against an Order on the
Nasdaq Book equals or exceeds the sum of fees charged for such
execution and the value of any rebate that would be provided if the
Order posted to the Nasdaq Book and subsequently provided liquidity, or
(ii) it is priced at $1.00 or more and the value of price improvement
associated with executing against an Order on the Nasdaq Book equals or
exceeds $0.01 per share.
Nasdaq proposes to amend this provision so that the Order may
either be adjusted or be cancelled back to the Participant, depending
on the Participant's choice. However, the Post-Only Order will execute
if (i) it is priced below $1.00 and the value of price improvement
associated with executing against an Order on the Nasdaq Book (as
measured against the original limit price of the Order) equals or
exceeds the sum of fees charged for such execution and the value of any
rebate that would be provided if the Order posted to the Nasdaq Book
and subsequently provided liquidity, or (ii) it is priced at $1.00 or
more and the value of price improvement associated with executing
against an Order on the Nasdaq Book (as measured against the original
limit price of the Order) equals or exceeds $0.01 per share. If the
Participant elects to have the Post Only Order adjusted, the Post Only
Order will be repriced, ranked, and displayed at one minimum price
increment below the current best-priced Order to sell on the Nasdaq
Book (for bids) or above the current best-priced Order to buy on the
Nasdaq Book (for offers).
Finally, Nasdaq is proposing to make a corresponding change to the
provision in Rule 4702(b)(4)(A) relating to the treatment of Post-Only
Orders during the Pre-Market and Post-Market Hours. Currently, that
provision states that, during Pre-Market and Post-Market Hours, a Post-
Only Order will be processed in a manner identical to Market Hours with
respect to locking or crossing Orders on the Nasdaq Book, but will not
have its price adjusted with respect to locking or crossing the
quotations of other market centers. Nasdaq is proposing to amend this
language to provide that a Post-Only Order that locks or crosses the
quotation of another market center during the Pre-Market and Post-
Market Hours will not be cancelled or have its price adjusted. The
purpose of the proposed functionality is to allow a member to cancel
its Post-Only Order in various circumstances rather than have that
Order adjusted. To the extent that a Post-Only Order will not have its
price adjusted if it locks or crosses the quotation of another market
center during the Pre-Market or Post-Market Hours, there is not a need
to offer the corresponding cancel functionality.
With these changes, the Exchange is providing members with an added
functionality by allowing a member to cancel a Post-Only Order when (1)
an incoming Post-Only Order locks or crosses a Protected Quotation; (2)
an adjusted Post-Only Order locks or crosses a displayed Order at its
displayed price on the Nasdaq Book; and (3) a Post-Only Order would not
lock or cross a Protected Quotation but would lock or cross a displayed
Order at its displayed price on the Nasdaq Book, while still setting
forth instances in which the Order will execute. Nasdaq notes that the
proposed change only relates to situations where a Post-Only Order
would lock or cross displayed interest.
The proposed functionality is consistent with functionalities that
are currently offered by other exchanges. For example, Bats BZX
Exchange, Inc. (``BZX'') also offers a Post Only order type,\5\ and
allows users to select a functionality that will cancel a Post Only
Order if, upon entry, such order would create a violation of Rule
610(d) of Regulation NMS by crossing a Protected Quotation of an
external market, rather than adjusting the price of that order.\6\ BZX
also provides that any display-eligible Post-Only or Partial Post-Only
Order that locks or crosses a Protected Quotation displayed by the
Exchange upon entry will be executed pursuant to Rule 11.9(c)(6) or
Rule 11.9(c)(7), as applicable, or cancelled.\7\
---------------------------------------------------------------------------
\5\ See BZX Rule 11.9(c)(6). That rule defines a Post Only Order
as an order that is to be ranked and executed on BZX pursuant to
Rule 11.12 and Rule 11.13(a)(4) or cancelled, as appropriate,
without routing away to another trading center except that the order
will not remove liquidity from the BZX Book, other than as described
elsewhere in Rule 11.9.
\6\ See BZX Rule 11.9(g)(1)(A); see also Securities Exchange Act
Release No. 67657 (August 14, 2012), 77 FR 50199 (August 20, 2012)
(SR-BATS-2012-35).
\7\ See BZX Rule 11.9(g)(1)(D); see also Securities Exchange Act
Release No. 67657 (August 14, 2012), 77 FR 50199 (August 20, 2012)
(SR-BATS-2012-35).
---------------------------------------------------------------------------
Similarly, Bats EDGX Exchange, Inc. (``EDGX'') provides that, if a
Limit Order would lock or cross a protected quotation if displayed at
its limit price at the time of entry into the EDGX system, the user may
elect to have the order immediately cancel back.\8\
---------------------------------------------------------------------------
\8\ See EDGX Rule 11.8(b)(10); see also Securities Exchange Act
Release No. 72676 (July 24, 2014), 79 FR 44520 (July 31, 2014) (SR-
EDGX-2014-18).
---------------------------------------------------------------------------
Nasdaq believes that this proposal will benefit liquidity providers
and the market in general by, among other things, providing members
with greater flexibility when managing their order flow, and thereby
promoting the more efficient execution of orders. Market makers and
liquidity providers are essential to displayed price formation on
exchanges. The proposal seeks to provide market participants, including
market makers and liquidity providers, additional flexibility with
which to handle their orders. In some circumstances, a market maker may
have its order prices adjusted due to locking or crossing an away
market price (i.e., the displayed NBBO without Nasdaq) or it may have
its order price adjusted due to locking or crossing a displayed order
on the Nasdaq order book. In many cases, these liquidity providers do
not want to have their price adjusted and would rather have their order
cancelled so that they can reevaluate the market conditions at the
time. Today, the market maker may therefore cancel its bid or offer
once it has determined that the Exchange has repriced the order. Going
forward, in support of efficient markets that drive price formation and
price discovery via continuous trading, the Exchange believes that
providing the flexibility when an incoming order would lock or cross an
away displayed price or a displayed order on the Nasdaq book will
increase efficiency and reduce message
[[Page 22367]]
traffic both internal to the Exchange and for external data feed
consumers.
The Exchange intends to implement this functionality on or before
June 30, 2017. The Exchange will announce the new implementation date
by an Equity Trader Alert, which shall be issued prior to the
implementation date.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\9\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\10\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest. The Exchange is proposing to add a new functionality
(cancelling a Post-Only Order instead of adjusting its price) that is
not currently available on the Exchange, and that is consistent with
functionalities that are currently offered by other exchanges. The
Exchange believes that this new functionality is consistent with the
Act because, as discussed above, it will provide members with greater
flexibility when managing their order flow, which will promote the more
efficient execution of orders. The proposal is also consistent with the
stated intent of the Post-Only Order, which is to avoid the display of
quotations that would lock or cross a Protected Quotation. Finally,
Nasdaq believes that amending Rule 4702(b)(4)(A) to specify when an
incoming Post-Only Order that locks or crosses a Protected Quotation on
an away market center would execute is consistent with the Act because,
as with other the instances pursuant to which a locking or crossing
Post-Only order will execute, the execution of the Post-Only Order
would be economically beneficial to the participant that entered the
Order while contributing to the price discovery process.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 not necessary or appropriate in
furtherance of the purposes of the Act. The Post-Only Order is an
optional order type that is available for entry through multiple Nasdaq
order entry protocols. No member is required to use any specific Order
type or attribute or even to use any Exchange Order type or attribute
or any Exchange functionality at all. If an Exchange member believes
for any reason that the proposed rule change will be detrimental, that
perceived detriment can be avoided by choosing not to enter or interact
with the Order types modified by this proposed rule change. The
proposed changes will provide members with a functionality that is not
currently available on the Exchange, and that is consistent with
functionalities that are currently offered by other exchanges. The
proposed changes will apply equally to all Orders that meet the
proposed criteria. This functionality will facilitate the more
efficient execution of order flow, which could increase the Exchange's
market quality and thereby promote competition by attracting additional
liquidity to the Exchange.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission.
---------------------------------------------------------------------------
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 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 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-2017-043 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-2017-043. 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-2017-043 and should
be submitted on or before June 5, 2017.
[[Page 22368]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-09713 Filed 5-12-17; 8:45 am]
BILLING CODE 8011-01-P
