Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Market Access and Routing Subsidy Program, 38752-38755 [2017-17168]
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38752
Federal Register / Vol. 82, No. 156 / Tuesday, August 15, 2017 / Notices
commitment of capital. In addition,
encouraging NOM Market Makers to add
greater liquidity benefits all Participants
in the quality of order interaction. The
Exchange believes it is equitable and not
unfairly discriminatory to offer only
NOM Market Makers the opportunity to
earn the discounted fee described above
because of the obligations borne by
these market participants, as noted
herein.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
mstockstill on DSK30JT082PROD with NOTICES
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. In terms of
inter-market competition, the Exchange
notes that it operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. The
Exchange believes that the proposed
pricing changes are competitive and
does not impose a burden on intermarket competition. If the changes
proposed herein are unattractive to
market participants, it is likely that the
Exchange will lose market share as a
result. Accordingly, the Exchange does
not believe that the proposed changes
will impair the ability of members or
competing order execution venues to
maintain their competitive standing in
the financial markets.
As it relates to the proposed fee
change to lower the NOM Volume
Threshold, the Exchange does not
believe that its proposal imposes an
undue burden on intra-market
competition because all Participants are
eligible to earn rebates and these rebates
would be uniformly paid to all
qualifying Participants. The Exchange
also does not believe that its proposal to
offer Participants an opportunity to
reduce the NOM Market Maker NonPenny Pilot Options Fee for Adding
Liquidity from $0.35 to $0.00 if they
meet the volume-based standard
described above imposes an undue
burden on intra-market competition
because NOM Market Makers, unlike
other market participants, add value
making capacity must constitute a course of
dealings reasonably calculated to contribute to the
maintenance of a fair and orderly market, and
Market Makers should not make bids or offers or
enter into transactions that are inconsistent with
such course of dealings. Further, all Market Makers
are designated as specialists on NOM for all
purposes under the Act or rules thereunder. See
Chapter VII, Section 5.
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through continuous quoting 18 and the
commitment of capital.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.19
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–2017–080, and should be
submitted on or before September 5,
2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–17169 Filed 8–14–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
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–2017–080 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–2017–080. 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
[Release No. 34–81360; File No. SR–
NASDAQ–2017–079]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend the
Market Access and Routing Subsidy
Program
August 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 August 1,
2017, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘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
solicit comments on the proposed rule
change from interested persons.
20 17
18 See
note 17 above.
19 15 U.S.C. 78s(b)(3)(A)(ii).
PO 00000
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CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 82, No. 156 / Tuesday, August 15, 2017 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s transaction fees at Chapter
XV, Section 2 entitled ‘‘NASDAQ
Options Market—Fees and Rebates,’’
which governs pricing for Nasdaq
Participants using the NASDAQ Options
Market (‘‘NOM’’), Nasdaq’s facility for
executing and routing standardized
equity and index options. The Exchange
proposes to amend its subsidy program,
the Market Access and Routing Subsidy
or ‘‘MARS,’’ for NOM Participants that
provide certain order routing
functionalities 3 to other NOM
Participants and/or use such
functionalities themselves.
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend its
MARS subsidy program, which pays a
subsidy to NOM Participants that
provide certain order routing
functionalities to other NOM
1
2
3
4
Participants and/or use such
functionalities themselves. Generally,
under MARS, the Exchange pays
participating NOM Participants to
subsidize their costs of providing
routing services to route orders to NOM.
At this time, the Exchange proposes to
amend Chapter XV, Section 2(6) to
expand the MARS Payment tiers as
described further below.
Today, NOM Participants that have
System Eligibility 4 and have routed the
requisite number of Eligible Contracts
daily in a month (‘‘Average Daily
Volume’’), which were executed on
NOM, are entitled to a MARS Payment.
For the purpose of qualifying for the
MARS Payment, Eligible Contracts may
include Firm,5 Non-NOM Market
Maker,6 Broker-Dealer,7 or Joint Back
Office or ‘‘JBO’’ 8 equity option orders
that add liquidity and are electronically
delivered and executed.9
The Exchange currently pays the
following MARS Payments according to
Average Daily Volume (‘‘ADV’’) 10
submitted on NOM:
Average daily
volume
(‘‘ADV’’)
Tiers
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
.................................................................................................................................
38753
MARS Payment
(penny)
2,500
5,000
10,000
20,000
$0.07
0.09
0.11
0.15
MARS Payment
(non-penny)
$0.15
0.20
0.30
0.50
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Also, NOM Participants that qualify
for Customer and Professional Penny
Pilot Options Rebate to Add Liquidity
Tier 8 in Chapter XV, Section 2(1) will
receive $0.09 per contract in addition to
any MARS Payment tier on MARS
Eligible Contracts the NOM Participant
qualifies for in a given month. The
specified MARS Payment will be paid
on all executed Eligible Contracts that
add liquidity, which are routed to NOM
through a participating NOM
Participant’s System and meet the
requisite Eligible Contracts ADV. No
payments will be made with respect to
orders that are routed to NOM, but not
executed.11
The Exchange proposes to add a new
Tier 5 with an ADV of 45,000 contracts
and pay a MARS Payment of (i) $0.17
per contract for Penny Pilot Options
transactions that qualify for the MARS
Payment tier program and (ii) $0.60 per
contract for Non-Penny Pilot Options
transactions that qualify for the MARS
Payment tier program. The Exchange
would continue to pay an additional
$0.09 per contract in addition to any
MARS Payment tier on MARS Eligible
Contracts in a given month, provided
3 The order routing functionalities permit a NOM
Participant to provide access and connectivity to
other Participants as well as utilize such access for
themselves. The Exchange notes that one NOM
Participant is eligible for payments under MARS,
while another NOM Participant might potentially
be liable for transaction charges associated with the
execution of the order, because those orders were
delivered to the Exchange through a NOM
Participant’s connection to the Exchange and that
Participant qualified for the MARS Payment.
4 To qualify for MARS, the Participant’s routing
system (‘‘System’’) is required to: (1) Enable the
electronic routing of orders to all of the U.S. options
exchanges, including NOM; (2) provide current
consolidated market data from the U.S. options
exchanges; and (3) be capable of interfacing with
NOM’s API to access current NOM match engine
functionality. Further, the Participant’s System
would also need to cause NOM to be one of the top
three default destination exchanges for (a)
individually executed marketable orders if NOM is
at the national best bid or offer (‘‘NBBO’’),
regardless of size or time or (b) orders that establish
a new NBBO on NOM’s Order Book, but allow any
user to manually override NOM as a default
destination on an order-by-order basis. Any NOM
Participant would be permitted to avail itself of this
arrangement, provided that its order routing
functionality incorporates the features described
above and satisfies NOM that it appears to be robust
and reliable. The Participant remains solely
responsible for implementing and operating its
System. See Chapter XV, Section 2(6).
5 The term ‘‘Firm’’ or (‘‘F’’) applies to any
transaction that is identified by a Participant for
clearing in the Firm range at OCC.
6 The term ‘‘Non-NOM Market Maker’’ or (‘‘O’’) is
a registered market maker on another options
exchange that is not a NOM Market Maker. A NonNOM Market Maker must append the proper NonNOM Market Maker designation to orders routed to
NOM.
7 The term ‘‘Broker-Dealer’’ or (‘‘B’’) applies to
any transaction which is not subject to any of the
other transaction fees applicable within a particular
category.
8 The term ‘‘Joint Back Office’’ or ‘‘JBO’’ applies
to any transaction that is identified by a Participant
for clearing in the Firm range at OCC and is
identified with an origin code as a JBO. A JBO will
be priced the same as a Broker-Dealer as of
September 1, 2014. A JBO participant is a
Participant that maintains a JBO arrangement with
a clearing broker-dealer (‘‘JBO Broker’’) subject to
the requirements of Regulation T Section 220.7 of
the Federal Reserve System as further discussed in
Chapter XIII, Section 5.
9 Eligible Contracts do not include Mini Option
orders. Mini Options are further specified in
Chapter XV, Section 2(4).
10 Average Daily Volume is all Eligible Contracts
daily in a month aggregating Penny and Non-Penny
Pilot Options.
11 A Participant will not be entitled to receive any
other revenue for the use of its System specifically
with respect to orders routed to NOM. The
Exchange believes that MARS Payment will
subsidize the costs of NOM Participants in
providing the routing services.
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17:15 Aug 14, 2017
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38754
Federal Register / Vol. 82, No. 156 / Tuesday, August 15, 2017 / Notices
mstockstill on DSK30JT082PROD with NOTICES
the NOM Participant qualified for the
Customer and Professional Penny Pilot
Options Rebate to Add Liquidity Tier 8
in Chapter XV, Section 2(1). The
Exchange believes that as proposed,
MARS will continue to attract higher
volumes of electronic equity and ETF
options volume to the Exchange from
non-NOM Participants as well as NOM
Participants.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,12 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,13 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, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange’s proposal to add a new
Tier 5 with an ADV of 45,000 contracts
and pay the MARS Payment in the
amounts described above is reasonable
because the amendments will attract
higher volumes of electronic equity and
ETF options volume to the Exchange,
which will benefit all NOM Participants
by offering greater price discovery,
increased transparency, and an
increased opportunity to trade on the
Exchange. The expanded MARS
Payments should enhance the
competitiveness of the Exchange,
particularly with respect to those
exchanges that offer their own front-end
order entry system or one they subsidize
in some manner. The amendment to add
Tier 5 will incentivize NOM
Participants to achieve an even higher
Penny Pilot Options Rebate, provided
the NOM Participant is eligible for
MARS. Further, the tier structure will
allow NOM Participants to price their
services at a level that will enable them
to attract order flow from market
participants who would otherwise
utilize an existing front-end order entry
mechanism offered by the Exchange’s
competitors instead of incurring the cost
in time and money to develop their own
internal systems to be able to deliver
orders directly to the Exchange’s
System.
The Exchange’s proposal to add a new
Tier 5 and pay the MARS Payment in
the amounts described above is
equitable and not unfairly
discriminatory because the Exchange
will uniformly pay all NOM Participants
the rebates specified in the proposed
MARS Payment tiers provided the NOM
12 15
13 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
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17:15 Aug 14, 2017
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Participant has executed the requisite
number of Eligible Contracts. Moreover,
the Exchange believes that the proposed
MARS Payments offered by the
Exchange are equitable and not unfairly
discriminatory because any qualifying
NOM Participant that offers market
access and connectivity to the Exchange
and/or utilize such functionality
themselves may earn the MARS
Payments for all Eligible Contracts.
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. In terms of
inter-market competition, the Exchange
notes that it operates in a highly
competitive market in which market
participants can readily favor competing
venues if they deem fee levels at a
particular venue to be excessive, or
rebate opportunities available at other
venues to be more favorable. In such an
environment, the Exchange must
continually adjust its fees to remain
competitive with other exchanges and
with alternative trading systems that
have been exempted from compliance
with the statutory standards applicable
to exchanges. Because competitors are
free to modify their own fees in
response, and because market
participants may readily adjust their
order routing practices, the Exchange
believes that the degree to which fee
changes in this market may impose any
burden on competition is extremely
limited.
In sum, if the fee changes proposed
herein are unattractive to market
participants, it is likely that the
Exchange will lose market share as a
result. Accordingly, the Exchange does
not believe that the proposed changes
will impair the ability of members or
competing order execution venues to
maintain their competitive standing in
the financial markets.
Further, the Exchange’s proposal does
not impose an undue burden on intramarket competition because the
Exchange will uniformly pay all NOM
Participants the rebates specified in the
proposed MARS Payment tiers provided
the NOM Participant has executed the
requisite number of Eligible Contracts.
Moreover, any qualifying NOM
Participant that offers market access and
connectivity to the Exchange and/or
utilizes such functionality themselves
may earn the proposed MARS Payment
for all Eligible Contracts.
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.14
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: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
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–2017–079 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–2017–079. 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
14 15
E:\FR\FM\15AUN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
15AUN1
Federal Register / Vol. 82, No. 156 / Tuesday, August 15, 2017 / Notices
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–2017–079, and should be
submitted on or before September 5,
2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–17168 Filed 8–14–17; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #15240 and #15241;
Oregon Disaster Number OR–00086]
Presidential Declaration of a Major
Disaster for Public Assistance Only for
the State of Oregon
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 Oregon (FEMA–4328–DR),
dated 08/08/2017.
Incident: Severe Winter Storms,
Flooding, Landslides, and Mudslides.
Incident Period: 01/07/2017 through
01/10/2017.
DATES: Issued on 08/08/2017.
Physical Loan Application Deadline
Date: 10/10/2017.
Economic Injury (EIDL) Loan
Application Deadline Date: 05/08/2018.
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,
mstockstill on DSK30JT082PROD with NOTICES
SUMMARY:
15 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
17:15 Aug 14, 2017
Jkt 241001
38755
the International Joint Commission will
be holding public hearings in the basin
on its own report. Draft Changes to the
Rainy and Namakan Lakes Rule Curves
for Public Comment. The Commission is
considering proposed changes to its
Orders of Approval for the emergency
regulation of Rainy and Namakan Lakes
that have been recommended by the
Study.
DATES: Commissioners will be present to
hear comments at four public hearings
throughout the basin from August 16 to
18, 2017. A public comment period on
the Commission’s report will also be
open from July 24 to September 1, 2017.
ADDRESSES: The public hearings will be
held at the following locations:
Percent
Wednesday, Fort Frances, Ontario
August 16: Fort Frances Library—
For Physical Damage:
Shaw Hub Room, 601 Reid Avenue,
Non-Profit Organizations with
Fort Frances, ON P9A 0A2, 7:00
Credit Available Elsewhere ...
2.500
p.m.–9:00 p.m.
Non-Profit Organizations withThursday, Kabetogama, Minnesota
out Credit Available ElseAugust 17: Kabetogama Lake
where .....................................
2.500
Community Centre, 9707 Gamma
For Economic Injury:
Road, Kabetogama, MN 56669, 3:00
Non-Profit Organizations withp.m.–5:00 p.m.
out Credit Available Elsewhere .....................................
2.500 Thursday, International Falls,
Minnesota
August 17: Backus Community
The number assigned to this disaster
Centre—Conference Room 101/102,
for physical damage is 15240B and for
900 5th Street, International Falls,
economic injury is 152410.
MN 56649, 7:00 p.m.–9:00 p.m.
(Catalog of Federal Domestic Assistance
Friday, Rainy River, Ontario
Number 59008)
August 18: Rainy River Recreation
Centre, 302 Broadway Avenue,
James E. Rivera,
Rainy River, ON P0W 1L0, 9:30
Associate Administrator for Disaster
a.m.–11:30 a.m.
Assistance.
[FR Doc. 2017–17174 Filed 8–14–17; 8:45 am]
FOR FURTHER INFORMATION CONTACT:
BILLING CODE 8025–01–P
Sarah Lobrichon (Ottawa), 613–992–
5368, lobrichons@ottawa.ijc.org
Frank Bevacqua (Washington), 202–
736–9024, bevacqauf@
DEPARTMENT OF STATE
washington.ijc.org
[Public notice: 10083]
SUPPLEMENTARY INFORMATION: The
Commission’s proposal relating to the
International Joint Commission:
Emergency Regulation of Levels on
Invites Public Comment on Review of
Rainy and Namakan Lakes are centered
Emergency Levels for Rainy and
on five general themes:
Namakan Lakes
Changes to existing Rule Curves:
AGENCY: Department of State.
Alternative C for the rule curves for
Rainy and Namakan lakes, which
ACTION: International Joint Commission:
includes a rule curve for high flood risk
Invites Public Comment on Review of
years for Rainy Lake, should be adopted.
Emergency Levels for Rainy and
An expanded role for the Water Levels
Namakan Lakes.
Committee (WLC) of the International
SUMMARY: The International Joint
Rainy-Lake of the Woods Watershed
Commission (IJC) announced today that Board (IRLWWB): The WLC should be
it is inviting public comment on
empowered to target specific levels
Emergency Levels for Rainy and
outside of the middle portion of the rule
Namakan Lakes (also known as Rule
curve for each lake. New operational
Curves). Comments will be accepted at
guidelines are needed for the WLC, and
public hearings and by mail, email and
further guidance, in the form of a
on-line until September 1, 2017.
refined directive for the IRLWWB and
Following receipt of the International
the WLC, is needed.
Rainy and Namakan Lakes Rule Curves
Adaptive Management: The
Study Board’s final report in late June,
Commission will work with the
409 3rd Street SW., Suite 6050,
Washington, DC 20416, (202) 205–6734.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
08/08/2017, Private Non-Profit
organizations that provide essential
services of a 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: Columbia, Deschutes,
Hood River, Josephine.
The Interest Rates are:
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]]>Agencies
[Federal Register Volume 82, Number 156 (Tuesday, August 15, 2017)]
[Notices]
[Pages 38752-38755]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-17168]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-81360; File No. SR-NASDAQ-2017-079]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend the Market Access and Routing Subsidy Program
August 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 August 1, 2017, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``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 solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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[[Page 38753]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's transaction fees at
Chapter XV, Section 2 entitled ``NASDAQ Options Market--Fees and
Rebates,'' which governs pricing for Nasdaq Participants using the
NASDAQ Options Market (``NOM''), Nasdaq's facility for executing and
routing standardized equity and index options. The Exchange proposes to
amend its subsidy program, the Market Access and Routing Subsidy or
``MARS,'' for NOM Participants that provide certain order routing
functionalities \3\ to other NOM Participants and/or use such
functionalities themselves.
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\3\ The order routing functionalities permit a NOM Participant
to provide access and connectivity to other Participants as well as
utilize such access for themselves. The Exchange notes that one NOM
Participant is eligible for payments under MARS, while another NOM
Participant might potentially be liable for transaction charges
associated with the execution of the order, because those orders
were delivered to the Exchange through a NOM Participant's
connection to the Exchange and that Participant qualified for the
MARS Payment.
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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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend its MARS subsidy program, which pays
a subsidy to NOM Participants that provide certain order routing
functionalities to other NOM Participants and/or use such
functionalities themselves. Generally, under MARS, the Exchange pays
participating NOM Participants to subsidize their costs of providing
routing services to route orders to NOM. At this time, the Exchange
proposes to amend Chapter XV, Section 2(6) to expand the MARS Payment
tiers as described further below.
Today, NOM Participants that have System Eligibility \4\ and have
routed the requisite number of Eligible Contracts daily in a month
(``Average Daily Volume''), which were executed on NOM, are entitled to
a MARS Payment. For the purpose of qualifying for the MARS Payment,
Eligible Contracts may include Firm,\5\ Non-NOM Market Maker,\6\
Broker-Dealer,\7\ or Joint Back Office or ``JBO'' \8\ equity option
orders that add liquidity and are electronically delivered and
executed.\9\
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\4\ To qualify for MARS, the Participant's routing system
(``System'') is required to: (1) Enable the electronic routing of
orders to all of the U.S. options exchanges, including NOM; (2)
provide current consolidated market data from the U.S. options
exchanges; and (3) be capable of interfacing with NOM's API to
access current NOM match engine functionality. Further, the
Participant's System would also need to cause NOM to be one of the
top three default destination exchanges for (a) individually
executed marketable orders if NOM is at the national best bid or
offer (``NBBO''), regardless of size or time or (b) orders that
establish a new NBBO on NOM's Order Book, but allow any user to
manually override NOM as a default destination on an order-by-order
basis. Any NOM Participant would be permitted to avail itself of
this arrangement, provided that its order routing functionality
incorporates the features described above and satisfies NOM that it
appears to be robust and reliable. The Participant remains solely
responsible for implementing and operating its System. See Chapter
XV, Section 2(6).
\5\ The term ``Firm'' or (``F'') applies to any transaction that
is identified by a Participant for clearing in the Firm range at
OCC.
\6\ The term ``Non-NOM Market Maker'' or (``O'') is a registered
market maker on another options exchange that is not a NOM Market
Maker. A Non-NOM Market Maker must append the proper Non-NOM Market
Maker designation to orders routed to NOM.
\7\ The term ``Broker-Dealer'' or (``B'') applies to any
transaction which is not subject to any of the other transaction
fees applicable within a particular category.
\8\ The term ``Joint Back Office'' or ``JBO'' applies to any
transaction that is identified by a Participant for clearing in the
Firm range at OCC and is identified with an origin code as a JBO. A
JBO will be priced the same as a Broker-Dealer as of September 1,
2014. A JBO participant is a Participant that maintains a JBO
arrangement with a clearing broker-dealer (``JBO Broker'') subject
to the requirements of Regulation T Section 220.7 of the Federal
Reserve System as further discussed in Chapter XIII, Section 5.
\9\ Eligible Contracts do not include Mini Option orders. Mini
Options are further specified in Chapter XV, Section 2(4).
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The Exchange currently pays the following MARS Payments according
to Average Daily Volume (``ADV'') \10\ submitted on NOM:
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\10\ Average Daily Volume is all Eligible Contracts daily in a
month aggregating Penny and Non-Penny Pilot Options.
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Average daily MARS Payment MARS Payment
Tiers volume (``ADV'') (penny) (non-penny)
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1...................................................... 2,500 $0.07 $0.15
2...................................................... 5,000 0.09 0.20
3...................................................... 10,000 0.11 0.30
4...................................................... 20,000 0.15 0.50
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Also, NOM Participants that qualify for Customer and Professional
Penny Pilot Options Rebate to Add Liquidity Tier 8 in Chapter XV,
Section 2(1) will receive $0.09 per contract in addition to any MARS
Payment tier on MARS Eligible Contracts the NOM Participant qualifies
for in a given month. The specified MARS Payment will be paid on all
executed Eligible Contracts that add liquidity, which are routed to NOM
through a participating NOM Participant's System and meet the requisite
Eligible Contracts ADV. No payments will be made with respect to orders
that are routed to NOM, but not executed.\11\
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\11\ A Participant will not be entitled to receive any other
revenue for the use of its System specifically with respect to
orders routed to NOM. The Exchange believes that MARS Payment will
subsidize the costs of NOM Participants in providing the routing
services.
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The Exchange proposes to add a new Tier 5 with an ADV of 45,000
contracts and pay a MARS Payment of (i) $0.17 per contract for Penny
Pilot Options transactions that qualify for the MARS Payment tier
program and (ii) $0.60 per contract for Non-Penny Pilot Options
transactions that qualify for the MARS Payment tier program. The
Exchange would continue to pay an additional $0.09 per contract in
addition to any MARS Payment tier on MARS Eligible Contracts in a given
month, provided
[[Page 38754]]
the NOM Participant qualified for the Customer and Professional Penny
Pilot Options Rebate to Add Liquidity Tier 8 in Chapter XV, Section
2(1). The Exchange believes that as proposed, MARS will continue to
attract higher volumes of electronic equity and ETF options volume to
the Exchange from non-NOM Participants as well as NOM Participants.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\13\ 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, and is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal to add a new Tier 5 with an ADV of 45,000
contracts and pay the MARS Payment in the amounts described above is
reasonable because the amendments will attract higher volumes of
electronic equity and ETF options volume to the Exchange, which will
benefit all NOM Participants by offering greater price discovery,
increased transparency, and an increased opportunity to trade on the
Exchange. The expanded MARS Payments should enhance the competitiveness
of the Exchange, particularly with respect to those exchanges that
offer their own front-end order entry system or one they subsidize in
some manner. The amendment to add Tier 5 will incentivize NOM
Participants to achieve an even higher Penny Pilot Options Rebate,
provided the NOM Participant is eligible for MARS. Further, the tier
structure will allow NOM Participants to price their services at a
level that will enable them to attract order flow from market
participants who would otherwise utilize an existing front-end order
entry mechanism offered by the Exchange's competitors instead of
incurring the cost in time and money to develop their own internal
systems to be able to deliver orders directly to the Exchange's System.
The Exchange's proposal to add a new Tier 5 and pay the MARS
Payment in the amounts described above is equitable and not unfairly
discriminatory because the Exchange will uniformly pay all NOM
Participants the rebates specified in the proposed MARS Payment tiers
provided the NOM Participant has executed the requisite number of
Eligible Contracts. Moreover, the Exchange believes that the proposed
MARS Payments offered by the Exchange are equitable and not unfairly
discriminatory because any qualifying NOM Participant that offers
market access and connectivity to the Exchange and/or utilize such
functionality themselves may earn the MARS Payments for all Eligible
Contracts.
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. In terms of inter-market
competition, the Exchange notes that it operates in a highly
competitive market in which market participants can readily favor
competing venues if they deem fee levels at a particular venue to be
excessive, or rebate opportunities available at other venues to be more
favorable. In such an environment, the Exchange must continually adjust
its fees to remain competitive with other exchanges and with
alternative trading systems that have been exempted from compliance
with the statutory standards applicable to exchanges. Because
competitors are free to modify their own fees in response, and because
market participants may readily adjust their order routing practices,
the Exchange believes that the degree to which fee changes in this
market may impose any burden on competition is extremely limited.
In sum, if the fee changes proposed herein are unattractive to
market participants, it is likely that the Exchange will lose market
share as a result. Accordingly, the Exchange does not believe that the
proposed changes will impair the ability of members or competing order
execution venues to maintain their competitive standing in the
financial markets.
Further, the Exchange's proposal does not impose an undue burden on
intra-market competition because the Exchange will uniformly pay all
NOM Participants the rebates specified in the proposed MARS Payment
tiers provided the NOM Participant has executed the requisite number of
Eligible Contracts. Moreover, any qualifying NOM Participant that
offers market access and connectivity to the Exchange and/or utilizes
such functionality themselves may earn the proposed MARS Payment for
all Eligible Contracts.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\14\
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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
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-2017-079 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-2017-079. 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
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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-2017-079, and should
be submitted on or before September 5, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-17168 Filed 8-14-17; 8:45 am]
BILLING CODE 8011-01-P
