Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period for the Retail Price Improvement Program Until December 31, 2018, 31203-31205 [2018-14284]
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Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices
with CBOE by offering a firm
participation allocation with the same
eligibility size that CBOE currently
offers. Additionally, the Commission
notes that the proposed rule change is
based on the current rules of CBOE 17
and that it recently approved a similar
rule change for the BOX Options
Exchange LLC.18 As such, the
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Accordingly, the
Commission waives the 30-day
operative delay and designates the
proposed rule change operative upon
filing.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:
sradovich on DSK3GMQ082PROD with NOTICES
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–
Phlx–2018–48 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–Phlx–2018–48. 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
17 See
supra note 4.
Securities Exchange Act Release No. 82456
(January, 8, 2008), 83 FR 1651 (January 12, 2018)
(SR–BOX–2017–33) (Approval Order).
19 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
18 See
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internet website (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 website 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.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–Phlx–2018–48 and should
be submitted on or before July 24, 2018.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.20
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018–14301 Filed 7–2–18; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–83539; File No. SR–BX–
2018–026]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Extend the Pilot
Period for the Retail Price
Improvement Program Until December
31, 2018
June 28, 2018.
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 June 21,
2018, Nasdaq BX, Inc. (‘‘BX’’ 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
PO 00000
20 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Fmt 4703
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31203
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 extend the
pilot period for the Exchange’s Retail
Price Improvement (‘‘RPI’’) Program (the
‘‘Program’’), which is set to expire on
June 30, 2018, for an additional period,
to expire on December 31, 2018.
The Exchange has designated July 1,
2018 as the date the proposed rule
change becomes effective.
The text of the proposed rule change
is available on the Exchange’s website at
https://nasdaqbx.cchwallstreet.com/, at
the principal office of the Exchange, and
at the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to extend
the pilot period of the RPI Program,3
currently scheduled to expire on June
30, 2018, for an additional period, to
expire on December 31, 2018.
Background
In November 2014, the Commission
approved the RPI Program on a pilot
basis.4 The Program is designed to
attract retail order flow to the Exchange,
and allow such order flow to receive
potential price improvement. The
Program is currently limited to trades
occurring at prices equal to or greater
than $1.00 per share. Under the
Program, a new class of market
participant called a Retail Member
3 Securities Exchange Act Release No. 73702
(November 28, 2014), 79 FR 72049 (December 4,
2014) (‘‘RPI Approval Order’’) (SR–BX–2014–048).
4 See id.
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Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices
Orders. Such competition has the ability
to promote efficiency by facilitating the
price discovery process and generating
additional investor interest in trading
securities, thereby promoting capital
formation. The Exchange believes that
extending the pilot is appropriate
because it will allow the Exchange and
the Commission additional time to
analyze data regarding the Program that
the Exchange has committed to
provide.11 As such, the Exchange
believes that it is appropriate to extend
the current operation of the Program.12
Through this filing, the Exchange seeks
to amend BX Rule 4780(h) 13 and extend
the current pilot period of the Program
until the earlier of approval of the filing
to make the Program permanent or
December 31, 2018.
Proposal To Extend the Operation of the
Program
The Exchange established the RPI
Program in an attempt to attract retail
order flow to the Exchange by
potentially providing price
improvement to such order flow. The
Exchange believes that the Program
promotes competition for retail order
flow by allowing Exchange members to
submit Retail Price Improvement Orders
(‘‘RPI Orders’’) 10 to interact with Retail
sradovich on DSK3GMQ082PROD with NOTICES
Organization (‘‘RMO’’) is eligible to
submit certain retail order flow (‘‘Retail
Orders’’) 5 to the Exchange. BX members
(‘‘Members’’) are permitted to provide
potential price improvement for Retail
Orders in the form of non-displayed
interest that is priced more aggressively
than the Protected National Best Bid or
Offer (‘‘Protected NBBO’’).6
The Program was approved by the
Commission on a pilot basis running
one-year from the date of
implementation.7 The Commission
approved the Program on November 28,
2014.8 The Exchange implemented the
Program on December 1, 2014 and the
pilot has since been extended for a one
year period twice and for an additional
six month period with it now scheduled
to end on June 30, 2018.9
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6 of the Act,14
in general, and with Section 6(b)(5) of
the Act,15 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 believes that extending
the pilot period for the RPI Program is
consistent with these principles because
the Program is reasonably designed to
attract retail order flow to the exchange
environment, while helping to ensure
that retail investors benefit from the
better price that liquidity providers are
willing to give their orders.
Additionally, as previously stated, the
competition promoted by the Program
may facilitate the price discovery
process and potentially generate
additional investor interest in trading
securities. The extension of the pilot
period will allow the Commission and
5 A ‘‘Retail Order’’ is defined in BX Rule
4780(a)(2) by referencing BX Rule 4702, and BX
Rule 4702(b)(6) says it is an order type with a nondisplay order attribute submitted to the Exchange
by a RMO. A Retail Order must be an agency order,
or riskless principal order that satisfies the criteria
of FINRA Rule 5320.03. The Retail Order must
reflect trading interest of a natural person with no
change made to the terms of the underlying order
of the natural person with respect to price (except
in the case of a market order that is changed to a
marketable limit order) or side of market and that
does not originate from a trading algorithm or any
other computerized methodology.
6 The term Protected Quotation is defined in
Chapter XII, Sec. 1(19) and has the same meaning
as is set forth in Regulation NMS Rule 600(b)(58).
The Protected NBBO is the best-priced protected
bid and offer. Generally, the Protected NBBO and
the national best bid and offer (‘‘NBBO’’) will be the
same. However, a market center is not required to
route to the NBBO if that market center is subject
to an exception under Regulation NMS Rule
611(b)(1) or if such NBBO is otherwise not available
for an automatic execution. In such case, the
Protected NBBO would be the best-priced protected
bid or offer to which a market center must route
interest pursuant to Regulation NMS Rule 611.
7 See RPI Approval Order, supra note 3 at 72053.
8 Id. at 72049.
9 See Securities Exchange Act Release No. 76490
(November 20, 2015), 80 FR 74165 (November 27,
2015) (SR–BX–2015–073); Securities Exchange Act
Release No. 79446 (December 1, 2016), 81 FR 88290
(December 7, 2016) (SR–BX–2016–065); Securities
Exchange Act Release No. 82192 (December 1,
2017), 82 FR 57809 (December 7, 2017) (SR–BX–
2017–055).
10 A Retail Price Improvement Order is defined in
BX Rule 4780(a)(3) by referencing BX Rule 4702
and BX Rule 4702(b)(5) says that it is as an order
type with a non-display order attribute that is held
on the Exchange Book in order to provide liquidity
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at a price at least $0.001 better than the NBBO
through a special execution process described in
Rule 4780.
11 See RPI Approval Order, supra note 3 at 72051.
12 Concurrently with this filing, the Exchange has
submitted a request for an extension of the
exemption under Regulation NMS Rule 612
previously granted by the Commission that permits
it to accept and rank the RPI orders in sub-penny
increments. See Letter from Jeffrey S. Davis, Vice
President and Deputy General Counsel and
Secretary, Nasdaq BX, Inc. to Eduardo A. Aleman,
Assistant Secretary, Securities and Exchange
Commission dated June 21, 2018.
13 The Exchange notes that the proposed
amendment to BX Rule 4780(h) would amend the
current version of BX Rule 4780(h), which the
Exchange also proposes to amend as part of the
Exchange’s filing to make BX Rule 4780(h)
permanent. See SR–BX–2018–025.
14 15 U.S.C. 78f.
15 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00088
Fmt 4703
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the Exchange to continue to monitor the
Program for its potential effects on
public price discovery, and on the
broader market structure.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange 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, as amended.
The proposed rule change extends an
established pilot program for an
additional period, to expire on
December 31, 2018, thus allowing the
RPI Program to enhance competition for
retail order flow and contribute to the
public price discovery process.
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 Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 16 and Rule
19b–4(f)(6) thereunder.17 Because the
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, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 18 and Rule 19b–4(f)(6)
thereunder.19
A proposed rule change filed under
Rule 19b–4(f)(6) 20 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),21 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposed
rule change may become operative
immediately. The Commission believes
that waiving the 30-day operative delay
is consistent with the protection of
16 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
18 15 U.S.C. 78s(b)(3)(A).
19 17 CFR 240.19b–4(f)(6).
20 17 CFR 240.19b–4(f)(6).
21 17 CFR 240.19b–4(f)(6)(iii).
17 17
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Federal Register / Vol. 83, No. 128 / Tuesday, July 3, 2018 / Notices
investors and the public interest,
because waiver would allow the pilot
period to continue uninterrupted after
its current expiration date of June 30,
2018, thereby avoiding any potential
investor confusion that could result
from temporary interruption in the
Program. For this reason, the
Commission hereby waives the 30-day
operative delay and designates the
proposal operative upon filing.22
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–
BX–2018–026 on the subject line.
sradovich on DSK3GMQ082PROD with NOTICES
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–BX–2018–026. This file
22 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f). In
addition, Rule 19b–4(f)(6)(iii) requires the Exchange
to give the Commission written notice of the
Exchange’s intent to file the proposed rule change,
along with a brief description and 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. The Exchange did not provide this
notice, and it has requested that the Commission
waive the requirement for this proposed rule
change in order to allow the Program to continue
uninterrupted. The Exchange asserts this would
benefit market participants and help to eliminate
the potential for investor confusion. For the same
reasons stated above with regard to the
Commission’s waiver of the 30-day operative delay,
the Commission permits this proposed rule change
to be filed without advanced written notice of the
Exchange’s intent to file.
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17:07 Jul 02, 2018
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31205
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 website (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 website 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
offices of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–BX–2018–026, and should
be submitted on or before July 24, 2018.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B)
and (10) and 17 CFR 200.402(a)(3),
(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and
(a)(10), permit consideration of the
scheduled matters at the closed meeting.
Commissioner Stein, as duty officer,
voted to consider the items listed for the
closed meeting in closed session.
The subject matters of the closed
meeting will be:
Institution and settlement of
injunctive actions;
Institution and settlement of
administrative proceedings;
Resolution of litigation claims; and
Other matters relating to enforcement
proceedings.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
CONTACT PERSON FOR MORE INFORMATION:
For further information and to ascertain
what, if any, matters have been added,
deleted or postponed; please contact
Brent J. Fields from the Office of the
Secretary at (202) 551–5400.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Eduardo A. Aleman,
Assistant Secretary.
SECURITIES AND EXCHANGE
COMMISSION
Dated: June 28, 2018.
Brent J. Fields,
Secretary.
[FR Doc. 2018–14392 Filed 6–29–18; 11:15 am]
BILLING CODE 8011–01–P
[Release No. 34–83532; File No. SR–
NYSEAMER–2018–32]
[FR Doc. 2018–14284 Filed 7–2–18; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
Self-Regulatory Organizations; NYSE
American LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Change To Modify the NYSE American
Options Fee Schedule
Sunshine Act Meetings
June 28, 2018.
BILLING CODE 8011–01–P
TIME AND DATE:
2:00 p.m. on Thursday,
July 5, 2018.
Closed Commission Hearing,
Room 10800.
STATUS: This meeting will be closed to
the public.
MATTERS TO BE CONSIDERED:
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the closed meeting. Certain
staff members who have an interest in
the matters also may be present.
PLACE:
PO 00000
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on June 20,
2018, NYSE American LLC (the
‘‘Exchange’’ or ‘‘NYSE American’’) 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 selfregulatory organization. The
Commission is publishing this notice to
1 15
U.S.C.78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
23 17
CFR 200.30–3(a)(12), (59).
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]]>Agencies
[Federal Register Volume 83, Number 128 (Tuesday, July 3, 2018)]
[Notices]
[Pages 31203-31205]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14284]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-83539; File No. SR-BX-2018-026]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot
Period for the Retail Price Improvement Program Until December 31, 2018
June 28, 2018.
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 June 21, 2018, Nasdaq BX, Inc. (``BX'' 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 extend the pilot period for the Exchange's
Retail Price Improvement (``RPI'') Program (the ``Program''), which is
set to expire on June 30, 2018, for an additional period, to expire on
December 31, 2018.
The Exchange has designated July 1, 2018 as the date the proposed
rule change becomes effective.
The text of the proposed rule change is available on the Exchange's
website at https://nasdaqbx.cchwallstreet.com/, at the principal office
of the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to extend the pilot period of the RPI
Program,\3\ currently scheduled to expire on June 30, 2018, for an
additional period, to expire on December 31, 2018.
---------------------------------------------------------------------------
\3\ Securities Exchange Act Release No. 73702 (November 28,
2014), 79 FR 72049 (December 4, 2014) (``RPI Approval Order'') (SR-
BX-2014-048).
---------------------------------------------------------------------------
Background
In November 2014, the Commission approved the RPI Program on a
pilot basis.\4\ The Program is designed to attract retail order flow to
the Exchange, and allow such order flow to receive potential price
improvement. The Program is currently limited to trades occurring at
prices equal to or greater than $1.00 per share. Under the Program, a
new class of market participant called a Retail Member
[[Page 31204]]
Organization (``RMO'') is eligible to submit certain retail order flow
(``Retail Orders'') \5\ to the Exchange. BX members (``Members'') are
permitted to provide potential price improvement for Retail Orders in
the form of non-displayed interest that is priced more aggressively
than the Protected National Best Bid or Offer (``Protected NBBO'').\6\
---------------------------------------------------------------------------
\4\ See id.
\5\ A ``Retail Order'' is defined in BX Rule 4780(a)(2) by
referencing BX Rule 4702, and BX Rule 4702(b)(6) says it is an order
type with a non-display order attribute submitted to the Exchange by
a RMO. A Retail Order must be an agency order, or riskless principal
order that satisfies the criteria of FINRA Rule 5320.03. The Retail
Order must reflect trading interest of a natural person with no
change made to the terms of the underlying order of the natural
person with respect to price (except in the case of a market order
that is changed to a marketable limit order) or side of market and
that does not originate from a trading algorithm or any other
computerized methodology.
\6\ The term Protected Quotation is defined in Chapter XII, Sec.
1(19) and has the same meaning as is set forth in Regulation NMS
Rule 600(b)(58). The Protected NBBO is the best-priced protected bid
and offer. Generally, the Protected NBBO and the national best bid
and offer (``NBBO'') will be the same. However, a market center is
not required to route to the NBBO if that market center is subject
to an exception under Regulation NMS Rule 611(b)(1) or if such NBBO
is otherwise not available for an automatic execution. In such case,
the Protected NBBO would be the best-priced protected bid or offer
to which a market center must route interest pursuant to Regulation
NMS Rule 611.
---------------------------------------------------------------------------
The Program was approved by the Commission on a pilot basis running
one-year from the date of implementation.\7\ The Commission approved
the Program on November 28, 2014.\8\ The Exchange implemented the
Program on December 1, 2014 and the pilot has since been extended for a
one year period twice and for an additional six month period with it
now scheduled to end on June 30, 2018.\9\
---------------------------------------------------------------------------
\7\ See RPI Approval Order, supra note 3 at 72053.
\8\ Id. at 72049.
\9\ See Securities Exchange Act Release No. 76490 (November 20,
2015), 80 FR 74165 (November 27, 2015) (SR-BX-2015-073); Securities
Exchange Act Release No. 79446 (December 1, 2016), 81 FR 88290
(December 7, 2016) (SR-BX-2016-065); Securities Exchange Act Release
No. 82192 (December 1, 2017), 82 FR 57809 (December 7, 2017) (SR-BX-
2017-055).
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Proposal To Extend the Operation of the Program
The Exchange established the RPI Program in an attempt to attract
retail order flow to the Exchange by potentially providing price
improvement to such order flow. The Exchange believes that the Program
promotes competition for retail order flow by allowing Exchange members
to submit Retail Price Improvement Orders (``RPI Orders'') \10\ to
interact with Retail Orders. Such competition has the ability to
promote efficiency by facilitating the price discovery process and
generating additional investor interest in trading securities, thereby
promoting capital formation. The Exchange believes that extending the
pilot is appropriate because it will allow the Exchange and the
Commission additional time to analyze data regarding the Program that
the Exchange has committed to provide.\11\ As such, the Exchange
believes that it is appropriate to extend the current operation of the
Program.\12\ Through this filing, the Exchange seeks to amend BX Rule
4780(h) \13\ and extend the current pilot period of the Program until
the earlier of approval of the filing to make the Program permanent or
December 31, 2018.
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\10\ A Retail Price Improvement Order is defined in BX Rule
4780(a)(3) by referencing BX Rule 4702 and BX Rule 4702(b)(5) says
that it is as an order type with a non-display order attribute that
is held on the Exchange Book in order to provide liquidity at a
price at least $0.001 better than the NBBO through a special
execution process described in Rule 4780.
\11\ See RPI Approval Order, supra note 3 at 72051.
\12\ Concurrently with this filing, the Exchange has submitted a
request for an extension of the exemption under Regulation NMS Rule
612 previously granted by the Commission that permits it to accept
and rank the RPI orders in sub-penny increments. See Letter from
Jeffrey S. Davis, Vice President and Deputy General Counsel and
Secretary, Nasdaq BX, Inc. to Eduardo A. Aleman, Assistant
Secretary, Securities and Exchange Commission dated June 21, 2018.
\13\ The Exchange notes that the proposed amendment to BX Rule
4780(h) would amend the current version of BX Rule 4780(h), which
the Exchange also proposes to amend as part of the Exchange's filing
to make BX Rule 4780(h) permanent. See SR-BX-2018-025.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\14\ in general, and with
Section 6(b)(5) of the Act,\15\ 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.
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\14\ 15 U.S.C. 78f.
\15\ 15 U.S.C. 78f(b)(5).
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The Exchange believes that extending the pilot period for the RPI
Program is consistent with these principles because the Program is
reasonably designed to attract retail order flow to the exchange
environment, while helping to ensure that retail investors benefit from
the better price that liquidity providers are willing to give their
orders. Additionally, as previously stated, the competition promoted by
the Program may facilitate the price discovery process and potentially
generate additional investor interest in trading securities. The
extension of the pilot period will allow the Commission and the
Exchange to continue to monitor the Program for its potential effects
on public price discovery, and on the broader market structure.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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, as amended. The
proposed rule change extends an established pilot program for an
additional period, to expire on December 31, 2018, thus allowing the
RPI Program to enhance competition for retail order flow and contribute
to the public price discovery process.
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \16\ and Rule 19b-4(f)(6) thereunder.\17\
Because the 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, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \18\ and Rule 19b-
4(f)(6) thereunder.\19\
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\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6).
\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of
[[Page 31205]]
investors and the public interest, because waiver would allow the pilot
period to continue uninterrupted after its current expiration date of
June 30, 2018, thereby avoiding any potential investor confusion that
could result from temporary interruption in the Program. For this
reason, the Commission hereby waives the 30-day operative delay and
designates the proposal operative upon filing.\22\
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\20\ 17 CFR 240.19b-4(f)(6).
\21\ 17 CFR 240.19b-4(f)(6)(iii).
\22\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to
give the Commission written notice of the Exchange's intent to file
the proposed rule change, along with a brief description and 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. The Exchange did not provide this
notice, and it has requested that the Commission waive the
requirement for this proposed rule change in order to allow the
Program to continue uninterrupted. The Exchange asserts this would
benefit market participants and help to eliminate the potential for
investor confusion. For the same reasons stated above with regard to
the Commission's waiver of the 30-day operative delay, the
Commission permits this proposed rule change to be filed without
advanced written notice of the Exchange's intent to file.
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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 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 [email protected]. Please include
File Number SR-BX-2018-026 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-BX-2018-026. 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 website (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 website 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 offices of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-BX-2018-026, and should be submitted on
or before July 24, 2018.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12), (59).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-14284 Filed 7-2-18; 8:45 am]
BILLING CODE 8011-01-P
