Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Fees at Rule 7018(a), 47381-47384 [2018-20308]
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Federal Register / Vol. 83, No. 182 / Wednesday, September 19, 2018 / Notices
with the requirements of 39 CFR
3007.301.1
The Commission invites comments on
whether the Postal Service’s request(s)
in the captioned docket(s) are consistent
with the policies of title 39. For
request(s) that the Postal Service states
concern market dominant product(s),
applicable statutory and regulatory
requirements include 39 U.S.C. 3622, 39
U.S.C. 3642, 39 CFR part 3010, and 39
CFR part 3020, subpart B. For request(s)
that the Postal Service states concern
competitive product(s), applicable
statutory and regulatory requirements
include 39 U.S.C. 3632, 39 U.S.C. 3633,
39 U.S.C. 3642, 39 CFR part 3015, and
39 CFR part 3020, subpart B. Comment
deadline(s) for each request appear in
section II.
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II. Docketed Proceeding(s)
1. Docket No(s).: CP2017–251; Filing
Title: Notice of the United States Postal
Service of Filing Modification Three to
a Global Plus 1D Negotiated Service
Agreement; Filing Acceptance Date:
September 13, 2018; Filing Authority: 39
CFR 3015.5; Public Representative:
Kenneth R. Moeller; Comments Due:
September 21, 2018.
2. Docket No(s).: CP2017–255; Filing
Title: Notice of the United States Postal
Service of Filing Modification Two to a
Global Plus 1D Negotiated Service
Agreement; Filing Acceptance Date:
September 13, 2018; Filing Authority: 39
CFR 3015.5; Public Representative:
Kenneth R. Moeller; Comments Due:
September 21, 2018.
3. Docket No(s).: CP2018–302; Filing
Title: Notice of United States Postal
Service of Filing a Functionally
Equivalent Global Expedited Package
Services 8 Negotiated Service
Agreement and Application for NonPublic Treatment of Materials Filed
Under Seal; Filing Acceptance Date:
September 12, 2018; Filing Authority: 39
CFR 3015.5; Public Representative:
Christopher C. Mohr; Comments Due:
September 21, 2018.
4. Docket No(s).: CP2018–303; Filing
Title: Notice of United States Postal
Service of Filing a Functionally
Equivalent Global Reseller Expedited
Package 2 Negotiated Service
Agreement; Filing Acceptance Date:
September 13, 2018; Filing Authority: 39
CFR 3015.5; Public Representative:
Christopher C. Mohr; Comments Due:
September 21, 2018.
5. Docket No(s).: CP2018–304; Filing
Title: Notice of United States Postal
1 See Docket No. RM2018–3, Order Adopting
Final Rules Relating to Non-Public Information,
June 27, 2018, Attachment A at 19–22 (Order No.
4679).
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Service of Filing a Functionally
Equivalent Global Expedited Package
Services 8 Negotiated Service
Agreement and Application for NonPublic Treatment of Materials Filed
Under Seal; Filing Acceptance Date:
September 13, 2018; Filing Authority: 39
CFR 3015.5; Public Representative:
Christopher C. Mohr; Comments Due:
September 21, 2018.
6. Docket No(s).: MC2018–219 and
CP2018–305; Filing Title: USPS Request
to Add Priority Mail & First-Class
Package Service Contract 89 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: September 13, 2018;
Filing Authority: 39 U.S.C. 3642 and 39
CFR 3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Jennaca D.
Upperman; Comments Due: September
24, 2018.
7. Docket No(s).: MC2018–220 and
CP2018–306; Filing Title: USPS Request
to Add Priority Mail Contract 465 to
Competitive Product List and Notice of
Filing Materials Under Seal; Filing
Acceptance Date: September 13, 2018;
Filing Authority: 39 U.S.C. 3642 and 39
CFR 3020.30 et seq., and 39 CFR 3015.5;
Public Representative: Jennaca D.
Upperman; Comments Due: September
24, 2018.
This Notice will be published in the
Federal Register.
Stacy L. Ruble,
Secretary.
[FR Doc. 2018–20366 Filed 9–18–18; 8:45 am]
BILLING CODE 7710–FW–P
Postal ServiceTM.
Notice.
AGENCY:
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[FR Doc. 2018–20314 Filed 9–18–18; 8:45 am]
BILLING CODE 7710–12–P
POSTAL SERVICE
Product Change—Priority Mail and
First-Class Package Service
Negotiated Service Agreement
Postal ServiceTM.
Notice.
AGENCY:
ACTION:
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice:
September 19, 2018.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on September 13,
2018, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail & First-Class Package
Service Contract 89 to Competitive
Product List. Documents are available at
www.prc.gov, Docket Nos. MC2018–219,
CP2018–305.
SUMMARY:
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BILLING CODE 7710–12–P
SECURITIES AND EXCHANGE
COMMISSION
The Postal Service gives
notice of filing a request with the Postal
Regulatory Commission to add a
domestic shipping services contract to
the list of Negotiated Service
Agreements in the Mail Classification
Schedule’s Competitive Products List.
DATES: Date of required notice:
September 19, 2018.
FOR FURTHER INFORMATION CONTACT:
Elizabeth Reed, 202–268–3179.
SUPPLEMENTARY INFORMATION: The
United States Postal Service® hereby
gives notice that, pursuant to 39 U.S.C.
3642 and 3632(b)(3), on September 13,
2018, it filed with the Postal Regulatory
Commission a USPS Request to Add
Priority Mail Contract 465 to
Competitive Product List. Documents
SUMMARY:
Frm 00054
Elizabeth Reed,
Attorney, Corporate and Postal Business Law.
[FR Doc. 2018–20313 Filed 9–18–18; 8:45 am]
Product Change—Priority Mail
Negotiated Service Agreement
PO 00000
are available at www.prc.gov, Docket
Nos. MC2018–220, CP2018–306.
Elizabeth Reed,
Attorney, Corporate and Postal Business Law.
POSTAL SERVICE
ACTION:
47381
[Release No. 34–84114; File No. SR–BX–
2018–043]
Self-Regulatory Organizations; Nasdaq
BX, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Amend Fees at Rule
7018(a)
September 13, 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
September 4, 2018, Nasdaq BX, Inc.
(‘‘BX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 83, No. 182 / Wednesday, September 19, 2018 / Notices
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
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 its
transaction fees at Rule 7018(a) to: (i)
Increase the level of total Consolidated
Volume require to qualify for a $0.0017
per share executed credit; and (ii) adopt
a new $0.0016 per share executed
credit.
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
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1. Purpose
The purpose of the proposed rule
change is to: (i) Increase the level of
total Consolidated Volume require to
qualify for a $0.0017 per share executed
credit; and (ii) adopt a new $0.0016 per
share executed credit.
First Change
Under Rule 7018, the Exchange
assesses charges and credits for the use
of the order execution and routing
services of the Nasdaq BX Equities
System by members for all securities
priced at $1 or more per share that it
trades. The Exchange operates on the
‘‘taker-maker’’ model, whereby it pays
credits to members that take liquidity
and charges fees to members that
provide liquidity. Currently, the
Exchange offers several different credits
for orders that access liquidity on the
Exchange. Among these credits, the
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Exchange pays a credit of $0.0017 per
share executed for an Order that
accesses liquidity (excluding orders
with Midpoint pegging and excluding
orders that receive price improvement
and execute against an order with a
Non-displayed price) entered by a
member that accesses liquidity equal to
or exceeding 0.10% of total
Consolidated Volume 3 during a month.
The Exchange is proposing to increase
the level of total Consolidated Volume
required to qualify for the credit from
0.10% to 0.12%.
Second Change
The Exchange is proposing to adopt a
new $0.0016 per share executed credit
available for an Order that accesses
liquidity (excluding orders with
Midpoint pegging and excluding orders
that receive price improvement and
execute against an order with a Nondisplayed price). To receive the credit a
member must (i) add liquidity equal to
or exceeding 0.60% of total
Consolidated Volume during a month;
and (ii) access liquidity equal to or
exceeding 0.10% of total Consolidated
Volume during a month.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,4 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,5 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 Commission and the courts have
repeatedly expressed their preference
for competition over regulatory
intervention in determining prices,
products, and services in the securities
markets. In Regulation NMS, while
adopting a series of steps to improve the
current market model, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
3 Rule 7018(a) defines Consolidated Volume as
the total consolidated volume reported to all
consolidated transaction reporting plans by all
exchanges and trade reporting facilities during a
month in equity securities, excluding executed
orders with a size of less than one round lot. For
purposes of calculating Consolidated Volume and
the extent of a member’s trading activity the date
of the annual reconstitution of the Russell
Investments Indexes shall be excluded from both
total Consolidated Volume and the member’s
trading activity.
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(4) and (5).
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‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 6
Likewise, in NetCoalition v. Securities
and Exchange Commission7
(‘‘NetCoalition’’) the D.C. Circuit upheld
the Commission’s use of a market-based
approach in evaluating the fairness of
market data fees against a challenge
claiming that Congress mandated a costbased approach.8 As the court
emphasized, the Commission ‘‘intended
in Regulation NMS that ‘market forces,
rather than regulatory requirements’
play a role in determining the market
data . . . to be made available to
investors and at what cost.’’ 9
Further, ‘‘[n]o one disputes that
competition for order flow is ‘fierce.’
. . . As the SEC explained, ‘[i]n the U.S.
national market system, buyers and
sellers of securities, and the brokerdealers that act as their order-routing
agents, have a wide range of choices of
where to route orders for execution’;
[and] ‘no exchange can afford to take its
market share percentages for granted’
because ‘no exchange possesses a
monopoly, regulatory or otherwise, in
the execution of order flow from broker
dealers’. . . .’’ 10
First Change
The Exchange believes that the
$0.0017 per share executed credit is
reasonable because it remains
unchanged. Consequently, the rationale
supporting the credit’s reasonableness
when it was adopted remains valid. The
Exchange believes that it is reasonable
to increase the total Consolidated
Volume requirement because it is a
modest increase in the standard, which
will ensure members are providing
adequate market participation in return
for the credit.
The Exchange believes that increase
to the total Consolidated Volume
requirement is an equitable allocation
and is not unfairly discriminatory
because the Exchange will apply the
same credit to all similarly situated
members. The proposed change is a
moderate increase to the Consolidated
Volume requirement that any member
may choose to achieve if it wishes to
receive the credit. Moreover, the
6 Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
7 NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir.
2010).
8 See NetCoalition, at 534–535.
9 Id. at 537.
10 Id. at 539 (quoting Securities Exchange Act
Release No. 59039 (December 2, 2008), 73 FR
74770, 74782–83 (December 9, 2008) (SR–
NYSEArca–2006–21)).
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Exchange has similar credits with lower
Consolidated Volume requirements that
a member may receive. For example, the
Exchange provides a credit of $0.0015
per share executed for an Order that
accesses liquidity (excluding orders
with Midpoint pegging and excluding
orders that receive price improvement
and execute against an order with a
Non-displayed price) entered by a
member that accesses liquidity equal to
or exceeding 0.065% of total
Consolidated Volume during month. In
sum, members have other opportunities
to receive credits under Rule 7018(a)
should a member be unable to satisfy
the amended qualification criteria
required to receive the credit.
Consequently, the Exchange believes
that the proposed change is an equitable
allocation and is not unfairly
discriminatory.
Second Change
The Exchange believes that the
$0.0016 per share executed credit is
reasonable because it is similar to other
credits available under Rule 7018(a). For
example, the Exchange offers the
$0.0017 per share executed credit,
which is the subject of the first
proposed change. As noted above, the
$0.0017 per share executed credit, like
the proposed new credit, is provided for
an Order that accesses liquidity
(excluding orders with Midpoint
pegging and excluding orders that
receive price improvement and execute
against an order with a Non-displayed
price). Like the $0.0017 per share
executed credit, the proposed $0.0016
per share executed credit is provided if
a member provides a certain levels of
market-improving behavior. As a
consequence, the Exchange believes that
the proposed new credit is reasonable.
The Exchange believes that the
$0.0016 per share executed credit is an
equitable allocation and is not unfairly
discriminatory because the Exchange
will apply the same credit to all
similarly situated members. The
Exchange believes that the proposed
criteria a member is required to satisfy
to receive the credit is an equitable
allocation and is not unfairly
discriminatory because the Exchange
has similar credits with lower
Consolidated Volume requirements that
a member may receive. For example, the
Exchange provides a credit of $0.0015
per share executed for an Order that
accesses liquidity (excluding orders
with Midpoint pegging and excluding
orders that receive price improvement
and execute against an order with a
Non-displayed price) entered by a
member that accesses liquidity equal to
or exceeding 0.065% of total
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Consolidated Volume during month.
The Exchange also provides a credit of
$0.0017 per share executed for an Order
that accesses liquidity (excluding orders
with Midpoint pegging and excluding
orders that receive price improvement
and execute against an order with a
Non-displayed price) entered by a
member that accesses liquidity equal to
or exceeding 0.10% 11 of total
Consolidated Volume during a month.
The new credit will require a liquidity
provided threshold that ensures
members achieving this credit will
meaningfully support trading on the
exchange by providing liquidity that
supports the displayed market and,
therefore, market quality. The Exchange
believes the proposed credit together
with the other existing credits under
Rule 7018(a) provide members with
choice and flexibility. In sum, members
have other opportunities to receive
credits under Rule 7018(a) should a
member be unable to satisfy the
qualification criteria required to receive
the proposed credit. Consequently, the
Exchange believes that the proposed
change is an equitable allocation and is
not unfairly discriminatory.
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 this instance, the proposed changes
to the credits available to member firms
for execution of securities in securities
of all three Tapes do not impose a
11 The Exchange is proposing herein to increase
this percentage of total Consolidated Volume to
.12%.
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47383
burden on competition because the
Exchange’s execution services are
completely voluntary and subject to
extensive competition both from other
exchanges and from off-exchange
venues. The proposed credit represents
a modest increase in the criteria
required to qualify for the credit.
Members may choose to increase their
level of Consolidated Volume to qualify
for the credit or alternatively provide
less Consolidated Volume and receive a
lower credit. The Exchange is also
proposing to provide a new opportunity
for members to receive a credit. Such a
change is procompetitive and reflective
of the Exchange’s efforts to make it an
attractive venue to market participants.
In sum, 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
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.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: (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:
12 15
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U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 83, No. 182 / Wednesday, September 19, 2018 / 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–
BX–2018–043 on the subject line.
Paper Comments
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• 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–2018–043. 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 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–BX–2018–043 and should
be submitted on or before October 10,
2018.
For the Commission, by the Division
of Trading and Markets, pursuant to
delegated authority.13
Eduardo A. Aleman,
Assistant Secretary.
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BILLING CODE 8011–01–P
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17:09 Sep 18, 2018
[Release No. 34–84117; File No. SR–C2–
2018–019]
Self-Regulatory Organizations; Cboe
C2 Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Expand the
Types of Messages That Users May
Submit Into Bulk Order Ports
September 13, 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
September 5, 2018, Cboe C2 Exchange,
Inc. (‘‘Exchange’’ or ‘‘C2’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal as a ‘‘non-controversial’’
proposed rule change pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(6) thereunder.4 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
Cboe C2 Exchange, Inc. (the
‘‘Exchange’’ or ‘‘C2’’) proposes to
expand the types of messages that Users
may submit into bulk order ports. The
text of the proposed rule change is
provided below.
(additions are italicized; deletions are
[bracketed])
*
*
*
*
*
Cboe C2 Exchange, Inc.
Rules
*
*
*
*
*
Rule 1.1. Definitions
*
*
*
*
*
Port
The term ‘‘port’’ includes the
following types of ports:
(a)–(b) No change.
(c) A ‘‘bulk order port’’ is a dedicated
logical port that provides Users with the
ability to submit single and bulk order
messages to enter, modify, or cancel
auction responses or orders designated
as Post Only Orders with a Time-in1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
CFR 200.30–3(a)(12).
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COMMISSION
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Force of Day or GTD with an expiration
time on that trading day.
*
*
*
*
*
The text of the proposed rule change
is also available on the Exchange’s
website (https://www.cboe.com/
AboutCBOE/CBOELegal
RegulatoryHome.aspx), at the
Exchange’s Office of the Secretary, 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 proposed rule change expands
the types of messages that Users may
submit into bulk order ports. A bulk
order port is a dedicated logical port
that provides Users with the ability to
submit single and bulk order messages
to enter, modify, or cancel orders
designated as Post Only Orders 5 with a
Time-in-Force of DAY 6 or GTD 7 with
an expiration time on that trading day.
Post Only Orders with a Time-in-Force
of Day or GTD are orders that will be
posted to and displayed by the
Exchange, rather than removing
liquidity or routing to another options
exchange. The Exchange currently
limits the use of bulk order ports to
5 A ‘‘Post Only’’ order is an order the System
ranks and executes pursuant to Rule 6.12, subjects
to the Price Adjust process pursuant to Rule 6.12,
or cancels or rejects (including if it is not subject
to the Price Adjust process and locks or cross a
Protected Quotation of another exchange), as
applicable (in accordance with User instructions),
except the order may not remove liquidity from the
Book or route away to another exchange. See Rule
1.1 (paragraph (h) of definition of Order
Instruction).
6 An order designated as ‘‘Day’’ means an order
that, if not executed, expires at market close. See
Rule 1.1 (definition of Time-in-Force).
7 An order designated as ‘‘GTD’’ means an order
that, if after entry into the System, is not fully
executed, remains available for potential display or
execution until a date and time specified by the
entering User unless cancelled by the entering User.
See Rule 1.1 (definition of Time-in-Force).
E:\FR\FM\19SEN1.SGM
19SEN1
]]>Agencies
[Federal Register Volume 83, Number 182 (Wednesday, September 19, 2018)]
[Notices]
[Pages 47381-47384]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-20308]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84114; File No. SR-BX-2018-043]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend Fees at
Rule 7018(a)
September 13, 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 September 4, 2018, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed
with the Securities and Exchange Commission
[[Page 47382]]
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to 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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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its transaction fees at Rule 7018(a)
to: (i) Increase the level of total Consolidated Volume require to
qualify for a $0.0017 per share executed credit; and (ii) adopt a new
$0.0016 per share executed credit.
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 the proposed rule change is to: (i) Increase the
level of total Consolidated Volume require to qualify for a $0.0017 per
share executed credit; and (ii) adopt a new $0.0016 per share executed
credit.
First Change
Under Rule 7018, the Exchange assesses charges and credits for the
use of the order execution and routing services of the Nasdaq BX
Equities System by members for all securities priced at $1 or more per
share that it trades. The Exchange operates on the ``taker-maker''
model, whereby it pays credits to members that take liquidity and
charges fees to members that provide liquidity. Currently, the Exchange
offers several different credits for orders that access liquidity on
the Exchange. Among these credits, the Exchange pays a credit of
$0.0017 per share executed for an Order that accesses liquidity
(excluding orders with Midpoint pegging and excluding orders that
receive price improvement and execute against an order with a Non-
displayed price) entered by a member that accesses liquidity equal to
or exceeding 0.10% of total Consolidated Volume \3\ during a month. The
Exchange is proposing to increase the level of total Consolidated
Volume required to qualify for the credit from 0.10% to 0.12%.
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\3\ Rule 7018(a) defines Consolidated Volume as the total
consolidated volume reported to all consolidated transaction
reporting plans by all exchanges and trade reporting facilities
during a month in equity securities, excluding executed orders with
a size of less than one round lot. For purposes of calculating
Consolidated Volume and the extent of a member's trading activity
the date of the annual reconstitution of the Russell Investments
Indexes shall be excluded from both total Consolidated Volume and
the member's trading activity.
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Second Change
The Exchange is proposing to adopt a new $0.0016 per share executed
credit available for an Order that accesses liquidity (excluding orders
with Midpoint pegging and excluding orders that receive price
improvement and execute against an order with a Non-displayed price).
To receive the credit a member must (i) add liquidity equal to or
exceeding 0.60% of total Consolidated Volume during a month; and (ii)
access liquidity equal to or exceeding 0.10% of total Consolidated
Volume during a month.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\4\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\5\ 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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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4) and (5).
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The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \6\
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\6\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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Likewise, in NetCoalition v. Securities and Exchange Commission\7\
(``NetCoalition'') the D.C. Circuit upheld the Commission's use of a
market-based approach in evaluating the fairness of market data fees
against a challenge claiming that Congress mandated a cost-based
approach.\8\ As the court emphasized, the Commission ``intended in
Regulation NMS that `market forces, rather than regulatory
requirements' play a role in determining the market data . . . to be
made available to investors and at what cost.'' \9\
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\7\ NetCoalition v. SEC, 615 F.3d 525 (D.C. Cir. 2010).
\8\ See NetCoalition, at 534-535.
\9\ Id. at 537.
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Further, ``[n]o one disputes that competition for order flow is
`fierce.' . . . As the SEC explained, `[i]n the U.S. national market
system, buyers and sellers of securities, and the broker-dealers that
act as their order-routing agents, have a wide range of choices of
where to route orders for execution'; [and] `no exchange can afford to
take its market share percentages for granted' because `no exchange
possesses a monopoly, regulatory or otherwise, in the execution of
order flow from broker dealers'. . . .'' \10\
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\10\ Id. at 539 (quoting Securities Exchange Act Release No.
59039 (December 2, 2008), 73 FR 74770, 74782-83 (December 9, 2008)
(SR-NYSEArca-2006-21)).
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First Change
The Exchange believes that the $0.0017 per share executed credit is
reasonable because it remains unchanged. Consequently, the rationale
supporting the credit's reasonableness when it was adopted remains
valid. The Exchange believes that it is reasonable to increase the
total Consolidated Volume requirement because it is a modest increase
in the standard, which will ensure members are providing adequate
market participation in return for the credit.
The Exchange believes that increase to the total Consolidated
Volume requirement is an equitable allocation and is not unfairly
discriminatory because the Exchange will apply the same credit to all
similarly situated members. The proposed change is a moderate increase
to the Consolidated Volume requirement that any member may choose to
achieve if it wishes to receive the credit. Moreover, the
[[Page 47383]]
Exchange has similar credits with lower Consolidated Volume
requirements that a member may receive. For example, the Exchange
provides a credit of $0.0015 per share executed for an Order that
accesses liquidity (excluding orders with Midpoint pegging and
excluding orders that receive price improvement and execute against an
order with a Non-displayed price) entered by a member that accesses
liquidity equal to or exceeding 0.065% of total Consolidated Volume
during month. In sum, members have other opportunities to receive
credits under Rule 7018(a) should a member be unable to satisfy the
amended qualification criteria required to receive the credit.
Consequently, the Exchange believes that the proposed change is an
equitable allocation and is not unfairly discriminatory.
Second Change
The Exchange believes that the $0.0016 per share executed credit is
reasonable because it is similar to other credits available under Rule
7018(a). For example, the Exchange offers the $0.0017 per share
executed credit, which is the subject of the first proposed change. As
noted above, the $0.0017 per share executed credit, like the proposed
new credit, is provided for an Order that accesses liquidity (excluding
orders with Midpoint pegging and excluding orders that receive price
improvement and execute against an order with a Non-displayed price).
Like the $0.0017 per share executed credit, the proposed $0.0016 per
share executed credit is provided if a member provides a certain levels
of market-improving behavior. As a consequence, the Exchange believes
that the proposed new credit is reasonable.
The Exchange believes that the $0.0016 per share executed credit is
an equitable allocation and is not unfairly discriminatory because the
Exchange will apply the same credit to all similarly situated members.
The Exchange believes that the proposed criteria a member is required
to satisfy to receive the credit is an equitable allocation and is not
unfairly discriminatory because the Exchange has similar credits with
lower Consolidated Volume requirements that a member may receive. For
example, the Exchange provides a credit of $0.0015 per share executed
for an Order that accesses liquidity (excluding orders with Midpoint
pegging and excluding orders that receive price improvement and execute
against an order with a Non-displayed price) entered by a member that
accesses liquidity equal to or exceeding 0.065% of total Consolidated
Volume during month. The Exchange also provides a credit of $0.0017 per
share executed for an Order that accesses liquidity (excluding orders
with Midpoint pegging and excluding orders that receive price
improvement and execute against an order with a Non-displayed price)
entered by a member that accesses liquidity equal to or exceeding 0.10%
\11\ of total Consolidated Volume during a month. The new credit will
require a liquidity provided threshold that ensures members achieving
this credit will meaningfully support trading on the exchange by
providing liquidity that supports the displayed market and, therefore,
market quality. The Exchange believes the proposed credit together with
the other existing credits under Rule 7018(a) provide members with
choice and flexibility. In sum, members have other opportunities to
receive credits under Rule 7018(a) should a member be unable to satisfy
the qualification criteria required to receive the proposed credit.
Consequently, the Exchange believes that the proposed change is an
equitable allocation and is not unfairly discriminatory.
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\11\ The Exchange is proposing herein to increase this
percentage of total Consolidated Volume to .12%.
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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 this instance, the proposed changes to the credits available to
member firms for execution of securities in securities of all three
Tapes do not impose a burden on competition because the Exchange's
execution services are completely voluntary and subject to extensive
competition both from other exchanges and from off-exchange venues. The
proposed credit represents a modest increase in the criteria required
to qualify for the credit. Members may choose to increase their level
of Consolidated Volume to qualify for the credit or alternatively
provide less Consolidated Volume and receive a lower credit. The
Exchange is also proposing to provide a new opportunity for members to
receive a credit. Such a change is procompetitive and reflective of the
Exchange's efforts to make it an attractive venue to market
participants. In sum, 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
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.\12\
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\12\ 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:
[[Page 47384]]
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-2018-043 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-BX-2018-043. 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 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-BX-2018-043 and should be submitted on
or before October 10, 2018.
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).
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-20308 Filed 9-18-18; 8:45 am]
BILLING CODE 8011-01-P
