Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New SCAR Routing Option Under Rule 4758, 11362-11364 [2019-05699]

Download as PDF 11362 Federal Register / Vol. 84, No. 58 / Tuesday, March 26, 2019 / Notices table and to update to the title of Section 1(b) of the Fee Schedule to accurately reflect that this Section only includes fees, which does not have any substantive impact on the Routing Fees. The Exchange believes making these technical formatting corrections promotes just and equitable principles of trade, fosters cooperation and coordination with persons engaged in facilitating transactions in securities, and protects investors and the public interest, because it would eliminate any potential confusion as a result of incorrect formatting and wording. It is in the public interest for rules to be accurate and concise so as to eliminate the potential for confusion. jbell on DSK30RV082PROD with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition MIAX PEARL does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed changes to update its routing fee table set forth in Section 1(b) of the Fee Schedule to reflect the addition of MIAX Emerald as a new national securities exchange will have no impact on competition as they are not designed to address any competitive issues but rather are designed to make nonsubstantive technical corrections and update the Exchange’s Fee Schedule by adding MIAX Emerald to the appropriate exchange groupings in the routing fee table to reflect that MIAX Emerald has been added as a national securities exchange. The Exchange’s proposed re-categorization of certain exchange groupings and adjustment of fees is intended to enable the Exchange to recover the costs it incurs to route orders to away markets. The Exchange does not believe that this proposal imposes any unnecessary burden on competition because it seeks to recoup costs incurred by the Exchange when routing orders to away markets on behalf of Members and other Exchange have similar Routing Fee structures.13 Further, the Exchange does not believe that the technical formatting corrections to the routing fee table will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act because the proposal is intended to eliminate any potential confusion as a result of incorrect formatting and wording. In doing so, the proposed rule change will also serve to promote clarity and consistency in the Exchange’s Fee Schedule. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. 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 and Rule 19b–4(f)(2) 15 thereunder. 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 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– PEARL–2019–09 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–PEARL–2019–09. 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 U.S.C. 78s(b)(3)(A)(ii). 15 17 CFR 240.19b–4(f)(2). supra note 5. VerDate Sep<11>2014 17:54 Mar 25, 2019 Jkt 247001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Eduardo A. Aleman, Deputy Secretary. [FR Doc. 2019–05705 Filed 3–25–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–85368; File No. SR–BX– 2019–004] Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a New SCAR Routing Option Under Rule 4758 March 20, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 6, 2019, Nasdaq BX, Inc. (‘‘BX’’ or ‘‘Exchange’’) 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 16 17 14 15 13 See 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–PEARL–2019–09 and should be submitted on or before April 16, 2019. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\26MRN1.SGM 26MRN1 Federal Register / Vol. 84, No. 58 / Tuesday, March 26, 2019 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to a proposal to [sic] adopt a new SCAR routing option under Rule 4758. 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 jbell on DSK30RV082PROD with NOTICES 1. Purpose The Exchange is proposing to adopt SCAR, a new order routing 3 option under Rule 4758(a)(1)(A). The Exchange currently provides a variety of routing options under Rule 4758(a)(1)(A). Routing options may be combined with all available Order Types and Times-inForce, with the exception of Order Types and Times-in-Force whose terms are inconsistent with the terms of a particular routing option. The SCAR routing option would allow members to seek liquidity on the Exchange and the other equity markets operated by Nasdaq, Inc., The Nasdaq Stock Market 3 Routing is an Order Attribute that allows a Participant to designate an Order to employ one of several Routing Strategies offered by the Exchange, as described in Rule 4758; such an Order may be referred to as a ‘‘Routable Order.’’ Upon receipt of an Order with the Routing Order Attribute, the System will process the Order in accordance with the applicable Routing Strategy. In the case of a limited number of Routing Strategies, the Order will be sent directly to other market centers for potential execution. For most other Routing Strategies, the Order will attempt to access liquidity available on the Exchange in the manner specified for the underlying Order Type and will then be routed in accordance with the applicable Routing Strategy. Shares of the Order that cannot be executed are then returned to the Exchange, where they will (i) again attempt to access liquidity available on the Exchange and (ii) post to the Exchange Book or be cancelled, depending on the Time-in-Force of the Order. See Rule 4703(f). VerDate Sep<11>2014 17:54 Mar 25, 2019 Jkt 247001 (‘‘Nasdaq’’) and Nasdaq PSX (‘‘PSX’’ and together with Nasdaq and the Exchange, the ‘‘Nasdaq Affiliated Exchanges’’). SCAR will operate in the same manner as the current BCRT strategy, but will differ in the initial order routing to the Nasdaq Affiliated Exchanges. Whereas BCRT orders check the Exchange for available shares and then route to PSX and Nasdaq sequentially,4 SCAR orders will route simultaneously to all three Nasdaq Affiliated Exchanges in accordance with the System routing table.5 Specifically as proposed, SCAR would be a routing option under which orders check the System 6 for available shares and simultaneously route 7 to Nasdaq and PSX in accordance with the System routing table.8 Similar to BCRT, if shares remain unexecuted after routing, they are posted on the Exchange’s book or cancelled, depending on the Time-in-Force of the order.9 Once on the book, should the order subsequently be locked or crossed by another market center, the System will not route the order to the locking or crossing market center. This is also similar to how BCRT treats shares that remain unexecuted after completing the initial order route and posting to the Exchange book. Like all of the Exchange’s routing strategies, SCAR is designed to comply with Rule 611 and 4 See Rule 4758(a)(1)(A)(vii). term ‘‘System routing table’’ refers to the proprietary process for determining the specific trading venues to which the System routes orders and the order in which it routes them. The Exchange reserves the right to maintain a different System routing table for different routing options and to modify the System routing table at any time without notice. See Rule 4758(a)(1)(A). 6 The term ‘‘System’’ shall mean the automated system for order execution and trade reporting owned and operated by the Exchange. See Rule 4701(a). 7 As with all routing strategies that provide for simultaneous routing, the incoming SCAR order would be broken up into child orders. For SCAR routing, the orders would be sent to the Exchange, Nasdaq, and PSX at the same time based on the available displayed interest on these exchanges. In particular, the Exchange would allocate the number of shares from the parent order based on the System routing table for SCAR, and route the allocated shares (i.e., the child orders) to the executing venues simultaneously. 8 As is the case today for all market destinations on the System routing table, the placement of the Exchange, Nasdaq and PSX on the applicable System routing table for SCAR will depend on the Exchange’s ongoing assessments of factors such as latency, fill rates, reliability, and cost. 9 Unexecuted shares of a SCAR order will return to the Exchange after routing and check the System for available shares before cancelling if the order has a Time-in-Force of IOC. Otherwise, shares that remain unexecuted after routing will return to the Exchange and check the System for available shares before posting on the Exchange’s book (e.g., the SCAR order has a Time-in-Force of DAY). 5 The PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 11363 the other provisions of Regulation NMS.10 The Exchange will implement the proposal in the second quarter of 2019, subject to approval by the Commission. The Exchange will provide prior notice of the implementation date in an Equity Trader Alert. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,11 in general, and furthers the objectives of Section 6(b)(5) of the Act,12 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 the proposed rule change will accomplish those ends by providing market participants with an additional voluntary routing option that will allow them to easily access liquidity available on all Nasdaq Affiliated Exchanges. The Exchange expects the proposed routing strategy will benefit firms that do not employ routing or trading strategies under which the firm itself would rapidly access liquidity provided on the multiple venues. SCAR would not provide any advantage, including latency and priority, to members when routing to the Nasdaq Affiliated Exchanges as compared to other methods of routing or connectivity available to members by the Exchange. Lastly, the Exchange notes that routing options enabling the routing of orders between affiliated exchanges is not unique, and that the proposed SCAR routing option is similar to those already offered by the Exchange (i.e., BCRT) and by other exchange groups. Specifically, Cboe BZX Exchange (‘‘BZX’’), Cboe BYX Exchange (‘‘BYX’’), Cboe EDGA Exchange (‘‘EDGA’’), and Cboe EDGX Exchange (‘‘EDGX’’) offer a routing option called ALLB that enables an order, whether sent to BZX, BYX, EDGA, or EDGX, to check the BZX, BYX, EDGA, and EDGX books for liquidity before optionally posting on the BZX, BYX, EDGA, or EDGX book.13 For the foregoing reasons, the Exchange believes that the proposed rule change is consistent with the Act. 10 17 CFR 242.611. U.S.C. 78f(b). 12 15 U.S.C. 78f(b)(5). 13 See BZX Rule 11.13(b)(3)(O), BYX Rule 11.13(b)(3)(M), EDGA Rule 11.11(g)(7), and EDGX Rule 11.11(g)(7). ALLB is also substantially similar to the Exchange’s BCRT strategy, as described above. 11 15 E:\FR\FM\26MRN1.SGM 26MRN1 11364 Federal Register / Vol. 84, No. 58 / Tuesday, March 26, 2019 / Notices 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. As discussed above, the proposed functionality is partly based on existing functionality available on competitor exchanges.14 Furthermore, the Exchange provides routing services in a highly competitive market in which participants may avail themselves of a wide variety of routing options offered by other exchanges, alternative trading systems, other broker-dealers, market participants’ own proprietary routing systems, and service bureaus. In such an environment, system enhancements such as the changes proposed in this rule filing do not burden competition, because they can succeed in attracting order flow to the Exchange only if they offer investors higher quality and better value than services offered by others. Encouraging competitors to provide higher quality and better value is the essence of a wellfunctioning competitive marketplace. Lastly, SCAR would not provide any advantage to members when routing to the Nasdaq Affiliated Exchanges as compared to other methods of routing or connectivity available to members by the Exchange. For the foregoing reasons, the Exchange does not believe 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. 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. jbell on DSK30RV082PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 15 and Rule 19b– 4(f)(6) thereunder.16 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 should be approved or disapproved. 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–2019–004 and should be submitted on or before April 16, 2019. 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Eduardo A. Aleman, Deputy Secretary. 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–2019–004 on the subject line. SECURITIES AND EXCHANGE COMMISSION 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–2019–004. 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 14 Id. 15 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief 16 17 VerDate Sep<11>2014 17:54 Mar 25, 2019 Jkt 247001 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 has satisfied this requirement. PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 [FR Doc. 2019–05699 Filed 3–25–19; 8:45 am] BILLING CODE 8011–01–P [Release No. 34–85370; File No. SR– CboeBZX–2019–017] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule To List and Trade Shares of the iShares iBonds Dec 2026 Term Muni Bond ETF, iShares iBonds Dec 2027 Term Muni Bond ETF, and iShares iBonds Dec 2028 Term Muni Bond ETF Under BZX Rule 14.11(c)(4) March 20, 2019. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 19, 2019, Cboe BZX Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) 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 The Exchange proposes to list and trade under BZX Rule 14.11(c)(4) the shares of the iShares iBonds Dec 2026 17 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 1 15 E:\FR\FM\26MRN1.SGM 26MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 84, Number 58 (Tuesday, March 26, 2019)]
[Notices]
[Pages 11362-11364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-05699]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85368; File No. SR-BX-2019-004]


Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Adopt a New SCAR 
Routing Option Under Rule 4758

March 20, 2019.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 6, 2019, Nasdaq BX, Inc. (``BX'' or ``Exchange'') 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 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.

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[[Page 11363]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to a proposal to [sic] adopt a new SCAR 
routing option under Rule 4758.
    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 Exchange is proposing to adopt SCAR, a new order routing \3\ 
option under Rule 4758(a)(1)(A). The Exchange currently provides a 
variety of routing options under Rule 4758(a)(1)(A). Routing options 
may be combined with all available Order Types and Times-in-Force, with 
the exception of Order Types and Times-in-Force whose terms are 
inconsistent with the terms of a particular routing option. The SCAR 
routing option would allow members to seek liquidity on the Exchange 
and the other equity markets operated by Nasdaq, Inc., The Nasdaq Stock 
Market (``Nasdaq'') and Nasdaq PSX (``PSX'' and together with Nasdaq 
and the Exchange, the ``Nasdaq Affiliated Exchanges''). SCAR will 
operate in the same manner as the current BCRT strategy, but will 
differ in the initial order routing to the Nasdaq Affiliated Exchanges. 
Whereas BCRT orders check the Exchange for available shares and then 
route to PSX and Nasdaq sequentially,\4\ SCAR orders will route 
simultaneously to all three Nasdaq Affiliated Exchanges in accordance 
with the System routing table.\5\
---------------------------------------------------------------------------

    \3\ Routing is an Order Attribute that allows a Participant to 
designate an Order to employ one of several Routing Strategies 
offered by the Exchange, as described in Rule 4758; such an Order 
may be referred to as a ``Routable Order.'' Upon receipt of an Order 
with the Routing Order Attribute, the System will process the Order 
in accordance with the applicable Routing Strategy. In the case of a 
limited number of Routing Strategies, the Order will be sent 
directly to other market centers for potential execution. For most 
other Routing Strategies, the Order will attempt to access liquidity 
available on the Exchange in the manner specified for the underlying 
Order Type and will then be routed in accordance with the applicable 
Routing Strategy. Shares of the Order that cannot be executed are 
then returned to the Exchange, where they will (i) again attempt to 
access liquidity available on the Exchange and (ii) post to the 
Exchange Book or be cancelled, depending on the Time-in-Force of the 
Order. See Rule 4703(f).
    \4\ See Rule 4758(a)(1)(A)(vii).
    \5\ The term ``System routing table'' refers to the proprietary 
process for determining the specific trading venues to which the 
System routes orders and the order in which it routes them. The 
Exchange reserves the right to maintain a different System routing 
table for different routing options and to modify the System routing 
table at any time without notice. See Rule 4758(a)(1)(A).
---------------------------------------------------------------------------

    Specifically as proposed, SCAR would be a routing option under 
which orders check the System \6\ for available shares and 
simultaneously route \7\ to Nasdaq and PSX in accordance with the 
System routing table.\8\ Similar to BCRT, if shares remain unexecuted 
after routing, they are posted on the Exchange's book or cancelled, 
depending on the Time-in-Force of the order.\9\ Once on the book, 
should the order subsequently be locked or crossed by another market 
center, the System will not route the order to the locking or crossing 
market center. This is also similar to how BCRT treats shares that 
remain unexecuted after completing the initial order route and posting 
to the Exchange book. Like all of the Exchange's routing strategies, 
SCAR is designed to comply with Rule 611 and the other provisions of 
Regulation NMS.\10\
---------------------------------------------------------------------------

    \6\ The term ``System'' shall mean the automated system for 
order execution and trade reporting owned and operated by the 
Exchange. See Rule 4701(a).
    \7\ As with all routing strategies that provide for simultaneous 
routing, the incoming SCAR order would be broken up into child 
orders. For SCAR routing, the orders would be sent to the Exchange, 
Nasdaq, and PSX at the same time based on the available displayed 
interest on these exchanges. In particular, the Exchange would 
allocate the number of shares from the parent order based on the 
System routing table for SCAR, and route the allocated shares (i.e., 
the child orders) to the executing venues simultaneously.
    \8\ As is the case today for all market destinations on the 
System routing table, the placement of the Exchange, Nasdaq and PSX 
on the applicable System routing table for SCAR will depend on the 
Exchange's ongoing assessments of factors such as latency, fill 
rates, reliability, and cost.
    \9\ Unexecuted shares of a SCAR order will return to the 
Exchange after routing and check the System for available shares 
before cancelling if the order has a Time-in-Force of IOC. 
Otherwise, shares that remain unexecuted after routing will return 
to the Exchange and check the System for available shares before 
posting on the Exchange's book (e.g., the SCAR order has a Time-in-
Force of DAY).
    \10\ 17 CFR 242.611.
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    The Exchange will implement the proposal in the second quarter of 
2019, subject to approval by the Commission. The Exchange will provide 
prior notice of the implementation date in an Equity Trader Alert.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\12\ 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 the proposed rule change will 
accomplish those ends by providing market participants with an 
additional voluntary routing option that will allow them to easily 
access liquidity available on all Nasdaq Affiliated Exchanges. The 
Exchange expects the proposed routing strategy will benefit firms that 
do not employ routing or trading strategies under which the firm itself 
would rapidly access liquidity provided on the multiple venues. SCAR 
would not provide any advantage, including latency and priority, to 
members when routing to the Nasdaq Affiliated Exchanges as compared to 
other methods of routing or connectivity available to members by the 
Exchange.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Lastly, the Exchange notes that routing options enabling the 
routing of orders between affiliated exchanges is not unique, and that 
the proposed SCAR routing option is similar to those already offered by 
the Exchange (i.e., BCRT) and by other exchange groups. Specifically, 
Cboe BZX Exchange (``BZX''), Cboe BYX Exchange (``BYX''), Cboe EDGA 
Exchange (``EDGA''), and Cboe EDGX Exchange (``EDGX'') offer a routing 
option called ALLB that enables an order, whether sent to BZX, BYX, 
EDGA, or EDGX, to check the BZX, BYX, EDGA, and EDGX books for 
liquidity before optionally posting on the BZX, BYX, EDGA, or EDGX 
book.\13\ For the foregoing reasons, the Exchange believes that the 
proposed rule change is consistent with the Act.
---------------------------------------------------------------------------

    \13\ See BZX Rule 11.13(b)(3)(O), BYX Rule 11.13(b)(3)(M), EDGA 
Rule 11.11(g)(7), and EDGX Rule 11.11(g)(7). ALLB is also 
substantially similar to the Exchange's BCRT strategy, as described 
above.

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[[Page 11364]]

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. As discussed above, the 
proposed functionality is partly based on existing functionality 
available on competitor exchanges.\14\ Furthermore, the Exchange 
provides routing services in a highly competitive market in which 
participants may avail themselves of a wide variety of routing options 
offered by other exchanges, alternative trading systems, other broker-
dealers, market participants' own proprietary routing systems, and 
service bureaus. In such an environment, system enhancements such as 
the changes proposed in this rule filing do not burden competition, 
because they can succeed in attracting order flow to the Exchange only 
if they offer investors higher quality and better value than services 
offered by others. Encouraging competitors to provide higher quality 
and better value is the essence of a well-functioning competitive 
marketplace. Lastly, SCAR would not provide any advantage to members 
when routing to the Nasdaq Affiliated Exchanges as compared to other 
methods of routing or connectivity available to members by the 
Exchange. For the foregoing reasons, the Exchange does not believe 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.
---------------------------------------------------------------------------

    \14\ Id.
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its 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 has satisfied this requirement.
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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 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-2019-004 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-2019-004. 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-2019-004 and should be submitted on 
or before April 16, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-05699 Filed 3-25-19; 8:45 am]
BILLING CODE 8011-01-P

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