Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend SCAR Credits at Equity 7, Section 118(a), 40464-40466 [2019-17389]
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40464
Federal Register / Vol. 84, No. 157 / Wednesday, August 14, 2019 / Notices
participants, as all Trading Permit
Holders and non-Trading Permit
Holders with open positions in options
listed on the Exchange may use the
proposed off-floor transfer process to
reduce the RWA capital requirements of
CTPHs.
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 that is not
necessary or appropriate in furtherance
of the purposes of the Act. The purpose
of the proposed rule change to permit
RWA Transfers is to alleviate the
negative impact of bank capital
requirements on options market
liquidity providers. This process is not
intended to be a competitive trading
tool. The Exchange does not believe that
the proposed rule change will impose
any burden on intramarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act,
as use of the proposed process is
voluntary. All Trading Permit Holders
and non-Trading Permit Holders with
open positions in options listed on the
Exchange may use the proposed offfloor transfer process to reduce the RWA
capital requirements attributable to
those positions. The Exchange does not
believe that the proposed rule change
will impose any burden on intermarket
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act. RWA Transfers
have a limited purpose, which is to
reduce RWA attributable to open
positions in listed options in order to
free up capital. Cboe Options believes
the proposed rule change may relieve
the burden on liquidity providers in the
options market by reducing the RWA
attributable to their open positions. As
a result, market participants may be able
to increase liquidity they provide to the
market, which liquidity benefits all
market participants.
jspears on DSK3GMQ082PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
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reasons for so finding or (ii) as to which
the Exchange consents, the Commission
will:
A. By order approve or disapprove
such proposed rule change, or
B. institute proceedings to determine
whether the proposed rule change
should be disapproved.
Number SR–CBOE–2019–044 and
should be submitted on or before
September 4, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Jill M. Peterson,
Assistant Secretary.
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:
[FR Doc. 2019–17383 Filed 8–13–19; 8:45 am]
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–
CBOE–2019–044 on the subject line.
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend
SCAR Credits at Equity 7, Section
118(a)
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–CBOE–2019–044. 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
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 July 25,
2019, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
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BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86609; File No. SR–
NASDAQ–2019–062]
August 8, 2019.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
SCAR credits at Equity 7, Section
118(a).
While these amendments are effective
upon filing, the Exchange has
designated the proposed amendments to
be operative on August 1, 2019. The text
of the proposed rule change is available
on the Exchange’s website at https://
nasdaq.cchwallstreet.com/, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
28 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Federal Register / Vol. 84, No. 157 / Wednesday, August 14, 2019 / Notices
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
jspears on DSK3GMQ082PROD with NOTICES
1. Purpose
The purpose of the proposed rule
change is to adopt revised pricing for
the recently adopted SCAR routing
strategy.3 In sum, SCAR is a routing
option under which orders check the
System 4 for available shares and
simultaneously route to the other equity
markets operated by Nasdaq, Inc.,
Nasdaq BX, Inc. (‘‘BX’’) and Nasdaq PSX
(‘‘PSX’’).5
The Exchange proposes to adopt
revised credits for SCAR orders in
securities listed on Nasdaq (‘‘Tape C’’),
NYSE (‘‘Tape A’’), and on exchanges
other than Nasdaq and NYSE (‘‘Tape B’’)
(collectively, ‘‘Tapes’’), which execute
on BX.6 BX recently updated its fee
schedule whereby it generally increased
the credits provided for orders that
access liquidity,7 and the Exchange is
proposing to adjust its fee schedule
relating to SCAR to increase credits
provided for SCAR executions occurring
on BX Tapes A and C securities and to
decrease the credit provided for SCAR
executions occurring on BX Tape B
3 See Nasdaq Rule 4758(a)(1)(A)(xv). See also
Securities Exchange Act Release No. 85372 (March
20, 2019), 84 FR 11357 (March 26, 2019) (SR–
NASDAQ–2019–013).
4 The term ‘‘System’’ shall mean the automated
system for order execution and trade reporting
owned and operated by The Nasdaq Stock Market
LLC. See Rule 4701(a).
5 If shares remain unexecuted after routing, they
are posted on the Exchange’s book or cancelled.
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. See Rule 4758(a)(1)(A)(xv).
6 The Exchange currently provides pricing for
execution on BX using SCAR that is better that a
market participant would otherwise receive for
removing liquidity from BX if it did not meet
certain volume thresholds that would qualify them
for a better rate (such as a liquidity removal credit),
which is $0.0003 per share executed for orders in
any Tape securities priced at $1 or more per share
that access liquidity on the Exchange. See BX
Equity 7, Section 118(a). Thus, the Exchange’s
current fees are more reflective of the pricing a
market participant would receive if it provided
certain levels of volume. The Exchange is proposing
to adjust the credit provided for BX executions to
reflect recent changes to the credits provided to BX
members for removing liquidity. See Securities
Exchange Act Release No. 34–86447 (July 24, 2019)
(SR–BX–2019–026) (awaiting publication in the
Federal Register).
7 Id.
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18:56 Aug 13, 2019
Jkt 247001
securities. Currently in securities priced
at $1 or more per share, the Exchange
provides a credit of $0.0015 per share
for SCAR orders in Tapes A and C
securities executed at BX, and a credit
of $0.0026 per share for SCAR orders in
Tape B securities executed at Nasdaq
BX.8 The Exchange is proposing to
provide a credit of $0.0025 per share
executed for SCAR orders executed on
BX in the securities of any of the Tapes
priced at $1 or more per share, which
will align the credits with recent
changes to the BX fee schedule.9
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,11 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange believes that the
pricing structure proposed above for
SCAR is reasonable, equitable, and not
unfairly discriminatory because the new
credits are generally set at a level
intended to incentivize members to use
this new routing strategy. The proposed
$0.0025 per share executed credit for
orders in any Tape securities priced at
$1 or more per share that route to, and
execute on, BX using the SCAR routing
strategy is significantly higher than the
current credit provided in such
transactions in securities of Tapes A and
C, and is a modest decrease to the credit
provided for executions in such
transactions in securities of Tape B.
This is reflective of the Exchange’s
desire to increase incentives to members
to use the routing strategy and its
assessment of the costs incurred in
providing the routing strategy.
Alignment of the incentive for
executions on BX will strike a balance
between these factors. In this regard, the
Exchange notes that if the order
executed directly on BX as the home
exchange, (i.e., without using SCAR) the
member would be charged the standard
transaction fee of $0.0003 per share
executed.12 As such, the proposed
8 BX
operates on the ‘‘taker-maker’’ model,
whereby it generally pays credits to members that
take liquidity and charges fees to members that
provide liquidity.
9 See supra note 6.
10 15 U.S.C. 78f(b).
11 15 U.S.C. 78f(b)(4) and (5).
12 This fee would apply unless the member
qualifies for a better rate (such as a discounted fee
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40465
SCAR credit is set at a rate that makes
it more economical for members to use
this routing strategy, especially for those
members that do not already add and/
or remove volume on BX directly. Last,
the Exchange believes that the proposed
pricing changes are equitable and not
unfairly discriminatory because they
will apply uniformly to all members.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange 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. 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 pricing
for SCAR orders is intended to provide
incentive to members to use the
Exchange’s SCAR routing strategy,
balanced against the need to recoup the
Exchange’s costs associated with
providing its completely optional
routing services. Because the Exchange’s
routing services are the subject of
competition, including price
competition, from other exchanges and
broker-dealers that offer routing
services, as well as the ability of
members to use their own routing
capabilities, it is likely that the
Exchange will lose market share as a
result of the changes if they are
unattractive to market participants.
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.
or credit) by meeting certain volume thresholds. See
BX Equity 7, Section 118(a).
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40466
Federal Register / Vol. 84, No. 157 / Wednesday, August 14, 2019 / Notices
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.13
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:
jspears on DSK3GMQ082PROD with NOTICES
Electronic Comments
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–NASDAQ–2019–062 and
should be submitted on or before
September 4, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–17389 Filed 8–13–19; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Docket No.: SBA–2018–0007]
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2019–062 on the subject line.
Surety Bond Guarantee Program Fees
Paper Comments
SUMMARY:
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2019–062. 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,
13 15
U.S.C. 78s(b)(3)(A)(ii).
VerDate Sep<11>2014
18:56 Aug 13, 2019
U.S. Small Business
Administration.
ACTION: Notification of extension of
temporary initiative to test lower fees
for an additional year.
AGENCY:
This document announces a
one-year extension of the temporary
decrease in the guarantee fees that the
U.S. Small Business Administration
(SBA) charges all Surety companies and
Principals on each guaranteed bond
(other than a bid bond) issued in SBA’s
Surety Bond Guarantee (SBG) Program.
DATES: The temporary initiative to test
lower fees in the SBG Program, which
is currently in effect through September
30, 2019, will be extended for an
additional year to apply to all SBA
surety bond guarantees approved
through September 30, 2020.
FOR FURTHER INFORMATION CONTACT:
Jermanne Perry, Management Analyst,
Office of Surety Guarantees; (202) 401–
8275 or jermanne.perry@sba.gov.
SUPPLEMENTARY INFORMATION: Under its
SBG Program, the SBA guarantees a
certain percentage of bid, payment, and
performance bonds for small and
emerging contractors who cannot obtain
surety bonds through regular
commercial channels. The SBA
guarantee incentivizes Sureties to
provide bonding for small businesses
and thereby assists small businesses in
14 17
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CFR 200.30–3(a)(12).
Frm 00085
Fmt 4703
Sfmt 4703
obtaining greater access to contracting
opportunities. Pursuant to its statutory
authority to ‘‘establish such fee or fees
for small business concerns and
premium or premiums for sureties as it
deems reasonable and necessary,’’ and
to administer the SBG Program ‘‘on a
prudent and economically justifiable
basis,’’ 15 U.S.C. 694b(h), SBA assesses
a guarantee fee against both the small
business concern (the Principal) and the
Surety and deposits these fees into a
revolving fund to cover the program’s
liabilities and certain program expenses.
SBA’s rules provide that the amount
of the fees to be paid by the Surety and
the Principal will be determined by SBA
and published in Notices in the Federal
Register from time to time. See 13 CFR
115.32(b) and (c) and 115.66. On July
30, 2018, SBA published a notification
in the Federal Register (83 FR 36658)
that announced that, for all guaranteed
bonds approved during the one year
period beginning October 1, 2018
through September 30, 2019, the Surety
fee would decrease from 26% of the
bond premium to 20% of the bond
premium, and the Principal fee would
decrease from $7.29 per thousand
dollars of the contract amount to $6 per
thousand dollars of the contract amount
(the decrease in the Surety and
Principal fees referred to, collectively,
as ‘‘lower fees’’). SBA invited comments
on this temporary initiative and
received a total of eight comments, with
six comments from surety companies
and agents and two comments from
trade associations, all of which
expressed support for the lower fees.
SBA has determined that it requires
more data to fully evaluate the effect of
the lower fees on the SBG Program.
Accordingly, to provide more time to
gather and evaluate the requisite data,
SBA is announcing a one-year extension
of the temporary initiative to test the
lower fees. The lower fees will now
apply to all bond guarantees (other than
bid bonds) approved through September
30, 2020. During the additional year that
the lower fees are in effect, SBA will
evaluate how the lower fees affect the
SBG Program, including program
utilization by surety companies, surety
agents and small businesses; the size
and characteristics of the portfolio; and
the risk level of the program, including
cash flow and defaults. After carefully
reviewing program performance with
the additional data, SBA will determine
whether the guarantee fees should
remain at these reduced amounts, if
they should revert to the higher
amounts, or if they should otherwise be
changed.
E:\FR\FM\14AUN1.SGM
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Agencies
[Federal Register Volume 84, Number 157 (Wednesday, August 14, 2019)]
[Notices]
[Pages 40464-40466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17389]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86609; File No. SR-NASDAQ-2019-062]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend SCAR Credits at Equity 7, Section 118(a)
August 8, 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 July 25, 2019, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend SCAR credits at Equity 7, Section
118(a).
While these amendments are effective upon filing, the Exchange has
designated the proposed amendments to be operative on August 1, 2019.
The text of the proposed rule change is available on the Exchange's
website at https://nasdaq.cchwallstreet.com/, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed
[[Page 40465]]
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 adopt revised pricing
for the recently adopted SCAR routing strategy.\3\ In sum, SCAR is a
routing option under which orders check the System \4\ for available
shares and simultaneously route to the other equity markets operated by
Nasdaq, Inc., Nasdaq BX, Inc. (``BX'') and Nasdaq PSX (``PSX'').\5\
---------------------------------------------------------------------------
\3\ See Nasdaq Rule 4758(a)(1)(A)(xv). See also Securities
Exchange Act Release No. 85372 (March 20, 2019), 84 FR 11357 (March
26, 2019) (SR-NASDAQ-2019-013).
\4\ The term ``System'' shall mean the automated system for
order execution and trade reporting owned and operated by The Nasdaq
Stock Market LLC. See Rule 4701(a).
\5\ If shares remain unexecuted after routing, they are posted
on the Exchange's book or cancelled. 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. See Rule 4758(a)(1)(A)(xv).
---------------------------------------------------------------------------
The Exchange proposes to adopt revised credits for SCAR orders in
securities listed on Nasdaq (``Tape C''), NYSE (``Tape A''), and on
exchanges other than Nasdaq and NYSE (``Tape B'') (collectively,
``Tapes''), which execute on BX.\6\ BX recently updated its fee
schedule whereby it generally increased the credits provided for orders
that access liquidity,\7\ and the Exchange is proposing to adjust its
fee schedule relating to SCAR to increase credits provided for SCAR
executions occurring on BX Tapes A and C securities and to decrease the
credit provided for SCAR executions occurring on BX Tape B securities.
Currently in securities priced at $1 or more per share, the Exchange
provides a credit of $0.0015 per share for SCAR orders in Tapes A and C
securities executed at BX, and a credit of $0.0026 per share for SCAR
orders in Tape B securities executed at Nasdaq BX.\8\ The Exchange is
proposing to provide a credit of $0.0025 per share executed for SCAR
orders executed on BX in the securities of any of the Tapes priced at
$1 or more per share, which will align the credits with recent changes
to the BX fee schedule.\9\
---------------------------------------------------------------------------
\6\ The Exchange currently provides pricing for execution on BX
using SCAR that is better that a market participant would otherwise
receive for removing liquidity from BX if it did not meet certain
volume thresholds that would qualify them for a better rate (such as
a liquidity removal credit), which is $0.0003 per share executed for
orders in any Tape securities priced at $1 or more per share that
access liquidity on the Exchange. See BX Equity 7, Section 118(a).
Thus, the Exchange's current fees are more reflective of the pricing
a market participant would receive if it provided certain levels of
volume. The Exchange is proposing to adjust the credit provided for
BX executions to reflect recent changes to the credits provided to
BX members for removing liquidity. See Securities Exchange Act
Release No. 34-86447 (July 24, 2019) (SR-BX-2019-026) (awaiting
publication in the Federal Register).
\7\ Id.
\8\ BX operates on the ``taker-maker'' model, whereby it
generally pays credits to members that take liquidity and charges
fees to members that provide liquidity.
\9\ See supra note 6.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ 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.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange believes that the pricing structure proposed above for
SCAR is reasonable, equitable, and not unfairly discriminatory because
the new credits are generally set at a level intended to incentivize
members to use this new routing strategy. The proposed $0.0025 per
share executed credit for orders in any Tape securities priced at $1 or
more per share that route to, and execute on, BX using the SCAR routing
strategy is significantly higher than the current credit provided in
such transactions in securities of Tapes A and C, and is a modest
decrease to the credit provided for executions in such transactions in
securities of Tape B. This is reflective of the Exchange's desire to
increase incentives to members to use the routing strategy and its
assessment of the costs incurred in providing the routing strategy.
Alignment of the incentive for executions on BX will strike a balance
between these factors. In this regard, the Exchange notes that if the
order executed directly on BX as the home exchange, (i.e., without
using SCAR) the member would be charged the standard transaction fee of
$0.0003 per share executed.\12\ As such, the proposed SCAR credit is
set at a rate that makes it more economical for members to use this
routing strategy, especially for those members that do not already add
and/or remove volume on BX directly. Last, the Exchange believes that
the proposed pricing changes are equitable and not unfairly
discriminatory because they will apply uniformly to all members.
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\12\ This fee would apply unless the member qualifies for a
better rate (such as a discounted fee or credit) by meeting certain
volume thresholds. See BX Equity 7, Section 118(a).
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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. The Exchange 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. 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 pricing for SCAR orders is intended
to provide incentive to members to use the Exchange's SCAR routing
strategy, balanced against the need to recoup the Exchange's costs
associated with providing its completely optional routing services.
Because the Exchange's routing services are the subject of competition,
including price competition, from other exchanges and broker-dealers
that offer routing services, as well as the ability of members to use
their own routing capabilities, it is likely that the Exchange will
lose market share as a result of the changes if they are unattractive
to market participants. 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.
[[Page 40466]]
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.\13\
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\13\ 15 U.S.C. 78s(b)(3)(A)(ii).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NASDAQ-2019-062 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2019-062. 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-NASDAQ-2019-062 and should be submitted
on or before September 4, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17389 Filed 8-13-19; 8:45 am]
BILLING CODE 8011-01-P