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]

Download as PDF 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 VerDate Sep<11>2014 18:56 Aug 13, 2019 Jkt 247001 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. PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 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 E:\FR\FM\14AUN1.SGM 14AUN1 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. VerDate Sep<11>2014 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 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 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). E:\FR\FM\14AUN1.SGM 14AUN1 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 Jkt 247001 PO 00000 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 14AUN1

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.
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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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-17389 Filed 8-13-19; 8:45 am]
BILLING CODE 8011-01-P


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