Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend The Nasdaq Options Market LLC (“NOM”) Pricing at Options 7, 46570-46573 [2019-19005]
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Federal Register / Vol. 84, No. 171 / Wednesday, September 4, 2019 / Notices
For the Nuclear Regulatory Commission.
David C. Cullison,
NRC Clearance Officer, Office of the Chief
Information Officer.
[FR Doc. 2019–19047 Filed 9–3–19; 8:45 am]
BILLING CODE 7590–01–P
PEACE CORPS
Information Collection Request;
Submission for OMB Review
Peace Corps.
60-Day notice and request for
comments.
AGENCY:
ACTION:
The Peace Corps will be
submitting the following information
collection request to the Office of
Management and Budget (OMB) for
review and approval. The purpose of
this notice is to allow 60 days for public
comment in the Federal Register
preceding submission to OMB. We are
conducting this process in accordance
with the Paperwork Reduction Act of
1995.
SUMMARY:
Submit comments on or before
November 4, 2019.
ADDRESSES: Comments should be
addressed to Virginia Burke, FOIA/
Privacy Act Officer. Virginia Burke can
be contacted by telephone at 202–692–
1887 or email at pcfr@peacecorps.gov.
Email comments must be made in text
and not in attachments.
FOR FURTHER INFORMATION CONTACT:
Virginia Burke, FOIA/Privacy Act
Officer. Virginia Burke can be contacted
by telephone at 202–692–1887 or email
at pcfr@peacecorps.gov.
SUPPLEMENTARY INFORMATION:
Title: Reasonable Accommodation
Request Form.
OMB Control Number: 0420-****.
Type of Request: New.
Affected Public: Individuals.
Respondents Obligation to Reply:
Voluntary.
Burden to the Public:
Estimated burden (hours) of the
collection of information:
a. Number of respondents: 1,000.
b. Frequency of response: 1 time.
c. Completion time: 10 minutes.
d. Annual burden hours: 200 hours.
General Description of Collection: The
Peace Corps uses the Reasonable
Accommodation Request Form to
collect essential information from
medical providers and staff to facilitate
access of accommodations as required
by Section 504 of the Rehabilitation Act.
Data collected will be used to validate
accommodation needs. These forms are
the first documented point of contact
between the Peace Corps and its
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DATES:
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applicants or employees who are in
need of accommodations.
Request for Comment: Peace Corps
invites comments on whether the
proposed collections of information are
necessary for proper performance of the
functions of the Peace Corps, including
whether the information will have
practical use; the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the information
to be collected; and, ways to minimize
the burden of the collection of
information on those who are to
respond, including through the use of
automated collection techniques, when
appropriate, and other forms of
information technology.
This notice is issued in Washington, DC,
on August 28, 2019.
Virginia Burke,
FOIA/Privacy Act Officer, Management.
[FR Doc. 2019–19003 Filed 9–3–19; 8:45 am]
BILLING CODE 6051–01–P
PEACE CORPS
Information Collection Request;
Submission for OMB Review
Peace Corps.
60-Day notice and request for
comments.
AGENCY:
ACTION:
The Peace Corps will be
submitting the following information
collection request to the Office of
Management and Budget (OMB) for
review and approval. The purpose of
this notice is to allow 60 days for public
comment in the Federal Register
preceding submission to OMB. We are
conducting this process in accordance
with the Paperwork Reduction Act of
1995.
SUMMARY:
Submit comments on or before
November 4, 2019.
ADDRESSES: Comments should be
addressed to Virginia Burke, FOIA/
Privacy Act Officer. Virginia Burke can
be contacted by telephone at 202–692–
1887 or email at pcfr@peacecorps.gov.
Email comments must be made in text
and not in attachments.
FOR FURTHER INFORMATION CONTACT:
Virginia Burke can be contacted by
telephone at 202–692–1887 or email at
pcfr@peacecorps.gov.
SUPPLEMENTARY INFORMATION:
Title: RPCV Portal.
OMB Control Number: 0420–0558.
Type of Request: Renewal.
Affected Public: Individuals.
Respondents Obligation to Reply:
Voluntary.
Burden to the Public:
DATES:
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Estimated burden (hours) of the
collection of information:
a. Number of respondents: 29,331.
b. Frequency of response: 2 times.
c. Completion time: 5 minutes.
d. Annual burden hours: 4,888 hours.
General Description of Collection: To
better serve the Returned Volunteer
population and support the Third Goal,
3GL has developed an RPCV Portal that
allows Returned Peace Corps Volunteers
(RPCVs) to update their contact
information, share stories, request
official documentation, view their
service history, and enroll in outreach
and marketing campaigns. The RPCV
Portal can only be accessed by
Volunteers who have completed their
Peace Corps service; neither current
Volunteers, Trainees, applicants nor
other members of the public will be able
to access the system.
Request for Comment: Peace Corps
invites comments on whether the
proposed collections of information are
necessary for proper performance of the
functions of the Peace Corps, including
whether the information will have
practical use; the accuracy of the
agency’s estimate of the burden of the
proposed collection of information,
including the validity of the information
to be collected; and, ways to minimize
the burden of the collection of
information on those who are to
respond, including through the use of
automated collection techniques, when
appropriate, and other forms of
information technology.
This notice is issued in Washington, DC on
August 28, 2019.
Virginia Burke,
FOIA/Privacy Act Officer, Management.
[FR Doc. 2019–18972 Filed 9–3–19; 8:45 am]
BILLING CODE 6051–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86794; File No. SR–
NASDAQ–2019–067]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
The Nasdaq Options Market LLC
(‘‘NOM’’) Pricing at Options 7
August 28, 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 August
22, 2019, The Nasdaq Stock Market LLC
1 15
2 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 84, No. 171 / Wednesday, September 4, 2019 / Notices
(‘‘Nasdaq’’ 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend The
Nasdaq Options Market LLC (‘‘NOM’’)
pricing at Options 7, Section 3 titled
‘‘Nasdaq Options Market—Ports and
Other Services.’’ The amendment will
describe the pricing with respect to an
upcoming technology infrastructure
migration.
While the changes proposed herein
are effective upon filing, the Exchange
has designated the amendments become
operative on September 3, 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
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
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The Exchange proposes to amend
NOM pricing at Options 7, Section 3
titled ‘‘Nasdaq Options Market—Ports
and Other Services.’’ The Exchange
previously filed a fee proposal to not
assess a fee for duplicative FIX Ports,3
3 Financial Information eXchange’’ or ’’ FIX’’ is an
interface that allows Participants and their
Sponsored Customers to connect, send, and receive
messages related to orders to and from the
Exchange. Features include the following: (1)
Execution messages; (2) order messages; and (3) risk
protection triggers and cancel notifications. See
Chapter VI, Section 21(a)(i)(A).
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CTI Ports 4 and FIX DROP Ports 5 to new
FIX Ports, CTI Ports and FIX DROP
Ports, during the month of August 2019,
in connection with an upcoming
technology infrastructure migration.6
With this rule change, the Exchange
proposes to not assess a fee for
duplicative FIX Ports, CTI Ports and FIX
DROP Ports to new FIX Ports, CTI Ports
and FIX DROP Ports, during the month
of September 2019 to allow additional
time for the Exchange to migrate its
technology.
Description of Migration and Pricing
Impact
In connection with this migration,
Participants may request new FIX Ports,
CTI Ports and FIX DROP Ports during
the month of September 2019, which are
duplicative of the type and quantity of
their current ports, at no additional cost
to allow for testing of the new ports and
allow for continuous connection to the
match engine during the transition
period.7 For example, a NOM
Participant with 3 FIX Ports, 1 CTI Port
and 1 FIX DROP Port on September 3,
2019 could request 3 new FIX Ports, 1
CTI Port and 1 FIX DROP Port for the
month of September 2019 at no
additional cost. The NOM Participant
would be assessed only for the legacy
market ports, in this case 3 FIX Ports, 1
CTI Port and 1 FIX DROP Port, for the
month of September 2019 and would
not be assessed for the new ports, which
are duplicative of the current ports. A
Participant may acquire any additional
legacy ports during the month of
September 2019 and would be assessed
the charges indicated in the current
Pricing Schedule. The migration does
4 Clearing Trade Interface (‘‘CTI’’) is a real-time
clearing trade update message that is sent to a
Participant after an execution has occurred and
contains trade details specific to that Participant.
The information includes, among other things, the
following: (i) The Clearing Member Trade
Agreement or ‘‘CMTA’’ or The Options Clearing
Corporation or ‘‘OCC’’ number; (ii) Exchange badge
or house number; (iii) the Exchange internal firm
identifier; (iv) an indicator which will distinguish
electronic and non-electronically delivered orders;
(v) liquidity indicators and transaction type for
billing purposes; and (vi) capacity. See Chapter VI,
Section 19(b)(1).
5 FIX DROP is a real-time order and execution
update message that is sent to a Participant after an
order been received/modified or an execution has
occurred and contains trade details specific to that
Participant. The information includes, among other
things, the following: (i) Executions; (ii)
cancellations; (iii) modifications to an existing
order; and (iv) busts or post-trade corrections. See
Chapter VI, Section 19(b)(3).
6 See Securities Exchange Act Release No. 86507
(July 29, 2019), 84 FR 37934 (August 2, 2019) (SR–
NASDAQ–2019–056).
7 Participants would contact Market Operations to
acquire new duplicative FIX Ports, CTI Ports and
FIX DROP Ports. See Options Technical Update
#2019–3.
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not require a Participant to acquire any
additional ports, rather the migration
requires a new port to replace any
existing ports provided the Participant
desired to maintain the same number of
ports.8 A Participant desiring to enter
orders into NOM is required to obtain 1
FIX Port. A Participant may also obtain
order and execution ports, such as a CTI
Port and/or a FIX DROP Port, to receive
clearing and execution messages. The
number of additional FIX or order and
execution ports obtained by a
Participant is dependent on the
Participant’s business needs.
Applicability to and Impact on
Participants 9
The proposal is not intended to
impose any additional fees on any NOM
Participants. All Participants may enter
orders on NOM. As noted above, a NOM
Participant may enter all orders on
NOM through one FIX Port. The
Exchange does not require a NOM
Participant to obtain more than one FIX
Port, however, a Participant may obtain
multiple FIX Ports, a CTI Port or a FIX
DROP Port to meet its individual
business needs. This proposal is
intended to permit a NOM Participant to
migrate its current FIX Ports, CTI Ports
and FIX DROP Ports at no additional
costs during the month of September
2019 to allow for continuous connection
to the Exchange. Participants would
only be assessed a fee for their current
FIX Ports, CTI Ports and FIX DROP
Ports and not be assessed a fee for any
new duplicative ports they acquire in
connection with the technology
infrastructure migration. This proposal
is not intended to have a pricing impact.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
8 The migration is 1:1 and therefore would not
require a Participant to acquire new ports, nor
would it reduce the number of ports needed to
connect.
9 On May 21, 2019, the SEC Division of Trading
and Markets (the ‘‘Division’’) issued fee filing
guidance titled ‘‘Staff Guidance on SRO Rule
Filings Relating to Fees’’ (‘‘Guidance’’). Within the
Guidance, the Division noted, among other things,
that the purpose discussion should address ‘‘how
the fee may apply differently (e.g., additional cost
vs. additional discount) to different types of market
participants (e.g., market makers, institutional
brokers, retail brokers, vendors, etc.) and different
sizes of market participants.’’ See Guidance
(available at https://www.sec.gov/tm/staff-guidancesro-rule-filings-fees). The Guidance also suggests
that the purpose discussion should include
numerical examples. Where possible, the Exchange
is including numerical examples. In addition, the
Exchange is providing data to the Commission in
support of its arguments herein. The Guidance
covers all aspects of a fee filing, which the
Exchange has addressed throughout this filing.
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Federal Register / Vol. 84, No. 171 / Wednesday, September 4, 2019 / Notices
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
proposal is also consistent with Section
11A of the Act relating to the
establishment of the national market
system for securities. Moreover, the
Exchange believes that its proposal
complies with Commission guidance on
SRO fee filings that the Commission
Staff issued on May 21, 2019.12
The Proposal is Reasonable
The Exchange’s proposal is reasonable
in several respects. As a threshold
matter, the Exchange is subject to
significant competitive forces in the
market for options transaction services
that constrain its pricing determinations
in that market. The fact that this market
is competitive has long been recognized
by the courts. In NetCoalition v.
Securities and Exchange Commission,
the D.C. Circuit stated as follows: ‘‘[n]o
one disputes that competition for order
flow is ‘fierce.’ . . . As the SEC
explained, ‘[i]n the U.S. national market
system, buyers and sellers of securities,
and the broker-dealers that act as their
order-routing agents, have a wide range
of choices of where to route orders for
execution’; [and] ‘no exchange can
afford to take its market share
percentages for granted’ because ‘no
exchange possesses a monopoly,
regulatory or otherwise, in the execution
of order flow from broker
dealers’. . . .’’ 13
Numerous indicia demonstrate the
competitive nature of this market. For
example, clear substitutes to the
Exchange exist in the market for options
transaction services. The Exchange is
one of several options venues to which
market participants may direct their
order flow, and it represents a small
percentage of the overall market. The
Exchange believes its proposal is
reasonable because it will not cause a
pricing impact on any NOM Participant,
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(4) and (5).
12 See Guidance, supra note 8. Although the
Exchange believes that this filing complies with the
Guidance, the Exchange does not concede that the
standards set forth in the Guidance are consistent
with the Exchange Act and reserves its right to
challenge those standards through administrative
and judicial review, as appropriate.
13 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C.
Cir. 2010) (quoting Securities Exchange Act Release
No. 59039 (December 2, 2008), 73 FR 74770, 74782–
83 (December 9, 2008) (SR–NYSEArca–2006–21)).
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rather the proposal is intended to permit
NOM Participants to migrate their FIX
Ports, CTI Ports and FIX DROP Ports to
new technology at no additional cost
during the month of September 2019.
This proposal, which offers new
duplicative ports to Participants at no
cost, will allow Participants to test and
maintain continuous connection to the
Exchange during the month of
September 2019.
The Proposal Represents an Equitable
Allocation and is Not Unfairly
Discriminatory
The Exchange believes its proposal
allocates its fees fairly among its market
participants. The proposal is equitable
and not unfairly discriminatory. All
Participants may enter orders on NOM.
As noted above, a NOM Participant may
enter all orders on NOM through one
FIX Port. The Exchange does not require
a NOM Participant to obtain more than
one FIX Port, however, a Participant
may obtain multiple FIX Ports, a CTI
Port or a FIX DROP Port to meet its
individual business needs. This
proposal is not intended to have a
pricing impact to any NOM Participant.
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.
Inter-Market Competition
The proposal does not impose an
undue burden on inter-market
competition. This proposal does not
amend pricing or functionality. Rather,
this technology migration will enable
NOM Participants to continue to
connect to NOM, as is the case today,
for the entry of orders.
Intra-Market Competition
The proposal does not impose an
undue burden on intra-market
competition. All Participants may enter
orders on NOM. As noted above, a NOM
Participant may enter all orders on
NOM through one FIX Port. The
Exchange does not require a NOM
Participant to obtain more than one FIX
Port, however, a Participant may obtain
multiple FIX Ports, a CTI Port or a FIX
DROP Port to meet its individual
business needs. This proposal is not
intended to have a pricing impact to any
NOM Participant.
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act.14
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 rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2019–067 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–2019–067. 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
14 15
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U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 84, No. 171 / Wednesday, September 4, 2019 / Notices
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–2019–067 and
should be submitted on or before
September 25, 2019.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019–19005 Filed 9–3–19; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–86782; File No. SR–ICEEU–
2019–017]
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
of Proposed Rule Change, as Modified
by Partial Amendment No. 1, Relating
to the ICE Clear Europe CDS Clearing
Back-Testing Policy (the ‘‘Back-Testing
Policy’’).
August 28, 2019.
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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 August
19, 2019, ICE Clear Europe Limited
(‘‘ICE Clear Europe’’ or the ‘‘Clearing
House’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule changes described in
Items I, II and III below, which Items
have been substantially prepared by ICE
Clear Europe. On August 27, 2019, ICE
Clear Europe filed Partial Amendment
No. 1 to the proposed rule change.3 The
Commission is publishing this notice to
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Partial Amendment No. 1 corrected an
inaccurate statement in the initial proposed rule
change but did not make any changes to the
substance of the filing or the text of the proposed
rule change.
1 15
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solicit comments on the proposed rule
change, as modified by Partial
Amendment No. 1 (hereafter referred to
as the ‘‘proposed rule change’’), from
interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
ICE Clear Europe Limited (‘‘ICE Clear
Europe’’ or the ‘‘Clearing House’’)
proposes to revise its Back-Testing
Policy to make certain clarifications,
correct certain typographical errors and
update governance processes.
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, ICE
Clear Europe 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. ICE
Clear Europe has prepared summaries,
set forth in sections (A), (B), and (C)
below, of the most significant aspects of
such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
(a) Purpose
ICE Clear Europe is proposing to
modify, update and reorganize certain
provisions of its Back-Testing Policy to
clarify certain test strategies, procedures
and methodologies, correct certain
typographical errors and update
governance processes.
The amendments to the Back-Testing
Policy principally include various
clarifications to the daily, weekly and
monthly back-testing performed by the
Clearing House. As discussed herein,
the amendments would generally align
the Back-Testing Policy with the
Clearing House’s current back-testing
practices, and accordingly the
amendments are not intended to result
in significant changes in back-testing
practices. ICE Clear Europe is thus
proposing to make these changes in
order to make the policy more accurate,
clear and precise, in line with regulatory
requirements applicable to back-margin
back-testing and related suggestions of
its regulators. Certain amendments will
in particular clarify that back-testing is
done at the Clearing Member account
level,4 replacing existing references to
4 Account for this purpose has the meaning
specified in the Rules.
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46573
testing at the portfolio level (which was
a less precise description).
The amendments would reorganize
the requirements of the policy with
respect to daily back-testing, but would
not substantially change existing
processes. As noted above, the
amendments would provide for daily
back-testing at the Clearing Member
account level. The amendments would
also provide that back-testing results
would be reported to the Model
Oversight Committee and CDS Risk
Committee on a monthly basis,
including an exceedance summary, an
example of which would be included in
the Back-Testing Policy.
The provisions of the Back-Testing
Policy setting out portfolio construction
for back-testing the production margin
model using special strategy portfolios
would be amended to add an additional
strategy and also update strategy names
and clarify the use of bought and sold
protection positions in the back-testing
process. The portfolio construction of
the additional strategy, iTraxx Senior
Financial 5Y.OTR Arb, would be the
same as the construction of the existing
special strategies but would relate only
to the iTraxx Senior Financials 5Y
index. ICE Clear Europe regularly back
tests using this additional strategy in
practice and is adding it to the policy to
reflect this practice. The amendments
would provide that with respect to each
specified strategy, for completeness, the
opposite strategy would be taken into
consideration. The other amendments
are also generally intended to better
reflect current practice.
The provisions of the policy relating
to back testing of the Monte Carlo
(‘‘MC’) model would be revised to
clarify that back-tests are performed
daily on the Spread Response
component of the Initial Margin using
ICE Clear Europe’s MC model rather
than the worst among the scenario based
spread response approaches and the MC
approach. The back-test would be
performed on individual Clearing
Member accounts using the risk
approach for the Spread Response
Initial Margin (and accordingly
references to specific quantiles for
testing have been removed). The backtested risk measures would include the
sum of the MC VaR and the basis risk,
interest rate and recovery rate
quantities. This amendment is intended
to clarify what is meant in the policy by
‘‘Monte Carlo back-testing’’, which is
back-testing only the MC model and not
the stress based model. There would be
no change to the current practice with
respect to MC model back testing. The
amendments would also remove an
unnecessary distinction depending on
E:\FR\FM\04SEN1.SGM
04SEN1
]]>Agencies
[Federal Register Volume 84, Number 171 (Wednesday, September 4, 2019)]
[Notices]
[Pages 46570-46573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19005]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-86794; File No. SR-NASDAQ-2019-067]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend The Nasdaq Options Market LLC (``NOM'') Pricing at Options 7
August 28, 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 August 22, 2019, The Nasdaq Stock Market LLC
[[Page 46571]]
(``Nasdaq'' 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend The Nasdaq Options Market LLC
(``NOM'') pricing at Options 7, Section 3 titled ``Nasdaq Options
Market--Ports and Other Services.'' The amendment will describe the
pricing with respect to an upcoming technology infrastructure
migration.
While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on September 3,
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 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 proposes to amend NOM pricing at Options 7, Section 3
titled ``Nasdaq Options Market--Ports and Other Services.'' The
Exchange previously filed a fee proposal to not assess a fee for
duplicative FIX Ports,\3\ CTI Ports \4\ and FIX DROP Ports \5\ to new
FIX Ports, CTI Ports and FIX DROP Ports, during the month of August
2019, in connection with an upcoming technology infrastructure
migration.\6\ With this rule change, the Exchange proposes to not
assess a fee for duplicative FIX Ports, CTI Ports and FIX DROP Ports to
new FIX Ports, CTI Ports and FIX DROP Ports, during the month of
September 2019 to allow additional time for the Exchange to migrate its
technology.
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\3\ Financial Information eXchange'' or '' FIX'' is an interface
that allows Participants and their Sponsored Customers to connect,
send, and receive messages related to orders to and from the
Exchange. Features include the following: (1) Execution messages;
(2) order messages; and (3) risk protection triggers and cancel
notifications. See Chapter VI, Section 21(a)(i)(A).
\4\ Clearing Trade Interface (``CTI'') is a real-time clearing
trade update message that is sent to a Participant after an
execution has occurred and contains trade details specific to that
Participant. The information includes, among other things, the
following: (i) The Clearing Member Trade Agreement or ``CMTA'' or
The Options Clearing Corporation or ``OCC'' number; (ii) Exchange
badge or house number; (iii) the Exchange internal firm identifier;
(iv) an indicator which will distinguish electronic and non-
electronically delivered orders; (v) liquidity indicators and
transaction type for billing purposes; and (vi) capacity. See
Chapter VI, Section 19(b)(1).
\5\ FIX DROP is a real-time order and execution update message
that is sent to a Participant after an order been received/modified
or an execution has occurred and contains trade details specific to
that Participant. The information includes, among other things, the
following: (i) Executions; (ii) cancellations; (iii) modifications
to an existing order; and (iv) busts or post-trade corrections. See
Chapter VI, Section 19(b)(3).
\6\ See Securities Exchange Act Release No. 86507 (July 29,
2019), 84 FR 37934 (August 2, 2019) (SR-NASDAQ-2019-056).
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Description of Migration and Pricing Impact
In connection with this migration, Participants may request new FIX
Ports, CTI Ports and FIX DROP Ports during the month of September 2019,
which are duplicative of the type and quantity of their current ports,
at no additional cost to allow for testing of the new ports and allow
for continuous connection to the match engine during the transition
period.\7\ For example, a NOM Participant with 3 FIX Ports, 1 CTI Port
and 1 FIX DROP Port on September 3, 2019 could request 3 new FIX Ports,
1 CTI Port and 1 FIX DROP Port for the month of September 2019 at no
additional cost. The NOM Participant would be assessed only for the
legacy market ports, in this case 3 FIX Ports, 1 CTI Port and 1 FIX
DROP Port, for the month of September 2019 and would not be assessed
for the new ports, which are duplicative of the current ports. A
Participant may acquire any additional legacy ports during the month of
September 2019 and would be assessed the charges indicated in the
current Pricing Schedule. The migration does not require a Participant
to acquire any additional ports, rather the migration requires a new
port to replace any existing ports provided the Participant desired to
maintain the same number of ports.\8\ A Participant desiring to enter
orders into NOM is required to obtain 1 FIX Port. A Participant may
also obtain order and execution ports, such as a CTI Port and/or a FIX
DROP Port, to receive clearing and execution messages. The number of
additional FIX or order and execution ports obtained by a Participant
is dependent on the Participant's business needs.
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\7\ Participants would contact Market Operations to acquire new
duplicative FIX Ports, CTI Ports and FIX DROP Ports. See Options
Technical Update #2019-3.
\8\ The migration is 1:1 and therefore would not require a
Participant to acquire new ports, nor would it reduce the number of
ports needed to connect.
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Applicability to and Impact on Participants \9\
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\9\ On May 21, 2019, the SEC Division of Trading and Markets
(the ``Division'') issued fee filing guidance titled ``Staff
Guidance on SRO Rule Filings Relating to Fees'' (``Guidance'').
Within the Guidance, the Division noted, among other things, that
the purpose discussion should address ``how the fee may apply
differently (e.g., additional cost vs. additional discount) to
different types of market participants (e.g., market makers,
institutional brokers, retail brokers, vendors, etc.) and different
sizes of market participants.'' See Guidance (available at https://www.sec.gov/tm/staff-guidance-sro-rule-filings-fees). The Guidance
also suggests that the purpose discussion should include numerical
examples. Where possible, the Exchange is including numerical
examples. In addition, the Exchange is providing data to the
Commission in support of its arguments herein. The Guidance covers
all aspects of a fee filing, which the Exchange has addressed
throughout this filing.
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The proposal is not intended to impose any additional fees on any
NOM Participants. All Participants may enter orders on NOM. As noted
above, a NOM Participant may enter all orders on NOM through one FIX
Port. The Exchange does not require a NOM Participant to obtain more
than one FIX Port, however, a Participant may obtain multiple FIX
Ports, a CTI Port or a FIX DROP Port to meet its individual business
needs. This proposal is intended to permit a NOM Participant to migrate
its current FIX Ports, CTI Ports and FIX DROP Ports at no additional
costs during the month of September 2019 to allow for continuous
connection to the Exchange. Participants would only be assessed a fee
for their current FIX Ports, CTI Ports and FIX DROP Ports and not be
assessed a fee for any new duplicative ports they acquire in connection
with the technology infrastructure migration. This proposal is not
intended to have a pricing impact.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b)
[[Page 46572]]
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 proposal is also consistent with
Section 11A of the Act relating to the establishment of the national
market system for securities. Moreover, the Exchange believes that its
proposal complies with Commission guidance on SRO fee filings that the
Commission Staff issued on May 21, 2019.\12\
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(4) and (5).
\12\ See Guidance, supra note 8. Although the Exchange believes
that this filing complies with the Guidance, the Exchange does not
concede that the standards set forth in the Guidance are consistent
with the Exchange Act and reserves its right to challenge those
standards through administrative and judicial review, as
appropriate.
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The Proposal is Reasonable
The Exchange's proposal is reasonable in several respects. As a
threshold matter, the Exchange is subject to significant competitive
forces in the market for options transaction services that constrain
its pricing determinations in that market. The fact that this market is
competitive has long been recognized by the courts. In NetCoalition v.
Securities and Exchange Commission, the D.C. Circuit stated as follows:
``[n]o one disputes that competition for order flow is `fierce.' . . .
As the SEC explained, `[i]n the U.S. national market system, buyers and
sellers of securities, and the broker-dealers that act as their order-
routing agents, have a wide range of choices of where to route orders
for execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .'' \13\
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\13\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
options transaction services. The Exchange is one of several options
venues to which market participants may direct their order flow, and it
represents a small percentage of the overall market. The Exchange
believes its proposal is reasonable because it will not cause a pricing
impact on any NOM Participant, rather the proposal is intended to
permit NOM Participants to migrate their FIX Ports, CTI Ports and FIX
DROP Ports to new technology at no additional cost during the month of
September 2019. This proposal, which offers new duplicative ports to
Participants at no cost, will allow Participants to test and maintain
continuous connection to the Exchange during the month of September
2019.
The Proposal Represents an Equitable Allocation and is Not Unfairly
Discriminatory
The Exchange believes its proposal allocates its fees fairly among
its market participants. The proposal is equitable and not unfairly
discriminatory. All Participants may enter orders on NOM. As noted
above, a NOM Participant may enter all orders on NOM through one FIX
Port. The Exchange does not require a NOM Participant to obtain more
than one FIX Port, however, a Participant may obtain multiple FIX
Ports, a CTI Port or a FIX DROP Port to meet its individual business
needs. This proposal is not intended to have a pricing impact to any
NOM Participant.
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.
Inter-Market Competition
The proposal does not impose an undue burden on inter-market
competition. This proposal does not amend pricing or functionality.
Rather, this technology migration will enable NOM Participants to
continue to connect to NOM, as is the case today, for the entry of
orders.
Intra-Market Competition
The proposal does not impose an undue burden on intra-market
competition. All Participants may enter orders on NOM. As noted above,
a NOM Participant may enter all orders on NOM through one FIX Port. The
Exchange does not require a NOM Participant to obtain more than one FIX
Port, however, a Participant may obtain multiple FIX Ports, a CTI Port
or a FIX DROP Port to meet its individual business needs. This proposal
is not intended to have a pricing impact to any NOM Participant.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act.\14\
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\14\ 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-2019-067 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-2019-067. 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
[[Page 46573]]
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-2019-067 and should
be submitted on or before September 25, 2019.
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\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-19005 Filed 9-3-19; 8:45 am]
BILLING CODE 8011-01-P
