Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Connectivity, Surveillance and Risk Management Services and Fees, 24685-24689 [2021-09646]
Download as PDF
<![CDATA[
Federal Register / Vol. 86, No. 87 / Friday, May 7, 2021 / Notices
does not unfairly discriminate against
Applicant’s stockholders because all
purchases of Applicant’s stock will be at
the closing price of the shares of its
common stock on any applicable stock
exchange or national market system on
the relevant date (i.e., the public market
price on the date of grant of Restricted
Stock and the date of grant of Options).
Applicant submits that because all
transactions with respect to the Plans
will take place at the public market
price for the Applicant’s common stock,
these transactions will not be
significantly different than could be
achieved by any stockholder selling in
a market transaction. Applicant
represents that no transactions will be
conducted pursuant to the requested
order on days where there are no
reported market transactions involving
Applicant’s shares.
12. Applicant represents that the
withholding provisions in the Plans do
not raise concerns about preferential
treatment of Applicant’s insiders
because each Plan is a bona fide
compensation plan of the type that is
common among corporations generally.
Furthermore, the vesting schedule is
determined at the time of the initial
grant of the Restricted Stock and the
option exercise price is determined at
the time of the initial grant of the
Options. Applicant represents that all
purchases may be made only as
permitted by the Plans, which will be
approved by the Applicant’s
stockholders prior to any application of
the relief. Applicant believes that
granting the requested relief would be
consistent with the policies underlying
the provisions of the Act permitting the
use of equity compensation as well as
prior exemptive relief granted by the
Commission under section 23(c) of the
Act.
Applicant’s Conditions
Applicant agrees that the order
granting the requested relief will be
subject to the following conditions:
1. The Plans will be authorized by
Applicant’s stockholders.
2. Each issuance of Restricted Stock to
an officer, employee, or Non-Employee
Director will be approved by the
Required Majority of Applicant’s
directors on the basis that such grant is
in the best interest of Applicant and its
stockholders.
3. The amount of voting securities
that would result from the exercise of all
of Applicant’s outstanding warrants,
options and rights, together with any
Restricted Stock issued under the Plans,
at the time of issuance shall not exceed
25% of the outstanding voting securities
of the Company, except that if the
VerDate Sep<11>2014
19:55 May 06, 2021
Jkt 253001
24685
amount of voting securities that would
result from the exercise of all of the
Company’s outstanding warrants,
options and rights issued to the
Company’s directors, officers and
employees, together with any Restricted
Stock issued pursuant to the Plans,
would exceed 15% of the outstanding
voting securities of the Company, then
the total amount of voting securities that
would result from the exercise of all
outstanding warrants, options and
rights, together with any Restricted
Stock issued pursuant to the Plans, at
the time of issuance shall not exceed
20% of the outstanding voting securities
of the Company.
4. The amount of Restricted Stock
issued and outstanding will not at the
time of issuance of any shares of
Restricted Stock exceed ten percent of
Applicant’s outstanding voting
securities.
5. The Board will review the Plans at
least annually. In addition, the Board
will review periodically the potential
impact that the issuance of Restricted
Stock under the Plans could have on
Applicant’s earnings and net asset value
per share, such review to take place
prior to any decisions to grant Restricted
Stock under the Plans, but in no event
less frequently than annually. Adequate
procedures and records will be
maintained to permit such review. The
Board will be authorized to take
appropriate steps to ensure that the
issuance of Restricted Stock under the
Plans will be in the best interest of
Applicant’s stockholders. This authority
will include the authority to prevent or
limit the granting of additional
Restricted Stock under the Plans. All
records maintained pursuant to this
condition will be subject to examination
by the Commission and its staff.
SECURITIES AND EXCHANGE
COMMISSION
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
J. Matthew DeLesDernier,
Assistant Secretary.
Section 115. Ports and Services †
The charges under this section are assessed
by Nasdaq for connectivity to services and
the following systems operated by Nasdaq or
FINRA: The Nasdaq Market Center, FINRA
Trade Reporting and Compliance Engine
(TRACE), the FINRA/Nasdaq Trade Reporting
Facility, FINRA’s OTCBB Service, and the
FINRA OTC Reporting Facility (ORF). The
following fees are not applicable to The
Nasdaq Options Market LLC. For related
options fees for Ports and other Services refer
to Options 7, Section 3 of the Options Rules.
[FR Doc. 2021–09650 Filed 5–6–21; 8:45 am]
BILLING CODE 8011–01–P
PO 00000
[Release No. 34–91744; File No. SR–
NASDAQ–2021–025]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Connectivity, Surveillance and Risk
Management Services and Fees
May 3, 2021.
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 April 20,
2021, The Nasdaq Stock Market LLC
(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘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
certain rules relating to connectivity,
surveillance and risk management
services fees. More specifically, the
Exchange is proposing to amend Equity
7, Section 115 and adopt Equity 7,
Sections 116–A and 149–A to
incorporate these new products into the
Exchange’s pricing schedule.
While these amendments are effective
upon filing, the Exchange has
designated Equity 7, Section 116–A to
be operative no later than Q3 2021.3
The text of the proposed rule change
is set forth below. Proposed new
language is italicized; deleted text is in
brackets.
*
*
*
*
*
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 As discussed in more detail throughout the
filing, WorkX and Real-Time Stats launched on
April 12, 2021 and Post-Trade Risk Management
will launch no later than Q3 2021. Nasdaq will
publish an Equity Trade Alert at least 10 days prior
to launching Post-Trade Risk Management.
2 17
Frm 00104
Fmt 4703
Sfmt 4703
E:\FR\FM\07MYN1.SGM
07MYN1
24686
Federal Register / Vol. 86, No. 87 / Friday, May 7, 2021 / Notices
(a)–(d) No change.
(e) Specialized Services Related to FINRA/
Nasdaq Trade Reporting Facility.
WebLink ACT or Nasdaq ..
Workstation Post Trade .....
ACT Workstation ...............
Nasdaq WorkX ...................
$525.00/month.
A subscription includes: The Trade Reporting File Upload service, which allows members to upload multiple
trade reports in batches to ACT; and the ACT Reject Scan service, which provides a list of all of a member’s
rejected ACT trade entries and a copy of each rejected trade report form submitted to ACT.
$225 per month for the ACT Trade History service which provides searchable access to a member’s trades
that are older than six months dating back to 2009.
$525/logon/month.
$225 per month for the ACT Trade History service which provides searchable access to a member’s trades
that are older than six months dating back to 2009.
$525/logon/month.
$225 per month for the ACT Trade History service which provides searchable access to a member’s trades
that are older than one year dating back five years. For customers using both Act Workstation and Nasdaq
WorkX, fees for Nasdaq WorkX will be waived for the first month of service.
(f)–(j) No change.
† Fees are assessed in full month
increments under this section, and thus are
not prorated.
*
*
*
*
*
Section 116. Nasdaq Risk Management
(a) Clearing brokers using the Nasdaq Risk
Management Service will be assessed a
charge of $0.030 per side per trade monitored
by Nasdaq Risk Management and a charge of
$17.25 per month per correspondent
executing broker monitored by Nasdaq Risk
Management, up to a maximum charge of
$7,500 per month per correspondent
executing broker. Clearing brokers with less
than 17,000 trades per month per
correspondent executing broker and that fall
below 50 total correspondents monitored
during the month are assessed a monthly fee
of $500 per correspondent executing broker
monitored in lieu of the $0.030 per side per
trade charge.
(b)–(c) No change.
Section 116–A. Nasdaq Post-Trade Risk
Management
(a) Clearing brokers using the Nasdaq PostTrade Risk Management Service will be
assessed a charge of $0.030 per side per trade
monitored by Nasdaq Post-Trade Risk
Management and a charge of $17.25 per
month per correspondent executing broker
monitored by Nasdaq Post-Trade Risk
Management, up to a maximum charge of
$7,500 per month per correspondent
executing broker. Clearing brokers with less
than 17,000 trades per month per
correspondent executing broker and that fall
below 50 total correspondents monitored
during the month are assessed a monthly fee
of $500 per correspondent executing broker
monitored in lieu of the $0.030 per side per
trade charge. For customers using both
Nasdaq Risk Management and Nasdaq PostTrade Risk Management, fees for Nasdaq
Post-Trade Risk Management will be waived
for the first month of service.
*
*
*
*
*
Section 149. Nasdaq InterACT
Nasdaq InterACT is a surveillance tool that
provides summaries of a subscribing
member’s trade activity for the FINRA/
Nasdaq Trade Reporting Facility. Such
summaries include the total number of trades
that have been reported to the Facility,
various statistics associated with those trades
VerDate Sep<11>2014
19:55 May 06, 2021
Jkt 253001
reported (including: declines, cancels,
stepouts, as-ofs, etc), the total number of
trades that must be reviewed for acceptance,
and the total number of Regulation NMS
trade throughs. ‘‘FINRA/Nasdaq Trade
Reporting Facility’’ shall mean the FINRA/
Nasdaq TRF Carteret and the FINRA/Nasdaq
TRF Chicago.
InterACT is available for a subscription fee
of $400 per month, per user, with a
maximum fee of $2,400 per month, per
member firm.
Section 149–A. Nasdaq Real-Time Stats
Nasdaq Real-Time Stats is a surveillance
tool that provides summaries of a subscribing
member’s trade activity for the FINRA/
Nasdaq Trade Reporting Facility to support
compliance with FINRA rules. Such
summaries include the total number of trades
that have been reported to the Facility,
various statistics associated with those trades
reported (including: Declines, cancels,
stepouts, as-ofs, etc), and the total number of
trades that must be reviewed for acceptance.
‘‘FINRA/Nasdaq Trade Reporting Facility’’
shall mean the FINRA/Nasdaq TRF Carteret
and the FINRA/Nasdaq TRF Chicago.
Real-Time Stats is available for a
subscription fee of $400 per month, per user,
with a maximum fee of $2,400 per month,
per member firm. For customers using both
Nasdaq InterACT and Nasdaq Real-Time
Stats, fees for Nasdaq Real-Time Stats will be
waived for the first month of service.
*
*
*
*
*
(b) Not applicable.
(c) Not applicable.
*
*
*
*
*
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.
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq has re-platformed three of its
products for trade reporting,
surveillance and risk management
services—(1) ACT Workstation
(‘‘Workstation’’),4 (2) Nasdaq InterACT
(‘‘InterACT’’) 5 and (3) Nasdaq Risk
Management (‘‘Risk Management’’).6
These products will be renamed (1)
Nasdaq WorkXTM (‘‘WorkX’’), (2)
Nasdaq Real-Time Stats (‘‘Real-Time
Stats’’) and (3) Nasdaq Post-Trade Risk
Management (‘‘Post-Trade Risk
Management’’), respectively.7 The
Exchange is proposing to amend Equity
7, Section 115 and adopt Equity 7,
Sections 116–A and 149–A to
incorporate these new products into the
Exchange’s pricing schedule.
Similar to the Workstation, WorkX is
a web-based application that will
facilitate trade reporting and clearing
functions for the FINRA/Nasdaq Trade
Reporting Facility Carteret (the ‘‘FINRA/
Nasdaq TRF Carteret’’) and the FINRA/
Nasdaq Trade Reporting Facility
4 Workstation is a web-based application that
electronically facilitates trade reporting and
clearing functions for trades reported to the FINRA/
Nasdaq TRF. Workstation services include trade
entry, trade scan, and uploads for bulk trade entry
to support FINRA/Nasdaq TRF participant trade
reporting in accordance with Financial Industry
Regulatory Authority (‘‘FINRA’’) rules.
5 InterACT is a real-time compliance tool that
assists firms with regulatory supervision of trade
activity reported to the FINRA/Nasdaq TRF.
InterACT summarizes and consolidates data for
over the counter trade reports to help customers
comply with FINRA rules.
6 Risk Management is a Workstation add-on
service which allows correspondent clearing firms
to manage credit risk exposure by offering real-time
monitoring against limit settings and activity trade
controls.
7 As discussed below, once all current
participants have migrated to the re-platformed
products, the Exchange will submit a future filing
to retire the services and remove Workstation,
InterACT and Risk Management products from its
fee schedule.
E:\FR\FM\07MYN1.SGM
07MYN1
Federal Register / Vol. 86, No. 87 / Friday, May 7, 2021 / Notices
Chicago (the ‘‘FINRA/Nasdaq TRF
Chicago’’) (collectively, the ‘‘FINRA/
Nasdaq TRF’’). WorkX’s infrastructure is
designed to be more user-friendly than
the current Workstation. For example,
WorkX trade scan provides holistic
search capabilities for all trade input
fields, across one date or date ranges for
successful and rejected trades with up
to 10,000 results generated in the front
end and 50,000 exportable results.
Currently, Workstation offers multiple
scan types with limited search criteria
and generates up to 2,000 results per
scan. Additionally, WorkX revamps the
user interface with a more modern
design, upgraded data visualization and
improved user experience. More
specifically, WorkX improves trade
entry by limiting manual customer
entries, which eliminates data entry
errors and replaces manual entries with
automated processing. However, unlike
Workstation, which currently provides
searchable access to a member’s trades
that are older than six months dating
back to 2009, WorkX will provide query
access to a member’s trades that are
older than one year and dating back to
no more than five years. The Exchange
reduced the length of its historical data
to improve WorkX system processing
while maintaining compliance with
record-keeping rules for accessible
transaction data pursuant to the Act.8
Other than reducing the length of
historical data, the new platform will
not have any significant effect on the
user’s usage of WorkX relative to
Workstation.
InterACT, a surveillance tool that
provides summaries of a subscribing
member’s trade activity for the FINRA/
Nasdaq TRF, has been re-platformed
and enhanced to become Nasdaq RealTime Stats, which includes enriched
data visualization and drill through
capabilities to scan trade activity
details. Similar to InterACT, which is an
add-on service available on
Workstation, Real-Time Stats is an addon service that is available on WorkX.
Currently, the InterACT add-on service
is utilized by members who are
responsible for the accuracy and
timeliness of trade reporting and
compliance with FINRA rules. Because
Real-Time Stats is intended for FINRA
trade reporting compliance, this
8 See 17 CFR 240.17a-1(b) (requiring every
national securities exchange, national securities
association, registered clearing agency and the
Municipal Securities Rulemaking Board to keep and
preserve at least one copy of all documents,
including all correspondence, memoranda, papers,
books, notices, accounts, and other such records as
shall be made or received by it in the course of its
business as such and in the conduct of its selfregulatory activity, for a period of not less than five
years).
VerDate Sep<11>2014
19:55 May 06, 2021
Jkt 253001
enhanced surveillance tool does not
include trade-through summary counts.9
However, the Exchange will continue to
provide trade-through summaries
through its Nasdaq Regulation
Reconnaissance Service (‘‘Reg Recon’’),
which provides participating
subscribers with real-time surveillance
alerts and market data to assist with
their Regulation National Market
System (‘‘NMS’’) compliance.10
Approximately 94% of firms with
InterACT either also subscribe to Reg
Recon or are not impacted by the
elimination of trade-through summaries.
Additionally, Post-Trade Risk
Management, an add-on service to
Workstation [sic], will be used by
clearing firms in a similar fashion as
Risk Management—as an add-on service
to WorkX to monitor and control
correspondent trading access on the
Nasdaq Exchange and the FINRA/
Nasdaq TRF. The re-platformed product
will not take away from user
functionality and will improve the
user’s experience by allowing the user
to create more customizations to manage
risk exposure.
The Exchange is proposing to amend
Equity 7, Section 115 to add WorkX to
the services related to the FINRA/
Nasdaq TRF. Currently, the Exchange
assesses a fee of $525 per logon per
month for the Workstation and $225 per
month for the ACT Trade History
service, which provides searchable
access to a member’s trades that are
older than six months dating back to
2009. However, WorkX will provide
query access to a member’s trades older
than one year and dating back to no
more than five years. The Exchange
reduced the length of the searchable
historical data to improve WorkX
system processing while maintaining
compliance with record-keeping rules
for accessible transaction data pursuant
to the Act. Nasdaq is proposing the
same pricing structure for WorkX as it
currently has for Workstation.11
The Exchange is also proposing to
adopt Equity 7, Sections 116–A and
149–A to incorporate Post-Trade Risk
Management and Real-Time Stats,
respectively, into the Exchange’s pricing
schedule. Clearing brokers using PostTrade Risk Management will be
assessed a charge of $0.030 per side per
trade that is monitored by Post-Trade
9 InterACT, unlike Real-Time Stats, currently
provides Regulation NMS trade-through summaries.
10 See Equity 7, Section 141 (providing for Nasdaq
Regulation Reconnaissance Service and setting forth
the subscription fee).
11 Similar to the Workstation, WorkX customers
will be subject to query charges pursuant to FINRA
Rule 7620A (Other Fees (Not Applicable to Retail
Participants)).
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
24687
Risk Management and a charge of
$17.25 per month per correspondent
executing broker monitored by PostTrade Risk Management, up to a
maximum charge of $7,500 per month
per correspondent executing broker.
Clearing brokers with less than 17,000
trades per month per correspondent
executing broker and that fall below 50
total correspondents monitored during
the month are assessed a monthly fee of
$500 per correspondent executing
broker monitored in lieu of the $0.030
per side per trade charge. These fees are
the same as the fees currently assessed
for Risk Management. Currently,
InterACT is available for a subscription
fee of $400 per month, per user, with a
maximum fee of $2,400 per month, per
member firm. Nasdaq Real-Time Stats,
which will not include summaries of
the total number of Regulation NMS
trade-throughs, will be assessed the
same fees as InterACT. Other than
reducing the length of historical data,
the new platform will not take away
from user functionality.
As Nasdaq rolls out these enhanced
products,12 users will have the option of
using both the current products and the
re-platformed products for the first
month of accessing the re-platformed
products. Fees for the re-platformed
products will be waived for the first
month of usage. After the first month of
service on each of the re-platformed
products, a member firm will be
expected to fully migrate to the new
product and will be charged for any fees
incurred for using the new products
thereafter. Firms will have at least one
year before the existing products are
retired. Once all current participants
have migrated to the new products, the
Exchange will submit a future filing to
retire the services and remove the
Workstation, InterACT and Risk
Management products from its fee
schedule.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,13 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,14 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,
12 WorkX and Real-Time Stats launched on April
12, 2021 and Post-Trade Risk Management will
launch no later than Q3 2021. Nasdaq will publish
an Equity Trade Alert at least 10 days prior to
launching Post-Trade Risk Management.
13 15 U.S.C. 78f(b).
14 15 U.S.C. 78f(b)(4) and (5).
E:\FR\FM\07MYN1.SGM
07MYN1
24688
Federal Register / Vol. 86, No. 87 / Friday, May 7, 2021 / Notices
issuers, brokers, or dealers. The
proposal is also designed to promote
just and equitable principles of trade, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general to protect investors and the
public interest. Additionally, the
proposal is consistent with Section 11A
of the Act relating to the establishment
of the national market system for
securities.
In particular, the Exchange believes
that the proposal to rename, enhance,
and in some instances, alter the scope
of the current products, through the new
re-platformed products and charge fees
to users of these new products is
reasonable and not unfairly
discriminatory because the fees will
remain the same as the current
Workstation, InterACT and Risk
Management products as users migrate
to using the re-platformed products. For
the same reason, the Exchange believes
that the proposed changes remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, constitute
an equitable allocation of fees, and
protect investors and the public interest
because under each individually
proposed rule, a member firm who
would migrate to the new products will
receive enhanced services that will
improve the user’s experience using the
products, but will be charged the same
fee amount as the firm currently pays
for the respective current products.
Although the Exchange has changed the
time period for query access to
members’ trades through WorkX and
has removed summaries for the total
number of Regulation NMS tradethroughs on Real-Time Stats, the
Exchange believes that the proposed
changes are both equitably allocated,
reasonable and protects investors and
the public interest because WorkX
provides the enhanced functionalities to
FINRA/Nasdaq TRF Participants for
trade reporting while maintaining
compliance with record-keeping rules
for accessible transaction data pursuant
to the Act,15 and the change to RealTime Stats does not take away from the
user’s ability to monitor and maintain
compliance with FINRA rules.
Moreover, these changes are balanced
by the enhancements that users will
receive from the re-platformed WorkX
and Real-Time Stats products.
The Exchange believes that the
proposal is not unfairly discriminatory.
All member firms will be notified about
the product availability, have access to
the re-platformed products and will be
15 See
17 CFR 240.17a–1(b).
VerDate Sep<11>2014
19:55 May 06, 2021
required to fully migrate once the
Exchange discontinues the current
products. If a firm is not satisfied with
product differences, the firm will have
at least a year before the existing
product is retired to find an alternate
service offered by a third party or allow
time for Nasdaq to enhance the product.
Moreover, the fees for the re-platformed
products will apply to all member firms
in the same manner as the current
products.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
Intramarket Competition
The Exchange does not believe that its
proposals will place any category of
Exchange participant at a competitive
disadvantage. To the contrary, the
proposed changes will provide
opportunities for members to receive
enhanced features of their current
Workstation, InterACT and Risk
Management products. Moreover, these
enhanced products, which are available
to any participant, will provide a more
user-friendly and efficient product
experience for the same fees as the
current products. Although Real-Time
Stats does not provide the total number
of Regulation NMS trade-throughs, this
will not place any category of Exchange
participants at a competitive
disadvantage because historically,
participants have utilized this
surveillance tool to maintain
compliance with FINRA trading rules.
Real-Time Stats offers an enhancement
of the FINRA surveillance tool.
Moreover, participants who want to
surveil for SEC rules may obtain the Reg
Recon surveillance tool, which includes
summaries of the total number of
Regulation NMS trade-throughs.
Additionally, the Exchange is reducing
the length of its historical data to
improve WorkX system processing
while maintaining compliance with
record-keeping rules pursuant to the
Act.16 Although WorkX does not [sic]
provide query access to a member’s
trades older than one year and dating
back to no more than five years, this
change will not take away from user
functionality.
Intermarket Competition
The Exchange believes that its
proposed modifications to its fee
schedule will not impose any burden on
16 See
Jkt 253001
PO 00000
supra n. 8.
Frm 00107
Fmt 4703
Sfmt 4703
competition because the launch of the
Exchange’s enhanced connectivity,
surveillance and risk management
services are reflective of the need for the
Exchange to ensure that it provides the
best products and the benefit member
firms receive from these enhancements.
The Exchange notes that it operates in
a highly competitive market in which
market participants can readily favor
competing providers of third-party
services if they deem the re-platformed
products and services to be insufficient,
or products available by other vendors
to be more favorable. The proposed fees
for the re-platformed products are
reflective of this competition. As
discussed above, the Exchange has
proposed the fees to be the same as the
current products.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 17 and Rule 19b–
4(f)(6) thereunder.18
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
17 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change, along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
18 17
E:\FR\FM\07MYN1.SGM
07MYN1
Federal Register / Vol. 86, No. 87 / Friday, May 7, 2021 / Notices
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. 2021–09646 Filed 5–6–21; 8:45 am]
Electronic Comments
BILLING CODE 8011–01–P
• 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–2021–025 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–2021–025. 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–2021–025 and
should be submitted on or before May
28, 2021.
VerDate Sep<11>2014
19:55 May 06, 2021
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
J. Matthew DeLesDernier,
Assistant Secretary.
Jkt 253001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–91740; File No. SR–ICEEU–
2021–011]
24689
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
Self-Regulatory Organizations; ICE
Clear Europe Limited; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to
Amendments to the ICE Clear Europe
Delivery Procedures
May 3, 2021.
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 April 28,
2021, 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 prepared primarily by ICE
Clear Europe. ICE Clear Europe filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(4)(ii) 4 thereunder, such that
the proposed rule was immediately
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The principal purpose of the
proposed amendments is for ICE Clear
Europe to amend its Delivery
Procedures (the ‘‘Delivery Procedures’’)
in connection with the addition of
delivery terms relating to the Ice
Deliverable UK Emissions Contracts.5
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
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(a).
4 17 CFR 240.19b–4(f)(4)(ii).
5 Capitalized terms used but not defined herein
have the meaning specified in the ICE Clear Europe
Clearing Rules (the ‘‘Rules’’).
1 15
PO 00000
Frm 00108
Fmt 4703
Sfmt 4703
ICE Clear Europe is proposing to
amend its Delivery Procedures to add a
new Part A1 regarding delivery
procedures relating to a new ICE
Deliverable UK Emissions Futures
Contracts (‘‘ICE Deliverable UK
Emissions Contracts’’), which include
ICE Futures UKA Auction Contracts,
ICE Futures UKA Futures Contracts and
ICE Futures UKA Daily Contracts, that
would be traded on ICE Futures Europe
and cleared by ICE Clear Europe.
Proposed Part A1 would set out the
delivery specifications and procedures
for deliveries under the ICE Deliverable
UK Emissions Contracts.
Proposed Part A1 would apply to ICE
Deliverable UK Emissions Contracts
which go to physical delivery on the
expiry date and provides that deliveries
under ICE Deliverable UK Emissions
Contracts are effected upon (i) in the
case of Seller effecting delivery, the
completion of the transfer of the
relevant UK Carbon Emissions
Allowances, or ‘‘UKAs’’, from the
relevant Nominating Holding Account
of the Seller to the relevant Nominating
Holding Account of the Clearing House,
and (ii) in the case of the Buyer taking
delivery, the completion of the transfer
of the relevant UKAs from the
Nominating Holding Account of the
Clearing House to the relevant
Nominating Holding Account of the
Buyer. Such delivery takes place during
the Delivery Period for the relevant
Emissions Contracts in accordance with
the ICE Futures Europe Rules. UKAs to
be delivered must conform to the
specifications in ICE Futures Europe
Rules and the registry through which
delivery may be made.
Proposed Part A1 would address
certain the responsibilities of the
Clearing House and relevant parties for
delivery under the ICE Deliverable UK
Emissions Contracts. Routine delivery of
ICE UKA Auction Contracts would be
based on submission of delivery
intentions via the Clearing House ECS
system.
Proposed Part A1 would further
specify the pricing for delivery under
E:\FR\FM\07MYN1.SGM
07MYN1
]]>Agencies
[Federal Register Volume 86, Number 87 (Friday, May 7, 2021)]
[Notices]
[Pages 24685-24689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-09646]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-91744; File No. SR-NASDAQ-2021-025]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Connectivity, Surveillance and Risk Management Services and
Fees
May 3, 2021.
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 April 20, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II below, which Items have been prepared by the Exchange.
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend certain rules relating to
connectivity, surveillance and risk management services fees. More
specifically, the Exchange is proposing to amend Equity 7, Section 115
and adopt Equity 7, Sections 116-A and 149-A to incorporate these new
products into the Exchange's pricing schedule.
While these amendments are effective upon filing, the Exchange has
designated Equity 7, Section 116-A to be operative no later than Q3
2021.\3\
---------------------------------------------------------------------------
\3\ As discussed in more detail throughout the filing, WorkX and
Real-Time Stats launched on April 12, 2021 and Post-Trade Risk
Management will launch no later than Q3 2021. Nasdaq will publish an
Equity Trade Alert at least 10 days prior to launching Post-Trade
Risk Management.
---------------------------------------------------------------------------
The text of the proposed rule change is set forth below. Proposed
new language is italicized; deleted text is in brackets.
* * * * *
Section 115. Ports and Services [dagger]
The charges under this section are assessed by Nasdaq for
connectivity to services and the following systems operated by
Nasdaq or FINRA: The Nasdaq Market Center, FINRA Trade Reporting and
Compliance Engine (TRACE), the FINRA/Nasdaq Trade Reporting
Facility, FINRA's OTCBB Service, and the FINRA OTC Reporting
Facility (ORF). The following fees are not applicable to The Nasdaq
Options Market LLC. For related options fees for Ports and other
Services refer to Options 7, Section 3 of the Options Rules.
[[Page 24686]]
(a)-(d) No change.
(e) Specialized Services Related to FINRA/Nasdaq Trade Reporting
Facility.
WebLink ACT or Nasdaq................ $525.00/month.
Workstation Post Trade............... A subscription includes: The
Trade Reporting File Upload
service, which allows members to
upload multiple trade reports in
batches to ACT; and the ACT
Reject Scan service, which
provides a list of all of a
member's rejected ACT trade
entries and a copy of each
rejected trade report form
submitted to ACT.
$225 per month for the ACT Trade
History service which provides
searchable access to a member's
trades that are older than six
months dating back to 2009.
ACT Workstation...................... $525/logon/month.
$225 per month for the ACT Trade
History service which provides
searchable access to a member's
trades that are older than six
months dating back to 2009.
Nasdaq WorkX......................... $525/logon/month.
$225 per month for the ACT Trade
History service which provides
searchable access to a member's
trades that are older than one
year dating back five years. For
customers using both Act
Workstation and Nasdaq WorkX,
fees for Nasdaq WorkX will be
waived for the first month of
service.
(f)-(j) No change.
[dagger] Fees are assessed in full month increments under this
section, and thus are not prorated.
* * * * *
Section 116. Nasdaq Risk Management
(a) Clearing brokers using the Nasdaq Risk Management Service
will be assessed a charge of $0.030 per side per trade monitored by
Nasdaq Risk Management and a charge of $17.25 per month per
correspondent executing broker monitored by Nasdaq Risk Management,
up to a maximum charge of $7,500 per month per correspondent
executing broker. Clearing brokers with less than 17,000 trades per
month per correspondent executing broker and that fall below 50
total correspondents monitored during the month are assessed a
monthly fee of $500 per correspondent executing broker monitored in
lieu of the $0.030 per side per trade charge.
(b)-(c) No change.
Section 116-A. Nasdaq Post-Trade Risk Management
(a) Clearing brokers using the Nasdaq Post-Trade Risk Management
Service will be assessed a charge of $0.030 per side per trade
monitored by Nasdaq Post-Trade Risk Management and a charge of
$17.25 per month per correspondent executing broker monitored by
Nasdaq Post-Trade Risk Management, up to a maximum charge of $7,500
per month per correspondent executing broker. Clearing brokers with
less than 17,000 trades per month per correspondent executing broker
and that fall below 50 total correspondents monitored during the
month are assessed a monthly fee of $500 per correspondent executing
broker monitored in lieu of the $0.030 per side per trade charge.
For customers using both Nasdaq Risk Management and Nasdaq Post-
Trade Risk Management, fees for Nasdaq Post-Trade Risk Management
will be waived for the first month of service.
* * * * *
Section 149. Nasdaq InterACT
Nasdaq InterACT is a surveillance tool that provides summaries
of a subscribing member's trade activity for the FINRA/Nasdaq Trade
Reporting Facility. Such summaries include the total number of
trades that have been reported to the Facility, various statistics
associated with those trades reported (including: declines, cancels,
stepouts, as-ofs, etc), the total number of trades that must be
reviewed for acceptance, and the total number of Regulation NMS
trade throughs. ``FINRA/Nasdaq Trade Reporting Facility'' shall mean
the FINRA/Nasdaq TRF Carteret and the FINRA/Nasdaq TRF Chicago.
InterACT is available for a subscription fee of $400 per month,
per user, with a maximum fee of $2,400 per month, per member firm.
Section 149-A. Nasdaq Real-Time Stats
Nasdaq Real-Time Stats is a surveillance tool that provides
summaries of a subscribing member's trade activity for the FINRA/
Nasdaq Trade Reporting Facility to support compliance with FINRA
rules. Such summaries include the total number of trades that have
been reported to the Facility, various statistics associated with
those trades reported (including: Declines, cancels, stepouts, as-
ofs, etc), and the total number of trades that must be reviewed for
acceptance. ``FINRA/Nasdaq Trade Reporting Facility'' shall mean the
FINRA/Nasdaq TRF Carteret and the FINRA/Nasdaq TRF Chicago.
Real-Time Stats is available for a subscription fee of $400 per
month, per user, with a maximum fee of $2,400 per month, per member
firm. For customers using both Nasdaq InterACT and Nasdaq Real-Time
Stats, fees for Nasdaq Real-Time Stats will be waived for the first
month of service.
* * * * *
(b) Not applicable.
(c) Not applicable.
* * * * *
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
Nasdaq has re-platformed three of its products for trade reporting,
surveillance and risk management services--(1) ACT Workstation
(``Workstation''),\4\ (2) Nasdaq InterACT (``InterACT'') \5\ and (3)
Nasdaq Risk Management (``Risk Management'').\6\ These products will be
renamed (1) Nasdaq WorkX\TM\ (``WorkX''), (2) Nasdaq Real-Time Stats
(``Real-Time Stats'') and (3) Nasdaq Post-Trade Risk Management
(``Post-Trade Risk Management''), respectively.\7\ The Exchange is
proposing to amend Equity 7, Section 115 and adopt Equity 7, Sections
116-A and 149-A to incorporate these new products into the Exchange's
pricing schedule.
---------------------------------------------------------------------------
\4\ Workstation is a web-based application that electronically
facilitates trade reporting and clearing functions for trades
reported to the FINRA/Nasdaq TRF. Workstation services include trade
entry, trade scan, and uploads for bulk trade entry to support
FINRA/Nasdaq TRF participant trade reporting in accordance with
Financial Industry Regulatory Authority (``FINRA'') rules.
\5\ InterACT is a real-time compliance tool that assists firms
with regulatory supervision of trade activity reported to the FINRA/
Nasdaq TRF. InterACT summarizes and consolidates data for over the
counter trade reports to help customers comply with FINRA rules.
\6\ Risk Management is a Workstation add-on service which allows
correspondent clearing firms to manage credit risk exposure by
offering real-time monitoring against limit settings and activity
trade controls.
\7\ As discussed below, once all current participants have
migrated to the re-platformed products, the Exchange will submit a
future filing to retire the services and remove Workstation,
InterACT and Risk Management products from its fee schedule.
---------------------------------------------------------------------------
Similar to the Workstation, WorkX is a web-based application that
will facilitate trade reporting and clearing functions for the FINRA/
Nasdaq Trade Reporting Facility Carteret (the ``FINRA/Nasdaq TRF
Carteret'') and the FINRA/Nasdaq Trade Reporting Facility
[[Page 24687]]
Chicago (the ``FINRA/Nasdaq TRF Chicago'') (collectively, the ``FINRA/
Nasdaq TRF''). WorkX's infrastructure is designed to be more user-
friendly than the current Workstation. For example, WorkX trade scan
provides holistic search capabilities for all trade input fields,
across one date or date ranges for successful and rejected trades with
up to 10,000 results generated in the front end and 50,000 exportable
results. Currently, Workstation offers multiple scan types with limited
search criteria and generates up to 2,000 results per scan.
Additionally, WorkX revamps the user interface with a more modern
design, upgraded data visualization and improved user experience. More
specifically, WorkX improves trade entry by limiting manual customer
entries, which eliminates data entry errors and replaces manual entries
with automated processing. However, unlike Workstation, which currently
provides searchable access to a member's trades that are older than six
months dating back to 2009, WorkX will provide query access to a
member's trades that are older than one year and dating back to no more
than five years. The Exchange reduced the length of its historical data
to improve WorkX system processing while maintaining compliance with
record-keeping rules for accessible transaction data pursuant to the
Act.\8\ Other than reducing the length of historical data, the new
platform will not have any significant effect on the user's usage of
WorkX relative to Workstation.
---------------------------------------------------------------------------
\8\ See 17 CFR 240.17a-1(b) (requiring every national securities
exchange, national securities association, registered clearing
agency and the Municipal Securities Rulemaking Board to keep and
preserve at least one copy of all documents, including all
correspondence, memoranda, papers, books, notices, accounts, and
other such records as shall be made or received by it in the course
of its business as such and in the conduct of its self-regulatory
activity, for a period of not less than five years).
---------------------------------------------------------------------------
InterACT, a surveillance tool that provides summaries of a
subscribing member's trade activity for the FINRA/Nasdaq TRF, has been
re-platformed and enhanced to become Nasdaq Real-Time Stats, which
includes enriched data visualization and drill through capabilities to
scan trade activity details. Similar to InterACT, which is an add-on
service available on Workstation, Real-Time Stats is an add-on service
that is available on WorkX. Currently, the InterACT add-on service is
utilized by members who are responsible for the accuracy and timeliness
of trade reporting and compliance with FINRA rules. Because Real-Time
Stats is intended for FINRA trade reporting compliance, this enhanced
surveillance tool does not include trade-through summary counts.\9\
However, the Exchange will continue to provide trade-through summaries
through its Nasdaq Regulation Reconnaissance Service (``Reg Recon''),
which provides participating subscribers with real-time surveillance
alerts and market data to assist with their Regulation National Market
System (``NMS'') compliance.\10\ Approximately 94% of firms with
InterACT either also subscribe to Reg Recon or are not impacted by the
elimination of trade-through summaries.
---------------------------------------------------------------------------
\9\ InterACT, unlike Real-Time Stats, currently provides
Regulation NMS trade-through summaries.
\10\ See Equity 7, Section 141 (providing for Nasdaq Regulation
Reconnaissance Service and setting forth the subscription fee).
---------------------------------------------------------------------------
Additionally, Post-Trade Risk Management, an add-on service to
Workstation [sic], will be used by clearing firms in a similar fashion
as Risk Management--as an add-on service to WorkX to monitor and
control correspondent trading access on the Nasdaq Exchange and the
FINRA/Nasdaq TRF. The re-platformed product will not take away from
user functionality and will improve the user's experience by allowing
the user to create more customizations to manage risk exposure.
The Exchange is proposing to amend Equity 7, Section 115 to add
WorkX to the services related to the FINRA/Nasdaq TRF. Currently, the
Exchange assesses a fee of $525 per logon per month for the Workstation
and $225 per month for the ACT Trade History service, which provides
searchable access to a member's trades that are older than six months
dating back to 2009. However, WorkX will provide query access to a
member's trades older than one year and dating back to no more than
five years. The Exchange reduced the length of the searchable
historical data to improve WorkX system processing while maintaining
compliance with record-keeping rules for accessible transaction data
pursuant to the Act. Nasdaq is proposing the same pricing structure for
WorkX as it currently has for Workstation.\11\
---------------------------------------------------------------------------
\11\ Similar to the Workstation, WorkX customers will be subject
to query charges pursuant to FINRA Rule 7620A (Other Fees (Not
Applicable to Retail Participants)).
---------------------------------------------------------------------------
The Exchange is also proposing to adopt Equity 7, Sections 116-A
and 149-A to incorporate Post-Trade Risk Management and Real-Time
Stats, respectively, into the Exchange's pricing schedule. Clearing
brokers using Post-Trade Risk Management will be assessed a charge of
$0.030 per side per trade that is monitored by Post-Trade Risk
Management and a charge of $17.25 per month per correspondent executing
broker monitored by Post-Trade Risk Management, up to a maximum charge
of $7,500 per month per correspondent executing broker. Clearing
brokers with less than 17,000 trades per month per correspondent
executing broker and that fall below 50 total correspondents monitored
during the month are assessed a monthly fee of $500 per correspondent
executing broker monitored in lieu of the $0.030 per side per trade
charge. These fees are the same as the fees currently assessed for Risk
Management. Currently, InterACT is available for a subscription fee of
$400 per month, per user, with a maximum fee of $2,400 per month, per
member firm. Nasdaq Real-Time Stats, which will not include summaries
of the total number of Regulation NMS trade-throughs, will be assessed
the same fees as InterACT. Other than reducing the length of historical
data, the new platform will not take away from user functionality.
As Nasdaq rolls out these enhanced products,\12\ users will have
the option of using both the current products and the re-platformed
products for the first month of accessing the re-platformed products.
Fees for the re-platformed products will be waived for the first month
of usage. After the first month of service on each of the re-platformed
products, a member firm will be expected to fully migrate to the new
product and will be charged for any fees incurred for using the new
products thereafter. Firms will have at least one year before the
existing products are retired. Once all current participants have
migrated to the new products, the Exchange will submit a future filing
to retire the services and remove the Workstation, InterACT and Risk
Management products from its fee schedule.
---------------------------------------------------------------------------
\12\ WorkX and Real-Time Stats launched on April 12, 2021 and
Post-Trade Risk Management will launch no later than Q3 2021. Nasdaq
will publish an Equity Trade Alert at least 10 days prior to
launching Post-Trade Risk Management.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\13\ in general, and furthers the objectives of
Sections 6(b)(4) and 6(b)(5) of the Act,\14\ 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,
[[Page 24688]]
issuers, brokers, or dealers. The proposal is also designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
Additionally, the proposal is consistent with Section 11A of the Act
relating to the establishment of the national market system for
securities.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78f(b).
\14\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
In particular, the Exchange believes that the proposal to rename,
enhance, and in some instances, alter the scope of the current
products, through the new re-platformed products and charge fees to
users of these new products is reasonable and not unfairly
discriminatory because the fees will remain the same as the current
Workstation, InterACT and Risk Management products as users migrate to
using the re-platformed products. For the same reason, the Exchange
believes that the proposed changes remove impediments to and perfect
the mechanism of a free and open market and a national market system,
constitute an equitable allocation of fees, and protect investors and
the public interest because under each individually proposed rule, a
member firm who would migrate to the new products will receive enhanced
services that will improve the user's experience using the products,
but will be charged the same fee amount as the firm currently pays for
the respective current products. Although the Exchange has changed the
time period for query access to members' trades through WorkX and has
removed summaries for the total number of Regulation NMS trade-throughs
on Real-Time Stats, the Exchange believes that the proposed changes are
both equitably allocated, reasonable and protects investors and the
public interest because WorkX provides the enhanced functionalities to
FINRA/Nasdaq TRF Participants for trade reporting while maintaining
compliance with record-keeping rules for accessible transaction data
pursuant to the Act,\15\ and the change to Real-Time Stats does not
take away from the user's ability to monitor and maintain compliance
with FINRA rules. Moreover, these changes are balanced by the
enhancements that users will receive from the re-platformed WorkX and
Real-Time Stats products.
---------------------------------------------------------------------------
\15\ See 17 CFR 240.17a-1(b).
---------------------------------------------------------------------------
The Exchange believes that the proposal is not unfairly
discriminatory. All member firms will be notified about the product
availability, have access to the re-platformed products and will be
required to fully migrate once the Exchange discontinues the current
products. If a firm is not satisfied with product differences, the firm
will have at least a year before the existing product is retired to
find an alternate service offered by a third party or allow time for
Nasdaq to enhance the product. Moreover, the fees for the re-platformed
products will apply to all member firms in the same manner as the
current products.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
Intramarket Competition
The Exchange does not believe that its proposals will place any
category of Exchange participant at a competitive disadvantage. To the
contrary, the proposed changes will provide opportunities for members
to receive enhanced features of their current Workstation, InterACT and
Risk Management products. Moreover, these enhanced products, which are
available to any participant, will provide a more user-friendly and
efficient product experience for the same fees as the current products.
Although Real-Time Stats does not provide the total number of
Regulation NMS trade-throughs, this will not place any category of
Exchange participants at a competitive disadvantage because
historically, participants have utilized this surveillance tool to
maintain compliance with FINRA trading rules. Real-Time Stats offers an
enhancement of the FINRA surveillance tool. Moreover, participants who
want to surveil for SEC rules may obtain the Reg Recon surveillance
tool, which includes summaries of the total number of Regulation NMS
trade-throughs. Additionally, the Exchange is reducing the length of
its historical data to improve WorkX system processing while
maintaining compliance with record-keeping rules pursuant to the
Act.\16\ Although WorkX does not [sic] provide query access to a
member's trades older than one year and dating back to no more than
five years, this change will not take away from user functionality.
---------------------------------------------------------------------------
\16\ See supra n. 8.
---------------------------------------------------------------------------
Intermarket Competition
The Exchange believes that its proposed modifications to its fee
schedule will not impose any burden on competition because the launch
of the Exchange's enhanced connectivity, surveillance and risk
management services are reflective of the need for the Exchange to
ensure that it provides the best products and the benefit member firms
receive from these enhancements. The Exchange notes that it operates in
a highly competitive market in which market participants can readily
favor competing providers of third-party services if they deem the re-
platformed products and services to be insufficient, or products
available by other vendors to be more favorable. The proposed fees for
the re-platformed products are reflective of this competition. As
discussed above, the Exchange has proposed the fees to be the same as
the current products.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-
4(f)(6) thereunder.\18\
---------------------------------------------------------------------------
\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change, along
with a brief description and text of the proposed rule change, at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
[[Page 24689]]
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-2021-025 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-2021-025. 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-2021-025 and should be submitted
on or before May 28, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-09646 Filed 5-6-21; 8:45 am]
BILLING CODE 8011-01-P
