Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule Nasdaq Equity 6, Section 5, 50902-50905 [2022-17746]
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50902
Federal Register / Vol. 87, No. 159 / Thursday, August 18, 2022 / Notices
All submissions should refer to File
Number SR–FINRA–2022–025. 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 FINRA. 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–FINRA–
2022–025 and should be submitted on
or before September 8, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.26
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–17745 Filed 8–17–22; 8:45 am]
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to codify certain practices and
requirements related to the Exchange’s
port message rate thresholds. The
proposed rule change was published for
comment in the Federal Register on
February 9, 2022.3 On March 23, 2022,
pursuant to Section 19(b)(2) of the Act,4
the Commission designated a longer
period within which to approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether to
disapprove the proposed rule change.5
On May 10, 2022, the Commission
instituted proceedings under Section
19(b)(2)(B) of the Act 6 to determine
whether to approve or disapprove the
proposed rule change.7 The Commission
has received no comment letters on the
proposed rule change. On July 21, 2022,
the Exchange withdrew the proposed
rule change (CboeEDGX–2022–004).
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–17748 Filed 8–17–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95495; File No. SR–
NASDAQ–2022–047]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Rule
Nasdaq Equity 6, Section 5
BILLING CODE 8011–01–P
August 12, 2022.
SECURITIES AND EXCHANGE
COMMISSION
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 8,
2022, The Nasdaq Stock Market LLC
[Release No. 34–95497; File No. SR–
CboeEDGX–2022–004]
khammond on DSKJM1Z7X2PROD with NOTICES
1 15
Self-Regulatory Organizations; Cboe
EDGX Exchange, Inc.; Notice of
Withdrawal of a Proposed Rule Change
To Codify Certain Practices and
Requirements Related to the
Exchange’s Port Message Rate
Thresholds
August 12, 2022.
On January 21, 2022, Cboe EDGX
Exchange, Inc. (‘‘Exchange’’) filed with
the Securities and Exchange
26 17
CFR 200.30–3(a)(12).
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 94144
(February 3, 2022), 87 FR 7519.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 94496,
87 FR 18410 (March 30, 2022). The Commission
designated May 10, 2022 as the date by which the
Commission shall approve or disapprove, or
institute proceedings to determine whether to
disapprove, the proposed rule change.
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 94883,
87 FR 29776 (May 16, 2022).
8 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
2 17
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(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III, below, which Items have been
prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule Nasdaq Equity 6, Section 5 (Risk
Settings) to provide Participants with
additional optional settings.
The text of the proposed rule change
is available on the Exchange’s website at
https://listingcenter.nasdaq.com/
rulebook/nasdaq/rules, 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 purpose of the proposed rule
changes under Rule Nasdaq Equity 6,
Section 5 (Risk Settings) is to provide
Participants 3 with additional optional
settings to assist them in their efforts to
3 Pursuant to Rule Nasdaq Equity 1, Section
1(a)(5), a ‘‘Participant’’ is defined as an entity that
fulfills the obligations contained in Equity 2,
Section 3 regarding participation in the System, and
shall include: (1) ‘‘Nasdaq ECNs,’’ members that
meet all of the requirements of Equity 2, Section 14,
and that participates in the System with respect to
one or more System Securities; (2) ‘‘Nasdaq Market
Makers’’ or ‘‘Market Makers’’, members that are
registered as Nasdaq Market Makers for purposes of
participation in the System on a fully automated
basis with respect to one or more System securities;
and (3) ‘‘Order Entry Firms,’’ members that are
registered as Order Entry Firms for purposes of
entering orders in System Securities into the
System. This term shall also include any Electronic
Communications Network or Alternative Trading
System (as such terms are defined in Regulation
NMS) that fails to meet all the requirements of
Equity 2, Section 14.
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Federal Register / Vol. 87, No. 159 / Thursday, August 18, 2022 / Notices
manage risk on their order flow. These
additional settings provide participants
with extra oversight and controls on
orders coming into the exchange. Once
the optional risk controls are set, the
Exchange is authorized to take
automated action if a designated risk
level for a Participant is exceeded. Such
risk settings would provide Participants
with enhanced abilities to manage their
risk with respect to orders on the
Exchange.
All proposed risk settings are optional
for Participants and afford flexibility to
Participants to select their own risk
tolerance levels. The proposed new and
amended risk settings are as follows.
The Exchange is proposing to add an
additional risk setting titled ‘‘Restricted
Stock List.’’ This control allows a
Participant to restrict the types of
securities transacted by setting a list of
symbols for which orders cannot be
entered. This control also allows to set
an easy to borrow list, which is a list of
symbols for which short sale orders may
be entered. Orders for symbols not on
the easy to borrow list will not be
accepted; however, Participants will
have an option to indicate that short
sales orders are permitted for all
symbols. This setting is similar to
Interpretations and Policies .01(d) of
BZX Rule 11.13.4
The Exchange is proposing to add an
additional risk setting titled ‘‘ADV
Check.’’ This control relates to the size
of an order as compared to the 20 day
consolidated average daily volume 5
(ADV) of the security and allows a
Participant to set a specified percent of
ADV that an order size cannot exceed.
This control also allows a Participant to
specify the minimum value on which
such control is based if the average daily
volume of the securities is below such
value. This setting is similar to
Interpretations and Policies .01(g) of
BZX Rule 11.13.
The Exchange is proposing to add an
additional risk setting titled ‘‘Fat Finger
Protection.’’ This control relates to the
limit price of an order as compared to
the NBBO and includes both
percentage-based and dollar-based
controls. If the limit price of an order
deviates from the NBBO in excess of the
amount set by a Participant (either
percentage or dollar based), the order
will not be accepted. This setting is
similar to Interpretations and Policies
.01(b) of BZX Rule 11.13.
4 See Securities Exchange Act Release No. 80611
(May 5, 2017) 82 FR 22045 (May 11, 2017) (SR–
BatsBZX–2017–24).
5 In certain circumstances, when the security does
not have 20 days of trading history, the ADV Check
is calculated on fewer than 20 data points.
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The Exchange is proposing to add an
additional risk setting titled ‘‘Rate
Thresholds Check.’’ A Participant will
be able to set the maximum number of
messages (other than cancellations, but
including new orders, replacement
orders and modifications) that can be
sent in during a configurable one second
time window set by the Exchange. This
control can be set as a port level or per
symbol. This setting is similar to
Interpretations and Policies .01(f) of
BZX Rule 11.13.
The Exchange is proposing to add an
additional risk setting titled ‘‘Gross
Exposure Check.’’ This control measures
open, executed, or notional exposure of
a Participant on the Exchange; and,
when breached, prevents submission of
all new orders and, optionally, will
cancel all open orders. Gross open order
exposure is measured as the sum of
booked price times size for all open
orders plus the sum of booked price
times size for all open sell orders. Gross
executed order exposure is measured as
the sum of all executed buy and sell
orders. Gross notional order exposure is
measured as the sum of the gross open
exposure and gross executed exposure.
This setting is similar to Interpretations
and Policies .01(h) of BZX Rule 11.13.
The Exchange is proposing to add an
additional risk setting titled ‘‘Market
Impact Check.’’ This optional control, if
enabled, will result in the rejection of a
Participant’s incoming limit order if the
limit price of the order is priced through
the far-side of the current LULD bands.
In other words, a buy (sell) order cannot
be priced more aggressively than the
upper (lower) LULD band.6 The
Exchange notes that pursuant to the
existing LULD requirements, buy orders
priced below the lower price bands (and
vice versa for sell orders) will be
accepted and are eligible for inclusion
in the NBBO; however, these orders are
outside the price bands and will be nonexecutable. If the price bands move in
such a way that an order that was
previously outside the price band is
now inside the band, the order will
become executable.
The Exchange believes that this new
optional setting is similar to the
Exchange’s existing Limit Order
Protection (‘‘LOP’’). LOP is a feature of
the Nasdaq Market Center that prevents
certain Limit Orders at prices outside of
6 The Limit Up-Limit Down (LULD) mechanism is
intended to prevent trades in National Market
System (NMS) securities from occurring outside of
specified price bands. The bands are set at a
percentage level above and below the average
reference price of the security over the immediately
preceding five-minute period. To accommodate
fundamental price moves, there is a five-minute
trading pause if trading is unable to occur within
the specified price band after 15 seconds.
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50903
pre-set standard limits (‘‘LOP Limit’’)
from being accepted by the System.7
LOP is operational each trading day,
except for orders designated for
opening, re-opening, closing and halt
crosses. LOP does not apply in the event
that there is no established LOP
Reference Price.8 LOP is applicable on
all order entry protocols.9 While the
current LULD functionality would
continue to apply, this additional
proposed risk setting would allow a
Participant to manage its risk more
comprehensively.
The Exchange is also proposing to
amend two existing risk settings titled,
ISO Control and Duplication Control.
Currently, pursuant to Nasdaq Equity
6, Section 5(j), the Duplication control
will automatically reject an order that a
Participant submits to the Exchange to
the extent that it is duplicative of
another order that the Participant
submitted to the Exchange during the
prior five seconds. The Exchange
proposes to provide additional
flexibility for Participants by allowing
the interval applicable to this risk check
to vary from one to thirty seconds, as set
by a Participant. This setting is similar
to Interpretations and Policies .01(e) of
BZX Rule 11.13.
Pursuant to Nasdaq Equity 6, Section
5(b), ISO Control setting prevents a
Participant from entering an ISO order
onto the Exchange. The Exchange
proposes to expand this setting to allow
a Participant to restrict additional order
types from being entered. Specifically, a
Participant may restrict their ability to
place any of the following: ISO Orders
(as currently provided by this risk
setting), short sale orders, non-auction
market orders, pre-market orders or
post-market orders. The Exchange
proposes to change the title of this risk
setting to Order Type/Attribution Check
to better reflect its substance, as
amended. This setting is similar to
Interpretations and Policies .01(c) of
BZX Rule 11.13.
As currently provided for existing risk
settings, the Exchange will share any
Participant risk settings in the trading
system that are specified Rule Nasdaq
Equity 6, Section 5, with the clearing
member that clears transactions on
7 The LOP Limit is the greater of 10% of the LOP
Reference Price or $0.50 for all securities across all
trading sessions. The LOP Reference Price is the
current National Best Bid or Best Offer, the bid for
sell orders and the offer for buy orders.
8 For example, if there is a one-sided quote or if
the NBB, when used as the LOP Reference Price,
is equal to or less than $0.50.
9 Nasdaq maintains several communications
protocols for Participants to use in entering Orders
and sending other messages to the Nasdaq Market
Center, such as: OUCH, RASH, QIX, FLITE and FIX.
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Federal Register / Vol. 87, No. 159 / Thursday, August 18, 2022 / Notices
behalf of the Participant even if the
clearing member is not designated.
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Implementation
The Exchange intends to implement
of the proposed rule changes on or
before December 30, 2022. The
Exchange will issue an Equity Trader
Alert to members announcing the exact
date the Exchange will implement the
risk protections.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,10 in general, and furthers the
objectives of Section 6(b)(5) of the Act,11
in particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general to protect
investors and the public interest.
Specifically, the Exchange believes
the proposed amendment will remove
impediments to and perfect the
mechanism of a free and open market
and a national market system because it
provides functionality for a Participant
to manage its risk exposure, while also
maintaining a notification system under
Rule Nasdaq Equity 6, Section 5 that
would help to ensure the Participant
and its clearing member are aware of
developing issues.
A clearing member guarantees
transactions executed on Nasdaq for
members with whom it has entered into
a clearing arrangement, and therefore
bears the risk associated with those
transactions. The Exchange therefore
believes that it is appropriate for the
clearing member to have knowledge of
what risk settings the Participant may
utilize within the Exchange’s trading
system, as well as the option to set and
adjust the risk levels. The proposal will
permit clearing members who have a
financial interest in the risk settings of
Participants with whom the Participants
have entered into clearing arrangements
to better monitor and manage the
potential risks assumed by clearing
members, thereby providing clearing
members with greater control and
flexibility over setting their own risk
tolerance and exposure and aiding
clearing members in complying with the
Act.
In addition, the Exchange believes
that the proposed amendments under
Rule Nasdaq Equity 6, Section 5, are
designed to protect investors and the
public interest because the proposed
functionalities are a form of risk
10 15
11 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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mitigation that will aid Participants and
clearing members in minimizing their
financial exposure and reduce the
potential for disruptive, market-wide
events. The proposed new:
• Gross Executed Check settings are
appropriate measures to serve as an
additional tool for Participants and
clearing members to assist them in
identifying open, executed, or notional
exposure risk;
• Market Impact Check and ADV
check may assist Participants in
avoiding placing orders with
unintentional market impact;
• Rate Thresholds Check may help
alert a Participant to excessive message
traffic that could affect technical port
performance;
• Fat Finger Protection will assist a
Participant in avoiding submission of
orders with unintended price limits or
share sizes;
• Restricted Stock List will assist a
Participant in limiting trading for a
particular security.
The proposed amendments to ISO
Control will a Participant prevent
trading in a particular order type by
expanding the types of orders subject to
this check to pre-market, post-market,
short sales, non-auction market orders.
The proposed amendments to the
Duplication Control will allow a
Participant additional flexibility in
using this control by letting a
Participant to choose the period of time
over which this control applies.
The Exchange also believes the
proposed amendments will assist
Participants and clearing members in
managing their financial exposure
which, in turn, could enhance the
integrity of trading on the securities
markets and help to assure the stability
of the financial system.
Finally, the Exchange believes that
the proposed rule changes do not
unfairly discriminate among the
Exchange’s Participants because use of
the risk settings under Rule Nasdaq
Equity 6, Section 5 are optional and
available to all Participants, and not a
prerequisite for participation on the
Exchange.
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. In fact, the
Exchange believes that the proposal will
have a positive effect on competition
because, it would allow the Exchange to
offer risk management functionality that
is comparable to functionality being
offered by other national securities
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exchanges. Moreover, by providing
Participants and their clearing members
additional means to monitor and control
risk, the proposed rule may increase
confidence in the proper functioning of
the markets and contribute to additional
competition among trading venues and
broker-dealers. Rather than impede
competition, the proposal is designed to
facilitate more robust risk management
by Participants and clearing members,
which, in turn, could enhance the
integrity of trading on the securities
markets and help to assure the stability
of the financial system.
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)(iii) of the Act 12 and
subparagraph (f)(6) of Rule 19b–4
thereunder.13
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
12 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
the Commission written notice of its intent to file
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.
13 17
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Federal Register / Vol. 87, No. 159 / Thursday, August 18, 2022 / Notices
Electronic Comments
khammond on DSKJM1Z7X2PROD with NOTICES
• 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–2022–047 on the subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 95496]
Notice of Intention To Cancel
Registration of Certain Municipal
Advisors
Paper Comments
August 12, 2022.
• 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–2022–047. 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–2022–047 and
should be submitted on or before
September 8, 2022.
Notice is given that the Securities and
Exchange Commission (the
‘‘Commission’’) intends to issue an
order or orders, pursuant to Section
15B(c)(3) of the Securities Exchange Act
of 1934 (the ‘‘Act’’), cancelling the
registrations of the municipal advisors
whose names appear in the attached
Appendix (hereinafter referred to as the
‘‘registrants’’).
Section 15B(c)(3) of the Act provides,
in pertinent part, that if the Commission
finds that any municipal advisor
registered under Section 15B is no
longer in existence or has ceased to do
business as a municipal advisor, the
Commission, by order, shall cancel the
registration of such municipal advisor.
The Commission finds that each
registrant listed in the attached
Appendix:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–17746 Filed 8–17–22; 8:45 am]
BILLING CODE 8011–01–P
14 17
CFR 200.30–3(a)(12).
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(i) has not filed any municipal advisor
form submissions with the Commission
through the Commission’s Electronic Data
Gathering and Retrieval (‘‘EDGAR’’) system
since January 1, 2020 (including but not
limited to the annual amendments (form
MA–A) required by 17 CFR 240.15Ba1–
5(a)(1)); and
(ii) based on information available from the
Municipal Securities Rulemaking Board (the
‘‘MSRB’’), (a) is not registered as a municipal
advisor with the MSRB under MSRB Rule A–
12(a) and/or (b) does not have an associated
person who is qualified as a municipal
advisor representative under MSRB Rule G–
3(d) and for whom there is a Form MA–I
required by 17 CFR 240.15Ba1–2(b) available
on EDGAR, and/or (c) has not, since January
1, 2020, filed with the MSRB any Form A–
12 annual affirmation as required by MSRB
Rule A–12(k).
Accordingly, the Commission finds
that each of the registrants listed in the
attached Appendix either is no longer in
existence or has ceased to do business
as a municipal advisor.
Notice is also given that any
interested person may, by September 12,
2022, at 5:30 p.m. Eastern Time, submit
to the Commission in writing a request
for a hearing on the cancellation of the
registration of any registrant listed in
the attached Appendix, accompanied by
a statement as to the nature of such
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50905
person’s interest, the reason for such
request, and the issues, if any, of fact or
law proposed to be controverted, and
such person may request to be notified
if the Commission should order a
hearing thereon. Any such
communication should be addressed to
the Commission’s Secretary at the
address below.
At any time after September 12, 2022,
the Commission may issue an order or
orders cancelling the registrations of any
or all of the registrants listed in the
attached Appendix, upon the basis of
the information stated above, unless an
order or orders for a hearing on the
cancellation shall be issued upon
request or upon the Commission’s own
motion. Persons who requested a
hearing, or to be advised as to whether
a hearing is ordered, will receive any
notices and orders issued in this matter,
including the date of the hearing (if
ordered) and any postponements
thereof. Any registrant whose
registration is cancelled under delegated
authority may appeal that decision
directly to the Commission in
accordance with Rules 430 and 431 of
the Commission’s rules of practice (17
CFR 201.430 and 431).
Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549.
ADDRESSES:
FOR FURTHER INFORMATION CONTACT:
Mark Elion, Attorney Advisor, Office of
Municipal Securities, 100 F Street NE,
Washington, DC 20549, or at (202) 551–
5680.
For the Commission, by the Office of
Municipal Securities, pursuant to delegated
authority.1
J. Matthew DeLesDernier,
Deputy Secretary.
Appendix
Registrant name
SEC
ID No.
Elzey Consulting Group, LLC ................
Hampel Charles Edward .......................
Harris Housing Advisors LLC ................
IFS Advisory, LLC .................................
Piedmont Securities LLC ......................
Pinnacle Financial Group LLC ..............
Powell Capital Markets, Inc ...................
Public Advisory Consultants, Inc ...........
Rydle Project Funding ...........................
Torain Group .........................................
867–02230
867–01267
867–00840
867–02354
867–00767
867–01379
867–01363
867–00109
867–01908
867–02137
[FR Doc. 2022–17747 Filed 8–17–22; 8:45 am]
BILLING CODE 8011–01–P
1 17
E:\FR\FM\18AUN1.SGM
CFR 200.30–3a(a)(1)(ii).
18AUN1
]]>Agencies
[Federal Register Volume 87, Number 159 (Thursday, August 18, 2022)]
[Notices]
[Pages 50902-50905]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-17746]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95495; File No. SR-NASDAQ-2022-047]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule Nasdaq Equity 6, Section 5
August 12, 2022.
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 8, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III, below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\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 Rule Nasdaq Equity 6, Section 5
(Risk Settings) to provide Participants with additional optional
settings.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 purpose of the proposed rule changes under Rule Nasdaq Equity
6, Section 5 (Risk Settings) is to provide Participants \3\ with
additional optional settings to assist them in their efforts to
[[Page 50903]]
manage risk on their order flow. These additional settings provide
participants with extra oversight and controls on orders coming into
the exchange. Once the optional risk controls are set, the Exchange is
authorized to take automated action if a designated risk level for a
Participant is exceeded. Such risk settings would provide Participants
with enhanced abilities to manage their risk with respect to orders on
the Exchange.
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\3\ Pursuant to Rule Nasdaq Equity 1, Section 1(a)(5), a
``Participant'' is defined as an entity that fulfills the
obligations contained in Equity 2, Section 3 regarding participation
in the System, and shall include: (1) ``Nasdaq ECNs,'' members that
meet all of the requirements of Equity 2, Section 14, and that
participates in the System with respect to one or more System
Securities; (2) ``Nasdaq Market Makers'' or ``Market Makers'',
members that are registered as Nasdaq Market Makers for purposes of
participation in the System on a fully automated basis with respect
to one or more System securities; and (3) ``Order Entry Firms,''
members that are registered as Order Entry Firms for purposes of
entering orders in System Securities into the System. This term
shall also include any Electronic Communications Network or
Alternative Trading System (as such terms are defined in Regulation
NMS) that fails to meet all the requirements of Equity 2, Section
14.
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All proposed risk settings are optional for Participants and afford
flexibility to Participants to select their own risk tolerance levels.
The proposed new and amended risk settings are as follows.
The Exchange is proposing to add an additional risk setting titled
``Restricted Stock List.'' This control allows a Participant to
restrict the types of securities transacted by setting a list of
symbols for which orders cannot be entered. This control also allows to
set an easy to borrow list, which is a list of symbols for which short
sale orders may be entered. Orders for symbols not on the easy to
borrow list will not be accepted; however, Participants will have an
option to indicate that short sales orders are permitted for all
symbols. This setting is similar to Interpretations and Policies .01(d)
of BZX Rule 11.13.\4\
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\4\ See Securities Exchange Act Release No. 80611 (May 5, 2017)
82 FR 22045 (May 11, 2017) (SR-BatsBZX-2017-24).
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The Exchange is proposing to add an additional risk setting titled
``ADV Check.'' This control relates to the size of an order as compared
to the 20 day consolidated average daily volume \5\ (ADV) of the
security and allows a Participant to set a specified percent of ADV
that an order size cannot exceed. This control also allows a
Participant to specify the minimum value on which such control is based
if the average daily volume of the securities is below such value. This
setting is similar to Interpretations and Policies .01(g) of BZX Rule
11.13.
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\5\ In certain circumstances, when the security does not have 20
days of trading history, the ADV Check is calculated on fewer than
20 data points.
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The Exchange is proposing to add an additional risk setting titled
``Fat Finger Protection.'' This control relates to the limit price of
an order as compared to the NBBO and includes both percentage-based and
dollar-based controls. If the limit price of an order deviates from the
NBBO in excess of the amount set by a Participant (either percentage or
dollar based), the order will not be accepted. This setting is similar
to Interpretations and Policies .01(b) of BZX Rule 11.13.
The Exchange is proposing to add an additional risk setting titled
``Rate Thresholds Check.'' A Participant will be able to set the
maximum number of messages (other than cancellations, but including new
orders, replacement orders and modifications) that can be sent in
during a configurable one second time window set by the Exchange. This
control can be set as a port level or per symbol. This setting is
similar to Interpretations and Policies .01(f) of BZX Rule 11.13.
The Exchange is proposing to add an additional risk setting titled
``Gross Exposure Check.'' This control measures open, executed, or
notional exposure of a Participant on the Exchange; and, when breached,
prevents submission of all new orders and, optionally, will cancel all
open orders. Gross open order exposure is measured as the sum of booked
price times size for all open orders plus the sum of booked price times
size for all open sell orders. Gross executed order exposure is
measured as the sum of all executed buy and sell orders. Gross notional
order exposure is measured as the sum of the gross open exposure and
gross executed exposure. This setting is similar to Interpretations and
Policies .01(h) of BZX Rule 11.13.
The Exchange is proposing to add an additional risk setting titled
``Market Impact Check.'' This optional control, if enabled, will result
in the rejection of a Participant's incoming limit order if the limit
price of the order is priced through the far-side of the current LULD
bands. In other words, a buy (sell) order cannot be priced more
aggressively than the upper (lower) LULD band.\6\ The Exchange notes
that pursuant to the existing LULD requirements, buy orders priced
below the lower price bands (and vice versa for sell orders) will be
accepted and are eligible for inclusion in the NBBO; however, these
orders are outside the price bands and will be non-executable. If the
price bands move in such a way that an order that was previously
outside the price band is now inside the band, the order will become
executable.
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\6\ The Limit Up-Limit Down (LULD) mechanism is intended to
prevent trades in National Market System (NMS) securities from
occurring outside of specified price bands. The bands are set at a
percentage level above and below the average reference price of the
security over the immediately preceding five-minute period. To
accommodate fundamental price moves, there is a five-minute trading
pause if trading is unable to occur within the specified price band
after 15 seconds.
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The Exchange believes that this new optional setting is similar to
the Exchange's existing Limit Order Protection (``LOP''). LOP is a
feature of the Nasdaq Market Center that prevents certain Limit Orders
at prices outside of pre-set standard limits (``LOP Limit'') from being
accepted by the System.\7\ LOP is operational each trading day, except
for orders designated for opening, re-opening, closing and halt
crosses. LOP does not apply in the event that there is no established
LOP Reference Price.\8\ LOP is applicable on all order entry
protocols.\9\ While the current LULD functionality would continue to
apply, this additional proposed risk setting would allow a Participant
to manage its risk more comprehensively.
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\7\ The LOP Limit is the greater of 10% of the LOP Reference
Price or $0.50 for all securities across all trading sessions. The
LOP Reference Price is the current National Best Bid or Best Offer,
the bid for sell orders and the offer for buy orders.
\8\ For example, if there is a one-sided quote or if the NBB,
when used as the LOP Reference Price, is equal to or less than
$0.50.
\9\ Nasdaq maintains several communications protocols for
Participants to use in entering Orders and sending other messages to
the Nasdaq Market Center, such as: OUCH, RASH, QIX, FLITE and FIX.
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The Exchange is also proposing to amend two existing risk settings
titled, ISO Control and Duplication Control.
Currently, pursuant to Nasdaq Equity 6, Section 5(j), the
Duplication control will automatically reject an order that a
Participant submits to the Exchange to the extent that it is
duplicative of another order that the Participant submitted to the
Exchange during the prior five seconds. The Exchange proposes to
provide additional flexibility for Participants by allowing the
interval applicable to this risk check to vary from one to thirty
seconds, as set by a Participant. This setting is similar to
Interpretations and Policies .01(e) of BZX Rule 11.13.
Pursuant to Nasdaq Equity 6, Section 5(b), ISO Control setting
prevents a Participant from entering an ISO order onto the Exchange.
The Exchange proposes to expand this setting to allow a Participant to
restrict additional order types from being entered. Specifically, a
Participant may restrict their ability to place any of the following:
ISO Orders (as currently provided by this risk setting), short sale
orders, non-auction market orders, pre-market orders or post-market
orders. The Exchange proposes to change the title of this risk setting
to Order Type/Attribution Check to better reflect its substance, as
amended. This setting is similar to Interpretations and Policies .01(c)
of BZX Rule 11.13.
As currently provided for existing risk settings, the Exchange will
share any Participant risk settings in the trading system that are
specified Rule Nasdaq Equity 6, Section 5, with the clearing member
that clears transactions on
[[Page 50904]]
behalf of the Participant even if the clearing member is not
designated.
Implementation
The Exchange intends to implement of the proposed rule changes on
or before December 30, 2022. The Exchange will issue an Equity Trader
Alert to members announcing the exact date the Exchange will implement
the risk protections.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\10\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\11\ in particular, in that it is designed to
promote just and equitable principles of trade, to remove impediments
to and perfect the mechanism of a free and open market and a national
market system, and, in general to protect investors and the public
interest.
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\10\ 15 U.S.C. 78f(b).
\11\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes the proposed amendment will
remove impediments to and perfect the mechanism of a free and open
market and a national market system because it provides functionality
for a Participant to manage its risk exposure, while also maintaining a
notification system under Rule Nasdaq Equity 6, Section 5 that would
help to ensure the Participant and its clearing member are aware of
developing issues.
A clearing member guarantees transactions executed on Nasdaq for
members with whom it has entered into a clearing arrangement, and
therefore bears the risk associated with those transactions. The
Exchange therefore believes that it is appropriate for the clearing
member to have knowledge of what risk settings the Participant may
utilize within the Exchange's trading system, as well as the option to
set and adjust the risk levels. The proposal will permit clearing
members who have a financial interest in the risk settings of
Participants with whom the Participants have entered into clearing
arrangements to better monitor and manage the potential risks assumed
by clearing members, thereby providing clearing members with greater
control and flexibility over setting their own risk tolerance and
exposure and aiding clearing members in complying with the Act.
In addition, the Exchange believes that the proposed amendments
under Rule Nasdaq Equity 6, Section 5, are designed to protect
investors and the public interest because the proposed functionalities
are a form of risk mitigation that will aid Participants and clearing
members in minimizing their financial exposure and reduce the potential
for disruptive, market-wide events. The proposed new:
Gross Executed Check settings are appropriate measures to
serve as an additional tool for Participants and clearing members to
assist them in identifying open, executed, or notional exposure risk;
Market Impact Check and ADV check may assist Participants
in avoiding placing orders with unintentional market impact;
Rate Thresholds Check may help alert a Participant to
excessive message traffic that could affect technical port performance;
Fat Finger Protection will assist a Participant in
avoiding submission of orders with unintended price limits or share
sizes;
Restricted Stock List will assist a Participant in
limiting trading for a particular security.
The proposed amendments to ISO Control will a Participant prevent
trading in a particular order type by expanding the types of orders
subject to this check to pre-market, post-market, short sales, non-
auction market orders. The proposed amendments to the Duplication
Control will allow a Participant additional flexibility in using this
control by letting a Participant to choose the period of time over
which this control applies.
The Exchange also believes the proposed amendments will assist
Participants and clearing members in managing their financial exposure
which, in turn, could enhance the integrity of trading on the
securities markets and help to assure the stability of the financial
system.
Finally, the Exchange believes that the proposed rule changes do
not unfairly discriminate among the Exchange's Participants because use
of the risk settings under Rule Nasdaq Equity 6, Section 5 are optional
and available to all Participants, and not a prerequisite for
participation on the Exchange.
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. In fact, the Exchange believes
that the proposal will have a positive effect on competition because,
it would allow the Exchange to offer risk management functionality that
is comparable to functionality being offered by other national
securities exchanges. Moreover, by providing Participants and their
clearing members additional means to monitor and control risk, the
proposed rule may increase confidence in the proper functioning of the
markets and contribute to additional competition among trading venues
and broker-dealers. Rather than impede competition, the proposal is
designed to facilitate more robust risk management by Participants and
clearing members, which, in turn, could enhance the integrity of
trading on the securities markets and help to assure the stability of
the financial system.
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)(iii) of the Act \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 50905]]
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-2022-047 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-2022-047. 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-2022-047 and should be submitted
on or before September 8, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-17746 Filed 8-17-22; 8:45 am]
BILLING CODE 8011-01-P
