Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Port-Related Fees, at Equity 7, Section 115, and Options 7, Section 3, 53531-53533 [2022-18767]
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Federal Register / Vol. 87, No. 168 / Wednesday, August 31, 2022 / Notices
III. Discussion and Commission
Findings
Section 19(b)(2)(C) of the Act directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that such
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to such organization.11 For
the reasons discussed below, the
Commission finds that the proposed
rule change is consistent with Section
17A(b)(3)(F) of the Act 12 and Rules
17Ad–22(e)(6)(iv) and 17Ad–22(e)(18)
thereunder.13
lotter on DSK11XQN23PROD with NOTICES1
A. Consistency With Section
17A(b)(3)(F) of the Act
Section 17A(b)(3)(F) of the Act
requires, among other things, that the
rules of ICC be designed to promote the
prompt and accurate clearance and
settlement of securities transactions.14
Based on its review of the record, and
for the reasons discussed below, the
Commission believes the proposed rule
change is consistent with the promotion
of the prompt and accurate clearance
and settlement of securities transactions
at ICC because it would expand the
group of entities able to become
members of ICC.
As discussed above, the proposed rule
change would establish the
requirements applicable to ACPs. These
requirements would largely mirror those
currently applicable to Full Participants,
except that ACPs would submit prices
for NA Instruments during the NA
Instrument EU Submission Window.
The Commission believes this would
allow participation by entities that may
be unable to provide prices for NA
Instruments at the close of the New
York trading day (as is required for Full
Participants). In doing so, the
Commission believes the proposed rule
change would facilitate expanded
participation at ICC and therefore the
additional clearance and settlement of
transactions at ICC by these additional
participants. The Commission believes
this change therefore would promote the
prompt and accurate clearance and
settlement of transactions at ICC,
consistent with Section 17A(b)(3)(F) of
the Act.15
B. Consistency With Rule 17Ad–
22(e)(6)(iv)
Rule 17Ad–22(e)(6)(iv) requires that
ICC establish, implement, maintain, and
11 15
U.S.C. 78s(b)(2)(C).
U.S.C. 78q–1(b)(3)(F).
13 17 CFR 240.17Ad–22(e)(6)(iv) and (e)(18).
14 15 U.S.C. 78q–1(b)(3)(F).
15 15 U.S.C. 78q–1(b)(3)(F).
enforce written policies and procedures
reasonably designed to cover its credit
exposures to its participants by
establishing a risk-based margin system
that, among other things, uses reliable
sources of timely price data and uses
procedures and sound valuation models
for addressing circumstances in which
pricing data are not readily available or
reliable.16 As discussed above, proposed
Rule 212 and the revised EOD Policy
would require ACPs to submit prices for
NA Instruments during the NA
Instrument EU Submission Window.
The Commission believes this
requirement would facilitate the
submission of prices for NA Instruments
by ACPs, who may not have the
operational capability to provide prices
for NA Instruments at the close of the
New York trading day (as is required for
Full Participants). The Commission
therefore believes that ACPs could serve
as a reliable source of timely price data
for NA Instruments, in addition to the
price data that Full Participants submit.
The Commission therefore finds the
proposed rule change is consistent with
Rule 17Ad–22(e)(6)(iv).17
C. Consistency with Rule 17Ad–
22(e)(18)
Rule 17Ad–22(e)(18) requires that ICC
establish, implement, maintain, and
enforce written policies and procedures
reasonably designed to, among other
things, establish objective, risk-based,
and publicly disclosed criteria for
participation, which permit fair and
open access by direct and, where
relevant, indirect participants and other
financial market utilities.18 As
discussed above, proposed Rule 212 and
the revised EOD Policy would require
ACPs to submit prices for NA
Instruments during the NA Instrument
EU Submission Window. The
Commission believes this represents an
objective requirement that would allow
participation by persons that may be
unable to provide prices for NA
Instruments at the close of the New
York trading day (as is required for Full
Participants). Moreover, as discussed
above, any person who meets this
requirement, and the other requirements
for ACPs (which are largely the same as
those applicable to Full Participants)
could become an ACP. The Commission
therefore believes the requirements
applicable ACPs represent objective
criteria which any person could
potentially satisfy, thereby permitting
fair and open access to ACP
membership at ICC. The Commission
12 15
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16:59 Aug 30, 2022
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16 17
CFR 240.17Ad–22(e)(6)(iv).
CFR 240.17Ad–22(e)(2)(v).
18 17 CFR 240.17Ad–22(e)(18).
17 17
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Frm 00091
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53531
therefore find the proposed rule change
is consistent with Rule 17Ad–
22(e)(18).19
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposed
rule change is consistent with the
requirements of the Act, and in
particular, with the requirements of
Section 17A(b)(3)(F) of the Act 20 and
Rules 17Ad–22(e)(6)(iv) and 17Ad–
22(e)(18) thereunder.21
It is therefore ordered pursuant to
Section 19(b)(2) of the Act 22 that the
proposed rule change (SR–ICC–2022–
010), be, and hereby is, approved.23
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.24
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–18766 Filed 8–30–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–95604; File No. SR–
NASDAQ–2022–049]
Self-Regulatory Organizations; The
Nasdaq Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend Its
Port-Related Fees, at Equity 7, Section
115, and Options 7, Section 3
August 25, 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
12, 2022, 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, 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.
19 17
CFR 240.17Ad–22(e)(18).
U.S.C. 78q–1(b)(3)(F).
21 17 CFR 240.17Ad–22(e)(6)(iv) and (e)(18).
22 15 U.S.C. 78s(b)(2).
23 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
24 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
20 15
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Federal Register / Vol. 87, No. 168 / Wednesday, August 31, 2022 / Notices
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
Exchange’s port-related fees, at Equity 7,
Section 115, and Options 7, Section 3,
as described further below.
While these amendments are effective
upon filing, the Exchange has
designated the proposed amendments to
be operative on September 1, 2022.
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.
lotter on DSK11XQN23PROD with NOTICES1
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend Equity 7, Section
115, and Options 7, Section 3, to prorate
port fees for the first month of service.
The Exchange also proposes to add
language to Equity 7, Section 115, and
Options 7, Section 3, to clarify that port
fees for cancelled services will continue
to be charged for the remainder of
month.
Currently, the Exchange does not
prorate port connectivity fees under
either its equity or options rules. Thus,
equity members and options
participants are assessed a full month’s
fee if they direct the Exchange to make
the subscribed connectivity live on any
day of the month, including the last day
thereof. Equity members and options
participants are also assessed a full
month’s port fee if they cancel service
during the month.
The Exchange proposes to provide
prorated port fees for the first month of
service for new requests. By prorating
the first month’s fees, the Exchange
would charge equity members and
options participants port fees only for
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the days in which the equity members
and options participants are connected
to the Exchange during the first month
of service. The Exchange proposes to
continue the current practice of
charging port fees for the remainder of
the month upon cancellation, with the
exception of the specialized service fees
in Equity 7, Section 115(e).3 If an equity
member or options participant starts
and cancels service in the same month,
the member or participant would not be
billed for those days prior to the service
start date but would be billed for the
remainder of the month, including after
the service is cancelled.4
The Exchange believes it is important
for equity members and options
participants to have the option to
establish new connections to the
Exchange at any time during the month
without being hampered by a full month
charge irrespective of when during the
month service begins. Moreover, other
exchanges also charge new ports on a
prorated basis for the first month of
service.5
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,6 in general, and furthers the
objectives of Sections 6(b)(4) and 6(b)(5)
of the Act,7 in particular, in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among members and issuers and other
persons using any facility, and is not
designed to permit unfair
discrimination between customers,
issuers, brokers, or dealers.
The Exchange’s proposed changes to
its port fee schedule are reasonable in
several respects. As a threshold matter,
the Exchange is subject to significant
competitive forces in the market for
options and equity securities transaction
services that constrain its pricing
determinations in that market. The
Commission and the courts have
repeatedly expressed their preference
for competition over regulatory
3 The Exchange prorates the cost of the first and
last month of a user’s subscription to the WebLink,
Workstation, and WorkX products. See Securities
Exchange Act Release No. 94226 (February 11,
2022), 87 FR 9096 (February 17, 2022) (NASDAQ–
2021–012) [sic].
4 For example, if a member orders a port on
September 4, 2022 and cancels the port on
September 16, 2022, the member would be charged
the prorated port fee for September 5, 2022 through
September 30, 2022.
5 See, e.g., Cboe BZX U.S. Equities Exchange Fee
Schedule, available at https://markets.cboe.com/us/
equities/membership/fee_schedule/bzx/; New York
Stock Exchange Price List 2022, available at https://
www.nyse.com/publicdocs/nyse/markets/nyse/
NYSE_Price_List.pdf.
6 15 U.S.C. 78f(b).
7 15 U.S.C. 78f(b)(4) and (5).
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
intervention in determining prices,
products, and services in the securities
markets. In Regulation NMS, while
adopting a series of steps to improve the
current market model, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 8
The Exchange believes that it is
reasonable to prorate port fees for the
first month of connectivity. As
discussed above, the Exchange believes
it is important for equity members and
options participants to have the
flexibility to establish new connections
to the Exchange at any time during the
month without being hampered by a full
month charge. For example, the
Exchange believes it is reasonable to
charge a user who begins a subscription
on the last day of the month to be
charged only for use of a port for that
day. As noted above, other exchanges
already charge their customers for new
ports on a prorated basis for the first
month of service.9 The proposed
language describing the Exchange’s
practice to bill for the remainder of the
month upon cancellation is intended
only to clarify the existing practice and
limit any confusion.
The Exchange believes that the
proposal is also equitable and not
unfairly discriminatory because the
proposed change to prorate port fees for
the first month of service and continue
to charge for the remainder of the month
upon cancellation will apply uniformly
to all similarly situated equity members
and options participants. Removing the
requirement to pay a full month’s port
fee if a user joins any day other than the
first of the month is user-friendly and
provides users incentive to subscribe at
their convenience. The Exchange
believes that prorating the fees for the
first month of a user’s subscription will
ensure that the fees are more equitable
to a user’s utilization of the products.
All users will benefit from the proration
of the first month of their subscription.
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.
8 Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005)
(‘‘Regulation NMS Adopting Release’’).
9 Supra note 4.
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lotter on DSK11XQN23PROD with NOTICES1
Federal Register / Vol. 87, No. 168 / Wednesday, August 31, 2022 / Notices
Intramarket Competition
The Exchange does not believe that its
proposal will place any category of
Exchange participants at a competitive
disadvantage. The proposed change to
prorate port fees for the first month of
service will apply uniformly to all
similarly situated equity members and
options participants. All users will
receive the benefit of a proration for the
first month of port connectivity, which
will enable users to save money that
they otherwise would incur under the
Exchange’s current rules that do not
provide for proration. The proposed
language describing the Exchange’s
practice to bill for the remainder of the
month upon cancellation merely
codifies and clarifies an existing
practice of the Exchange.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 11 and paragraph (f) of Rule
19b–4 12 thereunder.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is: (i) necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
Intermarket Competition
The Exchange believes that the
proposed change to its port fee schedule
to provide proration for the first month
of port connectivity will not impose a
burden on competition because the
Exchange’s execution services are
completely voluntary and subject to
extensive competition both from the
other live exchanges and from offexchange venues, which include
alternative trading systems that trade
national market system stock. Moreover,
as noted above, other exchanges
currently charge new ports on a
prorated basis for the first month of
service.10 The proposed changes will
help ensure that the Exchange’s billing
practices are commensurate with
competitors.
The proposed change to the
Exchange’s port fee schedule is
reflective of this competition because, as
a threshold issue, the Exchange is a
relatively small market so its ability to
burden intermarket competition is
limited. In this regard, even the largest
U.S. equities exchange by volume only
has 17–18% market share, which in
most markets could hardly be
categorized as having enough market
power to burden competition.
Accordingly, the Exchange does not
believe that the proposed change will
impair the ability of members,
participants, or competing order
execution venues to maintain their
competitive standing in the financial
markets.
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:
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.
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2022–049 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–2022–049. 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
11 15
10 Supra
note 4.
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16:59 Aug 30, 2022
12 17
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PO 00000
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f).
Frm 00093
Fmt 4703
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–2022–049 and
should be submitted on or before
September 21, 2022.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022–18767 Filed 8–30–22; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
34688; 812–15226]
Capital Southwest Corporation
August 25, 2022.
Securities and Exchange
Commission (‘‘Commission’’).
ACTION: Notice.
AGENCY:
Notice of an application under section
6(c) of the Investment Company Act of
1940 (the ‘‘Act’’) for an exemption from
section 12(d)(3) of the Act.
SUMMARY OF APPLICATION: Applicant
requests an order to permit a business
development company (‘‘BDC’’) to
organize, acquire, and wholly-own a
portfolio company that intends to
operate as an investment adviser
registered under the Investment
Advisers Act of 1940 (the ‘‘Advisers
Act’’).
APPLICANT: Capital Southwest
Corporation (the ‘‘Company’’ or
‘‘Applicant’’).
FILING DATES: The application was filed
on April 30, 2021, and amended on
September 1, 2021, February 28, 2022,
and May 31, 2022.
HEARING OR NOTIFICATION OF HEARING:
An order granting the requested relief
will be issued unless the Commission
orders a hearing. Interested persons may
request a hearing by emailing the
Commission’s Secretary at SecretarysOffice@sec.gov and serving Applicant
13 17
Sfmt 4703
53533
E:\FR\FM\31AUN1.SGM
CFR 200.30–3(a)(12).
31AUN1
]]>Agencies
[Federal Register Volume 87, Number 168 (Wednesday, August 31, 2022)]
[Notices]
[Pages 53531-53533]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18767]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-95604; File No. SR-NASDAQ-2022-049]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Port-Related Fees, at Equity 7, Section 115, and Options 7,
Section 3
August 25, 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 12, 2022, 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, II, and III, below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 53532]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Exchange's port-related fees, at
Equity 7, Section 115, and Options 7, Section 3, as described further
below.
While these amendments are effective upon filing, the Exchange has
designated the proposed amendments to be operative on September 1,
2022.
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 change is to amend Equity 7,
Section 115, and Options 7, Section 3, to prorate port fees for the
first month of service. The Exchange also proposes to add language to
Equity 7, Section 115, and Options 7, Section 3, to clarify that port
fees for cancelled services will continue to be charged for the
remainder of month.
Currently, the Exchange does not prorate port connectivity fees
under either its equity or options rules. Thus, equity members and
options participants are assessed a full month's fee if they direct the
Exchange to make the subscribed connectivity live on any day of the
month, including the last day thereof. Equity members and options
participants are also assessed a full month's port fee if they cancel
service during the month.
The Exchange proposes to provide prorated port fees for the first
month of service for new requests. By prorating the first month's fees,
the Exchange would charge equity members and options participants port
fees only for the days in which the equity members and options
participants are connected to the Exchange during the first month of
service. The Exchange proposes to continue the current practice of
charging port fees for the remainder of the month upon cancellation,
with the exception of the specialized service fees in Equity 7, Section
115(e).\3\ If an equity member or options participant starts and
cancels service in the same month, the member or participant would not
be billed for those days prior to the service start date but would be
billed for the remainder of the month, including after the service is
cancelled.\4\
---------------------------------------------------------------------------
\3\ The Exchange prorates the cost of the first and last month
of a user's subscription to the WebLink, Workstation, and WorkX
products. See Securities Exchange Act Release No. 94226 (February
11, 2022), 87 FR 9096 (February 17, 2022) (NASDAQ-2021-012) [sic].
\4\ For example, if a member orders a port on September 4, 2022
and cancels the port on September 16, 2022, the member would be
charged the prorated port fee for September 5, 2022 through
September 30, 2022.
---------------------------------------------------------------------------
The Exchange believes it is important for equity members and
options participants to have the option to establish new connections to
the Exchange at any time during the month without being hampered by a
full month charge irrespective of when during the month service begins.
Moreover, other exchanges also charge new ports on a prorated basis for
the first month of service.\5\
---------------------------------------------------------------------------
\5\ See, e.g., Cboe BZX U.S. Equities Exchange Fee Schedule,
available at https://markets.cboe.com/us/equities/membership/fee_schedule/bzx/; New York Stock Exchange Price List 2022,
available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\6\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\7\ in particular, in that it provides
for the equitable allocation of reasonable dues, fees and other charges
among members and issuers and other persons using any facility, and is
not designed to permit unfair discrimination between customers,
issuers, brokers, or dealers.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------
The Exchange's proposed changes to its port fee schedule are
reasonable in several respects. As a threshold matter, the Exchange is
subject to significant competitive forces in the market for options and
equity securities transaction services that constrain its pricing
determinations in that market. The Commission and the courts have
repeatedly expressed their preference for competition over regulatory
intervention in determining prices, products, and services in the
securities markets. In Regulation NMS, while adopting a series of steps
to improve the current market model, the Commission highlighted the
importance of market forces in determining prices and SRO revenues and,
also, recognized that current regulation of the market system ``has
been remarkably successful in promoting market competition in its
broader forms that are most important to investors and listed
companies.'' \8\
---------------------------------------------------------------------------
\8\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
---------------------------------------------------------------------------
The Exchange believes that it is reasonable to prorate port fees
for the first month of connectivity. As discussed above, the Exchange
believes it is important for equity members and options participants to
have the flexibility to establish new connections to the Exchange at
any time during the month without being hampered by a full month
charge. For example, the Exchange believes it is reasonable to charge a
user who begins a subscription on the last day of the month to be
charged only for use of a port for that day. As noted above, other
exchanges already charge their customers for new ports on a prorated
basis for the first month of service.\9\ The proposed language
describing the Exchange's practice to bill for the remainder of the
month upon cancellation is intended only to clarify the existing
practice and limit any confusion.
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\9\ Supra note 4.
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The Exchange believes that the proposal is also equitable and not
unfairly discriminatory because the proposed change to prorate port
fees for the first month of service and continue to charge for the
remainder of the month upon cancellation will apply uniformly to all
similarly situated equity members and options participants. Removing
the requirement to pay a full month's port fee if a user joins any day
other than the first of the month is user-friendly and provides users
incentive to subscribe at their convenience. The Exchange believes that
prorating the fees for the first month of a user's subscription will
ensure that the fees are more equitable to a user's utilization of the
products. All users will benefit from the proration of the first month
of their subscription.
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.
[[Page 53533]]
Intramarket Competition
The Exchange does not believe that its proposal will place any
category of Exchange participants at a competitive disadvantage. The
proposed change to prorate port fees for the first month of service
will apply uniformly to all similarly situated equity members and
options participants. All users will receive the benefit of a proration
for the first month of port connectivity, which will enable users to
save money that they otherwise would incur under the Exchange's current
rules that do not provide for proration. The proposed language
describing the Exchange's practice to bill for the remainder of the
month upon cancellation merely codifies and clarifies an existing
practice of the Exchange.
Intermarket Competition
The Exchange believes that the proposed change to its port fee
schedule to provide proration for the first month of port connectivity
will not impose a burden on competition because the Exchange's
execution services are completely voluntary and subject to extensive
competition both from the other live exchanges and from off-exchange
venues, which include alternative trading systems that trade national
market system stock. Moreover, as noted above, other exchanges
currently charge new ports on a prorated basis for the first month of
service.\10\ The proposed changes will help ensure that the Exchange's
billing practices are commensurate with competitors.
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\10\ Supra note 4.
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The proposed change to the Exchange's port fee schedule is
reflective of this competition because, as a threshold issue, the
Exchange is a relatively small market so its ability to burden
intermarket competition is limited. In this regard, even the largest
U.S. equities exchange by volume only has 17-18% market share, which in
most markets could hardly be categorized as having enough market power
to burden competition. Accordingly, the Exchange does not believe that
the proposed change will impair the ability of members, participants,
or competing order execution venues to maintain their competitive
standing in the financial markets.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and paragraph (f) of Rule 19b-4 \12\
thereunder.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NASDAQ-2022-049 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-2022-049. 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-2022-049 and should be submitted
on or before September 21, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2022-18767 Filed 8-30-22; 8:45 am]
BILLING CODE 8011-01-P
