Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, Section 3, 88464-88466 [2023-28039]

Download as PDF 88464 Federal Register / Vol. 88, No. 244 / Thursday, December 21, 2023 / Notices Dated: December 18, 2023. Sherry R. Haywood, Assistant Secretary. Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. [FR Doc. 2023–28116 Filed 12–20–23; 8:45 am] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–99187; File No. SR– NASDAQ–2023–054] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Options 7, Section 3 December 15, 2023. 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 December 5, 2023, 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. khammond on DSKJM1Z7X2PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend The Nasdaq Options Market LLC’s (‘‘NOM’’) Rules at Options 7, Section 3, Nasdaq Options Market—Ports and Other Services.3 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 The Exchange initially filed the proposed pricing changes on November 28, 2023 (SR– NASDAQ–2023–050). On December 5, 2023, the Exchange withdrew that filing and submitted this filing. 2 17 VerDate Sep<11>2014 18:15 Dec 20, 2023 Jkt 262001 1. Purpose The Exchange proposes to amend Options 7, Section 3, Nasdaq Options Market—Ports and Other Services. Specifically, the Exchange proposes to amend Options 7, Section 3(i) to increase the per port, per month SQF Port 4 and SQF Purge 5 Port Fees for all ports over 20 ports (21 and above) from $500 to $750.6 Today, NOM assesses SQF Ports and SQF Purge Ports a per port, per month fee based on a tiered fee schedule. Specifically, NOM assesses an SQF Port and an SQF Purge Port fee of $1,500 per port, per month for the first 5 ports (1– 5), a $1,000 per port, per month fee for the next 15 ports (6–20), and a $750 per port, per month fee for all ports over 20 ports (21 and above). The Exchange proposes to amend the per port, per month fee for SQF Ports and SQF Ports above 20 ports (21 and above) from $500 to $750 per port, per month. The Exchange is not amending the SQF Port and SQF Purge Port fees for ports below 20 ports. SQF Ports and SQF Purge Ports over 20 ports are unnecessary for a NOM Market Maker to fulfill its regulatory requirements.7 A NOM Market Maker requires only one SQF Port to submit quotes in its assigned options series into NOM. A NOM Market Maker may submit all quotes through one SQF Port and utilize 4 ‘‘Specialized Quote Feed’’ or ‘‘SQF’’ is an interface that allows Market Makers to connect, send, and receive messages related to quotes and Immediate-or-Cancel Orders into and from the Exchange. Features include the following: (1) options symbol directory messages (e.g., underlying instruments); (2) system event messages (e.g., start of trading hours messages and start of opening); (3) trading action messages (e.g., halts and resumes); (4) execution messages; (5) quote messages; (6) Immediate-or-Cancel Order messages; (7) risk protection triggers and purge notifications; and (8) opening imbalance messages. The SQF Purge Interface only receives and notifies of purge requests from the Market Maker. Market Makers may only enter interest into SQF in their assigned options series. Immediate-or-Cancel Orders entered into SQF are not subject to the Order Price Protection, Market Order Spread Protection, or Size Limitation in Options 3, Section 15(a)(1) and (a)(2), and (b)(2), respectively. See Options 3, Section 7(e)(1)(B). 5 SQF Purge is a specific port for the SQF interface that only receives and notifies of purge requests from the NOM Market Maker. 6 The Exchange also proposes a technical amendment to remove an extraneous period in Options 7, Section 3 in the second paragraph. 7 See NOM Options 2, Sections 4 and 5. PO 00000 Frm 00105 Fmt 4703 Sfmt 4703 one SQF Purge Port to view its purge requests. While a NOM Market Maker may elect to obtain multiple SQF Ports and SQF Purge Ports to organize its business,8 only one SQF Port and SQF Purge Port is necessary for a NOM Market Maker to fulfill its regulatory quoting obligations.9 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,10 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,11 in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange’s proposed pricing change to increase fees for certain SQF Ports and SQF Purge Ports is reasonable in several respects. As a threshold matter, the Exchange is subject to significant competitive forces in the market for options securities transaction services that constrain its pricing determinations in that market. The fact that this market is competitive has long been recognized by the courts. In NetCoalition v. Securities and Exchange Commission, the D.C. Circuit stated as follows: ‘‘[n]o one disputes that competition for order flow is ‘fierce.’ . . . As the SEC explained, ‘[i]n the U.S. national market system, buyers and sellers of securities, and the brokerdealers that act as their order-routing agents, have a wide range of choices of where to route orders for execution’; [and] ‘no exchange can afford to take its market share percentages for granted’ because ‘no exchange possesses a monopoly, regulatory or otherwise, in the execution of order flow from broker dealers’. . . .’’ 12 The Commission and the courts have repeatedly expressed their preference 8 For example, a NOM Market Maker may desire to utilize multiple SQF Ports for accounting purposes, to measure performance, for regulatory reasons or other determinations that are specific to that NOM Participant. 9 NOM Market Makers have various regulatory requirements as provided for in Options 2, Section 4. Additionally, NOM Market Makers have certain quoting requirements with respect to their assigned options series as provided in Options 2, Section 5. The Exchange notes that SQF Ports are the only quoting protocol available on NOM and only NOM Market Makers may utilize SQF Ports. The same is true for SQF Purge Ports. 10 15 U.S.C. 78f(b). 11 15 U.S.C. 78f(b)(4) and (5). 12 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) (quoting Securities Exchange Act Release No. 59039 (December 2, 2008), 73 FR 74770, 74782– 83 (December 9, 2008) (SR–NYSEArca–2006–21)). E:\FR\FM\21DEN1.SGM 21DEN1 Federal Register / Vol. 88, No. 244 / Thursday, December 21, 2023 / Notices khammond on DSKJM1Z7X2PROD with NOTICES 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.’’ 13 Numerous indicia demonstrate the competitive nature of this market. Within this environment, market participants can freely and often do shift their order flow among the Exchange and competing venues in response to changes in their respective pricing schedules. The Exchange believes that increasing the fee for SQF Ports and SQF Purge Ports over 20 ports (21 and above) from $500 to $750 per port, per month is reasonable because SQF Ports and SQF Purge Ports over 20 ports are unnecessary for a NOM Market Maker to fulfill its regulatory requirements.14 A NOM Market Maker requires only one SQF Port to submit quotes in its assigned options series into NOM. A NOM Market Maker may submit all quotes through one SQF Port and utilize one SQF Purge Port to view its purge requests. While a NOM Market Maker may elect to obtain multiple SQF Ports and SQF Purge Ports to organize its business,15 only one SQF Port and SQF Purge Port is necessary for a NOM Market Maker to fulfill its regulatory quoting obligations. The Exchange believes that increasing the fee for SQF Ports and SQF Purge Ports over 20 ports (21 and above) from $500 to $750 per port, per month is equitable and not unfairly discriminatory because all NOM Market Makers would be assessed the same fees for SQF Ports and SQF Purge Ports to the extent that these NOM Market Makers have subscribed to more than 20 SQF Ports or SQF Purge Ports. NOM Market Makers are the only market participants that are assessed SQF Port and SQF Purge Port fees because they are the only market participants that are permitted to quote on the Exchange. 13 Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (‘‘Regulation NMS Adopting Release’’). 14 See NOM Options 2, Sections 4 and 5. 15 For example, a NOM Market Maker may desire to utilize multiple SQF Ports for accounting purposes, to measure performance, for regulatory reasons or other determinations that are specific to that Participant. VerDate Sep<11>2014 18:15 Dec 20, 2023 Jkt 262001 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. Intermarket Competition The proposal does not impose an undue burden on intermarket competition. The Exchange believes its proposal remains competitive with other options markets who also offer order entry protocols. The Exchange notes that it operates in a highly competitive market in which market participants can readily favor competing venues if they deem fee levels at a particular venue to be excessive. In such an environment, the Exchange must continually adjust its fees to remain competitive with other exchanges. Because competitors are free to modify their own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which fee changes in this market may impose any burden on competition is extremely limited. Intramarket Competition The Exchange believes that increasing the fee for SQF Ports and SQF Purge Ports over 20 ports (21 and above) from $500 to $750 per port, per month does not impose an undue burden on competition because all NOM Market Makers would be assessed the same fees for SQF Ports and SQF Purge Ports to the extent that these NOM Market Makers have subscribed to more than 20 SQF Ports or SQF Purge Ports. NOM Market Makers are the only market participants that are assessed SQF Port and SQF Purge Port fees because they are the only market participants that are permitted to quote on the Exchange. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.16 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if 16 15 PO 00000 U.S.C. 78s(b)(3)(A)(ii). Frm 00106 Fmt 4703 Sfmt 4703 88465 it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– NASDAQ–2023–054 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–2023–054. 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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All E:\FR\FM\21DEN1.SGM 21DEN1 88466 Federal Register / Vol. 88, No. 244 / Thursday, December 21, 2023 / Notices submissions should refer to file number SR–NASDAQ–2023–054 and should be submitted on or before January 11, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Sherry R. Haywood, Assistant Secretary. Tennessee: Cheatham, Hickman, Houston, Humphreys, Macon, Robertson, Rutherford, Stewart, Trousdale, Williamson, Wilson Kentucky: Christian, Simpson, Allen, Todd The Interest Rates are: Percent [FR Doc. 2023–28039 Filed 12–20–23; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #20131 and #20132; Tennessee Disaster Number TN–20009] Presidential Declaration of a Major Disaster for the State of Tennessee U.S. Small Business Administration. ACTION: Notice. AGENCY: This is a Notice of the Presidential declaration of a major disaster for the State of Tennessee (FEMA–4751–DR), dated 12/13/2023. Incident: Severe Storms and Tornadoes. Incident Period: 12/09/2023. DATES: Issued on 12/13/2023. Physical Loan Application Deadline Date: 02/12/2024. Economic Injury (EIDL) Loan Application Deadline Date: 09/13/2024. ADDRESSES: Visit the MySBA Loan Portal at https://lending.sba.gov to apply for a disaster assistance loan. FOR FURTHER INFORMATION CONTACT: Alan Escobar, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the President’s major disaster declaration on 12/13/2023, applications for disaster loans may be submitted online using the MySBA Loan Portal https:// lending.sba.gov or other locally announced locations. Please contact the SBA disaster assistance customer service center by email at disastercustomerservice@sba.gov or by phone at 1–800–659–2955 for further assistance. The following areas have been determined to be adversely affected by the disaster: Primary Counties (Physical Damage and Economic Injury Loans): Davidson, Dickson, Montgomery, Sumner. Contiguous Counties (Economic Injury Loans Only): khammond on DSKJM1Z7X2PROD with NOTICES SUMMARY: 17 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:15 Dec 20, 2023 Jkt 262001 For Physical Damage: Homeowners with Credit Available Elsewhere ...................... Homeowners without Credit Available Elsewhere .............. Businesses with Credit Available Elsewhere ...................... Businesses without Credit Available Elsewhere .............. Non-Profit Organizations with Credit Available Elsewhere ... Non-Profit Organizations without Credit Available Elsewhere ..................................... For Economic Injury: Business and Small Agricultural Cooperatives without Credit Available Elsewhere .............. Non-Profit Organizations without Credit Available Elsewhere ..................................... 5.375 2.688 8.000 4.000 3.250 3.250 4.000 3.250 The number assigned to this disaster for physical damage is 20131C and for economic injury is 201320. (Catalog of Federal Domestic Assistance Number 59008) Francisco Sa´nchez, Jr., Associate Administrator, Office of Disaster Recovery & Resilience. [FR Doc. 2023–28150 Filed 12–20–23; 8:45 am] BILLING CODE 8026–09–P SOCIAL SECURITY ADMINISTRATION [Docket No. SSA–2023–0046] Privacy Act of 1974; Matching Program AGENCY: Social Security Administration (SSA). Notice of a new matching program. ACTION: In accordance with the provisions of the Privacy Act, as amended, this notice announces a new matching program with Office of Personnel Management (OPM). This matching program sets forth the terms, conditions, and safeguards under which SSA uses identifying information (e.g., name, Social Security number (SSN), and date of birth) concerning United States Postal Service (Postal Service) annuitants and their family members as part of a process to verify eligibility to enroll in Medicare Part B during the Postal Service Reform Act of 2022 SUMMARY: PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 (PSRA) Medicare special enrollment period (SEP). DATES: Submit comments on the proposed matching program no later than January 22, 2024. The matching program will be applicable on January 20, 2024, or once a minimum of 30 days after publication of this notice has elapsed, whichever is later. The matching program will be in effect for a period of 9 months. ADDRESSES: You may submit comments by any one of three methods—internet, fax, or mail. Do not submit the same comments multiple times or by more than one method. Regardless of which method you choose, please state that your comments refer to Docket No. SSA–2023–0046 so that we may associate your comments with the correct regulation. CAUTION: You should be careful to include in your comments only information that you wish to make publicly available. We strongly urge you not to include in your comments any personal information, such as Social Security numbers or medical information. 1. Internet: We strongly recommend that you submit your comments via the internet. Please visit the Federal eRulemaking portal at https:// www.regulations.gov. Use the Search function to find docket number SSA– 2023–0046 and then submit your comments. The system will issue you a tracking number to confirm your submission. You will not be able to view your comment immediately because we must post each submission manually. It may take up to a week for your comments to be viewable. 2. Fax: Fax comments to (410) 966– 0869. 3. Mail: Matthew Ramsey, Executive Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235–6401, or emailing Matthew.Ramsey@ssa.gov. Comments are also available for public viewing on the Federal eRulemaking portal at https://www.regulations.gov or in person, during regular business hours, by arranging with the contact person identified below. FOR FURTHER INFORMATION CONTACT: Interested parties may submit general questions about the matching program to Cynthia Scott, Division Director, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235–6401, at telephone: (410) 965–1416, or send an email to Cynthia.Scott@ssa.gov. E:\FR\FM\21DEN1.SGM 21DEN1

Agencies

[Federal Register Volume 88, Number 244 (Thursday, December 21, 2023)]
[Notices]
[Pages 88464-88466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28039]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99187; File No. SR-NASDAQ-2023-054]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Options 7, Section 3

December 15, 2023.
    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 December 5, 2023, 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend The Nasdaq Options Market LLC's 
(``NOM'') Rules at Options 7, Section 3, Nasdaq Options Market--Ports 
and Other Services.\3\
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed pricing changes on 
November 28, 2023 (SR-NASDAQ-2023-050). On December 5, 2023, the 
Exchange withdrew that filing and submitted this filing.
---------------------------------------------------------------------------

    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 Exchange proposes to amend Options 7, Section 3, Nasdaq Options 
Market--Ports and Other Services. Specifically, the Exchange proposes 
to amend Options 7, Section 3(i) to increase the per port, per month 
SQF Port \4\ and SQF Purge \5\ Port Fees for all ports over 20 ports 
(21 and above) from $500 to $750.\6\
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    \4\ ``Specialized Quote Feed'' or ``SQF'' is an interface that 
allows Market Makers to connect, send, and receive messages related 
to quotes and Immediate-or-Cancel Orders into and from the Exchange. 
Features include the following: (1) options symbol directory 
messages (e.g., underlying instruments); (2) system event messages 
(e.g., start of trading hours messages and start of opening); (3) 
trading action messages (e.g., halts and resumes); (4) execution 
messages; (5) quote messages; (6) Immediate-or-Cancel Order 
messages; (7) risk protection triggers and purge notifications; and 
(8) opening imbalance messages. The SQF Purge Interface only 
receives and notifies of purge requests from the Market Maker. 
Market Makers may only enter interest into SQF in their assigned 
options series. Immediate-or-Cancel Orders entered into SQF are not 
subject to the Order Price Protection, Market Order Spread 
Protection, or Size Limitation in Options 3, Section 15(a)(1) and 
(a)(2), and (b)(2), respectively. See Options 3, Section 7(e)(1)(B).
    \5\ SQF Purge is a specific port for the SQF interface that only 
receives and notifies of purge requests from the NOM Market Maker.
    \6\ The Exchange also proposes a technical amendment to remove 
an extraneous period in Options 7, Section 3 in the second 
paragraph.
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    Today, NOM assesses SQF Ports and SQF Purge Ports a per port, per 
month fee based on a tiered fee schedule. Specifically, NOM assesses an 
SQF Port and an SQF Purge Port fee of $1,500 per port, per month for 
the first 5 ports (1-5), a $1,000 per port, per month fee for the next 
15 ports (6-20), and a $750 per port, per month fee for all ports over 
20 ports (21 and above).
    The Exchange proposes to amend the per port, per month fee for SQF 
Ports and SQF Ports above 20 ports (21 and above) from $500 to $750 per 
port, per month. The Exchange is not amending the SQF Port and SQF 
Purge Port fees for ports below 20 ports. SQF Ports and SQF Purge Ports 
over 20 ports are unnecessary for a NOM Market Maker to fulfill its 
regulatory requirements.\7\ A NOM Market Maker requires only one SQF 
Port to submit quotes in its assigned options series into NOM. A NOM 
Market Maker may submit all quotes through one SQF Port and utilize one 
SQF Purge Port to view its purge requests. While a NOM Market Maker may 
elect to obtain multiple SQF Ports and SQF Purge Ports to organize its 
business,\8\ only one SQF Port and SQF Purge Port is necessary for a 
NOM Market Maker to fulfill its regulatory quoting obligations.\9\
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    \7\ See NOM Options 2, Sections 4 and 5.
    \8\ For example, a NOM Market Maker may desire to utilize 
multiple SQF Ports for accounting purposes, to measure performance, 
for regulatory reasons or other determinations that are specific to 
that NOM Participant.
    \9\ NOM Market Makers have various regulatory requirements as 
provided for in Options 2, Section 4. Additionally, NOM Market 
Makers have certain quoting requirements with respect to their 
assigned options series as provided in Options 2, Section 5. The 
Exchange notes that SQF Ports are the only quoting protocol 
available on NOM and only NOM Market Makers may utilize SQF Ports. 
The same is true for SQF Purge Ports.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\10\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\11\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among members and issuers and other persons using any 
facility, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange's proposed pricing change to increase fees for certain 
SQF Ports and SQF Purge Ports is reasonable in several respects. As a 
threshold matter, the Exchange is subject to significant competitive 
forces in the market for options securities transaction services that 
constrain its pricing determinations in that market. The fact that this 
market is competitive has long been recognized by the courts. In 
NetCoalition v. Securities and Exchange Commission, the D.C. Circuit 
stated as follows: ``[n]o one disputes that competition for order flow 
is `fierce.' . . . As the SEC explained, `[i]n the U.S. national market 
system, buyers and sellers of securities, and the broker-dealers that 
act as their order-routing agents, have a wide range of choices of 
where to route orders for execution'; [and] `no exchange can afford to 
take its market share percentages for granted' because `no exchange 
possesses a monopoly, regulatory or otherwise, in the execution of 
order flow from broker dealers'. . . .'' \12\
---------------------------------------------------------------------------

    \12\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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    The Commission and the courts have repeatedly expressed their 
preference

[[Page 88465]]

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.'' \13\
---------------------------------------------------------------------------

    \13\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
---------------------------------------------------------------------------

    Numerous indicia demonstrate the competitive nature of this market. 
Within this environment, market participants can freely and often do 
shift their order flow among the Exchange and competing venues in 
response to changes in their respective pricing schedules.
    The Exchange believes that increasing the fee for SQF Ports and SQF 
Purge Ports over 20 ports (21 and above) from $500 to $750 per port, 
per month is reasonable because SQF Ports and SQF Purge Ports over 20 
ports are unnecessary for a NOM Market Maker to fulfill its regulatory 
requirements.\14\ A NOM Market Maker requires only one SQF Port to 
submit quotes in its assigned options series into NOM. A NOM Market 
Maker may submit all quotes through one SQF Port and utilize one SQF 
Purge Port to view its purge requests. While a NOM Market Maker may 
elect to obtain multiple SQF Ports and SQF Purge Ports to organize its 
business,\15\ only one SQF Port and SQF Purge Port is necessary for a 
NOM Market Maker to fulfill its regulatory quoting obligations.
---------------------------------------------------------------------------

    \14\ See NOM Options 2, Sections 4 and 5.
    \15\ For example, a NOM Market Maker may desire to utilize 
multiple SQF Ports for accounting purposes, to measure performance, 
for regulatory reasons or other determinations that are specific to 
that Participant.
---------------------------------------------------------------------------

    The Exchange believes that increasing the fee for SQF Ports and SQF 
Purge Ports over 20 ports (21 and above) from $500 to $750 per port, 
per month is equitable and not unfairly discriminatory because all NOM 
Market Makers would be assessed the same fees for SQF Ports and SQF 
Purge Ports to the extent that these NOM Market Makers have subscribed 
to more than 20 SQF Ports or SQF Purge Ports. NOM Market Makers are the 
only market participants that are assessed SQF Port and SQF Purge Port 
fees because they are the only market participants that are permitted 
to quote 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.
Intermarket Competition
    The proposal does not impose an undue burden on intermarket 
competition. The Exchange believes its proposal remains competitive 
with other options markets who also offer order entry protocols. The 
Exchange notes that it operates in a highly competitive market in which 
market participants can readily favor competing venues if they deem fee 
levels at a particular venue to be excessive. In such an environment, 
the Exchange must continually adjust its fees to remain competitive 
with other exchanges. Because competitors are free to modify their own 
fees in response, and because market participants may readily adjust 
their order routing practices, the Exchange believes that the degree to 
which fee changes in this market may impose any burden on competition 
is extremely limited.
Intramarket Competition
    The Exchange believes that increasing the fee for SQF Ports and SQF 
Purge Ports over 20 ports (21 and above) from $500 to $750 per port, 
per month does not impose an undue burden on competition because all 
NOM Market Makers would be assessed the same fees for SQF Ports and SQF 
Purge Ports to the extent that these NOM Market Makers have subscribed 
to more than 20 SQF Ports or SQF Purge Ports. NOM Market Makers are the 
only market participants that are assessed SQF Port and SQF Purge Port 
fees because they are the only market participants that are permitted 
to quote on the Exchange.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Act.\16\
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    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is: (i) 
necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NASDAQ-2023-054 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-2023-054. 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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All

[[Page 88466]]

submissions should refer to file number SR-NASDAQ-2023-054 and should 
be submitted on or before January 11, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-28039 Filed 12-20-23; 8:45 am]
BILLING CODE 8011-01-P
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