Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Schedule of Credits at Equity 7, Section 118(a), 92266-92269 [2024-27218]

Download as PDF 92266 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices obtain information regarding trading in the Shares of the Fund; the conditions under which the Exchange would implement trading halts and suspensions; and the requirements of registered market makers in the Shares of the Fund. In addition, the Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to that Exchange’s rules governing the trading of equity securities. Further, the applicable listing rule of the Exchange requires that all statements and representations made in its filing regarding, among others, the description of the Fund’s holdings, limitations on such holdings, and the applicability of the Exchange’s listing rules specified in the filing, will constitute continued listing requirements.58 Moreover, the proposed rule change states that the Sponsor has represented to the Exchange that it will advise that Exchange of any failure to comply with the applicable continued listing requirements; pursuant to obligations under Section 19(g)(1) of the Exchange Act, the Exchange will monitor for compliance with the continued listing requirements; and if the Fund is not in compliance with the applicable listing requirements, that Exchange will commence delisting procedures. The Commission therefore finds that the proposed rule change, as modified by Amendment No. 4, is reasonably designed to promote fair disclosure of information that may be necessary to price the Shares appropriately, to prevent trading when a reasonable degree of transparency cannot be assured, to safeguard material nonpublic information relating to the Fund’s portfolio, and to ensure fair and orderly markets for the Shares of the Fund. IV. Solicitation of Comments on Amendment No. 4 to the Proposed Rule Change Interested persons are invited to submit written data, views and arguments concerning whether Amendment No. 4 is consistent with the Act. Comments may be submitted by any of the following methods: lotter on DSK11XQN23PROD with NOTICES1 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– NYSEARCA–2024–27 on the subject line. 58 See NYSE Arca Rule 8.500–E(d)(2). VerDate Sep<11>2014 18:02 Nov 20, 2024 Jkt 265001 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–NYSEARCA–2024–27. 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 submissions should refer to file number SR–NYSEARCA–2024–27 and should be submitted on or before December 12, 2024. V. Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 4 The Commission finds good cause to approve the proposed rule change, as modified by Amendment No. 4, prior to the thirtieth day after the date of publication of notice of the filing of Amendment No. 4 in the Federal Register. Amendment No. 4 to the proposed rule change clarified the creation and redemptions procedures for the Shares and provided additional clarification relating to statements concerning the holdings of the Fund and the custody of cash and cash equivalents. The changes and additional information in Amendment No. 4 assist the Commission in evaluating the Exchange’s proposal and in determining that it is consistent with the Act. The PO 00000 Frm 00181 Fmt 4703 Sfmt 4703 amended filing is now substantially similar to other spot bitcoin ETPs that the Commission has approved with respect to the Fund’s spot bitcoin holdings, and as discussed above in Section III.A, the spot bitcoin market and the CME bitcoin futures market remain consistently highly correlated. Accordingly, the Commission finds good cause, pursuant to Section 19(b)(2) of the Act,59 to approve the proposed rule change, as modified by Amendment No. 4, on an accelerated basis. VI. Conclusion This approval order is based on all of the Exchange’s representations, including those set forth above and in Amendment No. 4. For the foregoing reasons, the Commission finds that the proposed rule change, as modified by Amendment No. 4, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange, and in particular, Section 6(b)(5) and Section 11A(a)(1)(C)(iii) of the Act.60 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,61 that the proposed rule change (SR–NYSEARCA– 2024–27), as modified by Amendment No. 4, be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.62 Stephanie J. Fouse, Assistant Secretary. [FR Doc. 2024–27221 Filed 11–20–24; 8:45 am] BILLING CODE P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–101638; File No. SR– NASDAQ–2024–066] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Its Schedule of Credits at Equity 7, Section 118(a) November 15, 2024. 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 November 1, 2024, The Nasdaq Stock Market LLC 59 15 U.S.C. 78s(b)(2). U.S.C. 78f(b)(5); 15 U.S.C. 78k– 1(a)(1)(C)(iii). 61 15 U.S.C. 78s(b)(2). 62 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 60 15 E:\FR\FM\21NON1.SGM 21NON1 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices (‘‘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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Exchange’s schedule of credits at Equity 7, Section 118(a), as described further below. 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 lotter on DSK11XQN23PROD with NOTICES1 1. Purpose The purpose of the proposed rule change is to amend the Exchange’s schedule of credits, at Equity 7, Section 118(a). Specifically, the Exchange proposes to introduce a new credit applicable to Tapes A, B, and C for displayed quotes (other than Supplemental Orders) that provide liquidity. Under the proposed rule change, members will be eligible for the new credit of $0.0029 if they meet the following criteria: (1) the member adds at least 0.50% of the Consolidated Volume, with at least 0.10% of such volume being Tape B securities; and (2) the member adds at least 0.15% of Consolidated Volume of non-displayed liquidity, which includes midpoint orders and Midpoint Extended Life Orders (‘‘M–ELO’’). This proposed change will apply to Tapes A, B, and C. The purpose of the VerDate Sep<11>2014 18:02 Nov 20, 2024 Jkt 265001 new credit structure is to incentivize members to increase their liquidity adding activity on the Exchange. By providing an additional incentive for members to contribute displayed liquidity, the Exchange aims to enhance market quality and improve liquidity. The new proposed credit of $0.0029 is in addition to other credits the Exchange already offers to member for providing displayed liquidity. The Exchange believes that if this incentive successfully drives additional liquidity, the resulting increase will enhance overall market quality, benefiting all participants. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,3 in general, and furthers the objectives of Sections 6(b)(4) and 6(b)(5) of the Act,4 in particular, in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using any facility, and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Proposal Is Reasonable The Exchange’s proposed change to its schedule of credits is reasonable in several respects. As a threshold matter, the Exchange is subject to significant competitive forces in the market for equity 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’. . ..’’ 5 The Commission and the courts have repeatedly expressed their preference for competition over regulatory intervention in determining prices, products, and services in the securities 3 15 U.S.C. 78f(b). U.S.C. 78f(b)(4) and (5). 5 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)). 4 15 PO 00000 Frm 00182 Fmt 4703 Sfmt 4703 92267 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.’’ 6 Numerous indicia demonstrate the competitive nature of this market. For example, clear substitutes to the Exchange exist in the market for equity security transaction services. The Exchange is only one of several equity venues to which market participants may direct their order flow. Competing equity exchanges offer similar tiered pricing structures to that of the Exchange, including schedules of rebates and fees that apply based upon members achieving certain volume thresholds. 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. As such, the proposal represents a reasonable attempt by the Exchange to increase its liquidity and market share relative to its competitors. The Exchange believes that it is reasonable to establish a new credit of $0.0029 for members that add displayed liquidity when the member adds at least 0.50% of Consolidated Volume, of which at least 0.10% are Tape B securities, and the member adds at least 0.15% of Consolidated Volume of nondisplayed liquidity (including midpoint orders) and Midpoint Extended Life Orders. This proposal is reasonable because it will incentivize liquidity adding activity and provide an incentive to members that provide additional displayed liquidity to the Exchange. The Exchange believes that if such incentive is effective, then any ensuring increase in liquidity to the Exchange will improve market quality, to the benefit of all participants. The Exchange believes that establishing a new credit for members that add displayed liquidity is equitable. To the extent that the Exchange succeeds in increasing the levels of liquidity and activity on the Exchange, the Exchange will experience improvements in its market quality, which stands to benefit all market participants. The Exchange further believes that the proposed new credit of 6 Securities Exchange Act Release No. 51808 (June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) (‘‘Regulation NMS Adopting Release’’). E:\FR\FM\21NON1.SGM 21NON1 92268 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices $0.0029 for members providing additional liquidity is equitable because it will be applied uniformly to all members that meet the specified criteria. Any participant that is dissatisfied with the proposal is free to shift their order flow to competing venues that provide more generous pricing or less stringent qualifying criteria. The Proposal Is Not Unfairly Discriminatory lotter on DSK11XQN23PROD with NOTICES1 The Exchange believes that the proposed $0.0029 new credit for members adding additional liquidity is not unfairly discriminatory. As an initial matter, the Exchange believes that nothing about its volume-based tiered pricing model is inherently unfair; instead, it is a rational pricing model that is well-established and ubiquitous in today’s economy among firms in various industries—from cobranded credit cards to grocery stores to cellular telephone data plans—that use it to reward the loyalty of their best customers that provide high levels of business activity and incent other customers to increase the extent of their business activity. It is also a pricing model that the Exchange and its competitors have long employed with the assent of the Commission. It is fair because it enhances price discovery and improves the overall quality of the equity markets. The Exchange believes that the proposal to add a new credit for members providing additional displayed liquidity (other than Supplemental Orders) as described above, is not unfairly discriminatory. The new credit is not intended to advantage any particular member and will be applied uniformly to all members that meet the qualifying criteria. Moreover, the proposal stands to improve the overall market quality of the Exchange, to the benefit of all market participants, by incentivizing members to increase the extent of their liquidity adding activity. Any participant that is dissatisfied with the proposal is free to shift their order flow to competing venues that provide more generous pricing or less stringent qualifying criteria. 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. VerDate Sep<11>2014 18:02 Nov 20, 2024 Jkt 265001 Intramarket Competition The Exchange does not believe that its proposal will place any category of Exchange participant at a competitive disadvantage. As noted above, the Exchange’s proposal to add a new credit for members that add displayed liquidity is intended to have market-improving effects, to the benefit of all members. Any member can satisfy the criteria to qualify for the new credit. The Exchange notes that its members are free to trade on other venues to the extent they believe that the Exchange’s fee schedule is not attractive. As one can observe by looking at any market share chart, price competition between exchanges is fierce, with liquidity and market share moving freely between exchanges in reaction to fee and credit changes. Intermarket Competition In terms of inter-market competition, 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, or rebate opportunities available at other venues to be more favorable. In such an environment, the Exchange must continually adjust its credits and fees to remain competitive with other exchanges and with alternative trading systems that have been exempted from compliance with the statutory standards applicable to exchanges. Because competitors are free to modify their credit and own fees in response, and because market participants may readily adjust their order routing practices, the Exchange believes that the degree to which credit or fee changes in this market may impose any burden on competition is extremely limited. The proposed new credit is reflective of this competition because, as a threshold issue, even as one of the largest U.S. equities exchanges by volume, the Exchange has less than 20% market share, which in most markets could hardly be categorized as having enough market power to burden competition. Moreover, price competition between exchanges is fierce, with liquidity and market share moving freely between exchanges in reaction to credit and fee changes. This is an addition to free flow of order flow to and among off-exchange venues which comprises more than 40% of industry volume in recent months. The Exchange’s proposal to add a new credit is pro-competitive in that the Exchange intends for the credit to PO 00000 Frm 00183 Fmt 4703 Sfmt 4703 increase liquidity addition activity on the Exchange, thereby rendering the Exchange more attractive and vibrant to participants. In sum, if the changes proposed herein are unattractive to market participants, it is likely that the Exchange will lose market share as a result. Accordingly, the Exchange does not believe that the proposed change will impair the ability of members 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)(ii) of the Act.7 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– NASDAQ–2024–066 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–2024–066. This file number should be included on the 7 15 U.S.C. 78s(b)(3)(A)(ii). E:\FR\FM\21NON1.SGM 21NON1 Federal Register / Vol. 89, No. 225 / Thursday, November 21, 2024 / Notices 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 submissions should refer to file number SR–NASDAQ–2024–066 and should be submitted on or before December 12, 2024. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Stephanie J. Fouse, Assistant Secretary. Incident Period: October 19, 2024 through October 20, 2024. Physical Loan Application Deadline Date: January 2, 2025. Economic Injury (EIDL) Loan Application Deadline Date: August 1, 2025. SMALL BUSINESS ADMINISTRATION ADDRESSES: Visit the MySBA Loan Portal at https://lending.sba.gov to apply for a disaster assistance loan. AGENCY: FOR FURTHER INFORMATION CONTACT: SUMMARY: Vanessa Morgan, Office of Disaster Recovery & Resilience, U.S. Small Business Administration, 409 3rd Street SW, Suite 6050, Washington, DC 20416, (202) 205–6734. The notice of the President’s major disaster declaration for the State of New Mexico dated November 1, 2024 and published in the Federal Register on November 8, 2024 at 89 FR 88849 in the third column, is hereby corrected to change the physical loan application deadline date to January 2, 2025. Private NonProfit organizations that provide essential services of a governmental nature may file disaster loan applications 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: SUPPLEMENTARY INFORMATION: Primary County: Chaves. BILLING CODE 8011–01–P Percent SMALL BUSINESS ADMINISTRATION [Disaster Declaration #20854 and #20855; NEW MEXICO Disaster Number NM–20010] Presidential Declaration of a Major Disaster for Public Assistance Only for the State of New Mexico; Correction U.S. Small Business Administration. ACTION: Notice; correction. AGENCY: This is a correction of the Presidential declaration of a major disaster for Public Assistance Only for the State of New Mexico (FEMA–4843– DR), dated November 1, 2024. Incident: Severe Storm and Flooding. DATES: Issued on November 15, 2024. lotter on DSK11XQN23PROD with NOTICES1 SUMMARY: For Physical Damage: Non-Profit Organizations with Credit Available Elsewhere ... Non-Profit Organizations without Credit Available Elsewhere ..................................... For Economic Injury: Non-Profit Organizations without Credit Available Elsewhere ..................................... 3.250 CFR 200.30–3(a)(12). VerDate Sep<11>2014 18:02 Nov 20, 2024 3.250 The number assigned to this disaster for physical damage is 208546 and for economic injury is 208550. This is an amendment of the Presidential declaration of a major disaster for the State of TENNESSEE (FEMA–4832–DR), dated October 2, 2024. Incident: Tropical Storm Helene. DATES: Issued on November 12, 2024. Incident Period: September 26, 2024 through September 30, 2024. Physical Loan Application Deadline Date: January 7, 2025. Economic Injury (EIDL) Loan Application Deadline Date: July 2, 2025. 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: The notice of the President’s major disaster declaration for the State of TENNESSEE, dated October 2, 2024, is hereby amended to extend the deadline for filing applications for physical damages as a result of this disaster to January 7, 2025. All other information in the original declaration remains unchanged. (Catalog of Federal Domestic Assistance Number 59008) Alejandro Contreras, Acting Deputy Associate Administrator, Office of Disaster Recovery & Resilience. BILLING CODE 8026–09–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #20811 and #20812; NEW MEXICO Disaster Number NM–20009] Presidential Declaration of a Major Disaster for the State of New Mexico (Catalog of Federal Domestic Assistance Number 59008) AGENCY: Alejandro Contreras, Acting Deputy Associate Administrator Office of Disaster Recovery & Resilience. SUMMARY: BILLING CODE 8026–09–P Jkt 265001 Presidential Declaration Amendment of a Major Disaster for the State of Tennessee [FR Doc. 2024–27285 Filed 11–20–24; 8:45 am] 3.250 [FR Doc. 2024–27171 Filed 11–20–24; 8:45 am] 8 17 [Disaster Declaration #20718 and #20719; TENNESSEE Disaster Number TN–20017] U.S. Small Business Administration. ACTION: Amendment 2. The Interest Rates are: [FR Doc. 2024–27218 Filed 11–20–24; 8:45 am] 92269 PO 00000 Frm 00184 Fmt 4703 Sfmt 4703 U.S. Small Business Administration. ACTION: Correction. This is a correction of the Presidential declaration of a major disaster for the State of New Mexico E:\FR\FM\21NON1.SGM 21NON1

Agencies

[Federal Register Volume 89, Number 225 (Thursday, November 21, 2024)]
[Notices]
[Pages 92266-92269]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-27218]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101638; File No. SR-NASDAQ-2024-066]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Its Schedule of Credits at Equity 7, Section 118(a)

November 15, 2024.
    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 November 1, 2024, The Nasdaq Stock Market LLC

[[Page 92267]]

(``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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's schedule of credits 
at Equity 7, Section 118(a), as described further below.
    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 the Exchange's 
schedule of credits, at Equity 7, Section 118(a). Specifically, the 
Exchange proposes to introduce a new credit applicable to Tapes A, B, 
and C for displayed quotes (other than Supplemental Orders) that 
provide liquidity. Under the proposed rule change, members will be 
eligible for the new credit of $0.0029 if they meet the following 
criteria: (1) the member adds at least 0.50% of the Consolidated 
Volume, with at least 0.10% of such volume being Tape B securities; and 
(2) the member adds at least 0.15% of Consolidated Volume of non-
displayed liquidity, which includes midpoint orders and Midpoint 
Extended Life Orders (``M-ELO'').
    This proposed change will apply to Tapes A, B, and C. The purpose 
of the new credit structure is to incentivize members to increase their 
liquidity adding activity on the Exchange. By providing an additional 
incentive for members to contribute displayed liquidity, the Exchange 
aims to enhance market quality and improve liquidity.
    The new proposed credit of $0.0029 is in addition to other credits 
the Exchange already offers to member for providing displayed 
liquidity. The Exchange believes that if this incentive successfully 
drives additional liquidity, the resulting increase will enhance 
overall market quality, benefiting all participants.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\3\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\4\ 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.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Proposal Is Reasonable
    The Exchange's proposed change to its schedule of credits is 
reasonable in several respects. As a threshold matter, the Exchange is 
subject to significant competitive forces in the market for equity 
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'. . ..'' \5\
---------------------------------------------------------------------------

    \5\ 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)).
---------------------------------------------------------------------------

    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.'' \6\
---------------------------------------------------------------------------

    \6\ 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. 
For example, clear substitutes to the Exchange exist in the market for 
equity security transaction services. The Exchange is only one of 
several equity venues to which market participants may direct their 
order flow. Competing equity exchanges offer similar tiered pricing 
structures to that of the Exchange, including schedules of rebates and 
fees that apply based upon members achieving certain volume thresholds.
    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. As such, the 
proposal represents a reasonable attempt by the Exchange to increase 
its liquidity and market share relative to its competitors.
    The Exchange believes that it is reasonable to establish a new 
credit of $0.0029 for members that add displayed liquidity when the 
member adds at least 0.50% of Consolidated Volume, of which at least 
0.10% are Tape B securities, and the member adds at least 0.15% of 
Consolidated Volume of non-displayed liquidity (including midpoint 
orders) and Midpoint Extended Life Orders. This proposal is reasonable 
because it will incentivize liquidity adding activity and provide an 
incentive to members that provide additional displayed liquidity to the 
Exchange. The Exchange believes that if such incentive is effective, 
then any ensuring increase in liquidity to the Exchange will improve 
market quality, to the benefit of all participants.
    The Exchange believes that establishing a new credit for members 
that add displayed liquidity is equitable. To the extent that the 
Exchange succeeds in increasing the levels of liquidity and activity on 
the Exchange, the Exchange will experience improvements in its market 
quality, which stands to benefit all market participants. The Exchange 
further believes that the proposed new credit of

[[Page 92268]]

$0.0029 for members providing additional liquidity is equitable because 
it will be applied uniformly to all members that meet the specified 
criteria.
    Any participant that is dissatisfied with the proposal is free to 
shift their order flow to competing venues that provide more generous 
pricing or less stringent qualifying criteria.
The Proposal Is Not Unfairly Discriminatory
    The Exchange believes that the proposed $0.0029 new credit for 
members adding additional liquidity is not unfairly discriminatory. As 
an initial matter, the Exchange believes that nothing about its volume-
based tiered pricing model is inherently unfair; instead, it is a 
rational pricing model that is well-established and ubiquitous in 
today's economy among firms in various industries--from co-branded 
credit cards to grocery stores to cellular telephone data plans--that 
use it to reward the loyalty of their best customers that provide high 
levels of business activity and incent other customers to increase the 
extent of their business activity. It is also a pricing model that the 
Exchange and its competitors have long employed with the assent of the 
Commission. It is fair because it enhances price discovery and improves 
the overall quality of the equity markets.
    The Exchange believes that the proposal to add a new credit for 
members providing additional displayed liquidity (other than 
Supplemental Orders) as described above, is not unfairly 
discriminatory. The new credit is not intended to advantage any 
particular member and will be applied uniformly to all members that 
meet the qualifying criteria. Moreover, the proposal stands to improve 
the overall market quality of the Exchange, to the benefit of all 
market participants, by incentivizing members to increase the extent of 
their liquidity adding activity.
    Any participant that is dissatisfied with the proposal is free to 
shift their order flow to competing venues that provide more generous 
pricing or less stringent qualifying criteria.

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.
Intramarket Competition
    The Exchange does not believe that its proposal will place any 
category of Exchange participant at a competitive disadvantage.
    As noted above, the Exchange's proposal to add a new credit for 
members that add displayed liquidity is intended to have market-
improving effects, to the benefit of all members. Any member can 
satisfy the criteria to qualify for the new credit.
    The Exchange notes that its members are free to trade on other 
venues to the extent they believe that the Exchange's fee schedule is 
not attractive. As one can observe by looking at any market share 
chart, price competition between exchanges is fierce, with liquidity 
and market share moving freely between exchanges in reaction to fee and 
credit changes.
Intermarket Competition
    In terms of inter-market competition, 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, or rebate opportunities available at 
other venues to be more favorable. In such an environment, the Exchange 
must continually adjust its credits and fees to remain competitive with 
other exchanges and with alternative trading systems that have been 
exempted from compliance with the statutory standards applicable to 
exchanges. Because competitors are free to modify their credit and own 
fees in response, and because market participants may readily adjust 
their order routing practices, the Exchange believes that the degree to 
which credit or fee changes in this market may impose any burden on 
competition is extremely limited.
    The proposed new credit is reflective of this competition because, 
as a threshold issue, even as one of the largest U.S. equities 
exchanges by volume, the Exchange has less than 20% market share, which 
in most markets could hardly be categorized as having enough market 
power to burden competition. Moreover, price competition between 
exchanges is fierce, with liquidity and market share moving freely 
between exchanges in reaction to credit and fee changes. This is an 
addition to free flow of order flow to and among off-exchange venues 
which comprises more than 40% of industry volume in recent months.
    The Exchange's proposal to add a new credit is pro-competitive in 
that the Exchange intends for the credit to increase liquidity addition 
activity on the Exchange, thereby rendering the Exchange more 
attractive and vibrant to participants.
    In sum, if the changes proposed herein are unattractive to market 
participants, it is likely that the Exchange will lose market share as 
a result. Accordingly, the Exchange does not believe that the proposed 
change will impair the ability of members 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)(ii) of the Act.\7\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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-2024-066 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-2024-066. This 
file number should be included on the

[[Page 92269]]

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 submissions should refer to file number 
SR-NASDAQ-2024-066 and should be submitted on or before December 12, 
2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Stephanie J. Fouse,
Assistant Secretary.
[FR Doc. 2024-27218 Filed 11-20-24; 8:45 am]
BILLING CODE 8011-01-P


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