[Federal Register Volume 79, Number 227 (Tuesday, November 25, 2014)]
[Notices]
[Pages 70256-70258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-27844]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-73646; File No. SR-BX-2014-056]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Clarify
Rule 7018(a) with Respect to Execution and Routing of Orders in
Securities Priced at $1 or More Per Share
November 19, 2014.
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 12, 2014, NASDAQ OMX BX, Inc. (``BX'' or ``Exchange'')
filed with the Securities and Exchange Commission (``SEC'' or
``Commission'') the proposed rule change as described in Items I and II
below, which Items have been prepared by the Exchange. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to make minor clarifying changes to Rule
7018(a) with respect to execution and routing of orders in securities
priced at $1 or more per share.
The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaqomxbx.cchwallstreet.com, 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.
[[Page 70257]]
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 make minor clarifying
changes concerning the use and definition of the term ``Consolidated
Volume'' provided in Rule 7018(a). Consolidated Volume is currently
defined as the total consolidated volume reported to all consolidated
transaction reporting plans by all exchanges and trade reporting
facilities during a month, excluding executed orders with a size of
less than one round lot.\3\ Consolidated Volume is used as a measure in
determining member firm liability for certain charges, and eligibility
for certain credits, for participation in BX. The Exchange compares a
member firm's equity transactions in BX to Consolidated Volume to
determine how impactful its particular order activity in BX is in
relation to overall equity market volume. The definition of
Consolidated Volume is currently provided under the QMM Tier 1
eligibility requirements of Rule 7018(a), although the term is used in
preceding portions of the rule. In an effort to make the rule clearer,
the Exchange is proposing to move the definition of Consolidated Volume
to the beginning of Rule 7018(a). The Exchange is also capitalizing the
term in certain fees and credits, which currently precede the
definition of Consolidated Volume under the rule, to make clear that
they reference the defined term. Lastly, the Exchange is proposing to
delete duplicative language from Rule 7018(a)(2) under the QMM Tier 1
eligibility requirements that concerns the exclusion of the day of the
annual Russell Investments Indexes. The Exchange notes that the
language is included in the definition of Consolidated Volume and is
therefore redundant.
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\3\ For purposes of calculating Consolidated Volume and the
extent of a member's trading activity, expressed as a percentage of
or ratio to Consolidated Volume, the Exchange excludes the date of
the annual reconstitution of the Russell Investments Indexes from
both total Consolidated Volume and the member's trading activity.
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The Exchange is also proposing to clarify the definition of
Consolidated Volume. The current definition of Consolidated Volume does
not expressly state that it encompasses transactions in equity
securities only. As noted above, Consolidated Volume is used to
determine how impactful a member firm's order activity in BX is in
relation to overall equity market volume, thus allowing the Exchange to
consider the member firm's contribution to BX as compared to what
market participants provide to the larger equity markets. The Exchange
believes that adding language to make clear that the Consolidated
Volume includes only equities volume will serve to avoid possible
misinterpretation that the rule may include volume outside of the
equities markets. Accordingly, the Exchange is proposing to add
language to the definition of Consolidated Volume under Rule 7018(a) to
clarify that it applies only to equity securities.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6 of the Act,\4\ in general, and furthers the objectives
of Sections 6(b)(4) and 6(b)(5) of the Act,\5\ 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 or system which the Exchange operates or controls, and is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest; and are not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. Specifically, the proposed changes further these
objectives because they make the rule more clear, thereby helping avoid
potential investor confusion on how the credits and charges that use
the definition are applied. The Exchange notes that it is not changing
how the rule is applied in any way, and therefore the fees and credits
thereunder continue to be reasonable and equitably allocated among
member firms.
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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(4) and (5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
Specifically, the proposed changes do not alter the meaning or
application of the fees and credits provided under Rule 7018(a), and
therefore do not affect competition in any respect.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \6\ and Rule
19b-4(f)(6) \7\ thereunder.
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\6\ 15 U.S.C. 78s(b)(3)(a)(ii).
\7\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \8\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay period to allow the
Exchange to immediately implement changes to rule language that will
serve to enhance the clarity concerning the application of fees
assessed and credits provided under the rule. The Commission believes
that the proposed rule change will enhance clarity and avoid possible
misinterpretation of the rule. For these reasons, the Commission
believes that the proposed rule change presents no novel issues and
that waiver of the 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission designates the proposed rule change to be operative upon
filing.\9\
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\8\ 17 CFR 240.19b-4(f)(6)(iii).
\9\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(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
[[Page 70258]]
it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.\10\
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\10\ 15 U.S.C. 78s(b)(3)(C).
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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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-BX-2014-056 on the subject line.
Paper Comments
Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BX-2014-056. 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 Web site (http://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 Web site 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; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-BX-2014-056 and should be
submitted on or before December 16, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-27844 Filed 11-24-14; 8:45 am]
BILLING CODE 8011-01-P