66326 Federal Register / Vol. 83, No. 246 / Wednesday, December 26, 2018 / Notices 

12 17 CFR 200.30–3(a)(83). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 73702 

(November 28, 2014), 79 FR 72049 (December 4, 

2014) (‘‘RPI Approval Order’’) (SR–BX–2014–048). 

4See id. 

5A ‘‘Retail Order’’ is defined in BX Rule 

4780(a)(2) by referencing BX Rule 4702, and BX 

Rule 4702(b)(6) says it is an order type with a nondisplay order attribute submitted to the Exchange 

by a RMO. A Retail Order must be an agency order, 

or riskless principal order that satisfies the criteria 

of FINRA Rule 5320.03. The Retail Order must 

reflect trading interest of a natural person with no 

change made to the terms of the underlying order 

of the natural person with respect to price (except 

in the case of a market order that is changed to a 

marketable limit order) or side of market and that 

does not originate from a trading algorithm or any 

other computerized methodology. 

6The term Protected Quotation is defined in 

Chapter XII, Sec. 1(19) and has the same meaning 

as is set forth in Regulation NMS Rule 600(b)(58). 

The Protected NBBO is the best-priced protected 

bid and offer. Generally, the Protected NBBO and 

the national best bid and offer (‘‘NBBO’’) will be the 

same. However, a market center is not required to 

route to the NBBO if that market center is subject 

to an exception under Regulation NMS Rule 

611(b)(1) or if such NBBO is otherwise not available 

for an automatic execution. In such case, the 

Protected NBBO would be the best-priced protected 

bid or offer to which a market center must route 

interest pursuant to Regulation NMS Rule 611. 

7See RPI Approval Order, supra note 3 at 72053. 

8 Id. at 72049. 

9See Securities Exchange Act Release No. 76490 

(November 20, 2015), 80 FR 74165 (November 27, 

2015) (SR–BX–2015–073); Securities Exchange Act 

Release No. 79446 (December 1, 2016), 81 FR 88279 

(December 7, 2016) (SR–BX–2016–065); Securities 

Exchange Act Release No. 82192 (December 1, 

2017), 82 FR 57809 (December 7, 2017) (SR–BX– 

2017–055); and Securities Exchange Act Release 

No. 83539 (June 28, 2018), 83 FR 31203 (July 3, 

2018) (SR–BX–2018–026). 

10A Retail Price Improvement Order is defined in 

BX Rule 4780(a)(3) by referencing BX Rule 4702 

and BX Rule 4702(b)(5) says that it is as an order 

type with a non-display order attribute that is held 

on the Exchange Book in order to provide liquidity 

at a price at least $0.001 better than the NBBO 

through a special execution process described in 

Rule 4780. 

11See RPI Approval Order, supra note 3 at 72051. 

12Concurrently with this filing, the Exchange has 

submitted a request for an extension of the 

exemption under Regulation NMS Rule 612 

previously granted by the Commission that permits 

it to accept and rank the RPI orders in sub-penny 

increments. See Letter from Jeffrey S. Davis, Vice 

President and Deputy General Counsel and 

Secretary, Nasdaq BX, Inc. to Eduardo A. Aleman, 

Assistant Secretary, Securities and Exchange 

Commission dated December 11, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27821 Filed 12–21–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84847; File No. SR–BX– 

2018–063] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the Pilot 

Period for the Exchange’s Retail Price 

Improvement Program Until June 30, 

2019 

December 18, 2018. 

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 

11, 2018, Nasdaq 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to extend the 

pilot period for the Exchange’s Retail 

Price Improvement (‘‘RPI’’) Program (the 

‘‘Program’’), which is set to expire on 

December 31, 2018, for an additional 

period to expire on June 30, 2019. 

The Exchange has designated 

December 11, 2018 as the date the 

proposed rule change becomes effective. 

The text of the proposed rule change 

is available on the Exchange’s website at 

http://nasdaqbx.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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to extend 

the pilot period of the RPI Program,3

currently scheduled to expire on 

December 31, 2018, for an additional 

period to expire on June 30, 2019. 

Background 

In November 2014, the Commission 

approved the RPI Program on a pilot 

basis.4 The Program is designed to 

attract retail order flow to the Exchange, 

and allow such order flow to receive 

potential price improvement. The 

Program is currently limited to trades 

occurring at prices equal to or greater 

than $1.00 per share. Under the 

Program, a new class of market 

participant called a Retail Member 

Organization (‘‘RMO’’) is eligible to 

submit certain retail order flow (‘‘Retail 

Orders’’) 5 to the Exchange. BX members 

(‘‘Members’’) are permitted to provide 

potential price improvement for Retail 

Orders in the form of non-displayed 

interest that is priced more aggressively 

than the Protected National Best Bid or 

Offer (‘‘Protected NBBO’’).6

The Program was approved by the 

Commission on a pilot basis running 

one-year from the date of 

implementation.7 The Commission 

approved the Program on November 28, 

2014.8 The Exchange implemented the 

Program on December 1, 2014 and the 

pilot has since been extended for a one 

year period twice and for an additional 

six month period twice, with it now 

scheduled to end on December 31, 

2018.9

Proposal To Extend the Operation of the 

Program 

The Exchange established the RPI 

Program in an attempt to attract retail 

order flow to the Exchange by 

potentially providing price 

improvement to such order flow. The 

Exchange believes that the Program 

promotes competition for retail order 

flow by allowing Exchange members to 

submit Retail Price Improvement Orders 

(‘‘RPI Orders’’) 10 to interact with Retail 

Orders. Such competition has the ability 

to promote efficiency by facilitating the 

price discovery process and generating 

additional investor interest in trading 

securities, thereby promoting capital 

formation. The Exchange believes that 

extending the pilot is appropriate 

because it will allow the Exchange and 

the Commission additional time to 

analyze data regarding the Program that 

the Exchange has committed to 

provide.11 As such, the Exchange 

believes that it is appropriate to extend 

the current operation of the Program.12

Through this filing, the Exchange seeks 

to amend BX Rule 4780(h) and extend 

the current pilot period of the Program 


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Federal Register / Vol. 83, No. 246 / Wednesday, December 26, 2018 / Notices 66327 

13 15 U.S.C. 78f. 

14 15 U.S.C. 78f(b)(5). 

15 15 U.S.C. 78s(b)(3)(A)(iii). 

16 17 CFR 240.19b–4(f)(6). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change, along with a brief 

description and text of 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 requested that the Commission waive the fiveday pre-filing notice requirement, and the 

Commission has agreed to waive the requirement. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6)(iii). 

21For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

until the earlier of approval of the filing 

to make the Program permanent or June 

30, 2019. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,13

in general, and with Section 6(b)(5) of 

the Act,14 in particular, in that it is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest. 

The Exchange believes that extending 

the pilot period for the RPI Program is 

consistent with these principles because 

the Program is reasonably designed to 

attract retail order flow to the exchange 

environment, while helping to ensure 

that retail investors benefit from the 

better price that liquidity providers are 

willing to give their orders. 

Additionally, as previously stated, the 

competition promoted by the Program 

may facilitate the price discovery 

process and potentially generate 

additional investor interest in trading 

securities. The extension of the pilot 

period will allow the Commission and 

the Exchange to continue to monitor the 

Program for its potential effects on 

public price discovery, and on the 

broader market structure. 

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. 

The proposed rule change extends an 

established pilot program for an 

additional period, to expire on June 30, 

2019, thus allowing the RPI Program to 

enhance competition for retail order 

flow and contribute to the public price 

discovery process. 

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 Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 15 and Rule 

19b–4(f)(6) thereunder.16 Because the 

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, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 17 and Rule 19b–4(f)(6) 

thereunder.18

A proposed rule change filed under 

Rule 19b–4(f)(6) 19 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),20 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposed 

rule change may become operative 

immediately. The Commission believes 

that waiving the 30-day operative delay 

is consistent with the protection of 

investors and the public interest, 

because waiver would allow the pilot 

period to continue uninterrupted after 

its current expiration date of December 

31, 2018, thereby avoiding any potential 

investor confusion that could result 

from temporary interruption in the 

Program. For this reason, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposal operative upon filing.21

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BX–2018–063 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–BX–2018–063. 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 (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 website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

offices of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BX–2018–063, and should 

be submitted on or before January 16, 

2019. 


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66328 Federal Register / Vol. 83, No. 246 / Wednesday, December 26, 2018 / Notices 

22 17 CFR 200.30–3(a)(12) and (59). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5A Member is defined as ‘‘any registered broker 

or dealer that has been admitted to membership in 

the Exchange.’’ See Exchange Rule 1.5(n). 

6 ‘‘ADV’’ means average daily volume calculated 

as the number of shares added or removed, 

combined, per day. ADAV and ADV are calculated 

on a monthly basis. 

7 ‘‘TCV’’ means total consolidated volume 

calculated as the volume reported by all exchanges 

and trade reporting facilities to a consolidated 

transaction reporting plan for the month for which 

the fees apply. 

8Fee code HI is appended to non-displayed 

orders that receive price improvement and add 

liquidity. 

9See New York Stock Exchange Price List 2018, 

which provides that the equity per share credit for 

all Midpoint Passive Liquidity (‘‘MPL’’) orders that 

provide liquidity, other than MPL orders from 

Designated Market Makers (‘‘DMMs’’), will receive 

a rebate of $0.00275 per share if a Member adds an 

ADV greater than or equal to 0.14% Tape A NYSE 

consolidated average daily volume (‘‘CADV’’), 

excluding any liquidity added by a DMM. 

10 15 U.S.C. 78f. 

11 15 U.S.C. 78f(b)(4). 

12See New York Stock Exchange Price List 2018, 

which provides that the equity per share credit for 

all MPL orders that provide liquidity, other than 

MPL orders from DMMs, will receive a rebate of 

$0.00275 per share if a Member adds an ADV 

greater than or equal to 0.14% Tape A CADV, 

excluding any liquidity added by a DMM. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27822 Filed 12–21–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84844; File No. SR– 

CboeBZX–2018–087] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend the 

Fee Schedule 

December 18, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

3, 2018, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II and III 

below, which Items have been prepared 

by the Exchange. The Exchange has 

designated the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. 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 is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the fee schedule applicable to 

Members and non-Members 5 of the 

Exchange pursuant to BZX Rules 15.1(a) 

and (c). Changes to the fee schedule 

pursuant to this proposal are effective 

upon filing. 

The text of the proposed rule change 

is available on the Exchange’s website 

(http://www.cboe.com/AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

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 its 

fee schedule applicable to its equities 

trading platform (‘‘BZX Equities’’) to 

increase the rebate under the NonDisplayed Add Volume Tape A Tier 1, 

effective December 3, 2018. 

The Exchange currently provides a 

standard rebate of $0.00150 per share 

for non-displayed orders that add 

liquidity. The Exchange also provides 

an enhanced rebate under NonDisplayed Add Volume Tape A Volume 

Tier, Tier 1 under Footnote 1 (‘‘HV 

Volume Tier’’) which is available for 

qualifying non-displayed orders that 

add liquidity (Tape A), (i.e., orders 

which yield fee code HV). Particularly, 

under the HV Volume Tier, a Member 

may receive an enhanced rebate of 

$0.00260 per share where they add an 

ADV 6 greater than or equal to 0.20% of 

the TCV 7 as Non-Displayed orders that 

yield fee codes HI or HV.8 The Exchange 

proposes to increase the HV Volume 

Tier rebate from $0.00260 per share to 

$0.00275 per share. The Exchange 

believes the proposed change will 

encourage Members to increase nondisplayed add liquidity on the 

exchange. The Exchange also notes that 

another Exchange offers the same rebate 

amount for similar transactions.9

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with the objectives of Section 6 of the 

Act,10 in general, and furthers the 

objectives of Section 6(b)(4),11 in 

particular, as it is designed to provide 

for the equitable allocation of reasonable 

dues, fees and other charges among its 

Members and other persons using its 

facilities. The Exchange also notes that 

it operates in a highly-competitive 

market in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. The 

proposed rule changes reflect a 

competitive pricing structure designed 

to incentivize market participants to 

direct their order flow to the Exchange. 

The Exchange believes increasing the 

rebate under the HV Volume Tier is 

reasonable because Members are 

provided an opportunity to receive an 

enhanced rebate for Non-Displayed 

orders that add liquidity and is a 

reasonable means to encourage 

Members to increase their liquidity on 

the Exchange. The Exchange also notes 

that another Exchange offers a similar 

rebate.12 The Exchange also believes the 

proposed fee change is equitable and 

non-discriminatory because it applies 

uniformly to all Members. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 


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