Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 84437 

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

2 17 CFR 240.19b–4. 

each rescindment justification, the 

applicable SORNs, and an account of 

what happened to the records is as 

follows: 

1. SEC–19: Division of Corporation 

Finance and Support Office Working 

Files. The records in SEC–19 are 

duplicative of and share the same 

purpose as the records in SEC–68: SEC’s 

Division of Corporation Finance 

Records, 83 FR 6892 (February 15, 

2018). 

2. SEC–29: Agency Correspondence 

Tracking System (ACTS). The records in 

SEC–29 are duplicative of and share the 

same purpose as the records in SEC–65: 

Investor Response Information System 

(IRIS), 76 FR 30213 (May 24, 2011). 

3. SEC–58: System for Enforcement 

Case Tracking and Routing (SECTR). 

The records in SEC–58 are duplicative 

and share the same purpose as the 

records in SEC–70: SEC’s Division of 

Trading and Market Records, 83 FR 

6892 (February 15, 2018). 

4. SEC–61: Municipal Advisor 

Records The records in SEC 61 are 

duplicative and share the same purpose 

as the records in SEC–62. 

Correspondence Files Pertaining to 

Municipal Advisors; Municipal Advisor 

Logs. 

History: 

System 

No. 

Federal Register Number and 

publication date 

SEC–19 ....... Division of Corporation Finance and Support Office 

Working Files 40 FR 39253 

(August 27, 1975). 

SEC–29 ....... Agency Correspondence 

Tracking System (ACTS) 40 

FR 39253 (August 27, 

1975) and 62 FR 47887 

(September 11, 1997). 

SEC–58 ....... System for Enforcement Case 

Tracking and Routing 

(SECTR) 74 FR 36281 (July 

22, 2009). 

SEC–61 ....... Municipal Advisor Records 75 

FR 51854 (August 23, 

2010). 

By the Commission. 

Dated: December 21, 2020. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2020–28600 Filed 12–23–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90719; File No. SR– 

NASDAQ–2020–087] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend the 

Exchange’s Transaction Credits and 

Charges at Equity 7, Sections 114 and 

118 

December 18, 2020. 

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 

7, 2020, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) 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 

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 transaction credits [sic] at 

Equity 7, Sections 114 and 118, 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 

Presently, the Exchange provides its 

members with various credits for 

executing orders in securities priced at 

or above $1 that add liquidity to the 

Exchange and charges them various fees 

for executing orders, also in securities 

priced at or above $1 that remove 

liquidity from the Exchange, as set forth 

in Equity 7, Section 118(a) of the 

Exchange’s Rules. Members may qualify 

for tiers of discounted fees and premium 

credits based, in part, upon the volume 

of their activities in securities priced at 

or above $1 on the Exchange as a 

percentage of total ‘‘Consolidated 

Volume.’’ 

Pursuant to Equity 7, Section 118(a), 

the term ‘‘Consolidated Volume’’ means 

the total consolidated volume reported 

to all consolidated transaction reporting 

plans by all exchanges and trade 

reporting facilities during a month in 

equity securities, excluding executed 

orders with a size of less than one round 

lot. For purposes of calculating 

Consolidated Volume and the extent of 

a member’s trading activity the date of 

the annual reconstitution of the Russell 

Investments Indexes is excluded from 

both total Consolidated Volume and the 

member’s trading activity. 

Similarly, in Equity 7, Section 114, 

the Exchange offers several special 

pricing programs that are based, in part, 

upon members’ activities in securities 

priced at or more than $1 relative to 

total Consolidated Volume. These 

programs provide credits to Qualified 

Market Makers, to members that 

establish the National Best Bid or Offer, 

and to members that grow their activity 

on the Exchange to a specified extent. 

Generally, the ratio of consolidated 

volumes in securities priced at or above 

$1 (‘‘dollar plus volume’’) relative to 

securities priced below a dollar (‘‘subdollar volume’’) has been stable from 

month to month, such that 

‘‘Consolidated Volume’’ has been a 

reasonable baseline for determining 

tiered and special pricing for members 

that execute dollar plus volume on the 

Exchange. 

In December 2020, however, subdollar volume has increased 

dramatically and unusually relative to 

dollar plus volume due to activity 

concentrated in a handful of noninstitutional firms, trading mostly one 

particular sub-dollar stock. 

Additionally, this volume spike may 

have been exacerbated by changes to 

other exchanges’ pricing schemes, 


tkelley on DSKBCP9HB2PROD with NOTICES
84438 Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 

3 15 U.S.C. 78f(b). 

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

5See, e.g., Securities Exchange Act Release No. 

34–90339 (November 4, 2020), 85 FR 71689 

(November 10, 2020) (SR–PHLX–2020–50); 

Securities Exchange Act Release No. 34–85025 (Jan 

1, 2019), 84 FR 2611 (February 7, 2019) (SR–ISE– 

2018–102). 

which have incentivized sub-dollar 

trading. 

Trading volume in just this one subdollar security comprised 9.68 percent 

of daily volume on December 1, 2020, 

and thus far in December 2020, subdollar volume comprises 15.75 percent 

of Consolidated Volume. By 

comparison, sub-dollar volume 

comprised only 8.69 percent of 

Consolidated Volume, on average, 

during the preceding 12 months. 

This anomalous rise in sub-dollar 

volume stands to have a material 

adverse impact on members’ 

qualifications for dollar plus pricing 

tiers and special pricing programs 

because such qualifications depend 

members upon achieving threshold 

percentages of volumes as a percentage 

of Consolidated Volume, and the 

extraordinary rise in sub-dollar volume 

stands to dilute Consolidated Volume in 

December 2020. As a result, members 

may find it more difficult, if not 

practically impossible, to qualify for or 

to continue to qualify for their existing 

dollar plus pricing tiers and incentives 

programs, even if their dollar plus 

volumes have not diminished relative to 

prior months. The Exchange notes that 

its members mostly have not been 

responsible for the spike in sub-dollar 

volume, such that they are likely to 

experience these adverse effects fully. 

The Exchange believes that it would 

be unfair for its members that execute 

significant dollar plus volumes on the 

Exchange to fail to achieve or to lose 

their existing qualifications for tiered or 

special pricing for such volumes in 

December 2020 due to anomalous 

behavior which is entirely extraneous to 

them. 

The Exchange is presently assessing 

whether the current spike in sub-dollar 

volumes is an isolated event or whether 

instead it is likely to recur. If the latter, 

the Exchange may wish to propose 

adjustments to its pricing formulas 

going forward to avoid extraordinary 

spikes in sub-dollar volumes from 

adversely affecting the pricing of dollar 

plus stock executions. In the interim, 

however, the Exchange believes that it 

would be fair and appropriate to take 

action to avoid adverse impacts for 

December 2020 pricing. 

Accordingly, the Exchange proposes 

to amend its pricing schedule at Equity 

7, Sections 114 and 118 to state that for 

purposes of determining which of the 

execution charges and credits listed 

therein a member qualifies for during 

the month of December 2020, the 

Exchange will calculate the member’s 

volume and total Consolidated Volume 

twice. First, it will calculate the 

member’s volume and Consolidated 

Volume as presently set forth in Equity 

7, Section 118(a). Second, it will 

calculate the member’s volume and 

Consolidated Volume by excluding 

volume and Consolidated Volume that 

consists of executed orders in securities 

priced less than $1. Therafter, the 

Exchange proposes to evaluate which of 

these two member volume and 

Consolidated Volume calculations 

would qualify members for the most 

advantageous credits and charges for the 

month of December 2020 and then it 

will apply those credits and charges to 

its members. Thus, if but for the subdollar anomaly, a member would 

qualify for a higher credit or a lower fee 

tier in December, then the Exchange 

will apply that higher credit or lower fee 

tier to the member’s trading activity 

during the month. 

Impact of the Changes 

As of December 4, 2020, the Exchange 

assesses that several members are at risk 

of failing to qualify for pricing tiers or 

for special inventive programs in the 

month of December due to sub-dollar 

activity. The proposal will ensure that 

no member suffers any such adverse 

impact. It will also ensure that members 

whose volumes in December would 

otherwise newly qualify them for better 

pricing tiers or special incentive 

programs will be able to achieve such 

qualifications. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,3 in general, and further 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 also consistent with Section 

11A of the Act relating to the 

establishment of the national market 

system for securities. 

The Exchange believes that the 

proposal is reasonable and equitable 

because in its absence, members may 

fail to qualify their existing pricing tiers 

and programs or fail to qualify for better 

pricing tiers or programs due to factors 

that are unrelated to the volumes they 

execute on the Exchange as well as the 

total consolidated volume of dollar plus 

securities executed on all trading 

venues. The Exchange does not wish to 

penalize members that execute 

significant volumes on the Exchange 

due to anomalous and extraneous 

trading activities of a small number of 

firms in sub-dollar securities. The 

proposed rule would seek to avoid such 

a penalty by determing whether 

calculating member volume and total 

Consolidated Volume for December to 

include or exclude sub-dollar volume 

would result in Exchange members 

qualifying for the most advantageous 

credits and charges, and then applying 

the calculations that would result in the 

pricing that is most advantageous to 

each member. 

The Exchange notes that other 

exchanges have taken similar steps to 

avoid penalizing their members for 

unusual occurrences that would 

otherwise cause members to fail to 

qualify for volume-based tiered pricing.5

The Exchange believes that the 

proposed rule change is an equitable 

allocation and is not unfairly 

discriminatory because the Exchange 

intends for it to ensure that no member 

suffers adverse pricing impacts in 

December 2020 due to an anomalous 

spike in sub-dollar volumes. That is, the 

Exchange does not intend for the 

proposal to advantage any particular 

member; rather, it intends for the 

proposal to avoid disadvantaging any 

member. 

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. 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 fees and credits 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 own 

fees and credits in response, and 

because market participants may readily 

adjust their order routing practices, the 

Exchange believes that the degree to 

which fee and credit changes in this 


tkelley on DSKBCP9HB2PROD with NOTICES
Federal Register / Vol. 85, No. 248 / Monday, December 28, 2020 / Notices 84439 

6 15 U.S.C. 78s(b)(3)(A)(ii). 7 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

market may impose any burden on 

competition is extremely limited. 

In this instance, the proposal does not 

impose a burden on competition 

because the Exchange’s execution 

services are completely voluntary and 

subject to extensive competition both 

from other exchanges and from offexchange venues. If the changes 

proposed herein are unattractive to 

market participants, it is likely that the 

Exchange will lose market share as a 

result. 

The Exchange does not believe that 

the proposal will burden intra-market 

competition. As noted above, the 

proposal will simply help to ensure that 

no member suffers a pricing 

disadvantage in December 2020 due to 

an anomalous spike in sub-dollar 

volumes which dilutes Consolidated 

Volume. It is not intended to provide a 

competitive advantage to any particular 

member. 

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.6

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2020–087 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–2020–087. 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 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2020–087 and 

should be submitted on or before 

January 19, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–28513 Filed 12–23–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90722; File No. SR– 

NYSEAMER–2020–86] 

Self-Regulatory Organizations; NYSE 

American LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Shorten the Time 

Period Before a Letter of Acceptance, 

Waiver, and Consent Under Rule 9216 

and an Uncontested Offer of 

Settlement Under Rule 9270(f) 

Becomes Final 

December 18, 2020 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on December 

17, 2020, NYSE American LLC (‘‘NYSE 

American’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. 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 shorten the 

time period before a letter of acceptance, 

waiver, and consent under Rule 9216 

and an uncontested offer of settlement 

under Rule 9270(f) becomes final and 

the corresponding time period to 

request review of these settlements 

under Rule 9310 from 25 days to 10 

days. The Exchange also proposes to 

define ‘‘affiliate’’ in Rules 9268 and 

9310 by reference to the definition in 

the Act, thereby harmonizing its rules 

with those of its affiliates. The proposed 

rule change is available on the 

Exchange’s website at www.nyse.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 

self-regulatory organization 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 those statements may be examined at 


tkelley on DSKBCP9HB2PROD with NOTICES