86598 Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Notices 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 34–79290 

(November 10, 2016), 81 FR 81184 (November 17, 

2016) (SR–NASDAQ–2016–111). 

4An Order with Reserve Size may be referred to 

as a ‘‘Reserve Order.’’ 

5Pursuant to Equity 4, Section 4702(b)(1)(A), a 

‘‘Price to Comply Order’’ is an Order Type designed 

to comply with Rule 610(d) under Regulation NMS 

by avoiding the display of quotations that lock or 

cross any Protected Quotation in a System Security 

during Market Hours. The Price to Comply Order 

is also designed to provide potential price 

improvement. When a Price to Comply Order is 

entered, the Price to Comply Order will be executed 

against previously posted Orders on the Exchange 

Book that are priced equal to or better than the price 

of the Price to Comply Order, up to the full amount 

of such previously posted Orders, unless such 

executions would trade through a Protected 

Quotation. 

6The Exchange notes that a Reserve Order that 

does not execute fully upon initial order entry will 

behavior in the same manner as described in this 

Proposal if the Displayed portion of the Reserve 

Order would lock or cross a resting Displayed Order 

upon entry. 

7 If a Displayed Order posts to the Nasdaq Book 

and locks a resting Non-Displayed Order with the 

Trade Now attribute enabled, then consistent with 

the definition of Trade Now, as set forth in Equity 

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 such 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Europe and on ICE 

Clear Europe’s website at https://

www.theice.com/clear-europe/ 

regulation. 

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–ICEEU–2020–017 

and should be submitted on or before 

January 21, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2020–28809 Filed 12–29–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90793; File No. SR– 

NASDAQ–2020–090] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Amend Equity 4, Section 4703 

December 23, 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 

15, 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 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 amend 

Equity 4, Section 4703, as described 

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 Exchange proposes to amend 

Equity 4, Section 4703(h), which 

describes Orders with ‘‘Reserve Size,’’ 3

to clarify its existing practice relating to 

replenishments of such Orders. As set 

forth in Section 4703(h), ‘‘Reserve Size’’ 

is an Order Attribute that permits a 

Participant to stipulate that an Order 

Type that is Displayed may have its 

displayed size replenished from 

additional non-displayed size.4

The Exchange established the Reserve 

Orders with the intention that it would 

always act as a provider of liquidity 

upon replenishment. Indeed, this is 

what participants have come to expect 

from the operation of Reserve Orders. 

In late 2016, however, a rule filing 

introduced a rare circumstance where a 

Reserve Order, upon replenishment of 

its Displayed Order component, 

theoretically could become a liquidity 

remover under the existing Exchange 

Rules. 

An example of the rare theoretical 

circumstance is as follows. Order 1 is a 

Price to Comply Order to buy at $10.00 

resting on the Nasdaq book with 100 

shares displayed and 3,000 shares in 

reserve (for a total order size of 3,100 

shares). Order 2 is an Order to sell 100 

shares at $10.00, which executes against 

the 100 displayed shares from Order 1 

upon entry. Order 3 is a Post Only order 

to sell 1,000 shares at $10.00 that is 

entered and posts to the Book before 

Order 1 has been replenished. 

Following the rules of the Post Only 

Order Type, Order 3 does not execute 

against the non-displayed interest 

resting at $10.00, but instead posts at 

the locking price. Therefore, upon 

replenishment, the new 100 shares of 

Order 1 would lock Order 3 at $10.00. 

As directed by the rule governing Price 

to Comply Orders,5 Order 1 would 

execute against Order 3 at $10.00 as a 

liquidity taker. 

The Exchange did not account for this 

scenario when drafting its rules. In fact, 

the Exchange does not presently handle 

this scenario as described above. 

Instead, upon replenishment, the 

Exchange reprices the new displayed 

Price to Comply Order such that it does 

not execute against Order 3 as a 

liquidity taker. 

However, the Exchange now proposes 

to eliminate any unintended 

inconsistency as to how it handles this 

scenario and make clear in its Rules that 

a Reserve Order is an adder of liquidity 

after posting on the Nasdaq Book in all 

circumstances. Specifically, the 

Exchange proposes to amend the Rule to 

state that if the new Displayed Order 

would lock an Order that posted to the 

Nasdaq Book before replenishment can 

occur, the Displayed Order will post at 

the locking price if the resting Order is 

Non-Display or will be repriced, ranked, 

and displayed at one minimum price 

increment lower (higher) than the 

locking price if the resting order to sell 

(buy) is Displayed.6 7

Federal Register / Vol. 85, No. 250 / Wednesday, December 30, 2020 / Notices 86599 

4, Section 4703(m), the Trade Now functionality 

would apply and the Non-Displayed Order would 

be able to execute against the locking Displayed 

Order as a liquidity taker. If a locked Non-Displayed 

Order does not have the Trade Now attribute 

enabled, then new incoming orders will be eligible 

to execute against the Displayed Order. 

8The Exchange proposes to correct a nonsubstantive typographical error in the existing rule 

text by removing the word ‘‘the’’ from the following 

sentence: ‘‘For example, if a Price to Comply Order 

with Reserve Size . . . and the 150 shares. . . .’’ 

9 15 U.S.C. 78f(b). 

10 15 U.S.C. 78f(b)(5). 11 17 CFR 200.30–3(a)(12). 

Again, in the above example, the 

proposed rule will prevent Order 1 from 

becoming a liquidity remover because 

upon replenishment, the new Displayed 

Order will not attempt to execute 

against Order 3, but instead it will post 

to the Nasdaq Book and display at a 

price of $9.99, while the remaining 

2,900 non-display shares in reserve will 

remain posted at $10.00. 

By posting new Displayed Orders 

without attempting to execute, the 

Displayed Order will avoid removing 

liquidity upon replenishment.8

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,9 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,10

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 proposed rule change is 

consistent with the Act because it will 

help ensure that the Exchange’s Rule 

governing Reserve Orders will be 

consistent with the original intention of 

the Exchange and the expectation of 

participants that such Orders, after 

posting on the Nasdaq Book, will always 

be liquidity providers and not liquidity 

takers. It would also ensure that the 

Exchange’s Order Types operate the 

same way during a race condition as 

they do during normal conditions. The 

proposal would eliminate any ambiguity 

under the existing rules as to whether a 

Reserve Order would take liquidity 

when a locking order posts to the 

Exchange book prior to the Reserve 

Order completing its replenishment (or 

prior to the Displayed portion of a 

Reserve Order posting to the Exchange 

Book for the first time). Thus, the 

proposal would ensure that the 

Exchange’s Rules are transparent and 

clear about how the System processes 

Reserve Orders. 

Finally, the proposal is consistent 

with the Act because it would correct a 

non-substantive typographical error in 

the Rule text, which will improve its 

readability and clarity, to the benefit of 

the public and investors. 

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. Again, 

Exchange intends for the proposed rule 

change to only eliminate an 

inconsistency as to how it handles a rare 

circumstance that causes the System to 

process Reserve Orders in an 

unintended manner. The Exchange does 

not anticipate this proposal will have 

any impact on competition whatsoever. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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–2020–090 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–2020–090. 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–2020–090 and 

should be submitted on or before 

January 29, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2020–28891 Filed 12–29–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–291, OMB Control No. 

3235–0328] 

Proposed Collection and Comment 

Request for Form ID 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Extension: 

Form ID 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Commission