80358 Federal Register / Vol. 88, No. 221 / Friday, November 17, 2023 / Notices 

17See Notice, supra note 3 at 68835. 

18Compare proposed Rules 4.5(g) and 

4.13(a)(2)(C) to Rules 4.5(e) and 4.13(a)(2)(B), 

respectively. See Notice, supra note 3 at 68835. 

19The Exchange notes it currently lists quarterly 

expirations on index options pursuant to Rule 

4.13(c) (regarding quarterly index expirations). 

20See Notice, supra note 3 at 68835. 

21See id. 

22See id. 

23See id. 

24See id. 

25See id. 

26See id. 

27See Securities Exchange Act Release No. 98456 

(September 20, 2023), 88 FR 66091 at 66092 

(September 26, 2023) (SR–CBOE–2023–020). 

28See supra notes 23–25 and accompanying text. 

29 15 U.S.C. 78f(b)(5). 

30 15 U.S.C. 78s(b)(2). 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

participants to transact in the index and 

ETF options listed pursuant to the 

proposed rule change based on their 

timing as needed and allow them to 

tailor their investment and hedging 

needs more effectively.17 Further, the 

Exchange notes the proposed terms of 

Monthly Options Series, including the 

limitation to five index and ETF option 

classes, are substantively the same as 

the current terms of Quarterly Options 

Series.18 The Exchange states that it 

currently lists Quarterly Options Series 

in certain index 19 and ETF classes, 

which expire at the close of business at 

the end of each calendar quarter, and 

has not experienced any market 

disruptions nor issues with capacity.20

The Exchange believes limiting Monthly 

Options Series to five classes will 

ensure the addition of these new series 

will have a negligible impact on the 

Exchange’s and Options Price Reporting 

Authority’s quoting capacity.21 The 

Exchange represents it has the necessary 

systems capacity to support new options 

series that will result from the 

introduction of Monthly Options 

Series.22

The Exchange represents its current 

surveillance programs will apply to 

Monthly Options Series and will 

properly monitor trading in the 

proposed Monthly Options Series.23

The Exchange’s surveillance programs 

currently in place to support and 

properly monitor trading in Quarterly 

Options Series, as well as Short Term 

Option Series and standard expiration 

series, will apply to the proposed 

Monthly Options Series.24 The 

Exchange believes its surveillances 

continue to be designed to deter and 

detect violations of its Rules, including 

position and exercise limits and 

possible manipulative behavior, and 

these surveillances will apply to 

Monthly Options Series.25 Further, the 

Exchange does not believe the proposed 

rule change raises any unique regulatory 

concerns because existing safeguards— 

such as position and exercise limits 

(and the aggregation of options 

overlying the same index or ETF) and 

reporting requirements—would 

continue to apply.26

As noted above, the Exchange 

currently has Quarterly Options Series 

for up to five ETF or index classes. In 

addition, the Commission recently 

approved a proposal by the Exchange to 

permanently establish a Nonstandard 

Expiration Program, which permits, 

among other things, the listing and 

trading of broad-based index options 

with end of month expirations.27 The 

Commission believes that the proposed 

Monthly Options Series, which the 

Exchange proposes to limit to a total of 

five ETF or index classes, strikes a 

reasonable balance between the 

Exchange’s desire to offer a wider array 

of investment opportunities and the 

need to avoid unnecessary proliferation 

of options series and the corresponding 

increase in quotes. Further, the 

Exchange has represented that it has an 

adequate surveillance program in place 

to detect manipulative trading in the 

Monthly Options Series and has the 

necessary systems capacity to support 

the new options series.28 The 

Commission expects the Exchange, 

consistent with its Monthly Options 

Series delisting policy, to continue to 

monitor for option series with little or 

no open interest and trading activity 

and to act promptly to delist such 

options in order to mitigate the number 

of options series with no open interest. 

Accordingly, the Commission finds 

that the proposed rule change is 

consistent with Section 6(b)(5) of the 

Act 29 and the rules and regulations 

thereunder applicable to a national 

securities exchange. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,30 that the 

proposed rule change (SR–CBOE–2023– 

049) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25384 Filed 11–16–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98912; File No. SR– 

NASDAQ–2023–043] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Equity 7, Section 118 

November 13, 2023. 

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, 2023, The Nasdaq Stock Market LLC 

(‘‘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 and fees 

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://listing

center.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 (i) eliminate a credit to 

members for displayed quotes/orders 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 88, No. 221 / Friday, November 17, 2023 / Notices 80359 

3The fee applies to each DOTI Order that exceeds 

the 300 to 1 ratio. In calculating daily average DOTI 

Orders, the Exchange excludes the day with the 

highest ratio of DOTI Orders to executions. 

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

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

6NetCoalition 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)). 

7 Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

(other than Supplemental Orders or 

Designated Retail Orders) that provide 

liquidity and (ii) eliminate a fee for 

routing orders at Equity 7, Section 

118(a). 

The Exchange proposes to eliminate 

the $0.0026 per share executed credit 

for securities in Tapes A, B, and C 

offered to a member that, through one or 

more of its Nasdaq Market Center 

MPIDs: (i) provides shares of liquidity 

in all securities that represent equal to 

or greater than 0.15% of Consolidated 

Volume; (ii) increases the extent to 

which it provides liquidity in all 

securities as a percentage of 

Consolidated Volume by 20% or more 

during the month relative to the month 

of May 2021; and (iii) has a ratio of at 

least 50% NBBO liquidity provided (as 

defined in Equity 7, Section 114(g)) to 

liquidity provided by displayed quotes/ 

orders (other than Supplemental Orders 

or Designated Retail Orders) during the 

month. The Exchange proposes to 

eliminate this credit because it is not 

heavily utilized and includes a baseline 

month of May 2021 for the growth 

element of the credit, which is no longer 

a relevant benchmark. As such, this 

credit no longer provides a growth 

incentive that is aligned with the 

Exchange’s needs. The Exchange also 

seeks to simplify its schedule of credits. 

The Exchange has limited resources to 

allocate to incentives and it must, from 

time to time, reallocate those resources 

to maximize their net impact on the 

Exchange, market quality, and 

participants. 

Additionally, the Exchange proposes 

to eliminate the $0.01 per order charge 

for round lot or mixed lot DOTI Orders, 

incurred when, during the month: (i) a 

market participant sends an average of 

more than 10,000 DOTI Orders per day 

through one or more of its MPIDs; and 

(ii) the ratio of DOTI Orders to 

executions exceeds 300 to 1.3 The 

Exchange seeks to simplify its charges 

for routed orders by eliminating such 

fee. The Exchange has limited resources 

to devote to incentive programs, and it 

is appropriate for the Exchange to 

reallocate these incentives periodically 

in a manner that best achieves the 

Exchange’s overall mix of objectives. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

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, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposed changes to 

its schedule of credits and fees are 

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 brokerdealers 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’. . . .’’ 6

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.’’ 7

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 it is 

reasonable, equitable, and not unfairly 

discriminatory to eliminate the 

Exchange’s $0.0026 per share executed 

transaction credit and the Exchange’s 

$0.01 fee for routing orders. The 

Exchange seeks to simplify and 

streamline its schedule of credits by 

eliminating the $0.0026 per share 

executed credit that is not heavily 

utilized and is no longer based on a 

relevant benchmark, as described above. 

The Exchange also seeks to eliminate 

the $0.01 charge for round lot or mixed 

lot DOTI Orders described above in an 

effort to simplify and streamline its fees 

for routing orders. Together, the 

proposed changes are designed to better 

align with the Exchange’s needs. The 

Exchange has limited resources to 

devote to incentive programs, and it is 

appropriate for the Exchange to 

reallocate these incentives periodically 

in a manner that best achieves the 

Exchange’s overall mix of objectives. 

Those participants that are 

dissatisfied with the eliminations from 

the Exchange’s schedule of credits and 

fees are free to shift their order flow to 

competing venues that provide 

incentives or qualifying criteria more in 

line with participants’ objectives. 

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 

proposals will place any category of 

Exchange participant at a competitive 

disadvantage. 

The Exchange intends for the 

proposed changes to simplify its credit 

and fee schedule, remove a credit with 

an outdated benchmark month, preserve 

its limited resources for optimized 

effect, and better align the schedule of 

credits and fees with the Exchange’s 

overall mix of objectives. The Exchange 

notes that its members are free to trade 

on other venues to the extent they 

believe that these proposals are not 


khammond on DSKJM1Z7X2PROD with NOTICES
80360 Federal Register / Vol. 88, No. 221 / Friday, November 17, 2023 / Notices 

8 15 U.S.C. 78s(b)(3)(A)(ii). 9 17 CFR 200.30–3(a)(12). 

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 own credits and 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 proposals are 

reflective of this competition. 

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, as noted above, price 

competition between exchanges is 

fierce, with liquidity and market share 

moving freely between exchanges in 

reaction to fee and credit changes. This 

is in addition to free flow of order flow 

to and among off-exchange venues, 

which comprises upwards of 40% of 

industry volume. 

In sum, if the change proposed herein 

is 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.8

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–2023–043 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–2023–043. 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–NASDAQ–2023–043 and should be 

submitted on or before December 8, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25382 Filed 11–16–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–182, OMB Control No. 

3235–0237] 

Proposed Collection; Comment 

Request; Extension: Form N–54A 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736. 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

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

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget a 

request for extension of the previously 

approved collection of information 

discussed below. 

Under the Investment Company Act 

of 1940 (15 U.S.C. 80a-1 et seq.) (the 

‘‘Investment Company Act’’), certain 

investment companies can elect to be 

regulated as business development 

companies, as defined in Section 

2(a)(48) of the Investment Company Act 

(15 U.S.C. 80a-2(a)(48)). Under Section 

54(a) of the Investment Company Act 

(15 U.S.C. 80a-53(a)), any company 

defined in Section 2(a)(48)(A) and (B) 

may elect to be subject to the provisions 

of Sections 55 through 65 of the 

Investment Company Act (15 U.S.C. 

80a-54 to 80a-64) by filing with the 

Commission a notification of election, if 

such company has: (1) a class of equity 

securities registered under Section 12 of 


khammond on DSKJM1Z7X2PROD with NOTICES