6218 Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 

15See supra note 11. 

16Based on a compilation of OCC data for 

monthly volume of equity-based options and 

monthly volume of ETF-based options, see id., the 

Exchange’s market share in equity-based options 

increased from 9.65% for the month of December 

2020 to 13.21% for the month of December 2021. 

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

18 17 CFR 240.19b–4(f)(2). 

19 15 U.S.C. 78s(b)(2)(B). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

competitive market in which market 

participants can readily favor one of the 

16 competing option exchanges if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

the Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and to attract order flow to 

the Exchange. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

has more than 16% of the market share 

of executed volume of multiply-listed 

equity and ETF options trades.15

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity & 

ETF options order flow. More 

specifically, in December 2021, the 

Exchange had less than 14% market 

share of executed volume of multiplylisted equity & ETF options trades.16

The Exchange does not believe the 

proposed rule change would impose any 

burden on intermarket competition that 

is not necessary or appropriate because 

the Exchange operates in a highly 

competitive market in which market 

participants can readily choose to send 

their orders to other exchanges if they 

deem fee levels at those other venues to 

be more favorable. The Exchange 

believes that fees to prevent excessive 

use of Exchange systems are constrained 

by the robust competition for order flow 

among exchanges. Accordingly, the 

Exchange believes that the proposed 

change would continue to make the 

Exchange a competitive venue for order 

execution by enabling OTP Holders to 

maintain their current levels of 

interaction with the Exchange or make 

adjustments as needed during the 

transition to Pillar platform, without 

incurring fees based on their monthly 

order to execution ratios during the 

Waiver Period, thus facilitating OTP 

Holders’ migration to the newer, more 

efficient Pillar technology platform. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 17 of the Act and 

subparagraph (f)(2) of Rule 19b–4 18

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 

under Section 19(b)(2)(B) 19 of the Act 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– 

NYSEArca–2022–04 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–NYSEArca–2022–04. 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–NYSEArca–2022–04, and 

should be submitted on or before 

February 24, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–02184 Filed 2–2–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94097; File No. SR– 

NASDAQ–2022–011] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Equity 7, Section 114 and Section 118 

of the Fee Schedule 

January 28, 2022. 

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 January 

27, 2022, 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. 


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Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 6219 

3Pursuant to Equity 7, Section 114(h), the term 

‘‘Consolidated Volume’’ shares the meaning of that 

term set forth in Equity 7, Section 118(a). (For 

purposes of calculating a member’s qualifications 

for Tiers 1 and 2 of the QMM Program credits set 

forth in paragraph (e) of this Section, the Exchange 

will calculate a member’s volume and total 

Consolidated Volume twice. First, the Exchange 

will calculate a member’s volume and total 

Consolidated Volume inclusive of volume that 

consists of executions in securities priced less than 

$1. Second, the Exchange will calculate a member’s 

volume and total Consolidated Volume exclusive of 

volume that consists of executions in securities 

priced less than $1, while also applying distinct 

qualifying volume thresholds to each Tier, as set 

forth above in paragraph (e). The Exchange will 

then assess which of these two calculations would 

qualify the member for the most advantageous 

credits for the month and then it will apply those 

credits to the member.) 

4The proposal provides a third alternative for 

members to qualify for the Tier 1 rebate. 

5Pursuant to Equity 7, Section 118(a), the term 

‘‘Consolidated Volume’’ shall mean 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 shall be 

excluded from both total Consolidated Volume and 

the member’s trading activity. For the purposes of 

calculating the extent of a member’s trading activity 

during the month on Nasdaq and determining the 

charges and credits applicable to such member’s 

activity, all M–ELO Orders that a member executes 

on Nasdaq during the month will count as liquidityadding activity on Nasdaq. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s pricing schedule at Equity 7, 

Section 114 and Section 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 

The purpose of the proposed rule 

change is to amend the Exchange’s 

schedule of credits, at Equity 7, Section 

114 and Section 118(a). Specifically, the 

Exchange proposes to (1) amend the 

Exchange’s Tier 1 rebate to Qualified 

Market Maker (‘‘QMM’’) at Equity 7, 

Section 114(e); (2) amend a 

supplemental credit in Tapes A, B and 

C for displayed quotes/orders (other 

than Supplemental Orders or 

Designated Retail Orders); (3) amend 

certain supplemental credits for 

displayed quotes/orders (other than 

Supplemental Orders) in Tapes A, B and 

C and (4) allow members to receive the 

higher rebate when the member’s nonDesignated Retail Order rebate is greater 

than its Designated Retail Order rebate. 

Changes to Section 114 

The Exchange proposes to amend its 

pricing schedule, at Equity 7, Section 

114(e), to make a change to its Qualified 

Market Maker (‘‘QMM’’) Program. The 

QMM Program provides supplemental 

incentives to member organizations that 

meet certain quality standards in acting 

as market makers for securities on the 

Exchange. 

Specifically, the Exchange proposes to 

adjust the threshold to also allow a 

QMM to qualify for the Tier 1 incentive 

if the QMM executes shares of liquidity 

provided in all securities through one or 

more of its Nasdaq Market Center MPIDs 

that represent 70 million shares of 

average daily volume during the month 

(inclusive of volume and Consolidated 

Volume 3 that consists of securities 

priced less than $1). Therefore, the 

amended Tier 1 incentive would 

provide a $0.0001 supplemental credit if 

a QMM executes shares of liquidity 

provided in all securities through one or 

more of its Nasdaq Market Center MPIDs 

that represent above 0.70% up to, and 

including, 0.90% of Consolidated 

Volume or 70 million shares of average 

daily volume during the month 

(inclusive of volume and Consolidated 

Volume that consists of securities priced 

less than $1). The Exchange intends for 

the additional threshold to provide 

greater incentives to members during 

times when the market is trading at a 

higher than usual daily volume.4

Changes to Section 118 

The Exchange currently provides a 

$0.0001 per share supplemental credit 

to members for displayed quotes/orders 

that provide liquidity (other than 

Supplemental Orders or Designated 

Retail Orders) where the members, 

through one or more of its Nasdaq 

Market Center MPIDs, (i) increases its 

shares of liquidity provided in all 

securities by at least 30% as a 

percentage of Consolidated Volume 5

during the month relative to the month 

of October 2021 and (ii) has shares of 

liquidity provided of least 15 million 

ADV during the month. The Exchange 

now proposes to amend the threshold to 

allow a member to qualify if the member 

increases its shares of liquidity provided 

in all securities by at least 30% relative 

to the month of October 2021 or 

November 2021. The Exchange hopes 

that it will incentivize members to 

increase their liquidity providing 

activity on the Exchange by giving 

members the option of an additional 

month of Consolidated Volume to 

measure their liquidity against, which 

the Exchange hopes will improve 

market quality. 

Additionally, the Exchange proposes 

to amend in two respects, its schedule 

of credits, which it provides to members 

for displayed quotes/orders that provide 

liquidity. First, the Exchange is 

proposing to remove the $0.0001 per 

share executed and the $0.00015 per 

share executed supplemental credits in 

Tapes A, B and C that are provided to 

members for displayed quotes/orders 

(other than Supplemental Orders) that 

provide liquidity. Second, the Exchange 

is proposing to add these two 

supplemental credits to the current 

credits in Tapes A, B and C that are 

provided to members for displayed 

quotes/orders (other than Supplemental 

Orders or Designated Retail Orders) that 

provide liquidity. 

Specifically, one of the two 

supplemental credits is a $0.0001 per 

share executed credit provided when a 

member, through one or more of its 

Nasdaq Market Center MPIDs, either: (i) 

Increases the extent of its ADV of MELO 

Orders and/or midpoint orders (that 

execute against MELO Orders) in all 

securities by an ADV of 1 million shares 

or more during the month relative to the 

month of June 2021; or (ii) executes a 

combined volume of at least 3 million 

shares ADV through midpoint orders 

provided and MELO Orders during the 

month and increases the extent of its 

ADV of midpoint orders provided and 

MELO Orders in all securities by 100% 

or more during the month relative to the 

month of June 2021. The other 

supplemental credit is a $0.00015 per 

share executed credit provided when a 

member, through one or more of its 

Nasdaq Market Center MPIDs, either: (i) 

Increases the extent of its ADV of MELO 

Orders and/or midpoint orders (that 

execute against MELO Orders) in all 

securities by an ADV of 2 million shares 


khammond on DSKJM1Z7X2PROD with NOTICES
6220 Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 

6Securities Exchange Act Release No. 92433 (July 

6, 2021), 86 FR 38772 (July 22, 2021). 7Since the $0.0001 per share executed and the 

$0.00015 per share executed credits were 

established in July 2021, the Exchange has not been 

applying the credit to Designated Retail Orders 

when calculating a firm’s credits. Therefore, the 

Exchange is working to retroactively provide credits 

to firms that would have received credits if their 

Designated Retail Orders were not excluded. Under 

the proposal, there will be three ways for firm [sic]. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(4) and (5). 

10NetCoalition 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)). 

11Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

or more during the month relative to the 

month of June 2021; or (ii) executes a 

combined volume of at least 4 million 

shares ADV through midpoint orders 

provided and MELO Orders during the 

month and increases the extent of its 

ADV of midpoint orders provided and 

MELO Orders in all securities by 150% 

or more during the month relative to the 

month of June 2021. These two credits 

may not be combined with each other. 

Although the Exchange did not 

exclude retail orders when it proposed 

these two supplemental credits in Tapes 

A, B and C,6 the Exchange did not 

intend to include Designated Retail 

Orders in the payment of these 

supplemental credits. Currently, 

Designated Retail Orders receive their 

own separate credits on the Exchange’s 

fee schedule and those orders generally 

receive higher rebates. The Exchange 

does not commonly provide additional 

rebates to Designated Retail Orders and 

therefore, is proposing to update its fee 

schedule to accurately reflect the 

manner in which it will pay these 

supplemental credits going forward.7

Lastly, the Exchange is proposing to 

allow a member to receive the higher 

rebate for its Designated Retail Orders if 

the member’s total rebate for nonDesignated Retail Orders (including any 

supplemental credits provided in 

Section 114 and Section 118, except the 

NBBO Program credit provided in 

Section 114(g)) is greater than its rebate 

for Designated Retail Orders (including 

supplemental credits provided in 

Section 114 and Section 118). For 

example, a member that provides 

liquidity for Designated Retail Orders 

could qualify for a credit of $0.00325 

per share executed. However, if the 

member provides liquidity for displayed 

quotes/orders (other than Supplemental 

Orders or Designated Retail Orders), the 

member could qualify for a credit of 

$0.00305 per share executed and could 

also qualify for an additional $0.0002 

per share executed through the QMM 

Program, as well as an additional 

supplemental credit of $0.0001 per 

share executed, making the member’s 

total possible credit for displayed nonDesignated Retail Orders $0.00335 per 

share. In this case, the member would 

also receive a credit of $0.00335 per 

share for its Designated Retail Orders. 

The Exchange is excluding the NBBO 

Program when calculating a member’s 

highest rebate because the NBBO 

Program only applies to displayed 

orders in securities priced at $1 or more 

per share that provide liquidity, 

establish the national best bid or best 

offer (‘‘NBBO’’), and display a quantity 

of at least one round lot at the time of 

execution. Consistent with the proposed 

rule, the NBBO Program explicitly 

excludes Designated Retail Orders. 

The Exchange is proposing this 

change to ensure that none of its 

members are disadvantaged and that all 

members can obtain the maximum 

possible rebate. 

The Exchange notes that those 

participants that are dissatisfied with 

this new proposal are free to shift their 

order flow to competing venues. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,8 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,9 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 Proposal is Reasonable 

The Exchange’s proposal is 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’. . . .’’ 10

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.’’ 11

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. 

The Exchange believes it is reasonable 

to amend the Tier 1 threshold of its 

QMM Program to provide the option for 

a QMM to qualify if the QMM executes 

shares of liquidity provided that 

represent 70 million shares of average 

daily volume during the month 

(inclusive of volume that consists of 

securities priced less than $1). The 

Exchange also believes that the 

additional threshold option of 70 

million shares of average daily volume 

will provide an increased incentive to 

members during times when the market 

is trading at a higher than usual daily 

volume. An increase in liquidity adding 

activity on the Exchange will, in turn, 

improve the quality of the Nasdaq 

market and increase its attractiveness to 

existing and prospective participants. 

The Exchange notes that those 

participants that are dissatisfied with 

the new threshold option are free to 

shift their order flow to competing 

venues. 

Additionally, the Exchange believes 

that it is reasonable to include the 

option of an additional baseline month 

to measure whether a member increases 

its shares of liquidity provided in all 


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Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 6221 

securities by at least 30%. The Exchange 

believes that the additional month will 

encourage members who had a lower 

baseline in November than October to 

increase their liquidity adding activity 

on the Exchange to receive the credit, 

which will improve the overall market 

quality to the benefit of all market 

participants. 

The Exchange’s fee schedule is 

intended to reflect the Exchange’s 

current assessment of its fees and 

credits. The Exchange does not 

currently pay Designated Retail Orders 

the $0.0001 and $0.00015 supplemental 

credits discussed above. As discussed 

above, Designated Retail Orders receive 

their own separate credits on the 

Exchange’s fee schedule and those 

orders generally receive higher rebates. 

The Exchange does not commonly 

provide additional rebates to Designated 

Retail Orders. Therefore, the Exchange 

believes it is reasonable to amend its 

supplemental credits on Tapes A, B and 

C to accurately reflect that Designated 

Retail Orders are excluded from the 

Exchange’s payment of these two 

supplemental credits. 

Lastly, the Exchange believes that it is 

reasonable to provide a member’s 

Designated Retail Orders with the 

highest rebate that a member qualifies 

for because the Exchange is always 

seeking ways to attract more retail order 

flow. Therefore, if a member’s rebate for 

non-Designated Retail Orders (including 

any supplemental credits provided in 

Section 114 and Section 118, except the 

NBBO Program credit provided in 

Section 114(g)) is greater than its rebate 

for Designated Retail Orders (including 

supplemental credits provided in 

Section 114 and Section 118), the 

Exchange is proposing to provide the 

member with the higher rebate for its 

Designated Retail Orders. Additionally, 

the Exchange believes that it is 

reasonable to exclude the NBBO 

Program when calculating a member’s 

highest rebate because, as discussed 

above, the NBBO Program only applies 

to displayed orders in securities priced 

at $1 or more per share that provide 

liquidity, establish the national best bid 

or best offer (‘‘NBBO’’), and display a 

quantity of at least one round lot at the 

time of execution. Consistent with the 

proposed rule, the NBBO Program 

explicitly excludes Designated Retail 

Orders. The Exchange is proposing this 

change to ensure that none of its 

members are disadvantaged and that all 

members can obtain the maximum 

possible rebate. 

The Exchange notes that those market 

participants that are dissatisfied with 

the proposals are free to shift their order 

flow to competing venues that offer 

more generous pricing or less stringent 

qualifying criteria. 

The Proposal Is an Equitable Allocation 

of Credits 

The Exchange believes its proposal 

will allocate its charges and credits 

fairly among its market participants. 

The Exchange believes that it is an 

equitable allocation to establish an 

additional threshold for its QMM 

Program’s Tier 1 supplemental credit 

and to include the option of an 

additional baseline month to measure 

whether a member qualifies for the 

$0.0001 per share executed 

supplemental credit for displayed 

quotes/orders (other than Supplemental 

Orders or Designated Retail Orders) that 

provide liquidity. The proposals will 

encourage members to increase the 

extent to which they add liquidity to the 

Exchange. To the extent that the 

Exchange succeeds in increasing the 

levels of liquidity and activity on the 

Exchange, then the Exchange will 

experience improvements in its market 

quality, which stands to benefit all 

market participants. 

The Exchange also believes that it is 

equitable to amend the $0.0001 per 

share executed and the $0.00015 per 

share executed supplemental credits for 

displayed quotes/orders (other than 

Supplemental Orders) by applying the 

credits to members for displayed 

quotes/orders [sic], which accurately 

reflect the most current application of 

these two supplemental credits. The 

Exchange believes that it is equitable to 

exclude Designated Retail Orders from 

these supplemental credits because 

Designated Retail Orders receive their 

own separate credits on the Exchange’s 

fee schedule and those orders generally 

receive higher rebates. The Exchange 

does not commonly provide additional 

rebates to Designated Retail Orders. 

Lastly, the Exchange also believes it is 

equitable to allow a member to receive 

the higher credit if the member’s total 

credits for non-Designated Retail Orders 

(including any supplemental credits 

provided in Section 114 and Section 

118, except the NBBO Program credit 

provided in Section 114(g)) is greater 

than its credit for Designated Retail 

Orders (including supplemental credits 

provided in Section 114 and Section 

118) in order to encourage firms to 

continue to provide retail order flow 

even if the firms expect to receive a 

higher rebate from their non-Designated 

Retail Orders. Moreover, the Exchange 

also believes it is equitable to exclude 

the NBBO Program from the calculation 

to ensure that the Exchange does not 

inadvertently disadvantage any member 

and that all members are treated 

equitably by obtaining the maximum 

rebate possible. Moreover, the Exchange 

believes that it is equitable to exclude 

the NBBO Program from this proposal as 

it remains consistent with the current 

rules of the program. Additionally, the 

Exchange expects any impact from this 

exclusion to be de minimis because 

Designated Retail Orders do not 

frequently set the NBBO. 

Any participant that is dissatisfied 

with the proposal is free to shift their 

order flow to competing venues that 

provide more generous pricing or less 

stringent qualifying criteria. 

The Proposal is Not Unfairly 

Discriminatory 

The Exchange believes that its 

proposal is not unfairly discriminatory. 

As an initial matter, the Exchange 

believes that nothing about its volumebased tiered pricing model is inherently 

unfair; instead, it is a rational pricing 

model that is well-established and 

ubiquitous in today’s economy among 

firms in various industries—from cobranded credit cards to grocery stores to 

cellular telephone data plans—that use 

it to reward the loyalty of their best 

customers that provide high levels of 

business activity and incent other 

customers to increase the extent of their 

business activity. It is also a pricing 

model that the Exchange and its 

competitors have long employed with 

the assent of the Commission. It is fair 

because it enhances price discovery and 

improves the overall quality of the 

equity markets. 

The Exchange also believes that its 

proposal to add an additional threshold 

for its QMM Program’s Tier 1 

supplemental credit is not unfairly 

discriminatory because the additional 

qualifications will be available to all 

members. Similarly, the Exchange 

believes that it is not unfairly 

discriminatory to include the option of 

an additional baseline month to 

measure whether a member qualifies for 

the $0.0001 per share executed 

supplemental credit for displayed 

quotes/orders (other than Supplemental 

Orders or Designated Retail Orders) that 

provide liquidity because the additional 

qualifications will be available to all 

members. 

Additionally, the Exchange believes 

that it is not unfairly discriminatory to 

amend its fee schedule to align with the 

way the Exchange pays its supplemental 

credits. Moreover, all non-retail market 

participants will continue to be entitled 

to the credits and the amendment will 

provide market participants with clarity 

on how certain supplemental credits are 

paid. Additionally, Designated Retail 

Orders receive their own separate 


khammond on DSKJM1Z7X2PROD with NOTICES
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12 15 U.S.C. 78s(b)(3)(A)(ii). 

credits on the Exchange’s fee schedule 

and those orders generally receive 

higher rebates. 

Lastly, the Exchange believes that its 

proposals to provide a member with the 

higher rebate for its Designated Retail 

Orders if the member’s rebate for nonDesignated Retail Orders (including any 

supplemental credits provided in 

Section 114 and Section 118, except the 

NBBO Program credit provided in 

Section 114(g)) is greater than its credit 

for Designated Retail Orders (including 

supplemental credits provided in 

Section 114 and Section 118) is not 

unfairly discriminatory because the 

higher rebate option will be available to 

all members. Moreover, providing 

members with the higher rebate will 

ensure that firms are not disincentivized 

from increasing their retail order flow 

due to the higher rebate they may 

receive from their non-Designated Retail 

Orders. Additionally, exclusion of the 

NBBO Program credit from the 

calculation of the higher rebate is also 

not discriminatory because the 

exclusion will also apply to all 

members. 

Overall, the proposals stand to 

improve the overall market quality of 

the Exchange, to the benefit of all 

market participants, by incentivizing 

members to increase the extent of their 

liquidity provision or activity on the 

Exchange. Any participant that is 

dissatisfied with the proposal is free to 

shift their order flow to competing 

venues that provide more generous 

pricing or less stringent qualifying 

criteria. 

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 

proposal will place any category of 

Exchange participant at a competitive 

disadvantage. 

As noted above, the Exchange’s 

proposals are intended to have marketimproving effects, to the benefit of all 

members. The Exchange notes that its 

members are free to trade on other 

venues to the extent they believe that 

these proposals are not 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 additional proposed thresholds 

for the Exchange’s QMM Program’s Tier 

1 supplemental credit and the $0.0001 

per share executed supplemental credit 

for displayed quotes/orders (other than 

Supplemental Orders or Designated 

Retail Orders), as well as the allowance 

for members to receive the better of their 

Designated Retail Order credit or its 

non-Designated Retail Order credit, is 

reflective of this competition. Moreover, 

aligning the Exchange’s fee schedule 

with the Exchange’s application of its 

rebates does not burden competition. 

Any participant that is dissatisfied with 

the proposals is free to shift their order 

flow to competing venues that provide 

more generous pricing or less stringent 

qualifying criteria. 

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 50% 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 

Pursuant to Section 19(b)(3)(A)(ii) of 

the Act,12 the Exchange has designated 

this proposal as establishing or changing 

a due, fee, or other charge imposed by 

the self-regulatory organization on any 

person, whether or not the person is a 

member of the self-regulatory 

organization, which renders the 

proposed rule change effective upon 

filing. 

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–2022–011 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–2022–011. 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 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 23 / Thursday, February 3, 2022 / Notices 6223 

13 17 CFR 200.30–3(a)(12). 

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–2022–011 and 

should be submitted on or before 

February 24, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–02183 Filed 2–2–22; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[License No. 07/07–0112] 

Eagle Fund II, L.P.; Surrender of 

License of Small Business Investment 

Company 

Pursuant to the authority granted to 

the United States Small Business 

Administration under the Small 

Business Investment Act of 1958, as 

amended, under Section 309 of the Act 

and Section 107.1900 of the Small 

Business Administration Rules and 

Regulations (13 CFR 107.1900) to 

function as a small business investment 

company under the Small Business 

Investment Company License No. 07/ 

07–0112 issued to Eagle Fund II, L.P., 

said license is hereby declared null and 

void. 

United States Small Business 

Administration. 

Bailey DeVries, 

Associate Administrator, Office of Investment 

and Innovation. 

[FR Doc. 2022–02222 Filed 2–2–22; 8:45 am] 

BILLING CODE P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #17328 and #17329; 

Hawaii Disaster Number HI–00067] 

Administrative Declaration of a 

Disaster for the State of Hawaii 

AGENCY: Small Business Administration. 

ACTION: Notice. 

SUMMARY: This is a notice of an 

Administrative declaration of a disaster 

for the State of HAWAII dated 01/28/ 

2022. 

Incident: Severe Storms, Flooding and 

Landslides. 

Incident Period: 12/05/2021 through 

12/10/2021. 

DATES: Issued on 01/28/2022. 

Physical Loan Application Deadline 

Date: 03/29/2022. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 10/28/2022. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

Administrator’s disaster declaration, 

applications for disaster loans may be 

filed at the address listed above or other 

locally announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Areas: City and County of 

Honolulu, Maui. 

Contiguous Counties: 

Hawaii: 

Kalawao. 

The Interest Rates are: 

Percent 

For Physical Damage: 

Homeowners with Credit Available Elsewhere ...................... 2.875 

Homeowners without Credit 

Available Elsewhere .............. 1.438 

Businesses with Credit Available Elsewhere ...................... 5.660 

Businesses without Credit 

Available Elsewhere .............. 2.830 

Percent 

Non-Profit Organizations with 

Credit Available Elsewhere ... 1.875 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 1.875 

For Economic Injury: 

Businesses & Small Agricultural 

Cooperatives without Credit 

Available Elsewhere .............. 2.830 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 1.875 

The number assigned to this disaster 

for physical damage is 17328 6 and for 

economic injury is 17329 0. 

The State which received an EIDL 

Declaration # is Hawaii. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

Isabella Guzman, 

Administrator. 

[FR Doc. 2022–02191 Filed 2–2–22; 8:45 am] 

BILLING CODE 8026–03–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #17330 and #17331; 

WASHINGTON Disaster Number WA–00102] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of Washington 

AGENCY: Small Business Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of WASHINGTON (FEMA– 

4635–DR), dated 01/27/2022. 

Incident: Severe Storms, Straight-line 

Winds, Flooding, Landslides, and 

Mudslides. 

Incident Period: 11/05/2021 through 

12/02/2021. 

DATES: Issued on 01/27/2022. 

Physical Loan Application Deadline 

Date: 03/28/2022. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 10/27/2022. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

01/27/2022, Private Non-Profit 


khammond on DSKJM1Z7X2PROD with NOTICES