Federal Register / Vol. 87, No. 135 / Friday, July 15, 2022 / Notices 42521 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3There are three Tapes, which are based on the 

listing venue of the security: Tape C securities are 

Nasdaq-listed; Tape A securities are New York 

Stock Exchange-listed; and Tape B securities are 

listed on exchanges other than Nasdaq and NYSE. 

4Pursuant 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. 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 count as liquidity-adding activity 

on Nasdaq. 

5QDRK is a routing option under which orders 

check the System for available shares and 

simultaneously route the remaining shares to 

destinations on the System routing table that are not 

posting Protected Quotations within the meaning of 

Regulation NMS. If shares remain un-executed after 

routing, they are posted on the book. Once on the 

book, should the order subsequently be locked or 

crossed by another market center, the System will 

not route the order to the locking or crossing market 

center. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(4) and (5). 

8NetCoalition 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)). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15116 Filed 7–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95226; File No. SR– 

NASDAQ–2022–039] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its 

Schedule of Credits, at Equity 7, 

Section 118 

July 11, 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 July 1, 

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. 

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, at 

Equity 7, Section 118(a)(1), 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 eliminate a credit that the 

Exchange provides to members for 

displayed liquidity under Equity 7, 

Section 118(a)(1). 

Currently, the Exchange provides a 

$0.0018 per share executed credit for 

securities in Tape C3 to a member with 

shares of liquidity provided in all 

securities representing less than 0.10% 

of Consolidated Volume,4 through one 

or more of its Nasdaq Market Center 

MPIDs; provided that (i) the member 

also provides a daily average of at least 

250,000 shares of liquidity provided in 

securities listed on an exchange other 

than Nasdaq, or (ii) the member routes 

a daily average volume of at least 10,000 

shares during the month via the QDRK 5

routing strategy. The Exchange proposes 

to eliminate this credit. 

The Exchange offers this credit as a 

means of improving market quality by 

providing its members with an incentive 

to increase liquidity on the Exchange. 

However, the Exchange has observed 

over time that this credit has not been 

successful in accomplishing its 

objective. That is, it has not induced 

members to add liquidity to the 

Exchange and members are not targeting 

this credit for growth or general use of 

the QDRK strategy. The Exchange has 

limited resources available to it to offer 

its members market-improving 

incentives, and it allocates those limited 

resources to those segments of the 

market where it perceives the need to be 

greatest and/or where it determines that 

the incentive is likely to achieve its 

intended objective. Accordingly, the 

Exchange proposes to eliminate the 

credit noted above. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,6 in general, and furthers the 

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

of the Act,7 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 change to 

its schedule of credits 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 broker-dealers 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’. . . .’’ 8

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 


jspears on DSK121TN23PROD with NOTICES1
42522 Federal Register / Vol. 87, No. 135 / Friday, July 15, 2022 / Notices 

9Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f). 

‘‘has been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 9

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 that its 

proposal is reasonable, equitable, and 

not unfairly discriminatory to eliminate 

the $0.0018 per share executed credit 

for securities in Tape C. The credit has 

not been effective in achieving its 

intended objective of incentivizing 

members to provide liquidity to the 

Exchange. The Exchange has limited 

resources available to it to offer its 

members market-improving incentives, 

and it allocates those limited resources 

to those segments of the market where 

it perceives the need to be greatest and/ 

or where it determines that the 

incentive is likely to achieve its 

intended objective. 

The proposal is also equitable and not 

unfairly discriminatory because the 

proposed change to the credits will 

apply uniformly to all similarly situated 

members. All market participants stand 

to benefit to the extent that the proposal 

is successful in freeing limited resources 

and improving market quality. Any 

member that is dissatisfied with the 

credits is free to shift their order flow to 

competing venues that provide more 

favorable rates 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 participants at a competitive 

disadvantage. Members are free to trade 

on other venues to the extent they 

believe that the credits provided are not 

attractive or the qualifying criteria for 

such credits is too stringent. 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 

The Exchange believes that the 

proposed change to its schedule of 

credits to eliminate the $0.0018 per 

share executed credit for securities in 

Tape C as noted above will not impose 

a burden on competition because the 

Exchange’s execution services are 

completely voluntary and subject to 

extensive competition both from the 

other live exchanges and from offexchange venues, which include 

alternative trading systems that trade 

national market system stock. 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 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 in response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. 

The proposed change to the 

Exchange’s credits is reflective of this 

competition because, as a threshold 

issue, the Exchange is a relatively small 

market so its ability to burden 

intermarket competition is limited. In 

this regard, even the largest U.S. 

equities exchange by volume only has 

17–18% 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 more than 40% of 

industry volume in recent months. 

In sum, if the changes proposed 

herein are unattractive to market 

participants, it is likely that the 

Exchange will either fail to increase its 

market share or even 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) 

of the Act 10 and paragraph (f) of Rule 

19b–4 11 thereunder. 

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–2022–039 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. 


jspears on DSK121TN23PROD with NOTICES1
Federal Register / Vol. 87, No. 135 / Friday, July 15, 2022 / Notices 42523 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 95026 

(June 2, 2022), 87 FR 34913 (June 8, 2022) (File No. 

SR–NSCC–2022–005). 

4Comments are available at https://www.sec.gov/ 

comments/sr-nscc-2022-005/srnscc2022005.htm. 

5 15 U.S.C. 78s(b)(2). 

6 Id. 

7 17 CFR 200.30–3(a)(31). 

All submissions should refer to File 

Number SR–NASDAQ–2022–039. 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–2022–039 and 

should be submitted on or before 

August 5, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15118 Filed 7–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95245; File No. SR–NSCC– 

2022–005] 

Self-Regulatory Organizations; 

National Securities Clearing 

Corporation; Notice of Designation of 

Longer Period for Commission Action 

on a Proposed Rule Change To Revise 

the Excess Capital Premium Charge 

July 11, 2022. 

On May 30, 2022, National Securities 

Clearing Corporation (‘‘NSCC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change SR–NSCC–2022–005 (the 

‘‘Proposed Rule Change’’) pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder.2 The Proposed Rule 

Change was published for comment in 

the Federal Register on June 8, 2022,3

and the Commission has received 

comments regarding the changes 

proposed in the Proposed Rule Change.4

Section 19(b)(2) of the Act 5 provides 

that, within 45 days of the publication 

of notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for the 

Proposed Rule Change is July 23, 2022. 

The Commission is extending the 45- 

day period for Commission action on 

the Proposed Rule Change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the Proposed 

Rule Change so that it has sufficient 

time to consider and take action on the 

Proposed Rule Change. 

Accordingly, pursuant to Section 

19(b)(2) of the Act 6 and for the reasons 

stated above, the Commission 

designates September 6, 2022, as the 

date by which the Commission shall 

either approve, disapprove, or institute 

proceedings to determine whether to 

disapprove proposed rule change SR– 

NSCC–2022–005. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–15119 Filed 7–14–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–497; OMB Control No. 

3235–0555] 

Submission for OMB Review; 

Comment Request Extension: 

Rule 6h–1 

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 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget 

(‘‘OMB’’) a request for approval of 

extension of the previously approved 

collection of information provided for in 

Rule 6h–1 (17 CFR 240.6h–1) under the 

Securities Exchange Act of 1934 (‘‘Act’’) 

(15 U.S.C. 78a et seq.). 

Section 6(h) of the Act (15 U.S.C. 

78f(h)) requires national securities 

exchanges and national securities 

associations that trade security futures 

products to establish listing standards 

that, among other things, require that: (i) 

trading in such products not be readily 

susceptible to price manipulation; and 

(ii) the market on which the security 

futures product trades has in place 

procedures to coordinate trading halts 

with the listing market for the security 

or securities underlying the security 

futures product. Rule 6h–1 implements 

these statutory requirements and 

requires that (1) the final settlement 

price for each cash-settled security 

futures product fairly reflect the 

opening price of the underlying security 

or securities, and (2) the exchanges and 

associations trading security futures 

products halt trading in any security 

futures product for as long as trading in 

the underlying security for trading of a 

security futures product based on a 

single security, or trading in 50% or 

more of the underlying securities for 

trading of a security futures product 

based on a narrow-based security index, 

is halted on the listing market. 

It is estimated that approximately 1 

respondent will incur an average burden 

of 10 hours per year to comply with this 

rule, for a total burden of 10 hours. At 

an average internal cost per hour of 

approximately $428, the resultant total 

internal cost of compliance for the 

respondents is $4,280 per year (1 

respondent × 10 hours/respondent × 

$428/hour). 

Compliance with Rule 6h–1 is 

mandatory. Any listing standards 


jspears on DSK121TN23PROD with NOTICES1