71146 Federal Register / Vol. 79, No. 230 / Monday, December 1, 2014 / Notices 

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

2 17 CFR 240.19b–4. 

3The Penny Pilot was established in March 2008 

and in October 2009 was expanded and extended 

through December 31, 2014. See Securities 

Exchange Act Release Nos. 57579 (March 28, 2008), 

73 FR 18587 (April 4, 2008) (SR–NASDAQ–2008– 

026) (notice of filing and immediate effectiveness 

establishing Penny Pilot); 60874 (October 23, 2009), 

74 FR 56682 (November 2, 2009) (SR–NASDAQ– 

2009–091) (notice of filing and immediate 

effectiveness expanding and extending Penny 

Pilot); 60965 (November 9, 2009), 74 FR 59292 

(November 17, 2009) (SR–NASDAQ–2009–097) 

(notice of filing and immediate effectiveness adding 

seventy-five classes to Penny Pilot); 61455 

(February 1, 2010), 75 FR 6239 (February 8, 2010) 

(SR–NASDAQ–2010–013) (notice of filing and 

immediate effectiveness adding seventy-five classes 

to Penny Pilot); 62029 (May 4, 2010), 75 FR 25895 

(May 10, 2010) (SR–NASDAQ–2010–053) (notice of 

filing and immediate effectiveness adding seventyfive classes to Penny Pilot); 65969 (December 15, 

2011), 76 FR 79268 (December 21, 2011) (SR– 

NASDAQ–2011–169) (notice of filing and 

immediate effectiveness extension and replacement 

of Penny Pilot); 67325 (June 29, 2012), 77 FR 40127 

(July 6, 2012) (SR–NASDAQ–2012–075) (notice of 

filing and immediate effectiveness and extension 

and replacement of Penny Pilot through December 

31, 2012); 68519 (December 21, 2012), 78 FR 136 

(January 2, 2013) (SR–NASDAQ–2012–143) (notice 

of filing and immediate effectiveness and extension 

and replacement of Penny Pilot through June 30, 

2013); 69787 (June 18, 2013), 78 FR 37858 (June 24, 

2013) (SR–NASDAQ–2013–082) (notice of filing 

and immediate effectiveness and extension and 

replacement of Penny Pilot through December 31, 

2013); 71105 (December 17, 2013), 78 FR 77530 

(December 23, 2013) (SR–NASDAQ–2013–154) 

(notice of filing and immediate effectiveness and 

extension and replacement of Penny Pilot through 

June 30, 2014); and 79 FR 31151 (May 23, 2014), 

79 FR 31151 (May 30, 2014) (SR–NASDAQ–2014– 

056) ((notice of filing and immediate effectiveness 

and extension and replacement of Penny Pilot 

through December 31, 2014). See also NOM Rules, 

Chapter VI, Section 5. 

4The term ‘‘Customer’’ applies to any transaction 

that is identified by a Participant for clearing in the 

Customer range at The Options Clearing 

Corporation (‘‘OCC’’) which is not for the account 

of broker or dealer or for the account of a 

‘‘Professional’’ (as that term is defined in Chapter 

I, Section 1(a)(48)). 

5The term ‘‘Professional’’ means any person or 

entity that (i) is not a broker or dealer in securities, 

and (ii) places more than 390 orders in listed 

options per day on average during a calendar month 

for its own beneficial account(s) pursuant to 

Chapter I, Section 1(a)(48). All Professional orders 

shall be appropriately marked by Participants. 

6The term ‘‘NOM Market Maker’’ means a 

Participant that has registered as a Market Maker on 

NOM pursuant to Chapter VII, Section 2, and must 

also remain in good standing pursuant to Chapter 

VII, Section 4. In order to receive NOM Market 

Maker pricing in all securities, the Participant must 

be registered as a NOM Market Maker in at least one 

security. 

hearing requests should state the nature 

of the writer’s interest, any facts bearing 

upon the desirability of a hearing on the 

matter, the reason for the request, and 

the issues contested. Persons who wish 

to be notified of a hearing may request 

notification by writing to the 

Commission’s Secretary. 

ADDRESSES: The Commission: Brent J. 

Fields, Secretary, U.S. Securities and 

Exchange Commission, 100 F Street NE., 

Washington, DC 20549–1090. 

FOR FURTHER INFORMATION CONTACT: 

Diane L. Titus at (202) 551–6810, SEC, 

Division of Investment Management, 

Chief Counsel’s Office, 100 F Street NE., 

Washington, DC 20549–8010. 

Cushing Funds Trust 

[File No. 811–22428] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. Applicant 

transferred its assets to corresponding 

series of MainStay Funds Trust, and on 

July 7, 2014, made distributions to its 

shareholders based on net asset value. 

Expenses of $822,606 incurred in 

connection with the reorganization were 

paid by Cushing Asset Management, 

L.P., applicant’s investment adviser, and 

New York Life Investment Management 

LLC, the surviving fund’s investment 

adviser. 

Filing Date: The application was filed 

on October 27, 2014. 

Applicant’s Address: 8117 Preston 

Rd., Suite 440, Dallas, TX 75225. 

Lattice Strategies, LLC 

[File No. 811–23001] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. Applicant states 

the filings on Form N–8A and N–1A 

made under applicant’s file number 

were inadvertent and were intended 

instead to be filed under the file number 

of Lattice Strategies Trust. 

Filing Date: The application was filed 

on October 24, 2014. 

Applicant’s Address: One 

Embarcadero Center, 23rd Floor, San 

Francisco, CA 94111. 

Oceanstone Fund 

[File No. 811–21930] 

Summary: Applicant seeks an order 

declaring that it has ceased to be an 

investment company. On August 29, 

2014, applicant made a liquidating 

distribution to its shareholders, based 

on net asset value. Applicant incurred 

no expenses in connection with the 

liquidation. 

Filing Date: The application was filed 

on October 29, 2014. 

Applicant’s Address: PO Box 130982, 

Carlsbad, CA 92013. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28175 Filed 11–28–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73676; File No. SR– 

NASDAQ–2014–105] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market, LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Rebates in Penny Pilot Options 

November 24, 2014. 

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 

10, 2014, 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 NASDAQ. 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 

NASDAQ proposes to modify Chapter 

XV, entitled ‘‘Options Pricing,’’ at 

Section 2 governing pricing for 

NASDAQ members using the NASDAQ 

Options Market (‘‘NOM’’), NASDAQ’s 

facility for executing and routing 

standardized equity and index options. 

Specifically, NOM proposes to amend 

certain Penny Pilot Options 3 rebates 

currently applicable to Customers,4

Professionals 5 and NOM Market 

Makers.6

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://

www.nasdaq.cchwallstreet.com, at the 

principal office of the Exchange, and at 

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

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. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 230 / Monday, December 1, 2014 / Notices 71147 

7Tiers 6 and 7 are calculated based on Total 

Volume. Total Volume is defined as Customer, 

Professional, Firm, Broker-Dealer, Non-NOM 

Market Maker and NOM Market Maker volume in 

Penny Pilot Options and/or Non-Penny Pilot 

Options which either adds or removes liquidity on 

NOM. See note ‘‘b’’ in Section 2, Chapter XV. The 

Exchange utilizes data from OCC to determine the 

total industry customer equity and ETF options 

ADV figure. OCC classifies equity and ETF options 

volume under the equity options category. Also, 

both customer and professional orders that are 

transacted on options exchanges clear in the 

customer range at OCC and therefore both customer 

and professional volume would be included in the 

total industry figure to calculate rebate tiers. This 

is the case today for the Total Volume number that 

appear in Tiers 6 and 7 of the Customer and 

Professional rebate today, which includes Customer 

and Professional numbers in both the numerator 

and denominator of that percentage. These tiers will 

remain unchanged by this proposal. 

8The term ‘‘Firm’’ or (‘‘F’’) applies to any 

transaction that is identified by a Participant for 

clearing in the Firm range at OCC. 

9The term ‘‘Non-NOM Market Maker’’ or (‘‘O’’) is 

a registered market maker on another options 

exchange that is not a NOM Market Maker. A NonNOM Market Maker must append the proper NonNOM Market Maker designation to orders routed to 

NOM 

10The term ‘‘Broker-Dealer’’ or (‘‘B’’) applies to 

any transaction which is not subject to any of the 

other transaction fees applicable within a particular 

category. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ proposes to modify Chapter 

XV, entitled ‘‘Options Pricing,’’ at 

Section 2(1) governing the rebates and 

fees assessed for option orders entered 

into NOM. The Exchange proposes to 

amend certain qualifications related to 

Customer and Professional Penny Pilot 

Options Rebates to Add Liquidity tiers 

to offer Participants a greater 

opportunity to earn Customer and 

Professional rebates. The Exchange also 

proposes to modify NOM Market Maker 

Penny Pilot Options Rebates to Add 

Liquidity to offer additional rebate 

opportunities. The Exchange believes 

that additional rebate opportunities will 

attract additional order flow to the 

Exchange to the benefit of all market 

participants. 

Customer and Professional Rebates To 

Add Liquidity 

Today, the Exchange offers tiered 

Penny Pilot Options Rebates to Add 

Liquidity to Customers and 

Professionals based on various criteria 

with rebates ranging from $0.20 to $0.48 

per contract. Participants may qualify 

for Customer and Professional Penny 

Pilot Options Rebates to Add Liquidity 

in Tiers 1–5 and Tier 8 by adding a 

certain amount of Customer and/or 

Professional liquidity in Penny Pilot 

Options or Non-Penny Pilot Options as 

specified by each tier.7 The Exchange is 

proposing to amend these tiers and 

permit Participants to add Customer, 

Professional, Firm,8 Non-NOM Market 

Maker 9 and/or Broker-Dealer 10

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options in order to 

qualify for the Customer and/or 

Professional Penny Pilot Options 

Rebates to Add Liquidity in Tiers 1–5 

and Tier 8. 

Tier 1 currently offers Participants 

that add Customer and/or Professional 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options of up to 0.10% 

of total industry customer equity and 

ETF option average daily volume 

(‘‘ADV’’) contracts per day in a month 

a $0.20 per contract rebate. The 

Exchange is proposing to amend Tier 1 

to provide that Participants that add 

Customer, Professional, Firm, Non-NOM 

Market Maker and/or Broker-Dealer 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options of up to 0.10% 

of total industry customer equity and 

ETF option average daily volume 

(‘‘ADV’’) contracts per day in a month 

would continue to receive a $0.20 per 

contract rebate. 

Tier 2 currently offers Participants 

that add Customer and/or Professional 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options above 0.10% 

to 0.20% of total industry customer 

equity and ETF option ADV contracts 

per day in a month a $0.25 per contract 

rebate. The Exchange is proposing to 

amend Tier 2 to provide that 

Participants that add Customer, 

Professional, Firm, Non-NOM Market 

Maker and/or Broker-Dealer liquidity in 

Penny Pilot Options and/or Non-Penny 

Pilot Options above 0.10% to 0.20% of 

total industry customer equity and ETF 

option ADV contracts per day in a 

month would continue to receive a 

$0.25 per contract rebate. 

Tier 3 currently offers Participants 

that add Customer and/or Professional 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options above 0.20% 

to 0.30% of total industry customer 

equity and ETF option ADV contracts 

per day in a month a $0.42 per contract 

rebate. The Exchange is proposing to 

amend Tier 3 to provide that 

Participants that add Customer, 

Professional, Firm, Non-NOM Market 

Maker and/or Broker-Dealer liquidity in 

Penny Pilot Options and/or Non-Penny 

Pilot Options above 0.20% to 0.30% of 

total industry customer equity and ETF 

option ADV contracts per day in a 

month would continue to receive a 

$0.42 per contract rebate. 

Tier 4 currently offers Participants 

that add Customer and/or Professional 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options above 0.30% 

to 0.40% of total industry customer 

equity and ETF option ADV contracts 

per day in a month a $0.43 per contract 

rebate. The Exchange is proposing to 

amend Tier 4 to provide that 

Participants that add Customer, 

Professional, Firm, Non-NOM Market 

Maker and/or Broker-Dealer liquidity in 

Penny Pilot Options and/or Non-Penny 

Pilot Options above 0.30% to 0.40% of 

total industry customer equity and ETF 

option ADV contracts per day in a 

month would continue to receive a 

$0.43 per contract rebate. 

Tier 5 currently offers Participants 

that add Customer and/or Professional 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options above 0.40% 

of total industry customer equity and 

ETF option ADV contracts per day in a 

month, or Participants that add (1) 

Customer and/or Professional liquidity 

in Penny Pilot Options and/or NonPenny Pilot Options of 25,000 or more 

contracts per day in a month, (2) the 

Participant has certified for the Investor 

Support Program set forth in Rule 7014, 

and (3) the Participant executed at least 

one order on NASDAQ’s equity market 

a $0.45 per contract rebate. The 

Exchange is proposing to amend Tier 5 

to provide that Participants that add 

Customer, Professional, Firm, Non-NOM 

Market Maker and/or Broker-Dealer 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options above 0.40% 

of total industry customer equity and 

ETF option ADV contracts per day in a 

month, or Participant adds (1) Customer 

and/or Professional liquidity in Penny 

Pilot Options and/or Non-Penny Pilot 

Options of 25,000 or more contracts per 

day in a month, (2) the Participant has 

certified for the Investor Support 

Program set forth in Rule 7014, and (3) 

the Participant executed at least one 

order on NASDAQ’s equity market 

would continue to receive a $0.45 per 

contract rebate. 

Tier 8 currently offers Participants 

that add Customer and/or Professional 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options of 0.75% or 

more of national customer volume in 

multiply-listed equity and ETF options 

classes in a month a $0.48 per contract 

Customer rebate and a $0.47 per 

contract Professional rebate. The 

Exchange is proposing to amend Tier 8 

to provide that Participants that add 

Customer, Professional, Firm, Non-NOM 

Market Maker and/or Broker-Dealer 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
71148 Federal Register / Vol. 79, No. 230 / Monday, December 1, 2014 / Notices 

11 15 U.S.C. 78f. 

12 15 U.S.C. 78f(b)(4). 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options of 0.75% or 

more of national customer volume in 

multiply-listed equity and ETF options 

classes in a month would continue to 

receive a $0.48 per contract Customer 

rebate and a $0.47 per contract 

Professional rebate. 

With respect to Tier 8, today, 

Participants that add Customer and/or 

Professional liquidity in Penny Pilot 

Options and/or Non-Penny Pilot 

Options of 1.25% or more of national 

customer volume in multiply-listed 

equity and ETF options classes in a 

month will receive an additional $0.02 

per contract Penny Pilot Options Tier 8 

Customer Rebate to Add Liquidity for 

each transaction which adds liquidity in 

Penny Pilot Options in that month. The 

Exchange also proposes to amend this 

incentive by also permitting Firm, NonNOM Market Maker and/or BrokerDealer liquidity to qualify for the 

incentive. The amended rule text would 

provide, ‘‘Participants that add 

Customer, Professional, Firm, Non-NOM 

Market Maker, and/or Broker-Dealer 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options of 1.25% or 

more of national customer volume in 

multiply-listed equity and ETF options 

classes in a month will receive an 

additional $0.02 per contract Penny 

Pilot Options Customer Rebate to Add 

Liquidity for each transaction which 

adds liquidity in Penny Pilot Options in 

that month.’’ 

NOM Market Maker Rebates To Add 

Liquidity 

Today, the Exchange pays NOM 

Market Maker Penny Pilot Options 

Rebates to Add Liquidity based on 

various criteria in six tiers with rebates 

which range from $0.20 to $0.42 per 

contract as noted below. 

Monthly 

volume 

Rebate to add 

liquidity 

Tier 1 ............ Participant adds NOM Market Maker liquidity in Penny Pilot Options and/or Non-Penny Pilot 

Options of up to 0.10% of total industry customer equity and ETF option average daily volume (‘‘ADV’’) contracts per day in a month.

$0.20 

Tier 2 ............ Participant adds NOM Market Maker liquidity in Penny Pilot Options and/or Non-Penny Pilot 

Options above 0.10% to 0.25% of total industry customer equity and ETF option ADV contracts per day in a month.

$0.25 

Tier 3 ............ Participant adds NOM Market Maker liquidity in Penny Pilot Options and/or Non-Penny Pilot 

Options above 0.25% to 0.60% of total industry customer equity and ETF option ADV contracts per day in a month.

$0.30 or $0.40 in the following 

symbols QQQ, SPY and 

VXX. 

Tier 4 ............ Participant adds NOM Market Maker liquidity in Penny Pilot Options and/or Non-Penny Pilot 

Options of above 0.60% to 0.90% of total industry customer equity and ETF option ADV 

contracts per day in a month.

$0.32 or $0.40 in the following 

symbols QQQ, VXX and 

SPY. 

Tier 5 ............ Participant adds NOM Market Maker liquidity in Penny Pilot Options and/or Non-Penny Pilot 

Options of above 0.30% of total industry customer equity and ETF option ADV contracts per 

day in a month and qualifies for the Tier 7 or Tier 8 Customer and/or Professional Rebate to 

Add Liquidity in Penny Pilot Options.

$0.40 

Tier 6 ............ Participant adds NOM Market Maker liquidity in Penny Pilot Options and/or Non-Penny Pilot 

Options above 0.80% of total industry customer equity and ETF option ADV contracts per 

day in a month and qualifies for the Tier 7 or Tier 8 Customer and/or Professional Rebate to 

Add Liquidity in Penny Pilot Options or Participant adds NOM Market Maker liquidity in 

Penny Pilot Options and/or Non-Penny Pilot Options above 0.90% of total industry customer 

equity and ETF option ADV contracts per day in a month.

$0.42 

Today, the Tier 3 NOM Market Maker 

Penny Pilot Options Rebate to Add 

Liquidity pays a $0.30 per contract 

rebate, except in QQQ, SPY and VXX 

which pay a $0.40 per contract rebate to 

Participants that add NOM Market 

Maker liquidity in Penny Pilot Options 

and/or Non-Penny Pilot Options above 

0.25% to 0.60% of total industry 

customer equity and ETF option ADV 

contracts per day in a month. The 

Exchange proposes to add AAPL to the 

list of symbols that are eligible for the 

Tier 3 rebate of $0.40 per contract. 

Today, the Exchange pays a Tier 3 NOM 

Market Maker Penny Pilot Options 

Rebate to Add Liquidity of $0.30 per 

contract in AAPL. Today, the Tier 4 

NOM Market Maker Penny Pilot 

Options Rebate to Add Liquidity pays a 

$0.32 per contract rebate, except in 

QQQ, SPY and VXX which pay a $0.40 

per contract rebate to Participants that 

add NOM Market Maker liquidity in 

Penny Pilot Options and/or Non-Penny 

Pilot Options of above 0.60% to 0.90% 

of total industry customer equity and 

ETF option ADV contracts per day in a 

month. The Exchange proposes to add 

AAPL to the list of symbols that are 

eligible for the Tier 4 rebate of $0.40 per 

contract. Today, the Exchange pays a 

Tier 4 NOM Market Maker Penny Pilot 

Options Rebate to Add Liquidity of 

$0.32 per contract in AAPL. The 

Exchange believes that paying a higher 

rebate for AAPL transactions will 

encourage a greater number of 

transactions in AAPL. 

Today, the Tier 6 NOM Market Maker 

Penny Pilot Option Rebate to Add 

Liquidity pay a $0.42 per contract rebate 

to Participants that add NOM Market 

Maker liquidity in Penny Pilot Options 

and/or Non-Penny Pilot Options above 

0.80% of total industry customer equity 

and ETF option ADV contracts per day 

in a month and qualifies for the Tier 7 

or Tier 8 Customer and/or Professional 

Rebate to Add Liquidity in Penny Pilot 

Options or Participant adds NOM 

Market Maker liquidity in Penny Pilot 

Options and/or Non-Penny Pilot 

Options above 0.90% of total industry 

customer equity and ETF option ADV 

contracts per day in a month. The 

Exchange is proposing to amend the 

Tier 6 NOM Market Maker Penny Pilot 

Options Rebate to Add Liquidity to also 

provide that a Participant that adds 

Customer, Professional, Firm, Non-NOM 

Market Maker, and/or Broker-Dealer 

liquidity in Penny Pilot Options and/or 

Non-Penny Pilot Options of 1.40% or 

more of national customer volume in 

multiply-listed equity and ETF options 

classes in a month may also qualify for 

the Tier 6 rebate of $0.42 per contract. 

This would provide Participants another 

method to qualify for the rebate. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule changes are consistent with the 

provisions of Section 6 of the Act,11 in 

general, and with Section 6(b)(4) of the 

Act,12 in particular, in that they provide 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 230 / Monday, December 1, 2014 / Notices 71149 

13See NASDAQ OMX PHLX LLC’s Pricing 

Schedule. See also the International Securities 

Exchange LLC’s Fee Schedule. Both of these 

markets segment pricing by symbol. 

14Today, a Participant may qualify for the NOM 

Market Maker Tier 6 Rebate to Add Liquidity in 

Penny Pilot Options by adding NOM Market Maker 

liquidity in Penny Pilot Options and/or Non-Penny 

Pilot Options above 0.80% of total industry 

customer equity and ETF option ADV contracts per 

day in a month and qualifying for the Tier 7 or Tier 

8 Customer and/or Professional Rebate to Add 

Liquidity in Penny Pilot Options or adding NOM 

Market Maker liquidity in Penny Pilot Options and/ 

or Non-Penny Pilot Options above 0.90% of total 

industry customer equity and ETF option ADV 

contracts per day in a month. The Exchange is 

amending Tier 6 to permit a Participant to qualify 

for the $0.42 per contract rebate by adding 

Customer, Professional, Firm, Non-NOM Market 

Maker, and/or Broker-Dealer liquidity in Penny 

Pilot Options and/or Non- Penny Pilot Options of 

1.40% or more of national customer volume in 

multiply-listed equity and ETF options classes in a 

month 

for the equitable allocation of reasonable 

dues, fees and other charges among 

members and issuers and other persons 

using any facility or system which 

NASDAQ operates or controls as 

described in detail below. 

Customer and Professional Rebates To 

Add Liquidity 

The Exchange’s proposal to amend 

the Customer and Professional Penny 

Pilot Options Rebates to Add Liquidity 

Tiers 1–5 and Tier 8 to provide that 

Participants may qualify for those 

rebates by adding not only Customer 

and Professional liquidity in Penny and/ 

or Non-Penny Pilot Options, as 

specified in each tier, but also Firm, 

Non-NOM Market Maker and BrokerDealer liquidity in Penny and/or NonPenny Pilot Options is reasonable 

because the Exchange believes that the 

addition of the various types of market 

participant liquidity will allow 

additional Participants to qualify for 

these rebate tiers, who may not qualify 

today, or receive higher rebates. The 

Exchange believes that offering 

additional types of liquidity to qualify 

for the Customer and Professional 

Penny Pilot Options Rebates to Add 

Liquidity will incentivize Participants 

to send a greater amount of order flow 

to NOM. 

The Exchange’s proposal to amend 

the Customer and Professional Penny 

Pilot Options Rebates to Add Liquidity 

Tiers 1–5 and Tier 8 to provide that 

Participants may qualify for those 

rebates by adding not only Customer 

and Professional liquidity in Penny and/ 

or Non-Penny Pilot Options, as 

specified in each tier, but also Firm, 

Non-NOM Market Maker and BrokerDealer liquidity in Penny and/or NonPenny Pilot Options is equitable and not 

unfairly discriminatory because the 

Exchange is permitting all types of 

market participant liquidity in Tiers 1– 

5 and Tier 8 of its Customer and 

Professional Penny Pilot Options rebate 

tiers as a means to qualify for these 

rebates. Further, all Participants may 

qualify to be eligible for these rebates, 

provided they transact the requisite 

amount of liquidity. Customer liquidity 

offers unique benefits to the market 

which benefits all market participants. 

Customer liquidity benefits all market 

participants by providing more trading 

opportunities, which attracts market 

makers. An increase in the activity of 

these market participants in turn 

facilitates tighter spreads, which may 

cause an additional corresponding 

increase in order flow from other market 

participants. The Exchange believes that 

encouraging Participants to add 

Professional liquidity creates 

competition among options exchanges 

because the Exchange believes that the 

rebates may cause market participants to 

select NOM as a venue to send 

Professional order flow. 

The Exchange believes that with 

respect to Tier 8, permitting Participants 

to add Firm, Non-NOM Market Maker 

and/or Broker-Dealer liquidity, in 

addition to Customer and Professional 

liquidity, to qualify for the additional 

$0.02 per contract Tier 8 incentive is 

reasonable because the Exchange 

believes the opportunity to calculate the 

qualification for the incentive by adding 

other types of market participant 

liquidity will allow additional market 

participants to qualify for the incentive. 

Additionally, permitting other 

qualifying volume to count towards 

meeting the Tier 8 incentive will 

incentivize Participants to send a greater 

amount of order flow to NOM. 

The Exchange believes that with 

respect to Tier 8, permitting Participants 

to add Firm, Non-NOM Market Maker 

and/or Broker-Dealer liquidity, in 

addition to Customer and Professional 

liquidity, to qualify for the additional 

$0.02 per contract Tier 8 incentive is 

equitable and not unfairly 

discriminatory because all Participants 

are eligible for the Tier 8 incentive, 

provided they transact the requisite 

volume. 

NOM Market Maker Penny Pilot 

Options Rebates To Add Liquidity 

The Exchange’s proposal to amend 

the NOM Market Maker Penny Pilot 

Options Rebate to Add Liquidity Tiers 

3 and 4 to increase the AAPL rebate 

from $0.30 to $0.40 per contract in Tier 

3 and from $0.32 to $0.40 per contract 

in Tier 4 is reasonable because the 

proposal seeks to encourage Participants 

to transact a greater amount of AAPL 

liquidity in order to receive the higher 

rebate of $0.40 per contract. The 

Exchange believes that offering 

Participants NOM Market Makers the 

ability to obtain higher rebates is 

reasonable because it will encourage 

additional order interaction. 

The Exchange’s proposal to amend 

the NOM Market Maker Penny Pilot 

Options Rebate to Add Liquidity Tiers 

3 and 4 to increase the AAPL rebate 

from $0.30 to $0.40 per contract in Tier 

3 and from $0.32 to $0.40 per contract 

in Tier 4 is equitable and not unfairly 

discriminatory because all NOM Market 

Makers may qualify for the Tier 3 and 

Tier 4 NOM Market Maker Penny Pilot 

Options Rebate to Add Liquidity. 

The Exchange believes that it is 

reasonable, equitable, and not unfairly 

discriminatory to adopt different pricing 

for AAPL, as compared to other options, 

because pricing by symbol is a common 

practice on many U.S. options 

exchanges as a means to incentivize 

order flow to be sent to an exchange for 

execution in the most actively traded 

options classes, in this case actively 

traded Penny Pilot Options.13 The 

Exchange notes that AAPL is one of the 

most actively traded options in the U.S. 

The Exchange believes that this pricing 

will incentivize members to transact 

options on AAPL on NOM in order to 

obtain the higher $0.40 per contract 

rebate. 

The Exchange’s proposal to amend 

the Tier 6 NOM Market Maker Penny 

Pilot Options Rebate to Add Liquidity to 

offer an additional method 14 to qualify 

for the $0.42 per contract rebate is 

reasonable because additional 

Participants may qualify for the Tier 6 

rebate if they are able to transact the 

requisite volume specified in the 

additional proposed qualification to add 

any type of market participant liquidity. 

The Exchange also believes that this 

amendment to the Tier 6 NOM Market 

Maker Penny Pilot Options Rebate to 

Add Liquidity will incentivize 

Participants to send a greater amount of 

order flow to NOM. 

The Exchange’s proposal to amend 

the Tier 6 NOM Market Maker Penny 

Pilot Options Rebate to Add Liquidity to 

offer an additional method to qualify for 

the $0.42 per contract is equitable and 

not unfairly discriminatory because all 

Participants may qualify for the Tier 6 

rebate provided they transact the 

requisite amount of liquidity. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

NASDAQ does not believe that the 

proposed rule changes will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
71150 Federal Register / Vol. 79, No. 230 / Monday, December 1, 2014 / Notices 

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

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

The Exchange believes that amending 

Tiers 1–5 and Tier 8 of the Customer 

and Professional Penny Pilot Options 

Rebates to Add Liquidity, as well as the 

Tier 8 incentive of $0.02 per contract to 

permit Participants to add all types of 

market participant liquidity does not 

create an undue burden on competition, 

rather the proposal will incentivize 

market participants to send additional 

order flow to the Exchange. Customer 

liquidity offers unique benefits to the 

market which benefits all market 

participants. Customer liquidity benefits 

all market participants by providing 

more trading opportunities, which 

attracts market makers. An increase in 

the activity of these market participants 

in turn facilitates tighter spreads, which 

may cause an additional corresponding 

increase in order flow from other market 

participants. The Exchange believes that 

encouraging Participants to add 

Professional liquidity creates 

competition among options exchanges 

because the Exchange believes that the 

rebates may cause market participants to 

select NOM as a venue to send 

Professional order flow. 

The Exchange’s proposal to amend 

the Tier 3 and 4 NOM Market Maker 

Penny Pilot Options Rebates to Add 

Liquidity to pay a higher rebate for 

AAPL of $0.40 per contract, similar to 

SPY, QQQ and VXX, does not create an 

undue burden on competition because 

all NOM Market Makers may qualify for 

the Tier 3 or 4 NOM Market Maker 

Penny Pilot Options Rebate to Add 

Liquidity. The Exchange’s proposal to 

offer another means to qualify for the 

Tier 6 NOM Market Maker Penny Pilot 

Options Rebate to Add Liquidity does 

not create an undue burden on 

competition, rather the proposal will 

incentivize market participants to send 

additional order flow to the Exchange. 

The Exchange believes the differing 

outcomes, rebates and fees created by 

the Exchange’s proposed pricing 

incentives contribute to the overall 

health of the market place to the benefit 

of all Participants that willing choose to 

transact options on NOM. For the 

reasons specified herein, the Exchange 

does not believe this proposal creates an 

undue burden on competition. The 

Exchange operates in a highly 

competitive market comprised of twelve 

U.S. options exchanges in which many 

sophisticated and knowledgeable 

market participants can readily and do 

send order flow to competing exchanges 

if they deem fee levels or rebate 

incentives at a particular exchange to be 

excessive or inadequate. These market 

forces support the Exchange belief that 

the proposed rebate structure and tiers 

proposed herein are competitive with 

rebates and tiers in place on other 

exchanges. The Exchange believes that 

this competitive marketplace continues 

to impact the rebates present on the 

Exchange today and substantially 

influences the proposals set forth above. 

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.15 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 

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 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–2014–105 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–2014–105. 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 Web site (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 Web site 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; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NASDAQ–2014–105, and should be 

submitted on or before December 22, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28172 Filed 11–28–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73677; File No. SR–BATS– 

2014–058] 

Self-Regulatory Organizations; BATS 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change to Rule 11.24 of BATS 

Exchange, Inc. 

November 24, 2014. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

17, 2014, BATS Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BATS’’) 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 Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 


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