Federal Register / Vol. 82, No. 215 / Wednesday, November 8, 2017 / Notices 51885 

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

2 17 CFR 240.19b–4. 

3 Generally, under MARS, the Exchange pays 

participating NOM Participants to subsidize their 

costs of providing routing services to route orders 

to NOM. The Exchange believes that the proposed 

amendment to MARS will continue to attract higher 

volumes of electronic equity and ETF options 

volume to the Exchange from non-NOM 

Participants as well as NOM Participants. The order 

routing functionalities permit NOM Participants to 

provide access and connectivity to other 

Participants as well as utilize such access for 

themselves. The Exchange notes that one NOM 

Participant is eligible for payments under MARS, 

while another NOM Participant might potentially 

be liable for transaction charges associated with the 

execution of the order, because those orders were 

delivered to the Exchange through a NOM 

Participant’s connection to the Exchange and that 

Participant qualified for the MARS Payment. 

4Specifically the Participant’s System is required 

to: (1) Enable the electronic routing of orders to all 

of the U.S. options exchanges, including NOM; (2) 

provide current consolidated market data from the 

U.S. options exchanges; and (3) be capable of 

interfacing with NOM’s API to access current NOM 

match engine functionality. The NOM Participant’s 

System would also need to cause NOM to be one 

of the top three default destination exchanges for 

(a) individually executed marketable orders if NOM 

is at the national best bid or offer (‘‘NBBO’’), 

regardless of size or time, (b) orders that establish 

a new NBBO on NOM’s Order Book, but allow any 

user to manually override NOM as the default 

destination on an order-by-order basis. Any NOM 

Participant is permitted to avail itself of this 

arrangement, provided that its order routing 

functionality incorporates the features described 

herein and the Participant satisfies NOM that it 

appears to be robust and reliable. Participants 

remain solely responsible for implementing and 

operating its System. 

5For the purpose of qualifying for the MARS 

Payment, Eligible Contracts may include Firm, NonNOM Market Maker, Broker-Dealer, or Joint Back 

Office or ‘‘JBO’’ equity option orders that add 

liquidity and are electronically delivered and 

executed. Eligible Contracts do not include Mini 

Option orders. 

6The specified MARS Payments are paid on all 

executed Eligible Contracts that add liquidity, 

which are routed to NOM through a participating 

NOM Participant’s System and meet the requisite 

Eligible Contracts ADV. No payments are made 

with respect to orders that are routed to NOM, but 

not executed. Also, a Participant is not entitled to 

receive any other revenue from the Exchange for the 

use of its System specifically with respect to orders 

routed to NOM. Specifically, the specified MARS 

Payments are paid on all executed Eligible 

Contracts that add liquidity, which are routed to 

NOM through a participating NOM Participant’s 

Continued 

POSTAL SERVICE 

Product Change—Priority Mail 

Express, Priority Mail, & First-Class 

Package Service Negotiated Service 

Agreement 

AGENCY: Postal ServiceTM. 

ACTION: Notice. 

SUMMARY: The Postal Service gives 

notice of filing a request with the Postal 

Regulatory Commission to add a 

domestic shipping services contract to 

the list of Negotiated Service 

Agreements in the Mail Classification 

Schedule’s Competitive Products List. 

DATES: Date of notice required under 39 

U.S.C. 3642(d)(1): November 8, 2017. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth A. Reed, 202–268–3179. 

SUPPLEMENTARY INFORMATION: The 

United States Postal Service® hereby 

gives notice that, pursuant to 39 U.S.C. 

3642 and 3632(b)(3), on November 3, 

2017, it filed with the Postal Regulatory 

Commission a USPS Request to Add 

Priority Mail Express, Priority Mail, & 

First-Class Package Service Contract 25 

to Competitive Product List. Documents 

are available at www.prc.gov, Docket 

Nos. MC2018–20, CP2018–42. 

Elizabeth A. Reed, 

Attorney, Corporate and Postal Business Law. 

[FR Doc. 2017–24342 Filed 11–7–17; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81997; File No. SR– 

NASDAQ–2017–116] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to an 

Incentive to the Market Access and 

Routing Subsidy Program 

November 2, 2017. 

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 October 

31, 2017, The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, 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 pricing at Chapter XV, 

Section 2 entitled ‘‘Nasdaq Options 

Market—Fees and Rebates,’’ which 

governs pricing for Nasdaq Participants 

using The Nasdaq Options Market LLC 

(‘‘NOM’’), Nasdaq’s facility for 

executing and routing standardized 

equity and index options. The Exchange 

proposes to amend an incentive offered 

today related to its subsidy program, the 

Market Access and Routing Subsidy or 

‘‘MARS.’’ 

While changes to the Pricing 

Schedule pursuant to this proposal are 

effective upon filing, the Exchange has 

designated these changes to be operative 

on November 1, 2017. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NOM proposes to amend the 

Exchange’s pricing at Chapter XV, 

Section 2 entitled ‘‘Nasdaq Options 

Market—Fees and Rebates.’’ 

Specifically, the Exchange proposes to 

amend an incentive in note ‘‘d’’ offered 

to NOM Participants that qualify for any 

MARS Payment Tier in Chapter XV, 

Section 2(6) related to the MARS 

subsidy program. MARS pays a subsidy 

to NOM Participants that provide 

certain order routing functionalities to 

other NOM Participants and/or use such 

functionalities themselves.3

Background on MARS 

Today, to qualify for MARS, a NOM 

Participant’s routing system (hereinafter 

‘‘System’’) is required to meet certain 

criteria.4

MARS Payments are made to NOM 

Participants that have System Eligibility 

and have routed the requisite number of 

Eligible Contracts daily in a month 

(‘‘Average Daily Volume’’), which were 

executed on NOM.5 Today, NOM 

Participants that have System Eligibility 

and have executed the requisite number 

of Eligible Contracts in a month will be 

paid the following rebates: 6


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51886 Federal Register / Vol. 82, No. 215 / Wednesday, November 8, 2017 / Notices 

System and meet the requisite Eligible Contracts 

ADV. No payments are made with respect to orders 

that are routed to NOM, but not executed. 

7No payments are made with respect to orders 

that are routed to NOM, but not executed. 

8The term ‘‘Customer’’ or (‘‘C’’) applies to any 

transaction that is identified by a Participant for 

clearing in the Customer range at The Options 

Clearing Corporation which is not for the account 

of broker or dealer or for the account of a 

‘‘Professional.’’ See Chapter XV. 

9The term ‘‘Professional’’ or (‘‘P’’) 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. See 

Chapter XV. 

10The note ‘‘c’’ incentive can be found at Chapter 

XV, Section 2(1) and provides additional incentives 

to NOM Participants for meeting certain criteria 

specified therein. 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(4) and (5). 

13 If the Participant qualified for a higher note ‘‘c’’ 

rebate, the Participant would receive the 

appropriate note ‘‘c’’ rebate they qualified for in 

that month. 

14 Id. 

15 Id. 

Tiers Average daily 

volume (‘‘ADV’’) 

MARS payment 

(penny) 

MARS payment 

(non-penny) 

1 ............................................................................................................................................. 2,000 * $0.07 * $0.15 

2 ............................................................................................................................................. 5,000 * 0.09 * 0.20 

3 ............................................................................................................................................. 10,000 * 0.11 * 0.30 

4 ............................................................................................................................................. 20,000 * 0.15 * 0.50 

5 ............................................................................................................................................. 45,000 * 0.17 * 0.60 

Specifically, the specified MARS 

Payments are paid on all executed 

Eligible Contracts that add liquidity, 

which are routed to NOM through a 

participating NOM Participant’s System 

and meet the requisite Eligible Contracts 

ADV.7

Incentive 

Today, the Exchange pays certain 

Customer 8 and Professional 9 Penny 

Pilot Options Rebates to Add Liquidity. 

These rebates are structured as an 8 tier 

rebate program with certain eligibility 

requirements for each tier. In addition to 

the Customer and Professional Penny 

Pilot Options Rebates to Add Liquidity, 

the NOM Participant may also qualify 

for an additional rebate provided the 

NOM Participant qualifies for any 

MARS Payment Tier for each 

transaction which adds liquidity in 

Penny Pilot Options in that month. 

Today, the Exchange pays an additional 

$0.03 per contract Penny Pilot Options 

Customer and/or Professional Rebate to 

Add Liquidity for each transaction 

which adds liquidity in Penny Pilot 

Options in that month, in addition to 

qualifying Penny Pilot Options 

Customer and/or Professional Rebate to 

Add Liquidity Tiers 1–8. Also, today, 

NOM Participants that qualify for a note 

‘‘c’’ incentive 10 receive the greater of 

the note ‘‘c’’ or note ‘‘d’’ incentive. The 

Exchange proposes to increase the 

additional incentive in note ‘‘d’’ 

currently offered to NOM Participants 

that qualify for any MARS Payment Tier 

for each transaction, by increasing the 

additional $0.03 per contract Penny 

Pilot Options Customer and/or 

Professional Rebate to Add Liquidity for 

each transaction which adds liquidity in 

Penny Pilot Options in that month, in 

addition to qualifying Penny Pilot 

Options Customer and/or Professional 

Rebate to Add Liquidity Tiers 1–8, to 

$0.04 per contract. The Exchange 

believes that this proposal will continue 

to attract Penny Pilot and Non-Penny 

Pilot Options liquidity to NOM. All 

market participants benefit from the 

increased order interaction when more 

order flow is available on NOM. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,11 in general, and furthers the 

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

of the Act,12 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among Participants and issuers and 

other persons using any facility or 

system which the Exchange operates or 

controls, and is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange’s proposal to amend 

note ‘‘d’’ in Chapter XV, Section 2(1) to 

permit any MARS Payment tier to 

qualify a NOM Participant for an 

additional $0.04 per contract Penny 

Pilot Options Customer and/or 

Professional Rebate to Add Liquidity for 

each transaction which adds liquidity in 

Penny Pilot Options in that month, in 

addition to qualifying for Penny Pilot 

Options Customer and/or Professional 

Rebate to Add Liquidity Tiers 1–8,13 is 

reasonable because the proposed 

amendment should continue to 

encourage NOM Participants to qualify 

for both a MARS Payment tier and a 

Penny Pilot Options Customer and/or 

Professional Rebate to Add Liquidity, 

thereby executing a greater amount of 

order flow on NOM to the benefit of all 

market participants who may interact 

with the order flow. 

The Exchange’s proposal to amend 

note ‘‘d’’ in Chapter XV, Section 2(1) to 

permit any MARS Payment tier to 

qualify a NOM Participant for an 

additional $0.04 per contract Penny 

Pilot Options Customer and/or 

Professional Rebate to Add Liquidity for 

each transaction which adds liquidity in 

Penny Pilot Options in that month, in 

addition to qualifying for Penny Pilot 

Options Customer and/or Professional 

Rebate to Add Liquidity Tiers 1–8,14 is 

equitable and not unfairly 

discriminatory. All NOM Participants 

are eligible to qualify for a MARS 

Payment, provided they have System 

Eligibility, and all NOM Participants 

may be eligible for a Penny Pilot 

Options Customer and/or Professional 

Rebate to Add Liquidity provided they 

execute qualifying volume. All NOM 

Participants are eligible to qualify for 

the note ‘‘d’’ incentive provided the 

requisite requirements are met. The 

Exchange would uniformly pay the 

additional note ‘‘d’’ incentive to all 

qualifying NOM Participants. 

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. 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. 

The Exchange’s proposal to amend 

note ‘‘d’’ in Chapter XV, Section 2(1) to 

permit any MARS Payment tier to 

qualify a NOM Participant for an 

additional $0.04 per contract Penny 

Pilot Options Customer and/or 

Professional Rebate to Add Liquidity for 

each transaction which adds liquidity in 

Penny Pilot Options in that month, in 

addition to qualifying for Penny Pilot 

Options Customer and/or Professional 

Rebate to Add Liquidity Tiers 1–8,15


ethrower on DSK3G9T082PROD with NOTICES
Federal Register / Vol. 82, No. 215 / Wednesday, November 8, 2017 / Notices 51887 

16 15 U.S.C. 78s(b)(3)(A)(ii). 17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 81642 (Sept. 18, 

2017), 82 FR 44481 (Sept. 22, 2017) (‘‘Notice’’). 

4The subsequent description of the proposed rule 

changes is substantially excerpted from the 

Exchange’s description in the Notice. See Notice, 82 

FR 44481–83. 

5See Rule 612(d). 

does not impose an undue burden on 

intra-market competition. All NOM 

Participants are eligible to qualify for a 

MARS Payment, provided they have 

System Eligibility, and all NOM 

Participants may be eligible for a Penny 

Pilot Options Customer and/or 

Professional Rebate to Add Liquidity 

provided they execute qualifying 

volume. All NOM Participants are 

eligible to qualify for the note ‘‘d’’ 

incentive provided the requisite 

requirements are met. The Exchange 

would uniformly pay the additional 

note ‘‘d’’ incentive to all qualifying 

NOM Participants. 

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.16

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–2017–116 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2017–116. 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. 

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–2017–116 and 

should be submitted on or before 

November 29, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–24251 Filed 11–7–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–82005; File No. SR–PHLX– 

2017–055] 

Self-Regulatory Organizations; 

NASDAQ PHLX LLC; Order Approving 

Proposed Rule Changes To Amend 

Rules 1024, Conduct of Accounts for 

Options Trading, and 1025, 

Supervision of Accounts 

November 2, 2017. 

I. Introduction 

On September 7, 2017, NASDAQ 

PHLX LLC (‘‘Phlx’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (‘‘Exchange 

Act’’) 1 and Rule 19b–4 thereunder,2

proposed rule changes to amend Phlx 

Rules 1024 (Conduct of Accounts for 

Options Trading) and 1025 (Supervision 

of Accounts) to conform them more 

closely to the comparable rules of the 

Chicago Board Options Exchange 

(‘‘CBOE’’) and to make minor 

clarifications and corrections to the text. 

The proposed rule changes were 

published for comment in the Federal 

Register on September 22, 2017.3 The 

public comment period closed on 

October 13, 2017. The Commission 

received no comments on the proposed 

rule changes. This order approves the 

proposed rule changes. 

II. Description of the Proposed Rule 

Changes 4

Rules 1024 and 1025 contain 

regulatory requirements generally 

applicable to Phlx members and 

member organizations that conduct a 

public customer options business. The 

Exchange is proposing changes to 

certain sections of those rules to clarify 

the language and to correct inaccuracies. 

The Exchange also proposes to change 

certain rule language to conform the 

rules more closely to CBOE rules 

dealing with the same subject matter, in 

order to prevent inadvertent 

misunderstandings of the rules’ 

requirements. These rule changes are 

intended to promote more effective 

regulatory compliance by Exchange 

members and member organizations. 

The proposed changes are detailed 

below. 

Rule 1024(a)(i) 

Rule 1024(a)(i) governs registration of 

Options Principals.5 The rule currently 

provides that no member or member 

organization or individual associated 

with a member organization shall be 

approved to transact options business 

with the public until such persons, who 

are designated as Options Principals, 

have been approved by and registered 

with the Exchange. Additionally, it 

provides that persons engaged in the 

supervision of options sales practice or 

a person to whom the designated 

general partner or executive officer 


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