Document ID: SEC-2022-1615-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq BX, Inc.
Posted Date: 2022-12-19T05:00Z

[Federal Register Volume 87, Number 242 (Monday, December 19, 2022)]
[Notices]
[Pages 77649-77651]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27380]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96486; File No. SR-BX-2022-025]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Address an 
Erroneous Reference in Equity 4, Rule 4780(e)

December 13, 2022.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 77650]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on December 1, 2022, Nasdaq BX, Inc. (``BX'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``SEC'' or ``Commission'') 
the proposed rule change as described in Items I and II 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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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to address an erroneous reference in Equity 
4, Rule 4780(e).
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/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 this filing is to correct an erroneous reference in 
Equity 4, Rule 4780(e) involving the dissemination process of the 
Retail Liquidity Identifier as part of the Exchange's Retail Price 
Improvement Program (``RPI Program''). Under the RPI Program, all 
Retail Price Improvement Orders (``RPI Orders'') provide liquidity at a 
price at least $0.001 better than the National Best Bid and Offer 
(``NBBO'') through a special execution process.\3\ Currently, unless a 
Participant opts out of identifying their RPI Interest, the Exchange 
disseminates the Retail Liquidity Identifier when RPI interest is 
present on the Exchange.
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    \3\ Equity 4, Rule 4702(b)(5)(A) states that, ``A ``Retail Price 
Improving Order'' or ``RPI Order'' is an Order Type with a Non-
Display Order Attribute that is held on the Exchange Book in order 
to provide liquidity at a price at least $0.001 better than the NBBO 
through a special execution process described in Rule 4780. A Retail 
Price Improving Order may be entered in price increments of $0.001. 
RPI Orders collectively may be referred to as ``RPI Interest.''
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    Equity 4, Rule 4780(e) states that the Retail Liquidity Identifier 
will be disseminated when RPI interest is priced at least $0.001 per 
share better than the ``Exchange's'' Protected Bid or Protected Offer. 
However, this language is erroneous. In intent and practice, the 
Exchange disseminates the Retail Liquidity when RPI interest is priced 
at least $0.001 better than the NBBO. The Exchange's intent in this 
regard is evident in Equity 4, Rule 4702(b)(5)(A), which describes an 
RPI Order as being priced better than the NBBO. Moreover, measuring 
retail price improvement with reference to the NBBO, rather than to the 
Exchange's Best Bid or Offer, ensures that the RPI Program will alert 
participants to real price improvement opportunities that exist on 
Nasdaq [sic], i.e., prices that are better than the NBBO, rather than 
prices better than the Exchange's Best Bid or Offer, but not better 
than the NBBO.
    The Exchange proposes to correct this erroneous reference in Equity 
4, Rule 4780(e). The correction is necessary to ensure that the 
provision is consistent with the circumstances in which the Exchange 
intends to and actually disseminates the Retail Liquidity Identifier. 
It will also ensure that the Retail Liquidity Identifier will alert 
participants to genuine retail price improvement opportunities on the 
Nasdaq Book [sic], as discussed above.
    The Exchange noticed the error in the language and promptly sought 
to correct the inconsistency. The Exchange notes that it has not 
received any complaints or notices from Exchange Members expressing 
confusion or alerting the Exchange to the error.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\4\ in general, and furthers the objectives of section 
6(b)(5) of the Act,\5\ in particular, in that it is designed to promote 
just and equitable principles of trade, to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and, in general to protect investors and the public interest. 
The proposal would correct an error that otherwise renders inaccurate 
an example of the application of Equity 4, Rule 4780(e). The Exchange 
believes that it is consistent with the interest of the public, 
investors, and the market for the Exchange to take steps to ensure that 
its Rulebook is accurate.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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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. The proposed rule change is 
non-substantive and it will have no impact on competition because it 
simply corrects an error in the Rule text to render the text more 
accurate.

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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\ 
Because the proposed rule change does not: (i) significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \6\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \7\ 17 CFR 240.19b-4(f)(6).
    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission. The 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the

[[Page 77651]]

Commission to waive the 30-day operative delay so that the proposed 
rule change may become operative immediately. The Exchange requests 
this waiver so that it can correct an error in its rulebook as soon as 
possible to avoid any potential confusion regarding the operation of 
the Retail Liquidity Identifier. The Commission believes that waiving 
the 30-day operative delay is consistent with the protection of 
investors and the public interest so that the Exchange's rulebook 
accurately represents the operation of the Retail Liquidity Identifier 
without undue delay. For this reason, the Commission hereby waives the 
30-day operative delay and designates the proposal operative upon 
filing.\12\
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 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 [email protected]. Please include 
File Number SR-BX-2022-025 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-BX-2022-025. 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 offices 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-BX-2022-025, and should be submitted on 
or before January 9, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27380 Filed 12-16-22; 8:45 am]
BILLING CODE 8011-01-P