Document ID: SEC-2018-1800-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2018-11-26T05:00Z

[Federal Register Volume 83, Number 227 (Monday, November 26, 2018)]
[Notices]
[Pages 60527-60529]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-25735]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84633; File No. SR-NASDAQ-2018-091]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend The Nasdaq Options Market LLC (``NOM'') Fees

November 20, 2018.
    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 9, 2018, 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.
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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 amend The Nasdaq Options Market LLC 
(``NOM'') fees within Chapter XV, Section 3, titled ``Nasdaq Options 
Market--Ports and Other Services.''
    The text of the proposed rule change is available on the Exchange's 
website 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
    The purpose of the proposed rule change is to define ``account 
number'' and utilize that term within Chapter XV, Sections 3 and 9. 
Each change will be described in more detail below.
New Defined Term ``Account''
    The Exchange proposes to adopt a new definition within Chapter XV, 
Section 3 and apply this definition within Chapter XV, Sections 3 and 
9. The purpose of this defined new term ``account number'' is to 
conform the Exchange's use of certain terms within NOM Rules. This term 
would be utilized in Chapter XV to describe the manner in which pricing 
is calculated. Recently, the Nasdaq affiliated exchanges filed rule 
changes to conform the usage of various terms across its 6 affiliated 
options markets within the various rulebooks.\3\ The Exchange believes 
that utilizing the same defined terms, where possible, across its 6 
affiliated options markets will avoid confusion for certain rules and 
pricing purposes. The term ``account number'' can be defined 
identically across Nasdaq's 6 affiliated options markets for purposes 
of pricing ports. The Exchange is not amending the manner in which 
pricing will be applied with respect to this particular change. The 
Exchange proposes to utilize the defined term ``account number'' in 
place of the term ``mnemonic,'' which was not defined in the pricing 
rules. The insertion of the new defined term is intended to add more 
specificity and clarity to the current pricing.
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    \3\ NOM has filed to define the terms ``account number,'' 
``badge'' and ``mnemonic'' at Chapter I, Section 1(a)(69), (70) and 
(71) respectively. See SR-NASDAQ-2018-085 (not yet published) 
[published on November 16, 2018]. Nasdaq Phlx LLC has filed to 
define the terms ``account number,'' ``badge'' and ``mnemonic'' at 
Rule 1000(b)(51), (52) and (53) respectively. See SR-Phlx-2018-69 
(not yet published). Nasdaq BX, Inc. has filed to define the terms 
``account number,'' ``badge'' and ``mnemonic'' at Chapter I, Section 
1(a)(70), (71) and (72) respectively. See Securities Exchange Act 
Release No. 84520 (November 1, 2018) (SR-BX-2018-050) (not yet 
published) [published on November 7, 2018]. See also ISE Rule 
100(a)(1), (5) and (34) which defines the terms ``account number,'' 
``badge'' and ``mnemonic,'' respectively. See also GEMX Rule 
100(a)(1), (5) and (35) which defines the terms ``account number,'' 
``badge'' and ``mnemonic,'' respectively. See also MRX Rule 
100(a)(1), (5) and (36) which defines the terms ``account number,'' 
``badge'' and ``mnemonic,'' respectively.
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    At this time, the Exchange proposes to define an ``account number'' 
within Chapter XV, Section 3 to mean a number assigned to a 
Participant. Participants may have more than one account number. The 
term ``mnemonic'' has been used frequently throughout Chapter XV 
without being defined. The Exchange proposes to remove the term 
``mnemonic'' from Chapter XV, Section 3 and replace the term with the 
defined term ``account number'' for FIX and the OTTO protocols. The 
Exchange notes that the terms mnemonic and account number were being 
used interchangeably. The Exchange recently defined both terms in its 
rules.\4\ The term account number is appropriate to describe these 
fees. The Exchange is not amending the manner in which it assesses 
those port fees, rather the Exchange simply proposes to utilize the new 
term to better describe its current pricing.
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    \4\ A ``mnemonic'' is defined as an acronym comprised of letters 
and/or numbers assigned to Participants. A Participant account may 
be associated with multiple mnemonics. See SR-NASDAQ-2018-085 (not 
yet published) [published on November 16, 2018]. Mnemonics are 
issued to Participants to identify associated persons of 
Participants.
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    Also, the Exchange proposes to remove the term ``mnemonic'' from 
the CTI Port Fee, FIX DROP Port Fee, OTTO DROP Fee, ITTO Port Fee and 
Bono Port Fee. Today, these ports are assessed only one fee per port, 
per month and therefore adding the term ``per account number'' would be 
redundant and unnecessary. These ports are associated with one account 
number. The Exchange is not proposing to amend the manner in which 
these ports are assessed, rather the Exchange proposes to eliminate the 
``per mnemonic'' description. The Exchange believes that the billing is 
clearly defined as ``per port, per month.''
    Account number is also being defined in Section 9, ``Account Fee--
Options.'' The Exchange is not amending the manner in which this fee is 
billed, rather the Exchange is defining the term account number within 
Section 9. The defined term account number will be utilized 
consistently throughout the NOM pricing, where applicable.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\5\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\6\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges

[[Page 60528]]

among members and issuers and other persons using any facility, and is 
not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4) and (5).
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New Defined Term ``Account''
    The Exchange's proposal to define the term ``account number'' 
within Chapter XV, Sections 3 and 9 and apply that term within Chapter 
XV, Section 3, in place of the term ``mnemonic'' as to the manner in 
which FIX and OTTO Port Fees are priced is reasonable because the term 
is defined and will be utilized consistently throughout Chapter XV, 
where applicable. The usage of the defined term ``account number'' will 
bring uniformity to the term and its usage across the 6 affiliated 
options markets. The proposed change to utilize the defined term will 
not amend the manner in which the ports are billed, rather it will also 
bring greater clarity to pricing in Chapter XV, Sections 3 and 9.
    The Exchange's proposal to define the term ``account number'' 
within Chapter XV, Sections 3 and 9 and apply that term within Chapter 
XV, Section 3, in place of the term ``mnemonic'' for the FIX and OTTO 
Port Fees is equitable and not unfairly discriminatory because the 
Exchange proposes to apply that term uniformly in billing Participants 
utilizing those ports and for purposes of the Account Fee.
    The Exchange's proposal to remove the term ``mnemonic'' for the 
pricing of the CTI Port Fee, FIX DROP Port Fee, OTTO DROP Fee, ITTO 
Port Fee and Bono Port Fee is reasonable because, today, these ports 
are assessed only one fee per port, per month and this change will 
bring greater clarity to the manner in which these services are billed. 
The term ``mnemonic'' was undefined until the Exchange filed SR-NASDAQ-
2018-085.\7\ The manner in which the term ``mnemonic'' was defined for 
purposes of NOM's Rules is not the manner that was intended for pricing 
these ports. To that end, the Exchange proposes to remove the term 
``mnemonic'' and replace that term with ``account number,'' where 
applicable, to convey the intended manner in which the Exchange prices 
ports. Today, these ports are assessed only one fee per port, per month 
and therefore adding the term ``per account number'' would be redundant 
and unnecessary. These ports are associated with one account number. 
This proposal will conform the defined term across NOM Rules.\8\ The 
Exchange is not proposing to amend the manner in which these ports are 
assessed, rather the Exchange proposes to eliminate the ``per 
mnemonic'' description and more clearly define the manner in which 
these services are billed as ``per port, per month.''
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    \7\ This rule change is not yet published [published on November 
16, 2018].
    \8\ See Chapter I, Section 1(a)(69).
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    The Exchange's proposal to remove the term ``mnemonic'' for the 
pricing of the CTI Port Fee, FIX DROP Port Fee, OTTO DROP Fee, ITTO 
Port Fee and Bono Port Fee is equitable and not unfairly discriminatory 
because the Exchange will continue to uniformly assess all market 
participants these services in a uniform manner. The proposed change 
does not amend the manner in which these services are billed.

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 this proposal does not amend 
actual fees, rather the Exchange proposes to define a new term to be 
used more accurately to describe the manner in which certain services 
within Chapter XV, Sections 3 and 9 are billed.
New Defined Term ``Account''
    The Exchange's proposal to define the term ``account number'' 
within Chapter XV, Sections 3 and 9 and apply that term within Chapter 
XV, Section 3, in place of the term ``mnemonic'' with respect to the 
manner in which FIX and OTTO protocols are priced does not impose an 
undue burden on intra-market competition because the Exchange proposes 
to apply that term uniformly in billing Participants utilizing those 
ports and for purposes of the Account Fee. No changes are being made to 
the manner in which the Exchange bills these ports.
    The Exchange's proposal to remove the term ``mnemonic'' for the 
pricing of the CTI Port Fee, FIX DROP Port Fee, OTTO DROP Fee, ITTO 
Port Fee and Bono Port Fee does not impose an undue burden on intra-
market competition because the Exchange will continue to uniformly 
assess all market participants these services in a uniform manner. The 
proposed change does not amend the manner in which these services are 
billed.

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.\9\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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: (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 [email protected]. Please include 
File Number SR-NASDAQ-2018-091 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-2018-091. 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

[[Page 60529]]

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-2018-091 and should 
be submitted on or before December 17, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-25735 Filed 11-23-18; 8:45 am]
 BILLING CODE 8011-01-P