[Federal Register Volume 83, Number 94 (Tuesday, May 15, 2018)]
[Notices]
[Pages 22570-22572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10258]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83198; File No. SR-NASDAQ-2018-035]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
to Memorialize Order and Execution Available to Participants Into 
Chapter VI, Section 19, Entitled Data Feeds

May 9, 2018.
    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 April 27, 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 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 amend the Nasdaq Options Market LLC 
(``NOM'') Rules to memorialize its order and execution information into 
Chapter VI, Section 19, entitled ``Data Feeds.''
    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 the 
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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to memorialize its order and execution 
information into Chapter VI, Section 19, entitled ``Data Feeds.'' The 
Exchange proposes to rename this rule ``Data Feeds and Trade 
Information.'' The Exchange proposes other grammatical corrections in 
Section 19(a) as well.
Section 19(b)
    First, the Exchange proposes to adopt a new Section 19(b) and 
memorialize the following order and execution information which was 
previously filed by the Exchange: (1) CTI; (2) TradeInfo; (3) FIX DROP; 
and (4) OTTO DROP.\3\
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    \3\ See Securities Exchange Act Release No. 65180 (August 22, 
2011), 76 FR 53521 (August 26, 2011) (SR-NASDAQ-2011-111) 
(``Information Filing'').
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    The Exchange originally noted in the Information Filing that CTI 
offers real-time clearing trade updates. The message containing the 
trade details is also simultaneously sent to the The Options Clearing 
Corporation. The trade messages are routed to a member's connection 
containing certain information. The administrative and market event 
messages include, but are not limited to: System event messages to 
communicate operational-related events; options directory messages to 
relay basic option symbol and contract information for options traded 
on the Exchange; complex strategy messages to relay information for 
those strategies traded on the Exchange; trading action messages to 
inform market participants when a specific option or strategy is halted 
or released for trading on the Exchange; and an indicator which 
distinguishes electronic and non-electronically delivered orders.
    The Exchange is proposing to more specifically describe the CTI 
offering and memorialize it within Section 19(b)(1). The description 
provides more detail as to the current functionality of CTI, which is 
not changing. The description would continue to state that CTI is a 
real-time clearing trade update message that is sent to a Participant 
after an execution has occurred and contains trade details specific to 
that Participant. The information includes, among other things, the 
following: (i) The Clearing Member Trade Agreement or ``CMTA'' or The 
Options Clearing Corporation or ``OCC'' number; (ii) Exchange badge or 
house number; (iii) the Exchange

[[Page 22571]]

internal firm identifier; (iv) an indicator which will distinguish 
electronic and non-electronically delivered orders; (v) liquidity 
indicators and transaction type for billing purposes; and (vi) 
capacity. The Exchange proposes to not add the sentence which states, 
``The message containing the trade details is also simultaneously sent 
to The Options Clearing Corporation.'' The Exchange's System sends 
clearing information to OCC for each transaction. This sentence does 
not add information that is useful or relevant and therefore the 
Exchange proposes to remove it. The Exchange notes that while the 
description is being amended, it retains more broadly the former 
descriptions. The information provided is specific to a market 
participant. The Exchange is expressing more specifically the type of 
data contained in CTI. The CTI offering is not changing. The Exchange 
is providing more details regarding the CTI offering than was 
originally filed in the Information Filing.
    The Exchange originally noted in the Information Filing that 
TradeInfo allows users to scan for their NASDAQ-listed orders submitted 
in NASDAQ. Users can then perform actions on their orders. Users can 
scan for all orders in a particular security or all orders of a 
particular type, regardless of their status (open, canceled, executed, 
etc.). For example, after scanning for open orders the user is then 
able to select an open order and is allowed to make corrections to the 
order or cancel the order. TradeInfo also allows the users to scan 
other orders, such as executed, cancelled, broken, rejected and 
suspended orders.
    The Exchange proposes to amend and memorialize TradeInfo within 
Section 19(b)(2). The Exchange proposes to note that TradeInfo is a 
user interface, as compared to a data stream, to add more detail to the 
description. While some descriptive language is being removed from the 
rules, such as permitting a subscribing member to scan other order 
statuses, such as executed, cancelled, broken, rejected and suspended 
orders, the Exchange believes that this language is covered in the 
current description in that the text indicates that all orders may be 
searched regardless of their status. The Exchange is also adding more 
information to the TradeInfo description to provide Participants 
greater transparency.
    The Exchange originally noted in the Information Filing that the 
Order Entry DROP provides real time information regarding orders sent 
to NOM and executions that occurred on NOM. The DROP interface is not a 
trading interface and does not accept order messages. The ``Order Entry 
DROP'' interface is being renamed ``FIX DROP'' for clarity as it 
relates to FIX ports.
    The Exchange proposes to amend and memorialize FIX DROP within 
Section 19(b)(3). The Exchange is expanding on the original description 
by providing more detail by stating that it is a real-time order and 
execution update message that is sent to a Participant after an order 
has been received/modified or an execution has occurred and contains 
trade details specific to that Participant. The information includes, 
among other things, the following: (1) Executions; (2) cancellations; 
(3) modifications to an existing order; and (4) busts or post-trade 
corrections.
    The Exchange originally noted in the Information Filing that OTTO 
DROP provides real-time information regarding orders entered through 
OTTO and the execution of those orders. The OTTO DROP data feed is not 
a trading interface and does not accept order messages. The Exchange is 
not amending this description rather the Exchange is memorializing the 
description within Section 19(b)(4).
    The Exchange considers it appropriate to memorialize the order and 
execution information available on NOM within a rule so that 
Participants may understand the trade information which is available on 
the Exchange as it pertains to a firm's trading information. This data 
is available to all Participants regarding that Participant's 
transactions. Pricing for these products is included in the Exchange's 
fee schedule at Chapter XV, Section 3.\4\
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    \4\ See also SR-NASDAQ-2018-036 (not yet published) which 
proposes conforming changes to the fee schedule.
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Section 19(a)
    The Exchange proposes minor changes to Section 19(a)(1) and (2) to 
change the language to indicate the Nasdaq ITCH to Trade Options and 
Best of Nasdaq Options each separately are data feeds and removing the 
``A'' before the description.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934 (the 
``Act''),\5\ in general, and furthers the objectives of Section 6(b)(5) 
of the Act,\6\ in particular, in that it is designed to promote just 
and equitable principles of trade, to remove impediments to and perfect 
the mechanism for a free and open market and a national market system, 
and, in general, to protect investors and the public interest, by 
providing greater transparency as to the order and execution 
information offered on Nasdaq. The Exchange notes that it described 
this information in prior rule changes.\7\ The Exchange believes that 
memorializing this information within a rule and updating the 
information will provide market participants with a list of information 
available specific to their trading on NOM. The Exchange believes that 
this proposal is consistent with the Act because it provides 
information on the content available to market participants regarding 
the trades they execute on NOM.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ See note 3 above.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\8\ the Exchange does 
not believe that the proposed rule change will impose any burden on 
intermarket or intra-market competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange's 
proposal does not impose an undue burden on competition, rather the 
Exchange is seeking to provide greater transparency within its rules 
with respect to the various order and execution information offered on 
NOM.
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    \8\ 15 U.S.C. 78f(b)(8).
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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

    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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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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[[Page 22572]]

    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\10\ 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 Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Exchange states that 
such waiver will allow it to update its rules immediately to provide 
more information regarding the order and execution information it 
offers and further the protection of investors and the public interest 
because it will provide greater transparency as to the trade detail 
available to members. For this reason, the Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest and, therefore, the Commission 
designates the proposed rule change to be operative upon filing.\11\
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    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 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-2018-035 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-2018-035. 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-2018-035 and should be submitted 
on or before June 5, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-10258 Filed 5-14-18; 8:45 am]
 BILLING CODE 8011-01-P