[Federal Register Volume 89, Number 6 (Tuesday, January 9, 2024)]
[Notices]
[Pages 1134-1135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00179]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99269; File No. SR-NASDAQ-2023-056]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Exchange's Schedule of Fees at Equity 7 Sections 114 and 118

January 3, 2024.
    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 December 21, 2023, 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 Exchange's schedule of fees at 
Equity 7, Sections 114 and 118.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/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
    On December 13, 2023, Nasdaq experienced a technical issue with its 
RASH order handling system. The issue involved a duplication of an 
internal order identification numbers, which impacted a subset of 
orders for some members, including unacknowledged orders, an inability 
to cancel open orders, intermittent port disconnects, missing execution 
reports, and mismatched execution reports.
    Because Nasdaq's fee and rebate schedule in Equity 7, Sections 114 
and 118 provide that members may achieve better pricing if they achieve 
certain specified volumes of activity during a given month (as measured 
by Consolidated Volume (defined below) and Average Daily Volume 
(``ADV'')), the RASH issue may have impacted the ability of affected 
members to reach the required volumes. By way of illustration, a member 
with shares of liquidity provided in all securities through one of its 
Nasdaq Market Center market participant identifiers (``MPIDs'') that 
represent more than 1.50% of the total consolidated volume reported to 
all consolidated transaction reporting plans by all exchanges and trade 
reporting facilities in equity securities of at least one round lot 
(``Consolidated Volume'') during a month receives a rebate of $0.00305 
per share executed with respect to liquidity that it provides during 
the month through displayed quotes/orders. By contrast, members 
providing lower volumes of liquidity receive lower rebates with respect 
to displayed quotes/order ranging from $0.0020 to $0.0030 per share 
executed. If a member had provided liquidity that represented slightly 
in excess of 1.50% of Consolidated Volume on each day of December 2023 
other than December 13, but was prevented from reaching comparable 
levels on that date due to the RASH issue, it is possible that the 
rebate it would ultimately earn for the entire month would be lower 
than would otherwise have been the case. Similarly, under Equity 7, 
Section 114, a member may be entitled to receive an enhanced rebate 
under Nasdaq's Qualified Market Maker Program, Designated Liquidity 
Provider Program, or its NBBO Program, based on its achievement of 
certain Consolidated Volume or ADV criteria specified in the rule. The 
ability of a member to achieve these criteria may have also been 
affected by the RASH issue.
    Accordingly, in order to ensure that fees and rebates are not 
adversely impacted by the RASH issue, Nasdaq proposes to exclude 
December 13, 2023 from calculations of Consolidated Volume and ADV made 
under Equity 7, Sections 114 and 118 if doing so would allow a member 
to achieve more favorable pricing than would be the case if the day 
were included. Thus, members that are unaffected by the RASH issue 
would not have the day arbitrarily excluded from their calculations. 
Nasdaq will perform all calculations needed to implement the change.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\3\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\4\ in particular, in that it provides 
for the equitable allocation of reasonable dues, fees and other charges 
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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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(4) and (5).
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    Nasdaq believes that the proposed change is reasonable because it 
will allow members to receive December 2023 pricing that is based on 
either the exclusion, or the inclusion, of December 13, whichever is 
more favorable to the member. The proposed change is equitable and not 
unfairly discriminatory, because it will ensure that the fees and 
rebates applicable to members that were subject to the RASH issue are 
not adversely affected by the issue.

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 change will help to ensure 
that members that were affected by the RASH issue are not required to 
pay higher fees, or receive lower rebates, during December 2023 than 
would otherwise be the case. Accordingly, Nasdaq believes that the 
proposed changes will protect members from incurring unanticipated 
charges.

[[Page 1135]]

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.\5\
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    \5\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-NASDAQ-2023-056 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-2023-056. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NASDAQ-2023-056 and should 
be submitted on or before January 30, 2024.
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    \6\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\6\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-00179 Filed 1-8-24; 8:45 am]
BILLING CODE 8011-01-P