[Federal Register Volume 84, Number 245 (Friday, December 20, 2019)]
[Notices]
[Pages 70239-70243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27456]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-87760; File No. SR-BX-2019-045]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change to the Exchange's
Transaction Fees and Credits and Qualified Market Maker Program, at
Equity 7, Section 118
December 16, 2019.
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 11, 2019, 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, 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: (i) The Exchange's transaction fees
and credits, at Equity 7, Section 118(a); and (ii) its Qualified Market
Maker Program, at Equity 7, Section 118(f), as described further below.
The text of the proposed rule change is available on the Exchange's
website at http://nasdaqbx.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 Exchange operates on the ``taker-maker'' model, whereby it
generally pays credits to members that take liquidity and charges fees
to members that provide liquidity. Currently, the Exchange has a
schedule, at Equity 7, Section 118(a), which consists of several
different credits that it provides for orders in securities priced at
$1 or more per share that access liquidity on the Exchange and several
different charges that it assesses for orders in such securities that
add liquidity on the Exchange. It also has a program, at Equity 7,
Section 118(f), to reward those of its members that make significant
contributions to the market.
Over the course of the last few months, the Exchange has
experimented with various reformulations of its pricing schedule with
the aim of increasing activity on the Exchange, improving market
quality, and increasing market share.\3\ Although these changes have
met with some success, the Exchange has yet to achieve the results it
desires. Accordingly, the Exchange proposes to again restate its
pricing schedule, in large part, in a further attempt to improve the
attractiveness of the market to new and existing participants.
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\3\ See Securities Exchange Act Release No. 34-87271 (October
10, 2019), 84 FR 55621 (October 17, 2019) (SR-BX-2019-035);
Securities Exchange Act Release No. 34-87093 (September 24, 2019),
84 FR 57530 (October 25, 2019) (SR-BX-2019-031); Securities Exchange
Act Release No. 34-86447 (July 24, 2019); 84 FR 36989 (July 30,
2019) (SR-BX-2019-026); Securities Exchange Act Release No. 34-85912
(May 22, 2019); 84 FR 24834 (May 29, 2019) (SR-BX-2019-013).
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Description of the Changes
Credits for Accessing Liquidity Through the Exchange
The Exchange proposes to eliminate its schedule of existing credits
(except as described below) and replace it with a new schedule of
credits for orders in securities that remove liquidity from the
Exchange (the ``New Credits''). Generally speaking, the proposed New
Credits will be higher than the existing credits for orders in Tape C
and lower than the existing credits for orders in securities in Tapes A
and B.\4\ The proposed New Credits for orders in securities in all
Tapes also will no longer be tied to threshold levels of liquidity
removal activity in securities in Tape C. The Exchange believes that
higher overall credits for orders in securities in Tape C will
incentivize members to increase their liquidity removal activity in
securities in Tape C. Meanwhile, eliminating the Tape C removal
activity requirement from the qualifying criteria for credits for
orders in securities in all Tapes will render those credits easier for
members to attain, even as the amounts of those credits decrease for
securities in Tapes A and B.
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\4\ Whereas the highest credit under the existing schedule (for
a member that adds liquidity equal to or exceeding an average daily
volume of 50,000 shares in a month) is $0.0031 per share executed
for orders in securities in Tapes A and B and the lowest credit is
$0.0018 per share executed, the top such credit in the proposed
schedule will be $0.0029 per share executed and the lowest credit
will be $0.0015 per share executed. And whereas the highest credit
under the existing schedule (for a member that adds liquidity equal
to or exceeding an average daily volume of 50,000 shares in a month)
is $0.0017 per share executed for orders in securities in Tape C and
the lowest credit is $0.0005 per share executed, the top such credit
in the proposed schedule will be $0.0028 per share executed and the
lowest will be $0.0014 per share executed.
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Specifically, the Exchange proposes to adopt the following New
Credits:
A $0.0029 per share executed credit for orders in
securities in Tapes A and B and a $0.0028 per share executed credit for
orders in securities in Tape C that access liquidity (excluding orders
with Midpoint pegging and excluding orders that receive price
improvement and execute against an order with a
[[Page 70240]]
Non-displayed price) entered by a member: (i) Whose combined liquidity
removing and adding activities equal to or exceed 0.225% of total
Consolidated Volume during a month; and (ii) adds liquidity equal to or
exceeding an average daily volume of 50,000 shares in a month.
A $0.0026 per share executed credit for orders in
securities in Tapes A and B and a $0.0025 per share executed credit for
orders in securities in Tape C that access liquidity (excluding orders
with Midpoint pegging and excluding orders that receive price
improvement and execute against an order with a Non-displayed price)
entered by a member that: (i) Accesses liquidity equal to or exceeding
0.08% of total Consolidated Volume during a month; and (ii) adds
liquidity equal to or exceeding an average daily volume of 50,000
shares in a month.
A $0.0021 per share executed credit for orders in
securities in Tapes A and B and a $0.0020 per share executed credit for
orders in securities in Tape C that access liquidity (excluding orders
with Midpoint pegging and excluding orders that receive price
improvement and execute against an order with a Non-displayed price)
entered by a member that: (i) Accesses liquidity equal to or exceeding
0.05% of total Consolidated Volume during a month; and (ii) adds
liquidity equal to or exceeding an average daily volume of 50,000
shares in a month.
A $0.0015 per share executed credit for orders in
securities in Tapes A and B and a $0.0014 per share executed credit for
orders in securities in Tape C that access liquidity (excluding orders
with Midpoint pegging and excluding orders that receive price
improvement and execute against an order with a Non-displayed price)
entered by a member that adds liquidity equal to or exceeding an
average daily volume of 50,000 shares in a month.
As noted above, the proposed New Credits will not supplant all of
the existing provisions. Instead, the Exchange proposes that the
following existing provisions will continue to apply to orders in
securities in all Tapes:
$0.0000 per share executed for an order that receives
price improvement and executes against an order with a Non-displayed
price; and
$0.0000 per share executed for an order with Midpoint
pegging that removes liquidity.
The Exchange also proposes to continue charging a fee for orders in
securities in any Tape (excluding an order with midpoint pegging and
excluding an order that receives price improvement and executes against
an order with a non-displayed price) that removes liquidity from the
Exchange and that is entered by a member that does not add at least an
average daily volume of 50,000 shares to the Exchange during a month.
However, the Exchange proposes to increase that fee for orders in
securities in all Tapes from $0.0005 to $0.0007 per share executed.
Charges for Adding Liquidity to the Exchange
In addition to the above, the Exchange proposes to replace its
existing schedule of charges for adding displayed liquidity to the
Exchange (the ``New Charges''). Generally speaking, the range of the
proposed New Charges will be lower than the existing charges for orders
in Tapes A and B and higher for orders in Tape C.\5\ The proposed New
Charges for displayed orders in securities in Tapes A and B also will
no longer be tied to threshold levels of liquidity adding activity in
securities in Tape B and the proposed New Charges for displayed orders
in securities in Tape C will no longer be tied to threshold levels of
liquidity adding activity in securities in Tape C. The Exchange
believes that lower overall charges for orders in securities in Tapes A
and B will incentivize members to increase their liquidity adding
activity in securities in Tapes A and B. Higher charges for orders that
add liquidity in Tape C will help to offset the costs of providing
higher credits to members with orders in securities in Tape C that
remove liquidity from the Exchange.
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\5\ Whereas under the existing pricing schedule, the Exchange
charges between $0.0025 and $0.0029 per share executed for displayed
orders in securities in Tapes A and B, and between $0.0012 and
$0.0017 per share executed for displayed orders in securities in
Tape C, that add liquidity to the Exchange equal to or exceeding
certain volume thresholds each month, the proposed schedule will
charge fees for such displayed orders in securities in all three
Tapes ranging from $0.0024 to $0.0028 per share executed.
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Specifically, the Exchange proposes to delete all of the existing
charges for providing liquidity in displayed orders through the
Exchange (except as provided below) and replace them with the following
New Charges:
A $0.0024 per share executed charge for displayed orders
entered by a member that adds liquidity equal to or exceeding 0.25% of
total Consolidated Volume during a month.
A $0.0026 per share executed charge for displayed orders
entered by a member that adds liquidity equal to or exceeding 0.15% of
total Consolidated Volume during a month.
A $0.0028 per share executed charge for displayed orders
entered by a member that adds liquidity equal to or exceeding 0.07% of
total Consolidated Volume during a month.
Although the Exchange will continue to charge $0.0030 per
share executed for all other orders in securities in Tapes A and B, it
will increase its charge for all other orders in securities in Tape C
from $0.0020 to $0.0030 per share executed.
The Exchange proposes that following existing charges will continue
to apply to orders in securities in all Tapes:
A $0.0005 per share executed charge for orders with
Midpoint pegging entered by a member that adds 0.02% of total
Consolidated Volume of non-displayed liquidity excluding a buy (sell)
order that receives an execution price that is lower (higher) than the
midpoint of the NBBO.
A $0.0015 per share executed charge for orders with
Midpoint pegging entered by other member excluding a buy (sell) order
that receives an execution price that is lower (higher) than the
midpoint of the NBBO.
A $0.0030 per share executed charge for a buy (sell) order
with Midpoint pegging entered by a member that receives an execution
price that is lower (higher) than the midpoint of the NBBO.
A $0.0028 per share executed charge for non-displayed
orders (other than orders with Midpoint pegging) entered by a member
that adds liquidity equal to or exceeding 0.25% total Consolidated
Volume during a month.
A $0.0030 per share executed charge for all other non-
displayed orders.
Charges for entering BSTG, BSCN, BMOP, BTFY, BCRT, BDRK,
BCST, and SCAR orders that execute in a venue other than the Nasdaq BX
Equities System.
Changes to Qualified Market Maker Program
The Exchange presently has a Qualified Market Maker (``QMM'')
program, at Equity 7, Section 118(f), which rewards members that make
significant contributions to market quality by providing liquidity at
the national best bid and offer (``NBBO'') in a large number of
securities for a significant portion of the day. In particular, the
existing QMM program provides a member with a reduced transaction fee
of $0.0016 per share executed for all of its displayed orders in
securities priced at $1 or more if the member: (i) Quotes at the NBBO
at least 25% of the time during market hours in an average of at least
400 securities per day during a month; and (ii) provides
[[Page 70241]]
add volume during a month of at least 0.125% of total Consolidated
Volume.
The Exchange now proposes to replace the existing QMM program with
one that will provide QMMs with two tiers of discounts off of their
regular fees for displayed orders priced at $1 or more that add
liquidity to the Exchange. The amount of the new discounts will vary
depending upon the number of securities in which the QMM quotes at the
NBBO and the extent to which the QMM adds liquidity as a percentage of
total Consolidated Volume. First, if a QMM quotes at the NBBO at least
25% of the time during market hours in an average of at least 400
securities per day, and if it provides add volume of at least 0.07% of
total Consolidated Volume during a month, then the QMM will be entitled
to receive a discount of $0.0001 per share executed. Second, if a QMM
quotes at the NBBO at least 25% of the time during market hours in an
average of at least 750 securities per day, and if it provides add
volume of at least 0.15% of total Consolidated Volume during a month,
then the QMM will be entitled to receive a discount of $0.0002 per
share executed. These discounts will not be cumulative. The Exchange
intends for its new QMM program to provide greater incentives to
members to increase their contributions to market quality.
Applicability to and Impact on Participants
The proposed rule change is a broad restatement of the Exchange's
schedule of credits and charges. The Exchange has designed the restated
schedule to specifically increase liquidity removal activity on the
Exchange for orders in securities in Tape C, to increase liquidity
adding activity in Tapes A and B, and to thereby improve the overall
quality and attractiveness of the Nasdaq BX market. The Exchange
intends to accomplish this objective by providing overall higher
credits to those participants that engage in large volumes of liquidity
removal activity on the Exchange in securities in Tape C and by
charging lower overall fees to those participants that add liquidity to
the Exchange in securities in Tapes A and B. The Exchange also intends
to provide greater incentives to members to act as QMMs and to
contribute significantly to the improvement of the market.
Those participants that act as net removers of liquidity from the
Exchange in securities in Tape C will benefit directly from the
proposed rule change through the receipts of higher credits. Those
participants that act as net adders of liquidity to the Exchange in
securities in Tapes A and B will also benefit from lower charges and
indirectly from any improvement in the overall quality of the market.
However, net liquidity adders in securities in Tape C and net removers
of liquidity in securities in Tapes A and B will bear the costs of
these proposals. The Exchange notes that its proposal is not otherwise
targeted at or expected to be limited in its applicability to a
specific segment(s) of market participants nor will it apply
differently to different types of market participants.
Members will not be impacted directly by the replacement of the
existing QMM program because no member currently qualifies for that
program.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\6\ in general, and furthers the objectives of Sections
6(b)(4) and 6(b)(5) of the Act,\7\ 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. The proposal is also consistent with
Section 11A of the Act relating to the establishment of the national
market system for securities.
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\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(4) and (5).
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The Proposal is Reasonable
The Exchange's proposed change to its schedule of credits and
charges is reasonable in several respects. As a threshold matter, the
Exchange is subject to significant competitive forces in the market for
equity securities transaction services that constrain its pricing
determinations in that market. The fact that this market is competitive
has long been recognized by the courts. In NetCoalition v. Securities
and Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .'' \8\
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\8\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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The Commission and the courts have repeatedly expressed their
preference for competition over regulatory intervention in determining
prices, products, and services in the securities markets. In Regulation
NMS, while adopting a series of steps to improve the current market
model, the Commission highlighted the importance of market forces in
determining prices and SRO revenues and, also, recognized that current
regulation of the market system ``has been remarkably successful in
promoting market competition in its broader forms that are most
important to investors and listed companies.'' \9\
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\9\ Securities Exchange Act Release No. 51808 (June 9, 2005), 70
FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting
Release'').
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Numerous indicia demonstrate the competitive nature of this market.
For example, clear substitutes to the Exchange exist in the market for
equity security transaction services. The Exchange is only one of
several equity venues to which market participants may direct their
order flow, and it represents a small percentage of the overall market.
It is also only one of several taker-maker exchanges. Competing equity
exchanges offer similar tiered pricing structures to that of the
Exchange, including schedules of rebates and fees that apply based upon
members achieving certain volume thresholds.\10\
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\10\ CBOE EDGA provides a standard rebate for liquidity removers
of $0.00180 per share executed (or between $0.0022 and $0.0028 per
share executed if a member qualifies for a volume tier), and a
standard charge of $0.0030 per share executed for liquidity adders
(or between $0.0022 and $0.0026 if a member qualifies for a volume
tier). NYSE National has a standard charge of $0.0005 per share
executed for liquidity removers ($0.0025 and $0.0030 rebate if a
member qualifies for a volume tier) and a standard charge of $0.0028
per share executed for liquidity adders (and a range of charges from
$0.0020-$0.0026 if a member qualifies for a volume tier).
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Within this environment, market participants can freely and often
do shift their order flow among the Exchange and competing venues in
response to changes in their respective pricing schedules.\11\
Separately, the Exchange has provided the SEC staff with multiple
examples of instances where
[[Page 70242]]
pricing changes by BX and other exchanges have resulted in shifts in
exchange market share. Within the foregoing context, the proposal
represents a reasonable attempt by the Exchange to increase its
liquidity and market share relative to its competitors.
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\11\ The Exchange perceives no regulatory, structural, or cost
impediments to market participants shifting order flow away from it.
In particular, the Exchange notes that these examples of shifts in
liquidity and market share, along with many others, have occurred
within the context of market participants' existing duties of Best
Execution and obligations under the Order Protection Rule under
Regulation NMS.
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The Exchange has designed its proposed schedule of credits and
charges to provide increased overall incentives to members to increase
their liquidity removal and adding activity on the Exchange. An
increase in liquidity removal and adding activity on the Exchange will,
in turn, improve the quality of the Nasdaq BX market and increase its
attractiveness to existing and prospective participants. Generally, the
proposed New Credits and Charges will be comparable to, if not
favorable to, those that its competitors provide.\12\
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\12\ See n. 10, supra.
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Moreover, the Exchange believes that it is reasonable to bolster
its QMM program as a means of incentivizing members to act as QMMs and
to increase their contributions to the improvement of the quality of
the Nasdaq BX Exchange.
The Exchange notes that those participants that are dissatisfied
with the New Charges or New Credits are free to shift their order flow
to competing venues that offer them lower charges or higher credits.
The Proposal is an Equitable Allocation of Credits and Charges
The Exchange believes its proposal will allocate its New Credits
and New Charges fairly among its market participants. It is equitable
for the Exchange to increase its credits to participants whose orders
remove liquidity from the Exchange as a means of incentivizing
increased liquidity removal activity. Likewise, it is equitable for the
Exchange to reduce charges to participants whose orders add liquidity
to the Exchange as a means of incentivizing liquidity adding activity.
An increase in overall liquidity removal and addition activity on the
Exchange will improve the quality of the Nasdaq BX market and increase
its attractiveness to existing and prospective participants.
Likewise, it is equitable for the Exchange to specifically increase
credits for orders that remove liquidity from the Exchange in Tape C as
a means of increasing liquidity removal activity in that Tape, and to
specifically lower overall charges for orders that add liquidity to the
Exchange in Tapes A and B as a means of increasing liquidity adding
activity in Tapes A and B. Again, the Exchange intends for these
changes to improve the overall quality and attractiveness of the Nasdaq
BX market.
For similar reasons, the Exchange believes that it is equitable to
increase the discounts it offers to members that qualify as QMMs if
such members, in turn, increase the extent of their market improving
behavior by quoting at the NBBO for a larger number of securities than
is required now and by adding a higher percentage of total Consolidated
Volume.
Although under the proposal, certain market participants will pay
higher charges or attain lower credits than they do now, those
participants will also benefit from any improvements in the quality and
attractiveness of the market that the New Credits and New Charges and
amended QMM program will provide. Moreover, any participant that wishes
to avoid paying higher charges or receiving lower credits is free to
shift their order flow to competing venues that provide more favorable
pricing.
The Proposed Fee is not Unfairly Discriminatory
The Exchange believes that the proposal is not unfairly
discriminatory. As an initial matter, the Exchange believes that
nothing about its volume-based tiered pricing model is inherently
unfair; instead, it is a rational pricing model that is well-
established and ubiquitous in today's economy among firms in various
industries--from co-branded credit cards to grocery stores to cellular
telephone data plans--that use it to reward the loyalty of their best
customers that provide high levels of business activity and incent
other customers to increase the extent of their business activity. It
is also a pricing model that the Exchange and its competitors have long
employed with the assent of the Commission. It is fair because it
incentivizes customer activity that increases liquidity, enhances price
discovery, and improves the overall quality of the equity markets.
The Exchange intends for its proposal to improve market quality for
all members on the Exchange and by extension attract more liquidity to
the market, improving market wide quality and price discovery. Although
net removers of liquidity in Tape C and net adders of liquidity in
Tapes A and B will benefit most from the proposal, this result is fair
insofar as increased activity in securities in these Tapes will help to
improve market quality and the attractiveness of the Nasdaq BX market
to all existing and prospective participants. And although certain
participants will bear the costs of the proposed rule change through
higher charges or lower credits, this too is fair because these
participants will also benefit from improvements in market quality.
Moreover, any participant that does not wish to pay higher charges or
receive lower credits is free to shift its order flow to a competing
venue.
Finally, the Exchange believes that its proposed amendments to its
QMM program are not unfairly discriminatory because the new program
will be available to any member that chooses to meet its requirements.
The Exchange notes that none of its members will be affected directly
by the proposed amendments insofar as no member currently qualifies as
a QMM under the existing program.
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.
Intramarket Competition
The Exchange does not believe that its proposal will place any
category of Exchange participant at a competitive disadvantage. As
noted above, all members of the Exchange will benefit from any increase
in market activity that the proposal effectuates. Members may grow or
modify their businesses so that they can receive the higher credits or
pay lower charges. Moreover, members are free to trade on other venues
to the extent they believe that the fees assessed and credits provided
are not attractive. As one can observe by looking at any market share
chart, price competition between exchanges is fierce, with liquidity
and market share moving freely between exchanges in reaction to fee and
credit changes. The Exchange notes that the tier structure is
consistent with broker-dealer fee practices as well as the other
industries, as described above.
Intermarket Competition
Addressing whether the proposed fee could impose a burden on
competition on other SROs that is not necessary or appropriate, the
Exchange believes that its proposed modifications to its schedule of
credits and charges will not impose a burden on competition because the
Exchange's execution services are completely voluntary and subject to
extensive competition both from the other 12 live exchanges and from
off-exchange venues, which include 32 alternative trading systems. The
Exchange notes that it operates in a highly competitive market in which
market participants can readily favor competing venues if they deem fee
[[Page 70243]]
levels at a particular venue to be excessive, or rebate opportunities
available at other venues to be more favorable. In such an environment,
the Exchange must continually adjust its fees to remain competitive
with other exchanges and with alternative trading systems that have
been exempted from compliance with the statutory standards applicable
to exchanges. Because competitors are free to modify their own fees in
response, and because market participants may readily adjust their
order routing practices, the Exchange believes that the degree to which
fee changes in this market may impose any burden on competition is
extremely limited.
The proposed restated schedule of credits and charges is reflective
of this competition because, as a threshold issue, the Exchange is a
relatively small market so its ability to burden intermarket
competition is limited. In this regard, even the largest U.S. equities
exchange by volume has less than 20% market share, which in most
markets could hardly be categorized as having enough market power to
burden competition. Moreover, as noted above, price competition between
exchanges is fierce, with liquidity and market share moving freely
between exchanges in reaction to fee and credit changes. This is in
addition to free flow of order flow to and among off-exchange venues
which comprised more than 37% of industry volume for the month of July
2019.
The Exchange intends for the proposed changes to its schedule of
fees and credits, in the aggregate, to increase member incentives to
engage in the removal and addition of liquidity on the Exchange.
Similarly, the Exchange intends for its proposal to amend its QMM
Program to increase incentives for members to improve the market by
quoting at the NBBO meaningfully in a large number of securities and by
adding a significant amount of liquidity. These changes are
procompetitive and reflective of the Exchange's efforts to make it an
attractive and vibrant venue to market participants.
In sum, if the changes proposed herein are unattractive to market
participants, it is likely that the Exchange will lose market share as
a result. Accordingly, the Exchange does not believe that the proposed
changes will impair the ability of members or competing order execution
venues to maintain their competitive standing in the financial markets.
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.\13\
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\13\ 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-BX-2019-045 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-2019-045. 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-BX-2019-045 and should be submitted on
or before January 10, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2019-27456 Filed 12-19-19; 8:45 am]
BILLING CODE 8011-01-P