Notice2021-27428
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend MRX's Pricing Schedule at Options 7, Section 1, General Provisions
Primary source
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Published
December 20, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 86 Issue 241 (Monday, December 20, 2021)</title>
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[Federal Register Volume 86, Number 241 (Monday, December 20, 2021)]
[Notices]
[Pages 71978-71980]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-27428]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93779; File No. SR-MRX-2021-12]
Self-Regulatory Organizations; Nasdaq MRX, LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Amend MRX's
Pricing Schedule at Options 7, Section 1, General Provisions
December 14, 2021.
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 1, 2021, Nasdaq MRX, LLC (``MRX'' 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 MRX's Pricing Schedule at Options 7,
Section 1, General Provisions.
While the changes proposed herein are effective upon filing, the
Exchange has designated the amendments become operative on December 1,
2021.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/mrx/rules">https://listingcenter.nasdaq.com/rulebook/mrx/rules</a>, 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
MRX proposes to amend its Pricing Schedule at Options 7, Section 1,
General Provisions. Specifically, MRX proposes to amend the way an
Exchange Member indicates its participation in the Affiliated Entity
Program. Specifically, the Exchange proposes to amend the description
of ``Affiliated Entity'' within Options 7, Section 1, General
Provisions. Currently, the term ``Affiliated Entity'' is described as,
a relationship between an Appointed Market Maker and an Appointed
OFP for purposes of qualifying for certain pricing specified in the
Pricing Schedule. Market Makers and OFPs are required to send an
email to the Exchange to appoint their counterpart, at least 3
business days prior to the last day of the month to qualify for the
next month. The Exchange will acknowledge receipt of the emails and
specify the date the Affiliated Entity is eligible for applicable
pricing, as specified in the Pricing Schedule. Each Affiliated
Entity relationship will commence on the 1st of a month and may not
be terminated prior to the end of any month. An Affiliated Entity
relationship will terminate after a one (1) year period, unless
either party terminates earlier in writing by sending an email to
the Exchange at least 3 business days prior to the last day of the
month to terminate for the next month. Affiliated Entity
relationships must be renewed annually by each party sending an
email to the Exchange. Affiliated Members may not qualify as a
counterparty comprising an Affiliated Entity. Each Member may
qualify for only one (1) Affiliated Entity relationship at any given
time.
Today, Members are required to annually renew their Affiliate
Entity relationship at the end of one year if they desire to continue
the relationship. The parties must both send an email to the Exchange
to avoid termination of the relationship, provided the relationship was
not terminated earlier in the year. The Exchange believes that this
process is burdensome for Members that desire to remain in the program.
The consequence of not renewing is termination. The Exchange desires to
remove the administrative burden associated with the requirement to
annually renew and instead provide that the Affiliated Entity
relationship will automatically renew each month, unless otherwise
terminated. The proposed new rule text would provide,
An ``Affiliated Entity'' is a relationship between an Appointed
Market Maker and an Appointed OFP for purposes of qualifying for
certain pricing specified in the Pricing Schedule. Market Makers and
OFPs are required to send an email to the Exchange to appoint their
counterpart, at least 3 business days prior to the last day of the
month to qualify for the next month. The Exchange will acknowledge
receipt of the emails and specify the date the Affiliated Entity is
eligible for applicable pricing, as specified in the Pricing
Schedule. Each Affiliated Entity relationship will commence on the
1st of a month and may not be terminated prior to the end of any
month. An Affiliated Entity relationship will automatically renew
each month until or unless either party terminates earlier in
writing by sending an email to the Exchange at least 3 business days
prior to the last day of the month to terminate for the next month.
Affiliated Members may not qualify as a counterparty comprising an
Affiliated Entity. Each Member may qualify for only one (1)
Affiliated Entity relationship at any given time.
As is the case today, parties to the Affiliated Entity relationship
may decide to terminate the relationship during any month by sending an
email to the Exchange at least 3 business days prior to the last day of
the month to terminate for the next month. Cboe Exchange, Inc.
(``Cboe'') has a similar automatic renewal process for its Appointed
OFP and Appointed Market-Maker Program.\3\ The Exchange believes
[[Page 71979]]
that this amendment will streamline the workflow for Members by not
requiring Members to renew each year to continue the affiliated
relationship.
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\3\ See Cboe's Fees Schedule at footnote 23 ``A Market-Maker may
designate an Order Flow Provider (``OFP'') as its ``Appointed OFP''
and an OFP may designate a Market-Maker to be its ``Appointed
Market-Maker'' for purposes of qualifying for credits under AVP. In
order to effectuate the appointment, the parties would need to
submit the Appointed Affiliate Form to the Exchange by 3:00 p.m. CST
on the first business day of the month in order to be eligible to
qualify for credits under AVP for that month. The Exchange will
recognize only one such designation for each party once every
calendar month, which designation will automatically renew each
month until or unless the Exchange receives an email from either
party indicating that the appointment has been terminated. A Market-
Maker that has both an Affiliate OFP and Appointed OFP will only
qualify based upon the volume of its Appointed OFP. The volume of an
OFP that has both an Affiliate Market-Maker and Appointed Market-
Maker will only count towards qualifying the Appointed Market-Maker.
Volume executed in open outcry is not eligible to receive a credit
under AVP.''
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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 Sections
6(b)(4) and 6(b)(5) of the Act,\5\ 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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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4) and (5).
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The Exchange's proposal to amend the way Exchange Members indicate
their participation in the Affiliated Entity Program is reasonable.
Today, Members are required to annually renew their Affiliated Entity
relationship at the end of one year if they desire to continue the
relationship. The parties must both send an email to the Exchange to
avoid termination of the relationship, provided the relationship was
not terminated earlier in the year. The Exchange believes that this
process is burdensome for Members that desire to remain in the program.
The consequence of not renewing is termination of their participation
in the program. The Exchange desires to remove the administrative
burden associated with the requirement to annually renew and instead
provide that the Affiliated Entity relationship will automatically
renew each month, unless otherwise terminated. As is the case today,
parties to the Affiliated Entity relationship may decide to terminate
the relationship during any month by sending an email to the Exchange
at least 3 business days prior to the last day of the month to
terminate for the next month. Also, Cboe has a similar automatic
renewal process for its Appointed OFP and Appointed Market-Maker
Program.\6\ The Exchange believes that this amendment will streamline
the workflow for Members by not requiring Members to renew each year to
continue the affiliated relationship.
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\6\ See Cboe's Fees Schedule at footnote 23 ``A Market-Maker may
designate an Order Flow Provider (``OFP'') as its ``Appointed OFP''
and an OFP may designate a Market-Maker to be its ``Appointed
Market-Maker'' for purposes of qualifying for credits under AVP. In
order to effectuate the appointment, the parties would need to
submit the Appointed Affiliate Form to the Exchange by 3:00 p.m. CST
on the first business day of the month in order to be eligible to
qualify for credits under AVP for that month. The Exchange will
recognize only one such designation for each party once every
calendar month, which designation will automatically renew each
month until or unless the Exchange receives an email from either
party indicating that the appointment has been terminated. A Market-
Maker that has both an Affiliate OFP and Appointed OFP will only
qualify based upon the volume of its Appointed OFP. The volume of an
OFP that has both an Affiliate Market-Maker and Appointed Market-
Maker will only count towards qualifying the Appointed Market-Maker.
Volume executed in open outcry is not eligible to receive a credit
under AVP.''
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The Exchange's proposal to amend the way Exchange Member indicate
their participation in the Affiliated Entity Program is equitable and
not unfairly discriminatory. Today, any Member may participate in the
Affiliated Entity Program. The proposed changes would impact all
Members that voluntarily elect to participate in the Affiliated Entity
Program in a uniform manner.
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.
Inter-Market Competition
The proposal does not impose an undue burden on inter-market
competition. Cboe has a similar automatic renewal process for its
Appointed OFP and Appointed Market-Maker Program \7\ as proposed herein
for the Affiliated Entity Program.
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\7\ Id.
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Intra-Market Competition
The Exchange's proposal to amend the way Exchange Members indicate
their participation in the Affiliated Entity Program does not impose an
undue burden on competition. Today, any Member may participate in an
Affiliated Entity relationship. The proposed changes would impact all
Members that voluntarily elect to participate in the Affiliated Entity
Program in a uniform manner.
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.\8\ 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.
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\8\ 15 U.S.C. 78s(b)(3)(A)(ii).
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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
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#4f3d3a232a622c2022222a213b3c0f3c2a2c61282039"><span class="__cf_email__" data-cfemail="d3a1a6bfb6feb0bcbebeb6bda7a093a0b6b0fdb4bca5">[email protected]</span></a>. Please include
File Number SR-MRX-2021-12 on the subject line.
Paper Comments
<bullet> 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-MRX-2021-12. 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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 71980]]
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-MRX-2021-12 and should be
submitted on or before January 10, 2022.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-27428 Filed 12-17-21; 8:45 am]
BILLING CODE 8011-01-P
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