Notice2022-02183

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Equity 7, Section 114 and Section 118 of the Fee Schedule

Primary source

Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.

Published
February 3, 2022

Issuing agencies

Securities and Exchange Commission

Full Text

<html>
<head>
<title>Federal Register, Volume 87 Issue 23 (Thursday, February 3, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 23 (Thursday, February 3, 2022)]
[Notices]
[Pages 6218-6223]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-02183]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94097; File No. SR-NASDAQ-2022-011]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Equity 7, Section 114 and Section 118 of the Fee Schedule

January 28, 2022.
    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 January 27, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.

---------------------------------------------------------------------------

[[Page 6219]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Exchange's pricing schedule at 
Equity 7, Section 114 and Section 118, as described further below.
    The text of the proposed rule change is available on the Exchange's 
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rules">https://listingcenter.nasdaq.com/rulebook/nasdaq/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
    The purpose of the proposed rule change is to amend the Exchange's 
schedule of credits, at Equity 7, Section 114 and Section 118(a). 
Specifically, the Exchange proposes to (1) amend the Exchange's Tier 1 
rebate to Qualified Market Maker (``QMM'') at Equity 7, Section 114(e); 
(2) amend a supplemental credit in Tapes A, B and C for displayed 
quotes/orders (other than Supplemental Orders or Designated Retail 
Orders); (3) amend certain supplemental credits for displayed quotes/
orders (other than Supplemental Orders) in Tapes A, B and C and (4) 
allow members to receive the higher rebate when the member's non-
Designated Retail Order rebate is greater than its Designated Retail 
Order rebate.
Changes to Section 114
    The Exchange proposes to amend its pricing schedule, at Equity 7, 
Section 114(e), to make a change to its Qualified Market Maker 
(``QMM'') Program. The QMM Program provides supplemental incentives to 
member organizations that meet certain quality standards in acting as 
market makers for securities on the Exchange.
    Specifically, the Exchange proposes to adjust the threshold to also 
allow a QMM to qualify for the Tier 1 incentive if the QMM executes 
shares of liquidity provided in all securities through one or more of 
its Nasdaq Market Center MPIDs that represent 70 million shares of 
average daily volume during the month (inclusive of volume and 
Consolidated Volume \3\ that consists of securities priced less than 
$1). Therefore, the amended Tier 1 incentive would provide a $0.0001 
supplemental credit if a QMM executes shares of liquidity provided in 
all securities through one or more of its Nasdaq Market Center MPIDs 
that represent above 0.70% up to, and including, 0.90% of Consolidated 
Volume or 70 million shares of average daily volume during the month 
(inclusive of volume and Consolidated Volume that consists of 
securities priced less than $1). The Exchange intends for the 
additional threshold to provide greater incentives to members during 
times when the market is trading at a higher than usual daily 
volume.\4\
---------------------------------------------------------------------------

    \3\ Pursuant to Equity 7, Section 114(h), the term 
``Consolidated Volume'' shares the meaning of that term set forth in 
Equity 7, Section 118(a). (For purposes of calculating a member's 
qualifications for Tiers 1 and 2 of the QMM Program credits set 
forth in paragraph (e) of this Section, the Exchange will calculate 
a member's volume and total Consolidated Volume twice. First, the 
Exchange will calculate a member's volume and total Consolidated 
Volume inclusive of volume that consists of executions in securities 
priced less than $1. Second, the Exchange will calculate a member's 
volume and total Consolidated Volume exclusive of volume that 
consists of executions in securities priced less than $1, while also 
applying distinct qualifying volume thresholds to each Tier, as set 
forth above in paragraph (e). The Exchange will then assess which of 
these two calculations would qualify the member for the most 
advantageous credits for the month and then it will apply those 
credits to the member.)
    \4\ The proposal provides a third alternative for members to 
qualify for the Tier 1 rebate.
---------------------------------------------------------------------------

Changes to Section 118
    The Exchange currently provides a $0.0001 per share supplemental 
credit to members for displayed quotes/orders that provide liquidity 
(other than Supplemental Orders or Designated Retail Orders) where the 
members, through one or more of its Nasdaq Market Center MPIDs, (i) 
increases its shares of liquidity provided in all securities by at 
least 30% as a percentage of Consolidated Volume \5\ during the month 
relative to the month of October 2021 and (ii) has shares of liquidity 
provided of least 15 million ADV during the month. The Exchange now 
proposes to amend the threshold to allow a member to qualify if the 
member increases its shares of liquidity provided in all securities by 
at least 30% relative to the month of October 2021 or November 2021. 
The Exchange hopes that it will incentivize members to increase their 
liquidity providing activity on the Exchange by giving members the 
option of an additional month of Consolidated Volume to measure their 
liquidity against, which the Exchange hopes will improve market 
quality.
---------------------------------------------------------------------------

    \5\ Pursuant to Equity 7, Section 118(a), the term 
``Consolidated Volume'' shall mean the total consolidated volume 
reported to all consolidated transaction reporting plans by all 
exchanges and trade reporting facilities during a month in equity 
securities, excluding executed orders with a size of less than one 
round lot. For purposes of calculating Consolidated Volume and the 
extent of a member's trading activity the date of the annual 
reconstitution of the Russell Investments Indexes shall be excluded 
from both total Consolidated Volume and the member's trading 
activity. For the purposes of calculating the extent of a member's 
trading activity during the month on Nasdaq and determining the 
charges and credits applicable to such member's activity, all M-ELO 
Orders that a member executes on Nasdaq during the month will count 
as liquidity-adding activity on Nasdaq.
---------------------------------------------------------------------------

    Additionally, the Exchange proposes to amend in two respects, its 
schedule of credits, which it provides to members for displayed quotes/
orders that provide liquidity. First, the Exchange is proposing to 
remove the $0.0001 per share executed and the $0.00015 per share 
executed supplemental credits in Tapes A, B and C that are provided to 
members for displayed quotes/orders (other than Supplemental Orders) 
that provide liquidity. Second, the Exchange is proposing to add these 
two supplemental credits to the current credits in Tapes A, B and C 
that are provided to members for displayed quotes/orders (other than 
Supplemental Orders or Designated Retail Orders) that provide 
liquidity.
    Specifically, one of the two supplemental credits is a $0.0001 per 
share executed credit provided when a member, through one or more of 
its Nasdaq Market Center MPIDs, either: (i) Increases the extent of its 
ADV of MELO Orders and/or midpoint orders (that execute against MELO 
Orders) in all securities by an ADV of 1 million shares or more during 
the month relative to the month of June 2021; or (ii) executes a 
combined volume of at least 3 million shares ADV through midpoint 
orders provided and MELO Orders during the month and increases the 
extent of its ADV of midpoint orders provided and MELO Orders in all 
securities by 100% or more during the month relative to the month of 
June 2021. The other supplemental credit is a $0.00015 per share 
executed credit provided when a member, through one or more of its 
Nasdaq Market Center MPIDs, either: (i) Increases the extent of its ADV 
of MELO Orders and/or midpoint orders (that execute against MELO 
Orders) in all securities by an ADV of 2 million shares

[[Page 6220]]

or more during the month relative to the month of June 2021; or (ii) 
executes a combined volume of at least 4 million shares ADV through 
midpoint orders provided and MELO Orders during the month and increases 
the extent of its ADV of midpoint orders provided and MELO Orders in 
all securities by 150% or more during the month relative to the month 
of June 2021. These two credits may not be combined with each other.
    Although the Exchange did not exclude retail orders when it 
proposed these two supplemental credits in Tapes A, B and C,\6\ the 
Exchange did not intend to include Designated Retail Orders in the 
payment of these supplemental credits. Currently, Designated Retail 
Orders receive their own separate credits on the Exchange's fee 
schedule and those orders generally receive higher rebates. The 
Exchange does not commonly provide additional rebates to Designated 
Retail Orders and therefore, is proposing to update its fee schedule to 
accurately reflect the manner in which it will pay these supplemental 
credits going forward.\7\
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 92433 (July 6, 2021), 86 
FR 38772 (July 22, 2021).
    \7\ Since the $0.0001 per share executed and the $0.00015 per 
share executed credits were established in July 2021, the Exchange 
has not been applying the credit to Designated Retail Orders when 
calculating a firm's credits. Therefore, the Exchange is working to 
retroactively provide credits to firms that would have received 
credits if their Designated Retail Orders were not excluded. Under 
the proposal, there will be three ways for firm [sic].
---------------------------------------------------------------------------

    Lastly, the Exchange is proposing to allow a member to receive the 
higher rebate for its Designated Retail Orders if the member's total 
rebate for non-Designated Retail Orders (including any supplemental 
credits provided in Section 114 and Section 118, except the NBBO 
Program credit provided in Section 114(g)) is greater than its rebate 
for Designated Retail Orders (including supplemental credits provided 
in Section 114 and Section 118). For example, a member that provides 
liquidity for Designated Retail Orders could qualify for a credit of 
$0.00325 per share executed. However, if the member provides liquidity 
for displayed quotes/orders (other than Supplemental Orders or 
Designated Retail Orders), the member could qualify for a credit of 
$0.00305 per share executed and could also qualify for an additional 
$0.0002 per share executed through the QMM Program, as well as an 
additional supplemental credit of $0.0001 per share executed, making 
the member's total possible credit for displayed non-Designated Retail 
Orders $0.00335 per share. In this case, the member would also receive 
a credit of $0.00335 per share for its Designated Retail Orders. The 
Exchange is excluding the NBBO Program when calculating a member's 
highest rebate because the NBBO Program only applies to displayed 
orders in securities priced at $1 or more per share that provide 
liquidity, establish the national best bid or best offer (``NBBO''), 
and display a quantity of at least one round lot at the time of 
execution. Consistent with the proposed rule, the NBBO Program 
explicitly excludes Designated Retail Orders.
    The Exchange is proposing this change to ensure that none of its 
members are disadvantaged and that all members can obtain the maximum 
possible rebate.
    The Exchange notes that those participants that are dissatisfied 
with this new proposal are free to shift their order flow to competing 
venues.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Sections 
6(b)(4) and 6(b)(5) of the Act,\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

The Proposal is Reasonable
    The Exchange's proposal 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'. . . .'' \10\
---------------------------------------------------------------------------

    \10\ 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)).
---------------------------------------------------------------------------

    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.'' \11\
---------------------------------------------------------------------------

    \11\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
---------------------------------------------------------------------------

    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. 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.
    The Exchange believes it is reasonable to amend the Tier 1 
threshold of its QMM Program to provide the option for a QMM to qualify 
if the QMM executes shares of liquidity provided that represent 70 
million shares of average daily volume during the month (inclusive of 
volume that consists of securities priced less than $1). The Exchange 
also believes that the additional threshold option of 70 million shares 
of average daily volume will provide an increased incentive to members 
during times when the market is trading at a higher than usual daily 
volume. An increase in liquidity adding activity on the Exchange will, 
in turn, improve the quality of the Nasdaq market and increase its 
attractiveness to existing and prospective participants.
    The Exchange notes that those participants that are dissatisfied 
with the new threshold option are free to shift their order flow to 
competing venues.
    Additionally, the Exchange believes that it is reasonable to 
include the option of an additional baseline month to measure whether a 
member increases its shares of liquidity provided in all

[[Page 6221]]

securities by at least 30%. The Exchange believes that the additional 
month will encourage members who had a lower baseline in November than 
October to increase their liquidity adding activity on the Exchange to 
receive the credit, which will improve the overall market quality to 
the benefit of all market participants.
    The Exchange's fee schedule is intended to reflect the Exchange's 
current assessment of its fees and credits. The Exchange does not 
currently pay Designated Retail Orders the $0.0001 and $0.00015 
supplemental credits discussed above. As discussed above, Designated 
Retail Orders receive their own separate credits on the Exchange's fee 
schedule and those orders generally receive higher rebates. The 
Exchange does not commonly provide additional rebates to Designated 
Retail Orders. Therefore, the Exchange believes it is reasonable to 
amend its supplemental credits on Tapes A, B and C to accurately 
reflect that Designated Retail Orders are excluded from the Exchange's 
payment of these two supplemental credits.
    Lastly, the Exchange believes that it is reasonable to provide a 
member's Designated Retail Orders with the highest rebate that a member 
qualifies for because the Exchange is always seeking ways to attract 
more retail order flow. Therefore, if a member's rebate for non-
Designated Retail Orders (including any supplemental credits provided 
in Section 114 and Section 118, except the NBBO Program credit provided 
in Section 114(g)) is greater than its rebate for Designated Retail 
Orders (including supplemental credits provided in Section 114 and 
Section 118), the Exchange is proposing to provide the member with the 
higher rebate for its Designated Retail Orders. Additionally, the 
Exchange believes that it is reasonable to exclude the NBBO Program 
when calculating a member's highest rebate because, as discussed above, 
the NBBO Program only applies to displayed orders in securities priced 
at $1 or more per share that provide liquidity, establish the national 
best bid or best offer (``NBBO''), and display a quantity of at least 
one round lot at the time of execution. Consistent with the proposed 
rule, the NBBO Program explicitly excludes Designated Retail Orders. 
The Exchange is proposing this change to ensure that none of its 
members are disadvantaged and that all members can obtain the maximum 
possible rebate.
    The Exchange notes that those market participants that are 
dissatisfied with the proposals are free to shift their order flow to 
competing venues that offer more generous pricing or less stringent 
qualifying criteria.
The Proposal Is an Equitable Allocation of Credits
    The Exchange believes its proposal will allocate its charges and 
credits fairly among its market participants.
    The Exchange believes that it is an equitable allocation to 
establish an additional threshold for its QMM Program's Tier 1 
supplemental credit and to include the option of an additional baseline 
month to measure whether a member qualifies for the $0.0001 per share 
executed supplemental credit for displayed quotes/orders (other than 
Supplemental Orders or Designated Retail Orders) that provide 
liquidity. The proposals will encourage members to increase the extent 
to which they add liquidity to the Exchange. To the extent that the 
Exchange succeeds in increasing the levels of liquidity and activity on 
the Exchange, then the Exchange will experience improvements in its 
market quality, which stands to benefit all market participants.
    The Exchange also believes that it is equitable to amend the 
$0.0001 per share executed and the $0.00015 per share executed 
supplemental credits for displayed quotes/orders (other than 
Supplemental Orders) by applying the credits to members for displayed 
quotes/orders [sic], which accurately reflect the most current 
application of these two supplemental credits. The Exchange believes 
that it is equitable to exclude Designated Retail Orders from these 
supplemental credits because Designated Retail Orders receive their own 
separate credits on the Exchange's fee schedule and those orders 
generally receive higher rebates. The Exchange does not commonly 
provide additional rebates to Designated Retail Orders.
    Lastly, the Exchange also believes it is equitable to allow a 
member to receive the higher credit if the member's total credits for 
non-Designated Retail Orders (including any supplemental credits 
provided in Section 114 and Section 118, except the NBBO Program credit 
provided in Section 114(g)) is greater than its credit for Designated 
Retail Orders (including supplemental credits provided in Section 114 
and Section 118) in order to encourage firms to continue to provide 
retail order flow even if the firms expect to receive a higher rebate 
from their non-Designated Retail Orders. Moreover, the Exchange also 
believes it is equitable to exclude the NBBO Program from the 
calculation to ensure that the Exchange does not inadvertently 
disadvantage any member and that all members are treated equitably by 
obtaining the maximum rebate possible. Moreover, the Exchange believes 
that it is equitable to exclude the NBBO Program from this proposal as 
it remains consistent with the current rules of the program. 
Additionally, the Exchange expects any impact from this exclusion to be 
de minimis because Designated Retail Orders do not frequently set the 
NBBO.
    Any participant that is dissatisfied with the proposal is free to 
shift their order flow to competing venues that provide more generous 
pricing or less stringent qualifying criteria.
The Proposal is Not Unfairly Discriminatory
    The Exchange believes that its 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 
enhances price discovery and improves the overall quality of the equity 
markets.
    The Exchange also believes that its proposal to add an additional 
threshold for its QMM Program's Tier 1 supplemental credit is not 
unfairly discriminatory because the additional qualifications will be 
available to all members. Similarly, the Exchange believes that it is 
not unfairly discriminatory to include the option of an additional 
baseline month to measure whether a member qualifies for the $0.0001 
per share executed supplemental credit for displayed quotes/orders 
(other than Supplemental Orders or Designated Retail Orders) that 
provide liquidity because the additional qualifications will be 
available to all members.
    Additionally, the Exchange believes that it is not unfairly 
discriminatory to amend its fee schedule to align with the way the 
Exchange pays its supplemental credits. Moreover, all non-retail market 
participants will continue to be entitled to the credits and the 
amendment will provide market participants with clarity on how certain 
supplemental credits are paid. Additionally, Designated Retail Orders 
receive their own separate

[[Page 6222]]

credits on the Exchange's fee schedule and those orders generally 
receive higher rebates.
    Lastly, the Exchange believes that its proposals to provide a 
member with the higher rebate for its Designated Retail Orders if the 
member's rebate for non-Designated Retail Orders (including any 
supplemental credits provided in Section 114 and Section 118, except 
the NBBO Program credit provided in Section 114(g)) is greater than its 
credit for Designated Retail Orders (including supplemental credits 
provided in Section 114 and Section 118) is not unfairly discriminatory 
because the higher rebate option will be available to all members. 
Moreover, providing members with the higher rebate will ensure that 
firms are not disincentivized from increasing their retail order flow 
due to the higher rebate they may receive from their non-Designated 
Retail Orders. Additionally, exclusion of the NBBO Program credit from 
the calculation of the higher rebate is also not discriminatory because 
the exclusion will also apply to all members.
    Overall, the proposals stand to improve the overall market quality 
of the Exchange, to the benefit of all market participants, by 
incentivizing members to increase the extent of their liquidity 
provision or activity on the Exchange. Any participant that is 
dissatisfied with the proposal is free to shift their order flow to 
competing venues that provide more generous pricing or less stringent 
qualifying criteria.

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, the Exchange's proposals are intended to have 
market-improving effects, to the benefit of all members. The Exchange 
notes that its members are free to trade on other venues to the extent 
they believe that these proposals 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.
Intermarket Competition
    In terms of inter-market competition, the Exchange notes that it 
operates in a highly competitive market in which market participants 
can readily favor competing venues if they deem fee 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 credits and 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 credits and 
fees in response, and because market participants may readily adjust 
their order routing practices, the Exchange believes that the degree to 
which credit or fee changes in this market may impose any burden on 
competition is extremely limited.
    The additional proposed thresholds for the Exchange's QMM Program's 
Tier 1 supplemental credit and the $0.0001 per share executed 
supplemental credit for displayed quotes/orders (other than 
Supplemental Orders or Designated Retail Orders), as well as the 
allowance for members to receive the better of their Designated Retail 
Order credit or its non-Designated Retail Order credit, is reflective 
of this competition. Moreover, aligning the Exchange's fee schedule 
with the Exchange's application of its rebates does not burden 
competition. Any participant that is dissatisfied with the proposals is 
free to shift their order flow to competing venues that provide more 
generous pricing or less stringent qualifying criteria.
    Even as one of the largest U.S. equities exchanges by volume, the 
Exchange 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 comprises upwards of 50% of industry volume.
    In sum, if the change proposed herein is 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 
change 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

    Pursuant to Section 19(b)(3)(A)(ii) of the Act,\12\ the Exchange 
has designated this proposal as establishing or changing a due, fee, or 
other charge imposed by the self-regulatory organization on any person, 
whether or not the person is a member of the self-regulatory 
organization, which renders the proposed rule change effective upon 
filing.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
---------------------------------------------------------------------------

    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

    <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#3a484f565f17595557575f544e497a495f59145d554c"><span class="__cf_email__" data-cfemail="1163647d743c727e7c7c747f6562516274723f767e67">[email&#160;protected]</span></a>. Please include 
File Number SR-NASDAQ-2022-011 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-NASDAQ-2022-011. 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

[[Page 6223]]

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 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-2022-011 and should be submitted 
on or before February 24, 2022.
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-02183 Filed 2-2-22; 8:45 am]
BILLING CODE 8011-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>
Indexed from Federal Register on February 3, 2022.

This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.