Notice2022-27380
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Address an Erroneous Reference in Equity 4, Rule 4780(e)
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
December 19, 2022
Issuing agencies
Securities and Exchange Commission
Full Text
<html>
<head>
<title>Federal Register, Volume 87 Issue 242 (Monday, December 19, 2022)</title>
</head>
<body><pre>
[Federal Register Volume 87, Number 242 (Monday, December 19, 2022)]
[Notices]
[Pages 77649-77651]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-27380]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-96486; File No. SR-BX-2022-025]
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Address an
Erroneous Reference in Equity 4, Rule 4780(e)
December 13, 2022.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
[[Page 77650]]
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 1, 2022, 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 and II below, which
Items have been prepared by the Exchange. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to address an erroneous reference in Equity
4, Rule 4780(e).
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/bx/rules">https://listingcenter.nasdaq.com/rulebook/bx/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 this filing is to correct an erroneous reference in
Equity 4, Rule 4780(e) involving the dissemination process of the
Retail Liquidity Identifier as part of the Exchange's Retail Price
Improvement Program (``RPI Program''). Under the RPI Program, all
Retail Price Improvement Orders (``RPI Orders'') provide liquidity at a
price at least $0.001 better than the National Best Bid and Offer
(``NBBO'') through a special execution process.\3\ Currently, unless a
Participant opts out of identifying their RPI Interest, the Exchange
disseminates the Retail Liquidity Identifier when RPI interest is
present on the Exchange.
---------------------------------------------------------------------------
\3\ Equity 4, Rule 4702(b)(5)(A) states that, ``A ``Retail Price
Improving Order'' or ``RPI Order'' is an Order Type with a Non-
Display Order Attribute that is held on the Exchange Book in order
to provide liquidity at a price at least $0.001 better than the NBBO
through a special execution process described in Rule 4780. A Retail
Price Improving Order may be entered in price increments of $0.001.
RPI Orders collectively may be referred to as ``RPI Interest.''
---------------------------------------------------------------------------
Equity 4, Rule 4780(e) states that the Retail Liquidity Identifier
will be disseminated when RPI interest is priced at least $0.001 per
share better than the ``Exchange's'' Protected Bid or Protected Offer.
However, this language is erroneous. In intent and practice, the
Exchange disseminates the Retail Liquidity when RPI interest is priced
at least $0.001 better than the NBBO. The Exchange's intent in this
regard is evident in Equity 4, Rule 4702(b)(5)(A), which describes an
RPI Order as being priced better than the NBBO. Moreover, measuring
retail price improvement with reference to the NBBO, rather than to the
Exchange's Best Bid or Offer, ensures that the RPI Program will alert
participants to real price improvement opportunities that exist on
Nasdaq [sic], i.e., prices that are better than the NBBO, rather than
prices better than the Exchange's Best Bid or Offer, but not better
than the NBBO.
The Exchange proposes to correct this erroneous reference in Equity
4, Rule 4780(e). The correction is necessary to ensure that the
provision is consistent with the circumstances in which the Exchange
intends to and actually disseminates the Retail Liquidity Identifier.
It will also ensure that the Retail Liquidity Identifier will alert
participants to genuine retail price improvement opportunities on the
Nasdaq Book [sic], as discussed above.
The Exchange noticed the error in the language and promptly sought
to correct the inconsistency. The Exchange notes that it has not
received any complaints or notices from Exchange Members expressing
confusion or alerting the Exchange to the error.
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 section
6(b)(5) of the Act,\5\ in particular, in that it is designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general to protect investors and the public interest.
The proposal would correct an error that otherwise renders inaccurate
an example of the application of Equity 4, Rule 4780(e). The Exchange
believes that it is consistent with the interest of the public,
investors, and the market for the Exchange to take steps to ensure that
its Rulebook is accurate.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 proposed rule change is
non-substantive and it will have no impact on competition because it
simply corrects an error in the Rule text to render the text more
accurate.
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \6\ and Rule 19b-4(f)(6) thereunder.\7\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(A)(iii).
\7\ 17 CFR 240.19b-4(f)(6).
\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the
[[Page 77651]]
Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately. The Exchange requests
this waiver so that it can correct an error in its rulebook as soon as
possible to avoid any potential confusion regarding the operation of
the Retail Liquidity Identifier. The Commission believes that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest so that the Exchange's rulebook
accurately represents the operation of the Retail Liquidity Identifier
without undue delay. For this reason, the Commission hereby waives the
30-day operative delay and designates the proposal operative upon
filing.\12\
---------------------------------------------------------------------------
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change 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#0173746d642c626e6c6c646f7572417264622f666e77"><span class="__cf_email__" data-cfemail="4133342d246c222e2c2c242f3532013224226f262e37">[email protected]</span></a>. Please include
File Number SR-BX-2022-025 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-BX-2022-025. 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 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 offices 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-2022-025, and should be submitted on
or before January 9, 2023.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12), (59).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2022-27380 Filed 12-16-22; 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 December 19, 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.