[Federal Register Volume 78, Number 76 (Friday, April 19, 2013)]
[Notices]
[Pages 23628-23629]
[FR Doc No: 2013-09232]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

Agency Information Collection Activities; Requests for Comments;
Clearance of Renewed Approval of Information Collection: Bird/Other
Wildlife Strike Report

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice and request for comments.

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

SUMMARY: In accordance with the Paperwork Reduction Act of 1995, FAA
invites public comments about our intention to request the Office of
Management and Budget (OMB) approval to renew an information
collection. Wildlife strike data are collected to develop standards and
monitor hazards to aviation.

DATES: Written comments should be submitted by June 18, 2013.

FOR FURTHER INFORMATION CONTACT: Kathy DePaepe at<PHONE_NUMBER>, or by
email at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    OMB Control Number: 2120-0045.
    Title: Bird/Other Wildlife Strike Report.
    Form Numbers: FAA Form 5200-7.
    Type of Review: Renewal of an information collection.
    Background: 14 CFR 139.337--Wildlife Hazard Management requires
that wildlife strike data is collected to develop standards and monitor
hazards to aviation. Data identify wildlife strike control requirements
and provide in

service data on aircraft component failure. The FAA form 5200-7, Bird/
Other Wildlife Strike Report, is most often completed by the pilot-in-
charge of an aircraft involved in a wildlife collision or by Air
Traffic Control Tower personnel, or other airline or airport personnel
who have knowledge of the incident.
    Respondents: Approximately 7,666 pilots, air traffic control
personnel, or other airline or airport personnel.
    Frequency: Information is collected as needed.
    Estimated Average Burden per Response: 5 minutes.
    Estimated Total Annual Burden: 613 hours.

ADDRESSES: Send comments to the FAA at the following address: Ms. Kathy
DePaepe, Room 126B, Federal Aviation Administration, AES-200, 6500 S.
MacArthur Blvd., Oklahoma City, OK 73169.
    Public Comments Invited: You are asked to comment on any aspect of
this information collection, including (a) Whether the proposed
collection of information is necessary for FAA's performance; (b) the
accuracy of the estimated burden; (c) ways for FAA to enhance the
quality, utility and clarity of the information collection; and (d)
ways that the burden could be minimized without reducing the quality of
the collected information. The agency will summarize and/or include
your comments in the request for OMB's clearance of this information
collection.

    Issued in Washington, DC on April 15, 2013.
Albert R. Spence,
FAA Assistant Information Collection Clearance Officer, IT Enterprises
Business Services Division, AES-200.
[FR Doc. 2013-09232 Filed 4-18-13; 8:45 am]
BILLING CODE 4910-13-P


[Federal Register Volume 82, Number 216 (Thursday, November 9, 2017)]
[Notices]
[Pages 52075-52079]
[FR Doc No: 2017-24371]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82013; File No. SR-NASDAQ-2017-074]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Amendment No. 2 and Order Instituting Proceedings
To Determine Whether To Approve or Disapprove a Proposed Rule Change,
as Modified by Amendment Nos. 1 and 2, To Adopt the Midpoint Extended
Life Order

November 3, 2017.

I. Introduction

    On July 21, 2017, the NASDAQ Stock Market LLC (``Exchange'' or
``Nasdaq'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to adopt the Midpoint Extended Life Order
(``MELO''). The proposed rule change was published for comment in the
Federal Register on August 9, 2017.\3\ On August 9, 2017, the Exchange
filed Amendment No. 1 to the proposed rule change.\4\ On September 21,
2017, pursuant to Section 19(b)(2) of the Act,\5\ the Commission
designated a longer period within which to approve the proposed rule
change, disapprove the proposed rule change, or institute proceedings
to determine whether to approve or disapprove the proposed rule
change.\6\ The Commission has received three comment letters on the
proposal.\7\ On October 30, 2017, the Exchange filed Amendment No. 2 to
the proposed rule change.\8\ The Commission is publishing this notice
and order to solicit comments on the proposed rule change, as modified
by Amendment Nos. 1 and 2, from interested persons and to institute
proceedings pursuant to Section 19(b)(2)(B) of the Act \9\ to determine
whether to approve or disapprove the proposed rule change, as modified
by Amendment Nos. 1 and 2.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 81311 (August 3,
2017), 82 FR 37248 (``Notice'').
    \4\ In Amendment No. 1, the Exchange updated the proposal to
reflect the approval of the proposal by the Exchange's Board of
Directors on July 21, 2017. Amendment No. 1 is available at https://www.sec.gov/comments/sr-nasdaq-2017-074/nasdaq2017074.htm. Because
Amendment No. 1 is a technical amendment that does not alter the
substance of the proposed rule change, it is not subject to notice
and comment.
    \5\ 15 U.S.C. 78s(b)(2).
    \6\ See Securities Exchange Act Release No. 81668, 82 FR 45095
(September 27, 2017). The Commission designated November 7, 2017 as
the date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to approve or disapprove,
the proposed rule change.
    \7\ See Letters to Brent J. Fields, Secretary, Commission, from
Stephen John Berger, Managing Director, Government & Regulatory
Policy, Citadel Securities, dated August 30, 2017 (``Citadel
Letter''); Ray Ross, Chief Technology Officer, The Clearpool Group,
dated September 12, 2017 (``Clearpool Letter''); and Joanna Mallers,
Secretary, FIA Principal Traders Group, dated September 19, 2017
(``FIA PTG Letter'').
    \8\ In Amendment No. 2, the Exchange: (1) Modified the proposal
to prevent MELOs from trading when better-priced non-displayed
orders rest on the Nasdaq book; (2) provided additional description,
clarification, and rationale for certain aspects of the proposal;
and (3) responded to several concerns raised by commenters on the
proposal. Amendment No. 2 is available at https://www.sec.gov/comments/sr-nasdaq-2017-074/nasdaq2017074.htm.
    \9\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposed to offer the MELO order type. A MELO would be
a non-displayed order priced at the midpoint between the National Best
Bid and Offer (``NBBO'') and would not be eligible to execute until a
minimum period of one half of a second (``Holding Period'') has passed
after acceptance of the order by the system.\10\ Once eligible to
trade, MELOs would be ranked in time priority at the NBBO midpoint
among other MELOs.\11\ If a limit price is assigned to a MELO, the
order would be: (1) Eligible for execution in time priority if upon
acceptance of the order by the system, the midpoint price is within the
limit set by the participant; or (2) held until the midpoint falls
within the limit set by the participant, at which time the Holding
Period would commence and thereafter the system would make the order
eligible for execution in time priority.\12\
---------------------------------------------------------------------------

    \10\ See proposed Nasdaq Rule 4702(b)(14)(A).
    \11\ See id.
    \12\ See id.
---------------------------------------------------------------------------

    If a MELO is modified by a member (other than to decrease the size
of the order or to modify the marking of a sell order as long, short,
or short exempt) during the Holding Period, the system would restart
the Holding Period.\13\ Similarly, if a MELO is modified by a member
(other than to decrease the size of the order or to modify the marking
of a sell order as long, short, or short exempt) after it has become
eligible to execute, the order would have to satisfy a new Holding
Period.\14\
---------------------------------------------------------------------------

    \13\ See id. The Exchange noted that any change to a MELO that
would result in a change in the order's timestamp would result in
the MELO being considered altered, and thus the order would be
subject to a new Holding Period before being eligible to trade and
its priority would be based on the new timestamp. See Amendment No.
2 at n.16.
    \14\ See proposed Nasdaq Rule 4702(b)(14)(A).
---------------------------------------------------------------------------

    Movements in the NBBO while a MELO is in the Holding Period would
not reset the Holding Period, even if, as a result of the NBBO move,
the MELO's limit price is less aggressive than the NBBO midpoint.\15\
Also, if a MELO has met the Holding Period, but the NBBO midpoint is no
longer within its limit, it would nonetheless be ranked in time
priority among other MELOs if the NBBO later moves such that the
midpoint is within the order's limit price (i.e., no new Holding
Period).\16\
---------------------------------------------------------------------------

    \15\ See Amendment No. 2 at n.11.
    \16\ See proposed Nasdaq Rule 4702(b)(14)(A); Amendment No. 2 at
n.15.
---------------------------------------------------------------------------

    MELOs may be entered via any of the Exchange's communications
protocols and the type of communications protocol used would not affect
how the system handles MELOs.\17\ If there is no NBB or NBO, the
Exchange would accept MELOs but would not allow MELO executions until
there is an

NBBO.\18\ MELOs would be eligible to trade if the NBBO is locked.\19\
If the NBBO is crossed, MELOs would be held by the system until such
time that the NBBO is no longer crossed, at which time they would be
eligible to trade.\20\ MELOs may be cancelled at any time, including
during the Holding Period.\21\
---------------------------------------------------------------------------

    \17\ See Amendment No. 2 at n.10.
    \18\ See id. at 12. If there is no NBB or NBO upon entry of a
MELO, the system would hold the order in time priority, together
with any other MELOs received while there is no NBB or NBO. See id.
Once there is an NBBO, the Holding Period would begin for the held
MELOs based on time priority. See id.
    \19\ See id. at 12-13.
    \20\ See id. at 13.
    \21\ See proposed Nasdaq Rule 4702(b)(14)(A).
---------------------------------------------------------------------------

    MELOs would be active only during Market Hours.\22\ MELOs entered
during Pre-Market Hours would be held by the system in time priority
until Market Hours.\23\ MELOs entered during Post-Market Hours would
not be accepted by the system, and MELOs remaining unexecuted after
4:00 p.m. ET would be cancelled by the system.\24\ MELOs would not be
eligible for the Nasdaq opening, halt, and closing crosses.\25\
---------------------------------------------------------------------------

    \22\ See proposed Nasdaq Rule 4702(b)(14)(B). Market Hours begin
after the completion of the Nasdaq Opening Cross (or at 9:30 a.m. ET
in the case of a security for which no Nasdaq Opening Cross occurs).
See Nasdaq Rule 4703(a).
    \23\ See proposed Nasdaq Rule 4702(b)(14)(B). ``Pre-Market
Hours'' means the period of time beginning at 4:00 a.m. ET and
ending immediately prior to the commencement of Market Hours. See
Nasdaq Rule 4701(g). A MELO entered during Pre-Market Hours would be
held by the system until the completion of the Opening Cross (or
9:30 a.m. ET if no Opening Cross occurs), ranked in the time that it
was received by the Nasdaq book upon satisfaction of the Holding
Period. See Amendment No. 2 at 11-12.
    \24\ See proposed Nasdaq Rule 4702(b)(14)(B). ``Post-Market
Hours'' means the period of time beginning immediately after the end
of Market Hours and ending at 8:00 p.m. ET. See Nasdaq Rule 4701(g).
    \25\ See proposed Nasdaq Rule 4703(l); Amendment No. 2 at 12.
MELOs in existence at the time a halt is initiated would be
ineligible to execute and held by the system until trading has
resumed and the NBBO has been received by Nasdaq. See proposed
Nasdaq Rule 4702(b)(14)(A).
---------------------------------------------------------------------------

    MELOs must be entered with a size of at least one round lot, and
any shares of a MELO remaining after an execution that are less than
one round lot would be cancelled.\26\ MELOs may have a minimum quantity
order attribute.\27\ MELOs may not be designated with a time-in-force
of immediate or cancel (``IOC'') and are ineligible for routing.\28\
They also may not have the discretion, reserve size, attribution,
intermarket sweep order, display, or trade now order attributes.\29\
---------------------------------------------------------------------------

    \26\ See proposed Nasdaq Rule 4702(b)(14)(B).
    \27\ See id.
    \28\ See id.; see also Amendment No. 2 at 11 and 13.
    \29\ See Amendment No. 2 at 13-14.
---------------------------------------------------------------------------

    Once a MELO becomes eligible to execute by existing unchanged for
the Holding Period, the MELO may only execute against other eligible
MELOs.\30\ MELOs would not execute if there is a resting non-displayed
order priced more aggressively than the NBBO midpoint, and they instead
would be held until the resting non-displayed order is no longer on the
Nasdaq book or the NBBO midpoint matches the price of the resting non-
displayed order.\31\ MELO executions would be reported to Securities
Information Processors and provided to Nasdaq's proprietary data feeds
without any new or special indication.\32\
---------------------------------------------------------------------------

    \30\ See proposed Nasdaq Rule 4702(b)(14)(A).
    \31\ See id; see also Amendment No. 2 at 9.
    \32\ See Amendment No. 2 at 15.
---------------------------------------------------------------------------

    As proposed, MELOs would be subject to real-time surveillance to
determine if the order type is being abused by market participants.\33\
In addition, the Exchange intends to implement a process, at the same
time as the implementation of MELOs, to monitor the use of MELOs with
the intent to apply additional measures, as necessary, to ensure their
usage is appropriately tied to the intent of the order type.\34\ The
Exchange stated that this process may include metrics tied to
participant behavior, such as the percentage of MELOs that are
cancelled prior to the completion of the Holding Period, the average
duration of MELOs, and the percentage of MELOs where the NBBO midpoint
is within the limit price when received.\35\ The Exchange stated that
it is committed to determining whether there is opportunity or
prevalence of behavior that is inconsistent with normal risk management
behavior.\36\ According to the Exchange, manipulative abuse is subject
to potential disciplinary action under the Exchange's rules, and other
behavior that is not necessarily manipulative but nonetheless
frustrates the purposes of the MELO order type may be subject to
penalties or other participant requirements to discourage such
behavior, should it occur.\37\
---------------------------------------------------------------------------

    \33\ See id. at 22.
    \34\ See id.
    \35\ See id.
    \36\ See id. at 22-23.
    \37\ See id. at 23.
---------------------------------------------------------------------------

    The Exchange stated that it plans to implement MELO within thirty
days after Commission approval of the proposal.\38\ The Exchange would
make MELOs available to all members and to all securities upon
implementation, and would announce the implementation date by Equity
Trader Alert.\39\
---------------------------------------------------------------------------

    \38\ See id. at 16.
    \39\ See id.
---------------------------------------------------------------------------

III. Summary of Comments and the Exchange's Response

    The Commission received one comment letter that expressed support
for the proposal \40\ and two comment letters that expressed concerns
about the proposal.\41\
---------------------------------------------------------------------------

    \40\ See Clearpool Letter.
    \41\ See Citadel Letter and FIA PTG Letter.
---------------------------------------------------------------------------

    One commenter stated its belief that MELOs could provide a valuable
tool for investors, and particularly institutional investors, seeking
to execute in large size.\42\ This commenter also stated its belief
that MELOs have the potential to attract longer-term market
participants to Nasdaq, and would provide an additional method to allow
investors to effectively implement their investment strategies on an
exchange.\43\ The commenter observed that, because MELOs would be on an
exchange, they would be available to all Exchange participants, which
the commenter asserted is a fairer and more transparent way for markets
to operate as compared to off-exchange trading venues.\44\
---------------------------------------------------------------------------

    \42\ See Clearpool Letter at 1-3.
    \43\ See id. at 2.
    \44\ See id.
---------------------------------------------------------------------------

    Two commenters expressed concern with the degree of order
segmentation presented by the proposal.\45\ They expressed the view
that MELOs would create a separate order book within the Nasdaq
matching system where only MELOs could interact with each other.\46\
One of these commenters stated that the proposal represents an
unprecedented level of exchange-based order flow segmentation.\47\ This
commenter acknowledged the existence of limited exchange-based
mechanisms that have the effect of restricting some order flow
interaction, but contended that the proposal goes significantly beyond
any such existing restrictions.\48\ This commenter noted that the use
of MELOs would result in two orders failing to interact even if they
are of the same size and have prices that cross each other, and
suggested that the Commission consider carefully whether this is
consistent with the definition and purpose of an exchange.\49\
---------------------------------------------------------------------------

    \45\ See Citadel Letter at 1-3; FIA PTG Letter at 2. One of
these commenters also expressed the concern that the costs of
approving the MELO order type would far outweigh the potential
benefits. See FIA PTG Letter at 2. This commenter asserted that
artificially introducing latency negatively impacts the price
discovery and formation functions of the exchange. See id. This
commenter also expressed broad concerns about complexity in today's
equity market structure, which are outside the scope of the
Exchange's proposal. See id.
    \46\ See Citadel Letter at 1-3; FIA PTG Letter at 2.
    \47\ See Citadel Letter at 1.
    \48\ See id. at 3.
    \49\ See id.

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

    In addition, one commenter remarked that market participants with
marketable held orders or resting orders seeking to execute against
marketable held order flow would be unlikely to utilize MELOs because
marketable held orders are typically required to be executed fully and
promptly.\50\ According to the commenter, as use of the ``MELO order
book'' increases, liquidity in the ``legacy Nasdaq order book'' could
be negatively impacted to the detriment of retail investors.\51\
Moreover, the commenter stated that investors submitting resting MELOs
would not be able to interact with marketable held order flow.\52\ The
commenter suggested that the Exchange could partially mitigate the
negative impacts of MELO order segmentation by revising its proposal to
allow any order to immediately interact with a resting MELO as long as
it is priced beyond the midpoint.\53\
---------------------------------------------------------------------------

    \50\ See id. at 1-2.
    \51\ See id. at 2.
    \52\ See id.
    \53\ See id.
---------------------------------------------------------------------------

    In contrast, one commenter stated that allowing MELOs to interact
with non-MELOs would defeat the purpose of the MELO order type.\54\
This commenter also stated that it does not believe that the proposal
would negatively impact liquidity or price discovery on the Nasdaq
market because the MELO order type should have little to no detrimental
effect on participants using other order types.\55\ According to this
commenter, to the extent that the MELO order type would provide
incentives for order flow to be directed to a fair access exchange and
away from private market centers, price discovery for the broader
markets might improve.\56\
---------------------------------------------------------------------------

    \54\ See Clearpool Letter at 3.
    \55\ See id.
    \56\ See id.
---------------------------------------------------------------------------

    In Amendment No. 2, the Exchange stated that although MELOs may
forgo the opportunity to interact with other liquidity on the Exchange,
users of MELOs accepted this possibility in return for the ability to
interact with other market participants with the same time horizon.\57\
The Exchange also stated its belief that it is not unfair or
discriminatory that non-displayed orders resting on Nasdaq that are
priced more aggressively than the NBBO midpoint would not participate
in MELO executions.\58\ According to the Exchange, the use of resting
non-displayed orders and MELOs would be available to all participants,
and participants would simply need to evaluate which order type best
serves their investment needs.\59\ Moreover, the Exchange stated that
it has conducted a pro forma study of the effect of applying MELOs to
the current market: It reviewed all executions occurring on Nasdaq in
August 2017 and found that only 0.37% of resting non-displayed orders
traded at a price better than the prevailing midpoint at the time of
execution.\60\ According to the Exchange, consequently, the number of
situations in which a participant would have to consider the trade-offs
between posting a non-displayed buy (sell) order at a higher (lower)
price as compared to submitting a MELO is minimal.\61\ In addition, the
Exchange reiterated that all members may use MELOs and thus have access
to MELO liquidity.\62\ Finally, in Amendment No. 2, the Exchange
amended the proposal to provide that MELOs would not execute if there
is a resting non-displayed order priced more aggressively than the NBBO
midpoint; instead, MELOs would be held until the resting non-displayed
order is no longer on the Nasdaq book or the NBBO midpoint matches the
price of the resting non-displayed order.\63\
---------------------------------------------------------------------------

    \57\ See Amendment No. 2 at 19. The Exchange also compared MELOs
to the minimum quantity order attribute, as well as the retail price
improvement orders available on Nasdaq BX, Inc. See id. The Exchange
stated that both of these types of orders provide the opportunity to
interact with orders meeting certain characteristics, and
consequently may miss the opportunity to receive an execution if the
contra-side order does not meet the specified characteristics. See
id. In addition, the Exchange compared its proposal to the Nasdaq
Crossing Network, which created a series of intra-day crosses at the
NBBO midpoint. See id. at 20. The Exchange stated that Nasdaq
Crossing Network eligible orders were not available for execution
against orders resting on the Nasdaq book. See id. at 20-21.
    \58\ See id. at 20.
    \59\ See id.
    \60\ See id. at 21.
    \61\ See id.
    \62\ See id.
    \63\ See proposed Nasdaq Rule 4702(b)(14)(A).
---------------------------------------------------------------------------

    One commenter raised the concern that, under the proposal, MELO
executions would be reported to the Securities Information Processors
and provided on Nasdaq's proprietary data feed in the same manner as
all other transactions on Nasdaq.\64\ This commenter stated that this
approach likely would raise concerns about market fairness and
introduce significant complexity for investors, broker-dealers, and
regulators when attempting to analyze market activity and assess
execution quality.\65\ This commenter noted, by way of example, that
investors may see their orders executed on Nasdaq at worse prices than
other contemporaneous executions on Nasdaq and that, without Nasdaq
labeling MELO executions as such, investors may not know why this has
occurred.\66\ This commenter also asserted that, without labeling MELO
executions differently than other executions on Nasdaq, broker-dealer
routing logic may be influenced by liquidity that is not actually
accessible, and regulators may experience difficulties in accurately
filtering market data when evaluating compliance with regulatory
requirements such as best execution.\67\ This commenter urged the
Commission to require that executions resulting from MELOs be marked as
such on the tape.\68\ Alternatively, the commenter suggested that
Nasdaq offer the MELO order type on a separate exchange.\69\
---------------------------------------------------------------------------

    \64\ See Citadel Letter at 3.
    \65\ See id.
    \66\ See id.
    \67\ See id.
    \68\ See id.
    \69\ See id.
---------------------------------------------------------------------------

    By contrast, one commenter stated that it does not believe that the
lack of specific identification of MELOs in trade reports would result
in any difficulties for the markets, or complexity for investors or
other market participants when assessing execution quality.\70\
According to this commenter, users of the MELO order type would be
provided with anonymity and confidentiality, which the commenter
asserted are critical tools in preventing potentially predatory
counterparties from determining intention and using that information to
generate short-term profits at the expense of longer-term
investors.\71\ In addition, this commenter stated that Nasdaq and all
other exchanges currently offer many order types that when executed do
not provide specific indicators showing exactly which order types were
used, and professed not to see how allowing an exchange to add another
order type without such trade reporting disclosure would harm market
participants' ability to measure market quality, as they do not
currently have that ability.\72\
---------------------------------------------------------------------------

    \70\ See Clearpool Letter at 2.
    \71\ See id.
    \72\ See id.
---------------------------------------------------------------------------

    In Amendment No. 2, the Exchange stated that it currently does not
identify on data feeds in real time the order types and attributes that
resulted in an execution (e.g., reserve order attribute).\73\ According
to the Exchange, not identifying MELOs is important to ensure that
investors are protected from market participants that would

otherwise take advantage of such knowledge and undermine the usefulness
of the order type.\74\ In addition, the Exchange stated that, like any
of the order types or attributes provided by the Exchange, members must
assess which ones would provide them with the best execution in
achieving their investment goals.\75\
---------------------------------------------------------------------------

    \73\ See Amendment No. 2 at n.34. The Exchange also noted that
there is no real-time transparency regarding which destination or
broker matched a buyer and seller when transactions are reported to
a trade reporting facility. See id. at 25-26. Instead, there are
delayed reports that identify where the executions occurred. See id.
at 26.
    \74\ See id. at 25. According to the Exchange, MELO is designed
to increase access to, and participation on, Nasdaq for investors
that are less concerned with the time to execution, but rather are
looking to source liquidity, often in greater size, at the NBBO
midpoint against a counterparty order that has the same objectives.
See id. at 17. The Exchange noted that the proposal is designed to
help ensure that members with MELOs are not disadvantaged by other
order types entered by participants that have the benefit of
knowing, and reacting to, rapid changes in the market. See id. at 9.
    \75\ See id. at 25.
---------------------------------------------------------------------------

    Lastly, one commenter asserted that allowing MELOs to be cancelled
at any time during the Holding Period does not appear to be consistent
with the intended use of the order type.\76\ Instead, according to this
commenter, a MELO should only be permitted to be cancelled after the
Holding Period has expired and the order has been placed in the order
book.\77\ Another commenter, by contrast, did not have an issue with
providing market participants the ability to cancel MELOs during the
Holding Period.\78\ This commenter stated that it believes this would
be an important feature of the MELO order type because many firms use
algorithms to source liquidity simultaneously from multiple venues.\79\
According to the commenter, to the extent that liquidity is found
elsewhere than Nasdaq within the Holding Period, it would be critically
important that the firm be able to cancel its orders from Nasdaq and
re-allocate those shares to other venues.\80\ This commenter stated
that it does not believe any market participants would be gamed or
harmed in such a circumstance.\81\
---------------------------------------------------------------------------

    \76\ See Citadel Letter at 4.
    \77\ See id. This commenter also suggested that the Exchange
should clarify that MELOs cannot be designated IOC, see id., but the
Commission notes that that fact is already stated in the proposal,
see supra note 28 and accompanying text.
    \78\ See Clearpool Letter at 3.
    \79\ See id.
    \80\ See id.
    \81\ See id.
---------------------------------------------------------------------------

    In Amendment No. 2, the Exchange stated that MELOs may be cancelled
at any time, including during the Holding Period, in order to allow
members to effectively manage risk.\82\ The Exchange also acknowledged
that the potential exists for some participants to use MELOs in a way
that conflicts with the stated intention of the order type to allow
longer term investors the opportunity to safely find like-minded
counterparties at the midpoint on Nasdaq.\83\ For this reason, the
Exchange represented that MELOs would be subject to real-time
surveillance to determine if the order type is being abused by market
participants.\84\ The Exchange also stated that it plans to implement a
process, at the same time as the implementation of MELOs, to monitor
the use of MELOs, with the intent to apply additional measures, as
necessary, to ensure their usage is appropriately tied to the intent of
the order type.\85\ According to the Exchange, manipulative abuse is
subject to potential disciplinary action under the Exchange's rules,
and other behavior that is not necessarily manipulative but nonetheless
frustrates the purposes of the MELO order type may be subject to
penalties or other participant requirements to discourage such
behavior, should it occur.\86\
---------------------------------------------------------------------------

    \82\ See Amendment No. 2 at 8.
    \83\ See id. at 22.
    \84\ See id.
    \85\ See id. According to the Exchange, this process may include
metrics tied to participant behavior, such as the percentage of
MELOs cancelled prior to completion of the Holding Period, the
average duration of MELOs, and the percentage of MELOs where the
NBBO midpoint is within the limit price when received. See id.
    \86\ See id. at 23. The Exchange stated that punitive fees or
other prerequisite requirements tied to MELO usage would be
implemented by rule filing under Section 19(b) of the Act, should
the Exchange determine that they are necessary to maintain a fair
and orderly market. See id.
---------------------------------------------------------------------------

V. Proceedings To Determine Whether To Approve or Disapprove SR-NASDAQ-
2017-074, as Modified by Amendment Nos. 1 and 2, and Grounds for
Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \87\ to determine whether the proposed rule
change, as modified by Amendment Nos. 1 and 2, should be approved or
disapproved. Institution of proceedings is appropriate at this time in
view of the legal and policy issues raised by the proposal, as
discussed below. Institution of proceedings does not indicate that the
Commission has reached any conclusions with respect to any of the
issues involved. Rather, as described below, the Commission seeks and
encourages interested persons to provide additional comment on the
proposed rule change, as modified by Amendment Nos. 1 and 2.
---------------------------------------------------------------------------

    \87\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\88\ the Commission is
providing notice of the grounds for disapproval under consideration. As
discussed above, the Exchange has proposed to offer a new MELO order
type, which would be non-displayed, pegged to the NBBO midpoint, and
eligible for execution only after a half-second Holding Period has
completed following the acceptance of the MELO by the Exchange system
(although MELOs could be cancelled at any time, including during the
Holding Period). In addition, MELOs would be eligible to execute only
against other MELOs and would not be eligible to execute against any
other trading interest on the Nasdaq book, including resting contra-
side orders that are priced more aggressively than the NBBO midpoint.
---------------------------------------------------------------------------

    \88\ Id.
---------------------------------------------------------------------------

    The Commission is instituting proceedings to allow for additional
analysis of, and input from commenters with respect to, the consistency
of the proposal with Sections 6(b)(5) \89\ and 6(b)(8) \90\ of the Act.
Section 6(b)(5) of the Act requires that the rules of a national
securities exchange be designed, among other things, 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, and not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. Section 6(b)(8) of the Act requires that the rules
of a national securities exchange not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
---------------------------------------------------------------------------

    \89\ 15 U.S.C. 78f(b)(5).
    \90\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

V. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule
change, as modified by Amendment Nos. 1 and 2, is consistent with
Section 6(b)(5), 6(b)(8), or any other provision of the Act, or rules
and regulations thereunder. Although there does not appear to be any
issues relevant to approval or disapproval which would be facilitated
by an oral presentation of data, views, and arguments, the Commission
will consider, pursuant to Rule 19b-4 under the Act,\91\ any request
for an

opportunity to make an oral presentation.\92\
---------------------------------------------------------------------------

    \91\ 17 CFR 240.19b-4.
    \92\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants to
the Commission flexibility to determine what type of proceeding--
either oral or notice and opportunity for written comments--is
appropriate for consideration of a particular proposal by a self-
regulatory organization. See Securities Acts Amendments of 1975,
Senate Comm. on Banking, Housing & Urban Affairs, S. Rep. No. 75,
94th Cong., 1st Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change, as modified by
Amendment Nos. 1 and 2, should be approved or disapproved by November
30, 2017. Any person who wishes to file a rebuttal to any other
person's submission must file that rebuttal by December 14, 2017.
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 No. SR-NASDAQ-2017-074 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 No. SR-NASDAQ-2017-074. The 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 Web site (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 Web site 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 No. SR-NASDAQ-2017-074 and should be
submitted by November 30, 2017. Rebuttal comments should be submitted
by December 14, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\93\
---------------------------------------------------------------------------

    \93\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-24371 Filed 11-8-17; 8:45 am]
BILLING CODE 8011-01-P


region facility species. orig stage year impinged. est entrained. est dummy dummy dummy dummy  999  999  999 river hatfield cyprinidae larvae 1980 . 1 river hatfield cyprinidae age01 1980 1 . river hatfield walleye larvae 1980 . 1 river hatfield walleye age01 1980 1 . notes qc dummy dummy rm 36505 mock record. Inserted only as a placeholder to yield a. gage rm 36505 mock record. Inserted only as a placeholder to yield a. gage rm 36505 mock record. Inserted only as a placeholder to yield a. gage rm 36505 mock record. Inserted only as a placeholder to yield a. gage Losses data for the Hatfield Ferry Power Station ; Monongahela R. PA. West Penn Power Co. Intake 316( b) Phase III dc 2/ 26/ 04 RM # 36505 Notes: the facility report claims ZERO imp and ent losses. ( Page 8). This workbook is preapred with a nominal loss rate of one cyprinid for imp and ent, just st to act as a placeholder.