[Federal Register Volume 79, Number 22 (Monday, February 3, 2014)]
[Notices]
[Pages 6247-6249]
[FR Doc No: 2014-02135]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71419; File No. SR-NASDAQ-2014-007]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Outbound Routing

January 28, 2014
    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 15, 2014, 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.
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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 use Nasdaq Execution Services, LLC
(``NES'') as opposed to Nasdaq Options Services LLC (``NOS'') for
outbound order routing from The NASDAQ Options Market (``NOM''), as
explained further below. The Exchange also proposes to permit the
Exchange to route equities and options orders through NES either
directly or through a third party routing broker-dealer, as explained
further below.
    The text of the proposed rule change is available on the Exchange's
Web site at http://nasdaq.cchwallstreet.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposal is to update the Exchange's rules to
reflect the ability to route orders to other exchanges using either the
Exchange's affiliated broker-dealer or a third party unaffiliated
broker-dealer, which the Exchange may choose to use for efficiency and
potential cost savings.
    Today, the relevant Exchange rules provide that the Exchange shall
route orders in options via NOS and in equities via NES. Both NOS and
NES are affiliates and members of Nasdaq. As a result, certain
conditions have been imposed on the existing routing arrangements.\3\
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    \3\ See, e.g., Securities Exchange Act Release No. 57478 (March
12, 2008), 73 FR 14521 (March 18, 2008) (SR-NASDAQ-2007-04 and SR-
NASDAQ-2007-080) at 14533.
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Replacing NOS With NES
    The Exchange proposes to amend its rules to provide that it shall
use NES for routing orders in options rather than NOS. The Exchange has
determined to use NES for outbound routing in options, in addition to
equities. The Exchange originally set up its affiliated broker-dealers
as two separate entities. Now, the Exchange believes that this is
unnecessary and costly. Accordingly, pursuant to NOM Rules, Chapter VI,
Section 11, NES will now be the outbound routing broker for NOM. As the
new Routing Facility for options, NES will operate the same way as NOS
currently does, in terms of routing options orders to destination
options exchanges. This is substantially similar to NYSEArca's use of
its affiliate Archipelago Securities LLC for order routing in both
equities and options.
Third-Party Routing Broker
    The Exchange also proposes to codify in its rules the ability to
use a third-party routing broker to route to away exchanges, rather
than routing directly through NES, for both equities and options. To
date, the Exchange has used a third-party routing broker in equities
and is amending Rule 4758 to clarify this and incorporate the use of a
third-party routing broker expressly into that rule. Specifically,
today, the Exchange routes equities orders to away markets through NES,
which, in turn, sometimes routes directly to away markets; in addition,
sometimes when the Exchange routes equities orders through NES today,
NES routes those orders through a third-party routing broker.
    In options, the Exchange currently routes options orders to NOS,
which routes directly to away markets. The Exchange proposes to use
NES, rather than NOS, as explained above, and to have NES route either
directly to other options exchanges or to a third-party routing broker
(which will, in turn, route to other options exchanges). The Exchange
proposes to amend Chapter VI, Section 11 of NOM's rules accordingly.
    Regardless of whether a third-party routing broker is used in
either equities or options, all routing will go through NES, but the
Exchange could determine to direct NES to route orders to certain
exchanges using a routing broker rather than routing an order directly.
    The Exchange previously stated that from time to time, it may use
non-affiliate third-party broker-dealers to provide outbound routing
services (i.e., third-party Routing Brokers).\4\ In those cases, orders
are submitted to the third-party Routing Broker through the affiliated
routing broker, and the third-party Routing Broker routes the orders to
the routing destination in its name.
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    \4\ See Securities Exchange Act Release Nos. 67281 (June 27,
2012), 77 FR 39543 (July 3, 2012) (SR-NASDAQ-2012-057) at note 6;
and 68395 (December 10, 2012), 77 FR 74530 (December 14, 2012) (SR-
NASDAQ-2012-134) at note 4.
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    Under this proposal, the relevant rules would now expressly provide
that the Exchange could use one or more third-party unaffiliated
routing broker-dealers (``routing brokers''). Specifically, the
Exchange proposes to amend NOM Rules, Chapter VI, Section 11, which
applies to options, to refer to such routing brokers. The Exchange
proposes to similarly amend Rule 4758(b) respecting equities. The
Exchange proposes to further amend its rules with respect to certain
policies and procedures. Specifically, NOM Rules, Chapter VI, Section
11(e) and Nasdaq Rule 4758 currently provide that the Exchange shall
establish and maintain procedures and internal controls reasonably
designed to adequately restrict the flow of confidential and
proprietary information between the Exchange and the Routing Facility,
and any other entity, including any affiliate of the Routing Facility.
The Exchange

proposes to amend those rules to provide that, where there is a routing
broker, the Exchange shall establish and maintain procedures and
internal controls reasonably designed to adequately restrict the flow
of confidential and proprietary information between the Exchange, the
Routing Facility and any routing broker, and any other entity,
including any affiliate of the routing broker (and if the routing
broker or any of its affiliates engages in any other business
activities other than providing routing services to the Exchange,
between the segment of the routing broker or affiliate that provides
the other business activities and the segment of the routing broker
that provides the routing services).\5\ This way, this provision
extends to the routing broker, if one is used.
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    \5\ This is substantially similar to NYSEArca Rule 6.96(a)(8).
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    In both the proposed equities and options rules, the Exchange
proposes to provide that the Exchange may not use a routing broker for
which the Exchange or any affiliate of the Exchange is the designated
examining authority. This is similar to the existing provisions that do
not permit the Exchange to be the designated examining authority for
its affiliated routing brokers.\6\
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    \6\ See NOM Chapter VI, Section 11(e) (which currently provides
that NOS is a broker-dealer that is a member of an unaffiliated SRO
which is the designated examining authority for the broker-dealer)
and Rule 4758(b)(4) (which currently provides that the designated
examining authority of NES shall be a self-regulatory organization
unaffiliated with the Nasdaq Stock Market LLC or any of its
affiliates). This is also substantially similar to NYSEArca Rule
6.96(a)(7).
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    The Exchange also proposes to expressly state in Rule 4758(b)(1)
and NOM Rules, Chapter VI, Section 11(e) that the Exchange will
determine the logic that provides when, how, and where orders are
routed away to other exchanges. In addition, the routing broker(s)
cannot change the terms of an order or the routing instructions, nor
does the routing broker have any discretion about where to route an
order. This is consistent with, but more specific than, the current
language that states that routing is performed under the direction of
the Exchange.\7\
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    \7\ This is based on NYSEArca Rule 6.96(a)(1)(A).
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    The Exchange may determine to use a different routing broker by
product or by destination exchange, depending upon the costs and
technological efficiencies involved. The proposal is intended to allow
the Exchange to structure its routing arrangements accordingly. At a
minimum, the Exchange anticipates using a routing broker to access
certain markets where the Exchange finds that the costs of maintaining
a membership (for NES) and/or the costs of connectivity and execution
do not make sense in light of the number or types of orders the
Exchange typically routes to that particular market. These costs
necessarily determine the ultimate costs to the Exchange of routing to
a market, and, in turn, affect how the Exchange chooses to recoup those
costs through its own transaction fees.\8\ Sometimes, it will not make
economic sense for NES to access an exchange directly. Accordingly, the
Exchange intends to use a routing broker where the Exchange determines
that it is appropriate. In addition to costs, the Exchange will also
consider ease of connectivity and execution as well as general
reliability in selecting a routing broker.
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    \8\ For these reasons, today, transaction fees for orders vary
depending on the market where an order is ultimately executed. See
e.g., NASDAQ Rule 7000 series and NOM Rules, Chapter XV.
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    For several weeks, the Exchange has been working with the Financial
Regulatory Authority (``FINRA'') and The Options Clearing Corporation
(``OCC'') to secure the necessary approvals for NES to perform these
functions. The Exchange has now secured those approvals. The Exchange
seeks to complete this process and implement this proposal in January
or early February.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act \9\ in general, and furthers the objectives of Section
6(b)(5) of the Act \10\ 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, by providing an alternative routing arrangement. The proposal
should remove impediments to and perfect the mechanism of a free and
open market and a national market system by providing customer order
protection and by facilitating trading at away exchanges so customer
orders trade at the best market price. The proposal should also protect
investors and the public interest by fostering compliance with the
Options Order Protection and Locked/Crossed Market Plan. The Exchange
also believes that the proposal to use NES rather than NOS for options
routing is designed to promote just and equitable principles of trade
and to protect investors and the public interest, by eliminating the
costs and inefficiencies associated with operating a separate broker-
dealer for options routing. In addition, the Exchange believes that the
proposal is not designed to permit unfair discrimination between
customers, issuers, brokers, or dealers, because there are specific
protections pertaining to the routing broker in light of the potential
conflict of interest where the member routing broker could have access
to information regarding other members' orders or the routing of those
orders. These protections include the Exchange's control over all
routing logic as well as the confidentiality of routing
information.\11\
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ See proposed Rules 4758(b)(1) and (8) and NOM Rules,
Chapter VI, Section 11(e).
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(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 proposal is pro-competitive
because it enables broker-dealers other than NOS and NES to provide
routing services to the Exchange, which has the potential to reduce the
Exchange's costs of routing orders and, potentially, the fees the
Exchange charges for routed orders. The proposal does not raise issues
of intra-market competition, because the Exchange's decision to route
through a particular routing broker would impact all participants
equally.

(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

    Because the foregoing 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, it has become
effective pursuant to Section 19(b)(3)(A)(ii) of the Act \12\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(a)(ii).
    \13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization to give the Commission
written notice of its intent to file 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.

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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings to determine whether the
proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2014-007 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2014-007. 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 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; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2014-007 and should
be submitted on or before February 24, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02135 Filed 1-31-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: October 6, 2010 (Volume 75, Number 193)]
[Notices]
[Page 61728-61729]
[DOCID:fr06oc10-64]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

Combined Notice of Filings

September 28, 2010.
    Take notice that the Commission has received the following Natural
Gas Pipeline Rate and Refund Report filings:

    Docket Numbers: RP10-1334-000.
    Applicants: Honeoye Storage Corporation.
    Description: Honeoye Storage Corporation submits tariff filing per
154.203: Honeoye Storage Section 157 Tariff to be effective 9/23/2010.
    Filed Date: 09/23/2010.
    Accession Number: 20100923-5061.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 5, 2010.

    Docket Numbers: RP10-1335-000.
    Applicants: Honeoye Storage Corporation.
    Description: Honeoye Storage Corporation submits tariff filing per
154.203: Honeoye Storage Corporation, Volume No. 1A to be effective 9/
23/2010.
    Filed Date: 09/23/2010.
    Accession Number: 20100923-5067.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 5, 2010.

    Docket Numbers: RP10-1336-000.
    Applicants: Equitrans, L.P.
    Description: Equitrans, L.P. submits tariff filing per 154.204:
Form of Service Agreement Revisions & Tariff Corrections to be
effective 10/23/2010.
    Filed Date: 09/23/2010.
    Accession Number: 20100923-5093.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 5, 2010.

    Docket Numbers: RP10-1337-000.
    Applicants: Northern Natural Gas Company.

    Description: Northern Natural Gas Company submits Tenth Revised
Sheet 67 et al of its FERC Gas tariff, Fifth Revised Volume 1 effective
10/25/10.
    Filed Date: 09/23/2010.
    Accession Number: 20100923-0216.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 5, 2010.

    Docket Numbers: RP10-1338-000.
    Applicants: Wyoming Interstate Company, L.L.C.
    Description: Wyoming Interstate Company, L.L.C. submits tariff
filing per 154.203: Diamond Mountain Compressor Station Compliance
Filing to be effective 10/23/2010.
    Filed Date: 09/23/2010.
    Accession Number: 20100923-5119.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 5, 2010.

    Docket Numbers: RP10-1339-000.
    Applicants: Northern Natural Gas Company.
    Description: Northern Natural Gas Company submits tariff filing per
154.203: Baseline to be effective 9/24/2010.
    Filed Date: 09/24/2010.
    Accession Number: 20100924-5034.
    Comment Date: 5 p.m. Eastern Time on Wednesday, October 6, 2010.

    Docket Numbers: RP10-1340-000.
    Applicants: Honeoye Storage Corporation.
    Description: Honeoye Storage Corporation submits tariff filing per
154.203: Honeoye Storage Corporation, Volume No. 2 to be effective 9/
24/2010.
    Filed Date: 09/24/2010.
    Accession Number: 20100924-5113.
    Comment Date: 5 p.m. Eastern Time on Wednesday, October 6, 2010.

    Docket Numbers: RP10-1341-000.
    Applicants: Dauphin Island Gathering Partners.
    Description: Dauphin Island Gathering Partners submits tariff
filing per 154.203: Baseline Tariff to be effective 9/24/2010.
    Filed Date: 09/24/2010.
    Accession Number: 20100924-5119.
    Comment Date: 5 p.m. Eastern Time on Wednesday, October 6, 2010.

    Docket Numbers: RP10-1342-000.
    Applicants: WTG Hugoton, LP.
    Description: WTG Hugoton, LP submits tariff filing per 154.203: WTG
Hugoton, LP FERC Gas Tariff First Revised Volume No. 1.
    Filed Date: 09/27/2010.
    Accession Number: 20100927-5066.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 12, 2010.

    Docket Numbers: RP10-1343-000.
    Applicants: Energy West Development, Inc.
    Description: Energy West Development, Inc. submits tariff filing
per 154.202: Energy West Development, Inc. First Revised Volume No. 1
Baseline Tariff to be effective 10/27/2010.
    Filed Date: 09/27/2010.
    Accession Number: 20100927-5177.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 12, 2010.

    Docket Numbers: RP10-1344-000.
    Applicants: Rockies Express Pipeline LLC.
    Description: Rockies Express Pipeline LLC submits tariff filing per
154.204: Negative Rate 2010-09-27 MGE to be effective 11/1/2010.
    Filed Date: 09/27/2010.
    Accession Number: 20100927-5222.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 12, 2010.

    Docket Numbers: RP10-1345-000.
    Applicants: Guardian Pipeline, L.L.C.
    Description: Guardian Pipeline, L.L.C. submits tariff filing per
154.403: EPC Recovery Surcharge Adjustment to be effective 11/1/2010.
    Filed Date: 09/27/2010.
    Accession Number: 20100927-5262.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 12, 2010.

    Docket Numbers: RP10-1346-000.
    Applicants: Columbia Gas Transmission, LLC.
    Description: Columbia Gas Transmission, LLC submits tariff filing
per 154.204: Non-Conforming Agreement--Bluestone Energy Partners to be
effective 10/1/2010.
    Filed Date: 09/27/2010.
    Accession Number: 20100927-5265.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 12, 2010.

    Docket Numbers: RP10-1347-000.
    Applicants: Western Gas Interstate Company.
    Description: Western Gas Interstate Company submits tariff filing
per 154.203: Western Gas Interstate FERC Gas Tariff Fifth Revised
Volume No. 1 to be effective 9/28/2010.
    Filed Date: 09/28/2010.
    Accession Number: 20100928-5164.
    Comment Date: 5 p.m. Eastern Time on Tuesday, October 12, 2010.

    Any person desiring to intervene or to protest in any of the above
proceedings must file in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214) on or before 5 p.m. Eastern time on the specified comment
date. It is not necessary to separately intervene again in a subdocket
related to a compliance filing if you have previously intervened in the
same docket. Protests will be considered by the Commission in
determining the appropriate action to be taken, but will not serve to
make protestants parties to the proceeding. Anyone filing a motion to
intervene or protest must serve a copy of that document on the
Applicant. In reference to filings initiating a new proceeding,
interventions or protests submitted on or before the comment deadline
need not be served on persons other than the Applicant.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://
www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St., NE., Washington, DC 20426.
    The filings in the above proceedings are accessible in the
Commission's eLibrary system by clicking on the appropriate link in the
above list. They are also available for review in the Commission's
Public Reference Room in Washington, DC. There is an eSubscription link
on the Web site that enables subscribers to receive e-mail notification
when a document is added to a subscribed docket(s). For assistance with
any FERC Online service, please e-mail<EMAIL_ADDRESS>or
call<PHONE_NUMBER> (toll free). For TTY, call<PHONE_NUMBER>.

Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2010-25085 Filed 10-5-10; 8:45 am]
BILLING CODE 6717-01-P