Overview
Title
Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4759
Agencies
ELI5 AI
Nasdaq wants to use two new helpers, called MIAX PEARL and MEMX, to get important information for doing trades, just like having two friends help with homework in case one is busy. This is meant to make things work better, and people can tell them what they think about this idea until March 15, 2021.
Summary AI
Nasdaq BX, Inc. has submitted a proposal to the Securities and Exchange Commission to update Rule 4759, which governs the data feeds the exchange uses for handling and executing orders. The proposed amendment aims to add a direct data feed from MIAX PEARL, LLC and MEMX LLC as the primary sources, while CQS/UQDF will become the secondary source, to ensure data is available even if the primary source fails. This change is intended to improve transparency and efficiency without affecting competition, and comments on the rule can be submitted to the SEC until March 15, 2021.
Keywords AI
Sources
AnalysisAI
Nasdaq BX, Inc. recently proposed an amendment to Rule 4759, as detailed in a notice from the Securities and Exchange Commission (SEC). This rule change pertains to the data feeds the exchange uses for managing orders. Primarily, it suggests that MIAX PEARL, LLC and MEMX LLC become direct providers for Nasdaq BX's quotation data, while CQS/UQDF will serve as a backup data source. This proposal is designed to enhance the transparency and efficiency of data management within the exchange by safeguarding against potential data disruptions. The SEC invites public comments on this initiative until March 15, 2021.
Issues and Concerns
A notable concern arising from this document is the lack of financial analysis related to the switch in data feed sources. It remains unclear whether the transition to MIAX PEARL and MEMX as primary data sources is cost-effective or if it inadvertently leads to higher expenses without corresponding benefits. Additionally, questions could be raised about whether this shift implies preferential treatment towards MIAX PEARL and MEMX, which could affect impartiality within the industry.
Impact on the Public
For the general public, particularly investors, this proposed rule change aims to promote a more robust trading environment by reducing the risk of data disruptions. More reliable data feeds can contribute to smoother operations and improved market stability, potentially leading to greater investor confidence.
Impact on Stakeholders
For Nasdaq BX and its affiliate exchanges, the proposed changes could lead to improved operational efficiency and transparency. Market participants, such as brokers and traders, could experience enhanced access to timely market data, which is crucial for informed trading decisions. However, other data providers might view this switch as a disadvantage if it reshuffles their importance in the market data ecosystem.
Additional Considerations
The document employs legal terminology that may be complex for readers unfamiliar with securities law, which could pose a barrier to broader public engagement. Additionally, while the proposal suggests implementation within ninety days post-approval, it lacks specifics regarding the commencement date. This could create uncertainty about when participants should expect to see changes.
The proposal lacks a detailed assessment of potential drawbacks or risks, which should ideally be addressed to ensure it is balanced and encompasses various perspectives. Providing more comprehensive analyses and clarifying the timeline could enhance public understanding and facilitate more informed feedback during the comment period.
Issues
• The document lacks details on the financial implications of changing data feed sources to MIAX PEARL and MEMX. This could be assessed to ensure there is no wasteful spending.
• It is not clear if favoring MIAX PEARL and MEMX as primary sources is impartial or if there might be preferential treatment towards these organizations.
• The legal references to sections and rules (e.g., Section 19(b)(1) of the Securities Exchange Act, Rule 19b-4) might be unclear to readers not familiar with securities law.
• The document uses legal jargon, such as 'Rule 19b-4(f)(6) thereunder', which may be complex for a general audience to understand.
• No information is provided on potential drawbacks or risks associated with the proposed changes to data feed sources.
• The timeline for implementation is vague, mentioning 'no later than ninety (90) days', without a specific start date.