80 FR 18907 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Postpone Implementation of Changes to Rule 4751(h)(5)

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 67 (April 8, 2015)

[Federal Register Volume 80, Number 67 (Wednesday, April 8, 2015)]
[Notices]
[Pages 18907-18909]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-07965]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74637; File No. SR-NASDAQ-2015-028]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Postpone Implementation of Changes to Rule 4751(h)(5)

April 2, 2015.
    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 March 25, 2015, 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 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.
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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 postpone implementation of changes to Rule 
4751(h)(5).
    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
    NASDAQ is proposing to delay implementation of changes to Rule 
4751(h)(5) relating to processing of Market Hours IOC (``MIOC'') orders 
and to make clarifying changes to the rule, which are effective but not 
yet implemented. On March 6, 2015, the Exchange filed an immediately 
effective filing \3\ to amend the processing of MIOC orders under Rule 
4751(h)(5). MIOC is a Time in Force \4\ characteristic of an

[[Page 18908]]

order that will cause it (or unexecuted portion thereof) to be canceled 
if, after entry into the System the order (or unexecuted portion 
thereof) becomes non-marketable during the Regular Market Session, 9:30 
a.m. until 4:00 p.m. Eastern Time.\5\ Currently, MIOC orders entered 
from 4 a.m. Eastern Time to immediately prior to 9:30 a.m. Eastern Time 
are held by the System until 9:30 a.m. Eastern Time, at which time the 
System determines whether such orders are marketable. The Exchange 
proposed to no longer accept MIOC orders entered prior to the beginning 
of the Regular Market Session. The Exchange also proposed clarifying 
the rule text to make it clear that MIOC orders will be available for 
order entry and execution beginning at completion of the Opening Cross.
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    \3\ Securities Exchange Act Release No. 74518 (March 17, 2015), 
80 FR 15260 (March 23, 2015) (SR-NASDAQ-2015-022).
    \4\ Time in Force is the period of time that the System will 
hold an order for potential execution. See Rule 4751(h).
    \5\ As defined by Rule 4120(b)(4)(D).
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    The Exchange had originally anticipated implementing the changes on 
April 13, 2015. The Exchange, however, has experienced unanticipated 
delay in the development of the changes to its systems, which has made 
the original implementation date unachievable. The Exchange believes it 
will be able to implement the changes sometime in the second quarter of 
2015, and will provide notice of the implementation date of the changes 
in an Equity Trader Alert not less than 30 days prior to 
implementation.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\6\ in general, and with Section 
6(b)(5) of the Act,\7\ in particular, because it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, 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 is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers. The Exchange believes that the changes NASDAQ is making to 
Rule 4751(h)(5) promote consistency and transparency in the process for 
handling MIOC orders. Delaying implementation of the changes for brief 
period so that NASDAQ may implement and test the changes to its systems 
necessary to ensure that the processing of MIOC orders operate as 
planned promotes fair and orderly markets, and the protection of 
investors and the public interest.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.\8\ The Exchange 
believes that the proposal is irrelevant to competition because it is 
not driven by, and will have no impact on, competition. Specifically, 
the proposal is representative of the Exchange's efforts to harmonize 
and simplify the processing of orders. Delaying implementation of the 
proposal will ensure the proposed changes are adequately implemented 
and tested.
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    \8\ 15 U.S.C. 78f(b)(8).
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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)(iii) of the Act \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(a)(ii) [sic].
    \10\ 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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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Exchange notes that waiving the operative delay is 
consistent with the protection of investors and the public interest 
because it will allow the Exchange to postpone implementation of the 
previously proposed changes immediately, prior to the operative date of 
those changes. For this reason, the Commission waives the operative 
delay and designates the proposed rule change to be operative upon 
filing.\11\
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    \11\ 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).
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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 protected]. Please include 
File Number SR-NASDAQ-2015-028 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 Number SR-NASDAQ-2015-028. 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

[[Page 18909]]

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-2015-028 and should 
be submitted on or before April 29, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-07965 Filed 4-7-15; 8:45 am]
 BILLING CODE 8011-01-P