80 FR 23839 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Postpone Implementation of Changes to Rules 4751(h) and 4754(b) Relating to the Closing Process

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 80, Issue 82 (April 29, 2015)

Page Range		23839-23841
FR Document		2015-09917

Federal Register, Volume 80 Issue 82 (Wednesday, April 29, 2015)

[Federal Register Volume 80, Number 82 (Wednesday, April 29, 2015)]
[Notices]
[Pages 23839-23841]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2015-09917]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74795; File No. SR-NASDAQ-2015-038]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Postpone Implementation of Changes to Rules 4751(h) and 4754(b)
Relating to the Closing Process

April 23, 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 April 13, 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 the
Substance of the Proposed Rule Change

The Exchange proposes to postpone implementation of changes to
Rules 4751(h) and 4754(b) relating to the closing process.
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.

[[Page 23840]]

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 Rules
4751(h) and 4754(b) relating to the closing process, which are
effective but not yet implemented. On December 16, 2014, the Exchange
filed an immediately effective filing \3\ to amend the processing of
the Closing Cross under Rule 4754(b) to adopt a ``Lockdown Period,''
the point at which NASDAQ will close the order book for participation
in the Closing Cross. The Exchange also amended Rule 4751(h) to
harmonize the processing of Market Hours Day orders \4\ and Good-til-
market close orders \5\ upon initiation of the Lockdown Period.
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\3\ Securities Exchange Act Release No. 73943 (December 24,
2014), 80 FR 69 (January 2, 2015) (SR-NASDAQ-2014-123).
\4\ See Rule 4751(h)(6).
\5\ See Rule 4751(h)(8).
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The Exchange had originally anticipated implementing the changes in
mid-February 2015, after the expiration of the 30-day operative delay
provided by Rule 19b-4(f)(6)(iii) under the Act.\6\ The Exchange
subsequently extended the period for implementation to Monday, April
13, 2015.\7\
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\6\ 17 CFR 240.19b-4(f)(6)(iii).
\7\ Securities Exchange Act Release No. 74342 (February 20,
2015), 81 FR 10562 (February 26, 2015) (SR-NASDAQ-2015-14 [sic]).
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Based upon the Exchange's final internal pre-implementation
testing, however, the Exchange has determined not to proceed with the
scheduled implementation. Out of an abundance of caution, the Exchange
will instead conduct an additional industry-wide User Acceptance Test
to ensure the proper function of the proposed changes. Upon successful
completion of that test, the Exchange will determine a new
implementation date and provide notice of the new date to the industry.
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\8\ in general, and with Section
6(b)(5) of the Act,\9\ 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
Rules 4751(h) and 4754(b) promote consistency and transparency in the
process for handling orders in the closing process. Delaying
implementation of the changes for brief period so that NASDAQ may
implement the changes to its systems necessary to ensure that the
Lockdown Period and processing of Market Hours Day and Good-til-market
close orders are handled in the Closing Cross operate as planned
promotes fair and orderly markets, the protection of investors and the
public interest.
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\8\ 15 U.S.C. 78f.
\9\ 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.\10\ 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 during the closing process.
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\10\ 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

Written comments were neither solicited nor 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 \11\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(a)(iii).
\12\ 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 did not satisfy this requirement. Nonetheless, the
Commission has waived the pre-filing requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ 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 Commission to waive the 30-day operative delay so that NASDAQ may
implement the proposed rule change immediately. The Commission believes
that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest because it will allow
NASDAQ the opportunity to conduct further testing to ensure the proper
function of the proposed changes before implementing them. Therefore,
the Commission hereby waives the 30-day operative delay and designates
the proposed rule change to be operative upon filing with the
Commission.\15\
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ For purposes only of waiving the operative delay for this
proposal, 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 rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2015-038 on the subject line.

[[Page 23841]]

Paper Comments

Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2015-038. 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 such filing also will be available
for inspection and copying at the principal offices 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-
038, and should be submitted on or before May 20, 2015.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-09917 Filed 4-28-15; 8:45 am]
BILLING CODE 8011-01-P

Federal Register / Vol. 80, No. 82 / Wednesday, April 29, 2015 / Notices 23839

purposes of determining the best ranked Exchange’s order handling processes SECURITIES AND EXCHANGE
displayed order(s) on the Exchange for and functionalities, including how COMMISSION
dissemination on the public data feeds, otherwise non-marketable odd-lot sized
the Exchange handles non-marketable orders are aggregated for purposes of [Release No. 34–74795; File No. SR–
odd-lot orders that are priced better than determining the best bid or offer for NASDAQ–2015–038]
the best-priced round lot interest at the display on the public data feeds.32
Exchange.25 Specifically, proposed Rule According to the Exchange, these Self-Regulatory Organizations; The
7.36(c) would be amended to explain amendments, both clarifying and NASDAQ Stock Market LLC; Notice of
the current Exchange functionality technical, should remove impediments Filing and Immediate Effectiveness of
where non-marketable odd-lot sized to and perfect the mechanism of a free Proposed Rule Change To Postpone
orders that can be aggregated to equal at and open market, and are consistent Implementation of Changes to Rules
least a round lot are displayed as the with the protection of investors and the
best ranked displayed orders to sell 4751(h) and 4754(b) Relating to the
public interest.33 The Exchange believes
(buy) at the least aggressive price at Closing Process
that this proposal should help reduce
which such odd-lot sized orders can be the potential for investor confusion and April 23, 2015.
aggregated to equal at least a round facilitate a better understanding of the
lot.26 Proposed Rule 7.37 would be Exchange’s order handling operations Pursuant to Section 19(b)(1) of the
amended to make conforming and other and navigation of its rulebook.34 Securities Exchange Act of 1934
non-substantive, technical changes.27 (‘‘Act’’),1 and Rule 19b–4 thereunder,2
The Commission notes that the notice is hereby given that on April 13,
Proposed Rule 7.38(a)(1) would be
proposal reduces the number of order 2015, The NASDAQ Stock Market LLC
amended to specify the order types that
types that will be accepted by the
cannot be entered as odd-lots, namely (‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
Exchange. The Commission also notes
Reserve Orders, MPL–IOC Orders, the Securities and Exchange
that the proposal provides additional
Tracking Orders, and Q Orders.28 Commission (‘‘SEC’’ or ‘‘Commission’’)
detail regarding certain order type and
III. Discussion and Commission modifier functionality that remain the proposed rule change as described
Findings available on the Exchange. The in Items I and II below, which Items
Commission further notes that the have been prepared by the Exchange.
After careful review, the Commission
Exchange has restructured and The Commission is publishing this
finds that the proposed rule change is
reorganized proposed Rule 7.31 such notice to solicit comments on the
consistent with the requirements of the
Act and the rules and regulations that order types with similar proposed rule change from interested
thereunder applicable to a national functionality are grouped together by persons.
securities exchange.29 In particular, the subsection. The Commission believes I. Self-Regulatory Organization’s
Commission finds that the proposed that these proposed changes should Statement of the Terms of the Substance
rule change is consistent with Section provide greater specificity, clarity and
of the Proposed Rule Change
6(b)(5) of the Act,30 which requires, transparency with respect to the order
among other things, that the rules of a type and modifier functionality The Exchange proposes to postpone
national securities exchange be available on the Exchange, as well as the implementation of changes to Rules
designed to prevent fraudulent and Exchange’s methodology for handling 4751(h) and 4754(b) relating to the
manipulative acts and practices, to certain order types. Accordingly, the closing process.
promote just and equitable principles of Commission believes that the proposal
should help to prevent fraudulent and The text of the proposed rule change
trade, to foster cooperation and
manipulative acts and practices, is available on the Exchange’s Web site
coordination with persons engaged in
promote just and equitable principles of at http://nasdaq.cchwallstreet.com, at
facilitating transactions in securities, to
remove impediments to and perfect the trade, remove impediments to and the principal office of the Exchange, and
mechanism of a free and open market perfect the mechanism of a free and at the Commission’s Public Reference
and a national market system, and, in open market and a national market Room.
general, to protect investors and the system, and, in general, protect II. Self-Regulatory Organization’s
public interest. investors and the public interest.
Statement of the Purpose of, and
The Commission notes that the IV. Conclusion Statutory Basis for, the Proposed Rule
proposed rule change reflects the Change
Exchange’s continued efforts to review It is therefore ordered, pursuant to
and clarify its rules governing order Section 19(b)(2) of the Act,35 that the In its filing with the Commission, the
types.31 In addition, the Commission proposed rule change (SR–NYSEArca- Exchange included statements
notes that the Exchange believes that the 2015–08) be, and it hereby is, approved. concerning the purpose of and basis for
proposal is consistent with Section the proposed rule change and discussed
For the Commission, by the Division of
6(b)(5) of the Act because it provides any comments it received on the
Trading and Markets, pursuant to delegated
greater specificity, clarity and proposed rule change. The text of these
authority.36
transparency with regard to the statements may be examined at the
Brent J. Fields,
25 See Secretary. places specified in Item IV below. The
Notice, 80 FR at 12540–41.
Exchange has prepared summaries, set
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26 Id.
[FR Doc. 2015–09918 Filed 4–28–15; 8:45 am]
27 See Notice, 80 FR at 12540. forth in sections A, B, and C below, of
BILLING CODE 8011–01–P
28 See Notice, 80 FR at 12541. the most significant aspects of such
29 In approving this proposed rule change, the
32 See
statements.
Commission has considered the proposed rule’s Notice, 80 FR at 12541.
33 Id.
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f). 34 Id.
30 15 U.S.C. 78f(b)(5). 35 15 1 15 U.S.C. 78s(b)(1).
U.S.C. 78s(b)(2).
31 See Notice, 80 FR at 12537. 36 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4.

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Federal Register / Vol. 80, No. 82 / Wednesday, April 29, 2015 / Notices 23841

Paper Comments SECURITIES AND EXCHANGE A. Self-Regulatory Organization’s
COMMISSION Statement of the Purpose of, and
• Send paper comments in triplicate Statutory Basis for, the Proposed Rule
to Brent J. Fields, Secretary, Securities Change
[Release No. 34–74801; File No. SR–Phlx–
and Exchange Commission, 100 F Street 2015–35]
NE., Washington, DC 20549–1090. 1. Purpose
Self-Regulatory Organizations; The purpose of the proposed rule
All submissions should refer to File
NASDAQ OMX PHLX LLC; Notice of change is to update the Exchange’s rules
Number SR–NASDAQ–2015–038. This by deleting eight obsolete rules,
file number should be included on the Filing and Immediate Effectiveness of
Proposed Rule Change To Delete including Rule 1019 as well as and
subject line if email is used. To help the Advices A–2, A–13, D–1, D–2, F–3, F–
Outdated Rule Language Contained in
Commission process and review your 7 and F–21. These rules are now
Rule 1019 and Options Floor
comments more efficiently, please use obsolete for various reasons explained
Procedures Advices
only one method. The Commission will below.
post all comments on the Commission’s April 23, 2015. Historically, Advices replicated the
Internet Web site (http://www.sec.gov/ Pursuant to Section 19(b)(1) of the provisions of the Exchange’s rule that
rules/sro.shtml). Copies of the Securities Exchange Act of 1934 (the were most pertinent for the trading floor
submission, all subsequent ‘‘Act’’),1 and Rule 19b–4 thereunder,2 community to keep handy, in lieu of the
amendments, all written statements notice is hereby given that on April 16, large, unwieldy rulebook; the Exchange
with respect to the proposed rule 2015, NASDAQ OMX PHLX LLC adopted, for many years, both rules and
change that are filed with the (‘‘Phlx’’ or ‘‘Exchange’’) filed with the Advices that contained nearly identical
Commission, and all written Securities and Exchange Commission language where the Advice was the
communications relating to the (‘‘SEC’’ or ‘‘Commission’’) the proposed subject of a fine schedule under the
proposed rule change between the rule change as described in Items I, II, Exchange’s minor rule plan 3 in order
Commission and any person, other than and III below, which Items have been for the trading floor to have easy access
those that may be withheld from the prepared by the Exchange. The to these provisions (which the Exchange
public in accordance with the Commission is publishing this notice to printed and distributed) and in order for
provisions of 5 U.S. C. 552, will be solicit comments on the proposed rule those persons who administered fines to
available for Web site viewing and change from interested persons. have easy access to consult the
applicable fine schedules. Most of the
printing in the Commission’s Public I. Self-Regulatory Organization’s Advices which the Phlx is proposing to
Reference Room, 100 F Street NE., Statement of the Terms of the Substance delete contain similar information to
Washington, DC 20549 on official of the Proposed Rule Change Rule 1019, which, as stated below, is
business days between the hours of also obsolete.
10:00 a.m. and 3:00 p.m. Copies of such The Exchange proposes to delete
outdated rule language contained in (i) Several provisions pertaining to
filing also will be available for Specialists 4 are obsolete, because
Rule 1019, Precedence Accorded To
inspection and copying at the principal Specialists no longer manually handle
Orders Entrusted To Specialists, and (ii)
offices of the Exchange. All comments Options Floor Procedures Advices or execute others’ orders due to the
received will be posted without change; (‘‘Advices’’) A–2, A–13, D–1, D–2, F–3, migration to a new electronic trading
the Commission does not edit personal F–7 and F–21, as explained further system (‘‘Phlx XL II’’) in 2009.5 Of
identifying information from below.
submissions. You should submit only The text of the proposed rule change
3 Many of these Advices contain a fine schedule

information that you wish to make which is administered pursuant to the Phlx’s minor
is available on the Exchange’s Web site rule violation enforcement and reporting plan
available publicly. All submissions at http:// (‘‘Minor Rule Plan’’), and therefore the proposal
should refer to File Number SR– nasdaqomxphlx.cchwallstreet.com/, at necessarily amends the Exchange’s Minor Rule
NASDAQ–2015–038, and should be Plan. The Phlx’s Minor Rule Plan, codified in Phlx
the principal office of the Exchange, and Rule 970, ‘‘Floor Procedure Advices: Violations,
submitted on or before May 20, 2015. at the Commission’s Public Reference Penalties, and Procedures,’’ contains Advices with
For the Commission, by the Division of Room. accompanying fine schedules. See Securities
Exchange Act Release No. 23296 (June 4, 1986), 51
Trading and Markets, pursuant to delegated II. Self-Regulatory Organization’s FR 21430 (June 12, 1986) (SR–Phlx–86–11).
authority.16 Pursuant to paragraph (c)(1) of Rule 19d–1 under
Statement of the Purpose of, and
Brent J. Fields, the Act, a self-regulatory organization (‘‘SRO’’) is
Statutory Basis for, the Proposed Rule required to file promptly with the Commission
Secretary. Change notice of any ‘‘final’’ disciplinary action taken by
[FR Doc. 2015–09917 Filed 4–28–15; 8:45 am] the SRO. Pursuant to paragraph (c)(2) of Rule 19d–
In its filing with the Commission, the 1, any disciplinary action taken by the SRO for
BILLING CODE 8011–01–P
Exchange included statements violation of an SRO rule that has been designated
concerning the purpose of and basis for a minor rule violation pursuant to the plan shall not
be considered ‘‘final’’ for purposes of Section
the proposed rule change and discussed 19(d)(1) of the Act if the sanction imposed consists
any comments it received on the of a fine not exceeding $2500 and the sanctioned
proposed rule change. The text of these person has not sought an adjudication, including a
statements may be examined at the hearing, or otherwise exhausted his or her
administrative remedies. By deeming unadjudicated
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places specified in Item IV below. The minor violations as not final, the Commission
Exchange has prepared summaries, set permits the SRO to report violations on a periodic
forth in sections A, B, and C below, of (quarterly), as opposed to immediate, basis.
the most significant aspects of such 4 See Rule 1020.
5 In May 2009, the Exchange enhanced the
statements.
options trading system and adopted corresponding
rules referring to it as ‘‘Phlx XL II.’’ See Securities
1 15 U.S.C. 78s(b)(1). Exchange Act Release No. 59995 (May 28, 2009), 74
16 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. Continued

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Document Created: 2015-12-16 08:26:09
Document Modified: 2015-12-16 08:26:09

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		80 FR 23839