81 FR 45188 - Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4120

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 133 (July 12, 2016)

[Federal Register Volume 81, Number 133 (Tuesday, July 12, 2016)]
[Notices]
[Pages 45188-45190]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16378]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78234; File No. SR-BX-2016-033]


Self-Regulatory Organizations; NASDAQ BX, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4120

July 6, 2016.
    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 June 22, 2016, NASDAQ BX, Inc. (``BX'' or ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule

[[Page 45189]]

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 is proposing to amend Rule 4120 and the BX process for 
commencing trading of a security that is the subject of a trading halt.
    The text of the proposed rule change is available at http://nasdaqomxbx.cchwallstreet.com/, at the Exchange's principal office, 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
    BX is proposing to make a minor modification to the BX process for 
commencing trading of a security that is the subject of a trading halt. 
Specifically, the Exchange is proposing to modify the way in which 
orders are accepted prior to the commencement of trading for securities 
subject to a trading halt. This change will simplify the order 
submission operations for market participants during trading halts.\3\
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    \3\ The proposed rule change is consistent with the recently 
approved filing of The NASDAQ Stock Market LLC (``Nasdaq'') as to 
the process for commencing trading of a security that is the subject 
of a trading halt. See Securities Exchange Act Release No. 77445 
(March 25, 2016), 81 FR 18658 (March 31, 2016) (SR-NASDAQ-2016-008).
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    Currently, BX Rule 4120(c)(4)(B) provides that during any trading 
halt or pause, market participants may enter orders during the trading 
halt or pause and designate such orders to be held until the 
termination of the trading halt or pause. Under this rule, such orders 
will be held in a suspended state until the termination of the halt or 
pause, at which time they will be entered into the system. The Exchange 
proposes that Rule 4120(c)(4)(B) be revised to simply state that orders 
entered during any trading halt or pause will not be accepted.
    The implementation of the existing functionality for accepting 
orders prior to the Exchange releasing the security for trading has not 
been widely used and the Exchange believes the proposed rule change 
will both improve and simplify the Exchange process for market 
participants. The Exchange will issue an Equity Trader Alert notifying 
Exchange member firms of the change prior to implementation on July 11, 
2016.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\4\ in general, and with 
Section 6(b)(5) of the Act,\5\ in particular, in that the proposal 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.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change will remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system through an improved and simplified Exchange 
process for commencing trading of a security that is the subject of a 
trading halt. Specifically, this will be accomplished by revising 
Exchange Rule 4120(c)(4)(B) to simply state that orders entered during 
any trading halt or pause will not be accepted.
    The current functionality for accepting orders prior to the 
Exchange releasing the security for trading is used infrequently and 
consequently the proposed rule change will have little impact on 
customers. To the extent that there is any impact, it will be that 
rejecting orders rather than holding them in a suspended state will 
clarify the state of participant orders, thereby reducing potential 
confusion. The implementation of the existing functionality for 
accepting orders prior to the Exchange releasing the security for 
trading has not been widely used and the Exchange believes the proposed 
rule change will both improve and simplify the Exchange process for 
market participants.
    The proposed rule change also will remove impediments to and 
perfect the mechanism of a free and open market through competition. 
Specifically, the proposed rule change will enhance competition by 
increasing the Exchange's attractiveness as a venue for trading 
securities because, as stated above, it will both improve and simplify 
the Exchange process for market participants.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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. The 
Exchange believes that the proposed rule change will result in an 
improved and simplified process for market participants, which in turn 
will reduce potential confusion during important market events. The 
Exchange believes that this change will enhance competition by 
increasing its attractiveness as a venue for trading securities.

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: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) by its terms, does not 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) of 
the Act and Rule 19b4(f)(6) thereunder.\6\
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    \6\ 17 CFR 240.19b-4(f)(6). Furthermore, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file a proposed rule change, along 
with a brief description and text of the proposed rule change at 
least five business days prior to the date of filing, or such 
shorter time as designated by the Commission. The Exchange has 
provided such notice.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30-days from the date of filing. However, Rule 
19b-

[[Page 45190]]

4(f)(6)(iii) \7\ permits the Commission to 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 it may implement the proposed rule change 
on July 11, 2016, contemporaneously with a similar Nasdaq rule that was 
previously approved by the Commission \8\ and a virtually identical 
proposed rule change submitted by NASDAQ PHLX LLC.\9\
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    \7\ 17 CFR 240.19b-4(f)(6)(iii).
    \8\ See supra note 3.
    \9\ See SR-PHLX-2016-70 submitted on June 22, 2016.
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The Exchange proposes to modify the way in which orders are accepted 
prior to the commencement of trading for securities that are subject to 
a trading halt. The Exchange notes that the current functionality for 
accepting orders prior to the Exchange releasing the security for 
trading is used infrequently and therefore the proposed rule change 
will have little impact on its customers. Further, the Commission does 
not believe that the proposed rule change raises any new or novel 
issues. Accordingly, the Commission hereby waives the 30-day operative 
delay and designates the proposed rule change as operative upon 
filing.\10\
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    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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 necessary or 
appropriate in the public interest, for the protection of investors, or 
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-BX-2016-033 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-BX-2016-033. 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-BX-2016-033, and should be 
submitted on or before August 2, 2016.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Brent J. Fields,
Secretary.
[FR Doc. 2016-16378 Filed 7-11-16; 8:45 am]
 BILLING CODE 8011-01-P