83 FR 19847 - Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4702(b)(5), Rule 4703(d), Rule 4752(d)(2)(B), and Rule 4754(b)(2)(B)
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 87 (May 4, 2018)
Federal Register Volume 83, Issue 87 (May 4, 2018)
| Page Range | 19847-19850 | |
| FR Document | 2018-09448 |
[Federal Register Volume 83, Number 87 (Friday, May 4, 2018)] [Notices] [Pages 19847-19850] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-09448] ======================================================================= ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83132; File No. SR-NASDAQ-2018-031] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 4702(b)(5), Rule 4703(d), Rule 4752(d)(2)(B), and Rule 4754(b)(2)(B) April 30, 2018. 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 18, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' or ``Exchange'') filed with the Securities and Exchange Commission (``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. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 4702(b)(5) and Rule 4703(d) to prevent Midpoint Peg Post-Only Orders and Orders entered with a Midpoint Pegging Order Attribute from participating in the Nasdaq Halt Cross, and (2) to amend Rule 4752(d)(2)(B) and Rule 4754(b)(2)(B) to state that Open Eligible Interest and Close Eligible Interest, respectively, are used in determining the ``imbalance'' for purposes of those rules. The text of the proposed rule change is available on the Exchange's website 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 proposed rule change is to: (1) Amend Rule 4702(b)(5) and Rule 4703(d) to prevent Midpoint Peg Post-Only Orders (``MPPOs'') and Orders entered with a Midpoint Pegging Order Attribute (``Midpoint Pegged Orders'') from participating in the Nasdaq Halt Cross, and (2) to amend Rule 4752(d)(2)(B) and Rule 4754(b)(2)(B) to state that Open Eligible Interest and Close Eligible Interest, respectively, are used in determining the ``imbalance'' for purposes of those rules. Excluding MPPOs and Midpoint Pegged Orders From the Nasdaq Halt Cross An ``MPPO'' is defined in Rule 4702(b)(5)(A) as an Order Type with a Non-Display Order Attribute that is priced at the midpoint between the national best bid and offer (``NBBO''), and that will execute upon entry only in circumstances where economically beneficial to the party entering the Order. Today, Rule 4702(b)(5)(C) provides that MPPOs are available during Market Hours only, and may not participate in the Nasdaq Opening Cross conducted pursuant to Rule 4752 or the Nasdaq Closing Cross conducted pursuant to Rule 4754.\3\ However, MPPOs are not similarly prohibited from participating in the Nasdaq Halt Cross conducted pursuant to Rule 4753--i.e., the process for determining the price at which Eligible Interest shall be executed at the open of trading for a halted security and for executing that Eligible Interest. --------------------------------------------------------------------------- \3\ An MPPO entered prior to the beginning of Market Hours will be rejected, and an MPPO remaining on the Nasdaq Book at 4:00 p.m. ET will be cancelled by the System. See Rule 4702(b)(5)(C). --------------------------------------------------------------------------- Similar to current behavior for the Nasdaq Opening Cross and the Nasdaq Closing Cross, the Exchange believes that it would be beneficial for members and investors to prevent MPPOs from executing in the Nasdaq Halt Cross, as these Orders are designed for regular trading on the Exchange's continuous market where there is an active market [[Page 19848]] that can be used to price these Orders. The Exchange therefore proposes to amend Rule 4702(b)(5)(C) to provide that MPPOs may not participate in the Nasdaq Halt Cross. Furthermore, the Exchange proposes to add language to Rule 4702(b)(5)(C) that explains that MPPOs will be cancelled by the System when a trading halt is declared, and any MPPOs entered during a trading halt will be rejected. The System currently rejects MPPOs entered when a trading halt is in effect but does not cancel existing MPPOs when the trading halt is declared. The proposed behavior will ensure that MPPOs do not participate in the subsequent reopening of the halted security in the Nasdaq Halt Cross by cancelling existing MPPOs when the trading halt is declared in addition to curtailing the ability of members to enter new MPPOs during the trading halt, which the Exchange believes is consistent with the intention of this Order Type. Furthermore, MPPOs will be handled consistently across the Nasdaq Opening Cross, Nasdaq Closing Cross, and Nasdaq Halt Cross, which is consistent with how the Exchange believes members want these orders treated. Furthermore, the Exchange proposes to remove language describing MPPO behavior in a cross where the MPPO locks a preexisting Order. Specifically, Rule 4702(b)(5)(A) contains language that states that: ``For purposes of any cross in which a Midpoint Peg Post-Only Order participates, a Midpoint Peg Post-Only Order to buy (sell) that is locking a preexisting Order shall be deemed to have a price equal to the price of the highest sell Order (lowest buy Order) that would be eligible to execute against the Midpoint Peg Post-Only Order in such circumstances. Thus, a Midpoint Peg Post-Only Order to buy that locked a preexisting Non-Displayed Order to sell at $11.03 would be deemed to have a price of $11.02. It should be noted, however, that Midpoint Peg Post-Only Orders may not be entered prior to the Nasdaq Opening Cross, and the System cancels Midpoint Peg Post-Only Orders prior to the commencement of the Nasdaq Closing Cross.'' This language, which only applies to MPPOs that participate in a cross, is no longer necessary as MPPOs will be systematically prohibited from trading in any cross-- i.e., the Nasdaq Opening Cross, Nasdaq Halt Cross, or Nasdaq Closing Cross. The Exchange therefore proposes to eliminate this language from its rulebook.\4\ --------------------------------------------------------------------------- \4\ This language references that MPPOs do not participate in the Nasdaq Opening Cross or Nasdaq Closing Cross. Although the Exchange is not changing that behavior, the Exchange proposes to remove this reference, which is duplicative of language described above in Rule 4702(b)(5)(C). --------------------------------------------------------------------------- In addition to MPPOs the Exchange offers Midpoint Pegged Orders. Rule 4703(d) describes the Pegging Order Attribute, including Midpoint Pegging. Pegging is an Order Attribute that allows an Order to have its price automatically set with reference to the NBBO. Midpoint Pegging means Pegging with reference to the midpoint between the Inside Bid and the Inside Offer. Midpoint Pegged Orders are not displayed. Like MPPOs, Midpoint Pegged Orders are also designed for regular trading on the Exchange's continuous market where there is an active market that can be used to price these Orders. Thus, similar to the proposed handling of MPPOs the Exchange proposes to prevent Midpoint Pegged Orders from participating in the Nasdaq Halt Cross. As such, the Exchange proposes to amend Rule 4703(d) to provide that Orders with Midpoint Pegging will be cancelled by the System when a trading halt is declared, and any Orders with the Midpoint Pegging Order Attribute entered during a trading halt will be rejected. Similar to MPPOs, the System currently rejects Midpoint Pegged Orders entered when a trading halt is in effect but does not cancel existing Midpoint Pegged Orders when the trading halt is declared. Similar to the behavior of MPPOs described above, the proposed behavior for Midpoint Pegged Orders will ensure that Midpoint Pegged Orders do not participate in the subsequent reopening of the halted security in the Nasdaq Halt Cross by cancelling existing Midpoint Pegged Orders when the trading halt is declared in addition to curtailing the ability of members to enter new Midpoint Pegged Orders during the trading halt, thereby ensuring that no Orders with this Order Attribute will participate in the Nasdaq Halt Cross. Nasdaq Opening Cross and Nasdaq Closing Cross Imbalance The Exchange disseminates an Order Imbalance Indicator beginning at 9:28 a.m. to increase market transparency ahead of the Nasdaq Opening Cross, and beginning at 3:50 p.m. to increase market transparency ahead of the Nasdaq Closing Cross. The Order Imbalance Indicator includes several data elements that provide information about the crosses, including the Current Reference Price, the number of paired shares at that price, and the size of any Imbalance. On July 13, 2017, the Exchange filed a proposed rule change that, among other things, amended language describing the Current Reference Price, the associated paired share count, and the definition of Imbalance.\5\ Specifically, the Exchange amended Rule 4752(a) to exclude Open Eligible Interest from these data elements for the Nasdaq Opening Cross, and amended Rule 4754(a) to exclude Close Eligible Interest from these data elements for the Nasdaq Closing Cross. --------------------------------------------------------------------------- \5\ See Securities Exchange Act Release Nos. 81188 (July 21, 2017), 82 FR 35014 (July 27, 2017) (Notice); 81556 (September 8, 2017), 82 FR 43264 (September 14, 2017) (Approval Order) (SR-NASDAQ- 2017-061). --------------------------------------------------------------------------- With these changes, ``Imbalance'' is now correctly defined in the rulebook: (1) For the Nasdaq Opening Cross, as the number of shares of buy or sell MOO, LOO or Early Market Hours orders that may not be matched with other MOO, LOO, Early Market Hours, or OIO order shares at a particular price at any given time, and (2) for the Nasdaq Closing Cross, as the number of shares of buy or sell MOC or LOC orders that cannot be matched with other MOC or LOC, or IO order shares at a particular price at any given time. Prior to SR-Nasdaq-2017-061, the definition of Imbalance had mistakenly included Open Eligible Interest as contra-side interest for matching MOO, LOO or Early Market Hours orders when calculating the size of any Imbalance in the Nasdaq Opening Cross, and mistakenly included Close Eligible Interest as contra-side interest for matching MOC or LOC orders when calculating the size of any Imbalance for the Nasdaq Closing Cross. The term Imbalance, however, is also used in other parts of the Nasdaq Opening Cross and Nasdaq Closing Cross rules. For example, the term Imbalance is used: (1) In Rule 4752(d)(2)(B) to describe a tie- breaker used to determine the Nasdaq Opening Cross price if more than one price would maximize the number of shares of MOO, LOO, OIO, Early Market Hours orders, and executable quotes and orders in the Nasdaq Market Center to be executed pursuant to Rule 4752(d)(2)(A), and (2) in Rule 4754(b)(2)(B) to describe a tie-breaker used to determine the Nasdaq Closing Cross price if more than one price would maximize the number of shares of Eligible Interest in the Nasdaq Market Center to be executed pursuant to Rule 4754(b)(2)(A). Specifically, these rules provide that if more than one price exists under Rule 4752(d)(2)(A) or Rule 4754(b)(2)(A), each of which are described above, the Nasdaq Opening Cross and Nasdaq Closing Cross, respectively, shall occur at the price that minimizes any Imbalance. [[Page 19849]] In fact, if more than one price exists under Rule 4752(d)(2)(A), the Nasdaq Opening Cross shall occur at the price that minimizes the number of shares of buy or sell MOO, LOO or Early Market Hours orders that may not be matched with other MOO, LOO, Early Market Hours, Open Eligible Interest, or OIO order shares--i.e., the previous definition of Imbalance under Rule 4752(a)(1). Similarly, if more than one price exists under Rule 4754(b)(2)(A), the Nasdaq Closing Cross shall occur at the price that minimizes the number of shares of buy or sell MOC or LOC orders that cannot be matched with other MOC or LOC, Close Eligible Interest or IO order shares--i.e., the previous definition of Imbalance under Rule 4754(a)(2). While Open Eligible Interest and Close Eligible Interest are not included in the definition of Imbalance for purposes of the Order Imbalance Indicator as such interest may be executed prior to the execution of the cross, they are included in the cross price calculation if remaining on the book at the time the cross is executed. The Exchange therefore proposes to amend Rule 4752(d)(2)(B) and Rule 4754(b)(2)(B) to appropriately describe the tie-breakers discussed above using the previous definition of Imbalance for the Nasdaq Opening Cross and Nasdaq Closing Cross, respectively. Implementation The Exchange proposes to introduce the changes described in this proposed rule change in Q2 2018. The Exchange will announce the implementation date of this functionality in an Equity Trader Alert issued to members prior to the launch date. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,\6\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\7\ 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. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f(b). \7\ 15 U.S.C. 78f(b)(5). --------------------------------------------------------------------------- Excluding MPPOs and Midpoint Pegged Orders From the Nasdaq Halt Cross As indicated in the Exchange's current rules, MPPOs are designed for Market Hours trading and therefore do not participate in either the Nasdaq Opening Cross or Nasdaq Closing Cross. Nevertheless, MPPOs may trade in the Nasdaq Halt Cross today. The Exchange believes that members prefer not to have their MPPOs executed in any of the crosses, including the Nasdaq Halt Cross, and is therefore proposing to cancel MPPOs when a trading halt is initiated. Furthermore, the System already prevents the subsequent entry of MPPOs during the trading halt as reflected in the proposed rule. The Exchange believes that it is consistent with the protection of investors and the public interest to treat MPPOs similarly across all three crosses so that members have a consistent experience when entering MPPOs at different times of the trading day. The proposed changes would also eliminate language in the MPPO rules that describe MPPO handling during a cross. As explained in the purpose section of this proposed rule change, this language will no longer be necessary since MPPOs will be prohibited from participating in any of the Exchange's three crosses--i.e., the Nasdaq Opening Cross, Nasdaq Closing Cross, and Nasdaq Halt Cross. The Exchange believes that this proposed change is consistent with the protection of investors and the public interest because it will properly reflect that MPPOs are no longer eligible for any crosses, and will only trade on the continuous book. Similar to the proposed handling of MPPOs, the Exchange is also proposing to prevent Midpoint Pegging Orders from participating in the Nasdaq Halt Cross. The Exchange believes that it is consistent with the protection of investors and the public interest to cancel these Orders when a trading halt is initiated so that they cannot participate in the Nasdaq Halt Cross. Furthermore, the System already prevents the subsequent entry of additional such Orders during a trading halt. The Exchange believes that members do not want their Midpoint Pegging Orders to trade in the Nasdaq Halt Cross and is therefore introducing functionality that will ensure that these Orders will not do so. Nasdaq Opening Cross and Nasdaq Closing Cross Imbalance The Exchange believes that the proposed changes regarding the Nasdaq Opening Cross and Nasdaq Closing Cross price calculations are consistent with the protection of investors and the public interest because these changes properly identify the tie-breakers used to determine the opening and closing prices when multiple prices would satisfy the maximum quantity requirements of Rule 4752(d)(2)(A) or Rule 4754(b)(2)(A), respectively. Open Eligible Interest or Close Eligible Interest are not used in determining the size of any Imbalance for the Order Imbalance Indicator because such interest may be executed before the time of the cross. Such interest is used in the opening and closing price tie-breakers pursuant to Rule 4752(d)(2)(B) and Rule 4754(b)(2)(B), however, because it is available to execute in the crosses if remaining on the book at the time of the cross price calculation. Using all available interest in these price calculations, rather than only on-open or on-close order types ensures that these price discovery mechanisms properly reflect the interest available at the time the crosses are conducted. The Exchange's rules previously included Open Eligible Interest and Close Eligible Interest in the tie- breakers when such interest was included in the definition of Imbalance. With the recent changes to those definitions--which now align with the interest considered in the Imbalance field of the Order Imbalance Indictor--the Exchange believes that it is necessary to update Rule 4752(d)(2)(B) and Rule 4754(b)(2)(B). 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. Currently, MPPOs and Midpoint Pegging Orders can participate in the Nasdaq Halt Cross despite the fact that these Orders are designed for regular trading on the continuous book. The Exchange is now enhancing MPPO and Midpoint Pegging Order handling to prevent all such Orders from participating in the Nasdaq Halt Cross by cancelling existing interest on the Exchange's order book in addition to rejecting new Orders as done by the System today. The Exchange does not believe this change will have any significant impact on competition as the proposed changes will apply to all MPPOs and Midpoint Pegging Orders. Moreover, the Exchange believes that this is how members want these Orders treated. Furthermore, the proposed changes with respect to the Nasdaq Opening Cross and Nasdaq Closing Cross price calculations are rule corrections and will therefore have no impact on competition. 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. [[Page 19850]] 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) of the Act \8\ and Rule 19b- 4(f)(6) thereunder.\9\ --------------------------------------------------------------------------- \8\ 15 U.S.C. 78s(b)(3)(A). \9\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of 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. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \10\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \11\ 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 the proposed rule change may become operative upon filing. Waiver of the operative delay would allow the Exchange to prevent MPPOs and Midpoint Pegged Orders from participating in the Nasdaq Halt Cross without delay. The Commission also notes that the proposal would ensure that MPPOs and Midpoint Pegged Orders do not participate in any cross (i.e., Nasdaq Opening Cross, Nasdaq Halt Cross, and Nasdaq Closing Cross). According to the Exchange, MPPOs and Midpoint Pegged Orders are designed for regular trading on the Exchange's continuous market, and the proposal would ensure that these orders behave in a manner consistent with members' expectations. Moreover, waiver of the operative delay would allow the Exchange to immediately correct its rules to reflect that Open Eligible Interest and Close Eligible Interest (i.e., interest that is available to execute in the crosses if remaining on the book at the time of the cross price calculation) are included in tie-breakers for the Nasdaq Opening Cross and Nasdaq Closing Cross price calculations, respectively, thus reducing any potential member confusion surrounding the cross price calculations. The Commission believes that waiver of the 30-day operative delay is consistent with the protection of investors and the public interest. Accordingly, the Commission hereby waives the 30-day operative delay and designates the proposed rule change operative upon filing.\12\ --------------------------------------------------------------------------- \10\ 17 CFR 240.19b-4(f)(6). \11\ 17 CFR 240.19b-4(f)(6)(iii). \12\ 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). --------------------------------------------------------------------------- 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 change 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 CommentsUse 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-2018-031 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-2018-031. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NASDAQ-2018-031 and should be submitted on or before May 25, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-09448 Filed 5-3-18; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices 19847
Commission to consider matters related This Notice will be published in the the proposed rule change and discussed
to negotiated service agreement(s). The Federal Register. any comments it received on the
request(s) may propose the addition or proposed rule change. The text of these
Stacy L. Ruble,
removal of a negotiated service statements may be examined at the
Secretary. places specified in Item IV below. The
agreement from the market dominant or
[FR Doc. 2018–09543 Filed 5–3–18; 8:45 am] Exchange has prepared summaries, set
the competitive product list, or the
modification of an existing product BILLING CODE 7710–FW–P forth in sections A, B, and C below, of
currently appearing on the market the most significant aspects of such
dominant or the competitive product statements.
SECURITIES AND EXCHANGE
list. A. Self-Regulatory Organization’s
COMMISSION
Section II identifies the docket Statement of the Purpose of, and
number(s) associated with each Postal [Release No. 34–83132; File No. SR– Statutory Basis for, the Proposed Rule
NASDAQ–2018–031] Change
Service request, the title of each Postal
Service request, the request’s acceptance Self-Regulatory Organizations; The 1. Purpose
date, and the authority cited by the Nasdaq Stock Market LLC; Notice of The purpose of the proposed rule
Postal Service for each request. For each Filing and Immediate Effectiveness of change is to: (1) Amend Rule 4702(b)(5)
request, the Commission appoints an Proposed Rule Change To Amend Rule and Rule 4703(d) to prevent Midpoint
officer of the Commission to represent 4702(b)(5), Rule 4703(d), Rule Peg Post-Only Orders (‘‘MPPOs’’) and
the interests of the general public in the 4752(d)(2)(B), and Rule 4754(b)(2)(B) Orders entered with a Midpoint Pegging
proceeding, pursuant to 39 U.S.C. 505 Order Attribute (‘‘Midpoint Pegged
April 30, 2018.
(Public Representative). Section II also Orders’’) from participating in the
establishes comment deadline(s) Pursuant to Section 19(b)(1) of the Nasdaq Halt Cross, and (2) to amend
Securities Exchange Act of 1934 Rule 4752(d)(2)(B) and Rule
pertaining to each request.
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 4754(b)(2)(B) to state that Open Eligible
The public portions of the Postal notice is hereby given that on April 18,
Service’s request(s) can be accessed via Interest and Close Eligible Interest,
2018, The Nasdaq Stock Market LLC respectively, are used in determining
the Commission’s website (http:// (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the the ‘‘imbalance’’ for purposes of those
www.prc.gov). Non-public portions of Securities and Exchange Commission rules.
the Postal Service’s request(s), if any, (‘‘Commission’’) the proposed rule
can be accessed through compliance change as described in Items I and II Excluding MPPOs and Midpoint Pegged
with the requirements of 39 CFR below, which Items have been prepared Orders From the Nasdaq Halt Cross
3007.40. by the Exchange. The Commission is An ‘‘MPPO’’ is defined in Rule
The Commission invites comments on publishing this notice to solicit 4702(b)(5)(A) as an Order Type with a
comments on the proposed rule change Non-Display Order Attribute that is
whether the Postal Service’s request(s)
from interested persons. priced at the midpoint between the
in the captioned docket(s) are consistent
with the policies of title 39. For I. Self-Regulatory Organization’s national best bid and offer (‘‘NBBO’’),
request(s) that the Postal Service states Statement of the Terms of Substance of and that will execute upon entry only in
concern market dominant product(s), the Proposed Rule Change circumstances where economically
applicable statutory and regulatory beneficial to the party entering the
The Exchange proposes to amend Order. Today, Rule 4702(b)(5)(C)
requirements include 39 U.S.C. 3622, 39 Rule 4702(b)(5) and Rule 4703(d) to provides that MPPOs are available
U.S.C. 3642, 39 CFR part 3010, and 39 prevent Midpoint Peg Post-Only Orders during Market Hours only, and may not
CFR part 3020, subpart B. For request(s) and Orders entered with a Midpoint participate in the Nasdaq Opening Cross
that the Postal Service states concern Pegging Order Attribute from conducted pursuant to Rule 4752 or the
competitive product(s), applicable participating in the Nasdaq Halt Cross, Nasdaq Closing Cross conducted
statutory and regulatory requirements and (2) to amend Rule 4752(d)(2)(B) and pursuant to Rule 4754.3 However,
include 39 U.S.C. 3632, 39 U.S.C. 3633, Rule 4754(b)(2)(B) to state that Open MPPOs are not similarly prohibited
39 U.S.C. 3642, 39 CFR part 3015, and Eligible Interest and Close Eligible from participating in the Nasdaq Halt
39 CFR part 3020, subpart B. Comment Interest, respectively, are used in Cross conducted pursuant to Rule
deadline(s) for each request appear in determining the ‘‘imbalance’’ for 4753—i.e., the process for determining
section II. purposes of those rules. the price at which Eligible Interest shall
The text of the proposed rule change be executed at the open of trading for a
II. Docketed Proceeding(s) is available on the Exchange’s website at halted security and for executing that
http://nasdaq.cchwallstreet.com, at the Eligible Interest.
1. Docket No(s).: CP2018–212; Filing principal office of the Exchange, and at
Title: Notice of United States Postal Similar to current behavior for the
the Commission’s Public Reference Nasdaq Opening Cross and the Nasdaq
Service of Filing a Functionally Room.
Equivalent Global Expedited Package Closing Cross, the Exchange believes
Services 9 Negotiated Service II. Self-Regulatory Organization’s that it would be beneficial for members
Agreement and Application for Non- Statement of the Purpose of, and and investors to prevent MPPOs from
Statutory Basis for, the Proposed Rule executing in the Nasdaq Halt Cross, as
Public Treatment of Materials Filed
amozie on DSK3GDR082PROD with NOTICES
Change these Orders are designed for regular
Under Seal; Filing Acceptance Date:
trading on the Exchange’s continuous
April 30, 2018; Filing Authority: 39 CFR In its filing with the Commission, the
market where there is an active market
3015.50; Public Representative: Exchange included statements
Christopher C. Mohr; Comments Due: concerning the purpose of and basis for 3 An MPPO entered prior to the beginning of
May 8, 2018. Market Hours will be rejected, and an MPPO
1 15 U.S.C. 78s(b)(1). remaining on the Nasdaq Book at 4:00 p.m. ET will
2 17 CFR 240.19b–4. be cancelled by the System. See Rule 4702(b)(5)(C).
VerDate Sep<11>2014 18:16 May 03, 2018 Jkt 244001 PO 00000 Frm 00168 Fmt 4703 Sfmt 4703 E:\FR\FM\04MYN1.SGM 04MYN1](https://thefederalregister.org/doc/83_FR_19934/page/1.svg)
![19850 Federal Register / Vol. 83, No. 87 / Friday, May 4, 2018 / Notices
III. Date of Effectiveness of the delay is consistent with the protection available for website viewing and
Proposed Rule Change and Timing for of investors and the public interest. printing in the Commission’s Public
Commission Action Accordingly, the Commission hereby Reference Room, 100 F Street NE,
Because the foregoing proposed rule waives the 30-day operative delay and Washington, DC 20549, on official
change does not: (i) Significantly affect designates the proposed rule change business days between the hours of
the protection of investors or the public operative upon filing.12 10:00 a.m. and 3:00 p.m. Copies of the
interest; (ii) impose any significant At any time within 60 days of the filing also will be available for
burden on competition; and (iii) become filing of the proposed rule change, the inspection and copying at the principal
operative for 30 days from the date on Commission summarily may office of the Exchange. All comments
which it was filed, or such shorter time temporarily suspend such rule change if received will be posted without change.
as the Commission may designate, it has it appears to the Commission that such Persons submitting comments are
become effective pursuant to Section action is necessary or appropriate in the cautioned that we do not redact or edit
19(b)(3)(A) of the Act 8 and Rule 19b– public interest, for the protection of personal identifying information from
4(f)(6) thereunder.9 investors, or otherwise in furtherance of comment submissions. You should
A proposed rule change filed the purposes of the Act. If the submit only information that you wish
pursuant to Rule 19b–4(f)(6) under the Commission takes such action, the to make available publicly. All
Act 10 normally does not become Commission shall institute proceedings submissions should refer to File
operative for 30 days after the date of its to determine whether the proposed rule Number SR–NASDAQ–2018–031 and
filing. However, Rule 19b–4(f)(6)(iii) 11 change should be approved or should be submitted on or before May
permits the Commission to designate a disapproved. 25, 2018.
shorter time if such action is consistent IV. Solicitation of Comments For the Commission, by the Division of
with the protection of investors and the Trading and Markets, pursuant to delegated
Interested persons are invited to authority.13
public interest. The Exchange has asked
submit written data, views, and
the Commission to waive the 30-day Eduardo A. Aleman,
arguments concerning the foregoing,
operative delay so that the proposed Assistant Secretary.
including whether the proposed rule
rule change may become operative upon [FR Doc. 2018–09448 Filed 5–3–18; 8:45 am]
change is consistent with the Act.
filing. Waiver of the operative delay BILLING CODE 8011–01–P
Comments may be submitted by any of
would allow the Exchange to prevent
the following methods:
MPPOs and Midpoint Pegged Orders
from participating in the Nasdaq Halt Electronic Comments SECURITIES AND EXCHANGE
Cross without delay. The Commission • Use the Commission’s internet COMMISSION
also notes that the proposal would comment form (http://www.sec.gov/ [Release No. 34–83134; File No. SR–NYSE–
ensure that MPPOs and Midpoint rules/sro.shtml); or 2018–17]
Pegged Orders do not participate in any • Send an email to rule-comments@
cross (i.e., Nasdaq Opening Cross, sec.gov. Please include File Number SR– Self-Regulatory Organizations; New
Nasdaq Halt Cross, and Nasdaq Closing NASDAQ–2018–031 on the subject line. York Stock Exchange LLC; Notice of
Cross). According to the Exchange, Filing and Immediate Effectiveness of
MPPOs and Midpoint Pegged Orders are Paper Comments
Proposed Rule Change Amending Rule
designed for regular trading on the • Send paper comments in triplicate 13
Exchange’s continuous market, and the to Secretary, Securities and Exchange
proposal would ensure that these orders Commission, 100 F Street NE, April 30, 2018.
behave in a manner consistent with Washington, DC 20549–1090. Pursuant to Section 19(b)(1) 1 of the
members’ expectations. Moreover, All submissions should refer to File Securities Exchange Act of 1934 (the
waiver of the operative delay would Number SR–NASDAQ–2018–031. This ‘‘Act’’) 2 and Rule 19b-–4 thereunder,3
allow the Exchange to immediately file number should be included on the notice is hereby given that on April 20,
correct its rules to reflect that Open subject line if email is used. To help the 2018, New York Stock Exchange LLC
Eligible Interest and Close Eligible Commission process and review your (‘‘NYSE’’ or the ‘‘Exchange’’) filed with
Interest (i.e., interest that is available to comments more efficiently, please use the Securities and Exchange
execute in the crosses if remaining on only one method. The Commission will Commission (the ‘‘Commission’’) the
the book at the time of the cross price post all comments on the Commission’s proposed rule change as described in
calculation) are included in tie-breakers internet website (http://www.sec.gov/ Items I and II below, which Items have
for the Nasdaq Opening Cross and rules/sro.shtml). Copies of the been prepared by the self-regulatory
Nasdaq Closing Cross price calculations, submission, all subsequent organization. The Commission is
respectively, thus reducing any amendments, all written statements publishing this notice to solicit
potential member confusion with respect to the proposed rule comments on the proposed rule change
surrounding the cross price change that are filed with the from interested persons.
calculations. The Commission believes Commission, and all written I. Self-Regulatory Organization’s
that waiver of the 30-day operative communications relating to the Statement of the Terms of Substance of
proposed rule change between the the Proposed Rule Change
8 15 U.S.C. 78s(b)(3)(A). Commission and any person, other than
9 17 CFR 240.19b–4(f)(6). As required under Rule The Exchange proposes to amend the
those that may be withheld from the
19b–4(f)(6)(iii), the Exchange provided the preamble to Rule 13 to provide that the
amozie on DSK3GDR082PROD with NOTICES
Commission with written notice of its intent to file public in accordance with the
definition of ‘‘retail’’ in subsection (f)(2)
the proposed rule change, along with a brief provisions of 5 U.S.C. 552, will be
description and the text of the proposed rule
be applicable to trading of UTP
change, at least five business days prior to the date 12 For purposes only of waiving the 30-day
13 17 CFR 200.30–3(a)(12).
of filing of the proposed rule change, or such operative delay, the Commission has also
shorter time as designated by the Commission. considered the proposed rule’s impact on
1 15 U.S.C.78s(b)(1).
10 17 CFR 240.19b–4(f)(6). 2 15 U.S.C. 78a.
efficiency, competition, and capital formation. See
11 17 CFR 240.19b–4(f)(6)(iii). 15 U.S.C. 78c(f). 3 17 CFR 240.19b–4.
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Document Created: 2018-11-02 09:52:51
Document Modified: 2018-11-02 09:52:51
| 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 | 83 FR 19847 |
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