81154 Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 

20 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 96930, 

Investment Advisers Act Release No. 6239 

(February 15, 2023), 88 FR 13872 (March 6, 2023) 

(‘‘T+1 Adopting Release’’). 

4See supra note 3. 

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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–Phlx–2023–47 and should be 

submitted on or before December 12, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25657 Filed 11–20–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98954; File No. SR– 

NASDAQ–2023–046] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Shorten 

the Standard Settlement Cycle 

November 15, 2023. 

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 November 

13, 2023, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Nasdaq Rules 11140 (Transactions in 

Securities ‘‘Ex-Dividend,’’ ‘‘Ex-Rights’’ 

or ‘‘Ex-Warrants’’), 11150 (Transactions 

‘‘Ex-Interest’’ in Bonds Which Are Dealt 

in ‘‘Flat’’), 11210 (Sent by Each Party), 

11320 (Dates of Delivery), and 11620 

(Computation of Interest), to conform 

them to the Commission’s amendment 

to Rule 15c6–1(a) of the Act 3 to shorten 

the standard settlement cycle for most 

broker-dealer transactions from two 

business days after the trade date 

(‘‘T+2’’) to one business days after the 

trade date (‘‘T+1’’). 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules, 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 

Effective May 5, 2023, the 

Commission adopted rule amendments 

to shorten the standard settlement cycle 

for most broker-dealer transactions from 

T+2 to T+1.4 In light of the recently 

adopted rule amendments to Rule 15c6– 

1(a) of the Act to require standard 

settlement no later than T+1, Nasdaq 

proposes to amend its rules pertaining 

to securities settlement by, among other 

things, amending the definition of 

‘‘standard’’ settlement as occurring on 

T+1. 

Specifically, Nasdaq proposes to 

amend the following Rules: 11140 

(Transactions in Securities ‘‘ExDividend,’’ ‘‘Ex-Rights’’ or ‘‘ExWarrants’’), 11150 (Transactions ‘‘ExInterest’’ in Bonds Which Are Dealt in 

‘‘Flat’’), 11210 (Sent by Each Party), 

11320 (Dates of Delivery), and 11620 

(Computation of Interest). The details of 

the proposed rule changes are described 

below. 

Nasdaq Rule 11140 

Rule 11140(b)(1) currently provides 

that for dividends or distributions, and 

the issuance or distribution of warrants, 

that are less than 25 percent of the value 

of the subject security, if definitive 

information is received sufficiently in 

advance of the record date, the date 

designated as the ‘‘ex-dividend date’’ 

shall be the first business day preceding 

the record date if the record date falls 

on a business day, or the second 

business day preceding the record date 

if the record date falls on a day 

designated by Nasdaq Regulation as a 

non-delivery date. Nasdaq proposes to 

amend Rule 11140(b)(1) to shorten the 

time frames by one business day. With 

this change the ex-dividend date would 

be the same business day as the record 

date if the record date falls on a 

business day, or the first business day 

preceding the record date if the record 

date falls on a day designated by Nasdaq 

Regulation as a non-delivery date. 

Rule 11150 

Rule 11150(a) currently prescribes the 

manner for establishing ‘‘ex-interest 

dates’’ for transactions in bonds or other 

similar evidence of indebtedness which 

are traded ‘‘flat.’’ Such transactions are 

‘‘ex-interest’’ on the first business day 

preceding the record date if the record 

date falls on a business day, on the 

second business day preceding the 

record date if the record date falls on a 

day other than a business day, or on the 

third business day preceding the date on 

which an interest payment is to be made 

if no record date has been fixed. Nasdaq 

proposes to amend Rule 11150(a) to 

shorten the time frames by one business 

day. 

Rule 11210 

Paragraphs (c) and (d) of Rule 11210 

set forth the ‘‘Don’t Know’’ (‘‘DK’’) 

voluntary procedures for using ‘‘DK 

Notices’’ or other forms of notices, 

respectively. When a party to a 

transaction sends a comparison or 

confirmation of a trade, but does not 

receive a comparison or confirmation or 

a signed DK, from the contra-member by 

the close of one business day following 

the trade date of the transaction, the 

confirming member shall send a DK 

Notice to the contra-member. Thereafter, 

the contra-member has two business 


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Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 81155 

5See supra note 3. 

6See supra note 3. Transactions with a trade date 

of Friday, May 24, 2024 would settle on 

Wednesday, May 29, 2024 because these 

transactions occurred before the rule was effective 

and continue to settle two days after the trade date. 

Additionally, transactions with a trade date of 

Tuesday, May 28, 2024 would also settle on 

Wednesday, May 29, 2024 because these 

transactions occurred when the T + 1 rule was 

effective and would settle one day after the trade 

date. Of note, May 27, 2024 is Memorial Day and 

not a business day counted for purposes of 

settlement. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9See supra note 3. 

days after receipt of the confirming 

member’s notice to either confirm or 

‘‘DK’’ the transaction. 

Nasdaq proposes to amend paragraphs 

(c) and (d) of Rule 11210 to provide that 

the ‘‘DK’’ procedures may be used by 

the confirming member if it does not 

receive a comparison or confirmation or 

signed ‘‘DK’’ from the contra-member by 

the close of the business day of the trade 

date of the transaction, rather than the 

current time frame of one day after the 

trade date. In addition, Nasdaq proposes 

to amend paragraphs (c)(2)(A), (c)(3), 

and (d)(5) of Rule 11210 to adjust the 

time in which a contra-member has to 

respond to a ‘‘DK Notice’’ (or similar 

notice) from two business days after the 

contra-member’s receipt of the notice to 

one business day after the contramember’s receipt of the notice. 

Rule 11320 

Rule 11320 currently prescribes 

delivery dates for various transactions. 

Currently, paragraph (b) states that for a 

‘‘regular way’’ transaction, delivery 

must be made on, but not before, the 

second business day after the date of the 

transaction. Nasdaq proposes to amend 

Rule 11320(b) to change the reference 

from the second business day to the first 

business day following the date of the 

transaction. Currently, paragraph (c) 

provides that in a ‘‘seller’s option’’ 

transaction, delivery may be made by 

the seller on any business day after the 

second business day following the date 

of the transaction. Nasdaq proposes to 

amend Rule 11320(c) to change the 

reference from the second business day 

to the first business day following the 

date of the transaction and prior to the 

expiration of the option. 

Rule 11620 

In the settlement of contracts in 

interest-paying securities other than for 

cash, Rule 11620(a) currently requires 

the calculation of interest at the rate 

specified in the security up to but not 

including the second business day after 

the date of the transaction. The 

proposed amendment would shorten the 

time frame to the first business day 

following the date of the transaction. 

Implementation 

The operative date of this proposed 

rule change will be Tuesday, May 28, 

2024, which is the compliance date 

specified in the Commission’s 

amendment to Rule 15c6–1(a) of the 

Act 5 to require standard settlement no 

later than T+1.6 With the 

implementation of the T+1 settlement 

cycle, the ex-dividend date for ‘‘normal’’ 

distributions pursuant to Rule 

11140(b)(1) will be the same business 

day as the record date. Accordingly, 

Nasdaq proposes to interpret Rule 

11140(b)(1) so that the first record date 

to which this new ex-dividend date 

rationale will be applied will be 

Wednesday, May 29, 2024. During the 

implementation of the T+1 settlement 

cycle, the ‘‘regular’’ ex-dividend dates 

will be as follows: 

Record Date May 24, 2024—Ex date May 

23, 2024 

Record Date May 28, 2024—Ex date May 

24, 2024 

Record Date May 29, 2024—Ex date May 

29, 2024 * 

* May 27, 2024 is Memorial Day and 

not a business day. 

By way of explanation, a record date 

of Friday, May 24, 2024 would be a date 

prior to the effective date of the adopted 

T + 1 rules. Current Rule 1140(b) [sic] 

would apply to this record date, and, 

therefore, the ‘‘ex-dividend date’’ would 

be the first business day preceding the 

record date or Thursday, May 23, 2024. 

Monday, May 27, 2024 is Memorial Day 

is a federal holiday and not a business 

day; there would be no record date on 

a holiday. As noted above, Nasdaq 

proposes to interpret Rule 11140(b)(1) 

so that the first record date to which this 

new ex-dividend date rationale will be 

applied would be Wednesday, May 29, 

2024. Therefore, a record date of 

Tuesday, May 28, 2024 would fall under 

current Rule 1140(b) [sic] and the first 

business day preceding the record date 

would be Friday, May 24, 2024. Finally, 

as noted above, Wednesday, May 29, 

2024 is the first record date pursuant to 

the new T + 1 rules, therefore, proposed 

Rule 1140(b) [sic] applies to this date 

and the ‘‘ex-dividend date’’ would be 

the same business day as the record date 

(May, 29, 2024). 

The ex-dividend date for ‘‘large’’ 

distributions under Rule 11140(b)(2) is 

not being amended with the adoption of 

the T+1 settlement cycle. Therefore, the 

ex-dividend date for large’’ distributions 

under Rule 11140(b)(2) will continue to 

be the first business day following the 

payable date as provided in the current 

rule text. In order to ensure that no 

securities will be ex-dividend on May 

28, 2024 for purposes of ‘‘large’’ 

distributions, Nasdaq similarly proposes 

to interpret Rule 11140(b) so that, if an 

issuer sets May 28, 2024 as the payment 

date for a large distribution, the exdividend date would be May 29, 2024, 

not May 28, 2024. Nasdaq will issue an 

Issuer Alert addressing the application 

of the T+1 implementation date on Rule 

11140(b). 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,7 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,8

in particular, in that it is designed 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, 

and, in general, to protect investors and 

the public interest. The proposed rule 

change seeks to conform Nasdaq’s rules 

with the adopted rule amendments to 

shorten the standard settlement cycle 

for most broker-dealer transactions from 

T+2 to T+1.9 The proposal is consistent 

with the Commission’s amendment to 

Rule 15c6–1(a) of the Act to require 

standard settlement no later than T+1. 

This proposal will provide Nasdaq 

members with regulatory certainty as to 

the settlement cycle that will be utilized 

to settle transactions executed on the 

Exchange. 

As noted herein, Nasdaq will 

announce the operative date of the 

proposed rule change in an Equity 

Regulatory Alert, which date would 

correspond with the industry-led 

transition to a T+1 standard settlement, 

and the compliance date of the 

Commission’s amendment to Rule 

15c6–1(a) of the Act to require standard 

settlement no later than T+1. 

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. The proposal 

amends Nasdaq’s rules pertaining to 

securities settlement and is intended to 

facilitate the implementation of the 

industry-led transition to a T+1 

settlement cycle. The shortened 

settlement cycle will apply uniformly to 

all contracts for the purchase or sale of 

a security (other than exempted 


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81156 Federal Register / Vol. 88, No. 223 / Tuesday, November 21, 2023 / Notices 

10Of note, pursuant to (a) and (d) of Rule 15c6– 

1, the parties may expressly agree to a different 

settlement date at the time of the transaction. 

11See supra note 3. 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 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. 14 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 98563 

(Sept. 27, 2023), 88 FR 68214. The Commission has 

received no comments on the proposal. 

4 15 U.S.C. 78s(b)(2). 

securities) that provide for payment of 

funds and delivery of securities that 

occur on Nasdaq or other self-regulatory 

organizations.10 Moreover, the proposal 

is consistent with the Commission’s 

amendment to Rule 15c6–1(a) of the Act 

to require standard settlement no later 

than T+1. Accordingly, Nasdaq believes 

that the proposed amendments do not 

impose any intra-market or inter-market 

burdens on competition because the 

amendments conform Nasdaq’s rules 

with the adopted rule amendments to 

shorten the standard settlement cycle 

for most broker-dealer transactions from 

T+2 to T+1.11 Specifically, the proposed 

amendments include changes to rules 

that specifically establish the settlement 

cycle as well as rules that establish time 

frames based on settlement dates, 

including for certain post-settlement 

rights and obligations. 

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 12 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.13

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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NASDAQ–2023–046 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–2023–046. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–NASDAQ–2023–046 and should be 

submitted on or before December 12, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–25667 Filed 11–20–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98948; File No. SR– 

NASDAQ–2023–035] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change To List and Trade Shares 

of the Hashdex Nasdaq Ethereum ETF 

Under Nasdaq Rule 5711(i) 

November 15, 2023. 

On September 20, 2023, The Nasdaq 

Stock Market LLC (‘‘Nasdaq’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

to Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to list and trade shares of the 

Hashdex Nasdaq Ethereum ETF under 

Nasdaq Rule 5711(i) (Trust Units). The 

proposed rule change was published for 

comment in the Federal Register on 

October 3, 2023.3

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is November 17, 

2023. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change 

and the issues raised therein. 

Accordingly, the Commission, pursuant 


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