Federal Register / Vol. 87, No. 19 / Friday, January 28, 2022 / Notices 4683 

15 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. 92466 

(July 22, 2021), 86 FR 40667. The comment letters 

received on the proposed rule change are available 

on the Commission’s website at: https://

www.sec.gov/comments/sr-nasdaq-2021-040/ 

srnasdaq2021040.htm. 

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

5See Securities Exchange Act Release No. 92905, 

86 FR 51390 (September 15, 2021). 

6 In Amendment No. 1, the Exchange modified 

the scenarios in which executions in the Extended 

Trading Close would be suspended, and made 

conforming and clarifying changes throughout the 

proposed rule change. Amendment No. 1 is 

available on the Commission’s website at: https:// 

www.sec.gov/comments/sr-nasdaq-2021-040/ 

srnasdaq2021040.htm. 

7 15 U.S.C. 78s(b)(2)(B). 

8See Securities Exchange Act Release No. 93428, 

86 FR 60318 (November 1, 2021). 

9See proposed Rule 4755(a)(5). 

10ETC Orders and ETC Eligible LOC Orders may 

only execute against other ETC Orders and ETC 

Eligible LOC Orders. See proposed Rules 

4702(b)(17)(A) and 4702(b)(12)(A). 

11See proposed Rule 4702(b)(17)(A). An ETC 

Order may be assigned a minimum quantity order 

attribute, and the minimum quantity condition may 

be satisfied only by execution against one or more 

orders, each of which must have a size that satisfies 

the minimum quantity condition. See proposed 

Rule 4702(b)(17)(B). See also Amendment No. 1 at 

13–14 n.18. If no orders in the ETC satisfy a 

minimum quantity condition for an ETC Order, 

then the ETC Order with a minimum quantity 

condition would rest on the Nasdaq book in time 

priority unless and until there is an order that can 

satisfy the minimum quantity condition to allow for 

execution of the ETC Order; if no such order is 

present in the ETC at its conclusion, then the ETC 

Order would cancel. See proposed Rule 

4702(b)(17)(B). Moreover, an ETC Order may be 

referred to as having a time-in-force of ‘‘ETC.’’ See 

proposed Rule 4703(a)(8). 

12The system would reject an ETC Order that is 

submitted prior to the commencement of the ETC. 

See proposed Rule 4702(b)(17)(A). In addition, the 

system would not accept an ETC Order entered on 

any day when insufficient interest exists in the 

system to conduct a Closing Cross for that security, 

or when the Exchange invokes contingency 

procedures due to a disruption that prevents the 

execution of the Closing Cross. See id. 

13See id. 

14See proposed Rule 4702(b)(12)(A). The 

Exchange also proposes to amend Rule 4702(b)(12) 

to describe the participation of LOC orders in the 

LULD closing cross. 

15See id. Post-only orders, midpoint peg postonly orders, supplemental orders, and market 

maker peg orders may not operate as ETC Eligible 

LOC Orders, and ETC Eligible LOC Orders would 

be rejected if they are assigned a pegging attribute. 

See Amendment No. 1 at 9 n.14. 

16See proposed Rule 4702(b)(12)(B). 

17See proposed Rule 4702(b)(12)(A). 

18As proposed, the ETC would not occur for a 

security on any day when insufficient interest exists 

in the Exchange system to conduct the Closing 

Continued 

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; 

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–GEMX–2022–02 and 

should be submitted on or before 

February 18, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01703 Filed 1–27–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94038; File No. SR– 

NASDAQ–2021–040] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Order 

Approving Proposed Rule Change, as 

Modified by Amendment No. 1, To 

Establish the ‘‘Extended Trading 

Close’’ and Related Order Types 

January 24, 2022. 

I. Introduction 

On July 12, 2021, The Nasdaq Stock 

Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) 

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 add Equity 4, Rule (‘‘Rule’’) 

4755 and amend Rules 4702 and 4703 

to establish the ‘‘Extended Trading 

Close,’’ as well as the ‘‘ETC Eligible 

LOC’’ and ‘‘Extended Trading Close’’ 

order types. The proposed rule change 

was published for comment in the 

Federal Register on July 28, 2021.3 On 

September 9, 2021, pursuant to Section 

19(b)(2) of the Act,4 the Commission 

designated a longer period within which 

to approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to disapprove the proposed 

rule change.5 On October 25, 2021, the 

Exchange filed Amendment No. 1 to the 

proposed rule change, which amended 

and superseded the proposed rule 

change as originally filed.6 On October 

26, 2021, the Commission published 

notice of Amendment No. 1 and 

instituted proceedings pursuant to 

Section 19(b)(2)(B) of the Act 7 to 

determine whether to approve or 

disapprove the proposed rule change, as 

modified by Amendment No. 1.8 This 

order approves the proposed rule 

change, as modified by Amendment No. 

1. 

II. Description of the Proposal 

The Exchange proposes to adopt the 

Extended Trading Close (‘‘ETC’’), which 

would be a process during which 

eligible orders in Nasdaq-listed 

securities may match and execute at the 

Nasdaq official closing price (‘‘NOCP’’), 

as determined by the Nasdaq closing 

cross or the LULD closing cross 

(together, the ‘‘Closing Cross’’), for a 

five-minute period immediately 

following the Closing Cross.9

As proposed, only ‘‘ETC Orders’’ and 

‘‘ETC Eligible LOC Orders’’ (together, 

‘‘ETC Eligible Orders’’) would be 

eligible to participate in the ETC.10 An 

ETC Order would be a new order type 

for Nasdaq-listed securities that may be 

executed only during the ETC and only 

at the NOCP as determined by the 

Closing Cross.11 An ETC Order may be 

entered, cancelled, or modified between 

the time when the ETC commences and 

ends.12 If an ETC Order is not fully 

executed at the conclusion of the ETC, 

then any unexecuted portion of the 

order would be cancelled.13 An ETC 

Eligible LOC Order would be a LOC 

order for a Nasdaq-listed security 

entered through RASH or FIX that did 

not fully execute during the Closing 

Cross, and would participate in the ETC 

if the NOCP, as determined by the 

Closing Cross, is at or within its limit 

price.14 A participant may choose to 

disable a LOC order from participating 

in the ETC, in which case the system 

would cancel any shares of the LOC 

order that remain unexecuted after the 

Closing Cross.15 In addition, if a 

participant enters a time-in-force that 

continues after the time of the Closing 

Cross for a LOC order (i.e., closing cross/ 

extended hours order), then such order 

would bypass the ETC.16 Any 

unexecuted portion of an ETC Eligible 

LOC Order may be cancelled or 

modified by the participant at any time 

during the ETC, and any unexecuted 

portion of an ETC Eligible LOC Order at 

the conclusion of the ETC would be 

cancelled.17

As proposed, the ETC would 

commence upon the conclusion of the 

Closing Cross and end at 4:05 p.m. (or 

1:05 p.m. on a day when the Exchange 

closes early).18 The system would match 


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Cross for that security or when the Exchange 

invokes contingency procedures due to a disruption 

that prevents the execution of the Closing Cross. 

See proposed Rule 4755(b). Moreover, the Exchange 

would cancel executions in a security that occur in 

the ETC if the Exchange nullifies the Closing Cross 

in that security pursuant to the rules governing 

clearly erroneous transactions. See id. The 

Exchange also states that if short sale orders in 

securities subject to Regulation SHO are permitted 

to execute in the Closing Cross pursuant to Rule 201 

of Regulation SHO, then the system would also 

permit short sale executions in such securities to 

occur in the ETC; whereas the system would reject 

short sale orders in securities if short sale orders in 

such securities were not permitted to execute in the 

Closing Cross. See Amendment No. 1 at 8 n.11. 

Moreover, the restrictions of Rule 201 of Regulation 

SHO will apply to the ETC to the extent that the 

current national best bid is being calculated, 

collected, and disseminated for securities. See id. 

19ETC Eligible LOC Orders would receive new 

timestamps upon entry into the ETC and be 

prioritized amongst each other and ETC Orders 

based on the time the system received each order 

into the ETC. See Amendment No. 1 at 9. 

Specifically, the system would submit ETC Eligible 

LOC Orders for participation in the ETC, and would 

assign them new timestamps, in random order. See 

id. at 9 n.15. Therefore, ETC Eligible LOC Orders 

may not necessarily enter the ETC with the same 

relative priority that they had prior to the ETC. See 

id. Moreover, due to the time required for the 

system to process ETC Eligible LOC Orders for 

participation in the ETC, it is possible that an ETC 

Eligible LOC Order would enter the ETC with a 

lower time priority than an ETC Order entered after 

the Closing Cross concludes. See id. 

20See proposed Rule 4755(b)(2). All ETC Eligible 

Orders executed in the ETC would be trade reported 

anonymously and disseminated via the 

consolidated tape. See proposed Rule 4755(b)(5). 

21See proposed Rule 4755(b)(4). 

22See proposed Rule 4755(b)(1). 

23ETC imbalance would mean the number of 

shares of buy or sell ETC Eligible Orders that have 

not been matched during the ETC. See proposed 

Rule 4755(a)(4). 

24See proposed Rule 4755(a)(8). 

25See proposed Rule 4755(a)(1) (defining ‘‘after 

hours trading’’). 

26See proposed Rule 4755(b)(3). 

27See id. 

28See id. 

29See id. 

30See Amendment No. 1 at 19. 

31 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

formation. See 15 U.S.C. 78c(f). 

32 15 U.S.C. 78f(b)(5). 33 15 U.S.C. 78f(b)(8). 34See letter from Mehmet Kinak, Global Head of 

Systematic Trading & Market Structure and 

Jonathan Siegel, Senior Legal Counsel—Legislative 

& Regulatory Affairs, T. Rowe Price, to Vanessa 

Countryman, Secretary, Commission, dated August 

18, 2021 (‘‘T. Rowe Letter’’). 35See id. at 1. 36See id. This commenter also distinguishes the 

ETC from off-exchange trading venues’ mechanisms 

that allow their participants to receive the NOCP, 

and states that these other mechanisms are prearranged matched trades or guaranteed close trades 

that (unlike the ETC) are received prior to the 

Closing Cross and the determination of the closing 

price. See id. at 2. This commenter also states that 

when a trade is sent to an off-exchange mechanism 

after the Closing Cross, it is generally a trade that 

is executed by a broker in a principal capacity, and 

these transactions tend to be ‘‘clean-up’’ trades for 

orders that did not complete in the auction or trades 

to facilitate other specific needs of a client. See id. 

The commenter believes that these existing cleanup and facilitation mechanisms generally work well 

and does not believe there is a void that the 

Exchange needs to fill in this regard. See id. 

and execute ETC Eligible Orders 

continuously throughout the ETC, in 

time priority order based on the time the 

system received each order into the 

ETC,19 and at the NOCP as determined 

by the Closing Cross.20 If fewer than all 

shares of ETC Eligible Orders are 

executed by the conclusion of the ETC, 

then the system would cancel any 

unexecuted portions of such orders.21

Also as proposed, beginning at 

4:00:05 p.m. (or 1:00:05 p.m. on a day 

when the Exchange closes early), the 

Exchange would disseminate by 

electronic means an ETC order 

imbalance indicator every 5 seconds 

until the ETC concludes.22 The ETC 

order imbalance indicator would 

disseminate the following information: 

(a) Symbol; (b) the number of shares of 

ETC Eligible Orders that have been 

matched and executed at the NOCP 

during the ETC, as of the time of 

dissemination of the ETC order 

imbalance indicator; (c) the size of any 

ETC imbalance 23 (exclusive of orders 

with minimum quantity instructions); 

and (d) the buy or sell direction of any 

ETC imbalance.24

Moreover, as proposed, the Exchange 

system would suspend execution of ETC 

Eligible Orders in a security whenever 

it detects: (i) An order in that same 

security resting on the Nasdaq 

continuous book in after-hours 

trading 25 with a bid (offer) price that is 

higher than (lower than) the NOCP for 

that security, as determined by the 

Closing Cross; or (ii) the after-hours 

trading last sale price, or the best afterhours trading bid (offer) price, of the 

security other than on the Nasdaq 

continuous book is either more than 

0.5% or $0.01 higher than (lower than) 

the NOCP for that security as 

determined by the Closing Cross, 

whichever is greater.26 The system 

would resume execution of ETC Eligible 

Orders in a security in scenario (i) if and 

when the system determines, during the 

ETC, that the Nasdaq continuous book 

in after-hours trading is clear of resting 

orders in that security with a bid (offer) 

price that is higher than (lower than) the 

NOCP for that security, as determined 

by the Closing Cross.27 The system 

would resume execution of ETC Eligible 

Orders in a security in scenario (ii) if 

and when the after-hours trading last 

sale price or the best after-hours trading 

bid (offer) price of the security (other 

than on the Nasdaq continuous book) 

returns to within the greater of the 0.5% 

or $0.01 thresholds during the ETC.28 If 

execution of ETC Eligible Orders 

remains suspended as of the conclusion 

of the ETC, then the system would 

cancel any remaining unexecuted ETC 

Eligible Orders in that security.29

The Exchange represents that it will 

surveil the ETC for any unfair or 

manipulative trading practices.30

III. Discussion and Commission 

Findings 

The Commission finds that the 

proposed rule change, as modified by 

Amendment No. 1, is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.31 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,32 which requires, 

among other things, that the rules of a 

national securities exchange be 

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 

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 that the rules are 

not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers; and Section 

6(b)(8) of the Act,33 which requires that 

the rules of a national securities 

exchange not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. The Commission 

believes that the ETC would provide an 

additional opportunity for Exchange 

participants to trade Nasdaq-listed 

securities at the NOCP on the Exchange, 

and would provide an alternative to the 

mechanisms currently available on 

other venues that allow customers to 

execute orders at the Closing Cross price 

after the Closing Cross concludes. 

The Commission received a comment 

letter opposing the proposal.34 This 

commenter states that the Exchange has 

not effectively identified the purpose, 

use case, or client demand for the 

ETC.35 This commenter also does not 

believe that the ETC would enhance the 

Closing Cross process, or improve price 

discovery or liquidity in the Closing 

Cross.36 Rather, this commenter believes 

that the ETC could detract from the 

Closing Cross because some market 

participants would withhold their 

interest from the Closing Cross and 


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37See id. at 1–2. 

38See id. at 2. This commenter also expresses the 

concern that Commission approval of the ETC 

might encourage others to offer similar functions 

that would likely further detract from participation 

and price discovery in the closing auction. See id. 

39See id. at 3. 

40See id. 

41See letter from Brett M. Kitt, Associate Vice 

President & Principal Associate General Counsel, 

Nasdaq, to Vanessa Countryman, Secretary, 

Commission, dated September 9, 2021 (‘‘Nasdaq 

Response Letter’’). 

42See id. at 1–2. 

43See id. at 2. The Exchange states that, to the 

extent that it assesses that the ETC has become too 

large relative to the Closing Cross, or that members 

are indeed utilizing the ETC as a regular substitute 

for the Closing Cross, then it will propose such 

actions as are necessary to mitigate any threat to the 

Closing Cross or its price discovery function. See 

id. at 3. 

44See id. at 2. 

45The Exchange also states that, for those 

participants that seek to execute large volumes of 

shares at the Closing Cross price, exclusive 

participation in the ETC is unlikely to meet their 

needs, as ETC-only orders will execute only to the 

extent that sufficient matching share volume exists 

in the ETC. See id. According to the Exchange, 

because it would disseminate ETC imbalance 

information only after the ETC commences, 

participants in the ETC would have less assurance 

about the outcome of their participation than when 

they participate in the Closing Cross, or in the 

Closing Cross and ETC together. See id. 46See id. 47See id. The Exchange also states that market 

forces should determine whether the market for this 

service is already saturated and whether there is 

new room for competition. See id. 

48See supra note 43. 

49See T. Rowe Letter at 3. 

50See id. 

51See Nasdaq Response Letter at 3. 

52See id. 

53See id. 

refrain from submitting orders until they 

know the NOCP.37 This, according to 

the commenter, would detract from the 

robustness and quality of the closing 

price.38 Moreover, this commenter 

states that the availability of information 

going into the closing auction becomes 

the principal driver of price discovery 

in the continuous market in the last five 

to ten minutes of trading.39 According to 

the commenter, if participants do not 

submit their true interest in hopes they 

could trade in greater size utilizing the 

ETC, the breadth and quality of market 

information could be affected and result 

in more uncertainty and volatility in 

continuous trading behavior leading 

into the close.40

In its response letter, the Exchange 

disagrees with the commenter’s 

concerns that the ETC would threaten 

the integrity of the Closing Cross.41 The 

Exchange reiterates that the ETC would 

compete with other venues that already 

offer mechanisms that enable their 

customers to execute orders at the 

Closing Cross price after the Closing 

Cross concludes.42 The Exchange also 

does not believe that the ETC would 

siphon orders away from the Closing 

Cross.43 According to the Exchange, the 

Closing Cross is robust, efficient, and 

affords its participants reasonable 

assurance that their orders will execute, 

and the published indicative price and 

order imbalance information prior to the 

commencement of the Closing Cross 

enable its participants to mitigate their 

risks of participating in the Closing 

Cross.44 The Exchange believes that the 

ETC should not significantly alter the 

behavior of participants for which 

execution assurance is important,45 and 

that the ETC could bolster participants’ 

willingness to participate in the Closing 

Cross because the ETC would provide 

an added opportunity for their LOC 

orders to execute at the Closing Cross 

price.46 The Exchange further states that 

it expects participants to use the ETC as 

a ‘‘clean-up’’ mechanism for executing 

orders that are not executed in the 

Closing Cross or to facilitate other 

specific client needs.47

The Commission believes that the 

ETC would provide Exchange 

participants an opportunity to trade 

Nasdaq-listed securities at the NOCP on 

the Exchange after the Closing Cross. 

Specifically, Exchange participants that 

submitted LOC orders for the Closing 

Cross but did not receive a full 

execution for those orders could choose 

to allow the remaining shares to 

participate in the ETC. In addition, 

Exchange participants that did not 

participate in the Closing Cross but 

want to trade at the NOCP could submit 

ETC Orders to participate in the ETC. 

The Commission further believes that 

the ETC would provide an alternative to 

the mechanisms currently available on 

other venues that allow customers to 

execute orders at the Closing Cross price 

after the Closing Cross concludes. 

With respect to the commenter’s 

concern that the ETC would cause 

Exchange participants to withhold their 

interest from the Closing Cross and 

negatively impact the Closing Cross 

process, the Commission believes that 

participants that currently seek to trade 

at the NOCP in the Closing Cross (and 

particularly those that seek to trade 

larger orders) are unlikely to 

significantly reduce their participation 

in the Closing Cross and rely instead on 

the ETC, because there is less assurance 

that their orders would receive 

executions in the ETC as compared to 

the Closing Cross. In particular, ETC 

Eligible Orders would trade only to the 

extent that there are available contraside ETC Eligible Orders, and while the 

Exchange would disseminate imbalance 

information for the ETC, unlike the 

Closing Cross, such imbalance 

information would not be disseminated 

before the commencement of the ETC. 

The Commission also notes that, in 

response to this concern expressed by 

the commenter, the Exchange 

represented that, if it assesses that the 

ETC has become too large relative to the 

Closing Cross, or that participants are 

indeed utilizing the ETC as a regular 

substitute for the Closing Cross, then it 

will propose such actions as are 

necessary to mitigate any threat to the 

Closing Cross or its price discovery 

function.48

The commenter also expresses 

concern that the ETC would allow 

sophisticated participants to engage in 

arbitrage by quickly identifying price 

differences between the Closing Cross 

price and the prevailing after-hours 

market price before other participants.49

According to the commenter, these 

sophisticated participants could use 

ETC-only order types and ETC 

imbalance information to 

opportunistically submit orders to 

engage with other participants’ ETC 

activity at a previously determined fixed 

price using the ETC and unwind risk in 

the after-market at prices that more 

accurately reflect the current value of 

the security.50

In its response letter, the Exchange 

states that it does not share the 

commenter’s concerns regarding 

arbitrage, and states that any risk that 

ETC participants would face harm from 

arbitrageurs is likely to be considerably 

less than the risks that market 

participants presently face when they 

trade after-hours.51 The Exchange also 

states that because it would suspend 

ETC executions if significant deviations 

emerge between the Closing Cross price 

and the after-hours market price of a 

security, this should limit the instances 

in which egregious arbitrage occurs.52

Finally, the Exchange reiterates that 

participation in the ETC is voluntary, 

and therefore any participant that is 

concerned about arbitrageurs is free to 

not participate in the ETC or cancel its 

orders in the ETC.53

In Amendment No. 1, the Exchange 

amended the proposal such that the 

Exchange would suspend execution of 

ETC Eligible Orders in a security 

whenever it detects an order in that 

security resting on the Nasdaq 

continuous book in after-hours trading 

with a bid (offer) price that is higher 

than (lower than) the NOCP for that 

security. The Exchange would resume 

executions of ETC Eligible Orders in 

that security if and when the system 

determines, during the ETC, that the 

Nasdaq continuous book in after-hours 


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54The Commission notes that no additional 

comment letters were received after the Exchange 

filed Amendment No. 1. 

55See supra note 30 and accompanying text. 

56 15 U.S.C. 78s(b)(2). 

57 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. 93928 

(January 7, 2022) (SR–FINRA–2021–034). 

4FINRA operates Web CRD, the central licensing 

and registration system for the U.S. securities 

industry. FINRA uses Web CRD to maintain the 

qualification, employment and disciplinary 

histories of registered associated persons of brokerdealers. 

5See note 3 above. On September 21, 2021, the 

SEC approved amendments to FINRA Rules 1210 

(Registration Requirements) and 1240 (Continuing 

Education Requirements) to, among other things, 

require registered persons to complete the 

Regulatory Element of CE annually by December 31 

of each year, rather than every three years, and to 

complete Regulatory Element content for each 

representative or principal registration category that 

they hold. See Securities Exchange Act Release No. 

93097 (September 21, 2021), 86 FR 53358 

(September 27, 2021) (Order Approving File No. 

SR–FINRA–2021–015). The Regulatory Element is 

administered by FINRA and focuses on regulatory 

requirements and industry standards. The proposed 

rule change also included amendments to the Firm 

trading is clear of resting orders in that 

security with a bid (offer) price that is 

higher than (lower than) the NOCP. The 

Commission believes that this 

amendment responds to the 

commenter’s concerns regarding the 

ability of some participants to take 

advantage of the differences between the 

NOCP and the Exchange’s after-hours 

market price.54 The Commission also 

believes that suspending execution of 

ETC Eligible Orders in a security when 

an order in the same security that is 

priced better than the NOCP is resting 

on the Nasdaq continuous book would 

help promote price priority on the 

Exchange. 

As described above, the Exchange 

would also suspend execution of ETC 

Eligible Orders in a security whenever 

the after-hours trading last sale price, or 

the best after-hours trading bid (offer) 

price, of the security (other than on the 

Nasdaq continuous book) is more than 

0.5% or $0.01 higher than (lower than) 

the NOCP for that security, whichever is 

greater. The Exchange would resume 

executions of ETC Eligible Orders in 

this scenario if and when the after-hours 

trading last sale price or the best afterhours trading bid (offer) price of the 

security (other than on the Nasdaq 

continuous book) returns to within the 

greater of the 0.5% or $0.01 thresholds 

during the ETC. The Commission 

believes that these price thresholds 

should help to ensure additional price 

protection for the ETC as compared to 

regular after-hours trading, because 

regular after-hours trading is not 

suspended in response to price 

deviations between the Exchange and 

away markets. 

Finally, the Commission notes that 

participation in the ETC is voluntary, 

and those participants that are 

concerned about arbitrageurs may 

cancel their unexecuted ETC Eligible 

Orders or elect to not participate in the 

ETC. As described above, the Exchange 

has also represented that it will surveil 

the ETC for any unfair or manipulative 

trading practices.55

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,56 that the 

proposed rule change (SR–NASDAQ– 

2021–040), as modified by Amendment 

No. 1 be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.57

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–01709 Filed 1–27–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94042; File No. SR–ISE– 

2022–01] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend References to 

FINRA Continuing Education Fees 

January 24, 2022. 

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 January 

11, 2022, Nasdaq ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, 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 

ISE’s Pricing Schedule at Options 7, 

Section 9, Legal & Regulatory, to reflect 

adjustments to FINRA Continuing 

Education Fees. 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated the new Maintaining 

Qualifications Program (‘‘MQP’’) Fee, 

elimination of the $100 Continuing 

Education Session Fee, and technical 

amendments to become operative on 

January 31, 2022. Additionally, the 

Exchange designates an $18 Continuing 

Education Regulatory Element Session 

Fee to become operative on January 1, 

2023.3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/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 

This proposal amends ISE’s Pricing 

Schedule at Options 7, Section 9, Legal 

& Regulatory, to reflect adjustments to 

FINRA Continuing Education Fees.4 The 

FINRA fees are collected and retained 

by FINRA via Web CRD for the 

registration of employees of ISE 

Members that are not FINRA members 

(‘‘Non-FINRA members’’). The Exchange 

is merely listing these fees on its Pricing 

Schedule. The Exchange does not 

collect or retain these fees. 

Today, ISE Options 7, Section 9E, 

provides a list of FINRA Web CRD Fees, 

Fingerprint Processing Fees, and 

Continuing Education Fees. The 

Exchange proposes to amend the 

Continuing Education Fees within 

Options 7, Section 9E on behalf of the 

Exchange. The fees listed within 

Options 7, Section 9E reflect fees set by 

FINRA. 

Specifically, the Exchange proposes to 

decrease the $55 Continuing Education 

Web-based Fee to $18. This amendment 

is made in accordance with a recent 

FINRA rule change to adjust to its fees.5


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