Federal Register / Vol. 86, No. 142 / Wednesday, July 28, 2021 / Notices 40667 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3References herein to Nasdaq Rules in the 4000 

Series shall mean Rules in Nasdaq Equity 4. 

4The ‘‘Nasdaq Closing Cross’’ refers to Nasdaq’s 

process for determining the price at which it will 

execute orders at the close and for executing those 

orders, as set forth in Rule 4754. 

5The ‘‘LULD Closing Cross’’ refers to Nasdaq’s 

modified process for determining the price at which 

it will execute orders at the close, following a 

Trading Pause, as set forth in Rule 4120(a), which 

exists at or after 3:50 p.m. and before 4:00 p.m., as 

well as the process for executing those orders, as 

set forth in Rule 4754(b)(6). 

believe the proposed rule change 

imposes any burden on competition not 

necessary or appropriate in furtherance 

of the purpose of the Act. 

(C) Clearing Agency’s Statement on 

Comments on the Proposed Rule 

Change Received From Members, 

Participants or Others 

Written comments relating to the 

proposed rule change have not been 

solicited or received. ICC will notify the 

Commission of any written comments 

received by ICC. 

III. Date of Effectiveness of the 

Proposed Rule Change for Commission 

Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

ICC–2021–016 on the subject line. 

Paper Comments 

Send paper comments in triplicate to 

Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549. 

All submissions should refer to File 

Number SR–ICC–2021–016. 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 such 

filings will also be available for 

inspection and copying at the principal 

office of ICE Clear Credit and on ICE 

Clear Credit’s website at https://

www.theice.com/clear-credit/regulation. 

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–ICC–2021–016 and 

should be submitted on or before 

August 18, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15993 Filed 7–27–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92466; File No. SR– 

NASDAQ–2021–040] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Establish the ‘‘Extended Trading 

Close’’ and a New ‘‘Extended Trading 

Close’’ Order Type 

July 22, 2021. 

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 July 12, 

2021, 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 

Equity 4, Rule 4702 and Rule 4703, and 

add Rule 4755, to establish the 

‘‘Extended Trading Close’’ and new 

‘‘ETC Eligible LOC’’ and ‘‘Extended 

Trading Close’’ Order Types, as is 

described further below. 

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 

The Exchange proposes to adopt new 

Equity 4, Rule 4755 3 to establish the 

‘‘Extended Trading Close.’’ The 

Extended Trading Close will allow 

Participants an additional opportunity 

to access liquidity in Nasdaq-listed 

securities at the Nasdaq Official Closing 

Price for a limited period of time after 

the Nasdaq Closing Cross 4 or the LULD 

Closing Cross,5 (collectively, the 

‘‘Closing Cross’’) concludes. The 

Exchange also proposes to amend Rule 

4702 and Rule 4703 to establish new 

‘‘ETC Eligible LOC’’ and ‘‘Extended 

Trading Close’’ Order Types that may 


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6As discussed below, the Exchange proposes to 

define, in Rule 4755, an ‘‘ETC Eligible Order(s)’’ as 

an ‘‘ETC Order(s)’’ or an ‘‘ETC Eligible LOC 

Order(s).’’ 

7The starting times for the Extended Trading 

Close are not exact insofar as the Closing Cross is 

not instantaneous and the System requires a brief 

period of time to complete the Closing Cross for 

each security. Typically, the processing of the 

Closing Cross begins at 4:00 p.m. ET, or at 1:00 p.m. 

ET on days when Nasdaq closes early. 

8See Rule 4754(b)(7). 

9Only orders in Nasdaq-listed securities will be 

eligible to participate in the Extended Trading 

Close. The Exchange proposes to exclude securities 

listed on other primary listing markets. As a 

primary listing market, Nasdaq is committed to 

investing in and enhancing the Closing Cross 

process for Nasdaq-listed issuers, their 

shareholders, investors, and all Participants 

involved in the robust price discovery and liquidity 

process that the Closing Cross serves. Moreover, 

Nasdaq notes that the vast majority of Participants 

looking to trade at the closing price participate in 

the primary listing market’s closing auction and do 

not route orders to non-primary market listing 

destinations. 

10For purposes of this proposal, the term ‘‘After 

Hours Trading’’ refers to trading in a Nasdaq-listed 

security that commences immediately following the 

conclusion of the Nasdaq Closing Cross or the 

LULD Closing Cross, during Post-Market Hours, as 

that term is defined in Equity 1, Section 1(a)(9). 

11 If short sale orders in securities subject to 

Regulation SHO are permitted to execute in the 

Closing Cross, then the System will also permit 

short sale executions in such securities to occur in 

the Extended Trading Close. Conversely, the System 

will reject short sale orders in securities if short sale 

orders in such securities were not permitted to 

execute in the Closing Cross. 

12By default, all LOC Orders in Nasdaq-listed 

securities will be set to participate in the Extended 

Trading Close in the event that the LOC Orders are 

not fully executed during the Closing Cross. 

However, a Participant may opt to exclude its LOC 

Orders from participating in the Extended Trading 

Close. When ETC eligibility is disabled, the System 

will simply cancel LOC Orders in Nasdaq-listed 

securities that remain unexecuted after the Closing 

Cross occurs. Also, if Participants select a time-inforce for their LOC Orders in Nasdaq-listed 

securities that continues after the Closing Cross 

occurs, then if such LOC Orders remain unexecuted 

after the Closing Cross, the Exchange will cause the 

remaining unexecuted shares to bypass the 

Extended Trading Close and participate in After 

Hours Trading. 

13A Post-Only Order, Midpoint Peg Post-Only 

Order, Supplemental Order, or Market Maker Peg 

Order may not operate as an ETC Eligible LOC 

Order, insofar as their respective underlying order 

characteristics are incompatible with participation 

in the ETC. An ETC Eligible LOC Order will be 

rejected if it has been assigned a Pegging Attribute 

due to the fact that the Pegging Order Attribute 

operates only during Market Hours. 

participate in the Extended Trading 

Close. 

Extended Trading Close 

As defined in proposed new Rule 

4755(a)(5), the Extended Trading Close 

will be the process, described in new 

Rule 4755, during which ETC Eligible 

Orders 6 may match and execute at the 

Nasdaq Official Closing Price, as 

determined by the Closing Cross, for a 

five minute period immediately 

following the Closing Cross. 

The Extended Trading Close will 

commence immediately upon the 

conclusion of the Closing Cross and it 

will continue until 4:05 p.m. ET on a 

regular trading day, or 1:05 p.m. ET on 

a day when Nasdaq closes early.7 The 

Extended Trading Close will not occur 

for a security on any day when 

insufficient interest exists in the System 

to conduct the Closing Cross for that 

security or when the Exchange invokes 

contingency procedures due to a 

disruption that prevents execution of 

the Closing Cross.8 Likewise, the 

Exchange will cancel executions in a 

security that occur in the Extended 

Trading Close to the extent that the 

Exchange nullifies the Closing Cross in 

that security pursuant to the rules 

governing clearly erroneous 

transactions, as set forth in Rule 11890. 

On a continuous basis during the 

Extended Trading Close, the System 

will match orders in Nasdaq-listed 

securities 9 and execute them at the 

Nasdaq Official Closing price (as 

determined by the Closing Cross), 

unless the last sale price during After 

Hours Trading,10 or the best After Hours 

Trading bid (offer) price, of a Nasdaqlisted security subject to an order 

participating in the Extended Trading 

Close is higher (lower) than the Nasdaq 

Official Closing Price by the greater of 

0.5% or $0.01, in which case the System 

will suspend executions of matched 

orders in the Extended Trading Close for 

that security unless or until the After 

Hours Trading last sale prices or best 

After Hours Trading bid (offer) price of 

the security returns to within the greater 

of the 0.5%/$0.01 thresholds prior to 

the conclusion of the Extended Trading 

Close (at which point executions would 

resume). This limitation will help to 

mitigate the risk that orders in Nasdaqlisted securities which participate in the 

Extended Trading Close will execute at 

a price that is no longer reflective of the 

value of the security. (From time to 

time, Nasdaq management may modify 

the 0.5%/$0.01 thresholds described 

above upon prior notice to market 

Participants.) Furthermore, the 

Exchange proposes that at any time 

during the Extended Trading Close, 

Participants are free to modify or cancel 

their ETC Eligible Orders if the 

thresholds that the Exchange proposes 

do not meet their needs or if they wish 

to do so based on movements in After 

Hours Trading prices. For example, after 

the Closing Cross occurs, an issuer may 

release material news about a company 

that causes its After Hours Trading price 

for its stock to vary significantly from 

the Closing Cross Price. In that instance, 

a Participant may no longer wish to 

participate in the Extended Trading 

Close and receive the Nasdaq Official 

Closing price for an ETC Eligible Order 

in that stock; accordingly, the 

Participant may cancel its ETC Eligible 

Order, to the extent that the Order has 

not already been fully matched and 

executed, and place an order for the 

stock in the After Hours market. 

Nonetheless, as stated previously, a 

significant move in the price of a 

security in After Hours Trading will 

result in suspension of the Extended 

Trading Close. 

The Exchange proposes to cancel any 

portion of an ETC Eligible Order that 

remains unexecuted at the conclusion of 

the Extended Trading Close, or for 

which the System has suspended 

execution, due to price deviation, where 

that suspension remains active as of the 

conclusion of the Extended Trading 

Close. 

All ETC Eligible Orders executed in 

the Extended Trading Close will be 

trade reported anonymously and 

disseminated via the consolidated tape. 

Order Types Eligible To Participate in 

the Extended Trading Close 

The Exchange proposes to allow two 

Order Types to participate in the 

Extended Trading Close: (1) Limit-onClose (‘‘LOC’’) Orders; and (2) Extended 

Trading Close (‘‘ETC’’) Orders.11

ETC Eligible LOC Orders 

First, the Exchange proposes to 

amend Rule 4702(b)(12) to provide for 

LOC Orders in Nasdaq-listed securities 

to participate in the Extended Trading 

Close to the extent that such LOC 

Orders are entered through RASH or FIX 

and remain unexecuted, in whole or 

part, in the Closing Cross (an ‘‘ETC 

Eligible LOC Order’’).12 The System will 

not include LOC Orders in the Extended 

Trading Close that Participants did not 

duly submit prior to the Nasdaq Closing 

Cross or LULD Closing Cross, in 

accordance with Rule 4702(b)(12)(A), or 

which are unexecutable in the Extended 

Trading Close due to the fact that they 

have limit prices that fall outside of the 

Nasdaq Official Closing Price.13

ETC Eligible LOC Orders will match 

and execute in the Extended Trading 

Close in time priority against other ETC 

Eligible LOC Orders and ETC Orders, 

with ETC Eligible LOC Orders receiving 

new timestamps upon entry into the 

Extended Trading Close and prioritized 

amongst each other and ETC orders 

based on the time the system received 

each order into the Extended Trading 

Close. For example, assume that the 

Closing Cross Price for a security is 

$10.00 per share and that an ETC 


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14On any day when no Extended Trading Close 

occurs, i.e., if there is insufficient interest to 

conduct a Closing Cross for a security or if the 

Exchange invokes contingency procedures, the 

System will not accept entry of an ETC Order. 

15The Exchange proposes to amend Rule 4703(a) 

to add a new time-in-force applicable to ETC 

Orders. A time-in-force of ‘‘ETC’’ will mean that an 

order is designated to activate upon commencement 

of the Extended Trading Close and deactivate upon 

the conclusion of the Extended Trading Close. 

16Rule 4703(e) provides for two types of 

Minimum Quantity Attributes—one that provides 

for the minimum quantity requirement to be 

satisfied by a single order, and a second that allows 

for it to be satisfied by aggregating multiple orders. 

Only the first type of Minimum Quantity Attributes 

may be used with an ETC Order. Thus, a Participant 

that enters an ETC Order with a minimum quantity 

requirement of 500 shares may specify that its order 

match and execute in the ETC against another ETC 

Eligible Order of 500 shares but not several ETC 

Eligible Orders of smaller sizes that, in aggregate, 

add up to 500 shares. 

17The Exchange proposes to exclude ETC Eligible 

Orders with Minimum Quantity instructions from 

this calculation of the size of the ETC Imbalance 

because the size of such Orders may be misleading 

to Participants, given that such Orders will not 

execute if the Minimum Quantity instruction is not 

satisfied. 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(5). 

Eligible LOC Order to buy 100 shares 

(Order 1) remains unexecuted as of the 

conclusion of the Closing Cross, such 

that it will be re-entered for 

participation in the ETC, receiving a 

new timestamp. When the ETC 

commences, the NBBO is $9.95 x 

$10.05. After the ETC begins, a second 

Participant enters Order 2, an ETC 

Order to buy 2,000 shares, with a 

minimum quantity condition of 500 

shares. A third Participant then enters 

Order 3, an ETC Order to buy 500 

shares. A fourth Participant then enters 

Order 4, an ETC Order to sell 200 

shares. Order 4 will then execute against 

Orders 1 and 3 for 200 shares at $10.00 

per share (Order 1 is fully executed and 

Order 3 has 400 shares remaining). 

Order 4 does not execute against Order 

2 because Order 4 does not satisfy the 

minimum quantity condition of Order 2. 

A fifth Participant enters Order 5, which 

is an ETC Order to sell 500 shares. 

Order 5 will then execute against Order 

2 for 500 shares at $10.00 per share, as 

Order 5 satisfies the minimum quantity 

condition of Order 2. Finally, a sixth 

Participant enters Order 6, an ETC order 

to sell 3,000 shares, with a minimum 

quantity condition of 3,000 shares. 

Order 6 posts as no resting ETC Eligible 

LOC Orders or ETC Orders satisfies the 

Order’s minimum quantity condition. 

As discussed above, during the 

Extended Trading Close, ETC Eligible 

LOC Orders will continuously match 

against other ETC Eligible LOC Orders 

and ETC Orders and execute at the 

Nasdaq Official Closing price, as 

determined by the Closing Cross, except 

that the System will suspend executions 

of ETC Eligible LOC Orders whenever 

the After Hours Trading last sale price 

or the best After Hours Trading bid or 

offer of the Nasdaq-listed securities that 

are subject to the ETC Eligible LOC 

Orders deviate the greater of 0.5% or 

$0.01 from the Nasdaq Official Closing 

Prices for those securities. (From time to 

time, Nasdaq management may modify 

these thresholds upon notice to market 

Participants.) The System will resume 

executions during the Extended Trading 

Close if and when the After Hours 

Trading last sale price or the After 

Hours Trading best bid (offer) price of 

the Nasdaq-listed security returns to 

within these 0.5%/$0.01 thresholds (or 

within such other thresholds as Nasdaq 

management may determine, upon prior 

notice to market Participants). When the 

Extended Trading Close ends, the 

System will cancel any unexecuted 

shares of ETC Eligible LOC Orders as 

well as any shares of ETC Eligible LOC 

Orders for which executions remain 

suspended as of that time, due to price 

deviations. A Participant may modify or 

cancel an ETC Eligible LOC Order 

(unless already executed) at any time 

during the Extended Trading Close. 

ETC Orders 

In addition to ETC Eligible LOC 

Orders, Nasdaq proposes to introduce a 

new Order Type—the Extended Trading 

Close or ‘‘ETC’’ Order—that will be 

eligible for entry and execution 

exclusively during the Extended 

Trading Close.14 15

Like an ETC Eligible LOC Order, an 

ETC Order must be in a Nasdaq-listed 

security, and the Exchange will execute 

it at the Nasdaq Official Closing Price, 

as determined by the Closing Cross. A 

Participant may enter, cancel, or modify 

an ETC Order at any time during the 

Extended Trading Close. The System 

will execute an ETC Order only if the 

System is able to match it against 

another ETC Order or an ETC Eligible 

LOC Order during the Extended Trading 

Close. Moreover, as noted above, if 

during the Extended Trading Close, the 

After Hours Trading last sale price or 

After Hours Trading best bid or offer of 

the Nasdaq-listed security subject to the 

ETC Order deviates the greater of 0.5% 

or $0.01 from the Nasdaq Official 

Closing Price for that security, as 

determined by the Closing Cross, then 

the System will suspend execution of 

the ETC Order, unless and until the 

After Hours Trading last sale price or 

the After Hours Trading best bid (offer) 

price of the Nasdaq-listed security 

returns to within these 0.5%/$0.01 

thresholds (or within such other 

thresholds as Nasdaq management may 

determine, upon prior notice to market 

Participants) during the Extended 

Trading Cross (at which point 

executions would resume). If an ETC 

Order remains unmatched or its 

execution remains suspended when the 

Extended Trading Close concludes, then 

the System will cancel the ETC Order. 

The System will match an ETC Order 

in time priority amongst other ETC 

Eligible LOC Orders and ETC Orders 

during the Extended Trading Close. 

Participants may modify or cancel 

unexecuted ETC Orders at any time after 

entry. A Participant may enter an ETC 

Order with a Minimum Quantity 

Attribute.16

The ETC Order Imbalance Indicator 

To facilitate participation in the 

Extended Trading Close, Nasdaq 

proposes to disseminate electronically 

to Participants an ‘‘ETC Order 

Imbalance Indicator,’’ beginning at 

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

when Nasdaq closes early), and 

continuing in 5 second intervals 

thereafter until the Extended Trading 

Close concludes at 4:05 p.m. (or 1:05 

p.m. on a day when Nasdaq closes 

early). The ETC Order Imbalance 

Indicator will convey to Participants the 

symbol and total number of matched 

and executed shares in the Extended 

Trading Close (as of the time of 

dissemination of the ETC Order 

Imbalance Indicator), as well as total 

size of any ETC Imbalance (exclusive of 

Orders with Minimum Quantity 

instructions) 17 and the buy/sell 

direction of any ETC Imbalance. 

Implementation 

The Exchange currently intends to 

introduce the Extended Trading Close, 

and begin accepting ETC Orders, during 

the Fourth Quarter of 2021. At least 30 

days prior to launching the Extended 

Trading Close, and beginning to accept 

ETC Orders, the Exchange will publish 

a Nasdaq Trader Alert announcing the 

launch date. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,18 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,19

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 


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system, and, in general to protect 

investors and the public interest. 

The proposal is consistent with the 

Act because it would create an 

additional opportunity for Participants 

to execute orders in Nasdaq-listed 

securities at the Closing Cross price for 

a limited time period after the Closing 

Cross concludes. For Participants with 

LOC Orders that do not execute in full 

in the Closing Cross, the Extended 

Trading Close will give those LOC 

Orders another opportunity to execute 

at the Nasdaq Official Closing Price, as 

determined by the Closing Cross, before 

the After Market Trading price moves 

far away from it. Likewise, Participants 

will have an opportunity to access 

liquidity at the Nasdaq Official Closing 

Price (as determined by the Closing 

Cross) even if they did not participate in 

the Closing Cross. By increasing 

opportunities for Participant to execute 

their orders at the Nasdaq Official 

Closing Price (as determined by the 

Closing Cross), the Exchange will allow 

them to execute sizable orders without 

market impact as a complement to the 

Closing Cross and as an alternative to 

After Hours Trading that can be less 

liquid than Market Hours trading. 

The Exchange believes it is consistent 

with the Act to provide for LOC Orders 

entered through the RASH and FIX 

protocols to roll over into the ETC 

automatically, if unexecuted in full 

during the Closing Cross, because 

Nasdaq typically assumes a more active 

role in managing the order flow 

submitted by users of the RASH and FIX 

protocols. Allowing these Participants 

to have their remaining LOC orders 

automatically participate in the 

Extended Trading Close will provide 

these Participants an additional 

opportunity for execution at the Nasdaq 

Official Closing Price (as determined by 

the Closing Cross), and it reflects the 

order flow management practices of 

these Participants. In contrast, users of 

the OUCH and FLITE protocols 

generally assume a more active role in 

managing their order flow. Having 

unexecuted shares of LOC orders 

canceled and requiring that an ETC 

Order be sent after the Closing Cross in 

order to participate in the Extended 

Trading Close reflects the order flow 

management practices of these 

Participants. 

The Exchange proposes to make 

participation in the Extended Trading 

Close optional for those Participants 

that wish to continue the current 

System practice of cancelling LOC 

Orders that remain unexecuted after the 

Closing Cross, or by designating LOC 

Orders to participate in After Hours 

Trading if they remain unexecuted after 

the Closing Cross. Therefore, as 

proposed, Participants can opt-out from 

having their ETC-Eligible LOC Orders 

participate in the Extended Trading 

Close, while their LOC Orders with a 

time-in-force that continues after the 

Closing Cross will automatically bypass 

the Extended Trading Close. 

Furthermore, the Exchange proposes to 

allow Participants to modify or cancel 

ETC Eligible LOC Orders and ETC 

Orders at any time after the Extended 

Trading Close begins, should they 

choose to do so. The System will 

automatically cancel any portion of ETC 

Eligible LOC Orders and ETC Orders 

that remain unexecuted at the 

conclusion of the Extended Trading 

Close. 

Moreover, as a means of mitigating 

the risk that the After Market Trading 

price of a Nasdaq-listed security will 

rapidly and substantially deviate from 

the Nasdaq Official Closing Price for the 

security (as determined by the Closing 

Cross), and thus cause orders in the 

Extended Trading Close to execute at 

prices that no longer reflect the value of 

the security, the Exchange proposes to 

suspend executions of matched orders 

in a security in the Extended Trading 

Close whenever and for as long as the 

After Hours Trading last sale price or 

best bid or offer of that security deviates 

the greater of 0.5% or $0.01 from the 

Nasdaq Official Closing price for the 

security, as determined by the Closing 

Cross. (From time to time, Nasdaq 

management may modify these 

thresholds upon prior notice to market 

Participants.) If during the Extended 

Trading Close, the After Market Hours 

Trading price or best bid or offer of a 

security returns to within the 0.5%/ 

$0.01 thresholds (or such other 

thresholds as Nasdaq management may 

set, upon prior notice to market 

Participants), then the System will 

resume execution of ETC Eligible 

Orders. The System will cancel any 

shares of ETC Eligible Orders for which 

executions remain suspended as of the 

conclusion of the Extended Trading 

Close. 

The Nasdaq Closing Cross (as well as 

the LULD Closing Cross) is a robust 

price discovery and liquidity 

mechanism in the national market 

system. The mechanism is used by a 

diverse set of Participants for a diverse 

set of reasons. The growth in 

participation over the years is testament 

to the value the Closing Cross provides 

to the market and the Participants in the 

market. As described above, the 

Extended Trading Close will be 

complementary to the Closing Cross and 

LULD Closing Cross and is not intended 

or expected to be a substitute for the 

Closing Cross or the LULD Closing 

Cross. Instead it will provide a simple 

additional mechanism for Participants 

who seek additional liquidity at the 

Nasdaq Official Closing Price, as 

determined by the Closing Cross, after 

regular market hours trading has 

completed. Nasdaq does not expect the 

Extended Trading Close to have an 

impact on the participation in the 

Nasdaq Closing Cross or the LULD 

Closing Cross. Nasdaq notes that a 

number of off-exchange trading venues 

already offer their participants the 

ability to receive the Nasdaq Official 

Closing Price for their orders after the 

Closing Cross occurs, and that such 

functionality has grown popular with 

certain Participants. Nasdaq intends for 

the Extended Trading Close to be an 

alternative to these off-exchange 

offerings, that will be available to all 

Nasdaq Participants. 

Additionally, Nasdaq will also 

disseminate an ETC Imbalance Indicator 

to help inform participation in the 

Extended Trading Close, which is 

something that off-exchange venues do 

not provide. The proposed 

dissemination of an ETC Imbalance 

Indicator is consistent with the Act 

because it will provide for the Extended 

Trading Close to be transparent with 

respect to the liquidity that is available 

to match and execute in it. The 

Exchange believes it is consistent with 

the Act to exclude ETC Eligible Orders 

with Minimum Quantity instructions 

from the calculation of the size of the 

ETC Imbalance because the size of such 

Orders may be misleading to 

Participants, given that such Orders will 

not execute if the Minimum Quantity 

instruction is not satisfied. 

As with the Closing Cross and any 

other facet of its market, Nasdaq will 

surveil the Extended Trading Close for 

any unfair or manipulative trading 

practices. 

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. To the 

contrary, the proposal will promote 

competition among trading venues for 

on-close and post-close orders in 

Nasdaq-listed securities. 

Nasdaq notes that participation in the 

Extended Trading Close is completely 

voluntary. Any Participant that does not 

wish for its unexecuted LOC Orders to 

participate in the Extended Trading 

Close will be able to avoid doing so by 

disabling this functionality for LOCs, 

which will cause the System to cancel 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 142 / Wednesday, July 28, 2021 / Notices 40671 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

the unexecuted LOC Orders after the 

Closing Cross concludes, or by also 

selecting a time-in-force of ‘‘Closing 

Cross/Extended Hours,’’ which will 

cause the unexecuted LOC Orders to 

commence After Hours Trading 

immediately after the Closing Cross 

ends, and bypass the Extended Trading 

Close. Participants may also modify or 

cancel their ETC Eligible Orders during 

the Extended Trading Close. 

Nasdaq believes that it is appropriate 

to limit participation in the Extended 

Trading Close to orders in Nasdaq-listed 

securities. As a primary listing market, 

Nasdaq is committed to investing in and 

enhancing the Closing Cross process for 

Nasdaq-listed issuers, their 

shareholders, investors, and all 

Participants involved in the robust price 

discovery and liquidity process that the 

Closing Cross serves. Moreover, the vast 

majority of Participants looking to trade 

at the closing price participate in the 

primary listing market’s closing auction 

and do not route orders to non-primary 

market listing destinations. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

such proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2021–040 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–2021–040. 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–2021–040 and 

should be submitted on or before 

August 18, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15991 Filed 7–27–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92470; File No. SR–BX– 

2021–031] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Options 2 at 

Section 4, Obligations of Market 

Makers and Lead Market Makers and 

Section 5, Market Maker Quotations 

July 22, 2021. 

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 July 19, 

2021, Nasdaq BX, Inc. (‘‘BX’’ 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 

Options 2 at Section 4, Obligations of 

Market Makers and Lead Market 

Makers, and Section 5, Market Maker 

Quotations. The Exchange also proposes 

a technical amendment to Options 1, 

Section 1, Definitions. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/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. 


khammond on DSKJM1Z7X2PROD with NOTICES