7398 Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices 

58See supra, note 6. 

59 15 U.S.C. 78s(b)(2). 

60See id. 

61 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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 No. SR– 

NYSE–2015–53 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 No. 

SR–NYSE–2015–53. This file number 

should be included on the subject line 

if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

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 No. SR–NYSE– 

2015–53, and should be submitted on or 

before March 3, 2016. 

VI. Accelerated Approval of Proposed 

Rule Change, as Modified by 

Amendment No. 1 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the Act, 

to approve the proposed rule change, as 

modified by Amendment No. 1, prior to 

the 30th day after the date of 

publication of Amendment No. 1 in the 

Federal Register. As discussed above, 

Amendment No. 1 updates dates in the 

original proposed rule change and adds 

clarity on the differences between the 

three time feeds in terms of their 

precision.58 The Commission believes 

that these revisions provide clarity on 

when partial cabinet bundle discounts 

will apply along with additional 

information on the differences between 

the various time feeds. Furthermore, the 

Commission believes it is appropriate to 

have these changes incorporated into 

the rules of the Exchange concurrently 

with those changes discussed in the 

original filing. 

Accordingly, the Commission finds 

good cause for approving the proposed 

rule change, as modified by Amendment 

No. 1, on an accelerated basis, pursuant 

to Section 19(b)(2) of the Act.59

VII. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,60 that the 

proposed rule change, as modified by 

Amendment No. 1, (File No. SR–NYSE– 

2015–53) be, and hereby is, approved on 

an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.61

Brent J. Fields, 

Secretary. 

[FR Doc. 2016–02736 Filed 2–10–16; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–77066; File No. SR– 

NASDAQ–2016–008] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Amend Rule 4120 

February 5, 2016. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on January 

29, 2016, The NASDAQ Stock Market 

LLC (‘‘Nasdaq’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘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 the Substance 

of the Proposed Rule Change 

Nasdaq is proposing to amend Rule 

4120 and the Nasdaq process for 

commencing trading of a security that is 

the subject of Nasdaq and non-Nasdaqlisted initial public offerings (‘‘IPOs’’) 

and trading halts. 

The text of the proposed rule change 

is available at http://

nasdaq.cchwallstreet.com/, at the 

Exchange’s principal office, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in Sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Nasdaq is proposing to make a minor 

modification to the Nasdaq process for 

commencing trading of a security that is 

the subject of Nasdaq and non-Nasdaqlisted IPOs or trading halts. Specifically, 

the Exchange is proposing to modify the 

way in which orders are accepted prior 

to the commencement of trading for 

securities subject to trading halt or IPO. 

This small change will simplify the 

order submission operations for market 

participants during trading halts and 

IPOs. 

Currently, Nasdaq Rule 4120(c)(4)(B) 

provides that during any trading halt or 

pause for which a halt cross under Rule 

4753 will not occur, market participants 

may enter orders during the trading halt 

or pause and designate such orders to be 

held until the termination of the trading 

halt or pause. Under this rule, such 

orders will be held in a suspended state 

until the termination of the halt or 

pause, at which time they will be 

entered into the system. 

Nasdaq Rules 4120(a)(1), (4), (5), (6), 

(9), (10), (11), and (12)(F) provide 

specific instances when the Exchange 

may halt trading of a security listed on 

Nasdaq. Nasdaq Rule 4120(c)(7)(A) 

establishes the process for lifting the 

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Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices 7399 

3See Securities Exchange Act Release No. 66652 

(March 23, 2012), 77 FR 19044 (March 29, 2012) 

(SR–NASDAQ–2012–038); see also Securities 

Exchange Act Release No. 69563 (May 13, 2013), 78 

FR 29187 (May 17, 2013) (SR–NASDAQ–2013–073). 

Both filings were designated by the Exchange and 

accepted by the Commission as filings submitted 

under Section 19(b)(3)(A) of the Act and Rule 19b– 

4(f)(6) thereunder. 

4Certain orders’ Time in Force allows the order 

to remain on the Exchange book after the auction 

(See e.g., MDAY, MGTC, SDAY and SGTC in 

Nasdaq Rule 4703(a)). 

5Any order subject to instructions that it be 

directed to another exchange as described in 

Nasdaq Rule 4758 will be forwarded to the 

exchange as per the member’s instructions. 

6See Nasdaq Rule 3340. Prohibition on 

Transactions, Publication of Quotations, or 

Publication of Indications of Interest During 

Trading Halts. 

7See FINRA Rule 5260. Prohibition on 

Transactions, Publication of Quotations, or 

Publication of Indications of Interest During 

Trading Halts. 

8The New York Stock Exchange LLC (‘‘NYSE’’) 

may accept orders at any time prior to an IPO for 

NYSE-listed and NYSE MKT LLC-listed securities. 

See https://www.nyse.com/publicdocs/nyse/

markets/nyse/NYSE_Opening_and_Closing_

Auctions_Fact_Sheet.pdf. 

9 15 U.S.C. 78f. 

halt and commencing trading. It 

provides that a trading halt or pause 

initiated under the rules listed above is 

terminated by the Exchange once it 

releases the security for trading. For any 

such security listed on the Exchange, 

prior to terminating the halt or pause, 

there will be a 5-minute ‘‘Display Only 

Period’’ during which market 

participants may enter quotations and 

orders in that security in Nasdaq 

systems. 

Additionally, when a trading halt is in 

effect prior to the commencement of the 

Display Only Period, market 

participants may enter orders in a 

security that is the subject of the trading 

halt on the Exchange and designate such 

orders to be held until the beginning of 

the Display Only Period. Such orders 

will be held in a suspended state until 

the beginning of the Display Only 

Period, at which time they will be 

entered into the system. 

Nasdaq Rule 4120(a)(7) provides that 

the Exchange may halt trading in a 

security that is the subject of an IPO on 

Nasdaq. Nasdaq Rule 4120(c)(8)(A) 

establishes the process for lifting the 

halt and commencing trading. Under 

this rule, prior to terminating the halt, 

there is a 15-minute Display-Only 

Period during which market 

participants may enter quotes and 

orders into the Nasdaq Market Center. 

Additionally, beginning at 4:00 a.m. 

(EST), market participants may enter 

orders in a security that is the subject of 

an IPO on the Exchange and designate 

such orders to be held until the 

beginning of the Display Only Period. 

Such orders will be held in a suspended 

state until the beginning of the Display 

Only Period, at which time they will be 

entered into the system. At the 

conclusion of the Display-Only Period, 

the security will enter a ‘‘Pre-Launch 

Period’’ of indeterminate duration. The 

Pre-Launch Period ends and the security 

is released for trading by the Exchange 

once the conditions described in 

paragraphs (c)(8)(A)(i), (ii), and (iii) of 

Nasdaq Rule 4120 are all met. 

The process of holding orders in a 

suspended state prior to the 

commencement of the Display Only 

Period is functionality that is utilized by 

just a small portion of orders. The 

Exchange believes that the proposed 

rule change will simplify this process 

for market participants by making it 

easier for them to enter orders prior to 

the release of an IPO or halted security 

for trading on the Exchange. 

The proposed rule change is to amend 

Nasdaq Rule 4120(c)(4)(B), Nasdaq Rule 

4120(c)(7)(A), and Nasdaq Rule 

4120(c)(8)(A) pertaining to the Nasdaq 

process for commencing trading of a 

security that is subject to Nasdaq and 

non-Nasdaq-listed IPOs and trading 

halts. 

For Nasdaq-listed securities, Nasdaq 

proposes amending Nasdaq Rule 

4120(c)(7)(A) and (c)(8)(A). Nasdaq Rule 

4120(c)(8)(A) functionality was added in 

2012 to make it easier for firms to enter 

orders during halts or IPOs for Nasdaqlisted securities, without regard for the 

security being in a Display Only Period 

or having resumed trading.3 The process 

required special settings on participant 

ports and, as mentioned above, the 

orders are held in a suspended state. 

With this change, orders for Nasdaqlisted securities will be immediately 

accepted and entered into the system 

without any special port settings and 

will no longer be held in a suspended 

state. Such orders will be eligible for 

cross execution and will remain on the 

book after the auction if the order’s 

Time in Force allows.4 As mentioned 

above, this simplification will 

streamline the process and make it 

easier for firms to submit orders to the 

Exchange prior to the commencement of 

trading in an IPO or halted security. 

For non-Nasdaq-listed securities, the 

functionality will revert back to what 

had been done previously, which is that 

the Exchange will not accept any order 

entered during a trading halt prior to its 

release on the primary market.5 Nasdaq 

notes that this will reduce confusion 

about where to send orders for IPO or 

halt auctions. Market participants that 

want to participate in the IPO auction or 

halt resumption for non-Nasdaq-listed 

securities may use Nasdaq routing 

strategies that submit orders to the 

primary listing exchange for auctions or 

submit their orders directly to the 

primary listing exchange. The Exchange 

proposes that Nasdaq Rule 4120(c)(4)(B) 

be revised to simply state that during 

any trading halt or pause for which a 

halt cross under Rule 4753 will not 

occur, which would be the case for a 

security not listed on Nasdaq that is 

subject to a halt or pause, Nasdaq will 

not accept orders entered by market 

participants during the trading halt or 

pause. 

Both the changes for non-Nasdaqlisted securities and for Nasdaq-listed 

securities will clarify references to 

instances where a trading halt is in 

effect prior to the commencement of the 

Display Only Period and that market 

participants may enter orders in a 

security that is the subject of the trading 

halt on the Exchange. Specifically, for 

both Nasdaq Rule 4120(c)(7)(A) and 

(c)(8)(A), the subsections will be 

amended by deleting language 

referencing that orders will be held until 

the beginning of the Display Only 

Period. Nasdaq Rule 4120(c)(7)(A) will 

be amended further by deleting 

language referencing that orders will be 

held in a suspended state until the 

beginning of the Display Only Period. 

For both subsections, this language will 

be replaced with language that states 

such orders will now be accepted and 

entered into the system. 

The Exchange has also notified 

FINRA of the proposed rule change and 

that Nasdaq would treat the quotes 

collected during the halt in the same 

manner that the Exchange handles the 

pre-existing quotes (i.e., by 

disseminating these quotes in a nontradable state where they are clearly 

identified as being closed and are in fact 

non-actionable). As a result, the 

Exchange believes that the proposed 

rule change would not violate Nasdaq 

Rule 3340 6 or the similar FINRA Rule 

5260.7

The implementation of the existing 

functionality for accepting orders prior 

to the commencement of the Display 

Only Period has not been widely used 

and the Exchange believes the proposed 

rule change will both improve and 

simplify the Nasdaq process for market 

participants.8 The Exchange will issue 

an Equity Trader Alert notifying 

Exchange member firms of the changes. 

2. Statutory Basis 

Nasdaq believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,9 in 

general, and with Section 6(b)(5) of the 

mstockstill on DSK4VPTVN1PROD with NOTICES

7400 Federal Register / Vol. 81, No. 28 / Thursday, February 11, 2016 / Notices 

10 15 U.S.C. 78f(b)(5). 11See Securities Exchange Act Release No. 66652 

(March 23, 2012), 77 FR 19044 (March 29, 2012) 

(SR–NASDAQ–2012–038); see also Securities 

Exchange Act Release No. 69563 (May 13, 2013), 78 

FR 29187 (May 17, 2013) (SR–NASDAQ–2013–073). 12For example, the LIST routing option sends 

orders in non-Nasdaq-listed securities to the 

primary listing exchange for auctions—open, close, 

IPOs, halts, pauses, etc. See Nasdaq Rule 

4758(a)(1)(A)(x). 13 17 CFR 200.30–3(a)(12). 

Act,10 in particular, in that the proposal 

is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. 

Nasdaq believes that the proposed 

rule change will remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system through an improved and 

simplified Nasdaq process for 

commencing trading of a security that is 

the subject of Nasdaq and non-Nasdaqlisted IPOs and trading halts. 

The current functionality for 

accepting orders prior to the 

commencement of the Display Only 

Period is used infrequently and 

consequently the proposed rule change 

will have little impact on customers. To 

the extent that there is any impact, it 

will be that accepting orders 

immediately rather than holding them 

in a suspended state will clarify the 

state of participant orders, which will 

reduce confusion for market 

participants in times of increased 

activity such as during a halt or IPO. 

This simpler Nasdaq process will make 

it easier for market participants by 

streamlining the process for entering 

orders in securities subject to an IPO or 

halt prior to the commencement of the 

Display Only Period. Additionally, 

returning to the functionality of not 

accepting orders prior to the resumption 

of trading that was previously in place 

for non-Nasdaq-listed securities prior to 

2013,11 will reduce confusion for 

market participants about where to send 

orders for IPO or halt auctions. Orders 

sent to Nasdaq will not be accepted 

unless they are designated to use one of 

the routing options that may be sent to 

the primary listing market.12

The proposed rule change also will 

remove impediments to and perfect the 

mechanism of a free and open market 

through competition. Specifically, the 

proposed rule change will enhance 

competition by increasing Nasdaq’s 

attractiveness as a venue for trading 

securities and as a primary listing 

exchange for securities issuers. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

Nasdaq does not believe that the 

proposed rule change will result in any 

burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Nasdaq believes that the proposed rule 

change will result in an improved and 

simplified process for market 

participants, which in turn will reduce 

confusion during important market 

events. Nasdaq believes that this change 

will enhance competition by increasing 

its attractiveness as a venue for trading 

securities. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

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 

the 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–2016–008 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–2016–008. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE., 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing will also 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– 

NASDAQ–2016–008, and should be 

submitted on or beforeMarch 3, 2016. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Brent J. Fields, 

Secretary. 

[FR Doc. 2016–02731 Filed 2–10–16; 8:45 am] 

BILLING CODE 8011–01–P 

mstockstill on DSK4VPTVN1PROD with NOTICES