73382 Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 

administering the policies and procedures adopted 

under subparagraph (i) above. 

42The Exchange states that FINRA surveils 

trading on the Exchange pursuant to a regulatory 

services agreement and that the Exchange is 

responsible for FINRA’s performance under this 

regulatory services agreement. 

43 15 U.S.C. 78f(b)(5). 

44 15 U.S.C. 78k–1(a)(1)(C)(iii). 

45 15 U.S.C. 78s(b)(2). 

46This approval order is based on all of the 

Exchange’s representations, including those set 

forth above and in the Notice, and the Exchange’s 

description of the Fund. 

47 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange will explain the proposed change 

to its participants via an Options Trader Alert. 

4See Securities Exchange Act Release No. 64463 

(May 11, 2011), 76 FR 28257 (May 16, 2011)(SR– 

NASDAQ–2011–037)(approval order regarding 

updates to Opening Cross). 

5 ‘‘System Securities’’ means all options that are 

currently trading on NOM pursuant to Chapter IV. 

All other options shall be ‘‘Non System Securities.’’ 

Chapter VI, Section 1(b). 

6 In this proposal, all time is Eastern Time unless 

otherwise noted. 

7 ‘‘Imbalance’’ means the number of contracts of 

Eligible Interest that may not be equal. Chapter VI, 

Section 8(a)(1). ‘‘Eligible Interest’’ means any 

quotation or any order that may be entered into the 

system and designated with a time-in-force of IOC, 

DAY, GTC. Chapter VI, Section 8(a)(4). The 

Exchange is deleting the reference to Imbalance 

from Section 8(b) because, as discussed, the 

occurrence of the Opening Cross depends on the 

parameters proposed in Section 8(b) rather than on 

whether there is an imbalance. 

8 ‘‘Market for the Underlying Security’’ means 

either the primary listing market, the primary 

The Exchange represents that trading in 

the Shares will be subject to the existing 

trading surveillances, administered by 

the Financial Industry Regulatory 

Authority (‘‘FINRA’’) on behalf of the 

Exchange, which are designed to detect 

violations of Exchange rules and 

applicable federal securities laws.42 The 

Exchange further represents that these 

procedures are adequate to properly 

monitor Exchange-trading of the Shares 

in all trading sessions and to deter and 

detect violations of Exchange rules and 

applicable federal securities laws. 

Moreover, prior to the commencement 

of trading, the Exchange states that it 

will inform its Equity Trading Permit 

Holders in an Information Bulletin of 

the special characteristics and risks 

associated with trading the Shares. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change, as modified by Amendment 

No. 1, is consistent with Section 6(b)(5) 

of the Act,43 Section 11A(a)(1)(C)(iii) of 

the Act,44 and the rules and regulations 

thereunder applicable to a national 

securities exchange. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,45 that the 

proposed rule change (SR–NYSEArca– 

2014–30), as modified by Amendment 

No. 1, be, and it hereby is, approved.46

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.47

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28879 Filed 12–9–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73739; File No. SR– 

NASDAQ–2014–116) 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Proposed Rule Change Relating to the 

NASDAQ Opening and Halt Cross 

December 4, 2014. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on November 

21, 2014, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by NASDAQ. 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 proposes to modify and 

reorganize Chapter VI (Trading 

Systems), Section 8 (NASDAQ Opening 

and Halt Cross) of the NASDAQ Options 

Market, LLC (‘‘NOM’’). The proposal 

would update or add Section 1 and 

Section 8 definitions in respect of the 

NASDAQ Opening and Halt Cross. The 

proposal would also make changes 

regarding: The criteria for opening of 

trading or resumption of trading after a 

halt; NASDAQ posting on its Web site 

any changes to the dissemination 

interval or prior Order Imbalance 

Indicator; the procedure if more than 

one price exists; the procedure if there 

are unexecuted contracts; and the ability 

of firms to elect that orders be returned 

in symbols that were not opened on 

NOM before the conclusion of the 

Opening Order Cancel Timer. 

The text of the proposed rule change 

is available at http://

nasdaq.cchwallstreet.com/, at 

NASDAQ’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, 

NASDAQ included statements 

concerning the purpose of, and basis for, 

the proposed rule change. The text of 

these statements may be examined at 

the places specified in Item IV below, 

and is set forth in Sections A, B, and C 

below. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to modify NOM Chapter VI, 

Section 1 and Section 8 to update or add 

definitions, which include Current 

Reference Price, NASDAQ Opening 

Cross, Eligible Interest, Valid Width 

National Best Bid or Offer (‘‘Valid 

Width NBBO’’), Away Best Bid or Offer 

(‘‘ABBO’’), and On the Open Order 

(‘‘OPG’’). The purpose is to also make 

changes regarding: The criteria for 

opening of trading or resumption of 

trading after a halt; NASDAQ posting on 

its Web site any changes to the 

dissemination interval or prior Order 

Imbalance Indicator; the procedure if 

more than one price exists; the 

procedure if there are unexecuted 

contracts; and the ability of firms to 

elect that orders be returned in symbols 

that were not opened on NOM before 

the conclusion of the Opening Order 

Cancel Timer.3

Section 8 of Chapter VI describes the 

NASDAQ opening and halt cross and 

opening imbalance process (‘‘Opening 

Cross’’).4 Section 8(a) currently contains 

definitions that are applicable to Section 

8. Section 8(b) currently states that for 

the opening of trading of System 

Securities,5 the Opening Cross shall 

occur at or after 9:30 a.m. Eastern Time 6

if any of the following ‘‘conditions’’ 

occur: (1) There is no Imbalance; 7 (2) 

the dissemination of a regular market 

hours quote or trade (as determined by 

the Exchange on a class-by-class basis) 

by the Market for the Underlying 

Security 8 has occurred (or, in the case 

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Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 73383 

volume market (defined as the market with the most 

liquidity in that underlying security for the 

previous two calendar months), or the first market 

to open the underlying security, as determined by 

the Exchange on an issue-by-issue basis and 

announced to the membership on the Exchange’s 

Web site. Chapter VI, Section 8(a)(5). 

9For better readability, this part of Section 8(b) 

is proposed to be broken into two sentences and the 

phrase ‘‘the Opening Cross shall occur’’ inserted. 

Reference to firm quote on OPRA is proposed to be 

deleted from this part of Section 8(b) and is, as 

discussed, put into proposed Section 8(b)(2)(B). 

10The specific time of day, currently 9:45 a.m., 

is disseminated at http://www.nasdaqtrader.com/

content/technicalsupport/NOM_

SystemSettings.pdf. 

11See proposed Section 8(b). 

12Simultaneously, the price parameters are 

deleted from current Section 8(a)(2)(A). In a similar 

vein, current Section 8(a)(2)(E) indicative prices are 

deleted. The Exchange is re-organizing Section 8 

and thereby deleting the noted price parameters and 

indicative prices in order to offer an integrated 

description of the opening process in proposed 

Section 8(b). 

13The term ‘‘On the Open Order’’ (OPG) is also 

proposed to be added as a Time in Force to Chapter 

VI, Sec 1(g), and is added as an Order Type to 

Chapter VI, Sec 8(a)(4). 

14The Exchange notes that EXPR (wait or expire 

time) was deleted in a prior filing, see Securities 

Exchange Act Release No. 64311 (April 20, 2011), 

76 FR 23349 (April 26, 2011) (NASDAQ–2011–022) 

(notice of filing and immediate effectiveness), but 

inadvertently was left in the rule text where ‘‘and 

OPG’’ is proposed to be added. EXPR is, therefore, 

not shown in the proposed rule text. 

of index options, the Exchange has 

received the opening price of the 

underlying index); or (3) in the case of 

a trading halt, when trading resumes 

pursuant to Chapter V, Section 4, and a 

certain number (as the Exchange may 

determine from time to time) of other 

options exchanges have disseminated a 

firm quote on the Options Price 

Reporting Authority (‘‘OPRA’’).9 Market 

hours trading on NOM in specific 

options commences, or in the case of 

specific halted options resumes, when 

the NASDAQ Opening Cross concludes. 

Section 8(c) currently describes the 

procedure if firm quotes are not 

disseminated for an option by the 

predetermined number of options 

exchanges by a specific time during the 

day that is determined by the 

Exchange; 10 provided that 

dissemination of a regular market hours 

quote or trade by the Market for the 

Underlying Security has occurred (or, in 

the case of index options, the Exchange 

has received the opening price of the 

underlying index). This filing proposes 

several changes to enhance the usability 

and effectiveness of Section 8 regarding 

the opening and halt cross and 

imbalance process. 

First, the Exchange proposes to 

update or add new Section 8 

definitions. 

The Exchange proposes a change to 

the definition of ‘‘Current Reference 

Price’’. Current Section 8(a)(2)(A) 

defines the ‘‘Current Reference Price’’ to 

mean: (i) The single price at which the 

maximum number of contracts of 

Eligible Interest can be paired at or 

within the NBBO; (ii) If more than one 

price exists under subparagraph (i), the 

Current reference Price shall mean the 

entered price at which contracts will 

remain unexecuted in the cross; (iii) If 

more than one price exists under 

subparagraph (ii), the Current Reference 

Price shall mean the price that is closest 

to the midpoint of the (1) National Best 

Bid or the last offer on NOM against 

which contracts will be traded 

whichever is higher, and (2) National 

Best Offer or the last bid on NOM 

against which contracts will be traded 

whichever is lower. Proposed Section 

8(a)(2)(A) seeks to simplify the 

definition of the ‘‘Current Reference 

Price’’ to state that ‘‘Current Reference 

Price’’ shall mean an indication of what 

the Opening Cross price would be at a 

particular point in time. The ‘‘Current 

Reference Price’’ determination will be 

substantively similar to what is 

currently described in Section 

8(a)(2)(A), with the criteria for the 

Opening Cross price, as discussed 

below, set forth elsewhere in Section 

8,11 according to various parameters 

(e.g. existence of opening interest, 

existence of Valid Width NBBO, 

whether the issue is open elsewhere).12

The Exchange believes that this 

construction makes the rule easier to 

follow. In addition, this construction 

also makes the language contained in 

current Section 8(a)(2)(E) no longer 

necessary as it is replaced with the new 

definition proposed for ‘‘Current 

Reference Price’’ in Section 8(a)(2)(A) 

and proposed criteria for the Opening 

Cross price set forth in Section 8(b). 

Thus, the Exchange proposes to delete 

current Section 8(a)(2)(E). 

The Exchange proposes a change to 

the definition of ‘‘NASDAQ Opening 

Cross’’. Specifically, in proposed 

Section 8(a)(3) the Exchange introduces 

a clarifying change that references 

opening or resuming trading, and states 

that ‘‘NASDAQ Opening Cross’’ shall 

mean the process for opening or 

resuming trading pursuant to this rule 

and shall include the process for 

determining the price at which Eligible 

Interest, as discussed below, shall be 

executed at the open of trading for the 

day, or the open of trading for a halted 

option, and the process for executing 

that Eligible Interest. 

The Exchange proposes to define a 

new order type in Section 1(e)(7), ‘‘On 

the Open Order’’, which is an order 

with a designated time-in-force of 

OPG.13 An On the Open Order will be 

executable only during the Opening 

Cross. If such order is not executed in 

its entirety during the Opening Cross, 

the order, or any unexecuted portion of 

such order, will be cancelled back to the 

entering participant. 

The Exchange proposes a change to 

the definition of ‘‘Eligible Interest’’ 

contained in current Section 8(a)(4). 

Specifically, in Section 8(a)(4) the 

Exchange proposes a change to reflect 

the addition of a new order type, On the 

Open Order, with a time-in force of 

OPG, so that ‘‘Eligible Interest’’ shall 

mean any quotation or any order that 

may be entered into the system and 

designated with a time-in-force of IOC 

(immediate-or-cancel), DAY (day order), 

GTC (good-till-cancelled), and OPG.14

The Exchange also proposes new 

language to indicate how certain timein-force orders will be handled, to state 

that orders received via FIX protocol 

prior to the NASDAQ Opening Cross 

designated with a time-in-force of IOC 

will be rejected and shall not be 

considered Eligible Interest. Orders 

received via OTTO and SQF prior to the 

NASDAQ Opening Cross designated 

with a time-in-force of IOC will remain 

in-force through the opening and shall 

be cancelled immediately after the 

opening. The Exchange notes that FIX 

protocol users generally prefer a cancel 

if an order is not executed immediately 

in order that these users have an a 

opportunity to access other markets; 

while OTTO and SQF users are liquidity 

providers who prefer that the order lives 

throughout the entire opening process, 

until it is clear their liquidity was not 

utilized in the opening. Also, for 

purposes of consistency the time-inforce designation is hyphenated 

throughout Section 8. The Exchange 

believes that these changes help to 

clarify how eligible quotations and 

orders are handled in the opening 

process. 

The Exchange proposes to add the 

concept of a Valid Width NBBO and 

ABBO with respect to away and onExchange interest. Specifically, in 

proposed Section 8(a)(6) the Exchange 

defines ‘‘Valid Width NBBO’’ as the 

combination of all away market quotes 

and any combination of NOM-registered 

Market Maker (‘‘Market Maker’’) orders 

and quotes received over the OTTO or 

SQF Protocols within a specified bid/

ask differential as established and 

published by the Exchange. The Valid 

Width NBBO will be configurable by 

underlying, and a table with valid width 

differentials will be posted by NASDAQ 

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73384 Federal Register / Vol. 79, No. 237 / Wednesday, December 10, 2014 / Notices 

15 In respect of the Valid Width NBBO, the orders 

and quotes on the Exchange would be received over 

the OTTO or SQF Protocols. 

16Current Section 8(b)(2)(B) and (b)(2)(C) discuss 

the Opening Cross procedure if more than one price 

exists. As noted below, the Exchange proposes to 

add language to current Section 8(b)(2)(C) regarding 

unexecuted contracts. Proposed Section 8(b)(5) and 

(b)(6) (renumbered from current Section 8(b)(3) and 

(b)(4), respectively) discuss how Eligible Interest 

would be handled vis a vis the Opening Cross; 

proposed (b)(5) states that if the NASDAQ Opening 

Cross price is selected and not all Eligible Interest 

available in NOM is executed, then all Eligible 

Interest shall be executed at the NASDAQ Opening 

Cross price in accordance with the execution 

algorithm assigned to the associated underlying 

option. No changes are proposed to Sections 8(b)(6) 

and 8(b)(7) other than re-numbering. Section 8 

(b)(6) (renumbered from current Section 8(b)(4)) 

states that all Eligible Interest executed in the 

Nasdaq Opening Cross shall be executed at the 

Nasdaq Opening Cross price. Proposed Section 

8(b)(7) (renumbered from current Section 8(b)(5)) 

discusses the procedure of disseminating one 

additional Order Imbalance Indicator, if the 

conditions specified in proposed Section 8(b) have 

occurred, but there is an imbalance containing 

marketable routable interest; any remaining 

Imbalance will be canceled, posted, or routed as per 

the directions on the customer’s order. 

17Chapter V, Section 4 states that trading in an 

option that has been the subject of a halt under 

Section 3 of Chapter V shall be resumed upon the 

determination by NASDAQ Regulation, that the 

conditions which led to the halt are no longer 

present or that the interests of a fair and orderly 

market are best served by a resumption of trading. 

Trading shall resume according to the process set 

forth in proposed Chapter VI, Section 8 of the rules. 

18 In the case of a crossed ABBO, the conditions 

set forth in new proposed Section (8)(b)(1) and 

(b)(2) will become operative when the ABBO 

becomes uncrossed. 

on its Web site. Away markets that are 

crossed (e.g. AMEX crosses AMEX, 

AMEX crosses CBOE) will void all Valid 

Width NBBO calculations. If any Market 

Maker orders or quotes on NOM are 

crossed internally, then all such orders 

and quotes will be excluded from the 

Valid Width NBBO calculation. In 

addition, in proposed Section 8(a)(7), 

the Exchange defines ‘‘ABBO’’ as the 

displayed National Best Bid or Offer not 

including the Exchange’s Best Bid or 

Offer. 

The Exchange is making these 

proposals to ensure that all away market 

quotes and any combination of Market 

Maker orders and quotes 15, whether 

they include the Exchange’s Best Bid or 

Offer or not, are represented. The 

Exchange believes that including (or 

adding) the proposed Valid Width 

NBBO and ABBO within the opening 

rule should be beneficial to market 

participants by offering a more robust 

Opening Cross process. The proposed 

change will significantly enhance the 

price discovery mechanism in the 

opening process to include not only 

Market Maker orders and quotes but 

also away market interest.16

Following are examples to illustrate, 

among other things, the calculation of 

the Valid Width NBBO as proposed in 

Section 8(a)(6) and the definition of the 

ABBO as proposed in Section 8(a)(7). 

Example 1 (normal market conditions). 

Assume that the Valid Width NBBO bid/ask 

differential is set by the Exchange at .10. 

MM1 is quoting on the Exchange .90–1.15 

and MM2 is quoting on the Exchange .80–.95, 

thus making the NOM BBO .90–.95. Assume 

the ABBO is .85–1.00. The Exchange 

considers all bid and all offers to determine 

the bid/ask differential; in this example, the 

best bid/ask is .90–.95 which satisfies the 

required .10 bid/ask differential and is 

considered a Valid Width NBBO. Pursuant to 

the rule proposed in Section 8(b)(2)(A), NOM 

will open with no trade and BBO 

disseminated as .90–.95. 

Example 2 (away markets are crossed). 

Assume the Valid Width NBBO bid/ask 

differential is set by the Exchange at .10. 

MM1 is quoting on the Exchange 1.05–1.15 

and MM2 is quoting on the Exchange 1.00– 

1.10, thus making the NOM BBO 1.05–.1.10. 

Assume Exchange 2 is quoting .90–1.10 and 

Exchange 3 is quoting .70–.85. Since the 

ABBO is crossed (.90–.85), Valid Width 

NBBO calculations are not taken into account 

until the away markets are no longer crossed. 

Once the away markets are no longer crossed, 

the Exchange will determine if a Valid Width 

NBBO can be calculated. Assume the ABBO 

uncrosses because Exchange 3 updates their 

quote to .90–1.15, the NOM BBO of 1.05–1.10 

is considered a Valid Width NBBO. Pursuant 

to the rule proposed in Section 8(b)(2)(A), 

NOM will open with no trade and BBO 

disseminated as 1.05–1.10. 

Example 3 (NOM orders/quotes are 

crossed, ABBO is Valid Width NBBO). 

Assume that the Valid Width NBBO bid/ask 

differential is set by the Exchange at .10. 

MM1 is quoting on the Exchange 1.05–1.15 

(10×10 contracts) and MM2 is quoting on the 

Exchange .90–.95 (10×10 contracts), thus 

making the NOM BBO crossed, 1.05–.95, 

while another MM3 is quoting on the 

Exchange at .90–1.15 (10x10 contracts). Since 

the NOM BBO is crossed, the crossing quotes 

are excluded from the Valid Width NBBO 

calculation. However, assume Exchange 2 is 

quoting .95–1.10 and Exchange 3 is quoting 

.95–1.05, resulting in an uncrossed ABBO of 

.95–1.05. The ABBO of .95–1.05 meets the 

required .10 bid/ask differential and is 

considered a Valid Width NBBO. The 

Opening Cross will follow the rules set forth 

in proposed Section 8(b)(4)(B) because MM1 

and MM2 have 10 contracts each which cross 

and there is more than one price at which 

those contracts could execute. Thus, the 

Opening Cross will occur with 10 contracts 

executing at 1.00, which is the mid-point of 

the National Best Bid and the National Best 

Offer. At the end of the opening process, only 

the quote from MM3 remains so the NOM 

disseminated quote at the end of opening 

process will be .90–1.15 (10×10 contracts). 

Second, in current Section 8(b) the 

Exchange proposes to remove language 

that ‘‘there is no Imbalance’’ and 

language regarding ‘‘on a class-by-class 

basis’’, and proposes to add additional 

clarifying language pertaining to an 

Opening Cross after a trading halt. The 

Imbalance language is being removed 

from the introductory sentence of 

current Section 8(b) to make the 

language of the Processing of the 

Opening Cross apply more generally. 

The details surrounding the Opening 

Cross as it relates specifically to an 

Imbalance is currently provided for in 

Section 8(b)(5) and is being added in 

new proposed Section 8(b)(4)(C). The 

Exchange proposes to remove the ‘‘on a 

class-by-class basis’’ language because 

the Exchange will use a regular market 

hours quote or trade (as determined by 

the Exchange) for all classes on the 

Exchange for the Opening Cross, 

without distinguishing among different 

classes. Additionally, the Exchange 

proposes to add language to current 

Section 8(b) to make it clear that an 

Opening Cross shall occur after a 

trading halt when trading resumes 

pursuant to Chapter V, Section 4.17

Third, the Exchange proposes to add 

certain criteria to current Section 8(b), 

in order to describe how the opening 

process will differ depending on 

whether a trade is possible or not on 

NOM. Provided that the ABBO is not 

crossed these criteria necessitate, per 

proposed new Section 8(b)(1), that a 

Valid Width NBBO will always be 

required to open a series when there is 

tradable interest on NOM; and require, 

per proposed new Section 8(b)(2), that 

in cases where there is no tradable 

interest, any one of three conditions 

could trigger a series on NOM to open. 

Those conditions are listed in proposed 

new (b)(2) as: (A) A Valid Width NBBO 

is present, (B) a certain number of other 

options exchanges (as determined by the 

Exchange) have disseminated a firm 

quote on OPRA, or (C) a certain period 

of time (as determined by the Exchange) 

has elapsed.18 The Exchange believes 

that listing these criteria will, similarly 

to other proposed changes, organize and 

clarify the opening process and make it 

more robust and protective for market 

participants. The requirement of a Valid 

Width NBBO being present will help to 

ensure that opening execution prices are 

rational based on what is present in the 

broader marketplace during the opening 

process. 

Fourth, the Exchange proposes 

changes to provide additional 

information during the opening process. 

Current Section 8(b)(1) indicates that 

NASDAQ shall disseminate an Order 

Imbalance Indicator every 5 seconds 

and does not allow for a shorter 

dissemination interval. New proposed 

Section 8(b)(3) indicates that NASDAQ 

shall disseminate by electronic means 

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19 ‘‘Order Imbalance Indicator’’ means a message 

disseminated by electronic means containing 

information about Eligible Interest and the price in 

penny increments at which such interest would 

execute at the time of dissemination. For the 

information disseminated by the Order Imbalance 

Indicator (e.g. Current Reference Price, number of 

paired contracts, size and buy/sell direction of 

Imbalance, indicative prices), see Chapter VI, 

Section 8(a)(2). The term ‘‘order’’ means a firm 

commitment to buy or sell options contracts. 

Chapter 1, Section 1(a)(44). 

20Current Section 8(b)(2)(B) currently states that 

if more than one price exists under subparagraph 

(A), the NASDAQ Opening Cross shall occur at the 

entered price at which contracts will remain 

unexecuted in the cross. Subparagraph (A) states 

that the NASDAQ Opening Cross shall occur at the 

price that maximizes the number of contracts of 

Eligible Interest in NOM to be executed at or within 

the National Best Bid and Offer. 

21The Exchange proposes to change the 

subparagraph reference from (B) to (A) as current 

subparagraph (B) is being deleted and expanded 

upon with new subparagraphs (B) and (C). 

22The Exchange notes that rounding will be 

applied, if needed, in the following manner: If the 

previous closing price is less than the midpoint, 

then the opening price rounds down; and if the 

previous closing price is greater than the midpoint, 

or if there is no closing price, then the opening 

price rounds up. For example, if there is a midpoint 

of 1.045, the opening price would be rounded to 

1.04 if the previous closing price was 1.00, and 

would be rounded to 1.05 if the previous closing 

price was 1.10. 

23The Exchange notes that the system will also 

calculate a defined range to limit the range of prices 

at which an order will be allowed to execute. 

Chapter VI, Section 10 (7). 

an Order Imbalance Indicator 19 every 5 

seconds beginning between 9:20 a.m. 

and 9:28 a.m., or a shorter 

dissemination interval as established by 

NASDAQ, with the default being set at 

9:25 a.m. The start of dissemination, 

dissemination interval, and changes to 

prior Order Imbalance Indicators, if any, 

shall be posted on the Exchange Web 

site. To further enhance price discovery 

and disclosure regarding the Opening 

Cross process, the Exchange proposes to 

add the ability for it to disseminate 

imbalances more frequently, which the 

rule currently does not allow for. The 

Exchange will indicate start of 

dissemination and the dissemination 

interval on its Web site. The Exchange 

believes that, like the other proposed 

changes, this proposed enhancement 

regarding additional information 

disclosure should prove to be very 

helpful to market participants, 

particularly those that are involved in 

adding liquidity during the Opening 

Cross process. 

Fifth, the Exchange proposes to add 

language regarding how the Opening 

Cross will occur in relation to the Valid 

Width NBBO, and further what would 

happen if more than one price exists 

under certain circumstances. With this 

proposal, current Section 8(b)(2)(B) will 

be deleted and the determination of the 

Opening Cross price will be more fully 

described under proposed new Section 

8(b)(4)(A)–(C). The new language added 

to current subparagraph (A) stipulates 

that the Opening Cross shall occur at the 

price that maximizes the number of 

contracts of Eligible Interest in NOM to 

be executed at or within the ABBO and 

within a defined range, as established 

and published by the Exchange, of the 

Valid Width NBBO. Current 

subparagraph (A) simply states the 

Opening Cross shall occur at the price 

that maximizes the number of contracts 

of Eligible Interest in NOM to be 

executed at or within the NBBO. The 

new proposed language being added to 

(A) will require that the Opening Cross 

price not only be at a price at or within 

the ABBO but also be within a defined 

range of the Valid Width NBBO. This 

addition will ensure that the Exchange 

does not open at a price too far away 

from the best interest available in the 

marketplace as a whole. 

The new proposed Section 8(b)(4)(B) 

and (C) describe in detail at what price 

the Opening Cross will occur if there 

exists more than one price under 

Section 8(b)(4)(A) at which the 

maximum number of contracts could be 

executed at or within the ABBO and 

equal to or within a defined range of the 

Valid Width NBBO. Current Section 

8(b)(2)(C) (renumbered as proposed to 

(b)(4)(B)) states that if more than one 

price exists under subparagraph (B),20

the NASDAQ Opening Cross shall occur 

at the price that is closest to the 

midpoint price of (1) the National Best 

Bid or the last offer on NOM against 

which contracts will be traded 

whichever is higher, and (2) the 

National Best Offer or the last bid on 

NOM against which contracts will be 

traded whichever is lower. In an effort 

to make the rule language more precise 

and to signify that to the extent possible 

the Opening Cross will occur at the 

midpoint price, the Exchange proposes 

to delete the language ‘‘the price that is 

closest to’’. New subparagraph (B), as 

proposed, will read that if more than 

one price exists under subparagraph 

(A) 21 and there are no contracts that 

would remain unexecuted in the cross, 

the Nasdaq Opening Cross shall occur at 

the midpoint price, rounded to the 

penny closest to the price of the last 

execution in that series and in the 

absence of a previous execution price, 

the price will round up, if necessary.22

The price is determined using the 

midpoint of (1) the National Best Bid or 

the last offer on NOM against which 

contracts will be traded whichever is 

higher, and (2) National Best Offer or 

the last bid on NOM against which 

contracts will be traded whichever is 

lower. The Exchange believes the 

proposed language more fully describes 

how rounding is applied to determine 

the opening execution price in place of 

a general statement of ‘‘the price that is 

closest to the midpoint price’’. In 

addition, the Exchange proposes new 

subparagraph (C) to describe the price at 

which the Opening Cross will occur 

when more than one price exists under 

subparagraph (A) and there are contracts 

which would remain unexecuted in the 

cross which was previously described in 

Section 8(b)(2)(B) with less granularity 

and without consideration of the new 

Valid Width NBBO. New proposed 

subparagraph (C) will state if more than 

one price exists under subparagraph (A), 

and contracts would remain unexecuted 

in the cross, then the opening price will 

be the highest/lowest price, in the case 

of a buy/sell imbalance, at which the 

maximum number of contracts can trade 

which is equal to or within a defined 

range as established and published by 

the Exchange,23 of the Valid Width 

NBBO on the contra side of the 

imbalance that would not trade through 

the ABBO. Where there is more than 

one price and there is an imbalance, in 

Section 8(b)(4)(C) the Exchange is 

proposing that the Opening Cross price 

also be within a defined range of the 

Valid Width NBBO on the contra side of 

the imbalance, to help ensure that the 

opening price does not stray too far from 

the best prices available and that the 

opening price is rational. In addition, 

the Opening Cross price will be the 

highest price, in the case of a buy 

imbalance, where the maximum number 

of contracts can trade which is equal to 

or within the defined range of the Valid 

Width NBBO. Similarly, in the case of 

a sell imbalance, the Opening Cross 

price will be the lowest price at which 

the maximum number of contracts can 

trade which is equal to or within the 

defined range of the Valid Width NBBO. 

This serves to provide opening 

execution price protections as well as an 

Opening Cross price which will not 

have residual unexecuted interest 

reflected in the marketplace, after the 

Opening Cross execution, at a price 

which crosses the Opening Cross 

execution price. 

The following examples illustrate, 

among other things, the determination 

of the Opening Cross price. 

Example 4 (no imbalance and one possible 

price). Assume a Valid Width NBBO bid/ask 

differential allowance of .10 and a defined 

range of .10. Also, assume that the ABBO is 

1.00–1.10 (10x10 contracts) and the NOM 

BBO is .99–1.15 (10x10 contracts) which 

represents a quote from MM1. Assume that 

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a Customer Order 1 comes in to Buy 10 

contracts for 1.05 and a Customer Order 2 

comes in to Sell 10 contracts at 1.05. Once 

regular markets hours have begun and the 

underlying security has opened, the system 

determines if there is a Valid Width Quote 

present. While the NOM BBO of .99–1.15 is 

wider than the allowed bid/ask differential to 

qualify as a Valid Width NBBO on its own, 

the ABBO market of 1.00–1.10 does qualify 

as a Valid Width NBBO. In this scenario, 

there is not an opening imbalance since there 

are 10 contracts on both the buy and sell side 

which could possibly trade. Thus, the 

Opening Cross will follow the rules set forth 

in proposed Section 8(b)(4)(A). Under this 

rule, the Opening Cross will occur at the 

price which maximizes the number of 

contracts of Eligible Interest at or within the 

ABBO and within a defined range of the 

Valid Width NBBO. In this scenario, the 

Opening Cross price will be 1.05 with 10 

contracts executing and NOM BBO 

disseminated as .99–1.15. 

Example 5 (no imbalance and more than 

one possible price). Assume a Valid Width 

NBBO bid/ask differential allowance of .10 

and a defined range of .10. Assume the ABBO 

is 1.00–1.10 (10x10 contracts) and the NOM 

BBO is .99–1.11 (10x10 contracts) which 

represents a quote from MM1. Assume that 

a Customer Order 1 comes in to Buy 10 

contracts for 1.08, and a Customer Order 2 

comes in to Sell 10 contracts at 1.00. Once 

regular markets hours have begun and the 

underlying security has opened, the system 

determines if there is a Valid Width Quote 

present. While the NOM BBO of .99–1.11 is 

wider than the allowed bid/ask differential to 

qualify as a Valid Width NBBO on its own, 

the ABBO market of 1.00–1.10 does qualify 

as a Valid Width NBBO. In this scenario, 

there is not an imbalance as there are 10 

contracts to buy and 10 contracts to sell, 

however, there exist multiple price points at 

which those 10 contracts could execute 

within the ABBO and within a .10 range of 

the Valid Width NBBO. Thus, the Opening 

Cross will follow the rules set forth in 

proposed Section 8(b)(4)(B) and the Opening 

Cross will occur with 10 contracts executing 

at 1.04. 1.04 represents the midpoint of 1.00 

(the last offer on NOM against which 

contracts will be traded or the National Best 

Bid since the two are equal) and 1.08 (the last 

bid on NOM against which contracts will be 

traded). If the example is changed slightly 

such that Order 1 is a market order to Buy 

10 contracts, the Opening Cross will occur 

with 10 contracts executing at 1.05 which 

represents the midpoint of 1.00 (the last offer 

on NOM against which contracts will be 

traded or the National Best Bid since the two 

are equal) and 1.10 (the National Best Offer 

against which contracts will be traded). The 

market order is considered to be a price 

higher than the National Best Offer and 

outside of the NBBO therefore, the National 

Best Offer is used in determining the 

Opening Cross price. The NOM BBO 

disseminated after the opening in either case 

will be .99–1.11. 

Example 6 (imbalance and more than one 

possible price). Assume that the ABBO is 

1.05–1.50 (10x10 contracts) and MM1 is 

quoting on NOM 1.15–1.20 (10x10 contracts) 

as well as MM2 is quoting on NOM 1.05–1.50 

(10x10 contracts). Also assume that the Valid 

Width NBBO bid/ask differential allowance 

and defined range are each .10. Also assume 

a Customer Order 1 is entered to Buy 30 

contracts for 1.45. In this example, the Valid 

Width NBBO is comprised solely of the NOM 

1.15–1.20 quote. There is more than one 

price at which the Exchange can maximize 

the number of contracts executed, 10 

contracts, during the Opening Cross and 

there exist multiple prices at which 20 

contracts will remain unexecuted in the 

Opening Cross. Thus, the Opening Cross 

price will be determined under proposed 

Section 8(b)(4)(C). In this example, the Valid 

Width NBBO is 1.15–1.20 which is the best 

bid and best offer of the MM1 quote and the 

ABBO and is tighter than the allowed 

differential of .10. With a defined range of .10 

of the Valid Width NBBO on the contra side 

of the imbalance (1.20 + .10), and a buy 

imbalance, the Opening Cross price will be 

1.30 with Order 1 buying 10 contracts from 

MM1. The Opening Cross price of 1.30 

represents the highest price at which the 

maximum number of contracts, 10 contracts, 

can trade which is equal to or within the 

defined range of the Valid Width NBBO on 

the contra side of the imbalance that would 

not trade through the ABBO. The remaining 

unexecuted contracts will be posted on the 

book and reflected in the NOM quote as a 

1.30 bid with NOM BBO disseminated as 

1.30–150 [sic] with offer as non-firm, as 

proposed in Section 8(b)(4)(C)(iii). If this 

example were changed slightly such that the 

ABBO was 1.05–1.25, the opening price 

would be 1.25 since the Opening Cross 

cannot occur at a price outside of the ABBO. 

Because new proposed subsections 

(b)(1) and (b)(2) are added, current 

subsections (b)(1) through (b)(5) are renumbered to (b)(3) through (b)(7), and 

the reference to (b)(2) in current (b)(7) 

is re-numbered to (b)(4). 

Sixth, the Exchange is proposing new 

language to indicate the price at which 

remaining unexecuted contracts will be 

posted. Specifically, in proposed 

Section 8(b)(4)(C), formerly covered in 

(b)(2), the Exchange proposes to state 

that if more than one price exists under 

subparagraph (A), and contracts would 

remain unexecuted in the cross, then 

the opening price will be the price at 

which the maximum number of 

contracts can trade that are equal to or 

within the defined range of the Valid 

Width NBBO on the contra side of the 

imbalance that would not trade through 

the ABBO. New proposed subsections 

(i)–(iv) to Section 8(b)(4)(C) indicate the 

price at which unexecuted contracts 

will be posted on the book following the 

Opening Cross and the subsequent 

handling of the residual unexecuted 

contracts, as follows: (i) If unexecuted 

contracts remain with a limit price that 

is equal to the opening price, then the 

remaining unexecuted contracts will be 

posted at the opening price, displayed 

one minimum price variation (MPV) 

away if displaying at the opening price 

would lock or cross the ABBO, with the 

contra-side NOM BBO reflected as firm; 

(ii) if unexecuted contracts remain with 

a limit price that is through the opening 

price, and there is a contra side ABBO 

at the opening price, then the remaining 

unexecuted contracts will be posted at 

the opening price, displayed one 

minimum price variation (MPV) away 

from the ABBO, with the contra side 

NOM BBO reflected as firm and order 

handling of any remaining interest will 

be done in accordance with the routing 

and time-in-force instructions of such 

interest and shall follow the Acceptable 

Trade Range mechanism set forth in 

Chapter VI, Section 10; (iii) if 

unexecuted contracts remain with a 

limit price that is through the opening 

price, and there is no contra side ABBO 

at the opening price, then the remaining 

contracts will be posted at the opening 

price, with the contra-side NOM BBO 

reflected as non-firm; and (iv) order 

handling of any residual unexecuted 

contracts will be done in accordance 

with the reference price set forth in 

Chapter VI, Section 10, with the 

opening price representing the reference 

price. This proposed behavior ensures 

that residual unexecuted contracts from 

the Opening Cross, regardless of their 

limit prices, are posted on the book at 

the opening price before subsequently 

being routed pursuant to Chapter VI, 

Section 11 or walked to the next 

potential execution price(s) under the 

Acceptable Trade Range set forth in 

Chapter VI, Section 10(7), with the 

opening price representing the 

‘‘reference price’’ of that rule. This 

enhancement to the NOM Opening 

Cross ensures that aggressively priced 

interest does not immediately post at 

prices which may be considered to be 

egregious if the interest were to post and 

execute immediately following the 

Opening Cross. The ‘firm’ versus ‘nonfirm’ tagging of contra-side interest 

when residual Opening Cross interest is 

posted follows the construct currently 

in place on the Exchange when 

aggressive interest is received and 

triggers an Acceptable Trade Range 

(ATR) process. Contra-side NOM BBO 

interest is reflected as non-firm when 

the Exchange has interest with a limit 

price (or market order) that is more 

aggressive than the Opening Cross price. 

The purpose behind this is to ensure 

that aggressively priced residual interest 

maintains priority should other 

aggressively priced interest be entered 

before the residual interest is permitted 

to access the next allowable range of 

prices. 

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24As set forth in proposed Section 8(b)(4)(C)(iv), 

order handling of any residual interest in the 

Opening Cross will also be done in accordance with 

the reference price set forth in Chapter VI, Section 

10, with the opening price representing the 

reference price. 

25See, e.g., Chapter VI, Section 10(1). 

26 15 U.S.C. 78f(b). 

Following are examples illustrating 

the proposed rule text regarding the 

handling of unexecuted contracts. 

Example 7 (proposed Section 8(b)(4)(C)(i)). 

Assume the ABBO is 1.00–1.10 (10x10 

contracts), and the NOM BBO is .99–1.11 

(10x10 contracts). Assume there is a 

Customer order to Buy 10 contracts at the 

market and a Customer order to Sell 50 

contracts at 1.00. Further assume the Valid 

Width NBBO is defined as .10 and the 

defined range is also .10. The Valid Width 

NBBO in this example is comprised solely of 

the ABBO which has a bid/ask differential 

equal to the allowance of .10. Since there is 

1) an imbalance, 2) multiple prices at which 

the maximum number of contracts (10) can 

execute equal to or within the ABBO and, 3) 

multiple prices at which the maximum 

number of contracts can execute equal to or 

within a defined range of the Valid Width 

NBBO on the contra side of the imbalance 

that would not trade through the ABBO, the 

Opening Cross will occur at a price 

determined under Section 8(b)(4)(C). The 

Opening Cross will result in 10 contracts 

being executed at 1.00. The 40 remaining 

unexecuted contracts will be posted as a 40 

contract offer at 1.00 and displayed at 1.01 

(one MPV away from the away market bid of 

1.00) in order to not display at a price which 

locks the ABBO under proposed Section 

8(b)(4)(C)(i). The resulting displayed NOM 

BBO would be .99–1.01, reflected as firm on 

both sides of the market, and the remaining 

interest would be handled in accordance 

with the routing and time in-force 

instructions of the residual interest 24. Since 

the residual interest is posted at its limit and 

therefore would not be permitted to execute 

at more aggressive prices, the contra-side 

NOM BBO is reflected as firm. 

Example 8 (proposed Section 8(b)(4)(C)(ii)). 

Assume the ABBO is 1.00–1.10 (10x10 

contracts), and the NOM BBO is .99–1.11 

(10x10 contracts). Assume there is a 

Customer order to Buy 10 contracts at the 

market and a Customer order to Sell 50 

contracts at .85. Further assume the Valid 

Width NBBO is defined as .10 and the 

defined range is also .10. The Valid Width 

NBBO in this example is comprised solely of 

the ABBO which has a bid/ask differential 

equal to the allowance of .10. Since there is 

an imbalance and multiple prices exist at 

which the maximum number of contracts 

(10) can execute equal to or within the ABBO 

and within a defined range of the Valid 

Width NBBO without trading through the 

ABBO, the Opening Cross will occur at a 

price determined under Section 8(b)(4)(C). 

The Opening Cross would result in 10 

contracts being executed at 1.00. The 40 

remaining unexecuted contracts will be 

posted as a 1.00 offer and be displayed at 

1.01 so as not to lock the away market bid 

under proposed Section 8(b)(4)(C)(ii). Since 

the residual interest is posted at a price 

which internally locks the ABBO and 

therefore would not be permitted to execute 

at more aggressive prices until the ABBO 

moves, the contra-side NOM BBO is reflected 

as firm. The resulting displayed NOM BBO 

would be .99–1.01, reflected as firm on both 

sides of the market, and the remaining 

interest would be handled in accordance 

with the routing and time-in-force 

instructions of the residual interest and in 

accordance with Chapter VI, Section 10 of 

the NOM rules, and the contra-side BBO will 

be marked as firm or non-firm in accordance 

with the same Section 10 rule. 

Example 9 (proposed Section 

8(b)(4)(C)(iii)). Assume the ABBO is .00–5.00 

(0x10 contracts). Also assume the Valid 

Width NBBO bid/ask differential is defined 

as 0.10 and the defined range as described in 

proposed Section 8(b)(4)(C) is .10. Further, 

assume NOM has received a quote of .99– 

1.09 (10x10), a Customer order to Buy 10 

contracts at the market, a Customer order to 

Buy 10 contracts for .70, and a Customer 

order to Sell 50 contracts at .85. There is a 

Valid Width NBBO present with the NOM 

quote of .99–1.09, which is equal to the 

defined bid/ask differential of .10. The 

Opening Cross has an imbalance on the sell 

side. Since there is more than one price at 

which contracts would remain unexecuted in 

the cross, the Opening Cross price is 

determined using the logic included in 

proposed Section 8(b)(4)(C). This will result 

in an execution of 20 contracts at .89, since 

the Valid Width NBBO on the bid side 

(contra to the imbalance side) is .99 less the 

defined range of .10, with the residual 

contracts of the .85 Sell Order posted on the 

book at .89. The resulting NOM BBO would 

be reflected as .70–.89, reflected as non-firm 

on the bid, firm on the offer, and the 

remaining unexecuted interest would be 

handled in accordance with the routing and 

time-in-force instructions of the residual 

interest. The .70 bid is reflected as non-firm 

to ensure that incoming interest will not be 

permitted to immediately execute ahead of 

the more aggressively priced Opening Cross 

residual interest. The residual interest from 

the Opening Cross will been handled in 

accordance with Chapter VI, Section 10 of 

the NOM rules, and the contra-side BBO will 

be marked as firm or non-firm in accordance 

with the same Section 10 rule. 

Seventh, the Exchange is proposing 

new language to indicate the use of 

execution algorithms assigned to the 

underlying options. Specifically, in 

proposed Section 8(b)(5) (formerly 

(b)(3)), the Exchange proposes to delete 

price/time priority and add the use of 

execution algorithms by stating that if 

the Nasdaq Opening Cross price is 

selected and fewer than all contracts of 

Eligible Interest that are available in 

NOM would be executed, all Eligible 

Interest shall be executed at the Nasdaq 

Opening Cross price in accordance with 

the execution algorithm assigned to the 

associated underlying option. By 

substituting language indicating use of 

execution algorithms rather than price/ 

time priority, the Exchange recognizes 

that there are now multiple execution 

allocation models,25 and these are 

factored into the Opening Cross. 

Lastly, the Exchange proposes to add 

a provision regarding the return of 

orders in un-opened symbols in the 

absence of an Opening Cross. Proposed 

new Section 8(c) is substituted for 

current Section 8(c) and provides the 

procedure if an Opening Cross in a 

symbol is not initiated before the 

conclusion of the Opening Order Cancel 

Timer. Specifically, proposed new 

Section 8(c) states that if an Opening 

Cross is not initiated under such 

circumstances, a firm may elect to have 

orders returned by providing written 

notification to the Exchange. These 

orders include all non GTC orders 

received over the FIX protocol. The 

Opening Order Cancel Timer represents 

a period of time since the underlying 

market has opened, and shall be 

established and disseminated by 

NASDAQ on its Web site. Proposed 

Section 8(c) will provide participants 

the ability to have their orders returned 

to them if NOM is unable to initiate an 

Opening Cross within a reasonable time 

of the opening of the underlying market. 

In addition, proposed Section 8(c) 

deletes language which is present in 

current Section 8(c) regarding how the 

Opening Cross operates in relation to 

the presence or absence of a regular 

market hour quote or trade by the 

Market for the Underlying and the 

process of the Opening Cross in relation 

to opening quotes or orders which lock 

or cross each other. The deleted 

provisions are now being more 

thoroughly described in proposed 

Section 8(b). 

The Exchange believes that the 

proposed changes significantly improve 

the quality of execution of NOM’s 

opening. The proposed changes give 

participants more choice about where, 

and when, they can send orders for the 

opening that would afford them the best 

experience. The Exchange believes that 

this should attract new order flow. The 

proposed changes should prove to be 

very helpful to market participants, 

particularly those that are involved in 

adding liquidity during the Opening 

Cross. Absent these proposed 

enhancements, NOM’s opening quality 

will remain less robust than on other 

exchanges. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 26 in general, and furthers the 

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27 15 U.S.C. 78f(b)(5). 

objectives of Section 6(b)(5) of the Act 27

in particular, in that the proposal is 

designed to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general to protect investors and the 

public interest. 

The proposal is consistent with the 

goals of the Act because it will enhance 

and clarify the Opening Cross process, 

minimize or negate unnecessary 

complexity, and encourage liquidity at 

the crucial time of market open. The 

proposed change will also enhance the 

price discovery mechanism in the 

opening process to include not only 

Market Maker orders and quotes but 

also away market interest as represented 

by quotes. The Exchange believes this 

change will make the transition from the 

Opening Cross period to regular market 

trading more efficient and thus promote 

just and equitable principles of trade 

and serve to protect investors and the 

public interest. 

The proposal is designed to promote 

just and equitable principles of trade by 

updating and clarifying the rules 

regarding the NASDAQ Opening and 

Halt Cross. In particular, the proposal 

would update or add Chapter VI, 

Section 8 definitions regarding 

NASDAQ Opening Cross, Eligible 

Interest, NBBO, and ABBO in respect of 

the Opening Cross and resuming 

options trading after a halt. The 

Exchange would add to Chapter VI, 

Section 1 the definition of ‘‘On the 

Opening Order’’ (OPG) as used in 

Section 8 in respect of the Opening 

Cross. The proposal would also, as 

discussed, make changes in Section 8 

regarding: The criteria for opening of 

trading or resumption of trading after a 

halt; NASDAQ posting on its Web site 

any changes to the dissemination 

interval or prior Order Imbalance 

Indicator; the procedure if more than 

one price exists; the procedure if there 

are unexecuted contracts; and the ability 

of firms to elect that orders be returned 

in symbols that were not opened on 

NOM before the conclusion of the 

Opening Order Cancel Timer. 

The proposal is designed to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. In 

particular, the Exchange proposes in 

Chapter VI, Section 8(b) to remove the 

class-by-class quote or trade 

characteristic because for the Opening 

Cross the Exchange will use a regular 

market hours quote or trade (as 

determined by the Exchange) for all 

underylings [sic] on the Exchange, 

without distinguishing among 

underlying symbols, or, in the case of a 

trading halt the Opening Cross shall 

occur when trading resumes pursuant to 

Chapter V, Section 4. The Exchange 

proposes to set forth in Section 8(b) 

clear language describing under what 

circumstances an Opening Cross will 

occur, and how the Opening Cross will 

occur if more than one price exists 

under certain circumstances. Thus, for 

example, proposed Section 8(b)(4) 

specifies that if more than one price 

exists under subparagraph (A), and 

contracts would remain unexecuted in 

the cross, then the opening price will be 

the highest/lowest price, in the case of 

a buy/sell imbalance, at which the 

maximum number of contracts can trade 

which is equal to or within a defined 

range, as established and published by 

the Exchange, of the Valid Width NBBO 

on the contra side of the imbalance that 

would not trade through the ABBO. The 

Exchange proposes, in Section 

8(b)(4)(C), three alternatives for how 

remaining unexecuted contracts will be 

handled. These include: If unexecuted 

contracts remain with a limit price that 

is equal to the opening price, if 

unexecuted contracts remain with a 

limit price that is through the opening 

price and there is a contra side ABBO 

at the opening price, and if unexecuted 

contracts remain with a limit price that 

is through the opening price and there 

is no contra side ABBO at the opening 

price. The Exchange also proposes to 

clarify what happens if an Opening 

Cross in a symbol is not initiated before 

the conclusion of the Opening Order 

Cancel Timer. In that case, proposed 

Section 8(c)(2) [sic] indicates that a firm 

may elect to have orders returned by 

providing written notification to the 

Exchange. These orders include all non 

GTC orders received over the FIX 

protocol. The Opening Order Cancel 

Timer represents a period of time since 

the underlying market has opened, and 

shall be established and disseminated 

by the Exchange on its Web site. 

The proposal is designed in general to 

protect investors and the public interest. 

The Exchange proposes to add certain 

criteria to current Section 8(b), in order 

to describe how the opening process 

will differ depending on whether a trade 

is possible or not on NOM. Assuming 

that ABBO is not crossed, proposed new 

Chapter VI, Section 8(b)(1) states that if 

there is a possible trade on NOM, a 

Valid Width NBBO must be present. 

Assuming that ABBO is not crossed, 

proposed Section 8(b)(2) states that if no 

trade is possible on NOM, then NOM 

will open dependent upon one of the 

following: A Valid Width NBBO is 

present; A certain number of other 

options exchanges (as determined by the 

Exchange) have disseminated a firm 

quote on OPRA; or A certain period of 

time (as determined by the Exchange) 

has elapsed. The Exchange proposes to 

further enhance price discovery and 

disclosure regarding the Opening Cross 

process, by proposing in current Section 

(b)(1) (renumbered to be (b)(3)) that 

NASDAQ may choose to establish a 

dissemination interval that is shorter 

than every 5 seconds; and that the 

Exchange will indicate the interval on 

its Web site in conjunction to other 

information regarding the Opening 

Process. Moreover, the Exchange 

proposes to add language in current 

Section 8(c)(2) regarding the return of 

orders in un-opened symbols in the 

absence of an Opening Cross. Thus, if an 

Opening Cross in a symbol is not 

initiated before the conclusion of the 

Opening Order Cancel Timer, a firm 

may elect to have orders returned by 

providing written notification to the 

Exchange. These orders include all non 

GTC orders received over the FIX 

protocol. The Opening Order Cancel 

Timer represents a period of time since 

the underlying market has opened, and 

shall be established and disseminated 

by NASDAQ on its Web site. 

For the above reasons, NASDAQ 

believes the proposed rule change is 

consistent with the requirements of 

Section 6(b)(5) of the Act. The Exchange 

believes that the proposed changes 

significantly improve the quality of 

execution of NOM’s opening. The 

proposed changes give participants 

more choice about where, and when, 

they can send orders for the opening 

that would afford them the best 

experience. The Exchange believes that 

this should attract new order flow. The 

proposed changes should prove to be 

more robust and helpful to market 

participants, particularly those that are 

involved in adding liquidity during the 

Opening Cross. 

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. While the 

Exchange does not believe that the 

proposal should have any direct impact 

on competition, it believes the proposal 

should help to further clarify the 

Opening Cross process and make it 

more efficient, reduce order entry 

complexity, enhance market liquidity, 

and be beneficial to market participants. 

Moreover, the Exchange believes that 

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28 17 CFR 200.30–3(a)(12). 

the proposed changes significantly 

improve the quality of execution of 

NOM’s opening. The proposed changes 

give participants more choice about 

where, and when, they can send orders 

for the opening that would afford them 

the best experience. The Exchange 

believes that this should attract new 

order flow. Absent these proposed 

enhancements, NOM’s opening quality 

will remain less robust than on other 

exchanges, and the Exchange will 

remain at a competitive disadvantage. 

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 (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission shall: (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–2014–116 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Brent J. Fields, Secretary, Securities 

and Exchange Commission, 100 F Street 

NE., Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2014–116. 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 

offices 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–2014–116, and should be 

submitted on or before December 31, 

2014. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2014–28877 Filed 12–9–14; 8:45 am] 

BILLING CODE 8011–01–P 

DEPARTMENT OF STATE 

[Public Notice 8964] 

Third International Conference on 

Financing for Development 

AGENCY: Department of State. 

ACTION: Request for comments. 

SUMMARY: The Department of State 

invites the public, including nongovernmental and civil society 

organizations, think tanks, educational 

institutions, private sector companies, 

and other interested persons, to submit 

written input on U.S. goals and 

objectives for the third International 

Conference on Financing for 

Development. 

DATES: Written comments are due by 

January 9, 2015. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin Thomson, Financial 

Economist, Office of Development 

Finance, Bureau of Economic and 

Business Affairs, Department of State at 

202–647–9462. Comments should be 

emailed to Benjamin Thomson 

(Post2015_Financing@State.gov). 

SUPPLEMENTARY INFORMATION: Pursuant 

to UN General Assembly resolution 68/ 

279, the third International Conference 

on Financing for Development will be 

held on 13–16 July 2015, in Addis 

Ababa, Ethiopia (http://www.un.org/ga/

search/view_doc.asp?symbol=A/RES/

68/279&Lang=E). Many of the 

preparatory discussions for the 2015 

Financing for Development Conference 

have cited the potential to do more to 

maximize the development impact of 

existing development flows; leverage 

the considerable resources, knowledge, 

and expertise of a host of new partners; 

and truly revitalize a global partnership 

around proven ingredients of successful 

implementation. Some specific elements 

being discussed include data about total 

financial flows to developing countries, 

innovation in the use of official 

development assistance (especially to 

leverage other flows); reduction in the 

cost of remittances; tapping domestic 

resources in developing countries 

through enhanced capacity for tax 

collection, broadening the tax base and 

boosting savings, bolstering private 

investment in and trade with 

developing countries, curtailing illicit 

financial flows and fighting corruption 

to ensure the efficient and effective use 

of resources and domestic long-term 

financing. 

The Department of State is seeking 

public comments on these concerns and 

all other elements related to United 

States interests in the Financing for 

Development Conference negotiations. 

Dated: December 4, 2014. 

Ambassador Lisa J. Kubiske, 

Deputy Assistant Secretary, Office of 

International Finance and Development, 

Bureau of Economic and Business Affairs, 

Department of State. 

[FR Doc. 2014–28970 Filed 12–9–14; 8:45 am] 

BILLING CODE 4710–07–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

Notice of Availability for the Cal Black 

Memorial Airport Draft Supplemental 

Environmental Impact Statement (Draft 

SEIS) and Section 4(f) Evaluation; 

Notice of Public Comment Period; and 

Notice of Opportunity for a Public 

Hearing 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

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