Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 69 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3As defined by Rule 4120(b)(4)(D). 

4See Rule 4754. 

5See Rule 4754(a)(1) for a description of quotes 

and orders eligible for participation in the Closing 

Cross. 

6The Order Imbalance Indicator provides 

information about orders eligible to participate in 

the Closing Cross and the price at which those 

orders would execute at the time of dissemination. 

7Once the closing process is initiated, the System 

will execute crosses in each individual security 

traded on NASDAQ one by one. The order in which 

each security is processed is random and differs day 

by day. 

8This brief period is normally well under one 

second. 

9For example, a member firm that enters an order 

that is erroneous in price and/or size may cause 

significant order imbalances, which may cause the 

closing price of the security to be significantly 

different from what is anticipated. 

10A member firm that sends a cancellation 

request during the Lockdown Period will receive an 

execution message for that order if it is executed in 

the Closing Cross. 

11The closing process will still be initiated at 

4:00 p.m. Eastern Time, and the order in which 

securities enter into their individual Closing 

Crosses will continue to be random. 

12See Rule 4751(h)(6). 

13 Id. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30694 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73943; File No. SR– 

NASDAQ–2014–123] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change to Rules 

4751(h) and 4754(b) Relating to the 

Closing Process 

December 24, 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 December 

16, 2014, The NASDAQ Stock Market 

LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III, below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to make 

changes to Rules 4751(h) and 4754(b) 

relating to the closing process. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://nasdaq.cchwallstreet.com, 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 is proposing to adopt 

changes related to the close of Regular 

Market Session 3 on NASDAQ, which 

are designed to bring consistency and 

stability to the processing of securities 

in the NASDAQ Closing Cross.4 Each 

trading day, NASDAQ accepts orders 

designated to participate in the Closing 

Cross.5 The Closing Cross is the process 

by which NASDAQ determines the 

price at which orders will be executed 

at market close. Beginning at 3:50 p.m. 

Eastern Time, NASDAQ disseminates an 

Order Imbalance Indicator 6 every five 

seconds until market close, which 

allows market participants to see the 

nature of interest in a security and make 

investment decisions accordingly. The 

NASDAQ closing process is initiated at 

4:00 p.m. Eastern Time.7 During the 

brief period between the initiation of the 

closing process and the conclusion of 

the last Closing Cross,8 the continuous 

order book is open to accept orders and 

cancellations in a security until the 

Closing Cross for that security is 

complete. These orders can affect the 

ultimate closing price of the security. 

Although accepting orders and 

cancellations through the completion of 

a security’s Closing Cross allows the 

greatest interest to participate in the 

Closing Cross, the Exchange has 

observed that in cases where there is 

aberrant volatility in a security due to 

an error,9 accepting such order activity 

may also significantly alter the closing 

price. In normal trading, NASDAQ has 

observed that allowing order entry and 

cancellation in a security up to the 

completion of a security’s Closing Cross 

provides little additional price 

discovery to offset the greater risk in 

allowing such order activity. 

Accordingly, NASDAQ is proposing to 

close the order book for participation in 

the Closing Cross once the closing 

process is initiated at 4:00 p.m. Eastern 

Time (the ‘‘Lockdown Period’’). As a 

consequence of closing the order book, 

orders entered for participation in the 

continuous market after the Lockdown 

Period has begun, but prior to 

completion of the Closing Cross, will 

not be accepted by the System. 

Under the proposed process, at 4:00 

p.m. Eastern Time, when the closing 

process is initiated, the Lockdown 

Period is triggered at which point the 

order book will no longer accept new 

orders for execution, and will cease to 

process order cancellation requests for 

resting orders. New orders received for 

participation in the Closing Cross after 

initiation of the Lockdown Period will 

be cancelled back to the member firm, 

and cancellations of resting orders will 

be processed after the Closing Cross is 

complete.10 NASDAQ notes that the 

processing and calculation of the 

Closing Cross will remain unchanged.11

Moreover, in proposing the Lockdown 

Period, NASDAQ is not altering how 

orders are processed prior to the Closing 

Cross, and after it is completed. Rather, 

NASDAQ is merely providing a precise 

time at which orders will not participate 

in the Closing Cross, in lieu of the 

uncertain, albeit brief, time under the 

current process. In addition to 

amending Rule 4754(b) to reflect the 

changes discussed above, NASDAQ is 

making a clarifying change to the rule 

text to make it clear that the Closing 

Cross begins at 4:00:00 p.m.. [sic] 

In a related change, the Exchange is 

also proposing to harmonize the 

processing of Market Hours Day 

(‘‘MDAY’’) orders 12 in the Closing 

Cross. MDAY is a time-in-force 

characteristic of orders, which allows 

the order to be executed during the 

Regular Market Session. Under 

NASDAQ rules, MDAY-designated 

orders are available from 4:00 a.m. to 

4:00 p.m. Eastern Time.13 Currently, an 

order designated as MDAY entered after 

completion of the Closing Cross in a 

particular security may be rejected, 

cancelled, or modified to an order with 

a time-in-force of Immediate or Cancel, 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
70 Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 

14See http://www.nasdaqtrader.com/

Trader.aspx?id=TradingSpecs for a description of 

the various order entry port specifications. 

15A System Hours Day order remains available 

for potential display and/or execution from 4:00 

a.m. until 8:00 p.m. Eastern Time on the day it was 

submitted unless cancelled by the entering party. 

See Rule 4751(h)(2). 

16See Rule 4751(h)(8). 

depending on the means of entry. 

Member firms may enter MDAYdesignated orders through OUCH, 

FLITE, RASH, INET FIX, QIX or SUMO 

FIX ports.14 These various means of 

connecting to the Exchange for order 

entry provide member firms with 

differing functionality. The Exchange 

notes that a MDAY-designated order 

entered after the conclusion of the 

Regular Market Session through an 

OUCH, FLITE or RASH port will be 

modified to an order with a time-inforce of Immediate or Cancel. A MDAYdesignated order entered after the 

conclusion of Regular Market Session 

through an INET FIX port will be 

modified to a System Hours Day order.15

Lastly, a MDAY-designated order 

entered after the conclusion of the 

Regular Market Session through a QIX 

or SUMO FIX port will be rejected. The 

Exchange notes that the vast majority of 

such orders are [sic] entered near the 

end of the Regular Market Session by 

member firms seeking to execute prior 

to the conclusion of the session. In an 

effort to simplify the treatment of order 

handling on the Exchange, NASDAQ is 

proposing to harmonize how MDAY 

orders entered after the closing cross is 

initiated are handled. Specifically, 

NASDAQ is proposing to no longer 

accept orders with a time-in-force of 

MDAY that are entered after initiation of 

the Lockdown Period. The Exchange 

notes that not accepting orders after the 

Closing Cross is initiated will simplify 

market participant processing and avoid 

confusion concerning how such orders 

are handled upon conclusion of the 

Regular Market Session. Lastly, with the 

proposed implementation of the 

Lockdown Period, such simplification 

will also aid NASDAQ in operating the 

Closing Cross by reducing the logical 

steps necessary to process MDAYdesignated orders. As a consequence, 

NASDAQ is adding language to the rule 

to reflect that such orders will not be 

accepted after 4:00 p.m. 

Similarly, NASDAQ is proposing to 

modify the processing of Good-tilmarket close orders (‘‘GTMC’’).16 GTMC 

is a time-in-force characteristic of 

orders, which allows the order to be 

executed from 4:00 a.m. to 8:00 p.m. 

Eastern Time. GTMC orders entered 

after the Closing Cross are converted to 

a time-in-force of System Hours 

Immediate or Cancel. In lieu of 

converting such orders, NASDAQ is 

proposing to no longer accept GTMC 

orders after initiation of the Lockdown 

Period at 4:00 p.m. Eastern Time. As a 

consequence, NASDAQ is amending 

language in the rule concerning 

acceptance of GTMC orders up to 8:00 

p.m. Eastern Time to reflect that such 

orders will not be accepted after 4:00 

p.m., and is deleting text concerning 

conversion of the order. NASDAQ is 

also making a technical change to the 

rule text to harmonize the terminology 

used under the other time-in-force 

designations under Rule 4751(h). 

Specifically, NASDAQ is replacing the 

word ‘‘and’’ with ‘‘until.’’ 

The Exchange plans on implementing 

the proposed changes in mid-February 

2015, and will provide at least 30 days 

prior notice of the implementation date 

and testing opportunities for member 

firms via an Equity Trader Alert. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes [sic] are 

consistent with Section 6 of the Act, in 

general, and further the objectives of 

Section 6(b)(5) of the Act, in particular, 

in that they are 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; and 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. Specifically, 

the proposed changes promote just and 

equitable principles of trade and perfect 

the mechanisms of a free and open 

market and the national market system 

by providing greater clarity concerning 

the System’s operation during the 

closing process and how orders with 

certain time-in-force characteristics are 

processed at the market close. In 

addition, the proposed changes will 

contribute to the protection of investors 

and the public interest by making the 

Exchange’s rules easier to understand. 

The proposed change to implement the 

Lockdown Period is designed to 

promote a stable closing process and 

avoid the impact of erroneous order 

activity on the market close process. 

Closing the order book to new orders 

and cancellations during the very brief 

period between the initiation of the 

closing process at 4:00 p.m. Eastern 

Time and the completion of the last 

Closing Cross will ensure that the 

System is able to cross all securities 

without impact from erroneous order 

activity in a single security. 

Accordingly, the proposed change 

promotes a fair and orderly market 

during the closing process, and thereby 

further perfects the mechanism of a free 

and open market. The proposed changes 

to the processing of MDAY-designated 

orders further these objectives because 

they simplify processing of orders, 

thereby avoiding any market participant 

confusion on how such orders are 

treated when entered after the Regular 

Market Session has ended. Uniformly 

rejecting such orders, which are 

designed to execute during Regular 

Market Session, is consistent with a 

market participant’s intent to execute 

during Regular Market Session and will 

remove complication in the handling of 

such orders. To the extent a member 

firm would like to participate in postmarket hours trading, it may enter a new 

order eligible to participate in postmarket trading. Likewise, the proposed 

changes to the processing of GTMCdesignated orders further these 

objectives because the changes simplify 

processing of such orders when entered 

after the Closing Cross process has 

begun. Rather than converting GTMCdesignated orders to an order with a 

different time-in-force if entered after 

the market close, NASDAQ will no 

longer accept them once the Closing 

Cross has been initiated, which is 

consistent with a market participant’s 

intent to execute during the period from 

4:00 a.m. and 4:00 p.m. As noted above, 

to the extent a member firm would like 

to participate in post-market hours 

trading, it may enter a new order 

eligible to participate in post-market 

trading. Moreover, simplifying the 

processing of both MDAY- and GTMCdesignated orders will remove 

complication in the handling of such 

orders, thereby further improving the 

operation of the market. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

Specifically, the changes are designed to 

promote consistency and stability in the 

closing process and in the handling of 

orders after the Regular Market Session 

has ended. Such changes do not place 

a burden on competition between 

market participants as the changes are 

applied consistently to all participants. 

Moreover, the proposed changes do not 


asabaliauskas on DSK5VPTVN1PROD with NOTICES
Federal Register / Vol. 80, No. 1 / Friday, January 2, 2015 / Notices 71 

17 15 U.S.C. 78s(b)(3)(a)(ii). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

impose a burden on competition among 

exchanges as they are done for 

regulatory purposes and are therefore 

irrelevant to competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 17 and 

subparagraph (f)(6) of Rule 19b–4 

thereunder.18 At any time within 60 

days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NASDAQ–2014–123 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. 

All submissions should refer to File 

Number SR–NASDAQ–2014–123. 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 Number SR– 

NASDAQ–2014–123 and should be 

submitted on or before January 2, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Brent J. Fields, 

Secretary. 

[FR Doc. 2014–30702 Filed 12–31–14; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–73942; File No. SR–MIAX– 

2014–66] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change to Amend the MIAX Options 

Fee Schedule 

December 24, 2014. 

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 December 

19, 2014, Miami International Securities 

Exchange LLC (‘‘MIAX’’ or the 

‘‘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 is filing a proposal to 

amend the MIAX Options Fee Schedule. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.miaxoptions.com/filter/

wotitle/rule_filing, at MIAX’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 those 

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 parts 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 amend its 

Fee Schedule to increase the monthly 

fee for Internal Distributors and External 

Distributors of MIAX Top of Market 

(‘‘ToM’’) and Administrative 

Information Subscriber (‘‘AIS’’). 

Specifically, the Exchange proposes to: 

(i) Increase the fee charged to Internal 

Distributors of ToM and AIS from 

$1,000 to $1,250 per month; and (ii) 

increase the fee charged to External 

Distributors of ToM and AIS from 

$1,500 to $1,750 per month. 

The Exchange charges monthly fees to 

Distributors of the ToM and AIS market 

data products that receive a feed of data 

either directly from MIAX or indirectly 

through another entity and then 


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