50198 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). As required under Rule 

19b–4(f)(6)(iii), the Exchange provided the 

Commission with written notice of its intent to file 

the proposed rule change, along with a brief 

description and the text of 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. 

12 17 CFR 240.19b–4(f)(6). 

13 17 CFR 240.19b–4(f)(6)(iii). 

14For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

necessary or appropriate in furtherance 

of the purposes of the Act, as the rule 

text to be removed has become obsolete 

with the migration of all symbols to the 

Nasdaq INET system and the 

corresponding adoption of the systemsbased mechanism for enforcing the price 

improvement requirement where the 

Agency Order is for less than 50 option 

contracts, and if the differences between 

the NBBO is $0.01. 

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 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) of the Act 10 and Rule 19b– 

4(f)(6) thereunder.11

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 12 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 13

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay so that the proposed 

rule change may become operative upon 

filing. The Exchange states that waiver 

of the operative delay will allow the 

Exchange to remove the obsolete rule 

text immediately, minimizing potential 

investor confusion. The Commission 

believes the waiver of the operative 

delay is consistent with the protection 

of investors and the public interest. 

Accordingly, the Commission hereby 

waives the operative delay and 

designates the proposed rule change 

operative upon filing.14

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 necessary or appropriate in the 

public interest, for the protection of 

investors, or 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– 

GEMX–2017–49 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–GEMX–2017–49. 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. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–GEMX–2017–49, and 

should be submitted on or before 

November 20, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Robert W. Errett, 

Deputy Secretary. 

[FR Doc. 2017–23484 Filed 10–27–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81930; File No. SR–

NASDAQ–2017–107] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend 

Nasdaq Closing Cross Rules 

October 24, 2017. 

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 October 

10, 2017, The NASDAQ Stock Market 

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

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 4702 (Order Types) and Rule 4754 

[sic] (Nasdaq Closing Cross) to enhance 

the Nasdaq Closing Cross by permitting 

members to submit LOC Orders until 

immediately prior to 3:55 p.m. ET 

subject to certain conditions, and to 

make other changes related to Closing 

Cross/Extended Hours Orders [sic]. 

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 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices 50199 

3A ‘‘Limit On Close Order’’ or ‘‘LOC Order’’ is 

an Order Type entered with a price that may be 

executed only in the Nasdaq Closing Cross, and 

only if the price determined by the Nasdaq Closing 

Cross is equal to or better than the price at which 

the LOC Order was entered. See Rule 4702(b)(12). 

4See Securities Exchange Act Release No. 81188 

(July 21, 2017), 82 FR 35014 (July 27, 2017) (SR– 

NASDAQ–2017–061). 

5See Securities Exchange Act Release No. 81556 

(September 8, 2017), 82 FR 43264 (September 14, 

2017) (SR–NASDAQ–2017–061) (Approval Order). 

6See Equity Trader Alert #2017–184. 

7See Rule 4702(b)(7). 

8A Closing Cross/Extended Hours Order is an 

order that is flagged to participate in the Nasdaq 

Closing Cross and has a Time-in-Force that 

continues after the time of the Nasdaq Closing 

Cross. 

9 ‘‘First Reference Price’’ is the Current Reference 

Price in the first Order Imbalance Indicator 

disseminated at or after 3:50 p.m. ET. See Rule 

4754(a)(9). 

10See Rule 4702(b)(12)(A). 

11See Securities Exchange Act Release No. 74892 

(May 6, 2015), 80 FR 27513 (May 13, 2015) (Order 

Approving the Tick Size Pilot Program). See also 

Rule 4770 (Compliance with Regulation NMS Plan 

to Implement a Tick Size Pilot). 

12The Exchange recently informed market 

participants that it will pause the rollout of the 

remaining symbols for the enhancements to the 

Nasdaq Closing Cross approved by the Commission 

on September 8, 2017, in an effort to provide further 

customer testing opportunities. See Nasdaq Equity 

Trader Alert #2017–189. The Exchange anticipates 

continuing the implementation in the near future, 

with its completion in the fourth quarter consistent 

with its proposal. The Exchange will release an 

Equity Trader Alert announcing resumption of the 

rollout schedule. 

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 

On July 13, 2017, the Exchange filed 

a proposed rule change to amend Rule 

4702 (Order Types) and Rule 4754 

(Nasdaq Closing Cross) to enhance the 

Nasdaq Closing Cross by permitting 

members to submit Limit On Close 

(‘‘LOC’’) Orders 3 until immediately 

prior to 3:55 p.m. ET subject to certain 

conditions.4 This proposed rule change 

was approved by the Commission on 

September 8, 2017,5 and the Exchange 

began to introduce this functionality 

pursuant to a symbol-by-symbol rollout 

beginning on October 2, 2017.6 The 

purpose of the proposed rule change is 

to amend the Nasdaq Closing Cross 

rules to: (1) Reject all Market Maker Peg 

Orders flagged to participate in the 

Nasdaq Closing Cross; and (2) account 

for the minimum increment for Tick 

Size Pilot securities when re-pricing 

LOC Orders entered between 3:50 p.m. 

ET and immediately prior to 3:55 p.m. 

ET. 

A ‘‘Market Maker Peg Order’’ is an 

Order Type designed to allow a Market 

Maker to maintain a continuous twosided quotation at a displayed price that 

is compliant with the quotation 

requirements for Market Makers set 

forth in Rule 4613(a)(2).7 Pursuant to 

SR–NASDAQ–2017–061, a Market 

Maker Peg Order will not be permitted 

to operate as a Closing Cross/Extend 

Hours Order.8 Instead, such orders will 

be rejected. Market Maker Peg Orders 

would, however, remain permitted to be 

flagged to participate solely in the 

Nasdaq Closing Cross if entered with a 

time-in-force (‘‘TIF’’) that does not 

continue after the time of the Nasdaq 

Closing Cross. After additional 

consideration, the Exchange believes 

that all Market Maker Peg Orders 

flagged with an on-close instruction 

should be rejected. The Exchange 

therefore proposes to amend its rules to 

state that a Market Maker Peg Order may 

not be flagged to solely participate in 

the Nasdaq Closing Cross. This will 

supplement current language stating 

that such Market maker Peg Orders may 

not operate as Closing Cross/Extended 

Hours Orders. With this change, all 

Market Maker Peg Orders entered with 

an on-close instruction will be rejected, 

regardless of whether the order is 

entered with a TIF that continues after 

the Nasdaq Closing Cross. The Exchange 

believes that this change will more 

closely align with member expectations 

and the design of this order type, which 

is to assist members with their quoting 

obligations. Market Maker Peg Orders 

that are not entered with an on-close 

instruction will remain eligible to 

participate in the Nasdaq Closing Cross 

if the order remains unexecuted at the 

time of the Nasdaq Closing Cross. 

Furthermore, when the Nasdaq 

Closing Cross changes are introduced, 

the Exchange will re-price LOC Orders 

entered between 3:50 p.m. ET and 

immediately prior to 3:55 p.m. ET to the 

less aggressive of the order’s limit price 

or the First Reference Price 9 in order to 

prevent these orders from having a 

significant impact on the price 

established by the Nasdaq Closing 

Cross.10 In addition, Rule 4702 provides 

that if the First Reference Price is not at 

a permissible minimum increment of 

$0.01 or $0.0001, as applicable, the First 

Reference Price will be rounded (i) to 

the nearest permitted minimum 

increment (with midpoint prices being 

rounded up) if there is no imbalance, (ii) 

up if there is a buy imbalance, or (iii) 

down if there is a sell imbalance. 

Although the rule explicitly mentions 

the regular trading increments of $0.01 

or $0.0001, however, it does not account 

for the minimum increments approved 

for securities selected for inclusion in 

the Tick Size Pilot Program, which are 

subject to $0.05 minimum increments.11

The Exchange therefore proposes to 

remove the explicit reference to these 

specific minimum increments. With the 

proposed change, the rule will state that 

if the First Reference Price is not at a 

permissible minimum increment, the 

First Reference Price will be rounded (i) 

to the nearest permitted minimum 

increment (with midpoint prices being 

rounded up) if there is no imbalance, (ii) 

up if there is a buy imbalance, or (iii) 

down if there is a sell imbalance. The 

Exchange believes that this change will 

avoid potential member confusion with 

respect to the application of this rule to 

securities selected for inclusion in the 

Tick Size Pilot Program, and help 

ensure compliance with the Tick Size 

Pilot Program. 

Implementation 

The Exchange proposes to introduce 

the changes described in this proposed 

rule change on October 10, 2017. The 

Exchange began the rollout of 

functionality described in SR– 

NASDAQ–2017–061, as announced to 

members via Equity Trader Alert, with 

three symbols, VSAT, TEAM, and UNIT. 

The rollout of those changes will 

continue in the fourth quarter of 2017 

after the completion of additional 

industry testing of the functionality.12

The Exchange believes that 

implementing the proposed change to 

Market Maker Peg Order handling is 

important for the operation of the three 

symbols to which the functionality 

proposed in SR–NASDAQ–2017–061 

currently applies. The changes to 

Market Maker Peg Order handling 

proposed herein cannot be applied on a 

symbol-by-symbol basis, but rather must 

be applied to all symbols 

simultaneously. Accordingly, the 

Exchange is proposing to implement the 


sradovich on DSK3GMQ082PROD with NOTICES
50200 Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

15 15 U.S.C. 78s(b)(3)(A). 

16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and the text of 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 

Commission has waived this requirement. 

17 17 CFR 240.19b–4(f)(6). 

18 17 CFR 240.19b–4(f)(6)(iii). 

19For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

proposed changes applied to all symbols 

on October 10, 2017. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,13 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,14

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest. 

When the Exchange filed to restrict 

Market Maker Peg Orders from 

operating as Closing Cross/Extended 

Hours Orders, the Exchange explained 

that Market Maker Peg Orders were 

designed to assist members in meeting 

their quoting obligations and not as a 

means of submitting interest flagged 

with an on-close instruction. 

Furthermore, the Exchange explained 

that it did not believe that members 

want functionality that allows Market 

Maker Peg Orders to be entered with a 

flag designating an on-close instruction. 

The Exchange believes that this is true 

both for Market Maker Peg Orders 

entered with a TIF that continues after 

the time of the Nasdaq Closing Cross, 

and that therefore operate as Closing 

Cross/Extended Hours Orders, and 

Market Maker Peg Orders entered with 

a TIF that causes it to execute solely in 

the Nasdaq Closing Cross. The Exchange 

is therefore proposing to reject all 

Market Maker Peg Orders flagged to 

participate in the Nasdaq Closing Cross, 

regardless of TIF. The Exchange believes 

that this change will perfect the 

mechanism of a free and open market by 

eliminating the possibility that members 

can inadvertently enter this order type 

combination, while preserving the 

design of Market Maker Peg Orders to 

aid members in meeting their quoting 

obligations. 

In addition, the Exchange believes 

that the current language in Rule 4702 

could be confusing to members and 

investors when applied to securities that 

are selected for inclusion in the Tick 

Size Pilot Program, as these securities 

are subject to a $0.05 minimum 

increment instead of the $0.01 or 

$0.0001 minimum increments cited in 

the rule today. The Exchange believes 

that removing the reference to these 

specific increments will reduce 

confusion because permissible 

minimum increments may be $0.01 or 

$0.0001 for most securities, and $0.05 

for a handful of securities selected for 

inclusion in the Tick Size Pilot Program. 

The Exchange must round to a 

permissible minimum increment 

whenever the First Reference Price is 

not in such a minimum increment. The 

proposed rule change makes this clear 

and will therefore increase transparency 

to the benefit of members and investors, 

and help ensure compliance with the 

Tick Size Pilot Program. 

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. With respect 

to Market Maker Peg Orders flagged for 

the Nasdaq Closing Cross, the proposed 

change eliminates an order type 

combination that is not consistent with 

the purpose of aiding members in 

meeting their quoting obligations. 

Furthermore, the proposed change 

related to minimum increments 

properly reflects the increments 

applicable to securities traded on the 

Exchange, including securities selected 

for inclusion in the Tick Size Pilot 

Program. Neither of these proposed 

changes is designed to have any 

significant competitive impact. 

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) of the Act 15 and Rule 19b– 

4(f)(6) thereunder.16

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 17 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6)(iii) 18

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. The Exchange has asked 

the Commission to waive the 30-day 

operative delay. The Commission notes 

that waiver of the operative delay would 

allow the Exchange to implement the 

proposed change to Market Maker Peg 

Orders for all symbols without delay, 

including the three symbols to which 

the functionalities described in SR– 

NASDAQ–2017–061 currently apply. 

Moreover, the proposed change relating 

to minimum increments is designed to 

avoid confusion and help ensure 

compliance with the Tick Size Pilot 

Program. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposed rule change 

operative upon filing.19

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 necessary or appropriate in the 

public interest, for the protection of 

investors, or 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 

change 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–2017–107 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. 


sradovich on DSK3GMQ082PROD with NOTICES
Federal Register / Vol. 82, No. 208 / Monday, October 30, 2017 / Notices 50201 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 76998 

(January 29, 2016), 81 FR 6066 (February 4, 2016) 

(File No. 10–221). 

4See Securities Exchange Act Release No. 79539 

(December 13, 2016), 81 FR 91982 (December 19, 

2016) (SR–ISEMercury–2016–25). The Exchange 

notes that, on April 3, 2017, ISE Mercury, LLC was 

renamed Nasdaq MRX, LLC to reflect its new 

placement within the Nasdaq, Inc. corporate 

structure in connection with the March 9, 2016 

acquisition by Nasdaq of the capital stock of U.S. 

Exchange Holdings, and the indirect acquisition all 

of the interests of the International Securities 

Exchange, LLC, ISE Gemini, LLC and ISE Mercury, 

LLC. See Securities Exchange Act Release No. 

80326 (March 29, 2017), 82 FR 16460 (April 4, 

2017) (SR–ISEMercury–2017–05). 

5See Securities Exchange Act Release No. 79841 

(January 18, 2017), 82 FR 8452 (January 25, 2017) 

(SR–ISEMercury–2016–25). 

All submissions should refer to File 

Number SR–NASDAQ–2017–107. 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 also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2017–107 and 

should be submitted on or before 

November 20, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–23478 Filed 10–27–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81934; File No. SR–MRX– 

2017–22] 

Self-Regulatory Organizations; Nasdaq 

MRX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Rule 723 To 

Remove Obsolete Rule Text 

October 24, 2017. 

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 October 

17, 2017, Nasdaq MRX, LLC (‘‘MRX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Rule 723 (Price Improvement 

Mechanism for Crossing Transactions) 

to remove obsolete rule text. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at www.ise.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 proposes to amend 

Rule 723 (Price Improvement 

Mechanism for Crossing Transactions) 

to remove obsolete rule text. 

Rule 723 sets forth the requirements 

for the PIM, which was adopted as part 

of the Exchange’s application to be 

registered as a national securities 

exchange.3 Certain aspects of PIM were 

adopted on a pilot basis (‘‘Pilot’’); 

specifically, the termination of the 

exposure period by unrelated orders, 

and no minimum size requirement of 

orders eligible for PIM. The Pilot 

expired on January 18, 2017. 

On December 12, 2016, the Exchange 

filed with the Commission a proposed 

rule change to make the Pilot 

permanent, and also to change the 

requirements for providing price 

improvement for Agency Orders of less 

than 50 option contracts (other than 

auctions involving Complex Orders) 

where the National Best Bid and Offer 

(‘‘NBBO’’) is only $0.01 wide.4 The 

Commission approved this proposal on 

January 18, 2017.5

In modifying the requirements for 

price improvement for Agency Orders of 

less than 50 contracts, the Exchange 

proposed to amend Rule 723(b) to 

require Electronic Access Members to 

provide at least $0.01 price 

improvement for an Agency Order if 

that order is for less than 50 contracts 

and if the difference between the NBBO 

is $0.01. 

The Exchange adopted a member 

conduct standard to implement this 

requirement during the time pursuant to 

which ISE Mercury symbols were 

migrating from the ISE Mercury 

platform to the Nasdaq INET platform. 

At the time it proposed the member 

conduct standard, the Exchange 

anticipated that the migration to the 

Nasdaq platform would be complete on 

or before September 15, 2017. 

Accordingly, Rule 723(b) stated that, for 

the period beginning January 19, 2017 

until a date specified by the Exchange 

in a Regulatory Information Circular, 

which date shall be no later than 

September 15, 2017, if the Agency Order 

is for less than 50 option contracts, and 

if the difference between the NBBO is 

$0.01, an Electronic Access Member 

shall not enter a Crossing Transaction 

unless such Crossing Transaction is 

entered at one minimum price 

improvement increment better than the 

NBBO on the opposite side of the 

market from the Agency Order, and 

better than the limit order or quote on 

the Nasdaq MRX order book on the 

same side of the Agency Order. This 

requirement applied regardless of 

whether the Agency Order is for the 

account of a public customer, or where 

the Agency Order is for the account of 


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