Document ID: SEC-2015-0734-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The NASDAQ Stock Market LLC
Posted Date: 2015-04-29T04:00Z

[Federal Register Volume 80, Number 82 (Wednesday, April 29, 2015)]
[Notices]
[Pages 23839-23841]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-09917]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74795; File No. SR-NASDAQ-2015-038]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Postpone Implementation of Changes to Rules 4751(h) and 4754(b) 
Relating to the Closing Process

April 23, 2015.
    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 April 13, 2015, 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 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to postpone implementation of 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.

[[Page 23840]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ is proposing to delay implementation of changes to Rules 
4751(h) and 4754(b) relating to the closing process, which are 
effective but not yet implemented. On December 16, 2014, the Exchange 
filed an immediately effective filing \3\ to amend the processing of 
the Closing Cross under Rule 4754(b) to adopt a ``Lockdown Period,'' 
the point at which NASDAQ will close the order book for participation 
in the Closing Cross. The Exchange also amended Rule 4751(h) to 
harmonize the processing of Market Hours Day orders \4\ and Good-til-
market close orders \5\ upon initiation of the Lockdown Period.
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    \3\ Securities Exchange Act Release No. 73943 (December 24, 
2014), 80 FR 69 (January 2, 2015) (SR-NASDAQ-2014-123).
    \4\ See Rule 4751(h)(6).
    \5\ See Rule 4751(h)(8).
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    The Exchange had originally anticipated implementing the changes in 
mid-February 2015, after the expiration of the 30-day operative delay 
provided by Rule 19b-4(f)(6)(iii) under the Act.\6\ The Exchange 
subsequently extended the period for implementation to Monday, April 
13, 2015.\7\
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    \6\ 17 CFR 240.19b-4(f)(6)(iii).
    \7\ Securities Exchange Act Release No. 74342 (February 20, 
2015), 81 FR 10562 (February 26, 2015) (SR-NASDAQ-2015-14 [sic]).
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    Based upon the Exchange's final internal pre-implementation 
testing, however, the Exchange has determined not to proceed with the 
scheduled implementation. Out of an abundance of caution, the Exchange 
will instead conduct an additional industry-wide User Acceptance Test 
to ensure the proper function of the proposed changes. Upon successful 
completion of that test, the Exchange will determine a new 
implementation date and provide notice of the new date to the industry.
2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\8\ in general, and with Section 
6(b)(5) of the Act,\9\ in particular, because it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest; and is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers. The Exchange believes that the changes NASDAQ is making to 
Rules 4751(h) and 4754(b) promote consistency and transparency in the 
process for handling orders in the closing process. Delaying 
implementation of the changes for brief period so that NASDAQ may 
implement the changes to its systems necessary to ensure that the 
Lockdown Period and processing of Market Hours Day and Good-til-market 
close orders are handled in the Closing Cross operate as planned 
promotes fair and orderly markets, the protection of investors and the 
public interest.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NASDAQ does not believe that the proposed rule change will result 
in any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.\10\ The Exchange 
believes that the proposal is irrelevant to competition because it is 
not driven by, and will have no impact on, competition. Specifically, 
the proposal is representative of the Exchange's efforts to harmonize 
and simplify the processing of orders during the closing process.
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    \10\ 15 U.S.C. 78f(b)(8).
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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

    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)(iii) of the Act \11\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\12\
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    \11\ 15 U.S.C. 78s(b)(3)(a)(iii).
    \12\ 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 did not satisfy this requirement. Nonetheless, the 
Commission has waived the pre-filing requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission 
may 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 NASDAQ may 
implement the proposed rule change immediately. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because it will allow 
NASDAQ the opportunity to conduct further testing to ensure the proper 
function of the proposed changes before implementing them. Therefore, 
the Commission hereby waives the 30-day operative delay and designates 
the proposed rule change to be operative upon filing with the 
Commission.\15\
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    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
    \15\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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-2015-038 on the subject line.

[[Page 23841]]

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-2015-038. 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-2015-
038, and should be submitted on or before May 20, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2015-09917 Filed 4-28-15; 8:45 am]
 BILLING CODE 8011-01-P