Document ID: SEC-2017-0582-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market, LLC
Posted Date: 2017-04-12T04:00Z

[Federal Register Volume 82, Number 69 (Wednesday, April 12, 2017)]
[Notices]
[Pages 17714-17716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-07308]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80391; File No. SR-NASDAQ-2017-034]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend the Implementation Date of Its Functionality Relating to 
Midpoint Peg Post-Only Orders and Orders With Midpoint Pegging

April 6, 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 March 31, 2017, 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the implementation date of its 
functionality relating to Midpoint Peg Post-Only Orders and Orders with 
Midpoint Pegging.
    There is no rule text for this proposed rule change.

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

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    Nasdaq is filing this proposal to extend the implementation date of 
its functionality relating to Midpoint Peg

[[Page 17715]]

Post-Only Orders and Orders with Midpoint Pegging. The functionality 
relating to Midpoint Peg Post-Only Orders and Orders with Midpoint 
Pegging was approved by the SEC on November 10, 2016.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 79290 (November 10, 
2016), 81 FR 81184 (November 17, 2016) (SR-NASDAQ-2016-111).
---------------------------------------------------------------------------

    Nasdaq proposed to amend Rule 4702 (Order Types) to change its 
Midpoint Peg Post-Only Order, so that, if the NBBO is crossed, any 
existing Midpoint Peg Post-Only Order would be cancelled and any new 
Midpoint Peg Post-Only Order would be rejected. Similarly, Nasdaq 
proposed to amend Rule 4703 (Order Attributes) so that, if the Inside 
Bid and Inside Offer are crossed, any existing Order with Midpoint 
Pegging would be cancelled and any new Order with Midpoint Pegging 
would be rejected.\4\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 79290 (November 10, 
2016), 81 FR 81184 (November 17, 2016) (SR-NASDAQ-2016-111).
---------------------------------------------------------------------------

    Nasdaq initially proposed to implement this new functionality on 
November 21, 2016.\5\ However, Nasdaq decided to delay the 
implementation of this new functionality to provide additional time for 
systems testing to no later than March 31, 2017.\6\
---------------------------------------------------------------------------

    \5\ See Equity Trader Alert #2016-291.
    \6\ See Securities Exchange Act Release No. 80045 (February 15, 
2017), 82 FR 11389 (February 22, 2017) (SR-NASDAQ-2017-013).
---------------------------------------------------------------------------

    Nasdaq has now determined to delay the implementation of the 
functionality relating to Midpoint Peg Post-Only Orders and Orders with 
Midpoint Pegging to no later than May 31, 2017 to allow additional time 
for systems testing. Nasdaq will announce the new implementation date 
by an Equity Trader Alert, which shall be issued prior to the 
implementation date.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\7\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\8\ 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. 
The purpose of this proposal is to inform the SEC and market 
participants of the new implementation date for the functionality 
relating to Midpoint Peg Post-Only Orders and Orders with Midpoint 
Pegging. This functionality was previously proposed in a rule filing 
that was submitted to the SEC, and this proposal does not change the 
substance of this functionality. Nasdaq is delaying the implementation 
date of this functionality to provide for further systems testing prior 
to implementing this functionality.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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. As noted above, the purpose of 
this proposal is to extend the implementation date for the 
functionality relating to Midpoint Peg Post-Only Orders and Orders with 
Midpoint Pegging so that Nasdaq may perform additional systems testing 
prior to implementing this functionality.

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 and Rule 19b-
4(f)(6) thereunder.\9\
---------------------------------------------------------------------------

    \9\ 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.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \11\ 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 proposal may become operative immediately upon filing. The Exchange 
previously announced that it would implement the functionality relating 
to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging no 
later than March 31, 2017.\12\ The Exchange now proposes to delay the 
implementation date to no later than May 31, 2017. Waiver of the 30-day 
operative delay would allow the Exchange to immediately extend the 
implementation date and provide additional time for systems testing. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the 30-day operative delay and 
designates the proposal operative upon filing.\13\
---------------------------------------------------------------------------

    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ See supra note 6.
    \13\ For 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).
---------------------------------------------------------------------------

    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-2017-034 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-2017-034. 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

[[Page 17716]]

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; 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-2017-034 and should be submitted on or before May 
3, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07308 Filed 4-11-17; 8:45 am]
 BILLING CODE 8011-01-P