Document ID: SEC-2013-1141-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ Stock Market, LLC
Posted Date: 2013-06-25T04:00Z

[Federal Register Volume 78, Number 122 (Tuesday, June 25, 2013)]
[Notices]
[Pages 38089-38090]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-15083]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69801; File No. SR-NASDAQ-2013-086]

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 4120 To Adopt a Modification in the Process for Initiating 
Trading of a Security That Is the Subject of an Initial Public Offering 
on NASDAQ

June 19, 2013.
    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 June 13, 2013, The NASDAQ Stock Market LLC (``NASDAQ'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a 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.
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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 Substance 
of the Proposed Rule Change

    NASDAQ proposes to amend Rule 4120 to adopt a modification in the 
process for initiating trading of a security that is the subject of an 
initial public offering (an ``IPO'') on NASDAQ. NASDAQ proposes to 
implement the proposed rule change on a date that is on, or shortly 
after, the expiration of the pre-operative delay provided for in Rule 
19b-4(f)(6)(iii).\3\ 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.
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    \3\ 17 CFR 242.19b-4(f)(6)(iii).
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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 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
    In 2012, NASDAQ modified its process for commencing trading of a 
security that is the subject of an IPO on NASDAQ by allowing market 
participants to enter orders to be held in an undisplayed state until 
the commencement of the Display-Only Period that occurs prior to the 
IPO.\4\ Pursuant to the change made last year, Rule 4120(c)(7)(B) 
currently provides that market participants may enter Market Hours Day 
Orders (``MDAY Orders'') in a security that is the subject of an IPO on 
NASDAQ and designate such orders to be held until the beginning of the 
Display-Only Period. Such orders will be held in an undisplayed state 
until the beginning of the Display-Only Period, at which time they will 
be entered into the system. NASDAQ is proposing to modify the rule 
slightly by providing that any order in a security that is the subject 
of an IPO, regardless of its time-in-force, may be designated to be 
held until the beginning of the Display-Only Period. NASDAQ believes 
that the quality of its process for commencing IPO trading will be 
enhanced by the change, which may result in a higher level of order 
interaction at the open by allowing more orders to interact at the 
commencement of trading.
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    \4\ Securities Exchange Act Release No. 66652 (March 23, 2012), 
77 FR 13129 (March 29, 2012) (SR-NASDAQ-2012-038).
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2. Statutory Basis
    NASDAQ believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\5\ in general, and with Section 
6(b)(5) of the Act,\6\ in particular, in that the proposal 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. Specifically, NASDAQ 
believes that the proposed rule change will result in a greater number 
of orders being entered prior to commencement of trading of IPO 
securities, resulting in a higher level of order interaction at the 
open. Thus, NASDAQ believes that the change will remove impediments to 
and perfect the mechanism of a free and open market.
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    \5\ 15 U.S.C. 78f.
    \6\ 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. Specifically, 
NASDAQ believes that this change will provide for a greater number of 
orders being entered prior to commencement of trading, resulting in a 
higher level of order interaction. NASDAQ believes that this change 
will promote competition by enhancing the attractiveness of NASDAQ as a 
trading venue through higher order fill rates and more complete price 
discovery. Moreover, because the change will not affect the 
availability or price of goods or services offered by NASDAQ or others, 
it will not impose any burden on competition.

[[Page 38090]]

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) of the Act \7\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\ 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.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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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-2013-086 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2013-086. 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 
NASDAQ. 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-2013-086, and should be submitted on or before July 16, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-15083 Filed 6-24-13; 8:45 am]
BILLING CODE 8011-01-P