Document ID: SEC-2023-1158-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: The Nasdaq Stock Market, LLC
Posted Date: 2023-10-04T04:00Z

[Federal Register Volume 88, Number 191 (Wednesday, October 4, 2023)]
[Notices]
[Pages 68760-68762]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21931]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98582; File No. SR-NASDAQ-2023-038]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Related to Equity 7, Section 115

September 28, 2023.
    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 September 22, 2023, The Nasdaq Stock Market LLC (the ``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 Substance 
of the Proposed Rule Change

    The Exchange proposes to clarify the migration timeline and billing 
related to the Exchange's enhanced connectivity, surveillance and risk 
management services under Equity 7, Section 115 (Ports and Services).
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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
    Nasdaq is filing this proposal to clarify the migration timeline 
and billing related to the Exchange's enhanced connectivity, 
surveillance and risk management services. In April 2021, Nasdaq 
launched three re-platformed products: (i) WorkX, (ii) Real-Time Stats 
and (iii) Post-Trade Risk Management.\3\ These changes were filed by 
Nasdaq on April 20, 2021 and published in the Federal Register on May 
7, 2021.\4\ The Exchange noted in the Proposal that as it rolls out the 
enhanced products, the fees for the re-platformed products would be the 
same as the fees for the corresponding legacy products. Additionally, 
the Exchange noted that after the first month of service on each of the 
re-platformed products, a customer will be expected to fully migrate to 
the enhanced product and will be charged for any fees incurred for 
using the new products thereafter. On January 31, 2022, the Exchange 
increased the fees for the enhanced products and continued to offer the 
waiver for the first month of service.\5\
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    \3\ The corresponding non-re-platformed products are (1) ACT 
Workstation; (2) Nasdaq InterACT; and (3) Nasdaq Risk Management, 
respectively (collectively, ``legacy products'').
    \4\ See Securities Exchange Act Release No. 91744 (May 3, 2021), 
86 FR 24685 (May 7, 2021) (NASDAQ-2021-025) (``Proposal'').
    \5\ See Securities Exchange Act Release No. 91744 (Jan. 31, 
2022), 87 FR 9096 (Feb. 17, 2022) (NASDAQ-2022-012).
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    Although the Exchange expected to fully migrate customers within 
one month from initiating migration, the process has taken longer due 
to the Exchange having to make additional system updates that were 
needed to support the enhanced products. As a result, the Exchange 
continues to assist its customers in migrating to the enhanced 
products. To date, customers continue to utilize the legacy products 
and have not fully migrated over to the enhanced products.\6\ To date, 
the Exchange has only charged customers for their use of the legacy 
products even if the customer has access to both the legacy and 
enhanced products. Due to the Exchange's delay in facilitating the full 
migration, customers will not be charged for utilizing the enhanced 
products until the full migration process is completed. The Exchange is 
now at a point where it can facilitate customer migration to the 
enhanced products.
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    \6\ Most customers have begun migrating to Nasdaq WorkX and 
Real-Time Stats, and the Exchange intends to start migrating 
customers to Post-Trade Risk Management in the upcoming weeks.
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    Customers will be expected to complete the migration process for 
all enhanced products by November 30, 2023. For customers using both 
the legacy and re-platformed products, fees for the re-platformed 
product will be waived for December 2023. The Exchange will announce 
the migration deadline of November 30, 2023 in an Equity Trader Alert 
at least 30 days in advance of the deadline. Any customer who continue 
to utilize the legacy products after the migration deadline (i.e., 
December 1, 2023 or thereafter) will be charged for both the legacy and 
enhanced products until the Exchange retires the legacy products. If a 
customer

[[Page 68761]]

elects to solely use a legacy product after November 30, the customer 
may use the product until the Exchange retires the product. If a 
customer elects to switch to the re-platformed product after November 
30, the customer will have one month to fully migrate to the enhanced 
product.
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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Exchange also believes that it is just and equitable, and in 
the interests of the public and investors, for the Exchange to provide 
a deadline of November 30, 2023 for customers to migrate to Nasdaq 
WorkX, Real-Time Stats and Post-Trade Risk Management, and to clarify 
customer billing during the migration period. The Exchange is not 
proposing with this filing any changes to the re-platformed product 
fees or legacy product fees. The Exchange believes that requiring 
customers to migrate by November 30, 2023, is reasonable because 
customers have had the opportunity to engage in months of testing prior 
to migration and the Exchange's system is fully prepared to accommodate 
full migration of all customers.
    The Exchange also believes that it is reasonable to provide one-
month migration period to customers who choose to migrate after the 
November 30. One month was the duration that the Exchange initially 
intended for migration, and system updates have eliminated any future 
migration delays. The Exchange believes that the public and investors 
will benefit from providing a clear deadline for migrating to the re-
platformed products and will also benefit from clarifying billing 
during the transition period, which will help limit any potential 
confusion in the future.

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 explained above, the purpose 
of this proposal is to provide a deadline for customers to fully 
migrate to the re-platformed products and to clarify customer billing 
during the migration period. The Exchange does not expect the migration 
deadline to place any burden on competition. Customers will have the 
option of requesting to continue to utilize the legacy products after 
the migration deadline and will be charged for both the legacy and 
enhanced products until the Exchange retires the legacy products. The 
migration deadline and billing during the transition period will impact 
all market participants equally.

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)(iii) of the Act \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ of the Act 
normally does not become operative prior to 30 days after the date of 
filing. However, Rule 19b-4(f)(6)(iii) \12\ 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 contained in Rule 
19b-4(f)(6)(iii).\13\ The Commission believes that waiver of the 30-day 
operative delay is consistent with the protection of investors and the 
public interest as the proposal raises no new or novel issues. 
Accordingly, the Commission hereby waives the 30-day operative delay 
and designates the proposal operative upon filing.\14\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule change'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 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 [email protected]. Please 
include file number SR-NASDAQ-2023-038 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.

All submissions should refer to file number SR-NASDAQ-2023-038. 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 website (https://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 website 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

[[Page 68762]]

a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-NASDAQ-2023-038 and should 
be submitted on or before October 25, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-21931 Filed 10-3-23; 8:45 am]
BILLING CODE 8011-01-P