Document ID: SEC-2011-0403-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2011-03-25T04:00Z

[Federal Register Volume 76, Number 58 (Friday, March 25, 2011)]
[Notices]
[Pages 16844-16845]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-7109]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64105; File No. SR-BX-2011-016]

Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of 
Filing and Immediate Effectiveness Relating to Changing the Starting 
Time

March 22, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on March 15, 2011, NASDAQ OMX BX, Inc. (``BX'' 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 Substance 
of the Proposed Rule Change

    The Exchange proposes to amend certain rules of the Exchange's 
equity trading facility to change the starting time from 8 a.m. Eastern 
Time (``ET'') to 7 a.m. ET. The Exchange proposes to amend provisions 
of Exchange Rules 4120, 4420, 4421, 4617, 4751, 4752 and 4756 to 
reflect the proposed amended starting time.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nasdaqtrader.com/micro.aspx?id=BXRulefilings, 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 purpose of the proposed rule change is to amend certain rules 
of the Exchange to change the starting time from 8 a.m. ET to 7 a.m. 
ET. More specifically, the Exchange proposes to amend the following 
Exchange rules in the following manner:
    i. Exchange Rule 4120(b)(4)(B) to reflect that the ``Pre-Market 
Session'' means the trading session will begin at 7 a.m. ET instead of 
8 a.m. ET.
    ii. Exchange Rule 4420(i)(7) to reflect that the Exchange may 
designate each series of Portfolio Depository Receipts for trading 
during a pre-market session beginning at 7 a.m. instead of 8 a.m. ET.
    iii. Exchange Rule 4420(j) to reflect that the Exchange may 
designate each series of Index Fund Shares for trading during a pre-
market session beginning at 7 a.m. ET instead of 8 a.m. ET.
    iv. Exchange Rule 4421(a)(2) to reflect that the information 
circular distributed by the Exchange prior to the commencement of 
trading in each UTP Derivative Security contain applicable trading 
hours for the UTP Derivative Security and the risks of trading 
beginning with the period starting from 7 a.m. ET instead of 8 a.m. ET.
    v. Exchange Rule 4617 to reflect that the normal business hours for 
the trading platform begins at 7 a.m. ET instead of 8 a.m. ET; and, 
Equity Market Makers whose quotes are open before 9:30 a.m. ET or after 
4 p.m. ET shall be obligated to comply, while their quotes are open, 
with all rules that are not by their express terms, or by an official 
interpretation of the Exchange, inapplicable to any part of the period 
7 a.m. to 9:30 a.m. or 4 p.m. to 7 p.m. ET period instead of 8 a.m. to 
9:30 a.m. or 4 p.m. to 7 p.m. ET.
    vi. Exchange Rule 4751(h)(1) to reflect that System Hours Immediate 
or Cancel \3\ orders must be will be [sic] available for entry and 
execution from 7 a.m. ET instead of 8 ET.
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    \3\ ``System Hours Immediate or Cancel'' shall mean, for orders 
so designated, that if after entry into the System the order (or a 
portion thereof) is not marketable, the order (or unexecuted portion 
thereof) shall be canceled and returned to the entering Participant. 
See Exchange Rule 4751(h)(1).
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    vii. Exchange Rule 4751(h)(2) to reflect that System Hours Day \4\ 
orders must remain available for potential display and/or execution 
from 7 a.m. ET instead of 8 a.m. ET.
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    \4\ ``System Hours Day'' shall mean, for orders so designated, 
that if after entry into the System, the order is not fully 
executed, the order (or the unexecuted portion thereof) shall remain 
available for potential display and/or execution from the opening of 
the normal business day until 7 p.m. Eastern Time on the day it was 
submitted unless cancelled by the entering party. See Exchange Rule 
4751(h)(2).
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    viii. Exchange Rule 4751(h)(4) to reflect that System Hours Expire 
Time \5\ orders must remain for entry and execution from 7 a.m. ET 
instead of 8 a.m. ET.
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    \5\ ``System Hours Expire Time'' or ``SHEX'' shall mean, for 
orders so designated, that if after entry into the System, the order 
is not fully executed, the order (or the unexecuted portion thereof) 
shall remain available for potential display and/or execution for 
the amount of time specified by the entering Participant (up to 7 
p.m. on the day entered) unless canceled by the entering party. See 
Exchange Rule 4751(h)(4).
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    ix. Exchange Rule 4751(h)(8) to reflect that ``good-til-market 
close'' \6\ orders must be available for entry and potential execution 
from 7 a.m. ET instead of 8 ET.
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    \6\ ``Good-til-market close'' shall mean for orders so 
designated, that if after entry into the System, the order is not 
fully executed, the order (or unexecuted portion thereof) shall 
remain available for potential display and/or execution until 
cancelled by the entering party, or until 4 p.m., after which it 
shall be returned to the entering party. See Exchange Rule 
4751(h)(8).
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    x. Exchange Rule 4752(a)(1) to reflect that the system shall add in 
time priority all eligible Orders in accordance with each order's 
defined characteristics at 7 a.m. instead of 8 a.m.
    xi. Exchange Rule 4756(a)(3) to reflect that orders can be entered 
into the System (or previously entered orders cancelled) from 7 a.m. ET 
instead of 8 a.m. ET.
    xii. Exchange Rule 4756(b) to reflect that Equities Market Makers, 
Order Entry Firms, and Equities ECNs can enter quotes into the system 
starting at 7 a.m. ET instead of 8 a.m. ET.
    The Exchange is a fully electronic system that accommodates diverse 
business models and trading preferences. Exchange utilizes technology 
to aggregate and display liquidity and make it available for execution 
of orders. Exchange is

[[Page 16845]]

proposing to expand its operational hours to open the System earlier so 
that firms can enter orders and execute beginning at 7 a.m. rather than 
8 a.m.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\7\ in general, and with 
Sections 6(b)(1) and 6(b)(5) of the Act,\8\ in particular, in that the 
proposal enables the Exchange to be so organized as to have the 
capacity to be able to carry out the purposes of the Act and to comply 
with and enforce compliance by members, member organizations, and 
persons associated with members and member organizations with 
provisions of the Act, the rules and regulations thereunder, and the 
rules of the Exchange. The proposal is also consistent with Section 6 
of the Act 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. An earlier open will enhance 
the national market system by providing market participants increased 
opportunity to more effectively carry out the execution of orders in 
the manner addressed by Exchange rules. Such improvements will enhance 
the protection of investors and the public interest.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(1), (5).
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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.

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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) \10\ 
thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \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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    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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-BX-2011-016 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-BX-2011-016. This file 
number should be included on the subject line if e-mail 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. 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-BX-2011-016 and 
should be submitted on or before April 15, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-7109 Filed 3-24-11; 8:45 am]
BILLING CODE 8011-01-P