Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify Market Maker Quote Management Procedures, 77034-77036 [2010-31051]
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77034
Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices
this filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 4 and Rule
19b–4(f)(6) thereunder.5
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.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–ISE–2010–116 on the
subject line.
mstockstill on DSKH9S0YB1PROD with NOTICES
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–ISE–2010–116. 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 (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
4 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with written notice of its
intent to file the proposed rule change, along with
a brief description and 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. ISE
has satisfied this requirement.
5 17
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18:39 Dec 09, 2010
Jkt 223001
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
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. 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–ISE–
2010–116 and should be submitted on
or before January 3, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–31050 Filed 12–9–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63439; File No. SR–
NASDAQ–2010–158]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Clarify
Market Maker Quote Management
Procedures
December 6, 2010.
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 December
3, 2010, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is filing with the
Commission a proposed rule change to
clarify market maker quote management
procedures.
6 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
Frm 00085
Fmt 4703
4613. Market Maker Obligations
A member registered as a Market
Maker shall engage in a course of
dealings for its own account to assist in
the maintenance, insofar as reasonably
practicable, of fair and orderly markets
in accordance with this Rule.
(a) Quotation Requirements and
Obligations
(1) No Change.
(2) Pricing Obligations. For NMS
stocks (as defined in Rule 600 under
Regulation NMS) a Market Maker shall
adhere to the pricing obligations
established by this Rule during Regular
Market Hours.
(A)–(E) No Change.
(F) Quotation Creation and
Adjustment. For each Issue in which a
Market Maker is registered, the System
shall, in the absence of a quotation that
complies with this Rule entered by that
Market Maker, automatically create a
quotation for display to comply with
this Rule. System-created compliant
displayed quotations will thereafter be
allowed to rest and not be further
adjusted by the System unless the
relationship between the quotation and
its related National Best Bid or National
Best Offer, as appropriate, shrinks to the
greater of: (a) 4 percentage points, or, (b)
one-quarter the applicable percentage
necessary to trigger an individual stock
trading pause as described in NASDAQ
Rule 4120(a)(11), or expands to within
that same percentage less 0.5%,
whereupon the System will
immediately re-adjust and display the
Market Maker’s quote to the appropriate
Designated Percentage set forth in
section (D) above. [As the System allows
for multiple attributable quotations by a
Market Maker in an issue,]
[q]Quotations originally entered by
Market Makers which have not been
modified by the System upon entry or
after resting on the book shall be
allowed to move freely towards [or away
from] the National Best Bid or National
Best Offer, as appropriate, for potential
execution.
(G)–(K) No Change.
(b)–(e) No Change.
*
*
*
*
*
4752. Opening Process
(a) No Change.
3 Changes are marked to the rule text that appears
in the electronic manual of NASDAQ found at
https://nasdaqomx.cchwallstreet.com.
1 15
PO 00000
The text of the proposed rule change
is below. Proposed new language is
italicized and proposed deletions are in
brackets.3
*
*
*
*
*
Sfmt 4703
E:\FR\FM\10DEN1.SGM
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Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices
(b) Trading Prior To Normal Market
Hours. The system shall process all
eligible Quotes/Orders at 7 a.m.:
(1) No Change.
(2) [At] No earlier than between 9:25
a.m. and 9:30 a.m., the system shall
open all remaining unopened Quotes in
accordance with each firm’s
instructions.
(3)–(4) No Change.
(c)–(d) No Change.
*
*
*
*
*
(b) Not applicable.
(c) Not applicable.
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
mstockstill on DSKH9S0YB1PROD with NOTICES
1. Purpose
Recently, the Exchange adopted rules
enhancing market maker quotation
obligations. In connection with the
implementation with these new
standards, the Exchange proposes to
clarify its quote management procedures
when market makers fail to enter
quotations in compliance with these
new rules. In short, should a market
maker fail to enter, or appropriately
update, their quotations so as to remain
in compliance with the new standards,
the Exchange will create or adjust such
quotations to prices that will ensure
compliance.
In addition, the Exchange proposes to
adjust the current fixed time of 9:25 a.m.
for opening previously unopened
quotations so as to allow the opening of
such quotations at time periods closer to
the 9:30 a.m. commencement of normal
market trading.
The Exchange believes that these
proposals both enhance compliance
with the new market maker quotation
standards and recognize the increased
liquidity being provided by marker
makers in the minutes before market
open.
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18:39 Dec 09, 2010
Jkt 223001
2. Statutory Basis
NASDAQ believes that the proposed
rule change is consistent with the
provisions of Section 6 of the Act,4 in
general, and with Sections 6(b)(5) of the
Act,5 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. The Exchange believes
that the proposed rule meets these
requirements in that it enhances
compliance with the new market maker
quotation standards and recognizes the
increased liquidity being provided by
marker makers in the minutes before
market open.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange 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.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments on the proposed
rule change 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: (1) Significantly affect
the protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 6 and Rule 19b–
4(f)(6) thereunder.7
4 15
U.S.C. 78f.
5 15 U.S.C. 78f(b)(5).
6 15 U.S.C. 78s(b)(3)(A).
7 17 CFR 240.19b–4(f)(6). When filing a proposed
rule change pursuant to Rule 19b–4(f)(6) under the
Act, an exchange is required to give the
Commission written notice of its intent to file the
proposed rule change, along with a brief description
and text of the proposed rule change, at least five
business days prior to the date of filing of the
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
77035
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing.8 However, Rule 19b–
4(f)(6) 9 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest.
Nasdaq has requested that the
Commission waive the 30-day operative
delay.
The Commission has considered
Nasdaq’s request to waive the 30-day
operative delay. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest, as it will enable the Exchange
to implement the proposed change
consistent with the implementation date
for the new market maker pricing
obligations.10
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.
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 https://www.sec.gov/
rules/sro.shtml; or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASDAQ–2010–158 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–2010–158. This
file number should be included on the
proposed rule change, or such shorter time as
designated by the Commission. The Commission
notes that the Exchange has satisfied this
requirement.
8 17 CFR 240.19b–4(f)(6)(iii).
9 Id.
10 For the purposes only of waiving the operative
date of this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
E:\FR\FM\10DEN1.SGM
10DEN1
77036
Federal Register / Vol. 75, No. 237 / Friday, December 10, 2010 / Notices
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 (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 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
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. 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–2010–158 and should be
submitted on or before January 3, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–31051 Filed 12–9–10; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63448; File No. SR–BX–
2010–059]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Order
Instituting Proceedings To Determine
Whether To Disapprove Proposed Rule
Change, as Modified by Amendment
No. 1, To Create a Listing Market on
the Exchange
mstockstill on DSKH9S0YB1PROD with NOTICES
December 7, 2010.
I. Introduction
On August 20, 2010, NASDAQ OMX
BX (‘‘BX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
CFR 200.30–3(a)(12).
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18:39 Dec 09, 2010
Jkt 223001
II. Description of the Proposal 7
The Exchange proposes to create a
new listing market, to be called the ‘‘BX
Venture Market.’’ 8 The Exchange has
stated that it expects that the securities
listed on BX would not be classified as
national market system (‘‘NMS’’)
securities.9 As a result, BX-listed
securities would not be subject to an
NMS plan and would not be subject to
Regulation NMS under the Act.10 BXlisted securities would trade on the
Exchange and also could trade over-thecounter (‘‘OTC’’).11 Further, BX-listed
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Securities Exchange Act Release No. 62818
(September 1, 2010), 75 FR 54665 (‘‘Notice’’).
4 See Letters to Elizabeth M. Murphy, Secretary,
Commission, from Tom A. Alberg, Managing
Director and Founder, Madrona Venture Group,
dated December 1, 2010 (‘‘Madrona Letter’’);
Michael R. Trocchio, Bingham McCutchen LLP,
dated October 3, 2010 (‘‘Pink OTC Markets Letter’’);
and William F. Galvin, Secretary of the
Commonwealth, Commonwealth of Massachusetts,
dated September 28, 2010 (‘‘MSD Letter’’).
5 See Securities Exchange Act Release No. 63105
(October 14, 2010), 75 FR 64772 (October 20, 2010).
6 See infra Section II for a description of
Amendment No. 1.
7 This description does not review every rule
proposed by BX that has been filed as part of its
proposed rule change; rather, it focuses on the most
prominent rules considered in review of the BX’s
proposal. See Notice, supra note 3, for a description
of the proposed rule change. See also Exhibit 5 to
the Form 19b–4 for all the rules proposed by BX,
available at https://www.sec.gov/rules/sro/bx/2010/
34-62818-ex5.pdf.
8 See Amendment No. 1. As originally proposed,
the proposed rule change provided that a BX-listed
company should refer to its listing as on the ‘‘BX.’’
9 See Notice, supra note 3.
10 See 17 CFR 242.600 et seq.
11 OTC trades of BX-listed securities would be
reported to the Financial Industry Regulatory
2 17
BILLING CODE 8011–01–P
11 17
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change to create a new listing market.
The proposed rule change was
published for comment in the Federal
Register on September 8, 2010.3 The
Commission received three comments
on the proposal.4 The Commission
subsequently extended the time period
in which to either approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to disapprove the
proposed rule change, to December 7,
2010.5 On December 6, 2010, BX
submitted Amendment No. 1 to the
proposed rule change.6 This order
institutes proceedings to determine
whether to disapprove the proposed
rule change, as modified by Amendment
No. 1. Institution of disapproval
proceedings, however, does not indicate
that the Commission has formulated any
conclusions with respect to any of the
issues involved.
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
securities would be considered penny
stocks under Exchange Act Rule 3a51–
1, unless they qualify for an exemption
from the definition of a penny stock.12
No ‘‘blue sky’’ exemption would be
available under Section 18 of the
Securities Act of 1933 or the rule
adopted thereunder,13 so companies
would be required to satisfy state law
registration requirements and other state
laws that regulate the sale and offering
of securities. In addition, BX would not
list any company that meets the
quantitative (e.g., financial)
requirements for listing on The
NASDAQ Stock Market LLC (‘‘Nasdaq’’).
To qualify for initial listing on BX, a
company must be registered under
Section 12(b) of the Act 14 and be
current in its periodic filings with the
Commission. The company would also
be required to have a fully independent
audit committee comprised of at least
three members and comply with the
requirements of Rule 10A–3 under the
Exchange Act.15 The company would be
required to have its independent
directors make compensation decisions
for executive officers (either by having
the independent directors meet in
executive session or by having them sit
on a compensation committee), and
independent directors would be
required to meet on a regular basis in
executive sessions.16 The company’s
Authority (‘‘FINRA’’) OTC Reporting Facility. See
Notice, supra note 3.
12 See 17 CFR 240.3a51–1.
13 15 U.S.C. 77r; Securities Act Rule 146. In
addition, some state laws and regulations may
provide an exemption from certain registration or
‘‘blue sky’’ requirements for companies listed on the
Boston Stock Exchange, based on the higher listing
standards previously applied by the former Boston
Stock Exchange. The proposed listing rules would
provide that the Exchange will take action to delist
any company listed on BX that attempts to rely on
such an exemption. Companies would also agree
not to rely on any such exemption as a provision
of the BX Listing Agreement.
14 15 U.S.C. 78l(b).
15 17 CFR 240.10A–3. Certain companies listing
on BX will be permitted to phase in compliance
with the audit committee and compensation
committee requirements following their listing.
With respect to the audit committee requirements,
a company listing in connection with its initial
public offering would be required to have one
independent director on the committee at the time
of listing; a majority of independent members
within 90 days of the date of effectiveness of the
company’s registration statement; and all
independent members within one year of the date
of effectiveness of the company’s registration
statement.
16 With respect to the compensation committee
requirement, a company listing in connection with
its initial public offering, upon emerging from
bankruptcy, or that otherwise was not subject to a
substantially similar requirement prior to listing
(such as a company only traded in the OTC market)
would be required to have one independent director
on the committee at the time of listing; a majority
of independent members within 90 days of listing;
and all independent members within one year of
listing.
E:\FR\FM\10DEN1.SGM
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]]>Agencies
[Federal Register Volume 75, Number 237 (Friday, December 10, 2010)]
[Notices]
[Pages 77034-77036]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31051]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63439; File No. SR-NASDAQ-2010-158]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Clarify Market Maker Quote Management Procedures
December 6, 2010.
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 December 3, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission (the
``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 is filing with the Commission a proposed rule change
to clarify market maker quote management procedures.
The text of the proposed rule change is below. Proposed new
language is italicized and proposed deletions are in brackets.\3\
---------------------------------------------------------------------------
\3\ Changes are marked to the rule text that appears in the
electronic manual of NASDAQ found at https://nasdaqomx.cchwallstreet.com.
---------------------------------------------------------------------------
* * * * *
4613. Market Maker Obligations
A member registered as a Market Maker shall engage in a course of
dealings for its own account to assist in the maintenance, insofar as
reasonably practicable, of fair and orderly markets in accordance with
this Rule.
(a) Quotation Requirements and Obligations
(1) No Change.
(2) Pricing Obligations. For NMS stocks (as defined in Rule 600
under Regulation NMS) a Market Maker shall adhere to the pricing
obligations established by this Rule during Regular Market Hours.
(A)-(E) No Change.
(F) Quotation Creation and Adjustment. For each Issue in which a
Market Maker is registered, the System shall, in the absence of a
quotation that complies with this Rule entered by that Market Maker,
automatically create a quotation for display to comply with this Rule.
System-created compliant displayed quotations will thereafter be
allowed to rest and not be further adjusted by the System unless the
relationship between the quotation and its related National Best Bid or
National Best Offer, as appropriate, shrinks to the greater of: (a) 4
percentage points, or, (b) one-quarter the applicable percentage
necessary to trigger an individual stock trading pause as described in
NASDAQ Rule 4120(a)(11), or expands to within that same percentage less
0.5%, whereupon the System will immediately re-adjust and display the
Market Maker's quote to the appropriate Designated Percentage set forth
in section (D) above. [As the System allows for multiple attributable
quotations by a Market Maker in an issue,] [q]Quotations originally
entered by Market Makers which have not been modified by the System
upon entry or after resting on the book shall be allowed to move freely
towards [or away from] the National Best Bid or National Best Offer, as
appropriate, for potential execution.
(G)-(K) No Change.
(b)-(e) No Change.
* * * * *
4752. Opening Process
(a) No Change.
[[Page 77035]]
(b) Trading Prior To Normal Market Hours. The system shall process
all eligible Quotes/Orders at 7 a.m.:
(1) No Change.
(2) [At] No earlier than between 9:25 a.m. and 9:30 a.m., the
system shall open all remaining unopened Quotes in accordance with each
firm's instructions.
(3)-(4) No Change.
(c)-(d) No Change.
* * * * *
(b) Not applicable.
(c) Not applicable.
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
Recently, the Exchange adopted rules enhancing market maker
quotation obligations. In connection with the implementation with these
new standards, the Exchange proposes to clarify its quote management
procedures when market makers fail to enter quotations in compliance
with these new rules. In short, should a market maker fail to enter, or
appropriately update, their quotations so as to remain in compliance
with the new standards, the Exchange will create or adjust such
quotations to prices that will ensure compliance.
In addition, the Exchange proposes to adjust the current fixed time
of 9:25 a.m. for opening previously unopened quotations so as to allow
the opening of such quotations at time periods closer to the 9:30 a.m.
commencement of normal market trading.
The Exchange believes that these proposals both enhance compliance
with the new market maker quotation standards and recognize the
increased liquidity being provided by marker makers in the minutes
before market open.
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\4\ in general, and with
Sections 6(b)(5) of the Act,\5\ 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. The Exchange
believes that the proposed rule meets these requirements in that it
enhances compliance with the new market maker quotation standards and
recognizes the increased liquidity being provided by marker makers in
the minutes before market open.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(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
result in any burden on competition that is 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
Written comments on the proposed rule change 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: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change
pursuant to Rule 19b-4(f)(6) under the Act, an exchange is required
to give the Commission written notice of its intent to file the
proposed rule change, along with a brief description and 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. The Commission notes that the Exchange
has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\8\
However, Rule 19b-4(f)(6) \9\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. Nasdaq has requested that the
Commission waive the 30-day operative delay.
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\8\ 17 CFR 240.19b-4(f)(6)(iii).
\9\ Id.
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The Commission has considered Nasdaq's request to waive the 30-day
operative delay. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest, as it will enable the Exchange to implement the
proposed change consistent with the implementation date for the new
market maker pricing obligations.\10\
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\10\ For the purposes only of waiving the operative date of 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 necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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 https://www.sec.gov/rules/sro.shtml; or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASDAQ-2010-158 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-2010-158. This
file number should be included on the
[[Page 77036]]
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
(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 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 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. 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-2010-158 and should be submitted on or before
January 3, 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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31051 Filed 12-9-10; 8:45 am]
BILLING CODE 8011-01-P
