Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify the Maximum Time Afforded to a Market Maker To Meet Its Market Making Obligations Upon Rejoining the Market After an Excused Withdrawal Under Rule 4619, 16549-16551 [2013-05983]

Download as PDF Federal Register / Vol. 78, No. 51 / Friday, March 15, 2013 / Notices Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSE–2013–20 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. srobinson on DSK4SPTVN1PROD with NOTICES All submissions should refer to File Number SR–NYSE–2013–20. 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 (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 10:00 a.m. and 3:00 p.m. Copies of such 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 publicly available. All submissions should refer to File Number SR–NYSE– 2013–20 and should be submitted on or before April 5, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–05981 Filed 3–14–13; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69108; File No. SR– NASDAQ–2013–037] Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Clarify the Maximum Time Afforded to a Market Maker To Meet Its Market Making Obligations Upon Rejoining the Market After an Excused Withdrawal Under Rule 4619 March 11, 2013. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on February 25, 2013, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or the ‘‘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 self-regulatory organization. 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 proposes to clarify what is the maximum time afforded to a market maker to rejoin the market after an excused withdrawal under Rule 4619 [sic]. The Exchange will implement the proposed changes as soon as the rule change is operative. The text of the proposed rule change is below. Proposed new language is in italics. * * * * * 4619. Withdrawal of Quotations and Passive Market Making (a)–(f) No change. (g) A Nasdaq Market Maker that wishes to reinstate its quotations in a security after an excused withdrawal pursuant to Rule 4619 shall contact Nasdaq to notify Nasdaq of its intention to be reinstated. Upon confirmation by Nasdaq that the market maker is reinstated, the market maker will have no longer than ten minutes to meet its market making obligations under Rule 4613. * * * * * BILLING CODE 8011–01–P 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 9 17 CFR 200.30–3(a)(12). VerDate Mar<14>2013 17:37 Mar 14, 2013 Jkt 229001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 16549 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 proposing to amend Rule 4619 to clarify the maximum permissible time afforded an Exchange market maker in which to resume making a market in a security after an excused withdrawal under the rule. When a NASDAQ market maker is ready to resume market making after an excused withdrawal, it informs NASDAQ of its intent to resume. NASDAQ in turn confirms receipt of such notice and updates the market maker’s registration status in the relevant security or securities.4 If the market maker uses NASDAQ’s automated quotation refresh functionality (‘‘AQR’’),5 NASDAQ will, concurrent with the receipt of notice, commence automated quoting thereby satisfying the member firm’s market making obligations [sic]. A market maker not using AQR is responsible for reentering the market upon providing notice to NASDAQ of its intent to do so. Until November 2012, nearly all NASDAQ market makers used AQR and the majority of NASDAQ market makers continue to use AQR at this time. NASDAQ is retiring AQR effective February 25, 2013,6 and is requiring 4 A request to reinstate market making after an excused withdrawal may be submitted to NASDAQ by phone, email, or facsimile. 5 Rules 4613(a)(2)(F) and (G). NASDAQ adopted AQR as part of an effort to address issues uncovered by the aberrant trading that occurred on May 6, 2010. AQR is designed to help Exchange market makers meet their market making obligations for each stock in which they are registered to continuously maintain a two-sided quotation within a designated percentage of the National Best Bid and National Best Offer, as appropriate. See Securities Exchange Act Release No. 63255 (November 5, 2010), 75 FR 69484 (November 12, 2010) (SR–NASDAQ–2010–115, et al.). 6 Securities Exchange Act Release No. 68654 (January 15, 2013), 78 FR 4536 (January 22, 2013) (SR–NASDAQ–2013–007). E:\FR\FM\15MRN1.SGM 15MRN1 srobinson on DSK4SPTVN1PROD with NOTICES 16550 Federal Register / Vol. 78, No. 51 / Friday, March 15, 2013 / Notices market makers to either use the Market Maker Peg Order 7 or develop an alternative means to meet their market making obligations. As a consequence, market makers have begun to opt out of AQR and NASDAQ anticipates many more will do so as the AQR sunset date approaches. For the handful of market makers that do not use AQR currently, NASDAQ provides a reasonable time for the market maker to rejoin the market after providing notice of its intent to do so. NASDAQ monitors this timeframe and in no case has a market maker taken longer than ten minutes to rejoin the market after providing notice. A consequence of AQR’s retirement is that, thereafter, all NASDAQ market makers will no longer automatically resume market making concurrent with notice to the Exchange of their intent to do so after an excused withdrawal under Rule 4619. Accordingly, the Exchange is proposing to amend Rule 4619 to provide Exchange market makers with up to ten minutes to rejoin the market after NASDAQ confirms that the market maker is reinstated in the security or securities subject to an excused withdrawal under Rule 4619 [sic]. After expiration of the ten-minute period, a market maker’s obligations under Rule 4613 will apply [sic]. NASDAQ believes that ten minutes is a reasonable amount of time for a market maker to rejoin the market, and that it provides a definite time after which a market maker’s obligations under Rule 4613 begin. NASDAQ notes that, for some market makers, the ten minute time-frame proposed herein may be more than adequate to allow them to rejoin the market after receiving confirmation from NASDAQ. NASDAQ believes that small market makers may not have as efficient and automated processes to rejoin the market as compared to larger market making firms. Consequently, the proposed ten minute timeframe is reasonably adequate for such small market makers, but not excessive. Moreover, in light of the fact that AQR was widely-adopted by NASDAQ market makers and its imminent retirement, the process proposed herein will be new to the vast majority of Exchange market makers. NASDAQ stresses that the proposed timeframe sets a maximum time allowable for a market maker to reenter the market, and that it expects member firms to reenter at the earliest time possible after receiving confirmation from NASDAQ that it is reinstated. Once the market maker reenters the market its obligations under Rule 4613 begin, even if the time is less than ten 7 Rule 4751(f)(15). VerDate Mar<14>2013 17:37 Mar 14, 2013 minutes from receiving notice from NASDAQ. The Exchange will monitor use of this timeframe and may adjust the length of time if it appears to be excessive. 2. Statutory Basis The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,8 which requires the rules of an exchange 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 Exchange believes that the proposed rule meets these requirements in that it provides Exchange market makers with clarity on the maximum permissible time for a market maker reenter the market after receiving confirmation of its reregistration from the Exchange. With this information, Exchange market makers are aware of when their obligations under Rule 4613 begin and thus can avoid inadvertent violation of Exchange rules. 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, as amended. To the contrary, the proposed rule change will promote competition by providing further clarity to Exchange market making obligations, thus allowing market makers to make more informed market making decisions and ensuring all Exchange market makers are aware of when their Rule 4613 obligations begin. Moreover, by placing an express limit on the time afforded to market makers to rejoin the market, market makers will be incentivized to adopt procedures to timely rejoin the market. 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 8 15 Jkt 229001 PO 00000 U.S.C. 78f(b)(5). Frm 00088 Fmt 4703 Sfmt 4703 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 Section 19(b)(3)(A) of the Act 9 and Rule 19b– 4(f)(6) 10 thereunder. The Exchange has requested that the Commission waive the 30-day operative delay.11 The Commission believes that waiver of the operative delay is consistent with the protection of investors and the public interest. Such waiver would allow the proposed rules to become operative at the same time as NASDAQ retires its AQR functionality. Without waiving the operative 30-day operative delay, Exchange market makers may not be able to automatically resume market making concurrent with its notice to NASDAQ of its intent to do so. Accordingly, the Commission designates the proposal operative upon filing.12 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 email to rulecomments@sec.gov. Please include File Number SR–NASDAQ–2013–037 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. 9 15 U.S.C. 78s(b)(3)(A). 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. 11 17 CFR 240.19b–4(f)(6)(iii). 12 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. 15 U.S.C. 78c(f). 10 17 E:\FR\FM\15MRN1.SGM 15MRN1 Federal Register / Vol. 78, No. 51 / Friday, March 15, 2013 / Notices All submissions should refer to File Number SR–NASDAQ–2013–037. 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 (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 10:00 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–2013–037 and should be submitted on or before April 5, 2013. 26, 2013, New York Stock Exchange LLC (the ‘‘Exchange’’ or ‘‘NYSE’’) filed with the Securities and Exchange Commission (‘‘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. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [FR Doc. 2013–05983 Filed 3–14–13; 8:45 am] 1. Purpose BILLING CODE 8011–01–P The Exchange proposes to amend its Price List to increase the Gross FOCUS Fee. The Exchange proposes to immediately reflect the proposed change in its Price List, but not to implement the proposed rate change until April 1, 2013.3 The Exchange currently charges each member organization a monthly Gross FOCUS Fee of $0.105 per $1,000 of gross revenue reported on its FOCUS Report.4 Member organizations are subject to certain minimum annual SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69101; File No. SR–NYSE– 2013–19] srobinson on DSK4SPTVN1PROD with NOTICES Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending the New York Stock Exchange LLC Price List To Increase the Gross FOCUS Fee March 11, 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 February 13 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Mar<14>2013 17:37 Mar 14, 2013 Jkt 229001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Exchange’s Price List to increase the gross FOCUS fee (‘‘Gross FOCUS Fee’’). The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, 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 self-regulatory organization 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. 3 The Exchange has proposed changes to the Price List, as reflected in the Exhibit 5 in a manner that would permit readers of the Price List to identify the proposed increase to the Gross FOCUS Fee that would be implemented on April 1, 2013. 4 FOCUS is an acronym for Financial and Operational Combined Uniform Single Report. FOCUS Reports are filed periodically with the Securities and Exchange Commission (the ‘‘Commission’’ or ‘‘SEC’’) as SEC Form X–17A–5 pursuant to Rule 17a–5 under the Act. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 16551 Gross FOCUS Fees, which are $500 for carrying firms and designated market makers (‘‘DMMs’’), $250 for introducing firms, and $45 for member organizations who do not conduct a public business. The Exchange proposes to increase the rate of the Gross FOCUS Fee from $0.105 per $1,000 of gross revenue to $0.12 per $1,000 of gross revenue.5 The Exchange is proposing this increase in order to offset increased regulatory expenses. In this regard, the Exchange notes that it has not increased the Gross FOCUS Fee in more than five years, since January 2008.6 The Exchange allocates the funds collected pursuant to the Gross FOCUS Fee to fund the performance of its regulatory activities with respect to member organizations, including expenses associated with the regulatory functions performed both by NYSE Regulation, Inc. (‘‘NYSE Regulation’’) and by the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) pursuant to a regulatory services agreement, for which FINRA is paid by NYSE Regulation. The Exchange will monitor the amount of revenue collected from the Gross FOCUS Fee to ensure that it, in combination with its other regulatory fees and fines, does not exceed regulatory costs. The Exchange expects to monitor regulatory costs and revenues on an annual basis, at a minimum. If the Exchange determines that regulatory revenues exceed regulatory costs, the Exchange would adjust the Gross FOCUS Fee downward by submitting a fee change filing to the Commission. In addition to being included in the Exchange’s Price List, the Gross FOCUS Fee is also set forth in NYSE Rule 129, along with the applicable minimum annual fees described above.7 The Exchange proposes to remove the duplicative Gross FOCUS Fee text from NYSE Rule 129. As a result, NYSE Rule 129 would no longer include the Gross FOCUS Fee or the applicable annual minimums. However, NYSE Rule 129 would continue to provide that the Exchange’s Board may, from time to time, impose such charge or charges on members and member organizations as it deems appropriate to reimburse the Exchange, in whole or in part, for 5 The Exchange is also proposing to specify, as is the case today, that the Gross FOCUS Fee is charged monthly. The Exchange is not proposing to change the existing minimum annual Gross FOCUS Fees. 6 See Securities Exchange Act Release No. 56181 (August 1, 2007), 72 FR 44206 (August 7, 2007) (SR–NYSE–2007–70). 7 See, e.g., Securities Exchange Act Release No. 57139 (January 14, 2008), 73 FR 3503 (January 18, 2008) (SR–NYSE–2008–01). E:\FR\FM\15MRN1.SGM 15MRN1

Agencies

[Federal Register Volume 78, Number 51 (Friday, March 15, 2013)]
[Notices]
[Pages 16549-16551]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-05983]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69108; File No. SR-NASDAQ-2013-037]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Clarify the Maximum Time Afforded to a Market Maker To Meet Its 
Market Making Obligations Upon Rejoining the Market After an Excused 
Withdrawal Under Rule 4619

March 11, 2013.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on February 25, 2013, The NASDAQ Stock Market LLC 
(``NASDAQ'' or the ``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 self-
regulatory organization. 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\ 15 U.S.C. 78a.
    \3\ 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 clarify what is the maximum time afforded 
to a market maker to rejoin the market after an excused withdrawal 
under Rule 4619 [sic]. The Exchange will implement the proposed changes 
as soon as the rule change is operative.
    The text of the proposed rule change is below. Proposed new 
language is in italics.
* * * * *

4619. Withdrawal of Quotations and Passive Market Making

    (a)-(f) No change.
    (g) A Nasdaq Market Maker that wishes to reinstate its quotations 
in a security after an excused withdrawal pursuant to Rule 4619 shall 
contact Nasdaq to notify Nasdaq of its intention to be reinstated. Upon 
confirmation by Nasdaq that the market maker is reinstated, the market 
maker will have no longer than ten minutes to meet its market making 
obligations under Rule 4613.
* * * * *

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 proposing to amend Rule 4619 to clarify the maximum 
permissible time afforded an Exchange market maker in which to resume 
making a market in a security after an excused withdrawal under the 
rule. When a NASDAQ market maker is ready to resume market making after 
an excused withdrawal, it informs NASDAQ of its intent to resume. 
NASDAQ in turn confirms receipt of such notice and updates the market 
maker's registration status in the relevant security or securities.\4\ 
If the market maker uses NASDAQ's automated quotation refresh 
functionality (``AQR''),\5\ NASDAQ will, concurrent with the receipt of 
notice, commence automated quoting thereby satisfying the member firm's 
market making obligations [sic]. A market maker not using AQR is 
responsible for reentering the market upon providing notice to NASDAQ 
of its intent to do so. Until November 2012, nearly all NASDAQ market 
makers used AQR and the majority of NASDAQ market makers continue to 
use AQR at this time.
---------------------------------------------------------------------------

    \4\ A request to reinstate market making after an excused 
withdrawal may be submitted to NASDAQ by phone, email, or facsimile.
    \5\ Rules 4613(a)(2)(F) and (G). NASDAQ adopted AQR as part of 
an effort to address issues uncovered by the aberrant trading that 
occurred on May 6, 2010. AQR is designed to help Exchange market 
makers meet their market making obligations for each stock in which 
they are registered to continuously maintain a two-sided quotation 
within a designated percentage of the National Best Bid and National 
Best Offer, as appropriate. See Securities Exchange Act Release No. 
63255 (November 5, 2010), 75 FR 69484 (November 12, 2010) (SR-
NASDAQ-2010-115, et al.).
---------------------------------------------------------------------------

    NASDAQ is retiring AQR effective February 25, 2013,\6\ and is 
requiring

[[Page 16550]]

market makers to either use the Market Maker Peg Order \7\ or develop 
an alternative means to meet their market making obligations. As a 
consequence, market makers have begun to opt out of AQR and NASDAQ 
anticipates many more will do so as the AQR sunset date approaches. For 
the handful of market makers that do not use AQR currently, NASDAQ 
provides a reasonable time for the market maker to rejoin the market 
after providing notice of its intent to do so. NASDAQ monitors this 
timeframe and in no case has a market maker taken longer than ten 
minutes to rejoin the market after providing notice.
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 68654 (January 15, 
2013), 78 FR 4536 (January 22, 2013) (SR-NASDAQ-2013-007).
    \7\ Rule 4751(f)(15).
---------------------------------------------------------------------------

    A consequence of AQR's retirement is that, thereafter, all NASDAQ 
market makers will no longer automatically resume market making 
concurrent with notice to the Exchange of their intent to do so after 
an excused withdrawal under Rule 4619. Accordingly, the Exchange is 
proposing to amend Rule 4619 to provide Exchange market makers with up 
to ten minutes to rejoin the market after NASDAQ confirms that the 
market maker is reinstated in the security or securities subject to an 
excused withdrawal under Rule 4619 [sic]. After expiration of the ten-
minute period, a market maker's obligations under Rule 4613 will apply 
[sic]. NASDAQ believes that ten minutes is a reasonable amount of time 
for a market maker to rejoin the market, and that it provides a 
definite time after which a market maker's obligations under Rule 4613 
begin. NASDAQ notes that, for some market makers, the ten minute time-
frame proposed herein may be more than adequate to allow them to rejoin 
the market after receiving confirmation from NASDAQ. NASDAQ believes 
that small market makers may not have as efficient and automated 
processes to rejoin the market as compared to larger market making 
firms. Consequently, the proposed ten minute timeframe is reasonably 
adequate for such small market makers, but not excessive. Moreover, in 
light of the fact that AQR was widely-adopted by NASDAQ market makers 
and its imminent retirement, the process proposed herein will be new to 
the vast majority of Exchange market makers.
    NASDAQ stresses that the proposed timeframe sets a maximum time 
allowable for a market maker to reenter the market, and that it expects 
member firms to reenter at the earliest time possible after receiving 
confirmation from NASDAQ that it is reinstated. Once the market maker 
reenters the market its obligations under Rule 4613 begin, even if the 
time is less than ten minutes from receiving notice from NASDAQ. The 
Exchange will monitor use of this timeframe and may adjust the length 
of time if it appears to be excessive.
2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Act,\8\ which requires the rules of an exchange 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 
Exchange believes that the proposed rule meets these requirements in 
that it provides Exchange market makers with clarity on the maximum 
permissible time for a market maker reenter the market after receiving 
confirmation of its re-registration from the Exchange. With this 
information, Exchange market makers are aware of when their obligations 
under Rule 4613 begin and thus can avoid inadvertent violation of 
Exchange rules.
---------------------------------------------------------------------------

    \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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. To 
the contrary, the proposed rule change will promote competition by 
providing further clarity to Exchange market making obligations, thus 
allowing market makers to make more informed market making decisions 
and ensuring all Exchange market makers are aware of when their Rule 
4613 obligations begin. Moreover, by placing an express limit on the 
time afforded to market makers to rejoin the market, market makers will 
be incentivized to adopt procedures to timely rejoin the market.

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 after the date of the filing, or such 
shorter time as the Commission may designate, it has become effective 
pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) 
\10\ thereunder.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    The Exchange has requested that the Commission waive the 30-day 
operative delay.\11\ The Commission believes that waiver of the 
operative delay is consistent with the protection of investors and the 
public interest. Such waiver would allow the proposed rules to become 
operative at the same time as NASDAQ retires its AQR functionality. 
Without waiving the operative 30-day operative delay, Exchange market 
makers may not be able to automatically resume market making concurrent 
with its notice to NASDAQ of its intent to do so. Accordingly, the 
Commission designates the proposal operative upon filing.\12\
---------------------------------------------------------------------------

    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ 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. 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.

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 email to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2013-037 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.


[[Page 16551]]


All submissions should refer to File Number SR-NASDAQ-2013-037. 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 (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 
10:00 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-2013-037 and should 
be submitted on or before April 5, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-05983 Filed 3-14-13; 8:45 am]
BILLING CODE 8011-01-P
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