Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend NASDAQ Rule 4763, 27466-27468 [2013-11145]
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Federal Register / Vol. 78, No. 91 / Friday, May 10, 2013 / Notices
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–BX–2013–034. 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
offices of BX. 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–
2013–034, and should be submitted on
or before May 31, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–11173 Filed 5–9–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–69521; File No. SR–
NASDAQ–2013–071]
mstockstill on DSK4VPTVN1PROD with NOTICES
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
NASDAQ Rule 4763
May 6, 2013.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–42 thereunder,
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
18:05 May 09, 2013
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASDAQ proposes to amend
NASDAQ Rule 4763 (Short Sale Price
Test Pursuant to Rule 201 of Regulation
SHO) to establish that the short sale
price test for NASDAQ-listed securities
will not be calculated until after
NASDAQ completes the Nasdaq
Opening Cross or, where no Nasdaq
Opening Cross occurs, begins trading
pursuant to NASDAQ Rule 4752.
The text of the proposed rule change
is below.3 Proposed new language is
italicized; deletions are bracketed.
*
*
*
*
*
4763. Short Sale Price Test Pursuant
to Rule 201 of Regulation SHO
(a)–(b) No change.
(c) Determination of Trigger Price. For
covered securities for which the
Exchange is the listing market, the
System shall determine whether a
transaction in a covered security has
occurred at a Trigger Price and shall
immediately notify the single plan
processor.
(1) The System will not calculate the
Trigger Price of a covered security until:
[it opens trading for that security.]
(A) after the completion of the Nasdaq
Opening Cross pursuant to Rule
4752(d), for securities in which a
Nasdaq Opening Cross occurs, or
(B) after the System begins trading
pursuant to Rule 4752(c) for securities
in which no Nasdaq Opening Cross
occurs.
(2) No change.
(d)–(g) No change.
*
*
*
*
*
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. The text of
these statements may be examined at
the places specified in Item IV below.
3 Changes are marked to the rule text that appears
in the electronic manual of Nasdaq found at
https://nasdaq.cchwallstreet.com.
1 15
VerDate Mar<15>2010
notice is hereby given that on April 24,
2013, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’)
the proposed rule change as described
in Items I and II, which Items have been
prepared by NASDAQ. The Commission
is publishing this notice to solicit
comments on the proposed rule change
from interested persons.
Jkt 229001
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Frm 00103
Fmt 4703
Sfmt 4703
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
Rule 201 of Regulation SHO 4 contains
a short sale-related circuit breaker that,
if triggered, imposes a restriction on the
prices at which securities may be sold
short (‘‘short sale price test’’). Rule
201(b) requires that trading centers,5
such as NASDAQ, establish, maintain,
and enforce written policies and
procedures reasonably designed to
prevent the execution or display of a
short sale order of a covered security 6
at a price that is less than or equal to
the current national best bid 7 if the
price of that covered security decreases
by 10% or more from the covered
security’s closing price as determined
by the listing market 8 for the covered
security as of the end of regular trading
hours 9 on the prior day (‘‘Trigger
4 17 CFR 242.201. See also Securities Exchange
Act Release No. 61595 (Feb. 26, 2010), 75 Fed. Reg.
11232 (Mar. 10, 2010) and Division of Trading and
Markets: Responses to Frequently Asked Questions
Concerning Rule 201 of Regulation SHO (‘‘T&M
FAQs’’).
5 Rule 201(a)(9) states that the term ‘‘trading
center’’ shall have the same meaning as in Rule
600(b)(78) of Regulation NMS. Rule 600(b)(78)
defines a ‘‘trading center’’ as ‘‘a national securities
exchange or national securities association that
operates an SRO trading facility, an alternative
trading system, an exchange market maker, an OTC
market maker, or any other broker or dealer that
executes orders internally by trading as principal or
crossing orders as agent.’’ 17 CFR 242.600(b)(78).
6 The term ‘‘covered security’’ shall have the same
meaning as in Rule 201 of Regulation SHO. Rule
201(a)(1) defines the term ‘‘covered security’’ to
mean any ‘‘NMS stock’’ as defined under Rule
600(b)(47) of Regulation NMS. Rule 600(b)(47) of
Regulation NMS defines an ‘‘NMS stock’’ as ‘‘any
NMS security other than an option.’’ Rule
600(b)(46) of Regulation NMS defines an ‘‘NMS
security’’ as ‘‘any security or class of securities for
which transaction reports are collected, processed,
and made available pursuant to an effective
transaction reporting plan, or an effective national
market system plan for reporting transactions in
listed options.’’ 17 CFR 242.201(a)(1); 17 CFR
242.600(b)(47); and 17 CFR 242.600(b)(46).
7 The term ‘‘national best bid’’ shall have the
same meaning as in Rule 201 of Regulation SHO.
Rule 201(a)(4) states that such term shall have the
same meaning as in Rule 600(b)(42) of Regulation
NMS. 17 CFR 242.201(a)(4). See also 17 CFR
242.600(b)(42).
8 The term ‘‘listing market’’ shall have the same
meaning as in Rule 201 of Regulation SHO. Rule
201(a)(3) defines the term ‘‘listing market’’ to have
the same meaning as the term ‘‘listing market’’ as
defined in the effective transaction reporting plan
for the covered security. 17 CFR 242.201(a)(3). See
also 17 CFR 242.201(a)(2).
9 ‘‘Regular trading hours’’ is defined in Rule 201
to have the same meaning as in Rule 600(b)(64) of
Regulation NMS. See Rule 201(a)(7). Rule
E:\FR\FM\10MYN1.SGM
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mstockstill on DSK4VPTVN1PROD with NOTICES
Federal Register / Vol. 78, No. 91 / Friday, May 10, 2013 / Notices
Price’’). Rule 4763(b) provides, in
compliance with Rule 201, that in the
event the short sale price test is
triggered, the Exchange will not execute
or display a short sale order with
respect to a covered security at a price
that is less than or equal to the current
national best bid.
Under Rule 4763(c), where NASDAQ
is the listing market for a covered
security, the System (as defined in
NASDAQ Rule 4751(a)) will determine
whether the short sale price test of Rule
201 has been triggered (i.e., whether a
transaction in a covered security has
occurred at a Trigger Price) and will
immediately notify the single plan
processor for the covered security.
Currently under Rule 4763(c)(1), the
System will not calculate the Trigger
Price of a covered security until the
Exchange opens trading for that
security. Because the phrase ‘‘opens
trading’’ is not defined in NASDAQ’s
rules, some ambiguity exists regarding
its precise application. The purpose of
the proposed rule change is to clearly
establish when NASDAQ will begin
calculating whether the short sale price
test of Rule 201 of Regulation SHO
under the Act has been triggered for
NASDAQ-listed securities.
Specifically, NASDAQ members have
questioned whether the short sale price
test can be triggered in a NASDAQlisted security by an execution on an
away market that occurs after 9:30:00
a.m. but before NASDAQ completes the
Nasdaq Opening Cross pursuant to Rule
4752. Typically, NASDAQ systems
require less than 2 seconds to complete
all Nasdaq Opening Crosses in
NASDAQ-listed securities. Therefore,
this question applies only to the limited
circumstances in which an away market
prints a regular way execution which
would trigger the short sale price test of
Rule 201 under Regulation SHO during
the brief period after 9:30:00 but prior
to the Nasdaq Opening Cross.
Accordingly, NASDAQ is modifying
Rule 4763(c)(1) to state specifically
when NASDAQ will begin calculating
whether a transaction in a covered
security has occurred at a Trigger Price.
For securities in which a Nasdaq
Opening Cross occurs as described in
Rule 4752(d), NASDAQ will begin
calculating the short sale price test after
completing the Nasdaq Opening Cross.
For securities in which no Nasdaq
Opening Cross occurs, as described in
Rule 4752(c), NASDAQ will begin
600(b)(64) provides that ‘‘Regular trading hours
means the time between 9:30 a.m. and 4:00 p.m.
Eastern Time, or such other time as is set forth in
the procedures established pursuant to
§ 242.605(a)(2).’’ 17 CFR 242.600(b)(64). See also
T&M FAQs 1.1 and 1.2.
VerDate Mar<15>2010
18:05 May 09, 2013
Jkt 229001
calculating the short sale price test
immediately when the System begins
regular way trading pursuant to Rule
4752(c). NASDAQ believes that this
proposed change eliminates any
ambiguity that exists in the current
rule.10
2. Statutory Basis
NASDAQ believes that its proposal is
consistent with Section 6(b) of the Act 11
in general, and furthers the objectives of
Section 6(b)(5) of the Act 12 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.
Specifically, NASDAQ believes that it is
important to resolve ambiguity in
NASDAQ’s rules, particularly a rule that
NASDAQ administers as a listing
market and that impacts all trading in a
given security. The proposed change
will enhance the fairness and efficiency
of the NASDAQ market without
affecting market participants’ ability or
cost to comply with applicable
regulatory requirements.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASDAQ does not believe that the
proposed rule change will result in any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
NASDAQ does not believe that
competition exists regarding when an
exchange begins calculating the short
sale price test. However, to the extent
such competition exists today, the
proposed rule change conforms to the
current practice of the New York Stock
Exchange (‘‘NYSE’’) and, therefore,
equalizes the two markets’ competitive
positions.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change: (i) Does not significantly affect
the protection of investors or the public
interest; (ii) does not impose any
10 The proposed rule does not affect market
participants’ obligations contained in Regulation
SHO under the Act. See 17 CFR 242.200 et seq.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
PO 00000
Frm 00104
Fmt 4703
Sfmt 4703
27467
significant burden on competition; and
(iii) does not become operative for 30
days after the date of the 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 is
effective upon filing pursuant to Section
19(b)(3)(A) of the Act 13 and paragraph
(f)(6) of Rule 19b–4 thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requests that the Commission
waive the 30-day operative delay
because the proposed rule change
provides more clarity regarding the
application of Regulation SHO under
the Act and resolves an ambiguity in the
Exchange’s rules. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest.15 Waiver of the operative delay
will allow the Exchange to resolve a
potential ambiguity in NASDAQ’s rules.
For these reasons, the Commission
designates the proposed rule change as
operative upon filing.
At any time within 60 days of the
filing of such 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:
13 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. The
Exchange has fulfilled this requirement.
15 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
14 17
E:\FR\FM\10MYN1.SGM
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27468
Federal Register / Vol. 78, No. 91 / Friday, May 10, 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–NASDAQ–2013–071 on the
subject line.
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
mstockstill on DSK4VPTVN1PROD with NOTICES
All submissions should refer to File
Number SR–NASDAQ–2013–071. 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–2013–071 and
should be submitted on or before May
31, 2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–11145 Filed 5–9–13; 8:45 am]
BILLING CODE 8011–01–P
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
18:05 May 09, 2013
[File No. 500–1]
Order of Suspension of Trading in the
Matter of CoreCare Systems, Inc.,
Forticell Bioscience, Inc., Michelex
Corporation, and Rx for Africa, Inc.
May 8, 2013.
Paper Comments
16 17
SECURITIES AND EXCHANGE
COMMISSION
Jkt 229001
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of CoreCare
Systems, Inc. because it has not filed
any periodic reports since the period
ended June 30, 2005.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Forticell
Bioscience, Inc. because it has not filed
any periodic reports since the period
ended September 30, 2008.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Michelex
Corporation because it has not filed any
periodic reports since the period ended
September 30, 2006.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Rx for
Africa, Inc. because it has not filed any
periodic reports since the period ended
March 31, 2007.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
companies. Therefore, it is ordered,
pursuant to Section 12(k) of the
Securities Exchange Act of 1934, that
trading in the securities of the abovelisted companies is suspended for the
period from 9:30 a.m. EDT on May 8,
2013, through 11:59 p.m. EDT on May
21, 2013.
By the Commission.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2013–11238 Filed 5–8–13; 4:15 pm]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration # 13559 and # 13560]
Texas Disaster # TX–00401
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
PO 00000
Frm 00105
Fmt 4703
Sfmt 4703
This is a notice of an
Administrative declaration of a disaster
for the State of Texas dated May 2, 2013.
Incident: West Fertilizer Plant
Explosion.
Incident Period: 04/17/2013.
Effective Date: 05/02/2013.
Physical Loan Application Deadline
Date: 07/01/2013.
Economic Injury (EIDL) Loan
Application Deadline Date: 02/03/2014.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing And
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street, SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
applications for disaster loans may be
filed at the address listed above or other
locally announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties:
Mclennan.
Contiguous Counties: Texas:
Bell; Bosque; Coryell; Falls; Hill;
Limestone.
The Interest Rates are:
SUMMARY:
Percent
For Physical Damage:
Homeowners With Credit
Available Elsewhere ..........
Homeowners Without Credit
Available Elsewhere ..........
Businesses With Credit Available Elsewhere ..................
Businesses Without Credit
Available Elsewhere ..........
Non-Profit Organizations With
Credit Available Elsewhere
Non-Profit
Organizations
Without Credit Available
Elsewhere ..........................
For Economic Injury:
Businesses & Small Agricultural Cooperatives Without
Credit Available Elsewhere
Non-Profit
Organizations
Without Credit Available
Elsewhere ..........................
3.375
1.688
6.000
4.000
2.875
2.875
4.000
2.875
The number assigned to this disaster
for physical damage is 135594 and for
economic injury is 135600.
The State which received an EIDL
Declaration # is TEXAS.
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
E:\FR\FM\10MYN1.SGM
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]]>Agencies
[Federal Register Volume 78, Number 91 (Friday, May 10, 2013)]
[Notices]
[Pages 27466-27468]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-11145]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69521; File No. SR-NASDAQ-2013-071]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
To Amend NASDAQ Rule 4763
May 6, 2013.
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 April 24, 2013, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I and II, which Items have been prepared by NASDAQ. 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
NASDAQ proposes to amend NASDAQ Rule 4763 (Short Sale Price Test
Pursuant to Rule 201 of Regulation SHO) to establish that the short
sale price test for NASDAQ-listed securities will not be calculated
until after NASDAQ completes the Nasdaq Opening Cross or, where no
Nasdaq Opening Cross occurs, begins trading pursuant to NASDAQ Rule
4752.
The text of the proposed rule change is below.\3\ Proposed new
language is italicized; deletions are bracketed.
---------------------------------------------------------------------------
\3\ Changes are marked to the rule text that appears in the
electronic manual of Nasdaq found at https://nasdaq.cchwallstreet.com.
---------------------------------------------------------------------------
* * * * *
4763. Short Sale Price Test Pursuant to Rule 201 of Regulation SHO
(a)-(b) No change.
(c) Determination of Trigger Price. For covered securities for
which the Exchange is the listing market, the System shall determine
whether a transaction in a covered security has occurred at a Trigger
Price and shall immediately notify the single plan processor.
(1) The System will not calculate the Trigger Price of a covered
security until: [it opens trading for that security.]
(A) after the completion of the Nasdaq Opening Cross pursuant to
Rule 4752(d), for securities in which a Nasdaq Opening Cross occurs, or
(B) after the System begins trading pursuant to Rule 4752(c) for
securities in which no Nasdaq Opening Cross occurs.
(2) No change.
(d)-(g) No change.
* * * * *
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. 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
Rule 201 of Regulation SHO \4\ contains a short sale-related
circuit breaker that, if triggered, imposes a restriction on the prices
at which securities may be sold short (``short sale price test''). Rule
201(b) requires that trading centers,\5\ such as NASDAQ, establish,
maintain, and enforce written policies and procedures reasonably
designed to prevent the execution or display of a short sale order of a
covered security \6\ at a price that is less than or equal to the
current national best bid \7\ if the price of that covered security
decreases by 10% or more from the covered security's closing price as
determined by the listing market \8\ for the covered security as of the
end of regular trading hours \9\ on the prior day (``Trigger
[[Page 27467]]
Price''). Rule 4763(b) provides, in compliance with Rule 201, that in
the event the short sale price test is triggered, the Exchange will not
execute or display a short sale order with respect to a covered
security at a price that is less than or equal to the current national
best bid.
---------------------------------------------------------------------------
\4\ 17 CFR 242.201. See also Securities Exchange Act Release No.
61595 (Feb. 26, 2010), 75 Fed. Reg. 11232 (Mar. 10, 2010) and
Division of Trading and Markets: Responses to Frequently Asked
Questions Concerning Rule 201 of Regulation SHO (``T&M FAQs'').
\5\ Rule 201(a)(9) states that the term ``trading center'' shall
have the same meaning as in Rule 600(b)(78) of Regulation NMS. Rule
600(b)(78) defines a ``trading center'' as ``a national securities
exchange or national securities association that operates an SRO
trading facility, an alternative trading system, an exchange market
maker, an OTC market maker, or any other broker or dealer that
executes orders internally by trading as principal or crossing
orders as agent.'' 17 CFR 242.600(b)(78).
\6\ The term ``covered security'' shall have the same meaning as
in Rule 201 of Regulation SHO. Rule 201(a)(1) defines the term
``covered security'' to mean any ``NMS stock'' as defined under Rule
600(b)(47) of Regulation NMS. Rule 600(b)(47) of Regulation NMS
defines an ``NMS stock'' as ``any NMS security other than an
option.'' Rule 600(b)(46) of Regulation NMS defines an ``NMS
security'' as ``any security or class of securities for which
transaction reports are collected, processed, and made available
pursuant to an effective transaction reporting plan, or an effective
national market system plan for reporting transactions in listed
options.'' 17 CFR 242.201(a)(1); 17 CFR 242.600(b)(47); and 17 CFR
242.600(b)(46).
\7\ The term ``national best bid'' shall have the same meaning
as in Rule 201 of Regulation SHO. Rule 201(a)(4) states that such
term shall have the same meaning as in Rule 600(b)(42) of Regulation
NMS. 17 CFR 242.201(a)(4). See also 17 CFR 242.600(b)(42).
\8\ The term ``listing market'' shall have the same meaning as
in Rule 201 of Regulation SHO. Rule 201(a)(3) defines the term
``listing market'' to have the same meaning as the term ``listing
market'' as defined in the effective transaction reporting plan for
the covered security. 17 CFR 242.201(a)(3). See also 17 CFR
242.201(a)(2).
\9\ ``Regular trading hours'' is defined in Rule 201 to have the
same meaning as in Rule 600(b)(64) of Regulation NMS. See Rule
201(a)(7). Rule 600(b)(64) provides that ``Regular trading hours
means the time between 9:30 a.m. and 4:00 p.m. Eastern Time, or such
other time as is set forth in the procedures established pursuant to
Sec. 242.605(a)(2).'' 17 CFR 242.600(b)(64). See also T&M FAQs 1.1
and 1.2.
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Under Rule 4763(c), where NASDAQ is the listing market for a
covered security, the System (as defined in NASDAQ Rule 4751(a)) will
determine whether the short sale price test of Rule 201 has been
triggered (i.e., whether a transaction in a covered security has
occurred at a Trigger Price) and will immediately notify the single
plan processor for the covered security. Currently under Rule
4763(c)(1), the System will not calculate the Trigger Price of a
covered security until the Exchange opens trading for that security.
Because the phrase ``opens trading'' is not defined in NASDAQ's rules,
some ambiguity exists regarding its precise application. The purpose of
the proposed rule change is to clearly establish when NASDAQ will begin
calculating whether the short sale price test of Rule 201 of Regulation
SHO under the Act has been triggered for NASDAQ-listed securities.
Specifically, NASDAQ members have questioned whether the short sale
price test can be triggered in a NASDAQ-listed security by an execution
on an away market that occurs after 9:30:00 a.m. but before NASDAQ
completes the Nasdaq Opening Cross pursuant to Rule 4752. Typically,
NASDAQ systems require less than 2 seconds to complete all Nasdaq
Opening Crosses in NASDAQ-listed securities. Therefore, this question
applies only to the limited circumstances in which an away market
prints a regular way execution which would trigger the short sale price
test of Rule 201 under Regulation SHO during the brief period after
9:30:00 but prior to the Nasdaq Opening Cross.
Accordingly, NASDAQ is modifying Rule 4763(c)(1) to state
specifically when NASDAQ will begin calculating whether a transaction
in a covered security has occurred at a Trigger Price. For securities
in which a Nasdaq Opening Cross occurs as described in Rule 4752(d),
NASDAQ will begin calculating the short sale price test after
completing the Nasdaq Opening Cross. For securities in which no Nasdaq
Opening Cross occurs, as described in Rule 4752(c), NASDAQ will begin
calculating the short sale price test immediately when the System
begins regular way trading pursuant to Rule 4752(c). NASDAQ believes
that this proposed change eliminates any ambiguity that exists in the
current rule.\10\
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\10\ The proposed rule does not affect market participants'
obligations contained in Regulation SHO under the Act. See 17 CFR
242.200 et seq.
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2. Statutory Basis
NASDAQ believes that its proposal is consistent with Section 6(b)
of the Act \11\ in general, and furthers the objectives of Section
6(b)(5) of the Act \12\ 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. Specifically, NASDAQ believes that it is important to resolve
ambiguity in NASDAQ's rules, particularly a rule that NASDAQ
administers as a listing market and that impacts all trading in a given
security. The proposed change will enhance the fairness and efficiency
of the NASDAQ market without affecting market participants' ability or
cost to comply with applicable regulatory requirements.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. NASDAQ does not
believe that competition exists regarding when an exchange begins
calculating the short sale price test. However, to the extent such
competition exists today, the proposed rule change conforms to the
current practice of the New York Stock Exchange (``NYSE'') and,
therefore, equalizes the two markets' competitive positions.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) does not become operative for 30 days after the date of the
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 is effective upon filing pursuant to Section
19(b)(3)(A) of the Act \13\ and paragraph (f)(6) of Rule 19b-4
thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 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. The Exchange has fulfilled this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the 30-day operative delay because the proposed rule change provides
more clarity regarding the application of Regulation SHO under the Act
and resolves an ambiguity in the Exchange's rules. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest.\15\ Waiver of the
operative delay will allow the Exchange to resolve a potential
ambiguity in NASDAQ's rules. For these reasons, the Commission
designates the proposed rule change as operative upon filing.
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\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 such 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:
[[Page 27468]]
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-2013-071 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2013-071. 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-2013-071 and
should be submitted on or before May 31, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-11145 Filed 5-9-13; 8:45 am]
BILLING CODE 8011-01-P
