Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing of Amendment No. 1 and Order Granting Accelerated Approval of Proposed Rule Change, as Modified by Amendment No. 1, To Amend and Restate Certain Nasdaq Rules That Govern the Nasdaq Market Center, 36865-36867 [2015-15686]
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Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Notices
they would use to create the proposed
NLS Plus feed is the same as the source
available to competing vendors.
With respect to latency, the Exchange
represents that a competing vendor
could obtain the underlying data feeds
on the same latency basis as the system
that would be performing the
aggregation and consolidation of the
proposed NLS Plus feed and could
provide the same kind of product to its
customers with the same latency they
could achieve by purchasing the NLS
Plus feed from NASDAQ.18 The
Exchange also represents that it has
designed the NLS Plus feed so that it
will have no advantages over a
competing vendor with respect to the
speed of access to the underlying feeds.
With respect to pricing, although
specific fees to be charged for NLS Plus
are not part of the proposed rule change,
the Exchange represents that the pricing
will reflect the incremental cost of the
aggregation and consolidation function
for NLS Plus, and would not be lower
than the cost to a vendor creating a
competing product, including the cost
of receiving the underlying data feeds.
The Exchange further represents that the
pricing it would charge clients for NLS
Plus would enable a vendor to receive
the underlying data feeds and offer a
similar product on a competitive basis
and with no greater cost than the
Exchange.
Based on the Exchange’s
representations with respect to the
content, latency, and pricing of NLS
Plus—which are central to the
Commission’s analysis of the proposal—
the Commission finds that the proposal
is consistent with the Act and the rules
and regulations thereunder applicable to
national securities exchanges. The
Commission believes that these
representations are designed to ensure
tkelley on DSK3SPTVN1PROD with NOTICES
18 The
Exchange represents that, in order to create
NLS Plus, the system creating and supporting NLS
Plus receives the individual data feeds from each
of the NASDAQ OMX equity markets and, in turn,
aggregates and summarizes that data to create NLS
Plus and then distribute it to end users. The
Exchange further represents that this is the same
process that a competing market data vendor would
undergo should it want to create a market data
product similar to NLS Plus to distribute to its end
users. The Exchange also represents that a
competing market data vendor could receive the
individual data feeds from each of the NASDAQ
OMX equity markets at the same time the system
creating and supporting NLS Plus would for it to
create NLS Plus. Therefore, a competing market
data vendor could obtain the underlying data
elements from the NASDAQ OMX equity markets
on the same latency basis as the system that would
be performing the aggregation and consolidation of
proposed NLS Plus, and provide a similar product
to its customers with the same latency they could
achieve by purchasing NLS Plus from the Exchange.
The Exchange further represents that it would
access the underlying NLS feed from the same point
as would a market data vendor.
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that the NASDAQ OMX equity markets,
which are separate self-regulatory
organizations, do not, because of their
relationship as affiliates, offer one
another products or services on a more
favorable basis than that available to
other competing market participants.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with section
11A(c)(1)(C) of the Act and Rule
603(a)(2) of Regulation NMS
thereunder,19 and sections 6(b)(5) and
(b)(8) of the Act.20
IV. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,21 that the
proposed rule change (SR–NASDAQ–
2015–055) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–15690 Filed 6–25–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75252; File No. SR–
NASDAQ–2015–024]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing of Amendment No. 1 and Order
Granting Accelerated Approval of
Proposed Rule Change, as Modified by
Amendment No. 1, To Amend and
Restate Certain Nasdaq Rules That
Govern the Nasdaq Market Center
June 22, 2015.
I. Introduction
On March 16, 2015, The NASDAQ
Stock Market LLC (‘‘Nasdaq’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
amend and restate certain Nasdaq rules
that govern the Nasdaq Market Center in
order to provide a clearer and more
detailed description of certain aspects of
its functionality. The proposed rule
change was published for comment in
the Federal Register on March 26,
19 15 U.S.C. 78k–1(c)(1)(C) and 17 CFR
242.603(a)(2).
20 15 U.S.C. 78f(b)(5) and (b)(8).
21 15 U.S.C. 78s(b)(2).
22 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Sfmt 4703
36865
2015.3 The Commission received no
comment letters regarding the proposed
rule change. On May 6, 2015, the
Commission extended to June 24, 2015,
the time period in which to approve the
proposed rule change, disapprove the
proposed rule change, or institute
proceedings to determine whether the
proposed rule change should be
disapproved.4 On June 15, 2015, the
Exchange filed Amendment No. 1 to the
proposed rule change.5 This order
approves the proposed rule change.
II. Description of the Amended
Proposal
The Exchange proposes to amend and
restate certain rules governing the
Nasdaq Market Center in order to
provide additional detail and clarity
regarding its order type functionality.6
This proposed rule change is a response
to Chair White’s request that each selfregulatory organization (‘‘SRO’’)
conduct a comprehensive review of the
operation of each of the order types that
it offers to members.7
While the Exchange believes that its
current rules and other public
disclosures provide a comprehensive
description of the operation of the
Nasdaq Market Center and are sufficient
for members and the investing public to
have an accurate understanding of its
market structure,8 it also acknowledges
that a restatement of certain rules will
further clarify the operation of its
system.9 For instance, Nasdaq believes
that adding examples of order type
operation to its rules will promote
greater understanding of Nasdaq’s
market structure.10 In addition, Nasdaq
asserts that certain functionality
previously described as an ‘‘order type’’
is more precisely characterized as an
attribute that may be added to a
particular order.11 Accordingly, this
proposed rule change distinguishes
between ‘‘Order Types’’ and ‘‘Order
Attributes,’’ and provides descriptions
3 See Securities Exchange Act Release No. 74558
(March 20, 2015), 80 FR 16050 (‘‘Notice’’).
4 See Securities Exchange Act Release No. 74881,
80 FR 27216 (May 12, 2015).
5 In Amendment No. 1, the Exchange proposed to
correct typographical errors in the original filing,
further improve the clarity of certain rule language,
and include additional explanation with regard to
the purpose of the proposed rule change.
6 See Notice, 80 FR at 16050.
7 Id.; see also Mary Jo White, Chair, Commission,
Speech at the Sandler O’Neill & Partners, L.P.
Global Exchange and Brokerage Conference (June 5,
2014), available at https://www.sec.gov/News/
Speech/Detail/Speech/1370542004312.
8 See Notice, 80 FR at 16050.
9 Id.
10 Id.
11 Id.
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Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Notices
of the Order Attributes that may be
attached to particular Order Types.12
Currently, Nasdaq Rule 4751 sets
forth most of the rules governing
Nasdaq’s Order Types and Order
Attributes, as well as other defined
terms that pertain to trading securities
on the Exchange.13 Nasdaq proposes to
restate and amend Rule 4751 as new
Rule 4701.14 Nasdaq also proposes to
amend the definitions pertaining to
Order Types and Order Attributes and
to relocate them from Rule 4751 to new
Rules 4702 (Order Types) and 4703
(Order Attributes), respectively.15 In
addition, Nasdaq proposes certain
conforming and technical changes to
Rules 4752, 4754–4758, and 4780.16
Nasdaq represents that, except where
specifically stated otherwise, all
proposed rules are restatements of
existing rules and are not intended to
reflect substantive changes to the rule
text or the operation of the Nasdaq
Market Center.17 Proposed Rule 4702
related to Order Types contains
definitions and descriptions of Price to
Comply Orders, Price to Display Orders
(referred to as ‘‘Price to Comply Post
Orders’’ in current Rule 4751),18 NonDisplayed Orders, Post-Only Orders,
Midpoint Peg Post-Only Orders,
Supplemental Orders, Market Maker Peg
Orders, Market on Open Orders, Limit
on Open Orders, Opening Imbalance
Only Orders, Market on Close Orders,
Limit on Close Orders, and Imbalance
Only Orders. Proposed Rule 4703
related to Order Attributes contains
definitions and descriptions of time-inforce (‘‘TIF’’) modifiers, order size, order
price, pegging, minimum quantity,
routing, discretion, reserve size,
attribution, intermarket sweep order
(‘‘ISO’’) designation, display, and
participation in the Nasdaq opening
cross or closing cross.19
In Amendment No. 1, the Exchange
proposes to add language further
explaining the operation of the
following order types: Post-Only Orders;
orders with a time-in-force of IOC,
including Routable Orders and PostOnly Orders; Market Maker Peg Orders;
orders with Midpoint Pegging, Primary
Pegging or Market Pegging; Midpoint
12 Id.
13 See
Rule 4751.
proposed Rule 4701.
15 See proposed Rules 4702 and 4703.
16 Nasdaq states that, in subsequent proposed rule
changes, it plans to restate the remainder of its
Rules numbered 4752 through 4780 so that they
appear sequentially following Rule 4703. See
Notice, 80 FR at 16050.
17 Id.
18 Id. at 16054 n.29.
19 The Notice contains additional details related
to proposed Rules 4702 and 4703. See Notice, 80
FR at 16051–69.
tkelley on DSK3SPTVN1PROD with NOTICES
14 See
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Peg Post-Only Orders; orders designated
with both Pegging and Routing
attributes; Minimum Quantity Orders;
and orders designated with a reactive
routing strategy.20 For example, the
Exchange states that for Order Types
that list both Pegging and Routing as
possible Order Attributes, the two Order
Attributes may be combined since
Pegging serves to establish the price of
the order, while Routing establishes the
market center(s) to which the system’s
routing functionality may direct a
routed order if liquidity is available at
that price.21 The Exchange also
proposes to add further specification
regarding the availability of certain
order types only through certain
communication protocols.22 For
example, the Exchange states that a
Post-Only Order with a TIF of IOC may
not be entered through the RASH, QIX,
or FIX protocols.23 In addition, the
Exchange proposes to add language
stating that one or more Order
Attributes may be assigned to a single
order, but if the use of multiple Order
Attributes would result in contradictory
instructions, the system will reject the
order or remove non-conforming Order
Attributes.24
III. Discussion and Commission
Findings
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange.25 In particular, the
Commission finds that the proposed
rule change is consistent with section
6(b)(5) of the Act,26 which requires,
among other things, that the rules of a
national securities exchange be
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
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; and are not designed to
20 See
Amendment No. 1.
21 Id.
22 Id.
23 Id.
24 Id.
25 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
26 15 U.S.C. 78f(b)(5).
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Frm 00110
Fmt 4703
Sfmt 4703
permit unfair discrimination between
customers, issuers, brokers, or dealers.
The Commission notes that the
Exchange believes that the proposal is
consistent with section 6(b)(5) of the Act
because the reorganized and enhanced
descriptions of its Order Types, Order
Attributes, and related System
functionality should promote just and
equitable principles of trade and perfect
the mechanisms of a free and open
market and the national market system
by providing greater clarity concerning
certain aspects of the System’s
operations.27 In addition, the
Commission notes that Nasdaq believes
that the proposed rule change should
contribute to the protection of investors
and the public interest by making
Nasdaq’s rules easier to understand.28
Further, Nasdaq believes that additional
specificity in its rules will promote a
better understanding of Nasdaq’s
operation, thereby facilitating fair
competition among brokers and dealers
and among markets.29
The Commission notes that, according
to the Exchange, the proposal does not
add any new functionality but instead
re-organizes the Exchange’s order type
rules and provides additional detail
regarding the order type functionality
currently offered by the Exchange.
Based on the Exchange’s representation,
the Commission believes that the
proposed rule change does not raise any
novel regulatory considerations and
should provide greater specificity,
clarity and transparency with respect to
the order type functionality available on
the Exchange. In addition, the
Commission notes that the Exchange’s
proposed rule changes provide
additional detail related to functionality
for certain order types and the handling
of orders during initial entry and after
posting to the Nasdaq Book.
Accordingly, the Commission believes
that this proposed rule change should
provide greater transparency with
respect to the Exchange’s order type
functionality. For these reasons, the
Commission believes that the proposal
should help to prevent fraudulent and
manipulative acts and practices,
promote just and equitable principles of
trade, remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and, in general, protect
investors and the public interest.
The Commission finds good cause to
approve the filing, as amended by
Amendment No. 1 to the proposed rule
change, prior to the thirtieth day after
27 See
Notice, 80 FR at 16069.
28 Id.
29 Id.
E:\FR\FM\26JNN1.SGM
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Federal Register / Vol. 80, No. 123 / Friday, June 26, 2015 / Notices
the date of publication of notice of filing
thereof in the Federal Register. The
proposed amendments should further
increase the Exchange’s transparency
with respect to the operation of various
order types and modifiers, and serve to
enhance investors’ understanding of the
tools available with respect to the
handling of their orders. Accelerated
approval would allow the Exchange to
update its rule text immediately, thus
providing users with greater clarity with
respect to the use and potential use of
functionality offered by the Exchange.
In addition, the initial proposal was
open for comment for twenty-one days
after publication and generated no
comment. Accordingly, the Commission
believes that good cause exists,
consistent with sections 6(b)(5) and
19(b) of the Act,30 to approve the filing,
as amended by Amendment No. 1 to the
proposed rule change, on an accelerated
basis.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
tkelley on DSK3SPTVN1PROD with NOTICES
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–2015–024 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Robert W. Errett, Deputy Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2015–024. 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
30 15
U.S.C. 78f(b)(5); 15 U.S.C. 78s(b).
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18:15 Jun 25, 2015
Jkt 235001
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–2015–024 and should be
submitted on or before July 17, 2015.
V. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,31 that the
proposed rule change (SR–NASDAQ–
2015–024) be, and it hereby is,
approved, asamended.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–15686 Filed 6–25–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–75260; File No. SR–OCC–
2015–013]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of Proposed Rule Change To
Codify Procedures for Resizing the
Options Clearing Corporation’s
Clearing Fund on a Monthly Basis and
Increasing Such Clearing Fund Size on
an Intra-Month Basis
June 22, 2015.
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 June 19,
2015, The Options Clearing Corporation
(‘‘OCC’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II and III below, which Items
have been prepared by OCC. The
Commission is publishing this notice to
31 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
32 17
PO 00000
Frm 00111
Fmt 4703
Sfmt 4703
36867
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The Commission recently approved a
proposed rule change, and issued a
Notice of No-Objection to an Advance
Notice Filing, concerning the
establishment of procedures to resize
OCC’s Clearing Fund and the addition
of financial resources through intra-day
margin calls and/or an intra-month
increase of the Clearing Fund.3 This
proposed rule change by OCC would
codify the authority granted to OCC
through such approval and nonobjection by amending the second
sentence of Rule 1001(a).
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission,
OCC 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. OCC has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
OCC is submitting this proposed rule
change to amend Rule 1001(a) in order
to codify the Commission’s recent
approval of and non-objection to
procedures for resizing the Clearing
Fund on a monthly basis and increasing
such Clearing Fund size on an intramonth basis to ensure OCC maintains
sufficient financial resources consistent
with regulatory requirements.4
On October 16, 2014, OCC filed a
notice reflecting emergency action taken
to permit it to increase the size of the
Clearing Fund intra-month to ensure
that it had sufficient financial resources
to cover the potential loss associated
with a Clearing Member default that
presented the largest exposure to OCC
under extreme but plausible market
conditions.5 The Commission since has
3 See Securities Exchange Act Release No. 74980
(May 15, 2015), 80 FR 29364 (May 21, 2015) (SR–
OCC–2015–009). See also Securities Exchange Act
Release No. 74981 (May 15, 2015), 80 FR 29367
(May 21, 2015) (SR–OCC–2014–811).
4 Id.
5 See Securities Exchange Act Release No. 73579
(November 12, 2014), 79 FR 68747 (November 18,
Continued
E:\FR\FM\26JNN1.SGM
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]]>Agencies
[Federal Register Volume 80, Number 123 (Friday, June 26, 2015)]
[Notices]
[Pages 36865-36867]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-15686]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-75252; File No. SR-NASDAQ-2015-024]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing of Amendment No. 1 and Order Granting Accelerated
Approval of Proposed Rule Change, as Modified by Amendment No. 1, To
Amend and Restate Certain Nasdaq Rules That Govern the Nasdaq Market
Center
June 22, 2015.
I. Introduction
On March 16, 2015, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend and restate certain Nasdaq rules that
govern the Nasdaq Market Center in order to provide a clearer and more
detailed description of certain aspects of its functionality. The
proposed rule change was published for comment in the Federal Register
on March 26, 2015.\3\ The Commission received no comment letters
regarding the proposed rule change. On May 6, 2015, the Commission
extended to June 24, 2015, the time period in which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether the proposed rule change should be
disapproved.\4\ On June 15, 2015, the Exchange filed Amendment No. 1 to
the proposed rule change.\5\ This order approves the proposed rule
change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 74558 (March 20,
2015), 80 FR 16050 (``Notice'').
\4\ See Securities Exchange Act Release No. 74881, 80 FR 27216
(May 12, 2015).
\5\ In Amendment No. 1, the Exchange proposed to correct
typographical errors in the original filing, further improve the
clarity of certain rule language, and include additional explanation
with regard to the purpose of the proposed rule change.
---------------------------------------------------------------------------
II. Description of the Amended Proposal
The Exchange proposes to amend and restate certain rules governing
the Nasdaq Market Center in order to provide additional detail and
clarity regarding its order type functionality.\6\ This proposed rule
change is a response to Chair White's request that each self-regulatory
organization (``SRO'') conduct a comprehensive review of the operation
of each of the order types that it offers to members.\7\
---------------------------------------------------------------------------
\6\ See Notice, 80 FR at 16050.
\7\ Id.; see also Mary Jo White, Chair, Commission, Speech at
the Sandler O'Neill & Partners, L.P. Global Exchange and Brokerage
Conference (June 5, 2014), available at https://www.sec.gov/News/Speech/Detail/Speech/1370542004312.
---------------------------------------------------------------------------
While the Exchange believes that its current rules and other public
disclosures provide a comprehensive description of the operation of the
Nasdaq Market Center and are sufficient for members and the investing
public to have an accurate understanding of its market structure,\8\ it
also acknowledges that a restatement of certain rules will further
clarify the operation of its system.\9\ For instance, Nasdaq believes
that adding examples of order type operation to its rules will promote
greater understanding of Nasdaq's market structure.\10\ In addition,
Nasdaq asserts that certain functionality previously described as an
``order type'' is more precisely characterized as an attribute that may
be added to a particular order.\11\ Accordingly, this proposed rule
change distinguishes between ``Order Types'' and ``Order Attributes,''
and provides descriptions
[[Page 36866]]
of the Order Attributes that may be attached to particular Order
Types.\12\
---------------------------------------------------------------------------
\8\ See Notice, 80 FR at 16050.
\9\ Id.
\10\ Id.
\11\ Id.
\12\ Id.
---------------------------------------------------------------------------
Currently, Nasdaq Rule 4751 sets forth most of the rules governing
Nasdaq's Order Types and Order Attributes, as well as other defined
terms that pertain to trading securities on the Exchange.\13\ Nasdaq
proposes to restate and amend Rule 4751 as new Rule 4701.\14\ Nasdaq
also proposes to amend the definitions pertaining to Order Types and
Order Attributes and to relocate them from Rule 4751 to new Rules 4702
(Order Types) and 4703 (Order Attributes), respectively.\15\ In
addition, Nasdaq proposes certain conforming and technical changes to
Rules 4752, 4754-4758, and 4780.\16\
---------------------------------------------------------------------------
\13\ See Rule 4751.
\14\ See proposed Rule 4701.
\15\ See proposed Rules 4702 and 4703.
\16\ Nasdaq states that, in subsequent proposed rule changes, it
plans to restate the remainder of its Rules numbered 4752 through
4780 so that they appear sequentially following Rule 4703. See
Notice, 80 FR at 16050.
---------------------------------------------------------------------------
Nasdaq represents that, except where specifically stated otherwise,
all proposed rules are restatements of existing rules and are not
intended to reflect substantive changes to the rule text or the
operation of the Nasdaq Market Center.\17\ Proposed Rule 4702 related
to Order Types contains definitions and descriptions of Price to Comply
Orders, Price to Display Orders (referred to as ``Price to Comply Post
Orders'' in current Rule 4751),\18\ Non-Displayed Orders, Post-Only
Orders, Midpoint Peg Post-Only Orders, Supplemental Orders, Market
Maker Peg Orders, Market on Open Orders, Limit on Open Orders, Opening
Imbalance Only Orders, Market on Close Orders, Limit on Close Orders,
and Imbalance Only Orders. Proposed Rule 4703 related to Order
Attributes contains definitions and descriptions of time-in-force
(``TIF'') modifiers, order size, order price, pegging, minimum
quantity, routing, discretion, reserve size, attribution, intermarket
sweep order (``ISO'') designation, display, and participation in the
Nasdaq opening cross or closing cross.\19\
---------------------------------------------------------------------------
\17\ Id.
\18\ Id. at 16054 n.29.
\19\ The Notice contains additional details related to proposed
Rules 4702 and 4703. See Notice, 80 FR at 16051-69.
---------------------------------------------------------------------------
In Amendment No. 1, the Exchange proposes to add language further
explaining the operation of the following order types: Post-Only
Orders; orders with a time-in-force of IOC, including Routable Orders
and Post-Only Orders; Market Maker Peg Orders; orders with Midpoint
Pegging, Primary Pegging or Market Pegging; Midpoint Peg Post-Only
Orders; orders designated with both Pegging and Routing attributes;
Minimum Quantity Orders; and orders designated with a reactive routing
strategy.\20\ For example, the Exchange states that for Order Types
that list both Pegging and Routing as possible Order Attributes, the
two Order Attributes may be combined since Pegging serves to establish
the price of the order, while Routing establishes the market center(s)
to which the system's routing functionality may direct a routed order
if liquidity is available at that price.\21\ The Exchange also proposes
to add further specification regarding the availability of certain
order types only through certain communication protocols.\22\ For
example, the Exchange states that a Post-Only Order with a TIF of IOC
may not be entered through the RASH, QIX, or FIX protocols.\23\ In
addition, the Exchange proposes to add language stating that one or
more Order Attributes may be assigned to a single order, but if the use
of multiple Order Attributes would result in contradictory
instructions, the system will reject the order or remove non-conforming
Order Attributes.\24\
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\20\ See Amendment No. 1.
\21\ Id.
\22\ Id.
\23\ Id.
\24\ Id.
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III. Discussion and Commission Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities
exchange.\25\ In particular, the Commission finds that the proposed
rule change is consistent with section 6(b)(5) of the Act,\26\ which
requires, among other things, that the rules of a national securities
exchange be 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 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; and are not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\25\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\26\ 15 U.S.C. 78f(b)(5).
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The Commission notes that the Exchange believes that the proposal
is consistent with section 6(b)(5) of the Act because the reorganized
and enhanced descriptions of its Order Types, Order Attributes, and
related System functionality should promote just and equitable
principles of trade and perfect the mechanisms of a free and open
market and the national market system by providing greater clarity
concerning certain aspects of the System's operations.\27\ In addition,
the Commission notes that Nasdaq believes that the proposed rule change
should contribute to the protection of investors and the public
interest by making Nasdaq's rules easier to understand.\28\ Further,
Nasdaq believes that additional specificity in its rules will promote a
better understanding of Nasdaq's operation, thereby facilitating fair
competition among brokers and dealers and among markets.\29\
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\27\ See Notice, 80 FR at 16069.
\28\ Id.
\29\ Id.
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The Commission notes that, according to the Exchange, the proposal
does not add any new functionality but instead re-organizes the
Exchange's order type rules and provides additional detail regarding
the order type functionality currently offered by the Exchange. Based
on the Exchange's representation, the Commission believes that the
proposed rule change does not raise any novel regulatory considerations
and should provide greater specificity, clarity and transparency with
respect to the order type functionality available on the Exchange. In
addition, the Commission notes that the Exchange's proposed rule
changes provide additional detail related to functionality for certain
order types and the handling of orders during initial entry and after
posting to the Nasdaq Book. Accordingly, the Commission believes that
this proposed rule change should provide greater transparency with
respect to the Exchange's order type functionality. For these reasons,
the Commission believes that the proposal should help to prevent
fraudulent and manipulative acts and practices, promote just and
equitable principles of trade, remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, protect investors and the public interest.
The Commission finds good cause to approve the filing, as amended
by Amendment No. 1 to the proposed rule change, prior to the thirtieth
day after
[[Page 36867]]
the date of publication of notice of filing thereof in the Federal
Register. The proposed amendments should further increase the
Exchange's transparency with respect to the operation of various order
types and modifiers, and serve to enhance investors' understanding of
the tools available with respect to the handling of their orders.
Accelerated approval would allow the Exchange to update its rule text
immediately, thus providing users with greater clarity with respect to
the use and potential use of functionality offered by the Exchange. In
addition, the initial proposal was open for comment for twenty-one days
after publication and generated no comment. Accordingly, the Commission
believes that good cause exists, consistent with sections 6(b)(5) and
19(b) of the Act,\30\ to approve the filing, as amended by Amendment
No. 1 to the proposed rule change, on an accelerated basis.
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\30\ 15 U.S.C. 78f(b)(5); 15 U.S.C. 78s(b).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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-2015-024 on the subject line.
Paper Comments
Send paper comments in triplicate to Robert W. Errett,
Deputy Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2015-024. 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-2015-024 and should
be submitted on or before July 17, 2015.
V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\31\ that the proposed rule change (SR-NASDAQ-2015-024) be, and it
hereby is, approved, as amended.
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\31\ 15 U.S.C. 78s(b)(2).
\32\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\32\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-15686 Filed 6-25-15; 8:45 am]
BILLING CODE 8011-01-P
