Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Extend the Cutoff Times for Accepting On Close Orders Entered for Participation in the Nasdaq Closing Cross, 45165-45168 [2018-19148]

Download as PDF Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Notices Dated: August 30, 2018. Brent J. Fields, Secretary. 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 [FR Doc. 2018–19258 Filed 8–31–18; 11:15 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83988; File No. SR– NASDAQ–2018–068] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Proposed Rule Change To Extend the Cutoff Times for Accepting On Close Orders Entered for Participation in the Nasdaq Closing Cross August 29, 2018. 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 August 15, 2018, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the cutoff times for accepting on close orders entered for participation in the Nasdaq Closing Cross, and make related changes. The text of the proposed rule change is available on the Exchange’s website at https://nasdaq.cchwallstreet.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. daltland on DSKBBV9HB2PROD with NOTICES 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 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 17:04 Sep 04, 2018 Jkt 244001 1. Purpose The purpose of the proposed rule change is to extend the cutoff times for accepting on close orders entered for participation in the Nasdaq Closing Cross. The Nasdaq Closing Cross provides a transparent auction process that determines a single price for the close. As the equities markets continue to evolve and become more efficient and automated, the Exchange believes that the current cutoff times are overly restrictive to market participants that wish to participate in the Nasdaq Closing Cross and that typically have to tie up on close interest for ten minutes or more at the end of the trading day to participate in the cross. Similar to cutoffs provided by other equities exchanges that operate a closing auction, the Exchange believes that the proposed cutoff times would give Participants greater control over their on close orders while still leaving enough time at the end of the trading day for Participants to react to and offset Imbalances. Last, the Exchange is proposing to begin disseminating the Order Imbalance Indicator at the new Closing Cross Cutoff. Current Cutoff Times Generally, Market On Close (‘‘MOC’’) 3 and Limit on Close (‘‘LOC’’) 4 Orders are accepted today until immediately prior to 3:50 p.m. ET (‘‘Closing Cross Cutoff’’) 5 when the Exchange begins disseminating an Order Imbalance Indicator 6 that contains information about the Nasdaq Closing Cross. Imbalance Only (‘‘IO’’) Orders, on the other hand, are designed to allow 3 A MOC Order is an Order Type entered without a price that may be executed only during the Nasdaq Closing Cross. See Rule 4702(b)(11). 4 A LOC Order is an Order Type entered with a price that may be executed only in the Nasdaq Closing Cross, and only if the price determined by the Nasdaq Closing Cross is equal to or better than the price at which the LOC Order was entered. See Rule 4702(b)(12). 5 As used in this proposed rule change, the term ‘‘Closing Cross Cutoff’’ refers to the various 3:50 p.m. ET cutoff times described herein for the Nasdaq Closing Cross, including the regular cutoff time for entering MOC/LOC Orders described above and the related cutoff time for cancelling or modifying IO Orders, which is currently at or after 3:50 p.m. ET in contrast to MOC/LOC Orders whose cutoff times are immediately prior to 3:50 p.m. ET. 6 ‘‘Order Imbalance Indicator’’ means a message disseminated by electronic means containing information about MOC, LOC, IO, and Close Eligible Interest and the price at which those orders would execute at the time of dissemination. PO 00000 Frm 00078 Fmt 4703 Sfmt 4703 45165 Participants to offset Imbalances, and may therefore be entered until the time of execution of the Nasdaq Closing Cross, but may not be cancelled or modified at or after the Closing Cross Cutoff, except to correct legitimate errors as described below.7 The Exchange also continues to accept LOC Orders between the Closing Cross Cutoff and immediately prior to 3:55 p.m. ET (‘‘Late Cutoff’’) 8 provided that there is a First Reference Price.9 In order to promote price stability in the Nasdaq Closing Cross, such LOC Orders entered during this period are either canceled or re-priced to the First Reference Price, based on the Participant’s instruction, if the LOC Order’s limit price is more aggressive than the First Reference Price.10 Imbalance Only (‘‘IO’’) Orders,11 meanwhile, are designed to permit Participants to offset Imbalances and therefore may be entered until 4:00 p.m. ET when the Exchange executes the Nasdaq Closing Cross and disseminates the executions via the consolidated tape.12 Participants may also be able to cancel and/or modify their on close orders between the Closing Cross Cutoff and immediately prior to the Late Cutoff in limited circumstances. Specifically, during this time period: (1) MOC Orders and IO Orders can be cancelled and/or modified,13 and (2) LOC Orders can be cancelled but not modified,14 in each case to correct a legitimate error in the order (e.g., Side, Size, Symbol, or Price, or duplication of an Order). Proposed Cutoff Times The Exchange now proposes to change the Closing Cross Cutoff to 3:55 p.m. ET and the Late Cutoff to 3:58 p.m. ET.15 The Exchange believes that this 7 See Rule 4702(b)(13)(A). used in this proposed rule change, the term ‘‘Late Cutoff’’ refers to the various 3:55 p.m. ET cutoff times described herein for the Nasdaq Closing Cross, including the cutoff time for entering the LOC Orders described above and the cutoff time for correcting legitimate errors in an on close order. 9 ‘‘First Reference Price’’ shall mean the Current Reference Price in the first Order Imbalance Indicator disseminated at or after 3:50 p.m. ET. See Rule 4754(a)(9). 10 See Rule 4702(b)(12)(A). 11 An IO Order is an Order entered with a price that may be executed only in the Nasdaq Closing Cross and only against MOC Orders or LOC Orders. See Rule 4702(b)(13). 12 See Rule 4702(b)(13)(A). 13 See Rule 4702(b)(11)(A), (13)(A). As provided in these rules, MOC and IO Orders cannot be cancelled or modified at or after the Late Cutoff for any reason. 14 See Rule 4702(b)(12)(A). 15 The Exchange proposes to reflect the proposed cutoff times throughout the Nasdaq rulebook, including Rule 4702(b)(11)–(13), which defines 8 As E:\FR\FM\05SEN1.SGM Continued 05SEN1 45166 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Notices daltland on DSKBBV9HB2PROD with NOTICES proposed change will enhance the experience provided to market participants who will be able to enter and interact with their on close orders later in the trading day. The Nasdaq Closing Cross was established by the Exchange in 2004 to create a more robust close that would allow for price discovery, and an execution that would result in an accurate, tradable closing price.16 While the Exchange has made changes to the Nasdaq Closing Cross in the fourteen years since it was established, including by recently permitting LOC Orders to be entered until the Late Cutoff in certain circumstances, the normal Closing Cross Cutoff has remained at 3:50 p.m. ET. At the same time, the equities markets have become more efficient and automated. The Exchange therefore no longer believes that ten minutes is needed for market participants to react to and resolve Imbalances in the Nasdaq Closing Cross. As a result, the Exchange is proposing to extend the Closing Cross Cutoff time to 3:55 p.m. ET, which is consistent with the cutoff time provided in the CBOE BZX Exchange, Inc. (‘‘BZX’’) closing auction.17 While other exchanges operate closing auctions with various cutoff times as late as 3:59 p.m. ET,18 the Exchange believes that a 3:55 p.m. ET Closing Cross Cutoff strikes the appropriate balance for the Nasdaq Closing Cross in today’s trading environment. The Exchange also continues to believe that it is beneficial to price discovery to permit Participants to submit LOC Orders after the regular Closing Cross Cutoff if there is a First Reference Price as provided in SR– Nasdaq–2017–061. Likewise, the Exchange continues to believe that it is appropriate to provide a brief period of additional time for Participants to correct legitimate errors in their orders entered for participation in the Nasdaq Closing Cross. The Exchange therefore proposes to extend the Late Cutoff to 3:58 p.m. ET. Other exchanges also accept similar orders in this timeframe. For example, BZX offers ‘‘Late-LimitMOC, LOC, and IO Orders, as well as Rules 4754(a)(9), (b)(1) and (b)(7)(B), which describe the Nasdaq Closing Cross. With the changed cutoff times, the Exchange will reject MOC Orders entered after the 3:55 p.m. ET cutoff, as described in proposed Rule 4702(b)(11)(B), and will reject LOC Orders and Closing Cross/Extended Hours Orders entered at or after 3:58 p.m. ET, as described in proposed Rule 4702(b)(12)(B). 16 See Securities Exchange Act Release Nos. 48878 (December 4, 2003), 68 FR 69098 (December 11, 2003) (Notice); 49406 (March 11, 2004), 69 FR 12879 (March 18, 2004) (Approval Order) (SR– NASD–2003–173). 17 See BZX Rule 11.23(c)(1)(A). 18 See infra note 20. VerDate Sep<11>2014 17:04 Sep 04, 2018 Jkt 244001 On-Close Orders’’ that are accepted until the execution of their closing auction at 4:00 p.m. ET,19 and NYSE Arca, Inc. (‘‘Arca’’) initiates its ‘‘Closing Auction Imbalance Freeze’’ for all MOC and LOC Orders at 3:59 p.m. ET.20 LOC Orders submitted after the proposed Closing Cross Cutoff and before the proposed Late Cutoff will continue to be handled as they are today, and would therefore only be accepted if there is a First Reference Price, and would be subject to re-pricing if the limit price of the LOC Order is more aggressive than the First Reference Price or rejection, depending on the election of the member. Furthermore, the cancellation and/or modification of orders during the extended period would continue to be allowed only to correct a legitimate error in the order. In addition, Rule 4702(b)(12)(A) currently provides that a Closing Cross/ Extended Hours Order that is entered between 3:50 p.m. ET and the time of the Nasdaq Closing Cross will be rejected if it has been assigned a Pegging Attribute. Pegging is an Order Attribute that allows an Order to have its price automatically set with reference to the national best bid or offer (‘‘NBBO’’), and is therefore available only during Market Hours.21 Since a Pegging Attribute is only available during Market Hours, an Order with a Pegging Attribute can never be entered as a Closing Cross/Extended Hours Order, which would be valid only after Market Hours had concluded. The Exchange proposes to make this clear in Rule 4702(b)(12)(B) by removing the current reference to the time during which such an Order is entered. As proposed, the rule would provide that a Closing Cross/ Extended Hours Order will be rejected if it has been assigned a Pegging Attribute. Order Imbalance Indicator Once MOC/LOC Orders are locked in at the Closing Cross Cutoff, the Exchange begins disseminating the Order Imbalance Indicator to provide market participants with information about the Nasdaq Closing Cross. With the proposed changes to the Closing Cross Cutoff, the Exchange is proposing to also begin disseminating the Order Imbalance Indicator at the new Closing Cross Cutoff of 3:55 p.m. ET.22 The 19 See BZX Rule 11.23(c)(1)(A). Arca Rule 7.35–E(d)(2). 21 See Rule 4703(d). 22 Because the First Reference Price refers to the Current Reference Price in the first Order Imbalance Indicator disseminated to market participants, Rule 4754(a)(9) will similarly be updated to reference 3:55 p.m. ET, which is when the first Order Imbalance Indicator will now be disseminated. 20 See PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 Exchange has always disseminated the Order Imbalance Indicator once MOC/ LOC Orders are locked in at the Closing Cross Cutoff. Prior to the Closing Cross Cutoff, Participants have significantly more leeway to enter new on close orders or cancel or modify on close orders already entered. The Exchange therefore believes that continuing to disseminate the Order Imbalance Indicator starting at the Closing Cross Cutoff, which as proposed will be 3:55 p.m. ET, will ensure that market participants receive a more complete picture of on close interest when such interest is relatively settled. Currently, the Order Imbalance Indicator is disseminated every five seconds starting at the Closing Cross Cutoff discussed above. The Exchange believes, however, that more frequent dissemination will be beneficial to market participants that use this information, and is therefore proposing to increase the frequency of dissemination to every second. This proposed change will apply to the Order Imbalance Indicator for the Nasdaq Closing Cross as well as the similar Order Imbalance Indicator provided for the LULD Closing Cross,23 Nasdaq Opening Cross,24 and the Nasdaq Halt Cross,25 which each have a five second dissemination frequency today. Conforming Changes Last, the Exchange is proposing to make conforming changes to Rule 7018(a), which provides the fees and credits available to members for the use of the order execution and routing services of the Nasdaq Market Center for all securities priced at $1 or more that it trades. Under Rules 7018(a)(1) and (2), Nasdaq has credits that exclude Limiton-Close Order entered between 3:50 p.m. ET and immediately prior to 3:55 p.m. ET. The Exchange is proposing to update these times to reflect the times proposed herein. Implementation The Exchange proposes to implement all of the changes described in this proposed rule change in either Q3 or Q4 2018. The Exchange will announce the implementation date of these changes in an Equity Trader Alert issued to Participants prior to implementing the change. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) 23 See Rule 4754(b)(6). Rule 4752(d)(1). 25 See Rule 4753(b)(1). 24 See E:\FR\FM\05SEN1.SGM 05SEN1 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Notices of the Act,26 in general, and furthers the objectives of Section 6(b)(5) of the Act,27 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, the Exchange believes that extending the cutoff times for submitting on close orders will allow market participants to retain control over their orders for a longer period of time, and thereby assist those market participants in managing their trading at the close. Furthermore, the Exchange believes that the proposed changes to the Order Imbalance Indicator will protect investors and the public interest by continuing to provide complete and timely information to the market. Cutoff Times While the Exchange originally implemented a Closing Cross Cutoff time in 2004 that was ten minutes prior to the execution of the Nasdaq Closing Cross, the Exchange no longer believes that this much time is required for market participants to respond to and offset Imbalances. To promote price discovery in the Nasdaq Closing Cross, the Exchange disseminates an Order Imbalance Indicator with certain information about the cross to market participants beginning at 3:50 p.m. ET, at which time market participants have more limited means of entering orders to participate in the Nasdaq Closing Cross. Specifically, Participants cannot enter new MOC Orders on or after 3:50 p.m. ET, and between 3:50 p.m. ET and immediately prior to 3:55 p.m. ET are limited to entering LOC Orders that are subject to being rejected or re-priced if too aggressive based on the First Reference Price disseminated at that time (or rejected if there is no First Reference Price). Otherwise, the ability to update MOC or LOC Orders is limited to correcting legitimate errors. The Exchange believes that market participants would be better served if the Closing Cross Cutoff was extended to 3:55 p.m. ET so that the period of time where they have limited control over their orders is reduced.28 The daltland on DSKBBV9HB2PROD with NOTICES 26 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 28 The ‘‘Closing Cross Cutoff’’ refers to various 3:50 p.m. ET cutoff times for the Nasdaq Closing Cross. As such, this change will impact functionality that is tied to the regular cutoff time for entering MOC/LOC Orders, such as the cutoff time for cancelling or modifying IO Orders. See supra note 5. The Exchange believes that Participants should continue to be able to cancel or modify their IO Orders, which are designed to offset 27 15 VerDate Sep<11>2014 17:04 Sep 04, 2018 Jkt 244001 Exchange believes that this will reduce risk for market participants that participate in the Nasdaq Closing Cross, and improve price discovery by facilitating additional participation by market participants that may not be willing to lose control over their on close interest for ten minutes. Another equities exchange, BZX, already uses a 3:55 p.m. ET cutoff for regular MOC/ LOC entry in its closing auction, and the Exchange believes that this cutoff time reflects the efficiency and more automated nature of trading in today’s market. In addition, the Exchange continues to believe that it is appropriate to offer a later cutoff time for certain LOC Orders, as well as for the correction of legitimate errors. The Exchange launched the functionality described in SR–Nasdaq–2017–061 last year, and believes that it provides a helpful means for promoting price discovery in the Nasdaq Closing Cross. Since the Exchange is extending the Closing Cross Cutoff to the time that these LOC Orders are accepted until today, the Exchange is proposing to extend the Late Cutoff as well. The Exchange believes that the market will continue to benefit from permitting LOC Orders to be submitted until 3:58 p.m. ET, subject to the conditions described in the current rule with respect to rejection or re-pricing and orders being accepted only when there is matched buy and sell interest that is eligible to participate in the Nasdaq Closing Cross, as evidenced by a First Reference Price being disseminated to market participants. BZX, which offers a similar ‘‘Late-LimitOn-Close Order’’ accepts those orders until 4:00 p.m. ET, when that exchange runs its closing auction, and Arca initiates its ‘‘Closing Auction Imbalance Freeze’’ for all MOC and LOC Orders at 3:59 p.m. ET. The Exchange therefore believes that there is ample precedent in the industry for continuing to accept these orders until 3:58 p.m. ET, as proposed. Furthermore, the Exchange believes that it is appropriate to clarify in its rules that a Closing Cross/Extended Hours Order will be rejected if it has been assigned a Pegging Attribute (i.e., regardless of the time the Order is entered). Although the current rule references Closing Cross/Extended Hours Order entered between 3:50 p.m. ET and the time of the Nasdaq Closing Cross, Pegging Attributes are available during Market Hours only, and therefore Closing Cross/Extended Hours Orders are rejected if entered with a Pegging Imbalances, until such time as MOC/LOC Orders are locked in at the Closing Cross Cutoff. PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 45167 Attribute at other times as well. Thus, the Exchange believes the proposed change will increase transparency around the operation of the Exchange. Order Imbalance Indicator The Exchange also believes that it is appropriate to continue to disseminate the Order Imbalance Indicator starting at the Closing Cross Cutoff. As explained in the purpose section of this proposed rule change, the Exchange has always disseminated the Order Imbalance Indicator beginning at the Closing Cross Cutoff, which is when the Exchange believes it is possible to disseminate meaningful information about the Nasdaq Closing Cross. Prior to this time, Participants are generally free to submit additional on close interest and/or cancel or modify on close interest already submitted. Furthermore, many Participants may wait until immediately prior to the Closing Cross Cutoff to enter their on close interest. Thus, the Exchange believes that any information disseminated before the Closing Cross Cutoff has the potential to be misleading to some market participants. As a result, the Exchange believes that it is consistent with the protection of investors and the public interest to continue to disseminate this information at the Closing Cross Cutoff, which will be moved to 3:55 p.m. ET, as proposed. Finally, the Exchange believes that market participants will benefit from a more frequent dissemination of the Order Imbalance Indicator for the Nasdaq Closing Cross, LULD Closing Cross, Nasdaq Opening Cross, and Nasdaq Halt Cross. While the Exchange initially chose to disseminate this information once every five seconds, the Exchange believes that the increased automation and efficiency in the equities markets that spurred the changed cutoff times described above also justify increasing the frequency for disseminating information to the market. Arca similarly updates Auction Imbalance Information at least every second, unless there is no change to the information.29 The Exchange believes that an increased frequency of data dissemination for each of the auctions described above will be helpful to Participants that will benefit from a more timely view of the market. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on intermarket or intramarket competition not necessary 29 See E:\FR\FM\05SEN1.SGM Arca Rule 7.35–E(a)(4)(A). 05SEN1 45168 Federal Register / Vol. 83, No. 172 / Wednesday, September 5, 2018 / Notices or appropriate in furtherance of the purposes of the Act. Rather, the Exchange believes that the proposed rule change is evidence of the competitive forces in the equities markets. The Exchange originally launched the Nasdaq Closing Cross in 2004 with a ten minute cutoff period where Participants would no longer have the ability to enter additional MOC/LOC Orders, and would have limited ability to interact with their already entered orders. While the Exchange launched functionality last year to accept LOC Orders up to five minutes before the execution of the Nasdaq Closing Cross, these orders are subject to conditions that may not appeal to all market participants. Meanwhile, exchanges that have launched closing auctions more recently have typically adopted them with shorter cutoff periods. The Exchange believes that the market participants that trade in the Nasdaq Closing Cross, which determines the Nasdaq Official Closing Price for all Nasdaq listed stocks, would similarly benefit from a shorter cutoff period. The proposed cutoff times would apply equally to all Participants and reflects the current market environment where trading is increasingly more automated and efficient, and where competing exchanges already offer later cutoff times than those currently in place on Nasdaq. The Exchange believes that the proposed changes to the Order Imbalance Indicator similarly reflect the current competitive environment as the Exchange’s changes are designed to continue to provide complete and timely information to the market, to the benefit of Participants that trade on Nasdaq. The proposed changes to the Order Imbalance Indicator, like the changes being made to the cutoff times, will apply equally to all Participants. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. daltland on DSKBBV9HB2PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: VerDate Sep<11>2014 17:04 Sep 04, 2018 Jkt 244001 (A) By order approve or disapprove such proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.30 Eduardo A. Aleman, Assistant Secretary. 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: [FR Doc. 2018–19148 Filed 9–4–18; 8:45 am] 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–2018–068 on the subject line. Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Listing and Trading of Shares of the American Century Diversified Municipal Bond ETF Under NYSE Arca Rule 8.600–E Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–NASDAQ–2018–068. 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 website (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 website 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. Persons submitting comments are cautioned that we do not redact or edit personal identifying information from comment submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NASDAQ–2018–068 and should be submitted on or before September 26, 2018. August 29, 2018. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–83982; File No. SR– NYSEArca–2018–62] 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 August 17, 2018, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 list and trade shares of the American Century Diversified Municipal Bond ETF under NYSE Arca Rule 8.600–E (‘‘Managed Fund Shares’’). The proposed rule change is available on the Exchange’s website 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 30 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 E:\FR\FM\05SEN1.SGM 05SEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 83, Number 172 (Wednesday, September 5, 2018)]
[Notices]
[Pages 45165-45168]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-19148]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83988; File No. SR-NASDAQ-2018-068]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing of Proposed Rule Change To Extend the Cutoff Times for 
Accepting On Close Orders Entered for Participation in the Nasdaq 
Closing Cross

August 29, 2018.
    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 August 15, 2018, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the cutoff times for accepting on 
close orders entered for participation in the Nasdaq Closing Cross, and 
make related changes.
    The text of the proposed rule change is available on the Exchange's 
website at https://nasdaq.cchwallstreet.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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to extend the cutoff 
times for accepting on close orders entered for participation in the 
Nasdaq Closing Cross. The Nasdaq Closing Cross provides a transparent 
auction process that determines a single price for the close. As the 
equities markets continue to evolve and become more efficient and 
automated, the Exchange believes that the current cutoff times are 
overly restrictive to market participants that wish to participate in 
the Nasdaq Closing Cross and that typically have to tie up on close 
interest for ten minutes or more at the end of the trading day to 
participate in the cross. Similar to cutoffs provided by other equities 
exchanges that operate a closing auction, the Exchange believes that 
the proposed cutoff times would give Participants greater control over 
their on close orders while still leaving enough time at the end of the 
trading day for Participants to react to and offset Imbalances. Last, 
the Exchange is proposing to begin disseminating the Order Imbalance 
Indicator at the new Closing Cross Cutoff.
Current Cutoff Times
    Generally, Market On Close (``MOC'') \3\ and Limit on Close 
(``LOC'') \4\ Orders are accepted today until immediately prior to 3:50 
p.m. ET (``Closing Cross Cutoff'') \5\ when the Exchange begins 
disseminating an Order Imbalance Indicator \6\ that contains 
information about the Nasdaq Closing Cross. Imbalance Only (``IO'') 
Orders, on the other hand, are designed to allow Participants to offset 
Imbalances, and may therefore be entered until the time of execution of 
the Nasdaq Closing Cross, but may not be cancelled or modified at or 
after the Closing Cross Cutoff, except to correct legitimate errors as 
described below.\7\
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    \3\ A MOC Order is an Order Type entered without a price that 
may be executed only during the Nasdaq Closing Cross. See Rule 
4702(b)(11).
    \4\ A LOC Order is an Order Type entered with a price that may 
be executed only in the Nasdaq Closing Cross, and only if the price 
determined by the Nasdaq Closing Cross is equal to or better than 
the price at which the LOC Order was entered. See Rule 4702(b)(12).
    \5\ As used in this proposed rule change, the term ``Closing 
Cross Cutoff'' refers to the various 3:50 p.m. ET cutoff times 
described herein for the Nasdaq Closing Cross, including the regular 
cutoff time for entering MOC/LOC Orders described above and the 
related cutoff time for cancelling or modifying IO Orders, which is 
currently at or after 3:50 p.m. ET in contrast to MOC/LOC Orders 
whose cutoff times are immediately prior to 3:50 p.m. ET.
    \6\ ``Order Imbalance Indicator'' means a message disseminated 
by electronic means containing information about MOC, LOC, IO, and 
Close Eligible Interest and the price at which those orders would 
execute at the time of dissemination.
    \7\ See Rule 4702(b)(13)(A).
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    The Exchange also continues to accept LOC Orders between the 
Closing Cross Cutoff and immediately prior to 3:55 p.m. ET (``Late 
Cutoff'') \8\ provided that there is a First Reference Price.\9\ In 
order to promote price stability in the Nasdaq Closing Cross, such LOC 
Orders entered during this period are either canceled or re-priced to 
the First Reference Price, based on the Participant's instruction, if 
the LOC Order's limit price is more aggressive than the First Reference 
Price.\10\ Imbalance Only (``IO'') Orders,\11\ meanwhile, are designed 
to permit Participants to offset Imbalances and therefore may be 
entered until 4:00 p.m. ET when the Exchange executes the Nasdaq 
Closing Cross and disseminates the executions via the consolidated 
tape.\12\
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    \8\ As used in this proposed rule change, the term ``Late 
Cutoff'' refers to the various 3:55 p.m. ET cutoff times described 
herein for the Nasdaq Closing Cross, including the cutoff time for 
entering the LOC Orders described above and the cutoff time for 
correcting legitimate errors in an on close order.
    \9\ ``First Reference Price'' shall mean the Current Reference 
Price in the first Order Imbalance Indicator disseminated at or 
after 3:50 p.m. ET. See Rule 4754(a)(9).
    \10\ See Rule 4702(b)(12)(A).
    \11\ An IO Order is an Order entered with a price that may be 
executed only in the Nasdaq Closing Cross and only against MOC 
Orders or LOC Orders. See Rule 4702(b)(13).
    \12\ See Rule 4702(b)(13)(A).
---------------------------------------------------------------------------

    Participants may also be able to cancel and/or modify their on 
close orders between the Closing Cross Cutoff and immediately prior to 
the Late Cutoff in limited circumstances. Specifically, during this 
time period: (1) MOC Orders and IO Orders can be cancelled and/or 
modified,\13\ and (2) LOC Orders can be cancelled but not modified,\14\ 
in each case to correct a legitimate error in the order (e.g., Side, 
Size, Symbol, or Price, or duplication of an Order).
---------------------------------------------------------------------------

    \13\ See Rule 4702(b)(11)(A), (13)(A). As provided in these 
rules, MOC and IO Orders cannot be cancelled or modified at or after 
the Late Cutoff for any reason.
    \14\ See Rule 4702(b)(12)(A).
---------------------------------------------------------------------------

Proposed Cutoff Times
    The Exchange now proposes to change the Closing Cross Cutoff to 
3:55 p.m. ET and the Late Cutoff to 3:58 p.m. ET.\15\ The Exchange 
believes that this

[[Page 45166]]

proposed change will enhance the experience provided to market 
participants who will be able to enter and interact with their on close 
orders later in the trading day.
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    \15\ The Exchange proposes to reflect the proposed cutoff times 
throughout the Nasdaq rulebook, including Rule 4702(b)(11)-(13), 
which defines MOC, LOC, and IO Orders, as well as Rules 4754(a)(9), 
(b)(1) and (b)(7)(B), which describe the Nasdaq Closing Cross. With 
the changed cutoff times, the Exchange will reject MOC Orders 
entered after the 3:55 p.m. ET cutoff, as described in proposed Rule 
4702(b)(11)(B), and will reject LOC Orders and Closing Cross/
Extended Hours Orders entered at or after 3:58 p.m. ET, as described 
in proposed Rule 4702(b)(12)(B).
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    The Nasdaq Closing Cross was established by the Exchange in 2004 to 
create a more robust close that would allow for price discovery, and an 
execution that would result in an accurate, tradable closing price.\16\ 
While the Exchange has made changes to the Nasdaq Closing Cross in the 
fourteen years since it was established, including by recently 
permitting LOC Orders to be entered until the Late Cutoff in certain 
circumstances, the normal Closing Cross Cutoff has remained at 3:50 
p.m. ET. At the same time, the equities markets have become more 
efficient and automated. The Exchange therefore no longer believes that 
ten minutes is needed for market participants to react to and resolve 
Imbalances in the Nasdaq Closing Cross. As a result, the Exchange is 
proposing to extend the Closing Cross Cutoff time to 3:55 p.m. ET, 
which is consistent with the cutoff time provided in the CBOE BZX 
Exchange, Inc. (``BZX'') closing auction.\17\ While other exchanges 
operate closing auctions with various cutoff times as late as 3:59 p.m. 
ET,\18\ the Exchange believes that a 3:55 p.m. ET Closing Cross Cutoff 
strikes the appropriate balance for the Nasdaq Closing Cross in today's 
trading environment.
---------------------------------------------------------------------------

    \16\ See Securities Exchange Act Release Nos. 48878 (December 4, 
2003), 68 FR 69098 (December 11, 2003) (Notice); 49406 (March 11, 
2004), 69 FR 12879 (March 18, 2004) (Approval Order) (SR-NASD-2003-
173).
    \17\ See BZX Rule 11.23(c)(1)(A).
    \18\ See infra note 20.
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    The Exchange also continues to believe that it is beneficial to 
price discovery to permit Participants to submit LOC Orders after the 
regular Closing Cross Cutoff if there is a First Reference Price as 
provided in SR-Nasdaq-2017-061. Likewise, the Exchange continues to 
believe that it is appropriate to provide a brief period of additional 
time for Participants to correct legitimate errors in their orders 
entered for participation in the Nasdaq Closing Cross. The Exchange 
therefore proposes to extend the Late Cutoff to 3:58 p.m. ET. Other 
exchanges also accept similar orders in this timeframe. For example, 
BZX offers ``Late-Limit-On-Close Orders'' that are accepted until the 
execution of their closing auction at 4:00 p.m. ET,\19\ and NYSE Arca, 
Inc. (``Arca'') initiates its ``Closing Auction Imbalance Freeze'' for 
all MOC and LOC Orders at 3:59 p.m. ET.\20\ LOC Orders submitted after 
the proposed Closing Cross Cutoff and before the proposed Late Cutoff 
will continue to be handled as they are today, and would therefore only 
be accepted if there is a First Reference Price, and would be subject 
to re-pricing if the limit price of the LOC Order is more aggressive 
than the First Reference Price or rejection, depending on the election 
of the member. Furthermore, the cancellation and/or modification of 
orders during the extended period would continue to be allowed only to 
correct a legitimate error in the order.
---------------------------------------------------------------------------

    \19\ See BZX Rule 11.23(c)(1)(A).
    \20\ See Arca Rule 7.35-E(d)(2).
---------------------------------------------------------------------------

    In addition, Rule 4702(b)(12)(A) currently provides that a Closing 
Cross/Extended Hours Order that is entered between 3:50 p.m. ET and the 
time of the Nasdaq Closing Cross will be rejected if it has been 
assigned a Pegging Attribute. Pegging is an Order Attribute that allows 
an Order to have its price automatically set with reference to the 
national best bid or offer (``NBBO''), and is therefore available only 
during Market Hours.\21\ Since a Pegging Attribute is only available 
during Market Hours, an Order with a Pegging Attribute can never be 
entered as a Closing Cross/Extended Hours Order, which would be valid 
only after Market Hours had concluded. The Exchange proposes to make 
this clear in Rule 4702(b)(12)(B) by removing the current reference to 
the time during which such an Order is entered. As proposed, the rule 
would provide that a Closing Cross/Extended Hours Order will be 
rejected if it has been assigned a Pegging Attribute.
---------------------------------------------------------------------------

    \21\ See Rule 4703(d).
---------------------------------------------------------------------------

Order Imbalance Indicator
    Once MOC/LOC Orders are locked in at the Closing Cross Cutoff, the 
Exchange begins disseminating the Order Imbalance Indicator to provide 
market participants with information about the Nasdaq Closing Cross. 
With the proposed changes to the Closing Cross Cutoff, the Exchange is 
proposing to also begin disseminating the Order Imbalance Indicator at 
the new Closing Cross Cutoff of 3:55 p.m. ET.\22\ The Exchange has 
always disseminated the Order Imbalance Indicator once MOC/LOC Orders 
are locked in at the Closing Cross Cutoff. Prior to the Closing Cross 
Cutoff, Participants have significantly more leeway to enter new on 
close orders or cancel or modify on close orders already entered. The 
Exchange therefore believes that continuing to disseminate the Order 
Imbalance Indicator starting at the Closing Cross Cutoff, which as 
proposed will be 3:55 p.m. ET, will ensure that market participants 
receive a more complete picture of on close interest when such interest 
is relatively settled.
---------------------------------------------------------------------------

    \22\ Because the First Reference Price refers to the Current 
Reference Price in the first Order Imbalance Indicator disseminated 
to market participants, Rule 4754(a)(9) will similarly be updated to 
reference 3:55 p.m. ET, which is when the first Order Imbalance 
Indicator will now be disseminated.
---------------------------------------------------------------------------

    Currently, the Order Imbalance Indicator is disseminated every five 
seconds starting at the Closing Cross Cutoff discussed above. The 
Exchange believes, however, that more frequent dissemination will be 
beneficial to market participants that use this information, and is 
therefore proposing to increase the frequency of dissemination to every 
second. This proposed change will apply to the Order Imbalance 
Indicator for the Nasdaq Closing Cross as well as the similar Order 
Imbalance Indicator provided for the LULD Closing Cross,\23\ Nasdaq 
Opening Cross,\24\ and the Nasdaq Halt Cross,\25\ which each have a 
five second dissemination frequency today.
---------------------------------------------------------------------------

    \23\ See Rule 4754(b)(6).
    \24\ See Rule 4752(d)(1).
    \25\ See Rule 4753(b)(1).
---------------------------------------------------------------------------

Conforming Changes
    Last, the Exchange is proposing to make conforming changes to Rule 
7018(a), which provides the fees and credits available to members for 
the use of the order execution and routing services of the Nasdaq 
Market Center for all securities priced at $1 or more that it trades. 
Under Rules 7018(a)(1) and (2), Nasdaq has credits that exclude Limit-
on-Close Order entered between 3:50 p.m. ET and immediately prior to 
3:55 p.m. ET. The Exchange is proposing to update these times to 
reflect the times proposed herein.
Implementation
    The Exchange proposes to implement all of the changes described in 
this proposed rule change in either Q3 or Q4 2018. The Exchange will 
announce the implementation date of these changes in an Equity Trader 
Alert issued to Participants prior to implementing the change.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b)

[[Page 45167]]

of the Act,\26\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\27\ 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, the Exchange believes that extending the cutoff 
times for submitting on close orders will allow market participants to 
retain control over their orders for a longer period of time, and 
thereby assist those market participants in managing their trading at 
the close. Furthermore, the Exchange believes that the proposed changes 
to the Order Imbalance Indicator will protect investors and the public 
interest by continuing to provide complete and timely information to 
the market.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

Cutoff Times
    While the Exchange originally implemented a Closing Cross Cutoff 
time in 2004 that was ten minutes prior to the execution of the Nasdaq 
Closing Cross, the Exchange no longer believes that this much time is 
required for market participants to respond to and offset Imbalances. 
To promote price discovery in the Nasdaq Closing Cross, the Exchange 
disseminates an Order Imbalance Indicator with certain information 
about the cross to market participants beginning at 3:50 p.m. ET, at 
which time market participants have more limited means of entering 
orders to participate in the Nasdaq Closing Cross. Specifically, 
Participants cannot enter new MOC Orders on or after 3:50 p.m. ET, and 
between 3:50 p.m. ET and immediately prior to 3:55 p.m. ET are limited 
to entering LOC Orders that are subject to being rejected or re-priced 
if too aggressive based on the First Reference Price disseminated at 
that time (or rejected if there is no First Reference Price). 
Otherwise, the ability to update MOC or LOC Orders is limited to 
correcting legitimate errors. The Exchange believes that market 
participants would be better served if the Closing Cross Cutoff was 
extended to 3:55 p.m. ET so that the period of time where they have 
limited control over their orders is reduced.\28\ The Exchange believes 
that this will reduce risk for market participants that participate in 
the Nasdaq Closing Cross, and improve price discovery by facilitating 
additional participation by market participants that may not be willing 
to lose control over their on close interest for ten minutes. Another 
equities exchange, BZX, already uses a 3:55 p.m. ET cutoff for regular 
MOC/LOC entry in its closing auction, and the Exchange believes that 
this cutoff time reflects the efficiency and more automated nature of 
trading in today's market.
---------------------------------------------------------------------------

    \28\ The ``Closing Cross Cutoff'' refers to various 3:50 p.m. ET 
cutoff times for the Nasdaq Closing Cross. As such, this change will 
impact functionality that is tied to the regular cutoff time for 
entering MOC/LOC Orders, such as the cutoff time for cancelling or 
modifying IO Orders. See supra note 5. The Exchange believes that 
Participants should continue to be able to cancel or modify their IO 
Orders, which are designed to offset Imbalances, until such time as 
MOC/LOC Orders are locked in at the Closing Cross Cutoff.
---------------------------------------------------------------------------

    In addition, the Exchange continues to believe that it is 
appropriate to offer a later cutoff time for certain LOC Orders, as 
well as for the correction of legitimate errors. The Exchange launched 
the functionality described in SR-Nasdaq-2017-061 last year, and 
believes that it provides a helpful means for promoting price discovery 
in the Nasdaq Closing Cross. Since the Exchange is extending the 
Closing Cross Cutoff to the time that these LOC Orders are accepted 
until today, the Exchange is proposing to extend the Late Cutoff as 
well. The Exchange believes that the market will continue to benefit 
from permitting LOC Orders to be submitted until 3:58 p.m. ET, subject 
to the conditions described in the current rule with respect to 
rejection or re-pricing and orders being accepted only when there is 
matched buy and sell interest that is eligible to participate in the 
Nasdaq Closing Cross, as evidenced by a First Reference Price being 
disseminated to market participants. BZX, which offers a similar 
``Late-Limit-On-Close Order'' accepts those orders until 4:00 p.m. ET, 
when that exchange runs its closing auction, and Arca initiates its 
``Closing Auction Imbalance Freeze'' for all MOC and LOC Orders at 3:59 
p.m. ET. The Exchange therefore believes that there is ample precedent 
in the industry for continuing to accept these orders until 3:58 p.m. 
ET, as proposed.
    Furthermore, the Exchange believes that it is appropriate to 
clarify in its rules that a Closing Cross/Extended Hours Order will be 
rejected if it has been assigned a Pegging Attribute (i.e., regardless 
of the time the Order is entered). Although the current rule references 
Closing Cross/Extended Hours Order entered between 3:50 p.m. ET and the 
time of the Nasdaq Closing Cross, Pegging Attributes are available 
during Market Hours only, and therefore Closing Cross/Extended Hours 
Orders are rejected if entered with a Pegging Attribute at other times 
as well. Thus, the Exchange believes the proposed change will increase 
transparency around the operation of the Exchange.
Order Imbalance Indicator
    The Exchange also believes that it is appropriate to continue to 
disseminate the Order Imbalance Indicator starting at the Closing Cross 
Cutoff. As explained in the purpose section of this proposed rule 
change, the Exchange has always disseminated the Order Imbalance 
Indicator beginning at the Closing Cross Cutoff, which is when the 
Exchange believes it is possible to disseminate meaningful information 
about the Nasdaq Closing Cross. Prior to this time, Participants are 
generally free to submit additional on close interest and/or cancel or 
modify on close interest already submitted. Furthermore, many 
Participants may wait until immediately prior to the Closing Cross 
Cutoff to enter their on close interest. Thus, the Exchange believes 
that any information disseminated before the Closing Cross Cutoff has 
the potential to be misleading to some market participants. As a 
result, the Exchange believes that it is consistent with the protection 
of investors and the public interest to continue to disseminate this 
information at the Closing Cross Cutoff, which will be moved to 3:55 
p.m. ET, as proposed.
    Finally, the Exchange believes that market participants will 
benefit from a more frequent dissemination of the Order Imbalance 
Indicator for the Nasdaq Closing Cross, LULD Closing Cross, Nasdaq 
Opening Cross, and Nasdaq Halt Cross. While the Exchange initially 
chose to disseminate this information once every five seconds, the 
Exchange believes that the increased automation and efficiency in the 
equities markets that spurred the changed cutoff times described above 
also justify increasing the frequency for disseminating information to 
the market. Arca similarly updates Auction Imbalance Information at 
least every second, unless there is no change to the information.\29\ 
The Exchange believes that an increased frequency of data dissemination 
for each of the auctions described above will be helpful to 
Participants that will benefit from a more timely view of the market.
---------------------------------------------------------------------------

    \29\ See Arca Rule 7.35-E(a)(4)(A).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket or intramarket competition not 
necessary

[[Page 45168]]

or appropriate in furtherance of the purposes of the Act. Rather, the 
Exchange believes that the proposed rule change is evidence of the 
competitive forces in the equities markets. The Exchange originally 
launched the Nasdaq Closing Cross in 2004 with a ten minute cutoff 
period where Participants would no longer have the ability to enter 
additional MOC/LOC Orders, and would have limited ability to interact 
with their already entered orders. While the Exchange launched 
functionality last year to accept LOC Orders up to five minutes before 
the execution of the Nasdaq Closing Cross, these orders are subject to 
conditions that may not appeal to all market participants. Meanwhile, 
exchanges that have launched closing auctions more recently have 
typically adopted them with shorter cutoff periods. The Exchange 
believes that the market participants that trade in the Nasdaq Closing 
Cross, which determines the Nasdaq Official Closing Price for all 
Nasdaq listed stocks, would similarly benefit from a shorter cutoff 
period. The proposed cutoff times would apply equally to all 
Participants and reflects the current market environment where trading 
is increasingly more automated and efficient, and where competing 
exchanges already offer later cutoff times than those currently in 
place on Nasdaq. The Exchange believes that the proposed changes to the 
Order Imbalance Indicator similarly reflect the current competitive 
environment as the Exchange's changes are designed to continue to 
provide complete and timely information to the market, to the benefit 
of Participants that trade on Nasdaq. The proposed changes to the Order 
Imbalance Indicator, like the changes being made to the cutoff times, 
will apply equally to all Participants.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml ); or
     Send an email to [email protected]. Please include 
File Number SR-NASDAQ-2018-068 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2018-068. 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 website (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 website 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. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2018-068 and should be submitted 
on or before September 26, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\30\
---------------------------------------------------------------------------

    \30\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-19148 Filed 9-4-18; 8:45 am]
 BILLING CODE 8011-01-P

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