Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify Rule 4120(c)(9), 47334-47336 [2019-19334]

Download as PDF 47334 Federal Register / Vol. 84, No. 174 / Monday, September 9, 2019 / Notices subject to the SEC rule change process. Further, the Exchange operates in a highly competitive market in which market participants can easily direct their orders to competing venues, including off-exchange venues, if fees are viewed as non-competitive. The Exchange also does not believe that the proposed rule change will impose any burden on intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. While Retail orders and RLP orders will be treated differently, those differences are not based on the type of Member entering orders but on whether the order is for a retail customer or an entity seeking to transact with a retail customer, and there is no restriction on whether a Member can handle retail customer orders. Further, any Member can enter an RLP order. Deletion of Fee Code N The Exchange does not believe that deletion of Fee Code N and related Fee Code combinations will impose any burden on intermarket or intramarket competition that is not necessary or appropriate in furtherance of the purposes of the Act. Deletion of Fee Code N and related Fee Code combinations is not proposed for any competitive reason but to provide clarity to market participants that IEX execution of spread-crossing eligible orders does not impact applicable fees, therefore making the Exchange’s Fee Schedule clearer and more deterministic to the benefit of all market participants. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. jbell on DSK3GLQ082PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) 34 of the Act. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings under Section 19(b)(2)(B) 35 of the Act to determine whether the proposed rule change should be approved or 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 rule-comments@ sec.gov. Please include File Number SR– IEX–2019–08 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–IEX–2019–08. 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 offices 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–IEX–2019–08, and should be submitted on or before September 30, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.36 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–19332 Filed 9–6–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–86857; File No. SR– NASDAQ–2019–066] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify Rule 4120(c)(9) September 3, 2019. 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 21, 2019, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II 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 clarify Rule 4120(c)(9) without changing its substance. The text of the proposed rule change is set forth below. Proposed new language is italicized; deleted text is in brackets. * * * * * The Nasdaq Stock Market Rules * * * U.S.C. 78s(b)(3)(A)(ii). VerDate Sep<11>2014 20:43 Sep 06, 2019 35 15 Jkt 247001 PO 00000 U.S.C. 78s(b)(2)(B). Frm 00102 Fmt 4703 Sfmt 4703 * 4120. Limit Up-Limit Down Plan and Trading Halts (a)–(b) No change. (c) Procedure for Initiating and Terminating a Trading Halt (1)–(8) No change. (9) For purposes of this Rule and Rule 4753, the process for halting and initial pricing of a security that is the subject of an initial public offering shall also be available for the initial pricing of any other security that has not been listed 36 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 34 15 * E:\FR\FM\09SEN1.SGM 09SEN1 Federal Register / Vol. 84, No. 174 / Monday, September 9, 2019 / Notices on a national securities exchange or traded in the over-the-counter market pursuant to FINRA Form 211 immediately prior to the initial pricing, provided that a broker-dealer serving in the role of financial advisor to the issuer of the securities being listed is willing to perform the functions under Rule 4120(c)(8) that are performed by an underwriter with respect to an initial public offering. If more than one brokerdealer is serving in the role of financial advisor, the issuer must designate one to perform the functions under Rule 4120(c)(8). (10) No change. * * * * * 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 jbell on DSK3GLQ082PROD with NOTICES 1. Purpose Nasdaq proposes to amend Rule 4120(c)(9) to clarify that, if more than one broker-dealer is serving in the role of financial advisor to the issuer, in order to use the Nasdaq IPO Cross, as defined below, to initiate trading in securities that have not been listed on a national securities exchange or traded in the over-the-counter market pursuant to FINRA Form 211 immediately prior to the initial pricing, the issuer must designate one financial advisor to perform the functions under Rule 4120(c)(8).3 In 2014, Nasdaq first adopted rules to allow the use of the Nasdaq IPO Cross 3 On July 18, 2019, Nasdaq submitted a proposed rule change to amend 4120(c)(9). The effect of that rule change, if approved by the Commission, will be to make certain additional companies eligible to use the IPO Cross. See Securities Exchange Act Release No. 86537 (July 31, 2019), 84 FR 38321 (August 6, 2019) (SR–NASDAQ–2019–060). VerDate Sep<11>2014 20:43 Sep 06, 2019 Jkt 247001 to initiate trading in securities that have not been listed on a national securities exchange or traded in the over-thecounter market pursuant to FINRA Form 211 immediately prior to the initial pricing and described the role of financial advisors in that process.4 At that time, the Exchange added new Rule 4120(c)(9) 5 to set forth the process by which trading commences in such securities. Under that rule, securities of companies that have not previously been listed on a national securities exchange or traded in the over-thecounter market pursuant to FINRA Form 211 immediately prior to listing on Nasdaq can be launched for trading using the same crossing mechanism available for IPOs outlined in Rule 4120(c)(8) and Rule 4753 (the ‘‘IPO Cross’’). Prior to that rule change, securities of companies that were not conducting IPOs were released using the Halt Cross outlined in Rule 4120(c)(7), which differed from the IPO Cross.6 The 2014 Rule Change extended the safeguards contained in the IPO Cross to securities that have not been listed on a national securities exchange or traded in the over-the-counter market pursuant to FINRA Form 211 immediately prior to the initial pricing and established that a broker-dealer serving in the role of financial advisor to the issuer could serve in the same capacity for such securities as the underwriter does for IPOs. Specifically, Rule 4120(c)(9) provides that the IPO Cross process described in Rules 4120 and 4753 is available to securities that have not been listed on a national securities exchange or traded in the over-the-counter market pursuant to FINRA Form 211 immediately prior to the initial pricing where ‘‘a broker-dealer serving in the role of financial advisor to the issuer of the securities being listed is willing to perform the functions under Rule 4120(c)(8) that are performed by an 4 Securities Exchange Act Release No. 71931 (April 11, 2014), 79 FR 21829 (April 17, 2014) (SR– NASDAQ–2014–032) (the ‘‘2014 Rule Change’’). 5 In 2014, Nasdaq filed SR–NASDAQ–2014–081 modifying the functions that are performed by an underwriter with respect to an initial public offering and renumbered certain paragraphs of Rule 4120. Securities Exchange Act Release No. 73399 (October 21, 2014), 79 FR 63981 (October 27, 2014) (approving SR–NASDAQ–2014–081). All references in this filing are to the renumbered rules, as currently in effect. 6 The Halt Cross process has a shorter quoting period (five minutes) and provides no ability to extend the quoting period in the event trading interest or volatility in the market appears likely to have a material impact on the security, unless there is an order imbalance as defined in the rule. See the 2014 Rule Change for additional details on the differences between the Halt Cross and the IPO Cross. PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 47335 underwriter with respect to an initial public offering.’’ 7 Rule 4120(c)(8) implies that only one underwriter performs the functions the rule describes. Typically, such functions are performed by the lead underwriter, which is referred to as ‘‘the’’ underwriter in the rule. Similarly, Nasdaq proposes to clarify that, if more than one broker-dealer is serving in the role of financial advisor to the issuer, in order to use the Nasdaq IPO Cross to initiate trading in securities that have not been listed on a national securities exchange or traded in the over-the-counter market pursuant to FINRA Form 211 immediately prior to the initial pricing, the issuer must designate one financial advisor to perform the functions under Rule 4120(c)(8). 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,8 in general, and furthers the objectives of Section 6(b)(5) of the Act,9 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. Nasdaq believes that additional clarity that the issuer must designate one financial advisor to perform the functions under Rule 4120(c)(8) will promote fair and orderly markets by eliminating potential confusion and by continuing to protect against volatility in the pricing and initial trading of the unseasoned securities covered by the proposed rule change. 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 competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed change is designed to more clearly describe the current operation of an existing rule without changing its substance and, therefore, Nasdaq believes that the proposed change will not impose a burden on competition. 7 Subsequent to the 2014 Rule Change Nasdaq expanded and elaborated the functions that are performed by an underwriter with respect to an initial public offering. See footnote 6, above. Rule 4120(c)(9) requires a broker-dealer serving in the role of a financial advisor to the issuer of the securities being listed to perform all such functions in order for the issuer to utilize the IPO Cross for the initial pricing of the security. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). E:\FR\FM\09SEN1.SGM 09SEN1 47336 Federal Register / Vol. 84, No. 174 / Monday, September 9, 2019 / Notices 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 Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6) thereunder.11 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or 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 rule-comments@ sec.gov. Please include File Number SR– NASDAQ–2019–066 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–2019–066. This jbell on DSK3GLQ082PROD with NOTICES 10 15 U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires a self-regulatory organization to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. VerDate Sep<11>2014 20:43 Sep 06, 2019 Jkt 247001 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 20549–1090 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–2019–066 and should be submitted on or before September 30, 2019. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Jill M. Peterson, Assistant Secretary. [FR Doc. 2019–19334 Filed 9–6–19; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Proposed Collection; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of FOIA Services, 100 F Street NE, Washington, DC 20549–2736. Extension: Rule 6a–4, Form 1–N, SEC File No. 270– 496, OMB Control No. 3235–0554 Notice is hereby given that pursuant to the Paperwork Reduction Act of 1995 (‘‘PRA’’) (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) is soliciting comments on the collection of information provided for in Rule 6a–4 and Form 1– N (17 CFR 240.6a–4 and 17 CFR 249.10) under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) (‘‘Exchange Act’’). The Commission plans to submit this existing collection of information to the Office of Management and Budget (‘‘OMB’’) for extension and approval. Section 6 of the Exchange Act 1 sets out a framework for the registration and regulation of national securities exchanges. Under the Commodity Futures Modernization Act of 2000, a futures market may trade security futures products by registering as a national securities exchange. Rule 6a– 4 2 sets forth these registration procedures and directs futures markets to submit a notice registration on Form 1–N.3 Form 1–N calls for information regarding how the futures market operates, its rules and procedures, corporate governance, its criteria for membership, its subsidiaries and affiliates, and the security futures products it intends to trade. Rule 6a–4 also requires entities that have submitted an initial Form 1–N to file: (1) Amendments to Form 1–N in the event of material changes to the information provided in the initial Form 1–N; (2) periodic updates of certain information provided in the initial Form 1–N; (3) certain information that is provided to the futures market’s members; and (4) a monthly report summarizing the futures market’s trading of security futures products. The information required to be filed with the Commission pursuant to Rule 6a–4 is designed to enable the Commission to carry out its statutorily mandated oversight functions and to ensure that registered and exempt exchanges continue to be in compliance with the Act. The respondents to the collection of information are futures markets. The Commission estimates that the total annual burden of compliance with the requirements of Rule 6a–4 and Form 1–N is 171 hours per year and $1,216 per year, calculated as detailed below. The Commission estimates that the total annual burden for all respondents to provide periodic amendments to keep the Form 1–N accurate and up to date as required under Rule 6a–4(b)(1) would be 60 hours (15 hours/respondent per year × 4 respondents) and $400 of miscellaneous clerical expenses. The Commission estimates that the total annual burden for all respondents to provide annual amendments under Rule 1 15 U.S.C. 78f. CFR 240.6a–4. 3 17 CFR 249.10. 2 17 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00104 Fmt 4703 Sfmt 4703 E:\FR\FM\09SEN1.SGM 09SEN1

Agencies

[Federal Register Volume 84, Number 174 (Monday, September 9, 2019)]
[Notices]
[Pages 47334-47336]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-19334]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-86857; File No. SR-NASDAQ-2019-066]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Clarify Rule 4120(c)(9)

September 3, 2019.
    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 21, 2019, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to clarify Rule 4120(c)(9) without changing 
its substance.
    The text of the proposed rule change is set forth below. Proposed 
new language is italicized; deleted text is in brackets.
* * * * *

The Nasdaq Stock Market Rules

* * * * *

4120. Limit Up-Limit Down Plan and Trading Halts

    (a)-(b) No change.
    (c) Procedure for Initiating and Terminating a Trading Halt
    (1)-(8) No change.
    (9) For purposes of this Rule and Rule 4753, the process for 
halting and initial pricing of a security that is the subject of an 
initial public offering shall also be available for the initial pricing 
of any other security that has not been listed

[[Page 47335]]

on a national securities exchange or traded in the over-the-counter 
market pursuant to FINRA Form 211 immediately prior to the initial 
pricing, provided that a broker-dealer serving in the role of financial 
advisor to the issuer of the securities being listed is willing to 
perform the functions under Rule 4120(c)(8) that are performed by an 
underwriter with respect to an initial public offering. If more than 
one broker-dealer is serving in the role of financial advisor, the 
issuer must designate one to perform the functions under Rule 
4120(c)(8).
    (10) No change.
* * * * *
    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
    Nasdaq proposes to amend Rule 4120(c)(9) to clarify that, if more 
than one broker-dealer is serving in the role of financial advisor to 
the issuer, in order to use the Nasdaq IPO Cross, as defined below, to 
initiate trading in securities that have not been listed on a national 
securities exchange or traded in the over-the-counter market pursuant 
to FINRA Form 211 immediately prior to the initial pricing, the issuer 
must designate one financial advisor to perform the functions under 
Rule 4120(c)(8).\3\
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    \3\ On July 18, 2019, Nasdaq submitted a proposed rule change to 
amend 4120(c)(9). The effect of that rule change, if approved by the 
Commission, will be to make certain additional companies eligible to 
use the IPO Cross. See Securities Exchange Act Release No. 86537 
(July 31, 2019), 84 FR 38321 (August 6, 2019) (SR-NASDAQ-2019-060).
---------------------------------------------------------------------------

    In 2014, Nasdaq first adopted rules to allow the use of the Nasdaq 
IPO Cross to initiate trading in securities that have not been listed 
on a national securities exchange or traded in the over-the-counter 
market pursuant to FINRA Form 211 immediately prior to the initial 
pricing and described the role of financial advisors in that 
process.\4\ At that time, the Exchange added new Rule 4120(c)(9) \5\ to 
set forth the process by which trading commences in such securities. 
Under that rule, securities of companies that have not previously been 
listed on a national securities exchange or traded in the over-the-
counter market pursuant to FINRA Form 211 immediately prior to listing 
on Nasdaq can be launched for trading using the same crossing mechanism 
available for IPOs outlined in Rule 4120(c)(8) and Rule 4753 (the ``IPO 
Cross''). Prior to that rule change, securities of companies that were 
not conducting IPOs were released using the Halt Cross outlined in Rule 
4120(c)(7), which differed from the IPO Cross.\6\
---------------------------------------------------------------------------

    \4\ Securities Exchange Act Release No. 71931 (April 11, 2014), 
79 FR 21829 (April 17, 2014) (SR-NASDAQ-2014-032) (the ``2014 Rule 
Change'').
    \5\ In 2014, Nasdaq filed SR-NASDAQ-2014-081 modifying the 
functions that are performed by an underwriter with respect to an 
initial public offering and renumbered certain paragraphs of Rule 
4120. Securities Exchange Act Release No. 73399 (October 21, 2014), 
79 FR 63981 (October 27, 2014) (approving SR-NASDAQ-2014-081). All 
references in this filing are to the renumbered rules, as currently 
in effect.
    \6\ The Halt Cross process has a shorter quoting period (five 
minutes) and provides no ability to extend the quoting period in the 
event trading interest or volatility in the market appears likely to 
have a material impact on the security, unless there is an order 
imbalance as defined in the rule. See the 2014 Rule Change for 
additional details on the differences between the Halt Cross and the 
IPO Cross.
---------------------------------------------------------------------------

    The 2014 Rule Change extended the safeguards contained in the IPO 
Cross to securities that have not been listed on a national securities 
exchange or traded in the over-the-counter market pursuant to FINRA 
Form 211 immediately prior to the initial pricing and established that 
a broker-dealer serving in the role of financial advisor to the issuer 
could serve in the same capacity for such securities as the underwriter 
does for IPOs. Specifically, Rule 4120(c)(9) provides that the IPO 
Cross process described in Rules 4120 and 4753 is available to 
securities that have not been listed on a national securities exchange 
or traded in the over-the-counter market pursuant to FINRA Form 211 
immediately prior to the initial pricing where ``a broker-dealer 
serving in the role of financial advisor to the issuer of the 
securities being listed is willing to perform the functions under Rule 
4120(c)(8) that are performed by an underwriter with respect to an 
initial public offering.'' \7\
---------------------------------------------------------------------------

    \7\ Subsequent to the 2014 Rule Change Nasdaq expanded and 
elaborated the functions that are performed by an underwriter with 
respect to an initial public offering. See footnote 6, above. Rule 
4120(c)(9) requires a broker-dealer serving in the role of a 
financial advisor to the issuer of the securities being listed to 
perform all such functions in order for the issuer to utilize the 
IPO Cross for the initial pricing of the security.
---------------------------------------------------------------------------

    Rule 4120(c)(8) implies that only one underwriter performs the 
functions the rule describes. Typically, such functions are performed 
by the lead underwriter, which is referred to as ``the'' underwriter in 
the rule.
    Similarly, Nasdaq proposes to clarify that, if more than one 
broker-dealer is serving in the role of financial advisor to the 
issuer, in order to use the Nasdaq IPO Cross to initiate trading in 
securities that have not been listed on a national securities exchange 
or traded in the over-the-counter market pursuant to FINRA Form 211 
immediately prior to the initial pricing, the issuer must designate one 
financial advisor to perform the functions under Rule 4120(c)(8).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ 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.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Nasdaq believes that additional clarity that the issuer must 
designate one financial advisor to perform the functions under Rule 
4120(c)(8) will promote fair and orderly markets by eliminating 
potential confusion and by continuing to protect against volatility in 
the pricing and initial trading of the unseasoned securities covered by 
the proposed rule change.

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 competition not necessary or appropriate in 
furtherance of the purposes of the Act. The proposed change is designed 
to more clearly describe the current operation of an existing rule 
without changing its substance and, therefore, Nasdaq believes that the 
proposed change will not impose a burden on competition.

[[Page 47336]]

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
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-2019-066 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-2019-066. 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 
20549-1090 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-2019-066 and should 
be submitted on or before September 30, 2019.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-19334 Filed 9-6-19; 8:45 am]
BILLING CODE 8011-01-P
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