Justia Agencies And Commissions Securities And Exchange Commission Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Approving Proposed Rule Change, as Modified by Amendment No. 2, To Disseminate Abbreviated Order Imbalance Information for the Nasdaq Opening Cross, Amend Certain Cutoff Times for On-Open Orders Entered for Participation in the Nasdaq Opening Cross, and Extend the Time Period for Accepting Certain Limit-On-Open Orders, 18330-18333 [2021-07197]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Approving Proposed Rule Change, as Modified by Amendment No. 2, To Disseminate Abbreviated Order Imbalance Information for the Nasdaq Opening Cross, Amend Certain Cutoff Times for On-Open Orders Entered for Participation in the Nasdaq Opening Cross, and Extend the Time Period for Accepting Certain Limit-On-Open Orders, 18330-18333 [2021-07197]

Download as PDF 18330 Federal Register / Vol. 86, No. 66 / Thursday, April 8, 2021 / Notices www.prc.gov, Docket Nos. MC2021–76, CP2021–79. POSTAL SERVICE Product Change—Priority Mail and First-Class Package Service Negotiated Service Agreement Sean Robinson, Attorney, Corporate and Postal Business Law. [FR Doc. 2021–07207 Filed 4–7–21; 8:45 am] Postal ServiceTM. ACTION: Notice. AGENCY: BILLING CODE 7710–12–P The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: April 8, 2021. FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on March 24, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail & First-Class Package Service Contract 192 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2021–77, CP2021–80. SUMMARY: Sean Robinson, Attorney, Corporate and Postal Business Law. [FR Doc. 2021–07205 Filed 4–7–21; 8:45 am] BILLING CODE 7710–12–P Product Change—Priority Mail and First-Class Package Service Negotiated Service Agreement The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: April 8, 2021. FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on March 23, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail Express Contract 87 to Competitive Product List. Documents are available at www.prc.gov, Docket Nos. MC2021–75, CP2021–78. SUMMARY: BILLING CODE 7710–12–P Postal ServiceTM. ACTION: Notice. SECURITIES AND EXCHANGE COMMISSION The Postal Service gives notice of filing a request with the Postal Regulatory Commission to add a domestic shipping services contract to the list of Negotiated Service Agreements in the Mail Classification Schedule’s Competitive Products List. DATES: Date of required notice: April 8, 2021. FOR FURTHER INFORMATION CONTACT: Sean Robinson, 202–268–8405. SUPPLEMENTARY INFORMATION: The United States Postal Service® hereby gives notice that, pursuant to 39 U.S.C. 3642 and 3632(b)(3), on March 24, 2021, it filed with the Postal Regulatory Commission a USPS Request to Add Priority Mail & First-Class Package Service Contract 191 to Competitive Product List. Documents are available at SUMMARY: khammond on DSKJM1Z7X2PROD with NOTICES Postal ServiceTM. ACTION: Notice. AGENCY: [FR Doc. 2021–07204 Filed 4–7–21; 8:45 am] AGENCY: 16:53 Apr 07, 2021 Product Change—Priority Mail Express Negotiated Service Agreement Sean Robinson, Attorney, Corporate and Postal Business Law. POSTAL SERVICE VerDate Sep<11>2014 POSTAL SERVICE Jkt 253001 [Release No. 34–91461; File No. SR– NASDAQ–2021–004] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Approving Proposed Rule Change, as Modified by Amendment No. 2, To Disseminate Abbreviated Order Imbalance Information for the Nasdaq Opening Cross, Amend Certain Cutoff Times for On-Open Orders Entered for Participation in the Nasdaq Opening Cross, and Extend the Time Period for Accepting Certain Limit-On-Open Orders April 2, 2021. I. Introduction On February 3, 2021, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to disseminate abbreviated order imbalance information for the Nasdaq opening cross, amend certain cutoff times for on-open orders entered for participation in the Nasdaq opening cross, and extend the time period for accepting certain limit-on-open orders. The proposed rule change was published for comment in the Federal Register on February 17, 2021.3 On April 1, 2021, the Exchange filed Amendment No. 2 to the proposed rule change.4 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change, as modified by Amendment No. 2. II. Description of the Proposal The Nasdaq opening cross is the process for determining the price at which orders would be executed at the open and for executing those orders, and it establishes the Nasdaq official opening price for a security.5 Under the current process, market-on-open (‘‘MOO’’) orders 6 and limit-on-open (‘‘LOO’’) orders 7 may be entered, cancelled, or modified between 4:00 a.m.8 and immediately prior to 9:28 a.m.9 Opening imbalance only (‘‘OIO’’) orders may be entered between 4:00 a.m. until the time of execution of the Nasdaq opening cross, and may be 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 See Securities Exchange Act Release No. 91096 (February 10, 2021), 86 FR 9972 (‘‘Notice’’). 4 On April 1, 2021, the Exchange also filed and withdrew Amendment No. 1 to the proposed rule change. In Amendment No. 2, the Exchange specified April 26, 2021 as the implementation date for the proposed rule change and amended a footnote to reflect that the proposal would not affect the handling of market-on-open orders or market hours orders with market pegging that are entered after 9:28 a.m. Because Amendment No. 2 does not materially alter the substance of the proposed rule change and makes conforming and technical changes, it is not subject to notice and comment. Amendment No. 2 is available on the Commission’s website at: https://www.sec.gov/rules/sro/ nasdaq.htm. 5 See Nasdaq Equity 4, Rule (‘‘Rule’’) 4752(a)(5) and Notice, supra note 3, at 9972–73. 6 A MOO order is an order type entered without a price that may be executed only during the Nasdaq opening cross. See Rule 4702(b)(8)(A); see also Notice, supra note 3, at 9973 n.8. 7 A LOO order is an order type entered with a price that may be executed only in the Nasdaq opening cross, and only if the price determined by the Nasdaq opening cross is equal to or better than the price at which the LOO order was entered. See Rule 4702(b)(9)(A); see also Notice, supra note 3, at 9973 n.9. 8 All times referenced are in Eastern Time. 9 See Rule 4702(b)(8)(A) and (b)(9)(A); see also Notice, supra note 3, at 9973 n.8–9. 2 17 E:\FR\FM\08APN1.SGM 08APN1 Federal Register / Vol. 86, No. 66 / Thursday, April 8, 2021 / Notices cancelled or modified between 4:00 a.m. and immediately prior to 9:28 a.m.10 At 9:28 a.m., the Exchange begins to disseminate an order imbalance indicator (also known as the net order imbalance indicator or ‘‘NOII’’) every second until market open.11 The NOII is a message disseminated by electronic means containing information about MOO, LOO, OIO, and early market hours orders,12 and information about the price at which those orders would execute at the time of dissemination.13 Early Opening Order Imbalance Indicator and Cutoff Times for On-Open Orders The Exchange proposes to amend Rule 4752 to establish an early opening order imbalance indicator (‘‘EOII’’) that would be disseminated by electronic means every 10 seconds beginning at 9:25 a.m. until the NOII begins to disseminate at 9:28 a.m.14 As proposed, the EOII would contain the same information as the NOII, except it would exclude information about indicative prices.15 Specifically, the EOII would contain: (1) The current reference price; (2) the number of shares represented by MOO, LOO, OIO, and early market hours orders that are paired at the current reference price; (3) the size of any imbalance; and (4) the buy/sell khammond on DSKJM1Z7X2PROD with NOTICES 10 An OIO order is an order type entered with a price that may be executed only in the Nasdaq opening cross and only against MOO, LOO, or early market hours orders. If the entered price of an OIO order to buy (sell) is higher than (lower than) the highest bid (lowest offer) on the Nasdaq book, the price of the OIO order will be modified repeatedly to equal the highest bid (lowest offer) on the Nasdaq book; provided, however, that the price of the order will not be moved beyond its stated limit price. See Rule 4702(b)(10)(A); see also Notice, supra note 3, at 9973 n.10. 11 See Rule 4752(d)(1); see also Notice, supra note 3, at 9973. 12 Market hours orders means any order that may be entered into the system and designated with a time-in-force of MIOC, MDAY, and MGTC; market hours orders are designated as ‘‘early market hours orders’’ if they are entered into the system prior to 9:28 a.m. See Rule 4752(a)(7). 13 Specifically, the NOII contains: (1) The current reference price; (2) the number of shares represented by MOO, LOO, OIO, and early market hours orders that are paired at the current reference price; (3) the size of any imbalance; (4) the buy/sell direction of any imbalance; and (5) the indicative prices at which the Nasdaq opening cross would occur if it were to occur at that time and the percent by which the indicative prices are outside the then current Nasdaq market center best bid or best offer, whichever is closer. See Rule 4752(a) (also providing the definitions for current reference price, imbalance, and indicative prices); see also Notice, supra note 3 at 9973. 14 See proposed Rule 4752(a)(1) and (d)(1); see also Notice, supra note 3, at 9973. The Exchange also proposes to renumber certain provisions of Rule 4752 to incorporate newly proposed defined terms into the rule, and to make a non-substantive change in current Rule 4752(a)(2)(E)(i) to delete the word ‘‘both.’’ 15 See proposed Rule 4752(a)(1). VerDate Sep<11>2014 16:53 Apr 07, 2021 Jkt 253001 direction of any imbalance.16 The Exchange believes that an early release of a subset of the NOII information would offer participants additional time and flexibility to react to imbalance information in advance of 9:28 a.m. and aid them in making informed decisions about whether and how to participate in the opening cross.17 The Exchange also believes that the EOII would enhance price discovery and liquidity by attracting more participants to its opening cross.18 In addition, the Exchange believes that disseminating the EOII every 10 seconds would provide participants more time to digest the information and enter MOO, LOO, and OIO orders in between dissemination periods.19 As stated above, the EOII would differ from the NOII in that the EOII would not include information about indicative prices.20 The Exchange believes that the exclusion of the near and far clearing prices (which are part of the indicative price information) from the EOII would enhance stability in the opening cross process because it would reduce the possibility of large indicative price movements during the early moments of the price formation process.21 By contrast, the Exchange proposes to include in the EOII the current reference price because it reflects the Nasdaq best bid and best offer at the time of dissemination and it is used to calculate any imbalance direction and imbalance size.22 According to the Exchange, providing the current reference price in the EOII would increase transparency and allow participants to provide additional orders to improve the price discovery process in the opening cross.23 In connection with the establishment of the EOII that would begin disseminating at 9:25 a.m., the Exchange proposes to amend Rule 4702(b) to prohibit participants from cancelling or modifying MOO, LOO, and OIO orders beginning at 9:25 a.m.24 The Exchange 16 See 17 See id.; see also Notice, supra note 3, at 9973. Notice, supra note 3, at 9973. 18 Id. 19 See id. at 9974. supra note 15 and accompanying text. 21 The Exchange also states that, because participants may freely enter new orders that contribute to price discovery before 9:28 a.m., indicative prices may change more substantially before 9:28 a.m. than after. See Notice, supra note 3, at 9973–74. 22 See id. at 9974 n.19. 23 See id. 24 See proposed Rule 4702(b)(8), (b)(9), and (b)(10); see also Notice, supra note 3, at 9974. Relatedly, the Exchange proposes to amend current Rule 4752(a)(7) to provide that requests to cancel or modify market hours orders would be suspended beginning at 9:25 a.m. (rather than 9:28 a.m. as the rule currently provides) until after completion of 20 See PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 18331 does not propose to similarly change the cutoff times for entering MOO, LOO, and OIO orders for participation in the opening cross. Thus, under the proposal, MOO orders may continue to be entered until immediately prior to 9:28 a.m.; 25 LOO orders may be entered until immediately prior to 9:28 a.m. or, in certain circumstances as described below, until 9:29:30 a.m.; 26 and OIO orders may continue to be entered until the time of execution of the opening cross.27 But any such orders, once entered, may not be cancelled or modified at or after 9:25 a.m.28 LOO Order Type Changes The Exchange proposes to amend Rule 4702(b)(9)(A) to permit the entry of LOO orders between 9:28 a.m. and 9:29:30 a.m. (‘‘late LOO orders’’), provided that the security has a first opening reference price or a second opening reference price.29 The Exchange believes that allowing the entry of eligible LOO orders after 9:28 a.m. would enhance the price discovery process for and liquidity of a given security in the opening cross.30 As proposed, any LOO order entered after 9:29:30 a.m. that is designated as immediate-or-cancel (‘‘IOC’’) would be rejected.31 the Nasdaq opening cross, at which time such requests will be processed to the extent that such orders remain available within the system. The Exchange also proposes to amend current Rule 4752(a)(7) to utilize certain defined terms and abbreviated terms. 25 See proposed Rule 4702(b)(8)(A). 26 See proposed Rule 4702(b)(9)(A). 27 See proposed Rule 4702(b)(10)(A). 28 See proposed Rule 4702(b)(8), (b)(9), and (b)(10); see also Notice, supra note 3, at 9974. 29 The Exchange also proposes to make conforming changes in Rule 4702(b)(9)(B). Specifically, Rule 4702(b)(9)(B) currently specifies the handling of opening cross/market hours orders (i.e., orders with a time-in-force that continues after the time of the Nasdaq opening cross and are flagged to participate in the opening cross) entered between 9:28 a.m. and the time of the Nasdaq opening cross. The Exchange proposes to amend this time interval such that it refers to opening cross/market hours orders entered between 9:29:30 a.m. and the time of the Nasdaq opening cross. Relatedly, the Exchange proposes to specify in Rule 4702(b)(9)(B) that certain LOO orders entered at or after 9:28 a.m. would not be rejected. Moreover, the Exchange states that market hours orders entered between 9:28 a.m. and 9:29:30 a.m. would be treated as late LOO orders, as applicable. See Notice, supra note 3, at 9974 n.21 and Amendment No. 2, supra note 4. In addition, the Exchange proposes to make a conforming change in current Rule 4752(a)(7) to provide that orders entered at or after 9:29:30 a.m. (rather than 9:28 a.m. as the rule currently provides) with a time-in-force other than IOC would be designated as ‘‘late market hours orders.’’ 30 See Notice, supra note 3, at 9974. 31 See proposed Rule 4702(b)(9)(A). Relatedly, the Exchange proposes to amend Rule 4702(b)(9)(B) to provide that LOO orders that are opening cross/ E:\FR\FM\08APN1.SGM Continued 08APN1 18332 Federal Register / Vol. 86, No. 66 / Thursday, April 8, 2021 / Notices khammond on DSKJM1Z7X2PROD with NOTICES The Exchange proposes to define the first opening reference price as the previous day’s Nasdaq official closing price of the security for Nasdaq-listed securities or the consolidated closing price for non-Nasdaq-listed securities.32 For new exchange-traded products that do not have a Nasdaq official closing price or a consolidated closing price, the first opening reference price would be the offering price.33 The Exchange states that it proposes to use the Nasdaq official closing price as the first opening reference price because the Nasdaq official closing price is a well-defined benchmark for the security’s market price that serves as the most relevant price of a security at or before regular trading hours.34 The Exchange proposes to define the second opening reference price as the current reference price in the NOII disseminated at 9:28 a.m.35 The Exchange states that it proposes to use the current reference price in the NOII disseminated at 9:28 a.m. as the second opening reference price because it is consistent with the Exchange’s functionality with respect to the closing cross and late limit-on-close (‘‘LOC’’) orders, and is intended to promote price stability of the opening cross.36 In addition, the Exchange proposes to accept a LOO order entered between 9:28 a.m. and 9:29:30 a.m. at its limit price, unless its limit price is higher (lower) than the higher (lower) of the first opening reference price and the second opening reference price for a LOO order to buy (sell), in which case the LOO order would be handled consistent with the participant’s instruction that the LOO order is to be: (1) Rejected; or (2) re-priced to the higher (lower) of the first opening reference price and the second opening reference price, provided that if either market hours orders and entered between 9:29:30 a.m. (as proposed) and the time of the Nasdaq opening cross are subject to the handling described in that rule only if the orders have a time-in-force other than IOC. The Exchange states that this is a clarifying, non-substantive change because opening cross/market hours orders, by definition, have a time-in-force other than IOC. See Notice, supra note 3, at 9974 n.24. The Exchange also proposes to remove language from Rule 4702(b)(9)(B) regarding how it handles routable orders with a time-in-force other than IOC that are flagged to participate in the Nasdaq opening cross and entered at or after 9:28 a.m. because the Exchange believes that language is duplicative of other language in the same rule. See id. at 9975. Moreover, the Exchange proposes to make a conforming change in current Rule 4752(a)(7) to provide that orders entered at or after 9:29:30 a.m. (as proposed) would be designated as ‘‘late market hours orders’’ if they have a time-inforce other than IOC. 32 See proposed Rule 4752(a)(8). 33 See id. 34 See Notice, supra note 3, at 9974. 35 See proposed Rule 4752(a)(9). 36 See Notice, supra note 3, at 9974. VerDate Sep<11>2014 16:53 Apr 07, 2021 Jkt 253001 the first opening reference price or the second opening reference price is not at a permissible minimum increment, the first opening reference price or the second opening reference price, as applicable, would be rounded (i) to the nearest permitted minimum increment (with midpoint prices being rounded up) if there is no imbalance, (ii) up if there is a buy imbalance, or (iii) down if there is a sell imbalance.37 The default configuration for participants that do not specify otherwise would be to have such LOO order re-priced rather than rejected.38 The Exchange states that this repricing mechanism is designed to reduce order imbalances and volatility for securities that participate in the opening cross, and believes that allowing such LOO orders to be priced at the more aggressive of the two reference prices would provide flexibility to market participants by allowing them to consider information in both the EOII and NOII within the context of the previous day’s Nasdaq official closing price or consolidated closing price to facilitate informed decisions about whether and how to participate in the opening cross.39 III. Discussion and Commission Findings After careful review, the Commission finds that the proposed rule change, as modified by Amendment No. 2, is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.40 In particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,41 which requires, among other things, that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to 37 See proposed Rule 4702(b)(9)(A). The Exchange proposes to use natural rounding when there is no imbalance. When there is an imbalance, the Exchange would round such that more offsetting interest can participate. Thus, when there is a buy imbalance, the Exchange would round the first opening reference price or second opening reference price up to allow more sell interest to participate, and when there is a sell imbalance, the Exchange would round the first opening reference price or second opening reference price down to allow more buy interest to participate. See Notice, supra note 3, at 9974 n.22. 38 See proposed Rule 4702(b)(9)(A). 39 See Notice, supra note 3, at 9974. 40 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 41 15 U.S.C. 78f(b)(5). PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 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. As described above, the Exchange proposes to disseminate the EOII beginning at 9:25 a.m., which would provide market participants with certain information relating to the Nasdaq opening cross earlier than the current NOII.42 The Commission believes that the EOII would provide earlier transparency regarding the current reference price, the number of paired shares at that price, the size of any imbalance, and the direction of any imbalance for the Nasdaq opening cross, which would provide market participants with additional time before the opening cross to consider this information and flexibility in determining whether and how to participate in the opening cross.43 The Commission also believes that the proposed 10-second interval between EOII disseminations would provide market participants with time to consider any EOII updates, while avoiding excessive message traffic. Accordingly, the Commission believes that the dissemination of the EOII could lead to increased participation and liquidity and promote price discovery in the Nasdaq opening cross.44 As described above, in connection with the proposal to begin disseminating the EOII at 9:25 a.m., the Exchange also proposes to prohibit participants from cancelling or modifying MOO, LOO, and OIO orders beginning at 9:25 a.m. The Commission believes that this proposed change would allow the Exchange to begin disseminating the EOII at a time when on-open interest is relatively settled, and could reduce the possibility of large price movements in the opening cross process that may otherwise result from cancellations or modifications of MOO, LOO, and OIO orders in response to the EOII. Moreover, because the Exchange is 42 As described above, the EOII would contain the same information as the NOII, except it would exclude information about indicative prices in order to reduce the possibility of large indicative price movements during the early moments of the price formation process. 43 As described above, participants may enter MOO, LOO, and OIO orders after the Exchange begins disseminating the EOII at 9:25 a.m. Specifically, MOO orders may continue to be entered until immediately prior to 9:28 a.m., LOO orders may be entered until immediately prior to 9:28 a.m. (or, in certain circumstances, until 9:29:30 a.m.), and OIO orders may continue to be entered until the time of execution of the opening cross. 44 The Exchange also provides a similar early order imbalance indicator for the Nasdaq closing cross, which is also disseminated with a 10-second interval. See Rule 4754(a)(10) and (b)(1). E:\FR\FM\08APN1.SGM 08APN1 Federal Register / Vol. 86, No. 66 / Thursday, April 8, 2021 / Notices not proposing a similar 9:25 a.m. cutoff time for the entry of MOO, LOO, and OIO orders, market participants may consider the information in the EOII and NOII, as applicable, in entering these orders.45 In addition, as described above, the Exchange proposes to permit the entry of LOO orders between 9:28 a.m. and 9:29:30 a.m. if there is either a first opening reference price or a second opening reference price, with such orders priced no more aggressively than the first opening reference price and the second opening reference price. The Commission believes that these proposed changes would allow participants to retain control over the entry of LOO orders until a later time, and would allow participants to consider the information contained in the EOII and the NOII, as well as the previous day’s closing price, in deciding whether to enter late LOO orders. The Commission also believes that the proposed re-pricing of late LOO orders such that they are priced no more aggressively than the first opening reference price and the second opening reference price could promote price stability in the opening cross process. Accordingly, the Commission believes that the proposed changes relating to late LOO orders could encourage additional participation and reduce imbalances in the Nasdaq opening cross, while promoting price stability in the opening process.46 Finally, the Commission believes that the Exchange’s proposed technical and conforming changes to Rules 4702 and 4752 would allow those rules to consistently reflect the proposed 9:29:30 a.m. cutoff time for entering late LOO orders and the proposed 9:25 a.m. cutoff time for cancellations and modifications of MOO, LOO, and OIO orders, and would add clarity with respect to how the Exchange conducts its opening process and handles orders in connection with that process. IV. Conclusion khammond on DSKJM1Z7X2PROD with NOTICES It is therefore ordered, pursuant to Section 19(b)(2) of the Act,47 that the proposed rule change (SR–NASDAQ– 2021–004), as modified by Amendment No. 2, be, and hereby is, approved. 45 The Exchange also has a cutoff time for cancellations or modifications of on-close interest that aligns with the time that the Exchange begins disseminating the early order imbalance indicator for the Nasdaq closing cross. See Rules 4702(b)(11)– (13) and 4754(b)(1). 46 The Exchange also has a similar late LOC order type for the Nasdaq closing cross. See Rule 4702(b)(12). 47 15 U.S.C. 78s(b)(2). 48 17 CFR 200.30–3(a)(12). VerDate Sep<11>2014 16:53 Apr 07, 2021 Jkt 253001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.48 J. Matthew DeLesDernier, Assistant Secretary. [FR Doc. 2021–07197 Filed 4–7–21; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–91469; File No. SR– CboeEDGX–2021–016] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 19.6 (Series of Options Contracts Open for Trading) in Connection With Limiting the Number of Strikes Listed for Short Term Option Series Which are Available for Quoting and Trading on the Exchange April 2, 2021. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 26, 2021, Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX’’) 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 Exchange. The Exchange filed the proposal as a ‘‘non-controversial’’ proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 3 and Rule 19b–4(f)(6) thereunder.4 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 Cboe EDGX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘EDGX Options’’) proposes to amend Rule 19.6 (Series of Options Contracts Open for Trading) in connection with limiting the number of strikes listed for Short Term Option Series which are available for quoting and trading on the Exchange. The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is also available on the Exchange’s website (https://markets.cboe.com/us/ options/regulation/rule_filings/edgx/), at the Exchange’s Office of the 15 U.S.C. 78s(b)(1). 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii). 4 17 CFR 240.19b–4(f)(6). 1 2 PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 18333 Secretary, 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 Exchange proposes to amend Rule 19.6 (Series of Options Contracts Open for Trading). Specifically, this proposal seeks to widen the intervals between strikes in order to limit the number of strikes listed for multiply listed equity options classes (excluding options on Exchange-Traded Funds (‘‘ETFs’’) and Exchange-Traded Notes (‘‘ETNs’’)) within the Short Term Option Series program that have an expiration date more than 21 days from the listing date. Background Current Rule 19.6 permits the Exchange, after a particular class of options has been approved for listing and trading on the Exchange, to open for trading series of options therein. The Exchange may list series of options for trading on a weekly,5 monthly 6 or 5 The weekly listing program is known as the Short Term Option Series Program and is described within Rule 19.6.05. 6 The Exchange will open at least one expiration month for each class of options open for trading on the Exchange. See Rule 19.6(e). The monthly expirations are subject to certain listing criteria for underlying securities described within Rule 19.3. Monthly listings expire the third Friday of the month. The term ‘‘expiration date’’ when used in respect of a series of binary options other than event options means the last day on which the options may be automatically exercised. In the case of a series of event options (other than credit default options or credit default basket options) that are be automatically exercised prior to their expiration date upon receipt by the Corporation of an event confirmation, the expiration date is the date specified by the listing Exchange; provided, however, that when an event confirmation is deemed to have been received by the Corporation with respect to such series of options, the expiration date will be accelerated to the date on which such event confirmation is deemed to have Continued E:\FR\FM\08APN1.SGM 08APN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 86, Number 66 (Thursday, April 8, 2021)]
[Notices]
[Pages 18330-18333]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-07197]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91461; File No. SR-NASDAQ-2021-004]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order 
Approving Proposed Rule Change, as Modified by Amendment No. 2, To 
Disseminate Abbreviated Order Imbalance Information for the Nasdaq 
Opening Cross, Amend Certain Cutoff Times for On-Open Orders Entered 
for Participation in the Nasdaq Opening Cross, and Extend the Time 
Period for Accepting Certain Limit-On-Open Orders

April 2, 2021.

I. Introduction

    On February 3, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to disseminate abbreviated order imbalance 
information for the Nasdaq opening cross, amend certain cutoff times 
for on-open orders entered for participation in the Nasdaq opening 
cross, and extend the time period for accepting certain limit-on-open 
orders. The proposed rule change was published for comment in the 
Federal Register on February 17, 2021.\3\ On April 1, 2021, the 
Exchange filed Amendment No. 2 to the proposed rule change.\4\ The 
Commission received no comment letters on the proposed rule change. 
This order approves the proposed rule change, as modified by Amendment 
No. 2.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 91096 (February 10, 
2021), 86 FR 9972 (``Notice'').
    \4\ On April 1, 2021, the Exchange also filed and withdrew 
Amendment No. 1 to the proposed rule change. In Amendment No. 2, the 
Exchange specified April 26, 2021 as the implementation date for the 
proposed rule change and amended a footnote to reflect that the 
proposal would not affect the handling of market-on-open orders or 
market hours orders with market pegging that are entered after 9:28 
a.m. Because Amendment No. 2 does not materially alter the substance 
of the proposed rule change and makes conforming and technical 
changes, it is not subject to notice and comment. Amendment No. 2 is 
available on the Commission's website at: https://www.sec.gov/rules/sro/nasdaq.htm.
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II. Description of the Proposal

    The Nasdaq opening cross is the process for determining the price 
at which orders would be executed at the open and for executing those 
orders, and it establishes the Nasdaq official opening price for a 
security.\5\ Under the current process, market-on-open (``MOO'') orders 
\6\ and limit-on-open (``LOO'') orders \7\ may be entered, cancelled, 
or modified between 4:00 a.m.\8\ and immediately prior to 9:28 a.m.\9\ 
Opening imbalance only (``OIO'') orders may be entered between 4:00 
a.m. until the time of execution of the Nasdaq opening cross, and may 
be

[[Page 18331]]

cancelled or modified between 4:00 a.m. and immediately prior to 9:28 
a.m.\10\ At 9:28 a.m., the Exchange begins to disseminate an order 
imbalance indicator (also known as the net order imbalance indicator or 
``NOII'') every second until market open.\11\ The NOII is a message 
disseminated by electronic means containing information about MOO, LOO, 
OIO, and early market hours orders,\12\ and information about the price 
at which those orders would execute at the time of dissemination.\13\
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    \5\ See Nasdaq Equity 4, Rule (``Rule'') 4752(a)(5) and Notice, 
supra note 3, at 9972-73.
    \6\ A MOO order is an order type entered without a price that 
may be executed only during the Nasdaq opening cross. See Rule 
4702(b)(8)(A); see also Notice, supra note 3, at 9973 n.8.
    \7\ A LOO order is an order type entered with a price that may 
be executed only in the Nasdaq opening cross, and only if the price 
determined by the Nasdaq opening cross is equal to or better than 
the price at which the LOO order was entered. See Rule 
4702(b)(9)(A); see also Notice, supra note 3, at 9973 n.9.
    \8\ All times referenced are in Eastern Time.
    \9\ See Rule 4702(b)(8)(A) and (b)(9)(A); see also Notice, supra 
note 3, at 9973 n.8-9.
    \10\ An OIO order is an order type entered with a price that may 
be executed only in the Nasdaq opening cross and only against MOO, 
LOO, or early market hours orders. If the entered price of an OIO 
order to buy (sell) is higher than (lower than) the highest bid 
(lowest offer) on the Nasdaq book, the price of the OIO order will 
be modified repeatedly to equal the highest bid (lowest offer) on 
the Nasdaq book; provided, however, that the price of the order will 
not be moved beyond its stated limit price. See Rule 4702(b)(10)(A); 
see also Notice, supra note 3, at 9973 n.10.
    \11\ See Rule 4752(d)(1); see also Notice, supra note 3, at 
9973.
    \12\ Market hours orders means any order that may be entered 
into the system and designated with a time-in-force of MIOC, MDAY, 
and MGTC; market hours orders are designated as ``early market hours 
orders'' if they are entered into the system prior to 9:28 a.m. See 
Rule 4752(a)(7).
    \13\ Specifically, the NOII contains: (1) The current reference 
price; (2) the number of shares represented by MOO, LOO, OIO, and 
early market hours orders that are paired at the current reference 
price; (3) the size of any imbalance; (4) the buy/sell direction of 
any imbalance; and (5) the indicative prices at which the Nasdaq 
opening cross would occur if it were to occur at that time and the 
percent by which the indicative prices are outside the then current 
Nasdaq market center best bid or best offer, whichever is closer. 
See Rule 4752(a) (also providing the definitions for current 
reference price, imbalance, and indicative prices); see also Notice, 
supra note 3 at 9973.
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Early Opening Order Imbalance Indicator and Cutoff Times for On-Open 
Orders
    The Exchange proposes to amend Rule 4752 to establish an early 
opening order imbalance indicator (``EOII'') that would be disseminated 
by electronic means every 10 seconds beginning at 9:25 a.m. until the 
NOII begins to disseminate at 9:28 a.m.\14\ As proposed, the EOII would 
contain the same information as the NOII, except it would exclude 
information about indicative prices.\15\ Specifically, the EOII would 
contain: (1) The current reference price; (2) the number of shares 
represented by MOO, LOO, OIO, and early market hours orders that are 
paired at the current reference price; (3) the size of any imbalance; 
and (4) the buy/sell direction of any imbalance.\16\ The Exchange 
believes that an early release of a subset of the NOII information 
would offer participants additional time and flexibility to react to 
imbalance information in advance of 9:28 a.m. and aid them in making 
informed decisions about whether and how to participate in the opening 
cross.\17\ The Exchange also believes that the EOII would enhance price 
discovery and liquidity by attracting more participants to its opening 
cross.\18\ In addition, the Exchange believes that disseminating the 
EOII every 10 seconds would provide participants more time to digest 
the information and enter MOO, LOO, and OIO orders in between 
dissemination periods.\19\
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    \14\ See proposed Rule 4752(a)(1) and (d)(1); see also Notice, 
supra note 3, at 9973. The Exchange also proposes to renumber 
certain provisions of Rule 4752 to incorporate newly proposed 
defined terms into the rule, and to make a non-substantive change in 
current Rule 4752(a)(2)(E)(i) to delete the word ``both.''
    \15\ See proposed Rule 4752(a)(1).
    \16\ See id.; see also Notice, supra note 3, at 9973.
    \17\ See Notice, supra note 3, at 9973.
    \18\ Id.
    \19\ See id. at 9974.
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    As stated above, the EOII would differ from the NOII in that the 
EOII would not include information about indicative prices.\20\ The 
Exchange believes that the exclusion of the near and far clearing 
prices (which are part of the indicative price information) from the 
EOII would enhance stability in the opening cross process because it 
would reduce the possibility of large indicative price movements during 
the early moments of the price formation process.\21\ By contrast, the 
Exchange proposes to include in the EOII the current reference price 
because it reflects the Nasdaq best bid and best offer at the time of 
dissemination and it is used to calculate any imbalance direction and 
imbalance size.\22\ According to the Exchange, providing the current 
reference price in the EOII would increase transparency and allow 
participants to provide additional orders to improve the price 
discovery process in the opening cross.\23\
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    \20\ See supra note 15 and accompanying text.
    \21\ The Exchange also states that, because participants may 
freely enter new orders that contribute to price discovery before 
9:28 a.m., indicative prices may change more substantially before 
9:28 a.m. than after. See Notice, supra note 3, at 9973-74.
    \22\ See id. at 9974 n.19.
    \23\ See id.
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    In connection with the establishment of the EOII that would begin 
disseminating at 9:25 a.m., the Exchange proposes to amend Rule 4702(b) 
to prohibit participants from cancelling or modifying MOO, LOO, and OIO 
orders beginning at 9:25 a.m.\24\ The Exchange does not propose to 
similarly change the cutoff times for entering MOO, LOO, and OIO orders 
for participation in the opening cross. Thus, under the proposal, MOO 
orders may continue to be entered until immediately prior to 9:28 a.m.; 
\25\ LOO orders may be entered until immediately prior to 9:28 a.m. or, 
in certain circumstances as described below, until 9:29:30 a.m.; \26\ 
and OIO orders may continue to be entered until the time of execution 
of the opening cross.\27\ But any such orders, once entered, may not be 
cancelled or modified at or after 9:25 a.m.\28\
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    \24\ See proposed Rule 4702(b)(8), (b)(9), and (b)(10); see also 
Notice, supra note 3, at 9974. Relatedly, the Exchange proposes to 
amend current Rule 4752(a)(7) to provide that requests to cancel or 
modify market hours orders would be suspended beginning at 9:25 a.m. 
(rather than 9:28 a.m. as the rule currently provides) until after 
completion of the Nasdaq opening cross, at which time such requests 
will be processed to the extent that such orders remain available 
within the system. The Exchange also proposes to amend current Rule 
4752(a)(7) to utilize certain defined terms and abbreviated terms.
    \25\ See proposed Rule 4702(b)(8)(A).
    \26\ See proposed Rule 4702(b)(9)(A).
    \27\ See proposed Rule 4702(b)(10)(A).
    \28\ See proposed Rule 4702(b)(8), (b)(9), and (b)(10); see also 
Notice, supra note 3, at 9974.
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LOO Order Type Changes
    The Exchange proposes to amend Rule 4702(b)(9)(A) to permit the 
entry of LOO orders between 9:28 a.m. and 9:29:30 a.m. (``late LOO 
orders''), provided that the security has a first opening reference 
price or a second opening reference price.\29\ The Exchange believes 
that allowing the entry of eligible LOO orders after 9:28 a.m. would 
enhance the price discovery process for and liquidity of a given 
security in the opening cross.\30\ As proposed, any LOO order entered 
after 9:29:30 a.m. that is designated as immediate-or-cancel (``IOC'') 
would be rejected.\31\
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    \29\ The Exchange also proposes to make conforming changes in 
Rule 4702(b)(9)(B). Specifically, Rule 4702(b)(9)(B) currently 
specifies the handling of opening cross/market hours orders (i.e., 
orders with a time-in-force that continues after the time of the 
Nasdaq opening cross and are flagged to participate in the opening 
cross) entered between 9:28 a.m. and the time of the Nasdaq opening 
cross. The Exchange proposes to amend this time interval such that 
it refers to opening cross/market hours orders entered between 
9:29:30 a.m. and the time of the Nasdaq opening cross. Relatedly, 
the Exchange proposes to specify in Rule 4702(b)(9)(B) that certain 
LOO orders entered at or after 9:28 a.m. would not be rejected. 
Moreover, the Exchange states that market hours orders entered 
between 9:28 a.m. and 9:29:30 a.m. would be treated as late LOO 
orders, as applicable. See Notice, supra note 3, at 9974 n.21 and 
Amendment No. 2, supra note 4. In addition, the Exchange proposes to 
make a conforming change in current Rule 4752(a)(7) to provide that 
orders entered at or after 9:29:30 a.m. (rather than 9:28 a.m. as 
the rule currently provides) with a time-in-force other than IOC 
would be designated as ``late market hours orders.''
    \30\ See Notice, supra note 3, at 9974.
    \31\ See proposed Rule 4702(b)(9)(A). Relatedly, the Exchange 
proposes to amend Rule 4702(b)(9)(B) to provide that LOO orders that 
are opening cross/market hours orders and entered between 9:29:30 
a.m. (as proposed) and the time of the Nasdaq opening cross are 
subject to the handling described in that rule only if the orders 
have a time-in-force other than IOC. The Exchange states that this 
is a clarifying, non-substantive change because opening cross/market 
hours orders, by definition, have a time-in-force other than IOC. 
See Notice, supra note 3, at 9974 n.24. The Exchange also proposes 
to remove language from Rule 4702(b)(9)(B) regarding how it handles 
routable orders with a time-in-force other than IOC that are flagged 
to participate in the Nasdaq opening cross and entered at or after 
9:28 a.m. because the Exchange believes that language is duplicative 
of other language in the same rule. See id. at 9975. Moreover, the 
Exchange proposes to make a conforming change in current Rule 
4752(a)(7) to provide that orders entered at or after 9:29:30 a.m. 
(as proposed) would be designated as ``late market hours orders'' if 
they have a time-in-force other than IOC.

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[[Page 18332]]

    The Exchange proposes to define the first opening reference price 
as the previous day's Nasdaq official closing price of the security for 
Nasdaq-listed securities or the consolidated closing price for non-
Nasdaq-listed securities.\32\ For new exchange-traded products that do 
not have a Nasdaq official closing price or a consolidated closing 
price, the first opening reference price would be the offering 
price.\33\ The Exchange states that it proposes to use the Nasdaq 
official closing price as the first opening reference price because the 
Nasdaq official closing price is a well-defined benchmark for the 
security's market price that serves as the most relevant price of a 
security at or before regular trading hours.\34\ The Exchange proposes 
to define the second opening reference price as the current reference 
price in the NOII disseminated at 9:28 a.m.\35\ The Exchange states 
that it proposes to use the current reference price in the NOII 
disseminated at 9:28 a.m. as the second opening reference price because 
it is consistent with the Exchange's functionality with respect to the 
closing cross and late limit-on-close (``LOC'') orders, and is intended 
to promote price stability of the opening cross.\36\
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    \32\ See proposed Rule 4752(a)(8).
    \33\ See id.
    \34\ See Notice, supra note 3, at 9974.
    \35\ See proposed Rule 4752(a)(9).
    \36\ See Notice, supra note 3, at 9974.
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    In addition, the Exchange proposes to accept a LOO order entered 
between 9:28 a.m. and 9:29:30 a.m. at its limit price, unless its limit 
price is higher (lower) than the higher (lower) of the first opening 
reference price and the second opening reference price for a LOO order 
to buy (sell), in which case the LOO order would be handled consistent 
with the participant's instruction that the LOO order is to be: (1) 
Rejected; or (2) re-priced to the higher (lower) of the first opening 
reference price and the second opening reference price, provided that 
if either the first opening reference price or the second opening 
reference price is not at a permissible minimum increment, the first 
opening reference price or the second opening reference price, as 
applicable, would be rounded (i) to the nearest permitted minimum 
increment (with midpoint prices being rounded up) if there is no 
imbalance, (ii) up if there is a buy imbalance, or (iii) down if there 
is a sell imbalance.\37\ The default configuration for participants 
that do not specify otherwise would be to have such LOO order re-priced 
rather than rejected.\38\ The Exchange states that this repricing 
mechanism is designed to reduce order imbalances and volatility for 
securities that participate in the opening cross, and believes that 
allowing such LOO orders to be priced at the more aggressive of the two 
reference prices would provide flexibility to market participants by 
allowing them to consider information in both the EOII and NOII within 
the context of the previous day's Nasdaq official closing price or 
consolidated closing price to facilitate informed decisions about 
whether and how to participate in the opening cross.\39\
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    \37\ See proposed Rule 4702(b)(9)(A). The Exchange proposes to 
use natural rounding when there is no imbalance. When there is an 
imbalance, the Exchange would round such that more offsetting 
interest can participate. Thus, when there is a buy imbalance, the 
Exchange would round the first opening reference price or second 
opening reference price up to allow more sell interest to 
participate, and when there is a sell imbalance, the Exchange would 
round the first opening reference price or second opening reference 
price down to allow more buy interest to participate. See Notice, 
supra note 3, at 9974 n.22.
    \38\ See proposed Rule 4702(b)(9)(A).
    \39\ See Notice, supra note 3, at 9974.
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III. Discussion and Commission Findings

    After careful review, the Commission finds that the proposed rule 
change, as modified by Amendment No. 2, is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\40\ In particular, the 
Commission finds that the proposed rule change is consistent with 
Section 6(b)(5) of the Act,\41\ which requires, among other things, 
that the rules of a national securities exchange be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general, to protect 
investors and the public interest.
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    \40\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \41\ 15 U.S.C. 78f(b)(5).
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    As described above, the Exchange proposes to disseminate the EOII 
beginning at 9:25 a.m., which would provide market participants with 
certain information relating to the Nasdaq opening cross earlier than 
the current NOII.\42\ The Commission believes that the EOII would 
provide earlier transparency regarding the current reference price, the 
number of paired shares at that price, the size of any imbalance, and 
the direction of any imbalance for the Nasdaq opening cross, which 
would provide market participants with additional time before the 
opening cross to consider this information and flexibility in 
determining whether and how to participate in the opening cross.\43\ 
The Commission also believes that the proposed 10-second interval 
between EOII disseminations would provide market participants with time 
to consider any EOII updates, while avoiding excessive message traffic. 
Accordingly, the Commission believes that the dissemination of the EOII 
could lead to increased participation and liquidity and promote price 
discovery in the Nasdaq opening cross.\44\
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    \42\ As described above, the EOII would contain the same 
information as the NOII, except it would exclude information about 
indicative prices in order to reduce the possibility of large 
indicative price movements during the early moments of the price 
formation process.
    \43\ As described above, participants may enter MOO, LOO, and 
OIO orders after the Exchange begins disseminating the EOII at 9:25 
a.m. Specifically, MOO orders may continue to be entered until 
immediately prior to 9:28 a.m., LOO orders may be entered until 
immediately prior to 9:28 a.m. (or, in certain circumstances, until 
9:29:30 a.m.), and OIO orders may continue to be entered until the 
time of execution of the opening cross.
    \44\ The Exchange also provides a similar early order imbalance 
indicator for the Nasdaq closing cross, which is also disseminated 
with a 10-second interval. See Rule 4754(a)(10) and (b)(1).
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    As described above, in connection with the proposal to begin 
disseminating the EOII at 9:25 a.m., the Exchange also proposes to 
prohibit participants from cancelling or modifying MOO, LOO, and OIO 
orders beginning at 9:25 a.m. The Commission believes that this 
proposed change would allow the Exchange to begin disseminating the 
EOII at a time when on-open interest is relatively settled, and could 
reduce the possibility of large price movements in the opening cross 
process that may otherwise result from cancellations or modifications 
of MOO, LOO, and OIO orders in response to the EOII. Moreover, because 
the Exchange is

[[Page 18333]]

not proposing a similar 9:25 a.m. cutoff time for the entry of MOO, 
LOO, and OIO orders, market participants may consider the information 
in the EOII and NOII, as applicable, in entering these orders.\45\
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    \45\ The Exchange also has a cutoff time for cancellations or 
modifications of on-close interest that aligns with the time that 
the Exchange begins disseminating the early order imbalance 
indicator for the Nasdaq closing cross. See Rules 4702(b)(11)-(13) 
and 4754(b)(1).
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    In addition, as described above, the Exchange proposes to permit 
the entry of LOO orders between 9:28 a.m. and 9:29:30 a.m. if there is 
either a first opening reference price or a second opening reference 
price, with such orders priced no more aggressively than the first 
opening reference price and the second opening reference price. The 
Commission believes that these proposed changes would allow 
participants to retain control over the entry of LOO orders until a 
later time, and would allow participants to consider the information 
contained in the EOII and the NOII, as well as the previous day's 
closing price, in deciding whether to enter late LOO orders. The 
Commission also believes that the proposed re-pricing of late LOO 
orders such that they are priced no more aggressively than the first 
opening reference price and the second opening reference price could 
promote price stability in the opening cross process. Accordingly, the 
Commission believes that the proposed changes relating to late LOO 
orders could encourage additional participation and reduce imbalances 
in the Nasdaq opening cross, while promoting price stability in the 
opening process.\46\
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    \46\ The Exchange also has a similar late LOC order type for the 
Nasdaq closing cross. See Rule 4702(b)(12).
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    Finally, the Commission believes that the Exchange's proposed 
technical and conforming changes to Rules 4702 and 4752 would allow 
those rules to consistently reflect the proposed 9:29:30 a.m. cutoff 
time for entering late LOO orders and the proposed 9:25 a.m. cutoff 
time for cancellations and modifications of MOO, LOO, and OIO orders, 
and would add clarity with respect to how the Exchange conducts its 
opening process and handles orders in connection with that process.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\47\ that the proposed rule change (SR-NASDAQ-2021-004), as 
modified by Amendment No. 2, be, and hereby is, approved.
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    \47\ 15 U.S.C. 78s(b)(2).
    \48\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\48\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-07197 Filed 4-7-21; 8:45 am]
BILLING CODE 8011-01-P

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