Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Market Maker Requirements in Equity 2 Section 5 and Equity 2 Section 11, 10419-10420 [2023-03333]

Download as PDF Federal Register / Vol. 88, No. 33 / Friday, February 17, 2023 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–96903; File No. SR– NASDAQ–2023–001] Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Market Maker Requirements in Equity 2 Section 5 and Equity 2 Section 11 February 13, 2023. 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 January 31, 2023, The Nasdaq Stock Market LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Equity 2, 5 and Section 11 related to certain Market Maker requirements, as described further below. The text of the proposed rule change is available on the Exchange’s website at https://listingcenter.nasdaq.com/ rulebook/bx/rules, at the principal office of the Exchange, and at the Commission’s Public Reference Room. lotter on DSK11XQN23PROD with NOTICES1 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 On December 2, 2022, Nasdaq proposed changes to amend certain 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Sep<11>2014 17:13 Feb 16, 2023 Jkt 259001 Nasdaq Market Maker requirements. These changes were published in the Federal Register on December 21, 2022 (‘‘Initial Filing’’) and were immediately effective on January 2, 2023.3 However, the system updates necessary to implement the changes in the Initial Filing have not been completed. The updates will be completed by Q3 2023. Due to the delay in these system updates, Nasdaq is proposing to reinsert certain rule text changes into Equity 2 Section 5(a)(2) and Section 11(a). More specifically, the Exchange is reinserting previously deleted references to a Market Maker’s and an Electronic Communications Network’s (‘‘ECN’’) use of a Primary MPID and additional MPIDs (‘‘Supplemental MPIDs’’) in Equity 2, Section 5(a)(2)(J) and Section 5(a)(2)(K). Although the Exchange has eliminated the distinction between Primary and Supplemental MPIDs, the technology updates that are required to remove the distinction from its system are expected to be completed in Q3 2023. To ensure that the rulebook is compliant with current system operations, the Exchange is proposing to reinsert the previously deleted references. Additionally, the Exchange is proposing to amend Equity 2, Section 11(a). Specifically, the Exchange is proposing to amend the re-registration waiting period for Nasdaq Market Makers that terminate registration in a security. In the Initial Filing, the Exchange reduced the re-registration waiting period from twenty business days to 5 business days.4 However, the Exchange is proposing to roll back the rule text language to twenty business days because the system updates that are required to reduce the re-registration waiting period to 5 business days are not expected to be completed until Q3 2023. The Exchange represents that a rollback of the re-registration waiting period will not have an impact on any Nasdaq Market Maker because none have terminated registration in a security since the Initial Filing became effective. The Exchange also represents that no Nasdaq Market Maker will be affected by the rollback of the distinction between Primary and Secondary MPIDs because the Exchange has eliminated the distinction between Primary and Supplemental MPIDs.5 The proposed changes are identical to the rules previously removed from Equity 2, Section 5(a)(2)(J) and Section 5(a)(2)(K) 3 See Securities Exchange Act Release No. 96507 (December 15, 2022), 87 FR 78154 (December 21, 2022) (‘‘Initial Filing’’). 4 See Initial Filing at 78154. 5 Id. at 78155. PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 10419 in the Initial Filing. Similarly, the proposed change to the re-registration waiting period reinstates the time period that was previously removed from Equity 2, Section 11(a). The Exchange is not proposing to modify any other aspect of the Initial Filing and no market participants has been affected by the proposed amendments to reinstate the rule text related to a Market Maker’s and an ECN’s use of a Primary MPID and Supplemental MPIDs. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,6 in general, and furthers the objectives of Section 6(b)(5) of the Act,7 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. As discussed above, the Exchange has already eliminated the distinction between Primary and Supplemental MPIDs. Because the Exchange has an obligation to ensure that its rule text aligns with the operation of its system, the proposed rule changes are intended to remove any potential impediments to a free and open market and a national market system by keeping the previous rule text in place until technology updates to remove the distinction from our system are finalized. Similarly, no market participants have been affected by the proposal to revert the re-registration waiting period for Nasdaq Market Makers that terminate registration in a security.8 The proposed rule change will remove any potential impediments to a free and open market and a national market system by allowing the Exchange to maintain compliance with its obligation to ensure that its rule text aligns with the operation of its system. When the system updates are ready, the Exchange will submit a subsequent rule filing to reinstate the reverted changes from the Initial Filing. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule changes will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. As explained above, the purpose of this proposal is to 6 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 8 Since the Initial Filing became effective, no market makers have terminated registration from a security. 7 15 E:\FR\FM\17FEN1.SGM 17FEN1 10420 Federal Register / Vol. 88, No. 33 / Friday, February 17, 2023 / Notices add certain rule text changes that were prematurely removed from Equity 2 Section 5(a)(2) and Section 11(a). Furthermore, as discussed above, the Exchange has represented that no Market Maker has been affected by the distinction between Primary and Supplemental MPIDs because the Exchange has eliminated the distinction between Primary and Supplemental MPIDs, and no market maker has terminated registration or attempted to re-register in a security since the Initial Filing became operative on January 2, 2023. Therefore, the Exchange does not expect reinserting the proposed rule text to place any burden on competition. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action lotter on DSK11XQN23PROD with NOTICES1 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)(iii) of the Act 9 and subparagraph (f)(6) of Rule 19b–4 thereunder.10 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative prior to 30 days after the date of filing. Rule 19b–4(f)(6)(iii), however, permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the operative delay so that the proposal may become operative upon filing in order to permit the Exchange to immediately reflect rules that align with Nasdaq’s current system capabilities until Nasdaq system updates are completed. The Commission thus believes that waiver of the operative delay is consistent with the protection of investors and the public interest. Accordingly, the U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. 10 17 VerDate Sep<11>2014 17:13 Feb 16, 2023 Jkt 259001 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–2023–001, and should be submitted on or before March 10, 2023. IV. Solicitation of Comments For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Sherry R. Haywood, Assistant Secretary. 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: • 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–2023–001 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–2023–001. 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 11 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 Frm 00140 Fmt 4703 [FR Doc. 2023–03333 Filed 2–16–23; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION Electronic Comments No written comments were either solicited or received. 9 15 Commission hereby waives the operative delay and designates the proposal operative upon filing.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: (i) necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) otherwise in furtherance of the purposes of the Act. Sfmt 4703 Reporting and Recordkeeping Requirements Under OMB Review Small Business Administration. 30-Day notice. AGENCY: ACTION: The Small Business Administration (SBA) is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act and OMB procedures, SBA is publishing this notice to allow all interested member of the public an additional 30 days to provide comments on the proposed collection of information. DATES: Submit comments on or before March 20, 2023. ADDRESSES: Written comments and recommendations for this information collection request should be sent within 30 days of publication of this notice to www.reginfo.gov/public/do/PRAMain. Find this particular information collection request by selecting ‘‘Small Business Administration’’; ‘‘Currently Under Review,’’ then select the ‘‘Only Show ICR for Public Comment’’ checkbox. This information collection can be identified by title and/or OMB Control Number. FOR FURTHER INFORMATION CONTACT: You may obtain a copy of the information collection and supporting documents from the Agency Clearance Office at Curtis.Rich@sba.gov; (202) 205–7030, or from www.reginfo.gov/public/do/ PRAMain. SUPPLEMENTARY INFORMATION: In accordance with regulations and policy, the Small Business Development SUMMARY: 12 17 E:\FR\FM\17FEN1.SGM CFR 200.30–3(a)(12), (59). 17FEN1

Agencies

[Federal Register Volume 88, Number 33 (Friday, February 17, 2023)]
[Notices]
[Pages 10419-10420]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03333]



[[Page 10419]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96903; File No. SR-NASDAQ-2023-001]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Market Maker Requirements in Equity 2 Section 5 and Equity 2 
Section 11

February 13, 2023.
    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 January 31, 2023, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \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 amend Equity 2, 5 and Section 11 related 
to certain Market Maker requirements, as described further below.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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
    On December 2, 2022, Nasdaq proposed changes to amend certain 
Nasdaq Market Maker requirements. These changes were published in the 
Federal Register on December 21, 2022 (``Initial Filing'') and were 
immediately effective on January 2, 2023.\3\ However, the system 
updates necessary to implement the changes in the Initial Filing have 
not been completed. The updates will be completed by Q3 2023.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 96507 (December 15, 
2022), 87 FR 78154 (December 21, 2022) (``Initial Filing'').
---------------------------------------------------------------------------

    Due to the delay in these system updates, Nasdaq is proposing to 
reinsert certain rule text changes into Equity 2 Section 5(a)(2) and 
Section 11(a). More specifically, the Exchange is reinserting 
previously deleted references to a Market Maker's and an Electronic 
Communications Network's (``ECN'') use of a Primary MPID and additional 
MPIDs (``Supplemental MPIDs'') in Equity 2, Section 5(a)(2)(J) and 
Section 5(a)(2)(K). Although the Exchange has eliminated the 
distinction between Primary and Supplemental MPIDs, the technology 
updates that are required to remove the distinction from its system are 
expected to be completed in Q3 2023. To ensure that the rulebook is 
compliant with current system operations, the Exchange is proposing to 
reinsert the previously deleted references.
    Additionally, the Exchange is proposing to amend Equity 2, Section 
11(a). Specifically, the Exchange is proposing to amend the re-
registration waiting period for Nasdaq Market Makers that terminate 
registration in a security. In the Initial Filing, the Exchange reduced 
the re-registration waiting period from twenty business days to 5 
business days.\4\ However, the Exchange is proposing to roll back the 
rule text language to twenty business days because the system updates 
that are required to reduce the re-registration waiting period to 5 
business days are not expected to be completed until Q3 2023. The 
Exchange represents that a rollback of the re-registration waiting 
period will not have an impact on any Nasdaq Market Maker because none 
have terminated registration in a security since the Initial Filing 
became effective. The Exchange also represents that no Nasdaq Market 
Maker will be affected by the rollback of the distinction between 
Primary and Secondary MPIDs because the Exchange has eliminated the 
distinction between Primary and Supplemental MPIDs.\5\ The proposed 
changes are identical to the rules previously removed from Equity 2, 
Section 5(a)(2)(J) and Section 5(a)(2)(K) in the Initial Filing. 
Similarly, the proposed change to the re-registration waiting period 
reinstates the time period that was previously removed from Equity 2, 
Section 11(a).
---------------------------------------------------------------------------

    \4\ See Initial Filing at 78154.
    \5\ Id. at 78155.
---------------------------------------------------------------------------

    The Exchange is not proposing to modify any other aspect of the 
Initial Filing and no market participants has been affected by the 
proposed amendments to reinstate the rule text related to a Market 
Maker's and an ECN's use of a Primary MPID and Supplemental MPIDs.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\7\ 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    As discussed above, the Exchange has already eliminated the 
distinction between Primary and Supplemental MPIDs. Because the 
Exchange has an obligation to ensure that its rule text aligns with the 
operation of its system, the proposed rule changes are intended to 
remove any potential impediments to a free and open market and a 
national market system by keeping the previous rule text in place until 
technology updates to remove the distinction from our system are 
finalized.
    Similarly, no market participants have been affected by the 
proposal to revert the re-registration waiting period for Nasdaq Market 
Makers that terminate registration in a security.\8\ The proposed rule 
change will remove any potential impediments to a free and open market 
and a national market system by allowing the Exchange to maintain 
compliance with its obligation to ensure that its rule text aligns with 
the operation of its system. When the system updates are ready, the 
Exchange will submit a subsequent rule filing to reinstate the reverted 
changes from the Initial Filing.
---------------------------------------------------------------------------

    \8\ Since the Initial Filing became effective, no market makers 
have terminated registration from a security.
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. As explained above, the purpose 
of this proposal is to

[[Page 10420]]

add certain rule text changes that were prematurely removed from Equity 
2 Section 5(a)(2) and Section 11(a). Furthermore, as discussed above, 
the Exchange has represented that no Market Maker has been affected by 
the distinction between Primary and Supplemental MPIDs because the 
Exchange has eliminated the distinction between Primary and 
Supplemental MPIDs, and no market maker has terminated registration or 
attempted to re-register in a security since the Initial Filing became 
operative on January 2, 2023. Therefore, the Exchange does not expect 
reinserting the proposed rule text to place any burden on competition.

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)(iii) of the Act \9\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of filing. Rule 
19b-4(f)(6)(iii), however, permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the operative delay so that the proposal may become 
operative upon filing in order to permit the Exchange to immediately 
reflect rules that align with Nasdaq's current system capabilities 
until Nasdaq system updates are completed. The Commission thus believes 
that waiver of the operative delay is consistent with the protection of 
investors and the public interest. Accordingly, the Commission hereby 
waives the operative delay and designates the proposal operative upon 
filing.\11\
---------------------------------------------------------------------------

    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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: (i) 
necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act.

IV. Solicitation of Comments

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

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-2023-001 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-2023-001. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). 
Copies of the submission, all subsequent amendments, all written 
statements with respect to the proposed rule change that are filed with 
the Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for website viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m. Copies of the filing also will be available for inspection 
and copying at the principal office of the Exchange. All comments 
received will be posted without change. Persons submitting comments are 
cautioned that we do not redact or edit personal identifying 
information from comment submissions. You should submit only 
information that you wish to make available publicly. All submissions 
should refer to File Number SR-NASDAQ-2023-001, and should be submitted 
on or before March 10, 2023.
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12), (59).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03333 Filed 2-16-23; 8:45 am]
BILLING CODE 8011-01-P
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