[Federal Register Volume 77, Number 250 (Monday, December 31, 2012)]
[Notices]
[Pages 77165-77166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-31413]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68528; File No. SR-NASDAQ-2012-140]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Retire the Automated Quote Management Functionality Described Under
Rules 4613(a)(2)(F) and (G), and Make Conforming Changes to Rule
4751(f)(15)
December 21, 2012.
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 December 17, 2012, The NASDAQ Stock Market LLC (``NASDAQ'' or
the ``Exchange'') 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to retire the automated quote management
functionality described under Rules 4613(a)(2)(F) and (G) on January
16, 2013, and make conforming changes to Rule 4751(f)(15). The text of
the proposed rule change is available at http://nasdaq.cchwallstreet.com, at NASDAQ's principal office, 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, NASDAQ included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of those statements may be examined at 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 parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
On August 2, 2012, the Commission approved the Exchange's new
Market Maker Peg Order, which was designed to replace the automated
quotation refresh functionality (``AQR'') provided to Exchange market
makers under Rules 4613(a)(2)(F) and (G).\5\ The Exchange committed to
sunset AQR three months after fully implementing the Market Maker Peg
Order.\6\ On October 15, 2012, the Exchange completed the
implementation of the Market Maker Peg Order and, accordingly, is
proposing to delete the text under Rule 4613(a)(2)(F) and (G) from the
NASDAQ rulebook, effective January 16, 2013, thereby retiring AQR.\7\
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\5\ Securities Exchange Act Release No. 67584 (August 2, 2012),
77 FR 47472 (August 8, 2012) (SR-NASDAQ-2012-066).
\6\ Id. at 47473 n 4.
\7\ On October 9, 2012, NASDAQ announced that the Market Maker
Peg Order was available and that it would retire AQR by the end of
2012. See Equity Technical Update 2012-31 (http://www.nasdaqtrader.com/TraderNews.aspx?id=ETU2012-31). Because the
Market Maker Peg Order was not made available to QIX protocol users
until October 15, 2012 and therefore not fully implemented, NASDAQ
is retiring AQR effective January 16, 2013, three months from the
full implementation of the Market Maker Peg Order.
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The Exchange is also proposing to amend Rule 4751(f)(15) to include
language from Rule 4613(a)(2)(F), which is currently referenced only by
citation in the rule. The proposed language taken from Rule
4613(a)(2)(F) merely provides the percentage move necessary to trigger
a repricing of a Market Maker Peg Order, and in no way changes how the
Market Maker Peg Order operates.
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act,\8\ which requires the rules of an exchange 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. The
Exchange believes that the proposed rule meets these requirements in
that it eliminates a duplicative function, AQR, which has been replaced
with a new order type that allows member firms to better meet their
minimum market maker quotation requirements and also comply with the
regulatory requirements of the Market Access Rule and Regulation SHO.
In seeking approval of the Market Maker Peg Order,\9\ the Exchange
committed to retiring AQR at the conclusion of a three-month transition
period and this proposed change merely effectuates that change.
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\8\ 15 U.S.C. 78f(b)(5).
\9\ See, supra note 7.
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
[[Page 77166]]
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.
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 after the date of the filing, 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)
\11\ thereunder.
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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)
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.
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At any time within 60 days of the filing of such 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.
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 (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-NASDAQ-2012-140 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2012-140. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2012-140 and should
be submitted on or before January 22, 2013.
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\12\ 17 C.F.R. 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-31413 Filed 12-28-12; 8:45 am]
BILLING CODE 8011-01-P