[Federal Register Volume 78, Number 122 (Tuesday, June 25, 2013)]
[Notices]
[Pages 38089-38090]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15083]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69801; File No. SR-NASDAQ-2013-086]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 4120 To Adopt a Modification in the Process for Initiating
Trading of a Security That Is the Subject of an Initial Public Offering
on NASDAQ
June 19, 2013.
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 June 13, 2013, The NASDAQ Stock Market LLC (``NASDAQ'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change as described in Items I, II and
III 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
NASDAQ proposes to amend Rule 4120 to adopt a modification in the
process for initiating trading of a security that is the subject of an
initial public offering (an ``IPO'') on NASDAQ. NASDAQ proposes to
implement the proposed rule change on a date that is on, or shortly
after, the expiration of the pre-operative delay provided for in Rule
19b-4(f)(6)(iii).\3\ The text of the proposed rule change is available
on the Exchange's Web site at http://nasdaq.cchwallstreet.com, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------
\3\ 17 CFR 242.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
In 2012, NASDAQ modified its process for commencing trading of a
security that is the subject of an IPO on NASDAQ by allowing market
participants to enter orders to be held in an undisplayed state until
the commencement of the Display-Only Period that occurs prior to the
IPO.\4\ Pursuant to the change made last year, Rule 4120(c)(7)(B)
currently provides that market participants may enter Market Hours Day
Orders (``MDAY Orders'') in a security that is the subject of an IPO on
NASDAQ and designate such orders to be held until the beginning of the
Display-Only Period. Such orders will be held in an undisplayed state
until the beginning of the Display-Only Period, at which time they will
be entered into the system. NASDAQ is proposing to modify the rule
slightly by providing that any order in a security that is the subject
of an IPO, regardless of its time-in-force, may be designated to be
held until the beginning of the Display-Only Period. NASDAQ believes
that the quality of its process for commencing IPO trading will be
enhanced by the change, which may result in a higher level of order
interaction at the open by allowing more orders to interact at the
commencement of trading.
---------------------------------------------------------------------------
\4\ Securities Exchange Act Release No. 66652 (March 23, 2012),
77 FR 13129 (March 29, 2012) (SR-NASDAQ-2012-038).
---------------------------------------------------------------------------
2. Statutory Basis
NASDAQ believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\5\ in general, and with Section
6(b)(5) of the Act,\6\ in particular, in that the proposal is 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 regulating, clearing, settling,
processing information with respect to, and 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. Specifically, NASDAQ
believes that the proposed rule change will result in a greater number
of orders being entered prior to commencement of trading of IPO
securities, resulting in a higher level of order interaction at the
open. Thus, NASDAQ believes that the change will remove impediments to
and perfect the mechanism of a free and open market.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f.
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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. Specifically,
NASDAQ believes that this change will provide for a greater number of
orders being entered prior to commencement of trading, resulting in a
higher level of order interaction. NASDAQ believes that this change
will promote competition by enhancing the attractiveness of NASDAQ as a
trading venue through higher order fill rates and more complete price
discovery. Moreover, because the change will not affect the
availability or price of goods or services offered by NASDAQ or others,
it will not impose any burden on competition.
[[Page 38090]]
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 from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\ At any time within 60
days of the filing of the proposed rule change, the Commission
summarily may temporarily suspend such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
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-2013-086 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-2013-086. 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 offices of
NASDAQ. 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-2013-086, and should be submitted on or before July 16, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-15083 Filed 6-24-13; 8:45 am]
BILLING CODE 8011-01-P