[Federal Register Volume 78, Number 243 (Wednesday, December 18, 2013)]
[Notices]
[Pages 76662-76664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-30044]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-71060; File No. SR-NASDAQ-2013-151]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Delay Implementation of Recent Changes to Rule 4120(c)(7)(C)
December 12, 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 December 4, 2013, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes a proposed rule change to delay
implementation of recent changes to Rule 4120(c)(7)(C) to allow market
participants the opportunity to participate in testing of the new
process
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 delay the implementation date of recently-
approved changes to the halt release process under Rule 4120(c)(7)(C).
On November 14, 2013, the Exchange filed an immediately effective rule
change to amend Rule 4120(c)(7)(C) to modify the parameters for
releasing securities for trading upon the termination of a trading
halt.\3\ The Exchange filed the proposal pursuant to subparagraph
(f)(6) of Rule 19-4 under the Act,\4\ which requires, among other
things, that changes filed pursuant to this subparagraph not become
operative for thirty days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest. The Exchange requested that the
Commission waive the thirty-day operative delay under subparagraph
(f)(6) of Rule 19b-4,\5\ noting that the proposed change is designed to
protect market participants from seemingly erroneous pricing of halted
securities upon resumption of trading, and that, it is possible,
particularly with regard to the IPO release process, for a disruptive
order to skew the release price far from what was anticipated by market
participants based on the indicative prices published by the Exchange
prior to the calculation.\6\ On November 21, 2013, the Commission
issued public
[[Page 76663]]
notice of the filing, granting waiver of the pre-operative delay.\7\
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\3\ Securities Exchange Act Release No. 70911 (November 21,
2013), 78 FR 71011 (November 27, 2013) (SR-NASDAQ-2013-143).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ Id.
\6\ Supra note 3.
\7\ Id.
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The Exchange is proposing to delay implementation of the change for
a brief period to allow for adequate user testing of the new process.
NASDAQ has scheduled a User Acceptance Test (``UAT'') for December 14,
2013, during which NASDAQ will provide market participants with the
opportunity to participate in simulated halts of test securities using
the new process. NASDAQ plans to implement the new process effective
with the beginning of regular trading hours on December 16, 2013.
Although NASDAQ does not anticipate any issues with the test, should
the UAT uncover issues with the new halt release process, NASDAQ will
further delay implementation of the process and provide public notice
thereof prior to the anticipated implementation date of December 16,
2013.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\8\ in general, and with
Section 6(b)(5) of the Act,\9\ in particular, in that it is designed 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
transaction 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, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. The brief delay in implementing the new process as
discussed herein promotes these goals by ensuring market participants
have adequate opportunity to test their systems against the new process
in a simulated trading environment. NASDAQ believes that providing
adequate testing will allow NASDAQ to identify any potential issues
with its revised process, while also allowing market participants to
identify potential problems with their systems. As a consequence, the
proposal will protect investors by avoiding potential market
disruptions, which may occur should the new process not be adequately
tested in a simulated trading environment. The Exchange also believes
that the proposal is consistent with Section 6(b)(5) of the Act because
it will avoid market participant confusion that may be caused by having
a change to a rule that is immediately operative, but not yet
implemented. NASDAQ notes that it continues to believe in the
importance of implementing the amended process as soon as reasonably
practical and will do so upon successful completion of testing as
described above.
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\8\ 15 U.S.C. 78f.
\9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange 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. The
Exchange believes that the proposal is irrelevant to competition
because it is not driven by, and will have no impact on, competition.
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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
Because the 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, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)
thereunder.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Commission is waiving this five-day pre-filing requirement.
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Exchange has asked the Commission to waive the five-day pre-
filing requirement and the 30-day operative delay so that the proposal
may become effective and operative immediately. According to the
Exchange, the proposal is designed to clarify when the changes to Rule
4120(c)(7)(C) that are currently both effective and operative will be
implemented, thus avoiding any market participant confusion regarding
the implementation, and ensuring that NASDAQ's rules are consistent
with its operations. Thus, the Exchange believes that it is in the
interest of protecting investors to briefly delay implementation of the
recent changes to Rule 4120(c)(7)(C). Based on the Exchange's
statements, the Commission believes that waiving the five-day pre-
filing requirement and 30-day operative delay is consistent with the
protection of investors and the public interest. Therefore, the
Commission designates the proposal as operative upon filing.\15\
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\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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. If the Commission takes such action, the
Commission shall institute proceedings under Section 19(b)(2)(B)\16\ of
the Act to determine whether the proposed rule should be approved or
disapproved.
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\16\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal 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-2013-151 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary,
[[Page 76664]]
Securities and Exchange Commission, 100 F Street NE., Washington, DC
20549-1090.
All submissions should refer to File Number SR-NASDAQ-2013-151. 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 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; 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-2013-151 and should
be submitted on or before January 8, 2014.
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\17\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30044 Filed 12-17-13; 8:45 am]
BILLING CODE 8011-01-P