[Federal Register Volume 79, Number 154 (Monday, August 11, 2014)]
[Notices]
[Pages 46892-46894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18876]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-72760; File No. SR-NASDAQ-2014-076]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Utilize a Trade Condition Modifier
August 5, 2014.
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 July 28, 2014, 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.
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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
NASDAQ proposes a rule change to utilize a trade condition modifier
recently adopted by the Joint Self-Regulatory Organization Plan
Governing the Collection, Consolidation and Dissemination of Quotation
and Transaction Information for Nasdaq-Listed Securities Traded on
Exchanges on an Unlisted Trading Privilege Basis (the ``Plan''). NASDAQ
will implement the proposed change on or about August 25, 2014.
The text of the proposed rule change is below. Proposed new
language is in italics.
* * * * *
4754. NASDAQ Closing Cross
No Change.
(a) Processing of Nasdaq Closing Cross. The Nasdaq Closing Cross
will begin at 4:00:00, and post-market hours trading will commence
when the Nasdaq Closing Cross concludes.
(1)-(3) No Change.
[[Page 46893]]
(4) All orders executed in the Nasdaq Closing Cross will be
executed at the Nasdaq Closing Cross price, trade reported
anonymously, and disseminated via the consolidated tape. The Nasdaq
Closing Cross price will be the Nasdaq Official Closing Price for
stocks that participate in the Nasdaq Closing Cross. Fifteen minutes
after the close of trading, NASDAQ will disseminate via the network
processor a trade message setting the NASDAQ Official Closing Price
as the official Consolidated Last Sale Price in each NASDAQ-listed
security in which one round lot or more is executed in the NASDAQ
Closing Cross where the closing price differs from the Consolidated
Last Sale Price.
(5)-(7) No Change.
* * * * *
(b) Not applicable.
(c) Not applicable.
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
The official closing price of NASDAQ-listed securities is a
critical value for millions of investors and the trillions of dollars
they invest in equity securities and assets linked to the value of
equity securities. For example, mutual fund complexes, exchange traded
fund sponsors, and index providers each utilize an official closing
price to value their assets under management or license. Broker-
dealers, including retail brokerages holding millions of investors'
accounts, use official closing prices to display their portfolio
values. Internet portals and online content providers do the same for
more varied uses.
Currently, industry participants use multiple different values to
determine the closing price of a NASDAQ-listed security. Some choose
consolidated data, where the closing price is the last, unmodified,
regular-way trade of the day in each security. Other participants
choose a market-specific closing price, such as the NASDAQ Official
Closing Price (``NOCP'') set forth in NASDAQ Rule 4754. Market
participants can use the exchange-specific closing price from another
exchange, each of which is permitted to disseminate an official closing
price via the network processor for NASDAQ-listed securities. An
exchange-specific closing price is simple to create and disseminate;
markets need only append the ``.M'' modifier to a trade message at or
after the close of trading. This multiplicity of choices has benefits
but it can create ambiguity as well.
The Operating Committee of the Plan has attempted to reduce this
ambiguity by allowing NASDAQ, as the listing market, to create a
clearer official consolidated closing price. On May 8, 2013, the
Operating Committee voted unanimously to approve the creation of the
Corrected Consolidated Close Modifier. According to the written
proposal the Operating Committee approved, the Modifier was intended to
``allow the Listing Markets to establish the official Consolidated Last
price as needed.'' The Modifier will impact the Consolidated Last Sale
and the Consolidated High and Low for each security. It will not impact
statistics for individual exchanges, such as the Participant Open,
Last, High/Low or Volume. Use of the Modifier will not impact
Consolidated Volume because it will be appended to a trade message with
a volume of zero shares. For NASDAQ-listed securities it can be
disseminated once and only once per day per symbol.
NASDAQ plans to implement its use of the Modifier in a simple,
straightforward manner. At fifteen minutes after the close each day,
NASDAQ will disseminate to the network processor one trade message with
the Modifier appended for each security in which at least one round lot
was executed in the NASDAQ Closing Cross at a price that differs from
the consolidated closing price reported by the network processor. The
network processor will then disseminate the trade messages to market
participants via the UTP Trade Data Feed. The trade message for each
security will be based on the price of the NOCP and will have a volume
of zero shares as required. NASDAQ already disseminates the NOCP on its
proprietary data feeds, including NASDAQ Last Sale, NASDAQ Basic and
NASDAQ TotalView so no change to those feeds is necessary.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \3\ in general, and furthers the objectives of Section
6(b)(5) of the Act \4\ in particular, in that the proposal 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. The proposal supports these policies in that it
establishes more clearly an official consolidated closing price for
NASDAQ-listed securities. Clarity regarding this value will benefit
investors of different types and strategies, whether long-term or
short-term focused, professional or non-professional status, or
individual, member or institutional. The official consolidated closing
price will be widely disseminated, clearly marked, and available at no
additional cost.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
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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. To the contrary,
NASDAQ's proposal merely implements a unanimous decision of the
Operating Committee of the Plan that is designed to benefit investors
equally without regard to 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
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 if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \5\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\6\
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\5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 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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[[Page 46894]]
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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or disapproved.
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-2014-076 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-2014-076. 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 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 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-2014-076, and should be submitted on or before
September 2, 2014.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-18876 Filed 8-8-14; 8:45 am]
BILLING CODE 8011-01-P