Notice2021-23670
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing of Amendment No. 1 and Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 1, To Establish the “Extended Trading Close” and a New “Extended Trading Close” Order Type
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
November 1, 2021
Issuing agencies
Securities and Exchange Commission
Full Text
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[Federal Register Volume 86, Number 208 (Monday, November 1, 2021)]
[Notices]
[Pages 60318-60322]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2021-23670]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93428; File No. SR-NASDAQ-2021-040]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Amendment No. 1 and Order Instituting Proceedings
To Determine Whether To Approve or Disapprove a Proposed Rule Change,
as Modified by Amendment No. 1, To Establish the ``Extended Trading
Close'' and a New ``Extended Trading Close'' Order Type
October 26, 2021.
I. Introduction
On July 12, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to add Equity 4, Rule (``Rule'') 4755 and amend
Rules 4702 and 4703 to establish the ``Extended Trading Close,'' as
well as the ``ETC Eligible LOC'' and ``Extended Trading Close'' order
types. The proposed rule change was published for comment in the
Federal Register on July 28, 2021.\3\ On September 9, 2021, pursuant to
Section 19(b)(2) of the Act,\4\ the Commission designated a longer
period within which to approve the proposed rule change, disapprove the
proposed rule change, or institute proceedings to determine whether to
disapprove the proposed rule change.\5\ On October 25, 2021, the
Exchange filed Amendment No. 1 to the proposed rule change, which
amended and superseded the proposed rule change as originally filed.\6\
The Commission is publishing this notice and order to solicit comments
on the proposed rule change, as modified by Amendment No. 1, from
interested persons and to institute proceedings pursuant to Section
19(b)(2)(B) of the Act \7\ to determine whether to approve or
disapprove the proposed rule change, as modified by Amendment No. 1.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 92466 (July 22,
2021), 86 FR 40667. The comment letters received on the proposed
rule change are available on the Commission's website at: <a href="https://www.sec.gov/comments/sr-nasdaq-2021-040/srnasdaq2021040.htm">https://www.sec.gov/comments/sr-nasdaq-2021-040/srnasdaq2021040.htm</a>.
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 92905, 86 FR 51390
(September 15, 2021). The Commission designated October 26, 2021 as
the date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
\6\ In Amendment No. 1, the Exchange modified the scenarios in
which executions in the Extended Trading Close would be suspended,
and made other conforming and clarifying changes throughout the
proposed rule change. Amendment No. 1 is available on the
Commission's website at: <a href="https://www.sec.gov/comments/sr-nasdaq-2021-040/srnasdaq2021040.htm">https://www.sec.gov/comments/sr-nasdaq-2021-040/srnasdaq2021040.htm</a>.
\7\ 15 U.S.C. 78s(b)(2)(B).
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II. Description of the Proposal
The Exchange proposes to adopt the Extended Trading Close
(``ETC''), which would be a process during which eligible orders in
Nasdaq-listed securities \8\ may match and execute at the Nasdaq
official closing price (``NOCP''), as determined by the Nasdaq closing
cross or the LULD closing cross (together, the ``Closing Cross''), for
a five-minute period immediately following the Closing Cross.\9\
According to the Exchange, the ETC would be complementary to the
Closing Cross and is not intended or expected to be a substitute for
the Closing Cross,\10\ and it would allow participants an additional
[[Page 60319]]
opportunity to access liquidity in Nasdaq-listed securities at the NOCP
for a limited period of time after the Closing Cross concludes.\11\
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\8\ The Exchange states that it is appropriate to limit
participation in the ETC to orders in Nasdaq-listed securities,
given the Exchange's role as the primary listing market and its
commitment in investing in and enhancing the Closing Cross (as
defined herein) for Nasdaq-listed securities. See Amendment No. 1 at
20. The Exchange also states that the vast majority of participants
looking to trade at the closing price participate in the primary
listing market's closing auction and do not route orders to non-
primary listing market destinations. See id.
\9\ See proposed Rule 4755(a)(5).
\10\ See Amendment No. 1 at 18. The Exchange states that it does
not expect the ETC to have an impact on participation in the Closing
Cross, and that a number of off-exchange venues already offer their
participants the ability to receive the NOCP after the Closing
Cross. See id.
\11\ See id. at 4. The Exchange states that, for participants
with limit-on-close (``LOC'') orders that do not execute in full in
the Closing Cross, the ETC would give these LOC orders another
opportunity to execute at the NOCP before the after-market trading
price moves far away from it. See id. at 15. The Exchange also
states that, with the ETC, participants would have an opportunity to
access liquidity at the NOCP even if they did not participate in the
Closing Cross. See id. According to the Exchange, by increasing
opportunities for participants to execute their orders at the NOCP,
it would allow them to execute sizable orders without market impact
as a complement to the Closing Cross and as an alternative to after-
hours trading. See id.
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As proposed, only ``ETC Orders'' and ``ETC Eligible LOC Orders''
(together, ``ETC Eligible Orders'') would be eligible to participate in
the ETC.\12\ An ETC Order would be a new order type for Nasdaq-listed
securities that may be executed only during the ETC and only at the
NOCP as determined by the Closing Cross.\13\ An ETC Order may be
entered, cancelled, or modified between the time when the ETC commences
and ends.\14\ If an ETC Order is not fully executed at the conclusion
of the ETC, then any unexecuted portion of the order would be
cancelled.\15\ An ETC Eligible LOC Order would be a LOC order for a
Nasdaq-listed security entered through RASH or FIX \16\ that did not
fully execute during the Closing Cross, and would participate in the
ETC if the NOCP, as determined by the Closing Cross, is at or within
its limit price.\17\ A participant may choose to disable a LOC order
from participating in the ETC, in which case the system would cancel
any shares of the LOC order that remain unexecuted after the Closing
Cross.\18\ In addition, if a participant enters a time-in-force that
continues after the time of the Closing Cross to a LOC order (i.e.,
closing cross/extended hours order), then such order would bypass the
ETC.\19\ Any unexecuted portion of an ETC Eligible LOC Order may be
cancelled or modified by the participant at any time during the ETC,
and any unexecuted portion of an ETC Eligible LOC Order at the
conclusion of the ETC would be cancelled.\20\
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\12\ ETC Orders and ETC Eligible LOC Orders may only execute
against other ETC Orders and ETC Eligible LOC Orders. See proposed
Rules 4702(b)(17)(A) and 4702(b)(12)(A).
\13\ See proposed Rule 4702(b)(17)(A). An ETC Order may be
assigned a minimum quantity order attribute, and the minimum
quantity condition may be satisfied only by execution against one or
more orders, each of which must have a size that satisfies the
minimum quantity condition. See proposed Rule 4702(b)(17)(B). See
also Amendment No. 1 at 13-14 n.18. If no orders in the ETC satisfy
a minimum quantity condition for an ETC Order, then the ETC Order
with a minimum quantity condition would rest on the Nasdaq book in
time priority unless and until there is an order that can satisfy
the minimum quantity condition to allow for execution of the ETC
Order; if no such order is present in the ETC at its conclusion,
then the ETC Order would cancel. See proposed Rule 4702(b)(17)(B).
Moreover, an ETC Order may be referred to as having a time-in-force
of ``ETC.'' See proposed Rule 4703(a)(8).
\14\ The system would reject an ETC Order that is submitted
prior to the commencement of the ETC. See proposed Rule
4702(b)(17)(A). In addition, the system would not accept an ETC
Order entered on any day when insufficient interest exists in the
system to conduct a Closing Cross for that security, or when the
Exchange invokes contingency procedures due to a disruption that
prevents the execution of the Closing Cross. See id.
\15\ See id.
\16\ The Exchange states that it typically assumes a more active
role in managing the order flow submitted by users of the RASH and
FIX protocols, and in contrast, users of the OUCH and FLITE
protocols generally assume a more active role in managing their
order flow. See Amendment No. 1 at 15-16.
\17\ See proposed Rule 4702(b)(12)(A). The Exchange also
proposes to amend Rule 4702(b)(12) to describe the participation of
LOC orders in the LULD closing cross.
\18\ See id. Post-only orders, midpoint peg post-only orders,
supplemental orders, and market maker peg orders may not operate as
ETC Eligible LOC Orders, and ETC Eligible LOC Orders would be
rejected if they are assigned a pegging attribute. See Amendment No.
1 at 9 n.14.
\19\ See proposed Rule 4702(b)(12)(B).
\20\ See proposed Rule 4702(b)(12)(A).
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As proposed, the ETC would commence upon the conclusion of the
Closing Cross and end at 4:05 p.m. (or 1:05 p.m. on a day when the
Exchange closes early).\21\ The system would match and execute ETC
Eligible Orders continuously throughout the ETC, in time priority order
based on the time the system received each order into the ETC,\22\ and
at the NOCP as determined by the Closing Cross.\23\ If fewer than all
shares of ETC Eligible Orders are executed by the conclusion of the
ETC, then the system would cancel any unexecuted portions of such
orders.\24\
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\21\ As proposed, the ETC would not occur for a security on any
day when insufficient interest exists in the Exchange system to
conduct the Closing Cross for that security or when the Exchange
invokes contingency procedures due to a disruption that prevents the
execution of the Closing Cross. See proposed Rule 4755(b). Moreover,
the Exchange would cancel executions in a security that occur in the
ETC if the Exchange nullifies the Closing Cross in that security
pursuant to the rules governing clearly erroneous transactions. See
id. The Exchange also states that if short sale orders in securities
subject to Regulation SHO are permitted to execute in the Closing
Cross pursuant to Rule 201 of Regulation SHO, then the system would
also permit short sale executions in such securities to occur in the
ETC; whereas the system would reject short sale orders in securities
if short sale orders in such securities were not permitted to
execute in the Closing Cross. See Amendment No. 1 at 8 n.11.
Moreover, the restrictions of Rule 201 of Regulation SHO will apply
to the ETC to the extent that the current national best bid is being
calculated, collected, and disseminated for securities. See id.
\22\ ETC Eligible LOC Orders would receive new timestamps upon
entry into the ETC and prioritized amongst each other and ETC Orders
based on the time the system received each order into the ETC. See
Amendment No. 1 at 9. Specifically, the system would submit ETC
Eligible LOC Orders for participation in the ETC, and would assign
them new timestamps, in random order. See id. at 9 n.15. Therefore,
ETC Eligible LOC Orders may not necessarily enter the ETC with the
same relative priority that they had prior to the ETC. See id.
Moreover, due to the time required for the system to process ETC
Eligible LOC Orders for participation in the ETC, it is possible
that an ETC Eligible LOC Order would enter the ETC with a lower time
priority than an ETC Order entered after the Closing Cross
concludes. See id.
\23\ See proposed Rule 4755(b)(2). All ETC Eligible Orders
executed in the ETC would be trade reported anonymously and
disseminated via the consolidated tape. See proposed Rule
4755(b)(5).
\24\ See proposed Rule 4755(b)(4).
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Also as proposed, beginning at 4:00:05 p.m. (or 1:00:05 p.m. on a
day when the Exchange closes early), the Exchange would disseminate by
electronic means an ETC order imbalance indicator every 5 seconds until
the ETC concludes.\25\ The ETC order imbalance indicator would
disseminate the following information: (a) Symbol; (b) the number of
shares of ETC Eligible Orders that have been matched and executed at
the NOCP during the ETC, as of the time of dissemination of the ETC
order imbalance indicator; (c) the size of any ETC imbalance \26\
(exclusive of orders with minimum quantity instructions \27\); and (d)
the buy or sell direction of any ETC imbalance.\28\
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\25\ See proposed Rule 4755(b)(1).
\26\ ETC imbalance would mean the number of shares of buy or
sell ETC Eligible Orders that have not been matched during the ETC.
See proposed Rule 4755(a)(4).
\27\ The Exchange states that it proposes to exclude ETC
Eligible Orders with minimum quantity instructions from the
calculation of the size of the ETC imbalance because the size of
such orders may be misleading to participants, given that such
orders would rest on the book and would not execute if the minimum
quantity instruction was not satisfied. See Amendment No. 1 at 18-
19.
\28\ See proposed Rule 4755(a)(8).
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Moreover, as proposed, the Exchange system would suspend execution
of ETC Eligible Orders in a security whenever it detects: (i) An order
in that same security resting on the Nasdaq continuous book in after-
hours trading \29\ with a bid (offer) price that is higher than (lower
than) the NOCP for that security, as determined by the Closing Cross;
\30\ or (ii) the after-hours trading last sale price, or the best
after-hours trading bid (offer) price, of the
[[Page 60320]]
security other than on the Nasdaq continuous book is either more than
0.5% or $0.01 higher than (lower than) the NOCP for that security as
determined by the Closing Cross, whichever is greater.\31\ The system
would resume execution of ETC Eligible Orders in a security in scenario
(i) if and when the system determines, during the ETC, that the Nasdaq
continuous book in after-hours trading is clear of resting orders in
that security with a bid (offer) price that is higher than (lower than)
the NOCP for that security, as determined by the Closing Cross.\32\ The
system would resume execution of ETC Eligible Orders in a security in
scenario (ii) if and when the after-hours trading last sale price or
the best after-hours trading bid (offer) price of the underlying
security (other than on the Nasdaq continuous book) returns to within
the greater of the 0.5% or $0.01 thresholds during the ETC.\33\ If
execution of ETC Eligible Orders remains suspended as of the conclusion
of the ETC, then the system would cancel any remaining unexecuted ETC
Eligible Orders in that security.\34\
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\29\ See proposed Rule 4755(a)(1) (defining ``after hours
trading'' to mean trading in a Nasdaq-listed security that commences
immediately following the conclusion of the Closing Cross, during
post-market hours, as that term is defined in Equity 1, Section
1(a)(9)).
\30\ According to the Exchange, this limitation would prevent
the Exchange from trading through orders on its own continuous book
in after-hours trading that do not participate in the ETC. See
Amendment No. 1 at 6.
\31\ See proposed Rule 4755(b)(3). According to the Exchange,
this limitation would help to mitigate the risk that orders in
Nasdaq-listed securities that participate in the ETC would execute
at a price that is no longer reflective of the value of the security
on trading venues other than Nasdaq. See Amendment No. 1 at 7.
\32\ See proposed Rule 4755(b)(3).
\33\ See id.
\34\ See id.
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The Exchange represents that it will surveil the ETC for any unfair
or manipulative trading practices.\35\
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\35\ See Amendment No. 1 at 19. As proposed, the Exchange
intends to introduce the ETC and begin accepting ETC Orders during
the Fourth Quarter of 2021. See id. at 14. The Exchange states that,
at least 30 days prior to launching the ETC and beginning to accept
ETC Orders, it would publish a Nasdaq Trader Alert announcing the
launch date. See id.
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III. Summary of Comments and the Exchange's Response
The Commission received a comment letter opposing the proposal.\36\
This commenter states that the Exchange has not effectively identified
the purpose, use case, or client demand for the ETC,\37\ and expresses
the concern that the ETC would diminish the quality of the Closing
Cross process, encourage harmful arbitrage behavior, and negatively
impact aspects of the continuous market.\38\
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\36\ See letter from Mehmet Kinak, Global Head of Systematic
Trading & Market Structure and Jonathan Siegel, Senior Legal
Counsel--Legislative & Regulatory Affairs, T. Rowe Price, to Vanessa
Countryman, Secretary, Commission, dated August 18, 2021.
\37\ See id. at 1.
\38\ See id. This commenter also provides alternative
recommendations for the closing auction. See id. at 3.
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Specifically, this commenter does not believe that the ETC would
enhance the Closing Cross process, or improve price discovery or
liquidity in the Closing Cross.\39\ Rather, this commenter believes
that the ETC could detract from the Closing Cross because some market
participants would withhold their interest from the Closing Cross and
refrain from submitting orders until they know the NOCP.\40\ This,
according to the commenter, would detract from the robustness and
quality of the closing price.\41\
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\39\ See id. at 1. This commenter also distinguishes the ETC
from off-exchange trading venues' mechanisms that allow their
participants to receive the NOCP, and states that these other
mechanisms are pre-arranged matched trades or guaranteed close
trades that (unlike the ETC) are received prior to the Closing Cross
and the determination of the closing price. See id. at 2. This
commenter also states that when a trade is sent to an off-exchange
mechanism after the Closing Cross, it is generally a trade that is
executed by a broker in a principal capacity, and these transactions
tend to be ``clean-up'' trades for orders that did not complete in
the auction or trades to facilitate other specific needs of a
client. See id. The commenter believes that these existing clean-up
and facilitation mechanisms generally work well and does not believe
there is a void that the Exchange needs to fill in this regard. See
id.
\40\ See id. at 1-2.
\41\ See id. at 2. This commenter also expresses the concern
that Commission approval of the ETC might encourage others to offer
similar functions that would likely further detract from
participation and price discovery in the closing auction. See id.
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This commenter also believes that the ETC would allow sophisticated
participants to engage in arbitrage by quickly identifying price
differences between the Closing Cross price and the prevailing after-
hours market price before other participants.\42\ According to the
commenter, these sophisticated participants could use ETC-only order
types and ETC imbalance information to opportunistically submit orders
to engage with other participants' ETC activity at a previously
determined fixed price using the ETC and unwind risk in the after-
market at prices that more accurately reflect the current value of the
security.\43\
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\42\ See id. at 3.
\43\ See id.
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Finally, this commenter states that the availability of information
going into the closing auction becomes the principal driver of price
discovery in the continuous market in the last five to ten minutes of
trading.\44\ According to the commenter, if participants do not submit
their true interest in hopes they could trade in greater size utilizing
the ETC, the breadth and quality of market information could be
affected and result in more uncertainty and volatility in continuous
trading behavior leading into the close.\45\
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\44\ See id.
\45\ See id.
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In its response letter, the Exchange disagrees with the commenter's
concerns that the ETC would threaten the integrity of the Closing
Cross.\46\ The Exchange reiterates that the ETC would compete with
other venues that already offer mechanisms that enable their customers
to execute orders at the Closing Cross price after the Closing Cross
concludes.\47\ The Exchange also does not believe that the ETC would
siphon orders away from the Closing Cross.\48\ According to the
Exchange, the Closing Cross is robust, efficient, and affords its
participants reasonable assurance that their orders will execute, and
the published indicative price and order imbalance information prior to
the commencement of the Closing Cross enable its participants to
mitigate their risks of participating in the Closing Cross.\49\ The
Exchange believes that the ETC should not significantly alter the
behavior of participants for which execution assurance is
important,\50\ and that the ETC could bolster participants' willingness
to participate in the Closing Cross because the ETC would provide an
added opportunity for their LOC orders to execute at the Closing Cross
price.\51\ The Exchange further states that it expects participants to
use the ETC as a ``clean-up'' mechanism for executing orders that are
not executed in the Closing Cross or to facilitate other specific
client needs.\52\
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\46\ See letter from Brett M. Kitt, Associate Vice President &
Principal Associate General Counsel, Nasdaq, to Vanessa Countryman,
Secretary, Commission, dated September 9, 2021.
\47\ See id. at 1-2. While the Exchange would support a
Commission review of ``echo prints'' of the Closing Cross price and
their effects on market efficiency, the Exchange believes that,
unless or until the Commission so acts, there is no reasonable basis
to allow off-exchange venues to offer echo prints, while denying the
Exchange the ability to do the same. See id. at 3.
\48\ See id. at 2. The Exchange states that, to the extent that
it assesses that the ETC has become too large relative to the
Closing Cross, or that members are indeed utilizing the ETC as a
regular substitute for the Closing Cross, then it will propose such
actions as are necessary to mitigate any threat to the Closing Cross
or its price discovery function. See id. at 3.
\49\ See id. at 2.
\50\ The Exchange also states that, for those participants that
seek to execute large volumes of shares at the Closing Cross price,
exclusive participation in the ETC is unlikely to meet their needs,
as ETC-only orders will execute only to the extent that there exists
matching share volume in the ETC that is sufficient to do so. See
id. According to the Exchange, because it would disseminate ETC
imbalance information only after the ETC commences, participants in
the ETC would have less assurance about the outcome of their
participation than when they participate in the Closing Cross, or in
the Closing Cross and ETC together. See id.
\51\ See id.
\52\ See id. The Exchange also states that market forces should
determine whether the market for this service is already saturated
and whether there is new room for competition. See id.
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[[Page 60321]]
In addition, the Exchange does not share the commenter's concerns
regarding arbitrage, and states that any risk that ETC participants
would face harm from arbitrageurs is likely to be considerably less
than the risks that market participants presently face when they trade
after-hours.\53\ The Exchange also states that because it would suspend
ETC executions if significant deviations emerge between the Closing
Cross price and the after-hours market price of a security, this should
limit the instances in which egregious arbitrage occurs.\54\ Finally,
the Exchange reiterates that participation in the ETC is voluntary, and
therefore any participant that is concerned about arbitrageurs is free
to not participate in the ETC or cancel its orders in the ETC.\55\
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\53\ See id. at 3.
\54\ See id.
\55\ See id.
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IV. Proceedings To Determine Whether To Approve or Disapprove SR-
NASDAQ-2021-040, as Modified by Amendment No. 1, and Grounds for
Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \56\ to determine whether the proposed rule
change, as modified by Amendment No. 1, should be approved or
disapproved. Institution of proceedings is appropriate at this time in
view of the legal and policy issues raised by the proposal, as
discussed below. Institution of proceedings does not indicate that the
Commission has reached any conclusions with respect to any of the
issues involved. Rather, as described below, the Commission seeks and
encourages interested persons to provide additional comment on the
proposed rule change, as modified by Amendment No. 1.
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\56\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\57\ the Commission is
providing notice of the grounds for disapproval under consideration. As
described above, the Exchange has proposed to adopt the ETC, which
would be a five-minute process immediately following the Closing Cross
during which ETC Eligible Orders could match and execute against other
ETC Eligible Orders continuously at the NOCP.\58\ As proposed, the
Exchange would disseminate an ETC order imbalance indicator during the
ETC, which would include certain information regarding ETC Eligible
Orders. As described above, the Commission has received a commenter
letter that expresses concerns regarding the potential impact of the
ETC on the Closing Cross and on continuous trading, and the potential
for the ETC to encourage arbitrage behavior. The Commission has also
received a response letter from the Exchange. Moreover, on October 25,
2021, the Exchange submitted an amendment to the proposed rule change.
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\57\ Id.
\58\ However, as described above, the Exchange would suspend
execution of ETC Eligible Orders in a security whenever it detects:
(i) An order in that same security resting on the Nasdaq continuous
book in after-hours trading with a bid (offer) price that is higher
than (lower than) the NOCP for that security; or (ii) the after-
hours trading last sale price, or the best after-hours trading bid
(offer) price, of the security (other than on the Nasdaq continuous
book) is more than 0.5% or $0.01 higher than (lower than) the NOCP
for that security, whichever is greater. The Exchange would resume
execution of ETC Eligible Orders in a security in scenario (i) if
and when the system determines, during the ETC, that the Nasdaq
continuous book in after-hours trading is clear of resting orders in
that security with a bid (offer) price that is higher than (lower
than) the NOCP. The Exchange would resume execution of ETC Eligible
Orders in a security in scenario (ii) if and when the after-hours
trading last sale price or the best after-hours trading bid (offer)
price of the security (other than on the Nasdaq continuous book)
returns to within the greater of the 0.5% or $0.01 thresholds during
the ETC.
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The Commission is instituting proceedings to allow for additional
analysis of, and input from commenters with respect to, the consistency
of the proposal with Sections 6(b)(5) \59\ and 6(b)(8) \60\ of the Act.
Section 6(b)(5) of the Act requires that the rules of a national
securities exchange be designed, among other things, 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, and not
be designed to permit unfair discrimination between customers, issuers,
brokers, or dealers. Section 6(b)(8) of the Act requires that the rules
of a national securities exchange not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.
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\59\ 15 U.S.C. 78f(b)(5).
\60\ 15 U.S.C. 78f(b)(8).
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V. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their data, views, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposed rule
change, as modified by Amendment No. 1, is consistent with Section
6(b)(5), 6(b)(8), or any other provision of the Act, or rules and
regulations thereunder. Although there do not appear to be any issues
relevant to approval or disapproval that would be facilitated by an
oral presentation of data, views, and arguments, the Commission will
consider, pursuant to Rule 19b-4 under the Act,\61\ any request for an
opportunity to make an oral presentation.\62\
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\61\ 17 CFR 240.19b-4.
\62\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Pub. L. 94-29 (June 4, 1975), grants to the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change, as modified by
Amendment No. 1, should be approved or disapproved by November 22,
2021. Any person who wishes to file a rebuttal to any other person's
submission must file that rebuttal by December 6, 2021. Comments may be
submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#ed9f988188c08e8280808883999ead9e888ec38a829b"><span class="__cf_email__" data-cfemail="4735322b226a24282a2a222933340734222469202831">[email protected]</span></a>. Please include
File No. SR-NASDAQ-2021-040 on the subject line.
Paper Comments
<bullet> 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 No. SR-NASDAQ-2021-040. The 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 (<a href="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>).
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
[[Page 60322]]
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 No. SR-NASDAQ-
2021-040 and should be submitted by November 22, 2021. Rebuttal
comments should be submitted by December 6, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\63\
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\63\ 17 CFR 200.30-3(a)(12); 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-23670 Filed 10-29-21; 8:45 am]
BILLING CODE 8011-01-P
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