Notice2026-06466
Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of a Proposal To Amend the Exchange's Anti-Internalization Functionality in Equity 4, Rule 4757, and To Extend the Implementation Date of the CORE FIX Order Entry Protocol
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
April 3, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 64 (Friday, April 3, 2026)</title>
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[Federal Register Volume 91, Number 64 (Friday, April 3, 2026)]
[Notices]
[Pages 17010-17011]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06466]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105129; File No. SR-NASDAQ-2026-023]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of a Proposal To Amend the
Exchange's Anti-Internalization Functionality in Equity 4, Rule 4757,
and To Extend the Implementation Date of the CORE FIX Order Entry
Protocol
March 31, 2026.
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 March 30, 2026, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the 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
The Exchange proposes to amend the Exchange's anti-internalization
functionality in Equity 4, Rule 4757, and to extend the implementation
date of the CORE FIX order entry protocol.
The text of the proposed rule change is available on the Exchange's
website at <a href="https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings">https://listingcenter.nasdaq.com/rulebook/nasdaq/rulefilings</a>, and at the principal office of the Exchange.
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 purpose of the proposed rule change is to amend the Exchange's
anti-internalization functionality in Equity 4, Rule 4757. This
functionality assists participants in reducing trading costs from
unwanted executions that could result from the interaction of
executable buy and sell trading interest from the same firm. Currently,
Rule 4757(a)(4) provides that market participants using the CORE FIX
\3\ or OUCH \4\ order entry protocols may assign to orders entered
through a specific order entry port a unique group identification
modifier that will prevent quotes/orders with such modifier from
executing against each other (``Port-Level Anti-Internalization
Functionality''). The Exchange now proposes to amend Rule 4757(a)(4) to
also make the Port-Level Anti-Internalization Functionality available
to market participants using the FIX \5\ and FLITE \6\ order entry
protocols.
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\3\ CORE FIX is a proprietary order entry protocol. See Nasdaq
Equity 4, Rule 4702(a).
\4\ OUCH is a proprietary order entry protocol. See id.
\5\ FIX is a non-proprietary order entry protocol. See id.
\6\ FLITE is a proprietary order entry protocol. See id.
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The Exchange notes that the Port-Level Anti-Internalization
Functionality is already currently available to market participants
using the FLITE order entry protocol. Therefore, the Exchange is
proposing to amend Rule 4757(a)(4), in part, to bring its rulebook in
line with its current practice in this regard. Because the Exchange is
already offering this functionality to market participants using the
FLITE order entry protocol, the proposed rule change with regard to
these market participants will become operative 30 days after this
proposed rule change is filed. Meanwhile, the Exchange intends to begin
offering the Port-Level Anti-Internalization Functionality to market
participants using the FIX order entry protocol before the end of 2026.
The Exchange will issue an Equity Trader Alert ahead of the
implementation of this functionality for market participants using the
FIX order entry protocol.
Finally, in 2025 the Exchange announced its intention to implement
CORE FIX, a new order entry protocol, by the third quarter of 2025.\7\
Due to re-prioritization of the Exchange's product pipeline, the
Exchange now proposes to implement CORE FIX before the end of 2026. The
Exchange will issue an Equity Trader Alert ahead of the implementation
of CORE FIX on the Exchange.
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\7\ See Securities Exchange Act Release No. 102661 (Mar. 13,
2025), 90 FR 12858 (Mar. 19, 2025) (File No. SR-NASDAQ-2025-027).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\8\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\9\ in particular, in that it 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.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
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As a preliminary matter, the Exchange notes that the Port-Level
Anti-Internalization Functionality is not novel. Rule 4757(a)(4)
already makes this functionality available to market participants who
use the OUCH order entry protocol. The rule also provides that this
functionality will be available to market participants who use the CORE
FIX order entry protocol, when that protocol is implemented on the
Exchange. What the Exchange is now proposing is to also make this
specific functionality available to market participants who use the FIX
order entry protocol, and to have the rule reflect the reality that
this functionality is currently available to market participants who
use the FLITE order entry protocol.
The proposal is consistent with the Act and is designed to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, because it is extending the existing Port-
Level Anti-Internalization Functionality to market participants who use
the FIX order entry protocol. This proposal is also consistent with the
Act and is designed to promote just and equitable principles of trade
and to protect investors and the public interest, because it ensures
that the Exchange's rulebook accurately reflects that market
participants who use the FLITE order entry protocol are already able to
use the Port-Level Anti-Internalization Functionality. Extending this
anti-
[[Page 17011]]
internalization functionality to market participants who use the FIX
order entry protocol, and clarifying that this functionality is already
available to market participants who use the FLITE order entry
protocol, will help market participants choose the most appropriate
order entry protocol to achieve their trading objectives.
Finally, extending the implementation date of the CORE FIX order
entry protocol is designed to promote just and equitable principles of
trade and to protect investors and the public interest, because it
gives notice to market participants that this protocol is not yet
available, but that the Exchange remains committed to implementing this
protocol before the end of 2026.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. As a general principle, the
proposed changes are reflective of the significant competition among
exchanges and non-exchange venues for order flow. In this regard, a
proposed change that expands and clarifies the availability of the
Exchange's Port-Level Anti-Internalization Functionality is pro-
competitive because it bolsters the efficiency, functionality, and
overall attractiveness of the Exchange in an absolute sense and
relative to its peers. Moreover, the proposed changes will not unduly
burden intra-market competition among various Exchange participants.
Participants will experience no competitive impact from this proposal,
as the Port-Level Anti-Internalization Functionality remains completely
optional, and market participants are free to use any of several order
entry protocols if they wish to avail themselves of this functionality.
Finally, the Exchange does not believe that the extension of time to
implement the CORE FIX order entry protocol will impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act, because market participants remain free to use any
of the other order entry protocols that the Exchange offers.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were either solicited or 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)(iii) of the Act \10\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\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 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
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#f684839a93db95999b9b93988285b6859395d8919980"><span class="__cf_email__" data-cfemail="146661787139777b7979717a6067546771773a737b62">[email protected]</span></a>. Please include
file number SR-NASDAQ-2026-023 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 number SR-NASDAQ-2026-023. 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 website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing will be available for inspection and
copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection. All submissions
should refer to file number SR-NASDAQ-2026-023 and should be submitted
on or before April 24, 2026.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-06466 Filed 4-2-26; 8:45 am]
BILLING CODE 8011-01-P
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