Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Exchange Rule 4759 Regarding Sources of Data Used

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<title>Federal Register, Volume 91 Issue 163 (Tuesday, August 25, 2026)</title>
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[Federal Register Volume 91, Number 163 (Tuesday, August 25, 2026)]
[Notices]
[Pages 54900-54902]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17279]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106169; File No. SR-NASDAQ-2026-067]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Exchange Rule 4759 Regarding Sources of Data Used

August 20, 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 August 17, 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 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 to amend Equity 4, Rule 4759(a) regarding the 
public disclosure of sources of data that the Exchange uses for 
purposes set forth in that subparagraph to provide that, during the 
Night Session,\3\ and subject to Exchange Rule Equity 1, Section 
1(a)(19), the Exchange will use CQS/UQDF as the source of quotation 
data for the purposes set forth in that paragraph, as described below.
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    \3\ See Equity 1, Section 1(a)(19) (defining the term ``Night 
Session'' as the time between 9:00 p.m. on one calendar day through 
4:00 a.m. the next calendar day Sunday through Thursday provided 
that each such next calendar day is a Business Day and further 
providing (1) that the Exchange shall not commence operation of the 
Night Session unless the Equity Data Plans have established a 
mechanism to collect, consolidate, process and disseminate quotation 
and transaction information at all times during the Night Session 
that is equivalent to the mechanism established for Exchange trading 
hours during Regular Market Hours, and have provided the Exchange 
with notification that they are prepared to collect, consolidate, 
process and disseminate quotation and transaction information to 
accommodate the Night Session; (2) that, prior to commencing 
operation during the Night Session, the Exchange will file a 
proposed rule change pursuant to Section 19(b) of the Exchange Act 
and the rules thereunder to amend its rules confirming that the 
Exchange is able to comply with its obligations under the Exchange 
Act and the rules thereunder during the Night Session and that such 
Equity Data Plans are prepared to collect, consolidate, process and 
disseminate quotation and transaction information at all times 
during the Night Session (``Night Session Proposed Rule Change''); 
and (3) that if the Night Session Proposed Rule Change is not filed 
within 18 months of the SEC's approval of this proposed rule change, 
the Exchange will promptly file a proposed rule change to remove the 
rules that apply to the Night Session). See id.
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    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
Background
    On April 15, 2026, the SEC approved a proposal that the Exchange 
submitted to trade NMS stocks and ETPs on a 23/

[[Page 54901]]

5 basis.\4\ As set forth in the Approval Order, the Exchange will 
conduct 23/5 trading in two sessions: a ``Day'' Session, which 
comprises all existing trading hours of the Exchange, from 4:00 a.m. ET 
until 8:00 p.m. ET,\5\ and a newly established ``Night'' Session, which 
will run from 9:00 p.m. ET until 4:00 a.m. ET.\6\ Additionally, in 
coordination with other exchanges offering similar extended trading 
hours, the Exchange will also pause trading between 8:00 p.m. ET and 
9:00 p.m. ET to perform maintenance, testing, and to facilitate the 
transition from one trading day to the next trading day, which will 
commence at 9:00 p.m. ET (the ``Day-to-Night Pause'').\7\ At the 
conclusion of the Day Session at 8:00 p.m. ET, Nasdaq will cancel all 
orders then outstanding.\8\ Subject to the conditions in Exchange Rule 
Equity 1, Section 1(a)(19), including the filing of the Night Session 
Proposed Rule Change,\9\ Nasdaq will launch the operation of its 23/5 
market upon the availability of the Securities Information Processor 
(``SIP'') to operate during the Night Session,\10\ as provided under 
Exchange Rule Equity 1, Section 1(a)(19).
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    \4\ See Securities Exchange Act Release No. 34-105199 (April 10, 
2026), 91 FR 20222 (April 15, 2026) (the ``Approval Order'').
    \5\ The new Day Session will consolidate and encompass three 
daily trading sessions that occur on Nasdaq during each weekday from 
Monday through Friday. In particular, the Day Session will encompass 
the following. First, it will include the Pre-Market Hours session 
that Nasdaq currently conducts from 4:00 a.m. to 9:30 a.m. ET. 
Second, commencing at 9:30 a.m. with the execution of the Nasdaq 
Opening Cross, the Day Session will include Nasdaq's Regular Market 
Hours trading session, which runs until 4:00 p.m. Third, commencing 
at 4:00 p.m. with the execution of the Nasdaq Closing Cross, the Day 
Session will include the Post-Market Hours trading session, which 
runs from 4:00 p.m. until 8:00 p.m. See, e.g., Exchange Rules Equity 
1, Sections 1(a)(9) and 1(a)(18).
    \6\ During weekdays, between the hours of 8:00 p.m.-4:00 a.m. 
ET, the Exchange at present is closed to trading as it is during all 
weekend hours. Going forward, however, the Night Session will run 
between 9:00 p.m.-4:00 a.m. ET during the weekdays, commencing each 
week with a Night Session that will begin at 9:00 p.m. ET on 
Sundays.
    \7\ Between 8:00 p.m. and 9:00 p.m. ET on each weekday, the 
Exchange will pause trading on its market to conduct maintenance, 
testing, and to process those corporate actions, such as mergers, 
stock splits, and dividends, that will become effective the 
following trading day. The pause will also allow for market 
participants to process and clear trades before proceeding to a new 
trading day. See Equity 1, Rule 1(a)(19).
    \8\ See Rule 4120(a)(10)(B).
    \9\ See supra note 3 and accompanying text.
    \10\ See id. Section 1(a)(19).
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Proposed Rule Change
    The Exchange proposes to amend Equity 4, Rule 4759(a), which 
describes the quotation data consumed by the Nasdaq System from 
proprietary and network processor feeds for the handling, routing, and 
execution of orders, as well as for the regulatory compliance processes 
related to those functions. Specifically, the Exchange proposes to 
provide that subject to Exchange Rule Equity 1, Section 1(a)(19), 
during the Night Session, the Exchange will use CQS/UQDF as the source 
of quotation data for purposes of Rule 4759(a).
    Exchange Rule 4759(a) currently provides that the Nasdaq System 
consumes quotation data from the proprietary and network processor 
feeds listed in the rule for order handling, routing, execution, and 
related regulatory compliance processes. The rule further provides that 
the Primary Source of data is used unless it is delayed by a 
configurable amount compared to the Secondary Source of data, that the 
Exchange will revert to the Primary Source of data once the delay has 
been resolved, and that the configurable amount described in the rule 
will be made available to members via Equity Trader Alert.
    The Exchange proposes to amend the introductory sentence of 
Exchange Rule 4759(a) to clarify that, during the Night Session, and 
subject to Exchange Rule Equity 1, Section 1(a)(19), the Exchange will 
use CQS/UQDF as the sole source of quotation data for purposes of 
Exchange Rule 4759(a). The proposed change is intended to provide 
transparent notice in the Exchange's rules regarding the source of 
quotation data that the Exchange will use during the Night Session for 
the functions identified in subparagraph (a) of Exchange Rule 4759.
    The Exchange believes that using CQS/UQDF as the source of 
quotation data during the Night Session is appropriate because the 
Night Session presents operational considerations that are distinct 
from those associated with the Exchange's existing trading hours. In 
particular, accommodating market data feeds for the extended hours 
associated with the Night Session requires changes to the timestamps 
used by the Exchange's market data feed handlers--the Exchange systems 
responsible for receiving and processing market data feeds. Rather than 
introduce those timestamp-related changes across the proprietary feed 
handlers that serve as the primary sources of quotation data for the 
Exchange's existing Day Session and for other Nasdaq-affiliated markets 
and systems, the Exchange proposes to make the necessary Night Session-
related changes only with respect to CQS/UQDF. This approach will 
provide the Exchange with a reliable consolidated source of quotation 
data for the Night Session while reducing unnecessary operational risk 
to the proprietary feeds and related systems used outside of the Night 
Session. The proposal does not otherwise amend the list of market 
centers or the primary and secondary source designations set forth in 
Exchange Rule 4759(a), and it does not change the Exchange's use of SIP 
trade and administrative data under Exchange Rule 4759(b).
    Accordingly, the proposed distinction for the Night Session is 
limited and operationally tailored. Outside of the Night Session, the 
Exchange will continue to use the proprietary and network processor 
feeds identified in Exchange Rule 4759(a), including the primary and 
secondary source framework set forth in that rule. During the Night 
Session, and subject to Exchange Rule Equity 1, Section 1(a)(19), 
however, the Exchange will used CQS/UQDF as the sole source of 
quotation data for the purposes of Exchange Rule 4759(a) because that 
approach allows the Exchange to support the extended hours of the Night 
Session without making unnecessary changes to proprietary data feed 
handlers that support other trading sessions.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\11\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\12\ 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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    \11\ 15 U.S.C. 78f(b).
    \12\ 15 U.S.C. 78f(b)(5).
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    The proposed rule change is designed to promote transparency by 
specifying in Exchange Rule 4759(a) the source of quotation data that 
the Exchange will use during the Night Session for the handling, 
routing, and execution of orders, as well as for regulatory compliance 
processes related to those functions. The Exchange believes that 
identifying CQS/UQDF as the applicable quotation data source during the 
Night Session will provide members and other market participants with 
clear notice of the data source that will be used during that trading 
session.
    The Exchange also believes that the proposal is consistent with the 
protection of investors and the public interest because it updates the 
rule text to reflect how the Exchange will operate during the Night 
Session while preserving the existing operation of

[[Page 54902]]

Exchange Rule 4759(a) outside of the Night Session. The Night Session 
differs from the Exchange's existing trading hours because supporting 
the longer operating hours requires timestamp-related changes to the 
Exchange's market data feed handlers. By limiting those changes to CQS/
UQDF for the Night Session, the Exchange will be able to use a reliable 
consolidated source of quotation data during that session while 
mitigating operational risk to the proprietary feeds and related 
systems used during existing trading hours and by other Nasdaq-
affiliated markets and systems. The proposal is therefore intended to 
make the Exchange's rules more accurate and transparent, support the 
orderly operation of the Night Session, and avoid introducing 
unnecessary risk to systems that are not being changed by this 
proposal, without imposing any new obligation on members.

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. The proposed change identifies 
the source of quotation data that the Exchange will use during the 
Night Session for the purposes set forth in Exchange Rule 4759(a). The 
proposal does not impose any new requirements on members and will apply 
uniformly to all members that participate in the Night Session. In 
addition, the proposed use of CQS/UQDF during the Night Session 
reflects an operationally tailored approach to supporting the extended 
operating hours of that session while avoiding unnecessary changes to 
proprietary feed handlers used outside of the Night Session. It does 
not affect the terms on which members may access or compete on the 
Exchange.
    The Exchange further believes that the proposal will not impose any 
burden on intermarket competition because it merely specifies the 
quotation data source the Exchange will use during the Night Session 
and does not restrict the ability of other exchanges or market 
participants to compete.

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 \13\ and 
subparagraph (f)(6) of Rule 19b-4 thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 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#fa888f969fd7999597979f948e89ba899f99d49d958c"><span class="__cf_email__" data-cfemail="c1b3b4ada4eca2aeacaca4afb5b281b2a4a2efa6aeb7">[email&#160;protected]</span></a>. Please include 
file number SR-NASDAQ-2026-067 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-2026-067. 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-2026-067 and should be submitted 
on or before September 15, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Vanessa A. Countryman,
Secretary.
[FR Doc. 2026-17279 Filed 8-24-26; 8:45 am]
BILLING CODE 8011-01-P


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