[Federal Register Volume 76, Number 41 (Wednesday, March 2, 2011)]
[Notices]
[Pages 11548-11550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4691]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63959; File No. SR-NASDAQ-2011-031]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding the NASDAQ Order Imbalance Snapshot

February 24, 2011.
    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 February 23, 2011, The NASDAQ Stock Market LLC (the 
``Exchange'' or ``NASDAQ'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I, II, and III below, which Items have been prepared by 
NASDAQ. 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 is filing this proposed rule change regarding the 
NASDAQ Order Imbalance Snapshot, a data feed of electronic messages for 
newswire providers to monitor the NASDAQ Opening Cross, Closing Cross, 
IPO Cross and Halt Cross. The text of the proposed rule change is 
available at http://nasdaq.cchwallstreet.com/, at NASDAQ's principal 
office, and at the Commission's Public Reference Room.

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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NASDAQ facilitates participation in electronic auctions by 
disseminating the

[[Page 11549]]

Order Imbalance Indicator, a data feed containing information regarding 
the status of the NASDAQ book just prior to a crossing auction. The 
data contained in the Order Imbalance Indicator is set forth in NASDAQ 
Rules governing the crosses for the Opening Cross (Rule 4752), Halt/IPO 
Cross (Rule 4753), and Closing Cross (Rule 4754).
    The NASDAQ Order Imbalance Snapshot (``NOIS'') is a separate 
service that provides a snapshot version of the Order Imbalance 
Indicator that is streamlined and filtered for use by newswire 
services. Rather than providing continuous order imbalance data, NOIS 
provides the data for certain stocks at selected time intervals in a 
format designed to optimize systems used by newswire providers. In 
other words, NOIS contains a subset of information already approved to 
be disseminated via the Order Imbalance Indicator.
    Specifically, for the NASDAQ Opening and Closing Crosses, NOIS 
disseminates messages only for exchange-listed securities that show an 
imbalance shares amount equal to or more than 50,000 shares. For those 
messages NOIS disseminates, the message includes all imbalance 
information set forth in the Order Imbalance Indicator set forth in 
NASDAQ Rule 4752(a), 4753(a), and 4754(a). NOIS disseminates messages 
for securities listed on any national securities exchange, not just 
those listed on NASDAQ.
    For NASDAQ IPO Crosses, NOIS messages are disseminated 
approximately 3 minutes and 13 minutes after the ``Trading Action--
Quote Resumption'' message, which signals imminent launch of trading, 
is disseminated for the issue. NOIS will also disseminate a message if 
the quotation window is extended for the IPO security. There is no 
share size filter for the IPO cross. NASDAQ currently disseminates IPO 
Cross messages only for NASDAQ-listed securities.
    For the NASDAQ Halt Cross, which NASDAQ uses to release securities 
subject to a regulatory trading halt or single security trading pause, 
NOIS messages will be disseminated approximately 3 minutes after the 
``Trading Action--Quote resumption'' message is transmitted for the 
issue. NOIS will also disseminate a message if the quotation window is 
extended for the halted or paused security. There is no share size 
filter for the Halt cross. For the Halt Cross, NOIS disseminates 
messages for NASDAQ-listed issues only.
    NOIS data elements are disseminated to newswires for further 
dissemination to newswire subscribers. Therefore, the NOIS feed is not 
directly actionable by investors for quoting, order entry or trade 
execution.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of Section 6 of the Act,\3\ in general and with Section 
6(b)(5) of the Act,\4\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, 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 transactions 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.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(5).
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to the public. It was believed that 
this authority would expand the amount of data available to consumers, 
and also spur innovation and competition for the provision of market 
data. Nasdaq believes that this proposal is in keeping with those 
principles by promoting increased transparency through the 
dissemination of more useful proprietary data and also by clarifying 
its availability to market participants.
    Additionally, NASDAQ is making a voluntary decision to make this 
data available. NASDAQ is not required by the Exchange Act in the first 
instance to make the data available, unlike the best bid and offer 
which must be made available under the Act. NASDAQ chooses to make the 
data available as proposed in order to improve market quality, to 
attract order flow, and to increase transparency. Once this filing 
becomes effective, NASDAQ will be required to continue making the data 
available until such time as NASDAQ changes its rule.

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. NASDAQ provides 
routing services in a highly competitive market in which participants 
may avail themselves of a wide variety of routing options offered by 
self-regulatory organizations, alternative trading systems, other 
broker-dealers, market participants' own proprietary routing systems, 
and service bureaus. In such an environment, system enhancements such 
as the changes proposed in this rule filing do not burden competition, 
because they can succeed in attracting order flow to NASDAQ only if 
they offer investors higher quality and better value than services 
offered by others. Encouraging competitors to provide higher quality 
and better value is the essence of a well-functioning competitive 
marketplace.

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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \5\ and Rule 19b-
4(f)(6) thereunder.\6\
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6).
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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 change 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

[[Page 11550]]

     Send an e-mail to [email protected]. Please include 
File Number SR-NASDAQ-2011-031 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2011-031. This 
file number should be included on the subject line if e-mail 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 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 a.m. and 3 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-2011-031 and should be submitted on or before March 23, 2011.

    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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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4691 Filed 3-1-11; 8:45 am]
BILLING CODE 8011-01-P