[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