[Federal Register Volume 86, Number 230 (Friday, December 3, 2021)]
[Notices]
[Pages 68714-68717]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-26242]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-93675; File No. SR-NASDAQ-2021-093]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Include Juneteenth National Independence Day as a Holiday
November 29, 2021.
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 November 17, 2021, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
[[Page 68715]]
(``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 adopt a new Rule 1030, within General 3,
titled ``Member Access to the Exchange,'' to make Juneteenth National
Independence Day a holiday of the Exchange, to memorialize all current
Exchange holidays within General 3, Rule 1030, and to add a provision
to permit the Exchange the authority to halt or suspend trading or
close Exchange facilities for certain unanticipated closures.
The text of the proposed rule change is available on the Exchange's
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, at
the principal office of the Exchange, 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to adopt a new Rule 1030, within General 3,
titled ``Member Access to the Exchange,'' to make Juneteenth National
Independence Day a holiday of the Exchange as well as its Affiliated
Markets.\3\ The Exchange also proposes to memorialize all current
holidays within General 3, Rule 1030, as well as add a provision to
permit the Exchange the authority to halt or suspend trading or close
Exchange facilities for certain unanticipated closures.
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\3\ The Affiliated Markets include BX, ISE, GEMX, and MRX.
Nasdaq Phlx LLC rules do not currently incorporate by reference the
Nasdaq General 3 rules. Phlx will separately file a similar rule
change.
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Today, the Exchange observes the following holidays: New Year's
Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.\4\ Nasdaq Equity 2, Section 8 (Normal Business Hours)
provides, ``The System operates from 4:00 a.m. to 8:00 p.m. Eastern.
Time on each business day, unless modified by Nasdaq.'' \5\
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\4\ See https://www.nasdaq.com/market-activity/stock-market-holiday-calendar.
\5\ Additionally, NOM Options 3, Section 1 (Days and Hours of
Business) provides at subsection (c), ``NOM shall not be open for
business on any holiday observed by The Nasdaq Stock Market, LLC.''
Separately the Exchange notes that BX has similar rules at Equity 2,
Section 8 and Options 3, Section 1(c). ISE, GEMX and MRX Options 3,
Section 1(e) delineate the list of holidays noted above. ISE, GEMX,
and MRX will separately file to remove Options 3, Section 1(e) as
that rule text would be redundant once this filing becomes effective
as ISE, GEMX, and MRX rules incorporate by reference Nasdaq General
3.
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At this time, the Exchange also proposes to observe Juneteenth
National Independence Day, which was designated a legal public holiday
on June 17, 2021.\6\ Consistent with broad industry sentiment \7\ and
the approach recommended by the Securities Industry and Financial
Markets Association (``SIFMA''),\8\ the Exchange proposes to add
``Juneteenth National Independence Day'' to the proposed list of
holidays within General 3, Rule 1030(a). As a result, the Exchange will
not be open for business on Juneteenth National Independence Day, which
falls on June 19 of each year, in addition to the other annual holidays
noted within proposed General 3, Rule 1030(a).
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\6\ Public Law 117-17.
\7\ See, e.g. https://www.wsj.com/articles/wall-street-moves-to-
close-markets-for-juneteenth-in-2022-
11626376243#:~:text=Stock%20and%20bond%20markets%20are,on%20a%20Sunda
y%20next%20year.
\8\ SIFMA recommends a full market close in observance of
Juneteenth National Independence Day. See https://www.sifma.org/resources/general/holiday-schedule/#US.
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As is the case today for those annual holidays currently observed,
when a holiday observed by the Exchange falls on a Saturday, the
Exchange will not be open for business on the preceding Friday and when
any holiday observed by the Exchange falls on a Sunday, the Exchange
will not be open for business on the succeeding Monday, unless unusual
business conditions exist at the time.\9\ Proposed General 3, Rule
1030(a) would provide,
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\9\ For example, New Year's Day 2022 would not be observed
because January 1, 2022 falls on a Saturday and typically the last
day of the preceding year remains a full business day.
The Exchange will be open for the transaction of business on
business days. The Exchange will not be open for business on New
Year's Day, Martin Luther King Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Juneteenth National Independence Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
When a holiday observed by the Exchange falls on a Saturday, the
Exchange will not be open for business on the preceding Friday and
when any holiday observed by the Exchange falls on a Sunday, the
Exchange will not be open for business on the succeeding Monday,
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unless unusual business conditions exist at the time.
When determining whether unusual business conditions exist in
connection with the observance of a holiday on the preceding Friday or
following Monday, or not observing the holiday, the Exchange and its
Affiliated Markets would coordinate with the securities industry.
Proposed General 3, Rule 1030(a) is similar to Cboe BYX Exchange, Inc.
(``CBOE BYX'') Rule 11.1(b) and Cboe Exchange, Inc. (``Cboe'') Rules
5.1(d) and 5.23(d). The Exchange believes memorializing these annual
holidays within the rules of Nasdaq and its Affiliated Markets will
bring additional clarity to those observed holidays.
Next, the Exchange proposes to add rule text within proposed
General 3, Rule 1030(b), similar to CBOE BYX Rule 11.1(c), which
states, ``The Chief Executive Officer of the Exchange shall have the
power to halt, suspend trading in any and all securities traded on the
Exchange, to close some or all Exchange facilities, and to determine
the duration of any such halt, suspension, or closing, when he or she
deems such action necessary for the maintenance of fair and orderly
markets, the protection of investors, or otherwise in the public
interest including special circumstances such as (1) actual or
threatened physical danger, severe climatic conditions, civil unrest,
terrorism, acts of war, or loss or interruption of facilities utilized
by the Exchange, (2) a request by a governmental agency or official, or
(3) a period of mourning or recognition for a person or event. No such
action shall continue longer than a period of two days, or as soon
thereafter as a quorum of the Board of Directors can be assembled,
unless the Board approves the continuation of such suspension.'' While
the Exchange would continue to submit a proposed rule change to the
Commission to amend the annual holidays within General 3, Rule 1030(a),
the Exchange proposes to give the Exchange the authority to halt or
suspend trading or close Exchange facilities for certain unanticipated
closures. Unanticipated closures are typically the result of natural
disasters,
[[Page 68716]]
ad hoc National Holidays, disruptions of infrastructure, and other
unpredictable events that would cause the Exchange to close for
business. The Exchange would not utilize this authority routinely,
rather the authority is reserved for extraordinary circumstances where
there would not be sufficient time for the Exchange to file to amend
its rules. The Exchange notes that it would coordinate with the
industry in determining closures for these events.\10\ The Exchange
believes that it is necessary to have such authority in the
aforementioned cases as there may not be sufficient time to file a
proposed rule change. Additionally, these unanticipated closures would
not be recognized on an annual basis, rather these types of closures
would be ad hoc closures. The Exchange would provide notice to members
of these unanticipated closures in addition to continuing to post its
annual holiday schedule on its website.
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\10\ The Options Clearing Corporation (``OCC'') has issued a
guide for such events. See OCC's Market Closing Guide (https://www.theocc.com/getmedia/8d6a36c6-1aa4-4984-9333-d7b0a6a09be7/unscheduled-market-closings-guide.pdf). See also DTCC Reference
Guide: Unscheduled Closing of Exchanges and Markets for Clearing
Agencies (https://www.dtcc.com/~/media/Files/Downloads/%20issues/
Unscheduled_Close.pdf).
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Finally, the Exchange proposes to add rule text at the end of
General 3, Section 1030(b) which states, ``The powers granted to the
Chief Executive Officer within paragraph (b) do not apply to paragraph
(a) or any other rule within the Exchange's Rulebook.'' The power of
the Chief Executive Officer to halt, suspend or close facilities of the
Exchange within paragraph (b) applies only to the circumstances noted
within that paragraph. The powers of the Chief Executive Officer do not
extend to paragraph (a) of General 3, Section 1030 or to any other
provision in the Rulebook, including but not limited to Options 3,
Section 1 or Equity 2, Section 8.
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 and to protect investors
and the public interest by memorializing its current holidays within
General 3, Rule 1030(a) and also providing the manner in which the
Exchange would handle holidays that fell on a Saturday or Sunday,
unless unusual business conditions exist. Today, the Exchange and its
Affiliated Markets coordinate with the securities industry with respect
to annual holidays.
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\11\ 15 U.S.C. 78
\12\ 15 U.S.C. 78f(b)(5).
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Further, the Exchange's proposal to observe the Juneteenth National
Independence Day as an annual holiday is consistent with the Act.
Similar to other holidays listed within proposed General 3, Rule
1030(a), the rule text addresses what day would be taken off if June 19
fell on a Saturday or Sunday. The proposed rule also accounts for
unusual business conditions that may alter the observance of an annual
holiday or affect the day the holiday is observed. The Exchange notes
that when determining whether to utilize the unusual business
conditions provision, the Exchange and its Affiliated Markets would
continue to coordinate with the securities industry.
The proposed rule promotes clarity and transparency by providing
the list of current annual holidays of Nasdaq and its Affiliated
Markets, as well as the proposed new Juneteenth National Independence
Day holiday, within its Rules. The proposed changes do not raise any
new or novel issues. For these reasons, the Exchange believes that
these aspects of the proposal are consistent with the Act.
Further, the Exchange's proposal to permit the Chief Executive
Officer to halt, suspend trading in any and all securities traded on
the Exchange, to close some or all Exchange facilities, and to
determine the duration of any such halt, suspension, or closing, when
he or she deems such action necessary for the maintenance of fair and
orderly markets, the protection of investors, or otherwise in the
public interest including special circumstances is consistent with the
Act as the provision would permit Nasdaq and its Affiliated Markets to
act in coordination with other exchanges within the securities industry
to close, as necessary, for natural disasters, ad hoc National
Holidays, disruptions of infrastructure, and other unpredictable
events. The Exchange would not utilize this authority routinely, rather
the authority is reserved for certain specified extraordinary
circumstances \13\ where there would not be sufficient time for the
Exchange to file to amend its rules. With this proposal, the Exchange's
process of filing a proposed rule change for any new annual holidays it
determines to add to the list of holidays within General 3, Rule
1030(a) would remain unchanged. The proposed authority would permit
Nasdaq and its Affiliated Markets to close the market on an ad hoc
basis for an extraordinary event without the need to file a proposed
rule change; these unanticipated closures would not be recognized on an
annual basis. Today, the Exchange would utilize emergency authority to
close for business for unanticipated closures.\14\ This amendment
removes impediments to and perfects the mechanism of a free and open
market and a national market system by allowing the Exchange and its
Affiliated Markets to halt or suspend trading or close Exchange
facilities for unanticipated circumstances by providing notice to
members in addition to continuing to post its annual holiday schedule
on its website.
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\13\ The special circumstances noted in proposed Rule 1030(b)
include, (1) actual or threatened physical danger, severe climatic
conditions, civil unrest, terrorism, acts of war, or loss or
interruption of facilities utilized by the Exchange, (2) a request
by a governmental agency or official, or (3) a period of mourning or
recognition for a person or event.
\14\ See Nasdaq By-Law Article IX, Section 5, Authority to Take
Action Under Emergency or Extraordinary Market Conditions.
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The Exchange's proposal to add rule text at the end of General 3,
Section 1030(b) to make clear the power of the Chief Executive Officer
to halt, suspend or close facilities of the Exchange within paragraph
(b) applies only to the circumstances noted within that paragraph is
consistent with the Act as that rule text will clarify the scope of the
Chief Executive Officer's powers. Making clear the powers of the Chief
Executive Officer adds greater transparency to the proposed rule.
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. Memorializing its current
holidays within General 3, Rule 1030(a) and describing the way holidays
are observed that fall on a Saturday or Sunday, unless unusual business
conditions exist, does not impose an undue burden on competition,
rather the proposal brings clarity to the Exchange's Rules. Moreover,
adding Juneteenth National Independence Day to its list of annual
holidays within General 3, Rule 1030(a) will not impose any burden on
competition as the holiday aligns with broad industry sentiment \15\
and the approach recommended by SIFMA. The Exchange and its Affiliated
Markets would continue to coordinate with the securities industry
regarding the observation of annual holidays.
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\15\ See note 7 above.
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[[Page 68717]]
Further, the Exchange's proposed changes to General 3, Rule 1030(b)
to permit the Chief Executive Officer to halt, suspend trading in any
and all securities traded on the Exchange, to close some or all
Exchange facilities, and to determine the duration of any such halt,
suspension, or closing, when he or she deems such action necessary for
the maintenance of fair and orderly markets, the protection of
investors, or otherwise in the public interest including certain
specified special circumstances does not impose an undue burden on
competition. The proposed authority would permit Nasdaq and its
Affiliated Markets to close on an ad hoc basis for an extraordinary
event without the need to file a rule change by providing notice to
members of these unanticipated closures. This would allow the Exchange
to continue to coordinate with the securities industry for
unanticipated closures. These proposed changes are not designed to
address any competitive issues and are consistent with existing rules
of other exchanges.\16\
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\16\ See Cboe BYX Rule 11.1(b) and (c) and Cboe Rules 5.1(d) and
5.23(d).
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The Exchange's proposal to add rule text at the end of General 3,
Section 1030(b) to make clear the power of the Chief Executive Officer
to halt, suspend or close facilities of the Exchange within paragraph
(b) applies only to the circumstances noted within that paragraph does
not impose an undue burden on competition, rather, the rule text will
make clear the powers of the Chief Executive Officer thereby adding
greater transparency to the proposed rule.
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 \17\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\18\
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\17\ 15 U.S.C. 78s(b)(3)(A)(iii).
\18\ 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
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-2021-093 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-2021-093. 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 (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 10:00 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 Number SR-NASDAQ-2021-093 and should be submitted
on or before December 27, 2021.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-26242 Filed 12-2-21; 8:45 am]
BILLING CODE 8011-01-P