[Federal Register Volume 85, Number 91 (Monday, May 11, 2020)]
[Notices]
[Pages 27789-27791]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-09959]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88813; File No. SR-NASDAQ-2020-023]
Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Modify the Operative Date of SR-NASDAQ-2020-012
May 5, 2020.
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 May 1, 2020, 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 modify the operative date of SR-NASDAQ-
2020-012. The text of the proposed rule change is available on the
Exchange's website at http://nasdaq.cchwallstreet.com, at the principal
office of the Exchange, and at the Commission's Public Reference Room.
[[Page 27790]]
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
On March 12, 2020, the Exchange filed with the Commission a
proposed rule change to establish reopening protections for Nasdaq
listed securities following a Level 1 or Level 2 market-wide circuit
breaker trading halt initiated under Rule 4121.\3\ The proposed rule
change indicated that operative date of the reopening protections would
be during April 2020.\4\ The Exchange proposes to modify the operative
date and delay the implementation of this functionality to July 2020.
The Exchange will issue an Equity Trader Alert notifying members prior
to implementing the functionality.
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\3\ See Securities Exchange Act Release No. 88383 (March 13,
2020), 85 FR 15819 (March 19, 2020) (SR-NASDAQ-2020-012).
\4\ See id. at 15822.
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Due to the recent market volatility resulting from the novel
coronavirus pandemic, the Exchange has been adjusting its systems
testing schedule and assessing any risks to the operation of its
systems that could potentially be introduced by implementing new
functionality during this time. The extension would therefore provide
the Exchange with flexibility and additional time to adjust its systems
testing schedule, and to develop and test this new functionality, to
safeguard against any such risk. Furthermore, the extension would allow
the Exchange to implement the halt reopening changes after the Russell
Rebalance, a significant market event occurring in June 2020, and for
which the Exchange will reduce the number of changes to its systems.
The Exchange has historically limited rolling out new functionality
before the Russell Rebalance to mitigate the operational risk of
introducing technology changes before this significant market event.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\5\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\6\ 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 by
providing the Exchange additional time to implement SR-NASDAQ-2020-012.
As discussed above, the proposed delay is in recognition of both the
recent market volatility and upcoming annual Russell Rebalance in June
2020. The Exchange believes that the extension would therefore allow
the Exchange to mitigate any potential risks to the market and the
operation of its systems by limiting the implementation of new
functionality until after the Russell Rebalance, which, in turn,
protects investors and the public interest.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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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 Exchange's proposal to
delay the implementation of SR-NASDAQ-2020-012 does not impose an undue
burden on competition. Delaying the implementation will simply allow
the Exchange additional time to properly plan and implement SR-NASDAQ-
2020-012.
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 \7\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\8\
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\7\ 15 U.S.C. 78s(b)(3)(A)(iii).
\8\ 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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A proposed rule changed filed under Rule 19b-4(f)(6) \9\ normally
does not become operative prior to 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6),\10\ the Commission may designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has asked the
Commission to waive the 30-day operative delay so that the proposal may
become operative immediately upon filing. The Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest because doing so will allow the
Exchange to adjust its testing schedule and develop and test the new
auction functionality adequately prior to implementation.\11\
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\9\ 17 CFR 240.19b-4(f)(6).
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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-2020-023 on the subject line.
[[Page 27791]]
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-2020-023. 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 (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-2020-023 and
should be submitted on or before June 1, 2020.
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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\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-09959 Filed 5-8-20; 8:45 am]
BILLING CODE 8011-01-P