
[Federal Register: June 23, 2008 (Volume 73, Number 121)]
[Notices]               
[Page 35429-35430]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23jn08-88]                         


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57977; File No. SR-NASDAQ-2008-052]

 
Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify the Opening of Trading on the NASDAQ Options Market

June 17, 2008.
    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 June 12, 2008, The NASDAQ Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been substantially prepared by the 
Exchange. Nasdaq has filed the proposal pursuant to section 19(b)(3)(A) 
of the Act \3\ and Rule 19b-4(f)(5) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(5).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Nasdaq proposes to modify the opening of trading on the NASDAQ 
Options Market (``NOM'') as set forth in Chapter VI, section 8 of the 
Nasdaq Rules governing options trading. The text of the proposed rule 
change is available at Nasdaq, the Commission's Public Reference Room, 
and http://nasdaq.complinet.com.

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
    Nasdaq proposes to modify Chapter VI, section 8 of the rules 
governing NOM, and in particular governing the opening of trading in 
that market. Since Nasdaq launched NOM on March 31, 2008, Nasdaq has 
monitored the operation of the market to identify instances where 
market efficiency can be enhanced. On May 13, 2008, Nasdaq filed SR-
NASDAQ-2008-045, a rule change designed to enhance the opening by 
delaying the opening until such time as the execution of the Opening 
Cross or, where no Opening Cross will occur, the opening print is in 
line with the overall marketplace.\5\
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    \5\ See Securities Exchange Act Release No. 57822 (May 15, 
2008), 73 FR 29800 (May 22, 2008).
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    Currently, the opening is delayed if the Nasdaq Best Bid and Offer 
(``Nasdaq BBO'') after execution of the opening print would be wider 
than pre-determined authorized trading thresholds as prescribed in the 
obvious error guidelines set forth in Chapter V, Sec. 6 of the NOM 
rules. This change has reduced the instances of erroneous trades 
occurring at the beginning of the trading day.
    While Nasdaq believes that the opening of the market is quite 
effective, it also believes that it can be further enhanced in 
instances where there is insufficient trading interest to conduct an 
Opening Cross. Specifically, Nasdaq proposes to allow the opening of 
trading in those instances where trading interest at the National Best 
Bid and Offer (``NBBO''), which includes the non-firm Nasdaq BBO, is 
within the currently authorized trading thresholds. Except for 
executions arising from the Opening Cross, executions shall only be 
permitted if they will not result in a trade-through violation of the 
NBBO as described in Chapter VI, Sec. 7(b)(3)(C) of the NOM rules. 
Nasdaq believes that this change will allow it to open more series 
earlier in the trading day without risk of additional erroneous trades.
    Nasdaq believes that analyzing both NBBO and Nasdaq BBO when 
determining to open trading will enhance the opportunities for market 
participants to execute trades at the beginning of the trading day and 
encourage the addition of additional potentially executable trading 
interest.
2. Statutory Basis
    Nasdaq believes that the proposed rule change is consistent with 
the provisions of section 6(b) of the Act,\6\ in general, and with 
section 6(b)(5) of the Act,\7\ in particular, in that it is designed 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. Nasdaq believes that the proposal is 
consistent with this standard because the proposed rule change is 
designed to improve execution quality at the critical opening of the 
market.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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. To the contrary, Nasdaq 
believes that by enhancing NOM's opening of trading, the proposed rule 
change will require competing markets to improve their opening 
processes and thereby enhance competition between the markets.

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 proposed rule change does not: (1) Significantly affect 
the protection of investors or the public interest; (2) impose any 
significant burden on competition; and (3) have the effect of limiting 
the access to or availability of an existing order entry or trading 
system of the Exchange, the foregoing rule change has become effective 
immediately pursuant to section 19(b)(3)(A)(iii) of the Act \8\ and 
Rule 19b-4(f)(5) thereunder.\9\ At any time within 60 days of the 
filing of the proposed rule change, the Commission may summarily 
abrogate 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.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(5).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing,

[[Page 35430]]

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 e-mail to rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2008-052 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-2008-052. 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 inspection 
and copying 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 Nasdaq. 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-2008-052 and should 
be submitted on or before July 14, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E8-14105 Filed 6-20-08; 8:45 am]

BILLING CODE 8010-01-P
