
[Federal Register Volume 78, Number 249 (Friday, December 27, 2013)]
[Notices]
[Pages 79033-79035]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-30967]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71167; File No. SR-NASDAQ-2013-160]


Self-Regulatory Organizations; The NASDAQ Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Modify the Definition of ``System Securities'' in NASDAQ Rule 4751

December 20, 2013.
    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 December 19, 2013, 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 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 definition of ``System 
Securities'' set forth in NASDAQ Rule 4751.

[[Page 79034]]

    The text of the proposed rule change is available from NASDAQ's Web 
site at http://nasdaq.cchwallstreet.com/Filings/, 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to modify the definition of ``System 
Securities'' set forth in NASDAQ Rule 4751(b) to clarify that while all 
securities covered by the Consolidated Tape Association Plan and 
Consolidated Quotation Plan (``CT/CQ Securities'') are eligible to be 
traded on NASDAQ and NASDAQ intends to trade all CT/CQ Securities, 
NASDAQ will not trade certain securities within that class. By making 
both a ``positive'' and a ``negative'' designation, NASDAQ will clearly 
signal to its members and to investors that NASDAQ intends to trade 
certain CT/CQ Securities and not to trade others, and which securities 
fall into each category.
    NASDAQ proposes to effectuate this designation by maintaining a 
list on the www.nasdaqtrader.com Web site of securities that are 
excluded from this designation and thus excluded from trading on 
NASDAQ. The NasdaqTrader Web site is the primary mechanism for NASDAQ 
to communicate with its members about trading on the exchange. NASDAQ 
members already receive daily information from the Web site including a 
daily list of active System Securities, as well as a list of corporate 
actions and other trading information. Adding a list of CT/CQ 
securities that are excluded from trading will be an effective 
complement to the daily information already provided. The rules of 
other exchanges also provide a designation process that clearly 
contemplates the trading of less than all eligible securities (see, 
e.g., BATS Rule 11.2).
2. Statutory Basis
    The Exchange 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 
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 
transaction 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, and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(5).
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    NASDAQ believes that the proposal is consistent with the Act in 
that it provides for greater clarity about the securities traded on the 
Exchange and, thereby, enhances the Exchange and the national market 
system. The proposal does not permit unfair discrimination; rather all 
designated securities may be traded by all members in a free and open 
market. The proposal does not unfairly discriminate against securities 
that will not trade on NASDAQ. NASDAQ is not obligated by the Exchange 
Act to extend unlisted trading privileges to all CT/CQ Securities. 
Additionally, all CT/CQ Securities will continue to trade on their 
listing market and on numerous other exchanges that have extended 
unlisted trading privileges to them.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange 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. The 
proposed change will simply clarify the manner by which NASDAQ extends 
unlisted trading privileges to CT/CQ Securities, a practice provided 
for under the Act and already exercised by NASDAQ. CT/CQ Securities 
will continue to be subject to meaningful competition because they will 
trade on their listing market and on numerous exchanges that have 
extended unlisted trading privileges to them.

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A) of the Act \5\ and Rule 19b-4(f)(6) thereunder.\6\ Because 
the 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, the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) 
thereunder.\7\
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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)(iii) 
requires the Exchange to give the Commission written notice of the 
Exchange's intent to file the proposed rule change, along with a 
brief description and text of 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.
    \7\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \8\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\9\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become effective and operative 
immediately. According to the Exchange, the proposal is designed to 
provide clarity about securities traded on the Exchange. The Exchange 
noted that it is not obligated by the Act to extend unlisted trading 
privileges to all CT/CQ Securities. Additionally, all CT/CQ Securities 
will continue to trade on their listing market and on other exchanges 
that have extended unlisted trading privileges to them. Based on the 
Exchange's statements, the Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Therefore, the Commission

[[Page 79035]]

designates the proposal as operative upon filing.\10\
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    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has also 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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings under Section 19(b)(2)(B) \11\ 
of the Act to determine whether the proposed rule should be approved or 
disapproved.
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    \11\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2013-160 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-2013-160. 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, 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; 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-2013-160 and should 
be submitted on or before January 17, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-30967 Filed 12-26-13; 8:45 am]
BILLING CODE 8011-01-P


