
[Federal Register Volume 81, Number 199 (Friday, October 14, 2016)]
[Notices]
[Pages 71143-71146]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24834]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79075; File No. SR-Nasdaq-2016-126]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing of Partial Amendment Nos. 1, 2 and 3, and Order 
Granting Accelerated Approval of a Proposed Rule Change, as Modified by 
Partial Amendment Nos. 1, 2 and 3, to System Functionality Necessary To 
Implement the Regulation NMS Plan To Implement a Tick Size Pilot 
Program

October 7, 2016.

I. Introduction

    On September 7, 2016, The Nasdaq Stock Market LLC (``Exchange'' or 
``Nasdaq'') filed with the Securities and Exchange Commission (``SEC'' 
or ``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Exchange Act'' or ``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to adopt paragraph (d) and 
Commentary .12 to Nasdaq Rule 4770 to change System \3\ functionality 
necessary to implement the Regulation NMS Plan to Implement a Tick Size 
Pilot Program (``Plan'' or ``Pilot'').\4\ The Exchange is also 
proposing amendments to Nasdaq Rule 4770(a) and (c) to clarify certain 
exceptions to the Trade-at Prohibition.\5\ The proposed rule change was 
published for comment in the Federal Register on September 20, 2016.\6\ 
The Commission received two comment letters in response to the 
Notice.\7\ On September 29, 2016, the Exchange filed Partial Amendment 
No. 1 to the proposed rule change.\8\ On October 4, 2016, the Exchange 
filed Partial Amendment No. 2 to the proposed rule change.\9\ On 
October 7, 2016, the

[[Page 71144]]

Exchange filed Partial Amendment No. 3 to the proposed rule change.\10\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The term ``System'' is defined as the automated system for 
order execution and trade reporting owned and operated by Nasdaq. 
See Nasdaq Rule 4701(a).
    \4\ See Securities Exchange Act Release No. 74892 (May 6, 2015), 
80 FR 27513 (May 13, 2015) (``Approval Order''). Unless otherwise 
specified, capitalized terms used in this rule filing are defined as 
set forth in the Plan.
    \5\ Nasdaq Rule 4770(c)(3)(D)(i) defines the ``Trade-at 
Prohibition'' as the prohibition against executions by a Trading 
Center of a sell order for a Pilot Security at the price of a 
Protected Bid or the execution of a buy order for a Pilot Security 
at the price of a Protected Offer during regular trading hours. See 
also Plan Section VI(D).
    \6\ Securities Exchange Act Release No. 78837 (September 14, 
2016), 81 FR 64544 (``Notice'').
    \7\ See Letters to Brent J. Fields, Secretary, Commission, from 
Elizabeth K. King, General Counsel and Corporate Secretary, New York 
Stock Exchange, Inc.; Eric Swanson, EVP, General Counsel and 
Secretary, BATS Global Markets, Inc.; Thomas A. Wittman, EVP, Global 
Head of Equities, Nasdaq, Inc., dated September 9, 2016 (``Comment 
Letter No. 1'') and from Eric Swanson, EVP, General Counsel and 
Secretary, BATS Global Markets, Inc., dated September 12, 2016 
(``Comment Letter No. 2'').
    \8\ In Partial Amendment No. 1, the Exchange proposes to change 
references in the rule text from ``added to the Nasdaq Book'' to 
``ranked on the Nasdaq Book'' as applicable for Price to Comply 
Orders, Non-Displayed Orders, Post-Only Orders, and Orders with 
Reserve Size. The Exchange also proposes to clarify that in certain 
cases Price to Comply Orders, not attributable Post-Only Orders, and 
certain Orders with Reserve Size may be ranked on the Nasdaq Book at 
the midpoint of the National Best Bid or Offer (``NBBO''). Finally, 
the Exchange proposes three amendments related to the operation of 
Reserve Size for Test Group Three Pilot Securities: (i) Change 
references from ``Reserve Order'' to ``Order with Reserve Size''; 
(ii) clarify that the Reserve Size attribute is only available for 
Price to Comply Orders and Price to Display Orders entered via the 
RASH FIX, or QIX protocols; and (iii) clarify the handling of Orders 
with Reserve Size in scenarios where such Orders are entered at a 
price that locks a Protected Quotation on an away market center.
    \9\ In Partial Amendment No. 2, the Exchange proposes to delete 
certain rule text to remove the proposed re-pricing functionality 
for resting Price to Comply Orders, resting Non-Displayed Orders, 
and resting Post-Only Orders entered via OUCH or FLITE protocols for 
Test group Three Pilot Securities. The Exchange explained that its 
systems were re-programmed for Test Group Three Pilot Securities to 
permit resting Price to Comply Orders, resting Non-Displayed Orders, 
and resting Post-Only Orders entered via OUCH or FLITE protocols to 
repeatedly re-price in response to changes to the NBBO and/or the 
Nasdaq best Bid or Offer (``BBO''). Nasdaq noted that it is 
currently re-programming its systems to remove the proposed 
functionality. Further, Nasdaq stated that if it appears that the 
multiple re-pricing functionality will remain operational by October 
17, 2016, the Exchange will file a proposed rule change with the 
Commission and provide notice to market participants sufficiently in 
advance of that date. The proposed rule change and notice to market 
participants will describe the current operation of the systems and 
timing of re-programming. In any event, Nasdaq states that the 
removal of this functionality shall be completed no later than 
November 30, 2016. In addition, the Exchange proposes to modify the 
Block Size Order exception to the Trade-at Prohibition. Finally, the 
Exchange is making certain non-substantive, clarifying amendments.
    \10\ In Partial Amendment No. 3, the Exchange clarifies that it 
would not apply the Trade-at Prohibition outside of Regular Trading 
Hours.
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    This order provides notice of filing of Partial Amendment Nos. 1, 2 
and 3, and approves the proposal, as modified by Partial Amendment Nos. 
1, 2 and 3, on an accelerated basis.

II. Description of the Amended Proposal

    The Exchange's proposed rule change provides for changed 
functionality to certain Order Types \11\ and Order Attributes \12\ 
applicable to Pilot Securities to implement the Plan. Proposed Nasdaq 
Rule 4770(d) would specify the order handling, executing, re-pricing 
and displaying for the following Order Types in Pilot Securities: (i) 
Price to Comply Orders; (ii) Non-Displayed Orders; (iii) Post-Only 
Orders; (iv) Midpoint Peg Post-Only Orders; (v) Supplemental Orders; 
and (vi) Market Maker Peg Orders. The following Order Attributes would 
also be amended: (i) Midpoint Pegging; (ii) Reserve Size; and (iii) 
Good-till-Cancelled. In addition, amended Nasdaq Rule 4770(d)(1) 
specifies that any Order Type in a security of any of the Test Groups 
that requires a price and does not qualify for an exception, will not 
be accepted if it is in a minimum price increment (``MPI'') other than 
$0.05.\13\
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    \11\ An ``Order Type'' is a standardized set of instructions 
associated with an order that define its behavior with respect to 
pricing, execution, and/or posting to the Nasdaq Book when submitted 
to the System. See Nasdaq Rule 4701(e).
    \12\ An ``Order Attribute'' is a further set of variable 
instructions that may be associated with an Order to further define 
how it will behave with respect to pricing, execution, and/or 
posting to the Exchange Book when submitted to the System. See 
Nasdaq Exchange Rule 4701(e). The availability of, and interaction 
between, Order Types and Order Attributes is described in Nasdaq 
Rules 4702 and 4703.
    \13\ Proposed Nasdaq Rule 4770(d)(1) clarifies that the System 
will use $0.05 as the MPI when re-pricing or rounding by the System.
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    The Exchange also proposes to amend the definition of the term 
``Trade-at Intermarket Sweep Order'' (``TA ISO'') and one of the TA ISO 
exceptions to the Trade-at Prohibition.\14\ Finally, the Exchange is 
proposing to modify the Block Size Order exception to the Trade-at 
Prohibition and add a related commentary.\15\
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    \14\ See proposed Nasdaq Rule 4770(a)(1)(D)(ii) and proposed 
Nasdaq Rule 4770(c)(3)(D)(iii)(j).
    \15\ See proposed Nasdaq Rule 4770(c)(3)(D)(iii)(c) and Nasdaq 
Rule 4770, proposed Commentary .12.
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A. Amendments to Order Type Functionality

1. Price To Comply Orders \16\
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    \16\ See proposed Nasdaq Rule 4770(d)(2). See also Partial 
Amendment No. 2.
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    The Exchange proposes that a Price to Comply Order in a Test Group 
Pilot Security would operate consistent with current Nasdaq Rule 
4702(b)(1) except as provided below. Specifically, if a Price to Comply 
Order for a Test Group Three Pilot Security partially executes on entry 
and the remainder would lock the Protected Quotation of another market 
center, the unexecuted portion of the Order would be cancelled. In 
addition, if a Price to Comply Order for a Test Group Three Pilot 
Security to buy (sell) is not executable against any orders residing on 
the Nasdaq Book and its limit price would lock or cross the Protected 
Quotation of another market center, the Order would display at one MPI 
below (above) the Protected Quotation and be ranked at the current 
midpoint of the NBBO on the Nasdaq Book.\17\
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    \17\ See Partial Amendment No. 1.
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2. Non-Displayed Orders \18\
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    \18\ See proposed Nasdaq Rule 4770(d)(3). See also Partial 
Amendment No. 2.
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    The Exchange proposes that a Non-Displayed Order in a Test Group 
Pilot Security would operate consistent with current Nasdaq Rule 
4702(b)(3) except as provided below. Specifically, a resting Non-
Displayed Order in a Test Group Three Pilot Security could not execute 
at the price of a Protected Quotation of another market center unless 
the incoming Order qualifies for an exception to the Trade-at 
Prohibition.\19\ In addition, for Test Group Three Pilot Securities, if 
the limit price of a buy (sell) Non-Displayed Order would lock or cross 
a Protected Quotation of another market center, the Order would be 
ranked on the Nasdaq Book at either one MPI below (above) the National 
Best Offer (``NBO'') ((National Best Bid) (``NBB'')) or at the midpoint 
of the NBBO, whichever is higher (lower).\20\ Further, for a Non-
Displayed Order in a Test Group Three Pilot Security, entered via RASH, 
QIX or FIX, if after being posted to the Nasdaq Book the NBBO changes 
such that the Order would not be executable at its posted price due to 
the requirements of Regulation NMS or the Plan, the Non-Displayed Order 
to buy (sell) would be re-priced to either one MPI below (above) the 
NBO (NBB) or the midpoint of the NBBO, whichever is higher (lower) and 
receive a new timestamp. In the same scenario, if the Non-Displayed 
Order was entered via OUCH or FLITE, instead of re-pricing, the Order 
would be cancelled back to the Participant.
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    \19\ See Nasdaq Rule 4770(c)(3)(D).
    \20\ See Partial Amendment No. 1.
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3. Post-Only Orders \21\
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    \21\ See proposed Nasdaq Rule 4770(d)(4). See also Partial 
Amendment No. 2.
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    The Exchange proposes that Post-Only Orders will operate consistent 
with current Nasdaq Rule 4702(b)(4) except as provided below. 
Specifically, for a not attributable Post-Only Order for a Test Group 
Three Pilot Security, if the limit price to buy (sell) would lock or 
cross a Protected Quotation of another market center, the Order would 
display at one MPI below (above) the Protected Quotation and would be 
ranked at the current midpoint of the NBBO on the Nasdaq Book.\22\
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    \22\ See Partial Amendment No. 1.
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4. Midpoint Peg Post-Only Orders \23\
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    \23\ See proposed Nasdaq Rule 4770(d)(5).
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    The Exchange proposes that a Midpoint Peg Post-Only Order in a Test 
Group Pilot Security will operate consistent with current Nasdaq Rule 
4702(b)(5) and may execute at the midpoint of the NBBO in an increment 
other than the MPI.
5. Supplemental Orders \24\
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    \24\ See proposed Nasdaq Rule 4770(d)(6).
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    The Exchange proposes that Supplemental Orders for Test Group One 
and Test Group Two Pilot Securities will operate consistent with 
current Nasdaq Rule 4702(b)(6). In addition, the Exchange proposes to 
not accept Supplemental Orders for Test Group Three Pilot Securities.
6. Market Maker Peg Orders \25\
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    \25\ See proposed Nasdaq Rule 4770(d)(7).
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    The Exchange proposes that a Market Maker Peg Order in a Test Group 
Pilot Security will operate consistent with current Nasdaq Rule 
4702(b)(7), except the displayed price of such an Order would be 
rounded up for bids (down for offers) to the nearest MPI (i.e., $0.05) 
if it would otherwise display at an increment smaller than the MPI.

B. Amendments To Order Attribute Functionality

1. Midpoint Pegging \26\
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    \26\ See proposed Nasdaq Rule 4770(d)(8).
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    The Exchange proposes that an Order with a Midpoint Pegging 
attribute in a Test Group Pilot Security will operate consistent with 
current Nasdaq Rule 4703(d). The Exchange also specifies that such 
Orders may execute at the midpoint of the NBBO in an increment other 
than the MPI.

[[Page 71145]]

2. Reserve Size \27\
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    \27\ See proposed Nasdaq Rule 4770(d)(9). See also Partial 
Amendment No. 1.
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    The Exchange proposes that an Order with Reserve Size in a Test 
Group Pilot Security will operate consistent with current Nasdaq Rule 
4703(h) except as described below. Specifically, a resting Order with 
Reserve Size in a Test Group Three Pilot Security (i.e., a Price to 
Comply Order or a Price to Display Order entered via RASH, FIX or QIX) 
may not execute the non-displayed Reserve Size at the price of a 
Protected Quotation of another market center unless the incoming Order 
qualifies for an exception to the Trade-at Prohibition.\28\ If an Order 
with Reserve Size for a Test Group Three Pilot Security is partially 
executed upon entry and the remainder would lock a Protected Quotation 
of another market center, the unexecuted portion of the Order would be 
cancelled. If a Price to Comply Order with Reserve Size to buy (sell) a 
Test Group Three Pilot Security is not executable against previously 
posted Orders on the Nasdaq Book, and has a limit price that would lock 
or cross a Protected Quotation of another market center, the displayed 
portion of the Order would display one MPI below (above) the Protected 
Quotation, and the displayed and non-displayed portions of the Order 
would be ranked at the current midpoint of the NBBO on the Nasdaq Book. 
If a Price to Display Order with Reserve Size is not executable against 
any previously posted Orders on the Nasdaq Book and its limit price 
would lock or cross a Protected Quotation of another market center, 
then the displayed portion of the Order would be displayed and ranked 
one MPI below (above) the Protected Quotation and the non-displayed 
portion of the Order would be ranked at the midpoint of the NBBO. If 
after being posted to the Exchange Book, the NBBO changes such that an 
Order with Reserve Size was not executable at its ranked price due to 
the requirements of Regulation NMS or the Plan, the Order would adjust 
as described above.
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    \28\ See Nasdaq Rule 4770(c)(3)(D).
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3. Good-Till-Cancelled \29\
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    \29\ See proposed Nasdaq Rule 4770(d)(10).
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    The Exchange proposes that an Order with a Time-in-Force of Good-
till-Cancelled in a Test Group Pilot Security will operate consistent 
with current Nasdaq Rule 4703(a)(3) except such Order would be adjusted 
based on a $0.05 increment.

C. Amendments to Certain Trade-at Prohibition Exceptions

1. TA ISO \30\
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    \30\ See proposed Nasdaq Rule 4770(a)(1)(D)(ii).
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    The Exchange proposes to add the phrase ``or Intermarket Sweep 
Orders'' (``ISO'') to the definition of TA ISO as well as to the 
related TA ISO exception to the Trade-at Prohibition \31\ to clarify 
that ISOs may be routed to execute against the full displayed size of 
the Protected Quotation that was traded at.
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    \31\ See proposed Nasdaq Rule 4770(c)(3)(D)(iii)(j).
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2. Block Size Order Exception for the Trade-at Prohibition \32\
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    \32\ See proposed Nasdaq Rule 4770(c)(3)(D)(iii)(c) and Nasdaq 
Rule 4770, proposed Commentary .12.
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    Currently, Nasdaq Rule 4770(c)(3)(D)(iii)(c) provides an exception 
to the Trade-at Prohibition for Block Size Orders.\33\ The Exchange 
proposes in Commentary .12 that for purposes of qualifying for the 
exception Orders must have a size of 5,000 shares or more and the 
resulting execution upon entry is for a size of 5,000 shares or more in 
aggregate. In addition, Nasdaq proposes to amend the Block Size Order 
exception to the Trade-at Prohibition to allow execution on multiple 
Trading Centers to comply with Regulation NMS.\34\
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    \33\ The plan defines Block Size as ``an order (1) of at least 
5,000 shares or (2) for a quantity of stock having a market value of 
at least $100,000. See Plan Section I(F).
    \34\ See proposed Nasdaq Rule 4770(c)(3)(D)(iii)(c). See also 
Partial Amendment No. 2.
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III. Summary of Comments Received \35\
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    \35\ See supra note 7.
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    Both comment letters express support for the proposal and suggest 
that the Commission should approve the proposal. In Comment Letter No. 
1, the commenters stated that if the proposal is approved as proposed, 
then the Exchange would be able to meet the implementation date. 
Further, in Comment Letter No. 1, the commenters stated their belief 
that the requirements from the Commission have been unclear. In Comment 
Letter No. 2, the commenter questioned the Commission staff's 
authority.

IV. Discussion and Commission's Findings

    After careful review of the proposed rule change, as modified by 
Partial Amendment Nos. 1, 2 and 3, and the comment letters, the 
Commission finds that the proposal, as modified by Partial Amendment 
Nos. 1, 2 and 3, is consistent with the requirements of the Act, Rule 
608 of Regulation NMS,\36\ and the rules and regulations thereunder 
that are applicable to a national securities exchange.\37\ 
Specifically, the Commission finds that the rule change is consistent 
with Section 6(b)(5) of the Act,\38\ which requires that the rules of a 
national securities exchange be designed, among other things, to 
prevent fraudulent and manipulative acts and practices, 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 to protect investors and the public interest; and are not designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
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    \36\ 17 CFR 242.608.
    \37\ In approving this rule change, the Commission has 
considered the rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \38\ 15 U.S.C. 78f(b)(5).
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    As noted in the Approval Order, the Plan is by design, an 
objective, data-driven test to evaluate how a wider tick size would 
impact trading, liquidity, and market quality of securities of smaller 
capitalization companies. In addition, the Plan is designed with three 
Test Groups and a Control Group, to allow analysis and comparison of 
incremental market structure changes on the Pilot Securities and is 
designed to produce empirical data that could inform future policy 
decisions. As such, any proposed changes targeted at particular Test 
Groups during the Pilot Period should be necessary for compliance with 
the Plan.
    The Exchange proposes to modify its handling of certain Order Types 
and Order Attributes during the Pilot Period. First, the Exchange 
proposes to clarify that it will not accept Orders in a Test Group 
Pilot Security in an increment other than $0.05 unless there is an 
applicable exception to the MPI. Second, the Exchange proposes to 
clarify that the displayed price of Market Maker Peg Orders for any 
Test Group Pilot Security would be rounded to the nearest MPI and that 
Good-till-Cancelled Orders for a Test Group Pilot Security would be 
adjusted based on the $0.05 increment. Finally, the Exchange proposes 
to clarify that Midpoint Peg Post-Only Orders and Orders with the 
Midpoint Pegging Attribute in a Test Group Pilot Security may execute 
at the midpoint of the NBBO in an increment other than the MPI.
    The Exchange also proposes to modify the handling of certain Orders 
and Order Attributes in Test Group Three Pilot Securities, including: 
(i) Price to Comply Orders, (ii) Non-Displayed Orders, (iii) Post-Only 
Orders; (iv) Supplemental Orders, and (v) Orders

[[Page 71146]]

with Reserve Size. The proposed changes are intended to facilitate 
compliance with the Trade-at Prohibition.\39\
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    \39\ In Partial Amendment No. 3, the Exchange clarified that it 
would not apply the Trade-at Prohibition outside of Regular Trading 
Hours. The Commission notes that this is consistent with the Plan. 
See Plan Section I(LL).
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    Finally, the Exchange proposes to amend provisions related to two 
exceptions to the Trade-at Prohibition. First, the Exchange proposes to 
amend the definition of TA ISO to reflect that ISOs may be routed to 
the full displayed size of a Protected Quotation that is traded-at and 
to make the corresponding change to the applicable Trade-at Prohibition 
exception. Second, the Exchange proposes to amend the Trade-at 
Prohibition exception for Block Size Orders to allow such Orders to be 
executed on multiple Trading Centers. Further, the Exchange proposes 
that for purposes of the Block Size Order exception to the Trade-at 
Prohibition, the Order must have a size of 5,000 shares and the 
resulting execution upon entry must have a size of 5,000 shares or more 
in aggregate.\40\
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    \40\ See also Exchange Rule 4770(c)(3)(D)(iii)(c).
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    The Commission believes that the proposed changes are reasonably 
designed to comply with the Plan. Further, the Commission believes that 
the proposed changes that target particular Test Groups are necessary 
for compliance with the Plan.\41\ Accordingly, the Commission finds 
that these changes are consistent with Section 6(b)(5) of the Act \42\ 
and Rule 608 of Regulation NMS \43\ because they implement the Plan and 
clarify Exchange Rules.
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    \41\ The Commission notes that the Exchange originally proposed 
to modify the operation of Post to Comply Orders, Non-Displayed 
Orders, and Post Only Orders entered via OUCH and FLITE for Test 
Group Three Pilot Securities only. In Partial Amendment No. 2, the 
Exchange proposes to remove the proposed functionality. Thus, the 
Commission believes that the proposal, as modified, is consistent 
with the Plan. The Exchange has committed to make the system changes 
necessary to implement Partial Amendment No. 2. If it appears that 
the system changes will not be completed by October 17, 2016, the 
date on which the Participants will begin implementation of Test 
Group 3, Nasdaq will file a proposed rule change with the Commission 
to propose any necessary changes to the Exchange's rules, and 
provide notice to market participants sufficiently in advance of 
this date to adequately inform market participants of the current 
operation of Nasdaq's systems. See Partial Amendment No. 2.
    \42\ 15 U.S.C. 78f(b)(5).
    \43\ 17 CFR 242.608.
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    For these reasons, the Commission finds that the proposed rule 
change, as modified by Partial Amendment Nos. 1, 2 and 3, is consistent 
with the requirements of the Act \44\ and Rule 608 of Regulation 
NMS.\45\
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    \44\ 15 U.S.C. 78f(b)(5).
    \45\ 17 CFR 242.608.
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V. Solicitation of Comments on Partial Amendment Nos. 1, 2 and 3 to the 
Proposed Rule Change

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal, as 
modified by Partial Amendment Nos. 1, 2 and 3, 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-2016-126 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-2016-126. 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 20549-1090, on official business days between the hours 
of 10:00 a.m. and 3:00 p.m. Copies of such filing will also 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-2016-126 and should be submitted on or before November 4, 2016.

VI. Accelerated Approval of Proposed Rule Change, as Modified by 
Partial Amendment Nos. 1, 2 and 3

    The Commission finds good cause to approve the proposed rule 
change, as modified by Partial Amendment Nos. 1, 2 and 3, prior to the 
thirtieth day after the date of publication of notice of the proposed 
rule change, as modified by Partial Amendment Nos. 1, 2 and 3 in the 
Federal Register. As described above, the Exchange proposes to amend 
its rules to comply with the Plan. The Commission notes that the Pilot 
started implementation on October 3, 2016, and accelerated approval of 
the proposal would ensure that the rules of the Exchange would be in 
place during implementation. Accordingly, the Commission finds good 
cause, pursuant to Section 19(b)(2) of the Exchange Act,\46\ to approve 
the proposed rule change, as modified by Partial Amendment Nos. 1, 2 
and 3, on an accelerated basis.
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    \46\ 15 U.S.C. 78s(b)(2).
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VII. Conclusion

    It is therefore ordered that, pursuant to Section 19(b)(2) of the 
Exchange Act,\47\ that the proposed rule change (SR-NASDAQ-2016-126), 
as modified by Partial Amendment Nos. 1, 2 and 3, be and hereby is 
approved on an accelerated basis.
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    \47\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\48\
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    \48\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-24834 Filed 10-13-16; 8:45 am]
 BILLING CODE 8011-01-P


