[Federal Register Volume 84, Number 186 (Wednesday, September 25, 2019)]
[Notices]
[Pages 50521-50525]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20710]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-87031; File No. SR-NASDAQ-2019-073]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Concerning the Operation of the Nasdaq Opening, Halt and Closing 
Crosses

September 19, 2019.
    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 September 5, 2019, The Nasdaq Stock Market LLC (``Nasdaq'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'')

[[Page 50522]]

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 clarify its rules concerning the operation 
of the Nasdaq Opening, Halt and Closing Crosses, and to make certain 
corrective changes to Rules 4702, 4703, 4752, 4753, 4754, and 4763.
    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.

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 is proposing to amend Rules 4752, 4753 and 4754, 
concerning the operation of the Nasdaq Opening, Halt and Closing 
Crosses, respectively, to make them more efficient, and to make 
corrective and clarifying changes. The Exchange is also making a 
related change to Rule 4763(e)(2) concerning the repricing of short 
sale Orders that are Limit-on-Open (``LOO''),\3\ Market-on-Open 
(``MOO''),\4\ Limit-on-Close (``LOC''),\5\ or Market-on-Close 
(``MOC'').\6\ Last, the Exchange is making corrective changes to Rules 
4702(b) and 4703(l).
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    \3\ See Rule 4752(a)(3).
    \4\ See Rule 4752(a)(4).
    \5\ See Rule 4754(a)(4).
    \6\ See Rule 4754(a)(5).
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New Rules 4752(d)(2)(G), 4753(b)(2)(E) and 4754(b)(2)(F)
    Rules 4752(d)(2), 4753(b)(2) and 4754(b)(2) describe the steps 
followed in establishing the prices in the Nasdaq Opening, Halt and 
Closing Crosses, respectively. A Post-Only Order is an Order Type 
designed to have its price adjusted as needed to post to the Nasdaq 
Book in compliance with Rule 610(d) under Regulation NMS by avoiding 
the display of quotations that lock or cross any Protected Quotation 
\7\ in a System Security \8\ during Market Hours,\9\ or to execute 
against locking or crossing quotations in circumstances where 
economically beneficial to the Participant \10\ entering the Post-Only 
Order.\11\ A Post-Only Order may participate in the Nasdaq Opening 
Cross, Nasdaq Halt Cross and/or the Nasdaq Closing Cross.\12\
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    \7\ See Rule 4701(j).
    \8\ See Rule 4701(b).
    \9\ See Rule 4701(g).
    \10\ See Rule 4701(c).
    \11\ See Rule 4702(b)(4).
    \12\ See Rule 4702(b)(4)(C). The Exchange is proposing to 
eliminate text from the rule that states that only Post-Only Orders 
entered through OUCH and FLITE protocols may participate in the 
Nasdaq Opening and/or Closing Crosses. This rule text was mistakenly 
adopted when amendments were made to the rule. See Securities 
Exchange Act Release No. 75252 (June 22, 2015), 80 FR 36865 (June 
26, 2015) (SR-NASDAQ-2015-024). Any of the Order entry protocols may 
be used to enter Post-Only Orders eligible to participate in the 
Nasdaq Opening and/or Closing Crosses.
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    The Exchange is adopting new rule text under Rules 4752(d)(2)(G), 
4753(b)(2)(E) and 4754(b)(2)(F) that describes how the Exchange prices 
the Nasdaq Opening, Halt and Closing Crosses when the Cross would 
otherwise be priced by a partial execution of an Order deemed to have a 
price at one minimum increment away from a Post-Only Order pursuant to 
Rule 4703(l). Rule 4703(l) describes the Order Attribute that allows an 
Order to participate in the Nasdaq Opening, Halt or Closing 
Crosses,\13\ including the process for pricing an Order that is locked 
or crossed at its non-displayed price by a Post-Only Order. 
Specifically, an Order to buy (sell) that is locked or crossed at its 
non-displayed price by a Post-Only Order on the Nasdaq Book shall be 
deemed to have a price at one minimum price increment \14\ below 
(above) the price of the Post-Only Order for the purposes of the Cross 
price calculation.
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    \13\ The Exchange is proposing to correct Rule 4703(l) by 
including the Nasdaq Halt Cross in the rule. As described in the 
proposal, the Nasdaq Halt Cross was erroneously omitted from the 
rule.
    \14\ See Rule 4701(k).
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    Currently, if the Opening, Halt \15\ or Closing Cross would 
otherwise occur at the ``deemed price'' of an Order that is locked or 
crossed at its non-displayed price by a Post-Only Order pursuant to 
Rule 4703(l), and that Order would not execute in full during the 
Cross, then Cross price is instead adjusted to the price of the Order's 
original ranked price. The new rule text clarifies the current approach 
to setting the Cross price in situations where there is a partial 
execution of an Order that is deemed to have a price at one minimum 
price increment away from a Post-Only Order. Consider an example where 
the NBBO is $10.00 x $10.01 and resting on the Nasdaq book are Order 
#1, a MOC Order to buy 500 shares, Order #2, a MOC Order to sell 300 
shares, Order #3, a Non-Displayed Order to sell 100 shares at $10.01, 
and Order #4 a Non-Displayed Order to sell 300 shares at $10.00. If 
Order #4 is subsequently locked by Order #5, a Post-Only Order to buy 
100 shares at $10.00, then for purposes of the Cross price calculation, 
Order #4 would be deemed to have a price of $10.01, where it is 
presented for execution ahead of Order #3, reflecting its price 
priority on the Nasdaq book.\16\ Per Nasdaq's Cross calculation 
language,\17\ $10.01 would be selected as the Cross price as it 
maximizes paired shares (i.e., Orders #1 and #2 are executed in full 
and Order #4 is executed partially). But because Order #4 would not 
execute in full at this price, the Cross price is instead adjusted to 
$10.00. The Cross would execute 500 shares at a price of $10.00, with 
Order #1 and Order #2 receiving full executions, and Order #4 receiving 
a partial execution of 200 shares.
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    \15\ See supra note 13.
    \16\ Order #4 has price priority over Order #3 because Order 
#3[sic] is deemed to be $10.01 for purposes of the Cross price 
calculation, but for purposes of execution priority it is ranked 
behind all orders priced at $10.
    \17\ See Rules 4752(d)(2)(A), 4753(b)(2)(A), and 4754(b)(2)(A).
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    This approach to setting the Cross price is consistent with Nasdaq 
Cross price tiebreaker rules regarding unexecuted shares \18\ and 
ensures that

[[Page 50523]]

the original ranked price of the Order is reflected, since the 
remaining unexecuted shares of the Order are ranked in time priority 
behind all orders at the price at which the Order was posted on the 
Nasdaq Book and no other interest ranked at a less aggressive price 
would execute in the Cross.\19\ Pricing such an Order to its original 
ranked price is consistent with the participant's expectations and the 
pricing of Nasdaq Crosses,\20\ since the participant would otherwise 
perceive that its Order was traded through or not represented in the 
Cross. In the example above, a participant would not expect to receive 
an execution in the cross at $10.01, while leaving unexecuted shares of 
its sell Order on the Nasdaq Book at a more aggressive price of 10.00.
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    \18\ Rule 4754(b)(2)(C) concerns the tiebreaker criteria for 
selecting the Closing Cross price when paired shares are maximized 
and imbalance is minimized: ``shall occur at the entered price at 
which shares will remain unexecuted in the cross.'' Had Nasdaq 
selected a Cross price of $10.01, the participant behind Order #4 
would perceive that its Order was traded through or was otherwise 
not represented in the Cross, which is inconsistent with the purpose 
of the tiebreaker language (i.e., the Cross price is $10.01, but the 
shares remaining in the cross are priced is $10.00). The Order 
Imbalance Indicator provides the current state of interest in 
designated for participation in the Closing Cross, including the 
adjusted price of the Cross. See Rule 4754(a)(7)(A). Thus, 
adjustment of the Closing Cross price is reflected in the Order 
Imbalance Indicator.
    \19\ This occurs because the Order is meant to cede priority to 
all other Orders at its original price, but retain priority over all 
Orders at a less aggressive price.
    \20\ See supra note 18.
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Changes to Rule 4763(e)(2)
    Rule 4763 provides the Exchange's rules concerning the Short Sale 
Price Test of Rule 201 of Regulation SHO. If the Short Sale Price Test 
is triggered, paragraph (e) of Rule 4763 provides the process for re-
pricing of Orders during the Short Sale Period, when the Short Sale 
Price Test is in effect. Rule 4703(l) states that, for purposes of the 
Nasdaq Opening or Closing Cross,\21\ an Order to buy (sell) that is 
locked or crossed at its non-displayed price by a Post-Only Order on 
the Nasdaq Book shall be deemed to have a price at one minimum price 
increment below (above) the price of the Post-Only Order.
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    \21\ Rule 4703(l) concerns the Order Attribute that permits an 
Order to participate in the Nasdaq Crosses. As described below, the 
rule currently only discusses the Nasdaq Opening and Closing 
Crosses, however, the rule should also include the Nasdaq Halt 
Cross. The Exchange is proposing to correct Rule 4703(l) and to make 
related changes to Order Types under Rule 4702(b).
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    Currently, short sale LOO, MOO, LOC and MOC Orders are re-priced 
during the Short Sale Period to the Permitted Price, unless the NBBO 
spread is $.01 in which case such orders will be priced to the 
midpoint. As a consequence of the Cross price adjustment explained 
above, in rare cases short sale LOO, MOO, LOC and MOC Orders re-priced 
to the midpoint would be required for completion of the Nasdaq Opening 
and Closing Crosses but would not be able to execute at the Cross price 
due to the Short Sale Price Test, notwithstanding the fact that it had 
been already adjusted to the midpoint (i.e., the short sale LOO, MOO, 
LOC and MOC Orders included in the price calculation but would not be 
executable at the Cross price). This would occur if, in a security 
subject to the Short Sale Price Test and a NBBO one minimum price 
increment wide, the Cross price would be adjusted to the National Best 
Bid due to the partial execution of a sell Order deemed to have a price 
at the National Best Offer pursuant to Rule 4703(l). Consider the same 
example given previously with two changes: The security is subject to a 
Short Sale Price Test, and Order #2 is now a MOC to sell short. Under 
the current rule, Order #2 would be repriced to $10.005, a Cross price 
of $10.01 would be selected, and, because Order #4 would receive a 
partial execution in the cross, the cross price would be adjusted to 
$10.00. The Cross would attempt to execute Order #1, Order #2, and 
Order #4 as in above, but because of the Short Sale Price Test, $10.00 
is an impermissible execution price for Order #2, notwithstanding the 
fact that it had been already adjusted to the midpoint.\22\
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    \22\ Although Order #2 has been converted to an Order with a 
midpoint pegging attribute, the System nevertheless attempts to 
execute Order #2 ahead of Order #4 because it remains a MOC Order.
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    To resolve this issue, Nasdaq is proposing to amend Rule 4763(e)(2) 
to add a condition stating that the re-pricing of short sale LOO, MOO, 
LOC and MOC Orders to the midpoint in lieu of the Permitted Price will 
not occur when a resting non-displayed Order is deemed to have a price 
at one minimum increment away from a Post-Only Order pursuant to Rule 
4703(l), at the time of the Nasdaq Opening Cross or the Nasdaq Closing 
Cross. This change will prevent short sale LOO, MOO, LOC and MOC Orders 
subject to the Short Sale Price Test from being presented for execution 
at an ineligible price when the Nasdaq Opening and Closing Cross price 
is adjusted pursuant to proposed Rules 4752(d)(2)(G), 4753(b)(2)(E) and 
4754(b)(2)(F). Thus under the proposed rule, if at the time of the 
Nasdaq Opening Cross or the Nasdaq Closing Cross the Short Sale Price 
Test is in effect and there is a resting non-displayed Order deemed to 
have a price at one minimum increment away from a Post-Only Order, 
pursuant to Rule 4703(l), short sale Orders that are LOO, MOO, LOC, or 
MOC will be re-priced to the Permitted Price instead of the midpoint. 
Re-pricing of short sale Orders in this manner ensures they are ranked 
behind \23\ such non-displayed Orders, thereby preventing the inclusion 
of ineligible short sale Orders in the event the Cross price is 
adjusted,\24\ or in some cases, preventing the adjustment from 
occurring at all.\25\ Using the example above, at the time of the 
Closing Cross, Order #2 would be repriced to the Permitted Price of 
$10.01 instead of the midpoint, where it is now ranked behind Order #4 
in execution priority.\26\ As a result of this reordering, Order #4 
would now receive a full execution, preventing the Cross price 
adjustment clause that would occur with a partial execution. The Cross 
would be priced at $10.01, and the System would execute Order #1 in 
full for 500 shares, Order #4 in full for 300 shares, and Order #2 for 
200 shares.
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    \23\ The Exchange notes that, although this proposal changes the 
ranking of short sale LOO, MOO, LOC and MOC Orders so that such 
Orders lose priority as described herein, these Orders are not 
disadvantaged in so doing because they would not execute at their 
original ranked price.
    \24\ Adjusting the price of these Orders would result in the 
short sale LOO, MOO, LOC and MOC Orders to not be included in the 
Cross price calculation.
    \25\ The adjustment will not occur at all because either the 
non-displayed Order executed in full, or the non-displayed Order 
executed in full and the short sale Order received a partial 
execution.
    \26\ Even though Order #2 is technically a MOC Order, it will be 
ranked behind Order #4 because it is no longer treated as a MOC 
Order but rather it is prioritized at the repriced price level.
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    The Exchange notes that this change in no way allows for execution 
of a short sale Order subject to the Short Sale Price Test at an 
impermissible price. Moreover, pricing such an Order to the Permitted 
Price is consistent with the participant's expectations of short sale 
executability and the pricing of Nasdaq Crosses, since the participant 
would not expect its short sale Orders to participate in the Cross if 
the Cross were to be priced to the National Best Bid during the Short 
Sale Price Test.
    Last, the Exchange is correcting a citation in the rule concerning 
the description of the Pegging Order Attribute, which was in former 
Rule 4751(f)(4) but was moved to Rule 4703(d).\27\
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    \27\ See Securities Exchange Act Release No. 75252 (June 22, 
2015), 80 FR 36865 (June 26, 2015) (SR-NASDAQ-2015-024).
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Changes to Rules 4752(d)(3)(B), 4753(b)(3) and 4754(b)(3)(B)
    The Exchange is proposing to make a corrective change to Rules 
4752(d)(3)(B), 4753(b)(3) and 4754(b)(3)(B), which provide the 
processes followed when the Nasdaq Cross price is selected and fewer 
than all shares of Cross eligible Orders that are available in the 
Nasdaq Market Center would be executed. In 2017, the Exchange clarified 
Rules 4752, 4753 and 4754 to specify the execution priority of an Order 
that has been locked or crossed at its non-displayed price by a Post-
Only Order and re-priced for

[[Page 50524]]

purposes of the Opening, Halt and Closing Crosses.\28\ In making the 
clarifying changes, the Exchange amended Rules 4752(d)(3)(B), 
4753(b)(3) and 4754(b)(3)(B) to add the following text: \29\ ``An Order 
to buy (sell) that is locked or crossed at its non-displayed price by a 
Post-Only Order on the Nasdaq Book, and which has been deemed to have a 
price at one minimum price increment below (above) the price of the 
Post-Only Order, shall be ranked in time priority ahead of all orders 
one minimum price increment below (above) the price of the Post-Only 
Order but behind all orders at the price at which the Order was posted 
to the Nasdaq Book.'' \30\ The text stating ``ahead of all orders one 
minimum price increment below (above) the price of the Post-Only 
Order'' is incorrect with respect to Orders covered by the Cross 
rules,\31\ specifically midpoint Orders when the NBBO is one minimum 
price increment wide. In these cases, an Order to buy (sell) that is 
locked or crossed at its non-displayed price by a Post-Only Order on 
the Nasdaq Book, and which has been deemed to have a price at one 
minimum price increment below (above) the price of the Post-Only Order, 
is ranked in time priority behind all Orders at the price at which the 
Order was posted to the Nasdaq Book, without regard to all Orders that 
are one minimum price increment below (above) the price of the Post-
Only Order. This is because the Order is meant to cede priority to all 
other Orders at its original price, but retains priority over all 
Orders at a less aggressive price. For example, consider a scenario in 
which the NBBO is $10.00 x $10.01 and resting on the Nasdaq Book are 
Order #1, a midpoint Order to sell at $10.005, and Order #2, a non-
displayed Order to sell at $10.00. If Order #2 were to be subsequently 
locked at $10.00 by a Post Only Order to buy, then Order #2 would be 
deemed to have a price of $10.01 for the purposes of the Cross price 
calculation. However, if a cross price of $10.005 was selected, Order 
#2 would be presented for execution at its ranked price of $10.00--not 
at its deemed price of $10.01--ahead of the midpoint order ranked 
$10.005. Accordingly, the Exchange is deleting the inaccurate text from 
Rules 4752(d)(3)(B), 4753(b)(3) and 4754(b)(3)(B), which states that 
the locked or crossed Order would be ranked in time priority ahead of 
all orders one minimum price increment below (above) the price of the 
Post-Only Order but behind all orders at the price at which the Order 
was posted to the Nasdaq Book.
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    \28\ See Securities Exchange Act Release No. 80425 (April 11, 
2017), 82 FR 18196 (April 17, 2017) (SR-NASDAQ-2017-031).
    \29\ The change to Rule 4752(d)(3)(B) made it clear that the 
locking or crossing would occur during Early Market Hours.
    \30\ See supra note 28.
    \31\ Rule 4752(d)(3)(B) concerns LOO orders, Early Market Hours 
limit orders, OIO orders, SDAY limit orders, SGTC limit orders, GTMC 
limit orders, SHEX limit orders, displayed quotes and reserve 
interest priced more aggressively than the Nasdaq Opening Cross 
price based on limit price with time as the secondary priority. Rule 
4753(b)(3) concerns Eligible Interest, which is any quotation or any 
order that has been entered into the system and designated with a 
time-in-force that would allow the order to be in force at the time 
of the Halt Cross. Rule 4754(b)(3)(B) concerns LOC orders, limit 
orders, IO orders, displayed quotes and reserve interest priced more 
aggressively than the Nasdaq Closing Cross price based on price with 
time as the secondary priority.
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Changes to Rules 4702(b) and 4703(l)
    As noted above, Rule 4703(l) concerns the Order Attribute that 
permits an Order to participate in the Nasdaq Crosses. Currently, the 
rule only discusses the Nasdaq Opening and Closing Crosses. This was an 
omission occurring when the Exchange adopted the rule in 2015.\32\ Any 
resting Order on the Nasdaq Book that may participate in the Nasdaq 
Opening and Closing Crosses may also participate in a Nasdaq Halt 
Cross.\33\ Accordingly, the Exchange is proposing to correct Rule 
4703(l) by including the Nasdaq Halt Cross in the rule. The Exchange is 
proposing to make related changes to affected Order Types under Rule 
4702(b) to now include participation in the Nasdaq Halt Cross as an 
Order Attribute. Last, the Exchange is amending Rule 4702(b)(4)(C) to 
correct text in the rule that currently states that the Post-Only Order 
may only participate in the Nasdaq Opening and Closing Crosses only if 
it is entered through an OUCH or FLITE port. The Exchange has never 
limited participation of Post-Only Orders in the Nasdaq Opening and 
Closing Crosses if they are entered through OUCH or FLITE ports
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    \32\ See supra note 12.
    \33\ Thus, MOO, LOO, OIO, MOC, LOC and OI Orders are not 
affected, since they are only designated to operate in the Nasdaq 
Opening or Closing Cross. See Rule 4702(b).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\34\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\35\ 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 making the Nasdaq Crosses operate more efficiently by 
preventing the inclusion of short sale Orders that would be unable to 
execute in a Nasdaq Cross, due to the Cross price selected. Moreover, 
new Rules 4752(d)(2)(G), 4753(b)(2)(E) and 4754(b)(2)(F) address how 
the Exchange sets the Nasdaq Opening, Halt and Closing Cross prices 
when there is a partial execution of an Order that is deemed to have a 
price at one minimum price increment away from a Post-Only Order, which 
is consistent with the Act because it ensures that the original ranked 
price of the Order is reflected. As noted above, the remaining 
unexecuted shares of the Order is ranked in time priority behind all 
Orders at the price at which the Order was posted on the Nasdaq Book 
and no other interest would execute at a less aggressive price. Thus, 
the new rule text allowing pricing such an Order to its original ranked 
price is consistent with Nasdaq Cross price tiebreaker rules regarding 
unexecuted shares, as well as the participant's expectations concerning 
execution in the Cross, since the participant would otherwise receive 
an execution at what would appear to be a partial execution of their 
Order at a price inferior to the Cross price. As noted above, such an 
execution would appear to the participant as though its Order was 
traded through or was otherwise not represented in the Cross.
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    \34\ 15 U.S.C. 78f(b).
    \35\ 15 U.S.C. 78f(b)(5).
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    The proposed change to Rule 4763(e)(2) to add a condition stating 
that the re-pricing of short sale Orders to the midpoint--in lieu of 
the Permitted Price--will not be permitted when a resting non-displayed 
Order is locked or crossed at its non-displayed price by a Post-Only 
Order on the Nasdaq Book at the time of the Nasdaq Opening Cross or the 
Nasdaq Closing Cross is consistent with the Act because it will ensure 
such short sale Orders are ranked behind any Orders adjusted pursuant 
to Rule 4703(l), which, for the reasons stated above, would remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system. As noted above, this change is necessary to 
ensure that short sale Orders subject to the Short Sale Price Test are 
prevented from being included, but unable to be executed, when the 
Nasdaq Opening or Closing Cross price is adjusted pursuant to the new 
rules being added in Rules 4752(d)(2)(G), 4753(b)(2)(E) and 
4754(b)(2)(F). The Exchange notes that this change in no way allows for 
execution of a short sale Order subject to the Short Sale Price Test an 
impermissible price. Consequently, the proposed change will

[[Page 50525]]

promote the efficient operation of the market.
    The proposed changes to Rules 4752(d)(3)(B), 4753(b)(3) and 
4754(b)(3)(B) delete inaccurate text from these rules concerning 
ranking of Orders in the Crosses that are locked or crossed at their 
non-displayed price by a Post-Only Order. The deletions from these 
rules reflect the current operation of these rules, which is consistent 
with the Act because the crossed or locked Order is meant to cede 
priority to all other Orders at its original price. The proposed 
changes to Rule 4703(l) corrects the rule to reflect that a member may 
also designate an Order to participate in the Nasdaq Halt Cross in 
addition to the Nasdaq Opening and Closing Crosses, which will reflect 
the current operation of the Exchange as described above. The Exchange 
is consequently updating Order Types under Rule 4702(b) that may also 
participate in a Nasdaq Halt Cross. The Exchange is also making a 
corrective change to Rule 4702(b)(4)(C) to correct text in the rule 
that currently states that the Post-Only Order may only participate in 
the Nasdaq Opening and Closing Crosses only if it is entered through an 
OUCH or FLITE port. The Exchange has never limited participation of 
Post-Only Orders in the Nasdaq Opening and Closing Crosses if they are 
entered through OUCH or FLITE ports. In sum, the proposed changes 
further perfect the operation of the Nasdaq Crosses, and protect 
investors by avoiding confusion that may be caused by inaccurate rules.

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 proposed changes are not 
being done for competitive purposes, but rather to make the processing 
of the Nasdaq Opening and Closing Crosses more efficient by preventing 
short sale Orders from being included in the Nasdaq Opening and Closing 
Crosses, since these Orders may be unable to execute because of the 
Cross price selected if included therein. Moreover, the proposed 
changes correct inaccuracies in the rules, which do not affect 
competition whatsoever.

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) of the Act \36\ and Rule 19b-
4(f)(6) thereunder.\37\
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    \36\ 15 U.S.C. 78s(b)(3)(A).
    \37\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its 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.
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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 change 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 rule-comments@sec.gov. Please include 
File Number SR-NASDAQ-2019-073 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-2019-073. 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-2019-073 and should be submitted 
on or before October 16, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\38\
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    \38\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-20710 Filed 9-24-19; 8:45 am]
BILLING CODE 8011-01-P


