[Federal Register Volume 86, Number 142 (Wednesday, July 28, 2021)]
[Notices]
[Pages 40667-40671]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-15991]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92466; File No. SR-NASDAQ-2021-040]


Self-Regulatory Organizations; The Nasdaq Stock Market LLC; 
Notice of Filing of Proposed Rule Change To Establish the ``Extended 
Trading Close'' and a New ``Extended Trading Close'' Order Type

July 22, 2021.
    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 July 12, 2021, 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 amend Equity 4, Rule 4702 and Rule 4703, 
and add Rule 4755, to establish the ``Extended Trading Close'' and new 
``ETC Eligible LOC'' and ``Extended Trading Close'' Order Types, as is 
described further below.
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/nasdaq/rules, 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 proposes to adopt new Equity 4, Rule 4755 \3\ to 
establish the ``Extended Trading Close.'' The Extended Trading Close 
will allow Participants an additional opportunity to access liquidity 
in Nasdaq-listed securities at the Nasdaq Official Closing Price for a 
limited period of time after the Nasdaq Closing Cross \4\ or the LULD 
Closing Cross,\5\ (collectively, the ``Closing Cross'') concludes. The 
Exchange also proposes to amend Rule 4702 and Rule 4703 to establish 
new ``ETC Eligible LOC'' and ``Extended Trading Close'' Order Types 
that may

[[Page 40668]]

participate in the Extended Trading Close.
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    \3\ References herein to Nasdaq Rules in the 4000 Series shall 
mean Rules in Nasdaq Equity 4.
    \4\ The ``Nasdaq Closing Cross'' refers to Nasdaq's process for 
determining the price at which it will execute orders at the close 
and for executing those orders, as set forth in Rule 4754.
    \5\ The ``LULD Closing Cross'' refers to Nasdaq's modified 
process for determining the price at which it will execute orders at 
the close, following a Trading Pause, as set forth in Rule 4120(a), 
which exists at or after 3:50 p.m. and before 4:00 p.m., as well as 
the process for executing those orders, as set forth in Rule 
4754(b)(6).
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Extended Trading Close
    As defined in proposed new Rule 4755(a)(5), the Extended Trading 
Close will be the process, described in new Rule 4755, during which ETC 
Eligible Orders \6\ may match and execute at the Nasdaq Official 
Closing Price, as determined by the Closing Cross, for a five minute 
period immediately following the Closing Cross.
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    \6\ As discussed below, the Exchange proposes to define, in Rule 
4755, an ``ETC Eligible Order(s)'' as an ``ETC Order(s)'' or an 
``ETC Eligible LOC Order(s).''
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    The Extended Trading Close will commence immediately upon the 
conclusion of the Closing Cross and it will continue until 4:05 p.m. ET 
on a regular trading day, or 1:05 p.m. ET on a day when Nasdaq closes 
early.\7\ The Extended Trading Close will not occur for a security on 
any day when insufficient interest exists in the System to conduct the 
Closing Cross for that security or when the Exchange invokes 
contingency procedures due to a disruption that prevents execution of 
the Closing Cross.\8\ Likewise, the Exchange will cancel executions in 
a security that occur in the Extended Trading Close to the extent that 
the Exchange nullifies the Closing Cross in that security pursuant to 
the rules governing clearly erroneous transactions, as set forth in 
Rule 11890.
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    \7\ The starting times for the Extended Trading Close are not 
exact insofar as the Closing Cross is not instantaneous and the 
System requires a brief period of time to complete the Closing Cross 
for each security. Typically, the processing of the Closing Cross 
begins at 4:00 p.m. ET, or at 1:00 p.m. ET on days when Nasdaq 
closes early.
    \8\ See Rule 4754(b)(7).
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    On a continuous basis during the Extended Trading Close, the System 
will match orders in Nasdaq-listed securities \9\ and execute them at 
the Nasdaq Official Closing price (as determined by the Closing Cross), 
unless the last sale price during After Hours Trading,\10\ or the best 
After Hours Trading bid (offer) price, of a Nasdaq-listed security 
subject to an order participating in the Extended Trading Close is 
higher (lower) than the Nasdaq Official Closing Price by the greater of 
0.5% or $0.01, in which case the System will suspend executions of 
matched orders in the Extended Trading Close for that security unless 
or until the After Hours Trading last sale prices or best After Hours 
Trading bid (offer) price of the security returns to within the greater 
of the 0.5%/$0.01 thresholds prior to the conclusion of the Extended 
Trading Close (at which point executions would resume). This limitation 
will help to mitigate the risk that orders in Nasdaq-listed securities 
which participate in the Extended Trading Close will execute at a price 
that is no longer reflective of the value of the security. (From time 
to time, Nasdaq management may modify the 0.5%/$0.01 thresholds 
described above upon prior notice to market Participants.) Furthermore, 
the Exchange proposes that at any time during the Extended Trading 
Close, Participants are free to modify or cancel their ETC Eligible 
Orders if the thresholds that the Exchange proposes do not meet their 
needs or if they wish to do so based on movements in After Hours 
Trading prices. For example, after the Closing Cross occurs, an issuer 
may release material news about a company that causes its After Hours 
Trading price for its stock to vary significantly from the Closing 
Cross Price. In that instance, a Participant may no longer wish to 
participate in the Extended Trading Close and receive the Nasdaq 
Official Closing price for an ETC Eligible Order in that stock; 
accordingly, the Participant may cancel its ETC Eligible Order, to the 
extent that the Order has not already been fully matched and executed, 
and place an order for the stock in the After Hours market. 
Nonetheless, as stated previously, a significant move in the price of a 
security in After Hours Trading will result in suspension of the 
Extended Trading Close.
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    \9\ Only orders in Nasdaq-listed securities will be eligible to 
participate in the Extended Trading Close. The Exchange proposes to 
exclude securities listed on other primary listing markets. As a 
primary listing market, Nasdaq is committed to investing in and 
enhancing the Closing Cross process for Nasdaq-listed issuers, their 
shareholders, investors, and all Participants involved in the robust 
price discovery and liquidity process that the Closing Cross serves. 
Moreover, Nasdaq notes that the vast majority of Participants 
looking to trade at the closing price participate in the primary 
listing market's closing auction and do not route orders to non-
primary market listing destinations.
    \10\ For purposes of this proposal, the term ``After Hours 
Trading'' refers to trading in a Nasdaq-listed security that 
commences immediately following the conclusion of the Nasdaq Closing 
Cross or the LULD Closing Cross, during Post-Market Hours, as that 
term is defined in Equity 1, Section 1(a)(9).
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    The Exchange proposes to cancel any portion of an ETC Eligible 
Order that remains unexecuted at the conclusion of the Extended Trading 
Close, or for which the System has suspended execution, due to price 
deviation, where that suspension remains active as of the conclusion of 
the Extended Trading Close.
    All ETC Eligible Orders executed in the Extended Trading Close will 
be trade reported anonymously and disseminated via the consolidated 
tape.
Order Types Eligible To Participate in the Extended Trading Close
    The Exchange proposes to allow two Order Types to participate in 
the Extended Trading Close: (1) Limit-on-Close (``LOC'') Orders; and 
(2) Extended Trading Close (``ETC'') Orders.\11\
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    \11\ If short sale orders in securities subject to Regulation 
SHO are permitted to execute in the Closing Cross, then the System 
will also permit short sale executions in such securities to occur 
in the Extended Trading Close. Conversely, the System will reject 
short sale orders in securities if short sale orders in such 
securities were not permitted to execute in the Closing Cross.
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ETC Eligible LOC Orders
    First, the Exchange proposes to amend Rule 4702(b)(12) to provide 
for LOC Orders in Nasdaq-listed securities to participate in the 
Extended Trading Close to the extent that such LOC Orders are entered 
through RASH or FIX and remain unexecuted, in whole or part, in the 
Closing Cross (an ``ETC Eligible LOC Order'').\12\ The System will not 
include LOC Orders in the Extended Trading Close that Participants did 
not duly submit prior to the Nasdaq Closing Cross or LULD Closing 
Cross, in accordance with Rule 4702(b)(12)(A), or which are 
unexecutable in the Extended Trading Close due to the fact that they 
have limit prices that fall outside of the Nasdaq Official Closing 
Price.\13\
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    \12\ By default, all LOC Orders in Nasdaq-listed securities will 
be set to participate in the Extended Trading Close in the event 
that the LOC Orders are not fully executed during the Closing Cross. 
However, a Participant may opt to exclude its LOC Orders from 
participating in the Extended Trading Close. When ETC eligibility is 
disabled, the System will simply cancel LOC Orders in Nasdaq-listed 
securities that remain unexecuted after the Closing Cross occurs. 
Also, if Participants select a time-in-force for their LOC Orders in 
Nasdaq-listed securities that continues after the Closing Cross 
occurs, then if such LOC Orders remain unexecuted after the Closing 
Cross, the Exchange will cause the remaining unexecuted shares to 
bypass the Extended Trading Close and participate in After Hours 
Trading.
    \13\ A Post-Only Order, Midpoint Peg Post-Only Order, 
Supplemental Order, or Market Maker Peg Order may not operate as an 
ETC Eligible LOC Order, insofar as their respective underlying order 
characteristics are incompatible with participation in the ETC. An 
ETC Eligible LOC Order will be rejected if it has been assigned a 
Pegging Attribute due to the fact that the Pegging Order Attribute 
operates only during Market Hours.
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    ETC Eligible LOC Orders will match and execute in the Extended 
Trading Close in time priority against other ETC Eligible LOC Orders 
and ETC Orders, with ETC Eligible LOC Orders receiving new timestamps 
upon entry into the Extended Trading Close and prioritized amongst each 
other and ETC orders based on the time the system received each order 
into the Extended Trading Close. For example, assume that the Closing 
Cross Price for a security is $10.00 per share and that an ETC

[[Page 40669]]

Eligible LOC Order to buy 100 shares (Order 1) remains unexecuted as of 
the conclusion of the Closing Cross, such that it will be re-entered 
for participation in the ETC, receiving a new timestamp. When the ETC 
commences, the NBBO is $9.95 x $10.05. After the ETC begins, a second 
Participant enters Order 2, an ETC Order to buy 2,000 shares, with a 
minimum quantity condition of 500 shares. A third Participant then 
enters Order 3, an ETC Order to buy 500 shares. A fourth Participant 
then enters Order 4, an ETC Order to sell 200 shares. Order 4 will then 
execute against Orders 1 and 3 for 200 shares at $10.00 per share 
(Order 1 is fully executed and Order 3 has 400 shares remaining). Order 
4 does not execute against Order 2 because Order 4 does not satisfy the 
minimum quantity condition of Order 2. A fifth Participant enters Order 
5, which is an ETC Order to sell 500 shares. Order 5 will then execute 
against Order 2 for 500 shares at $10.00 per share, as Order 5 
satisfies the minimum quantity condition of Order 2. Finally, a sixth 
Participant enters Order 6, an ETC order to sell 3,000 shares, with a 
minimum quantity condition of 3,000 shares. Order 6 posts as no resting 
ETC Eligible LOC Orders or ETC Orders satisfies the Order's minimum 
quantity condition.
    As discussed above, during the Extended Trading Close, ETC Eligible 
LOC Orders will continuously match against other ETC Eligible LOC 
Orders and ETC Orders and execute at the Nasdaq Official Closing price, 
as determined by the Closing Cross, except that the System will suspend 
executions of ETC Eligible LOC Orders whenever the After Hours Trading 
last sale price or the best After Hours Trading bid or offer of the 
Nasdaq-listed securities that are subject to the ETC Eligible LOC 
Orders deviate the greater of 0.5% or $0.01 from the Nasdaq Official 
Closing Prices for those securities. (From time to time, Nasdaq 
management may modify these thresholds upon notice to market 
Participants.) The System will resume executions during the Extended 
Trading Close if and when the After Hours Trading last sale price or 
the After Hours Trading best bid (offer) price of the Nasdaq-listed 
security returns to within these 0.5%/$0.01 thresholds (or within such 
other thresholds as Nasdaq management may determine, upon prior notice 
to market Participants). When the Extended Trading Close ends, the 
System will cancel any unexecuted shares of ETC Eligible LOC Orders as 
well as any shares of ETC Eligible LOC Orders for which executions 
remain suspended as of that time, due to price deviations. A 
Participant may modify or cancel an ETC Eligible LOC Order (unless 
already executed) at any time during the Extended Trading Close.
ETC Orders
    In addition to ETC Eligible LOC Orders, Nasdaq proposes to 
introduce a new Order Type--the Extended Trading Close or ``ETC'' 
Order--that will be eligible for entry and execution exclusively during 
the Extended Trading Close.14 15
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    \14\ On any day when no Extended Trading Close occurs, i.e., if 
there is insufficient interest to conduct a Closing Cross for a 
security or if the Exchange invokes contingency procedures, the 
System will not accept entry of an ETC Order.
    \15\ The Exchange proposes to amend Rule 4703(a) to add a new 
time-in-force applicable to ETC Orders. A time-in-force of ``ETC'' 
will mean that an order is designated to activate upon commencement 
of the Extended Trading Close and deactivate upon the conclusion of 
the Extended Trading Close.
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    Like an ETC Eligible LOC Order, an ETC Order must be in a Nasdaq-
listed security, and the Exchange will execute it at the Nasdaq 
Official Closing Price, as determined by the Closing Cross. A 
Participant may enter, cancel, or modify an ETC Order at any time 
during the Extended Trading Close. The System will execute an ETC Order 
only if the System is able to match it against another ETC Order or an 
ETC Eligible LOC Order during the Extended Trading Close. Moreover, as 
noted above, if during the Extended Trading Close, the After Hours 
Trading last sale price or After Hours Trading best bid or offer of the 
Nasdaq-listed security subject to the ETC Order deviates the greater of 
0.5% or $0.01 from the Nasdaq Official Closing Price for that security, 
as determined by the Closing Cross, then the System will suspend 
execution of the ETC Order, unless and until the After Hours Trading 
last sale price or the After Hours Trading best bid (offer) price of 
the Nasdaq-listed security returns to within these 0.5%/$0.01 
thresholds (or within such other thresholds as Nasdaq management may 
determine, upon prior notice to market Participants) during the 
Extended Trading Cross (at which point executions would resume). If an 
ETC Order remains unmatched or its execution remains suspended when the 
Extended Trading Close concludes, then the System will cancel the ETC 
Order.
    The System will match an ETC Order in time priority amongst other 
ETC Eligible LOC Orders and ETC Orders during the Extended Trading 
Close. Participants may modify or cancel unexecuted ETC Orders at any 
time after entry. A Participant may enter an ETC Order with a Minimum 
Quantity Attribute.\16\
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    \16\ Rule 4703(e) provides for two types of Minimum Quantity 
Attributes--one that provides for the minimum quantity requirement 
to be satisfied by a single order, and a second that allows for it 
to be satisfied by aggregating multiple orders. Only the first type 
of Minimum Quantity Attributes may be used with an ETC Order. Thus, 
a Participant that enters an ETC Order with a minimum quantity 
requirement of 500 shares may specify that its order match and 
execute in the ETC against another ETC Eligible Order of 500 shares 
but not several ETC Eligible Orders of smaller sizes that, in 
aggregate, add up to 500 shares.
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The ETC Order Imbalance Indicator
    To facilitate participation in the Extended Trading Close, Nasdaq 
proposes to disseminate electronically to Participants an ``ETC Order 
Imbalance Indicator,'' beginning at 4:00:05 p.m. (or 1:00:05 p.m. on a 
day when Nasdaq closes early), and continuing in 5 second intervals 
thereafter until the Extended Trading Close concludes at 4:05 p.m. (or 
1:05 p.m. on a day when Nasdaq closes early). The ETC Order Imbalance 
Indicator will convey to Participants the symbol and total number of 
matched and executed shares in the Extended Trading Close (as of the 
time of dissemination of the ETC Order Imbalance Indicator), as well as 
total size of any ETC Imbalance (exclusive of Orders with Minimum 
Quantity instructions) \17\ and the buy/sell direction of any ETC 
Imbalance.
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    \17\ The Exchange proposes to exclude ETC Eligible Orders with 
Minimum Quantity instructions from this calculation of the size of 
the ETC Imbalance because the size of such Orders may be misleading 
to Participants, given that such Orders will not execute if the 
Minimum Quantity instruction is not satisfied.
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Implementation
    The Exchange currently intends to introduce the Extended Trading 
Close, and begin accepting ETC Orders, during the Fourth Quarter of 
2021. At least 30 days prior to launching the Extended Trading Close, 
and beginning to accept ETC Orders, the Exchange will publish a Nasdaq 
Trader Alert announcing the launch date.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\18\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\19\ 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

[[Page 40670]]

system, and, in general to protect investors and the public interest.
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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
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    The proposal is consistent with the Act because it would create an 
additional opportunity for Participants to execute orders in Nasdaq-
listed securities at the Closing Cross price for a limited time period 
after the Closing Cross concludes. For Participants with LOC Orders 
that do not execute in full in the Closing Cross, the Extended Trading 
Close will give those LOC Orders another opportunity to execute at the 
Nasdaq Official Closing Price, as determined by the Closing Cross, 
before the After Market Trading price moves far away from it. Likewise, 
Participants will have an opportunity to access liquidity at the Nasdaq 
Official Closing Price (as determined by the Closing Cross) even if 
they did not participate in the Closing Cross. By increasing 
opportunities for Participant to execute their orders at the Nasdaq 
Official Closing Price (as determined by the Closing Cross), the 
Exchange will allow them to execute sizable orders without market 
impact as a complement to the Closing Cross and as an alternative to 
After Hours Trading that can be less liquid than Market Hours trading.
    The Exchange believes it is consistent with the Act to provide for 
LOC Orders entered through the RASH and FIX protocols to roll over into 
the ETC automatically, if unexecuted in full during the Closing Cross, 
because Nasdaq typically assumes a more active role in managing the 
order flow submitted by users of the RASH and FIX protocols. Allowing 
these Participants to have their remaining LOC orders automatically 
participate in the Extended Trading Close will provide these 
Participants an additional opportunity for execution at the Nasdaq 
Official Closing Price (as determined by the Closing Cross), and it 
reflects the order flow management practices of these Participants. In 
contrast, users of the OUCH and FLITE protocols generally assume a more 
active role in managing their order flow. Having unexecuted shares of 
LOC orders canceled and requiring that an ETC Order be sent after the 
Closing Cross in order to participate in the Extended Trading Close 
reflects the order flow management practices of these Participants.
    The Exchange proposes to make participation in the Extended Trading 
Close optional for those Participants that wish to continue the current 
System practice of cancelling LOC Orders that remain unexecuted after 
the Closing Cross, or by designating LOC Orders to participate in After 
Hours Trading if they remain unexecuted after the Closing Cross. 
Therefore, as proposed, Participants can opt-out from having their ETC-
Eligible LOC Orders participate in the Extended Trading Close, while 
their LOC Orders with a time-in-force that continues after the Closing 
Cross will automatically bypass the Extended Trading Close. 
Furthermore, the Exchange proposes to allow Participants to modify or 
cancel ETC Eligible LOC Orders and ETC Orders at any time after the 
Extended Trading Close begins, should they choose to do so. The System 
will automatically cancel any portion of ETC Eligible LOC Orders and 
ETC Orders that remain unexecuted at the conclusion of the Extended 
Trading Close.
    Moreover, as a means of mitigating the risk that the After Market 
Trading price of a Nasdaq-listed security will rapidly and 
substantially deviate from the Nasdaq Official Closing Price for the 
security (as determined by the Closing Cross), and thus cause orders in 
the Extended Trading Close to execute at prices that no longer reflect 
the value of the security, the Exchange proposes to suspend executions 
of matched orders in a security in the Extended Trading Close whenever 
and for as long as the After Hours Trading last sale price or best bid 
or offer of that security deviates the greater of 0.5% or $0.01 from 
the Nasdaq Official Closing price for the security, as determined by 
the Closing Cross. (From time to time, Nasdaq management may modify 
these thresholds upon prior notice to market Participants.) If during 
the Extended Trading Close, the After Market Hours Trading price or 
best bid or offer of a security returns to within the 0.5%/$0.01 
thresholds (or such other thresholds as Nasdaq management may set, upon 
prior notice to market Participants), then the System will resume 
execution of ETC Eligible Orders. The System will cancel any shares of 
ETC Eligible Orders for which executions remain suspended as of the 
conclusion of the Extended Trading Close.
    The Nasdaq Closing Cross (as well as the LULD Closing Cross) is a 
robust price discovery and liquidity mechanism in the national market 
system. The mechanism is used by a diverse set of Participants for a 
diverse set of reasons. The growth in participation over the years is 
testament to the value the Closing Cross provides to the market and the 
Participants in the market. As described above, the Extended Trading 
Close will be complementary to the Closing Cross and LULD Closing Cross 
and is not intended or expected to be a substitute for the Closing 
Cross or the LULD Closing Cross. Instead it will provide a simple 
additional mechanism for Participants who seek additional liquidity at 
the Nasdaq Official Closing Price, as determined by the Closing Cross, 
after regular market hours trading has completed. Nasdaq does not 
expect the Extended Trading Close to have an impact on the 
participation in the Nasdaq Closing Cross or the LULD Closing Cross. 
Nasdaq notes that a number of off-exchange trading venues already offer 
their participants the ability to receive the Nasdaq Official Closing 
Price for their orders after the Closing Cross occurs, and that such 
functionality has grown popular with certain Participants. Nasdaq 
intends for the Extended Trading Close to be an alternative to these 
off-exchange offerings, that will be available to all Nasdaq 
Participants.
    Additionally, Nasdaq will also disseminate an ETC Imbalance 
Indicator to help inform participation in the Extended Trading Close, 
which is something that off-exchange venues do not provide. The 
proposed dissemination of an ETC Imbalance Indicator is consistent with 
the Act because it will provide for the Extended Trading Close to be 
transparent with respect to the liquidity that is available to match 
and execute in it. The Exchange believes it is consistent with the Act 
to exclude ETC Eligible Orders with Minimum Quantity instructions from 
the calculation of the size of the ETC Imbalance because the size of 
such Orders may be misleading to Participants, given that such Orders 
will not execute if the Minimum Quantity instruction is not satisfied.
    As with the Closing Cross and any other facet of its market, Nasdaq 
will surveil the Extended Trading Close for any unfair or manipulative 
trading practices.

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. To the contrary, the proposal 
will promote competition among trading venues for on-close and post-
close orders in Nasdaq-listed securities.
    Nasdaq notes that participation in the Extended Trading Close is 
completely voluntary. Any Participant that does not wish for its 
unexecuted LOC Orders to participate in the Extended Trading Close will 
be able to avoid doing so by disabling this functionality for LOCs, 
which will cause the System to cancel

[[Page 40671]]

the unexecuted LOC Orders after the Closing Cross concludes, or by also 
selecting a time-in-force of ``Closing Cross/Extended Hours,'' which 
will cause the unexecuted LOC Orders to commence After Hours Trading 
immediately after the Closing Cross ends, and bypass the Extended 
Trading Close. Participants may also modify or cancel their ETC 
Eligible Orders during the Extended Trading Close.
    Nasdaq believes that it is appropriate to limit participation in 
the Extended Trading Close to orders in Nasdaq-listed securities. As a 
primary listing market, Nasdaq is committed to investing in and 
enhancing the Closing Cross process for Nasdaq-listed issuers, their 
shareholders, investors, and all Participants involved in the robust 
price discovery and liquidity process that the Closing Cross serves. 
Moreover, the vast majority of Participants looking to trade at the 
closing price participate in the primary listing market's closing 
auction and do not route orders to non-primary market listing 
destinations.

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be 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-2021-040 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-2021-040. 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-2021-040 and should be submitted 
on or before August 18, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-15991 Filed 7-27-21; 8:45 am]
BILLING CODE 8011-01-P


