[Federal Register Volume 76, Number 41 (Wednesday, March 2, 2011)]
[Notices]
[Pages 11548-11550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-4691]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63959; File No. SR-NASDAQ-2011-031]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding the NASDAQ Order Imbalance Snapshot
February 24, 2011.
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 February 23, 2011, The NASDAQ Stock Market LLC (the
``Exchange'' or ``NASDAQ'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by
NASDAQ. 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 is filing this proposed rule change regarding the
NASDAQ Order Imbalance Snapshot, a data feed of electronic messages for
newswire providers to monitor the NASDAQ Opening Cross, Closing Cross,
IPO Cross and Halt Cross. The text of the proposed rule change is
available at http://nasdaq.cchwallstreet.com/, at NASDAQ's principal
office, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
NASDAQ facilitates participation in electronic auctions by
disseminating the
[[Page 11549]]
Order Imbalance Indicator, a data feed containing information regarding
the status of the NASDAQ book just prior to a crossing auction. The
data contained in the Order Imbalance Indicator is set forth in NASDAQ
Rules governing the crosses for the Opening Cross (Rule 4752), Halt/IPO
Cross (Rule 4753), and Closing Cross (Rule 4754).
The NASDAQ Order Imbalance Snapshot (``NOIS'') is a separate
service that provides a snapshot version of the Order Imbalance
Indicator that is streamlined and filtered for use by newswire
services. Rather than providing continuous order imbalance data, NOIS
provides the data for certain stocks at selected time intervals in a
format designed to optimize systems used by newswire providers. In
other words, NOIS contains a subset of information already approved to
be disseminated via the Order Imbalance Indicator.
Specifically, for the NASDAQ Opening and Closing Crosses, NOIS
disseminates messages only for exchange-listed securities that show an
imbalance shares amount equal to or more than 50,000 shares. For those
messages NOIS disseminates, the message includes all imbalance
information set forth in the Order Imbalance Indicator set forth in
NASDAQ Rule 4752(a), 4753(a), and 4754(a). NOIS disseminates messages
for securities listed on any national securities exchange, not just
those listed on NASDAQ.
For NASDAQ IPO Crosses, NOIS messages are disseminated
approximately 3 minutes and 13 minutes after the ``Trading Action--
Quote Resumption'' message, which signals imminent launch of trading,
is disseminated for the issue. NOIS will also disseminate a message if
the quotation window is extended for the IPO security. There is no
share size filter for the IPO cross. NASDAQ currently disseminates IPO
Cross messages only for NASDAQ-listed securities.
For the NASDAQ Halt Cross, which NASDAQ uses to release securities
subject to a regulatory trading halt or single security trading pause,
NOIS messages will be disseminated approximately 3 minutes after the
``Trading Action--Quote resumption'' message is transmitted for the
issue. NOIS will also disseminate a message if the quotation window is
extended for the halted or paused security. There is no share size
filter for the Halt cross. For the Halt Cross, NOIS disseminates
messages for NASDAQ-listed issues only.
NOIS data elements are disseminated to newswires for further
dissemination to newswire subscribers. Therefore, the NOIS feed is not
directly actionable by investors for quoting, order entry or trade
execution.
2. Statutory Basis
Nasdaq believes that the proposed rule change is consistent with
the provisions of Section 6 of the Act,\3\ in general and with Section
6(b)(5) of the Act,\4\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
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\3\ 15 U.S.C. 78f.
\4\ 15 U.S.C. 78f(b)(5).
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In adopting Regulation NMS, the Commission granted self-regulatory
organizations and broker-dealers increased authority and flexibility to
offer new and unique market data to the public. It was believed that
this authority would expand the amount of data available to consumers,
and also spur innovation and competition for the provision of market
data. Nasdaq believes that this proposal is in keeping with those
principles by promoting increased transparency through the
dissemination of more useful proprietary data and also by clarifying
its availability to market participants.
Additionally, NASDAQ is making a voluntary decision to make this
data available. NASDAQ is not required by the Exchange Act in the first
instance to make the data available, unlike the best bid and offer
which must be made available under the Act. NASDAQ chooses to make the
data available as proposed in order to improve market quality, to
attract order flow, and to increase transparency. Once this filing
becomes effective, NASDAQ will be required to continue making the data
available until such time as NASDAQ changes its rule.
B. Self-Regulatory Organization's Statement on Burden on Competition
NASDAQ does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended. NASDAQ provides
routing services in a highly competitive market in which participants
may avail themselves of a wide variety of routing options offered by
self-regulatory organizations, alternative trading systems, other
broker-dealers, market participants' own proprietary routing systems,
and service bureaus. In such an environment, system enhancements such
as the changes proposed in this rule filing do not burden competition,
because they can succeed in attracting order flow to NASDAQ only if
they offer investors higher quality and better value than services
offered by others. Encouraging competitors to provide higher quality
and better value is the essence of a well-functioning competitive
marketplace.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the 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 \5\ and Rule 19b-
4(f)(6) thereunder.\6\
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\5\ 15 U.S.C. 78s(b)(3)(A).
\6\ 17 CFR 240.19b-4(f)(6).
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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
[[Page 11550]]
Send an e-mail to [email protected]. Please include
File Number SR-NASDAQ-2011-031 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2011-031. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for 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 a.m. and 3 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NASDAQ-2011-031 and should be submitted on or before March 23, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-4691 Filed 3-1-11; 8:45 am]
BILLING CODE 8011-01-P