[Federal Register Volume 78, Number 249 (Friday, December 27, 2013)]
[Notices]
[Pages 79033-79035]
[FR Doc No: 2013-30967]

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SECURITIES AND EXCHANGE COMMISSION

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

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

December 20, 2013.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on December 19, 2013, The NASDAQ Stock Market LLC (``NASDAQ'' or
``Exchange''), filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to modify the definition of ``System
Securities'' set forth in NASDAQ Rule 4751.

    The text of the proposed rule change is available from NASDAQ's Web
site at http://nasdaq.cchwallstreet.com/Filings/, at NASDAQ's principal
office, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to modify the definition of ``System
Securities'' set forth in NASDAQ Rule 4751(b) to clarify that while all
securities covered by the Consolidated Tape Association Plan and
Consolidated Quotation Plan (``CT/CQ Securities'') are eligible to be
traded on NASDAQ and NASDAQ intends to trade all CT/CQ Securities,
NASDAQ will not trade certain securities within that class. By making
both a ``positive'' and a ``negative'' designation, NASDAQ will clearly
signal to its members and to investors that NASDAQ intends to trade
certain CT/CQ Securities and not to trade others, and which securities
fall into each category.
    NASDAQ proposes to effectuate this designation by maintaining a
list on the www.nasdaqtrader.com Web site of securities that are
excluded from this designation and thus excluded from trading on
NASDAQ. The NasdaqTrader Web site is the primary mechanism for NASDAQ
to communicate with its members about trading on the exchange. NASDAQ
members already receive daily information from the Web site including a
daily list of active System Securities, as well as a list of corporate
actions and other trading information. Adding a list of CT/CQ
securities that are excluded from trading will be an effective
complement to the daily information already provided. The rules of
other exchanges also provide a designation process that clearly
contemplates the trading of less than all eligible securities (see,
e.g., BATS Rule 11.2).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\3\ in general, and with
Section 6(b)(5) of the Act,\4\ in particular, in that it is designed to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transaction in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system and,
in general, to protect investors and the public interest, and is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(5).
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    NASDAQ believes that the proposal is consistent with the Act in
that it provides for greater clarity about the securities traded on the
Exchange and, thereby, enhances the Exchange and the national market
system. The proposal does not permit unfair discrimination; rather all
designated securities may be traded by all members in a free and open
market. The proposal does not unfairly discriminate against securities
that will not trade on NASDAQ. NASDAQ is not obligated by the Exchange
Act to extend unlisted trading privileges to all CT/CQ Securities.
Additionally, all CT/CQ Securities will continue to trade on their
listing market and on numerous other exchanges that have extended
unlisted trading privileges to them.

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

    The Exchange does not believe that the proposed rule change will
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended. The
proposed change will simply clarify the manner by which NASDAQ extends
unlisted trading privileges to CT/CQ Securities, a practice provided
for under the Act and already exercised by NASDAQ. CT/CQ Securities
will continue to be subject to meaningful competition because they will
trade on their listing market and on numerous exchanges that have
extended unlisted trading privileges to them.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \5\ and Rule 19b-4(f)(6) thereunder.\6\ Because
the proposed rule change does not (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative for 30
days from the date on which it was filed, or such shorter time as the
Commission may designate, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6)
thereunder.\7\
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change, along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
    \7\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \8\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\9\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become effective and operative
immediately. According to the Exchange, the proposal is designed to
provide clarity about securities traded on the Exchange. The Exchange
noted that it is not obligated by the Act to extend unlisted trading
privileges to all CT/CQ Securities. Additionally, all CT/CQ Securities
will continue to trade on their listing market and on other exchanges
that have extended unlisted trading privileges to them. Based on the
Exchange's statements, the Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest. Therefore, the Commission

designates the proposal as operative upon filing.\10\
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    \10\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is: (i)
Necessary or appropriate in the public interest; (ii) for the
protection of investors; or (iii) otherwise in furtherance of the
purposes of the Act. If the Commission takes such action, the
Commission shall institute proceedings under Section 19(b)(2)(B) \11\
of the Act to determine whether the proposed rule should be approved or
disapproved.
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    \11\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NASDAQ-2013-160 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NASDAQ-2013-160. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NASDAQ-2013-160 and should
be submitted on or before January 17, 2014.

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