[Federal Register Volume 88, Number 71 (Thursday, April 13, 2023)]
[Notices]
[Pages 22498-22506]
[FR Doc No: 2023-07733]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97263; File No. SR-NASDAQ-2022-079]

Self-Regulatory Organizations; The Nasdaq Stock Market LLC;
Notice of Filing of Amendment No. 1 and Order Instituting Proceedings
To Determine Whether To Approve or Disapprove a Proposed Rule Change,
as Modified by Amendment No. 1, To Amend Rules 4702(b)(14) and (b)(15)
Concerning Dynamic M-ELO Holding Periods

April 7, 2023.
    On December 21, 2022, The Nasdaq Stock Market LLC (``Nasdaq'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to replace the static holding period requirements
for Midpoint Extended Life Orders and Midpoint Extended Life Orders
Plus Continuous Book with dynamic holding periods. The proposed rule
change was published for comment in the Federal Register on January 10,
2023.\3\ On February 22, 2023, pursuant to Section 19(b)(2) of the
Act,\4\ the Commission designated a longer period within which to
approve the proposed rule change, disapprove the proposed rule change,
or institute proceedings to determine whether to disapprove the
proposed rule change.\5\ On March 9, 2023, the Exchange filed Amendment
No.1 to the proposed rule change, which amended and superseded the
proposed rule change as originally filed.\6\ The

Commission received two comments on the proposal, and the Exchange
submitted a response to comments when it filed Amendment No. 1.\7\ The
Commission is publishing this notice and order to solicit comments on
the proposed rule change, as modified by Amendment No. 1, from
interested persons and to institute proceedings pursuant to Section
19(b)(2)(B) of the Act \8\ to determine whether to approve or
disapprove the proposed rule change, as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 92844 (January 4,
2023), 88 FR 1438.
    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 96963, 88 FR 12710
(February 28, 2023).
    \6\ In Amendment No. 1, the Exchange (i) included additional
information regarding the data used by its model, including a list
of the 142 categories of data points; (ii) described its model
retraining process; (iii) added information regarding the types of
modifications for which it would request Commission approval; (iv)
indicated it would regularly publish data regarding M-ELO and M-
ELO+CB performance and holding period changes; and (v) stated its
model would constitute an established, non-discriminatory method and
would operate according to pre-disclosed rules and objectives
without the exercise of discretion. When it submitted Amendment No.
1, the Exchange also submitted it as a comment letter to the filing,
available at: https://www.sec.gov/comments/sr-nasdaq-2022-079/srnasdaq2022079-20159016-327215.pdf.
    \7\ Comments and the Exchange's response to comments are
available at: https://www.sec.gov/comments/sr-nasdaq-2022-079/srnasdaq2022079.htm.
    \8\ 15 U.S.C. 78s(b)(2)(B).
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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 Rules 4702(b)(14) and (b)(15) of the
Exchange's Rulebook to replace the static holding period requirements
for Midpoint Extended Life Orders and Midpoint Extended Life Orders
Plus Continuous Book with dynamic holding periods. Amendment No. 1
supersedes the original filing in its entirety.
    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 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 amend Rules 4702(b)(14) and (15) of the
Exchange's Rulebook to replace the static 10 millisecond holding period
requirements for its Midpoint Extended Life Order (``M-ELO'') and
Midpoint Extended Life Order Plus Continuous Book (``M-ELO+CB'') Order
Types with dynamic holding periods (``Dynamic M-ELO and M-ELO+CB'' or
collectively, ``Dynamic M-ELO'').
Background
    In 2018, the Exchange introduced the M-ELO, which is a Non-
Displayed Order priced at the Midpoint between the National Best Bid
and Offer (``NBBO'') and which is eligible for execution only against
other eligible M-ELOs and only after a minimum of one-half second
passes from the time that the System accepts the order (the ``Holding
Period'').\9\ In 2019, the Exchange introduced the M-ELO+CB, which
closely resembles the M-ELO, except that a M-ELO+CB may execute at the
midpoint of the NBBO, not only against other eligible M-ELOs (and M-
ELO+CBs), but also against Non-Displayed Orders with Midpoint Pegging
and Midpoint Peg Post-Only Orders (``Midpoint Orders'') that rest on
the Continuous Book for at least one-half second and have Trade Now
enabled.\10\
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    \9\ See Securities Exchange Act Release No. 34-82825 (March 7,
2018), 83 FR 10937 (March 13, 2018) (SR-NASDAQ-2017-074) (``M-ELO
Approval Order'').
    \10\ See Securities Exchange Act Release No. 34-86938 (September
11, 2019), 84 FR 48978 (September 17, 2019) (SR-NASDAQ-2019-048)
(``M-ELO+CB Approval Order'').
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    When the Exchange designed M-ELO, it originally set the length of
the Holding Period at one-half second because it determined that this
time period would be sufficient to ensure that likeminded investors
would interact only with each other, and with minimal market impacts.
The Exchange believed that the longer length of the M-ELO Holding
Period and its simplicity in design would provide greater protection
for participants than they could achieve through competing delay
mechanisms.
    In 2020, however, the Exchange shortened the length of the Holding
Period to 10 milliseconds.\11\ The Exchange did so after studying two
years of actual use and performance of M-ELOs, as well as customer
feedback. That is, the Exchange came to understand that, while users of
M-ELO and M-ELO+CB are less concerned with achieving rapid executions
of their Orders than are other participants, they are not indifferent
about the length of time in which their M-ELOs and M-ELO+CBs must wait
before they are eligible for execution. Indeed, participants informed
the Exchange that in certain circumstances, such as when they sought to
trade symbols that on average had a lower time-to-execution than a
half-second, they were reticent to enter M-ELOs or M-ELO+CBs. They
indicated that the associated Holding Periods for these Order Types
were longer than necessary to achieve the desired protections and that,
during the residual portion of the Holding Periods, they risked losing
out on favorable execution opportunities that would otherwise be
available to them had they placed a non-MELO order.
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    \11\ See Securities Exchange Act Release No. 34-88743 (April 24,
2020), 85 FR 24068 (April 30, 2020) (SR-NASDAQ-2020-011) (``M-ELO
Timer Approval Order'').
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    Based upon this feedback, the Exchange studied the potential
effects of reducing the length of the Holding Periods for both M-ELOs
and M-ELO+CBs (as well as for Midpoint Orders that would execute
against M-ELO+CBs). Ultimately, the Exchange determined that it could
reduce the Holding Periods to 10 milliseconds without compromising the
protective power that M-ELO and M-ELO+CB are intended to provide to
participants and investors.\12\ Thus, the Exchange determined that
shortening the Holding Periods to 10 milliseconds for M-ELOs and M-
ELO+CBs would increase the efficacy of the mechanism while not
undermining the power of those Order Types to fulfill their underlying
purpose of minimizing market impacts. At the same time, the Exchange
determined

that a reduction in the Holding Periods to 10 milliseconds would
dramatically add to the circumstances in which M-ELOs and M-ELO+CBs
would be useful to participants. In its M-ELO Timer Approval Order, the
Commission agreed with the Exchange:
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    \12\ The Exchange examined each of its historical M-ELO
executions to determine at what Midpoints of the NBBO the M-ELOs
would have executed if their Holding Periods had been shorter than
one-half second (500 milliseconds). After examining the historical
effects of shorter Holding Periods of between 10 milliseconds and
400 milliseconds, the Exchange determined that a reduction of the M-
ELO Holding Period to as short as 10 milliseconds would have caused
an average impact on mark-outs of only 0.10 basis points (across all
symbols). In other words, compared to the execution price of an
average M-ELO with a one-half second Holding Period, the Exchange
found that a M-ELO with a 10 millisecond Holding Period would have
had an average post-execution impact that was only a tenth of a
basis point per share--a difference in protective effect that is
immaterial. See Nasdaq, ``The Midpoint Extended Life Order (M-ELO);
M-ELO Holding Period,'' available at https://www.nasdaq.com/articles/the-midpoint-extended-life-order-m-elo%3A-m-elo-holding-period-2020-02-13 (analyzing effects of shortened Holding Periods on
M-ELO performance).
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    The Commission notes that, with the proposed ten-millisecond
Holding Period and Resting Period, M-ELOs and M-ELO+CBs would continue
to be optional order types that are available to investors with longer
investment time horizons, including institutional investors. The
Commission also believes that the proposal could make M-ELOs and M-
ELO+CBs more attractive for securities that on average have a time-to-
execution of less than one-half second and, for investors who currently
do not use M-ELOs and M-ELO+CBs for these securities, provide optional
order types that could enhance their ability to participate effectively
on the Exchange. The Commission notes that, if market participants
determine that the proposal would make M-ELOs and M-ELO+CBs less
attractive for their particular investment objectives, such market
participants may elect to reduce or eliminate their use of these
optional order types. Moreover, as noted above, the Exchange will
continue to conduct real-time surveillance to monitor the use of M-ELOs
and M-ELO+CBs to ensure that such usage remains appropriately tied to
the intent of the order types. If, as a result of such surveillance,
the Exchange determines that the shortened Holding Period does not
serve its intended purpose or adversely impacts market quality, the
Exchange would seek to make further recalibrations.\13\
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    \13\ M-ELO Timer Approval Order, supra, at 85 FR 24069.
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    For similar reasons and with even better potential results for
participants, the Exchange now proposes to further refine the length of
the Holding Periods for M-ELOs and M-ELO+CBs, this time through the
application of innovative and patent pending machine learning
technology.
Dynamic M-ELO
    After receiving feedback from participants that even 10 millisecond
Holding Periods for M-ELO and M-ELO+CB may, at times, exceed what is
necessary to accomplish the underlying intent of these Order Types, the
Exchange began to experiment with making further refinements to the
duration of the Holding Periods. Ultimately, the Exchange concluded
that shorter Holding Periods could achieve the same, if not better
results for participants in terms of mark-outs, but not in all
circumstances. That is, where prices of the underlying securities are
stable, and not subject to imminent unfavorable changes, M-ELOs and M-
ELO+CBs face lower risks of confronting spread-crossing orders, such
that shorter Holding Periods could suffice to protect M-ELOs and M-
ELO+CB from such orders. In periods of heightened price volatility,
however, M-ELOs and M-ELO+CBs also face heightened risks, such that
longer Holding Periods would continue to be beneficial in protecting M-
ELOs and M-ELO+CBs from such risks. Thus, the Exchange determined that
another across-the-board reduction of the static 10 millisecond Holding
Periods would be sub-optimal because it could impact the performance of
the M-ELO and M-ELO+CB Order Types during periods of heightened
volatility.
    In light of these observations, the Exchange tasked its artificial
intelligence and machine learning laboratory (the ``AI Core Development
Group'') to explore whether it could employ these innovative
technologies to optimize the length of M-ELO and M-ELO+CB Holding
Periods during various states of price volatility, and then to vary the
lengths of the Holding Periods dynamically during the lifecycles of M-
ELOs and M-ELO+CBs, with the objectives of improving the performance of
these Order Types while also further reducing opportunity costs.
    As the Exchange explains in greater depth in the attached [sic]
white paper,\14\ the AI Core Development Group proceeded to develop an
artificial intelligence-based timer control system that will achieve
these objectives.\15\ The AI Core Development Group did so by using
reinforcement learning techniques--machine learning paradigms which
develop optimal solutions to problems over time by taking actions to
solve them, generating feedback on the results of such actions,
applying that feedback to direct and improve the next round of
solutions, and then repeating the feedback loop until the paradigm
achieves optimized solutions.
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    \14\ See Diana Kafkes et al., ``Applying Artificial Intelligence
& Reinforcement Learning Methods Towards Improving Execution
Outcomes,'' SSRN, October 19, 2022, available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4243985 (attached hereto
[sic] as Exhibit 3(a)) (the ``White Paper'').
    \15\ Although the AI Core Development Group acknowledges that an
optimal Holding Period would update with every incoming order, it
determined that training a reinforcement learning model on every
order would be too difficult to program and too difficult to
implement given the nanosecond latency requirements of the Exchange.
The Group then investigated more feasible update cadences and
determined the point at which optimal outcomes were best balanced
with the level of programming and implementation difficulty to be
between 15 and 30 second updates. Ultimately, the Group chose a 30
second update cadence to give the model the greatest opportunity to
learn between potential actions.
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    In this instance, the AI Core Development Group applied
reinforcement learning techniques to a simulation of the M-ELO Book
that it constructed using a representative data set from the first
quarter of 2022 (the ``Training Period''). The Training Period data
consisted of 380 out of the 6,257 symbols on the M-ELO Book (accounting
for approximately 67 percent of M-ELO volume). The symbols chosen
reflect both actively-traded and thinly-traded securities, and both
low-priced and high-priced securities.
    The AI Core Development Group then developed a machine learning
model and applied it to the Training Period data. The Group programmed
the model to value the achievement of higher fill rates or lower mark-
outs than that which occurred in a historical simulation of M-ELOs and
M-ELO+CBs involving the Training Period data.\16\ The Group then
programmed the model to seek to achieve its goals by taking one of five
possible actions with respect to the duration of the Holding Periods at
30 second intervals \17\ for each symbol during each trading day of the
Training Period. That is, at each 30 second internal, the model
evaluated market conditions for each symbol over the prior 30 second
period and either kept the Holding Periods the same, increased/
decreased them by 0.25 milliseconds, or increased/decreased them by
0.50 milliseconds.\18\ After each decision-making round, the model
utilized the results to inform its actions at the next 30 second
increment.
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    \16\ As the White Paper explains, the Group developed a model to
simulate activity on the Exchange involving M-ELOs and M-ELO+CBs
during the Training Period. See White Paper, supra, at 10.
    \17\ See id.
    \18\ The AI Core Development Group experimented with a range of
permissible Holding Period durations. Ultimately, it concluded that
it could produce better outcomes for M-ELO and M-ELO+CB participants
than the existing approach using Holding Periods as low as 0.25
milliseconds and as high as 2.5 milliseconds, under normal market
conditions.
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    In making its decisions, the model (again, drawing upon a
combination of historical SIP and M-ELO-specific data) considered 142
categories of data points.\19\ A confluence of data points

that correlated with an increase in volatility tended to cause the
model to increase the durations of Holding Periods, including increases
in the standard deviation of NBBO prices, the number of unique
participants placing sell orders on M-ELO and M-ELO+CB, and the volume-
weighted average of the NBBO spread. Conversely, a confluence of data
points that correlated with greater price stability tended to cause the
model to decrease the durations of Holding periods, such as an increase
in the median and max number of shares per trade and the number of
resting bids left in the M-ELO and M-ELO+CB Book.
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    \19\ Nasdaq attaches [sic] a full list of these data elements
(attached hereto [sic] as ``Exhibit 3(b)''), along with an
observation of the strength of the correlations that currently exist
between changes to those data values and decisions the system makes
to set the duration of Holding Periods at any given time. See also
White Paper, supra, at 31, for a description of these features.
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    The AI Core Development Team produced variations of its model that
prioritized achievement of the lowest mark-outs, the highest fill
rates, and a blend of these two objectives.\20\ Through a process of
learning and experimentation involving a combination of historical and
simulated data, the AI Core Development Group settled on a Dynamic M-
ELO model that achieved substantial simulated performance improvements
for users of M-ELO and M-ELO+CB--both in terms of mark-outs and fill
rates--as compared to the static 10 millisecond Holding Periods. As the
White Paper explains in greater detail, Dynamic M-ELO yielded an
average combined volume-weighted (simulated) improvement of 31.7
percent, including a 20.3 percent increase in fill rates and a 11.4
percent reduction in mark-outs.\21\ The White Paper provides a more
fulsome explanation of these improvements.\22\
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    \20\ The AI Core Development Group also applied to the model a
paradigm called ``retraining'' to combat the degradation of model
performance that can otherwise occur as the reference data it uses
for initial comparison becomes stale. Finally, the AI Core
Development group added a stability protection mechanism to the
model to provide maximum production to participants in the event
that the model observes extraordinary levels of instability in the
National Best Bid and Offer during the prior three seconds as
compared to reference data. When the model detects such instability,
it is programmed to increase the length of the Holding Period to 12
milliseconds for a period of 750 milliseconds.
    \21\ See White Paper, supra, at 22.
    \22\ See id.
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    Based upon these exciting results, the Exchange now proposes to
amend Rule 4702(b)(14) and (15) to replace the static 10 millisecond
timers applicable to M-ELO and M-ELO+CB with Dynamic M-ELO Holding
Periods. Using the Exchange's proprietary and patent pending
technology, the Dynamic M-ELO system will evaluate and, as it deems
necessary, adjust the length of the Holding Periods for each symbol
comprising M-ELOs and M-ELO+CBs (and Midpoint Orders on the Continuous
Book that opt to interact with M-ELO+CBs after resting on the Book)
every 30 seconds throughout the Market Hours (each such 30 second
interval, a ``Change Event''). In so doing, Dynamic M-ELO will help
participants to achieve a more optimized blend of the underlying
purposes of the M-ELO and M-ELO+CB Order Types: protection against
adverse selection (low mark-outs) without sacrificing opportunities to
achieve high-quality executions (high fill rates).
    A proposed M-ELO or M-ELO+CB with a Dynamic Holding Period will
operate as follows. At the outset of Market Hours (approximately
9:30:00 a.m.), the Exchange will impose initial Holding Periods of 1.25
milliseconds for M-ELOs and M-ELO+CBs in all symbols. Thereafter,
Holding Periods for a given symbol will become eligible to change
dynamically from the initial duration beginning at 9:30:30 a.m. and
then at 30 second intervals thereafter during Market Hours. The
Exchange will then apply to the M-ELO or M-ELO+CB Order a Holding
Period that is of the duration that prevailed at the time of entry. For
example, if participant A enters a M-ELO for symbol XYZ at 9:30:25
a.m., then Holding Period for that M-ELO will be 1.25 milliseconds. If
at 9:30:30:00 a.m., the System decides to lower the duration of the
Holding Period by 0.50 milliseconds, and then participant B enters a M-
ELO for symbol XYZ at 9:30:45 a.m., then the System will assign a 0.75
millisecond Holding Period to participant B's M-ELO. To be clear, the
System will determine Dynamic M-ELO Holding Periods independently for
M-ELOs and M-ELO+CBs in each symbol.
    During normal market conditions, the range of potential Holding
Period durations for M-ELOs and M-ELO+CBs will be between 0.25-2.50
milliseconds, with the Holding Period duration being eligible to change
by increments of either 0.25 or 0.50 milliseconds at each Change Event.
Thus, if the Holding Period for a M-ELO in symbol XYZ is set at 0.75
milliseconds at 2:22:11 p.m., and at 2:22:41 p.m., the System
determines to increase the duration of the Holding Period, it may do so
only by 0.25 or 0.50 milliseconds during that event.
    When a Change Event occurs, and the System determines to adjust the
duration of a Holding Period for a symbol, that adjustment will apply,
not only to all M-ELOs and M-ELO+CBs for that symbol entered within the
30 second period after the Change Event occurs, but also to M-ELOs and
M-ELO+CBs entered prior to the Change Event with unexpired Holding
Periods (with applicability retroactive to the time of Order
acceptance). Thus, if a participant enters a M-ELO in symbol XYZ at
1:14:299 p.m., and the prevailing Holding Period applicable to that M-
ELO is 2 milliseconds, and at 1:14:30 p.m., the System modifies the
Holding Period to be 1.5 milliseconds, then the M-ELO will become
eligible to execute at 1:14:3005 p.m. This is the case because the M-
ELO will have already expended 1 millisecond of its Holding Period as
of the time of the Change Event; thereafter, the M-ELO will need to
rest only another 0.5 milliseconds to become eligible to execute under
the new 1.5 millisecond Holding Period (as measured from 1:14:299
p.m.). This last feature ensures that the M-ELO Book maintains time
priority among M-ELOs and M-ELO+CBs in a dynamic environment. That is,
it ensures that no M-ELO or M-ELO+CB with an unexpired Holding Period
at the time of a Change Event will end up becoming eligible to execute
later than a M-ELO entered after the Change Event which has a shorter
Holding Period applicable to it.
    If at any time, the System detects extraordinary instability in a
symbol, then the System will activate a ``stability protection
mechanism'' to provide an extra layer of protection to M-ELO and M-ELO
users from the heightened risks of adverse selection that exists during
such periods of instability.\23\ The stability protection mechanism
will override the prevailing Holding Periods for M-ELOs and M-ELO+CBs
in a symbol experiencing extraordinary instability and immediately
increase the duration of those Holding Periods to 12 milliseconds for a
period of 750 milliseconds. The System may activate the stability
protection mechanism even between Change Events. The System will
evaluate, at each NBBO update, whether market conditions remain
extraordinarily unstable and, if so, it will restart the 750
millisecond Stability Protected Period and maintain the 12

millisecond Holding Period until conditions stabilize. Once the System
determines that market conditions have stabilized (i.e., all
measurements for the symbol are at or below the threshold value
throughout the duration of the prevailing Stability Protected Period),
the System will revert the duration of the Holding Periods to that
which prevailed as of the Change Event that occurred immediately prior
to the activation of the stability protection mechanism or, if the
stability protection mechanism was active when a Change Event occurred,
to the duration selected at the immediately preceding Change Event. The
System will then proceed to reevaluate the duration of the Holding
Periods as per the regular schedule of Change Events.
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    \23\ For purposes of this Rule, the System determines that
``extraordinary instability'' for a symbol exists through
observations it makes following every change in the NBBO for that
symbol that occurs during the trading day. When the NBBO changes,
the System looks back at the prior three seconds of trading and
measures the difference between the highest and the lowest NBBO
midpoint values that occurred during that period, and then it
compares that measurement to a threshold value for the symbol. The
System concludes that extraordinary instability exists for a symbol
if the measurement exceeds the threshold value. The threshold value
for a symbol, in turn, is the difference between the highest and the
lowest NBBO midpoint values for the symbol that, if applied to its
trading activity during the prior trading day, would have caused the
System to deem trading in the symbol to be extraordinarily unstable
for as close to one percent of that day as possible.
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    The following is an illustration of the operation of the stability
protection mechanism. At 11:10:04 a.m., the prevailing Holding Period
for M-ELOs in symbol XYZ is 1.5 milliseconds. At the same time, the
NBBO for symbol XYZ updates. The System looks back at the prior three
seconds of trading in symbol XYZ and finds that during that period, the
highest observed NBBO midpoint was $10.05, and the lowest was $10.00,
such that the difference between these two values is a range of $0.05.
The System then looks back at trading behavior for symbol XYZ during
the immediately preceding trading day. In doing so, the System
calculates the value of the threshold that would have caused the symbol
to be deemed extraordinarily unstable for one percent of the trading
day; the System determines that this threshold value is a range of
$0.03. The System then compares the $0.03 threshold to its measurement
of the prior three seconds of NBBO changes ($0.05), and concludes that
over these past three seconds, the symbol is extraordinarily unstable.
Accordingly, the System activates the stability protection mechanism
and the Holding Period for M-ELOs in symbol XYZ immediately increases
to 12 milliseconds for a period of 750 milliseconds. However, 5
milliseconds after the Stability Protection Period commences, the NBBO
updates again, thus prompting the System to repeat its assessment of
the stability of the symbol in light of the update. This reassessment
reveals that the symbol remains unstable, such that a new Stability
Protection Period of 750 milliseconds begins at that time (overriding
the pre-existing Period). Over the course of this new Stability
Protection Period, the NBBO shifts two more times, but each of the
ensuing reassessments indicate that the NBBO ranges for the symbol have
fallen below the $0.03 threshold. The Stability Protection Period
elapses 750 milliseconds after it began with the symbol remaining
stable. Thus, the Holding Period reverts to 1.5 milliseconds.
    If the Exchange halts trading in a symbol, then upon resumption of
trading, any new M-ELO or M-ELO+CB in that symbol and any pending M-ELO
or M-ELO+CB in that symbol with an unexpired Holding Period will be
subject to a new 12 milliseconds Holding Period (running from the time
when trading resumes) until the next scheduled Change Event, at which
point the System may determine to adjust that Holding Period to a
duration within the range applicable under normal market
conditions.\24\ If, however, the System determines that extraordinary
instability in the symbol exists, it will instead determine to activate
the stability protection mechanism and maintain the duration of the
Holding Period at 12 milliseconds for another 750 milliseconds. This
design will help to ensure that M-ELOs and M-ELO+CBs receive added
protection coming out of halt conditions.\25\
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    \24\ Prior to commencement of a new 12 millisecond Holding
Period for a new or pending M-ELO or M-ELO+CB following a Halt, the
System will first determine whether the M-ELO or M-ELO+CB is or
remains eligible for execution. That is, the Holding Period will
commence only if, upon commencement of trading following the Halt,
the midpoint price for the Order is within the limit set by the
participant. If not, the System will hold the Order until the
midpoint falls within the limit set by the participant, at which
time the 12 millisecond Holding Period will commence.
    \25\ Also as a safeguard, the System will apply a default
Holding Period of 12 milliseconds to a M-ELO or M-ELO+CB if ever it
fails to receive a signal during a Change Event as to whether the
System should adjust or maintain the duration of the prevailing
Holding Period. The System will continue to apply the default 12
millisecond Holding Period until the next Change Event where the
signal is restored and the System is able to act dynamically again.
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    The Exchange notes that same dynamic process described above will
also apply to and govern the time periods during which Midpoint Orders
on the Continuous Book must rest before they will become eligible to
interact with M-ELO+CBs (provided that participants have opted for
their Midpoint Orders to interact with M-ELO+CBs). Thus, the same
Holding Period duration that the System sets for a M-ELO+CB in a symbol
during Regular Market Hours will also be the length of time that a
Midpoint Order must rest on the Continuous Book must rest before it may
interact with a M-ELO+CB.
    Apart from these impacts of Dynamic Holding Periods, M-ELOs and M-
ELO+CBs will continue to behave as they do now in all respects, and as
set forth in Rules 4702(b)(14) and (15).
    It is important to note that within the parameters discussed herein
and in the White Paper, the Exchange will continue to re-train Dynamic
M-ELO and M-ELO+CB on a weekly basis (outside of market hours) so that
the model will continue to learn from and act upon the basis of more
recent SIP and M-ELO book data sets, and further improve its
performance over time. The retraining process should not result in
dramatic or unpredictable changes to the behavior of Dynamic M-ELO. The
retraining process will not retrain the model from scratch each week;
rather, it will retain the model's existing data inputs, knowledge
base, and objectives--all without alteration. Retraining will result in
new behaviors only as needed to address new scenarios that the model
did not confront previously, and even then, only in a manner designed
to further optimize outcomes, i.e., reduce mark-outs or increase fill
rates. If the System assesses that a retrained model would be worse
than the existing model in achieving its objectives, then the System
will continue to use the existing model and discard the retrained
model. This retraining process is a standard and accepted practice for
use of deep learning models; it helps to ensure that deep learning
models not only work well, but that they continue to work well in
dynamic circumstances.\26\
---------------------------------------------------------------------------

    \26\ During periods where the model is not undergoing
retraining, the System will behave predictably from day to day, such
that its decisions when presented with given set of facts and
circumstances in a given security on day 1 should be the same as
they would be on day 2.
---------------------------------------------------------------------------

    The Exchange will not modify the underlying structure of Dynamic M-
ELO and M-ELO+CB without first obtaining the Commission's approval to
do so, including modifications to the data elements the model considers
in making decisions about Holding Period durations, the conditions
under which the model may adjust the duration of Holding Periods, the
frequency with which the model my adjust the Holding Periods, the range
of Holding Period durations available to M-ELOs and M-ELO+CBs, the
increments by which Holding Periods may change at any given Change
Event, and the procedures for triggering, maintaining, and ending 12
millisecond Holding Periods during times of extraordinary
instability.\27\

Although the Exchange will seek Commission approval prior to changing
any of the data elements that the model considers, the Exchange will
not seek Commission approval prior to retraining the model to adjust
the weighting it applies to those data elements.
---------------------------------------------------------------------------

    \27\ In addition to the proposed changes described above, the
Exchange proposes to delete an extraneous reference in Rule
4702(b)(15) to M-ELO+CB being eligible to execute against a Midpoint
Order on the Continuous Book if the Continuous Book order has the
``Midpoint'' Trade Now Attribute enabled. In a prior filing, the
Exchange folded the concept of ``Midpoint Trade Now'' into the
general ``Trade Now'' Attribute. See Securities Exchange Act Release
No. 34-92180 (June 15, 2021), 86 FR 33420 (June 24, 2021)(SR-NASDAQ-
2021-044).
---------------------------------------------------------------------------

    To aid investors in understanding and evaluating Dynamic M-ELO,
Nasdaq will continue to publish weekly and monthly transparency
statistics on Nasdaqtrader.com, as it does now, about the performance
of its M-ELOs and M-ELO+CBs, including statistics listing the weekly
numbers of shares and trades in M-ELOs by symbol, weekly aggregated M-
ELO share and trade data, and monthly aggregated block data.\28\ Nasdaq
also will continue to disclose monthly data on Nasdaq.com, as it does
now (the M-ELO Monthly Report), about M-ELO and M-ELO+CB mark-outs
(quote stability by time horizon) and fill rates.\29\ Moreover, Nasdaq
will add statistics to the M-ELO Monthly Report about how frequently,
on average, the System changes Holding Period durations for the top
decile, median, and bottom decile of symbols, as measured by monthly M-
ELO and M-ELO+CB trading volumes. Nasdaq will retain copies of each
historical iteration of its models as part of its books and records,
and make them available to the Commission upon request, should it wish
to examine them to understand how the model changes over time.
Furthermore, Nasdaq will publish an equity trader alert in advance of
deploying a retrained version of Dynamic M-ELO whenever Nasdaq has
reason to anticipate that the retrained version will produce results
that differ materially from the prior version, i.e., a projected change
in mark-outs or fill-rates of 10% or more in either direction.
---------------------------------------------------------------------------

    \28\ See http://www.nasdaqtrader.com/Trader.aspx?id=MELOSymbolData.
    \29\ See, e.g., https://www.nasdaq.com/docs/M-ELO-Monthly-Report. Nasdaq understands that current users of M-ELO and M-ELO
independently monitor the performance of these Order Types. Nasdaq
often receives feedback from such users about M-ELO and M-ELO+CB
performance, which Nasdaq then factors into decisions about
improvements and enhancements. Nasdaq expects that this feedback
loop will continue after implementation of Dynamic M-ELO.
---------------------------------------------------------------------------

Implementation
    The Exchange intends to make the proposed change effective for M-
ELOs and M-ELO+CBs in the Second or Third Quarter of 2023, but that
time frame is subject to change. The Exchange will publish a Trader
Alert in advance of making the proposed change effective.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\30\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\31\ 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 allowing for more widespread use of M-ELOs and M-ELO+CBs.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78f(b).
    \31\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    When the Commission approved the M-ELO and the M-ELO+CB, it
determined that these Order Types are consistent with the Act because
they ``could create additional and more efficient trading opportunities
on the Exchange for investors with longer investment time horizons,
including institutional investors, and could provide these investors
with an ability to limit the information leakage and the market impact
that could result from their orders.'' \32\ Nothing about the
Exchange's proposal should cause the Commission to revisit or rethink
this determination. Indeed, the proposal will not alter the fundamental
design of these Order Types, the manner in which they operate, or their
effects.
---------------------------------------------------------------------------

    \32\ M-ELO Approval Order, supra 83 FR at 10938-39; M-ELO+CB
Approval Order, supra, 84 FR at 48980.
---------------------------------------------------------------------------

    Even with Dynamic M-ELO Holding Periods, M-ELOs and M-ELO+CBs will
continue to provide their users with protection against information
leakage and adverse selection--and they will do so at levels which are
substantially undiminished from that which they provide now.\33\
---------------------------------------------------------------------------

    \33\ See note 12, supra.
---------------------------------------------------------------------------

    At the same time, however, the proposal will benefit market
participants and investors by reducing the opportunity costs of
utilizing M-ELOs and M-ELO+CBs. The proposal, in other words, will re-
calibrate the lengths of the Holding Periods so that M-ELOs and M-
ELO+CBs will operate in the ``Goldilocks'' zone--their Holding Periods
will not be so short as to render them unable to provide meaningful
protections against information leakage and adverse selection, but the
Holding Periods also will not be too long so as to cause participants
and investors to miss out on favorable execution opportunities. Nasdaq
believes the proposal will render M-ELOs and M-ELO+CBs more useful and
attractive to market participants and investors, and this increased
utility and attractiveness, in turn, will spur an increase in M-ELO and
M-ELO+CB use cases on the Exchange, both from new and existing users of
M-ELOs and M-ELO+CBs. Ultimately, the proposal should enhance market
quality by increasing opportunities for midpoint executions on the
Exchange.
    As Nasdaq explained above, the proposal will operate within strict,
well-defined, and transparent parameters. Although it will undergo
weekly retraining (outside of market hours), such retraining will aim
to improve the performance of the model in achieving its twin
objectives; retraining will not alter the inputs, objectives, or basic
design parameters of Dynamic M-ELO without prior Commission
approval.\34\ Moreover, the Exchange will not deploy a retrained model
if it fails to achieve performance improvements. To aid investors in
evaluating Dynamic M-ELO, the Exchange will publish statistics about
its performance, including as to mark-outs and fill rates, as well as
statistics about how frequently the System changes Holding Period
durations. To further facilitate accountability, the Exchange will
retain each historical iteration of its model as part of its books and
records, and make such information available to the Commission, upon
request. The Exchange will also publish equity trader alerts whenever
retraining will result in a performance change of 10% or more.
---------------------------------------------------------------------------

    \34\ As discussed above, Nasdaq will not seek Commission
approval prior to allowing the model, as part of its re-training
process, to vary the weighting of the data elements it ingests.
Nasdaq believes this is appropriate because such variance will only
occur to the extent that it will improve the model's performance
with respect to pre-defined objectives. Nasdaq will alert traders if
the retraining process would result in substantial performance
changes, and it will also publish statistics to help participants to
assess performance themselves. Moreover, Nasdaq will retain
historical iterations of its models for the Commission's review,
should it wish to examine how these models have changed over time.
---------------------------------------------------------------------------

    Nasdaq notes that the twin objectives it prescribes for the model
involve the absolute values of mark-outs and fill rates; they are not
designed to further the performance of any participant or any category
of participant. Thus, Nasdaq believes the model is objective and
designed to avoid bias and discrimination.
    The Exchange notes that use of Dynamic M-ELOs and M-ELO+CBs remains
voluntary for all market participants. Accordingly, if any market
participant feels that the dynamic Holding Periods are still too long
or too short or because competing venues offer more attractive delay
mechanisms, then

the participants are free to pursue other trading strategies or utilize
other trading venues. They need not utilize Dynamic M-ELOs or M-
ELO+CBs.
    Furthermore, the design of Dynamic-MELO would constitute an
``established, non-discretionary'' method that is consistent with the
definition of an exchange, as set forth in SEC Rule 3b-16.\35\ The
Commission stated as follows when it adopted Rule 3b-16:
---------------------------------------------------------------------------

    \35\ See 17 CFR 240.3b-16(a)(2) (``(a) An organization,
association, or group of persons shall be considered to constitute,
maintain, or provide `a market place or facilities for bringing
together purchasers and sellers of securities or for otherwise
performing with respect to securities the functions commonly
performed by a stock exchange,' as those terms are used in section
3(a)(1) of the Act, (15 U.S.C. 78c(a)(1)), if such organization,
association, or group of persons: (1) Brings together the orders for
securities of multiple buyers and sellers; and (2) Uses established,
non-discretionary methods (whether by providing a trading facility
or by setting rules) under which such orders interact with each
other, and the buyers and sellers entering such orders agree to the
terms of a trade.'').

    A system uses established non-discretionary methods either by
providing a trading facility or by setting rules governing trading
among subscribers. The Commission intends for ``established, non-
discretionary methods'' to include any methods that dictate the
terms of trading among the multiple buyers and sellers entering
orders into the system. Such methods include those that set
procedures or priorities under which open terms of a trade may be
determined. For example, traditional exchanges' rules of priority,
parity, and precedence are ``established non-discretionary
methods,'' as are the trading algorithms of electronic systems.
Similarly, systems that determine the trading price at some
designated future date on the basis of pre-established criteria
(such as the weighted average trading price for the security on the
specified date in a specified market or markets) are using
established, non-discretionary methods.\36\
---------------------------------------------------------------------------

    \36\ See Securities Exchange Act Release No. 40760 (December 8,
1998), 63 FR 70844, 70850 (December 22, 1998).

    Nothing in the Reg. ATS Adopting Release or in any of its
illustrative examples suggests that Dynamic M-ELO would constitute an
exercise of discretionary behavior. Dynamic M-ELO will handle and
execute Orders according to published, pre-determined rules that are
disclosed to the public and which provide reasonable notice of how the
Order Type will behave.\37\ To the extent that the design of the System
permits variation in the Holding Periods for such Orders, it does so by
design. The range of potential variations, the objectives that such
variations are intended to achieve, and the factors that determine when
such variations may occur are also predetermined and set forth in the
Exchange's Rules or otherwise disclosed to the public. The mere fact
that the System may apply different weights over time to the factors it
uses to determine whether and by how much to vary a Holding Period does
not mean that the System will act with discretion in the same sense
that a human being could be said to be exercise independent judgment
when deciding whether and how to handle an order.\38\ Even when the
System makes decisions about changing the Holding Periods, the System
will operate pursuant to a mathematical algorithm from which it cannot
deviate--an algorithm that is programmed to achieve pre-defined and
pre-disclosed objectives.\39\
---------------------------------------------------------------------------

    \37\ See id. at 70900 (``an essential indication of the non-
discretionary status of rules and procedures is that those rules and
procedures are communicated to the systems users'' and ``[t]hus,
participants have an expectation regarding the manner of execution--
that is, if an order is entered, it will be executed in accordance
with those procedures and not at the discretion of a counterparty or
intermediary.'').
    \38\ Cf. id. at 70851 (explaining that a traditional block
trading desk is an example of a system that does not use
established, non-discretionary methods because the operators of such
desks do not act according to fixed procedures known to their
customers, but instead shop orders around for potential
counterparties and make their own determinations as to whether and
how to execute block orders, including by sometimes deciding to take
a proprietary position in part of the block order).
    \39\ See id. at 80755 (describing an example of a system that
would be non-discretionary in nature: ``System I permits
participants to enter a range of ranked contingent buy and sell
orders at which they are willing to trade securities. These orders
are matched based on a mathematical algorithm whose priorities are
designed to achieve the participants' objectives. System I does not
display orders to any participants. System I is included under Rule
3b-16.''); see also Securities Exchange Act Release No. 34-89686
(August 20, 2020), 85 FR 54438, at 54445, n.92 (September 1, 2020)
(Order approving SR-IEX-2019-15) (rejecting argument that IEX's D-
Limit order time is an exercise of discretion because ``D-Limit
orders will not allow IEX to exercise any discretion on any
particular order by deviating from the CQI and D-Limit
functionality, which is hardcoded in the IEX rulebook.''; Securities
Exchange Act Release No. 34-78101 (June 17, 2016), 81 FR 41141, at
41153(June 17, 2016) (Order approving IEX Form 1 and D-Peg Order
Type) (``the Commission does not believe that the hardcoded
conditionality of the IEX proposed ``discretionary'' peg order type
provides IEX with actual discretion or the ability to exercise
individualized judgment when executing an order. Rather, if IEX's
fixed formula determines the quote to be stable, the discretionary
peg order can execute up to the midpoint; if it does not deem the
quote to be stable, then it will hold the order to its pegged price.
As such, IEX would not exercise discretion over the routing and
execution of a resting order''). Nasdaq does not believe that it is
necessary to codify its mathematical formula for Dynamic M-ELO in
its Rules because Nasdaq has disclosed sufficient information in its
Rules and in its filing to inform the public as to the possible and
expected behaviors associated with Dynamic M-ELO, as well as a means
for the Commission and/or investors to verify whether Dynamic M-ELO
is performing appropriately. Much as the Commission does not require
an exchange to codify the source code it uses to effectuate other
behaviors or actions that it explains in its Rules, including the
behaviors of other complex Order Types, there is no basis to require
codification of the Dynamic M-ELO formula in this instance.
---------------------------------------------------------------------------

    Finally, the Exchange notes that it will continue to conduct real-
time surveillance to monitor the use of M-ELOs and M-ELO+CBs to ensure
that such usage remains appropriately tied to the intent of the Order
Types. If, as a result of such surveillance, the Exchange determines
that the Dynamic M-ELO Holding Periods do not serve their intended
purposes, or adversely impact market quality, then the Exchange will
seek to make further re-calibrations.

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 Exchange
believes that this proposal will promote the competitiveness of the
Exchange by rendering its M-ELO and M-ELO+CB Order Types more
attractive to participants.
    The Exchange adopted the M-ELO and M-ELO+CB as pro-competitive
measures intended to increase participation on the Exchange by allowing
certain market participants that may currently be underserved on
regulated exchanges to compete based on elements other than speed. The
proposed change continues to achieve this purpose. With Dynamic M-ELO
Holding Periods, both M-ELOs and M-ELO+CBs will afford their users with
a level of protection from information leakage and adverse selection
that is better from what is achievable at present.\40\ At the same
time, the Dynamic Holding Periods will increase opportunities to
interact with other like-minded investors with longer time horizons
while also lowering the opportunity costs for participants that utilize
M-ELOs and M-ELO+CBs, particularly for securities that trade within the
``Goldilocks'' zone. In sum, the proposed changes will not burden
competition, but instead may promote competition for liquidity in M-
ELOs and M-ELO+CBs by broadening the circumstances in which market
participants may find such Orders to be useful. With the proposed
changes, market participants will be more likely to determine that the
benefits of entering M-ELOs and M-ELO+CBs outweigh the risks of doing
so.
---------------------------------------------------------------------------

    \40\ See White Paper, supra.
---------------------------------------------------------------------------

    The proposed change will not place a burden on competition among
market

venues, as any market may adopt an order type that operates similarly
to a M-ELO or a M-ELO+CB with Dynamic M-ELO Holding Periods.

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. Proceedings To Determine Whether To Approve or Disapprove SR-
NASDAQ-2022-079, as Modified by Amendment No. 1, and Grounds for
Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \41\ to determine whether the proposed rule
change, as modified by Amendment No.1, should be approved or
disapproved. Institution of proceedings is appropriate at this time in
view of the legal and policy issues raised by the proposed rule change
and the comments received thereon. Institution of proceedings does not
indicate that the Commission has reached any conclusions with respect
to any of the issues involved. Rather, the Commission seeks and
encourages interested persons to provide additional comment on the
proposed rule change to inform the Commission's analysis of whether to
approve or disapprove the proposed rule change.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2)(B) of the Act,\42\ the Commission is
providing notice of the grounds for possible disapproval under
consideration. As noted above, the Commission received two comments on
the proposal and the Exchange simultaneously filed a response to
comments along with Amendment No. 1.\43\ Of note, both commenters
assert that the Exchange must provide additional information about how
it determines the Dynamic Holding Periods proposed herein.\44\ One of
these commenters states that ``as a threshold question, how can the
public `provide meaningful comment on the proposal' without knowing
what all the categories and parameters are.'' \45\ This commenter also
states that it is unclear under what circumstances the Exchange
believes it would need to file a proposed rule change should the
machine learning model alter its methods or functionalities,
specifically citing the proposed retraining of the artificial
intelligence based timer control system.\46\ This commenter also
questions whether the proposed rule change provides sufficient
information to determine whether (i) it is not unfairly discriminatory
and (ii) will not place a burden on competition among market
venues.\47\
---------------------------------------------------------------------------

    \42\ Id.
    \43\ See supra note 6.
    \44\ See Letters from Joseph Saluzzi, Partner, Themis Trading
LLC, to Vanessa Countryman, Secretary, Commission, dated January 25,
2023, at 2 (``Nasdaq should be required to reveal all of the
specifics behind their dynamic holding period formula so others can
evaluate how it works and decide if they would like to have Nasdaq
apply the logic to their orders.''); and R. T. Leuchtkafer to
Vanessa Countryman, Secretary, Commission, dated January 31, 2023,
at 1-2 (``Leuchtkafer Letter'').
    \45\ See Leuchtkafter Letter, at 1.
    \46\ See id., at 2 (stating that ``it's not at all clear under
exactly what circumstances Nasdaq will seek approval for a
change.'').
    \47\ See id., at 2-3.
---------------------------------------------------------------------------

    Nasdaq replied to these comments with its own comment letter and by
filing Amendment No. 1. Nasdaq states, among other things, that it is
not necessary to describe precisely how its system will react in each
and every circumstance it will confront in the market as long as the
choices that the system can make are bounded and its range of behaviors
are understood and reasonably predictable, which it asserts is ``indeed
the case for Dynamic M-ELO.'' \48\ Nasdaq also submitted the full list
of these data elements as both an Appendix A to its response to
comments and new Exhibit 3B to the proposal in Amendment No. 1. Nasdaq
also states that:
---------------------------------------------------------------------------

    \48\ See Letter from Brett Kitt, Associate Vice President and
Principal Associate General Counsel, Nasdaq, Inc., to Vanessa
Countryman, Secretary, Commission, dated March 9, 2023, at 2
(``Nasdaq Letter'').

    Nasdaq is clear that it will seek approval prior to altering the
data inputs that the system ingests for decision-making purposes,
but not for changes to the relative weighting that the system
applies to these data elements. Nasdaq also will seek Commission
approval prior to altering the twin objectives of Dynamic M-ELO or
making changes to its fundamental operating parameters, such as
changes to the permissible range of Holding Periods, to the
permissible change increments for a Holding Period at any given
Change Event, to the frequency with which Change Events may occur,
to the procedures for triggering, maintaining, and ending 12
millisecond Holding Periods during times of extraordinary
instability.\49\
---------------------------------------------------------------------------

    \49\ See Nasdaq Letter at 3.

    The Commission is instituting proceedings to allow for additional
analysis of, and input from commenters with respect to, the consistency
of the proposal, as modified by Amendment No. 1, with Sections 6(b)(5)
\50\ and 6(b)(8) of the Act.\51\ Section 6(b)(5) of the Act requires
that the rules of a national securities exchange be designed, among
other things, 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, and not be designed to permit unfair
discrimination between customers, issuers, brokers, or dealers. Section
6(b)(8) of the Act requires that the rules of a national securities
exchange not impose any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \50\ 15 U.S.C. 78f(b)(5).
    \51\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

IV. Procedure: Request for Written Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal, as modified by Amendment No. 1. In particular, the
Commission invites the written views of interested persons concerning
whether the proposal, as modified by Amendment No. 1, is consistent
with Sections 6(b)(5) and 6(b)(8), or any other provision of the Act,
or the rules and regulations thereunder. Although there do not appear
to be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\52\
---------------------------------------------------------------------------

    \52\ Section 19(b)(2) of the Act, as amended by the Securities
Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Act Amendments of 1975, Senate Comm. on
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
---------------------------------------------------------------------------

    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposal, as modified by Amendment No.
1, should be approved or disapproved by May 4, 2023. Any person who
wishes to file a rebuttal to any other person's submission must file
that rebuttal by May 18, 2023.
    Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or

     Send an email to [email protected]. Please include
File Number SR-NASDAQ-2022-079 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 Numbers SR-NASDAQ-2022-079. 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 (https://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 these filings 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-2022-079 and should
be submitted on or before May 4, 2023. Rebuttal comments should be
submitted by May 18, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\53\
---------------------------------------------------------------------------

    \53\ 17 CFR 200.30-3(a)(12), (57).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-07733 Filed 4-12-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: December 1, 2009 (Volume 74, Number 229)]
[Rules and Regulations]
[Page 62700]
[DOCID:fr01de09-12]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 117

[Docket Number USCG-2009-1011]

Drawbridge Operating Regulations; Victoria Barge Canal,
Bloomington, Texas

AGENCY: Coast Guard, DHS.

ACTION: Notice of temporary deviation from regulations.

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SUMMARY: The Commander, Eighth Coast Guard District, has issued a
temporary deviation from the regulation governing the operation of the
Union Pacific Railroad (UPRR) Vertical Lift Span Bridge across the
Victoria Barge Canal, mile 29.4 at Bloomington, Victoria County, Texas.
The deviation is necessary to allow for replacement of the steel lift
cables of the draw span.

DATES: This deviation is effective from 8 a.m. on Wednesday, December
9, 2009 until 6 p.m. on Wednesday, December 23, 2009.

ADDRESSES: Documents mentioned in this preamble as being available in
the docket are part of docket USCG-2009-1011 and are available online
by going to www.regulations.gov, inserting USCG-2009-1011 in the
``Keyword'' box and then clicking ``Search.'' They are also available
for inspection or copying at the Docket Management Facility (M-30),
U.S. Department of Transportation, West Building Ground Floor, Room
W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590 between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or e-mail Phil Johnson, Bridge Administration Branch, Eighth Coast
Guard District; telephone<PHONE_NUMBER>, e-mail
<EMAIL_ADDRESS>If you have questions on viewing the docket,
call Renee V. Wright, Program Manager, Docket Operations, telephone
202-366-9826.

SUPPLEMENTARY INFORMATION: The Victoria County Navigation District has
requested a temporary deviation from the operating schedule of the UPRR
Vertical Lift Span Bridge across the Victoria Barge Canal, mile 29.4 at
Bloomington, Texas. The vertical lift bridge has a vertical clearance
of 22 feet above high water in the closed-to-navigation position and 50
feet above high water in the open-to-navigation position.
    Presently, the bridge opens on signal for the passage of vessels.
This deviation allows the draw span of the bridge to remain closed to
navigation for 10 consecutive hours between 8 a.m. and 6 p.m. on
intermittent days from December 9 through December 23, 2009.
Uncontrollable variables such as material supply delays and inclement
weather make it difficult to predict the exact dates that work can be
conducted. Thus, the exact dates for the closures cannot be firmly
scheduled. Notices will be published in the Eighth Coast Guard District
Local Notice to Mariners and will be broadcast via the Coast Guard
Broadcast Notice to Mariners System as soon as information pertaining
to the exact closure dates becomes available. Navigation on the
waterway consists mainly of tugs with tows. Due to prior experience and
coordination with waterway users, it has been determined that this
closure will not have a significant effect on these vessels.
    No alternate routes are available. The closures are necessary for
the replacement of the steel lift cables on the bridge. The Coast Guard
will coordinate the closures with the commercial users of the waterway
as exact closure dates are known.
    In accordance with 33 CFR 117.35(e), the drawbridge must return to
its regular operating schedule immediately at the end of the designated
time period. This deviation from the operating regulations is
authorized under 33 CFR 117.35.

    Dated: November 18, 2009.
David M. Frank,
Bridge Administrator.
[FR Doc. E9-28704 Filed 11-30-09; 8:45 am]

BILLING CODE 9110-04-P