Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the…

Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Implementation Date of Its Functionality Relating to Midpoint Peg Post-Only Orders and Orders With Midpoint Pegging

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April 6, 2017.

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 March 31, 2017, The NASDAQ Stock Market LLC (“Nasdaq” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “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.

FOOTNOTE 1 15 U.S.C. 78s(b)(1). END FOOTNOTE

FOOTNOTE 2 17 CFR 240.19b-4. END FOOTNOTE

I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change

The Exchange proposes to extend the implementation date of its functionality relating to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging.

There is no rule text for this proposed rule change.

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

Nasdaq is filing this proposal to extend the implementation date of its functionality relating to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging. The functionality relating to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging was approved by the SEC on November 10, 2016. /3/

FOOTNOTE 3 See Securities Exchange Act Release No. 79290 (November 10, 2016), 81 FR 81184 (November 17, 2016) (SR-NASDAQ-2016-111). END FOOTNOTE

Nasdaq proposed to amend Rule 4702 (Order Types) to change its Midpoint Peg Post-Only Order, so that, if the NBBO is crossed, any existing Midpoint Peg Post-Only Order would be cancelled and any new Midpoint Peg Post-Only Order would be rejected. Similarly, Nasdaq proposed to amend Rule 4703 (Order Attributes) so that, if the Inside Bid and Inside Offer are crossed, any existing Order with Midpoint Pegging would be cancelled and any new Order with Midpoint Pegging would be rejected. /4/

FOOTNOTE 4 See Securities Exchange Act Release No. 79290 (November 10, 2016), 81 FR 81184 (November 17, 2016) (SR-NASDAQ-2016-111). END FOOTNOTE

Nasdaq initially proposed to implement this new functionality on November 21, 2016. /5/ However, Nasdaq decided to delay the implementation of this new functionality to provide additional time for systems testing to no later than March 31, 2017. /6/

FOOTNOTE 5 See Equity Trader Alert #2016-291. END FOOTNOTE

FOOTNOTE 6 See Securities Exchange Act Release No. 80045 (February 15, 2017), 82 FR 11389 (February 22, 2017) (SR-NASDAQ-2017-013). END FOOTNOTE

Nasdaq has now determined to delay the implementation of the functionality relating to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging to no later than May 31, 2017 to allow additional time for systems testing. Nasdaq will announce the new implementation date by an Equity Trader Alert, which shall be issued prior to the implementation date.

2. Statutory Basis

The Exchange believes that its proposal is consistent with Section 6(b) of the Act, /7/ in general, and furthers the objectives of Section 6(b)(5) of the Act, /8/ 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. The purpose of this proposal is to inform the SEC and market participants of the new implementation date for the functionality relating to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging. This functionality was previously proposed in a rule filing that was submitted to the SEC, and this proposal does not change the substance of this functionality. Nasdaq is delaying the implementation date of this functionality to provide for further systems testing prior to implementing this functionality.

FOOTNOTE 7 15 U.S.C. 78f(b). END FOOTNOTE

FOOTNOTE 8 15 U.S.C. 78f(b)(5). END FOOTNOTE

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. As noted above, the purpose of this proposal is to extend the implementation date for the functionality relating to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging so that Nasdaq may perform additional systems testing prior to implementing this functionality.

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

No written comments were either solicited or received.

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

Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder. /9/

FOOTNOTE 9 17 CFR 240.19b-4(f)(6). As required under Rule 19b-4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the 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. END FOOTNOTE

A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act /10/ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) /11/ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange previously announced that it would implement the functionality relating to Midpoint Peg Post-Only Orders and Orders with Midpoint Pegging no later than March 31, 2017. /12/ The Exchange now proposes to delay the implementation date to no later than May 31, 2017. Waiver of the 30-day operative delay would allow the Exchange to immediately extend the implementation date and provide additional time for systems testing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the 30-day operative delay and designates the proposal operative upon filing. /13/

FOOTNOTE 10 17 CFR 240.19b-4(f)(6). END FOOTNOTE

FOOTNOTE 11 17 CFR 240.19b-4(f)(6)(iii). END FOOTNOTE

FOOTNOTE 12 See supra note 6. END FOOTNOTE

FOOTNOTE 13 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). END FOOTNOTE

At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved.

IV. Solicitation of Comments

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

Electronic Comments

* Use the Commission’s Internet comment form (http://www.sec.gov/rules/sro.shtml); or

* Send an email to rule-comments@sec.gov. Please include File Number SR-NASDAQ-2017-034 on the subject line.

Paper Comments

* Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

–This is a summary of a Federal Register article originally published on the page number listed below–

Citation: “82 FR 17714”

Document Number: “Release No. 34-80391; File No. SR-NASDAQ-2017-034”

Federal Register Page Number: “17714”

“Notices”