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Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Adopt an “All-or-None” Order Type

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Start Preamble July 28, 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 July 22, 2011, The NASDAQ Stock Market LLC (the “Exchange” or “NASDAQ”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III 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.

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

NASDAQ is filing with the Securities and Exchange Commission (“Commission”) a proposal for the NASDAQ Options Market (“NOM”) to amend Chapter VI, Trading Systems, Section 1, Definitions, and Section 6, Acceptance of Quotes and Orders, to adopt an “All-or-none” order type, as described further below. The Exchange also proposes to amend the definition of “Immediate or Cancel” to accommodate market orders.

This change is scheduled to be implemented on NOM on or about September 1, 2011; the Exchange will announce the implementation schedule by Options Trader Alert, once the rollout schedule is finalized.

The text of the proposed rule change is available at​, 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 purpose of the proposed rule change is to introduce a new order type to NOM and permit market orders to be designated as Immediate or Cancel orders. Specifically, an All-or-None order is a limit or market order that is to be executed in its entirety or not at all. All-or-None Orders will be treated as having a time-in-force designation of Immediate or Cancel, as described further below.[3] All-or-None Orders received prior to the opening cross or after market close will be rejected. The Exchange proposes to add this definition to its rules as new Section 1(e)(10). The Exchange also proposes to refer to All-or-None Orders in Section 6(a)(2) of its rules. Many options markets currently have all-or-none orders, and the definition of this new order type is consistent with the definitions contained in other exchanges' rules.[4]

The new All-or-None Order type is similar to the existing Minimum Quantity Order currently available on the Exchange. Minimum Quantity Orders are orders that require that a specified minimum quantity of contracts be obtained, or the order is cancelled.[5] Similar to the All-or-None Orders proposed herein, Minimum Quantity Orders may only be entered with a time-in-force designation of Immediate or Cancel. Today, a Minimum Quantity Order with the minimum set at the full size of the order would function the same as the proposed All-or-None Order.[6]

In addition, the Immediate or Cancel designation is currently only available to limit orders. The Exchange proposes to amend the definition of Immediate or Cancel in Section 1(g)(2) to delete the word “limit” in order to cover market orders; accordingly, market orders, including the proposed new All-or-None Orders, can now be Immediate or Cancel.[7]

2. Statutory Basis

The Exchange believes that its proposal is consistent with Section 6(b) of the Act [8] in general, and furthers the objectives of Section 6(b)(5) of the Act [9] 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 facilitating transactions in securities, and to remove impediments to and perfect the mechanisms of a free and open market and a national market system, and, in general, to protect investors and the public interest, by mitigating risks to market participants. The Exchange believes that the proposal is appropriate and reasonable, because it offers an additional order type on NOM and Immediate or Cancel functionality for market orders. The Exchange believes that this should offer investors new trading opportunities on the Exchange and enhance the Exchange's competitive position.

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.

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 Start Printed Page 46870the 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 19(b)(3)(A) of the Act [10] and Rule 19b-4(f)(6) [11] thereunder.

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 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

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-2011-098. 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 (​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 a.m. and 3 p.m. Copies of such 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-2011-098 and should be submitted on or before August 24, 2011.

Start Signature

For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.[12]

Elizabeth M. Murphy,


End Signature End Preamble


1.  15 U.S.C.78s(b)(1).

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3.  See NOM Rules, Chapter VI, Section 1(g)(2).

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4.  See e.g., CBOE Rule 6.53(i); C2 Rule 6.10(c)(1) and ISE Rule 715(c).

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5.  See NOM Rules, Chapter VI, Section 1(e)(3).

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6.  A Minimum Quantity Order for 100 contracts with the minimum set at 100 contracts has the same result as an All-or-None Order for 100 contracts, because both can only trade against an order for 100 contracts.

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7.  See NOM Rules, Chapter VI, proposed Section 1(g)(2).

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11.  17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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. NASDAQ has satisfied this requirement.

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[FR Doc. 2011-19612 Filed 8-2-11; 8:45 am]