FR 2024-29044

Summary of the Proposed Rule Change

The document details a proposed rule change by Nasdaq BX, Inc., submitted to the Securities and Exchange Commission (SEC), regarding updates to Rule 4759. This modification focuses on the data feeds that Nasdaq BX uses for processing orders. Specifically, the change introduces a direct feed from the Long-Term Stock Exchange (LTSE) as the primary source of market data, with the existing Consolidated Quotation System/Unlisted Trading Privileges (CQS/UQDF) as a secondary, backup option. The SEC has approved the proposal for immediate implementation, indicating that the change poses no significant risks to investors or the public interest and does not impose a notable competitive burden.

Significant Issues and Concerns

There are several points of interest and potential concern within this document:

1. Financial Implications: The document does not discuss any potential financial costs or savings associated with the rule change. Stakeholders might wonder if there are any fees or operational costs related to adopting a new primary data feed.

2. Choice of LTSE as Primary Feed: While the rule change designates LTSE as the primary source for market data, the document does not provide a rationale for selecting LTSE over other providers. This may lead to questions about whether this choice could inadvertently benefit LTSE more than it might other potential vendors.

3. Complex Regulatory References: The document uses regulatory terminology and references to sections of the Securities Exchange Act and associated rules. This could be confusing for readers not familiar with financial regulations, potentially limiting their understanding of the significance and implications of the rule change.

Impact on the Public and Specific Stakeholders

• General Public and Investors: For the general public, specifically retail investors, the adoption of a new primary data source might improve the accuracy and reliability of market data, which could facilitate more informed trading decisions. However, the lack of detailed explanation might undermine public trust in the transparency of the exchange’s processes.

• Market Participants and Exchanges: The move to adopt LTSE’s feed could set a precedent for other exchanges to consider diverse data sources, potentially increasing competition among data providers. Nonetheless, stakeholders might be concerned about the fairness of designating LTSE as a primary feed without a well-detailed comparative analysis of available options.

• Nasdaq BX and LTSE: For Nasdaq BX, the change could improve the efficiency and accuracy of its operations, which in turn can enhance its competitive edge. LTSE stands to benefit significantly from being selected as a primary data source, potentially increasing its visibility and credibility within the market.

Conclusion

The document outlines a seemingly technical yet important change to Nasdaq BX’s operational processes. While the proposed update may enhance order processing and market data accuracy, it raises questions regarding financial implications, the process of selecting data feed providers, and the complexity of regulatory descriptions. Stakeholders, particularly market participants, may need additional information to fully assess the impacts and implications of these changes. Overall, the changes aim to bolster transparency and operational effectiveness without disrupting market dynamics or imposing undue burdens.