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Tuesday, April 5, 2011

Equity Trader Alert #2011 - 23
NASDAQ Provides Guidance on Closing Cross for Friday, April 29, 2011, in Advance of Special Rebalance of the NASDAQ-100 Index

Markets Impacted:

Contact Information:

What you need to know:

  • NASDAQ OMX® has announced that the NASDAQ-100 Index® (NASDAQ: NDX) will undergo a Special Rebalance effective prior to market open on Monday, May 2, 2011,* to bring the weights of the Index Securities closer in line with their actual market capitalizations.
  • The NASDAQ-100 Special Rebalance will result in a market event on Friday, April 29, 2011 similar to the annual Russell Reconstitution.
    • NASDAQ OMX Global Index Group will use the NASDAQ Official Closing Price as determined by the NASDAQ Closing Cross® on Friday, April 29, 2011, for the Special Rebalance on May 2nd.
  • There will be no system changes during the Closing Cross on April 29th; the Closing Cross will follow the standard timeline.
  • Updated: Although NASDAQ® is highly confident that its systems will provide the reliability and capacity required to determine the Special Rebalance closing prices smoothly and successfully, NASDAQ has published contingency scenarios in order to prepare the industry for unusual market conditions.
  • Updated - Call Details Provided: On Friday, April 29, 2011, NASDAQ will hold a market-wide call beginning at 3:00 p.m., ET, and lasting approximately two hours. The call details are:
    • Dial In: +1 866 765 5864
    • Conference ID: 60434203
    • Leader: David Lawn

What has been announced?

The NASDAQ-100 Index will undergo a Special Rebalance effective prior to market open on Monday, May 2, 2011, to bring the weights of the Index Securities closer in line with their actual market capitalizations.

What impact will the NASDAQ-100 Special Rebalance have on trading?

The NASDAQ-100 Special Rebalance will result in a market event on Friday, April 29, 2011, similar to the annual Russell Reconstitution. The NASDAQ OMX Global Index Group will use the NASDAQ Official Closing Price as determined by the NASDAQ Closing Cross on Friday, April 29, 2011, for the Special Rebalance on May 2nd.

The Cross enables market participants to execute market-on-close and limit-on-close interest and provides unparalleled transparency.

Will there be any system changes for the Closing Cross on Friday, April 29th?

No, NASDAQ will not be changing any system cut-off times or threshold percentages for the Closing Cross.

As a reminder the current Closing Cross timeline is:

Eastern Time (ET)

7:00 a.m. NASDAQ begins accepting On-Close and Imbalance-Only orders.
3:50 p.m.
  • NASDAQ stops accepting entry, cancellation or modification of On-Close orders.
  • Imbalance-Only orders may be entered but not canceled.
  • Dissemination of closing information begins.
4:00 p.m. Closing process begins

Will NASDAQ OMX provide additional information on the NASDAQ-100 Special Rebalance?

NASDAQ OMX hosted a conference call to provide details on the NASDAQ-100 Special Rebalance on Tuesday, April 5, 2011, at 4:15 p.m. Eastern Time (ET) .

A replay of the call is available through May 5th. To access the replay, call +1 800 642 1687 or +1 706 645 9291, and enter the following numeric Conference ID code when asked: 55975298.

Will there be a market-wide call during the Closing Cross on Friday, April 29, 2011?

Yes, NASDAQ will hold an open market-wide call on Friday, April 29, 2011, beginning at 3:00 p.m., ET, and lasting approximately two hours. Updated: The call details are:

  • Dial In: +1 866 765 5864
  • Conference ID: 60434203
  • Leader: David Lawn

Where can I find more information?

*The Special Rebalance of the NASDAQ-100 Index will be enacted based on Index Securities and shares outstanding as of March 31, 2011, except for Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), which became a component of the Index on April 4, 2011.

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