In connection with the industry-led initiative to shorten the settlement cycle for transaction in U.S. equities, corporate and municipal bonds, unit investment trusts and related financial instruments from trade date plus three business days (T+3) to trade date plus two business days (T+2), Nasdaq, Inc. has preliminarily identified the rules on The Nasdaq Stock Market (Nasdaq) and Nasdaq BX (BX) that establish or reference a T+3 settlement cycle and would need amendment to reflect a T+2 settlement cycle. The following rules are impacted by this upcoming change:

• Nasdaq and BX Rule 2830. Investment Company Securities (incorporated by reference from NASD Rule 2830).
• Nasdaq and BX Rule 11210(c) and (d). Sent by Each Party.
• Nasdaq and BX Rule 11320(b) and (c). Dates of Delivery.
• Nasdaq and BX Rule 11140(b)(1). Transactions in Securities "Ex=Dividend,""Ex-Rights" or "Ex-Warrants."
• Nasdaq and BX Rules 11150(a). Transactions "Ex-Interest" in Bonds Which are Dealt in "Flat".
• Nasdaq and BX Rule 11620. Computation of Interest.
• Nasdaq BX Rule 11820. Buy-In.

In addition, Nasdaq is aware that certain other rules, while not directly referencing a fixed settlement cycle, may be impacted by the change to T+2 settlement and that certain industry and exchange processes may be affected by a shortened settlement cycle.

Nasdaq is requesting industry feedback on the following questions:

1. Is the list of rules requiring amendment complete and accurate? Are there other Nasdaq rules that should be amended?

2. Will the proposed rules have an effect on conduct that is required for compliance with other Nasdaq rules?

3. With respect to Ex-dividend dates rulings, Nasdaq intend to modify Rule 11140(b)(1) to provide that the "ex-dividend date," which is the date on which a security is traded without the right to receive a dividend or distribution that has been declared by the company generally will be the first business day before the record date.

a. Are there process or procedure changes that would assist market participants and listed companies in complying with this requirement?

b. Are there ways Nasdaq can assist participants in preparing for these changes?

4. Are there other processes or procedures established by Nasdaq's exchanges that should be modified to assist the industry in complying with T+2 settlement cycle?

Nasdaq anticipates filing rule amendments to accommodate the new T+2 settlement cycle in the first half of 2016 and anticipates implementing T+2 settlement in conjunction with the industry in the third quarter of 2017.

Nasdaq encourages interested parties to comment on this equity trader alert prior to June 8, 2016.

Please email comments to Nasdaq MarketWatch.

Questions regarding this notice should be directed to Nasdaq MarketWatch at 1-800-537-3929.

Please refer to Nasdaq and BX Rules to Change which sets forth a list of the rules and affected rule test that will require amendment. Each Exchange will file rule changes in support of this change.

Additionally, PHLX intends to amend its Rule book and delete Rules 823, 825, and 831. These rules, while referencing T+3 settlement, do not apply to PSX, PHLX's cash equities trading platform.