Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a Policy Relating to Its Treatment of Trade Reports That It Determines To Be Inconsistent With the Prevailing Market, 6183-6186 [E9-2428]
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Federal Register / Vol. 74, No. 23 / Thursday, February 5, 2009 / Notices
Applicant’s Address: One Post Office
Sq., Boston, MA 02109.
Realty Funds, Inc.
[File No. 811–22052]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On July 31, 2008,
applicant made a liquidating
distribution to its shareholders, based
on net asset value. Expenses of $18,200
incurred in connection with the
liquidation were paid by XShares
Advisors LLC, applicant’s investment
adviser.
Filing Date: The application was filed
on December 10, 2008.
Applicant’s Address: 420 Lexington
Ave., Suite 2550, New York, NY 10170.
Metropolitan Series Fund II
[File No. 811–21420]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On June 20, 2008,
applicant made a liquidating
distribution of its shareholders, based
on net asset value. Applicant’s
investment adviser, MetLife Advisers,
LLC, has agreed to pay the expenses
incurred in connection with the
liquidation.
Filing Date: The application was filed
on December 10, 2008.
Applicant’s Address: 501 Boylston
St., Boston, MA 02116.
declaring that it has ceased to be an
investment company. On December 30,
2008, applicant made a liquidating
distribution to its shareholders, based
on net asset value. Expenses of
approximately $7,500 incurred in
connection with the liquidation were
paid by Black Creek FOF Advisor LLC,
applicant’s investment adviser.
Filing Date: The application was filed
on December 31, 2008.
Applicant’s Address: 518 17th St.,
17th Floor, Denver, CO 80202.
Bear Stearns Active ETF Trust
[File No. 811–22038]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. On December 4,
2008, applicant made a final liquidating
distribution to its shareholders, based
on net asset value. Expenses of $85,000
incurred in connection with the
liquidation were paid by Bear Stearns
Asset Management, Inc., applicant’s
investment adviser. Applicant also may
incur a tax liability of $2,000, which
Bear Stearns Asset Management, Inc.
has agreed to pay.
Filing Date: The application was filed
on December 23, 2008.
Applicant’s Address: 237 Park Ave.,
New York, NY 10017.
The American Heritage Fund, Inc.
[File No. 811–601]
BlackRock Senior Income Trust
American Heritage Growth Fund, Inc.
[File No. 811–9239]
[File No. 811–8386]
BlackRock New Jersey Strategic
Municipal Trust
[File No. 811–9415]
BlackRock Floating Rate and Inflation
Protected Securities Trust
[File No. 811–21602]
BlackRock Global Plus Investment
Trust
[File No. 811–21646]
rwilkins on PROD1PC63 with NOTICES
Summary: Each applicant, a closedend investment company, seeks an
order declaring that it has ceased to be
an investment company. Applicants
have never made a public offering of
their securities and do not propose to
make a public offering or engage in
business of any kind.
Filing Date: The applications were
filed on January 7, 2009.
Applicants’ Address: 100 Bellevue
Parkway, Wilmington, DE 19809.
Dividend Capital Global Real Estate
Fund of Funds, L.P.
[File No. 811–22074]
Summary: Applicant, a closed-end
investment company, seeks an order
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16:34 Feb 04, 2009
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Summary: Each applicant seeks an
order declaring that it has ceased to be
an investment company. On December
4, 2008, each applicant made a final
liquidating distribution to its
shareholders, based on net asset value.
Expenses of $24,081 and $11,124,
respectively, incurred in connection
with the liquidations were paid by each
applicant.
Filing Dates: The applications were
filed on September 11, 2008, and
amended on January 16, 2009.
Applicants’ Address: 370 Lexington
Ave., 27th Floor, New York, NY 10017.
Eaton Vance Tax-Managed
International Diversified Equity Income
Fund
[File No. 811–22028]
Eaton Vance Credit Opportunities Fund
II
[File No. 811–22109]
Summary: Each applicant, a closedend investment company, seeks an
order declaring that it has ceased to be
an investment company. Applicants
have never made a public offering of
their securities and do not propose to
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Fmt 4703
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6183
make a public offering or engage in
business of any kind.
Filing Date: The applications were
filed on November 19, 2008.
Applicants’ Address: The Eaton
Vance Building, 255 State St., Boston,
MA 02109.
Separate Account VL A/IA
[File No. 811–09046]
Summary: Applicant seeks an order
declaring that it has ceased to be an
investment company. Applicant
requests deregistration based on
abandonment of registration. Applicant
is not now engaged, or intending to
engage, in any business activities other
than those necessary for winding up its
affairs.
Filing Dates: The application was
filed on November 20, 2008, and
amended on January 16, 2009.
Applicant’s Address: 4333 Edgewood
Road NE, Cedar Rapids, IA 52499–0001.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–2430 Filed 2–4–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59323; File No. SR–BX–
2009–002]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Adopt a
Policy Relating to Its Treatment of
Trade Reports That It Determines To
Be Inconsistent With the Prevailing
Market
January 30, 2009.
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 January
14, 2009, NASDAQ OMX BX, Inc. (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated this proposal as eligible for
immediate effectiveness pursuant to
Exchange Act Rule 19b–4(f)(6). The
Commission is publishing this notice
and order to solicit comments on the
1 15
2 17
E:\FR\FM\05FEN1.SGM
U.S.C. 78s(b)(1).
CFR 240.19b–4.
05FEN1
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Federal Register / Vol. 74, No. 23 / Thursday, February 5, 2009 / Notices
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to adopt a
policy relating to its treatment of trade
reports that it determines to be
inconsistent with the prevailing market
and for this policy to be in effect
concurrent with the launch of cash
equities trading by NASDAQ OMX BX,
Inc. The Exchange does not expect that
the proposed rule change will have any
direct effect, or significant indirect
effect, on any other Exchange rule in
effect at the time of this filing.
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. The text of
these statements may be examined at
the places specified in Item III below,
and is set forth in Sections A, B, and C
below.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
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Trades in listed securities
occasionally occur at prices that deviate
from prevailing market prices and those
trades sometimes establish a high, low
or last sale price for a security that does
not reflect the true market for the
security. This filing, which is
substantially similar to the New York
Stock Exchange’s (‘‘NYSE’’) and The
NASDAQ Stock Market LLC’s
(‘‘Nasdaq’’) recent filings, seek to
address such instances of ‘‘aberrant’’
trades.3
The Exchange proposes that its policy
in this regard shall be to contact the
listing exchange (if the Exchange is not
the listing exchange) and other markets
(in the case of executions that take place
across multiple markets) to determine if
any erroneous trade reports were filed.
If not, or in the case of non-unlisted
trading privilege trades, if the Exchange
3 See Securities Exchange Act Release No. 58736
(October 6, 2008), 73 FR 60380 (October 10, 2008)
(SR–NYSE–2008–91). See Securities Exchange Act
Release No. 59151 (December 23, 2008), 74 FR 158
(January 2, 2009) (SR–NASDAQ–2008–100). The
Exchange notes that these proposed policies
relating to the Exchange’s treatment of trade reports
that it determines to be inconsistent with the
prevailing market are substantially similar to the
NYSE’s and Nasdaq’s proposed policies.
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16:34 Feb 04, 2009
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determines the trade price is
inconsistent with the prevailing market
for the security after considering the
factors outlined herein, the Exchange
may make the determination to append
an indicator (an ‘‘Aberrant Report
Indicator’’) to the trade.
The Exchange will not initially list
stocks on its own market, but will trade
on an unlisted trading privilege (‘‘UTP’’)
basis securities listed on other markets.
Nasdaq operates the securities
information processor (‘‘SIP’’), which
processes trade and quote information
for the Nasdaq UTP Plan (‘‘Nasdaq
SIP’’). The Securities Industry
Automation Corporation (‘‘SIAC’’)
serves as the securities information
processor for the CTA Plan and
processes trade and quote information.
The Nasdaq SIP and the Consolidated
Tape Association (‘‘CTA’’) offer each
participant in the Nasdaq SIP and CTA
Plan the discretion to append to the
Aberrant Report Indicator to a trade
report to indicate that the market
believes that the trade price in a trade
executed on that market does not
accurately reflect the prevailing market
for the security.4
During the course of surveillance by
the Exchange or as a result of
notification by another market, listed
company or market participant, the
Exchange may become aware of trade
prices that do not accurately reflect the
prevailing market for a security. In such
a case, the Exchange proposes to adopt
as policies that it:
i. May determine to append an
Aberrant Report Indicator to any trade
report with respect to any trade
executed on the Exchange that the
Exchange determines to be inconsistent
with the prevailing market; and
ii. Shall discourage vendors and other
data recipients from using prices to
which the Exchange has appended the
Aberrant Report Indicator in any
calculation of the high, low or last sale
price of a security.
The Exchange will urge vendors to
disclose the exclusion from high, low or
last sale price data of any trades with an
Aberrant Report Indicator and exclude
them from high, low or last sale price
information they disseminate and to
provide to data users an explanation of
the parameters used in the Exchange’s
aberrant trade policy.
While SIAC, on behalf of the CTA
Plan, and the Nasdaq SIP, on behalf of
the Nasdaq UTP Plan, disseminate their
own calculations of high, low and last
4 The CTA recommends that data recipients
should exclude the price of any trade to which the
Aberrant Report Indicator has been appended from
any calculation of the high, low and last sale prices
for the security.
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sale prices, vendors and other data
recipients—and not the Exchange—
frequently determine their own
methodology by which they wish to
calculate high, low and last sale prices.
Therefore, the Exchange shall endeavor
to explain to those vendors and other
data recipients the deleterious effects
that can result from including in the
calculations a trade to which the
Aberrant Report Indicator has been
appended.
In making the determination to
append the Aberrant Report Indicator,
the Exchange shall consider all factors
related to a trade, including, but not
limited to, the following:
• Material news released for the
security;
• Suspicious trading activity;
• System malfunctions or
disruptions;
• Locked or crossed markets;
• A recent trading halt or resumption
of trading in the security;
• Whether the security is in its initial
public offering;
• Volume and volatility for the
security;
• Whether the trade price represents
a 52-week high or low for the security;
• Whether the trade price deviates
significantly from recent trading
patterns in the security;
• Whether the trade price reflects a
stock-split, reorganization or other
corporate action;
• The validity of consolidated tape
trades and quotes in comparison to
national best bids and offers; and
• The general volatility of market
conditions.
In determining whether trade prices
are inconsistent with the prevailing
market, the Exchange proposes that its
policy shall be to follow the following
general guidelines: The Exchange will
review whether a trade price does not
reflect the prevailing market for a
security if the trade occurs during
regular trading hours (i.e., 9:30 a.m. to
4 p.m.) and occurs at a price that
deviates from the ‘‘Reference Price’’ by
an amount that meets or exceeds the
following thresholds:
Trade price
Between $0 and $15.00 ...........
Between $15.01 and $50.00 ....
In excess of $50.00 ..................
Numerical
threshold
(percent)
7
5
3
The ‘‘Reference Price’’ refers to (a) if
the primary market for the security is
open at the time of the trade, the
national best bid or offer for the
security, or (b) if the primary market for
the security is not open at the time of
E:\FR\FM\05FEN1.SGM
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Federal Register / Vol. 74, No. 23 / Thursday, February 5, 2009 / Notices
rwilkins on PROD1PC63 with NOTICES
the trade, the first executable quote or
print for the security on the primary
market after execution of the trade in
question. However, if the circumstances
suggest that a different Reference Price
would be more appropriate, the
Exchange will use the different
Reference Price. For instance, if the
national best bid and offer for the
security are so wide apart as to fail to
reflect the market for the security, the
Exchange might use as the Reference
Price a trade price or best bid or offer
that was available prior to the trade in
question.
If the Exchange determines that a
trade price does not reflect the
prevailing market for a security and the
trade represented the last sale of the
security on the Exchange during a
trading session, the Exchange may also
determine to remove that trade’s
designation as the last sale and the
preceding last sale eligible trade would
become the new last sale. The Exchange
may do so either on the day of the trade
or at a later date, so as to provide
reasonable time for the Exchange to
conduct due diligence regarding the
trade, including the consideration of
input from markets and other market
participants.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with Section 6(b)
of the Act,5 in general, and Section
6(b)(5) of the Act,6 in particular, in that
it is designed to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in regulating, clearing,
settling, processing information with
respect to, and facilitating transactions
in securities, 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.
In particular, the Aberrant Report
Indicator is consistent with the
protection of investors and the public
interest in that the Exchange will seek
to ensure a proper understanding of the
Aberrant Report Indicator among
securities market participants by: (i)
Urging vendors to disclose the exclusion
from high, low or last sale price data of
any aberrant trades excluded from high,
low or last sale price information they
disseminate and to provide to data users
an explanation of the parameters used
in the Exchange’s aberrant trade policy;
(ii) if the Exchange determines to list
securities in the future, informing the
affected listed company each time the
5 15
6 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
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16:34 Feb 04, 2009
Jkt 217001
Exchange or another market appends
the Aberrant Report Indicator to a trade
in an Exchange-listed stock; and (iii)
reminding the users of the information
that these are still valid trades in that
they were executed and not unwound as
in the case of a clearly erroneous trade.
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 that is 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
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A) of the
Act 7 and Rule 19b–4(f)(6) thereunder,8
the Exchange has designated this
proposal as one that effects a change
that: (A) Does not significantly affect the
protection of investors or the public
interest; (B) does not impose any
significant burden on competition; and
(C) by its terms, does not become
operative for 30 days after the date of
the filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest.
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative for 30 days after the date of
filing.9 However, Rule 19b–4(f)(6)(iii) 10
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
requested that the Commission waive
the 30-day operative delay and
designate the proposed rule change to
become operative upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because the proposal is substantially
similar to a proposal previously
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
9 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) 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. The Exchange has
satisfied this requirement.
10 Id.
6185
approved by the Commission.11 The
Commission believes that the
Exchange’s proposal to append an
Aberrant Report Indicator to certain
trade reports is a reasonable means to
alert investors and others that the
Exchange believes that the trade price
for a trade executed in its market does
not accurately reflect the prevailing
market for the security. In addition, the
Commission notes that the Exchange
will use objective numerical thresholds
in determining whether a trade report is
eligible to have an Aberrant Trade
Indicator appended to it. The
Commission further notes that the
Exchange’s appending the Aberrant
Trade Indicator to a trade report has no
effect on the validity of the underlying
trade. Finally, waiving the 30-day
operative delay will allow the Exchange
to apply the proposed change to
aberrant trades immediately.12 Based on
the above, the Commission designates
the proposal to become operative upon
filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
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 the furtherance of the
purposes of the Act.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–BX–2009–002 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
8 17
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11 See Securities Exchange Act Release No. 58736
(October 6, 2008), 73 FR 60380 (October 10, 2008)
(SR–NYSE–2008–91). See also Securities Exchange
Act Release No. 59151 (December 23, 2008), 74 FR
158 (January 2, 2009) (SR–NASDAQ–2008–100).
12 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
impact of the proposed rule on efficiency,
competition, and capital formation. 15 U.S.C. 78c(f).
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Federal Register / Vol. 74, No. 23 / Thursday, February 5, 2009 / Notices
All submissions should refer to File
Number SR–BX–2009–002. 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 (https://www.sec.gov/
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 inspection and copying in
the Commission’s Public Reference
Room 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–BX–
2009–002 and should be submitted on
or before February 26, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–2428 Filed 2–4–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59318; File No. SR–
NASDAQ–2009–003]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Modify
Nasdaq’s Listing Requirements
Related to the Distribution of Annual
Reports
rwilkins on PROD1PC63 with NOTICES
January 29, 2009.
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 January
15, 2009, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by Nasdaq. Nasdaq has designated the
proposed rule change as effecting a
change described under Rule 19b–4(f)(6)
under the Act,3 which renders the
proposal effective upon filing with the
Commission. 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 proposes to modify Rules
4350(b)(1)(A) and 4360(b)(1), which
relate to the distribution of a listed
issuer’s annual report.
The text of the proposed rule change
is below. Proposed new language is
italicized; proposed deletions are in
brackets.4
4350. Qualitative Listing Requirements
for Nasdaq Issuers Except for Limited
Partnerships
(a) No change.
(b) Distribution of Annual and Interim
Reports
(1)(A) Each issuer shall make
available to shareholders of such
securities an annual report containing
audited financial statements of the
company and its subsidiaries, which, for
example, may be on Form 10–K, 20–F,
40–F or N–CSR. An issuer may comply
with this requirement either:
(i) By mailing the report to
shareholders[,]; or
(ii) By satisfying the requirements for
furnishing an annual report contained
in Exchange Act Rule 14a–16; or
(iii) by posting the annual report to
shareholders on or through the
company’s Web site (or, in the case of
an issuer that is an investment company
that does not maintain its own Web site,
on a website that the issuer is allowed
to use to satisfy the Web site posting
requirement in Exchange Act Rule 16a–
3(k)), along with a prominent
undertaking in the English language to
provide shareholders, upon request, a
hard copy of the company’s annual
report free of charge. An issuer that
chooses to satisfy this requirement [via
a Web site posting] pursuant to this
paragraph (iii) must, simultaneous with
this posting, issue a press release stating
that its annual report has been filed
3 17
CFR 240.19b–4(f)(6).
are marked to the rule text that appears
in the electronic manual of Nasdaq found at
https://nasdaqomx.cchwallstreet.com.
13 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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16:34 Feb 04, 2009
4 Changes
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with the Commission (or other
appropriate regulatory authority). This
press release must also state that the
annual report is available on the
company’s Web site and include the
Web site address and that shareholders
may receive a hard copy free of charge
upon request. An issuer must provide
such hard copies within a reasonable
period of time following the request.
(B) No change.
(2)–(4) No change.
(c)–(n) No change.
*
*
*
*
*
4360. Qualitative Listing Requirements
for Nasdaq Issuers That Are Limited
Partnerships
(a) No change.
(b) Distribution of Annual and Interim
Reports
(1) Each issuer that is a limited
partnership shall distribute to limited
partners copies of an annual report
containing audited financial statements
of the limited partnership. The report
shall be distributed to limited partners
within a reasonable period of time after
the end of the limited partnership’s
fiscal year end and shall be filed with
Nasdaq at the time it is distributed to
limited partners. A limited partnership
may comply with this requirement
either:
(A) By mailing the report to the
limited partners; or
(B) By satisfying the requirements for
furnishing an annual report contained
in Exchange Act Rule 14a–16; or
(C) By posting the annual report on or
through the limited partnership’s Web
site, along with a prominent
undertaking in the English language to
provide limited partners, upon request,
a hard copy of the partnership’s annual
report free of charge. A limited
partnership that chooses to satisfy this
requirement pursuant to this paragraph
(C) must, simultaneous with this
posting, issue a press release stating that
its annual report has been filed with the
Commission (or other appropriate
regulatory authority). This press release
must also state that the annual report is
available on the limited partnership’s
Web site and include the Web site
address and that limited partners may
receive a hard copy free of charge upon
request. A limited partnership must
provide such hard copies within a
reasonable period of time following the
request.
(2) No change.
(c)–(m) No change.
*
*
*
*
*
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05FEN1
]]>Agencies
[Federal Register Volume 74, Number 23 (Thursday, February 5, 2009)]
[Notices]
[Pages 6183-6186]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-2428]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59323; File No. SR-BX-2009-002]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Adopt a
Policy Relating to Its Treatment of Trade Reports That It Determines To
Be Inconsistent With the Prevailing Market
January 30, 2009.
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 January 14, 2009, NASDAQ OMX BX, Inc. (the ``Exchange'') filed with
the Securities and Exchange Commission (``Commission'') the proposed
rule change as described in Items I and II below, which Items have been
prepared by the Exchange. The Exchange has designated this proposal as
eligible for immediate effectiveness pursuant to Exchange Act Rule 19b-
4(f)(6). The Commission is publishing this notice and order to solicit
comments on the
[[Page 6184]]
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt a policy relating to its treatment
of trade reports that it determines to be inconsistent with the
prevailing market and for this policy to be in effect concurrent with
the launch of cash equities trading by NASDAQ OMX BX, Inc. The Exchange
does not expect that the proposed rule change will have any direct
effect, or significant indirect effect, on any other Exchange rule in
effect at the time of this filing.
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. The
text of these statements may be examined at the places specified in
Item III below, and is set forth in Sections A, B, and C below.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Trades in listed securities occasionally occur at prices that
deviate from prevailing market prices and those trades sometimes
establish a high, low or last sale price for a security that does not
reflect the true market for the security. This filing, which is
substantially similar to the New York Stock Exchange's (``NYSE'') and
The NASDAQ Stock Market LLC's (``Nasdaq'') recent filings, seek to
address such instances of ``aberrant'' trades.\3\
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\3\ See Securities Exchange Act Release No. 58736 (October 6,
2008), 73 FR 60380 (October 10, 2008) (SR-NYSE-2008-91). See
Securities Exchange Act Release No. 59151 (December 23, 2008), 74 FR
158 (January 2, 2009) (SR-NASDAQ-2008-100). The Exchange notes that
these proposed policies relating to the Exchange's treatment of
trade reports that it determines to be inconsistent with the
prevailing market are substantially similar to the NYSE's and
Nasdaq's proposed policies.
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The Exchange proposes that its policy in this regard shall be to
contact the listing exchange (if the Exchange is not the listing
exchange) and other markets (in the case of executions that take place
across multiple markets) to determine if any erroneous trade reports
were filed. If not, or in the case of non-unlisted trading privilege
trades, if the Exchange determines the trade price is inconsistent with
the prevailing market for the security after considering the factors
outlined herein, the Exchange may make the determination to append an
indicator (an ``Aberrant Report Indicator'') to the trade.
The Exchange will not initially list stocks on its own market, but
will trade on an unlisted trading privilege (``UTP'') basis securities
listed on other markets. Nasdaq operates the securities information
processor (``SIP''), which processes trade and quote information for
the Nasdaq UTP Plan (``Nasdaq SIP''). The Securities Industry
Automation Corporation (``SIAC'') serves as the securities information
processor for the CTA Plan and processes trade and quote information.
The Nasdaq SIP and the Consolidated Tape Association (``CTA'') offer
each participant in the Nasdaq SIP and CTA Plan the discretion to
append to the Aberrant Report Indicator to a trade report to indicate
that the market believes that the trade price in a trade executed on
that market does not accurately reflect the prevailing market for the
security.\4\
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\4\ The CTA recommends that data recipients should exclude the
price of any trade to which the Aberrant Report Indicator has been
appended from any calculation of the high, low and last sale prices
for the security.
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During the course of surveillance by the Exchange or as a result of
notification by another market, listed company or market participant,
the Exchange may become aware of trade prices that do not accurately
reflect the prevailing market for a security. In such a case, the
Exchange proposes to adopt as policies that it:
i. May determine to append an Aberrant Report Indicator to any
trade report with respect to any trade executed on the Exchange that
the Exchange determines to be inconsistent with the prevailing market;
and
ii. Shall discourage vendors and other data recipients from using
prices to which the Exchange has appended the Aberrant Report Indicator
in any calculation of the high, low or last sale price of a security.
The Exchange will urge vendors to disclose the exclusion from high,
low or last sale price data of any trades with an Aberrant Report
Indicator and exclude them from high, low or last sale price
information they disseminate and to provide to data users an
explanation of the parameters used in the Exchange's aberrant trade
policy.
While SIAC, on behalf of the CTA Plan, and the Nasdaq SIP, on
behalf of the Nasdaq UTP Plan, disseminate their own calculations of
high, low and last sale prices, vendors and other data recipients--and
not the Exchange--frequently determine their own methodology by which
they wish to calculate high, low and last sale prices. Therefore, the
Exchange shall endeavor to explain to those vendors and other data
recipients the deleterious effects that can result from including in
the calculations a trade to which the Aberrant Report Indicator has
been appended.
In making the determination to append the Aberrant Report
Indicator, the Exchange shall consider all factors related to a trade,
including, but not limited to, the following:
Material news released for the security;
Suspicious trading activity;
System malfunctions or disruptions;
Locked or crossed markets;
A recent trading halt or resumption of trading in the
security;
Whether the security is in its initial public offering;
Volume and volatility for the security;
Whether the trade price represents a 52-week high or low
for the security;
Whether the trade price deviates significantly from recent
trading patterns in the security;
Whether the trade price reflects a stock-split,
reorganization or other corporate action;
The validity of consolidated tape trades and quotes in
comparison to national best bids and offers; and
The general volatility of market conditions.
In determining whether trade prices are inconsistent with the
prevailing market, the Exchange proposes that its policy shall be to
follow the following general guidelines: The Exchange will review
whether a trade price does not reflect the prevailing market for a
security if the trade occurs during regular trading hours (i.e., 9:30
a.m. to 4 p.m.) and occurs at a price that deviates from the
``Reference Price'' by an amount that meets or exceeds the following
thresholds:
------------------------------------------------------------------------
Numerical
Trade price threshold
(percent)
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Between $0 and $15.00...................................... 7
Between $15.01 and $50.00.................................. 5
In excess of $50.00........................................ 3
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The ``Reference Price'' refers to (a) if the primary market for the
security is open at the time of the trade, the national best bid or
offer for the security, or (b) if the primary market for the security
is not open at the time of
[[Page 6185]]
the trade, the first executable quote or print for the security on the
primary market after execution of the trade in question. However, if
the circumstances suggest that a different Reference Price would be
more appropriate, the Exchange will use the different Reference Price.
For instance, if the national best bid and offer for the security are
so wide apart as to fail to reflect the market for the security, the
Exchange might use as the Reference Price a trade price or best bid or
offer that was available prior to the trade in question.
If the Exchange determines that a trade price does not reflect the
prevailing market for a security and the trade represented the last
sale of the security on the Exchange during a trading session, the
Exchange may also determine to remove that trade's designation as the
last sale and the preceding last sale eligible trade would become the
new last sale. The Exchange may do so either on the day of the trade or
at a later date, so as to provide reasonable time for the Exchange to
conduct due diligence regarding the trade, including the consideration
of input from markets and other market participants.
2. Statutory Basis
The Exchange believes that the proposal is consistent with Section
6(b) of the Act,\5\ in general, and Section 6(b)(5) of the Act,\6\ in
particular, in that it is designed to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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In particular, the Aberrant Report Indicator is consistent with the
protection of investors and the public interest in that the Exchange
will seek to ensure a proper understanding of the Aberrant Report
Indicator among securities market participants by: (i) Urging vendors
to disclose the exclusion from high, low or last sale price data of any
aberrant trades excluded from high, low or last sale price information
they disseminate and to provide to data users an explanation of the
parameters used in the Exchange's aberrant trade policy; (ii) if the
Exchange determines to list securities in the future, informing the
affected listed company each time the Exchange or another market
appends the Aberrant Report Indicator to a trade in an Exchange-listed
stock; and (iii) reminding the users of the information that these are
still valid trades in that they were executed and not unwound as in the
case of a clearly erroneous trade.
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 that is 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
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(6)
thereunder,\8\ the Exchange has designated this proposal as one that
effects a change that: (A) Does not significantly affect the protection
of investors or the public interest; (B) does not impose any
significant burden on competition; and (C) by its terms, does not
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate if consistent with the
protection of investors and the public interest.
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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative for 30 days after the date of filing.\9\ However, Rule
19b-4(f)(6)(iii) \10\ 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 requested that the Commission
waive the 30-day operative delay and designate the proposed rule change
to become operative upon filing.
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\9\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) 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. The Exchange has satisfied this requirement.
\10\ Id.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because the proposal is substantially similar to a proposal previously
approved by the Commission.\11\ The Commission believes that the
Exchange's proposal to append an Aberrant Report Indicator to certain
trade reports is a reasonable means to alert investors and others that
the Exchange believes that the trade price for a trade executed in its
market does not accurately reflect the prevailing market for the
security. In addition, the Commission notes that the Exchange will use
objective numerical thresholds in determining whether a trade report is
eligible to have an Aberrant Trade Indicator appended to it. The
Commission further notes that the Exchange's appending the Aberrant
Trade Indicator to a trade report has no effect on the validity of the
underlying trade. Finally, waiving the 30-day operative delay will
allow the Exchange to apply the proposed change to aberrant trades
immediately.\12\ Based on the above, the Commission designates the
proposal to become operative upon filing.
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\11\ See Securities Exchange Act Release No. 58736 (October 6,
2008), 73 FR 60380 (October 10, 2008) (SR-NYSE-2008-91). See also
Securities Exchange Act Release No. 59151 (December 23, 2008), 74 FR
158 (January 2, 2009) (SR-NASDAQ-2008-100).
\12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the impact of the proposed rule on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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 the furtherance of the purposes of the Act.
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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-BX-2009-002 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
[[Page 6186]]
All submissions should refer to File Number SR-BX-2009-002. 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 (https://www.sec.gov/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 inspection and
copying in the Commission's Public Reference Room 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-BX-
2009-002 and should be submitted on or before February 26, 2009.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-2428 Filed 2-4-09; 8:45 am]
BILLING CODE 8011-01-P
