Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by The NASDAQ Stock Market LLC Relating to Trading Halts in Options During a Trading Pause in the Underlying Securities, 43592-43594 [2010-18167]
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43592
Federal Register / Vol. 75, No. 142 / Monday, July 26, 2010 / Notices
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)(3) thereunder,8
Nasdaq has designated this proposal as
one that is concerned solely with the
administration of the self-regulatory
organization. Accordingly, Nasdaq
believes that its proposal should become
immediately effective.
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:
jlentini on DSKJ8SOYB1PROD with NOTICES
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–NASDAQ–2010–080 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.
All submissions should refer to File
Number SR–NASDAQ–2010–080. 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 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 the 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–2010–080 and should be
submitted on or before August 16, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010–18172 Filed 7–23–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No.34–62531; File No. SR–
NASDAQ–2010–087]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by The
NASDAQ Stock Market LLC Relating to
Trading Halts in Options During a
Trading Pause in the Underlying
Securities
July 19, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on July 14,
2010, The NASDAQ Stock Market LLC
(‘‘NASDAQ’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by NASDAQ. 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 (‘‘SEC’’ or
‘‘Commission’’) a proposal for the
NASDAQ Options Market (‘‘NOM’’ or
‘‘Exchange’’) to amend NOM Chapter V,
Section 3 (Trading Halts) to enhance the
recently-implemented options halt rule
whenever trading in the underlying
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
7 15
U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b–4(f)(3).
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16:04 Jul 23, 2010
1 15
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Sfmt 4703
security has been paused by the primary
listing market (the ‘‘options halt rule’’).3
The text of the proposed rule change
is available from NASDAQ’s Web site at
https://nasdaq.cchwallstreet.com/
Filings/, 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,
NASDAQ 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.
NASDAQ 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 this proposal is to
amend Chapter V, Section 3 to enhance
the recently-implemented options halt
rule to indicate that if trading has not
been resumed on the primary listing
market for the underlying security once
ten minutes has passed after an
underlying security was paused, the
Exchange may resume options trading if
trading has resumed on at least one
national securities exchange; and that
the Exchange will continue certain
processes during the halt (maintain
booked orders, accept orders, and
process cancels).
On June 10, 2010, the Exchange filed
an immediately effective proposal to
establish the options halt rule in new
subsection (a)(vi) to Chapter V, Section
3.4 Subsection (a)(vi) states that trading
on the Exchange in any option contract
shall be halted whenever trading in the
underlying security has been paused by
3 The options halt rule is also known as the
options pause rule.
4 See Securities Exchange Act Release No. 62270
(June 10, 2010), 75 FR 34510, (June 17, 2010)
(NASDAQ–2010–071) (notice of filing and
immediate effectiveness regarding options halt
rule). The Exchange proposed the options halt rule
after consultation with Commission staff regarding
uniform market-wide trading pause standards for
certain individual stocks that experience rapid
price movement and for individual equity options
overlying those stocks. For a similar options halt
rule proposed by another options exchange, see
Securities Exchange Act Release No. 62269 (June
10, 2010), 75 FR 34491, (June 17, 2010) (Phlx–2010–
82)(notice of filing and immediate effectiveness
regarding options halt rule).
E:\FR\FM\26JYN1.SGM
26JYN1
Federal Register / Vol. 75, No. 142 / Monday, July 26, 2010 / Notices
jlentini on DSKJ8SOYB1PROD with NOTICES
the primary listing market. The rule
states further that trading in such halted
options contracts may be resumed upon
a determination by the Exchange that
the conditions that led to the pause are
no longer present and that the interests
of a fair and orderly market are best
served by a resumption of trading,
which in no circumstances will be
before the Exchange has received
notification that the underlying security
has resumed trading on at least one
exchange.
On the same day as the Exchange’s
options halt rule filing, Chicago Board
Options Exchange (‘‘CBOE’’) filed an
options halt that is similar to the
Exchange’s options halt rule but has
some additional elements.5 The
Exchange’s current filing is based on the
CBOE filing.
The Exchange believes that it should
continue certain processes and
procedures independently of an options
trading halt. Specifically, the Exchange
proposes to state in subsection (a)(vi)(B)
to Chapter V, Section 3 that during the
options halt, the Exchange will maintain
existing orders on the book, accept
orders, and process cancels.
Moreover, the Exchange believes that
it should have the ability to resume
options trading within certain
parameters after an underlying halt.
Specifically, the Exchange proposes to
state in subsection (a)(vi)(A) to Chapter
V, Section 3 that if trading has not been
resumed on the primary listing market
for the underlying security after ten
minutes have passed since the
underlying security was paused by the
primary listing market, the Exchange
may resume trading in options contracts
if the underlying security has resumed
trading on at least one national
securities exchange.6
The Exchange believes that the
proposals, individually and together,
5 The additional elements include the following:
That if trading has not been resumed on the primary
listing market for the underlying security once ten
minutes passed after an underlying security was
paused, the Exchange may resume options trading
if at least one market has resumed trading in the
underlying; and that the Exchange will continue
certain processes during the halt (maintain booked
orders, accept orders, and process cancels). See
Securities Exchange Act Release No. 62272 (June
10, 2010), 75 FR 34509, (June 17, 2010) (CBOE
2010–055).
6 No changes to the Exchange’s trading processes
are otherwise contemplated by this proposal. For
example, transactions that occur between the time
the pause is imposed on the listing market and the
halt is processed on the Exchange may be nullified
pursuant to Chapter V, Section 6. And orders in the
affected option that are received during the halt on
the Exchange will be treated as pre-opening orders
and will be included in the re-opening process
upon the resumption of trading on the listing
market for the underlying security pursuant to
Chapter VI, Section 8.
VerDate Mar<15>2010
16:04 Jul 23, 2010
Jkt 220001
enhance and strengthen the options halt
rule and its application. The proposals
will be immediately implemented upon
effectiveness of the filing.
The Exchange believes that the
options halt rule as amended ensures
that the Exchange has the ability to
maintain fair and orderly markets in
options upon the imposition of a single
stock trading pause by the listing market
for the underlying security.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 7 in general, and furthers the
objectives of Section 6(b)(5) of the Act 8
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.
Specifically, the Exchange believes that
the proposal benefits customers by
enhancing the current options halt rule
to clarify the circumstances under
which the Exchange may resume
options trading, and that the Exchange
will continue certain order processing
and cancellation functions during a halt.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
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
The Exchange believes that the
foregoing proposed rule change may
take effect upon filing with the
Commission pursuant to Section
19(b)(3)(A) 9 of the Act and Rule 19b–
4(f)(6)(iii) thereunder 10 because the
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6)(iii). 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
PO 00000
7 15
43593
foregoing proposed rule change does
not: (i) Significantly affect the
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. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
upon filing. The Commission notes that
the proposed rule change clarifies
certain aspects of the Exchange’s rule
regarding how orders will be handled
during options trading halts caused by
a pause in the trading of the underlying
security and also clarifies when the
Exchange may resume trading when a
trading pause in the underlying security
is prolonged for unknown reasons. The
proposed rule change does not raise any
new substantive issues. For these
reasons, the Commission believes that
the waiver of the 30-day operative delay
is consistent with the protection of
investors and the public interest.11
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 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–NASDAQ–2010–087 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 15
Frm 00109
Fmt 4703
Sfmt 4703
Commission. The Exchange has satisfied this
requirement.
11 For purposes only of waiving the 30-day
operative delay of this proposal, the Commission
has considered the proposed rule’s impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
E:\FR\FM\26JYN1.SGM
26JYN1
43594
Federal Register / Vol. 75, No. 142 / Monday, July 26, 2010 / Notices
All submissions should refer to File
Number SR–NASDAQ–2010–087. 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 Web site viewing and
printing in the Commission’s Public
Reference Room. Copies of the 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–2010–087 and
should be submitted on or before
August 16, 2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–18167 Filed 7–23–10; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–62530; File No. SR–Phlx–
2010–96]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NASDAQ
OMX PHLX, Inc. Relating to Trading
Halts in Options During a Trading
Pause in the Underlying Securities
jlentini on DSKJ8SOYB1PROD with NOTICES
July 19, 2010.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1, and Rule 19b–4 2 thereunder,
notice is hereby given that on July 14,
2010, NASDAQ OMX PHLX, Inc.
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I and
II 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
The Exchange is filing with the
Commission a proposal to amend Phlx
Rule 1047 (Trading Rotations, Halts and
Suspensions) to enhance the recentlyimplemented options halt rule
whenever trading in the underlying
security has been paused by the primary
listing market (the ‘‘options halt rule’’).3
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxphlx.cchwallstreet.com/
NASDAQOMXPHLX/Filings/, at the
principal office of the Exchange, 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 this proposal is to
amend Rule 1047 to enhance the
recently-implemented options halt rule
to indicate that if trading has not been
resumed on the primary listing market
for the underlying security once ten
minutes has passed after an underlying
security was paused, the Exchange may
resume options trading if trading has
resumed on at least one national
securities exchange; and that the
Exchange will continue certain
processes during the halt (maintain
booked orders, accept orders, and
process cancels).
12 17
1 15
VerDate Mar<15>2010
16:04 Jul 23, 2010
3 The options halt rule is also known as the
options pause rule.
Jkt 220001
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
On June 10, 2010, the Exchange filed
an immediately effective proposal to
establish the options halt rule in new
subsection (e) to Rule 1047.4 Subsection
(e) states that trading on the Exchange
in any option contract shall be halted
whenever trading in the underlying
security has been paused by the primary
listing market. The rule states further
that trading in such halted options
contracts may be resumed upon a
determination by the Exchange that the
conditions that led to the pause are no
longer present and that the interests of
a fair and orderly market are best served
by a resumption of trading, which in no
circumstances will be before the
Exchange has received notification that
the underlying security has resumed
trading on at least one exchange.
On the same day as the Exchange’s
options halt rule filing, Chicago Board
Options Exchange (‘‘CBOE’’) filed an
options halt that is similar to the
Exchange’s options halt rule but has
some additional elements.5 The
Exchange’s current filing is based on the
CBOE filing.
The Exchange believes that it should
continue certain processes and
procedures independently of an options
trading halt. Specifically, the Exchange
proposes to state in Rule 1047(e)(ii) that
during the options halt, the Exchange
will maintain existing orders on the
book, accept orders, and process
cancels.
Moreover, the Exchange believes that
it should have the ability to resume
options trading within certain
parameters after an underlying halt.
Specifically, The Exchange proposes to
state in subsection (e)(i) that if trading
has not been resumed on the primary
listing market for the underlying
security after ten minutes have passed
4 See Securities Exchange Act Release No. 62269
(June 10, 2010), 75 FR 34491, (June 17, 2010) (Phlx–
2010–82)(notice of filing and immediate
effectiveness regarding options halt rule). The
Exchange proposed the options halt rule after
consultation with Commission staff regarding
uniform market-wide trading pause standards for
certain individual stocks that experience rapid
price movement and for individual equity options
overlying those stocks. For a similar options halt
rule proposed by another options exchange, see
Securities Exchange Act Release No. 62270 (June
10, 2010), 75 FR 34510, (June 17, 2010) (NASDAQ–
2010–071) (notice of filing and immediate
effectiveness regarding options halt rule).
5 The additional elements include the following:
that if trading has not been resumed on the primary
listing market for the underlying security once ten
minutes passed after an underlying security was
paused, the Exchange may resume options trading
if at least one market has resumed trading in the
underlying; and that the Exchange will continue
certain processes during the halt (maintain booked
orders, accept orders, and process cancels). See
Securities Exchange Act Release No. 62272 (June
10, 2010), 75 FR 34509, (June 17, 2010) (CBOE
2010–055).
E:\FR\FM\26JYN1.SGM
26JYN1
]]>Agencies
[Federal Register Volume 75, Number 142 (Monday, July 26, 2010)]
[Notices]
[Pages 43592-43594]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18167]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No.34-62531; File No. SR-NASDAQ-2010-087]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change by The NASDAQ Stock Market LLC
Relating to Trading Halts in Options During a Trading Pause in the
Underlying Securities
July 19, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given
that on July 14, 2010, The NASDAQ Stock Market LLC (``NASDAQ'') filed
with the Securities and Exchange Commission (``SEC'' or ``Commission'')
the proposed rule change as described in Items I and II below, which
Items have been prepared by NASDAQ. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
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
(``SEC'' or ``Commission'') a proposal for the NASDAQ Options Market
(``NOM'' or ``Exchange'') to amend NOM Chapter V, Section 3 (Trading
Halts) to enhance the recently-implemented options halt rule whenever
trading in the underlying security has been paused by the primary
listing market (the ``options halt rule'').\3\
---------------------------------------------------------------------------
\3\ The options halt rule is also known as the options pause
rule.
---------------------------------------------------------------------------
The text of the proposed rule change is available from NASDAQ's Web
site at https://nasdaq.cchwallstreet.com/Filings/, 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, NASDAQ 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. NASDAQ 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 this proposal is to amend Chapter V, Section 3 to
enhance the recently-implemented options halt rule to indicate that if
trading has not been resumed on the primary listing market for the
underlying security once ten minutes has passed after an underlying
security was paused, the Exchange may resume options trading if trading
has resumed on at least one national securities exchange; and that the
Exchange will continue certain processes during the halt (maintain
booked orders, accept orders, and process cancels).
On June 10, 2010, the Exchange filed an immediately effective
proposal to establish the options halt rule in new subsection (a)(vi)
to Chapter V, Section 3.\4\ Subsection (a)(vi) states that trading on
the Exchange in any option contract shall be halted whenever trading in
the underlying security has been paused by
[[Page 43593]]
the primary listing market. The rule states further that trading in
such halted options contracts may be resumed upon a determination by
the Exchange that the conditions that led to the pause are no longer
present and that the interests of a fair and orderly market are best
served by a resumption of trading, which in no circumstances will be
before the Exchange has received notification that the underlying
security has resumed trading on at least one exchange.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 62270 (June 10,
2010), 75 FR 34510, (June 17, 2010) (NASDAQ-2010-071) (notice of
filing and immediate effectiveness regarding options halt rule). The
Exchange proposed the options halt rule after consultation with
Commission staff regarding uniform market-wide trading pause
standards for certain individual stocks that experience rapid price
movement and for individual equity options overlying those stocks.
For a similar options halt rule proposed by another options
exchange, see Securities Exchange Act Release No. 62269 (June 10,
2010), 75 FR 34491, (June 17, 2010) (Phlx-2010-82)(notice of filing
and immediate effectiveness regarding options halt rule).
---------------------------------------------------------------------------
On the same day as the Exchange's options halt rule filing, Chicago
Board Options Exchange (``CBOE'') filed an options halt that is similar
to the Exchange's options halt rule but has some additional
elements.\5\ The Exchange's current filing is based on the CBOE filing.
---------------------------------------------------------------------------
\5\ The additional elements include the following: That if
trading has not been resumed on the primary listing market for the
underlying security once ten minutes passed after an underlying
security was paused, the Exchange may resume options trading if at
least one market has resumed trading in the underlying; and that the
Exchange will continue certain processes during the halt (maintain
booked orders, accept orders, and process cancels). See Securities
Exchange Act Release No. 62272 (June 10, 2010), 75 FR 34509, (June
17, 2010) (CBOE 2010-055).
---------------------------------------------------------------------------
The Exchange believes that it should continue certain processes and
procedures independently of an options trading halt. Specifically, the
Exchange proposes to state in subsection (a)(vi)(B) to Chapter V,
Section 3 that during the options halt, the Exchange will maintain
existing orders on the book, accept orders, and process cancels.
Moreover, the Exchange believes that it should have the ability to
resume options trading within certain parameters after an underlying
halt. Specifically, the Exchange proposes to state in subsection
(a)(vi)(A) to Chapter V, Section 3 that if trading has not been resumed
on the primary listing market for the underlying security after ten
minutes have passed since the underlying security was paused by the
primary listing market, the Exchange may resume trading in options
contracts if the underlying security has resumed trading on at least
one national securities exchange.\6\
---------------------------------------------------------------------------
\6\ No changes to the Exchange's trading processes are otherwise
contemplated by this proposal. For example, transactions that occur
between the time the pause is imposed on the listing market and the
halt is processed on the Exchange may be nullified pursuant to
Chapter V, Section 6. And orders in the affected option that are
received during the halt on the Exchange will be treated as pre-
opening orders and will be included in the re-opening process upon
the resumption of trading on the listing market for the underlying
security pursuant to Chapter VI, Section 8.
---------------------------------------------------------------------------
The Exchange believes that the proposals, individually and
together, enhance and strengthen the options halt rule and its
application. The proposals will be immediately implemented upon
effectiveness of the filing.
The Exchange believes that the options halt rule as amended ensures
that the Exchange has the ability to maintain fair and orderly markets
in options upon the imposition of a single stock trading pause by the
listing market for the underlying security.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \7\ in general, and furthers the objectives of Section
6(b)(5) of the Act \8\ 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. Specifically, the Exchange
believes that the proposal benefits customers by enhancing the current
options halt rule to clarify the circumstances under which the Exchange
may resume options trading, and that the Exchange will continue certain
order processing and cancellation functions during a halt.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
result in 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
The Exchange believes that the foregoing proposed rule change may
take effect upon filing with the Commission pursuant to Section
19(b)(3)(A) \9\ of the Act and Rule 19b-4(f)(6)(iii) thereunder \10\
because the foregoing proposed rule change does not: (i) Significantly
affect the 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. The Exchange has asked the Commission to
waive the 30-day operative delay so that the proposal may become
operative upon filing. The Commission notes that the proposed rule
change clarifies certain aspects of the Exchange's rule regarding how
orders will be handled during options trading halts caused by a pause
in the trading of the underlying security and also clarifies when the
Exchange may resume trading when a trading pause in the underlying
security is prolonged for unknown reasons. The proposed rule change
does not raise any new substantive issues. For these reasons, the
Commission believes that the waiver of the 30-day operative delay is
consistent with the protection of investors and the public
interest.\11\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6)(iii). 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.
The Exchange has satisfied this requirement.
\11\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact 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 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-NASDAQ-2010-087 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 43594]]
All submissions should refer to File Number SR-NASDAQ-2010-087. 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 Web site viewing and printing in
the Commission's Public Reference Room. Copies of the 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-2010-087 and
should be submitted on or before August 16, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-18167 Filed 7-23-10; 8:45 am]
BILLING CODE 8010-01-P
