Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex Equities Rule 128, Which Governs Clearly Erroneous Executions, To Extend the Effective Date of the Pilot, 78333-78334 [2010-31440]

Download as PDF Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63480; File No. SR– NYSEAmex–2010–116] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex Equities Rule 128, Which Governs Clearly Erroneous Executions, To Extend the Effective Date of the Pilot December 9, 2010. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on December 7, 2010, NYSE Amex LLC (the ‘‘Exchange’’ or ‘‘NYSE Amex’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 proposes to amend NYSE Amex Equities Rule 128, which governs clearly erroneous executions, to extend the effective date of the pilot by which portions of such Rule operate until the earlier of approval by the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) to make such pilot permanent or April 11, 2011. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, https://www.sec.gov, and https:// www.nyse.com. hsrobinson on DSK69SOYB1PROD with NOTICES 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 self-regulatory organization 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 those 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 parts of such statements. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 VerDate Mar<15>2010 19:10 Dec 14, 2010 Jkt 223001 1. Purpose The Exchange proposes to amend NYSE Amex Equities Rule 128, which governs clearly erroneous executions, to extend the effective date of the pilot by which portions of such Rule operate, until the earlier of Commission approval to make such pilot permanent or April 11, 2011. The pilot is currently scheduled to expire on December 10, 2010.4 On September 10, 2010, the Commission approved, on a pilot basis, market-wide amendments to exchanges’ rules for clearly erroneous executions to set forth clearer standards and curtail discretion with respect to breaking erroneous trades. In connection with this pilot initiative, the Exchange amended NYSE Amex Equities Rule 128(c), (e)(2), (f), and (g). The amendments provide for uniform treatment of clearly erroneous execution reviews (1) in Multi-Stock Events 5 involving twenty or more securities, and (2) in the event transactions occur that result in the issuance of an individual security trading pause by the primary market and subsequent transactions that occur before the trading pause is in effect on the Exchange.6 The amendments also eliminated appeals of certain rulings made in conjunction with other exchanges with respect to clearly erroneous transactions and limited the Exchange’s discretion to deviate from Numerical Guidelines set forth in the Rule in the event of system disruptions or malfunctions. If the pilot were not extended, the prior versions of paragraphs (c), (e)(2), (f), and (g) of NYSE Amex Equities Rule 128 would be in effect, and the NYSE Amex would have different rules than other exchanges and greater discretion in connection with breaking clearly erroneous transactions. The Exchange proposes to extend the pilot amendments to NYSE Amex Equities Rule 128 until the earlier of permanent approval by the Commission or April 11, 2011 in order to maintain uniform 4 See Securities Exchange Act Release No. 62886 (September 10, 2010), 75 FR 56613 (September 16, 2010) (SR–NYSEAmex–2010–60). 5 Terms not defined herein are defined in NYSE Amex Equities Rule 128. 6 Separately, the Exchange has proposed extend the effective date of the trading pause pilot under NYSE Amex Equities Rule 80C, which requires the Exchange to pause trading in an individual security listed on the Exchange if the price moves by 10% as compared to prices of that security in the preceding five-minute period during a trading day. See SR–NYSEAmex–2010–117. PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 78333 rules across markets and allow the pilot to continue to operate without interruption during the same period that the Rule 80C trading pause rule pilot is also in effect. Extension of the pilot would permit the Exchange, other national securities exchanges and the Commission to further assess the effect of the pilot on the marketplace, including whether additional measures should be added, whether the parameters of the rule should be modified or whether other initiatives should be adopted in lieu of the current pilot. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) 7 of the Act, in general, and furthers the objectives of Section 6(b)(5) 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, 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. More specifically, the NYSE Amex believes that the extension of the pilot will help assure that the determination of whether a clearly erroneous trade has occurred will be based on clear and objective criteria, and that the resolution of the incident will occur promptly through a transparent process. The proposed rule changes also should help assure consistent results in handling erroneous trades across the U.S. markets, thus furthering fair and orderly markets, the protection of investors and the public interest. 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 No written comments were solicited or received with respect to the proposed rule change. 7 15 8 15 E:\FR\FM\15DEN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 15DEN1 78334 Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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, it has become effective pursuant to Section 19(b)(3)(A) of the Act 9 and Rule 19b– 4(f)(6)(iii) thereunder.10 The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will allow the pilot program to continue uninterrupted and help ensure uniformity among the national securities exchanges and FINRA with respect to the treatment of clearly erroneous transactions.11 Accordingly, the Commission waives the 30-day operative delay requirement and designates the proposed rule change as operative upon filing with the Commission. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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: 9 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b–4(f)(6)(iii) requires that a self-regulatory organization submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the filing of the proposed rule change, or such shorter time as designated by the Commission. The Commission notes that the Exchange has satisfied this requirement. 11 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). hsrobinson on DSK69SOYB1PROD with NOTICES 10 17 VerDate Mar<15>2010 19:10 Dec 14, 2010 Jkt 223001 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–NYSEAmex–2010–116 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. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63466; File No. SR–EDGA– 2010–21] Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to the EDGA Exchange, Inc. Fee Schedule December 8, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 All submissions should refer to File notice is hereby given that on December Number SR–NYSEAmex–2010–116. 1, 2010, the EDGA Exchange, Inc. (the This file number should be included on ‘‘Exchange’’ or the ‘‘EDGA’’) filed with the subject line if e-mail is used. To help the Securities and Exchange the Commission process and review Commission (‘‘Commission’’) the your comments more efficiently, please proposed rule change as described in use only one method. The Commission Items I, II, and III below, which items will post all comments on the have been prepared by the selfregulatory organization. The Commission’s Internet Web site (https:// www.sec.gov/rules/sro.shtml). Copies of Commission is publishing this notice to solicit comments on the proposed rule the submission, all subsequent change from interested persons. amendments, all written statements with respect to the proposed rule I. Self-Regulatory Organization’s change that are filed with the Statement of the Terms of Substance of Commission, and all written the Proposed Rule Change communications relating to the proposed rule change between the The Exchange proposes to amend its Commission and any person, other than fees and rebates applicable to Members 3 those that may be withheld from the of the Exchange pursuant to EDGA Rule 15.1(a) and (c) by making an public in accordance with the amendment to its fee schedule. provisions of 5 U.S.C. 552, will be available for Web site viewing and All of the changes described herein printing in the Commission’s Public are applicable to EDGA Members. The Reference Room, 100 F Street, NE., text of the proposed rule change is Washington, DC 20549, on official available on the Exchange’s Internet business days between the hours of 10 Web site at https://www.directedge.com. a.m. and 3 p.m. Copies of such filing also will be available for inspection and II. Self-Regulatory Organization’s Statement of the Purpose of, and copying at the principal office of the Statutory Basis for, the Proposed Rule Exchange. All comments received will Change be posted without change; the Commission does not edit personal In its filing with the Commission, the identifying information from self-regulatory organization included submissions. You should submit only statements concerning the purpose of, information that you wish to make and basis for, the proposed rule change publicly available. All submissions and discussed any comments it received should refer to File Number SR– on the proposed rule change. The text NYSEAmex–2010–116 and should be of these statements may be examined at the places specified in Item IV below. submitted on or before January 5, 2011. The self-regulatory organization has For the Commission, by the Division of prepared summaries, set forth in Trading and Markets, pursuant to delegated sections A, B and C below, of the most 12 authority. significant aspects of such statements. Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–31440 Filed 12–14–10; 8:45 am] BILLING CODE 8011–01–P 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00132 Fmt 4703 Sfmt 4703 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 A Member is any registered broker or dealer, or any person associated with a registered broker or dealer, that has been admitted to membership in the Exchange. 2 17 E:\FR\FM\15DEN1.SGM 15DEN1

Agencies

[Federal Register Volume 75, Number 240 (Wednesday, December 15, 2010)]
[Notices]
[Pages 78333-78334]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31440]



[[Page 78333]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63480; File No. SR-NYSEAmex-2010-116]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex 
Equities Rule 128, Which Governs Clearly Erroneous Executions, To 
Extend the Effective Date of the Pilot

December 9, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on December 7, 2010, NYSE Amex LLC (the ``Exchange'' or 
``NYSE Amex'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Amex Equities Rule 128, which 
governs clearly erroneous executions, to extend the effective date of 
the pilot by which portions of such Rule operate until the earlier of 
approval by the Securities and Exchange Commission (``SEC'' or 
``Commission'') to make such pilot permanent or April 11, 2011. The 
text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, https://www.sec.gov, and https://www.nyse.com.

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 self-regulatory organization 
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 those 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 parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend NYSE Amex Equities Rule 128, which 
governs clearly erroneous executions, to extend the effective date of 
the pilot by which portions of such Rule operate, until the earlier of 
Commission approval to make such pilot permanent or April 11, 2011. The 
pilot is currently scheduled to expire on December 10, 2010.\4\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 62886 (September 10, 
2010), 75 FR 56613 (September 16, 2010) (SR-NYSEAmex-2010-60).
---------------------------------------------------------------------------

    On September 10, 2010, the Commission approved, on a pilot basis, 
market-wide amendments to exchanges' rules for clearly erroneous 
executions to set forth clearer standards and curtail discretion with 
respect to breaking erroneous trades. In connection with this pilot 
initiative, the Exchange amended NYSE Amex Equities Rule 128(c), 
(e)(2), (f), and (g). The amendments provide for uniform treatment of 
clearly erroneous execution reviews (1) in Multi-Stock Events \5\ 
involving twenty or more securities, and (2) in the event transactions 
occur that result in the issuance of an individual security trading 
pause by the primary market and subsequent transactions that occur 
before the trading pause is in effect on the Exchange.\6\ The 
amendments also eliminated appeals of certain rulings made in 
conjunction with other exchanges with respect to clearly erroneous 
transactions and limited the Exchange's discretion to deviate from 
Numerical Guidelines set forth in the Rule in the event of system 
disruptions or malfunctions.
---------------------------------------------------------------------------

    \5\ Terms not defined herein are defined in NYSE Amex Equities 
Rule 128.
    \6\ Separately, the Exchange has proposed extend the effective 
date of the trading pause pilot under NYSE Amex Equities Rule 80C, 
which requires the Exchange to pause trading in an individual 
security listed on the Exchange if the price moves by 10% as 
compared to prices of that security in the preceding five-minute 
period during a trading day. See SR-NYSEAmex-2010-117.
---------------------------------------------------------------------------

    If the pilot were not extended, the prior versions of paragraphs 
(c), (e)(2), (f), and (g) of NYSE Amex Equities Rule 128 would be in 
effect, and the NYSE Amex would have different rules than other 
exchanges and greater discretion in connection with breaking clearly 
erroneous transactions. The Exchange proposes to extend the pilot 
amendments to NYSE Amex Equities Rule 128 until the earlier of 
permanent approval by the Commission or April 11, 2011 in order to 
maintain uniform rules across markets and allow the pilot to continue 
to operate without interruption during the same period that the Rule 
80C trading pause rule pilot is also in effect. Extension of the pilot 
would permit the Exchange, other national securities exchanges and the 
Commission to further assess the effect of the pilot on the 
marketplace, including whether additional measures should be added, 
whether the parameters of the rule should be modified or whether other 
initiatives should be adopted in lieu of the current pilot.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \7\ of the 
Act, in general, and furthers the objectives of Section 6(b)(5) \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, 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. More specifically, the NYSE Amex believes that the 
extension of the pilot will help assure that the determination of 
whether a clearly erroneous trade has occurred will be based on clear 
and objective criteria, and that the resolution of the incident will 
occur promptly through a transparent process. The proposed rule changes 
also should help assure consistent results in handling erroneous trades 
across the U.S. markets, thus furthering fair and orderly markets, the 
protection of investors and the public interest.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    No written comments were solicited or received with respect to the 
proposed rule change.

[[Page 78334]]

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6)(iii) thereunder.\10\ The Exchange has asked the Commission to 
waive the 30-day operative delay so that the proposal may become 
operative immediately upon filing. The Commission believes that waiving 
the 30-day operative delay is consistent with the protection of 
investors and the public interest because such waiver will allow the 
pilot program to continue uninterrupted and help ensure uniformity 
among the national securities exchanges and FINRA with respect to the 
treatment of clearly erroneous transactions.\11\ Accordingly, the 
Commission waives the 30-day operative delay requirement and designates 
the proposed rule change as operative upon filing with the Commission.
---------------------------------------------------------------------------

    \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)(iii) requires that a self-regulatory organization submit to 
the Commission written notice of its intent to file the proposed 
rule change, along with a brief description and text of the proposed 
rule change, at least five business days prior to the filing of the 
proposed rule change, or such shorter time as designated by the 
Commission. The Commission notes that the Exchange has satisfied 
this requirement.
    \11\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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-NYSEAmex-2010-116 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-NYSEAmex-2010-116. 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 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 
publicly available. All submissions should refer to File Number SR-
NYSEAmex-2010-116 and should be submitted on or before January 5, 2011.

    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).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31440 Filed 12-14-10; 8:45 am]
BILLING CODE 8011-01-P
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