Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period of the Trading Pause for Individual Stocks Contained in the Standard & Poor's 500 Index, Russell 1000 Index, and Specified Exchange Traded Products That Experience a Price Change of 10% or More During a Five-Minute Period, 78302-78304 [2010-31483]
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78302
Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices
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–ISE–
2010–117 and should be submitted on
or before January 5, 2011.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
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–ISE–2010–117 on the
subject line.
hsrobinson on DSK69SOYB1PROD with NOTICES
operative delay. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest, as it will allow the pilot
program to continue uninterrupted,
thereby avoiding the investor confusion
that could result from a temporary
interruption in the pilot program.11
Therefore, the Commission designates
the proposed rule change to be operative
upon filing.
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. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
SECURITIES AND EXCHANGE
COMMISSION
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–ISE–2010–117. 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
11 For the purposes only of waiving the operative
date of this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
VerDate Mar<15>2010
19:10 Dec 14, 2010
Jkt 223001
[FR Doc. 2010–31484 Filed 12–14–10; 8:45 am]
BILLING CODE 8011–01–P
[Release No. 34–63505; File No. SR–
NASDAQ–2010–162]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot Period of the Trading Pause for
Individual Stocks Contained in the
Standard & Poor’s 500 Index, Russell
1000 Index, and Specified Exchange
Traded Products That Experience a
Price Change of 10% or More During a
Five-Minute Period
December 9, 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 December
7, 2010, The NASDAQ Stock Market
LLC (‘‘Nasdaq’’ or ‘‘Exchange’’) 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 Exchange. The
Commission is publishing this notice to
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
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 extend the
pilot period of the trading pause for
individual stocks contained in the
Standard & Poor’s 500 Index, Russell
1000 Index, and specified Exchange
Traded Products that experience a price
change of 10% or more during a fiveminute period, so that the pilot will
now expire on April 11, 2011.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.
*
*
*
*
*
4120. Trading Halts
(a) Authority To Initiate Trading Halts
or Pauses
In circumstances in which Nasdaq
deems it necessary to protect investors
and the public interest, Nasdaq,
pursuant to the procedures set forth in
paragraph (c):
(1)–(10) No change.
(11) shall, between 9:45 a.m. and 3:35
p.m., or in the case of an early
scheduled close, 25 minutes before the
close of trading, immediately pause
trading for 5 minutes in any Nasdaqlisted security when the price of such
security moves 10 percent or more
within a 5-minute period. At the end of
the trading pause, Nasdaq will re-open
the security using the Halt Cross process
set forth in Nasdaq Rule 4753. In the
event of a significant imbalance at the
end of a trading pause, Nasdaq may
delay the re-opening of a security.
Nasdaq will issue a notification if it
cannot resume trading for a reason other
than a significant imbalance.
Price moves under this paragraph will
be calculated by changes in each
consolidated last-sale price
disseminated by a network processor
over a five-minute rolling period
measured continuously. Only regular
way in-sequence transactions qualify for
use in calculations of price moves.
Nasdaq can exclude a transaction price
from use if it concludes that the
transaction price resulted from an
erroneous trade.
If a trading pause is triggered under
this paragraph, Nasdaq shall
immediately notify the single plan
processor responsible for consolidation
of information for the security pursuant
to Rule 603 of Regulation NMS under
the Securities Exchange Act of 1934. If
a primary listing market issues an
individual stock trading pause, Nasdaq
will pause trading in that security until
trading has resumed on the primary
E:\FR\FM\15DEN1.SGM
15DEN1
Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices
listing market or notice has been
received from the primary listing market
that trading may resume. If the primary
listing market does not reopen within 10
minutes of notification of a trading
pause, Nasdaq may resume trading the
security.
The provisions of this paragraph shall
only apply to securities in the Standard
& Poor’s 500 Index, the Russell 1000
Index, as well as a pilot list of Exchange
Traded Products.
The provisions of this paragraph shall
be in effect during a pilot set to end on
April 11, 2011 [December 10, 2010].
*
*
*
*
*
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.
hsrobinson on DSK69SOYB1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On June 10, 2010, the Commission
granted accelerated approval, for a pilot
period to end December 10, 2010, for a
proposed rule change submitted by the
Exchange, together with related rule
changes of the BATS Exchange, Inc.,
NASDAQ OMX BX, Inc., Chicago Board
Options Exchange, Incorporated,
Chicago Stock Exchange, Inc., EDGA
Exchange, Inc., EDGX Exchange, Inc.,
International Securities Exchange LLC,
New York Stock Exchange LLC, NYSE
Amex LLC, NYSE Arca, Inc., and
National Stock Exchange, Inc.
(collectively, the ‘‘Exchanges’’), to pause
trading during periods of extraordinary
market volatility in S&P 500 stocks.3
The rules require the Listing Markets 4
to issue five-minute trading pauses for
individual securities for which they are
the primary Listing Market if the
transaction price of the security moves
ten percent or more from a price in the
preceding five-minute period. The
Listing Markets are required to notify
3 Securities
Exchange Act Release No. 62252
(June 10, 2010), 75 FR 34186 (June 16, 2010).
4 The term ‘‘Listing Markets’’ refers collectively to
NYSE, NYSE Amex, NYSE Arca, and NASDAQ.
VerDate Mar<15>2010
19:10 Dec 14, 2010
Jkt 223001
the other Exchanges and market
participants of the imposition of a
trading pause by immediately
disseminating a special indicator over
the consolidated tape. Under the rules,
once the Listing Market issues a trading
pause, the other Exchanges are required
to pause trading in the security on their
markets. On September 10, 2010, the
Commission approved the respective
rule filings of the Exchanges to expand
application of the pilot to the Russell
1000® Index and specified Exchange
Traded Products.5
The Exchange believes that the pilot
program has been successful in reducing
the negative impacts of sudden,
unanticipated price movements in the
securities covered by the pilot. The
Exchange also believes that an
additional four-month extension of the
pilot is warranted so that it may
continue to assess whether additional
securities need to be added and whether
the parameters of the rule need to be
modified to accommodate trading
characteristics of different securities.
Accordingly, the Exchange is filing to
seek a four-month extension of the
existing pilot.
2. Statutory Basis
The statutory basis for the proposed
rule change is Section 6(b)(5) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),6 which requires the rules of an
exchange to promote just and equitable
principles of trade, 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. The proposed rule
change also is designed to support the
principles of Section 11A(a)(1) 7 of the
Act in that it seeks to assure fair
competition among brokers and dealers
and among exchange markets. The
Exchange believes that the proposed
rule meets these requirements in that it
promotes transparency and uniformity
across markets concerning decisions to
pause trading in a security when there
are significant price movements.
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, as amended.
5 Securities Exchange Act Release No. 62884
(September 10, 2010), 75 FR 56618 (September 16,
2010).
6 15 U.S.C. 78f(b)(5).
7 15 U.S.C. 78k–1(a)(1).
PO 00000
Frm 00101
Fmt 4703
Sfmt 4703
78303
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
Because the foregoing proposed rule
change does not: (1) Significantly affect
the protection of investors or the public
interest; (2) impose any significant
burden on competition; and (3) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 8 and Rule 19b–
4(f)(6) thereunder.9
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing.10 However, Rule 19b–
4(f)(6) 11 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.
The Commission has considered the
Exchange’s request to waive the 30-day
operative delay. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest, as it will allow the pilot
program to continue uninterrupted,
thereby avoiding the investor confusion
that could result from a temporary
interruption in the pilot program.12
Therefore, the Commission designates
the proposed rule change to be operative
upon filing.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
8 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). When filing a proposed
rule change pursuant to Rule 19b–4(f)(6) under the
Act, an exchange is required to give 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 date of 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.
10 17 CFR 240.19b–4(f)(6)(iii).
11 Id.
12 For the purposes only of waiving the operative
date of this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
9 17
E:\FR\FM\15DEN1.SGM
15DEN1
78304
Federal Register / Vol. 75, No. 240 / Wednesday, December 15, 2010 / Notices
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. If the
Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
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:
hsrobinson on DSK69SOYB1PROD 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–2010–162 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–2010–162. 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
VerDate Mar<15>2010
19:10 Dec 14, 2010
Jkt 223001
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2010–162 and should be
submitted on or before January 5, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–31483 Filed 12–14–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63504; File No. SR–Phlx–
2010–174]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot Period of the Trading Pause for
Individual Stocks Contained in the
Standard & Poor’s 500 Index, Russell
1000 Index, and Specified Exchange
Traded Products That Experience a
Price Change of 10% or More During a
Five-Minute Period
December 9, 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 December
7, 2010, NASDAQ OMX PHLX LLC
(‘‘Phlx’’ or ‘‘Exchange’’) 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 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 proposes to extend the
pilot period of the trading pause for
individual stocks contained in the
Standard & Poor’s 500 Index, Russell
1000 Index, and specified Exchange
Traded Products that experience a price
change of 10% or more during a fiveminute period, so that the pilot will
now expire on April 11, 2011.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.
*
*
*
*
*
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00102
Fmt 4703
Sfmt 4703
Rule 3100. Trading Halts on PSX
(a) Authority To Initiate Trading Halts
or Pauses
In circumstances in which the
Exchange deems it necessary to protect
investors and the public interest, and
pursuant to the procedures set forth in
paragraph (c):
(1)–(3) No change.
(4) If a primary listing market issues
an individual stock trading pause in any
of the Circuit Breaker Securities, as
defined herein, the Exchange will pause
trading in that security until trading has
resumed on the primary listing market.
If, however, trading has not resumed on
the primary listing market and ten
minutes have passed since the
individual stock trading pause message
has been received from the responsible
single plan processor, the Exchange may
resume trading in such stock. The
provisions of this paragraph (a)(4) shall
be in effect during a pilot set to end on
April 11, 2011 [December 10, 2010].
During the pilot, the term ‘‘Circuit
Breaker Securities’’ shall mean the
securities included in the S&P 500 ®
Index and the Russell 1000 ® Index, as
well as a pilot list of Exchange Traded
Products.
(b)–(c) No change.
*
*
*
*
*
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
On June 10, 2010, the Commission
granted accelerated approval, for a pilot
period to end December 10, 2010, of
proposed rule changes submitted by the
of the BATS Exchange, Inc., NASDAQ
OMX BX, Inc., Chicago Board Options
Exchange, Incorporated, Chicago Stock
Exchange, Inc., EDGA Exchange, Inc.,
EDGX Exchange, Inc., International
Securities Exchange LLC, The NASDAQ
Stock Market LLC, New York Stock
E:\FR\FM\15DEN1.SGM
15DEN1
]]>Agencies
[Federal Register Volume 75, Number 240 (Wednesday, December 15, 2010)]
[Notices]
[Pages 78302-78304]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31483]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63505; File No. SR-NASDAQ-2010-162]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend the Pilot Period of the Trading Pause for Individual Stocks
Contained in the Standard & Poor's 500 Index, Russell 1000 Index, and
Specified Exchange Traded Products That Experience a Price Change of
10% or More During a Five-Minute Period
December 9, 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 December 7, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or
``Exchange'') 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 Exchange. 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
The Exchange proposes to extend the pilot period of the trading
pause for individual stocks contained in the Standard & Poor's 500
Index, Russell 1000 Index, and specified Exchange Traded Products that
experience a price change of 10% or more during a five-minute period,
so that the pilot will now expire on April 11, 2011.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.
* * * * *
4120. Trading Halts
(a) Authority To Initiate Trading Halts or Pauses
In circumstances in which Nasdaq deems it necessary to protect
investors and the public interest, Nasdaq, pursuant to the procedures
set forth in paragraph (c):
(1)-(10) No change.
(11) shall, between 9:45 a.m. and 3:35 p.m., or in the case of an
early scheduled close, 25 minutes before the close of trading,
immediately pause trading for 5 minutes in any Nasdaq-listed security
when the price of such security moves 10 percent or more within a 5-
minute period. At the end of the trading pause, Nasdaq will re-open the
security using the Halt Cross process set forth in Nasdaq Rule 4753. In
the event of a significant imbalance at the end of a trading pause,
Nasdaq may delay the re-opening of a security.
Nasdaq will issue a notification if it cannot resume trading for a
reason other than a significant imbalance.
Price moves under this paragraph will be calculated by changes in
each consolidated last-sale price disseminated by a network processor
over a five-minute rolling period measured continuously. Only regular
way in-sequence transactions qualify for use in calculations of price
moves. Nasdaq can exclude a transaction price from use if it concludes
that the transaction price resulted from an erroneous trade.
If a trading pause is triggered under this paragraph, Nasdaq shall
immediately notify the single plan processor responsible for
consolidation of information for the security pursuant to Rule 603 of
Regulation NMS under the Securities Exchange Act of 1934. If a primary
listing market issues an individual stock trading pause, Nasdaq will
pause trading in that security until trading has resumed on the primary
[[Page 78303]]
listing market or notice has been received from the primary listing
market that trading may resume. If the primary listing market does not
reopen within 10 minutes of notification of a trading pause, Nasdaq may
resume trading the security.
The provisions of this paragraph shall only apply to securities in
the Standard & Poor's 500 Index, the Russell 1000 Index, as well as a
pilot list of Exchange Traded Products.
The provisions of this paragraph shall be in effect during a pilot
set to end on April 11, 2011 [December 10, 2010].
* * * * *
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
On June 10, 2010, the Commission granted accelerated approval, for
a pilot period to end December 10, 2010, for a proposed rule change
submitted by the Exchange, together with related rule changes of the
BATS Exchange, Inc., NASDAQ OMX BX, Inc., Chicago Board Options
Exchange, Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange,
Inc., EDGX Exchange, Inc., International Securities Exchange LLC, New
York Stock Exchange LLC, NYSE Amex LLC, NYSE Arca, Inc., and National
Stock Exchange, Inc. (collectively, the ``Exchanges''), to pause
trading during periods of extraordinary market volatility in S&P 500
stocks.\3\ The rules require the Listing Markets \4\ to issue five-
minute trading pauses for individual securities for which they are the
primary Listing Market if the transaction price of the security moves
ten percent or more from a price in the preceding five-minute period.
The Listing Markets are required to notify the other Exchanges and
market participants of the imposition of a trading pause by immediately
disseminating a special indicator over the consolidated tape. Under the
rules, once the Listing Market issues a trading pause, the other
Exchanges are required to pause trading in the security on their
markets. On September 10, 2010, the Commission approved the respective
rule filings of the Exchanges to expand application of the pilot to the
Russell 1000[supreg] Index and specified Exchange Traded Products.\5\
---------------------------------------------------------------------------
\3\ Securities Exchange Act Release No. 62252 (June 10, 2010),
75 FR 34186 (June 16, 2010).
\4\ The term ``Listing Markets'' refers collectively to NYSE,
NYSE Amex, NYSE Arca, and NASDAQ.
\5\ Securities Exchange Act Release No. 62884 (September 10,
2010), 75 FR 56618 (September 16, 2010).
---------------------------------------------------------------------------
The Exchange believes that the pilot program has been successful in
reducing the negative impacts of sudden, unanticipated price movements
in the securities covered by the pilot. The Exchange also believes that
an additional four-month extension of the pilot is warranted so that it
may continue to assess whether additional securities need to be added
and whether the parameters of the rule need to be modified to
accommodate trading characteristics of different securities.
Accordingly, the Exchange is filing to seek a four-month extension of
the existing pilot.
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Securities Exchange Act of 1934 (the ``Act''),\6\ which requires
the rules of an exchange to promote just and equitable principles of
trade, 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. The proposed rule change also is
designed to support the principles of Section 11A(a)(1) \7\ of the Act
in that it seeks to assure fair competition among brokers and dealers
and among exchange markets. The Exchange believes that the proposed
rule meets these requirements in that it promotes transparency and
uniformity across markets concerning decisions to pause trading in a
security when there are significant price movements.
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\6\ 15 U.S.C. 78f(b)(5).
\7\ 15 U.S.C. 78k-1(a)(1).
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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, as amended.
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
Because the foregoing proposed rule change does not: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change
pursuant to Rule 19b-4(f)(6) under the Act, an exchange is required
to give 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 date
of 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.
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\10\
However, Rule 19b-4(f)(6) \11\ 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.
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\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ Id.
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The Commission has considered the Exchange's request to waive the
30-day operative delay. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest, as it will allow the pilot program to continue
uninterrupted, thereby avoiding the investor confusion that could
result from a temporary interruption in the pilot program.\12\
Therefore, the Commission designates the proposed rule change to be
operative upon filing.
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\12\ For the purposes only of waiving the operative date of this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 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 summarily may temporarily suspend such rule
change if
[[Page 78304]]
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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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-2010-162 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-2010-162. 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-2010-162 and should be submitted on or before January 5, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31483 Filed 12-14-10; 8:45 am]
BILLING CODE 8011-01-P
