Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex Equities Rule 440B (Short Sales) To Modify the Exchange's Procedures for Early Termination of the Short Sale Price Test Restrictions of Rule 201 of Regulation SHO Based on a Triggering Transaction That Another Exchange or a Self-Regulatory Organization Has Determined Was a Clearly Erroneous Execution, 24945-24947 [2011-10656]
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Federal Register / Vol. 76, No. 85 / Tuesday, May 3, 2011 / Notices
short sale order of a covered security in
violation of the short sale price test
restrictions established in Rule 201. To
that end, the proposed rule change
expands the ability of the Exchange, as
a listing market, to lift short sale price
test restrictions to include situations
where another exchange or a SRO has
determined that a triggering transaction
was a clearly erroneous execution under
the rules of that exchange or SRO.
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.
srobinson on DSKHWCL6B1PROD with NOTICES
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 14 and Rule
19b–4(f)(6) thereunder.15 Because the
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
prior to 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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6)16 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),17 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. 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 has considered the
Exchange’s request to waive the 30-day
operative delay, and hereby grants the
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
15 17
20:39 May 02, 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:
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–NYSE–2011–19 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–NYSE–2011–19. 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
18 For the purposes only of waiving the operative
delay 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).
14 15
VerDate Mar<15>2010
request. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, as it
will permit the Exchange to lift Rule
201’s short sale price test restrictions, in
a covered security for which the
Exchange is the listing market, when
such restrictions were triggered by a
transaction that another exchange or a
SRO has determined to be a clearly
erroneous execution, pursuant to the
rules of that exchange or SRO.18 For this
reason, the Commission designates the
proposed rule change to be operative
upon filing.
At any time within 60 days of the
filing of such 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.
Jkt 223001
PO 00000
Frm 00098
Fmt 4703
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24945
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 20549–1090. Copies of
the filing will also be available for
inspection and copying at the NYSE’s
principal office and on its Internet Web
site at https://www.nyse.com. 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–NYSE–2011–19 and should
be submitted on or before May 24, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–10657 Filed 5–2–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64350; File No. SR–
NYSEAmex–2011–29]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending NYSE Amex
Equities Rule 440B (Short Sales) To
Modify the Exchange’s Procedures for
Early Termination of the Short Sale
Price Test Restrictions of Rule 201 of
Regulation SHO Based on a Triggering
Transaction That Another Exchange or
a Self-Regulatory Organization Has
Determined Was a Clearly Erroneous
Execution
April 27, 2011.
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 April 25,
2011, 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
substantially prepared by the self19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\03MYN1.SGM
03MYN1
24946
Federal Register / Vol. 76, No. 85 / Tuesday, May 3, 2011 / Notices
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 440B (Short
Sales) to modify the Exchange’s
procedures for early termination of the
short sale price test restrictions of Rule
201 of Regulation SHO (‘‘Rule 201’’) 4
under the Act based on a triggering
transaction that another exchange or a
self-regulatory organization (‘‘SRO’’) has
determined was a clearly erroneous
execution pursuant to the rules of that
exchange or SRO. The text of the
proposed rule change is available at the
Exchange, the Commission’s Public
Reference Room, 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
srobinson on DSKHWCL6B1PROD with NOTICES
1. Purpose
On February 26, 2010, the
Commission adopted amendments to
Rule 201.5 In order to implement the
provisions of revised Rule 201, the
Exchange amended NYSE Amex
Equities Rule 440B (Short Sales) to (1)
establish procedures for the Exchange,
as a listing market, to determine that the
short sale price test restrictions of Rule
201 have been triggered for a covered
security, (2) establish the protocols for
the handling of short sale orders by the
Exchange, as a trading center, in the
4 17
CFR 242.201.
Securities Exchange Act Release No. 61595
(February 26, 2010), 75 FR 11232 (March 10, 2010)
(File No. S7–08–09; Amendments to Regulation
SHO) (‘‘Rule 201 Adopting Release’’). In the Rule
201 Adopting Release, the Commission also
adopted amendments to Rule 200(g) of Regulation
SHO to include a ‘‘short exempt’’ marking
requirement. 17 CFR 242.200(g).
5 See
VerDate Mar<15>2010
20:39 May 02, 2011
Jkt 223001
event the short sale price test
restrictions of Rule 201 are triggered,
including establishing what types of
short sale orders will be re-priced to
achieve a Permitted Price (as defined
and calculated in NYSE Amex Equities
Rule 440B(e)), in accordance with Rule
201, during a period when the short sale
price test restrictions of Rule 201 are in
effect (‘‘Short Sale Period’’), (3) establish
the Exchange’s procedures regarding the
execution and display of permissible
orders during a Short Sale Period, and
the execution and display of orders
marked ‘‘short exempt’’ during such a
period, (4) establish the Exchange’s
procedures regarding the permissible
execution price of short sale orders in
single-priced opening, re-opening and
closing transactions during a Short Sale
Period, and (5) provide that, during a
Short Sale Period, Exchange systems
will not execute or display a short sale
order with respect to that security at a
price that is less than or equal to the
current national best bid, except as
otherwise provided by NYSE Amex
Equities Rule 440B and consistent with
Rule 201.6
Under NYSE Amex Equities Rule
440B(c), when the Exchange is the
listing market for a covered security,
Exchange systems will determine
whether the short sale price test
restrictions of Rule 201 have been
triggered (i.e., that a covered security
has experienced a decrease in price of
10% or more from the security’s closing
price as of the end of regular trading
hours on the prior day) and will notify
the single plan processor responsible for
consolidation of information for the
covered security pursuant to Rule 603(b)
of Regulation NMS.7 Once the short sale
price test restrictions of Rule 201 are
triggered by the listing market, those
restrictions will remain in effect until
the close of trading on the next trading
day.8
If, however, the Exchange determines
that the short sale price test for a
covered security was triggered because
of a clearly erroneous execution on the
6 See Securities Exchange Act Release No. 63974
(February 25, 2010), 76 FR 11198 (March 4, 2010)
(SR–NYSEAmex–2011–09).
7 See 17 CFR 242.201(b)(3); 17 CFR 242.603(b).
See also Rule 201(a)(6) of Regulation SHO, which
defines the term ‘‘plan processor’’ to have the same
meaning as in Rule 600(b)(55) of Regulation NMS.
17 CFR 242.600(b)(55). The single plan processors
are ‘‘exclusive processors’’ as defined under Section
3(a)(22) of the Act. See 15 U.S.C. 78c(a)(22).
8 The short sale price test restrictions will remain
in effect at all times when quotation information
and the national best bid is collected, processed and
disseminated pursuant to a national market system
plan. This may extend beyond regular trading
hours. Division of Trading & Markets: Responses to
Frequently Asked Questions Concerning Rule 201
of Regulation SHO, at Q&A 2.1.
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
Exchange,9 pursuant to NYSE Amex
Equities Rule 440B(d)(1), the Exchange
may lift the short sale price test
restrictions before the Short Sale Period
ends for a security for which the
Exchange is the listing market or, for a
security listed on another market, notify
the other market of the Exchange’s
determination that the triggering
transaction was a clearly erroneous
execution.
For securities for which the Exchange
is the listing market, Exchange Rule
440B currently addresses only clearly
erroneous triggering transactions
deemed to be clearly erroneous
executions under the Exchange’s rules,
and does not address situations where
another exchange or a SRO determines,
under its respective rules, that a
triggering transaction was a clearly
erroneous execution. To address this
scenario, the Exchange proposes to
amend NYSE Amex Equities Rule
440B(d)(1) to provide that the Exchange
may also lift the short sale price test
restrictions before the Short Sale Period
ends, for covered securities for which
the Exchange is the listing market, if the
Exchange has been informed by another
exchange or a SRO that a transaction in
the covered security that occurred at the
Trigger Price 10 was a clearly erroneous
execution, as determined by that
exchange or SRO under its rules.11
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act,12 in general, and furthers the
objectives of Section 6(b)(5) of the Act,13
in particular, in that it is designed to,
among other things, prevent fraudulent
and manipulative acts and practices, to
promote just and equitable principles of
trade, and, in general, to protect
investors and the public interest. The
proposal is designed to refine the
Exchange’s written policies and
procedures reasonably designed to
9 Determination of a ‘‘clearly erroneous’’ execution
will be made in accordance with NYSE Amex
Equities Rule 128.
10 The term ‘‘Trigger Price’’ is used in NYSE Amex
Equities Rule 440B to refer to a decrease of 10% or
more in a security’s price from the security’s closing
price on the listing market as of the end of regular
trading hours on the prior day. Under NYSE Amex
Equities Rule 440B(c), the short sale price test
restrictions of Rule 201 are triggered if a transaction
in a covered security occurs at a Trigger Price.
11 The Exchange will only lift the short sale price
test restrictions before the Short Sale Period ends
under these circumstances when informed by
another exchange or a SRO that a triggering
transaction has been determined to be a clearly
erroneous execution under the rules of the
exchange or SRO, consistent with the authority of
that exchange or SRO for making such
determinations.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
E:\FR\FM\03MYN1.SGM
03MYN1
Federal Register / Vol. 76, No. 85 / Tuesday, May 3, 2011 / Notices
prevent the execution or display of a
short sale order of a covered security in
violation of the short sale price test
restrictions established in Rule 201. To
that end, the proposed rule change
expands the ability of the Exchange, as
a listing market, to lift short sale price
test restrictions to include situations
where another exchange or a SRO has
determined that a triggering transaction
was a clearly erroneous execution under
the rules of that exchange or SRO.
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.
srobinson on DSKHWCL6B1PROD with NOTICES
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 14 and Rule
19b–4(f)(6) thereunder.15 Because the
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
prior to 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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 16 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),17 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. 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 has considered the
Exchange’s request to waive the 30-day
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
15 17
20:39 May 02, 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:
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–2011–29 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–2011–29. 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
18 For the purposes only of waiving the operative
delay 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).
14 15
VerDate Mar<15>2010
operative delay, and hereby grants the
request. The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, as it
will permit the Exchange to lift Rule
201’s short sale price test restrictions, in
a covered security for which the
Exchange is the listing market, when
such restrictions were triggered by a
transaction that another exchange or a
SRO has determined to be a clearly
erroneous execution, pursuant to the
rules of that exchange or SRO.18 For this
reason, the Commission designates the
proposed rule change to be operative
upon filing.
At any time within 60 days of the
filing of such 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.
Jkt 223001
PO 00000
Frm 00100
Fmt 4703
Sfmt 4703
24947
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 website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street, NE.,
Washington, DC 20549–1090. Copies of
the filing will also 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–
NYSEAmex–2011–29 and should be
submitted on or before May 24, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011–10656 Filed 5–2–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64346; File No. SR–PHLX–
2011–54]
Self-Regulatory Organizations;
NASDAQ OMX PHLX LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Relating to
Amendments to the NASDAQ OMX
Group, Inc.’s By-Laws
April 27, 2011.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 14,
2011, NASDAQ OMX PHLX LLC
(‘‘PHLX’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II,
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.
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\03MYN1.SGM
03MYN1
]]>Agencies
[Federal Register Volume 76, Number 85 (Tuesday, May 3, 2011)]
[Notices]
[Pages 24945-24947]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10656]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64350; File No. SR-NYSEAmex-2011-29]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex
Equities Rule 440B (Short Sales) To Modify the Exchange's Procedures
for Early Termination of the Short Sale Price Test Restrictions of Rule
201 of Regulation SHO Based on a Triggering Transaction That Another
Exchange or a Self-Regulatory Organization Has Determined Was a Clearly
Erroneous Execution
April 27, 2011.
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 April 25, 2011, 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 substantially prepared by the self-
[[Page 24946]]
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 440B (Short
Sales) to modify the Exchange's procedures for early termination of the
short sale price test restrictions of Rule 201 of Regulation SHO
(``Rule 201'') \4\ under the Act based on a triggering transaction that
another exchange or a self-regulatory organization (``SRO'') has
determined was a clearly erroneous execution pursuant to the rules of
that exchange or SRO. The text of the proposed rule change is available
at the Exchange, the Commission's Public Reference Room, and https://www.nyse.com.
---------------------------------------------------------------------------
\4\ 17 CFR 242.201.
---------------------------------------------------------------------------
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
On February 26, 2010, the Commission adopted amendments to Rule
201.\5\ In order to implement the provisions of revised Rule 201, the
Exchange amended NYSE Amex Equities Rule 440B (Short Sales) to (1)
establish procedures for the Exchange, as a listing market, to
determine that the short sale price test restrictions of Rule 201 have
been triggered for a covered security, (2) establish the protocols for
the handling of short sale orders by the Exchange, as a trading center,
in the event the short sale price test restrictions of Rule 201 are
triggered, including establishing what types of short sale orders will
be re-priced to achieve a Permitted Price (as defined and calculated in
NYSE Amex Equities Rule 440B(e)), in accordance with Rule 201, during a
period when the short sale price test restrictions of Rule 201 are in
effect (``Short Sale Period''), (3) establish the Exchange's procedures
regarding the execution and display of permissible orders during a
Short Sale Period, and the execution and display of orders marked
``short exempt'' during such a period, (4) establish the Exchange's
procedures regarding the permissible execution price of short sale
orders in single-priced opening, re-opening and closing transactions
during a Short Sale Period, and (5) provide that, during a Short Sale
Period, Exchange systems will not execute or display a short sale order
with respect to that security at a price that is less than or equal to
the current national best bid, except as otherwise provided by NYSE
Amex Equities Rule 440B and consistent with Rule 201.\6\
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 61595 (February 26,
2010), 75 FR 11232 (March 10, 2010) (File No. S7-08-09; Amendments
to Regulation SHO) (``Rule 201 Adopting Release''). In the Rule 201
Adopting Release, the Commission also adopted amendments to Rule
200(g) of Regulation SHO to include a ``short exempt'' marking
requirement. 17 CFR 242.200(g).
\6\ See Securities Exchange Act Release No. 63974 (February 25,
2010), 76 FR 11198 (March 4, 2010) (SR-NYSEAmex-2011-09).
---------------------------------------------------------------------------
Under NYSE Amex Equities Rule 440B(c), when the Exchange is the
listing market for a covered security, Exchange systems will determine
whether the short sale price test restrictions of Rule 201 have been
triggered (i.e., that a covered security has experienced a decrease in
price of 10% or more from the security's closing price as of the end of
regular trading hours on the prior day) and will notify the single plan
processor responsible for consolidation of information for the covered
security pursuant to Rule 603(b) of Regulation NMS.\7\ Once the short
sale price test restrictions of Rule 201 are triggered by the listing
market, those restrictions will remain in effect until the close of
trading on the next trading day.\8\
---------------------------------------------------------------------------
\7\ See 17 CFR 242.201(b)(3); 17 CFR 242.603(b). See also Rule
201(a)(6) of Regulation SHO, which defines the term ``plan
processor'' to have the same meaning as in Rule 600(b)(55) of
Regulation NMS. 17 CFR 242.600(b)(55). The single plan processors
are ``exclusive processors'' as defined under Section 3(a)(22) of
the Act. See 15 U.S.C. 78c(a)(22).
\8\ The short sale price test restrictions will remain in effect
at all times when quotation information and the national best bid is
collected, processed and disseminated pursuant to a national market
system plan. This may extend beyond regular trading hours. Division
of Trading & Markets: Responses to Frequently Asked Questions
Concerning Rule 201 of Regulation SHO, at Q&A 2.1.
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If, however, the Exchange determines that the short sale price test
for a covered security was triggered because of a clearly erroneous
execution on the Exchange,\9\ pursuant to NYSE Amex Equities Rule
440B(d)(1), the Exchange may lift the short sale price test
restrictions before the Short Sale Period ends for a security for which
the Exchange is the listing market or, for a security listed on another
market, notify the other market of the Exchange's determination that
the triggering transaction was a clearly erroneous execution.
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\9\ Determination of a ``clearly erroneous'' execution will be
made in accordance with NYSE Amex Equities Rule 128.
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For securities for which the Exchange is the listing market,
Exchange Rule 440B currently addresses only clearly erroneous
triggering transactions deemed to be clearly erroneous executions under
the Exchange's rules, and does not address situations where another
exchange or a SRO determines, under its respective rules, that a
triggering transaction was a clearly erroneous execution. To address
this scenario, the Exchange proposes to amend NYSE Amex Equities Rule
440B(d)(1) to provide that the Exchange may also lift the short sale
price test restrictions before the Short Sale Period ends, for covered
securities for which the Exchange is the listing market, if the
Exchange has been informed by another exchange or a SRO that a
transaction in the covered security that occurred at the Trigger Price
\10\ was a clearly erroneous execution, as determined by that exchange
or SRO under its rules.\11\
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\10\ The term ``Trigger Price'' is used in NYSE Amex Equities
Rule 440B to refer to a decrease of 10% or more in a security's
price from the security's closing price on the listing market as of
the end of regular trading hours on the prior day. Under NYSE Amex
Equities Rule 440B(c), the short sale price test restrictions of
Rule 201 are triggered if a transaction in a covered security occurs
at a Trigger Price.
\11\ The Exchange will only lift the short sale price test
restrictions before the Short Sale Period ends under these
circumstances when informed by another exchange or a SRO that a
triggering transaction has been determined to be a clearly erroneous
execution under the rules of the exchange or SRO, consistent with
the authority of that exchange or SRO for making such
determinations.
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act,\12\ in general, and furthers the objectives of Section
6(b)(5) of the Act,\13\ in particular, in that it is designed to, among
other things, prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, and, in general, to
protect investors and the public interest. The proposal is designed to
refine the Exchange's written policies and procedures reasonably
designed to
[[Page 24947]]
prevent the execution or display of a short sale order of a covered
security in violation of the short sale price test restrictions
established in Rule 201. To that end, the proposed rule change expands
the ability of the Exchange, as a listing market, to lift short sale
price test restrictions to include situations where another exchange or
a SRO has determined that a triggering transaction was a clearly
erroneous execution under the rules of that exchange or SRO.
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\12\ 15 U.S.C. 78f(b).
\13\ 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
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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\
Because the 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 prior to
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\14\ 15 U.S.C. 78s(b)(3)(A)(iii).
\15\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission has considered the Exchange's request to waive the
30-day operative delay, and hereby grants the request. The Commission
believes that waiving the 30-day operative delay is consistent with the
protection of investors and the public interest, as it will permit the
Exchange to lift Rule 201's short sale price test restrictions, in a
covered security for which the Exchange is the listing market, when
such restrictions were triggered by a transaction that another exchange
or a SRO has determined to be a clearly erroneous execution, pursuant
to the rules of that exchange or SRO.\18\ For this reason, the
Commission designates the proposed rule change to be operative upon
filing.
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\18\ For the purposes only of waiving the operative delay 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 such 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-2011-29 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-2011-29. 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 website
viewing and printing in the Commission's Public Reference Room, 100 F
Street, NE., Washington, DC 20549-1090. Copies of the filing will also
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-
NYSEAmex-2011-29 and should be submitted on or before May 24, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10656 Filed 5-2-11; 8:45 am]
BILLING CODE 8011-01-P
