Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Rule 80C To Include Additional Securities in the Pilot by Which Such Rule Operates and Amending Rule 104 To Simplify Certain Aspects of the Text While Also Conforming Certain of the Percentages Thereunder to the Proposed Changes to Rule 80C, 27675-27677 [2011-11611]

Download as PDF Federal Register / Vol. 76, No. 92 / Thursday, May 12, 2011 / Notices that the requested relief satisfies the section 6(c) standard. Applicants contend that, because the SBIC Subsidiary would be entitled to rely on section 18(k) if it were a BDC itself, there is no policy reason to deny the benefit of that exemption to the Company. Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: The Company shall not issue or sell any senior security, and the Company shall not cause or permit PennantPark SBIC or any other SBIC Subsidiary to issue or sell any senior security of which the Company, PennantPark SBIC or any other SBIC Subsidiary is the issuer except to the extent permitted by section 18 (as modified for BDCs by section 61) of the Act; provided that, immediately after the issuance or sale by any of the Company, PennantPark SBIC or any other SBIC Subsidiary of any such senior security, the Company, individually and on a consolidated basis, shall have the asset coverage required by section 18(a) of the Act (as modified by section 61(a)). In determining whether the Company has the asset coverage on a consolidated basis required by section 18(a) of the Act (as modified by section 61(a)), any senior securities representing indebtedness of PennantPark SBIC or another SBIC Subsidiary shall not be considered senior securities and, for purposes of the definition of ‘‘asset coverage’’ in section 18(h), shall be treated as indebtedness not represented by senior securities. For the Commission, by the Division of Investment Management, pursuant to delegated authority. Elizabeth M. Murphy, Secretary. [FR Doc. 2011–11622 Filed 5–11–11; 8:45 am] wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64420; File No. SR–NYSE– 2011–21] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Rule 80C To Include Additional Securities in the Pilot by Which Such Rule Operates and Amending Rule 104 To Simplify Certain Aspects of the Text While Also Conforming Certain of the Percentages Thereunder to the Proposed Changes to Rule 80C May 6, 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 May 4, 2011, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by NYSE. 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 Rule 80C to include additional securities in the pilot by which such rule operates and amend Rule 104 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and http:// 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. 1 15 2 17 VerDate Mar<15>2010 14:49 May 11, 2011 Jkt 223001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00043 Fmt 4703 27675 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 80C to include additional securities in the pilot by which such rule operates and amend Rule 104 to simplify certain aspects of the text while also conforming certain of the percentages thereunder to the proposed changes to Rule 80C. The Commission approved Rule 80C on a pilot basis on June 10, 2010 to provide for trading pauses in individual securities due to extraordinary market volatility (‘‘Trading Pause’’) in all securities included within the S&P 500® Index (‘‘S&P 500’’) (‘‘Trading Pause Pilot’’ or ‘‘Pilot’’).3 The Exchange noted in its filing to adopt Rule 80C that during the Pilot period it would continue to assess whether additional securities need to be added and whether the parameters of Rule 80C would need to be modified to accommodate trading characteristics of different securities. The Exchange subsequently received approval to add to the Pilot the securities included in the Russell 1000® Index (‘‘Russell 1000’’).4 3 The Commission approved the Trading Pause Pilot for all equities exchanges and FINRA. See Securities Exchange Act Release No. 62252 (June 10, 2010), 75 FR 34186 (June 16, 2010) (File Nos. SR–BATS–2010–014; SR–EDGA–2010–01; SR– EDGX–2010–01; SR–BX–2010–037; SR–ISE–2010– 48; SR–NYSE–2010–39; SR–NYSEAmex–2010–46; SR–NYSEArca–2010–41; SR–NASDAQ–2010–061; SR–CHX–2010–10; SR–NSX–2010–05; and SR– CBOE–2010–047) and Securities Exchange Act Release No. 62251 (June 10, 2010), 75 FR 34183 (June 16, 2010) (SR–FINRA–2010–025). The Exchange submitted a proposed rule change shortly after the initial Commission approval order to clarify the procedures applicable to reopening. See Securities Exchange Act Release No. 62284 (June 11, 2010), 75 FR 34498 (June 17, 2010) (SR–NYSE– 2010–45). 4 The Commission approved the addition to the Trading Pause Pilot of the securities included in the Russell 1000 and a specified list of Exchange Traded Products (‘‘ETPs’’), where applicable, for all equities exchanges and FINRA. See Securities Exchange Act Release No. 62884 (September 10, 2010), 75 FR 56618 (September 16, 2010) (File Nos. SR–BATS–2010–018; SR–BX–2010–044; SR–CBOE– 2010–065; SR–CHX–2010–14; SR–EDGA–2010–05; SR–EDGX–2010–05; SR–ISE–2010–66; SR– NASDAQ–2010–079; SR–NYSE–2010–49; SR– NYSEAmex–2010–63; SR–NYSEArca–2010–61; and SR–NSX–2010–08 and Securities Exchange Act Release No. 62883 (September 10, 2010), 75 FR 56608 (September 16, 2010) (SR–FINRA–2010–033). The Exchange submitted a proposed rule change shortly after the addition of the Russell 1000 securities to extend the operation of the Pilot, which was set to expire on December 10, 2010, until April 11, 2011. See Securities Exchange Act Release No. 63500 (December 9, 2010), 75 FR 78309 (December 15, 2010) (SR–NYSE–2010–81). The Pilot is currently set to expire on the earlier of August 11, 2011 or the date on which a limit up/ Continued Sfmt 4703 E:\FR\FM\12MYN1.SGM 12MYN1 wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 27676 Federal Register / Vol. 76, No. 92 / Thursday, May 12, 2011 / Notices The Exchange has continued to assess whether additional securities need to be added to the Pilot and whether the parameters of Rule 80C need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange proposes to include all NMS stocks within the Pilot that are not already included therein, but to apply a wider Threshold Move percentage to the newly added securities. Accordingly, the Exchange proposes to delete Supplementary Material .10 to Rule 80C, as the text therein would no longer be necessary. The Exchange proposes that the Threshold Move required to trigger a Trading Pause for the proposed new securities be 30% or more for such securities priced at $1 or higher and 50% or more for such securities priced less than $1.5 The Exchange believes that these percentages are commensurate with the characteristics shared by the proposed new securities within these price ranges and would promote the objectives of the Trading Pause Pilot to reduce the negative impacts of unanticipated price movements in a security. In particular, the proposed additional stocks are those not currently included in the S&P 500, Russell 1000, or specified ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volumes. Accordingly, the Exchange believes that broader Threshold Move percentages would be appropriate. Similarly, because leveraged ETPs trade at a ratio against the associated index, a broader Threshold Move percentage would also be appropriate for leveraged ETPs. In addition, the Exchange believes that a 50% threshold move is appropriate for securities trading under a dollar to reflect that price movements of such lower-priced stocks equate to a higher percentage move than a similar price change would be for a higher-priced stock. The Exchange proposes to include new subsections 80C(a)(i), (ii) and (iii) to reflect the distinction between the applicable Threshold Move percentages for current Pilot securities and the proposed new securities to be included within the Pilot.6 The Exchange is not proposing any other changes to the text of Rule 80C or the operation of the Pilot, and will continue to assess whether the parameters for invoking a Trading Pause continue to be appropriate and whether the parameters should be modified. The proposed changes to the Pilot, if approved, would require that the text of Rule 104(a)(1)(B)(iii) and (iv), which pertains to the pricing obligations that Designated Market Makers (‘‘DMMs’’) are required to adhere to, be amended to correct the cross-references therein to Rule 80C and the Threshold Move thereunder. Specifically, the Exchange proposes to remove any text from Rule 104(a)(1)(B)(iii) and (iv) addressing NMS stocks that are not subject to the Pilot because no such securities would exist and such text would therefore be unnecessary. The Exchange also proposes to simplify Rule 104(a)(1)(B)(iii) and (iv) by explicitly stating the percentages that are applicable thereunder and the times during the trading day when Rule 80C is not in effect. The Exchange notes that part of this proposed change would be substantive, in that the percentages under Rule 104(a)(1)(B)(iii) and (iv) would decrease slightly for the proposed new securities priced at $1 or greater. The Exchange believes that this proposed substantive change would not have a significant impact on DMM pricing obligations and is reasonable because it would ensure that the designated quoting percentages in Rule 104(a)(1)(B) are within a narrower range than the percentages necessary to trigger a Trading Pause. limit down mechanism to address extraordinary market volatility, if adopted, applies. See Securities Exchange Act Release No. 64254 (April 7, 2011), 76 FR 20767 (April 13, 2011) (SR–NYSE–2011–16). 5 Under the proposed rule change, the price of a security would be based on the closing price on the previous trading day, or, if no closing price exists, the last sale reported to the Consolidated Tape on the previous trading day. 6 The Exchange is not proposing a change to the Threshold Move percentage applicable to securities currently included within the current Pilot. However, the changes proposed herein would require that certain rule text pertaining to the Threshold Move for the existing Pilot securities be reorganized within Rule 80C. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 14:49 May 11, 2011 Jkt 223001 2. Statutory Basis The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’),7 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, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The proposed rule change also is designed to PO 00000 Frm 00044 Fmt 4703 Sfmt 4703 support the principles of Section 11A(a)(1) 9 of the Act in that it seeks to ensure fair competition among brokers and dealers and among exchange markets. The Exchange believes that the proposed rule meets these requirements because it expands the scope of the Pilot to cover all NMS stocks while adjusting the parameters of the rule for different securities in a manner that will promote uniformity across markets concerning decisions to pause trading in a security when there are significant price movements. Additionally, the proposed changes would ensure that the designated quoting percentages in Rule 104(a)(1)(B) are within a narrower range than the percentages necessary to trigger a Trading Pause. 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 Within 45 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve or disapprove such proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be 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 (http://www.sec.gov/ rules/sro.shtml); or 9 15 U.S.C. 78k–1(a)(1). E:\FR\FM\12MYN1.SGM 12MYN1 Federal Register / Vol. 76, No. 92 / Thursday, May 12, 2011 / Notices • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2011–21 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–2011–21. 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 (http://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 NYSE. 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–NYSE–2011–21 and should be submitted on or before June 2, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1 Elizabeth M. Murphy, Secretary. [FR Doc. 2011–11611 Filed 5–11–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64423; File No. SR–ISE– 2011–28] Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing of Proposed Rule Change by International Securities Exchange to Amend ISE Rule 2102 May 6, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on May 5, 2011, the International Securities Exchange, LLC (the ‘‘Exchange’’ or the ‘‘ISE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which items have been prepared by the selfregulatory 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 Rule 2102 (Hours of Business) to expand the applicability of Trading Pauses to cover all NMS Stocks. The text of the proposed rule change is available on the Exchange’s Internet Web site at http://www.ise.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the 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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend ISE Rule 2102 to expand the applicability of 1 15 10 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 14:49 May 11, 2011 2 17 Jkt 223001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00045 Fmt 4703 Sfmt 4703 27677 Trading Pauses to cover all NMS Stocks.3 Initial amendments to ISE Rule 2102 to allow the Exchange to pause trading in an individual stock when the primary listing market for such stock issues a trading pause were approved by the Commission on June 10, 2010 on a pilot basis.4 The Exchange noted in its filing to adopt the initial amendments to Rule 2102 that during the pilot period it would continue to assess whether additional securities need to be added and whether the parameters of the trading pause would need to be modified to accommodate trading characteristics of different securities. On September 10, 2010, ISE Rule 2102 was amended again to expand the pilot rule to apply to the Russell 1000® Index and other specified exchange traded products.5 The Exchange has continued to assess whether additional securities need to be added to the pilot and whether the parameters of Rule 2102 need to be modified to accommodate trading characteristics of different securities. In consultation with other markets and the staff of the Commission, the Exchange now proposes to include all NMS Stocks within the pilot that are not already included therein and to apply a wider Threshold Move percentage to the newly added securities. In particular, the proposed additional stocks are those not currently included in the S&P 500 Index, Russell 1000 Index, or specified ETPs, and therefore are more likely to be less liquid securities or securities with lower trading volumes. Accordingly, the Exchange believes that broader Threshold Move percentages would be appropriate. Similarly, because leveraged ETPs trade at a ratio against the associated index, a broader Threshold Move percentage would also be appropriate for leveraged ETPs. The Exchange proposes that the Threshold Move required to trigger a Trading Pause for the proposed new securities be 30% or more for such securities priced at $1 or higher and 50% or more 3 See ISE Rule 2100(c)(13). Securities Exchange Act Release Nos. 62252 (June 10, 2010), 75 FR 34186 (June 16, 2010) (SR– ISE–2010–48) (Approving the pilot with an expiration date of December 10, 2010); 63506 (December 9, 2010), 75 FR 78301 (December 15, 2010) (SR–ISE–2010–117) (Extending the date by which the pilot rule will expire to April 11, 2011); 64193 (April 5, 2011), 76 FR 20062 (April 11, 2011) (SR–ISE–2011–17) (Extending the date by which the pilot rule will expire to the earlier of August 11, 2011 or the date on which a limit up/limit down mechanism to address extraordinary market volatility, if adopted, applies). 5 See Securities Exchange Act Release No. 62884 (September 10, 2010), 75 FR 56618 (September 16, 2010) (SR–ISE–2010–66). 4 See E:\FR\FM\12MYN1.SGM 12MYN1

Agencies

[Federal Register Volume 76, Number 92 (Thursday, May 12, 2011)]
[Notices]
[Pages 27675-27677]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11611]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64420; File No. SR-NYSE-2011-21]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change Amending Rule 80C To Include 
Additional Securities in the Pilot by Which Such Rule Operates and 
Amending Rule 104 To Simplify Certain Aspects of the Text While Also 
Conforming Certain of the Percentages Thereunder to the Proposed 
Changes to Rule 80C

May 6, 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 May 4, 2011, New York Stock Exchange LLC (``NYSE'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by NYSE. 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 amend Rule 80C to include additional 
securities in the pilot by which such rule operates and amend Rule 104 
to simplify certain aspects of the text while also conforming certain 
of the percentages thereunder to the proposed changes to Rule 80C. The 
text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, and http://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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 80C to include additional 
securities in the pilot by which such rule operates and amend Rule 104 
to simplify certain aspects of the text while also conforming certain 
of the percentages thereunder to the proposed changes to Rule 80C.
    The Commission approved Rule 80C on a pilot basis on June 10, 2010 
to provide for trading pauses in individual securities due to 
extraordinary market volatility (``Trading Pause'') in all securities 
included within the S&P 500[reg] Index (``S&P 500'') (``Trading Pause 
Pilot'' or ``Pilot'').\3\ The Exchange noted in its filing to adopt 
Rule 80C that during the Pilot period it would continue to assess 
whether additional securities need to be added and whether the 
parameters of Rule 80C would need to be modified to accommodate trading 
characteristics of different securities. The Exchange subsequently 
received approval to add to the Pilot the securities included in the 
Russell 1000[supreg] Index (``Russell 1000'').\4\
---------------------------------------------------------------------------

    \3\ The Commission approved the Trading Pause Pilot for all 
equities exchanges and FINRA. See Securities Exchange Act Release 
No. 62252 (June 10, 2010), 75 FR 34186 (June 16, 2010) (File Nos. 
SR-BATS-2010-014; SR-EDGA-2010-01; SR-EDGX-2010-01; SR-BX-2010-037; 
SR-ISE-2010-48; SR-NYSE-2010-39; SR-NYSEAmex-2010-46; SR-NYSEArca-
2010-41; SR-NASDAQ-2010-061; SR-CHX-2010-10; SR-NSX-2010-05; and SR-
CBOE-2010-047) and Securities Exchange Act Release No. 62251 (June 
10, 2010), 75 FR 34183 (June 16, 2010) (SR-FINRA-2010-025). The 
Exchange submitted a proposed rule change shortly after the initial 
Commission approval order to clarify the procedures applicable to 
reopening. See Securities Exchange Act Release No. 62284 (June 11, 
2010), 75 FR 34498 (June 17, 2010) (SR-NYSE-2010-45).
    \4\ The Commission approved the addition to the Trading Pause 
Pilot of the securities included in the Russell 1000 and a specified 
list of Exchange Traded Products (``ETPs''), where applicable, for 
all equities exchanges and FINRA. See Securities Exchange Act 
Release No. 62884 (September 10, 2010), 75 FR 56618 (September 16, 
2010) (File Nos. SR-BATS-2010-018; SR-BX-2010-044; SR-CBOE-2010-065; 
SR-CHX-2010-14; SR-EDGA-2010-05; SR-EDGX-2010-05; SR-ISE-2010-66; 
SR-NASDAQ-2010-079; SR-NYSE-2010-49; SR-NYSEAmex-2010-63; SR-
NYSEArca-2010-61; and SR-NSX-2010-08 and Securities Exchange Act 
Release No. 62883 (September 10, 2010), 75 FR 56608 (September 16, 
2010) (SR-FINRA-2010-033). The Exchange submitted a proposed rule 
change shortly after the addition of the Russell 1000 securities to 
extend the operation of the Pilot, which was set to expire on 
December 10, 2010, until April 11, 2011. See Securities Exchange Act 
Release No. 63500 (December 9, 2010), 75 FR 78309 (December 15, 
2010) (SR-NYSE-2010-81). The Pilot is currently set to expire on the 
earlier of August 11, 2011 or the date on which a limit up/limit 
down mechanism to address extraordinary market volatility, if 
adopted, applies. See Securities Exchange Act Release No. 64254 
(April 7, 2011), 76 FR 20767 (April 13, 2011) (SR-NYSE-2011-16).

---------------------------------------------------------------------------

[[Page 27676]]

    The Exchange has continued to assess whether additional securities 
need to be added to the Pilot and whether the parameters of Rule 80C 
need to be modified to accommodate trading characteristics of different 
securities. In consultation with other markets and the staff of the 
Commission, the Exchange proposes to include all NMS stocks within the 
Pilot that are not already included therein, but to apply a wider 
Threshold Move percentage to the newly added securities. Accordingly, 
the Exchange proposes to delete Supplementary Material .10 to Rule 80C, 
as the text therein would no longer be necessary.
    The Exchange proposes that the Threshold Move required to trigger a 
Trading Pause for the proposed new securities be 30% or more for such 
securities priced at $1 or higher and 50% or more for such securities 
priced less than $1.\5\ The Exchange believes that these percentages 
are commensurate with the characteristics shared by the proposed new 
securities within these price ranges and would promote the objectives 
of the Trading Pause Pilot to reduce the negative impacts of 
unanticipated price movements in a security. In particular, the 
proposed additional stocks are those not currently included in the S&P 
500, Russell 1000, or specified ETPs, and therefore are more likely to 
be less liquid securities or securities with lower trading volumes. 
Accordingly, the Exchange believes that broader Threshold Move 
percentages would be appropriate. Similarly, because leveraged ETPs 
trade at a ratio against the associated index, a broader Threshold Move 
percentage would also be appropriate for leveraged ETPs. In addition, 
the Exchange believes that a 50% threshold move is appropriate for 
securities trading under a dollar to reflect that price movements of 
such lower-priced stocks equate to a higher percentage move than a 
similar price change would be for a higher-priced stock.
---------------------------------------------------------------------------

    \5\ Under the proposed rule change, the price of a security 
would be based on the closing price on the previous trading day, or, 
if no closing price exists, the last sale reported to the 
Consolidated Tape on the previous trading day.
---------------------------------------------------------------------------

    The Exchange proposes to include new subsections 80C(a)(i), (ii) 
and (iii) to reflect the distinction between the applicable Threshold 
Move percentages for current Pilot securities and the proposed new 
securities to be included within the Pilot.\6\ The Exchange is not 
proposing any other changes to the text of Rule 80C or the operation of 
the Pilot, and will continue to assess whether the parameters for 
invoking a Trading Pause continue to be appropriate and whether the 
parameters should be modified.
---------------------------------------------------------------------------

    \6\ The Exchange is not proposing a change to the Threshold Move 
percentage applicable to securities currently included within the 
current Pilot. However, the changes proposed herein would require 
that certain rule text pertaining to the Threshold Move for the 
existing Pilot securities be reorganized within Rule 80C.
---------------------------------------------------------------------------

    The proposed changes to the Pilot, if approved, would require that 
the text of Rule 104(a)(1)(B)(iii) and (iv), which pertains to the 
pricing obligations that Designated Market Makers (``DMMs'') are 
required to adhere to, be amended to correct the cross-references 
therein to Rule 80C and the Threshold Move thereunder. Specifically, 
the Exchange proposes to remove any text from Rule 104(a)(1)(B)(iii) 
and (iv) addressing NMS stocks that are not subject to the Pilot 
because no such securities would exist and such text would therefore be 
unnecessary. The Exchange also proposes to simplify Rule 
104(a)(1)(B)(iii) and (iv) by explicitly stating the percentages that 
are applicable thereunder and the times during the trading day when 
Rule 80C is not in effect. The Exchange notes that part of this 
proposed change would be substantive, in that the percentages under 
Rule 104(a)(1)(B)(iii) and (iv) would decrease slightly for the 
proposed new securities priced at $1 or greater. The Exchange believes 
that this proposed substantive change would not have a significant 
impact on DMM pricing obligations and is reasonable because it would 
ensure that the designated quoting percentages in Rule 104(a)(1)(B) are 
within a narrower range than the percentages necessary to trigger a 
Trading Pause.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\7\ 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, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system. 
The proposed rule change also is designed to support the principles of 
Section 11A(a)(1) \9\ of the Act in that it seeks to ensure fair 
competition among brokers and dealers and among exchange markets. The 
Exchange believes that the proposed rule meets these requirements 
because it expands the scope of the Pilot to cover all NMS stocks while 
adjusting the parameters of the rule for different securities in a 
manner that will promote uniformity across markets concerning decisions 
to pause trading in a security when there are significant price 
movements. Additionally, the proposed changes would ensure that the 
designated quoting percentages in Rule 104(a)(1)(B) are within a 
narrower range than the percentages necessary to trigger a Trading 
Pause.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be 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 (http://www.sec.gov/rules/sro.shtml); or

[[Page 27677]]

     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2011-21 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-2011-21. 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 (http://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 NYSE. 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-NYSE-2011-21 and should be 
submitted on or before June 2, 2011.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
---------------------------------------------------------------------------
pursuant to delegated authority.\10\

Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-11611 Filed 5-11-11; 8:45 am]
BILLING CODE 8011-01-P