Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of Filing of Proposed Rule Change To Amend EDGA Rules 11.13 and 11.14, 27701-27702 [2011-11618]
Download as PDF
<![CDATA[
Federal Register / Vol. 76, No. 92 / Thursday, May 12, 2011 / Notices
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–2011–059 and should be
submitted on or before June 2, 2011.
Exchange’s Web site at https://
www.directedge.com, at the Exchange’s
principal office, and at the Public
Reference Room of the Commission.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Elizabeth M. Murphy,
Secretary.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
[FR Doc. 2011–11619 Filed 5–11–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64432; File No. SR–EDGA–
2011–15]
Self-Regulatory Organizations; EDGA
Exchange, Inc.; Notice of Filing of
Proposed Rule Change To Amend
EDGA Rules 11.13 and 11.14
May 6, 2011.
wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
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, EDGA Exchange, Inc. (‘‘EDGA’’ 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 EDGA. 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
EDGA Rules 11.13 and 11.14 to include
additional securities in the pilot by
which such rule operates. The text of
the proposed rule change is attached as
Exhibit 5 and is available on the
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Mar<15>2010
14:49 May 11, 2011
Jkt 223001
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
self-regulatory organization has
prepared summaries, set forth in
Sections A, B and C below, of the most
significant aspects of such statements.
1. Purpose
The Exchange proposes to amend
EDGA Rules 11.13 and 11.14 to include
additional securities in the pilot by
which such rule operates.
Background
EDGA Rule 11.14 allows the Exchange
to provide for uniform market-wide
trading pause standards for individual
securities in the S&P 500 Index,
securities included in the Russell 1000®
Index (‘‘Russell 1000’’), and specified
Exchange Traded Products (‘‘ETP’’) that
experience rapid price movement
(collectively known as ‘‘Circuit Breaker
Securities’’). Pursuant to Rule 11.14, the
Exchange is allowed to pause trading in
any Circuit Breaker Securities when the
primary listing market for such stock
issues a trading pause in any Circuit
Breaker Securities.
EDGA Rule 11.14 was approved by
the Commission on June 10, 2010 on a
pilot basis to end on December 10,
2010.3 The pilot was subsequently
extended until April 11, 2011.4 It was
further extended then through 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
As the Exchange noted in its filing to
adopt EDGA Rule 11.14, during the pilot
3 See Securities Exchange Act Release No. 62252
(June 10, 2010) (SR–EDGA–2010–01), 75 FR 34186
(June 16, 2010).
4 See Securities Exchange Act Release No. 63514
(December 9, 2010) (SR–EDGA–2010–23), 75 FR
78783 (December 16, 2010).
5 See Securities Exchange Act Release No. 64204
(April 6, 2011) (SR–EDGA–2011–11), 76 FR 20394
(April 12, 2011).
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
27701
period, the Exchange would continue to
assess whether additional securities
need to be added and whether the
parameters of the rule would need to be
modified to accommodate trading
characteristics of different securities.
The original pilot list of securities was
all securities included in the S&P 500®
Index (‘‘S&P 500’’). As noted in comment
letters to the original filing to adopt
EDGA Rule 11.14, concerns were raised
that including only securities in the S&P
500 in the pilot rule was too narrow. In
particular, commenters noted that
securities that experienced volatility on
May 6, 2010, including ETFs, should be
included in the pilot.
In response to these concerns, various
exchanges and national securities
associations collectively determined to
expand the list of pilot securities to
include securities in the Russell 1000
(‘‘Russell 1000’’) and specified ETPs to
the pilot beginning in September 2010.6
The Exchange believed that adding
these securities would address concerns
that the scope of the pilot may be too
narrow, while at the same time
recognizing that during the pilot period,
the markets will continue to review
whether and when to add additional
securities to the pilot and whether the
parameters of the rule should be
adjusted for different securities.
As noted above, during the pilot, the
Exchange continued to re-assess, in
consultation with other markets
whether: (i) Specific ETPs should be
added or removed from the pilot list; (ii)
the parameters for invoking a trading
pause continue to be the appropriate
standard; and (iii) the parameters
should be modified.
The Exchange has continued to assess
whether additional securities need to be
added to the pilot and whether the
parameters of Rule 11.14 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. 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. As a result, the
Exchange notes that the primary listing
markets will also apply a wider Trading
Pause Trigger Price, as defined in Rule
11.13(c)(4), to the newly added
6 See Securities Exchange Act Release No. 62884
(September 10, 2010) (SR–EDGA–2010–05), 75 FR
56618 (September 16, 2010).
E:\FR\FM\12MYN1.SGM
12MYN1
27702
Federal Register / Vol. 76, No. 92 / Thursday, May 12, 2011 / Notices
securities.7 Similarly, because leveraged
ETPs trade at a ratio against the
associated index, primary listing
markets will also apply a broader
Trading Pause Trigger Price for
leveraged ETPs. Accordingly, the
Exchange proposes to delete the last
sentence in Interpretations and Policies
.05, which defines the scope of the pilot,
as the text therein would no longer be
necessary as well as delete the reference
to ‘‘Circuit Breaker Securities’’ in Rule
11.13(c)(4) and replace it with ‘‘NMS
stock’’.
The Exchange is not proposing any
other changes to the text of Rules 11.13,
11.14, 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.
2. Statutory Basis
The statutory basis for the proposed
rule change is Section 6(b)(5) of the
Act,8 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) 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 that will promote
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
wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
The proposed rule change does not
impose any burden on competition that
is not necessary or appropriate in
furtherance of the purposes of the Act.
7 Other primary listing markets are submitting
rule filings describing these Trading Pause Trigger
Prices. The Exchange notes that the rationale for the
differentiation in Trading Pause Trigger Prices
between securities at or above $1 (30% threshold)
and securities below $1 (50% threshold) is that
lower-priced securities may tend to be more
volatile, and price movements of lower-priced
stocks equate to a higher percentage move than a
similar price change for a higher-priced stock.
8 15 U.S.C. 78f(b)(5).
9 15 U.S.C. 78k–1(a)(1).
VerDate Mar<15>2010
14:49 May 11, 2011
Jkt 223001
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has not solicited, and
does not intend to solicit, comments on
this proposed rule change. The
Exchange has not received any
unsolicited written comments from
members or other interested parties.
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.
BILLING CODE 8011–01–P
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–EDGA–2011–15 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–EDGA–2011–15. 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
Frm 00070
Fmt 4703
Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–11618 Filed 5–11–11; 8:45 am]
IV. Solicitation of Comments
PO 00000
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 EDGA.
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–EDGA–2011–15 and should
be submitted on or before June 2, 2011.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–64428; File No. SR–EDGX–
2011–14]
Self-Regulatory Organizations; EDGX
Exchange, Inc.; Notice of Filing of
Proposed Rule Change To Amend
EDGX Rules 11.13 and 11.14
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, EDGX Exchange, Inc. (‘‘EDGX’’ 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 EDGX. 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
EDGX Rules 11.13 and 11.14 to include
additional securities in the pilot by
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\12MYN1.SGM
12MYN1
]]>Agencies
[Federal Register Volume 76, Number 92 (Thursday, May 12, 2011)]
[Notices]
[Pages 27701-27702]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-11618]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64432; File No. SR-EDGA-2011-15]
Self-Regulatory Organizations; EDGA Exchange, Inc.; Notice of
Filing of Proposed Rule Change To Amend EDGA Rules 11.13 and 11.14
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, EDGA Exchange, Inc. (``EDGA'' 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 EDGA. 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 EDGA Rules 11.13 and 11.14 to
include additional securities in the pilot by which such rule operates.
The text of the proposed rule change is attached as Exhibit 5 and is
available on the Exchange's Web site at https://www.directedge.com, at
the Exchange's principal office, and at the Public Reference Room of
the Commission.
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 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 EDGA Rules 11.13 and 11.14 to
include additional securities in the pilot by which such rule operates.
Background
EDGA Rule 11.14 allows the Exchange to provide for uniform market-
wide trading pause standards for individual securities in the S&P 500
Index, securities included in the Russell 1000[supreg] Index (``Russell
1000''), and specified Exchange Traded Products (``ETP'') that
experience rapid price movement (collectively known as ``Circuit
Breaker Securities''). Pursuant to Rule 11.14, the Exchange is allowed
to pause trading in any Circuit Breaker Securities when the primary
listing market for such stock issues a trading pause in any Circuit
Breaker Securities.
EDGA Rule 11.14 was approved by the Commission on June 10, 2010 on
a pilot basis to end on December 10, 2010.\3\ The pilot was
subsequently extended until April 11, 2011.\4\ It was further extended
then through 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\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 62252 (June 10,
2010) (SR-EDGA-2010-01), 75 FR 34186 (June 16, 2010).
\4\ See Securities Exchange Act Release No. 63514 (December 9,
2010) (SR-EDGA-2010-23), 75 FR 78783 (December 16, 2010).
\5\ See Securities Exchange Act Release No. 64204 (April 6,
2011) (SR-EDGA-2011-11), 76 FR 20394 (April 12, 2011).
---------------------------------------------------------------------------
As the Exchange noted in its filing to adopt EDGA Rule 11.14,
during the pilot period, the Exchange would continue to assess whether
additional securities need to be added and whether the parameters of
the rule would need to be modified to accommodate trading
characteristics of different securities. The original pilot list of
securities was all securities included in the S&P 500[supreg] Index
(``S&P 500''). As noted in comment letters to the original filing to
adopt EDGA Rule 11.14, concerns were raised that including only
securities in the S&P 500 in the pilot rule was too narrow. In
particular, commenters noted that securities that experienced
volatility on May 6, 2010, including ETFs, should be included in the
pilot.
In response to these concerns, various exchanges and national
securities associations collectively determined to expand the list of
pilot securities to include securities in the Russell 1000 (``Russell
1000'') and specified ETPs to the pilot beginning in September 2010.\6\
The Exchange believed that adding these securities would address
concerns that the scope of the pilot may be too narrow, while at the
same time recognizing that during the pilot period, the markets will
continue to review whether and when to add additional securities to the
pilot and whether the parameters of the rule should be adjusted for
different securities.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 62884 (September 10,
2010) (SR-EDGA-2010-05), 75 FR 56618 (September 16, 2010).
---------------------------------------------------------------------------
As noted above, during the pilot, the Exchange continued to re-
assess, in consultation with other markets whether: (i) Specific ETPs
should be added or removed from the pilot list; (ii) the parameters for
invoking a trading pause continue to be the appropriate standard; and
(iii) the parameters should be modified.
The Exchange has continued to assess whether additional securities
need to be added to the pilot and whether the parameters of Rule 11.14
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. 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. As a result, the Exchange notes that the primary
listing markets will also apply a wider Trading Pause Trigger Price, as
defined in Rule 11.13(c)(4), to the newly added
[[Page 27702]]
securities.\7\ Similarly, because leveraged ETPs trade at a ratio
against the associated index, primary listing markets will also apply a
broader Trading Pause Trigger Price for leveraged ETPs. Accordingly,
the Exchange proposes to delete the last sentence in Interpretations
and Policies .05, which defines the scope of the pilot, as the text
therein would no longer be necessary as well as delete the reference to
``Circuit Breaker Securities'' in Rule 11.13(c)(4) and replace it with
``NMS stock''.
---------------------------------------------------------------------------
\7\ Other primary listing markets are submitting rule filings
describing these Trading Pause Trigger Prices. The Exchange notes
that the rationale for the differentiation in Trading Pause Trigger
Prices between securities at or above $1 (30% threshold) and
securities below $1 (50% threshold) is that lower-priced securities
may tend to be more volatile, and price movements of lower-priced
stocks equate to a higher percentage move than a similar price
change for a higher-priced stock.
---------------------------------------------------------------------------
The Exchange is not proposing any other changes to the text of
Rules 11.13, 11.14, 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.
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act,\8\ 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) \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 that
will promote uniformity across markets concerning decisions to pause
trading in a security when there are significant price movements.
---------------------------------------------------------------------------
\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 proposed rule change does not 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
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.
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 (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-EDGA-2011-15 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-EDGA-2011-15. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of EDGA. 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-EDGA-2011-15 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. 2011-11618 Filed 5-11-11; 8:45 am]
BILLING CODE 8011-01-P
