Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Related to Trading Halts, 74097-74099 [2011-30820]
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Federal Register / Vol. 76, No. 230 / Wednesday, November 30, 2011 / Notices
the proposal may become operative
immediately upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Including rights and warrants in the
pilot program which may trigger a
circuit breaker and be subject to a
trading pause, even while the
underlying security continues to trade,
provides little benefit and has the
potential to create confusion among
investors. Excluding rights and warrants
from the pilot program should minimize
investor confusion that could result
from temporary trading pauses in these
securities. For this reason, the
Commission designates the proposed
rule change as operative upon the date
of this Notice.16
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
emcdonald on DSK5VPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml);
or
• Send an email to rulecomments@sec.gov. Please include File
No. SR–ISE–2011–79 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 No.
SR–ISE–2011–79. This file number
should be included on the subject line
if email 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
16 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
VerDate Mar<15>2010
17:30 Nov 29, 2011
Jkt 226001
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File No. SR–ISE–2011–
79 and should be submitted on or before
December 21, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–30815 Filed 11–29–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65825; File No. SR–C2–
2011–036]
Self-Regulatory Organizations; C2
Options Exchange, Incorporated;
Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Related to Trading Halts
November 23, 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 November
23, 2011, the C2 Options Exchange,
Incorporated (‘‘Exchange’’ or ‘‘C2’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Exchange has designated the proposal as
a ‘‘non-controversial’’ proposed rule
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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Sfmt 4703
74097
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b-4(f)(6) thereunder.4 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 is proposing to make a
conforming amendment to C2 Rule 6.32,
Trading Halts, as it relates to individual
stock trading pauses in underlying
stocks. The text of the proposed rule
change is available on the Exchange’s
Web site (https://www.c2exchange.com/
Legal/RuleFilings.aspx), at the
Exchange’s Office of the Secretary 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
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 those
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in sections A, B, and C below, of
the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The individual stock trading pause
pilot rule was developed in consultation
with U.S. listing markets to provide for
uniform market-wide trading pause
standards for certain underlying
individual stocks that experience rapid
price movement. In conjunction with
the pilot, C2 (and other options
exchanges) adopted rules that provide
that trading in the overlying options on
an eligible stock would halt when the
primary listing market for the
underlying stock issues a trading pause.
The underlying individual stock
trading pause pilot was recently
expanded to include all NMS stocks.5
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 The pilot list of stocks originally included all
stocks in the S&P 500 Index, but it has been
expanded over time to include all NMS stocks. See,
e.g., Securities Exchange Act Release Nos. 62884
(September 10, 2010), 75 FR 56618 (September 16,
2010)(SR–CBOE–2010–065)(order approving
4 17
Continued
E:\FR\FM\30NON1.SGM
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74098
Federal Register / Vol. 76, No. 230 / Wednesday, November 30, 2011 / Notices
However, it is currently being revised to
exclude all rights and warrants.6 In light
of the revision to the underlying
individual stock trading pause pilot, C2
is proposing a conforming amendment
to its Rule 6.32. Specifically, the
Exchange is proposing to replace a
reference to ‘‘an underlying NMS stock’’
with a conforming reference to
‘‘underlying eligible NMS stock’’ and to
define the term ‘‘eligible NMS stocks’’ to
mean NMS stocks, other than rights and
warrants.
2. Statutory Basis
The statutory basis for the proposed
rule change is Section 6(b)(5) of the
Act,7 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) 8 of the
Act in that it seeks to assure fair
competition among brokers and dealers
and among exchange markets. The
Exchange believes that the proposed
rule change meets these requirements
because it conforms the rule text to
reflect the recent modification to
underlying individual stock trading
pause pilot to exclude all rights and
warrants, which pilot promotes
uniformity across markets concerning
decisions to pause trading in a stock
when there are significant price
movements.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will 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
9 15
emcdonald on DSK5VPTVN1PROD with NOTICES
expansion of the individual stock trading pause
pilot to include all stocks in the Russell 1000 index
and a pilot list of Exchange Traded Products) and
64735 (June 23, 2011), 76 FR 38243 (June 29,
2011)(SR–CBOE–2011–049)(order approving further
expansion of the individual stock trading pause
pilot to include all NMS stocks effective August 8,
2011).
6 See, e.g., SR–CBOE–2011–111.
7 15 U.S.C. 78f(b)(5).
8 15 U.S.C. 78k–1(a)(1).
17:30 Nov 29, 2011
Jkt 226001
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
11 15 U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied this requirement.
13 17 CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6)(iii).
15 For purposes only of waiving the 30-day
operative delay, the Commission has also
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
10 17
The Exchange neither solicited nor
received comments on the proposal.
VerDate Mar<15>2010
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 9 and Rule
19b–4(f)(6) thereunder.10 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 11 and Rule 19b-4(f)(6)(iii)
thereunder.12
A proposed rule change filed under
Rule 19b–4(f)(6) 13 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii) 14 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 believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest.
Including rights and warrants in the
pilot program which may trigger a
circuit breaker and be subject to a
trading pause, even while the
underlying security continues to trade,
provides little benefit and has the
potential to create confusion among
investors. Excluding rights and warrants
from the pilot program should minimize
investor confusion that could result
from temporary trading pauses in these
securities. For this reason, the
Commission designates the proposed
rule change as operative upon the date
of this Notice.15
PO 00000
Frm 00060
Fmt 4703
Sfmt 4703
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
No. SR–C2–2011–036 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 No.
SR–C2–2011–036. This file number
should be included on the subject line
if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml ). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of 10
a.m. and 3 p.m. Copies of such filing
also will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
E:\FR\FM\30NON1.SGM
30NON1
Federal Register / Vol. 76, No. 230 / Wednesday, November 30, 2011 / Notices
available publicly. All submissions
should refer to File No. SR–C2–2011–
036 and should be submitted on or
before December 21, 2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–30820 Filed 11–29–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65812; File No. SR–
NYSEArca–2011–87]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending NYSE Arca
Equities Rule 7.11 to Exclude All
Rights and Warrants From the Single
Stock Circuit Breaker Under the Rule
November 23, 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
November 17, 2011, NYSE Arca, Inc.
(the ‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
emcdonald on DSK5VPTVN1PROD with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Arca Equities Rule 7.11 to
exclude all rights and warrants from the
single stock circuit breaker under the
rule. The text of the proposed rule
change is available at the Exchange, the
Commission’s Public Reference Room,
https://www.nyse.com, and https://
www.sec.gov.
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
16 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
VerDate Mar<15>2010
17:30 Nov 29, 2011
Jkt 226001
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
NYSE Arca Equities Rule 7.11 to
exclude all rights and warrants from the
single stock circuit breaker under the
rule. The Commission approved NYSE
Arca Equities Rule 7.11 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’’) (‘‘Pause Pilot’’).4 The
Exchange noted in its filing to adopt
NYSE Arca Equities Rule 7.11 that
during the Pause Pilot period it would
continue to assess whether additional
securities need to be added and whether
the parameters of NYSE Arca Equities
Rule 7.11 would need to be modified to
accommodate trading characteristics of
different securities. The Exchange
subsequently received approval to add
to the Pause Pilot the securities
included in the Russell 1000® Index
(‘‘Russell 1000’’) and a specified list of
Exchange Traded Products (‘‘ETPs’’).5
4 The Commission approved the 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).
5 The Commission approved the addition to the
Pause Pilot of the securities included in the Russell
1000 and 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 and ETPs to
extend the operation of the Pause Pilot, which was
set to expire on December 10, 2010, until April 11,
2011. See Securities Exchange Act Release No.
63496 (December 9, 2010), 75 FR 78285 (December
15, 2010) (NYSEArca–2010–114). The Exchange
submitted a proposed rule change to further extend
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74099
On June 23, 2011, the Commission
approved proposed rule changes of the
Exchanges to amend certain of their
respective rules to expand the Pause
Pilot to include all remaining NMS
stocks (‘‘Phase III Securities’’), which
included rights and warrants.6 Unlike
the original Pause Pilot securities,
amended NYSE Arca Equities Rule 7.11
applies wider percentage price moves to
the Phase III Securities before a trading
pause is triggered.7 The changes to
NYSE Arca Equities Rule 7.11 became
effective on August 8, 2011.
The nature of the trading pauses
triggered since adoption of the Pause
Pilot has been analyzed and over 25%
of such pauses have occurred in rights
and warrants. Further, exchanges have
experienced a significant increase in
trading pauses involving rights and
warrants since the implementation of
the Phase III Securities, with such
pauses representing as much as 52%
[sic] all trading pauses occurring
through the end of August 2011 on one
exchange. Rights and warrants trade on
equity exchanges, but are closely related
to call options. Rights and warrants
entitle owners to purchase shares of
stock at predetermined prices subject to
various timing and other conditions.
Like options, the price of rights and
warrants are affected by the price of the
underlying stock as well as other
factors, particularly the volatility of the
stock. As a consequence, the prices of
rights and warrants may move more
dramatically than the prices of the
underlying stocks even when the rights
and warrants (and the underlying stock)
are trading in an orderly manner. This
difference in trading behavior may
result in a scenario whereby the rights
and warrants trigger the circuit breaker
under NYSE Arca Equities Rule 7.11
and are subject to a trading pause, even
while the underlying stock continues to
trade. This can be particularly true of
rights and warrants that have low
prices. Accordingly, the Exchange is
proposing to exclude rights and
the Pause Pilot until the earlier of January 31, 2012
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. 65088 (August 10, 2011),
76 FR 50793 (August 16, 2011) (NYSEArca–2011–
55).
6 See Securities Exchange Act Release No. 64735
(June 23, 2011), 76 FR 38243 (June 29, 2011)
(NYSEArca–2011–26, et al.).
7 Under amended NYSE Arca Equities Rule 7.11,
a pause is triggered by a 30% or more price move
in a Phase III Security priced at $1 or higher, and
by a 50% or more price move to such a security
priced less than $1. The price of a security is 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.
E:\FR\FM\30NON1.SGM
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]]>Agencies
[Federal Register Volume 76, Number 230 (Wednesday, November 30, 2011)]
[Notices]
[Pages 74097-74099]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-30820]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65825; File No. SR-C2-2011-036]
Self-Regulatory Organizations; C2 Options Exchange, Incorporated;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Related to Trading Halts
November 23, 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 November 23, 2011, the C2 Options Exchange, Incorporated
(``Exchange'' or ``C2'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II below, which Items have been prepared by the
Exchange. The Exchange has designated the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to make a conforming amendment to C2 Rule
6.32, Trading Halts, as it relates to individual stock trading pauses
in underlying stocks. The text of the proposed rule change is available
on the Exchange's Web site (https://www.c2exchange.com/Legal/RuleFilings.aspx), at the Exchange's Office of the Secretary 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 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 those statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The individual stock trading pause pilot rule was developed in
consultation with U.S. listing markets to provide for uniform market-
wide trading pause standards for certain underlying individual stocks
that experience rapid price movement. In conjunction with the pilot, C2
(and other options exchanges) adopted rules that provide that trading
in the overlying options on an eligible stock would halt when the
primary listing market for the underlying stock issues a trading pause.
The underlying individual stock trading pause pilot was recently
expanded to include all NMS stocks.\5\
[[Page 74098]]
However, it is currently being revised to exclude all rights and
warrants.\6\ In light of the revision to the underlying individual
stock trading pause pilot, C2 is proposing a conforming amendment to
its Rule 6.32. Specifically, the Exchange is proposing to replace a
reference to ``an underlying NMS stock'' with a conforming reference to
``underlying eligible NMS stock'' and to define the term ``eligible NMS
stocks'' to mean NMS stocks, other than rights and warrants.
---------------------------------------------------------------------------
\5\ The pilot list of stocks originally included all stocks in
the S&P 500 Index, but it has been expanded over time to include all
NMS stocks. See, e.g., Securities Exchange Act Release Nos. 62884
(September 10, 2010), 75 FR 56618 (September 16, 2010)(SR-CBOE-2010-
065)(order approving expansion of the individual stock trading pause
pilot to include all stocks in the Russell 1000 index and a pilot
list of Exchange Traded Products) and 64735 (June 23, 2011), 76 FR
38243 (June 29, 2011)(SR-CBOE-2011-049)(order approving further
expansion of the individual stock trading pause pilot to include all
NMS stocks effective August 8, 2011).
\6\ See, e.g., SR-CBOE-2011-111.
---------------------------------------------------------------------------
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act,\7\ 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) \8\ of the Act in that it seeks to assure fair
competition among brokers and dealers and among exchange markets. The
Exchange believes that the proposed rule change meets these
requirements because it conforms the rule text to reflect the recent
modification to underlying individual stock trading pause pilot to
exclude all rights and warrants, which pilot promotes uniformity across
markets concerning decisions to pause trading in a stock when there are
significant price movements.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b)(5).
\8\ 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
The Exchange neither solicited nor received comments on the
proposal.
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 \9\ and Rule 19b-4(f)(6) thereunder.\10\
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 \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii) \14\ 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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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Including rights and warrants in the pilot program which may trigger a
circuit breaker and be subject to a trading pause, even while the
underlying security continues to trade, provides little benefit and has
the potential to create confusion among investors. Excluding rights and
warrants from the pilot program should minimize investor confusion that
could result from temporary trading pauses in these securities. For
this reason, the Commission designates the proposed rule change as
operative upon the date of this Notice.\15\
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\15\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if 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 email to rule-comments@sec.gov. Please include
File No. SR-C2-2011-036 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 No. SR-C2-2011-036. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml
). Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for Web site viewing and printing in
the Commission's Public Reference Room, 100 F Street NE., Washington,
DC 20549, on official business days between the hours of 10 a.m. and 3
p.m. Copies of such filing also will be available for inspection and
copying at the principal office of the Exchange. All comments received
will be posted without change; the Commission does not edit personal
identifying information from submissions. You should submit only
information that you wish to make
[[Page 74099]]
available publicly. All submissions should refer to File No. SR-C2-
2011-036 and should be submitted on or before December 21, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-30820 Filed 11-29-11; 8:45 am]
BILLING CODE 8011-01-P
