Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period of Amendments to the Clearly Erroneous Rule, 46541-46543 [2012-19000]
Download as PDF
<![CDATA[
Federal Register / Vol. 77, No. 150 / Friday, August 3, 2012 / Notices
believes would incentivize ETP Holders
to submit Retail Orders to the Exchange
in order to qualify for the applicable
credit of $0.0032 per share. The
Exchange notes that certain other
existing pricing Tiers within the Fee
Schedule make credits available to ETP
Holders that are also based on the ETP
Holder’s level of activity as a percentage
of CADV. These existing percentage
thresholds, depending on other related
factors and the level of the
corresponding credits, are both higher
and lower than the 0.40% proposed
herein.6 Moreover, like existing pricing
on the Exchange that is tied to ETP
Holder volume levels as a percentage of
CADV, the proposed Retail Order Tier
credit is equitable and not unfairly
discriminatory because it would be
available for all ETP Holders, including
Market Makers, on an equal and nondiscriminatory basis. Furthermore, the
Exchange notes that the proposed Retail
Order Tier would be optional for ETP
holders.
The Exchange believes that excluding
an ETP Holder that qualifies for the
Retail Order Tier from the Tape A, Tape
B and Tape C Step Up Tier rates and the
Tape C Step Up Tier 2 rate is
reasonable, equitable and not unfairly
discriminatory because such orders
would already receive a higher credit for
such executions that provide liquidity
on the Exchange.
Finally, the Exchange notes that it
operates in a highly competitive market
in which market participants can
readily favor competing venues. In such
an environment, the Exchange must
continually review, and consider
adjusting, its fees and credits to remain
competitive with other exchanges. For
the reasons described above, the
Exchange believes that the proposed
rule change reflects this competitive
environment.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
TKELLEY on DSK3SPTVN1PROD with NOTICES
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.
6 For example, Investor Tier 1 requires, in part,
that an ETP Holder provide liquidity of 0.45% or
more of CADV in order to qualify for a credit of
$0.0033 per share for orders that provide liquidity
on the Exchange. Similarly, Investor Tier 2 requires,
in part, that an ETP Holder provide liquidity of
0.60% or more of CADV in order to qualify for a
credit of $0.0032 per share for orders that provide
liquidity on the Exchange. Additionally, Investor
Tier 3 requires, in part, that an ETP Holder provide
liquidity of between 0.30% and 0.45% of CADV in
order to qualify for a credit of $0.0030 per share for
orders that provide liquidity on the Exchange.
VerDate Mar<15>2010
17:33 Aug 02, 2012
Jkt 226001
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change is effective
upon filing pursuant to Section
19(b)(3)(A) 7 of the Act and
subparagraph (f)(2) of Rule 19b-4 8
thereunder, because it establishes a due,
fee, or other charge imposed by the
NYSE Arca.
At any time within 60 days of the
filing of such proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rulecomments@sec.gov. Please include File
Number SR–NYSEArca-2012–77 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–NYSEArca-2012–77. 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
10:00 a.m. and 3:00 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–
NYSEArca-2012–77 and should be
submitted on or before August 24, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–19030 Filed 8–2–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67536; File No. SR–
NASDAQ–2012–091]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot Period of Amendments to the
Clearly Erroneous Rule
July 30, 2012.
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 July 24,
2012, The NASDAQ Stock Market LLC
(‘‘Exchange’’) 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 self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
9 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
7 15
U.S.C. 78s(b)(3)(A).
8 17 CFR 240.19b-4(f)(2).
PO 00000
Frm 00169
Fmt 4703
1 15
Sfmt 4703
46541
E:\FR\FM\03AUN1.SGM
03AUN1
46542
Federal Register / Vol. 77, No. 150 / Friday, August 3, 2012 / Notices
1. Purpose
respect to breaking erroneous trades.3
The changes were adopted to address
concerns that the lack of clear
guidelines for dealing with clearly
erroneous transactions may have added
to the confusion and uncertainty faced
by investors on May 6, 2010. On
December 7, 2010, the Exchange filed an
immediately effective filing to extend
the existing pilot program for four
months, so that the pilot would expire
on April 11, 2011.4 On March 31, 2011,
the Exchange filed an immediately
effective filing to extend the existing
pilot program for four months, so that
the pilot would 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.5 On August 5, 2011,
the Exchange filed an immediately
effective filing removed language from
the rule that tied the expiration of the
pilot to the adoption of a limit up/limit
down mechanism to address
extraordinary market volatility, and
further extended the pilot period, so
that the pilot would expire on January
31, 2012.6 On August 8, 2011, the
Exchange filed an immediately effective
filing to amend Rule 11890 so that it
would continue to operate in the same
manner after changes to the single stock
trading pause process became effective.7
On January 12, 2012, the Exchange filed
an immediately effective filing that
extended the pilot to July 31, 2012.8
On May 31, 2012, the Commission
approved, on a pilot basis, the National
Market System Plan to Address
Extraordinary Market Volatility.9 This
plan creates a market-wide limit uplimit down mechanism that is intended
to address extraordinary market
volatility in NMS Stocks, which will be
implemented on February 4, 2013. Once
implemented, the plan will prevent
execution of trades outside of certain
trading bands, thus eliminating clearly
erroneous transactions. The Exchange
believes that the pilot program has been
On September 10, 2010, the
Commission approved, for a pilot period
to end December 10, 2010, a proposed
rule change submitted by the Exchange,
together with related rule changes of the
BATS Exchange, Inc., NASDAQ OMX
BX, Inc., Chicago Board Options
Exchange, Incorporated, Chicago Stock
Exchange, Inc., EDGA Exchange, Inc.,
EDGX Exchange, Inc., International
Securities Exchange LLC, New York
Stock Exchange LLC, NYSE MKT LLC
(formerly, NYSE Amex LLC), NYSE
Arca, Inc., and National Stock
Exchange, Inc., to amend certain of their
respective rules to set forth clearer
standards and curtail discretion with
3 Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010).
4 Securities Exchange Act Release No. 63489
(December 9, 2010), 75 FR 78281 (December 15,
2010) (SR–NASDAQ–2010–160).
5 Securities Exchange Act Release No. 64238
(April 7, 2011), 76 FR 20780 (April 13, 2011) (SR–
NASDAQ–2011–043).
6 Securities Exchange Act Release No. 65068
(August 9, 2011), 76 FR 50508 (August 15, 2011)
(SR–NASDAQ–2011–114).
7 Securities Exchange Act Release No. 65104
(August 11, 2011), 76 FR 51076 (August 17, 2011)
(SR–NASDAQ–2011–116).
8 Securities Exchange Act Release No. 66225
(January 24, 2012), 77 FR 4602 (January 30, 2012)
(SR–NASDAQ–2012–011).
9 Securities Exchange Act Release No. 67091 (May
31, 2012), 77 FR 33498 (June 6, 2012).
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
pilot period of recent amendments to
Rule 11890, concerning clearly
erroneous transactions, so that the pilot
will now expire on February 4, 2013.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.
*
*
*
*
*
11890. Clearly Erroneous Transactions
The provisions of paragraphs (C),
(c)(1), (b)(i), and (b)(ii) of this Rule, as
amended on September 10, 2010, shall
be in effect during a pilot period set to
end on February 4, 2013[July 31, 2012].
If the pilot is not either extended or
approved permanent by February 4,
2013[July 31, 2012], the prior versions
of paragraphs (C), (c)(1), and (b) shall be
in effect.
(a)–(f) No change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
self-regulatory organization has
prepared summaries, set forth in
Sections A, B and C below, of the most
significant aspects of such statements.
TKELLEY on DSK3SPTVN1PROD with NOTICES
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
VerDate Mar<15>2010
17:33 Aug 02, 2012
Jkt 226001
PO 00000
Frm 00170
Fmt 4703
Sfmt 4703
successful in providing greater
transparency and certainty to the
process of breaking erroneous trades.
The Exchange also believes that an
additional extension of the pilot is
warranted so that it may continue to
monitor the effects of the pilot on the
markets and investors, and consider
appropriate adjustments, as necessary.
Extending the pilot to February 4, 2013,
the implementation date of the marketwide limit up-limit down mechanism
will permit the Exchange to continue to
provide clear standards and curtail
discretion with respect to breaking
erroneous trades until the limit up/limit
down mechanism, which is designed to
prevent clearly erroneous transactions
from occurring, is implemented.
Accordingly, the Exchange is filing to
further extend the pilot program until
February 4, 2012.
2. Statutory Basis
The statutory basis for the proposed
rule change is Section 6(b)(5) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),10 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) 11 of the
Act in that it seeks to assure fair
competition among brokers and dealers
and among exchange markets. The
Exchange believes that the proposed
rule meets these requirements in that it
promotes transparency and uniformity
across markets concerning decisions to
break erroneous trades. In addition, the
Exchange believes extending the pilot to
February 4, 2013 is consistent with the
requirement to protect investors because
it will permit the pilot to continue to
provide clearer standards and curtail
discretion with respect to breaking
erroneous trades until the limit up/limit
down mechanism is implemented, thus
eliminating need for the pilot.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will result in
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act, as amended.
10 15
11 15
E:\FR\FM\03AUN1.SGM
U.S.C. 78f(b)(5).
U.S.C. 78k–1(a)(1).
03AUN1
Federal Register / Vol. 77, No. 150 / Friday, August 3, 2012 / Notices
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 12 and Rule
19b–4(f)(6) thereunder.13 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 14 and Rule 19b–4(f)(6)(iii)
thereunder.15
A proposed rule change filed under
Rule 19b–4(f)(6) 16 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii) 17 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest. The
Exchange has asked the Commission to
waive the 30-day operative delay so that
the proposal may become operative
immediately upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest, as it
will allow the pilot program to continue
uninterrupted, thereby avoiding the
investor confusion that could result
from a temporary interruption in the
pilot program. For this reason, the
Commission designates the proposed
rule change to be operative upon
filing.18
12 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
14 15 U.S.C. 78s(b)(3)(A).
15 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.
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
18 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).
TKELLEY on DSK3SPTVN1PROD with NOTICES
13 17
VerDate Mar<15>2010
17:33 Aug 02, 2012
Jkt 226001
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.
46543
NASDAQ–2012–091 and should be
submitted by August 24, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–19000 Filed 8–2–12; 8:45 am]
BILLING CODE 8011–01–P
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–NASDAQ–2012–091 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission,
100 F Street NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2012–091. 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 Commissions
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. 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 Number SR–
PO 00000
Frm 00171
Fmt 4703
Sfmt 4703
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67535; File No. SR–
NASDAQ–2012–087]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot Period of the Trading Pause for
NMS Stocks Other Than Rights and
Warrants
July 30, 2012.
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 July 19,
2012, The NASDAQ Stock Market LLC
(‘‘Exchange’’) 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 self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to extend the
pilot period of the trading pause for
individual NMS stocks other than rights
and warrants, so that the pilot will now
expire on February 4, 2013.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
brackets.
*
*
*
*
*
4120. Trading Halts
(a) Authority To Initiate Trading Halts
or Pauses
In circumstances in which Nasdaq
deems it necessary to protect investors
and the public interest, Nasdaq,
pursuant to the procedures set forth in
paragraph (c):
(1)–(10) No change.
(11) shall, between 9:45 a.m. and 3:35
p.m., or in the case of an early
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\03AUN1.SGM
03AUN1
]]>Agencies
[Federal Register Volume 77, Number 150 (Friday, August 3, 2012)]
[Notices]
[Pages 46541-46543]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19000]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67536; File No. SR-NASDAQ-2012-091]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend the Pilot Period of Amendments to the Clearly Erroneous Rule
July 30, 2012.
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 July 24, 2012, The NASDAQ Stock Market LLC (``Exchange'') 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 self-regulatory organization. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
[[Page 46542]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the pilot period of recent
amendments to Rule 11890, concerning clearly erroneous transactions, so
that the pilot will now expire on February 4, 2013.
The text of the proposed rule change is below. Proposed new
language is in italics; proposed deletions are in brackets.
* * * * *
11890. Clearly Erroneous Transactions
The provisions of paragraphs (C), (c)(1), (b)(i), and (b)(ii) of
this Rule, as amended on September 10, 2010, shall be in effect during
a pilot period set to end on February 4, 2013[July 31, 2012]. If the
pilot is not either extended or approved permanent by February 4,
2013[July 31, 2012], the prior versions of paragraphs (C), (c)(1), and
(b) shall be in effect.
(a)-(f) No change.
* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The 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
On September 10, 2010, the Commission approved, for a pilot period
to end December 10, 2010, a proposed rule change submitted by the
Exchange, together with related rule changes of the BATS Exchange,
Inc., NASDAQ OMX BX, Inc., Chicago Board Options Exchange,
Incorporated, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX
Exchange, Inc., International Securities Exchange LLC, New York Stock
Exchange LLC, NYSE MKT LLC (formerly, NYSE Amex LLC), NYSE Arca, Inc.,
and National Stock Exchange, Inc., to amend certain of their respective
rules to set forth clearer standards and curtail discretion with
respect to breaking erroneous trades.\3\ The changes were adopted to
address concerns that the lack of clear guidelines for dealing with
clearly erroneous transactions may have added to the confusion and
uncertainty faced by investors on May 6, 2010. On December 7, 2010, the
Exchange filed an immediately effective filing to extend the existing
pilot program for four months, so that the pilot would expire on April
11, 2011.\4\ On March 31, 2011, the Exchange filed an immediately
effective filing to extend the existing pilot program for four months,
so that the pilot would 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.\5\ On August 5, 2011, the
Exchange filed an immediately effective filing removed language from
the rule that tied the expiration of the pilot to the adoption of a
limit up/limit down mechanism to address extraordinary market
volatility, and further extended the pilot period, so that the pilot
would expire on January 31, 2012.\6\ On August 8, 2011, the Exchange
filed an immediately effective filing to amend Rule 11890 so that it
would continue to operate in the same manner after changes to the
single stock trading pause process became effective.\7\ On January 12,
2012, the Exchange filed an immediately effective filing that extended
the pilot to July 31, 2012.\8\
---------------------------------------------------------------------------
\3\ Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010).
\4\ Securities Exchange Act Release No. 63489 (December 9,
2010), 75 FR 78281 (December 15, 2010) (SR-NASDAQ-2010-160).
\5\ Securities Exchange Act Release No. 64238 (April 7, 2011),
76 FR 20780 (April 13, 2011) (SR-NASDAQ-2011-043).
\6\ Securities Exchange Act Release No. 65068 (August 9, 2011),
76 FR 50508 (August 15, 2011) (SR-NASDAQ-2011-114).
\7\ Securities Exchange Act Release No. 65104 (August 11, 2011),
76 FR 51076 (August 17, 2011) (SR-NASDAQ-2011-116).
\8\ Securities Exchange Act Release No. 66225 (January 24,
2012), 77 FR 4602 (January 30, 2012) (SR-NASDAQ-2012-011).
---------------------------------------------------------------------------
On May 31, 2012, the Commission approved, on a pilot basis, the
National Market System Plan to Address Extraordinary Market
Volatility.\9\ This plan creates a market-wide limit up-limit down
mechanism that is intended to address extraordinary market volatility
in NMS Stocks, which will be implemented on February 4, 2013. Once
implemented, the plan will prevent execution of trades outside of
certain trading bands, thus eliminating clearly erroneous transactions.
The Exchange believes that the pilot program has been successful in
providing greater transparency and certainty to the process of breaking
erroneous trades. The Exchange also believes that an additional
extension of the pilot is warranted so that it may continue to monitor
the effects of the pilot on the markets and investors, and consider
appropriate adjustments, as necessary. Extending the pilot to February
4, 2013, the implementation date of the market-wide limit up-limit down
mechanism will permit the Exchange to continue to provide clear
standards and curtail discretion with respect to breaking erroneous
trades until the limit up/limit down mechanism, which is designed to
prevent clearly erroneous transactions from occurring, is implemented.
---------------------------------------------------------------------------
\9\ Securities Exchange Act Release No. 67091 (May 31, 2012), 77
FR 33498 (June 6, 2012).
---------------------------------------------------------------------------
Accordingly, the Exchange is filing to further extend the pilot
program until February 4, 2012.
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Securities Exchange Act of 1934 (the ``Act''),\10\ 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) \11\ of
the Act in that it seeks to assure fair competition among brokers and
dealers and among exchange markets. The Exchange believes that the
proposed rule meets these requirements in that it promotes transparency
and uniformity across markets concerning decisions to break erroneous
trades. In addition, the Exchange believes extending the pilot to
February 4, 2013 is consistent with the requirement to protect
investors because it will permit the pilot to continue to provide
clearer standards and curtail discretion with respect to breaking
erroneous trades until the limit up/limit down mechanism is
implemented, thus eliminating need for the pilot.
---------------------------------------------------------------------------
\10\ 15 U.S.C. 78f(b)(5).
\11\ 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
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
[[Page 46543]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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 \14\ and Rule 19b-
4(f)(6)(iii) thereunder.\15\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii) \17\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
---------------------------------------------------------------------------
\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest, as
it will allow the pilot program to continue uninterrupted, thereby
avoiding the investor confusion that could result from a temporary
interruption in the pilot program. For this reason, the Commission
designates the proposed rule change to be operative upon filing.\18\
---------------------------------------------------------------------------
\18\ 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).
---------------------------------------------------------------------------
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-NASDAQ-2012-091 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASDAQ-2012-091. 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 Commissions 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. 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 Number SR-
NASDAQ-2012-091 and should be submitted by August 24, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------
\19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19000 Filed 8-2-12; 8:45 am]
BILLING CODE 8011-01-P
