Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 128-Equities, Which Governs Clearly Erroneous Executions, To Extend the Effective Date of the Pilot by Which Portions of Such Rule Operate Until February 4, 2013, 47136-47138 [2012-19292]
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mstockstill on DSK4VPTVN1PROD with NOTICES
47136
Federal Register / Vol. 77, No. 152 / Tuesday, August 7, 2012 / Notices
ETP Holders deliver a prospectus to
investors purchasing newly issued
Shares prior to or concurrently with the
confirmation of a transaction; and (f)
trading information.
(5) For initial and/or continued
listing, the Fund will be in compliance
with Rule 10A–3 under the Exchange
Act,29 as provided by NYSE Arca
Equities Rule 5.3.
(6) The options contracts held by the
Fund will be U.S. exchange-listed.
Except for Underlying ETPs that may
hold non-U.S. issues, the Fund will not
otherwise invest in non-U.S.-registered
issues. The Exchange may obtain
information via ISG from other
exchanges that are members of ISG or
with which the Exchange has in place
a comprehensive surveillance sharing
agreement. In addition, the Exchange is
able to obtain information from the U.S.
exchanges, all of which are ISG
members, on which the Underlying
ETPs and options are listed and traded.
(7) The Fund does not intend to invest
in leveraged, inverse, or inverse
leveraged Underlying ETPs. The Fund’s
investments will be consistent with the
Fund’s investment objective and will
not be used to enhance leverage.
(8) While the Fund is permitted to
invest up to 40% of its total assets in
call options on Underlying ETPs, the
Adviser expects that, under normal
market conditions, the Fund will invest
no more than 15% in such call options
on a daily basis.
(9) The Fund may invest up to 10%
of its total assets in futures contracts
and related options on futures contracts.
While the Fund may invest in put and
call options on securities other than
Underlying ETPs, the Adviser expects
that, under normal market conditions,
the Fund will invest from 0% to up to
10% in such put and call options on a
daily basis. While the Fund currently
does not intend to invest in swaps, it
may invest up to 10% of its total assets
in swaps.
(10) The Fund may hold up to an
aggregate amount of 15% of its net
assets in illiquid securities (calculated
at the time of investment), including
Rule 144A securities and loan
participation interests.
(11) A minimum of 100,000 Shares of
the Fund will be outstanding at the
commencement of trading on the
Exchange.
This approval order is based on all of
the Exchange’s representations,
including those set forth above and in
the Notice, and the Exchange’s
description of the Fund.
29 17
CFR 240.10A–3.
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For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act 30 and the rules and
regulations thereunder applicable to a
national securities exchange.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,31 that the
proposed rule change (SR–NYSEArca–
2012–55) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.32
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–19210 Filed 8–6–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67567; File No. SR–
NYSEMKT–2012–28]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Rule 128—
Equities, Which Governs Clearly
Erroneous Executions, To Extend the
Effective Date of the Pilot by Which
Portions of Such Rule Operate Until
February 4, 2013
August 1, 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 20,
2012, NYSE MKT LLC (the ‘‘Exchange’’
or ‘‘NYSE MKT’’) 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 amend
Rule 128—Equities, which governs
clearly erroneous executions, to extend
the effective date of the pilot by which
portions of such Rule operate until
February 4, 2013. The pilot is currently
scheduled to expire on July 31, 2012.
The text of the proposed rule change is
30 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
32 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
31 15
PO 00000
Frm 00109
Fmt 4703
Sfmt 4703
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
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
Rule 128—Equities, which governs
clearly erroneous executions, to extend
the effective date of the pilot by which
portions of such Rule operate, until
February 4, 2013. The pilot is currently
scheduled to expire on July 31, 2012.3
On September 10, 2010, the
Commission approved, on a pilot basis,
market-wide amendments to exchanges’
rules for clearly erroneous executions to
set forth clearer standards and curtail
discretion with respect to breaking
erroneous trades. In connection with
this pilot initiative, the Exchange
amended Rule 128(c), (e)(2), (f), and (g).
The amendments provide for uniform
treatment of clearly erroneous execution
reviews (1) in Multi-Stock Events 4
involving twenty or more securities, and
(2) in the event transactions occur that
result in the issuance of an individual
security trading pause by the primary
market and subsequent transactions that
occur before the trading pause is in
effect on the Exchange.5 The
3 See Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010) (SR–NYSEAmex–2010–60). See also
Securities Exchange Act Release Nos. 63480
(December 9, 2010), 75 FR 78333 (December 15,
2010) (SR–NYSEAmex–2010–116); 64233 (April 7,
2011), 76 FR 20736 (April 13, 2011) (SR–
NYSEAmex–2011–24); 65066 (August 9, 2011), 76
FR 50506 (August 15, 2011) (SR–NYSEAmex–2011–
58) and 66137 (January 11, 2012), 77 FR 2587
(January 18, 2012) (SR–NYSEAmex–2011–106).
4 Terms not defined herein are defined in Rule
128—Equities.
5 Separately, the Exchange has proposed extend
the effective date of the trading pause pilot under
Rule 80C—Equities, which requires to the Exchange
to pause trading in an individual security listed on
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Federal Register / Vol. 77, No. 152 / Tuesday, August 7, 2012 / Notices
amendments also eliminated appeals of
certain rulings made in conjunction
with other exchanges with respect to
clearly erroneous transactions and
limited the Exchange’s discretion to
deviate from Numerical Guidelines set
forth in the Rule in the event of system
disruptions or malfunctions.
If the pilot were not extended, the
prior versions of paragraphs (c), (e)(2),
(f), and (g) of Rule 128—Equities would
be in effect, and the Exchange would
have different rules than other
exchanges and greater discretion in
connection with breaking clearly
erroneous transactions. The Exchange
proposes to extend the pilot
amendments to Rule 128—Equities until
February 4, 2013 in order to maintain
uniform rules across markets and allow
the pilot to continue to operate without
interruption during the same period that
the Rule 80C trading pause rule pilot is
also in effect. Extension of the pilot
would permit the Exchange, other
national securities exchanges and the
Commission to further assess the effect
of the pilot on the marketplace,
including whether additional measures
should be added, whether the
parameters of the rule should be
modified or whether other initiatives
should be adopted in lieu of the current
pilot.6
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2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 7 of the Act,
in general, and furthers the objectives of
Section 6(b)(5) 8 in particular in that it
is designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
the Exchange if the price moves by a specified
percentage as compared to prices of that security in
the preceding five-minute period during a trading
day. See SR–NYSEMKT–2012–27.
6 This proposed extension would also permit the
pilot to operate until the National Market System
Plan to Address Extraordinary Market Volatility is
implemented, which will occur on February 4,
2013. See Securities Exchange Act Release No.
67091 (May 31, 2012), 77 FR 33498 (June 6, 2012)
(File No. 4–631) (Order Approving, on a Pilot Basis,
the National Market System Plan To Address
Extraordinary Market Volatility by BATS Exchange,
Inc., BATS Y-Exchange, Inc., Chicago Board
Options Exchange, Incorporated, Chicago Stock
Exchange, Inc., EDGA Exchange, Inc., EDGX
Exchange, Inc., Financial Industry Regulatory
Authority, Inc., NASDAQ OMX BX, Inc., NASDAQ
OMX PHLX LLC, The Nasdaq Stock Market LLC,
National Stock Exchange, Inc., New York Stock
Exchange LLC, NYSE MKT LLC, and NYSE Arca,
Inc).
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
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16:52 Aug 06, 2012
Jkt 226001
and a national market system and, in
general, to protect investors and the
public interest. More specifically, the
Exchange believes that the extension of
the pilot would promote just and
equitable principles of trade because it
would help assure that the
determination of whether a clearly
erroneous trade has occurred will be
based on clear and objective criteria.
Additionally, resolution of the incident
will occur promptly through a
transparent process, which the
Exchange believes would protect
investors and the public interest. The
proposed rule change would also foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities and to remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system because it
would help assure consistent results in
handling erroneous trades across the
U.S. markets, thus furthering fair and
orderly markets, the protection of
investors and the public interest.
Finally, the proposed rule change would
permit the pilot to operate until the
National Market System Plan to Address
Extraordinary Market Volatility is
implemented, which will occur on
February 4, 2013.9
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 10 and Rule
19b–4(f)(6) thereunder.11 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
9 See
supra note 7.
U.S.C. 78s(b)(3)(A)(iii).
11 17 CFR 240.19b–4(f)(6).
10 15
PO 00000
Frm 00110
Fmt 4703
Sfmt 4703
47137
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 12 and Rule 19b–4(f)(6)(iii)
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative for 30 days after the
date of filing. However, pursuant to
Rule 19b–4(f)(6)(iii) 15 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.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:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
12 15
U.S.C. 78s(b)(3)(A).
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.
14 17 CFR 240.19b–4(f)(6).
15 17 CFR 240.19b–4(f)(6)(iii).
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).
13 17
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47138
Federal Register / Vol. 77, No. 152 / Tuesday, August 7, 2012 / Notices
• Send an Email to rulecomments@sec.gov. Please include File
No. SR–NYSEMKT–2012–28 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–NYSEMKT–2012–28. 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. 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–
NYSEMKT–2012–28 and should be
submitted by August 28, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–19292 Filed 8–6–12; 8:45 am]
mstockstill on DSK4VPTVN1PROD with NOTICES
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67569; File No. SR–
NYSEMKT–2012–23]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing of Proposed
Rule Change Amending the Members’
Schedule of NYSE Amex Options LLC
in Order To Reflect Changes to the
Capital Structure of the Company
August 1, 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 25,
2012, NYSE MKT LLC (‘‘NYSE MKT’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
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 amend the
Members’ Schedule (as defined in the
Limited Liability Company Agreement
of NYSE Amex Options LLC (the
‘‘Company’’) dated as of June 29, 2011
(the ‘‘LLC Agreement’’)) in order to
reflect changes to the capital structure of
the Company based on three
transactions (such amendment, the
‘‘Proposed Rule Change’’). The first
transaction involved the admission of
NYSE Market, Inc. (‘‘NYSE Market’’) as
a Member (as defined below) of the
Company on September 19, 2011
pursuant to Sections 10.4 and 11.1 of
the LLC Agreement and Section 3.2 of
that certain Members Agreement, dated
as of June 29, 2011, by and among the
Company, NYSE MKT, NYSE Euronext,
Banc of America Strategic Investments
Corporation (‘‘BAML’’), Barclays
Electronic Commerce Holdings Inc.
(‘‘Barclays’’), Citadel Securities LLC
(‘‘Citadel’’), Citigroup Financial
Strategies, Inc. (‘‘Citigroup’’), Goldman,
Sachs & Co. (‘‘Goldman Sachs’’), Datek
Online Management Corp. (‘‘TD
Ameritrade’’) and UBS Americas Inc.
(‘‘UBS’’) (collectively, excluding the
Company, NYSE MKT and NYSE
Euronext, the ‘‘Founding Firms’’) (the
‘‘Members Agreement’’). The second
transaction involved the issuance of
Annual Incentive Shares (as defined in
the Members Agreement) to the
1 15
17 17
CFR 200.30–3(a)(12).
VerDate Mar<15>2010
16:52 Aug 06, 2012
2 17
Jkt 226001
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00111
Fmt 4703
Sfmt 4703
Founding Firms pursuant to Section 2.1
of the Members Agreement. The third
transaction will involve the transfer of
Interests (as defined below) by the
Founding Firms to NYSE Market on or
around September 25, 2012 pursuant to
Article XI of the LLC Agreement and
Section 3.1 of the Members Agreement.
The text of the Proposed Rule Change is
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, on the Commission’s Web
site at www.sec.gov, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the Proposed Rule Change
and discussed any comments it received
on the Proposed Rule Change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend the
Members’ Schedule as set forth herein.
The amendment reflects changes to the
capital structure of the Company due to
(i) The admission of NYSE Market as a
Member of the Company on September
19, 2011 pursuant to Sections 10.4 and
11.1 of the LLC Agreement and Section
3.2 of the Members Agreement, (ii) the
issuance of Annual Incentive Shares to
the Founding Firms on February 29,
2012 pursuant to Section 2.1 of the
Members Agreement and (iii) the
upcoming transfer of Interests by the
Founding Firms to NYSE Market on or
around September 25, 2012 pursuant to
Article XI of the LLC Agreement and
Section 3.1 of the Members Agreement.
Admission of NYSE Market
Pursuant to Section 3.2 of the
Members Agreement, each Founding
Firm has the right, subject to certain
conditions and limitations, to cause
NYSE MKT (or an affiliate thereof that
NYSE MKT designates) to purchase a
portion of such Founding Firm’s equity
interest in the Company (such right, the
‘‘Founding Firm Right’’). On September
19, 2011, each of the Founding Firms
exercised its Founding Firm Right and
E:\FR\FM\07AUN1.SGM
07AUN1
]]>Agencies
[Federal Register Volume 77, Number 152 (Tuesday, August 7, 2012)]
[Notices]
[Pages 47136-47138]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19292]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67567; File No. SR-NYSEMKT-2012-28]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Rule 128--
Equities, Which Governs Clearly Erroneous Executions, To Extend the
Effective Date of the Pilot by Which Portions of Such Rule Operate
Until February 4, 2013
August 1, 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 20, 2012, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'')
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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 128--Equities, which governs
clearly erroneous executions, to extend the effective date of the pilot
by which portions of such Rule operate until February 4, 2013. The
pilot is currently scheduled to expire on July 31, 2012. The text of
the proposed rule change is available on the Exchange's Web site at
www.nyse.com, at the principal office of the Exchange, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the 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 Rule 128--Equities, which governs
clearly erroneous executions, to extend the effective date of the pilot
by which portions of such Rule operate, until February 4, 2013. The
pilot is currently scheduled to expire on July 31, 2012.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010) (SR-NYSEAmex-2010-60). See
also Securities Exchange Act Release Nos. 63480 (December 9, 2010),
75 FR 78333 (December 15, 2010) (SR-NYSEAmex-2010-116); 64233 (April
7, 2011), 76 FR 20736 (April 13, 2011) (SR-NYSEAmex-2011-24); 65066
(August 9, 2011), 76 FR 50506 (August 15, 2011) (SR-NYSEAmex-2011-
58) and 66137 (January 11, 2012), 77 FR 2587 (January 18, 2012) (SR-
NYSEAmex-2011-106).
---------------------------------------------------------------------------
On September 10, 2010, the Commission approved, on a pilot basis,
market-wide amendments to exchanges' rules for clearly erroneous
executions to set forth clearer standards and curtail discretion with
respect to breaking erroneous trades. In connection with this pilot
initiative, the Exchange amended Rule 128(c), (e)(2), (f), and (g). The
amendments provide for uniform treatment of clearly erroneous execution
reviews (1) in Multi-Stock Events \4\ involving twenty or more
securities, and (2) in the event transactions occur that result in the
issuance of an individual security trading pause by the primary market
and subsequent transactions that occur before the trading pause is in
effect on the Exchange.\5\ The
[[Page 47137]]
amendments also eliminated appeals of certain rulings made in
conjunction with other exchanges with respect to clearly erroneous
transactions and limited the Exchange's discretion to deviate from
Numerical Guidelines set forth in the Rule in the event of system
disruptions or malfunctions.
---------------------------------------------------------------------------
\4\ Terms not defined herein are defined in Rule 128--Equities.
\5\ Separately, the Exchange has proposed extend the effective
date of the trading pause pilot under Rule 80C--Equities, which
requires to the Exchange to pause trading in an individual security
listed on the Exchange if the price moves by a specified percentage
as compared to prices of that security in the preceding five-minute
period during a trading day. See SR-NYSEMKT-2012-27.
---------------------------------------------------------------------------
If the pilot were not extended, the prior versions of paragraphs
(c), (e)(2), (f), and (g) of Rule 128--Equities would be in effect, and
the Exchange would have different rules than other exchanges and
greater discretion in connection with breaking clearly erroneous
transactions. The Exchange proposes to extend the pilot amendments to
Rule 128--Equities until February 4, 2013 in order to maintain uniform
rules across markets and allow the pilot to continue to operate without
interruption during the same period that the Rule 80C trading pause
rule pilot is also in effect. Extension of the pilot would permit the
Exchange, other national securities exchanges and the Commission to
further assess the effect of the pilot on the marketplace, including
whether additional measures should be added, whether the parameters of
the rule should be modified or whether other initiatives should be
adopted in lieu of the current pilot.\6\
---------------------------------------------------------------------------
\6\ This proposed extension would also permit the pilot to
operate until the National Market System Plan to Address
Extraordinary Market Volatility is implemented, which will occur on
February 4, 2013. See Securities Exchange Act Release No. 67091 (May
31, 2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (Order
Approving, on a Pilot Basis, the National Market System Plan To
Address Extraordinary Market Volatility by BATS Exchange, Inc., BATS
Y-Exchange, Inc., Chicago Board Options Exchange, Incorporated,
Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange,
Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX,
Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market LLC, National
Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and
NYSE Arca, Inc).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \7\ of the
Act, in general, and furthers the objectives of Section 6(b)(5) \8\ in
particular in that it is designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to foster cooperation and coordination with
persons engaged in facilitating transactions in securities, 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. More specifically, the Exchange believes that the
extension of the pilot would promote just and equitable principles of
trade because it would help assure that the determination of whether a
clearly erroneous trade has occurred will be based on clear and
objective criteria. Additionally, resolution of the incident will occur
promptly through a transparent process, which the Exchange believes
would protect investors and the public interest. The proposed rule
change would also foster cooperation and coordination with persons
engaged in facilitating transactions in securities and to remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system because it would help assure consistent
results in handling erroneous trades across the U.S. markets, thus
furthering fair and orderly markets, the protection of investors and
the public interest. Finally, the proposed rule change would permit the
pilot to operate until the National Market System Plan to Address
Extraordinary Market Volatility is implemented, which will occur on
February 4, 2013.\9\
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ See supra note 7.
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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 \12\ and Rule 19b-
4(f)(6)(iii) thereunder.\13\
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\10\ 15 U.S.C. 78s(b)(3)(A)(iii).
\11\ 17 CFR 240.19b-4(f)(6).
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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) \14\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii) \15\ 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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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 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, 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.\16\
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\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).
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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
[[Page 47138]]
Send an Email to rule-comments@sec.gov. Please include
File No. SR-NYSEMKT-2012-28 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-NYSEMKT-2012-28. 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. 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-NYSEMKT-2012-28 and should be submitted by August 28,
2012.
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\17\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19292 Filed 8-6-12; 8:45 am]
BILLING CODE 8011-01-P
