Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot Period of Amendments to the Clearly Erroneous Rule, 47486-47488 [2012-19352]
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wreier-aviles on DSK7SPTVN1PROD with NOTICES
47486
Federal Register / Vol. 77, No. 153 / Wednesday, August 8, 2012 / Notices
public information regarding the Fund’s
portfolio.25 Further, the Commission
notes that the Reporting Authority that
provides the Disclosed Portfolio must
implement and maintain, or be subject
to, procedures designed to prevent the
use and dissemination of material, nonpublic information regarding the actual
components of the portfolio.26 The
Exchange states that it has a general
policy prohibiting the distribution of
material, non-public information by its
employees. The Commission also notes
that the Exchange would be able to
obtain surveillance information from all
securities exchanges listing and/or
trading the securities held by the Fund,
including information from the U.S.
exchanges, all of which are ISG
members, on which the Underlying
ETPs, Depositary Receipts, futures,
options, and other applicable portfolio
securities are listed and traded.
The Exchange further represents that
the Shares are deemed to be equity
securities, thus rendering trading in the
Shares subject to the Exchange’s
existing rules governing the trading of
equity securities. In support of this
proposal, the Exchange has made
representations, including:
(1) The Shares will conform to the
initial and continued listing criteria
under NYSE Arca Equities Rule 8.600.
(2) The Exchange has appropriate
rules to facilitate transactions in the
Shares during all trading sessions.
(3) The Exchange’s surveillance
procedures applicable to derivative
products, which include Managed Fund
Shares, are adequate to properly
monitor Exchange trading of the Shares
in all trading sessions and to deter and
detect violations of Exchange rules and
applicable federal securities laws.
(4) Prior to the commencement of
trading, the Exchange will inform its
Equity Trading Permit Holders in an
Information Bulletin (‘‘Bulletin’’) of the
special characteristics and risks
associated with trading the Shares.
Specifically, the Bulletin will discuss
the following: (a) The procedures for
purchases and redemptions of Shares in
Creation Unit aggregations (and that
Shares are not individually redeemable);
(b) NYSE Arca Equities Rule 9.2(a),
which imposes a duty of due diligence
on its Equity Trading Permit Holders to
learn the essential facts relating to every
customer prior to trading the Shares; (c)
the risks involved in trading the Shares
during the Opening and Late Trading
Sessions when an updated PIV will not
be calculated or publicly disseminated;
Commentary .06 to NYSE Arca Equities
Rule 8.600.
26 See NYSE Arca Equities Rule 8.600(d)(2)(B)(ii).
(d) how information regarding the PIV is
disseminated; (e) the requirement that
Equity Trading Permit 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 Act,27 as
provided by NYSE Arca Equities Rule
5.3.
(6) The Fund may not hold more than
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.
(7) Except for Underlying ETPs that
may hold non-U.S. issues, the Fund will
not otherwise invest in non-U.S.registered issues. Options, futures, and
options on futures contracts in which
the Fund invests will be U.S. exchangelisted. The Fund will invest no more
than 15% of total assets in such options
and 15% of total assets in such futures
on a daily basis. The Fund may invest
up to 15% of its total assets in swap
agreements, including, but not limited
to, total return swaps, index swaps, and
interest rate swaps.
(8) The Fund will not invest in
leveraged 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.
(9) The Exchange would be able to
obtain surveillance information from all
securities exchanges listing and/or
trading the securities held by the Fund,
including information from the U.S.
exchanges, all of which are ISG
members, on which the Underlying
ETPs, Depositary Receipts, futures,
options, and other applicable portfolio
securities are listed and traded.
(10) A minimum of 100,000 Shares of
each Fund will be outstanding at the
commencement of trading on the
Exchange.
This approval order is based on the
Exchange’s representations and
description of the Fund, including those
set forth above and in the Notice.
For the foregoing reasons, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act28 and the rules and
regulations thereunder applicable to a
national securities exchange.
15:11 Aug 07, 2012
Jkt 226001
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.30
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–19351 Filed 8–7–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67570; File No. SR–BX–
2012–056]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot Period of Amendments to the
Clearly Erroneous Rule
August 2, 2012.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 24,
2012, NASDAQ OMX BX, Inc.
(‘‘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 Exchange. 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 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.
*
*
*
27 See
28 15
PO 00000
17 CFR 240.10A–3.
U.S.C. 78f(b)(5).
Frm 00129
Fmt 4703
Sfmt 4703
*
*
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
29 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
30 17
25 See
VerDate Mar<15>2010
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,29 that the
proposed rule change (SR–NYSEArca–
2012–57) be, and it hereby is, approved.
E:\FR\FM\08AUN1.SGM
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Federal Register / Vol. 77, No. 153 / Wednesday, August 8, 2012 / Notices
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
Exchange 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 the
Statutory Basis for, the Proposed Rule
Change
wreier-aviles on DSK7SPTVN1PROD with NOTICES
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., Chicago Board
Options Exchange, Incorporated,
Chicago Stock Exchange, Inc., EDGA
Exchange, Inc., EDGX Exchange, Inc.,
International Securities Exchange LLC,
The NASDAQ Stock Market 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
3 Securities Exchange Act Release No. 62886
(September 10, 2010), 75 FR 56613 (September 16,
2010).
4 Securities Exchange Act Release No. 63490
(December 9, 2010), 75 FR 78299 (December 15,
2010) (SR–BX–2010–086).
VerDate Mar<15>2010
15:11 Aug 07, 2012
Jkt 226001
address extraordinary market volatility,
if adopted, applies.5 On August 5, 2011,
the Exchange filed an immediately
effective filing that 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
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, 2013.
5 Securities Exchange Act Release No. 64240
(April 7, 2011), 76 FR 20732 (April 13, 2011) (SR–
BX–2011–019).
6 Securities Exchange Act Release No. 65059
(August 9, 2011), 76 FR 50522 (August 15, 2011)
(SR–BX–2011–054).
7 Securities Exchange Act Release No. 65105
(August 11, 2011), 76 FR 51108 (August 17, 2011)
(SR–BX–2011–056).
8 Securities Exchange Act Release No. 66226
(January 24, 2012), 77 FR 4611 (January 30, 2012)
(SR–BX–2012–004).
9 Securities Exchange Act Release No. 67091 (May
31, 2012), 77 FR 33498 (June 6, 2012).
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
47487
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.
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
10 15
U.S.C. 78f(b)(5).
U.S.C. 78k–1(a)(1).
12 15 U.S.C. 78s(b)(3)(A)(iii).
13 17 CFR 240.19b–4(f)(6).
11 15
E:\FR\FM\08AUN1.SGM
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47488
Federal Register / Vol. 77, No. 153 / Wednesday, August 8, 2012 / Notices
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
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
wreier-aviles on DSK7SPTVN1PROD with NOTICES
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).
VerDate Mar<15>2010
15:11 Aug 07, 2012
Jkt 226001
No. SR–BX–2012–056 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–BX–2012–056. 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 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–BX–2012–
056 and should be submitted on or
before August 29, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–19352 Filed 8–7–12; 8:45 am]
BILLING CODE 8011–01–P
SMALL BUSINESS ADMINISTRATION
[Disaster Declaration #13156 and #13157]
Wisconsin Disaster #WI–00032
U.S. Small Business
Administration.
ACTION: Notice.
AGENCY:
19 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00131
Fmt 4703
Sfmt 4703
This is a notice of an
Administrative declaration of a disaster
for the State of WISCONSIN dated 07/
27/2012.
Incident: Severe Storms and Flooding.
Incident Period: 06/19/2012 through
06/20/2012.
Effective Date: 07/27/2012.
Physical Loan Application Deadline
Date: 09/25/2012.
Economic Injury (EIDL) Loan
Application Deadline Date: 04/29/2013.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business
Administration, Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
Administrator’s disaster declaration,
applications for disaster loans may be
filed at the address listed above or other
locally announced locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Douglas.
Contiguous Counties:
Wisconsin: Bayfield, Burnett, Sawyer,
Washburn.
Minnesota: Carlton, Pine, Saint Louis.
The Interest Rates are:
SUMMARY:
Percent
For Physical Damage:
Homeowners With Credit Available Elsewhere ......................
Homeowners Without Credit
Available Elsewhere ..............
Businesses With Credit Available Elsewhere ......................
Businesses
Without
Credit
Available Elsewhere ..............
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Businesses & Small Agricultural
Cooperatives Without Credit
Available Elsewhere ..............
Non-Profit Organizations Without Credit Available Elsewhere .....................................
3.875
1.938
6.000
4.000
3.125
3.000
4.000
3.000
The number assigned to this disaster
for physical damage is 131566 and for
economic injury is 131570.
The States which received an EIDL
Declaration # are Wisconsin, Minnesota.
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008)
E:\FR\FM\08AUN1.SGM
08AUN1
]]>Agencies
[Federal Register Volume 77, Number 153 (Wednesday, August 8, 2012)]
[Notices]
[Pages 47486-47488]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19352]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67570; File No. SR-BX-2012-056]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Extend
the Pilot Period of Amendments to the Clearly Erroneous Rule
August 2, 2012.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 24, 2012, NASDAQ OMX BX, Inc. (``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 Exchange. 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 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
[[Page 47487]]
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 Exchange 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 the
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., Chicago Board Options Exchange, Incorporated, Chicago Stock
Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., International
Securities Exchange LLC, The NASDAQ Stock Market 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 that 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. 63490 (December 9,
2010), 75 FR 78299 (December 15, 2010) (SR-BX-2010-086).
\5\ Securities Exchange Act Release No. 64240 (April 7, 2011),
76 FR 20732 (April 13, 2011) (SR-BX-2011-019).
\6\ Securities Exchange Act Release No. 65059 (August 9, 2011),
76 FR 50522 (August 15, 2011) (SR-BX-2011-054).
\7\ Securities Exchange Act Release No. 65105 (August 11, 2011),
76 FR 51108 (August 17, 2011) (SR-BX-2011-056).
\8\ Securities Exchange Act Release No. 66226 (January 24,
2012), 77 FR 4611 (January 30, 2012) (SR-BX-2012-004).
---------------------------------------------------------------------------
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, 2013.
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.
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\10\ 15 U.S.C. 78f(b)(5).
\11\ 15 U.S.C. 78k-1(a)(1).
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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
result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act, as amended.
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
[[Page 47488]]
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\
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\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.
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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.
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 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.\18\
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\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).
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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-BX-2012-056 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-BX-2012-056. 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 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-BX-2012-056 and should be
submitted on or before August 29, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19352 Filed 8-7-12; 8:45 am]
BILLING CODE 8011-01-P
