Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Clearly Erroneous Pilot Period and to Remove Certain References to Individual Stock Trading Pauses in FINRA Rule 11892, 60952-60954 [2013-24007]

Download as PDF 60952 Federal Register / Vol. 78, No. 191 / Wednesday, October 2, 2013 / Notices • Send an email to rule-comments@ sec.gov. Please include File Number SR– NYSEArca–2013–100 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–2013–100. 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–2013–100 and should be submitted on or before October 23, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Kevin M. O’Neill, Deputy Secretary. tkelley on DSK3SPTVN1PROD with NOTICES [FR Doc. 2013–24009 Filed 10–1–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70516; File No. SR–FINRA– 2013–041] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Extend the Clearly Erroneous Pilot Period and to Remove Certain References to Individual Stock Trading Pauses in FINRA Rule 11892 September 26, 2013. 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 September 24, 2013, Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by FINRA. FINRA has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b-4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. 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 FINRA is proposing to amend FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities) to extend the effective date of the clearly erroneous pilot, which currently is scheduled to expire on September 30, 2013. FINRA also proposes to remove certain references to individual stock trading pauses contained in Rule 11892. FINRA has designated this proposal as noncontroversial and provided the Commission with the notice required by Rule 19b-4(f)(6)(iii) under the Act.4 The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, at the principal office of FINRA and at the Commission’s Public Reference Room. 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 4 17 CFR 240.19b–4(f)(6)(iii). 2 17 14 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 17:48 Oct 01, 2013 Jkt 232001 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, FINRA 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. FINRA 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 FINRA proposes to amend FINRA Rule 11892 (Clearly Erroneous Transactions in Exchange-Listed Securities) to extend the effective date of the amendments set forth in File No. SR–FINRA–2010–032 (the ‘‘clearly erroneous pilot’’). Portions of Rule 11892, explained in further detail below, currently are operating as a pilot set to expire on September 30, 2013.5 FINRA proposes to extend the clearly erroneous pilot until April 8, 2014. FINRA also proposes to remove references to individual stock trading pauses described in Rule 11892(b)(4). On September 10, 2010, the Commission approved, on a pilot basis, changes to FINRA Rule 11892 to provide for uniform treatment: (1) Of clearly erroneous execution reviews in multi-stock events involving twenty or more securities, and (2) in the event transactions occur that result in the issuance of an individual stock trading pause by the primary listing market and subsequent transactions that occur before the trading pause is in effect.6 FINRA also adopted additional changes to Rule 11892 that reduced the ability of FINRA to deviate from the objective standards set forth in Rule 11892,7 and in 2013, adopted a provision designed to address the operation of the clearly erroneous rules and the Plan to Address Extraordinary Market Volatility 5 See Securities Exchange Act Release No. 68808 (February 1, 2013), 78 FR 9083 (February 7, 2013) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Clearly Erroneous Pilot Period and To Adopt a New Provision in Connection With the Limit Up-Limit Down Plan) (‘‘File No. SR–FINRA–2013–012’’). 6 See Securities Exchange Act Release No. 62885 (September 10, 2010), 75 FR 56641 (September 16, 2010) (Order Granting Approval of Proposed Rule Change Relating to Clearly Erroneous Transactions) (‘‘File No. SR–FINRA–2010–032’’). 7 See File No. SR–FINRA–2010–032. E:\FR\FM\02OCN1.SGM 02OCN1 Federal Register / Vol. 78, No. 191 / Wednesday, October 2, 2013 / Notices Pursuant to Rule 608 of Regulation NMS under the Act (the ‘‘Limit Up-Limit Down Plan’’ or the ‘‘Plan’’).8 FINRA believes the benefits to market participants from the more objective clearly erroneous executions rule should continue on a pilot basis through April 8, 2014, which is one year following the commencement of operations of the Plan. FINRA believes that continuing the pilot during this time will protect against any unanticipated consequences. Thus, FINRA believes that the protections of the clearly erroneous rule should continue while the industry gains further experience with the operation of the Limit Up-Limit Down Plan. FINRA also proposes to eliminate all references in Rule 11892 to individual stock trading pauses issued by a primary listing market. Specifically, Rule 11892(b)(4) provides specific rules that apply to the review of an execution as potentially clearly erroneous in the context of an individual stock trading pause issued for that security where the security is included in the S&P 500® Index, the Russell 1000® Index, or a pilot list of Exchange Traded Products (‘‘Subject Securities’’). The trading pauses described in Rule 11892(b)(4) are being phased out as securities become subject to the Plan pursuant to a phased implementation schedule. The Plan already is operational with respect to all Subject Securities, and thus, FINRA believes that all references to individual stock trading pauses should be removed, including all cross-references to Rule 11892(b)(4) contained in other portions of Rule 11892.9 FINRA has filed the proposed rule change for immediate effectiveness. The effective date of the proposed rule change will be the date of filing. 2. Statutory Basis FINRA believes that the proposal is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities association and, in particular, with the requirements of Section 15A of the Act.10 In particular, tkelley on DSK3SPTVN1PROD with NOTICES 8 See File No. SR–FINRA–2013–012. 9 FINRA notes that certain Exchange Traded Products (‘‘ETPs’’) are not yet subject to the Limit Up-Limit Down Plan. Because such ETPs are not on the pilot list of securities, such ETPs are not subject to Rule 11892(b)(4). Accordingly, the proposed rule change does not change the status quo with respect to such ETPs. As amended, all securities, including ETPs not subject to the Limit Up-Limit Down Plan, will continue to be subject to Rule 11892(b)(1) through (3). See Securities Exchange Act Release No. 65101 (August 11, 2011), 76 FR 51097 (August 17, 2011) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend FINRA Rule 11892) (SR–FINRA–2011–039). 10 15 U.S.C. 78o–3. VerDate Mar<15>2010 17:48 Oct 01, 2013 Jkt 232001 the proposal is consistent with Section 15A(b)(6) 11 because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade and, in general, to protect investors and the public interest. FINRA believes that the clearly erroneous pilot promotes just and equitable principles of trade in that it promotes transparency and uniformity across markets concerning review of transactions as clearly erroneous. More specifically, FINRA believes that the extension of the clearly erroneous pilot would help assure that the determination of whether a clearly erroneous trade has occurred will be based on clear and objective criteria, and that the resolution of the incident will occur promptly through a transparent process. The proposed rule change also 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. Although the Limit Up-Limit Down Plan will become fully operational during the same time period as the proposed extended clearly erroneous pilot, FINRA believes that maintaining the pilot will help to protect against unanticipated consequences. To that end, the extension will allow FINRA to determine whether the pilot provisions of Rule 11892 are appropriate once the Plan is fully operational and, if so, whether improvements can be made. Finally, the elimination of references to individual stock trading pauses will help to avoid confusion amongst market participants, which is consistent with the protection of investors and the public interest and therefore consistent with the Act. As described above, individual stock trading pauses have been replaced by the Limit Up-Limit Down Plan with respect to all Subject Securities. B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change implicates any competitive issues. FINRA believes that the other self-regulatory organizations also are filing similar proposals, and thus, that the proposal will help to ensure consistency across the marketplace. 11 15 PO 00000 U.S.C. 78o–3(b)(6). Frm 00138 Fmt 4703 Sfmt 4703 60953 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received from Members, Participants, or Others FINRA has not solicited, and does not intend to solicit, comments on this proposed rule change. FINRA has not received any written comments from members or other interested parties. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 for 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 FINRA 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 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.14 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, 12 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6)(iii). As required under Rule 19b–4(f)(6)(iii), FINRA provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the 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. 14 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 E:\FR\FM\02OCN1.SGM 02OCN1 60954 Federal Register / Vol. 78, No. 191 / Wednesday, October 2, 2013 / Notices including whether the proposal 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 Number SR– FINRA–2013–041 on the subject line. Paper Comments tkelley on DSK3SPTVN1PROD with NOTICES • 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–FINRA–2013–041. 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 FINRA. 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–FINRA– 2013–041 and should be submitted on or before October 23, 2013. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–24007 Filed 10–1–13; 8:45 am] BILLING CODE 8011–01–P 15 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 17:48 Oct 01, 2013 Jkt 232001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–70525; File No. SR–NSX– 2013–18] Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Amend its Fee and Rebate Schedule September 26, 2013. 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 September 23, 2013, National Stock Exchange, Inc. (‘‘NSX®’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change, as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comment on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to amend its Fee and Rebate Schedule (the ‘‘Fee Schedule’’) issued pursuant to Exchange Rule 16.1(a) in order to change two of the stocks on the list of five select securities (the ‘‘Select Securities’’) for which the Exchange pays a rebate of $0.0045 per executed share to Equity Trading Permit (‘‘ETP’’) 3 Holders that direct Double Play Orders 4 in those securities to the CBOE Stock Exchange, Inc. (‘‘CBSX’’). The Exchange is proposing no other changes to the Fee Schedule except to amend the list of Select Securities. Specifically, the Exchange proposes to remove Advanced Micro Devices, Inc., (‘‘AMD’’) and Micron Technology, Inc. (‘‘MU’’) from the list of Select Securities, and replace them with Apple Inc. (‘‘AAPL’’) and Google Inc. (‘‘GOOG’’) 5 AMD and MU 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 NSX Rule 1.5 defines the term ‘‘ETP’’ as an Equity Trading Permit issued by the Exchange for effecting approved securities transactions on the Exchange’s Trading Facilities. 4 NSX Rule 11.11(c)(10) defines a ‘‘Double Play Order’’ as market or limit orders for which an ETP Holder instructs the System to route to designated away Trading Centers which are approved by the Exchange from time to time without first exposing the order to the NSX Book. A Double Play Order that is not executed in full after routing away receives a new time stamp upon return to the Exchange and is ranked and maintained in the NSX Book in accordance with Rule 11.14(a). 5 The Exchange previously filed for immediate effectiveness amendments to its Fee Schedule, effective July 1, 2013, that: (i) Established the 2 17 PO 00000 Frm 00139 Fmt 4703 Sfmt 4703 will revert to the fee and rebate programs applicable for all other securities that trade on the Exchange, which provide for a rebate of $0.0015 for Double Play Orders, other than those in the Select Securities, routed to and executed on CBSX. The text of the proposed rule change is available on the Exchange’s Web site at www.nsx.com, at the Exchange’s principal office, 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 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 Section IIIA of its Fee Schedule to change two of the five stocks on the list of Select Securities that will receive a rebate of $0.0045 per executed share to ETP Holders that direct Double Play Orders to CBSX. A Double Play Order is a market or limit order for which the ETP Holder instructs the NSX System 6 to bypass the NSX Book 7 and route the order to a designated away Trading Center(s) 8 that has been approved by $0.0045 per share rebate for executions of Double Play Orders in the Select Securities on CBSX; (ii) clarified that the unexecuted portion of a Double Play Order that is returned to NSX after its initial route to CBSX and subsequently executed on the NSX or routed away in accordance with NSX Rule 11.15(a)(ii) is subject to the standard Fee Schedule; and (iii) clarified that the $0.0030 per share routing fee applies only to orders routed by the Exchange in accordance with NSX Rule 11.15(a)(ii). In addition to AMD and MU, the Select Securities identified were Bank of America Corp. (‘‘BAC’’), Nokia Corporation (‘‘NOK’’), and Sirius XM Radio Inc. (‘‘SIRI’’). See Exchange Act Release No. 34– 69941; 78 FR 41966; SR–NSX–2013–14 [sic]. 6 Under NSX Rule 1.5, the term ‘‘System’’ is defined as ‘‘the electronic securities communications and trading facility. , . through which orders of Users are consolidated for ranking and execution.’’ 7 Under NSX Rule 1.5, the term ‘‘NSX Book’’ is defined as ‘‘the System’s electronic file of orders.’’ 8 NSX Rule 2.11(a) defines a Trading Center as other securities exchanges, facilities of securities exchanges, automated trading systems, electronic E:\FR\FM\02OCN1.SGM 02OCN1

Agencies

[Federal Register Volume 78, Number 191 (Wednesday, October 2, 2013)]
[Notices]
[Pages 60952-60954]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24007]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-70516; File No. SR-FINRA-2013-041]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a 
Proposed Rule Change to Extend the Clearly Erroneous Pilot Period and 
to Remove Certain References to Individual Stock Trading Pauses in 
FINRA Rule 11892

September 26, 2013.
    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 September 24, 2013, Financial Industry Regulatory Authority, 
Inc. (``FINRA'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by FINRA. FINRA 
has designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt of this 
filing by the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    FINRA is proposing to amend FINRA Rule 11892 (Clearly Erroneous 
Transactions in Exchange-Listed Securities) to extend the effective 
date of the clearly erroneous pilot, which currently is scheduled to 
expire on September 30, 2013. FINRA also proposes to remove certain 
references to individual stock trading pauses contained in Rule 11892. 
FINRA has designated this proposal as non-controversial and provided 
the Commission with the notice required by Rule 19b-4(f)(6)(iii) under 
the Act.\4\
---------------------------------------------------------------------------

    \4\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    The text of the proposed rule change is available on FINRA's Web 
site at https://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA 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
    FINRA proposes to amend FINRA Rule 11892 (Clearly Erroneous 
Transactions in Exchange-Listed Securities) to extend the effective 
date of the amendments set forth in File No. SR-FINRA-2010-032 (the 
``clearly erroneous pilot''). Portions of Rule 11892, explained in 
further detail below, currently are operating as a pilot set to expire 
on September 30, 2013.\5\ FINRA proposes to extend the clearly 
erroneous pilot until April 8, 2014. FINRA also proposes to remove 
references to individual stock trading pauses described in Rule 
11892(b)(4).
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 68808 (February 1, 
2013), 78 FR 9083 (February 7, 2013) (Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change To Extend the Clearly 
Erroneous Pilot Period and To Adopt a New Provision in Connection 
With the Limit Up-Limit Down Plan) (``File No. SR-FINRA-2013-012'').
---------------------------------------------------------------------------

    On September 10, 2010, the Commission approved, on a pilot basis, 
changes to FINRA Rule 11892 to provide for uniform treatment: (1) Of 
clearly erroneous execution reviews in multi-stock events involving 
twenty or more securities, and (2) in the event transactions occur that 
result in the issuance of an individual stock trading pause by the 
primary listing market and subsequent transactions that occur before 
the trading pause is in effect.\6\ FINRA also adopted additional 
changes to Rule 11892 that reduced the ability of FINRA to deviate from 
the objective standards set forth in Rule 11892,\7\ and in 2013, 
adopted a provision designed to address the operation of the clearly 
erroneous rules and the Plan to Address Extraordinary Market Volatility

[[Page 60953]]

Pursuant to Rule 608 of Regulation NMS under the Act (the ``Limit Up-
Limit Down Plan'' or the ``Plan'').\8\ FINRA believes the benefits to 
market participants from the more objective clearly erroneous 
executions rule should continue on a pilot basis through April 8, 2014, 
which is one year following the commencement of operations of the Plan. 
FINRA believes that continuing the pilot during this time will protect 
against any unanticipated consequences. Thus, FINRA believes that the 
protections of the clearly erroneous rule should continue while the 
industry gains further experience with the operation of the Limit Up-
Limit Down Plan.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 62885 (September 10, 
2010), 75 FR 56641 (September 16, 2010) (Order Granting Approval of 
Proposed Rule Change Relating to Clearly Erroneous Transactions) 
(``File No. SR-FINRA-2010-032'').
    \7\ See File No. SR-FINRA-2010-032.
    \8\ See File No. SR-FINRA-2013-012.
---------------------------------------------------------------------------

    FINRA also proposes to eliminate all references in Rule 11892 to 
individual stock trading pauses issued by a primary listing market. 
Specifically, Rule 11892(b)(4) provides specific rules that apply to 
the review of an execution as potentially clearly erroneous in the 
context of an individual stock trading pause issued for that security 
where the security is included in the S&P 500[supreg] Index, the 
Russell 1000[supreg] Index, or a pilot list of Exchange Traded Products 
(``Subject Securities''). The trading pauses described in Rule 
11892(b)(4) are being phased out as securities become subject to the 
Plan pursuant to a phased implementation schedule. The Plan already is 
operational with respect to all Subject Securities, and thus, FINRA 
believes that all references to individual stock trading pauses should 
be removed, including all cross-references to Rule 11892(b)(4) 
contained in other portions of Rule 11892.\9\
---------------------------------------------------------------------------

    \9\ FINRA notes that certain Exchange Traded Products (``ETPs'') 
are not yet subject to the Limit Up-Limit Down Plan. Because such 
ETPs are not on the pilot list of securities, such ETPs are not 
subject to Rule 11892(b)(4). Accordingly, the proposed rule change 
does not change the status quo with respect to such ETPs. As 
amended, all securities, including ETPs not subject to the Limit Up-
Limit Down Plan, will continue to be subject to Rule 11892(b)(1) 
through (3). See Securities Exchange Act Release No. 65101 (August 
11, 2011), 76 FR 51097 (August 17, 2011) (Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change To Amend FINRA Rule 
11892) (SR-FINRA-2011-039).
---------------------------------------------------------------------------

    FINRA has filed the proposed rule change for immediate 
effectiveness. The effective date of the proposed rule change will be 
the date of filing.
2. Statutory Basis
    FINRA believes that the proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder that 
are applicable to a national securities association and, in particular, 
with the requirements of Section 15A of the Act.\10\ In particular, the 
proposal is consistent with Section 15A(b)(6) \11\ because it is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade and, in general, to 
protect investors and the public interest.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78o-3.
    \11\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

    FINRA believes that the clearly erroneous pilot promotes just and 
equitable principles of trade in that it promotes transparency and 
uniformity across markets concerning review of transactions as clearly 
erroneous. More specifically, FINRA believes that the extension of the 
clearly erroneous pilot would help assure that the determination of 
whether a clearly erroneous trade has occurred will be based on clear 
and objective criteria, and that the resolution of the incident will 
occur promptly through a transparent process.
    The proposed rule change also 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. Although the Limit Up-Limit Down Plan will become fully 
operational during the same time period as the proposed extended 
clearly erroneous pilot, FINRA believes that maintaining the pilot will 
help to protect against unanticipated consequences. To that end, the 
extension will allow FINRA to determine whether the pilot provisions of 
Rule 11892 are appropriate once the Plan is fully operational and, if 
so, whether improvements can be made. Finally, the elimination of 
references to individual stock trading pauses will help to avoid 
confusion amongst market participants, which is consistent with the 
protection of investors and the public interest and therefore 
consistent with the Act. As described above, individual stock trading 
pauses have been replaced by the Limit Up-Limit Down Plan with respect 
to all Subject Securities.

B. Self-Regulatory Organization's Statement on Burden on Competition

    FINRA does not believe that the proposed rule change implicates any 
competitive issues. FINRA believes that the other self-regulatory 
organizations also are filing similar proposals, and thus, that the 
proposal will help to ensure consistency across the marketplace.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received from Members, Participants, or Others

    FINRA has not solicited, and does not intend to solicit, comments 
on this proposed rule change. FINRA has not received any written 
comments from members or other interested parties.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    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 for 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\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), FINRA provided the Commission with written notice of 
its intent to file the proposed rule change, along with a brief 
description and the 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.
---------------------------------------------------------------------------

    FINRA 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 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.\14\
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    \14\ 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,

[[Page 60954]]

including whether the proposal 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 Number SR-FINRA-2013-041 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-FINRA-2013-041. 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 FINRA. 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-FINRA-2013-041 and should be 
submitted on or before October 23, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-24007 Filed 10-1-13; 8:45 am]
BILLING CODE 8011-01-P