Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Rule 11.19 To Extend Pilot Program Regarding Clearly Erroneous Executions, 62782-62784 [2013-24547]
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Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
of the Act 10 in general, and furthers the
objectives of Section 6(b)(5) of the Act 11
in particular, in that it is designed 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
Exchange would do this though a
proposed rule change clarifying that
daily quoting requirements pursuant to
Rule 1014 are not changed by the
monthly compliance review proposal,
and remain the same, to the benefit of
market participants.
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 not
necessary or appropriate in furtherance
of the purposes of the Act. The
Exchange does not believe that this
proposal should have any competitive
impact because the Exchange’s rules as
noted are similar to those of other
options exchanges.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
sroberts on DSK5SPTVN1PROD with FRONT MATTER
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange believes that the
foregoing proposed rule change may
take effect upon filing with the
Commission pursuant to Section
19(b)(3)(A) 12 of the Act and Rule 19b–
4(f)(6)(iii) thereunder 13 because the
foregoing 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.
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
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6) requires a self-regulatory organization to
give the Commission written notice of its intent to
file 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.
11 15
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21:08 Oct 21, 2013
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action is: (i) Necessary or appropriate in
the public interest; (ii) for the protection
of investors; or (iii) otherwise in
furtherance of the purposes of the Act.
If the Commission takes such action, the
Commission shall institute proceedings
to determine whether the proposed rule
should be approved or disapproved.
be submitted on or before November 12,
2013.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24664 Filed 10–21–13; 8:45 am]
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:
BILLING CODE 8011–01–P
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–Phlx–2013–99 on the subject line.
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change To Amend
Rule 11.19 To Extend Pilot Program
Regarding Clearly Erroneous
Executions
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–Phlx–2013–99. 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 inspection and copying 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–Phlx–2013–99 and should
October 1, 2013.
PO 00000
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70589; File No. SR–NSX–
2013–19]
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 30, 2013, National Stock
Exchange, Inc. (‘‘NSX®’’ or the
‘‘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
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 proposes to extend a
pilot program related to Rule 11.19,
entitled ‘‘Clearly Erroneous
Executions.’’ The Exchange also
proposes to remove certain references to
individual stock trading pauses
contained in Rule 11.19(c)(4) and to
amend to Rule 11.19 to make technical
and non-substantive changes in the rule
text. The Exchange 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.3
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nsx.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6)(iii).
1 15
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Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
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
sroberts on DSK5SPTVN1PROD with FRONT MATTER
The purpose of this filing is to extend
the effectiveness of the Exchange’s
current rule applicable to Clearly
Erroneous Executions and to remove
references to individual stock trading
pauses described in Rule 11.19(c)(4).
Portions of Rule 11.19, explained in
further detail below, are currently
operating as a pilot program set to
expire on September 30, 2013.4 The
Exchange proposes to extend the pilot
program to April 8, 2014.
On September 10, 2010, the
Commission approved, on a pilot basis,
changes to NSX Rule 11.19 to provide
for uniform treatment: (1) Of clearly
erroneous execution reviews in multistock 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 on
the Exchange.5 The Exchange also
adopted changes to Rule 11.19 that
reduced the ability of the Exchange to
deviate from the objective standards set
forth in Rule 11.19 6 and, in 2013,
adopted a provision designed to address
the operation of the Plan to Address
Extraordinary Market Volatility
Pursuant to Rule 608 of Regulation NMS
under the Act (the ‘‘Limit Up-Limit
Down Plan’’ or the ‘‘Plan’’).7 The
4 See
Securities Exchange Act Release No. 68803
(February 1, 2013); 78 FR 9078 (February 7, 2013);
SR–NSX–2013–06.
5 See Securities Exchange Act Release No. 62886
(September 10, 2010); 75 FR 56613 (September 16,
2010); SR–NSX–2010–06 [sic].
6 Id.
7 See Securities Exchange Act Release No. 69087
(March 14, 2013), 78 FR 16325 (March 14, 2013)
[sic]; SR–NSX–2013–09 [sic]; Securities Exchange
Act Release No. 67091 (May 31, 2012), 77 FR 33498
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21:08 Oct 21, 2013
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Exchange 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. The Exchange
believes that continuing the pilot during
this time will protect against any
unanticipated consequences. Thus, the
Exchange believes that the protections
of the Clearly Erroneous Rule should
continue while the industry gains
further experience operating the Limit
Up-Limit Down Plan.
The Exchange also proposes to
eliminate all references in Rule 11.19 to
individual stock trading pauses issued
by a primary listing market.
Specifically, Rule 11.19(c)(4) provides
specific rules to follow with respect to
review of an execution as potentially
clearly erroneous when there was an
individual stock trading pause issued
for that security and the security is
included in the S&P 500® Index, the
Russell 1000® Index, or a pilot list of
Exchange Traded Products (‘‘Circuit
Breaker Securities’’). The stock trading
pauses described in Rule 11.19(c)(4) are
being phased out as securities become
subject to the Plan pursuant to a phased
implementation schedule. The Plan is
already operational with respect to all
Circuit Breaker Securities and thus the
Exchange believes that all references to
individual stock trading pauses should
be removed, including all crossreferences to Rule 11.19(c)(4) contained
in other portions of Rule 11.19.8
Finally, the Exchange is proposing
amendments to Rule 11.19 to make
technical and non-substantive changes
in the rule text. These changes include
removing incorrect references in the
first paragraph of the rule to paragraph
(i) when the correct reference should be
to paragraph (j), and correcting certain
other language and punctuation issues.
2. Statutory Basis
The Exchange believes that its
proposal is consistent with the
requirements of the Act and the rules
and regulations thereunder that are
applicable to a national securities
exchange and, in particular, with the
(June 6, 2012); SR–NSX–2011–11 [sic] (May 31,
2012) [sic]; see also NSX Rule 11.19(j).
8 The Exchange notes that certain Exchange
Traded Products (‘‘ETPs’’) are not yet subject to the
Plan. Because such ETPs are not on the pilot list
of securities, such ETPs are not subject to Rule
11.19(c)(4). See Securities Exchange Act Release
No. 65114 (August 11, 2011); 76 FR 51439 (August
18, 2011); SR–NSX–2011–10. 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 Plan, will continue to be
subject to Rule 11.19(c)(1) through (3).
PO 00000
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62783
requirements of Section 6(b) of the Act.9
In particular, the proposal is consistent
with Section 6(b)(5) of the Act,10
because it would promote just and
equitable principles of trade and remove
impediments to, and perfect the
mechanism of, a free and open market
and a national market system. The
Exchange believes that the pilot
program 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, the Exchange believes that
the extension of the 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 would also 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 Plan will become
fully operational during the same time
period as the proposed extended pilot,
the Exchange believes that maintaining
the pilot will help to protect against
unanticipated consequences. To that
end, the extension will allow the
Exchange to determine whether Rule
11.19 is necessary once the Plan is fully
operational and, if so, whether
improvements can be made. The
elimination of references to individual
stock trading pauses will help to avoid
confusion among 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 Plan with respect to all Circuit
Breaker Securities.
With respect to the technical, nonsubstantive changes to the text of Rule
11.19, the Exchange believes that these
are consistent with Section 6(b)(5) of the
Act in that they correct certain incorrect
references to other section of the rule
text and other language and punctuation
items, thereby enhancing the clarity of
Exchange rules, which is consistent
with promoting just and equitable
principles of trade and the protection of
investors and the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change implicates any
competitive issues. To the contrary, the
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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62784
Federal Register / Vol. 78, No. 204 / Tuesday, October 22, 2013 / Notices
Exchange believes that the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) and other national securities
exchanges are also filing similar
proposals, and thus, that the proposal
will help to ensure consistent rules
across market centers.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments on the proposed
rule change were neither solicited nor
received.
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 11 and Rule 19b–4(f)(6)(iii)
thereunder.12
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
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.13
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
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6)(iii). As required under
Rule 19b-4(f)(6)(iii), the Exchange 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.
13 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).
sroberts on DSK5SPTVN1PROD with FRONT MATTER
12 17
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21:08 Oct 21, 2013
Jkt 232001
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–
NSX–2013–19 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–NSX–2013–19. 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
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–NSX–2013–
19 and should be submitted on or before
November 12, 2013.
PO 00000
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Sfmt 4703
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2013–24547 Filed 10–21–13; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–70613; File No. SR–FINRA–
2013–036]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Designation
of a Longer Period for Commission
Action on a Proposed Rule Change
Relating to Wash Sale Transactions
and FINRA Rule 5210 (Publication of
Transactions and Quotations)
October 4, 2013.
I. Introduction
On August 15, 2013, Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a
proposed rule change to amend FINRA
Rule 5210. The proposed rule change
was published for comment in the
Federal Register on September 4, 2013.3
The Commission received five
comments on the proposal.4
Section 19(b)(2) of the Act 5 provides
that within 45 days of the publication of
notice of the filing of a proposed rule
change, or within such longer period up
to 90 days as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or as to which the
self-regulatory organization consents,
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 70276
(August 28, 2013), 78 FR 54502 (‘‘Notice’’).
4 See letter from Anonymous to Elizabeth M.
Murphy, Secretary, Commission, dated September
9, 2013; letter from William A. Jacobson, Clinical
Professor of Law, and Director, Cornell Securities
Law Clinic, and Jimin Lee, Cornell University Law
School, to Elizabeth M. Murphy, Secretary,
Commission, dated September 25, 2013; letter from
Stuart J. Kaswell, Executive Vice President,
Managing Director and General Counsel, Managed
Funds Association, to Elizabeth M. Murphy,
Secretary, Commission, dated September 25, 2013;
letter from Manisha Kimmel, Executive Director,
Financial Industry Forum, to Elizabeth M. Murphy,
Secretary, Commission, dated September 25, 2013;
and letter from Theodore R. Lazo, Managing
Director and Associate General Counsel, SIFMA, to
Elizabeth M. Murphy, Secretary, Commission, dated
October 4, 2013.
5 15 U.S.C. 78s(b)(2).
1 15
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]]>Agencies
[Federal Register Volume 78, Number 204 (Tuesday, October 22, 2013)]
[Notices]
[Pages 62782-62784]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-24547]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-70589; File No. SR-NSX-2013-19]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 11.19 To Extend Pilot Program Regarding Clearly Erroneous
Executions
October 1, 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 30, 2013, National Stock Exchange, Inc.
(``NSX[supreg]'' or the ``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
comment 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 a pilot program related to Rule
11.19, entitled ``Clearly Erroneous Executions.'' The Exchange also
proposes to remove certain references to individual stock trading
pauses contained in Rule 11.19(c)(4) and to amend to Rule 11.19 to make
technical and non-substantive changes in the rule text. The Exchange
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.\3\
---------------------------------------------------------------------------
\3\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nsx.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
[[Page 62783]]
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 purpose of this filing is to extend the effectiveness of the
Exchange's current rule applicable to Clearly Erroneous Executions and
to remove references to individual stock trading pauses described in
Rule 11.19(c)(4). Portions of Rule 11.19, explained in further detail
below, are currently operating as a pilot program set to expire on
September 30, 2013.\4\ The Exchange proposes to extend the pilot
program to April 8, 2014.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 68803 (February 1,
2013); 78 FR 9078 (February 7, 2013); SR-NSX-2013-06.
---------------------------------------------------------------------------
On September 10, 2010, the Commission approved, on a pilot basis,
changes to NSX Rule 11.19 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 on the Exchange.\5\ The Exchange also
adopted changes to Rule 11.19 that reduced the ability of the Exchange
to deviate from the objective standards set forth in Rule 11.19 \6\
and, in 2013, adopted a provision designed to address the operation of
the Plan to Address Extraordinary Market Volatility Pursuant to Rule
608 of Regulation NMS under the Act (the ``Limit Up-Limit Down Plan''
or the ``Plan'').\7\ The Exchange 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. The Exchange
believes that continuing the pilot during this time will protect
against any unanticipated consequences. Thus, the Exchange believes
that the protections of the Clearly Erroneous Rule should continue
while the industry gains further experience operating the Limit Up-
Limit Down Plan.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 62886 (September 10,
2010); 75 FR 56613 (September 16, 2010); SR-NSX-2010-06 [sic].
\6\ Id.
\7\ See Securities Exchange Act Release No. 69087 (March 14,
2013), 78 FR 16325 (March 14, 2013) [sic]; SR-NSX-2013-09 [sic];
Securities Exchange Act Release No. 67091 (May 31, 2012), 77 FR
33498 (June 6, 2012); SR-NSX-2011-11 [sic] (May 31, 2012) [sic]; see
also NSX Rule 11.19(j).
---------------------------------------------------------------------------
The Exchange also proposes to eliminate all references in Rule
11.19 to individual stock trading pauses issued by a primary listing
market. Specifically, Rule 11.19(c)(4) provides specific rules to
follow with respect to review of an execution as potentially clearly
erroneous when there was an individual stock trading pause issued for
that security and the security is included in the S&P 500[supreg]
Index, the Russell 1000[supreg] Index, or a pilot list of Exchange
Traded Products (``Circuit Breaker Securities''). The stock trading
pauses described in Rule 11.19(c)(4) are being phased out as securities
become subject to the Plan pursuant to a phased implementation
schedule. The Plan is already operational with respect to all Circuit
Breaker Securities and thus the Exchange believes that all references
to individual stock trading pauses should be removed, including all
cross-references to Rule 11.19(c)(4) contained in other portions of
Rule 11.19.\8\
---------------------------------------------------------------------------
\8\ The Exchange notes that certain Exchange Traded Products
(``ETPs'') are not yet subject to the Plan. Because such ETPs are
not on the pilot list of securities, such ETPs are not subject to
Rule 11.19(c)(4). See Securities Exchange Act Release No. 65114
(August 11, 2011); 76 FR 51439 (August 18, 2011); SR-NSX-2011-10.
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 Plan, will continue to be subject to Rule 11.19(c)(1) through
(3).
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Finally, the Exchange is proposing amendments to Rule 11.19 to make
technical and non-substantive changes in the rule text. These changes
include removing incorrect references in the first paragraph of the
rule to paragraph (i) when the correct reference should be to paragraph
(j), and correcting certain other language and punctuation issues.
2. Statutory Basis
The Exchange believes that its proposal is consistent with the
requirements of the Act and the rules and regulations thereunder that
are applicable to a national securities exchange and, in particular,
with the requirements of Section 6(b) of the Act.\9\ In particular, the
proposal is consistent with Section 6(b)(5) of the Act,\10\ because it
would promote just and equitable principles of trade and remove
impediments to, and perfect the mechanism of, a free and open market
and a national market system. The Exchange believes that the pilot
program 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, the Exchange
believes that the extension of the 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 would also 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 Plan will become fully operational during the
same time period as the proposed extended pilot, the Exchange believes
that maintaining the pilot will help to protect against unanticipated
consequences. To that end, the extension will allow the Exchange to
determine whether Rule 11.19 is necessary once the Plan is fully
operational and, if so, whether improvements can be made. The
elimination of references to individual stock trading pauses will help
to avoid confusion among 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 Plan with respect to all Circuit
Breaker Securities.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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With respect to the technical, non-substantive changes to the text
of Rule 11.19, the Exchange believes that these are consistent with
Section 6(b)(5) of the Act in that they correct certain incorrect
references to other section of the rule text and other language and
punctuation items, thereby enhancing the clarity of Exchange rules,
which is consistent with promoting just and equitable principles of
trade and the protection of investors and the public interest.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change
implicates any competitive issues. To the contrary, the
[[Page 62784]]
Exchange believes that the Financial Industry Regulatory Authority,
Inc. (``FINRA'') and other national securities exchanges are also
filing similar proposals, and thus, that the proposal will help to
ensure consistent rules across market centers.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments on the proposed rule change were neither solicited
nor received.
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 \11\ and Rule 19b-
4(f)(6)(iii) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6)(iii). As required under Rule 19b-
4(f)(6)(iii), the Exchange 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.
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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 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.\13\
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\13\ 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-NSX-2013-19 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-NSX-2013-19. 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 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-NSX-2013-19 and should be
submitted on or before November 12, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Kevin M. O'Neill,
Deputy Secretary.
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\14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2013-24547 Filed 10-21-13; 8:45 am]
BILLING CODE 8011-01-P
