[Federal Register Volume 75, Number 99 (Monday, May 24, 2010)]
[Notices]
[Pages 28828-28830]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12416]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62124; File No. SR-BX-2010-037]
Self-Regulatory Organizations; Notice of Filing of a Proposed
Rule Change by NASDAQ OMX BX, Inc. To Adopt Rule 4120(a)(11) Concerning
Individual Stock Trading Pauses and To Adopt Related IM-4120-3
May 19, 2010.
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 May 18, 2010, NASDAQ OMX BX, Inc. (the ``Exchange'' or ``BX'') 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing this proposed rule change to adopt Rule
4120(a)(11) concerning individual stock trading pauses in certain
securities, and to adopt related IM-4120-3.
The text of the proposed rule change is below. Proposed new
language is in italics and proposed deletions are in [brackets].\3\
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\3\ The text of the proposed rule change is available from BX's
Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/Filings/, at the Exchange's principal office, and at the
Commission's Public Reference Room.
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* * * * *
4120. Trading Halts
(a) Authority to Initiate Trading Halts or Pauses
[[Page 28829]]
In circumstances in which the Exchange deems it necessary to
protect investors and the public interest, the Exchange, pursuant to
the procedures set forth in paragraph (c):
(1)-(10) No change.
(11) If a primary listing market issues an individual stock
trading pause in any of the Circuit Breaker Securities, as defined
in IM-4120-3, the Exchange will pause trading in that security until
trading has resumed on the primary listing market. If, however,
trading has not resumed on the primary listing market and ten
minutes have passed since the individual stock trading pause message
has been received from the responsible single plan processor, the
Exchange may resume trading in such stock.
(b)-(c) No change.
IM-4120-1. No change.
IM-4120-2. No change.
IM-4120-3. Circuit Breaker Securities Pilot
The provisions of paragraph (a)(11) of this Rule shall be in
effect during a pilot set to end on December 10, 2010. During the
pilot, the term ``Circuit Breaker Securities'' shall mean the
securities included in the S&P 500 [supreg] Index.
* * * * *
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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The primary listing markets for U.S. stocks are in the process of
amending their rules so that they may, from time to time, issue a
trading pause for an individual security if the price of such security
moves 10% or more from a sale in a preceding five-minute period. The
Exchange is proposing the rule change described below in consultation
with other markets and Commission staff to provide for uniform market-
wide trading pause standards for individual securities in the S&P 500
[supreg] Index, as set forth below. The Exchange is not currently the
primary listing market for any securities, and thus, will not be
issuing any trading pauses pursuant to its rules.
The Exchange proposes to add a new paragraph to BX Rule 4120(a) to
allow the Exchange to pause trading in an individual stock when the
primary listing market for such stock issues a trading pause in any
Circuit Breaker Securities, as defined below and in proposed IM-4120-3.
If, however, trading has not resumed on the primary listing market and
ten minutes have passed since the individual stock trading pause
message has been received from the responsible single plan processor,
the Exchange may resume trading in such stock.
The proposed rule would apply to trading pauses issued by primary
listing markets in ``Circuit Breaker Securities,'' as defined in
proposed IM-4120-3. Specifically, on a pilot basis, set to end on
December 10, 2010, Circuit Breaker Securities would mean the securities
included in the S&P 500 [supreg] Index. Thus, proposed paragraph (11)
of the Rule would be in effect only with respect to securities in the
S&P 500 [supreg] Index.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6 of the Act,\4\ in general, and with
Sections 6(b)(5) of the Act,\5\ in particular, in that the proposal is
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest. The proposed
rule change is also designed to support the principles of Section
11A(a)(1) \6\ 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 pause trading in a security when there are significant
price movements.
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\4\ 15 U.S.C. 78f.
\5\ 15 U.S.C. 78f(b)(5).
\6\ 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
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.\7\
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\7\ The Commission notes that the Exchange has requested
accelerated approval of the filing.
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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 Exchange Act. Comments may be submitted
by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-BX-2010-037 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-BX-2010-037. This
file number should be included on the subject line if e-mail 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 (http://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
[[Page 28830]]
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
a.m. and 3 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-BX-2010-037 and should be
submitted on or before June 3, 2010.\8\
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\8\ The Commission believes that a 10-day comment period is
reasonable, given the urgency of the matter. It will provide
adequate time for comment.
\9\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12416 Filed 5-21-10; 8:45 am]
BILLING CODE 8010-01-P