[Federal Register Volume 75, Number 99 (Monday, May 24, 2010)]
[Notices]
[Pages 28837-28839]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-12419]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62127; File No. SR-NYSEAmex-2010-46]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing of
a Proposed Rule Change Adding NYSE Amex Equities Rule 80C To Provide
for a Trading Pause for Individual Securities When the Price Moves 10
Percent or More
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, NYSE Amex LLC (``NYSE Amex'' or the ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by NYSE Amex. 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 proposes to add NYSE Amex Equities Rule 80C to provide
for a trading pause for individual securities when the price moves 10
percent or more. A copy of this filing is available on the Exchange's
Web site at http://www.nyse.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 self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to add NYSE Amex Equities Rule 80C to provide
for a trading pause for individual securities for which the Exchange is
the primary listing market if the price of such security moves 10% or
more from a sale in a preceding five-minute period. The Exchange is
proposing this rule addition in consultation with other markets and
staff of the Securities and Exchange Commission to provide for uniform
market-wide trading pause standards for individual securities in the
S&P 500[supreg] Index that experience rapid price movement, as set
forth below.
The Exchange is proposing that this rule be implemented on a pilot
basis, set to end on December 10, 2010. During this pilot period, the
rule would be in effect only with respect to securities included in the
S&P 500 [supreg] Index. During that pilot period, the Exchange will
[[Page 28838]]
continue to assess whether additional securities need to be added and
whether the parameters of the rule would need to be modified to
accommodate trading characteristics of different securities.
As proposed, NYSE Amex Equities Rule 80C would enable the Exchange
to pause trading in an individual security listed on the Exchange if
the price moves by 10% as compared to prices of that security in the
preceding five-minute period during a trading day, which period is
defined as a ``Trading Pause.'' To enable the market to absorb the
opening price of a security and to participate in the close, as
proposed, the proposed rule would be in effect from 9:45 a.m. to 3:35
p.m., Eastern Time.
Proposed NYSE Amex Equities Rule 80C(b) sets forth the re-opening
procedures following a Trading Pause. As proposed, Designated Market
Makers (``DMM'') at the Exchange would be responsible for re-opening
trading at the end of the Trading Pause in a manner similar to existing
procedures set forth in Rule 123D, subject to specified revisions.
First, unlike the regular procedures for publishing indications after a
halt, an indication shall be published as close to the beginning of the
Trading Pause as possible and such indications shall be updated until
the security has re-opened. Note, however, that the security may re-
open even if the DMM does not have an opportunity to update an
indication to reflect changes to order flow before the re-opening time.
Second, any re-openings following a Trading Pause are not subject to
the requirements that (i) a minimum of three minutes must elapse
between the first indication and a security's re-opening, or (ii) if
more than one indication is published, a minimum of one minute must
elapse before a security's re-opening. Third, the Exchange shall
publish Order Imbalance Information, as defined in Rule 15(c),
approximately every 15 seconds following the imposition of the Trading
Pause until the security re-opens.
Unlike a re-opening following a regulatory halt, the re-opening of
a security following a Trading Pause shall be at the end of the Trading
Pause. Such re-opening may be either on a trade or a quote. However, in
the event of a significant imbalance, the Exchange may delay the re-
opening of the security past the five-minute Trading Pause period. The
Exchange will notify other markets if it cannot reopen because of
issues unrelated to an order imbalance, thereby enabling other markets
to resume trading even if the primary market has not re-opened. The
Exchange notes that if it re-opens the security after other markets
have resumed trading, such reopening is subject to Rule 611(b)(3) of
Regulation NMS as an exception to the Order Protection Rule.
The 10% or more move in price will be calculated every second by
comparing each last consolidated sale price of a security (``Trigger
Trade'') during the preceding second to a reference price (the
``Calculation Time''). For purposes of this calculation, the reference
price shall be any transaction in that security printed to the
Consolidated Tape during the five-minute period before the Calculation
Time. Because the calculation period begins at 9:45 a.m., trades
occurring after 9:45 a.m. may be a Trigger Trade; however, the
reference price(s) for such Trigger Trades will begin at 9:45 a.m. In
such case, in the first five minutes of the calculation period, the
reference prices for a Trigger Trade will not be based on five minutes
of trading in that security. For example, a trade at 9:45:05 will be
compared only to trades between 9:45:00 and 9:45:05. The last potential
Trigger Trade will be at 3:35 p.m., so that such Trading Pause will end
at 3:40 p.m.
As proposed, only regular way, in-sequence transactions qualify as
either a Trigger Trade or a reference price. To ensure that erroneous
executions do not trigger a Trading Pause, the Exchange also proposes
that it can exclude a transaction price from use as a reference price
or Trigger Trade if it concludes that the transaction price resulted
from an erroneous execution.
The proposed rule further provides that if a Trading Pause is
triggered, the Exchange will immediately notify the single plan
processor responsible for consolidation of information for the
security.
In addition, if the listing market for a security that trades on
the Exchange on an unlisted trading privilege basis pauses under its
respective rules, the Exchange will also pause trading in that security
until the listing market has either resumed trading or the Exchange has
received notice from the primary listing market that trading may
resume. If the primary listing market does not reopen trading in the
security within 10 minutes of notification of a trading pause, the
Exchange may resume trading of the security.
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''),\3\ 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) \4\ 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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\3\ 15 U.S.C. 78f(b)(5).
\4\ 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
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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.\5\
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\5\ 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 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
[[Page 28839]]
Send an e-mail to [email protected]. Please include
File Number SR-NYSEAmex-2010-46 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAmex-2010-46. 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 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 such filing also will be
available for inspection and copying at the principal office of NYSE
Amex. 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
publicly available. All submissions should refer to File Number SR-
NYSEAmex-2010-46 and should be submitted on or before June 3, 2010.\6\
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\6\ The Commission believes that a 10-day comment period is
reasonable, given the urgency of the matter. It will provide
adequate time for comment.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12419 Filed 5-21-10; 8:45 am]
BILLING CODE 8010-01-P