[Federal Register Volume 75, Number 116 (Thursday, June 17, 2010)]
[Notices]
[Pages 34503-34504]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-14671]
[[Page 34503]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62274; File No. SR-NYSEArca-2010-50]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca
Rule 6.65 To Provide That the Exchange Will Halt Trading When an
Underlying Security Is the Subject of a Trading Pause
June 10, 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 June 10, 2010, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (the ``Commission'')
the proposed rule change as described in Items I, and II below, which
Items have been prepared by the self-regulatory organization. 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 amend NYSE Arca Rule 6.65 to provide that
the Exchange will halt trading when an underlying security is the
subject of a trading pause. The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, on
the Commission's Web site at http://www.sec.gov, and at http://www.nyse.com.
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 amend NYSE Arca Rule 6.65 governing
Trading Halts and Suspensions to add a new subsection to the rule that
would provide that the Exchange shall halt trading in any options
contract when the underlying security has been paused by the primary
market.
The Exchange proposes this rule to provide for how the Exchange
will respond when trading in any underlying security has paused, as set
forth in the stock-by-stock circuit breakers proposed by the equities
markets to respond to extraordinary market volatility in individual
securities.\3\ The Exchange believes that when trading has paused on
the equities markets pursuant to these proposed rules, trading should
also be halted in the options markets.
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\3\ See Securities Exchange Act Release Notice Nos. 62121 (May
19, 2010), 75 FR 28834 (May 24, 2010) (SR-BATS-2010-14); 62122 (May
19, 2010), 75 FR 28833 (May 24, 2010) (SR-EDGA-2010-1); 62123 (May
19, 2010), 75 FR 28844 (May 24, 2010) (SR-EDGX-2010-1); 62124 (May
19, 2010), 75 FR 28828 (May 24, 2010) (SR-BX-2010-37); 62125 (May
19, 2010), 75 FR 28836 (May 24, 2010) (SR-ISE-2010-48); 62126 (May
19, 2010), 75 FR 28831 (May 24, 2010) (SR-NYSE-2010-39); 62127 (May
19, 2010), 75 FR 28837 (May 24, 2010) (SR-NYSEAmex-2010-46); 62128
(May 19, 2010), 75 FR 28830 (May 24, 2010) (SR-NYSEArca-2010-41);
62129 (May 19, 2010), 75 FR 28839 (May 24, 2010) (SR-Nasdaq-2010-
061); 62130 (May 19, 2010), 75 FR 28842 (May 24, 2010) (SR-CHX-2010-
10); 62131 (May 19, 2010), 75 FR 28845 (May 24, 2010) (SR-NSX-2010-
05); 62132 (May 19, 2010), 75 FR 28847 (May 24, 2010) (SR-CBOE-2010-
47); 62133 (May 19, 2010), 75 FR 28841 (May 19, 2010), 75 FR 28841
(May 24, 2010) (SR-FINRA-2010-25).
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Accordingly, the Exchange proposes to add a new subsection to Rule
6.65 to provide that trading on the Exchange in any option contract
shall be halted whenever trading in the underlying security has been
paused by the primary market. The Exchange proposes that trading in
such options contracts may be resumed upon a determination by the
Exchange that the conditions that led to the pause are no longer
present and that the interests of a fair and orderly market are best
served by a resumption of trading. However, under no circumstances
would trading resume before the Exchange has received notification that
the underlying security has resumed trading.
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''),\4\ 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) \5\ 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 a fair and orderly
market so that when trading is paused in the equities markets, options
contracts related to that security are also paused.
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\4\ 15 U.S.C. 78f(b)(5).
\5\ 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
Because the proposed rule change: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest, provided that the self-regulatory
organization has given 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 proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-
4(f)(6) thereunder.\7\
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(6). The Commission notes that the
Exchange has met this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing.\8\ However,
Rule 19b-
[[Page 34504]]
4(f)(6)(iii) permits the Commission to designate a shorter time if such
action is consistent with the protection of investors and the public
interest. The Exchange requested that the Commission waive the 30-day
operative delay, as specified in Rule 19b-4(f)(6)(iii),\9\ which would
make the rule change effective and operative upon filing. The
Commission approved filings from the exchanges and the Financial
Industry Regulatory Authority to institute a single stock trading pause
for equity securities that experience a 10% change in price during a
five minute period.\10\ The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because it will allow NYSE Arca to halt trading for
individual equity options at the same time that the primary listing
market implements the pilot for eligible underlying stocks.\11\
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\8\ 17 CFR 240.19b-4(f)(6).
\9\ 17 CFR 240.19b-4(f)(6)(iii).
\10\ See Securities Exchange Act Release Nos. 62251 and 62252
(June 10, 2010).
\11\ For purposes only of waiving the 30-day operative delay,
the Commission has 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 such proposed rule
change, the Commission may summarily abrogate 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NYSEArca-2010-50 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-NYSEArca-2010-50. 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 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
publicly available. All submissions should refer to File Number SR-
NYSEArca-2010-50 and should be submitted on or before July 8, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-14671 Filed 6-16-10; 8:45 am]
BILLING CODE 8010-01-P