[Federal Register Volume 75, Number 240 (Wednesday, December 15, 2010)]
[Notices]
[Pages 78333-78334]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31440]
[[Page 78333]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63480; File No. SR-NYSEAmex-2010-116]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex
Equities Rule 128, Which Governs Clearly Erroneous Executions, To
Extend the Effective Date of the Pilot
December 9, 2010.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that on December 7, 2010, NYSE Amex LLC (the ``Exchange'' or
``NYSE Amex'') 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\ 15 U.S.C. 78a.
\3\ 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 Amex Equities Rule 128, which
governs clearly erroneous executions, to extend the effective date of
the pilot by which portions of such Rule operate until the earlier of
approval by the Securities and Exchange Commission (``SEC'' or
``Commission'') to make such pilot permanent or April 11, 2011. The
text of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, http://www.sec.gov, and 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend NYSE Amex Equities Rule 128, which
governs clearly erroneous executions, to extend the effective date of
the pilot by which portions of such Rule operate, until the earlier of
Commission approval to make such pilot permanent or April 11, 2011. The
pilot is currently scheduled to expire on December 10, 2010.\4\
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\4\ See Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010) (SR-NYSEAmex-2010-60).
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On September 10, 2010, the Commission approved, on a pilot basis,
market-wide amendments to exchanges' rules for clearly erroneous
executions to set forth clearer standards and curtail discretion with
respect to breaking erroneous trades. In connection with this pilot
initiative, the Exchange amended NYSE Amex Equities Rule 128(c),
(e)(2), (f), and (g). The amendments provide for uniform treatment of
clearly erroneous execution reviews (1) in Multi-Stock Events \5\
involving twenty or more securities, and (2) in the event transactions
occur that result in the issuance of an individual security trading
pause by the primary market and subsequent transactions that occur
before the trading pause is in effect on the Exchange.\6\ The
amendments also eliminated appeals of certain rulings made in
conjunction with other exchanges with respect to clearly erroneous
transactions and limited the Exchange's discretion to deviate from
Numerical Guidelines set forth in the Rule in the event of system
disruptions or malfunctions.
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\5\ Terms not defined herein are defined in NYSE Amex Equities
Rule 128.
\6\ Separately, the Exchange has proposed extend the effective
date of the trading pause pilot under NYSE Amex Equities Rule 80C,
which requires 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. See SR-NYSEAmex-2010-117.
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If the pilot were not extended, the prior versions of paragraphs
(c), (e)(2), (f), and (g) of NYSE Amex Equities Rule 128 would be in
effect, and the NYSE Amex would have different rules than other
exchanges and greater discretion in connection with breaking clearly
erroneous transactions. The Exchange proposes to extend the pilot
amendments to NYSE Amex Equities Rule 128 until the earlier of
permanent approval by the Commission or April 11, 2011 in order to
maintain uniform rules across markets and allow the pilot to continue
to operate without interruption during the same period that the Rule
80C trading pause rule pilot is also in effect. Extension of the pilot
would permit the Exchange, other national securities exchanges and the
Commission to further assess the effect of the pilot on the
marketplace, including whether additional measures should be added,
whether the parameters of the rule should be modified or whether other
initiatives should be adopted in lieu of the current pilot.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \7\ of the
Act, in general, and furthers the objectives of Section 6(b)(5) \8\ in
particular in that it 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 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. More specifically, the NYSE Amex believes that the
extension of the pilot will 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 changes
also should 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.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
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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.
[[Page 78334]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \9\ and Rule 19b-
4(f)(6)(iii) thereunder.\10\ 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 because such waiver will allow the
pilot program to continue uninterrupted and help ensure uniformity
among the national securities exchanges and FINRA with respect to the
treatment of clearly erroneous transactions.\11\ Accordingly, the
Commission waives the 30-day operative delay requirement and designates
the proposed rule change as operative upon filing with the Commission.
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Commission notes that the Exchange has satisfied
this requirement.
\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 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NYSEAmex-2010-116 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-NYSEAmex-2010-116. 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-
NYSEAmex-2010-116 and should be submitted on or before January 5, 2011.
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. 2010-31440 Filed 12-14-10; 8:45 am]
BILLING CODE 8011-01-P