[Federal Register Volume 75, Number 240 (Wednesday, December 15, 2010)]
[Notices]
[Pages 78316-78318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-31480]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63503; File No. SR-FINRA-2010-064]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the Effective Date of the Trading Pause
Pilot
December 9, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on December 7, 2010, Financial Industry Regulatory Authority, Inc.
(``FINRA'') 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 FINRA. 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
FINRA is proposing to amend FINRA Rule 6121 (Trading Halts Due to
Extraordinary Market Volatility) to extend the effective date of the
pilot, which is currently scheduled to expire on December 10, 2010,
until April 11, 2011.
The text of the proposed rule change is available on FINRA's Web
site at
[[Page 78317]]
http://www.finra.org, at the principal office of FINRA 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, FINRA 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. FINRA 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
FINRA proposes to amend FINRA Rule 6121.01 to extend the effective
date of the pilot by which such rule operates, which is currently
scheduled to expire on December 10, 2010, until April 11, 2011.
FINRA Rule 6121.01 provides that if a primary listing market has
issued an individual stock trading pause under its rules, FINRA will
halt trading otherwise than on an exchange in that security until
trading has resumed on the primary listing market. The pilot was
developed and implemented as a market-wide initiative by FINRA and
other self-regulatory organizations (``SROs'') in consultation with
Commission staff, and is currently applicable to the S&P 500[supreg]
Index,\3\ the Russell 1000[supreg] Index and a pilot list of Exchange
Traded Products.\4\
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\3\ See Securities Exchange Act Release No. 62251 (June 10,
2010), 75 FR 34183 (June 16, 2010) (Order Approving File No. SR-
FINRA-2010-025).
\4\ See Securities Exchange Act Release No. 62883 (September 10,
2010), 75 FR 56608 (September 16, 2010) (Order Approving File No.
SR-FINRA-2010-033).
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The extension proposed herein would allow the pilot to continue to
operate without interruption while FINRA and the other SROs further
assess the effect of the pilot on the marketplace and whether other
initiatives should be adopted in lieu of the current pilot.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\5\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade and, in general, to protect investors and the
public interest. FINRA believes that the proposed rule change meets
these requirements in that it promotes uniformity across markets
concerning decisions to pause trading in a security when there are
significant price movements.
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\5\ 15 U.S.C. 78o-3(b)(6).
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Additionally, extension of the pilot to April 11, 2011 would allow
the pilot to continue to operate without interruption while FINRA and
the other SROs further assess the effect of the pilot on the
marketplace and whether other initiatives should be adopted in lieu of
the current pilot.
B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA 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.
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
Because the foregoing proposed rule change does not: (1)
Significantly affect the protection of investors or the public
interest; (2) impose any significant burden on competition; and (3)
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, it 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). When filing a proposed rule change
pursuant to Rule 19b-4(f)(6) under the Act, a self-regulatory agency
is required to give 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 date of filing of the proposed rule change, or such shorter
time as designated by the Commission. The Commission notes that
FINRA has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\8\
However, Rule 19b-4(f)(6) \9\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. FINRA has requested that the
Commission waive the 30-day operative delay.
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\8\ 17 CFR 240.19b-4(f)(6)(iii).
\9\ Id.
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The Commission has considered FINRA's request to waive the 30-day
operative delay. 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 the investor confusion that could
result from a temporary interruption in the pilot program.\10\
Therefore, the Commission designates the proposed rule change to be
operative upon filing.
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\10\ For the purposes only of waiving the operative date of this
proposal, 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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
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-FINRA-2010-064 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-FINRA-2010-064. 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
[[Page 78318]]
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 website 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 FINRA. 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-FINRA-2010-064 and should be submitted
on or before January 5, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31480 Filed 12-14-10; 8:45 am]
BILLING CODE 8011-01-P