[Federal Register Volume 76, Number 10 (Friday, January 14, 2011)]
[Notices]
[Pages 2732-2733]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-771]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63685; File No. SR-NASDAQ-2010-074]
Self-Regulatory Organizations; The NASDAQ Stock Market LLC;
Notice of Designation of Longer Period for Commission Action on
Proceedings To Determine Whether To Disapprove Proposed Rule Change, as
Modified by Amendment No. 1, To Adopt Rule 4753(c) as a Six Month Pilot
in 100 NASDAQ-Listed Securities
January 10, 2011.
I. Introduction
On June 18, 2010, The NASDAQ Stock Market LLC (``Nasdaq'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to implement, on a six-month pilot basis, a
volatility-based trading pause in 100 Nasdaq-listed securities
(``Volatility Guard''). On June 25, 2010, Nasdaq filed Amendment No. 1
to the proposed rule change. The proposed rule change, as amended, was
published for comment in the Federal Register on July 15, 2010.\3\ The
Commission received four comment letters on the proposal.\4\ Nasdaq
responded to these comments on August 12, 2010.\5\ The Commission
subsequently extended the time period in which to either approve the
proposed rule change, or to institute proceedings to determine whether
to disapprove the proposed rule change, to October 13, 2010.\6\ On
October 13, 2010, the Commission issued an order instituting
disapproval proceedings.\7\ The Commission thereafter received one
comment letter, which requested that the proposed rule change be
disapproved.\8\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 62468 (July 7,
2010), 75 FR 41258.
\4\ See Letter from Joe Ratterman, Chairman and Chief Executive
Officer, BATS Global Markets, Inc., to Hon. Mary Schapiro, Chairman,
Commission, dated July 1, 2010 (``BATS Letter''); Letter from Jose
Marques, Managing Director, Deutsche Bank Securities Inc., to
Elizabeth M. Murphy, Secretary, Commission, dated July 21, 2010
(``Deutsche Bank Letter''); Letter from Janet M. Kissane, Senior
Vice President, Legal and Corporate Secretary, NYSE Euronext, to
Elizabeth Murphy, Secretary, Commission, dated August 3, 2010
(``NYSE Letter''); Letter from Ann L. Vlcek, Managing Director and
Associate General Counsel, Securities Industry and Financial Markets
Association, to Elizabeth M. Murphy, Secretary, Commission, dated
June 25, 2010 (``SIFMA Letter'').
\5\ See Letter from T. Sean Bennett, Assistant General Counsel,
Nasdaq, to Elizabeth M. Murphy, Secretary, Commission (``Nasdaq
response'').
\6\ See Securities Exchange Act Release No. 62740 (August 18,
2010), 75 FR 52049 (August 24, 2010).
\7\ See Securities Exchange Act Release No. 63098, 75 FR 64384
(October 19, 2010).
\8\ See Letter from Timothy Quast, Managing Director, ModernIR,
to Elizabeth M. Murphy, Secretary, Commission, dated November 11,
2010.
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Section 19(b)(2) of the Act \9\ provides that, after initiating
dispproval proceedings, the Commission shall issue an order approving
or disapproving the proposed rule change not later than 180 days after
the date of publication of notice of the filing of the proposed rule
change. The Commission may extend the period for issuing an order
approving or disapproving the proposed rule change, however, by not
more than 60 days if the Commission determines that a longer period is
appropriate and publishes the reasons for such determination. The
proposed rule change was published for notice and comment in the
Federal Register on July 15, 2010. January 11, 2011 is 180 days from
that date, and March 12, 2011, is an additional 60 days from that date.
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\9\ 15 U.S.C. 78s(b)(2).
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The Commission finds it appropriate to designate a longer period
within which to issue an order approving or disapproving the proposed
rule change so that it has sufficient time to consider this proposed
rule change and the issues raised in the comment letters that have been
submitted in connection with this filing. Specifically, the Commission
believes the proposal raises issues as to whether the Volatility Guard,
by halting trading on Nasdaq when the price of a security moves quickly
over a short period of time, will exacerbate the volatility of trading
in that security on the other exchanges and over-the-counter trading
centers that remain open. In addition, because the thresholds for
triggering the Volatility
[[Page 2733]]
Guard, and the length of the trading halt that results, differ from
those of the recently approved, market-wide single-stock circuit
breakers, the Commission believes the proposal raises issues as to
whether the operation of the Volatility Guard will interfere with, or
otherwise limit the effectiveness of, the circuit breakers, the goal of
which is to prevent potentially destabilizing price volatility across
the U.S. securities markets. Extending the time within which to approve
or disapprove this proposed rule change will enable the Commission to
more fully consider these issues.
Accordingly, the Commission, pursuant to Section 19(b)(2) of the
Act,\10\ designates March 11, 2011, as the date by which the Commission
should either approve or disapprove the proposed rule change.\11\
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\10\ 15 U.S.C. 78s(b)(2).
\11\ The Comission notes that it is extending the time period in
which to issue an approval or disapproval order to March 11, 2011,
since the full 60-day extension would expire on Saturday, March 12,
2011.
\12\ 17 CFR 200.30-3(a)(57).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-771 Filed 1-13-11; 8:45 am]
BILLING CODE 8011-01-P