[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20389-20390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8620]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64194; File No. SR-CBOE-2011-031]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Related to the Extension of the CBSX Individual Stock
Trading Pause Pilot Program
April 5, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on March 31, 2011, the Chicago Board Options Exchange,
Incorporated (``Exchange'' or ``CBOE'') 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 Exchange. 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 extend the individual stock trading pause
pilot program pertaining to the CBOE Stock Exchange (``CBSX,'' the
CBOE's stock trading facility). This rule change simply seeks to extend
the pilot. No other changes to the pilot are being proposed. The text
of the proposed rule change is available on the Exchange's Web site
(http://www.cboe.org/Legal), at the Exchange's Office of the Secretary
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 Exchange 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
Rule 6.3C, Individual Stock Trading Pauses Due to Extraordinary
Market Volatility, was approved by the Commission on June 10, 2010 on a
pilot basis. The pilot is currently set to expire on April 11, 2011.\3\
The rule was developed in consultation with U.S. listing markets to
provide for uniform market-wide trading pause standards for certain
individual stocks that experience rapid price movement.\4\ As the
duration of the pilot expires on April 11, 2011, the Exchange is
proposing to extend the effectiveness of Rule 6.3C through the earlier
of August 11, 2011 or the date on which a limit up-limit down mechanism
to address extraordinary market volatility, if adopted, applies to the
pilot stocks.
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\3\ See Securities Exchange Act Release Nos. 62252 (June 10,
2010), 75 FR 34186 (June 16, 2010) (SR-CBOE-2010-047) (approval
order establishing pilot through December 10, 2010) and 63502
(December 9, 2010), 75 FR 78306 (December 15, 2010) (SR-CBOE-2010-
112) (extension of pilot through April 11, 2011).
\4\ The pilot list of stocks originally included all stocks in
the S&P 500 Index, but it has been expanded to also include all
stocks in the Russell 1000 Index and a pilot list of Exchange Traded
Products. See Securities Exchange Act Release No. 62884 (September
10, 2010), 75 FR 56618 (September 16, 2010) (SR-CBOE-2010-065).
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2. Statutory Basis
Extension of the pilot period will allow the Exchange to continue
to operate the pilot on an uninterrupted basis. Accordingly, CBOE
believes the proposed rule change is consistent with the Act \5\ and
the rules and regulations under the Act applicable to a national
securities exchange and, in particular, the requirements of Section
6(b) of the Act.\6\ Specifically, the Exchange believes the proposed
rule change is consistent with the Section 6(b)(5) \7\ requirements
that the rules of an exchange be designed to promote just and equitable
principles of trade, to prevent fraudulent and manipulative acts and,
in general, to protect investors and the public interest. The proposed
rule change is also designed to support the principles of Section
11A(a)(1) \8\ 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
[[Page 20390]]
across markets concerning decisions to pause trading in a stock when
there are significant price movements.
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\5\ 15 U.S.C. 78a et seq.
\6\ 15 U.S.C. 78(f)(b).
\7\ 15 U.S.C. 78(f)(b)(5).
\8\ 15 U.S.C. 78k-1(a)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition
CBOE 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
The Exchange neither solicited nor received comments on the
proposal.
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 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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change
pursuant to Rule 19b-4(f)(6) under the Act, an exchange 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 the Exchange
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.\11\
However, Rule 19b-4(f)(6) \12\ permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay.
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\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ Id.
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The Commission has considered the Exchange'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.\13\ For this
reason, the Commission designates the proposed rule change to be
operative upon filing.
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\13\ For the purposes only of waiving the operative delay 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, as amended, 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-CBOE-2011-031 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-CBOE-2011-031. 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 offices 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 available publicly.
All submissions should refer to File Number SR-CBOE-2011-031, and
should be submitted on or before May 3, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8620 Filed 4-11-11; 8:45 am]
BILLING CODE 8011-01-P