[Federal Register Volume 76, Number 71 (Wednesday, April 13, 2011)]
[Notices]
[Pages 20763-20764]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-8865]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64242; File No. SR-NSX-2011-05]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Its Rules To Extend Pilot Program Regarding Clearly Erroneous
Executions
April 7, 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 April 6, 2011, National Stock Exchange, Inc. filed with the
Securities and Exchange Commission (``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 comment 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
National Stock Exchange, Inc. (``NSX[reg]'' or
``Exchange'') is proposing to amend its rules to extend a certain pilot
program regarding clearly erroneous executions.
The text of the proposed rule change is available on the Exchange's
Web site at http://www.nsx.com, at the principal office of the
Exchange, 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 these 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
With this rule change, the Exchange is proposing to extend the
pilot program currently in effect regarding clearly erroneous
executions under NSX Rule 11.19. Currently, unless otherwise extended
or approved permanently, this pilot program will expire on April 11,
2011. The instant rule filing proposes to extend the pilot program
until the earlier of August 11, 2011 or the date on which the limit up/
limit down mechanism to address extraordinary market volatility, if
adopted, applies to the Circuit Breaker Securities as defined in
Commentary .05 of Rule 11.20.
NSX Rule 11.19 (Clearly Erroneous Executions) was approved by the
Securities and Exchange Commission (the ``Commission'') on September
10, 2010 on a pilot basis to end on December 10, 2010.\3\ The pilot
program end date was subsequently extended until April 11, 2011.\4\
Similar rule changes were adopted by other markets in the national
market system in a coordinated manner. During the pilot period, the
Exchange, in conjunction with the Commission and other markets, has
continued to assess the effectiveness of the pilot program. The
Exchange, in consultation with other markets and the Commission, has
determined that the duration of this pilot program should be extended
until August 11, 2011 or to coincide, if applicable, with the earlier
implementation date of the limit up/limit down mechanism. Accordingly,
[[Page 20764]]
pursuant to the instant rule filing, the expiration date of the pilot
program referenced in the first two sentences of Rule 11.19 is proposed
to be changed from ``April 11, 2011'' to the earlier of August 11, 2011
or the date on which the limit up/limit down mechanism, if adopted,
applies to the Circuit Breaker Securities.
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\3\ See Securities Exchange Act Release No. 62886 (September 10,
2010), 75 FR 56613 (September 16, 2010) (SR-NSX-2010-07).
\4\ See Securities Exchange Act Release No. 63484 (December 9,
2010), 75 FR 78330 (December 15, 2010) (SR-NSX-2010-16).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) and Section 11A of the Act,\5\ in
general, and Section 6(b)(5) of the Act,\6\ in particular, in that it
is designed, among other things, to promote clarity, transparency and
full disclosure, in so doing, to prevent fraudulent and manipulative
acts and practices, 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 maintain fair
and orderly markets and protect investors and the public interest.
Moreover, the proposed rule change is not discriminatory in that it
uniformly applies to all ETP Holders. The Exchange believes that the
extension of the pilot program will promote uniformity among markets
with respect to clearly erroneous executions.
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\5\ 15 U.S.C. 78f(b) and 15 U.S.C. 78k-1, respectively.
\6\ 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 inappropriate burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
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 \7\ and Rule 19b-4
(f)(6)(iii) thereunder.\8\ 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.\9\ 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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\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 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.
\9\ 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-NSX-2011-05 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-NSX-2011-05. 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-NSX-2011-05 and should be
submitted on or before May 4, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\10\
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\10\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8865 Filed 4-12-11; 8:45 am]
BILLING CODE 8011-01-P