[Federal Register Volume 78, Number 29 (Tuesday, February 12, 2013)]
[Notices]
[Pages 9983-9985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-03190]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68852; File No. SR-NSX-2013-05]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Rule 11.20B To Extend the Pilot Program Regarding Trading Pauses
in Individual Securities Due to Extraordinary Market Volatility
February 6, 2013.
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 January 28, 2013, National Stock Exchange, Inc.
(``NSX[supreg]'' or ``Exchange'') 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
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 amend NSX Rule 11.20B, which provides for
trading pauses in individual securities due to extraordinary market
volatility, to extend the effective date of the pilot by which such
rule operates from the current scheduled expiration date of February 4,
2013, until the earlier of the initial date of operations of the
Regulation NMS Plan to Address Extraordinary Market Volatility or
February 4, 2014.
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
The Exchange proposes to amend NSX Rule 11.20B, which provides for
trading pauses in individual securities due to extraordinary market
volatility, to extend the effective date of the pilot by which such
rule operates from the current scheduled expiration date of February 4,
2013,\3\ until the earlier of the initial date of operations of the
Regulation NMS Plan to Address Extraordinary Market Volatility or
February 4, 2014. The pilot will continue to operate as to individual
securities until such security is subject to the Regulation NMS Plan to
Address Extraordinary Market Volatility.
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\3\ See Securities Exchange Act Release No. 67556 (August 1,
2012), 77 FR 47156 (August 7, 2012) (SR-NYSE-2012-31).
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NSX Rule 11.20B requires the Exchange to pause trading in an
individual security listed on the Exchange if the price moves by a
specified percentage as compared to prices of that security in the
preceding five-minute period during a trading day. The pilot was
developed and implemented as a market-wide initiative by the Exchange
and other national securities exchanges in consultation with the
Commission staff and is currently applicable to all NMS stocks and
specified exchange-traded products.\4\
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\4\ The Exchange notes that the other national securities
exchanges and the Financial Industry Regulatory Authority have
adopted the pilot in substantially similar form. See Securities
Exchange Act Release No. 62252 (June 10, 2010), 75 FR 34186 (June
16, 2010) (File Nos. SR-BATS-2010-014; SR-EDGA-2010-01; SR-EDGX-
2010-01; SR-BX-2010-037; SR-ISE-2010-48; SR-NYSE-2010-39; SR-
NYSEAmex-2010-46; SR-NYSEArca-2010-41; SR-NASDAQ-2010-061; SR-CHX-
2010-10; SR-NSX-2010-05; and SR-CBOE-2010-047) and Securities
Exchange Act Release No. 62251 (June 10, 2010), 75 FR 34183 (June
16, 2010) (SR-FINRA-2010-025). See also Securities Exchange Act
Release No. 62884 (September 10, 2010), 75 FR 56618 (September 16,
2010) (File Nos. SR-BATS-2010-018; SR-BX-2010-044; SR-CBOE-2010-065;
SR-CHX-2010-14; SR-EDGA-2010-05; SR-EDGX-2010-05; SR-ISE-2010-66;
SR-NASDAQ-2010-079; SR-NYSE-2010-49; SR-NYSEAmex-2010-63; SR-
NYSEArca-2010-61; and SR-NSX-2010-08 and Securities Exchange Act
Release No. 62883 (September 10, 2010), 75 FR 56608 (September 16,
2010) (SR-FINRA-2010-033). See also Securities Exchange Act Release
No. 63500 (December 9, 2010), 75 FR 78309 (December 15, 2010) (SR-
NYSE-2010-81). A proposal to, among other things, expand the pilot
to include all NMS stocks not already included therein was
implemented on August 8, 2011. See Securities Exchange Act Release
No. 64735 (June 23, 2011), 76 FR 38243 (June 29, 2011) (File Nos.
SR-BATS-2011-016; SR-BYX-2011-011; SR-BX-2011-025; SR-CBOE-2011-049;
SR-CHX-2011-09; SR-EDGA-2011-15; SR-EDGX-2011-14; SR-FINRA-2011-023;
SR-ISE-2011-028; SR-NASDAQ-2011-067; SR-NYSE-2011-21; SR-NYSEAmex-
2011-32; SR-NYSEArca-2011-26; SR-NSX-2011-06; and SR-Phlx-2011-64).
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[[Page 9984]]
The extension proposed herein would allow the pilot to continue to
operate without interruption until implementation of the Regulation NMS
Plan to Address Extraordinary Market Volatility.\5\ The Exchange
anticipates that the Regulation NMS Plan to Address Extraordinary
Market Volatility will not begin initial operations on February 4, 2013
as currently planned, but will be delayed. If the Regulation NMS Plan
to Address Extraordinary Market Volatility has an initial date of
operations before February 4, 2014, the proposed pilot for trading
pauses would expire at that time.
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\5\ See Securities Exchange Act Release No. 67091 (May 31,
2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (Order Approving,
on a Pilot Basis, the National Market System Plan To Address
Extraordinary Market Volatility by BATS Exchange, Inc., BATS Y-
Exchange, Inc., Chicago Board Options Exchange, Incorporated,
Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange,
Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX,
Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market LLC, National
Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and
NYSE Arca, Inc).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6 of the Act,\6\ and the rules and regulations thereunder and,
in particular, the requirements of Section 6(b) of the Act.\7\
Specifically, the Exchange believes the proposed rule change furthers
the objective of Section 6(b)(5) of the Act \8\ in that it is designed
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 protect investors and the public interest.
The Exchange believes that the change proposed herein meets these
requirements in that it promotes uniformity across markets concerning
decisions to pause trading in a security when there are significant
price movements, which promotes just and equitable principles of trade
and removes impediments to, and perfects the mechanism of, a free and
open market and a national market system. Additionally, extension of
the pilot until the earlier of the initial date of operations of the
Regulation NMS Plan to Address Extraordinary Market Volatility or
February 4, 2014 would allow the pilot to continue to operate without
interruption while the Exchange and the Commission further assess the
effect of the pilot on the marketplace or whether other initiatives
should be adopted in lieu of the current pilot, which contributes to
the protection of investors and the public interest.
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\6\ 15 U.S.C. 78f.
\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. The proposed changes are
being made to extend the operation of the trading pause pilot until the
earlier of the initial date of operations of the Regulation NMS Plan to
Address Extraordinary Market Volatility or February 4, 2014 and would
allow the pilot to continue to operate without interruption until
implementation of the Regulation NMS Plan to Address Extraordinary
Market Volatility, which contributes to the protection of investors and
the public interest. Other competing equity exchanges are subject to
the same trading pause requirements specified in the Plan. Thus, the
proposed changes will not impose any burden on competition while
providing trading pause requirements specified in the Plan.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-(f)(6) thereunder.\10\
Because the 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 prior to
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, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
(f)(6)(iii) thereunder.
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 17 CFR 240.19b-(f)(6). In addition, Rule 19b-(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's 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
Exchange has satisfied this requirement.
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A proposed rule change filed under Rule19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. 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
would allow the pilot program to continue uninterrupted. Accordingly,
the Commission hereby grants the Exchange's request and designates the
proposal operative upon filing.\13\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ 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 such proposed rule
change, the Commission summarily may
[[Page 9985]]
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 email to [email protected]. Please include
File Number SR-NSX-2013-05 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-2013-05. This file
number should be included on the subject line if email 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
10:00 a.m. and 3:00 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-2013-05 and should be
submitted on or before March 5, 2013.
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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03190 Filed 2-11-13; 8:45 am]
BILLING CODE 8011-01-P