Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 12163 

33 15 U.S.C. 78s(b)(3)(A)(iii). 

34 17 CFR 240.19b–4(f)(6). 

35 15 U.S.C. 78s(b)(3)(A)(iii). 

36 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file 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. 

37 17 CFR 240.19b–4(f)(6). 

38 17 CFR 240.19b–4(f)(6)(iii). 

39For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

40 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b4. 

that end, the proposed rule change will, 

among other things, establish the 

Facility’s procedures regarding the 

execution, routing to the DBK and 

routing to other automated trading 

centers of permissible orders during the 

Short Sale Period, and the execution of 

orders marked ‘‘short exempt.’’ 

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. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 33 and Rule 

19b–4(f)(6) thereunder.34 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 35 and Rule 19b–4(f)(6)(iii) 

thereunder.36

A proposed rule change filed under 

Rule 19b–4(f)(6) 37 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),38 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 hereby grants 

the request.39 Waiving the 30-day 

operative delay will allow the Exchange 

to implement the proposed amendments 

by February 28, 2011, which, as noted 

by the Exchange, is the compliance date 

for amendments to Regulation SHO 

under the Act. By waiving the operative 

delay, the Exchange will be able to 

comply with the amendments to 

Regulation SHO by February 28, 2011. 

Therefore, the Commission believes it is 

consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay and 

designates the proposal as operative 

upon filing. 

At any time within 60 days of the 

filing of such 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 rulecomments@sec.gov. Please include File 

Number SR–NYSE–2011–07 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–NYSE–2011–07. 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 20549–1090. Copies of 

the filing will also be available for 

inspection and copying at the NYSE’s 

principal office and on its Internet Web 

site at http://www.nyse.com. 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–NYSE–2011–07 and should 

be submitted on or before March 25, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.40

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4891 Filed 3–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63975; File No. SR–BX– 

2011–010] 

Self-Regulatory Organizations; 

NASDAQ OMX BX; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt New Rule 4763 

Regarding Short Sales 

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 February 

18, 2011, NASDAQ OMX BX LLC (‘‘BX’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been 

substantially prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 


jlentini on DSKJ8SOYB1PROD with NOTICES
12164 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 

3 15 U.S.C. 78s(b)(1). 

4 17 CFR 240.19b–4. 

5 17 CFR 242.200(g); 17 CFR 242.201. See 

Securities Exchange Act Release No. 61595 (Feb. 26, 

2010), 75 FR 11232 (Mar. 10, 2010) (‘‘Adopting 

Release’’) (amending Rules 201 and 200 of 

Regulation SHO to adopt a short sale price test 

restriction and ‘‘short exempt’’ marking 

requirement). See also Securities Exchange Act 

Release No. 63247 (Nov. 4, 2010), 75 FR 68702 

(Nov. 9, 2010) (extending the compliance date of 

the amendments to Rules 201 and 200 of Regulation 

SHO until February 28, 2011). 

6See supra note 5. 

7 Id. 

8Rule 201(a)(9) states the term ‘‘trading center’’ 

will have the same meaning as in Rule 600(b)(78). 

17 CFR 242.201(a)(9). Rule 600(b)(78) of Regulation 

NMS defines a ‘‘trading center’’ as ‘‘a national 

securities exchange or national securities 

association that operates an SRO trading facility, an 

alternative trading system, an exchange market 

maker, an OTC market maker, or any other broker 

or dealer that executes orders internally by trading 

as principal or crossing orders as agent.’’ 17 CFR 

242.600(b)(78). 

9See 17 CFR 242.201(b). The amendments to Rule 

200(g) of Regulation SHO provide a ‘‘short exempt’’ 

marking requirement. See 17 CFR 242.200(g). 

10See Rule 201(a) of Regulation SHO. The System 

will utilize the national best bid from the systems 

information processor. Rule 201(a)(1) defines 

‘‘covered security’’ to mean any ‘‘NMS stock’’ as 

defined under Rule 600(b)(47) of Regulation NMS. 

17 CFR 242.201(a)(1). Rule 600(b)(47) of Regulation 

NMS defines an ‘‘NMS stock’’ as ‘‘any NMS security 

other than an option.’’ 17 CFR 242.600(b)(47). Rule 

600(b)(46) of Regulation NMS defines an ‘‘NMS 

security’’ as ‘‘any security or class of securities for 

which transaction reports are collected, processed, 

and made available pursuant to an effective 

transaction reporting plan, or an effective national 

market system plan for reporting transactions in 

listed options.’’ 17 CFR 242.600(b)(46). 

11See BX Rule 4751(a). The term ‘‘System’’ shall 

mean the automated system for order execution and 

trade reporting owned and operated by BX. 

12See Rule 201(b)(1)(i) of Regulation SHO. Such 

execution or display needs to be in compliance 

with applicable rules concerning minimum pricing 

increments. See 17 CFR 242.612. 

13See 17 CFR 242.201(b)(1)(ii). See also Division 

of Trading and Markets: Responses to Frequently 

Asked Questions Concerning Rule 201 of 

Regulation SHO, Q&A No. 2.1. 

14See 17 CFR 242.201(b)(1)(iii)(A). 

15See 17 CFR 242.201(b)(1)(iii)(B). 

16See Rules 200(g)(2), 201(c) and 201(d) of 

Regulation SHO. See also Division of Trading and 

Markets: Responses to Frequently Asked Questions 

Concerning Rule 201 of Regulation SHO, Q&A Nos. 

5.4 and 5.5. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange, pursuant to Section 

19(b)(1) of the Act 3 and Rule 19b–4 4

thereunder, proposes to adopt new Rule 

4763 as a written policy or procedure to 

implement the amendments to Rules 

200(g) and 201 of Regulation SHO.5 BX 

proposes to implement these changes no 

later than February 28, 2011 to coincide 

with the compliance date for the 

amendments to Rules 200(g) and 201 of 

Regulation SHO. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http:// 

nasdaqomxbx.cchwallstreet.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 Exchange 

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 

On February 26, 2010, the 

Commission adopted amendments to 

Rules 200(g) and 201 of Regulation 

SHO.6 The amendments became 

effective on May 10, 2010, and 

compliance is required by February 28, 

2011.7 The amendments to Rule 201 of 

Regulation SHO require trading centers 8

such as BX to establish, maintain, and 

enforce certain written policies and 

procedures reasonably designed to 

comply with the rule.9 BX is proposing 

to adopt new Rule 4763 as a written 

policy and procedure to implement the 

amendments to Rules 200(g) and 201 of 

Regulation SHO. 

Proposed Rule 4763(a) defines the 

terms ‘‘covered security,’’ ‘‘listing 

market,’’ and ‘‘national best bid’’ as 

having the same meaning as such terms 

have in Rule 201 of Regulation SHO.10

Under Proposed Rule 4763(b), entitled 

‘‘Short Sale Price Test,’’ the System 11

will not execute or display a short sale 

order with respect to a covered security 

at a price that is less than or equal to 

the current national best bid if the price 

of that security decreases by 10% or 

more from the security’s closing price 

on the listing market as of the end of 

regular trading hours on the prior day 

(‘‘Trigger Price’’).12

Under Proposed Rule 4763(c), 

Duration of Short Sale Price Test, once 

triggered by the listing market, the short 

sale price test restriction shall remain in 

effect until the next trading day when a 

national best bid for the covered 

security is calculated and disseminated 

on a current and continuing basis by a 

plan processor pursuant to an effective 

national market system,13 as provided 

for in Regulation SHO Rule 201(b)(1)(ii) 

(the ‘‘Short Sale Period’’). 

Under Proposed Rule 4763(d), Repricing of Orders during Short Sale 

Period, during a Short Sale Period, short 

sale orders that are limited to the 

current national best bid or lower and 

short sale market orders will be repriced by the System one minimum 

allowable price increment above the 

current national best bid (‘‘Permitted 

Price’’). To reflect declines in the 

national best bid, the Exchange will 

continue to re-price a short sale order at 

the lowest Permitted Price down to the 

order’s original limit price, or if a 

market order, until the order is filled. 

Non-displayed orders between the BX 

bid and offer at the time of receipt will 

also be re-priced upward to a Permitted 

Price to correspond with a rise in the 

national best bid. During the Short Sale 

Period, immediate or cancel (‘‘IOC’’) 

orders requiring that all or part of the 

order be executed immediately will be 

executed to the extent possible at a 

Permitted Price and higher and then 

cancelled, and will not be re-priced. 

Inter-market sweep orders not marked 

‘‘short exempt’’ will be handled in the 

same manner as IOC orders. 

Pursuant to Proposed Rule 4763(e), 

Execution of Permissible Orders During 

Short Sale Period, during the Short Sale 

Period, the System will execute and 

display a short sale order without regard 

to whether the order is at a Permitted 

Price or higher if, at the time of initial 

display of the short sale order, the order 

was at a price above the then current 

national best bid. This determination is 

consistent with Rule 201(b)(1)(iii)(A) of 

Regulation SHO.14 Short sale orders that 

are entered into the System prior to the 

Short Sale Period but that are not 

displayed will be re-priced as described 

in Proposed Rule 4763(d) as set forth 

above. 

Finally, under Proposed Rule 4763(f), 

Short Exempt Orders, during the Short 

Sale Period, the System will execute 

and display orders marked ‘‘short 

exempt’’ without regard to whether the 

order is at a Permitted Price or higher.15

The System will accept orders marked 

‘‘short exempt’’ at any time when the 

System is open for order entry 

regardless of whether the short sale 

price test has been triggered in the 

covered security. BX member firms 

marking orders ‘‘short exempt’’ in 

reliance on Rule 201(c) or 201(d) are 

responsible for ensuring that any such 

orders meet the criteria of these 

provisions and are accurately marked as 

‘‘short exempt.’’ 16


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 12165 

17 15 U.S.C. 78f(b)(5). 

18 15 U.S.C. 78k–1(a)(1). 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

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. 

21 17 CFR 240.19b–4(f)(6). 

22 Id. 

23See supra note 5. 

24For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

25 17 CFR 200.30–3(a)(12). 

1 15 U.S.C.78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of the 

Act,17 which requires, among other 

things, the rules of an exchange to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. The 

proposed rule change also is designed to 

support the principles of Section 

11A(a)(1) of the Act 18 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 implements rules adopted by 

the Commission in Regulation SHO 

under the Act. 

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 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 

No written comments were either 

solicited or received. 

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 after the date of 

the filing, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 19 and Rule 19b– 

4(f)(6) 20 thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 21 normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b– 

4(f)(6)(iii) 22 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. BX has 

requested that the Commission waive 

the 30-day operative delay so that it may 

implement the change no later than 

February 28, 2011 to coincide with the 

compliance date for the amendments to 

Rules 200(g) and 201 of Regulation 

SHO. The Commission believes that 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because the proposed rule change, 

among other things, implements the 

amendments to Rules 200(g) and 201 of 

Regulation SHO which have a February 

28, 2011 compliance date.23 For this 

reason, the Commission designates the 

proposed rule change to be operative 

upon filing with the Commission.24

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 

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 rulecomments@sec.gov. Please include File 

Number SR–BX–2011–010 on the 

subject line. 

Paper Comment 

• 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–BX–2011–010. 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 the 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 available publicly. 

All submissions should refer to File 

Number SR–BX–2011–010 and should 

be submitted on or before March 25, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4893 Filed 3–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63977; File No. SR–NYSE– 

2011–05] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending its 

Rule 440B (Short Sales) in Order To 

Implement the Provisions of Rule 201 

of Regulation SHO Under the 

Securities Exchange Act of 1934 

February 25, 2011. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on February 

24, 2011, New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 


jlentini on DSKJ8SOYB1PROD with NOTICES