Federal Register / Vol. 76, No. 68 / Friday, April 8, 2011 / Notices 19819 

5Section E.7. of the CHX Schedule of Fees and 

Assessments. 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(4). 

8 15 U.S.C. 78s(b)(3)(A)(ii). 

9 17 CFR 240.19b–4(f)(2). 10 17 CFR 200.30–3(a)(12). 

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 

Through this filing, the Exchange is 

proposing to alter its schedule of fees for 

Participants to repeal the Trade 

Processing Fee credit currently paid to 

institutional brokers. The Trade 

Processing Fee credit is a credit paid to 

CHX institutional brokers based upon 

the amount of Trade Processing Fees 5

collected by the Exchange from the 

parties to a non-tape, clearing-only 

submission. 

Currently, the Fee Schedule provides 

for a Trade Processing Fee credit of 4% 

per side of the Trade Processing Fees 

received by the Exchange paid to the 

originating broker, plus 12% of the 

Trade Processing Fees received by the 

Exchange paid to the broker of credit, 

for the portion(s) of the transaction 

handled by the broker of credit. The 

Exchange proposes to eliminate the 

Trade Processing Fee credit currently 

paid to institutional brokers while 

retaining the Trade Processing Fee 

charge to Participants for this service. 

The Exchange plans, under a different 

rule filing, to propose rules relating to 

non-tape, clearing-only submissions and 

does not believe that it is appropriate to 

consider providing credits associated 

with Trade Processing Fees until these 

rules have been submitted to, and 

approved by, the Commission. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act 6 in general, and 

furthers the objectives of Section 6(b)(4) 

of the Act 7 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among its members. The Exchange 

plans, under a different rule filing, to 

propose rules relating to non-tape, 

clearing-only submissions and does not 

believe that it is appropriate to consider 

providing credits associated with Trade 

Processing Fees until these rules have 

been submitted to, and approved by, the 

Commission. 

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 Regarding 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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act 8 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder 9 because it establishes or 

changes a due, fee, or other charge 

applicable only to a member imposed by 

the self-regulatory organization. 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 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–CHX–2011–02 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–CHX–2011–02. 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–CHX– 

2011–02 and should be submitted on or 

before April 29, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8373 Filed 4–7–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64174; File No. SR– 

NASDAQ–2011–042] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Pilot Period of the Trading Pause for 

Individual Stocks Contained in the 

Standard & Poor’s 500 Index, Russell 

1000 Index, and Specified Exchange 

Traded Products That Experience a 

Price Change of 10% or More During a 

Five-Minute Period 

April 4, 2011. 

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

Securities Exchange Act of 1934 


srobinson on DSKHWCL6B1PROD with NOTICES
19820 Federal Register / Vol. 76, No. 68 / Friday, April 8, 2011 / Notices 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 62252 

(June 10, 2010), 75 FR 34186 (June 16, 2010) (SR– 

NASDAQ–2010–061). 

4The term ‘‘Listing Markets’’ refers collectively to 

NYSE, NYSE Amex, NYSE Arca, and the Exchange. 

5Securities Exchange Act Release No. 62884 

(September 10, 2010), 75 FR 56618 (September 16, 

2010) (SR–NASDAQ–2010–079). 

6Securities Exchange Act Release No. 63505 

(December 9, 2010), 75 FR 78302 (December 15, 

2010) (SR–NASDAQ–2010–162). 

7 15 U.S.C. 78f(b)(5). 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on March 31, 

2011, The NASDAQ Stock Market LLC 

(‘‘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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange proposes to extend the 

pilot period of the trading pause for 

individual stocks contained in the 

Standard & Poor’s 500 Index, Russell 

1000 Index, and specified Exchange 

Traded Products that experience a price 

change of 10% or more during a fiveminute period, so that the pilot will 

now expire 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. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

brackets. 

* * * * * 

4120. Trading Halts 

(a) Authority To Initiate Trading Halts or 

Pauses 

In circumstances in which Nasdaq deems 

it necessary to protect investors and the 

public interest, Nasdaq, pursuant to the 

procedures set forth in paragraph (c): 

(1)–(10) No change. 

(11) shall, between 9:45 a.m. and 3:35 p.m., 

or in the case of an early scheduled close, 25 

minutes before the close of trading, 

immediately pause trading for 5 minutes in 

any Nasdaq-listed security when the price of 

such security moves 10 percent or more 

within a 5-minute period. At the end of the 

trading pause, Nasdaq will re-open the 

security using the Halt Cross process set forth 

in Nasdaq Rule 4753. In the event of a 

significant imbalance at the end of a trading 

pause, Nasdaq may delay the re-opening of 

a security. 

Nasdaq will issue a notification if it cannot 

resume trading for a reason other than a 

significant imbalance. 

Price moves under this paragraph will be 

calculated by changes in each consolidated 

last-sale price disseminated by a network 

processor over a five minute rolling period 

measured continuously. Only regular way insequence transactions qualify for use in 

calculations of price moves. Nasdaq can 

exclude a transaction price from use if it 

concludes that the transaction price resulted 

from an erroneous trade. 

If a trading pause is triggered under this 

paragraph, Nasdaq shall immediately notify 

the single plan processor responsible for 

consolidation of information for the security 

pursuant to Rule 603 of Regulation NMS 

under the Securities Exchange Act of 1934. 

If a primary listing market issues an 

individual stock trading pause, Nasdaq will 

pause trading in that security until trading 

has resumed on the primary listing market or 

notice has been received from the primary 

listing market that trading may resume. If the 

primary listing market does not reopen 

within 10 minutes of notification of a trading 

pause, Nasdaq may resume trading the 

security. 

The provisions of this paragraph shall only 

apply to securities in the Standard & Poor’s 

500 Index, the Russell 1000 Index, as well as 

a pilot list of Exchange Traded Products. 

The provisions of this paragraph shall be 

in effect during a pilot set to end on 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[April 11, 2011]. 

* * * * * 

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 aspects of such 

statements. 

1. Purpose 

On June 10, 2010, the Commission 

granted accelerated approval, for a pilot 

period to end December 10, 2010, for a 

proposed rule change submitted by the 

Exchange, together with related rule 

changes of the BATS Exchange, Inc., 

NASDAQ OMX BX, Inc., Chicago Board 

Options Exchange, Incorporated, 

Chicago Stock Exchange, Inc., EDGA 

Exchange, Inc., EDGX Exchange, Inc., 

International Securities Exchange LLC, 

New York Stock Exchange LLC 

(‘‘NYSE’’), NYSE Amex LLC (‘‘NYSE 

Amex’’), NYSE Arca, Inc. (‘‘NYSE Arca’’), 

and National Stock Exchange, Inc. 

(collectively, the ‘‘Exchanges’’), to pause 

trading during periods of extraordinary 

market volatility in S&P 500 stocks.3

The rules require the Listing Markets 4

to issue five-minute trading pauses for 

individual securities for which they are 

the primary Listing Market if the 

transaction price of the security moves 

ten percent or more from a price in the 

preceding five-minute period. The 

Listing Markets are required to notify 

the other Exchanges and market 

participants of the imposition of a 

trading pause by immediately 

disseminating a special indicator over 

the consolidated tape. Under the rules, 

once the Listing Market issues a trading 

pause, the other Exchanges are required 

to pause trading in the security on their 

markets. On September 10, 2010, the 

Commission approved the respective 

rule filings of the Exchanges to expand 

application of the pilot to the Russell 

1000® Index and specified Exchange 

Traded Products.5 On December 7, 

2010, the Exchange filed an 

immediately effective filing to extend 

the existing pilot program for four 

months, so that the pilot would expire 

on April 11, 2011.6

The Exchange believes that the pilot 

program has been successful in reducing 

the negative impacts of sudden, 

unanticipated price movements in the 

securities covered by the pilot. The 

Exchange also believes that an 

additional four month extension of the 

pilot is warranted so that it may 

continue to assess whether circuit 

breakers are the best means to reduce 

the negative impacts of sudden, 

unanticipated price movements or 

whether alternative mechanisms would 

be more effective in achieving this goal. 

In this regard, the Exchange notes that 

the Exchanges are developing a ‘‘limit 

up/limit down’’ mechanism to reduce 

the negative impacts of sudden, 

unanticipated price movements in 

securities traded on the Exchanges. As 

such, the proposed extension may be 

shorter in duration should the Exchange 

adopt a limit up/limit down mechanism 

to address extraordinary market 

volatility. Accordingly, the Exchange is 

filing to further extend the pilot 

program until 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. 

2. Statutory Basis 

The statutory basis for the proposed 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),7 which requires the rules of an 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 68 / Friday, April 8, 2011 / Notices 19821 

8 15 U.S.C. 78k–1(a)(1). 

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. 

11 17 CFR 240.19b–4(f)(6)(iii). 

12 Id. 

13For 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). 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

exchange 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 proposed rule 

change also is 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 

across markets concerning decisions to 

pause trading in a security when there 

are significant price movements. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor 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 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

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. 

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. 

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 rulecomments@sec.gov. Please include File 

Number SR–NASDAQ–2011–042 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–NASDAQ–2011–042. 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–NASDAQ–2011–042, and 

should be submitted on or before April 

29, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8374 Filed 4–7–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64176; File No. SR–BX– 

2011–018] 

Self-Regulatory Organizations; 

NASDAQ OMX BX, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Extend the 

Pilot Period of the Trading Pause for 

Individual Stocks Contained in the 

Standard & Poor’s 500 Index, Russell 

1000 Index, and Specified Exchange 

Traded Products That Experience a 

Price Change of 10% or More During a 

Five-Minute Period 

April 4, 2011. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2


srobinson on DSKHWCL6B1PROD with NOTICES