Federal Register / Vol. 76, No. 69 / Monday, April 11, 2011 / Notices 20065 

13 15 U.S.C. 78s(b)(2). 

14 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition and capital formation. 

15 U.S.C. 78c(f). 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 62251 

(June 10, 2010), 75 FR 34183 (June 16, 2010) (Order 

Approving File No. SR–FINRA–2010–025). 

4See Securities Exchange Act Release No. 62883 

(September 10, 2010), 75 FR 56608 (September 16, 

2010) (Order Approving File No. SR–FINRA–2010– 

033). 

5 15 U.S.C. 78o–3(b)(6). 

6 15 U.S.C. 78s(b)(3)(A). 

7 17 CFR 240.19b–4(f)(6). When filing a proposed 

rule change pursuant to Rule 19b–4(f)(6) under the 

Continued 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change (File No. SR– 

OCC–2010–19) be and hereby is 

approved.14

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8473 Filed 4–8–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64192; File No. SR–FINRA– 

2011–015] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Extend the Effective 

Date of the Trading Pause Pilot 

April 5, 2011. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on March 30, 

2011, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 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 

prepared by FINRA. 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 Substance of 

the Proposed Rule Change 

FINRA is proposing to amend FINRA 

Rule 6121 (Trading Halts Due to 

Extraordinary Market Volatility) to 

extend the effective date of the single 

stock circuit breaker pilot program until 

the earlier of August 11, 2011 or the 

date on which a limit up/down 

mechanism to address extraordinary 

market volatility, if adopted, applies to 

the pilot securities. 

The text of the proposed rule change 

is available on FINRA’s Web site at 

http://www.finra.org, at the principal 

office of FINRA 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, 

FINRA 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. FINRA 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 

FINRA proposes to amend FINRA 

Rule 6121.01 to extend the effective date 

of the pilot by which such rule operates, 

which is currently scheduled to expire 

on April 11, 2011, until the earlier of 

August 11, 2011 or the date on which 

a limit up/down mechanism to address 

extraordinary market volatility, if 

adopted, applies to the pilot securities. 

FINRA Rule 6121.01 provides that if 

a primary listing market has issued an 

individual stock trading pause under its 

rules, FINRA will halt trading otherwise 

than on an exchange in that security 

until trading has resumed on the 

primary listing market. The pilot was 

developed and implemented as a 

market-wide initiative by FINRA and 

other self-regulatory organizations 

(‘‘SROs’’) in consultation with 

Commission staff, and is currently 

applicable to the S&P 500® Index,3 the 

Russell 1000® Index and a pilot list of 

Exchange Traded Products,4 together, 

the ‘‘pilot securities.’’ 

The extension proposed herein would 

allow the pilot to continue to operate 

without interruption while FINRA and 

the other SROs further assess the effect 

of the pilot on the marketplace and 

whether other initiatives should be 

adopted in lieu of the current pilot. 

FINRA has filed the proposed rule 

change for immediate effectiveness and 

has requested that the SEC waive the 

requirement that the proposed rule 

change not become operative for 30 days 

after the date of the filing, such that the 

pilot can continue to operate without 

interruption for the benefit of the 

marketplace and the investing public. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,5 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade and, in 

general, to protect investors and the 

public interest. FINRA believes that the 

proposed rule change meets these 

requirements in that it promotes 

uniformity across markets concerning 

decisions to pause trading in a security 

when there are significant price 

movements. 

Additionally, extension of the pilot 

until the earlier of August 11, 2011 or 

the date on which a limit up/down 

mechanism to address extraordinary 

market volatility, if adopted, applies to 

the pilot securities, would allow the 

pilot to continue to operate without 

interruption while FINRA and the other 

SROs further assess the effect of the 

pilot on the marketplace and whether 

other initiatives should be adopted in 

lieu of the current pilot. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA 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. 

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 6 and Rule 19b– 

4(f)(6) thereunder.7


srobinson on DSKHWCL6B1PROD with NOTICES
20066 Federal Register / Vol. 76, No. 69 / Monday, April 11, 2011 / Notices 

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. 

8 17 CFR 240.19b–4(f)(6)(iii). 

9 Id. 

10For 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). 11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Securities Exchange Act Release No. 63927 

(February 17, 2011), 76 FR 10412 (‘‘Notice’’). 

4The VIX methodology is derived from a body of 

research showing that it is possible to create pure 

exposure to volatility by assembling a special 

portfolio of options. While the price of a single 

option depends on both the underlying price and 

volatility, this special portfolio is constructed, in 

the aggregate, to eliminate the stock price 

dependence. In theory, this option portfolio would 

be comprised of an infinite number of options with 

continuous strike prices. In practice, however, the 

options that are used to calculate VIX—as well as 

other volatility indexes—are finite in number and 

are subject to a minimum interval between strike 

prices. The narrower this minimum interval, the 

more accurate the expression of volatility should 

be. 

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.8 However, Rule 19b– 

4(f)(6) 9 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.10 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–FINRA–2011–015 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–FINRA–2011–015. 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 website (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 website 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–FINRA–2011–015, and 

should be submitted on or before May 

2, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8504 Filed 4–8–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64189; File No. SR–CBOE– 

2011–008] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Order Granting Approval 

of Proposed Rule Change To Permit 

the Listing of Series With $0.50 and $1 

Strike Price Increments on Certain 

Options Used To Calculate Volatility 

Indexes 

April 5, 2011. 

I. Introduction 

On February 4, 2011, the Chicago 

Board Options Exchange, Incorporated 

(‘‘CBOE’’ or ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

expand the $2.50 Strike Price Program. 

The proposed rule change was 

published for comment in the Federal 

Register on February 24, 2011.3 The 

Commission received no comment 

letters on the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

CBOE has proposed to amend Rules 

5.5 and 24.9 to permit the listing of 

strike prices in $0.50 intervals where 

the strike price is less than $75, and 

strike prices in $1.00 intervals where 

the strike price is between $75 and $150 

for option classes used to calculate 

volatility indexes. The Exchange also 

proposed to amend Interpretation and 

Policy .08 to Rule 5.5 to permit $0.50 

strike price intervals where the strike 

price is less than $75 for options on 

exchange-traded funds (‘‘ETFs’’) that are 

used to calculate a volatility index. 

In its proposal, CBOE seeks to apply 

its VIX methodology 4 to options on 

certain ETFs and individual equity 


srobinson on DSKHWCL6B1PROD with NOTICES