20742 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

12 15 U.S.C. 78s(b)(2). 

13 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. 64071 

(March 11, 2011), 76 FR 14699 (March 17, 2011) 

(SR–NASDAQ–2010–074). Amendment 1 to SR– 

NASDAQ–2010–074 designated the NASDAQ 100 

Index as the 100 pilot securities. 

4The Nasdaq Halt Cross is ‘‘the process for 

determining the price at which Eligible Interest 

shall be executed at the open of trading for a halted 

security and for executing that Eligible Interest.’’ 

See Nasdaq Rule 4753(a)(3). 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,12 that the 

proposed rule change (SR–FINRA– 

2011–005), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8897 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64268; File No. SR– 

NASDAQ–2011–051] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify the 

Effective Hours of Rule 4753(c) 

April 8, 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 April 7, 

2011, The NASDAQ Stock Market LLC 

(‘‘NASDAQ’’ or the ‘‘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 

NASDAQ is proposing to amend Rule 

4753(c) to change the effective time of 

the rule from 9:30 a.m. to 4 p.m., to 9:45 

a.m. to 3:35 p.m. 

The text of the proposed rule change 

is below. Proposed new language is 

italicized; proposed deletions are in 

brackets. 

* * * * * 

4753. Nasdaq Halt and Imbalance 

Crosses 

(a)–(b) No change. 

(c) For a pilot period ending six 

months after the date of Commission 

approval of SR–NASDAQ–2010–074, 

between 9:45[30] a.m. and 3:35[4:00] 

p.m. EST, the System will automatically 

monitor System executions to determine 

whether the market is trading in an 

orderly fashion and whether to conduct 

an Imbalance Cross in order to restore 

an orderly market in a single Nasdaq 

Security. 

(1) An Imbalance Cross shall occur if 

the System executes a transaction in a 

Nasdaq Security at a price that is 

beyond the Threshold Range away from 

the Triggering Price for that security. 

The Triggering Price for each Nasdaq 

Security shall be the price of any 

execution by the System in that security 

within the prior 30 seconds. The 

Threshold Range shall be determined as 

follows: 

Execution price 

Threshold 

range away 

from triggering 

price (percent) 

$1.75 and under ................... 15 

Over $1.75 and up to $25 .... 10 

Over $25 and up to $50 ....... 5 

Over $50 ............................... 3 

(2) If the System determines pursuant 

to subsection (1) above to conduct an 

Imbalance Cross in a Nasdaq Security, 

the System shall automatically cease 

executing trades in that security for a 

60-second Display Only Period. During 

that 60-second Display Only Period, the 

System shall: 

(A) maintain all current quotes and 

orders and continue to accept quotes 

and orders in that System Security; and 

(B) Disseminate by electronic means 

an Order Imbalance Indicator every 5 

seconds. 

(3) At the conclusion of the 60-second 

Display Only Period, the System shall 

re-open the market by executing the 

Nasdaq Halt Cross as set forth in 

subsection (b)(2)–(4) above. 

(4) If the opening price established by 

the Nasdaq Halt Cross pursuant to 

subsection (b)(2)(A)–(D) above is outside 

the benchmarks established by Nasdaq 

by a threshold amount, the Nasdaq Halt 

Cross will occur at the price within the 

threshold amounts that best satisfies the 

conditions of subparagraphs (b)(2)(A) 

through (D) above. Nasdaq management 

shall set and modify such benchmarks 

and thresholds from time to time upon 

prior notice to market participants. 

(d) No change. 

* * * * * 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ is proposing to amend Rule 

4753(c) to change the effective time of 

the rule from 9:30 a.m. to 4 p.m., to 9:45 

a.m. to 3:35 p.m. On March 11, 2011, 

the Commission approved Rule 4753(c) 

(the ‘‘Volatility Guard’’), a volatilitybased pause in trading in individual 

NASDAQ-listed securities traded on 

NASDAQ (‘‘NASDAQ Securities’’), as a 

six month pilot applied to the NASDAQ 

100 Index securities.3 The Volatility 

Guard automatically suspends trading 

in individual NASDAQ Securities that 

are the subject of abrupt and significant 

intraday price movements between 9:30 

a.m. and 4 p.m. Eastern Standard Time 

(‘‘EST’’). Volatility Guard is triggered 

automatically when the execution price 

of a pilot security moves more than a 

fixed amount away from a preestablished ‘‘triggering price’’ for that 

security. The triggering price for each 

pilot security is the price of any 

execution by the system in that security 

within the previous 30 seconds. For 

each pilot security, the system 

continually compares the price of each 

execution in the system against the 

prices of all system executions in that 

security over the 30 seconds. Once 

triggered, NASDAQ institutes a formal 

trading halt during which time 

NASDAQ systems are prohibited from 

executing orders. Members, however, 

may continue to enter quotes and 

orders, which are queued during a 60- 

second Display Only Period. At the 

conclusion of the Display Only Period, 

the queued orders are executed at a 

single price, pursuant to NASDAQ’s 

Halt Cross mechanism.4

NASDAQ is preparing to implement 

the Volatility Guard in the second 

quarter of 2011, and through these 

preparations NASDAQ identified a 

possible concern with the effective time 

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Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20743 

5The crosses generate opening and closing prices 

that are widely used by industry professionals 

including Russell Investments, Standard & Poor’s 

and Dow Jones. 

6On June 10, 2010, the Commission approved the 

Circuit Breaker Pilot, which instituted new circuit 

breaker rules that pause trading for five minutes in 

a security included in the S&P 500 Index if its price 

moves ten percent or more over a five-minute 

period. See Securities Exchange Act Release Nos. 

62251 (June 10, 2010), 75 FR 34183 (June 16, 2010) 

(SR–FINRA–2010–025); 62252 (June 10, 2010), 75 

FR 34186 (June 16, 2010) (SR–NASDAQ–2010–061, 

et al.). On September 10, 2010, the Circuit Breaker 

Pilot was expanded to include securities in the 

Russell 1000 Index and certain exchange-traded 

products. See Securities Exchange Act Release Nos. 

62883 (September 10, 2010), 75 FR 56608 

(September 16, 2010) (SR–FINRA–2010–033); 62884 

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

2010) (SR–NASDAQ–2010–079, et al.). The Circuit 

Breaker Pilot is scheduled to expire on April 11, 

2011, however, the Exchanges are filing proposals 

with the Commission to extend the pilot to August 

11, 2011. See e.g., Securities Exchange Act Release 

No. 63505 (December 9, 2010), 75 FR 78302 

(December 15, 2010) (SR–NASDAQ–2010–162). 

7See Securities Exchange Act Release No. 62468 

(July 7, 2010), 75 FR 41258 (July 15, 2010) (SR– 

NASDAQ–2010–074) (discussing how Volatility 

Guard operates in relation to the Circuit Breaker 

Pilot). 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). 

12 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 Commission notes that the 

Exchange has met this requirement. 

13 Id. 

14For the 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). 

of the Volatility Guard. As currently 

proposed, the Volatility Guard could 

interfere with the effective hours of 

NASDAQ’s opening and closing crosses 

should a Volatility Guard halt occur 

during a cross process. The NASDAQ 

opening and closing crosses are price 

discovery facilities that cross orders at 

a single price. The crosses enable 

market participants to execute on-open 

and on-close interest.5 NASDAQ is 

proposing to change the effective time of 

the pilot to 9:45 a.m. until 3:35 p.m. 

EST to avoid potential interference with 

the crosses, and the orderly opening and 

closing of the market. 

NASDAQ notes that the proposed 

effective time is identical to the effective 

time of the single-stock trading pause 

pilot adopted by multiple U.S. markets, 

including NASDAQ, (the ‘‘Circuit 

Breaker Pilot’’).6 In approving the 

Circuit Breaker Pilot, the Commission 

noted that limiting the effective time of 

the pilot to 9:45 a.m. until 3:35 p.m. 

EST would ensure that existing 

procedures designed to facilitate orderly 

openings and closings would not be 

interfered with. As a consequence, 

NASDAQ believes that adopting the 

identical effective time as the Circuit 

Breaker Pilot will reasonably ensure that 

the orderly opening and closing of the 

markets is not interfered with by the 

Volatility Guard. 

NASDAQ also believes that, as a 

complement to the Circuit Breaker Pilot, 

it is important that Volatility Guard’s 

effective time mirror that of the Circuit 

Breaker Pilot. The Circuit Breaker Pilot 

applies to the securities of the S&P 500 

Index, Russell 1000 Index and certain 

exchange-traded products. As such, 

there is certain overlap between the 

securities covered by the Circuit Breaker 

Pilot and Volatility Guard.7 Such a 

consistent approach to the effective time 

will lessen the potential for investor 

confusion surrounding the timing and 

operation of the two processes. 

Accordingly, NASDAQ believes 

harmonizing the intra-day effective time 

of the Volatility Guard with that of the 

Circuit Breaker Pilot will better serve 

the goal of working seamlessly with the 

cross-market pause and will avoid 

potential interference with the orderly 

opening and closing of the markets. 

2. Statutory Basis 

NASDAQ believes that the proposed 

rule change is consistent with the 

provisions of Section 6 of the Act,8 in 

general and with Sections 6(b)(5) of the 

Act,9 in particular in that it is designed 

to prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities, 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. 

NASDAQ believes that the proposed 

rule meets these requirements in that it 

promotes transparency and uniformity 

among the Circuit Breaker Pilot and the 

Volatility Guard. Further, the proposed 

changes will ensure that the opening 

and closing processes of the markets are 

not interfered with by the Volatility 

Guard. 

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 Regarding 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: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) by its terms does not become 

operative for 30 days after the date of 

this filing, 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) 10 of the Act and 

Rule 19b–4(f)(6) thereunder.11

A proposed rule change filed under 

19b–4(f)(6) normally may not become 

operative prior to 30 days after the date 

of filing.12 However, Rule 19b– 

4(f)(6)(iii) 13 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. 

NASDAQ has requested that the 

Commission 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. This 

proposed rule change will reduce the 

effective time of the Volatility Guard as 

the current effective time of the 

Volatility Guard could interfere with the 

NASDAQ opening and closing 

processes. This proposed rule change 

will also make the effective time of the 

Volatility Guard consistent with the 

Circuit Breaker Pilot. Waiving the 

operative delay will ensure that the 

proposed change in the effective time of 

the Volatility Guard is both effective 

and operative by the date on which 

NASDAQ implements the Volatility 

Guard. For this reason, the Commission 

designates the proposed rule change to 

be operative upon filing with the 

Commission.14

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. 

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20744 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

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. 63960 

(February 24, 2011), 76 FR 11829 (‘‘Notice’’). 

4See Letter from Daniel Zinn, General Counsel, 

OTC Markets Group, Inc., to Elizabeth M. Murphy, 

Secretary, Commission, dated March 22, 2011 

(‘‘OTC Markets Letter’’) and letter from Kimberly 

Unger, Executive Director, The Security Traders 

Association of New York, Inc. to Elizabeth M. 

Murphy, Secretary, Commission, dated April 6, 

2011 (‘‘STANY Letter’’). 

5 15 U.S.C. 78s(b)(2). 

6 15 U.S.C. 78s(b)(2)(A)(ii)(I). 

7 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

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–NASDAQ–2011–051 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–2011–051. 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– 

NASDAQ–2011–051 and should be 

submitted on or before May 4, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Cathy Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8917 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64264; File No. SR–FINRA– 

2011–008] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Designation 

of a Longer Period for Commission 

Action on Proposed Rule Change To 

Require Public Disclosure of Any 

Access or Post-Transaction Fees for 

Executions Against a Public Quotation 

in an OTC Equity Security 

April 8, 2011. 

On February 18, 2011, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) 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 require each 

member to disclose on its website any 

fees imposed against its published 

quotation in any OTC Equity Security, 

consistent with FINRA Rule 6450 

(Restrictions on Access Fees). The 

proposed rule change was published for 

comment in the Federal Register on 

March 3, 2011.3 The Commission 

received two comments on the 

proposal.4

Section 19(b)(2) of the Act 5 provides 

that, within 45 days of the publication 

of notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day for this filing 

is April 17, 2011. 

The Commission is hereby extending 

the 45-day period for Commission 

action on the proposed rule change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change. The extension of time will 

ensure that the Commission has 

sufficient time to consider and take 

action on FINRA’s proposal in light of, 

among other things, the comments 

received on the proposal. 

Accordingly, pursuant to Section 

19(b)(2)(A)(ii)(I) of the Act 6 and for the 

reasons stated above, the Commission 

designates May 25, 2011, as the date by 

which the Commission should either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

File No. SR–FINRA–2011–008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8916 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64263; File No. SR– 

NASDAQ–2011–050] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Modify an 

Initial Listing Standard for the Nasdaq 

Global Select Market 

April 8, 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 April 1, 

2011, The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I and III below, which Items 

have been prepared by Nasdaq. Nasdaq 

has designated the proposed rule change 

as effecting a change described under 

Rule 19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with the Commission. The 

Commission is publishing this notice to 

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