20764 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

5 15 U.S.C. 78f(b) and 15 U.S.C. 78k–1, 

respectively. 

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to 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 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. 

9For 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). 

10 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

pursuant to the instant rule filing, the 

expiration date of the pilot program 

referenced in the first two sentences of 

Rule 11.19 is proposed to be changed 

from ‘‘April 11, 2011’’ to the earlier of 

August 11, 2011 or the date on which 

the limit up/limit down mechanism, if 

adopted, applies to the Circuit Breaker 

Securities. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6(b) and 

Section 11A of the Act,5 in general, and 

Section 6(b)(5) of the Act,6 in particular, 

in that it is designed, among other 

things, to promote clarity, transparency 

and full disclosure, in so doing, 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 maintain fair and orderly 

markets and protect investors and the 

public interest. Moreover, the proposed 

rule change is not discriminatory in that 

it uniformly applies to all ETP Holders. 

The Exchange believes that the 

extension of the pilot program will 

promote uniformity among markets with 

respect to clearly erroneous executions. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any inappropriate burden on 

competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 7 and Rule 19b–4 

(f)(6)(iii) thereunder.8 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 will allow the pilot 

program to continue uninterrupted and 

help ensure uniformity among the 

national securities exchanges and 

FINRA with respect to the treatment of 

clearly erroneous transactions.9

Accordingly, the Commission waives 

the 30-day operative delay requirement 

and designates the proposed rule change 

as operative upon filing with the 

Commission. 

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. 

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–NSX–2011–05 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–2011–05. 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–NSX– 

2011–05 and should be submitted on or 

before May 4, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8865 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64258; File No. SR–ISE– 

2011–23] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change To Expand the $2.50 Strike 

Price Program 

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 6, 

2011, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20765 

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

4 17 CFR 240.19b–4(f)(6). 

5The $2.50 Strike Price Program existed among 

the options exchanges when ISE began operations 

in 2000. Initially adopted in 1995 as a pilot 

program, the pilot $2.50 Strike Price Program 

allowed options exchanges to list options with 

$2.50 strike price intervals for options trading at 

strike prices greater than $25 but less than $50 on 

a total of up to 100 option classes. See Securities 

Exchange Act Release No. 35993 (July 19, 1995), 60 

FR 38073 (July 25, 1995) (approving File Nos. SR– 

Phlx–95–08, SR–Amex–95–12, SR–PSE–95–07, SR– 

CBOE–95–19, and SR–NYSE–95–12). In 1998, the 

pilot program was permanently approved and 

expanded to allow the options exchanges to select 

up to 200 option classes for the $2.50 Strike Price 

Program. See Securities Exchange Act Release No. 

40662 (November 12, 1998), 63 FR 64297 

(November 19, 1998) (approving File Nos. SR– 

Amex–98–21, SR–CBOE–98–29, SR–PCX–98–31, 

and SR–Phlx–98–26). The Exchange lists options 

with $2.50 strike price intervals on those classes 

selected by the other options exchanges and does 

not select any class for inclusion in the $2.50 Strike 

Price Program. See Securities Exchange Act Release 

No. 52960 (December 15, 2005), 70 FR 76090 

(December 22, 2005) (SR–ISE–2005–59). 

6The term ‘‘primary market’’ is defined in ISE 

Rule 100(a)(37) as the principal market in which an 

underlying security is traded. 

7The 75 strike put would trade at $0.30 in this 

example. 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I and II below, which Items 

have been prepared by the Exchange. 

The Exchange has filed the proposal as 

a ‘‘non-controversial’’ proposed rule 

change pursuant to Section 

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

19b–4(f)(6) thereunder.4 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 

The Exchange proposes to amend ISE 

Rule 504 to expand the $2.50 Strike 

Price program. The text of the proposed 

rule change is available on the 

Exchange’s Web site http:// 

www.ise.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 

self-regulatory organization 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 

The purpose of this proposed rule 

change is to expand the current $2.50 

Strike Price Program (‘‘Program’’) 5 to 

permit the listing of options with $2.50 

strike price intervals for options with 

strike prices between $50 and $100, 

provided the $2.50 strike price intervals 

are no more than $10 from the closing 

price of the underlying stock in the 

primary market.6 Additionally, ISE 

proposes to specify that it may select up 

to sixty (60) option classes on 

individual stocks for which the intervals 

of strike prices will be $2.50. Currently, 

ISE Rule 504(g) permits the listing of 

options with $2.50 strike price intervals 

with strike prices between $50 and $75. 

Specifically, ISE proposes to amend the 

current text of ISE Rule 504(g) to expand 

the Program. 

For example, consider a hypothetical 

where Caterpillar, Inc. (‘‘CAT’’) was 

trading at $81. With approximately one 

month remaining until expiration, and 

with a front month at-the-money put 

option (the 80 strike) trading at 

approximately $1.30, the investor would 

be able to purchase a $77.50 strike put 

at an estimated $0.60 per contract. 

Today, the next available strike of a one 

month put option is the 75 strike. While 

the 75 strike put would certainly trade 

at a lesser price than the 80 strike put,7

the protection offered would only take 

effect with a 7.40% decline in the 

market as oppose to a 4.30% decline in 

the market. The $77.50 strike put would 

provide the investor an additional 

choice to hedge exposure (the 

opportunity to hedge with a reduced 

outlay) and thereby minimize risk if 

there were a decline in the stock price 

of CAT. 

Another example would be if an 

investor desired to sell call options to 

hedge the exposure of an underlying 

stock position and enhance yield. 

Consider a hypothetical where CAT was 

trading at $81 and the second month 

(two months remaining) of a recently 

out of-the-money call option (the 85 

strike) was trading at approximately 

$2.35. If the investor were to sell the 85 

strike call against an existing stock 

position, the investor could yield a 

return of approximately 2.90% over a 

two month period or an annualized 

return of 17.4%. By providing an 

additional $2.50 strike interval above 

$75, the investor would have the 

opportunity to sell the 82.50 strike 

instead of the 85 strike. If the 85 strike 

call were trading at $2.35, the 82.50 

strike call would trade at approximately 

$3.30. By selling the 82.50 strike call at 

$3.30 against an existing stock position, 

the investor could yield a 4.07% return 

over a two month period or an 

annualized 24.40% return. Therefore, an 

additional choice of a $2.50 strike 

interval could afford varying yields to 

the investor. 

ISE believes that the Program has to 

date created additional trading 

opportunities for investors, thereby 

benefiting the marketplace. The 

existence of $2.50 strike prices with 

strike intervals above $75 affords 

investors the ability to more closely 

tailor investment strategies to the 

precise movement of the underlying 

security and meet their investment, 

trading and risk management 

requirements. 

ISE is also proposing to specify that 

it may select up to 60 option classes on 

individual stocks for which the intervals 

of strike prices will be $2.50. ISE has 

participated in the industry wide $2.50 

Strike Price Program since ISE’s 

inception in 2000. Currently, the 

options exchanges may collectively 

select up to 200 options classes on 

individual stocks for which the intervals 

of strike prices will be $2.50. In 

addition, each options exchange is 

permitted to list options with $2.50 

strike price intervals on any option class 

that another options exchange selects 

under its program. 

The industry wide collection of 200 

options classes has not been expanded 

since 1998, although increasingly more 

companies have completed initial 

public offerings from 1998 through 

2010. Additionally, significantly more 

options classes are trading in 2011 as 

compared to 1998. The Exchange 

proposes to specify that ISE may select 

up to 60 options classes to remain 

competitive with other exchanges and to 

offer investors additional investment 

choices. ISE believes that offering 

additional options classes would benefit 

investors. 

Furthermore, ISE does not believe that 

this proposal would have a negative 

impact on the marketplace. ISE would 

compare this proposal with the $1 

Strike Price expansion, wherein ISE, 

among several options exchanges, 

expanded its $1 Strike Price Program 

from 55 individual stocks to 150 

individual stocks on which an option 

series may be listed at $1 strike price 

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20766 Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 

8See Exchange Act Release No. 62442 (July 2, 

2010), 75 FR 39597 (July 9, 2010) (SR–ISE–2010– 

64). 

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

10 15 U.S.C. 78f(b)(5). 

11 15 U.S.C. 78s(b)(3)(A). 

12 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) 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 Commission 

has waived the five-day prefiling requirement in 

this case. 

13See Securities Exchange Act Release No. 64157 

(March 31, 2011), 76 FR 18817 (April 5, 2011) (SR– 

Phlx–2011–15) (order approving expansion of $2.50 

Strike Price Program). 

14For 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). 

intervals.8 ISE believes that this 

proposed rule change that would, in 

part, result in an increase to the 200 

options classes in the industry wide 

Program, is less than the $1 Strike Price 

Program increase among several 

exchanges and therefore would have 

less impact than that program, which 

has not had any negative impact on the 

market in terms of proliferation of quote 

volume or fragmentation. ISE believes 

that the effect of the proposed 

expansion on the marketplace would 

not result in a material proliferation of 

quote volume or concerns with 

fragmentation. 

With regard to the impact of this 

proposal on system capacity, ISE has 

analyzed its capacity and represents that 

it and the Options Price Reporting 

Authority have the necessary system 

capacity to handle the potential 

additional traffic associated with the 

listing and trading of additional classes 

on individual stocks in the $2.50 Strike 

Price Program. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act 9 in general, and furthers the 

objectives of Section 6(b)(5) of the Act 10

in particular, in that it is designed 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. ISE 

believes that the effect of the proposed 

expansion on the marketplace would 

not result in a material proliferation of 

quote volume or concerns with 

fragmentation. In addition, ISE believes 

that it has the necessary system capacity 

to handle the potential additional traffic 

associated with listing and trading of 

the additional classes. 

Rather, ISE believes the $2.50 Strike 

Price Program proposal would provide 

the investing public and other market 

participants increased opportunities to 

better manage their risk exposure. 

Accordingly, ISE believes that the 

proposal to expand the Program to allow 

the listing of options with $2.50 strike 

price intervals for options with strike 

prices between $50 and $100 should 

further benefit investors and the market 

by providing greater trading 

opportunities for those underlying 

stocks that have low volatility and thus 

trade in a narrow range. While 

expansion of the $2.50 Strike Price 

Program will generate additional quote 

traffic, ISE does not believe that this 

increased traffic will become 

unmanageable since the proposal is 

limited to a fixed number of classes. 

Further, ISE does not believe that the 

proposal will result in a material 

proliferation of additional series 

because it is limited to a fixed number 

of classes and ISE does not believe that 

the additional price points will result in 

fractured liquidity. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The proposed rule change does not 

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 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any 

unsolicited written comments from 

members or other interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not significantly affect the 

protection of investors or the public 

interest, does not impose any significant 

burden on competition, and, by its 

terms, does not become operative for 30 

days from the date on which it was 

filed, or such shorter time as the 

Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 11 and Rule 19b– 

4 (f)(6) thereunder.12

The Exchange has requested that the 

Commission waive the 30-day operative 

delay. The Commission believes that 

waiver of the operative delay is 

consistent with the protection of 

investors and the public interest 

because the proposal is substantially 

similar to that of another exchange that 

has been approved by the 

Commission.13 Therefore, the 

Commission designates the proposal 

operative upon filing.14

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. 

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–ISE–2011–23 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–ISE–2011–23. 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 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 76, No. 71 / Wednesday, April 13, 2011 / Notices 20767 

15 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 . 

4See Securities Exchange Act Release No. 63500 

(December 9, 2010), 75 FR 78309 (December 15, 

2010) (SR–NYSE–2010–81). 

5The 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). 

6 15 U.S.C. 78f(b). 

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

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–ISE– 

2011–23 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 H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8856 Filed 4–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64254; File No. SR–NYSE– 

2011–16] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending 

NYSE Rule 80C, Trading Pauses in 

Individual Securities Due to 

Extraordinary Market Volatility, To 

Extend the Effective Date of the Pilot 

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 

April 7, 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 April 6, 

2011, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (the ‘‘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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Rule 80C, 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 

April 11, 2011, 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. The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, and http:// 

www.nyse.com. 

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 

self-regulatory organization 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 those 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

NYSE Rule 80C, 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 

April 11, 2011,4 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. 

Rule 80C requires the Exchange to 

pause trading in an individual security 

listed on the Exchange if the price 

moves by 10% as compared to prices of 

that security in the preceding fiveminute period during a trading day, 

which period is defined as a ‘‘Trading 

Pause.’’ 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 S&P 500 

Index securities, Russell 1000 Index 

securities, and specified exchangetraded products.5

The extension proposed herein would 

allow the pilot to continue to operate 

without interruption while the 

Exchange, other national securities 

exchanges 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. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),6 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,7

in particular, 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. Additionally, extension of 

the pilot 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 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. 

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 

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