Federal Register / Vol. 76, No. 157 / Monday, August 15, 2011 / Notices 50529 

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 FINRA 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. 

believes that the proposed changes 

enhance the objectivity of decisions 

made by FINRA with respect to clearly 

erroneous executions. 

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, it has 

become effective pursuant to Section 

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

4(f)(6)(iii) thereunder.8 FINRA 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–FINRA–2011–037 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–2011–037. 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 

FINRA. 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–FINRA–2011–037 and 

should be submitted on or before 

September 6, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20697 Filed 8–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65062; File No. SR–NYSE– 

2011–39] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Relating to 

Credits to Supplemental Liquidity 

Providers 

August 9, 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 August 

1, 2011, New York Stock Exchange LLC 

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

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III 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 its 

2011 Price List (‘‘Price List’’) for equity 

transactions to amend the tiered 

structure of credits to Supplemental 

Liquidity Providers (‘‘SLPs’’) for adding 

liquidity to the Exchange in NYSE-listed 

securities with a per share stock price of 

$1.00 or more, to include criteria based 

on an SLP’s Average Daily Volume 

(‘‘ADV’’) in added liquidity in the 

applicable month. The amended pricing 

will take effect on August 1, 2011. The 

text of the proposed rule change is 

available at the Exchange, at http:// 

www.nyse.com, at the Commission’s 

Public Reference Room, and at the 

Commission’s Web site at http:// 

www.sec.gov. 


srobinson on DSK4SPTVN1PROD with NOTICES
50530 Federal Register / Vol. 76, No. 157 / Monday, August 15, 2011 / Notices 

3For purposes of transaction fees and 

Supplemental Liquidity Provider liquidity credits, 

ADV calculations exclude early closing days. 4See Securities Exchange Act Release Nos. 64627 

(June 8, 2011), 76 FR 34788 (June 14, 2011) (SR– 

NYSEArca–2011–35); 64453 (May 10, 2011), 76 FR 

28252 (May 16, 2011) (SR–NASDAQ–2011–062); 

64632 (June 8, 2011), 76 FR 34792 (June 14, 2011) 

(SR–EDGX–2011–17). In addition, other exchanges 

have included both percentage thresholds and 

minimum numeric thresholds as tier requirements. 

See, e.g., Securities Exchange Act Release No. 

64820 (July 6, 2011, 76 FR 40974 (July 12, 2011) 

(SE–NYSEArca–2011–41). 

5See Securities Exchange Act Release No. 63642 

(January 4, 2011), 76 FR 1653 (January 11, 2011) 

(SR–NYSE–2010–87). 

6For all other SLP transactions that add liquidity 

to the Exchange but do not qualify for any of the 

foregoing credits, the credit is $0.0015 per share per 

transaction. In addition, in its first calendar month 

as an SLP, an SLP qualifies for the tiered credits 

regardless of whether it meets the requirement to 

provide liquidity with an ADV of more than 10 

million shares. 

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 its 

tiered structure of credits to SLPs for 

adding liquidity to the Exchange in 

NYSE-listed securities. The Exchange 

proposes to change the tiered volume 

requirements in the Price List from 

numerical thresholds (e.g., 50 million 

shares) to a combination of numerical 

thresholds and percentage thresholds of 

US ADV (e.g., 1.25% of US ADV).3 The 

percentage threshold volume 

requirements to reach the tiered pricing 

levels will be fixed and not variable and 

will result in share volume that will 

adjust each month based on US average 

daily consolidated share volume in 

Tape A securities (‘‘US Tape A ADV’’) 

for that given month. US Tape A ADV 

is equal to the volume reported by all 

exchanges and trade reporting facilities 

to the Consolidated Tape Association 

(‘‘CTA’’) Plan for Tape A securities. The 

Exchange currently makes this data 

publicly available on a T + 1 basis from 

a link at http://www.nyxdata.com/USandEuropean-Volumes. The percentage 

approach is in line with those adopted 

by NYSE Arca, Inc. (‘‘NYSE Arca’’), 

NASDAQ Stock Market LLC and EDGX 

Exchange, Inc. for liquidity providers.4

Under the current tiered structure of 

credits, SLPs that meet the 10% average 

or more quoting requirement in an 

assigned security pursuant to NYSE 

Rule 107B receive a credit per share per 

transaction for adding liquidity, based 

on total ADV of added liquidity in the 

applicable month for all assigned SLP 

securities, as follows: 5

• $0.0022 credit per share per 

transaction if total ADV of added 

liquidity is more than 50 million shares; 

• $0.0021 credit per share per 

transaction if total ADV of added 

liquidity is more than 20 million shares 

but not more than 50 million shares; 

• $0.0020 credit per share per 

transaction if total ADV of added 

liquidity is more than 10 million shares 

but not more than 20 million shares.6

The Exchange proposes to amend 

such credits with respect to SLP 

transactions as described below. SLPs 

that meet the 10% average or more 

quoting requirement in an assigned 

security pursuant to NYSE Rule 107B 

will receive a credit per share per 

transaction for adding liquidity, based 

on total ADV of added liquidity in the 

applicable month for all assigned SLP 

securities, as follows: 

• 0.0022 credit per share per 

transaction if added liquidity is the 

greater of (a) an ADV of more than 35 

million shares or (b) more than 1.25% 

of US Tape A ADV (‘‘SLP Tier 1’’); 

• $0.0021 credit per share per 

transaction if added liquidity is the 

greater of (a) an ADV of more than 15 

million shares but not more than 35 

million shares or (b) more than 0.50% 

but not more than 1.25% of US Tape A 

(‘‘SLP Tier 2’’); and 

• $0.0020 credit per share per 

transaction if added liquidity is an ADV 

of more than 10 million shares but not 

more than the greater of 15 million 

shares or 0.50% of US Tape A ADV 

(‘‘SLP Tier 3’’). 

The following table sets forth the 

differences between the current 

thresholds for the SLP credits as well as 

the proposed structure: 

SLP Tier 

SLP Credit 

per share 

per qualified 

provide share 

Current daily provide ADV 

requirement Proposed new daily provide ADV requirement 

1 .................... $0.0022 More than 50,000,000 shares ........ More than 1.25% of US Tape A ADV or 35,000,000 shares, whichever 

is greater. 

2 .................... 0.0021 More than 20,000,000 shares but 

not more than 50,000,000 

shares.

More than 0.50% of US Tape A ADV or 15,000,000 shares, whichever 

is greater, but not more than 1.25% of US Tape A ADV or 

35,000,000 shares, whichever is greater. 

3 .................... 0.0020 More than 10,000,000 shares but 

not more than 20,000,000 

shares.

More than 10,000,000 shares but not more than 0.50% of US Tape A 

ADV or 15,000,000 shares, whichever is greater. 

The proposed ADV thresholds for SLP 

Tiers 1 and 2 will fluctuate according to 

monthly market volumes, but will be 

subject to fixed minimum numerical 

thresholds as shown in the following 

example. 

Example: In a month in which the US Tape 

A ADV is 3.5 billion shares, the requirement 

for SLP Tier 1 would be 1.25% or 43.75 

million shares ADV, and the requirement for 

SLP Tier 2 would be 0.5% or 17.5 million 

shares ADV. In a month in which US Tape 

ADV falls to 2 billion shares, the requirement 

for Tier 1 would be the greater of 35 million 

shares and 1.25% of US Tape A ADV, or 25 

million shares, so the minimum would be 35 

million shares. In that same month, the 

requirement for SLP Tier 2 would be the 

greater of 15 million shares ADV and 0.5% 

of US Tape A, or 10 million shares, so the 

minimum ADV would be 15 million shares. 

The minimum numerical thresholds 

for SLP Tier 2 of 15 million and for SLP 

Tier 1 of 35 million are set lower than 

the current numerical thresholds of 20 

million for SLP Tier 2 and 50 million for 

SLP Tier 1 because current equity 

market volume has declined from recent 

historical levels. 

The Exchange is proposing to add 

numerical minimum ADV thresholds to 


srobinson on DSK4SPTVN1PROD with NOTICES
Federal Register / Vol. 76, No. 157 / Monday, August 15, 2011 / Notices 50531 

7See note 2, supra. 8 15 U.S.C. 78f(b)(4). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(2). 

the percentage ADV thresholds in SLP 

Tier 1 and SLP Tier 2 in order to 

facilitate the determination of the 

applicable credits per share and prevent 

crossing between tiers in low volume 

months. For example, in a month with 

less than 2 billion US Tape A ADV, SLP 

Tier 2’s 0.50% percentage ADV 

threshold would fall below the SLP Tier 

3 requirement (e.g., 0.50% of 1.5 billion 

US Tape A ADV is equal to 7.5 million 

ADV, which is less than the 10 million 

SLP Tier 3 requirement.) 

The Exchange believes that the SLP 

Tier 3 minimum requirement of 

10 million ADV, which remains 

unchanged and not tied to any 

percentage ADV threshold, continues to 

be an appropriate minimum 

requirement for the SLP program, given 

that it is a reasonable requirement to get 

a significantly larger increase of $.0005 

over the client rebate of $.0015, and that 

the larger volume requirements needed 

for SLP Tier 2 and SLP Tier 1 are likely 

to be more sensitive to fluctuations in 

market volumes. In addition, the SLP 

Tier 3 maximum requirement is being 

lowered from 20 million ADV to 

15 million ADV in order to correspond 

to, and avoid overlap with, the 

minimum 15 million ADV requirement 

in SLP Tier 2. 

For two of its SLP Tiers, NYSE is 

moving to an approach that will 

compare the liquidity added by an SLP 

to the greater of a numerical threshold 

or a percentage threshold based upon 

the average daily traded volume of the 

relevant security, for several reasons. 

The percentage threshold will adjust 

each calendar month based on the U.S. 

average daily consolidated share volume 

in Tape A Securities for that month, 

while the numerical threshold remains 

unchanged from month to month, 

thereby providing a consistent floor 

against which to measure the SLPs’ 

performance. The Exchange also 

believes that the proposed approach 

will provide a more straightforward way 

to communicate floating volume tiers, 

while maintaining a minimum 

threshold, which, as noted above, is an 

approach similar to that adopted by 

other exchanges.7 The Exchange notes 

that the combined approach will allow 

tiers to move in sync with consolidated 

volume while maintaining a numerical 

threshold. While the percentage 

thresholds will result in lower 

minimum share volume requirements 

for SLP Tier 1 and SLP Tier 2 when 

consolidated volumes are lower, they 

will also result in higher minimum 

share volume requirements when 

consolidated volumes are higher. Such 

higher and lower consolidated volumes 

will have a similar impact on the 

maximum share requirements for SLP 

Tier 2 and SLP Tier 3; however, the 

minimum share requirement for SLP 

Tier 3 will remain unchanged at 10 

million shares. 

These changes are intended to be 

effective immediately for all 

transactions beginning August 1, 2011 

and are only applicable to those NYSElisted securities with a per share stock 

price of $1.00 or more. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), in general, and Section 6(b)(4) of 

the Act,8 in particular, in that it is 

designed to provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

other persons using its facilities. The 

Exchange believes that the proposal 

does not constitute an inequitable 

allocation of fees, as all similarly 

situated member organizations and 

other market participants will be subject 

to the same fee structure, and access to 

the Exchange’s market is offered on fair 

and non-discriminatory terms. 

With respect to the addition of 

percentage ADV thresholds to the 

existing share thresholds for certain of 

NYSE’s existing pricing tiers, NYSE 

believes that the change is reasonable, 

because the levels of liquidity provision 

required to receive the applicable 

credits will move month to month with 

respect to the levels of market volumes. 

NYSE believes the levels of activity 

required to achieve higher tiers will be 

generally consistent with existing 

requirements for these tiers. Moreover, 

like existing pricing tiers tied to volume 

levels, as in effect at NYSE and other 

markets, the proposed pricing tiers are 

equitable and non-discriminatory 

because they are open to all SLPs on an 

equal basis and provide discounts that 

are reasonably related to the value to an 

exchange’s market quality associated 

with higher volumes. 

Finally, the Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily favor competing venues if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

the Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and with alternative trading 

systems that have been exempted from 

compliance with the statutory standards 

applicable to exchanges. The Exchange 

believes that the proposed rule change 

reflects this competitive environment 

because it will broaden the conditions 

under which customers may qualify for 

higher liquidity provider credits. 

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 foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 9 of the Act and 

subparagraph (f)(2) of Rule 19b–4 10

thereunder, because it establishes or 

changes a due, fee, or other charge 

imposed on its members by the 

Exchange. 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–2011–39 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. 


srobinson on DSK4SPTVN1PROD with NOTICES
50532 Federal Register / Vol. 76, No. 157 / Monday, August 15, 2011 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5Securities Exchange Act Release Nos. 62886 

(September 10, 2010), 75 FR 56613 (September 16, 

2010) (SR–CBOE–2010–056) (approval order 

establishing pilot through December 10, 2010), 

63485 (December 9, 2010), 75 FR 78278 (December 

15, 2010) (SR–CBOE–2010–113) (extension of pilot 

through April 11, 2011), and 64227 (April 7, 2011), 

76 FR 20796 (April 13, 2011) (SR–CBOE–2011–032) 

(extension of pilot through 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 to the Circuit Breaker 

Stocks as defined in Interpretation and Policy .03 

of Rule 6.3C, Individual Stock Trading Pause Due 

to Extraordinary Market Volatility). 

6 15 U.S.C. 78a et seq. 

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

8 15 U.S.C. 78(f)(b)(5). 

All submissions should refer to File 

Number SR–NYSE–2011–39. 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–NYSE– 

2011–39 and should be submitted on or 

before September 6, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2011–20640 Filed 8–12–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–65060; File No. SR–CBOE– 

2011–077] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Related to the Extension 

of a CBSX Clearly Erroneous Policy 

Pilot Program 

August 9, 2011. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on August 5, 

2011, the Chicago Board Options 

Exchange, Incorporated (‘‘Exchange’’ or 

‘‘CBOE’’) 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 Exchange has 

designated the proposal as a ‘‘noncontroversial’’ 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 extend a 

clearly erroneous policy pilot program 

pertaining to the CBOE Stock Exchange 

(‘‘CBSX’’, the CBOE’s stock trading 

facility). This rule change simply seeks 

to extend the pilot. No other changes to 

the pilot are being proposed. The text of 

the proposed rule change is available on 

the Exchange’s Web site (http:// 

www.cboe.org/Legal), at the Exchange’s 

Office of the Secretary and at the 

Commission. 

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 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 

Certain amendments to Rule 52.4, 

Clearly Erroneous Policy, were approved 

by the Commission on September 10, 

2010 on a pilot basis. The pilot is 

currently set to expire 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 to the Circuit Breaker 

Stocks as defined in Interpretation and 

Policy .03 of Rule 6.3C.5 The clearly 

erroneous policy changes were 

developed in consultation with other 

markets and the Commission staff to 

provide for uniform treatment: (i) Of 

clearly erroneous execution reviews in 

Multi-Stock Events involving twenty or 

more securities; and (ii) in the event 

transactions occur that result in the 

issuance of an individual stock trading 

pause by the primary market and 

subsequent transactions that occur 

before the trading pause is in effect on 

the Exchange. Additional changes were 

also made to Rule 52.4 that reduce the 

ability of the Exchange to deviate from 

the objective standards set forth in the 

Rule. As the duration of the pilot 

expires 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 to the Circuit Breaker 

Stocks as defined in Interpretation and 

Policy .03 of Rule 6.3C, the Exchange is 

proposing to extend the effectiveness of 

the clearly erroneous policy changes to 

Rule 52.4 through January 31, 2012. 

2. Statutory Basis 

Extension of the pilot period will 

allow the Exchange to continue to 

operate the pilot on an uninterrupted 

basis. Accordingly, the Exchange 

believes the proposed rule change is 

consistent with the Act 6 and the rules 

and regulations under the Act 

applicable to a national securities 

exchange and, in particular, the 

requirements of Section 6(b) of the Act.7

Specifically, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirements that 

the rules of an exchange be designed to 

promote just and equitable principles of 

trade, to prevent fraudulent and 

manipulative acts and, in general, to 

protect investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 


srobinson on DSK4SPTVN1PROD with NOTICES