Federal Register / Vol. 75, No. 99 / Monday, May 24, 2010 / Notices 28839 

6The Commission believes that a 10-day 

comment period is reasonable, given the urgency of 

the matter. It will provide adequate time for 

comment. 

7 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3Changes are marked to the rule text that appears 

in the electronic manual of NASDAQ found at 

http://nasdaqomx.cchwallstreet.com. 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEAmex–2010–46 on 

the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAmex–2010–46. 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 NYSE 

Amex. 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–NYSEAmex–2010–46 and 

should be submitted on or before June 

3, 2010.6

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.7

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–12419 Filed 5–21–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62129; File No. SR– 

NASDAQ–2010–061] 

Self-Regulatory Organizations; The 

NASDAQ Stock Market LLC; Notice of 

Filing of a Proposed Rule Change To 

Establish a Trading Pause for 

Individual Stocks Contained in the 

Standard & Poor’s 500 Index That 

Experience a Price Change of 10% or 

More During a Five-Minute Period 

May 19, 2010. 

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 May 18, 

2010, 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, II, and III below, which Items 

have been prepared by Nasdaq. 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 is filing with the 

Commission a proposed rule change to 

establish a trading pause for individual 

stocks contained in the Standard & 

Poor’s 500 Index (‘‘S&P 500’’) that 

experience a price change of 10% or 

more during a five-minute period. 

The text of the proposed rule change 

is below. Proposed new language is in 

italics and proposed deletions are in 

[brackets].3

* * * * * 

4120. Trading Halts 

(a) Authority to Initiate Trading Halts or 

Pauses 

In circumstances in which Nasdaq deems 

it necessary to protect investors and the 

public interest, Nasdaq, pursuant to the 

procedures set forth in paragraph (c): 

(1)–(10) No Change. 

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

immediately pause trading for 5 minutes in 

any Nasdaq-listed security when the price of 

such security moves 10 percent or more 

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

trading pause, Nasdaq will re-open the 

security using the Halt Cross process set forth 

in Nasdaq Rule 4753. In the event of a 

significant imbalance at the end of a trading 

pause, Nasdaq may delay the re-opening of 

a security. 

Nasdaq will issue a notification if it cannot 

resume trading for a reason other than a 

significant imbalance. 

Price moves under this paragraph will be 

calculated by changes in each consolidated 

last-sale price disseminated by a network 

processor over a five minute rolling period 

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

calculations of price moves. Nasdaq can 

exclude a transaction price from use if it 

concludes that the transaction price resulted 

from an erroneous trade. 

If a trading pause is triggered under this 

paragraph, Nasdaq shall immediately notify 

the single plan processor responsible for 

consolidation of information for the security 

pursuant to Rule 603 of Regulation NMS 

under the Securities Exchange Act of 1934. 

If a primary listing market issues an 

individual stock trading pause, Nasdaq will 

pause trading in that security until trading 

has resumed on the primary listing market or 

notice has been received from the primary 

listing market that trading may resume. If the 

primary listing market does not reopen 

within 10 minutes of notification of a trading 

pause, Nasdaq may resume trading the 

security. 

The provisions of this paragraph shall only 

apply to securities in the Standard & Poor’s 

500 Index. 

The provisions of this paragraph shall be 

in effect during a pilot set to end on 

December 10, 2010. 

(b) No Change. 

(c) Procedure for Initiating a Trading Halt 

(1)–(6) No Change. 

(7) 

(A) A trading halt or pause initiated under 

Rule 4120(a)(1), (4), (5), (6), (9), [or] (10), (11) 

or Rule 4120(b) shall be terminated when 

Nasdaq releases the security for trading. Prior 

to terminating the halt, there will be a 5- 

minute Display Only Period during which 

market participants may enter quotations and 

orders in that security in Nasdaq systems. At 

the conclusion of the 5-minute Display Only 

Period, the security shall be released for 

trading unless Nasdaq extends the Display 

Only Period for an additional 1-minute 

period pursuant to subparagraph (C) below. 

At the conclusion of the Display Only Period, 

trading shall immediately resume pursuant to 

Rule 4753. 

(B) No Change. 

(C) If at the end of a Display Only Period, 

Nasdaq detects an [liquidity] order imbalance 

in the security, Nasdaq will extend the 

Display Only Period as permitted under 

subparagraphs (A) and (B) above. [Liquidity] 

Order [I]imbalances shall be established 

when (i) the Current Reference Prices, as 

defined in Rule 4753(a)(2)(A), disseminated 

15 seconds and immediately prior to the end 

of the Display Only Period differ by more 

than the greater of 5 percent or 50 cents, or 

(ii) all buy or sell market orders will not be 

executed in the cross. 

* * * * * 

4753. Nasdaq Halt and Imbalance Crosses 

(a) No Change. 

(b) Processing of Nasdaq Halt Cross. For 

Nasdaq-listed securities that are the subject 

of a trading halt or pause initiated pursuant 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

28840 Federal Register / Vol. 75, No. 99 / Monday, May 24, 2010 / Notices 

4 15 U.S.C. 78f(b)(5). 

5 15 U.S.C. 78k–1(a)(1). 

6The Commission notes that the Exchange has 

requested accelerated approval of the filing. 

to Rule 4120(a)(1), (4), (5), (6) [or], (7)or 11, 

the Nasdaq Halt Cross shall occur at the time 

specified by Nasdaq pursuant to Rule 4120, 

and Market hours trading shall commence 

when the Nasdaq Halt Cross concludes. 

(1)–(5) No Change. 

(c)–(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 proposes to adopt rules to 

provide for a trading pause for 

individual securities for which the 

Exchange is the primary listing market 

if the price of such security moves 10% 

or more from a sale in a preceding fiveminute period. The Exchange is 

proposing this rule addition in 

consultation with other markets and 

staff of the Securities and Exchange 

Commission to provide for uniform 

market-wide trading pause standards for 

individual securities in the S&P 500®

Index that experience a rapid price 

movement, as set forth below. 

The Exchange is proposing that this 

rule be implemented on a pilot basis, set 

to end on December 10, 2010. During 

this pilot period, the rule would be in 

effect only with respect to securities 

included in the S&P 500® Index. During 

that pilot period, the Exchange will 

continue to assess whether additional 

securities need to be added and whether 

the parameters of the rule would need 

to be modified to accommodate trading 

characteristics of different securities. 

As proposed, the rule would enable 

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 five-minute period during 

a trading day. To enable the market to 

absorb the opening price of a security 

and to participate in the close, as 

proposed, the proposed rule would be 

in effect from 9:45 a.m. to 3:35 p.m., 

Eastern Time. 

Proposed Rule 4120(a)(11) sets forth 

the re-opening procedures following a 

trading pause. As proposed, NASDAQ 

would be responsible for re-opening 

trading at the end of the trading pause 

using existing procedures for the 

NASDAQ Halt Cross set forth in Rule 

4753. 

Unlike a re-opening following a 

regulatory halt, the re-opening of a 

security following a trading pause shall 

be at the end of the trading pause. 

However, in the event of a significant 

imbalance, the Exchange may delay the 

re-opening of the security past the fiveminute trading pause period. The 

Exchange will notify other markets if it 

cannot reopen because of issues 

unrelated to an imbalance, thereby 

enabling other markets to resume 

trading even if the primary market has 

not re-opened. The Exchange notes that 

if it re-opens the security after other 

markets have resumed trading, such 

reopening is subject to Rule 611(b)(3) of 

Regulation NMS as an exception to the 

Order Protection Rule. 

The 10% or more move in price will 

be calculated by changes in each 

consolidated last-sale price 

disseminated by a network processor 

over a five minute rolling period 

measured continuously. In the first five 

minutes of the calculation period, prices 

for comparison will not be based on five 

minutes of trading in that security. For 

example, a trade at 9:45:05 will be 

compared only to trades between 

9:45:00 and 9:45:05. The last potential 

trade to trigger a pause will be at 3:35 

p.m., so that such trading pause will 

end at 3:40 p.m. 

As proposed, only regular way, insequence transactions qualify as [sic] 

use in price movement calculations. To 

attempt to ensure that erroneous 

executions do not trigger a trading 

pause, the Exchange also proposes that 

it can exclude a transaction price from 

use in calculating price movements if it 

concludes that the transaction price 

resulted from an erroneous execution. 

The proposed rule further provides 

that if a trading pause is triggered, the 

Exchange will immediately notify the 

single plan processor responsible for 

consolidation of information for the 

security. 

The Exchange further proposes to 

include in the rule that if the listing 

market for a security pauses under its 

respective rules, the Exchange will also 

pause trading in that security until the 

listing market has either resumed 

trading or the Exchange has received 

notice from the primary listing market 

that trading may resume. Moreover, if 

the primary listing market does not 

reopen trading in the security within 10 

minutes of notification of a trading 

pause, the Exchange may resume 

trading of the security. 

2. Statutory Basis 

The statutory basis for the proposed 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),4 which requires the rules of an 

exchange to promote just and equitable 

principles of trade, to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. The proposed rule 

change also is designed to support the 

principles of Section 11A(a)(1) 5 of the 

Act in that it seeks to ensure fair 

competition among brokers and dealers 

and among exchange markets. The 

Exchange believes that the proposed 

rule meets these requirements in that it 

promotes transparency and uniformity 

across markets concerning decisions to 

pause trading in a security when there 

are significant price movements. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received from 

Members, Participants or Others 

Written comments on the proposed 

rule change were neither solicited nor 

received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

(i) as the Commission may designate up 

to 90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve the proposed 

rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved.6

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

Federal Register / Vol. 75, No. 99 / Monday, May 24, 2010 / Notices 28841 

7The Commission believes that a 10-day 

comment period is reasonable, given the urgency of 

the matter. It will provide adequate time for 

comment. 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3NMS stock means any NMS security other than 

an option. See SEC Rule 600 of Regulation NMS. 

4See Securities Exchange Act Release No. 58753 

(October 8, 2008), 73 FR 61177 (October 15, 2008) 

(Notice of Filing and Immediate Effectiveness of 

File No. SR–FINRA–2008–048). 

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–2010–061 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–Nasdaq–2010–061. 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 

Nasdaq. 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–2010–061 and 

should be submitted on or before June 

3, 2010.7

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–12422 Filed 5–21–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62133; File No. SR–FINRA– 

2010–025] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing of 

Proposed Rule Change To Amend 

FINRA Rule 6121 (Trading Halts Due to 

Extraordinary Market Volatility) 

May 19, 2010. 

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 May 18, 

2010, 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, II, 

and III 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 

permit FINRA to halt trading by FINRA 

members otherwise than on an exchange 

where a primary listing market has 

issued a trading pause due to 

extraordinary market conditions. 

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 

In October 2008, FINRA adopted 

FINRA Rule 6121 (Trading Halts Due to 

Extraordinary Market Volatility) to 

permit FINRA to halt over-the-counter 

(‘‘OTC’’) trading of NMS stocks 3 if other 

major U.S. securities markets initiate 

market-wide trading halts in response to 

their rules or extraordinary market 

conditions or if otherwise directed by 

the SEC.4 This proposed rule change 

was designed to further the goal of 

coordinated self-regulatory organization 

(‘‘SRO’’) action to address potentially 

destabilizing market volatility, 

consistent with the circuit breaker 

trading halt authority of the exchanges. 

On May 18, 2010, several national 

securities exchanges filed new rules 

with the Commission to provide the 

exchanges with authority to issue 

trading pauses for individual securities 

if the price of such security moves 10% 

or more from a sale in a preceding fiveminute period. These changes would 

provide uniform market-wide trading 

pause standards for individual 

securities in the S&P 500® Index that 

experience a rapid price movement. 

Consistent with the exchanges’ 

proposals and in consultation with the 

staff of the Commission, FINRA is 

proposing to amend FINRA Rule 6121 to 

add new Supplementary Material .01 to 

provide 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. 

If, however, trading has not resumed on 

the primary listing market and ten 

minutes have passed since the 

individual stock trading pause message 

has been received from the responsible 

single plan processor or the primary 

listing market has issued notice that it 

cannot resume trading for a reason other 

than a significant imbalance, FINRA 

may permit the resumption of trading 

otherwise than on an exchange if 

trading has commenced on at least one 

other national securities exchange. 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES