59316 Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 

6 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Exchange believes that the proposed 

rule meets these requirements in that it 

promotes transparency and uniformity 

across markets concerning minimum 

market maker quotation requirements. 

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. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 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 or disapprove 

such proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change 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–CHX–2010–22 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–CHX–2010–22. 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 inspection and copying 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–CHX–2010–22 and should 

be submitted on or before October 18, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–24053 Filed 9–24–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62952; File No. SR–NSX– 

2010–12] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing of a Proposed Rule Change 

To Amend NSX Rule 11.8 To Enhance 

Quotation Requirements for Market 

Makers 

September 20, 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 

September 17, 2010, National Stock 

Exchange, Inc. (‘‘NSX’’ 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 Substance of 

the Proposed Rule Change 

National Stock Exchange, Inc. 

(‘‘NSX®’’ or the ‘‘Exchange’’) is proposing 

to amend NSX Rule 11.8 to enhance 

quotation requirements for market 

makers. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nsx.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 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Market Maker Quote Obligations: 

The Exchange proposes to adopt rules 

to enhance minimum quotation 

requirements for market makers. Under 

the proposal, the Exchange will require 

market makers for each stock in which 

they are registered to continuously 

maintain a two-sided quotation within a 

designated percentage of the National 

Best Bid and National Best Offer as 

appropriate. These enhanced market 

maker quotation requirements are 

intended to eliminate trade executions 

against market maker placeholder 

quotations traditionally priced far away 

from the inside market, commonly 

known as ‘‘stub quotes.’’ They are also 

intended to augment and work in 

relation to the single stock pause 

standards already in place on a pilot 

basis for stocks in the S&P 500, Russell 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 186 / Monday, September 27, 2010 / Notices 59317 

3See Exchange Act Release Nos. 62252 (June 10, 

2010), 75 FR 34186 (June 16, 2010), and 62884 

(September 10, 2010). 

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

5 15 U.S.C. 78k–1(a)(1). 6 17 CFR 200.30–3(a)(12). 

1000 and select exchange traded 

products.3

Under the proposal, the Exchange will 

require registered market makers to 

enter and maintain quotes priced at no 

more than a certain percentage away 

from the national inside bid and offer. 

Permissible quotes are determined by 

the individual character of the security, 

the time of day in which the quote is 

entered, and other factors which are 

summarized below: 

For issues subject to an individual 

stock trading trigger pause, a 

permissible quote is determined by first 

looking at the applicable stock trading 

pause trigger percentage of the security 

and then reducing that number by 2%. 

Since currently the stock pause trigger 

percentage across all exchanges is 10%, 

a market maker’s quote in a such a 

security may not be more than 8% away 

from the national best bid or best offer, 

as appropriate. Once a compliant quote 

is entered, it may rest without 

adjustment until such time as it moves 

to within 1⁄2 of 1% of the applicable 

trigger pause percentage (i.e., currently 

9.5%) whereupon the market maker 

must immediately move its quote back 

to at least the permissible default level 

of 8% away from the national best bid 

or best offer. During times in which a 

trigger pause percentage is not 

applicable (e.g., before 9:45 a.m. and 

after 3:35 p.m.), a market maker must 

maintain a quote no further than 20% 

away from the inside (i.e., it may rest 

without adjustment until it reaches 

21.5%). In the absence of national best 

bid or best offer, the above calculations 

will remain the same, but will use the 

national last sale instead of the absent 

bid or offer. 

For securities not subject to any 

individual stock pause trigger, the 

proposal will a [sic] assume a 

hypothetical 32% trigger pause, apply a 

2% reduction, and require market 

makers in those issues to maintain 

quotes no more than 30% away from the 

national best bid and national best offer. 

Like securities subject to stock trading 

pauses, once a compliant quote is 

entered, it may rest without adjustment 

until such time as it moves to within 1⁄2

of 1% of its applicable trigger pause 

percentage (31.5%) whereupon the 

market maker must immediately move 

its quote back to at least the permissible 

default level of 30%. These 

requirements shall apply to Regulation 

NMS securities during normal market 

hours. 

Nothing in the above precludes a 

market maker from voluntarily quoting 

at price levels that are closer to the 

national best bid and best offer than 

required under the proposal. 

2. Statutory Basis 

The statutory basis for the proposed 

rule change is Section 6(b)(5) of 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 assure 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 minimum 

market maker quotation requirements. 

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 Exchange Act. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate 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 or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change 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–2010–12 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–NSX–2010–12. 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 inspection and copying 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–2010–12 and should 

be submitted on or before October 18, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–24056 Filed 9–24–10; 8:45 am] 

BILLING CODE 8010–01–P 


srobinson on DSKHWCL6B1PROD with NOTICES