Document ID: SEC-2012-0160-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Stock Exchange, Inc.
Posted Date: 2012-01-31T05:00Z

[Federal Register Volume 77, Number 20 (Tuesday, January 31, 2012)]
[Notices]
[Pages 4842-4843]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-1978]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66229; File No. SR-NSX-2012-01]

 Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend its Rules To Extend Pilot Program Regarding Trading Pauses in 
Individual Securities Due to Extraordinary Market Volatility

January 24, 2012.
    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 January 11, 2012, National Stock Exchange, Inc. (the 
``Exchange'' or ``NSX'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    National Stock Exchange, Inc. (``NSX[supreg]'' or ``Exchange'') is 
proposing to amend its rules to extend a certain pilot program 
regarding trading pauses in individual securities due to extraordinary 
market volatility.
    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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    With this rule change, the Exchange is proposing to extend a pilot 
program currently in effect regarding trading pauses in individual 
securities due to extraordinary market volatility under NSX Rule 
11.20B. Currently, unless otherwise extended or approved permanently, 
this pilot program will expire on January 31, 2012. The instant rule 
filing proposes an extension to the pilot program until July 31, 2012.
    NSX Rule 11.20B (Trading Pauses in Individual Securities Due to 
Extraordinary Market Volatility) was approved by the Securities and 
Exchange Commission (the ``Commission'') on June 10, 2010 on a pilot 
basis to end on December 10, 2010.\3\ The pilot program end date was 
subsequently extended until April 11, 2011.\4\ Similar rule changes 
were adopted by other markets in the national market system in a 
coordinated manner. As the Exchange noted in its filing to adopt NSX 
Rule 11.20B, during the pilot period, the Exchange, in conjunction with 
other markets in the national market system, would 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. NSX Rule 11.20B was expanded 
to include additional exchange traded products on September 10, 
2010.\5\ The pilot program end date was further extended to August 11, 
2011 or the date on which a limit up/limit down mechanism to address 
extraordinary market volatility, if adopted applies.\6\ The pilot 
program was then again lengthened until January 31, 2012.\7\ The 
Exchange, in consultation with the Commission and other markets, is now 
proposing that this pilot program be extended until July 31, 2012. 
Accordingly, pursuant to the instant rule filing, the expiration date 
of the pilot program referenced in

[[Page 4843]]

Commentary .05 to Rule 11.20B is proposed to be changed from ``January 
31, 2012'' to ``July 31, 2012.''
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    \3\ See Securities Exchange Act Release No. 62252 (June 10, 
2010), 75 FR 34186 (June 16, 2010) (SR-NSX-2010 05).
    \4\ See Securities Exchange Act Release No. 63512 (December 9, 
2010), 75 FR 78786 (December 16, 2010) (SR-NSX-2010-17).
    \5\ See Securities Exchange Act Release No. 62884 (September 10, 
2010), 75 FR 56618 (September 16, 2010) (SR-NSX-2010-08).
    \6\ See Securities and Exchange Act Release No. 34-64213 (April 
6, 2011), 76 FR 20409 (April 12, 2011) (SR-NSX-2011-04).
    \7\ See Securities Exchange Act Release No. 34-65095 (August 10, 
2011), 76 FR 50777 (August 16, 2011) (SR-NSX-2011-08).
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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 Securities 
Exchange Act of 1934 \8\ (the ``Act''), in general, and Section 6(b)(5) 
of the Act,\9\ 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 trading 
pauses.
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    \8\ 15 U.S.C. 78f(b) and 15 U.S.C. 78k-1, respectively.
    \9\ 15 U.S.C. 78f(b)(5).
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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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\ 
Because the 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 prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6)(iii) thereunder.\13\
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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 
Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6)\14\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii)\15\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing.
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, as 
it will allow the pilot program to continue uninterrupted, thereby 
avoiding the investor confusion that could result from a temporary 
interruption in the pilot program. For this reason, the Commission 
designates the proposed rule change to be operative upon filing.\16\
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    \16\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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 email to rule-comments@sec.gov. Please include 
File No. SR-NSX-2012-01 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 No. SR-NSX-2012-01. This file 
number should be included on the subject line if email 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 available publicly. All 
submissions should refer to File No. SR-NSX-2012-01 and should be 
submitted on or before February 21, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-1978 Filed 1-30-12; 8:45 am]
BILLING CODE 8011-01-P