Document ID: SEC-2012-1296-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Stock Exchange, Inc.
Posted Date: 2012-08-08T04:00Z

[Federal Register Volume 77, Number 153 (Wednesday, August 8, 2012)]
[Notices]
[Pages 47476-47478]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-19359]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67577; File No. SR-NSX-2012-10]

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

August 2, 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 July 25, 2012, the National Stock Exchange, Inc. (``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 self-regulatory organization. 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 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
    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 July 31, 2012. The instant rule 
filing proposes an extension to the pilot program until February 4, 
2013.
    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,

[[Page 47477]]

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\ Finally, the date was extended until July 31, 
2012.\8\ The Exchange, in consultation with the Commission and other 
markets, is now proposing that this pilot program be extended until 
February 4, 2013 to coordinate with the implementation of a limit up/
limit down mechanism to address extraordinary market volatility. 
Accordingly, pursuant to the instant rule filing, the expiration date 
of the pilot program referenced in Commentary .05 to Rule 11.20B is 
proposed to be changed from ``July 31, 2012'' to ``February 4, 2013.''
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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).
    \8\ See Securities Exchange Act Release No. 34-66229 (January 
24, 2012), 77 FR 4842 (January 31, 2012) (SR-NSX-2012-01).
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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 \9\ (the ``Act''), in general, and Section 6(b)(5) 
of the Act,\10\ 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 and should continue uninterrupted until the February 4, 2013 
implementation date of the marketwide limit up/limit down mechanism to 
address extraordinary market volatility.
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    \9\ 15 U.S.C. 78f(b) and 15 U.S.C. 78k-1, respectively.
    \10\ 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 \11\ and Rule 19b-4(f)(6) thereunder.\12\ 
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 \13\ and Rule 19b-
4(f)(6)(iii) thereunder.\14\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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)\15\ normally 
does not become operative for 30 days after the date of filing. 
However, pursuant to Rule 19b-4(f)(6)(iii)\16\ 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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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 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.\17\
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    \17\ 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-2012-10 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-2012-10. 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 Commissions Internet Web site (http://www.sec.gov/

[[Page 47478]]

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. 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 Number SR-NSX-2012-10 and should be submitted by August 29, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-19359 Filed 8-7-12; 8:45 am]
BILLING CODE 8011-01-P