Document ID: SEC-2011-0480-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: National Stock Exchange, Inc.
Posted Date: 2011-04-12T04:00Z

[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20409-20410]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8632]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64213; File No. SR-NSX-2011-04]

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

April 6, 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 March 31, 2011, National Stock Exchange, Inc. (``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 comment 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 
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 April 11, 2011. The instant rule 
filing proposes to extend the pilot program until 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 Securities as defined in Commentary .05 of Rule 11.20.
    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 Exchange, in consultation with the Commission and other 
markets, has determined that the duration of this pilot program should 
be extended until August 11, 2011 or to coincide, if applicable, with 
the earlier implementation date of the limit up/limit down mechanism. 
Accordingly,

[[Page 20410]]

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 ``April 11, 2011'' to the earlier of August 11, 2011 or 
the date on which the limit up/limit down mechanism, if adopted, 
applies to the Circuit Breaker Securities.
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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).
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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 Act,\6\ in 
general, and Section 6(b)(5) of the Act,\7\ 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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    \6\ 15 U.S.C. 78f(b) and 15 U.S.C. 78k-1, respectively.
    \7\ 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

    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 if consistent with 
the protection of investors and the public interest, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6). When filing a proposed rule change 
pursuant to Rule 19b-4(f)(6) under the Act, an exchange is required 
to give 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 date 
of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Commission notes that the Exchange 
has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing.\10\ 
However, Rule 19b-4(f)(6)\11\ permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay.
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    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ Id.
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    The Commission has considered the Exchange's request to waive the 
30-day operative delay. 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.\12\ For this 
reason, the Commission designates the proposed rule change to be 
operative upon filing.
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    \12\ For the purposes only of waiving the operative delay of 
this proposal, the Commission has 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
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, as amended, 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 rule-comments@sec.gov. Please include 
File Number SR-NSX-2011-04 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-2011-04. 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 offices 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-2011-04, and 
should be submitted on or before May 3, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8632 Filed 4-11-11; 8:45 am]
BILLING CODE 8011-01-P