Document ID: SEC-2010-0765-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NASDAQ OMX BX, Inc.
Posted Date: 2010-05-24T04:00Z

[Federal Register: May 24, 2010 (Volume 75, Number 99)]
[Notices]               
[Page 28828-28830]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24my10-89]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62124; File No. SR-BX-2010-037]

 
Self-Regulatory Organizations; Notice of Filing of a Proposed 
Rule Change by NASDAQ OMX BX, Inc. To Adopt Rule 4120(a)(11) Concerning 
Individual Stock Trading Pauses and To Adopt Related IM-4120-3

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, NASDAQ OMX BX, Inc. (the ``Exchange'' or ``BX'') 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

    The Exchange is filing this proposed rule change to adopt Rule 
4120(a)(11) concerning individual stock trading pauses in certain 
securities, and to adopt related IM-4120-3.
    The text of the proposed rule change is below. Proposed new 
language is in italics and proposed deletions are in [brackets].\3\
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    \3\ The text of the proposed rule change is available from BX's 
Web site at http://nasdaqomxbx.cchwallstreet.com/NASDAQOMXBX/
Filings/, at the Exchange's principal office, and at the 
Commission's Public Reference Room.
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* * * * *

4120. Trading Halts

    (a) Authority to Initiate Trading Halts or Pauses

[[Page 28829]]

    In circumstances in which the Exchange deems it necessary to 
protect investors and the public interest, the Exchange, pursuant to 
the procedures set forth in paragraph (c):
    (1)-(10) No change.
    (11) If a primary listing market issues an individual stock 
trading pause in any of the Circuit Breaker Securities, as defined 
in IM-4120-3, the Exchange will pause trading 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, the 
Exchange may resume trading in such stock.
    (b)-(c) No change.
    IM-4120-1. No change.
    IM-4120-2. No change.
    IM-4120-3. Circuit Breaker Securities Pilot
    The provisions of paragraph (a)(11) of this Rule shall be in 
effect during a pilot set to end on December 10, 2010. During the 
pilot, the term ``Circuit Breaker Securities'' shall mean the 
securities included in the S&P 500 [supreg] Index.
* * * * *

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
    The primary listing markets for U.S. stocks are in the process of 
amending their rules so that they may, from time to time, issue a 
trading pause for an individual security if the price of such security 
moves 10% or more from a sale in a preceding five-minute period. The 
Exchange is proposing the rule change described below in consultation 
with other markets and Commission staff to provide for uniform market-
wide trading pause standards for individual securities in the S&P 500 
[supreg] Index, as set forth below. The Exchange is not currently the 
primary listing market for any securities, and thus, will not be 
issuing any trading pauses pursuant to its rules.
    The Exchange proposes to add a new paragraph to BX Rule 4120(a) to 
allow the Exchange to pause trading in an individual stock when the 
primary listing market for such stock issues a trading pause in any 
Circuit Breaker Securities, as defined below and in proposed IM-4120-3. 
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, 
the Exchange may resume trading in such stock.
    The proposed rule would apply to trading pauses issued by primary 
listing markets in ``Circuit Breaker Securities,'' as defined in 
proposed IM-4120-3. Specifically, on a pilot basis, set to end on 
December 10, 2010, Circuit Breaker Securities would mean the securities 
included in the S&P 500 [supreg] Index. Thus, proposed paragraph (11) 
of the Rule would be in effect only with respect to securities in the 
S&P 500 [supreg] Index.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\4\ in general, and with 
Sections 6(b)(5) of the Act,\5\ in particular, in that the proposal is 
designed to prevent fraudulent and manipulative acts and practices, to 
promote just and equitable principles of trade, to foster cooperation 
and coordination with persons engaged in regulating, clearing, 
settling, processing information with respect to, and facilitating 
transactions in securities, 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 is also designed to support the principles of Section 
11A(a)(1) \6\ 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 
decisions to pause trading in a security when there are significant 
price movements.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78k-1(a)(1).
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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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments 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.\7\
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    \7\ The Commission notes that the Exchange has requested 
accelerated approval of the filing.
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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 Exchange 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-BX-2010-037 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-BX-2010-037. 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

[[Page 28830]]

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 the 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-BX-2010-037 and should be 
submitted on or before June 3, 2010.\8\
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    \8\ The Commission believes that a 10-day comment period is 
reasonable, given the urgency of the matter. It will provide 
adequate time for comment.
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12416 Filed 5-21-10; 8:45 am]
BILLING CODE 8010-01-P