Document ID: SEC-2010-0763-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Chicago Stock Exchange, Inc.
Posted Date: 2010-05-24T04:00Z

[Federal Register: May 24, 2010 (Volume 75, Number 99)]
[Notices]               
[Page 28842-28843]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24my10-98]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62130; File No. SR-CHX-2010-10]

 
Self-Regulatory Organizations; Proposed Rule Change by Chicago 
Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To 
Establish a Trading Halt for Individual Stocks Contained in the 
Standard & Poor's 500 Index

May 19, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on May 19, 2010, the Chicago Stock Exchange, Inc. (``CHX'' or the 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II 
and III below, which Items have been prepared by the CHX. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    CHX proposes to amend Article 20, Rule 2 to amend its rules to 
create circuit breakers regarding the trading of individual securities. 
The text of this proposed rule change is available on the Exchange's 
Web site at (http://www.chx.com) and in 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 CHX included statements 
concerning the purpose of and basis for the proposed rule changes and 
discussed any comments it received regarding the proposal. The text of 
these statements

[[Page 28843]]

may be examined at the places specified in Item IV below. The CHX 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 Changes

1. Purpose
    The CHX is proposing to amend Article 20, Rule 2 to allow the 
Exchange to pause trading in an individual stock when the primary 
listing market for such stock issues a trading pause. 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 this rule change in consultation with U.S. listing markets 
and Commission staff to provide for uniform marketwide trading pause 
standards for individual securities in the S&P 500[supreg] Index that 
experience rapid price movement for a Pilot Period expiring on December 
10, 2010. The Exchange is not currently the primary listing market for 
any securities to be included in the Pilot, and thus, will not be 
instituting any trading pauses on its own initiative at this time.\3\
---------------------------------------------------------------------------

    \3\ The Exchange anticipates discussion during the Pilot period 
about the potential expansion of individual stock circuit breakers 
to a broader group of securities. To the extent that it appears that 
the Exchange may become the primary listing exchange for any 
securities affected by an individual circuit breaker, it will adopt 
the necessary rules to support that framework. See, e.g., proposed 
NYSE Rule 80C.
---------------------------------------------------------------------------

    As proposed, the Exchange will pause trading in that stock until 
trading has resumed on the primary listing market or notice has been 
received from the primary listing market that trading may resume. 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 Exchange believes that the foregoing proposal is substantially 
similar to the submissions of other U.S. equities exchanges concerning 
circuit breaker provisions for individual securities and which are 
under consideration by the Commission.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act in general,\4\ and furthers the objectives 
of Section 6(b)(5) in particular,\5\ in that it is designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transaction in 
securities, to remove impediments and perfect the mechanisms of a free 
and open market, 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement of 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 Regarding the 
Proposed Rule Changes Received From Members, Participants or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Changes 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 such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.\7\
---------------------------------------------------------------------------

    \7\ The Commission notes that the exchange has requested 
accelerated approval of the filing.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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 No. SR-CHX-2010-10 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 No. SR-CHX-2010-10. 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 on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of such filing will 
also be available for inspection and copying at the principal office of 
the CHX. 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-CHX-
2010-10 and should be submitted on or before June 3, 2010.\8\
---------------------------------------------------------------------------

    \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.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-12423 Filed 5-21-10; 8:45 am]
BILLING CODE 8010-01-P