[Federal Register Volume 78, Number 23 (Monday, February 4, 2013)]
[Notices]
[Pages 7833-7835]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02287]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68744; File No. SR-NYSEMKT-2013-04]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending Rule 80C--
Equities, Which Provides for Trading Pauses in Individual Securities 
Due to Extraordinary Market Volatility, Extending the Effective Date of 
the Pilot Until the Earlier of the Initial Date of Operations of the 
Regulation NMS Plan To Address Extraordinary Market Volatility or 
February 4, 2014

January 28, 2013.
    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 15, 2013, NYSE MKT LLC (``NYSE MKT'' or ``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 Exchange. 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

    The Exchange proposes to amend Rule 80C--Equities, which provides 
for trading pauses in individual securities due to extraordinary market 
volatility, to extend the effective date of the pilot by which such 
rule operates from the current scheduled expiration date of February 4, 
2013, until the earlier of the initial date of operations of the 
Regulation NMS Plan to Address Extraordinary Market Volatility or 
February 4, 2014. The text of the proposed rule change is available on 
the Exchange's Web site at www.nyse.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 self-regulatory organization 
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 those statements may be examined at

[[Page 7834]]

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
    The Exchange proposes to amend Rule 80C--Equities, which provides 
for trading pauses in individual securities due to extraordinary market 
volatility, to extend the effective date of the pilot by which such 
rule operates from the current scheduled expiration date of February 4, 
2013,\3\ until the earlier of the initial date of operations of the 
Regulation NMS Plan to Address Extraordinary Market Volatility or 
February 4, 2014. The pilot will continue to operate as to individual 
securities until such security is subject to the Regulation NMS Plan to 
Address Extraordinary Market Volatility.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 67568 (August 1, 
2012), 77 FR 47140 (August 7, 2012) (SR-NYSEMKT-2012-27).
---------------------------------------------------------------------------

    Rule 80C--Equities requires the Exchange to pause trading in an 
individual security listed on the Exchange if the price moves by a 
specified percentage as compared to prices of that security in the 
preceding five-minute period during a trading day, which period is 
defined as a ``Trading Pause.'' The pilot was developed and implemented 
as a market-wide initiative by the Exchange and other national 
securities exchanges in consultation with the Commission staff and is 
currently applicable to all NMS stocks and specified exchange-traded 
products.\4\
---------------------------------------------------------------------------

    \4\ The Exchange notes that the other national securities 
exchanges and the Financial Industry Regulatory Authority have 
adopted the pilot in substantially similar form. See Securities 
Exchange Act Release No. 62252 (June 10, 2010), 75 FR 34186 (June 
16, 2010) (File Nos. SR-BATS-2010-014; SR-EDGA-2010-01; SR-EDGX-
2010-01; SR-BX-2010-037; SR-ISE-2010-48; SR-NYSE-2010-39; SR-
NYSEAmex-2010-46; SR-NYSEArca-2010-41; SR-NASDAQ-2010-061; SR-CHX-
2010-10; SR-NSX-2010-05; and SR-CBOE-2010-047) and Securities 
Exchange Act Release No. 62251 (June 10, 2010), 75 FR 34183 (June 
16, 2010) (SR-FINRA-2010-025). See also Securities Exchange Act 
Release No. 62884 (September 10, 2010), 75 FR 56618 (September 16, 
2010) (File Nos. SR-BATS-2010-018; SR-BX-2010-044; SR-CBOE-2010-065; 
SR-CHX-2010-14; SR-EDGA-2010-05; SR-EDGX-2010-05; SR-ISE-2010-66; 
SR-NASDAQ-2010-079; SR-NYSE-2010-49; SR-NYSEAmex-2010-63; SR-
NYSEArca-2010-61; and SR-NSX-2010-08 and Securities Exchange Act 
Release No. 62883 (September 10, 2010), 75 FR 56608 (September 16, 
2010) (SR-FINRA-2010-033). See also Securities Exchange Act Release 
No. 63501 (December 9, 2010), 75 FR 78307 (December 15, 2010) (SR-
NYSEAmex-2010-117). A proposal to, among other things, expand the 
pilot to include all NMS stocks not already included therein was 
implemented on August 8, 2011. See Securities Exchange Act Release 
No. 64735 (June 23, 2011), 76 FR 38243 (June 29, 2011) (File Nos. 
SR-BATS-2011-016; SR-BYX-2011-011; SR-BX-2011-025; SR-CBOE-2011-049; 
SR-CHX-2011-09; SR-EDGA-2011-15; SR-EDGX-2011-14; SR-FINRA-2011-023; 
SR-ISE-2011-028; SR-NASDAQ-2011-067; SR-NYSE-2011-21; SR-NYSEAmex-
2011-32; SR-NYSEArca-2011-26; SR-NSX-2011-06; and SR-Phlx-2011-64).
---------------------------------------------------------------------------

    The extension proposed herein would allow the pilot to continue to 
operate without interruption until implementation of the Regulation NMS 
Plan to Address Extraordinary Market Volatility.\5\ The Exchange 
anticipates that the Regulation NMS Plan to Address Extraordinary 
Market Volatility will not begin initial operations on February 4, 2013 
as currently planned, but will be delayed. If the Regulation NMS Plan 
to Address Extraordinary Market Volatility has an initial date of 
operations before February 4, 2014, the proposed pilot for trading 
pauses would expire at that time.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 67091 (May 31, 
2012), 77 FR 33498 (June 6, 2012) (File No. 4-631) (Order Approving, 
on a Pilot Basis, the National Market System Plan To Address 
Extraordinary Market Volatility by BATS Exchange, Inc., BATS Y-
Exchange, Inc., Chicago Board Options Exchange, Incorporated, 
Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, 
Inc., Financial Industry Regulatory Authority, Inc., NASDAQ OMX BX, 
Inc., NASDAQ OMX PHLX LLC, The Nasdaq Stock Market LLC, National 
Stock Exchange, Inc., New York Stock Exchange LLC, NYSE MKT LLC, and 
NYSE Arca, Inc).
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\6\ in 
general, and furthers the objectives of Section 6(b)(5) of the Act,\7\ 
in particular, in that it is designed 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 protect investors and the public interest. The Exchange 
believes that the change proposed herein meets these requirements in 
that it promotes uniformity across markets concerning decisions to 
pause trading in a security when there are significant price movements, 
which promotes just and equitable principles of trade and removes 
impediments to, and perfects the mechanism of, a free and open market 
and a national market system. Additionally, the extension of the pilot 
until the earlier of the initial date of operations of the Regulation 
NMS Plan to Address Extraordinary Market Volatility or February 4, 2014 
would allow the pilot to continue to operate without interruption while 
the Exchange and the Commission further assess the effect of the pilot 
on the marketplace or whether other initiatives should be adopted in 
lieu of the current pilot, which contributes to the protection of 
investors and the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on 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. The proposed changes are 
being made to extend the operation of the trading pause pilot until the 
earlier of the initial date of operations of the Regulation NMS Plan to 
Address Extraordinary Market Volatility or February 4, 2014 would allow 
the pilot to continue to operate without interruption until 
implementation of the Regulation NMS Plan to Address Extraordinary 
Market Volatility, which contributes to the protection of investors and 
the public interest. Other competing equity exchanges are subject to 
the same trading pause requirements specified in the Plan. Thus, the 
proposed changes will not impose any burden on competition while 
providing trading pause requirements specified in the Plan.

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

    No written comments were solicited or received with respect to 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 \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
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

[[Page 7835]]

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 and Rule 19b-4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
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.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ 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. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because such waiver 
would allow the pilot program to continue uninterrupted. Accordingly, 
the Commission hereby grants the Exchange's request and designates the 
proposal operative upon filing.\12\
---------------------------------------------------------------------------

    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 [email protected]. Please include 
File Number SR-NYSEMKT-2013-04 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-NYSEMKT-2013-04. 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 
10:00 a.m. and 3:00 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 publicly available. All 
submissions should refer to File Number SR-NYSEMKT-2013-04 and should 
be submitted on or before February 25, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-02287 Filed 2-1-13; 8:45 am]
BILLING CODE 8011-01-P