[Federal Register Volume 78, Number 29 (Tuesday, February 12, 2013)]
[Notices]
[Pages 9983-9985]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-03190]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68852; File No. SR-NSX-2013-05]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 11.20B To Extend the Pilot Program Regarding Trading Pauses 
in Individual Securities Due to Extraordinary Market Volatility

February 6, 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 28, 2013, National Stock Exchange, Inc. 
(``NSX[supreg]'' 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.
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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 proposes to amend NSX Rule 11.20B, 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 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
    The Exchange proposes to amend NSX Rule 11.20B, 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.
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    \3\ See Securities Exchange Act Release No. 67556 (August 1, 
2012), 77 FR 47156 (August 7, 2012) (SR-NYSE-2012-31).
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    NSX Rule 11.20B 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. 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\
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    \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. 63500 (December 9, 2010), 75 FR 78309 (December 15, 2010) (SR-
NYSE-2010-81). 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).

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[[Page 9984]]

    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.
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    \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).
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6 of the Act,\6\ and the rules and regulations thereunder and, 
in particular, the requirements of Section 6(b) of the Act.\7\ 
Specifically, the Exchange believes the proposed rule change furthers 
the objective of Section 6(b)(5) of the Act \8\ 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, 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.
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b).
    \8\ 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 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 and 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

    Written comments on the proposed rule change were neither solicited 
nor received.

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 \9\ and Rule 19b-(f)(6) thereunder.\10\ 
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 and Rule 19b-
(f)(6)(iii) thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-(f)(6). In addition, Rule 19b-(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.
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    A proposed rule change filed under Rule19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule19b-4(f)(6)(iii),\12\ 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.\13\
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ 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).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may

[[Page 9985]]

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-NSX-2013-05 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-2013-05. 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-NSX-2013-05 and should be 
submitted on or before March 5, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-03190 Filed 2-11-13; 8:45 am]
BILLING CODE 8011-01-P