[Federal Register Volume 76, Number 157 (Monday, August 15, 2011)]
[Notices]
[Pages 50516-50518]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-20692]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65070; File No. SR-CBOE-2011-076]
Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Related to the Extension of the CBSX Individual Stock
Trading Pause Pilot Program
August 9, 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 August 5, 2011 the Chicago Board Options Exchange, Incorporated
(``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I and II below, which Items have been prepared by the
Exchange. The Exchange has designated the proposal as a ``non-
controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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[[Page 50517]]
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the individual stock trading pause
pilot program pertaining to the CBOE Stock Exchange (``CBSX,'' the
CBOE's stock trading facility). This rule change simply seeks to extend
the pilot. No other changes to the pilot are being proposed. The text
of the proposed rule change is available on the Exchange's Web site
(http://www.cboe.org/Legal), at the Exchange's Office of the Secretary
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 those 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
Rule 6.3C, Individual Stock Trading Pauses Due to Extraordinary
Market Volatility, was approved by the Commission on June 10, 2010 on a
pilot basis. The pilot is currently set to expire on 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 Stocks.\5\ The rule was developed in consultation with
U.S. listing markets to provide for uniform market-wide trading pause
standards for certain individual stocks that experience rapid price
movement.\6\ As the duration of the pilot expires on 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 Stocks, the Exchange is proposing to extend the
effectiveness of Rule 6.3C through January 31, 2012.
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\5\ See Securities Exchange Act Release Nos. 62252 (June 10,
2010), 75 FR 34186 (June 16, 2010)(SR-CBOE-2010-047)(approval order
establishing pilot through December 10, 2010), 63502 (December 9,
2010), 75 FR 78306 (December 15, 2010)(SR-CBOE-2010-112)(extension
of pilot through April 11, 2011) and 64194 (April 5, 2011), 76 FR
20389 (April 12, 2011)(SR-CBOE-2011-031)(extension of pilot through
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 Stocks). See also Securities
Exchange Act Release No. 64547 (May 25, 2011), 76 FR 31647 (June 1,
2011)(notice of filing of national market system plan to address
extraordinary market volatility, which contains a limit up-limit
down mechanism for NMS stocks).
\6\ The pilot list of stocks originally included all stocks in
the S&P 500 Index, but it has been expanded over time to include all
NMS stocks. See Securities Exchange Act Release Nos. 62884
(September 10, 2010), 75 FR 56618 (September 16, 2010)(SR-CBOE-2010-
065)(order approving expansion of the individual stock trading pause
pilot to include all stocks in the Russell 1000 index and a pilot
list of Exchange Traded Products) and 64735 (June 23, 2011), 76 FR
38243 (June 29, 2011)(SR-CBOE-2011-049)(order approving further
expansion of the individual stock trading pause pilot to include all
NMS stocks effective August 8, 2011).
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2. Statutory Basis
Extension of the pilot period will allow the Exchange to continue
to operate the pilot on an uninterrupted basis. Accordingly, the
Exchange believes the proposed rule change is consistent with the Act
\7\ and the rules and regulations under the Act applicable to a
national securities exchange and, in particular, the requirements of
Section 6(b) of the Act.\8\ Specifically, the Exchange believes the
proposed rule change is consistent with the Section 6(b)(5) \9\
requirements that the rules of an exchange be designed to promote just
and equitable principles of trade, to prevent fraudulent and
manipulative acts 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) \10\ 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 stock when there are
significant price movements.
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\7\ 15 U.S.C. 78a et seq.
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
\10\ 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
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 on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposal.
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
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 \13\ and Rule 19b-
4(f)(6)(iii) thereunder.\14\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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 Rule 19b-4(f)(6) \15\ normally
does not become operative for 30 days after the date of filing.
However, pursuant to Rule 19b-4(f)(6)(iii) \16\ 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.
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
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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. For this reason, the Commission
designates the proposed rule change as operative upon filing.\17\
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\17\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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[[Page 50518]]
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.
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 e-mail to [email protected]. Please include
File No. SR-CBOE-2011-076 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-CBOE-2011-076. 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 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 No. SR-CBOE-2011-076 and should be
submitted on or before September 6, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-20692 Filed 8-12-11; 8:45 am]
BILLING CODE 8011-01-P