Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on June 10, 2010, NYSE Amex LLC (the “Exchange” or “NYSE Amex”) 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 self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend NYSE Amex Rule 953NY to provide that the Exchange will halt trading when an underlying security is the subject of a trading pause. The text of the proposed rule change is available at the Exchange, the Commission's Public Reference Room, on the Commission's Web site at http://www.sec.gov, and at http://www.nyse.com.
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 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
The Exchange proposes to amend Rule 953NY governing Trading Halts and Suspensions to add a new subsection to the rule that would provide that the Exchange shall halt trading in any options contract when the underlying security has been paused by the primary market.
The Exchange proposes this rule to provide for how the Exchange will respond when trading in any underlying security has paused, as set forth in the stock-by-stock circuit breakers proposed by the equities markets to respond to extraordinary market volatility in individual securities. The Exchange believes that when trading has paused on the equities markets pursuant to these proposed rules, trading should also be halted in the options markets.
Accordingly, the Exchange proposes to add a new subsection to Rule 953NY to provide that trading on the Exchange in any option contract shall be halted whenever trading in the underlying security has been paused by the primary market. The Exchange proposes that trading in such options contracts may be resumed upon a determination by the Exchange that the conditions that led to the pause are no longer present and that the interests of a fair and orderly market are best served by a resumption of trading. However, under no circumstances would trading resume before the Exchange has received notification that the underlying security has resumed trading.
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5) of the Securities Exchange Act of 1934 (the “Act”), which requires the rules of an exchange 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 proposed rule change also is designed to support the principles of Section 11A(a)(1) 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 a fair and orderly market so that when trading is paused in the equities markets, options contracts related to that security are also paused.
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
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
Because the proposed rule change: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, provided that the self-regulatory organization has given the Commission written notice of its intent to file 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 proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days after the date of filing. However, Rule 19b-Start Printed Page 344964(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange requested that the Commission waive the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii), which would make the rule change effective and operative upon filing. The Commission approved filings from the exchanges and the Financial Industry Regulatory Authority to institute a single stock trading pause for equity securities that experience a 10% change in price during a five minute period. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it will allow NYSE Amex to halt trading for individual equity options at the same time that the primary listing market implements the pilot for eligible underlying stocks.
At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate 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:
- Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
- Send an e-mail to email@example.com. Please include File Number SR-NYSEAmex-2010-55 on the subject line.
- Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAmex-2010-55. 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 publicly available. All submissions should refer to File Number SR-NYSEAmex-2010-55 and should be submitted on or before July 8, 2010.Start Signature
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Florence E. Harmon,
3. See Securities Exchange Act Release Notice Nos. 62121 (May 19, 2010), 75 FR 28834 (May 24, 2010) (SR-BATS-2010-14); 62122 (May 19, 2010), 75 FR 28833 (May 24, 2010) (SR-EDGA-2010-1); 62123 (May 19, 2010), 75 FR 28844 (May 24, 2010) (SR-EDGX-2010-1); 62124 (May 19, 2010), 75 FR 28828 (May 24, 2010) (SR-BX-2010-37); 62125 (May 19, 2010), 75 FR 28836 (May 24, 2010) (SR-ISE-2010-48); 62126 (May 19, 2010), 75 FR 28831 (May 24, 2010) (SR-NYSE-2010-39); 62127 (May 19, 2010), 75 FR 28837 (May 24, 2010) (SR-NYSEAmex-2010-46); 62128 (May 19, 2010), 75 FR 28830 (May 24, 2010) (SR-NYSEArca-2010-41); 62129 (May 19, 2010), 75 FR 28839 (May 24, 2010) (SR-Nasdaq-2010-061); 62130 (May 19, 2010), 75 FR 28842 (May 24, 2010) (SR-CHX-2010-10); 62131 (May 19, 2010), 75 FR 28845 (May 24, 2010) (SR-NSX-2010-05); 62132 (May 19, 2010), 75 FR 28847 (May 24, 2010) (SR-CBOE-2010-47); 62133 (May 19, 2010), 75 FR 28841 (May 19, 2010), 75 FR 28841 (May 24, 2010) (SR-FINRA-2010-25).Back to Citation
7. 17 CFR 240.19b-4(f)(6). The Commission notes that the Exchange has met this requirement.Back to Citation
10. See Securities Exchange Act Release Nos. 62251 and 62252 (June 10, 2010).Back to Citation
11. 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).Back to Citation
[FR Doc. 2010-14607 Filed 6-16-10; 8:45 am]
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