
[Federal Register: September 24, 2008 (Volume 73, Number 186)]
[Notices]               
[Page 55174-55175]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24se08-148]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58588]

 
Emergency Order Pursuant to Section 12(k)(2) of the Securities 
Exchange Act of 1934 Taking Temporary Action To Respond to Market 
Developments

September 18, 2008.
    The Commission is aware of the continued potential of sudden and 
excessive fluctuations of securities prices and disruption in the 
functioning of the securities markets that could threaten fair and 
orderly markets. Given the importance of confidence in our financial 
markets as a whole, we have

[[Page 55175]]

also become concerned about sudden and unexplained declines in the 
prices of securities. Such price declines can give rise to questions 
about the underlying financial condition of an issuer, which in turn 
can create a crisis of confidence without a fundamental underlying 
basis. This crisis of confidence can impair the liquidity and ultimate 
viability of an issuer, with potentially broad market consequences.
    As a result of these recent developments, the Commission concluded 
that there continues to exist the potential of sudden and excessive 
fluctuations of securities prices generally and disruption in the 
functioning of the securities markets that could threaten fair and 
orderly markets. Based on this conclusion, the Commission is exercising 
its powers under Section 12(k)(2) of the Securities Exchange Act of 
1934.\1\ Pursuant to Section 12(k)(2), in appropriate circumstances the 
Commission may issue summarily an order to alter, supplement, suspend, 
or impose requirements or restrictions with respect to matters or 
actions subject to regulation by the Commission.
---------------------------------------------------------------------------

    \1\ This finding of an ``emergency'' is solely for purposes of 
Section 12(k)(2) of the Exchange Act and is not intended to have any 
other effect or meaning or to confer any right or impose any 
obligation other than set forth in this Order.
---------------------------------------------------------------------------

    We have determined that issuer repurchases can represent an 
important source of liquidity during times of market volatility. 
Exchange Act Rule 10b-18 provides issuers with a safe harbor to effect 
repurchases within certain conditions. Historically, issuers generally 
have been reluctant to undertake repurchases without the certainty that 
their repurchases come within the safe harbor. Temporarily altering the 
timing and volume conditions in the safe harbor will provide additional 
flexibility and certainty to issuers that consider executing 
repurchases during the current market conditions. In these unusual and 
extraordinary circumstances, we believe altering the timing and volume 
conditions in Exchange Act Rule 10b-18 is necessary in the public 
interest and for the protection of investors to maintain fair and 
orderly securities markets, and to prevent substantial disruption in 
the securities markets.
    It is ordered, pursuant to our Section 12(k)(2) powers, that:
    In connection with a Rule 10b-18 purchase or with a Rule 10b-18 bid 
that is made during the period covered by this Order by the use of any 
means or instrumentality of interstate commerce or of the mails, or of 
any facility of any national securities exchange, an issuer, or an 
affiliated purchaser of the issuer, shall not be deemed to have 
violated Section 9(a)(2) of the Exchange Act or Rule 10b-5 under the 
Exchange Act, solely by reason of the time or price at which its Rule 
10b-18 bids or Rule 10b-18 purchases are made or the amount of such 
bids or purchases or the number of brokers or dealers used in 
connection with such bids or purchases if the issuer or affiliated 
purchaser of the issuer meets all of the conditions in Rule 10b-18 with 
the exception that:
    (i) The time of purchases condition in paragraphs (b)(2)(i), 
(b)(2)(ii), and (b)(2)(iii) of Exchange Act Rule 10b-18 is suspended; 
and
    (ii) The volume of purchases condition in paragraph (b)(4) of 
Exchange Act Rule 10b-18 is modified so that the amount of Rule 10b-18 
purchases must not exceed 100 percent of the ADTV for the security.
    All other provisions of Exchange Act Rule 10b-18, including the 
manner and price of purchase conditions of paragraphs (b)(1) and 
(b)(3), are not altered by this order. Terms used in this order have 
the same meanings as those terms used in Exchange Act Rule 10b-18 
unless stated otherwise.
    This Order shall be effective at 12:01 a.m. EDT on September 19, 
2008, and shall terminate at 11:59 p.m. on October 2, 2008 unless 
further extended by the Commission.

    By the Commission.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8-22370 Filed 9-23-08; 8:45 am]

BILLING CODE 8010-01-P
