
[Federal Register: September 10, 2010 (Volume 75, Number 175)]
[Notices]               
[Page 55389-55390]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10se10-106]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62822; File No. SR-NSX-2010-11]

 
Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend Rule 11.13 Regarding Maximum Permissible Response Time for Users 
of Order Delivery

September 1, 2010.
    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 31, 2010, 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 Exchange filed 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 comment 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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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NSX is proposing to amend NSX Rule 11.13(b)(2) concerning the time 
within which ETP Holders submitting displayed orders utilizing the 
Order Delivery mode of order interaction must respond to an inbound 
order before the ETP Holder's displayed is cancelled.
    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 is proposing to amend its Rule 11.13(b)(2) concerning 
the time within which an ETP Holders submitting displayed orders 
utilizing the Order Delivery mode of order interaction (``Order 
Delivery'') \5\ must respond to an inbound order before NSX BLADE 
[supreg] cancels the ETP Holder's order. Under the proposed rule 
change, if no response to an inbound order is received within 300 
milliseconds, the ETP Holder's order will be cancelled.\6\
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    \5\ The Exchange's two modes of order interaction are described 
in NSX Rule 11.13(b).
    \6\ In addition, Rule 11.13(b)(2) provides that, to be eligible 
for Order Delivery service, an ETP Holder ``must demonstrate to 
Exchange examiners that the User's system can automatically process 
the inbound order and respond immediately.'' Interpretation and 
Policy .01 provides that the Exchange ``currently considers 100 
milliseconds'' to be the maximum permissible response time to an 
inbound order. The current rule filing does not propose to change 
this standard.
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    Currently, Rule 11.13(b)(2) provides that an ETP Holder's displayed 
order in Order Delivery will be cancelled ``if no response to an 
inbound order is received within [frac12] of a second.'' Under the 
instant rule change, the Exchange proposes to replace reference to ``1/
2 of a second'' with ``300 milliseconds,'' which timeframe the Exchange 
considers appropriate at the present time and in conformity with 
industry standards. Utilization of the proposed 300 millisecond 
response time requirement represents no change to current Exchange 
practice.\7\
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    \7\ The Exchange is currently conducting a study regarding the 
time standards referenced in Rule 11.13, and will submit a rule 
change proposing modifications to those standards as necessary and 
appropriate.
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Effective Date
    The Exchange requests that the instant rule change be approved by 
the Securities and Exchange Commission (the ``Commission'') immediately 
upon filing, and in any case not more than thirty days after the date 
of filing of this rule change, or such earlier date as the Commission 
determines, because the

[[Page 55390]]

instant rule change is non-controversial and presents no novel issues.
2. Statutory Basis
    Approval of the rule change proposed in this submission is 
consistent with the requirements of the Act and the rules and 
regulations thereunder that are applicable to a national securities 
exchange, and, in particular, with the requirements of Section 6(b) of 
the Act.\8\ In particular, the proposed change is consistent with 
Section 6(b)(5) of the Act,\9\ because it would promote just and 
equitable principles of trade, remove impediments to, and perfect the 
mechanism of, a free and open market and a national market system, and, 
in general, protect investors and the public interest. The proposed 
rule change advances these objectives by establishing a clear and 
objective timeframe within which users of Order Delivery submitting 
displayed orders must respond to incoming orders before their orders 
are cancelled.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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 Exchange Act.

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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing rule change does not: (1) Significantly 
affect the protection of investors or the public interest; (2) impose 
any significant burden on competition; and (3) become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing.\12\ 
However, Rule 19b-4(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 has requested that the 
Commission waive the 30-day operative delay. The Commission notes that 
the Exchange has indicated that its proposal will provide a clear and 
objective timeframe, within which users of Order Delivery submitting 
displayed orders must respond to incoming orders before their orders 
are cancelled. The Commission believes that the Exchange's proposal to 
reduce from \1/2\ of a second to 300 milliseconds the timeframe for a 
user's response to inbound orders on the Exchange's Order Delivery 
system will update NSX's rule to reflect its current practice and 
represents the first step in NSX's efforts to propose a more 
appropriate standard that is more in line with current industry 
standards. Based on the foregoing, the Commission believes that waiving 
the 30-day operative delay is consistent with the protection of 
investors and the public interest and hereby designates the proposal 
operative upon filing.\13\
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    \12\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
the Commission written notice of its 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.
    \13\ For the 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 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.\14\
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    \14\ 15 U.S.C. 78s(b)(3)(C).
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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 rule-comments@sec.gov. Please include 
File Number SR-NSX-2010-11 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-2010-11. 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 the filing will also be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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 Number SR-NSX-2010-11 and 
should be submitted on or before October 1, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-22551 Filed 9-9-10; 8:45 am]
BILLING CODE 8010-01-P

