
[Federal Register Volume 79, Number 102 (Wednesday, May 28, 2014)]
[Notices]
[Pages 30678-30680]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12229]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72215; File No. SR-NSX-2014-13]


Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Exchange Rule 11.1 to Shorten the Operating Hours for the 
Post-Regular Trading Hours Trading Session

May 21, 2014.
    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 May 16, 2014, National Stock Exchange, Inc. (``NSX'' or the 
``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 is proposing an amendment to Rule 11.1 (Hours of 
Trading) to shorten the length of the Exchange's post-Regular Trading 
Hours Trading session from 8:00 p.m. to 5:00 p.m. Eastern Time \3\ on 
days that the Exchange is open for business. The text of the proposed 
rule change is also available on the Exchange's Web site at 
www.nsx.com, at the principal office of the Exchange, and at the 
Commission's Public Reference Room.
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    \3\ All time references in this filing are to Eastern Time 
unless otherwise noted.
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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 aspects of such 
statements.

[[Page 30679]]

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 paragraph (a) of Rule 11.1 to 
shorten the length of time during which the Exchange's post-Regular 
Trading Hours \4\ trading session operates from 8:00 p.m. to 5:00 p.m. 
The Exchange submits that shortening the post-Regular Trading Hours 
trading session will allow the Exchange to utilize its staff and 
resources in a more efficient manner while continuing to provide 
Exchange Equity Trading Permit (``ETP'') Holders \5\ and their 
customers with a post-Regular Trading Hours session for one hour after 
the close of the Regular Trading Session.
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    \4\ Exchange Rule 1.5R.(1) defines ``Regular Trading Hours'' as 
the time between 9:30 a.m. and 4:00 p.m. Eastern Time.
    \5\ Exchange Rule 1.5E.(1) defines an ``ETP'' as an Equity 
Trading Permit issued by the Exchange for effecting approved 
securities transactions on the Exchange's trading facilities. An ETP 
may be issued to a sole proprietor, partnership, corporation, 
limited liability company or other organization which is a 
registered broker or dealer pursuant to Section 15 of the Act, and 
which has been approved by the Exchange.
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    The Exchange believes that reducing the operating time of the 
after-hours trading session to 5:00 p.m. is justified in view of the 
trading volume in the one hour immediately after the close of Regular 
Trading Hours as compared with the trading volume through the end of 
the after-hours trading session at 8:00 p.m. For calendar year 2013, 
NSX executed a total of 10,445,976 shares between 4:00 p.m. and 5:00 
p.m., resulting in an average daily volume of 41,452 shares. By 
comparison, during the same period, between the hours of 5:00 p.m. and 
8:00 p.m., NSX executed a total of 1,562,650 shares, or an average 
daily volume of 6,200 shares. These volume levels support the 
Exchange's conclusion that most ETP Holder trading activity in the 
post-Regular Trading Hours trading session occurs in the first hour, by 
5:00 p.m. and that the volume level in the following three hours of the 
post-Regular Trading Hours trading session does not sufficiently 
balance against the resources and personnel that the Exchange dedicates 
to support the operation of the after-hours trading session beyond 5:00 
p.m.
    The Exchange notes that other national securities exchanges offer a 
longer trading session after the close of Regular Trading Hours and ETP 
Holders can choose to direct their orders to those exchanges if they 
wish to participate in an after-hours trading session extending beyond 
5:00 p.m.\6\ Thus, the Exchange believes that its proposal will 
adequately address the needs of ETP Holders by providing for a one-hour 
post-Regular Trading Hours trading session, which trade data show is 
the period in which most of the trading activity is occurring, and will 
allow the Exchange to conserve resources and staff time that would 
otherwise be dedicated to supporting the after-hours trading session 
for a four hour period on every trading day. The Exchange believes 
that, given these considerations, the proposal to shorten the time 
period during which the post-Regular Trading Hours trading session 
operates is reasonable and appropriate.
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    \6\ See, e.g., NYSE Arca Equities, Inc. Rule 7.34(a)(3), which 
provides for a ``Late Trading Session'' from 1:15 p.m. Pacific Time 
(4:15 p.m. Eastern Time) to 5:00 p.m. Pacific Time (8:00 p.m. 
Eastern Time); EDGA Exchange, Inc. Rule 1.5(c), which provides for a 
Post-Closing Session between 4:00 p.m. and 8 p.m.
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2. Statutory Basis
    The Exchange submits that the proposed amendment to Rule 11.1(a) 
furthers the purposes of Section 6(b) of the Act and, in particular, 
Section 6(b)(5) thereunder in that it is intended to promote just and 
equitable principles of trade and, in general, protect investors and 
the public interest; furthermore, the proposed amendment is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
    Specifically, the Exchange's proposal to amend Rule 11.1(a) to 
shorten the length of its post-Regular Trading Hours trading session 
from 8:00 p.m. to 5:00 p.m. on every day on which the Exchange is open 
for business will allow the Exchange to focus its staff and resources 
on the Exchange's core business, which is providing an efficient and 
cost-effective marketplace for trading in equity securities during 
Regular Trading Hours, while maintaining a facility for ETP Holders to 
execute trades after 4:00 p.m. Reducing the time during which the post-
Regular Trading Hours trading session operates will allow the Exchange 
to maximize efficiencies and eliminate costs that are attendant to the 
longer after-hours session, but do not yield a sufficient economic 
return. The Exchange submits that the proposed amendment is therefore 
consistent with Section 6(b)(5) of the Act in that, by seeking to 
operate in a more efficient manner that focuses on trading during 
Regular Trading Hours, it will operate to promote just and equitable 
principles of trade and in general protect investors and the public 
interest.
    The Exchange further submits that the proposed rule amendment will 
not permit unfair discrimination between customers, issuers, brokers, 
or dealers because the proposed change will affect all ETP Holders and 
market participants in the same way and to the same extent, and is 
therefore consistent with Section 6(b)(5) of the Act.

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 
for the furtherance of the Act. By shortening the time period during 
which its post-Regular Trading Hours trading session operates, the 
Exchange is reducing the number of equity securities exchanges offering 
a late trading session extending from after the close of Regular 
Trading Hours until 8:00 p.m. However, the Exchange does not believe 
that this will inappropriately burden competition in that, as proposed, 
it will continue to offer a post-Regular Trading Hours trading session 
until 5:00 p.m. and other exchanges offer an after-hours session 
extending until 8:00 p.m. The Exchange therefore believes that the 
availability of an after-hours trading facility at other exchanges will 
provide ETP Holders with venues to which they can direct their post-
Regular Trading Hours activity after the Exchange's proposed 5:00 p.m. 
end time and the reduction in the time frame during which the 
Exchange's after-hours facility operates will not impair competition.
    Additionally, the Exchange believes that, by reducing the operating 
time of its post-4:00 p.m. trading session and focusing its staff and 
resources on the Exchange's operations during core trading hours and a 
shortened after-hours trading session, it will achieve efficiencies 
that will operate to enhance its competitive position and therefore its 
proposal imposes no inappropriate or unnecessary burden on competition.

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

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any written comments from ETP Holders or other interested parties.

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

    Because the proposed rule change does not: (i) Significantly affect 
the

[[Page 30680]]

protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 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 \7\ and Rule 19b-
4(f)(6)(iii) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing.\9\ 
However, pursuant to Rule 19b-4(f)(6)(iii),\10\ 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 doing so will 
allow the Exchange to immediately implement the proposed change to the 
post-Regular Trading Hours trading session, which will better align the 
expenses of operating the post-Regular Trading Hours trading session 
with the volume and revenue associated with that trading session. 
According to the Exchange, the proposal will streamline the operation 
of the Exchange and allow for more effective utilization of Exchange 
resources. Accordingly, the Commission designates the proposed rule 
change as operative upon filing with the Commission.\11\
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    \9\ 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 the 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 pre-filing requirement.
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For purposes only of waiving the operative delay for this 
proposal, 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

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 rule-comments@sec.gov. Please include 
File Number SR-NSX-2014-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NSX-2014-13. 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 offices 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 Number SR-NSX-2014-13, 
and should be submitted on or before June 18, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-12229 Filed 5-27-14; 8:45 am]
BILLING CODE 8011-01-P


