TRADING PERMIT INFORMATION FOR 11/17/2011 THROUGH

Transcription

1 Exchange November 25, 2011 Volume 39, Number 47 Bulletin The Bylaws and Rules of Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to Exchange Trading Permit Holders. To satisfy this requirement, a copy of the Exchange Bulletin, including the Regulatory Bulletin, is delivered by or by hard copy free of charge to all effective Trading Permit Holders on a weekly basis. Trading Permit Holders are encouraged to receive the Exchange and Regulatory Bulletin and Information Circulars via . subscriptions may be obtained by Trading Permit Holders by submitting your name, firm if applicable, address, and phone number, to registration@cboe.com. If you do sign up for delivery, please remember to inform the Registration Services Department of address changes. Subscriptions by Trading Permit Holders for hard copy delivery may be obtained by submitting your name, firm if any, mailing address and telephone number to: Chicago Board Options Exchange, Registration Services Department, 400 South LaSalle, Chicago, Illinois 60605, Attention: Bulletin Subscriptions. Copyright 2011 Chicago Board Options Exchange, Incorporated TRADING PERMIT INFORMATION FOR 11/17/2011 THROUGH 11/23/2011 TRADING PERMIT APPLICATIONS RECEIVED FOR WHICH BULLETIN PUBLICATION IS REQUIRED Individual Applicants Bradley Kurtzman Citigroup Global Markets Inc. 105 Meyersville Rd. Chatham, NJ TERMINATION Individual Nominee: Termination Date Kevin A. Flaherty (KVF) 11/21/11 Nico Securities, LLC

2 Page 2 November 25, 2011 Volume 39, Number 47 Chicago Board Options Exchange RESEARCH CIRCULARS The following Research Circulars were distributed between November 18 and November 25, If you wish to read the entire document, please refer to the CBOE website at and click on the Trading Tools Tab. New listings and series information is also available in the Trading Tools section of the website. For questions regarding information discussed in a Research Circular, please call The Options Clearing Corporation at OPTIONS. Research Circular #RS November 18, 2011 Metropolitan Health Networks, Inc. ("MDF & adj. MDF1") To Move To and Begin Trading on the NYSE Effective Date: November 21, 2011 Research Circular #RS November 21, 2011 National Bank of Greece S.A. ( NBG ) 1-for-5 Reverse ADS Split Ex-Distribution Date: November 28, 2011 Research Circular #RS November 21, 2011 HollyFrontier Corporation ( HFC & adj. HFC1 ) CONTRACT ADJUSTMENT FOR SPECIAL CASH DIVIDEND Ex-Date: November 25, 2011 Research Circular #RS November 21, 2011 Constellation Energy Group, Inc. ( CEG ) Proposed Merger with Exelon Corporation ( EXC ) Research Circular #RS November 21, 2011 BigBand Networks, Inc. ( BBND ): Merger Completed -- Cash Settlement Research Circular #C2-RS November 22, 2011 Poniard Pharmaceuticals, Inc. ( PARD ) 1-for-40 Reverse Stock Split Ex-Distribution Date: November 23, 2011 Research Circular #RS November 23, 2011 RLI Corp. ( RLI ) CONTRACT ADJUSTMENT FOR SPECIAL CASH DIVIDEND Ex-Date: November 28, 2011 Research Circular #RS November 25, 2011 PMI Group, Inc. ( PMI ) Move and Begin Trading on the Other-OTC Market and Underlying Symbol Change to ( PPMIQ ) Effective Date: November 25, 2011

3 November 25, 2011 Volume RB22, Number 47 The Bylaws and Rules of Chicago Board Options Exchange, Incorporated ( Exchange ), in certain specific instances, require the Exchange to provide notice to Trading Permit Holders. The weekly Regulatory Bulletin is delivered to all effective Trading Permit Holders to satisfy this requirement. Copyright 2011 Chicago Board Options Exchange, Incorporated. REGULATORY CIRCULARS Regulatory Circular RG To: From: Trading Permit Holders Legal & Regulatory Services Divisions Date: November 18, 2011 RE: Prefix Usage for SPX Combination ( Combo ) Orders The purpose of this Regulatory Circular is to remind SPX traders that for all SPX Combo Orders that are transacted, SPX traders are required to designate each of the component series of the order as "CMBO" on all electronic execution systems, such as PAR Terminals, when submitting the trade to the Exchange for price reporting. 1 On PAR Terminals this is accomplished by selecting the CMBO ENDORSED tab on the PAR Terminal. 1. When an SPX Combo Order is transacted, the prices of the component series must be reported to the trading floor and to OPRA using the prefix CMBO. The CMBO prefix acts as notice to the public that the reported prices are part of an SPX Combo Order and helps avoid investor confusion regarding out-of-range SPX prices. 2. As required by Rule 24.20, a Trading Permit Holder must be holding an SPX Combo Order when it is originally quoted. Orders must also be systematized in accordance with Rule 6.24 (the COATS rule). The Regulatory Services Division will monitor trading activity for compliance with Rule Among other things, executions not meeting the Rule requirements may be considered violations of the SPX limit book and/or displayed market priority. For additional information, please refer to Rule and Regulatory Circular RG An SPX Combo Order is defined in Rule as an order to purchase or sell SPX options and the offsetting number of SPX combinations defined by the delta. (An SPX combination is a long (short) SPX call and a short (long) SPX put having the same expiration date and strike price). The delta is defined as the positive (negative) number of SPX combinations that must be sold (bought) to establish a market neutral hedge with an SPX option position. See Regulatory Circular RG07-06 for an explanation of Rule November 25, 2011 Volume RG22, Number 47 1

4 Questions regarding the PAR Combo Endorsed feature may be referred to Jeff Short at or Monica Wiedlin-Torres at Questions concerning this circular may be directed to the Regulatory Interpretations and Guidance Line at Regulatory Circular RG DATE: November 18, 2011 TO: Trading Permit Holders FROM: Trading Operations RE: Operational Systems Settings Effective November 21, 2011, CBOE will adjust two operational systems settings in all classes as follows: Market orders entered when the NBBO at time of receipt is not within an acceptable price range will route to PAR, or at the entry firm s discretion, to the entry firm s booth. The acceptable price range will be based on the table below: Bid Price Acceptable Price Range > = Additionally, series will not open if the opening price is not within an acceptable price range. The calculation for the acceptable price range will be the midpoint of the highest quote bid and lowest quote offer plus/minus half of the Opening Exchange Prescribed Width (OEPW), and where HALO is active, the NBBO if any, whichever is better. The OEPW will be based on the table below: Bid Price Opening Exchange Prescribed Width > = Questions regarding this circular may be directed to: Doreen Scholla , schollad@cboe.com; or CBOE Help Desk at (866) or helpdesk@cboe.com November 25, 2011 Volume RG22, Number 47 2

5 Regulatory Circular RG To: Floor Brokers From: Regulatory Services Division Date: November 21, 2011 Re: Communication with Solicited Parties Floor-Brokers should take steps to prevent miscommunication with a solicited party; either verbally or through IM s and/or chats, to ensure the solicited party has a clear understanding of the status of an order. Ambiguous language may give the solicited party the perception that an order has been disclosed to the trading crowd, when in fact it has not. Examples of ambiguous language include: Going to trade now Can get you (x) total contracts You ll be on the order, going to trade soon Such language may mislead the solicited party, and unintentionally result in their pre-facilitating and/or front-running of the order, leading to violations of, but not necessarily limited to, Exchange Rules 4.1 and/or 6.9(e). 1 Floor-Brokers are advised to use clear language so that the solicited party understands the current status of an unexecuted order brought to the trading floor. Examples of clear communications prior to or following execution of an order are: The order has not reached the trading crowd yet, I will inform you when the order is in the trading crowd. The order is in the trading crowd. The order has been disclosed to the crowd. You have been filled on (x) total contracts. Questions regarding the topics in this circular may be directed to the Regulatory Interpretations and Guidance Line at (312) See Regulatory Circular November 25, 2011 Volume RG22, Number 47 3

6 Regulatory Circular RG To: Trading Permit Holders From: Trading Operations Date: November 23, 2011 Re: Establishing New Series in FLEX Options This circular is being issued to advise Trading Permit Holders that the FLEX Option trading rules have recently been amended to provide that a new FLEX Options series may be established on any business day prior to its expiration date, with a maximum term of 15 years. (Previously, the rules provided that a new FLEX Equity Option series could be established any business day prior to its expiration date. However, the rules previously did not clearly address the applicability of any such new series add provision to other types of FLEX Options. The rule change makes it clear that the same new series add provision applies to all FLEX Options.) For information on the new series add provision as well as other FLEX term and trading requirements, please refer to Rule 24B.4, Chapter XXIVB of the Rules, and Rule Filing SR- CBOE , which are available at Further questions may be directed to Wally Young at or youngw@cboe.com. Regulatory Circular RG To: Trading Permit Holders From: Finance and Administration Date: November 23, 2011 Re: Floor Broker Workstation (FBW) Market Access Controls Window The Chicago Board Options Exchange, Inc. (CBOE) has added to the functionality of the Floor Broker Workstations (FBW) by providing a new Market Access Controls Window, an optional feature of FBW available to each CBOE Trading Permit Holder that requests the feature. The Market Access Controls Window displays, for each grouping of FBW users within a CBOE Trading Permit Holder firm, values for the following access-based controls: Per Order Controls, which include values for (a) quantity of contracts per order, (b) premium amount per order, (c) number of identical orders, and (d) frequency of order entry (count and timeframe). Aggregate Controls, which include actual and predictive values for (1) premium amount per day, (2) quantity of contracts per day, and (3) the number of orders with a status of working. The FBW Market Access Controls Window fee is $100 per month per login ID, with a cap of $2,000 per month for any Trading Permit Holder. Therefore, any Trading Permit Holder that requests access to the FBW Market Access Controls Window for more than twenty login IDs will not be required to pay more than $2,000 per month for such access. The monthly fee will be effective December 1, November 25, 2011 Volume RG22, Number 47 4

7 The complete CBOE Fees Schedule is posted at: Transaction fee questions may be directed to Don Patton at (312) or Colleen Laughlin at or or John Mavindidze at (312) or Regulatory Circular RG To: Trading Permit Holders From: Finance and Administration Date: November 23, 2011 Re: FLEX Options-Customer Transaction Fees to Apply to Non-Trading Permit Holder Broker-Dealer Orders Subject to SEC review, effective immediately, the Exchange is amending its Fees Schedule as it relates to Flexible Exchange Options (FLEX options) to provide that FLEX transactions for the account of non-trading Permit Holder broker-dealers (which use the customer or C origin code) are subject to the same transaction fee rates that are applicable to public customers (which also use the C origin code). The complete CBOE Fees Schedule is posted at: Transaction fee questions may be directed to Don Patton at (312) or patton@cboe.com, Colleen Laughlin at or Laughlin@cboe.com, or John Mavindidze at (312) or mavindidze@cboe.com. November 25, 2011 Volume RG22, Number 47 5

8 R U L E C H A N G E S APPROVED RULE CHANGE(S) The Securities and Exchange Commission ( SEC ) has approved the following change(s) to Exchange rules pursuant to Section 19(b) of the Securities Exchange Act of 1934 (the Act ). Below, any additions to rule text are underlined and any deletions are [bracketed]. Copies are available on the CBOE public website at The effective date of the rule change is the date of approval unless otherwise noted. SR-CBOE Short Term Options Series On November 17, 2011, the SEC approved Rule Change File No. SR-CBOE , which filing amends Rules 5.5 and 24.9 to increase the number of Short Term Options Series that may be opened for each option class that participates in the Exchange s Short Term Option Series Program ( Weeklys Program ). Previously, a total of 20 series may be opened for trading in each class that participates in the Weeklys Program. The rule change increased this to 30 series per class with 20 initial series being permitted and 10 additional series being permitted if market conditions warrant. Any questions regarding the rule change may be directed to Jenny Klebes, Legal Division, at The rule text is shown below and the rule filing is available at Rule 5.5 Series of Option Contracts Open for Trading RULE 5.5. (a) - (c) No change. (d) Short Term Option Series Program. After an option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day ( Short Term Option Opening Date ) series of options on that class that expire on the Friday of the following business week that is a business day ( Short Term Option Expiration Date ). If the Exchange is not open for business on the respective Thursday or Friday, the Short Term Option Opening Date will be the first business day immediately prior to that respective Thursday or Friday. Similarly, if the Exchange is not open for business on the Friday of the following business week, the Short Term Option Expiration Date will be the first business day immediately prior to that Friday. Regarding Short Term Option Series: (1) Classes. The Exchange may select up to fifteen currently listed option classes on which Short Term Option Series may be opened on any Short Term Option Opening Date. In addition to the fifteen-option class restriction, the Exchange also may list Short Term Option Series on any option classes that are selected by other securities exchanges that employ a similar program under their respective rules. For each option class eligible for participation in the Short Term Option Series Program, the Exchange may open up to [twenty] 30 Short Term Option Series for each expiration date in that class. (2) Expiration. No Short Term Option Series may expire in the same week in which monthly option series on the same class expire or, in the case of Quarterly Options Series, on an expiration that coincides with an expiration of Quarterly Option Series on the same class. (3) Initial Series. The Exchange may open up to 20 initial series for each option class that participates in the Short Term Option Series Program. The strike price of each Short Term Option Series will be fixed at a price per share, with approximately the same number of strike prices being opened above and below the value of the underlying security at about the time that the Short Term Option Series are initially opened for trading on the Exchange (e.g., November 25, 2011 Volume RG22, Number 47 6

9 if seven series are initially opened, there will be at least three strike prices above and three strike prices below the value of the underlying security). Any strike prices listed by the Exchange shall be within thirty percent (30%) above or below the closing price of the underlying security from the preceding day. (4) Additional Series. [If the Exchange opens less than twenty Short Term Option Series for a Short Term Option Expiration Date, additional series may be opened for trading on the Exchange] The Exchange may open up to 10 additional series for each option class that participates in the Short Term Option Series Program when the Exchange deems it necessary to maintain an orderly market, to meet customer demand or when the market price of the underlying security moves substantially from the exercise price or prices of the series already opened. Any additional strike prices listed by the Exchange shall be within thirty percent (30%) above or below the current price of the underlying security. The Exchange may also open additional strike prices of Short Term Option Series that are more than 30% above or below the current price of the underlying security provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate or individual customers or their brokers. Market-Makers trading for their own account shall not be considered when determining customer interest under this provision. The opening of the new Short Term Option Series shall not affect the series of options of the same class previously opened. (5) Strike Interval. The interval between strike prices on Short Term Option Series shall be the same as the strike prices for series in that same option class that expire in accordance with the normal monthly expiration cycle. (e) No change.... Interpretations and Policies: No change. Rule 24.9 Terms of Index Option Contracts RULE (a) General. (1) Exercise Prices. No change. (2) Expiration Months. No change. (A) Short Term Option Series Program. Notwithstanding the preceding restriction, after an index option class has been approved for listing and trading on the Exchange, the Exchange may open for trading on any Thursday or Friday that is a business day ( Short Term Option Opening Date ) series of options on that class that expire on the Friday of the following business week that is a business day ( Short Term Option Expiration Date ). If the Exchange is not open for business on the respective Thursday or Friday, the Short Term Option Opening Date will be the first business day immediately prior to that respective Thursday or Friday. Similarly, if the Exchange is not open for business on the Friday of the following business week, the Short Term Option Expiration Date will be the first business day immediately prior to that Friday. Regarding Short Term Option Series: (i) Classes. The Exchange may select up to fifteen currently listed option classes on which Short Term Option Series may be opened on any Short Term Option Opening Date. In addition to the fifteen-option class restriction, the Exchange also may list Short Term Option Series on any option classes that are selected by other securities exchanges that employ a similar program under their respective rules. For each index option class eligible for participation in the Short Term Option Series Program, the November 25, 2011 Volume RG22, Number 47 7

10 Exchange may open up to [twenty] 30 Short Term Option Series on index options for each expiration date in that class. (ii) Expiration. No Short Term Option Series on an index option class may expire in the same week during which any monthly option series on the same index class expire or, in the case of Quarterly Options Series or QIXs, on an expiration that coincides with an expiration of Quarterly Option Series or QIXs on the same index class. (iii) Initial Series. The Exchange may open up to 20 initial series for each option class that participates in the Short Term Options Series Program. The strike price of each Short Term Option Series will be fixed at a price per share, with approximately the same number of strike prices being opened above and below the calculated value of the underlying index at about the time that the Short Term Option Series are initially opened for trading on the Exchange ( e.g., if seven series are initially opened, there will be at least three strike prices above and three strike prices below the value of the underlying security or calculated index value). Any strike prices listed by the Exchange shall be within thirty percent (30%) above or below the current value of the underlying index. (iv) Additional Series. [If the Exchange has opened less than twenty Short Term Option Series for a Short Term Option Expiration Date, additional series may be opened for trading on the Exchange] The Exchange may open up to 10 additional series for each open class that participates in the Short Term Option Series Program when the Exchange deems it necessary to maintain an orderly market, to meet customer demand or when the current value of the underlying index moves substantially from the exercise price or prices of the series already opened. Any additional strike prices listed by the Exchange shall be within thirty percent (30%) above or below the current value of the underlying index. The Exchange may also open additional strike prices of Short Term Option Series that are more than 30% above or below the current value of the underlying index provided that demonstrated customer interest exists for such series, as expressed by institutional, corporate or individual customers or their brokers. Market- Makers trading for their own account shall not be considered when determining customer interest under this provision. The opening of the new Short Term Option Series shall not affect the series of options of the same class previously opened. (v) Strike Interval. The interval between strike prices on Short Term Option Series shall be the same. (B) No change. (3) (5) No change. (b) (e) No change. Interpretations and Policies: No change. EFFECTIVE-ON-FILING RULE CHANGE(S) The following rule filing(s) was submitted to the SEC effective on filing, and may have taken effect pursuant to Section 19(b)(3) of the Act. The rule filing(s) will remain in effect barring further action by the SEC within 60 days after publication in the Federal Register. Below, any additions to rule text November 25, 2011 Volume RG22, Number 47 8

11 are underlined and any deletions are [bracketed]. Copies are available on the CBOE public website at SR-CBOE Market-Maker Obligations On November 18, 2011, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to provide that Market-Makers will not be obligated to maintain continuous quotes in adjusted option series and to define the term adjusted option series. Adjusted option series are option series for which, as a result of a corporate action by the issuer of the security underlying the option series, one option contract in the series represents delivery of other than 100 shares of the underlying security. Any questions regarding the rule change may be directed to Laura Dickman, Legal Division, at The rule text is shown below and the rule filing is available at Definitions RULE 1.1. No changes. (a) (kkk) No changes. Adjusted Option Series (lll) The term adjusted option series means an option series wherein, as a result of a corporate action by the issuer of the underlying security, one option contract in the series represents the delivery of other than 100 shares of underlying stock or Units. Interpretations and Policies: No changes. Rule 8.7 Obligations of Market-Makers RULE 8.7. (a) (c) No changes. (d) No changes. (i) No changes. (A) (C) No changes. (ii) No changes. (A) No changes. (B) Continuous Electronic Quoting Obligation: A Market-Maker will be required to maintain continuous electronic quotes (as defined in Rule 1.1(ccc)) in 60% of the non-adjusted option series of the Market-Maker s appointed class that have a time to expiration of less than nine months. The initial size of a Market-Maker s quote must be for the minimum number of contracts determined by the Exchange on a class by class basis, which minimum shall be at least one contract. (C) No changes. (iii) The obligations and duties of Market-Makers set forth in paragraphs (d)(i) and (d)(ii) apply to a Market-Maker on a per class basis and only when the Market-Maker is quoting in a particular class on a given trading day (e.g., if on a given trading day a Market-Maker is quoting in 1 of his/her 10 appointed classes, the Market-Maker has quote width, continuous electronic quoting and, to the extent the Market-Maker is present in the trading crowd, continuous open outcry quoting obligations in that class; the continuous electronic quoting obligation in subparagraph (d)(ii)(b) applies to 60% of the non-adjusted option series of that class that have a time to expiration of less than nine months while the Market-Maker is quoting). The obligations and duties are not applicable to an appointed class if a Market-Maker is not quoting in that appointed class. (iv) No changes. November 25, 2011 Volume RG22, Number 47 9

12 Interpretations and Policies: No changes. Rule 8.13 Preferred Market-Maker Program RULE (a) (c) No changes. (d) Quoting Obligations: The Preferred Market-Maker must comply with the quoting obligations applicable to its Market-Maker type under Exchange rules and must provide continuous electronic quotes (as defined in Rule 1.1(ccc)) in at least 90% of the non-adjusted option series of each class for which it receives Preferred Market-Maker orders. Interpretations and Policies:.01 No changes. Rule 8.15A Lead Market-Makers in Hybrid Classes RULE 8.15A. (a) No changes. (b) LMM Obligations. LMMs are required to: (i) provide continuous electronic quotes (as defined in Rule 1.1(ccc)) that comply with the bid/ask differential requirements determined by the Exchange on a class by class basis in 90% of the non-adjusted option series within their assigned classes. In option classes in which both an On-Floor LMM and an Off-Floor DPM have been appointed, the On-Floor LMM shall not be obligated to comply with this paragraph (b)(i) and instead shall be obligated to comply with the obligations of Market-Makers in Hybrid classes in Rule 8.7(d); (ii) (vii) No changes. Interpretations and Policies:.01 No changes. Rule 8.85 DPM Obligations RULE (a) Dealer Transactions. Each DPM shall fulfill all of the obligations of a Market- Maker under the Rules, and shall satisfy each of the following requirements in respect of each of the securities allocated to the DPM. To the extent that there is any inconsistency between the specific obligations of a DPM set forth in subparagraphs (a)(i) through (a)(xii) of this Rule and the general obligations of a Market Maker under the Rules, subparagraphs (a)(i) through (a)(xii) of this Rule shall govern. Each DPM shall: (i) provide continuous electronic quotes (as defined in Rule 1.1(ccc)) in at least 90% of the non-adjusted option series of each multiply-listed option class allocated to it and in 100% of the non-adjusted option series of each singly-listed option class allocated to it, and assure that its disseminated market quotations are accurate; (ii) (xii) No changes. (b) (e) No changes. Interpretations and Policies: No changes. Rule 8.93 e-dpm Obligations RULE Each e-dpm shall fulfill all of the obligations of a Market-Maker and of a DPM under the Rules (except those contained in Rules 8.85(a)(i), (iv), (v), (vii)-(x), and (xii), 8.85(c)(i) and (v), and 8.85(e)), and shall satisfy each of the following requirements: November 25, 2011 Volume RG22, Number 47 10

13 (i) provide continuous electronic quotes (as defined in Rule 1.1(ccc)) in at least 90% of the nonadjusted option series of each allocated class, or alternatively, respond to 98% of Requests for Quotes (RFQs) if RFQ functionality is enabled as determined by the Exchange; (ii) (xi) No changes. SR-CBOE Individual Stock Trading Pause Pilot On November 22, 2011, the Exchange filed Rule Change File No. SR-CBOE , which filing proposes to amend the CBSX individual stock trading pause pilot to exclude all rights and warrants from the pilot and to make a confirming amendment to CBOE s options trading halt procedures. Any questions regarding the rule change may be directed to Jennifer Lamie, Legal Division, at The rule text is shown below and the rule filing is available at Rule Trading Halts... Interpretations and Policies:.06 If a primary listing market issues an individual stock trading pause in an underlying eligible NMS stock, as defined in this Rule, the Exchange will halt trading in options on that stock until trading has resumed on the primary listing market for the stock, which generally will occur after a period of five minutes. If, however, trading has not resumed on the primary listing market for the stock after ten minutes have passed since the individual stock trading pause message has been received from the responsible single plan processor, the Exchange may resume trading in the options if at least one market has resumed trading in the stock. (a) Upon receipt of a trading pause message from the single plan processor responsible for consolidation of information for the stock, the Exchange will automatically implement a trading halt in the overlying options traded on the Exchange. (b) During the halt, the Exchange will maintain existing orders in the Book, accept orders, and process cancels. (c) Upon reopening, a rotation shall be held in the options in accordance with Rule 6.2B, unless the Exchange concludes that a different method of reopening is appropriate under the circumstances, including but not limited to, no rotation, an abbreviated rotation or any other variation in the manner of the rotation. (d) Nothing in this Rule shall be construed to limit the ability of the Exchange to halt or suspend trading in any security or securities traded on the Exchange pursuant to any other Exchange rule or policy. (e) The provisions of this Rule shall be in effect for options on eligible NMS stocks. The term eligible NMS stocks shall mean NMS stocks, other than rights and warrants. Rule 6.3C - Individual Stock Trading Pause Due to Extraordinary Market Volatility RULE 6.3C. If a primary listing market issues an individual stock trading pause in an eligible NMS stock, as defined in Interpretation and Policy.03 of this Rule, the Exchange will halt trading in that stock until trading has resumed on the primary listing market, which generally will occur after a period of five minutes. If, however, trading has not resumed on the primary listing market after ten minutes have passed since the individual stock trading pause message has been received from the responsible single plan processor, the Exchange may resume trading in such stock.... Interpretations and Policies: November 25, 2011 Volume RG22, Number 47 11

14 .01 Upon reopening, a rotation shall be held in the individual stock unless the Exchange concludes that a different method of reopening is appropriate under the circumstances, including but not limited to, no rotation, an abbreviated rotation or any other variation in the manner of the rotation..02 Nothing in this Rule shall be construed to limit the ability of the Exchange to halt or suspend trading in any security or securities traded on the Exchange pursuant to any other Exchange rule or policy..03 The provisions of this Rule shall be in effect for eligible NMS stocks during a pilot period ending January 31, The term eligible NMS stocks shall mean NMS stocks, other than rights and warrants. Trading in an eligible NMS stock will pause between the hours of 8:45 a.m. and 2:35 p.m. (all times are CT), or in the case of an early scheduled close, 25 minutes before the close of trading, if the price of the stock moved by a percentage specified below within a five-minute period ( Threshold Move ), as calculated by the primary listing market as follows: (a) the Threshold Move shall be 10% or more with respect to stocks included in the S&P 500 Index, Russell 1000 Index, and a pilot list of Exchange Traded Products; (b) the Threshold Move shall be 30% or more with respect to all NMS stocks not subject to paragraph (a) above with a price equal to or greater than $1; and (c) the Threshold Move shall be 50% or more with respect to all NMS stocks not subject to paragraph (a) above with a price less than $1. The determination that the price of a stock is equal to or greater than $1 under paragraph (b) above or less than $1 under paragraph (c) above shall be based on the closing price on the previous trading day or, if no closing price exists, the last sale reported to the Consolidated Tape on the previous trading day. November 25, 2011 Volume RG22, Number 47 12