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Monday, July 22, 2013

Equity Regulatory Alert #2013 - 9
Limit Up/Limit Down Plan Update

Markets Impacted:

Contact Information:

What you need to know:

  • The Limit Up/Limit Down NMS Plan implementation schedule for Phase 2 has changed and will be divided into two separate implementation stages.
  • All Tier 2 NMS stocks will begin to be implemented, as planned previously, starting on August 5th, 2013; however the LULD bands will not be effective for both Tier 1 and Tier 2 stocks the entire trading day as originally set out.
  • Starting August 5th, 2013, the LULD bands will begin at 9:30 a.m. E.T. and end at 3:45 p.m. ET each trading day, or fifteen minutes before the close in the case of an early scheduled close. The amended band times will apply to all the Tier 1 symbols and the Tier 2 symbols as they roll out.
  • Once the Tier 2 names are rolled out and this stage is complete, the LULD Plan Participants will extend the time of Plan operations to 4:00 p.m. ET each trading day, or earlier in the case of an early scheduled close. This is scheduled to be completed before December 8, 2013.

What is happening?

The NMS Participants have filed with the SEC for immediate effectiveness a Limit Up/Limit Down Plan Amendment to establish a revised implementation schedule for Phase 2. This Amendment was filed July 17th.

What is changing to the LULD Phase 2 implementation schedule?

The Plan previously had provided that six months after the initial date of Plan operations, the Plan shall fully apply (i) to all NMS Stocks and (ii) beginning at 9:30 a.m., Eastern Time (ET), and ending at 4:00 p.m., ET each trading day, or earlier in the case of an early scheduled close and be fully implemented eight months after the initial date of Plan operations.

This Amendment to the Plan now provides that Phase 2, scheduled to begin on August 5, 2013, will separate the bands effective times into stages. During the first stage of Phase II, the Plan will be rolled out to all NMS Stocks beginning at 9:30 a.m., E.T. and ending at 3:45 p.m., ET each trading day, or fifteen minutes before the close in the case of an early scheduled close. Therefore, on August 5th all the Tier 1 names will have bands in effect from 9:30 a.m. 2013 3:45 p.m. along with the Tier 2 symbols as they roll out. NASDAQ will announce their Tier 2 symbols rollout schedule in the coming days.

Once this stage is complete and all Tier 2 names are effective in the coming month with the adjusted band times ending at 3:45 p.m., the Participants will extend the time of Plan operations to include the remaining 15 minutes of regular trading or 4:00 p.m., ET. The entire time to fully implement the Plan though is scheduled to complete on or before December 8, 2013.

Will the industry be able test these time changes for Phase 2 before August 5th?

Yes. An industry wide test will be held on Saturday, July 27th. A separate announcement will be sent out shortly detailing the specifics of the July 27th test as well as the implementation schedule for Phase 2 with respect to symbol roll out.

Where can I find additional information?


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