Exchanges, Finra seek to expand circuit breakers to include some ETNs

By Angela McDaniels

Tacoma, Wash., July 1 - The Securities and Exchange Commission is seeking public comment on proposals by securities exchanges and the Financial Industry Regulatory Authority, Inc. to expand the recently adopted circuit-breaker program to include some exchange-traded notes, some exchange-traded funds and all stocks in the Russell 1000 index.

The circuit-breaker program was approved earlier this month in response to the market disruption of May 6 and currently applies to stocks listed in the S&P 500 index, according to an SEC news release.

Trading in a security included in the program is paused for a five-minute period if the security experiences a 10% price change over the preceding five minutes. The SEC said this pause gives the markets an opportunity to attract new trading interest in an affected stock, establish a reasonable market price and resume trading in a fair and orderly fashion.

The affected ETNs would be:

• Barclays Bank plc's iPath Dow Jones - UBS Commodity Index Total Return ETNs;

• Barclays' iPath Dow Jones - UBS Copper Subindex Total Return ETNs;

• Barclays' iPath Dow Jones - UBS Grains Subindex Total Return ETNs;

• Barclays' iPath Dow Jones - UBS Natural Gas Subindex Total Return ETNs;

• Barclays' iPath Dow Jones - UBS Sugar Subindex Total Return ETNs;

• Barclays' iPath Goldman Sachs Crude Oil Total Return Index ETNs;

• Barclays' iPath GSCI Total Return Index ETNs;

• Barclays' iPath MSCI India Index ETNs;

• Barclays' iPath S&P 500 VIX Short-Term Futures ETNs;

• Barclays' iPath S&P 500 VIX Mid-Term Futures ETNs;

• Credit Suisse AG, Nassau Branch's Cushing 30 MLP Index ETNs;

• Deutsche Bank AG, London Branch's PowerShares DB Base Metals Long ETNs;

• Deutsche Bank's PowerShares DB Base Metals Short ETNs;

• Deutsche Bank's PowerShares DB Crude Oil Long ETNs;

• JPMorgan Chase & Co.'s Alerian MLP Index ETNs; and

• UBS AG, Jersey Branch's E-Tracs Alerian MLP Infrastructure ETNs.

The securities exchanges making the proposals are NYSE Arca, Inc., Nasdaq Stock Market LLC, Nasdaq OMX BX, Inc. and International Securities Exchange, LLC.

The New York Stock Exchange, LLC and NYSE Amex LLC are seeking to expand the program to include the Russell 1000 but not to include ETNs and ETFs.

The circuit-breaker program is in effect on a pilot basis through Dec. 10.

Once the proposals have been published in the Federal Register, the public will have 10 days to submit comments. Comments can be submitted at www.sec.gov/rules/sro.shtml or by e-mailing rule-comments@sec.gov.

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