January 16, 2019

Mr. Brent J. Fields
Secretary
U.S. Securities and Exchange Commission
100 F Street, NE
Washington, DC 20549-1090

Re: Eighteenth Amendment to the National Market System Plan to Address Extraordinary Market Volatility, File No. 4-631

Dear Mr. Fields,

The Securities Industry and Financial Markets Association (“SIFMA”) submits this letter to provide comments to the U.S. Securities and Exchange Commission (“Commission”) on its notice of the Eighteenth Amendment to the National Market System (“NMS”) Plan to address extraordinary market volatility (“Limit Up-Limit Down Plan”). We recommend the Commission adopt the proposal to: (1) transition the Limit Up-Limit Down Plan from operating as a pilot to a permanent basis; (2) eliminate the doubling of the percentage parameters between 9:30 a.m. and 9:45 a.m.; and (3) eliminate the doubling of the percentage parameters between 3:35 p.m. and 4:00 p.m. for Tier 2 NMS Stocks with a reference price above $3:00. After adopting the proposal, we recommend that the Commission review the Clearly Erroneous Execution (“CEE”) rules and their interaction with Limit Up-Limit Down. Under a separate cover, we have submitted comments on reforming the governance structures of NMS Plans.

Make Limit Up-Limit Down Permanent with a Mechanism for Periodic Review and Assessment

We recommend the Commission approve the proposal to operate the Limit Up-Limit Down Plan on a permanent basis with a mechanism for periodic review and assessment. The Limit Up-Limit Down Plan began as a pilot to address extreme volatilities in response to the Flash Crash in 2010 when the rapid sell-off of securities was exacerbated as computer trading programs rapidly sold large volumes at rapid pace to avoid losses. Over time, the plan has been effective in suspending trading before execution when a security experiences extraordinary price volatility.

Further, the Limit Up-Limit Down Plan has been effective during particularly volatile market conditions. As evidenced by the market events on August 24, 2015, the Limit Up-Limit Down Plan bands work to limit runaway stocks and panic selling or buying. Additionally, in February 2018, the Limit Up-Limit Down Plan operated as intended to reduce volatility by keeping prices within the bands. As a result, the Limit Up-Limit Down Plan falls within the Commission’s mission to protect investors and promote fair, orderly, and efficient markets, and the plan should be made permanent.

Eliminate the Doubling of Percentage Parameters

We recommend that the Commission approve the proposal to eliminate doubling of the percentage parameters to promote continuous trading and reduce the disruptions from tightening and expanding the bands at 9:45am and the last 25 minutes of trading for Tier 2 stocks above $3.00.5 Currently, the price bands for an NMS Stocks are doubled between 9:30 a.m. and 9:45 a.m., and 3:35 p.m. and 4:00 p.m., or in the case of an early close, during the last 25 minutes of trading. Doubling of Percentage Parameters results in Price Bands for Tier 1 and Tier 2 NMS Stocks priced above $3.00 of 10% and 20%, respectively.

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