Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change and Amendment No. 1 Thereto Relating to Amending Rule 123D (Openings and Halts in Trading) and Rule 15 To Shorten the Minimum Required Time Periods Between Tape Indications and Openings or Reopenings, 58645-58646 [E6-16367]
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Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Notices
offering) market and PIPE (private
investment in public equity) offerings.
The Commission expects that the
Forum will develop recommendations
for government and private action to
facilitate small business capital
formation. The afternoon sessions of the
Forum, which will not be Webcast, will
be devoted to breakout sessions to
develop recommendations.
More information about the Forum is
available at www.sec.gov/info/smallbus/
sbforum.shtml.
Written statements should be
received on or before October 15, 2006.
DATES:
Written statements may be
submitted by any of the following
methods:
ADDRESSES:
Electronic Statements
• Use the Commission’s Internet
submission form (https://www.sec.gov/
info/smallbus/sbforum.shtml); or
• Send an e-mail message to rulecomments@sec.gov. Please include File
Number 4–526 on the subject line; or
Paper Statements
• Send paper statements in triplicate
to Nancy M. Morris, Secretary, U.S.
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
No. 4–526. This file number should be
included on the subject line if e-mail is
used. To help us process and review
your statement more efficiently, please
use only one method. The Commission
staff will post all statements submitted
on the Forum Web page at https://
www.sec.gov./info/smallbus/
sbforum.shtml. Statements also will be
available for public inspection and
copying in the Commission’s Public
Reference Room, 100 F Street, NE.,
Room 1580, Washington, DC 20549. All
statements received will be posted
without change; we do not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly.
FOR FURTHER INFORMATION CONTACT:
rwilkins on PROD1PC63 with NOTICES
Anthony G. Barone, Special Counsel, at
(202) 551–3260, at Office of Small
Business Policy, Division of Corporation
Finance, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–3628.
Dated: September 26, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6–16331 Filed 10–3–06; 8:45 am]
BILLING CODE 8010–01–P
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54530; File No. SR–NYSE–
2006–49]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving Proposed Rule Change and
Amendment No. 1 Thereto Relating to
Amending Rule 123D (Openings and
Halts in Trading) and Rule 15 To
Shorten the Minimum Required Time
Periods Between Tape Indications and
Openings or Reopenings
September 28, 2006.
On June 30, 2006, the New York Stock
Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to amend NYSE Rules 123D and
15 to shorten the minimum time periods
between tape indications and openings
or reopenings of a security and after an
‘‘Equipment Changeover.’’ 3 On August
14, 2006, the Exchange submitted
Amendment No. 1 to the proposed rule
change.4 The proposed rule change, as
amended, was published for comment
in the Federal Register on August 28,
2006.5 The Commission received no
comments regarding the proposal. This
order approves the proposed rule
change, as amended.
The Exchange proposes to amend
NYSE Rules 123D and 15 to shorten the
minimum time periods between tape
indications and openings or reopenings
of a security and after an ‘‘Equipment
Changeover.’’ In connection with a
delayed opening of trading in a security,
Exchange Rule 123D currently requires
a minimum of ten minutes to elapse
between the first price indication and
the opening of the stock, and where
there is more than one indication, a
minimum of five minutes to elapse after
the last indication, provided in all cases
that at least ten minutes have elapsed
since the first indication. The
Exchange’s proposal would reduce these
minimum time periods from ten to three
minutes after the first indication, and to
one minute after the last indication,
provided that a minimum of three
minutes have elapsed since the first
indication.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Exchange Rule 123D(2).
4 In Amendment No. 1, NYSE made minor
revisions to the proposed rule text and clarified that
all market participants may react to published price
indications.
5 See Securities Exchange Act Release No. 54337
(August 21, 2006), 71 FR 50963 (‘‘Notice’’).
2 17
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58645
With respect to the reopening of
trading after a stock has been halted
during the trading day, Exchange Rule
123D currently requires a minimum of
five minutes to elapse between the first
indication and the reopening of trading,
and a minimum of three minutes to
elapse after the last indication, provided
that at least five minutes has elapsed
since the first indication. The
Exchange’s proposal would reduce these
minimum time periods to three minutes
after the first indication, and to one
minute after the last indication,
provided that a minimum of three
minutes has elapsed since the first
indication.
With respect to the reopening of
trading after a stock has been halted
during the trading day because of
‘‘Equipment Changeover,’’ Exchange
Rule 123D currently requires a
minimum of five minutes to elapse
before trading resumes following an
Equipment Changeover. Further, if,
during the ‘‘Equipment Changeover’’
trading halt, a significant order
imbalance 6 develops or a regulatory
condition occurs, the nature of the halt
will be changed and notice must be
disseminated and trading cannot resume
until ten minutes after the first
indication of the new halt condition.
The Exchange’s proposal would reduce
these minimum time periods to one
minute after an ‘‘Equipment
Changeover’’ and to three minutes after
an ‘‘Equipment Changeover’’ during
which a significant order imbalance or
regulatory condition develops.
Lastly, NYSE proposes to amend
Exchange Rule 15 to conform with a
recent amendment to the Intermarket
Trading System Plan (‘‘ITS Plan’’). In
particular, the Exchange’s proposal
would require that, when more than one
indication is disseminated, a stock may
reopen one minute after the last
indication if three minutes have elapsed
after the first indication.
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.7 Specifically, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
6 The Exchange indicated in the Notice that a
‘‘significant order imbalance’’ is one which would
result in a price change from the last sale of one
point or more for stocks under $10, the lesser of
10% or three points for stocks between $10–$99.99
and five points for stocks $100 or more—unless a
Floor Governor deems circumstances warrant a
lower parameter.
7 In approving this proposed rule change the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
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58646
Federal Register / Vol. 71, No. 192 / Wednesday, October 4, 2006 / Notices
Act,8 which requires, among other
things, that the rules of a national
securities exchange be designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system and, in general, to protect
investors and the public interest. The
proposal appears designed to strike a
reasonable balance between preserving
the opportunity for price discovery
before a stock opens or reopens while
providing timely opportunities for
investors to participate in the market.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,9 that the
proposed rule change (SR–NYSE–2006–
49), as amended, is approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Nancy M. Morris,
Secretary.
[FR Doc. E6–16367 Filed 10–3–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54526; File No. SR–CBOE–
2006–70]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving a
Proposed Rule Change and Notice of
Filing and Order Granting Accelerated
Approval to Amendment No. 1 Thereto
To Adopt Rules Relating to Regulation
NMS
September 27, 2006.
I. Introduction
rwilkins on PROD1PC63 with NOTICES
On August 18, 2006, the Chicago
Board Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposal to
modify its rules relating to the trading
of non-option securities to conform with
Regulation NMS. The proposal was
published for comment in the Federal
Register on August 25, 2006.3 The
Commission received no comments on
the proposal. The Exchange filed
Amendment No. 1 with the Commission
8 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(2).
10 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 53112
(January 12, 2006), 71 FR 3579.
9 15
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14:45 Oct 03, 2006
Jkt 211001
on September 27, 2006.4 This notice and
order requests comment on Amendment
No. 1 and approves the proposal, as
amended, on an accelerated basis.
II. Description of the Proposal
The Commission recently approved
the Exchange’s proposal to establish a
new electronic trading system for nonoption securities known as ‘‘Stock
Trading on CBOEdirect’’ or ‘‘STOC.’’5 In
this filing, CBOE proposes additional
rules and additional system
functionality to STOC designed to
comply with Regulation NMS and to
enable CBOE to qualify as automated
trading center whose quotations will be
protected under Regulation NMS. In its
release extending the compliance dates
for Rules 610 (the Access Rule) and 611
(the Order Protection Rule) of
Regulation NMS,6 the Commission
established a ‘‘Specifications Date’’ of
October 16, 2006, by which final
technical specifications for interaction
with Regulation NMS-compliant trading
systems of automated trading centers
must be published on SRO Web sites.
Among other things, these specifications
must address: (1) The identification of
quotations as automated or manual to
meet the requirements of Rule
600(b)(4);7 (2) an immediate-or-cancel
order (‘‘IOC’’) functionality that meets
the requirements of Rule 600(b)(3);8 and
(3) an intermarket sweep order (‘‘ISO’’)
functionality that allows other industry
participants to meet the requirements of
Rule 600(b)(30).9 The proposed rules
would modify the existing STOC rules
to address these requirements as well as
other matters relating to Regulation
NMS.
Unless execution of an order would
cause an impermissible trade-through of
a protected quotation of another trading
center, all marketable orders would
automatically execute on the STOC
system against the system’s best bid or
offer (which incorporates resting limit
orders and interest from CBOE marketmakers). There would be no manual
quotations, and STOC is designed to
provide quotations that are always
‘‘automated’’ for purposes of Rule
600(b)(4). If CBOE were to experience a
technical failure, it would cease
4 Amendment No. 1 replaced the original filing in
its entirety.
5 5 See Securities Exchange Act Release No.
54422 (September 11, 2006), 71 FR 54537
(September 15, 2006) (SR–CBOE–2004–21).
6 Securities Exchange Act Release No. 53829 (May
18, 2006), 71 FR 30038 (May 24, 2006) (‘‘Regulation
NMS Compliance Date Release’’).
7 17 CFR 242.604(b)(4).
8 17 CFR 242.604(b)(3).
9 17 CFR 242.604(b)(30).
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disseminating quotations (as opposed to
disseminating manual quotations).10
The Exchange also proposes to modify
its existing rule defining and governing
the handling of IOC orders to make clear
that, consistent with the requirements of
Regulation NMS, IOC orders routed to
the STOC System would either be
immediately executed (in part or in full)
or canceled.11 The Exchange also is
proposing to adopt a rule providing that,
consistent with the requirements of
Regulation NMS, ISOs routed to CBOE
would be immediately and
automatically executed on receipt
without regard for better-priced
protected quotations displayed by other
trading centers.12
CBOE has proposed additional rules
relating to Regulation NMS. First, as
required by Rule 610(d) of Regulation
NMS,13 CBOE has proposed to add
language providing that members
should reasonably avoid displaying
quotations that lock or cross protected
quotations from other trading centers.14
Second, the Exchange is proposing
language that will allow it to invoke the
‘‘self-help’’ exception contained in Rule
611(b)(1) of Regulation NMS.15 CBOE
could invoke self-help and bypass
quotations displayed by a trading center
if the trading center repeatedly fails to
respond within one second to orders
attempting to access its protected
quotations, provided the failures are
attributable to the trading center and not
to transmission delays outside its
control. CBOE must immediately notify
the trading center of its determination to
invoke self-help.16
Third, when appropriate functionality
is available on CBOE, the Exchange
would provide outbound routing,
through a third-party service provider
(‘‘Routing Service Provider’’), to other
trading centers displaying better-priced
protected quotations on behalf of orders
that may be routed.17 This outbound
10 See
proposed CBOE Rule 52.13(a).
orders would not be ‘‘held up’’ for
manual processing or for potential price
improvement above CBOE’s disseminated
quotation. See proposed CBOE Rule 51.8(g)(4).
12 See proposed CBOE Rule 51.8(n).
13 17 CFR 242.610(d)
14 See proposed CBOE Rule 52.12.
15 17 CFR 242.611(b)(1).
16 See proposed CBOE Rule 52.13(b).
17 Prior to that time, however, CBOE would access
better-priced quotations through the ITS Plan (or its
successor). Under previously approved STOC rules,
when STOC receives a marketable order that cannot
be executed without causing a trade-through (and
assuming that the order is not an IOC order), the
system will display the order to market participants
at the NBBO price for a short time (three seconds
or less, to be determined by the Exchange’s STOC
Trading Committee). If no market participant ‘‘steps
up’’ to the NBBO during the display period, the
system will route the order to the STOC DPM for
11 Such
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]]>Agencies
[Federal Register Volume 71, Number 192 (Wednesday, October 4, 2006)]
[Notices]
[Pages 58645-58646]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-16367]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54530; File No. SR-NYSE-2006-49]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Order Approving Proposed Rule Change and Amendment No. 1 Thereto
Relating to Amending Rule 123D (Openings and Halts in Trading) and Rule
15 To Shorten the Minimum Required Time Periods Between Tape
Indications and Openings or Reopenings
September 28, 2006.
On June 30, 2006, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend NYSE Rules 123D and 15 to shorten the
minimum time periods between tape indications and openings or
reopenings of a security and after an ``Equipment Changeover.'' \3\ On
August 14, 2006, the Exchange submitted Amendment No. 1 to the proposed
rule change.\4\ The proposed rule change, as amended, was published for
comment in the Federal Register on August 28, 2006.\5\ The Commission
received no comments regarding the proposal. This order approves the
proposed rule change, as amended.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Exchange Rule 123D(2).
\4\ In Amendment No. 1, NYSE made minor revisions to the
proposed rule text and clarified that all market participants may
react to published price indications.
\5\ See Securities Exchange Act Release No. 54337 (August 21,
2006), 71 FR 50963 (``Notice'').
---------------------------------------------------------------------------
The Exchange proposes to amend NYSE Rules 123D and 15 to shorten
the minimum time periods between tape indications and openings or
reopenings of a security and after an ``Equipment Changeover.'' In
connection with a delayed opening of trading in a security, Exchange
Rule 123D currently requires a minimum of ten minutes to elapse between
the first price indication and the opening of the stock, and where
there is more than one indication, a minimum of five minutes to elapse
after the last indication, provided in all cases that at least ten
minutes have elapsed since the first indication. The Exchange's
proposal would reduce these minimum time periods from ten to three
minutes after the first indication, and to one minute after the last
indication, provided that a minimum of three minutes have elapsed since
the first indication.
With respect to the reopening of trading after a stock has been
halted during the trading day, Exchange Rule 123D currently requires a
minimum of five minutes to elapse between the first indication and the
reopening of trading, and a minimum of three minutes to elapse after
the last indication, provided that at least five minutes has elapsed
since the first indication. The Exchange's proposal would reduce these
minimum time periods to three minutes after the first indication, and
to one minute after the last indication, provided that a minimum of
three minutes has elapsed since the first indication.
With respect to the reopening of trading after a stock has been
halted during the trading day because of ``Equipment Changeover,''
Exchange Rule 123D currently requires a minimum of five minutes to
elapse before trading resumes following an Equipment Changeover.
Further, if, during the ``Equipment Changeover'' trading halt, a
significant order imbalance \6\ develops or a regulatory condition
occurs, the nature of the halt will be changed and notice must be
disseminated and trading cannot resume until ten minutes after the
first indication of the new halt condition. The Exchange's proposal
would reduce these minimum time periods to one minute after an
``Equipment Changeover'' and to three minutes after an ``Equipment
Changeover'' during which a significant order imbalance or regulatory
condition develops.
---------------------------------------------------------------------------
\6\ The Exchange indicated in the Notice that a ``significant
order imbalance'' is one which would result in a price change from
the last sale of one point or more for stocks under $10, the lesser
of 10% or three points for stocks between $10-$99.99 and five points
for stocks $100 or more--unless a Floor Governor deems circumstances
warrant a lower parameter.
---------------------------------------------------------------------------
Lastly, NYSE proposes to amend Exchange Rule 15 to conform with a
recent amendment to the Intermarket Trading System Plan (``ITS Plan'').
In particular, the Exchange's proposal would require that, when more
than one indication is disseminated, a stock may reopen one minute
after the last indication if three minutes have elapsed after the first
indication.
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\7\
Specifically, the Commission finds that the proposal is consistent with
Section 6(b)(5) of the
[[Page 58646]]
Act,\8\ which requires, among other things, that the rules of a
national securities exchange be designed to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and a national market system and, in general,
to protect investors and the public interest. The proposal appears
designed to strike a reasonable balance between preserving the
opportunity for price discovery before a stock opens or reopens while
providing timely opportunities for investors to participate in the
market.
---------------------------------------------------------------------------
\7\ In approving this proposed rule change the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\9\ that the proposed rule change (SR-NYSE-2006-49), as amended, is
approved.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-16367 Filed 10-3-06; 8:45 am]
BILLING CODE 8010-01-P
