Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to the Procedures for Executing Complex Options Orders in Open Outcry, 67684-67685 [E6-19735]
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Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Notices
conditions imposed by the Commission
in NYSE’s case.
The Commission further believes that
requiring a debt security that trades
pursuant to the proposed rule change to
be rated by NRSROs, as MultipleMarkets suggests, is not necessary or
appropriate in the public interest, as the
decision whether to impose such a
requirement is a matter typically left to
the business discretion of the individual
markets.68 Similarly, with respect to the
commenter’s concern about NYSE’s
proposed use of a third-party data
vendor to supply information regarding
the actions of corporate bond issuers,
selection of a particular vendor is
generally within the business judgment
of the Exchange.69
Finally, the Commission does not
believe that there are any blue sky
issues that would preclude approval of
this proposal. Currently, any security
listed on the Exchange is exempt from
state blue sky laws. A debt security that
is delisted by the Exchange and, instead,
traded on an unlisted basis could lose
its blue sky exemption. However, NYSE
has represented that it would not
involuntarily delist the debt security of
any issuer (provided that the security
otherwise met all applicable listing
requirements).70 Therefore, this
proposal will not cause undue hardship
for any issuer that relies on the
Exchange’s listing of its debt security to
obtain a blue sky exemption.
V. Conclusion
For the foregoing reasons, the
Commission finds that the proposed
rule change, as amended, is consistent
with the Exchange Act and the rules and
regulations thereunder applicable to a
national securities exchange.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Exchange Act,71
that the proposed rule change (SR–
NYSE–2004–69), as amended, is
approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.72
Nancy M. Morris,
Secretary.
[FR Doc. E6–19723 Filed 11–21–06; 8:45 am]
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BILLING CODE 8011–01–P
68 See
Multiple-Markets Letter at 5.
id. The Commission notes that it is not
sanctioning a particular vendor by approving the
proposed rule change.
70 See NYSE Response Letter 2 at 1.
71 15 U.S.C. 78s(b)(2).
72 17 CFR 200.30–3(a)(12).
69 See
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SECURITIES AND EXCHANGE
COMMISSION
the most significant aspects of such
statements.
[Release No. 34–54759; File No. SR–
NYSEArca–2006–80]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to the
Procedures for Executing Complex
Options Orders in Open Outcry
November 15, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
3, 2006, NYSE Arca, Inc. (‘‘NYSE Arca’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange has filed the proposal as one
effecting a change in an existing orderentry or trading system pursuant to
Section 19(b)(3)(A)(iii) of the Act 3 and
Rule 19b–4(f)(5) thereunder,4 which
renders the proposed rule change
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Arca Rule 6.75 concerning the
procedures for executing complex
options orders in open outcry. The text
of the proposed rule change is available
on the Exchange’s Web site at https://
www.nysearca.com, at the Exchange’s
Office of the Secretary, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(5).
2 17
PO 00000
Frm 00144
Fmt 4703
Sfmt 4703
1. Purpose
NYSE Arca Rule 6.75 sets forth the
priority and order allocation procedures
with respect to orders executed by open
outcry. Commentary .01 to NYSE Arca
Rule 6.75 sets forth the procedures for
executing combination, spread, ratio,
and straddle orders (otherwise known as
‘‘complex orders’’) in open outcry.
When the Exchange introduced its new
electronic trading platform for options,
the OX Trading System (‘‘OX’’), the
Exchange did not amend the open
outcry procedures for complex orders.5
The Exchange is providing clarifying
rule amendments to NYSE Arca Rule
6.75 and Commentary .01 to NYSE Arca
Rule 6.75 so that the procedures reflect
references to the current systems on the
floor now that OX is fully implemented.
Specifically, the Exchange wishes to
clarify that the ‘‘Book’’ referenced in
NYSE Arca Rule 6.75(h)(4) and
Commentary .01(b)–(d) to NYSE Arca
Rule 6.75 has been phased out and has
been replaced by the Consolidated Book
of OX.6 In the past, the ‘‘Book’’ had
contained only customer limit orders
and was maintained by the floor’s Order
Book Official. Today, the floor utilizes
the Consolidated Book of OX, and,
importantly, the Consolidated Book
contains not only customer limit orders
but also broker-dealer and firm limit
orders. Given this more comprehensive
representation of orders in the
Consolidated Book, the Exchange
wishes to clarify how OTP Holders 7 and
OTP Firms 8 are to interact with the
Consolidated Book when representing a
complex order.
When executing a complex order at a
net debit or credit, which can be
satisfied at the electronically
disseminated bids and offers of the
series involved in the order, the Floor
Broker must determine if there are
customer orders in the Consolidated
5 See Securities Exchange Act Release No. 54238
(July 28, 2006), 71 FR 44758 (August 7, 2006) (SR–
NYSEArca–2006–13) (approving establishment of
OX platform).
6 See NYSE Arca Rule 6.1(b)(37). The term
‘‘Consolidated Book’’ means the Exchange’s
electronic book of limit orders for the accounts of
Public Customers and broker-dealers, and Quotes
with Size. The term ‘‘Quote with Size’’ means a
quotation to buy or sell a specific number of option
contracts at a specific price that a Market Maker has
entered into PCX Plus through an electronic
interface. NYSE Arca Rule 6.1(b)(33).
7 See NYSE Arca Rule 1.1(q).
8 See NYSE Arca Rule 1.1(r).
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Federal Register / Vol. 71, No. 225 / Wednesday, November 22, 2006 / Notices
Book at the best price in each series.9
The Floor Broker will consult the
Trading Official at the post to make the
determination.10 The Trading Official
will check the system to see if there are
customer orders on any or all sides of
the transaction and inform the broker
but will disclose neither the size of the
customer order(s) nor the ranking of the
customer order(s). In the event that
there is any customer order priced at the
best price in the corresponding series in
the Consolidated Book, all orders at that
price, customer and non-customer, will
be deemed to have priority and will
have to be satisfied prior to executing
the complex orders. For each execution
of a complex order that takes priority
over non-customer bids and offers
displayed in the Consolidated Book, the
Trading Official at the post shall record
the transaction by completing an
Unusual Activity Report. A log of such
reports will be maintained by the Floor
Surveillance Unit.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with section
6(b) of the Act 11 in general and furthers
the objectives of section 6(b)(5) 12 in
particular in that it is designed to
promote just and equitable principles of
trade, to prevent fraudulent and
manipulative acts, 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.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
pwalker on PROD1PC61 with NOTICES
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
9 See NYSE Arca Rule 6.43(a). A ‘‘Floor Broker’’
is an individual (either an OTP Holder or OTP Firm
or a nominee of an OTP Holder or OTP Firm) who
is registered with the Exchange for the purpose,
while on the Exchange Floor, of accepting and
executing option orders received from OTP Holders
and OTP Firms.
10 See NYSE Arca Rule 6.1(b)(34). A ‘‘Trading
Official’’ is an Exchange employee or officer, who
is designated by the Chief Executive Officer (or its
designee) or by the Chief Regulatory Officer (or its
designee) of the Exchange. Trading Officials have
the ability to recommend and enforce rules and
regulations relating to trading access, order,
decorum, health, safety, and welfare on the
Exchange.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(4).
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C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments on the proposed
change were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective upon filing
pursuant to section 19(b)(3)(A)(iii) of the
Act 13 and Rule 19b–4(f)(5) 14 thereunder
because it effects a change in an existing
order-entry or trading system of a selfregulatory organization that (i) does not
significantly affect the protection of
investors or the public interest; (ii) does
not impose any significant burden on
competition; and (iii) does not have the
effect of limiting the access to or
availability of the system. At any time
within 60 days of the filing of the
proposed rule change, the Commission
may summarily abrogate such rule
change if it appears to the Commission
that such action is necessary or
appropriate in the public interest, for
the protection of investors, or otherwise
in furtherance of the purposes of the
Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2006–80 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEArca–2006–80. This
file number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal offices of the Exchange.
All comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–NYSEArca–2006–80 and
should be submitted on or before
December 13, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Nancy M. Morris,
Secretary.
[FR Doc. E6–19735 Filed 11–21–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54758; File No. SR–
NYSEArca–2006–81]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Rules Related
to Complex Order Trading
November 15, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’)1 and Rule 19b–4 thereunder,2
notice is hereby given that on November
3, 2006, the NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange filed the
proposal pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
15 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
1 15
13 15
14 17
PO 00000
U.S.C. 78s(b)(3)(A)(iii).
CFR 19b–4(f)(5).
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E:\FR\FM\22NON1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 225 (Wednesday, November 22, 2006)]
[Notices]
[Pages 67684-67685]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-19735]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54759; File No. SR-NYSEArca-2006-80]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change Relating to the
Procedures for Executing Complex Options Orders in Open Outcry
November 15, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on November 3, 2006, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the Exchange. The Exchange has filed the
proposal as one effecting a change in an existing order-entry or
trading system pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and
Rule 19b-4(f)(5) thereunder,\4\ which renders the proposed rule change
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Arca Rule 6.75 concerning the
procedures for executing complex options orders in open outcry. The
text of the proposed rule change is available on the Exchange's Web
site at https://www.nysearca.com, at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
NYSE Arca Rule 6.75 sets forth the priority and order allocation
procedures with respect to orders executed by open outcry. Commentary
.01 to NYSE Arca Rule 6.75 sets forth the procedures for executing
combination, spread, ratio, and straddle orders (otherwise known as
``complex orders'') in open outcry. When the Exchange introduced its
new electronic trading platform for options, the OX Trading System
(``OX''), the Exchange did not amend the open outcry procedures for
complex orders.\5\ The Exchange is providing clarifying rule amendments
to NYSE Arca Rule 6.75 and Commentary .01 to NYSE Arca Rule 6.75 so
that the procedures reflect references to the current systems on the
floor now that OX is fully implemented.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 54238 (July 28,
2006), 71 FR 44758 (August 7, 2006) (SR-NYSEArca-2006-13) (approving
establishment of OX platform).
---------------------------------------------------------------------------
Specifically, the Exchange wishes to clarify that the ``Book''
referenced in NYSE Arca Rule 6.75(h)(4) and Commentary .01(b)-(d) to
NYSE Arca Rule 6.75 has been phased out and has been replaced by the
Consolidated Book of OX.\6\ In the past, the ``Book'' had contained
only customer limit orders and was maintained by the floor's Order Book
Official. Today, the floor utilizes the Consolidated Book of OX, and,
importantly, the Consolidated Book contains not only customer limit
orders but also broker-dealer and firm limit orders. Given this more
comprehensive representation of orders in the Consolidated Book, the
Exchange wishes to clarify how OTP Holders \7\ and OTP Firms \8\ are to
interact with the Consolidated Book when representing a complex order.
---------------------------------------------------------------------------
\6\ See NYSE Arca Rule 6.1(b)(37). The term ``Consolidated
Book'' means the Exchange's electronic book of limit orders for the
accounts of Public Customers and broker-dealers, and Quotes with
Size. The term ``Quote with Size'' means a quotation to buy or sell
a specific number of option contracts at a specific price that a
Market Maker has entered into PCX Plus through an electronic
interface. NYSE Arca Rule 6.1(b)(33).
\7\ See NYSE Arca Rule 1.1(q).
\8\ See NYSE Arca Rule 1.1(r).
---------------------------------------------------------------------------
When executing a complex order at a net debit or credit, which can
be satisfied at the electronically disseminated bids and offers of the
series involved in the order, the Floor Broker must determine if there
are customer orders in the Consolidated
[[Page 67685]]
Book at the best price in each series.\9\ The Floor Broker will consult
the Trading Official at the post to make the determination.\10\ The
Trading Official will check the system to see if there are customer
orders on any or all sides of the transaction and inform the broker but
will disclose neither the size of the customer order(s) nor the ranking
of the customer order(s). In the event that there is any customer order
priced at the best price in the corresponding series in the
Consolidated Book, all orders at that price, customer and non-customer,
will be deemed to have priority and will have to be satisfied prior to
executing the complex orders. For each execution of a complex order
that takes priority over non-customer bids and offers displayed in the
Consolidated Book, the Trading Official at the post shall record the
transaction by completing an Unusual Activity Report. A log of such
reports will be maintained by the Floor Surveillance Unit.
---------------------------------------------------------------------------
\9\ See NYSE Arca Rule 6.43(a). A ``Floor Broker'' is an
individual (either an OTP Holder or OTP Firm or a nominee of an OTP
Holder or OTP Firm) who is registered with the Exchange for the
purpose, while on the Exchange Floor, of accepting and executing
option orders received from OTP Holders and OTP Firms.
\10\ See NYSE Arca Rule 6.1(b)(34). A ``Trading Official'' is an
Exchange employee or officer, who is designated by the Chief
Executive Officer (or its designee) or by the Chief Regulatory
Officer (or its designee) of the Exchange. Trading Officials have
the ability to recommend and enforce rules and regulations relating
to trading access, order, decorum, health, safety, and welfare on
the Exchange.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
section 6(b) of the Act \11\ in general and furthers the objectives of
section 6(b)(5) \12\ in particular in that it is designed to promote
just and equitable principles of trade, to prevent fraudulent and
manipulative acts, 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.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
Written comments on the proposed change were neither solicited nor
received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become effective upon filing
pursuant to section 19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-
4(f)(5) \14\ thereunder because it effects a change in an existing
order-entry or trading system of a self-regulatory organization that
(i) does not significantly affect the protection of investors or the
public interest; (ii) does not impose any significant burden on
competition; and (iii) does not have the effect of limiting the access
to or availability of the system. At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate such rule change if it appears to the Commission that such
action is necessary or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
---------------------------------------------------------------------------
\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 19b-4(f)(5).
---------------------------------------------------------------------------
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEArca-2006-80 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2006-80. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal offices of the Exchange. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-NYSEArca-2006-80 and should be submitted on or before
December 13, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Nancy M. Morris,
Secretary.
[FR Doc. E6-19735 Filed 11-21-06; 8:45 am]
BILLING CODE 8011-01-P
