Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adding a New Order Type Known As the Mid-Point Passive Liquidity Order, 39867-39869 [E7-14036]
Download as PDF
<![CDATA[
Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Notices
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
Nasdaq proposes to modify the
manner in which a member’s average
daily volume is determined by
excluding from the calculation days
when the market is not open for the
entire trading day. An example of such
a partial trading day is Tuesday, July 3,
2007. On that day Nasdaq will cease
trading at 1 p.m. Eastern Time (‘‘ET’’) 5
and, thus, trading for that day will be
excluded from the calculation of a
member’s average daily volume. The
change will ensure that members close
to achieving the average daily volume
required for a particular pricing level
will not find it more difficult to achieve
that level simply because a month
contains a partial trading day.
2. Statutory Basis
Nasdaq believes that the proposed
rule change is consistent with the
provisions of section 6 of the Act,6 in
general, and with sections 6(b)(4) of the
Act,7 in particular, in that the proposal
provides for the equitable allocation of
reasonable dues, fees, and other charges
among its members and issuers and
other persons using any facility or
system which Nasdaq operates or
controls. Nasdaq believes that the
change is reasonable because it will
facilitate members achieving volume
levels required for particular pricing
levels in months with partial trading
days.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
Nasdaq does not believe that the
proposed rule change will result in 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
mstockstill on PROD1PC66 with NOTICES
Written comments were neither
solicited nor received.
5 Although Nasdaq will officially ‘‘close’’ at 1
p.m. ET, Nasdaq will continue trading in an after
hours session until 5 p.m. ET; compared to ‘‘full
trading days’’ times of 4 p.m. ET and 8 p.m. ET,
respectively.
6 15 U.S.C. 78f.
7 15 U.S.C. 78f(b)(4).
VerDate Aug<31>2005
16:19 Jul 19, 2007
Jkt 211001
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to section
19(b)(3)(A)(ii) of the Act 8 and
subparagraph (f)(2) of Rule 19b–4
thereunder 9 because it establishes or
changes a due, fee, or other charge
applicable only to a member imposed by
the self-regulatory organization.
Accordingly, the proposal is effective
upon Commission receipt of the filing.
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–NASDAQ–2007–062 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Nancy M. Morris, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–1090.
All submissions should refer to File
Number SR–NASDAQ–2007–062. 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
PO 00000
8 15
9 17
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
Frm 00084
Fmt 4703
Sfmt 4703
39867
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, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of the filing also will be available
for inspection and copying at the
principal office of Nasdaq. 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–NASDAQ–2007–062 and
should be submitted on or August 10,
2007.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.10
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–14055 Filed 7–19–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56072; File No. SR–
NYSEArca–2007–61]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Adding a New Order Type
Known As the Mid-Point Passive
Liquidity Order
July 13, 2007.
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 June 29,
2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
‘‘Exchange’’), through its wholly-owned
subsidiary, NYSE Arca Equities, Inc.
(‘‘NYSE Arca Equities’’ or
‘‘Corporation’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by the Exchange.
The Exchange filed the proposed rule
change pursuant to section 19(b)(3)(A)
of the Act 3 and Rule 19b–4(f)(6)
thereunder, which renders it effective
upon filing with the Commission.4 The
Commission is publishing this notice to
10 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).
4 17 CFR 240.19b–4(f)(6).
1 15
E:\FR\FM\20JYN1.SGM
20JYN1
39868
Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Notices
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, through its whollyowned subsidiary, NYSE Arca Equities
proposes to amend its rules in order to
add a new order type known as the MidPoint Passive Liquidity Order (‘‘MPL
Order’’). The changes described in this
rule proposal would add new NYSE
Arca Equities Rule 7.31(h)(5) and would
amend existing Rule 7.37(d)(2). The text
of the proposed rule change is available
at the Exchange, the Commission’s
Public Reference Room, and https://
www.nyse.com.
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 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
As part of its continuing efforts to
provide additional flexibility and
increased functionality to its system and
its Users,5 the Exchange proposes to add
a new order type known as the MPL
Order. The MPL Order is a version of
the NYSE Arca Passive Liquidity
Order,6 except that it will be executable
only at the midpoint of the Protected
Best Bid and Offer (‘‘PBBO’’).7
mstockstill on PROD1PC66 with NOTICES
MPL Order Execution in NYSE Arca
The MPL Order will follow the same
execution priority rules as the Passive
Liquidity Order.8 MPL Orders always
execute at the midpoint of the PBBO
and do not receive price improvement.
MPL Orders will be ranked in time
priority for the purposes of execution as
long as the midpoint is within the limit
range of the order. The Exchange may
set a minimum entry size for MPL
Orders from time to time, with the
5 See
NYSE Arca Equities Rule 1.1(yy) for the
definition of ‘‘User.’’
6 See NYSE Arca Equities Rule 7.31(h)(4).
7 See NYSE Arca Equities Rule 1.1(eee) for the
definitions of ‘‘Protected Bid’’ and Protected Offer.’’
8 See NYSE Arca Equities Rule 7.31(h)(4) and
7.37(b)(2)(A)(iv).
VerDate Aug<31>2005
16:19 Jul 19, 2007
Jkt 211001
initial minimum entry size set at 1,000
shares. Users may specify a minimum
executable size for an MPL Order, but
no less than 1,000 shares. An MPL
Order with a specified minimum
executable size will execute against an
incoming order that meets the minimum
executable size and is priced at or better
than the midpoint of the PBBO.9
An MPL Order may be executed in
subpennies if necessary to attain a
midpoint price. Users may mark
incoming limit orders with a ‘‘No
Midpoint Execution’’ designator; so
marked, those limit orders will ignore
MPL Orders and trade against the rest of
the book in the ordinary course.
MPL Orders will not be exclusive to
Lead Market Makers 10 (‘‘LMMs’’) where
NYSE Arca is the primary listings
market. MPL Orders will be valid for
any session but will not participate in
any auctions. If the market is locked, the
eligible MPL Order will trade at the
locked price. If the market is crossed,
the MPL Order will wait for the market
to uncross before becoming eligible to
trade again. MPL Orders will interact
with all order types including contra
MPL Orders, with the exception of cross
orders.
MPL Orders will not route out of
NYSE Arca to other market centers. For
purposes of the NYSE Arca rules related
to Regulation NMS, MPL Orders will
never be routed to Protected or Manual
Quotations. An MPL Order will not
trade-through a Protected Quotation.
The Exchange believes that the
implementation of the aforementioned
rule changes adding a new order type
and the related NYSE Arca order
processing modifications will enhance
order execution opportunities on NYSE
Arca.11 The Exchange believes that the
proposed order type will allow for
additional opportunities for liquidity
providers, especially institutions, to
passively interact with interest in the
NYSE Arca book.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
9 For example, an order may be entered to buy
10,000 MPL with a minimum size of 2,000. This
would allow for execution of the MPL order only
if the contra size order were at least 2,000 shares.
If the leaves quantity becomes less than the
minimum size, the minimum size restriction will
no longer be enforced on executions.
10 See NYSE Arca Equities Rule 1.1(ccc) for
definition of ‘‘Lead Market Makers.’’
11 This proposed order type is similar to the
MidPoint Match mechanism of the International
Securities Exchange, Inc. (‘‘ISE’’), previously
approved by the Commission. See Securities
Exchange Act Release No. 54528 (September 28,
2006), 71 FR 58650 (October 4, 2006) (SR–ISE–
2006–48).
PO 00000
Frm 00085
Fmt 4703
Sfmt 4703
section 6(b) of the Act 12 in general, and
furthers the objectives of section 6(b)(5)
of the Act 13 in particular, because it is
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system.
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
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate, it has
become effective pursuant to section
19(b)(3)(A) 14 of the Act and Rule 19b–
4(f)(6) thereunder.15 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.
NYSE Arca has asked the Commission
to waive the 30-day operative delay. The
Commission believes such a waiver is
consistent with the protection of
investors and the public interest
because it would permit the Exchange to
codify the proposed order type, the MPL
without delay.16 For this reason, the
Commission designates the proposal to
12 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
14 15 U.S.C. 78s(b)(3)(A).
15 17 CFR 240.19b–4(f)(6).
16 For purposes only of waiving the 30-day preoperative period, the Commission has considered
the proposed rule’s impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
13 15
E:\FR\FM\20JYN1.SGM
20JYN1
Federal Register / Vol. 72, No. 139 / Friday, July 20, 2007 / Notices
be operative upon filing with the
Commission.
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:
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7–14036 Filed 7–19–07; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–56069; File No. SR–OCC–
2006–19]
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–2007–61 on the
subject line.
Self-Regulatory Organizations; The
Options Clearing Corporation; Order
Granting Approval of a Proposed Rule
Change Relating to Close-Out Netting
Procedures
July 13, 2007.
I. Introduction
On October 10, 2006, The Options
Clearing Corporation (‘‘OCC’’) filed with
• Send paper comments in triplicate
the Securities and Exchange
to Nancy M. Morris, Secretary,
Commission (‘‘Commission’’) proposed
Securities and Exchange Commission,
rule change SR–OCC–2006–19 pursuant
100 F Street, NE., Washington, DC
to section 19(b)(1) of the Securities
20549–1090.
Exchange Act of 1934 (‘‘Act’’).1 On May
All submissions should refer to File
15, 2007, OCC amended the proposed
Number SR–NYSEArca–2007–61. This
rule change. Notice of the proposal was
file number should be included on the
published in the Federal Register on
subject line if e-mail is used. To help the May 29, 2007.2 On June 21, 2007, OCC
Commission process and review your
again amended the proposed rule
comments more efficiently, please use
change.3 Three comment letters were
only one method. The Commission will received.4 For the reasons discussed
post all comments on the Commission’s below, the Commission is granting
Internet Web site (https://www.sec.gov/
approval of the proposed rule change.
rules/sro.shtml). Copies of the
II. Description
submission, all subsequent
amendments, all written statements
Background
with respect to the proposed rule
OCC was asked by several of its
change that are filed with the
Clearing Members to consider adopting
Commission, and all written
a rule that would allow for close-out
communications relating to the
netting of obligations running between
proposed rule change between the
OCC and Clearing Members in the event
Commission and any person, other than of an OCC default or insolvency. The
those that may be withheld from the
reason was that such a rule could
public in accordance with the
reduce applicable capital requirements
provisions of 5 U.S.C. 552, will be
for a Clearing Member’s parent company
available for inspection and copying in
where the parent is a U.S. or non-U.S.
the Commission’s Public Reference
bank or part of a Consolidated
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
17 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
between the hours of 10 a.m. and 3 p.m.
2 Securities Exchange Act Release No. 55788 (May
Copies of such filing also will be
21, 2007), 72 FR 29569.
available for inspection and copying at
3 Although the proposed rule change was
the principal office of NYSE Arca. All
amended after it was noticed for comment in the
comments received will be posted
Federal Register, republication of the notice was
without change; the Commission does
not necessary because the June 21, 2007,
amendment made only a technical change regarding
not edit personal identifying
the application of a financial accounting
information from submissions. You
interpretation.
should submit only information that
4 Edward S. Grieb, Managing Director and
you wish to make available publicly. All Financial Controller, Lehman Brothers Holdings
Inc. (June 19, 2007); Matthew Schroeder, Chairman,
submissions should refer to File
Dealer Accounting Committee, Securities Industry
Number SR–NYSEArca–2007–61 and
and Financial Markets Association (June 19, 2007);
should be submitted on or before
Gregory A. Sigrist, Managing Director, Morgan
August 10, 2007.
Stanley, New York, New York (June 19, 2007).
mstockstill on PROD1PC66 with NOTICES
Paper Comments
VerDate Aug<31>2005
16:19 Jul 19, 2007
Jkt 211001
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
39869
Supervised Entity (‘‘CSE’’). The absence
of a netting agreement that would apply
in a default or insolvency of OCC could
cause the minimum capital requirement
applicable to such a parent company
and its subsidiaries to be substantially
larger on a consolidated basis than it
would be otherwise. In the absence of a
netting agreement, applicable banking
regulations generally prohibit offsetting
the Clearing Member’s liabilities to OCC
on short positions in options and on
other obligations against the Clearing
Member’s credits from OCC with respect
to long options positions and from other
obligations of OCC. In addition, OCC
believes that a close-out netting rule
would clarify the accounting treatment
of obligations between OCC and its
Clearing Members.
The proposed rule change is designed
to allow Clearing Members to comply
with international standards under the
Basel Capital Accord adopted by the
Basel Committee on Banking
Supervision relating to bilateral netting
(‘‘Basel Netting Standards’’).5 It is OCC’s
understanding that the capital rules
applicable to most banks following the
Basel Netting Standards require that an
enforceable netting agreement be in
place in order for mutual obligations
between a Clearing Member that is a
bank affiliate and a counterparty such as
OCC to be treated on a net basis. The
policy behind this requirement is to
ensure that obligations that are treated
on a net basis for capital purposes can
actually be offset against one another in
the event of the failure of the
counterparty. In the absence of an
enforceable netting agreement, there is
concern that the representative of the
failed counterparty (i.e., OCC in this
scenario) under applicable insolvency
law might be able to ‘‘cherry pick’’ by
assuming the benefit of contracts
representing an asset to the bankruptcy
estate while rejecting contracts
representing a liability. This would
force the non-defaulting counterparty
(i.e., the Clearing Member in this
scenario) to perform in full on its
liabilities while sharing with other
unsecured creditors in any amounts
available for distribution from the
bankruptcy estate to satisfy its claims.
An enforceable netting agreement
providing for ‘‘close-out netting’’ in the
event of a default or insolvency of OCC
would avoid this potential result.
Chapter XI of OCC’s Rules,
Suspension of a Clearing Member,
provides in considerable detail for
5 For more information on the Basel Committee
on Banking Supervision and the Basel Netting
Standards, see the Bank for International
Settlement’s Web site at: https://www.bis.org.
E:\FR\FM\20JYN1.SGM
20JYN1
]]>Agencies
[Federal Register Volume 72, Number 139 (Friday, July 20, 2007)]
[Notices]
[Pages 39867-39869]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14036]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56072; File No. SR-NYSEArca-2007-61]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Adding a New Order
Type Known As the Mid-Point Passive Liquidity Order
July 13, 2007.
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 June 29, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange''),
through its wholly-owned subsidiary, NYSE Arca Equities, Inc. (``NYSE
Arca Equities'' or ``Corporation'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change as
described in Items I and II below, which Items have been substantially
prepared by the Exchange. The Exchange filed the proposed rule change
pursuant to section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder, which renders it effective upon filing with the
Commission.\4\ The Commission is publishing this notice to
[[Page 39868]]
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).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange, through its wholly-owned subsidiary, NYSE Arca
Equities proposes to amend its rules in order to add a new order type
known as the Mid-Point Passive Liquidity Order (``MPL Order''). The
changes described in this rule proposal would add new NYSE Arca
Equities Rule 7.31(h)(5) and would amend existing Rule 7.37(d)(2). The
text of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, and https://www.nyse.com.
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
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
As part of its continuing efforts to provide additional flexibility
and increased functionality to its system and its Users,\5\ the
Exchange proposes to add a new order type known as the MPL Order. The
MPL Order is a version of the NYSE Arca Passive Liquidity Order,\6\
except that it will be executable only at the midpoint of the Protected
Best Bid and Offer (``PBBO'').\7\
---------------------------------------------------------------------------
\5\ See NYSE Arca Equities Rule 1.1(yy) for the definition of
``User.''
\6\ See NYSE Arca Equities Rule 7.31(h)(4).
\7\ See NYSE Arca Equities Rule 1.1(eee) for the definitions of
``Protected Bid'' and Protected Offer.''
---------------------------------------------------------------------------
MPL Order Execution in NYSE Arca
The MPL Order will follow the same execution priority rules as the
Passive Liquidity Order.\8\ MPL Orders always execute at the midpoint
of the PBBO and do not receive price improvement.
---------------------------------------------------------------------------
\8\ See NYSE Arca Equities Rule 7.31(h)(4) and
7.37(b)(2)(A)(iv).
---------------------------------------------------------------------------
MPL Orders will be ranked in time priority for the purposes of
execution as long as the midpoint is within the limit range of the
order. The Exchange may set a minimum entry size for MPL Orders from
time to time, with the initial minimum entry size set at 1,000 shares.
Users may specify a minimum executable size for an MPL Order, but no
less than 1,000 shares. An MPL Order with a specified minimum
executable size will execute against an incoming order that meets the
minimum executable size and is priced at or better than the midpoint of
the PBBO.\9\
---------------------------------------------------------------------------
\9\ For example, an order may be entered to buy 10,000 MPL with
a minimum size of 2,000. This would allow for execution of the MPL
order only if the contra size order were at least 2,000 shares. If
the leaves quantity becomes less than the minimum size, the minimum
size restriction will no longer be enforced on executions.
---------------------------------------------------------------------------
An MPL Order may be executed in subpennies if necessary to attain a
midpoint price. Users may mark incoming limit orders with a ``No
Midpoint Execution'' designator; so marked, those limit orders will
ignore MPL Orders and trade against the rest of the book in the
ordinary course.
MPL Orders will not be exclusive to Lead Market Makers \10\
(``LMMs'') where NYSE Arca is the primary listings market. MPL Orders
will be valid for any session but will not participate in any auctions.
If the market is locked, the eligible MPL Order will trade at the
locked price. If the market is crossed, the MPL Order will wait for the
market to uncross before becoming eligible to trade again. MPL Orders
will interact with all order types including contra MPL Orders, with
the exception of cross orders.
---------------------------------------------------------------------------
\10\ See NYSE Arca Equities Rule 1.1(ccc) for definition of
``Lead Market Makers.''
---------------------------------------------------------------------------
MPL Orders will not route out of NYSE Arca to other market centers.
For purposes of the NYSE Arca rules related to Regulation NMS, MPL
Orders will never be routed to Protected or Manual Quotations. An MPL
Order will not trade-through a Protected Quotation.
The Exchange believes that the implementation of the aforementioned
rule changes adding a new order type and the related NYSE Arca order
processing modifications will enhance order execution opportunities on
NYSE Arca.\11\ The Exchange believes that the proposed order type will
allow for additional opportunities for liquidity providers, especially
institutions, to passively interact with interest in the NYSE Arca
book.
---------------------------------------------------------------------------
\11\ This proposed order type is similar to the MidPoint Match
mechanism of the International Securities Exchange, Inc. (``ISE''),
previously approved by the Commission. See Securities Exchange Act
Release No. 54528 (September 28, 2006), 71 FR 58650 (October 4,
2006) (SR-ISE-2006-48).
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act \12\ in general, and furthers the
objectives of section 6(b)(5) of the Act \13\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to section 19(b)(3)(A) \14\ of the Act and Rule 19b-
4(f)(6) thereunder.\15\ 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.
---------------------------------------------------------------------------
\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
NYSE Arca has asked the Commission to waive the 30-day operative
delay. The Commission believes such a waiver is consistent with the
protection of investors and the public interest because it would permit
the Exchange to codify the proposed order type, the MPL without
delay.\16\ For this reason, the Commission designates the proposal to
[[Page 39869]]
be operative upon filing with the Commission.
---------------------------------------------------------------------------
\16\ For purposes only of waiving the 30-day pre-operative
period, the Commission has considered the proposed rule's impact on
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
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-2007-61 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2007-61. 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, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of NYSE Arca. 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-2007-61 and should
be submitted on or before August 10, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\17\
---------------------------------------------------------------------------
\17\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-14036 Filed 7-19-07; 8:45 am]
BILLING CODE 8010-01-P
