Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rule 92(d)(6), Limitations on Members' Trading Because of Customers' Orders, 40351-40353 [E7-14249]

Download as PDF Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices 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 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–NYSE–2007–09 and should be submitted on or before August 14, 2007. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,16 that the proposed rule change (File No. SR– NYSE–2007–09), as modified by Amendments No. 1, 2, and 3, be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.17 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14217 Filed 7–23–07; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56088; File No. SR–NYSE– 2007–63] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Rule 92(d)(6), Limitations on Members’ Trading Because of Customers’ Orders mstockstill on PROD1PC66 with NOTICES July 18, 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 July 13, 2007, the New York Stock Exchange LLC (‘‘NYSE’’ 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 substantially prepared by the Exchange. The Exchange has designated the proposed rule change as a ‘‘noncontroversial’’ rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) 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 Rule 92 to permit specialists to trade between the hours of 6 p.m. and 9:15 a.m. Eastern Time (‘‘ET’’) in any security in which the specialist is registered, notwithstanding any open customer orders on the Display Book. The text of the proposed rule change is available on NYSE’s Web site (http:// www.nyse.com), at NYSE, 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. 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 The Exchange proposes to amend NYSE Rule 92 to permit specialists to trade for their dealer accounts after hours notwithstanding that they have unexecuted customer orders in their possession that could be executed at the same prices as the specialists’ trades. The proposed amendment would both minimize trading risks for specialists and harmonize NYSE Rule 92 with NASD’s Manning Rule.5 16 Id. 17 17 3 15 1 15 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 4 17 VerDate Aug<31>2005 17:50 Jul 23, 2007 5 Jkt 211001 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). See NASD Rule 2111 and IM–2110–2. Frm 00082 Fmt 4703 Sfmt 4703 40351 NYSE Rule 92 generally prohibits members or member organizations from entering proprietary orders ahead of, or along with, customer orders that are executable at the same price as the proprietary order. Because the rule is not limited to market hours, it prohibits, subject to certain exceptions, specialists from trading after hours in any security in which they are registered while they are holding unexecuted customer orders on their Book, which they have knowledge of, that could be executed at the same price as the specialist’s proposed trade (e.g., good-til-cancelled orders). At present, under NYSE rules, specialists remain responsible for orders that have been left on the Book after the trading and crossing sessions have closed even though they cannot execute those orders until the next Exchange trading session begins. Accordingly, if a specialist had such an order on the Book, any after-hours trading by the specialist in such security could violate Rule 92.6 Because of the specialist’s agency obligation to the Book after trading at NYSE has closed, the Rule 92 limit on specialist’s after-hours trading can increase the specialist’s trading risks, particularly where specialists are trading for the purpose of hedging their risk and/or bringing their dealer or investment account positions into parity with trading in away markets. To correct this, the Exchange proposes amending Rule 92 to permit specialists to trade for the dealer account after hours, notwithstanding unexecuted interest that is left on the specialist’s Book. The proposed change, in addition to properly allocating the obligation to protect customer orders after hours, also has the effect of harmonizing NYSE Rule 92 to its NASD counterpart, the Manning Rule. The Manning Rule generally prohibits NASD member firms that are holding a customer limit or market order from trading for that member’s market making proprietary account at a price that would satisfy the customer’s limit or market order without executing the customer’s order.7 Notably, however, the Manning 6 Specialists could trade and offer any betterpriced executions to their customers, but as a practical matter, because specialists may have to give up executions of transactions that were intended to hedge the specialist’s trading risks, this limitation effectively prevents the specialist from engaging in hedging transactions in most securities. 7 See NASD IM 2110–2 and Rule 2111. As originally approved, the Manning Rule applied only to trading during regular trading hours. In 1999, when NASD expanded the operation of certain Nasdaq transactions and the quotation and reporting systems and facilities to 6:30 p.m. ET, the Commission approved the extension of the E:\FR\FM\24JYN1.SGM Continued 24JYN1 40352 Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices mstockstill on PROD1PC66 with NOTICES Rule only applies between 9:30 a.m. and 4 p.m. ET, and in some cases to 6:30 p.m. ET, meaning that after hours, NASD market makers may trade for their dealer accounts without regard to customer orders in their possession. The proposed amendment would add a new subsection (6) to the exemptions listed in Rule 92(d) that would adopt a similarly restricted time frame on the rule’s prohibitions on specialist trading while in possession of an unexecuted customer order. Similar to the Manning Rule, the Exchange proposes beginning the exemption period for specialists after both the regular trading and the crossing sessions at the Exchange have ended. On a regular trading day, therefore, the exemption period would begin at 6:30 p.m. ET. If the regular NYSE trading session closes earlier than 4 p.m. ET, the exemption period would begin two-and-one-half hours after the close of the trading session. This window of time not only provides that the trading-ahead provisions of Rule 92 would continue to apply during any period while Exchange facilities are operating and customer orders are subject to execution through such systems, but also provides brokers time to meet any obligations to customers to withdraw any open orders that may have previously been submitted to the Exchange. Accordingly, while the specialist has responsibility for orders on the Book, brokers are on notice that after 6:30 p.m. ET, specialists would be able to trade notwithstanding those orders and therefore the broker should consider his or her best execution obligations to the customer when determining whether to leave an order at the Exchange after trading has closed.8 The Exchange further proposes ending the exemption period 15 minutes before the opening of a security at the Exchange, which, except for StreetTRACKS Gold Shares, would be 9:15 a.m. ET. This is a slight difference from the Manning Rule, which is only applicable as of the commencement of trading. The Exchange proposes this difference because of the specialist’s access to pre-opening orders submitted to NYSE, which may give the specialist Manning Rule to any trading between 9:30 a.m. and 6:30 p.m. ET for certain orders. See Securities Exchange Act Release No. 42003 (October 13, 1999), 64 FR 56554 (October 20, 1999) (SR–NASD–99–57). 8 The Exchange notes that as agent for their customers, brokers can, and should be expected to, take affirmative steps to protect their customers’ orders after hours by trading on behalf of those orders in the after market if appropriate trading opportunities exist. Similarly, sophisticated customers can protect their own interests after hours as effectively as any agent by trading themselves in the after markets. VerDate Aug<31>2005 17:50 Jul 23, 2007 Jkt 211001 unique knowledge of the pricing trend for a security. The 15-minute time frame reflects the fact that at approximately 9:15 a.m. ET (8:05 a.m. ET for Gold Shares) there generally begins to be a sufficient influx of orders such that a meaningful trend might be discernible; prior to that time, there is commensurately less order flow and meaningful trends are less discernible. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under Section 6(b)(5) 9 that an Exchange have rules that are 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. 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 proposed rule change: (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 become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 10 and Rule 19b– 4(f)(6) thereunder.11 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A). 11 17 CFR 240.19b–4(f)(6). Pursuant to Rule 19b– 4(f)(6)(iii) under the Act, the Exchange is required to give the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the five-day pre-filing requirement. PO 00000 9 15 10 15 Frm 00083 Fmt 4703 Sfmt 4703 Act 12 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 13 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it would allow specialists to better manage the trading risks that accompany their market making function, and harmonize Rule 92 with NASD’s Manning Rule. For these reasons, the Commission designates that the proposed rule change become operative immediately.14 At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate the 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 (http://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2007–63 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–NYSE–2007–63. 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 12 17 CFR 240.19b–4(f)(6). CFR 240.19b–4(f)(6)(iii). 14 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 13 17 E:\FR\FM\24JYN1.SGM 24JYN1 40353 Federal Register / Vol. 72, No. 141 / Tuesday, July 24, 2007 / Notices Internet Web site (http://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, 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 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–NYSE– 2007–63 and should be submitted on or before August 14, 2007. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.15 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–14249 Filed 7–23–07; 8:45 am] BILLING CODE 8010–01–P SOCIAL SECURITY ADMINISTRATION Agency Information Collection Activities; Proposed Request and Comment Request The Social Security Administration (SSA) publishes a list of information collection packages that will require clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104–13, the Paperwork Reduction Act of 1995, effective October 1, 1995. The information collection packages that may be included in this notice are for new information collections, approval of existing information collections, revisions to OMB-approved information collections, and extensions (no change) of OMBapproved information collections. SSA is soliciting comments on the accuracy of the agency’s burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and on ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Written comments and recommendations regarding the information collection(s) should be submitted to the OMB Desk Officer and the SSA Reports Clearance Officer. The information can be mailed, faxed or e-mailed to the individuals at the addresses and fax numbers listed below: (OMB) Office of Management and Budget, Attn: Desk Officer for SSA, Fax: 202–395–6974, E-mail address: OIRA_Submission@omb.eop.gov. (SSA) Number of respondents Form number Social Security Administration, DCBFM, Attn: Reports Clearance Officer, 1333 Annex Building, 6401 Security Blvd., Baltimore, MD 21235, Fax: 410–965–6400, E-mail address: OPLM.RCO@ssa.gov. I. The information collections listed below are pending at SSA and will be submitted to OMB within 60 days from the date of this notice. Therefore, your comments should be submitted to SSA within 60 days from the date of this publication. You can obtain copies of the collection instruments by calling the SSA Reports Clearance Officer at 410– 965–0454 or by writing to the address listed above. 1. Statement of Agricultural Employer (Year Prior to 1988; and 1988 and later)—20 CFR 404.702, 404.802, 404.1056—0960–0036. The information from forms SSA–1002–F3 and SSA– 1003–F3 is used by SSA to resolve discrepancies when farm workers allege their employers did not report their wages, or reported the wages incorrectly. If an agricultural employer has incorrectly reported wages, or failed to report any wages for an employee, SSA must attempt to correct its records by contacting the employer to obtain convincing evidence of the wages paid. The respondents are agricultural employers having knowledge of wages paid to agricultural employees. Type of Request: Extension of an OMB-approved information collection. Number of Respondents: 125,000. Estimated Annual Burden: 62,500 hours. Frequency of response Average burden per response (minutes) Total annual burden 75,000 50,000 1 1 30 30 37,500 25,000 Total .......................................................................................................... mstockstill on PROD1PC66 with NOTICES SSA–1002 ........................................................................................................ SSA–1003 ........................................................................................................ 125,000 ........................ ........................ 62,500 2. Medical Report (General)—20 CFR 404.1512–404.1515, 416.912–416.915— 0960–0052. SSA, through its agents, the disability determination services, uses form SSA–3826–F4 to collect medical information needed to make disability determinations. The information is used in determining the claimant’s physical and mental status prior to making a disability determination, and to document the disability claims folder with the medical evidence. Thus, it provides disability adjudicators and reviewers with a narrative record and history of the alleged disability and with 15 17 the objective medical findings necessary to make a disability determination. SSA uses the medical evidence provided on this form in making a determination of whether an individual’s impairment meets the severity and duration requirements required for disability benefits. The respondents are members of the medical community including individual and hospital physicians, medical records librarians, and other medical sources. Type of Request: Revision of an OMBapproved information collection. Number of Respondents: 150,000. Frequency of Response: 1. Average Burden Per Response: 30 minutes. Estimated Annual Burden: 75,000 hours. 3. Request for Correction of Earnings Record—20 CFR 404.820 and 422.125– 0960–0029. Form SSA–7008 is used by individual wage earners to request SSA review and, if necessary, correct its master record of their earnings. The respondents are individuals who question SSA’s record of their earnings. Type of Request: Extension of an OMB-approved information collection. CFR 200.30–3(a)(12). VerDate Aug<31>2005 17:50 Jul 23, 2007 Jkt 211001 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 E:\FR\FM\24JYN1.SGM 24JYN1

Agencies

[Federal Register Volume 72, Number 141 (Tuesday, July 24, 2007)]
[Notices]
[Pages 40351-40353]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-14249]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56088; File No. SR-NYSE-2007-63]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Rule 92(d)(6), Limitations on Members' Trading Because of 
Customers' Orders

July 18, 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 July 13, 2007, the New York Stock Exchange LLC (``NYSE'' 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 substantially prepared by the Exchange. 
The Exchange has designated the proposed rule change as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) of the Act 
\3\ and Rule 19b-4(f)(6) 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Rule 92 to permit specialists 
to trade between the hours of 6 p.m. and 9:15 a.m. Eastern Time 
(``ET'') in any security in which the specialist is registered, 
notwithstanding any open customer orders on the Display Book. The text 
of the proposed rule change is available on NYSE's Web site (http://
www.nyse.com), at NYSE, 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. 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
    The Exchange proposes to amend NYSE Rule 92 to permit specialists 
to trade for their dealer accounts after hours notwithstanding that 
they have unexecuted customer orders in their possession that could be 
executed at the same prices as the specialists' trades. The proposed 
amendment would both minimize trading risks for specialists and 
harmonize NYSE Rule 92 with NASD's Manning Rule.\5\
---------------------------------------------------------------------------

    \5 \ See NASD Rule 2111 and IM-2110-2.
---------------------------------------------------------------------------

    NYSE Rule 92 generally prohibits members or member organizations 
from entering proprietary orders ahead of, or along with, customer 
orders that are executable at the same price as the proprietary order. 
Because the rule is not limited to market hours, it prohibits, subject 
to certain exceptions, specialists from trading after hours in any 
security in which they are registered while they are holding unexecuted 
customer orders on their Book, which they have knowledge of, that could 
be executed at the same price as the specialist's proposed trade (e.g., 
good-til-cancelled orders). At present, under NYSE rules, specialists 
remain responsible for orders that have been left on the Book after the 
trading and crossing sessions have closed even though they cannot 
execute those orders until the next Exchange trading session begins. 
Accordingly, if a specialist had such an order on the Book, any after-
hours trading by the specialist in such security could violate Rule 
92.\6\
---------------------------------------------------------------------------

    \6 \ Specialists could trade and offer any better-priced 
executions to their customers, but as a practical matter, because 
specialists may have to give up executions of transactions that were 
intended to hedge the specialist's trading risks, this limitation 
effectively prevents the specialist from engaging in hedging 
transactions in most securities.
---------------------------------------------------------------------------

    Because of the specialist's agency obligation to the Book after 
trading at NYSE has closed, the Rule 92 limit on specialist's after-
hours trading can increase the specialist's trading risks, particularly 
where specialists are trading for the purpose of hedging their risk 
and/or bringing their dealer or investment account positions into 
parity with trading in away markets. To correct this, the Exchange 
proposes amending Rule 92 to permit specialists to trade for the dealer 
account after hours, notwithstanding unexecuted interest that is left 
on the specialist's Book.
    The proposed change, in addition to properly allocating the 
obligation to protect customer orders after hours, also has the effect 
of harmonizing NYSE Rule 92 to its NASD counterpart, the Manning Rule. 
The Manning Rule generally prohibits NASD member firms that are holding 
a customer limit or market order from trading for that member's market 
making proprietary account at a price that would satisfy the customer's 
limit or market order without executing the customer's order.\7\ 
Notably, however, the Manning

[[Page 40352]]

Rule only applies between 9:30 a.m. and 4 p.m. ET, and in some cases to 
6:30 p.m. ET, meaning that after hours, NASD market makers may trade 
for their dealer accounts without regard to customer orders in their 
possession.
---------------------------------------------------------------------------

    \7 \ See NASD IM 2110-2 and Rule 2111. As originally approved, 
the Manning Rule applied only to trading during regular trading 
hours. In 1999, when NASD expanded the operation of certain Nasdaq 
transactions and the quotation and reporting systems and facilities 
to 6:30 p.m. ET, the Commission approved the extension of the 
Manning Rule to any trading between 9:30 a.m. and 6:30 p.m. ET for 
certain orders. See Securities Exchange Act Release No. 42003 
(October 13, 1999), 64 FR 56554 (October 20, 1999) (SR-NASD-99-57).
---------------------------------------------------------------------------

    The proposed amendment would add a new subsection (6) to the 
exemptions listed in Rule 92(d) that would adopt a similarly restricted 
time frame on the rule's prohibitions on specialist trading while in 
possession of an unexecuted customer order. Similar to the Manning 
Rule, the Exchange proposes beginning the exemption period for 
specialists after both the regular trading and the crossing sessions at 
the Exchange have ended. On a regular trading day, therefore, the 
exemption period would begin at 6:30 p.m. ET. If the regular NYSE 
trading session closes earlier than 4 p.m. ET, the exemption period 
would begin two-and-one-half hours after the close of the trading 
session. This window of time not only provides that the trading-ahead 
provisions of Rule 92 would continue to apply during any period while 
Exchange facilities are operating and customer orders are subject to 
execution through such systems, but also provides brokers time to meet 
any obligations to customers to withdraw any open orders that may have 
previously been submitted to the Exchange. Accordingly, while the 
specialist has responsibility for orders on the Book, brokers are on 
notice that after 6:30 p.m. ET, specialists would be able to trade 
notwithstanding those orders and therefore the broker should consider 
his or her best execution obligations to the customer when determining 
whether to leave an order at the Exchange after trading has closed.\8\
---------------------------------------------------------------------------

    \8\ The Exchange notes that as agent for their customers, 
brokers can, and should be expected to, take affirmative steps to 
protect their customers' orders after hours by trading on behalf of 
those orders in the after market if appropriate trading 
opportunities exist. Similarly, sophisticated customers can protect 
their own interests after hours as effectively as any agent by 
trading themselves in the after markets.
---------------------------------------------------------------------------

    The Exchange further proposes ending the exemption period 15 
minutes before the opening of a security at the Exchange, which, except 
for StreetTRACKS Gold Shares, would be 9:15 a.m. ET. This is a slight 
difference from the Manning Rule, which is only applicable as of the 
commencement of trading. The Exchange proposes this difference because 
of the specialist's access to pre-opening orders submitted to NYSE, 
which may give the specialist unique knowledge of the pricing trend for 
a security. The 15-minute time frame reflects the fact that at 
approximately 9:15 a.m. ET (8:05 a.m. ET for Gold Shares) there 
generally begins to be a sufficient influx of orders such that a 
meaningful trend might be discernible; prior to that time, there is 
commensurately less order flow and meaningful trends are less 
discernible.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \9\ that an Exchange have rules that 
are 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.
---------------------------------------------------------------------------

    \9\ 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 proposed rule change: (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 become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest, the proposed rule change has 
become effective pursuant to Section 19(b)(3)(A) of the Act \10\ and 
Rule 19b-4(f)(6) thereunder.\11\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied the five-day pre-filing requirement.
---------------------------------------------------------------------------

    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \12\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive the 30-day operative delay. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because it would allow specialists to better manage the trading risks 
that accompany their market making function, and harmonize Rule 92 with 
NASD's Manning Rule. For these reasons, the Commission designates that 
the proposed rule change become operative immediately.\14\
---------------------------------------------------------------------------

    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate the 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 (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2007-63 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-NYSE-2007-63. 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

[[Page 40353]]

Internet Web site (http://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, 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 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-NYSE-2007-63 and should be 
submitted on or before August 14, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-14249 Filed 7-23-07; 8:45 am]
BILLING CODE 8010-01-P