Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to NYSE Rule 92 and Riskless Principal Trading at the Exchange, 72432-72433 [E7-24728]

Download as PDF 72432 Federal Register / Vol. 72, No. 244 / Thursday, December 20, 2007 / Notices Act 5 which requires an Exchange to 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.6 Specifically, the Commission believes that the proposal should benefit investors and the public interest by enabling customers to receive better priced executions than they otherwise would have received. Additionally, when specialists choose, through their algorithms, to partially or completely fill orders beyond the Exchange BBO, the Commission notes that the Exchange has represented that its systems would not permit a trading message to provide supplemental specialist volume that would tradethrough a protected quotation in violation of Rule 611 of Regulation NMS under the Act.7 The Commission also notes that the supplemental specialist volume would yield to displayed and reserve interest (i.e., customer limit orders, Floor broker agency interest and specialist interest). V. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,8 that the proposed rule change (SR–NYSE–2006– 99), as amended, is approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–24725 Filed 12–19–07; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–56968; File No. SR–NYSE– 2007–114] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to NYSE Rule 92 and Riskless Principal Trading at the Exchange December 14, 2007. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the operative date of NYSE Rule 92(c)(3) from January 16, 2008 to May 14, 2008. The text of the proposed rule change is available at NYSE, 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. 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 extend the delayed operative date of NYSE Rule 92(c)(3) from January 16, 2008 to May 14, 2008. On July 5, 2007, the Commission approved amendments to NYSE Rule 92 to permit riskless principal trading at the Exchange.5 In connection with those amendments, the Exchange implemented NYSE Rule 92(c)(3), which requires members to 5 15 sroberts on PROD1PC70 with NOTICES U.S.C. 78f(b)(5). approving the proposed rule change, the Commission has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 7 17 CFR 242.611. 8 15 U.S.C. 78s(b)(2). 9 17 CFR 200.30–3(a)(12). (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 11, 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. 6 In VerDate Aug<31>2005 20:08 Dec 19, 2007 Jkt 214001 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A). 4 17 CFR 240.19b–4(f)(6). 5 See Securities Exchange Act Release No. 56017 (July 5, 2007), 72 FR 38110 (July 12, 2007) (SR– NYSE–2007–21). 2 17 PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 submit to a designated Exchange database a report of the execution of the facilitated order. That rule also requires members to submit to that same database sufficient information to provide an electronic link of the execution of the facilitated order to all of the underlying orders. For purposes of NYSE Rule 92(c)(3), the Exchange requires that when executing riskless principal transactions, firms must submit order execution reports to the Exchange’s Front End Systemic Capture (‘‘FESC’’) database linking the execution of the riskless principal order on the Exchange to the specific underlying orders. The information provided must be sufficient for both member firms and the Exchange to reconstruct in a time-sequenced manner all orders, including allocations to the underlying orders, with respect to which a member organization is claiming the riskless principal exception. Because the rule change required member organizations to make certain changes to their trading and order management systems, the Commission approved a delay to January 16, 2008 of the operative date of the NYSE Rule 92(c)(3) requirements, including submitting end-of-day allocation reports for riskless principal transactions and using the riskless principal account type indicator. The Exchange has been working diligently to develop its FESC database to accept riskless principal order types and the underlying batch orders. On October 12, 2007, the Exchange published an Information Memo that provided member organizations with information relating to the FESC technology interface and data requirements for riskless principal trading at the Exchange. The development of the systems, however, has taken longer than anticipated, which could affect the ability of member organizations to meet the operative date. Several member organizations have informed the Exchange that they need additional time to program their respective systems to meet the new FESC requirements. To accommodate both the Exchange’s and the member organization community’s need to complete the development of the FESC technology to both accept and route riskless principal orders, the Exchange proposes to delay the operative date for NYSE Rule 92(c)(3) from January 16, 2008 to May 14, 2008. Pending implementation of the FESC database and use of the riskless principal account type indicator, the Exchange will continue to require that, E:\FR\FM\20DEN1.SGM 20DEN1 Federal Register / Vol. 72, No. 244 / Thursday, December 20, 2007 / Notices as of the date each member organization implements riskless principal routing, the member organization have in place systems and controls that allow them to easily match and tie the riskless principal execution on the Exchange to the underlying orders and that they be able to provide this information to the Exchange upon request. 2. Statutory Basis The basis under the Act for this proposed rule change is the requirement under section 6(b)(5) 6 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 7 and Rule 19b– 4(f)(6) thereunder.8 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 6 15 U.S.C. 78f(b)(5). U.S.C. 78s(b)(3)(A). 8 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. sroberts on PROD1PC70 with NOTICES 7 15 VerDate Aug<31>2005 20:08 Dec 19, 2007 Jkt 214001 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 72433 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E7–24728 Filed 12–19–07; 8:45 am] BILLING CODE 8011–01–P 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–NYSE–2007–114 on the subject line. SMALL BUSINESS ADMINISTRATION Small Business Size Standards: Waiver of the Nonmanufacturer Rule U.S. Small Business Administration. ACTION: Notice of Waiver of the Nonmanufacturer Rule for Electromedical and Electrotherapeutic Apparatus Manufacturing. AGENCY: SUMMARY: The U. S. Small Business Administration (SBA) is granting a waiver of the Nonmanufacturer Rule for Electromedical and Electrotherapeutic Paper Comments Apparatus Manufacturing, Diagnostic equipment, MRI (magnetic resonance • Send paper comments in triplicate imaging) manufacturing; Magnetic to Nancy M. Morris, Secretary, resonance imaging (MRI) medical Securities and Exchange Commission, diagnostic equipment manufacturing; 100 F Street, NE., Washington, DC Medical ultrasound equipment 20549–1090. manufacturing; MRI (magnetic All submissions should refer to File resonance imaging) medical diagnostic Number SR–NYSE–2007–114. This file equipment manufacturing; Patient number should be included on the monitoring equipment (e.g., intensive subject line if e-mail is used. To help the care coronary care unit) manufacturing; Commission process and review your PET (positron emission equipment comments more efficiently, please use tomography) scanners manufacturing; only one method. The Commission will and Positron emission tomography post all comments on the Commission’s (PET) scanners manufacturing. The Internet Web site (https://www.sec.gov/ basis for a waiver is that no small rules/sro.shtml). Copies of the business manufacturers are supplying submission, all subsequent this class of product to the Federal amendments, all written statements government. The effect of a waiver with respect to the proposed rule would be to allow otherwise qualified change that are filed with the regular dealers to supply the products of Commission, and all written any domestic manufacturer on a Federal communications relating to the contract set aside for small businesses; proposed rule change between the service-disabled veteran-owned small Commission and any person, other than business or SBA’s 8(a) Business those that may be withheld from the Development Program. public in accordance with the DATE: This waiver is effective January 4, provisions of 5 U.S.C. 552, will be 2008. available for inspection and copying in FOR FURTHER INFORMATION CONTACT: the Commission’s Public Reference Room, on official business days between Edith Butler, Program Analyst, by telephone at (202) 619–0422; by FAX at the hours of 10 a.m. and 3 p.m. Copies (202) 481–1788; or by e-mail at of the filing also will be available for edith.butler@sba.gov. inspection and copying at the principal office of the Exchange. All comments SUPPLEMENTARY INFORMATION: Section received will be posted without change; 8(a)(17) of the Small Business Act, (Act) the Commission does not edit personal 15 U.S.C. 637(a)(17), requires that identifying information from recipients of Federal contracts set aside submissions. You should submit only for small businesses, service-disabled information that you wish to make veteran-owned small businesses, or available publicly. All submissions SBA’s 8(a) Business Development should refer to File Number SR–NYSE– Program provide the product of a small 2007–114 and should be submitted on or before January 10, 2008. 9 17 CFR 200.30–3(a)(12). PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 E:\FR\FM\20DEN1.SGM 20DEN1

Agencies

[Federal Register Volume 72, Number 244 (Thursday, December 20, 2007)]
[Notices]
[Pages 72432-72433]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-24728]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56968; File No. SR-NYSE-2007-114]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to NYSE Rule 92 and Riskless Principal Trading at the Exchange

December 14, 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 December 11, 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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the operative date of NYSE Rule 
92(c)(3) from January 16, 2008 to May 14, 2008. The text of the 
proposed rule change is available at NYSE, 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. 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 extend the delayed operative date of NYSE 
Rule 92(c)(3) from January 16, 2008 to May 14, 2008. On July 5, 2007, 
the Commission approved amendments to NYSE Rule 92 to permit riskless 
principal trading at the Exchange.\5\ In connection with those 
amendments, the Exchange implemented NYSE Rule 92(c)(3), which requires 
members to submit to a designated Exchange database a report of the 
execution of the facilitated order. That rule also requires members to 
submit to that same database sufficient information to provide an 
electronic link of the execution of the facilitated order to all of the 
underlying orders.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 56017 (July 5, 
2007), 72 FR 38110 (July 12, 2007) (SR-NYSE-2007-21).
---------------------------------------------------------------------------

    For purposes of NYSE Rule 92(c)(3), the Exchange requires that when 
executing riskless principal transactions, firms must submit order 
execution reports to the Exchange's Front End Systemic Capture 
(``FESC'') database linking the execution of the riskless principal 
order on the Exchange to the specific underlying orders. The 
information provided must be sufficient for both member firms and the 
Exchange to reconstruct in a time-sequenced manner all orders, 
including allocations to the underlying orders, with respect to which a 
member organization is claiming the riskless principal exception.
    Because the rule change required member organizations to make 
certain changes to their trading and order management systems, the 
Commission approved a delay to January 16, 2008 of the operative date 
of the NYSE Rule 92(c)(3) requirements, including submitting end-of-day 
allocation reports for riskless principal transactions and using the 
riskless principal account type indicator.
    The Exchange has been working diligently to develop its FESC 
database to accept riskless principal order types and the underlying 
batch orders. On October 12, 2007, the Exchange published an 
Information Memo that provided member organizations with information 
relating to the FESC technology interface and data requirements for 
riskless principal trading at the Exchange. The development of the 
systems, however, has taken longer than anticipated, which could affect 
the ability of member organizations to meet the operative date. Several 
member organizations have informed the Exchange that they need 
additional time to program their respective systems to meet the new 
FESC requirements.
    To accommodate both the Exchange's and the member organization 
community's need to complete the development of the FESC technology to 
both accept and route riskless principal orders, the Exchange proposes 
to delay the operative date for NYSE Rule 92(c)(3) from January 16, 
2008 to May 14, 2008.
    Pending implementation of the FESC database and use of the riskless 
principal account type indicator, the Exchange will continue to require 
that,

[[Page 72433]]

as of the date each member organization implements riskless principal 
routing, the member organization have in place systems and controls 
that allow them to easily match and tie the riskless principal 
execution on the Exchange to the underlying orders and that they be 
able to provide this information to the Exchange upon request.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under section 6(b)(5) \6\ 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.
---------------------------------------------------------------------------

    \6\ 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 \7\ and 
Rule 19b-4(f)(6) thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 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.
---------------------------------------------------------------------------

    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 (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2007-114 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-2007-114. 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, 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-2007-114 and should be submitted on or before January 10, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-24728 Filed 12-19-07; 8:45 am]
BILLING CODE 8011-01-P
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