Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change Relating to Rule 6.87-Obvious Error, 1903-1904 [E8-255]

Download as PDF Federal Register / Vol. 73, No. 7 / Thursday, January 10, 2008 / Notices has requested that the Commission waive the 30-day operative delay set forth in Rule 19b–4(f)(6)(iii) under the Act 17 to ensure that the filing is effective and therefore does not delay the commencement of the offer or the closing of the Transactions. The parties to the Transactions expect all regulatory actions necessary for the closing of the Transactions to be completed prior to Borse Dubai commencing its offer for OMX shares. The Commission believes that the earlier operative date is consistent with the protection of investors and the public interest. Accordingly, the Commission designates the proposal to be operative upon filing with the Commission.18 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–2008–002 on the subject line. Paper Comments yshivers on PROD1PC62 with NOTICES • 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–2008–002. This file number should be included on the subject line if e-mail is used. To help 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 Commission notes that the Nasdaq Exchange has satisfied the five-day pre-filing notice requirement. 17 17 CFR 240.19b–4(f)(6)(iii). 18 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). VerDate Aug<31>2005 14:29 Jan 09, 2008 Jkt 214001 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 the Nasdaq 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– NASDAQ–2008–002 and should be submitted on or before January 31, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–187 Filed 1–9–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57103; File No. SR– NYSEArca–2007–115] Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting Approval of a Proposed Rule Change Relating to Rule 6.87—Obvious Error January 4, 2008. On November 8, 2007, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a proposed rule change to amend NYSE Arca Rule 6.87 governing obvious errors to revise the review procedure for contesting 19 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00042 Fmt 4703 Sfmt 4703 1903 decisions made pursuant to the rule. The proposed rule change was published for comment in the Federal Register on November 27, 2007.3 The Commission received no comment letters on the proposal. This order approves the proposed rule change. Currently, NYSE Arca Rule 6.87 provides that the Exchange will determine whether a transaction resulted from an ‘‘Obvious Error’’ 4 after it receives notification within the prescribed time frame. If the Exchange believes that an Obvious Error has occurred, the Exchange will adjust the price of the trade, with or without an adjustment penalty, or will nullify the trade, depending on the status of the parties to the trade. Currently, a party may appeal the Exchange’s decision to the Exchange’s Board of Directors (‘‘Board’’) pursuant to NYSE Arca Rule 10.14. The Exchange proposes to eliminate a party’s right to appeal to the Board and instead allow a party to appeal to an Obvious Error Panel (‘‘OE Panel’’). The OE Panel would be composed of the Exchange’s Chief Regulatory Officer (‘‘CRO’’), or a designee of the CRO,5 and representatives from two options trading permit firms (‘‘OTP Firms’’).6 One OE Panel representative would be from an OTP Firm directly engaged in market making activities and one OE Panel representative would be from an OTP Firm directly engaged in the handling of options orders for public customers. In addition, requests for an appeal would have to be made via facsimile or e-mail within thirty minutes after the party requesting the appeal is given notification of the initial determination. Thereafter, the OE Panel would review the information and may overturn or modify the action previously taken by the Exchange. Such determination by the OE Panel would be considered a final action by the Exchange on the matter at issue. All final determinations made by the OE Panel would be rendered, without prejudice, as to the rights of the parties to the transaction to submit their dispute to arbitration. The 3 Securities Exchange Act Release No. 56819 (November 19, 2007), 72 FR 66214. 4 ‘‘Obvious Error’’ is defined in NYSE Arca Rule 6.87(a)(1). 5 The Exchange represents that a designee of the CRO would be an employee of the Exchange, working closely with and reporting directly to, the CRO, such as one of the Directors of Options Regulation. 6 The Exchange proposes to designate at least ten OTP Firm representatives to be called upon to serve on the OE Panel. In no case would the OE Panel include a person related to a party to the trade in question. To the extent reasonably possible, the Exchange proposes to call upon the designated representatives to participate on an OE Panel on an equally frequent basis. E:\FR\FM\10JAN1.SGM 10JAN1 1904 Federal Register / Vol. 73, No. 7 / Thursday, January 10, 2008 / Notices yshivers on PROD1PC62 with NOTICES revised process is intended to provide for a quicker resolution of appeal requests than the Board process currently governed by Rule 10.14. Further, if the OE Panel upholds the Exchange’s decision made pursuant to Rule 6.87(a)(4) to nullify or adjust a trade, the Exchange would assess a $500.00 fee against the party or parties who initiated the request for appeal. The Exchange also proposes to amend Rule 10.14 to remove the reference to Rule 6.87 and amend Rule 6.87 to remove Commentary .02. The Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange 7 and, in particular, the requirements of section 6(b) of the Act 8 and the rules and regulations thereunder. Specifically, the Commission finds that the proposal is consistent with section 6(b)(5) of the Act,9 in that the proposal is designed to promote just and equitable principles of trade, foster cooperation and coordination with persons engaged in facilitating transactions in securities, and remove impediments and perfect the mechanisms of a free and open market and to protect investors and the public interest. The Commission considers that in most circumstances trades that are executed between parties should be honored. On rare occasions, the price of the executed trade indicates an ‘‘obvious error’’ may exist, suggesting that it is unrealistic to expect that the parties to the trade had come to a meeting of the minds regarding the terms of the transaction. In the Commission’s view, the determination of whether an ‘‘obvious error’’ has occurred and the process for reviewing such a determination should be based on specific and objective criteria and subject to specific and objective procedures. The Commission believes that the Exchange’s proposal to create the OE Panel to review obvious error determinations of the Exchange, and to eliminate Board review of such determinations, is appropriate. The Commission believes that the OE Panel’s review procedures are clear and objective and that the composition of the OE Panel is designed to be balanced and fair. 7 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 14:29 Jan 09, 2008 Jkt 214001 It is therefore ordered, pursuant to section 19(b)(2) of the Act,10 that the proposed rule change (SR–NYSEArca– 2007–115), as amended, is hereby approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–255 Filed 1–9–08; 8:45 am] BILLING CODE 8011–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #11142 and #11143] Massachusetts Disaster Number MA– 00012 SUMMARY: This is a notice of an Administrative declaration of a disaster for the Commonwealth of Massachusetts dated 12/27/2007. Incident: Apartment Fire. Incident Period: 12/14/2007. Effective Date: 12/27/2007. Physical Loan Application Deadline Date: 02/25/2008. Economic Injury (EIDL) Loan Application Deadline Date: 09/27/2008. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: Notice is hereby given that as a result of the Administrator’s disaster declaration, applications for disaster loans may be filed at the address listed above or other locally announced locations. The following areas have been determined to be adversely affected by the disaster: Primary Counties: Essex. Contiguous Counties: Massachusetts, Middlesex, Suffolk, New Hampshire, Hillsborough, Rockingham. The Interest Rates are: 10 15 11 17 PO 00000 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). Frm 00043 Fmt 4703 Sfmt 4703 Homeowners Without Credit Available Elsewhere .................. Businesses With Credit Available Elsewhere ................................. Businesses & Small Agricultural Cooperatives Without Credit Available Elsewhere .................. Other (Including Non-Profit Organizations) With Credit Available Elsewhere ................................. Businesses And Non-Profit Organizations Without Credit Available Elsewhere ......................... 2.937. 8.000. 4.000. 5.250. 4.000. The number assigned to this disaster for physical damage is 11142 5 and for economic injury is 11143 0. The States which received an EIDL Declaration # are: Massachusetts, New Hampshire. (Catalog of Federal Domestic Assistance Numbers 59002 and 59008) U.S. Small Business Administration. ACTION: Notice. AGENCY: Homeowners With Credit Available Elsewhere ......................... Percent Dated: December 27, 2007. Steven C. Preston, Administrator. [FR Doc. E8–283 Filed 1–9–08; 8:45 am] BILLING CODE 8025–01–P SMALL BUSINESS ADMINISTRATION [Disaster Declaration #11122 and #11123] Oregon Disaster Number OR–00023 U.S. Small Business Administration. ACTION: Amendment 4. AGENCY: SUMMARY: This is an amendment of the Presidential declaration of a major disaster for the State of Oregon (FEMA– 1733—DR), dated 12/09/2007. Incident: Severe Storms, Flooding, Landslides, And Mudslides. Incident Period: 12/01/2007 Through 12/17/2007. Effective Date: 12/21/2007. Physical Loan Application Deadline Date: 02/07/2008. EIDL Loan Application Deadline Date: 09/09/2008. ADDRESSES: Submit completed loan applications to: U.S. Small Business Administration, Processing And Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155. FOR FURTHER INFORMATION CONTACT: A. Escobar, Office of Disaster Assistance, U.S. Small Business Administration, 409 3rd Street, SW., Suite 6050, Washington, DC 20416. SUPPLEMENTARY INFORMATION: The notice Percent of the Presidential disaster declaration for the State of Oregon, dated 12/09/ 5.875. 2007 is hereby amended to include the following areas as adversely affected by the disaster: Primary Counties: Washington. E:\FR\FM\10JAN1.SGM 10JAN1

Agencies

[Federal Register Volume 73, Number 7 (Thursday, January 10, 2008)]
[Notices]
[Pages 1903-1904]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-255]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57103; File No. SR-NYSEArca-2007-115]


Self-Regulatory Organizations; NYSE Arca, Inc.; Order Granting 
Approval of a Proposed Rule Change Relating to Rule 6.87--Obvious Error

January 4, 2008.
    On November 8, 2007, NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend NYSE Arca Rule 6.87 governing obvious 
errors to revise the review procedure for contesting decisions made 
pursuant to the rule. The proposed rule change was published for 
comment in the Federal Register on November 27, 2007.\3\ The Commission 
received no comment letters on the proposal. This order approves the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 56819 (November 19, 
2007), 72 FR 66214.
---------------------------------------------------------------------------

    Currently, NYSE Arca Rule 6.87 provides that the Exchange will 
determine whether a transaction resulted from an ``Obvious Error'' \4\ 
after it receives notification within the prescribed time frame. If the 
Exchange believes that an Obvious Error has occurred, the Exchange will 
adjust the price of the trade, with or without an adjustment penalty, 
or will nullify the trade, depending on the status of the parties to 
the trade. Currently, a party may appeal the Exchange's decision to the 
Exchange's Board of Directors (``Board'') pursuant to NYSE Arca Rule 
10.14.
---------------------------------------------------------------------------

    \4\ ``Obvious Error'' is defined in NYSE Arca Rule 6.87(a)(1).
---------------------------------------------------------------------------

    The Exchange proposes to eliminate a party's right to appeal to the 
Board and instead allow a party to appeal to an Obvious Error Panel 
(``OE Panel''). The OE Panel would be composed of the Exchange's Chief 
Regulatory Officer (``CRO''), or a designee of the CRO,\5\ and 
representatives from two options trading permit firms (``OTP 
Firms'').\6\ One OE Panel representative would be from an OTP Firm 
directly engaged in market making activities and one OE Panel 
representative would be from an OTP Firm directly engaged in the 
handling of options orders for public customers.
---------------------------------------------------------------------------

    \5\ The Exchange represents that a designee of the CRO would be 
an employee of the Exchange, working closely with and reporting 
directly to, the CRO, such as one of the Directors of Options 
Regulation.
    \6\ The Exchange proposes to designate at least ten OTP Firm 
representatives to be called upon to serve on the OE Panel. In no 
case would the OE Panel include a person related to a party to the 
trade in question. To the extent reasonably possible, the Exchange 
proposes to call upon the designated representatives to participate 
on an OE Panel on an equally frequent basis.
---------------------------------------------------------------------------

    In addition, requests for an appeal would have to be made via 
facsimile or e-mail within thirty minutes after the party requesting 
the appeal is given notification of the initial determination. 
Thereafter, the OE Panel would review the information and may overturn 
or modify the action previously taken by the Exchange. Such 
determination by the OE Panel would be considered a final action by the 
Exchange on the matter at issue. All final determinations made by the 
OE Panel would be rendered, without prejudice, as to the rights of the 
parties to the transaction to submit their dispute to arbitration. The

[[Page 1904]]

revised process is intended to provide for a quicker resolution of 
appeal requests than the Board process currently governed by Rule 
10.14.
    Further, if the OE Panel upholds the Exchange's decision made 
pursuant to Rule 6.87(a)(4) to nullify or adjust a trade, the Exchange 
would assess a $500.00 fee against the party or parties who initiated 
the request for appeal.
    The Exchange also proposes to amend Rule 10.14 to remove the 
reference to Rule 6.87 and amend Rule 6.87 to remove Commentary .02.
    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange \7\ and, in 
particular, the requirements of section 6(b) of the Act \8\ and the 
rules and regulations thereunder. Specifically, the Commission finds 
that the proposal is consistent with section 6(b)(5) of the Act,\9\ in 
that the proposal is designed to promote just and equitable principles 
of trade, foster cooperation and coordination with persons engaged in 
facilitating transactions in securities, and remove impediments and 
perfect the mechanisms of a free and open market and to protect 
investors and the public interest.
---------------------------------------------------------------------------

    \7\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Commission considers that in most circumstances trades that are 
executed between parties should be honored. On rare occasions, the 
price of the executed trade indicates an ``obvious error'' may exist, 
suggesting that it is unrealistic to expect that the parties to the 
trade had come to a meeting of the minds regarding the terms of the 
transaction. In the Commission's view, the determination of whether an 
``obvious error'' has occurred and the process for reviewing such a 
determination should be based on specific and objective criteria and 
subject to specific and objective procedures.
    The Commission believes that the Exchange's proposal to create the 
OE Panel to review obvious error determinations of the Exchange, and to 
eliminate Board review of such determinations, is appropriate. The 
Commission believes that the OE Panel's review procedures are clear and 
objective and that the composition of the OE Panel is designed to be 
balanced and fair.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-NYSEArca-2007-115), as 
amended, is hereby approved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-255 Filed 1-9-08; 8:45 am]
BILLING CODE 8011-01-P
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