Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of Crossing Sessions III and IV Pilots, 6540-6542 [E8-1879]
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Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices
in light of the costs incurred by the
Exchange for the operation of the
MatchPoint system. Additionally, the
transaction fee is equitable as the fee is
applied to all users of the MatchPoint
system equally.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NYSE does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purpose of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
Written comments were neither
solicited nor received.
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)
of the Act 11 and Rule 19b–4(f)(2) 12
thereunder because it establishes a due,
fee, or other charge applicable to a
member imposed by NYSE. At any time
within 60 days of the filing of such
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:
ebenthall on PRODPC61 with NOTICES
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–2008–06 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–2008–06. 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 the NYSE. 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–2008–06 and should
be submitted on or before February 25,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Nancy M. Morris,
Secretary.
[FR Doc. E8–1878 Filed 2–1–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57213; File No. SR–
NYSE–2008–07]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to the
Extension of Crossing Sessions III and
IV Pilots
January 28, 2008.
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 January
22, 2008, the New York Stock Exchange
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
U.S.C. 78s(b)(3)(A).
12 17 CFR 240.19b–4(f)(2).
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15:15 Feb 01, 2008
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I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The NYSE proposes to extend until
February 1, 2009 the following pilot
programs: Crossing Session III, for the
execution of guaranteed price coupled
orders by member organizations to fill
the balance of customer orders at a price
that was guaranteed to a customer prior
to the close of the Exchange’s 9:30 a.m.
to 4 p.m. trading session; and Crossing
Session IV, whereby an unfilled balance
of an order may be filled at a price such
that the entire order is filled at no worse
price than the Volume Weighted
Average Price (‘‘VWAP’’) for the subject
security.
The text of the proposed rule change
is available on the NYSE’s Web site
(https://www.nyse.com), at the NYSE’s
Office of Secretary, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
NYSE 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
In SR–NYSE–2002–40,5 the
Commission approved the
establishment of two new crossing
sessions (Crossing Sessions III and IV)
in the Exchange’s Off-Hours Trading
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 48857
(December 1, 2003), 68 FR 68440 (December 8,
2003) (SR–NYSE–2002–40).
4 17
13 17
11 15
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 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 solicit
comments on the proposed rule change
from interested persons.
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Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices
Facility (‘‘OHTF’’) as a pilot program
(‘‘Pilot’’), expiring on December 1, 2004.
In SR–NYSE–2005–01,6 the Commission
approved an extension of the Pilot to
February 1, 2006. In SR–NYSE–2006–
02,7 the Commission approved an
extension of the Pilot to February 1,
2007. In SR–NYSE–2007–07 8 the
Commission approved an extension of
the Pilot to February 1, 2008.
This filing seeks to extend the Pilot
until February 1, 2009. Crossing
Sessions III and IV are described below.
Background
The purpose of the original proposed
rule change was to add two additional
‘‘Crossing Sessions’’ (Crossing Sessions
III and IV) to the Exchange’s OHTF.
Before the proposed rule change, the
OHTF consisted of Crossing Sessions I
and II. Crossing Session I permits the
execution, at the Exchange’s closing
price, of single-stock, single-sided
closing price orders and crosses of
single-stock, and closing price buy and
sell orders. Crossing Session II permits
the execution of crosses of multiplestock (‘‘basket’’) aggregate-priced buy
and sell orders. For Crossing Session II,
trade reporting is accomplished by
reporting to the Consolidated Tape the
total number of shares and the total
market value of the aggregate-price
trades. There is no indication of the
individual component stocks involved
in the aggregate-price transactions.
Crossing Session III
The Exchange is proposing to extend
until February 1, 2009, the Pilot in
Crossing Session III. Crossing Session III
is described in Exchange Rule 907. This
Pilot would continue to allow for the
execution on the NYSE of ‘‘guaranteed
price coupled orders’’ whereby member
organizations could fill the unfilled
balance of a customer order at a price
which was guaranteed to the customer
prior to the close of the Exchange’s 9:30
a.m. to 4 p.m. trading session.
Member firms, in serving their
institutional customers, may offer them
a guarantee that a large size order will
receive no worse than a particular price.
Such a practice is usually referred to as
an ‘‘upstairs stop,’’ meaning that the
firm guarantees that its customer’s order
will be executed at no worse price than
the agreed-upon, guaranteed price, with
ebenthall on PRODPC61 with NOTICES
6 See
Securities Exchange Act Release No. 51091
(January 28, 2005), 70 FR 6484 (February 7, 2005)
(SR–NYSE–2005–01).
7 See Securities Exchange Act Release No. 53275
(February 13, 2006), 71 FR 8626 (February 17, 2006)
(SR–NYSE–2006–02).
8 See Securities Exchange Act Release No. 55281
(February 12, 2007), 72 FR 7804 (February 20, 2007)
(SR–NYSE–2007–07).
VerDate Aug<31>2005
15:15 Feb 01, 2008
Jkt 214001
6541
the member firm trading for its own
account, if necessary, to effectuate the
guarantee.
Typically, a member firm will seek to
execute as much of the order as possible
during the trading day at or below the
‘‘stop’’ price (in the case of a buy order)
or at or above the ‘‘stop’’ price (in the
case of a sell order). Any portion of the
order not filled during the trading day
will be completed after hours, with the
firm either buying from, or selling to, its
customer at a price which ensures that
the entire order is executed at a price
which is no worse than the ‘‘stop’’ price.
Member firms typically execute the
unfilled balance of the order, after the
U.S. Consolidated Tape is closed, in the
London over-the-counter market, where
trades are not reported in real time. The
purpose of this is simply to minimize
the possibility that other market
participants may ascertain the firm’s, or
the customer’s inventory position, and
possibly trade in the subject security to
the detriment of the firm that granted
the ‘‘upstairs stop.’’ The Exchange
believes that it is more transparent to
print the trade in the NYSE primary
market during U.S. Consolidated Tape
hours.
Crossing Session III or Crossing Session
IV may be of any size;
(v) The customer’s order must be
executed in Crossing Session III or
Crossing Session IV at a price that
ensures that the entire order is executed
at a price that is no worse than the
guaranteed price or the VWAP;
(vi) Orders may be entered in Crossing
Session III or Crossing Session IV
between 4 p.m. and 6:30 p.m., and must
be identified as either a Crossing
Session III or Crossing Session IV order;
(vii) Member firms will receive an
immediate report of execution upon
entering an order into Crossing Session
III or Crossing Session IV;
(viii) Orders may be entered into
Crossing Session III for execution at
prices outside the trading range in the
subject security during the 9:30 a.m. to
4 p.m. trading session;
(ix) Orders may not be entered into
Crossing Session III or Crossing Session
IV in a security that is subject to a
trading halt at the close of the regular
9:30 a.m. to 4 p.m. trading session; and
(x) At 6:30 p.m., the Exchange will
print trades reported through Crossing
Session III as guaranteed price coupled
orders or in Crossing Session IV as
VWAP executions.
Crossing Session IV
2. Statutory Basis
NYSE believes that the proposed rule
change is consistent with section 6 of
the Act 9 in general, and furthers the
objectives of section 6(b)(5) of the Act 10
in particular, in that it is 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.
The Exchange is also proposing to
extend the Pilot in Crossing Session IV
(which is also described in Exchange
Rule 907), until February 1, 2009.
Crossing Session IV is a facility whereby
member organizations may fill the
unfilled balance of a customer’s order at
a price such that the overall order is
filled at a price that is no worse than the
VWAP (the volume weighted average
price) for the subject security on that
trading day. The member organization
would be required to document its
VWAP agreement with the customer
and the basis upon which the VWAP
price would be determined.
Operation of Crossing Sessions
As described in NYSE Information
Memos 04–30 and 05–57 and Rule 907,
Crossing Sessions III and IV would
continue to operate as follows:
(i) The original order as to which an
‘‘upstairs stop’’ or ‘‘VWAP’’ has been
granted may be of any size;
(ii) The customer must have received
a ‘‘stop’’ (guaranteed price) or VWAP for
the entire order;
(iii) The member firm must record all
details of the order, including the price
it has guaranteed its customer or that
the entire order will be filled at no
worse than the VWAP;
(iv) An order or the unfilled balance
of an order that would be executed in
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Sfmt 4703
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
The Exchange has filed the proposed
rule change pursuant to section
9 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
10 15
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04FEN1
6542
Federal Register / Vol. 73, No. 23 / Monday, February 4, 2008 / Notices
19(b)(3)(A)(iii) of the Act 11 and Rule
19b–4(f)(6) thereunder.12 Because the
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
prior to 30 days from the date on which
it was filed, 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 and Rule 19b–4(f)(6)(iii)
thereunder.13
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),14 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. NYSE has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes the waiver
of this period will allow it to continue
the Pilots without undue delay, which
it believes is in the public interest as it
will avoid inconvenience and
interruption to the public. The
Commission believes such waiver is
consistent with the protection of
investors and the public interest
because it presents no new issues and
would allow the Pilots to operate
without interruption. For this reason,
the Commission designates the proposal
to be operative upon filing with the
Commission.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.
11 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
13 Rule 19b–4(f)(6) also requires the Exchange 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 pre-filing requirement.
14 17 CFR 240.19b–4(f)(6)(iii).
15 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).
ebenthall on PRODPC61 with NOTICES
12 17
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15:15 Feb 01, 2008
Jkt 214001
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
Trading and Markets, pursuant to delegated
authority.16
Nancy M. Morris,
Secretary.
[FR Doc. E8–1879 Filed 2–1–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2008–07 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.
[Release No. 34–57219; File No. SR–
NYSEArca–2008–13]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating To Listing
Standards for Index-Linked
Exchangeable Notes in NYSE Arca
Equities Rule 5.2(j)(4)
January 29, 2008.
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 January
22, 2008, NYSE Arca, Inc. (‘‘NYSE
All submissions should refer to File
Arca’’ or ‘‘Exchange’’), through its
Number SR–NYSE–2008–07. This file
wholly-owned subsidiary NYSE Arca
number should be included on the
subject line if e-mail is used. To help the Equities, Inc. (‘‘NYSE Arca Equities’’),
filed with the Securities and Exchange
Commission process and review your
Commission (‘‘Commission’’) the
comments more efficiently, please use
only one method. The Commission will proposed rule change as described in
post all comments on the Commission’s Items I, II, and III below, which Items
have been substantially prepared by the
Internet Web site (https://www.sec.gov/
Exchange. The Exchange filed the
rules/sro/shtml). Copies of the
proposal pursuant to section 19(b)(3)(A)
submission, all subsequent
of the Act 3 and Rule 19b–4(f)(6)
amendments, all written statements
thereunder,4 which renders the proposal
with respect to the proposed rule
effective upon filing with the
change that are filed with the
Commission. The Commission is
Commission, and all written
publishing this notice to solicit
communications relating to the
comments on the proposed rule change
proposed rule change between the
from interested persons.
Commission and any person, other than
I. Self-Regulatory Organization’s
those that may be withheld from the
Statement of the Terms of Substance of
public in accordance with the
the Proposed Rule Change
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
The Exchange proposes to amend its
the Commission’s Public Reference
rules governing NYSE Arca, LLC (also
referred to as the ‘‘NYSE Arca
Room, 100 F Street, NE., Washington,
Marketplace’’), which is the equities
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m. trading facility of NYSE Arca Equities.
More specifically, the Exchange
Copies of such filing will also be
proposes to amend NYSE Arca Equities
available for inspection and copying at
Rule 5.2(j)(4), the Exchange’s initial
the principal office of the NYSE. All
listing standards for ‘‘Index-Linked
comments received will be posted
Exchangeable Notes.’’ The text of the
without change; the Commission does
proposed rule change is available at the
not edit personal identifying
Exchange, the Commission’s Public
information from submissions. You
Reference Room, and https://
should submit only information that
www.nyse.com.
you wish to make available publicly. All
submissions should refer to File number
16 17 CFR 200.30–3(a)(12).
SR–NYSE–2008–07 and should be
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
submitted on or before February 25,
3 15 U.S.C. 78s(b)(3)(A).
2008.
PO 00000
4 17
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CFR 240.19b–4(f)(6).
04FEN1
]]>Agencies
[Federal Register Volume 73, Number 23 (Monday, February 4, 2008)]
[Notices]
[Pages 6540-6542]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-1879]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57213; File No. SR-NYSE-2008-07]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to the Extension of Crossing Sessions III and IV Pilots
January 28, 2008.
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 January 22, 2008, 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 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 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 NYSE proposes to extend until February 1, 2009 the following
pilot programs: Crossing Session III, for the execution of guaranteed
price coupled orders by member organizations to fill the balance of
customer orders at a price that was guaranteed to a customer prior to
the close of the Exchange's 9:30 a.m. to 4 p.m. trading session; and
Crossing Session IV, whereby an unfilled balance of an order may be
filled at a price such that the entire order is filled at no worse
price than the Volume Weighted Average Price (``VWAP'') for the subject
security.
The text of the proposed rule change is available on the NYSE's Web
site (https://www.nyse.com), at the NYSE's Office of Secretary, and at
the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the NYSE 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
In SR-NYSE-2002-40,\5\ the Commission approved the establishment of
two new crossing sessions (Crossing Sessions III and IV) in the
Exchange's Off-Hours Trading
[[Page 6541]]
Facility (``OHTF'') as a pilot program (``Pilot''), expiring on
December 1, 2004. In SR-NYSE-2005-01,\6\ the Commission approved an
extension of the Pilot to February 1, 2006. In SR-NYSE-2006-02,\7\ the
Commission approved an extension of the Pilot to February 1, 2007. In
SR-NYSE-2007-07 \8\ the Commission approved an extension of the Pilot
to February 1, 2008.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 48857 (December 1,
2003), 68 FR 68440 (December 8, 2003) (SR-NYSE-2002-40).
\6\ See Securities Exchange Act Release No. 51091 (January 28,
2005), 70 FR 6484 (February 7, 2005) (SR-NYSE-2005-01).
\7\ See Securities Exchange Act Release No. 53275 (February 13,
2006), 71 FR 8626 (February 17, 2006) (SR-NYSE-2006-02).
\8\ See Securities Exchange Act Release No. 55281 (February 12,
2007), 72 FR 7804 (February 20, 2007) (SR-NYSE-2007-07).
---------------------------------------------------------------------------
This filing seeks to extend the Pilot until February 1, 2009.
Crossing Sessions III and IV are described below.
Background
The purpose of the original proposed rule change was to add two
additional ``Crossing Sessions'' (Crossing Sessions III and IV) to the
Exchange's OHTF. Before the proposed rule change, the OHTF consisted of
Crossing Sessions I and II. Crossing Session I permits the execution,
at the Exchange's closing price, of single-stock, single-sided closing
price orders and crosses of single-stock, and closing price buy and
sell orders. Crossing Session II permits the execution of crosses of
multiple-stock (``basket'') aggregate-priced buy and sell orders. For
Crossing Session II, trade reporting is accomplished by reporting to
the Consolidated Tape the total number of shares and the total market
value of the aggregate-price trades. There is no indication of the
individual component stocks involved in the aggregate-price
transactions.
Crossing Session III
The Exchange is proposing to extend until February 1, 2009, the
Pilot in Crossing Session III. Crossing Session III is described in
Exchange Rule 907. This Pilot would continue to allow for the execution
on the NYSE of ``guaranteed price coupled orders'' whereby member
organizations could fill the unfilled balance of a customer order at a
price which was guaranteed to the customer prior to the close of the
Exchange's 9:30 a.m. to 4 p.m. trading session.
Member firms, in serving their institutional customers, may offer
them a guarantee that a large size order will receive no worse than a
particular price. Such a practice is usually referred to as an
``upstairs stop,'' meaning that the firm guarantees that its customer's
order will be executed at no worse price than the agreed-upon,
guaranteed price, with the member firm trading for its own account, if
necessary, to effectuate the guarantee.
Typically, a member firm will seek to execute as much of the order
as possible during the trading day at or below the ``stop'' price (in
the case of a buy order) or at or above the ``stop'' price (in the case
of a sell order). Any portion of the order not filled during the
trading day will be completed after hours, with the firm either buying
from, or selling to, its customer at a price which ensures that the
entire order is executed at a price which is no worse than the ``stop''
price.
Member firms typically execute the unfilled balance of the order,
after the U.S. Consolidated Tape is closed, in the London over-the-
counter market, where trades are not reported in real time. The purpose
of this is simply to minimize the possibility that other market
participants may ascertain the firm's, or the customer's inventory
position, and possibly trade in the subject security to the detriment
of the firm that granted the ``upstairs stop.'' The Exchange believes
that it is more transparent to print the trade in the NYSE primary
market during U.S. Consolidated Tape hours.
Crossing Session IV
The Exchange is also proposing to extend the Pilot in Crossing
Session IV (which is also described in Exchange Rule 907), until
February 1, 2009. Crossing Session IV is a facility whereby member
organizations may fill the unfilled balance of a customer's order at a
price such that the overall order is filled at a price that is no worse
than the VWAP (the volume weighted average price) for the subject
security on that trading day. The member organization would be required
to document its VWAP agreement with the customer and the basis upon
which the VWAP price would be determined.
Operation of Crossing Sessions
As described in NYSE Information Memos 04-30 and 05-57 and Rule
907, Crossing Sessions III and IV would continue to operate as follows:
(i) The original order as to which an ``upstairs stop'' or ``VWAP''
has been granted may be of any size;
(ii) The customer must have received a ``stop'' (guaranteed price)
or VWAP for the entire order;
(iii) The member firm must record all details of the order,
including the price it has guaranteed its customer or that the entire
order will be filled at no worse than the VWAP;
(iv) An order or the unfilled balance of an order that would be
executed in Crossing Session III or Crossing Session IV may be of any
size;
(v) The customer's order must be executed in Crossing Session III
or Crossing Session IV at a price that ensures that the entire order is
executed at a price that is no worse than the guaranteed price or the
VWAP;
(vi) Orders may be entered in Crossing Session III or Crossing
Session IV between 4 p.m. and 6:30 p.m., and must be identified as
either a Crossing Session III or Crossing Session IV order;
(vii) Member firms will receive an immediate report of execution
upon entering an order into Crossing Session III or Crossing Session
IV;
(viii) Orders may be entered into Crossing Session III for
execution at prices outside the trading range in the subject security
during the 9:30 a.m. to 4 p.m. trading session;
(ix) Orders may not be entered into Crossing Session III or
Crossing Session IV in a security that is subject to a trading halt at
the close of the regular 9:30 a.m. to 4 p.m. trading session; and
(x) At 6:30 p.m., the Exchange will print trades reported through
Crossing Session III as guaranteed price coupled orders or in Crossing
Session IV as VWAP executions.
2. Statutory Basis
NYSE believes that the proposed rule change is consistent with
section 6 of the Act \9\ in general, and furthers the objectives of
section 6(b)(5) of the Act \10\ in particular, in that it is 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.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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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
The Exchange has filed the proposed rule change pursuant to section
[[Page 6542]]
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
Because the 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 prior to
30 days from the date on which it was filed, 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 and Rule 19b-
4(f)(6)(iii) thereunder.\13\
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ Rule 19b-4(f)(6) also requires the Exchange 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 pre-filing requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.
However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission may
designate a shorter time if such action is consistent with the
protection of investors and the public interest. NYSE has asked the
Commission to waive the 30-day operative delay so that the proposal may
become operative immediately upon filing. The Exchange believes the
waiver of this period will allow it to continue the Pilots without
undue delay, which it believes is in the public interest as it will
avoid inconvenience and interruption to the public. The Commission
believes such waiver is consistent with the protection of investors and
the public interest because it presents no new issues and would allow
the Pilots to operate without interruption. For this reason, the
Commission designates the proposal to be operative upon filing with the
Commission.\15\
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\14\ 17 CFR 240.19b-4(f)(6)(iii).
\15\ 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).
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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 e-mail to rule-comments@sec.gov. Please include File
Number SR-NYSE-2008-07 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-2008-07. 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 will also be available for
inspection and copying at the principal office of the NYSE. 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-2008-07 and should be
submitted on or before February 25, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E8-1879 Filed 2-1-08; 8:45 am]
BILLING CODE 8011-01-P
