Self-Regulatory Organizations; New York Stock Exchange, LLC; Order Granting Approval of Proposed Rule Change Relating to Amendments to NYSE Rule 104.21 (“Specialist Organizations-Additional Capital Requirements”), 8098 [E8-2470]
Download as PDF
<![CDATA[
8098
Federal Register / Vol. 73, No. 29 / Tuesday, February 12, 2008 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–2523 Filed 2–11–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57272; File No. SR–NYSE–
2007–101]
Self-Regulatory Organizations; New
York Stock Exchange, LLC; Order
Granting Approval of Proposed Rule
Change Relating to Amendments to
NYSE Rule 104.21 (‘‘Specialist
Organizations—Additional Capital
Requirements’’)
February 5, 2008.
I. Introduction
On November 2, 2007, the New York
Stock Exchange LLC (‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (‘‘SEC’’ or
the ‘‘Commission’’), pursuant to section
19(b)(1) 1 of the Securities Exchange Act
of 1934 (‘‘Exchange Act’’) 2 and Rule
19b–4 thereunder,3 a proposal to amend
its Rule 104.21 regarding additional
capital requirements for specialist
organizations. The proposed rule change
was published for comment in the
Federal Register on December 28,
2007.4 The Commission received no
comments regarding the proposal. This
order approves the proposed rule
changes.
II. Description of the Proposal
mstockstill on PROD1PC66 with NOTICES
The proposed rule change would
reduce the total base capital
requirement that must be maintained as
net liquid assets for all specialists from
$1 billion to $250 million. NYSE
believes this amount will adequately
protect specialist organizations during
periods of market stress. Further, each
of the specialist organizations have
sources of funding that can provide
necessary liquidity during a period of
market stress. It is no longer necessary
for specialist organizations to maintain
the currently required levels of liquid
capital, as specialist positions and the
likelihood of losses have been reduced
dramatically due to changes in the
structure of the market.
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78(a) et seq.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 57000
(Dec. 20, 2007), 72 FR 73947.
1 15
VerDate Aug<31>2005
17:46 Feb 11, 2008
Jkt 214001
III. Discussion
After careful review and based on the
Exchange’s representations, the
Commission finds that the proposed
rule changes are consistent with the Act
and the rules and regulations applicable
to a national securities exchange.5 In
particular, the Commission finds that
the proposed rule changes are consistent
with section 6(b)(5) 6 which requires,
among other things, that the rules of a
national securities exchange be
designed to prevent fraudulent and
manipulative acts and practices, 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 Commission believes it is
consistent with the Act for the Exchange
to amend NYSE Rule 104.21 as
proposed, because the level of
participation by specialist firms in
trading on the Exchange has declined
with the proliferation of electronic
trading and the significant change in the
Exchange’s trading system introduced
by the Hybrid Market.7 The NYSE has
noted that the increased efficiency with
which others can access the Exchange’s
market has increased liquidity and
decreased the market’s reliance on the
specialist to provide the contra side in
a continuous auction. While the NYSE
considers specialist participation to still
be an important feature of its Hybrid
Market, it has documented a lower
participation by specialist organizations.
This decreased participation means that
specialists are assuming less risk.
The Commission notes that FINRA,
on behalf of NYSE, will continue to
assess the specialists’ net liquid asset
requirements in relation to the Hybrid
Market and monitor their net liquid
assets on a daily basis. NYSE and
FINRA require notification for all
5 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
6 15 U.S.C. 78f(b)(5).
7 See Release No. 34–53539 (March 22, 2006); 71
FR 16353 (March 31, 2006) File No. SR–NYSE–
2004–05) (approving amendments to NYSE Rules
(approving the proposed rule change to establish
the NYSE Hybrid Market). The rule change created
a ‘‘Hybrid Market’’ by, among other things,
increasing the availability of automatic executions
in its existing automatic execution facility, NYSE
Direct+, and providing a means for participation in
the expanded automated market by its floor
members. The change altered the way NYSE’s
market operates by allowing more orders to be
executed directly in Direct+, which in essence
moves NYSE from a floor-based auction market
with limited automation order interaction to a more
automated market with limited floor-based auction
market availability.
PO 00000
Frm 00069
Fmt 4703
Sfmt 4703
withdrawals of capital, and approval for
any withdrawal being made on less than
six months advance notice to the
Exchange.
IV. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,8 that the
proposed rule change (SR–NYSE–2007–
101), as amended, be, and hereby is,
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–2470 Filed 2–11–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57270; File No. SR–OCC–
2007–20]
Self-Regulatory Organizations; The
Options Clearing Corporation; Notice
of Filing of a Proposed Rule Change
Relating to the System for Theoretical
Analysis and Numerical Simulations
February 5, 2008.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
December 14, 2007, The Options
Clearing Corporation (‘‘OCC’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which items
have been prepared primarily by OCC.
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 proposed rule change would
permit the incorporation of certain
forms of securities deposited as margin
collateral into OCC’s System for
Theoretical Analysis and Numerical
Simulations (‘‘STANS’’) risk
management methodology.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
OCC included statements concerning
the purpose of and basis for the
8 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
9 17
E:\FR\FM\12FEN1.SGM
12FEN1
]]>Agencies
[Federal Register Volume 73, Number 29 (Tuesday, February 12, 2008)]
[Notices]
[Page 8098]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-2470]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57272; File No. SR-NYSE-2007-101]
Self-Regulatory Organizations; New York Stock Exchange, LLC;
Order Granting Approval of Proposed Rule Change Relating to Amendments
to NYSE Rule 104.21 (``Specialist Organizations--Additional Capital
Requirements'')
February 5, 2008.
I. Introduction
On November 2, 2007, the New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or the ``Commission''), pursuant to section 19(b)(1) \1\ of
the Securities Exchange Act of 1934 (``Exchange Act'') \2\ and Rule
19b-4 thereunder,\3\ a proposal to amend its Rule 104.21 regarding
additional capital requirements for specialist organizations. The
proposed rule change was published for comment in the Federal Register
on December 28, 2007.\4\ The Commission received no comments regarding
the proposal. This order approves the proposed rule changes.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78(a) et seq.
\3\ 17 CFR 240.19b-4.
\4\ See Securities Exchange Act Release No. 57000 (Dec. 20,
2007), 72 FR 73947.
---------------------------------------------------------------------------
II. Description of the Proposal
The proposed rule change would reduce the total base capital
requirement that must be maintained as net liquid assets for all
specialists from $1 billion to $250 million. NYSE believes this amount
will adequately protect specialist organizations during periods of
market stress. Further, each of the specialist organizations have
sources of funding that can provide necessary liquidity during a period
of market stress. It is no longer necessary for specialist
organizations to maintain the currently required levels of liquid
capital, as specialist positions and the likelihood of losses have been
reduced dramatically due to changes in the structure of the market.
III. Discussion
After careful review and based on the Exchange's representations,
the Commission finds that the proposed rule changes are consistent with
the Act and the rules and regulations applicable to a national
securities exchange.\5\ In particular, the Commission finds that the
proposed rule changes are consistent with section 6(b)(5) \6\ which
requires, among other things, that the rules of a national securities
exchange be designed to prevent fraudulent and manipulative acts and
practices, 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.
---------------------------------------------------------------------------
\5\ In approving this proposed rule change, the Commission notes
that it has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes it is consistent with the Act for the
Exchange to amend NYSE Rule 104.21 as proposed, because the level of
participation by specialist firms in trading on the Exchange has
declined with the proliferation of electronic trading and the
significant change in the Exchange's trading system introduced by the
Hybrid Market.\7\ The NYSE has noted that the increased efficiency with
which others can access the Exchange's market has increased liquidity
and decreased the market's reliance on the specialist to provide the
contra side in a continuous auction. While the NYSE considers
specialist participation to still be an important feature of its Hybrid
Market, it has documented a lower participation by specialist
organizations. This decreased participation means that specialists are
assuming less risk.
---------------------------------------------------------------------------
\7\ See Release No. 34-53539 (March 22, 2006); 71 FR 16353
(March 31, 2006) File No. SR-NYSE-2004-05) (approving amendments to
NYSE Rules (approving the proposed rule change to establish the NYSE
Hybrid Market). The rule change created a ``Hybrid Market'' by,
among other things, increasing the availability of automatic
executions in its existing automatic execution facility, NYSE
Direct+, and providing a means for participation in the expanded
automated market by its floor members. The change altered the way
NYSE's market operates by allowing more orders to be executed
directly in Direct+, which in essence moves NYSE from a floor-based
auction market with limited automation order interaction to a more
automated market with limited floor-based auction market
availability.
---------------------------------------------------------------------------
The Commission notes that FINRA, on behalf of NYSE, will continue
to assess the specialists' net liquid asset requirements in relation to
the Hybrid Market and monitor their net liquid assets on a daily basis.
NYSE and FINRA require notification for all withdrawals of capital, and
approval for any withdrawal being made on less than six months advance
notice to the Exchange.
IV. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-NYSE-2007-101), as amended,
be, and hereby is, approved.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(2).
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. E8-2470 Filed 2-11-08; 8:45 am]
BILLING CODE 8011-01-P
