Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to Post Only Orders, 16402-16403 [E8-6248]
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16402
Federal Register / Vol. 73, No. 60 / Thursday, March 27, 2008 / Notices
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant parts of such
statements.
SECURITIES AND EXCHANGE
COMMISSION
Release No. 34–57538; File No. SR–NSX–
2008–07]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change Relating to
Post Only Orders
March 20, 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 March 17,
2008, the National Stock Exchange, Inc.
(‘‘NSX’’ or ‘‘Exchange’’) 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
substantially prepared by the Exchange.
The Exchange has designated this
proposal as one effecting a change in an
existing order-entry system of a selfregulatory organization under Section
19(b)(3)(A)(iii) of the Act,3 and Rule
19b–4(f)(5) thereunder,4 which renders
the proposal immediately effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comment on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to clarify
that a Post Only Order will be rejected
without execution if it is immediately
marketable against round-lot orders
when entered. The Exchange will
permit a Post Only Order to post if oddlot orders are the only marketable orders
in the book.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nsx.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
pwalker on PROD1PC71 with NOTICES
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 and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(5).
2 17
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1. Purpose
A Post Only Order is an order
designed to encourage displayed
liquidity on the Exchange. By its terms,
a Post Only Order is posted on the
Exchange and does not route away to
another trading center. Currently, a Post
Only Order is rejected by the Exchange
if the order is immediately marketable
against any order on the Exchange, even
if the order is an odd-lot order.5 The
Exchange intends to change the
operation of Post Only Orders so that
such orders are rejected only if there are
marketable round-lot orders in the book,
resulting in Post Only Orders being
posted when an odd lot order is the only
marketable order in the book. In this
way, the Exchange will enhance
liquidity on the Exchange by permitting
greater ability for the Post Only Order to
be posted in the book.
NSX Rule 11.11(c)(5)(A) states that
the ‘‘Post Only Order that is not a Zero
Display Reserve Order will be rejected
without execution if it is immediately
marketable when entered.’’ To clarify
this Rule, the Exchange is now
amending the language to make clear
that Post Only Orders will be rejected
only if there are marketable round-lot
orders in the book.6 Orders marked Post
Only will always be considered
‘‘liquidity providing’’ by the Exchange
for purposes of application of the
Exchange’s fees and rebate programs. By
making a Post Only designation, ETP
Holders are able to avoid the risk that
their orders will be considered
‘‘liquidity taking’’ for purposes of
application of the Exchange’s fees and
rebate programs.
The Exchange’s clarification of Rule
11.11(c)(5) is consistent with Regulation
NMS. Only round-lot orders are subject
to the requirements of Regulation NMS
in that only round-lot orders must be
included in the Exchange’s automated
quote.7 In contrast, odd-lot orders are
5 In SR–NSX–2008–03, the Exchange adopted a
new Zero Display Reserve Order type and changed
the rule text to state that Post Only Orders that are
not Zero Display Reserve Orders will be rejected
without execution if immediately marketable. See
Securities Exchange Act Release No. 57311
(February 12, 2008), 73 FR 9148 (February 19,
2008). The Zero Display Reserve Order type will
commence trading in April 2008.
6 The Exchange notes that odd lot orders are
aggregated where possible to form round lots.
7 Under Regulation NMS, Rule 600(b)(8) defines
‘‘bid’’ or ‘‘offer’’ as the bid price or offer price for
one or more round lots of an NMS security. This
definition is embedded in the definition of
‘‘quotation’’ in Rule 600(b)(62), as well as the
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Frm 00158
Fmt 4703
Sfmt 4703
not displayed, and the prohibitions
against both locked and crossed markets
and trade-throughs do not apply to oddlots. Exchanges are permitted to
establish their own rules for handling
odd-lot orders and the odd-lot portions
of mixed-lot orders.8
The Exchange believes that this
clarification to the Post Only Order will
enhance the use of Post Only Orders.
Further, allowing Post Only Orders
greater opportunities to post in the book
will increase the displayed liquidity in
the Exchange.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
the provisions of Section 6(b) of the
Act 9 in general, and Section 6(b)(5) of
the Act,10 in particular, which requires,
among other things, that the rules of an
exchange be designed to promote just
and equitable principles of trade, to
foster cooperation and coordination
with persons engaged in regulating,
clearing, settling, processing
information with respect to, and
facilitating transactions in securities, 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 inappropriate burden on
competition.
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 foregoing proposed rule change is
filed pursuant to Section 19(b)(3)(A)(iii)
of the Act 11 and subparagraph (f)(5) of
Rule 19b–4 thereunder 12 because it
effects a change in an existing orderentry system of a self-regulatory
definition of ‘‘protected bid’’ or ‘‘protected offer’’ in
Rule 600(b)(57). 17 CFR 242.600(b).
8 See Response No. 7.03 in ‘‘Responses to
Frequently Asked Questions Concerning Rule 611
and Rule 610 of Regulation NMS,’’ Division of
Trading and Markets, dated June 8, 2007.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
11 15 U.S.C. 78s(b)(3)(A)(iii).
12 17 CFR 240.19b–4(f)(5).
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Federal Register / Vol. 73, No. 60 / Thursday, March 27, 2008 / Notices
organization that: (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 have the
effect of limiting the access to or
availability of the system. The rule
change is simply a language clarification
of an existing NSX rule. Furthermore,
the rule change raises no novel issues
for the Commission and is consistent
with odd-lot order handling as
contemplated by Regulation NMS.
Accordingly, the proposal is effective
upon Commission receipt of the filing.
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:
pwalker on PROD1PC71 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–NSX–2008–07 on the
subject line.
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 such filing also will be available for
inspection and copying at the principal
office of the NSX. 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–NSX–
2008–07 and should be submitted on or
before April 17, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8–6248 Filed 3–26–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57542; File No. SR–DTC–
2007–11]
Self-Regulatory Organizations; The
Depository Trust Company; Order
Approving Proposed Rule Change, as
Modified by Amendment No. 1, To
Amend Its Operational Arrangements
as It Applies to Structured Securities
March 20, 2008.
I. Introduction
On September 7, 2007, The
Depository Trust Company (‘‘DTC’’)
Paper Comments
filed with the Securities and Exchange
• Send paper comments in triplicate
Commission (‘‘Commission’’) proposed
to Nancy Morris, Secretary, Securities
rule change SR–DTC–2007–11 pursuant
and Exchange Commission, 100 F
to Section 19(b)(1) of the Securities
Street, NE., Washington, DC 20549–
Exchange Act of 1934 (‘‘Act’’).1 The
1090.
proposed rule change was published for
All submissions should refer to File
comment in the Federal Register on
Number SR–NSX–2008–07. This file
November 26, 2007.2 The Commission
number should be included on the
received four comments to the proposed
subject line if e-mail is used. To help the rule change.3 On December 14, 2007,
Commission process and review your
13 17 CFR 200.30–3(a)(12).
comments more efficiently, please use
1 15 U.S.C. 78s(b)(1).
only one method. The Commission will
2 Securities Exchange Act Release No. 56795
post all comments on the Commission’s
(November 15, 2007), 72 FR 66009.
Internet Web site (https://www.sec.gov/
3 Simon Griffiths, Vice President, JP Morgan
rules/sro.shtml). Copies of the
(December 10, 2007); Tom Migneron, Principal,
submission, all subsequent
Edward Jones (December 11, 2007); Dan W.
Schneider, Baker & McKenzie LLP, Counsel to the
amendments, all written statements
Association of Global Custodians, Chicago, Illinois
with respect to the proposed rule
(December 12, 2007); Norman Eaker, Chairman,
change that are filed with the
Securities Industry and Financial Markets
Commission, and all written
Association, Operations Committee, Gussie Tate,
President, Securities Industry and Financial
communications relating to the
Markets Association, Dividend Division, and
proposed rule change between the
Chairman, Securities
Commission and any person, other than Thomas Hamilton, ViceMarkets Association, MBS
Industry and Financial
those that may be withheld from the
and Securitized Products Division Executive
Committee (December 19, 2007).
public in accordance with the
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16403
DTC filed Amendment No. 1 to the
proposed rule change.4 The proposed
rule change, as Modified by
Amendment No. 1, was published for
comment in the Federal Register.5 The
Commission received one comment to
Amendment No. 1.6 For the reasons
discussed below, the Commission is
approving the proposed rule change, as
amended.
II. Description
DTC’s Operational Arrangements is a
contractual agreement between DTC,
issuers, and paying agents that outlines
the procedural and operational
requirements for an issue to become and
remain DTC eligible. The proposed rule
change amends DTC’s ‘‘Operational
Arrangements Necessary for an Issue to
Become and Remain Eligible for DTC
Services’’ (‘‘Operational Arrangements’’)
as it applies to Structured Securities in
order to: extend the deadline by which
paying agents of such securities must
submit periodic payment rate
information to DTC; establish
Structured Securities classifications;
establish an exception processing fee
applied to certain Structured Securities
whose features prevent paying agents
from complying with the extended
deadline; and provide that DTC track
and make publicly available reports on
paying agent performance as it relates to
timeliness and accuracy of Structured
Securities payment rate information
submitted to DTC.
A Structured Security, such as a
collateralized mortgage obligation or
asset-backed security, is a bond backed
by a pool of underlying financial assets.
The underlying assets generally consist
of receivables such as mortgages, credit
card receivables, or student or other
bank loans for which the timing of
principal payments by the underlying
obligors may be variable and
unpredictable. A Structured Security
may also incorporate credit
enhancements or other rights that affect
the amount and timing of payments to
investors.
Communication of periodic payment
rates of principal and interest (‘‘P&I’’) to
the end investors in Structured
Securities depends on application of
4 As explained below, Amendment No. 1 replaced
and superseded the original filing in its entirety.
Amendment No. 1 removed reference to the
imposition of a processing fee on January 1, 2008,
and corrected the identity of the party that will
identify an issue as conforming or non-conforming
and will submit a written attestation giving the
reason for non-conformance.
5 Securities Exchange Act Release No. 57283
(February 6, 2008), 73 FR 8384.
6 Carol A. Jameson, Vice President and Senior
Counsel, The Depository Trust Company (March 5,
2008).
E:\FR\FM\27MRN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 60 (Thursday, March 27, 2008)]
[Notices]
[Pages 16402-16403]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-6248]
[[Page 16402]]
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SECURITIES AND EXCHANGE COMMISSION
Release No. 34-57538; File No. SR-NSX-2008-07]
Self-Regulatory Organizations; National Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating to Post Only Orders
March 20, 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 March 17, 2008, the National Stock Exchange, Inc. (``NSX'' or
``Exchange'') 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 substantially prepared by the
Exchange. The Exchange has designated this proposal as one effecting a
change in an existing order-entry system of a self-regulatory
organization under Section 19(b)(3)(A)(iii) of the Act,\3\ and Rule
19b-4(f)(5) thereunder,\4\ which renders the proposal immediately
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comment 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)(iii).
\4\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to clarify that a Post Only Order will be
rejected without execution if it is immediately marketable against
round-lot orders when entered. The Exchange will permit a Post Only
Order to post if odd-lot orders are the only marketable orders in the
book.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nsx.com, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on 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 parts of such
statements.
1. Purpose
A Post Only Order is an order designed to encourage displayed
liquidity on the Exchange. By its terms, a Post Only Order is posted on
the Exchange and does not route away to another trading center.
Currently, a Post Only Order is rejected by the Exchange if the order
is immediately marketable against any order on the Exchange, even if
the order is an odd-lot order.\5\ The Exchange intends to change the
operation of Post Only Orders so that such orders are rejected only if
there are marketable round-lot orders in the book, resulting in Post
Only Orders being posted when an odd lot order is the only marketable
order in the book. In this way, the Exchange will enhance liquidity on
the Exchange by permitting greater ability for the Post Only Order to
be posted in the book.
---------------------------------------------------------------------------
\5\ In SR-NSX-2008-03, the Exchange adopted a new Zero Display
Reserve Order type and changed the rule text to state that Post Only
Orders that are not Zero Display Reserve Orders will be rejected
without execution if immediately marketable. See Securities Exchange
Act Release No. 57311 (February 12, 2008), 73 FR 9148 (February 19,
2008). The Zero Display Reserve Order type will commence trading in
April 2008.
---------------------------------------------------------------------------
NSX Rule 11.11(c)(5)(A) states that the ``Post Only Order that is
not a Zero Display Reserve Order will be rejected without execution if
it is immediately marketable when entered.'' To clarify this Rule, the
Exchange is now amending the language to make clear that Post Only
Orders will be rejected only if there are marketable round-lot orders
in the book.\6\ Orders marked Post Only will always be considered
``liquidity providing'' by the Exchange for purposes of application of
the Exchange's fees and rebate programs. By making a Post Only
designation, ETP Holders are able to avoid the risk that their orders
will be considered ``liquidity taking'' for purposes of application of
the Exchange's fees and rebate programs.
The Exchange's clarification of Rule 11.11(c)(5) is consistent with
Regulation NMS. Only round-lot orders are subject to the requirements
of Regulation NMS in that only round-lot orders must be included in the
Exchange's automated quote.\7\ In contrast, odd-lot orders are not
displayed, and the prohibitions against both locked and crossed markets
and trade-throughs do not apply to odd-lots. Exchanges are permitted to
establish their own rules for handling odd-lot orders and the odd-lot
portions of mixed-lot orders.\8\
---------------------------------------------------------------------------
\6\ The Exchange notes that odd lot orders are aggregated where
possible to form round lots.
\7\ Under Regulation NMS, Rule 600(b)(8) defines ``bid'' or
``offer'' as the bid price or offer price for one or more round lots
of an NMS security. This definition is embedded in the definition of
``quotation'' in Rule 600(b)(62), as well as the definition of
``protected bid'' or ``protected offer'' in Rule 600(b)(57). 17 CFR
242.600(b).
\8\ See Response No. 7.03 in ``Responses to Frequently Asked
Questions Concerning Rule 611 and Rule 610 of Regulation NMS,''
Division of Trading and Markets, dated June 8, 2007.
---------------------------------------------------------------------------
The Exchange believes that this clarification to the Post Only
Order will enhance the use of Post Only Orders. Further, allowing Post
Only Orders greater opportunities to post in the book will increase the
displayed liquidity in the Exchange.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of Section 6(b) of the Act \9\ in general, and
Section 6(b)(5) of the Act,\10\ in particular, which requires, among
other things, that the rules of an exchange be designed to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in regulating, clearing, settling,
processing information with respect to, and facilitating transactions
in securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system, and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b).
\10\ 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 inappropriate burden on competition.
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 foregoing proposed rule change is filed pursuant to Section
19(b)(3)(A)(iii) of the Act \11\ and subparagraph (f)(5) of Rule 19b-4
thereunder \12\ because it effects a change in an existing order-entry
system of a self-regulatory
[[Page 16403]]
organization that: (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 have the effect of limiting
the access to or availability of the system. The rule change is simply
a language clarification of an existing NSX rule. Furthermore, the rule
change raises no novel issues for the Commission and is consistent with
odd-lot order handling as contemplated by Regulation NMS. Accordingly,
the proposal is effective upon Commission receipt of the filing.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(5).
---------------------------------------------------------------------------
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 rule-comments@sec.gov. Please include
File Number SR-NSX-2008-07 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NSX-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, 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 NSX. 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-NSX-
2008-07 and should be submitted on or before April 17, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-6248 Filed 3-26-08; 8:45 am]
BILLING CODE 8011-01-P
