Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to Expand the Reserve Order Pilot Program Currently Operating in 100 Securities Traded on the Exchange To Include All Equity Securities Traded on the Exchange, 27601-27603 [E8-10538]
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Federal Register / Vol. 73, No. 93 / Tuesday, May 13, 2008 / Notices
in Rule 3a51–1 under the Act.31 The
Commission finds that this proposal is
consistent with the requirements of the
Act.
E. Conclusion
Based on the above, the Commission
believes the proposed rule change is
reasonable and should provide for the
listing of SPACs with baseline investor
protection and other standards.32 The
Commission believes that, as discussed
above, NYSE has developed sufficient
standards to allow the listing of SPACs
on the NYSE, consistent with the
requirements set forth under the Act
and in particular, Section 6(b)(5).33
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,34 that the
proposed rule change (SR–NYSE–2008–
17) is hereby approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.35
Nancy M. Morris,
Secretary.
[FR Doc. E8–10537 Filed 5–12–08; 8:45 am]
rwilkins on PROD1PC63 with NOTICES
BILLING CODE 8010–01–P
31 See 17 CFR 240.3a51–1(a)(2)(i)(F). The
Commission notes that the NYSE is adopting a
minimum value for convertible debt so that
securities listed on the NYSE meet the exception
from the definition of penny stock in Rule 3a51–
1(a)(2). As noted in footnote 30, supra, securities
listed on the NYSE are included in the
‘‘grandfather’’ exception to the definition of penny
stock in Rule 3a51–1(a)(1) for securities registered
or listed ‘‘on a national securities exchange that has
been continuously registered as a national securities
exchange since April 20, 1992...and...has
maintained quantitative listing standards that are
substantially similar to or stricter than those listing
standards that were in place on that exchange on
January 8, 2004.’’ By adopting a listing standard for
SPACs, NYSE’s listing standards would no longer
be included in the ‘‘grandfather’’ exception.
32 The Commission notes that under the proposal,
the Exchange has the discretion to consider initial
listing of securities of SPACs that otherwise meet
NYSE’s listing standards, on a case-by-case basis,
and the Exchange has broad discretion to delist the
securities of SPACs at the time of the Business
Combination if the Exchange believes it is not in the
best interest of the Exchange and the public
interest.
33 15 U.S.C. 78s(b)(5). The staff of the Division of
Trading and Markets would not recommend
enforcement action to the Commission under Rules
15g–2 through 15g–9 under the Act if broker-dealers
treat equity securities listed pursuant to the initial
listing requirements set forth in the Manual as
meeting the exclusion from the definition of penny
stock contained in Rule 3a51–1 under the Act
pursuant to paragraph (a)(2) thereof.
34 15 U.S.C. 78s(b)(2).
35 17 CFR 200.30–3(a)(12).
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–57792; File No. SR–NYSE–
2008–36]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change to Expand the
Reserve Order Pilot Program Currently
Operating in 100 Securities Traded on
the Exchange To Include All Equity
Securities Traded on the Exchange
May 7, 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 May 6,
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 substantially prepared by the
Exchange. The Exchange has designated
the proposed rule change as a ‘‘noncontroversial’’ rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(6) thereunder,4 which renders
the proposed rule change effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing to expand
the Reserve Order pilot program
currently operating in 100 securities
traded on the NYSE 5 to include all
equity securities traded on the
Exchange. The text of the proposed rule
change is available at https://
www.nyse.com, the Exchange, and 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,
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 text of these statements
may be examined at the places specified
in Item IV below. NYSE has prepared
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 See Securities Exchange Act Release No. 57688
(April 18, 2008), 73 FR 22194 (April 24, 2008) (SR–
NYSE–2008–30) (‘‘Reserve Order Notice’’).
2 17
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27601
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
Through this proposed rule change,
the Exchange seeks to expand the
Reserve Order pilot program currently
operating pursuant to Exchange Rule 13.
On April 23, 2008, the Exchange
implemented a new order type that
allows off-Floor participants the ability
to enter reserve interest into Exchange
systems (‘‘Reserve Order’’).6
The Reserve Order is a limit order for
which a portion of the order is to be
displayed and a portion of the order, at
the same price, is not displayed (i.e., is
held in ‘‘reserve’’).7 Market participants
that choose to enter Reserve Orders
must enter specified order information
in relation to the price and size of the
order and the amount to be displayed.
The displayed portion of a Reserve
Order is published in NYSE
OpenBook 8 and is available to the
specialist on the Floor. Both the
displayed and the non-displayed
portion are available for automatic
execution against incoming contra-side
orders. Displayed and non-displayed
interest of Reserve Orders is available
for manual executions as well.9
To afford the Exchange and its
customers the ability to gain systemic
experience with the new Reserve Order
type, the Exchange implemented the
amendment to Exchange Rule 13
allowing off-Floor participants to enter
Reserve Orders on a pilot basis. The
pilot currently operates in 100 securities
traded on the Floor of the Exchange.
6 See
id.
Exchange represents that this functionality
is equivalent to the functionality currently available
to Floor brokers and specialists with respect to
entry of reserve interest. In order for Floor brokers’
reserve interest not to be visible by the specialists,
a Floor broker must designate his or her reserve
interest as ‘‘Do Not Display’’ interest. Reserve
Orders in contrast are never shown to the specialist
except when included in aggregate quantities for
manual executions.
8 NYSE OpenBook provides aggregate limit
order volume that has been entered on the
Exchange at price points for all NYSE-traded
securities.
9 See Reserve Order Notice, supra note 5, for a
detailed description of Reserve Orders and their
functionality; see also NYSE Information Memo No.
08–24 (April 22, 2008) (both documents are
available on the Exchange’s Web site at https://
www.nyse.com). The Exchange will issue a revised
Information Memo to the Floor providing notice of
the expansion of the Reserve Order pilot to include
all equity securities traded on the Exchange.
7 The
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Federal Register / Vol. 73, No. 93 / Tuesday, May 13, 2008 / Notices
Pilot Results and Expansion
The Exchange has determined that the
technology modifications that were
required to allow off-Floor participants
the ability to enter Reserve Orders are
operating successfully. The Exchange
states that, to date, there have been no
system problems associated with
Reserve Orders.
In addition, entry of Reserve Orders in
the securities approved to operate in the
pilot program has been steadily
increasing throughout the pilot period.
Moreover, Exchange customers continue
to request the ability to send Reserve
Orders in all securities traded on the
NYSE.
Given the customer demand and the
fact that no technological impediments
to the operation of Reserve Orders have
arisen, the Exchange now proposes to
expand the Reserve Order pilot program
operating pursuant to Exchange Rule 13
to all Exchange-traded equity
securities.10
Conclusion
The Exchange believes that by
providing all market participants with
the ability to maintain non-displayed
liquidity on the Display Book in all
equity securities traded on the
Exchange, market participants will be
encouraged to post liquidity and thus
offer Exchange customers additional
opportunities for price improvement by
expanding the interest available to
execute against incoming orders at a
single price.
rwilkins on PROD1PC63 with NOTICES
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 11 in general, and furthers the
objectives of Section 6(b)(5) of the Act 12
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
proposed rule change also is designed to
support the principles of Section
11A(a)(1) 13 in that it seeks to assure
economically efficient execution of
securities transactions, fair competition
10 The expansion of the pilot program to operate
in all equity securities traded on the Floor of the
Exchange does not change the expiration date of the
Reserve Order pilot established pursuant to the
Reserve Order Notice (supra note 5). The Reserve
Order pilot program is scheduled to expire no later
than the earlier of September 30, 2008 or the
effective date of Commission approval of a
proposed rule change to make the pilot program
permanent.
11 15 U.S.C. 78f(b).
12 15 U.S.C. 78f(b)(5).
13 15 U.S.C. 78k–1(a)(1).
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16:14 May 12, 2008
Jkt 214001
among brokers and dealers, among
exchange markets, and between
exchange markets and markets other
than exchange markets, and provide an
opportunity for investors’ orders to be
executed without the participation of a
dealer. The Exchange believes that the
instant proposal is in keeping with these
objectives in that extending Reserve
Order functionality will provide an
opportunity for all market participants
to receive efficient, low cost executions
available through the use of this order
type, and promote fair competition
among markets which already provide
for entry of Reserve Orders by all market
participants in all equity securities
traded on the Exchange.
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 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
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) of the Act 14 and
Rule 19b–4(f)(6) thereunder.15
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) 16 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
14 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires that a self-regulatory
organization submit to 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. NYSE has satisfied the pre-filing
notice requirement.
15 17
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Frm 00113
Fmt 4703
Sfmt 4703
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay set forth in Rule 19b–4(f)(6)(iii)
under the Act, which would make the
rule change operative upon filing.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because such waiver would
immediately allow off-Floor participants
to directly enter orders that use reserve
functionality for all equity securities
traded on the Exchange. The Exchange
represents that, to date, there have been
no system problems associated with the
Reserve Orders pilot program, and that
Exchange customers have requested the
ability to send Reserve Orders in all
securities traded on the Exchange.
Finally, the proposed reserve
functionality is currently available on
other exchanges.17 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–NYSE–2008–36 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.
17 See, e.g., Nasdaq Rule 4751(f)(2); Securities
Exchange Act Release No. 54155 (July 14, 2006), 71
FR 41291 (July 20, 2006) (SR–NASDAQ–2006–001).
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).
E:\FR\FM\13MYN1.SGM
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Federal Register / Vol. 73, No. 93 / Tuesday, May 13, 2008 / Notices
All submissions should refer to File
Number SR–NYSE–2008–36. 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–2008–36 and should
be submitted on or before June 3, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Nancy M. Morris,
Secretary.
[FR Doc. E8–10538 Filed 5–12–08; 8:45 am]
BILLING CODE 8010–01–P
[Release No. 34–57778; File No. SR–
NYSEArca–2008–45]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To List and Trade Shares
of the iShares MSCI Emerging Markets
Eastern Europe Index Fund
rwilkins on PROD1PC63 with NOTICES
May 5, 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 April 25,
2008, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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16:14 May 12, 2008
Jkt 214001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NYSE Arca proposes to list and trade
shares (‘‘Shares’’) of the iShares MSCI
Emerging Markets Eastern Europe Index
Fund (‘‘Fund’’). The text of the
proposed rule change is available at the
Exchange, the Commission’s Public
Reference Room, and https://
www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change 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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
SECURITIES AND EXCHANGE
COMMISSION
19 17
‘‘Exchange’’), through its wholly owned
subsidiary, NYSE Arca Equities, Inc.
(‘‘NYSE Arca Equities’’), filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by the Exchange.
NYSE Arca filed the proposal pursuant
to Section 19(b)(3)(A) of the Act 3 and
Rule 19b–4(f)(6) thereunder,4 which
renders the proposal effective upon
filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
1. Purpose
The Exchange proposes to list and
trade the Shares under NYSE Arca
Equities Rule 5.2(j)(3), the Exchange’s
listing standards for Investment
Company Units (‘‘ICUs’’).5 The
investment objective of the Fund is to
provide investment results that
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 An ICU is a security that represents an interest
in a registered investment company that holds
securities comprising, or otherwise based on or
representing an interest in, an index or portfolio of
securities (or holds securities in another registered
investment company that holds securities
comprising, or otherwise based on or representing
an interest in, an index or portfolio of securities).
See NYSE Arca Equities Rule 5.2(j)(3)(A).
4 17
PO 00000
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Fmt 4703
Sfmt 4703
27603
correspond generally to the price and
yield performance, before fees and
expenses, of the MSCI Emerging
Markets Eastern Europe Index (‘‘Index’’
or ‘‘Underlying Index’’). The Index is a
free float adjusted market capitalization
index designed to measure the equity
performance of companies domiciled in
four Eastern European emerging market
nations: The Czech Republic, Hungary,
Poland and Russia.
The Exchange is submitting this
proposed rule change because the
Underlying Index does not meet all of
the ‘‘generic’’ listing requirements of
Commentary .01(a)(B) to NYSE Arca
Equities Rule 5.2(j)(3) applicable to
listing of ICUs based on international or
global indexes. The Underlying Index
meets all such requirements except for
those set forth in Commentary
.01(a)(B)(3).6 Specifically, the
Underlying Index fails to meet the
requirement that the most heavily
weighted component stock shall not
exceed 25% of the weight of the index
or portfolio. As of April 2, 2008,
Gazprom (Russia) represented 27.28%
of the weight of the Underlying Index.
The Exchange represents that: (1)
Except for the requirement under
Commentary .01(a)(B)(3) to NYSE Arca
Equities Rule 5.2(j)(3) relating to the
most heavily weighted component
stock, the Shares of the Fund currently
satisfy all of the generic listing
standards under NYSE Arca Equities
Rule 5.2(j)(3); 7 (2) the continued listing
standards under NYSE Arca Equities
Rules 5.2(j)(3) and 5.5(g)(2) applicable to
ICUs shall apply to the Shares; and (3)
the Trust is required to comply with
Rule 10A–3 under the Act 8 for the
initial and continued listing of the
Shares. In addition, the Exchange
represents that the Shares will comply
with all other requirements applicable
to ICUs including, but not limited to,
requirements relating to the
dissemination of key information such
as the Index value and Intraday
Indicative Value, rules governing the
trading of equity securities, trading
hours, trading halts, surveillance, and
Information Bulletin to ETP Holders, as
set forth in prior Commission orders
approving the generic listing rules
6 Commentary .01(a)(B)(3) to NYSE Arca Equities
Rule 5.2(j)(3) provides that the most heavily
weighted component stock shall not exceed 25% of
the weight of the index or portfolio, and the five
most heavily weighted component stocks shall not
exceed 60% of the weight of the index or portfolio.
7 See e-mail dated May 5, 2008 from Michael
Cavalier, Associate General Counsel, NYSE
Euronext, to Christopher W. Chow, Special
Counsel, Commission.
8 17 CFR 240.10A–3.
E:\FR\FM\13MYN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 93 (Tuesday, May 13, 2008)]
[Notices]
[Pages 27601-27603]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-10538]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57792; File No. SR-NYSE-2008-36]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change to
Expand the Reserve Order Pilot Program Currently Operating in 100
Securities Traded on the Exchange To Include All Equity Securities
Traded on the Exchange
May 7, 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 May 6, 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 substantially prepared by the Exchange.
The Exchange has designated the proposed rule change as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) of the Act
\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed rule
change effective upon filing with the Commission. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is proposing to expand the Reserve Order pilot program
currently operating in 100 securities traded on the NYSE \5\ to include
all equity securities traded on the Exchange. The text of the proposed
rule change is available at https://www.nyse.com, the Exchange, and the
Commission's Public Reference Room.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 57688 (April 18,
2008), 73 FR 22194 (April 24, 2008) (SR-NYSE-2008-30) (``Reserve
Order Notice'').
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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
text of these statements may be examined at the places specified in
Item IV below. NYSE 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
Through this proposed rule change, the Exchange seeks to expand the
Reserve Order pilot program currently operating pursuant to Exchange
Rule 13. On April 23, 2008, the Exchange implemented a new order type
that allows off-Floor participants the ability to enter reserve
interest into Exchange systems (``Reserve Order'').\6\
---------------------------------------------------------------------------
\6\ See id.
---------------------------------------------------------------------------
The Reserve Order is a limit order for which a portion of the order
is to be displayed and a portion of the order, at the same price, is
not displayed (i.e., is held in ``reserve'').\7\ Market participants
that choose to enter Reserve Orders must enter specified order
information in relation to the price and size of the order and the
amount to be displayed. The displayed portion of a Reserve Order is
published in NYSE OpenBook[supreg] \8\ and is available to the
specialist on the Floor. Both the displayed and the non-displayed
portion are available for automatic execution against incoming contra-
side orders. Displayed and non-displayed interest of Reserve Orders is
available for manual executions as well.\9\
---------------------------------------------------------------------------
\7\ The Exchange represents that this functionality is
equivalent to the functionality currently available to Floor brokers
and specialists with respect to entry of reserve interest. In order
for Floor brokers' reserve interest not to be visible by the
specialists, a Floor broker must designate his or her reserve
interest as ``Do Not Display'' interest. Reserve Orders in contrast
are never shown to the specialist except when included in aggregate
quantities for manual executions.
\8\ NYSE OpenBook[supreg] provides aggregate limit order volume
that has been entered on the Exchange at price points for all NYSE-
traded securities.
\9\ See Reserve Order Notice, supra note 5, for a detailed
description of Reserve Orders and their functionality; see also NYSE
Information Memo No. 08-24 (April 22, 2008) (both documents are
available on the Exchange's Web site at https://www.nyse.com). The
Exchange will issue a revised Information Memo to the Floor
providing notice of the expansion of the Reserve Order pilot to
include all equity securities traded on the Exchange.
---------------------------------------------------------------------------
To afford the Exchange and its customers the ability to gain
systemic experience with the new Reserve Order type, the Exchange
implemented the amendment to Exchange Rule 13 allowing off-Floor
participants to enter Reserve Orders on a pilot basis. The pilot
currently operates in 100 securities traded on the Floor of the
Exchange.
[[Page 27602]]
Pilot Results and Expansion
The Exchange has determined that the technology modifications that
were required to allow off-Floor participants the ability to enter
Reserve Orders are operating successfully. The Exchange states that, to
date, there have been no system problems associated with Reserve
Orders.
In addition, entry of Reserve Orders in the securities approved to
operate in the pilot program has been steadily increasing throughout
the pilot period. Moreover, Exchange customers continue to request the
ability to send Reserve Orders in all securities traded on the NYSE.
Given the customer demand and the fact that no technological
impediments to the operation of Reserve Orders have arisen, the
Exchange now proposes to expand the Reserve Order pilot program
operating pursuant to Exchange Rule 13 to all Exchange-traded equity
securities.\10\
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\10\ The expansion of the pilot program to operate in all equity
securities traded on the Floor of the Exchange does not change the
expiration date of the Reserve Order pilot established pursuant to
the Reserve Order Notice (supra note 5). The Reserve Order pilot
program is scheduled to expire no later than the earlier of
September 30, 2008 or the effective date of Commission approval of a
proposed rule change to make the pilot program permanent.
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Conclusion
The Exchange believes that by providing all market participants
with the ability to maintain non-displayed liquidity on the Display
Book in all equity securities traded on the Exchange, market
participants will be encouraged to post liquidity and thus offer
Exchange customers additional opportunities for price improvement by
expanding the interest available to execute against incoming orders at
a single price.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \11\ in general, and furthers the objectives of Section
6(b)(5) of the Act \12\ 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 proposed rule change also is designed to support the
principles of Section 11A(a)(1) \13\ in that it seeks to assure
economically efficient execution of securities transactions, fair
competition among brokers and dealers, among exchange markets, and
between exchange markets and markets other than exchange markets, and
provide an opportunity for investors' orders to be executed without the
participation of a dealer. The Exchange believes that the instant
proposal is in keeping with these objectives in that extending Reserve
Order functionality will provide an opportunity for all market
participants to receive efficient, low cost executions available
through the use of this order type, and promote fair competition among
markets which already provide for entry of Reserve Orders by all market
participants in all equity securities traded on the Exchange.
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\11\ 15 U.S.C. 78f(b).
\12\ 15 U.S.C. 78f(b)(5).
\13\ 15 U.S.C. 78k-1(a)(1).
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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 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
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6)
thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
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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 filing.
However, Rule 19b-4(f)(6)(iii) \16\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay set forth in Rule 19b-
4(f)(6)(iii) under the Act, which would make the rule change operative
upon filing.
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\16\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
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. NYSE has satisfied the pre-filing notice
requirement.
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because such waiver would immediately allow off-Floor participants to
directly enter orders that use reserve functionality for all equity
securities traded on the Exchange. The Exchange represents that, to
date, there have been no system problems associated with the Reserve
Orders pilot program, and that Exchange customers have requested the
ability to send Reserve Orders in all securities traded on the
Exchange. Finally, the proposed reserve functionality is currently
available on other exchanges.\17\ Accordingly, the Commission
designates the proposal to be operative upon filing with the
Commission.\18\
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\17\ See, e.g., Nasdaq Rule 4751(f)(2); Securities Exchange Act
Release No. 54155 (July 14, 2006), 71 FR 41291 (July 20, 2006) (SR-
NASDAQ-2006-001).
\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).
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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 an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2008-36 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.
[[Page 27603]]
All submissions should refer to File Number SR-NYSE-2008-36. 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-2008-36 and should be
submitted on or before June 3, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
Nancy M. Morris,
Secretary.
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\19\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-10538 Filed 5-12-08; 8:45 am]
BILLING CODE 8010-01-P
