Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending NYSE Rule 123D (Openings and Halts in Trading) To Provide for a Limited Exemption for Securities Trading on the Exchange That Are Part of the Russell Index Reconstitution, 38270-38272 [E8-15070]
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38270
Federal Register / Vol. 73, No. 129 / Thursday, July 3, 2008 / 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–2008–51 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2008–51. 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. Copies of such filing also will be
available for inspection and copying at
the principal office of 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–2008–51 and should
be submitted on or before July 24, 2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.18
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–15067 Filed 7–2–08; 8:45 am]
mstockstill on PROD1PC66 with NOTICES
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58050; File No. SR–NYSE–
2008–53]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change Amending
NYSE Rule 123D (Openings and Halts
in Trading) To Provide for a Limited
Exemption for Securities Trading on
the Exchange That Are Part of the
Russell Index Reconstitution
June 27, 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 June 27,
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. NYSE filed the proposed rule
change as a ‘‘non-controversial’’
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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NYSE proposes to amend NYSE Rule
123D to exempt orders for any security
that is trading on the Exchange on June
27, 2008, and is part of the Russell
Index Reconstitution 5 (a ‘‘Russell
Stock’’), from the provisions of the nonregulatory trading halt condition
designated as ‘‘Sub-penny trading’’ as
set forth in subsection (3) of the rule.
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
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 On June 27, 2008, the Russell Investment Group
will reconstitute certain of its indices, including the
Russell 3000 Index and the Russell Microcap
Index.
2 17
18 17
CFR 200.30–3(a)(12).
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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
1. Purpose
Through this filing, the Exchange
proposes to amend NYSE Rule 123D to
provide a limited exemption for orders
in a Russell Stock that is trading on the
Exchange on June 27, 2008, and is part
of the Russell Index Reconstitution,
from the provisions of the nonregulatory trading halt condition
designated as ‘‘Sub-penny trading’’
pursuant to NYSE Rule 123D(3).
Background
Pursuant to NYSE Rule 123D(3),
whenever a security trading on the
Exchange is reported on the
consolidated tape during normal trading
hours as having traded at a price of
$1.05 or less, or if a security would open
on the Exchange at a price of $1.05 or
less, trading in the security on the
Exchange shall be immediately halted
due to a ‘‘Sub-penny trading’’ condition.
Once halted for such reason, trading
shall not resume on the Exchange until
the security has traded on another
automated trading center, as defined in
Rule 600(b)(4) of Regulation NMS (‘‘Reg
NMS’’),6 for at least one entire trading
day at a price or prices that are at all
times at or above $1.10. Any such
resumption of trading shall occur at the
beginning of a trading day, so that
normal opening procedures can apply.
In contrast to other trading halts
described in NYSE Rule 123D, a ‘‘Subpenny trading’’ halt is automatic and
does not require the approval of any
Floor Officials. However, if a
determination is made by a Floor
Official that a trade that triggered a halt
because of a ‘‘Sub-penny trading’’
condition was made in error or
otherwise was an anomaly, trading of
the security on the Exchange will
resume immediately. Orders entered
with the Exchange in a security subject
to a ‘‘Sub-penny trading’’ condition halt
will be routed to NYSE Arca, where
they will be handled in accordance with
the rules governing that market. The
6 See
E:\FR\FM\03JYN1.SGM
17 CFR 242.600(b)(4).
03JYN1
Federal Register / Vol. 73, No. 129 / Thursday, July 3, 2008 / Notices
Exchange will cancel any open limit
orders in the Display Book system with
respect to securities that become subject
to a ‘‘Sub-penny trading’’ condition halt.
mstockstill on PROD1PC66 with NOTICES
Exemption From NYSE Rule 123D(3)
The Exchange seeks, through this
filing, a limited exemption from the
provisions of NYSE Rule 123D(3) on
June 27, 2008. The Exchange believes
that this exemption is necessary to
address the possibility that a particular
Russell Stock might open or trade on the
Exchange at a price of $1.05 or less,
thereby invoking the ‘‘Sub-penny
trading’’ condition halt. In that instance,
trading in the Russell Stock would be
halted on the Exchange for the rest of
the trading day and unexecuted limit
orders remaining on the Display Book
would be cancelled. More importantly,
there would be no closing transaction
on the Exchange for the Russell Stock
on the day a ‘‘Sub-penny trading’’
condition halt was in effect and thus, no
ability to price such stock during the
Russell Index Reconstitution.
Pursuant to this proposed limited
exemption, the Exchange would not
invoke the ‘‘Sub-penny trading’’ halt if
the Russell Stock opened or traded on
the Exchange at a price of $1.05 or less.
Rather, the Exchange would permit the
Russell Stock to continue to trade. If
such stock were to trade at a price of
$0.99 or less, a non-regulatory trading
condition designated as ‘‘Equipment
Changeover’’ would be implemented.
When an ‘‘Equipment Changeover’’
condition trading halt is invoked,
Exchange Systems will continue to
accept all orders in the Russell Stock.
Open orders in the Russell Stock on the
NYSE Display Book system will not be
cancelled nor will such orders be routed
to NYSE Arca. Instead, all orders that
have been entered will be aggregated for
purposes of a closing transaction
pursuant to all relevant NYSE rules
governing the close. The Exchange
believes that only one Russell Stock
trading on the Exchange could
potentially be eligible for a ‘‘Sub-penny
trading’’ condition halt on June 27,
2008. Accordingly, the Exchange states
that this limited exemption is applicable
to only one such Russell Stock. If such
security does not trade at a price of
$1.05 or less, this limited exemption
would prove unnecessary and would
expire at the close of trading on June 27,
2008.
The Exchange believes further that
this limited exception would ensure
that on June 27, 2008, each Russell
Stock would be subject to pricing on the
NYSE close, removing the possibility
that such stock might be adversely
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16:46 Jul 02, 2008
Jkt 214001
affected on the close, causing potential
harm to the market and to investors.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,7 in general, and
furthers the objectives of Section 6(b)(5)
of the Act,8 in particular, in that it is
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
Exchange believes the proposed rule
change would ensure that trading in
Russell Stocks and the Russell Index
Reconstitution on June 27, 2008, would
proceed without any impediment.
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 states that written
comments on the proposed rule change
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 9 and Rule
19b–4(f)(6) thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with written notice of its
intent to file the proposed rule change, along with
a brief description and text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission. The
Commission is waiving the five business-day
requirement.
PO 00000
7 15
8 15
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Fmt 4703
Sfmt 4703
38271
become operative for 30 days after the
date of filing. However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requests that the Commission
waive the five business-day pre-filing
requirement and the 30-day operative
delay so that it may immediately
implement the limited exemption to the
provisions of NYSE Rule 123D to ensure
that Russell Stocks would be subject to
pricing on the NYSE close on June 27,
2008. The Exchange states that the
proposed rule change does not
significantly affect the protection of
investors or the public interest and does
not impose any significant burden on
competition.
The Commission believes that
waiving the 30-day operative delay and
five business-day pre-filing requirement
is consistent with the protection of
investors and the public interest.11 The
Commission believes that this narrowly
tailored exception to NYSE Rule
123D(3), lasting only for the duration of
one trading day, should help to ensure
fair and orderly markets on June 27,
2008, the day of the Russell Index
Reconstitution. The Commission notes
that the requirements of Rule 611 of Reg
NMS 12 would still apply. For these
reasons, the Commission designates the
proposed rule change as operative upon
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:
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
11 For purposes only of waiving the 30-day
operative delay and five business-day pre-filing
requirement, the Commission has also considered
the proposed rule’s impact on efficiency,
competition, and capital formation. See 15 U.S.C.
78c(f).
12 See 17 CFR 242.611.
E:\FR\FM\03JYN1.SGM
03JYN1
38272
Federal Register / Vol. 73, No. 129 / Thursday, July 3, 2008 / Notices
Number SR–NYSE–2008–53 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
the most significant aspects of such
statements.
Paper Comments
[Release No. 34–58040; File No. SR–NYSE–
2008–50]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change To Amend
All submissions should refer to File
NYSE Rule 104.10 To Extend the
Number SR–NYSE–2008–53. This file
Duration of the Pilot Program
number should be included on the
Applicable to Conditional Transactions
subject line if e-mail is used. To help the in All Securities to September 30, 2008
Commission process and review your
June 26, 2008.
comments more efficiently, please use
Pursuant to Section 19(b)(1) of the
only one method. The Commission will
Securities Exchange Act of 1934
post all comments on the Commission’s
(‘‘Act’’) 1 and Rule19b–4 thereunder,2
Internet Web site (https://www.sec.gov/
notice is hereby given that on June 23,
rules/sro.shtml). Copies of the
2008, the New York Stock Exchange
submission, all subsequent
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
amendments, all written statements
with the Securities and Exchange
with respect to the proposed rule
Commission (‘‘Commission’’) the
change that are filed with the
proposed rule change as described in
Commission, and all written
Items I and II below, which Items have
communications relating to the
been substantially prepared by the
proposed rule change between the
Exchange. The Exchange has designated
Commission and any person, other than the proposed rule change as a ‘‘nonthose that may be withheld from the
controversial’’ proposed rule change
public in accordance with the
pursuant to Section 19(b)(3)(A) of the
provisions of 5 U.S.C. 552, will be
Act 3 and Rule 19b–4(f)(6) thereunder,4
available for inspection and copying in
which renders the proposal effective
the Commission’s Public Reference
upon filing with the Commission. The
Commission is publishing this notice to
Room, 100 F Street, NE., Washington,
solicit comments on the proposed rule
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m. change from interested persons.
Copies of the filing also will be available I. Self-Regulatory Organization’s
for inspection and copying at the
Statement of the Terms of Substance of
principal office of the Exchange. All
the Proposed Rule Change
comments received will be posted
The Exchange proposes to amend
without change; the Commission does
NYSE Rule 104.10 to extend the
not edit personal identifying
duration of the pilot program applicable
information from submissions. You
to Conditional Transactions as defined
should submit only information that
in Rule 104.10(6)(i) in all securities to
you wish to make available publicly. All September 30, 2008. The text of the
submissions should refer to File
proposed rule change is available at
Number SR–NYSE–2008–53 and should NYSE, https://www.nyse.com, and the
be submitted on or before July 24, 2008. Commission’s Public Reference Room.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–15070 Filed 7–2–08; 8:45 am]
mstockstill on PROD1PC66 with NOTICES
BILLING CODE 8010–01–P
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
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).
2 17
13 17
CFR 200.30–3(a)(12).
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16:46 Jul 02, 2008
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1. Purpose
The Exchange is proposing to amend
NYSE Rule 104.10 to extend the
duration of the pilot program applicable
to Conditional Transactions as defined
in Rule 104.10(6)(i) in all securities for
an additional three months until
September 30, 2008.
On October 26, 2007, the Commission
approved the ability of NYSE specialists
to effect Conditional Transactions
pursuant to NYSE Rule 104.10(6) in all
securities traded on the NYSE to operate
as a pilot through March 31, 2008 (the
‘‘Conditional Transaction Pilot’’).5
(a) Current Conditional Transaction
Pilot
Conditional Transactions are
specialists’ transactions that establish or
increase a position and reach across the
market to trade as the contra-side to the
Exchange published bid or offer. Under
the current Conditional Transaction
Pilot, NYSE specialists are allowed to
effect Conditional Transactions in all
securities traded on the NYSE until June
30, 2008.
When a specialist effects a
Conditional Transaction, he or she has
obligations to re-enter the market on the
opposite side from which the specialist
effected his or her Conditional
Transaction pursuant to the rule.
Specifically, pursuant to NYSE Rule
104.10(6)(ii), ‘‘appropriate’’ re-entry
means ‘‘re-entry on the opposite side of
the market at or before the price
participation point or the ‘PPP.’ ’’ 6
Depending on the type of Conditional
Transaction, a specialist’s obligation to
re-enter may be immediate or subject to
the same re-entry conditions of NonConditional Transactions.7 Conditional
5 See Securities Exchange Act Release No. 56711
(October 26, 2007), 72 FR 62504 (November 5, 2007)
(SR–NYSE–2007–83). The Pilot was extended for an
additional three months until June 30, 2008. See
Securities Exchange Act Release No. 57592 (April
1, 2008), 73 FR 18836 (April 7, 2008) (SR–NYSE–
2008–23).
6 NYSE Rule 104.10(6)(iii)(a) provides that the
PPP identifies the price at or before which a
specialist is expected to re-enter the market after
effecting a Conditional Transaction. PPPs are only
minimum guidelines and compliance with them
does not guarantee that a specialist is meeting its
obligations. The Exchange issued guidance
regarding PPPs in January 2007. See NYSE Member
Education Bulletin 2007–1 (January 18, 2007).
7 NYSE Rule 104.10(6)(iii)(c) provides that
immediate re-entry is required after the following
Conditional Transactions:
E:\FR\FM\03JYN1.SGM
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]]>Agencies
[Federal Register Volume 73, Number 129 (Thursday, July 3, 2008)]
[Notices]
[Pages 38270-38272]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-15070]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58050; File No. SR-NYSE-2008-53]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
Amending NYSE Rule 123D (Openings and Halts in Trading) To Provide for
a Limited Exemption for Securities Trading on the Exchange That Are
Part of the Russell Index Reconstitution
June 27, 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 June 27, 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.
NYSE filed the proposed rule change as a ``non-controversial'' 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\ 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
NYSE proposes to amend NYSE Rule 123D to exempt orders for any
security that is trading on the Exchange on June 27, 2008, and is part
of the Russell Index Reconstitution \5\ (a ``Russell Stock''), from the
provisions of the non-regulatory trading halt condition designated as
``Sub-penny trading'' as set forth in subsection (3) of the rule. The
text of the proposed rule change is available at the Exchange, the
Commission's Public Reference Room, and https://www.nyse.com.
---------------------------------------------------------------------------
\5\ On June 27, 2008, the Russell Investment Group will
reconstitute certain of its indices, including the Russell
3000[supreg] Index and the Russell Microcap[supreg] Index.
---------------------------------------------------------------------------
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
1. Purpose
Through this filing, the Exchange proposes to amend NYSE Rule 123D
to provide a limited exemption for orders in a Russell Stock that is
trading on the Exchange on June 27, 2008, and is part of the Russell
Index Reconstitution, from the provisions of the non-regulatory trading
halt condition designated as ``Sub-penny trading'' pursuant to NYSE
Rule 123D(3).
Background
Pursuant to NYSE Rule 123D(3), whenever a security trading on the
Exchange is reported on the consolidated tape during normal trading
hours as having traded at a price of $1.05 or less, or if a security
would open on the Exchange at a price of $1.05 or less, trading in the
security on the Exchange shall be immediately halted due to a ``Sub-
penny trading'' condition. Once halted for such reason, trading shall
not resume on the Exchange until the security has traded on another
automated trading center, as defined in Rule 600(b)(4) of Regulation
NMS (``Reg NMS''),\6\ for at least one entire trading day at a price or
prices that are at all times at or above $1.10. Any such resumption of
trading shall occur at the beginning of a trading day, so that normal
opening procedures can apply. In contrast to other trading halts
described in NYSE Rule 123D, a ``Sub-penny trading'' halt is automatic
and does not require the approval of any Floor Officials. However, if a
determination is made by a Floor Official that a trade that triggered a
halt because of a ``Sub-penny trading'' condition was made in error or
otherwise was an anomaly, trading of the security on the Exchange will
resume immediately. Orders entered with the Exchange in a security
subject to a ``Sub-penny trading'' condition halt will be routed to
NYSE Arca, where they will be handled in accordance with the rules
governing that market. The
[[Page 38271]]
Exchange will cancel any open limit orders in the Display Book system
with respect to securities that become subject to a ``Sub-penny
trading'' condition halt.
---------------------------------------------------------------------------
\6\ See 17 CFR 242.600(b)(4).
---------------------------------------------------------------------------
Exemption From NYSE Rule 123D(3)
The Exchange seeks, through this filing, a limited exemption from
the provisions of NYSE Rule 123D(3) on June 27, 2008. The Exchange
believes that this exemption is necessary to address the possibility
that a particular Russell Stock might open or trade on the Exchange at
a price of $1.05 or less, thereby invoking the ``Sub-penny trading''
condition halt. In that instance, trading in the Russell Stock would be
halted on the Exchange for the rest of the trading day and unexecuted
limit orders remaining on the Display Book would be cancelled. More
importantly, there would be no closing transaction on the Exchange for
the Russell Stock on the day a ``Sub-penny trading'' condition halt was
in effect and thus, no ability to price such stock during the Russell
Index Reconstitution.
Pursuant to this proposed limited exemption, the Exchange would not
invoke the ``Sub-penny trading'' halt if the Russell Stock opened or
traded on the Exchange at a price of $1.05 or less. Rather, the
Exchange would permit the Russell Stock to continue to trade. If such
stock were to trade at a price of $0.99 or less, a non-regulatory
trading condition designated as ``Equipment Changeover'' would be
implemented. When an ``Equipment Changeover'' condition trading halt is
invoked, Exchange Systems will continue to accept all orders in the
Russell Stock. Open orders in the Russell Stock on the NYSE Display
Book system will not be cancelled nor will such orders be routed to
NYSE Arca. Instead, all orders that have been entered will be
aggregated for purposes of a closing transaction pursuant to all
relevant NYSE rules governing the close. The Exchange believes that
only one Russell Stock trading on the Exchange could potentially be
eligible for a ``Sub-penny trading'' condition halt on June 27, 2008.
Accordingly, the Exchange states that this limited exemption is
applicable to only one such Russell Stock. If such security does not
trade at a price of $1.05 or less, this limited exemption would prove
unnecessary and would expire at the close of trading on June 27, 2008.
The Exchange believes further that this limited exception would
ensure that on June 27, 2008, each Russell Stock would be subject to
pricing on the NYSE close, removing the possibility that such stock
might be adversely affected on the close, causing potential harm to the
market and to investors.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\7\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\8\ in particular, in that it
is 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 Exchange believes the proposed rule change would
ensure that trading in Russell Stocks and the Russell Index
Reconstitution on June 27, 2008, would proceed without any impediment.
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\7\ 15 U.S.C. 78f(b).
\8\ 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 states that written comments on the proposed rule
change 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with written notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Commission is waiving the five business-day
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing. However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requests that the Commission waive
the five business-day pre-filing requirement and the 30-day operative
delay so that it may immediately implement the limited exemption to the
provisions of NYSE Rule 123D to ensure that Russell Stocks would be
subject to pricing on the NYSE close on June 27, 2008. The Exchange
states that the proposed rule change does not significantly affect the
protection of investors or the public interest and does not impose any
significant burden on competition.
The Commission believes that waiving the 30-day operative delay and
five business-day pre-filing requirement is consistent with the
protection of investors and the public interest.\11\ The Commission
believes that this narrowly tailored exception to NYSE Rule 123D(3),
lasting only for the duration of one trading day, should help to ensure
fair and orderly markets on June 27, 2008, the day of the Russell Index
Reconstitution. The Commission notes that the requirements of Rule 611
of Reg NMS \12\ would still apply. For these reasons, the Commission
designates the proposed rule change as operative upon filing.
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\11\ For purposes only of waiving the 30-day operative delay and
five business-day pre-filing requirement, the Commission has also
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\12\ See 17 CFR 242.611.
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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
[[Page 38272]]
Number SR-NYSE-2008-53 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2008-53. 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 the filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2008-53 and should be
submitted on or before July 24, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15070 Filed 7-2-08; 8:45 am]
BILLING CODE 8010-01-P
