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]

Download as PDF 38270 Federal Register / Vol. 73, No. 129 / Thursday, July 3, 2008 / Notices Electronic Comments • Use the Commission’s Internet comment form (http://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 (http://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 http://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). VerDate Aug<31>2005 16:46 Jul 02, 2008 Jkt 214001 PO 00000 Frm 00099 Fmt 4703 Sfmt 4703 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 VerDate Aug<31>2005 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 Frm 00100 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 (http://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 (http://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, http://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). VerDate Aug<31>2005 16:46 Jul 02, 2008 Jkt 214001 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 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 03JYN1

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]


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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 http://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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 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 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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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 (http://
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 (http://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