Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by New York Stock Exchange LLC To Adopt a Policy Relating to its Treatment of Trade Reports That It Determines To Be Inconsistent With the Prevailing Market, 60380-60382 [E8-24181]
Download as PDF
<![CDATA[
60380
Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices
Penny Stock Rule’s remaining
requirements.
Companies listing under the NYSE
Arca Transfer Standard will have to
comply with all other applicable
Exchange listing rules, including the
Exchange’s corporate governance
requirements. As with all other listing
applicants, the Exchange reserves the
right to deny listing to any company
seeking to list under the NYSE Arca
Transfer Standard if the Exchange
determines that the listing of any such
company is not in the interests of the
Exchange or the public interest.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 9 that an exchange
have rules that are 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, in general, to protect investors and
the public interest. The Exchange
believes that the proposed amendment
is consistent with the protection of
investors and the public interest in that
the requirements of the NYSE Arca
Transfer Standard are sufficiently
stringent that the proposed amendment
will not lead to the listing of any
companies that are not suited for listing
on the NYSE. In addition, the proposal
applies for a very brief period to a small
number of companies that are subject to
unique and disadvantageous
circumstances.
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 purpose of the Act.
mstockstill on PROD1PC66 with NOTICES
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
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
9 15
U.S.C. 78f(b)(5).
VerDate Aug<31>2005
20:11 Oct 09, 2008
Jkt 217001
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve the proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
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 Exchange
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–2008–97 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–2008–97. 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–2008–97 and should
PO 00000
Frm 00153
Fmt 4703
Sfmt 4703
be submitted on or before October 31,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–24178 Filed 10–9–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58736; File No. SR–NYSE–
2008–91]
Self-Regulatory Organizations; Notice
of Filing of Proposed Rule Change by
New York Stock Exchange LLC To
Adopt a Policy Relating to its
Treatment of Trade Reports That It
Determines To Be Inconsistent With
the Prevailing Market
October 6, 2008.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’),2 and Rule 19b–4
thereunder,3 notice is hereby given that
on September 26, 2008, New York Stock
Exchange, LLC (the ‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission the proposed
rule change as described in Items I, II
and III below, which items have been
prepared by the Exchange. 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 proposes to adopt a
policy relating to its treatment of trade
reports that it determines to be
inconsistent with the prevailing market.
The Exchange does not expect that the
proposed rule change will have any
direct effect, or significant indirect
effect, on any other Exchange rule in
effect at the time of this filing.
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
self-regulatory organization 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
10 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a et SEC [sic].
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\10OCN1.SGM
10OCN1
Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices
the places specified in Item IV below.
The 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
mstockstill on PROD1PC66 with NOTICES
1. Purpose
Trades in listed securities
occasionally occur at prices that deviate
significantly from prevailing market
prices and those trades sometimes
establish a high, low or last sale price
for a security that does not reflect the
true market for the security.
The Consolidated Tape Association
(‘‘CTA’’) offers each Participant in the
CTA Plan the discretion to append an
indicator (an ‘‘Aberrant Report
Indicator’’) to a trade report to indicate
that the market believes that the trade
price in a trade executed on that market
does not accurately reflect the
prevailing market for the security. The
CTA recommends that data recipients
should exclude the price of any trade to
which the Aberrant Report Indicator has
been appended from any calculation of
the high, low and last sale prices for the
security.
The Exchange proposes to adopt as
policies of the Exchange:
i. That it shall monitor for trade prices
that do not accurately reflect the
prevailing market for a security;
ii. That it shall append an Aberrant
Report Indicator to any trade report with
respect to any trade executed on the
Exchange that the Exchange determines
to be inconsistent with the prevailing
market; and
iii. That it shall discourage vendors
and other data recipients from using
prices to which the Exchange has
appended the Aberrant Report Indicator
in any calculation of the high, low or
last sale price of a security.
The Exchange shall act retroactively
to append the Aberrant Report Indicator
to trades that do not accurately reflect
the prevailing market for a security
commencing as of January 1, 2007.
The Exchange will urge vendors to
disclose the exclusion from high, low or
last sale price data of any aberrant
trades excluded from high, low or last
sale price information they disseminate
and to provide to data users an
explanation of the parameters used in
the Exchange’s aberrant trade policy.
Upon initial adoption of the Aberrant
Report Indicator, the Exchange will also
contact all of its listed companies to
explain the aberrant trade policy and
will notify users of the information that
VerDate Aug<31>2005
20:11 Oct 09, 2008
Jkt 217001
these are still valid trades. The
Exchange will inform the affected listed
company each time the Exchange or
another market appends the Aberrant
Report Indicator to a trade in an NYSElisted stock and will remind the users of
the information that these are still valid
trades in that they were executed and
not unwound as in the case of a clearly
erroneous trade.
While the CTA disseminates its own
calculations of high, low and last sale
prices, vendors and other data
recipients—and not the Exchange—
frequently determine their own
methodology by which they wish to
calculate high, low and last sale prices.
Therefore, the Exchange shall endeavor
to explain to those vendors and other
data recipients the deleterious effects
that can result from including in the
calculations a trade to which the
Aberrant Report Indicator has been
appended.
In making the determination to
append the Aberrant Report Indicator,
the Exchange shall consider all factors
related to a trade, including, but not
limited to, the following:
• Material news released for the
security;
• Suspicious trading activity;
• System malfunctions or
disruptions;
• Locked or crossed markets;
• A recent trading halt or resumption
of trading in the security;
• Whether the security is in its initial
public offering;
• Volume and volatility for the
security;
• Whether the trade price represents
a 52-week high or low for the security;
• Whether the trade price deviates
significantly from recent trading
patterns in the security;
• Whether the trade price reflects a
stock-split, reorganization or other
corporate action;
• The validity of consolidated tape
trades and quotes in comparison to
national best bids and offers; and
• The general volatility of market
conditions.
Currently, the Exchange does not
trade on an unlisted trading privilege
(‘‘UTP’’) basis any securities listed on
other markets. In the event that the
Exchange commences UTP trading at
some future date, the Exchange
proposes that its policy shall be to
consult with the listing exchange (if the
Exchange is not the listing exchange)
and with other markets (in the case of
executions that take place across
multiple markets) and to seek a
consensus as to whether the trade price
is consistent with the prevailing market
for the security.
PO 00000
Frm 00154
Fmt 4703
Sfmt 4703
60381
In monitoring trade prices that may be
inconsistent with the prevailing market,
the Exchange proposes that Exchange
policy shall be to follow the following
general guidelines: The Exchange will
review whether a trade price does not
reflect the prevailing market for a
security if the trade occurs during
regular trading hours (i.e., 9:30 a.m. to
4 p.m.) and occurs at a price that
deviates from the ‘‘Reference Price’’ by
an amount that meets or exceeds the
following thresholds:
Trade price
Between $0 and $15.00 ...........
Between $15.01 and $50.00 ....
In excess of $50.00 ..................
Numerical
threshold
(percent)
7
5
3
The ‘‘Reference Price’’ refers to (a) if
the primary market for the security is
open at the time of the trade, the
national best bid or offer for the
security, or (b) if the primary market for
the security is not open at the time of
the trade, the first executable quote or
print for the security on the primary
market after execution of the trade in
question. However, if the circumstances
suggest that a different Reference Price
would be more appropriate, the
Exchange will use the different
Reference Price. For instance, if the
national best bid and offer for the
security are so wide apart as to fail to
reflect the market for the security, the
Exchange might use as the Reference
Price a trade price or best bid or offer
that was available prior to the trade in
question.
If the Exchange determines that a
trade price does not reflect the
prevailing market for a security and the
trade represented the last sale of the
security on the Exchange during a
trading session, the Exchange may also
determine to remove that trade’s
designation as the last sale. The
Exchange may do so either on the day
of the trade or at a later date, so as to
provide reasonable time for the
Exchange to conduct due diligence
regarding the trade, including the
consideration of input from markets and
other market participants.
The Exchange has always monitored
for trade prices that do not accurately
reflect the prevailing market for a
security. For more than a year, the
Exchange has embraced the policy of
discouraging vendors and other data
recipients from including trade reports
that are inconsistent with the prevailing
market in their calculations of high, low
and last sale prices. The Exchange
proposes to use the Aberrant Report
Indicator in accordance with the
E:\FR\FM\10OCN1.SGM
10OCN1
60382
Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices
guidelines set forth above. Where
appropriate, the Exchange may apply
the Aberrant Report Indicator to trades
that were reported prior to the adoption
of this policy.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Exchange Act,4 in
general, and furthers the objectives of
Section 6(b)(5) of the Exchange Act,5 in
particular in that it is designed to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
In particular, the Aberrant Report
Indicator is consistent with the
protection of investors and the public
interest in that the Exchange will seek
to ensure a proper understanding of the
Aberrant Report Indicator among
securities market participants by: (i)
Urging vendors to disclose the exclusion
from high, low or last sale price data of
any aberrant trades excluded from high,
low or last sale price information they
disseminate and to provide to data users
an explanation of the parameters used
in the Exchange’s aberrant trade policy;
(ii) informing the affected listed
company each time the Exchange or
another market appends the Aberrant
Report Indicator to a trade in an NYSElisted stock; and (iii) reminding the
users of the information that these are
still valid trades in that they were
executed and not unwound as in the
case of a clearly erroneous trade.
mstockstill on PROD1PC66 with NOTICES
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 Exchange Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
From time to time, the Exchange has
received comments from representatives
of its listed companies that a trade
report for a transaction in the stock of
that listed company is inconsistent with
the prevailing market for that stock and
44
15 U.S.C. 78f(b).
U.S.C. 78f(b)(5).
5 15
VerDate Aug<31>2005
20:11 Oct 09, 2008
Jkt 217001
that the inconsistent trade price has
inappropriately distorted the high, low
and last sale price calculations for the
listed company. While those
commenters have not submitted formal,
written comments on the proposal, the
Exchange has incorporated some of their
ideas into the proposal and this
proposed rule change reflects their
input. The Exchange has not received
any unsolicited written comments from
members or other interested parties.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
(A) By order approve the proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
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 Exchange
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–2008–91 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–2008–91. 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
PO 00000
Frm 00155
Fmt 4703
Sfmt 4703
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–2008–91 and should
be submitted on or before October 31,
2008.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.6
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–24181 Filed 10–9–08; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58740; File No. SR–NYSE–
2008–98]
Self-Regulatory Organizations; Notice
of Filing by New York Stock Exchange
LLC To Adopt an Additional Initial
Listing Standard for Operating
Companies
October 6, 2008.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’),2 and Rule 19b–4 thereunder,3
notice is hereby given that on October
1, 2008, New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘the Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule changes as described in
Items I, II and III below, which items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule changes from interested
persons.
6 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\10OCN1.SGM
10OCN1
]]>Agencies
[Federal Register Volume 73, Number 198 (Friday, October 10, 2008)]
[Notices]
[Pages 60380-60382]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-24181]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58736; File No. SR-NYSE-2008-91]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by New York Stock Exchange LLC To Adopt a Policy Relating to its
Treatment of Trade Reports That It Determines To Be Inconsistent With
the Prevailing Market
October 6, 2008.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Exchange Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is
hereby given that on September 26, 2008, New York Stock Exchange, LLC
(the ``NYSE'' or the ``Exchange'') filed with the Securities and
Exchange Commission the proposed rule change as described in Items I,
II and III below, which items have been prepared by the Exchange. 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\ 15 U.S.C. 78a et SEC [sic].
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to adopt a policy relating to its treatment
of trade reports that it determines to be inconsistent with the
prevailing market. The Exchange does not expect that the proposed rule
change will have any direct effect, or significant indirect effect, on
any other Exchange rule in effect at the time of this filing.
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 self-regulatory organization
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
[[Page 60381]]
the places specified in Item IV below. The 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
Trades in listed securities occasionally occur at prices that
deviate significantly from prevailing market prices and those trades
sometimes establish a high, low or last sale price for a security that
does not reflect the true market for the security.
The Consolidated Tape Association (``CTA'') offers each Participant
in the CTA Plan the discretion to append an indicator (an ``Aberrant
Report Indicator'') to a trade report to indicate that the market
believes that the trade price in a trade executed on that market does
not accurately reflect the prevailing market for the security. The CTA
recommends that data recipients should exclude the price of any trade
to which the Aberrant Report Indicator has been appended from any
calculation of the high, low and last sale prices for the security.
The Exchange proposes to adopt as policies of the Exchange:
i. That it shall monitor for trade prices that do not accurately
reflect the prevailing market for a security;
ii. That it shall append an Aberrant Report Indicator to any trade
report with respect to any trade executed on the Exchange that the
Exchange determines to be inconsistent with the prevailing market; and
iii. That it shall discourage vendors and other data recipients
from using prices to which the Exchange has appended the Aberrant
Report Indicator in any calculation of the high, low or last sale price
of a security.
The Exchange shall act retroactively to append the Aberrant Report
Indicator to trades that do not accurately reflect the prevailing
market for a security commencing as of January 1, 2007.
The Exchange will urge vendors to disclose the exclusion from high,
low or last sale price data of any aberrant trades excluded from high,
low or last sale price information they disseminate and to provide to
data users an explanation of the parameters used in the Exchange's
aberrant trade policy. Upon initial adoption of the Aberrant Report
Indicator, the Exchange will also contact all of its listed companies
to explain the aberrant trade policy and will notify users of the
information that these are still valid trades. The Exchange will inform
the affected listed company each time the Exchange or another market
appends the Aberrant Report Indicator to a trade in an NYSE-listed
stock and will remind the users of the information that these are still
valid trades in that they were executed and not unwound as in the case
of a clearly erroneous trade.
While the CTA disseminates its own calculations of high, low and
last sale prices, vendors and other data recipients--and not the
Exchange--frequently determine their own methodology by which they wish
to calculate high, low and last sale prices. Therefore, the Exchange
shall endeavor to explain to those vendors and other data recipients
the deleterious effects that can result from including in the
calculations a trade to which the Aberrant Report Indicator has been
appended.
In making the determination to append the Aberrant Report
Indicator, the Exchange shall consider all factors related to a trade,
including, but not limited to, the following:
Material news released for the security;
Suspicious trading activity;
System malfunctions or disruptions;
Locked or crossed markets;
A recent trading halt or resumption of trading in the
security;
Whether the security is in its initial public offering;
Volume and volatility for the security;
Whether the trade price represents a 52-week high or low
for the security;
Whether the trade price deviates significantly from recent
trading patterns in the security;
Whether the trade price reflects a stock-split,
reorganization or other corporate action;
The validity of consolidated tape trades and quotes in
comparison to national best bids and offers; and
The general volatility of market conditions.
Currently, the Exchange does not trade on an unlisted trading
privilege (``UTP'') basis any securities listed on other markets. In
the event that the Exchange commences UTP trading at some future date,
the Exchange proposes that its policy shall be to consult with the
listing exchange (if the Exchange is not the listing exchange) and with
other markets (in the case of executions that take place across
multiple markets) and to seek a consensus as to whether the trade price
is consistent with the prevailing market for the security.
In monitoring trade prices that may be inconsistent with the
prevailing market, the Exchange proposes that Exchange policy shall be
to follow the following general guidelines: The Exchange will review
whether a trade price does not reflect the prevailing market for a
security if the trade occurs during regular trading hours (i.e., 9:30
a.m. to 4 p.m.) and occurs at a price that deviates from the
``Reference Price'' by an amount that meets or exceeds the following
thresholds:
------------------------------------------------------------------------
Numerical
Trade price threshold
(percent)
------------------------------------------------------------------------
Between $0 and $15.00...................................... 7
Between $15.01 and $50.00.................................. 5
In excess of $50.00........................................ 3
------------------------------------------------------------------------
The ``Reference Price'' refers to (a) if the primary market for the
security is open at the time of the trade, the national best bid or
offer for the security, or (b) if the primary market for the security
is not open at the time of the trade, the first executable quote or
print for the security on the primary market after execution of the
trade in question. However, if the circumstances suggest that a
different Reference Price would be more appropriate, the Exchange will
use the different Reference Price. For instance, if the national best
bid and offer for the security are so wide apart as to fail to reflect
the market for the security, the Exchange might use as the Reference
Price a trade price or best bid or offer that was available prior to
the trade in question.
If the Exchange determines that a trade price does not reflect the
prevailing market for a security and the trade represented the last
sale of the security on the Exchange during a trading session, the
Exchange may also determine to remove that trade's designation as the
last sale. The Exchange may do so either on the day of the trade or at
a later date, so as to provide reasonable time for the Exchange to
conduct due diligence regarding the trade, including the consideration
of input from markets and other market participants.
The Exchange has always monitored for trade prices that do not
accurately reflect the prevailing market for a security. For more than
a year, the Exchange has embraced the policy of discouraging vendors
and other data recipients from including trade reports that are
inconsistent with the prevailing market in their calculations of high,
low and last sale prices. The Exchange proposes to use the Aberrant
Report Indicator in accordance with the
[[Page 60382]]
guidelines set forth above. Where appropriate, the Exchange may apply
the Aberrant Report Indicator to trades that were reported prior to the
adoption of this policy.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Exchange Act,\4\ in general, and furthers the
objectives of Section 6(b)(5) of the Exchange Act,\5\ in particular in
that it is designed to promote just and equitable principles of trade,
to foster cooperation and coordination with persons engaged in
regulating, clearing, settling, processing information with respect to,
and facilitating transactions in securities, to remove impediments to
and perfect the mechanism of a free and open market and a national
market system, and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------
\4\ 4 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
In particular, the Aberrant Report Indicator is consistent with the
protection of investors and the public interest in that the Exchange
will seek to ensure a proper understanding of the Aberrant Report
Indicator among securities market participants by: (i) Urging vendors
to disclose the exclusion from high, low or last sale price data of any
aberrant trades excluded from high, low or last sale price information
they disseminate and to provide to data users an explanation of the
parameters used in the Exchange's aberrant trade policy; (ii) informing
the affected listed company each time the Exchange or another market
appends the Aberrant Report Indicator to a trade in an NYSE-listed
stock; and (iii) reminding the users of the information that these are
still valid trades in that they were executed and not unwound as in the
case of a clearly erroneous trade.
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 Exchange Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
From time to time, the Exchange has received comments from
representatives of its listed companies that a trade report for a
transaction in the stock of that listed company is inconsistent with
the prevailing market for that stock and that the inconsistent trade
price has inappropriately distorted the high, low and last sale price
calculations for the listed company. While those commenters have not
submitted formal, written comments on the proposal, the Exchange has
incorporated some of their ideas into the proposal and this proposed
rule change reflects their input. The Exchange has not received any
unsolicited written comments from members or other interested parties.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve the proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
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 Exchange 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-2008-91 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-2008-91. 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-2008-91 and should be
submitted on or before October 31, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\6\
---------------------------------------------------------------------------
\6\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-24181 Filed 10-9-08; 8:45 am]
BILLING CODE 8011-01-P
