Self-Regulatory Organizations; NYSE Alternext U.S. LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Conform Its Rules With Those of the New York Stock Exchange, 73683-73687 [E8-28680]

Download as PDF Federal Register / Vol. 73, No. 233 / Wednesday, December 3, 2008 / Notices this filing, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest.17 The Exchange has requested that the Commission waive the 30-day operative delay, and designate the proposal as operative as of December 1, 2008. NYSE Alternext notes that it has previously announced its intention to relocate its equities and bonds trading from the 86 Trinity Trading Systems to the NYSE Alternext Trading Systems and NYSE Alternext Bonds on December 1, 2008, and has previously advised the Commission staff of its intention to harmonize the rules between NYSE and NYSE Alternext in order to facilitate this transition. Moreover, the Exchange believes that this filing is noncontroversial because it is consistent with one that was previously submitted by NYSE for immediate effectiveness.18 The Commission hereby grants the Exchange’s request 19 and believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The rule being adopted through this filing is based on a previously established rule of NYSE, and does not appear to raise any novel or significant issues. Furthermore, waiving the operative delay will facilitate the Equities Relocation, which is scheduled to occur on December 1, 2008. Therefore, the Commission designates the proposal operative as of December 1, 2008. 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 jlentini on PROD1PC65 with NOTICES • 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–NYSEALTR–2008–11 the subject line. 17 In addition, Rule 19b–4(f)(6) requires a selfregulatory organization to give the Commission written notice of its intent to file 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 has determined to waive the five-day pre-filing period in this case. 18 See Securities Exchange Act Release No. 59025 (November 26, 2008) (SR–NYSE–2008–123). 19 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Aug<31>2005 13:59 Dec 02, 2008 Jkt 217001 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–NYSEALTR–2008–11. 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, 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– NYSEALTR–2008–11 and should be submitted on or before December 24, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.20 J. Lynn Taylor, Assistant Secretary. [FR Doc. E8–28679 Filed 12–2–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59022; File No. SR– NYSEALTR–2008–10] Self-Regulatory Organizations; NYSE Alternext U.S. LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Conform Its Rules With Those of the New York Stock Exchange November 26, 2008. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on November 26, 2008, NYSE Alternext U.S. LLC (the ‘‘Exchange’’ or ‘‘NYSE Alternext’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 amend certain NYSE Alternext Equities Rules to conform with amendments to certain NYSE Rules filed by the New York Stock Exchange LLC (‘‘NYSE’’), and also additional technical amendments. 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 those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. The text of the proposed rule change is available on the Exchange’s Web site, at the Exchange’s principal office, and at the Commission’s Public Reference Room. 1 15 20 17 PO 00000 CFR 200.30–3(a)(12). Frm 00046 Fmt 4703 Sfmt 4703 73683 2 17 E:\FR\FM\03DEN1.SGM U.S.C. 78s(b)(1). CFR 240.19b–4. 03DEN1 73684 Federal Register / Vol. 73, No. 233 / Wednesday, December 3, 2008 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule changes is to amend certain NYSE Alternext Equities Rules to conform with amendments to certain NYSE Rules filed by the NYSE. jlentini on PROD1PC65 with NOTICES Background As described more fully in a related rule filing, NYSE Euronext acquired The Amex Membership Corporation (‘‘AMC’’) pursuant to an Agreement and Plan of Merger, dated January 17, 2008 (the ‘‘Merger’’). In connection with the Merger, the Exchange’s predecessor, the American Stock Exchange LLC (‘‘Amex’’), a subsidiary of AMC, became a subsidiary of NYSE Euronext called NYSE Alternext U.S. LLC,3 and will continue to operate as a national securities exchange registered under Section 6 of the Act.4 The effective date of the Merger was October 1, 2008. In connection with the Merger, the Exchange will relocate all equities trading conducted on the Exchange legacy trading systems and facilities located at 86 Trinity Place, New York, New York (the ‘‘86 Trinity Trading Systems’’), to trading systems and facilities located at 11 Wall Street, New York, New York (the ‘‘Equities Relocation’’). The Exchange’s equity trading systems and facilities at 11 Wall Street (the ‘‘NYSE Alternext Trading Systems’’) will be operated by the NYSE on behalf of the Exchange.5 Similarly, the Exchange will relocate the trading of certain debt securities currently conducted on the 86 Trinity Trading Systems to an automated bond trading system (the ‘‘Bonds Relocation’’) that will be operated by the NYSE on behalf of the Exchange (‘‘NYSE Alternext Bonds’’). The Exchange will also relocate all options trading currently conducted on the 86 Trinity Trading Systems to new facilities of the Exchange to be located at 11 Wall Street, which will use a trading system based on the options trading system used by NYSE Arca, Inc. (‘‘NYSE Arca’’) (the ‘‘Options Relocation’’).6 3 See Securities Exchange Act Release No. 58673 (September 29, 2008), 73 FR 57707 (October 3, 2008) (SR–NYSE–2008–60 and SR–Amex 2008–62) (approving the Merger). 4 15 U.S.C. 78f. 5 See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation). 6 See Securities Exchange Act Release No. 58833 (October 22, 2008), 73 FR 64642 (October 30, 2008) (SR–NYSE–2008–106) and Securities Exchange Act VerDate Aug<31>2005 13:59 Dec 02, 2008 Jkt 217001 Post-Merger, all Exchange members and member organizations that were authorized to trade on the Exchange before the Merger will receive trading permits (referred to as ‘‘86 Trinity Permits’’) that authorize continued trading on the 86 Trinity Trading Systems. Holders of the 86 Trinity Permits are eligible to apply for NYSE Alternext equities trading licenses or options trading permits upon the Equities or Options Relocation, as applicable.7 In addition, pursuant to the Merger, all NYSE Alternext members and member organizations that apply for NYSE Alternext equities trading licenses are automatically waived in as NYSE members and member organizations.8 Similarly, all NYSE members and member organizations are automatically waived in as NYSE Alternext members and member organizations.9 The NYSE Alternext Equities Rules In order to implement the Equities and Bonds Relocations, the Exchange adopted NYSE Rules 1–1004 as the NYSE Alternext Equities Rules to govern all equities trading on the NYSE Alternext Trading Systems and NYSE Alternext Bonds. Because the NYSE Alternext Trading Systems and NYSE Alternext Bonds will be operated by the NYSE on behalf of the Exchange, the NYSE Alternext Equities Rules are substantially identical to the existing NYSE Rules, subject to such changes as were necessary to apply the rules to the Exchange. The NYSE Alternext Equities Rules are based on the NYSE Rules in their form as of July 18, 2008. NYSE Alternext Equities Rule 86, which is the principal rule governing trading on NYSE Alternext Bonds, is based on NYSE Rule 86 in the form it existed as of October 1, 2008.10 Release No. 58839 (October 23, 2008), 73 FR 64645 (October 30, 2008) (SR–NYSEALTR–2008–03) (together, approving the Bonds Relocation). The Exchange will submit a separate rule filing to adopt a new rule set to govern NYSE Alternext options trading following the Options Relocation. 7 See Securities Exchange Act Release No. 58706 (October 1, 2008), 73 FR 59019 (October 8, 2008) (SR–NYSE–2008–70) (describing and approving membership rule changes related to the Merger); Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation). 8 See NYSE Rules 2.10 and 2.20. NYSE Alternext members and member organizations will have a sixmonth grace period within which to meet NYSE and NYSE Alternext Equities membership requirements. See NYSE Rule 300.10T and NYSE Alternext Equities Rule 300.10T. 9 See NYSE Alternext Equities Rules 2.10 and .20. 10 See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation). See also Securities Exchange Act Release No. 58833 (October 22, 2008), 73 FR 64642 PO 00000 Frm 00047 Fmt 4703 Sfmt 4703 Proposed Amendments to NYSE Alternext Equities Rules The NYSE Alternext Equities Rules will become operative as of the date of the Equities and Bonds Relocations. In the interim period since the filing and approval of the Equities Relocation, the NYSE has filed rule changes to some of its rules governing trading on its trading systems that would also impact trading on the NYSE Alternext Trading Systems and NYSE Alternext Bonds. The Exchange therefore proposes to amend the NYSE Alternext Equities Rules to conform to these rule changes, subject to such minor, technical changes as are necessary to apply the amended rules to the Exchange. Unless specifically noted, NYSE Alternext is proposing no substantive changes in this filing from the rule text approved for NYSE by the Commission or adopted pursuant to an immediately effective filing. The changes are summarized broadly below: • Revisions and amendments to various NYSE Alternext and NYSE Alternext Equities rules necessary to implement the ‘‘New Market Model’’ adopted by the NYSE (‘‘NMM’’); 11 • Revision of Rule 98–NYSE Alternext Equities and amendments to related rules (including the deletion of Rule 102–NYSE Alternext Equities) concerning the structure and operation of member organization specialist (now known as ‘‘DMMs’’) units and risk management; 12 (October 30, 2008) (SR–NYSE–2008–106) and Securities Exchange Act Release No. 58839 (October 23, 2008), 73 FR 64645 (October 30, 2008) (SR– NYSEALTR–2008–03) (together, approving the Bonds Relocation). 11 In adopting what it calls the ‘‘New Market Model’’, the NYSE proposed a number of changes to its marketplace, including (i) Providing market participants with additional abilities to post hidden liquidity on Exchange systems; (ii) creating a Designated Market Maker (‘‘DMM’’) and phasing out the NYSE specialist; and (iii) enhancing the speed of execution through technological enhancements and a reduction in message traffic between NYSE trading systems and its DMMs. See Securities Exchange Act Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008) (SR– NYSE–2008–46) (adopting NMM). See also Securities Exchange Act Release No. 58971 (November 17, 2008), 73 FR 71070 (November 24, 2008) (SR–NYSE–2008–115) (amendments thereto). With the exception of the DMM net capital requirements (addressed separately in this filing), NYSE Alternext is not proposing any additional substantive changes in this filing different from the rule text approved for NYSE by the Commission or adopted pursuant to an immediately effective filing, although it is including corresponding technical rule changes to change references to ‘‘specialists’’ or internal cross-references that were incorrect or not included in the original NYSE filings (see Rules 2A(c)–, 15(b)–, 70.25–, 92(d)–, 98(c)–, 123(g)–, 123E(f)–, 124(f)–, 325–, 431–, 440G.10– and 900– (chart of rules)–NYSE Alternext Equities). 12 The NYSE revised the regulatory requirements under its Rule 98 concerning how member organizations structure their DMM operations and E:\FR\FM\03DEN1.SGM 03DEN1 Federal Register / Vol. 73, No. 233 / Wednesday, December 3, 2008 / Notices jlentini on PROD1PC65 with NOTICES • Revisions to Rules 103A–NYSE Alternext Equities and 103B–NYSE Alternext Equities, Non-NYSE Alternext Equities Rule 476A, and amendments to related rules (including the deletion of Rule 106–NYSE Alternext Equities) concerning the allocation of registered securities to DMMs; 13 manage their risks, including: (i) Redefining the persons to whom NYSE Rule 98 would apply; (ii) allowing DMM operations to be integrated into better capitalized member organizations; (iii) permitting a DMM unit to share nontrading-related services with its parent member organization or approved persons; and (iv) providing flexibility to member organizations and their approved persons in how to conduct risk management of DMM operations. In addition the NYSE also made conforming amendments to other NYSE rules that rely on NYSE Rule 98 exemptions for approved persons. See Securities Exchange Act Release No. 58328 (August 7, 2008), 73 FR 48260 (August 18, 2008) (SR–NYSE–2008–45). NYSE Alternext is proposing no substantive changes in this filing from the rule text approved for NYSE by the Commission or adopted pursuant to an immediately effective filing, except to the extent that proposed Rule 98 (Former)–NYSE Alternext Equities is based on legacy Amex Rule 193. At the time NYSE Alternext Equities Rules were initially adopted, the Exchange adopted legacy Amex Rule 193 in place of NYSE Rules 98 and 98A. See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63). Thus, the proposed amendments to create Rule 98 (Former)–NYSE Alternext Equities differ in form, though not in substance, from those proposed to create NYSE Rule 98 (Former). 13 The NYSE modified its Allocation Policy to (i) Discontinue the use of the Specialist Performance Evaluation Questionnaire (‘‘SPEQ’’), (ii) establish a single quantifiable objective measure to determine a DMM unit’s eligibility to participate in the allocation process, and (iii) provide issuers with more choice in the selection of their DMM unit. As part of these modifications, the NYSE eliminated its Allocation Committee as the overseer of the allocation process and the Allocation Panel from which the Allocation Committee members were selected. The NYSE also eliminated its Market Performance Committee as the entity that responsible for reallocating securities. See Securities Exchange Act Release No. 58857 (October 24, 2008), 73 FR 65435 (November 3, 2008) (SR– NYSE–2008–52). The NYSE filing specified that at least three DMM units (out of six) shall be presented for selection by issuers. Because NYSE Alternext has fewer DMM units (four, instead of six), NYSE Alternext is proposing to change the number of DMM units presented to two. If three of the four firms are not eligible to receive new allocations under the Allocation rules (e.g., if they have not complied with the mandatory quoting requirements for new allocations), then the remaining eligible firm shall be required to apply for the allocation. In addition, the Exchange proposes to modify Sections IV(A) and VI(F) of Rule 103B–NYSE Alternext Equities to eliminate cross-references to other NYSE Rules that are inapplicable to NYSE Alternext. Specifically, in Section IV(A), the Exchange removed cross-references to Rule 806.01 of the NYSE Listed Company Manual, which concerns the reallocation of a security at the issuer’s request. The Exchange instead proposes to crossreference and add supplementary Rule 103B.10– NYSE Alternext Equities, which will track NYSE Listed Company Manual Rule 806.01. The NYSE Rule was adopted as immediately effective. See Securities Exchange Act Release No. 57232 (January 30, 2008), 73 FR 6755 (February 5, 2008) (SR– VerDate Aug<31>2005 13:59 Dec 02, 2008 Jkt 217001 • Amendments to various member firm conduct rules that are ‘‘Common Rules’’ shared with NYSE and the Financial Industry Regulatory Authority (‘‘FINRA’’) to conform with changes made by FINRA to its versions of these rules; 14 • Amendments to Rule 48–NYSE Alternext Equities concerning extremely volatile market conditions and closing procedures; 15 • Adoption of Rule 123B.30–NYSE Alternext Equities to provide for a standard sponsored access provision for the Exchange; 16 • Amendments to Rule 123D–NYSE Alternext Equities regarding the elimination of the provision governing sub-penny trading halts; 17 NYSE–2008–08). In Section VI(F) the Exchange proposes to change the cross-reference to Rule 102 of the NYSE Listed Company Manual to Section 101 of the NYSE Alternext Company Guide. 14 The amendments made by FINRA (and NYSE) include: (i) Replacing the term ‘‘allied member’’ with the newly defined category of ‘‘principal executive’’; (ii) repositioning and consolidating all ‘‘Buy-In’’ requirements and procedures (see Rules 283, 285–290–NYSE Alternext Equities) into one rule (Rule 282–NYSE Alternext Equities); (iii) moving certain provisions of Common Rules to other Common Rules; (iv) deleting Common Rules that are obsolete or no longer applicable; (v) eliminating certain provisions of Common Rules that do not have a corresponding NASD equivalent and therefore are unnecessary; (vi) amendments to further harmonize certain NYSE and NASD Rules; (vii) deleting Common Rules that are substantively duplicative of existing NASD Rules and procedures; (viii) limiting application of Common Rule 345(a) to securities lending representatives and supervisors only; and (ix) making corresponding technical changes to other rules as needed. See Securities Exchange Act Release No. 58549 (September 15, 2008), 73 FR 54444 (September 19, 2008) (SR–NYSE–2008–80). NYSE Alternext is not proposing any substantive changes in this filing different from the rule text approved for NYSE by the Commission or adopted pursuant to an immediately effective filing, although it is including corresponding technical changes to other rules not included in the original FINRA filing since they are not Common Rules subject to FINRA’s review (see Rules 17, 22, 25, 91, 93, 96, 99 (Former), 104T, 105, 112, 113 (Former), 122–123, 123G, 304–304A, 308–309, 410A, 422, 456–460–NYSE Alternext Equities and Non-NYSE Alternext Equities Rules 475–476A). In addition, FINRA did not make corresponding amendments to NYSE Rules 344 and 350 even though they are Common Rules. NYSE Alternext has included its version of these rules in its amendments. 15 The NYSE amended its Rule 48 to provide it with the ability to suspend certain requirements at the closing when extremely high market volatility could negatively affect the ability to ensure a fair and orderly close. See Securities Exchange Act Release No. 58743 (October 7, 2008), 73 FR 60742 (October 14, 2008) (SR–NYSE–2008–102). 16 See Securities Exchange Release No. 58429 (August 27, 2008), 73 FR 51676 (September 4, 2008) (SR–NYSE–2008–71) and Securities Exchange Act Release No. 58758 (October 8, 2008), 73 FR 62352 (October 20, 2008) (SR–NYSE–2008–100). 17 At the time Regulation NMS was originally implemented, the NYSE’s trading systems were not able to accommodate sub-penny executions on orders routed to better-priced protected quotations and could not recognize a quote disseminated by PO 00000 Frm 00048 Fmt 4703 Sfmt 4703 73685 • Modification of Rule 1000–NYSE Alternext Equities to change the Liquidity Replenishment Point (‘‘LRP’’) values; 18 • Amendments to Rule 431–NYSE Alternext Equities to codify the portfolio margin program set forth in paragraph (g) regarding (i) monitoring concentrated equity positions and (ii) timing of day trading margin calls; 19 • Adoption of an operative date of March 31, 2009, for Rule 92(c)(3)– Alternext Equities, to correspond with the operative date of NYSE Rule 92(c)(3); 20 and • Technical amendments to Rule 17– NYSE Alternext Equities.21 As noted in footnote 11, NYSE Alternext is retaining the net capital requirements it adopted with the NYSE Alternext Equities Rules (see current Rule 104.20, .23 and .24–NYSE Alternext Equities) but it will move them to new Rules 103.20 and .21– NYSE Alternext Equities to track the rule organization adopted by the NYSE. another market center if such quote had a subpenny component. To prevent its systems from inadvertently trading through better protected quotations, the NYSE adopted Rule 123D(3), which provided that trading would be halted in any security whose price was about to fall below $1.00 and to route any subsequent orders received for that security to NYSE Arca, Inc. The NYSE now has the technical capability to recognize protected quotations with a sub-penny component in its round-lot market and to accommodate away market executions in sub-pennies in compliance with Regulation NMS and so it removed Rule 123D(3). See Securities Exchange Act Release No. 58936 (November 13, 2008), 73 FR 69704 (November 19, 2008) (SR–NYSE–2008–117). 18 The NYSE amended its Rule 1000 to double the current LRP ranges in order to limit the number of times that an LRP is reached and the total number of times during the trading day that automatic execution is suspended as a result of an LRP being triggered. See Securities Exchange Act Release No. 58629 (September 24, 2008), 73 FR 57183 (October 1, 2008) (SR–NYSE–2008–85). 19 The NYSE amended its Common Rule 431 to conform with amendments made by FINRA to its version of the rule. See Securities Exchange Act Release Nos. 58261 and 58269 (July 30, 2008), 73 FR 46114 and 46116 (August 7, 2008) (SR–NYSE– 2008–65 and –66). 20 In July 2007, in connection with the on-going harmonization of NYSE Rule 92 with FINRA’s Manning Rule (NASD Rule 2111 and IM–2110–2), the NYSE amended Rule 92(c)(3) to require member firms to submit order execution reports to the NYSE’s Front End Systemic Capture (‘‘FESC’’) database when executing riskless principal transactions. Because the rule change has required both the NYSE and member firms to make certain technological changes to their trading and order management systems, and to provide additional time for NYSE and FINRA to fully harmonize NYSE Rule 92 and FINRA’s Manning Rule, the NYSE proposed delaying the operative date for implementation of NYSE Rule 92(c)(3) until March 31, 2009. See Securities Exchange Act Release No. 57682 (April 17, 2008), 73 FR 22193 (April 24, 2008) (SR–NYSE–2008–29). 21 See Securities Exchange Act Release No. 58137 (July 10, 2008), 73 FR 41145 (July 17, 2008) (SR– NYSE–2008–55). E:\FR\FM\03DEN1.SGM 03DEN1 73686 Federal Register / Vol. 73, No. 233 / Wednesday, December 3, 2008 / Notices jlentini on PROD1PC65 with NOTICES The Exchange is also adding provisions in 103.20(a)(i) and (ii) to provide that any Structured Products that are not subject to a trading halt pursuant to Rule 123D(4)–NYSE Alternext Equities as of the date of the Equities Relocation will be eligible to be allocated to a DMM if necessary until the security is halted and traded on NYSE Arca in accordance with that rule.22 The Exchange is also adding provisions (vii) through (x) to 103.20(a)– NYSE Alternext Equities. These provisions address DMM net capital issues, including the use of financing to meet net capital requirements, the requirement that a DMM meet the net capital requirements without including an investment account and the so-called ‘‘early warning’’ requirements. These provisions were supposed to have been included in the original NYSE Alternext Equities filing but were mistakenly not included.23 In addition, the Exchange proposes to amend Rule 440H–NYSE Alternext Equities concerning accumulated Section 31 fees held by the Exchange and its members and member organizations. In May 2008, the Commission approved Amex’s (the Exchange’s predecessor) adoption of Commentary .01 to Rule 393, which allows firms, on a one-time-only basis, to voluntarily remit to the Exchange historically accumulated Section 31 funds, which may be used to pay the Exchange’s current Section 31 fees. In addition, a member or member organization may designate all or part of the accumulated fees held by the Exchange and allocated to such member to be used by the Exchange in accordance with the Rule. To the extent the payment of these historically accumulated funds or Exchange accumulated funds is in excess of the Section 31 fees due the Commission from the Exchange, such surplus shall be used by the Exchange to offset regulatory costs. The Exchange recently filed to extend the provisions of Commentary .01 to Rule 393 until January 13, 2009, and proposes amendments to Rule 440H–NYSE 22 See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation). The new language included in 103.20(a)(i) and (ii) was approved in the filing for the NMM submitted by the NYSE. See Securities Exchange Act Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008) (SR–NYSE–2008– 46) (adopting NMM). 23 See Non-NYSE Alternext Equities Rule 171, Commentaries .01, .03, .06 and .07. These provisions were filed and approved by the Commission. See, e.g., Securities Exchange Act Release No. 47703 (April 18, 2003), 68 FR 22425 (April 28, 2003) (SR–AMEX–2002–104). VerDate Aug<31>2005 13:59 Dec 02, 2008 Jkt 217001 Alternext Equities to accommodate the extension and to ensure its applicability to Exchange members and member organizations operating under the NYSE Alternext Equities Rules after the Equities Relocation.24 The Exchange also proposes to adopt a new Rule 128–NYSE Alternext Equities concerning clearly erroneous executions, which will be operative until January 9, 2009. As described in the related rule filing, at the time the Exchange adopted the NYSE Alternext Equities Rules, it did not import the NYSE’s rule governing clearly erroneous executions (NYSE Rule 128) because it was under review and was anticipated that it would be amended prior to the date of the Equities Relocation. However, that has not happened and the Exchange now proposes to delete the current Rule 128–NYSE Alternext Equities and adopt a new Rule 128– NYSE Alternext Equities that is based on the NYSE’s current Rule 128. In this way the two exchanges will have the same clearly erroneous execution procedures that are operative during the same time frame.25 Finally, the Exchange proposes additional technical amendments to Rules 51–, 55–, 61–, 72–, 79A–, 86– and 123D–NYSE Alternext Equities to reflect proper internal cross-references to other NYSE Alternext Equities rules and to Rules 342.16–.19–NYSE Alternext Equities to add text inadvertently left out of the NYSE Alternext Equities rule set when it was adopted.26 Operative Date The Exchange proposes that the operative date of the proposed rule changes be the date of the Equities and Bonds Relocations, currently scheduled for December 1, 2008. 24 See Securities Exchange Act Release No. 58933 (November 12, 2008), 73 FR 69712 (November 19, 2008) (SR–NYSEALT–2008–05) (proposed extension of Commentary .01 to Rule 393 concerning accumulated Section 31 fees). See also Securities Exchange Act Release No. 58108 (July 7, 2008), 73 FR 40413 (July 14, 2008) (SR–NYSE– 2007–64) (approving similar amendments to NYSE Rule 440H). 25 See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation). The NYSE’s current version of its Rule 128 was approved by the Commission in February 2008 and is operative until January 9, 2009. See Securities Exchange Act Release No. 57323 (February 13, 2008), 73 FR 9371 (February 20, 2008) (SR–NYSE–2008–09) (adopting NYSE Rule 128); Securities Exchange Act Release No. 58732 (October 3, 2008), 73 FR 61183 (October 15, 2008) (SR– NYSE–2008–99) (extending the sunset provision of the rule). 26 See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation). PO 00000 Frm 00049 Fmt 4703 Sfmt 4703 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,27 in general, and furthers the objectives of Section 6(b)(5) of the Act,28 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 proposed rule changes also support the principles of Section 11A(a)(1) 29 of the Act in that they seek to ensure the economically efficient execution of securities transactions and fair competition among brokers and dealers and among exchange markets. The Exchange believes that the proposed rule changes are necessary and appropriate to reflect the recent changes to the NYSE Alternext market, the NYSE Alternext Trading Systems and the member conduct rules that govern NYSE Alternext members and member organizations. 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 No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The Exchange believes that this proposal qualifies for immediate effectiveness upon filing as a noncontroversial rule change pursuant to Section 19(b)(3)(A) of the Act 30 and Rule 19b–4(f)(6) thereunder.31 The Exchange asserts that the proposed rule change (i) Will not significantly affect the protection of investors or the public interest, (ii) will not impose any significant burden on competition, and (iii) by its terms, will not become operative for 30 days after the date of this filing, or such shorter time as the 27 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 29 15 U.S.C. 78k–1(a)(1). 30 15 U.S.C. 78s(b)(3)(A). 31 17 CFR 240.19b–4(f)(6). 28 15 E:\FR\FM\03DEN1.SGM 03DEN1 Federal Register / Vol. 73, No. 233 / Wednesday, December 3, 2008 / Notices jlentini on PROD1PC65 with NOTICES Commission may designate, if consistent with the protection of investors and the public interest.32 NYSE Alternext has requested that the Commission waive the 30-day operative delay and designate the proposal as operative as of December 1, 2008. NYSE Alternext notes that it has previously announced its intention to relocate its equities and bonds trading from the 86 Trinity Trading Systems to the NYSE Alternext Trading Systems and NYSE Alternext Bonds on December 1, 2008, and has previously advised the Commission staff of its intention to harmonize the rules between NYSE and NYSE Alternext in order to facilitate this transition. NYSE Alternext further notes that relocating the trading is a complex operation that involves numerous simultaneous actions. NYSE Alternext argues that the 30-day waiting period would make it impossible for NYSE Alternext to meet the December 1, 2008 relocation deadline, which would adversely affect the competitiveness of the Exchange and its members, and would impair the ability of investors and public customers of those members to effectively trade their securities. Moreover, the Exchange believes that this filing is non-controversial because it raises no novel issues and is consistent with the Commission’s prior approvals of the rule filings upon which this filing is modeled.33 As noted above, the proposed rule change is based on rule text that was previously approved by the Commission for NYSE or previously submitted by NYSE for immediate effectiveness. Except as specifically noted, and subject to such minor technical changes as are necessary to apply the rules to the Exchange, NYSE Alternext is adopting the NYSE rules in the form that they were approved by the Commission for NYSE. The Commission hereby grants the Exchange’s request 34 and believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest. The rules being adopted through this filing are based on previously established rules of NYSE (or in a few cases Amex), 32 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) requires a self-regulatory organization to give the Commission written notice of its intent to file 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 Exchange has satisfied this requirement. 33 See supra footnotes 12–27 for a list of all relevant filings. 34 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). VerDate Aug<31>2005 13:59 Dec 02, 2008 Jkt 217001 73687 submitted on or before December 24, 2008. and they do not appear to raise any novel or significant issues. Furthermore, waiving the operative delay will facilitate the Equities and Bonds Relocations, which are scheduled to occur on December 1, 2008. Therefore, the Commission designates the proposal operative as of December 1, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.35 J. Lynn Taylor, Assistant Secretary. [FR Doc. E8–28680 Filed 12–2–08; 8:45 am] IV. Solicitation of Comments BILLING CODE 8011–01–P 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 Number SR–NYSEALTR–2008–10 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–NYSEALTR–2008–10. 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, 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– NYSEALTR–2008–10 and should be PO 00000 Frm 00050 Fmt 4703 Sfmt 4703 DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Notice of Intent To Request Revision From the Office of Management and Budget of a Currently Approved Information Collection Activity, Request for Comments; Agricultural Aircraft Operator Certificate Application Federal Aviation Administration (FAA), DOT. ACTION: Notice and request for comments. AGENCY: SUMMARY: The FAA invites public comments about our intention to request the Office of Management and Budget (OMB) to approve a current information collection. Certain organizations may apply to perform certification functions on behalf of the FAA. Standards have been established for the certification of agricultural aircraft. The information collected shows applicant compliance and eligibility for certification by FAA. DATES: Please submit comments by February 2, 2009. FOR FURTHER INFORMATION CONTACT: Carla Mauney on (202) 267–9895, or by e-mail at: Carla.Mauney@faa.gov. SUPPLEMENTARY INFORMATION: Federal Aviation Administration (FAA) Title: Agricultural Aircraft Operator Certificate Application. Type of Request: Extension without change of an approved collection. OMB Control Number: 2120–0049. Form(s): 8710–3. Affected Public: A total of 3,980 Respondents. Frequency: The information is collected on occasion. Estimated Average Burden per Response: Approximately 3.5 hours per response. Estimated Annual Burden Hours: An estimated 14,037 hours annually. Abstract: Standards have been established for the certification of agricultural aircraft. The information collected shows applicant compliance and eligibility for certification by FAA. 35 17 E:\FR\FM\03DEN1.SGM CFR 200.30–3(a)(12). 03DEN1

Agencies

[Federal Register Volume 73, Number 233 (Wednesday, December 3, 2008)]
[Notices]
[Pages 73683-73687]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-28680]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59022; File No. SR-NYSEALTR-2008-10]


Self-Regulatory Organizations; NYSE Alternext U.S. LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Conform 
Its Rules With Those of the New York Stock Exchange

November 26, 2008.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on November 26, 2008, NYSE Alternext U.S. LLC (the ``Exchange'' 
or ``NYSE Alternext'') filed with the Securities and Exchange 
Commission (the ``Commission'') the proposed rule change as described 
in Items I and II below, which Items have been prepared by the self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend certain NYSE Alternext Equities 
Rules to conform with amendments to certain NYSE Rules filed by the New 
York Stock Exchange LLC (``NYSE''), and also additional technical 
amendments.

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 those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements. The text of the proposed rule 
change is available on the Exchange's Web site, at the Exchange's 
principal office, and at the Commission's Public Reference Room.

[[Page 73684]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule changes is to amend certain NYSE 
Alternext Equities Rules to conform with amendments to certain NYSE 
Rules filed by the NYSE.
Background
    As described more fully in a related rule filing, NYSE Euronext 
acquired The Amex Membership Corporation (``AMC'') pursuant to an 
Agreement and Plan of Merger, dated January 17, 2008 (the ``Merger''). 
In connection with the Merger, the Exchange's predecessor, the American 
Stock Exchange LLC (``Amex''), a subsidiary of AMC, became a subsidiary 
of NYSE Euronext called NYSE Alternext U.S. LLC,\3\ and will continue 
to operate as a national securities exchange registered under Section 6 
of the Act.\4\ The effective date of the Merger was October 1, 2008.
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    \3\ See Securities Exchange Act Release No. 58673 (September 29, 
2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60 and SR-Amex 
2008-62) (approving the Merger).
    \4\ 15 U.S.C. 78f.
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    In connection with the Merger, the Exchange will relocate all 
equities trading conducted on the Exchange legacy trading systems and 
facilities located at 86 Trinity Place, New York, New York (the ``86 
Trinity Trading Systems''), to trading systems and facilities located 
at 11 Wall Street, New York, New York (the ``Equities Relocation''). 
The Exchange's equity trading systems and facilities at 11 Wall Street 
(the ``NYSE Alternext Trading Systems'') will be operated by the NYSE 
on behalf of the Exchange.\5\
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    \5\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation).
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    Similarly, the Exchange will relocate the trading of certain debt 
securities currently conducted on the 86 Trinity Trading Systems to an 
automated bond trading system (the ``Bonds Relocation'') that will be 
operated by the NYSE on behalf of the Exchange (``NYSE Alternext 
Bonds''). The Exchange will also relocate all options trading currently 
conducted on the 86 Trinity Trading Systems to new facilities of the 
Exchange to be located at 11 Wall Street, which will use a trading 
system based on the options trading system used by NYSE Arca, Inc. 
(``NYSE Arca'') (the ``Options Relocation'').\6\
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    \6\ See Securities Exchange Act Release No. 58833 (October 22, 
2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-106) and 
Securities Exchange Act Release No. 58839 (October 23, 2008), 73 FR 
64645 (October 30, 2008) (SR-NYSEALTR-2008-03) (together, approving 
the Bonds Relocation). The Exchange will submit a separate rule 
filing to adopt a new rule set to govern NYSE Alternext options 
trading following the Options Relocation.
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    Post-Merger, all Exchange members and member organizations that 
were authorized to trade on the Exchange before the Merger will receive 
trading permits (referred to as ``86 Trinity Permits'') that authorize 
continued trading on the 86 Trinity Trading Systems. Holders of the 86 
Trinity Permits are eligible to apply for NYSE Alternext equities 
trading licenses or options trading permits upon the Equities or 
Options Relocation, as applicable.\7\ In addition, pursuant to the 
Merger, all NYSE Alternext members and member organizations that apply 
for NYSE Alternext equities trading licenses are automatically waived 
in as NYSE members and member organizations.\8\ Similarly, all NYSE 
members and member organizations are automatically waived in as NYSE 
Alternext members and member organizations.\9\
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    \7\ See Securities Exchange Act Release No. 58706 (October 1, 
2008), 73 FR 59019 (October 8, 2008) (SR-NYSE-2008-70) (describing 
and approving membership rule changes related to the Merger); 
Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 
58995 (October 8, 2008) (SR-Amex 2008-63) (approving the Equities 
Relocation).
    \8\ See NYSE Rules 2.10 and 2.20. NYSE Alternext members and 
member organizations will have a six-month grace period within which 
to meet NYSE and NYSE Alternext Equities membership requirements. 
See NYSE Rule 300.10T and NYSE Alternext Equities Rule 300.10T.
    \9\ See NYSE Alternext Equities Rules 2.10 and .20.
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The NYSE Alternext Equities Rules
    In order to implement the Equities and Bonds Relocations, the 
Exchange adopted NYSE Rules 1-1004 as the NYSE Alternext Equities Rules 
to govern all equities trading on the NYSE Alternext Trading Systems 
and NYSE Alternext Bonds. Because the NYSE Alternext Trading Systems 
and NYSE Alternext Bonds will be operated by the NYSE on behalf of the 
Exchange, the NYSE Alternext Equities Rules are substantially identical 
to the existing NYSE Rules, subject to such changes as were necessary 
to apply the rules to the Exchange. The NYSE Alternext Equities Rules 
are based on the NYSE Rules in their form as of July 18, 2008. NYSE 
Alternext Equities Rule 86, which is the principal rule governing 
trading on NYSE Alternext Bonds, is based on NYSE Rule 86 in the form 
it existed as of October 1, 2008.\10\
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    \10\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation). See also Securities Exchange Act Release 
No. 58833 (October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-
NYSE-2008-106) and Securities Exchange Act Release No. 58839 
(October 23, 2008), 73 FR 64645 (October 30, 2008) (SR-NYSEALTR-
2008-03) (together, approving the Bonds Relocation).
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Proposed Amendments to NYSE Alternext Equities Rules
    The NYSE Alternext Equities Rules will become operative as of the 
date of the Equities and Bonds Relocations. In the interim period since 
the filing and approval of the Equities Relocation, the NYSE has filed 
rule changes to some of its rules governing trading on its trading 
systems that would also impact trading on the NYSE Alternext Trading 
Systems and NYSE Alternext Bonds. The Exchange therefore proposes to 
amend the NYSE Alternext Equities Rules to conform to these rule 
changes, subject to such minor, technical changes as are necessary to 
apply the amended rules to the Exchange. Unless specifically noted, 
NYSE Alternext is proposing no substantive changes in this filing from 
the rule text approved for NYSE by the Commission or adopted pursuant 
to an immediately effective filing. The changes are summarized broadly 
below:
     Revisions and amendments to various NYSE Alternext and 
NYSE Alternext Equities rules necessary to implement the ``New Market 
Model'' adopted by the NYSE (``NMM''); \11\
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    \11\ In adopting what it calls the ``New Market Model'', the 
NYSE proposed a number of changes to its marketplace, including (i) 
Providing market participants with additional abilities to post 
hidden liquidity on Exchange systems; (ii) creating a Designated 
Market Maker (``DMM'') and phasing out the NYSE specialist; and 
(iii) enhancing the speed of execution through technological 
enhancements and a reduction in message traffic between NYSE trading 
systems and its DMMs. See Securities Exchange Act Release No. 58845 
(October 24, 2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) 
(adopting NMM). See also Securities Exchange Act Release No. 58971 
(November 17, 2008), 73 FR 71070 (November 24, 2008) (SR-NYSE-2008-
115) (amendments thereto).
    With the exception of the DMM net capital requirements 
(addressed separately in this filing), NYSE Alternext is not 
proposing any additional substantive changes in this filing 
different from the rule text approved for NYSE by the Commission or 
adopted pursuant to an immediately effective filing, although it is 
including corresponding technical rule changes to change references 
to ``specialists'' or internal cross-references that were incorrect 
or not included in the original NYSE filings (see Rules 2A(c)-, 
15(b)-, 70.25-, 92(d)-, 98(c)-, 123(g)-, 123E(f)-, 124(f)-, 325-, 
431-, 440G.10- and 900-(chart of rules)-NYSE Alternext Equities).
---------------------------------------------------------------------------

     Revision of Rule 98-NYSE Alternext Equities and amendments 
to related rules (including the deletion of Rule 102-NYSE Alternext 
Equities) concerning the structure and operation of member organization 
specialist (now known as ``DMMs'') units and risk management; \12\
---------------------------------------------------------------------------

    \12\ The NYSE revised the regulatory requirements under its Rule 
98 concerning how member organizations structure their DMM 
operations and manage their risks, including: (i) Redefining the 
persons to whom NYSE Rule 98 would apply; (ii) allowing DMM 
operations to be integrated into better capitalized member 
organizations; (iii) permitting a DMM unit to share nontrading-
related services with its parent member organization or approved 
persons; and (iv) providing flexibility to member organizations and 
their approved persons in how to conduct risk management of DMM 
operations. In addition the NYSE also made conforming amendments to 
other NYSE rules that rely on NYSE Rule 98 exemptions for approved 
persons. See Securities Exchange Act Release No. 58328 (August 7, 
2008), 73 FR 48260 (August 18, 2008) (SR-NYSE-2008-45).
    NYSE Alternext is proposing no substantive changes in this 
filing from the rule text approved for NYSE by the Commission or 
adopted pursuant to an immediately effective filing, except to the 
extent that proposed Rule 98 (Former)-NYSE Alternext Equities is 
based on legacy Amex Rule 193. At the time NYSE Alternext Equities 
Rules were initially adopted, the Exchange adopted legacy Amex Rule 
193 in place of NYSE Rules 98 and 98A. See Securities Exchange Act 
Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) 
(SR-Amex 2008-63). Thus, the proposed amendments to create Rule 98 
(Former)-NYSE Alternext Equities differ in form, though not in 
substance, from those proposed to create NYSE Rule 98 (Former).

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[[Page 73685]]

     Revisions to Rules 103A-NYSE Alternext Equities and 103B-
NYSE Alternext Equities, Non-NYSE Alternext Equities Rule 476A, and 
amendments to related rules (including the deletion of Rule 106-NYSE 
Alternext Equities) concerning the allocation of registered securities 
to DMMs; \13\
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    \13\ The NYSE modified its Allocation Policy to (i) Discontinue 
the use of the Specialist Performance Evaluation Questionnaire 
(``SPEQ''), (ii) establish a single quantifiable objective measure 
to determine a DMM unit's eligibility to participate in the 
allocation process, and (iii) provide issuers with more choice in 
the selection of their DMM unit. As part of these modifications, the 
NYSE eliminated its Allocation Committee as the overseer of the 
allocation process and the Allocation Panel from which the 
Allocation Committee members were selected. The NYSE also eliminated 
its Market Performance Committee as the entity that responsible for 
reallocating securities. See Securities Exchange Act Release No. 
58857 (October 24, 2008), 73 FR 65435 (November 3, 2008) (SR-NYSE-
2008-52). The NYSE filing specified that at least three DMM units 
(out of six) shall be presented for selection by issuers. Because 
NYSE Alternext has fewer DMM units (four, instead of six), NYSE 
Alternext is proposing to change the number of DMM units presented 
to two. If three of the four firms are not eligible to receive new 
allocations under the Allocation rules (e.g., if they have not 
complied with the mandatory quoting requirements for new 
allocations), then the remaining eligible firm shall be required to 
apply for the allocation.
    In addition, the Exchange proposes to modify Sections IV(A) and 
VI(F) of Rule 103B-NYSE Alternext Equities to eliminate cross-
references to other NYSE Rules that are inapplicable to NYSE 
Alternext. Specifically, in Section IV(A), the Exchange removed 
cross-references to Rule 806.01 of the NYSE Listed Company Manual, 
which concerns the reallocation of a security at the issuer's 
request. The Exchange instead proposes to cross-reference and add 
supplementary Rule 103B.10-NYSE Alternext Equities, which will track 
NYSE Listed Company Manual Rule 806.01. The NYSE Rule was adopted as 
immediately effective. See Securities Exchange Act Release No. 57232 
(January 30, 2008), 73 FR 6755 (February 5, 2008) (SR-NYSE-2008-08). 
In Section VI(F) the Exchange proposes to change the cross-reference 
to Rule 102 of the NYSE Listed Company Manual to Section 101 of the 
NYSE Alternext Company Guide.
---------------------------------------------------------------------------

     Amendments to various member firm conduct rules that are 
``Common Rules'' shared with NYSE and the Financial Industry Regulatory 
Authority (``FINRA'') to conform with changes made by FINRA to its 
versions of these rules; \14\
---------------------------------------------------------------------------

    \14\ The amendments made by FINRA (and NYSE) include: (i) 
Replacing the term ``allied member'' with the newly defined category 
of ``principal executive''; (ii) repositioning and consolidating all 
``Buy-In'' requirements and procedures (see Rules 283, 285-290-NYSE 
Alternext Equities) into one rule (Rule 282-NYSE Alternext 
Equities); (iii) moving certain provisions of Common Rules to other 
Common Rules; (iv) deleting Common Rules that are obsolete or no 
longer applicable; (v) eliminating certain provisions of Common 
Rules that do not have a corresponding NASD equivalent and therefore 
are unnecessary; (vi) amendments to further harmonize certain NYSE 
and NASD Rules; (vii) deleting Common Rules that are substantively 
duplicative of existing NASD Rules and procedures; (viii) limiting 
application of Common Rule 345(a) to securities lending 
representatives and supervisors only; and (ix) making corresponding 
technical changes to other rules as needed. See Securities Exchange 
Act Release No. 58549 (September 15, 2008), 73 FR 54444 (September 
19, 2008) (SR-NYSE-2008-80).
    NYSE Alternext is not proposing any substantive changes in this 
filing different from the rule text approved for NYSE by the 
Commission or adopted pursuant to an immediately effective filing, 
although it is including corresponding technical changes to other 
rules not included in the original FINRA filing since they are not 
Common Rules subject to FINRA's review (see Rules 17, 22, 25, 91, 
93, 96, 99 (Former), 104T, 105, 112, 113 (Former), 122-123, 123G, 
304-304A, 308-309, 410A, 422, 456-460-NYSE Alternext Equities and 
Non-NYSE Alternext Equities Rules 475-476A). In addition, FINRA did 
not make corresponding amendments to NYSE Rules 344 and 350 even 
though they are Common Rules. NYSE Alternext has included its 
version of these rules in its amendments.
---------------------------------------------------------------------------

     Amendments to Rule 48-NYSE Alternext Equities concerning 
extremely volatile market conditions and closing procedures; \15\
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    \15\ The NYSE amended its Rule 48 to provide it with the ability 
to suspend certain requirements at the closing when extremely high 
market volatility could negatively affect the ability to ensure a 
fair and orderly close. See Securities Exchange Act Release No. 
58743 (October 7, 2008), 73 FR 60742 (October 14, 2008) (SR-NYSE-
2008-102).
---------------------------------------------------------------------------

     Adoption of Rule 123B.30-NYSE Alternext Equities to 
provide for a standard sponsored access provision for the Exchange; 
\16\
---------------------------------------------------------------------------

    \16\ See Securities Exchange Release No. 58429 (August 27, 
2008), 73 FR 51676 (September 4, 2008) (SR-NYSE-2008-71) and 
Securities Exchange Act Release No. 58758 (October 8, 2008), 73 FR 
62352 (October 20, 2008) (SR-NYSE-2008-100).
---------------------------------------------------------------------------

     Amendments to Rule 123D-NYSE Alternext Equities regarding 
the elimination of the provision governing sub-penny trading halts; 
\17\
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    \17\ At the time Regulation NMS was originally implemented, the 
NYSE's trading systems were not able to accommodate sub-penny 
executions on orders routed to better-priced protected quotations 
and could not recognize a quote disseminated by another market 
center if such quote had a sub-penny component. To prevent its 
systems from inadvertently trading through better protected 
quotations, the NYSE adopted Rule 123D(3), which provided that 
trading would be halted in any security whose price was about to 
fall below $1.00 and to route any subsequent orders received for 
that security to NYSE Arca, Inc. The NYSE now has the technical 
capability to recognize protected quotations with a sub-penny 
component in its round-lot market and to accommodate away market 
executions in sub-pennies in compliance with Regulation NMS and so 
it removed Rule 123D(3). See Securities Exchange Act Release No. 
58936 (November 13, 2008), 73 FR 69704 (November 19, 2008) (SR-NYSE-
2008-117).
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     Modification of Rule 1000-NYSE Alternext Equities to 
change the Liquidity Replenishment Point (``LRP'') values; \18\
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    \18\ The NYSE amended its Rule 1000 to double the current LRP 
ranges in order to limit the number of times that an LRP is reached 
and the total number of times during the trading day that automatic 
execution is suspended as a result of an LRP being triggered. See 
Securities Exchange Act Release No. 58629 (September 24, 2008), 73 
FR 57183 (October 1, 2008) (SR-NYSE-2008-85).
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     Amendments to Rule 431-NYSE Alternext Equities to codify 
the portfolio margin program set forth in paragraph (g) regarding (i) 
monitoring concentrated equity positions and (ii) timing of day trading 
margin calls; \19\
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    \19\ The NYSE amended its Common Rule 431 to conform with 
amendments made by FINRA to its version of the rule. See Securities 
Exchange Act Release Nos. 58261 and 58269 (July 30, 2008), 73 FR 
46114 and 46116 (August 7, 2008) (SR-NYSE-2008-65 and -66).
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     Adoption of an operative date of March 31, 2009, for Rule 
92(c)(3)-Alternext Equities, to correspond with the operative date of 
NYSE Rule 92(c)(3); \20\ and
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    \20\ In July 2007, in connection with the on-going harmonization 
of NYSE Rule 92 with FINRA's Manning Rule (NASD Rule 2111 and IM-
2110-2), the NYSE amended Rule 92(c)(3) to require member firms to 
submit order execution reports to the NYSE's Front End Systemic 
Capture (``FESC'') database when executing riskless principal 
transactions. Because the rule change has required both the NYSE and 
member firms to make certain technological changes to their trading 
and order management systems, and to provide additional time for 
NYSE and FINRA to fully harmonize NYSE Rule 92 and FINRA's Manning 
Rule, the NYSE proposed delaying the operative date for 
implementation of NYSE Rule 92(c)(3) until March 31, 2009. See 
Securities Exchange Act Release No. 57682 (April 17, 2008), 73 FR 
22193 (April 24, 2008) (SR-NYSE-2008-29).
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     Technical amendments to Rule 17-NYSE Alternext 
Equities.\21\
---------------------------------------------------------------------------

    \21\ See Securities Exchange Act Release No. 58137 (July 10, 
2008), 73 FR 41145 (July 17, 2008) (SR-NYSE-2008-55).
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    As noted in footnote 11, NYSE Alternext is retaining the net 
capital requirements it adopted with the NYSE Alternext Equities Rules 
(see current Rule 104.20, .23 and .24-NYSE Alternext Equities) but it 
will move them to new Rules 103.20 and .21-NYSE Alternext Equities to 
track the rule organization adopted by the NYSE.

[[Page 73686]]

The Exchange is also adding provisions in 103.20(a)(i) and (ii) to 
provide that any Structured Products that are not subject to a trading 
halt pursuant to Rule 123D(4)-NYSE Alternext Equities as of the date of 
the Equities Relocation will be eligible to be allocated to a DMM if 
necessary until the security is halted and traded on NYSE Arca in 
accordance with that rule.\22\
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    \22\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation). The new language included in 103.20(a)(i) 
and (ii) was approved in the filing for the NMM submitted by the 
NYSE. See Securities Exchange Act Release No. 58845 (October 24, 
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) (adopting 
NMM).
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    The Exchange is also adding provisions (vii) through (x) to 
103.20(a)-NYSE Alternext Equities. These provisions address DMM net 
capital issues, including the use of financing to meet net capital 
requirements, the requirement that a DMM meet the net capital 
requirements without including an investment account and the so-called 
``early warning'' requirements. These provisions were supposed to have 
been included in the original NYSE Alternext Equities filing but were 
mistakenly not included.\23\
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    \23\ See Non-NYSE Alternext Equities Rule 171, Commentaries .01, 
.03, .06 and .07. These provisions were filed and approved by the 
Commission. See, e.g., Securities Exchange Act Release No. 47703 
(April 18, 2003), 68 FR 22425 (April 28, 2003) (SR-AMEX-2002-104).
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    In addition, the Exchange proposes to amend Rule 440H-NYSE 
Alternext Equities concerning accumulated Section 31 fees held by the 
Exchange and its members and member organizations. In May 2008, the 
Commission approved Amex's (the Exchange's predecessor) adoption of 
Commentary .01 to Rule 393, which allows firms, on a one-time-only 
basis, to voluntarily remit to the Exchange historically accumulated 
Section 31 funds, which may be used to pay the Exchange's current 
Section 31 fees. In addition, a member or member organization may 
designate all or part of the accumulated fees held by the Exchange and 
allocated to such member to be used by the Exchange in accordance with 
the Rule. To the extent the payment of these historically accumulated 
funds or Exchange accumulated funds is in excess of the Section 31 fees 
due the Commission from the Exchange, such surplus shall be used by the 
Exchange to offset regulatory costs. The Exchange recently filed to 
extend the provisions of Commentary .01 to Rule 393 until January 13, 
2009, and proposes amendments to Rule 440H-NYSE Alternext Equities to 
accommodate the extension and to ensure its applicability to Exchange 
members and member organizations operating under the NYSE Alternext 
Equities Rules after the Equities Relocation.\24\
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    \24\ See Securities Exchange Act Release No. 58933 (November 12, 
2008), 73 FR 69712 (November 19, 2008) (SR-NYSEALT-2008-05) 
(proposed extension of Commentary .01 to Rule 393 concerning 
accumulated Section 31 fees). See also Securities Exchange Act 
Release No. 58108 (July 7, 2008), 73 FR 40413 (July 14, 2008) (SR-
NYSE-2007-64) (approving similar amendments to NYSE Rule 440H).
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    The Exchange also proposes to adopt a new Rule 128-NYSE Alternext 
Equities concerning clearly erroneous executions, which will be 
operative until January 9, 2009. As described in the related rule 
filing, at the time the Exchange adopted the NYSE Alternext Equities 
Rules, it did not import the NYSE's rule governing clearly erroneous 
executions (NYSE Rule 128) because it was under review and was 
anticipated that it would be amended prior to the date of the Equities 
Relocation. However, that has not happened and the Exchange now 
proposes to delete the current Rule 128-NYSE Alternext Equities and 
adopt a new Rule 128-NYSE Alternext Equities that is based on the 
NYSE's current Rule 128. In this way the two exchanges will have the 
same clearly erroneous execution procedures that are operative during 
the same time frame.\25\
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    \25\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation). The NYSE's current version of its Rule 128 
was approved by the Commission in February 2008 and is operative 
until January 9, 2009. See Securities Exchange Act Release No. 57323 
(February 13, 2008), 73 FR 9371 (February 20, 2008) (SR-NYSE-2008-
09) (adopting NYSE Rule 128); Securities Exchange Act Release No. 
58732 (October 3, 2008), 73 FR 61183 (October 15, 2008) (SR-NYSE-
2008-99) (extending the sunset provision of the rule).
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    Finally, the Exchange proposes additional technical amendments to 
Rules 51-, 55-, 61-, 72-, 79A-, 86- and 123D-NYSE Alternext Equities to 
reflect proper internal cross-references to other NYSE Alternext 
Equities rules and to Rules 342.16-.19-NYSE Alternext Equities to add 
text inadvertently left out of the NYSE Alternext Equities rule set 
when it was adopted.\26\
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    \26\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation).
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Operative Date
    The Exchange proposes that the operative date of the proposed rule 
changes be the date of the Equities and Bonds Relocations, currently 
scheduled for December 1, 2008.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\27\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\28\ 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 
proposed rule changes also support the principles of Section 11A(a)(1) 
\29\ of the Act in that they seek to ensure the economically efficient 
execution of securities transactions and fair competition among brokers 
and dealers and among exchange markets. The Exchange believes that the 
proposed rule changes are necessary and appropriate to reflect the 
recent changes to the NYSE Alternext market, the NYSE Alternext Trading 
Systems and the member conduct rules that govern NYSE Alternext members 
and member organizations.
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    \27\ 15 U.S.C. 78f(b).
    \28\ 15 U.S.C. 78f(b)(5).
    \29\ 15 U.S.C. 78k-1(a)(1).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition 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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange believes that this proposal qualifies for immediate 
effectiveness upon filing as a non-controversial rule change pursuant 
to Section 19(b)(3)(A) of the Act \30\ and Rule 19b-4(f)(6) 
thereunder.\31\ The Exchange asserts that the proposed rule change (i) 
Will not significantly affect the protection of investors or the public 
interest, (ii) will not impose any significant burden on competition, 
and (iii) by its terms, will not become operative for 30 days after the 
date of this filing, or such shorter time as the

[[Page 73687]]

Commission may designate, if consistent with the protection of 
investors and the public interest.\32\
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    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 17 CFR 240.19b-4(f)(6).
    \32\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 Exchange has satisfied this requirement.
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    NYSE Alternext has requested that the Commission waive the 30-day 
operative delay and designate the proposal as operative as of December 
1, 2008. NYSE Alternext notes that it has previously announced its 
intention to relocate its equities and bonds trading from the 86 
Trinity Trading Systems to the NYSE Alternext Trading Systems and NYSE 
Alternext Bonds on December 1, 2008, and has previously advised the 
Commission staff of its intention to harmonize the rules between NYSE 
and NYSE Alternext in order to facilitate this transition. NYSE 
Alternext further notes that relocating the trading is a complex 
operation that involves numerous simultaneous actions. NYSE Alternext 
argues that the 30-day waiting period would make it impossible for NYSE 
Alternext to meet the December 1, 2008 relocation deadline, which would 
adversely affect the competitiveness of the Exchange and its members, 
and would impair the ability of investors and public customers of those 
members to effectively trade their securities.
    Moreover, the Exchange believes that this filing is non-
controversial because it raises no novel issues and is consistent with 
the Commission's prior approvals of the rule filings upon which this 
filing is modeled.\33\ As noted above, the proposed rule change is 
based on rule text that was previously approved by the Commission for 
NYSE or previously submitted by NYSE for immediate effectiveness. 
Except as specifically noted, and subject to such minor technical 
changes as are necessary to apply the rules to the Exchange, NYSE 
Alternext is adopting the NYSE rules in the form that they were 
approved by the Commission for NYSE.
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    \33\ See supra footnotes 12-27 for a list of all relevant 
filings.
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    The Commission hereby grants the Exchange's request \34\ and 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest. The rules being 
adopted through this filing are based on previously established rules 
of NYSE (or in a few cases Amex), and they do not appear to raise any 
novel or significant issues. Furthermore, waiving the operative delay 
will facilitate the Equities and Bonds Relocations, which are scheduled 
to occur on December 1, 2008. Therefore, the Commission designates the 
proposal operative as of December 1, 2008.
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    \34\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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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 Number SR-NYSEALTR-2008-10 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-NYSEALTR-2008-10. 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, 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-NYSEALTR-2008-10 and should be submitted on or before 
December 24, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\35\
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    \35\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8-28680 Filed 12-2-08; 8:45 am]
BILLING CODE 8011-01-P