Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving Proposed Rule Change To Adopt a Policy Relating to Its Treatment of Trade Reports That It Determines To Be Inconsistent With the Prevailing Market, 76082-76084 [E8-29558]
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Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Notices
part of the complete operation of the
New Model related to RCMM and CT
trading. Once Phase 2 implementation is
complete, the NYSE will have the fuller
data set to decide what roles, if any,
RCMMs and CTs should perform at the
NYSE. Thereafter, the Exchange will
formally submit a proposal to the
Commission outlining the roles, if any,
these classes of traders have in the
Exchange’s New Model market. The
Exchange is therefore proposing to
extend the Moratorium as amended 10
for an additional three (3) months to
March 31, 2009 in order to finalize its
determination as to the roles of RCMMs
and CTs at the NYSE.
The Exchange will issue an
Information Memo announcing the
extension of the Moratorium.
2. Statutory Basis
The basis under the Act 11 for this
proposed rule change is the requirement
under Section 6(b)(5) 12 that an
exchange have rules that are designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system and, in general, to protect
investors and the public interest. The
Exchange believes that the instant filing
is consistent with these principles in
that the review of data associated with
RCMM and CT trading in light of the
significant developments in its
technology and New Model will allow
the Exchange to make an informed
decision as to the viability of RCMMs
and CTs in this evolving marketplace
and may potentially remove
impediments to and better improve the
mechanism of a free and open market.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
pwalker on PROD1PC71 with NOTICES
No written comments were solicited
or received with respect to the proposed
rule change.
Securities Exchange Act Release No. 53549
(March 24, 2006), 71 FR 16388 (March 31, 2006)
(SR–NYSE–2006–11) (making certain amendments
to the Moratorium).
11 15 U.S.C. 78a.
12 15 U.S.C. 78f(b)(5).
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The proposed rule change is effective
upon filing pursuant to Section
19(b)(3)(A) of the Act.13 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
Commission may designate, if
consistent with the protection of
investors and the public interest;
provided that the self-regulatory
organization has given the Commission
written notice of its intent to file the
proposed rule change, along with a brief
description and text of the proposed
rule change, at least five business days
prior to the date of filing of the
proposed rule change, or such shorter
time as designated by the Commission.
The Exchange has satisfied the
requirement that it give the Commission
written notice of its intent to file the
proposed rule change, along with a brief
description and text of the proposed
rule change, at least five business days
prior to the date of filing of the
proposed rule change, or such shorter
time as designated by the Commission.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2008–124. 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, 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–
2008–124 and should be submitted on
or before January 5, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–29554 Filed 12–12–08; 8:45 am]
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:
BILLING CODE 8011–01–P
Electronic Comments
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.
10 See
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Self-Regulatory Organizations; New
York Stock Exchange LLC; Order
Approving Proposed Rule Change To
Adopt a Policy Relating to Its
Treatment of Trade Reports That It
Determines To Be Inconsistent With
the Prevailing Market
• 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–2008–124 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59064; File No. SR–NYSE–
2008–91]
December 5, 2008.
Paper Comments
I. Introduction
• Send paper comments in triplicate
to Secretary, Securities and Exchange
On September 26, 2008, the New York
Stock Exchange LLC (‘‘NYSE’’ or
13 15
PO 00000
U.S.C. 78s(b)(3)(A).
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14 17
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CFR 200.30–3(a)(12).
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Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Notices
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
allow the Exchange to exercise 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 proposed rule
change was published for comment in
the Federal Register on October 10,
2008.3 The Commission received no
comments on the proposal. This order
approves the proposed rule change.
pwalker on PROD1PC71 with NOTICES
II. Description of the Proposal
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 Exchange proposes to adopt as
policies of the Exchange that it will:
i. Monitor for trade prices that do not
accurately reflect the prevailing market
for a security;
ii. 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. 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 proposes to append
retroactively 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 intends to 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 that they
disseminate and to provide to data users
an explanation of the parameters used
in the Exchange’s aberrant trade policy.
Upon adoption of the Aberrant Report
Indicator, the Exchange also will contact
all of its listed companies to explain the
aberrant trade policy and will notify
users of the information that these are
1 15
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 58736
(October 6, 2008), 73 FR 60380.
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still valid trades. The Exchange will
inform the affected listed company each
time the Exchange or another market 4
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 broken,
such as in the case of clearly erroneous
trades.
The NYSE noted that, while the
Consolidated Tape Association
disseminates its own calculations of
high, low and last sale prices, vendors
and other data recipients frequently
determine their own methodology by
which they wish to calculate high, low
and last sale prices. Therefore, the
Exchange proposes to explain to those
vendors and other data recipients the
potential impact of including in those
calculations a trade to which the
Aberrant Report Indicator has been
appended.
In determining whether to append the
Aberrant Report Indicator, the Exchange
will 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 will be to
4 The Commission notes that any proposal by
another regulatory organization to establish a policy
to append an Aberrant Report Indicator to any trade
report with respect to any trade executed on its
market that it determines to be inconsistent with
the prevailing market must be filed with the
Commission as a proposed rule change under
Section 19(b) of the Act.
PO 00000
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76083
consult with 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 will 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)
Seven.
Five.
Three.
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 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 other
markets and market participants.
III. Discussion
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
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76084
Federal Register / Vol. 73, No. 241 / Monday, December 15, 2008 / Notices
Act and the rules and regulations
thereunder applicable to a national
securities exchange and, in particular,
with Section 6(b) of the Act 5 and the
rules and regulations thereunder.
Specifically, the Commission finds that
the proposed rule change is consistent
with Section 6(b)(5) of the Act 6 which
requires, among other things, that the
rules of a national securities exchange
be 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, to protect investors and the
public interest, and are not designed to
permit unfair discrimination between
customers, issuers, brokers or dealers.7
The Commission believes that the
Exchange’s proposal to append an
Aberrant Report Indicator to certain
trade reports is a reasonable means to
alert investors and others that the
Exchange believes that the trade price
for a trade executed in its market does
not accurately reflect the prevailing
market for the security. In addition, the
Commission notes that the Exchange
will use objective numerical thresholds
in determining whether a trade report is
eligible to have an Aberrant Trade
Indicator appended to it. The
Commission further notes that the
Exchange’s appending the Aberrant
Trade Indicator to a trade report has no
effect on the validity of the underlying
trade.
For the reasons set forth above, the
Commission finds that the proposed
rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,8 that the
proposed rule change (SR–NYSE–2008–
91) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.9
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–29558 Filed 12–12–08; 8:45 am]
BILLING CODE 8011–01–P
pwalker on PROD1PC71 with NOTICES
5 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
7 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
8 15 U.S.C. 78s(b)(2).
9 17 CFR 200.30–3(a)(12).
6 15
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59063; File No. SR–
NYSEArca–2008–114]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Order Approving Proposed
Rule Change To Revise the Listing and
Annual Fees Applicable to Paired Trust
Shares
December 5, 2008.
I. Introduction
On October 22, 2008, NYSE Arca, Inc.
(‘‘Exchange’’ or ‘‘NYSE Arca’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’), pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change amending its Schedule of Fees
and Charges for Exchange Services
(‘‘Fee Schedule’’) to revise the listing
and annual fees applicable to Paired
Trust Shares listed on NYSE Arca, LLC
(‘‘NYSE Arca Marketplace’’), the
equities facility of NYSE Arca Equities,
Inc. (‘‘NYSE Arca Equities’’). The
proposed rule change was published for
comment in the Federal Register on
November 5, 2008.3 The Commission
received no comment letters on the
proposed rule change. This order
approves the proposed rule change.
II. Description of the Proposed Rule
Change
Under the current Fee Schedule,
Paired Trust Shares (listed under NYSE
Arca Equities Rule 8.400) are classified
as ‘‘Derivative Securities Products.’’
NYSE Arca proposes to reclassify Paired
Trust Shares as ‘‘Structured Products’’
for purposes of the Fee Schedule.
Specifically, the Exchange proposes to
delete the term Paired Trust Shares from
footnote 3 of the Fee Schedule (defining
‘‘Derivative Securities Products’’) and to
add such term to footnote 4 of the Fee
Schedule (defining ‘‘Structured
Products’’).
As a result of the proposed rule
change, the Listing and Annual Fees for
Paired Trust Shares would change
accordingly. Under the current Fee
Schedule, the Listing Fee for Paired
Trust Shares (classified as Derivative
Securities Products) is $5,000 per issue,
and the Annual Fee for such securities,
which is based on the number of shares
outstanding per issue, ranges from
$2,000 to $25,000 per issue. Under the
proposal, the Listing Fee for Paired
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3See Securities Exchange Act Release No. 58878
(October 29, 2008), 73 FR 65912.
2 17
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
Trust Shares (reclassified as Structured
Products), which is based on the
number of shares outstanding per issue,
would range from $5,000 to $45,000 per
issue, and the Annual Fee for such
securities, which also is based on the
number of shares outstanding per issue,
would range from $10,000 to $55,000
per issue.
In addition, the Exchange proposes to
make non-substantive changes to
footnote 4 of the Fee Schedule,
including updating the title of NYSE
Arca Equities Rule 5.2(j)(6) to include
Fixed Income Index-Linked Securities,
Futures-Linked Securities, and
Multifactor Index-Linked Securities.
III. Discussion and Commission’s
Findings
The Commission has carefully
reviewed the proposed rule change and
finds that it is consistent with the
requirements of Section 6 of the Act 4
and the rules and regulations
thereunder applicable to a national
securities exchange.5 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(4) of the Act,6 which requires that
the rules of the Exchange provide for the
equitable allocation of reasonable dues,
fees, and other charges among its
members and issuers and other persons
using its facilities.
The Commission believes that the
proposal to reclassify Paired Trust
Shares as Structured Products for
purposes of the Fee Schedule
reasonably reflects the similarity of this
type of product to other Structured
Products, the issuers of which do not
hold underlying securities,
commodities, futures, or other financial
instruments (other than U.S. Treasuries
and repurchase agreements on U.S.
Treasuries to secure specified
obligations), unlike issuers of Derivative
Securities Products. The Commission
notes that, except for the shares of the
MacroShares $100 Oil Up Trust and the
MacroShares $100 Oil Down Trust, for
which annual and listing fees for 2008
have been waived,7 no issue of Paired
4 15
U.S.C. 78f.
approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
6 15 U.S.C. 78f(b)(4).
7 See e-mail from Michael Cavalier, Associate
General Counsel, NYSE Euronext, to Edward Cho,
Special Counsel, Division of Trading and Markets,
Commission, dated November 24, 2008 at 12:25
p.m. (‘‘Nov. 24 E-Mail’’); see also Securities
Exchange Act Release No. 58598 (September 19,
2008), 73 FR 55888 (September 26, 2008) (SR–
NYSEArca–2008–78) (approving the waiver of all
Annual Fees for securities delisted from Amex and
listed on the Exchange in connection with the
5 In
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]]>Agencies
[Federal Register Volume 73, Number 241 (Monday, December 15, 2008)]
[Notices]
[Pages 76082-76084]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-29558]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59064; File No. SR-NYSE-2008-91]
Self-Regulatory Organizations; New York Stock Exchange LLC; Order
Approving Proposed Rule Change To Adopt a Policy Relating to Its
Treatment of Trade Reports That It Determines To Be Inconsistent With
the Prevailing Market
December 5, 2008.
I. Introduction
On September 26, 2008, the New York Stock Exchange LLC (``NYSE'' or
[[Page 76083]]
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to allow the Exchange to exercise 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 proposed rule change was
published for comment in the Federal Register on October 10, 2008.\3\
The Commission received no comments on the proposal. This order
approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 58736 (October 6,
2008), 73 FR 60380.
---------------------------------------------------------------------------
II. Description of the Proposal
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 Exchange proposes to adopt as policies of the Exchange that it
will:
i. Monitor for trade prices that do not accurately reflect the
prevailing market for a security;
ii. 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. 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 proposes to append retroactively 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 intends to 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 that they disseminate and to
provide to data users an explanation of the parameters used in the
Exchange's aberrant trade policy. Upon adoption of the Aberrant Report
Indicator, the Exchange also will 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
\4\ 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 broken, such as in the
case of clearly erroneous trades.
---------------------------------------------------------------------------
\4\ The Commission notes that any proposal by another regulatory
organization to establish a policy to append an Aberrant Report
Indicator to any trade report with respect to any trade executed on
its market that it determines to be inconsistent with the prevailing
market must be filed with the Commission as a proposed rule change
under Section 19(b) of the Act.
---------------------------------------------------------------------------
The NYSE noted that, while the Consolidated Tape Association
disseminates its own calculations of high, low and last sale prices,
vendors and other data recipients frequently determine their own
methodology by which they wish to calculate high, low and last sale
prices. Therefore, the Exchange proposes to explain to those vendors
and other data recipients the potential impact of including in those
calculations a trade to which the Aberrant Report Indicator has been
appended.
In determining whether to append the Aberrant Report Indicator, the
Exchange will 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 will be to consult with 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 will 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 threshold
Trade price (percent)
------------------------------------------------------------------------
Between $0 and $15.00..................... Seven.
Between $15.01 and $50.00................. Five.
In excess of $50.00....................... Three.
------------------------------------------------------------------------
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 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 other markets and market participants.
III. Discussion
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the
[[Page 76084]]
Act and the rules and regulations thereunder applicable to a national
securities exchange and, in particular, with Section 6(b) of the Act
\5\ and the rules and regulations thereunder. Specifically, the
Commission finds that the proposed rule change is consistent with
Section 6(b)(5) of the Act \6\ which requires, among other things, that
the rules of a national securities exchange be 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,
to protect investors and the public interest, and are not designed to
permit unfair discrimination between customers, issuers, brokers or
dealers.\7\
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
\7\ In approving this proposed rule change, 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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The Commission believes that the Exchange's proposal to append an
Aberrant Report Indicator to certain trade reports is a reasonable
means to alert investors and others that the Exchange believes that the
trade price for a trade executed in its market does not accurately
reflect the prevailing market for the security. In addition, the
Commission notes that the Exchange will use objective numerical
thresholds in determining whether a trade report is eligible to have an
Aberrant Trade Indicator appended to it. The Commission further notes
that the Exchange's appending the Aberrant Trade Indicator to a trade
report has no effect on the validity of the underlying trade.
For the reasons set forth above, the Commission finds that the
proposed rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\8\ that the proposed rule change (SR-NYSE-2008-91) be, and hereby
is, approved.
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\8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\9\
Florence E. Harmon,
Acting Secretary.
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\9\ 17 CFR 200.30-3(a)(12).
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[FR Doc. E8-29558 Filed 12-12-08; 8:45 am]
BILLING CODE 8011-01-P
