Justia Agencies And Commissions Securities And Exchange Commission Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending NYSE Rule 103B (“Security Allocation and Reallocation”) to: (1) Prohibit DMM Units From Communicating With Issuers After Receipt of Notice From the Exchange of the Issuer's Impending Listing; (2) Provide DMM Unit Marketing Materials to the Issuer Prior to the Scheduled Interview Rather Than the Day Before; and (3) Allow an Issuer Transferring From NYSE Alternext U.S. LLC to the NYSE To Retain its DMM Unit if Such DMM Unit Is an Approved and Registered DMM on the NYSE, 3120-3123 [E9-932]

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending NYSE Rule 103B (“Security Allocation and Reallocation”) to: (1) Prohibit DMM Units From Communicating With Issuers After Receipt of Notice From the Exchange of the Issuer's Impending Listing; (2) Provide DMM Unit Marketing Materials to the Issuer Prior to the Scheduled Interview Rather Than the Day Before; and (3) Allow an Issuer Transferring From NYSE Alternext U.S. LLC to the NYSE To Retain its DMM Unit if Such DMM Unit Is an Approved and Registered DMM on the NYSE, 3120-3123 [E9-932]

Download as PDF 3120 Federal Register / Vol. 74, No. 11 / Friday, January 16, 2009 / Notices The MatchPoint fee will again revert to the current equity transaction fee of $.0015 per share beginning March 1, 2009. The temporary fee is designed to attract more users to the MatchPoint system. 2. Statutory Basis The basis under the Securities Exchange Act of 1934 (the ‘‘Act’’) 4 for the proposed rule change is the requirement under Section 6(b)(4) that an exchange have rules that provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Exchange believes the new fees are reasonable in that they represent a reduction in fees, and are equitable in that they are available to all members who access the MatchPoint system. 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 foregoing rule change is effective upon filing pursuant to Section 19(b)(3)(A) 5 of the Act and subparagraph (f)(2) of Rule 19b–4 6 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. mstockstill on PROD1PC66 with NOTICES IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml ); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2009–01 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59231; File No. SR–NYSE– 2008–143] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending NYSE Rule 103B (‘‘Security Allocation and Paper Comments Reallocation’’) to: (1) Prohibit DMM • Send paper comments in triplicate Units From Communicating With to Elizabeth M. Murphy, Secretary, Issuers After Receipt of Notice From Securities and Exchange Commission, the Exchange of the Issuer’s 100 F Street, NE., Washington, DC Impending Listing; (2) Provide DMM 20549–1090. Unit Marketing Materials to the Issuer Prior to the Scheduled Interview All submissions should refer to File Rather Than the Day Before; and (3) Number SR–NYSE–2009–01. This file Allow an Issuer Transferring From number should be included on the NYSE Alternext U.S. LLC to the NYSE subject line if e-mail is used. To help the To Retain its DMM Unit if Such DMM Commission process and review your Unit Is an Approved and Registered comments more efficiently, please use DMM on the NYSE only one method. The Commission will post all comments on the Commission’s January 12, 2009. Pursuant to Section 19(b)(1) 1 of the Internet Web site (https://www.sec.gov/ Securities Exchange Act of 1934 (the rules/sro.shtml ). Copies of the ‘‘Act’’),2 and Rule 19b–4 thereunder,3 submission, all subsequent notice is hereby given that, on December amendments, all written statements 31, 2008, New York Stock Exchange with respect to the proposed rule LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed change that are filed with the with the Securities and Exchange Commission, and all written Commission (the ‘‘Commission’’) the communications relating to the proposed rule change as described in proposed rule change between the Items I and II below, which Items have Commission and any person, other than been prepared by the self-regulatory those that may be withheld from the organization. The Commission is public in accordance with the publishing this notice to solicit provisions of 5 U.S.C. 552, will be comments on the proposed rule change available for inspection and copying in from interested persons. the Commission’s Public Reference I. Self-Regulatory Organization’s Room, 100 F Street, NE., Washington, Statement of the Terms of Substance of DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. the Proposed Rule Change Copies of the filing also will be available The Exchange proposes to amend for inspection and copying at the NYSE Rule 103B (‘‘Security Allocation and Reallocation’’) to: (1) Prohibit DMM principal office of the Exchange. All units from communicating with issuers comments received will be posted after receipt of notice from the Exchange without change; the Commission does of the issuer’s impending listing; (2) not edit personal identifying provide DMM unit marketing materials information from submissions. You to the issuer prior to the scheduled should submit only information that you wish to make available publicly. All interview rather than the day before; and (3) allow an issuer transferring from submissions should refer to File Number SR–NYSE–2009–01 and should NYSE Alternext U.S. LLC (‘‘Alternext’’) to the NYSE to retain its DMM unit if be submitted on or before February 6, such DMM unit is an approved and 2009. registered DMM on the NYSE. For the Commission, by the Division of The text of the proposed rule change Trading and Markets, pursuant to delegated is available on the Exchange’s Web site authority.7 (https://www.nyse.com), at the Florence E. Harmon, Exchange’s Office of the Secretary, and at the Commission’s Public Reference Deputy Secretary. Room. [FR Doc. E9–931 Filed 1–15–09; 8:45 am] BILLING CODE 8011–01–P 4 15 U.S.C. 78a. 5 15 U.S.C. 78s(b)(3)(A). 6 17 CFR 240.19b–4(f)(2). VerDate Nov<24>2008 19:02 Jan 15, 2009 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 7 17 Jkt 217001 PO 00000 CFR 200.30–3(a)(12). Frm 00130 Fmt 4703 Sfmt 4703 E:\FR\FM\16JAN1.SGM 16JAN1 Federal Register / Vol. 74, No. 11 / Friday, January 16, 2009 / Notices 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend NYSE Rule 103B (‘‘Security Allocation and Reallocation’’) to: (1) Prohibit DMM units from communicating with issuers after receipt of notice from the Exchange of the issuer’s impending listing; (2) provide DMM unit marketing materials to the issuer prior to the scheduled interview rather than the day before; and (3) allow an issuer transferring from NYSE Alternext U.S. LLC (‘‘Alternext’’) to the NYSE to retain its DMM unit if such DMM unit is an approved and registered DMM on the NYSE. The Exchange notes that parallel changes are proposed to be made to the rules of the NYSE Alternext Exchange (formerly the American Stock Exchange).4 mstockstill on PROD1PC66 with NOTICES I. Background On October 24, 2008, the NYSE amended its allocation process to provide issuers with more autonomy in the selection of its assigned DMM unit.5 The revised allocation process established a single objective measure 6 4 See SR–NYSEALTR–2008–21 (to be filed on December 31, 2008). 5 See Securities Exchange Act Release No. 58857 (October 24, 2008), 73 FR 65435 (November 3, 2008) (SR–NYSE–2008–52)(’’Allocation Policy’’). Specialist units were eliminated and replaced with DMM units in the new Market Model filing. See Securities Exchange Act Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008) (SR– NYSE–2008–46) (‘‘New Market Model’’). 6 DMM units are eligible to participate in the allocation process of a listed security when the DMM unit has not failed to comply with its quoting requirements for ‘‘Less Active’’ (any listed security that has a consolidated average daily volume of less than one million shares per calendar month)’’ and ‘‘More Active’’ (any listed security that has a consolidated average daily volume equal to or greater than one million shares per calendar month)’’ securities. Those DMM units that have failed to meet the quoting requirement for a consecutive two month period are ineligible for a VerDate Nov<24>2008 19:02 Jan 15, 2009 Jkt 217001 to determine a DMM unit’s eligibility to participate in the allocation process. The single objective measure made it feasible for an issuer to select and conduct interviews of eligible DMM units or delegate the selection to the Exchange.7 DMM units selected for an interview are notified directly by the Exchange and may provide material to the Exchange which will be given to the issuer the day before the scheduled interview. II. Proposed Amendments During the administration of the new allocation process, it has become clear that certain amendments to the rule are required as a result of certain practical considerations that need to be addressed in the application of the rule. 1. Interview Process The Exchange proposes to amend Section III(A) of NYSE Rule 103B to prohibit DMM units from having contact with an issuer after the Exchange provides notice to DMM units about the issuer’s impending listing on the NYSE. Pursuant to the Exchange’s former Allocation Policy, specialists were required to cease communication with an issuer once the Exchange issued the invitation for specialists to apply for an issue. The modification to the allocation process to allow an issuer to select its DMM units from the list of eligible DMM units on the Exchange ended the administrative need for the Exchange to solicit applications from DMM units which would have triggered the prohibition of communication between DMM units and listing companies. Thus, the Exchange inadvertently removed the prohibition of ending communication between the DMM unit and the issuer prior to the interview. Currently NYSE 103B prohibits communication between DMM units and issuers following their interview. The Exchange still believes that prohibiting communication between DMM units and issuers just prior to the interview is appropriate in order to promote fairness and objectivity in the interview process. The Exchange therefore proposes to amend NYSE Rule 103B, Section III to add a section prohibiting DMM units, or any individuals acting on their behalf, from having any contact with any listing minimum of two months following the second consecutive month of its failure to meet its quoting requirement. (‘‘Penalty Period’’). The DMM unit must satisfy the quoting requirement for the two consecutive months of the Penalty Period to be eligible to participate in the allocation process. See NYSE Rule 103B, Section II(J)(2). 7 NYSE Rule 103B, Section III. PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 3121 company once the Exchange provides written notice to DMM units that the listing company is listing on the Exchange. In addition to the above modification related to the interview process, the Exchange further seeks to allow more flexibility in the delivery of DMM marketing materials to an issuer based on the availability of the issuer. Currently, the rule provides that DMM marketing materials are to be provided the day before the interview. The Exchange proposes to amend the language to allow for the marketing materials to be provided prior to the interview. Some issuers that interview at the Exchange may be in transit the day prior to the interview or participating in road shows and business trips and are therefore unavailable to receive the materials the day before the scheduled interview. In those instances the Exchange provides the issuer with the materials the day of the interview. In instances where an issuer is available to receive the marketing materials in advance of the scheduled interview the Exchange would like to be able to provide the materials to the issuer. Accordingly, the Exchange proposes to amend the rule to simply state that the Exchange will provide the issuer with the DMM units’ marketing materials prior to the interview. 2. Allocation of Listing Companies Transferring From Alternext to the NYSE On October 1, 2008, the Exchange completed its acquisition of Alternext.8 Alternext, similar to the Exchange, operates a DMM system and securities traded on Alternext are assigned to a DMM unit. In certain instances, Alternext DMM units may also be registered DMM units on the NYSE. In these instances, the Exchange seeks to afford issuers transferring from Alternext the same privileges it affords issuers transferring from its other affiliated Exchange, NYSE Arca.9 Specifically, the Exchange seeks to amend NYSE Rule 103B to allow an issuer that transfers from Alternext to the NYSE to waive the allocation process in instances where the issuer’s 8 See Securities Exchange Act Release No. 58673 (September 29, 2008), 73 FR 57707 (October 3, 2008) (SR–AMEX–2008–62 and SR–NYSE–2008– 60). 9 See Securities Exchange Act Release No. 55641 (April 17, 2007), 72 FR 20396 (April 24, 2007) (SR– NYSE–2007–39) (amending NYSE Rule 103B to allow an issuer to waive the allocation process when the issuer’s security was assigned an LMM that was also a registered NYSE specialist, thus affording the issuer to retain the same market maker). E:\FR\FM\16JAN1.SGM 16JAN1 3122 Federal Register / Vol. 74, No. 11 / Friday, January 16, 2009 / Notices security was assigned to a registered DMM unit that is also an approved and registered DMM unit on the NYSE.10 In any event, the issuer may still choose to follow the regular allocation process and have its security referred for allocation through the allocation process pursuant to NYSE Rule 103B, Section III. If the listing company chooses to have its DMM unit selected by the Exchange pursuant to NYSE Rule 103B, Section III(B), and requests not to be allocated to the DMM unit that was its Alternext DMM unit, such request will be honored. The Exchange believes that the proposed rule change is consistent with the goals of the Allocation policy to provide an incentive for ongoing enhancement of the relationship between the listing company and the DMM unit, to encourage continued high performance of the DMM unit by allowing them to use their experience and knowledge of the listing company’s securities and to provide the best possible match between the DMM unit and the security. 2. Statutory Basis The basis under the Act for the proposed rule change is the requirement under Section 6(b)(5),11 which requires that an exchange have rules that are designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes that the proposed amendments are consistent with these objectives. The amendments sought herein seek to alleviate impediments in the administrative process of assigning securities to DMM units which ultimately facilitates the fair and orderly trading in the subject security. mstockstill on PROD1PC66 with NOTICES B. Self-Regulatory Organization’s Statement on Burden on Competition VerDate Nov<24>2008 19:02 Jan 15, 2009 Jkt 217001 III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change: (i) Does not significantly affect the protection of investors or the public interest; (ii) does not impose any significant burden on competition; and (iii) does not become operative for 30 days after the date of the filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 12 and Rule 19b– 4(f)(6) thereunder.13 A proposed rule change filed pursuant to Rule 19b–4(f)(6) under the Act 14 normally does not become operative for 30 days after the date of its filing. However, Rule 19b–4(f)(6)(iii) 15 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because it will allow the Exchange to immediately remove any disparity in the treatment afforded issuers of the NYSE’s affiliate exchanges and to further objectivity and fairness of the allocation process by immediately establishing the specific point in time when DMM units must cease communication with issuers prior to interviews. The language being used in this proposed rule filing for the transfer of issuers from NYSE Alternext to NYSE is substantively similar to the language already in place for its other related Exchange, NYSE Arca.16 Furthermore, 12 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–(f)(6). Pursuant to Rule 19b– 4(f)(6)(iii) under the Act, the Exchange is required to 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 proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 14 17 CFR 240.19b–4(f)(6). 15 17 CFR 240.19b–4(f)(6)(iii). 16 See Securities Exchange Act Release No. 55641 (April 17 2007), 72 FR 20396 (April 24, 2007) (SR– NYSE–2007–39). 13 17 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 Currently, the proposed waiver of the allocation process would occur in very limited circumstances because only one DMM unit is registered on both Alternext and the NYSE. 11 15 U.S.C. 78f(b)(5). 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. PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 the proposed rule filing seeks to restore language regarding the prohibition of communication between the DMM units and the issuer that was inadvertently omitted from the former NYSE Rule 103B to the current NYSE Rule 103B. For these reasons, the Commission designates that the proposed rule change become operative immediately upon filing.17 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 Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–NYSE–2008–143 on the subject line. Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NYSE–2008–143. 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 17 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. 15 U.S.C. 78c(f). E:\FR\FM\16JAN1.SGM 16JAN1 Federal Register / Vol. 74, No. 11 / Friday, January 16, 2009 / Notices 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– 2008–143 and should be submitted on or before February 6, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–932 Filed 1–15–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59233; File No. SR– NYSEALTR–2008–21] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Alternext US LLC Amending NYSE Alternext Equities Rule 103B To Conform to Amendments Filed by the New York Stock Exchange To: (1) Prohibit DMM Units From Communicating With Issuers After Receipt of Notice From the Exchange of the Issuer’s Impending Listing; and (2) Provide DMM Unit Marketing Materials to the Issuer Prior to the Scheduled Interview Rather Than the Day Before mstockstill on PROD1PC66 with NOTICES January 12, 2009. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on December 31, 2008, NYSE Alternext US 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. 18 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. VerDate Nov<24>2008 19:02 Jan 15, 2009 Jkt 217001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Alternext Equities Rule 103B (‘‘Security Allocation and Reallocation’’) to conform to amendments filed by the New York Stock Exchange to: (1) Prohibit DMM units from communicating with issuers after receipt of notice from the Exchange of the issuer’s impending listing; and (2) provide DMM unit marketing materials to the issuer prior to the scheduled interview rather than the day before. The text of the proposed rule change is available on the Exchange’s Web site at https://www.nyse.com, at the Exchange’s principal office, and at the Commission’s Public Reference Room. 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend NYSE Alternext Equities Rule 103B (‘‘Security Allocation and Reallocation’’) to conform with amendments filed by the New York Stock Exchange 4 to: (1) Prohibit DMM units from communicating with issuers after receipt of notice from the Exchange of the issuer’s impending listing; and (2) provide DMM unit marketing materials to the issuer prior to the scheduled interview rather than the day before. I. Background As described more fully in a related rule filing,5 NYSE Euronext acquired The Amex Membership Corporation (‘‘AMC’’) pursuant to an Agreement and Plan of Merger, dated January 17, 2008 4 See Securities Exchange Act Release No. 59231 (January 12, 2009) (SR–NYSE–2008–143). 5 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). PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 3123 (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 US LLC, and continues to operate as a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the ‘‘Act’’).6 The effective date of the Merger was October 1, 2008. In connection with the Merger, on December 1, 2008, the Exchange relocated all equities trading conducted on the Exchange legacy trading systems and facilities located at 86 Trinity Place, New York, New York, 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’’) are operated by the NYSE on behalf of the Exchange.7 As part of the Equities Relocation, NYSE Alternext adopted NYSE Rules 1– 1004, subject to such changes as necessary to apply the Rules to the Exchange, as the NYSE Alternext Equities Rules to govern trading on the NYSE Alternext Trading Systems.8 The NYSE Alternext Equities Rules, which became operative on December 1, 2008, are substantially identical to the current NYSE Rules 1–1004 and the Exchange continues to update the NYSE Alternext Equities Rules as necessary to conform with rule changes to corresponding NYSE Rules filed by the NYSE. II. Proposed Amendments The Exchange proposes to amend Section III (A) of NYSE Alternext Equities Rule 103B to prohibit DMM units from having contact with an issuer after the Exchange provides notice to DMM units about the issuer’s impending listing on the Exchange. 6 15 U.S.C. 78f. 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 Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR–Amex 2008–63) (approving the Equities Relocation); 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); Securities Exchange Act Release No. 59022 (November 26, 2008), 73 FR 73683 (December 3, 2008) (SR–NYSEALTR–2008–10) (adopting amendments to NYSE Alternext Equities Rules to track changes to corresponding NYSE Rules); Securities Exchange Act Release No. 59027 (November 28, 2008), 73 FR 73681 (December 3, 2008) (SR–NYSEALTR–2008–11) (adopting amendments to Rule 62—NYSE Alternext Equities to track changes to corresponding NYSE Rule 62). 7 See E:\FR\FM\16JAN1.SGM 16JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 11 (Friday, January 16, 2009)]
[Notices]
[Pages 3120-3123]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-932]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59231; File No. SR-NYSE-2008-143]

Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC
Amending NYSE Rule 103B (``Security Allocation and Reallocation'') to:
(1) Prohibit DMM Units From Communicating With Issuers After Receipt of
Notice From the Exchange of the Issuer's Impending Listing; (2) Provide
DMM Unit Marketing Materials to the Issuer Prior to the Scheduled
Interview Rather Than the Day Before; and (3) Allow an Issuer
Transferring From NYSE Alternext U.S. LLC to the NYSE To Retain its DMM
Unit if Such DMM Unit Is an Approved and Registered DMM on the NYSE

January 12, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on December 31, 2008, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') 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.
---------------------------------------------------------------------------

\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

The Exchange proposes to amend NYSE Rule 103B (``Security
Allocation and Reallocation'') to: (1) Prohibit DMM units from
communicating with issuers after receipt of notice from the Exchange of
the issuer's impending listing; (2) provide DMM unit marketing
materials to the issuer prior to the scheduled interview rather than
the day before; and (3) allow an issuer transferring from NYSE
Alternext U.S. LLC (``Alternext'') to the NYSE to retain its DMM unit
if such DMM unit is an approved and registered DMM on the NYSE.
The text of the proposed rule change is available on the Exchange's
Web site (https://www.nyse.com), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

[[Page 3121]]

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.

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

1. Purpose
The Exchange proposes to amend NYSE Rule 103B (``Security
Allocation and Reallocation'') to: (1) Prohibit DMM units from
communicating with issuers after receipt of notice from the Exchange of
the issuer's impending listing; (2) provide DMM unit marketing
materials to the issuer prior to the scheduled interview rather than
the day before; and (3) allow an issuer transferring from NYSE
Alternext U.S. LLC (``Alternext'') to the NYSE to retain its DMM unit
if such DMM unit is an approved and registered DMM on the NYSE.
The Exchange notes that parallel changes are proposed to be made to
the rules of the NYSE Alternext Exchange (formerly the American Stock
Exchange).\4\
---------------------------------------------------------------------------

\4\ See SR-NYSEALTR-2008-21 (to be filed on December 31, 2008).
---------------------------------------------------------------------------

I. Background
On October 24, 2008, the NYSE amended its allocation process to
provide issuers with more autonomy in the selection of its assigned DMM
unit.\5\ The revised allocation process established a single objective
measure \6\ to determine a DMM unit's eligibility to participate in the
allocation process. The single objective measure made it feasible for
an issuer to select and conduct interviews of eligible DMM units or
delegate the selection to the Exchange.\7\ DMM units selected for an
interview are notified directly by the Exchange and may provide
material to the Exchange which will be given to the issuer the day
before the scheduled interview.
---------------------------------------------------------------------------

\5\ See Securities Exchange Act Release No. 58857 (October 24,
2008), 73 FR 65435 (November 3, 2008) (SR-NYSE-2008-52)(''Allocation
Policy''). Specialist units were eliminated and replaced with DMM
units in the new Market Model filing. See Securities Exchange Act
Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008)
(SR-NYSE-2008-46) (``New Market Model'').
\6\ DMM units are eligible to participate in the allocation
process of a listed security when the DMM unit has not failed to
comply with its quoting requirements for ``Less Active'' (any listed
security that has a consolidated average daily volume of less than
one million shares per calendar month)'' and ``More Active'' (any
listed security that has a consolidated average daily volume equal
to or greater than one million shares per calendar month)''
securities. Those DMM units that have failed to meet the quoting
requirement for a consecutive two month period are ineligible for a
minimum of two months following the second consecutive month of its
failure to meet its quoting requirement. (``Penalty Period''). The
DMM unit must satisfy the quoting requirement for the two
consecutive months of the Penalty Period to be eligible to
participate in the allocation process. See NYSE Rule 103B, Section
II(J)(2).
\7\ NYSE Rule 103B, Section III.
---------------------------------------------------------------------------

II. Proposed Amendments
During the administration of the new allocation process, it has
become clear that certain amendments to the rule are required as a
result of certain practical considerations that need to be addressed in
the application of the rule.
1. Interview Process
The Exchange proposes to amend Section III(A) of NYSE Rule 103B to
prohibit DMM units from having contact with an issuer after the
Exchange provides notice to DMM units about the issuer's impending
listing on the NYSE. Pursuant to the Exchange's former Allocation
Policy, specialists were required to cease communication with an issuer
once the Exchange issued the invitation for specialists to apply for an
issue.
The modification to the allocation process to allow an issuer to
select its DMM units from the list of eligible DMM units on the
Exchange ended the administrative need for the Exchange to solicit
applications from DMM units which would have triggered the prohibition
of communication between DMM units and listing companies. Thus, the
Exchange inadvertently removed the prohibition of ending communication
between the DMM unit and the issuer prior to the interview. Currently
NYSE 103B prohibits communication between DMM units and issuers
following their interview.
The Exchange still believes that prohibiting communication between
DMM units and issuers just prior to the interview is appropriate in
order to promote fairness and objectivity in the interview process. The
Exchange therefore proposes to amend NYSE Rule 103B, Section III to add
a section prohibiting DMM units, or any individuals acting on their
behalf, from having any contact with any listing company once the
Exchange provides written notice to DMM units that the listing company
is listing on the Exchange.
In addition to the above modification related to the interview
process, the Exchange further seeks to allow more flexibility in the
delivery of DMM marketing materials to an issuer based on the
availability of the issuer. Currently, the rule provides that DMM
marketing materials are to be provided the day before the interview.
The Exchange proposes to amend the language to allow for the marketing
materials to be provided prior to the interview. Some issuers that
interview at the Exchange may be in transit the day prior to the
interview or participating in road shows and business trips and are
therefore unavailable to receive the materials the day before the
scheduled interview. In those instances the Exchange provides the
issuer with the materials the day of the interview. In instances where
an issuer is available to receive the marketing materials in advance of
the scheduled interview the Exchange would like to be able to provide
the materials to the issuer. Accordingly, the Exchange proposes to
amend the rule to simply state that the Exchange will provide the
issuer with the DMM units' marketing materials prior to the interview.
2. Allocation of Listing Companies Transferring From Alternext to the
NYSE
On October 1, 2008, the Exchange completed its acquisition of
Alternext.\8\ Alternext, similar to the Exchange, operates a DMM system
and securities traded on Alternext are assigned to a DMM unit. In
certain instances, Alternext DMM units may also be registered DMM units
on the NYSE.
---------------------------------------------------------------------------

\8\ See Securities Exchange Act Release No. 58673 (September 29,
2008), 73 FR 57707 (October 3, 2008) (SR-AMEX-2008-62 and SR-NYSE-
2008-60).
---------------------------------------------------------------------------

In these instances, the Exchange seeks to afford issuers
transferring from Alternext the same privileges it affords issuers
transferring from its other affiliated Exchange, NYSE Arca.\9\
Specifically, the Exchange seeks to amend NYSE Rule 103B to allow an
issuer that transfers from Alternext to the NYSE to waive the
allocation process in instances where the issuer's

[[Page 3122]]

security was assigned to a registered DMM unit that is also an approved
and registered DMM unit on the NYSE.\10\ In any event, the issuer may
still choose to follow the regular allocation process and have its
security referred for allocation through the allocation process
pursuant to NYSE Rule 103B, Section III. If the listing company chooses
to have its DMM unit selected by the Exchange pursuant to NYSE Rule
103B, Section III(B), and requests not to be allocated to the DMM unit
that was its Alternext DMM unit, such request will be honored.
---------------------------------------------------------------------------

\9\ See Securities Exchange Act Release No. 55641 (April 17,
2007), 72 FR 20396 (April 24, 2007) (SR-NYSE-2007-39) (amending NYSE
Rule 103B to allow an issuer to waive the allocation process when
the issuer's security was assigned an LMM that was also a registered
NYSE specialist, thus affording the issuer to retain the same market
maker).
\10\ Currently, the proposed waiver of the allocation process
would occur in very limited circumstances because only one DMM unit
is registered on both Alternext and the NYSE.
---------------------------------------------------------------------------

The Exchange believes that the proposed rule change is consistent
with the goals of the Allocation policy to provide an incentive for
ongoing enhancement of the relationship between the listing company and
the DMM unit, to encourage continued high performance of the DMM unit
by allowing them to use their experience and knowledge of the listing
company's securities and to provide the best possible match between the
DMM unit and the security.
2. Statutory Basis
The basis under the Act for the proposed rule change is the
requirement under Section 6(b)(5),\11\ which requires that an exchange
have rules that are designed to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest. The Exchange believes that
the proposed amendments are consistent with these objectives. The
amendments sought herein seek to alleviate impediments in the
administrative process of assigning securities to DMM units which
ultimately facilitates the fair and orderly trading in the subject
security.
---------------------------------------------------------------------------

\11\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others

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

Because the proposed rule change: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) does not become
operative for 30 days after the date of the filing, or such shorter
time as the Commission may designate if consistent with the protection
of investors and the public interest, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act \12\ and
Rule 19b-4(f)(6) thereunder.\13\
---------------------------------------------------------------------------

\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-(f)(6). Pursuant to Rule 19b-4(f)(6)(iii)
under the Act, the Exchange is required to 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 proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay.
---------------------------------------------------------------------------

\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it will allow the Exchange to immediately remove any disparity
in the treatment afforded issuers of the NYSE's affiliate exchanges and
to further objectivity and fairness of the allocation process by
immediately establishing the specific point in time when DMM units must
cease communication with issuers prior to interviews. The language
being used in this proposed rule filing for the transfer of issuers
from NYSE Alternext to NYSE is substantively similar to the language
already in place for its other related Exchange, NYSE Arca.\16\
Furthermore, the proposed rule filing seeks to restore language
regarding the prohibition of communication between the DMM units and
the issuer that was inadvertently omitted from the former NYSE Rule
103B to the current NYSE Rule 103B. For these reasons, the Commission
designates that the proposed rule change become operative immediately
upon filing.\17\
---------------------------------------------------------------------------

\16\ See Securities Exchange Act Release No. 55641 (April 17
2007), 72 FR 20396 (April 24, 2007) (SR-NYSE-2007-39).
\17\ 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. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

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

Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2008-143 on the subject line.

Paper Comments

Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2008-143. 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

[[Page 3123]]

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-2008-143 and should be submitted on or before February 6, 2009.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

\18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-932 Filed 1-15-09; 8:45 am]
BILLING CODE 8011-01-P

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.