Self-Regulatory Organizations; NYSE Alternext US LLC; Order Approving Proposed Rule Change To Establish the Risk Management Gateway Service, 6935-6936 [E9-2852]

Download as PDF Federal Register / Vol. 74, No. 27 / Wednesday, February 11, 2009 / Notices NYSE believes that the rule change will help make the securities markets more safe and efficient by encouraging the dematerialization of securities and by correctly placing the cost of the use of certificates on those investors requesting certificates. NYSE also believes that the rule change is consistent with the protection of investors and the public interest because holding a securities position in street name or through DRS provides investors with the ability to hold their securities in a safe and cost-effective manner without incurring the costs associated with the issuance and processing of securities certificates. III. Comment Letters The Commission received two comment letters,7 both in support of the proposed rule change. Computershare, a registered transfer agent, and The Securities Transfer Association, an industry association representing transfer agents, stated that the rule change was an important step toward the goal of dematerialization by decreasing the use of certificates in the marketplace and encouraging investors to hold shares in DRS, thereby reducing the risk and unnecessary expense for both issuers and shareholders of issuing and holding certificates. mstockstill on PROD1PC66 with NOTICES IV. Discussion Section 6(b)(5) of the Act requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transaction 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.8 The Commission’s approval of the rule change should remove impediments to and perfects the mechanism of a free and open market and a national market system in that it encourages the dematerialization of securities, which should improve the process of transferring securities in the public markets. The rule change is also consistent with the protection of investors and the public interest because investors can avoid the fees for the issuance of certificates by holding their securities in street name or through DRS which are safer and more 7 Supra 8 15 note 3. U.S.C. 78f(b)(5). VerDate Nov<24>2008 17:58 Feb 10, 2009 Jkt 217001 cost effective alternatives to holding securities in certificated form. Accordingly, for the reasons stated above the Commission believes that the rule change is consistent with NYSE’s obligation under Section 6 of the Act. V. Conclusion On the basis of the foregoing, the Commission finds that the proposed rule change is consistent with the requirements of the Act and in particular with the requirements of Section 6 of the Act and the rules and regulations thereunder.9 It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR– NYSE–2008–112) be and hereby is approved. For the Commission by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–2853 Filed 2–10–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59353; File No. SR– NYSEALTR–2008–12] Self-Regulatory Organizations; NYSE Alternext US LLC; Order Approving Proposed Rule Change To Establish the Risk Management Gateway Service February 3, 2009. I. Introduction On December 12, 2008, NYSE Alternext US LLC (‘‘Exchange’’ or ‘‘NYSE Alternext’’) 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 establish the Risk Management Gateway (‘‘RMG’’) service. The proposed rule change was published for comment in the Federal Register on December 31, 2008.3 The Commission received no comment letters on the proposed rule change. This order approves the proposed rule change. 9 In approving the proposed rule change, the Commission considered the proposal’s impact on efficiency, competition, and capital formation. 10 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 59144 (December 22, 2008), 73 FR 80502. PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 6935 II. Description of the Proposed Rule Change The Exchange proposes to offer, through its wholly-owned subsidiary NYSE Euronext Advanced Trading Solutions, Inc., the RMG service to NYSE Alternext members and member organizations pursuant to voluntary, contractual arrangements.4 NYSE Transact Tools, Inc., a division of the NYSE Euronext Advanced Trading Solutions Group (‘‘NYXATS’’), owns RMG.5 NYSE Alternext Equities Rule 123B.30 permits NYSE Alternext members and member organizations (a ‘‘Sponsoring Member Organization’’) to provide sponsored access to nonmember firms or customers (‘‘Sponsored Participants’’) to Exchange trading systems. Pursuant to this proposal, the Exchange would offer RMG to facilitate a Sponsoring Member Organization’s ability to monitor and supervise the trading activity of its Sponsored Participants. RMG is a risk filter that verifies orders entered by Sponsored Participants prior to the receipt of the order by the Exchange’s trading systems. Specifically, RMG verifies whether a Sponsored Participant’s order complies with order criteria established by the Sponsoring Member Organization for the Sponsored Participant, including, amongst other things, criteria related to order size (per order or daily quantity limits), credit limits (per order or daily value), specific symbols or end users. If the order is consistent with the parameters set by the Sponsoring Member Organization, after RMG’s verification, the order would be permitted to continue along its path to the Exchange’s trading systems. However, if the order did not meet the specified parameters, RMG would return the order to the Sponsored Participant. RMG would only interact with a Sponsored Participant’s order prior to the order’s receipt by the Exchange’s trading system. In addition, RMG would only return an order to the Sponsored Participant if the order did not meet the criteria set by the Sponsoring Member Organization. RMG would not provide order execution or trade reporting capabilities, but RMG would maintain records of all messages related to 4 A similar service has been approved for NYSE. See Securities Exchange Act Release No. 59354 (February 3, 2009) (SR–NYSE–2008–101). 5 NYXATS will host the RMG software on its infrastructure. After passing through the RMG software, each order will enter the NYSE Common Customer Gateway for connectivity to the Exchange’s matching engine. According to the Exchange, in the future, NYXATS may integrate RMG into the NYSE CCG for more direct access to the Exchange’s matching engine. E:\FR\FM\11FEN1.SGM 11FEN1 6936 Federal Register / Vol. 74, No. 27 / Wednesday, February 11, 2009 / Notices Sponsored Participants’ transactions and provide the applicable Sponsoring Member Organization copies of those records. The Sponsoring Member Organization, and not RMG, will have full responsibility for ensuring that Sponsored Participants’ sponsored access to the Exchange complies with the Exchange’s sponsored access rules. The use of the RMG by a Member Organization does not automatically constitute compliance with Exchange rules. The Exchange proposes to make RMG available to its members and member organizations pursuant to contractual arrangements. The Exchange states that it believes that RMG will offer its members and member organizations another option in the efficient risk management of its Sponsored Participant’s access to the NYSE Alternext Trading Systems. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–2852 Filed 2–10–09; 8:45 am] III. Discussion and Commission’s Findings 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 February 2, 2009, 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. NYSE Alternext filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 4 and Rule 19b–4(f)(6) thereunder,5 which renders it effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. mstockstill on PROD1PC66 with NOTICES After careful review, the Commission finds that the Exchange’s proposal to establish its RMG service is consistent with the Act and the rules and regulations thereunder applicable to a national securities exchange.6 In particular, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act,7 which requires 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 Commission believes that RMG should be a useful risk management tool for NYSE Alternext member firms that provide sponsored access to the Exchange. For the foregoing reasons, the Commission believes that the proposal to establish the RMG service is consistent with the Act. It is therefore ordered, pursuant to Section 19(b)(2) of the Act,8 that the proposed rule change (SR–NYSEALTR– 2008–12) be, and it hereby is, approved. 6 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). 7 15 U.S.C. 78f(b)(5). 8 15 U.S.C. 78s(b)(2). VerDate Nov<24>2008 17:58 Feb 10, 2009 Jkt 217001 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59360; File No. SR– NYSEALTR–2009–06] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Alternext U.S. LLC Amending NYSE Alternext Equities Rules 116 and 123C To Create a Single Closing Print To Be Reported to the Consolidated Tape for Each Security February 4, 2009. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Alternext Equities Rules 116 (‘‘Stop’’ Constitutes Guarantee) and 123C (Market On The Close Policy And Expiration Procedures) to create a single closing print to be reported to the Consolidated Tape for each security. The text of the proposed rule change is available at https://www.nyse.com, the Exchange, and the Commission’s Public Reference Room. 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6). 1 15 PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 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 Statutory Basis for, the Proposed Rule Change 1. Purpose Through this filing the Exchange seeks to amend NYSE Alternext Equities Rules 116 and 123C to create a single closing print to be reported to the Consolidated Tape for each security. Background As described more fully in a related rule filing,6 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 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’’).7 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 (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’’) are operated by the NYSE on behalf of the Exchange.8 6 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). 7 15 U.S.C. 78f. 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). E:\FR\FM\11FEN1.SGM 11FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 27 (Wednesday, February 11, 2009)]
[Notices]
[Pages 6935-6936]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-2852]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59353; File No. SR-NYSEALTR-2008-12]


Self-Regulatory Organizations; NYSE Alternext US LLC; Order 
Approving Proposed Rule Change To Establish the Risk Management Gateway 
Service

 February 3, 2009.

I. Introduction

    On December 12, 2008, NYSE Alternext US LLC (``Exchange'' or ``NYSE 
Alternext'') 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 establish the Risk Management Gateway (``RMG'') 
service. The proposed rule change was published for comment in the 
Federal Register on December 31, 2008.\3\ The Commission received no 
comment letters on the proposed rule change. 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. 59144 (December 22, 
2008), 73 FR 80502.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The Exchange proposes to offer, through its wholly-owned subsidiary 
NYSE Euronext Advanced Trading Solutions, Inc., the RMG service to NYSE 
Alternext members and member organizations pursuant to voluntary, 
contractual arrangements.\4\ NYSE Transact Tools, Inc., a division of 
the NYSE Euronext Advanced Trading Solutions Group (``NYXATS''), owns 
RMG.\5\ NYSE Alternext Equities Rule 123B.30 permits NYSE Alternext 
members and member organizations (a ``Sponsoring Member Organization'') 
to provide sponsored access to non-member firms or customers 
(``Sponsored Participants'') to Exchange trading systems. Pursuant to 
this proposal, the Exchange would offer RMG to facilitate a Sponsoring 
Member Organization's ability to monitor and supervise the trading 
activity of its Sponsored Participants. RMG is a risk filter that 
verifies orders entered by Sponsored Participants prior to the receipt 
of the order by the Exchange's trading systems. Specifically, RMG 
verifies whether a Sponsored Participant's order complies with order 
criteria established by the Sponsoring Member Organization for the 
Sponsored Participant, including, amongst other things, criteria 
related to order size (per order or daily quantity limits), credit 
limits (per order or daily value), specific symbols or end users. If 
the order is consistent with the parameters set by the Sponsoring 
Member Organization, after RMG's verification, the order would be 
permitted to continue along its path to the Exchange's trading systems. 
However, if the order did not meet the specified parameters, RMG would 
return the order to the Sponsored Participant.
---------------------------------------------------------------------------

    \4\ A similar service has been approved for NYSE. See Securities 
Exchange Act Release No. 59354 (February 3, 2009) (SR-NYSE-2008-
101).
    \5\ NYXATS will host the RMG software on its infrastructure. 
After passing through the RMG software, each order will enter the 
NYSE Common Customer Gateway for connectivity to the Exchange's 
matching engine. According to the Exchange, in the future, NYXATS 
may integrate RMG into the NYSE CCG for more direct access to the 
Exchange's matching engine.
---------------------------------------------------------------------------

    RMG would only interact with a Sponsored Participant's order prior 
to the order's receipt by the Exchange's trading system. In addition, 
RMG would only return an order to the Sponsored Participant if the 
order did not meet the criteria set by the Sponsoring Member 
Organization. RMG would not provide order execution or trade reporting 
capabilities, but RMG would maintain records of all messages related to

[[Page 6936]]

Sponsored Participants' transactions and provide the applicable 
Sponsoring Member Organization copies of those records.
    The Sponsoring Member Organization, and not RMG, will have full 
responsibility for ensuring that Sponsored Participants' sponsored 
access to the Exchange complies with the Exchange's sponsored access 
rules. The use of the RMG by a Member Organization does not 
automatically constitute compliance with Exchange rules.
    The Exchange proposes to make RMG available to its members and 
member organizations pursuant to contractual arrangements. The Exchange 
states that it believes that RMG will offer its members and member 
organizations another option in the efficient risk management of its 
Sponsored Participant's access to the NYSE Alternext Trading Systems.

III. Discussion and Commission's Findings

    After careful review, the Commission finds that the Exchange's 
proposal to establish its RMG service is consistent with the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange.\6\ In particular, the Commission finds that the 
proposal is consistent with Section 6(b)(5) of the Act,\7\ which 
requires 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 
Commission believes that RMG should be a useful risk management tool 
for NYSE Alternext member firms that provide sponsored access to the 
Exchange.
---------------------------------------------------------------------------

    \6\ 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).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    For the foregoing reasons, the Commission believes that the 
proposal to establish the RMG service is consistent with the Act.
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-NYSEALTR-2008-12) be, and it 
hereby is, approved.
---------------------------------------------------------------------------

    \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,
Deputy Secretary.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

 [FR Doc. E9-2852 Filed 2-10-09; 8:45 am]
BILLING CODE 8011-01-P

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