Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending the NYSE Rule Book To Delete References to Specific Exchange Systems and To Remove the Requirement That Opening Transactions Receive Specific Designations Pursuant to NYSE Rules 79A and 115A, 12417-12420 [E9-6354]

Download as PDF Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices Electronic Comments seeking automated handling of conversions and reversals. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition 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 Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. The Exchange neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing rule does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, provided that the selfregulatory organization has given the Commission written notice of its intent to file the proposed rule change at least five business days prior to the date of filing of the proposed rule change or such shorter time as designated by the Commission, the 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 At any time within 60 days of the filing of such 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. 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: mstockstill on PROD1PC66 with NOTICES • 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–CBOE–2009–017 on the subject line. All submissions should refer to File Number SR–CBOE–2009–017. 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–CBOE– 2009–017 and should be submitted on or before April 14, 2009. 12 15 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.14 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–6404 Filed 3–23–09; 8:45 am] 13 17 BILLING CODE 8010–01–P U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). The CBOE satisfied the requirement under Rule 19b–4(f)(6)(iii) that the CBOE 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. VerDate Nov<24>2008 01:06 Mar 24, 2009 Jkt 217001 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59495A; File No. SR– FINRA–2008–052] Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Order Granting Approval of a Proposed Rule Change Relating to the Adoption of FINRA Rule 2140 (Interfering With the Transfer of Customer Accounts in the Context of Employment Disputes) in the Consolidated FINRA Rulebook; Correction March 18, 2009. In FR Doc. E9–5212, for Tuesday, March 11, 2009, on page 10633, third column, footnote 8, the text is revised to read: The text of the proposed new FINRA rule, marked to show changes from NASD IM–2110–7 and to show that NASD IM–2110–7 is to be deleted in its entirety from the Transitional Rulebook, is attached as Exhibit 5 to the proposed rule change and is available at https:// www.finra.org/Industry/Regulation/ RuleFilings/2008/P117330. FINRA has transferred NASD Rule 2110 to the Consolidated FINRA Rulebook without change as FINRA Rule 2010. Securities Exchange Act Release No. 58643 (September 25, 2008), 73 FR 57174 (October 1, 2008) [File No. SR–FINRA– 2008–028]. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.1 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–6353 Filed 3–23–09; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–59592; File No. SR–NYSE– 2009–29] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending the NYSE Rule Book To Delete References to Specific Exchange Systems and To Remove the Requirement That Opening Transactions Receive Specific Designations Pursuant to NYSE Rules 79A and 115A March 17, 2009. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the 1 17 14 17 PO 00000 CFR 200.30–3(a)(12). Frm 00115 Fmt 4703 12417 Sfmt 4703 1 15 CFR 200.30–(a)(12). U.S.C.78s(b)(1). E:\FR\FM\24MRN1.SGM 24MRN1 12418 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that, on March 13, 2009, 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the NYSE Rule Book to delete references to specific Exchange systems and to remove the requirement that opening transactions receive specific designations pursuant to NYSE Rules 79A and 115A. 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. mstockstill on PROD1PC66 with NOTICES 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 proposes to amend its rule book to delete references to specific Exchange systems. The Exchange seeks to replace references to ‘‘DOT’’, ‘‘SuperDot’’, ‘‘Limit Order System’’ and ‘‘Opening Automated Report Service’’ (‘‘OARS’’) with ‘‘Exchange systems’’. In addition, the Exchange seeks to remove the requirement that certain opening transactions be designated ‘‘OPD’’, ‘‘OPN’’ pursuant to NYSE Rule 79A (Miscellaneous Requirements on Stock Market Procedures) and Rule 115A (Orders at Opening or in Unusual Situations).4 2 15 U.S.C. 78a. CFR 240.19b–4. 4 The Exchange notes that a companion filing is being made by NYSE Alternext LLC to amend similar rules of that self-regulatory organization. 3 17 VerDate Nov<24>2008 01:06 Mar 24, 2009 Jkt 217001 Background Exchange Systems On March 1, 1976, the Exchange commenced the operation of its Designated Order Turnaround (‘‘DOT’’) system. It was re-designated ‘‘SuperDot’’ (or sometimes cited as ‘‘SuperDOT’’) in 1984. Today, SuperDot® is an electronic order-routing system used by NYSE member organizations to send market and limit orders directly to the trading post where the security is traded. The system provides members and member organizations the ability to enter and manage their order flow on the Exchange electronically. After the orders have been executed, SuperDot uses the same electronic circuit to send post-trade reports back to member firms. At one time, the Exchange’s Limit Order System electronically filed orders to be executed when and if the specific limit price of an order is reached and electronically updates the Display Book. Good ’til Cancelled orders not executed on the day of submission are automatically stored in this system until executed or cancelled. When first introduced in 1980,5 OARS was designed to facilitate more efficient and accurate processing of orders received by the Exchange prior to the opening, a critical point in the trading day. It provided automation of certain clerical functions carried out at the trading post, issued reports on executions and substantially reduced the number of potential unmatched trades since processing was done electronically. OARS accepts member organizations’ pre-opening market orders for execution at the opening. OARS automatically pairs buy and sell orders and presents the imbalance to the DMM up to the time of the opening to assist the DMM in determining the opening price. Once that price is determined and transmitted by the DMM, the OARS system assigns the price to the orders it holds and issues reports back to the entering firms and brokers immediately. Opening Report ‘‘OPD’’ Opened Designation NYSE Rule 79A.20 requires a Designated Market Maker to obtain prior Floor Official approval if a security is going to open at one or more dollars away from the closing price at the Exchange when the closing price was See SR–NYSE Alternext–2009–28 (to be filed March 13, 2009). 5 See Securities Exchange Act Release No. 16649 (March 13, 1980) 45 FR 18541 approving SR– NYSE–80–09 and Securities Exchange Act Release No. 17132 (September 8, 1980) 45 FR 60526 (September 12, 1980), approving SR–NYSE–80–25. PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 under $20 a share, or two dollars or more away from the closing price at the Exchange when the closing price was $20 per share or more. Under (c) of Rule 79A.20, when such a transaction is an opening trade, the symbol ‘‘OPD’’, which means opened, will appear next to the transaction when published to the Consolidated Tape. The ‘‘OPD’’ designation traces back to when executions were manually entered to be reported to the Consolidated Tape. The ‘‘OPD’’ designation served two functions. First, because getting Floor Official approval required time, securities that were opening at one or more dollars away from the closing price usually had delayed openings. The ‘‘OPD’’ designation provided notice that the stock had in fact commenced trading. In addition, ‘‘OPD’’ provided a validation to the individual charged with manually entering the opening transaction information that the price associated with the opening transaction being reported was valid as the transaction would be a dollar or more away from the closing price. NYSE Rule 115A.30 provides that orders stored in OARS will receive ‘‘OPN’’ or ‘‘such other universal contra as the Exchange may designate’’ to identify that the trade took place in Exchange systems at the opening. ‘‘OPN’’ is used as an omnibus account designation to identify market orders executed through OARS to the member or member organization receiving the report of execution of the trade. Proposed Amendments Exchange Systems The Exchange is enhancing its systems to create a strong platform for technological growth that offers its customers the most comprehensive set of trading technology solutions to meet their needs and expectations. In order to attain this goal, the Exchange is continually upgrading its systems that accept, manage and report orders. In this process, legacy systems that once performed the functions governed by certain NYSE Rules may be upgraded or replaced in their entirety. In order to keep pace with the enhancements to its technology, the Exchange seeks to replace references to specific systems that perform a function and replace it with the phrase ‘‘Exchange systems’’. The Exchange therefore proposes to amend NYSE Rules 123C (Market on The Close Policy And Expiration Procedures), 123D (Openings and Halts in Trading), 130 (Overnight Comparison of Exchange Transactions) and 132B (Order Tracking Requirements) to replace any references to ‘‘Designated E:\FR\FM\24MRN1.SGM 24MRN1 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices Order Turnaround’’, ‘‘Limit Order System’’, ‘‘DOT’’, ‘‘SuperDot’’ or ‘‘SuperDOT’’ with ‘‘Exchange systems’’. The OARS system functioning will be carried out through similar functioning in the Display Book®,6 and as a result, there will no longer be a separate system for processing openings. As a result, the Exchange seeks to remove the references to ‘‘Opening Automated Report Service’’ from .30 in the Supplementary Material to Rule 91 (Taking or Supplying Securities Named in Order), from various references in .30 of Rule 115A (Orders at Opening or in Unusual Situations) and in .10 under Supplementary Material to Rule 134 (Differences and Omissions—Cleared Transactions). The Exchange seeks to insert the phrase ‘‘Exchange systems’’ in Rules 91.10, 115A.30 and 134 to replace the references to the ‘‘Opening Automated Report Service’’ or ‘‘the Service’’. In addition, the Exchange proposes to substitute the phrase ‘‘securities on the Exchange’’ and similar wording to replace the phrase ‘‘designated stock’’, ‘‘designated stocks’’ or ‘‘stocks’’. In practice, the instant rules apply to all instruments traded on the Exchange, which include structured products such as capital trusts and warrants. As such, the broader term ‘‘securities’’ more accurately reflects the types of instruments traded on the Exchange than the narrower term ‘‘stock’’. Finally, the Exchange proposes to remove the specific references to ‘‘OPN and OARS’’ as contras in Rule 115A and proposes to add language to the Rule to indicate that the designation by the Exchange of universal contras for orders stored in Exchange systems will not be deemed inconsistent with Exchange Rules 121.10 and 138. Both these rules allow that a substitute name may be used with respect to trade reports and the use of universal contras designated by the Exchange is deemed consistent with those requirements. ‘‘OPD’’ and ‘‘OPN’’ Designations These enhancements to Exchange systems have also negated the need for the ‘‘OPD’’ and ‘‘OPN’’ designations. Currently Exchange systems process orders, allocate the executed shares to the various participants, and publish reports of executions automatically. Given this change from how interest Book® is an order management and execution facility that receives and displays orders to the DMM and provides a mechanism to execute and report transactions and publish the results to the Consolidated Tape. In addition, the Display Book is connected to a variety of other Exchange systems for the purposes of comparison, surveillance, and reporting information to customers and other market data and national market systems. mstockstill on PROD1PC66 with NOTICES 6 Display VerDate Nov<24>2008 01:06 Mar 24, 2009 Jkt 217001 was processed in the manual environment, ‘‘OPD’’ no longer serves the purpose of validating the transaction price and is therefore no longer necessary, as the opening price is systemically validated. As such, the Exchange seeks through this filing to eliminate the requirement pursuant to Rule 79A.20(c) that opening transactions at one or more dollars away from the closing price ‘‘be accompanied when published on tape by the symbol ‘OPD’ ’’. In addition, as explained above, the Exchange also seeks to remove the reference to ‘‘OPN’’ in Rule 115A since, with the transference of the functions of OARS to the NYSE Display Book, the universal contra of ‘‘OPN’’ will no longer be used. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirement under Section 6(b)(5) 7 of the Act 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 national market system, and, in general, to protect investors and the public interest. The Exchange believes that the rescission of the references to outdated systems and processes promotes just and equitable principles of trade and protects investors and the public interest because it allows the Exchange to upgrade its systems in a timely manner thus providing customers the most comprehensive and all-encompassing set of trading technology solutions and mechanisms for efficient executions. 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 foregoing proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any 7 15 PO 00000 U.S.C. 78f(b)(5). Frm 00117 Fmt 4703 Sfmt 4703 12419 significant burden on competition; and (3) by its terms, does not become operative for 30 days after the date of 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 8 and Rule 19b–4(f)(6) thereunder.9 A proposed rule change filed under Rule 19b–4(f)(6) normally does not become operative for 30 days after the date of filing.10 However, Rule 19b– 4(f)(6)(iii) permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange 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. By waiving the operative delay, the proposed rule change may take effect on or about March 16, 2009, when the Exchange expects to install these technological changes. A waiver of the 30-day operative delay will also allow timely removal of outdated language in Exchange rules and avoid any potential confusion, and it will ensure that Exchange rule text is more accurate. For these reasons, the Commission designates the proposed rule change as operative upon filing.11 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.12 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. 8 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 10 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 19b–4(f)(6)(iii) requires the self-regulatory organization to give the Commission 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. NYSE has satisfied this requirement. 11 For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule’s effect on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 12 15 U.S.C. 78s(b)(3)(C). 9 17 E:\FR\FM\24MRN1.SGM 24MRN1 12420 Federal Register / Vol. 74, No. 55 / Tuesday, March 24, 2009 / Notices Comments may be submitted by any of the following methods: SECURITIES AND EXCHANGE COMMISSION Electronic Comments [Release No. 34–59593; File No. NYSEALTR–2009–28] • 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–2009–29 on the subject line. Paper Comments mstockstill on PROD1PC66 with NOTICES • 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–2009–29. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing will also be available for inspection and copying at the principal office of the self-regulatory organization. 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– 2009–29 and should be submitted on or before April 14, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–6354 Filed 3–23–09; 8:45 am] BILLING CODE 8010–01–P 13 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 01:06 Mar 24, 2009 Jkt 217001 Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Alternext U.S. LLC Amending NYSE Alternext Rules To Delete References to Specific Exchange Systems and To Remove the Requirement that Opening Transactions Receive Specific Designations Pursuant to NYSE Alternext Rules 79A and 115A. These Amendments are Proposed To Conform to Amendments Filed by the New York Stock Exchange LLC 1 March 17, 2009. Pursuant to Section 19(b)(1) 2 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 3 and Rule 19b–4 thereunder,4 notice is hereby given that, on March 13, 2009, NYSE Alternext U.S. LLC (the ‘‘Exchange’’ or ‘‘NYSE Alternext’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Alternext rules to delete references to specific Exchange systems and to remove the requirement that opening transactions receive specific designations pursuant to NYSE Alternext Rules 79A and 115A. 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. 1 See SR–NYSE–2009–29, to be filed March 13, 2009. 2 15 U.S.C. 78s(b)(1). 3 15 U.S.C. 78a. 4 17 CFR 240.19b–4. PO 00000 Frm 00118 Fmt 4703 Sfmt 4703 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 proposes to amend its rule book to delete references to specific Exchange systems. The Exchange seeks to replace references to ‘‘DOT’’, ‘‘SuperDot’’, ‘‘Limit Order System’’ and ‘‘Opening Automated Report Service’’ (‘‘OARS’’) with ‘‘Exchange systems’’. In addition, the Exchange seeks to remove the requirement that certain opening transactions be designated ‘‘OPD’’, ‘‘OPN’’ pursuant to NYSE Alternext Rule 79A (Miscellaneous Requirements on Stock Market Procedures) and Rule 115A (Orders at Opening or in Unusual Situations). 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 (the ‘‘Merger’’). In connection with the Merger, the Exchange’s predecessor, the American Stock Exchange LLC (‘‘Amex’’), a subsidiary of AMC, became a subsidiary of NYSE Euronext called NYSE Alternext U.S. LLC, 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 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). 6 15 U.S.C. 78f. 7 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\24MRN1.SGM 24MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 55 (Tuesday, March 24, 2009)]
[Notices]
[Pages 12417-12420]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-6354]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59592; File No. SR-NYSE-2009-29]

Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC
Amending the NYSE Rule Book To Delete References to Specific Exchange
Systems and To Remove the Requirement That Opening Transactions Receive
Specific Designations Pursuant to NYSE Rules 79A and 115A

March 17, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the

[[Page 12418]]

``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that,
on March 13, 2009, 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 the NYSE Rule Book to delete
references to specific Exchange systems and to remove the requirement
that opening transactions receive specific designations pursuant to
NYSE Rules 79A and 115A.

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 proposes to amend its rule book
to delete references to specific Exchange systems. The Exchange seeks
to replace references to ``DOT'', ``SuperDot'', ``Limit Order System''
and ``Opening Automated Report Service'' (``OARS'') with ``Exchange
systems''. In addition, the Exchange seeks to remove the requirement
that certain opening transactions be designated ``OPD'', ``OPN''
pursuant to NYSE Rule 79A (Miscellaneous Requirements on Stock Market
Procedures) and Rule 115A (Orders at Opening or in Unusual
Situations).\4\
---------------------------------------------------------------------------

\4\ The Exchange notes that a companion filing is being made by
NYSE Alternext LLC to amend similar rules of that self-regulatory
organization. See SR-NYSE Alternext-2009-28 (to be filed March 13,
2009).
---------------------------------------------------------------------------

Background

Exchange Systems

On March 1, 1976, the Exchange commenced the operation of its
Designated Order Turnaround (``DOT'') system. It was re-designated
``SuperDot'' (or sometimes cited as ``SuperDOT'') in 1984. Today,
SuperDot[supreg] is an electronic order-routing system used by NYSE
member organizations to send market and limit orders directly to the
trading post where the security is traded. The system provides members
and member organizations the ability to enter and manage their order
flow on the Exchange electronically. After the orders have been
executed, SuperDot uses the same electronic circuit to send post-trade
reports back to member firms.
At one time, the Exchange's Limit Order System electronically filed
orders to be executed when and if the specific limit price of an order
is reached and electronically updates the Display Book. Good 'til
Cancelled orders not executed on the day of submission are
automatically stored in this system until executed or cancelled.
When first introduced in 1980,\5\ OARS was designed to facilitate
more efficient and accurate processing of orders received by the
Exchange prior to the opening, a critical point in the trading day. It
provided automation of certain clerical functions carried out at the
trading post, issued reports on executions and substantially reduced
the number of potential unmatched trades since processing was done
electronically.
---------------------------------------------------------------------------

\5\ See Securities Exchange Act Release No. 16649 (March 13,
1980) 45 FR 18541 approving SR-NYSE-80-09 and Securities Exchange
Act Release No. 17132 (September 8, 1980) 45 FR 60526 (September 12,
1980), approving SR-NYSE-80-25.
---------------------------------------------------------------------------

OARS accepts member organizations' pre-opening market orders for
execution at the opening. OARS automatically pairs buy and sell orders
and presents the imbalance to the DMM up to the time of the opening to
assist the DMM in determining the opening price. Once that price is
determined and transmitted by the DMM, the OARS system assigns the
price to the orders it holds and issues reports back to the entering
firms and brokers immediately.

Opening Report ``OPD'' Opened Designation

NYSE Rule 79A.20 requires a Designated Market Maker to obtain prior
Floor Official approval if a security is going to open at one or more
dollars away from the closing price at the Exchange when the closing
price was under $20 a share, or two dollars or more away from the
closing price at the Exchange when the closing price was $20 per share
or more. Under (c) of Rule 79A.20, when such a transaction is an
opening trade, the symbol ``OPD'', which means opened, will appear next
to the transaction when published to the Consolidated Tape.
The ``OPD'' designation traces back to when executions were
manually entered to be reported to the Consolidated Tape. The ``OPD''
designation served two functions. First, because getting Floor Official
approval required time, securities that were opening at one or more
dollars away from the closing price usually had delayed openings. The
``OPD'' designation provided notice that the stock had in fact
commenced trading. In addition, ``OPD'' provided a validation to the
individual charged with manually entering the opening transaction
information that the price associated with the opening transaction
being reported was valid as the transaction would be a dollar or more
away from the closing price.
NYSE Rule 115A.30 provides that orders stored in OARS will receive
``OPN'' or ``such other universal contra as the Exchange may
designate'' to identify that the trade took place in Exchange systems
at the opening. ``OPN'' is used as an omnibus account designation to
identify market orders executed through OARS to the member or member
organization receiving the report of execution of the trade.

Proposed Amendments

Exchange Systems

The Exchange is enhancing its systems to create a strong platform
for technological growth that offers its customers the most
comprehensive set of trading technology solutions to meet their needs
and expectations. In order to attain this goal, the Exchange is
continually upgrading its systems that accept, manage and report
orders. In this process, legacy systems that once performed the
functions governed by certain NYSE Rules may be upgraded or replaced in
their entirety. In order to keep pace with the enhancements to its
technology, the Exchange seeks to replace references to specific
systems that perform a function and replace it with the phrase
``Exchange systems''.
The Exchange therefore proposes to amend NYSE Rules 123C (Market on
The Close Policy And Expiration Procedures), 123D (Openings and Halts
in Trading), 130 (Overnight Comparison of Exchange Transactions) and
132B (Order Tracking Requirements) to replace any references to
``Designated

[[Page 12419]]

Order Turnaround'', ``Limit Order System'', ``DOT'', ``SuperDot'' or
``SuperDOT'' with ``Exchange systems''.
The OARS system functioning will be carried out through similar
functioning in the Display Book[supreg],\6\ and as a result, there will
no longer be a separate system for processing openings. As a result,
the Exchange seeks to remove the references to ``Opening Automated
Report Service'' from .30 in the Supplementary Material to Rule 91
(Taking or Supplying Securities Named in Order), from various
references in .30 of Rule 115A (Orders at Opening or in Unusual
Situations) and in .10 under Supplementary Material to Rule 134
(Differences and Omissions--Cleared Transactions). The Exchange seeks
to insert the phrase ``Exchange systems'' in Rules 91.10, 115A.30 and
134 to replace the references to the ``Opening Automated Report
Service'' or ``the Service''. In addition, the Exchange proposes to
substitute the phrase ``securities on the Exchange'' and similar
wording to replace the phrase ``designated stock'', ``designated
stocks'' or ``stocks''. In practice, the instant rules apply to all
instruments traded on the Exchange, which include structured products
such as capital trusts and warrants. As such, the broader term
``securities'' more accurately reflects the types of instruments traded
on the Exchange than the narrower term ``stock''. Finally, the Exchange
proposes to remove the specific references to ``OPN and OARS'' as
contras in Rule 115A and proposes to add language to the Rule to
indicate that the designation by the Exchange of universal contras for
orders stored in Exchange systems will not be deemed inconsistent with
Exchange Rules 121.10 and 138. Both these rules allow that a substitute
name may be used with respect to trade reports and the use of universal
contras designated by the Exchange is deemed consistent with those
requirements.
---------------------------------------------------------------------------

\6\ Display Book[supreg] is an order management and execution
facility that receives and displays orders to the DMM and provides a
mechanism to execute and report transactions and publish the results
to the Consolidated Tape. In addition, the Display Book is connected
to a variety of other Exchange systems for the purposes of
comparison, surveillance, and reporting information to customers and
other market data and national market systems.
---------------------------------------------------------------------------

``OPD'' and ``OPN'' Designations

These enhancements to Exchange systems have also negated the need
for the ``OPD'' and ``OPN'' designations. Currently Exchange systems
process orders, allocate the executed shares to the various
participants, and publish reports of executions automatically. Given
this change from how interest was processed in the manual environment,
``OPD'' no longer serves the purpose of validating the transaction
price and is therefore no longer necessary, as the opening price is
systemically validated. As such, the Exchange seeks through this filing
to eliminate the requirement pursuant to Rule 79A.20(c) that opening
transactions at one or more dollars away from the closing price ``be
accompanied when published on tape by the symbol `OPD' ''. In addition,
as explained above, the Exchange also seeks to remove the reference to
``OPN'' in Rule 115A since, with the transference of the functions of
OARS to the NYSE Display Book, the universal contra of ``OPN'' will no
longer be used.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirement under Section 6(b)(5) \7\ of the Act 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 national market system, and, in general,
to protect investors and the public interest. The Exchange believes
that the rescission of the references to outdated systems and processes
promotes just and equitable principles of trade and protects investors
and the public interest because it allows the Exchange to upgrade its
systems in a timely manner thus providing customers the most
comprehensive and all-encompassing set of trading technology solutions
and mechanisms for efficient executions.
---------------------------------------------------------------------------

\7\ 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 foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms, does not become operative for 30 days after the
date of 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 \8\ and Rule 19b-4(f)(6) thereunder.\9\
---------------------------------------------------------------------------

\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing.\10\ However,
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter
time if such action is consistent with the protection of investors and
the public interest. The Exchange requested that the Commission waive
the 30-day operative delay.
---------------------------------------------------------------------------

\10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission 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. NYSE has satisfied this requirement.
---------------------------------------------------------------------------

The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest. By
waiving the operative delay, the proposed rule change may take effect
on or about March 16, 2009, when the Exchange expects to install these
technological changes. A waiver of the 30-day operative delay will also
allow timely removal of outdated language in Exchange rules and avoid
any potential confusion, and it will ensure that Exchange rule text is
more accurate. For these reasons, the Commission designates the
proposed rule change as operative upon filing.\11\
---------------------------------------------------------------------------

\11\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's effect on
efficiency, competition, and capital formation. See 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 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.\12\
---------------------------------------------------------------------------

\12\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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.

[[Page 12420]]

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-2009-29 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-2009-29. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing will also be available for
inspection and copying at the principal office of the self-regulatory
organization. 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-2009-29 and should be submitted on or before April 14, 2009.

For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-6354 Filed 3-23-09; 8:45 am]
BILLING CODE 8010-01-P

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