Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex Equities Rules 1000, 60 and 123C To Be More Consistent With the Trading Characteristics of Securities Traded on NYSE Amex, 20764-20767 [E9-10171]
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20764
Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices
because debt holders may have different
and conflicting rights.
7. Applicant submits that the
concerns underlying the Independent
Trustee Requirement are not implicated
if the trustee for an Issuer is
independent of the sponsor, servicer,
and credit enhancer for the Issuer, but
is affiliated with an underwriter for the
Issuer, because, in that situation no
single entity would act in all capacities
in the issuance of the ABS and the
operation of an Issuer. Applicant states
that applicant would continue to act as
an independent party safeguarding the
assets of any Issuer regardless of an
affiliation with an underwriter of the
ABS. Applicant submits that the
concern that affiliation could lead to a
trustee monitoring the activities of an
affiliate also is not implicated by a
trustee’s affiliation with an underwriter,
because, in practice, a trustee for an
Issuer does not monitor the distribution
of securities or any other activity
performed by underwriters. Applicant
further states that the requested relief
would be consistent with the broader
purpose of rule 3a–7 of not hampering
the growth and development of the
structured finance market, to the extent
consistent with investor protection.
Applicant’s Conditions
The applicant agrees that any order
granting the requested relief will be
subject to the following conditions:
1. The applicant will not be affiliated
with any person involved in the
organization or operation of the Issuer
in an ABS Transaction other than the
underwriter.
2. The applicant’s relationship to an
affiliated underwriter will be disclosed
in writing to all parties involved in an
ABS Transaction, including the rating
agencies and the ABS holders.
3. An underwriter affiliated with the
applicant will not be involved in the
operation of an Issuer, and its
involvement in the organization of an
Issuer will extend only to determining
the assets to be pooled, assisting in
establishing the terms of the ABS to be
underwritten, and providing the
sponsor with a warehouse line of credit
with which to purchase the pool assets.
4. An affiliated person of the
applicant, including an affiliated
underwriter, will not provide credit or
credit enhancement to an Issuer if the
applicant serves as trustee to the Issuer.
5. An underwriter affiliated with the
applicant will not engage in any
remarketing agent activities, including
involvement in any auction process in
which ABS interest rates, yields, or
dividends are reset at designated
intervals in any ABS Transaction
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23:12 May 04, 2009
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6. All of an affiliated underwriter’s
contractual obligations pursuant to the
underwriting agreement will be
enforceable by the sponsor.
7. Consistent with the requirements of
rule 3a–7(a)(4)(i), the applicant will
resign as trustee for the Issuer if
applicant becomes obligated to enforce
any of an affiliated underwriter’s
obligations to the Issuer.
8. The applicant will not price its
services as trustee in a manner designed
to facilitate its affiliate being named
underwriter.
For the Commission, by the Division of
Investment Management, under delegated
authority.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–10254 Filed 5–4–09; 8:45 am]
BILLING CODE 8010–01–P
Sunshine Act Meeting
Notice is hereby given, pursuant to
the provisions of the Government in the
Sunshine Act, Public Law 94–409, that
the Securities and Exchange
Commission will hold a Closed Meeting
on Monday, May 4, 2009 at 9 a.m.
Commissioners, Counsel to the
Commissioners, the Secretary to the
Commission, and recording secretaries
will attend the Closed Meeting. Certain
staff members who have an interest in
the matters also may be present.
The General Counsel of the
Commission, or his designee, has
certified that, in his opinion, one or
more of the exemptions set forth in 5
U.S.C. 552b(c)(5), (7), and (10) and 17
CFR 200.402(a)(5), (7), and (10), permit
consideration of the scheduled matters
at the Closed Meeting.
Commissioner Paredes, as duty
officer, voted to consider the item listed
for the Closed Meeting in closed
session, and determined that no earlier
notice thereof was possible.
The subject matter of the Closed
Meeting scheduled for Monday, May 4,
2009 will be:
Institution of an injunctive action;
and
institution of an administrative
proceeding of an enforcement nature.
At times, changes in Commission
priorities require alterations in the
scheduling of meeting items.
For further information and to
ascertain what, if any, matters have been
added, deleted or postponed, please
contact:
The Office of the Secretary at (202)
551–5400.
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BILLING CODE P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59834; File No. SR–
NYSEAmex–2009–14]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending NYSE Amex
Equities Rules 1000, 60 and 123C To
Be More Consistent With the Trading
Characteristics of Securities Traded on
NYSE Amex
April 28, 2009.
SECURITIES AND EXCHANGE
COMMISSION
PO 00000
Dated: April 30, 2009.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–10400 Filed 5–1–09; 11:15 am]
Sfmt 4703
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 20,
2009, NYSE Amex LLC (‘‘NYSE Amex’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. 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 Amex Equities Rule 1000
(‘‘Automatic Execution of Limit Orders
Against Orders Reflected in Exchange
Published Quotation’’), NYSE Amex
Equities Rule 60 (‘‘Dissemination of
Quotations’’) and NYSE Amex Equities
Rule 123C (‘‘Market on the Close Policy
and Expiration Procedures’’) to be more
consistent with the trading
characteristics of securities traded on
NYSE Amex. The text of the proposed
rule change is available at the Exchange,
the Commission’s Public Reference
Room, and https://www.nyse.com.
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
1 15
2 17
U.S.C. 78s(b)(1).
CFR 240.19b–4.
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Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices
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
NYSE Amex LLC (‘‘NYSE Amex’’ or
‘‘Exchange’’), formerly the American
Stock Exchange LLC and NYSE
Alternext US LLC,3 proposes to amend
NYSE Amex Equities Rule 1000
(‘‘Automatic Execution of Limit Orders
Against Orders Reflected in Exchange
Published Quotation’’), NYSE Amex
Equities Rule 60 (‘‘Dissemination of
Quotations’’) and NYSE Amex Equities
Rule 123C (‘‘Market on the Close Policy
and Expiration Procedures’’) to be more
consistent with the trading
characteristics of securities traded on
NYSE Amex.
Specifically, the Exchange proposes to
amend NYSE Amex Equities Rule 1000
to allow securities priced at $1000 or
higher (‘‘high-priced securities’’) to be
eligible for automatic execution and
make a conforming amendment to NYSE
Amex Equities Rule 60(d)(iii)(B)(I)–(II).
The Exchange also seeks to amend
NYSE Amex Equities Rule 123C(5) to
reduce the order imbalance size
required for mandatory imbalance
publications at 3:40 p.m. and 3:50 p.m.
from 50,000 shares to 25,000 shares.
a. Background
As described more fully in a related
rule filing,4 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’’).5 The effective
date of the Merger was October 1, 2008.
In connection with the Merger on
December 1, 2008, the Exchange
3 On
March 3, 2009, the Exchange submitted a
rule filing to change its name from NYSE Alternext
US LLC to NYSE Amex LLC (SR–NYSEALTR–
2009–24).
4 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).
5 15 U.S.C. 78f.
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23:12 May 04, 2009
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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 Amex Trading
Systems’’) are operated by the New York
Stock Exchange (‘‘NYSE’’) on behalf of
the Exchange.6
As part of the Equities Relocation,
NYSE Amex adopted NYSE Rules 1–
1004, subject to such changes as
necessary to apply the Rules to the
Exchange, as the NYSE Amex Equities
Rules to govern trading on the NYSE
Amex Trading Systems.7 The NYSE
Amex 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 Amex
Equities Rules as necessary to conform
with rule changes to corresponding
NYSE Rules filed by the NYSE.
NYSE Amex Equities Rules
1000(a)(vi) and 60(d)(iii)(B)(I)–(II), as
adopted from the NYSE, provide that
high-priced securities, i.e., securities
priced above $1,000, are ineligible for
automatic executions. High-priced
securities are traded manually by the
assigned Designated Market-Maker
(‘‘DMM’’).
NYSE Amex Equities Rule 123C, as
adopted from the NYSE, sets forth the
procedures for the entry of market atthe-close (‘‘MOC’’) and limit at-the-close
(‘‘LOC’’) orders.8 Included in these
procedures is the requirement that at
3:40 p.m. if a security has a disparity
between MOC and marketable LOC
interest to buy and MOC and marketable
LOC interest to sell of 50,000 shares or
6 See Securities Exchange Act Release No. 58705
(October 1, 2008), 73 FR 58995 (October 8, 2008)
(SR–Amex 2008–63) (approving the Equities
Relocation).
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); 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) (implementing 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 Amex 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 Amex Equities to track changes to
corresponding NYSE Rule 62).
8 In the NYSE Rules and for the purposes of this
discussion, the terms ‘‘market-on-close’’ and ‘‘limiton-close’’ are used interchangeably with ‘‘market-atthe-close’’ and ‘‘limit-at-the-close.’’
PO 00000
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20765
more, the assigned DMM is required to
disseminate a publication informing the
investing public of the disparity.9 In
addition, a DMM may, with Floor
Official approval, disseminate an
imbalance publication even if the
disparity is less than 50,000 shares if the
imbalance in the security is significant
in relation to the average daily trading
volume in the security. At 3:50 p.m. the
DMM is required to provide an update
of the previous imbalance publication.
b. Proposed Amendments
As previously discussed, NYSE Amex
adopted NYSE Rules 1–1004, subject to
minor changes as necessary to apply
those rules as NYSE Amex Equities
Rules on the NYSE Amex trading Floor.
Since the implementation of these rules
on December 1, 2008, the Exchange has
determined that NYSE Amex Equities
Rule 1000, NYSE Amex Equities Rule 60
and NYSE Amex Equities Rule 123C, as
applied, are inconsistent with the
trading characteristics of its securities.
Accordingly, the Exchange seeks to
amend these rules to provide regulatory
imbalance information and automatic
execution that is more aligned with the
trading activity and volume on its Floor.
The Exchange proposes to amend
NYSE Amex Equities Rule 1000 to make
high-priced securities eligible for
automatic execution. Prior to the
Exchange’s relocation and
implementation of Amex Equities Rules,
all securities, including high-priced
securities, traded on the Amex
Exchange, were automatically
executed.10 Given the specific market
characteristics of NYSE Amex, the
Exchange believes it is appropriate to
make high-priced securities eligible for
automatic execution because such
automation benefits the NYSE Amex
market participant and serves the public
interest. Liquidity in NYSE Amex-listed
securities is more dispersed among
multiple market centers than securities
traded on the NYSE. As such, highpriced securities on NYSE Amex must
be eligible for immediate and automatic
execution in order to effectively
compete for order flow with protected
quotes.
Accordingly, the Exchange proposes
to rescind section (a)(vi) from NYSE
Amex Equities Rule 1000, thereby
allowing high-priced securities to be
9 NYSE
Amex Equities Rule 123C(5).
Legacy Rules established the automatic
execution of securities traded on the Amex. See
Amex Rule 128A—AEMI (Automatic Execution),
Amex Rule 123—AEMI (Manner of Bidding and
Offering), and Amex Rule 126—AEMI (Precedence
of Bids and Offers). Auto-Ex Eligible Securities are
defined in Amex Rule 128A—AEMI as ‘‘all ETFs,
equities, and securities that trade like equities
traded on the Exchange.’’
10 Amex
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Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices
automatically executed on the
Exchange. In addition, the Exchange
seeks to make conforming changes to
NYSE Amex Equities Rule 60. The
Exchange proposes to amend section
(d)(iii)(B)(I) and (II) in order to have all
high-priced securities autoquoted like
all other securities pursuant to the
provision of NYSE Amex Equities Rule
60.
The Exchange further proposes to
amend NYSE Amex Equities Rule 123C
to reduce the share volume required to
disseminate mandatory imbalance
publications at 3:40 p.m. and 3:50 p.m.
from 50,000 shares to 25,000 shares.
Prior to the adoption of NYSE Amex
Equities Rule 123C, Amex Rule 131A
governed entry and execution of MOC
and LOC orders as part of the closing
transaction. Pursuant to Amex Rule
131A, a specialist was required to
disseminate an imbalance publication if
there was a buy or a sell disparity in the
amount of 25,000 shares.
Exchange-listed securities are
significantly different from those
securities listed on the NYSE which
overall have a much higher Average
Daily Volume (‘‘ADV’’) and therefore are
more likely to have MOC/LOC orders
that result in imbalances of 50,000
shares or more. Conversely, a MOC/LOC
imbalance of 25,000–50,000 shares in an
NYSE Amex listed security is generally
significant given the typically lower
ADV of such securities; thus,
publication of an imbalance is
appropriate. The Exchange reviewed
trading statistics of MOC/LOC orders
submitted to NYSE Amex and found
that from January 2, 2009–January 20,
2009, NYSE Amex only had six out of
248 securities that had received MOC/
LOC orders for shares totaling more than
50,000 shares. This represented 2.4% of
NYSE Amex MOC/LOC orders that met
this 50,000 share threshold.
Additionally, none of the trading
imbalances in the 247 Amex securities
ever totaled 50,000 shares.
Given this information, NYSE Amex
proposes to amend NYSE Amex Equities
Rule 123C to reduce the order
imbalance size required for mandatory
imbalance publication from 50,000 to
25,000 shares. Currently, an imbalance
of 25,000 shares would not be subject to
the mandatory publication requirement.
The DMM on the Exchange would not
be required to publish an imbalance of
25,000 shares unless the DMM
determined, with Floor Official
approval, that such imbalance was
significantly greater than the average
daily volume in the security. The
Exchange believes that reducing the
share volume from 50,000 to 25,000
shares will result in more transparency
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23:12 May 04, 2009
Jkt 217001
for NYSE Amex market participants and
promotes the principles of a free and
open market which benefits the public
interest.
The Exchange believes that the
reduction of the size parameter for
mandatory publishing of imbalances is
appropriate for the Exchange’s listed
securities because it provides
mandatory imbalance publications
consistent with trading volume on the
Exchange, thus providing investors with
more accurate information about
disparities in MOC/LOC orders
consistent with the trading volume on
the Exchange.
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.
Currently DMMs manually trade NYSE
Amex high-priced securities. This
proposed rule change would allow for
these high-priced securities to be
eligible for automatic execution and
auto-quoting which would allow NYSE
Amex to protect its quote and remain
competitive with the other market
centers. Furthermore, reducing the
mandatory publication of imbalances to
25,000 shares provides more
transparency to the NYSE Amex market
participants. NYSE Amex submits that
these proposed rule changes remove
impediments to and perfect the
mechanism of a free and open market.
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.
11 15
PO 00000
U.S.C. 78f(b)(5).
Frm 00096
Fmt 4703
Sfmt 4703
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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) by its terms, does not 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, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 12 and subparagraph (f)(6) of
Rule 19b–4 thereunder.13
A proposed rule change filed under
19b–4(f)(6) normally may not become
operative prior to 30 days after the date
of filing.14 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 and designate the proposed rule
change operative upon filing. The
Exchange stated that the waiver of this
period will allow orders in high-priced
securities to effectively compete as
protected quotations. In addition, the
Exchange stated that waiver of the
operative delay will allow the Exchange
to conform the mandatory publication
requirements to the market
characteristics of the Exchange,
benefitting NYSE Amex market
participants and the public interest. The
Commission believes that waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Therefore, the
Commission designates the proposal
operative upon filing.16
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,
12 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
14 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give the Commission written notice of its intent to
file the proposed rule change at least five business
days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. The Exchange has satisfied this
requirement.
15 Id.
16 For purposes only of waiving the 30-day
operative delay of this proposal, the Commission
has considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
13 17
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Federal Register / Vol. 74, No. 85 / Tuesday, May 5, 2009 / Notices
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
No. SR–NYSEAmex–2009–14 on the
subject line.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–10171 Filed 5–4–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59838; File No. SR–
NYSEArca–2009–36]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing of Proposed
Rule Change Relating to NYSE Arca
Equities Rule 7.10 Governing Clearly
Erroneous Executions
April 28, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
• Send paper comments in triplicate
notice is hereby given that on April 27,
2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
to Elizabeth M. Murphy, Secretary,
the ‘‘Exchange’’) filed with the
Securities and Exchange Commission,
Securities and Exchange Commission
Station Place, 100 F Street, NE.,
(‘‘Commission’’) the proposed rule
Washington, DC 20549–1090.
change as described in Items I, II, and
All submissions should refer to File
III below, which Items have been
Number SR–NYSEAmex–2009–14. This prepared by the Exchange. The
file number should be included on the
Commission is publishing this notice to
subject line if e-mail is used. To help the solicit comments on the proposed rule
Commission process and review your
change from interested persons.
comments more efficiently, please use
only one method. The Commission will I. Self-Regulatory Organization’s
post all comments on the Commission’s Statement of the Terms of Substance of
the Proposed Rule Change
Internet Web site (https://www.sec.gov/
The Exchange proposes to amend
rules/sro.shtml). Copies of the
NYSE Arca Equities Rule 7.10 governing
submission, all subsequent
clearly erroneous executions. The text of
amendments, all written statements
the proposed rule change is attached as
with respect to the proposed rule
Exhibit 5 to the 19b-4 form. A copy of
change that are filed with the
this filing is available on the Exchange’s
Commission, and all written
Web site at www.nyse.com, at the
communications relating to the
Exchange’s principal office and at the
proposed rule change between the
Commission’s Public Reference Room.
Commission and any person, other than
II. Self-Regulatory Organization’s
those that may be withheld from the
Statement of the Purpose of, and
public in accordance with the
Statutory Basis for, the Proposed Rule
provisions of 5 U.S.C. 552, will be
Change
available for inspection and copying in
the Commission’s Public Reference
In its filing with the Commission, the
Room, on official business days between self-regulatory organization included
the hours of 10 a.m. and 3 p.m. Copies
statements concerning the purpose of,
of such filing also will be available for
and basis for, the proposed rule change
inspection and copying at the principal
and discussed any comments it received
on the proposed rule change. The text
office of the Exchange. All comments
received will be posted without change; of those statements may be examined at
the places specified in Item IV below.
the Commission does not edit personal
The Exchange has prepared summaries,
identifying information from
set forth in sections A, B, and C below,
submissions. You should submit only
of the most significant parts of such
information that you wish to make
statements.
available publicly. All submissions
should refer to File Number SR–
17 17 CFR 200.30–3(a)(12).
NYSEAmex–2009–14 and should be
1 15 U.S.C. 78s(b)(1).
submitted on or before May 26, 2009.
2 17 CFR 240.19b–4.
Paper Comments
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23:12 May 04, 2009
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20767
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to amend
NYSE Arca Rule 7.10 in order to
improve the Exchange’s rule regarding
clearly erroneous executions. The
proposed changes are part of a marketwide effort designed to provide
transparency and finality with respect to
clearly erroneous executions. This effort
seeks to achieve consistent results for
participants across U.S. equities
exchanges while maintaining a fair and
orderly market, protecting investors and
protecting the public interest. The
proposed changes are more fully
discussed below.
Definition
The Exchange will maintain the
meaning of the definition of a clearly
erroneous execution, but proposes to
add clarifying language with respect to
cancelled trades. The proposed change
identifies that a transaction made in
clearly erroneous error and agreed to be
canceled by both parties or determined
by the Corporation to be clearly
erroneous will be removed ‘‘from the
Consolidated Tape.’’ 3 A trade will only
be removed from the Consolidated Tape
when the determination is deemed final
and any applicable appeals have been
exhausted.
ETP Holder Initiated Review Requests
The Exchange proposes to amend
NYSE Arca Rule 7.10(b) to update the
procedures for requesting a review of a
clearly erroneous transaction. First, the
proposed rule would require that
requests for review be made only by
electronic mail (‘‘email’’) or other
electronic means specified from time to
time by the Exchange. Under the current
policy the Exchange also allows
requests to be made via telephone and
facsimile. Requiring requests for review
to be made via email creates a standard
format that can easily be logged and
tracked. The Exchange will publish the
email address or other electronic means
to be used for all clearly erroneous
filings in a circular distributed to Equity
Trading Permit (‘‘ETP’’) Holders.4
The Exchange further proposes that
requests for review must be received by
3 For purposes of this Rule, ‘‘removed from the
Consolidate Tape’’ means that a subsequent
message will be sent to the Consolidated Tape
indicating that a previously executed trade has been
cancelled.
4 NYSE Arca Rule 1.1(n) defines an ETP Holder
as a ‘‘sole proprietorship, partnership, corporation,
limited liability company or other organization in
good standing that has been issued an ETP.’’
E:\FR\FM\05MYN1.SGM
05MYN1
Agencies
[Federal Register Volume 74, Number 85 (Tuesday, May 5, 2009)]
[Notices]
[Pages 20764-20767]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-10171]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59834; File No. SR-NYSEAmex-2009-14]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex
Equities Rules 1000, 60 and 123C To Be More Consistent With the Trading
Characteristics of Securities Traded on NYSE Amex
April 28, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 20, 2009, NYSE Amex LLC (``NYSE Amex'' or ``Exchange'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Amex Equities Rule 1000
(``Automatic Execution of Limit Orders Against Orders Reflected in
Exchange Published Quotation''), NYSE Amex Equities Rule 60
(``Dissemination of Quotations'') and NYSE Amex Equities Rule 123C
(``Market on the Close Policy and Expiration Procedures'') to be more
consistent with the trading characteristics of securities traded on
NYSE Amex. The text of the proposed rule change is available at the
Exchange, the Commission's Public Reference Room, and https://www.nyse.com.
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
[[Page 20765]]
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
NYSE Amex LLC (``NYSE Amex'' or ``Exchange''), formerly the
American Stock Exchange LLC and NYSE Alternext US LLC,\3\ proposes to
amend NYSE Amex Equities Rule 1000 (``Automatic Execution of Limit
Orders Against Orders Reflected in Exchange Published Quotation''),
NYSE Amex Equities Rule 60 (``Dissemination of Quotations'') and NYSE
Amex Equities Rule 123C (``Market on the Close Policy and Expiration
Procedures'') to be more consistent with the trading characteristics of
securities traded on NYSE Amex.
---------------------------------------------------------------------------
\3\ On March 3, 2009, the Exchange submitted a rule filing to
change its name from NYSE Alternext US LLC to NYSE Amex LLC (SR-
NYSEALTR-2009-24).
---------------------------------------------------------------------------
Specifically, the Exchange proposes to amend NYSE Amex Equities
Rule 1000 to allow securities priced at $1000 or higher (``high-priced
securities'') to be eligible for automatic execution and make a
conforming amendment to NYSE Amex Equities Rule 60(d)(iii)(B)(I)-(II).
The Exchange also seeks to amend NYSE Amex Equities Rule 123C(5) to
reduce the order imbalance size required for mandatory imbalance
publications at 3:40 p.m. and 3:50 p.m. from 50,000 shares to 25,000
shares.
a. Background
As described more fully in a related rule filing,\4\ 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'').\5\ The
effective date of the Merger was October 1, 2008.
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\4\ 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).
\5\ 15 U.S.C. 78f.
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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 Amex Trading
Systems'') are operated by the New York Stock Exchange (``NYSE'') on
behalf of the Exchange.\6\
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\6\ See Securities Exchange Act Release No. 58705 (October 1,
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving
the Equities Relocation).
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As part of the Equities Relocation, NYSE Amex adopted NYSE Rules 1-
1004, subject to such changes as necessary to apply the Rules to the
Exchange, as the NYSE Amex Equities Rules to govern trading on the NYSE
Amex Trading Systems.\7\ The NYSE Amex 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
Amex Equities Rules as necessary to conform with rule changes to
corresponding NYSE Rules filed by the NYSE.
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\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); 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)
(implementing 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 Amex 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
Amex Equities to track changes to corresponding NYSE Rule 62).
---------------------------------------------------------------------------
NYSE Amex Equities Rules 1000(a)(vi) and 60(d)(iii)(B)(I)-(II), as
adopted from the NYSE, provide that high-priced securities, i.e.,
securities priced above $1,000, are ineligible for automatic
executions. High-priced securities are traded manually by the assigned
Designated Market-Maker (``DMM'').
NYSE Amex Equities Rule 123C, as adopted from the NYSE, sets forth
the procedures for the entry of market at-the-close (``MOC'') and limit
at-the-close (``LOC'') orders.\8\ Included in these procedures is the
requirement that at 3:40 p.m. if a security has a disparity between MOC
and marketable LOC interest to buy and MOC and marketable LOC interest
to sell of 50,000 shares or more, the assigned DMM is required to
disseminate a publication informing the investing public of the
disparity.\9\ In addition, a DMM may, with Floor Official approval,
disseminate an imbalance publication even if the disparity is less than
50,000 shares if the imbalance in the security is significant in
relation to the average daily trading volume in the security. At 3:50
p.m. the DMM is required to provide an update of the previous imbalance
publication.
---------------------------------------------------------------------------
\8\ In the NYSE Rules and for the purposes of this discussion,
the terms ``market-on-close'' and ``limit-on-close'' are used
interchangeably with ``market-at-the-close'' and ``limit-at-the-
close.''
\9\ NYSE Amex Equities Rule 123C(5).
---------------------------------------------------------------------------
b. Proposed Amendments
As previously discussed, NYSE Amex adopted NYSE Rules 1-1004,
subject to minor changes as necessary to apply those rules as NYSE Amex
Equities Rules on the NYSE Amex trading Floor. Since the implementation
of these rules on December 1, 2008, the Exchange has determined that
NYSE Amex Equities Rule 1000, NYSE Amex Equities Rule 60 and NYSE Amex
Equities Rule 123C, as applied, are inconsistent with the trading
characteristics of its securities. Accordingly, the Exchange seeks to
amend these rules to provide regulatory imbalance information and
automatic execution that is more aligned with the trading activity and
volume on its Floor.
The Exchange proposes to amend NYSE Amex Equities Rule 1000 to make
high-priced securities eligible for automatic execution. Prior to the
Exchange's relocation and implementation of Amex Equities Rules, all
securities, including high-priced securities, traded on the Amex
Exchange, were automatically executed.\10\ Given the specific market
characteristics of NYSE Amex, the Exchange believes it is appropriate
to make high-priced securities eligible for automatic execution because
such automation benefits the NYSE Amex market participant and serves
the public interest. Liquidity in NYSE Amex-listed securities is more
dispersed among multiple market centers than securities traded on the
NYSE. As such, high-priced securities on NYSE Amex must be eligible for
immediate and automatic execution in order to effectively compete for
order flow with protected quotes.
---------------------------------------------------------------------------
\10\ Amex Legacy Rules established the automatic execution of
securities traded on the Amex. See Amex Rule 128A--AEMI (Automatic
Execution), Amex Rule 123--AEMI (Manner of Bidding and Offering),
and Amex Rule 126--AEMI (Precedence of Bids and Offers). Auto-Ex
Eligible Securities are defined in Amex Rule 128A--AEMI as ``all
ETFs, equities, and securities that trade like equities traded on
the Exchange.''
---------------------------------------------------------------------------
Accordingly, the Exchange proposes to rescind section (a)(vi) from
NYSE Amex Equities Rule 1000, thereby allowing high-priced securities
to be
[[Page 20766]]
automatically executed on the Exchange. In addition, the Exchange seeks
to make conforming changes to NYSE Amex Equities Rule 60. The Exchange
proposes to amend section (d)(iii)(B)(I) and (II) in order to have all
high-priced securities autoquoted like all other securities pursuant to
the provision of NYSE Amex Equities Rule 60.
The Exchange further proposes to amend NYSE Amex Equities Rule 123C
to reduce the share volume required to disseminate mandatory imbalance
publications at 3:40 p.m. and 3:50 p.m. from 50,000 shares to 25,000
shares. Prior to the adoption of NYSE Amex Equities Rule 123C, Amex
Rule 131A governed entry and execution of MOC and LOC orders as part of
the closing transaction. Pursuant to Amex Rule 131A, a specialist was
required to disseminate an imbalance publication if there was a buy or
a sell disparity in the amount of 25,000 shares.
Exchange-listed securities are significantly different from those
securities listed on the NYSE which overall have a much higher Average
Daily Volume (``ADV'') and therefore are more likely to have MOC/LOC
orders that result in imbalances of 50,000 shares or more. Conversely,
a MOC/LOC imbalance of 25,000-50,000 shares in an NYSE Amex listed
security is generally significant given the typically lower ADV of such
securities; thus, publication of an imbalance is appropriate. The
Exchange reviewed trading statistics of MOC/LOC orders submitted to
NYSE Amex and found that from January 2, 2009-January 20, 2009, NYSE
Amex only had six out of 248 securities that had received MOC/LOC
orders for shares totaling more than 50,000 shares. This represented
2.4% of NYSE Amex MOC/LOC orders that met this 50,000 share threshold.
Additionally, none of the trading imbalances in the 247 Amex securities
ever totaled 50,000 shares.
Given this information, NYSE Amex proposes to amend NYSE Amex
Equities Rule 123C to reduce the order imbalance size required for
mandatory imbalance publication from 50,000 to 25,000 shares.
Currently, an imbalance of 25,000 shares would not be subject to the
mandatory publication requirement. The DMM on the Exchange would not be
required to publish an imbalance of 25,000 shares unless the DMM
determined, with Floor Official approval, that such imbalance was
significantly greater than the average daily volume in the security.
The Exchange believes that reducing the share volume from 50,000 to
25,000 shares will result in more transparency for NYSE Amex market
participants and promotes the principles of a free and open market
which benefits the public interest.
The Exchange believes that the reduction of the size parameter for
mandatory publishing of imbalances is appropriate for the Exchange's
listed securities because it provides mandatory imbalance publications
consistent with trading volume on the Exchange, thus providing
investors with more accurate information about disparities in MOC/LOC
orders consistent with the trading volume on the Exchange.
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. Currently
DMMs manually trade NYSE Amex high-priced securities. This proposed
rule change would allow for these high-priced securities to be eligible
for automatic execution and auto-quoting which would allow NYSE Amex to
protect its quote and remain competitive with the other market centers.
Furthermore, reducing the mandatory publication of imbalances to 25,000
shares provides more transparency to the NYSE Amex market participants.
NYSE Amex submits that these proposed rule changes remove impediments
to and perfect the mechanism of a free and open market.
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\11\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing 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) by its terms, does not 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, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \12\ and subparagraph (f)(6) of Rule
19b-4 thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\14\
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 and designate the proposed
rule change operative upon filing. The Exchange stated that the waiver
of this period will allow orders in high-priced securities to
effectively compete as protected quotations. In addition, the Exchange
stated that waiver of the operative delay will allow the Exchange to
conform the mandatory publication requirements to the market
characteristics of the Exchange, benefitting NYSE Amex market
participants and the public interest. The Commission believes that
waiving the 30-day operative delay is consistent with the protection of
investors and the public interest. Therefore, the Commission designates
the proposal operative upon filing.\16\
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\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give the Commission
written notice of its intent to file the proposed rule change at
least five business days prior to the date of filing of the proposed
rule change, or such shorter time as designated by the Commission.
The Exchange has satisfied this requirement.
\15\ Id.
\16\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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,
[[Page 20767]]
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 No. SR-NYSEAmex-2009-14 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAmex-2009-14. 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 such
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-NYSEAmex-2009-14 and should be submitted on or before
May 26, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-10171 Filed 5-4-09; 8:45 am]
BILLING CODE 8010-01-P