Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Revising Rules Governing the Use of Telephones on the Options Trading Floor, 25779-25782 [E9-12448]
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Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices
letter about the proposed rule change.4
On May 8, 2009 and May 18, 2009, the
MSRB filed responses to the comment
letters.5 This order approves the
proposed rule change.
The proposed rule change would
establish the continuing disclosure pilot
of the continuing disclosure service of
the MSRB’s EMMA system. The
continuing disclosure pilot would
receive electronic submissions of, and
would make publicly available on the
Internet, continuing disclosure
documents and related information
voluntarily submitted by issuers,
obligated persons and their agents. The
MSRB originally requested approval of
the continuing disclosure pilot to
commence operation on May 11, 2009,
or such later date as may be announced
by the MSRB in a notice published on
the MSRB Web site, which date shall be
no later than 30 days after Commission
approval of the proposed rule change. In
addition, the MSRB requested approval
of the continuing disclosure pilot for a
period ending on July 1, 2009.6 The
MSRB has now requested approval of
this proposed rule change by no later
than May 22, 2009, so that the MSRB
may commence operation of the pilot
continuing disclosure service on June 1,
2009.7 A full description of the proposal
is contained in the Commission’s
Notice.
As previously noted, the Commission
received one comment letter relating to
the proposed rule change.8 The ABA
expressed concerns regarding certain
legal issues relating to the protection of
its intellectual property and contractual
rights in the CUSIP database (the
‘‘Database’’) that it states have not yet
been resolved. The ABA noted that it
was the owner of the Database, which is
administered by the CUSIP Service
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4 See
letter from Douglas Adamson, Executive
Vice President, Technical Services Division,
American Bankers Association (‘‘ABA’’), dated
April 24, 2009.
5 See letters from Ernesto A. Lanza, General
Counsel, MSRB, to Elizabeth M. Murphy, Secretary,
SEC, dated May 8, 2009 (‘‘Response Letter I’’) and
May 18, 2009 (‘‘Response Letter II’’).
6 The Commission has previously approved the
establishment of the continuing disclosure service
of EMMA, which will commence operation on July
1, 2009. See Securities Exchange Act Release No.
59061 (December 5, 2008), 73 FR 75778 (December
12, 2008) (File No. SR–MSRB–2008–05) (approving
the continuing disclosure service of EMMA with an
effective date of July 1, 2009). The EMMA
continuing disclosure service is designed to
commence operation simultaneously with the
effectiveness of certain amendments to Exchange
Act Rule 15c2–12 adopted by the Commission. See
Securities Exchange Act Release No. 59062
(December 5, 2008), 73 FR 76104 (December 15,
2008) (adopting amendments to Exchange Act Rule
15c2–12).
7 See Response Letter II, supra note 5.
8 See supra note 4.
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Bureau (‘‘CSB’’), as its exclusive
licensee, and believed it was critical
that these legal issues be resolved before
the MSRB be allowed to move forward
with the proposed expansion and full
implementation of EMMA. It further
requested that the operation of the
EMMA Web site incorporate a variety of
protections with respect to its
intellectual property rights, including
compliance with CSB’s current
licensing practices, permissible use
guidelines, appropriate copyright
notices and adequate security.9
In response to the ABA’s concerns,
the MSRB and the CSB, as the ABA’s
exclusive licensee, have entered into a
memorandum of understanding dated
May 15, 2009 (the ‘‘MOU’’) in which
CSB expressly permits use of the CUSIP
database for purposes, among other
things, of displaying information on the
MSRB’s EMMA public Web portal and
for inclusion in data disseminated by
the MSRB to subscribers of the EMMA
data feed. The MSRB has agreed in the
MOU to provide certain safeguards with
respect to the ABA’s intellectual
property and contractual rights of the
ABA in the CUSIP database.10 The
Commission believes that the MSRB has
taken sufficient action to ensure that all
necessary arrangements will be in place
in order to operate the continuing
disclosure pilot as anticipated by the
implementation date.
The Commission has carefully
considered the proposed rule change,
the comment letter received, and the
MSRB’s responses to the comment letter
and finds that the proposed rule change
is consistent with the requirements of
the Act and the rules and regulations
thereunder applicable to the MSRB 11
and, in particular, the requirements of
Section 15B(b)(2)(C) of the Act 12 and
the rules and regulations thereunder.
Section 15B(b)(2)(C) of the Act requires,
9 See
letter from the ABA, supra note 4.
Response Letter II, supra note 5. The MSRB
stated that this agreement would expand and
reposition existing language on the EMMA Web site
to ensure that users of the EMMA Web site have a
fuller understanding of the sources of information
displayed on the EMMA Web site and of the
proprietary rights of third parties (including but not
limited to the proprietary rights of the ABA in the
Database) in certain displayed data elements. Such
language would advise users of the limitations on
their use or re-use of any proprietary information
accessed on the EMMA Web site, and users would
be required to acknowledge such limitations before
being provided access to any portion of the
Database. Additional systemic and reporting
mechanisms would be implemented to further
protect against inappropriate use of the Database.
See Response Letter I, supra note 5.
11 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition
and capital formation. 15 U.S.C. 78c(f).
12 15 U.S.C. 78o–4(b)(2)(C).
10 See
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25779
among other things, that the MSRB’s
rules be designed to prevent fraudulent
and manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in municipal
securities, to remove impediments to
and perfect the mechanism of a free and
open market in municipal securities,
and, in general, to protect investors and
the public interest.13 In particular, the
Commission finds that the proposed
rule change is consistent with the Act
because the EMMA continuing
disclosure service, including the pilot
phase thereof, would serve as an
additional mechanism by which the
MSRB works toward removing
impediments to and helping to perfect
the mechanisms of a free and open
market in municipal securities. The
pilot phase would be an important
transitional step toward ensuring the
effective and efficient operation of the
permanent EMMA continuing
disclosure service upon launch on July
1, 2009.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,14 that the
proposed rule change (SR–MSRB–2009–
03), be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–12441 Filed 5–28–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59939; File No. SR–
NYSEAmex–2009–17]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1
Thereto Revising Rules Governing the
Use of Telephones on the Options
Trading Floor
May 19, 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 May 4,
2009, NYSE Amex LLC (‘‘NYSE Amex’’
or the ‘‘Exchange’’) filed with the
13 Id.
14 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
15 17
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Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. The
Exchange filed the proposed rule change
pursuant to Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders it effective upon filing
with the Commission. The Exchange
filed Amendment No. 1 to the proposed
rule change on May 18, 2009.5 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 (i)
eliminate old rules governing
telephones and hand held devices, (ii)
introduce new rules governing the use
of telephones on the Trading Floor, and
(iii) clarify recently adopted language
regarding the removal of hand held
devices from the Trading Floor. The text
of the proposed rule change is attached
as Exhibit 5 to the 19b–4 form. A copy
of this filing is available on the
Exchange’s Web site at https://
www.nyse.com, at the Exchange’s
principal office and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
3 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
5 Amendment No. 1 amended the Exchange’s
proposed revision of Part 1C(i)(12) of the
Supplementary Material to Rule 476A (Imposition
of Fines for Minor Violations of Rules) to more
accurately cite Exchange Rule 902NY(i)(1).
Amendment No. 1 further amended the description
of the violation in Part 1C(i)(12) to more closely
reflect Rule 902NY(i)(1), which prohibits an
employee of an ATP Holder, as well as an ATP
Holder, to employ any alternative communication
device on the Trading Floor without prior approval
of the Exchange. In addition, Amendment No. l
made corresponding changes to the Minor Rule
Plan Recommended Fine Schedule also contained
in Rule 476A.
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4 17
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A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of this filing is to (i)
eliminate old rules governing
telephones, hand held devices, and
Floor Wires, (ii) introduce new rules
governing the use of telephones on the
Trading Floor 6 and (iii) clarify recently
adopted language regarding the removal
of hand held devices from the Trading
Floor.
The Exchange proposes to delete,
from PART II—Rules Principally
Applicable to Floor Transactions,
Section 6—Floor Wires in its entirety.
This section is obsolete given changes in
telecommunications devices, changes in
market structure, enhanced
requirements for the systematization of
orders, and maintenance of electronic
records.
In its place, the Exchange proposes
new Rule 902NY(i), Telephones on the
Trading Floor. The new Rule is modeled
on NYSE Arca Rule 6.2(h), although it
does not include certain outdated or
inapplicable concepts of the NYSE Arca
Rule.7
The proposed rule requires all ATP
Holders to register with the Exchange,
prior to use, any telephone to be used
on the Trading Floor.8 At the time of
registration, ATP Holder representatives
must agree that they are aware of and
understand the rules governing
telephones on the Trading Floor.
In addition, the Exchange notes that
separate from the registration and use of
telephones, the Exchange shall retain
the authority to review and approve,
6 NYSE Amex LLC recently relocated its Options
Trading Floor to 11 Wall Street, New York, New
York, effective with the approval of SR–
NYSEALTR–2008–14. See Securities Exchange Act
Release No. 59472 (February 27, 2009), 74 FR 9843
(March 6, 2009) (notice of filing of Amendment No.
1 and order granting accelerated approval of the
SR–NYSEALTR–2008–14 as modified by
Amendment No. 1).
7 Certain concepts in NYSE Arca Rule 6.2(h) have
no natural corollary within NYSE Amex rules,
including, for example, the terms OTP Firm and
trading posts. In the alternative, NYSE Amex rules
refer to employees of ATP Holders or Trading
Zones, respectively—and such concepts will be so
reflected throughout the proposed rule. Further,
concepts such as Floor Managers or General Access
Phones are not applicable to NYSE Amex and
therefore are not included in the proposed NYSE
Amex rule.
8 The Exchange is not proposing to require ATP
Holders to register by category of user. Such a
requirement is inapplicable since (i) the proposed
rule applies to ATP Holders and all employees of
ATP Holders, regardless of category and (ii) such a
requirement was a historical response to capacity
limitations (which no longer apply) thereby
allowing the Exchange to restrict use by certain
categories of users if capacity issues arose.
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prior to their use, any alternative
communication device (including but
not limited to devices offering
capabilities such as e-mail, instant
messaging, texting, or Internetsupported communications). Also,
according to proposed Rule 902NY(i)(1):
no ATP Holder or employee of an ATP
Holder, may employ any alternative
communication device (other than
telephones as described herein) on the
Trading Floor without prior approval of
the Exchange.
The proposed rule specifically
prohibits the use of any device to
maintain an open line of continuous
communication that would allow a
person off the Trading Floor to
continuously monitor the activities in
the Trading Crowd. This prohibition
covers intercoms, walkie-talkies and any
similar devices.9
The proposed rule governs all ATP
Holders and employees of ATP Holders
while on the Floor.10 As with NYSE
Arca Rule 6.2(h)(3), this proposed rule
restricts the transmission of quotation
information to only those quotations
that have been publicly disseminated. It
requires any order that is transmitted
over the phone to be immediately
recorded in the EOC device. It prohibits
the receipt of an order over a phone
when the call is placed from off the
Floor into the Trading Crowd. The Rule
also provides that the Exchange may
require the taping of any telephone line,
and that ATP Holders and their
employees agree to consent to tape
recording of any line.
The Exchange also proposes Rule
902(i)(5), Records, in order to require
the retention of certain records of all
telephones and all other approved
communications devices used to
conduct business on the Exchange.11
NYSE Amex further proposes a
retention period of three years, the first
two years in an accessible place,
consistent with the retention period of
9 Certain capacity restrictions set forth in NYSE
Arca Rule 6.2(h)(2) are no longer relevant and will
not be included in the NYSE Amex proposed rule.
10 By applying the proposed rule to ATP Holders
and employees of ATP Holders, the Exchange is
using a term designed to encompass the same scope
of individuals as the equivalent NYSE Arca rule. In
doing so, NYSE Amex eliminates the need to
specifically reference, as NYSE Arca Rule 6.2(h)
does, each type of covered employee, such as Floor
Broker, Market Maker, or Clerk. As a result, NYSE
Amex (i) collapsed the substantive provisions of
NYSE Arca Rule 6.2(h)(4)–(5) into proposed Rule
902NY(i)(4) and (ii) has not carried over the specific
references to Floor Broker Clerks, Stock Execution
Clerks and Market Maker Clerks set forth in the
NYSE Arca Rule. Finally, NYSE Arca Rule
6.2(h)(5)(D), regarding Lead Market Makers, is
entirely inapplicable and therefore not copied into
the proposed rule.
11 This proposed rule is modeled on NYSE Arca
Rule 6.2(h)(9).
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Securities and Exchange Commission
Rule 17a–4.
The Exchange further proposes Rule
902(i)(6), Revocation of Registration,
which establishes the Exchange’s
authority to deny, limit or revoke an
ATP Holder’s permission to use of any
registered telephone on the Trading
Floor. Although an ATP Holder need
only register with the Exchange, prior to
use, any telephone to be used on the
Trading Floor, the Exchange retains the
right to deny, limit, or revoke an ATP
Holder’s permission. Specifically,
according to the proposed rule, the
Exchange may deny, limit or revoke
registration of any telephone whenever
it determines, in accordance with the
procedures set forth in Rule 476,12 that
use of such device is inconsistent with
the public interest, the protection of
investors, or just and equitable
principles of trade, or such device has
been or is being used to facilitate any
violation of the Securities Exchange Act
of 1934, as amended, or rules
thereunder, or the Exchange rules.
Finally, similar to NYSE Arca Rule
6.2(h)(10), the Exchange will not assume
any liability for problems associated
with the use of telephones or other
communication devices.13
The Exchange proposes changes to
Rule 476A (Imposition of Fines for
Minor Violations of Rules) to replace
obsolete references to Exchange Rule
220 with accurate references to
Exchange Rule 902NY(i). The Exchange
also proposes adding text designed to
specifically address violations of
Exchange Rule 902NY(i) pertaining to
the pre-approval of alternative
communication devices. Consistent
with violations of Exchange Rule
902NY(i) regarding an ATP Holder’s
failure to register telephones prior to
their use, the Exchange proposes to
establish first, second, and third level
monetary fines of $500.00, $1,000.00,
and $2,500.00 regarding an ATP
Holder’s unauthorized use of alternative
communication devices.
The Exchange also seeks to clarify
recently adopted language in Rule
902NY(g) governing the removal of
12 See e-mail from Andrew Stevens, Chief
Counsel—U.S. Equities & Derivatives, NYSE
Euronext, to Gary Rubin, Attorney-Advisor,
Commission, dated May 19, 2009, confirming that
the reference to Rule 475 in the Purpose section and
Exhibit 1 of the proposal should be corrected to
refer to Rule 476.
13 The Exchange notes that Commentaries .01–.02
and .04 to NYSE Arca Rule 6.2 do not apply
specifically to subsection (h) and therefore are not
reflected in the NYSE Amex proposed rule. The
Exchange also notes that the concept reflected in
Commentary .03 to NYSE Arca Rule 6.2 is
incorporated into NYSE Amex proposed Rule
902NY(i)(3)(B) and (4)(C).
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25781
of the Act 18 and Rule 19b–4(f)(6)(iii)
thereunder.19
A proposed rule change filed under
Rule 19b–4(f)(6) 20 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),21 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
2. Statutory Basis
interest.
At any time within 60 days of the
The Exchange believes that the
filing of the proposed rule change, the
proposed rule change is consistent with Commission may summarily abrogate
Section 6(b) 14 of the Act, in general, and such rule change if it appears to the
furthers the objectives of Section
Commission that such action is
6(b)(5),15 in particular, in that it is
necessary or appropriate in the public
designed to facilitate transactions in
interest, for the protection of investors,
securities, to promote just and equitable or otherwise in furtherance of the
purposes of the Act.22
principles of trade, to enhance
competition, and to protect investors
IV. Solicitation of Comments
and the public interest, in that it
Interested persons are invited to
proposes to modernize and clarify rules
submit written data, views, and
for the use of telephones and other
arguments concerning the foregoing,
communication devices on the Trading
including whether the proposed rule
Floor.
change is consistent with the Act.
Comments may be submitted by any of
B. Self-Regulatory Organization’s
the following methods:
Statement on Burden on Competition
Hand Held Trading Devices from the
Trading Floor to make it clear that
removal of such devices is prohibited,
that the prohibition extends to any
person, including but not limited to
ATP Holders and ATP Holder
employees, and that such violation is
subject to disciplinary action pursuant
to Rules 476 or 476A.
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 16 and Rule
19b–4(f)(6) thereunder.17 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 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)
14 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
16 15 U.S.C. 78s(b)(3)(A)(iii).
17 17 CFR 240.19b–4(f)(6).
15 15
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Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEAmex–2009–17 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–NYSEAmex–2009–17. 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/
18 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s intent
to file the proposed rule change along with a brief
description and text of the proposed rule change,
at least five business days prior to the date of filing
of the proposed rule change, or such shorter time
as designated by the Commission. The Exchange
has satisfied the pre-filing requirement.
20 17 CFR 240.19b–4(f)(6).
21 17 CFR 240.19b–4(f)(6)(iii).
22 For purposes of calculating the 60-day
abrogation period, the Commission considers the
proposed rule change to have been filed on May 18,
2009, the date the Exchange filed Amendment
No. 1.
19 17
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Federal Register / Vol. 74, No. 102 / Friday, May 29, 2009 / Notices
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–2009–17 and should be
submitted on or before June 19, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–12448 Filed 5–28–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59956; File No. SR–
NYSEAmex–2009–15]
Self-Regulatory Organizations; NYSE
Amex LLC; Order Granting Accelerated
Approval of Proposed Rule Change, as
Modified by Amendment No. 1,
Amending Rule 935NY—Order
Exposure Requirements To Reduce the
Exposure Periods From Three
Seconds to One Second
mstockstill on PROD1PC66 with NOTICES
May 21, 2009.
I. Introduction
On April 21, 2009, NYSE Amex LLC
(‘‘NYSE Amex’’ or the ‘‘Exchange’’),
filed with the Securities and Exchange
Commission (‘‘Commission’’) pursuant
to Section 19(b)(1) of the Securities
Exchange Act of 1934 (‘‘Act’’) 1 and Rule
19b–4 thereunder,2 a proposed rule
change to reduce certain order exposure
periods from three seconds to one
second. The proposed rule change was
published for comment in the Federal
23 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(l).
2 17 CFR 240.19b–4.
1 15
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Register on May 5, 2009.3 The
Commission received no comments on
the proposal. The Exchange filed
Amendment No. 1 to the proposal on
May 20, 2009.4 This order approves the
proposed rule change, as modified by
Amendment No. 1, on an accelerated
basis.
II. Description of the Proposal
The purpose of the proposed rule
change is to reduce the exposure time
during which Amex Users may not
execute as principal against orders they
represent as agent from three seconds to
one second. Under the current Rule
935NY, Order Exposure Requirements,
Users may not execute as principal
orders they represent as agent unless
agency orders are first exposed on the
Exchange for at least three seconds, or
the User has been bidding or offering on
the Exchange for at least three seconds
prior to receiving an agency order that
is executable against such bid or offer.
During this three-second exposure
period, other market participants may
enter orders to trade against the exposed
order. Under this proposal, the exposure
periods contained in Rule 935NY would
be reduced to one second.
III. Discussion and Commission
Findings
After carefully reviewing the
proposed rule change, the Commission
finds that the proposal is consistent
with the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.5 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,6 which, among other
things, requires that the rules of a
national securities exchange be
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating 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 Commission
also finds that the proposed rule change
is consistent with Section 6(b)(8) of the
Act,7 which requires that the rules of an
exchange not impose any burden on
3 See Securities Exchange Act Release No. 59825
(April 27, 2009), 74 FR 20771 (‘‘Notice’’).
4 Amendment No. 1 was a technical amendment
to correct an inadvertent error in language in the
Purpose Section of 19b–4.
5 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
6 15 U.S.C. 78f(b)(5).
7 15 U.S.C. 78f(b)(8).
PO 00000
Frm 00086
Fmt 4703
Sfmt 4703
competition that is not necessary or
appropriate in furtherance of the
purposes of the Act.
The Commission believes that, given
the electronic nature of the NYSE Amex
System, reducing the exposure periods
from three seconds to one second could
facilitate the prompt execution of
orders, while continuing to provide
market participants with an opportunity
to compete for exposed bids and offers.
To substantiate that NYSE Amex
members could receive, process, and
communicate a response back to the
Exchange within one second, the
Exchange stated that it conducted a
survey of Amex Trading Permit Holders
(‘‘ATP Holders’’) to find out whether
their systems were capable of receiving,
processing, and responding to orders in
a meaningful way within one second.
NYSE Amex stated that of the six
member firms that responded to the
Exchange’s survey, four indicated that
the turnaround time was less than one
second, one declined to comment
regarding its turnaround time, and one
stated that it was not exactly sure of its
turnaround time.8 NYSE Amex also
stated that none of the responding ATP
Holders anticipated any problems
related to order processing if the
Exchange reduced the exposure periods
to one second, and none of the
responding ATP Holders were opposed
to the reduced exposure periods.9 Based
on NYSE Amex’s statements regarding
the survey results, the Commission
believes that market participants should
continue to have opportunities to
compete for exposed bids and offers
within a one second exposure period.
Accordingly, the Commission believes
that it is consistent with the Act for
NYSE Amex to reduce the exposure
times discussed herein from three
seconds to one second.
The Commission finds good cause to
approve the proposed rule change prior
to the thirtieth day after publication for
comment in the Federal Register. The
Commission notes that the proposed
rule change was noticed for a fifteen-day
comment period, and no comments
were received. The Commission
believes that the Exchange has provided
reasonable support for its belief that the
Exchange’s market participants would
continue to have an opportunity to
compete for exposed bids and offers if
the exposure periods were reduced to
one second as proposed. Finally, the
8 See
Notice.
NYSE Amex stated that one respondent,
when asked about the proposed one second
exposure periods, indicated that it ‘‘might be hard
to respond that rapidly’’ but then went on to state
that they felt NYSE Amex should make the change
in order to match other option exchanges’ rules. Id.
9 Id.
E:\FR\FM\29MYN1.SGM
29MYN1
]]>Agencies
[Federal Register Volume 74, Number 102 (Friday, May 29, 2009)]
[Notices]
[Pages 25779-25782]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12448]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59939; File No. SR-NYSEAmex-2009-17]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1
Thereto Revising Rules Governing the Use of Telephones on the Options
Trading Floor
May 19, 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 May 4, 2009, NYSE Amex LLC (``NYSE Amex'' or the ``Exchange'')
filed with the
[[Page 25780]]
Securities and Exchange Commission (the ``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been prepared by the Exchange. The Exchange filed the proposed
rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders it effective upon filing with
the Commission. The Exchange filed Amendment No. 1 to the proposed rule
change on May 18, 2009.\5\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ Amendment No. 1 amended the Exchange's proposed revision of
Part 1C(i)(12) of the Supplementary Material to Rule 476A
(Imposition of Fines for Minor Violations of Rules) to more
accurately cite Exchange Rule 902NY(i)(1). Amendment No. 1 further
amended the description of the violation in Part 1C(i)(12) to more
closely reflect Rule 902NY(i)(1), which prohibits an employee of an
ATP Holder, as well as an ATP Holder, to employ any alternative
communication device on the Trading Floor without prior approval of
the Exchange. In addition, Amendment No. l made corresponding
changes to the Minor Rule Plan Recommended Fine Schedule also
contained in Rule 476A.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to (i) eliminate old rules governing
telephones and hand held devices, (ii) introduce new rules governing
the use of telephones on the Trading Floor, and (iii) clarify recently
adopted language regarding the removal of hand held devices from the
Trading Floor. The text of the proposed rule change is attached as
Exhibit 5 to the 19b-4 form. A copy of this filing is available on the
Exchange's Web site at https://www.nyse.com, at the Exchange's principal
office and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this filing is to (i) eliminate old rules governing
telephones, hand held devices, and Floor Wires, (ii) introduce new
rules governing the use of telephones on the Trading Floor \6\ and
(iii) clarify recently adopted language regarding the removal of hand
held devices from the Trading Floor.
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\6\ NYSE Amex LLC recently relocated its Options Trading Floor
to 11 Wall Street, New York, New York, effective with the approval
of SR-NYSEALTR-2008-14. See Securities Exchange Act Release No.
59472 (February 27, 2009), 74 FR 9843 (March 6, 2009) (notice of
filing of Amendment No. 1 and order granting accelerated approval of
the SR-NYSEALTR-2008-14 as modified by Amendment No. 1).
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The Exchange proposes to delete, from PART II--Rules Principally
Applicable to Floor Transactions, Section 6--Floor Wires in its
entirety. This section is obsolete given changes in telecommunications
devices, changes in market structure, enhanced requirements for the
systematization of orders, and maintenance of electronic records.
In its place, the Exchange proposes new Rule 902NY(i), Telephones
on the Trading Floor. The new Rule is modeled on NYSE Arca Rule 6.2(h),
although it does not include certain outdated or inapplicable concepts
of the NYSE Arca Rule.\7\
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\7\ Certain concepts in NYSE Arca Rule 6.2(h) have no natural
corollary within NYSE Amex rules, including, for example, the terms
OTP Firm and trading posts. In the alternative, NYSE Amex rules
refer to employees of ATP Holders or Trading Zones, respectively--
and such concepts will be so reflected throughout the proposed rule.
Further, concepts such as Floor Managers or General Access Phones
are not applicable to NYSE Amex and therefore are not included in
the proposed NYSE Amex rule.
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The proposed rule requires all ATP Holders to register with the
Exchange, prior to use, any telephone to be used on the Trading
Floor.\8\ At the time of registration, ATP Holder representatives must
agree that they are aware of and understand the rules governing
telephones on the Trading Floor.
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\8\ The Exchange is not proposing to require ATP Holders to
register by category of user. Such a requirement is inapplicable
since (i) the proposed rule applies to ATP Holders and all employees
of ATP Holders, regardless of category and (ii) such a requirement
was a historical response to capacity limitations (which no longer
apply) thereby allowing the Exchange to restrict use by certain
categories of users if capacity issues arose.
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In addition, the Exchange notes that separate from the registration
and use of telephones, the Exchange shall retain the authority to
review and approve, prior to their use, any alternative communication
device (including but not limited to devices offering capabilities such
as e-mail, instant messaging, texting, or Internet-supported
communications). Also, according to proposed Rule 902NY(i)(1): no ATP
Holder or employee of an ATP Holder, may employ any alternative
communication device (other than telephones as described herein) on the
Trading Floor without prior approval of the Exchange.
The proposed rule specifically prohibits the use of any device to
maintain an open line of continuous communication that would allow a
person off the Trading Floor to continuously monitor the activities in
the Trading Crowd. This prohibition covers intercoms, walkie-talkies
and any similar devices.\9\
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\9\ Certain capacity restrictions set forth in NYSE Arca Rule
6.2(h)(2) are no longer relevant and will not be included in the
NYSE Amex proposed rule.
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The proposed rule governs all ATP Holders and employees of ATP
Holders while on the Floor.\10\ As with NYSE Arca Rule 6.2(h)(3), this
proposed rule restricts the transmission of quotation information to
only those quotations that have been publicly disseminated. It requires
any order that is transmitted over the phone to be immediately recorded
in the EOC device. It prohibits the receipt of an order over a phone
when the call is placed from off the Floor into the Trading Crowd. The
Rule also provides that the Exchange may require the taping of any
telephone line, and that ATP Holders and their employees agree to
consent to tape recording of any line.
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\10\ By applying the proposed rule to ATP Holders and employees
of ATP Holders, the Exchange is using a term designed to encompass
the same scope of individuals as the equivalent NYSE Arca rule. In
doing so, NYSE Amex eliminates the need to specifically reference,
as NYSE Arca Rule 6.2(h) does, each type of covered employee, such
as Floor Broker, Market Maker, or Clerk. As a result, NYSE Amex (i)
collapsed the substantive provisions of NYSE Arca Rule 6.2(h)(4)-(5)
into proposed Rule 902NY(i)(4) and (ii) has not carried over the
specific references to Floor Broker Clerks, Stock Execution Clerks
and Market Maker Clerks set forth in the NYSE Arca Rule. Finally,
NYSE Arca Rule 6.2(h)(5)(D), regarding Lead Market Makers, is
entirely inapplicable and therefore not copied into the proposed
rule.
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The Exchange also proposes Rule 902(i)(5), Records, in order to
require the retention of certain records of all telephones and all
other approved communications devices used to conduct business on the
Exchange.\11\ NYSE Amex further proposes a retention period of three
years, the first two years in an accessible place, consistent with the
retention period of
[[Page 25781]]
Securities and Exchange Commission Rule 17a-4.
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\11\ This proposed rule is modeled on NYSE Arca Rule 6.2(h)(9).
---------------------------------------------------------------------------
The Exchange further proposes Rule 902(i)(6), Revocation of
Registration, which establishes the Exchange's authority to deny, limit
or revoke an ATP Holder's permission to use of any registered telephone
on the Trading Floor. Although an ATP Holder need only register with
the Exchange, prior to use, any telephone to be used on the Trading
Floor, the Exchange retains the right to deny, limit, or revoke an ATP
Holder's permission. Specifically, according to the proposed rule, the
Exchange may deny, limit or revoke registration of any telephone
whenever it determines, in accordance with the procedures set forth in
Rule 476,\12\ that use of such device is inconsistent with the public
interest, the protection of investors, or just and equitable principles
of trade, or such device has been or is being used to facilitate any
violation of the Securities Exchange Act of 1934, as amended, or rules
thereunder, or the Exchange rules.
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\12\ See e-mail from Andrew Stevens, Chief Counsel--U.S.
Equities & Derivatives, NYSE Euronext, to Gary Rubin, Attorney-
Advisor, Commission, dated May 19, 2009, confirming that the
reference to Rule 475 in the Purpose section and Exhibit 1 of the
proposal should be corrected to refer to Rule 476.
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Finally, similar to NYSE Arca Rule 6.2(h)(10), the Exchange will
not assume any liability for problems associated with the use of
telephones or other communication devices.\13\
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\13\ The Exchange notes that Commentaries .01-.02 and .04 to
NYSE Arca Rule 6.2 do not apply specifically to subsection (h) and
therefore are not reflected in the NYSE Amex proposed rule. The
Exchange also notes that the concept reflected in Commentary .03 to
NYSE Arca Rule 6.2 is incorporated into NYSE Amex proposed Rule
902NY(i)(3)(B) and (4)(C).
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The Exchange proposes changes to Rule 476A (Imposition of Fines for
Minor Violations of Rules) to replace obsolete references to Exchange
Rule 220 with accurate references to Exchange Rule 902NY(i). The
Exchange also proposes adding text designed to specifically address
violations of Exchange Rule 902NY(i) pertaining to the pre-approval of
alternative communication devices. Consistent with violations of
Exchange Rule 902NY(i) regarding an ATP Holder's failure to register
telephones prior to their use, the Exchange proposes to establish
first, second, and third level monetary fines of $500.00, $1,000.00,
and $2,500.00 regarding an ATP Holder's unauthorized use of alternative
communication devices.
The Exchange also seeks to clarify recently adopted language in
Rule 902NY(g) governing the removal of Hand Held Trading Devices from
the Trading Floor to make it clear that removal of such devices is
prohibited, that the prohibition extends to any person, including but
not limited to ATP Holders and ATP Holder employees, and that such
violation is subject to disciplinary action pursuant to Rules 476 or
476A.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \14\ of the Act, in general, and furthers the
objectives of Section 6(b)(5),\15\ in particular, in that it is
designed to facilitate transactions in securities, to promote just and
equitable principles of trade, to enhance competition, and to protect
investors and the public interest, in that it proposes to modernize and
clarify rules for the use of telephones and other communication devices
on the Trading Floor.
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\14\ 15 U.S.C. 78f(b).
\15\ 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
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \16\ and Rule 19b-4(f)(6) thereunder.\17\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
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 \18\ and Rule 19b-
4(f)(6)(iii) thereunder.\19\
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\16\ 15 U.S.C. 78s(b)(3)(A)(iii).
\17\ 17 CFR 240.19b-4(f)(6).
\18\ 15 U.S.C. 78s(b)(3)(A).
\19\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, at least
five business days prior to the date of filing of the proposed rule
change, or such shorter time as designated by the Commission. The
Exchange has satisfied the pre-filing requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \20\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\21\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\20\ 17 CFR 240.19b-4(f)(6).
\21\ 17 CFR 240.19b-4(f)(6)(iii).
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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, or otherwise
in furtherance of the purposes of the Act.\22\
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\22\ For purposes of calculating the 60-day abrogation period,
the Commission considers the proposed rule change to have been filed
on May 18, 2009, the date the Exchange filed Amendment No. 1.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEAmex-2009-17 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-NYSEAmex-2009-17. 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/
[[Page 25782]]
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-2009-17 and should be submitted on or before
June 19, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-12448 Filed 5-28-09; 8:45 am]
BILLING CODE 8010-01-P
