Self-Regulatory Organizations; NYSE Alternext US LLC; Notice of Filing of Amendment No. 2 and Order Granting Accelerated Approval to a Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, Changing Certain NYSE Amex Equities Rules To Conform Them With Changes to Corresponding Rules Filed by the New York Stock Exchange LLC, 26449-26451 [E9-12714]
Download as PDF
Federal Register / Vol. 74, No. 104 / Tuesday, June 2, 2009 / Notices
conformity with other obvious error
provisions previously approved by the
Commission.8 The amendments relating
to non-CBOE market-makers and ROS
and HOSS rotations also conform
CBOE’s rule to rules already approved
by the Commission.9 The Commission
believes that expanding the
applicability of the extended customer
obvious error notification provision for
transactions involving certain nonbroker-dealer customer orders that are
entered before the opening rotation and
that are executed as part of HAL on the
opening process or that are executed
immediately following the opening
rotation through the Complex Order
Book would give those customers a
reasonable amount of time to discover
an obvious error transaction and to
request an obvious error review. The
Commission believes that limiting the
price adjustment for binary options is
reasonable and objective in light of the
payout structure of those options.
Catastrophic Error
Erroneous Prints and Quotes in the
Underlying
The Commission deems that the
provision allowing CBOE to designate
the applicable underlying securities (or
related instruments) and relevant
markets for any option is beneficial to
members in determining whether an
erroneous print or quote has occurred.
The provision takes into account the
fact that members often base their
options prices on various products in
various markets and that erroneous
options transactions may be a result of
erroneous prints or quotes in markets
other than the primary market for an
underlying security. The changes to the
calculation of average quote width and
allowing adjustments in addition to
nullifications are appropriate and
8 See, e.g., Securities Exchange Act Release No.
57712 (April 24, 2008), 73 FR 24100 (May 1, 2008)
(approving revisions to the Philadelphia Stock
Exchange’s Obvious Error Rule).
9 See, e.g., CBOE Rule 24.16.
10 See Securities Exchange Act Release No. 57398
(February 28, 2008), 73 FR 12240 (March 6, 2008).
16:43 Jun 01, 2009
Trading Officials and Obvious Error
Panel
The Commission believes that the
change to the definition of ‘‘Trading
Officials’’ is appropriate and does not
negatively impact the objectiveness or
fairness of CBOE’s obvious error
provisions. Lastly, the Commission
notes that deleting ‘‘non-DPM’’ from the
definition of floor brokers is a nonsubstantive technical change and is
appropriate.
IT IS THEREFORE ORDERED,
pursuant to Section 19(b)(2) of the
Act,12 that the proposed rule change
(SR–CBOE–2009–024) is hereby
approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–12717 Filed 6–1–09; 8:45 am]
BILLING CODE 8010–01–P
The Commission believes that the
proposed catastrophic error provision
balances the need for certainty of trades
and mitigating large losses due to errors
in extreme circumstances through clear
and objective procedures.10 Moreover,
the Commission believes that the
proposed Catastrophic Error Panel, the
streamlined review process, and the
proposed fee for unsuccessful claims are
appropriate to accomplish this balance.
VerDate Nov<24>2008
consistent with other rules previously
approved by the Commission.11
Jkt 217001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59975; File No. SR–
NYSEALTR–2009–26]
Self-Regulatory Organizations; NYSE
Alternext US LLC; Notice of Filing of
Amendment No. 2 and Order Granting
Accelerated Approval to a Proposed
Rule Change, as Modified by
Amendment Nos. 1 and 2, Changing
Certain NYSE Amex Equities Rules To
Conform Them With Changes to
Corresponding Rules Filed by the New
York Stock Exchange LLC
May 26, 2009.
I. Introduction
On March 9, 2009, the NYSE
Alternext LLC (n/k/a NYSE Amex LLC)
(‘‘NYSE Amex’’ or ‘‘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 make changes to certain NYSE
Amex Equities rules, to be effective
retroactively to December 15, 2008, to
conform them with changes to
corresponding rules filed by the New
York Stock Exchange LLC (‘‘NYSE’’) on
11 See supra, note 8, and Rule 6.25(a)(5) (relating
to an erroneous quote in the underlying).
12 15 U.S.C. 78s(b)(2).
13 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
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Frm 00089
Fmt 4703
Sfmt 4703
26449
March 9, 2009,3 and approved by the
Commission on May 21, 2009.4 NYSE
had proposed the rule changes
described in the NYSE Notice to
harmonize NYSE rules with
corresponding rules that were filed by
the Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’), and
approved by the Commission or were
effective upon filing with the
Commission.5 On March 27, 2009, the
Exchange filed Amendment No. 1 to the
proposed rule change.6 The proposed
rule change was published in the
Federal Register on April 6, 2009.7 The
Commission received no comments on
the proposal. On May 11, 2009, the
Exchange filed Amendment No. 2 to the
proposed rule change.8 This order
provides notice of the proposed rule
change, as modified by Amendment No.
2, and approves the proposed rule
change, as amended, on an accelerated
basis.
II. Description of the Proposal
NYSE Euronext acquired The Amex
Membership Corporation (‘‘AMC’’)
pursuant to an Agreement and Plan of
Merger, dated January 17, 2008
(‘‘Merger’’).9 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 Amex US LLC, and continues to
operate as a national securities exchange
registered under Section 6 of the Act.10
3 See Securities Exchange Act Release No. 59655
(March 30, 2009), 74 FR 15563 (‘‘NYSE Notice’’).
4 See Securities Exchange Act Release No. 59965
(May 21, 2009) (‘‘NYSE Order’’).
5 See Securities Exchange Act Release No. 58461
(September 4, 2008), 73 FR 52710 (September 10,
2008) (SR–FINRA–2008–033); Securities Exchange
Act Release No. 58514 (September 11, 2008), 73 FR
54190 (September 18, 2008) (SR–FINRA–2008–039);
Securities Exchange Act Release No. 58643
(September 25, 2008), 73 FR 57174 (October 1,
2008) (SR–FINRA–2008–021, –022, –026, –028,
–029); Securities Exchange Act Release No. 58660
(September 26, 2008), 73 FR 57393 (October 2,
2008) (SR–FINRA–2008–027); Securities Exchange
Act Release No. 58661 (September 26, 2008), 73 FR
57395 (October 2, 2008) (SR–FINRA–2008–030);
and Securities Exchange Act Release No. 59097
(December 12, 2008), 73 FR 78412 (December 22,
2008) (SR–FINRA–2008–057).
6 Amendment No. 1 to SR–NYSEALTR–2009–26
superseded and replaced the original filing in its
entirety.
7 See Securities Exchange Act Release No. 59656
(March 30, 2009), 74 FR 15540 (‘‘Notice’’).
8 Amendment No. 2 to SR–NYSEALTR–2009–26
clarified certain points set forth in the purpose
section of Amendment No. 1 to SR–NYSEALTR–
2009–026 relating to certain NYSE Amex Equities
rules.
9 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).
10 15 U.S.C. 78f.
E:\FR\FM\02JNN1.SGM
02JNN1
26450
Federal Register / Vol. 74, No. 104 / Tuesday, June 2, 2009 / Notices
The effective date of the Merger was
October 1, 2008.
In connection with the Merger, on
December 1, 2008, the Exchange
relocated all equities trading conducted
on the Exchange legacy trading systems
and facilities located at 86 Trinity Place,
New York, New York, to trading systems
and facilities located at 11 Wall Street,
New York, New York (‘‘Equities
Relocation’’). The Exchange’s equity
trading systems and facilities at 11 Wall
Street (‘‘NYSE Amex Trading Systems’’)
are operated by the NYSE on behalf of
the Exchange.11
As part of the Equities Relocation,
NYSE Amex adopted NYSE Rules 1–
1004, subject to such changes as
necessary to apply those rules to the
Exchange as the NYSE Amex Equities
Rules to govern trading on the NYSE
Amex Trading Systems.12 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
them with rule changes to
corresponding NYSE Rules filed by the
NYSE.
As noted above, the Exchange
proposes to change certain NYSE Amex
Equities Rules to conform them with
changes to corresponding NYSE Rules
that were described in the NYSE
Notice.13 On July 30, 2007, the National
Association of Securities Dealers, Inc.
(‘‘NASD’’), and NYSE Regulation, Inc.,
the regulatory subsidiary of the NYSE,
consolidated their member firm
regulation operations into FINRA. In
connection with that consolidation,
FINRA is in the process of establishing
a consolidated FINRA rulebook
(‘‘Consolidated FINRA Rulebook’’) 14
11 See Securities Exchange Act Release No. 58705
(October 1, 2008), 73 FR 58995 (October 8, 2008)
(SR–Amex–2008–63) (approving the Equities
Relocation).
12 See Securities Exchange Act Release No. 58705
(October 1, 2008), 73 FR 58995 (October 8, 2008)
(SR–Amex–2008–63) (approving the Equities
Relocation); Securities Exchange Act Release No.
58833 (October 22, 2008), 73 FR 64642 (October 30,
2008) (SR–NYSE–2008–106) and Securities
Exchange Act Release No. 58839 (October 23, 2008),
73 FR 64645 (October 30, 2008) (SR–NYSEALTR–
2008–03) (together, approving the Bonds
Relocation); Securities Exchange Act Release No.
59022 (November 26, 2008), 73 FR 73683
(December 3, 2008) (SR–NYSEALTR–2008–10)
(adopting amendments to NYSE 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).
13 See NYSE Notice, supra note 3.
14 The current FINRA rulebook consists of three
sets of rules: (1) NASD Rules, (2) rules and rule
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16:43 Jun 01, 2009
Jkt 217001
that will harmonize NASD rules and
certain NYSE rules related to member
firm regulation.15 All of these rules will
be identified as ‘‘FINRA Rules’’ when
the rule consolidation process is
completed.
To reduce regulatory duplication, the
Exchange proposes to conform several
NYSE Amex Equities rules with changes
to corresponding rules that were filed by
the NYSE 16 and recently approved by
the Commission.17 The Notice provides
a more detailed description of the
Exchange’s proposed rule changes.18
III. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended, is consistent with
the Act. Comments may be submitted by
any of the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEALTR–2009–026 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–NYSEALTR–2009–26. This
file number should be included on the
interpretations incorporated from the NYSE
(‘‘FINRA Incorporated NYSE Rules’’) (together,
referred to as the ‘‘Transitional Rulebook’’), and (3)
consolidated FINRA Rules. The FINRA
Incorporated NYSE Rules apply only to those
members of FINRA that are also members of the
NYSE (‘‘Dual Members’’), while the consolidated
FINRA Rules apply to all FINRA members.
15 Pursuant to Rule 17d–2 under the Act, NYSE,
NYSER and NASD entered into an agreement (the
‘‘Rule 17d–2 Agreement’’) to reduce regulatory
duplication for Dual Members by allocating to
FINRA regulatory responsibility for specified NYSE
rules (the ‘‘Common Rules’’). See Securities
Exchange Act Release No. 56148 (July 26, 2007), 72
FR 42146 (August 1, 2007) (Notice of Filing and
Order Approving and Declaring Effective a Plan for
the Allocation of Regulatory Responsibilities). The
Common Rules include the FINRA Incorporated
NYSE Rules. See Securities Exchange Act Release
No. 56147 (July 26, 2007), 72 FR 42166 (August 1,
2007) (Notice of Filing and Order Granting
Accelerated Approval of Proposed Rule Change To
Incorporate Certain NYSE Rules Relating to Member
Firm Conduct) (SR–NASD–2007–054). Paragraph
2(b) of the Rule 17d-2 Agreement sets forth
procedures regarding proposed changes by either
NYSE or FINRA to the substance of any of the
Common Rules.
16 See NYSE Notice, supra note 3.
17 See NYSE Order, supra note 4.
18 See Notice, supra note 7.
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Frm 00090
Fmt 4703
Sfmt 4703
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of 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–NYSEALTR–2009–26 and
should be submitted on or before June
23, 2009.
IV. Discussion and Commission’s
Findings
The Commission has carefully
reviewed the proposed rule change, as
amended, and finds that it is consistent
with the requirements of Section 6 of
the Act 19 and the rules and regulations
thereunder applicable to a national
securities exchange.20 In particular, the
Commission finds that the proposed
rule change, as amended, is consistent
with Section 6(b)(5) of the Act,21 which
requires, among other things, that the
Exchange’s rules be designed to prevent
fraudulent and manipulative acts and
practices, to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and, in
general, to protect investors and the
public interest.
NYSE Amex is deleting certain rules
pertaining to: (1) Compensation or
gratuities to employees of others; (2)
business conduct, trading against firm
19 15
U.S.C. 78f.
approving this proposed rule change, as
amended, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
21 15 U.S.C. 78f(b)(5).
20 In
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02JNN1
Federal Register / Vol. 74, No. 104 / Tuesday, June 2, 2009 / Notices
recommendations, and private sales; (3)
excessive trading by members, excessive
trading in discretionary accounts,
successive transactions by members,
manipulative operations, reopening
contracts, and loans for accounts of nonmembers; (4) disciplinary proceedings
concerning conduct that is inconsistent
with just and equitable principles of
trade; (5) reporting of certain
information concerning short sales and
proprietary transactions; (6) reporting
and certification of member or member
organization’s supervision and
compliance efforts; (7) formation and
approval or merger organizations; (8)
reporting of short positions; (9)
notification requirements for listed
securities; and (10) disclosure and
monitoring of non-managed fee based
accounts. In place of the deleted rules
and interpretations, NYSE Amex
proposes to adopt rules that conform the
NYSE Amex Equities Rules with
changes made to the corresponding
NYSE Rules on which they are based.22
The Commission believes that the
proposed rule change, as amended, is
appropriate and would provide greater
harmonization among NYSE Rules,
NYSE Amex Equities Rules and FINRA
Rules, thereby resulting in less
burdensome and more efficient
regulatory compliance for their common
members and member organizations.
With respect to the Exchange’s proposal
to delete NYSE Amex Equities Rule 350
and to adopt NYSE Amex Equities Rule
3220, (relating to influencing or
rewarding employees of others), the
Commission notes that NYSE Amex has
stated that, immediately upon
Commission approval of new NYSE
Amex Equities Rule 3220, it will issue
an Information Memorandum to its
members and member organizations
including NYSE Amex-only members
and those members registered with
FINRA, clarifying that FINRA’s
interpretive guidance related to FINRA
Rule 3220 is considered part of NYSE
Amex Equities Rule 3220, and that such
members and member organizations are
required to regulate their conduct
according to Rule 3220 and the
interpretive guidance related to FINRA
Rule 3220.23 Accordingly, the
Commission believes that the proposed
rule change, as amended, is consistent
with the requirements of the Act.
The Commission also finds good
cause for approving the proposed rule
change as modified by Amendment No.
22 See
NYSE Order, supra note 4.
23 Telephone conversation between Clare F.
Saperstein, Managing Director, NYSE Regulation,
Inc., and Nancy J. Burke-Sanow, Assistant Director,
Division of Trading and Markets, Commission, May
21, 2009.
VerDate Nov<24>2008
16:43 Jun 01, 2009
Jkt 217001
26451
2 prior to the thirtieth day after the date
of publication of notice in the Federal
Register. Amendment No. 2 simply
clarifies certain points relating to
proposed changes to NYSE Amex
Equities Rules. Because Amendment
No. 2 does not significantly alter the
proposed rule change, which was
subject to a full notice and comment
period, the Commission finds that it is
in the public interest to approve the
proposed rule change, as modified by
Amendment No. 2, without delay to
expedite implementation. Accordingly,
the Commission finds that there is good
cause, consistent with and in
furtherance of the objectives of Sections
6 24 and 19(b)(2) 25 of the Exchange Act,
to approve Amendment No. 2 on an
accelerated basis.
Exchange.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
V. Conclusion
In its filing with the Commission, the
Exchange 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 these
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.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,26 that the
proposed rule change (SR–NYSEALTR–
2009–26) be, and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.27
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–12714 Filed 6–1–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59978; File No. SR–
NYSEArca–2009–41]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend Exchange
Rules Related to Doing a Public
Business in Options
May 27, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on May 7,
2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or
the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been
substantially prepared by the
24 15
U.S.C. 78f.
U.S.C. 78s(b)(2).
26 15 U.S.C. 78s(b)(2).
27 17 CFR 200.30–3(a)(12).
1 15 U.S.C.78s(b)(1).
2 15 U.S.C. 78a et seq.
3 17 CFR 240.19b–4.
25 15
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Exchange Rule 9.18—Doing a Public
Business in Options. The text of the
proposed rule change is available on the
Exchange’s Web site at https://
www.nyse.com, at the Exchange’s
principal office and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend Exchange Rule
9.18(f) to provide that the market on
which an options transaction is
executed need not be disclosed on a
written confirmation furnished to a
customer of an Options Trading Permit
Holder (‘‘OTP Holder’’) or Options
Trading Permit Firm (‘‘OTP Firm’’).5
4 The Exchange and Commission staff agreed to
several clarifying changes in text of Items I, II, and
III during a telephone conversation between
Andrew Stevens, Chief Counsel U.S. Equities and
Derivatives, Exchange, and Darren Vieira, Attorney
Advisor, Division of Trading and Markets,
Commission on May 21, 2008.
5 The proposed filing is being done pursuant to
an industry-wide initiative under the auspices of
the Options Self-Regulatory Council (‘‘OSRC’’),
which is a committee comprised of representatives
from each of the options exchanges functioning
pursuant to the OSRC Plan (the ‘‘Plan’’). See
Securities Exchange Act Release No. 20158
(September 8, 1983), 48 FR 41256 (September 14,
1983). The Plan is not a National Market System
(‘‘NMS’’) plan under Section 11A of the Act, but
rather is a plan to allocate regulatory
responsibilities under Rule 17d–2 under the Act. 17
CFR 240.17d–2. As a result of the introduction of
multiply listed options and the introduction of the
Plan for the Purpose of Creating and Operating an
Intermarket Options Market Linkage (‘‘Options
Linkage Plan’’), the contracts in a customer options
order could be executed on more than one options
Continued
E:\FR\FM\02JNN1.SGM
02JNN1
Agencies
[Federal Register Volume 74, Number 104 (Tuesday, June 2, 2009)]
[Notices]
[Pages 26449-26451]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12714]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59975; File No. SR-NYSEALTR-2009-26]
Self-Regulatory Organizations; NYSE Alternext US LLC; Notice of
Filing of Amendment No. 2 and Order Granting Accelerated Approval to a
Proposed Rule Change, as Modified by Amendment Nos. 1 and 2, Changing
Certain NYSE Amex Equities Rules To Conform Them With Changes to
Corresponding Rules Filed by the New York Stock Exchange LLC
May 26, 2009.
I. Introduction
On March 9, 2009, the NYSE Alternext LLC (n/k/a NYSE Amex LLC)
(``NYSE Amex'' or ``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 make changes to certain NYSE
Amex Equities rules, to be effective retroactively to December 15,
2008, to conform them with changes to corresponding rules filed by the
New York Stock Exchange LLC (``NYSE'') on March 9, 2009,\3\ and
approved by the Commission on May 21, 2009.\4\ NYSE had proposed the
rule changes described in the NYSE Notice to harmonize NYSE rules with
corresponding rules that were filed by the Financial Industry
Regulatory Authority, Inc. (``FINRA''), and approved by the Commission
or were effective upon filing with the Commission.\5\ On March 27,
2009, the Exchange filed Amendment No. 1 to the proposed rule
change.\6\ The proposed rule change was published in the Federal
Register on April 6, 2009.\7\ The Commission received no comments on
the proposal. On May 11, 2009, the Exchange filed Amendment No. 2 to
the proposed rule change.\8\ This order provides notice of the proposed
rule change, as modified by Amendment No. 2, and approves the proposed
rule change, as amended, on an accelerated basis.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 59655 (March 30,
2009), 74 FR 15563 (``NYSE Notice'').
\4\ See Securities Exchange Act Release No. 59965 (May 21, 2009)
(``NYSE Order'').
\5\ See Securities Exchange Act Release No. 58461 (September 4,
2008), 73 FR 52710 (September 10, 2008) (SR-FINRA-2008-033);
Securities Exchange Act Release No. 58514 (September 11, 2008), 73
FR 54190 (September 18, 2008) (SR-FINRA-2008-039); Securities
Exchange Act Release No. 58643 (September 25, 2008), 73 FR 57174
(October 1, 2008) (SR-FINRA-2008-021, -022, -026, -028, -029);
Securities Exchange Act Release No. 58660 (September 26, 2008), 73
FR 57393 (October 2, 2008) (SR-FINRA-2008-027); Securities Exchange
Act Release No. 58661 (September 26, 2008), 73 FR 57395 (October 2,
2008) (SR-FINRA-2008-030); and Securities Exchange Act Release No.
59097 (December 12, 2008), 73 FR 78412 (December 22, 2008) (SR-
FINRA-2008-057).
\6\ Amendment No. 1 to SR-NYSEALTR-2009-26 superseded and
replaced the original filing in its entirety.
\7\ See Securities Exchange Act Release No. 59656 (March 30,
2009), 74 FR 15540 (``Notice'').
\8\ Amendment No. 2 to SR-NYSEALTR-2009-26 clarified certain
points set forth in the purpose section of Amendment No. 1 to SR-
NYSEALTR-2009-026 relating to certain NYSE Amex Equities rules.
---------------------------------------------------------------------------
II. Description of the Proposal
NYSE Euronext acquired The Amex Membership Corporation (``AMC'')
pursuant to an Agreement and Plan of Merger, dated January 17, 2008
(``Merger'').\9\ 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 Amex US LLC,
and continues to operate as a national securities exchange registered
under Section 6 of the Act.\10\
[[Page 26450]]
The effective date of the Merger was October 1, 2008.
---------------------------------------------------------------------------
\9\ 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).
\10\ 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 (``Equities Relocation''). The Exchange's equity trading
systems and facilities at 11 Wall Street (``NYSE Amex Trading
Systems'') are operated by the NYSE on behalf of the Exchange.\11\
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\11\ 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 those rules to the
Exchange as the NYSE Amex Equities Rules to govern trading on the NYSE
Amex Trading Systems.\12\ 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 them with rule changes to
corresponding NYSE Rules filed by the NYSE.
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\12\ See Securities Exchange Act Release No. 58705 (October 1,
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63) (approving
the Equities Relocation); Securities Exchange Act Release No. 58833
(October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-
106) and Securities Exchange Act Release No. 58839 (October 23,
2008), 73 FR 64645 (October 30, 2008) (SR-NYSEALTR-2008-03)
(together, approving the Bonds Relocation); Securities Exchange Act
Release No. 59022 (November 26, 2008), 73 FR 73683 (December 3,
2008) (SR-NYSEALTR-2008-10) (adopting amendments to NYSE 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).
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As noted above, the Exchange proposes to change certain NYSE Amex
Equities Rules to conform them with changes to corresponding NYSE Rules
that were described in the NYSE Notice.\13\ On July 30, 2007, the
National Association of Securities Dealers, Inc. (``NASD''), and NYSE
Regulation, Inc., the regulatory subsidiary of the NYSE, consolidated
their member firm regulation operations into FINRA. In connection with
that consolidation, FINRA is in the process of establishing a
consolidated FINRA rulebook (``Consolidated FINRA Rulebook'') \14\ that
will harmonize NASD rules and certain NYSE rules related to member firm
regulation.\15\ All of these rules will be identified as ``FINRA
Rules'' when the rule consolidation process is completed.
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\13\ See NYSE Notice, supra note 3.
\14\ The current FINRA rulebook consists of three sets of rules:
(1) NASD Rules, (2) rules and rule interpretations incorporated from
the NYSE (``FINRA Incorporated NYSE Rules'') (together, referred to
as the ``Transitional Rulebook''), and (3) consolidated FINRA Rules.
The FINRA Incorporated NYSE Rules apply only to those members of
FINRA that are also members of the NYSE (``Dual Members''), while
the consolidated FINRA Rules apply to all FINRA members.
\15\ Pursuant to Rule 17d-2 under the Act, NYSE, NYSER and NASD
entered into an agreement (the ``Rule 17d-2 Agreement'') to reduce
regulatory duplication for Dual Members by allocating to FINRA
regulatory responsibility for specified NYSE rules (the ``Common
Rules''). See Securities Exchange Act Release No. 56148 (July 26,
2007), 72 FR 42146 (August 1, 2007) (Notice of Filing and Order
Approving and Declaring Effective a Plan for the Allocation of
Regulatory Responsibilities). The Common Rules include the FINRA
Incorporated NYSE Rules. See Securities Exchange Act Release No.
56147 (July 26, 2007), 72 FR 42166 (August 1, 2007) (Notice of
Filing and Order Granting Accelerated Approval of Proposed Rule
Change To Incorporate Certain NYSE Rules Relating to Member Firm
Conduct) (SR-NASD-2007-054). Paragraph 2(b) of the Rule 17d-2
Agreement sets forth procedures regarding proposed changes by either
NYSE or FINRA to the substance of any of the Common Rules.
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To reduce regulatory duplication, the Exchange proposes to conform
several NYSE Amex Equities rules with changes to corresponding rules
that were filed by the NYSE \16\ and recently approved by the
Commission.\17\ The Notice provides a more detailed description of the
Exchange's proposed rule changes.\18\
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\16\ See NYSE Notice, supra note 3.
\17\ See NYSE Order, supra note 4.
\18\ See Notice, supra note 7.
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III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended, 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-NYSEALTR-2009-026 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-NYSEALTR-2009-26. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room, 100 F Street,
NE., Washington, DC 20549, on official business days between the hours
of 10 a.m. and 3 p.m. Copies of 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-NYSEALTR-2009-26 and should
be submitted on or before June 23, 2009.
IV. Discussion and Commission's Findings
The Commission has carefully reviewed the proposed rule change, as
amended, and finds that it is consistent with the requirements of
Section 6 of the Act \19\ and the rules and regulations thereunder
applicable to a national securities exchange.\20\ In particular, the
Commission finds that the proposed rule change, as amended, is
consistent with Section 6(b)(5) of the Act,\21\ which requires, among
other things, that the Exchange's rules be designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
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\19\ 15 U.S.C. 78f.
\20\ In approving this proposed rule change, as amended, the
Commission has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
\21\ 15 U.S.C. 78f(b)(5).
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NYSE Amex is deleting certain rules pertaining to: (1) Compensation
or gratuities to employees of others; (2) business conduct, trading
against firm
[[Page 26451]]
recommendations, and private sales; (3) excessive trading by members,
excessive trading in discretionary accounts, successive transactions by
members, manipulative operations, reopening contracts, and loans for
accounts of non-members; (4) disciplinary proceedings concerning
conduct that is inconsistent with just and equitable principles of
trade; (5) reporting of certain information concerning short sales and
proprietary transactions; (6) reporting and certification of member or
member organization's supervision and compliance efforts; (7) formation
and approval or merger organizations; (8) reporting of short positions;
(9) notification requirements for listed securities; and (10)
disclosure and monitoring of non-managed fee based accounts. In place
of the deleted rules and interpretations, NYSE Amex proposes to adopt
rules that conform the NYSE Amex Equities Rules with changes made to
the corresponding NYSE Rules on which they are based.\22\
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\22\ See NYSE Order, supra note 4.
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The Commission believes that the proposed rule change, as amended,
is appropriate and would provide greater harmonization among NYSE
Rules, NYSE Amex Equities Rules and FINRA Rules, thereby resulting in
less burdensome and more efficient regulatory compliance for their
common members and member organizations. With respect to the Exchange's
proposal to delete NYSE Amex Equities Rule 350 and to adopt NYSE Amex
Equities Rule 3220, (relating to influencing or rewarding employees of
others), the Commission notes that NYSE Amex has stated that,
immediately upon Commission approval of new NYSE Amex Equities Rule
3220, it will issue an Information Memorandum to its members and member
organizations including NYSE Amex-only members and those members
registered with FINRA, clarifying that FINRA's interpretive guidance
related to FINRA Rule 3220 is considered part of NYSE Amex Equities
Rule 3220, and that such members and member organizations are required
to regulate their conduct according to Rule 3220 and the interpretive
guidance related to FINRA Rule 3220.\23\ Accordingly, the Commission
believes that the proposed rule change, as amended, is consistent with
the requirements of the Act.
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\23\ Telephone conversation between Clare F. Saperstein,
Managing Director, NYSE Regulation, Inc., and Nancy J. Burke-Sanow,
Assistant Director, Division of Trading and Markets, Commission, May
21, 2009.
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The Commission also finds good cause for approving the proposed
rule change as modified by Amendment No. 2 prior to the thirtieth day
after the date of publication of notice in the Federal Register.
Amendment No. 2 simply clarifies certain points relating to proposed
changes to NYSE Amex Equities Rules. Because Amendment No. 2 does not
significantly alter the proposed rule change, which was subject to a
full notice and comment period, the Commission finds that it is in the
public interest to approve the proposed rule change, as modified by
Amendment No. 2, without delay to expedite implementation. Accordingly,
the Commission finds that there is good cause, consistent with and in
furtherance of the objectives of Sections 6 \24\ and 19(b)(2) \25\ of
the Exchange Act, to approve Amendment No. 2 on an accelerated basis.
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\24\ 15 U.S.C. 78f.
\25\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\26\ that the proposed rule change (SR-NYSEALTR-2009-26) be, and it
hereby is, approved on an accelerated basis.
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\26\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-12714 Filed 6-1-09; 8:45 am]
BILLING CODE 8010-01-P