Self-Regulatory Organizations; New York Stock Exchange LLC and NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Changes Relating to Comparison of Executed Transactions, 28086-28088 [E9-13807]
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28086
Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices
(C) Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments relating to the
proposed rule change have not yet been
solicited or received. DTC will notify
the Commission of any written
comments received by DTC.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become effective upon filing
pursuant to Section 19(b)(3)(A)(iii) of
the Act 10 and Rule 19b–4(f)(4) 11
thereunder because the proposed rule
change effects a change in an existing
service of a registered clearing agency
that: (i) Does not adversely affect the
safeguarding of securities or funds in
the custody or control of the clearing
agency or for which it is responsible and
(ii) does not significantly affect the
respective rights or obligations of the
clearing agency or persons using the
service. At any time within sixty 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.
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
Number SR–DTC–2009–09 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–DTC–2009–09. 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 filings also will be
available for inspection and copying at
the principal office of DTC and on
DTC’s Web site at https://www.dtcc.com/
legal/rule_filings/dtc/2009-09.pdf. 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–DTC–2009–09 and should
be submitted on or before July 6, 2009.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–13808 Filed 6–11–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59997; File Nos. SR–NYSE–
2009–50 and SR–NYSEAmex–2009–20]
Self-Regulatory Organizations; New
York Stock Exchange LLC and NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Changes Relating to Comparison
of Executed Transactions
May 28, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on May 19,
2009, New York Stock Exchange LLC
(‘‘NYSE’’) and NYSE Amex LLC
(‘‘NYSE-Amex’’) filed with the
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
changes as described in Items I and II
below, which Items have been prepared
primarily by NYSE and NYSE-Amex
(collectively, ‘‘Exchanges’’). The
Exchanges filed the proposed rule
changes pursuant to Section
19(b)(3)(A)(iii) of the Act 4 and Rule
19b–4(f)(6) thereunder 5 so that the
proposals were effective upon filing
with the Commission. The Commission
is publishing this notice to solicit
comments on the proposed rule changes
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchanges propose to amend
NYSE Rule 134 (Differences and
Omissions-Cleared Transactions) and
NYSE-Amex Rule 134 (NYSE Amex
Equities. Differences and OmissionsCleared Transactions) to provide for
certain technical procedures that the
Exchanges use in the comparison stage
of trade settlement.
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
Exchanges included statements
concerning the purpose of, and basis for,
the proposed rule changes and
discussed any comments they received
on the proposed rule changes. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchanges have 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 the
Statutory Basis for, the Proposed Rule
Change
NYSE operates the On-Line
Comparison System (‘‘OCS’’), which
provides the first step for the settlement
of securities transactions on the
Exchanges. OCS conducts comparison
processing, which includes matching
initial trade submissions, correction
processing, omnibus processing, and
questioned trade (‘‘QT’’) resolution.
OCS interacts with the Exchanges’
members and member organizations in
their roles as clearing firms, brokers,
and Designated Market Making Units
(‘‘DMM Units’’) and is linked internally
to the Exchanges’ trading systems and
1 15
10 15
11 17
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(4).
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5 17
E:\FR\FM\12JNN1.SGM
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
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Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices
externally to the National Securities
Clearing Corporation.6
For all Exchange-based transactions,
NYSE Rule 132.30 (Comparison and
Settlement of Transactions Through A
Fully-Interfaced or Qualified Clearing
Agency) and NYSE-Amex Equities Rule
132.30 (Comparison and Settlement of
Transactions Through A FullyInterfaced or Qualified Clearing Agency)
require members and member
organizations to submit data elements to
OCS.7 This data is then used to compare
the terms of the two sides (i.e., buy and
sell) of a trade. When the two sides
match, the trade is successfully
compared and will move on to the
subsequent stages of settlement
processing. For automated trades, this
data is recorded electronically, which
reduces the error rate and produces
‘‘clean’’ or ‘‘locked-in’’ trades. For
manual trades, data is submitted by both
sides of the trade through their clearing
firms.
To facilitate the comparison process,
the Exchanges utilize omnibus account
designations to record trade data.8 Using
omnibus account designations allows
for universal contras for one trade side,
thereby reducing the number of
different data elements that have to be
independently recorded into a broker’s
hand-held device or written on a Floor
report for a trade, which also reduces
the likelihood of error.
Despite the increased automation of
the trading process and the use of
universal designations, there are still a
few trades that do not successfully
compare. That is, all the trade data
elements from the buy and sell sides do
not match. This can occur when the
trade is done manually and there is an
error made in submitting the trade
information from one or both sides. It
can also occur on electronic trades if
there are software problems or systemic
problems that cause incorrect
information to be filed thus causing
inaccurate information to be
transmitted. When trades do not
compare, a QT is created and then goes
through the ‘‘QT process.’’ This process
mandates that clearing member
organizations must resolve any trades
that have not been successfully
6 The National Securities Clearing Corporation
(‘‘NSCC’’) is a clearing agency registered with the
Commission under Section 17A of the Securities
Exchange Act of 1934. NSCC provides centralized
clearance and settlement services for equity security
trades for U.S. broker-dealers.
7 See also NYSE Rule 130(c) and NYSE-Amex
Equities Rule 130(c) (Overnight Comparison of
Exchange Transactions).
8 An ‘‘omnibus account’’ is an account in which
the transactions of multiple individual members are
combined.
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17:53 Jun 11, 2009
Jkt 217001
compared by the first business day after
the trade date (‘‘T+1’’).9
The Exchanges note that the
incidence of QTs is very low both in
terms of absolute numbers and as a
percentage of daily trades. For example,
for the period January 2 through January
8, 2009, there was an average of just 337
QTs per day at the NYSE on a T+1 basis,
spread among the approximately 120
clearing firms and six DMM units.
These are then researched and almost
all of these are reconciled by the second
evening after the trade date (‘‘T+2’’). As
a result, on average there are typically
less than three unresolved trades per
month. There is an average of over 4
million trades each day on NYSE.
One of the functions of OCS is to
reconcile the balances in the omnibus
accounts at the end of each trading day.
The accounting procedure used for trade
resolution requires that an omnibus
account must net to zero at the end of
any trading session. That is, there
cannot be an unassigned security or
money position in an omnibus account
since that would, in effect, assign the
open balance to the Exchange where the
transaction occurred. The Exchanges,
therefore, propose to assign on T+2 any
open balance in any of the omnibus
accounts it uses to compare trades to
either a DMM Unit or the member
organization that has been identified as
the clearing firm for one side of the
unresolved trade. A clearing firm will be
assigned as the default contra side in a
trade that resulted from an execution
involving e-Quotes, which are trades
involving Floor broker agency interest
files.10 The DMM Unit will be assigned
when there is an open imbalance in an
omnibus account that resulted from the
execution of orders that did not involve
an e-Quote, regardless of whether the
DMM was involved in the transaction.
Specifically, the Exchanges propose to
add language to their respective Rule
134 to enable them to assign either a
DMM Unit or an e-clearing member
organization as the contra party to any
uncompared transaction or unresolved
omnibus account imbalance remaining
in OCS at the close of business on the
second business day after the trade date.
Since the number of QTs that remain
unresolved by the end of the second day
after the initial trade date is extremely
low, the Exchanges expect that there
will be very few assignments of a
default contra side involving clearing
firms or DMM Units that will be made
9 NYSE Rule 134(a) and NYSE-Amex Equities
Rule 134(a). These rules also set forth the
procedures and timeframes to resolve QTs.
10 NYSE Rule 70(a)(i) and NYSE-Amex Equities
Rule 70(a)(i).
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28087
under the proposed revisions of their
respective Rule 134.
The Exchanges state that the proposed
rule changes are consistent with their
obligations under Section 6(b)(5) of the
Act,11 which requires the rules of a
registered national securities exchange
be designed to promote just and
equitable principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system, and in
general to protect investors and the
public interest. The Exchanges believe
that the proposed rule changes comply
with these requirements because the
changes enhance the comparison
process at the Exchanges, thereby
supporting the timely settlement of
securities transactions.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchanges do 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
The Exchanges did not solicit or
receive written comments with respect
to the proposed rule change. The
Exchanges will notify the Commission
of any comments they receive.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule changes were
effective upon filing with the
Commission pursuant to Section
19(b)(3)(A)(iii) of the Act 12 and Rule
19b–4(f)(6) thereunder 13 because each
of the proposed rule changes 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.
A proposed rule change filed under
Rule 19b–4(f)(6) 14 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),15 the
Commission may designate a shorter
11 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A)(iii).
13 17 CFR 240.19b–4(f)(6).
14 Id.
15 17 CFR 240.19b–4(f)(6)(iii).
12 15
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28088
Federal Register / Vol. 74, No. 112 / Friday, June 12, 2009 / Notices
time if such action is consistent with the
protection of investors and the public
interest. The Exchanges have asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing.
The Commission believes waiving the
30-day operative delay is consistent
with the protection of investors and the
public interest. Acceleration of the
operative date will enable the
Exchanges to clarify and strengthen
their process to resolve uncompared
transactions or unresolved account
imbalances without undue delay while
still affording interested parties the
opportunity to submit comments or
concerns to the Commission regarding
these proposals. The new processes
should instill greater confidence among
the Exchanges’ members and investors
that such situations will be handled in
an orderly and expeditious manner. For
these reasons, the Commission
designates the proposal to be effective
and operative upon filing with the
Commission.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,
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–NYSE-2009–50 or NYSEAmex2009–20 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.
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). The Exchange provided the
Commission written notice of its intent to file the
proposed rule change at least five business days
prior to filing.
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17:53 Jun 11, 2009
Jkt 217001
All submissions should refer to File No.
SR–NYSE–2009–50 or NYSEAmex–
2009–20. At least one of these file
numbers 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 20549–1090 on official business
days between the hours of 10 a.m. and
3 p.m. Copies of the filing will also be
available for inspection and copying at
the Exchanges principal offices and on
NYSE’s Internet Web site at https://
www.nyse.com. 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 No. SR–NYSE–
2009–50 or NYSEAmex–2009–20 and
should be submitted on or before July 6,
2009.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–13807 Filed 6–11–09; 8:45 am]
BILLING CODE 8010–01–P
DEPARTMENT OF STATE
[Public Notice 6660]
Culturally Significant Objects Imported
for Exhibition Determinations: ‘‘Tim
Burton’’
SUMMARY: Notice is hereby given of the
following determinations: Pursuant to
the authority vested in me by the Act of
October 19, 1965 (79 Stat. 985; 22 U.S.C.
2459), Executive Order 12047 of March
27, 1978, the Foreign Affairs Reform and
Restructuring Act of 1998 (112 Stat.
2681, et seq.; 22 U.S.C. 6501 note, et
17 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00094
Fmt 4703
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seq.), Delegation of Authority No. 234 of
October 1, 1999, Delegation of Authority
No. 236 of October 19, 1999, as
amended, and Delegation of Authority
No. 257 of April 15, 2003 [68 FR 19875],
I hereby determine that the objects to be
included in the exhibition ‘‘Tim
Burton,’’ imported from abroad for
temporary exhibition within the United
States, are of cultural significance. The
objects are imported pursuant to loan
agreements with the foreign owners or
custodians. I also determine that the
exhibition or display of the exhibit
objects at The Museum of Modern Art,
New York, NY, from on or about
November 22, 2009, until on or about
April 26, 2010, and at possible
additional exhibitions or venues yet to
be determined, is in the national
interest. Public Notice of these
Determinations is ordered to be
published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: For
further information, including a list of
the exhibit objects, contact Julie
Simpson, Attorney-Adviser, Office of
the Legal Adviser, U.S. Department of
State (telephone: (202–453–8050). The
address is U.S. Department of State, SA–
44, 301 4th Street, SW., Room 700,
Washington, DC 20547–0001.
Dated: June 5, 2009.
C. Miller Crouch,
Acting Assistant Secretary for Educational
and Cultural Affairs,
Department of State.
[FR Doc. E9–13878 Filed 6–11–09; 8:45 am]
BILLING CODE 4710–05–P
DEPARTMENT OF STATE
[Public Notice 6659]
State-68, Office of the Coordinator for
Reconstruction and Stabilization
Records
SUMMARY: Notice is hereby given that
the Department of State proposes to
alter an existing system of records,
Office of the Coordinator for
Reconstruction and Stabilization
Records, State-68, pursuant to the
provisions of the Privacy Act of 1974, as
amended (5 U.S.C. 552a) and Office of
Management and Budget Circular No.
A–130, Appendix I. The Department’s
report was filed with the Office of
Management and Budget on June 5,
2009.
It is proposed that the current system
will retain the name ‘‘Office of the
Coordinator for Reconstruction and
Stabilization Records.’’ It is also
proposed that due to the expanded
scope of current system, the altered
system description will include
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]]>Agencies
[Federal Register Volume 74, Number 112 (Friday, June 12, 2009)]
[Notices]
[Pages 28086-28088]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-13807]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59997; File Nos. SR-NYSE-2009-50 and SR-NYSEAmex-2009-
20]
Self-Regulatory Organizations; New York Stock Exchange LLC and
NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed
Rule Changes Relating to Comparison of Executed Transactions
May 28, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on May 19, 2009, New York Stock Exchange LLC (``NYSE'') and NYSE
Amex LLC (``NYSE-Amex'') filed with the Securities and Exchange
Commission (``Commission'') the proposed rule changes as described in
Items I and II below, which Items have been prepared primarily by NYSE
and NYSE-Amex (collectively, ``Exchanges''). The Exchanges filed the
proposed rule changes pursuant to Section 19(b)(3)(A)(iii) of the Act
\4\ and Rule 19b-4(f)(6) thereunder \5\ so that the proposals were
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule changes from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchanges propose to amend NYSE Rule 134 (Differences and
Omissions-Cleared Transactions) and NYSE-Amex Rule 134 (NYSE Amex
Equities. Differences and Omissions-Cleared Transactions) to provide
for certain technical procedures that the Exchanges use in the
comparison stage of trade settlement.
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 Exchanges included
statements concerning the purpose of, and basis for, the proposed rule
changes and discussed any comments they received on the proposed rule
changes. The text of those statements may be examined at the places
specified in Item IV below. The Exchanges have 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 the
Statutory Basis for, the Proposed Rule Change
NYSE operates the On-Line Comparison System (``OCS''), which
provides the first step for the settlement of securities transactions
on the Exchanges. OCS conducts comparison processing, which includes
matching initial trade submissions, correction processing, omnibus
processing, and questioned trade (``QT'') resolution. OCS interacts
with the Exchanges' members and member organizations in their roles as
clearing firms, brokers, and Designated Market Making Units (``DMM
Units'') and is linked internally to the Exchanges' trading systems and
[[Page 28087]]
externally to the National Securities Clearing Corporation.\6\
---------------------------------------------------------------------------
\6\ The National Securities Clearing Corporation (``NSCC'') is a
clearing agency registered with the Commission under Section 17A of
the Securities Exchange Act of 1934. NSCC provides centralized
clearance and settlement services for equity security trades for
U.S. broker-dealers.
---------------------------------------------------------------------------
For all Exchange-based transactions, NYSE Rule 132.30 (Comparison
and Settlement of Transactions Through A Fully-Interfaced or Qualified
Clearing Agency) and NYSE-Amex Equities Rule 132.30 (Comparison and
Settlement of Transactions Through A Fully-Interfaced or Qualified
Clearing Agency) require members and member organizations to submit
data elements to OCS.\7\ This data is then used to compare the terms of
the two sides (i.e., buy and sell) of a trade. When the two sides
match, the trade is successfully compared and will move on to the
subsequent stages of settlement processing. For automated trades, this
data is recorded electronically, which reduces the error rate and
produces ``clean'' or ``locked-in'' trades. For manual trades, data is
submitted by both sides of the trade through their clearing firms.
---------------------------------------------------------------------------
\7\ See also NYSE Rule 130(c) and NYSE-Amex Equities Rule 130(c)
(Overnight Comparison of Exchange Transactions).
---------------------------------------------------------------------------
To facilitate the comparison process, the Exchanges utilize omnibus
account designations to record trade data.\8\ Using omnibus account
designations allows for universal contras for one trade side, thereby
reducing the number of different data elements that have to be
independently recorded into a broker's hand-held device or written on a
Floor report for a trade, which also reduces the likelihood of error.
---------------------------------------------------------------------------
\8\ An ``omnibus account'' is an account in which the
transactions of multiple individual members are combined.
---------------------------------------------------------------------------
Despite the increased automation of the trading process and the use
of universal designations, there are still a few trades that do not
successfully compare. That is, all the trade data elements from the buy
and sell sides do not match. This can occur when the trade is done
manually and there is an error made in submitting the trade information
from one or both sides. It can also occur on electronic trades if there
are software problems or systemic problems that cause incorrect
information to be filed thus causing inaccurate information to be
transmitted. When trades do not compare, a QT is created and then goes
through the ``QT process.'' This process mandates that clearing member
organizations must resolve any trades that have not been successfully
compared by the first business day after the trade date (``T+1'').\9\
---------------------------------------------------------------------------
\9\ NYSE Rule 134(a) and NYSE-Amex Equities Rule 134(a). These
rules also set forth the procedures and timeframes to resolve QTs.
---------------------------------------------------------------------------
The Exchanges note that the incidence of QTs is very low both in
terms of absolute numbers and as a percentage of daily trades. For
example, for the period January 2 through January 8, 2009, there was an
average of just 337 QTs per day at the NYSE on a T+1 basis, spread
among the approximately 120 clearing firms and six DMM units. These are
then researched and almost all of these are reconciled by the second
evening after the trade date (``T+2''). As a result, on average there
are typically less than three unresolved trades per month. There is an
average of over 4 million trades each day on NYSE.
One of the functions of OCS is to reconcile the balances in the
omnibus accounts at the end of each trading day. The accounting
procedure used for trade resolution requires that an omnibus account
must net to zero at the end of any trading session. That is, there
cannot be an unassigned security or money position in an omnibus
account since that would, in effect, assign the open balance to the
Exchange where the transaction occurred. The Exchanges, therefore,
propose to assign on T+2 any open balance in any of the omnibus
accounts it uses to compare trades to either a DMM Unit or the member
organization that has been identified as the clearing firm for one side
of the unresolved trade. A clearing firm will be assigned as the
default contra side in a trade that resulted from an execution
involving e-Quotes, which are trades involving Floor broker agency
interest files.\10\ The DMM Unit will be assigned when there is an open
imbalance in an omnibus account that resulted from the execution of
orders that did not involve an e-Quote, regardless of whether the DMM
was involved in the transaction.
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\10\ NYSE Rule 70(a)(i) and NYSE-Amex Equities Rule 70(a)(i).
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Specifically, the Exchanges propose to add language to their
respective Rule 134 to enable them to assign either a DMM Unit or an e-
clearing member organization as the contra party to any uncompared
transaction or unresolved omnibus account imbalance remaining in OCS at
the close of business on the second business day after the trade date.
Since the number of QTs that remain unresolved by the end of the
second day after the initial trade date is extremely low, the Exchanges
expect that there will be very few assignments of a default contra side
involving clearing firms or DMM Units that will be made under the
proposed revisions of their respective Rule 134.
The Exchanges state that the proposed rule changes are consistent
with their obligations under Section 6(b)(5) of the Act,\11\ which
requires the rules of a registered national securities exchange be
designed to promote just and equitable principles of trade, to remove
impediments to and perfect the mechanism of a free and open market and
a national market system, and in general to protect investors and the
public interest. The Exchanges believe that the proposed rule changes
comply with these requirements because the changes enhance the
comparison process at the Exchanges, thereby supporting the timely
settlement of securities transactions.
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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 Exchanges do 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
The Exchanges did not solicit or receive written comments with
respect to the proposed rule change. The Exchanges will notify the
Commission of any comments they receive.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule changes were effective upon filing with the
Commission pursuant to Section 19(b)(3)(A)(iii) of the Act \12\ and
Rule 19b-4(f)(6) thereunder \13\ because each of the proposed rule
changes 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.
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\12\ 15 U.S.C. 78s(b)(3)(A)(iii).
\13\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\15\ the Commission
may designate a shorter
[[Page 28088]]
time if such action is consistent with the protection of investors and
the public interest. The Exchanges have asked the Commission to waive
the 30-day operative delay so that the proposal may become operative
immediately upon filing.
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\14\ Id.
\15\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
Acceleration of the operative date will enable the Exchanges to clarify
and strengthen their process to resolve uncompared transactions or
unresolved account imbalances without undue delay while still affording
interested parties the opportunity to submit comments or concerns to
the Commission regarding these proposals. The new processes should
instill greater confidence among the Exchanges' members and investors
that such situations will be handled in an orderly and expeditious
manner. For these reasons, the Commission designates the proposal to be
effective and operative upon filing with the Commission.\16\
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\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). The Exchange provided the Commission written notice of its
intent to file the proposed rule change at least five business days
prior to filing.
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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.
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-NYSE-2009-50 or NYSEAmex-2009-20 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 No. SR-NYSE-2009-50 or NYSEAmex-
2009-20. At least one of these file numbers 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 20549-1090 on
official business days between the hours of 10 a.m. and 3 p.m. Copies
of the filing will also be available for inspection and copying at the
Exchanges principal offices and on NYSE's Internet Web site at https://www.nyse.com. 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 No. SR-NYSE-
2009-50 or NYSEAmex-2009-20 and should be submitted on or before July
6, 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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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13807 Filed 6-11-09; 8:45 am]
BILLING CODE 8010-01-P
