Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Extending the Operative Date of NYSE Rule 92(c)(3) From July 31, 2009 to December 31, 2009, 39126-39128 [E9-18666]

Download as PDF 39126 Federal Register / Vol. 74, No. 149 / Wednesday, August 5, 2009 / Notices amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing will also be available for inspection and copying at the principal office of the self-regulatory organization. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSE– 2009–72 and should be submitted on or before August 26, 2009. Section 19(b)(3)(A) of the Act 4 and Rule 19b-4(f)(6) thereunder,5 which renders it effective upon filing with the Commission. 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 extend the operative date of NYSE Rule 92(c)(3) from July 31, 2009 to December 31, 2009. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and https://www.nyse.com. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change BILLING CODE 8010–01–P 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 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. SECURITIES AND EXCHANGE COMMISSION A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change [Release No. 34–60396; File No. SR–NYSE– 2009–73] 1. Purpose For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–18665 Filed 8–4–09; 8:45 am] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Extending the Operative Date of NYSE Rule 92(c)(3) From July 31, 2009 to December 31, 2009 srobinson on DSKHWCL6B1PROD with NOTICES July 30, 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 July 24, 2009, New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Exchange filed the proposed rule change pursuant to The Exchange is proposing to extend the delayed operative date of NYSE Rule 92(c)(3) from July 31, 2009 to December 31, 2009. The Exchange believes that this extension will provide the time necessary for the Exchange and the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) to harmonize their respective rules concerning customer order protection to achieve a standardized industry practice. Background On July 5, 2007, the Commission approved amendments to NYSE Rule 92 to permit riskless principal trading at the Exchange.6 These amendments were filed in part to begin the harmonization process between Rule 92 and FINRA’s Manning Rule.7 In connection with those amendments, the Exchange 4 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 6 See Securities Exchange Act Release No. 34– 56017 (July 5, 2007), 72 FR 38110 (July 12, 2007), SR–NYSE–2007–21. 7 See NASD Rule 2111 and IM–2110–2. 5 17 10 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. 1 15 VerDate Nov<24>2008 18:54 Aug 04, 2009 Jkt 217001 PO 00000 Frm 00087 Fmt 4703 Sfmt 4703 implemented for an operative date of January 16, 2008, NYSE Rule 92(c)(3), which permits Exchange member organizations to submit riskless principal orders to the Exchange, but requires them to submit to a designated Exchange database a report of the execution of the facilitated order. That rule also requires members to submit to that same database sufficient information to provide an electronic link of the execution of the facilitated order to all of the underlying orders. For purposes of NYSE Rule 92(c)(3), the Exchange informed member organizations that when executing riskless principal transactions, firms must submit order execution reports to the Exchange’s Front End Systemic Capture (‘‘FESC’’) database linking the execution of the riskless principal order on the Exchange to the specific underlying orders. The information provided must be sufficient for both member firms and the Exchange to reconstruct in a time-sequenced manner all orders, including allocations to the underlying orders, with respect to which a member organization is claiming the riskless principal exception. Because the rule change required both the Exchange and member organizations to make certain changes to their trading and order management systems, the NYSE filed for immediate effectiveness to delay to May 14, 2008 the operative date of the NYSE Rule 92(c)(3) requirements, including submitting endof-day allocation reports for riskless principal transactions and using the riskless principal account type indicator.8 The Exchange filed for additional extensions of the operative date of Rule 92(c)(3), the most recent of which was an extension to July 31, 2009.9 Request for Extension 10 FINRA and the Exchange have been working diligently on fully harmonizing their respective rules, including reviewing the possibilities for a uniform reporting standard for riskless principal transactions. However, because of the complexity of the existing customer order protection rules, including the need for input from industry participants as well as Commission 8 See Securities Exchange Act Release No. 56968 (Dec. 14, 2007), 72 FR 72432 (Dec. 20, 2007), SR– NYSE–2007–114. 9 See Securities Exchange Act Release Nos. 57682 (Apr. 17, 2008), 73 FR 22193 (Apr. 24, 2008) (SR– NYSE–2008–29) and 59621 (Mar. 23, 2009), 74 FR 14179 (Mar. 30, 2009) (SR–NYSE–2009–30). 10 NYSE Amex LLC has filed a companion rule filing to conform its Equities Rules to the changes proposed in this filing. See SR–NYSEAmex–2009– 48, formally submitted July 24, 2009. E:\FR\FM\05AUN1.SGM 05AUN1 srobinson on DSKHWCL6B1PROD with NOTICES Federal Register / Vol. 74, No. 149 / Wednesday, August 5, 2009 / Notices approval, the Exchange and FINRA will not have harmonized their respective customer order protection rules by the current July 31, 2009 date for the implementation of the FESC riskless principal reporting. The Exchange notes that it has agreed with FINRA to pursue efforts to harmonize customer order protection rules. As authorized by their respective Boards, FINRA and NYSE Regulation, Inc. (‘‘NYSE Regulation’’) have each published a Regulatory Notice/ Information Memo that solicits comments from their respective member participants on the proposed harmonized approach to customer order protection.11 Because industry participants need to code their trading systems to comply with customer order protection rules, the Exchange believes that industry input is vital to ensuring that the approach to customer order protection both meets regulatory needs of protecting customer orders, but is also feasible technologically. Both FINRA and NYSE Regulation have received comments from the public on the Regulatory Notice and Information Memo, including comments from industry forums such as SIFMA and FIF. The comments have generally supported efforts to harmonize the FINRA and NYSE rules. Among issues raised in the comment letters, however, is the concern that FINRA and NYSE have a harmonized approach for reporting riskless principal transactions. In addition, commenters note the need for an implementation period to develop any technology that would be needed to comply with the proposed reporting standard. FINRA and NYSE Regulation continue to work together to develop such a harmonized approach to reporting riskless principal trades. The Exchange continues to believe that pending full harmonization of the respective customer order protection rules, it would be premature to require firms to meet the current Rule 92(c)(3) FESC reporting requirements.12 Indeed, having differing reporting standards for riskless principal orders would be inconsistent with the overall goal of the harmonization process. Accordingly, to provide the Exchange and FINRA the time necessary to develop a harmonized rule set that would apply across their respective marketplaces, including a harmonized approach to riskless principal trade reporting, the Exchange is proposing to 11 See NYSE Regulation Information Memo 09–13 (March 12, 2009); FINRA Regulatory Notice 09–15 (March 12, 2009). 12 The Exchange notes that it would also need to make technological changes to implement the proposed FESC reporting solution for Rule 92(c)(3). VerDate Nov<24>2008 18:54 Aug 04, 2009 Jkt 217001 delay the operative date for NYSE Rule 92(c)(3) from July 31, 2009 to December 31, 2009. Pending the harmonization of the two rules, the Exchange will continue to require that, as of the date each member organization implements riskless principal routing, the member organization have in place systems and controls that allow them to easily match and tie riskless principal execution on the Exchange to the underlying orders and that they be able to provide this information to the Exchange upon request. To make clear that this requirement continues, the Exchange proposes to amend supplementary material .95 to Rule 92 to specifically provide that the Rule 92(c)(3) reporting requirements are suspended until December 31, 2009 and that member organizations are required to have in place such systems and controls relating to their riskless principal executions on the Exchange. Moreover, the Exchange will coordinate with FINRA to examine for compliance with the rule requirements for those firms that engage in riskless principal trading under Rule 92(c). 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’),13 in general, and furthers the objectives of Section 6(b)(5) of the Act,14 in particular, in that it is 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. The Exchange believes the proposed extension provides the Exchange and FINRA the time necessary to develop a harmonized rule concerning customer order protection that will enable member organizations to participate in the national market system without unnecessary impediments. 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. 13 15 14 15 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00088 Fmt 4703 Sfmt 4703 39127 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the Act 15 and Rule 19b–4(f)(6) thereunder.16 The Exchange has requested the Commission to waive the 30-day operative delay so that the Exchange can extend the operative date of NYSE Rule 92(c)(3) without interruption. The Commission hereby grants the Exchange’s request and believes such waiver is consistent with the protection of investors and the public interest.17 Accordingly, the Commission designates the proposed rule change operative upon filing with the Commission. 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. 15 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the self-regulatory organization to submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 17 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. See 15 U.S.C. 78c(f). 16 17 E:\FR\FM\05AUN1.SGM 05AUN1 39128 Federal Register / Vol. 74, No. 149 / Wednesday, August 5, 2009 / Notices 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–NYSE–2009–73 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. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60397; File No. SR– NYSEAmex–2009–48] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex LLC Extending the Operative Date of NYSE Amex Equities Rule 92(c)(3) from July 31, 2009 to December 31, 2009 July 30, 2009. srobinson on DSKHWCL6B1PROD with NOTICES 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 July 24, 2009, NYSE Amex LLC (the ‘‘Exchange’’ or ‘‘NYSE Amex’’) filed with the All submissions should refer to File Securities and Exchange Commission Number SR–NYSE–2009–73. This file (the ‘‘Commission’’) the proposed rule number should be included on the subject line if e-mail is used. To help the change as described in Items I and II below, which Items have been prepared Commission process and review your by the self-regulatory organization. The comments more efficiently, please use only one method. The Commission will Exchange filed the proposed rule change post all comments on the Commission’s pursuant to Section 19(b)(3)(A) of the 5 Act 4 and Rule 19b–4(f)(6) thereunder, Internet Web site (https://www.sec.gov/ which renders it effective upon filing rules/sro.shtml). Copies of the with the Commission. The Commission submission, all subsequent is publishing this notice to solicit amendments, all written statements comments on the proposed rule change with respect to the proposed rule from interested persons. change that are filed with the I. Self-Regulatory Organization’s Commission, and all written Statement of the Terms of Substance of communications relating to the the Proposed Rule Change proposed rule change between the Commission and any person, other than The Exchange proposes to extend the those that may be withheld from the operative date of NYSE Amex Equities Rule 92(c)(3) from July 31, 2009 to public in accordance with the December 31, 2009. The text of the provisions of 5 U.S.C. 552, will be proposed rule change is available at the available for inspection and copying in Exchange, the Commission’s Public the Commission’s Public Reference Room on official business days between Reference Room, and https:// www.nyse.com. the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for II. Self-Regulatory Organization’s inspection and copying at the principal Statement of the Purpose of, and office of the Exchange. All comments Statutory Basis for, the Proposed Rule received will be posted without change; Change the Commission does not edit personal In its filing with the Commission, the identifying information from Exchange included statements submissions. You should submit only concerning the purpose of, and basis for, information that you wish to make the proposed rule change and discussed available publicly. All submissions any comments it received on the should refer to File Number SR–NYSE– proposed rule change. The text of those 2009–73 and should be submitted on or statements may be examined at the before August 26, 2009. places specified in Item IV below. The For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–18666 Filed 8–4–09; 8:45 am] BILLING CODE 8010–01–P 18 17 CFR 200.30–3(a)(12). VerDate Nov<24>2008 18:54 Aug 04, 2009 Jkt 217001 Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. 1 15 U.S.C.78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 4 15 U.S.C. 78s(b)(3)(A). 5 17 CFR 240.19b–4(f)(6). 2 15 PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to extend the delayed operative date of NYSE Amex Equities Rule 92(c)(3) from July 31, 2009 to December 31, 2009. The Exchange believes that this extension will provide the time necessary for the Exchange, the New York Stock Exchange LLC (‘‘NYSE’’), and the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) to harmonize their respective rules concerning customer order protection to achieve a standardized industry practice.6 Merger Background As described more fully in a related rule filing,7 NYSE Euronext acquired The Amex Membership Corporation (‘‘AMC’’) pursuant to an Agreement and Plan of Merger, dated January 17, 2008 (the ‘‘Merger’’). In connection with the Merger, the Exchange’s predecessor, the American Stock Exchange LLC (‘‘Amex’’), a subsidiary of AMC, became a subsidiary of NYSE Euronext and was renamed NYSE Amex LLC (‘‘NYSE Amex’’ or the ‘‘Exchange’’), and continues to operate as a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the ‘‘Act’’).8 The effective date of the Merger was October 1, 2008. In connection with the Merger, on December 1, 2008, the Exchange relocated all equities trading conducted on the Exchange legacy trading systems and facilities located at 86 Trinity Place, New York, New York, to trading systems and facilities located at 11 Wall Street, New York, New York (the ‘‘Equities Relocation’’). The Exchange’s equity trading systems and facilities at 11 Wall Street (the ‘‘NYSE Amex Trading Systems’’) are operated by the NYSE on behalf of the Exchange.9 As part of the Equities Relocation, NYSE Amex adopted NYSE Rules 1– 1004, subject to such changes as necessary to apply the Rules to the Exchange, as the NYSE Amex Equities Rules to govern trading on the NYSE 6 See SR–NYSE–2009–73, formally submitted on July 24, 2009. 7 See Securities Exchange Act Release No. 58673 (Sept. 29, 2008), 73 FR 57707 (Oct. 3, 2008) (SR– NYSE–2008–60 and SR–Amex 2008–62) (approving the Merger). 8 15 U.S.C. 78f. 9 See Securities Exchange Act Release No. 58705 (Oct. 1, 2008), 73 FR 58995 (Oct. 8, 2008) (SR– Amex-2008–63) (approving the Equities Relocation). E:\FR\FM\05AUN1.SGM 05AUN1

Agencies

[Federal Register Volume 74, Number 149 (Wednesday, August 5, 2009)]
[Notices]
[Pages 39126-39128]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-18666]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60396; File No. SR-NYSE-2009-73]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC 
Extending the Operative Date of NYSE Rule 92(c)(3) From July 31, 2009 
to December 31, 2009

July 30, 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 July 24, 2009, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II below, which Items have been prepared by the self-regulatory 
organization. The Exchange filed the proposed rule change pursuant to 
Section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ 
which renders it effective upon filing with the Commission. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend the operative date of NYSE Rule 
92(c)(3) from July 31, 2009 to December 31, 2009. The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and https://www.nyse.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the 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 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 Exchange is proposing to extend the delayed operative date of 
NYSE Rule 92(c)(3) from July 31, 2009 to December 31, 2009. The 
Exchange believes that this extension will provide the time necessary 
for the Exchange and the Financial Industry Regulatory Authority, Inc. 
(``FINRA'') to harmonize their respective rules concerning customer 
order protection to achieve a standardized industry practice.
Background
    On July 5, 2007, the Commission approved amendments to NYSE Rule 92 
to permit riskless principal trading at the Exchange.\6\ These 
amendments were filed in part to begin the harmonization process 
between Rule 92 and FINRA's Manning Rule.\7\ In connection with those 
amendments, the Exchange implemented for an operative date of January 
16, 2008, NYSE Rule 92(c)(3), which permits Exchange member 
organizations to submit riskless principal orders to the Exchange, but 
requires them to submit to a designated Exchange database a report of 
the execution of the facilitated order. That rule also requires members 
to submit to that same database sufficient information to provide an 
electronic link of the execution of the facilitated order to all of the 
underlying orders.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 34-56017 (July 5, 
2007), 72 FR 38110 (July 12, 2007), SR-NYSE-2007-21.
    \7\ See NASD Rule 2111 and IM-2110-2.
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    For purposes of NYSE Rule 92(c)(3), the Exchange informed member 
organizations that when executing riskless principal transactions, 
firms must submit order execution reports to the Exchange's Front End 
Systemic Capture (``FESC'') database linking the execution of the 
riskless principal order on the Exchange to the specific underlying 
orders. The information provided must be sufficient for both member 
firms and the Exchange to reconstruct in a time-sequenced manner all 
orders, including allocations to the underlying orders, with respect to 
which a member organization is claiming the riskless principal 
exception.
    Because the rule change required both the Exchange and member 
organizations to make certain changes to their trading and order 
management systems, the NYSE filed for immediate effectiveness to delay 
to May 14, 2008 the operative date of the NYSE Rule 92(c)(3) 
requirements, including submitting end-of-day allocation reports for 
riskless principal transactions and using the riskless principal 
account type indicator.\8\ The Exchange filed for additional extensions 
of the operative date of Rule 92(c)(3), the most recent of which was an 
extension to July 31, 2009.\9\
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release No. 56968 (Dec. 14, 
2007), 72 FR 72432 (Dec. 20, 2007), SR-NYSE-2007-114.
    \9\ See Securities Exchange Act Release Nos. 57682 (Apr. 17, 
2008), 73 FR 22193 (Apr. 24, 2008) (SR-NYSE-2008-29) and 59621 (Mar. 
23, 2009), 74 FR 14179 (Mar. 30, 2009) (SR-NYSE-2009-30).
---------------------------------------------------------------------------

Request for Extension \10\
    FINRA and the Exchange have been working diligently on fully 
harmonizing their respective rules, including reviewing the 
possibilities for a uniform reporting standard for riskless principal 
transactions. However, because of the complexity of the existing 
customer order protection rules, including the need for input from 
industry participants as well as Commission

[[Page 39127]]

approval, the Exchange and FINRA will not have harmonized their 
respective customer order protection rules by the current July 31, 2009 
date for the implementation of the FESC riskless principal reporting.
---------------------------------------------------------------------------

    \10\ NYSE Amex LLC has filed a companion rule filing to conform 
its Equities Rules to the changes proposed in this filing. See SR-
NYSEAmex-2009-48, formally submitted July 24, 2009.
---------------------------------------------------------------------------

    The Exchange notes that it has agreed with FINRA to pursue efforts 
to harmonize customer order protection rules. As authorized by their 
respective Boards, FINRA and NYSE Regulation, Inc. (``NYSE 
Regulation'') have each published a Regulatory Notice/Information Memo 
that solicits comments from their respective member participants on the 
proposed harmonized approach to customer order protection.\11\ Because 
industry participants need to code their trading systems to comply with 
customer order protection rules, the Exchange believes that industry 
input is vital to ensuring that the approach to customer order 
protection both meets regulatory needs of protecting customer orders, 
but is also feasible technologically.
---------------------------------------------------------------------------

    \11\ See NYSE Regulation Information Memo 09-13 (March 12, 
2009); FINRA Regulatory Notice 09-15 (March 12, 2009).
---------------------------------------------------------------------------

    Both FINRA and NYSE Regulation have received comments from the 
public on the Regulatory Notice and Information Memo, including 
comments from industry forums such as SIFMA and FIF. The comments have 
generally supported efforts to harmonize the FINRA and NYSE rules. 
Among issues raised in the comment letters, however, is the concern 
that FINRA and NYSE have a harmonized approach for reporting riskless 
principal transactions. In addition, commenters note the need for an 
implementation period to develop any technology that would be needed to 
comply with the proposed reporting standard. FINRA and NYSE Regulation 
continue to work together to develop such a harmonized approach to 
reporting riskless principal trades.
    The Exchange continues to believe that pending full harmonization 
of the respective customer order protection rules, it would be 
premature to require firms to meet the current Rule 92(c)(3) FESC 
reporting requirements.\12\ Indeed, having differing reporting 
standards for riskless principal orders would be inconsistent with the 
overall goal of the harmonization process.
---------------------------------------------------------------------------

    \12\ The Exchange notes that it would also need to make 
technological changes to implement the proposed FESC reporting 
solution for Rule 92(c)(3).
---------------------------------------------------------------------------

    Accordingly, to provide the Exchange and FINRA the time necessary 
to develop a harmonized rule set that would apply across their 
respective marketplaces, including a harmonized approach to riskless 
principal trade reporting, the Exchange is proposing to delay the 
operative date for NYSE Rule 92(c)(3) from July 31, 2009 to December 
31, 2009.
    Pending the harmonization of the two rules, the Exchange will 
continue to require that, as of the date each member organization 
implements riskless principal routing, the member organization have in 
place systems and controls that allow them to easily match and tie 
riskless principal execution on the Exchange to the underlying orders 
and that they be able to provide this information to the Exchange upon 
request. To make clear that this requirement continues, the Exchange 
proposes to amend supplementary material .95 to Rule 92 to specifically 
provide that the Rule 92(c)(3) reporting requirements are suspended 
until December 31, 2009 and that member organizations are required to 
have in place such systems and controls relating to their riskless 
principal executions on the Exchange. Moreover, the Exchange will 
coordinate with FINRA to examine for compliance with the rule 
requirements for those firms that engage in riskless principal trading 
under Rule 92(c).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\13\ in 
general, and furthers the objectives of Section 6(b)(5) of the Act,\14\ 
in particular, in that it is 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. The Exchange 
believes the proposed extension provides the Exchange and FINRA the 
time necessary to develop a harmonized rule concerning customer order 
protection that will enable member organizations to participate in the 
national market system without unnecessary impediments.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) impose any significant burden on competition; and
    (iii) become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \15\ 
and Rule 19b-4(f)(6) thereunder.\16\
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written notice of its intent to file the proposed rule 
change, along with a brief description and text of the proposed rule 
change, at least five business days prior to the date of filing of 
the proposed rule change, or such shorter time as designated by the 
Commission. The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    The Exchange has requested the Commission to waive the 30-day 
operative delay so that the Exchange can extend the operative date of 
NYSE Rule 92(c)(3) without interruption. The Commission hereby grants 
the Exchange's request and believes such waiver is consistent with the 
protection of investors and the public interest.\17\ Accordingly, the 
Commission designates the proposed rule change operative upon filing 
with the Commission.
---------------------------------------------------------------------------

    \17\ 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. See 15 
U.S.C. 78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, 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.

[[Page 39128]]

Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2009-73 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2009-73. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for inspection and 
copying in the Commission's Public Reference Room on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also 
will be available for inspection and copying at the principal office of 
the Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
NYSE-2009-73 and should be submitted on or before August 26, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-18666 Filed 8-4-09; 8:45 am]
BILLING CODE 8010-01-P
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