Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending NYSE Rule 103B to Modify the Composition of the Exchange Selection Panel; and Prohibit Any Ex Parte Communications During and Regarding the Selection Process Between the DMM Units and the Individuals Serving on the Exchange Selection Panel, 40247-40249 [E9-19119]
Download as PDF
<![CDATA[
Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices
sroberts on DSKD5P82C1PROD with NOTICES
compliance date of August 10, 2009 for
this provision.
The Commission today is providing
notice that an NRSRO subject to the
disclosure provisions of paragraph (d) of
Rule 17g–2 can satisfy the requirement
to make publicly available ratings
history information in an XBRL format
by using an XBRL format or any other
machine-readable format, until such
time as the Commission provides
further notice.
II. Discussion
The Commission adopted Rule 17g–2
and the amendments thereto, in part,
under authority to require NRSROs to
make and keep for specified periods
such records as the Commission
prescribes as necessary or appropriate in
the public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Exchange Act.8 In
adopting new paragraph (d) to Rule
17g–2, the Commission noted that
although NRSROs generally make their
issuer-paid credit ratings publicly
available for free, it can be difficult to
compile the actions and compare them
across NRSROs.9 The Commission
therefore adopted the new disclosure
requirements of paragraph (d) with the
expectation that making this
information more accessible will
advance the Commission’s goal of
fostering accountability and
comparability among NRSROs with
respect to their issuer-paid credit
ratings.10 Requiring NRSROs to publicly
disclose rating action histories for a
limited percentage of their outstanding
issuer-paid credit ratings will allow
market participants, academics and
others to use the information to perform
analysis comparing how the NRSROs
subject to the disclosure rule perform in
the classes of credit ratings for which
they are registered.11
As noted above, Rule 17g–2(d)
provides that the ratings histories
required under the rule must be made
public on the NRSRO’s corporate
Internet Web site using an XBRL
format.12 Further, the rule requires an
NRSRO to use the List of XBRL Tags for
NRSROs published on the
Commission’s Web page. The List of
XBRL Tags currently is not available.
Therefore, the Commission is providing
notice to NRSROs that they can satisfy
the requirement in Rule 17g–2(d) to
make publicly available ratings history
8 See
Section 17(a)(1) of the Exchange Act (15
U.S.C. 78q(a)(1)).
9 See February 2009 Adopting Release, 74 FR at
6461.
10 Id. at 6460.
11 Id. at 6461.
12 17 CFR 240.17g–2(d).
VerDate Nov<24>2008
20:51 Aug 10, 2009
Jkt 217001
information in an XBRL format by using
an XBRL format or any other machine
readable format, until such time as the
Commission provides further notice.
The Commission has every intention of
providing notice as soon as practicable,
once the List of XBRL Tags for NRSROs
is available, that an XBRL format is the
sole means by which an NRSRO may
satisfy this requirement. Examples of
other types of machine-readable formats
include pipe delimited text data
(‘‘PDTD’’) and eXtensible Markup
Language (‘‘XML’’). Data that is
provided in a machine-readable format
must be easily downloadable into
commercially available spreadsheets or
database programs.
The Commission also notes that the
requirement in Exhibit 1 to Form
NRSRO which states that ‘‘If the
Applicant/NRSRO is required to make
and keep publicly available on its
corporate Internet Web site in an XBRL
(eXtensible Business Reporting
Language) format a sample of ratings
action information pursuant to the
requirements of 17 CFR 240.17g–2(d),
provide in this Exhibit the Web site
address where this information is, or
will be, made publicly available’’ can be
satisfied by providing the Web site
address where the information is made
publicly available in an XBRL format or
any other machine readable format,
until such time as the Commission
provides further notice.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–19125 Filed 8–10–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60426; File No. SR–NYSE–
2009–74]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by New York
Stock Exchange LLC Amending NYSE
Rule 103B to Modify the Composition
of the Exchange Selection Panel; and
Prohibit Any Ex Parte Communications
During and Regarding the Selection
Process Between the DMM Units and
the Individuals Serving on the
Exchange Selection Panel
August 4, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’),2 and Rule 19b–4 thereunder,3
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
2 15
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
40247
notice is hereby given that on July 27,
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 Commission is
publishing this notice to solicit
comments on the proposed rule from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Rule 103B (‘‘Security Allocation
and Reallocation’’) to: (1) Modify the
composition of the Exchange Selection
Panel; and 2) prohibit any ex parte
communications during and regarding
the selection process between the DMM
units and the individuals serving on the
Exchange Selection Panel. The text of
the proposed rule change is available at
the Exchange, the Commission’s Public
Reference Room, and https://
www.nyse.com.4
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The New York Stock Exchange LLC
(‘‘NYSE’’ or ‘‘Exchange’’) proposes to
amend NYSE Rule 103B (‘‘Security
Allocation and Reallocation’’) to: (1)
Modify the composition of the Exchange
Selection Panel; and (2) prohibit any ex
parte communications during and
regarding the selection process between
4 The Commission notes that the Exchange
inadvertently marked certain portions of the rule
text incorrectly. Specifically, in paragraph (III)(B)(1)
of Rule 103B the Exchange failed to indicate the
deletion of a comma after ‘‘his or her designee’’and
failed to mark ‘‘; (b)’’ as new text. In addition, the
Exchange marked as new text one letter in a
sentence being deleted from paragraph (III)(B)(1) of
Rule 103B.
E:\FR\FM\11AUN1.SGM
11AUN1
40248
Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices
the DMM units and the individuals
serving on the Exchange Selection
Panel.
The Exchange notes that parallel
changes are proposed to be made to the
rules of NYSE Amex LLC (formerly the
American Stock Exchange).5
sroberts on DSKD5P82C1PROD with NOTICES
Background
Currently, pursuant to NYSE Rule
103B, an issuer may select the DMM
unit that will be assigned its security or
delegate the selection of the DMM unit
to the Exchange. If the issuer authorizes
the Exchange to select the DMM unit to
trade its security, an Exchange Selection
Panel (the ‘‘ESP’’ or the ‘‘Panel’’) is
convened to select the DMM unit based
on a review of all information that
would be available to the issuer. The
Panel is comprised of three members of
the Exchange’s Senior Management, as
designated by the Chief Executive
Officer (‘‘CEO’’) of the Exchange or his
or her designee, one non-DMM
Executive Floor Governor (‘‘EFG’’) and
two non-DMM Floor Governors (‘‘FGs’’).
The non-DMM EFG and non-DMM FGs
are designated on a rotating basis. The
Panel’s decision is made by majority
vote. In the event of a tie, the CEO of
the Exchange or his/her designee makes
the final decision. The Exchange then
informs the issuer of the DMM unit
selected by the Panel.
Proposed Amendments
The Exchange proposes to amend
NYSE Rule 103B to modify the
composition of the Panel in order to
ensure consistent Floor participation in
the selection process and minimize
delays due to scheduling conflicts.
The current composition of the Panel
has proven difficult when scheduling
the required participants within five
days of the issuer’s request. The
Exchange therefore seeks to amend
NYSE Rule 103B to modify the
representation on the Panel to include:
(1) At least one member of the
Exchange’s Senior Management; (2) any
combination of two Exchange Senior
Management or Exchange Floor
Operations Staff, to be designated by the
Executive Vice-President of Exchange
Floor Operations or his/her designee;
and (3) any combination of three nonDMM EFGs or non-DMM FGs for a total
of six members.
Finally, to reinforce the integrity and
objectivity of the ESP selection process,
the Exchange proposes to amend NYSE
Rule 103B to explicitly prohibit any
communications regarding the selection
process between the Panelists and the
DMM units. The Exchange proposes to
5 See
SR–NYSEAmex–2009–49.
VerDate Nov<24>2008
20:51 Aug 10, 2009
have communication regarding the
selection process cease from the time
the issuer delegates the selection
responsibility to the Exchange until the
Panel selects the DMM unit to trade the
issuer’s security.
2. Statutory Basis
The basis under the Act for the
proposed rule change is the requirement
under Section 6(b)(5),6 which requires
that an exchange have rules that are
designed to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, to
remove impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest. The Exchange believes
that the proposed amendments are
consistent with these objectives. The
amendments sought herein seek to
streamline and facilitate the process of
assigning securities to DMM units by
allowing for more flexibility in
composing the Panel which ultimately
facilitates and expedites the allocation
and ultimately the trading of securities
on the Exchange. Furthermore, the
proposed amendment to prohibit
communications between the Panel and
the DMM units preserves the integrity
and impartiality of the allocation
process and therefore protects the
public interest.
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: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) by its terms does not become
operative for 30 days after the date of
this filing, or such shorter time as the
Commission may designate if consistent
6 15
Jkt 217001
PO 00000
U.S.C. 78f(b)(5).
Frm 00094
Fmt 4703
Sfmt 4703
with the protection of investors and the
public interest, the proposed rule
change has become effective pursuant to
Section 19(b)(3)(A) 7 of the Act and Rule
19b–4(f)(6) thereunder.8
A proposed rule change filed under
Rule 19b–4(f)(6) 9 normally may not
become operative prior to 30 days after
the date of filing. However, Rule 19b–
4(f)(6)(iii) 10 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange requests that the Commission
waive the 30-day operative delay, as
specified in Rule 19b–4(f)(6)(iii),11
which would make the rule change
operative upon filing. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest because such waiver will allow
the Exchange to immediately streamline
the process of allocating securities to
DMM units. In addition, by prohibiting
communications regarding the selection
process between members of the Panel
and DMM units, the Exchange will be
able to immediately reinforce
impartiality and fairness during the
selection process.12 Accordingly, the
Commission designates the proposed
rule change operative upon filing with
the Commission.
At any time within 60 days of the
filing of such 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:
7 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
provide the Commission with 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 fulfilled this requirement.
9 Id.
10 17 CFR 240.19b–4(f)(6)(iii).
11 Id.
12 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
8 17
E:\FR\FM\11AUN1.SGM
11AUN1
Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices
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–2009–74 on the
subject line.
Paper Comments
sroberts on DSKD5P82C1PROD with NOTICES
• 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–2009–74. 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 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–
2009–74 and should be submitted on or
before September 1, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–19119 Filed 8–10–09; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60442; File No. SR–ISE–
2009–57]
Self-Regulatory Organizations;
International Securities Exchange,
LLC; Notice of Filing and Immediate
Effectiveness of Proposed Rule
Change Relating To Amending the
Direct Edge ECN Fee Schedule
August 5, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on July 31,
2009, the International Securities
Exchange, LLC (the ‘‘Exchange’’ or the
‘‘ISE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Direct Edge ECN’s (‘‘DECN’’) fee
schedule for ISE Members 3 to (i) create
a new tier, called the Full Sweep Tier,
to provide a rebate for ISE Members that
use ROUT orders that meet a volume
theshold for amount of liquidity added
on EDGX and to (ii) adopt new fees and
rebates.
All of the changes described herein
are applicable to ISE Members. The text
of the proposed rule change is available
on the Exchange’s Internet Web site at
https://www.ise.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statements may be examined at
the places specified in Item IV below.
The self-regulatory organization has
prepared summaries, set forth in
sections A, B and C below, of the most
significant aspects of such statements.
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 References to ISE Members in this filing refer to
DECN Subscribers who are ISE Members.
BILLING CODE 8010–01–P
2 17
13 17
CFR 200.30–3(a)(12).
VerDate Nov<24>2008
20:51 Aug 10, 2009
Jkt 217001
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
40249
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
DECN, a facility of ISE, operates two
trading platforms, EDGX and EDGA. On
July 1, 2009,4 the Exchange adopted a
new Ultra Tier Rebate, as defined below,
whereby ISE Members are provided a
$0.0032 rebate per share for securities
priced at or above $1.00 when ISE
Members add liquidity on EDGX if the
attributed MPID satisfies one of the
following criteria on a daily basis,
measured monthly: (i) Adding
100,000,000 shares or more on EDGX; or
(ii) adding 50,000,000 shares or more of
liquidity to EDGX, so long as added
liquidity on EDGX is at least 20,000,000
shares greater than the previous
calendar month. The rebate described
above is referred to as an ‘‘Ultra Tier
Rebate’’ on the DECN fee schedule.
The Exchange is now proposing to
establish an additional tier called the
Full Sweep Tier, whereby ISE Members
are provided a $0.0035 rebate per share
for securities priced at or above $1.00
when ISE Members add liquidity on
EDGX if the attributed MPID use of the
ROUT order type adds 50,000,000
shares or more of liquidity to EDGX on
a daily basis, measured monthly. A
ROUT order type that is sent to EDGX
is an order type that does a full sweep
of the EDGX book, before being exposed
to Enhanced Liquidity Providers
(‘‘ELPs’’).5 This order type will then
route to away market centers if there is
additional unexecuted liquidity. This
order type is primarily used for agency
orders, especially retail order flow. The
rebate is designed to encourage the use
of this particular type of liquidity.
The Exchange also proposes to adopt
additional fees and rebates. First, the
Exchange proposes to adopt a fee of
$0.0024 per share for securities priced at
or above $1.00 which add liquidity to
LavaFlow ECN (‘‘LavaFlow’’) and are
routed from either EDGX or EDGA. Such
a strategy is deemed a ROLF routing
strategy, which is a destination specific
routing strategy that will first sweep the
EDGA or EDGX order book before being
delivered to LavaFlow. A conforming
amendment will be made to the fee
schedule to yield an ‘‘M’’ flag to account
4 See Securities and Exchange Act Release No.
60232 (July 2, 2009), 74 FR 33309 (July 10, 2009)
(SR–ISE–2009–43).
5 DECN currently operates a program known as
the ‘‘Enhanced Liquidity Provider’’ (‘‘ELP’’)
program on its two trading platforms, EDGX and
EDGA, pursuant to which parties entering orders
into DECN can elect to display their marketable
orders to designated liquidity providers before the
order is routed or cancelled.
E:\FR\FM\11AUN1.SGM
11AUN1
]]>Agencies
[Federal Register Volume 74, Number 153 (Tuesday, August 11, 2009)]
[Notices]
[Pages 40247-40249]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-19119]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60426; File No. SR-NYSE-2009-74]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC
Amending NYSE Rule 103B to Modify the Composition of the Exchange
Selection Panel; and Prohibit Any Ex Parte Communications During and
Regarding the Selection Process Between the DMM Units and the
Individuals Serving on the Exchange Selection Panel
August 4, 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 July 27, 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 Commission is publishing this notice to solicit
comments on the proposed rule from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Rule 103B (``Security
Allocation and Reallocation'') to: (1) Modify the composition of the
Exchange Selection Panel; and 2) prohibit any ex parte communications
during and regarding the selection process between the DMM units and
the individuals serving on the Exchange Selection Panel. The text of
the proposed rule change is available at the Exchange, the Commission's
Public Reference Room, and https://www.nyse.com.\4\
---------------------------------------------------------------------------
\4\ The Commission notes that the Exchange inadvertently marked
certain portions of the rule text incorrectly. Specifically, in
paragraph (III)(B)(1) of Rule 103B the Exchange failed to indicate
the deletion of a comma after ``his or her designee''and failed to
mark ``; (b)'' as new text. In addition, the Exchange marked as new
text one letter in a sentence being deleted from paragraph
(III)(B)(1) of Rule 103B.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The New York Stock Exchange LLC (``NYSE'' or ``Exchange'') proposes
to amend NYSE Rule 103B (``Security Allocation and Reallocation'') to:
(1) Modify the composition of the Exchange Selection Panel; and (2)
prohibit any ex parte communications during and regarding the selection
process between
[[Page 40248]]
the DMM units and the individuals serving on the Exchange Selection
Panel.
The Exchange notes that parallel changes are proposed to be made to
the rules of NYSE Amex LLC (formerly the American Stock Exchange).\5\
---------------------------------------------------------------------------
\5\ See SR-NYSEAmex-2009-49.
---------------------------------------------------------------------------
Background
Currently, pursuant to NYSE Rule 103B, an issuer may select the DMM
unit that will be assigned its security or delegate the selection of
the DMM unit to the Exchange. If the issuer authorizes the Exchange to
select the DMM unit to trade its security, an Exchange Selection Panel
(the ``ESP'' or the ``Panel'') is convened to select the DMM unit based
on a review of all information that would be available to the issuer.
The Panel is comprised of three members of the Exchange's Senior
Management, as designated by the Chief Executive Officer (``CEO'') of
the Exchange or his or her designee, one non-DMM Executive Floor
Governor (``EFG'') and two non-DMM Floor Governors (``FGs''). The non-
DMM EFG and non-DMM FGs are designated on a rotating basis. The Panel's
decision is made by majority vote. In the event of a tie, the CEO of
the Exchange or his/her designee makes the final decision. The Exchange
then informs the issuer of the DMM unit selected by the Panel.
Proposed Amendments
The Exchange proposes to amend NYSE Rule 103B to modify the
composition of the Panel in order to ensure consistent Floor
participation in the selection process and minimize delays due to
scheduling conflicts.
The current composition of the Panel has proven difficult when
scheduling the required participants within five days of the issuer's
request. The Exchange therefore seeks to amend NYSE Rule 103B to modify
the representation on the Panel to include: (1) At least one member of
the Exchange's Senior Management; (2) any combination of two Exchange
Senior Management or Exchange Floor Operations Staff, to be designated
by the Executive Vice-President of Exchange Floor Operations or his/her
designee; and (3) any combination of three non-DMM EFGs or non-DMM FGs
for a total of six members.
Finally, to reinforce the integrity and objectivity of the ESP
selection process, the Exchange proposes to amend NYSE Rule 103B to
explicitly prohibit any communications regarding the selection process
between the Panelists and the DMM units. The Exchange proposes to have
communication regarding the selection process cease from the time the
issuer delegates the selection responsibility to the Exchange until the
Panel selects the DMM unit to trade the issuer's security.
2. Statutory Basis
The basis under the Act for the proposed rule change is the
requirement under Section 6(b)(5),\6\ which requires that an exchange
have rules that are designed to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest. The Exchange believes that
the proposed amendments are consistent with these objectives. The
amendments sought herein seek to streamline and facilitate the process
of assigning securities to DMM units by allowing for more flexibility
in composing the Panel which ultimately facilitates and expedites the
allocation and ultimately the trading of securities on the Exchange.
Furthermore, the proposed amendment to prohibit communications between
the Panel and the DMM units preserves the integrity and impartiality of
the allocation process and therefore protects the public interest.
---------------------------------------------------------------------------
\6\ 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: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) \7\ of the Act and Rule 19b-4(f)(6) thereunder.\8\
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78s(b)(3)(A).
\8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with 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 fulfilled this requirement.
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally
may not become operative prior to 30 days after the date of filing.
However, Rule 19b-4(f)(6)(iii) \10\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange requests that the
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\11\ which would make the rule change operative upon
filing. The Commission believes that waiving the 30-day operative delay
is consistent with the protection of investors and the public interest
because such waiver will allow the Exchange to immediately streamline
the process of allocating securities to DMM units. In addition, by
prohibiting communications regarding the selection process between
members of the Panel and DMM units, the Exchange will be able to
immediately reinforce impartiality and fairness during the selection
process.\12\ Accordingly, the Commission designates the proposed rule
change operative upon filing with the Commission.
---------------------------------------------------------------------------
\9\ Id.
\10\ 17 CFR 240.19b-4(f)(6)(iii).
\11\ Id.
\12\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of such 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:
[[Page 40249]]
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-2009-74 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-2009-74. 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 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-2009-74 and should be submitted on or before September 1, 2009.
For the Commission, by the Division of Trading and Markets, pursuant
to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-19119 Filed 8-10-09; 8:45 am]
BILLING CODE 8010-01-P
