Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Amending Rule 10.12 (Minor Rule Plan), 42725-42727 [E9-20241]

Download as PDF Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices rules/sro/shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing will also 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 No. SR–BX–2009–047 and should be submitted on or before September 14, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.5 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–20192 Filed 8–21–09; 8:45 am] SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60518; File No. SR– NYSEArca–2009–70] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Proposed Rule Change Amending Rule 10.12 (Minor Rule Plan) erowe on DSK5CLS3C1PROD with NOTICES August 18, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on July 29, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) 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 self-regulatory organization. The Commission is publishing this notice to solicit 5 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Nov<24>2008 15:04 Aug 21, 2009 comments on the proposed rule change from interested persons. each proposed changes [sic] is shown below. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Proposed Rules 10.12(h)(22) and 10.12(k)(i)(22) NYSE Arca Rule 5.4(a) provides, with limited exceptions, that the Exchange may prohibit any opening purchase transactions in a series of options to the extent it deems such action necessary or appropriate. Accordingly, OTP Holders effecting opening transactions in restricted series, that are inconsistent with the terms of any such restriction, will be considered to be in violation of Rule 5.4(a). The Exchange is proposing to incorporate violations related to trading in restricted series into the MRP under Exchange Rule 10.12(h)(22). The Exchange is proposing to implement a fine of $1,000 for the first violation in a rolling twenty-four month period. A second violation within the same period would be allocated a $2,500 fine and a third violation would be allocated a $5,000 fine. The schedule of fines will be included under Rule 10.12(k)(i)(22). Any subsequent violations within a rolling twenty-four month period would be subject to formal disciplinary proceedings by the Exchange. NYSE Arca believes that establishing a rolling twenty-four month period for cumulative violations will serve as an effective deterrent to future violative conduct. NYSE Arca believes that in most cases these violations may be handled efficiently through the MRP, however, as with other violations, any egregious activity or activity that is believed to be manipulative will continue to be subject to formal disciplinary proceedings. The Exchange proposes to amend Rule 10.12–Minor Rule Plan. The text of the proposed rule change is attached as Exhibit 5 to the 19b–4 form. A copy of this filing is available on the Exchange’s Web site at https://www.nyse.com, at the Exchange’s principal office and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose BILLING CODE 8010–01–P Jkt 217001 42725 The NYSE Arca Minor Rule Plan (‘‘MRP’’) fosters compliance with applicable rules and also helps to reduce the number and extent of rule violations committed by Options Trading Permit (‘‘OTP’’) Holders, OTP Firms and associated persons. The prompt imposition of a financial penalty helps to quickly educate and improve the conduct of OTP Holders, OTP Firms and associated persons that have engaged in inadvertent or otherwise minor violations of the Exchange’s rules. By promptly imposing a meaningful financial penalty for such violations, the MRP focuses on correcting conduct before it gives rise to more serious enforcement action. The Exchange is now proposing to incorporate additional violations into the MRP, these violations include (i) trading in restricted classes; and (ii) failure to report position and account information. The Exchange is also proposing to increase fine levels for certain violations presently included in the MRP. The increases [sic] fine levels will be applicable for violations of due diligence, priority rules and order exposure rules. A brief description of PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 Proposed Rules 10.12(h)(23) and 10.12(k)(i)(23) Among other things, Rule 6.6(a) requires each OTP Holder and OTP Firm to report to the Exchange the account and position information of any customer who, acting alone, or in concert with others, on the previous business day maintained aggregate long or short positions on the same side of the market of 200 or more contracts of any single class of option contracts dealt in on the Exchange. OTP Holders and OTP Firms report this information on the Large Option Position Report (‘‘LOPR’’). NYSE Arca is proposing to incorporate violations for failing to accurately report position and account information in accordance with Rule 6.6(a) into the MRP. The Exchange believes most of these violations are inadvertent and technical in nature. Not having LOPR reporting violation necessarily subject to formal E:\FR\FM\24AUN1.SGM 24AUN1 42726 Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices erowe on DSK5CLS3C1PROD with NOTICES disciplinary proceedings will allow the Exchange to more expeditiously process routine violations under the MRP Plan. In addition, NYSE Arca, as a member of the Intermarket Surveillance Group (‘‘ISG’’), as well as certain other selfregulatory organizations, have entered into an agreement pursuant to Section 17(d) of the Securities Exchange Act of 1934 (as amended) (‘‘17d–2 Agreement’’), which incorporates the surveillance and sanctions of LOPR reporting violations. As such, the SROs have agreed that their respective rules concerning the reporting of large option positions are common rules. As a result, adding LOPR reporting violations to the MRP will further result in the consistency of rules among SROs who are parties to the 17d–2 Agreement with respect to LOPR reporting surveillance. The Exchange is proposing to implement a fine of $1,000 for the first violation in a rolling twenty-four month period. A second violation within the same period would be allocated a $2,500 fine and a third violation would be allocated a $5,000 fine. The schedule of fines will be included under Rule 10.12(k)(i)(23). Any subsequent violations within a rolling twenty-four month period would be subject to formal disciplinary proceedings by the Exchange. NYSE Arca believes that establishing a rolling twenty-four month period for cumulative violations will serve as an effective deterrent to future violative conduct. NYSE Arca believes that in most cases these LOPR reporting violations may be handled efficiently through the MRP, however, as with other violations, any egregious activity or activity that is believed to be manipulative will continue to be subject to formal disciplinary proceedings. Changes to Rule 10.12(k)(i)(1), Rule 10.12(k)(i)(34), and Rule 10.12(k)(i)(40) NYSE Arca Rule 6.46(a) requires that a Floor Broker handling an order is to use due diligence to execute the order at the best price or prices available to him, in accordance with the Rules of the Exchange. Violators of Rule 6.46(a) are subject to a sanction pursuant to the MRP, specifically, Rule 10.12(k)(i)(1). Suggested fines for violations of Rule 6.46(a) are presently $1,000 for the first violation in a rolling twenty-four month period, $2,500 for a second violation within the same period fine and a third violation is subject to a $3,500 fine. NYSE Arca Rule 6.47A is designed to ensure that orders are properly exposed on the NYSE Arca electronic trading system prior to interaction by the initiating firm. The rule states that users may not execute as principal orders they VerDate Nov<24>2008 15:04 Aug 21, 2009 Jkt 217001 represent as agent unless (i) agency orders are first exposed on the Exchange for at least one (1) second or (ii) the User has been bidding or offering on the Exchange for at least one (1) second prior to receiving an agency order that is executable against such bid or offer. This rule prevents a user from executing agency orders to increase its economic gain from trading against the order without first giving other trading interest on the Exchange an opportunity to either trade with the agency order or to trade at the execution price when the User was already bidding or offering on the book. Violators of Rule 6.47A are subject to a sanction pursuant to the MRP, specifically, Rule 10.12(k)(i)(34). Suggested fines for violations of Rule 6.47A are presently $500 for the first violation in a rolling twenty-four month period, $1,000 for a second violation within the same period fine and a third violation is subject to a $2,500 fine. NYSE Arca Rule 6.75 governs the priority of bids and offers in open outcry trading. In general, Rule 6.75 states that the highest bid/lowest offer shall have priority over all other orders. In the event there are two or more bids/ offers for the same option contract representing the best price and one such bid/offer is displayed in the Consolidated Book, such bid shall have priority over any other bid at the post. In addition, if two or more bids/offers represent the best price and a bid/offer displayed in the Consolidated Book is not involved, priority shall be afforded to such bids in the sequence in which they are made. Rule 6.75 also contains certain provisions for [sic] related to split-price priority and priority of complex orders. Violators of any part of Rule 6.75 are subject to a sanction pursuant to the MRP, specifically Rule 10.12(k)(i)(40). Suggested fines for violations of Rule 6.75 are presently $500 for the first violation in a rolling twenty-four month period, $1,000 for a second violation within the same period fine and a third violation is subject to a $2,000 fine. At this time the Exchange believes the current monetary fine levels contained in the MRP, for the above mentioned violations, are inadequate, given the serious nature of these rules. In order to act as an effective deterrent against future violations, while also serving as a just penalty for those who commit these violations, the Exchange feels an increase in the fine levels for these three violations is warranted. NYSE Arca now proposes fine levels of $1,000 for the first violation in a rolling twenty-four month period, $2,500 for a second violation within the same period fine and $5,000 for a third violation within PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 the same period fine. These fine levels will apply to all three types of violations. 2. Statutory Basis The proposed rule change is consistent with Section 6(b) 3 of the Act, in general, and furthers the objectives of Section 6(b)(5) 4 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The proposal is also consistent with Section 6(b)(6) 5 and 6(b)(7),6 which requires that members and persons associated with members are appropriately disciplined for violations of Exchange rules and are provided a fair procedure for disciplinary procedures. 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 Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve the proposed rule change, or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. 3 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 5 15 U.S.C. 78f(b)(6). 6 15 U.S.C. 78f(b)(7). 4 15 E:\FR\FM\24AUN1.SGM 24AUN1 Federal Register / Vol. 74, No. 162 / Monday, August 24, 2009 / Notices 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Florence E. Harmon, Deputy Secretary. [FR Doc. E9–20241 Filed 8–21–09; 8:45 am] BILLING CODE 8010–01–P Electronic Comments SOCIAL SECURITY ADMINISTRATION • 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–NYSEArca–2009–70 on the subject line. Privacy Act of 1974, as Amended; New System of Records AGENCY: Social Security Administration SUPPLEMENTARY INFORMATION: Proposed system of records and routine uses: Correction. I. Background and Purpose of the Proposed RECS System of Records ACTION: SUMMARY: We are issuing public notice of our intent to establish a new system of records and routine uses applicable to • Send paper comments in triplicate this system of records in accordance to Elizabeth M. Murphy, Secretary, with the Privacy Act (5 U.S.C. 552a(e)(4) Securities and Exchange Commission, and (e)(11)). The proposed system of 100 F Street, NE., Washington, DC records is entitled the Race and 20549–1090. Ethnicity Collection System (60–0104), All submissions should refer to File hereinafter referred to as the RECS Number SR-NYSEArca–2009–70. This system of records. We discuss the file number should be included on the system of records in the Supplementary subject line if e-mail is used. To help the Information section below. We invite public comments on this proposal. We Commission process and review your published this proposed system of comments more efficiently, please use only one method. The Commission will records on August 19, 2009 (document post all comments on the Commission’s 2009–19935), with an effective date of October 9, 2009, unless we receive Internet Web site (https://www.sec.gov/ comments before that date that would rules/sro.shtml). Copies of the result in a contrary determination. This submission, all subsequent current notice corrects the effective date amendments, all written statements of the proposed RECS system of records with respect to the proposed rule and routine uses, per below. change that are filed with the DATES: We filed a report of the proposed Commission, and all written RECS system of records and routine use communications relating to the disclosures with the Chairman of the proposed rule change between the Commission and any person, other than Senate Committee on Homeland Security and Governmental Affairs, the those that may be withheld from the Chairman of the House Committee on public in accordance with the Oversight and Government Reform, and provisions of 5 U.S.C. 552, will be the Director, Office of Information and available for inspection and copying in Regulatory Affairs, Office of the Commission’s Public Reference Management and Budget (OMB) on Room, 100 F Street, NE., Washington, August 13, 2009. The proposed RECS DC 20549, on official business days system of records and routine uses will between the hours of 10 a.m. and 3 p.m. become effective on September 28, Copies of the filing also will be available 2009, unless we receive comments for inspection and copying at the before that date that would result in a principal office of the Exchange. All contrary determination. comments received will be posted ADDRESSES: Interested persons may without change; the Commission does comment on this publication by writing not edit personal identifying to the Executive Director, Office of information from submissions. You Privacy and Disclosure, Office of the should submit only information that General Counsel, Social Security you wish to make available publicly. All Administration, Room 3–A–6 submissions should refer to File Operations Building, 6401 Security Number SR–NYSEArca–2009–70 and Boulevard, Baltimore, Maryland 21235– should be submitted on or before 6401. All comments we receive will be September 14, 2009. erowe on DSK5CLS3C1PROD with NOTICES 7 17 15:04 Aug 21, 2009 Jkt 217001 available for public inspection at the above address. FOR FURTHER INFORMATION CONTACT: Alicia Matthews, Social Insurance Specialist (Senior Analyst), Disclosure Policy Development and Services Division 1, Office of Privacy and Disclosure, Office of the General Counsel, Social Security Administration, 3–A–6 Operations Building, 6401 Security Boulevard, Baltimore, Maryland 21235–6401, telephone: (410) 965–1723, e-mail: alicia.matthews@ssa.gov. (SSA). Paper Comments VerDate Nov<24>2008 42727 PO 00000 CFR 200.30–3(a)(12). Frm 00084 Fmt 4703 Sfmt 4703 A. General Background In October 1997, the Office of Management and Budget (OMB) announced revised government-wide standards for Federal agencies collecting race and ethnicity (RE) data (62 FR 58782, Oct. 30, 1997, Revisions to the Standards for the Classification of Federal Data on Race and Ethnicity). We need RE data for program evaluation, research, and statistical reporting purposes. We do not use RE data to make decisions about a person’s application for benefits or any other programmatic determination. Prior to 1987, we collected RE data from persons on a voluntary basis when they applied for either original or replacement Social Security number (SSN) cards. Since 1987, however, we have issued most original SSN cards through an enumeration-at-birth program (EAB), which is administered by the States. As the States do not collect RE information, we do not maintain RE information for EAB applicants. Since 2002, the Department of Homeland Security (DHS) has taken applications for SSN cards from aliens entering the United States through the enumeration-at-entry (EAE) program. DHS does not provide us with RE information on EAE applicants. We currently maintain the RE data that we collect in an existing Privacy Act system of records, the Master Files of SSN Number Holders and SSN Applications. The RE data we currently collect is limited to these categories: Asian, Asian-American or Pacific Islander; Hispanic; Black (Not Hispanic); North American Indian or Alaskan Native; and White (Not Hispanic). Under the current standards, persons who provide us race information can designate only one of the categories, and they do not have the option of designating both their race and ethnicity. E:\FR\FM\24AUN1.SGM 24AUN1

Agencies

[Federal Register Volume 74, Number 162 (Monday, August 24, 2009)]
[Notices]
[Pages 42725-42727]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-20241]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60518; File No. SR-NYSEArca-2009-70]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Amending Rule 10.12 (Minor Rule Plan)

August 18, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on July 29, 2009, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') 
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 self-regulatory organization. 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\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 10.12-Minor Rule Plan. The text 
of the proposed rule change is attached as Exhibit 5 to the 19b-4 form. 
A copy of this filing is available on the Exchange's Web site at https://www.nyse.com, at the Exchange's principal office and at the 
Commission's Public Reference Room.

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

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of and basis for the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

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

1. Purpose
    The NYSE Arca Minor Rule Plan (``MRP'') fosters compliance with 
applicable rules and also helps to reduce the number and extent of rule 
violations committed by Options Trading Permit (``OTP'') Holders, OTP 
Firms and associated persons. The prompt imposition of a financial 
penalty helps to quickly educate and improve the conduct of OTP 
Holders, OTP Firms and associated persons that have engaged in 
inadvertent or otherwise minor violations of the Exchange's rules. By 
promptly imposing a meaningful financial penalty for such violations, 
the MRP focuses on correcting conduct before it gives rise to more 
serious enforcement action.
    The Exchange is now proposing to incorporate additional violations 
into the MRP, these violations include (i) trading in restricted 
classes; and (ii) failure to report position and account information. 
The Exchange is also proposing to increase fine levels for certain 
violations presently included in the MRP. The increases [sic] fine 
levels will be applicable for violations of due diligence, priority 
rules and order exposure rules. A brief description of each proposed 
changes [sic] is shown below.
Proposed Rules 10.12(h)(22) and 10.12(k)(i)(22)
    NYSE Arca Rule 5.4(a) provides, with limited exceptions, that the 
Exchange may prohibit any opening purchase transactions in a series of 
options to the extent it deems such action necessary or appropriate. 
Accordingly, OTP Holders effecting opening transactions in restricted 
series, that are inconsistent with the terms of any such restriction, 
will be considered to be in violation of Rule 5.4(a). The Exchange is 
proposing to incorporate violations related to trading in restricted 
series into the MRP under Exchange Rule 10.12(h)(22).
    The Exchange is proposing to implement a fine of $1,000 for the 
first violation in a rolling twenty-four month period. A second 
violation within the same period would be allocated a $2,500 fine and a 
third violation would be allocated a $5,000 fine. The schedule of fines 
will be included under Rule 10.12(k)(i)(22). Any subsequent violations 
within a rolling twenty-four month period would be subject to formal 
disciplinary proceedings by the Exchange. NYSE Arca believes that 
establishing a rolling twenty-four month period for cumulative 
violations will serve as an effective deterrent to future violative 
conduct.
    NYSE Arca believes that in most cases these violations may be 
handled efficiently through the MRP, however, as with other violations, 
any egregious activity or activity that is believed to be manipulative 
will continue to be subject to formal disciplinary proceedings.
Proposed Rules 10.12(h)(23) and 10.12(k)(i)(23)
    Among other things, Rule 6.6(a) requires each OTP Holder and OTP 
Firm to report to the Exchange the account and position information of 
any customer who, acting alone, or in concert with others, on the 
previous business day maintained aggregate long or short positions on 
the same side of the market of 200 or more contracts of any single 
class of option contracts dealt in on the Exchange. OTP Holders and OTP 
Firms report this information on the Large Option Position Report 
(``LOPR'').
    NYSE Arca is proposing to incorporate violations for failing to 
accurately report position and account information in accordance with 
Rule 6.6(a) into the MRP. The Exchange believes most of these 
violations are inadvertent and technical in nature. Not having LOPR 
reporting violation necessarily subject to formal

[[Page 42726]]

disciplinary proceedings will allow the Exchange to more expeditiously 
process routine violations under the MRP Plan.
    In addition, NYSE Arca, as a member of the Intermarket Surveillance 
Group (``ISG''), as well as certain other self-regulatory 
organizations, have entered into an agreement pursuant to Section 17(d) 
of the Securities Exchange Act of 1934 (as amended) (``17d-2 
Agreement''), which incorporates the surveillance and sanctions of LOPR 
reporting violations. As such, the SROs have agreed that their 
respective rules concerning the reporting of large option positions are 
common rules. As a result, adding LOPR reporting violations to the MRP 
will further result in the consistency of rules among SROs who are 
parties to the 17d-2 Agreement with respect to LOPR reporting 
surveillance.
    The Exchange is proposing to implement a fine of $1,000 for the 
first violation in a rolling twenty-four month period. A second 
violation within the same period would be allocated a $2,500 fine and a 
third violation would be allocated a $5,000 fine. The schedule of fines 
will be included under Rule 10.12(k)(i)(23). Any subsequent violations 
within a rolling twenty-four month period would be subject to formal 
disciplinary proceedings by the Exchange. NYSE Arca believes that 
establishing a rolling twenty-four month period for cumulative 
violations will serve as an effective deterrent to future violative 
conduct.
    NYSE Arca believes that in most cases these LOPR reporting 
violations may be handled efficiently through the MRP, however, as with 
other violations, any egregious activity or activity that is believed 
to be manipulative will continue to be subject to formal disciplinary 
proceedings.
Changes to Rule 10.12(k)(i)(1), Rule 10.12(k)(i)(34), and Rule 
10.12(k)(i)(40)
    NYSE Arca Rule 6.46(a) requires that a Floor Broker handling an 
order is to use due diligence to execute the order at the best price or 
prices available to him, in accordance with the Rules of the Exchange. 
Violators of Rule 6.46(a) are subject to a sanction pursuant to the 
MRP, specifically, Rule 10.12(k)(i)(1). Suggested fines for violations 
of Rule 6.46(a) are presently $1,000 for the first violation in a 
rolling twenty-four month period, $2,500 for a second violation within 
the same period fine and a third violation is subject to a $3,500 fine.
    NYSE Arca Rule 6.47A is designed to ensure that orders are properly 
exposed on the NYSE Arca electronic trading system prior to interaction 
by the initiating firm. The rule states that users may not execute as 
principal orders they represent as agent unless (i) agency orders are 
first exposed on the Exchange for at least one (1) second or (ii) the 
User has been bidding or offering on the Exchange for at least one (1) 
second prior to receiving an agency order that is executable against 
such bid or offer. This rule prevents a user from executing agency 
orders to increase its economic gain from trading against the order 
without first giving other trading interest on the Exchange an 
opportunity to either trade with the agency order or to trade at the 
execution price when the User was already bidding or offering on the 
book. Violators of Rule 6.47A are subject to a sanction pursuant to the 
MRP, specifically, Rule 10.12(k)(i)(34). Suggested fines for violations 
of Rule 6.47A are presently $500 for the first violation in a rolling 
twenty-four month period, $1,000 for a second violation within the same 
period fine and a third violation is subject to a $2,500 fine.
    NYSE Arca Rule 6.75 governs the priority of bids and offers in open 
outcry trading. In general, Rule 6.75 states that the highest bid/
lowest offer shall have priority over all other orders. In the event 
there are two or more bids/offers for the same option contract 
representing the best price and one such bid/offer is displayed in the 
Consolidated Book, such bid shall have priority over any other bid at 
the post. In addition, if two or more bids/offers represent the best 
price and a bid/offer displayed in the Consolidated Book is not 
involved, priority shall be afforded to such bids in the sequence in 
which they are made. Rule 6.75 also contains certain provisions for 
[sic] related to split-price priority and priority of complex orders. 
Violators of any part of Rule 6.75 are subject to a sanction pursuant 
to the MRP, specifically Rule 10.12(k)(i)(40). Suggested fines for 
violations of Rule 6.75 are presently $500 for the first violation in a 
rolling twenty-four month period, $1,000 for a second violation within 
the same period fine and a third violation is subject to a $2,000 fine.
    At this time the Exchange believes the current monetary fine levels 
contained in the MRP, for the above mentioned violations, are 
inadequate, given the serious nature of these rules. In order to act as 
an effective deterrent against future violations, while also serving as 
a just penalty for those who commit these violations, the Exchange 
feels an increase in the fine levels for these three violations is 
warranted. NYSE Arca now proposes fine levels of $1,000 for the first 
violation in a rolling twenty-four month period, $2,500 for a second 
violation within the same period fine and $5,000 for a third violation 
within the same period fine. These fine levels will apply to all three 
types of violations.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \3\ of the 
Act, in general, and furthers the objectives of Section 6(b)(5) \4\ in 
particular in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The proposal is also consistent with Section 6(b)(6) \5\ and 
6(b)(7),\6\ which requires that members and persons associated with 
members are appropriately disciplined for violations of Exchange rules 
and are provided a fair procedure for disciplinary procedures.
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    \5\ 15 U.S.C. 78f(b)(6).
    \6\ 15 U.S.C. 78f(b)(7).
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

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

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

[[Page 42727]]

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2009-70 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-NYSEArca-2009-70. 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 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-NYSEArca-2009-70 and should 
be submitted on or before September 14, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-20241 Filed 8-21-09; 8:45 am]
BILLING CODE 8010-01-P
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