Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Length of Time That Exchange Systems Transmit Odd-Lot Order-by-Order Information to the DMM Unit Algorithm Prior to the Opening Transaction From August 31, 2009 to October 31, 2009, 45500-45502 [E9-21136]
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45500
Federal Register / Vol. 74, No. 169 / Wednesday, September 2, 2009 / Notices
the Section 6(b)(5) 9 requirements that
the rules of an exchange be designed to
promote just and equitable principles of
trade, to prevent fraudulent and
manipulative acts, to remove
impediments to and to perfect the
mechanism for a free and open market
and a national market system, and, in
general, to protect investors and the
public interest. In particular, the
Exchange believes that the elimination
of the notification messages will permit
its systems to operate more efficiently
and the change to the counting period
for equity options classes will provide
more flexibility in the administration of
the rule in a manner consistent with the
existing rule for index and ETF options
classes.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
CBOE does not believe that the
proposed rule change will impose any
burden on competition not necessary or
appropriate in furtherance of the
purposes of the Act.
jlentini on DSKJ8SOYB1PROD with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposal.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change (i)
does not significantly affect the
protection of investors or the public
interest; (ii) does not impose any
significant burden on competition; and
(iii) by its terms, does not 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,
provided that the self-regulatory
organization has given the Commission
written notice of its intent to file 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 proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Act 10 and
Rule 19b–4(f)(6) thereunder.11 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
9 15
U.S.C. 78f(b)(5).
U.S.C. 78s(b)(3)(A).
11 17 CFR 240.19b–4(f)(6).
10 15
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appropriate in the public interest, for
the protection of investors, or otherwise
in furtherance of the purposes of the
Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–CBOE–2009–060 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.
should be submitted on or before
September 23, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–21135 Filed 9–1–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60573; File No. SR–NYSE–
2009–86]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Extending the
Length of Time That Exchange
Systems Transmit Odd-Lot Order-byOrder Information to the DMM Unit
Algorithm Prior to the Opening
Transaction From August 31, 2009 to
October 31, 2009
August 26, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
All submissions should refer to File
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Number SR–CBOE–2009–060. This file
notice is hereby given that, on August
number should be included on the
21, 2009, New York Stock Exchange
subject line if e-mail is used. To help the LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
Commission process and review your
the Securities and Exchange
comments more efficiently, please use
Commission (‘‘Commission’’) the
only one method. The Commission will proposed rule change as described in
post all comments on the Commission’s Items I and II below, which Items have
Internet Web site https://www.sec.gov/
been prepared by the Exchange. The
rules/sro.shtml). Copies of the
Exchange designated the proposal
submission, all subsequent
eligible for immediate effectiveness
amendments, all written statements
pursuant to Section 19(b)(3)(A) of the
with respect to the proposed rule
Act 3 and Rule 19b–4(f)(6) thereunder.4
change that are filed with the
The Commission is publishing this
Commission, and all written
notice to solicit comments on the
communications relating to the
proposed rule change from interested
proposed rule change between the
persons.
Commission and any person, other than
I. Self-Regulatory Organization’s
those that may be withheld from the
Statement of the Terms of Substance of
public in accordance with the
the Proposed Rule Change
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
The Exchange proposes to extend the
the Commission’s Public Reference
length of time that Exchange systems
Room, 100 F Street, NE., Washington,
transmit odd-lot order-by-order
DC 20549, on official business days
information to the DMM unit algorithm
between the hours of 10 a.m. and 3 p.m.
prior to the opening transaction from
Copies of such filing also will be
August 31, 2009 to October 31, 2009.
available for inspection and copying at
The text of the proposed rule change is
the principal office of the CBOE. All
available at the Exchange, the
comments received will be posted
Commission’s Public Reference Room,
without change; the Commission does
and https://www.nyse.com.
not edit personal identifying
information from submissions. You
12 17 CFR 200.30–3(a)(12).
should submit only information that
1 15 U.S.C. 78s(b)(1).
you wish to make available publicly. All
2 17 CFR 240.19b–4.
submissions should refer to File
3 15 U.S.C. 78s(b)(3)(A).
Number SR–CBOE–2009–060 and
4 17 CFR 240.19b–4(f)(6).
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Federal Register / Vol. 74, No. 169 / Wednesday, September 2, 2009 / Notices
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 the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
New York Stock Exchange LLC
(‘‘NYSE’’ or the ‘‘Exchange’’) proposes
to extend the length of time that
Exchange systems transmit odd-lot
order-by-order information to the DMM
unit algorithm prior to the opening
transaction from August 31, 2009 to
October 31, 2009.
The Exchange notes that parallel
changes are proposed to be made to the
rules of NYSE Amex LLC (formerly the
American Stock Exchange).5
Background
On October 24, 2008, the Securities
and Exchange Commission (‘‘SEC’’ or
‘‘Commission’’) approved the operation
of a pilot for the Exchange’s New Market
Model (‘‘Pilot’’).6 As part of that filing,
the Exchange explained that although
the Designated Market Maker (‘‘DMM’’)
would no longer receive order-by-order
information, there would continue to be
certain times when human interaction
was essential to market quality and
maintaining a fair and orderly market.
Currently the DMM is responsible for
facilitating the opening transaction and
ultimately determines the price,7 and
5 See
SR–NYSE Amex–2009–58.
Securities Exchange Act Release No. 58845
(October 24, 2008), 73 FR 64379 (October 29, 2008)
(SR–NYSE–2008–46) (approving certain rules to
operate as a pilot scheduled to end October 1,
2009).
7 In an opening and reopening trade, NYSE’s
Display Book® (‘‘Display Book’’) will verify that all
interest that must be executed in the opening or
reopening trade can be executed at the price chosen
by the DMM. If all the interest that must be
executed in the transaction cannot be executed at
that price, the Display Book will block the
execution. In addition, when executing blocks
(10,000 shares or more or value of $200,000 or
more), trading out of a gap quote situation or an
Liquidity Replenishment Point (‘‘LRP’’) that locks
or crossed the market, the Display Book may adjust
the execution price if there is enough interest on the
jlentini on DSKJ8SOYB1PROD with NOTICES
6 See
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executes the orders at that price to open
the trading in his or her assigned
securities. In order to effect a fair and
orderly opening transaction, the
individual DMM is provided aggregate
order information.8 DMMs have access
to aggregate order information as it
pertains to round-lot and odd-lot orders;
however, the DMM unit algorithm
receives odd-lot information on an
order-by-order basis prior to the opening
transaction. In order for the DMM unit
algorithm to effectively facilitate an
opening transaction, the DMM unit
algorithm is provided odd-lot
information prior to the opening.
Constraints inherent to the Odd-lot
System require that odd-lot information
be transmitted to the DMM unit
algorithm on an order-by-order basis
prior to the opening. As such, prior to
the opening, Exchange systems transmit
to the DMM unit algorithm odd-lot
order information 9 excluding odd-lot
cancellations, Stop odd-lot orders and
prior day Good ’til Cancel (‘‘GTC’’)
orders.10 Once the security is opened,
Exchange systems do not provide any
order-by-order odd-lot information to
the DMM unit algorithm.
Proposed Amendment to NYSE Rule
104
The Exchange anticipated that the
work required to modify its systems to
transmit aggregate odd-lot information
to DMM unit algorithms would have
been completed by August 31, 2009;
however, after the completion of several
system modifications it is clear that the
Exchange will require an extension to
October 31, 2009, in order to complete
these particular enhancements.
Since the commencement of the Pilot,
the Exchange has completed several
modifications to remove and enhance
legacy systems. These enhancements are
necessary to provide the foundation
needed for Exchange systems to
Display Book to complete the transaction at a better
price.
The Display Book® is an order management and
execution facility. The Display Book receives and
displays orders to the DMM, contains order
information, and provides a mechanism to execute
and report transactions and publish the results to
the Consolidated Tape. The Display Book is
connected to a number of other Exchange systems
for the purposes of comparison, surveillance, and
reporting information to customers and other
market data and national market systems.
8 See NYSE Rule 104(a)(2).
9 See NYSE Rule 104 Supplementary Material .05.
10 Odd-lot cancellations and GTC odd-lot orders
are not included because of system constraints.
Stop odd-lot orders are elected by the opening
transaction which in turn commences the execution
of orders in the Odd-lot System. The Stop odd-lot
orders elected by the opening transaction are
executed in the Odd-lot system pursuant to the rule
governing odd-lot executions. See NYSE Rule
124(e).
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45501
transmit aggregate odd-lot information
to the DMM unit algorithm prior to the
opening transaction.11 The Exchange
continues to enhance its systems to
create a strong platform for
technological growth that offers its
customers the most comprehensive set
of trading technology solutions to meet
their needs and expectations. In
furtherance of this goal, the Exchange
must either upgrade or replace in its
entirety legacy systems that accept,
manage, execute and report executions.
The extensive nature of the
modifications requires the Exchange to
progressively implement these systemic
changes on a security by security basis
as it gains experience with the new
technology until the new technology is
operative in all securities traded on the
Floor. Consequently, the modifications
have progressed at a slower pace than
initially anticipated. The next Exchange
technology release will modify
Exchange systems such that odd-lot
information will be provided to the
Display Book in aggregate prior to the
opening transaction. Display Book in
turn will provide aggregate order
information to the DMM unit algorithm
prior to the opening transaction to
facilitate the ability of the DMM unit
algorithm to electronically open trading
in certain securities. It is anticipated
that these modifications will be
completed no later than October 31,
2009.
Given the above, the Exchange
requests an extension to October 31,
2009, to complete the system
modifications required to transmit
aggregate odd-lot information to the
DMM unit algorithms prior to the
opening transaction.
2. Statutory Basis
The basis under the Securities
Exchange Act of 1934 (the ‘‘Act’’) 12 for
these proposed rule changes is the
requirement under Section 6(b)(5) 13
that an Exchange have rules that are
designed to promote just and equitable
principles of trade, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest. The proposed rule
change supports these principles and
11 See Securities and Exchange Act Release No.
59592 (March 17, 2009), 74 FR 12417 (March 24,
2009) (SR–NYSE–2009–29) (Filing to, among other
things, replace references to specific NYSE systems
that perform particular functions and replace it
with the phrase ‘‘Exchange systems’’ in order to
keep pace with the enhancements to its
technology).
12 15 U.S.C. 78a.
13 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 74, No. 169 / Wednesday, September 2, 2009 / Notices
serves to protect the investor and the
public interest in that it seeks to
continue providing DMM unit
algorithms with the order by order oddlot information required to facilitate the
timely opening of securities on the
Exchange until Exchange systems can be
modified to provide such information in
an aggregated format.
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
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the 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 prior to 30 days from the date
on which it was filed, or such shorter
time as the Commission may designate,
if consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 14 and Rule 19b–4(f)(6)
thereunder.15
The Exchange has requested the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately 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 provide the DMM unit
algorithms with order-by-order odd-lot
information prior to the opening
transaction without interruption until
October 31, 2009, when the Exchange
anticipates necessary modifications to
its systems will be completed.
jlentini on DSKJ8SOYB1PROD with NOTICES
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.
15 17
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16:56 Sep 01, 2009
Jkt 217001
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–2009–86 and should
be submitted on or before September 23,
2009.
IV. Solicitation of Comments
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–21136 Filed 9–1–09; 8:45 am]
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
No written comments were solicited
or received with respect to the proposed
rule change.
14 15
Therefore, the Commission designates
the proposal operative upon filing.16
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
• 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–2009–86 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–2009–86. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room, 100 F Street, NE., Washington,
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
Copies of such filing also will be
available for inspection and copying at
16 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
PO 00000
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BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60571; File No. SR–BX–
2009–051]
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change To Eliminate
Flash and Cancel Orders
August 26, 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 August
21, 2009, NASDAQ OMX BX, Inc. (the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I and II
below, which Items have been prepared
by the Exchange. The Exchange has
designated the proposed rule change as
constituting a non-controversial rule
change under Section 19(b)(3)(A) of the
Act 3 and Rule 19b–4(f)(6) thereunder,4
which renders the proposal 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 eliminate
Flash and Cancel Orders. The Exchange
has filed this proposal under Exchange
Act Rule 19b–4(f)(6) 5 and, as such, the
proposal is immediately effective. The
17 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
5 17 CFR 240.19b–4(f)(6).
1 15
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]]>Agencies
[Federal Register Volume 74, Number 169 (Wednesday, September 2, 2009)]
[Notices]
[Pages 45500-45502]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21136]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60573; File No. SR-NYSE-2009-86]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Extending the Length of Time That Exchange Systems Transmit Odd-Lot
Order-by-Order Information to the DMM Unit Algorithm Prior to the
Opening Transaction From August 31, 2009 to October 31, 2009
August 26, 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 August 21, 2009, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. The Exchange
designated the proposal eligible for immediate effectiveness pursuant
to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6)
thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the length of time that Exchange
systems transmit odd-lot order-by-order information to the DMM unit
algorithm prior to the opening transaction from August 31, 2009 to
October 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.
[[Page 45501]]
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') proposes
to extend the length of time that Exchange systems transmit odd-lot
order-by-order information to the DMM unit algorithm prior to the
opening transaction from August 31, 2009 to October 31, 2009.
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-NYSE Amex-2009-58.
---------------------------------------------------------------------------
Background
On October 24, 2008, the Securities and Exchange Commission
(``SEC'' or ``Commission'') approved the operation of a pilot for the
Exchange's New Market Model (``Pilot'').\6\ As part of that filing, the
Exchange explained that although the Designated Market Maker (``DMM'')
would no longer receive order-by-order information, there would
continue to be certain times when human interaction was essential to
market quality and maintaining a fair and orderly market.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 58845 (October 24,
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) (approving
certain rules to operate as a pilot scheduled to end October 1,
2009).
---------------------------------------------------------------------------
Currently the DMM is responsible for facilitating the opening
transaction and ultimately determines the price,\7\ and executes the
orders at that price to open the trading in his or her assigned
securities. In order to effect a fair and orderly opening transaction,
the individual DMM is provided aggregate order information.\8\ DMMs
have access to aggregate order information as it pertains to round-lot
and odd-lot orders; however, the DMM unit algorithm receives odd-lot
information on an order-by-order basis prior to the opening
transaction. In order for the DMM unit algorithm to effectively
facilitate an opening transaction, the DMM unit algorithm is provided
odd-lot information prior to the opening. Constraints inherent to the
Odd-lot System require that odd-lot information be transmitted to the
DMM unit algorithm on an order-by-order basis prior to the opening. As
such, prior to the opening, Exchange systems transmit to the DMM unit
algorithm odd-lot order information \9\ excluding odd-lot
cancellations, Stop odd-lot orders and prior day Good 'til Cancel
(``GTC'') orders.\10\ Once the security is opened, Exchange systems do
not provide any order-by-order odd-lot information to the DMM unit
algorithm.
---------------------------------------------------------------------------
\7\ In an opening and reopening trade, NYSE's Display
Book[supreg] (``Display Book'') will verify that all interest that
must be executed in the opening or reopening trade can be executed
at the price chosen by the DMM. If all the interest that must be
executed in the transaction cannot be executed at that price, the
Display Book will block the execution. In addition, when executing
blocks (10,000 shares or more or value of $200,000 or more), trading
out of a gap quote situation or an Liquidity Replenishment Point
(``LRP'') that locks or crossed the market, the Display Book may
adjust the execution price if there is enough interest on the
Display Book to complete the transaction at a better price.
The Display Book[supreg] is an order management and execution
facility. The Display Book receives and displays orders to the DMM,
contains order information, and provides a mechanism to execute and
report transactions and publish the results to the Consolidated
Tape. The Display Book is connected to a number of other Exchange
systems for the purposes of comparison, surveillance, and reporting
information to customers and other market data and national market
systems.
\8\ See NYSE Rule 104(a)(2).
\9\ See NYSE Rule 104 Supplementary Material .05.
\10\ Odd-lot cancellations and GTC odd-lot orders are not
included because of system constraints. Stop odd-lot orders are
elected by the opening transaction which in turn commences the
execution of orders in the Odd-lot System. The Stop odd-lot orders
elected by the opening transaction are executed in the Odd-lot
system pursuant to the rule governing odd-lot executions. See NYSE
Rule 124(e).
---------------------------------------------------------------------------
Proposed Amendment to NYSE Rule 104
The Exchange anticipated that the work required to modify its
systems to transmit aggregate odd-lot information to DMM unit
algorithms would have been completed by August 31, 2009; however, after
the completion of several system modifications it is clear that the
Exchange will require an extension to October 31, 2009, in order to
complete these particular enhancements.
Since the commencement of the Pilot, the Exchange has completed
several modifications to remove and enhance legacy systems. These
enhancements are necessary to provide the foundation needed for
Exchange systems to transmit aggregate odd-lot information to the DMM
unit algorithm prior to the opening transaction.\11\ The Exchange
continues to enhance its systems to create a strong platform for
technological growth that offers its customers the most comprehensive
set of trading technology solutions to meet their needs and
expectations. In furtherance of this goal, the Exchange must either
upgrade or replace in its entirety legacy systems that accept, manage,
execute and report executions.
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\11\ See Securities and Exchange Act Release No. 59592 (March
17, 2009), 74 FR 12417 (March 24, 2009) (SR-NYSE-2009-29) (Filing
to, among other things, replace references to specific NYSE systems
that perform particular functions and replace it with the phrase
``Exchange systems'' in order to keep pace with the enhancements to
its technology).
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The extensive nature of the modifications requires the Exchange to
progressively implement these systemic changes on a security by
security basis as it gains experience with the new technology until the
new technology is operative in all securities traded on the Floor.
Consequently, the modifications have progressed at a slower pace than
initially anticipated. The next Exchange technology release will modify
Exchange systems such that odd-lot information will be provided to the
Display Book in aggregate prior to the opening transaction. Display
Book in turn will provide aggregate order information to the DMM unit
algorithm prior to the opening transaction to facilitate the ability of
the DMM unit algorithm to electronically open trading in certain
securities. It is anticipated that these modifications will be
completed no later than October 31, 2009.
Given the above, the Exchange requests an extension to October 31,
2009, to complete the system modifications required to transmit
aggregate odd-lot information to the DMM unit algorithms prior to the
opening transaction.
2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Act'')
\12\ for these proposed rule changes is the requirement under Section
6(b)(5) \13\ that an Exchange have rules that are designed to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system and, in general, to protect investors and the public interest.
The proposed rule change supports these principles and
[[Page 45502]]
serves to protect the investor and the public interest in that it seeks
to continue providing DMM unit algorithms with the order by order odd-
lot information required to facilitate the timely opening of securities
on the Exchange until Exchange systems can be modified to provide such
information in an aggregated format.
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\12\ 15 U.S.C. 78a.
\13\ 15 U.S.C. 78f(b)(5).
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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
Because the 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 prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-
4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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.
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The Exchange has requested the Commission to waive the 30-day
operative delay so that the proposal may become operative immediately
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 provide the DMM
unit algorithms with order-by-order odd-lot information prior to the
opening transaction without interruption until October 31, 2009, when
the Exchange anticipates necessary modifications to its systems will be
completed. Therefore, the Commission designates the proposal operative
upon filing.\16\
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\16\ For purposes only of waiving the 30-day operative delay,
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. 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-2009-86 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-2009-86. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for inspection and
copying in the Commission's Public Reference Room, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2009-86 and should be
submitted on or before September 23, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-21136 Filed 9-1-09; 8:45 am]
BILLING CODE 8010-01-P
