Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Establish the Risk Management Gateway (“RMG”) Service, 46275-46277 [E9-21640]
Download as PDF
<![CDATA[
jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices
Rule 3010(a)(1), (b)(1), and (c)(1)
provide additional clarification that the
supervisory systems and internal
inspections of ETP Holders must be
reasonably designed to achieve
compliance with applicable securities
laws and regulations and with
applicable NYSE Arca rules, including
those relating to the misuse of material
non-public information.
Pursuant to this proposal rule change,
ETP Holders may utilize the flexible,
principles-based approach to modify
their policies and procedures as
appropriate to reflect changes to their
business model, business activities, or
to the securities market itself. An ETP
Holder should be proactive in assuring
that its policies and procedures reflect
the current state of its business and
continue to be reasonably designed to
achieve compliance with applicable
federal securities law and regulations,
and with applicable Exchange rules. In
addition, the Commission notes that,
while information barriers are not
specifically required under the
proposal, an ETP Holder’s business
model or business activities may dictate
that an information barrier or a
functional separation be part of the
appropriate set of policies and
procedures that would be reasonably
designed to achieve compliance with
applicable securities law and
regulations, and with applicable
Exchange rules.
The Commission believes that the
regulatory approach in this proposed
rule change is substantially similar to
the regulatory approach of Nasdaq. In
particular, the NYSE Arca approach,
like the Nasdaq approach, (i)
enumerates the conduct that is
prohibited by its members, including
the potential misuse of material nonpublic information and (ii) provides for
the policies and procedures that must be
reasonably designed to ensure
compliance with the same. In addition,
the Commission notes that the Exchange
has represented that its current
examination procedure for the review of
appropriate supervisory systems and
procedures will remain in place.
The Commission also finds good
cause, pursuant to Section 19(b)(2) of
the Act,19 for approving the proposed
rule change prior to the 30th day after
the date of publication of notice in the
Federal Register. Although this
proposed rule change does not require
that members maintain specificallyprescribed information barriers, it will
continue to mandate that members
establish and maintain a set of policies
and procedures reasonably designed to
19 15
U.S.C. 78s(b)(2).
VerDate Nov<24>2008
17:32 Sep 04, 2009
Jkt 217001
achieve compliance with applicable
securities law and regulations, and with
applicable Exchange rules. As such, the
Exchange is adopting an approach that
is substantially similar to the approach
currently employed by Nasdaq.20
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,21 that the
proposed rule change (SR–NYSEArca–
2009–78) be, and it hereby is, approved
on an accelerated basis.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–21641 Filed 9–4–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60607; File No. SR–
NYSEArca–2009–80]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Establish the Risk
Management Gateway (‘‘RMG’’)
Service
September 1, 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 August
28, 2009, NYSE Arca, Inc. (‘‘NYSE
Arca’’ 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
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to establish
its Risk Management Gateway (‘‘RMG’’)
service. 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.
20 See Securities Exchange Act Release No. 53128
(Jan. 13, 2006), 71 FR 3550 (January 23, 2006)
(adopting Nasdaq IM–2110–2; IM–2110–3; IM–
2110–4, and Rule 3010).
21 15 U.S.C. 78s(b)(2).
22 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
Frm 00196
Fmt 4703
Sfmt 4703
46275
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 Exchange proposes to offer,
through its wholly-owned subsidiary
NYSE Euronext Advanced Trading
Solutions, Inc., the Risk Management
Gateway (‘‘RMG’’) service as a facility 3
of the Exchange, to NYSE Arca Users.4
NYSE Transact Tools, Inc, a division of
the NYSE Euronext Advanced Trading
Solutions Group (‘‘NYXATS’’), owns
RMG.
Traditionally, the customers of an
ETP Holder gave orders to the ETP
Holder who then submitted those orders
to the Exchange on behalf of the
customer. By means of sponsored
access, an ETP Holder may allow its
customers to enter orders directly into
the trading systems of the Exchange as
Sponsored Participants, without the
Sponsoring ETP Holder acting as an
intermediary.5
To facilitate the ability of Sponsoring
ETP Holders to monitor and oversee the
sponsored access activity of their
Sponsored Participants, NYXATS will
offer an order-verification service to
Sponsoring ETP Holders. This service
will act as a risk filter by causing the
orders of Sponsored Participants to pass
through RMG prior to entering the
Exchange’s trading systems for
execution. When a Sponsored
Participant’s order passes through RMG,
3 The term ‘‘facility’’ as defined in Section 3(a)(2)
of the Act, as amended, provides, when used with
respect to an exchange includes its premises,
tangible or intangible property whether on the
premises or not, any rights to the use of such
premises or property or any service thereof for the
purpose of effecting or reporting a transaction on an
exchange (including, among other things, any
system of communication to or from the exchange,
by ticker or otherwise, maintained by or with the
consent of the exchange), and any right of the
exchange to the use of any property or service. See
15 U.S.C. 78c(a)(2).
4 See NYSE Arca Equities Rule 1.1(yy).
5 See NYSE Arca Equities Rule 7.29(b).
E:\FR\FM\08SEN1.SGM
08SEN1
jlentini on DSKJ8SOYB1PROD with NOTICES
46276
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices
RMG software determines whether the
order complies with order criteria that
the ETP Holder has established for that
Sponsored Participant. The order
criteria pertain to such matters as the
size of the order (per order or daily
quantity limits) or the credit limit (per
order or daily value) that the Sponsoring
ETP Holder has established for the
Sponsored Participant. Additional risk
filters may also be selected by the
Sponsoring ETP Holder’s relating to
specific symbols or end users.
If the order is consistent with the
parameters set by the ETP Holder, then
RMG allows the order to continue along
its path to the Exchange’s trading
systems. If the order falls outside of
those parameters, then RMG returns the
order to the Sponsored Participant.
RMG will only return an order to the
Sponsored Participant when the order
fails to comply with the criteria set by
the Sponsoring ETP Holder.
RMG software interacts with orders
only prior to the orders’ entry into the
Exchange’s trading system for
execution. RMG does not have order
execution or trade reporting capabilities
(though it will allow a Sponsoring ETP
Holder to monitor the orders of its
Sponsored Participants). RMG
maintains a record of all messages
relating to Sponsored Participants’
transactions and supplies a copy of such
messages to the applicable Sponsoring
ETP Holder.
The Sponsoring ETP Holder, and not
RMG, will have full responsibility for
ensuring that Sponsored Participants’
sponsored access to the Exchange
complies with the Exchange’s sponsored
access rules. The use of RMG by an ETP
Holder does not automatically
constitute compliance with Exchange
rules.
NYXATS will host RMG software on
NYXATS’ infrastructure. After passing
through RMG software, each order will
enter the NYSE Arca’s Gateway.
The Exchange does not require
Sponsoring ETP Holders to use RMG.
Sponsoring ETP Holders are free to use
a competing risk-management service or
to use none at all. The Exchange will
not provide preferential treatment to
Sponsoring ETP Holders using RMG.
The Exchange proposes to make RMG
available to its Users, as a facility of the
Exchange, pursuant to contractual
arrangements.6 The Exchange believes
that RMG will offer its Users another
option in the efficient risk management
of its Sponsored Participant’s access to
NYSE Arca.
6 The Exchange will file with the Commission all
fees associated with the RMG Service.
VerDate Nov<24>2008
17:32 Sep 04, 2009
Jkt 217001
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 7 of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’), in general, and
furthers the objectives of Section
6(b)(5) 8 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. This service will allow firms to
better monitor the order flow of their
Sponsored Participants.
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: (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, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 9 and Rule 19b–
4(f)(6) thereunder.10
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing.11 However, Rule 19b–
7 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(6).
11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires a self-regulatory organization to
give 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 Exchange has complied with this
requirement.
4(f)(6)(iii) 12 permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest. The
Exchange has requested that the
Commission waive the 30-day operative
delay and designate the proposed rule
change operative upon filing so that the
expected benefits to Exchange Users
from use of the risk-management service
would not be delayed. The Commission
believes that waiving the 30-day
operative delay is consistent with the
protection of investors and the public
interest. The Commission notes that
other self-regulatory organizations have
similar functionality 13 and that this
filing raises no new regulatory issues.
Therefore, the Commission designates
the proposal operative upon filing.14
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
such rule change if it appears to the
Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml ); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2009–80 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–2009–80. 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
8 15
PO 00000
Frm 00197
Fmt 4703
Sfmt 4703
12 Id.
13 See Securities Exchange Act Release Nos.
59354 (February 3, 2009), 74 FR 6683 (February 10,
2009) (SR–NYSE–2008–101); 60236 (July 2, 2009),
74 FR 34068 (July 14, 2009) (SR–BATS–2009–019).
14 For purposes only of waiving the 30-day
operative delay of this proposal, the Commission
has considered the proposed rule’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
E:\FR\FM\08SEN1.SGM
08SEN1
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml ). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room on official business days between
the hours of 10 a.m. and 3 p.m. Copies
of such filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEArca–2009–80 and should be
submitted on or before September 29,
2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–21640 Filed 9–4–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60605; File No. SR–CHX–
2009–13]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Adding
Additional Trading Sessions
jlentini on DSKJ8SOYB1PROD with NOTICES
September 1, 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 August
28, 2009, Chicago Stock Exchange, Inc.
(‘‘CHX’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the CHX. The
Commission is publishing this notice to
15 17
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
VerDate Nov<24>2008
17:32 Sep 04, 2009
Jkt 217001
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
CHX proposes to amend its rules to
create an early trading session beginning
at 6 a.m. CT on days the Exchange is
open for trading and to create a second
Late Trading Session from 3 p.m. to 3:15
p.m. CT. The text of this proposed rule
change is available on the Exchange’s
Web site at (https://www.chx.com) and in
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
CHX 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
CHX has prepared summaries, set forth
in sections A, B, and C below, of the
most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange is proposing to create
an early trading session beginning at 6
a.m. CT on days the Exchange is open
for trading and to create a second Late
Trading Session from 3 p.m. to 3:15
p.m. CT. We believe that CHX
Participants may be interested in
posting bids and offers on the CHX in
an early trading session, as well as in a
late session immediately after the close
of the Regular Session. In order to
facilitate additional trading activity, the
Exchange proposes to create an early
trading session and a second late trading
session, both of which would operate
under the same basic operational and
regulatory framework as the Regular
Trading Session. CHX Participants
could enter orders to buy and sell
eligible securities and those orders
would either be executed or displayed
(or entered without being displayed in
the case of a reserve or undisplayed
order) depending on the status of our
book and the national market system.
The rules applicable to the Regular
Trading Session would govern the Early
and Late Trading Sessions, with the
exception that the Regulation NMS
PO 00000
Frm 00198
Fmt 4703
Sfmt 4703
46277
prohibitions regarding intermarket
trade-throughs and locked and crossed
markets would not be in force. The
current Late Trading Session (which
would be renamed the ‘‘Late Crossing
Session’’) would be available from 3:15
p.m. to 4 p.m. CT and would be
available only to Participants seeking to
execute cross orders.
In furtherance of this initiative, the
Exchange proposes to add or amend the
a [sic] number of applicable CHX rules.
Definitions setting the times of the
respective trading sessions would be
added to Article 1. Due to the risk of
illiquidity, the Exchange does not
believe that it is appropriate to execute
IOC Market Orders during any of the
Extended Hours trading sessions and we
propose to restrict use of that order type
to the Regular Trading Session. We
propose to add a new rule to the Article
8 business conduct rules mandating that
Participants which allow customers to
trade in extended hours trading sessions
to make certain specific risk disclosures
relating to such activity. These risk
disclosures are modeled on the rules of
the BATS Exchange, Inc. regarding
extended hours trading.3 The provisions
of Article 20, Rule 1 setting the time of
the various trading sessions would be
amended to make reference to the Early,
Late Trading and Late Crossing sessions
and define how trading operates during
those sessions. The language in Rule 1
referring to the hours of trading for
specified exchange-traded funds would
be deleted since those securities would
be eligible for trading during the Early
and Late Trading session, rendering the
current text unnecessary. Finally, we
would amend Article 20, Rule 8 to
reflect the manner in which the various
sessions are opened and closed.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act in general,4 and
furthers the objectives of Section 6(b)(5)
in particular,5 in that it is designed to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transaction in securities, to
remove impediments and perfect the
mechanisms of a free and open market,
and, in general, to protect investors and
the public interest. In this case, the
expansion of trading hours through the
creation of an Early Trading Session and
an additional Late Trading Session
would provide participants with
3 BATS Exchange Rule 3.21, Customer
Disclosures.
4 15 U.S.C. 78f(b).
5 15 U.S.C. 78f(b)(5).
E:\FR\FM\08SEN1.SGM
08SEN1
]]>Agencies
[Federal Register Volume 74, Number 172 (Tuesday, September 8, 2009)]
[Notices]
[Pages 46275-46277]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21640]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60607; File No. SR-NYSEArca-2009-80]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change To Establish the
Risk Management Gateway (``RMG'') Service
September 1, 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 August 28, 2009, NYSE Arca, Inc. (``NYSE Arca'' 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 change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 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 establish its Risk Management Gateway
(``RMG'') service. 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 Exchange proposes to offer, through its wholly-owned subsidiary
NYSE Euronext Advanced Trading Solutions, Inc., the Risk Management
Gateway (``RMG'') service as a facility \3\ of the Exchange, to NYSE
Arca Users.\4\ NYSE Transact Tools, Inc, a division of the NYSE
Euronext Advanced Trading Solutions Group (``NYXATS''), owns RMG.
---------------------------------------------------------------------------
\3\ The term ``facility'' as defined in Section 3(a)(2) of the
Act, as amended, provides, when used with respect to an exchange
includes its premises, tangible or intangible property whether on
the premises or not, any rights to the use of such premises or
property or any service thereof for the purpose of effecting or
reporting a transaction on an exchange (including, among other
things, any system of communication to or from the exchange, by
ticker or otherwise, maintained by or with the consent of the
exchange), and any right of the exchange to the use of any property
or service. See 15 U.S.C. 78c(a)(2).
\4\ See NYSE Arca Equities Rule 1.1(yy).
---------------------------------------------------------------------------
Traditionally, the customers of an ETP Holder gave orders to the
ETP Holder who then submitted those orders to the Exchange on behalf of
the customer. By means of sponsored access, an ETP Holder may allow its
customers to enter orders directly into the trading systems of the
Exchange as Sponsored Participants, without the Sponsoring ETP Holder
acting as an intermediary.\5\
---------------------------------------------------------------------------
\5\ See NYSE Arca Equities Rule 7.29(b).
---------------------------------------------------------------------------
To facilitate the ability of Sponsoring ETP Holders to monitor and
oversee the sponsored access activity of their Sponsored Participants,
NYXATS will offer an order-verification service to Sponsoring ETP
Holders. This service will act as a risk filter by causing the orders
of Sponsored Participants to pass through RMG prior to entering the
Exchange's trading systems for execution. When a Sponsored
Participant's order passes through RMG,
[[Page 46276]]
RMG software determines whether the order complies with order criteria
that the ETP Holder has established for that Sponsored Participant. The
order criteria pertain to such matters as the size of the order (per
order or daily quantity limits) or the credit limit (per order or daily
value) that the Sponsoring ETP Holder has established for the Sponsored
Participant. Additional risk filters may also be selected by the
Sponsoring ETP Holder's relating to specific symbols or end users.
If the order is consistent with the parameters set by the ETP
Holder, then RMG allows the order to continue along its path to the
Exchange's trading systems. If the order falls outside of those
parameters, then RMG returns the order to the Sponsored Participant.
RMG will only return an order to the Sponsored Participant when the
order fails to comply with the criteria set by the Sponsoring ETP
Holder.
RMG software interacts with orders only prior to the orders' entry
into the Exchange's trading system for execution. RMG does not have
order execution or trade reporting capabilities (though it will allow a
Sponsoring ETP Holder to monitor the orders of its Sponsored
Participants). RMG maintains a record of all messages relating to
Sponsored Participants' transactions and supplies a copy of such
messages to the applicable Sponsoring ETP Holder.
The Sponsoring ETP Holder, and not RMG, will have full
responsibility for ensuring that Sponsored Participants' sponsored
access to the Exchange complies with the Exchange's sponsored access
rules. The use of RMG by an ETP Holder does not automatically
constitute compliance with Exchange rules.
NYXATS will host RMG software on NYXATS' infrastructure. After
passing through RMG software, each order will enter the NYSE Arca's
Gateway.
The Exchange does not require Sponsoring ETP Holders to use RMG.
Sponsoring ETP Holders are free to use a competing risk-management
service or to use none at all. The Exchange will not provide
preferential treatment to Sponsoring ETP Holders using RMG.
The Exchange proposes to make RMG available to its Users, as a
facility of the Exchange, pursuant to contractual arrangements.\6\ The
Exchange believes that RMG will offer its Users another option in the
efficient risk management of its Sponsored Participant's access to NYSE
Arca.
---------------------------------------------------------------------------
\6\ The Exchange will file with the Commission all fees
associated with the RMG Service.
---------------------------------------------------------------------------
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \7\ of the
Securities Exchange Act of 1934 (the ``Exchange Act''), in general, and
furthers the objectives of Section 6(b)(5) \8\ 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.
This service will allow firms to better monitor the order flow of their
Sponsored Participants.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 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: (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, it has become effective pursuant to Section
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\11\
However, Rule 19b-4(f)(6)(iii) \12\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange has requested that the
Commission waive the 30-day operative delay and designate the proposed
rule change operative upon filing so that the expected benefits to
Exchange Users from use of the risk-management service would not be
delayed. The Commission believes that waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest. The Commission notes that other self-regulatory organizations
have similar functionality \13\ and that this filing raises no new
regulatory issues. Therefore, the Commission designates the proposal
operative upon filing.\14\
---------------------------------------------------------------------------
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to give 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 Exchange has complied with this requirement.
\12\ Id.
\13\ See Securities Exchange Act Release Nos. 59354 (February 3,
2009), 74 FR 6683 (February 10, 2009) (SR-NYSE-2008-101); 60236
(July 2, 2009), 74 FR 34068 (July 14, 2009) (SR-BATS-2009-019).
\14\ For purposes only of waiving the 30-day operative delay of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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-NYSEArca-2009-80 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-2009-80. 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
[[Page 46277]]
only one method. The Commission will post all comments on the
Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml ).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying in the
Commission's Public Reference Room on official business days between
the hours of 10 a.m. and 3 p.m. Copies of such filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSEArca-2009-80 and should be submitted on or before September 29,
2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-21640 Filed 9-4-09; 8:45 am]
BILLING CODE 8010-01-P
