Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto Amending Certain Provisions of Exchange Rule 1600 To Align the Rule With the Technology and Functionality of the NYBX Facility in Relation to an NYBX Order's Ability To Interact With Non-Displayed Contra Side Liquidity in the NYSE Display Book® and To Clarify the Processing of NYBX Orders That Have An Optional, User-Defined Minimum Triggering Volume, 46632-46636 [E9-21711]
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46632
Federal Register / Vol. 74, No. 174 / Thursday, September 10, 2009 / Notices
The local SBA district office may be
found at https://www.sba.gov/
localresources/.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60618; File No. SR–NYSE–
2009–82]
Authority: 15 U.S.C. 636(a)(25) and 13
CFR 120.3.
Walter C. Intlekofer,
Acting Director, Office of Financial
Assistance.
[FR Doc. E9–21891 Filed 9–9–09; 8:45 am]
BILLING CODE 8025–01–P
SECURITIES AND EXCHANGE
COMMISSION
[File No. 500–1]
In the Matter of Super Nova Resources,
Inc.; Order of Suspension of Trading
September 8, 2009.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Super Nova
Resources, Inc. because questions have
arisen regarding the trading in the
company’s stock, and the accuracy and
adequacy of publicly available
information concerning, among other
things, the company’s business
operations.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed company is
suspended for the period from 9:30 a.m.
EDT, on September 8, 2009, through
11:59 p.m. EDT, on September 21, 2009.
By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9–21924 Filed 9–8–09; 11:15 am]
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BILLING CODE 8010–01–P
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change and
Amendment No. 1 Thereto Amending
Certain Provisions of Exchange Rule
1600 To Align the Rule With the
Technology and Functionality of the
NYBX Facility in Relation to an NYBX
Order’s Ability To Interact With NonDisplayed Contra Side Liquidity in the
NYSE Display Book® and To Clarify the
Processing of NYBX Orders That Have
An Optional, User-Defined Minimum
Triggering Volume
September 3, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on August
12, 2009, New York Stock Exchange
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the self-regulatory
organization. The Exchange has
designated the proposed rule change
‘‘non-controversial’’ and eligible for
immediate effectiveness pursuant to
Section 19(b)(3)(A)(iii) of the Act 4 and
Rule 19b–4(f)(6) thereunder.5 On
September 1, 2009, the Exchange filed
Amendment No. 1.6 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
certain provisions of Exchange Rule
1600 (New York Block ExchangeSM)
(‘‘NYBXSM’’ or the ‘‘facility’’) to align
the Rule with the technology and
functionality of the NYBX facility in
relation to an NYBX order’s ability to
interact with non-displayed contra side
liquidity in the NYSE Display Book®
(‘‘Display Book’’ or ‘‘DBK’’) and to
clarify the processing of NYBX orders
that have an optional, user-defined
Minimum Triggering Volume (‘‘MTV’’).
1 15
U.S.C. 78s(b)(1).
U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(3)(A)(iii).
5 17 CFR 240.19b–4(f)(6).
6 Amendment No. 1 added clarifying language to
the proposed rule text and made corresponding
changes to the proposal.
2 15
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The proposed amendment also includes
clarifying language, additional
definitions of terms found in Regulation
NMS 7 and adds technical changes to
correct the numbering of certain
subsections. This Amendment No. 1 of
SR–NYSE–2009–82 replaces the
previous filing in its entirety. The text
of the proposed rule change is available
at the Exchange, the Commission’s
Public Reference Room, and https://
www.nyse.com.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
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
The NYBX is an electronic facility of
the Exchange that provides continuous
execution of all NYBX orders in NYSElisted securities with the aggregate of all
orders in the NYBX facility and
displayed and non-displayed orders in
the DBK. Orders entered into the NYBX
facility are non-displayed orders. NYBX
orders may be subject to certain
conditions that can affect their ability to
be executed. One type of condition is a
minimum size desired for execution,
known as the MTV. Executions on the
NYBX will not trade through a protected
quotation of an automated trading
center.
The Exchange seeks to amend
Exchange Rule 1600 to clarify the
functionality of the NYBX facility in
relation to an NYBX order’s ability to
execute with aggregated non-displayed
contra side liquidity in the DBK. An
automated market data feed into the
NYBX facility enables the facility to
read non-displayed liquidity in the DBK
(‘‘hidden data feed’’) and triggers the
7 The terms ‘‘protected quotations’’ and ‘‘trade
through’’ have the same meaning as defined in Rule
600 of Regulation NMS. These terms have been
added to the definition section of Rule 1600 in the
proposed amendment (see proposed subsections
(b)(2)(F) and (b)(2)(I)). The proposed rule change
does not impact the facility’s consideration of all
protected quotations of automated trading centers.
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routing of NYBX orders to the DBK
whenever the MTV can be met by the
aggregate of displayed and nondisplayed contra side liquidity as
described in subsection (c)(3)(B)(ii)(I) of
Rule 1600 (‘‘MTV Calculations’’). It is
important to note that unless the NYBX
order’s MTV can be met, an NYBX order
will not attempt to execute with
available contra side liquidity.
In addition to the non-displayed
liquidity of reserve orders 8 entered on
the NYSE, the non-displayed liquidity
in the DBK includes the Designated
Market Maker’s (‘‘DMM’’) Capital
Commitment Schedule (‘‘CCS’’).9 CCS is
a liquidity schedule established at
various price points at which the DMM
is willing to interact with incoming
contra side orders and possibly provide
price improvement to orders in the
DBK, including NYBX orders that are
routed to the DBK. DMMs commit this
predetermined CCS interest through a
DMM algorithm.
Because the hidden data feed cannot
read the CCS interest in the DMMs’
algorithms, CCS interest is not
considered in the MTV calculation.
Nevertheless, when the MTV is
otherwise met, CCS interest may
attempt to execute with NYBX orders
when they enter the DBK at any price
point. CCS interest may attempt to
execute with an NYBX order each time
the order, whether the originating order
or a residual order, is routed from the
NYBX facility to the DBK. The
interaction of NYBX orders with DBK
contra side liquidity and available
contra side CCS interest is discussed
more fully below (see also Example Nos.
1A and 4).
To enable an NYBX order to execute
with non-displayed liquidity in the
DBK, the NYBX facility has been
configured to automatically over-size
NYBX orders that are routed from the
facility to the DBK, thereby allowing
such orders to attempt to execute with
available contra side displayed and nondisplayed liquidity in the DBK and with
available contra side CCS interest.
‘‘Over-sizing’’ is an automated function
whereby the NYBX facility sends the
entire NYBX order to the DBK. This
occurs when the MTV is met and the
DBK has available contra side liquidity
and there is no better priced contra side
liquidity in the NYBX facility.
The amendment will also clarify that
an unrestricted MTV calculation, as
described in subsection (c)(3)(B)(ii)(I) of
8 See NYSE Rule 13 for a definition of ‘‘reserve
orders.’’
9 See Securities Exchange Act Release No. 58845
(October 24, 2008) 73 FR 64379 (October 29, 2008)
(SR–NYSE–2008–46) (‘‘The New Market Model’’).
Specifically, see NYSE Rule 1000(d)(i).
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Rule 1600 (‘‘MTV Calculations’’), will
not include the available contra side
liquidity in automated trading centers
unless the execution of the NYBX order
may potentially trade through a
protected quotation in the NYBX facility
or in the DBK. Therefore, even if a
customer designated an NYBX order
with an unrestricted MTV, the facility
will not consider available contra side
liquidity in other automated trading
centers when calculating the MTV
unless the execution of that order may
potentially trade through a protected
quotation.
NYBX Compliance With Regulation
NMS
NYBX orders will not trade through a
Protected Bid or Protected Offer except
as allowed by Rule 611 of Regulation
NMS. If the execution of an NYBX order
may potentially trade through an
automated trading center, the NYBX
facility will immediately send routing
instructions to the NYSE Routing
Broker 10 (‘‘Routing Broker’’) and the
Routing Broker will immediately route
the applicable volume (e.g., the price
and size of the displayed quotation) to
the automated trading center to attempt
to execute with applicable protected
quotations. If the order is larger than the
amount routed to the automated trading
center, the portion of the NYBX order
that was not routed to the automated
trading center is sent to the DBK to
attempt to execute with displayed and
non-displayed contra side liquidity in
the DBK and with available contra side
CCS interest. The routing of orders from
the NYBX facility to automated trading
centers, via the Routing Broker, occurs
almost simultaneously with the sending
of orders to the DBK or executions of
orders in the NYBX facility.
Also, when there is a potential trade
through of a protected quotation and the
applicable portion of an NYBX order is
routed to the automated trading center
in compliance with Regulation NMS,
the NYBX facility will not provide price
improvement, as a delay in routing may
cause an inadvertent trade through of
protected quotations should the
quotations change in the meantime.
NYBX Order Execution Sequence
NYBX orders will first attempt to
execute against all available contra side
liquidity in the DBK (displayed and
non-displayed) and with any available
contra side CCS interest at a price that
10 See NYSE Rule 17(c) (‘‘Operation of Routing
Broker’’). As per Rule 17(c), the NYBX facility will
use the Routing Broker to send NYBX orders to the
DBK and to automated trading centers pursuant to
Regulation NMS when attempting to execute such
orders.
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46633
is equal to or better than the limit price
of the NYBX order. The NYBX order
will be oversized and routed to the DBK
at a price equal to: (a) The best price of
contra side liquidity available in the
NYBX Facility, or (b) the best price of
contra side liquidity available in the
DBK, whichever price is superior, and
attempt to execute in the DBK until the
order is exhausted or until the available
contra side liquidity in the DBK is
exhausted.
However, when the NYBX facility has
available contra side liquidity at a price
at or within the NBBO and at a price
that is better than all displayed and nondisplayed liquidity in the DBK, or when
there is no displayed or non-displayed
contra side liquidity in the DBK, the
order will attempt to execute in the
NYBX facility at such price until the
order is exhausted or until the available
contra side liquidity in the facility is
exhausted or until the order is cancelled
or until the order reaches a price point
that is available in the DBK.
As described in more detail above, the
execution of NYBX orders will comply
with Regulation NMS.
In each of the aforementioned trading
situations, if the order at a particular
price point is not exhausted in the DBK,
the residual order will be sent back to
the NYBX facility where it will attempt
to execute with available contra side
liquidity in the DBK, the NYBX facility,
and the protected quotations of other
automated trading centers, in the same
sequence described above, until the
order is exhausted or until the available
contra side liquidity is exhausted or
until the order is cancelled.
Examples: The following examples will
demonstrate how NYBX orders are
processed.
NYBX Snapshot
NYBX: (Sell Orders)
500 shares @ $19.99.
500 shares @ $20.00.
500 shares @ $20.01.
500 shares @ $20.04.
PHLX: (Sell Orders)
400 shares @ $20.00 (NBBO).
DBK: (Sell Orders)
Displayed:
600 shares @ $20.00.
300 shares @ $20.01.
300 shares @ $20.05.
Non-Displayed: (Sell orders)
500 shares @ $19.99.
500 Shares @ $20.00.
Example No. 1: A buy limit order of 2,500
shares at $20.00, with an unrestricted MTV
of 2,500 shares, enters the NYBX facility. The
MTV of 2,500 shares is met by the aggregate
of orders in the NYBX facility and the DBK
at $19.99 (500 + 500) and @ $20.00 (500 +
600 + 500) adding up to 2,600 shares. Orders
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in PHLX were not necessary to meet the
MTV.
The NYBX facility routes and executes the
order in the following sequence:
—Route 2,500 shares to DBK @ $19.99,
execute 500 shares leaving 2,000 shares.
—Execute 500 shares in NYBX @ $19.99
leaving 1,500 shares.
—Route 1,500 shares to DBK @ $20.00,
execute 1,100 shares leaving 400 shares.
—Execute 400 shares in NYBX @ $20.00
thereby exhausting the order.
As the example shows, orders will
first attempt to execute with contra side
liquidity in the DBK when the price is
equal to or better than the price in the
NYBX. When the NYBX facility has
available contra side liquidity at a price
within the NBBO and at a price that is
better than all liquidity in the DBK, or
when there is no available contra side
liquidity in the DBK, the order will
attempt to execute in the NYBX facility
at that price.
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Example No. 1A: Using the same scenario
in Example No. 1 above, a buy limit order of
2,500 shares @ $20.00, with an unrestricted
MTV of 2,500 shares, enters the NYBX
facility. The NYBX facility routes and
executes the order in the following sequence:
—Route 2,500 shares to DBK @ $19.99,
execute 500 shares leaving 2,000 shares.
—Upon presentation of the order in the DBK,
the DMM Capital Commitment Schedule
algorithm (‘‘CCS’’) determines to execute
1,000 additional shares @ $19.99 leaving
1,000 shares.
—Execute 500 shares in NYBX @ $19.99
leaving 500 shares.
—Route 500 shares to DBK @ $20.00, execute
500 shares in DBK thereby exhausting the
order.
As the example shows, when NYBX
orders are routed to the DBK, such
NYBX orders will have an opportunity
to attempt to execute with CCS interest.
If a residual NYBX order remains after
partial execution in the DBK at a
particular price point, the residual order
will be sent back to the NYBX facility
for further execution in the NYBX
facility, the DBK or with protected
quotations of automated trading centers.
Thus, if the DBK acquires additional
contra side liquidity, displayed or nondisplayed, that is eligible for execution
against the NYBX order, the NYBX
facility will route the residual order to
the DBK. This NYBX residual order, for
all intents and purposes, appears as a
new order to the DBK, and such NYBX
order will have another opportunity to
attempt to execute with available contra
side liquidity in the DBK and with
available contra side CCS interest.
Therefore, each time an NYBX order,
original or residual, is routed to the DBK
at a particular price point, such order
will have an opportunity to attempt to
execute with displayed and non-
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displayed contra side liquidity in the
DBK and with available contra side CCS
interest.
Example No. 2: A buy limit order for 3,000
shares @ $20.00, with an unrestricted MTV
of 3,000 shares, enters the NYBX. The MTV
is not met because the aggregate of available
contra side liquidity in the DBK and in the
NYBX only adds up to 2,600 shares (1,000 @
$19.99 and 1,600 at $20.00). Because there
will be no trade through at the PHLX in this
example, the 400 PHLX shares will not be
counted in the MTV calculation. Therefore,
the MTV is not met and because the MTV is
not met, there will be no execution of the
NYBX order.
Example No. 3: A buy limit order for 3,500
shares @ $20.01, with an unrestricted MTV
of 3,500 shares, enters the NYBX facility. In
this example, the MTV is met by the
aggregate liquidity at $19.99, $20.00 and
$20.01 on the DBK, the NYBX and the PHLX
(1000 + 2000 + 800 = 3,800). The NYBX
routes and executes the order in the
following sequence:
—Route 400 shares to PHLX @ $20.00,
execute 400 shares leaving 3,100 shares.
—Route 3,100 shares to DBK @ $19.99,
execute 500 shares leaving 2,600 shares.
—Execute 500 shares in NYBX @ $19.99
leaving 2,100 shares.
—Route 2,100 shares to DBK @ $20.00,
execute 1,100 shares leaving 1,000 shares.
—Execute 500 shares in NYBX @ $20.00
leaving 500 shares.
—Route 500 shares to DBK @ $20.01, execute
300 shares leaving 200 shares.
—Execute 200 shares in NYBX @ $20.01
thereby exhausting the order.
The liquidity in the PHLX is included
in the MTV calculation because, as the
example demonstrates, the execution of
the order may potentially trade through
the protected quotations. The NYBX
facility is programmed to route the
applicable volume to automated trading
centers whenever one or more
successive price points of NYBX and
DBK contra side liquidity, included in
the MTV calculation, are inferior to
prices of protected quotations in the
automated trading center(s), thereby
avoiding a potential trade through of
any protected quotations. The NYBX
snapshot of the entire market enables
the NYBX facility to determine if there
is a potential trade through of a
protected quotation, and if so, the
facility immediately routes the
applicable shares to the automated
trading center(s) in compliance with
Regulation NMS. This is done even if
the price of the shares routed to the
automated trading center(s) is inferior to
other successive price points in the
NYBX facility and in the DBK. As
discussed above, the facility will not
wait for price improvement
opportunities when routing out shares
in compliance with Regulation NMS as
any routing delay may cause an
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inadvertent trade through of protected
quotations.
In Example No. 3 the NYBX routed
400 shares to the PHLX at $20.00 to
comply with Regulation NMS. This
routing to PHLX occurred almost
simultaneously with the routing of
3,100 shares to DBK at $19.99, executing
500 shares and leaving 2,600 shares. As
the order sequencing in Example No. 3
demonstrates, the remaining 2,600
shares then executes with all better
priced contra side liquidity in the DBK
and the NYBX facility. This example
also demonstrates how the NYBX
facility attempts to execute available
contra side liquidity at each successive
price point in the DBK and in the NYBX
facility (i.e., ‘‘walking the book’’).
Example No. 3A: In the same example as
Example No. 3 above, if the MTV calculation
was ‘‘restricted’’ to include only the available
contra side liquidity in the DBK and the
NYBX and not contra side liquidity in the
PHLX (1000 + 1600 + 800 = 3,400), the MTV
would not be met and the order would not
be executed.
Example No. 4: A buy limit order of 4,500
shares @ $20.05, with no MTV, enters the
NYBX facility. The NYBX routes and
executes the order in the following sequence:
—Route 400 shares to PHLX @ $20.00,
execute 400 shares leaving 4,100 shares.
—Route 4,100 shares to DBK @ $19.99,
execute 500 shares leaving 3,600 shares.
—Execute 500 shares in NYBX @ $19.99
leaving 3,100 shares.
—Route 3,100 shares to DBK @ $20.00,
execute 1,100 shares leaving 2,000 shares.
—Execute 500 shares in NYBX @ $20.00
leaving 1,500 shares.
—Route 1,500 shares to DBK @ $20.01,
execute 300 shares leaving 1,200 shares.
—Execute 500 shares in NYBX @ $20.01
leaving 700 shares.
—Route 700 shares to DBK @ $20.04, execute
0 leaving 700 shares.
—Execute 500 shares in NYBX @ $20.04
leaving 200 shares.
—Route 200 shares to DBK @ $20.05, execute
200 shares thereby exhausting the order.
As explained earlier in Example No.
3, when there is a potential trade
through of a protected quotation, the
facility immediately routes the
applicable volume to the automated
trading center(s) in compliance with
Regulation NMS. In Example No. 4 the
NYBX routed 400 shares to the PHLX at
$20.00 to comply with Regulation NMS.
This routing to PHLX occurred almost
simultaneously with the routing of
4,100 shares to DBK at $19.99, executing
500 shares and leaving 3,600 shares.
The facility does not provide price
improvement to the shares that are
routed to the automated trading
center(s) as latency and interaction with
hidden CCS interest could compromise
the facility’s ability to comply with
Regulation NMS.
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As Example No. 4 demonstrates,
provided the MTV of the order is met,
the NYBX facility is programmed to
route orders to the DBK and attempt to
execute with available contra side
liquidity in the DBK even if an order’s
limit price is not matched in the DBK’s
displayed or non-displayed contra side
liquidity. Also, provided the MTV is
met, the NYBX facility will route orders
to the DBK and attempt to execute with
better priced available contra side
liquidity in the DBK, which will include
an opportunity to execute with CCS
interest. This occurs in Example No. 4
when the NYBX facility routes 700
shares at $20.04 to the DBK even though
the DBK does not have contra side
liquidity priced at $20.04, but has such
liquidity priced at $20.05. When the
facility routes 700 shares at $20.04 to
the DBK, the order has an opportunity
to execute with CCS interest, but no
shares are executed at that price. Then
the 700 shares are sent back to the
NYBX facility to attempt to execute
against the 500 shares in the NYBX at
$20.04. The 700 shares then execute
against the 500 shares at $20.04 leaving
200 shares. Because the DBK has 300
shares of contra side liquidity at $20.05,
the NYBX facility then sends the
residual order consisting of 200 shares
at $20.05 back to the DBK where it
executes against the 300 shares at
$20.05 thereby exhausting the NYBX
order and leaving 100 shares at $20.05
in the DBK. As the example also
demonstrates, the NYBX facility is
programmed to attempt to execute
orders at each successive price point
available in the NYBX facility and in the
DBK.
The proposed amendment adds
definitions of terms in subsection (b)(2)
(Definitions), which are defined in
Regulation NMS and corrects the
numbering of provisions in subsection
(h) (Limitations on the Use of the New
York Block Exchange).
The proposed amendment also
clarifies the manner in which the NYBX
orders are processed and how such
orders interact with the DBK, including
interaction with available contra side
CCS interest. Additionally, the proposed
amendment clarifies that the MTV
calculation does not include the
protected quotations in the automated
trading centers unless the execution of
the NYBX order may potentially trade
through a protected quotation.
2. Statutory Basis
The basis under the Act 11 for this
proposed rule change is the requirement
11 15
U.S.C. 78a et seq.
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15:13 Sep 09, 2009
under Section 6(b)(5) 12 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 amendment aligns the Rule
with the technology and functionality of
the NYBX facility in relation to an
NYBX order’s ability to attempt to
execute with contra side liquidity in the
DBK and with the DMM’s CCS interest.
The amendment also clarifies that the
unrestricted MTV calculation will not
include the available contra side
liquidity in the automated trading
centers unless the execution of the
NYBX order may otherwise trade
through a protected quotation in the
NYBX facility or in the DBK.
Additionally, the amendment clarifies
how NYBX orders are processed and at
what price point orders are routed from
the NYBX facility to the DBK and
attempt to execute in the DBK. The
proposed amendment adds definitions
of terms in subsection (b)(2)
(Definitions), which are defined in
Regulation NMS. Therefore, the
Exchange believes that because the
proposed amendment will clarify how
the NYBX facility operates, investors
and the public interest will be best
served as the amendment will provide
transparency of the facility’s
functionality for all users.
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
12 15
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46635
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 13 and Rule 19b-4(f)(6)
thereunder.14
A proposed rule change filed under
Rule 19b–4(f)(6) 15 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b–4(f)(6)(iii),16 the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange has asked the
Commission to waive the 30-day
operative delay so that the proposal may
become operative immediately upon
filing. The Exchange believes the waiver
of this period will allow it to align Rule
1600 with the technology and
functionality of the NYBX facility as it
currently operates, providing greater
transparency and certainty to market
participants. The Exchange also asserts
that waiving the operative delay will
enable its customers to better manage
their order flow and make strategic
trading decisions.
The Commission has determined that
waiving the 30-day operative delay of
the Exchange’s proposal is consistent
with the protection of investors and the
public interest because such waiver will
allow the Exchange to promptly
conform its rules to manner in which
the NYBX Facility currently operates.17
Therefore, the Commission designates
the proposal as operative upon filing. 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.18
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) 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. NYSE has satisfied this requirement.
15 17 CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6)(iii).
17 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).
18 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on September 1, 2009, the
date on which NYSE submitted Amendment No. 1.
See 15 U.S.C. 78s(b)(3)(C).
14 17
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Federal Register / Vol. 74, No. 174 / Thursday, September 10, 2009 / Notices
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–NYSE–2009–82 on the
subject line.
erowe on DSK5CLS3C1PROD with NOTICES
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–2009–82. 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
Section, 100 F Street, NE., Washington,
DC 20549–1090. Copies of the filing will
also be available for inspection and
copying at the NYSE’s principal office
and on its Internet Web site at https://
www.nyse.com. 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–
2009–82 and should be submitted on or
before October 1, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–21711 Filed 9–9–09; 8:45 am]
BILLING CODE 8010–01–P
19 17
CFR 200.30–3(a)(12).
VerDate Nov<24>2008
15:13 Sep 09, 2009
Jkt 217001
DEPARTMENT OF STATE
[Public Notice: 6758]
Agency Information Collection
Activities; Proposals, Submissions,
and Approvals
Title: 60-Day Notice of Proposed
Information Collection: DS–2028,
Overseas Schools Grant Status Report
OMB 1405–0033.
ACTION: Notice of request for public
comments.
SUMMARY: The Department of State is
seeking Office of Management and
Budget (OMB) approval for the
information collection described below.
The purpose of this notice is to allow 60
days for public comment in the Federal
Register preceding submission to OMB.
We are conducting this process in
accordance with the Paperwork
Reduction Act of 1995.
• Title of Information Collection:
Overseas Schools Grant Status Report.
• OMB Control Number: OMB 1405–
0033.
• Type of Request: Extension.
• Originating Office: Office of
Overseas Schools, A/OPR/OS.
• Form Number: DS–2028.
• Respondents: Overseas schools
grantees.
• Estimated Number of Respondents:
196.
• Estimated Number of Responses:
196.
• Average Hours per Response: 15
minutes.
• Total Estimated Burden: 49 hours.
• Frequency: Annually.
• Obligation to Respond: Required to
obtain or retain a benefit.
DATE(S): The Department will accept
comments from the public up to 60 days
from September 10, 2009.
ADDRESSES: Keith Miller, Department of
State, Office of Overseas Schools,
A/OPR/OS, Room H328, SA–1,
Washington, DC 20522–0132, who is
reachable on 202–261–8200.
You may submit comments by any of
the following methods:
• E-mail: millerkd2@state.gov.
• Mail (paper, disk, or CD–ROM
submissions): Office of Overseas
Schools, U.S. Department of State, 2201
C St., NW., Washington, DC 20522–
0132.
• Fax: 202–261–8224.
• Hand Delivery or Courier: 2401 E
St., NW., Room H328, Washington, DC
20037.
You must include the DS form
number (if applicable), information
collection title, and OMB control
number in any correspondence.
PO 00000
Frm 00079
Fmt 4703
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FOR FURTHER INFORMATION CONTACT:
Direct requests for additional
information regarding the collection
listed in this notice, including requests
for copies of the proposed information
collection and supporting documents, to
Keith Miller, Department of State, Office
of Overseas Schools, A/OPR/OS, Room
H328, SA–1, Washington, DC 20522–
0132, who is reachable on 202–261–
8200 or at millerkd2@state.gov.
We are
soliciting public comments to permit
the Department to:
• Evaluate whether the proposed
information collection is necessary for
the proper performance of our
functions.
• Evaluate the accuracy of our
estimate of the burden of the proposed
collection, including the validity of the
methodology and assumptions used.
• Enhance the quality, utility, and
clarity of the information to be
collected.
• Minimize the reporting burden on
those who are to respond, including the
use of automated collection techniques
or other forms of technology.
Abstract of proposed collection:
The Office of Overseas Schools of the
Department of State (A/OPR/OS) is
responsible for determining that
adequate educational opportunities
exist at Foreign Service Posts for
dependents of U.S. Government
personnel stationed abroad, and for
assisting American-sponsored overseas
schools to demonstrate U.S. educational
philosophy and practice. The
information gathered provides the
technical and professional staff of
A/OPR/OS the means by which
obligations, expenditures and
reimbursements of the grant funds are
monitored to ensure the grantee
complies with the terms of the grant.
Methodology: Information is collected
via electronic and paper submission.
SUPPLEMENTARY INFORMATION:
Dated: August 28, 2009.
Peggy Philbin,
Executive Director, Bureau of Administration,
Department of State.
[FR Doc. E9–21837 Filed 9–9–09; 8:45 am]
BILLING CODE 4710–24–P
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Agencies
[Federal Register Volume 74, Number 174 (Thursday, September 10, 2009)]
[Notices]
[Pages 46632-46636]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-21711]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60618; File No. SR-NYSE-2009-82]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
and Amendment No. 1 Thereto Amending Certain Provisions of Exchange
Rule 1600 To Align the Rule With the Technology and Functionality of
the NYBX Facility in Relation to an NYBX Order's Ability To Interact
With Non-Displayed Contra Side Liquidity in the NYSE Display
Book[supreg] and To Clarify the Processing of NYBX Orders That Have An
Optional, User-Defined Minimum Triggering Volume
September 3, 2009.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on August 12, 2009, New York Stock Exchange LLC (``NYSE''
or the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I
and II below, which Items have been prepared by the self-regulatory
organization. The Exchange has designated the proposed rule change
``non-controversial'' and eligible for immediate effectiveness pursuant
to Section 19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(6)
thereunder.\5\ On September 1, 2009, the Exchange filed Amendment No.
1.\6\ The Commission is publishing this notice to solicit comments on
the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(f)(6).
\6\ Amendment No. 1 added clarifying language to the proposed
rule text and made corresponding changes to the proposal.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend certain provisions of Exchange Rule
1600 (New York Block Exchange\SM\) (``NYBX\SM\'' or the ``facility'')
to align the Rule with the technology and functionality of the NYBX
facility in relation to an NYBX order's ability to interact with non-
displayed contra side liquidity in the NYSE Display Book[supreg]
(``Display Book'' or ``DBK'') and to clarify the processing of NYBX
orders that have an optional, user-defined Minimum Triggering Volume
(``MTV''). The proposed amendment also includes clarifying language,
additional definitions of terms found in Regulation NMS \7\ and adds
technical changes to correct the numbering of certain subsections. This
Amendment No. 1 of SR-NYSE-2009-82 replaces the previous filing in its
entirety. The text of the proposed rule change is available at the
Exchange, the Commission's Public Reference Room, and https://www.nyse.com.
---------------------------------------------------------------------------
\7\ The terms ``protected quotations'' and ``trade through''
have the same meaning as defined in Rule 600 of Regulation NMS.
These terms have been added to the definition section of Rule 1600
in the proposed amendment (see proposed subsections (b)(2)(F) and
(b)(2)(I)). The proposed rule change does not impact the facility's
consideration of all protected quotations of automated trading
centers.
---------------------------------------------------------------------------
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
The NYBX is an electronic facility of the Exchange that provides
continuous execution of all NYBX orders in NYSE-listed securities with
the aggregate of all orders in the NYBX facility and displayed and non-
displayed orders in the DBK. Orders entered into the NYBX facility are
non-displayed orders. NYBX orders may be subject to certain conditions
that can affect their ability to be executed. One type of condition is
a minimum size desired for execution, known as the MTV. Executions on
the NYBX will not trade through a protected quotation of an automated
trading center.
The Exchange seeks to amend Exchange Rule 1600 to clarify the
functionality of the NYBX facility in relation to an NYBX order's
ability to execute with aggregated non-displayed contra side liquidity
in the DBK. An automated market data feed into the NYBX facility
enables the facility to read non-displayed liquidity in the DBK
(``hidden data feed'') and triggers the
[[Page 46633]]
routing of NYBX orders to the DBK whenever the MTV can be met by the
aggregate of displayed and non-displayed contra side liquidity as
described in subsection (c)(3)(B)(ii)(I) of Rule 1600 (``MTV
Calculations''). It is important to note that unless the NYBX order's
MTV can be met, an NYBX order will not attempt to execute with
available contra side liquidity.
In addition to the non-displayed liquidity of reserve orders \8\
entered on the NYSE, the non-displayed liquidity in the DBK includes
the Designated Market Maker's (``DMM'') Capital Commitment Schedule
(``CCS'').\9\ CCS is a liquidity schedule established at various price
points at which the DMM is willing to interact with incoming contra
side orders and possibly provide price improvement to orders in the
DBK, including NYBX orders that are routed to the DBK. DMMs commit this
predetermined CCS interest through a DMM algorithm.
---------------------------------------------------------------------------
\8\ See NYSE Rule 13 for a definition of ``reserve orders.''
\9\ See Securities Exchange Act Release No. 58845 (October 24,
2008) 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) (``The New
Market Model''). Specifically, see NYSE Rule 1000(d)(i).
---------------------------------------------------------------------------
Because the hidden data feed cannot read the CCS interest in the
DMMs' algorithms, CCS interest is not considered in the MTV
calculation. Nevertheless, when the MTV is otherwise met, CCS interest
may attempt to execute with NYBX orders when they enter the DBK at any
price point. CCS interest may attempt to execute with an NYBX order
each time the order, whether the originating order or a residual order,
is routed from the NYBX facility to the DBK. The interaction of NYBX
orders with DBK contra side liquidity and available contra side CCS
interest is discussed more fully below (see also Example Nos. 1A and
4).
To enable an NYBX order to execute with non-displayed liquidity in
the DBK, the NYBX facility has been configured to automatically over-
size NYBX orders that are routed from the facility to the DBK, thereby
allowing such orders to attempt to execute with available contra side
displayed and non-displayed liquidity in the DBK and with available
contra side CCS interest. ``Over-sizing'' is an automated function
whereby the NYBX facility sends the entire NYBX order to the DBK. This
occurs when the MTV is met and the DBK has available contra side
liquidity and there is no better priced contra side liquidity in the
NYBX facility.
The amendment will also clarify that an unrestricted MTV
calculation, as described in subsection (c)(3)(B)(ii)(I) of Rule 1600
(``MTV Calculations''), will not include the available contra side
liquidity in automated trading centers unless the execution of the NYBX
order may potentially trade through a protected quotation in the NYBX
facility or in the DBK. Therefore, even if a customer designated an
NYBX order with an unrestricted MTV, the facility will not consider
available contra side liquidity in other automated trading centers when
calculating the MTV unless the execution of that order may potentially
trade through a protected quotation.
NYBX Compliance With Regulation NMS
NYBX orders will not trade through a Protected Bid or Protected
Offer except as allowed by Rule 611 of Regulation NMS. If the execution
of an NYBX order may potentially trade through an automated trading
center, the NYBX facility will immediately send routing instructions to
the NYSE Routing Broker \10\ (``Routing Broker'') and the Routing
Broker will immediately route the applicable volume (e.g., the price
and size of the displayed quotation) to the automated trading center to
attempt to execute with applicable protected quotations. If the order
is larger than the amount routed to the automated trading center, the
portion of the NYBX order that was not routed to the automated trading
center is sent to the DBK to attempt to execute with displayed and non-
displayed contra side liquidity in the DBK and with available contra
side CCS interest. The routing of orders from the NYBX facility to
automated trading centers, via the Routing Broker, occurs almost
simultaneously with the sending of orders to the DBK or executions of
orders in the NYBX facility.
---------------------------------------------------------------------------
\10\ See NYSE Rule 17(c) (``Operation of Routing Broker''). As
per Rule 17(c), the NYBX facility will use the Routing Broker to
send NYBX orders to the DBK and to automated trading centers
pursuant to Regulation NMS when attempting to execute such orders.
---------------------------------------------------------------------------
Also, when there is a potential trade through of a protected
quotation and the applicable portion of an NYBX order is routed to the
automated trading center in compliance with Regulation NMS, the NYBX
facility will not provide price improvement, as a delay in routing may
cause an inadvertent trade through of protected quotations should the
quotations change in the meantime.
NYBX Order Execution Sequence
NYBX orders will first attempt to execute against all available
contra side liquidity in the DBK (displayed and non-displayed) and with
any available contra side CCS interest at a price that is equal to or
better than the limit price of the NYBX order. The NYBX order will be
oversized and routed to the DBK at a price equal to: (a) The best price
of contra side liquidity available in the NYBX Facility, or (b) the
best price of contra side liquidity available in the DBK, whichever
price is superior, and attempt to execute in the DBK until the order is
exhausted or until the available contra side liquidity in the DBK is
exhausted.
However, when the NYBX facility has available contra side liquidity
at a price at or within the NBBO and at a price that is better than all
displayed and non-displayed liquidity in the DBK, or when there is no
displayed or non-displayed contra side liquidity in the DBK, the order
will attempt to execute in the NYBX facility at such price until the
order is exhausted or until the available contra side liquidity in the
facility is exhausted or until the order is cancelled or until the
order reaches a price point that is available in the DBK.
As described in more detail above, the execution of NYBX orders
will comply with Regulation NMS.
In each of the aforementioned trading situations, if the order at a
particular price point is not exhausted in the DBK, the residual order
will be sent back to the NYBX facility where it will attempt to execute
with available contra side liquidity in the DBK, the NYBX facility, and
the protected quotations of other automated trading centers, in the
same sequence described above, until the order is exhausted or until
the available contra side liquidity is exhausted or until the order is
cancelled.
Examples: The following examples will demonstrate how NYBX
orders are processed.
NYBX Snapshot
NYBX: (Sell Orders)
500 shares @ $19.99.
500 shares @ $20.00.
500 shares @ $20.01.
500 shares @ $20.04.
PHLX: (Sell Orders)
400 shares @ $20.00 (NBBO).
DBK: (Sell Orders)
Displayed:
600 shares @ $20.00.
300 shares @ $20.01.
300 shares @ $20.05.
Non-Displayed: (Sell orders)
500 shares @ $19.99.
500 Shares @ $20.00.
Example No. 1: A buy limit order of 2,500 shares at $20.00, with
an unrestricted MTV of 2,500 shares, enters the NYBX facility. The
MTV of 2,500 shares is met by the aggregate of orders in the NYBX
facility and the DBK at $19.99 (500 + 500) and @ $20.00 (500 + 600 +
500) adding up to 2,600 shares. Orders
[[Page 46634]]
in PHLX were not necessary to meet the MTV.
The NYBX facility routes and executes the order in the following
sequence:
--Route 2,500 shares to DBK @ $19.99, execute 500 shares leaving
2,000 shares.
--Execute 500 shares in NYBX @ $19.99 leaving 1,500 shares.
--Route 1,500 shares to DBK @ $20.00, execute 1,100 shares leaving
400 shares.
--Execute 400 shares in NYBX @ $20.00 thereby exhausting the order.
As the example shows, orders will first attempt to execute with
contra side liquidity in the DBK when the price is equal to or better
than the price in the NYBX. When the NYBX facility has available contra
side liquidity at a price within the NBBO and at a price that is better
than all liquidity in the DBK, or when there is no available contra
side liquidity in the DBK, the order will attempt to execute in the
NYBX facility at that price.
Example No. 1A: Using the same scenario in Example No. 1 above,
a buy limit order of 2,500 shares @ $20.00, with an unrestricted MTV
of 2,500 shares, enters the NYBX facility. The NYBX facility routes
and executes the order in the following sequence:
--Route 2,500 shares to DBK @ $19.99, execute 500 shares leaving
2,000 shares.
--Upon presentation of the order in the DBK, the DMM Capital
Commitment Schedule algorithm (``CCS'') determines to execute 1,000
additional shares @ $19.99 leaving 1,000 shares.
--Execute 500 shares in NYBX @ $19.99 leaving 500 shares.
--Route 500 shares to DBK @ $20.00, execute 500 shares in DBK
thereby exhausting the order.
As the example shows, when NYBX orders are routed to the DBK, such
NYBX orders will have an opportunity to attempt to execute with CCS
interest. If a residual NYBX order remains after partial execution in
the DBK at a particular price point, the residual order will be sent
back to the NYBX facility for further execution in the NYBX facility,
the DBK or with protected quotations of automated trading centers.
Thus, if the DBK acquires additional contra side liquidity, displayed
or non-displayed, that is eligible for execution against the NYBX
order, the NYBX facility will route the residual order to the DBK. This
NYBX residual order, for all intents and purposes, appears as a new
order to the DBK, and such NYBX order will have another opportunity to
attempt to execute with available contra side liquidity in the DBK and
with available contra side CCS interest. Therefore, each time an NYBX
order, original or residual, is routed to the DBK at a particular price
point, such order will have an opportunity to attempt to execute with
displayed and non-displayed contra side liquidity in the DBK and with
available contra side CCS interest.
Example No. 2: A buy limit order for 3,000 shares @ $20.00, with
an unrestricted MTV of 3,000 shares, enters the NYBX. The MTV is not
met because the aggregate of available contra side liquidity in the
DBK and in the NYBX only adds up to 2,600 shares (1,000 @ $19.99 and
1,600 at $20.00). Because there will be no trade through at the PHLX
in this example, the 400 PHLX shares will not be counted in the MTV
calculation. Therefore, the MTV is not met and because the MTV is
not met, there will be no execution of the NYBX order.
Example No. 3: A buy limit order for 3,500 shares @ $20.01, with
an unrestricted MTV of 3,500 shares, enters the NYBX facility. In
this example, the MTV is met by the aggregate liquidity at $19.99,
$20.00 and $20.01 on the DBK, the NYBX and the PHLX (1000 + 2000 +
800 = 3,800). The NYBX routes and executes the order in the
following sequence:
--Route 400 shares to PHLX @ $20.00, execute 400 shares leaving
3,100 shares.
--Route 3,100 shares to DBK @ $19.99, execute 500 shares leaving
2,600 shares.
--Execute 500 shares in NYBX @ $19.99 leaving 2,100 shares.
--Route 2,100 shares to DBK @ $20.00, execute 1,100 shares leaving
1,000 shares.
--Execute 500 shares in NYBX @ $20.00 leaving 500 shares.
--Route 500 shares to DBK @ $20.01, execute 300 shares leaving 200
shares.
--Execute 200 shares in NYBX @ $20.01 thereby exhausting the order.
The liquidity in the PHLX is included in the MTV calculation
because, as the example demonstrates, the execution of the order may
potentially trade through the protected quotations. The NYBX facility
is programmed to route the applicable volume to automated trading
centers whenever one or more successive price points of NYBX and DBK
contra side liquidity, included in the MTV calculation, are inferior to
prices of protected quotations in the automated trading center(s),
thereby avoiding a potential trade through of any protected quotations.
The NYBX snapshot of the entire market enables the NYBX facility to
determine if there is a potential trade through of a protected
quotation, and if so, the facility immediately routes the applicable
shares to the automated trading center(s) in compliance with Regulation
NMS. This is done even if the price of the shares routed to the
automated trading center(s) is inferior to other successive price
points in the NYBX facility and in the DBK. As discussed above, the
facility will not wait for price improvement opportunities when routing
out shares in compliance with Regulation NMS as any routing delay may
cause an inadvertent trade through of protected quotations.
In Example No. 3 the NYBX routed 400 shares to the PHLX at $20.00
to comply with Regulation NMS. This routing to PHLX occurred almost
simultaneously with the routing of 3,100 shares to DBK at $19.99,
executing 500 shares and leaving 2,600 shares. As the order sequencing
in Example No. 3 demonstrates, the remaining 2,600 shares then executes
with all better priced contra side liquidity in the DBK and the NYBX
facility. This example also demonstrates how the NYBX facility attempts
to execute available contra side liquidity at each successive price
point in the DBK and in the NYBX facility (i.e., ``walking the book'').
Example No. 3A: In the same example as Example No. 3 above, if
the MTV calculation was ``restricted'' to include only the available
contra side liquidity in the DBK and the NYBX and not contra side
liquidity in the PHLX (1000 + 1600 + 800 = 3,400), the MTV would not
be met and the order would not be executed.
Example No. 4: A buy limit order of 4,500 shares @ $20.05, with
no MTV, enters the NYBX facility. The NYBX routes and executes the
order in the following sequence:
--Route 400 shares to PHLX @ $20.00, execute 400 shares leaving
4,100 shares.
--Route 4,100 shares to DBK @ $19.99, execute 500 shares leaving
3,600 shares.
--Execute 500 shares in NYBX @ $19.99 leaving 3,100 shares.
--Route 3,100 shares to DBK @ $20.00, execute 1,100 shares leaving
2,000 shares.
--Execute 500 shares in NYBX @ $20.00 leaving 1,500 shares.
--Route 1,500 shares to DBK @ $20.01, execute 300 shares leaving
1,200 shares.
--Execute 500 shares in NYBX @ $20.01 leaving 700 shares.
--Route 700 shares to DBK @ $20.04, execute 0 leaving 700 shares.
--Execute 500 shares in NYBX @ $20.04 leaving 200 shares.
--Route 200 shares to DBK @ $20.05, execute 200 shares thereby
exhausting the order.
As explained earlier in Example No. 3, when there is a potential
trade through of a protected quotation, the facility immediately routes
the applicable volume to the automated trading center(s) in compliance
with Regulation NMS. In Example No. 4 the NYBX routed 400 shares to the
PHLX at $20.00 to comply with Regulation NMS. This routing to PHLX
occurred almost simultaneously with the routing of 4,100 shares to DBK
at $19.99, executing 500 shares and leaving 3,600 shares. The facility
does not provide price improvement to the shares that are routed to the
automated trading center(s) as latency and interaction with hidden CCS
interest could compromise the facility's ability to comply with
Regulation NMS.
[[Page 46635]]
As Example No. 4 demonstrates, provided the MTV of the order is
met, the NYBX facility is programmed to route orders to the DBK and
attempt to execute with available contra side liquidity in the DBK even
if an order's limit price is not matched in the DBK's displayed or non-
displayed contra side liquidity. Also, provided the MTV is met, the
NYBX facility will route orders to the DBK and attempt to execute with
better priced available contra side liquidity in the DBK, which will
include an opportunity to execute with CCS interest. This occurs in
Example No. 4 when the NYBX facility routes 700 shares at $20.04 to the
DBK even though the DBK does not have contra side liquidity priced at
$20.04, but has such liquidity priced at $20.05. When the facility
routes 700 shares at $20.04 to the DBK, the order has an opportunity to
execute with CCS interest, but no shares are executed at that price.
Then the 700 shares are sent back to the NYBX facility to attempt to
execute against the 500 shares in the NYBX at $20.04. The 700 shares
then execute against the 500 shares at $20.04 leaving 200 shares.
Because the DBK has 300 shares of contra side liquidity at $20.05, the
NYBX facility then sends the residual order consisting of 200 shares at
$20.05 back to the DBK where it executes against the 300 shares at
$20.05 thereby exhausting the NYBX order and leaving 100 shares at
$20.05 in the DBK. As the example also demonstrates, the NYBX facility
is programmed to attempt to execute orders at each successive price
point available in the NYBX facility and in the DBK.
The proposed amendment adds definitions of terms in subsection
(b)(2) (Definitions), which are defined in Regulation NMS and corrects
the numbering of provisions in subsection (h) (Limitations on the Use
of the New York Block Exchange).
The proposed amendment also clarifies the manner in which the NYBX
orders are processed and how such orders interact with the DBK,
including interaction with available contra side CCS interest.
Additionally, the proposed amendment clarifies that the MTV calculation
does not include the protected quotations in the automated trading
centers unless the execution of the NYBX order may potentially trade
through a protected quotation.
2. Statutory Basis
The basis under the Act \11\ for this proposed rule change is the
requirement under Section 6(b)(5) \12\ 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 amendment aligns the
Rule with the technology and functionality of the NYBX facility in
relation to an NYBX order's ability to attempt to execute with contra
side liquidity in the DBK and with the DMM's CCS interest. The
amendment also clarifies that the unrestricted MTV calculation will not
include the available contra side liquidity in the automated trading
centers unless the execution of the NYBX order may otherwise trade
through a protected quotation in the NYBX facility or in the DBK.
Additionally, the amendment clarifies how NYBX orders are processed and
at what price point orders are routed from the NYBX facility to the DBK
and attempt to execute in the DBK. The proposed amendment adds
definitions of terms in subsection (b)(2) (Definitions), which are
defined in Regulation NMS. Therefore, the Exchange believes that
because the proposed amendment will clarify how the NYBX facility
operates, investors and the public interest will be best served as the
amendment will provide transparency of the facility's functionality for
all users.
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\11\ 15 U.S.C. 78a et seq.
\12\ 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 \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
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.
NYSE has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing. The Exchange believes the
waiver of this period will allow it to align Rule 1600 with the
technology and functionality of the NYBX facility as it currently
operates, providing greater transparency and certainty to market
participants. The Exchange also asserts that waiving the operative
delay will enable its customers to better manage their order flow and
make strategic trading decisions.
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\15\ 17 CFR 240.19b-4(f)(6).
\16\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission has determined that waiving the 30-day operative
delay of the Exchange's proposal is consistent with the protection of
investors and the public interest because such waiver will allow the
Exchange to promptly conform its rules to manner in which the NYBX
Facility currently operates.\17\ Therefore, the Commission designates
the proposal as operative upon filing. 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.\18\
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\17\ 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).
\18\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on September 1, 2009, the date on which NYSE submitted
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
[[Page 46636]]
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-2009-82 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-2009-82. 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 Section, 100 F Street,
NE., Washington, DC 20549-1090. Copies of the filing will also be
available for inspection and copying at the NYSE's principal office and
on its Internet Web site at https://www.nyse.com. 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-2009-82 and should be submitted on
or before October 1, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-21711 Filed 9-9-09; 8:45 am]
BILLING CODE 8010-01-P