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]

Download as PDF 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] erowe on DSK5CLS3C1PROD with NOTICES 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 VerDate Nov<24>2008 15:13 Sep 09, 2009 Jkt 217001 PO 00000 Frm 00075 Fmt 4703 Sfmt 4703 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. E:\FR\FM\10SEN1.SGM 10SEN1 erowe on DSK5CLS3C1PROD with NOTICES Federal Register / Vol. 74, No. 174 / Thursday, September 10, 2009 / Notices 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). VerDate Nov<24>2008 15:13 Sep 09, 2009 Jkt 217001 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. PO 00000 Frm 00076 Fmt 4703 Sfmt 4703 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 E:\FR\FM\10SEN1.SGM 10SEN1 46634 Federal Register / Vol. 74, No. 174 / Thursday, September 10, 2009 / Notices 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. erowe on DSK5CLS3C1PROD with NOTICES 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- VerDate Nov<24>2008 15:13 Sep 09, 2009 Jkt 217001 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 PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 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. E:\FR\FM\10SEN1.SGM 10SEN1 erowe on DSK5CLS3C1PROD with NOTICES Federal Register / Vol. 74, No. 174 / Thursday, September 10, 2009 / Notices 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. VerDate Nov<24>2008 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 Jkt 217001 PO 00000 U.S.C. 78f(b)(5). Frm 00078 Fmt 4703 Sfmt 4703 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 E:\FR\FM\10SEN1.SGM 10SEN1 46636 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 Sfmt 4703 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 E:\FR\FM\10SEN1.SGM 10SEN1

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]


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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.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78a et seq.
    \12\ 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 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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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
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