Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending Obligations of Lead Market Makers, 55596-55597 [E9-25829]

Download as PDF 55596 Federal Register / Vol. 74, No. 207 / Wednesday, October 28, 2009 / Notices available for inspection and copying in the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–Phlx–2009–89 and should be submitted on or before November 18, 2009. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16 Elizabeth M. Murphy, Secretary. [FR Doc. E9–25827 Filed 10–27–09; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–60855; File No. SR– NYSEArca–2009–92] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending Obligations of Lead Market Makers October 21, 2009. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that, on October 14, 2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. erowe on DSK5CLS3C1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to make changes to NYSE Arca Rule 6.82(c)— Obligations of Lead Market Makers. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and www.nyse.com. 16 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Nov<24>2008 15:34 Oct 27, 2009 Jkt 220001 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 Exchange proposes to amend NYSE Arca Options Rule 6.82(c)(5) to remove the requirement that an LMM designate a back-up LMM and add a provision obligating an LMM to notify a Trading Official in the event the LMM is not accessible. In addition, the Exchange proposes that if such LMM is not accessible, the Exchange may designate a back-up LMM. The requirement that each LMM designates a back-up LMM was initially established to help ensure that there would be adequate liquidity in a given issue in the event the appointed LMM was unavailable. At the time, the NYSE Arca options market was strictly floorbased, many Lead Market Makers were individuals, and there may have only been a few Market Makers in any given issue. Therefore, it was necessary to have a designated back-up LMM ready to take over as LMM, should the appointed LMM be unable to fulfill its obligations. In return for fulfilling the obligations of the LMM, the back-up LMM (when acting in that capacity) would also be entitled to all rights afforded to the assigned LMM. The rationale underlying this rule has since become antiquated because today’s electronic-based trading results in fewer absences and there are a sufficient number of Market Maker firms assigned to each issue that are able to provide liquidity in the event of a LMM’s temporary absence. Also, since nearly all option issues traded on NYSE Arca are traded on multiple exchanges, the historical risk to be managed by the current rule (namely, the ability of the Exchange to foster the provision of liquidity for investors) is no longer present. Pursuant to the changes proposed to Rule 6.82(c)(5), an LMM must promptly PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 notify a Trading Official if it is not accessible during the trading day. In the event an LMM is not accessible, it will not be eligible to receive any of the rights afforded to LMMs as contained in Rule 6.82(d). In those instances, the Exchange may designate an approved LMM 3 to act as a back-up LMM. In selecting an approved LMM to act in a back-up capacity, the Exchange will select an LMM that appears best able to perform the functions of the LMM. In designating a back-up LMM, the Exchange will use criteria consistent with LMM allocation procedures contained in Rule 6.82(e). The Exchange believes that this process is more beneficial to all market participants because the Exchange is in the best position to identify an appropriate backup LMM. It should be noted that the Exchange intends to designate a back-up LMM only in situations where the incumbent LMM is temporarily not accessible. In the event of a long-term absence, or permanent vacancy, the Exchange may either designate an Interim LMM pursuant to Rule 6.82(b)(4) or reallocate the issue to another LMM pursuant to Rule 6.82(f). Upon the operative date of this rule change, all previously executed agreements between LMMs and back-up LMMs will be considered null and void. In addition, OTP Holders will no longer be required to designate a back-up LMM when applying to become an LMM. This rule change does not in any way revise or amend any other Exchange rules, including those rules pertaining to qualifications, obligations, and rights of LMMs. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) 4 of the Act, in general, and furthers the objectives of Section 6(b)(5),5 in particular, in that it is designed to facilitate transactions in securities, to promote just and equitable principles of trade, to enhance competition, and to protect investors and the public interest. 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. 3 An ‘‘approved LMM’’ is an individual or entity that has been deemed qualified to be an LMM pursuant to Rule 6.82. 4 15 U.S.C. 78f(b). 5 15 U.S.C. 78f(b)(5). E:\FR\FM\28OCN1.SGM 28OCN1 Federal Register / Vol. 74, No. 207 / Wednesday, October 28, 2009 / Notices 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 6 and Rule 19b–4(f)(6) thereunder.7 A proposed rule change filed under Rule 19b–4(f)(6) of the Act 8 normally does not become operative prior to 30 days after the date of the filing. However, Rule 19b–4(f)(6) 9 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. At any time within 60 days of the filing of the proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File 6 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. The Exchange has satisfied this requirement. 8 17 CFR 240.19b–4(f)(6). 9 Id. erowe on DSK5CLS3C1PROD with NOTICES 7 17 VerDate Nov<24>2008 15:34 Oct 27, 2009 Jkt 220001 55597 Number SR–NYSEArca–2009–92 on the subject line. SECURITIES AND EXCHANGE COMMISSION Paper Comments [Release No. 34–60858; File No. SR–CBOE– 2009–077] • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Chicago All submissions should refer to File Board Options Exchange Stock Number SR–NYSEArca–2009–92. This Exchange Fees Schedule Related to file number should be included on the Stock Component of Stock-Option subject line if e-mail is used. To help the Cross Trade Commission process and review your October 21, 2009. comments more efficiently, please use Pursuant to Section 19(b)(1) of the only one method. The Commission will Securities Exchange Act of 1934 post all comments on the Commission’s (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 Internet Web site (https://www.sec.gov/ notice is hereby given that on October rules/sro.shtml). Copies of the 16, 2009, the Chicago Board Options submission, all subsequent Exchange, Incorporated (‘‘Exchange’’ or amendments, all written statements ‘‘CBOE’’) filed with the Securities and with respect to the proposed rule Exchange Commission (‘‘Commission’’) change that are filed with the the proposed rule change as described Commission, and all written in Items I and II below, which Items communications relating to the have been prepared by the Exchange. proposed rule change between the CBOE has designated this proposal as Commission and any person, other than one establishing or changing a due, fee, those that may be withheld from the or other charge applicable only to a public in accordance with the member under Section 19(b)(3)(A)(ii) of provisions of 5 U.S.C. 552, will be the Act 3 and Rule 19b–4(f)(2) available for inspection and copying in thereunder,4 which renders the proposal effective upon filing with the the Commission’s Public Reference Commission. The Commission is Section, 100 F Street, NE., Washington, publishing this notice to solicit DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. comments on the proposed rule change Copies of the filing will also be available from interested persons. for inspection and copying at the I. Self-Regulatory Organization’s principal office of the Exchange. All Statement of the Terms of Substance of comments received will be posted the Proposed Rule Change without change; the Commission does The Exchange proposes to amend its not edit personal identifying CBOE Stock Exchange (‘‘CBSX’’) Fees information from submissions. You Schedule. The text of the proposed rule should submit only information that change is available on the Exchange’s you wish to make available publicly. All Web site (https://www.cboe.org/legal), at submissions should refer to File the Exchange’s Office of the Secretary, Number SR–NYSEArca–2009–92 and and at the Commission. should be submitted on or before II. Self-Regulatory Organization’s November 18, 2009. Statement of the Purpose of, and For the Commission, by the Division of Statutory Basis for, the Proposed Rule Trading and Markets, pursuant to delegated Change authority.10 In its filing with the Commission, the Elizabeth M. Murphy, self-regulatory organization included Secretary. statements concerning the purpose of [FR Doc. E9–25829 Filed 10–27–09; 8:45 am] and basis for the proposed rule change BILLING CODE 8011–01–P 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, 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 2 17 10 17 PO 00000 CFR 200.30–3(a)(12). Frm 00062 Fmt 4703 Sfmt 4703 E:\FR\FM\28OCN1.SGM 28OCN1

Agencies

[Federal Register Volume 74, Number 207 (Wednesday, October 28, 2009)]
[Notices]
[Pages 55596-55597]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-25829]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60855; File No. SR-NYSEArca-2009-92]


 Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Amending 
Obligations of Lead Market Makers

October 21, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on October 14, 2009, NYSE Arca, Inc. (``NYSE Arca'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III, which Items have been prepared by the self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to make changes to NYSE Arca Rule 6.82(c)--
Obligations of Lead Market Makers. The text of the proposed rule change 
is available at the Exchange, the Commission's Public Reference Room, 
and 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 Exchange proposes to amend NYSE Arca Options Rule 6.82(c)(5) to 
remove the requirement that an LMM designate a back-up LMM and add a 
provision obligating an LMM to notify a Trading Official in the event 
the LMM is not accessible. In addition, the Exchange proposes that if 
such LMM is not accessible, the Exchange may designate a back-up LMM.
    The requirement that each LMM designates a back-up LMM was 
initially established to help ensure that there would be adequate 
liquidity in a given issue in the event the appointed LMM was 
unavailable. At the time, the NYSE Arca options market was strictly 
floor-based, many Lead Market Makers were individuals, and there may 
have only been a few Market Makers in any given issue. Therefore, it 
was necessary to have a designated back-up LMM ready to take over as 
LMM, should the appointed LMM be unable to fulfill its obligations. In 
return for fulfilling the obligations of the LMM, the back-up LMM (when 
acting in that capacity) would also be entitled to all rights afforded 
to the assigned LMM.
    The rationale underlying this rule has since become antiquated 
because today's electronic-based trading results in fewer absences and 
there are a sufficient number of Market Maker firms assigned to each 
issue that are able to provide liquidity in the event of a LMM's 
temporary absence. Also, since nearly all option issues traded on NYSE 
Arca are traded on multiple exchanges, the historical risk to be 
managed by the current rule (namely, the ability of the Exchange to 
foster the provision of liquidity for investors) is no longer present.
    Pursuant to the changes proposed to Rule 6.82(c)(5), an LMM must 
promptly notify a Trading Official if it is not accessible during the 
trading day. In the event an LMM is not accessible, it will not be 
eligible to receive any of the rights afforded to LMMs as contained in 
Rule 6.82(d). In those instances, the Exchange may designate an 
approved LMM \3\ to act as a back-up LMM. In selecting an approved LMM 
to act in a back-up capacity, the Exchange will select an LMM that 
appears best able to perform the functions of the LMM. In designating a 
back-up LMM, the Exchange will use criteria consistent with LMM 
allocation procedures contained in Rule 6.82(e). The Exchange believes 
that this process is more beneficial to all market participants because 
the Exchange is in the best position to identify an appropriate back-up 
LMM.
---------------------------------------------------------------------------

    \3\ An ``approved LMM'' is an individual or entity that has been 
deemed qualified to be an LMM pursuant to Rule 6.82.
---------------------------------------------------------------------------

    It should be noted that the Exchange intends to designate a back-up 
LMM only in situations where the incumbent LMM is temporarily not 
accessible. In the event of a long-term absence, or permanent vacancy, 
the Exchange may either designate an Interim LMM pursuant to Rule 
6.82(b)(4) or reallocate the issue to another LMM pursuant to Rule 
6.82(f).
    Upon the operative date of this rule change, all previously 
executed agreements between LMMs and back-up LMMs will be considered 
null and void. In addition, OTP Holders will no longer be required to 
designate a back-up LMM when applying to become an LMM. This rule 
change does not in any way revise or amend any other Exchange rules, 
including those rules pertaining to qualifications, obligations, and 
rights of LMMs.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \4\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5),\5\ in particular, in that it is designed 
to facilitate transactions in securities, to promote just and equitable 
principles of trade, to enhance competition, and to protect investors 
and the public interest.
---------------------------------------------------------------------------

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

[[Page 55597]]

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 \6\ and Rule 19b-
4(f)(6) thereunder.\7\
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 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. 
The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) of the Act \8\ 
normally does not become operative prior to 30 days after the date of 
the filing. However, Rule 19b-4(f)(6) \9\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
---------------------------------------------------------------------------

    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ Id.
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2009-92 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2009-92. 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, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of the filing will also be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-NYSEArca-2009-92 and should 
be submitted on or before November 18, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-25829 Filed 10-27-09; 8:45 am]
BILLING CODE 8011-01-P
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