Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE AMEX LLC Amending Rules 904 and 904C, 62625-62626 [E9-28519]
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[Federal Register Volume 74, Number 228 (Monday, November 30, 2009)] [Notices] [Pages 62625-62626] From the Federal Register Online via the Government Printing Office [www.gpo.gov] [FR Doc No: E9-28519] [[Page 62625]] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-61034; File No. SR-NYSEAmex-2009-80] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE AMEX LLC Amending Rules 904 and 904C November 19, 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 November 5, 2009, NYSE Amex LLC (``NYSE Amex'' or the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the 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\ 15 U.S.C. 78a. \3\ 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 amend Exchange Rules 904 and 904C pertaining to Position Limits. The text of the proposed rule change is attached as Exhibit 5 to the 19b-4 form. A copy of this filing is available on the Exchange's Web site at https://www.nyse.com, at the Exchange's principal office and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of the proposed rule change is to amend NYSE Amex Rule 904 and Rule 904C to enable ATP Holders to rely on position limit exemptions granted by other options exchanges under specified circumstances. This proposed rule change is based on Chapter III, Section 8 and Chapter XIV Section 8, of the Options Rules of the NASDAQ Stock Market, LLC (``NOM''). NYSE Amex rules governing position limit exemptions for non-index options are generally found in the Commentary section of Rule 904. NYSE Amex rules governing position limit exemptions for stock index options are generally found in the Commentary section of Rule 904C. These rules include a number of position limit exemptions available to ATP Holders. Rules 904 and 904C, however, do not have a provision that recognizes position limit exemptions that are granted to ATP Holders by other option exchanges, as provided for in NOM Rules in Chapter III, Section 8 for non-index options and Chapter XIV, Section 8 for index options. In light of the desirability to have similar position limit standards, the Exchange proposes to add a similar exemption to both Rules 904 and 904C. Specifically, the Exchange proposes to add new Commentary to Rules 904 and 904C to address position limit exemptions granted by other options exchanges. This proposed rule [sic] will provide that an ATP Holder may rely upon any valid exemption from applicable position limits that has been granted by another options exchange for any options contract traded on NYSE Amex, provided that such ATP Holder provides the Exchange either with a copy of any written exemption issued by another options exchange or with a written description of any exemption issued by another options exchange that is not in writing, where such description contains sufficient detail for Exchange regulatory staff to verify the validity of that exemption with the issuing options exchange. In addition, such ATP Holder must fulfill all conditions precedent for such exemption and comply at all times with the requirements of such exemption with respect to trading on the Exchange. The Exchange notes that position limits tend to be similar across options exchanges, which is desirable in light of cross option exchange membership(s) and multiple listing and trading of similar product(s) on different exchanges. Because ATP Holders frequently have membership and/or trading privileges on other options exchanges, it is important that ad hoc position limit exemptions granted by other options exchanges (``exemption grants'') are available to ATP Holders to the extent that such exemption grants are reduced to writing and verifiable by Exchange regulatory staff. These new proposed rules do not give the Exchange the ability to alter the scope of these exemptions but only to recognize the exemption so that the position limit process would be the same across the exchanges. For example, an ATP Holder may go to another options exchange of which it is a member, such as the International Securities Exchange (``ISE''), or NOM to request a position limit exemption (exemption grant) for option contracts in the SPDRs (SPY). The other exchange provides the exemption grant until expiration in the same month to this particular firm for this particular issue (SPY). Should the same ATP Holder want to trade SPY on NYSE Amex to the extent of the exemption grant, the Exchange's proposed rule change would allow it to do so, but only to the extent that the firm provides the Exchange with a copy of the written exemption grant provided by the issuing exchange or, if the exemption is not in writing, to the extent that said ATP Holder provides the Exchange with sufficient detail for Exchange regulatory staff to be able to verify the validity of the exemption grant with the issuing options exchange.\4\ --------------------------------------------------------------------------- \4\ Additionally, the ATP Holder would have to fulfill all conditions precedent for such exemption grant and comply with the requirements of such exemption with respect to trading on the Exchange. --------------------------------------------------------------------------- The Exchange believes that by adding uniformity and predictability to the position limit process, the proposed rule change should be beneficial to the Exchange, ATP Holders, and their customers. Moreover, the proposed rule change should promote competition by allowing trades across options exchanges that are similar in respect of position limits.\5\ --------------------------------------------------------------------------- \5\ The Exchange notes that all reporting requirements, such as Rule 906 and 906C (Reporting of Options Positions), remains in force. --------------------------------------------------------------------------- The Exchange is also proposing a minor revision [sic] the rule numbering convention contained in the Commentary section of Rules 904 and 904C. This change is being made for technical purposes only in order to provide clarity to rules governing position limit exemptions. The renumbering of the Commentary has no material effect on the actual meaning of the rules. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act \6\ in general, and [[Page 62626]] furthers the objectives of Section 6(b)(5) of the Act \7\ in particular, because it is designed to prevent fraudulent and manipulative acts and practices, and 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, by allowing the Exchange to have uniform position limit procedures. --------------------------------------------------------------------------- \6\ 15 U.S.C. 78f (b). \7\ 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 The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 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 \10\ and Rule 19b- 4(f)(6)(iii) thereunder.\11\ --------------------------------------------------------------------------- \8\ 15 U.S.C. 78s(b)(3)(A)(iii). \9\ 17 CFR 240.19b-4(f)(6). \10\ 15 U.S.C. 78s(b)(3)(A). \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange's intent to file the proposed rule change along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied the pre-filing requirement. --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6)\12\ normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b4(f)(6)(iii),\13\ the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay so that the proposal may become operative upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver will bring uniformity and predictability to the position limit process. Accordingly, the Commission hereby grants the Exchange's request and designates the proposal operative upon filing.\14\ --------------------------------------------------------------------------- \12\ 17 CFR 240.19b-4(f)(6). \13\ 17 CFR 240.19b-4(f)(6)(iii). \14\ For the 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). --------------------------------------------------------------------------- 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 CommentsUse 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-NYSEAmex-2009-80 on the subject line. Paper Comments Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEAmex-2009-80. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use 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,\15\ 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 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 NYSE Amex'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- NYSEAmex-2009-80 and should be submitted on or before December 21, 2009. --------------------------------------------------------------------------- \15\ The text of the proposed rule change is available on the Commission's Web site at https://www.sec.gov/. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\16\ --------------------------------------------------------------------------- \16\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Elizabeth M. Murphy, Secretary. [FR Doc. E9-28519 Filed 11-27-09; 8:45 am] BILLING CODE 8011-01-P
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