Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Amending NYSE Rule 123C(9)(a)(1) To Extend the Operation of the Pilot Operating Pursuant the Rule Until the Earlier of Securities and Exchange Commission Approval To Make Such Pilot Permanent or June 1, 2010, 10543-10545 [2010-4736]
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srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 44 / Monday, March 8, 2010 / Notices
primarily pursuant to Rule 9 and
Addendum D with related provisions in
Addendum D with related provisions in
Addendum K and Procedure XV. The
primary substantive changes of this
proposed rule change are in Rule 9,
Addendum D, and Addendum K with a
conforming change to Procedure XV.
Technical clean-up changes are also
being made in each.
The delivering member must attach to
each envelope, a credit list (in
duplicate), which reflects the total
money value, if any, of the envelope’s
contents. If after receipt of the envelope
NSCC determines that the envelope is
properly listed on the accompanying
credit list, NSCC stamps the duplicate
credit list and makes it immediately
available to the delivering member’s
representative. An envelope listed on
the credit list shall be deemed to have
been accepted by NSCC when the
duplicate credit list is stamped.
As a related feature of ESS, the
payment shown on the credit list is
processed as part of the members’ daily
end of day net money settlement
obligations in reliance on the agreement
between the delivering and receiving
parties outside NSCC that the amount
listed is the contract amount.
In order to protect the NSCC against
the risk of member non-payment NSCC
is amending Rule 9 and related
provisions so that NSCC does not
guarantee the payment obligation to the
receiving member in an ESS delivery
and so that the credits and debits of the
payment amount of an envelope may be
reversed. The payment reversal may be
effected by NSCC even if the receiving
member has taken possession of the
envelope; however, if the receiving
member has not yet taken possession of
the envelope at the time of a payment
reversal, NSCC will return the envelope
to the delivering member. Any dispute
between the delivering and receiving
members must be resolved by them
outside the facilities of the NSCC.
Changes to Rule 9 affirmatively
provide that NSCC does not guarantee
the payment obligation in ESS and that
payment credits and debits may be
reversed. Technical and conforming
changes clarify the concepts of
delivering and receiving members and
that settlement processing is subject not
only to the rights of NSCC in Section 2
of Rule 12 but also to the new reversal
provision in Section 4 of Rule 9.
To conform to amended Rule 9,
Addendum D is similarly being
amended to state that ESS is not
guaranteed and that payment credits
and debits may be reversed as provided
in Rule 9. Language making it clear that
settlement processing is subject to the
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rights of NSCC under new Section 4 of
Rule 9 and Section 2 of Rule 12, was
also carried over to Addendum D.
Because Addendum D also covers other
services for which no change is made by
this filing, certain of the revisions to
Addendum D clarify that the revisions
are limited to ESS. Historical statements
in Addendum D are being eliminated.
The change to Addendum K is to
delete the provision whereby NSCC
provided a guarantee for ESS and
thereby deemed ESS to be a ‘‘System’’
within the meaning of Rule 4. Without
the guarantee, ESS is not considered to
be a ‘‘System.’’ Consistent with the
change, Procedure XV is modified so
that when the clearing fund component
titled ‘‘For Other Transactions’’ (that is,
for other than CNS transactions and
balance order transactions) is computed,
ESS will not be included.
In considering the elimination of the
guarantee, NSCC surveyed selected
members and learned that they did not
consider it vital that NSCC be
responsible for their ESS payment
obligations and that they do not rely on
the NSCC to guarantee such payments.
However, these members expressed a
strong desire for NSCC to maintain the
centralized delivery service. NSCC
designed the proposed rule changes to
meet the expressed need of certain
members while reducing risk to NSCC
and its members generally. NSCC
believes that it is shifting the burden of
risk to those that should bear it and to
outside NSCC’s facilities.
III. Discussion
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act 4 and the
rules and regulations thereunder
applicable to NSCC. In particular, the
Commission believes that by amending
its rules, NSCC’s exposure to potential
losses from member defaults,
insolvencies, mistakes, and fraud will
be reduced and the risk of such
potential losses will be appropriately
shifted to the contracting members in an
ESS transaction outside NSCC. The
proposal is therefore consistent with the
requirements of Section 17A(b)(3)(F),5
which requires, among other things, that
the rules of a clearing agency are
designed to promote the prompt and
accurate clearance and settlement of
securities transactions.
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposal is
consistent with the requirements of the
4 15
5 15
PO 00000
U.S.C. 78q–1.
U.S.C. 78q–1(b)(3)(F).
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10543
Act and in particular with the
requirements of Section 17A of the Act 6
and the rules and regulations
thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,7 that the
proposed rule change (File No. SR–
NSCC–2010–01) be, and hereby is,
approved.8
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.9
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–4738 Filed 3–5–10; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61612; File No. SR–NYSE–
2010–11]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by New York
Stock Exchange LLC Amending NYSE
Rule 123C(9)(a)(1) To Extend the
Operation of the Pilot Operating
Pursuant the Rule Until the Earlier of
Securities and Exchange Commission
Approval To Make Such Pilot
Permanent or June 1, 2010
March 1, 2010.
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 February
24, 2010, 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 Exchange. 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
NYSE Rule 123C(9)(a)(1) to extend the
operation of the pilot operating
pursuant the Rule until the earlier of
Securities and Exchange Commission
approval to make such pilot permanent
or June 1, 2010. The text of the proposed
6 15
U.S.C. 78q–1.
U.S.C. 78s(b)(2).
8 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
9 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
7 15
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10544
Federal Register / Vol. 75, No. 44 / Monday, March 8, 2010 / Notices
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 New York Stock Exchange
(‘‘NYSE’’ or the ‘‘Exchange’’) proposes to
amend NYSE Rule 123C(9)(a)(1) 3 to
extend the operation of the pilot
operating pursuant the Rule until the
earlier of Securities and Exchange
Commission approval to make such
pilot permanent or June 1, 2010.
NYSE Rule 123C(9)(a)(1) allows the
Exchange to temporarily suspend
certain rule requirements at the close
when extreme order imbalances may
cause significant dislocation to the
closing price. The rule has operated on
a pilot basis since April 2009 (‘‘Extreme
Order Imbalances Pilot’’ or ‘‘Pilot’’).4
Through this filing, NYSE proposes to
extend the Pilot until the earlier of
Securities and Exchange Commission
approval to make such Pilot permanent
or June 1, 2010.5
srobinson on DSKHWCL6B1PROD with NOTICES
Background
Pursuant to NYSE Rule 123C(9)(a)(1),
the Exchange may suspend NYSE Rules
52 (Hours of Operation) to resolve an
extreme order imbalance that may result
in a closing price dislocation at the
close as a result of an order entered into
Exchange systems, or represented to a
DMM orally at or near the close. The
provisions of NYSE Rule 123C(9)(a)(1)
3 See Securities Exchange Release No. 61233
(December 23, 2009), 74 FR 69169 (December 30,
2009) (SR–NYSE–2009–111) (Modify the closing
process and renumbering 123C(8) to 123C(9)). The
Exchange anticipates operation of these changes to
commence on or about March 1, 2010.
4 See Securities Exchange Act Release No. 59755
(April 13, 2009), 74 FR 18009 (April 20, 2009) (SR–
NYSE–2009–18).
5 The Exchange notes that parallel changes are
proposed to be made to the rules of NYSE Amex
LLC. See SR–NYSEAmex–2010–15.
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17:12 Mar 05, 2010
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operate as the Extreme Order Imbalance
Pilot.
As a condition of the approval to
operate the Pilot, the Exchange
committed to provide the Commission
with information regarding: (i) How
often a Rule 52 temporary suspension
pursuant to the Pilot was invoked
during the six months following its
approval; and (ii) the Exchange’s
determination as to how to proceed with
technical modifications to reconfigure
Exchange systems to accept orders
electronically after 4 p.m.
The Extreme Order Imbalance Pilot is
scheduled to end operation on March 1,
2010.6 The Exchange is currently
preparing a rule filing seeking
permission to make the provisions of
the Pilot permanent with certain
modifications but does not expect that
filing to be completed and approved by
the Commission before March 1, 2010.
Proposal To Extend the Operation of the
Extreme Order Imbalance Pilot
The Exchange established the Extreme
Order Imbalance Pilot to create a
mechanism for ensuring a fair and
orderly close when interest is received
at or near the close that could negatively
affect the closing transaction. The
Exchange believes that this tool has
proved very useful to resolve an extreme
order imbalance that may result in a
closing price dislocation at the close as
a result of an order entered into
Exchange systems, or represented to a
DMM orally at or near the close.
As the Exchange has previously
stated, NYSE Rule 123C(9) will be
invoked to attract offsetting interest in
rare circumstances where there exists an
extreme imbalance at the close such that
a DMM is unable to close the security
without significantly dislocating the
price. This is evidenced by the fact that
during the course of the Pilot, the
Exchange invoked the provisions of
NYSE Rule 123C(9), including the
provisions of the Extreme Order
Imbalance Pilot pursuant to NYSE Rule
123C(9)(a)(1), on four occasions.
In addition, during the operation of
the Pilot, the Exchange determined that
it would not be as onerous as previously
believed to modify Exchange systems to
accept orders electronically after 4:00
p.m. The Exchange has completed the
system modifications and is now in the
process of testing the modifications. The
Exchange anticipates that its quality
assurance review process will be
completed by June 1, 2010.
6 See Securities and Exchange Act Release No.
61264 (December 31, 2009), 75 FR 1107 (January 8,
2010) (SR–NYSE–2009–131) (extending the
operation of the pilot from December 31, 2009 to
March 1, 2010).
PO 00000
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Fmt 4703
Sfmt 4703
Given the above, the Exchange
believes that provisions governing the
Extreme Order Imbalance Pilot should
be made permanent. Through this filing
the Exchange seeks to extend the
current operation of the Pilot in order to
allow the Exchange to formally submit
a filing to the Commission to convert
the provisions governing the Pilot to
permanent rules and complete the
technological modifications required to
accept orders electronically after 4 p.m.
The Exchange therefore requests an
extension from the current expiration
date of March 1, 2010, until the earlier
of Securities and Exchange Commission
approval to make such Pilot permanent
or June 1, 2010.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(5) 7 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 Exchange believes
that the instant filing is consistent with
these principles. Specifically an
extension will allow the Exchange to: (i)
Prepare and submit a filing to make the
provisions governing the Extreme Order
Imbalance Pilot permanent; (ii) have
such filing complete public notice and
comment period; and (iii) complete the
19b–4 approval process. The rule
operates to protect investors and the
public interest by ensuring that the
closing price at the Exchange is not
significantly dislocated from the last
sale price by virtue of an extreme order
imbalance at or near the close.
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
7 15
U.S.C. 78f(b)(5).
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Federal Register / Vol. 75, No. 44 / Monday, March 8, 2010 / Notices
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 and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) normally does not
become operative prior to 30 days after
the date of the filing.10 However,
pursuant to Rule 19b4(f)(6)(iii), the
Commission may designate a shorter
time if such action is consistent with the
protection of investors and the public
interest. The Exchange requested that
the Commission waive the 30-day
operative delay, as specified in Rule
19b–4(f)(6)(iii),11 which would make the
rule change operative immediately. The
Exchange believes that continuation of
the Pilot does not burden competition
and would operate to protect investors
and the public interest by ensuring that
the closing price at the Exchange is not
significantly dislocated from the last
sale price by virtue of an extreme order
imbalance at or near the close.
The Commission believes that
waiving the 30-day operative delay is
consistent with the protection of
investors and the public interest
because it would allow the Pilot to
continue without interruption while the
Exchange works towards submitting a
separate proposal to make the Pilot
permanent. Accordingly, the
Commission designates the proposed
rule change as operative upon filing
with the Commission.12
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
8 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
10 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires the self-regulatory
organization to give the Commission notice of its
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.
NYSE has satisfied this requirement.
11 17 CFR 240.19b–4(f)(6)(iii).
12 For purposes only of waiving the operative
delay for this proposal, the Commission has
considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
srobinson on DSKHWCL6B1PROD with NOTICES
9 17
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necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.13
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2010–11 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–2010–11. 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,14 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 Web site viewing and
printing in the Commission’s Public
Reference Room, 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
13 15
U.S.C. 78s(b)(3)(C).
text of the proposed rule change is
available on the Commission’s Web site at https://
www.sec.gov/rules/sro.shtml.
14 The
PO 00000
Frm 00091
Fmt 4703
Sfmt 4703
10545
Number SR–NYSE–2010–11 and should
be submitted on or before March 29,
2010.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–4736 Filed 3–5–10; 8:45 am]
BILLING CODE 8011–01–P
SOCIAL SECURITY ADMINISTRATION
[Docket No. SSA–2010–0011]
Occupational Information Development
Advisory Panel Meeting
AGENCY:
Social Security Administration
(SSA).
ACTION: Notice of Upcoming Quarterly
Panel Meeting.
DATES: March 24, 2010, 8:30 a.m.–3 p.m.
(CST); March 25, 2010, 8:30 a.m.–11:30
a.m. (CST).
Location: Sheraton St. Louis City
Center.
ADDRESS: 400 South 14th Street, St.
Louis, MO 63103.
By Teleconference: 1–866–283–8275.
SUPPLEMENTARY INFORMATION: Type of
meeting: The meeting is open to the
public.
Purpose: This discretionary Panel,
established under the Federal Advisory
Committee Act of 1972, as amended,
shall report to the Commissioner of
Social Security. The Panel will provide
independent advice and
recommendations on plans and
activities to replace the Dictionary of
Occupational Titles used in the Social
Security Administration’s (SSA)
disability determination process. The
Panel will advise the Agency on
creating an occupational information
system tailored specifically for SSA’s
disability programs and adjudicative
needs. Advice and recommendations
will relate to SSA’s disability programs
in the following areas: Medical and
vocational analysis of disability claims;
occupational analysis, including
definitions, ratings and capture of
physical and mental/cognitive demands
of work and other occupational
information critical to SSA disability
programs; data collection; use of
occupational information in SSA’s
disability programs; and any other
area(s) that would enable SSA to
develop an occupational information
system suited to its disability programs
and improve the medical-vocational
adjudication policies and processes.
15 17
E:\FR\FM\08MRN1.SGM
CFR 200.30–3(a)(12).
08MRN1
]]>Agencies
[Federal Register Volume 75, Number 44 (Monday, March 8, 2010)]
[Notices]
[Pages 10543-10545]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-4736]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61612; File No. SR-NYSE-2010-11]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC
Amending NYSE Rule 123C(9)(a)(1) To Extend the Operation of the Pilot
Operating Pursuant the Rule Until the Earlier of Securities and
Exchange Commission Approval To Make Such Pilot Permanent or June 1,
2010
March 1, 2010.
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 February 24, 2010, 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 Exchange. 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 amend NYSE Rule 123C(9)(a)(1) to extend
the operation of the pilot operating pursuant the Rule until the
earlier of Securities and Exchange Commission approval to make such
pilot permanent or June 1, 2010. The text of the proposed
[[Page 10544]]
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 New York Stock Exchange (``NYSE'' or the ``Exchange'') proposes
to amend NYSE Rule 123C(9)(a)(1) \3\ to extend the operation of the
pilot operating pursuant the Rule until the earlier of Securities and
Exchange Commission approval to make such pilot permanent or June 1,
2010.
---------------------------------------------------------------------------
\3\ See Securities Exchange Release No. 61233 (December 23,
2009), 74 FR 69169 (December 30, 2009) (SR-NYSE-2009-111) (Modify
the closing process and renumbering 123C(8) to 123C(9)). The
Exchange anticipates operation of these changes to commence on or
about March 1, 2010.
---------------------------------------------------------------------------
NYSE Rule 123C(9)(a)(1) allows the Exchange to temporarily suspend
certain rule requirements at the close when extreme order imbalances
may cause significant dislocation to the closing price. The rule has
operated on a pilot basis since April 2009 (``Extreme Order Imbalances
Pilot'' or ``Pilot'').\4\ Through this filing, NYSE proposes to extend
the Pilot until the earlier of Securities and Exchange Commission
approval to make such Pilot permanent or June 1, 2010.\5\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 59755 (April 13,
2009), 74 FR 18009 (April 20, 2009) (SR-NYSE-2009-18).
\5\ The Exchange notes that parallel changes are proposed to be
made to the rules of NYSE Amex LLC. See SR-NYSEAmex-2010-15.
---------------------------------------------------------------------------
Background
Pursuant to NYSE Rule 123C(9)(a)(1), the Exchange may suspend NYSE
Rules 52 (Hours of Operation) to resolve an extreme order imbalance
that may result in a closing price dislocation at the close as a result
of an order entered into Exchange systems, or represented to a DMM
orally at or near the close. The provisions of NYSE Rule 123C(9)(a)(1)
operate as the Extreme Order Imbalance Pilot.
As a condition of the approval to operate the Pilot, the Exchange
committed to provide the Commission with information regarding: (i) How
often a Rule 52 temporary suspension pursuant to the Pilot was invoked
during the six months following its approval; and (ii) the Exchange's
determination as to how to proceed with technical modifications to
reconfigure Exchange systems to accept orders electronically after 4
p.m.
The Extreme Order Imbalance Pilot is scheduled to end operation on
March 1, 2010.\6\ The Exchange is currently preparing a rule filing
seeking permission to make the provisions of the Pilot permanent with
certain modifications but does not expect that filing to be completed
and approved by the Commission before March 1, 2010.
---------------------------------------------------------------------------
\6\ See Securities and Exchange Act Release No. 61264 (December
31, 2009), 75 FR 1107 (January 8, 2010) (SR-NYSE-2009-131)
(extending the operation of the pilot from December 31, 2009 to
March 1, 2010).
---------------------------------------------------------------------------
Proposal To Extend the Operation of the Extreme Order Imbalance Pilot
The Exchange established the Extreme Order Imbalance Pilot to
create a mechanism for ensuring a fair and orderly close when interest
is received at or near the close that could negatively affect the
closing transaction. The Exchange believes that this tool has proved
very useful to resolve an extreme order imbalance that may result in a
closing price dislocation at the close as a result of an order entered
into Exchange systems, or represented to a DMM orally at or near the
close.
As the Exchange has previously stated, NYSE Rule 123C(9) will be
invoked to attract offsetting interest in rare circumstances where
there exists an extreme imbalance at the close such that a DMM is
unable to close the security without significantly dislocating the
price. This is evidenced by the fact that during the course of the
Pilot, the Exchange invoked the provisions of NYSE Rule 123C(9),
including the provisions of the Extreme Order Imbalance Pilot pursuant
to NYSE Rule 123C(9)(a)(1), on four occasions.
In addition, during the operation of the Pilot, the Exchange
determined that it would not be as onerous as previously believed to
modify Exchange systems to accept orders electronically after 4:00 p.m.
The Exchange has completed the system modifications and is now in the
process of testing the modifications. The Exchange anticipates that its
quality assurance review process will be completed by June 1, 2010.
Given the above, the Exchange believes that provisions governing
the Extreme Order Imbalance Pilot should be made permanent. Through
this filing the Exchange seeks to extend the current operation of the
Pilot in order to allow the Exchange to formally submit a filing to the
Commission to convert the provisions governing the Pilot to permanent
rules and complete the technological modifications required to accept
orders electronically after 4 p.m. The Exchange therefore requests an
extension from the current expiration date of March 1, 2010, until the
earlier of Securities and Exchange Commission approval to make such
Pilot permanent or June 1, 2010.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \7\ 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 Exchange believes that the
instant filing is consistent with these principles. Specifically an
extension will allow the Exchange to: (i) Prepare and submit a filing
to make the provisions governing the Extreme Order Imbalance Pilot
permanent; (ii) have such filing complete public notice and comment
period; and (iii) complete the 19b-4 approval process. The rule
operates to protect investors and the public interest by ensuring that
the closing price at the Exchange is not significantly dislocated from
the last sale price by virtue of an extreme order imbalance at or near
the close.
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\7\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
[[Page 10545]]
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.\10\
However, pursuant to Rule 19b4(f)(6)(iii), the Commission may designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange requested that the
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\11\ which would make the rule change operative
immediately. The Exchange believes that continuation of the Pilot does
not burden competition and would operate to protect investors and the
public interest by ensuring that the closing price at the Exchange is
not significantly dislocated from the last sale price by virtue of an
extreme order imbalance at or near the close.
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\10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission notice of its 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. NYSE has satisfied this requirement.
\11\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it would allow the Pilot to continue without interruption while
the Exchange works towards submitting a separate proposal to make the
Pilot permanent. Accordingly, the Commission designates the proposed
rule change as operative upon filing with the Commission.\12\
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\12\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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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.\13\
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\13\ 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
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-2010-11 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-2010-11. 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,\14\ 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 Web site
viewing and printing in the Commission's Public Reference Room, 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-NYSE-2010-11 and should be submitted on or before March
29, 2010.
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\14\ The text of the proposed rule change is available on the
Commission's Web site at https://www.sec.gov/rules/sro.shtml.
\15\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-4736 Filed 3-5-10; 8:45 am]
BILLING CODE 8011-01-P
