Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Make a Technical Adjustment to Its Rules To Allow Sub-Penny Quoting of Certain Securities, 25019-25020 [2010-10600]

Download as PDF Federal Register / Vol. 75, No. 87 / Thursday, May 6, 2010 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62006; File No. SR– NYSEArca–2010–36] 1. Purpose Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Make a Technical Adjustment to Its Rules To Allow SubPenny Quoting of Certain Securities April 29, 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 April 23, 2010, 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 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 make a technical adjustment to its rules to allow sub-penny quoting of certain securities priced less than $1.00. The text of the proposed rule change is available on the Exchange’s Web site at https://www.nyse.com, at the Exchange’s principal office, on the Commission’s Web site at https://www.sec.gov, and at the Commission’s Public Reference Room. mstockstill on DSKH9S0YB1PROD with NOTICES 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. 1 15 2 17 U.S.C.78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 16:53 May 05, 2010 The Exchange proposes to make a technical adjustment its rules to allow sub-penny quoting of Investment Company Units, Portfolio Depositary Receipts, and Managed Fund Shares. Currently, NYSE Arca Equities Rule 5.2(j)(3) Commentaries .01(e) and .02(e), NYSE Arca Equities Rule 7.6 Commentary .03, Rule 8.100 Commentaries .01(e) and .02(e), and NYSE Arca Equities Rule 8.600 Commentary .03 restrict the minimum price variation for quoting and order entry to $0.01. Consistent with Regulation NMS Rule 612, the Exchange proposes to remove these provisions to allow these securities to be quoted in a minimum pricing increment of $0.0001 for securities priced less than $1.00. The Exchange notes that it has not had any of the aforementioned securities quote below a dollar nor does it anticipate such an occurrence in the reasonably foreseeable future. The Exchange simply seeks to harmonize the minimum price variation in the aforementioned products with all other equity securities traded on the Exchange. Moreover, the Exchange notes that this approach is substantially similar to BATS Rule 11.11 and Nasdaq Rule 4613(a)(1)(B). 2. Statutory Basis The proposed rule change is consistent with Section 6(b) 3 of the Securities Exchange Act of 1934 (the ‘‘Exchange Act’’), in general, and furthers the objectives of Section 6(b)(5) 4 in particular in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. The Exchange believes that the proposed amendment is consistent with the goal of removing impediments to a free and open market because the changes proposed herein will substantially harmonize NYSE Arca’s sub-penny quoting policy with Rule 612 of Regulation NMS which allows a minimum pricing increment of $0.0001 for securities priced less than $1.00. 3 15 4 15 Jkt 220001 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00155 Fmt 4703 Sfmt 4703 25019 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 for 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 5 and Rule 19b–4(f)(6) thereunder.6 The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, because the proposal is consistent with Rule 612 of Regulation NMS and the rules of other self-regulatory organizations previously approved by the Commission.7 For these reasons, the Commission designates the proposed rule change as operative upon filing.8 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 5 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b–4(f)(6) 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. 7 See BATS Rule 11.11 and Nasdaq Rule 4613(a)(1)(B). 8 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). 6 17 E:\FR\FM\06MYN1.SGM 06MYN1 25020 Federal Register / Vol. 75, No. 87 / Thursday, May 6, 2010 / Notices 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: For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–10600 Filed 5–5–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–61997; File No. SR–FINRA– 2010–017] 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–NYSEArca–2010–36 on the subject line. Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Allow FINRA Members To Use the OTC Reporting Facility To Transfer Transaction Fees Charged by One Member to Another Member Paper Comments April 28, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 12, 2010, the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) filed with the Securities and Exchange Commission All submissions should refer to File (‘‘SEC’’ or ‘‘Commission’’) the proposed Number SR–NYSEArca–2010–36. This rule change as described in Items I and file number should be included on the II below, which Items have been subject line if e-mail is used. To help the prepared by FINRA. FINRA has Commission process and review your designated the proposed rule change as comments more efficiently, please use constituting a ‘‘non-controversial’’ rule only one method. The Commission will change under Section 19(b)(3)(A) of the post all comments on the Commission’s Act 3 and Rule 19b–4(f)(6) thereunder,4 Internet Web site (https://www.sec.gov/ which renders the proposal effective rules/sro.shtml). Copies of the upon receipt of this filing by the submission, all subsequent Commission. Additionally, FINRA has amendments, all written statements designated the proposed rule change as with respect to the proposed rule ‘‘establishing or changing a due, fee or change that are filed with the other charge’’ under Section 19(b)(3)(A) Commission, and all written of the Act 5 and Rule 19b–4(f)(2) communications relating to the thereunder,6 which renders the proposal proposed rule change between the effective upon receipt of this filing by Commission and any person, other than the Commission. The Commission is those that may be withheld from the publishing this notice to solicit public in accordance with the comments on the proposed rule change provisions of 5 U.S.C. 552, will be from interested persons. available for Web site viewing and I. Self-Regulatory Organization’s printing in the Commission’s Public Statement of the Terms of Substance of Reference Room, on official business the Proposed Rule Change days between the hours of 10 a.m. and FINRA is proposing to (1) adopt 3 p.m. Copies of the filing also will be FINRA Rule 7330(i) to permit FINRA available for inspection and copying at the principal office of the Exchange. All members to use the OTC Reporting Facility (the ‘‘ORF’’) to transfer comments received will be posted transaction fees charged by one member without change; the Commission does to another member on trades reported to not edit personal identifying information from submissions. You 9 17 CFR 200.30–3(a)(12). should submit only information that 1 15 U.S.C. 78s(b)(1). you wish to make available publicly. All 2 17 CFR 240.19b–4. submissions should refer to File 3 15 U.S.C. 78s(b)(3)(A). Number SR–NYSEArca–2010–36 and 4 17 CFR 240.19b–4(f)(6). should be submitted on or before May 5 15 U.S.C. 78s(b)(3)(A). 27, 2010. 6 17 CFR 240.19b–4(f)(2). mstockstill on DSKH9S0YB1PROD with NOTICES • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. VerDate Mar<15>2010 16:53 May 05, 2010 Jkt 220001 PO 00000 Frm 00156 Fmt 4703 Sfmt 4703 the ORF; and (2) amend FINRA Rule 7710 to establish the fee to be charged by the ORF for use of the transaction fee transfer service. The text of the proposed rule change is available on FINRA’s Web site at https://www.finra.org, on the Commission’s Web site at https:// www.sec.gov, at the principal office of FINRA 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, FINRA 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 these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Background: Rule 7230A(h) permits FINRA members to agree in advance to transfer a transaction fee charged by one member to another member on a transaction in NMS stocks effected otherwise than on an exchange through the submission of a clearing report to the FINRA/Nasdaq Trade Reporting Facility (‘‘FINRA/Nasdaq TRF’’). Prior to the adoption of Rule 7230A(h) in 2007,7 there was no mechanism for members to charge each other commissions or other explicit transaction fees through the FINRA trade reporting and clearance submission process. Generally, members wanting to charge other members an explicit transaction fee either billed and collected those fees directly from the other member outside the transaction reporting and clearing process or traded on a ‘‘net’’ basis.8 Rule 7230A(h) 7 See Securities Exchange Act Release No. 56007 (July 3, 2007), 72 FR 37807 (July 11, 2007) (Notice of Filing and Immediate Effectiveness of File No. SR–NASD–2007–046). SR–NASD–2007–046 proposed to adopt paragraph (h) of NASD Rule 6130. Pursuant to SR–FINRA–2008–021, NASD Rule 6130 was renumbered as FINRA Rule 7230A. See Securities Exchange Act Release No. 58643 (September 25, 2008), 73 FR 57174 (October 1, 2008) (Order Approving File No. SR–FINRA–2008– 021). 8 Trading on a ‘‘net basis’’ means that the brokerdealer’s compensation is implicitly included in the execution price disseminated to the tape and reported for clearance and settlement to the E:\FR\FM\06MYN1.SGM 06MYN1

Agencies

[Federal Register Volume 75, Number 87 (Thursday, May 6, 2010)]
[Notices]
[Pages 25019-25020]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-10600]



[[Page 25019]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62006; File No. SR-NYSEArca-2010-36]


 Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. To Make a 
Technical Adjustment to Its Rules To Allow Sub-Penny Quoting of Certain 
Securities

April 29, 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 April 23, 2010, 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 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 make a technical adjustment to its rules 
to allow sub-penny quoting of certain securities priced less than 
$1.00. The text of the proposed rule change is available on the 
Exchange's Web site at https://www.nyse.com, at the Exchange's principal 
office, on the Commission's Web site at https://www.sec.gov, 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 Exchange proposes to make a technical adjustment its rules to 
allow sub-penny quoting of Investment Company Units, Portfolio 
Depositary Receipts, and Managed Fund Shares. Currently, NYSE Arca 
Equities Rule 5.2(j)(3) Commentaries .01(e) and .02(e), NYSE Arca 
Equities Rule 7.6 Commentary .03, Rule 8.100 Commentaries .01(e) and 
.02(e), and NYSE Arca Equities Rule 8.600 Commentary .03 restrict the 
minimum price variation for quoting and order entry to $0.01. 
Consistent with Regulation NMS Rule 612, the Exchange proposes to 
remove these provisions to allow these securities to be quoted in a 
minimum pricing increment of $0.0001 for securities priced less than 
$1.00. The Exchange notes that it has not had any of the aforementioned 
securities quote below a dollar nor does it anticipate such an 
occurrence in the reasonably foreseeable future. The Exchange simply 
seeks to harmonize the minimum price variation in the aforementioned 
products with all other equity securities traded on the Exchange.
    Moreover, the Exchange notes that this approach is substantially 
similar to BATS Rule 11.11 and Nasdaq Rule 4613(a)(1)(B).
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \3\ of the 
Securities Exchange Act of 1934 (the ``Exchange Act''), in general, and 
furthers the objectives of Section 6(b)(5) \4\ in particular in that it 
is designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in facilitating 
transactions in securities, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system. 
The Exchange believes that the proposed amendment is consistent with 
the goal of removing impediments to a free and open market because the 
changes proposed herein will substantially harmonize NYSE Arca's sub-
penny quoting policy with Rule 612 of Regulation NMS which allows a 
minimum pricing increment of $0.0001 for securities priced less than 
$1.00.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 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 for 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 \5\ and Rule 19b-
4(f)(6) thereunder.\6\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
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.
---------------------------------------------------------------------------

    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest, 
because the proposal is consistent with Rule 612 of Regulation NMS and 
the rules of other self-regulatory organizations previously approved by 
the Commission.\7\ For these reasons, the Commission designates the 
proposed rule change as operative upon filing.\8\
---------------------------------------------------------------------------

    \7\ See BATS Rule 11.11 and Nasdaq Rule 4613(a)(1)(B).
    \8\ 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).
---------------------------------------------------------------------------

    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

[[Page 25020]]

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-2010-36 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-2010-36. 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 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-NYSEArca-2010-36 and should be submitted on or before 
May 27, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-10600 Filed 5-5-10; 8:45 am]
BILLING CODE 8011-01-P
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