Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex LLC Extending the Operative Date of NYSE Amex Equities Rule 92(c)(3) From July 31, 2010 to December 31, 2010, 44040-44042 [2010-18408]

Download as PDF 44040 Federal Register / Vol. 75, No. 143 / Tuesday, July 27, 2010 / Notices 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 either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act 24 and paragraph (f)(2) of Rule 19b–4 25 thereunder. 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: sroberts on DSKD5P82C1PROD with NOTICES 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–NASDAQ–2010–075 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–NASDAQ–2010–075. 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, 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– NASDAQ–2010–075 and should be submitted on or before August 17, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–18404 Filed 7–26–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62540; File No. SR– NYSEAmex–2010–70] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex LLC Extending the Operative Date of NYSE Amex Equities Rule 92(c)(3) From July 31, 2010 to December 31, 2010 July 21, 2010. 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 July 9, 2010, NYSE Amex LLC (the ‘‘Exchange’’ or ‘‘NYSE Amex’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 26 17 CFR 200.30–3(a)(12). U.S.C.78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 1 15 24 15 25 17 U.S.C. 78s(b)(3)(A)(ii). CFR 240.19b–4(f)(2). VerDate Mar<15>2010 16:30 Jul 26, 2010 Jkt 220001 PO 00000 Frm 00126 Fmt 4703 Sfmt 4703 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the operative date of NYSE Amex Equities Rule 92(c)(3) from July 31, 2010 to December 31, 2010. The text of the proposed rule change is available at the Exchange, the Commission’s Web site at https://www.sec.gov, 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 Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange is proposing to extend the delayed operative date of Rule 92(c)(3) from July 31, 2010 to December 31, 2010. The Exchange believes that this extension will provide the time necessary for the Exchange, the New York Stock Exchange LLC (‘‘NYSE’’), and the Financial Industry Regulatory Authority, Inc. (‘‘FINRA’’) to harmonize their respective rules concerning customer order protection to achieve a standardized industry practice.4 Background: On July 5, 2007, the Commission approved amendments to NYSE Rule 92 to permit riskless principal trading at the NYSE.5 These amendments were filed in part to begin the harmonization process between NYSE Rule 92 and FINRA’s Manning Rule.6 In connection with those amendments, the NYSE implemented for an operative date of January 16, 2008, NYSE Rule 92(c)(3), which permits NYSE member organizations to submit riskless 4 NYSE has filed a companion rule filing to conform its Rules to the changes proposed in this filing. See SR–NYSE–2010–52, formally submitted July 9, 2010. 5 See Securities Exchange Act Release No. 56017 (Jul. 5, 2007), 72 FR 38110 (Jul. 12, 2007) (SR– NYSE–2007–21). 6 See NASD Rule 2111 and IM–2110–2. E:\FR\FM\27JYN1.SGM 27JYN1 Federal Register / Vol. 75, No. 143 / Tuesday, July 27, 2010 / Notices sroberts on DSKD5P82C1PROD with NOTICES principal orders to the NYSE, but requires them to submit to a designated NYSE database a report of the execution of the facilitated order. That rule also requires members to submit to that same database sufficient information to provide an electronic link of the execution of the facilitated order to all of the underlying orders. For purposes of NYSE Rule 92(c)(3), the NYSE informed member organizations that when executing riskless principal transactions, firms must submit order execution reports to the NYSE’s Front End Systemic Capture (‘‘FESC’’) database linking the execution of the riskless principal order on the NYSE to the specific underlying orders. The information provided must be sufficient for both member firms and the NYSE to reconstruct in a timesequenced manner all orders, including allocations to the underlying orders, with respect to which a member organization is claiming the riskless principal exception. Because the rule change required both the NYSE and member organizations to make certain changes to their trading and order management systems, the NYSE filed to delay to May 14, 2008 the operative date of the NYSE Rule 92(c)(3) requirements, including submitting endof-day allocation reports for riskless principal transactions and using the riskless principal account type indicator.7 The NYSE filed for additional extensions of the operative date of Rule 92(c)(3) to December 31, 2009.8 Because NYSE Amex adopted NYSE Rule 92 in its then current form,9 the delayed operative date for the NYSE Rule 92(c)(3) reporting requirements also applied for NYSE Amex Equities Rule 92(c)(3) reporting requirements and the Exchange filed for additional extensions of the operative date, the 7 See Securities Exchange Act Release No. 56968 (Dec. 14, 2007), 72 FR 72432 (Dec. 20, 2007) (SR– NYSE–2007–114). 8 See Securities Exchange Act Release Nos. 57682 (Apr. 17, 2008), 73 FR 22193 (Apr. 24, 2008) (SR– NYSE–2008–29); 59621 (Mar. 23, 2009), 74 FR 14179 (Mar. 30, 2009) (SR–NYSE–2009–30); 60396 (July 30, 2009), 74 FR 39126 (Aug. 5, 2009) (SR– NYSE–2009–73); and 61251 (Dec. 29, 2009), 75 FR 482 (Jan. 5, 2010) (SR–NYSE–2009–129). 9 The NYSE Amex Equities Rules, which became operative on December 1, 2008, are substantially identical to the current NYSE Rules 1–1004 and the Exchange continues to update the NYSE Amex Equities Rules as necessary to conform with rule changes to corresponding NYSE Rules filed by the NYSE. See Securities Exchange Act Release Nos. 58705 (Oct. 1, 2008), 73 FR 58995 (Oct. 8, 2008) (SR–Amex–2008–63); 58833 (Oct. 22, 2008), 73 FR 64642 (Oct. 30, 2008) (SR–NYSE–2008–106); 58839 (Oct. 23, 2008), 73 FR 64645 (October 30, 2008) (SR–NYSEALTR–2008–03); 59022 (Nov. 26, 2008), 73 FR 73683 (Dec. 3, 2008) (SR–NYSEALTR–2008– 10); and 59027 (Nov. 28, 2008), 73 FR 73681 (Dec. 3, 2008) (SR–NYSEALTR–2008–11). VerDate Mar<15>2010 16:30 Jul 26, 2010 Jkt 220001 most recent of which was an extension to July 31, 2010.10 Request for Extension: FINRA, NYSE, and the Exchange have been working diligently on fully harmonizing their respective rules, including reviewing the possibilities for a uniform reporting standard for riskless principal transactions. However, because of the complexity of the existing customer order protection rules, including the need for input from industry participants as well as Commission approval, the Exchange, NYSE, and FINRA will not have harmonized their respective customer order protection rules by the current July 31, 2010 date for the implementation of the FESC riskless principal reporting. The Exchange notes that it has agreed with NYSE and FINRA to pursue efforts to harmonize customer order protection rules. On December 10, 2009, FINRA filed with the Commission its rule proposal to adopt a new industry standard for customer order protection as proposed FINRA Rule 5320.11 That proposed filing is based on the draft rule text that FINRA and NYSE Regulation each circulated to their respective member participants and includes copies of the comment letters that FINRA and NYSE Regulation received on the rule proposal. The Exchange intends to adopt a new customer order protection rule that is substantially identical to proposed FINRA Rule 5320. FINRA has filed to extend the time for Commission action on its rule filing to adopt proposed FINRA Rule 5320 to July 16, 2010. As proposed by FINRA, however, its proposed new rule will not be effective upon approval. Rather, the rule filing will become effective at a later date, not yet known, in order to provide time for FINRA, NYSE, and market participants to implement programming changes associated with the proposed new rule. The Exchange continues to believe that pending full harmonization of the respective customer order protection rules, it would be premature to require firms to meet the current Rule 92(c)(3) FESC reporting requirements.12 Indeed, having differing reporting standards for riskless principal orders would be 10 See Securities Exchange Act Release Nos. 59620 (Mar. 23, 2009), 74 FR 14176 (Mar. 30, 2009) (SR–NYSEALTR–2009–29); 60397 (July 30, 2009), 74 FR 39128 (Aug. 5, 2009) (SR–NYSEAmex–2009– 48); and 61250 (Dec. 29, 2009), 75 FR 477 (Jan. 5, 2010) (SR–NYSEAmex–2009–92). 11 See SR–FINRA–2009–090 (December 10, 2009). 12 The Exchange notes that it would also need to make technological changes to implement the proposed FESC reporting solution for Rule 92(c)(3). PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 44041 inconsistent with the overall goal of the harmonization process. Accordingly, to provide the Exchange, NYSE, and FINRA the time necessary to obtain Commission approval for and implement a harmonized rule set that would apply across their respective marketplaces, including a harmonized approach to riskless principal trade reporting, the Exchange is proposing to delay the operative date for NYSE Amex Equities Rule 92(c)(3) from July 31, 2010 to December 31, 2010. Pending the harmonization of the three rules, the Exchange will continue to require that, as of the date each member organization implements riskless principal routing, the member organizations have in place systems and controls that allow them to easily match and tie riskless principal execution on the Exchange to the underlying orders and that they be able to provide this information to the Exchange upon request. To make clear that this requirement continues, the Exchange proposes to amend supplementary material .95 to Rule 92 to specifically provide that the Rule 92(c)(3) reporting requirements are suspended until December 31, 2010 and that member organizations are required to have in place such systems and controls relating to their riskless principal executions on the Exchange. Moreover, the Exchange will coordinate with NYSE and FINRA to examine for compliance with the rule requirements for those firms that engage in riskless principal trading under Rule 92(c). 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’),13 in general, and furthers the objectives of Section 6(b)(5) of the Act,14 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, 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 the proposed extension provides the Exchange, NYSE, and FINRA the time necessary to develop a harmonized rule concerning customer order protection that will enable member organizations to participate in the national market system without unnecessary impediments. 13 15 14 15 E:\FR\FM\27JYN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(5). 27JYN1 44042 Federal Register / Vol. 75, No. 143 / Tuesday, July 27, 2010 / Notices 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 foregoing 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, it has become effective pursuant to Section 19(b)(3)(A) of the Act 15 and Rule 19b–4(f)(6) thereunder.16 The Exchange has requested the Commission to waive the 30-day operative delay so that the Exchange can extend the operative date of NYSE Amex Equities Rule 92(c)(3) without interruption. The Exchange notes that extending the delayed operative date of Rule 92(c)(3) from July 31, 2010 to December 31, 2010 will provide sufficient time for the Exchange, NYSE, and FINRA to obtain Commission approval for and implement a harmonized approach to customer order protection rules, including how riskless principal transactions should be reported. The Commission hereby grants the Exchange’s request and believes such waiver is consistent with the protection of investors and the public interest.17 Accordingly, the Commission designates the proposed rule change 15 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the self-regulatory organization to submit to the Commission written 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. The Exchange has satisfied this requirement. 17 For purposes only of waiving the 30-day operative delay of this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). sroberts on DSKD5P82C1PROD with NOTICES 16 17 VerDate Mar<15>2010 16:30 Jul 26, 2010 Jkt 220001 operative upon filing with the Commission. 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 Number SR–NYSEAmex-2010–70 on the subject line. you wish to make available publicly. All submissions should refer to File Number SR–NYSEAmex-2010–70 and should be submitted on or before August 17, 2010. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.18 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–18408 Filed 7–26–10; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–62541; File No. SR–NYSE– 2010–52] Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by New York Stock Exchange LLC Extending the Operative Date of NYSE Rule 92(c)(3) From July 31, 2010 to December 31, 2010 July 21, 2010. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the Paper Comments ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 • Send paper comments in triplicate notice is hereby given that on July 9, to Elizabeth M. Murphy, Secretary, 2010, New York Stock Exchange LLC Securities and Exchange Commission, (‘‘NYSE’’ or the ‘‘Exchange’’) filed with 100 F Street, NE., Washington, DC the Securities and Exchange 20549–1090. Commission (the ‘‘Commission’’) the All submissions should refer to File proposed rule change as described in Number SR–NYSEAmex-2010–70. This Items I and II below, which Items have file number should be included on the subject line if e-mail is used. To help the been prepared by the self-regulatory organization. The Commission is Commission process and review your publishing this notice to solicit comments more efficiently, please use only one method. The Commission will comments on the proposed rule change post all comments on the Commission’s from interested persons. Internet Web site (https://www.sec.gov/ I. Self-Regulatory Organization’s rules/sro.shtml). Copies of the Statement of the Terms of Substance of submission, all subsequent the Proposed Rule Change amendments, all written statements The Exchange proposes to extend the with respect to the proposed rule operative date of NYSE Rule 92(c)(3) change that are filed with the from July 31, 2010 to December 31, Commission, and all written 2010. The text of the proposed rule communications relating to the change is available at the Exchange, the proposed rule change between the Commission’s Web site at https:// Commission and any person, other than www.sec.gov, the Commission’s Public those that may be withheld from the Reference Room, and https:// public in accordance with the www.nyse.com. provisions of 5 U.S.C. 552, will be available for Web site viewing and II. Self-Regulatory Organization’s printing in the Commission’s Public Statement of the Purpose of, and Reference Room on official business Statutory Basis for, the Proposed Rule days between the hours of 10 a.m. and Change 3 p.m. Copies of such filing also will be In its filing with the Commission, the available for inspection and copying at self-regulatory organization included the principal office of the Exchange. All statements concerning the purpose of, comments received will be posted without change; the Commission does 18 17 CFR 200.30–3(a)(12). not edit personal identifying 1 15 U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. information from submissions. You 3 17 CFR 240.19b–4. should submit only information that PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 E:\FR\FM\27JYN1.SGM 27JYN1

Agencies

[Federal Register Volume 75, Number 143 (Tuesday, July 27, 2010)]
[Notices]
[Pages 44040-44042]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-18408]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62540; File No. SR-NYSEAmex-2010-70]


 Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC Extending the 
Operative Date of NYSE Amex Equities Rule 92(c)(3) From July 31, 2010 
to December 31, 2010

July 21, 2010.
    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 July 9, 2010, NYSE Amex LLC (the ``Exchange'' or ``NYSE 
Amex'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. The 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 extend the operative date of NYSE Amex 
Equities Rule 92(c)(3) from July 31, 2010 to December 31, 2010. The 
text of the proposed rule change is available at the Exchange, the 
Commission's Web site at https://www.sec.gov, 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to extend the delayed operative date of 
Rule 92(c)(3) from July 31, 2010 to December 31, 2010. The Exchange 
believes that this extension will provide the time necessary for the 
Exchange, the New York Stock Exchange LLC (``NYSE''), and the Financial 
Industry Regulatory Authority, Inc. (``FINRA'') to harmonize their 
respective rules concerning customer order protection to achieve a 
standardized industry practice.\4\
---------------------------------------------------------------------------

    \4\ NYSE has filed a companion rule filing to conform its Rules 
to the changes proposed in this filing. See SR-NYSE-2010-52, 
formally submitted July 9, 2010.
---------------------------------------------------------------------------

    Background:
    On July 5, 2007, the Commission approved amendments to NYSE Rule 92 
to permit riskless principal trading at the NYSE.\5\ These amendments 
were filed in part to begin the harmonization process between NYSE Rule 
92 and FINRA's Manning Rule.\6\ In connection with those amendments, 
the NYSE implemented for an operative date of January 16, 2008, NYSE 
Rule 92(c)(3), which permits NYSE member organizations to submit 
riskless

[[Page 44041]]

principal orders to the NYSE, but requires them to submit to a 
designated NYSE database a report of the execution of the facilitated 
order. That rule also requires members to submit to that same database 
sufficient information to provide an electronic link of the execution 
of the facilitated order to all of the underlying orders.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 56017 (Jul. 5, 
2007), 72 FR 38110 (Jul. 12, 2007) (SR-NYSE-2007-21).
    \6\ See NASD Rule 2111 and IM-2110-2.
---------------------------------------------------------------------------

    For purposes of NYSE Rule 92(c)(3), the NYSE informed member 
organizations that when executing riskless principal transactions, 
firms must submit order execution reports to the NYSE's Front End 
Systemic Capture (``FESC'') database linking the execution of the 
riskless principal order on the NYSE to the specific underlying orders. 
The information provided must be sufficient for both member firms and 
the NYSE to reconstruct in a time-sequenced manner all orders, 
including allocations to the underlying orders, with respect to which a 
member organization is claiming the riskless principal exception.
    Because the rule change required both the NYSE and member 
organizations to make certain changes to their trading and order 
management systems, the NYSE filed to delay to May 14, 2008 the 
operative date of the NYSE Rule 92(c)(3) requirements, including 
submitting end-of-day allocation reports for riskless principal 
transactions and using the riskless principal account type 
indicator.\7\ The NYSE filed for additional extensions of the operative 
date of Rule 92(c)(3) to December 31, 2009.\8\ Because NYSE Amex 
adopted NYSE Rule 92 in its then current form,\9\ the delayed operative 
date for the NYSE Rule 92(c)(3) reporting requirements also applied for 
NYSE Amex Equities Rule 92(c)(3) reporting requirements and the 
Exchange filed for additional extensions of the operative date, the 
most recent of which was an extension to July 31, 2010.\10\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 56968 (Dec. 14, 
2007), 72 FR 72432 (Dec. 20, 2007) (SR-NYSE-2007-114).
    \8\ See Securities Exchange Act Release Nos. 57682 (Apr. 17, 
2008), 73 FR 22193 (Apr. 24, 2008) (SR-NYSE-2008-29); 59621 (Mar. 
23, 2009), 74 FR 14179 (Mar. 30, 2009) (SR-NYSE-2009-30); 60396 
(July 30, 2009), 74 FR 39126 (Aug. 5, 2009) (SR-NYSE-2009-73); and 
61251 (Dec. 29, 2009), 75 FR 482 (Jan. 5, 2010) (SR-NYSE-2009-129).
    \9\ The NYSE Amex Equities Rules, which became operative on 
December 1, 2008, are substantially identical to the current NYSE 
Rules 1-1004 and the Exchange continues to update the NYSE Amex 
Equities Rules as necessary to conform with rule changes to 
corresponding NYSE Rules filed by the NYSE. See Securities Exchange 
Act Release Nos. 58705 (Oct. 1, 2008), 73 FR 58995 (Oct. 8, 2008) 
(SR-Amex-2008-63); 58833 (Oct. 22, 2008), 73 FR 64642 (Oct. 30, 
2008) (SR-NYSE-2008-106); 58839 (Oct. 23, 2008), 73 FR 64645 
(October 30, 2008) (SR-NYSEALTR-2008-03); 59022 (Nov. 26, 2008), 73 
FR 73683 (Dec. 3, 2008) (SR-NYSEALTR-2008-10); and 59027 (Nov. 28, 
2008), 73 FR 73681 (Dec. 3, 2008) (SR-NYSEALTR-2008-11).
    \10\ See Securities Exchange Act Release Nos. 59620 (Mar. 23, 
2009), 74 FR 14176 (Mar. 30, 2009) (SR-NYSEALTR-2009-29); 60397 
(July 30, 2009), 74 FR 39128 (Aug. 5, 2009) (SR-NYSEAmex-2009-48); 
and 61250 (Dec. 29, 2009), 75 FR 477 (Jan. 5, 2010) (SR-NYSEAmex-
2009-92).
---------------------------------------------------------------------------

    Request for Extension:
    FINRA, NYSE, and the Exchange have been working diligently on fully 
harmonizing their respective rules, including reviewing the 
possibilities for a uniform reporting standard for riskless principal 
transactions. However, because of the complexity of the existing 
customer order protection rules, including the need for input from 
industry participants as well as Commission approval, the Exchange, 
NYSE, and FINRA will not have harmonized their respective customer 
order protection rules by the current July 31, 2010 date for the 
implementation of the FESC riskless principal reporting.
    The Exchange notes that it has agreed with NYSE and FINRA to pursue 
efforts to harmonize customer order protection rules. On December 10, 
2009, FINRA filed with the Commission its rule proposal to adopt a new 
industry standard for customer order protection as proposed FINRA Rule 
5320.\11\ That proposed filing is based on the draft rule text that 
FINRA and NYSE Regulation each circulated to their respective member 
participants and includes copies of the comment letters that FINRA and 
NYSE Regulation received on the rule proposal. The Exchange intends to 
adopt a new customer order protection rule that is substantially 
identical to proposed FINRA Rule 5320.
---------------------------------------------------------------------------

    \11\ See SR-FINRA-2009-090 (December 10, 2009).
---------------------------------------------------------------------------

    FINRA has filed to extend the time for Commission action on its 
rule filing to adopt proposed FINRA Rule 5320 to July 16, 2010. As 
proposed by FINRA, however, its proposed new rule will not be effective 
upon approval. Rather, the rule filing will become effective at a later 
date, not yet known, in order to provide time for FINRA, NYSE, and 
market participants to implement programming changes associated with 
the proposed new rule.
    The Exchange continues to believe that pending full harmonization 
of the respective customer order protection rules, it would be 
premature to require firms to meet the current Rule 92(c)(3) FESC 
reporting requirements.\12\ Indeed, having differing reporting 
standards for riskless principal orders would be inconsistent with the 
overall goal of the harmonization process.
---------------------------------------------------------------------------

    \12\ The Exchange notes that it would also need to make 
technological changes to implement the proposed FESC reporting 
solution for Rule 92(c)(3).
---------------------------------------------------------------------------

    Accordingly, to provide the Exchange, NYSE, and FINRA the time 
necessary to obtain Commission approval for and implement a harmonized 
rule set that would apply across their respective marketplaces, 
including a harmonized approach to riskless principal trade reporting, 
the Exchange is proposing to delay the operative date for NYSE Amex 
Equities Rule 92(c)(3) from July 31, 2010 to December 31, 2010.
    Pending the harmonization of the three rules, the Exchange will 
continue to require that, as of the date each member organization 
implements riskless principal routing, the member organizations have in 
place systems and controls that allow them to easily match and tie 
riskless principal execution on the Exchange to the underlying orders 
and that they be able to provide this information to the Exchange upon 
request. To make clear that this requirement continues, the Exchange 
proposes to amend supplementary material .95 to Rule 92 to specifically 
provide that the Rule 92(c)(3) reporting requirements are suspended 
until December 31, 2010 and that member organizations are required to 
have in place such systems and controls relating to their riskless 
principal executions on the Exchange. Moreover, the Exchange will 
coordinate with NYSE and FINRA to examine for compliance with the rule 
requirements for those firms that engage in riskless principal trading 
under Rule 92(c).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\13\ in 
general, and furthers the objectives of Section 6(b)(5) of the Act,\14\ 
in particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, 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 the proposed extension provides the Exchange, NYSE, and FINRA 
the time necessary to develop a harmonized rule concerning customer 
order protection that will enable member organizations to participate 
in the national market system without unnecessary impediments.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).

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[[Page 44042]]

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 foregoing 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, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \15\ 
and Rule 19b-4(f)(6) thereunder.\16\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to the 
Commission written 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. The Exchange has satisfied this requirement.
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    The Exchange has requested the Commission to waive the 30-day 
operative delay so that the Exchange can extend the operative date of 
NYSE Amex Equities Rule 92(c)(3) without interruption. The Exchange 
notes that extending the delayed operative date of Rule 92(c)(3) from 
July 31, 2010 to December 31, 2010 will provide sufficient time for the 
Exchange, NYSE, and FINRA to obtain Commission approval for and 
implement a harmonized approach to customer order protection rules, 
including how riskless principal transactions should be reported. The 
Commission hereby grants the Exchange's request and believes such 
waiver is consistent with the protection of investors and the public 
interest.\17\ Accordingly, the Commission designates the proposed rule 
change operative upon filing with the Commission.
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    \17\ For purposes only of waiving the 30-day operative delay of 
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.

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-NYSEAmex-2010-70 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-2010-70. 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 such 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-NYSEAmex-2010-70 and should be submitted on or before 
August 17, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-18408 Filed 7-26-10; 8:45 am]
BILLING CODE 8010-01-P
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