Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 123C-NYSE Amex Equities To Clarify That Exchange Systems Enforce Rule 123C With Respect to Market At-The-Close and Limit At-The-Close Order Entry After 3:45 p.m., 80087-80088 [2010-31926]

Download as PDF Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 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. 34–63537; File No. SR– NYSEAmex–2010–110] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 123C— NYSE Amex Equities To Clarify That Exchange Systems Enforce Rule 123C With Respect to Market At-The-Close and Limit At-The-Close Order Entry After 3:45 p.m. December 14, 2010. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) and Rule 19b–4 thereunder,2 notice is hereby given that on December 6, 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. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Rule 123C—NYSE Amex Equities to clarify that Exchange systems enforce Rule 123C with respect to Market AtThe-Close (‘‘MOC’’) and Limit At-TheClose (‘‘LOC’’) order entry after 3:45 p.m. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and https://www.nyse.com. srobinson on DSKHWCL6B1PROD 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 20:40 Dec 20, 2010 Jkt 223001 1. Purpose The purpose of this proposed rule change is to amend Rule 123C—NYSE Amex Equities to clarify that Exchange systems enforce Rule 123C with respect to MOC 3 and LOC 4 order entry after 3:45 p.m. Rule 123C governs certain closing procedures on the Exchange, including MOC, LOC and CO order entry, cancellation of such orders and the calculation and publication of imbalances. In particular, Rule 123C(2)(b) currently provides that MOC/ LOC interest may be entered after 3:45 p.m. only to offset a Mandatory MOC/ LOC Imbalance Publication. The rule therefore suggests that members or member organizations entering MOC or LOC orders are actively responsible for compliance therewith (e.g., ‘‘orders may be entered’’). However, Exchange systems enforce compliance with this rule pursuant to system functionality that allows only the entry of offsetting MOC/LOC interest after 3:45 p.m. and blocks the entry of all MOC/LOC orders that would join the same side of a published MOC/LOC imbalance and the entry of MOC/LOC orders after 3:45 p.m. for securities for which there has not been a Mandatory MOC/LOC Imbalance Publication.5 Exchange systems also enforce compliance with this rule pursuant to system functionality that allows or blocks, depending upon the circumstances, MOC/LOC order entry in the event of a Trading Halt. The Exchange proposes to amend Rule 123C(2) and (3) generally to clarify that Exchange systems enforce compliance with the rules, and therefore clarify that members and member organizations are not responsible for ensuring compliance with this aspect of the rule. The Exchange proposes additional clean-up amendments to Rule 123C. Specifically, the Exchange proposes to 3 A MOC order is a market order in a security that, by its terms, is to be executed in its entirety at the closing price. If not executed due to tick restrictions or a trading halt, the order will be cancelled. See Rule 13—NYSE Amex Equities (Definitions of Orders). 4 A LOC order is a limit order in a security that is entered for execution at the closing price of the security on the Exchange provided that the closing price is at or within the specified limit. If not executed due to a trading halt or because, by its terms it is not marketable at the closing price, the order will be cancelled. See Rule 13—NYSE Amex Equities (Definitions of Orders). 5 See Information Memos 09–12 and 10–11, respectively. PO 00000 Frm 00054 Fmt 4703 Sfmt 4703 80087 delete certain text in Rule 123C(2)(b)(ii) 6 and 123C(2)(c)(iii) 7 pertaining to a ‘‘no imbalance’’ notification after dissemination of an Informational Imbalance as well as the text of current Rule 123C(2)(b)(iii), because these provisions are no longer necessary due to the system-enforced compliance with MOC/LOC order entry. In addition, the Exchange proposes to amend Rule 123C(3)(c) to clarify that Exchange systems will reject cancellations of MOC, LOC and CO orders after 3:58 p.m. and to add a reference to Rule 123C(9), which pertains to alternative procedures in the case of extreme order imbalances at the close. Because the Exchange previously disclosed this system functionality to member organizations, the Exchange believes that this rule proposal would not require technical programming and/ or modification by members or member organizations. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act,8 in general, and furthers the objectives of Section 6(b)(5) of the Act,9 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. Specifically, the changes proposed herein would reflect that Exchange systems enforce compliance with Rule 123C(2) and (3) and therefore clarify that Exchange members and member organizations are not responsible for ensuring such compliance. 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. 6 See email from Clare F. Saperstein, Vice President, Regulatory Policy and Management, NYSE Regulation, Inc., to Nathan Saunders, Special Counsel, Division of Trading and Markets, Commission, dated December 10, 2010 (amending the proposed rule change by replacing the reference to ‘‘Rule 123C(2) and (3)’’ with ‘‘Rule 123C(2)(b)(ii) and 123C(2)(c)(iii)’’). 7 See id. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). E:\FR\FM\21DEN1.SGM 21DEN1 80088 Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices 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 III. Date of Effectiveness of the change that are filed with the Proposed Rule Change and Timing for Commission, and all written Commission Action communications relating to the proposed rule change between the The foregoing proposed rule change Commission and any person, other than will take effect upon filing with the those that may be withheld from the Commission pursuant to Section 19(b)(3)(A)(i) of the Act 10 and Rule 19b– public in accordance with the provisions of 5 U.S.C. 552, will be 4(f)(1) thereunder,11 because it available for Web site viewing and constitutes a stated policy, practice, or printing in the Commission’s Public interpretation with respect to the Reference Room, 100 F Street, NE., meaning, administration, or Washington, DC 20549, on official enforcement of an existing rule. business days between the hours of 10 Specifically, the change proposed a.m. and 3 p.m. Copies of the filing also herein would reflect that Exchange will be available for inspection and systems enforce compliance with Rule copying at the principal office of the 123C(2) and (3) and therefore clarify Exchange. All comments received will that Exchange members and member be posted without change; the organizations are not responsible for Commission does not edit personal ensuring such compliance. identifying information from At any time within 60 days of the submissions. You should submit only filing of the proposed rule change, the information that you wish to make Commission summarily may temporarily suspend such rule change if available publicly. All submissions should refer to File Number SR– it appears to the Commission that such action is necessary or appropriate in the NYSEAmex–2010–110 and should be submitted on or before January 11, 2011. public interest, for the protection of investors, or otherwise in furtherance of For the Commission, by the Division of Trading and Markets, pursuant to delegated 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. 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: srobinson on DSKHWCL6B1PROD 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–NYSEAmex–2010–110 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–2010–110. This file number should be included on the subject line if e-mail is used. To help the Commission process and review 11 17 BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–31926 Filed 12–20–10; 8:45 am] [Release No. 34–63545; File No. SR–NYSE– 2010–82] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend for 12 Months the Pilot Program Permitting the Exchange’s Ownership Interest in BIDS Holdings L.P. (BIDS) and the Affiliation of BIDS With the New York Block Exchange LLC December 14, 2010. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’)F 1F and Rule 19b–4 thereunder,2 notice is hereby given that, on December 9, 2010, the New York Stock Exchange LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. U.S.C. 78s(b)(3)(A)(i). CFR 240.19b–4(f)(1). VerDate Mar<15>2010 20:40 Dec 20, 2010 Jkt 223001 I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend for an additional 12 months the January 22, 2011 expiration date of the pilot program that provides an exception to NYSE Rule 2B by permitting the Exchange’s equity ownership interest in BIDS Holdings L.P. (‘‘BIDS’’), which is the parent company of a member of the Exchange, and BIDS’s affiliation with the New York Block Exchange LLC, an affiliate of the Exchange. There is no proposed rule text. 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. 12 17 10 15 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. PO 00000 Frm 00055 Fmt 4703 Sfmt 4703 1. Purpose On January 22, 2009, the Commission approved the governance structure proposed by the Exchange with respect to the New York Block Exchange (‘‘NYBX’’), a new electronic trading facility of the Exchange for NYSE-listed securities that was established by means of a joint venture between the Exchange and BIDS.3 The governance structure that was approved is reflected in the Limited Liability Company Agreement of New York Block Exchange LLC (the ‘‘Company’’), the entity that owns and operates NYBX. Under the governance structure approved by the Commission, the Exchange and BIDS each own a 50% economic interest in the Company. In 3 See Securities Exchange Act Release No. 59281 (January 22, 2009), 74 FR 5014 (January 28, 2009) (order approving SR–NYSE–2008–120) (‘‘Approval Order’’). E:\FR\FM\21DEN1.SGM 21DEN1

Agencies

[Federal Register Volume 75, Number 244 (Tuesday, December 21, 2010)]
[Notices]
[Pages 80087-80088]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31926]



[[Page 80087]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63537; File No. SR-NYSEAmex-2010-110]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Rule 
123C--NYSE Amex Equities To Clarify That Exchange Systems Enforce Rule 
123C With Respect to Market At-The-Close and Limit At-The-Close Order 
Entry After 3:45 p.m.

December 14, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on December 6, 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\ 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 Rule 123C--NYSE Amex Equities to 
clarify that Exchange systems enforce Rule 123C with respect to Market 
At-The-Close (``MOC'') and Limit At-The-Close (``LOC'') order entry 
after 3:45 p.m. The text of the proposed 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 purpose of this proposed rule change is to amend Rule 123C--
NYSE Amex Equities to clarify that Exchange systems enforce Rule 123C 
with respect to MOC \3\ and LOC \4\ order entry after 3:45 p.m.
---------------------------------------------------------------------------

    \3\ A MOC order is a market order in a security that, by its 
terms, is to be executed in its entirety at the closing price. If 
not executed due to tick restrictions or a trading halt, the order 
will be cancelled. See Rule 13--NYSE Amex Equities (Definitions of 
Orders).
    \4\ A LOC order is a limit order in a security that is entered 
for execution at the closing price of the security on the Exchange 
provided that the closing price is at or within the specified limit. 
If not executed due to a trading halt or because, by its terms it is 
not marketable at the closing price, the order will be cancelled. 
See Rule 13--NYSE Amex Equities (Definitions of Orders).
---------------------------------------------------------------------------

    Rule 123C governs certain closing procedures on the Exchange, 
including MOC, LOC and CO order entry, cancellation of such orders and 
the calculation and publication of imbalances. In particular, Rule 
123C(2)(b) currently provides that MOC/LOC interest may be entered 
after 3:45 p.m. only to offset a Mandatory MOC/LOC Imbalance 
Publication. The rule therefore suggests that members or member 
organizations entering MOC or LOC orders are actively responsible for 
compliance therewith (e.g., ``orders may be entered''). However, 
Exchange systems enforce compliance with this rule pursuant to system 
functionality that allows only the entry of offsetting MOC/LOC interest 
after 3:45 p.m. and blocks the entry of all MOC/LOC orders that would 
join the same side of a published MOC/LOC imbalance and the entry of 
MOC/LOC orders after 3:45 p.m. for securities for which there has not 
been a Mandatory MOC/LOC Imbalance Publication.\5\ Exchange systems 
also enforce compliance with this rule pursuant to system functionality 
that allows or blocks, depending upon the circumstances, MOC/LOC order 
entry in the event of a Trading Halt.
---------------------------------------------------------------------------

    \5\ See Information Memos 09-12 and 10-11, respectively.
---------------------------------------------------------------------------

    The Exchange proposes to amend Rule 123C(2) and (3) generally to 
clarify that Exchange systems enforce compliance with the rules, and 
therefore clarify that members and member organizations are not 
responsible for ensuring compliance with this aspect of the rule.
    The Exchange proposes additional clean-up amendments to Rule 123C. 
Specifically, the Exchange proposes to delete certain text in Rule 
123C(2)(b)(ii) \6\ and 123C(2)(c)(iii) \7\ pertaining to a ``no 
imbalance'' notification after dissemination of an Informational 
Imbalance as well as the text of current Rule 123C(2)(b)(iii), because 
these provisions are no longer necessary due to the system-enforced 
compliance with MOC/LOC order entry. In addition, the Exchange proposes 
to amend Rule 123C(3)(c) to clarify that Exchange systems will reject 
cancellations of MOC, LOC and CO orders after 3:58 p.m. and to add a 
reference to Rule 123C(9), which pertains to alternative procedures in 
the case of extreme order imbalances at the close.
---------------------------------------------------------------------------

    \6\ See email from Clare F. Saperstein, Vice President, 
Regulatory Policy and Management, NYSE Regulation, Inc., to Nathan 
Saunders, Special Counsel, Division of Trading and Markets, 
Commission, dated December 10, 2010 (amending the proposed rule 
change by replacing the reference to ``Rule 123C(2) and (3)'' with 
``Rule 123C(2)(b)(ii) and 123C(2)(c)(iii)'').
    \7\ See id.
---------------------------------------------------------------------------

    Because the Exchange previously disclosed this system functionality 
to member organizations, the Exchange believes that this rule proposal 
would not require technical programming and/or modification by members 
or member organizations.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ 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. Specifically, 
the changes proposed herein would reflect that Exchange systems enforce 
compliance with Rule 123C(2) and (3) and therefore clarify that 
Exchange members and member organizations are not responsible for 
ensuring such compliance.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

[[Page 80088]]

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 foregoing proposed rule change will take effect upon filing 
with the Commission pursuant to Section 19(b)(3)(A)(i) of the Act \10\ 
and Rule 19b-4(f)(1) thereunder,\11\ because it constitutes a stated 
policy, practice, or interpretation with respect to the meaning, 
administration, or enforcement of an existing rule. Specifically, the 
change proposed herein would reflect that Exchange systems enforce 
compliance with Rule 123C(2) and (3) and therefore clarify that 
Exchange members and member organizations are not responsible for 
ensuring such compliance.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A)(i).
    \11\ 17 CFR 240.19b-4(f)(1).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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-2010-110 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-2010-110. 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-
NYSEAmex-2010-110 and should be submitted on or before January 11, 
2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-31926 Filed 12-20-10; 8:45 am]
BILLING CODE 8011-01-P
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