Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rule 123C 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., 80101-80102 [2010-31928]

Download as PDF Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–63538; File No. SR–NYSE– 2010–75] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of All submissions should refer to File Filing and Immediate Effectiveness of Number SR–CBOE–2010–106. This file Proposed Rule Change Amending Rule number should be included on the subject line if e-mail is used. To help the 123C To Clarify That Exchange Systems Enforce Rule 123C With Commission process and review your Respect to Market At-The-Close and comments more efficiently, please use only one method. The Commission will Limit At-The-Close Order Entry After post all comments on the Commission’s 3:45 p.m. Internet Web site (https://www.sec.gov/ December 14, 2010. rules/sro.shtml). Copies of the Pursuant to Section 19(b)(1) 1 of the submission, all subsequent Securities Exchange Act of 1934 (the amendments, all written statements ‘‘Act’’) and Rule 19b–4 thereunder,2 with respect to the proposed rule notice is hereby given that on December change that are filed with the 6, 2010, New York Stock Exchange LLC Commission, and all written (‘‘NYSE’’ or the ‘‘Exchange’’) filed with communications relating to the the Securities and Exchange proposed rule change between the Commission and any person, other than Commission (the ‘‘Commission’’) the proposed rule change as described in those that may be withheld from the Items I and II below, which Items have public in accordance with the been prepared by the self-regulatory provisions of 5 U.S.C. 552, will be organization. The Commission is available for website viewing and publishing this notice to solicit printing in the Commission’s Public comments on the proposed rule change Reference Room, 100 F Street, NE., from interested persons. Washington, DC 20549, on official business days between the hours of 10 I. Self-Regulatory Organization’s a.m. and 3 p.m. Copies of such filing Statement of the Terms of Substance of also will be available for inspection and the Proposed Rule Change copying at the principal office of the Exchange. All comments received will The Exchange proposes to amend be posted without change; the Rule 123C to clarify that Exchange Commission does not edit personal systems enforce Rule 123C with respect identifying information from to Market At-The-Close (‘‘MOC’’) and submissions. Limit At-The-Close (‘‘LOC’’) order entry after 3:45 p.m. The text of the proposed You should submit only information rule change is available at the Exchange, that you wish to make available the Commission’s Public Reference publicly. All submissions should refer Room, and https://www.nyse.com. to File Number SR–CBOE–2010–106 and should be submitted on or before II. Self-Regulatory Organization’s January 11, 2011. Statement of the Purpose of, and Statutory Basis for, the Proposed Rule For the Commission, by the Division of Trading and Markets, pursuant to delegated Change authority.8 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–31932 Filed 12–20–10; 8:45 am] srobinson on DSKHWCL6B1PROD with NOTICES BILLING CODE 8011–01–P 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 8 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 20:40 Dec 20, 2010 2 17 Jkt 223001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00068 Fmt 4703 Sfmt 4703 80101 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 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 delete certain text in Rule 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 (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 (Definitions of Orders). 5 See Information Memos 09–12 and 10–11, respectively. E:\FR\FM\21DEN1.SGM 21DEN1 80102 Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices 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 srobinson on DSKHWCL6B1PROD with NOTICES 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 e-mail 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). VerDate Mar<15>2010 20:40 Dec 20, 2010 Jkt 223001 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–NYSE– it appears to the Commission that such action is necessary or appropriate in the 2010–75 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: authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. 2010–31928 Filed 12–20–10; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION 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–2010–75 on the subject line. [Release No. 34–63536; File No. SR– NASDAQ–2010–163] 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–2010–75. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your December 14, 2010. Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Collection of Exchange Fees Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 2 thereunder, notice is hereby given that, on December 8, 2010, The NASDAQ Stock Market LLC (‘‘NASDAQ’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items 12 17 10 15 U.S.C. 78s(b)(3)(A)(i). 11 17 CFR 240.19b–4(f)(1). PO 00000 Frm 00069 Fmt 4703 Sfmt 4703 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 E:\FR\FM\21DEN1.SGM 21DEN1

Agencies

[Federal Register Volume 75, Number 244 (Tuesday, December 21, 2010)]
[Notices]
[Pages 80101-80102]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-31928]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63538; File No. SR-NYSE-2010-75]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Rule 123C 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, 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 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 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 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 (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 (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

[[Page 80102]]

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 e-mail 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.

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-NYSE-2010-75 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-2010-75. 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-NYSE-2010-75 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. 2010-31928 Filed 12-20-10; 8:45 am]
BILLING CODE 8011-01-P
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