[Federal Register Volume 75, Number 87 (Thursday, May 6, 2010)]
[Notices]
[Pages 25019-25020]
From the Federal Register Online via the Government Publishing 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.
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\1\ 15 U.S.C.78s(b)(1).
\2\ 17 CFR 240.19b-4.
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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 http://www.nyse.com, at the Exchange's principal
office, on the Commission's Web site at http://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.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
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\
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\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.
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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\
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\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).
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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
[[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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. 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 (http://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\
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\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