[Federal Register Volume 75, Number 123 (Monday, June 28, 2010)]
[Notices]
[Pages 36736-36737]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15597]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62357; File No. SR-NYSEAmex--2010-54]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex
Equities Rule 1000 Regarding Order Size Eligible for Automatic
Execution
June 22, 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 June 17, 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.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 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 amend NYSE Amex Equities Rule 1000
regarding order size eligible for automatic execution. The text of the
proposed rule change is available at the Exchange, the Commission's
Public Reference Room, the Commission's Web site at http://www.sec.gov,
and http://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 Exchange proposes to amend Rule 1000 to state that the order
size eligible for automatic execution is 1,000,000 shares and to
provide that upon advance notice to market participants, the Exchange
may increase the order size eligible for automatic executions up to
5,000,000 shares on a security-by-security basis. In addition, the
Exchange proposes to raise the maximum order size accepted by Exchange
systems to 25,000,000 shares.
Background
Currently, the maximum order size eligible for automatic execution
is 1,000,000 shares. This limit is reflected in Exchange and New York
Stock Exchange LLC (``NYSE'') rule filings that have been approved by
the Commission, but it is not specifically stated in Rule 1000. In
2006, as part of the approval of the NYSE Hybrid Model, the NYSE
amended NYSE Rule 1000 to provide for a phased-in increase of order
size eligibility for automatic execution to a maximum size of
3,000,000, but noted that the then-current order size eligibility for
automatic execution was 1,000,000 shares.\4\ The NYSE determined not to
raise the 1,000,000 share maximum in order to avoid any possible issues
resulting from routing orders in excess of 1,000,000 shares to another
market as other markets also do not offer automatic execution in size
greater than 1,000,000 shares.
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\4\ See Securities Exchange Act Release No. 54820 (November 26
[sic], 2006), 71 FR 70824 (December 6, 2006) (SR-NYSE-2006-65).
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In 2008, the NYSE implemented on a pilot basis its New Model
structure, which is also the model that governs trading at the
Exchange.\5\ Among other things, the NYSE's New Model filing included
amendments to Rule 1000 to provide for a phased-in increase of order
size eligibility for automatic execution from 3,000,000 shares to a
maximum of 6,500,000 shares. At that time, the NYSE intended to raise
the maximum order size accepted by NYSE systems to 6,500,000 shares.
While the rule text states that the order size eligibility is 3,000,000
shares, the New Model filing indicates that the maximum order size
eligible for automatic execution is 1,000,000 shares and states that
the purpose of the amendment to Rule 1000 was to provide for a new
potential maximum order ``size eligibility'' of 6,500,000 shares.
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\5\ 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); No. 58833 (Oct. 22, 2008), 73 FR 64642 (Oct. 30,
2008) (SR-NYSE-2008-106); No. 58839 (Oct. 23, 2008), 73 FR 64645
(October 30, 2008) (SR-NYSEALTR-2008-03); No. 59022 (Nov. 26, 2008),
73 FR 73683 (Dec. 3, 2008) (SR-NYSEALTR-2008-10); and No. 59027
(Nov. 28, 2008), 73 FR 73681 (Dec. 3, 2008) (SR-NYSEALTR-2008-11).
Among the rule changes that the Exchange has proposed to adopt is
the NYSE's New Model structure. See Securities Exchange Act Release
No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008) (SR-
NYSE-2008-46); See also Securities Exchange Act Release Nos. 60758
(October 1, 2009), 74 FR 51639 (October 7, 2009) (SR-NYSEAmex-2009-
65) (extending the operation of the New Model Pilot until the
earlier of Securities and Exchange Commission approval to make such
pilot permanent or November 30, 2009); 61030 (November 19, 2009), 74
FR 62365 (November 27, 2009) (SR-NYSEAmex-2009-83) (extending Pilot
to March 30, 2010); and 61725 (March 17, 2010), 75 FR 14223 (May
[sic] 24, 2010) (SR-NYSEAmex-2010-28) (extending the operation of
the NMM Pilot until the earlier of Securities and Exchange
Commission approval to make such pilot permanent or September 30,
2010).
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Proposed Amendment to NYSE Amex Equities Rule 1000
The Exchange proposes three amendments to NYSE Amex Equities Rule
1000. First, the Exchange proposes to amend Rule 1000 to state
specifically that orders up to 1,000,000 shares are eligible for
automatic execution. Second, the Exchange proposes that upon at least
24 hours advance notice to market participants, the execution size of
automatic executions may be increased up to 5,000,000 shares on a
security-by-security basis. Determination of such securities will be
based on factors including the basis of average daily volume and price
over a calendar quarter. A list of such securities will be posted on
the Exchange Web site. Third, the Exchange proposes to amend Rule 1000
to state that Exchange systems shall accept a maximum order size of
25,000,000 shares.
The Exchange notes that parallel changes are proposed to be made to
the rules of the NYSE.\6\
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\6\ See SR-NYSE-2010-44.
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2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Act'')
\7\ for this proposed rule change is the requirement under Section
6(b)(5) \8\ that an exchange have rules that are designed to promote
just and equitable principles of trade, to remove
[[Page 36737]]
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 that the proposed rule change
accomplishes these goals by providing transparency regarding the order
size eligible for automatic execution, while providing for a mechanism
to increase that execution size on a security-by-security basis.
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\7\ 15 U.S.C. 78a.
\8\ 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: (i) Does not significantly affect
the protection of investors or the public interest; (ii) does not
impose any significant burden on competition; and (iii) does not become
operative for 30 days after the date of the filing, 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 \9\ and
Rule 19b-4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii)
under the Act, the Exchange is required to give 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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A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the
Act \11\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \12\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The Exchange
has requested that the Commission waive the 30-day operative delay.
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the operative delay is
consistent with the protection of investors and the public interest.
The proposed rule change clarifies the maximum order size accepted by
the Exchange's systems and the maximum order size eligible for
automatic execution. The proposed rule change also specifies that any
increases in the order size eligible for automatic execution will
require advance notice to Exchange members. In addition, the Exchange
represented that a list of such securities will be posted on its Web
site. For these reasons, the Commission believes that the proposed rule
change is consistent with the protection of investors and the public
interest, and designates the proposed rule change to be operative upon
filing with the Commission.\13\
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\13\ 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. 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 the 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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include File No.
SR-NYSEAmex-2010-54 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 No. SR-NYSEAmex-2010-54. 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,\14\ 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 such
filing also will be available for inspection and copying at the
principal office of NYSE Amex. 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 No. SR-NYSEAmex-2010-54 and should be submitted on or before July
19, 2010.
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\14\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2010-15597 Filed 6-25-10; 8:45 am]
BILLING CODE 8010-01-P