[Federal Register Volume 75, Number 125 (Wednesday, June 30, 2010)]
[Notices]
[Pages 37866-37868]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-15893]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-62368; File No. SR-NYSEARCA-2010-60]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending NYSE
Arca Equities Rule 7.11 To Set Forth How the Exchange Will Handle Order
Flow During a Regulatory Halt for a Security Listed on an Exchange
Other Than NYSE Arca
June 23, 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 22, 2010, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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 amend NYSE Arca Equities Rule 7.11 to set
forth how the Exchange will handle order flow during a regulatory halt
for a security listed on an exchange other than NYSE Arca. The text of
the proposed rule change is available at the Exchange, the Commission's
Public Reference Room, 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 NYSE Arca Equities Rule 7.11 to
revise how the Exchange will handle order flow during a regulatory halt
for a security listed on an exchange other than NYSE Arca.
Rule 7.11 was approved by the Commission on June 10, 2010.\4\ The
Exchange filed to amend Rule 7.11 to add subsection (f) to the Rule,
which addresses how orders will be handled when another primary listing
market issues a trading pause or a regulatory halt.\5\ Pursuant to Rule
7.11(f), upon the receipt of a trading pause or regulatory halt message
from another primary listing market, the Exchange will take the
following actions: (i) Maintain all resting orders in the Book; (ii)
cancel any unexecuted portion of Market Orders and Pegged Orders; (iii)
accept and process all cancellations; (iv) accept and route new Market
Orders to the
[[Page 37867]]
primary market; (v) accept and route PO and PO+ Orders to the primary
market; and (vi) reject all other orders until the stock has reopened.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 62252 (June 10,
2010), 75 FR 34186 (June 16, 2010) (SR-NYSEArca-2010-41).
\5\ See Securities Exchange Act Release No. 62281 (June 11,
2010), 75 FR 34504 (June 17, 2010) (SR-NYSEArca-2010-52).
---------------------------------------------------------------------------
Before the amendment to add section (f) to the Rule, the Exchange
accepted all entry and cancellation of orders during a regulatory halt
invoked by another market. While the Exchange believes that it is
appropriate during a regulatory halt to take the actions set forth in
Rule 7.11(f), the Exchange notes that not all regulatory halts have the
same basis and there are times when the Exchange believes that trading
should continue, notwithstanding whether another market has invoked a
regulatory halt. For example, if trading has halted on another market
because of an initial public offering, the Exchange believes it should
be able to accept order flow during such a halt.
To enable the Exchange to accept order flow during certain
regulatory halts, the Exchange proposes to revert back to how it
handled order flow during a regulatory halt before it amended Rule
7.11. As proposed, during a regulatory halt, the Exchange will continue
to accept all order entry and cancellation messages and will not reject
any orders during a regulatory halt. The Exchange therefore proposes to
amend Rule 7.11(f) to delete the reference to regulatory halts. The
Exchange will continue to follow the procedures set forth in Rule
7.11(f) when another primary listing market invokes a trading pause.
The Exchange also proposes a technical amendment to change the term
``Corporation'' to ``Exchange'' in Rule 7.11(d).
2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Securities Exchange Act of 1934 (the ``Act''),\6\ which requires
the rules of an exchange 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 proposed rule change also is
designed to support the principles of Section 11A(a)(1) \7\ of the Act
in that it seeks to assure fair competition among brokers and dealers
and among exchange markets. The Exchange believes that the proposed
rule meets these requirements in that it promotes transparency for how
order flow will be handled during a regulatory halt for a security
listed on an exchange other than NYSE Arca.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(5).
\7\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------
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 Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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 prior to
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 and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\11\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. 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 notes that
the Exchange, upon reflection, has decided to revert to its former
manner of handling orders during regulatory halts. The proposed rule
change does not raise any new substantive issues. For these reasons,
the Commission believes that the waiver of the 30-day operative delay
is consistent with the protection of investors and the public
interest.\12\
---------------------------------------------------------------------------
\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ 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. 15 U.S.C.
78c(f).
---------------------------------------------------------------------------
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 (http://www.sec.gov/rules/sro.shtml); or
Send an e-mail to [email protected]. Please include
File Number SR-NYSEARCA-2010-60 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-2010-60. 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 copying in the Commission's Public Reference Room. Copies
of the filing will also be available for inspection and copying at the
NYSE's principal office and on its Internet Web site at http://www.nyse.com. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only
[[Page 37868]]
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEARCA-2010-60 and should be submitted
on or before July 21, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-15893 Filed 6-29-10; 8:45 am]
BILLING CODE 8010-01-P