[Federal Register Volume 75, Number 44 (Monday, March 8, 2010)]
[Notices]
[Pages 10533-10535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-4784]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61616; File No. SR-NYSE-2010-12]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC as
Modified by Amendment No. 1 Thereto Clarifying the Implementation Date
of the Amendments to NYSE Rule 123C To Modify the Procedures for Its
Closing Process and Make Conforming Changes to NYSE Rules 13 and 15
March 1, 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 February 25, 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 Exchange. On March
1, 2010, the Exchange filed Amendment No. 1 to the proposed rule
change. The Commission is publishing this notice to solicit comments on
the proposed rule change, as amended, 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 clarify the implementation date of the
amendments to NYSE Rule 123C (Market On The Close Policy And Expiration
Procedures) to modify the procedures for its closing process; and make
conforming changes to NYSE Rules 13 (``Definitions of Orders'') and 15
(``Pre-Opening Indications''). The text of the proposed rule change is
available at the Exchange, the Commission's Public Reference Room, and
http://www.nyse.com.
[[Page 10534]]
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
New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') submits
this filing to clarify the implementation date of amendments to NYSE
Rule 123C (Market On The Close Policy And Expiration Procedures) to
modify the procedures for its closing process; and make conforming
changes to NYSE Rules 13 (``Definitions of Orders'') and 15 (``Pre-
Opening Indications'') approved by the Securities and Exchange
Commission on December 23, 2009 (``Close \3\ Modifications'').\4\
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\3\ Included in these amendments were conforming changes related
to the information disseminated prior to the opening transaction
which are also proposed in this filing.
\4\ See Securities Exchange Release No. 34-61233 (December 23,
2009), 74 FR 69169 (December 30, 2009) (SR-NYSE-2009-111).
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The Exchange notes that similar changes are proposed to the rules
of its affiliate, NYSE Amex LLC.\5\
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\5\ See SR-NYSEAmex-2010-17.
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Background
In 2009, the NYSE implemented changes designed to streamline and
improve the efficiency of its closing process, which included
establishing a single print for the closing transactions, activating
systemic compliance filters for market at-the-close (``MOC'') and limit
at-the-close (``LOC'') orders and enhancing the transparency of its
informational data feed for imbalances by including d-Quotes \6\ and
all other e-Quotes \7\ containing pegging instructions eligible to
participate in the closing transaction in the NYSE Order Imbalance
Information datafeed.\8\
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\6\ See definition of d-Quotes NYSE Rule 70, Supplementary
Material .25.
\7\ See definition of e-Quotes NYSE Rule 70(a).
\8\ See Securities Exchange Release No. 59345 (February 3,
2009), 74 FR 6444 (February 9, 2009) (SR-NYSE-2009-10) (Establishing
a single print for the closing transaction). See also, Securities
Exchange Release No. 60153 (June 19, 2009), 74 FR 30656 (June 26,
2009) (SR-NYSE-2009-49) (Inclusion of d-Quotes and all other e-
Quotes containing pegging instructions eligible to participate in
the closing transaction NYSE Order Imbalance Information datafeed).
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In addition, on December 23, 2009, the SEC approved the Exchanges
filing to implement Close Modifications designed to further streamline
the closing process, enhance transparency on the close and allow for
greater customer participation when there is an imbalance in a security
prior to the closing transaction. Pursuant to the Close Modifications,
the NYSE amended NYSE Rule 123C to: (i) Extend the time for the entry
of MOC/LOC orders \9\ from 3:40 p.m. to 3:45 p.m.; (ii) amend the
procedures for the entry of MOC/LOC orders in response to imbalance
publications and regulatory trading halts; (iii) change to the
cancellation time for MOC/LOC orders to 3:58 p.m.; (iv) require only
one mandatory imbalance publication; (v) rescind the provisions
governing Expiration Friday Auxiliary Procedures for the Opening and
Due Diligence Requirements; (vi) modify the dissemination of Order
Imbalance Information pursuant to NYSE Rule 123C(6) to commence at 3:45
p.m.; (vii) include additional information in both the pre-opening and
pre-closing Order Imbalance Information data feeds; (viii) amend NYSE
Rule 13 to create a conditional-instruction limit order type called the
Closing Offset Order (``CO order''), which may only be used to offset
an existing imbalance of orders on the close; (ix) delete the ``At the
Close'' order type from NYSE Rule 13 and replace it with the specific
definitions of MOC/LOC orders; and (x) codify the hierarchy of
allocation of interest in the closing transaction in NYSE Rule 123(C).
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\9\ In the NYSE Rules and for the purposes of this discussion,
the terms ``market-on-close'' and ``limit-on-close'' are used
interchangeably with ``market-at-the-close'' and ``limit-at-the-
close''.
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Implementation of Closing Modifications
The Exchange has not made operative the amendments described above.
Based on feedback from the member firm community, the NYSE has delayed
the implementation of the Closing Modifications to March 1, 2010. The
Exchange believes that commencing operation of the Closing
Modifications on March 1, 2010, will provide participants with
additional time to ensure that the member firms community will be
systemically ready to comply with the new provisions of the Rule.
The Exchange anticipates that the Close Modifications will be
operative in all securities effective March 1, 2010; however, should
conditions arise to delay the implementation of the Close
Modifications, the Exchange will provide information to its
constituents about changes to the start date via its Trader Update
Notices that are sent via e-mail to subscribers and posted on the
Exchange's Web site.
Deletion of Erroneously Included Text
The Exchange further proposes to delete NYSE Rule 123C(5)(d).
Specifically, NYSE Rule 123C(5)(d) is duplicative rule text. It
addresses the publication of the Order Imbalance Information data feed
in the event of an early close. NYSE Rule 123C(5)(d) is the exact same
language as NYSE Rule 123C(6)(a)(v) (``Publication of Order Imbalance
Information Data Feed''). The paragraph was inadvertently copied into
the wrong section and should therefore be deleted.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \10\ that an Exchange have rules that
are designed 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 instant proposal is in keeping
with these principles in that it provides transparency to market
participants by explaining the anticipated operation date of the Close
Modifications and the locations where market participants may find
information about any changes to the anticipated operative date.
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\10\ 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.
[[Page 10535]]
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
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.
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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative prior to 30 days after the date of the filing.\13\
However, pursuant to Rule 19b4(f)(6)(iii), the Commission may designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange requested that the
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\14\ which would make the rule change operative
immediately. The Exchange believes that waiver of the operative delay
is appropriate because the proposed rule change is merely a
clarification of the operative date of previously approved amendments
to the Exchange's rules.
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\13\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission 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. NYSE has satisfied this requirement.
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it merely clarifies the operative date of a previously approved
rule change. Accordingly, the Commission designates the proposed rule
change, as amended, as operative upon filing with the Commission.\15\
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\15\ For purposes only of waiving the operative delay for this
proposal, 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 interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.\16\
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\16\ 15 U.S.C. 78s(b)(3)(C).
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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-NYSE-2010-12 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-2010-12. 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-NYSE-2010-12 and should be submitted on or before March
29, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
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\17\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2010-4784 Filed 3-5-10; 8:45 am]
BILLING CODE 8011-01-P