[Federal Register Volume 73, Number 196 (Wednesday, October 8, 2008)]
[Notices]
[Pages 59024-59026]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-23843]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58713; File No. SR-NYSE-2008-96]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC To
Extend for Three Months the Moratorium Related to the Qualification and
Registration of Registered Competitive Market Makers (``RCMMs'')
Pursuant to NYSE Rule 107A and Competitive Traders (``CTs'') Pursuant
to NYSE Rule 110
October 2, 2008.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that, on September 30, 2008, New York Stock Exchange LLC (``NYSE'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(``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 extend for three months the moratorium
related to the qualification and registration of Registered Competitive
Market Makers (``RCMMs'') pursuant to NYSE Rule 107A and Competitive
Traders (``CTs'') pursuant to NYSE Rule 110. The text of the proposed
rule change is available at http://www.nyse.com, the NYSE, and 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
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to extend for three months the moratorium
related to the qualification and registration of RCMMs pursuant to NYSE
Rule 107A and CTs pursuant to NYSE Rule 110.
On September 22, 2005, the Exchange filed SR-NYSE-2005-63 \4\ with
the Securities and Exchange Commission (``Commission'') proposing to
implement a moratorium on the qualification and registration of new
RCMMS and CTs (``Moratorium''). The purpose of the Moratorium was to
allow the Exchange an opportunity to review the viability of RCMMs and
CTs in the NYSE HYBRID MARKET \SM\ (``Hybrid Market'').\5\
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\4\ See Securities Exchange Act Release No. 52648 (October 21,
2005), 70 FR 62155 (October 28, 2005) (SR-NYSE-2005-63).
\5\ See Securities Exchange Act Release No. 53539 (March 22,
2006), 71 FR 16353 (March 31, 2006) (SR-NYSE-2004-05) (establishing
the NYSE HYBRID MARKET \SM\).
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During each phase of the Hybrid Market, new system functionality
was included in the operation of Exchange systems and new data was
generated. As a result, the Exchange was unable to make an informed
decision as to the viability of RCMMs and CTs in the Hybrid Market. The
phasing in implementation of the Hybrid Market required the Exchange to
extend the Moratorium an additional seven times over the next twenty-
seven (27) months.\6\
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\6\ See Securities Exchange Act Release Numbers 54140 (July 13,
2006), 71 FR 41491 (July 21, 2006) (SR-NYSE-2006-48); 54985
(December 21, 2006), 72 FR 171 (January 3, 2007) (SR-NYSE-2006-113);
55992 (June 29, 2007), 72 FR 37289 (July 9, 2007) (SR-NYSE-2007-57);
56556 (September 27, 2007), 72 FR 56421 (October 3, 2007) (SR-NYSE-
2007-86); 57072 (December 31, 2007), 73 FR 1252 (January 7, 2008)
(SR-NYSE-2007-125); 57601 (April 2, 2008), 73 FR 19123 (April 8,
2008) (SR-NYSE-2008-22); 58033 (June 26, 2008), 73 FR 38265 (July 3,
2008) (SR-NYSE-2008-49).
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On June 12, 2008, the Exchange filed its proposal to create its new
market model (``New Model'').\7\ Pursuant to its filing, the Exchange
proposed to: (i)
[[Page 59025]]
Provide market participants with additional abilities to post hidden
liquidity on Exchange systems; (ii) create a Designated Market Maker
(``DMM''), and phase out the NYSE specialist; and (iii) enhance the
speed of execution through technological enhancements and a reduction
in message traffic between Exchange systems and its DMMs. In light of
this proposed New Model, the Exchange requested an extension of the
Moratorium to evaluate the viability of the RCMMs and CTs in the
proposed New Model.\8\
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\7\ See Securities Exchange Act Release No. 58184 (July 17,
2008, 2006), 73 FR 42853 (July 23, 2008) (SR-NYSE-2008-46).
\8\ See Securities Exchange Act Release No. 58033 (June 26,
2008), 73 FR 38265 (July 3, 2008) (SR-NYSE-2008-49).
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In light of these proposed changes, the Exchange seeks to continue
its review of the data related to RCMMs and CTs current trading on the
NYSE pending approval of the New Model. Accordingly, the Exchange
requests additional time to decide what roles, if any, RCMMs and CTs
should perform in the proposed New Model. The Exchange is proposing to
extend the Moratorium as amended \9\ for an additional three (3) months
to December 31, 2008 in order to finalize its determination as to the
roles of RCMMs and CTs and to formally submit a proposal to the
Commission outlining the role, if any, these classes of traders have in
the Exchange's evolving market.
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\9\ See Securities Exchange Act Release No. 53549 (March 24,
2006), 71 FR 16388 (March 31, 2006) (SR-NYSE-2006-11) (making
certain amendments to the Moratorium).
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The Exchange will issue an Information Memo announcing the
extension of the Moratorium.
2. Statutory Basis
The basis under the Act \10\ for this proposed rule change is the
requirement under Section 6(b)(5) \11\ 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 Exchange is currently reviewing
the data related to RCMMs and CTs to evaluate its trading volume in the
current more electronic market. Since it is undergoing significant
developments in its technology and its market model, the Exchange
believes that an extension of time to finalize its determination of
what, if any, roles the RCMMs and CTs will play in this evolving
marketplace could potentially remove impediments to and better improve
the mechanism of a free and open market.
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\10\ 15 U.S.C. 78a.
\11\ 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 \12\ and
Rule 19b-4(f)(6) thereunder.\13\
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 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 requested that the Commission waive the 5-day pre-
filing notice requirement. 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 \14\ normally does not become operative for 30 days after the date
of its filing. However, Rule 19b-4(f)(6)(iii) \15\ permits the
Commission to designate a shorter time if such action is consistent
with the protection of investors and the public interest. The NYSE has
requested that the Commission waive the 30-day operative delay. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because it would allow the Moratorium to continue without interruption
so that the Exchange may have additional time to make a final
determination as to the future roles of RCMMs and CTs in the proposed
New Model and to file with the Commission a proposed rule change
outlining such roles. For these reasons, the Commission designates that
the proposed rule change become operative immediately.\16\
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ 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 rule-comments@sec.gov. Please include
File Number SR-NYSE-2008-96 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2008-96. 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 inspection and
copying in the Commission's Public Reference Room, on official business
days between the hours of 10 a.m. and 3 p.m. Copies
[[Page 59026]]
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-2008-96 and should be submitted on or before
October 29, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-23843 Filed 10-7-08; 8:45 am]
BILLING CODE 8011-01-P