[Federal Register Volume 73, Number 75 (Thursday, April 17, 2008)]
[Notices]
[Page 20981]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-8215]



[[Page 20981]]

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SECURITIES AND EXCHANGE COMMISSION

[File No. SR-NYSEArca-2008-19]


In the Matter of: NYSE Arca, Inc.; Order of Summary Abrogation

April 11, 2008.
    Securities Exchange Act of 1934, Release No. 57648.
    Notice is hereby given that the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(3)(C) of the Securities 
Exchange Act of 1934 (``Act''),\1\ is summarily abrogating a certain 
proposed rule change of NYSE Arca, Inc. (``NYSE Arca'' or 
``Exchange'').
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    \1\ 15 U.S.C. 78s(b)(3)(C).
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    On February 13, 2008, NYSE Arca filed SR-NYSEArca-2008-19. The 
proposed rule change amended NYSE Arca Equities Rule 7.31(x) to expand 
the permissible order entry time and eligibility of its ``Primary 
Only'' order type (``PO Order''). The filing was immediately effective 
upon filing with the Commission pursuant to Section 19(b)(3)(A) of the 
Act.\2\
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    \2\ 15 U.S.C. 78s(b)(3)(A). See Securities Exchange Act Release 
No. 57377 (February 25, 2008), 73 FR 11177 (February 29, 2008).
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    NYSE Arca's PO Order is a market or limit order that is routed to 
the primary, listing market, without sweeping the NYSE Arca book.\3\ 
The proposed rule change modified the PO Order type to permit PO Orders 
to be entered at any time and to offer an order modifier for Users to 
designate PO Orders that are eligible for entry and execution 
throughout the trading day.\4\ Previously, NYSE Arca restricted PO 
Orders to participation in the primary, listing market opening. 
Specifically, the amended rule permits NYSE Arca Equities system Users 
to enter a PO Order during any of the Exchange's trading sessions and 
be routed immediately to the primary, listing market for execution. If 
the order is not immediate-or-cancel, it remains at the primary, 
listing market until executed or cancelled that day.
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    \3\ NYSE Arca Rule 7.31(x).
    \4\ See NYSE Arca Rule 1.1(yy) for the definition of ``User.''
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    Pursuant to Section 19(b)(3)(C) of the Act,\5\ at any time within 
60 days of the date of filing a proposed rule change pursuant to 
Section 19(b)(1) of the Act,\6\ the Commission may summarily abrogate 
the change in the rules of the self-regulatory organization and require 
that the proposed rule change be re-filed in accordance with the 
provisions of Section 19(b)(1) of the Act \7\ and reviewed in 
accordance with Section 19(b)(2) of the Act,\8\ 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.
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    \5\ 15 U.S.C. 78s(b)(3)(C).
    \6\ 15 U.S.C. 78s(b)(1).
    \7\ 15 U.S.C. 78s(b)(1).
    \8\ 15 U.S.C. 78s(b)(2).
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    Archipelago Securities, Inc. (``Arca Securities'') is a member of 
the NYSE and an affiliate of the NYSE. The Commission in the past has 
expressed concern about the potential for unfair competition and 
conflicts of interest between an exchange's self-regulatory obligations 
and its commercial interests that could exist if an exchange were 
affiliated with one of its members, as well as the potential for unfair 
competitive advantage that the affiliated member could have by virtue 
of informational or operational advantages, or the ability to receive 
preferential treatment.\9\ The proposed rule change raises this issue 
by expanding the activities of Arca Securities in sending orders to its 
affiliate, the NYSE. Thus, the Commission believes that the proposed 
rule change should be subject to notice and comment and review pursuant 
to Sections 19(b)(1) and 19(b)(2) of the Act.\10\ In addition, the 
Commission believes that the issue of whether the routing of PO Orders 
by Arca Securities to the NYSE is consistent with existing NYSE and 
NYSE Arca rules should be subject to this same notice and comment and 
review process.\11\
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    \9\ See Securities Exchange Act Release No. 53382 (February 27, 
2006), 71 FR 11251 FR (March 6, 2006) (order approving SR-NYSE-2005-
77).
    \10\ 15 U.S.C. 78s(b)(1) and 78s(b)(2).
    \11\ See NYSE Rule 2B; NYSE Arca Rule 3.10; NYSE Arca Equities 
Rule 3.10; and Securities Exchange Act Release Nos. 53382, supra 
note 9; 53383 (February 27, 2006), 71 FR 11271 (March 6, 2006) 
(order approving SR-PCX-2005-134); and 52497 (September 22, 2005), 
70 FR 56949 (September 29, 2005) (order approving SR-PCX-2005-90).
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    Therefore, the Commission finds that it is appropriate in the 
public interest, for the protection of investors, and otherwise in 
furtherance of the purposes of the Act, to abrogate the proposed rule 
change.
    It is therefore ordered, pursuant to Section 19(b)(3)(C) of the 
Act,\12\ that File No. SR-NYSEArca-2008-19, be and hereby is, summarily 
abrogated. If NYSE Arca chooses to re-file the proposed rule change, it 
must do so pursuant to Sections 19(b)(1) \13\ and 19(b)(2) of the 
Act.\14\
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    \12\ 15 U.S.C. 78s(b)(3)(C).
    \13\ 15 U.S.C, 78s(b)(1).
    \14\ 15 U.S.C, 78s(b)(2).

    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)(58).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-8215 Filed 4-16-08; 8:45 am]
BILLING CODE 8010-01-P