[Federal Register Volume 73, Number 129 (Thursday, July 3, 2008)]
[Notices]
[Pages 38265-38267]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15066]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58033; File No. SR-NYSE-2008-49]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
To Extend for Three Months the Moratorium Related to the Qualification 
and Registration of Registered Competitive Market Makers, Pursuant to 
NYSE Rule 107A, and Competitive Traders, Pursuant to NYSE Rule 110

June 26, 2008.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 23, 2008, the New York Stock Exchange LLC (``NYSE'' or 
``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 substantially prepared by the Exchange. 
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\ 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 Exchange Rule 107A, and 
Competitive Traders (``CTs''), pursuant to Exchange Rule 110 
(``Moratorium''). The text of the proposed rule change is available at

[[Page 38266]]

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 Exchange included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these 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 aspects 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 current 
Moratorium related to the qualification and registration of RCMMs, 
pursuant to Exchange Rule 107A, and CTs, pursuant to Exchange Rule 110.
    On September 22, 2005, the Exchange filed SR-NYSE-2005-63 \3\ with 
the Commission proposing to implement a Moratorium on the qualification 
and registration of new RCMMs and CTs. The purpose of the Moratorium 
was to allow the Exchange an opportunity to review the viability of 
RCMMs and CTs in the NYSE HYBRID MARKETSM (``Hybrid 
Market'').\4\
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    \3\ See Securities Exchange Act Release No. 52648 (October 21, 
2005), 70 FR 62155 (October 28, 2005) (SR-NYSE-2005-63).
    \4\ See Securities Exchange Act Release No. 53539 (March 22, 
2006), 71 FR 16353 (March 31, 2006) (SR-NYSE-2004-05) (establishing 
the Hybrid Market).
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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 
phased-in implementation of the Hybrid Market required the Exchange to 
extend the Moratorium an additional six times over the next twenty-four 
months.\5\
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    \5\ See Securities Exchange Act Release Nos. 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); and 57601 (April 2, 2008), 73 FR 19123 (April 8, 
2008) (SR-NYSE-2008-22).
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    The Exchange is now proposing to extend the Moratorium, as 
amended,\6\ for an additional three months to September 30, 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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    \6\ 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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    On June 12, 2008, the Exchange filed its proposal to create its new 
market model (``New Model'').\7\ Pursuant to its proposal, the Exchange 
intends to: (i) 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.
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    \7\ See SR-NYSE-2008-46.
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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. Accordingly, the Exchange requests additional time to decide 
what roles, if any, RCMMs and CTs should perform in the proposed New 
Model.
    The Exchange will issue an Information Memo announcing the 
extension of the Moratorium.
2. Statutory Basis
    The basis under the Act \8\ for this proposed rule change is the 
requirement under section 6(b)(5) \9\ 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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    \8\ 15 U.S.C. 78a.
    \9\ 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 \10\ and 
Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 the five-day pre-filing requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \12\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \13\ 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

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proposed rule change become operative immediately.\14\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ 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 Number SR-NYSE-2008-49 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-2008-49. 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 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-2008-49 and should be submitted on or before July 24, 2008.

    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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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-15066 Filed 7-2-08; 8:45 am]
BILLING CODE 8010-01-P