[Federal Register Volume 74, Number 242 (Friday, December 18, 2009)]
[Notices]
[Pages 67282-67284]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30085]
[[Page 67282]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61156; File No. SR-NYSEArca-2009-109]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Revising Its
Telephone Policies
December 11, 2009.
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 December 3, 2009, NYSE Arca, Inc. (``NYSE Arca'' 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. The Exchange
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the
Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders it effective
upon filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to revise its policies governing the use of
telephones on the Trading Floor. The text of the proposed rule change
is attached as Exhibit 5 to the 19b-4 form. The text of the proposed
rule change is available on the Exchange's Web site at http://www.nyse.com, on the Commission's Web site at http://www.sec.gov, at
the Exchange's principal office, and at 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 purpose of this filing is to revise NYSE Arca Rule 6.2(h)
governing the use of telephones on the Trading Floor. The proposed
revisions of Rule 6.2(h) are modeled on NYSE Amex Options Rule
902NY(i).\5\
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\5\ See Securities Exchange Act Release No. 59939 (May 19,
2009), 74 FR 25779 (May 29, 2009) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change, SR-NYSEAmex-2009-17, and
Amendment No. 1 Thereto Revising Rules Governing the Use of
Telephones on the Options Trading Floor).
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The Exchange proposes to simplify and expedite its telephone
registration process by allowing OTP Holder representatives to register
their telephones by submitting an e-mail to the NYSE Arca Options
Operations Department. This policy is consistent with NYSE Amex Options
Rule 902NY(h)(i)(1).
In addition, the Exchange notes that separate from the registration
and use of telephones, the Exchange shall retain the authority to
review and approve, prior to their use, any alternative communication
device (including but not limited to devices offering capabilities such
as e-mail, instant messaging, texting, or Internet-supported
communications). Therefore, according to proposed Rule 6.2(h)(1): No
OTP Holder, OTP Firm, or employee thereof may employ any alternative
communication device (other than telephones as described herein) on the
Trading Floor without prior approval of the Exchange.
The Exchange also proposes to combine the various designations in
Rule 6.2(h)(4)-(7) into a single section applying to all OTP Holders
and Employees of OTP Firms. In doing so, the Exchange seeks to clarify
and simplify its policy without substantively altering the scope of the
rule.\6\ This change will also result in the renumbering of the
subsections under Rule 6.2(h). This change is consistent with NYSE Amex
Options Rule 902NY(i).
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\6\ The Exchange is not proposing to require OTP Holders and OTP
Firms to register by category of user. Such a requirement is
inapplicable since (i) the proposed rule applies to OTP Holders, OTP
Firms, and all employees thereof, regardless of category and (ii)
such a requirement was a historical response to capacity limitations
(which no longer apply) thereby allowing the Exchange to restrict
use by certain categories of users if capacity issues arose.
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The Exchange also proposes to modify Rule 6.2(h)(5)(C) in order to
adopt the recently approved structure of NYSE Amex Rule 902NY(i)(4)(C)
pertaining to broker representations of telephonic orders to the
trading crowd. Currently, Section (h)(5)(C) sets forth that a Floor
Broker in a trading crowd who receives a telephonic order may represent
the order in the trading crowd only if an order ticket was first time-
stamped in the OTP Holder or OTP Firm's booth. The order ticket must
also be taken to the Floor Broker in the trading crowd immediately
after it is prepared. The new policy avoids this unnecessary process by
allowing Floor Brokers to represent a telephonic order to the trading
crowd so long as the order is immediately recorded into the EOC or the
Electronic Tablet. However, in cases where the exception set forth in
Rule 6.67(d)(1) applies, the EOC/Electronic Tablet Contingency
Reporting Procedures will be in effect in accordance with Rule
6.67(d)(2).\7\ In implementing this new policy, the Exchange seeks to
keep pace with the technologies utilized on its options floor.
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\7\ Rule 6.67(d)(1) states in pertinent part, ``The EOC or
Electronic Tablet entry requirement provision of subsection (c) will
not apply to any EOC or Electronic Tablet system disruption or
malfunction as confirmed by a Trading Official.'' Rule 6.67(d)(2)
provides a procedure for reporting during periods of system
disruption of malfunction.
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The Exchange proposes to remove all obsolete references to LMM
phones and General Access Phones. These phones were provided by the
Exchange and located at various locations on the options floor. The
Exchange no longer supports these phones, and as such, they are no
longer in operation.
In addition, the Exchange proposes to update Rule 6.2(h)(9),
Telephone Records, in order to increase the record retention period to
three years. The Exchange proposes to require that OTP Holders and OTP
Firms retain said records in an accessible place for the first two
years. This requirement is consistent with the retention period of
Securities and Exchange Commission Rule 17a-4.\8\ The Rule will also be
renumbered as 6.2(h)(5).
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\8\ This proposed rule is modeled on NYSE Amex Rule 902(i)(5).
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Consistent with NYSE Amex Rule 902NY(i)(6), the Exchange further
proposes to add Rule 6.22(h)(6) [sic],\9\ Revocation of Registration,
which establishes the Exchange's authority to deny, limit or revoke an
OTP Holder's permission to use of any registered telephone on the
Trading Floor. Although an OTP Holder need only register with the
Exchange, prior to use, any telephone to be used on the Trading Floor,
the Exchange retains the right to
[[Page 67283]]
deny, limit, or revoke an OTP Holder's permission. Specifically,
according to the proposed rule, the Exchange may deny, limit or revoke
registration of any telephone whenever it determines that use of such
device is inconsistent with the public interest, the protection of
investors, or just and equitable principles of trade, or such device
has been or is being used to facilitate any violation of the Securities
Exchange Act of 1934, as amended, or rules thereunder, or the Exchange
rules.
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\9\ The Exchange intended to refer to Rule 6.2(h)(6).
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The Exchange also proposes to update subsections (h)(13) and
(k)(i)(13) of Rule 10.12, Minor Rule Plan, in order to replace obsolete
references to prior Exchange policy and to add text designed to
specifically address violations of Exchange Rule 6.2(h) as revised
herein.
Finally, the Exchange proposes to delete Rule 11.15 as it is
duplicative of proposed Rule 6.2(h)(1) which states:
No OTP Holder, OTP Firm, or employee thereof may employ any
alternative communication device (other than telephones as described
herein) on the Trading Floor without prior approval of the Exchange.
The Exchange also proposes to remove the reference to Rule 11.15 in
Rule 6.1(e).
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) \10\ of the Act, in general, and furthers the
objectives of Section 6(b)(5),\11\ in particular, in that it is
designed to facilitate transactions in securities, to promote just and
equitable principles of trade, to enhance competition, and to protect
investors and the public interest, in that it proposes to modernize and
clarify rules for the use of telephones and other communication devices
on the Trading Floor.
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\10\ 15 U.S.C. 78f(b).
\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 foregoing 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 for 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, it
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). In addition, Rule 19b-4(f)(6)(iii)
requires the self-regulatory organization to submit to 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 this requirement.
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The Exchange has requested the Commission to waive the 30-day
operative delay to the extent that the proposal will allow NYSE Arca
to: (i) Modernize its rules regarding telephones, consistent with other
market centers; and (ii) eliminate any unnecessary discrepancies among
affiliated markets governing the use of telephones by their respective
market participants, without delay. The Commission notes that the
proposal is closely based on NYSE Amex Rule 902NY(i).\14\ The
Commission hereby grants the Exchange's request and believes that such
waiver is consistent with the protection of investors and the public
interest.\15\ Accordingly, the Commission designates the proposed rule
change operative upon filing with the Commission.
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\14\ See Securities Exchange Act Release No. 59939 (May 19,
2009), 74 FR 25779 (May 29, 2009) (Notice of Filing and Immediate
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto
Revising Rules Governing the Use of Telephones on the Options
Trading Floor).
\15\ 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. 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.
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-2009-109 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-2009-109. 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 such
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-NYSEArca-2009-109 and should be submitted on or before
January 8, 2010.
[[Page 67284]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30085 Filed 12-17-09; 8:45 am]
BILLING CODE 8011-01-P