[Federal Register: July 9, 2007 (Volume 72, Number 130)]
[Notices]
[Page 37288-37289]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09jy07-127]
[[Page 37288]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-55995; File No. SR-NYSE-2007-58]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to NYSE Rule 104.10(6)
June 29, 2007.
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 June 28, 2007, the New York Stock Exchange LLC, Inc. (``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 NYSE. The
NYSE has designated the proposed rule change as a ``non-controversial''
rule change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule
19b-4(f)(6) thereunder,\4\ which renders the proposed rule change
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 NYSE is proposing to extend for three (3) months the current
pilot related to specialist stabilization requirements operating
pursuant to Exchange Rule 104.10(6) (Specialist Transactions in Active
Securities that Establish or Increase the Specialist's Position)
(``Stabilization Pilot''),\5\ that is scheduled to terminate on June
30, 2007. Additionally, the Exchange seeks to make technical changes to
Rule 104.10 to correct the numbering of certain subparagraphs of the
Rule. The text of the proposed rule change is available on NYSE's Web
site at http://www.nyse.com, at NYSE's principal office, and at the
Commission's Public Reference Room.
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\5\ See Securities Exchange Act Release No. 54860 (December 1,
2006), 71 FR 71221 (December 8, 2006) (SR-NYSE 2006-76).
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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 NYSE 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 these statements may be examined at the places specified in
Item IV below. The NYSE 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 is proposing to extend the operation of the
Stabilization Pilot pursuant to Exchange Rule 104.10(6) from June 30,
2007 to September 30, 2007. The Exchange is further requesting through
this filing to make technical amendments to the Rule in order to
correct the numbering of certain subparagraphs.
a. Stabilization Pilot
On December 1, 2006, the Commission approved changes to NYSE Rules
104.10(5) and 104.10(6) governing specialist stabilization
requirements.\6\ The amendments to the Rule moved away from defining
stabilization in terms of the last sale to focus on market conditions,
the type of trade in question and the specialist's existing position.
The amendments to Exchange Rule 104.10(6) govern Conditional
Transactions (as defined below) in active securities.\7\
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\6\ See Securities Exchange Act Release No. 54860, supra note 5.
\7\ ``Active'' securities are: (a) Securities comprising the S&P
500(r) Stock Index; (b) securities trading on the Exchange during
the first five trading days following their initial public offering
of such securities; and (c) securities that have been designated as
``active'' by a Floor Official subject to the provisions of the
Rule.
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Pursuant to the Stabilization Pilot, specialists can trade in
active securities that establish or increase a position by reaching
across the market to trade in the Exchange published bid (in the case
of a specialist's sale) or offer (in the case of a specialist's
purchase) when such bid (offer) is priced below (above) the last
differently priced published bid (offer) (``Conditional Transaction'').
A specialist is allowed to execute Conditional Transactions without
restriction as to price provided the specialist follows said
transaction with an appropriate transaction on the opposite side of the
market commensurate with the size of the specialist's transaction,
which is referred to as ``appropriate re-entry.'' \8\
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\8\ ``Appropriate re-entry'' for Conditional Transactions shall
mean the specialist's stabilization obligation to re-enter a
transaction on the opposite side of the market at or before the
price participation point (``PPP''). The PPP is an Exchange-issued
minimum guideline that identifies the price at or before which a
specialist is expected to re-enter the market after effecting a
Conditional Transaction. PPPs are only minimum guidelines and
compliance with them does not guarantee a specialist is meeting his
or her obligations.
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The Exchange states that the Stabilization Pilot provides the
specialist with the ability to effect transactions for its dealer
account to provide support to the Hybrid Market. The Exchange believes
that the specialists have a greater ability to position themselves to
provide more liquidity against market trend and thus moderate
volatility. The Exchange, therefore, requests that the Stabilization
Pilot be extended for three (3) months to continue to afford
specialists this needed flexibility to continue their adaptation to the
new challenges of the Hybrid Market. The Exchange believes that
extension of the Stabilization Pilot will continue to allow specialists
to effectively manage their inventory in order to provide liquidity
during times of market volatility. As such, the Exchange requests that
the Commission extend the Stabilization Pilot to September 30, 2007.
b. Technical Amendments to the Rule
The Exchange is also seeking to make technical amendments to Rule
104.10, including to correct the numbering of certain subparagraphs.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirement under Section 6(b)(5) \9\ of the Act 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
also believes that the proposed rule change also is designed to support
the principles of Section 11A(a)(1) \10\ in that it seeks to assure
economically efficient execution of securities transactions.
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\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78k-1(a)(1).
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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.
[[Page 37289]]
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) by its terms does not become operative for 30 days after the
date of this 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) \11\ of the Act and Rule 19b-4(f)(6)
thereunder.\12\ As required under Rule 19b-4(f)(6)(iii),\13\ the
Exchange provided the Commission with 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 the filing of the proposed rule change.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
\13\ 17 CFR 240.19b-4(f)(6)(iii).
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A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally
may not become operative prior to 30 days after the date of 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 requests that the
Commission waive the 30-day operative delay, as specified in Rule 19b-
4(f)(6)(iii),\16\ which would make the rule change effective and
operative upon filing. The Commission believes that waiving the 30-day
operative delay is consistent with the protection of investors and the
public interest because such waiver would allow the Stabilization Pilot
to continue without interruption through September 30, 2007 and provide
the Exchange and the Commission additional time to evaluate the
pilot.\17\ Accordingly, the Commission designates that the proposed
rule change effective and operative upon filing with the Commission.
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\14\ 17 CFR 240.19b-4(f)(6).
\15\ 17 CFR 240.19b-4(f)(6)(iii).
\16\ Id.
\17\ 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 such 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 rule-comments@sec.gov. Please include
File Number SR-NYSE-2007-58 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2007-58. 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, 100 F Street, NE.,
Washington, DC 20549, 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 NYSE. 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-2007-58 and should be
submitted on or July 30, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon
Deputy Secretary.
[FR Doc. E7-13154 Filed 7-6-07; 8:45 am]
BILLING CODE 8010-01-P