[Federal Register: March 25, 2008 (Volume 73, Number 58)]
[Notices]
[Page 15822-15824]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25mr08-111]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-57522; File No. SR-NYSEArca-2008-30)]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change to Amend Rule 6.37B
Pertaining to Market Maker Quotations
March 18, 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 March 14, 2008, NYSE Arca, Inc. (``NYSE Arca'' 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 NYSE Arca. The Exchange has filed
the proposal 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 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
NYSE Arca proposes to amend NYSE Arca Rule 6.37B Market Maker
Quotations--OX. The text of the proposed rule change is available at
NYSE Arca, the Commission's Public Reference Room, and http://
www.nysearca.com.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE Arca included statements
[[Page 15823]]
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. NYSE Arca 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 purpose of this rule change is to revise the review period the
Exchange uses when determining a Market Maker's compliance with the 60%
quoting obligations contained in NYSE Arca Rule 6.37B(c). The Exchange
also proposes to add a provision to Rule 6.37B(c) that will deal with
exceptions to Market Maker quoting obligations.
Market Makers, other than Lead Market Makers (``LMM''), are
required to provide continuous two-sided quotations throughout the
trading day in their appointed issues for 60% of the time that the
Exchange is open for trading in each issue. Compliance with this
obligation is presently measured on a per-calendar-quarter basis. The
Exchange proposes to reduce the review period from a quarterly basis
down to a monthly basis. The Exchange believes that this change is
consistent with a recently approved rule change for LMM quoting
obligations.\5\ The Exchange believes that the shorter time period will
allow the NYSE Arca Options Surveillance Department to more effectively
monitor a Market Maker's compliance with their quoting obligations.
On occasion, a situation may arise where a Market Maker is unable
to provide continuous quotations due to circumstances completely beyond
his or her control. Accordingly, the Exchange proposes to amend Rule
6.37B(c) to state that if a technical failure or limitation of a system
of the Exchange prevents a Market Maker from providing timely and
accurate electronic quotes, the duration of such failure shall not be
considered in determining whether the Market Maker has satisfied the
60% quoting standard. The Exchange may also take into consideration
demonstrated legal or regulatory requirements or other mitigating
circumstances that might prevent a Market Maker from providing
continuous quotations. In order for the Exchange to consider any
exceptions to quoting obligations, Market Makers must notify the
Exchange promptly whenever circumstances arise that prevent them from
providing continuous quotations. The Exchange notes that this proposed
amendment is similar to NYSE Arca Rule 6.37B(b), which provides for
limited exceptions to LMM quoting obligations.
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\5\ See Securities Exchange Act Release No. 57186 (January 22,
2008), 73 FR 4931 (January 28, 2008) (SR-NYSEArca-2007-121).
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The Exchange also proposes minor technical changes to Rule 6.37B.
The Exchange states that the terms ``issue'' and ``class,'' when used
in the context of a Market Maker's Appointment, are virtually
interchangeable words. However, for the sake of consistency within Rule
6.37B, the Exchange proposes to use just the term ``issue.''
Accordingly, wherever the term ``class'' is used, it will now read
``issue.'' The Exchange also proposes a minor change to the numbering
of subsections within the Rule.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\6\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\7\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
The Exchange believes that this rule change will create a more
efficient procedure for the Exchange to monitor quoting obligations of
Market Makers, while at the same time providing relief for these
obligations when a situation arises that is completely beyond the
control of the Market Maker.
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\6\ 15 U.S.C. 78f(b).
\7\ 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 rule change does not: (1) Significantly
affect the protection of investors or the public interest; (2) impose
any significant burden on competition; and (3) become operative for 30
days after the date of this filing, or such shorter time as the
Commission may designate, it has become effective pursuant to Section
19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\
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\8\ 15 U.S.C. 78s(b)(3)(A).
\9\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under 19b-4(f)(6) normally may not
become operative prior to 30 days after the date of filing.\10\
However, Rule 19b-4(f)(6)(iii) \11\ permits the Commission to designate
a shorter time if such action is consistent with the protection of
investors and the public interest. The Exchange 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 such waiver
would allow the Exchange to implement the proposal without needless
delay. The Commission notes that it recently approved a substantially
similar NYSE Arca proposal pertaining to LMM quoting obligations.\12\
For these reasons, the Commission designates the proposed rule change
to be operative upon filing with the Commission.\13\
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\10\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization 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 the five-day pre-filing
notice requirement.
\11\ Id.
\12\ See supra note 5.
\13\ For the purposes only of waiving the 30-day operative
delay, 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,
[[Page 15824]]
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-NYSEArca-2008-30 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-NYSEArca-2008-30. 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 the filing also will be available for
inspection and copying at the principal office of NYSE Arca. 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-2008-30 and should
be submitted on or before April 15, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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\14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-5915 Filed 3-24-08; 8:45 am]
BILLING CODE 8011-01-P