[Federal Register: April 17, 2008 (Volume 73, Number 75)]
[Notices]
[Page 20981]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17ap08-101]
[[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