Federal Register / Vol. 75, No. 218 / Friday, November 12, 2010 / Notices 69491 

19 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 62955 

(September 20, 2010), 75 FR 58456 (‘‘Notice’’). 

4See Securities Exchange Act Release No. 59282 

(January 22, 2009), 74 FR 5009 (January 28, 2009) 

(NYSE–2008–119). 

5See NYSE Rule 1600(d)(1)(B). 

6See proposed NYSE Rule 1600(d)(1)(C)(iii). 

7See Notice, supra note 3. 

8 In approving the proposed rule change, the 

Commission has considered its impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

9 15 U.S.C. 78f(b)(5). 

10 15 U.S.C. 78s(b)(2). 

11 17 CFR 200.30–3(a)(12). 

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–NASDAQ–2010–141 and 

should be submitted on or before 

December 3, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28545 Filed 11–10–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63266; File No. SR–NYSE– 

2010–67] 

Self-Regulatory Organizations; Order 

Approving Proposed Rule Change by 

New York Stock Exchange LLC 

Changing the NYBX Order Execution 

Sequence 

November 5, 2010. 

I. Introduction 

On September 9, 2010, the New York 

Stock Exchange LLC (‘‘Exchange’’ or 

‘‘NYSE’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) a 

proposed rule change, pursuant to 

Section 19(b)(1) of the Securities 

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 to change the 

execution of algorithm of the New York 

Block Exchange (‘‘NYBX’’ or the 

‘‘Facility’’), an electronic trading facility 

of the NYSE. The proposed rule change 

was published for comment in the 

Federal Register on September 24, 

2010.3 The Commission received no 

comments on the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

The NYBX is an electronic facility of 

the Exchange for the trading of 

undisplayed orders in NYSE-listed 

securities.4 NYSE Rule 1600 governs the 

operation of the NYBX. 

When an order enters the Facility, the 

Facility scans its own book, the NYSE’s 

Display Book (‘‘DBK’’) (both displayed 

and undisplayed orders), and the 

protected quotations of automated 

trading centers to identify marketable 

contraside interest.5 Following this 

review, if marketable contraside interest 

exists and the applicable minimum 

triggering volume threshold of the 

incoming order is met, the Facility will 

commence a sequential process for 

executing the incoming order. As part of 

this process, the full remaining size of 

the incoming order will be routed back 

and forth between the Facility and the 

DBK at each price point, even though 

only a small portion of the order might 

be filled at a particular price point. This 

‘‘oversizing’’ allows any CCS interest in 

the DBK, which the Facility is not aware 

of, to be triggered at each price point. 

During the sequential routing process, 

portions of the incoming order will be 

routed away to hit protected quotations 

of automated trading centers as 

necessary to avoid trade throughs. 

The NYSE proposes to change the 

order execution method from the 

current sequential, ‘‘oversizing’’ process 

to a simultaneous process. When a 

market evaluation indicates that 

sufficient marketable liquidity exists to 

meet the incoming order’s minimum 

trading volume threshold, the Facility 

will divide the incoming order into 

separate orders that will be routed 

simultaneously to execute against 

marketable contraside liquidity in the 

DBK and/or other automated trading 

centers up to the price of the incoming 

order. The orders routed to the DBK will 

no longer be oversized. The remainder 

of the original order will execute, to the 

extent possible, against contraside 

interest in the Facility at the same or 

better prices. Using this approach, any 

orders sent by the Facility to the DBK 

would not trigger any CCS interest. In 

addition, the Exchange is proposing to 

amend the Facility’s order-routing 

algorithm to route away to hit the 

protected quotations of automated 

trading centers even in some cases 

where it would not be necessary to do 

so to avoid a trade through.6

The Exchange states that the proposal 

is designed to allow a NYBX order to 

better capture the available contra side 

liquidity revealed during the Facility’s 

initial market evaluation. According to 

the NYSE, some NYBX orders currently 

are not able to execute against available 

contra side liquidity, because of ‘‘the 

disappearance or the adjustment of a 

substantial portion of the available 

contra side liquidity that shows up on 

the initial market evaluation, before the 

NYBX order is able to execute against 

that liquidity.’’ 7

III. Discussion 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder are applicable to a national 

securities exchange.8 In particular, the 

Commission believes that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,9 which requires, 

among other things, that an exchange 

have rules designed to promote just and 

equitable principles of trade; to foster 

cooperation and coordination with 

persons engaged in regulating, clearing, 

settling, processing information with 

respect to, and facilitating transactions 

in securities; 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 Commission believes that the 

proposal is reasonably designed to 

increase the fill rates of NYBX orders in 

a manner consistent with Regulation 

NMS, by capturing a higher percentage 

of the marketable contra side liquidity 

that may be available for execution, as 

revealed by the Facility’s initial market 

evaluation. The proposal should also 

benefit market participants whose 

orders are displayed at automated 

trading centers, by increasing their fill 

rates against NYBX orders. Accordingly, 

the Commission finds that the proposal 

is reasonably designed to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and is 

also consistent with the protection of 

investors and the public interest. 

IV. Conclusion 

It is therefore ordered, that pursuant 

to Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–NYSE–2010– 

67) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–28542 Filed 11–10–10; 8:45 am] 

BILLING CODE 8011–01–P 

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