Federal Register / Vol. 75, No. 7 / Tuesday, January 12, 2010 / Notices 1669 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange notes that similar changes are 

proposed to the rules of its affiliate, NYSE Amex 

LLC. See SR–NYSEAmex 2009–100. 

5See Securities Exchange Act Release No. 55555 

(March 27, 2007), 72 FR 16841 (April 5, 2007) (SR– 

NYSE–2007–09) (adopting the rule and making the 

operation of the rule was retroactive to September 

1, 2006). 

6Pursuant to NYSE Rule 18(b), a system failure 

is defined as a malfunction of the Exchange’s 

physical equipment, devices and/or programming 

which results in an incorrect execution of an order 

or no execution of an order that was received in 

Exchange systems. Through this filing, the 

Exchange further seeks to change the word ‘‘which’’ 

in this subsection of the rule to ‘‘that’’ in order to 

make it grammatically correct. 

7As the Exchange gained experience with the 

administration of NYSE Rule 18, it reviewed the 

members that were eligible to receive compensation 

pursuant to the rule and made changes to allow 

more member organizations eligible to submit 

claims. See Securities Exchange Act Release No. 

56718 (October 29, 2007), 72 FR 62506 (November 

5, 2007) (SR–NYSE–2007–95) (reducing the 

minimum net loss from $5,000 to $500). 

8Through this filing the Exchange further seeks 

to change the word ‘‘verbal’’ to the word ‘‘oral’’ to 

make clear that the initial notice is not required in 

writing. 

9See Securities Exchange Release No. 59486 

(March 2, 2009), 74 FR 10104 (March 9, 2009) (SR– 

NYSE–2009–16) (Clarifying among other things, 

that if members and member organizations retain 

profits from a system malfunction, then they are 

required to net such profits against any losses from 

the same malfunction before submitting any 

claims). 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61294; File No. SR–NYSE– 

2009–135] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending NYSE 

Rule 18 To Eliminate the $500 

Minimum Net Loss Requirement for a 

Member Organization To Seek 

Compensation in the Event of an 

Exchange System Failure 

January 6, 2010. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on December 

31, 2009, New York Stock Exchange 

LLC (‘‘NYSE’’ 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 self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Rule 18 (‘‘Compensation in 

Relation to Exchange System Failure’’) 

to eliminate the $500 minimum net loss 

requirement for a member organization 

to seek compensation in the event of an 

Exchange System failure. The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, the Commission’s Web 

site at http://www.sec.gov, and the 

Exchange’s Web site at http:// 

www.nyse.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, 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Through this filing, the Exchange 

proposes to amend NYSE Rule 18 

(‘‘Compensation in Relation to Exchange 

System Failure’’) to eliminate the $500 

minimum net loss requirement for a 

member organization to seek 

compensation in the event of an 

Exchange System failure. Member 

organizations would therefore be 

permitted to submit a claim for 

compensations without having to meet 

a minimum net loss threshold as long as 

such claims meet the other criteria of 

NYSE Rule 18. 4

NYSE Rule 18 was established to 

provide a mechanism for member 

organizations to receive compensation 

for losses sustained in relation to an 

Exchange system failure.5 It provides 

that member organizations that sustain 

a loss in relation to an Exchange system 

failure 6 are eligible to submit a claim, 

per incident, for compensation to the 

Exchange if certain requirements are 

met. Specifically, pursuant to NYSE 

Rule 18(a), claim is eligible for 

compensation if the Exchange’s Division 

of Floor Operations determines that: (i) 

A valid order was accepted by the 

Exchange’s systems; (ii) an Exchange 

system failure, as defined in NYSE Rule 

18(b), occurred during the execution of 

said order; (iii) a member organization 

sustained a loss related to an Exchange 

system failure; (iv) the net loss was at 

least $500; 7 and (v) the Exchange’s 

Division of Floor Operations received 

from the member organizations that 

sustained such loss, verbal 8 notice by 

the market opening on the next business 

day following the system failure and 

written notice by the end of the third 

business day following the system 

failure. 

The provision that the member 

organization sustain a minimum net 

total loss of $500 requires the member 

organization to deduct any profits 

received in relation to the same incident 

before submitting the claim amount.9

Member organizations are not permitted 

to aggregate losses incurred as a result 

of more than one system failure in order 

to satisfy the $500 minimum claim 

requirement. As a result, certain 

member organizations have been 

precluded from submitting claims for 

losses sustained in relation to an 

Exchange system failure. 

The Exchange seeks to have the rule 

be even more inclusive of its member 

organizations that may sustain a loss in 

the event of an Exchange system failure. 

Based on its experience, the Exchange 

has concluded that it is no longer 

necessary to prescribe a minimum net 

loss in order for its member 

organizations to be eligible to submit 

claims. Accordingly, the Exchange seeks 

to eliminate the minimum net loss 

provision of NYSE Rule 18. The 

Exchange believes that this will allow 

more member organizations 

opportunities to seek compensation for 

losses sustained in relation to an 

Exchange system failure. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),10 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,11

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, 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 believes 

the proposed rule change is in keeping 

with these principles in that it serves to 

eliminate the minimum net loss 

threshold requirement in relation to an 

Exchange system failure in order to be 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES

1670 Federal Register / Vol. 75, No. 7 / Tuesday, January 12, 2010 / Notices 

12 15 U.S.C. 78s(b)(3)(A)(iii). 

13 17 CFR 240.19b–4(f)(6). 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 240.19b–4(f)(6)(iii). 

16For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposal’s impact on efficiency, competition, and 

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

17 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

more inclusive and provide more 

opportunities for member organizations 

to be compensated for losses sustained 

in relation to an Exchange system 

failure thus protecting investors and the 

public interest. 

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 12 and Rule 

19b–4(f)(6) thereunder.13 Because the 

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 

prior to 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, the 

proposed rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) 14 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),15 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because doing so will allow member 

organizations to immediately seek 

compensation for losses of less than 

$500 sustained in relation to an 

Exchange system failure. For this 

reason, the Commission designates that 

the proposed rule change become 

immediately operative.16

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 rulecomments@sec.gov. Please include File 

Number SR–NYSE–2009–135 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–NYSE–2009–135. 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 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 publicly available. All 

submissions should refer to File 

Number SR–NYSE–2009–135 and 

should be submitted on or before 

February 2, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–301 Filed 1–11–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61293; File No. SR– 

NYSEAmex–2009–100] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Amex LLC Amending NYSE Amex 

Equities Rule 18 To Eliminate the $500 

Minimum Net Loss Requirement for a 

Member Organization To Seek 

Compensation in the Event of an 

Exchange System Failure 

January 6, 2010. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that on December 

31, 2009, NYSE Amex LLC (the 

‘‘Exchange’’ or ‘‘NYSE Amex’’) 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 self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Amex Equities Rule 18 

(‘‘Compensation in Relation to Exchange 

System Failure’’) to eliminate the $500 

minimum net loss requirement for a 

member organization to seek 

WReier-Aviles on DSKGBLS3C1PROD with NOTICES