Federal Register / Vol. 75, No. 238 / Monday, December 13, 2010 / Notices 77685 

19 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. 

4NYSE has filed a companion rule filing to 

conform its Rules to the changes proposed in this 

filing. See SR–NYSE–2010–76, formally submitted 

November 29, 2010. 

5See Securities Exchange Act Release No. 56017 

(Jul. 5, 2007), 72 FR 38110 (Jul. 12, 2007) (SR– 

NYSE–2007–21). 

6See NASD Rule 2111 and IM–2110–2. 

7See Securities Exchange Act Release No. 56968 

(Dec. 14, 2007), 72 FR 72432 (Dec. 20, 2007) (SR– 

NYSE–2007–114). 

8See Securities Exchange Act Release Nos. 57682 

(Apr. 17, 2008), 73 FR 22193 (Apr. 24, 2008) (SR– 

NYSE–2008–29); 59621 (Mar. 23, 2009), 74 FR 

14179 (Mar. 30, 2009) (SR–NYSE–2009–30); 60396 

(July 30, 2009), 74 FR 39126 (Aug. 5, 2009) (SR– 

NYSE–2009–73); 61251 (Dec. 29, 2009), 75 FR 482 

(Jan. 5, 2010) (SR–NYSE–2009–129); and 62541 

(July 21, 2010), 75 FR 44042 (July 27, 2010) (SR– 

NYSE–2010–52). 

9The NYSE Amex Equities Rules, which became 

operative on December 1, 2008, are substantially 

identical to the current NYSE Rules 1–1004 and the 

Exchange continues to update the NYSE Amex 

Equities Rules as necessary to conform with rule 

changes to corresponding NYSE Rules filed by the 

NYSE. See Securities Exchange Act Release Nos. 

58705 (Oct. 1, 2008), 73 FR 58995 (Oct. 8, 2008) 

(SR–Amex–2008–63); 58833 (Oct. 22, 2008), 73 FR 

64642 (Oct. 30, 2008) (SR–NYSE–2008–106); 58839 

(Oct. 23, 2008), 73 FR 64645 (October 30, 2008) 

(SR–NYSEALTR–2008–03); 59022 (Nov. 26, 2008), 

73 FR 73683 (Dec. 3, 2008) (SR–NYSEALTR–2008– 

10); and 59027 (Nov. 28, 2008), 73 FR 73681 (Dec. 

3, 2008) (SR–NYSEALTR–2008–11). 

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 Web site viewing and 

printing in the Commission’s Public 

Reference Section, 100 F Street, NE., 

Washington, DC 20549–1090 on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing will 

also be available for inspection and 

copying at the NYSE’s principal office 

and on its Internet Web site at http:// 

www.nyse.com. 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–2010–107 and should be 

submitted on or before January 3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31132 Filed 12–10–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63454; File No. SR– 

NYSEAmex–2010–111] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Amex LLC Extending the Operative 

Date of NYSE Amex Equities Rule 

92(c)(3) From December 31, 2010 to 

August 1, 2011 

December 7, 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 November 

29, 2010, 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 extend the 

operative date of NYSE Amex Equities 

Rule 92(c)(3) from December 31, 2010 to 

August 1, 2011. The text of the proposed 

rule change is available at the Exchange, 

the Commission’s Public Reference 

Room, on the Commission’s Web site at 

http://www.sec.gov, and 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to extend 

the delayed operative date of Rule 

92(c)(3) from December 31, 2010 to 

August 1, 2011. The Exchange believes 

that this extension will provide the time 

necessary for the Exchange, the New 

York Stock Exchange LLC (‘‘NYSE’’), and 

the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) to harmonize 

their respective rules concerning 

customer order protection to achieve a 

standardized industry practice.4

Background 

On July 5, 2007, the Commission 

approved amendments to NYSE Rule 92 

to permit riskless principal trading at 

the NYSE.5 These amendments were 

filed in part to begin the harmonization 

process between NYSE Rule 92 and 

FINRA’s Manning Rule.6 In connection 

with those amendments, the NYSE 

implemented for an operative date of 

January 16, 2008, NYSE Rule 92(c)(3), 

which permits NYSE member 

organizations to submit riskless 

principal orders to the NYSE, but 

requires them to submit to a designated 

NYSE database a report of the execution 

of the facilitated order. That rule also 

requires members to submit to that same 

database sufficient information to 

provide an electronic link of the 

execution of the facilitated order to all 

of the underlying orders. 

For purposes of NYSE Rule 92(c)(3), 

the NYSE informed member 

organizations that when executing 

riskless principal transactions, firms 

must submit order execution reports to 

the NYSE’s Front End Systemic Capture 

(‘‘FESC’’) database linking the execution 

of the riskless principal order on the 

NYSE to the specific underlying orders. 

The information provided must be 

sufficient for both member firms and the 

NYSE to reconstruct in a timesequenced manner all orders, including 

allocations to the underlying orders, 

with respect to which a member 

organization is claiming the riskless 

principal exception. 

Because the rule change required both 

the NYSE and member organizations to 

make certain changes to their trading 

and order management systems, the 

NYSE filed to delay to May 14, 2008 the 

operative date of the NYSE Rule 92(c)(3) 

requirements, including submitting endof-day allocation reports for riskless 

principal transactions and using the 

riskless principal account type 

indicator.7 The NYSE filed for 

additional extensions of the operative 

date of Rule 92(c)(3) to December 31, 

2010.8 Because NYSE Amex adopted 

NYSE Rule 92 in its then current form,9

the delayed operative date for the NYSE 

Rule 92(c)(3) reporting requirements 

also applied for NYSE Amex Equities 

Rule 92(c)(3) reporting requirements 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
77686 Federal Register / Vol. 75, No. 238 / Monday, December 13, 2010 / Notices 

10See Securities Exchange Act Release Nos. 

59620 (Mar. 23, 2009), 74 FR 14176 (Mar. 30, 2009) 

(SR–NYSEALTR–2009–29); 60397 (July 30, 2009), 

74 FR 39128 (Aug. 5, 2009) (SR–NYSEAmex–2009– 

48); 61250 (Dec. 29, 2009), 75 FR 477 (Jan. 5, 2010) 

(SR–NYSEAmex–2009–92); and 62540 (July 21, 

2010), 75 FR 44040 (July 27, 2010) (SR– 

NYSEAmex–2010–70). 

11See Securities Exchange Act Release No. 61168 

(Dec. 15, 2009), 74 FR 68084 (Dec. 22, 2009) (SR– 

FINRA–2009–90). 

12The Exchange notes that it would also need to 

make technological changes to implement the 

proposed FESC reporting solution for Rule 92(c)(3). 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

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

16 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to 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 this requirement. 

and the Exchange filed for additional 

extensions of the operative date, the 

most recent of which was an extension 

to December 31, 2010.10

Request for Extension 

FINRA, NYSE, and the Exchange have 

been working diligently on fully 

harmonizing their respective rules, 

including reviewing the possibilities for 

a uniform reporting standard for riskless 

principal transactions. However, 

because of the complexity of the 

existing customer order protection rules, 

including the need for input from 

industry participants as well as 

Commission approval, the Exchange, 

NYSE, and FINRA will not have 

harmonized their respective customer 

order protection rules by the current 

December 31, 2010 date for the 

implementation of the FESC riskless 

principal reporting. 

The Exchange notes that it has agreed 

with NYSE and FINRA to pursue efforts 

to harmonize customer order protection 

rules. On December 10, 2009, FINRA 

filed with the Commission its rule 

proposal to adopt a new industry 

standard for customer order protection 

as proposed FINRA Rule 5320.11 That 

proposed filing is based on the draft rule 

text that FINRA and NYSE Regulation 

each circulated to their respective 

member participants and includes 

copies of the comment letters that 

FINRA and NYSE Regulation received 

on the rule proposal. The Exchange 

intends to adopt a new customer order 

protection rule that is substantially 

identical to proposed FINRA Rule 5320. 

FINRA has filed to extend the time for 

Commission action on its rule filing to 

adopt proposed FINRA Rule 5320 to 

December 3, 2010. As proposed by 

FINRA, however, its proposed new rule 

will not be effective upon approval. 

Rather, the rule filing will become 

effective at a later date, not yet known, 

in order to provide time for FINRA, 

NYSE, and market participants to 

implement programming changes 

associated with the proposed new rule. 

The Exchange continues to believe 

that pending full harmonization of the 

respective customer order protection 

rules, it would be premature to require 

firms to meet the current Rule 92(c)(3) 

FESC reporting requirements.12 Indeed, 

having differing reporting standards for 

riskless principal orders would be 

inconsistent with the overall goal of the 

harmonization process. 

Accordingly, to provide the Exchange, 

NYSE, and FINRA the time necessary to 

obtain Commission approval for and 

implement a harmonized rule set that 

would apply across their respective 

marketplaces, including a harmonized 

approach to riskless principal trade 

reporting, the Exchange is proposing to 

delay the operative date for NYSE Amex 

Equities Rule 92(c)(3) from December 

31, 2010 to August 1, 2011. 

Pending the harmonization of the 

three rules, the Exchange will continue 

to require that, as of the date each 

member organization implements 

riskless principal routing, the member 

organization have in place systems and 

controls that allow them to easily match 

and tie riskless principal execution on 

the Exchange to the underlying orders 

and that they be able to provide this 

information to the Exchange upon 

request. To make clear that this 

requirement continues, the Exchange 

proposes to amend supplementary 

material .95 to Rule 92 to specifically 

provide that the Rule 92(c)(3) reporting 

requirements are suspended until 

August 1, 2011 and that member 

organizations are required to have in 

place such systems and controls relating 

to their riskless principal executions on 

the Exchange. Moreover, the Exchange 

will coordinate with NYSE and FINRA 

to examine for compliance with the rule 

requirements for those firms that engage 

in riskless principal trading under Rule 

92(c). 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),13 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,14

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 extension provides the 

Exchange, NYSE, and FINRA the time 

necessary to develop a harmonized rule 

concerning customer order protection 

that will enable member organizations 

to participate in the national market 

system without unnecessary 

impediments. 

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 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 for 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, it has become effective 

pursuant to Section 19(b)(3)(A) of the 

Act 15 and Rule 19b–4(f)(6) 

thereunder.16

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend 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: 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
Federal Register / Vol. 75, No. 238 / Monday, December 13, 2010 / Notices 77687 

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. 

4See Securities Exchange Act Release No. 56017 

(July 5, 2007), 72 FR 38110 (July 12, 2007) (SR– 

NYSE–2007–21). 

5See NASD Rule 2111 and IM–2110–2. 

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–NYSEAmex–2010–111 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–NYSEAmex–2010–111. 

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 Web site viewing and 

printing in the Commission’s Public 

Reference Room 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 available publicly. All 

submissions should refer to File 

Number SR–NYSEAmex–2010–111 and 

should be submitted on or before 

January 3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31199 Filed 12–10–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63455; File No. SR–NYSE– 

2010–76] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Extending the 

Operative Date of NYSE Rule 92(c)(3) 

From December 31, 2010 to August 1, 

2011 

December 7, 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 November 

29, 2010, 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 extend the 

operative date of NYSE Rule 92(c)(3) 

from December 31, 2010 to August 1, 

2011. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

on the Commission’s Web site at 

http://www.sec.gov and 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is proposing to extend 

the delayed operative date of NYSE Rule 

92(c)(3) from December 31, 2010 to 

August 1, 2011. The Exchange believes 

that this extension will provide the time 

necessary for the Exchange and the 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) to harmonize 

their respective rules concerning 

customer order protection to achieve a 

standardized industry practice. 

Background 

On July 5, 2007, the Commission 

approved amendments to NYSE Rule 92 

to permit riskless principal trading at 

the Exchange.4 These amendments were 

filed in part to begin the harmonization 

process between Rule 92 and FINRA’s 

Manning Rule.5 In connection with 

those amendments, the Exchange 

implemented for an operative date of 

January 16, 2008, NYSE Rule 92(c)(3), 

which permits Exchange member 

organizations to submit riskless 

principal orders to the Exchange, but 

requires them to submit to a designated 

Exchange database a report of the 

execution of the facilitated order. That 

rule also requires members to submit to 

that same database sufficient 

information to provide an electronic 

link of the execution of the facilitated 

order to all of the underlying orders. 

For purposes of NYSE Rule 92(c)(3), 

the Exchange informed member 

organizations that when executing 

riskless principal transactions, firms 

must submit order execution reports to 

the Exchange’s Front End Systemic 

Capture (‘‘FESC’’) database linking the 

execution of the riskless principal order 

on the Exchange to the specific 

underlying orders. The information 

provided must be sufficient for both 

member firms and the Exchange to 

reconstruct in a time-sequenced manner 

all orders, including allocations to the 

underlying orders, with respect to 

which a member organization is 

claiming the riskless principal 

exception. 

Because the rule change required both 

the Exchange and member organizations 

to make certain changes to their trading 

and order management systems, the 

NYSE filed to delay to May 14, 2008 the 

operative date of the NYSE Rule 92(c)(3) 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1