Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Notices 80553 

4The text of the proposed rule change is available 

on the Commission’s Web site at http:// 

www.sec.gov. 

5 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. 63187 

(October 27, 2010), 75 FR 67424 (‘‘Notice’’). 

4CBOE Rule 6.45(e) states that ‘‘A complex order 

as defined in Rule 6.42.01 may be executed at a net 

debit or credit price with another Trading Permit 

Holder without giving priority to equivalent bids 

(offers) in the individual series legs that are 

represented in the trading crowd or in the public 

customer limit order book provided at least one leg 

of the order betters the corresponding bid (offer) in 

the public customer limit order book by at least one 

minimum trading increment as defined in Rule 6.42 

(i.e., $0.10, $0.05 or $0.01, as applicable) or a $0.01 

increment, which increment shall be determined by 

the Exchange on a class-by-class basis. Stock-option 

orders and security future-option orders, as defined 

in Rule 1.1(ii)(a) and Rule 1.1(zz)(a), respectively, 

have priority over bids (offers) of the trading crowd 

but not over bids (offers) in the public customer 

limit order book.’’ 

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–CME–2010–01 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–CME–2010–01. 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 the Exchange.4 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–CME–2010–01 and should 

be submitted on or before January 12, 

2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32086 Filed 12–21–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63558; File No. SR– 

NYSEAmex–2010–100] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Order Approving a 

Proposed Rule Change Relating to 

Complex Orders 

December 16, 2010. 

I. Introduction 

On October 20, 2010, NYSE Amex 

LLC (‘‘NYSE Amex’’ or the ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’), pursuant 

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

Exchange Act of 1934 (the ‘‘Act’’),1 and 

Rule 19b–4 thereunder,2 a proposed rule 

change to: (i) Add to Rule 900.3NY(h) a 

definition of ‘‘Stock/Complex Order;’’ 

(ii) revise Rule 963NY(d) to update the 

provisions governing open outcry 

trading of Complex Orders and Stock/ 

option Orders and apply these 

provisions to Stock/Complex Orders; 

(iii) delete Rule 963.1NY; (iv) add Rule 

980NY(e) to establish an electronic 

Complex Order Auction (‘‘COA’’); and 

(v) revise other provisions of Rule 

980NY to include Stock/Complex 

Orders. The proposed rule change was 

published for comment in the Federal 

Register on November 2, 2010.3 The 

Commission received no comments 

regarding the proposal. This order 

approves the proposed rule change. 

II. Description of the Proposal 

A. Definition of Stock/Complex Order 

The proposal amends Rule 

900.3NY(h) to add a definition of 

‘‘Stock/Complex Order.’’ Rule 

900.3NY(h)(2) defines a ‘‘Stock/Complex 

Order’’ as the purchase or sale of a 

Complex Order, as defined in Rule 

900.3NY(e), coupled with an order to 

buy or sell a stated number of units of 

an underlying stock or a security 

convertible into the underlying stock 

(‘‘convertible security’’) representing 

either (A) the same number of units of 

the underlying stock or convertible 

security as are represented by the 

options leg of the Complex Order with 

the least number of options contracts, or 

(B) the number of units of the 

underlying stock necessary to create a 

delta neutral position, but in no case in 

a ratio greater than eight options 

contracts per unit of trading of the 

underlying stock or convertible security 

established for that series by the 

Clearing Corporation, as represented by 

the options leg of the Complex Order 

with the least number of options 

contracts. 

B. Revisions To Open Outcry Rules 

The proposal revises paragraph (d) of 

Rule 963NY, ‘‘Priority and Order 

Allocation Procedures—Open Outcry,’’ 

to update the provisions governing the 

trading of Complex Orders Stock/option 

Orders in open outcry. Rule 963NY(d), 

as amended, will also apply to Stock/ 

Complex Orders trading in open outcry. 

According to the Exchange, the changes 

to Rule 963NY(d) streamline and update 

the text of Rule 963NY(d), but do not 

alter the Exchange’s existing procedures 

for trading Complex Orders or Stock/ 

option Orders, or the priority of 

quotations and orders. The Exchange 

notes that the Rule 963NY(d), as 

amended, is based on Chicago Board 

Options Exchange, Incorporated 

(‘‘CBOE’’) Rule 6.45(e).4

Under Rule 963(d), as amended, 

Complex Orders, as defined in Rule 

900.3NY(e), and Stock/Complex Orders, 

as defined in Rule 900.3(h)(2), may be 

executed at a net debit or credit with 

another ATP Holder without giving 

priority to equivalent bids (offers) in the 

individual series legs that are 

represented in the Trading Crowd or 

Customer limit orders in the 

Consolidated Book, provided that at 

least one options leg of the order betters 

the corresponding Customer bid (offer) 

in the Consolidated Book by at least one 

minimum trading increment, as defined 

in Rule 960NY (i.e., $0.10, $0.50, or 

$0.01, as applicable), or a $0.01 

increment, as determined by the 

Exchange on a class-by-class basis. 

Stock/option Orders, as defined in Rule 

900.3(h)(1), have priority over 

equivalent bids (offers) of the trading 

crowd, but not over equivalent 

Customer bids (offers) in the 

Consolidated Book. 

In addition, Rule 963NY(d) provides 

that bids and offers for Complex Orders, 

Stock/option Orders, and Stock/ 


srobinson on DSKHWCL6B1PROD with NOTICES
80554 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Notices 

5See note 3, supra. 

6See Rule 980NY(e)(1). 

7See Rule 980NY(e)(1)(A). 

8See Rule 980NY(e)(2). 

9 Id. 

10See Rule 980NY(e)(4). 

11 Id. 

12See Rule 980NY(e)(3). 

13 Id. Rule 935NY provides that: ‘‘With respect to 

orders routed to the NYSE Amex System, Users may 

not execute as principal orders they represent as 

agent unless (i) agency orders are first exposed on 

the Exchange for at least one (1) second or (ii) the 

User has been bidding or offering on the Exchange 

for at least one (1) second prior to receiving an 

agency order that is executable against such bid or 

offer.’’ 

14See Rule 980NY(e)(7). 

15 Id. 

16 Id. 

17See Rule 980NY(e)(5) and (6). 

18See Rule 980NY(e)(6)(A)–(C). 

19See Rule 980NY(e)(6)(D). 

20See Rule 980NY(e)(5). 

21 Incoming Electronic Complex Orders received 

during the Response Time Interval that are on the 

opposite side of the market from, and marketable 

against, the COA-eligible order will be ranked and 

executed in price/time priority with RFR Responses 

by account type, as provided in Rule 980NY(e)(6), 

and any remaining balance of the initiating COAeligible order or the incoming Electronic Complex 

Order will be placed in the Consolidated Book. 

Incoming COA-eligible orders received during the 

Response Time Interval that are one the same side 

of the market and at a price that is equal to the price 

of the original COA-eligible order will join the 

COA, and a message with the updated size will be 

published. The incoming order(s) and the initiating 

COA-eligible order will be ranked and executed in 

price/time priority, and any remaining balance of 

the initiating order or the incoming order(s) will be 

placed in the Consolidated Book. Similarly, an 

incoming COA-eligible order on the same side of 

the market as the original COA-eligible order with 

a price that is worse than the price of the original 

COA-eligible order will join the COA, and will be 

ranked and executed with the initiating COAeligible order in price/time priority. An incoming 

COA-eligible order on the same side of the market 

as the original COA-eligible order with a price that 

is better than the price of the original COA-eligible 

order will cause the auction to end, and the 

initiating COA-eligible order will be executed in 

accordance with Rule 980NY(e)(6). The COAeligible order that caused the auction to end will 

then be executed, and any unexecuted portion will 

either be placed in the Consolidated Book or, if 

marketable, will initiate another COA. See Rule 

980NY(e)(8). 

22See Rule 980NY(e)(9). 

Complex Orders may be expressed in 

$0.01 increments regardless of the 

minimum increment otherwise 

applicable to the individual legs of the 

order. 

The Exchange also proposes to delete 

Rule 963.1NY, ‘‘Complex Order 

Transactions—Open Outcry.’’ According 

to the Exchange, Rule 963NY(d) 

describes priority for all Complex 

Orders and Stock/option Orders. The 

Exchange states that Rule 963.1NY 

describes procedures for executing 

Complex Orders in open outcry, but 

does not describe any execution 

priority, obligation, or privilege that is 

not already described in other rules. In 

addition, Rule 963.1NY describes 

procedures only for Complex Orders 

with two options legs, rather than for all 

Complex Orders. The Exchange notes, 

further, that Rule 963.1NY(f) describes a 

narrow circumstance, relating to a 

Locked Book Market, that was more 

appropriate when an Order Book 

Official maintained the Public Customer 

Book. According to the Exchange, Rule 

963NY(d), as amended, addresses this 

and similar circumstances more clearly. 

Accordingly, the Exchange proposes to 

delete Rule 963.1NY. 

C. Electronic COA 

As described more fully in the 

Notice,5 the Exchange proposes to adopt 

Rule 980NY(e), which establishes an 

electronic request for responses COA for 

Complex Orders, Stock/option Orders, 

and Stock/Complex Orders (‘‘Electronic 

Complex Orders’’). The Exchange states 

that the COA is similar to the electronic 

complex order auction provided for in 

CBOE Rule 6.53(d), with a priority 

change based on Nasdaq OMX Phlx, Inc. 

Rule 1080, Commentary .08(e)(vi)(A)(2). 

Electronic Complex Orders processed 

through the Exchange’s COA may be 

executed without consideration to 

prices of the same complex orders that 

might be available on other exchanges.6

The Exchange may determine, on a 

class-by-class basis, the Electronic 

Complex Orders that are eligible for a 

COA (‘‘COA-eligible orders’’), based on 

the order’s marketability, size, number 

of series, and order origin type (i.e., 

Customer, broker-dealer that is not a 

Market-Maker or options exchange 

specialist, and/or Market-Maker or 

options exchange specialist).7 Upon 

receipt of a COA-eligible order, and 

direction from the entering ATP Holder 

that an auction be initiated, the 

Exchange will send an RFR message to 

ATP Holders that subscribe to RFR 

messages.8 The RFR message will 

identify the component series, the size 

of the order and any contingencies, but 

not the side of the market.9

Each Market-Maker with an 

appointment in the relevant option 

class, and each ATP Holder acting as 

agent for orders resting at the top of the 

Consolidated Book in the relevant 

option series, may submit responses to 

the RFR message (‘‘RFR Responses’’) 

during the Response Time Interval.10

RFR Responses, which may be 

submitted in $0.01 increments, will be 

ranked and displayed in the 

Consolidated Book.11 The Exchange will 

determine the length of the Response 

Time Interval, which will not exceed 

one second.12 The obligations of Rule 

935NY, ‘‘Order Exposure Requirements,’’ 

are separate from the duration of the 

Response Time Interval.13

RFR Responses may be modified, but 

may not be withdrawn, at any time prior 

to the end of the Response Time 

Interval.14 At the end of the Response 

Time Interval, RFR Responses are firm 

with respect to the COA-eligible order, 

and RFR Responses that exceed the size 

of the COA-eligible order are also firm 

with respect to other incoming COAeligible orders and RFR Responses that 

are received during the Response Time 

Interval.15 Any RFR Responses that are 

not accepted in full or in a permissible 

ratio will expire at the end of the 

Response Time Interval.16

At the conclusion of the Response 

Time Interval, a COA-eligible order will 

be executed in whole or in part against 

the best priced contra side interest.17 At 

the same net price, a COA-eligible order 

will execute first against individual 

orders and quotes in the leg markets 

resting in the Consolidated Book prior 

to the initiation of the COA, provided 

that the COA-eligible order can be 

executed in full, or in a permissible 

ratio, by orders and quotes in the 

Consolidated Book; second, against 

Customer Electronic Complex Orders 

resting in the Consolidated Book before, 

or that are received during, the 

Response Time Interval, and Customer 

RFR Responses, allocated on a size pro 

rata basis as defined in Rule 

964NY(b)(3); and third, against nonCustomer Electronic Complex Orders 

resting in the Consolidated Book or 

placed in the Consolidated Book during 

the Response Time Interval, and nonCustomer RFR Responses, allocated on 

a size pro rata basis as defined in Rule 

964NY(b)(3).18 Individual orders and 

quotes in the leg markets that cause the 

derived Complex Best Bid/Offer to be 

improved during the COA and match 

the best RFR Responses and/or 

Electronic Complex Orders received 

during the Response Time Interval will 

be filled after Electronic Complex 

Orders and RFR Responses at the same 

net price.19 Any unexecuted portion of 

a COA-eligible order will be placed in 

the Consolidated Book or, if marketable, 

will initiate another COA.20

The COA rules also address the 

handling of unrelated Electronic 

Complex Orders received during a 

COA,21 and the effect of a change in the 

best bid or offer in the leg markets.22

A pattern or practice of submitting 

unrelated orders that cause a COA to 

conclude early, or the dissemination to 

third parties of information related to 

COA-eligible orders, will be deemed 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Notices 80555 

23See Rule 980NY(e), Commentary .04. 

24 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

25 15 U.S.C. 78f(b)(5). 

26See Rule 900.3NY(h)(2). 

27See Rule 900.3NY(e). Specifically, Rule 

900.3NY(e) states that a Complex Order is an order 

involving the simultaneous purchase and/or sale of 

two or more different option series in the same 

underlying security, for the same account, in a ratio 

that is equal to or greater than one-to-three (.333) 

and less than or equal to three-to-one (3.00) and for 

the purpose of executing a particular investment 

strategy. 

28See Rules 963NY(d) and 980NY, Commentary 

.02. 

conduct inconsistent with just and 

equitable principles of trade.23

D. Additional Changes 

The proposal modifies Rule 980NY, 

Commentary .02 to provide that at least 

one leg of an Electronic Complex Order 

must trade at a price that is a least $0.01 

better than the corresponding Customer 

bid or offer in the Consolidated Book if 

the Exchange has designated the options 

class as eligible for COAs. The proposal 

also amends Rule 980NY, Commentary 

.03(a) to require the execution of the 

stock component of a Stock/Complex 

Order to be consistent with the rules of 

the stock execution venue. In addition, 

the proposal revises Rule 980NY, 

Commentary .03(c) to establish the 

execution sequence for Stock/Complex 

Orders submitted to the Exchange’s 

Complex Matching Engine (‘‘CME’’). The 

proposal also amends Rule 980NY, 

Commentary .03(d), to provide that the 

requirement to trade with existing 

Customer interest at the Exchange’s best 

bid (offer) before executing the options 

legs of a Stock/Complex Order will 

apply only if there are Customer orders 

at the best bid (offer) for each of the 

options legs of the Stock/Complex 

Order. 

III. Discussion and Commission 

Findings 

The Commission finds that the 

proposed rule change is consistent with 

the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.24 In particular, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,25 which requires, in part, that the 

rules of a national securities exchange 

be 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 

Commission finds that the proposal is 

designed to facilitate the trading of 

Complex Orders, Stock/option Orders, 

and Stock/Complex Orders on the 

Exchange. 

Rule 900.3NY(h)(2) defines a new 

order type, the Stock/Complex Order, 

that could provide market participants 

with flexibility by permitting orders 

composed of an underlying stock or 

convertible security and multiple 

options legs. As discussed above, a 

Stock/Complex Order must be 

comprised of a Complex Order, as 

defined in Rule 900.3NY(e), and a stock 

leg.26 Under the proposal, the options 

legs of a Stock/Complex Order must (a) 

satisfy the conditions in the definition 

of Complex Order; 27 and (b) at least one 

options leg of a Complex Order or a 

Stock/Complex Order must trade at a 

price that is better than the 

corresponding Customer bid or offer for 

the same series.28 Accordingly, the 

priority provisions applicable to Stock/ 

Complex Orders are consistent with the 

priority provisions applicable to 

Complex Orders. 

Rule 963NY(d), as amended, sets forth 

the procedures and priority 

requirements for Complex Orders, 

Stock/option Orders, and Stock/ 

Complex Orders trading in open outcry. 

As described more fully above, Rule 

963NY(d) states that Complex Orders 

and Stock/Complex Orders may be 

executed at a net debt or credit with 

another ATP Holder without giving 

priority to equivalent bids (offers) in the 

individual series legs that are 

represented in the Trading Crowd or 

Customer limit orders in the 

Consolidated Book, provided that at 

least one options leg of the order betters 

the corresponding Customer bid (offer) 

by at least one minimum trading 

increment or by a $0.01 increment, as 

applicable. Stock/option Orders have 

priority over equivalent bids (offers) in 

the Trading Crowd, but not over 

equivalent Customer bids (offers) in the 

Consolidated Book. The Commission 

notes that Rule 963NY(d), as amended, 

is substantially similar to CBOE Rule 

6.45(e). According to the Exchange, the 

proposal streamlines and updates Rule 

963NY(d), but does not substantively 

alter the procedures or priorities for 

trading Complex Order and Stock/ 

option Orders in open outcry. 

The proposal also applies the 

priorities and procedures in Rule 

963NY(d) to Stock/Complex Orders. The 

Commission believes that it is 

reasonable to apply these procedures 

and priorities to Stock/Complex Orders 

to provide consistent treatment of 

Complex Orders, which are comprised 

of multiple options legs, and Stock/ 

Complex Orders, which are comprised 

of multiple options legs and the 

underlying stock or convertible security. 

The Commission believes, further, that 

the changes to Rule 963NY(d), together 

with the deletion of Rule 963.1NY, 

which has become outdated, should 

help to assure that the Exchange’s rules 

clearly describe the procedures and 

priorities for executing Complex Orders, 

Stock/Complex Orders, and Stock/ 

option Orders in open outcry. 

The Commission believes that the 

electronic COA provided in new Rule 

980NY(e) could facilitate the trading of 

Complex Orders, Stock/Complex 

Orders, and Stock/option Orders and 

provide price improvement 

opportunities for these orders. As 

described more fully above, Market 

Makers with an appointment in the 

relevant options class and ATP Holders 

acting as agent for orders resting at the 

top of the Consolidated Book will be 

able to submit RFR Responses. At the 

conclusion of a COA, the auctioned 

order may execute against individual 

orders or quotes, Customer Electronic 

Complex Orders or RFR Responses, or 

non-Customer Electronic Complex 

Orders or RFR Responses, as provided 

in Rule 980NY(e)(6). The Commission 

notes that the Exchange’s COA is 

substantially similar to the electronic 

complex order auction provided under 

CBOE Rule 6.53C(d). 

The proposal revises Rule 980NY, 

Commentary .02, to provide that, for 

options classes designated as eligible for 

COAs, at least one leg of an Electronic 

Complex Order must trade at a price 

that is better than the corresponding 

Customer bids or offers in the same 

series in the Consolidated Book by at 

least $0.01. The Commission believes 

that the $0.01 price improvement 

requirement is appropriate in this 

circumstance in light of the price 

competition for Electronic Complex 

Orders driven by the Consolidated Book 

and the availability of the COA. 

In addition, the Commission notes 

that the changes to Rule 980NY, 

Commentary .03, relating to the 

electronic trading of Stock/Complex 

Orders, are consistent with the 

treatment in CBOE Rule 6.53C, 

Commentary .06, of orders composed of 

stock and multiple options legs. The 

requirement in Rule 980NY, 

Commentary .03(a) that the stock leg of 

a Stock/Complex Order be executed 

consistent with the rules of the stock 

execution venue is consistent with the 

requirement in CBOE Rule 6.53C, 

Commentary .06(a), that the stock leg of 

an order be executed consistent with the 

order execution rules of the CBOE Stock 


srobinson on DSKHWCL6B1PROD with NOTICES
80556 Federal Register / Vol. 75, No. 245 / Wednesday, December 22, 2010 / Notices 

29See Rule 980NY(e)(3) and note 13, supra. 

30 15 U.S.C. 78s(b)(2). 

31 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(1). 

5The current FINRA rulebook consists of (1) 

FINRA Rules; (2) NASD Rules; and (3) rules 

incorporated from NYSE (‘‘Incorporated NYSE 

Rules’’) (together, the NASD Rules and Incorporated 

NYSE Rules are referred to as the ‘‘Transitional 

Rulebook’’). While the NASD Rules generally apply 

to all FINRA members, the Incorporated NYSE 

Rules apply only to those members of FINRA that 

are also members of the NYSE (‘‘Dual Members’’). 

The FINRA Rules apply to all FINRA members, 

unless such rules have a more limited application 

by their terms. For more information about the 

rulebook consolidation process, see Information 

Notice, March 12, 2008 (Rulebook Consolidation 

Process). 

6See Securities Exchange Act Release No. 63150 

(October 21, 2010), 75 FR 66173 (October 27, 2010) 

(Order Approving Proposed Rule Change; File No. 

SR–FINRA–2009–058). 

7See Securities Exchange Act Release No. 61819 

(March 31, 2010), 75 FR 17806 (April 7, 2010) 

(Order Approving Proposed Rule Change; File No. 

SR–FINRA–2009–061). 

8 15 U.S.C. 78o–3(b)(6). 

Exchange. The execution sequence for 

Stock/Complex Orders in Rule 980NY, 

Commentary .03(b) for orders submitted 

to the Exchange’s CME is consistent 

with the execution sequence set forth in 

CBOE Rule 6.53C, Commentary .06(c), 

and the requirement in Rule 980NY, 

Commentary .03(d) to trade with 

Customer orders only if there are 

Customer orders at the Exchange’s best 

quote for each of the options legs of a 

Stock/Complex Order is consistent with 

CBOE Rule 6.53C, Commentary .06(f). 

Rule 980NY, Commentary .04 

provides that a pattern or practice of 

submitting unrelated orders that cause a 

COA to conclude early will be deemed 

conduct inconsistent with just and 

equitable principles of trade, as will the 

dissemination to third parties of 

information related to COA-eligible 

orders. These provisions, which are 

comparable to CBOE Rule 6.53C, 

Commentary .05, will require the 

Exchange to surveil for, and should help 

to deter, potential abuses of the COA 

process. Finally, the Commission notes 

that the order exposure obligations in 

Rule 935NY apply to orders submitted 

to a COA, and that these order exposure 

obligations are separate from the 

duration of the Response Time 

Interval.29

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,30 that the 

proposed rule change (File No. SR– 

NYSEAmex–2010–100) is approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.31

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–32089 Filed 12–21–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63561; File No. SR–FINRA– 

2010–066] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Update a CrossReference in FINRA Rule 2232 

(Customer Confirmations) 

December 16, 2010. 

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 December 

13, 2010, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) (f/k/a 

National Association of Securities 

Dealers, Inc. (‘‘NASD’’)) filed with the 

Securities and Exchange Commission 

(‘‘SEC’’ or ‘‘Commission’’) the proposed 

rule change as described in Items I and 

II below, which Items have been 

prepared by FINRA. FINRA has 

designated the proposed rule change as 

‘‘constituting a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule’’ under 

Section 19(b)(3)(A)(i) of the Act 3 and 

Rule 19b–4(f)(1) thereunder,4 which 

renders the proposal effective upon 

receipt of this filing by the Commission. 

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 

FINRA is proposing to update a 

certain cross-reference in FINRA Rule 

2232 (Customer Confirmations) to 

reflect changes adopted in the 

consolidated FINRA rulebook. 

The text of the proposed rule change 

is available on FINRA’s website at 

http://www.finra.org, at the principal 

office of FINRA, on the Commission’s 

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

the Commission’s Public Reference 

Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FINRA 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 these statements 

may be examined at the places specified 

in Item IV below. FINRA 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 

FINRA is in the process of developing 

a new consolidated rulebook 

(‘‘Consolidated FINRA Rulebook’’).5 As 

part of that process, the SEC recently 

approved the adoption of FINRA Rule 

2232 (Customer Confirmations) in the 

Consolidated FINRA Rulebook.6

The proposed rule change updates a 

certain cross-reference in FINRA Rule 

2232 to reflect recent changes adopted 

in the Consolidated FINRA Rulebook, 

specifically, the transfer of the 

definition of ‘‘direct participation 

program’’ from former FINRA Rule 6642 

to current FINRA Rule 6420.7

FINRA has filed the proposed rule 

change for immediate effectiveness. The 

implementation date of FINRA Rule 

2232 will be June 17, 2011. 

2. Statutory Basis 

FINRA believes that the proposed rule 

change is consistent with the provisions 

of Section 15A(b)(6) of the Act,8 which 

requires, among other things, that 

FINRA rules must be designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, and, in 

general, to protect investors and the 

public interest. FINRA believes the 

proposed rule change will provide 

greater clarity to members and the 

public regarding FINRA’s rules. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

FINRA does not believe that the 

proposed rule change will result in 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 

Written comments were neither 

solicited nor received. 


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