39124 Federal Register / Vol. 74, No. 149 / Wednesday, August 5, 2009 / Notices 

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

2 17 CFR 240.19b–4. 

3NYSE Amex LLC has submitted a companion 

rule filing proposing corresponding amendments to 

NYSE Amex Disciplinary Rule 476A. See SR– 

NYSE–Amex–2009–47, formally submitted July 22, 

2009). 

4See NYSE Rule 104(f)(ii). 

by market dominant products as a result 

of this contract. Id. 

Related contract. A redacted version 

of the specific Priority Mail Contract 17 

is included with the Request. The 

contract will become effective on the 

day that the Commission provides all 

necessary regulatory approvals. It is 

terminable upon 30 days’ notice by 

either party, but could continue for 3 

years without modification. See id., 

Attachment A. The Postal Service 

represents that the contract is consistent 

with 39 U.S.C. 3633(a)(1). See id., 

Attachment D. 

The Postal Service will provide the 

shipper with customized pricing for 

eligible Priority Mail items shipped by 

the shipper, as well as Priority Mail 

packaging. The shipper will manifest 

pieces eligible for customized pricing, 

using a separate permit number to ship 

such pieces, and will begin using the 

Electronic Verification System (eVS) for 

shipments of such pieces. Annual price 

adjustments will be applied to shipper’s 

eligible mailpieces. A party may not 

assign the agreement without the other 

party’s consent, which may not be 

unreasonably withheld. 

The Postal Service filed much of the 

supporting materials, including the 

specific Priority Mail Contract 17, under 

seal. In its Request, the Postal Service 

maintains that the contract and related 

financial information, including the 

customer’s name and the accompanying 

analyses that provide prices, terms, 

conditions, and financial projections 

should remain under seal. Id. at 2–3. 

II. Notice of Filings 

The Commission establishes Docket 

Nos. MC2009–37 and CP2009–56 for 

consideration of the Request pertaining 

to the proposed Priority Mail Contract 

17 product and the related contract, 

respectively. In keeping with practice, 

these dockets are addressed on a 

consolidated basis for purposes of this 

Order; however, future filings should be 

made in the specific docket in which 

issues being addressed pertain. 

Interested persons may submit 

comments on whether the Postal 

Service’s filings in the captioned 

dockets are consistent with the policies 

of 39 U.S.C. 3632, 3633, or 3642 and 39 

CFR part 3015 and 39 CFR 3020 subpart 

B. Comments are due no later than 

August 6, 2009. The public portions of 

these filings can be accessed via the 

Commission’s Web site (http:// 

www.prc.gov). 

The Commission appoints Paul L. 

Harrington to serve as Public 

Representative in these dockets. 

III. Ordering Paragraphs 

It is ordered: 

1. The Commission establishes Docket 

Nos. MC2009–37 and CP2009–56 for 

consideration of the matter raised in 

each docket. 

2. Pursuant to 39 U.S.C. 505, Paul L. 

Harrington is appointed to serve as 

officer of the Commission (Public 

Representative) to represent the 

interests of the general public in these 

proceedings. 

3. Comments by interested persons in 

these proceedings are due no later than 

August 6, 2009. 

4. The Secretary shall arrange for 

publication of this order in the Federal 

Register. 

Issued: July 29, 2009. 

By the Commission. 

Judith M. Grady, 

Acting Secretary. 

[FR Doc. E9–18769 Filed 8–4–09; 8:45 am] 

BILLING CODE 7710–FW–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60399; File No. SR–NYSE– 

2009–72] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Amending 

NYSE Rule 476A To Add Rule 

104(a)(1)(A) to Its ‘‘List of Exchange 

Rule Violations and Fines Applicable 

Thereto Pursuant to Rule 476A’’ 

July 30, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that, on July 22, 

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, II, and III below, which Items 

have been substantially 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 476A to add Rule 

104(a)(1)(A) to its ‘‘List of Exchange 

Rule Violations and Fines Applicable 

Thereto Pursuant to Rule 476A.’’ 3 The 

text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

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 proposes to amend 

NYSE Rule 476A to add Rule 

104(a)(1)(A) to its ‘‘List of Exchange 

Rule Violations and Fines Applicable 

Thereto Pursuant to Rule 476A.’’ 

Current NYSE Rule 104 

Current NYSE Rule 104 requires, inter 

alia, Designated Market Makers 

(‘‘DMMs’’) registered in one or more 

securities traded on the Exchange to 

engage in a course of dealings for their 

own account to assist in the 

maintenance of a fair and orderly 

market, insofar as reasonably 

practicable, by contributing liquidity 

when lack of price continuity and 

depth, or disparity between supply and 

demand, exists or is reasonably to be 

anticipated.4 This includes an 

affirmative obligation to provide quotes 

at the National Best Bid or Offer a 

minimum percentage of the trading day 

(‘‘Affirmative Quote Obligation’’). 

The DMMs’ Affirmative Quote 

Obligation is set forth in NYSE Rule 

104(a)(1)(A). Section (a)(1)(A) of Rule 

104 requires DMMs to maintain a bid or 

an offer at the National Best Bid and 

National Best Offer (‘‘inside’’) at least 

10% of the trading day for securities in 

which the DMM unit is registered with 

an average daily volume on the 

Exchange of less than one million 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 74, No. 149 / Wednesday, August 5, 2009 / Notices 39125 

5When a DMM sends an s-quote to establish a 

new best bid or best offer, the DMM’s s-quote may 

end up executing immediately against dark 

liquidity inside the spread rather than being quoted. 

Absent rule relief, the s-quote would not be counted 

toward the DMM Unit’s quoting requirement, even 

though the DMM’s intent was to add liquidity to the 

market, and even though the s-quote in fact resulted 

in an execution. To address this, the Exchange 

added a provision to NYSE Rule 104 that allows the 

Exchange to give credit to a DMM unit that did not 

meet its quoting requirement as a result of the 

continuous immediate execution of its s-quotes. 

6The Exchange’s Minor Rule Violation Plan, Rule 

476A, was originally adopted by the Exchange and 

approved by the Commission in 1985. See 

Securities Exchange Act Release No. 34–[sic]21688 

(January 25, 1985), 50 FR 5025–01 (February 5, 

1985). It has been amended numerous times since 

its adoption. 7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A)(iii). 

9 17 CFR 240.19b–4(f)(6). 

shares, and at least 5% for securities in 

which the DMM unit is registered with 

an average daily volume equal to or 

greater than one million shares. Time at 

the inside is calculated as the average 

percentage of time the DMM unit has a 

bid or offer at the inside. In calculating 

whether the DMM is meeting the 10% 

and 5% requirement, credit may be 

given for executions for the liquidity 

provided by the DMM.5 DMM Reserve 

or other hidden orders are not included 

in the inside quote calculations. 

Proposed Rule Change 

As noted above, the Exchange 

proposes to add NYSE Rule 104(a)(1)(A) 

to its ‘‘List of Exchange Rule Violations 

and Fines Applicable Thereto Pursuant 

to Rule 476A.’’ 

Under the Exchange’s Minor Rule 

Violation Plan, NYSE Rule 476A, the 

Exchange may impose a fine, not to 

exceed $5,000, on any member, member 

organization, allied member, approved 

person or registered or non-registered 

employee of a member or member 

organization for a minor violation of 

certain specified Exchange rules. Fines 

provide a meaningful sanction for rule 

violations when the initiation of a 

disciplinary procedure under Rule 476 

is unwarranted given the facts and 

circumstances of the violation, or when 

the violation calls for a stronger 

response informal discipline than an 

admonition letter.6

Currently, when a DMM fails to meet 

the affirmative quote obligations set 

forth in Rule 104(a)(1)(A), the 

Exchange’s only remedy is to bring a 

formal disciplinary proceeding pursuant 

to Rule 476. This is the case whether or 

not the DMM has failed to meet its 

obligations once or many times and 

regardless of whether the DMM made a 

technical error or an intentional one. 

The Exchange believes that the 

current regulatory approach for dealing 

with DMM quoting obligations is too 

inflexible. The Exchange recognizes that 

DMMs may, for many reasons, fail to 

meet their affirmative quote obligations 

as prescribed under Rule 104(a)(1)(A). 

In some circumstances, formal 

disciplinary measures in accordance 

with Rule 476 are warranted. However, 

in other instances such a proceeding 

may be unwarranted, and the Exchange 

is of the view that the addition of this 

Rule to the list of rule violations and 

fines under Rule 476A will provide a 

more flexible and appropriate tool to 

enforce potential failure by DMMs to 

adhere to the quoting requirements set 

forth in Rule 104(a)(1)(A), while 

preserving the Exchange’s discretion to 

seek formal discipline under the 

appropriate circumstances. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule changes are consistent 

with, and further the objectives of, 

Section 6(b)(5) of the Act,7 in that they 

are 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 

proposed rule changes also further the 

objectives of Section 6(b)(6), in that they 

provide for appropriate discipline for 

violations of principles of the Act, the 

rules and regulations thereunder, and 

Exchange rules and regulations. 

The Exchange believes that the 

proposed rule changes will provide the 

Exchange with greater regulatory 

flexibility to enforce the DMM quoting 

requirements set forth in NYSE Rule 

104(a)(1)(A) in a more informal manner 

while also preserving the Exchange’s 

discretion to seek formal discipline for 

more serious transgressions as 

warranted. 

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 8 and Rule 

19b–4(f)(6) thereunder.9 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. 

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–2009–72 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–2009–72. 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 


srobinson on DSKHWCL6B1PROD with NOTICES
39126 Federal Register / Vol. 74, No. 149 / Wednesday, August 5, 2009 / Notices 

10 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. 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(6). 

6See Securities Exchange Act Release No. 34– 

56017 (July 5, 2007), 72 FR 38110 (July 12, 2007), 

SR–NYSE–2007–21. 

7See NASD Rule 2111 and IM–2110–2. 

8See Securities Exchange Act Release No. 56968 

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

NYSE–2007–114. 

9See Securities Exchange Act Release Nos. 57682 

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

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

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

10NYSE Amex LLC has filed a companion rule 

filing to conform its Equities Rules to the changes 

proposed in this filing. See SR–NYSEAmex–2009– 

48, formally submitted July 24, 2009. 

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 will also be available 

for inspection and copying at the 

principal office of the self-regulatory 

organization. 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–NYSE– 

2009–72 and should be submitted on or 

before August 26, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–18665 Filed 8–4–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60396; File No. SR–NYSE– 

2009–73] 

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 July 31, 2009 to December 31, 

2009 

July 30, 2009. 

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 July 24, 

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 Exchange filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 4 and Rule 

19b-4(f)(6) thereunder,5 which renders it 

effective upon filing with 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 

The Exchange proposes to extend the 

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

from July 31, 2009 to December 31, 

2009. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

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 

Exchange 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 July 31, 2009 to December 

31, 2009. 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.6 These amendments were 

filed in part to begin the harmonization 

process between Rule 92 and FINRA’s 

Manning Rule.7 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 for immediate effectiveness 

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.8 The Exchange filed for 

additional extensions of the operative 

date of Rule 92(c)(3), the most recent of 

which was an extension to July 31, 

2009.9

Request for Extension 10

FINRA 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 


srobinson on DSKHWCL6B1PROD with NOTICES