Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 40273 

16For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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. 

4See SR–NYSE–2009–71. 

5NYSE Euronext acquired The Amex 

Membership Corporation (‘‘AMC’’) pursuant to an 

Agreement and Plan of Merger, dated January 17, 

2008 (the ‘‘Merger’’). In connection with the Merger, 

the Exchange’s predecessor, the American Stock 

Exchange LLC (‘‘Amex’’), a subsidiary of AMC, 

became a subsidiary of NYSE Euronext called NYSE 

Alternext US LLC. Securities Exchange Act Release 

No. 58673 (September 29, 2008), 73 FR 57707 

(October 3, 2008) (SR–NYSE–2008–60 and SR– 

Amex–2008–62) (approving the Merger). 

Subsequently NYSE Alternext US LLC was renamed 

NYSE Amex LLC and continues to operate as a 

national securities exchange registered under 

Section 6 of the Securities Exchange Act of 1934, 

as amended (the ‘‘Act’’). NYSE Alternext US LLC 

was subsequently renamed NYSE Amex LLC. See 

Securities Exchange Act Release No. 59575 (March 

13, 2009), 74 FR 11803 (March 19, 2009) (SR– 

NYSEALTR–2009–24). 

DMM units. In addition, by prohibiting 

communications regarding the selection 

process between members of the Panel 

and DMM units, the Exchange will be 

able to immediately reinforce 

impartiality and fairness during the 

selection process.16 Accordingly, the 

Commission designates the proposed 

rule change operative upon filing with 

the Commission. 

At any time within 60 days of the 

filing of such 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–NYSEAMEX–2009–49 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–2009–49. 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 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– 

NYSEAMEX–2009–49 and should be 

submitted on or before September 1, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19120 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60428; File No. SR– 

NYSEAmex–2009–46] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

NYSE Amex LLC Amending NYSE 

Amex Equities Rule 1000 To Allow 

Exchange Systems to Access CCS 

Interest to Partially Fill an Incoming 

Limit Order 

August 4, 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 20, 

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, II, and 

III below, which Items have been 

prepared by the Exchange. 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 1000 to allow 

Exchange systems to access CCS interest 

to partially fill an incoming limit order. 

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 

NYSE Amex LLC (‘‘NYSE Amex’’ or 

the ‘‘Exchange’’), formerly the American 

Stock Exchange LLC, proposes to amend 

NYSE Amex Equities Rule 1000 to allow 

Exchange systems to access CCS interest 

to partially fill an incoming limit order. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of New York Stock Exchange 

LLC.4

Background 

NYSE Amex adopted sweeping 

changes to its market rules and 

execution technology designed to 

improve execution quality on the 

Exchange as a result of its merger with 

the New York Stock Exchange LLC.5

Among the elements of the adopted 

enhanced Exchange market model, 

NYSE Amex eliminated the function of 

specialists on the Exchange creating a 


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6The provisions of NYSE [sic] Rule 1000 relating 

to CCS are in effect pursuant to a pilot that 

commenced on October 2008 and is scheduled to 

end on October 1, 2009. 7The Display Book reg; system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

DMMs, contains the order information, and 

provides a mechanism to execute and report 

transactions and publish the results to the 

Consolidated Tape. The Display Book system is 

connected to a number of other Exchange systems 

for the purposes of comparison, surveillance, and 

reporting information to customers and other 

market data and national market systems. 

8See NYSE [sic] Rule 62, Supplementary Material 

.10, which provides that the minimum price 

variation (MPV) for quoting and entry of orders in 

equity securities admitted to dealings on the 

Exchange shall be as follows (see table above): 

9Pursuant to NYSE Amex Equities Rule 72 

round-lot executions on the Exchange are allocated 

on an equal basis, i.e. parity, among market 

participants at a price point unless one of the 

participants has established priority. Priority is 

established when the participant is the only interest 

displayed at the price point when such price is or 

becomes the best bid or offer published by the 

Exchange. A participant that establishes priority for 

the displayed portion of his or her order is allocated 

the first 15% of any execution (a minimum of one 

round lot). Any DMM non-CCS interest included in 

the displayed quantity and non-displayed quantity 

is also executed pursuant to NYSE [sic] Rule 72. 

new category of market participant, the 

Designated Market Maker or DMM. The 

DMM, like specialists, have affirmative 

obligations to make an orderly market, 

including continuous quoting 

requirements and obligations to re-enter 

the market when reaching across to 

execute against trading interest. In view 

of the Exchange’s electronic execution 

functionality, the DMM, unlike the 

specialist, would no longer be deemed 

the agent for every incoming order. The 

Exchange also responded to customer 

demand to create additional 

undisplayed reserve interest. 

In another enhancement to the 

Exchange’s market model, designed to 

encourage DMMs to add liquidity, the 

Exchange implemented a system change 

that allowed DMMs to create a schedule 

of additional non-displayed liquidity at 

various price points where the DMM is 

willing to interact with interest and 

provide price improvement to orders in 

the Exchange’s system. This schedule is 

known as the DMM Capital 

Commitment Schedule (‘‘CCS’’).6 CCS 

provides the Display Book® 7 with the 

amount of shares that the DMM is 

willing to trade at price points outside, 

at and inside the Exchange BBO. CCS 

interest is separate and distinct from 

other DMM interest in that it serves as 

the interest of last resort. 

When an order is entered for an 

amount of shares that exceeds the 

liquidity available at the Exchange BBO, 

Exchange systems review all the 

liquidity available on the Display Book 

including CCS interest to determine the 

final price point at which the order can 

be fully executed (the ‘‘completion 

price’’). Exchange systems determine 

the completion price by calculating the 

unfilled volume of the incoming order 

(i.e., the volume of the incoming order 

that exceeds the volume available to 

execute against it that is then present in 

the Exchange bid or offer) and reviewing 

the additional displayed and nondisplayed interest available in the 

Display Book, which may be at more 

than one price point, including the CCS 

interest submitted by the DMM unit that 

is available at the completion price if 

the CCS interest were to participate at 

the completion price. Exchange systems 

also review any protected bids or offers 

on markets other than the Exchange 

(‘‘away interest’’) and determines the 

price at which the remaining volume of 

the contra side order can be executed in 

full. 

Exchange systems then review the 

amount of liquidity offered by CCS to 

determine if the number of shares 

provided via the DMM’s CCS at the 

completion price is less than the 

number of CCS shares provided at the 

next different price that has interest that 

is one minimum price variation 

(‘‘MPV’’) (as that term is defined in 

Exchange Rule 62 8) or more higher (in 

the case of an order to sell) or at the next 

different price that has interest that is 

one MPV or more lower (in the case of 

an order to buy) (hereinafter collectively 

referred to as ‘‘better price’’). 

Price of order or interest 

Minimum 

price 

variation 

Less Than $1.00 ....................... $ .0001 

$1.00 to 99,999.99 ................... .01 

$100,000 or greater .................. .10 

If the volume of CCS interest that 

would be accessed is the same at the 

completion price and the better price, 

Exchange systems access CCS interest at 

the completion price with CCS interest 

yielding to any other interest in 

Exchange systems at the completion 

price. 

If the number of shares that would be 

allocated to the CCS interest at the 

better price is more than the number of 

shares that would be allocated to the 

DMM’s CCS interest at the completion 

price, then Exchange systems will 

access the CCS liquidity available at the 

better price with CCS interest yielding 

to any other interest in Exchange 

systems (both displayed and 

undisplayed reserve interest) at the 

better price. Any remaining balance of 

the incoming order is executed at the 

completion price against displayable 

and non-displayable interest pursuant to 

NYSE Amex Equities Rule 72 (‘‘Priority 

of Bids and Offers and Allocation of 

Executions’’).9

Exchange systems can access CCS 

interest only once to participate in the 

execution of an incoming order. As 

such, CCS interest that may exist at the 

completion price is inaccessible to 

Exchange systems to trade with any 

remaining balance of the incoming order 

if Exchange systems included the 

DMM’s CCS interest in the execution of 

any portion of such order at the better 

price. Moreover, Exchange systems will 

only access CCS interest to participate 

in the execution of an incoming order 

where the incoming order will be 

executed in full. 

Proposed Amendment to NYSE Amex 

Equities Rule 1000 

The Exchange proposes to allow 

Exchange systems to access CCS interest 

to participate in executions where the 

incoming order will only be partially 

executed. The purpose of this change is 

to provide additional liquidity to the 

incoming order. 

As illustrated in the example below, 

because Exchange systems are permitted 

to access CCS interest only where an 

incoming order would be executed in 

full, there are times when the incoming 

order exhausts the displayed and 

reserve interest on the Display Book at 

various price points and the remaining 

shares of the order are quoted. In these 

instances Exchange systems cannot 

access the CCS interest available at the 

price point where the remaining shares 

of the order will be quoted to partially 

fill the incoming limit order. 

Example of Current CCS Operation 

The Exchange Market is 200 shares 

bid at the price of $20.05 and 200 shares 

offered at a price of $20.10. At the price 

points of $20.04, $20.03, $20.02, $20.01 

and $20.00 there are 100 shares bid. The 

CCS interest file is willing to provide 

200 shares of additional bid liquidity at 

each of those price points as well. A 

customer sends the Exchange a sell 

order for 1200 shares with a limit price 

of $20.00. Given the current operation of 

CCS, the order will execute against the 

200 shares at the Exchange bid price of 

$20.05 and all the shares indicated in 

italic typeface at each price point down 

to the orders limit price of $20.00 will 

be executed against the order for a total 

execution of 700 shares. The remaining 

500 shares of the order will be filed in 

Display Book at its limit price of $20.00. 


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10LRPs are pre-determined price points that 

temporarily convert the automatic Exchange market 

to an auction market in order to dampen volatility 

when the market is experiencing a large price 

movement based on a security’s typical trading 

characteristics or market conditions over short 

periods of time during the trading day. LRPs allow 

the DMM to solicit additional liquidity. 

11A DMM cannot provide CCS interest past the 

LRPs because that interest will not be executed. 

Pursuant to current NYSE [sic] Rules, once an LRP 

is reached interest may not trade through the price 

point. 

CCS interest Shares bid Bid price Offer price Shares offered CCS interest 

................................... ................................... $20.10 200 200 

200 200 $20.05 ................................... ................................... ...................................

200 100 $20.04 ................................... ................................... ...................................

200 100 $20.03 ................................... ................................... ...................................

200 100 $20.02 ................................... ................................... ...................................

200 100 $20.01 ................................... ................................... ...................................

200 100 $20.00 ................................... ................................... ...................................

The Exchange proposes to modify the 

operation of CCS interest to allow 

Exchange systems to access and execute 

CCS interest designated to partially fill 

an incoming limit order. This will create 

an additional processing action for 

Exchange systems. Exchange systems 

will continue to review all the liquidity 

available on the Display Book and any 

away market centers; however, once it 

determines that the order cannot be 

executed in full, it will also review the 

DMM CCS interest file to determine if 

any of the liquidity is eligible to 

partially fill the incoming limit order at 

the price where any remaining shares of 

the order would be quoted. 

In order for the DMM CCS interest to 

participate in a partial execution of an 

incoming limit order that exceeds the 

liquidity available at the Exchange BBO 

the DMM must designate interest 

available in the CCS interest file eligible 

for partial execution by including a 

‘‘PF’’ indicator on the shares provided at 

the price point. All liquidity provided 

in the CCS interest file will continue to 

be eligible to participate in executions 

of incoming limit orders in full. Only 

DMM CCS interest containing the PF 

indicator will be available to participate 

in an execution to provide a partial 

execution of an incoming limit order 

that exceeds the liquidity available at 

the Exchange BBO. In this way 

incoming limit orders will have another 

opportunity to receive fuller executions 

prior to quoting. 

Example of Proposed CCS Partial Fill at 

the Price the Remaining Shares Will be 

Quoted 

The Exchange Market is 200 shares 

bid at the price of $20.05 and 200 shares 

offered at a price of $20.10. At the price 

points of $20.04, $20.03, $20.02, $20.01 

and $20.00 there are 100 shares bid. The 

CCS interest file is willing to provide 

200 shares of additional bid liquidity at 

each of those price points as well. The 

CCS interest at $20.00 is designated for 

partial fill. A customer sends the 

Exchange a sell order for 1200 shares 

with a limit price of $20.00. Enabling 

Exchange systems to access CCS interest 

to partially fill the order, the incoming 

limit order will execute against the 200 

shares at the Exchange bid price of 

$20.05. The order would then execute 

against all the shares bid, indicated in 

italic typeface at each price point down 

to the orders limit price of $20.00, 

Exchange systems would execute an 

additional 200 shares of the order 

against the CCS interest at $20.00 

designated for partial fill. The incoming 

limit order receives a total execution of 

900 shares and the remaining 300 shares 

of the order will be filed in Display 

Book at its limit price of $20.00. 

CCS interest Shares bid Bid price Offer price Shares 

offered CCS interest 

................................... ................................... $20.10 200 200 

200 200 $20.05 ................................... ................................... ...................................

200 100 $20.04 ................................... ................................... ...................................

200 100 $20.03 ................................... ................................... ...................................

200 100 $20.02 ................................... ................................... ...................................

200 100 $20.01 ................................... ................................... ...................................

200 PF 100 $20.00 ................................... ................................... ...................................

When Exchange systems access the 

CCS interest in order to provide a partial 

execution of an incoming order, CCS 

interest will participate at the price 

point where the remaining shares will 

be quoted as illustrated in the example 

above. If, however, the incoming order 

reaches a Liquidity Replenishment 

Point (‘‘LRP’’) 10 prior to being executed 

in full, then Exchange systems will 

execute the CCS interest at the LRP 

price, as illustrated in the example 

below, and the remaining shares of the 

order will be quoted thereafter at its 

limit price. In the case of a market order 

it will be quoted at the LRP price. 

Example of Proposed CCS Partial Fill at 

the LRP Price 

CCS Partial Fill at the LRP #1 

The Exchange Market is 200 shares 

bid at the price of $20.10 and 200 shares 

offered at a price of $20.15. The price 

point of $20.05 is a designated LRP. At 

the price points of $20.09 down to 

$20.05 there are 100 shares bid. The 

CCS interest file is willing to provide 

200 shares of additional bid liquidity at 

the price points of $20.09 down to 

$20.05.11 In addition, the CCS interest 

file indicates that the interest at the 

prices $20.08, $20.07 and $20.05 is 

available to provide a partial fill. A 

customer sends the Exchange a sell 

order for 1200 shares with a limit price 

of $20.00. Enabling Exchange systems to 

access CCS interest to partially fill the 

order, the incoming limit order would 

execute against the 200 shares at the 

Exchange bid price of $20.10. The order 

would then execute against all the 

shares bid (indicated in italic typeface) 

at each price point down to the LRP 

price of $20.05. Exchange systems 


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12 If the order were for 600 shares Exchange 

systems would have executed 200 shares at the bid 

price of $20.10, 100 shares at the price of $20.09. 

The Exchange will execute the remaining 300 

shares at the price of $20.08 against the 100 shares 

of ‘‘Shares Bid’’ and CCS interest at the price point. 

However, because the 700 share order could not be 

completely filled at the price of $20.08 including 

CCS interest, it is executed based on the rules 

governing partial executions and will thus be 

executed as illustrated in the example. 

13 If the DMM did not designate the CCS interest 

eligible for partial fill, then the CCS interest would 

not participate in the execution and the remaining 

shares of the order would be quoted. 

would execute an additional 200 shares 

of the order against the CCS interest at 

the LRP price of $20.05 for a total 900 

shares of the incoming limit order 

executed. The original order will 

execute a total of 900 shares above its 

limit price before the remaining 300 

shares of the order is posted on the 

Display Book at its limit price of $20.00. 

CCS interest Shares bid Bid price Offer price Shares 

offered CCS interest 

................................... ................................... $20.15 200 200 

200 200 $20.10 ................................... ................................... ...................................

200 100 $20.09 ................................... ................................... ...................................

200PF 100 $20.08 ................................... ................................... ...................................

200PF 100 $20.07 ................................... ................................... ...................................

200 100 $20.06 ................................... ................................... ...................................

200 PF 100 $20.05 LRP ................................... ................................... ...................................

0 0 $20.04 ................................... ................................... ...................................

0 0 $20.03 ................................... ................................... ...................................

0 0 $20.02 ................................... ................................... ...................................

0 0 $20.01 ................................... ................................... ...................................

0 0 $20.00 ................................... ................................... ...................................

CCS Partial Fill at the LRP # 2 

The Exchange Market is 200 shares 

bid at the price of $20.10 and 200 shares 

offered at a price of $20.15. The price 

point of $20.05 is a designated LRP. At 

the price points of $20.09 and $20.08 

there are 100 shares bid. The CCS 

interest file is willing to provide 200 

shares of additional bid liquidity at the 

price points of $20.09 down to $20.05. 

In addition, the CCS interest file 

indicates that the interest at the prices 

$20.08, $20.07 and $20.05 is available to 

provide a partial fill. A customer sends 

the Exchange a sell order for 700 12

shares with a limit price of $20.00. 

Enabling Exchange systems to access 

CCS interest to partially fill the order, 

the incoming limit order would execute 

against the 200 shares at the Exchange 

bid price of $20.10. The order would 

then execute 100 shares against the 

shares bid at $20.09 and $20.08. 

Exchange systems would execute an 

additional 200 shares of the order 

against the CCS interest at the LRP price 

of $20.05 for a total 600 shares of the 

incoming limit order executed. The 

remaining 100 shares of the order will 

be posted on the Display Book at its 

limit price of $20.00. 

CCS interest Shares bid Bid price Offer price Shares offered CCS interest 

................................... ................................... $20.15 200 200 

200 200 $20.10 ................................... ................................... ...................................

200 100 $20.09 ................................... ................................... ...................................

200 PF 100 $20.08 ................................... ................................... ...................................

200 PF 0 $20.07 ................................... ................................... ...................................

200 0 $20.06 ................................... ................................... ...................................

200 PF 0 $20.05 LRP ................................... ................................... ...................................

0 0 $20.04 ................................... ................................... ...................................

0 0 $20.03 ................................... ................................... ...................................

0 0 $20.02 ................................... ................................... ...................................

0 0 $20.01 ................................... ................................... ...................................

0 0 $20.00 ................................... ................................... ...................................

When accessing CCS interest to 

partially execute an order, Exchange 

systems will not review the liquidity 

available at one minimum price 

variation better than the execution price 

to determine if the number of shares 

that CCS interest is willing to provide at 

the better price is greater than the 

number of shares at the price point 

where the order would execute and then 

post. The order will be executed against 

the CCS interest where the remaining 

shares of the order will ultimately be 

quoted or in the event an LRP is 

reached, at the LRP price.13

Whether the order is executed at the 

price where the remaining shares will 

be quoted or at the LRP price, Exchange 

systems will not access CCS interest 

designated PF until all other interest on 

the Display Book up to the price point 

is executed in full. CCS interest 

therefore, remains the interest of last 

resort because Exchange systems will 

access CCS interest to provide a partial 

execution to an incoming limit order 

only after all it has satisfied protected 

interest on away market centers and all 

other interest on the Display Book 

eligible to be executed against the order 

is executed in full. In all instances 

where Exchange systems access CCS to 

provide a partial execution of an order, 

the customer order is afforded the 

ability for price improvement within the 

parameters of the rule. 

The Exchange therefore proposes to 

amend NYSE Amex Equities Rule 1000, 

to allow Exchange systems to access 

available CCS interest in order to 

provide an incoming order with a fuller 

execution. The Exchange proposes to 

amend NYSE Amex Equities Rule 

1000(e)(iii)(A)(4) to include this 

provision and renumber former 

subparagraph (e)(iii)(A)(4) to 

(e)(iii)(A)(5). 


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14See NYSE Amex Equities Rule 13. 

15 15 U.S.C. 78a. 

16 15 U.S.C. 78f(b)(5). 17See supra note 12. 18See supra text accompanying note 12. 

The Exchange believes that the instant 

proposal to maximize an order’s partial 

execution by allowing Exchange 

systems to access CCS interest removes 

the current impediment from a limit 

order accessing all the liquidity 

available on the Display Book. The 

proposed modification increases the 

opportunities for executing a greater 

number of shares of the incoming order 

and exposes it to additional opportunity 

for price improvement. The Exchange 

believes that the proposal therefore 

contributes to perfect the mechanism of 

a free and open market and ultimately 

protects investors and the public 

interest. 

Administrative Amendments to NYSE 

Amex Equities Rule 1000 

The Exchange further proposes to 

include references to its Do Not Ship 

Order 14 in NYSE Amex Equities Rule 

1000 subparagraphs (e)(ii), (e)(ii)(C) and 

(e)(iii)(A)(5) to illustrate the additional 

order type that requires the same 

execution handling as Reg. NMScompliant IOC. 

Finally, the Exchange proposes to 

delete the redundant text of NYSE 

Amex Equities Rule 1000 subparagraph 

(e)(ii)(D) because it restates the 

information contained in subparagraph 

(e)(ii) above it. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Act’’) 15 for 

these proposed rule changes is the 

requirement under Section 6(b)(5) 16

that an Exchange have rules that are 

designed 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 

change supports these principles in that 

it seeks to protect the investor and the 

public interest by allowing an incoming 

limit order to execute against all the 

liquidity available on the Exchange. 

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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve the proposed 

rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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. In 

addition, the Commission seeks 

comment on whether the proposed 

handling of incoming orders receiving 

partial fills that include CCS interest is 

consistent with the Act and, in 

particular, whether the proposed rule 

changes are designed to promote just 

and equitable principles of trade and, in 

general, to protect investors and the 

public interest. 

Specifically, in certain situations, the 

Exchange’s proposal would allow the 

DMM’s CCS interest to participate in 

partial fills at the best possible price 

(from the DMM’s perspective), even 

when this price is inferior to all the nonCCS interest participating in the same 

execution. Currently, NYSE Amex’s 

rules allow for CCS participation only 

when the incoming order will be 

completely filled, and the DMM’s CCS 

interest may not participate in an 

execution at a price inferior to the 

completion price. 

The Commission notes the fact 

pattern presented above under the 

heading ‘‘CCS Partial Fill at the LRP #2’’ 

where, under NYSE Amex’s current 

rules, an incoming order of 600 shares 

would be completed at $20.08 (200, 100, 

and 100 shares of non-CCS interest at 

$20.10, $20.09, and $20.08 respectively, 

and 200 shares of CCS interest also at 

$20.08).17 In contrast, under the 

proposal, an incoming order of 700 

shares that outsizes the available nonCCS interest would be partially 

completed by CCS interest at the LRP 

price, and thus would receive an 

execution of 200 shares against CCS 

interest at $20.05, rather than $20.08, 

before the system quotes the residual 

100 shares at $20.05, the LRP.18

Absent the proposed rule change, a 

700-share incoming order would result 

in a partial fill without any CCS 

participation, with 300 shares 

unexecuted and quoting at the LRP. 

Thus, the Commission notes that the 

proposal may benefit the incoming 

order by immediately and automatically 

executing additional shares at the 

order’s limit price or at the LRP price, 

as applicable. However, the Commission 

is interested in commenters’ views on 

the proposed expansion of DMMs’ CCS 

capabilities for partial fills and, in 

particular, on the proposed execution of 

CCS interest at the limit price of the 

order or the LRP price, as the case may 

be, even when no other interest resides 

at that price. To illustrate, in the ‘‘CCS 

Partial Fill at the LRP #2’’ example 

above, the proposal would result in a 

CCS interest execution at $20.05 (i.e., 

the LRP price). Is another price more 

appropriate? For example, should such 

CCS interest be executed at $20.08 (the 

last price at which there is non-CCS 

interest)? Another price? Why or why 

not? 

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–NYSEAmex-2009–46 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAmex-2009–46. 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 


sroberts on DSKD5P82C1PROD with NOTICES
40278 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4The 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 FINRA 

Information Notice, March 12, 2008 (Rulebook 

Consolidation Process). 

5See Securities Exchange Act Release No. 60216 

(July 1, 2009), 74 FR 33283 (July 10, 2009) (Notice 

of Filing and Immediate Effectiveness of SR–NYSE– 

2009–59). 

6 Incorporated NYSE Rule 12 defines the term 

‘‘business day.’’ 

7 Incorporated NYSE Rule 282 sets forth buy-in 

procedures. 

8See supra note 5. 

9See Securities Exchange Act Release No. 59446 

(February 25, 2009), 74 FR 9323 (March 3, 2009) 

(Notice of Filing and Immediate Effectiveness of 

SR–NYSE–2009–17). 

10Pursuant to Rule 17d–2 under the Exchange 

Act, NASD, NYSE, and NYSE Regulation, Inc., 

entered into an agreement (‘‘Agreement’’) to reduce 

regulatory duplication for firms that are Dual 

Members by allocating certain regulatory 

responsibilities for selected NYSE rules from NYSE 

Regulation to FINRA. The Agreement includes a list 

of all those rules (‘‘Common Rules’’) for which 

FINRA has assumed examination, enforcement and 

surveillance responsibilities under the Agreement 

relating to compliance by Dual Members to the 

extent that such responsibilities involve member 

firm regulation. See Securities Exchange Act 

Release No. 56148 (July 26, 2007), 72 FR 42146 

(August 1, 2007) (Notice of Filing and Order 

Approving and Declaring Effective a Plan for the 

Allocation of Regulatory Responsibilities). The 

Common Rules are the same NYSE rules that 

FINRA has incorporated into its rulebook. See 

Securities Exchange Act Release No. 56147 (July 26, 

2007), 72 FR 42166 (August 1, 2007) (Notice of 

Filing and Order Granting Accelerated Approval of 

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 am and 3 pm. 

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–NYSEAmex–2009–46 and 

should be submitted on or before 

September 1, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19140 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60432; File No. SR–FINRA– 

2009–053] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Incorporated 

NYSE Rules 12 and 282 To Conform to 

Amendments Made by NYSE 

August 4, 2009. 

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 July 30, 

2009, Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’) 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 ‘‘non-controversial’’ rule 

change under paragraph (f)(6) of Rule 

19b–4 under the Act,3 which renders 

the proposal 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 

FINRA is proposing to amend 

Incorporated NYSE Rules 12 (‘‘Business 

Day’’) and 282 (Buy-in Procedures) 4 to 

conform to rule changes by the New 

York Stock Exchange LLC (‘‘NYSE’’) to 

its versions of Rules 12 and 282.5

The text of the proposed rule change 

is available on FINRA’s Web site at 

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

office of FINRA 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 proposing changes to 

Incorporated NYSE Rules 12 6 and 282 7

to conform these rules to amendments 

made by NYSE to allow customers to 

transmit orders for execution on the 

NYSE with the settlement instructions 

of ‘‘cash’’, ‘‘next day’’ and ‘‘seller’s 

option’’ (collectively referred to herein 

as ‘‘non-regular way settlement’’) 

directly to a Floor broker for manual 

execution. 

According to the NYSE filing,8 after 

adopting amendments in March 2009 

requiring that all orders submitted to the 

NYSE be submitted for regular way 

settlement (i.e., settlement on the third 

business day following trade date),9 the 

NYSE recognized that there was a 

continuing need for the availability of 

orders with non-regular way settlement 

instructions. NYSE customers have 

expressed that certain trading strategies 

and/or expiration of certain trading 

instruments (e.g., rights and warrants) 

require the ability to submit orders to 

the NYSE that contain instructions for 

execution with non-regular way 

settlement. To accommodate the needs 

of its customers, the NYSE adopted 

NYSE Rule 14 (Non-Regular Way 

Settlement Instructions for Orders) to 

allow customers to directly transmit an 

order containing instructions for cash, 

next day and seller’s option settlement 

to a Floor broker for representation in 

the trading crowd. In addition, the 

NYSE added Rule 14 references to 

several NYSE rules that relate in some 

way to these settlement instructions. 

Under the NYSE filing, references to 

proposed NYSE Rule 14 (Non-Regular 

Way Settlement Instructions for Orders) 

and non-regular way settlement 

instructions were added to NYSE Rule 

12 (‘‘Business Day’’), and specific 

provisions related to orders submitted 

with cash settlement instructions were 

added to NYSE Rule 282 (Buy-in 

Procedures). 

FINRA is making conforming changes 

to Incorporated NYSE Rules 12 and 282 

to ensure consistency with NYSE’s 

versions of Rules 12 and 282.10


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