Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 40259 

7See Securities Exchange Act Release No. 59865 

(May 5, 2009), 74 FR 22198 (May 12, 2009) (SR– 

BX–2009–022). 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(4). 

10 15 U.S.C. 78s(b)(3)(A)(ii). 

11 17 CFR 240.19b–4(f)(2). 

12 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. 

that they apply equally to all BOX 

Participants and customers. This 

proposal is in response to various 

‘Payment for Order Flow’ programs 

currently in operation on other options 

exchanges. The Exchange will monitor 

the trading of options on these NonPenny Pilot Classes to ensure that the 

proposal is operating in a fashion that 

promotes the interests of investors. 

The Exchange also proposes to make 

a non-substantive change to Section 3 of 

the Fee Schedule to reflect that the 

differentiation between Market Maker 

volume in assigned and unassigned 

classes is no longer pertinent for billing 

purposes.7

2. Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act,8

in general, and Section 6(b)(4) of the 

Act,9 in particular, in that it provides for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

members and issuers and other persons 

using its facilities. In particular, the 

proposed change will allow the fees 

charged on BOX to remain competitive 

with other exchanges. 

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 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 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Exchange Act 10

and Rule 19b–4(f)(2) thereunder,11

because it establishes or changes a due, 

fee, or other charge applicable only to a 

member. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

the rule change if it appears to the 

Commission that the action is necessary 

or appropriate in the public interest, for 

the protection of investors, or would 

otherwise further 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–BX–2009–044 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–BX–2009–044. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for inspection and copying in 

the Commission’s Public Reference 

Room, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of such filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–BX–2009–044 and should 

be submitted on or before September 1, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19146 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60429; File No. SR–NYSE– 

2009–71] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

New York Stock Exchange LLC 

Amending NYSE 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, 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 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 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 

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, 


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40260 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 

4See SR–NYSE Amex–2009–46. 

5The provisions of NYSE 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. 

6The Display Book® 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. 

7See NYSE 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 stated in the table above. 

8Pursuant to NYSE 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 Rule 72. 

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 

New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) proposes 

to amend NYSE Rule 1000 to make 

available additional liquidity to 

partially fill an incoming limit order. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of NYSE Amex LLC (formerly the 

American Stock Exchange).4

a. Background 

The NYSE implemented sweeping 

changes to its market rules and 

execution technology designed to 

improve execution quality on the 

Exchange. Among the elements of the 

enhanced Exchange market model, the 

NYSE eliminated the function of 

specialists on the Exchange creating a 

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. The 

NYSE also recognized that in view of 

the NYSE’s electronic execution 

functionality, the DMM, unlike the 

specialist, would no longer be deemed 

the agent for every incoming order. The 

NYSE 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’’).5 CCS 

provides the Display Book® 6 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 7) 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 Rule 72 (‘‘Priority of Bids and 

Offers and Allocation of Executions’’).8

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. 

b. Proposed Amendment to NYSE 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 


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Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 40261 

9LRPs 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. 

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. 

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 the 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 

200PF 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’’) 9 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 


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40262 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 

10A DMM cannot provide CCS interest past the 

LRPs because that interest will not be executed. 

Pursuant to current NYSE Rules, once an LRP is 

reached interest may not trade through the price 

point. 

11 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. 

12 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. 

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 

$20.05.10 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 

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 

200 PF 100 20.08 

200 PF 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 11

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 

rice 

Shares 

offered CCS interest 

................................... ................................... 20.15 200 200 

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

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

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

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

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

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

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.12

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 


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13See NYSE Rule 13. 

14 15 U.S.C. 78a. 

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

16See supra note 11. 

17See supra text accompanying note 11. 

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 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 

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

provision and renumber former 

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

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

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 

Rule 1000 

The Exchange further proposes to 

delete legacy references to ‘‘ITS Plan’’ 

contained in NYSE Rule 1000 

subparagraphs (e)(ii) and (e)(iii) and 

replace the concept of ITS commitments 

with appropriate language consistent 

with the current practice of routing 

orders to away market centers. 

The Exchange also proposes to 

include references to its Do Not Ship 

Order 13 in NYSE Rule 1000 

subparagraphs (e)(ii)(C) and (e)(iii)(A)(5) 

to illustrate the additional order type 

that requires the same execution 

handling as Reg. NMS-compliant IOC. 

NYSE Rule 1000 subparagraph (e)(ii)(D) 

is proposed for deletion because it 

restates the information contained in 

subparagraph (e)(ii) above it. 

Finally, the Exchange proposes to 

delete the rule language of NYSE Rule 

1000 Supplementary Material .10 that is 

no longer applicable, as it relates to a 

former pilot operated by the Exchange 

between May 12, 2006 and October 31, 

2006. The Exchange proposes to reserve 

this rule section. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Act’’) 14 for 

these proposed rule changes is the 

requirement under Section 6(b)(5) 15

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’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’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).16 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.17

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 


sroberts on DSKD5P82C1PROD with NOTICES
40264 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 

18 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. 78f(b). 

4 15 U.S.C. 78f(b)(5). 

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–NYSE–2009–71 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–NYSE–2009–71. 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. 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–2009–71 and should 

be submitted on or before September 1, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19145 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60433; File No. SR– 

NYSEArca–2009–69] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Equities Rule 7.31(oo) 

August 5, 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 17, 

2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify 

NYSE Arca Equities Rule 7.31(oo) 

governing the Primary Until 9:45 Order. 

The text of the proposed rule change is 

attached as Exhibit 5 to the 19b–4 form. 

A copy of this filing is available on the 

Exchange’s Web site at http:// 

www.nyse.com, at the Exchange’s 

principal office 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, 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 modify 

NYSE Arca Equities Rule 7.31(oo) 

pertaining to the Primary Until 9:45 

Order. 

The Primary Until 9:45 Order permits 

NYSE Arca Users to submit an order 

that will be routed directly to the 

primary listing market until 9:45 am 

(Eastern Time). If the order is not 

executed on the primary market by 9:45 

am (Eastern Time), the order will be 

cancelled from the primary market and 

a new order will be entered on the Arca 

Book for execution during the 

remainder of the Exchange’s Core 

Trading Session. 

Currently, a Primary Until 9:45 Order 

may be marked with a Time in Force of 

Day, Good Till Cancelled (‘‘GTC’’), or 

Good Till Date (‘‘GTD’’). However, 

potential confusion arises in that the 

Primary Until 9:45 Order is not 

designed to re-route to the primary if 

not executed on its initial day of entry. 

The Exchange proposes to eliminate the 

option to mark a Primary Until 9:45 

Order as GTC or GTD. This change 

eliminates that potential confusion by 

allowing the Primary Until 9:45 Order to 

be marked as Day only. 

The Exchange plans to implement this 

change on July 20, 2009 in conjunction 

with the implementation of the Primary 

Until 9:45 Order. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 3 of the 

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’), in general, and 

furthers the objectives of Section 

6(b)(5) 4 in particular in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. The 

Exchange believes that the proposed 

rule changes are designed to accomplish 

these ends by eliminating order types 

from its rulebook which it can not 

currently support. 


sroberts on DSKD5P82C1PROD with NOTICES