Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 40247 

8See Section 17(a)(1) of the Exchange Act (15 

U.S.C. 78q(a)(1)). 

9See February 2009 Adopting Release, 74 FR at 

6461. 

10 Id. at 6460. 

11 Id. at 6461. 

12 17 CFR 240.17g–2(d). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Commission notes that the Exchange 

inadvertently marked certain portions of the rule 

text incorrectly. Specifically, in paragraph (III)(B)(1) 

of Rule 103B the Exchange failed to indicate the 

deletion of a comma after ‘‘his or her designee’’and 

failed to mark ‘‘; (b)’’ as new text. In addition, the 

Exchange marked as new text one letter in a 

sentence being deleted from paragraph (III)(B)(1) of 

Rule 103B. 

compliance date of August 10, 2009 for 

this provision. 

The Commission today is providing 

notice that an NRSRO subject to the 

disclosure provisions of paragraph (d) of 

Rule 17g–2 can satisfy the requirement 

to make publicly available ratings 

history information in an XBRL format 

by using an XBRL format or any other 

machine-readable format, until such 

time as the Commission provides 

further notice. 

II. Discussion 

The Commission adopted Rule 17g–2 

and the amendments thereto, in part, 

under authority to require NRSROs to 

make and keep for specified periods 

such records as the Commission 

prescribes as necessary or appropriate in 

the public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Exchange Act.8 In 

adopting new paragraph (d) to Rule 

17g–2, the Commission noted that 

although NRSROs generally make their 

issuer-paid credit ratings publicly 

available for free, it can be difficult to 

compile the actions and compare them 

across NRSROs.9 The Commission 

therefore adopted the new disclosure 

requirements of paragraph (d) with the 

expectation that making this 

information more accessible will 

advance the Commission’s goal of 

fostering accountability and 

comparability among NRSROs with 

respect to their issuer-paid credit 

ratings.10 Requiring NRSROs to publicly 

disclose rating action histories for a 

limited percentage of their outstanding 

issuer-paid credit ratings will allow 

market participants, academics and 

others to use the information to perform 

analysis comparing how the NRSROs 

subject to the disclosure rule perform in 

the classes of credit ratings for which 

they are registered.11

As noted above, Rule 17g–2(d) 

provides that the ratings histories 

required under the rule must be made 

public on the NRSRO’s corporate 

Internet Web site using an XBRL 

format.12 Further, the rule requires an 

NRSRO to use the List of XBRL Tags for 

NRSROs published on the 

Commission’s Web page. The List of 

XBRL Tags currently is not available. 

Therefore, the Commission is providing 

notice to NRSROs that they can satisfy 

the requirement in Rule 17g–2(d) to 

make publicly available ratings history 

information in an XBRL format by using 

an XBRL format or any other machine 

readable format, until such time as the 

Commission provides further notice. 

The Commission has every intention of 

providing notice as soon as practicable, 

once the List of XBRL Tags for NRSROs 

is available, that an XBRL format is the 

sole means by which an NRSRO may 

satisfy this requirement. Examples of 

other types of machine-readable formats 

include pipe delimited text data 

(‘‘PDTD’’) and eXtensible Markup 

Language (‘‘XML’’). Data that is 

provided in a machine-readable format 

must be easily downloadable into 

commercially available spreadsheets or 

database programs. 

The Commission also notes that the 

requirement in Exhibit 1 to Form 

NRSRO which states that ‘‘If the 

Applicant/NRSRO is required to make 

and keep publicly available on its 

corporate Internet Web site in an XBRL 

(eXtensible Business Reporting 

Language) format a sample of ratings 

action information pursuant to the 

requirements of 17 CFR 240.17g–2(d), 

provide in this Exhibit the Web site 

address where this information is, or 

will be, made publicly available’’ can be 

satisfied by providing the Web site 

address where the information is made 

publicly available in an XBRL format or 

any other machine readable format, 

until such time as the Commission 

provides further notice. 

By the Commission. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–19125 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60426; File No. SR–NYSE– 

2009–74] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending NYSE 

Rule 103B to Modify the Composition 

of the Exchange Selection Panel; and 

Prohibit Any Ex Parte Communications 

During and Regarding the Selection 

Process Between the DMM Units and 

the Individuals Serving on the 

Exchange Selection Panel 

August 4, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that on July 27, 

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 Commission is 

publishing this notice to solicit 

comments on the proposed rule 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 103B (‘‘Security Allocation 

and Reallocation’’) to: (1) Modify the 

composition of the Exchange Selection 

Panel; and 2) prohibit any ex parte 

communications during and regarding 

the selection process between the DMM 

units and the individuals serving on the 

Exchange Selection Panel. The text of 

the proposed rule change is available at 

the Exchange, the Commission’s Public 

Reference Room, and http:// 

www.nyse.com.4

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 New York Stock Exchange LLC 

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

amend NYSE Rule 103B (‘‘Security 

Allocation and Reallocation’’) to: (1) 

Modify the composition of the Exchange 

Selection Panel; and (2) prohibit any ex 

parte communications during and 

regarding the selection process between 


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40248 Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 

5See SR–NYSEAmex–2009–49. 6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A). 

8 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

provide the Commission with written notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has fulfilled this requirement. 

9 Id. 

10 17 CFR 240.19b–4(f)(6)(iii). 

11 Id. 

12For 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). 

the DMM units and the individuals 

serving on the Exchange Selection 

Panel. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of NYSE Amex LLC (formerly the 

American Stock Exchange).5

Background 

Currently, pursuant to NYSE Rule 

103B, an issuer may select the DMM 

unit that will be assigned its security or 

delegate the selection of the DMM unit 

to the Exchange. If the issuer authorizes 

the Exchange to select the DMM unit to 

trade its security, an Exchange Selection 

Panel (the ‘‘ESP’’ or the ‘‘Panel’’) is 

convened to select the DMM unit based 

on a review of all information that 

would be available to the issuer. The 

Panel is comprised of three members of 

the Exchange’s Senior Management, as 

designated by the Chief Executive 

Officer (‘‘CEO’’) of the Exchange or his 

or her designee, one non-DMM 

Executive Floor Governor (‘‘EFG’’) and 

two non-DMM Floor Governors (‘‘FGs’’). 

The non-DMM EFG and non-DMM FGs 

are designated on a rotating basis. The 

Panel’s decision is made by majority 

vote. In the event of a tie, the CEO of 

the Exchange or his/her designee makes 

the final decision. The Exchange then 

informs the issuer of the DMM unit 

selected by the Panel. 

Proposed Amendments 

The Exchange proposes to amend 

NYSE Rule 103B to modify the 

composition of the Panel in order to 

ensure consistent Floor participation in 

the selection process and minimize 

delays due to scheduling conflicts. 

The current composition of the Panel 

has proven difficult when scheduling 

the required participants within five 

days of the issuer’s request. The 

Exchange therefore seeks to amend 

NYSE Rule 103B to modify the 

representation on the Panel to include: 

(1) At least one member of the 

Exchange’s Senior Management; (2) any 

combination of two Exchange Senior 

Management or Exchange Floor 

Operations Staff, to be designated by the 

Executive Vice-President of Exchange 

Floor Operations or his/her designee; 

and (3) any combination of three nonDMM EFGs or non-DMM FGs for a total 

of six members. 

Finally, to reinforce the integrity and 

objectivity of the ESP selection process, 

the Exchange proposes to amend NYSE 

Rule 103B to explicitly prohibit any 

communications regarding the selection 

process between the Panelists and the 

DMM units. The Exchange proposes to 

have communication regarding the 

selection process cease from the time 

the issuer delegates the selection 

responsibility to the Exchange until the 

Panel selects the DMM unit to trade the 

issuer’s security. 

2. Statutory Basis 

The basis under the Act for the 

proposed rule change is the requirement 

under Section 6(b)(5),6 which requires 

that an exchange have rules that are 

designed to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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 amendments are 

consistent with these objectives. The 

amendments sought herein seek to 

streamline and facilitate the process of 

assigning securities to DMM units by 

allowing for more flexibility in 

composing the Panel which ultimately 

facilitates and expedites the allocation 

and ultimately the trading of securities 

on the Exchange. Furthermore, the 

proposed amendment to prohibit 

communications between the Panel and 

the DMM units preserves the integrity 

and impartiality of the allocation 

process and therefore protects the 

public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change: (1) Does not significantly affect 

the protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) by its terms does not become 

operative for 30 days after the date of 

this filing, 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) 7 of the Act and Rule 

19b–4(f)(6) thereunder.8

A proposed rule change filed under 

Rule 19b–4(f)(6) 9 normally may not 

become operative prior to 30 days after 

the date of filing. However, Rule 19b– 

4(f)(6)(iii) 10 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requests that the Commission 

waive the 30-day operative delay, as 

specified in Rule 19b–4(f)(6)(iii),11

which would make the rule change 

operative upon filing. The Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest because such waiver will allow 

the Exchange to immediately streamline 

the process of allocating securities to 

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.12 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: 


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Federal Register / Vol. 74, No. 153 / Tuesday, August 11, 2009 / Notices 40249 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3References to ISE Members in this filing refer to 

DECN Subscribers who are ISE Members. 

4See Securities and Exchange Act Release No. 

60232 (July 2, 2009), 74 FR 33309 (July 10, 2009) 

(SR–ISE–2009–43). 5 DECN currently operates a program known as 

the ‘‘Enhanced Liquidity Provider’’ (‘‘ELP’’) 

program on its two trading platforms, EDGX and 

EDGA, pursuant to which parties entering orders 

into DECN can elect to display their marketable 

orders to designated liquidity providers before the 

order is routed or cancelled. 

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–2009–74 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–2009–74. 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–NYSE– 

2009–74 and should be submitted on or 

before September 1, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–19119 Filed 8–10–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60442; File No. SR–ISE– 

2009–57] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating To Amending the 

Direct Edge ECN Fee Schedule 

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 31, 

2009, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which items 

have been prepared by the selfregulatory 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 

Direct Edge ECN’s (‘‘DECN’’) fee 

schedule for ISE Members 3 to (i) create 

a new tier, called the Full Sweep Tier, 

to provide a rebate for ISE Members that 

use ROUT orders that meet a volume 

theshold for amount of liquidity added 

on EDGX and to (ii) adopt new fees and 

rebates. 

All of the changes described herein 

are applicable to ISE Members. The text 

of the proposed rule change is available 

on the Exchange’s Internet Web site at 

http://www.ise.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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 

DECN, a facility of ISE, operates two 

trading platforms, EDGX and EDGA. On 

July 1, 2009,4 the Exchange adopted a 

new Ultra Tier Rebate, as defined below, 

whereby ISE Members are provided a 

$0.0032 rebate per share for securities 

priced at or above $1.00 when ISE 

Members add liquidity on EDGX if the 

attributed MPID satisfies one of the 

following criteria on a daily basis, 

measured monthly: (i) Adding 

100,000,000 shares or more on EDGX; or 

(ii) adding 50,000,000 shares or more of 

liquidity to EDGX, so long as added 

liquidity on EDGX is at least 20,000,000 

shares greater than the previous 

calendar month. The rebate described 

above is referred to as an ‘‘Ultra Tier 

Rebate’’ on the DECN fee schedule. 

The Exchange is now proposing to 

establish an additional tier called the 

Full Sweep Tier, whereby ISE Members 

are provided a $0.0035 rebate per share 

for securities priced at or above $1.00 

when ISE Members add liquidity on 

EDGX if the attributed MPID use of the 

ROUT order type adds 50,000,000 

shares or more of liquidity to EDGX on 

a daily basis, measured monthly. A 

ROUT order type that is sent to EDGX 

is an order type that does a full sweep 

of the EDGX book, before being exposed 

to Enhanced Liquidity Providers 

(‘‘ELPs’’).5 This order type will then 

route to away market centers if there is 

additional unexecuted liquidity. This 

order type is primarily used for agency 

orders, especially retail order flow. The 

rebate is designed to encourage the use 

of this particular type of liquidity. 

The Exchange also proposes to adopt 

additional fees and rebates. First, the 

Exchange proposes to adopt a fee of 

$0.0024 per share for securities priced at 

or above $1.00 which add liquidity to 

LavaFlow ECN (‘‘LavaFlow’’) and are 

routed from either EDGX or EDGA. Such 

a strategy is deemed a ROLF routing 

strategy, which is a destination specific 

routing strategy that will first sweep the 

EDGA or EDGX order book before being 

delivered to LavaFlow. A conforming 

amendment will be made to the fee 

schedule to yield an ‘‘M’’ flag to account 


sroberts on DSKD5P82C1PROD with NOTICES