Federal Register / Vol. 74, No. 166 / Friday, August 28, 2009 / Notices 44423 

6 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 Securities Exchange Act Release No. 57323 

(February 13, 2008), 73 FR 9371 (February 20, 2008) 

(SR–NYSE–2008–09). 

5See Securities Exchange Act Release No. 57826 

(May 15, 2008), 73 FR 29802 (May 22, 2008) (SR– 

NASDAQ–2007–001). 

6See Securities Exchange Act Release No. 58328 

(August 8, 2008), 73 FR 47247 (August 13, 2008) 

(SR–NYSE–2008–63). 

7See Securities Exchange Act Release No. 58732 

(October 3, 2008), 73 FR 61183 (October 15, 2008) 

(SR–NYSE–2008–99). 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEAmex–2009–56 on 

the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEAmex–2009–56. 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 publicly available. All 

submissions should refer to File 

Number SR–NYSEAmex–2009–56 and 

should be submitted on or before 

September 18, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20820 Filed 8–27–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60563; File No. SR–NYSE– 

2009–87] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Extending Until 

August 31, 2009, the Operation of 

Interim NYSE Rule 128 Which Permits 

the Exchange To Cancel or Adjust 

Clearly Erroneous Executions If They 

Arise Out of the Use or Operation of 

Any Quotation, Execution or 

Communication System Owned or 

Operated by the Exchange, Including 

Those Executions That Occur in the 

Event of a System Disruption or 

System Malfunction 

August 24, 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 August 

21, 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 change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to extend 

until August 31, 2009, the operation of 

interim NYSE Rule 128 (‘‘Clearly 

Erroneous Executions for NYSE 

Equities’’) which permits the Exchange 

to cancel or adjust clearly erroneous 

executions if they arise out of the use or 

operation of any quotation, execution or 

communication system owned or 

operated by the Exchange, including 

those executions that occur in the event 

of a system disruption or system 

malfunction. The text of the proposed 

rule change is available at the Exchange, 

the Commission’s Public Reference 

Room, and http://www.nyse.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

set forth in sections A, B, and C below, 

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to extend 

until August 31, 2009, the operation of 

interim NYSE Rule 128 (‘‘Clearly 

Erroneous Executions for NYSE 

Equities’’) which permits the Exchange 

to cancel or adjust clearly erroneous 

executions if they arise out of the use or 

operation of any quotation, execution or 

communication system owned or 

operated by the Exchange, including 

those executions that occur in the event 

of a system disruption or system 

malfunction. 

Prior to the implementation of NYSE 

Rule 128 on January 28, 2008,4 the 

NYSE did not have a rule providing the 

Exchange with the authority to cancel or 

adjust clearly erroneous trades of 

securities executed on or through the 

systems and facilities of the NYSE. 

In order for the NYSE to be consistent 

with other national securities exchanges 

which have some version of a clearly 

erroneous execution rule, the Exchange 

is drafting an amended clearly 

erroneous rule which will accommodate 

such other exchanges but will be 

appropriate for the NYSE market model. 

The NYSE notes that the Commission 

approved an amended clearly erroneous 

execution rule for Nasdaq in May 2008.5

On July 28, 2008, the Exchange filed 

with the SEC a request to extend the 

operation of interim Rule 128 until 

October 1, 2008 6 in order to review the 

provisions of Nasdaq’s clearly erroneous 

rule and to consider integrating similar 

standards into its own amendment to 

Rule 128. On October 1, 2008,7 the 

Exchange filed with the SEC a further 

request to extend the operation of 

interim Rule 128 until January 9, 2009 


hsrobinson on DSK69SOYB1PROD with NOTICES
44424 Federal Register / Vol. 74, No. 166 / Friday, August 28, 2009 / Notices 

8See Securities Exchange Act Release No. 59255 

(January 15, 2009), 74 FR 4496 (January 26, 2009) 

(SR–NYSE–2009–02). 

9See Securities Exchange Act Release No. 59581 

(March 9, 2009), 74 FR 12431 (March 24, 2009) (SR– 

NYSE–2009–26). 

10See Securities Exchange Act Release No. 59838 

(April 28, 2009), 74 FR 20767 (May 5, 2009) (SR– 

NYSEArca–2009–36) (See NYSE Arca Rule 7.10). 

11See Securities Exchange Act Release No. 60131 

(June 17, 2009), 74 FR 30196 (June 24, 2009) (SR– 

NYSE–2009–57). 

12See Securities Exchange Act Release No. 60312 

(July 15, 2009), 74 FR 36298 (July 22, 2009) (SR– 

NYSE–2009–70). 

13See Securities Exchange Act Release No. 60419 

(August 7, 2009), 74 FR 39987 (August 10, 2009) 

(SR–NYSE–2009–79). 

14See Securities Exchange Act Release No. 60478 

(August 11, 2009), 74 FR 41769 (August 18, 2009) 

(SR–NYSE–2009–81). 

15 15 U.S.C. 78f(a). [sic] 

16 15 U.S.C. 78f(b)(5). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

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

the Commission written notice of its intent to file 

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 Commission has determined to 

waive the five-day pre-filing period in this case. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6). 

21For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

in order to consider integrating similar 

standards into the amendment to Rule 

128. On January 9, 2009,8 the Exchange 

filed with the SEC a request to extend 

the operation of interim Rule 128 until 

March 9, 2009, indicating that the 

Exchange was still in the process of 

reviewing the Nasdaq rule with a view 

towards incorporating certain 

provisions into the amendment of 

interim Rule 128. 

On February 10, 2009, NYSE Arca 

submitted a proposal to the SEC to 

amend its clearly erroneous rule. The 

NYSE Arca proposed rule differed in 

certain respects from the Nasdaq clearly 

erroneous rule. On March 9, 2009, the 

Exchange filed with the SEC a request 

to extend the operation of interim Rule 

128 until June 9, 2009 9 to finalize 

review of NYSE Arca’s proposed 

amended CEE rule, which included 

marketwide CEE initiatives, to 

determine if it was appropriate to 

incorporate such provisions into the 

Rule 128 amendment. 

Thereafter, on April 24, 2009, NYSE 

Arca filed a revised rule change with the 

Commission to amend its clearly 

erroneous rule (NYSE Arca Rule 7.10).10

The Exchange was in the process of 

finalizing its review of NYSE Arca’s 

revised CEE rule change, which also 

included marketwide CEE initiatives, to 

determine if it was appropriate to 

incorporate all such provisions into 

NYSE’s interim Rule 128 amendment. 

On June 9, 2009, the Exchange filed 

with the SEC a request to extend the 

operation of interim Rule 128 until July 

15, 2009 11 to finalize review of NYSE 

Arca’s proposed amended CEE rule. On 

July 15, 2009 12 the Exchange filed with 

the SEC a request to extend the 

operation of interim Rule 128 until 

August 1, 2009 to finalize review of 

NYSE Arca’s proposed amended CEE 

rule. On July 31, 2009 the Exchange 

filed with the SEC a request to extend 

the operation of interim Rule 128 until 

August 10, 2009 13 to finalize review of 

NYSE Arca’s proposed amended CEE 

rule. On August 11, 2009 the Exchange 

filed with the SEC a request to extend 

the operation of interim Rule 128 until 

August 21, 2009 14 to finalize review of 

NYSE Arca’s proposed amended CEE 

rule. 

The Exchange anticipates finalizing 

proposed rule text of its clearly 

erroneous execution rule shortly, and is, 

therefore, requesting to extend the 

operation of interim Rule 128 until 

August 31, 2009. Prior to August 31, 

2009, the Exchange intends to formally 

file a 19b–4 rule change amending 

interim Rule 128. 

2. Statutory Basis 

The basis under the Securities 

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

this proposed rule change 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. 

As articulated more fully in the 

‘‘Purpose’’ Section above, the proposed 

rule would place the NYSE on equal 

footing with other national securities 

exchanges. This will promote the 

integrity of the market and protect the 

public interest, since it would permit all 

exchanges to cancel or adjust clearly 

erroneous trades when such trades 

occur, rather than canceling them on all 

other markets, but leaving them 

standing on only one market. 

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 does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 17 and Rule 19b– 

4(f)(6) thereunder.18

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act 19 normally does not become 

operative for 30 days after the date of its 

filing. However, Rule 19b–4(f)(6) 20

permits the Commission to designate a 

shorter time if such action is consistent 

with the protection of investors and the 

public interest. NYSE requests that the 

Commission waive the 30-day operative 

delay because the Exchange believes 

that the absence of such a rule in an 

automated and fast-paced trading 

environment poses a danger to the 

integrity of the markets and the public 

interest. NYSE notes that immediate 

effectiveness of the proposed rule 

change will immediately and timely 

enable NYSE to cancel or adjust clearly 

erroneous trades that may present a risk 

to the integrity of the equities markets 

and all related markets. The 

Commission believes that waiving the 

30-day operative delay 21 is consistent 

with the protection of investors and the 

public interest because such waiver will 

permit the Exchange to continue 

operation of interim NYSE Rule 128 on 

an uninterrupted basis, and therefore 

designates the proposal operative upon 

filing. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 


hsrobinson on DSK69SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 166 / Friday, August 28, 2009 / Notices 44425 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 60014 

(June 1, 2009), 74 FR 27224 (‘‘Notice’’). 

4Amendment No. 1 clarified that this proposed 

rule change will become effective upon the 

Exchange’s withdrawal from the Plan for the 

Purpose of Creating and Operating an Intermarket 

Option Linkage and the effectiveness of the Options 

Order Protection and Locked/Crossed Market Plan. 

Because the amendment only provided clarification 

and did not affect the substance of the rule filing, 

the amendment did not require notice and 

comment. 

5The Plan is a national market system plan 

proposed by the seven existing options exchanges 

and approved by the Commission. See Securities 

Exchange Act Release No. 59647 (March 30, 2009), 

74 FR 15010 (April 2, 2009) (File No. 4–546) (‘‘Plan 

Notice’’) and 60405 (July 30, 2009), 74 FR 39362 

(August 6, 2009) (File No. 4–546) (‘‘Plan 

Approval’’). The seven options exchanges are: 

Chicago Board Options Exchange, Incorporated 

(‘‘CBOE’’); The NASDAQ Stock Market LLC 

(‘‘Nasdaq’’); NASDAQ OMX BX, Inc. (‘‘BOX’’); 

NASDAQ OMX PHLX, Inc. (‘‘Phlx’’); NYSE Amex 

LLC (‘‘NYSE Amex’’); NYSE Arca, Inc. (‘‘NYSE 

Arca’’); and ISE (each exchange individually a 

‘‘Participant’’ and, together, the ‘‘Participating 

Options Exchanges’’). 

6On July 28, 2000, the Commission approved the 

Old Plan as a national market system plan for the 

purpose of creating and operating an intermarket 

options market linkage proposed by the American 

Stock Exchange LLC (n/k/a NYSE Amex), CBOE, 

and ISE. See Securities Exchange Act Release No. 

43086 (July 28, 2000), 65 FR 48023 (August 4, 

2000). Subsequently, Philadelphia Stock Exchange, 

Inc. (n/k/a Phlx), Pacific Exchange, Inc. (n/k/a 

NYSE Arca), Boston Stock Exchange, Inc. (n/k/a 

BOX), and Nasdaq joined the Linkage Plan. See 

Securities Exchange Act Release Nos. 43573 

(November 16, 2000), 65 FR 70851 (November 28, 

2000); 43574 (November 16, 2000), 65 FR 70850 

(November 28, 2000); 49198 (February 5, 2004), 69 

FR 7029 (February 12, 2004); and 57545 (March 21, 

2008), 73 FR 16394 (March 27, 2008). 

7Section 8(c) of the Old Plan. 

8The Linkage Hub is a centralized data 

communications network that electronically links 

the Participating Options Exchanges to one another. 

The Options Clearing Corporation (‘‘OCC’’) operates 

the Linkage Hub. 

9Section 2(16) of the Old Plan. 

10Section 7(a)(i)(C) of the Old Plan. 

11See Securities Exchange Act Release No. 60360 

(July 21, 2009) 74 FR 37265 (July 28, 2009) (File No. 

4–429). 

12 17 CFR 242.608. 

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–2009–87 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–2009–87. 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 publicly available. All 

submissions should refer to File 

Number SR–NYSE–2009–87 and should 

be submitted on or before September 18, 

2009. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20821 Filed 8–27–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60559; File No. SR–ISE– 

2009–27] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Order Granting Approval of a 

Proposed Rule Change as Modified by 

Amendment No. 1 Thereto To Adopt 

Rules Implementing the Options Order 

Protection and Locked/Crossed Market 

Plan 

I. Introduction 

On May 11, 2009, the International 

Securities Exchange, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

amend and adopt rules to implement 

the Options Order Protection and 

Locked/Crossed Market Plan. The 

proposed rule change was published for 

comment in the Federal Register on 

June 8, 2009.3 On June 10, 2009, the 

Exchange filed Amendment No. 1 to the 

proposed rule change.4 The Commission 

received no comments on the proposal. 

This order approves the proposed rule 

change, as modified by Amendment No. 

1. 

II. Description of the Proposal 

The Exchange proposes to amend and 

adopt new ISE rules to implement the 

Options Order Protection and Locked/ 

Crossed Market Plan (‘‘Plan’’).5

Specifically, the Exchange proposes to 

completely replace Chapter 19 of its 

rules with new rules implementing the 

Plan, amend other Exchange rules to 

reflect the Plan, and delete rules 

rendered unnecessary by the Plan. 

The Old Plan 

Each of the Participating Options 

Exchanges are signatories to the Plan for 

the Purpose of Creating and Operating 

an Intermarket Option Linkage (‘‘Old 

Plan’’).6 In pertinent part, the Old Plan 

generally requires its participants to 

avoid trading at a price inferior to the 

national best bid or offer (‘‘tradethrough’’), although it provides for a 

number of exceptions to trade-through 

liability.7 The Participating Options 

Exchanges comply with this 

requirement of the Old Plan by utilizing 

a stand alone system (‘‘Linkage Hub’’) to 

send and receive specific order types,8

namely Principal Acting as Agent 

Orders (‘‘P/A Orders’’), Principal 

Orders, and Satisfaction Orders.9 The 

Old Plan also provided that 

dissemination of ‘‘locked’’ or ‘‘crossed’’ 

markets should be avoided, and 

remedial actions that should be taken to 

unlock or uncross such market.10 Each 

of the Participating Options Exchanges, 

including the Exchange, has submitted 

an amendment to the Old Plan to 

withdraw from such Plan.11 The 

withdrawals will be effective upon 

approval by the Commission of such 

amendments pursuant to Rule 608 of 

Regulation NMS under the Act 

(‘‘Regulation NMS’’).12

The Plan 

The Plan does not require a central 

linkage mechanism akin to the Old 

Plan’s Linkage Hub. Instead, the Plan 

includes the framework for routing 


hsrobinson on DSK69SOYB1PROD with NOTICES