43176 Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices 

10 In approving this rule change, the Commission 

notes that it has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(2). 

13See Securities Exchange Act Release No. 55733 

(May 10, 2007), 72 FR 27602 (May 16, 2007) (SR– 

Amex–2007–34); Securities Exchange Act Release 

No. 56629 (October 9, 2007), 72 FR 58689 (October 

16, 2007) (SR–Amex–2007–87); and Securities 

Exchange Act Release No. 56924 (December 7, 

2007), 72 FR 70918 (December 13, 2007) (SR– 

NYSEArca–2007–98) (amending Rule 5.2(j)(2) 

(‘‘Equity-Linked Notes’’)). 

14 15 U.S.C. 78s(b)(2). 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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–NASDAQ–2009–075 and 

should be submitted on or before 

September 16, 2009. 

IV. Commission’s Findings and Order 

Granting Accelerated Approval of the 

Proposed Rule Change 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities exchange.10 The 

Commission believes that the proposal 

is consistent with Section 6(b)(5) 11 in 

particular, in that it is 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 

Commission believes that the proposed 

rule change should enhance 

competition among issuers, to the 

benefit of the market, by expanding the 

listing and trading of SEEDS. 

The Commission finds good cause, 

pursuant to Section 19(b)(2) of the 

Act,12 for approving the proposed rule 

change prior to the 30th day after the 

date of publication of the notice of filing 

thereof in the Federal Register. The 

proposal seeks to conform the 

Exchange’s rules for SEEDS to the rules 

of other exchanges that have previously 

been approved by the Commission.13

Therefore, the Commission does not 

believe that the Exchange’s proposal 

raises any novel regulatory issues. The 

Commission believes that accelerating 

approval of this proposal should benefit 

investors by creating, without undue 

delay, additional competition in the 

market for these products. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,14 that the 

proposed rule change (SR–NASDAQ– 

2009–075) be, and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20531 Filed 8–25–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60520; File No. SR– 

NYSEAmex–2009–45] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing of a 

Proposed Rule Change Amending Rule 

476A—Imposition of Fines for Minor 

Violations of Rules 

August 18, 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 29, 

2009, NYSE Amex LLC (‘‘NYSE Amex’’ 

or the ‘‘Exchange’’) 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 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 

Rule 476A—Imposition of Fines for 

Minor Violations of Rules. 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 NYSE Amex Minor Rule Plan 

(‘‘MRP’’) fosters compliance with 

applicable rules and also helps to 

reduce the number and extent of rule 

violations committed by Amex Options 

Trading Permit (‘‘ATP’’) Holders and 

associated persons. The prompt 

imposition of a financial penalty helps 

to quickly educate and improve the 

conduct of ATP Holders and associated 

persons that have engaged in 

inadvertent or otherwise minor 

violations of the Exchange’s rules. By 

promptly imposing a meaningful 

financial penalty for such violations, the 

MRP focuses on correcting conduct 

before it gives rise to more serious 

enforcement action. 

The Exchange is now proposing to 

incorporate additional violations into 

the MRP, these violations include (i) 

trading in restricted classes, (ii) failure 

to report position and account 

information and (iii) failure to complete 

mandatory annual training. The 

Exchange is also proposing to increase 

fine levels for certain violations 

presently included in the MRP. The 

increases fine levels will be applicable 

for violations of due diligence, priority 

rules and order exposure rules. A brief 

description of each proposed changes is 

shown below. 

Proposed Rules 476A Part 1C(i)(37) and 

476A Part 1C(iii)(i)(37) 

NYSE Amex Rules 916 and 916C 

provide, in part, that the Exchange may 

prohibit any opening purchase 

transactions in a series of options to the 

extent it deems such action necessary or 

appropriate. Accordingly, ATP Holders 

effecting opening transactions in 

restricted series, inconsistent with the 

terms of any such restriction, will be 

considered to be in violation of Rule 916 

or 916C. The Exchange is proposing to 

incorporate violations related to trading 

in restricted series into the MRP under 

Rules 476A Part 1C(i)(37). 

The Exchange is proposing to 

implement a fine of $1,000 for the first 

violation in a rolling twenty-four month 

period. A second violation within the 

same period would be allocated a 


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Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices 43177 

3See NYSE Amex Rule 900.2NY(5). The term 

‘‘ATP Holder’’ shall refer to a natural person, sole 

proprietorship, partnership, corporation, limited 

liability company or other organization, in good 

standing, that has been issued an ATP, and 

references to ‘‘member,’’ ‘‘member organization’’ 

and ‘‘86 Trinity Permit Holder’’ as those terms are 

used in the Rules of NYSE Amex LLC should be 

deemed to be references to ATP Holders. 

$2,500 fine and a third violation would 

be allocated a $5,000 fine. The schedule 

of fines will be included under Rules 

476A Part 1C(iii)(i)(37). Any subsequent 

violations within a rolling twenty-four 

month period would be subject to 

formal disciplinary proceedings by the 

Exchange. NYSE Amex believes that 

establishing a rolling twenty-four month 

period for cumulative violations will 

serve as an effective deterrent to future 

violative conduct. 

NYSE Amex believes that in most 

cases these violations may be handled 

efficiently through the MRP, however, 

as with other violations, any egregious 

activity or activity that is believed to be 

manipulative will continue to be subject 

to formal disciplinary proceedings. 

Proposed Rules 476A Part 1C(i)(38) and 

476A Part 1C(iii)(i)(38) 

Among other things, Rule 906(a) and 

Rule 906C(a) requires each ATP Holder 

to report to the Exchange the account 

and position information of any 

customer who, acting alone, or in 

concert with others, on the previous 

business day maintained aggregate long 

or short positions on the same side of 

the market of 200 or more contracts of 

any single class of option contracts dealt 

in on the Exchange. ATP Holders report 

this information on the Large Option 

Position Report (‘‘LOPR’’). 

NYSE Amex is proposing to 

incorporate violations for failing to 

accurately report position and account 

information in accordance with Rules 

906(a) and 906C(a) into the MRP. The 

Exchange believes most of these 

violations are inadvertent and technical 

in nature. Not having reporting 

violations necessarily subject to formal 

discpenary [sic] proceedings will allow 

the Exchange to more expeditiously 

process routine violations under the 

MRP Plan. 

In addition, NYSE Amex, as a member 

of the Intermarket Surveillance Group 

(‘‘ISG’’), as well as certain other selfregulatory organizations, have entered 

into agreement [sic] pursuant to Section 

17(d) of the Securities Exchange Act of 

1934 (as amended) (‘‘17d–2 

Agreement’’), which incorporates the 

surveillance and sanctions of LOPR 

reporting violations. As such, the SROs 

have agreed that their respective rules 

concerning the reporting of large option 

positions are common rules. As a result, 

adding LOPR reporting violations to the 

MRP will further result in the 

consistency of rules among SROs who 

are parties to the 17d–2 Agreement with 

respect to LOPR reporting surveillance. 

The Exchange is proposing to 

implement a fine of $1,000 for the first 

violation in a rolling twenty-four month 

period. A second violation within the 

same period would be allocated a 

$2,500 fine and a third violation would 

be allocated a $5,000 fine. The schedule 

of fines will be included under Rules 

476A Part 1C(iii)(i)(38). Any subsequent 

violations within a rolling twenty-four 

month period would be subject to 

formal disciplinary proceedings by the 

Exchange. NYSE Amex believes that 

establishing a rolling twenty-four month 

period for cumulative violations will 

serve as an effective deterrent to future 

violative conduct. 

NYSE Amex believes that in most 

cases reporting violations may be 

handled efficiently through the MRP, 

however, as with other violations, any 

egregious activity or activity that is 

believed to be manipulative will 

continue to be subject to formal 

disciplinary proceedings. 

Proposed Rules 476A Part 1C(i)(39) and 

476A Part 1C(iii)(i)(39) 

NYSE Amex Rule 50—Training and 

Examination Requirements, 

Commentary .03–.04 requires all ATP 

Holders (f/n/a 86 Trinity Permit 

Holders 3) and clerks active in the 

business of the Exchange trading floor to 

participate in one or more Exchange 

sponsored mandatory annual regulatory 

training programs, including 

participation in any Exchange testing 

programs in connection with such 

programs. The Rule goes on to say that 

any individual who fails to satisfactorily 

complete a mandatory regulatory 

training program will be subject to 

disciplinary action under the 

Exchange’s Minor Rule Violation Fine 

System. 

The Exchange now proposes to 

establish Rule 476A Part 1C(i)(39), in 

order to include violations of Rule 50, 

Commentary .03–.04 in the MRP. 

The Exchange is proposing to 

implement a fine of $1,000 for the first 

violation in a rolling twenty-four month 

period. A second violation within the 

same period would be allocated a 

$2,500 fine and a third violation would 

be allocated a $5,000 fine. The schedule 

of fines will be included under Rules 

476A Part 1C(iii)(i)(39). Any subsequent 

violations within a rolling twenty-four 

month period would be subject to 

formal disciplinary proceedings by the 

Exchange. NYSE Amex believes that 

establishing a rolling twenty-four month 

period for cumulative violations will 

serve as an effective deterrent to future 

violative conduct. 

Changes to Rule 476A Part 1C(iii)(i)1., 

Rule 476A Part 1C(iii)(i)23. and Rule 

476A Part 1C(iii)(i)29. 

NYSE Amex Rule 933NY(a) requires 

that a Floor Broker handling an order is 

to use due diligence to execute the order 

at the best price or prices available to 

him, in accordance with the Rules of the 

Exchange. Violators of Rule 933NY(a) 

are subject to a sanction pursuant to the 

MRP, specifically, Rule 476A Part 

1C(iii)(i)1. Suggested fines for violations 

of Rule 933NY(a) are presently $1,000 

for the first violation in a rolling twentyfour month period, $2,500 for a second 

violation within the same period fine 

and a third violation is subject to a 

$3,500 fine. 

NYSE Amex Rule 935NY is designed 

to ensure that orders are properly 

exposed on the NYSE Amex electronic 

trading system prior to interaction by 

the initiating firm. The rule states that 

users may not execute as principal 

orders they represent as agent unless (i) 

agency orders are first exposed on the 

Exchange for at least one (1) second or 

(ii) the User has been bidding or offering 

on the Exchange for at least one (1) 

second prior to receiving an agency 

order that is executable against such bid 

or offer. This rule prevents a user from 

executing agency orders to increase its 

economic gain from trading against the 

order without first giving other trading 

interest on the Exchange an opportunity 

to either trade with the agency order or 

to trade at the execution price when the 

User was already bidding or offering on 

the book. Violators of Rule 935NY are 

subject to a sanction pursuant to the 

MRP, specifically, Rule 476A Part 

1C(iii)(i)23. Suggested fines for 

violations of Rule 935NY are presently 

$500 for the first violation in a rolling 

twenty-four month period, $1,000 for a 

second violation within the same period 

fine and a third violation is subject to 

a $2,500 fine. 

NYSE Amex Rule 963NY governs the 

priority of bids and offers in open 

outcry trading. In general, Rule 963NY 

states that the highest bid/lowest offer 

shall have priority over all other orders. 

In the event there are two or more bids/ 

offers for the same option contract 

representing the best price and one such 

bid/offer is displayed in the 

Consolidated Book, such bid shall have 

priority over any other bid at the post. 

In addition, if two or more bids/offers 

represent the best price and a bid/offer 

displayed in the Consolidated Book is 

not involved, priority shall be afforded 


jlentini on DSKJ8SOYB1PROD with NOTICES
43178 Federal Register / Vol. 74, No. 164 / Wednesday, August 26, 2009 / Notices 

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

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

6 15 U.S.C. 78f(b)(6). 

7 15 U.S.C. 78f(b)(7). 

8 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. 60054 

(June 5, 2009), 74 FR 28078 (‘‘Notice’’). 

to such bids in the sequence in which 

they are made. Rule 963NY also 

contains certain provisions for related to 

split-price priority and priority of 

complex orders. Violators of any part of 

Rule 6.63NY are subject to a sanction 

pursuant to the MRP, specifically Rule 

476A Part 1C(iii)(i)29. Suggested fines 

for violations of Rule 963NY are 

presently $500 for the first violation in 

a rolling twenty-four month period, 

$1,000 for a second violation within the 

same period fine and a third violation 

is subject to a $2,000 fine. 

At this time the Exchange believes the 

current monetary fine levels contained 

in the MRP, for the three above 

mentioned violations, are inadequate, 

given the serious nature of these rules. 

In order to act as an effective deterrent 

against future violations, while also 

serving as a just penalty for those who 

commit these violations, the Exchange 

feels an increase in the fine levels for 

these three violations is warranted. 

NYSE Amex now proposes fine levels of 

$1,000 for the first violation in a rolling 

twenty-four month period, $2,500 for a 

second violation within the same period 

fine and $5,000 for a third violation 

within the same period fine. These fine 

levels will apply to all three types of 

violations mentioned above. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 4 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’), in general, and furthers the 

objectives of Section 6(b)(5) 5 in 

particular in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, to promote just and 

equitable principles of trade, to foster 

cooperation and coordination with 

persons engaged in facilitating 

transactions in securities, and to remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system. 

The proposal is also consistent with 

Section 6(b)(6) 6 and 6(b)(7),7 which 

requires that members and persons 

associated with members are 

appropriately disciplined for violations 

of Exchange rules and are provided a 

fair procedure for disciplinary 

procedures. 

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 such 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. 

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–2009–45 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–2009–45. 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–2009–45 and 

should be submitted on or before 

September 16, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–20533 Filed 8–25–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60527; File No. SR– 

NYSEArca–2009–45] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; 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 

August 18, 2009. 

I. Introduction 

On May 20, 2009, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ 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 12, 2009.3 On July 12, 2009, the 

Exchange filed Amendment No. 1 to the 


jlentini on DSKJ8SOYB1PROD with NOTICES