Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 46275 

19 15 U.S.C. 78s(b)(2). 

20See Securities Exchange Act Release No. 53128 

(Jan. 13, 2006), 71 FR 3550 (January 23, 2006) 

(adopting Nasdaq IM–2110–2; IM–2110–3; IM– 

2110–4, and Rule 3010). 

21 15 U.S.C. 78s(b)(2). 

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term ‘‘facility’’ as defined in Section 3(a)(2) 

of the Act, as amended, provides, when used with 

respect to an exchange includes its premises, 

tangible or intangible property whether on the 

premises or not, any rights to the use of such 

premises or property or any service thereof for the 

purpose of effecting or reporting a transaction on an 

exchange (including, among other things, any 

system of communication to or from the exchange, 

by ticker or otherwise, maintained by or with the 

consent of the exchange), and any right of the 

exchange to the use of any property or service. See 

15 U.S.C. 78c(a)(2). 

4See NYSE Arca Equities Rule 1.1(yy). 

5See NYSE Arca Equities Rule 7.29(b). 

Rule 3010(a)(1), (b)(1), and (c)(1) 

provide additional clarification that the 

supervisory systems and internal 

inspections of ETP Holders must be 

reasonably designed to achieve 

compliance with applicable securities 

laws and regulations and with 

applicable NYSE Arca rules, including 

those relating to the misuse of material 

non-public information. 

Pursuant to this proposal rule change, 

ETP Holders may utilize the flexible, 

principles-based approach to modify 

their policies and procedures as 

appropriate to reflect changes to their 

business model, business activities, or 

to the securities market itself. An ETP 

Holder should be proactive in assuring 

that its policies and procedures reflect 

the current state of its business and 

continue to be reasonably designed to 

achieve compliance with applicable 

federal securities law and regulations, 

and with applicable Exchange rules. In 

addition, the Commission notes that, 

while information barriers are not 

specifically required under the 

proposal, an ETP Holder’s business 

model or business activities may dictate 

that an information barrier or a 

functional separation be part of the 

appropriate set of policies and 

procedures that would be reasonably 

designed to achieve compliance with 

applicable securities law and 

regulations, and with applicable 

Exchange rules. 

The Commission believes that the 

regulatory approach in this proposed 

rule change is substantially similar to 

the regulatory approach of Nasdaq. In 

particular, the NYSE Arca approach, 

like the Nasdaq approach, (i) 

enumerates the conduct that is 

prohibited by its members, including 

the potential misuse of material nonpublic information and (ii) provides for 

the policies and procedures that must be 

reasonably designed to ensure 

compliance with the same. In addition, 

the Commission notes that the Exchange 

has represented that its current 

examination procedure for the review of 

appropriate supervisory systems and 

procedures will remain in place. 

The Commission also finds good 

cause, pursuant to Section 19(b)(2) of 

the Act,19 for approving the proposed 

rule change prior to the 30th day after 

the date of publication of notice in the 

Federal Register. Although this 

proposed rule change does not require 

that members maintain specificallyprescribed information barriers, it will 

continue to mandate that members 

establish and maintain a set of policies 

and procedures reasonably designed to 

achieve compliance with applicable 

securities law and regulations, and with 

applicable Exchange rules. As such, the 

Exchange is adopting an approach that 

is substantially similar to the approach 

currently employed by Nasdaq.20

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,21 that the 

proposed rule change (SR–NYSEArca– 

2009–78) be, and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21641 Filed 9–4–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60607; File No. SR– 

NYSEArca–2009–80] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Establish the Risk 

Management Gateway (‘‘RMG’’) 

Service 

September 1, 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 August 

28, 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 establish 

its Risk Management Gateway (‘‘RMG’’) 

service. 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 offer, 

through its wholly-owned subsidiary 

NYSE Euronext Advanced Trading 

Solutions, Inc., the Risk Management 

Gateway (‘‘RMG’’) service as a facility 3

of the Exchange, to NYSE Arca Users.4

NYSE Transact Tools, Inc, a division of 

the NYSE Euronext Advanced Trading 

Solutions Group (‘‘NYXATS’’), owns 

RMG. 

Traditionally, the customers of an 

ETP Holder gave orders to the ETP 

Holder who then submitted those orders 

to the Exchange on behalf of the 

customer. By means of sponsored 

access, an ETP Holder may allow its 

customers to enter orders directly into 

the trading systems of the Exchange as 

Sponsored Participants, without the 

Sponsoring ETP Holder acting as an 

intermediary.5

To facilitate the ability of Sponsoring 

ETP Holders to monitor and oversee the 

sponsored access activity of their 

Sponsored Participants, NYXATS will 

offer an order-verification service to 

Sponsoring ETP Holders. This service 

will act as a risk filter by causing the 

orders of Sponsored Participants to pass 

through RMG prior to entering the 

Exchange’s trading systems for 

execution. When a Sponsored 

Participant’s order passes through RMG, 


jlentini on DSKJ8SOYB1PROD with NOTICES
46276 Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 

6The Exchange will file with the Commission all 

fees associated with the RMG Service. 

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

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) 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 Exchange has complied with this 

requirement. 

12 Id. 

13See Securities Exchange Act Release Nos. 

59354 (February 3, 2009), 74 FR 6683 (February 10, 

2009) (SR–NYSE–2008–101); 60236 (July 2, 2009), 

74 FR 34068 (July 14, 2009) (SR–BATS–2009–019). 

14For purposes only of waiving the 30-day 

operative delay of this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

RMG software determines whether the 

order complies with order criteria that 

the ETP Holder has established for that 

Sponsored Participant. The order 

criteria pertain to such matters as the 

size of the order (per order or daily 

quantity limits) or the credit limit (per 

order or daily value) that the Sponsoring 

ETP Holder has established for the 

Sponsored Participant. Additional risk 

filters may also be selected by the 

Sponsoring ETP Holder’s relating to 

specific symbols or end users. 

If the order is consistent with the 

parameters set by the ETP Holder, then 

RMG allows the order to continue along 

its path to the Exchange’s trading 

systems. If the order falls outside of 

those parameters, then RMG returns the 

order to the Sponsored Participant. 

RMG will only return an order to the 

Sponsored Participant when the order 

fails to comply with the criteria set by 

the Sponsoring ETP Holder. 

RMG software interacts with orders 

only prior to the orders’ entry into the 

Exchange’s trading system for 

execution. RMG does not have order 

execution or trade reporting capabilities 

(though it will allow a Sponsoring ETP 

Holder to monitor the orders of its 

Sponsored Participants). RMG 

maintains a record of all messages 

relating to Sponsored Participants’ 

transactions and supplies a copy of such 

messages to the applicable Sponsoring 

ETP Holder. 

The Sponsoring ETP Holder, and not 

RMG, will have full responsibility for 

ensuring that Sponsored Participants’ 

sponsored access to the Exchange 

complies with the Exchange’s sponsored 

access rules. The use of RMG by an ETP 

Holder does not automatically 

constitute compliance with Exchange 

rules. 

NYXATS will host RMG software on 

NYXATS’ infrastructure. After passing 

through RMG software, each order will 

enter the NYSE Arca’s Gateway. 

The Exchange does not require 

Sponsoring ETP Holders to use RMG. 

Sponsoring ETP Holders are free to use 

a competing risk-management service or 

to use none at all. The Exchange will 

not provide preferential treatment to 

Sponsoring ETP Holders using RMG. 

The Exchange proposes to make RMG 

available to its Users, as a facility of the 

Exchange, pursuant to contractual 

arrangements.6 The Exchange believes 

that RMG will offer its Users another 

option in the efficient risk management 

of its Sponsored Participant’s access to 

NYSE Arca. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) 7 of the 

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’), in general, and 

furthers the objectives of Section 

6(b)(5) 8 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. This service will allow firms to 

better monitor the order flow of their 

Sponsored Participants. 

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: (i) Does not significantly affect 

the protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 9 and Rule 19b– 

4(f)(6) thereunder.10

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.11 However, Rule 19b– 

4(f)(6)(iii) 12 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay and designate the proposed rule 

change operative upon filing so that the 

expected benefits to Exchange Users 

from use of the risk-management service 

would not be delayed. The Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest. The Commission notes that 

other self-regulatory organizations have 

similar functionality 13 and that this 

filing raises no new regulatory issues. 

Therefore, the Commission designates 

the proposal operative upon filing.14

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. 

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–NYSEArca–2009–80 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–NYSEArca–2009–80. 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 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 172 / Tuesday, September 8, 2009 / Notices 46277 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3BATS Exchange Rule 3.21, Customer 

Disclosures. 

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

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

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 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– 

NYSEArca–2009–80 and should be 

submitted on or before September 29, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–21640 Filed 9–4–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60605; File No. SR–CHX– 

2009–13] 

Self-Regulatory Organizations; 

Chicago Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change Adding 

Additional Trading Sessions 

September 1, 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 August 

28, 2009, Chicago Stock Exchange, Inc. 

(‘‘CHX’’ 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 CHX. 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 

CHX proposes to amend its rules to 

create an early trading session beginning 

at 6 a.m. CT on days the Exchange is 

open for trading and to create a second 

Late Trading Session from 3 p.m. to 3:15 

p.m. CT. The text of this proposed rule 

change is available on the Exchange’s 

Web site at (http://www.chx.com) and in 

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 

CHX 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 

CHX 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 is proposing to create 

an early trading session beginning at 6 

a.m. CT on days the Exchange is open 

for trading and to create a second Late 

Trading Session from 3 p.m. to 3:15 

p.m. CT. We believe that CHX 

Participants may be interested in 

posting bids and offers on the CHX in 

an early trading session, as well as in a 

late session immediately after the close 

of the Regular Session. In order to 

facilitate additional trading activity, the 

Exchange proposes to create an early 

trading session and a second late trading 

session, both of which would operate 

under the same basic operational and 

regulatory framework as the Regular 

Trading Session. CHX Participants 

could enter orders to buy and sell 

eligible securities and those orders 

would either be executed or displayed 

(or entered without being displayed in 

the case of a reserve or undisplayed 

order) depending on the status of our 

book and the national market system. 

The rules applicable to the Regular 

Trading Session would govern the Early 

and Late Trading Sessions, with the 

exception that the Regulation NMS 

prohibitions regarding intermarket 

trade-throughs and locked and crossed 

markets would not be in force. The 

current Late Trading Session (which 

would be renamed the ‘‘Late Crossing 

Session’’) would be available from 3:15 

p.m. to 4 p.m. CT and would be 

available only to Participants seeking to 

execute cross orders. 

In furtherance of this initiative, the 

Exchange proposes to add or amend the 

a [sic] number of applicable CHX rules. 

Definitions setting the times of the 

respective trading sessions would be 

added to Article 1. Due to the risk of 

illiquidity, the Exchange does not 

believe that it is appropriate to execute 

IOC Market Orders during any of the 

Extended Hours trading sessions and we 

propose to restrict use of that order type 

to the Regular Trading Session. We 

propose to add a new rule to the Article 

8 business conduct rules mandating that 

Participants which allow customers to 

trade in extended hours trading sessions 

to make certain specific risk disclosures 

relating to such activity. These risk 

disclosures are modeled on the rules of 

the BATS Exchange, Inc. regarding 

extended hours trading.3 The provisions 

of Article 20, Rule 1 setting the time of 

the various trading sessions would be 

amended to make reference to the Early, 

Late Trading and Late Crossing sessions 

and define how trading operates during 

those sessions. The language in Rule 1 

referring to the hours of trading for 

specified exchange-traded funds would 

be deleted since those securities would 

be eligible for trading during the Early 

and Late Trading session, rendering the 

current text unnecessary. Finally, we 

would amend Article 20, Rule 8 to 

reflect the manner in which the various 

sessions are opened and closed. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

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

furthers the objectives of Section 6(b)(5) 

in particular,5 in that it is designed to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transaction in securities, to 

remove impediments and perfect the 

mechanisms of a free and open market, 

and, in general, to protect investors and 

the public interest. In this case, the 

expansion of trading hours through the 

creation of an Early Trading Session and 

an additional Late Trading Session 

would provide participants with 


jlentini on DSKJ8SOYB1PROD with NOTICES