Federal Register / Vol. 74, No. 182 / Tuesday, September 22, 2009 / Notices 48327 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 60429 

(August 4, 2009), 74 FR 40259 (‘‘Notice’’). 

4The provisions of NYSE Rule 1000 relating to 

CCS are in effect pursuant to a pilot that 

commenced in October 2008 and that is currently 

scheduled to end on October 1, 2009. The 

Commission understands that NYSE plans to 

request an extension of the pilot before it expires. 

5The 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. 6See NYSE Rule 62, Supplementary Material .10. 

performance; and (e) implement 

procedures reasonably designed to 

ensure compliance by the Sub-Advisers 

with the Fund’s investment objective, 

policies and restrictions. 

8. No director, trustee or officer of the 

Trust or a Fund, or director or officer of 

the Manager, will own directly or 

indirectly (other than through a pooled 

investment vehicle over which such 

person does not have control), any 

interest in a Sub-Adviser except for: (a) 

Ownership of interests in the Manager 

or any entity that controls, is controlled 

by, or is under common control with the 

Manager; or (b) ownership of less than 

1% of the outstanding securities of any 

class of equity or debt of any publicly 

traded company that is either a SubAdviser or an entity that controls, is 

controlled by, or is under common 

control with a Sub-Adviser. 

9. Each Fund will disclose in its 

registration statement the Aggregate Fee 

Disclosure. 

10. Independent legal counsel, as 

defined in rule 0–1(a)(6) under the Act, 

has been and will continue to be 

engaged to represent the Independent 

Board Members. The selection of such 

counsel will be within the discretion of 

the then-existing Independent Board 

Members. 

11. In the event the Commission 

adopts a rule under the Act providing 

substantially similar relief to that in the 

order requested in the application, the 

requested order will expire on the 

effective date of that rule. 

12. The Manager will provide the 

Board, no less frequently than quarterly, 

with information about the Manager’s 

profitability on a per Fund basis. This 

information will reflect the impact on 

profitability of the hiring or termination 

of any Sub-Adviser during the 

applicable quarter. 

13. Whenever a Sub-Adviser is hired 

or terminated, the Manager will provide 

the Board with information showing the 

expected impact on the profitability of 

the Manager. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22686 Filed 9–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60671; File No. SR–NYSE– 

2009–71] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Order 

Approving a Proposed Rule Change 

Amending NYSE Rule 1000 to Allow 

Exchange Systems to Access CCS 

Interest To Partially Fill an Incoming 

Limit Order 

September 15, 2009. 

I. Introduction 

On July 20, 2009, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘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 NYSE Rule 1000 to allow 

Exchange systems to access CCS interest 

to partially fill an incoming limit order. 

The proposed rule change was 

published for comment in the Federal 

Register on August 11, 2009.3 The 

Commission did not receive any 

comment letters on the proposed rule 

change. This order approves the 

proposed rule change. 

II. Description 

Background 

The NYSE offers Designated Market 

Makers (‘‘DMMs’’) the ability to create a 

schedule of additional non-displayed 

liquidity at various price points where 

the DMM is willing to interact with, and 

provide price improvement to, incoming 

orders in the Exchange’s system. This 

schedule is known as the DMM Capital 

Commitment Schedule (‘‘CCS’’).4 CCS 

provides the Display Book® 5 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 and 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. 

Exchange systems also take into account 

protected bids or offers on markets other 

than the Exchange (‘‘away interest’’) 

when determining the completion price. 

Exchange systems then review the 

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 6) 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’’). If the 

volume of CCS interest that would be 

accessed is greater at the completion 

price, or 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 greater 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 


sroberts on DSKD5P82C1PROD with NOTICES
48328 Federal Register / Vol. 74, No. 182 / Tuesday, September 22, 2009 / Notices 

7Pursuant 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. 

8For a more detailed description of the 

Exchange’s proposal, including examples 

describing the proposal, see Notice, supra note 3, 

at 40261–40262. 

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. 

10 In order for the DMM CCS interest to be eligible 

to participate in a partial execution of an incoming 

order, the DMM must designate such interest with 

a ‘‘PF’’ indicator. All liquidity provided in the CCS 

interest file would continue to be eligible to 

participate in full executions of incoming orders. 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. 

11For a description of these technical changes, 

see Notice, supra note 3, at 40263. 

12 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

13 15 U.S.C. 78f(b)(5). 

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. 

NYSE Rule 72 (‘‘Priority of Bids and 

Offers and Allocation of Executions’’).7

Exchange systems can access CCS 

interest only once to participate in the 

execution of an incoming order. 

Moreover, under current rules, 

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. 

Proposed Amendment to NYSE Rule 

1000 

The Exchange now proposes to allow 

Exchange systems to access CCS interest 

to participate in executions where the 

incoming order will only be partially 

executed.8 Large incoming orders may 

exhaust the entirety of displayed and 

reserve interest on the Display Book at 

various price points such that the 

remaining unexecuted shares of the 

incoming order would be quoted at the 

order’s limit price, if any, or, 

alternatively, at a Liquidity 

Replenishment Point (‘‘LRP’’) 9 if that 

price point is reached. In these partial 

executions, Exchange systems currently 

do not access the CCS interest available 

at the price point where the remaining 

shares of the incoming order is quoted. 

The Exchange proposes to modify the 

operation of CCS interest to allow 

Exchange systems to access and execute 

CCS interest to partially fill an incoming 

order that exhausts the interest available 

on the Display Book. Exchange systems 

would continue to review all the 

liquidity available on the Display Book 

and at away market centers; however, 

once it determines that the order cannot 

be executed in full, it would also review 

the DMM CCS interest file to determine 

if any CCS interest is eligible to partially 

fill the incoming order at the price 

where any remaining shares of the order 

would be quoted.10

When Exchange systems access the 

CCS interest in order to provide a partial 

execution of an incoming order, the CCS 

interest would participate at the price 

point where the remaining shares will 

be quoted—the order’s limit price, if 

any, or the LRP, if reached. As before, 

any unexecuted remainder of the 

incoming order would be quoted at the 

limit price or LRP, as applicable. 

When accessing CCS interest to 

partially execute an order, Exchange 

systems would not review the CCS 

interest available at the better price. For 

such partial executions, CCS interest 

would only participate at the price at 

which the unexecuted shares of the 

incoming order would be quoted at the 

last price, if any, or, if an LRP is 

reached, at the LRP price. As is the case 

with completed executions, Exchange 

systems would not access CCS interest 

during a partial execution until all other 

interest on the Display Book at that 

price point is executed in full. 

The Exchange further proposes 

technical changes to NYSE Rule 1000.11

III. Discussion and Commission’s 

Findings 

After careful review, 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.12 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,13 which requires, 

among other things, that a national 

securities 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 Exchange stated in 

its filing it believes that this proposal 

would increase an order’s execution 

volume by allowing Exchange systems 

to access CCS interest for partial 

executions. The proposed modification 

increases the opportunities for 

automatically executing a greater 

number of shares of the incoming order 

on the Exchange prior to quoting the 

remainder. Thus, under the proposal, 

partially executed incoming orders 

would have an opportunity to have a 

greater number of shares receive an 

execution prior to being quoted. 

The Commission notes that the price 

point at which the CCS interest 

participates in partial executions would 

be, by operation of the proposed rule, 

the same or better than any limit price 

the customer has set for the incoming 

order. For the foregoing reasons, the 

Commission finds the proposed rule 

change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

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

proposed rule change (SR–NYSE–2009– 

71) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–22732 Filed 9–21–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60670; File No. SR– 

NYSEAmex–2009–46] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Order Approving a 

Proposed Rule Change Amending 

NYSE Amex Equities Rule 1000 To 

Allow Exchange Systems To Access 

CCS Interest To Partially Fill an 

Incoming Limit Order 

September 15, 2009. 

I. Introduction 

On July 20, 2009, NYSE Amex LLC 

(‘‘NYSE Amex’’ or the ‘‘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 NYSE Amex Equities 

Rule 1000 to allow Exchange systems to 

access CCS interest to partially fill an 

incoming limit order. The proposed rule 

change was published for comment in 

the Federal Register on August 11, 


sroberts on DSKD5P82C1PROD with NOTICES