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[Federal Register Volume 74, Number 194 (Thursday, October 8, 2009)]
[Notices]
[Pages 51926-51931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-24245]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60781; File No. SR-NYSE-2009-103]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC 
Amending NYSE Interim Rule 128 Governing Clearly Erroneous Executions 
for NYSE Equities

October 2, 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 October 2, 2009, the New York Stock Exchange LLC (``Exchange'' or 
``NYSE'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. NYSE has 
designated the proposed rule change as constituting a rule change under 
Rule

[[Page 51927]]

19b-4(f)(6) under the Act,\3\ which renders the proposal effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE interim Rule 128 (Clearly 
Erroneous Executions for NYSE Equities) governing clearly erroneous 
executions for NYSE equities. 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 amend interim Rule 128 in order to improve 
the Exchange's policies and procedures regarding clearly erroneous 
executions that occur on the NYSE and on other national market centers. 
The proposed changes are part of a market-wide effort designed to 
provide transparency and finality with respect to clearly erroneous 
executions. This effort seeks to achieve consistent results for 
participants across U.S. equities exchanges while maintaining a fair 
and orderly market, protecting investors and protecting the public 
interest. The proposed changes are more fully discussed below.
Definition
    The Exchange will maintain the meaning of the definition of a 
clearly erroneous execution, but proposes to add clarifying language 
with respect to cancelled trades. The proposed change identifies that 
when a clearly erroneous execution occurs and both parties agree to 
cancel the execution and when a trade is determined by the Exchange to 
be clearly erroneous such executions will be removed ``from the 
Consolidated Tape.'' \4\ A trade will be removed from the Consolidated 
Tape only when the determination is deemed final and any applicable 
appeals have been exhausted.
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    \4\ For purposes of this Rule, ``removed from the Consolidate 
Tape'' means that a subsequent message will be sent to the 
Consolidated Tape indicating that a previously executed trade has 
been cancelled.
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Member or Member Organization Initiated Review Requests
    The Exchange proposes to amend interim Rule 128 to update the 
procedures for requesting a review of a clearly erroneous execution. 
First, and throughout Rule 128, the term ``Officer'' will be defined as 
an Officer of the Exchange or such other senior level employee 
designee. Next, the proposed rule will require that requests for review 
be made by electronic mail (``e-mail'') or other electronic means 
specified from time to time by the Exchange, except for market 
participants who trade on the Floor of the Exchange, who will continue 
to be permitted to make such requests for review in person on the Floor 
of the Exchange. Requiring requests for review to be made 
electronically, except those requests made in person on the Floor of 
the Exchange, creates a standard format that can easily be logged and 
tracked. The Exchange will continue to publish the e-mail address and 
other electronic means to be used for all clearly erroneous filings in 
a circular distributed to members and member organizations.
    The Exchange further proposes that requests for review must be 
received by the Exchange within thirty (30) minutes of the execution 
time for orders initially routed to and executed on the Exchange. The 
Exchange proposes that members and member organizations submit certain 
essential identifying information with the request including the time 
of the execution(s), security symbol(s), number of shares, price(s), 
side (bought or sold), and factual basis for believing that the trade 
is clearly erroneous. The current rule requires requests for review to 
be received within fifteen (15) minutes of the execution and does not 
specify what information is required. The Exchange believes that thirty 
(30) minutes is an appropriate time frame that offers the requesting 
party sufficient time to gather and submit all required information.
    The proposed rule also requires the Exchange to notify the 
counterparty to a trade upon receipt of a timely filed request for 
review that satisfies the Numerical Guidelines set forth within the 
rule. This proposed language eliminates the requirement that 
counterparties be notified of every request for a ruling and instead 
requires notice only when a request is filed in a timely manner and 
satisfies the Numerical Guidelines. This change alleviates the burden 
on the Exchange of notifying the counterparty when a request for review 
does not merit a ruling.
    The Exchange proposes to amend interim Rule 128 to allow an Officer 
to request additional information from each party to an execution under 
review. Parties to an execution under review will have thirty (30) 
minutes from the time of the request to provide additional supporting 
information.

    Routed Executions
    The Exchange proposes to give other market centers an additional 
thirty (30) minutes from the receipt of their participant's timely 
filing to request a ruling, but no longer than sixty (60) minutes from 
the time of the execution under review. This provision accounts for 
those executions initially directed to an away market center and 
subsequently routed by that away market center to the Exchange.
    For example, assume an order is initially routed by a participant 
to Market Center A and subsequently routed to the NYSE where the order 
is executed at a price outside of the Numerical Guidelines. This 
provision generally requires Market Center A to file with the Exchange 
within thirty (30) minutes from the time it receives its participant's 
timely filed request for review. This provision caps the filing 
deadline for an away market center at sixty (60) minutes from the time 
of the execution under review.

    Threshold Factors
    Currently, the Exchange's Clearly Erroneous Execution rule does not 
identify specific numeric guidelines for determining what constitutes a 
clearly erroneous execution. The current rule simply provides that ``an 
Officer of the Exchange * * * shall review the transaction * * * and 
determine whether it is clearly erroneous, with a view toward 
maintaining a fair and orderly market and the protection of investors 
and the public interest.'' \5\ In practice, the Exchange currently 
incorporates the internal guidelines in the Exchange's Clearly 
Erroneous Execution policy. The Exchange proposes adding certain 
numerical thresholds to the Rule that explicitly state what 
constitutes, among other

[[Page 51928]]

factors, a possible clearly erroneous execution.
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    \5\ NYSE Rule 128(b).

    Numerical Guidelines
    The proposed Numerical Guidelines state that an execution executed 
during the regular trading hours and after hours of the Exchange may be 
found to be clearly erroneous only if the price of the execution to buy 
is greater, or less in the case of a sale, than the Reference Price by 
an amount that equals or exceeds the numerical guidelines for a 
particular execution category. The execution time of the transaction 
under review determines whether the Numerical Guideline applied is for 
the regular trading hours or the after hours of the Exchange. The 
Reference Price shall be equal to the Consolidated Last Sale 
immediately prior to the execution under review, unless unusual 
circumstances are present. The proposed guidelines for sales greater 
than $0.00 up to and including $25.00 are 10% for the regular trading 
hours and 20% for the after hours of the Exchange. The proposed 
guidelines for sales greater than $25.00 up to and including $50.00 are 
5% for the regular trading hours and 10% for the after hours of the 
Exchange. The proposed guidelines for sales greater than $50.00 are 3% 
for the regular trading hours and 6% for the after hours of the 
Exchange. A filing involving five or more securities by the same member 
or member organization will be aggregated into a single filing called a 
``Multi-Stock Event.'' In the case of a Multi-Stock Event, the proposed 
guidelines are 10% per security for the regular trading hours and after 
hours of the Exchange. In the case of Leveraged ETF/ETN securities, the 
above guidelines are to be multiplied by the leverage multiplier of the 
security. Executions that do not meet or exceed the Numerical 
Guidelines will not be eligible for review under this section. The 
following chart summarizes the proposed Numerical Guidelines.

----------------------------------------------------------------------------------------------------------------
                                                Regular trading hours of the       After hours of the exchange
                                               exchange numerical guidelines     numerical guidelines  (subject
  Reference price: Consolidated Last Sale    (subject execution's % difference    execution's % difference from
                                             from the consolidated last sale):    the consolidated last sale):
----------------------------------------------------------------------------------------------------------------
Greater than $0.00 up to and including       10%..............................  20%.
 $25.00.
Greater than $25.00 up to and including      5%...............................  10%.
 $50.00.
Greater than $50.00........................  3%...............................  6%.
Multi-Stock Event--Filings involving five    10%..............................  10%.
 or more securities by the same member or
 member organization will be aggregated
 into a single filing.
Leveraged ETF/ETN securities...............  Regular Trading Hours of the       After Hours of the Exchange
                                              Exchange Numerical Guidelines      Numerical Guidelines multiplied
                                              multiplied by the leverage         by the leverage multiplier
                                              multiplier (i.e. 2x).              (i.e. 2x).
----------------------------------------------------------------------------------------------------------------

    Establishing Numerical Guidelines within the Rule brings regulatory 
transparency and consistency in the application of the rules of the 
Exchange. These Numerical Guidelines represent the general consensus 
approach and were developed based on the collective experiences of a 
market-wide group. The Exchange believes that the thresholds 
established are fair and appropriate and apply evenly to all 
participants.

    Unusual Circumstances
    The Exchange further proposes that in Unusual Circumstances the 
Exchange may, in its discretion and with a view toward maintaining a 
fair and orderly market and the protection of investors and the public 
interest, use a Reference Price other than the consolidated last sale. 
Unusual Circumstances may include periods of extreme market volatility, 
sustained illiquidity, or widespread system issues. Other Reference 
Prices that the Exchange may use would include the consolidated inside 
price, the consolidated opening price, the consolidated prior close, or 
the consolidated last sale prior to a series of executions.
    The following example explains the use of a Reference Price equal 
to the consolidated last sale prior to a series of executions.
    ABC has a consolidated last sale of $10.00. During the regular 
trading hours of the Exchange Customer A enters a market order to buy 
10,000 shares, although it had intended a market order for 1,000 
shares. The size of the order is such that the order sweeps the NYSE 
Display Book, which reflects 1,000 shares of liquidity offered at each 
of following prices. Executions occur, moving through the depth of 
Book, as follows:

Trade 1--1000 shares @ $10.00 (9000 remaining)
Trade 2--1000 shares @ $10.20 (8000 remaining)
Trade 3--1000 shares @ $10.40 (7000 remaining)
Trade 4--1000 shares @ $10.60 (6000 remaining)
Trade 5--1000 shares @ $10.80 (5000 remaining)
Trade 6--1000 shares @ $11.00 (4000 remaining)
Trade 7--1000 shares @ $11.20 (3000 remaining)
Trade 8--1000 shares @ $11.40 (2000 remaining)
Trade 9--1000 shares @ $11.60 (1000 remaining)
Trade 10--1000 shares @ $11.80 (complete)

    Thus, to be eligible for review, an execution must be at a price 
that is at least 10% higher than the consolidated last sale prior to 
the series of executions. Customer A could request a ruling for trades 
6 through 10, priced at $11.00 and above, but trades 
1 through 5 would not be eligible for review.
    Under the proposed rule the Exchange may also use a higher 
Numerical Guideline if, after market participants have been alerted to 
erroneous activity, the price of the security returns toward its prior 
trading range but continues to trade at a price beyond the Numerical 
Guidelines.

    Joint Market Rulings
    In the interest of achieving consistency across markets, the 
Exchange proposes that, in events that involve other markets, the 
Exchange would have the ability to use a different Reference Price and/
or Numerical Guideline. In these instances the Reference Price would be 
determined based on a consensus among the Exchanges where the 
executions occurred. Furthermore, when a ruling is made across markets, 
the Exchange may determine that the ruling is not eligible for appeal 
because immediate finality is necessary to maintain a fair and orderly 
market and to protect investors and the public interest. While the 
Exchange will coordinate its review of a clearly erroneous execution 
with other affected market centers with the goal of rendering 
consistent results across the market, the Exchange is not bound by 
joint market rulings when such rulings

[[Page 51929]]

would violate other NYSE rules or are inconsistent with internal 
policies of the Exchange.

    Additional Factors
    The proposed amendments to interim Rule 128 also enumerate some 
additional factors that an Officer may consider when determining 
whether an execution is clearly erroneous. These factors include, but 
are not limited to, system malfunctions or disruptions, volume and 
volatility for the security, derivative securities products that 
correspond to greater than 100% in the direction of a tracking index, 
news released for the security, whether trading in the security was 
recently halted/resumed, whether the security is an IPO, whether the 
security was subject to a stock-split, reorganization, or other 
corporate action, overall market conditions, Opening and Late Session 
executions, validity of the consolidated tape's trades and quotes, 
consideration of primary market indications, Liquidity Replenishment 
Points (``LRPs''), Depth Guidelines and executions inconsistent with 
the trading pattern in the stock. Each additional factor shall be 
considered with a view toward maintaining a fair and orderly market, 
the protection of investors and the public interest.

    Numerical Guidelines Applicable to Volatile Market Opens
    The Exchange proposes to give the Exchange the ability to expand 
the Numerical Guidelines applicable to executions occurring between 
9:30 a.m. and 10 a.m. based on the disseminated value of the S&P 500 
Futures at 9:15 a.m. When the S&P Futures are up or down 3% up to but 
not including 5% at 9:15 a.m., the Numerical Guidelines are doubled. 
When the S&P Futures are up or down 5% or greater at 9:15 a.m., the 
Numerical Guidelines are tripled. The Exchange believes that the S&P 
500 futures contract is an appropriate and reliable barometer of market 
activity prior to the market opening due to its broad based market 
coverage and deep liquidity. Using the S&P 500 Futures disseminated 
value at 9:15 a.m. as the barometer of market activity, the Exchange is 
providing a transparent means of offering adjusted guidelines in times 
of volatile market activity.
Outlier Executions
    The proposed amendments to interim Rule 128 provide that the 
Officer may consider requests for review received after thirty (30) 
minutes, but not longer than sixty (60) minutes after the execution in 
question in the case of an Outlier Execution. An Outlier Execution is 
an execution where, (1) the execution price of the security is greater 
than three times the current Numerical Guidelines, or (2) the execution 
price of the security breaches the 52-week high or low, in which case 
the Exchange may consider Additional Factors to determine if the 
execution qualifies for review or if the Exchange shall decline to act.
Review Procedures
    Initial Determination
    Under the current rule, if the Officer determines that the 
execution is not clearly erroneous, the Officer shall not take any 
action in connection with the completed execution. In the event that 
the Officer determines that the execution in dispute is clearly 
erroneous, the Officer shall either declare the execution null and void 
or modify one or more of the terms of the transaction to achieve an 
equitable rectification of the error that would place the parties in 
the same position, or as close as possible to the same position that 
they would have been in, had the error not occurred. Pursuant to the 
proposed rule, in the event the Officer determines there is a clearly 
erroneous execution, the Officer may declare the execution null and 
void or, if such transaction occurred only on the Exchange and no 
contemporaneous transaction(s) occurred on another market center(s) at 
a price that meets or exceeds the applicable Numerical Guidelines and 
if the Exchange has no actual knowledge of a clearly erroneous 
execution review of a contemporaneous transaction of the subject 
security on another market center, modify one or more of the terms of 
the transaction to achieve an equitable rectification of the error that 
would place the parties in the same position, or as close as possible 
to the same position that they would have been in, had the error not 
occurred.
    For purposes of the proposed Rule, a transaction will be considered 
to have been contemporaneous if it was reported to the Consolidated 
Tape within a reasonable time frame of the transaction under review. 
Such time frame shall be determined by the Officer at the time of the 
clearly erroneous determination based on the liquidity of the relevant 
security, but shall in no case be less than one (1) second before or 
after the time of execution on the Exchange. In assessing whether there 
was a contemporaneous transaction on another market center, the 
Exchange will consider the existence of any clearly erroneous review of 
a transaction in the subject security on another market center of which 
it has actual knowledge, which may be indicative that the transaction 
under review on such other market center was contemporaneous with the 
transaction under review on the Exchange. However, the Exchange will 
not be required to initiate communication with other market centers to 
determine the existence of any such review(s).
    For purposes of the proposed rule, whenever the rule provides 
authority for the Officer to modify or adjust a clearly erroneous 
execution, in addition to authority to declare the execution null and 
void, the Officer's authority to modify or adjust the clearly erroneous 
execution is subject to the conditions that there were no 
contemporaneous transactions on other markets and that the Exchange had 
no actual knowledge of a clearly erroneous execution review of a 
contemporaneous transaction of the subject security on another market 
center, as described above.
    The Exchange also proposes adding language stating that a 
determination shall be made generally within thirty (30) minutes of 
receipt of the complaint, but in no case later than the start of the 
regular trading hours of the Exchange on the following trading day. 
Rulings made outside of thirty (30) minutes by an Officer will not fail 
for lack of timeliness. The guideline simply provides participants an 
appropriate expectation that a ruling will generally be made within 
thirty (30) minutes and in no case later than the start of the regular 
trading hours of the Exchange on the following trading day.

    Appeals
    The Exchange proposes to amend the appeals procedure for trades 
that are deemed to be clearly erroneous. First, the Exchange will no 
longer accept appeal requests via facsimile. Similar to the proposed 
language for an initial request for a ruling, all appeal requests must 
be made via e-mail, except for those requests for appeals from Exchange 
members who trade on the Floor of the Exchange. Members who trade on 
the Floor of the Exchange may also submit requests for appeals in 
person from the Floor.
    The current rule provides that the Exchange shall review and render 
a decision upon an appeal within a timeframe provided by the Exchange. 
The proposed rule offers more definite guidelines to ensure the 
expedient resolution of appeals. It requires the Exchange to review 
appeals as soon as practicable, but generally on the same day as the 
executions under review. Appeal requests received between 3 ET and the 
close of trading should be made as soon as practicable, but in no case 
later than the trading day following the date of the execution under 
review. Appeal decisions will not fail for lack of

[[Page 51930]]

timeliness. This revised provision provides participants a reasonable 
expectation of when a ruling on appeal will generally be made.
    Further, the proposed rule declares that any determination made by 
an Officer or by the CEE Panel shall be rendered without prejudice as 
to the right of the parties to the execution to submit their dispute to 
arbitration. This provision simply clarifies the fact that nothing in 
the proposed rule limits or impedes the rights of the parties to 
arbitrate their dispute.
System Disruption and Malfunctions
    Currently, within the System Disruptions and Malfunctions section 
of the Rule, after an Officer determines that a trade was clearly 
erroneous he may declare the execution null and void or modify the 
trade to attempt to achieve an equitable rectification of the error. 
Under the proposed rule, when the Officer determines that an execution 
is clearly erroneous, the Officer shall either declare the transaction 
null and void or, if such transaction occurred only on the Exchange and 
no contemporaneous transaction(s) occurred on another market center(s) 
at a price that meets or exceeds the applicable Numerical Guidelines 
and if the Exchange has no actual knowledge of a clearly erroneous 
execution review of a contemporaneous transaction of the subject 
security on another market center, modify one or more of the terms of 
the transaction to achieve an equitable rectification of the error that 
would place the parties in the same position, or as close as possible 
to the same position that they would have been in, had the error not 
occurred. This rule change supports the goal to provide market-wide 
consistency to the resolution of clearly erroneous executions that 
occur on multiple markets.
    The proposed rule also provides that, in the event of a disruption 
or a malfunction, the Officer will rely on the proposed Numerical 
Guidelines in determining whether an execution is clearly erroneous. 
However, the Officer may also use a lower Numerical Guideline if 
necessary to maintain a fair and orderly market, protect investors, and 
protect the public interest. The proposed rule also adds that actions 
taken under these circumstances must be taken within thirty (30) 
minutes of detection of the erroneous execution in the ordinary case, 
and by no later than the start of the regular trading hours of the 
Exchange on the day following the date of the execution under review 
when extraordinary circumstances exist.
Officers Acting on Their Own Motion
    The Exchange proposes to add a section to the Rule that will grant 
an Officer the ability to act on his or her own motion to review 
potentially erroneous executions. Under the current rule, an Officer 
has the ability to act upon his or her own motion only in the event of 
a System Disruption or Malfunction. The proposed rule would allow an 
Officer to review executions and rely on the Numerical Guidelines under 
any circumstance.
    Under the proposed rule, an Officer acting on its own motion, may 
review potentially erroneous executions that occur on the Exchange and 
shall either declare the transaction null and void or, if such 
transaction occurred only on the Exchange and no contemporaneous 
transaction(s) occurred on another market center(s) at a price that 
meets or exceeds the applicable Numerical Guidelines and if the 
Exchange has no actual knowledge of a clearly erroneous execution 
review of a contemporaneous transaction of the subject security on 
another market center, modify one or more of the terms of the 
transaction to achieve an equitable rectification of the error that 
would place the parties in the same position, or as close as possible 
to the same position that they would have been in, had the error not 
occurred. This rule change supports the goal to provide market-wide 
consistency to the resolution of clearly erroneous executions that 
occur on multiple markets.
    In extraordinary circumstances an Officer may apply a lower 
Numerical Guideline to review a trade if it is determined that such 
action is necessary to maintain a fair and orderly market or protect 
investors and the public interest. In some instances the Exchange may 
detect a single execution that breaches the Numerical Guidelines but is 
not the subject of a ruling request. This provision gives the Exchange 
the ability to review such executions. Additionally, in practice 
clearly erroneous executions may involve multiple parties and multiple 
executions. The Exchange proposes this provision to permit an Officer 
to rule on a group of executions related to the same occurrence or 
event as a whole, with or without a formal request for a ruling from an 
affected party.
Trade Nullification and Price Adjustments for UTP Securities That Are 
the Subject of Initial Public Offerings
    The proposed Rule also modifies the Exchange's policy on trade 
nullification and UTP securities that are subject to initial public 
offerings. Under the current Rule, a clearly erroneous execution may be 
deemed to have occurred in the opening execution of the subject 
security if the execution price of the opening execution on the 
Exchange is the lesser of $1.00 or 10% away from the opening price on 
the listing exchange or association. Under the proposed rule, in such 
circumstances, the Officer shall either decline to take action in 
connection with the completed transaction, declare the transaction null 
and void or, if such transaction occurred only on the Exchange and no 
contemporaneous transaction(s) occurred on another market center(s) at 
a price that meets or exceeds the applicable Numerical Guidelines and 
if the Exchange has no actual knowledge of a clearly erroneous 
execution review of a contemporaneous transaction of the subject 
security on another market center, adjust the transaction price to the 
opening price on the listing exchange or association.
    Pursuant to the proposed rule, clearly erroneous executions of 
subsequent executions of the subject security will be reviewed in the 
same manner as the procedure set forth in (e)(1). Absent extraordinary 
circumstances, action of the Officer must be taken in a timely fashion, 
generally within thirty (30) minutes of the detection of the erroneous 
execution. In extraordinary circumstances, the reviewing Officer may 
take action by no later than the start of the regular trading hours of 
the Exchange on the day following the date of the execution under 
review.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \6\ of the 
Securities Exchange Act of 1934 (the ``Exchange Act''), in general, and 
furthers the objectives of Section 6(b)(5) \7\ 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 proposed rule change provides transparency and finality for 
participants and creates consistent results across U.S. equities 
exchanges with respect to clearly erroneous executions. This proposed 
change further promotes the maintenance of a fair and orderly market, 
the protection

[[Page 51931]]

of investors and the protection of the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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 \8\ and Rule 19b-
4(f)(6) thereunder.\9\
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 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 Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \10\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \11\ 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 so that it may 
implement the new rule on October 5, 2009, the same date as the other 
equities exchanges. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because it will allow the Exchange to begin applying 
the new rule on the same date as the other equities exchanges.\12\ 
Application of the new rule on this date should help foster 
transparency and consistency among those exchanges that adopt clearly 
erroneous execution rules substantially similar to those previously 
approved by the Commission.\13\ For these reasons, the Commission 
designates that the proposed rule change become operative on October 5, 
2009.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposal's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \13\ See Securities Exchange Act Release No. 60706 (September 
22, 2009), 74 FR 49416 (September 28, 2009) (NYSEArca-2009-36).
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    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 [email protected]. Please include 
File Number SR-NYSE-2009-103 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-2009-103. 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-2009-103 and should be 
submitted on or before October 29, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-24245 Filed 10-7-09; 8:45 am]
BILLING CODE 8011-01-P
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