53532 Federal Register / Vol. 74, No. 200 / Monday, October 19, 2009 / Notices 

23 15 U.S.C. 78s(b)(2). 

24 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4See Securities and Exchange Act Release No. 

597755 [sic] (April 13, 2009) 74 FR 18009 (April 20, 

2009)(SR–NYSE–2009–15). 

5The Exchange notes that parallel changes are 

proposed to be made to the rules of NYSE Amex 

LLC. See SR–NYSE–Amex–2009–70. 

6See NYSE Rule 123C(8)(a)(1). 

currently listed and trading on an 

exchange to be based on an expanded 

and more diversified set of commodity 

components. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,23 that the 

proposed rule change (SR–NYSEArca– 

2009–89) be, and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–25109 Filed 10–16–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60809; File No. SR–NYSE– 

2009–104] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending NYSE 

Rule 123C(8)(a)(1) To Extend the 

Operation of the Extreme Order 

Imbalances Pilot 

October 9, 2009. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on October 

5, 2009, New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Rule 123C(8)(a)(1) to extend the 

operation of the pilot to temporarily 

suspend certain NYSE requirements 

relating to the closing of securities on 

the Exchange until the earlier of 

Securities and Exchange Commission 

approval to make such pilot permanent 

or December 31, 2009. 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 

NYSE Rule 123C(8)(a)(1) allows the 

Exchange to temporarily suspend 

certain rule requirements at the close 

when extreme order imbalances may 

cause significant dislocation to the 

closing price. The rule has operated on 

a pilot basis since April 2009 (‘‘Extreme 

Order Imbalances Pilot’’ or Pilot).4

Through this filing, NYSE proposes to 

extend the Pilot until the earlier of 

Securities and Exchange Commission 

approval to make such Pilot permanent 

or December 31, 2009.5

Background 

Pursuant to NYSE Rule 123C(8)(a)(1), 

the Exchange may suspend NYSE Rule 

52 (Hours of Operation) to resolve an 

extreme order imbalance that may result 

in a closing price dislocation at the 

close as a result of an order entered into 

Exchange systems, or represented to a 

DMM orally at or near the close.6 The 

provisions of NYSE Rule 123C(8)(a)(1) 

operate as the Extreme Order Imbalance 

Pilot. 

As a condition of the approval to 

operate the Pilot, the Exchange 

committed to provide the Commission 

with information regarding: (i) How 

often a Rule 52 temporary suspension 

pursuant to the Pilot was invoked 

during the six months following its 

approval; and (ii) the Exchange’s 

determination as to how to proceed with 

technical modifications to reconfigure 

Exchange systems to accept orders 

electronically after 4:00 p.m. 

The Extreme Order Imbalance Pilot is 

scheduled to end operation on October 

13, 2009. The Exchange is currently 

preparing a rule filing seeking 

permission to make the provisions of 

the Pilot permanent with certain 

modifications but does not expect that 

filing to be completed and approved by 

the Commission before October 13, 

2009. 

Proposal To Extend the Operation of the 

Extreme Order Imbalance Pilot 

The Exchange established the Extreme 

Order Imbalance Pilot to create a 

mechanism for ensuring a fair and 

orderly close when interest is received 

at or near the close that could negatively 

affect the closing transaction. The 

Exchange believes that this tool has 

proved very useful to resolve an extreme 

order imbalance that may result in a 

closing price dislocation at the close as 

a result of an order entered into 

Exchange systems, or represented to a 

DMM orally at or near the close. 

As the Exchange has previously 

stated, invocation of the provisions of 

NYSE Rule 123C(8) to attract offsetting 

interest is intended to be used for 

extreme and likely rare circumstances 

where there exists such a large 

imbalance at the close that a DMM is 

unable to close the security without 

significantly dislocating the price of the 

security. This is evidenced by the fact 

that during the course of the Pilot, the 

Exchange invoked the provisions of 

NYSE Rule 123C(8), including the 

provisions of the Extreme Order 

Imbalance Pilot pursuant to NYSE Rule 

123C(8)(a)(1), in only one security on 

August 31, 2009. 

In addition, during the operation of 

the Pilot, the Exchange determined that 

it would not be as onerous as previously 

believed to modify Exchange systems to 

accept orders electronically after 4 p.m. 

The Exchange anticipates that such 

system modifications could be 

completed by December 31, 2009. 

Given the above, the Exchange 

believes that provisions governing the 

Extreme Order Imbalance Pilot should 

be made permanent. Through this filing 

the Exchange seeks to extend the 

current operation of the Pilot in order to 

allow the Exchange to formally submit 

a filing to the Commission to convert 

the provisions governing the Pilot to 

permanent rules and complete the 

technological modifications required to 

accept orders electronically after 4 p.m. 

The Exchange therefore request and [sic] 

extension from the current expiration 

date of October 13, 2009, until the 

earlier of Securities and Exchange 


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7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78s(b)(3)(A)(iii). 

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires the self-regulatory 

organization to give the Commission notice of its 

intent to file the proposed rule change, along with 

a brief description and text of 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. 

NYSE has satisfied this requirement. 

11 17 CFR 240.19b–4(f)(6)(iii). 

12For purposes only of waiving the operative 

delay for 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. 78s(b)(3)(C). 14 17 CFR 200.30–3(a)(12). 

Commission approval to make such 

Pilot permanent or December 31, 2009. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 7 that an Exchange 

have rules that are designed to promote 

just and equitable principles of trade, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. The Exchange believes 

that the instant filing is consistent with 

these principles. Specifically an 

extension will allow the Exchange to: (i) 

Prepare and submit a filing to make the 

provisions governing the Extreme Order 

Imbalance Pilot permanent; (ii) have 

such filing complete public notice and 

comment period; and (iii) complete the 

19b–4 approval process. The rule 

operates to protect investors and the 

public interest by ensuring that the 

closing price at the Exchange is not 

significantly dislocated from the last 

sale price by virtue of an extreme order 

imbalance at or near the close. 

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 

The Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) 8 of the Act and Rule 

19b–4(f)(6) 9 thereunder. Because the 

foregoing proposed rule change: (1) 

Does not significantly affect the 

protection of investors or the public 

interest; (2) does not impose any 

significant burden on competition; and 

(3) by its terms, does not become 

operative for 30 days after the date of 

filing, or such shorter time as the 

Commission may designate if consistent 

with the protection of investors and the 

public interest, the proposed rule 

change has become effective pursuant to 

Section 19(b)(3)(A) of the Act and Rule 

19b–4(f)(6) thereunder. 

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing.10 However, Rule 19b– 

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

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange requested that the 

Commission waive the 30-day operative 

delay, as specified in Rule 19b– 

4(f)(6)(iii),11 which would make the rule 

change operative immediately. The 

Exchange believes that continuation of 

the Pilot does not burden competition 

and would operate to protect investors 

and the public interest by ensuring that 

the closing price at the Exchange is not 

significantly dislocated from the last 

sale price by virtue of an extreme order 

imbalance at or near the close. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because it would allow the Pilot to 

continue without interruption while the 

Exchange works towards submitting a 

separate proposal to make the Pilot 

permanent. Accordingly, the 

Commission designates the proposed 

rule change as operative upon filing 

with the Commission.12

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.13

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–NYSE–2009–104 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–2009–104. 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 available publicly. All 

submissions should refer to File 

Number SR–NYSE–2009–104 and 

should be submitted on or before 

November 9, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–25111 Filed 10–16–09; 8:45 am] 

BILLING CODE 8011–01–P 


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