28532 Federal Register / Vol. 72, No. 97 / Monday, May 21, 2007 / Notices 

5 In approving this proposed rule change the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(2). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5See 17 CFR 242.611. See also Securities 

Exchange Act Release No. 51808 (June 9, 2005), 70 

FR 37496 (June 29, 2005). 

III. Discussion 

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.5 Specifically, the 

Commission finds that the proposal is 

consistent with Section 6(b)(5) of the 

Act,6 which requires, among other 

things, that the rules of a national 

securities exchange be designed to 

prevent fraudulent and manipulative 

acts and practices, 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. Specifically, the 

proposal will allow the ISE to make 

available to all ISE members 

information regarding customer interest 

at the ISE’s BBO that currently is 

available only to PMMs. In addition, the 

proposal will allow the ISE to provide 

its members with the same customer 

interest information that CBOE 

currently makes available to its 

members. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,7 that the 

proposed rule change (SR–ISE–2007–18) 

is approved. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.8

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. E7–9664 Filed 5–18–07; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–55768; File No. SR–NYSE–

2007–24] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change and 

Amendment No. 1 Thereto Relating to 

Rule 13 (Definitions of Orders) To 

Establish the New Order Type Called 

Do Not Ship 

May 15, 2007. 

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 April 20, 

2007, the New York Stock Exchange 

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

the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change. The Exchange 

filed Amendment No. 1 to the proposed 

rule change on May 11, 2007. The 

proposed rule change, as amended, is 

described in Items I and II below, which 

Items have been substantially prepared 

by the NYSE. The Exchange filed the 

proposal pursuant to Section 19(b)(3)(A) 

of the Act 3 and Rule 19b–4(f)(6) 

thereunder,4 which renders the proposal 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change, 

as amended, from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend its 

Rule 13 (Definitions of Orders) to 

establish the new order type called Do 

Not Ship (‘‘DNS’’). The text of the 

proposed rule change is available at the 

Exchange, on the Exchange’s Web site at 

http://www.nyse.com, 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 

Exchange 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 these 

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 aspects 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 amending Rule 13 to 

adopt a Do Not Ship, or ‘‘DNS,’’ order. 

A DNS order will be a limit order to buy 

or sell that is to be quoted and/or 

executed in whole or in part only on the 

Exchange. In the event the order would 

require routing to another market center 

pursuant to Exchange rules or federal 

securities laws, it would be immediately 

cancelled by Exchange systems. 

The proposed DNS order provides an 

alternative for market participants who 

are seeking to have their order quoted 

and executed solely on the Exchange. 

The Exchange states that the DNS order 

provides the market participant with 

control over execution costs and where 

the order will be handled. 

Regulation National Market System 

(‘‘Reg. NMS’’) requires, among other 

things, that with limited exceptions, 

trading centers have policies and 

procedures reasonably designed to 

prevent the execution of trades at prices 

inferior to protected quotations 

displayed by other market centers.5 The 

Exchange states that, in this context, 

orders that are routed away to other 

market center(s) in compliance with 

Reg. NMS may cause the market 

participant to incur multiple fees 

because the customer has to pay a 

separate fee each time the order is 

routed to other market center(s) during 

the course of its execution. The DNS 

order enables a market participant to 

control the costs associated with order 

execution by limiting the execution of 

the order in whole or in part, to the 

Exchange. 

Similarly, a market participant who 

desires to have its order executed in 

whole or in part solely on the Exchange 

will also benefit from the DNS order 

which, by its terms, will immediately 

and automatically cancel if it is required 

to be routed away to another market 

center. 

Generally, a DNS order can quote and 

trade on the Exchange. Where the bid or 

offer on the Exchange matches the bid 

or offer at another market center, an 

incoming DNS order that is eligible to 

quote and trade will do so first at the 

Exchange. However, if quoting the DNS 

order will cause the locking or crossing 


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Federal Register / Vol. 72, No. 97 / Monday, May 21, 2007 / Notices 28533 

6See NYSE Arca, Inc. Equities Rule 7.31 (Orders 

and Modifiers) subsection (w) PNP Order (Post No 

Preference); Securities Exchange Act Release No. 

44983 (October 25, 2001), 66 FR 55225 (November 

1, 2001) (SR–PCX–00–25). See also Philadelphia 

Stock Exchange, Inc. Rules of the Board of 

Governors Rule 185 (Orders and Order Execution) 

subsection (b) (Limited Price Orders) subparagraphs 

(1)(D); Securities Exchange Release No. 54538 

(September 28, 2006), 71 FR 59184 (October 6, 

2006) (SR–Phlx–2006–43). 

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

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

9 17 CFR 240.19b–4(f)(6). 

10 17 CFR 240.19b–4(f)(6)(iii). Rule 19b–4(f)(6) 

also 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. The Exchange has 

satisfied the five-day pre-filing requirement. 

11See supra at note 6. 

12The Exchange represents that it seeks the 

requested waivers to allow for the immediate 

implementation of this new order type upon the 

operability of the Exchange’s systems on or about 

May 18, 2007. 

13For the purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

14The Commission considers the 60-day 

abrogation period to have commenced on May 11, 

2007, the date the Exchange filed Amendment No. 

1. 15 17 CFR 200.30–3(a)(12). 

of another market center in violation of 

Exchange Rule 19 (Locking or Crossing 

Protected Quotations in NMS Stocks), 

the DNS order will cancel. If all or part 

of a DNS order would have been 

required, pursuant to Federal securities 

laws, to be routed to another market 

center upon entry at the Exchange, it 

will immediately and automatically 

cancel. When a DNS order is not eligible 

to be traded, it will be placed on the 

Display Book system at its limit price. 

The Commission has previously 

approved the use of order types 

substantially similar to the DNS on 

other exchanges.6 The Exchange 

believes that the DNS order will not 

only give the market participant greater 

flexibility in terms of execution costs 

and where the order will be handled, 

but it will also allow the Exchange a 

greater opportunity to compete in the 

current market landscape. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the requirement under Section 6(b)(5) of 

the Act 7 that the rules of an Exchange 

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. 

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 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing rule change 

does not: (1) Significantly affect the 

protection of investors or the public 

interest; (2) impose any significant 

burden on competition; and (3) become 

operative for 30 days after 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

NYSE has requested that the 

Commission waive the 30-day operative 

delay.10 The Commission believes that 

waiver of the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because the Commission has previously 

approved similar order types for other 

exchanges,11 and waiver will allow the 

Exchange to implement this order type 

as soon as its systems are modified to 

recognize it.12 For this reason, the 

Commission designates the proposed 

rule change to be effective and operative 

upon filing with the Commission.13

At any time within 60 days of the 

filing of such 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.14

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–2007–24 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Nancy M. Morris, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2007–24. 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. Copies of the 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–2007–24 and should 

be submitted on or before June 11, 2007. 

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.15

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. E7–9667 Filed 5–18–07; 8:45 am] 

BILLING CODE 8010–01–P 


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