Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 8603 

20 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 SR–NYSE–2009–13 (to be filed on February 

4, 2009). 

5The Display Book® system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

DMM, contains the Book, and provides a 

mechanism to execute and report transactions and 

publish 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 Securities Exchange Act Release No. 58673 

(September 29, 2008), 73 FR 57707 (October 3, 

2008) (SR–NYSE–2008–60 and SR–Amex 2008–62) 

(approving the Merger). 

715 U.S.C. 78f. 

8See Securities Exchange Act Release No. 58705 

(October 1, 2008), 73 FR 58995 (October 8, 2008) 

(SR–Amex 2008–63) (approving the Equities 

Relocation). 

9See Securities Exchange Act Release No. 58705 

(October 1, 2008), 73 FR 58995 (October 8, 2008) 

(SR–Amex 2008–63) (approving the Equities 

Relocation); Securities Exchange Act Release No. 

58833 (October 22, 2008), 73 FR 64642 (October 30, 

2008) (SR–NYSE–2008–106) and Securities 

Exchange Act Release No. 58839 (October 23, 2008), 

73 FR 64645 (October 30, 2008) (SR–NYSEALTR– 

2008–03) (together, approving the Bonds 

Relocation); Securities Exchange Act Release No. 

59022 (November 26, 2008), 73 FR 73683 

(December 3, 2008) (SR–NYSEALTR–2008–10) 

(adopting amendments to NYSE Alternext Equities 

Rules to track changes to corresponding NYSE 

Rules); Securities Exchange Act Release No. 59027 

(November 28, 2008), 73 FR 73681 (December 3, 

2008) (SR–NYSEALTR–2008–11) (adopting 

amendments to Rule 62–NYSE Alternext Equities to 

track changes to corresponding NYSE Rule 62). 

10See Securities Exchange Act Release No. 58184 

(July 17, 2008), 73 FR 42853 (July 23, 2008) (SR– 

NYSE–2008–46). 

11See for example, Securities Exchange Act 

Release No. 58052 (June 27, 2008), 73 FR 38274 

(July 3, 2008) (SR–NYSE–2008–45) (amending 

NYSE Rule 98); see also Securities Exchange Act 

Release No. 58363 (August 14, 2008), 73 FR 49514 

(August 21, 2008) (SR–NYSE–2008–52) (amending 

the NYSE allocation policy). 

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– 

2009–13 and should be submitted on or 

before March 18, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–3980 Filed 2–24–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59416; File No. SR– 

NYSEALTR–2009–09] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Alternext US LLC Amending Certain 

NYSE Alternext Equities Rules To 

Reflect That Designated Market Makers 

(‘‘DMMs’’) on the Exchange No Longer 

Act as Agents for Orders Entered on 

the Exchange 

February 18, 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 February 

4, 2009, NYSE Alternext US LLC (the 

‘‘Exchange’’ or ‘‘NYSE Alternext’’) 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 

certain NYSE Alternext Equities rules to 

reflect that Designated Market Makers 

(‘‘DMMs’’) on the Exchange will no 

longer act as agents for orders entered 

on the Exchange. 

The text of the proposed rule change 

is available at http://www.nyse.com, the 

Exchange, and 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 

Through this filing, the Exchange 

proposes to amend certain NYSE 

Alternext Equities rules to conform 

them with amendments filed by the 

New York Stock Exchange, Inc. [sic] 

LLC4 to reflect that the Designated 

Market Makers (‘‘DMMs’’) no longer 

have agency responsibilities for orders 

entered on the Display Book® (‘‘Display 

Book’’).5

As described more fully in a related 

rule filing,6 NYSE Euronext acquired 

The Amex Membership Corporation 

(‘‘AMC’’) pursuant to an Agreement and 

Plan of Merger, dated January 17, 2008 

(the ‘‘Merger’’). In connection with the 

Merger, the Exchange’s predecessor, the 

American Stock Exchange LLC 

(‘‘Amex’’), a subsidiary of AMC, became 

a subsidiary of NYSE Euronext called 

NYSE Alternext US LLC, and continues 

to operate as a national securities 

exchange registered under Section 6 of 

the Securities Exchange Act of 1934, as 

amended (the ‘‘Act’’).7 The effective 

date of the Merger was October 1, 2008. 

In connection with the Merger, on 

December 1, 2008, the Exchange 

relocated all equities trading conducted 

on the Exchange legacy trading systems 

and facilities located at 86 Trinity Place, 

New York, New York, to trading systems 

and facilities located at 11 Wall Street, 

New York, New York (the ‘‘Equities 

Relocation’’). The Exchange’s equity 

trading systems and facilities at 11 Wall 

Street (the ‘‘NYSE Alternext Trading 

Systems’’) are operated by the NYSE on 

behalf of the Exchange.8

As part of the Equities Relocation, 

NYSE Alternext adopted NYSE Rules 1– 

1004, subject to such changes as 

necessary to apply the Rules to the 

Exchange, as the NYSE Alternext 

Equities Rules to govern trading on the 

NYSE Alternext Trading Systems.9 The 

NYSE Alternext Equities Rules, which 

became operative on December 1, 2008, 

are substantially identical to the current 

NYSE Rules 1–1004 and the Exchange 

continues to update the NYSE Alternext 

Equities Rules as necessary to conform 

with rule changes to corresponding 

NYSE Rules filed by the NYSE. 

Background 

On June 12, 2008, the NYSE filed a set 

of proposed rule changes designed to 

transform its market structure and 

reinforce the NYSE as the premier 

venue for price discovery, liquidity, 

competitive quotes and price 

improvement.10 That and other filings 11

formed the core initiatives submitted by 

the NYSE to reinforce its dynamic and 

competitive marketplace. 

As outlined in SR–NYSE–2008–46 

(the ‘‘New Market Model filing’’), the 

changes to the NYSE’s marketplace 


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8604 Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 

12See NYSE Alternext Rule 104(a)(2)–(5). 

13 In an opening and reopening trade, Display 

Book will verify that all interest that must be 

executed in the opening or reopening can be 

executed at the price chosen by the DMM. If all the 

interest that must be executed in the transaction 

cannot be executed at that price, the Display Book 

will block the execution. In addition, when 

executing blocks (10,000 shares or more or value of 

$200,000 or more), trading out of a gap quote 

situation or an LRP that locks or crossed the market, 

the Display Book may adjust the execution price if 

there is enough interest on the Display Book to 

complete the transaction at a better price. 

14See e-mail from Deanna G. W. Logan, Managing 

Director, NYSE Regulation, Inc., to David Liu, 

Assistant Director, Division of Trading and Markets, 

Commission, dated February 13, 2009 (making 

technical edits) (‘‘February 13th e-mail’’). 

15See February 13th e-mail, supra, note 14. 

16 Id. 

17 Id. 

18 15 U.S.C. 78f(b). 

19 15 U.S.C. 78f(b)(5). 

included the replacement of NYSE 

specialists with DMMs. These changes 

are also applicable to the NYSE 

Alternext market. The function of the 

DMM is substantially different from the 

manner in which Exchange specialists 

functioned vis-a`-vis the relationship 

between order givers and representation 

of these orders in the marketplace. 

DMMs no longer receive copies of 

orders entered in Exchange systems 

prior to the order’s publication to all 

market participants by Display Book. 

Similarly, DMMs do not have a negative 

obligation which would require the 

DMM to yield trading for the DMM 

unit’s proprietary account in order to 

allow public orders to be executed 

against each other. DMMs therefore 

trade on parity with all market 

participants. 

Incoming orders to buy and sell 

submitted to the Exchange are eligible 

for automatic quoting and immediate 

and automatic execution. Instead of the 

DMM, the Display Book is responsible 

for tracking the liquidity available at 

each specified price point. Exchange 

systems automatically review the 

liquidity available on the Display Book 

for execution and then using 

sophisticated execution logic access the 

necessary liquidity to consummate 

trades. Exchange systems report 

executions to the entering parties, 

update the quote and process order 

cancellations. 

Although the DMM no longer receives 

order by order information, he or she is 

still responsible for the execution of 

manual transactions on the Exchange 

including opening and re-opening 

transactions, closing transactions, block 

transactions, gap quote situations and 

when trading reaches LRPs that would 

lock or cross the market.12 DMMs are 

responsible for choosing the price 13 and 

the executions of the orders at that price 

during those specific situations. 

In the current Exchange trading 

environment, the DMM no longer 

functions as an agent for orders on the 

Display Book because the DMM does 

not control order by order information. 

As such the Exchange proposes through 

this filing to amend legacy rules that 

retain the concept of the Exchange 

market maker as agent. 

Proposed Rule Changes 

Certain Exchange rules contain 

language that refers to the DMM 

‘‘holding,’’ ‘‘receiving,’’ and/or 

‘‘accepting’’ orders. These concepts 

were consistent with the role performed 

by former specialist but are inconsistent 

with the role of the DMM. The Exchange 

therefore proposes to amend NYSE 

Alternext Rules 13 (‘‘Definitions of 

Orders’’), 91 (‘‘Taking or Supplying 

Securities Named in Order’’), 123A 

(‘‘Miscellaneous Requirements’’) and 

123B (‘‘Exchange Automated Order 

Routing Systems’’) to remove this 

concept. 

Specifically, the Exchange proposes to 

delete the Supplementary Material .10 

of NYSE Alternext Rule 13 in its 

entirety to remove language that 

provides a DMM must accept any order 

given to him, unless he obtains Floor 

Official approval to decline an order. 

The Exchange further seeks to remove 

the phrase ‘‘the DMM via’’ 14 from 

Supplementary Material .40 of NYSE 

Alternext Rule 91 that governs a DMM 

making a proprietary trade against an 

order, but retain the procedural 

provisions. In Supplementary Material 

to Rule 123A, the Exchange proposes to 

delete .10 (‘‘Limited orders-Market 

orders’’) since it speaks to a member 

giving an order to the DMM. The first 

paragraph of .20 (‘‘Sending orders to 

DMMs’’) in that rule is proposed for 

deletion as it governs members and 

member organizations transmitting 

orders to DMMs. The Exchange further 

proposes to amend .20 of NYSE 

Alternext Rule 123A to: (i) Delete the 

concept of orders being sent to the 

DMMs; and (ii) change the title to 

‘‘Changes in Day Orders’’ which reflects 

the retained material. Similarly, 

Supplementary Material .31 (‘‘Orders 

sent to representatives’’), .32 (‘‘Report 

not received’’), .33 (‘‘Addressed order or 

order handed to DMM’’), .34 

(‘‘Unaddressed order’’), .35 (‘‘Erroneous 

statement’’), .36 (‘‘Legibility of orders’’), 

.37 (‘‘Identity of stock’’), .38 (‘‘Reports, 

written and oral’’) and .39 (‘‘Duplicate 

reports’’) of NYSE Alternext 15 Rule 

123A are proposed for deletion as they 

speak to transmitting or giving orders to 

DMMs, DMMs receiving orders, DMMs 

giving reports on orders, and similar 

provisions. 

In addition, the Exchange proposes to 

delete NYSE Alternext Rule 

123B(b)(2)(B) because it speaks of orders 

received by the DMM through the 

Designated Order Turnaround System 

and to erroneous reports sent by the 

DMM on executions. These functions 

are no longer handled in this manner. 

As previously explained, order 

acceptance and reports of executions are 

handled by Exchange systems. The 

Exchange also proposes to delete NYSE 

Alternext Rule 123B(d) because it 

describes orders being sent to and 

executed by the DMM. 

The Exchange also proposes to amend 

paragraph (2)(A) of Rule 123B(b) to have 

it apply to all members if the member 

makes an erroneous report of the price 

of a transaction, by substituting the 

word ‘‘member’’ for the word ‘‘broker’’ 

in the rule. This will then include 

situations in which a DMM makes an 

erroneous report as to price on a 

transaction. 

NYSE Alternext 16 Rule 92(d)(6) 

(‘‘Limitations on Members’ Trading 

Because of Customers’ Orders’’) is 

further proposed for deletion as it 

restricts DMM proprietary trading 

during the hours the Exchange is closed. 

The restriction was predicated on the 

former specialist system where the 

specialist had knowledge of customer 

orders in his or her possession. The 

restriction is obviated by the fact that 

the DMM no longer ‘‘holds’’ customer 

orders. Nevertheless, as members, 

DMMs will continue to be subject to the 

rule’s general prohibition. Similarly, the 

last sentence of NYSE Alternext Rule 

127(d)(3) (‘‘Block Crosses Outside the 

Prevailing NYSE Quotation’’) is 

proposed for deletion because it also is 

predicated on the DMM retaining stock 

for the DMM’s own account at a price 

at which the DMM ‘‘holds’’ unexecuted 

customer orders.17

The Exchange believes that the 

amendments proposed herein to remove 

legacy rule language that is inconsistent 

with the role of the DMM as approved 

by the Commission in the New Market 

Model filing are necessary to adequately 

reflect the functions performed by the 

DMM. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),18 in general, and furthers 

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

Act,19 in particular, in that it is designed 


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Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 8605 

20 15 U.S.C. 78s(b)(3)(A). 

21 17 CFR 240.19b–4(f)(6). 

22 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. The 

Exchange has satisfied this requirement. 

23See supra note 10. 

24For 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). 

25 15 U.S.C. 78s(b)(3)(C). 

26 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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. The Exchange believes 

the proposed rule changes are consistent 

with these principles in that it amends 

legacy rules to accurately reflect the role 

performed by the Exchange’s market 

maker thus removing impediments to 

and perfecting the mechanism of a free 

and open market. 

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: (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 20 and 

Rule 19b–4(f)(6) thereunder.21

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing.22 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 and designate the proposed rule 

change operative upon filing. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. The 

proposed rule change seeks to remove 

legacy language that is inconsistent with 

the role performed by DMMs as 

approved by the Commission in NYSE’s 

New Market Model filing,23 which also 

applies to DMMs on Alternext. 

Furthermore, it seeks to clarify its rule 

text in order to avoid any undue 

confusion on the part of Exchange 

market participants as it relates to the 

function performed by DMMs. 

Therefore, the Commission designates 

the proposal operative upon filing.24

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.25

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–NYSEALTR–2009–09 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–NYSEALTR–2009–09. 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 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– 

NYSEALTR–2009–09 and should be 

submitted on or before March 18, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–3981 Filed 2–24–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59418; File No. SR– 

NYSEALTR–2009–07] 

Self-Regulatory Organizations; NYSE 

Alternext US LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Provide Instructions 

as to the Payment of Listing Fees in 

Connection With the Listing of 

Additional Securities 

February 18, 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 February 

2, 2009, NYSE Alternext US LLC 

(‘‘NYSE Alternext’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule changes as described in 

Items I and II below, which items have 

been prepared by the Exchange. NYSE 

Alternext filed the proposed rule change 

pursuant to Section 19(b)(3)(A) of the 


pwalker on PROD1PC71 with NOTICES