8600 Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 

5 In approving this proposed rule change, the 

Commission has considered the proposed rule’s 

impact on efficiency, competition, and capital 

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

7 15 U.S.C. 78f(b)(8). 

8See Securities Exchange Act Release Nos. 58088 

(July 2, 2008), 73 FR 39747 (July 10, 2008) (SR– 

CBOE–2008–16); 58224 (July 25, 2008), 73 FR 

44303 (July 30, 2008) (SR–ISE–2007–94); and 59081 

(December 11, 2008), 73 FR 76432 (December 16, 

2008). 

9 15 U.S.C. 78s(b)(2). 

10 15 U.S.C. 78s(b)(2). 

11 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. 

amend Chapter VII, Section 12, which 

currently provides that an Options 

Participant may not execute as principal 

against orders on the limit order book 

they represent as agent unless: (a) 

Agency orders are first exposed on NOM 

for at least three seconds, or (b) the 

Options Participant has been bidding or 

offering on NOM for at least three 

seconds prior to receiving an agency 

order that is executable against such bid 

or offer. In addition, Options 

Participants must expose orders they 

represent as agent for at least three 

seconds before such orders may be 

automatically executed, in whole or in 

part, against orders solicited from 

members and non-member brokerdealers to transact with such orders. 

Under the proposal, these exposure 

periods would be reduced to one 

second. 

III. Discussion and Commission 

Findings 

After carefully reviewing the 

proposed rule change, the Commission 

finds that the proposal is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

exchange.) 5 In particular, the 

Commission finds that the proposed 

rule change is consistent with Section 

6(b)(5) of the Act,6 which, among other 

things, requires that the rules of a 

national securities exchange be 

designed to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating transactions in securities, 

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 Commission 

also finds that the proposed rule change 

is consistent with Section 6(b)(8) of the 

Act,7 which requires that the rules of an 

exchange not impose any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

The Commission believes that, given 

the electronic environment of NASDAQ, 

reducing each of these exposure periods 

from three seconds to one second could 

facilitate the prompt execution of 

orders, while continuing to provide 

market participants with an opportunity 

to compete for exposed bids and offers. 

To substantiate that NASDAQ members 

could receive, process, and 

communicate a response back to 

NASDAQ within one second, NASDAQ 

stated that it distributed a survey to all 

NOM Options Participants. NASDAQ 

stated that the survey results indicated 

that it typically takes not more than 250 

milliseconds for members to receive, 

process, and respond to broadcast 

messages that would be affected by the 

proposal. NASDAQ also stated that all 

eight members that responded to the 

survey indicated that reducing the 

exposure period to one second would 

not impair their ability to participate in 

orders affected by the proposal. Based 

on NASDAQ’s statements regarding the 

survey results, the Commission believes 

that market participants should 

continue to have opportunities to 

compete for exposed bids and offers 

within a one second exposure period. 

Accordingly, the Commission believes 

that it is consistent with the Act for 

NASDAQ to reduce the order handling 

and exposure times discussed herein 

from three seconds to one second. 

The Commission finds good cause to 

approve the proposed rule change prior 

to the thirtieth day after publication for 

comment in the Federal Register. The 

Commission notes that the proposed 

rule change was noticed for a fifteen-day 

comment period, and no comments 

were received. The Commission 

believes that NASDAQ has provided 

reasonable support for its belief that its 

market participants would continue to 

have an opportunity to compete for 

exposed bids and offers if the exposure 

periods were reduced to one second as 

proposed. Finally, the Commission also 

notes that the proposed rule change is 

similar to recently approved proposals 

submitted by the Chicago Board Options 

Exchange, Incorporated, the 

International Securities Exchange, LLC, 

and NASDAQ OMX PHLX, Inc.8

Therefore, the Commission finds good 

cause, consistent with Section 19(b)(2) 

of the Act,9 to approve the proposed 

rule change on an accelerated basis. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,10 that the 

proposed rule change (SR–NASDAQ– 

2009–005), as modified by Amendment 

No. 1, be, and hereby is, approved on an 

accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–4038 Filed 2–24–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59415; File No. SR–NYSE– 

2009–13] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending 

Certain NYSE Rules To Reflect That 

Designated Market Makers 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, 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 

certain NYSE 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 


pwalker on PROD1PC71 with NOTICES
Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 8601 

4The 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. 

5See SR–NYSE Alternext–2009–09 (to be filed 

February 4, 2009). 

6See Securities Exchange Act Release No. 58184 

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

NYSE–2008–46). 

7See 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). 

8See NYSE Rule 104(a)(2)–(5). 

9 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. 

10See 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’’). 

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 rules 

to reflect that the Designated Market 

Makers (‘‘DMMs’’) no longer have 

agency responsibilities for orders 

entered on the NYSE Display Book®

(‘‘Display Book’’).4

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of the NYSE Alternext Exchange 

(formerly the American Stock 

Exchange).5

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.6 That and other filings 7

formed the core initiatives submitted by 

the Exchange to reinforce its dynamic 

and competitive marketplace. 

As outlined in SR–NYSE–2008–46 

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

changes to the Exchange’s marketplace 

included the replacement of Exchange 

specialists with DMMs. The function of 

the DMM is substantially different from 

the manner in which specialists 

functioned vis-a`-vis the relationship 

between Exchange order givers and 

representation of these orders in the 

marketplace. DMMs no longer receive 

copies of orders entered in Exchange 

systems prior to the orders 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 NYSE Display Book is 

responsible for tracking the liquidity 

available at each specified price point. 

NYSE 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.8 DMMs are 

responsible for choosing the price 9 and 

the executions of the orders at that price 

during those specific situations. 

In the current NYSE 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 

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 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’’ 10 from Supplementary Material.40 

of NYSE 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 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 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 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 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 


pwalker on PROD1PC71 with NOTICES
8602 Federal Register / Vol. 74, No. 36 / Wednesday, February 25, 2009 / Notices 

11See February 13th e-mail, supra, note 10. 

12 15 U.S.C. 78f(b). 

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

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(6). 

16 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. 

17See supra note 6. 

18For 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). 

19 15 U.S.C. 78s(b)(3)(C). 

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 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 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.11

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’’),12 in general, and furthers 

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

Act,13 in particular, in that it is 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. 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 14 and 

Rule 19b–4(f)(6) thereunder.15

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing.16 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 the 

New Market Model filing.17

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.18

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.19

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–2009–13 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–2009–13. 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 


pwalker on PROD1PC71 with NOTICES
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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