10638 Federal Register / Vol. 74, No. 46 / Wednesday, March 11, 2009 / Notices 

18See supra note 11. 

19See supra note 9. 

20For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59117 

(December 18, 2008), 73 FR 79964. 

4Amendment No. 1 makes minor, nonsubstantive changes to the description of the 

proposed rule change and to the proposed rule text. 

Because Amendment No. 1 is non-substantive in 

nature, the Commission is not publishing it for 

comment. 

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 NYSE to 

immediately implement a temporary 

measure, until June 30, 2009, to suspend 

its $1.00 price continued listing 

requirement for capital and common 

stock to respond to recent market 

volatility and conditions. The 

Commission notes that this will provide 

certain companies with immediate relief 

from receiving a non-compliance or 

delisting notification, or from being 

delisted, as a result of the current 

market conditions. The Commission 

notes that this action is temporary in 

nature, and that following the 

suspension, companies currently in the 

compliance period will resume at the 

same stage and receive the remaining 

balance of its compliance period if they 

remain non-compliant with these 

standards. This will ensure that the 

temporary suspension addresses the 

concerns to companies and investors 

caused by the current market 

conditions, and that may result in a 

company’s securities becoming noncompliant with the $1.00 price 

requirement, or unable to cure such a 

deficiency, due to these market 

conditions. The Commission also notes 

that the proposed rule change is 

substantially similar to a recent Nasdaq 

filing to suspend its bid price test, and 

thus, raises no new regulatory issues.18

In addition, the Commission believes 

that waiving the operative delay is 

consistent with the protection of 

investors and the public interest 

because it will allow NYSE to 

immediately conform the end dates of 

the suspension of the $1.00 price 

requirement and the temporary lowering 

of the average market capitalization 

requirement of Section 802.01B of the 

Manual,19 preventing any confusion 

over the end dates of these temporary 

modifications to the continued listing 

standards due to market conditions. For 

these reasons, the Commission 

designates that the proposed rule 

change become operative immediately 

upon filing.20

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

the 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 Exchange 

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–2009–21 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–2009–21. 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 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– 

2009–21 and should be submitted on or 

before April 1, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5209 Filed 3–10–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59522; File No. SR– 

NYSEArca–2008–134] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Order Approving Proposed 

Rule Change, as Modified by 

Amendment No. 1 Thereto, To Amend 

Rule 10.16, Sanctioning Guidelines 

March 5, 2009. 

I. Introduction 

On December 11, 2008, NYSE Arca, 

Inc. (‘‘NYSE Arca’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to amend NYSE Arca Rule 10.16 

(‘‘Rule 10.16’’ or ‘‘Sanctioning 

Guidelines’’). The proposed rule change 

was published for comment in the 

Federal Register on December 30, 

2008.3 The Commission received no 

comments on the proposed rule change. 

On February 13, 2009, NYSE Arca filed 

Amendment No. 1 to the proposed rule 

change.4 This order approves the 

proposed rule change, as amended. 

II. Description 

Rule 10.16 sets forth (1) general 

principles that apply to all 

determinations of sanctions in options 

market-related disciplinary proceedings, 

(2) a list of principal considerations to 

use to determine sanctions, and (3) a set 

of suggested fines and non-monetary 

penalties for violations of specific 

options rules of the Exchange (‘‘Specific 

Sanctioning Guidelines). The 

Sanctioning Guidelines are used by 

various Exchange bodies (hereafter 

‘‘adjudicators’’) to help determine 

appropriate remedial sanctions in 

disciplinary proceedings. The Exchange 

proposes to make the following 


rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 74, No. 46 / Wednesday, March 11, 2009 / Notices 10639 

5The Commission notes that Rule 10.16 is 

applicable to the options market-related activity of 

NYSE Arca, and therefore by its terms is limited to 

options market-related disciplinary proceedings of 

NYSE Arca. 

6See proposed NYSE Arca Rules 10.16(a) and 

(d)(2)–(3), (8) and (12). 

7See proposed NYSE Arca Rules 10.16(d)(2)–(3), 

(8) and (12). 

8See proposed NYSE Arca Rule 10.16(b)(2). 

9See proposed NYSE Arca Rule 10.16(b)(5). 

10See NYSE Arca Rule 10.16(e) (Specific 

Sanctioning Guidelines for Options Order Handling 

Rules). 

11See NYSE Arca Rule 10.16(f) (Specific 

Sanctioning Guidelines for Recordkeeping and 

Financial Requirements Rules.) 

12See proposed NYSE Arca Rule 10.16(e)–(f). 

13See proposed NYSE Arca Rule 10.16(e)–(f). 

14See NYSE Arca Rule 10.12. 

15See NYSE Arca Rule 9 (Conducting Business 

with the Public). This rule generally consists of 

several provisions intended to protect public 

customers and their accounts. 

16See NYSE Arca Rule 11 (Business Conduct). 

This rule generally consists of several provisions 

intended to prevent actions that could be deemed 

detrimental to the welfare and protection of 

investors, or conduct or proceedings inconsistent 

with just and equitable principles of trade. 

amendments to the Sanctioning 

Guidelines: 

A. General Principles 

The proposed rule change clarifies 

that the Sanctioning Guidelines are 

intended to apply to all persons using 

the facilities of the Exchange.5

Therefore, the proposed rule change 

amends the Sanctioning Guidelines to 

replace the terms ‘‘employee’’ and 

‘‘approved person’’ with the broader 

term ‘‘Associated sPerson,’’ which 

includes Allied Persons, Affiliated 

Persons, Approved Persons and other 

employees of an OTP Firm.6 The 

Exchange also proposes changes to 

clarify that an Associated Person may be 

employed by an OTP Holder or OTP 

Firm.7

The Exchange proposes to amend the 

Sanctioning Guidelines to make clear 

that irrelevant incidents of misconduct 

should not be considered by 

adjudicators in determining sanctions,8

and to allow adjudicators to use a 

‘‘reasonable calculation of loss’’ for the 

purposes of determining restitution 

when actual loss cannot be calculated.9

Because it is not always possible for 

adjudicators to determine actual loss, 

the Exchange believes that the 

Sanctioning Guidelines should provide 

adjudicators an alternative method for 

calculating restitution. 

B. Specific Sanctioning Guidelines 

Rule 10.16 currently contains 

‘‘Specific Sanctioning Guidelines’’ for 

certain enumerated options order 

handling rules 10 and rules relating to 

recordkeeping and financial 

requirements.11 These Specific 

Sanctioning Guidelines list principal 

considerations that adjudicators should 

weigh when determining sanctions for 

these categories of rules; provide a 

three-tier monetary fine system based on 

the number of disciplinary actions 

against the named party; and provide for 

non-monetary penalties (e.g., 

suspensions and expulsions) for named 

parties in disciplinary proceedings. The 

proposed rule change amends the 

Specific Sanctioning Guidelines in 

Rules 10.16(e)–(f) to require that 

adjudicators consider the general 

principal considerations applicable to 

all violations, and to consider whether 

the disciplinary action is the first or 

subsequent disciplinary action taken 

against the OTP Holder, OTP Firm or 

Associated Person.12 The Exchange 

notes that recent acts of similar 

misconduct may be considered 

aggravating factors. 

The proposed rule change also 

replaces the three tiers of suggested 

fines set out in the Specific Sanctioning 

Guidelines with a single range of 

suggested fines. The Exchange believes 

that a single range of suggested fines 

will provide adjudicators greater 

latitude than they presently have in 

applying sanctions in a fair and 

consistent manner. The proposed rule 

change further amends the fine levels to 

increase the minimum and maximum 

fines that adjudicators may impose in 

disciplinary proceedings.13 The 

Exchange notes that under its Minor 

Rule Violation Plan (‘‘MRVP’’), the 

Exchange is authorized to impose fines 

of up to $5,000 for minor rule violations 

in lieu of initiating formal disciplinary 

proceedings.14 The Exchange 

represented that, in light of the fines 

permissible under the Exchange’s 

MRVP, the current minimum monetary 

penalty levels in Rule 10.16 (which 

range between $1,000 and $5,000) are 

too low, given the serious nature of the 

violations. 

Likewise, given the serious nature of 

the violations covered by the 

Sanctioning Guidelines, the Exchange 

believes the current maximum monetary 

penalty levels are also too restrictive. 

Therefore, in order to act as an effective 

deterrent against future violations, 

while serving as a just penalty for those 

who commit these violations, the 

Exchange proposes to increase the 

minimum monetary penalty to $10,000 

and the maximum monetary penalty to 

$100,000. 

The proposed rule change also 

amends the non-monetary penalty 

provision (providing for suspension, 

expulsion or other sanction for a named 

party in a disciplinary proceeding) to 

increase the suggested maximum term 

of suspensions from two years to five 

years. Under the current Sanctioning 

Guidelines, an adjudicator may suspend 

a named party in a formal disciplinary 

proceeding for up to two years or expel 

or permanently bar a named party for 

egregious rule violations. The Exchange 

believes that there are certain violations 

that could justify a suspension of more 

than two years, but do not justify an 

expulsion or a permanent bar. 

Therefore, the Exchange believes that 

increasing the maximum term of 

suspensions from two to five years will 

afford adjudicators greater flexibility in 

determining appropriate non-monetary 

sanctions. 

The proposed rule change also 

amends Rule 10.16 to include Specific 

Sanctioning Guidelines for two 

additional rules. Proposed Rule 10.16(g) 

will set forth Specific Sanctioning 

Guidelines for violations of NYSE Arca 

Rule 9 (Conducting Business with the 

Public),15 and proposed Rule 10.16(h) 

will set forth guidelines for violations of 

NYSE Arca Rule 11 (Business 

Conduct).16 While the proposed 

principal considerations and nonmonetary sanctions for these new 

Specific Sanctioning Guidelines are 

substantially similar to those contained 

in amended Rules 10.16(e)–(f), the 

Exchange proposes a different range of 

suggested fines for these two rules. The 

Exchange represents that violations of 

NYSE Arca Rules 9 and 11 are 

extremely serious matters. Therefore, 

the Exchange believes that the range of 

fines contained in Rules 10.16(g)–(h) 

should be higher than the range of fines 

contained in Rules 10.16(e)–(f). 

Accordingly, the proposed rule change 

provides that the suggested range of 

fines in Rules 10.16(g)–(h) will be from 

$15,000 to $150,000. The Exchange 

believes that these fines are appropriate 

given the serious nature of Rule 

10.16(g)–(h) related offenses. The 

Exchange believes that these fines will 

act as an effective deterrent against 

future violations and serve as a just 

penalty for those that commit these 

violations. 

C. Miscellaneous Changes 

The proposed rule change makes 

additional amendments to the 

Sanctioning Guidelines as follows: 

Rule 10.16(e)(2) sets forth Specific 

Sanctioning Guidelines for violations of 

the priority rules and obligations of 

market makers. The proposed rule 


rwilkins on PROD1PC63 with NOTICES
10640 Federal Register / Vol. 74, No. 46 / Wednesday, March 11, 2009 / Notices 

17See NYSE Arca Rule 6.37A (Obligations of 

Market Makers—OX). 

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

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

20 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). 

21 15 U.S.C. 78f(b)(6). 

22 15 U.S.C. 78s(b)(2). 

23 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. 

4The Commission notes that while provided in 

Exhibit 5 to the filing, the text of the proposed rule 

change is not attached to this notice but is available 

at the Commission’s Public Reference Room and at 

http://www.nyse.com. 

5The MPL order is an undisplayed limit order 

that offers price improvement to customers by 

executing at the mid-point of the National Best Bid 

and Offer (NBBO). MPL orders will generally 

interact with all order types including contra MPLs, 

but excluding cross or directed orders. 

change adds NYSE Arca Rule 6.37A 17 to 

Rule 10.16(e)(2) because Rule 6.37A also 

deals with the obligations of market 

makers, and thus is appropriately 

included in this Specific Sanctioning 

Guideline. 

The proposed rule change eliminates 

references to floor official training for 

OTP Holders in Rule 10.16(b)(7) because 

the Exchange does not employ OTP 

Holders as floor officials. 

The proposal also corrects spelling 

and typographical errors and makes 

other minor, non-substantive changes 

throughout the Sanctions Guidelines 

such as the renumbering of certain 

provisions and the elimination of 

obsolete ‘‘Commentary’’ and examples 

of regulatory incidents that are not 

relevant to determinations of sanctions. 

III. Discussion and Commission’s 

Findings 

The Commission has carefully 

reviewed the proposed rule change and 

finds that it is consistent with the 

requirements of Section 6(b) 18 of the 

Act, and in particular, with Section 

6(b)(5) 19 of the Act, which requires, 

among other things, that the Exchange’s 

rules be 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, and, in general, to protect 

investors and the public interest.20

The Commission also finds that the 

proposal is consistent with Section 

6(b)(6) 21 of the Act, which requires that 

the rules of the exchange provide that 

its members and persons associated 

with its members shall be appropriately 

disciplined for violations of the Act and 

the rules and regulations thereunder. 

The Exchange’s proposal amends the 

Sanctioning Guidelines to provide more 

flexibility for adjudicators in crafting 

fair and appropriate monetary and nonmonetary sanctions for violations of 

certain enumerated Exchange rules, and 

adds categories of rules that will be 

subject to the Sanctioning Guidelines. 

The proposed rule change also clarifies 

that the guidelines apply to all persons 

using the option-related facilities of the 

Exchange, and makes other changes that 

should strengthen the Exchange’s 

disciplinary program. Accordingly, the 

Commission finds that the proposed 

rule change is consistent with the Act. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,22 that the 

proposed rule change (SR–NYSEArca– 

2008–134) be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5202 Filed 3–10–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59521; File No. SR– 

NYSEArca–2009–15] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Rule Change by NYSE Arca, Inc. 

Implementing Fee Change 

March 5, 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 

27, 2009, NYSE Arca, Inc. (‘‘NYSE 

Arca’’ or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III 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 the 

section of its Schedule of Fees and 

Charges for Exchange Services (the 

‘‘Schedule’’). While changes to the 

Schedule pursuant to this proposal will 

be effective upon filing, the changes will 

become operative on March 2, 2009. The 

amended section of the Schedule is 

included as Exhibit 5 hereto.4 A copy of 

this filing is available on the Exchange’s 

Web site at http://www.nyse.com, at the 

Exchange’s principal office 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 

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 make 

multiple changes to its Schedule that 

will take effect on March 2, 2009. A 

more detailed description of the 

proposed changes follows. 

Tier 1 Rate Changes 

Tier 1 rates are applied to customers 

with an average daily share volume per 

month greater than 90 million shares in 

Tape A, B and C, including adding 

liquidity of more than 45 million shares. 

In Tape A and Tape C securities the 

Exchange will continue its inverted 

pricing structure, but proposes a new 

rebate of $0.0029 for orders that add 

liquidity and new fee of $0.0028 for 

orders that remove liquidity. Previously 

in Tape A and Tape C securities the 

Exchange paid a rebate of $0.0028 for 

orders that added liquidity and charged 

a fee of $0.0027 for orders that removed 

liquidity. 

Mid-Point Passive Liquidity Orders 

The Exchange proposes a rebate of 

$0.0020 per share for resting Mid-point 

Passive Liquidity (‘‘MPL’’) Orders 5 in 

Tape A and Tape C securities for all 

customers. Previously the Exchange 

paid a rebate of $0.0015 for resting MPL 

orders in Tape A and Tape C securities. 

The Exchange proposes a rebate of 

$0.0010 per share for resting MPL orders 


rwilkins on PROD1PC63 with NOTICES