10334 Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 

17 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. 

investors and the public interest to 

ensure 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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which NYSE consents, the 

Commission will: 

(A) By order approve such proposed 

rule change; or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–2009–18 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–2009–18. 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 offices 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–2009–18 and should 

be submitted on or before March 31, 

2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–4964 Filed 3–9–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59488; File No. SR– 

NYSEALTR–2009–15] 

Self-Regulatory Organizations; NYSE 

Alternext US LLC; Notice of Filing of 

Proposed Rule Change, as Modified by 

Amendment No. 1, Amending Rule 

123C To Provide the Exchange With 

the Ability To Temporarily Suspend 

Certain Exchange Requirements 

Relating to the Closing of Securities at 

the Exchange 

March 3, 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 

20, 2009, NYSE Alternext US LLC 

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

with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. On March 2, 

2009, the Exchange filed Amendment 

No. 1 to the proposed rule change. 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 

Rule 123C to provide the Exchange with 

the ability to temporarily suspend 

certain Exchange requirements relating 

to the closing of securities at 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 

The Exchange is proposing to amend 

Rule 123C—NYSE Alternext Equities to 

provide the Exchange with the ability to 

temporarily suspend certain rule 

requirements at the close when extreme 

order imbalances may cause significant 

dislocation to the closing price. The 

amendments proposed for Rule 123C— 

NYSE Alternext Equities are similar in 

substance [to] current Rule 48 extreme 

market volatility condition at the close 

provisions. With this rule filing, the 

Exchange proposes to delete those 

provisions from Rule 48 and add them 

in modified form to Rule 123C. The 

Exchange also proposes to amend Rule 

48(c)(2) to conform the rule to the actual 

Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 10335 

4The purpose of the proposed rule changes is to 

amend Rules 48 and 123C—NYSE Alternext 

Equities to conform with proposed amendments to 

corresponding NYSE Rules 48 and 123C submitted 

in a companion filing by the New York Stock 

Exchange LLC (‘‘NYSE’’). See SR–NYSE–2009–18, 

formally submitted February 19, 2009. 

5See 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). 

6 15 U.S.C. 78f. 

7See Securities Exchange Act Release No. 58705 

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

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

Relocation). 

8See Securities Exchange Act Release No. 58705 

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

(SR–Amex 2008–63); Securities Exchange Act 

Release No. 58833 (October 22, 2008), 73 FR 64642 

(October 30, 2008) (SR–NYSE–2008–106); 

Securities Exchange Act Release No. 58839 (October 

23, 2008), 73 FR 64645 (October 30, 2008) (SR– 

NYSEALTR–2008–03); Securities Exchange Act 

Release No. 59022 (November 26, 2008), 73 FR 

73683 (December 3, 2008) (SR–NYSEALTR–2008– 

10); and Securities Exchange Act Release No. 59027 

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

2008) (SR–NYSEALTR–2008–11). 9See Rule 48.10. 

10See Rule 48(b)(2)(A)(i). 

11See Rule 48(b)(2)(A)(ii). 

12See Rule 48(b)(2)(A)(iv). 

practice of how the Exchange notifies 

the Commission staff when a Rule 48 

condition has been declared.4

Background 

As described more fully in a related 

rule filing,5 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 and was 

renamed NYSE Alternext U.S. LLC 

(‘‘NYSE Alternext’’ or the ‘‘Exchange’’), 

and continues to operate as a national 

securities exchange registered under 

Section 6 of the Securities Exchange Act 

of 1934, as amended (the ‘‘Act’’).6 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.7

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.8 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. 

Current Rule 48—NYSE Alternext 

Equities 

Rule 48—NYSE Alternext Equities 

provides the Exchange with the ability 

to suspend certain rules at the close 

when extremely high market volatility 

could negatively affect the ability to 

ensure a fair and orderly close. This 

provision of Rule 48 is temporary and 

will end on March 27, 2009.9

Rule 48 now includes the close of 

trading as a time when a qualified 

Exchange officer would be permitted to 

declare an extreme market volatility 

condition. In such event, the Exchange 

could temporarily suspend Rules 52 

(Hours of Operation) and 123C(1) and 

(2) (Market on the Close Policy and 

Expiration Policy), provided that certain 

requirements are met. 

To enable a qualified Exchange officer 

to declare a Rule 48 condition at the 

close, Rule 48(c) includes that a 

qualified Exchange officer may consider 

the volatility during that day’s trading 

session and evidence of significant 

order imbalances across the market at 

the close for purposes of determining 

whether to declare an extreme market 

volatility condition at the close. Under 

Rule 48, an extreme market volatility 

condition at the close is a separate event 

and must be considered in light of the 

facts and circumstances leading to the 

close. A Rule 48 condition at the open 

of trading does not extend to the close; 

a qualified Exchange officer needs to 

make an independent determination to 

invoke Rule 48 at the close regardless of 

whether Rule 48 was invoked at the 

open. Such a Rule 48 condition at the 

close must be declared by a qualified 

Exchange officer before the scheduled 

close of trading. 

Once an extreme market volatility 

condition at the close has been declared 

Floor wide, under Rule 48(b)(2)(A), the 

Exchange may temporarily suspend 

Rule 52 on a security-by-security basis 

so that interest can be solicited and 

entered into Exchange systems to offset 

an imbalance in a security that may be 

present after the scheduled close of 

trading. During an extreme market 

volatility condition, interest may be 

solicited—including interest that may 

not have been present prior to 4 p.m.— 

to offset any imbalance that may exist as 

of 4 p.m. (or earlier, in the case of an 

earlier scheduled close).10 If offsetting 

interest is received in response to such 

solicitation, rather than have the DMM 

represent such offsetting interest in the 

close pursuant to Rule 902, such interest 

could be entered by the DMM directly 

into Exchange systems on behalf of the 

member or member organization 

representing such interest. Because 

Exchange systems do not allow for the 

electronic entry of orders after 4 p.m., 

such interest must be represented 

manually by a Floor broker in the 

closing auction process and entered into 

Exchange systems by the DMM by no 

later than 4 p.m.11 The entry of any 

orders after 4 p.m. pursuant to the rule 

must be under the supervision and 

approval of a Floor Governor.12

To ensure a complete audit trail, any 

offsetting interest entered after 4 p.m. 

during an extreme market volatility 

condition must also be entered into the 

Front End Systemic Capture database 

(‘‘FESC’’), as required by Rule 123— 

NYSE Alternext Equities. Because such 

interest may not have been known until 

after 4 p.m., under Rule 48(b)(2)(A)(iii), 

a Floor broker may represent such 

offsetting interest after 4 p.m. without 

first entering the details of the order into 

FESC, as required by Rule 123, so long 

as such orders are entered into FESC on 

an ‘‘as of’’ basis immediately following 

execution of the order. 

During an extreme market volatility 

condition at the close, the Exchange also 

has the ability to temporarily suspend, 

on a security-by-security basis, the Rule 

123C(1) and (2) requirements that MOC 

and LOC orders that are legitimate 

errors cannot be cancelled or reduced 

after 3:50 p.m. Under Rule 48(b)(2)(B), 

only an erroneous MOC or LOC that 

would cause significant closing price 

dislocation for a particular security 

could be considered for cancellation. In 

other words, an MOC or LOC order that 

is as a result of a legitimate error that 

would have no impact on the closing 

price could not take advantage of the 

proposed temporary suspension, even in 

an extreme market volatility condition. 

If it is determined that such an MOC/ 

LOC legitimate error would significantly 

dislocate the close, such order can be 

cancelled or reduced at any time up 

until that particular security has closed. 

To further ensure that the ability to 

cancel an MOC or LOC order after 3:50 

is not abused, under Rule 

48(b)(2)(B)(iii), such an order can be 

cancelled or reduced only with the 

supervision and approval of both an 

Executive Floor Governor and a 

10336 Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 

13See proposed Rule 123C(8)(c). 

14See proposed Rule 123C(8)(a). 

15See Rules 902(a)(ii)(B) and 903(d)(ii). 

16 Interest is solicited from off-Floor participants 

via NYSE Trader Update Messages, which is an 

NYSE product with over 2,000 subscribers that 

provides a wide range of up-to-the minute notices 

of particular interest to the professional trading 

community about both NYSE and NYSE Alternext 

Equities. NYSE Trader Updates provide messages 

both via email and on an RSS subscription basis. 

qualified Exchange officer. In the event 

an Executive Floor Governor is not 

available, a Floor Governor’s approval 

must be obtained. 

Proposed Amendments to Rule 123C— 

NYSE Alternext Equities 

The Exchange believes that the 

temporary provisions to Rule 48 provide 

the Exchange with invaluable tools to 

ensure a fair and orderly close during 

extreme situations. However, the 

Exchange does not believe that a Floorwide condition needs to be present in 

order to warrant the use of these tools. 

The Exchange therefore proposes to 

adopt the amendments to Rule 48 on a 

permanent basis by deleting those 

provisions from Rule 48 and moving 

them to Rule 123C—NYSE Alternext 

Equities. As part of the amendments to 

Rule 123C, the Exchange further 

proposes modifying the terms of the 

temporary suspensions by permitting 

the Exchange to invoke such relief on a 

security-by-security basis without first 

declaring a Floor-wide extreme market 

volatility condition and codifying 

certain practices for the entry of orders 

after 4 p.m. 

A. Relocating Temporary Suspensions 

to Rule 123C 

As noted above, the Rule 48 extreme 

market volatility at the close conditions 

are temporary and will end on March 

27, 2009. Under current Rule 48, the 

Exchange must first declare a Floorwide extreme market volatility 

condition before it can consider, on a 

security-by-security basis, whether to 

temporarily suspend either Rule 52 or 

Rule 123C(1) or (2). Because the 

temporary suspensions are already 

granted on a security-by-security basis, 

the Exchange does not believe that going 

forward it needs to first declare a Floorwide event in order to provide relief on 

an individual security basis. Indeed, the 

need for declaring a Floor-wide extreme 

market volatility condition before 4 p.m. 

could hamper the ability of the 

Exchange to invoke the temporary 

suspensions when they are needed 

most. 

For example, during normal market 

conditions that would not otherwise 

warrant a Rule 48 condition at the close, 

Exchange systems may receive a large 

market order in a security at 3:59:59 

p.m. Such a large order entered so near 

to the close could cause the type of 

extreme imbalance that would merit a 

temporary suspension of Rule 52, yet 

such relief would be unavailable 

because overall market conditions did 

not require a Rule 48 condition. The 

Exchange therefore believes that the 

ability to temporarily suspend rules at 

the close should be part of Rule 123C— 

NYSE Alternext Equities, which governs 

the closing process at the Exchange, and 

be available on a security-by-security 

basis, even after 4 p.m.13 The Exchange 

therefore proposes deleting the extreme 

market volatility at the close condition 

from Rule 48. 

In deleting the provisions of Rule 48 

condition at the close and moving those 

temporary suspensions to Rule 123C, 

the Exchange proposes certain 

modifications to the application of the 

temporary suspensions. These 

modifications are designed to provide 

clarity of how this tool should be used. 

Namely, the ability to temporarily 

suspend Exchange rules at the close 

should be used sparingly and only in 

extreme situations. 

The Exchange therefore proposes to 

qualify that temporary suspensions 

under proposed Rule 123C(8) are 

intended to be used to prevent a closing 

price dislocation that may result from 

an order entered into Exchange systems, 

or represented to a DMM orally at or 

near the close, that may result in an 

extreme order imbalance at or near the 

close.14 In such case, as with Rule 48, 

the rules that may be suspended are 

Rule 52—NYSE Alternext Equities 

(Hours of Operation) and Rules 123C(1) 

and (2)—NYSE Alternext Equities 

(Market on the Close Policy and 

Expiration Policy). 

B. Temporary Suspension of Rule 52— 

NYSE Alternext Equities 

As with Rule 48, the Exchange 

proposes to provide for the ability to 

temporarily suspend Rule 52 for the sole 

purpose of allowing the entry of orders 

after 4 p.m. to offset an extreme order 

imbalance at the close. As proposed, the 

process replaces the more cumbersome 

Rule 902 process, whereby the DMM 

represents interest on behalf of a Floor 

broker in the close on a riskless basis 

and then enters a coupled order in 

Crossing Session I to liquidate the DMM 

position taken on behalf of the Floor 

broker.15

With respect to the temporary 

suspension of Rule 52, the Exchange 

proposes to adopt without change the 

language of Rule 48(b)(2)(A)(i) and (iii) 

(proposed as Rule 123C(8)(a)(1)(i) and 

(v)). These provisions concern, 

respectively, the purpose of soliciting 

orders after 4 p.m. and the use of the 

FESC system on an ‘‘as of’’ basis 

following execution of an order. 

The Exchange proposes to codify as 

Rule 123C(8)(a)(1)(ii) that when 

soliciting orders to offset an imbalance 

in a security that may exist after 4 p.m., 

such interest will be solicited from offFloor participants directly and via their 

Floor broker representatives.16 Such 

solicitation requests shall be transmitted 

electronically both off-Floor and onFloor and shall include, at a minimum, 

information about the security symbol, 

the imbalance amount and side, the last 

sale price, and an order acceptance cutoff time. 

As proposed, the order acceptance 

cut-off time included in the solicitation 

request would be a time period 

designated by the Exchange. Because 

the goal is to close Exchange-listed 

securities as close to the closing bell as 

possible, such time period will 

generally be no longer than five 

minutes. As in Rule 48(b)(2)(A)(ii), in no 

event shall the order acceptance cut-off 

time be later than 4:30 p.m. (or 30 

minutes after the scheduled close in the 

case of an earlier scheduled close). The 

Exchange includes this 4:30 p.m. time 

period as an outside limit and it is not 

intended to provide a 30-minute 

window within which to receive 

offsetting interest, or that the Exchange 

seeks to close securities at 4:30 p.m. 

Rather, as proposed, if a solicitation 

request is transmitted at 4:02 p.m., the 

Exchange generally would include an 

order acceptance cut-off time of five 

minutes, requiring all offsetting interest 

to be received by 4:07 p.m. so that the 

DMM can close the security on or about 

4:07 p.m. In the rare circumstance that 

a solicitation request is not transmitted 

until 4:27 p.m., the order acceptance 

cut-off time would be 4:30 p.m., and not 

a five-minute period. The 4:30 p.m. end 

time is therefore included to ensure that 

this proposed temporary suspension of 

Rule 52 would not be used to extend the 

close indefinitely. 

The Exchange also proposes adding 

conditions on the type of order that may 

be entered in response to such a 

solicitation request. As proposed in 

Rule 123C(8)(a)(1)(iii), any offsetting 

interest received in response to a 

solicitation request must be a limit order 

priced no worse than the last sale and 

irrevocable. Therefore, if there is a buy 

imbalance, the offsetting interest must 

be sell orders priced no lower than the 

last sale price, or if there is a sell 

imbalance, the offsetting interest must 

be buy orders priced no higher than the 

Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 10337 

17The Exchange notes that all MOC and 

marketable LOC orders entered before 4:00 p.m. that 

otherwise would have participated in the close will 

continue to participate in the close. Because the 

MOC/LOC imbalance dictates the closing price (see 

Rule 123C(3)), any additional interest solicited after 

4:00 p.m. under proposed Rule 123C(8)(a)(1) is 

simply to ensure that the existing imbalance of 

MOC and marketable LOC orders can be filled at a 

price that does not cause a significant price 

dislocation from the last sale price. 18See SEC Release No. 58845 (Oct. 24, 2008), 73 

FR 64379 (Oct. 29, 2008) (SR-NYSE–2008–46). 

last sale price. The Exchange believes 

that these conditions are necessary to 

ensure that the offsetting interest 

received is simply that: interest that is 

intended to offset the existing imbalance 

to ensure that the closing price is not 

too far dislocated from the last sale. The 

Exchange does not believe that this 

process should be used to re-open the 

auction market or to permit the 

imbalance to swing in the opposite 

direction. 

The Exchange also proposes to add to 

the rule certain parameters regarding the 

timing of the closing of a security when 

such offsetting interest is solicited. As 

proposed in Rule 123C(8)(a)(1)(iv), in 

such circumstances, the DMM should 

close the security the earlier of the order 

acceptance cut-off time or if the 

imbalance is paired off at or reasonably 

contiguous to the last sale price. The 

Exchange believes that this provision 

will enable the DMM to arrange for a 

fair and orderly close that is as close to 

4 p.m. as possible. For example, if the 

Exchange receives a limited response to 

the solicitation request, the DMM would 

have up to the order acceptance cut-off 

time for orders to be entered. If, 

however, the DMM receives sufficient 

interest before the order acceptance cutoff time to close the security either at 

the last sale price, or at a reasonably 

contiguous price to the last sale price, 

the DMM could close the security 

earlier. As proposed, a reasonably 

contiguous price refers to a price point 

that is within cents of the last sale price, 

and would be a price point that during 

a regular closing auction would not be 

considered a dislocating closing price as 

compared to the last sale price. As 

discussed in more detail below in 

subsection D, such closings would be 

subject to approval of either an 

Executive Floor Governor or qualified 

NYSE Euronext staff employee and 

supervision of a qualified Exchange 

Officer, as defined in Rule 48(d). 

The Exchange believes that the 

parameters on when to close the 

security are necessary to ensure that 

securities trading at the Exchange close 

as near to 4 p.m. as possible, 

notwithstanding the fact that the 

Exchange seeks additional offsetting 

interest after 4 p.m. In either case, the 

Exchange proposes that any offsetting 

interest entered after 4 p.m., but before 

the DMM closes the security, would 

trade on parity.17 As discussed in 

greater detail in the NYSE’s proposal to 

adopt the Next Generation Market 

Model,18 under the Exchange’s parity 

model, Exchange systems will divide 

the size of the executing order by the 

number of participants. The DMM and 

each Floor broker are each considered a 

single participant. A Floor broker that 

represents multiple orders gets parity 

for the aggregate of orders. With parity, 

the total number of shares to be 

allocated to each participant will be 

distributed equally among the 

participants where possible and 

executions will be allocated in round 

lots. In the event the number of shares 

to be executed at the price point is 

insufficient to allocate round lots to all 

the participants eligible to receive an 

execution at the price point, the 

Exchange systems will create an 

allocation wheel of the eligible 

participants at the price point and the 

available shares will be distributed to 

the participants in turn. If the DMM 

closes the security before the order 

acceptance cut-off time, any interest 

received before closing the security 

would trade on parity with other 

interest, including the DMM’s interest at 

the close. 

The Exchange also proposes to 

maintain, as in Rule 48(b)(2)(A)(ii), that 

any offsetting interest must be 

represented by a Floor broker. Exchange 

systems do not have the capability to 

receive electronic interest after 4 p.m. 

As with any technology, it would be 

possible to reconfigure Exchange 

systems to accept orders electronically 

after 4 p.m. However, such technology 

changes would be costly and would 

divert resources away from other 

necessary technology changes that are 

already scheduled. Therefore, even if 

the Exchange could make such 

technology changes, they likely could 

not be implemented until mid to late 

2009, and at great cost. 

The benefit, however, to 

implementing such a technology change 

would be limited. The temporary 

suspension of Rule 52 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 the 

DMM could not close the security 

without significantly dislocating the 

price of the security. The Exchange 

notes that this has been a period of 

historic market volatility; the Exchange 

therefore expects that in times of calmer 

markets, the relief requested would be 

used in even rarer circumstances. 

The Exchange further notes that 

requiring Floor brokers to represent 

such offsetting interest does not unfairly 

discriminate against any market 

participants. The requirement to use a 

Floor broker, who would be acting only 

as an agent, does not deny anyone 

access to trading at the Exchange. It 

simply requires an agent as 

intermediary. Indeed, during the 

inherently manual process of closing a 

security, using a Floor broker to 

represent offsetting interest will provide 

customers with the most up-to-date 

information about the closing process in 

such a scenario. 

Moreover, the imbalance that would 

warrant such a temporary suspension 

would likely be of such a size that the 

type of customers that would be able to 

meaningfully and timely respond to 

such a solicitation request are 

sophisticated market participants who 

likely already have, or could easily 

arrange for, a relationship with a Floor 

broker to represent orders on their 

behalf. Such sophisticated participants 

have the wherewithal to enter into 

arrangements with Floor brokers that are 

financially competitive with entering 

orders directly into Exchange systems, 

e.g., via reduced commissions or pass 

through of Floor broker rebates. 

The Exchange therefore believes that 

the time and cost that would be 

necessary to reconfigure Exchange 

systems to electronically accept orders 

after 4 p.m. for this limited purpose far 

outweighs any benefit that may accrue 

from such technology changes. In any 

event, the Exchange believes that more 

information is necessary before the 

Exchange undertakes to implement any 

such technology change. The Exchange 

therefore proposes that six months after 

the approval of this proposed rule 

change, the Exchange will provide the 

Commission with information regarding 

how many times a Rule 52 temporary 

suspension under proposed Rule 

123C(8)(a)(1) has been invoked. At that 

time, both the Exchange and the 

Commission can make a more informed 

decision of whether the benefit in 

accepting orders electronically after 4 

p.m. outweighs the costs associated 

with making such changes. To provide 

both the Exchange and the Commission 

with time to evaluate the proposed rule, 

the Exchange proposes that Rule 

123C(8)(a)(1) be approved on a Pilot 

basis to end six months after the 

approval date of this filing. 

10338 Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 

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

C. Temporary Suspension of Rule 

123C(1) and (2) 

The Exchange proposes to adopt 

permanently the provisions of Rule 

48(b)(2)(B) as proposed Rule 

123C(8)(a)(2), without any change. 

Therefore, as with Rule 48, the 

Exchange would have the ability to 

temporarily suspend, on a security-bysecurity basis, the Rule 123C(1) and (2) 

requirements that MOC and LOC orders 

that are legitimate errors cannot be 

cancelled or reduced after 3:50 p.m. The 

same conditions that were adopted as 

part of Rule 48 would apply here as 

well, i.e. , that only an erroneous MOC 

or LOC that would cause significant 

closing price dislocation for a particular 

security could be considered for 

cancellation and that if it is determined 

that such an MOC/LOC legitimate error 

would dislocate the close, such order 

can be cancelled or reduced at any time 

up until that particular security has 

closed. As discussed below, the 

Exchange proposes to move Rule 

48(b)(2)(B)(iii) to proposed Rule 

123C(8)(b). 

D. Parameters for Obtaining Temporary 

Rule Suspensions 

The Exchange further proposes 

codifying the practices concerning how 

a temporary suspension under proposed 

Rule 123C(8)(a) would be invoked and 

who should be involved. As proposed in 

Rule 123C(8)(b), only the DMM assigned 

to a particular security may request a 

temporary suspension under proposed 

section 8(a) of the Rule. The Exchange 

believes that because the DMM is 

responsible for facilitating the close of 

trading of securities registered to that 

DMM, including supplying liquidity if 

needed, the DMM is in the unique 

position to know whether he or she 

would need additional interest to ensure 

a fair or orderly close. 

To ensure that such temporary 

suspensions are not invoked 

indiscriminately, the Exchange further 

proposes that any such determination, 

as well as any entry or cancellation of 

orders or closing of a security under 

proposed Rule 123C(8)(a), must be 

approved by either an Executive Floor 

Governor or a qualified NYSE Euronext 

employee, as defined in Rule 46(b)(v)— 

NYSE Alternext Equities. The Exchange 

also proposes requiring that any 

temporary suspensions under proposed 

Rule 123C(8)(a) should be under the 

supervision of a qualified Exchange 

Officer, as defined in Rule 48(d). 

These requirements are identical to 

the requirement under Rule 

48(b)(2)(B)(iii), but more stringent than 

the current requirement under Rule 

48(b)(2)(A)(iv), which requires only the 

supervision of a Floor Governor. The 

Exchange believes that these heightened 

approval and supervision requirements 

will ensure that, as contemplated by the 

proposed rule, only extreme situations 

such as when a late-arriving order 

would cause significant price 

dislocation at the close would result in 

a temporary suspension of Exchange 

rules at the close. To assist the DMM 

and officials, proposed Rule 123C(8)(b) 

identifies a number of factors that may 

be considered when making such a 

determination. Such factors include, but 

are not limited to, when the order(s) that 

impacted the imbalance were entered 

into Exchange systems or orally 

represented to the DMM, the impact of 

such order(s) on the closing price of the 

security, the volatility of the security 

during the trading session, and the 

ability of the DMM to commit capital to 

dampen the price dislocation. 

Proposed Amendment to Rule 48(c)(2)— 

NYSE Alternext Equities 

In addition to the above-described 

amendments, the Exchange also 

proposes to amend Rule 48(c)(2), which 

concerns the method by which the 

Exchange notifies Commission staff 

when it declares a Rule 48 extreme 

market volatility condition. 

The current rule provides that the 

qualified Exchange officer will make a 

reasonable effort to consult with 

Commission staff before declaring an 

extreme market volatility condition and 

granting a suspension of the Exchange 

rules or procedures. In the event that the 

qualified Exchange officer cannot reach 

the Commission staff, the qualified 

Exchange officer will, as promptly as 

practicable in the circumstances, inform 

the Commission staff of such 

declaration. 

Given the limited relief that can be 

granted during a Rule 48 condition— 

certain Floor Official approvals are 

suspended and mandatory indications 

can be suspended—the Exchange 

believes that the requirement to consult 

with Commission staff before declaring 

an extreme market volatility condition 

imposes an undue burden on regulatory 

resources. Accordingly, the Exchange 

proposes to amend Rule 48(c)(2) to 

delete the requirement that the qualified 

Exchange officer undertake reasonable 

efforts to consult with Commission staff 

before declaring an extreme market 

volatility condition. As required by the 

rule, the Exchange will continue to 

inform the Commission staff, as 

promptly as practicable under the 

circumstances, when it has declared a 

Rule 48 extreme market volatility 

condition. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 19 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. As 

noted above, the proposed rule is 

intended to be used in extreme 

circumstances when a large order 

imbalance or order entered in error 

could cause a closing price to be far 

dislocated from the last sale price. The 

rule is therefore intended to protect 

investors and the public interest to 

ensure 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 

Within 35 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding, or 

(ii) as to which NYSE consents, the 

Commission will: 

(A) By order approve such proposed 

rule change; or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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: 

Federal Register / Vol. 74, No. 45 / Tuesday, March 10, 2009 / Notices 10339 

20 17 CFR 200.30–3(a)(12). 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to 

Please include File Number SRNYSEALTR–2009–15 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–2009–15. 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 offices 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–2009–15 and 

should be submitted on or before March 

31, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–4963 Filed 3–9–09; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[TeleSoft Partners II SBIC, L.P.; License No. 

09/79–0432] 

Notice Seeking Exemption Under 

Section 312 of the Small Business 

Investment Act, Conflicts of Interest 

Notice is hereby given that TeleSoft 

Partners II SBIC, L.P., 950 Tower Lane, 

Suite 1600, Foster City, CA 94404, a 

Federal Licensee under the Small 

Business Investment Act of 1958, as 

amended (‘‘the Act’’), in connection 

with the financing of a small concern, 

has sought an exemption under Section 

312 of the Act and Section 107.730, 

Financings which Constitute Conflicts 

of Interest of the Small Business 

Administration (‘‘SBA’’) Rules and 

Regulations (13 CFR 107.730). TeleSoft 

Partners II SBIC, L.P. proposes to 

provide equity financing to Calient 

Networks, Inc., 2665 North First Street, 

Suite 204, San Jose, CA 95134. The 

financing is contemplated for working 

capital and general corporate purposes. 

The financing is brought within the 

purview of section107.730(a)(1) of the 

Regulations because TeleSoft Partners II, 

L.P., TeleSoft Partners II QP, L.P. and 

TeleSoft NP Employee Fund, L.L.C, all 

Associates of TeleSoft Partners II SBIC, 

L.P., in the aggregate own more than ten 

percent of Calient Networks, Inc. 

Therefore, this transaction is 

considered a financing of an Associate 

requiring an exemption. Notice is 

hereby given that any interested person 

may submit written comments on the 

transaction within fifteen days of the 

date of this publication to the Acting 

Associate Administrator for Investment, 

U.S. Small Business Administration, 

409 Third Street, SW., Washington, DC 

20416. 

Dated: February 25, 2009. 

Harry Haskins, 

Acting Associate Administrator for 

Investment. 

[FR Doc. E9–4986 Filed 3–9–09; 8:45 am] 

BILLING CODE 8025–01–P 

DEPARTMENT OF STATE 

[Public Notice 6541] 

Advisory Committee on International 

Economic Policy; Notice of Committee 

Renewal 

Renewal of Advisory Committee. The 

Department of State has renewed the 

Charter of the Advisory Committee on 

International Economic Policy. The 

Committee serves in a solely advisory 

capacity concerning major issues and 

problems in international economic 

policy. The Committee provides 

information and advice on the effective 

integration of economic interests into 

overall foreign policy and on the 

Department of State’s role in advancing 

American commercial interests in a 

competitive global economy. The 

Committee also appraises the role and 

limits of international economic 

institutions and advises on the 

formulation of U.S. economic policy 

and positions. 

This Committee includes 

representatives of American 

organizations and institutions having an 

interest in international economic 

policy, including representatives of 

American business, labor unions, public 

interest groups, and trade and 

professional associations. The 

Committee meets at least annually to 

advise the Department on the full range 

of international economic policies and 

issues. 

For further information, please call 

Nancy Smith-Nissley, Senior 

Coordinator, Office of Economic Policy 

Analysis and Public Diplomacy, 

Economic, Energy and Business Affairs 

Bureau, U.S. Department of State, at 

(202) 647–1682. 

March 2, 2009. 

Sandra Clark, 

Director, Office of Economic Policy Analysis 

and Public Diplomacy, Bureau of Economic, 

Energy and Business Affairs, Department of 

State. 

[FR Doc. E9–5072 Filed 3–9–09; 8:45 am] 

BILLING CODE 4710–07–P 

DEPARTMENT OF STATE 

[Public Notice 6515] 

Notice of Closed Meeting of the 

Cultural Property Advisory Committee 

In accordance with the provisions of 

the Convention on Cultural Property 

Implementation Act (19 U.S.C. 2601 et 

seq.) (the Act) there will be a meeting of 

the Cultural Property Advisory 

Committee on Tuesday, March 24, from 

approximately 9 a.m. to 5 p.m., and on 

Wednesday, March 25, from 

approximately 9 a.m. to 1 p.m., at the 

Department of State, Annex 44, Room 

840, 301 4th St., SW., Washington, DC. 

At this meeting the Committee will 

carry out its interim review function 

with respect to the Memorandum of 

Understanding Between the 

Government of the United States of 

America and the Government of the 

Republic of Nicaragua Concerning the 

Imposition of Import Restrictions on 

Archaeological Material from the PreHispanic Cultures of Nicaragua. The