Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices 11393 

7 15 U.S.C. 78f(b)(4). 

8See Notice, supra note 3. 

9See Securities Exchange Act Release No. 55202 

(January 30, 2007), 72 FR 6017 (February 8, 2007). 

10See Notice, supra note 3. Additionally, some 

costs were offset by the elimination of the $5,000 

application fee. 

11 15 U.S.C. 78f(b)(4). In approving the proposed 

rule change, the Commission has considered the 

proposed rule’s impact in efficiency, competition 

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

12 15 U.S.C. 78s(b)(2). 

13 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 Securities Exchange Act Release No. 34– 

59446 (February 25, 2009), 74 FR 9323 (March 3, 

2009) (SR–NYSE–2009–17). 

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). 

been subject to the substitution listing 

fee. 

Finally, the Exchange is amending the 

language of Section 142 to state that the 

fees in the section apply to non-U.S. 

companies. According to the Exchange, 

they have always applied the fees in 

Section 142 to non-U.S. companies, and 

therefore, this amendment clarifies the 

Exchange’s policy. 

III. Discussion and Commission’s 

Findings 

After careful review, the Commission 

finds that the proposed rule change is 

consistent with the requirements of the 

Act and the rules and regulations 

thereunder applicable to a national 

securities exchange. Specifically, the 

Commission finds that the proposal is 

consistent with Section 6(b)(4) of the 

Act,7 which requires, among other 

things, that the rules of an exchange 

provide for equitable allocation of 

reasonable dues, fees, and other charges 

among its members and issuers and 

other persons using its facilities. 

As discussed in the Notice, many of 

the Exchange’s proposed fees, such as 

the initial listing fees for common stock 

or common stock equivalents, the 

maximum fee per issuer for listing 

additional shares in a calendar year, the 

fee charged in connection with a 

company changing its name or ticker 

symbol, and the Technical Original 

Listing fees are competitive with or 

substantially similar to the fees already 

in place at Nasdaq.8 The Commission 

recognizes that competition for listings 

is becoming increasingly vigorous, and 

that such competition may help to 

ensure the reasonableness of fees among 

the markets vying for new listings.9

Moreover, as described in the Notice, 

the Exchange represented that it had 

increased services to listed companies 

and incurred increased costs for services 

and regulatory programs, which 

required changes to its listing fees.10

The Exchange also cited different levels 

of services based on the number of 

outstanding shares to support the higher 

fees generally paid to the Exchange by 

larger companies and to provide 

justification for the proposed increases. 

Accordingly, the Commission believes 

that the Exchange’s proposed fee 

increases are reasonable, given the 

current competitive landscape, the 

listing fees charged by Nasdaq, the 

services the Exchange offers issuers that 

choose to list with NYSE Alternext and 

the increased regulatory oversight costs 

noted by the Exchange. The 

Commission also believes it is 

reasonable for the Exchange to charge 

non-U.S. companies the same initial 

listing fees as domestic companies 

since, according to the Exchange, they 

receive the same level of service from 

the Exchange. For these reasons, the 

Commission believes the proposed fee 

changes meet the statutory standard of 

an equitable allocation of reasonable 

dues, fees and other charges among 

issuers. 

For the foregoing reasons, the 

Commission finds that the proposed 

rule change is consistent with the Act.11

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,12 that the 

proposed rule change (SR–NYSEALTR– 

2009–02) be, and it hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5718 Filed 3–16–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59561; File No. SR– 

NYSEALTR–2009–25] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Alternext US LLC Eliminating the 

Ability To Enter Orders on the 

Exchange With the Settlement 

Instructions of ‘‘Cash’’, ‘‘Next Day’’ 

and ‘‘Seller’s Option’’ To Conform to 

Amendments Filed by the New York 

Stock Exchange 

March 11, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on March 5, 

2009, NYSE Alternext US LLC (the 

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

with the Securities and Exchange 

Commission (‘‘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 eliminate 

the ability to enter orders on the 

Exchange with the settlement 

instructions of ‘‘cash’’, ‘‘next day’’ and 

‘‘seller’s option’’ to conform to 

amendments filed by the New York 

Stock Exchange (‘‘NYSE’’). 

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 

seeks to amend several NYSE Alternext 

Equities rules to conform these rules 

with amendments filed by the New York 

Stock Exchange 4 to remove references 

to certain settlement instructions that 

are no longer compatible with the 

Exchange’s more electronic market. 

These include instructions to settle on 

‘‘cash’’, ‘‘next day’’ or ‘‘seller’s option’’ 

basis. 

I. 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 called 


dwashington3 on PROD1PC60 with NOTICES
11394 Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices 

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) (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). 

9See Securities and [sic] Exchange Act Release 

No. 57295 (February 8, 2008), 73 FR 8731 (February 

14, 2008) (SR–NYSE–2008–11). 

10Trading Posts are the horseshoe shaped 

counters manned by DMMs and trading assistants 

on the Trading Floor of the NYSE where individual 

stocks are bought and sold. 

11The Exchange does not have the capability to 

accept these order types for U.S. Government 

securities. 

NYSE Alternext U.S. 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’’) [sic].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. 

II. Proposed Amendments 

Currently, in addition to regular way 

settlement (i.e., settlement on the third 

business day following trade date), a 

customer may submit an order with 

settlement instructions for cash, next 

day or seller’s option. An order with 

cash settlement instructions requires 

delivery of the securities the same day 

as the transaction in contrast to a regular 

way transaction, where the seller is 

required to deliver the securities on the 

third business day. Next day settlement 

instructions require delivery of the 

securities on the first business day 

following the transaction. Orders that 

have settlement instructions of seller’s 

option afford the seller the right to 

deliver the security or bond at any time 

within a specified period, ranging from 

not less than two business days to not 

more than 180 days for stocks and not 

less than two business days and no 

more than sixty days for U.S. 

government securities. 

Orders that include cash, next and 

seller’s option settlement instructions 

may be submitted electronically to the 

Exchange; however, the orders 

containing any of those settlement 

instructions cannot be immediately and 

automatically executed. Rather, the 

orders must bypass the Exchange 

matching/execution engine, Display 

Book, and are literally printed on paper 

at the trading post for manual 

processing on the Floor. 

Proposed Elimination of Cash, Next 

Day, Seller’s Option Settlement 

Instructions 

In the Exchange’s current more 

electronic market, orders received by 

Exchange systems that are marketable 

upon entry are eligible to be 

immediately and automatically 

executed. Order types and settlement 

instructions that require manual 

intervention pose significant 

impediments to the efficient functioning 

of the NYSE Alternext Trading Systems 

operated by the NYSE on behalf of the 

Exchange. To this end the NYSE filed 

with the Commission to remove legacy 

orders that require manual processing. 

Specifically, on January 31, 2008, the 

NYSE filed with the Commission to 

amend NYSE Rule 13 to invalidate the 

use of the manual order types 

‘‘Alternative Order—Either/Or Order’’, 

‘‘Orders Good Until a Specified Time’’, 

‘‘Scale Order’’ and ‘‘Switch Order— 

Contingent Order’’ and Rule 124’s order 

types ‘‘Limited Order, With or Without 

Sale’’ and ‘‘Basis Price Order’’ as being 

incompatible with the more electronic 

NYSE market environment.9 These 

changes were already reflected in NYSE 

Alternext’s rules following the merger 

with the NYSE. 

The Exchange’s commitment to 

provide its market participants with the 

ability to have their orders executed in 

the most efficient manner necessitates 

the elimination of cash, next day and 

seller’s option as valid settlement 

instructions for orders submitted to the 

Exchange. These instructions result in 

these orders printing to paper at the 

trading Post 10 when they are submitted 

electronically in Exchange systems. The 

DMM and the trading assistant must 

realize that the document printed was in 

fact an order thus causing delay in the 

execution of the order. The DMM is 

then responsible for the manual 

execution of the order. The manual 

intervention required of the DMM and 

trading assistant at the Post in the 

processing of these orders puts the 

orders at the very real risk of ‘‘missing 

the market’’ as a result of the current 

speed of order execution in the 

Exchange market. In addition, since 

orders with these settlement 

instructions will no longer be supported 

by New York Stock Exchange systems, 

NYSE Alternext will also no longer be 

able to accept them for the securities 

traded in the NYSE Alternext market. 

The Exchange now seeks to eliminate 

cash, next day and seller’s option as 

valid settlement instructions for orders 

submitted to the Exchange. The 

Exchange therefore proposes to delete 

the references to those settlement 

instructions from NYSE Alternext Rules 

12 (‘‘Business Day’’), 64 (Bonds, Rights 

and 100-Share-Unit Stocks), 66 (U.S. 

Government Securities) 11, 123 (Records 

of Orders), 124 (Odd-Lot Orders), 130 

(Overnight Comparison of Exchange 

Transactions), 137 (Written Contracts), 

137A (Samples of Written Contracts), 

189 (Unit of Delivery), 235 (ExDividends, Ex-Rights), 236 (ExWarrants), 241 (Interest—Added to 

Contract Price), 257 (Deliveries After 

‘‘Ex’’ Date), 282 (Buy-In Procedures) and 

440G (Transactions in Stocks and 

Warrants for the Accounts of Members, 

Principal Executives and Member 

Organizations). In addition, the 

Exchange seeks to eliminate entirely 

NYSE Alternext Rules 73 (‘‘Seller’s 

Option’’), 177 (Delivery Time—‘‘Cash’’ 

Contracts) and 179 (‘‘Seller’s Option’’). 

In addition, the Exchange proposes to 

remove language in NYSE Alternext 

Rules 64 and 66 that provide for the 

possibility of using multiple settlement 

periods for bids and offers entered on 

the Exchange since, for all practical 

purposes, the Exchange will now only 

accept orders for regular way settlement. 

The Exchange also proposes to amend 

NYSE Alternext Rule 66 to add the 

provision that exists in NYSE Alternext 

Rule 64 to allow the Exchange, in its 


dwashington3 on PROD1PC60 with NOTICES
Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices 11395 

12 15 U.S.C. 78s(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). 

17 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires a self-regulatory 

organization to give the Commission written notice 

of its intent to file the proposed rule change at least 

five business days prior to the date of filing of the 

proposed rule change, or such shorter time as 

designated by the Commission. The Exchange has 

satisfied this requirement. 

18For purposes only of waiving the 30-day 

operative delay of the proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

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

discretion, to provide for additional 

settlement periods. The Exchange is 

proposing this addition to bring the 

provisions of the two rules into 

harmony as they address similar 

procedures with respect to different 

types of securities admitted to dealings 

on the Exchange. The Exchange, 

however, recognizes that any additional 

settlement periods it proposes to add 

will be subject to the rule filing process 

under Section 19(b) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’) [sic].12

The Exchange will commence 

implementation of the proposed 

elimination of the settlement 

instructions discussed herein on March 

13, 2009. The Exchange intends to 

progressively implement this 

elimination on a security by security 

basis as it gains experience with the 

implementation until it is operative in 

all securities traded on the Floor. During 

the implementation, the Exchange will 

identify on its website which securities 

will no longer be eligible for these 

settlement instructions. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Act’’) [sic] 

for this proposed rule change is the 

requirement under Section 6(b)(5) 13

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. The instant filing 

accomplishes these goals by rescinding 

legacy settlement instructions that place 

customers at risk of missing the market 

and possibly receiving inferior priced 

executions. 

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 proposed rule change 

does not: (i) Significantly affect the 

protection of investors or the public 

interest, (ii) impose any significant 

burden on competition, and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to Section 

19(b)(3)(A) 14 of the Act and Rule 19b– 

4(f)(6) thereunder.15

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative until 30 days after the 

date of filing.16 However, Rule 19b– 

4(f)(6)(iii) 17 permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest. The 

Exchange has requested that the 

Commission waive the 30-day operative 

delay so that the proposed rule change 

may become operative on March 13, 

2009. Specifically, the Exchange states 

that the proposal will rescind legacy 

settlement instructions that are not 

compatible with the Exchange’s 

electronic market. The Commission 

believes that allowing the proposed rule 

change to become operative on March 

13, 2009 is consistent with the 

protection of investors and the public 

interest, because it will enable the 

Exchange to implement pending 

technological enhancements that require 

the rescission of these legacy settlement 

instructions. The Exchange expects 

these enhancements to make its order 

processing operations more efficient and 

thereby strengthen and advance the 

quality of the Exchange’s market. 

Accordingly, the Commission 

designates the proposed rule change to 

be operative on March 13, 2009.18

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. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

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

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEALTR–2009–25 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–2009–25. 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 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–NYSEALTR–2009–25 and 


dwashington3 on PROD1PC60 with NOTICES
11396 Federal Register / Vol. 74, No. 50 / Tuesday, March 17, 2009 / Notices 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5The Exchange represents that a CEO designee 

will be an officer of the Exchange, who has also 

been designated as a Trading Official, such as the 

Executive Vice President of Trading Operations or 

the Vice President of Trading Services. Exchange 

officers are employees of the Exchange, and are not 

affiliated with OTP Holders or OTP Firms. 

6 In the event a party to a transaction requests that 

the CEO or his/her designee review a transaction, 

the Exchange officer nonetheless would need to 

determine, on his or her own motion, whether to 

review the transaction. 

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

8 15 U.S.C. 78f(b)(5). 

should be submitted on or before April 

7, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5719 Filed 3–16–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59556; File No. SR– 

NYSEArca–2009–17] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Amending Rule 6.87— 

Obvious Errors 

March 11, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on February 

27, 2009, NYSE Arca, Inc. (‘‘NYSE 

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

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 

NYSE Arca filed the proposed rule 

change as a ‘‘non-controversial’’ 

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

of the Act 3 and Rule 19b–4(f)(6) 

thereunder,4 which renders the proposal 

effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

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 6.87—Obvious Errors. 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 

NYSE Arca proposes to amend Rule 

6.87 pertaining to the nullification and 

adjustment of options transactions. 

Specifically, the Exchange proposes to 

adopt a new provision which provides 

that in the interest of maintaining a fair 

and orderly market and for the 

protection of investors, the Chief 

Executive Officer of NYSE Arca Inc. 

(‘‘CEO’’) or his/her designee 

(collectively ‘‘Exchange officer’’),5 may, 

on his or her own motion or upon 

request, determine to review any 

transaction occurring on the Exchange 

that is believed to be erroneous.6 A 

transaction reviewed pursuant to this 

new provision may be nullified or 

adjusted only if it is determined by the 

Exchange officer that the transaction is 

erroneous as provided in Rule 

6.87(a)(1)–(5) or Commentary .04 

thereof. A transaction would be adjusted 

or nullified in accordance with the 

provision under which it is deemed an 

erroneous transaction. The Exchange 

officer may be assisted by a Trading 

Official in reviewing a transaction. 

The Exchange officer shall act 

pursuant to this paragraph as soon as 

possible after receiving notification of 

the transaction, and ordinarily would be 

expected to act on the same day as the 

transaction occurred. However, because 

a transaction under review may have 

occurred near the close of trading or due 

to unusual circumstances, the rule 

provides that the Exchange officer shall 

act no later than 9:30 a.m. (ET) on the 

next trading day following the date of 

the transaction in question. An OTP 

Holder affected by a determination to 

nullify or adjust a transaction pursuant 

to this new provision may appeal such 

determination in accordance with Rule 

6.87(a)(6); however, a determination by 

an Exchange officer not to review a 

transaction, or a determination not to 

nullify or adjust a transaction for which 

a review was requested or conducted, is 

not appealable. NYSE Arca believes it is 

appropriate to limit review on appeal to 

only those situations in which a 

transaction is actually nullified or 

adjusted. 

This new provision is not intended to 

replace a party’s obligation to request a 

review, within the required time periods 

under Rule 6.87(a)(3), of any transaction 

that it believes meets the criteria for an 

obvious error. And, if a transaction is 

reviewed and a determination has been 

rendered pursuant to Rules 6.87(a)(1)– 

(5) or Commentary .04 thereof, no 

additional relief may be granted under 

this new provision. Moreover, NYSE 

Arca does not anticipate exercising this 

new authority in every situation in 

which a party fails to make a timely 

request for review of a transaction 

pursuant to Rule 6.87(a)(3). NYSE Arca 

believes this provision will help to 

protect the integrity of its marketplace 

by vesting an Exchange officer with the 

authority to review a transaction that 

may be erroneous, in those situations 

where a party failed to make a timely 

request for a review. 

The Exchange also proposes at this 

time to revise Rule 6.87(a)(3)(A) in order 

to clarify that the time period in which 

a Market Maker or other OTP Holder 

must notify the Exchange, when 

requesting relief from a possible 

erroneous transaction, applies to all 

transactions that are subject to 

adjustment or nullification, pursuant to 

Rule 6.87(a)(1)–(5). 

2. Statutory Basis 

This proposed rule change is designed 

to allow an Exchange officer to review 

a transaction in order to provide the 

opportunity for potential relief to a 

party affected by an obvious error. The 

Exchange believes that for these reasons 

the proposed rule change is consistent 

with Section 6(b) of the Act 7 in general, 

and furthers the objectives of Section 

6(b)(5) of the Act 8 in particular, because 

it is 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. NYSE Arca notes that the 


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