Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Notices 11797 

19 17 CFR 200.30–3(a)(12). 

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

2The exact text of the FICC’s proposed rule 

change can be found in Attachment 1 of this filing 

or at http://www.dtcc.com/downloads/legal/ 

rule_filings/2009/ficc/2009–03.pdf. 

3The Commission has modified portions of the 

text of the summaries prepared by the FICC. 

Certificates. The Exchange believes that 

the provisions of Rule 5.2(j)(7), together 

with the Exchange’s applicable 

surveillance, serve to foster investor 

protection and the public interest. 

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 the Exchange consents, 

the Commission will: 

(A) By order approve the proposed 

rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

The Exchange has requested 

accelerated approval of this proposed 

rule change prior to the 30th day after 

the date of publication of the notice in 

the Federal Register. The Commission 

is considering granting accelerated 

approval of the proposed rule change at 

the end of a 21-day comment period. 

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 

No. SR–NYSEArca–2009–20 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–NYSEArca–2009–20. 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– 

NYSEArca–2009–20 and should be 

submitted on or before April 9, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–5928 Filed 3–18–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59569; File No. SR–FICC– 

2009–03] 

Self-Regulatory Organizations; The 

Fixed Income Clearing Corporation; 

Notice of Filing of Proposed Rule To 

Impose a Charge on Members With a 

Fail-to-Deliver in Treasury Securities 

March 12, 2009. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 notice is hereby given that on 

February 25, 2009, The Fixed Income 

Clearing Corporation (‘‘FICC’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) proposed 

rule change No. SR–FICC–2009–03, 

which is described in Items I, II, and III 

below and have been prepared primarily 

by the FICC. The Commission is 

publishing this notice to solicit 

comments from interested parties on the 

proposed rule change as. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The proposed rule change will impose 

a charge on members with a fail-todeliver position in treasury securities.2

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

FICC 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 these statements 

may be examined at the places specified 

in Item IV below. FICC has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of these statements.3

(A) Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Treasury Markets Practices Group 

(‘‘TMPG’’), a group of market 

participants active in the treasury 

securities market that is sponsored by 

the Federal Reserve Bank of New York 

(the ‘‘FRBNY’’), has been in the process 

of devising ways to address the 

persistent settlement fails in treasury 

securities transactions that have arisen, 

according to the TMPG, due to the 

recent market turbulence and low shortterm interest rates. In order to encourage 

market participants to resolve fails 

promptly, the TMPG has proposed for 

adoption a ‘‘best practice’’ that would 

call for the market-wide assessment of a 

charge on fail-to-deliver positions. As 

part of this implementation of this ‘‘best 

practice,’’ the TMPG has asked the 

Government Securities Division of FICC 

(‘‘GSD’’) to impose this charge on failed 

positions involving treasury securities 

within FICC. 


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11798 Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Notices 

4FICC Rules, Section 6 of Rule 12. 

5 15 U.S.C. 78q–1. 6 17 CFR 200.30–3(a)(12). 

The proposed charge will be equal to 

the product of net money due on the 

failed position and three (3) percent per 

annum minus the Target Fed funds 

target rate that is effective at 5 p.m. 

Eastern Standard Time on the business 

day prior to the originally scheduled 

settlement date and will be capped at 

three (3) percent per annum. The charge 

will be applied daily and will be a debit 

on the member’s GSD monthly bill for 

a fail-to-deliver position and a credit on 

the member’s GSD monthly bill for 

those with fail-to-receive position. 

The following example illustrates the 

manner in which the proposed fails 

charge would apply: 

Member A fails to deliver today on a 

$50 million position on which he is 

owed $50.1 million. The Target Fed 

funds rate yesterday at 5 p.m. was one 

(1) percent. The fails charge will be two 

(2) percent per annum and will be 

applied to the funds amount of $50.1 

million, thus equaling a charge of 

$2,783.33 for that day. The bill of the 

member failing to deliver will reflect a 

debit of $2,783.33. 

In the event that FICC is the failing 

party because, for example, it received 

securities too close to the close of the 

Fedwire for redelivery, the fail charge 

will be distributed pro rata to the 

netting members based upon usage of 

the GSD’s services, which is the same 

methodology that is used when FICC 

incurs finance charges.4

The proposed rule change provides 

that the Credit and Market Risk 

Management Committee of FICC’s Board 

of Directors will retain the right to 

revoke application of the charge if 

industry events or practices warrant 

such revocation. 

2. Statutory Basis 

FICC believes the proposed rule 

change is consistent with the 

requirements of Section 17A of the Act, 

as amended,5 and the rules and 

regulations thereunder because the 

proposed rule change will promote the 

prompt and accurate clearance and 

settlement of securities transactions by 

discouraging persistent fails-to-deliver 

in treasury securities and thereby not 

adversely affecting the safeguarding of 

securities or funds in FICC’s control or 

for which it is responsible. 

(B) Self-Regulatory Organization’s 

Statement on Burden on Competition 

FICC 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 

FICC has neither solicited nor 

received written comments on the 

proposed rule change. FICC will notify 

the Commission of any written 

comments received by FICC. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within thirty-five 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 ninety 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 the self-regulatory 

organization 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–FICC–2009–03 in 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–FICC–2009–03. 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 

Section, 100 F Street, NE., Washington, 

DC 20549, on official business days 

between the hours of 10 a.m. and 3:30 

p.m. Copies of such filings also will be 

available for inspection and copying at 

the principal office of the FICC and on 

the FICC’s Web site, http:// 

www.ficc.com. 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–FICC– 

2009–03 and should be submitted on or 

before April 9, 2009. 

For the Commission by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Deputy Secretary. 

BILLING CODE 


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sroberts on PROD1PC70 with NOTICESEN19MR09.002</GPH>
11800 Federal Register / Vol. 74, No. 52 / Thursday, March 19, 2009 / Notices 

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). 

5See Securities Exchange Act Release No. 29237 

(May 31, 1991), 56 FR 24853 (June 3, 1991) 

approving File Nos. SR–NYSE–90–52 and 90–53 

which established the NYSE Off-Hours Trading 

Facility on a pilot basis. See also, Securities 

Exchange Act Release No. 33992 (May 2, 1994), 59 

FR 23907 (May 9, 1994) approving the NYSE OffHours Trading Facility on a permanent basis. 

6This includes any market-wide trading halt 

instituted under Exchange Rule 80B (Trading Halts 

Due to Extraordinary Market Volatility). 

7See NYSE Rule 13 (Definitions of Orders). GTC 

orders that have been designated as ‘‘Off-Hours 

Eligible’’ under this rule are referred to as ‘‘GTX 

orders.’’ 

[FR Doc. E9–5978 Filed 3–18–09; 8:45 am] 

BILLING CODE 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59570; File No. SR–NYSE– 

2009–28] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change Amending 

NYSE Rules 13, 902, 903, 904, 905 and 

Rule 906 To Eliminate Certain Order 

Types From the Off-Hours Trading 

Facility 

March 12, 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 March 11, 

2009, New York Stock Exchange LLC 

(‘‘NYSE’’ 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 Exchange. NYSE filed the 

proposed rule change 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 

NYSE Rules 13 (Definitions of Orders), 

902 (Off-Hours Trading Orders), 903 

(Off-Hours Transactions), 904 (Priority 

of Off-Hours Trading Orders), 905 (OffHours Trading Reports and 

Recordkeeping) and Rule 906 (Impact of 

Trading Halts on Off-Hours Trading) to 

eliminate certain order types from the 

off-hours trading facility. The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, and http:// 

www.nyse.com. 

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 

Exchange 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 NYSE Rules 902, 903, 

904 and 906 to remove certain off-hours 

trading functions from the Exchange’s 

Crossing Session I. The Exchange is 

making this change in connection with 

certain technology upgrades it expects 

to begin rolling out on or about March 

16, 2009. 

As explained more fully below, 

customers who previously relied on the 

trading functions in Crossing Session I 

that are being eliminated will be able to 

execute their off-hours trades through 

the NYSE MatchPoint® system. The 

Exchange will continue to accommodate 

certain types of off-hours trading (error 

offset trades and trades between a 

member and the DMM for the purpose 

of offsetting a market-on-close 

imbalance) in Crossing Session I. 

I. Background 

The Exchange initiated its Off-Hours 

Trading Facility in June 1991.5 In 

connection with its implementation, the 

Exchange adopted the ‘‘900’’ series of 

rules to govern trading, order eligibility, 

order entry and recordkeeping 

requirements. 

In one application of the Off-Hours 

Trading Facility, members and member 

organizations may enter orders to be 

executed at the NYSE closing price, that 

is, the price established by the last 

regular way sale in a security at the 

official closing of the 9:30 a.m. to 4 p.m. 

trading session (‘‘Crossing Session I’’). 

Orders may be entered for any 

Exchange-listed issue, other than a 

security that is subject to a trading halt 

at the close of the regular trading 

session 6 or is halted after 4 p.m. 

Crossing Session I normally runs from 

4:15 p.m. to 5 p.m. on each trading day. 

Under Rule 902(a)(i) and (ii)(A) 

respectively, members may enter singlesided orders (i.e., either an order to buy 

or an order to sell) and coupled orders 

(i.e., both a buy and a sell order) into 

Crossing Session I. In addition, pursuant 

to Rule 902(b), the Exchange will 

migrate into Crossing Session I for 

possible execution any good-tilcancelled (‘‘GTC’’) orders that have been 

designated as eligible for execution in 

the Off-Hours Trading Facility.7 These 

types of orders entered into Crossing 

Session I are usually executed at the end 

of the Session, i.e., at 5 p.m. 

Rules 903 and 904 describe, in 

pertinent part, how orders that are 

entered into the off-hours trading 

facility establish priority, and the 

execution protocols for such orders. 

Specifically, Rule 903 provides that 

single-sided and migrated GTX orders 

are to be executed against opposite side 

single-sided and GTX orders in the OffHours trading Facility, while coupled 

orders are to be executed against the 

other side of the coupled order. Rule 

904 provides that GTX orders retain the 

priority among themselves that existed 

when they were entered into Display 

Book®, while the priority of coupled 

orders will be determined based upon 

their sequence of entry into the OffHours Trading facility. 

Rule 905 requires that certain records 

be maintained by members and member 

organizations with respect to off-hours 

trading. 

Rule 906 outlines procedures under 

which Off-Hours Trading Facility orders 

in an NYSE-listed security may go 

unexecuted if such security was subject 

to a trading halt. 

II. Proposed Changes to Off-Hours Order 

Processing and Rule Amendments 

The Exchange is preparing to institute 

a number of technology changes to its 

systems that will foster more efficient 

and cost effective processing of orders it 

receives. As part of these changes, the 

Exchange is phasing out the SuperDOT®

system and will replace it with a system 

referred to as Super Display Book 

(‘‘SDBK’’). 

Because the Off-Hours Trading 

Facility relies on the SuperDOT system 

for certain trade processing functions, 

the Exchange plans to eliminate the 

ability for single-sided, coupled orders 

and GTX to be entered or migrated into 

the off-hours trading facility known as 


sroberts on PROD1PC70 with NOTICES