Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Notices 13501 

21 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. 

4PRL orders are for a size within the standard 

unit (round-lot) of trading, which is 100 shares for 

most stocks, but contains a portion that is smaller 

than the standard unit of trading, e.g. 199 shares. 

It should be noted that for certain securities trading 

on the NYSE Alternext Trading Systems the 

standard unit of trading is 10 shares. 

5See SR–NYSE–2009–27 (to be filed March 11, 

2009). 

6See Securities Exchange Act Release No. 58673 

(September 29, 2008), 73 FR 57707 (October 3, 

2008) (SR–NYSE–2008–60 and SR–Amex 2008–62) 

(approving the Merger). 

7 15 U.S.C. 78f. 

8See Securities Exchange Act Release No. 58705 

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

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

Relocation). 

9See NYSE Alternext Equities Rule 124(a). 

10 Id. Odd-lot orders are in effect netted against 

one another and executed; however, since the DMM 

is buying the same amount that he or she is selling, 

there is no economic consequence to the DMM in 

this type of pairing-off of orders. Any imbalance of 

buy or sell odd-lot market orders are executed 

against the DMM, up to the size of the round-lot 

transaction or the BID/OFFER size which ever is 

less. 

11The volume limitation in section (c) of the rule 

is defined as the lesser of either the number of 

shares in the last round-lot transaction or the 

number of shares available at the national best bid 

(in the case of an odd-lot order to sell), or the 

national best offer (in the case of an odd-lot order 

to buy). 

12Pursuant to NYSE Alternext Equities Rule 

124(d) odd-lot limit orders that are non-marketable 

upon receipt that become marketable are eligible to 

be netted and executed at the price of the next 

round-lot transaction. If odd-lot limit orders do not 

receive an execution pursuant to the netting 

provision, then the orders are eligible to be 

executed, at its limit price, subject to the volume 

limitation of section (c) of the rule. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6826 Filed 3–26–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59614; File No. SR– 

NYSEALTR–2009–27] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Alternext U.S. LLC Amending NYSE 

Alternext Equities Rule 124 To Execute 

the Odd-Lot Portion of a Part of a 

Round-Lot Order Pursuant to the Same 

Pricing Methodology Used for Odd-Lot 

Orders 

March 20, 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 March 

11, 2009, NYSE Alternext U.S. LLC (the 

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

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the selfregulatory organization. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Alternext Equities Rule 124 (OddLot Orders) to execute the odd-lot 

portion of a part of a round-lot (‘‘PRL’’) 

order pursuant to the same pricing 

methodology used for odd-lot orders. 

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 NYSE Alternext Equities 

Rule 124 (Odd-Lot Orders) to execute 

the odd-lot portion of a part of a roundlot (‘‘PRL’’) order pursuant to the same 

pricing methodology used for odd-lot 

orders.4

These amendments are proposed to 

conform to amendments filed by the 

New York Stock Exchange (‘‘NYSE’’).5

Background 

As described more fully in a related 

rule filing,6 NYSE Euronext acquired 

The Amex Membership Corporation 

(‘‘AMC’’) pursuant to an Agreement and 

Plan of Merger, dated January 17, 2008 

(the ‘‘Merger’’). In connection with the 

Merger, the Exchange’s predecessor, the 

American Stock Exchange LLC 

(‘‘Amex’’), a subsidiary of AMC, became 

a subsidiary of NYSE Euronext called 

NYSE Alternext 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’’).7 The 

effective date of the Merger was October 

1, 2008. 

In connection with the Merger, on 

December 1, 2008, the Exchange 

relocated all equities trading conducted 

on the Exchange legacy trading systems 

and facilities located at 86 Trinity Place, 

New York, New York (the ‘‘86 Trinity 

Trading Systems’’), to trading systems 

and facilities located at 11 Wall Street, 

New York, New York (the ‘‘Equities 

Relocation’’). The Exchange’s equity 

trading systems and facilities at 11 Wall 

Street (the ‘‘NYSE Alternext Trading 

Systems’’) are operated by the NYSE on 

behalf of the Exchange.8

In order to implement the Equities 

Relocation, the Exchange adopted Rules 

1–1004 of the New York Stock Exchange 

LLC as the NYSE Alternext Equities 

Rules to govern the equities trading on 

the NYSE Alternext Trading Systems. 

Current Execution of Odd-Lot Orders 

Currently, odd-lot orders on the 

Exchange are processed in a separate 

system on the Exchange from the 

Exchange systems that execute roundlot orders. Odd-lots are executed 

systemically by Exchange systems 

designated solely for odd-lot orders (the 

‘‘Odd-lot System’’).9 The odd-lot System 

executes all odd-lot orders against the 

DMM as the contra party.10

Pursuant to NYSE Alternext Equities 

Rule 124(c), after odd-lot market orders 

and marketable odd-lot limit orders are 

received by the Odd-lot System, they are 

automatically executed at the price of 

the next round-lot transaction in the 

subject security on the Exchange. 

Specifically, marketable odd-lot orders 

and marketable odd-lot limit orders are 

executed in time priority of receipt at 

the price of the next round-lot 

transaction, pursuant to the net process 

described in footnote 14 [sic]. The 

imbalance of marketable odd-lot orders 

that do not receive an execution as a 

result of the netting provision are 

executed in time priority of receipt at 

the price of the NBBO, subject to a 

volume limitation.11 Any imbalances of 

odd-lot limit orders that were nonmarketable upon receipt that 

subsequently become marketable 

receive an execution at their limit 

price.12 Marketable odd-lot orders 

which would otherwise receive a partial 

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13502 Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Notices 

13As with marketable odd-lot orders, nonmarketable odd-lot limit orders which would 

otherwise receive a partial execution will be 

executed in full. Non-marketable odd-lot limit 

orders that become marketable, that remain 

unexecuted within 30 seconds of receipt will be 

executed, in time priority of receipt, except that the 

orders will be executed at its limit price. 

14See NYSE Alternext Equities Rule 124.40. 

15This example assumes that the odd-lot portion 

of the PRL had priority of execution in the Odd-lot 

system because its original order entry time was 

12:00:00. 

execution pursuant to the volume 

limitation are executed in full.13

Any marketable odd-lot orders that do 

not receive an execution because of the 

volume limitation are executed, in time 

priority of receipt at the price of the 

next round-lot transaction, following 

pricing and execution procedures 

described above. Marketable odd-lot 

orders (including odd-lot limit orders 

that were non-marketable upon receipt 

and subsequently become marketable) 

that remain unexecuted within 30 

seconds of receipt will be executed, in 

time priority of receipt, at the price of 

the NBBO (or at its limit price if the 

order is a non-marketable odd-lot limit 

order upon receipt that has become 

marketable). These orders are also 

subject to the volume limitation. 

Marketable odd-lot orders and nonmarketable odd-lot limit orders that 

have become marketable and remain 

unexecuted prior to the close of trading 

shall be executed, in time priority of 

receipt at the price of the closing 

transaction, subject to the netting 

provision and a volume restriction 

which is not to exceed the size of the 

closing transaction. 

The round-lot portion of a PRL is 

executed in the Exchange’s round-lot 

system and the odd-lot portion is 

executed in the Odd-lot System only if 

no round-lot portion of the initial PRL 

order is cancelled.14 Where more than 

one round-lot transaction is required to 

effect the complete execution of the 

round-lot portion of a PRL, the odd lot 

portion is executed only if the entire 

round-lot portion(s) of the PRL order as 

received by the Exchange is executed. 

Thereafter, the odd-lot portion is 

executed at the same price as the last 

round-lot transaction that is needed to 

completely execute all round-lot 

portions of the PRL. 

Example 

An order to sell 399 shares of security 

XYZ is received by Exchange systems at 

12:00:00. The 99 share portion of the 

order is eligible for execution only after 

the 300 share portion of the PRL order 

is sold. See table below. 

Time of execution Number of shares Price of execution Customer receives 

12:00:01 ............................... 100 ..................................... $30.22 ................................ Report of Execution 100 shares at a price of $30.22. 

12:01:00 ............................... 100 ..................................... $30.21 ................................ Report of Execution 100 shares at a price of $30.22. 

12:01:47 ...............................

12:01:47 ...............................

100 .....................................

99 .......................................

$30.22 ................................

$30.22 

Report of Execution 199 shares at a price of $30.22. 

Proposed Amendment to Partial Round 

Lot Pricing 

As explained above, NYSE Alternext 

Trading Systems are operated by the 

NYSE on behalf of the Exchange. Legacy 

systems operated by the NYSE that were 

responsible for sequencing order 

execution were unable to handle the 

number of variables necessary to track 

the odd-lot portion of a PRL order in the 

event a customer sought to cancel or 

replace his or her PRL. This systemic 

impediment required the Exchange to 

handle the execution of the odd-lot 

portion of a PRL differently from other 

odd-lot orders to ensure that customers 

were able to efficiently execute their 

PRL orders and receive timely 

information about the orders’ status. 

Today, significant upgrades to the 

technology now make it possible for 

Exchange systems to price all odd-lot 

orders consistent with the provisions 

NYSE Alternext Equities 124(c) and (d). 

The Exchange therefore proposes to 

amend NYSE Alternext Equities 124.40 

to allow the odd-lot portion of PRLs to 

be executed in the Odd-lot System 

pursuant to the pricing provisions of 

NYSE Alternext Equities 124. The 

Exchange will continue to execute the 

odd-lot component of a PRL only if the 

entire round-lot portion(s) of the order 

as received by Exchange system is 

executed. The odd-lot portion of the 

PRL will retain the time stamp of its 

original entry as a PRL and would be 

sequenced for execution based on its 

initial entry time. Once all round lot 

components of the PRL are fully 

executed, the odd-lot portion of the 

order will be executed at a price 

consistent with other odd-lot orders 

subject to the provisions of NYSE 

Alternext Equities Rule 124(c) and (d). 

Example 

A marketable order to sell 399 shares 

of security XYZ is received by Exchange 

systems at 12:00:00. The 99 share 

portion of the order is eligible for 

execution only after the 300 share 

portion of the PRL order is sold. See 

table below. 

Time of 

execution Number of shares Price of execution Customer receives 

12:00:01 .. 100 ............................................ $30.22 ....................................... Report of Execution 100 shares at a price of $30.22. 

12:01:00 .. 100 ............................................ 30.21 ......................................... Report of Execution 100 shares at a price of $30.21. 

12:01:47 .. 100 ............................................ 30.22 ......................................... Report of Execution 100 shares at a price of $30.22. 

12:01:48 .. 99 .............................................. 15 30.23 ..................................... Report of Execution 99 shares at a price of $30.23. 

The Exchange proposed amendment 

to NYSE Alternext Equities 124.40, will 

ensure that all odd-lots executed on the 

Exchange receive consistent pricing 

regardless of whether the order is 

received as an odd-lot order or a PRL. 

The Exchange will commence 

implementation of the proposed 

systemic change to execute the odd-lot 

portion of a PRL order pursuant to the 

same pricing methodology used for oddlot orders on or about March 16, 2009. 

The Exchange intends to progressively 

implement this systemic change for 

PRLs on a security by security basis as 

it gains experience with the new 

technology until it is operative in all 

securities traded on the Floor. During 

the implementation, the Exchange will 

identify on its Web site which securities 

have been transitioned to the new 

system. 

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Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Notices 13503 

16 15 U.S.C. 78f(b)(5). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f)(5). 

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)(iii). 

4 17 CFR 240.19b–4(f)(6). 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 16 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 proposal is in keeping with these 

principles in that it seeks to price the 

execution of all odd-lot orders pursuant 

to one pricing methodology now that 

the Exchange systemic impediments to 

the implementation of one pricing 

methodology are removed. 

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 

The proposed rule change is filed 

pursuant to paragraph (A) of Section 

19(b)(3) 17 and Rule 19b–4(f)(5).18 This 

proposed rule change effects a change in 

an existing order entry or trading system 

of a self-regulatory organization that: (A) 

Does not significantly affect the 

protection of investors or the public 

interest; (B) does not impose any 

significant burden on competition; and 

(C) does not have the effect of limiting 

the access to or availability of the 

system. The proposed filing does not in 

any way limit access to the Exchange’s 

odd-lot system; rather, the changes are 

the result of technological 

advancements which remove the 

systemic impediments that previously 

restricted the Exchange’s ability to 

execute all odd-lots pursuant to a the 

same pricing methodology. In so far as, 

the proposal ensures that all odd-lot 

orders are priced in the same manner, 

it promotes the protection of investors 

and serves the public interest without 

imposing a significant burden on 

competition. 

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–2009–27 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–2009–27. 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–2009–27 and 

should be submitted on or before April 

17, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–6829 Filed 3–26–09; 8:45 am] 

BILLING CODE 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59609; File No. SR– 

NYSEArca–2009–23] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. Amending Rule 6.47 To 

Remove Obsolete Text Related to the 

SizeQuote Pilot Program 

March 20, 2009. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that, on March 

16, 2009, NYSE Arca, Inc. (‘‘NYSE 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II, 

which Items have been prepared by the 

self-regulatory organization. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 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 its 

rules in order to remove obsolete rule 

text related to the SizeQuote Pilot 

Program. The text of the proposed rule 

change is attached as Exhibit 5 to the 

Form 19b–4. A copy of this filing is 

available on the Exchange’s Web site at 

http://www.nyse.com, at the Exchange’s 

principal office and at the Commission’s 

Public Reference Room. 

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