18018 Federal Register / Vol. 74, No. 74 / Monday, April 20, 2009 / Notices 

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

2 17 CFR 240.19b–4. 

3See Exchange Act Release No. 34–59194 Order 

Granting Accelerated Approval of SR–NYSEArca– 

2008–135. 

4See SR–NASDAQ–2009–017. 

5A Firm ID is a 5 character identification code 

(letters and/or numbers). Each OTP Holder is 

assigned its own unique Firm ID. 

6The Chicago Board Options Exchange (‘‘CBOE’’) 

also allows attributable orders. See Exchange Act 

Release No. 34–58394, Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

Adopting A New Order Type, File No. SR–CBOE– 

2008–85. 

7See NYSE Arca Equities Rule 7.31(w)(1). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59737; File No. SR– 

NYSEArca–2009–27) 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Arca, Inc. Amending Rule 6.62 To Offer 

WAIT Modifier, PNP Plus Orders and 

Allow the Use of Attributable Orders 

April 9, 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 April 6, 

2009, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘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. 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 6.62 to (i) offer the ‘‘WAIT’’ order 

modifier for use with orders entered 

into the NYSE Arca System; (ii) allow 

the use of attributable orders; and (iii) 

offer PNP Plus orders. The WAIT 

modifier is designed to enhance 

compliance with the order exposure 

requirement of NYSE Arca Rule 6.47A. 

Attributable orders allow users to 

voluntarily display their firm IDs on the 

orders. PNP Plus orders allow Users 

greater control over the circumstances of 

order execution. The text of the 

proposed rule change is attached as 

Exhibit 5 to the 19b–4 form. 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 

WAIT Orders 

On January 5, 2009, the Securities and 

Exchange Commission approved NYSE 

Arca’s proposal to reduce the order 

exposure requirement of Rule 6.47A 

from three seconds to one second.3 Rule 

6.47A prohibits Users from executing as 

principal orders they represent as agent 

unless (i) agency orders are first exposed 

on the Exchange for at least one (1) 

second or (ii) the User has been bidding 

or offering on the Exchange for at least 

one (1) second prior to receiving an 

agency order that is executable against 

such bid or offer. This Rule ensures that 

a User does not gain at the expense of 

customers by depriving them of the 

opportunity to interact with orders in 

the NYSE Arca System. 

Users that enter agency orders into the 

NYSE Arca System have noted the 

proposal by the NASDAQ Options 

Market (‘‘NOM’’) for a WAIT order 

modifier,4 and have asked the Exchange 

to develop an automated mechanism 

that permits them to enter orders into 

the NYSE Arca System as soon as the 

orders are received but that also 

prevents them from interacting with 

their own agency orders in violation of 

the order exposure requirement. NYSE 

Arca believes this is an efficient use of 

resources because it will allow NYSE 

Arca to program its System once rather 

than have multiple Users re-program 

their systems. 

In order to accomplish that request, 

NYSE Arca has developed the ‘‘WAIT’’ 

modifier which can be appended to an 

order prior to entry into the NYSE Arca 

System. The WAIT modifier will 

instruct the System to wait precisely 

one second from the time of order entry 

before processing the order in 

accordance with the other instructions 

attached to that order. Upon expiration 

of the one-second WAIT period, the 

System will time stamp, route, display, 

or execute the order in accordance with 

the entering party’s other order entry 

instructions. Thus, the WAIT modifier 

does not affect the existing display, 

routing, or execution priorities of the 

NYSE Arca System or any other 

obligations of Users as set forth in the 

NYSE Arca rules. 

Orders designated with the WAIT 

modifier are independent of all other 

orders, including an agency order that is 

being exposed pursuant to Rule 6.47A. 

WAIT orders are not associated or in 

any way linked to another order entered 

into the System, as is the case with 

certain facilitation orders at other 

options exchanges. The System will 

process the WAIT order even if a 

customer order entered into the System 

simultaneously with the WAIT order 

has been executed or cancelled during 

the WAIT second, unless the WAIT 

order itself is modified or cancelled 

pursuant to System rules. As a result, 

there is no guarantee that an order 

designated as WAIT will execute against 

another specific order. Use of the WAIT 

modifier is completely voluntary. 

Attributable Orders 

The Exchange proposes to modify 

Rule 6.62 (Certain Types of Orders 

Defined) to allow for the submission of 

attributable orders. These orders allow 

users to voluntarily display their firm 

IDs on the orders.5 The NASDAQ 

Options Market, LLC (‘‘NOM’’) currently 

allows its participants to submit 

attributable orders (See NOM Chapter 

VI, Section (1)(d)(1)).6 As proposed, the 

Exchange may limit the processes for 

which attributable orders will be 

available. This proposal is responsive to 

requests by Exchange Users who believe 

that enhanced executions may be 

obtained if firm ID is allowed on orders 

(on a voluntary basis). 

PNP Plus 

As part of its continuing efforts to 

enhance participation on the Exchange, 

and provide additional tools to control 

the circumstances in which orders are 

executed, NYSE Arca proposes to adopt 

an order type known as ‘‘PNP Plus’’. 

PNP Plus Orders are currently offered 

on the NYSE Arca Equities market.7

A PNP Order is an order entered into 

the NYSE Arca System for execution on 

the Exchange, but not for routing to 

away markets. Because of the condition 

to not route PNP orders, they are 

cancelled if they would otherwise lock 

or cross the NBBO. 

Customers have requested that the 

exchange develop a PNP Order type that 


rmajette on PRODPC74 with NOTICES
Federal Register / Vol. 74, No. 74 / Monday, April 20, 2009 / Notices 18019 

8 15 U.S.C. 78s(b)(3)(A)(iii). 

9 17 CFR 240.19b–4(f)(6). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change along with a brief 

description and text of 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. 12 17 CFR 200.30–3(a)(12). 

would, if marketable against the NBBO 

but not executable on the Exchange, be 

represented in the Exchange’s 

disseminated market by re-pricing the 

order. Specifically, if posting a PNP Plus 

order or a portion there of would 

otherwise result in locking or crossing 

the NBBO, the PNP order would 

automatically be re-priced to be one 

MPV greater than the NBBO bid (for sell 

orders) or one MPV less than the NBBO 

offer (for buy orders), thus avoiding 

locking or crossing the NBBO. The repriced bid or offer is included in the 

Exchange’s disseminated quote. 

If the NBBO changes, and the order is 

marketable against the new NBBO, but 

still not executable on the Exchange, the 

PNP Plus order would again be repriced to be one MPV away from the 

NBBO. When re-priced, the PNP Plus 

order is re-ranked at the new price. The 

order would continue to be re-priced 

and re-ranked with each change in the 

NBBO, until such time that the NBBO 

moves such that the original price of the 

PNP Plus Order would no longer lock or 

cross the NBBO. The PNP Plus Order 

would then automatically be re-priced 

back to its original limit price and reranked in the Consolidated Book. The 

PNP Plus Order will not be re-priced if 

the order becomes locked or crossed by 

another market. 

The Exchange believes that the 

implementation of the aforementioned 

rule change modifying NYSE Arca order 

entry options will enhance compliance 

with NYSE Arca rules, preserve order 

execution opportunities on the NYSE 

Arca market, provide greater control 

over the circumstances of executions, 

and provide an opportunity for 

enhanced executions. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with and 

furthers the objectives of Section 6(b)(5) 

of the Act, in that it is designed to 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanisms of a free and 

open market and a national market 

system and, in general, to protect 

investors and the public interest, by 

providing investors with additional 

order types that allow greater flexibility 

in maintaining compliance with the 

rules, or providing an opportunity for 

enhanced executions, or managing the 

circumstances in which their orders are 

executed. 

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 Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 8 and Rule 

19b–4(f)(6) thereunder.9 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 

prior to 30 days from the date on which 

it was filed, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, the 

proposed rule change has become 

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

of the Act 10 and Rule 19b–4(f)(6)(iii) 

thereunder.11

At any time within 60 days of the 

filing of such 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–NYSEArca–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–NYSEArca2009–27. 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 self-regulatory 

organization. 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–2009–27 and should be 

submitted on or before May 11, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–8960 Filed 4–17–09; 8:45 am] 

BILLING CODE 8010–01–P 


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