60380 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

9 15 U.S.C. 78f(b)(5). 

10 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a et SEC [sic]. 

3 17 CFR 240.19b–4. 

Penny Stock Rule’s remaining 

requirements. 

Companies listing under the NYSE 

Arca Transfer Standard will have to 

comply with all other applicable 

Exchange listing rules, including the 

Exchange’s corporate governance 

requirements. As with all other listing 

applicants, the Exchange reserves the 

right to deny listing to any company 

seeking to list under the NYSE Arca 

Transfer Standard if the Exchange 

determines that the listing of any such 

company is not in the interests of the 

Exchange or the public interest. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 9 that an exchange 

have rules that are designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to remove 

impediments to, and perfect the 

mechanism of a free and open market 

and, in general, to protect investors and 

the public interest. The Exchange 

believes that the proposed amendment 

is consistent with the protection of 

investors and the public interest in that 

the requirements of the NYSE Arca 

Transfer Standard are sufficiently 

stringent that the proposed amendment 

will not lead to the listing of any 

companies that are not suited for listing 

on the NYSE. In addition, the proposal 

applies for a very brief period to a small 

number of companies that are subject to 

unique and disadvantageous 

circumstances. 

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 purpose of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

Written comments were neither 

solicited nor received. 

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 self-regulatory 

organization 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. 

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 Exchange 

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–2008–97 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–97. 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–NYSE–2008–97 and should 

be submitted on or before October 31, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24178 Filed 10–9–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58736; File No. SR–NYSE– 

2008–91] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

New York Stock Exchange LLC To 

Adopt a Policy Relating to its 

Treatment of Trade Reports That It 

Determines To Be Inconsistent With 

the Prevailing Market 

October 6, 2008. 

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

Securities Exchange Act of 1934 (the 

‘‘Exchange Act’’),2 and Rule 19b–4 

thereunder,3 notice is hereby given that 

on September 26, 2008, New York Stock 

Exchange, LLC (the ‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission the proposed 

rule change as described in Items I, II 

and III 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 adopt a 

policy relating to its treatment of trade 

reports that it determines to be 

inconsistent with the prevailing market. 

The Exchange does not expect that the 

proposed rule change will have any 

direct effect, or significant indirect 

effect, on any other Exchange rule in 

effect at the time of this filing. 

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 these statements may be examined at 

mstockstill on PROD1PC66 with NOTICES

Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 60381 

the places specified in Item IV below. 

The NYSE has prepared summaries, set 

forth in Sections A, B and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Trades in listed securities 

occasionally occur at prices that deviate 

significantly from prevailing market 

prices and those trades sometimes 

establish a high, low or last sale price 

for a security that does not reflect the 

true market for the security. 

The Consolidated Tape Association 

(‘‘CTA’’) offers each Participant in the 

CTA Plan the discretion to append an 

indicator (an ‘‘Aberrant Report 

Indicator’’) to a trade report to indicate 

that the market believes that the trade 

price in a trade executed on that market 

does not accurately reflect the 

prevailing market for the security. The 

CTA recommends that data recipients 

should exclude the price of any trade to 

which the Aberrant Report Indicator has 

been appended from any calculation of 

the high, low and last sale prices for the 

security. 

The Exchange proposes to adopt as 

policies of the Exchange: 

i. That it shall monitor for trade prices 

that do not accurately reflect the 

prevailing market for a security; 

ii. That it shall append an Aberrant 

Report Indicator to any trade report with 

respect to any trade executed on the 

Exchange that the Exchange determines 

to be inconsistent with the prevailing 

market; and 

iii. That it shall discourage vendors 

and other data recipients from using 

prices to which the Exchange has 

appended the Aberrant Report Indicator 

in any calculation of the high, low or 

last sale price of a security. 

The Exchange shall act retroactively 

to append the Aberrant Report Indicator 

to trades that do not accurately reflect 

the prevailing market for a security 

commencing as of January 1, 2007. 

The Exchange will urge vendors to 

disclose the exclusion from high, low or 

last sale price data of any aberrant 

trades excluded from high, low or last 

sale price information they disseminate 

and to provide to data users an 

explanation of the parameters used in 

the Exchange’s aberrant trade policy. 

Upon initial adoption of the Aberrant 

Report Indicator, the Exchange will also 

contact all of its listed companies to 

explain the aberrant trade policy and 

will notify users of the information that 

these are still valid trades. The 

Exchange will inform the affected listed 

company each time the Exchange or 

another market appends the Aberrant 

Report Indicator to a trade in an NYSElisted stock and will remind the users of 

the information that these are still valid 

trades in that they were executed and 

not unwound as in the case of a clearly 

erroneous trade. 

While the CTA disseminates its own 

calculations of high, low and last sale 

prices, vendors and other data 

recipients—and not the Exchange— 

frequently determine their own 

methodology by which they wish to 

calculate high, low and last sale prices. 

Therefore, the Exchange shall endeavor 

to explain to those vendors and other 

data recipients the deleterious effects 

that can result from including in the 

calculations a trade to which the 

Aberrant Report Indicator has been 

appended. 

In making the determination to 

append the Aberrant Report Indicator, 

the Exchange shall consider all factors 

related to a trade, including, but not 

limited to, the following: 

• Material news released for the 

security; 

• Suspicious trading activity; 

• System malfunctions or 

disruptions; 

• Locked or crossed markets; 

• A recent trading halt or resumption 

of trading in the security; 

• Whether the security is in its initial 

public offering; 

• Volume and volatility for the 

security; 

• Whether the trade price represents 

a 52-week high or low for the security; 

• Whether the trade price deviates 

significantly from recent trading 

patterns in the security; 

• Whether the trade price reflects a 

stock-split, reorganization or other 

corporate action; 

• The validity of consolidated tape 

trades and quotes in comparison to 

national best bids and offers; and 

• The general volatility of market 

conditions. 

Currently, the Exchange does not 

trade on an unlisted trading privilege 

(‘‘UTP’’) basis any securities listed on 

other markets. In the event that the 

Exchange commences UTP trading at 

some future date, the Exchange 

proposes that its policy shall be to 

consult with the listing exchange (if the 

Exchange is not the listing exchange) 

and with other markets (in the case of 

executions that take place across 

multiple markets) and to seek a 

consensus as to whether the trade price 

is consistent with the prevailing market 

for the security. 

In monitoring trade prices that may be 

inconsistent with the prevailing market, 

the Exchange proposes that Exchange 

policy shall be to follow the following 

general guidelines: The Exchange will 

review whether a trade price does not 

reflect the prevailing market for a 

security if the trade occurs during 

regular trading hours (i.e., 9:30 a.m. to 

4 p.m.) and occurs at a price that 

deviates from the ‘‘Reference Price’’ by 

an amount that meets or exceeds the 

following thresholds: 

Trade price 

Numerical 

threshold 

(percent) 

Between $0 and $15.00 ........... 7 

Between $15.01 and $50.00 .... 5 

In excess of $50.00 .................. 3 

The ‘‘Reference Price’’ refers to (a) if 

the primary market for the security is 

open at the time of the trade, the 

national best bid or offer for the 

security, or (b) if the primary market for 

the security is not open at the time of 

the trade, the first executable quote or 

print for the security on the primary 

market after execution of the trade in 

question. However, if the circumstances 

suggest that a different Reference Price 

would be more appropriate, the 

Exchange will use the different 

Reference Price. For instance, if the 

national best bid and offer for the 

security are so wide apart as to fail to 

reflect the market for the security, the 

Exchange might use as the Reference 

Price a trade price or best bid or offer 

that was available prior to the trade in 

question. 

If the Exchange determines that a 

trade price does not reflect the 

prevailing market for a security and the 

trade represented the last sale of the 

security on the Exchange during a 

trading session, the Exchange may also 

determine to remove that trade’s 

designation as the last sale. The 

Exchange may do so either on the day 

of the trade or at a later date, so as to 

provide reasonable time for the 

Exchange to conduct due diligence 

regarding the trade, including the 

consideration of input from markets and 

other market participants. 

The Exchange has always monitored 

for trade prices that do not accurately 

reflect the prevailing market for a 

security. For more than a year, the 

Exchange has embraced the policy of 

discouraging vendors and other data 

recipients from including trade reports 

that are inconsistent with the prevailing 

market in their calculations of high, low 

and last sale prices. The Exchange 

proposes to use the Aberrant Report 

Indicator in accordance with the 

mstockstill on PROD1PC66 with NOTICES

60382 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Notices 

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

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

6 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. 

guidelines set forth above. Where 

appropriate, the Exchange may apply 

the Aberrant Report Indicator to trades 

that were reported prior to the adoption 

of this policy. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Exchange Act,4 in 

general, and furthers the objectives of 

Section 6(b)(5) of the Exchange Act,5 in 

particular in that it is designed to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 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. 

In particular, the Aberrant Report 

Indicator is consistent with the 

protection of investors and the public 

interest in that the Exchange will seek 

to ensure a proper understanding of the 

Aberrant Report Indicator among 

securities market participants by: (i) 

Urging vendors to disclose the exclusion 

from high, low or last sale price data of 

any aberrant trades excluded from high, 

low or last sale price information they 

disseminate and to provide to data users 

an explanation of the parameters used 

in the Exchange’s aberrant trade policy; 

(ii) informing the affected listed 

company each time the Exchange or 

another market appends the Aberrant 

Report Indicator to a trade in an NYSElisted stock; and (iii) reminding the 

users of the information that these are 

still valid trades in that they were 

executed and not unwound as in the 

case of a clearly erroneous trade. 

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 Exchange Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

From time to time, the Exchange has 

received comments from representatives 

of its listed companies that a trade 

report for a transaction in the stock of 

that listed company is inconsistent with 

the prevailing market for that stock and 

that the inconsistent trade price has 

inappropriately distorted the high, low 

and last sale price calculations for the 

listed company. While those 

commenters have not submitted formal, 

written comments on the proposal, the 

Exchange has incorporated some of their 

ideas into the proposal and this 

proposed rule change reflects their 

input. The Exchange has not received 

any unsolicited written comments from 

members or other interested parties. 

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 self-regulatory 

organization 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. 

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 Exchange 

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–2008–91 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSE–2008–91. 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–NYSE–2008–91 and should 

be submitted on or before October 31, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–24181 Filed 10–9–08; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58740; File No. SR–NYSE– 

2008–98] 

Self-Regulatory Organizations; Notice 

of Filing by New York Stock Exchange 

LLC To Adopt an Additional Initial 

Listing Standard for Operating 

Companies 

October 6, 2008. 

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 October 

1, 2008, New York Stock Exchange LLC 

(‘‘NYSE’’ or ‘‘the Exchange’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule changes as described in 

Items I, II and III below, which items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule changes from interested 

persons. 

mstockstill on PROD1PC66 with NOTICES