Federal Register / Vol. 74, No. 104 / Tuesday, June 2, 2009 / Notices 26449 

8See, e.g., Securities Exchange Act Release No. 

57712 (April 24, 2008), 73 FR 24100 (May 1, 2008) 

(approving revisions to the Philadelphia Stock 

Exchange’s Obvious Error Rule). 

9See, e.g., CBOE Rule 24.16. 

10See Securities Exchange Act Release No. 57398 

(February 28, 2008), 73 FR 12240 (March 6, 2008). 

11See supra, note 8, and Rule 6.25(a)(5) (relating 

to an erroneous quote in the underlying). 

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 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59655 

(March 30, 2009), 74 FR 15563 (‘‘NYSE Notice’’). 

4See Securities Exchange Act Release No. 59965 

(May 21, 2009) (‘‘NYSE Order’’). 

5See Securities Exchange Act Release No. 58461 

(September 4, 2008), 73 FR 52710 (September 10, 

2008) (SR–FINRA–2008–033); Securities Exchange 

Act Release No. 58514 (September 11, 2008), 73 FR 

54190 (September 18, 2008) (SR–FINRA–2008–039); 

Securities Exchange Act Release No. 58643 

(September 25, 2008), 73 FR 57174 (October 1, 

2008) (SR–FINRA–2008–021, –022, –026, –028, 

–029); Securities Exchange Act Release No. 58660 

(September 26, 2008), 73 FR 57393 (October 2, 

2008) (SR–FINRA–2008–027); Securities Exchange 

Act Release No. 58661 (September 26, 2008), 73 FR 

57395 (October 2, 2008) (SR–FINRA–2008–030); 

and Securities Exchange Act Release No. 59097 

(December 12, 2008), 73 FR 78412 (December 22, 

2008) (SR–FINRA–2008–057). 

6Amendment No. 1 to SR–NYSEALTR–2009–26 

superseded and replaced the original filing in its 

entirety. 

7See Securities Exchange Act Release No. 59656 

(March 30, 2009), 74 FR 15540 (‘‘Notice’’). 

8Amendment No. 2 to SR–NYSEALTR–2009–26 

clarified certain points set forth in the purpose 

section of Amendment No. 1 to SR–NYSEALTR– 

2009–026 relating to certain NYSE Amex Equities 

rules. 

9See 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). 

10 15 U.S.C. 78f. 

conformity with other obvious error 

provisions previously approved by the 

Commission.8 The amendments relating 

to non-CBOE market-makers and ROS 

and HOSS rotations also conform 

CBOE’s rule to rules already approved 

by the Commission.9 The Commission 

believes that expanding the 

applicability of the extended customer 

obvious error notification provision for 

transactions involving certain nonbroker-dealer customer orders that are 

entered before the opening rotation and 

that are executed as part of HAL on the 

opening process or that are executed 

immediately following the opening 

rotation through the Complex Order 

Book would give those customers a 

reasonable amount of time to discover 

an obvious error transaction and to 

request an obvious error review. The 

Commission believes that limiting the 

price adjustment for binary options is 

reasonable and objective in light of the 

payout structure of those options. 

Catastrophic Error 

The Commission believes that the 

proposed catastrophic error provision 

balances the need for certainty of trades 

and mitigating large losses due to errors 

in extreme circumstances through clear 

and objective procedures.10 Moreover, 

the Commission believes that the 

proposed Catastrophic Error Panel, the 

streamlined review process, and the 

proposed fee for unsuccessful claims are 

appropriate to accomplish this balance. 

Erroneous Prints and Quotes in the 

Underlying 

The Commission deems that the 

provision allowing CBOE to designate 

the applicable underlying securities (or 

related instruments) and relevant 

markets for any option is beneficial to 

members in determining whether an 

erroneous print or quote has occurred. 

The provision takes into account the 

fact that members often base their 

options prices on various products in 

various markets and that erroneous 

options transactions may be a result of 

erroneous prints or quotes in markets 

other than the primary market for an 

underlying security. The changes to the 

calculation of average quote width and 

allowing adjustments in addition to 

nullifications are appropriate and 

consistent with other rules previously 

approved by the Commission.11

Trading Officials and Obvious Error 

Panel 

The Commission believes that the 

change to the definition of ‘‘Trading 

Officials’’ is appropriate and does not 

negatively impact the objectiveness or 

fairness of CBOE’s obvious error 

provisions. Lastly, the Commission 

notes that deleting ‘‘non-DPM’’ from the 

definition of floor brokers is a nonsubstantive technical change and is 

appropriate. 

IT IS THEREFORE ORDERED, 

pursuant to Section 19(b)(2) of the 

Act,12 that the proposed rule change 

(SR–CBOE–2009–024) is hereby 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12717 Filed 6–1–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59975; File No. SR– 

NYSEALTR–2009–26] 

Self-Regulatory Organizations; NYSE 

Alternext US LLC; Notice of Filing of 

Amendment No. 2 and Order Granting 

Accelerated Approval to a Proposed 

Rule Change, as Modified by 

Amendment Nos. 1 and 2, Changing 

Certain NYSE Amex Equities Rules To 

Conform Them With Changes to 

Corresponding Rules Filed by the New 

York Stock Exchange LLC 

May 26, 2009. 

I. Introduction 

On March 9, 2009, the NYSE 

Alternext LLC (n/k/a NYSE Amex LLC) 

(‘‘NYSE Amex’’ or ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘Commission’’) pursuant 

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

Exchange Act of 1934 (‘‘Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change to make changes to certain NYSE 

Amex Equities rules, to be effective 

retroactively to December 15, 2008, to 

conform them with changes to 

corresponding rules filed by the New 

York Stock Exchange LLC (‘‘NYSE’’) on 

March 9, 2009,3 and approved by the 

Commission on May 21, 2009.4 NYSE 

had proposed the rule changes 

described in the NYSE Notice to 

harmonize NYSE rules with 

corresponding rules that were filed by 

the Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’), and 

approved by the Commission or were 

effective upon filing with the 

Commission.5 On March 27, 2009, the 

Exchange filed Amendment No. 1 to the 

proposed rule change.6 The proposed 

rule change was published in the 

Federal Register on April 6, 2009.7 The 

Commission received no comments on 

the proposal. On May 11, 2009, the 

Exchange filed Amendment No. 2 to the 

proposed rule change.8 This order 

provides notice of the proposed rule 

change, as modified by Amendment No. 

2, and approves the proposed rule 

change, as amended, on an accelerated 

basis. 

II. Description of the Proposal 

NYSE Euronext acquired The Amex 

Membership Corporation (‘‘AMC’’) 

pursuant to an Agreement and Plan of 

Merger, dated January 17, 2008 

(‘‘Merger’’).9 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 Amex US LLC, and continues to 

operate as a national securities exchange 

registered under Section 6 of the Act.10

26450 Federal Register / Vol. 74, No. 104 / Tuesday, June 2, 2009 / Notices 

11See Securities Exchange Act Release No. 58705 

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

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

Relocation). 

12See 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 Amex 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 Amex Equities to 

track changes to corresponding NYSE Rule 62). 

13See NYSE Notice, supra note 3. 

14The current FINRA rulebook consists of three 

sets of rules: (1) NASD Rules, (2) rules and rule 

interpretations incorporated from the NYSE 

(‘‘FINRA Incorporated NYSE Rules’’) (together, 

referred to as the ‘‘Transitional Rulebook’’), and (3) 

consolidated FINRA Rules. The FINRA 

Incorporated NYSE Rules apply only to those 

members of FINRA that are also members of the 

NYSE (‘‘Dual Members’’), while the consolidated 

FINRA Rules apply to all FINRA members. 

15Pursuant to Rule 17d–2 under the Act, NYSE, 

NYSER and NASD entered into an agreement (the 

‘‘Rule 17d–2 Agreement’’) to reduce regulatory 

duplication for Dual Members by allocating to 

FINRA regulatory responsibility for specified NYSE 

rules (the ‘‘Common Rules’’). See Securities 

Exchange Act Release No. 56148 (July 26, 2007), 72 

FR 42146 (August 1, 2007) (Notice of Filing and 

Order Approving and Declaring Effective a Plan for 

the Allocation of Regulatory Responsibilities). The 

Common Rules include the FINRA Incorporated 

NYSE Rules. See Securities Exchange Act Release 

No. 56147 (July 26, 2007), 72 FR 42166 (August 1, 

2007) (Notice of Filing and Order Granting 

Accelerated Approval of Proposed Rule Change To 

Incorporate Certain NYSE Rules Relating to Member 

Firm Conduct) (SR–NASD–2007–054). Paragraph 

2(b) of the Rule 17d-2 Agreement sets forth 

procedures regarding proposed changes by either 

NYSE or FINRA to the substance of any of the 

Common Rules. 

16See NYSE Notice, supra note 3. 

17See NYSE Order, supra note 4. 

18See Notice, supra note 7. 

19 15 U.S.C. 78f. 20 In approving this proposed rule change, as 

amended, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

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

21 15 U.S.C. 78f(b)(5). 

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 (‘‘Equities 

Relocation’’). The Exchange’s equity 

trading systems and facilities at 11 Wall 

Street (‘‘NYSE Amex Trading Systems’’) 

are operated by the NYSE on behalf of 

the Exchange.11

As part of the Equities Relocation, 

NYSE Amex adopted NYSE Rules 1– 

1004, subject to such changes as 

necessary to apply those rules to the 

Exchange as the NYSE Amex Equities 

Rules to govern trading on the NYSE 

Amex Trading Systems.12 The NYSE 

Amex 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 Amex 

Equities Rules as necessary to conform 

them with rule changes to 

corresponding NYSE Rules filed by the 

NYSE. 

As noted above, the Exchange 

proposes to change certain NYSE Amex 

Equities Rules to conform them with 

changes to corresponding NYSE Rules 

that were described in the NYSE 

Notice.13 On July 30, 2007, the National 

Association of Securities Dealers, Inc. 

(‘‘NASD’’), and NYSE Regulation, Inc., 

the regulatory subsidiary of the NYSE, 

consolidated their member firm 

regulation operations into FINRA. In 

connection with that consolidation, 

FINRA is in the process of establishing 

a consolidated FINRA rulebook 

(‘‘Consolidated FINRA Rulebook’’) 14

that will harmonize NASD rules and 

certain NYSE rules related to member 

firm regulation.15 All of these rules will 

be identified as ‘‘FINRA Rules’’ when 

the rule consolidation process is 

completed. 

To reduce regulatory duplication, the 

Exchange proposes to conform several 

NYSE Amex Equities rules with changes 

to corresponding rules that were filed by 

the NYSE 16 and recently approved by 

the Commission.17 The Notice provides 

a more detailed description of the 

Exchange’s proposed rule changes.18

III. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change, as amended, 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–2009–026 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–2009–26. 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 such 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–2009–26 and 

should be submitted on or before June 

23, 2009. 

IV. Discussion and Commission’s 

Findings 

The Commission has carefully 

reviewed the proposed rule change, as 

amended, and finds that it is consistent 

with the requirements of Section 6 of 

the Act 19 and the rules and regulations 

thereunder applicable to a national 

securities exchange.20 In particular, the 

Commission finds that the proposed 

rule change, as amended, is consistent 

with Section 6(b)(5) of the Act,21 which 

requires, among other things, that the 

Exchange’s rules be 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 a national market system, and, in 

general, to protect investors and the 

public interest. 

NYSE Amex is deleting certain rules 

pertaining to: (1) Compensation or 

gratuities to employees of others; (2) 

business conduct, trading against firm 

Federal Register / Vol. 74, No. 104 / Tuesday, June 2, 2009 / Notices 26451 

22See NYSE Order, supra note 4. 23Telephone conversation between Clare F. 

Saperstein, Managing Director, NYSE Regulation, 

Inc., and Nancy J. Burke-Sanow, Assistant Director, 

Division of Trading and Markets, Commission, May 

21, 2009. 

24 15 U.S.C. 78f. 

25 15 U.S.C. 78s(b)(2). 

26 15 U.S.C. 78s(b)(2). 

27 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a et seq. 

3 17 CFR 240.19b–4. 

4The Exchange and Commission staff agreed to 

several clarifying changes in text of Items I, II, and 

III during a telephone conversation between 

Andrew Stevens, Chief Counsel U.S. Equities and 

Derivatives, Exchange, and Darren Vieira, Attorney 

Advisor, Division of Trading and Markets, 

Commission on May 21, 2008. 

5The proposed filing is being done pursuant to 

an industry-wide initiative under the auspices of 

the Options Self-Regulatory Council (‘‘OSRC’’), 

which is a committee comprised of representatives 

from each of the options exchanges functioning 

pursuant to the OSRC Plan (the ‘‘Plan’’). See 

Securities Exchange Act Release No. 20158 

(September 8, 1983), 48 FR 41256 (September 14, 

1983). The Plan is not a National Market System 

(‘‘NMS’’) plan under Section 11A of the Act, but 

rather is a plan to allocate regulatory 

responsibilities under Rule 17d–2 under the Act. 17 

CFR 240.17d–2. As a result of the introduction of 

multiply listed options and the introduction of the 

Plan for the Purpose of Creating and Operating an 

Intermarket Options Market Linkage (‘‘Options 

Linkage Plan’’), the contracts in a customer options 

order could be executed on more than one options 

Continued 

recommendations, and private sales; (3) 

excessive trading by members, excessive 

trading in discretionary accounts, 

successive transactions by members, 

manipulative operations, reopening 

contracts, and loans for accounts of nonmembers; (4) disciplinary proceedings 

concerning conduct that is inconsistent 

with just and equitable principles of 

trade; (5) reporting of certain 

information concerning short sales and 

proprietary transactions; (6) reporting 

and certification of member or member 

organization’s supervision and 

compliance efforts; (7) formation and 

approval or merger organizations; (8) 

reporting of short positions; (9) 

notification requirements for listed 

securities; and (10) disclosure and 

monitoring of non-managed fee based 

accounts. In place of the deleted rules 

and interpretations, NYSE Amex 

proposes to adopt rules that conform the 

NYSE Amex Equities Rules with 

changes made to the corresponding 

NYSE Rules on which they are based.22

The Commission believes that the 

proposed rule change, as amended, is 

appropriate and would provide greater 

harmonization among NYSE Rules, 

NYSE Amex Equities Rules and FINRA 

Rules, thereby resulting in less 

burdensome and more efficient 

regulatory compliance for their common 

members and member organizations. 

With respect to the Exchange’s proposal 

to delete NYSE Amex Equities Rule 350 

and to adopt NYSE Amex Equities Rule 

3220, (relating to influencing or 

rewarding employees of others), the 

Commission notes that NYSE Amex has 

stated that, immediately upon 

Commission approval of new NYSE 

Amex Equities Rule 3220, it will issue 

an Information Memorandum to its 

members and member organizations 

including NYSE Amex-only members 

and those members registered with 

FINRA, clarifying that FINRA’s 

interpretive guidance related to FINRA 

Rule 3220 is considered part of NYSE 

Amex Equities Rule 3220, and that such 

members and member organizations are 

required to regulate their conduct 

according to Rule 3220 and the 

interpretive guidance related to FINRA 

Rule 3220.23 Accordingly, the 

Commission believes that the proposed 

rule change, as amended, is consistent 

with the requirements of the Act. 

The Commission also finds good 

cause for approving the proposed rule 

change as modified by Amendment No. 

2 prior to the thirtieth day after the date 

of publication of notice in the Federal 

Register. Amendment No. 2 simply 

clarifies certain points relating to 

proposed changes to NYSE Amex 

Equities Rules. Because Amendment 

No. 2 does not significantly alter the 

proposed rule change, which was 

subject to a full notice and comment 

period, the Commission finds that it is 

in the public interest to approve the 

proposed rule change, as modified by 

Amendment No. 2, without delay to 

expedite implementation. Accordingly, 

the Commission finds that there is good 

cause, consistent with and in 

furtherance of the objectives of Sections 

6 24 and 19(b)(2) 25 of the Exchange Act, 

to approve Amendment No. 2 on an 

accelerated basis. 

V. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,26 that the 

proposed rule change (SR–NYSEALTR– 

2009–26) be, and it hereby is, approved 

on an accelerated basis. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–12714 Filed 6–1–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–59978; File No. SR– 

NYSEArca–2009–41] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Exchange 

Rules Related to Doing a Public 

Business in Options 

May 27, 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 May 7, 

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 

below, which Items have been 

substantially prepared by the 

Exchange.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 

Exchange Rule 9.18—Doing a Public 

Business in Options. The text of the 

proposed rule change 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 

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 these 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend Exchange Rule 

9.18(f) to provide that the market on 

which an options transaction is 

executed need not be disclosed on a 

written confirmation furnished to a 

customer of an Options Trading Permit 

Holder (‘‘OTP Holder’’) or Options 

Trading Permit Firm (‘‘OTP Firm’’).5