[Federal Register Volume 74, Number 121 (Thursday, June 25, 2009)]
[Notices]
[Pages 30349-30351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14961]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60140; File No. SR-NYSEAmex-2009-27]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Relating to WAIT 
Modifiers, PNP Plus Orders, and Attributable Orders

June 18, 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 June 8, 2009, NYSE Amex LLC (``NYSE Amex'' 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 prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 900.3NY to (i) offer the 
``WAIT'' order modifier for use with orders entered into the NYSE Amex 
System; (ii) allow the use of attributable orders (iii) offer PNP Plus 
orders. The WAIT modifier is designed to enhance compliance with the 
order exposure requirement of NYSE Amex Rule 935NY. 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 May 21, 2009, the Securities and Exchange Commission approved 
NYSE Amex's proposal to reduce the order exposure requirement of Rule 
935NY from three seconds to one second.\3\ Rule 935NY 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 insures that a User 
does not gain at the expense of customers by depriving them of the 
opportunity to interact with orders in the NYSE Amex System.
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    \3\ See Exchange Act Release No. 59956 (May 21, 2009), 74 FR 
25782 (May 29, 2009) (SR-NYSEAmex-2009-15) (Order Granting 
Accelerated Approval of Proposed Rule Change, as Modified by 
Amendment No. 1, Amending Rule 935NY--Order Exposure Requirements to 
Reduce the Exposure Periods from Three Seconds to One Second).
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    Users that enter agency orders into the NYSE Amex 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 Amex 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 Amex believes this is an efficient use of 
resources because it will allow NYSE Amex to program its System once 
rather than have multiple Users re-program their systems.
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    \4\ See Exchange Act Release No. 59557 (March 11, 2009), 74 FR 
11389 (March 17, 2009) (SR-NASDAQ-2009-017).
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    In order to accomplish that request, NYSE Amex has developed the 
``WAIT'' modifier which can be appended to an order prior to entry into 
the NYSE Amex 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 Amex System or any other 
obligations of Users as set forth in the NYSE Amex rules.
    Orders designated with the WAIT modifier are independent of all 
other orders, including an agency order that is being exposed pursuant 
to Rule 935NY. 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 900.3NY (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).
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    \5\ A Firm ID is a 5 character identification code (letters and/
or numbers) Each ATP Holder is assigned its own unique Firm ID.
    \6\ The Chicago Board Options Exchange (``CBOE'') also allows 
attributable orders. See Exchange Act Release No, 58394 (August 20, 
2008), 73 FR 50379 (August 26, 2008) (SR-CBOE-2008-85) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change 
Adopting A New Order Type).

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[[Page 30350]]

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 Amex proposes to adopt an order type 
known as ``PNP Plus.'' PNP Plus Orders are currently offered on the 
NYSE Arca Equities market.\7\
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    \7\ See NYSE Arca Equities Rule 7.31(w)(1).
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    A PNP Order is an order entered into the NYSE Amex 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 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 thereof would otherwise result in locking or crossing the NBBO, 
the PNP order would automatically be re-priced to be one Minimum Price 
Valuation (``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 re-priced 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 re-priced 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 re-ranked 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 Amex order entry options will enhance 
compliance with NYSE Amex rules, preserve order execution opportunities 
on the NYSE Amex 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) thereunder.\11\
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    \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 the pre-filing requirement.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay so that the proposal may become operative immediately upon 
filing. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public interest 
because the proposed rule change is based on existing rules of other 
exchanges \12\ and does not appear to present any novel or significant 
issues. The Commission hereby grants the Exchange's request.\13\
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    \12\ See, e.g., Securities Exchange Act Release No. 59737 (April 
9, 2009) 74 FR 18018 (April 20, 2009) (SR-NYSEArca-2009-27) 
(adopting ``WAIT'' order modifier, attributable orders, and PNP Plus 
order type).
    \13\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#a3d1d6cfc68ec0cccecec6cdd7d0e3d0c6c08dc4ccd5"><span class="__cf_email__" data-cfemail="5123243d347c323e3c3c343f2522112234327f363e27">[email protected]</span></a> Please include 
File Number SR-NYSEAmex-2009-27 on the subject line.

Paper Comments

    <bullet> 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-NYSEAmex-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

[[Page 30351]]

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 will also 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-NYSEAmex-2009-
27 and should be submitted on or before July 16, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-14961 Filed 6-24-09; 8:45 am]
BILLING CODE 8010-01-P


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