[Federal Register Volume 74, Number 133 (Tuesday, July 14, 2009)]
[Notices]
[Page 34068]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-16544]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60251; File No. SR-NYSE-2009-55]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Granting Accelerated Approval to a Proposed Rule Change Amending Rule 
70.25 To Permit All Available Contra-Side Liquidity To Trigger the 
Execution of a d-Quote

July 7, 2009.
    On June 2, 2009, New York Stock Exchange LLC (``NYSE'' or the 
``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 amend Rule 70.25 to permit all available 
contra-side liquidity to trigger the execution of a d-Quote. The 
proposed rule change was published for comment in the Federal Register 
on June 11, 2009.\3\ The Commission received no comments regarding the 
proposal. This order approves the proposed rule change on an 
accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60045 (June 4, 
2009), 74 FR 27854 (``Notice'').
---------------------------------------------------------------------------

    The Exchange proposes to amend Rule 70.25 to expand the categories 
of liquidity that would be considered when determining whether the 
contra-side volume is within the discretionary size range of the d-
Quote.\4\ Currently, only displayed interest is considered by Exchange 
systems in determining whether the d-Quote is triggered. Under the 
proposed rule change, all available contra-side interest at a possible 
execution price of the d-Quote, including undisplayed liquidity, would 
be considered.
---------------------------------------------------------------------------

    \4\ A d-Quote is an e-Quote for which a Floor Broker enters 
discretionary instructions as to size and/or price. See NYSE Rule 
70.25(a)(i). An e-Quote is a broker agency interest file that a 
Floor broker places within the Display Book system. See NYSE Rule 
70(a)(i).
---------------------------------------------------------------------------

    In its filing, the Exchange stated that this rule change would 
provide Floor brokers with a similar functionality that was previously 
available to Floor brokers with a CAP-DI order under former Rule 
123A.30(a).\5\ Under that former rule, an elected CAP-DI order would 
automatically execute against any contra-side volume available at the 
electing price, and was eligible to participate in a sweep.\6\ The 
Exchange also noted that, at the time the CAP order was eliminated, the 
Exchange did not have the technology to replicate a similar 
functionality with d-Quotes.\7\ Since that time, the Exchange has 
introduced two new order types, the Minimum Display Reserve Order, and 
the Non-Displayed Reserve Order.\8\ With the proposed rule change, 
these two order types would be considered when determining whether 
there is sufficient contra-side volume to trigger a d-Quote.
---------------------------------------------------------------------------

    \5\ See Notice at 27855.
    \6\ Id.
    \7\ Id.
    \8\ Id. See also NYSE Rule 13 (Definitions of Orders).
---------------------------------------------------------------------------

    The Commission has carefully reviewed the proposed rule change and 
finds that the proposed rule change is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to a 
national securities exchange \9\ including, in particular, Section 
6(b)(5) of the Act,\10\ which requires that an exchange have rules 
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, protect investors and the 
public interest.
---------------------------------------------------------------------------

    \9\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Because it would provide a d-Quote with access to both displayed 
and undisplayed liquidity, the proposed rule change benefits Floor 
brokers by allowing their d-Quotes to be triggered more often. This 
proposal should also benefit customers by providing them with more 
opportunities to have their non-displayed reserve orders receive 
executions.
    The Commission also finds good cause to approve the proposed rule 
change prior to the thirtieth day after publication in the  Federal 
Register. The Commission notes that no comments were received during 
the 21-day comment period. The Commission believes that the Exchange 
has provided reasonable support for its representation that the 
proposed rule change provides Floor brokers with a functionality 
similar to that previously available with CAP-DI orders. In addition, 
the potential benefits of this proposal to customers, such as the 
increased opportunities for the execution of customer non-displayed 
reserve orders, would be available sooner by approving this proposed 
rule change on an accelerated basis. Therefore, the Commission finds 
good cause, consistent with Section 19(b)(2) of the Act,\11\ to approve 
the proposed rule change on an accelerated basis.
---------------------------------------------------------------------------

    \11\ U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSE-2009-55) be, and it hereby is, 
approved on an accelerated basis.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
---------------------------------------------------------------------------

    \12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Elizabeth M. Murphy,
Secretary.
 [FR Doc. E9-16544 Filed 7-13-09; 8:45 am]
BILLING CODE 8010-01-P