34822 Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to submit to the Commission written notice of its 

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. 

11 17 CFR 240.19b–4(f)(6). 

12 17 CFR 240.19b–4(f)(6)(iii). 

13For purposes only of waiving the 30-day 

operative delay of this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

14 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. 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(6). 

with Floor brokers at the point of sale 

is consistent with the above principles 

because it will increase the possibility 

of executions for the public orders on 

the Exchange in those situations where 

DMMs add interest to facilitate an 

execution. 

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 

Because the foregoing proposed rule 

change: (i) Does not significantly affect 

the protection of investors or the public 

interest; (ii) does not impose any 

significant burden on competition; and 

(iii) by its terms, does not become 

operative for 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 9 and Rule 19b– 

4(f)(6) thereunder.10

A proposed rule change filed under 

Rule 19b–4(f)(6) 11 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),12 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. 

The Exchange has requested that the 

Commission waive the 30-day operative 

delay in order to permit the Exchange to 

immediately implement modifications 

to its systems to require certain DMM 

interest to yield to other interest on the 

Display Book during slow trading 

conditions, as discussed in full above, 

which should increase the quality of 

executions on the Exchange, including 

public customer orders. The 

Commission believes such waiver is 

consistent with the protection of 

investors and the public interest.13

Accordingly, the Commission 

designates the proposed rule change 

operative upon filing with the 

Commission. 

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 

• 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–2009–69 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–NYSE–2009–69. 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 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–NYSE– 

2009–69 and should be submitted on or 

before August 7, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–17013 Filed 7–16–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60289; File No. SR–NYSE– 

2009–68] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Amending NYSE 

Rules 60, 70 and 1000 To Reflect 

Modifications to the Manner in Which 

the Exchange Will Quote and Trade 

With Respect to Liquidity 

Replenishment Points 

July 10, 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 July 9, 

2009, New York Stock Exchange LLC 

(‘‘NYSE’’ 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 self-regulatory 

organization. The Exchange filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A) of the Act 4 and Rule 

19b–4(f)(6) thereunder,5 which renders 

it effective upon filing with the 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 34823 

6LRPs are pre-determined price points that 

temporarily convert the automatic Exchange market 

to an auction market in order to dampen volatility 

when the market is experiencing a large price 

movement based on a security’s typical trading 

characteristics or market conditions over short 

periods of time during the trading day. LRPs allow 

the DMM to solicit additional liquidity. 

7See SR–NYSEAmex–2009–39. 

8Exchange systems automatically prevent a dQuote from using its price discretion to trade at an 

LRP price. 

9The Display Book® system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

DMMs, contains the Book, and provides a 

mechanism to execute and report transactions and 

publish the results to the Consolidated Tape. The 

Display Book system is connected to a number of 

other Exchange systems for the purposes of 

comparison, surveillance, and reporting 

information to customers and other market data and 

national market systems. 

Commission. 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 

NYSE Rules 60 (Dissemination of 

Quotations), 70 (Execution of Floor– 

Broker Interest) and 1000 (Automatic 

Executions) to reflect modifications to 

the manner in which the Exchange will 

quote and trade with respect to 

Liquidity Replenishment Points. The 

text of the proposed rule change is 

available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

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 

New York Stock Exchange LLC 

(‘‘NYSE’’ or the ‘‘Exchange’’) proposes 

to amend Exchange Rules 60 

(Dissemination of Quotations), 70 

(Execution of Floor Broker Interest) and 

1000 (Automatic Executions) to reflect 

modifications to the manner in which 

the Exchange will quote and trade with 

respect to Liquidity Replenishment 

Points (‘‘LRPs’’).6 As proposed, LRPs 

will convert the Display Book to an 

auction market by causing autoquote to 

be suspended only when an LRP is 

reached that will result in a locked or 

crossed market condition on the 

Exchange or with respect to an away 

market center (‘‘lock/cross’’) or where 

the next action required is to 

consummate a trade. Once the locked/ 

crossed condition is cleared or the 

required trade is consummated, the 

automatic quoting and executions will 

resume immediately without any pre-set 

timing delays. As such, the proposal 

will allow Exchange systems to quote 

interest through an LRP price point 

without converting the Exchange market 

to an auction market where the next 

required action is simply to quote the 

interest. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of the NYSE Amex LLC (formerly 

the American Stock Exchange).7

a. Background 

The Exchange uses LRPs to 

temporarily convert the automatic 

Exchange market to an auction market 

in order to dampen volatility when the 

market is experiencing a large price 

movement based on a security’s typical 

trading characteristics or market 

conditions over short periods of time 

during the trading day. For example, a 

large sized order on one side of the 

market, or a series of orders that will 

trade beyond the current market could 

cause the price of a security to move to 

its current LRP value. Conversion to an 

auction market as a result of an LRP 

allows the Exchange to solicit additional 

liquidity. 

Floor broker interest with 

discretionary trading instructions (‘‘dQuotes’’) is prohibited from triggering 

an LRP. Specifically, a d-Quote 

participating in a sweep transaction 

cannot use its price discretion to trade 

at a price that would trigger an LRP.8 dQuotes were designed in this manner so 

they would not cause the Exchange’s 

market to ‘‘go slow’’ by triggering an 

LRP. It should also be noted that a dQuote cannot cause a lock/cross market 

because the d-Quote only trades at 

prices within its designated discretion 

but does not quote at a price using its 

price discretion. 

b. Functioning of Autoquote and 

Auomatic [sic] Executions 

Autoquote is a part of the Display 

Book® 9 that immediately displays 

customer limit orders received on the 

Exchange. When autoquote is 

suspended, it is suspended on both 

sides of the market. The Exchange will 

publish a ‘‘slow’’ quote (i.e., one that is 

not eligible for automatic execution) 

when autoquote is suspended. The 

Exchange can also publish a slow quote 

on one side of the market, under certain 

market conditions, such as when there 

is no interest on one side of the market. 

Pursuant to NYSE Rule 60, autoquote 

is suspended when an LRP is reached 

and resumes in no more than ten 

seconds after the LRP is reached. 

Specifically, NYSE Rule 60(d)(ii)(C) 

provides that autoquoting is suspended 

when an LRP is reached, that is, if an 

automatic execution would take place at 

or beyond an LRP. When autoquoting is 

suspended in this situation, the Display 

Book ‘‘goes slow’’, i.e., quotes and 

trading in that security do not take place 

automatically. Pursuant to current Rule 

60, autoquoting will resume in no more 

than ten seconds (but usually in five 

seconds) after an LRP is reached. 

Autoquoting resumes unless there is 

interest on the Display Book system that 

would lock/cross the market. In such 

case, autoquoting will resume following 

a manual transaction. 

For example, if the market on the 

Exchange for a security is 20.10 bid and 

20.15 offered. The designated LRP for 

this security is at a price of 20.15 on the 

offer side. A buy order is received to lift 

the offer at 20.15. Exchange systems will 

execute the buy order against the 

interest at 20.15 and then suspend 

autoquote. Autoquote resumes in no 

more than ten seconds unless there is 

interest on the NYSE Display Book 

system that would lock/cross the 

market. An example of this would be if 

in the same market situation after 

autoquote suspended, interest arrived to 

sell below the bid price (e.g., sell at 

20.09 or below), the market would be 

‘‘crossed’’. In such case, autoquote will 

resume after a manual transaction, 

conducted by the DMM to trade out of 

the cross market and resume automatic 

quoting. 

Similarly, pursuant to NYSE Rule 

1000(a)(iv), automatic executions are 

suspended when an LRP is reached, and 

resume pursuant to the same parameters 

for the resumption of autoquote. 

Automatic executions on the Exchange 

are suspended when autoquote is 

suspended. In certain instances, 

autoquote is available to disseminate a 

slow quote. This may occur on either 

the bid or offer side or both sides of the 

market. In instances when autoquote is 

disseminating a slow quote, auto 

executions will not be available against 

the quote that is slow. 

mstockstill on DSKH9S0YB1PROD with NOTICES

34824 Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 

10The Exchange notes that in its experience it 

does not often receive additional liquidity in the 

prescribed amount of time during LRP situations 

where the next required action is to quote the 

remaining interest, and, therefore, the Exchange 

believes that allowing for the continuation of 

autoquoting will be beneficial to its market. 

11The Exchange is working on technology to 

replicate certain manual functions currently done 

by the individual DMM, including trading out of 

LRPs that would lock/cross the market. The 

proposed change to Rule 60(d) will thus have the 

effect of providing for the resumption of 

Autoquoting when a locked/crossed market is 

cleared manually or automatically. 

Pursuant to current NYSE Rules, once 

an LRP is reached interest may not 

quote through the price point. For 

example the Exchange market is 500 

shares bid 20.10 and 300 shares offered 

at 20.15. The designated LRP for this 

security is at a price of 20.15 on the 

offer side. An order to buy 600 shares 

with a limit price of 20.16 is received. 

There is no interest offered on the 

Display Book at 20.16. The next offer is 

400 shares at 20.20. The order will 

execute 300 shares at 20.15. Thereafter, 

autoquote and automatic executions 

will be suspended. No more than ten 

seconds later, the quote will be updated 

to reflect the new bid price of 20.16 and 

the new offer price of 20.20 and auto 

quote and auto execution will resume. 

Similarly, pursuant to current NYSE 

Rules interest may also not trade 

through the price point. Again, the 

Exchange market is 500 shares bid 20.10 

and 300 shares offered at 20.15. The 

designated LRP for this security is at a 

price of 20.15 on the offer side. An order 

to buy 600 shares with a limit price of 

20.16 is received. There are 200 shares 

offered on the Display Book at 20.16 and 

the next offer on the Display Book is for 

400 shares at 20.20. The order will 

execute 300 shares at 20.15. Thereafter, 

autoquote and automatic executions 

will be suspended. The DMM will 

manually execute an additional 200 

shares of the order at 20.16 and auto 

quote and auto execution will resume. 

The Exchange quote will be updated to 

reflect 100 shares bid at 20.16 and 400 

shares offered at the price of 20.20. 

c. Proposed Amendment to NYSE Rules 

In order to have the Exchange market 

increase the amount of continuous 

automatic quoting and executions, it is 

proposed to reduce the number of 

situations when an LRP converts the 

Exchange to a manual market. The 

Exchange is proposing to allow 

Exchange systems to quote interest 

through an LRP price point without 

converting the Exchange market to an 

auction market where the next required 

action is simply to quote. In the event 

a trade is required after reaching an 

LRP, the Exchange market will continue 

to be converted to an auction market. 

In instances where the next action 

after the LRP would be to quote because 

there is no interest capable of trading at 

the relevant price point, the Exchange 

proposes to have the Display Book®

maintain fast market conditions and not 

convert to a manual market for any 

period of time. Rather, interest will be 

immediately and automatically quoted 

and available for automatic executions. 

As proposed, an LRP will convert the 

Display Book to an auction market when 

an automated quote following such LRP 

would result in a locked/crossed market 

condition. Once the locked/crossed 

condition is cleared, automatic quoting 

and executions will resume 

immediately without any pre-set timing 

delays. 

The Exchange believes that in certain 

situations, when an LRP is reached, and 

there is not a locked/crossed market 

situation, keeping autoquote active is 

beneficial to the market since interest on 

the Display Book will continue to be 

autoquoted, and therefore available for 

automatic executions.10 For example, 

suppose the market on the NYSE is 

20.10 bid and 20.15 offered, last sale at 

19.90, with the current LRP for this 

security at 20.15 on the offer side since 

the LRP is .25. If there is incoming 

interest that would trade up to the .15 

offer, and there is interest on the 

Display Book to sell at .16, the Exchange 

believes the .16 offer should be eligible 

for autoquoting and, therefore, 

automatic execution, rather than the 

Exchange’s market having to go slow. 

Therefore, the Exchange proposes to 

amend NYSE Rule 60(d) to allow 

autoquote to continue when an LRP is 

reached if the market on the Exchange 

is not locked/crossed. For example the 

Exchange market is 500 shares bid 20.10 

and 300 shares offered at 20.15. The 

designated LRP for this security is at a 

price of 20.15 on the offer side. An order 

to buy 600 shares with a limit price of 

20.16 is received. There is no interest 

offered on the Display Book at 20.16. 

The next offer is 400 shares at 20.20. 

The order will execute 300 shares at 

20.15. Autoquote and automatic 

executions will not be suspended. 

Thereafter autoquote will reflect the 

new quote of 300 shares bid at a price 

of 20.16 and 400 shares offered at a 

price of 20.20. 

Pursuant to the proposal, there will be 

no interruption of autoquote unless the 

market would be locked/crossed by the 

interest that would be autoquoted. 

Moreover, Exchange systems will still 

not allow the Display Book to trade 

through an LRP. As such, if the 

Exchange market is 500 shares bid 20.10 

and 300 shares offered at 20.15. The 

designated LRP for this security is at a 

price of 20.15 on the offer side. An order 

to buy 600 shares with a limit price of 

20.16 is received. There are 200 shares 

offered on the Display Book at 20.16 and 

the next offer on the Display Book is 400 

shares at 20.20. The order will execute 

300 shares at 20.15. Thereafter, 

autoquote and automatic executions 

will be suspended as it is today. The 

DMM must intervene to execute the 

additional 200 shares of the order at 

20.16. Autoquoting will also resume as 

soon as a locked/crossed market is 

cleared by a manual execution or 

cancellation of the locking/crossing 

interest.11

The Exchange further proposes to 

amend NYSE Rule 1000(a)(iv) to allow 

for the continuation of automatic 

execution unless (a) any residual 

interest of the executing order is 

locking/crossing the market on the 

Exchange; or (b) if the resulting bid or 

offer is beyond the revised LRP in that 

security. NYSE Rule 1000(a)(iv) will 

further be amended to suspend 

automatic executions only on the side of 

the market that is quoted beyond the 

newly calculated LRP, except that 

undisplayed reserve orders at price 

points before the LRP will continue to 

be eligible for automatic executions. 

For example, suppose the market on 

the NYSE is 20.10 bid and 20.15 offered, 

with an LRP Parameter of .25. The 

designated LRP for this security is at a 

price of 20.15 on the offer side. An 

incoming buy order limited to 20.15 is 

entered. It trades up to the 20.15 offer 

with residual shares to be executed. 

There is no other sell interest on the 

Display Book until 20.45. An LRP will 

be calculated based on the last sale price 

of 20.15 (i.e., last sale of 20.15 plus the 

.25 LRP parameter equals 20.40). The 

offer will be published as slow since it 

is beyond the newly calculated offer 

side LRP of 20.40 (last sale of 20.15 plus 

.25). The bid will remain fast since the 

bid side LRP is calculated as 19.90 (last 

sale of 20.15 minus .25). The offer will 

stay slow until new interest arrives to 

quote within the LRP, the LRP is 

recalculated off of a new trade or the 

DMM intervenes and trades manually. 

Finally, the Exchange proposes to 

amend NYSE Rule 70.25(d)(ix)(A) to 

remove the restriction that a d-Quote 

participating in a sweep transaction 

must stop within one minimum price 

variation, for most Exchange securities, 

one cent, of a security’s LRP. Given the 

proposed modification to LRP 

functionality, allowing d-Quotes to 

trade at an LRP price will not cause the 

Exchange’s market to go slow if the next 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 34825 

12See Securities Exchange Act Release No. 58845 

(October 24, 2008), 73 FR 64379 (October 29, 2008) 

(SR–NYSE–2008–46). 13 15 U.S.C. 78a. 14 15 U.S.C. 78f(b)(5). 15 15 U.S.C. 78k-1(a)(1). 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f)(6). In addition, Rule 19b4(f)(6)(iii) requires the self-regulatory organization 

to submit to the Commission written notice of its 

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. 

18For purposes only of waiving the 30-day 

operative delay of this proposal, the Commission 

has considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

action will be a quote. For example, 

presume the market is 20.05 bid and 

offered at 20.10, with the security’s LRP 

on the sell side set at 20.13, but with 

interest on the Display Book to sell 

higher than the LRP. If a d-Quote to buy 

has three cents maximum discretion, it 

would not be able to trade at 20.13 

under current rules since this price is a 

LRP price point. However, since there is 

interest eligible to be quoted beyond the 

LRP, under the proposed rule changes 

allowing the d-Quote to use its 

maximum discretion to trade at 20.13 

would not cause the market to go slow. 

Therefore, the restriction on the d-quote 

trading at the LRP no longer serves its 

original purpose. As such, the Exchange 

proposes to remove said restriction. 

The Exchange will commence 

implementation of the systemic changes 

to allow Exchange systems to quote 

interest through an LRP price point 

without converting the Exchange market 

to an auction market where the next 

required action is simply to quote the 

interest on or about July 10, 2009. The 

Exchange intends to progressively 

implement this systemic change for 

LRPs on a security by security basis as 

it gains experience with the new 

technology until it is operative in all 

securities traded on the Floor. During 

the implementation, the Exchange will 

identify on its Web site which securities 

have been transitioned to the new 

system. 

In addition to the substantive change 

proposed above, the Exchange further 

proposes to make a technical 

amendment to NYSE Rule 1000 to 

delete a reference to the timing of the 

beginning of the New Market Model 

Pilot 12 from the preliminary provisions 

of Rule 1000 since this Pilot has been 

underway for a number of months. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Act’’) 13 for 

these proposed rule changes is the 

requirement under Section 6(b)(5) 14

that an Exchange have rules that are 

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, to protect investors and the 

public interest. The proposed rule 

change also is designed to support the 

principles of Section 11A(a)(1) 15 in that 

it seeks to assure economically efficient 

execution of securities transactions, 

make it practicable for brokers to 

execute investors’ orders in the best 

market and provide an opportunity for 

investors’ orders to be executed without 

the participation of a dealer. The 

Exchange’s proposal to maintain fast 

market conditions more often is 

consistent with the principles above in 

that it will increase the amount of time 

that the Exchange’s quote is eligible for 

immediate and automatic executions. 

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 

Because the foregoing 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 for 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, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 16 and Rule 19b4(f)(6) thereunder.17

The Exchange has requested that the 

Commission waive the 30-day operative 

delay in order to permit the Exchange to 

immediately implement the 

modifications to its systems discussed 

in full above, which should permit the 

Exchange to maintain fast market 

conditions more often, thus increasing 

the amount of time that the Exchange’s 

quote is eligible for automatic 

executions. The Commission believes 

such waiver is consistent with the 

protection of investors and the public 

interest. 18 Accordingly, the 

Commission designates the proposed 

rule change operative upon filing with 

the Commission. 

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 

• 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–2009–68 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–NYSE–2009–68. 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 on official business days between 

the hours of 10 a.m. and 3 p.m. Copies 

of such filing also will be available for 

mstockstill on DSKH9S0YB1PROD with NOTICES

34826 Federal Register / Vol. 74, No. 136 / Friday, July 17, 2009 / Notices 

19 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. 

4 15 U.S.C. 78s(b)(3)(A). 

5 17 CFR 240.19b–4(f)(6). 

6LRPs are pre-determined price points that 

temporarily convert the automatic Exchange market 

to an auction market in order to dampen volatility 

when the market is experiencing a large price 

movement based on a security’s typical trading 

characteristics or market conditions over short 

periods of time during the trading day. LRPs allow 

the DMM to solicit additional liquidity. 

7See SR–NYSE–2009–68 (to be filed July 9, 

2009). NYSE Euronext acquired The Amex 

Membership Corporation (‘‘AMC’’) pursuant to an 

Agreement and Plan of Merger, dated January 17, 

2008 (the ‘‘Merger’’). See 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). The 

effective date of the Merger was October 1, 2008. 

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 

Alternext US LLC, and continues to operate as a 

national securities exchange registered under 

Section 6 of the Securities Exchange Act of 1934, 

as amended (the ‘‘Act’’). See 15 U.S.C. 78f. NYSE 

Alternext US LLC was subsequently renamed NYSE 

Amex LLC. See Securities Exchange Act Release 

No. 59575 (March 13, 2009), 74 FR 11803 (March 

19, 2009) (SR–NYSEALTR–2009–24). 

8Exchange systems automatically prevent a 

d-Quote from using its price discretion to trade at 

an LRP price. 

9The Display Book® system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

DMMs, contains the Book, and provides a 

mechanism to execute and report transactions and 

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– 

2009–68 and should be submitted on or 

before August 7, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. E9–17015 Filed 7–16–09; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60290; File No. SR– 

NYSEAmex–2009–39] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Amex LLC Amending NYSE Amex 

Equities Rules 60, 70 and 1000 To 

Reflect Modifications to the Manner in 

Which the Exchange Will Quote and 

Trade With Respect to Liquidity 

Replenishment Points 

July 10, 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 July 9, 

2009, NYSE Amex LLC (the ‘‘Exchange’’ 

or ‘‘NYSE Amex’’) 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 self-regulatory organization. The 

Exchange filed the proposed rule change 

pursuant to Section 19(b)(3)(A) of the 

Act 4 and Rule 19b–4(f)(6) thereunder,5

which renders it effective upon filing 

with the Commission. 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 

NYSE Amex Equities Rules 60 

(Dissemination of Quotations), 70 

(Execution of Floor Broker Interest) and 

1000 (Automatic Executions) to reflect 

modifications to the manner in which 

the Exchange will quote and trade with 

respect to Liquidity Replenishment 

Points. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

and http://www.nyse.com. 

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 

NYSE Amex proposes to amend 

Exchange Rules 60 (Dissemination of 

Quotations), 70 (Execution of Floor 

Broker Interest) and 1000 (Automatic 

Executions) to reflect modifications to 

the manner in which the Exchange will 

quote and trade with respect to 

Liquidity Replenishment Points 

(‘‘LRPs’’).6 As proposed, LRPs will 

convert the Display Book to an auction 

market by causing autoquote to be 

suspended only when an LRP is reached 

that will result in a locked or crossed 

market condition on the Exchange or 

with respect to an away market center 

(‘‘lock/cross’’) or where the next action 

required is to consummate a trade. Once 

the locked/crossed condition is cleared 

or the required trade is consummated, 

the automatic quoting and executions 

will resume immediately without any 

pre-set timing delays. As such, the 

proposal will allow Exchange systems to 

quote interest through an LRP price 

point without converting the Exchange 

market to an auction market where the 

next required action is simply to quote 

the interest. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of the New York Stock Exchange 

(‘‘NYSE’’).7

a. Background 

The Exchange uses LRPs to 

temporarily convert the automatic 

Exchange market to an auction market 

in order to dampen volatility when the 

market is experiencing a large price 

movement based on a security’s typical 

trading characteristics or market 

conditions over short periods of time 

during the trading day. For example, a 

large-sized order on one side of the 

market, or a series of orders that will 

trade beyond the current market could 

cause the price of a security to move to 

its current LRP value. Conversion to an 

auction market as a result of an LRP 

allows the Exchange to solicit additional 

liquidity. 

Floor broker interest with 

discretionary trading instructions 

(‘‘d-Quotes’’) is prohibited from 

triggering an LRP. Specifically, a dQuote participating in a sweep 

transaction cannot use its price 

discretion to trade at a price that would 

trigger an LRP.8 d-Quotes were designed 

in this manner so they would not cause 

the Exchange’s market to ‘‘go slow’’ by 

triggering an LRP. It should also be 

noted that a d-Quote cannot cause a 

lock/cross market because the d-Quote 

only trades at prices within its 

designated discretion but does not quote 

at a price using its price discretion. 

b. Functioning of Autoquote and 

Auomatic [sic] Executions 

Autoquote is a part of the Display 

Book® 9 that immediately displays 

mstockstill on DSKH9S0YB1PROD with NOTICES