Document ID: SEC-2009-0964-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; NYSE Amex 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
Posted Date: 2009-07-14T04:00Z

[Federal Register Volume 74, Number 133 (Tuesday, July 14, 2009)]
[Notices]
[Pages 34067-34068]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-16545]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60252; File No. SR-NYSEAmes-2009-24]

Self-Regulatory Organizations; NYSE Amex 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 4, 2009, NYSE Amex LLC (``NYSE Amex'' 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 NYSE Amex Equities 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 15, 
2009.\3\ The Commission received no comments regarding the proposal. 
This order approves the proposed rule change on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 60055 (June 5, 
2009), 74 FR 28299 (``Notice'').
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    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. This rule change will conform Rule 70.25 to the 
corresponding rule of the New York Stock Exchange LLC (``NYSE'') that 
governs the execution of NYSE Floor broker interest.\5\
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    \4\ A d-Quote is an e-Quote for which a Floor Broker enters 
discretionary instructions as to size and/or price. See NYSE Amex 
Equities 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 Amex Equities Rule 70(a)(i).
    \5\ See Securities Exchange Act Release No. 60045 (June 4, 
2009), 74 FR 27854 (June 11, 2009) (SR-NYSE-2009-55).
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    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 convert-and-parity (``CAP'') orders, 
and that was also previously available to NYSE Floor brokers with CAP-
DI orders under former NYSE Rule 123A.30(a).\6\ 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.\7\At the time the CAP order was eliminated, the 
NYSE did not have the technology to replicate a similar functionality 
with d-Quotes.\8\ Since that time, both the Exchange and the NYSE have 
introduced two new order types, the Minimum Display Reserve Order, and 
the Non-Displayed Reserve Order.\9\ 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.
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    \6\ See Notice at 28300. The Exchange noted that the CAP 
functionality that was historically available to Floor brokers was 
similar to the NYSE CAP functionality. See id. at n.10. The Exchange 
states that it eliminated this functionality in connection with the 
implementation of Regulation NMS. Id.
    \7\ See Notice at 28300.
    \8\ Id. at 28301.
    \9\ Id. See also NYSE Amex Equities Rule 13 (Definitions of 
Orders); NYSE Rule 13 (same).
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    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 \10\ including, in particular, Section 
6(b)(5) of the Act,\11\ 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.
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    \10\ 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).
    \11\ 15 U.S.C. 78f(b)(5).
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    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 purpose of this proposed rule change is 
to conform Rule 70.25 to the NYSE rule that governs the execution of 
floor broker interest. In that respect, 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 orders, and 
to the functionality that was previously available to NYSE Floor 
brokers 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,\12\ to approve the proposed rule change on an 
accelerated basis.
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    \12\ 15 U.S.C. 78s(b)(2).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-NYSEAmes-2009-24) be, and it hereby 
is, approved on an accelerated basis.

[[Page 34068]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
 [FR Doc. E9-16545 Filed 7-13-09; 8:45 am]
BILLING CODE 8010-01-P