Document ID: SEC-2009-1843-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend NSX Rule 11 Governing Round Lots, Odd Lots and Mixed Lots.
Posted Date: 2009-12-30T05:00Z

[Federal Register: December 30, 2009 (Volume 74, Number 249)]
[Notices]               
[Page 69158-69159]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30de09-125]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61221; File No. SR-NSX-2009-08]

 
 Self-Regulatory Organizations; National Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend NSX Rule 11 Governing Round Lots, Odd Lots and Mixed Lots.

December 22, 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 December 17, 2009, National Stock Exchange, Inc. (``NSX'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change, as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comment 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 the 
Substance of the Proposed Rule Change

    The Exchange is proposing to amend NSX Rules 11.2 and 11.11 
governing round, odd and mixed lots.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nsx.com, on the Commission's Web site at http://
www.sec.gov, at the principal office of the Exchange, 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, 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
    The Exchange proposes to amend NSX Rules 11.2 and 11.11(c)(4) in 
order to clarify the Exchange's rules regarding round lots, odd lots 
and fixed lots. The proposed changes are part of an effort to provide 
clarity with respect to such definitions in the context of an 
overriding interest in maintaining a fair and orderly market, 
protecting investors and protecting the public interest. The proposed 
changes are more fully discussed below.
    The definitions of ``round lot'', ``odd lot'' and ``mixed lot'' in 
Rule 11.2 are proposed to be modified in order to clarify their 
meanings and to conform with common usage and treatment within the 
financial industry.\3\ The definition of ``round lot'' is being 
modified to mean a normal unit of trading, which is most frequently 
(but not always) 100 shares. Similarly, the definitions of ``odd lot'' 
and ``mixed lot'' are rephrased for purposes of clarity and 
transparency.
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    \3\ See FINRA Rule 6320A (`` `Normal unit of trading' means 100 
shares of a security unless, with respect to a particular security, 
FINRA determines that a normal unit of trading shall constitute 
other than 100 shares'').
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    In addition, in proposed Rule 11.11(c)(4), the definition of 
``Mixed Lot Order'' is modified in order to clarify the Exchange's 
treatment of the odd lot portion of Mixed Lot Orders. The newly added 
language in proposed Rule 11.11(c)(4) confirms that Mixed Lot Orders 
may be entered, and clarifies that the Exchange will treat the odd lot 
component of a Mixed Lot Order for purposes of order interaction as an 
Odd Lot Order. This language is intended to clarify for purposes of 
certainty and transparency how the Exchange treats the odd lot portions 
of Mixed Lot Orders. Consistent with the new language, the revised rule 
retains the existing statement that the odd lot components of Mixed Lot 
Orders are only eligible to be protected quotations if aggregated to 
form a round lot.\4\ Providing this clarity with respect to the 
treatment of the odd lot component of a mixed lot order is consistent 
with the rules of other markets which specifically provide for the 
treatment of the odd lot components of mixed lot orders.\5\ Further, 
such treatment is consistent with Reg NMS, including Rules 610 and 611, 
which permit market centers to establish rules for the

[[Page 69159]]

handling of odd-lot orders and the odd-lot portions of mixed-lot 
orders.\6\
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    \4\ The round lot component of a Mixed Lot Order is treated as a 
round lot order.
    \5\ See NYSE Rule 124 on Odd Lot Orders and Supplementary 
Material .40 thereto; see also ISE Rule 2105(c)(3) (providing that 
the odd lot component of a mixed lot order will be treated the same 
as an odd lot order, i.e., rejected unless it meets certain 
requirements).
    \6\ See Responses to Frequently Asked Questions Concerning Rule 
611 and Rule 610 of Regulation NMS, Question 7.03: Odd-Lot Orders 
and Odd-Lot Portions of Mixed-Lot Orders (``trading centers are 
permitted to establish their own rules for handling odd-lot orders 
and the odd-lot portions of mixed-lot orders'').
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Act,\7\ in general, and 
furthers the objectives of Section 6(b)(5) \8\ in particular in that it 
is designed, among other things, 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 Exchange 
believes that the proposed rule change advances these objectives by 
providing transparency and certainty with respect to the definitions of 
terms frequently used in the Exchange's rules and by clarifying the 
Exchange's treatment of the odd lot component of Mixed Lot Orders.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4) [sic].
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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 Exchange Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change will take effect 30 days from the date of 
filing (or such shorter time as the Commission may designate) pursuant 
to Section 19(b)(3)(A)(ii) of the Act \9\ and subparagraph (f)(6) of 
Rule 19b-4 \10\ thereunder, because the proposal: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) does not become operative for 30 days from the date of filing, 
or such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest; provided that the 
self-regulatory organization has given the Commission written notice of 
its intent to file the proposed rule change at least five business days 
prior to the filing date of the proposed rule change.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4.
    \11\ As required under Rule 19b-4(f)(6)(iii), NSX provided the 
Commission with written notice of its intent to file the proposed 
rule change at least five business days prior to the filing date.
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    Pursuant to Rule 19b-4(f)(6)(iii) under the Act,\12\ the Commission 
may designate a shorter time period if such action is consistent with 
the protection of investors and the public interest. The Exchange 
requests that the effective date for the instant rule change be thirty 
days after the date of filing of this rule change, or such earlier date 
as the Commission determines.
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    \12\ 17 CFR 19b-4(f)(6)(iii).
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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.\13\
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    \13\ 15 U.S.C. 78s(b)(3)(C).
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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 rule-comments@sec.gov. Please include 
File Number SR-NSX-2009-08 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-NSX-2009-08. 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 publicly available. All 
submissions should refer to File Number SR-NSX-2009-08 and should be 
submitted on or before January 20, 2010.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-30911 Filed 12-29-09; 8:45 am]

BILLING CODE 8011-01-P