Document ID: SEC-2009-0436-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex US LLC
Posted Date: 2009-04-01T04:00Z

[Federal Register: April 1, 2009 (Volume 74, Number 61)]
[Notices]               
[Page 14834-14837]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01ap09-81]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59627; File No. SR-NYSEAmex-2009-02]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC Formally 
Adopting and Codifying Its Wireless Data Communications Initiatives

 March 25, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 23, 2009, NYSE Amex US LLC (the ``Exchange'' or ``NYSE Amex'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by NYSE Amex. NYSE Amex has submitted the proposed 
rule change pursuant to Rule 19b-4(f)(6) under the Act,\3\ which 
renders the proposal effective upon filing with the Commission. 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.
    \3\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to formally adopt and codify its Wireless 
Data Communications Initiatives (referred to herein as the ``Wireless 
Policy'').

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 these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in sections (A), (B) and (C) below, 
of the most significant aspects of such statements.

[[Page 14835]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    NYSE Amex LLC (``NYSE Amex'' or ``Exchange''), formerly the 
American Stock Exchange LLC and NYSE Alternext US LLC \4\ proposes to 
formally adopt and codify a Wireless Data Communications Initiative 
(referred to herein as the ``Wireless Policy''). The proposed Wireless 
Policy is identical to a proposal separately submitted by the New York 
Stock Exchange LLC (``NYSE'').\5\
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    \4\ On March 3, 2009, the Exchange submitted a rule filing to 
change its name from NYSE Alternext US LLC to NYSE Amex LLC (SR-
NYSEALTR-2009-24).
    \5\ See SR-NYSE-2009-33 (filed on March 20, 2009). The NYSE 
filing includes a historical discussion of the implementation of the 
NYSE Wireless Policy.
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Background
    As described more fully in a related rule filing,\6\ NYSE Euronext 
acquired The Amex Membership Corporation (``AMC'') pursuant to an 
Agreement and Plan of Merger, dated January 17, 2008 (the ``Merger''). 
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'').\7\ The 
effective date of the Merger was October 1, 2008.
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    \6\ 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).
    \7\ 15 U.S.C. 78f.
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    In connection with the Merger, on December 1, 2008, the Exchange 
relocated all equities trading conducted on the Exchange legacy trading 
systems and facilities located at 86 Trinity Place, New York, New York, 
to trading systems and facilities located at 11 Wall Street, New York, 
New York (the ``Equities Relocation''). The Exchange's equity trading 
systems and facilities at 11 Wall Street (the ``NYSE Amex Trading 
Systems'') are operated by the NYSE on behalf of the Exchange.\8\
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    \8\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation).
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    As part of the Equities Relocation, NYSE Amex adopted NYSE Rules 1-
1004, subject to such changes as necessary to apply the Rules to the 
Exchange, as the NYSE Amex Equities Rules to govern trading on the NYSE 
Amex Trading Systems.\9\ The NYSE Amex Equities Rules, which became 
operative on December 1, 2008, are substantially identical to the 
current NYSE Rules 1-1004 and the Exchange continues to update the NYSE 
Amex Equities Rules as necessary to conform with rule changes to 
corresponding NYSE Rules filed by the NYSE.
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    \9\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation); Securities Exchange Act Release No. 58833 
(October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-
106) and Securities Exchange Act Release No. 58839 (October 23, 
2008), 73 FR 64645 (October 30, 2008) (SR-NYSEALTR-2008-03) 
(together, approving the Bonds Relocation); Securities Exchange Act 
Release No. 59022 (November 26, 2008), 73 FR 73683 (December 3, 
2008) (SR-NYSEALTR-2008-10) (adopting amendments to NYSE Alternext 
Equities Rules to track changes to corresponding NYSE Rules); 
Securities Exchange Act Release No. 59027 (November 28, 2008), 73 FR 
73681 (December 3, 2008) (SR-NYSEALTR-2008-11) (adopting amendments 
to Rule 62--NYSE Alternext Equities to track changes to 
corresponding NYSE Rule 62).
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    Pursuant to the Equities Relocation, the Exchange's equity trading 
systems and facilities are operated by the NYSE on behalf of the 
Exchange. As a result, NYSE Amex Trading Systems currently operate 
pursuant to the NYSE's policies and procedures that govern wireless 
data communication technology of the Floor.\10\ The NYSE formally 
submitted a proposal to the Securities and Exchange Commission to 
modify its policies and procedures that govern wireless data 
communications technology on the systems NYSE operates on behalf of the 
Exchange. As such, the Exchange submits this proposal to formally adopt 
and codify those amended policies and procedures.
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    \10\ The Exchange's Wireless Communications Plan governing the 
use of the hand-held on the Equities Trading Floor is the same as 
the NYSE's, which was previously approved by the Commission. See 
Securities Exchange Act Release No. 36156 (August 25, 1995), 60 FR 
45756 (September 1, 1995) (SR-NYSE-95-22). The approval order of the 
initial filing and subsequent amendment by the Commission to changes 
to the Wireless Data Communications Initiatives has historically 
been referred to by the NYSE as its ``Wireless Policy.'' See also 
Securities Exchange Act Release No. 39379 (December 1, 1997), 62 FR 
64615 (December 8, 1997) (SR-NYSE-97-17).
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Wireless Policy
    The Exchange now proposes to formally adopt a Wireless Policy that 
allows wireless communications to be sent to and received directly to 
and from: (i) A Floor broker's booth premise; or (ii) wireless 
technology in the form of wireless hand-held data communication 
devices. A wireless hand-held device (``hand-held'') is a tool used by 
Floor brokers as part of an integrated Floor order management system to 
trade and to send and receive messages. Such messages can consist of 
orders and cancellations and modification of orders, as well as 
electronic text messages permitting the communication of text or graph 
information. Pursuant to the policy, orders entered from off the Floor 
may be transmitted to a Floor broker's booth or directly to a hand-
held.\11\ Likewise, Floor brokers may send order-related messages 
(e.g., cancellations and administrative messages) and information 
(e.g., Market Look data) back to the customer from the booth premise or 
directly from the hand-held.
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    \11\ Pursuant to NYSE Amex Equities Rule 54, appropriately 
registered and supervised employees working in Exchange Regulation-
approved booths are permitted to process orders sent to a Floor 
broker's booth premise in the same manner that sales traders in an 
``upstairs'' office are allowed to process orders. The proposed 
Wireless Policy would not impact this ability because the direct 
transmittal of an order from off the Floor to the handheld would 
constitute a determination to have the order represented and 
executed on the Exchange Floor, and not processed in the booth in 
the same manner as an ``upstairs'' trading desk.
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    Pursuant to the proposed Wireless Policy, where: (1) Orders are 
transmitted electronically from a member's off-Floor location to a 
booth terminal and then the order is retransmitted from the booth 
terminal to a member's hand-held; or (2) order-related messages or 
information are transmitted directly to the hand-held, bypassing the 
booth, a record must be established and maintained which reflects the 
time the order or order-related message or information was received by 
the booth terminal or the hand-held. The time of receipt will be 
captured by the Booth or the hand-held, depending upon where the order 
was routed. The record of time of receipt by a hand-held may be 
established and maintained by such device or the Booth and by the 
server which receives a message acknowledgment from the hand-held or 
the Booth. The Booth will not be required to print records.
    Orders sent from off-Floor to the booth or the hand-held are first 
sent through a secured network and routed to an Exchange wired database 
that captures and records the orders. Likewise, order-related messages 
or information generated from the booth or the Floor broker's hand-held 
are transmitted back to the Exchange-wired databases via the secured 
wireless network, where the information is captured and recorded, and 
then sent off-Floor to the customer via the Exchange's secured network. 
In short, Exchange wired databases capture and record all of the 
information sent to and transmitted from the hand-held.

[[Page 14836]]

    The Exchange notes that the transmission of orders from off-Floor 
locations directly to the hand-helds and order-related messages or 
information sent from hand-helds to off-Floor locations will not result 
in an increased risk of loss of order information. As is the case 
today, all orders and order-related messages or information will be 
recorded in an Exchange database upon receipt and prior to delivery to 
the hand-held. In the event that a hand-held loses connectivity with 
the database, all incoming and outgoing transactions will continue to 
be captured and stored in said database and will be re-transmitted to 
the hand-held once connectivity is restored. To further mitigate the 
risk of any loss of data, the Exchange infrastructure offers a fully 
redundant, dual-sited back-up database. This same infrastructure is 
currently in place today for orders received into NYSE Amex systems 
destined for a booth. Therefore, all the information captured by the 
database is the identical information that would be captured had the 
order been sent to the Floor booth before being sent to the hand-held 
or the order-related message or information had been sent from the 
hand-held to the Floor booth. The informational content transmitted to 
and from the hand-held remains the same and is not affected by the 
proposed Wireless Policy.
    Furthermore, this change will not impact the requirements for the 
system entry of orders and execution reports pursuant to NYSE Amex 
Equities Rule 123(e) and (f). All orders, order messages and report 
information captured by the database will be provided electronically in 
the same manner as orders transmitted directly to a booth today for 
audit trail purposes. The wireless infrastructure captures the same 
information that was previously captured in the Floor booth. The hand-
held will operate as the functional equivalent as the Floor booth 
premise for order receipt and retention purposes.
    Hand-helds will continue to provide the requisite information as to 
price, size and time of the order, and information if the order is 
cancelled. Audit trail information will be captured electronically by 
the hand-held, thereby obviating the need for the transmission to the 
booth terminal which historically recorded this information.
    Pursuant to NYSE Amex Equities Rule 117, any order transmitted 
directly to the hand-held to constitute a written order since the 
requisite information as to price, size and time of the order, and 
information if the order is cancelled will be captured by the hand-
held. Furthermore, the information directly sent to the hand-held 
satisfies the Exchange's audit trail requirements and all other 
Exchange reporting and record-keeping requirements.
    The Exchange believes that this proposal will facilitate an 
efficient and expeditious mechanism for order execution. The Exchange 
further believes that its customers and market participants will 
benefit from faster order execution, enhanced market quality and a 
reduction in latency of order executions as a result of this proposal.
2. Statutory Basis
    The basis under the Act for the proposed rule change is the 
requirement under Section 6(b)(5),\12\ which requires that an exchange 
have rules that are designed to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, 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 is 
consistent with these objectives in that it enables the Exchange to 
further facilitate transactions on the Exchange Trading Floor by 
allowing for the direct transmission of orders and order-related 
messages and information to the hand-held for representation and 
execution. Likewise, the ability to transmit order-related messages or 
information from the hand-held to off-Floor customers provides the 
customer with speed of execution and greater market transparency for 
off-Floor participants. Overall, the Exchange believes that its 
Wireless Policy provides for a faster, more efficient method of order 
execution.
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    \12\ 15 U.S.C. 78f(b)(5).
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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 
result in 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, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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. 
NYSE Amex has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \15\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6) \16\ permits the Commission to 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. NYSE Amex requests 
that the Commission waive the 30-day operative delay in order to 
immediately remove an impediment to the efficient execution of customer 
orders and transmission of order-related messages or information. The 
Exchange represents that the proposed changes merely seek to adopt the 
identical provisions of the NYSE Wireless Policy. The Exchange believes 
that it promotes the protection of investors and serves the public 
interest to have its systems allow for the delivery of customer orders 
to the point of sale and order-related messages or information back to 
the customer immediately now that hand-held technology is capable of 
meeting all audit trail requirements. The Commission notes the 
Exchange's representation that the proposed changes to the Wireless 
Policy do not change the content of what is sent to and from the hand-
helds, but simply amends the procedure for transmitting such 
information. In addition, the Commission notes the Exchange's 
representation with regard to the ability of Exchange systems to 
capture and record all information sent to and transmitted from the 
handhelds. For these reasons, the Commission believes that waiving the 
30-day operative delay \17\ is consistent with the protection

[[Page 14837]]

of investors and the public interest. Therefore, the Commission 
designates the proposal operative upon filing.
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 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

     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-NYSEAmex-2009-02 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-NYSEAmex-2009-02. 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-NYSEAmex-2009-02 and should 
be submitted on or before April 22, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7217 Filed 3-31-09; 8:45 am]