Document ID: SEC-2010-0889-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca US LLC
Posted Date: 2010-06-17T04:00Z

[Federal Register: June 17, 2010 (Volume 75, Number 116)]
[Notices]               
[Page 34504-34506]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jn10-125]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62281; File No. SR-NYSEARCA-2010-52]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Arca US LLC Amending NYSE 
Arca Equities Rule 7.11 To Set Forth How the Exchange Will Handle Order 
Flow During a Trading Pause for a Security Listed on an Exchange Other 
Than NYSE Arca

June 11, 2010.
    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 June 10, 2010, NYSE Arca US LLC (the ``Exchange'' or 
``NYSE Arca'') 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 Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Arca Equities Rule 7.11 to set 
forth how the Exchange will handle order flow during a Trading Pause 
for a security listed on an exchange other than NYSE Arca. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend Rule 7.11 to set forth how the 
Exchange will handle order flow during a Trading Pause for a security 
listed on an exchange other than NYSE Arca.
    Rule 7.11 was approved by the Commission on June 10, 2010.\4\ The 
Exchange proposes to add subsection (f) to the Rule to address how 
orders will be handled when another primary listing market issues a 
trading pause. Upon the receipt of a trading pause message from another 
primary listing market, the Exchange will take the following actions: 
(i) Maintain all resting orders in the Book; (ii) cancel any unexecuted 
portion of Market Orders and Pegged Orders; (iii) accept

[[Page 34505]]

and process all cancellations; (iv) accept and route new Market Orders 
to the primary market; (v) accept and route PO and PO+ Orders to the 
primary market; and (vi) reject all other orders until the stock has 
reopened. The Exchange proposes to follow these procedures during a 
regulatory halt called by another market as well.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 62252 (June 10, 
2010).
---------------------------------------------------------------------------

    Once trading has resumed on the primary listing market or notice 
has been received from the primary listing market that trading may 
resume, the Exchange will resume normal order processing in accordance 
with its rules.
    The Exchange believes that these procedures will ensure that 
following a Trading Pause or regulatory halt, the primary listing 
market will be able to conduct a fair and orderly reopening because any 
new order flow during the pause will be available to the primary market 
to conduct price discovery for the reopening.
    The Exchange also proposes to amend Rule 7.11 to provide that in 
the event of an early scheduled close, the rule would be in effect 
until 25 minutes before such scheduled close.
2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Securities Exchange Act of 1934 (the ``Act''),\5\ which requires 
the rules of an exchange 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) \6\ of the Act 
in that it seeks to assure fair competition among brokers and dealers 
and among exchange markets. The Exchange believes that the proposed 
rule meets these requirements in that it promotes transparency for how 
order flow will be handled during a Trading Pause for a security listed 
on an exchange other than NYSE Arca. The proposed rule also promotes a 
fair and orderly market by enabling the primary listing market to 
properly price a security for the reopening following a Trading Pause.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
Because the 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 prior to 
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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \9\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\10\ 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 Commission notes that 
the proposed rule change clarifies how the Exchange will handle order 
flow during a Trading Pause for a security listed on an exchange other 
than NYSE Arca. The proposed rule change does not raise any new 
substantive issues. For these reasons, the Commission believes that the 
waiver of the 30-day operative date is consistent with the protection 
of investors and the public interest.\11\
---------------------------------------------------------------------------

    \9\ 17 CFR 240.19b-4(f)(6).
    \10\ 17 CFR 240.19b-4(f)(6)(iii).
    \11\ For 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. 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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-NYSEARCA-2010-52 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-NYSEARCA-2010-52. 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 Web site 
viewing and copying in the Commission's Public Reference Section, 100 F 
Street, NE, Washington, DC 20549-1090. Copies of the filing will also 
be available for inspection and copying at the NYSE's principal office 
and on its Internet Web site at http://www.nyse.com. 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-NYSEARCA-2010-52 and should 
be submitted on or before July 8, 2010.

[[Page 34506]]

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Florence E. Harmon,
Deputy Secretary.
---------------------------------------------------------------------------

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

[FR Doc. 2010-14669 Filed 6-16-10; 8:45 am]
BILLING CODE 8010-01-P