Document ID: SEC-2007-0292-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-02-27T05:00Z

[Federal Register: February 27, 2007 (Volume 72, Number 38)]
[Notices]               
[Page 8825-8827]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27fe07-152]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55316; File No. SR-NYSE-2007-14]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto Relating to Rule 70 (Bids and Offers)

February 20, 2007.
    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 February 7, 2007, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by the self-
regulatory organization. On February 16, 2007, the Exchange filed 
Amendment No. 1 to the proposed rule change. NYSE filed the proposed 
rule change pursuant to Section 19(b)(3) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders the proposed rule change effective 
upon filing with the Commission. The Commission is publishing this 
notice to solicit comments on the proposed rule change, as amended, 
from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 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 is proposing to amend Exchange Rule 70.30 which sets 
forth the definition of Crowd. The text of the proposed rule change is 
available on the Exchange's Web site (http://www.nyse.com), at the 

Exchange's Office of the Secretary, 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 self-regulatory organization 
included statements concerning the purpose of and basis for 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 8826]]

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

1. Purpose
    The Exchange's Hybrid Market SM (``Hybrid Market'') 
integrates the auction market with automated trading. Essential to the 
auction market is the interaction among members on the Floor and 
between Floor brokers and orders in the Display Book [supreg] System 
that creates opportunities for price improvement, provides information 
about changing market conditions and serves as a catalyst to trading. 
Exchange Rule 70.30 \5\ defines a Crowd as `` * * * the specific 
identifiable areas on the Floor where Floor brokers generally are able 
to see and hear the business conducted at each post/panel within the 
Crowd.'' Each designated area served to delineate the boundaries of the 
Crowd. In order to identify the specific boundaries of the Crowd, the 
Exchange divided each trading room of the Floor into specific areas 
which were identified on the Floor by colored tiles.
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    \5\ See Securities Exchange Act Release No. 54427 (September 12, 
2006), 71 FR 54862 (September 19, 2006) (SR-NYSE-2006-58).
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    Exchange Rule 70.30 further requires that Floor brokers be in the 
Crowd in order to represent orders that the Floor broker has in his or 
her agency interest files (i.e., in order to ``e-Quote''). Pursuant to 
Rule 70.30 a Floor broker may only have agency interest files or e-
Quote in one Crowd at a time.
    As the Exchange continues its implementation of the Hybrid Market, 
it has gained experience operating in the Hybrid Market environment. 
Based on this experience, the Exchange seeks to amend the definition of 
Crowd in order to better facilitate the critical interaction among 
members on the Floor.
    In practice, the current definition of the Crowd proved difficult 
and confusing. Individuals that were unable to easily discern Crowd 
boundaries and those with color blindness must rely on charts that list 
the post/panels that are designated areas that make up the specified 
Crowd, adding a level of inefficiency to their ability to trade.
    In addition, as announced on October 31, 2006,\6\ the Exchange is 
in the process of consolidating its trading operations from five rooms 
to four over an 18-month period. The trading floor consolidation plan 
calls for the closing of the trading room that currently occupies 30 
Broad Street and the relocation of the specialist firm and the 33 floor 
brokerage firms from that facility to the Exchange's other trading 
rooms.
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    \6\ NYSE Announces Floor Consolidation Plan, NYSE Group 
Newsletter, October 31, 2006, available at http://www.nyse.com/about/publication/1164799108193.html
.

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    Given the practical difficulties with the current definition of a 
Crowd and the current consolidation of the Floor, the Exchange proposes 
to amend the definition of the Crowd in order to reflect more 
accurately the areas which most efficiently facilitate the beneficial 
interaction among the members on the Floor. The Exchange believes that 
this is best reflected in defining the Crowd as encompassing the 
trading Floor in each remaining trading room.
    The Exchange will divide the Floor into three trading zones. Each 
trading zone will represent a specific identifiable Crowd. As a result, 
the current Main Room and Garage will each constitute two separate 
Crowds. The third Crowd will include the current Blue Room and Extended 
Blue Room.
    As is the case today, once in a Crowd, a Floor broker is able to e-
Quote in all securities located in that Crowd. If the Floor broker 
leaves one Crowd in order to work in another, the Floor broker is 
required to withdraw his or her agency interest from the Crowd he or 
she is leaving. However, a Floor Broker may obtain ``market looks'' in 
a securities located in other Crowds without canceling his or her e-
Quotes. The Exchange intends that the proposed rule change will be 
operative on February 20, 2007.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\7\ in general, and furthers the objectives of Section 6(b)(5) of 
the Act \8\ in particular in that it is designed to prevent fraudulent 
and manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 
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

    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

    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) 
by its terms, 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\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii)\11\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the five-day pre-filing notice requirement and the 30-
day operative delay. The Commission believes that waiver of the five-
day pre-filing notice requirement and the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
Specifically, the Commission believes that the proposal could more 
accurately reflect the areas which most efficiently facilitate the 
beneficial interaction among the Floor brokers and allow the exchange 
to implement the proposal immediately.\12\
    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such proposed 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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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
    \13\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, 15 U.S.C. 78s(b)(3)(C), the 
Commission considers the period to commence on February 16, 2007, 
the date NYSE filed Amendment No. 1 to the proposed rule change.

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[[Page 8827]]

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-NYSE-2007-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-NYSE-2007-14. 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. 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-2007-14 and should be submitted on or before March 
20, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-3289 Filed 2-26-07; 8:45 am]

BILLING CODE 8010-01-P