Document ID: SEC-2008-1754-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Alternext US LLC
Posted Date: 2008-12-31T05:00Z

[Federal Register: December 31, 2008 (Volume 73, Number 251)]
[Notices]               
[Page 80494-80502]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31de08-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59142; File No. SR-NYSEALTR-2008-14]

 
Self-Regulatory Organizations; NYSE Alternext US LLC; Notice of 
Filing of Proposed Rule Change Amending Rules Governing the Trading of 
Listed Options on NYSE Amex

December 22, 2008.
    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 December 19, 2008, NYSE Alternext US LLC (``NYSE Alternext'', ``NYSE 
Amex Options'', ``NYSE Amex'', or the ``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 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its rules governing the trading of 
listed options on NYSE Amex. With this filing, the Exchange proposes to 
a) adopt new rules for the implementation of a new trading platform for 
options, NYSE Amex System (``System'') and (b) govern open outcry 
trading at the Exchange's new location at 11 Wall Street, New York, NY. 
The proposed new rule set text is designated Section 900NY, and is 
shown in the Exhibit 5.
    The text of the proposed rule change is available on the Exchange's 
Web site at http://www.nyse.com, at the Exchange's principal office, 
and at the Commission's Public Reference Room. The text of Exhibit 5 is 
also available on the Commission's Web site (http://www.sec.gov/rules/
sro.shtml).

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 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 introduce a modern electronic trading 
platform to support options trading, and in addition, proposes to 
update and reorganize open outcry trading at the time of the migration 
to the new platform and the move to a new Options Trading Floor at 11 
Wall Street, New York, NY. The new rule set is proposed as Section 
900NY.
    Rule Section 900NY will replace certain existing NYSE Alternext 
Rules. These are, under General Rules, Rule 1, Hours of Business; Rule 
2, Visitors; Rule 21, Appointment of the Senior Supervisory Officer, 
Senior Floor Officials, Exchange Officials and Floor Officials; Rule 
21, Authority of Floor Officials; Rule 27A, Allocation of Options; Rule 
170, Registration and Functions of Specialists. Under Trading of 
Options Contracts, the superseded Rules are, in Section 1, Rule 900, 
Applicability, Definitions and References; in Section 2, Rule 918, 
Trading Rotations, Halts, and Suspensions; in Section 3, Rule 933, 
Automatic Execution of Options Orders; Rule 934, Limitation on Orders; 
Rule 936, Cancellation and Adjustment of Equity Options Transactions; 
in Section 4, Rule 941, Operation of the Linkage; Rule 942, Order 
Protection; Rule 943, Locked Markets; Rule 944, Limitation on Principal 
Order Access.
    Additionally, Section 900NY will replace, in Section 5--Floor Rules 
Applicable to Options, Rule 950, Rules of General Applicability; Rule 
951, Premium Bids and Offers; Rule 952, Minimum Price Variations; Rule 
953, Acceptance of Bid or Offer; Rule 954, Units of Trading; Rule 955, 
Floor Reports of Exchange Options Transactions; Rule 956, Open Orders 
on ``Ex Date''; Rule 957, Accounts, Orders and Records of Registered 
Traders, Designated NYSE Alternext Remote Traders, Specialists and 
Associated Persons; Rule 958, Options Transactions of Registered 
Traders; Rule 958A, Application of the Firm Quote Rule, Rule 959, 
Accommodation Transactions; in Section 9, Rule 992, Exchange Options 
Market Data System; in Section 11--Stock Index Options, Rule 918C, 
Trading Rotations, Halts and Suspensions; and in ANTE Rules, all Rules 
(Rule 900-ANTE through Rule 997-ANTE).
    These Rules will be deleted in a separate filing.
    Various provisions contained in the proposed rules define and 
describe the use of a Routing Broker. A full description of the 
relationship between the Exchange and the Routing Broker will be 
submitted in a separate filing.
    NYSE Amex proposes to establish rules for NYSE Amex System, a fully 
automated trading system for standardized equity and index options 
intended to replace the Exchange's current options trading platform, 
ANTE. The System will provide automatic order execution capabilities in 
the options securities listed and traded on NYSE Amex. Market Makers 
will be able to stream quotes to the System from on the Trading Floor 
or remotely. The proposed NYSE Amex System is an electronic market 
structure which encompasses customer priority while essentially 
allowing market makers and non customers to compete on a ``size pro 
rata'' basis, and will be available for the entry and execution of 
quotes and

[[Page 80495]]

orders to ATP Holders. Participation entitlements are reserved for 
Specialists, e-Specialists, and Directed Order Market Makers. The rules 
governing Specialists and size pro rata trade allocation are 
substantially based on rules which had been approved for the Pacific 
Exchange and its PCX Plus Platform; \3\ additional rules regarding e-
Specialists are based on approved rules of the Chicago Board Options 
Exchange; \4\ while rules outlining entitlements of Directed Order 
Market Makers are based on the rules of the NASDAQ OMX PHLX, Inc.\5\
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    \3\ See SR-PCX-2003-36, Securities Exchange Act Release No. 
47838.
    \4\ See CBOE Rules 8.87 and 8.92-8.94.
    \5\ See PHLX Rule 1080(1).
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    NYSE Alternext proposes to issue Amex Trading Permits (``ATPs''), 
as defined in proposed Rule 900.2NY(4), for effecting approved 
securities transaction on the Exchange's Trading Facilities. NYSE 
Alternext Rules 40, 350, 353, 353A, 358, 358A, 359, 359A, and 359B are 
being amended to reflect the change from 86 Trinity Permits to Amex 
Trading Permits. Current 86 Trinity Permits will be easily converted to 
Amex Trading Permits with a simple conversion form submitted to the 
Exchange. No material change is being made to these Rules, although 
some outdated provisions, such as the requirement for a medical 
examination, are being removed. The Exchange is also eliminating the 
concept of ``nominee''.
    Access to the NYSE Amex System and business on the Trading Floor is 
limited to Amex Trading Permit Holders (``ATP Holders''), as defined in 
proposed Rule 900.2NY(5). ATP Holders are natural persons, sole 
proprietorships, partnerships, corporations, limited liability 
companies, or other organizations that have been issued an ATP. 
References in the Rules of NYSE Alternext to ``member,'' ``member 
organization,'' and ``86 Trinity Permit Holder'' should be deemed to be 
references to ATP Holders. In addition, within Rule Section 900NY, 
(specifically Rules 920NY-928NY) are rules which describe Market 
Makers, Specialists, and electronic Specialists, and their respective 
rights and obligations. These are similar to NYSE Arca rules 6.32-6.40.
    In connection with the implementation of the System, NYSE Amex 
proposes to adopt definitions applicable to activity on the System. The 
most significant of the proposed definitions are as follows:
    Proposed NYSE Amex Rule 900.2NY(44). NOW Recipients. As described 
further below, NYSE Amex proposes to add ``NOW Order'' as a new order 
type. Users will be permitted to designate orders entered on the System 
as ``NOW Orders.'' NOW Orders are limit orders that are to be executed 
in whole or in part on the System. Any portion of such orders not 
executed on the System will be routed to one or more ``NOW Recipients'' 
for immediate execution. ``NOW Recipients'' include any Market Center 
(1) with which NYSE Amex maintains an electronic linkage, and (2) that 
provides instantaneous responses to NOW Orders routed from the System. 
NYSE Amex will designate those Market Centers that qualify as NOW 
Recipients and periodically publish such information via its Web site. 
Any portion of a NOW Order not immediately executed by the NOW 
Recipient will be cancelled. If a NOW Order is not marketable when it 
is submitted to the System, it will be cancelled.
    Proposed NYSE Amex Rule 900.3NY. In addition to certain existing 
order types (e.g., Limit Orders, Market Orders), NYSE Amex is proposing 
to add several new order types available for entry on the System. These 
include the following:
    Proposed NYSE Amex Rule 900.3NY(c). Inside Limit Order. An ``Inside 
Limit Order'' is a Limit Order, which, if routed away pursuant to Rule 
964NY, will be routed to the market participant with the best displayed 
price. Any unfilled portion of the order will not be routed to the next 
best price level until all quotes at the current best bid or offer are 
exhausted. If the order is no longer marketable it will be ranked in 
the Consolidated Book pursuant to Rule 964NY.
    Proposed NYSE Amex Rule 900.3NY(d). Working Order. Working Orders 
consist of several existing order types (i.e., All-or-None Orders, Stop 
Order) as well as several new order types (i.e., Reserve Orders, Stock 
Contingency Orders, Tracking Orders). Working orders are maintained in 
the Consolidated Book Working Order Process, are not disseminated on 
the System and are executed in accordance with NYSE Amex Rule 964NY. A 
Working Order is any order that has a conditional or undisplayed price 
and/or size designated as a ``Working Order'' by NYSE Amex, including, 
without limitation:
    (1) Reserve Order. A limit order with a portion of the size 
displayed (``display size'') and with a reserve portion of the size 
(``reserve size'') that is not displayed on the System.
    (2) All-or-None Order (``AON Order''). A Market or Limit Order that 
is to be executed in its entirety or not at all.
    (3) Stop Order. A Stop Order is an order that becomes a Market 
Order when the market for a particular option contract reaches a 
specified price. A Stop Order to buy becomes a Market Order when the 
option contract trades at or above the stop price on the System or 
another Market Center or when the NYSE Amex bid is quoted at or above 
the stop price. A Stop Order to sell becomes a Market Order when the 
option contract trades at or below the stop price on the System or 
another Market Center or when the NYSE Amex offer is quoted at or below 
the stop price. Stop Orders (including Stop Limit Orders) shall not 
have standing in any order process in the Consolidated Book and shall 
not be displayed.
    (4) Stop Limit Order. A Stop Limit Order is an order that becomes a 
Limit Order when the market for a particular option contract reaches a 
specified price. A Stop Limit Order to buy becomes a Limit Order when 
the option contract trades at or above the stop price on the System or 
another Market Center or when the NYSE Amex bid is quoted at or above 
the stop price. A Stop Limit Order to sell becomes a Limit Order when 
the option contract trades at or below the stop price on the System or 
another Market Center or when the NYSE Amex offer is quoted at or below 
the stop price.
    (5) Stock Contingency Order. An option order the execution of which 
is contingent upon the last sale price as specified by the User of the 
underlying stock traded at the primary marketplace.
    (6) Tracking Order. A Tracking Order is an undisplayed limit order 
that is eligible for execution in the Working Order Process against 
orders equal to or less than the size of the Tracking Order. While 
Tracking Orders are ranked at their limit price, they are only eligible 
for execution at a price that matches the NBBO.
    For instance, the NBBO market in a series is 2.05-2.15, with a 2.10 
Tracking Order to buy 10 contracts, but the NYSE Amex displayed bid is 
2.00. An order is received to sell 6 contracts at 2.05; this order will 
be matched against the 2.10 buy Tracking Order at a price of 2.05, 
matching the NBBO.
    Similarly, with the same initial scenario, a second Tracking Order 
to buy 20 contracts paying 2.05 is placed in the Consolidated Book. An 
order is received to sell 15 contracts at 2.05. This order is matched 
against the second Tracking Order, since it outsizes the first Tracking 
Order. It will be executed at 2.05, the NBBO price.
    If a Tracking Order is executed but not exhausted, the remaining 
portion of the order shall be cancelled, without

[[Page 80496]]

routing the order to another market center or market participant. A 
Tracking Order shall not trade-through the NBBO.
    Proposed NYSE Amex Rule 900.3NY(o). NOW Order. A ``NOW Order'' is a 
Limit Order that is to be executed in whole or in part on the System, 
and the portion not so executed will be routed pursuant to Rule 964NY 
only to one or more NOW Recipients for immediate execution as soon as 
the order is received by the NOW Recipient. Any portion not immediately 
executed by the NOW Recipient will be cancelled. If a NOW Order is not 
marketable when it is submitted to NYSE Arca System, it will be 
cancelled.
    Proposed NYSE Amex Rule 900.3NY(p). PNP Order. A ``PNP Order'' 
(Post No Preference) is a Limit Order to buy or sell that is to be 
executed in whole or in part on NYSE Amex, and the portion not so 
executed is to be ranked in the Consolidated Book, without routing any 
portion of the order to another market center; provided, however, NYSE 
Amex shall cancel a PNP Order that would lock or cross the NBBO.
    Proposed NYSE Amex Rule 902NY. NYSE Amex is proposing NYSE Amex 
Rule 902NY to govern Access and Conduct on the Trading Floor at its new 
location at 11 Wall Street. Although the Options Trading Floor will be 
physically separated from the New York Stock Exchange and NYSE 
Alternext equity trading floor, the floors will be managed and overseen 
by combined NYSE Euronext employees, and the standards of dress and 
conduct for the Options Floor will be the same as the standards for the 
equity floor. Rule 902NY also describes additional standards of dress 
and conduct that will apply to the Options Floor, consistent with 
standards for the NYSE Arca Options Trading Floor.\6\ ATP Holders on 
the Trading Floor will be either Market Makers (including Specialists) 
or Floor Brokers.
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    \6\ See NYSE Arca Rule 6.2.
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    The Exchange currently has four general classifications of Market 
Maker: Specialist, Registered Options Trader (``ROT''), Supplemental 
Registered Options Traders (``SROT''), and Remote Registered Options 
Trader (``RROT''). Under the proposed new Rules, these will remain 
essentially the same, although ROTs and SROTs will be combined into one 
classification as Floor Market Maker. RROTs will become Remote Market 
Makers.
    There will be no limit to the number of Remote Market Makers, and 
no limit to the number of Floor Market Makers. The only significant 
change to the operations of Floor Market Makers is that the ``join 
quote'' mechanism described in Rule 958-ANTE (Options Transactions of 
Registered Options Traders and Supplemental Registered Options Traders 
and Remote Registered Options Traders) will not be available on the new 
System, and each Floor Market Maker will be required to submit quotes 
though their own proprietary quoting device.
    Proposed NYSE Amex Rule 902.1NY. Proposed NYSE Amex Rule 902.1NY 
will govern access to the System and the expected conduct of ATP 
Holders and persons employed by or associated with an ATP Holder. The 
Exchange also proposes in Rule 902.1NY to allow access to the System by 
Sponsored Participants. ATP Holders, and persons employed by or 
associated with any ATP Holder, while using the facilities of NYSE 
Amex, may not engage in conduct: (i) Inconsistent with the maintenance 
of a fair and orderly market; (ii) apt to impair public confidence in 
the operations of NYSE Amex; or (iii) inconsistent with the ordinary 
and efficient conduct of business. Activities that may violate these 
provisions include, but are not limited to: (a) Failure of a Market 
Maker to provide quotations in accordance with Rule 925NY; (b) failure 
of a Market Maker to bid or offer within the ranges specified by Rule 
925NY; (c) failure of an ATP Holder to adequately supervise a person 
employed by or associated with such ATP Holder to ensure that person's 
compliance with NYSE Amex Rules; (d) failure to abide by a 
determination of NYSE Amex; and (e) refusal to provide information 
requested by NYSE Amex.
    Proposed NYSE Amex Rule 920NY. Proposed NYSE Amex Rule 920NY 
defines ``Market Maker'' on the NYSE Amex System. A Market Maker on the 
System will be an ATP Holder registered with NYSE Amex for the purpose 
of submitting quotes electronically and making transactions as a 
dealer-specialist through the System from on the trading floor or 
remotely from off the trading floor. A Market Maker submitting quotes 
remotely is not eligible to participate in trades effected in open 
outcry except to the extent that such Market Maker's quotation 
represents the best bid or offer on the Exchange (``BBO''). Market 
Makers will be designated as specialists on NYSE Amex for all purposes 
under the Act and the Rules and Regulations thereunder. A Market Maker 
on NYSE Amex will be either a Specialist, a Floor Market Maker or a 
Remote Market Maker.
    A Specialist must provide continuous two-sided quotations 
throughout the trading day in its appointed issues for 90% of the time 
the Exchange is open for trading in each issue. Specialists are 
assigned a location on the Floor where their issues will trade; e-
Specialists are Market Makers located off the Floor who also have a 90% 
quoting obligation.
    Remote Market Makers (``RMMs'') are Market Makers who must provide 
continuous two sided quotations throughout the trading day in their 
appointed issues for 60% of the time the Exchange is open for trading 
in each issue. RMMs are located off the Floor of the Exchange, and 
generally have no rights with respect to open outcry transactions that 
take place on their quoted prices.
    Floor Market Makers (``FMMs'') are Market Makers who also must 
provide continuous two sided quotations throughout the trading day in 
their appointed issues for 60% of the time the Exchange is open for 
trading in each issue, and, in addition, are appointed to a Trading 
Zone on the Floor.
    Unless specified, or unless the context requires otherwise, the 
term Market Maker in the NYSE Amex Rules refers to Specialists, Floor 
Market Makers, and Remote Market Makers.\7\
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    \7\ See e-mail dated December 22, 2008, from Andrew B. Stevens, 
Chief Counsel--U.S. Equities & Derivatives, NYSE Euronext, Inc., to 
Natasha Cowen, Special Counsel, Division of Trading and Markets, 
Commission (restoring certain unintentionally omitted text).
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    Proposed NYSE Amex Rule 921.1NY. The Exchange is proposing NYSE 
Amex Rule 921.1NY to limit Remote Market Maker access to the System to 
those ATP Holders or officers, partners, employees or associated 
persons of ATP Holders that are registered with NYSE Amex as Market 
Maker Authorized Traders (``MMATs''). MMATs will be required to pass an 
NYSE Amex conducted examination to demonstrate their knowledge of NYSE 
Amex rules prior to being approved by NYSE Amex as an MMAT. NYSE Amex 
also may require a Remote Market Maker to provide additional 
information NYSE Amex considers necessary to establish whether a person 
should be approved as an MMAT. A person may be approved conditionally 
as an MMAT subject to any conditions NYSE Amex's Chief Regulatory 
Officer considers appropriate in the interests of maintaining a fair 
and orderly market.
    Rule 921.1NY will permit NYSE Amex to suspend or withdraw the 
registration of an MMAT if NYSE Amex determines that: (i) The person 
has caused the Market Maker to fail to comply with the Rules of NYSE 
Amex;

[[Page 80497]]

(ii) the person is not properly performing the responsibilities of an 
MMAT; (iii) the person has failed to meet the conditions described 
above (e.g., failed the Exchange administered examination); or (iv) 
NYSE Amex believes it is in the best interest of fair and orderly 
markets. If NYSE Amex suspends the registration of a person as an MMAT, 
the Remote Market Maker must not allow the person to submit quotes and 
orders on NYSE Amex System. The registration of an MMAT also will be 
withdrawn upon the written request of the ATP Holder for which the MMAT 
is registered. Such written request must be submitted on the form 
prescribed by NYSE Amex.
    Proposed NYSE Amex Rule 922NY. Proposed NYSE Amex Rule 922NY is 
based on NYSE Arca Rule 6.34, prohibits ATP Holders who are physically 
on the Floor from trading for their own personal account or for an 
account in which they have an interest, unless part of their market 
making obligations. Floor Brokers are thus prohibited from trading for 
an account for which they have an interest except to resolve a bona 
fide error resulting from their floor brokerage business.
    Proposed NYSE Amex Rule 923NY. NYSE Amex is proposing changes to 
the manner in which Market Maker appointments are made. Similar to 
current NYSE Arca Rule 6.35, Market Makers will be required to apply 
for an appointment in one or more options classes. NYSE Amex may 
appoint one Specialist per option class, additional e-Specialists, and 
an unlimited number of Market Makers in each class unless NYSE Amex 
determines that the number of Market Makers appointed to a particular 
option class should be limited whenever, in NYSE Amex's judgment, 
system capacity limits the number of Market Makers who may participate 
in a particular option class.
    NYSE Amex is proposing to delineate the number of classes per ATP 
that a Market Maker may select for its appointment as follows: (i) 
Market Makers with one ATP will have up to 100 option issues included 
in their appointment; (ii) Market Makers with two ATPs will have up to 
250 option issues included in their appointment; (iii) Market Makers 
with three ATPs will have up to 750 option issues included in their 
appointment; and (iv) Market Makers with four ATPs will have all option 
issues traded on NYSE Amex included in their appointment. Market Makers 
may select from among any option issues traded on NYSE Amex for 
inclusion in their appointment, subject to the approval of NYSE Amex.
    In addition, Floor Market Makers must select appointment to a 
Trading Zone on the Floor. The issues assigned to a Trading Zone by the 
Exchange will not be counted towards the number of issues per ATP 
selected by the Floor Market Maker. All transactions by a Market Maker 
in open outcry effected in issues in their appointed Trading Zone will 
be considered as transactions within their primary appointment. 
Specialists will be appointed to the Trading Zone designated for their 
issues.
    NYSE Amex will continue to consider the following factors when 
determining whether to approve the appointment of a Market Maker in 
each security: (i) The Market Maker's preference; (ii) the financial 
resources available to the Market Maker; (iii) the Market Maker's 
experience, expertise and past performance in making markets, including 
the Market Maker's performance in other securities; (iv) the Market 
Maker's operational capability; and (v) the maintenance and enhancement 
of competition among Market Makers in each security in which they are 
appointed.
    Market Makers will be permitted to change the option issues that 
are included in their appointment, subject to the approval of NYSE Amex 
and provided that such request is made in a form and manner prescribed 
by NYSE Amex. In considering whether to approve Market Makers' request 
to change their appointment, NYSE Amex will consider the five factors 
set forth directly above. Market Makers will be permitted to withdraw 
from trading an option issue that is within their appointment by 
providing NYSE Amex with three business days' written notice of such 
withdrawal. Market Makers who fail to give advance written notice of 
withdrawal to NYSE Amex may be subject to formal disciplinary action 
pursuant to NYSE Alternext Rule Section 9A.
    NYSE Amex will be permitted to suspend or terminate any appointment 
of a Market Maker in one or more option issues under Rule 923NY 
whenever, in NYSE Amex's judgment, the interests of a fair and orderly 
market are best served by such action. A Market Maker will be able to 
seek review of any action taken by NYSE Amex pursuant to the proposed 
Rule, including the denial of the appointment for, or the termination 
or suspension of, a Market Maker's appointment in an option issue or 
issues in accordance with Rule Section 9A.
    Market Makers will continue to be required to trade at least 75% of 
their contract volume per quarter in classes within their appointment.
    NYSE Amex will periodically conduct an evaluation of Market Makers 
to determine whether they have fulfilled performance standards relating 
to, among other things, quality of markets, competition among Market 
Makers, observance of ethical standards and administrative factors. In 
so doing, NYSE Amex may consider any relevant information including, 
but not limited to, the results of a Market Maker evaluation, trading 
data, a Market Maker's regulatory history and such other factors and 
data as may be pertinent in the circumstances. If NYSE Amex finds any 
failure by a Market Maker to meet minimum performance standards, NYSE 
Amex will be permitted to take the following actions after written 
notice and after opportunity for hearing pursuant to Section 9A: (i) 
Restrict appointments to additional option issues in the Market Maker's 
primary appointment; (ii) suspend, terminate or restrict an appointment 
in one or more option issues; or (iii) suspension, termination, or 
restriction of the Market Maker's registration in general. If a Market 
Maker's appointment in an option issue or issues has been terminated 
because it failed to meet minimum performance standards, the Market 
Maker will not be re-appointed as a Market Maker in that option issue 
or issues for a period not to exceed six months.
    Proposed NYSE Amex Rule 925NY. NYSE Amex is proposing new Rule 
925NY to outline Market Maker obligations (i) generally, (ii) within a 
Market Maker's appointed classes, and (iii) outside of a Market Maker's 
appointed classes on the System. Unlike NYSE Arca Rule 6.37, upon which 
it is based, NYSE Amex will not have an in-person requirement. In-
person requirements date back to a time when the only way for Market 
Makers to meet their obligations was to be present on the Floor to 
respond to a call for a market. In a modern marketplace, most of the 
liquidity on the Exchange is available electronically, and only 
electronically submitted bids and offers are able to be represented in 
the disseminated quote. The intent of the in-person requirement is 
actually better served by the 60% quoting obligation for Market Makers, 
and the requirement to conduct 75% of one's business within one's 
primary appointment.
    Proposed NYSE Amex Rule 925.1NY. NYSE Amex is proposing new Rule 
925.1NY to outline Market Maker quoting obligations on the System. 
Market Makers will be required to undertake a meaningful obligation to 
provide continuous two-sided markets in classes traded on the System.

[[Page 80498]]

Proposed Rule 925.1NY generally is consistent with NYSE Arca Rule 
6.37B. Under the proposed Rule, Market Makers only will be permitted to 
enter quotations in the classes included in their appointment.
    Proposed NYSE Amex Rule 925.2NY. NYSE Amex is proposing new Rule 
925.2NY that will allow Market Makers to enter on the System all 
permitted order types. However, orders do not satisfy or contribute to 
meeting a Market Maker's quoting obligation; that obligation is only 
satisfied by submission of legal width quotes.
    Proposed NYSE Amex Rules 927NY-927.3NY. The Exchange describes in 
proposed Rules 927NY-927.3NY Specialists and their rights, duties, and 
obligations, including the requirements for Information Barriers for 
ATP Holders affiliated with a Specialist.
    Proposed NYSE Amex Rules 927.4NY-927.6NY. The Exchange is also 
describing in proposed Rules 927.4NY-927.6NY e-Specialists, who are 
Remote Market Makers appointed to fulfill certain obligations required 
of Specialists. In addition to the Specialist, it is possible to have 
multiple e-Specialists.
    Proposed NYSE Amex Rule 928NY. NYSE Amex is proposing new Rule 
928NY to provide a mechanism for limiting Market Maker risk during 
periods of increased and significant trading activity on the System in 
a Market Maker's appointment. NYSE Amex proposes setting the ``n'' 
period for calculation of the number of trades by a Market Maker at one 
second. Furthermore, NYSE Amex will no longer generate two-sided quotes 
on behalf of a Specialist in the event that there are no Market Makers 
quoting in an issue. Rather, in the event that there are no Market 
Makers quoting in the issue, the best bids and offers of those orders 
residing in the Consolidated Book in the issue will be disseminated as 
the BBO. If there are no Market Makers quoting in the issue and there 
are no orders in the Consolidated Book in the issue, NYSE Amex System 
will disseminate a bid of zero and an offer of zero in that issue.
    Proposed NYSE Amex Rule 930NY. Proposed NYSE Amex Rule 930NY 
defines a Floor Broker as an ATP Holder who is registered with the 
Exchange for the purpose, while on the Floor, to accept and execute 
options orders received from ATP Holders and, in certain circumstances, 
orders from others.
    Proposed NYSE Amex Rules 931NY-932NY. Proposed NYSE Amex Rules 
931NY-932NY describe the registration and authorization of Floor 
Brokers, and are substantially the same as NYSE Arca Rules 6.44, 6.45, 
and 6.46.
    Proposed NYSE Amex Rule 933NY. Proposed NYSE Amex Rule 933NY 
describes the responsibilities of Floor Brokers, and is substantially 
the same as NYSE Arca Rule 6.46, with the addition of insuring 
compliance with Section 11(a)(1) of the Act. An ATP Holder must ensure 
that each of its transactions complies with Section 11(a) of the Act, 
which generally prohibits an ATP Holder from effecting a transaction 
trading for its own account, the account of an associated person, or an 
account with respect to which it or an associated person thereof 
exercises investment discretion (each, a ``covered account'') unless a 
valid exemption in the statute or the rules thereunder applies.
    In cases where a Floor Broker's transaction would occur at the same 
price as one or more orders on the electronic book, the Floor Broker, 
if it can rely on no exception other than the ``G'' exception (Section 
11(a)(1)(G); Rule 11a1-1(T)), must, in addition to complying with the 
other requirements of the ``G'' exemption, yield to all orders in the 
Consolidated Book at the same price if the Floor Broker has no ability 
to determine that an order in the Consolidated Book is not the order of 
a non-ATP Holder. In addition, in the case where an ATP Holder submits 
an order to the book (or an order is submitted on its behalf) and such 
ATP Holder is relying on the ``G'' exemption, the order must be entered 
as IOC.
    In addition, when relying on the exemption set forth in Rule 11a2-
2(T) under the Act, a Floor Broker may not enter into the NYSE 
Alternext System any order for a covered account, including orders sent 
to it by an affiliated ATP Holder from off the floor, if the order is 
for such affiliated ATP Holder's own account, the account of an 
associated person, or an account over which it or an associated person 
exercises investment discretion.
    Proposed NYSE Amex Rule 934NY. NYSE Amex is proposing Rules 934NY, 
934.1NY, 934.2NY, and 934.3NY to govern crosses effected on the trading 
floor. Proposed Rule 934NY describes (i) Customer-to-Customer crosses 
and (ii) Non-facilitation (Regular Way) crosses. Proposed Rule 934.1NY 
describes Facilitation Cross Transactions. Proposed Rule 934.2NY 
describes At-Risk Cross Transactions, while Proposed Rule 934.3NY 
describes Solicitation. In all cases, Floor Brokers must request bids 
and offers for the option series involved and make the Trading Crowd 
and the Trading Official aware of the request for market. Trading crowd 
participants will be given a reasonable time to respond with the prices 
and sizes at which they would be willing to participate in the cross. 
With respect to facilitations, Floor Brokers still will be permitted to 
participate in up to 40% of the balance of an order to be facilitated 
once Customer bids or offers in the Consolidated Book at or better than 
the proposed execution price, have been satisfied.
    There is no electronic crossing mechanism proposed for NYSE Amex 
System at this time.
    Proposed NYSE Amex Rule 935NY. Proposed NYSE Amex Rule 935NY 
requires Floor Brokers to expose agency orders for a period of time 
before attempting to execute them as Principal, and is based on NYSE 
Arca Rule 6.47A.
    Proposed NYSE Amex Rule 935NY. The Exchange describes in proposed 
Rule 935NY Discretionary Transactions, and limits a Floor Broker's use 
of discretion on orders.
    Proposed NYSE Amex Rule 937NY. Proposed NYSE Amex Rule 937NY limits 
a Floor Broker from acting as both Principal and Agent in the Same 
Transaction unless it is part of an error resulting from the Floor 
Broker's error or omission.
    Proposed NYSE Amex Rule 940NY. Proposed NYSE Amex Rule 940NY 
describes the obligations of Trading Officials for fair, orderly, and 
competitive market.
    Proposed NYSE Amex Rule 952NY. NYSE Amex is proposing new NYSE Amex 
Rule 952NY to govern the opening process, which traditionally has been 
referred to as a ``rotation,'' and which will be referred to as an 
``auction'' on the NYSE Amex System. A ``Trading Auction'' is a process 
by which trading is initiated in a specified options class. Trading 
Auctions may be employed at the opening of NYSE Amex each business day 
or to re-open trading after a trading halt. Trading Auctions will be 
conducted automatically by the System.
    The System will accept Market and Limit Orders and quotes for 
inclusion in the opening auction process (``Auction Process'') until 
the Auction Process is initiated in that option series. Prior to the 
Auction Process, (``pre-opening''), non-Market Makers will be able to 
submit orders to the System and Market Makers will be able to submit 
two-sided quotes and orders to the System. Contingency orders (except 
for ``opening only'' orders) will not participate in the Auction 
Process. Any eligible open orders residing in the Consolidated Book 
from the previous trading session will be included in the Auction 
Process. After the primary market for the underlying security 
disseminates the

[[Page 80499]]

opening trade or the opening quote (or the first disseminated value for 
index options), the related option series will be opened automatically 
based on the following principles and procedures:
    a. The System will determine a single price at which a particular 
option series will be opened.
    b. Orders and quotes in the System will be matched up with one 
another based on price-time priority. Orders at or better than the 
opening price will have priority over Market Maker quotes.
    c. Orders in the Consolidated Book that were not executed during 
the Auction Process shall become eligible for the Core Trading Session 
immediately after the conclusion of the Auction Process.
    To determine the opening price in a series, upon receipt of the 
first consolidated quote or trade of the underlying security, the 
System will compare the OPRA NBBO market with an instantaneous BBO 
market. NYSE Amex System will generate an opening trade if possible or 
open a series on the quoted market. The System then will send the NYSE 
Amex BBO quote to OPRA.
    The opening price of a series will be the price, as determined by 
the System, at which the greatest number of contracts will trade at or 
nearest to the midpoint of the initial NBBO disseminated by OPRA, if 
any, or the midpoint of the best quote bids and quote offers in the 
Consolidated Book. Midpoint pricing will not occur if that price would 
result in an order or part of an order being traded through. Instead 
the Trading Auction will occur at that limit price, or, if the limit 
price is superior to the quoted market, within the range of 75% of the 
best quote bid and 125% of the best quote offer. The same process will 
be followed to reopen an option class after a trading halt.
    Unmatched orders and Market Maker quotes that are marketable 
against the initial NBBO will ``sweep'' through the Consolidated Book 
and be executed in price/time priority. If the best price is at an away 
Market Center(s), orders will be routed away to the relevant Market 
Center(s).
    Proposed NYSE Amex Rule 953NY. Proposed NYSE Amex Rule 953NY 
outlines procedures for halting or suspending trading in a class of 
options.
    Proposed NYSE Amex Rule 954NY. Proposed NYSE Amex Rule 954NY, Order 
Identification, is based on NYSE Arca Rule 6.66; however, the Exchange 
is proposing to exclude the requirements to identify the particular ATP 
Holder when requesting a quote and size from the crowd, in order to 
avoid the possibility of disparate treatment. Additionally, the 
Exchange is proposing to not include the Commentaries found in NYSE 
Arca Rule 6.66, as the Exchange finds these inconsistent with the 
efforts to make the market transparent.
    Proposed NYSE Amex Rules 955NY and 956NY. Proposed NYSE Amex Rules 
955NY and 956NY describe the requirements for order format and system 
entry requirements, and the elements required for keeping a record of 
orders, and are based on NYSE Arca Rules 6.67 and 6.68. The Exchange 
will not maintain and preserve all electronic orders on behalf of ATP 
Holders, but is still bound by its own requirements to preserve records 
of orders.
    Proposed NYSE Amex Rule 957NY. Proposed NYSE Amex Rule 957NY 
describes the reporting duties of ATP Holders. Although based on NYSE 
Arca Rule 6.69, the Exchange is proposing to require open outcry 
transactions between a Floor Broker and a Market Maker to be reported 
by the Floor Broker, regardless of who is the seller. The Floor Broker 
will already have the order details systematized by virtue of it being 
input into an Electronic Order Capture device.
    Proposed NYSE Amex Rule 958NY. Proposed NYSE Amex Rule 958NY 
determines that the execution price is binding despite errors in 
reporting the price and is based on NYSE Arca Rule 6.70.
    Proposed NYSE Amex Rule 959NY. Proposed NYSE Amex Rule 959NY 
describes the meaning of premium bids and offers, and is based on NYSE 
Arca Rule 6.71.
    Proposed NYSE Amex Rule 960NY. Proposed NYSE Amex Rule 960NY 
describes the minimum quoting increments and the minimum trading 
increments for options, and is based on NYSE Arca Rule 6.72.
    Proposed NYSE Amex Rule 961NY. Proposed NYSE Amex Rule 961NY 
outlines the manner of bidding or offering, either electronically 
through the NYSE Amex System, or in open outcry, and is substantially 
the same as NYSE Arca Rule 6.73.
    Proposed NYSE Amex Rule 963NY. Proposed NYSE Amex Rule 963NY 
describes Priority and Order Allocation Procedures for Open Outcry 
trading. These provisions are substantially the same as used on other 
floor based options exchanges. Generally, bids and offers are afforded 
priority on a price time basis on response to a call for a market. The 
Floor Broker or Market Maker who calls for the market is responsible 
for determining the sequence in which bids or offers are vocalized. If 
bids or offers are made simultaneously, they will be on parity. If an 
ATP Holder has previously requested a market to fill an order, and the 
crowd has provided a collective response, then the order will be 
allocated on a size pro rata basis.
    Proposed NYSE Amex Rule 963NY. Proposed Rule 963NY also provides 
for a Specialist's entitlement to 40% of the balance of any order after 
Customer bids and offers in the Consolidated book have been satisfied; 
provided, however, that the Specialist has vocally responded to the 
Floor Broker's call for a market, and has responded with a price that 
is at least equal to the best bid or offer. In addition, the Rule 
describes Priority on Split Price Transactions, which are substantially 
the same as approved in NYSE Arca Rule 6.75(h).
    Proposed NYSE Amex Rule 963.1NY. Proposed Rule 963.1NY describes 
the proper trading procedures for complex orders, which are based on 
NYSE Arca Rule 6.75 Commentary .01. and NYSE Arca Rule 6.91 
Commentaries .01 and .02.
    Proposed NYSE Amex Rule 964NY. NYSE Amex will display all non-
marketable Limit Orders in the Display Order Process of the 
Consolidated Book. Except as otherwise permitted by Rule 964NY, all 
bids and offers at all price levels in the Consolidated Book will be 
displayed on an anonymous basis. The System also will disseminate 
current consolidated quotations/last sale information, and such other 
market information as may be made available from time to time pursuant 
to agreement between NYSE Amex and other Market Centers, consistent 
with the Plan for Reporting of Consolidated Options Last Sale Reports 
and Quotation Information.
    Bids and offers will be ranked and maintained in the Display Order 
Process and/or Working Order Process of the Consolidated Book according 
to account type and price-time priority.
a. Within the Display Order Process
    Limit Orders, with no other conditions, and quotes will be ranked 
based on account type and the specified price and the time of original 
order or quote entry. The display portion of Reserve Orders (not the 
reserve size) will be ranked in the Display Order Process by account 
type and at the specified limit price and the time of order entry. When 
the display portion of the Reserve Order is decremented completely, the 
display portion of the Reserve Order will be refreshed for
    (1) The display amount; or
    (2) The entire reserve amount, if the remaining reserve amount is 
smaller than the display amount, from the reserve portion and shall be 
submitted

[[Page 80500]]

and ranked at the specified limit price and the new time that the 
displayed portion of the order was refreshed.
b. Within the Working Order Process
    (1) The reserve portion of Reserve Orders will be ranked based on 
account type and the specified limit price and the time of original 
order entry. After the displayed portion of a Reserve Order is 
refreshed from the reserve portion, the reserve portion remains ranked 
based on the original time of order entry, while the displayed portion 
is sent to the Display Order Process with a new time-stamp.
    (2) All-or-None Orders will be ranked based on account type and the 
specified limit price and the time of order entry.
    (3) Stop and Stop Limit Orders will be ranked based on account type 
and the specified stop price and the time of order entry.
    (4) Stock Contingency Orders will be ranked based on account type 
and the specified limit price and the time of order entry.
    (5) Tracking Orders will be ranked based on account type and the 
specified limit price and the time of order entry.
    Consistent with Rule 602 under Regulation NMS, the best-ranked 
displayed bids and the best ranked displayed offers in the Consolidated 
Book and the aggregate displayed size of such bids and offers 
associated with such prices shall be collected and made available to 
vendors for dissemination.
    Proposed Rule 964NY also outlines the applicable requirements for 
order execution and priority on the System. Incoming orders will be 
matched against bids and offers in the System based on price, account 
type, and time. For an execution to occur in any order process, the 
price must be equal to or better than the NBBO, unless the System has 
routed orders to away Market Centers at the NBBO.
    The NYSE Amex System first will attempt to match incoming 
marketable bids and offers against bids or offers in the Display Order 
Process at the display price of the resident bids or offers for the 
total amount of option contracts available at that price or for the 
size of the incoming order, whichever is smaller. For the purposes of 
proposed Rule 964NY, the size of an incoming Reserve Order will include 
the displayed and reserve size, and the size of the portion of the 
Reserve Order resident in the Display Order Process is equal to its 
displayed size.
    NYSE Amex proposes to allocate incoming marketable bids and offers 
as follows:
    (1) The incoming marketable bid or offer will be matched against 
Customer orders in the Display Order Process at the NBBO.
    (2) If there are any remaining contracts to be executed after 
matching against Customer orders, and the incoming marketable bid or 
offer has been directed to a Directed Order Market Maker, the Directed 
Order Market Maker will receive 40% of the balance of the order, 
provided the Directed Order Market Maker is quoting at the NBBO for at 
least that size.
    (3) If the incoming marketable bid or offer has not been directed 
to a Directed Order Market Maker, or if the Directed Order Market Maker 
is not quoting at the NBBO, the bid or offer will be matched against 
the Specialist Pool for 40% of the remaining balance of the bid or 
offer, provided the Specialist Pool is quoting at the NBBO for at least 
that size.
    (4) If the bid or offer has not been executed in its entirety, the 
remaining part of the order shall be matched against non-customer bids 
and offers on a size pro-rata basis.
    If the original bid or offer is for 5 contracts or less, and has 
either not been directed to a Directed Order Market Maker, or the 
Directed Order Market Maker is not quoting at the NBBO, the entire bid 
or offer will be matched against the bid or offer of the Specialist 
Pool after being matched against any customer bids or offers in the 
Display Order Process, provided the Specialist Pool is quoting at the 
NBBO. The participants in the Specialist Pool will be allocated orders 
of five contracts or less on a rotating basis, provided the 
participant's quoted size is equal to or greater than the size of the 
allocation. The Exchange will monitor the sizes of all orders received, 
and, on a quarterly basis, will evaluate the percentage of volume 
constituted by orders of five contracts or less. If 40% or more of the 
order flow is comprised of orders of five contracts or less, the 
Exchange will reduce the eligible size for orders included in this 
provision.
    If the bid or offer has not been executed in its entirety, the 
remaining part of the order shall be matched against any Working Orders 
at or better than the NBBO.
    An incoming marketable bid or offer will be matched against orders 
within the Working Order Process in the order of their ranking, at the 
price of the displayed portion (for Reserve Orders) or at the limit 
price (for most other Working Order types), for the total amount of 
option contracts available at that price or for the size of the 
incoming bid or offer, whichever is smaller. Incoming marketable bids 
and offers will be matched against Tracking Orders in the order of 
their ranking, but only at a price equal to the NBBO, and only if the 
incoming marketable bid or offer is eligible for routing and is less 
than the size of the Tracking Orders.
    If an incoming marketable order has not been executed in its 
entirety on the System and it has been designated as an order type that 
is eligible to be routed away, the order will be routed for execution 
to another Market Center(s).
    The order will be routed, either in its entirety or as component 
order, to another Market Center(s) as a Limit Order equal to the price 
and up to the size of the quote published by the Market Center(s). The 
remaining portion of the order, if any, will be ranked and displayed in 
the Consolidated Book in accordance with the terms of such order and 
such order shall be eligible for execution pursuant to Rule 964NY. A 
marketable Reserve Order may be routed serially as component orders, 
such that each component corresponds to the display size of the Reserve 
Order.
    An order that has been routed away will remain outside of the 
System for a prescribed period of time and may be executed in whole or 
in part subject to the applicable trading rules of the relevant Market 
Center. While an order remains outside of the System, it will have no 
time standing, relative to other orders received from Users at the same 
price that may be executed against the Consolidated Book.
    Requests from Users to cancel their orders while the orders are 
routed away to another Market Center and remain outside the System will 
be processed subject to the applicable trading rules of the relevant 
Market Center.
    Where an order or portion of an order is routed away and is not 
executed either in whole or in part at the other Market Center (i.e., 
all attempts at the fill are declined or timed-out), the order shall be 
ranked and displayed in the Consolidated Book in accordance with the 
terms of such order, and such order shall be eligible for execution 
under proposed Rule 964NY, but will not have time standing relative to 
other orders received from Users at the same price while it was outside 
the System.
    Proposed NYSE Amex Rule 964.1NY describes Directed Orders, and is 
substantially the same as NASDAQ OMX PHLX Rule 1080(l). It would be 
considered a violation of just and equitable principals of trade and a 
misuse of non public information for a Directed Order Market Maker to 
become aware of an impending Directed Order so as to improve the quote 
to momentarily match the NBBO, and then worsen the price of the quote 
following execution of the Directed Order.

[[Page 80501]]

    Proposed NYSE Amex Rule 964.2NY. Proposed NYSE Amex Rule 964.2NY 
describes the participation entitlement of Specialists and e-
Specialists, which collectively comprise the Specialist Pool, as 
defined in proposed Rule 900.3NY(y). Generally, the Specialist Pool is 
entitled to 40% of the remaining balance of an order after any orders 
on behalf of Customers in the Consolidated Book are satisfied. The 
Specialist's participation within the Pool is granted extra weighting, 
with no more than 66 2/3% if there is only one e-Specialist, and no 
more than 50% if there are two or more e-Specialists.
    Proposed NYSE Amex Rule 965NY. Proposed NYSE Amex Rule 965NY, 
Contract Made on Acceptance of Bid or Offer, is based on NYSE Arca Rule 
6.77 and on NYSE Alternext Rule 953--ANTE.
    Proposed NYSE Amex Rule 970NY. Proposed NYSE Amex Rule 970NY is 
substantially the same as NYSE Arca Rule 6.86. Rule 970NY will state 
the minimum quotation size will be one contract. NYSE Arca Rule 6.86 
Commentary .03 is proposed to be designated as NYSE Amex Rule 970.1NY.
    Proposed NYSE Amex Rule 975NY. The Exchange is also proposing new 
NYSE Amex Rule 975NY--Obvious Errors and Catastrophic Errors. Proposed 
Rule 975NY is substantially based on NYSE Arca Rule 6.87.
    Proposed NYSE Amex Rules 990NY-993NY. Proposed NYSE Amex Rules 
990NY-993NY describe the Operation of the Linkage, Order Protection, 
Locked and Crossed Markets, and Limitations on Principal Order Access. 
These Rules are essentially the same as the uniform rules governing 
Linkage on all options exchanges, including existing NYSE Alternext 
Rules 940-944, and Rule 941 ANTE.
    Proposed NYSE Amex Rule 995NY. NYSE Amex proposes new Rule 995NY 
which describes Prohibited Conduct. The first section of the proposed 
rule prohibits conduct that threatens, harasses, intimidates, 
constitutes a ``refusal to deal'' or retaliates against another ATP 
Holder or associated person of an ATP Holder. The second section 
prohibits de facto market making through the use of Customer orders, 
since Customer orders have priority at any price over the bids and 
offers of non-customers. The third section prohibits ATP Holders who 
have knowledge of the material terms and conditions of an order, the 
execution of which is imminent, from buying or selling related options, 
underlying securities, or related securities, until the terms of the 
order are disclosed to the trading crowd, or the execution of the order 
is no longer considered to be imminent.
    In addition, the Exchange is proposing to add Part 1C to the 
Supplementary Material of NYSE Alternext Rule 476A. Part 1C lists 
options rule violations and their applicable fines that will be in 
effect upon implementation of the NYSE Amex System and the relocation 
of the Trading Floor to 11 Wall Street, New York, NY.
    Current NYSE Alternext Rule 476 includes Sanctioning Guidelines in 
its Supplementary Material. While the principles to be considered in 
determining sanctions will continue, the guidelines after Supplementary 
Material .01(C)(19) that describe specific types of violations all 
pertain to the existing NYSE Alternext Rules, and will not apply to 
violations of Rules in Section 900NY.
    The Exchange believes the proposed new rules will reduce regulatory 
confusion, encourage efficient transactions on both the electronic 
market and in open outcry trading, and delineate an unambiguous 
standard for conducting a fair and orderly market.
2. Statutory Basis
    The Exchange believes that this filing is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\9\ 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 mechanisms of a free and open 
market and a national market system.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-NYSEALTR-2008-14 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street, NE., Washington, DC 20549.

All submissions should refer to File Number SR-NYSEALTR-2008-14. 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, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m.

[[Page 80502]]

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-NYSEALTR-2008-14 and should be submitted 
on or before January 21, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-31053 Filed 12-30-08; 8:45 am]

BILLING CODE 8011-01-P