Document ID: SEC-2010-1740-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2010-11-15T05:00Z

[Federal Register Volume 75, Number 219 (Monday, November 15, 2010)]
[Notices]
[Pages 69729-69730]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-28690]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63272; File No. SR-NYSEArca-2010-96]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Arca 
Equities Rule 7.31(f) To Modify the Functionality of Tracking Orders

November 8, 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 October 29, 2010, NYSE Arca, Inc. (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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 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 NYSE Arca Equities Rule 7.31(f) to 
modify the functionality of Tracking Orders. 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend NYSE Arca Equities Rule 7.31(f) to 
modify the functionality of Tracking Orders.
    A Tracking Order is an undisplayed, priced round lot order that is 
eligible for execution in the Tracking Order Process \4\ against orders 
equal to or less than the aggregate size of Tracking Order interest 
available at that price. Presently, if a Tracking Order is executed but 
not exhausted, the remaining portion of the order is cancelled, without 
routing the order to another market center or market participant. An 
ETP Holder that wishes to maintain its Tracking Order on the Exchange 
after partial execution must re-enter another Tracking Order.
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    \4\ See NYSE Arca Equities Rule 7.37 (Order Execution). The 
Tracking Order Process is available during Core Trading Hours only, 
during which orders may be matched and executed in the Tracking 
Order Process as follows: If an order has not been executed in its 
entirety pursuant to the Directed Order, Display Order or Working 
Order processes, the NYSE Arca Marketplace shall match and execute 
any remaining part of the order in the Tracking Order Process in 
price/time priority, except that (1) any portion of an order 
received from another market center or market participant shall be 
cancelled immediately, and (2) an incoming ISO order shall not 
interact with the Tracking Order Process.
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    The Exchange proposes to modify the functionality of Tracking 
Orders to eliminate the current cancellation feature. Specifically, the 
Exchange proposes that, upon partial execution of a Tracking Order, the 
Tracking Order would not be cancelled, but rather the remaining portion 
of the order would repost in the Tracking Order Process with a new time 
priority. The reposted Tracking Order would remain available for 
execution within the Tracking Order Process until either the total 
posted size is exhausted or the Tracking Order is

[[Page 69730]]

cancelled by the submitting ETP Holder. Each execution and subsequent 
reposting prior to exhaustion or cancellation would result in a new 
time priority.
    The Exchange believes the elimination of the Tracking Order's 
current cancellation feature would benefit Exchange ETP Holders and 
customers by maintaining available liquidity in the Tracking Order 
Process, thereby increasing the likelihood that Tracking Orders would 
interact with contra-side liquidity and receive an execution. The 
proposed amendment would also increase ETP Holder efficiency with 
respect to time and messaging resources by eliminating the need to re-
enter the balance of partially executed Tracking Orders.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\5\ in 
general, and furthers the objectives of Section 6(b)(5) of the Act,\6\ 
in particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, 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. Specifically, 
the Exchange believes that the proposed change would maintain available 
liquidity in the Tracking Order Process while also increasing ETP 
Holder efficiency with respect to time and messaging resources by 
eliminating the need to re-enter the balance of partially executed 
Tracking Orders.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, 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 \7\ and Rule 19b-4(f)(6) thereunder.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and text of 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. The Exchange has fulfilled this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend 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-2010-96 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEArca-2010-96. 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,\9\ 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 printing 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 the 
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-NYSEArca-2010-96 and should be submitted on or before 
December 6, 2010.
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    \9\ The text of the proposed rule change is available on the 
Commission's Web site at http://www.sec.gov.
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    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-28690 Filed 11-12-10; 8:45 am]
BILLING CODE 8011-01-P