Document ID: SEC-2010-1069-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2010-07-14T04:00Z

[Federal Register: July 14, 2010 (Volume 75, Number 134)]
[Notices]               
[Page 40858-40859]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14jy10-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62461; File No. SR-NYSE-2010-50]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC 
Amending NYSE Rule 46 To Permit the Exchange Chairman To Designate More 
or Less Than Twenty (20) Floor Governors, as Needed

July 7, 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 25, 2010, New York Stock Exchange LLC (``NYSE'' or 
the ``Exchange'') 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 Rule 46 to permit the Exchange 
Chairman to designate more or less than twenty (20) Floor Governors, as 
needed. The text of the proposed rule change is available at the 
Exchange, the Commission's Web site at http://www.sec.gov, 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 NYSE Rule 46 (Floor Officials--
Appointment) to permit the Exchange Chairman to designate more or less 
than twenty (20) Floor Governors, as needed.\4\
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    \4\ The Exchange's corporate affiliate, NYSE Amex LLC (``NYSE 
Amex''), submitted a companion rule filing proposing corresponding 
amendments to NYSE Amex Equities Rule 46. See SR-NYSEAmex-2010-65.
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    Current NYSE Rule 46:
    NYSE Rule 46 permits the Chairman of the Exchange to, in 
consultation with the Executive Floor Governors of the Exchange and the 
NYSE Regulation (``NYSER'') Board of Directors, designate twenty (20) 
individual members as Floor Governors, subject to approval by the 
Exchange's Board of Directors.
    Pursuant to Rules 46 and 46A, Floor Governors are one of several 
ranks of the broader category of Floor Officials, including, in order 
of increasing seniority, Floor Officials, Senior Floor Officials, 
Executive Floor Officials, Floor Governors and Executive Floor 
Governors. As such, Floor Governors are drawn from the ranks of 
experienced NYSE Floor members.\5\
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    \5\ See Securities Exchange Act Release No. 57627 (April 4, 
2008), 73 FR 19919 (April 11, 2008) (SR-NYSE-2008-19, describing 
amendments to NYSE Rule 46).
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    As part of the NYSER Board's advisory function, NYSER staff examine 
the fitness of the individuals designated as prospective Floor 
Officials and administer a mandatory education program, which all 
candidates for Floor Official, including Floor Governor, must complete. 
NYSER also administers a qualifying examination to newly-named Floor 
Officials, who must pass the exam prior to being recommended by the 
NYSER Board for appointment; however, upon being named as a Floor 
Governor, an individual does not need to retake the exam.\6\
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    \6\ See Securities Exchange Act Release No. 57627 (April 4, 
2008), 73 FR 19919 (April 11, 2008).
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    In addition to their regular obligations as either Floor brokers or 
Designated Market Makers, Floor Governors, who serve as volunteers, are 
empowered to perform such duties as are prescribed to them under the 
Rules of the Exchange. As noted above, under Rule 46 Floor Governors 
are also considered Floor Officials and may perform such duties as are 
prescribed to Floor Officials under Exchange Rules. In addition, Floor 
Governors may, as needed, perform any duty, make any decision, or take 
any action assigned to or required of an Executive Floor Governor in 
accordance with Exchange Rules, or as may be designated by the Exchange 
Board.
    For example, Floor Governors play a role in managing the Exchange's 
Trading Floor during unusual or volatile market situations. Under NYSE 
Rule 123D, members are to consult with a Floor Governor when the 
opening (reopening) price in a stock is anticipated to be at a 
significant disparity from the prior close. In addition, under Rule 
123D an intra-day trading halt requires approval from a Floor Governor 
(or two Floor Officials). Under Rule 18, Floor Governors are part of 
the Compensation Review Panel for resolving claims due to Exchange 
system failures. Pursuant to Rule 75, Floor Governors are sometimes 
involved in the resolution of certain trade disputes. And, pursuant to 
Rule 123C(9), a Floor Governor is sometimes also needed to supervise 
extreme order imbalances at the Close of trading when an Executive 
Floor Governor is unavailable.
    Proposed Amendments to NYSE Rule 46:
    The Exchange proposes to amend NYSE Rule 46 to permit the Chairman 
of the Exchange to appoint more or less than twenty (20) Floor 
Governors, as needed.
    Currently, the Exchange has seventeen (17) Floor Governors. At the 
present time, the Exchange believes that adding more Floor Governors, 
as needed, will help the Exchange to manage the Trading Floor more 
effectively and, consequently, to better serve investors and the public 
interest. As the recent market events of May 6, 2010, demonstrated, 
swift response to unusual and volatile market events on the Trading 
Floor helped to limit the disruption of the market for Exchange-listed 
securities and the harm to Exchange customers, as well as the market as 
a whole, and Floor Governors were involved in this process.
    Notwithstanding the foregoing, removing the requirement to appoint 
a specific number of Floor Governors will not change the Exchange's 
goal of having, at all times, enough personnel on the Trading Floor, 
including Floor Officials, Senior Floor Officials, Executive Floor 
Officials, Floor Governors and Executive Floor

[[Page 40859]]

Governors, as well as Exchange officers and staff, to properly oversee 
the NYSE market.\7\ In addition, the Exchange does not propose to 
change in any way the nature of Floor Governor duties or 
responsibilities.
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    \7\ While the Exchange currently seeks the ability to appoint 
more than 20 Floor Governors, it reserves the right to have fewer 
than 20 Floor Governors as conditions warrant.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Securities Exchange Act of 1934, as amended 
(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 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change supports the 
objectives of the Act and will provide a benefit to the market while 
also protecting investors and the public interest. By having more Floor 
Governors, as currently needed, the Exchange believes it will be better 
able to manage the Trading Floor, particularly in unusual market 
conditions. In addition, while the Exchange currently seeks the ability 
to appoint more than 20 Floor Governors, it reserves the right to have 
fewer than 20 Floor Governors as conditions warrant and as required to 
protect investors and the public interest.

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

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days after the date of the filing, 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 19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) 
\11\ thereunder.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Commission is waiving this 5-day pre-filing requirement.
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    The Exchange has asked the Commission to waive the 5-day prefiling 
requirement and the 30-day operative delay so that the proposal may 
become operative immediately upon filing. The Exchange has stated that 
it is requesting these waivers in light of recent market events and in 
connection with the Russell rebalancing on June 25, 2010, on which day 
the Exchange has stated that it expects an increase in trading volume 
and market volatility. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest, because such waiver will enable the Exchange to 
appoint more than twenty (20) Floor Governors to help the Exchange to 
manage the Trading Floor more effectively in time for the Russell 
rebalancing on June 25, 2010. For this reason, the Commission hereby 
waives the 30-day operative delay requirement and designates the 
proposed rule change as operative upon filing.\12\
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    \12\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSE-2010-50 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-NYSE-2010-50. 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 
printing in the Commission's Public Reference Room, 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-NYSE-2010-50 and should be submitted on or before August 
4, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-17112 Filed 7-13-10; 8:45 am]
BILLING CODE 8011-01-P