Document ID: SEC-2008-0243-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2008-02-14T05:00Z

[Federal Register: February 14, 2008 (Volume 73, Number 31)]
[Notices]               
[Page 8733-8735]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14fe08-108]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57287; File No. SR-NYSE-2008-12]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to NYSE Rule 104 (Dealings by Specialists)

February 7, 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 February 4, 2008, 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 prepared by the Exchange. The Exchange 
filed the proposed rule change pursuant to Section 19(b)(3)(A) of the 
Act \3\ and Rule 19b-4(f)(6) thereunder, which renders it effective 
upon filing with the Commission.\4\ 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.
    \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 NYSE proposes to amend Exchange Rule 104 (Dealings by 
Specialists) to conform its language to other recent amendments of Rule 
104 and Rule 70 (Bids and Offers).
    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 NYSE included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any

[[Page 8734]]

comments it received on the proposed rule change. The Exchange has 
prepared summaries set forth in Sections A, B, and C below of the most 
significant aspects 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 Exchange NYSE Rule 104 (Dealings by 
Specialists) to conform its language to recent amendments of NYSE Rule 
104 and NYSE Rule 70 (Bids and Offers). Specifically, on October 2, 
2007, the Exchange amended NYSE Rules 70 and 104 to reduce the minimum 
display requirement to 100 shares for Floor brokers and specialists to 
utilize the reserve functionality of the e-Quote and s-Quote.\5\ In 
doing so, the Exchange referred to the new display requirement in terms 
of a ``round-lot'' instead of using the term ``shares.'' The change in 
language takes into account that, for certain equity securities that 
trade on the Exchange, a round-lot is other than 100 shares.\6\
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    \5\ See Securities Exchange Act Release No. 56599 (October 2, 
2007) 72 FR 57622 (October 10, 2007) (SR-NYSE-2007-93).
    \6\ Exchange Rule 55 (Unit of Trading--Stocks and Bonds) 
provides in pertinent part, that: ``The unit of trading in stocks 
shall be 100 shares, except that in the case of certain stocks 
designated by the Exchange the unit of trading shall be such lesser 
number of shares as may be determined by the Exchange, with respect 
to each stock so designated.''
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    Pursuant to Exchange Rule 104(e), specialists are allowed to 
provide price improvement to an order through the use of an 
algorithmically generated trading message provided the specialist is 
represented in the bid or offer in a ``meaningful amount.'' This is 
defined in the Rule as 1,000 shares for the 100 most active securities 
on the Exchange, and 500 shares for all other securities on the 
Exchange.
    The Exchange proposes to amend the language in NYSE Rule 104(e)(ii) 
in order to conform it to the language contained in recent amendments 
to NYSE Rule 70.20(c) and NYSE Rule 104(d), by changing the reference 
to ``1,000 shares'' to ``ten round-lots'' and the reference to ``500 
shares'' to ``five round-lots.''
    The Exchange believes that the proposed amendment clarifies the 
operation of the rule by adding language that takes into account those 
equity securities that trade on the Exchange in units other than 100 
shares.
2. Statutory Basis
    NYSE believes that 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 
promote just and equitable principles of trade, to remove impediments 
to and perfect the mechanism of a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest. The Exchange believes that the instant proposal is consistent 
with the objectives of the Act in that the amendment serves to remove 
the ambiguity that currently exists in the rule text of Exchange Rule 
104(e)(ii) by clarifying the number of shares that a specialist must 
display in order to use his or her ability to provide price improvement 
in those equity securities that trade on the Exchange in units other 
than 100 shares.
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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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative prior to 
30 days from the date on which it was filed, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ Rule 19b-4(f)(6) also requires the Exchange to give the 
Commission 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 satisfied the pre-filing requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. NYSE has asked the 
Commission to waive the 30-day operative delay so that the proposal may 
become operative immediately upon filing. The Exchange believes the 
waiver of this period will allow it to immediately clarify certain 
terms within NYSE Rule 104, which it believes is in the public interest 
as it will avoid ambiguity or confusion by market participants as to 
how NYSE Rule 104 operates. The Commission believes such waiver is 
consistent with the protection of investors and the public interest 
because it presents no new issues and would provide clarification of 
the Exchange's rules with respect to equity securities that trade on 
the Exchange in units other than 100 shares. For this reason, the 
Commission designates the proposal to be operative upon filing with the 
Commission.\13\
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    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ For purposes only of waiving the 30-day pre-operative 
period, the Commission has considered the proposed rule's impact on 
efficiency, competition and capital formation. 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 e-mail to rule-comments@sec.gov. Please include File 
Number SR-NYSE-2008-12 on the subject line.

[[Page 8735]]

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-2008-12. 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. Copies of such filing will also be available for 
inspection and copying at the principal office of the NYSE. 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-2008-12 and should be 
submitted on or before March 6, 2008.

    For the Commission, by the Division of Trading and Markets, 
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. E8-2732 Filed 2-13-08; 8:45 am]

BILLING CODE 8011-01-P