Document ID: SEC-2009-1001-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Amex LLC Adopting Rule 968NY-Cabinet Trades
Posted Date: 2009-07-20T04:00Z

[Federal Register: July 20, 2009 (Volume 74, Number 137)]
[Notices]               
[Page 35217-35218]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20jy09-86]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60296; File No. SR-NYSEAmex-2009-37]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC Adopting Rule 
968NY-Cabinet Trades

July 13, 2009.
    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 30, 2009, NYSE Amex (``NYSE Amex'' 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 Exchange filed the proposed rule change pursuant to 
Section 19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ 
which renders it effective upon filing with the Commission. 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.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt Rule 968NY-Cabinet Trades. The text 
of the proposed rule change is attached as Exhibit 5 to the 19b-4 form. 
A copy of this filing 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.

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
    NYSE Amex proposes to adopt new Rule 968NY which will govern 
cabinet trading.\6\ The proposed rule is substantially similar to NYSE 
Arca Rule 6.80.
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    \6\ A Cabinet Trade is also known as an Accommodation 
Transaction.
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    On March 2, 2009 NYSE Amex (f/k/a NYSE Alternext US LLC, f/k/a The 
American Stock Exchange LLC (collectively ``Amex'')) adopted a new rule 
set governing the trading of options.\7\ Much of the new rule set was 
based on the rules of NYSE Arca Inc. (``NYSE Arca''). In conjunction 
with the filing of the new rule set, the Exchange filed a separate 
proposal deleting many out-of-date and/or obsolete rules.\8\ Included 
as part of this filing was the deletion of former Amex Rule 959-
Accommodation [sic] Transactions, which contained provisions governing 
both cabinet trading and position transfers. However, when filing the 
new rule set the Exchange inadvertently failed to include new rules 
governing cabinet trading.
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    \7\ See Securities Exchange Act Release No. 59472 (February 27, 
2009), 74 FR 9843 (March 6, 2009) (order approving NYSEALTR-2008-14, 
as amended).
    \8\ See Securities Exchange Act Release No. 59454 (February 25, 
2009), 74 FR 9461 (March 4, 2009) (notice of filing and immediate 
effectiveness of NYSEALTR-2009-17).
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    The Exchange now proposes to add a new rule governing the trading 
of cabinet orders.\9\ A brief description of the rules change is shown 
below.
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    \9\ NYSE Amex proposes to adopt new rules related to the 
transfer of options positions as part of a separate rule filing.
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Cabinet Trading
    A cabinet order is a limit order in a non-Penny Pilot issue, which 
has been priced at $1.00.\10\ Cabinet orders serve as a way for market 
participants to liquidate a worthless, or near worthless position, at a 
minimal cost.
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    \10\ Certain option issues on NYSE Amex are traded pursuant to a 
Penny Pilot Program scheduled to run through July 3, 2009.
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    Prior to the adoption of the present NYSE Amex trading system, all 
cabinet trading on the Amex was done on a manual basis. Therefore, 
previous Rule Amex 959(a) dealt only with cabinet trading in open 
outcry. The Exchange now proposes to adopt new Rule 968NY which will 
govern both manual and electronic cabinet trading. This proposed rule 
is similar in all material respects to NYSE Arca Rule 6.80, which also 
governs both manual and electronic cabinet trading.
2. Statutory Basis
    The Exchange believes that for these reasons the proposed rule 
change is consistent with Section 6(b) of the Act \11\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act \12\ in 
particular, because it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. This proposal adds a new rule 
governing the

[[Page 35218]]

trading of cabinet orders, based on NYSE Arca Rule 6.80.
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    \11\ 15 U.S.C. 78f(b).
    \12\ 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

    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 from the date on which it was 
filed, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \13\ 
and Rule 19b-4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization to submit to 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 this requirement.
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    The Exchange has requested the Commission to waive the 30-day 
operative delay because the proposal will afford market participants on 
the Exchange the same opportunity to execute cabinet trades as is 
afforded to market participants on other exchanges. The Commission 
notes that the Exchange deleted its former rule on cabinet trading in 
March of this year and inadvertently failed to include a new rule on 
cabinet trading in its new rule set governing options trading.\15\ The 
Commission believes waiving the 30-day operative delay to provide NYSE 
Amex market participants the ability to immediately engage in cabinet 
trading, as necessary, is consistent with the protection of investors 
and the public interest.\16\ Accordingly, the Commission designates the 
proposed rule change operative upon filing with the Commission.
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    \15\ See supra notes 7 and 8 and accompanying text.
    \16\ For purposes only of waiving the 30-day operative delay of 
this proposal, 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-NYSEAmex-2009-37 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-NYSEAmex-2009-37. 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 on official 
business days between the hours of 10 a.m. and 3 p.m. 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-NYSEAmex-2009-37 and should be submitted on or before 
August 10, 2009.
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    \17\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-17135 Filed 7-17-09; 8:45 am]

BILLING CODE 8010-01-P