Document ID: SEC-2009-0267-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Alternext US LLC
Posted Date: 2009-02-27T05:00Z

[Federal Register: February 27, 2009 (Volume 74, Number 38)]
[Notices]               
[Page 9016-9017]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27fe09-130]                         

[[Page 9016]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59429; File No. SR-NYSEALTR-2009-12]

 
Self-Regulatory Organizations; NYSE Alternext US LLC; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Establishing 
a Fee for Its New Risk Management Gateway Service

February 20, 2009.
    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 12, 2009, NYSE Alternext US LLC (``NYSE Alternext'' 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 
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 establish a fee for its new Risk 
Management Gateway (``RMG'') service.

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 these 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 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 offer, through NYSE Euronext Advanced 
Trading Solutions, Inc., the RMG service to NYSE Alternext members and 
member organizations. NYSE Transact Tools, Inc, a division of the NYSE 
Euronext Advanced Trading Solutions Group (``NYXATS''), owns RMG. RMG 
is a part of the NYSE Alternext Trading Systems (defined below) 
operated on behalf of the Exchange by New York Stock Exchange LLC 
(``NYSE'').\3\ This proposed rule change establishes fees for that 
service.
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    \3\ The establishment of fees on the NYSE for the same services 
was formally submitted to the Securities and Exchange Commission 
through a separate filing, SR-NYSE-2009-15.
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Background
    As described more fully in a related rule filing,\4\ NYSE Euronext 
acquired The Amex Membership Corporation (``AMC'') pursuant to an 
Agreement and Plan of Merger, dated January 17, 2008 (the ``Merger''). 
In connection with the Merger, the Exchange's predecessor, the American 
Stock Exchange LLC (``Amex''), a subsidiary of AMC, became a subsidiary 
of NYSE Euronext called NYSE Alternext US LLC, and continues to operate 
as a national securities exchange registered under Section 6 of the 
Securities Exchange Act of 1934, as amended (the ``Act'').\5\ The 
effective date of the Merger was October 1, 2008.
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    \4\ See Securities Exchange Act Release No. 58673 (September 29, 
2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60 and SR-Amex 
2008-62) (approving the Merger).
    \5\ 15 U.S.C. 78f.
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    In connection with the Merger, on December 1, 2008, the Exchange 
relocated all equities trading conducted on the Exchange legacy trading 
systems and facilities located at 86 Trinity Place, New York, New York 
(the ``86 Trinity Trading Systems''), to trading systems and facilities 
located at 11 Wall Street, New York, New York (the ``Equities 
Relocation''). The Exchange's trading systems and facilities at 11 Wall 
Street (the ``NYSE Alternext Trading Systems'') are operated by the 
NYSE on behalf of the Exchange.\6\
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    \6\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation).
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    In order to implement the Equities Relocation, the Exchange adopted 
NYSE Rules 1-1004 as the NYSE Alternext Equities Rules to govern 
trading on the NYSE Alternext Trading Systems. Rule 54--NYSE Alternext 
Equities provides that only members are permitted to ``* * * make or 
accept bids or offers, consummate transactions, or otherwise transact 
business on the Floor for any security admitted to dealings on the 
[Exchange] * * *.'' \7\
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    \7\ See also Rule 2--NYSE Alternext Equities.
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    On December 12, 2008, the Exchange filed with the Securities and 
Exchange Commission to establish its RMG service.\8\ RMG is a service 
designed to facilitate the ability of Sponsoring Member Organizations 
to monitor and oversee the sponsored access activity of their Sponsored 
Participants. NYXATS offers an order-verification service to Sponsoring 
Member Organizations that acts as a risk filter by causing the orders 
of Sponsored Participants to pass through RMG prior to entering the 
Exchange's trading systems for execution. When a Sponsored 
Participant's order passes through RMG, RMG software determines whether 
the order complies with order criteria that the Sponsoring Member 
Organization has established for that Sponsored Participant. The order 
criteria reviewed by RMG may include the size of the order or the 
credit limit that the Sponsoring Member Organization has established 
for the Sponsored Participant.
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    \8\ See Securities Exchange Act Release No. 59353 (February 3, 
2009), 74 FR 6935 (February 11, 2009) (SR-NYSEALTR-2008-12).
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    If the order is consistent with the parameters set by the 
Sponsoring Member Organization, RMG allows the order to continue along 
its path to the Exchange's trading systems. If the order falls outside 
of those parameters, then RMG returns the order to the Sponsored 
Participant. RMG will only return an order to the Sponsored Participant 
when the order fails to comply with the criteria set by the Sponsoring 
Member Organization.
    The Exchange does not require Sponsoring Member Organizations to 
use RMG. Sponsoring Member Organizations are free to use a competing 
risk-management service or to use none at all.
    The Exchange believes that RMG will offer its member organizations 
another option in the efficient risk management of its Sponsored 
Participant's access to the NYSE.
Fees
    NYXATS proposes to charge each Sponsoring Member Organization Three 
Thousand Dollars ($3,000) per month for the first Connection plus One 
Thousand Dollars ($1,000) per month for each additional Connection.
    A ``Connection'' is defined as up to 1000 messages per second 
inbound, regardless of the connection's actual capacity (i.e., if the 
NYXT infrastructure allows any single End User connection to support 
more than 1000 messages per second inbound, such connection will be 
deemed to be multiple Connections).
    The Exchange believes that the proposed fee would be fair and 
reasonable and would reflect an equitable allocation of charges among 
members and others. The fee compares favorably with the fees that 
NYXATS' competitors charge for similar services. Of course, the 
marketplace will determine if the fee is too high relative

[[Page 9017]]

to the value that the RMG service provides because any market 
participant that feels that the fee is too high will simply elect to 
use the risk management services of one of NYXATS' competitors.
Technical Amendment to Price List
    The Exchange further proposes through this filing to revise the 
date on the price list to reflect that it is applicable for the current 
year ``2009''.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``1934 
Act'') for this proposed rule change are the requirement under Section 
6(b)(4) \9\ that an exchange have rules that provide for the equitable 
allocation of reasonable dues, fees and other charges among its members 
and other persons using its facilities. The Exchange believes that RMG 
will promote marketplace efficiency by providing security safeguards to 
the trading of securities by means of sponsored access and believes 
that the proposed fee is fair and reasonable for the reasons cited 
above.
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    \9\ 15 U.S.C. 78f(b)(4).
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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 Exchange 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

    The foregoing proposed rule change is effective upon filing 
pursuant to Section 19(b)(3)(A)(ii) of the Act \10\ and Rule 19b-
4(f)(2) thereunder,\11\ because it establishes or changes a due, fee, 
or other charge applicable only to a member imposed by the Exchange.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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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-NYSEALTR-2009-12 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-NYSEALTR-2009-12. 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, 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 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 No. SR-NYSEALTR-2009-12 and should be submitted on or before March 
20, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-4181 Filed 2-26-09; 8:45 am]

BILLING CODE 8011-01-P