Document ID: SEC-2009-0360-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes:  New York Stock Exchange LLC
Posted Date: 2009-03-18T04:00Z

[Federal Register: March 18, 2009 (Volume 74, Number 51)]
[Notices]               
[Page 11624-11625]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18mr09-96]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59551; File No. SR-NYSE-2009-24]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC 
Extending for Two Months to May 31, 2009 the Moratorium Related to the 
Qualification and Registration of Registered Competitive Market Makers 
Pursuant to NYSE Rule 107A and Competitive Traders Pursuant to NYSE 
Rule 110

March 10, 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 March 3, 2009, 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, 
II, and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to extend for two months to May 31, 2009 the 
moratorium related to the qualification and registration of Registered 
Competitive Market Makers (``RCMMs'') pursuant to NYSE Rule 107A and 
Competitive Traders (``CTs'') pursuant to NYSE Rule 110.

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 extend for two months to May 31, 2009 the 
moratorium related to the qualification and registration of RCMMs 
pursuant to NYSE Rule 107A and CTs pursuant to NYSE Rule 110.
    On September 22, 2005, the Exchange filed SR-NYSE-2005-63 \4\ with 
the Securities and Exchange Commission (``Commission'') proposing to 
implement a moratorium on the qualification and registration of new 
RCMMS and CTs (``Moratorium''). The purpose of the Moratorium was to 
allow the Exchange an opportunity to review the viability of RCMMs and 
CTs in the NYSE HYBRID MARKET\SM\ (``Hybrid Market'').\5\
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 52648 (October 21, 
2005), 70 FR 62155 (October 28, 2005) (SR-NYSE-2005-63).
    \5\ See Securities Exchange Act Release No. 53539 (March 22, 
2006), 71 FR 16353 (March 31, 2006) (SR-NYSE-2004-05) (establishing 
the NYSE HYBRID MARKET\SM\).
---------------------------------------------------------------------------

    During each phase of the Hybrid Market, the NYSE implemented new 
system functionality that generated additional data to review. As a 
result, the Exchange was unable to make an informed decision as to the 
viability of RCMMs and CTs in the Hybrid Market. The phasing in 
implementation of the Hybrid Market required the Exchange to extend the 
Moratorium an additional six times over a twenty-four (24) month 
period.\6\ During the Moratorium, the Exchange reviewed the quarterly 
volume data of RCMM and CT trading data to determine the average 
trading volume of RCMMs.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release Numbers 54140 (July 13, 
2006), 71 FR 41491 (July 21, 2006) (SR-NYSE-2006-48); 54985 
(December 21, 2006), 72 FR 171 (January 3, 2007) (SR-NYSE-2006-113); 
55992 (June 29, 2007), 72 FR 37289 (July 9, 2007) (SR-NYSE-2007-57); 
56556 (September 27, 2007), 72 FR 56421 (October 3, 2007) (SR-NYSE-
2007-86); 57072 (December 31, 2007), 73 FR 1252 (January 7, 2008) 
(SR-NYSE-2007-125); 57601 (April 2, 2008), 73 FR 19123 (April 8, 
2008) (SR-NYSE-2008-22).
---------------------------------------------------------------------------

    On October 24, 2008, the Commission approved the Exchange's new 
market model filing (``Next Generation NYSE'').\7\ The Next Generation 
NYSE filing: (i) provided market participants with additional abilities 
to post hidden liquidity on Exchange systems; (ii) created a Designated 
Market Maker (``DMM''), and phased out the NYSE specialist; and (iii) 
enhanced the speed of execution through technological enhancements and 
a reduction in message traffic between Exchange systems and its DMMs. 
In light of the implementation of Next Generation NYSE, the Exchange 
requested extensions of the Moratorium to evaluate the viability of the 
RCMMs and CTs in the proposed Next Generation NYSE.\8\
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 58845 (October 24, 
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
    \8\ See Securities Exchange Act Release Numbers 58033 (June 26, 
2008), 73 FR 38265 (July 3, 2008) (SR-NYSE-2008-49); 58713 (October 
2, 2008), 73 FR 59024 (October 8, 2008) (SR-NYSE-2008-96); 59069 
(December 8, 2008), 73 FR 76081 (December 15, 2008) (SR-NYSE-2008-
124).
---------------------------------------------------------------------------

    Next Generation NYSE is currently operating as a pilot scheduled to 
end on October 1, 2009. The Exchange continued to review RCMM and CT 
trading data. As a result of its review, the Exchange concluded that 
RCMMs and CTs no longer serve as viable supplemental market makers. 
Accordingly, the Exchange determined that RCMMs and CTs should no 
longer be viable classes of traders on the Exchange and will formally 
file a separate proposed rule change with the Commission to eliminate 
RCMMs and CTs as viable classes of NYSE traders.

[[Page 11625]]

    The Exchange therefore proposes to extend the Moratorium as amended 
\9\ for an additional two (2) months to May 31, 2009 in order to 
complete the 19b-4 filing process.\10\ The Exchange's proposal will be 
filed consistent with the Act \11\ in order to afford interested 
persons an opportunity to submit written data, views, and arguments 
concerning the Exchange's proposal.\12\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 53549 (March 24, 
2006), 71 FR 16388 (March 31, 2006) (SR-NYSE-2006-11) (making 
certain amendments to the Moratorium).
    \10\ 17 CFR 240.19b-4.
    \11\ 15 U.S.C. 78s(a)(1).
    \12\ Id.
---------------------------------------------------------------------------

    The Exchange will issue an Information Memo announcing the 
extension of the Moratorium.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Act'') 
for this proposed rule change is the requirement under Section 6(b)(5) 
that an exchange have rules that are 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 filing is consistent with these principles. 
Based on its review of data associated with RCMM and CT trading, the 
Exchange has concluded that RCMMs and CTs no longer serve as viable 
supplemental market makers. In this instant filing, the Exchange seeks 
an extension of the Moratorium to finalize its proposal to eliminate 
RCMMs and CTs from the NYSE and will file that proposal with the 
Commission.

 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

    The proposed rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) of the Act.\13\ The Exchange asserts that the 
proposed rule change (i) will not significantly affect the protection 
of investors or the public interest, (ii) will not impose any 
significant burden on competition, and (iii) by its terms, will 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; provided that the 
self-regulatory organization has given 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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78s(b)(3)(A).
---------------------------------------------------------------------------

    An extension of the Moratorium does not burden competition because 
it does not restrict RCMMs from joining any RCMM firm or becoming or 
remaining an independent RCMM nor does it restrict any RCMM firm from 
hiring existing RCMMs. For the foregoing reasons, this rule filing 
qualifies for immediate effectiveness as a ``non-controversial'' rule 
change under paragraph (f)(6) of Rule 19b-4.\14\
---------------------------------------------------------------------------

    \14\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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-2009-24 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-2009-24. 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 the filing will also be available for 
inspection and copying at the principal office of the self-regulatory 
organization. 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-2009-24 and should be submitted on or before April 8, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-5766 Filed 3-17-09; 8:45 am]

BILLING CODE 8011-01-P