Document ID: SEC-2009-0952-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2009-07-13T04:00Z

[Federal Register: July 13, 2009 (Volume 74, Number 132)]
[Notices]               
[Page 33489-33491]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13jy09-136]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60256; File No. SR-NYSEArca-2009-56]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Add Two New 
Order Types to NYSE Arca Equities Rule 7.31

July 7, 2009.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on June 23, 2009, NYSE Arca, Inc. (``NYSE Arca'' 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\ 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 add two new order types to NYSE Arca 
Equities Rule 7.31. 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
    The Exchange proposes to add two new order types to NYSE Arca 
Equities Rule 7.31. The new order types will allow NYSE Arca Users \3\ 
to participate at the primary listing exchange during the first 15 
minutes and last 15 minutes of the trading day. For the remainder of 
the trading session the orders will remain in the NYSE Arca Book 
(``Arca Book''). The two new order types behave like a combination of 
currently existing order types and are discussed more thoroughly below.
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    \3\ See NYSE Arca Rule 1.1(yy) for the definition of ``User.''
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Primary Until 9:45 Order
    The Exchange proposes to add a new order type called the Primary 
Until 9:45 Order. The Primary Until 9:45 Order will permit NYSE Arca 
Users to submit an order that will be routed directly to the primary 
listing market until 9:45 a.m. (Eastern Time).\4\ If the order is not 
executed on the primary market by 9:45 a.m. (Eastern Time), the order 
will be cancelled from the primary market and a new order will be 
entered on the Arca Book for execution during the remainder of the 
Exchange's Core Trading Session.\5\ The Primary Until 9:45 Order may be 
marked with a Time in Force of Day, Good Till Cancelled (``GTC''), or 
Good Till Date (``GTD''). Orders that return to NYSE Arca after routing 
to the primary market will retain their original order attributes. 
Orders that return to the Arca Book at 9:45 will

[[Page 33490]]

be treated as a new order and receive a new time priority.
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    \4\ The PO+ order was recently approved as Rule 7.31(x)(3). See 
Securities and Exchange Act Release No. 58681 (September 29, 2008); 
73 FR 58285 (October 6, 2008) (order approving SR-NYSEArca-2008-90).
    \5\ See NYSE Arca Rule 7.34(a)(2) for the definition of ``Core 
Trading Session.''
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    Currently, NYSE Arca Users can only accomplish this proposed 
functionality through the submission of two separate order types. 
First, the User would direct an order to the primary market without 
first sweeping the NYSE Arca Book by submitting a Primary Only (PO) or 
Primary Only Plus (PO+) Order.\6\ \7\ Then at 9:45 the User 
would cancel the PO or PO+ Order and submit an order to the Exchange. 
The Primary Until 9:45 Order will operate in a manner similar to a 
combination of a PO+ Order and an order that is executable on the 
Exchange. The Primary Until 9:45 Order simplifies this functionality 
into one new order type.
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    \6\ A PO Order will only participate in the primary market 
opening or re-opening. A PO+ Order will participate at any time 
other than the primary market opening or re-opening.
    \7\ PO+ Orders are routed to the primary market via the 
Exchange's outbound routing facility, Archipelago Securities, LLC 
(``Arca Securities''), a registered broker dealer. Arca Securities 
is an affiliated member of the NYSE, NYSE Arca, and NYSE Amex, LLC. 
As a result, each of these three exchanges have established certain 
mechanisms designed to address potential conflicts of interest 
regarding affiliated members generally, and Arca Securities in 
particular. See Securities and Exchange Act Release No. 58680 
(September 29, 2008), 73 FR 58283 (October 6, 2008) (order approving 
SR-NYSE-2008-76); see also, Securities Exchange Act Release No. 
58681 (September 29, 2008), 73 FR 58285 (October 6, 2008) (order 
approving NYSEArca-2008-90); see also, Securities Exchange Act 
Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) 
(order approving SR-AMEX-2008-62).
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Primary After 3:45 Order
    Similarly, the Exchange proposes to add a new order type called the 
Primary After 3:45 Order. The Primary After 3:45 Order will permit 
Exchange Users to submit an order that will remain on the Arca Book 
until 3:45 p.m. (Eastern Time). If the order is not executed by 3:45 
p.m. (Eastern Time) the order will be cancelled from the Arca Book and 
entered for execution on the primary market for the remainder of the 
trading session. The Primary After 3:45 Order may only be marked with a 
Time in Force of Day, and may not be marked as GTC or GTD. Orders that 
route to the primary market at 3:45 will retain their original order 
attributes.
    Currently, NYSE Arca Users can only accomplish this proposed 
functionality through the submission of two separate order types. First 
a User would submit an order for execution on the Exchange. Then, at 
3:45 the User would cancel the order resting in the Arca Book and 
submit a PO or PO+ Order for execution on the primary market. The 
Primary After 3:45 Order type will operate in a manner similar to a 
combination of two existing order types, but simplifies this compound 
functionality into one new order type.
    The proposed order types provide Users the ability to participate 
on the primary listing market during the two most active periods of the 
trading day, the fifteen minutes following the open and prior to the 
close. For the remainder of the trading day, the two new order types 
offer Users access to the Exchange's liquidity.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \8\ of the 
Securities Exchange Act of 1934 (the ``Exchange Act''), in general, and 
furthers the objectives of Section 6(b)(5) \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. The Exchange believes that the proposed rule changes 
are designed to accomplish these ends by providing Users the ability to 
participate on the primary listing market during the most active 
periods of the trading day.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) by its terms, does not 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 \10\ and Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing.\12\ 
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay to allow market 
participants on NYSE Arca increased flexibility to participate on the 
primary listing exchange during the 15 minutes following the open and 
prior to the close. In addition, the waiver of the operative delay 
would allow the proposal to become operative on the date of approval of 
SR-NYSE-2009-58. The Commission believes such waiver is consistent with 
the protection of investors and the public interest.\14\ Accordingly, 
the Commission designates the proposed rule change operative on July 7, 
2009.\15\
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    \12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
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 Exchange has complied with this requirement.
    \13\ Id.
    \14\ 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).
    \15\ Securities Exchange Act Release No. 60255 (July 7, 2009) 
(SR-NYSE-2009-58).
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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

[[Page 33491]]

Number SR-NYSEArca-2009-56 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-NYSEArca-2009-56. 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-NYSEArca-2009-56 and should be submitted on or before 
August 3, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
 [FR Doc. E9-16579 Filed 7-10-09; 8:45 am]

BILLING CODE 8010-01-P