Document ID: SEC-2009-0310-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Alternext US LLC
Posted Date: 2009-03-09T04:00Z

[Federal Register: March 9, 2009 (Volume 74, Number 44)]
[Notices]               
[Page 10109-10111]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr09mr09-94]                         

[[Page 10109]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59480; File No. SR-NYSEALTR-2009-21]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Alternext US LLC Adopting 
New Rule 6A--NYSE Alternext Equities and Amending Existing Rule 36--
NYSE Alternext Equities Concerning the Use of Personal Portable or 
Wireless Communication Devices and the Use or Possession of Wireless 
Trading Devices On and Off the Exchange Trading Floor

March 2, 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 2, 2009, NYSE Alternext US LLC (``NYSE Alternext'' 
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 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\ 15 U.S.C. 78a.
    \3\ 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 adopt new Rule 6A--NYSE Alternext Equities 
(``Trading Floor'') and amend existing Rule 36--NYSE Alternext Equities 
(Communications Between Exchange and Members' Offices) concerning (i) 
the use of personal portable or wireless communication devices, and 
(ii) the use or possession of wireless trading devices on and off the 
Exchange Trading Floor.

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 purpose of the proposed rule changes is to adopt new Rule 6A--
NYSE Alternext Equities (``Trading Floor'') and amend existing Rule 
36--NYSE Alternext Equities (Communications Between Exchange and 
Members' Offices) concerning (i) the use of personal portable or 
wireless communication devices, and (ii) the use or possession of 
wireless trading devices on and off the Exchange Trading Floor.
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 
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'').\6\ Similarly, effective March 2, 2009, the Exchange will 
relocate all options trading conducted on the 86 Trinity Trading 
Systems to trading systems and facilities located at 11 Wall Street 
(the ``Options Relocation'').\7\
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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).
    \7\ See Securities Exchange Act Release No. 59142 (December 22, 
2008), 73 FR 80494 (December 31, 2008) (SR-NYSEALTR-2008-14) (notice 
of filing for Options Relocation), as amended.
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    Upon the Options Relocation, the Exchange's Options and Equities 
Trading Floors will be located in physically separate, adjacent rooms 
within the 11 Wall Street building. Access to the Trading Floors is 
restricted at each entrance by turnstiles and only authorized visitors, 
members or member firm employees are permitted to enter. Both Trading 
Floors will be managed and overseen by employees of the Exchange's 
corporate parent, NYSE Euronext.
Proposed Rule Changes
    In order to accommodate the Options Relocation and the presence of 
the Exchange's Options Trading Floor adjacent to the Exchange's 
Equities Trading Floor, the Exchange proposes the following rule 
changes.
1. New Rule 6A--NYSE Alternext Equities (``Trading Floor'')
    Under Rule 6--NYSE Alternext Equities, the term ``Floor'' is 
defined as having the meaning provided the term under the Act and the 
related rules and regulations.\8\ In addition, the Exchange has issued 
interpretive guidance that the ``Floor'' also includes the areas 
outside the ``Blue Line'' (member and member organization booths 
adjacent to the trading Floor) and ``any area reserved primarily for 
members, including the members'' lounges and the members' bathrooms.'' 
\9\
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    \8\ Pursuant to the definitions of ``Floor'' in Rule 6--NYSE 
Alternext Equities and NYSE Rule 6, the NYSE and NYSE Alternext 
Equities Trading Floors overlap and thus references in the proposed 
rule text as well as in the 19b-4 to ``Equities Trading Floor'' by 
default include the NYSE Trading Floor. The NYSE has proposed 
corresponding rule changes for its members and member organizations. 
See SR-NYSE-2009-23 (formally submitted March 2, 2009).
    \9\ See NYSE/NYSE Alternext Information Memo 08-66 (December 22, 
2008).
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    The current definition of ``Floor'' under Rule 6--NYSE Alternext 
Equities would, upon the Options Relocation, include the Exchange's 
Options Trading Floor. This could lead to confusion under Exchange 
Rules when discussing the ``Floor'' and the ``Trading Floor''. The 
Exchange therefore proposes to adopt a new Rule 6A--NYSE Alternext 
Equities to define the term ``Trading Floor'' to make it clear that, 
within the area of the ``Floor'' of the Exchange as technically defined 
by Rule 6, there are distinct, restricted-access areas where equities 
trading is conducted by the Exchange on the one hand and options 
trading on the other. Under the new proposed Rule 6A--NYSE Alternext 
Equities, the term ``Trading Floor'' means the restricted-access 
physical areas designated by the Exchange for the trading of equities 
securities, commonly known as the ``Main Room'' and the ``Garage.'' The 
Exchange's Trading Floor does not include the areas where NYSE 
Alternext-listed options are traded, commonly known as the ``Blue 
Room'' and the ``Extended Blue Room''. For the

[[Page 10110]]

purposes of the Exchange's Equities Rules, as well as this filing, 
these areas will be referred to as the ``NYSE Alternext Options Trading 
Floor''.
    By adopting this new Rule, the Exchange seeks to prevent any 
confusion that may arise under Exchange Rules and to provide a more 
accurate description of the physical areas of the Floor where different 
types of trading are actually conducted. In addition, as described 
below, this new Rule would also make it easier for the Exchange to 
define areas where certain conduct is or is not permitted by its 
members and member firm employees.
2. Use of Personal Portable or Wireless Communication Devices
    Rule 36--NYSE Alternext Equities currently prohibits, without prior 
Exchange approval, members and member organizations from establishing 
or maintaining any telephonic or electronic communication, including 
the usage of any portable or wireless communication devices (i.e. 
cellular phone, wireless pager, BlackBerry TM, etc.), 
between the Floor and any other location. Under the Rule, Floor brokers 
may use Exchange authorized and issued portable phones on the Floor, 
subject to certain restrictions (see Rules 36.20--.21--NYSE Alternext 
Equities).\10\ Designated Market Makers (DMMs) may not use any portable 
or wireless communication devices on the Floor although they may, 
subject to restriction, maintain at their posts telephone lines and 
wired or wireless devices that are registered with the Exchange (see 
Rule 36.30--NYSE Alternext Equities). The use of all other portable or 
wireless communication devices on the Floor is prohibited.
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    \10\ All members and member firm employees who use an authorized 
portable phone must execute a written acknowledgement as to the 
usage of the phone and authorizing the Exchange to receive data and 
records related to incoming and outgoing calls. See NYSE Information 
Memos 08-40 (August 14, 2008) and 08-41 (August 14, 2008) 
(concerning the use of Exchange authorized and issued portable 
phones on the Floor, incorporated by reference in joint NYSE/NYSE 
Alternext Information Memo 08-66).
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    Although it would be prohibited under the current framework of Rule 
36--NYSE Alternext Equities, to eliminate any potential confusion 
arising from the Options Relocation, the Exchange proposes to include a 
provision in Rule 36.23--NYSE Alternext Equities that expressly 
prohibits members and member firm employees from using personal 
portable or wireless communications devices on the NYSE Alternext 
Options Trading Floor. However, those members and employees of member 
organizations that are also registered to trade options on the Exchange 
will be permitted to use personal portable or wireless communications 
devices while on the Exchange's Options Trading Floor in accordance 
with applicable Exchange Options rules and regulations, including Rule 
220.
    The Exchange also proposes corresponding amendments to Rules 
36.20--[sic] and .21--NYSE Alternext Equities to provide that Floor 
brokers may not use an Exchange authorized and provided portable phone 
used to trade equities while on the Exchange Options Trading Floor, and 
including other technical changes.
3. Use or Possession of Wireless Trading Devices
    Currently, Exchange members and member firm employees are permitted 
to use their Exchange approved handheld trading devices throughout the 
Trading Floor of the Exchange.\11\ Subject to certain exceptions, 
pursuant to Rules 70-- and 117--NYSE Alternext Equities Floor brokers 
are required to either cancel or transfer to another Floor broker their 
agency interest files if they leave the Crowd (as defined under Rule 
70.30--NYSE Alternext Equities), and, unless transferred, any open 
orders will not be represented while the Floor broker is away from the 
Crowd.\12\
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    \11\ The Exchange's Wireless Communications Plan governing the 
use of wireless handheld trading devices on the Equities Trading 
Floor is the same as the NYSE's, which was previously approved by 
the Commission. See Securities Exchange Act Release No. 36156 
(August 25, 1995), 60 FR 45756 (September 1, 1995) (SR-NYSE-1995-22) 
and Securities Exchange Act Release No. 39379 (December 1, 1997), 62 
FR 64615 (December 8, 1997) (SR-NYSE-1997-17).
    \12\ Rule 70.30--NYSE Alternext Equities defines the ``Crowd'' 
as ``[t]he rooms on the Exchange Floor that contain active posts/
panels where Floor brokers are able to conduct business[.]'' This 
is, essentially, the ``Trading Floor'' as defined in proposed Rule 
6A--NYSE Alternext Equities.
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    Upon the Options Relocation, the Exchange's Options Trading Floor 
will be adjacent to the Exchange's Equities Trading Floor. Thus, in 
order to address concerns regarding improper information sharing 
between the Exchange's Equities and Options Trading Floors, the 
Exchange proposes to adopt Rule 36.70--NYSE Alternext Equities to 
prohibit Exchange members and member firm employees from (i) using or 
possessing any wireless trading device that may be used to view or 
enter orders into the Exchange's Equities trading systems while on the 
Exchange's Options Trading Floor, and (ii) using or possessing any 
wireless trading device that may be used to view or enter orders into 
the Exchange's Options trading systems while on the Exchange's Equities 
Trading Floor. These prohibitions would apply to any and all wireless 
trading devices, including devices issued by the Exchange or NYSE, as 
well as devices that are proprietary to a member, member organization 
or other entity.\13\
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    \13\ Proposed Rule 36.70--NYSE Alternext Equities is based on 
the Exchange's proposed Options Rules 902(g) and (h). See Securities 
Exchange Act Release No. 59142 (December 22, 2008), 73 FR 80494 
(December 31, 2008) (SR-NYSEALTR-2008-14), as amended.
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    These proposed amendments would not change the current regulatory 
framework within which members and member firm employees may use their 
wireless trading devices. Members and member firm employees would still 
be limited to using Exchange approved wireless trading devices and 
would still be required to cancel or transfer their agency interest 
files in accordance with Rules 70-- and 117--NYSE Alternext Equities if 
they leave the Crowd/Equities Trading Floor.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with, and further the objectives of, Section 6(b)(5) of the Securities 
Exchange Act of 1934 \14\ (the ``Act''), in that they are 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 
proposed rule changes also support the principles of Section 11A(a)(1) 
\15\ of the Act in that they seek to ensure the economically efficient 
execution of securities transactions and fair competition among brokers 
and dealers and among exchange markets.
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    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 78k-1(a)(1).
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    The Exchange believes that the proposed rule changes will permit 
the Exchange's Equities permit holders and Options permit holders to, 
within the existing regulatory framework at the Exchange, efficiently 
and effectively conduct business on the respective Equities and Options 
Trading Floors and engage in personal communications while off the 
Trading Floors consistent with maintaining necessary regulatory 
distinctions between the two. Moreover, the proposed rule changes will 
impose restrictions designed to prevent inappropriate information 
sharing by and between members and member firm employees on the Trading 
Floors of the Exchange and its affiliate NYSE.

[[Page 10111]]

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 has become effective pursuant to Section 
19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(6) thereunder \17\ 
because the foregoing proposed rule: (1) Does not significantly affect 
the protection of investors or the public interest; (2) does not impose 
any significant burden on competition; and (3) does not become 
operative for 30 days after the date of filing, or such shorter time as 
the Commission may designate if consistent with the protection of 
investors and the public interest.\18\ The Exchange believes that this 
filing is non-controversial because it is consistent with its filing 
implementing the Options Relocation,\19\ as well as the Exchange's 
current regulatory controls governing the use of personal portable or 
wireless communications devices and wireless trading devices, which 
were approved by the Commission. Accordingly, the Exchange believes 
that these rule changes are eligible for immediately effective 
treatment under the Commission's Streamlining Order.\20\
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ In addition, Rule 19b-4(f)(6)(iii) requires the self-
regulatory organization to give the Commission 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. NYSE Alternext has satisfied 
this requirement.
    \19\ See Securities Exchange Act Release No. 59142 (December 22, 
2008), 73 FR 80494 (December 31, 2008) (SR-NYSEALTR-2008-14), as 
amended.
    \20\ See Securities Exchange Act Release No. 58092 (July 3, 
2008), 73 FR 40143 [sic] (July 11, 2008) (concerning 17 CFR parts 
200 and 241).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay and designate the proposed rule change as operative upon filing 
so that the proposed rule changes may become effective upon filing and 
operative on the date of the Options Relocation, currently scheduled 
for March 2, 2009. The Commission hereby grants the Exchange's 
request.\21\ The Commission believes that such action is consistent 
with the protection of investors and the public interest because the 
Exchange's proposal would clarify the Exchange's policies governing the 
use of personal portable or wireless communication devices as well as 
wireless trading devices. This clarification is necessitated by the 
Options Relocation.
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    \21\ For purposes only of waiving the operative delay for 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-NYSEALTR-2009-21 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSEALTR-2009-21. 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 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 publicly available. All 
submissions should refer to File Number SR-NYSEALTR-2009-21 and should 
be submitted on or before March 30, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-4872 Filed 3-6-09; 8:45 am]

BILLING CODE 8011-01-P