Document ID: SEC-2007-0185-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-02-07T05:00Z

[Federal Register: February 7, 2007 (Volume 72, Number 25)]
[Notices]               
[Page 5777-5778]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07fe07-160]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55210; File No. SR-NYSE-2007-08]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Adopt New Rule 15B(T) Relating to Intermarket Sweep Orders

January 31, 2007.
    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 January 26, 2007, the New York Stock Exchange LLC 
(``NYSE'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I and II, which Items have been substantially prepared by the 
Exchange. NYSE has designated the proposed rule change as constituting 
a ``non-controversial'' rule change under Section 19(b)(3)(A) of the 
Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which renders the proposal 
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 is proposing to adopt NYSE Rule 15B(T), a temporary 
rule which describes the obligations of Exchange member organizations 
when sending Intermarket Sweep Orders (``ISOs'') to the Exchange prior 
to the Trading Phase Date of Regulation NMS (``Reg. NMS''). The text of 
the proposed rule change is available at NYSE, the Commission's Public 
Reference Room, and http://www.nyse.com.

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. 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
    As part of its rollout of the Hybrid Market,\SM\ the Exchange is 
set to begin implementation of Phase IV, which includes changes 
necessary for NYSE's compliance with Reg. NMS. Specifically, the Phase 
IV software will include the acceptance of ISOs and non-routing 
immediate-or-cancel orders (``Reg. NMS IOCs''), auto-routing to 100-
share quotations, and implementation of new locking and crossing rules 
approved by the Commission. The Phase IV rollout will occur in a 
controlled manner through the Trading Phase Date, March 5, 2007.\6\ 
Following an initial successful period of trading, the Exchange will 
deploy the Phase IV software on an accelerated basis, providing notice 
to members and member organizations of the timing for each group of 
securities migrating to Phase IV.
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    \6\ See Securities Exchange Act Release No. 55160 (January 24, 
2007), available at http://www.sec.gov/rules/final/2007/34-55160.pdf 

(extending the Trading Phase Date until March 5, 2007).
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    The Exchange seeks to amend its rules to require member 
organizations that send ISOs to the Exchange prior to the Trading Phase 
Date of Reg. NMS to simultaneously send an ISO (or comparable order) 
for the full displayed size of the top of the book of every other ITS 
participant displaying a better-priced quotation. This temporary rule 
is intended to mirror the requirement, which will be operative after 
the Trading Phase Date, that all incoming ISOs meet the requirements as 
described in Rule 600(b)(30) of Reg. NMS,\7\ and is designed to ensure 
that member organizations honor better-priced quotes of other ITS 
participants when submitting ISOs to the Exchange prior to the Trading 
Phase Date.\8\ The NYSE expects that this temporary rule will be in 
effect only until the Trading Phase Date, at which time it will be 
deleted from its rulebook.
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    \7\ 17 CFR 242.600(b)(30).
    \8\ See Telephone call between Craig Hammond, Managing Director, 
NYSE, and Richard Holley III, Special Counsel, Division of Market 
Regulation, Commission, dated January 29, 2007.

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[[Page 5778]]

    In addition, the NYSE notes that it has requested an exemption from 
certain provisions of the Intermarket Trading System Plan and NYSE Rule 
15A to allow the NYSE to implement the Reg. NMS Compliance aspects of 
the Phase IV rollout prior to the Trading Phase Date.\9\
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    \9\ See Letter from Mary Yeager, Assistant Secretary, NYSE, to 
Nancy M. Morris, Secretary, Commission, dated January 26, 2007.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirement under Section 6(b)(5) of the Act \10\ 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 national market system, and, in general, 
to protect investors and the public interest.
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    \10\ 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

    The Exchange has neither solicited nor received written comments on 
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 \11\ and Rule 19b-4(f)(6) thereunder \12\ 
because the proposal 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.\13\ NYSE has requested that the Commission waive the 30-day 
operative delay and designate the proposed rule change effective 
immediately. The Commission hereby grants the request.\14\ The 
Commission believes that such waiver is consistent with the protection 
of investors and the public interest because immediate effectiveness of 
the proposed rule change will assist the Exchange in its efforts to 
ensure that its member organizations honor better-priced quotations of 
other ITS participants when they send ISOs to the Exchange for 
execution.
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ Rule 19b-4(f)(6)(iii) under the Act requires that a self-
regulatory organization 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. NYSE 
has satisfied the pre-filing requirement.
    \14\ For purposes only of waiving the 30-day operative delay of 
the 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.\15\
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    \15\ See 15 U.S.C. 78s(b)(3)(C).
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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-2007-08 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2007-08. 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. Copies of the 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-NYSE-2007-08 and should be submitted on or before February 28, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1942 Filed 2-6-07; 8:45 am]

BILLING CODE 8010-01-P