Document ID: SEC-2010-0858-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2010-06-15T04:00Z

[Federal Register: June 15, 2010 (Volume 75, Number 114)]
[Notices]               
[Page 33868-33869]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jn10-125]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62247; File No. SR-NYSEArca-2010-43]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending Rule 
5.2(b)(1)

June 9, 2010.
    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 May 21, 2010, 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, II, 
and III below, which Items have substantially been prepared by NYSE 
Arca. The Exchange 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 proposes to amend Rule 5.2(b)(1)--Notification 
Requirements for Offering of Securities to clarify its applicability. A 
copy of this filing is available on the Exchange's Web site at http://
www.nyse.com, at the Exchange's principal office, on the Commission's 
Web site at http://www.sec.gov, 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, NYSE Arca 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of this filing is to clarify the applicability of Rule 
5.2(b)(1)--Notification Requirements for Offering of Securities. 
Specifically, the Exchange proposes to amend Rule 5.2(b)(1) in order to 
make clear that an Equity Trading Permit (``ETP'') Holder, acting as 
the lead underwriter for any offering in a security listed on any 
national securities exchange, is obligated to notify the Exchange of 
the offering, regardless of where the offering is listed. In its 
current form, Rule 5.2(b)(1) requires ETP Holders to notify the 
Exchange of ``any'' offering when acting as the lead underwriter. 
Therefore, the current rule language can be construed to require that 
ETP Holders notify the Exchange of all offerings in such circumstances, 
including offerings of securities listed on national securities 
exchanges other than NYSE Arca. However, the purpose section of the 
November 2004 19b-4 rule filing that created Rule 5.2(b)(1) states that 
``Rule 5.2(b)(1) would require an [ETP Holder] that participates in any 
offering of securities listed on the Exchange to submit certain 
information to PCXE regarding the offering (emphasis added).'' \6\ For 
the following reasons, the Exchange proposes to add language to Rule 
5.2(b)(1) in order to make clear that ETP Holders who act as lead 
underwriters in offerings of securities listed on NYSE Arca or any 
other national securities exchange must notify the Exchange of such 
offerings. First, the language in the November 2004 19b-4 unnecessarily 
limits the scope of Rule 5.2(b)(1) to offerings of securities listed on 
NYSE Arca. Second, the Exchange regularly receives notices from ETP 
Holders of offerings of securities listed on national securities 
exchanges other than NYSE Arca and regularly investigates potential 
Regulation M violations in connection with such offerings. Finally, the 
Exchange depends on ETP Holders to notify it of offerings of securities 
listed on NYSE Arca and other national securities exchanges in order to 
effectively surveil for and investigate potential violations of 
Regulation M in connection with such offerings.\7\
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    \6\ Exchange Act Release No. 34-50662 (November 15, 2004), 69 FR 
67770 (November 19, 2004) (File No. SR-PCX-2004-102).
    \7\ The Exchange cannot investigate offerings of securities that 
are not listed on a national securities exchange because the 
Exchange's jurisdictional purview does not cover trading activity in 
such securities.
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    The proposed amendment to Rule 5.2(b)(1) codifies the Exchange's 
previously published interpretation of Rule 5.2(b)(1),\8\ and the 
Exchange's practice of requiring that ETP Holders who act as lead 
underwriters in any offering in a security listed on any national 
securities exchange notify the Exchange of such offering. The Exchange 
is not otherwise altering the rights or obligations of ETP Holders.
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    \8\ See Exchange Regulatory Information Bulletin RBE 07-04 (May 
31, 2007).
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\9\ in general, and furthers the objectives of Section 
6(b)(5) of the Act,\10\ 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

[[Page 33869]]

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.
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    \9\ 15 U.S.C. 78f(b).
    \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

    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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act,\11\ and Rule 19b-4(f)(6) thereunder.\12\ 
Because the proposed rule change does not: (i) Significantly affect the 
protection of investors or the public interest, (ii) impose any 
significant burden on competition, and (iii) become operative prior to 
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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6)(iii) thereunder.\14\
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the Exchange to give the Commission written 
notice of the Exchange's 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. The Exchange has satisfied the pre-filing requirement.
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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-NYSEArca-2010-43 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-2010-43. 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 Web site 
viewing and printing 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 NYSE Arca's principal office 
and on its Internet Web site at http://www.nyse.com. 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-2010-43 and should 
be submitted on or before July 6, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-14359 Filed 6-14-10; 8:45 am]
BILLING CODE 8010-01-P