Document ID: SEC-2010-0604-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2010-04-22T04:00Z

[Federal Register: April 22, 2010 (Volume 75, Number 77)]
[Notices]               
[Page 21071-21072]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22ap10-126]                         

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61923; File No. SR-NYSE-2010-33]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend From May 30, 2010 Until June 30, 2010 the Final Date by Which 
the Exchange Must Terminate Its Affiliation With NYFIX Securities 
Corporation

April 15, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on April 14, 2010, 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 substantially 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\ 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 from May 30, 2010 until June 30, 
2010 the final date by which it must terminate its affiliation with 
NYFIX Securities Corporation (``NYFIX Securities''), a registered 
broker-dealer subsidiary of NYFIX, Inc., (``NYFIX''). On November 30, 
2009, NYFIX became an indirect wholly-owned subsidiary of the 
Exchange's parent company, NYSE Euronext. There is no proposed rule 
text.

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
    On November 9, 2009, the Commission approved a proposed rule change 
by the Exchange in connection with the acquisition of NYFIX, a Delaware 
corporation, by a wholly-owned subsidiary of NYSE Euronext, the 
Exchange's parent company. The Commission's approving release granted 
permission for the Exchange to be affiliated with two registered 
broker-dealer subsidiaries of NYFIX for a period not to exceed six 
months and subject to certain limitations and obligations.\3\ The two 
subsidiaries were NYFIX Millennium L.L.C. (``NYFIX Millennium'') and 
NYFIX Securities Corporation (``NYFIX Securities''). The NYFIX 
acquisition closed on November 30, 2009, marking the beginning of the 
Exchange's affiliation with NYFIX Millennium and NYFIX Securities, 
which means that the final date by which the Exchange must terminate 
its affiliation with these two broker-dealers is May 30, 2010.
---------------------------------------------------------------------------

    \3\ Securities Exchange Act Release No. 60969 (November 9, 
2009), 74 FR 59294 (November 17, 2009) (order approving File No. SR-
NYSE-2009-96, as modified by Amendment No. 2 thereto) (``NYFIX 
Approval Order'').
---------------------------------------------------------------------------

    The Exchange has already terminated its affiliation with NYFIX 
Millennium and is in the process of terminating its affiliation with 
NYFIX Securities. While the Exchange anticipates that the transaction 
by which its affiliation with NYFIX Securities will be terminated 
should close by May 30, the Exchange believes that some additional 
flexibility with respect to timing is desirable in the event that 
issues unexpectedly arise in connection with the aforementioned 
transaction. Consequently, the Exchange is proposing a short extension 
of the date by which it must end its affiliation with NYFIX Securities 
from May 30, 2010 to June 30, 2010. The Exchange believes that this 
one-month extension will allow sufficient time to deal with any 
unexpected delays that might occur in connection with the transaction 
that is expected to terminate the Exchange's affiliation with NYFIX 
Securities.
    In the NYFIX Approval Order, as a requirement for its approval of 
the Exchange's temporary affiliation with NYFIX Millennium and NYFIX 
Securities, the Commission listed a series of terms and conditions that 
must be adhered to during the period of said affiliation.\4\ The 
purpose of these terms and conditions is to ``address concerns 
regarding * * * (1) The potential for conflicts of interest where an 
exchange is affiliated with a broker-dealer conducting an order routing 
business that may interact with the Exchange itself, and (2) the 
potential for informational advantages that could place such an 
affiliated broker-dealer at a competitive advantage in comparison with 
other non-affiliated broker-dealers.'' \5\ The Exchange represents that 
all of these terms and conditions will continue to be applicable with 
respect to NYFIX Securities during the extension period being proposed 
herein until such time as the Exchange's affiliation with NYFIX 
Securities is terminated.
---------------------------------------------------------------------------

    \4\ See NYFIX Approval Order, 74 FR at 59295-59296 (paragraphs 
numbered (1)-(6), including subparagraphs (a)-(f) thereunder).
    \5\ Id. at 59295.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) \6\ of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(1) \8\ of the Act, in particular, in that it 
enables the Exchange to be so organized as to have the capacity to 
carry out the purposes of the Act and to comply, and to enforce 
compliance by its members and persons associated with its members, with 
the provisions of the Act, the rules and regulations thereunder, and 
the rules of the Exchange. The Exchange also believes that this 
proposed rule change is also consistent with, and furthers the 
objectives of Section 6(b)(5) \9\ of the Act, in that it is designed to 
prevent fraudulent and manipulative acts and practices, to promote just 
and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanisms of a 
free and open

[[Page 21072]]

market and a national market system and, in general, to protect 
investors and the public interest.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78a.
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    In the NYFIX Approval Order, the Commission determined that the 
proposed temporary affiliation between the Exchange and the two NYFIX 
broker-dealer subsidiaries, subject to the terms and conditions 
described above, was consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange and, in particular, was consistent with Section 
6(b)(5) of the Act.\10\ With respect to the Commission's expressed 
concerns regarding potential unfair competition and conflicts of 
interest when an exchange, or one of its affiliates, is the parent 
company of a broker-dealer that provides routing services that may be 
in competition with services provided by members of that exchange, the 
NYFIX Approval Order stated, ``The Commission believes, however, that 
the temporary nature of the affiliation, together with the proposed 
terms and conditions, are reasonably designed to mitigate concern about 
potential unfair competition and conflicts of interest between the 
commercial interests of the Exchange or its affiliates, and the 
Exchange's regulatory responsibilities.'' \11\ Because these same terms 
and conditions will continue to be applicable during the proposed 
extension period, and because that extension period, if it is utilized, 
will be limited to only one additional month, the Exchange believes 
that the current temporary affiliation between the Exchange and NYFIX 
Securities will continue to be consistent with the Act during the 
proposed extension period.
---------------------------------------------------------------------------

    \10\ See NYFIX Approval Order, 74 FR at 59295.
    \11\ Id. at 59296.
---------------------------------------------------------------------------

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 \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
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) by its terms, 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) \14\ of the 
Act and Rule 19b-4(f)(6)(iii) thereunder.\15\
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) 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. The Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
---------------------------------------------------------------------------

    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

    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-NYSE-2010-33 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-2010-33. 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 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-
NYSE-2010-33 and should be submitted on or before May 13, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\18\
---------------------------------------------------------------------------

    \18\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-9280 Filed 4-21-10; 8:45 am]
BILLING CODE 8011-01-P