Document ID: SEC-2012-0038-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2012-01-10T05:00Z

[Federal Register Volume 77, Number 6 (Tuesday, January 10, 2012)]
[Notices]
[Pages 1545-1546]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-181]

[[Page 1545]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66094; File No. SR-NYSEARCA-2011-103]

Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Extending the 
Implementation Date of the NYSE Arca Equities Rule 7400 Series, the 
Order Audit Trail System Rules, for Equity Trading Permit Holders That 
Are Not Financial Industry Regulatory Authority Members to March 31, 
2012

January 4, 2012.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given 
that, on December 30, 2011, NYSE Arca, Inc. (``Exchange'' or ``NYSE 
Arca'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I, II, 
and III 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\ 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 extend the implementation date of the NYSE 
Arca Equities Rule 7400 Series, the Order Audit Trail System (``OATS'') 
Rules, for Equity Trading Permit (``ETP'') Holders that are not 
Financial Industry Regulatory Authority (``FINRA'') members from 
January 31, 2012 to March 31, 2012. The text of the proposed rule 
change is available at the Exchange, the Commission's Public Reference 
Room, and 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 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to extend the implementation date of the OATS 
Rules for ETP Holders that are not FINRA members from January 31, 2012 
to March 31, 2012.
    On October 12, 2011, NYSE Arca adopted the OATS Rules for ETP 
Holders that are dual members of NYSE Arca and FINRA (``Dual Members'') 
and ETP Holders that are not FINRA members (i.e., NYSE Arca proprietary 
firms) with implementation beginning on October 17, 2011 for Dual 
Members and on January 31, 2012 for non-FINRA members.\4\ Since that 
time, the Exchange has been advised by certain NYSE Arca proprietary 
firms that meeting the OATS record-keeping obligations requires 
significant technology resources. In particular, although it is an NYSE 
Arca Equities rule, it governs record-keeping for all National Market 
System (``NMS'') stocks that these firms trade, regardless of the 
venue. While these NYSE Arca proprietary firms have been working toward 
completing the technology changes required by the NYSE Arca OATS Rules, 
these firms have had, and continue to have, several competing 
regulatory technology changes to make, including complying with the 
Commission's large trader reporting requirements,\5\ and until November 
30, 2011, meeting the Commission's market access rule technology 
requirements.\6\
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    \4\ See Securities Exchange Act Release No. 65544 (October 12, 
2011), 76 FR 64406 (October 18, 2011) (SR-NYSEArca-2011-69).
    \5\ 17 CFR 240.13h-1.
    \6\ 17 CFR 240.15c3-5.
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    Because these are NYSE Arca proprietary firms, the regulatory risk 
of extending the time to comply is low in that the extension should not 
impact any surveillances or reviews relating to customer trading. In 
addition, because the rules impose record-keeping requirements, 
extending the compliance date should not impact any ongoing FINRA 
surveillances. Finally, for these NYSE Arca proprietary firms, they 
already maintain records required by the rules in other formats, as 
required by Rules 17a-3 and 17a-4 under the Securities Exchange Act of 
1934 (the ``Exchange Act'').
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Exchange Act,\7\ in general, and furthers the objectives of Section 
6(b)(5),\8\ in particular, 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, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. Specifically, the Exchange 
believes that extending the implementation date of the OATS Rules for 
NYSE Arca proprietary firms will ensure that these firms have 
sufficient time to make the necessary changes to their systems to be 
able to comply with the new OATS recording and reporting requirements.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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 and Rule 19b-
4(f)(6)(iii) thereunder.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission 
may designate a shorter

[[Page 1546]]

time if such action is consistent with the protection of investors and 
the public interest.
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    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend 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 email to rule-comments@sec.gov. Please include 
File Number SR-NYSEARCA-2011-103 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-2011-103. This 
file number should be included on the subject line if email 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 Section, 100 F Street, 
NE., Washington, DC 20549-1090 on official business days between the 
hours of 10 a.m. and 3 p.m. Copies of such filing will also 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-2011-103 and should be submitted on or before January 31, 
2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-181 Filed 1-9-12; 8:45 am]
BILLING CODE 8011-01-P