Document ID: SEC-2010-1188-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2010-08-05T04:00Z

[Federal Register: August 5, 2010 (Volume 75, Number 150)]
[Notices]               
[Page 47333-47335]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05au10-103]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-62599; File No. SR-NYSEAmex-2010-75]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC To Amend Certain 
of Its Rules in Connection With the Decommissioning of the Odd-Lot 
System

July 29, 2010.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 29, 2010, NYSE Amex LLC (the ``Exchange'' or ``NYSE 
Amex'') 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\ 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 amend certain of its NYSE Amex Equities 
Rule 500 Series to correspond with rule changes filed by the Exchange 
and approved by the Commission.\3\ The text of the proposed rule change 
is available at the Exchange's principal office, from the Commission's 
Public Reference Room, on the Commission's Web site at http://
www.sec.gov, and at http://www.nyse.com.
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    \3\ See Securities Exchange Act Release No. 62578 (July 27, 
2010) (order approving SR-NYSE-2010-43 and SR-NYSEAmex-2010-53).
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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.

[[Page 47334]]

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 change is to amend certain of the 
NYSE Amex Equities Rule 500 Series to correspond with rule changes 
filed by the Exchange and approved by the Commission.
a. Background
    On July 27, 2010, the Commission approved amendments to certain 
Exchange rules relating to the receipt and execution of odd-lot 
interest into the round-lot market and to decommission the use of the 
odd-lot system.\4\ The Exchange proposes to implement these changes on 
a stock-by-stock basis beginning on July 30, 2010.
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    \4\ See Securities Exchange Act Release No. 62578 (July 27, 
2010). The New York Stock Exchange LLC (``NYSE'') submitted, and 
received SEC approval of, a companion rule filing adopting trading-
in-shares. See id.
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    As approved, the Exchange will no longer trade odd-lot sized 
(generally, less than 100 shares) orders in a separate, dedicated 
system, but will trade them on the Display Book system, which the 
Exchange uses for round-lot sized orders. As part of these changes, the 
new unit of trading on the Exchange will be one share. However, quotes 
of less than one round-lot (generally, 100 shares) will not be 
displayed as the Exchange quotation and odd-lot sized transactions will 
not be published to the Consolidated Tape.
b. Proposed Amendments to Rules 501-, 506- and 508- NYSE Amex Equities
    In conjunction with the Exchange's decommissioning of its odd-lot 
system, the Exchange proposes conforming amendments to Rules 501-, 506- 
and 508- NYSE Amex Equities governing the trading of Nasdaq Securities.
    In Rule 501(a)--NYSE Amex Equities, the Exchange proposes to amend 
the definition of the term ``Closing Price'' to mean the last 
transaction in a Nasdaq Security on the Exchange reported to the 
Consolidated Tape. This change is necessary because, under the current 
Rule, a last transaction on the Exchange in a Nasdaq Security could be 
an odd-lot sized transaction, which would not be reported to the 
Consolidated Tape. The proposed change makes clear that only 
transactions reported to the Consolidated Tape would be considered for 
the Closing Price. In paragraph (e)(1) of Rule 501--NYSE Amex Equities, 
the Exchange further proposes to add language to conform the definition 
of a ``Stop Order'' for Nasdaq Securities with that for the Exchange's 
listed securities in accordance with Rule 13--NYSE Amex Equities.
    The Exchange proposes to amend Rule 506(a)--NYSE Amex Equities to 
conform with the approved changes to Rules 55- and 56- NYSE Amex 
Equities. Thus, the minimum unit of trading for Nasdaq Securities will 
be one share and Nasdaq Securities will be quoted in round-lots of 100 
shares, unless the UTP Listing Market determines otherwise, in which 
case the provisions of Rule 64--NYSE Amex Equities shall apply. 
Correspondingly, the Exchange further proposes to delete the provisions 
of Rule 506(b)(1)(A)- and (B)- NYSE Amex Equities related to odd-lots 
and partial round-lots, and the cross-reference to Rule 65--NYSE Amex 
Equities in paragraph (b)(3)(A) of Rule 506--NYSE Amex Equities.
    The Exchange further proposes to delete the provisions of Rule 
508(a)(1)(A)--NYSE Amex Equities. Because odd-lot sized orders will no 
longer trade on their own system, but will instead trade with all other 
interest in Display Book, odd-lot sized orders in Nasdaq Securities 
will not be accepted by the Exchange before trading opens and will be 
rejected by Exchange systems.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\6\ 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 
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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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule change supports the 
objectives of the Act by conforming, as needed, its rules governing the 
trading of Nasdaq Securities with the rules for trading its listed 
securities.

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 \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). 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 
Commission has waived the five-day pre-filing requirement in this 
case.
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiver of the operative 
delay is consistent with the protection of investors and the public 
interest because the proposal is substantially similar to another 
proposal that was approved by the Commission.\11\ In addition, waiver 
of the operative delay will allow the proposed rule changes to become 
operative before the existing odd-lot system is decommissioned on July 
30, 2010, and thus will ensure consistency between the rules governing 
trading of Nasdaq Securities and listed securities. Therefore, the 
Commission designates the proposal operative upon filing.\12\
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    \11\ See Securities Exchange Act Release No. 62578 (July 27, 
2010) (SR-NYSEAmex-2010-53).
    \12\ For purposes only of waiving the 30-day operative delay, 
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 the 60-day period beginning on the date of 
filing of the proposed rule change, the Commission summarily may 
temporarily suspend

[[Page 47335]]

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 e-mail to rule-comments@sec.gov. Please include File 
Number SR-NYSEAmex-2010-75 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-NYSEAmex-2010-75. 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 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-
NYSEAmex-2010-75 and should be submitted on or before August 26, 2010.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-19262 Filed 8-4-10; 8:45 am]
BILLING CODE 8010-01-P