Document ID: SEC-2009-0313-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: New York Stock Exchange LLC
Posted Date: 2009-03-10T04:00Z

[Federal Register: March 10, 2009 (Volume 74, Number 45)]
[Notices]               
[Page 10325-10328]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10mr09-113]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59479; File No. SR-NYSE-2009-23]

 
Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC 
Adopting New NYSE Rule 6A and Amending Existing NYSE Rule 36 Concerning 
the Use of Personal Portable or Wireless Communication Devices and the 
Use or Possession of Wireless Trading Devices On and Off the Exchange 
Trading Floor

March 2, 2009.
    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 March 2, 2009, 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 
and II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to

[[Page 10326]]

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 adopt new NYSE Rule 6A (``Trading Floor'') 
and amend existing NYSE Rule 36 (Communications Between Exchange and 
Members' Offices) concerning (i) the use of personal portable or 
wireless communication devices, and (ii) the use or possession of 
wireless trading devices on and off the Exchange Trading Floor.

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
    The purpose of the proposed rule changes is to adopt new NYSE Rule 
6A (``Trading Floor'') and amend existing NYSE Rule 36 (Communications 
Between Exchange and Members' Offices) concerning (i) the use of 
personal portable or wireless communication devices, and (ii) the use 
or possession of wireless trading devices on and off the Exchange 
Trading Floor.

Background

    As described more fully in a related rule filing,\4\ the Exchange's 
parent company, NYSE Euronext, acquired The Amex Membership Corporation 
(``AMC'') pursuant to an Agreement and Plan of Merger, dated January 
17, 2008 (the ``Merger''). In connection with the Merger, the American 
Stock Exchange LLC (``Amex''), a subsidiary of AMC, became a subsidiary 
of NYSE Euronext called NYSE Alternext U.S. LLC (``NYSE Alternext''), 
and continues to operate as a national securities exchange registered 
under Section 6 of the Act.\5\ The effective date of the Merger was 
October 1, 2008.
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    \4\ See Securities Exchange Act Release No. 58673 (September 29, 
2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60 and SR-Amex-
2008-62) (approving the Merger).
    \5\ 15 U.S.C. 78f.
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    In connection with the Merger, on December 1, 2008, NYSE Alternext 
relocated all equities trading conducted on the NYSE Alternext legacy 
trading systems and facilities located at 86 Trinity Place, New York, 
New York (the ``86 Trinity Trading Systems''), to trading systems and 
facilities located at 11 Wall Street, New York, New York (the 
``Equities Relocation'').\6\ Similarly, effective March 2, 2009, NYSE 
Alternext will relocate all options trading conducted on the 86 Trinity 
Trading Systems to trading systems and facilities located at 11 Wall 
Street (the ``Options Relocation'').\7\
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    \6\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63) (approving 
the Equities Relocation).
    \7\ See Securities Exchange Act Release No. 59142 (December 22, 
2008), 73 FR 80494 (December 31, 2008) (SR-NYSEALTR-2008-14) (notice 
of filing for Options Relocation), as amended.
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    Upon the Options Relocation, the NYSE Alternext Options Trading 
Floor and the Exchange's Trading Floor will be located in physically 
separate, adjacent rooms within the 11 Wall Street building. Access to 
the Trading Floors is restricted at each entrance by turnstiles and 
only authorized visitors, members or member firm employees are 
permitted to enter. Both Trading Floors will be managed and overseen by 
employees of the Exchange's and NYSE Alternext's corporate parent, NYSE 
Euronext.

Proposed Rule Changes

    In order to accommodate the Options Relocation and the presence of 
the NYSE Alternext Options Trading Floor adjacent to the Exchange's 
Trading Floor, the Exchange proposes the following rule changes.

1. New NYSE Rule 6A (``Trading Floor'')

    Under NYSE Rule 6, the term ``Floor'' is defined as ``the trading 
Floor of the Exchange and the premises immediately adjacent thereto, 
such as the various entrances and lobbies of the 11 Wall Street, 18 New 
Street, 8 Broad Street, 12 Broad Street and 18 Broad Street Buildings, 
and also means the telephone facilities available in these locations.'' 
In addition, the Exchange has issued interpretive guidance that the 
``Floor'' also includes the areas outside the ``Blue Line'' (member and 
member organization booths adjacent to the trading Floor) and ``any 
area reserved primarily for members, including the members' lounges and 
the members' bathrooms.'' \8\
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    \8\ See NYSE Information Memo 08-66 (December 22, 2008).
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    The current definition of ``Floor'' under Rule 6 would, upon the 
Options Relocation, include the NYSE Alternext Options Trading Floor. 
This could lead to confusion under Exchange Rules when discussing the 
``Floor'' and the ``Trading Floor''. The Exchange therefore proposes to 
adopt a new Rule 6A to define the term ``Trading Floor'' to make it 
clear that, within the area of the ``Floor'' of the Exchange as 
technically defined by Rule 6, there are distinct, restricted-access 
areas where trading is conducted by the Exchange on the one hand, and 
its corporate affiliate NYSE Alternext on the other. Under the new 
proposed Rule 6A, the term ``Trading Floor'' means the restricted-
access physical areas designated by the Exchange for the trading of 
securities, commonly known as the ``Main Room'' and the ``Garage.'' The 
Exchange's Trading Floor does not include the areas where NYSE 
Alternext-listed options are traded, commonly known as the ``Blue 
Room'' and the ``Extended Blue Room''. For the purposes of the 
Exchange's Rules, as well as this filing, these areas will be referred 
to as the ``NYSE Alternext Options Trading Floor''.
    By adopting this new Rule, the Exchange seeks to prevent any 
confusion that may arise under Exchange Rules and to provide a more 
accurate description of the physical areas of the Floor where trading 
is actually conducted. In addition, as described below, this new Rule 
would also make it easier for the Exchange to define areas where 
certain conduct is or is not permitted by its members and member firm 
employees.

2. Use of Personal Portable or Wireless Communication Devices

    NYSE Rule 36 currently prohibits, without prior Exchange approval, 
members and member organizations from establishing or maintaining any 
telephonic or electronic communication, including the usage of any 
portable or wireless communication devices (i.e. cellular phone, 
wireless pager, BlackBerryTM, etc.), between the Floor and 
any other location. Under the Rule, Floor brokers and Registered 
Competitive Market Makers (``RCMMs'') may use Exchange authorized and 
issued portable phones on the Floor, subject to certain restrictions 
(see Rules 36.20-.22).\9\ Designated Market Makers

[[Page 10327]]

(DMMs) may not use any portable or wireless communication devices on 
the Floor although they may, subject to restriction, maintain at their 
posts telephone lines and wired or wireless devices that are registered 
with the Exchange (see Rule 36.30). The use of all other portable or 
wireless communication devices on the Floor is prohibited.\10\
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    \9\ All members and member firm employees who use an authorized 
portable phone must execute a written acknowledgement as to the 
usage of the phone and authorizing the Exchange to receive data and 
records related to incoming and outgoing calls. See NYSE Information 
Memos 08-40 (August 14, 2008) and 08-41 (August 14, 2008) 
(concerning the use of Exchange authorized and issued portable 
phones on the Floor).
    \10\ Prior to the implementation of a pilot program in 2003, 
Rule 36 prohibited, inter alia, the use of portable or wireless 
communication devices on the Floor of the Exchange. In 2003, the 
Commission approved a six-month pilot program under NYSE Rule 36 for 
the use of portable phones by Floor brokers on the Floor of the 
Exchange, which was subsequently extended several times to June 30, 
2008. See footnotes 5 through 7 in Securities Exchange Act Release 
No. 58068 (June 30, 2008), 73 FR 39363 (July 9, 2008) (SR-NYSE-2008-
20). In 2006, the Exchange incorporated RCMMs into the pilot 
program. See id. footnotes 8 and 9. In July 2008 the Commission 
approved the Exchange's proposed amendments to Rule 36, making the 
pilot program permanent. See id. (order approving the amendments to 
Rule 36).
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    Although it would be prohibited under the current framework of Rule 
36, to eliminate any potential confusion arising from the Options 
Relocation, the Exchange proposes to include a provision in Rule 36.23 
that expressly prohibits members and member firm employees from using 
personal portable or wireless communications devices on the NYSE 
Alternext Options Trading Floor. However, those members and employees 
of member organizations that are also registered to trade options on 
NYSE Alternext will be permitted to use personal portable or wireless 
communications devices while on the NYSE Alternext Options Trading 
Floor in accordance with applicable NYSE Alternext Options rules and 
regulations.
    The Exchange also proposes corresponding amendments to Rules 36.21 
and.22 to provide that Floor brokers and RCMMs may not use an Exchange 
authorized and provided portable phone used to trade equities while on 
the NYSE Alternext Options Trading Floor, and including other technical 
changes.

3. Use or Possession of Wireless Trading Devices

    Currently, Exchange members and member firm employees are permitted 
to use their Exchange approved handheld trading devices throughout the 
Trading Floor of the Exchange.\11\ Subject to certain exceptions, 
pursuant to Rules 70 and 117 Floor brokers are required to either 
cancel or transfer to another Floor broker their agency interest files 
if they leave the Crowd (as defined under Rule 70.30), and, unless 
transferred, any open orders will not be represented while the Floor 
broker is away from the Crowd.\12\
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    \11\ The Exchange's Wireless Communications Plan governing the 
use of wireless handheld trading devices was previously approved by 
the Commission. See Securities Exchange Act Release No. 36156 
(August 25, 1995), 60 FR 45756 (September 1, 1995) (SR-NYSE-1995-22) 
and Securities Exchange Act Release No. 39379 (December 1, 1997), 62 
FR 64615 (December 8, 1997) (SR-NYSE-1997-17).
    \12\ Rule 70.30 defines the ``Crowd'' as ``[t]he rooms on the 
Exchange Floor that contain active posts/panels where Floor brokers 
are able to conduct business[.]'' This is, essentially, the 
``Trading Floor'' as defined in proposed Rule 6A.
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    Upon the Options Relocation, the NYSE Alternext Options Trading 
Floor will be adjacent to the NYSE Trading Floor. Thus, in order to 
address concerns regarding improper information sharing between the 
Exchange's Trading Floor and the NYSE Alternext Options Trading Floor, 
the Exchange proposes to adopt Rule 36.70 to prohibit Exchange members 
and member firm employees from (i) using or possessing any wireless 
trading device that may be used to view or enter orders into the 
Exchange's trading systems while on the NYSE Alternext Options Trading 
Floor, and (ii) using or possessing any wireless trading device that 
may be used to view or enter orders into the NYSE Alternext Options 
trading systems while on the Exchange's Trading Floor. These 
prohibitions would apply to any and all wireless trading devices, 
including devices issued by the Exchange or NYSE Alternext, as well as 
devices that are proprietary to a member, member organization or other 
entity.\13\
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    \13\ Proposed Rule 36.70 is based on proposed NYSE Alternext 
Options Rules 902(g) and (h). See Securities Exchange Act Release 
No. 59142 (December 22, 2008), 73 FR 80494 (December 31, 2008) (SR-
NYSEALTR-2008-14), as amended. NYSE Alternext has proposed similar 
prohibitions for its Equities members. See SR-NYSEALTR 2009-21 
(formally submitted March 2, 2009).
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    These proposed amendments would not change the current regulatory 
framework within which members and member firm employees may use their 
wireless trading devices. Members and member firm employees would still 
be limited to using Exchange approved wireless trading devices and 
would still be required to cancel or transfer their agency interest 
files in accordance with Rules 70 and 117 if they leave the Crowd/
Trading Floor.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with, and further the objectives of, Section 6(b)(5) of the Securities 
Exchange Act of 1934 \14\ (the ``Act''), in that they are 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. The 
proposed rule changes also support the principles of Section 11A(a)(1) 
\15\ of the Act in that they seek to ensure the economically efficient 
execution of securities transactions and fair competition among brokers 
and dealers and among exchange markets.
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    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 78k-1(a)(1).
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    The Exchange believes that the proposed rule changes will permit 
the Exchange and NYSE Alternext Options members and member firm 
employees to, within the existing regulatory framework at the Exchange, 
efficiently and effectively conduct business on their respective 
Trading Floors and engage in personal communications while off the 
Trading Floors consistent with maintaining necessary distinctions 
between the two self-regulatory organizations. Moreover, the proposed 
rule changes will impose restrictions designed to prevent inappropriate 
information sharing by and between members and member firm employees on 
the Trading Floors of the Exchange and its affiliate NYSE Alternext.

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 proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \16\ and Rule 19b-4(f)(6) thereunder \17\ 
because the foregoing proposed rule: (1) Does not significantly affect 
the protection of investors or the

[[Page 10328]]

public interest; (2) does not impose any significant burden on 
competition; and (3) does not become operative for 30 days after the 
date of filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public 
interest.\18\ The Exchange believes that this filing is non-
controversial because it is consistent with the NYSE Alternext's filing 
implementing the Options Relocation,\19\ as well as the Exchange's 
current regulatory controls governing the use of personal portable or 
wireless communications devices \20\ and wireless trading devices,\21\ 
which were approved by the Commission. Accordingly, the Exchange 
believes that these rule changes are eligible for immediately effective 
treatment under the Commission's Streamlining Order.\22\
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    \16\ 15 U.S.C. 78s(b)(3)(A).
    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ In addition, Rule 19b-4(f)(6)(iii) requires the self-
regulatory organization to give the Commission 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 this 
requirement.
    \19\ See Securities Exchange Act Release No. 59142 (December 22, 
2008), 73 FR 80494 (December 31, 2008) (SR-NYSEALTR-2008-14), as 
amended.
    \20\ See Securities Exchange Act Release No. 58068 (June 30, 
2008), 73 FR 39363 (July 9, 2008) (SR-NYSE-2008-20).
    \21\ See Securities Exchange Act Release No. 36156 (August 25, 
1995), 60 FR 45756 (September 1, 1995) (SR-NYSE-1995-22) and 
Securities Exchange Act Release No. 39379 (December 1, 1997), 62 FR 
64615 (December 8, 1997) (SR-NYSE-1997-17).
    \22\ See Securities Exchange Act Release No. 58092 (July 3, 
2008), 73 FR 40143 [sic] (July 11, 2008) (concerning 17 CFR 200 and 
241).
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    The Exchange has asked the Commission to waive the 30-day operative 
delay and designate the proposed rule change as operative upon filing 
so that the proposed rule changes may become effective upon filing and 
operative on the date of the Options Relocation, currently scheduled 
for March 2, 2009. The Commission hereby grants the Exchange's 
request.\23\ The Commission believes that such action is consistent 
with the protection of investors and the public interest because the 
Exchange's proposal would clarify the Exchange's policies governing the 
use of personal portable or wireless communication devices as well as 
wireless trading devices. This clarification is necessitated by the 
Options Relocation.
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    \23\ For purposes only of waiving the operative delay for this 
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.

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-2009-23 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2009-23. 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, 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 publicly available. All 
submissions should refer to File Number SR-NYSE-2009-23 and should be 
submitted on or before March 31, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E9-4959 Filed 3-9-09; 8:45 am]

BILLING CODE 8011-01-P