Document ID: SEC-2007-0476-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: NYSE Arca, Inc.
Posted Date: 2007-04-02T04:00Z

[Federal Register: April 2, 2007 (Volume 72, Number 62)]
[Notices]               
[Page 15751-15752]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02ap07-129]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55522; File No. SR-NYSEArca-2007-26]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Relating to 
Certain Types of Orders on Ox

March 26, 2007.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 2, 2007, NYSE Arca, Inc. (``NYSE Arca'' or ``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been substantially prepared by the Exchange. The Exchange filed 
the proposed rule change as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) \3\ of the Act and Rule 19b-
4(f)(6) thereunder,\4\ 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\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 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

    NYSE Arca proposes to update and amend its rules concerning order 
types by incorporating the order type definitions of NYSE Arca Rule 
6.62A into a revised NYSE Arca Rule 6.62. The text of the proposed rule 
change is available at the Exchange, the Commission's Public Reference 
Room, and http://www.nysearca.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 Exchange 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 these statements may be examined at the places specified in 
Item IV below. NYSE Arca has substantially prepared summaries, set 
forth in Sections A, B, and C below, of the most significant aspects 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 this filing is to incorporate the order definitions 
contained in NYSE Arca Rule 6.62A into a revised NYSE Arca Rule 6.62. 
Presently, Rule 6.62 defines certain order types applicable under the 
PCX Plus System, which is obsolete, while Rule 6.62A defines certain 
order types applicable under the current OX Trading System. Many of 
these rules overlap and actually apply to both systems, while some 
portions are obsolete. Revising the two rules will eliminate obsolete 
references and redundancies.
    In September 2006, NYSE Arca introduced the OX Trading System 
(``OX''), a new automated options trading platform. OX replaced the 
Exchange's legacy system, PCX Plus. In conjunction with the 
introduction of OX, the Exchange filed, and received approval for, a 
new rule set applicable to the new system.\5\ During the introductory 
phase of OX, the Exchange operated two trading systems, which 
necessitated the need for two rule sets: one pertaining to PCX Plus; 
and another pertaining to OX. The Exchange has now completed its 
rollout of OX. As such, options issues no longer trade on the PCX Plus 
at the Exchange, thereby rendering the PCX Plus rule set effectively 
duplicative and obsolete.\6\
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    \5\ See Securities Exchange Act Release No. 54238 (July 28, 
2006), 71 FR 44758 (August 7, 2006) (SR-NYSEArca-2006-13) (Order 
approving rules related to the OX Trading System).
    \6\ The Exchange anticipates submitting a comprehensive clean-up 
rule filing in the near future. At the request of the Commission 
staff, the instant filing is targeted to eliminate confusion 
regarding certain order types.
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    Order types that are contained in Rule 6.62, designated as PCX Plus 
rules, may also be applicable under the OX system. Other order types 
that are presently designated as PCX Plus rules, may also be applicable 
in open outcry trading. The Exchange proposes to combine all order 
types from Rule 6.62 and Rule 6.62A into one rule. Revised Rule 6.62 
will now contain all defined order types for options that trade on NYSE 
Arca and Rule 6.62A will be deleted in its entirety. In rule text where 
either ``PCX Plus'' or ``OX'' has been used, the Exchange proposes to 
replace such designation with ``NYSE Arca'' or ``Exchange.'' The 
Exchange also proposes removing the ``PCX Plus'' designation from the 
title of Rule 6.62. A more detailed description of proposed

[[Page 15752]]

changes is shown below. In addition to these changes, minor technical 
corrections, and new subsection designations are shown in the proposed 
rule text, accompanying this filing.
     Rule 6.62(b) will include text taken from Rule 6.62A(b) 
related to ``marketable'' limit orders and will also contain new 
subsection (1) defining Inside Limit Orders. This definition is 
presently Rule 6.62A(c).
     Rule 6.62(c) Contingency Orders. This rule will also cover 
Working Order types, presently defined in Rule 6.62A(e), including 
definitions for Stop Orders and Stop Limit Orders.
     Rule 6.62(h) Combination Orders. New subsection (1)-(2) 
will be added defining Stock/option Orders and Single Stock Future 
(``SSF'')/Option Order. These definitions are presently contained in 
subsection (j)(1)-(2).
     Rule 6.62(k)-(r) are taken from Rule 6.62A(d) and (f)-(k).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\8\ in particular, because 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.
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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 would 
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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    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 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), the proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \9\ and subparagraph (f)(6) 
of Rule 19b-4 thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\11\ 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has satisfied the five-
day pre-filing requirement. In addition, the Exchange has requested 
that the Commission waive the 30-day pre-operative delay and designate 
the proposed rule change to become operative upon filing. The 
Commission believes that waiving the 30-day pre-operative delay is 
consistent with the protection of investors and the public interest 
because it would allow the Exchange to clarify and update its rules 
concerning order types without delay. Therefore, the Commission 
designates the proposal to become effective and operative upon 
filing.\12\
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    \11\ 17 CFR 240.19b-4(f)(6)(iii).
    \12\ For purposes only of waiving the operative delay of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. 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 the 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-2007-26 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

    All submissions should refer to File Number SR-NYSEArca-2007-26. 
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. Copies of such 
filing also will be available for inspection and copying at the 
principal office of NYSE Arca. 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-2007-26 and should be submitted on or before 
April 23, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-5987 Filed 3-30-07; 8:45 am]

BILLING CODE 8010-01-P