Document ID: SEC-2006-1375-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2006-10-25T04:00Z

[Federal Register: October 25, 2006 (Volume 71, Number 206)]
[Notices]               
[Page 62499-62501]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25oc06-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54624; File No. SR-NYSE-2006-87]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to Rule 13 (Definitions of Orders)

October 18, 2006.
    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 October 16, 2006, the New York Stock Exchange LLC (``NYSE'' 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 prepared by the Exchange. The proposed 
rule change has been filed by the NYSE as a ``non-controversial'' rule 
change under Rule 19b-4(f)(6) under the Act,\3\ 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\ 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

    The proposed rule change seeks to make a clarifying amendment to 
NYSE Rule 13 (``Definitions of Orders'') as it relates to Stop Limit 
Orders (P3) which was part of the pilot (``Pilot'') \4\ to put into 
operation certain rule changes pending before the Commission to 
coincide with the Exchange's implementation of Phase 3 of the NYSE 
HYBRID MARKETSM (``Hybrid Market'').\5\
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    \4\ See Securities Exchange Act Release No, 54578 (October 5, 
2006), 71 FR 60216 (October 12, 2006) (SR-NYSE-2006-82).
    \5\ See Securities Exchange Act Release Act Release No. 53539 
(March 22, 2006), 71 FR 16353 (March 31, 2006) (SR-NYSE\2004-05).
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    The text of the proposed rule is available on the NYSE's Web site 
at http://www.nyse.com, at the NYSE's Office of the Secretary, and at 

the Commission's Public Reference Room.

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 proposal. The text of these 
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 aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On October 5, 2006, the Exchange proposed a Pilot to, among other 
things, make operative certain proposed modifications to Exchange Rules 
that are the subject of pending rule filings \6\ before the Commission 
to coincide with the Exchange's implementation of Phase 3 of the Hybrid 
Market. The Pilot commenced following Commission approval, on October 
5, 2006 and is

[[Page 62500]]

scheduled to terminate on the close of business October 31, 2006.\7\
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    \6\ See Securities Exchange Act Release Nos. 54504 (September 
26, 2006), 71 FR 57011 (NYSE-2006-76) (Notice) (proposing to amend 
the specialist stabilization requirements set forth in Exchange Rule 
104.10) (``Stabilization Filing''); 54520 (September 27, 2006), 71 
FR 57590 (September 29, 2006) (NYSE-2006-65) (Notice) (proposing to 
amend several Exchange Rules to clarify certain definitions and 
systemic processes) (``Omnibus Filing''); and SR-NYSE-2006-73 (filed 
on September 13, 2006) (proposing to amend Exchange Rule 127 which 
governs the execution of a block cross transaction at a price 
outside the prevailing NYSE quotation) (``Block Cross Filing'').
    \7\ See supra note 4.
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    Pursuant to the Pilot, the Exchange proposed the elimination of 
Stop Limit orders as an acceptable order type on the Exchange in 
securities that are subject to the Pilot. The Exchange seeks to clarify 
that the elimination of Stop Limit orders during the Pilot relates to 
all securities on the Exchange. Accordingly, the Exchange seeks to 
amend NYSE Rule 13(P3) Stop Limit Orders to state that Stop Limit 
orders are not a valid order type for all securities traded on the 
Exchange commencing October 16, 2006 and continuing during the Hybrid 
Phase 3 Pilot.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\8\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\9\ in particular, in that it 
is designed 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 change also is 
designed to support the principles of Section 11A(a)(1),\10\ in that it 
seeks to assure economically efficient execution of securities 
transactions.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ 15 U.S.C. 78k-1(a)(1).
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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

    The Exchange has neither solicited nor received written comments on 
the proposed rule change. The Exchange has not received any unsolicited 
written comments from members or other interested parties.

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

    The proposed rule change has been filed by the Exchange as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A) of the Act 
\11\ and Rule 19b-4(f)(6), thereunder.\12\ Because the forgoing 
proposed rule change does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; (iii) become operative for 30 days after the date of 
its filing, or such shorter time as the Commission may designate, if 
consistent with the protection of investors and the public interest, 
provided that the Exchange has given 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, as least five 
business days prior to the date of filing of the proposed rule change, 
or shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-
4(f)(6), thereunder.\14\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(6).
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    The Exchange requests that the Commission waive the five-day pre-
filing notice requirement and the 30-day delayed operative date of Rule 
19b-4(f)(6)(iii). Under Rule 19b-4(f)(6)(iii), a proposed ``non-
controversial'' rule change does not become operative for 30 days after 
the date of filing, unless the Commission designates a shorter time.
    The Commission believes that the waiving the 30-day operative delay 
is consistent with the protection of investors and the public 
interest.\15\ The Exchange has decided to eliminate the Stop Limit 
order type because it is no longer used. The Exchange represented that 
it had notified members that this order type would no longer be 
accepted as of October 16, 2006 to coincide with other changes that are 
being implemented in the Pilot. To minimize confusion as to acceptable 
order types, the Exchange has proposed to eliminate stop limit orders 
in all securities, not just securities eligible for the Pilot. 
Accordingly, the Commission believes it is consistent with the 
protection of investors and the public interest to implement this 
change immediately.
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    \15\ For the purposes only of accelerating the operative day of 
this proposal, the Commission has considered the proposed rules 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    The Commission designates the proposed rule change to be effective 
and operative upon its filing with the Commission. The Commission also 
waives the five-business day pre-filing requirements. As 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.

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-NYSE-2006-87 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2006-87. 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 will also be available for inspection and copying at the 
principal office of the NYSE. 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-2006-87 and should be submitted on or before 
November 15, 2006.

[[Page 62501]]

    For the Commission, by the Division of Market Regulation, pursuant 
to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6-17832 Filed 10-24-06; 8:45 am]

BILLING CODE 8011-01-P