Document ID: SEC-2009-1376-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by NYSE Amex LLC, as Modified by Amendment No. 1, Amending Rule 36-NYSE Amex Equities To Conform With Proposed Amendments to Corresponding NYSE Rule 36 To Permit the Use of Personal Portable or Wireless Communication Devices Off the Exchange Trading Floor and Outside Other Restricted Access Areas
Posted Date: 2009-09-28T04:00Z

[Federal Register: September 28, 2009 (Volume 74, Number 186)]
[Notices]               
[Page 49428-49431]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28se09-115]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60692; File No. SR-NYSEAmex-2009-57]

 
Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by NYSE Amex LLC, as Modified by Amendment No. 1, Amending Rule 
36--NYSE Amex Equities To Conform With Proposed Amendments to 
Corresponding NYSE Rule 36 To Permit the Use of Personal Portable or 
Wireless Communication Devices Off the Exchange Trading Floor and 
Outside Other Restricted Access Areas

September 18, 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 August 27, 2009, NYSE Amex LLC (``NYSEAmex'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change, as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. On 
September 17, 2009, the Exchange filed Amendment No. 1 to the proposed 
rule change.\4\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as modified by Amendment No. 1, 
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.
    \4\ Amendment No. 1 supersedes and replaces the original filing 
in its entirety.
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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 Rule 36--NYSE Amex Equities 
(Communications Between Exchange and Members' Offices) to conform with 
proposed amendments to corresponding NYSE Rule 36 submitted in a 
companion filing by the Exchange's corporate affiliate, the New York 
Stock Exchange LLC (``NYSE''). This Amendment No. 1 supersedes the 
original filing in its entirety. Amendment No. 1 serves to clarify in 
the rule text the specific areas where employees of member 
organizations are permitted to use personal portable or wireless 
communications devices.\5\ The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.nyse.com.
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    \5\ The Commission notes that the rule text makes clear that 
personal portable or wireless communication devices can only be used 
outside of the Trading Floor and all other restricted access areas.
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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.

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

1. Purpose
    This Amendment No. 1 to SR-NYSEAmex-2009-57 supersedes and replaces 
the original filing in its entirety.
    The purpose of the proposed rule changes is to amend Rule 36--NYSE 
Amex Equities (Communications Between Exchange and Members' Offices) to 
conform with proposed amendments to corresponding NYSE Rule 36 
submitted in a companion filing by the Exchange's corporate affiliate, 
the NYSE.\6\
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    \6\ See SR-NYSE-2009-84. The Commission notes that the rule text 
makes clear that personal portable or wireless communication devices 
can only be used outside of the Trading Floor and all other 
restricted access areas. See supra note 5.
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Background
    As described more fully in a related rule filing \7\, 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 Exchange's predecessor, the American 
Stock Exchange LLC, a subsidiary of AMC, became a subsidiary of NYSE 
Euronext called NYSE Alternext US LLC \8\, and continues to operate as 
a national securities exchange registered under Section 6 of the 
Act.\9\ The effective date of the Merger was October 1, 2008.
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    \7\ 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).
    \8\ NYSE Alternext US LLC was subsequently renamed NYSE Amex 
LLC. See Securities Exchange Act Release No. 59575 (March 13, 2009), 
74 FR 11803 (March 19, 2009) (SR-NYSEALTR-2009-24).
    \9\ 15 U.S.C. 78f.
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    In connection with the Merger, on December 1, 2008, the Exchange 
relocated all equities trading conducted on the Exchange legacy trading 
systems and facilities located at 86 Trinity Place, New York, New York, 
to trading systems and facilities located at 11 Wall Street, New York, 
New York (the ``Equities Relocation''). The Exchange's equity trading 
systems and facilities at 11 Wall Street (the ``NYSE Amex Trading 
Systems'') are operated by the NYSE on behalf of the Exchange.\10\
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    \10\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63).
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    As part of the Equities Relocation, NYSE Amex adopted NYSE Rules 1-
1004, subject to such changes as necessary to apply the Rules to the 
Exchange, as the NYSE Amex Equities Rules to govern trading on the NYSE 
Amex Trading Systems.\11\ The NYSE Amex Equities Rules, which became 
operative on December 1, 2008, are substantially identical to the 
current NYSE Rules 1-1004 and the Exchange continues to update the NYSE 
Amex Equities Rules as necessary to conform with rule changes to 
corresponding NYSE Rules filed by the NYSE.
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    \11\ See Securities Exchange Act Release Nos. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63); 58833 
(October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-
106); 58839 (October 23, 2008), 73 FR 64645 (October 30, 2008) (SR-
NYSEALTR-2008-03); 59022 (November 26, 2008), 73 FR 73683 (December 
3, 2008) (SR-NYSEALTR-2008-10); and 59027 (November 28, 2008), 73 FR 
73681 (December 3, 2008) (SR-NYSEALTR-2008-11).
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Proposed Conforming Amendments to NYSE Amex Equities Rules
    As noted above, the Exchange proposes to amend Rule 36--NYSE Amex 
Equities to conform with proposed amendments to corresponding NYSE Rule 
36 submitted in a companion filing by the NYSE. As discussed in more 
detail below, the NYSE is filing the proposed rule changes to permit 
the use of personal portable or wireless communication devices off the 
NYSE Trading Floor. The Exchange is proposing to adopt the NYSE's 
proposed rule changes, subject to such technical changes as are 
necessary to apply the changes to the Exchange.

[[Page 49429]]

Current Rule 36--NYSE Amex Equities
    Rule 36--NYSE Amex Equities prohibits 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 without prior Exchange approval.
    Under Rule 36--NYSE Amex Equities, notwithstanding the general 
prohibition on the use of portable or wireless communication devices, 
Floor brokers may use Exchange authorized and issued portable phones on 
the Floor to communicate with both member firms and non-members off the 
Floor, subject to certain restrictions. Floor brokers may not, however, 
use Exchange authorized and issued devices on the NYSE Amex Options 
Trading Floor (as defined in Rule 6A--NYSE Amex Equities).\12\ See Rule 
36--NYSE Amex Equities, Supplementary Material .20-.23.
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    \12\ All members and member firm employees who use an Exchange 
authorized and issued 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, incorporated by 
reference in joint NYSE/NYSE Amex Information Memo 08-66 (December 
22, 2008)).
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    Designated Market Makers (``DMMs'') may, subject to restriction, 
maintain at their posts telephone lines to the off-Floor offices of the 
DMM unit or the unit's clearing firm.\13\ Such telephone lines may only 
be used to enter options or futures hedging orders through the DMM 
unit's off-Floor office or the unit's clearing firm, or through a 
member (on the Floor) of an options or futures exchange. These lines 
may not, however, be used for the purpose of transmitting to the Floor 
orders for the purchase or sale of securities. DMMs are also permitted 
to use at their posts wired or wireless devices, including computer 
terminals or laptops, that are registered with the Exchange to 
communicate with their system algorithms. See Rule 36.30--NYSE Amex 
Equities.
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    \13\ The role of DMMs and their obligations on the Exchange 
adopted pursuant to the Merger are described in Securities Exchange 
Act Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 
2008) (SR-NYSE-2008-46).
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    Under Rule 36--NYSE Amex Equities, the use of all other portable or 
wireless communication devices on the Floor is prohibited.
    The prescriptions of Rule 36--NYSE Amex Equities must be viewed in 
conjunction with Rules 6--NYSE Amex Equities (``Floor'') and 6A--NYSE 
Amex Equities (``Trading Floor''). Under Rule 6--NYSE Amex Equities, 
the term ``Floor'' is defined as having the same meaning given that 
term under the Act. The Exchange has issued interpretive guidance that 
the ``Floor'' includes 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, the telephone facilities 
available in these locations, the areas outside the ``Blue Line'' 
(member and member organization booths adjacent to the trading Floor), 
and any area reserved primarily for members, including members' lounges 
and bathrooms.\14\
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    \14\ See NYSE/NYSE Amex Information Memo 08-66 (December 22, 
2008).
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    In addition, under recently adopted Rule 6A--NYSE Amex Equities, 
the Equities ``Trading Floor'' is within the area of the ``Floor'' and 
defined as ``the restricted-access physical areas designated by the 
Exchange for the trading of securities, commonly known as the `Main 
Room' and the `Garage.' '' In accordance with Rule 6A--NYSE Amex 
Equities, the Equities Trading Floor does not, however, include the 
areas where NYSE Amex-listed options are traded, commonly known as the 
``Blue Room'' and the ``Extended Blue Room'' (the ``NYSE Amex Options 
Trading Floor'').\15\
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    \15\ Pursuant to the definitions of ``Floor'' and ``Trading 
Floor'' in Rules 6--and 6A--NYSE Amex Equities, and corresponding 
NYSE Rules 6 and 6A, the NYSE Amex Equities and NYSE Trading Floors 
overlap and thus references in the proposed rule text as well as in 
the 19b-4 to ``Equities Trading Floor'' include the NYSE Trading 
Floor. See Securities Exchange Act Release No. 59480 (March 2, 
2009), 74 FR 10109 (March 9, 2009) (SR-NYSEALTR-2009-21) (adopting, 
inter alia, Rule 6A--NYSE Amex Equities). As noted above in footnote 
4, the NYSE has proposed corresponding rule changes for its members 
and member organizations. See SR-NYSE-2009-84.
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Proposed Rule Changes
    The Exchange proposes to amend Rule 36.23--NYSE Amex Equities to 
permit members and member firm employees to use personal portable or 
wireless communications devices outside the Equities Trading Floor 
(i.e. outside the turnstiles or card swipe pads that electronically 
release locked doors to permit authorized entry).\16\
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    \16\ See supra note 5.
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    Although there are other areas on the Exchange's premises where 
personal communications devices may be used by members and member firm 
employees (e.g., the cafeteria in 11 Wall Street), these areas are 
either too far from the Trading Floor to be practical or do not have 
adequate reception for such devices. Thus, due to the prescriptions of 
Rule 36--NYSE Amex Equities and the broad definition of ``Floor'' under 
Rule 6--NYSE Amex Equities, Exchange members and member firm employees 
are effectively required to leave the physical premises of the 
Exchange's buildings and facilities in order to use their personal 
portable or wireless communications devices. Once outside, members and 
member firm employees may use their personal phones, 
BlackBerryTM or other devices to make personal calls and 
these conversations are not subject to the requirements of Rule 36--
NYSE Amex Equities. The requirement to leave the physical premises of 
the Exchange's buildings and facilities to make personal communications 
can be overly burdensome, particularly during times of inclement 
weather. It is also burdensome to ask a member or member firm employee 
to go outside to make a personal call when there is no regulatory 
purpose for requiring personal calls to be made outside as opposed to 
inside the Exchange's facilities.
    The Exchange thus proposes to amend Rule 36.23--NYSE Amex Equities 
to provide a limited exception permitting members and member firm 
employees to use personal portable or wireless communications devices 
in designated areas of the Exchange's buildings and facilities that 
fall within the technical definition of the Floor under Rule 6--NYSE 
Amex Equities, but that are outside the Trading Floor as defined under 
Rule 6A--NYSE Amex Equities. The proposed changes would permit members 
and member firm employees to use their personal communications devices 
in the hallways, stairwells, lobbies or members-only areas of the 
Exchange premises that are adjacent to the Equities and Options Trading 
Floors of the Exchange and the NYSE.\17\ Specifically, such usage would 
be permitted in the lobby areas of the Exchange's facilities at 11 Wall 
Street, 6 and 18 New Street, and 2, 12, 18 and 20

[[Page 49430]]

Broad Street, as well as in the corridor in front of the interior 
elevator bank inside of 18 Broad Street. Again, it is important to note 
that a member would need to re-enter the Trading Floor from these areas 
through a restricted access point (i.e. turnstiles or card swipe pads 
that electronically release locked doors to permit authorized 
entry).\18\
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    \17\ It is important to note that the NYSE Amex Options Trading 
Floor is within the restricted access perimeter that encompasses the 
NYSE and NYSE Amex Equities Trading Floors and thus member and 
member firm employees would not be permitted to use such devices in 
that space under the terms of the proposed Rule defining where such 
devices are permissible. See proposed Rule 36.23--NYSE Amex 
Equities. In addition, while the Exchange's Options Rules permit 
NYSE Amex Options members to use personal communications devices on 
the NYSE Amex Options Trading Floor, those rules prohibit NYSE Amex 
Options members from using those devices on the Equities Trading 
Floor of the Exchange. See NYSE Amex Options Rule 902NY.
    \18\ The majority of the doors that require card swipe for entry 
are opaque.
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    In addition, such usage would need to be consistent with all other 
Exchange Rules and/or Federal securities laws, including, but not 
limited to, the requirements of Securities Exchange Act Release Nos. 
33-7288 and 34-37182, concerning the ``Use of Electronic Media by 
Broker-Dealers, Transfer Agents, and Investment Advisers for Delivery 
of Information.'' \19\ The Exchange represents that it will issue a 
notice to members that will, inter alia, remind them of their 
obligations under these releases. Finally, the Exchange proposes 
corresponding technical amendments to Rule 36.20.
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    \19\ See Securities Exchange Act Release Nos. 33-7288 and 34-
37182 (May 9, 1996), 61 FR 24643 (May 15, 1996) (S7-13-96). See also 
FINRA Regulatory Notice 2007-59 (December 7, 2007), concerning the 
supervision of electronic communications.
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    In proposing this limited exception, the Exchange seeks to provide 
its members and member firm employees with a reasonable and comfortable 
space inside the physical confines of the Exchange's buildings and 
facilities within which they may use their personal portable or 
wireless communication devices, without diminishing the ability to 
monitor and regulate their conduct. The Exchange believes that the 
distance afforded by allowing a DMM, for example, to use a personal 
portable or wireless communication device outside the turnstiles is, in 
essence, equivalent to requiring a DMM to leave the Exchange's premises 
to do the same. Any time or place advantage to using such devices 
outside the turnstiles is significantly reduced by the fact that a DMM 
has no line of sight and no ability to hear trading activity on the 
Floor and the speed of electronic trading would likely render stale any 
information a DMM had prior to leaving his or her post on the Trading 
Floor.
    In addition, the proposed amendments do not change the current 
obligations of members and member firm employees to use their personal 
portable or wireless communication devices consistent with Exchange 
Rules and Federal securities laws. Floor brokers would still be limited 
to using only Exchange authorized and issued portable phones on the 
Equities Trading Floor and DMMs would still only be permitted to use 
registered telephone lines and/or wired or wireless devices at their 
posts, and all such devices and communications would continue to be 
regulated by the Exchange. All other usage of portable or wireless 
communication devices on the Equities Trading Floor would continue to 
be prohibited.
    Finally, the Exchange would still retain jurisdiction over its 
members and member firm employees to regulate conduct that is 
inconsistent with Exchange Rules and/or the Federal securities laws 
(e.g., trading ahead, insider trading, market manipulation).
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 Act,\20\ 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.
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    \20\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed rule changes are consistent 
with these principles because they do not modify the current prescribed 
uses (and limitations thereof) of personal portable or wireless 
communications devices. Rather, they merely change where those devices 
may be used to reflect the reality of the current trading environment, 
in which any time and place advantage to using such devices outside the 
Equities Trading Floor and other restricted access areas is 
significantly reduced by the fact that a DMM or Floor broker has no 
line of sight or ability to hear trading activity on the Equities 
Trading Floor. The Exchange further believes that, given the current 
speed of Exchange systems and the marketplace, any information a DMM 
obtained prior to leaving his or her post would be rendered stale by 
the time the DMM is outside the turnstiles. As such, the location 
change for the use of personal portable or wireless communication 
devices in the current trading environment is consistent with the 
Exchange's current regulatory controls governing the use of personal 
portable or wireless communication devices on the Floor, which were 
previously approved by the Commission or submitted by the Exchange for 
immediate effectiveness.\21\
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    \21\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63); and 
Securities Exchange Act Release No. 59480 (March 2, 2009), 74 FR 
10109 (March 9, 2009) (SR-NYSEALTR-2009-21).
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    The Exchange further believes that the proposal will permit 
Exchange members and member firm employees to, within the existing 
regulatory framework at the Exchange, efficiently and effectively 
conduct business on the Equities Trading Floor and engage in personal 
communications while off the Equities Trading Floor.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve the proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-NYSEAmex-2009-57 on the subject line.

[[Page 49431]]

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-2009-57. 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 Section, 100 F Street, 
NE., Washington, DC 20549, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of the 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-2009-57 and should 
be submitted on or before October 19, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-23305 Filed 9-25-09; 8:45 am]

BILLING CODE 8010-01-P