Document ID: SEC-2008-0321-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-02-29T05:00Z

[Federal Register: February 29, 2008 (Volume 73, Number 41)]
[Notices]               
[Page 11177-11178]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29fe08-130]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57377; File No. SR-NYSE Arca-2008-19]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Amend Rule 7.31 
To Modify the Primary Only Order Type

February 25, 2008.
    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 February 13, 2008, 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 prepared substantially by NYSE Arca. 
NYSE Arca filed the proposed rule change as a ``non-controversial'' 
proposed rule change pursuant to section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(6) thereunder,\4\ which renders it 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 amend Rule 7.31(x) in order to modify the 
permissible order entry time and eligibility of its Primary Only Order 
(``PO Order''). The text of the proposed rule change is available at 
NYSE Arca, the Commission's Public Reference Room, and http://
www.nyse.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, NYSE Arca included statements 
concerning the purpose of, and basis for, the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. NYSE Arca 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
    The Exchange proposes to amend NYSE Arca Equities rule 7.31(x) to 
modify the operability and eligibility of PO Orders in order to provide 
additional flexibility and increased functionality to its system and 
its Users.\5\
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    \5\ See NYSE Arca Rule 1.1(yy) for the definition of ``User.''
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    The PO Order is a market or limit order that is routed to the 
primary, listing market, without sweeping the NYSE Arca book.\6\ PO 
Orders may be entered until a cut-off time as determined from time to 
time by the Corporation. Presently, the Exchange restricts PO Orders to 
participation in the primary, listing market opening. In an effort to 
enhance order execution opportunities for its Users, the Exchange 
proposes to modify the PO Order type so that they may be entered at any 
time and to offer an order modifier for Users to designate PO Orders 
that are eligible for entry and execution throughout the trading day.
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    \6\ NYSE Arca Rule 7.31(x).
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    According to the proposal, a PO Order may be entered at any time 
\7\; and will be immediately routed to the primary, listing market for 
execution. If the order is not IOC, the order is not returned to the 
NYSE Arca book; rather it remains at the venue routed to, until 
executed or cancelled that day. In instances where a symbol is halted, 
the PO Order will remain at the primary, listing market until such time 
that it is cancelled or the symbol is re-opened. PO Orders eligible for 
participation in the primary, listing market's opening must be entered 
before 6:28 a.m. (Pacific Time). A PO Order entered for participation 
in the primary, listing market re-opening after a trading halt must be 
entered after trading was halted on the Corporation and before the Re-
Opening Time. Otherwise, PO Orders eligible for participation in the 
primary, listing market at all other times must be marked with the 
modifier: PO+.
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    \7\ Users would be able to enter PO Orders into the system for 
execution during any of the Exchange's trading sessions (Opening, 
Core and Late Sessions).
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    The proposed changes to the PO Order type will provide additional 
flexibility and functionality to the Exchange's system and its Users 
that wish to use the system to comply with their obligations to avoid 
trading through any Protected Quotation within the meaning of Rule 
600(b)(58) of Regulation NMS.\8\ PO Orders may be designated as 
intermarket sweep orders thereby providing the entering party the 
ability to trade-through any protected bid or offer (as defined in Rule 
600(b) of Regulation NMS under the Act) and to execute at the primary, 
listing market. Of course, a broker-dealer that designates an order as 
an intermarket sweep order has the responsibility of complying with 
Rules 610 and 611 of Regulation NMS.
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    \8\ 17 CFR 242.600(b)(58).
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    The Exchange believes that the proposed clarification and 
additional modifier will enhance flexibility and order execution 
opportunities for its Users. The Exchange also believes that the 
proposed amendments will also allow its Users to comply with their 
obligation to avoid trading through any protected bid or offer within 
the meaning of Rule 600(b) of Regulation NMS. In addition, the Exchange 
believes that the proposed functionality is substantially similar to 
the ``Directed Orders'' presently offered by The NASDAQ Stock Market 
LLC (``Nasdaq'').\9\
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    \9\ See Securities Exchange Act Release No. 55405 (March 6, 
2007), 72 FR 11069 (March 12, 2007) (SR-NASDAQ-2007-020).
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2. Statutory Basis
    The proposed rule change is consistent with the provisions of 
section 6 of the Act,\10\ in general, and with sections 6(b)(1) and 
(b)(5) of the Act,\11\ in particular, in that the proposal 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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    \10\ 15 U.S.C. 78f.
    \11\ 15 U.S.C. 78f(b)(1) and (b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    NYSE Arca does not believe that the proposed rule change will 
impose any

[[Page 11178]]

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

    Written comments were neither solicited nor received.

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

    Because the foregoing 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 from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to section 19(b)(3)(A) of the Act \12\ and Rule 19b-
4(f)(6) thereunder.\13 \
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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.\14\ 
However, Rule 19b-4(f)(6)(iii) \15\ 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 requested that the 
Commission waive the 30-day operative delay. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest.\16\ The Commission 
hereby grants the Exchange's request and designates the proposal as 
operative upon filing.
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    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file 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 Arca has complied with this requirement.
    \15\ Id.
    \16\ For purposes only of waiving the 30-day 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 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 No. SR-NYSEArca-2008-19 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSEArca-2008-19. 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, 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 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-2008-19 and should be submitted on or before 
March 21, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-3890 Filed 2-28-08; 8:45 am]

BILLING CODE 8011-01-P