Document ID: SEC-2008-0672-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Arca, Inc.
Posted Date: 2008-05-08T04:00Z

[Federal Register: May 8, 2008 (Volume 73, Number 90)]
[Notices]               
[Page 26179-26181]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08my08-139]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57759; File No. SR-NYSEArca-2008-44]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Rule 6.62 To Include an Opening Only Order

May 1, 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 April 23, 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

    The Exchange proposes to amend NYSE Arca Rule 6.62 to include an 
additional order type, known as the Opening Only Order, to provide 
investors greater flexibility. The text of the proposed rule change is 
available at http://www.nyse.com, the principal office of NYSE Arca, 
and 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, 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.

[[Page 26180]]

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

1. Purpose
    In order to provide additional flexibility and increased 
functionality to its system and its users, the Exchange proposes to 
amend NYSE Arca Rule 6.62 in order to add a new order type known as the 
Opening Only Order.\5\ The Opening Only Order will provide investors 
with the opportunity to enter orders that will participate only in the 
Opening Auction, and not be available for trading after the opening. 
Some investors wish to transact business when a series opens for 
trading, but not later. Currently, without an Opening Only Order, these 
investors must cancel any unexecuted portion of an order after the 
opening. During the time between the opening and the submission and 
processing of the cancellation, the order entrant is exposed to the 
risk of an unwanted execution. Opening Only Orders that are not 
executed during the Opening Auction will automatically be cancelled. 
The Opening Only Order offers investors greater flexibility to manage 
their risk.\6\
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    \5\ Opening Only Orders will only apply to the Opening Auction 
on the OX system. This order type will not be available for PCX Plus 
Opening Rotations. NYSE Arca has decommissioned its PCX Plus system.
    \6\ This order type is substantially similar to the opening 
order offered by the Philadelphia Stock Exchange (Rule 1066(c)(5)) 
and by the Chicago Board Options Exchange (Rule 6.53(l)).
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    Although not currently a defined order type and not currently 
accepted by the Exchange, NYSE Arca Rule 6.64A(b) already provides for 
the implementation and inclusion of ``opening only'' orders in the 
opening auction.\7\
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    \7\ Rule 6.64A(b) reads in part: ``Contingency orders (except 
for `opening only' orders) will not participate in the Auction 
Process.''
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Act,\8\ in general, and with 
Section (b)(5) of the Act,\9\ in particular, in that the proposal is 
designed to prevent fraudulent and manipulative practices, 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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    \8\ 15 U.S.C. 78f.
    \9\ 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 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

    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 \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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.\12\ 
However, Rule 19b-4(f)(6)(iii) \13\ 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 so that the proposal can 
become operative immediately. The Exchange believes that the creation 
of an opening only order type helps to promote a fair, orderly and 
competitive options market. Further, the Exchange notes that waiver of 
the operative delay will immediately afford market participants on NYSE 
Arca the same investment opportunities presently available at other 
option exchanges. Based on the foregoing, the Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest, and therefore designates the 
proposal as operative upon filing.\14\
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    \12\ 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.
    \13\ Id.
    \14\ 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-2008-44 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-2008-44. 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

[[Page 26181]]

information that you wish to make available publicly. All submissions 
should refer to File Number SR-NYSEArca-2008-44 and should be submitted 
on or before May 29, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E8-10250 Filed 5-7-08; 8:45 am]

BILLING CODE 8010-01-P