Document ID: SEC-2010-0484-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2010-03-31T04:00Z

[Federal Register: March 31, 2010 (Volume 75, Number 61)]
[Notices]               
[Page 16222-16224]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31mr10-150]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61774; File No. SR-NYSEAmex-2010-24]

 
 Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC Relating to 
Exchange Liability

March 24, 2010.
    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 March 5, 2010, NYSE Amex LLC (``NYSE Amex'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the Exchange. The Exchange has 
designated the proposed rule change as constituting a ``non-
controversial'' rule change under paragraph (f)(6) of Rule 19b-4 under 
the Act,\3\ which renders the proposal effective upon receipt by the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes new Rule 905NY regarding the Exchange's 
liability for system outages. The text of the proposed rule change is 
attached as Exhibit 5 to the 19b-4 form. A copy of this filing is 
available on the Exchange's Web site at http:www.nyse.com, on the 
Commission's Web site at http://www.sec.gov, at the Exchange's 
principal office 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 self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change

[[Page 16223]]

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
    The purpose of this filing is to clarify that that [sic] the 
Exchange will generally not be held liable for any losses, expenses, 
damages or claims arising out of the use of its facilities, except to 
the extent that such losses, expenses, damages or claims are 
attributable to the willful misconduct, gross negligence, bad faith or 
fraudulent or criminal acts of the Exchange or its officers, employees 
or agents acting within the scope of their authority.
    Currently, NYSE Amex Rule 60 limits the liability of the Exchange 
for claims arising out of use of NYSE Amex's Post Execution Reporting 
(``PER'') and NYSE Alternext Options Switch (``AMOS'') systems. NYSE 
Amex Rule 63 describes the Exchange's liability in general. These rules 
were intended to cover both the options and equities trading platforms 
of NYSE Amex. However, neither of these rules were revised following 
adoption of the Section 900NY rules governing the trading of options 
contracts.
    The Exchange now proposes to adopt new NYSE Amex Rule 905NY to 
clarify that the Exchange (i) is generally not liable for losses, 
expenses, damages, or claims, arising out of the use of its facilities, 
but (ii) will assume some limited liability for damages arising out of 
the use of the NYSE Amex options trading platform under certain 
prescribed circumstances and capped at certain prescribed amounts. The 
proposed rule is substantially similar in scope to NYSE Amex Rules 60 
and 63, but is modeled off NYSE Arca options Rule 14.2, Liability of 
Exchange. To the extent that a conflict may arise between the proposed 
Rule 905NY and either Rule 60 or 63, the new rule would take 
precedence. The Exchange is in the process of reviewing Rules 60 and 63 
for possible revision or deletion. NYSE Arca Rule 14.2 offers a 
comprehensive and clear approach regarding liability, thus the Exchange 
seeks to harmonize its approach regarding liability with that of NYSE 
Arca.\4\
---------------------------------------------------------------------------

    \4\ This rule, as proposed shall apply only to the use of NYSE 
Amex options systems and facilities.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) \5\ of the Securities Exchange Act of 1934 (the ``Act''), 
in general, and furthers the objectives of Section 6(b)(5) \6\ in 
particular in that it is designed to promote just and equitable 
principles of trade, to prevent fraudulent and manipulative acts, to 
remove impediments to and to perfect the mechanism for a free and open 
market and a national market system and, in general, to protect 
investors and the public interest, by clarifying the extent of the 
Exchange's liability for claims arising out of the use of its options 
trading platform. Moreover, the proposed rule is based on NYSE Arca 
Rule 14.2, Liability of Exchange.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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, if 
consistent with the protection of investors and the public interest, it 
has become effective pursuant to Section 19(b)(3)(A) of the Act \7\ and 
Rule 19b-4(f)(6) thereunder.\8\
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Exchange to submit to 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, 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. The 
Exchange has satisfied this requirement.
---------------------------------------------------------------------------

    The Exchange requested that the Commission waive the 30-day 
operative delay period. The Commission notes that the proposal is 
nearly identical to the rule of another self-regulatory 
organization,\9\ and believes that no significant purpose is served by 
delaying its operative date. The Commission therefore believes that it 
is consistent with the protection of investors and the public interest 
to waive the 30-day operative delay and designates the proposal as 
operative upon filing.\10\
---------------------------------------------------------------------------

    \9\ See NYSE Arca Rule 14.2.
    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 Number SR-NYSEAmex-2010-24 on the subject line.

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-2010-24. 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

[[Page 16224]]

provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing 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 
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-2010-24 and should be submitted on or before April 21, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-7106 Filed 3-30-10; 8:45 am]
BILLING CODE 8011-01-P