Document ID: SEC-2007-0086-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2007-01-18T05:00Z

[Federal Register: January 18, 2007 (Volume 72, Number 11)]
[Notices]               
[Page 2320-2321]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18ja07-118]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55084; File No. SR-NYSE-2006-90]

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

January 10, 2007.
    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 December 27, 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 substantially prepared by the self-
regulatory organization. The Exchange filed the proposed rule change 
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder,\4\ which renders the proposed rule change 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 proposes to amend Exchange Rule 13.30 to clarify that Stop 
Orders in Exchange Traded Funds (as defined below) are elected on 
quotes and trades.

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. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
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 is seeking to amend Exchange Rule 13.30 to clarify 
that Stop Orders (``STP'') in Investment Company Units,\5\ Trust Issued 
Receipts,\6\ and securities treated similarly (i.e., 
streetTRACKS[supreg] Gold Shares, See Exchange Rule 1300) (collectively 
Exchange-Traded Funds (``ETFs'')) are elected on both quotes and 
trades.
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    \5\ Investment Company Units are defined in Rule 703.16 of the 
NYSE Listed Company Manual.
    \6\ Trust Issued Receipts are defined in Exchange Rule 1200.
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    Prior to December 1, 2000, STP \7\ Orders in ETFs were elected only 
on trades. At that time a STP Order to buy ETFs was elected and became 
a market order only when a transaction in the security occurred at or 
above the stop price, after the order was routed to the Display 
Book[supreg] or was manually represented by a Floor broker in the

[[Page 2321]]

Crowd. Similarly, a STP Order to sell ETFs was elected and became a 
market order only when a transaction in the security occurred at or 
below the stop price, after the order was routed to the Display 
Book[supreg] or was manually represented by a Floor broker in the 
Crowd.
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    \7\ At that time, order types available to customers included 
both Stop Orders and Stop Limit Orders. Subsequently, on November 
27, 2006, the Commission approved the Exchange's proposal to 
eliminate Stop Limit Orders as an acceptable order type on the 
Exchange. See Securities Exchange Act Release No. 54820 (November 
27, 2006), 71 FR 70824 (December 6, 2006) (SR-NYSE-2006-65). Stop 
Limit Orders are therefore not addressed in this filing.
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    On December 1, 2000, due to the inherent speed of ETF trading and 
quote changes, the Exchange amended Rule 13.30 to allow STP Orders in 
ETFs to be elected also on quotations.\8\ The purpose of that amendment 
was to allow STP Orders in ETFs to participate more often and minimize 
STP Orders in ETFs from missing the market. It was not the Exchange's 
intent to preclude STP Orders in ETFs from being elected on trades and 
nothing in that filing or the rule amendment excludes STP Orders in 
ETFs from election on trades. Rather, it added a section to provide 
that STP Orders in ETFs are elected on quotes, leaving the previous 
section regarding elections on trades intact. Since the amendment, the 
Exchange has elected STP Orders in ETFs on quotes and trades. In this 
filing, the Exchange seeks to amend Rule 13.30 to clarify that STP 
orders are elected on quotes and trades, in order to eliminate any 
ambiguity inherent in the current rule's structure.
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    \8\ See Securities Exchange Act Release No. 43658 (December 1, 
2000), 65 FR 77408 (December 11, 2000) (SR-NYSE-2000-53).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) \9\ that an exchange have rules that 
are 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.
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    \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

    The Exchange has neither solicited nor received written comments on 
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 significantly 
affect the protection of investors or the public interest; does not 
impose any significant burden on competition; and by its terms, does 
not 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 \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 Rule 19b-4(f)(6) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \12\ 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 and designate the proposed 
rule change immediately operative upon filing. The Commission believes 
that waiver of the 30-day operative delay is consistent with the 
protection of investors and the public interest because it would 
clarify that stop orders in ETFs are elected on quotes and trades. 
Accordingly, the Commission designates the proposal to be effective and 
operative upon filing with the Commission.\13\
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    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ 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. 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 Number SR-NYSE-2006-90 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2006-90. 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 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-NYSE-2006-90 and should be submitted on or before 
February 8, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-616 Filed 1-17-07; 8:45 am]

BILLING CODE 8011-01-P