
[Federal Register Volume 74, Number 102 (Friday, May 29, 2009)]
[Notices]
[Pages 25782-25783]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-12450]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59956; File No. SR-NYSEAmex-2009-15]


Self-Regulatory Organizations; NYSE Amex LLC; Order Granting 
Accelerated Approval of Proposed Rule Change, as Modified by Amendment 
No. 1, Amending Rule 935NY--Order Exposure Requirements To Reduce the 
Exposure Periods From Three Seconds to One Second

May 21, 2009.

I. Introduction

    On April 21, 2009, NYSE Amex LLC (``NYSE Amex'' or the 
``Exchange''), filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to reduce certain order exposure periods from 
three seconds to one second. The proposed rule change was published for 
comment in the Federal Register on May 5, 2009.\3\ The Commission 
received no comments on the proposal. The Exchange filed Amendment No. 
1 to the proposal on May 20, 2009.\4\ This order approves the proposed 
rule change, as modified by Amendment No. 1, on an accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 59825 (April 27, 
2009), 74 FR 20771 (``Notice'').
    \4\ Amendment No. 1 was a technical amendment to correct an 
inadvertent error in language in the Purpose Section of 19b-4.
---------------------------------------------------------------------------

II. Description of the Proposal

    The purpose of the proposed rule change is to reduce the exposure 
time during which Amex Users may not execute as principal against 
orders they represent as agent from three seconds to one second. Under 
the current Rule 935NY, Order Exposure Requirements, Users may not 
execute as principal orders they represent as agent unless agency 
orders are first exposed on the Exchange for at least three seconds, or 
the User has been bidding or offering on the Exchange for at least 
three seconds prior to receiving an agency order that is executable 
against such bid or offer. During this three-second exposure period, 
other market participants may enter orders to trade against the exposed 
order. Under this proposal, the exposure periods contained in Rule 
935NY would be reduced to one second.

III. Discussion and Commission Findings

    After carefully reviewing the proposed rule change, the Commission 
finds that the proposal is consistent with the requirements of the Act 
and the rules and regulations thereunder applicable to a national 
securities exchange.\5\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\6\ 
which, among other things, requires that the rules of a national 
securities exchange be designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in regulating transactions in securities, 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. The Commission also finds that the proposed rule 
change is consistent with Section 6(b)(8) of the Act,\7\ which requires 
that the rules of an exchange not impose any burden on competition that 
is not necessary or appropriate in furtherance of the purposes of the 
Act.
---------------------------------------------------------------------------

    \5\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ 15 U.S.C. 78f(b)(8).
---------------------------------------------------------------------------

    The Commission believes that, given the electronic nature of the 
NYSE Amex System, reducing the exposure periods from three seconds to 
one second could facilitate the prompt execution of orders, while 
continuing to provide market participants with an opportunity to 
compete for exposed bids and offers. To substantiate that NYSE Amex 
members could receive, process, and communicate a response back to the 
Exchange within one second, the Exchange stated that it conducted a 
survey of Amex Trading Permit Holders (``ATP Holders'') to find out 
whether their systems were capable of receiving, processing, and 
responding to orders in a meaningful way within one second. NYSE Amex 
stated that of the six member firms that responded to the Exchange's 
survey, four indicated that the turnaround time was less than one 
second, one declined to comment regarding its turnaround time, and one 
stated that it was not exactly sure of its turnaround time.\8\ NYSE 
Amex also stated that none of the responding ATP Holders anticipated 
any problems related to order processing if the Exchange reduced the 
exposure periods to one second, and none of the responding ATP Holders 
were opposed to the reduced exposure periods.\9\ Based on NYSE Amex's 
statements regarding the survey results, the Commission believes that 
market participants should continue to have opportunities to compete 
for exposed bids and offers within a one second exposure period. 
Accordingly, the Commission believes that it is consistent with the Act 
for NYSE Amex to reduce the exposure times discussed herein from three 
seconds to one second.
---------------------------------------------------------------------------

    \8\ See Notice.
    \9\ Id. NYSE Amex stated that one respondent, when asked about 
the proposed one second exposure periods, indicated that it ``might 
be hard to respond that rapidly'' but then went on to state that 
they felt NYSE Amex should make the change in order to match other 
option exchanges' rules. Id.
---------------------------------------------------------------------------

    The Commission finds good cause to approve the proposed rule change 
prior to the thirtieth day after publication for comment in the Federal 
Register. The Commission notes that the proposed rule change was 
noticed for a fifteen-day comment period, and no comments were 
received. The Commission believes that the Exchange has provided 
reasonable support for its belief that the Exchange's market 
participants would continue to have an opportunity to compete for 
exposed bids and offers if the exposure periods were reduced to one 
second as proposed. Finally, the

[[Page 25783]]

Commission also notes that the proposed rule change is similar to 
recently approved proposals submitted by the Chicago Board Options 
Exchange, Incorporated, the International Securities Exchange, LLC, 
NASDAQ OMX PHLX, Inc., and NYSE Arca, Inc.\10\ Therefore, the 
Commission finds good cause, consistent with Section 19(b)(2) of the 
Act,\11\ to approve the proposed rule change on an accelerated basis.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release Nos. 58088 (July 2, 
2008), 73 FR 39747 (July 10, 2008) (SR-CBOE-2008-16); 58224 (July 
25, 2008), 73 FR 44303 (July 30, 2008) (SR-ISE-2007-94); 59081 
(December 11, 2008), 73 FR 76432 (December 16, 2008) (SR-Phlx-2008-
79); and 59194 (January 5, 2009), 74 FR 976 (January 9, 2009).
    \11\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-NYSEAmex-2009-15), as 
modified by Amendment No. 1, be, and hereby is, approved on an 
accelerated basis.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2).
    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-12450 Filed 5-28-09; 8:45 am]
BILLING CODE 8010-01-P


