
[Federal Register Volume 74, Number 122 (Friday, June 26, 2009)]
[Notices]
[Pages 30653-30656]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-15154]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60151; File No. SR-NYSEAmex-2009-29]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change To Include Floor 
Broker Agency Interest Containing Pegging and/or Discretionary 
Instructions, Eligible for Execution in the Closing Transaction, in the 
NYSE Amex Order Imbalance Information Datafeed Disseminated Prior to 
the Closing Transaction

June 19, 2009.

    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on June 12, 2009, 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 self-regulatory 
organization. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to include Floor Broker agency interest 
containing pegging and/or discretionary

[[Page 30654]]

instructions, eligible for execution in the closing transaction, in the 
NYSE Amex Order Imbalance Information datafeed disseminated prior to 
the closing transaction. The text of the proposed rule change is 
available at the Exchange, 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, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change 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
    NYSE Amex LLC (``NYSE Amex'' or ``the Exchange''), formerly the 
American Stock Exchange LLC, proposes to include Floor Broker agency 
interest files (``e-Quotes'') containing pegging and/or discretionary 
instructions (``d-Quotes'') (collectively ``Floor broker agency 
interest''), eligible for execution in the closing transaction, in the 
NYSE Amex Order Imbalance Information datafeed disseminated prior to 
the closing transaction.
    The Exchange notes that parallel changes are proposed to be made to 
the rules of the New York Stock Exchange LLC (``NYSE'').\4\
---------------------------------------------------------------------------

    \4\ See SR-NYSE-2009-49.
---------------------------------------------------------------------------

Background of NYSE Amex Order Imbalance Information
    Currently, NYSE Amex Equities Rule 123C allows Exchange systems to 
make available a datafeed of real-time order imbalances that accumulate 
prior to the closing transactions on the Exchange.\5\ The datafeed 
contains aggregate information about orders that are potentially 
subject to execution at the market's closing price and represent issues 
that are likely to be of particular trading interest at the close. 
Recipients of the NYSE Amex Order Imbalance Information datafeed 
currently receive this datafeed free of charge.\6\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No.59743 (April 9, 
2009), 74 FR 17699 (April 16, 2009) (SR-NYSEAmex-2009-11) (making 
available the NYSE Amex Order Imbalance Information Datafeed as a 
separate, stand-alone Market Data product); See also Securities 
Exchange Act Release No. 59816 (April 23, 2009), 74 FR 19614 (April 
29, 2009) (SR-NYSEAmex-2009-13) (modifying the reference price at 
which the Exchange reports the Order Imbalance Information and 
clarifying what information is included and excluded from the Order 
Imbalance Information Reports). Pursuant to NYSE Amex Equities Rule 
15, similar information is disseminated prior to the opening 
transaction via this product.
    \6\ The Exchange has filed with the Commission a proposed rule 
change seeking to charge a $500 monthly fee to recipients of the 
NYSE Amex Order Imbalance Information datafeed. See SR-NYSEAmex-
2009-26 (filed June 6, 2009). The Exchange does not seek to modify 
the proposed fee in any way through this filing.
---------------------------------------------------------------------------

    The NYSE Amex Order Imbalance Information datafeed disseminated 
prior to the closing transaction (``NYSE Amex Closing Order Imbalance 
Information'') includes all market-on-close orders and limit-on-close 
orders eligible to participate in the closing transaction. DMM interest 
and Crowd interest are excluded.
    Prior to the closing transaction, NYSE Amex Closing Order Imbalance 
Information is disseminated every fifteen seconds between 3:40 p.m. and 
3:50 p.m. and every five seconds between 3:50 p.m. and 4 p.m. On any 
day that the scheduled close of trading on the Exchange is earlier than 
4 p.m. EST, the dissemination of the NYSE Amex Closing Order Imbalance 
will commence 20 minutes before the scheduled closing time. NYSE Amex 
Closing Order imbalance information will be disseminated every 15 
seconds for approximately 10 minutes. Thereafter, the order imbalance 
information will be disseminated every five seconds until the scheduled 
closing time.
d-Quotes and Pegging Instructions
    Pursuant to NYSE Amex Equities Rule 70, Floor brokers are permitted 
to represent orders electronically through the use of e-Quotes. A d-
Quote, as provided by NYSE Amex Equities Rule 70, Supplementary 
Material .25, permits the Floor broker to include discretionary 
instructions as to size and/or price on an e-Quote. D-Quote 
discretionary instructions specify the price at which the d-Quote may 
trade and the number of shares to be executed based on the application 
of the discretionary instructions. The Floor broker must also specify 
the price at which the d-Quote is to be quoted.
    Pegging is a distinct instruction that may be used in conjunction 
with an e-Quote and/or a d-Quote pursuant NYSE Amex Equities Rule 70, 
Supplementary Material .26. Pegging instructions allow the Floor broker 
to maintain his/her interest in the Exchange Best Bid or Offer 
(``BBO'') if the quote moves from the orders initial quote price. 
Pegged interest moves with the Exchange BBO within the designated 
range. Any discretionary instructions associated with that interest 
will continue to be applied as long as it is within the Floor broker's 
designated price range. Buy side e-Quotes will peg to the best bid and 
sell side e-Quotes will peg to the best offer.
Proposal To Include Floor Broker Agency Interest in the Closing NYSE 
Amex Order Imbalance Information Datafeed
    Through this filing, the Exchange proposes to enhance the 
information included in the NYSE Amex Closing Order Imbalance 
Information datafeed. Specifically, the Exchange proposes to also 
include, at no additional charge, Floor broker agency interest, 
eligible for execution in the closing transaction, in the NYSE Amex 
Closing Order Imbalance Information datafeed. Accordingly, the Exchange 
believes that the inclusion of this information in the NYSE Amex 
Closing Order Imbalance Information datafeed will provide increased 
transparency regarding the anticipated closing transaction.
    The NYSE Amex Closing Order Imbalance Information will include d-
Quote interest using the maximum discretionary price that could be 
available on the close and pegging e-Quotes at their ceiling \7\ or 
floor \8\ price. Beginning at 3:55 p.m., Exchange systems will use the 
maximum discretionary or maximum pegged price (ceiling or floor) 
associated with the Floor broker agency interest to determine its 
inclusion in the NYSE Amex Closing Order Imbalance Information 
datafeed.
---------------------------------------------------------------------------

    \7\ Pursuant to Supplementary Material .26 (ix)(B) of NYSE Amex 
Equities Rule 70, the ``ceiling price'' is the highest price to 
which a buy-side e-Quote or d-Quote may peg.
    \8\ Pursuant to Supplementary Material .26(ix)(C) of NYSE Amex 
Equities Rule 70, the ``floor price'' is the lowest price to which a 
sell-side e-Quote or d-Quote may peg.
---------------------------------------------------------------------------

    The Exchange anticipates that the inclusion of Floor broker agency 
interest, eligible for execution in the closing transaction, in the 
NYSE Amex Closing Order Imbalance Information datafeed will provide its 
customers with the requested transparency and allow sufficient time for 
contra-side interest to develop, thereby decreasing volatility and 
ultimately contributing to the maintenance of a fair and orderly 
market.

[[Page 30655]]

    Currently, systemic modifications are required to implement the 
inclusion of d-Quotes and all other pegging e-Quotes eligible to 
participate in the closing transaction in all the securities traded on 
the Exchange. There are approximately 15 securities on the Exchange 
that will receive the modified Order Imbalance Information datafeed on 
the implementation date of June 22, 2009. The Exchange will implement 
the modifications progressively across the Floor on a stock by stock 
basis. During the implementation process, the Exchange will identify on 
its Web site all the securities operating on modified systems and 
receiving the Order Imbalance Information datafeed containing d-quotes 
and all other pegging e-quotes eligible to participate in the closing 
transaction. The Exchange anticipates the completion of these 
modifications on or about July 31, 2009.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (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. The instant 
proposal is in keeping with these principles in that it seeks to 
provide greater transparency to Exchange market participants, affording 
them additional information which further promotes just and equitable 
principles of trade. The Exchange submits that the proposal to include 
Floor broker agency interest in the NYSE Amex Order Imbalance 
Information datafeed furthers the protection of investors and the 
public interest by providing investors with a more accurate depiction 
of the market interest prior to the closing transaction thereby 
allowing them to make better informed trading decisions.
---------------------------------------------------------------------------

    \9\ 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: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) 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\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the self-regulatory organization 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 has requested that the Commission waive the 30-day 
operative delay so that the proposal may become operative immediately 
upon filing in order to assist investors in making better informed 
trading decisions by providing a more accurate depiction of the 
available market interest prior to the closing transaction. Moreover, a 
grant of immediate effectiveness will ensure that the Exchange can 
provide this increased transparency afforded by the additional 
information for the June 26, 2009 rebalance of the Russell Index which 
has historically been characterized by increased trading volatility 
associated with the closing transaction. The Exchange believes that the 
provision of more accurate information prior to the closing 
transactions will serve to mitigate volatility, assisting in the 
maintenance of a fair and orderly market and ultimately protecting 
investors and the public interest. The Commission believes such waiver 
is consistent with the protection of investors and the public 
interest.\12\ Accordingly, the Commission designates the proposed rule 
change operative upon filing with the Commission.
---------------------------------------------------------------------------

    \12\ 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. 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-2009-29 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-2009-29. 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 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

[[Page 30656]]

available publicly. All submissions should refer to File Number SR-
NYSEAmex-2009-29 and should be submitted on or before July 17, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-15154 Filed 6-25-09; 8:45 am]
BILLING CODE 8010-01-P


