
[Federal Register: November 12, 2009 (Volume 74, Number 217)]
[Notices]               
[Page 58345-58350]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12no09-118]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60921; File No. SR-NYSEArca-2009-90]

 
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
of Proposed Rule Change Amending NYSE Arca Equities Rule 2.100 To 
Provide the NYSE Arca With the Authority to Declare an Emergency 
Condition With Respect to Trading on or Through the Systems and 
Facilities of the NYSE Arca and Enable the NYSE Arca to Act as a Back-
Up Trading Facility for Affiliated Exchanges Owned and Operated by NYSE 
Euronext

November 3, 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 October 13, 2009, NYSE Arca Inc. (the ``Corporation'' or 
``NYSE Arca'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III 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.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NYSE Arca proposes to amend NYSE Arca Equities Rule 2.100 governing 
the Corporation's equities trading systems and facilities (also 
referred to as the ``NYSE Arca Marketplace''). The proposed rule change 
would (i) provide the Corporation with the authority to declare an 
Emergency Condition (defined below) with respect to trading on or 
through the systems and facilities of the Corporation as necessary in 
the public interest and for the protection of investors, and (ii) under 
such circumstances, enable the Corporation to act as a back-up trading 
facility for affiliated exchanges owned and operated by NYSE Arca's 
corporate

[[Page 58346]]

parent, NYSE Euronext.\4\ The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
http://www.nyse.com.
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    \4\ The Corporation's affiliated exchange is New York Stock 
Exchange LLC (``NYSE'' or ``Affiliated Exchange''). The NYSE has 
submitted a companion filing to provide for the same emergency 
authority proposed herein. See SR-NYSE-2009-105.
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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 Arca proposes to amend NYSE Arca Equities Rule 2.100 to (1) 
delete the existing text as obsolete; (2) provide the Corporation with 
the authority to declare an Emergency Condition with respect to trading 
on or through the systems and facilities of the Corporation (for the 
purposes of this filing, an ``Emergency Condition'') as necessary in 
the public interest and for the protection of investors; and (3) under 
such circumstances, enable the Corporation to act as a back-up trading 
facility for an Affiliated Exchange in the event that it is unable to 
trade because of an emergency condition declared under its rules.
    This rule filing responds to an initiative of the Commission to 
ensure that regulatory agencies and self-regulatory organizations have 
rules and procedures in place to effectively address an Emergency 
Condition. The Corporation has been participating as a member of the 
inter-regulatory ``Pandemic Planning and Regulatory Coordination 
Working Group,'' which is working on developing effective strategies 
and coordination among regulators to prepare for an Emergency 
Condition.
    As described more fully below, the authority contemplated in the 
proposed rule could be exercised when, due to an Emergency Condition, 
NYSE Euronext facilities located at 11 Wall Street, New York, New York, 
including the Trading Floor of an Affiliated Exchange, are inoperable. 
As proposed for amendment, NYSE Arca Equities Rule 2.100 is intended to 
be invoked only in the event of emergencies, as defined in Section 
12(k)(7) of the Act.\5\ As proposed, the rule would provide the 
Corporation with regulatory flexibility to mitigate the effects of an 
Emergency Condition so that the securities markets in general, and the 
systems and facilities of the Corporation or an Affiliated Exchange in 
particular, may continue to perform in a manner consistent with the 
protection of investors and in pursuit of the public interest.
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    \5\ 15 U.S.C. 78l(k)(7) [sic].
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    The proposed amendments are described in detail below:
1. Deletion of Current NYSE Arca Equities Rule 2.100 as Obsolete
    Current NYSE Arca Equities Rule 2.100 was adopted in November 2000 
in connection with the proposal by Pacific Stock Exchange, Inc., 
through its wholly-owned subsidiary PCX Equities, Inc. (``PCXE''), to 
create a new electronic trading facility of PCXE called the Archipelago 
Exchange (``Arca''). Rule 2.100 provided a mechanism for allowing PCXE 
members to trade uninterrupted when PCXE transitioned to Arca.\6\ The 
circumstances that originally required the adoption of Rule 2.100 are 
no longer applicable, as all former PCXE members either became NYSE 
Arca ETP Holders or opted not to become members of NYSE Arca. 
Accordingly, the Corporation is proposing to delete the current 
language of Rule 2.100.
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    \6\ See Securities Exchange Act Release No. 43608 (November 21, 
2000), 65 FR 78821 (December 15, 2000) (SR-PCX-00-25). In April 
2006, although Rule 2.100 was no longer being used, the names of the 
entities in Rule 2.100 were changed in a rule filing that made 
global name changes to all NYSE Arca Equities rules to reflect 
changes resulting from the merger of NYSE Group, Inc. and 
Archipelago Holdings, Inc. See Securities Exchange Act Release No. 
53615 (April 7, 2006), 71 FR 19226 (April 13, 2006) (SR-PCX-2006-
24). The substance of the rule, however, did not change.
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2. Establishing Emergency Powers under Proposed New NYSE Arca Equities 
Rule 2.100
    Under current NYSE Arca Equities rules, in the event of an 
Emergency Condition that would impact the Corporation's and/or an 
Affiliated Exchange's ability to operate normally, the Corporation does 
not currently have authority to permit it to accept the transfer of 
trading from an Affiliated Exchange to the Corporation. The Corporation 
is proposing to amend NYSE Arca Equities Rule 2.100 to provide such 
authority to the Corporation. As defined in the proposed rule, such 
authority would be available only in the rare event of exigent 
circumstances that would prevent the Corporation or an Affiliated 
Exchange from operating normally, such as a pandemic or similar 
occurrence that affects its facilities.
    The proposed amendments to NYSE Arca Equities Rule 2.100 would 
provide the Corporation with emergency powers so that in the event of 
an Emergency Condition, the Corporation can act as necessary in the 
public interest and for the protection of investors. As noted above, to 
ensure consistency among the Commission and other exchanges, the 
Corporation proposes adopting the definition of ``emergency'' set forth 
in Section 12(k)(7) of the Act. Such definition is broad enough to 
ensure that the Corporation will have the authority to invoke its 
emergency powers as necessary to respond to both regional and national 
emergencies, such as a pandemic crisis, or other situations in which 
trading on the systems and facilities of the Corporation and/or an 
Affiliated Exchange is restricted or substantially impaired, such as by 
government action or environmental causes.
    Under the proposed rule, when an Emergency Condition exists that 
would prevent the Corporation and/or an Affiliated Exchange from 
operating normally, a ``qualified Corporation officer'' would have the 
authority to declare an Emergency Condition with respect to trading on 
or through the systems and facilities of the Corporation and/or the 
Affiliated Exchange and as necessary in the public interest and for the 
protection of investors. A ``qualified Corporation officer'' is defined 
as the NYSE Euronext Chief Executive Officer or his or her designee, or 
the NYSE Regulation, Inc. (``NYSER'') Chief Executive Officer \7\ or 
his or her designee. In the event that none of these individuals is 
able to assume this responsibility due to incapacitation, the next most 
senior officer of NYSE Euronext or NYSER would be a ``qualified 
Corporation officer'' for purposes of the proposed rule.
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    \7\ Upon completion of the merger between NYSE Group, Inc. and 
Archipelago Holdings, Inc. on March 7, 2006, the regulatory 
personnel of the Corporation were re-designated as NYSER employees. 
Therefore, the NYSER Chief Executive Offer or his or her designee 
may make such determinations and decisions as contemplated by 
proposed NYSE Arca Equities Rule 2.100 on behalf of the Corporation.

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[[Page 58347]]

3. Contingency Trading Facility for an Affiliated Exchange
    NYSE Euronext has determined to designate the Corporation, and 
specifically the NYSE Arca Marketplace, as a back-up trading facility 
for an Affiliated Exchange. In the event that an Emergency Condition is 
so disruptive as to render the trading systems and facilities of an 
Affiliated Exchange effectively inoperable, a contingency plan has been 
developed to allow for the Corporation to receive, process and execute 
orders for members, member organizations and sponsored participants of 
the Affiliated Exchange (designated as ``Affiliated Participants'') in 
its listed and traded securities.
a. Use of the Corporation's Trading Systems and Facilities
    Under the proposed arrangement between the Corporation and the 
Affiliated Exchange, the systems and facilities of the Corporation 
would effectively become the systems and facilities of the Affiliated 
Exchange, as necessary, such that its Affiliated Participants would be 
able to submit bids and offers and execute trades in Affiliated 
Exchange-listed securities on or through the NYSE Arca Marketplace 
systems and facilities, regardless of whether such Affiliated 
Participants are ETP Holders \8\ or Sponsored Participants \9\ of the 
Corporation at the time the Emergency Condition is declared (see part 
``b'' below). During these times, quotes or orders of Affiliated 
Exchange-listed securities entered or executed on or through NYSE Arca 
Marketplace would be published as quotes and executions of the 
Affiliated Exchange (see part ``c'' below).\10\
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    \8\ An ``ETP Holder'' is a broker or dealer registered pursuant 
to Section 15 of Act that has been issued an Equity Trading Permit 
(``ETP'') by the Corporation for effecting approved equities 
securities transactions on NYSE Arca Marketplace. See NYSE Arca 
Equities Rule 1.1(m)-(n).
    \9\ A ``Sponsored Participant'' is a person or entity that has 
entered into a sponsorship arrangement with a Sponsoring ETP Holder 
pursuant to NYSE Arca Equities Rule 7.29. See NYSE Arca Equities 
Rule 1.1(tt). A ``Sponsoring ETP Holder'' is a broker-dealer that 
has been issued an ETP by the Corporation who has been designated by 
a Sponsored Participant to execute, clear and settle transactions on 
NYSE Arca Marketplace. The Sponsoring ETP Holder must be either (i) 
a clearing firm with membership in a clearing agency registered with 
the Commission that maintains facilities through which transactions 
may be cleared or (ii) a correspondent firm with a clearing 
arrangement with any such clearing firm. See NYSE Arca Equities Rule 
1.1(uu).
    \10\ Currently, the Corporation trades NYSE-listed equities 
securities on a UTP basis. However, in the event of the declaration 
of an emergency condition under proposed NYSE Rule 49 such that the 
NYSE Trading Floor and systems and facilities are inoperable and 
trading is conducted on or through the systems and facilities of the 
Corporation, NYSE-listed securities traded on the NYSE Arca 
Marketplace would be NYSE trades rather than NYSE Arca trades. Under 
such circumstances, the NYSE would use NYSE Arca Marketplace as the 
execution engine for NYSE trades and would ensure that these trades 
are executed in compliance with Regulation NMS.
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    Under such circumstances, the Corporation and the Affiliated 
Exchange would broadcast to the market using any and all methods 
available that they have declared a triggering event and the Affiliated 
Exchange would then halt all trading conducted on its systems and 
facilities. All unexecuted orders would remain on the Affiliated 
Exchange's systems unless cancelled by the entering member or member 
organization. The Corporation and the Affiliated Exchange would then 
open trading of the Affiliated Exchange-listed securities on the 
systems and facilities of the Corporation as soon thereafter as 
possible, but not earlier than at least the next trading day. As soon 
as practicable following the commencement of trading on the 
Corporation's systems and facilities, any unexecuted orders shall be 
purged from the Affiliated Exchange's own systems and facilities.\11\
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    \11\ See SR-NYSE-2009-105.
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    Orders in Affiliated Exchange-listed securities entered on the 
Corporation's systems and facilities on a UTP basis that are unexecuted 
prior to the declaration of an Emergency Condition would remain 
available for execution on the NYSE Arca systems (that is they will not 
be cancelled). Once trading on the Affiliated Exchange resumes on the 
Corporation's systems executions of such orders would be printed with 
an ``N'' modifier on the Consolidated Tape (see part ``c'' below).\12\
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    \12\ See SR-NYSE-2009-105.
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b. Obligations of Affiliated Participants During Emergency Condition
    The use of NYSE Arca as a back-up facility for the Affiliated 
Exchange presents certain logistical hurdles. Specifically, NYSE Arca 
Equities Rule 7.29(a) provides that only ``Users'' having authorized 
access to the NYSE Arca Marketplace may enter and execute orders. 
Pursuant to NYSE Arca Equities Rule 1.1(yy), a ``User'' is defined as 
an ETP Holder or Sponsored Participant who is authorized to obtain 
access to the NYSE Arca Marketplace. However, it is almost certain that 
some Affiliated Participants will not be ETP Holders or Sponsored 
Participants at the time of an Emergency Condition and, therefore, 
would not be able to trade directly on the NYSE Arca Marketplace in the 
event that an Affiliated Exchange is required to close its systems and 
facilities. Although such Affiliated Participants can become ETP 
Holders or Sponsored Participants of the Corporation if they so choose, 
some choose not to for business reasons (i.e., to avoid the payment of 
additional registration fees).
    To effectuate the business continuity plan in which trades of 
securities listed on an Affiliated Exchange are executed on or through 
the systems and facilities of the Corporation, the Corporation is 
proposing to amend NYSE Arca Equities Rule 2.100 in order to provide 
temporary membership and/or access to the NYSE Arca Marketplace if an 
Affiliated Exchange declares an Emergency Condition.
    The Corporation will establish inactive equity trading permits and 
connectivity for Affiliated Participants that are not current ETP 
Holders of NYSE Arca Marketplace that would become active in the event 
that the Corporation is designated as an alternative facility of an 
Affiliated Exchange. Similarly, Affiliated Participants that trade on 
an Affiliated Exchange pursuant to sponsored access that do not have 
sponsored access to the NYSE Arca Marketplace at the time of an 
Emergency Condition would be permitted to obtain such access through 
either an existing NYSE Arca ETP Holder or through an Affiliated 
Participant that is granted temporary membership in accordance with 
proposed NYSE Arca Equities Rule 2.100, provided the sponsored 
Affiliated Participants could establish connectivity and complete the 
required documentation incident to such sponsored access. Temporary 
membership or access granted under the proposed Rule will be valid only 
for the duration of the Emergency Condition.
    The ability to trade directly on the NYSE Arca Marketplace in this 
manner would be available only in the event that an Affiliated Exchange 
declared an emergency condition under its own rules and designated the 
Corporation as the back-up execution facility. During the pendency of 
an Emergency Condition, the Affiliated Participants would be subject to 
the NYSE Arca Equities rules governing trading (e.g. NYSE Arca Equities 
Rule 7) and such rules would be considered the rules of the Affiliate 
Exchange for the duration of the declaration.\13\
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    \13\ Even though the applicable NYSE Arca Equities Rules 
governing trading would apply for the duration of an emergency 
condition, the Affiliated Exchange's rules governing member firm 
conduct would continue to apply to its Affiliated Participants, 
including membership requirements and net capital requirements. In 
addition, the Affiliated Exchange's listing requirements for its 
listed securities would continue to apply.

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[[Page 58348]]

    Because of differences between the systems of the Affiliated 
Exchange and the Corporation, NYSE Arca Marketplace is not able to 
support ``Designated Market Makers'' (``DMMs'') operating in the same 
manner that they operate on the Affiliated Exchange. In particular, 
DMMs would not have access to orders on NYSE Arca Marketplace any 
different than other market participants. Thus, DMMs of an Affiliated 
Exchange would not be able to fulfill their DMM obligations, including 
the affirmative obligation to make a market in a reasonable depth and 
with reasonable price continuity, and would be severely hampered in 
their ability to stabilize the market. As a result, in the event that 
an Affiliated Exchange is unable to operate its systems and facilities 
and instead designates the Corporation to receive and process quotes 
and trades, such DMMs would not be considered DMMs under the NYSE Arca 
Equities Rules for the duration of the designation. In order to ensure 
that there continues to be a market for Affiliated Exchange-listed 
securities, DMMs would be designated as ``Market Makers'' in accordance 
with NYSE Arca Equities Rule 7.23 and would be required to meet the 
requirements of that Rule for the duration of an Emergency 
Condition.\14\ Once trading resumed on the Affiliated Exchange, DMMs 
would resume their roles as DMMs and would be subject to their 
obligations under the Affiliated Exchange rules.
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    \14\ DMMs will be required to meet the same margin requirements 
as NYSE Arca Market Makers.
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    Similarly, in the event of a declaration of an Emergency Condition, 
the Affiliated Exchange would, as applicable, provide temporary 
membership and/or authorized access to those Corporation ETP Holders 
and Sponsored Participants that are not already members or sponsored 
participants of the Affiliated Exchange at the time of an Emergency 
Condition. The temporary designation of NYSE Arca-only ETP Holders as 
members of the Affiliated Exchange is necessary because, in the event 
of an Emergency Condition when Affiliated Exchange-listed securities 
are trading on the Corporation's systems and facilities and are being 
printed as trades of the Affiliated Exchange, the system would not be 
able to prevent NYSE Arca-only ETP Holders from trading Affiliated 
Exchange-listed securities. By granting NYSE Arca-only ETP Holders 
temporary membership in the Affiliated Exchange, the Affiliated 
Exchange seek to avoid any issue as to the legitimacy of such trades.
    Corporation-only members that are granted a temporary membership by 
an Affiliated Exchange will not be required to meet any of the 
Affiliated Exchange's membership requirements. Sponsored Participants 
of the Corporation that are not set up with sponsored access to the 
Affiliated Exchange would be authorized for such access through either 
an existing member of the Affiliated Exchange or a Corporation ETP 
Holder that is granted temporary membership in accordance with the 
rules of the Affiliated Exchange. Such temporary memberships and/or 
authorized access would be valid only for the duration of the Emergency 
Condition.
c. Processing Trades of Affiliated Exchange-Listed Securities Executed 
on or Through the Corporation's Systems and Facilities
    For the duration of the Emergency Condition, trades in securities 
listed on an Affiliated Exchange would print on the Consolidated Tape 
as trades of the Affiliated Exchange, and quotes would be designated as 
quotes of the Affiliated Exchange in the Consolidated Quote Stream, 
notwithstanding the fact that they were processed on or through the 
Corporation's systems and facilities. Because an Affiliated Exchange 
would, as a practical and legal matter, continue to operate--albeit 
using different systems and facilities for processing trades and 
quotes--the Corporation submits that no modifications would be 
necessary to either the Consolidated Quote Plan or the Consolidated 
Tape Association Plan.\15\
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    \15\ The Corporation notes that there is precedent for this type 
of arrangement: after the collapse of the World Trade Centers on 
September 11, 2001, the American Stock Exchange (``Amex'') was 
unable to open its trading floor because of its proximity to the 
collapse site. To ensure that the Amex could continue to operate, 
the Amex utilized the systems and facilities of the NYSE (and a 
portion of its trading floor) to process and trade Amex-listed 
securities. Indeed, for the duration of that emergency, Amex quotes 
and trades were considered to have originated from the Amex, 
notwithstanding that they were processed on the systems and 
facilities of the NYSE.
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    The surveillance of the trading of Affiliated Exchange-listed 
securities on or through the systems and facilities of the Corporation 
would be conducted by NYSE Arca on behalf of the Affiliated 
Exchange.\16\ In the event that an Affiliated Participant failed to 
comply with the Corporation's rules while trading Affiliated Exchange-
listed securities, they would--for jurisdictional reasons--be referred 
to the Affiliated Exchange and be investigated by, and if warranted, 
prosecuted by, NYSE Regulation, Inc. on behalf of the Affiliated 
Exchange rather than on behalf of the Corporation.
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    \16\ The Corporation's mnemonic identification system for its 
ETP Holders is different than that used by the Affiliated Exchange 
for its members and member organizations. Thus, trades executed by 
Affiliated Exchange-only members or member organizations can be 
readily identified if necessary.
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    A description of the procedures that Affiliated Participants would 
need to follow in order to access and effect transactions through the 
facilities and systems of the Corporation will be made available 
through the normal communication systems of the Corporation and the 
Affiliated Exchange. In addition, members of the Corporation are 
required to take appropriate actions as instructed by the Corporation 
to accommodate the use of its systems and facilities to trade 
Affiliated Exchange-listed securities pursuant to this Rule.
    The Corporation recognizes that, by cross-designating Affiliated 
Exchange-only and NYSE Arca-only members and member organizations and 
requiring that all trades of Affiliated Exchange-listed securities 
executed on the NYSE Arca Marketplace be printed as trades of the 
Affiliated Exchange, its business continuity plan effectively combines 
the two markets for those securities. The Corporation believes, 
however, that its business continuity plan is appropriate and 
consistent with the provisions of the Act. To begin with, such 
consolidation would only be on a temporary basis. In addition, the 
Corporation notes that this arrangement would not harm customers or 
unfairly advantage the Corporation by distorting the allocation of 
market data revenue or quoting revenue to the various exchanges; 
because NYSE and NYSE Arca share a common corporate parent, NYSE 
Euronext, and revenues are reported on a consolidated basis, there is 
no net economic benefit to NYSE Euronext.
    The Corporation believes that any confusion caused by designating 
all prints of Affiliated Exchange-listed securities executed on the 
NYSE Arca Marketplace as trades of those exchanges is far outweighed by 
the benefits of maintaining the ability for the Affiliated Exchange to 
provide primary market prints to market participants during an 
Emergency Condition. Among other things, the Corporation notes that 
certain indices, funds and derivative products require primary market 
prints for pricing and valuation, and that, similarly, private 
corporate transactional contracts involving stock purchase or valuation 
frequently make reference to the primary market print rather than to 
the

[[Page 58349]]

Consolidated Tape print. The Corporation believes that without a 
primary market print, there could be unnecessary disruption to other 
areas of an already fragile marketplace that is likely facing 
significant challenges in dealing with other consequences of the 
Emergency Condition.
4. Limitations on Invocation of Authority Under Proposed NYSE Arca 
Equities Rule 2.100
    Before invoking the proposed emergency powers, the Corporation will 
make concerted efforts to alert and consult with the Commission via 
electronic, telephonic and in-person communications, and to continue to 
maintain an open dialogue with the Commission regarding the responses 
being taken. In the event that Corporation staff is unable to 
communicate with Commission staff, the proposed rule permits the 
Corporation to take appropriate action and to subsequently advise the 
Commission of such action at the earliest available time.
    The Corporation's authority under this rule would be available for 
up to 10 calendar days from the date that the Corporation invoked such 
authority. At any time after invoking such emergency powers, the 
Corporation, with Commission approval, may cease or alter such 
emergency powers. If conditions are warranted, and subject to 
Commission approval of a rule filing pursuant to Section 19(b)(2) of 
the Act, the Corporation could extend this emergency authority for a 
specific amount of time longer than the initial 10 calendar day period.
    Before seeking Commission approval for such an extension, the 
Corporation will re-evaluate the specific regulatory actions taken. The 
Commission may also unilaterally direct that the Corporation cease or 
alter such emergency powers. Once such authority has been invoked, the 
Corporation will use its available communications resources, including 
its Web site and other public channels, as well as regulatory channels 
such as Regulatory Bulletins, to provide ETP Holders and Sponsored 
Participants with advance notice of when such actions will expire. The 
Corporation shall provide adequate prior notice to ETP Holders, 
Sponsored Participants and investors regarding its intention to 
terminate the actions taken.
Trading Halts Due to Extraordinary Market Volatility
    NYSE Arca currently has the authority to halt all stocks eligible 
for trading on NYSE Arca Equities in the event of extraordinary market 
volatility,\17\ consistent with the authority granted to other self-
regulatory organizations (``SROs'').\18\ The Corporation believes that 
the NYSE is currently the only SRO that monitors for the thresholds 
(i.e., a specified decline of the Dow Jones Industrial Average\SM\ 
(``DJIA'') from such index's previous close during a trading day, based 
on a quarterly calculation of the average closing value for DJIA during 
such quarter) as noted within these common rules. Due to this, the 
Corporation shall establish a mechanism to calculate these thresholds 
in the event trading on the NYSE becomes inoperable and the Corporation 
acts as the alternative trading facility of that Affiliated Exchange, 
as contemplated by this proposed rule.
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    \17\ See NYSE Arca Equities Rule 7.12.
    \18\ See, e.g., NYSE Rule 80B, Rule 80B-NYSE Amex Equities, 
NASDAQ Stock Market Rules 4120 and 4121.
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Conclusion
    Because the purpose of the proposed rule is to grant authority to 
the Corporation to act in the event of an Emergency Condition, the 
terms of the rule are necessarily inclusive, and flexible. At all 
times, the Corporation will continue to act in a manner consistent with 
the public interest and for the protection of investors, and it intends 
to be bound by and guided by these underlying precepts should there be 
a need to invoke proposed NYSE Arca Equities Rule 2.100 and exercise 
such proposed emergency powers.
2. Statutory Basis
    The basis for this proposed rule change is the requirement under 
Section 6(b)(5) \19\ of the Act 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. Proposed NYSE Arca Equities Rule 2.100 would provide 
the Corporation with the regulatory flexibility to take action, as 
necessary, in the event of an Emergency Condition, as defined.
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    \19\ 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-NYSEArca-2009-90 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-NYSEArca-2009-90. 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 Commissions 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

[[Page 58350]]

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, 100 F Street, NE., 
Washington, DC 20549, 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 NYSE Arca. 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-NYSEArca-2009-90 and should 
be submitted on or before December 3, 2009.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-27127 Filed 11-10-09; 8:45 am]

BILLING CODE 8011-01-P
