Self-Regulatory Organizations; Proposed Rule Changes:
Federal Register: November 15, 2010 (Volume 75, Number 219)
Notices
Page 69729-69730
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
DOCID:fr15no10-128
SECURITIES AND EXCHANGE COMMISSION
Release No. 34-63272; File No. SR-NYSEArca-2010-96
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend Arca
Equities Rule 7.31(f) To Modify the Functionality of Tracking Orders
November 8, 2010.
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 29, 2010, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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.
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Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend NYSE Arca Equities Rule 7.31(f) to modify the functionality of Tracking Orders. 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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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.
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Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change 1. Purpose
The Exchange proposes to amend NYSE Arca Equities Rule 7.31(f) to modify the functionality of Tracking Orders.
A Tracking Order is an undisplayed, priced round lot order that is eligible for execution in the Tracking Order Process \4\ against orders equal to or less than the aggregate size of Tracking Order interest available at that price. Presently, if a Tracking Order is executed but not exhausted, the remaining portion of the order is cancelled, without routing the order to another market center or market participant. An
ETP Holder that wishes to maintain its Tracking Order on the Exchange after partial execution must re-enter another Tracking Order.
\4\ See NYSE Arca Equities Rule 7.37 (Order Execution). The
Tracking Order Process is available during Core Trading Hours only, during which orders may be matched and executed in the Tracking
Order Process as follows: If an order has not been executed in its entirety pursuant to the Directed Order, Display Order or Working
Order processes, the NYSE Arca Marketplace shall match and execute any remaining part of the order in the Tracking Order Process in price/time priority, except that (1) any portion of an order received from another market center or market participant shall be cancelled immediately, and (2) an incoming ISO order shall not interact with the Tracking Order Process.
The Exchange proposes to modify the functionality of Tracking
Orders to eliminate the current cancellation feature. Specifically, the
Exchange proposes that, upon partial execution of a Tracking Order, the
Tracking Order would not be cancelled, but rather the remaining portion of the order would repost in the Tracking Order Process with a new time priority. The reposted Tracking Order would remain available for execution within the Tracking Order Process until either the total posted size is exhausted or the Tracking Order is
Page 69730
cancelled by the submitting ETP Holder. Each execution and subsequent reposting prior to exhaustion or cancellation would result in a new time priority.
The Exchange believes the elimination of the Tracking Order's current cancellation feature would benefit Exchange ETP Holders and customers by maintaining available liquidity in the Tracking Order
Process, thereby increasing the likelihood that Tracking Orders would interact with contra-side liquidity and receive an execution. The proposed amendment would also increase ETP Holder efficiency with respect to time and messaging resources by eliminating the need to re- enter the balance of partially executed Tracking Orders. 2. Statutory Basis
The Exchange believes that its proposal is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ``Act''),\5\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\6\ in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, 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. Specifically, the Exchange believes that the proposed change would maintain available liquidity in the Tracking Order Process while also increasing ETP
Holder efficiency with respect to time and messaging resources by eliminating the need to re-enter the balance of partially executed
Tracking Orders.
\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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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.
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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.
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Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change 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 a self-regulatory organization to provide the Commission with 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 fulfilled this requirement.
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend 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.
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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-2010-96 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEArca-2010-96. 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,\9\ 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 Web site viewing and printing 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 the 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-NYSEArca-2010-96 and should be submitted on or before
December 6, 2010.
\9\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\
\10\ 17 CFR 200.30-3(a)(12).
Florence E. Harmon,
Deputy Secretary.
FR Doc. 2010-28690 Filed 11-12-10; 8:45 am
BILLING CODE 8011-01-P
