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SECURITIES AND EXCHANGE COMMISSION

Securities and Exchange Commission

DOCUMENT ID: [Release No. 34-58899; File No. SR-NYSEArca-2008-116]

NOTICE: NOTICES

ACTION: Self-Regulatory Organizations; Proposed Rule Changes:

SUBJECT CATEGORY: Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by NYSE Arca, Inc. Amending Exchange Rule 6.39--Securities Accounts of Market Makers

DOCUMENT SUMMARY: November 5, 2008.

Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b4 thereunder,\3\ notice is hereby given that, on November 3, 2008, NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'') 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 selfregulatory 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 240.19b4.
I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange proposes to amend Exchange Rule 6.39Securities Accounts of Market Makers. The text of the proposed rule change is attached as Exhibit 5, is available on the Exchange's Web site at www.nyse.com, at the Exchange's principal office and at the Commission's Public Reference Room.
II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

In its filing with the Commission, the selfregulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change

1. Purpose

The purpose of this filing is to amend Rule 6.39 by modifying the terms under which a clearing firm reports trade information to the Exchange on behalf of a Market Maker.

Presently, with respect to transactions to be cleared into all accounts carried for Market Makers, each clearing firm shall, on the business day following order entry date report to the Exchange every executed order entered by the Market Maker for the purchase or sale of a security underlying options traded on the Exchange, as well as opening and closing positions in all such securities held in each account.

The Exchange does, on occasion, find the need to review Market Maker order records in conjunction with an investigation, inquiries regarding a specific trade, or a routine examination. However, since this is not information that the Exchange typically uses on a daily basis, there is no need for the Exchange to collect such information, on a daily basis. Requiring this information to be reported on a daily basis, instead of ``upon request'' creates an unnecessary burden on Market Makers, clearing firms and the Exchange alike.

The Exchange hereby proposes to amend Rule 6.39 by removing the obligation for a clearing firm to report such trades on a daily basis, and instead require the firms to report such trades only upon request of the Exchange. Supplying the Exchange with trade information, when requested instead of on a daily basis, is consistent with the requirements at both the International Securities Exchange (``ISE'') \4\ and the Boston Options Exchange (``BOX'').\5\
\4\ See ISE Rule 807(b)Reports of Orders.
\5\ See BOX Trading Rules Chapter VI Sec. 7(b)Reports of Orders.

2. Statutory Basis

This rule change is designed merely to create a more efficient mechanism for clearing firms to report market maker trade information to the Exchange. NYSE Arca believes that the proposed rule change is consistent with Section 6(b) of the Act \6\ in general, and furthers the objectives of Section 6(b)(5) of the Act \7\ in particular, because it is
[[Page 67244]]
designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system.
\6\ 15 U.S.C. 78f (b).
\7\ 15 U.S.C. 78f (b)(5).
B. SelfRegulatory 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. SelfRegulatory 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

Pursuant to Section 19(b)(3)(A) \8\ of the Act and Rule 19b4(f)(6) \9\ thereunder, NYSE Arca has designated this proposed rule change as one that does not:
\8\ 15 U.S.C. Sec. 78s(b)(3)(A).
\9\ 17 CRF 240.19b4(f)(6).
(i) Significantly affect the protection of investors or the public interest;
(ii) Impose any significant burden on competition; and
(iii) 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.

The Exchange provided the Commission with written notice of its intent to file this proposed rule change at least five business days prior to the date of the filing. 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 email to rulecomments@sec.gov. Please include File Number SRNYSEArca2008116 on the subject line.
    Paper Comments
  • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 205491090. All submissions should refer to File Number SRNYSEArca2008116. This file number should be included on the subject line if email 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 Section, 100 F Street, NE., Washington, DC 205491090. Copies of the filing will also be available for inspection and copying at NYSE Arca's principal office and on its Internet Web site at http://www.nyse.com. 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 SRNYSEArca2008116 and should be submitted on or before December 4, 2008.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\
    \10\ 17 CFR 200.303(a)(12).
    Florence E. Harmon,
    Acting Secretary.
    [FR Doc. E826885 Filed 111208; 8:45 am]
    BILLING CODE 801101P

    SUMMARY: NYSE Arca, Inc.,


    DOCUMENT BODY 2: November 5, 2008.

    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act'') \2\ and Rule 19b4 thereunder,\3\ notice is hereby given that, on November 3, 2008, NYSE Arca, Inc. (``NYSE Arca'' or the ``Exchange'') 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 selfregulatory 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 240.19b4.
    I. SelfRegulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

    The Exchange proposes to amend Exchange Rule 6.39Securities Accounts of Market Makers. The text of the proposed rule change is attached as Exhibit 5, is available on the Exchange's Web site at www.nyse.com, at the Exchange's principal office and at the Commission's Public Reference Room.
    II. SelfRegulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the selfregulatory 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. SelfRegulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change

    1. Purpose

    The purpose of this filing is to amend Rule 6.39 by modifying the terms under which a clearing firm reports trade information to the Exchange on behalf of a Market Maker.

    Presently, with respect to transactions to be cleared into all accounts carried for Market Makers, each clearing firm shall, on the business day following order entry date report to the Exchange every executed order entered by the Market Maker for the purchase or sale of a security underlying options traded on the Exchange, as well as opening and closing positions in all such securities held in each account.

    The Exchange does, on occasion, find the need to review Market Maker order records in conjunction with an investigation, inquiries regarding a specific trade, or a routine examination. However, since this is not information that the Exchange typically uses on a daily basis, there is no need for the Exchange to collect such information, on a daily basis. Requiring this information to be reported on a daily basis, instead of ``upon request'' creates an unnecessary burden on Market Makers, clearing firms and the Exchange alike.

    The Exchange hereby proposes to amend Rule 6.39 by removing the obligation for a clearing firm to report such trades on a daily basis, and instead require the firms to report such trades only upon request of the Exchange. Supplying the Exchange with trade information, when requested instead of on a daily basis, is consistent with the requirements at both the International Securities Exchange (``ISE'') \4\ and the Boston Options Exchange (``BOX'').\5\
    \4\ See ISE Rule 807(b)Reports of Orders.
    \5\ See BOX Trading Rules Chapter VI Sec. 7(b)Reports of Orders.

    2. Statutory Basis

    This rule change is designed merely to create a more efficient mechanism for clearing firms to report market maker trade information to the Exchange. NYSE Arca believes that the proposed rule change is consistent with Section 6(b) of the Act \6\ in general, and furthers the objectives of Section 6(b)(5) of the Act \7\ in particular, because it is
    [[Page 67244]]
    designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, and to remove impediments to and perfect the mechanism of a free and open market and a national market system.
    \6\ 15 U.S.C. 78f (b).
    \7\ 15 U.S.C. 78f (b)(5).
    B. SelfRegulatory 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. SelfRegulatory 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

    Pursuant to Section 19(b)(3)(A) \8\ of the Act and Rule 19b4(f)(6) \9\ thereunder, NYSE Arca has designated this proposed rule change as one that does not:
    \8\ 15 U.S.C. Sec. 78s(b)(3)(A).
    \9\ 17 CRF 240.19b4(f)(6).
    (i) Significantly affect the protection of investors or the public interest;
    (ii) Impose any significant burden on competition; and
    (iii) 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.

    The Exchange provided the Commission with written notice of its intent to file this proposed rule change at least five business days prior to the date of the filing. 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 email to rulecomments@sec.gov. Please include File Number SRNYSEArca2008116 on the subject line.
    Paper Comments
  • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 205491090. All submissions should refer to File Number SRNYSEArca2008116. This file number should be included on the subject line if email 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 Section, 100 F Street, NE., Washington, DC 205491090. Copies of the filing will also be available for inspection and copying at NYSE Arca's principal office and on its Internet Web site at http://www.nyse.com. 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 SRNYSEArca2008116 and should be submitted on or before December 4, 2008.

    For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\10\
    \10\ 17 CFR 200.303(a)(12).
    Florence E. Harmon,
    Acting Secretary.
    [FR Doc. E826885 Filed 111208; 8:45 am]
    BILLING CODE 801101P


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