[Federal Register Volume 79, Number 165 (Tuesday, August 26, 2014)]
[Notices]
[Pages 50956-50958]
[FR Doc No: 2014-20211]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-72885; File No. SR-MIAX-2014-44]

Self-Regulatory Organizations; Miami International Securities
Exchange LLC; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Exchange Rule 404 Regarding the Short
Term Option Series Program

August 20, 2014.
    Pursuant to the provisions of Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that, on August 15, 2014, Miami International
Securities Exchange LLC (``MIAX'' or ``Exchange'') filed with the
Securities and Exchange Commission (``Commission'') a proposed rule
change as described in Items I and II below, which Items have been
prepared by the Exchange. 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\ 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

    The Exchange is filing a proposal to amend its rules governing the
Short Term Option Series Program to introduce finer strike price
intervals for standard expiration contracts in option classes that also
have short term options listed on them (``Related non-Short Term
Options'').
    The text of the proposed rule change is available on the Exchange's
Web site at http://www.miaxoptions.com/filter/wotitle/rule_filing, at
MIAX's principal office, and at the Commission's Public Reference Room.

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 Exchange 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 these 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 aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing to amend its rules governing the Short
Term Option Series (``STOS'') Program to introduce finer strike price
intervals for standard expiration contracts in Related non-Short Term
Options. In particular, the Exchange is proposing to amend its rules to
permit the listing of Related non-Short Term Options during the month
prior to expiration in the same strike price intervals as allowed for
STOS.
    Under MIAX's current rules, the Exchange may list STOS in up to
fifty option classes,\3\ in addition to option classes that are
selected by other securities exchanges that employ a similar program
under their respective rules. For each of these option classes, the
Exchange may list five STOS expiration dates at any given time, not
counting monthly or quarterly expirations.\4\ Specifically, on any
Thursday or Friday that is a business day, the Exchange may list STOS
in designated option classes that expire at the close of business on
each of the next five Fridays that are business days and are not
Fridays in which monthly or quarterly options expire.\5\ These STOS,
which can be several weeks or more from expiration, may be listed in
strike price intervals of $0.50, $1, or $2.50, with the finer strike
price intervals being offered for lower priced securities, and for
options that trade in the Exchange's dollar strike program.\6\ More
specifically, the Exchange may list STOS in $0.50 intervals for strike
prices less than $75, or for option classes that trade in one dollar
increments in the Related non-Short Term Option, $1 intervals for
strike prices that are between $75 and $150, and $2.50 intervals for
strike prices above $150.\7\
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    \3\ See Exchange Rule 404.02(a).
    \4\ See Exchange Rule 404.02.
    \5\ Id.
    \6\ See Exchange Rule 404.02(e).
    \7\ Id.
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    The Exchange may also list standard expiration contracts, which are
listed in accordance with the regular monthly expiration cycle. These
standard expiration contracts must be listed in wider strike price
intervals of $2.50, $5, or $10,\8\ though the Exchange also operates
strike price programs, such as the dollar strike program mentioned
above,\9\ that allow the Exchange to list a limited number of option
classes in finer strike price intervals. In general, the Exchange must
list standard expiration contracts in $2.50 intervals for strike prices
of $25 or less, $5 intervals for strike prices greater than $25, and
$10 intervals for strike prices greater than $200.\10\ During the week
prior to expiration only, the Exchange is permitted to list Related
non-Short Term Option contracts in the narrower strike price intervals
available for STOS.\11\ Since this exception to the standard strike
price interval is available only during the week prior to expiration,
however, standard expiration contracts regularly trade at significantly
wider intervals than their STOS counterparts, as illustrated below.
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    \8\ See Exchange Rule 404(d).
    \9\ See Exchange Rule 404.01(a), which allows MIAX to designate
up to 150 option classes on individual classes on individual stocks
to be traded in $1 strike price intervals where the strike price is
between $50 and $1. See also Exchange Rule 404.04 ($0.50 Strike
Program).
    \10\ See Exchange Rule 404(d).
    \11\ See Exchange Rule 404.02(e).
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    For example, assume ABC is trading at $56.54 and the monthly
expiration contract is three weeks to expiration. Assume also that MIAX
has listed all available STOS expirations and thus has STOS listed on
ABC for weeks one, two, four, five, and six. Each of the five weekly
ABC expiration dates can be listed with strike prices in $0.50
intervals, including, for example, the $56.50 at-the-money strike.
Because the monthly expiration contract has three weeks to expiration,
however, the near-the-money strikes must be listed in $5 intervals
unless those options are eligible for one of the Exchange's other
strike price programs. In this instance, that would mean that investors
would be limited to choosing, for example, between $55 and $60 strike
prices instead of the $56.50 at-the-money strike available for STOS.
This is the case even though contracts on the same option class that
expire both several weeks before and several weeks after the monthly
expiration are eligible for finer strike price intervals. Under the
proposed rule change, the Exchange would be permitted to list the
Related non-Short Term Option on ABC, which is less than a month to
expiration, in the same strike price intervals as allowed for STOS.
Thus, the Exchange would be able to list, and investors would be able
to trade, all expirations described above with the same uniform $0.50
strike price interval.

    As proposed, the Exchange would be permitted to begin listing the
monthly expiration contract in these narrower intervals at any time
during the month prior to expiration, which begins on the first trading
day after the prior month's expiration date, subject to the provisions
of other Exchange rules. For example, since the April 2014 monthly
option expired on Saturday, April 19, the proposed rule change would
allow the Exchange to list the May 2014 monthly option in STOS
intervals starting Monday, April 21.
    MIAX believes that introducing consistent strike price intervals
for STOS and Related non-Short Term Options during the month prior to
expiration will benefit investors by giving them more flexibility to
closely tailor their investment decisions. The Exchange also believes
that the proposed rule change will provide the investing public and
other market participants with additional opportunities to hedge their
investments, thus allowing these investors to better manage their risk
exposure.
 2. Statutory Basis
    The Exchange believes that its proposal is consistent with the
Securities Exchange Act of 1934 (the ``Act'') \12\ and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act. Specifically, the Exchange
believes the proposed rule change is consistent with the Section
6(b)(5) \13\ requirements that the rules of an exchange be 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.
Additionally, the Exchange believes the proposed rule change is
consistent with the Section 6(b)(5) \14\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
    \14\ Id.
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    As noted above, standard expiration options currently trade in
wider intervals than their STOS counterparts, except during the week
prior to expiration. This creates a situation where contracts on the
same option class that expire both several weeks before and several
weeks after the standard expiration are eligible to trade in strike
price intervals that the standard expiration contract is not. There is
continuing strong customer demand to have the ability to execute
hedging and trading strategies in the finer strike price intervals
available in STOS, and the Exchange believes that the proposed rule
change will increase market efficiency by harmonizing strike price
intervals for contracts that are close to expiration, whether those
contracts happen to be listed pursuant to weekly or monthly expiration
cycles.
    The Exchange notes that, in addition to listing standard expiration
contracts in STOS intervals during the expiration week, it already
operates several programs that allow for strike price intervals for
standard expiration contracts that range from $0.50 to $2.50.\15\ The
Exchange believes that each of these programs has been successful but
notes that limitations on the number of option classes that may be
selected for each of these programs means that many standard expiration
contracts must still be listed in wider intervals than their STOS
counterparts. For example, the $0.50 strike price program, which offers
the narrowest strike price interval, only permits the Exchange to
designate up to 20 option classes to trade in $0.50 intervals in
addition to option classes selected by other exchanges that employ a
similar program.\16\ Thus, the proposed rules are necessary to fill the
gap between strike price intervals allowed for STOS and Related non-
Short Term Options. The Exchange believes that the proposed rule
change, like the other strike price programs currently offered by the
Exchange, will benefit investors by giving them more flexibility to
closely tailor their investment and hedging decisions.
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    \15\ See supra note 9.
    \16\ See Exchange Rule 404.04.
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    With regard to the impact of this proposal on system capacity, the
Exchange has analyzed its capacity and represents that it and the
Options Price Reporting Authority (``OPRA'') have the necessary systems
capacity to handle any potential additional traffic associated with the
proposed rule change. The Exchange believes that its members will not
have capacity issues as a result of this proposal. The Exchange also
represents that it does not believe that this expansion will cause
fragmentation of liquidity.

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 not necessary or appropriate in
furtherance of the purposes of the Act. To the contrary, the Exchange
believes that the proposed rule change will result in additional
investment options and opportunities to achieve the investment
objectives of market participants seeking efficient trading and hedging
vehicles, to the benefit of investors, market participants, and the
marketplace in general. Specifically, the Exchange believes that
investors will benefit from the availability of strike price intervals
in standard expiration contracts that match the intervals currently
permitted for STOS with a similar time to expiration, and from the
clarification regarding the listing of additional series during the
week of expiration.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the proposed rule change does not (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, the proposed rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act \17\ and Rule 19b-4(f)(6)
thereunder.\18\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b-
4(f)(6)(iii), the Exchange provided the Commission with written
notice of its intent to file the proposed rule change, along with a
brief description and the 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.
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    The Exchange has asked the Commission to waive the 30-day operative
delay so that the proposal may become operative immediately upon
filing. The Exchange stated that waiver of this requirement would allow
the Exchange to compete with other exchanges proposing similar changes
without putting the Exchange at a competitive disadvantage. The
Exchange also stated that the proposal would foster competition by
allowing finer strike price intervals for standard expiration contracts
in Related non-Short Term Options to occur at more than one exchange.
For these reasons, the Commission believes that the proposed rule
change presents no novel

issues and that waiver of the 30-day operative delay is consistent with
the protection of investors and the public interest; and will allow the
Exchange to remain competitive with other exchanges. Therefore, the
Commission designates the proposed rule change to be operative upon
filing.\19\
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    \19\ For purposes only of waiving the 30-day operative delay,
the Commission has also considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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    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. If the Commission
takes such action, the Commission shall institute proceedings to
determine whether the proposed rule should be approved or 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 email to<EMAIL_ADDRESS>Please include
File Number SR-MIAX-2014-44 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-MIAX-2014-44. 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 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-MIAX-2014-44 and should be
submitted on or before September 16, 2014.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-20211 Filed 8-25-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 194 (Thursday, October 6, 2011)]
[Proposed Rules]
[Pages 62002-62004]
[FR Doc No: 2011-25879]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2011-0761; FRL-9475-9]

Revisions to the California State Implementation Plan

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the San Joaquin
Valley Unified Air Pollution Control District (SJVUAPCD) portion of the
California State Implementation Plan (SIP). These revisions concern
volatile organic compound (VOC) emissions from Motor Vehicle and Mobile
Equipment Coating Operations and Adhesives and Sealants. We are
proposing to approve local rules to regulate these emission sources
under the Clean Air Act as amended in 1990 (CAA or the Act). We are
taking comments on this proposal and plan to follow with a final
action.

DATES: Any comments must arrive by November 7, 2011.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2011-0356, by one of the following methods:
    1. Federal eRulemaking Portal: www.regulations.gov. Follow the on-
line instructions.
    2. E-mail<EMAIL_ADDRESS>    3. Mail or deliver: Andrew Steckel (Air-4), U.S. Environmental
Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA
94105-3901.
    Instructions: All comments will be included in the public docket
without change and may be made available online at http://www.regulations.gov, including any personal information provided,
unless the comment includes Confidential Business Information (CBI) or
other information whose disclosure is restricted by statute.
Information that you consider CBI or otherwise protected should be
clearly identified as such and should not be submitted through http://www.regulations.gov or e-mail. http://www.regulations.gov is an
``anonymous access'' system, and EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send e-mail directly to EPA, your e-mail address will be
automatically captured and included as part of the public comment. If
EPA cannot read your comment due to technical difficulties and cannot
contact you for clarification, EPA may not be able to consider your
comment.
    Docket: The docket for this action is available electronically at
http://www.regulations.gov and in hard copy at EPA Region IX, 75
Hawthorne Street, San Francisco, California. While all documents in the
docket are listed at http://www.regulations.gov, some information may
be publicly available only at the hard copy location (e.g., copyrighted
material), and some may not be publicly available in either location
(e.g., CBI). To inspect the hard copy materials, please schedule an
appointment during normal business hours with the contact listed in the
FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Adrianne Borgia, EPA Region IX, (415)
972-3576<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, we, us and our
refer to EPA.

Table of Contents

I. The State's Submittal
    A. What rules did the State submit?
    B. Are there other versions of these rules?
    C. What is the purpose of the submitted rules?
II. EPA's Evaluation and Action
    How is EPA evaluating the rules?
    A. Do the rules meet the evaluation criteria?
    B. EPA Recommendations to Further Improve the Rules
    C. Public Comment and Final Action
III. Statutory and Executive Order Reviews

I. The State's Submittal

A. What rules did the State submit?

    Table 1 lists the rules addressed by this proposal with the dates
that they were adopted by local air agencies and submitted by the
California Air Resources Board (CARB).

                                            Table 1--Submitted Rules
----------------------------------------------------------------------------------------------------------------
               Local                      Rule                Rule title              Amended        Submitted
----------------------------------------------------------------------------------------------------------------
SJVUAPCD...........................            4612  Motor Vehicle and Mobile           10/21/10          4/5/11
                                                      Equipment Coating
                                                      Operations.
SJVUAPCD...........................            4653  Adhesives and Sealants.....         9/16/10          4/5/11
----------------------------------------------------------------------------------------------------------------

    On 5/6/2011, these rule submittals were found to meet the
completeness criteria in 40 CFR Part 51 Appendix V, which must be met
before formal EPA review.

B. Are there other versions of these rules?

    We approved a version of SJVUAPCD Rule 4612 into the SIP on 1/19/
2010. We approved a version of SJVUAPCD Rule 4653 into the SIP on 10/
15/2009.

C. What is the purpose of the submitted rules?

    VOCs help produce ground-level ozone and smog, which harm human
health and the environment. Section 110(a) of the CAA requires states
to submit regulations that control VOC emissions. In general, these
rules control the VOC emissions by limiting the VOCs of commercial
coatings and solvents.
    SJVUAPCD Rule 4612 is revised to implement RACT requirements as
recommended in the California Air Resources Board's (CARB) Suggested
Control Measure (SCM) titled, ``Suggested Control Measure for
Automotive Coatings.''
    SJVUAPCD Rule 4653 is revised to implement RACT requirements as
recommended in the CTG, ``Control Techniques Guidelines for
Miscellaneous Industrial Adhesives'', EPA-453/R-08-005 and CARB's RACT/
BARCT guidance titled, ``Determination of Reasonably Available Control
Technology and Best Available Retrofit Control Technology for Adhesives
and Sealants.''
    SJVUAPCD's 2009 RACT SIP Demonstration (April 16, 2009) was used to
help evaluate the RACT requirements for both rules.
    EPA's technical support documents (TSDs) have more information
about these rules.

II. EPA's Evaluation and Action

A. How is EPA evaluating the rules?

    Generally, SIP rules must be enforceable (see section 110(a) of the
Act), must require Reasonably Available Control Technology (RACT) for
each category of sources covered by a Control Techniques Guidelines
(CTG) document as well as each major source in nonattainment areas (see
section 182(a)(2)), and must not relax existing requirements (see
sections 110(l) and 193). The SJVUAPCD regulates an ozone nonattainment
area (see 40 CFR part 81), so Rules 4602 and 4603 must fulfill RACT.
    Guidance and policy documents that we used to help evaluate
enforceability and RACT requirements consistently include the
following:
    1. Portions of the proposed post-1987 ozone and carbon monoxide
policy that concern RACT, 52 FR 45044, November 24, 1987.

    2. Issues Relating to VOC Regulation Cutpoints, Deficiencies, and
Deviations, EPA, May 25, 1988 (the Bluebook).
    3. Guidance Document for Correcting Common VOC & Other Rule
Deficiencies, EPA Region 9, August 21, 2001 (the Little Bluebook).
    4. CARB's Suggested Control Measure (SCM) titled, ``Suggested
Control Measure for Automotive Coatings.'' October 20, 2005.
    5. Control Techniques Guideline (CTG) for ``Miscellaneous
Industrial Adhesives'', EPA-453/R-08-005, September 2008.
    6. CARB's RACT/Best Available Retrofit Control Technology (BARCT)
guidance titled, ``Determination of Reasonably Available Control
Technology and Best Available Retrofit Control Technology for Adhesives
and Sealants,'' December 1998.

B. Do the rules meet the evaluation criteria?

    We believe these rules are consistent with the relevant policy and
guidance regarding enforceability, RACT, and SIP relaxations. The TSDs
have more information on our evaluation.

C. EPA Recommendations to Further Improve the Rules

    The TSDs describe additional rule revisions that do not affect
EPA's current action but are recommended for the next time the local
agency modifies the rules.

D. Public Comment and Final Action

    Because EPA believes the submitted rules fulfill all relevant
requirements, we are proposing to fully approve them as described in
section 110(k)(3) of the Act. We will accept comments from the public
on this proposal for the next 30 days. Unless we receive convincing new
information during the comment period, we intend to publish a final
approval action that will incorporate these rules into the federally
enforceable SIP.

III. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve State
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this action merely approves State law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by State law. For that reason, this action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the Clean Air Act; and
     Does not provide EPA with the discretionary authority to
address disproportionate human health or environmental effects with
practical, appropriate, and legally permissible methods under Executive
Order 12898 (59 FR 7629, February 16, 1994).
    In addition, these rules do not have tribal implications as
specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the State, and EPA notes that it will not impose substantial direct
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental
relations, Ozone, Reporting and recordkeeping requirements, Volatile
organic compound.

    Authority: 42 U.S.C. 7401 et seq.

    Dated: September 28, 2011.
Keith Takata,
Acting Regional Administrator, Region IX.
[FR Doc. 2011-25879 Filed 10-5-11; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: June 25, 2009 (Volume 74, Number 121)]
[Notices]
[Page 30337-30340]
[DOCID:fr25jn09-85]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60138; File No. SR-NYSE-2009-45]

 Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC
Amending NYSE Rule 124 To Clarify the Pricing Methodology for the Odd-
Lot Portion of a Part of a Round-Lot Order; Clarify the Systems Capable
of Accepting PRL Orders; and Clarify the Systems Capable of Accepting a
Good 'Til Cancelled Order During the Implementation of Exchange System
Enhancements

June 18, 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 8, 2009, New York Stock Exchange LLC (``NYSE'' 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. NYSE filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \4\ and Rule 19b-4(f)(6) thereunder,\5\ which
renders it effective upon filing with the Commission. 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.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to: (i) Amend NYSE Rule 124 (Odd-Lot Orders)
to clarify the pricing methodology for the odd-lot portion of a part of
a round-lot (``PRL'') order; (ii) clarify the systems capable of
accepting PRL orders; and (iii) clarify the systems capable of
accepting a Good 'Til Cancelled Order (``GTC'') during the
implementation of Exchange system enhancements. 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
    New York Stock Exchange LLC (``NYSE'' or the ``Exchange'') proposes
to amend Exchange Rule 124 (Odd-Lot Orders) to clarify the: (i) Pricing
methodology for the odd-lot portion of a part of a round-lot (``PRL'')
\6\ order; and (ii) systems capable of accepting PRL orders during the
implementation of Exchange system enhancements.
---------------------------------------------------------------------------

    \6\ PRL orders are for a size within the standard unit (round-
lot) of trading, which is 100 shares for most stocks, but contains a
portion that is smaller than the standard unit of trading, e.g. 199
shares. It should be noted that for certain securities trading on
the NYSE the standard unit of trading is 10 shares.
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Background
    Currently, odd-lot orders on the Exchange are processed and
executed systemically by an Exchange system designated solely for odd-
lot orders (the ``Odd-lot System'').\7\ The Odd-lot System executes all
odd-lot orders against the Designated Marker Maker (``DMM'') as the
contra party.\8\
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    \7\ See NYSE Rule 124(a).
    \8\ Id. Odd-lot orders are in effect netted against one another
and executed; however, since the DMM is buying the same amount that
he or she is selling, there is no economic consequence to the DMM in
this type of pairing-off of orders. Any imbalance of buy or sell
odd-lot market orders are executed against the DMM, up to the size
of the round-lot transaction or the bid/offer size which ever is
less.
---------------------------------------------------------------------------

    Pursuant to NYSE Rule 124(c), after odd-lot market orders and
marketable odd-lot limit orders are received by the Odd-lot System,
they are automatically executed at the price of the next round-lot
transaction in the subject security on the Exchange. Specifically,
marketable odd-lot orders and marketable odd-lot limit orders are
executed in time priority of receipt at the price of the next round-lot
transaction, pursuant to the netting provision described in footnote 8.
The imbalance of marketable odd-lot orders that do not receive an
execution as a result of the netting provision are executed in time
priority of receipt at the price of the National Best Bid or Offer
(``NBBO''), subject to a volume limitation.\9\ Any imbalances of odd-
lot limit orders that were non-marketable upon receipt that
subsequently become marketable receive an execution at their limit
price.\10\ Marketable odd-lot orders, which would otherwise receive a
partial execution pursuant to the volume limitation, are executed in
full.\11\
---------------------------------------------------------------------------

    \9\ The volume limitation in section (c) of the rule is defined
as the lesser of either the number of shares in the last round-lot
transaction or the number of shares available at the national best
bid (in the case of an odd-lot order to sell), or the national best
offer (in the case of an odd-lot order to buy).
    \10\ Pursuant to NYSE Rule 124(d) odd-lot limit orders that are
non-marketable upon receipt that become marketable are eligible to
be netted and executed at the price of the next round-lot
transaction. If an odd-lot limit order does not receive an execution
pursuant to the netting provision, then the order is eligible to be
executed, at its limit price, subject to the volume limitation of
section (c) of the rule.
    \11\ As with marketable odd-lot orders, non-marketable odd-lot
limit orders which would otherwise receive a partial execution will
be executed in full. A non-marketable odd-lot limit order that
becomes marketable, that remains unexecuted within 30 seconds of
receipt will be executed, in time priority of receipt, except that
the order will be executed at its limit price.
---------------------------------------------------------------------------

    Any marketable odd-lot orders that do not receive an execution
because of the volume limitation are executed, in time priority of
receipt at the price of the next round-lot transaction, following
pricing and execution procedures described above. Marketable odd-lot
orders (including odd-lot limit orders that were non-marketable upon
receipt and subsequently become marketable) that remain unexecuted
within 30 seconds of receipt will be executed, in time priority of
receipt, at the price of the NBBO (or at its limit price if the order
is a non-marketable odd-lot limit order upon receipt that has become
marketable). These orders are also subject to the volume limitation.
    Marketable odd-lot orders and non-marketable odd-lot limit orders
that have become marketable and remain unexecuted prior to the close of
trading shall be executed, in time priority of receipt at the price of
the closing transaction, subject to the netting provision and a volume
restriction which is not to exceed the size of the closing transaction.

PRL Pricing
    The Exchange believes that the most appropriate way to execute odd-
lot orders is to represent them in the round-lot auction market where
they would interact with all other market interest and be priced in
accordance with supply and demand dynamics. The Exchange is committed
to the goal of integrating odd-lots into the round-lot market and
eliminating the separate handling of odd-lot and PRL transactions.
However, until the requisite technology changes can be completed, the
Exchange is proposing these modifications in order to further
streamline the handling performed by its current systems.
    The Exchange amended the pricing methodology of NYSE Rule 124 as
interim measures to accommodate the pricing and execution of odd-lot
orders in a manner based on the prevailing market.\12\ Most recently,
significant upgrades to the Exchange's technology \13\ made it possible
for the Exchange systems that process orders sent to Display Book, the
Exchange matching engine, to price odd-lot orders sent to the post that
were consistent with the provisions NYSE Rule 124(c) and (d).
---------------------------------------------------------------------------

    \12\ See Securities Exchange Act Release No. 56551 (September
27, 2007), 72 FR 56415 (October 3, 2007) (SR-NYSE-2007-82); See also
Securities Exchange Act Release No. 49536 (April 7, 2004), 69 FR
19890, 19893 (April 14, 2004) (SR-NYSE-2003-37); Securities Exchange
Act Release No. 49745 (May 20, 2004), 69 FR 29998 (May, 26, 2004)
(SR-NYSE-2003-37).
    \13\ See Securities Exchange Act Release No. 58184 (July 17,
2008), 73 FR 42853 (July 23, 2008)(SR-NYSE-2008-46) (Key changes in
this filing served to enhance the Exchange technology).
---------------------------------------------------------------------------

    On March 11, 2009, the Exchange filed with the Commission to amend
NYSE Rule 124.40 to allow the odd-lot portion of PRLs to be executed in
the Odd-lot System pursuant to the pricing provisions of NYSE Rule
124.\14\ As modified, the odd-lot portion of the PRL retains the time
stamp of its original entry as a PRL and is sequenced for execution
based on the initial entry time of the PRL. Once all round lot
components of the PRL are fully executed, the odd-lot portion of the
order is executed at a price consistent with other odd-lot orders
subject to the provisions of NYSE Rule 124(c) and (d).
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 59613 (March 20,
2009), 74 FR 13486 (March 27, 2009) (SR-NYSE-2009-27).
---------------------------------------------------------------------------

    Example: A marketable order to sell 399 shares of security XYZ is
received by Exchange systems at 12:00:00. The 99 share portion of the
order is eligible for execution only after the 300 share portion of the
PRL order is sold. See table below.

----------------------------------------------------------------------------------------------------------------
                                 Number of   Price of
       Time of execution          shares     execution                      Customer receives
----------------------------------------------------------------------------------------------------------------
12:00:01......................         100      $30.22  Report of Execution 100 shares at a price of $30.22.
12:01:00......................         100      $30.21  Report of Execution 100 shares at a price of $30.21.
12:01:47......................         100      $30.22  Report of Execution 100 shares at a price of $30.22.
12:01:48......................          99        \15\  Report of Execution 99 shares at a price of $30.23.
                                                $30.23
----------------------------------------------------------------------------------------------------------------

    In the filing to amend the execution of PRL orders, the Exchange
explained that the system enhancements to Display Book would be
progressively implemented on a security by security basis. On March 16,
2009, the Exchange commenced migration of symbols to the enhanced
systems. This migration is ongoing and PRL orders submitted to the
Display Book in those migrated symbols are executed as described above.
The list of securities that are operating on the enhanced systems are
available on the Exchange's Web site at: http://www.nyse.com/
attachment/SDBK_SecurityRolloutList.xls.
---------------------------------------------------------------------------

    \15\ This example assumes that the odd-lot portion of the PRL
had priority of execution in the Odd-lot system because its original
order entry time was 12:00:00.
---------------------------------------------------------------------------

    Systems that process orders sent to the Exchange to be executed by
a Floor broker, collectively called Exchange Floor broker systems, are
also being upgraded to provide improved functionality. The Exchange
Floor broker systems can be divided into two categories--booth systems
(Broker Booth Support Systems or ``BBSS'') and hand-held devices. As of
yet, neither system has been provided with the newer PRL pricing
functionality. As a result, PRLs sent to BBSS are processed pursuant to
the prior provisions of NYSE Rule 124, Supplemental Material .40, which
requires the odd-lot portion of a PRL to be executed only where no
round lot portion thereof is cancelled and at the same price of the
last round lot execution that would complete the round lot portion of
the PRL.
    Example: An order to sell 399 shares of security XYZ is received by
Exchange Floor broker systems at 12:00:00. The 99 share portion of the
order is eligible for execution only after the 300 share portion of the
PRL order is sold. See table below.

----------------------------------------------------------------------------------------------------------------
                                 Number of   Price of
       Time of execution          shares     execution                      Customer receives
----------------------------------------------------------------------------------------------------------------
12:00:01......................         100      $30.22  Report of Execution 100 shares at a price of $30.22.
12:01:00......................         100      $30.21  Report of Execution 100 shares at a price of $30.22.
12:01:47......................         100      $30.22  Report of Execution 199 shares at a price of $30.22.
12:01:47......................          99      $30.22
----------------------------------------------------------------------------------------------------------------

    Until such time as the Exchange Floor broker systems can be
enhanced to execute PRL orders pursuant NYSE Rule 124(c) and (d), the
Exchange proposes to amend the provisions of NYSE Rule 124.40 to
provide that the odd-lot portion of PRL orders transmitted to a Floor
broker via the Floor broker booth system for execution will be executed
at

the same price of the last round lot execution that would complete the
round lot portion of the PRL
    The Exchange anticipates that the enhancements to the Exchange
Floor broker systems will be completed no later than the end of the
fourth quarter of 2009.
Systems Capable of Accepting PRL and GTC Orders
    During the implementation of the Exchange Floor broker system
enhancements, any PRL orders and GTC orders sent to a Floor broker's
hand-held device will be rejected. Furthermore, GTC orders in symbols
that have been migrated to the enhanced systems noted above will not be
accepted in any broker system. PRL and GTC orders (in non-migrated
symbols) must be transmitted to BBSS where the customer seeks to
utilize a Floor broker's business expertise in the execution of such
orders. Once the full migration has been completed, GTC orders will not
be accepted by broker systems or broker hand-held devices and PRL
orders will not be accepted by broker hand-held devices. Therefore, the
Exchange proposes to amend NYSE Rule 13 (Definitions of Orders) to
state that GTC orders will not be accepted by broker hand-held devices
or broker systems. Similarly, the Exchange proposes to amend NYSE Rule
124.40 to state that PRL orders will not be accepted by broker hand-
held devices.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) \16\ 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 clarify and temporarily
modify the Exchange's pricing methodology for PRL orders to provide
customers the benefit of the Floor broker's business expertise while
the Exchange completes required system enhancements.
---------------------------------------------------------------------------

    \16\ 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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \17\ and Rule 19b-4(f)(6) thereunder.\18\
Because the foregoing proposed rule change: (1) Does not significantly
affect the protection of investors or the public interest; (2) impose
any significant burden on competition; and (3) by its terms does not
become operative for 30 days 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 \19\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\20\
---------------------------------------------------------------------------

    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) does not
normally become operative prior to 30 days after the date of
filing.\21\ However, Rule 19b-4(f)(6)(iii) permits the Commission to
designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing.
---------------------------------------------------------------------------

    \21\ See id. 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 satisfied this requirement.
---------------------------------------------------------------------------

    The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because the proposed rule change seeks to avoid investor confusion by
clarifying the systems capable of executing PRL and GTC orders and the
pricing methodology for such orders. Therefore, the Commission
designates the proposed rule change operative upon filing.\22\
---------------------------------------------------------------------------

    \22\ 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. 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 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<EMAIL_ADDRESS>. Please include
File Number SR-NYSE-2009-45 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-NYSE-2009-45. 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, 100 F Street, NE.,
Washington, DC 20549, on official business days between the hours of 1
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-NYSE-2009-45 and should be submitted on or before July 16,
2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
---------------------------------------------------------------------------

    \23\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-14956 Filed 6-24-09; 8:45 am]

BILLING CODE 8010-01-P


[Federal Register: February 9, 2010 (Volume 75, Number 26)]
[Notices]
[Page 6417]
[DOCID:fr09fe10-104]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request; Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.

Extension:
    Form F-X, OMB Control No. 3235-0379, SEC File No. 270-336.

    Notice is hereby given that, pursuant to the Paperwork Reduction
Act of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget this request for extension of the previously approved
collection of information discussed below.
    Form F-X (17 CFR 239.42) is used to appoint an agent for service of
process by Canadian issuers registering securities on Form F-7, F-8, F-
9 or F-10 under the Securities Act of 1933 (U.S.C. 77a et seq.), or
filing periodic reports on Form 40-F under the Exchange Act of 1934 (15
U.S.C. 78a et seq.). The information collected must be filed with the
Commission and is publicly available. We estimate that it takes
approximately 2 hours per response to prepare Form F-X and that the
information is filed by approximately 161 respondents for a total
annual reporting burden of 322 hours (2 hours per response x 161
responses).
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a
currently valid control number.
    Written comments regarding the above information should be directed
to the following persons: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503 or send an e-mail to: Shagufta_
<EMAIL_ADDRESS>and (ii) Charles Boucher, Director/CIO, Securities
and Exchange Commission, C/O Shirley Martinson, 6432 General Green Way,
Alexandria, VA 22312; or send an e-mail to<EMAIL_ADDRESS>
Comments must be submitted to OMB within 30 days of this notice.

    Dated: February 1, 2010.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2737 Filed 2-8-10; 8:45 am]
BILLING CODE 8011-01-P