[Federal Register: April 22, 2010 (Volume 75, Number 77)]
[Notices]
[Page 21071-21072]
[DOCID:fr22ap10-126]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61923; File No. SR-NYSE-2010-33]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend From May 30, 2010 Until June 30, 2010 the Final Date by Which
the Exchange Must Terminate Its Affiliation With NYFIX Securities
Corporation

April 15, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on April 14, 2010, 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, II,
and III below, which Items have been substantially 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\ 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 proposes to extend from May 30, 2010 until June 30,
2010 the final date by which it must terminate its affiliation with
NYFIX Securities Corporation (``NYFIX Securities''), a registered
broker-dealer subsidiary of NYFIX, Inc., (``NYFIX''). On November 30,
2009, NYFIX became an indirect wholly-owned subsidiary of the
Exchange's parent company, NYSE Euronext. There is no proposed rule
text.

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
    On November 9, 2009, the Commission approved a proposed rule change
by the Exchange in connection with the acquisition of NYFIX, a Delaware
corporation, by a wholly-owned subsidiary of NYSE Euronext, the
Exchange's parent company. The Commission's approving release granted
permission for the Exchange to be affiliated with two registered
broker-dealer subsidiaries of NYFIX for a period not to exceed six
months and subject to certain limitations and obligations.\3\ The two
subsidiaries were NYFIX Millennium L.L.C. (``NYFIX Millennium'') and
NYFIX Securities Corporation (``NYFIX Securities''). The NYFIX
acquisition closed on November 30, 2009, marking the beginning of the
Exchange's affiliation with NYFIX Millennium and NYFIX Securities,
which means that the final date by which the Exchange must terminate
its affiliation with these two broker-dealers is May 30, 2010.
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    \3\ Securities Exchange Act Release No. 60969 (November 9,
2009), 74 FR 59294 (November 17, 2009) (order approving File No. SR-
NYSE-2009-96, as modified by Amendment No. 2 thereto) (``NYFIX
Approval Order'').
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    The Exchange has already terminated its affiliation with NYFIX
Millennium and is in the process of terminating its affiliation with
NYFIX Securities. While the Exchange anticipates that the transaction
by which its affiliation with NYFIX Securities will be terminated
should close by May 30, the Exchange believes that some additional
flexibility with respect to timing is desirable in the event that
issues unexpectedly arise in connection with the aforementioned
transaction. Consequently, the Exchange is proposing a short extension
of the date by which it must end its affiliation with NYFIX Securities
from May 30, 2010 to June 30, 2010. The Exchange believes that this
one-month extension will allow sufficient time to deal with any
unexpected delays that might occur in connection with the transaction
that is expected to terminate the Exchange's affiliation with NYFIX
Securities.
    In the NYFIX Approval Order, as a requirement for its approval of
the Exchange's temporary affiliation with NYFIX Millennium and NYFIX
Securities, the Commission listed a series of terms and conditions that
must be adhered to during the period of said affiliation.\4\ The
purpose of these terms and conditions is to ``address concerns
regarding * * * (1) The potential for conflicts of interest where an
exchange is affiliated with a broker-dealer conducting an order routing
business that may interact with the Exchange itself, and (2) the
potential for informational advantages that could place such an
affiliated broker-dealer at a competitive advantage in comparison with
other non-affiliated broker-dealers.'' \5\ The Exchange represents that
all of these terms and conditions will continue to be applicable with
respect to NYFIX Securities during the extension period being proposed
herein until such time as the Exchange's affiliation with NYFIX
Securities is terminated.
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    \4\ See NYFIX Approval Order, 74 FR at 59295-59296 (paragraphs
numbered (1)-(6), including subparagraphs (a)-(f) thereunder).
    \5\ Id. at 59295.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) \6\ of the Act,\7\ in general, and furthers the
objectives of Section 6(b)(1) \8\ of the Act, in particular, in that it
enables the Exchange to be so organized as to have the capacity to
carry out the purposes of the Act and to comply, and to enforce
compliance by its members and persons associated with its members, with
the provisions of the Act, the rules and regulations thereunder, and
the rules of the Exchange. The Exchange also believes that this
proposed rule change is also consistent with, and furthers the
objectives of Section 6(b)(5) \9\ of the Act, in that it is 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, to remove impediments to and perfect the mechanisms of a
free and open

market and a national market system and, in general, to protect
investors and the public interest.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78a.
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 15 U.S.C. 78f(b)(5).
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    In the NYFIX Approval Order, the Commission determined that the
proposed temporary affiliation between the Exchange and the two NYFIX
broker-dealer subsidiaries, subject to the terms and conditions
described above, was consistent with the requirements of the Act and
the rules and regulations thereunder applicable to a national
securities exchange and, in particular, was consistent with Section
6(b)(5) of the Act.\10\ With respect to the Commission's expressed
concerns regarding potential unfair competition and conflicts of
interest when an exchange, or one of its affiliates, is the parent
company of a broker-dealer that provides routing services that may be
in competition with services provided by members of that exchange, the
NYFIX Approval Order stated, ``The Commission believes, however, that
the temporary nature of the affiliation, together with the proposed
terms and conditions, are reasonably designed to mitigate concern about
potential unfair competition and conflicts of interest between the
commercial interests of the Exchange or its affiliates, and the
Exchange's regulatory responsibilities.'' \11\ Because these same terms
and conditions will continue to be applicable during the proposed
extension period, and because that extension period, if it is utilized,
will be limited to only one additional month, the Exchange believes
that the current temporary affiliation between the Exchange and NYFIX
Securities will continue to be consistent with the Act during the
proposed extension period.
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    \10\ See NYFIX Approval Order, 74 FR at 59295.
    \11\ Id. at 59296.
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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

    The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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) by its terms, become
operative prior to 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 proposed rule
change has become effective pursuant to Section 19(b)(3)(A) \14\ of the
Act and Rule 19b-4(f)(6)(iii) thereunder.\15\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to
the Commission written notice of its intent to file the proposed
rule change, along with a brief description and text of the proposed
rule change, at least five business days prior to the date of filing
of the proposed rule change, or such shorter time as designated by
the Commission. The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2010-33 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-2010-33. 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 Web site viewing and
printing in the Commission's Public Reference Room on official business
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also
will be available for inspection and copying at the principal office of
the Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File Number SR-
NYSE-2010-33 and should be submitted on or before May 13, 2010.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-9280 Filed 4-21-10; 8:45 am]
BILLING CODE 8011-01-P