[Federal Register Volume 85, Number 196 (Thursday, October 8, 2020)]
[Notices]
[Pages 63597-63599]
[FR Doc No: 2020-22248]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90075; File No. SR-NYSEArca-2020-56]

Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change To Amend NYSE Arca Rules 5.2-E(j)(3), 5.2-E(j)(8), 5.5-
E(g)(2), 8.600-E, and 8.900-E

October 2, 2020.
    On June 18, 2020, NYSE Arca, Inc. (``Exchange'' or ``NYSE Arca'')
filed with the Securities and Exchange Commission (``Commission''),
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend certain listing requirements relating to
maintaining a minimum number of beneficial holders and minimum number
of shares outstanding. The proposed rule change was published for
comment in the Federal Register on July 7, 2020.\3\
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 89197 (June 30,
2020), 85 FR 40720 (``Notice'').
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    On August 17, 2020, pursuant to Section 19(b)(2) of the Act,\4\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ The Commission has received no comment letters on the
proposed rule change. The Commission is issuing this order to institute
proceedings pursuant to Section 19(b)(2)(B) of the Act \6\ to determine
whether to approve or disapprove the proposed rule change.
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    \4\ 15 U.S.C. 78s(b)(2).
    \5\ See Securities Exchange Act Release No. 89584, 85 FR 51817
(August 21, 2020). The Commission designated October 5, 2020 as the
date by which the Commission shall approve or disapprove, or
institute proceedings to determine whether to disapprove, the
proposed rule change.
    \6\ 15 U.S.C. 78s(b)(2)(B).
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I. Description of the Proposal

    The Exchange proposes to amend NYSE Arca Rules 5.2-E(j)(3) and 5.5-
E(g)(2) (Investment Company Units), 5.2-E(j)(8) (Exchange-Traded Fund
Shares), 8.600-E (Managed Fund Shares), and 8.900-E (Managed Portfolio
Shares) (collectively, ``Fund Shares'') to (1) remove the listing
requirement that, following the initial twelve-month period after
commencement of trading of a series of Investment Company Units,
Exchange-Traded Fund Shares, Managed Fund Shares or Managed Portfolio
Shares, respectively, on the Exchange, such series have at least 50
beneficial holders, and (2) replace the existing minimum number of
shares requirements \7\ with a requirement that a series of Fund Shares
have at least one creation unit outstanding on an initial and continued
listing basis.\8\
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    \7\ See Commentary .01(d) to NYSE Arca Rule 5.2-E(j)(3)
(requiring a minimum of 100,000 shares of a series of Investment
Company Units to be outstanding at commencement of trading); NYSE
Arca Rule 5.2-E(j)(8)(e)(1)(A) (requiring the Exchange to establish
a minimum number of Exchange-Traded Fund Shares to be outstanding at
the time of commencement of trading); NYSE Arca Rule 8.600-
E(d)(1)(A) (requiring the Exchange to establish a minimum number of
Managed Fund Shares to be outstanding at the time of commencement of
trading); and NYSE Arca Rule 8.900-E(d)(1)(A) (requiring the
Exchange to establish a minimum number of Managed Portfolio Shares
to be outstanding at the time of commencement of trading).
    \8\ The Exchange represents that the term ``creation unit''
would have the same meaning as defined in Rule 6c-11(a)(1) under the
Investment Company Act of 1940 (``1940 Act'').
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    The Exchange believes that the requirement that a series of Fund
Shares listed on the Exchange must have at least 50 beneficial
shareholders is no longer necessary. The Exchange believes that the
requirements of Rule 6c-11 under the 1940 Act and, in particular, the
website disclosure requirements of Rule 6c-11(c), together with the
existing creation and redemption process, serve to mitigate the risks
of manipulation and lack of liquidity that the shareholders requirement
was intended to address. The Exchange further believes that requiring
at least one creation unit to be outstanding at all times, together
with the enhanced disclosure requirements of Rule 6c-11, will
facilitate an effective arbitrage mechanism that, for Investment
Company Units, Managed Fund Shares, and Exchange-Traded Fund Shares,
will provide investors with sufficient transparency into the holdings
of the underlying portfolio and help ensure that the trading price in
the secondary market remains in line with the value per share of a
fund's portfolio. As an example, the Exchange notes that Rule 6c-
11(c)(1)(vi) requires additional disclosure if the premium or discount
is in excess of 2% for more than seven consecutive days, so that there
would be transparency to investors in the event there are indications
of an inefficient arbitrage mechanism.
    With respect to Managed Portfolio Shares, while these securities do
not publicly disclose their portfolio holdings daily and are not
eligible to rely on Rule 6c-11, the Exchange believes that the
applicable Verified Intraday Indicative Value and other information
required to be disseminated in connection with the listing and trading
of Managed Portfolio Shares ensures transparency of key values and
information, and that such information is sufficient to support an
effective arbitrage process, independent of any minimum shareholders
requirement.
    The Exchange states that the arbitrage mechanism generally causes
the market price and the net asset value per share to align, and the
functioning of the arbitrage mechanism helps to ensure that the trading
price in the secondary market is at fair value. The Exchange further
states that the existence of the creation and redemption process, as
well as the proposed requirement that at least one creation unit is
always

outstanding, would ensure that market participants are able to redeem
Fund Shares and, thereby, allow the arbitrage mechanism to function
properly. The Exchange believes, therefore, that such arbitrage
mechanism would obviate the need for a minimum shareholders requirement
to support a fair and orderly market in Fund Shares. In addition, the
Exchange states that its surveillance procedures for Fund Shares and
its ability to halt trading in Fund Shares in specified circumstances
provide for additional investor protections by further mitigating any
abnormal trading that would affect the Fund Shares' prices.

II. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEArca-2020-56 and Grounds for Disapproval Under Consideration

    The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \9\ to determine whether the proposed rule
change should be approved or disapproved. Institution of such
proceedings is appropriate at this time in view of the legal and policy
issues raised by the proposed rule change. Institution of proceedings
does not indicate that the Commission has reached any conclusions with
respect to any of the issues involved.
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    \9\ 15 U.S.C. 78s(b)(2)(B).
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    Pursuant to Section 19(b)(2)(B) of the Act,\10\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of and input concerning the proposed rule change's consistency
with the Act and, in particular, Section 6(b)(5) of the Act, which
requires, among other things, that the rules of a national securities
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; and are not designed to permit unfair discrimination
between customers, issuers, brokers, or dealers.'' \11\
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    \10\ Id.
    \11\ 15 U.S.C. 78f(b)(5).
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    The Commission has consistently recognized the importance of the
minimum number of holders and other similar requirements in exchange
listing standards. Among other things, such listing standards help
ensure that exchange listed securities have sufficient public float,
investor base, and trading interest to provide the depth and liquidity
necessary to promote fair and orderly markets.\12\
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    \12\ See, e.g., Securities Exchange Act Release No. 57785 (May
6, 2008), 73 FR 27597 (May 13, 2008) (SR-NYSE-2008-17) (stating that
the distribution standards, which includes exchange holder
requirements ``. . . should help to ensure that the [Special Purpose
Acquisition Company's] securities have sufficient public float,
investor base, and liquidity to promote fair and orderly markets'');
Securities Exchange Act Release No. 86117 (June 14, 2019), 84 FR
28879 (June 20, 2018) (SR-NYSE-2018-46) (disapproving a proposal to
reduce the minimum number of public holders continued listing
requirement applicable to Special Purpose Acquisition Companies from
300 to 100).
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    As discussed above, the Exchange is proposing to (1) remove the
listing requirement that, following the initial twelve-month period
after commencement of trading of a series of Fund Shares on the
Exchange, such series have at least 50 beneficial holders, and (2)
replace the existing minimum number of shares requirements with a
requirement that a series of Fund Shares have at least one creation
unit outstanding on an initial and continued listing basis. In support
of its proposal, the Exchange asserts that, for Investment Company
Units, Exchange-Traded Fund Shares and Managed Fund Shares, the
portfolio and other disclosure requirements of Rule 6c-11 under the
1940 Act, together with the requirement that there be at least one
creation unit outstanding, would facilitate efficient arbitrage and
mitigate the manipulation and liquidity risks that the minimum number
of beneficial holders requirement was intended to address. With respect
to Managed Portfolio Shares, the Exchange asserts that the existing
requirement to disseminate the Verified Intraday Indicative Value and
related information supports an effective arbitrage process and
achieves those goals. The Exchange also believes its surveillance
procedures and trading halt authority would further mitigate regulatory
concerns. The Exchange does not specifically address the proposed
elimination of its existing minimum number of shares requirements.
    While the Exchange takes the position that existing disclosure
requirements, together with the creation and redemption process,
sufficiently mitigate the risks of manipulation and lack of liquidity
that the minimum shareholders requirement was intended to address, the
Exchange does not explain in any detail the basis for this view,
particularly if a series of Fund Shares is permitted to have a very
small number of beneficial holders. For example, the Exchange does not
address how the arbitrage mechanism will assure Fund Shares with very
few holders are sufficiently liquid to support fair and orderly
markets. The Exchange also does not discuss potential inefficiencies in
the arbitrage mechanism that might occur with illiquid Fund Shares that
have very few holders, and the impact that would have on the ability of
the arbitrage mechanism to effectively mitigate the risks of
manipulation. Further, the Exchange does not address the impact of
creation unit size on the efficiency of the arbitrage mechanism (e.g.,
illiquid Fund Shares with very few holders and a large creation unit
size). The Exchange provides no data or analysis to support its
position, other than noting the number and size of the creation units
for existing series of Fund Shares.
    The Exchange provides no specific arguments to support the proposed
elimination of its existing minimum number of shares requirements.
While the Exchange proposes to replace those requirements with a
requirement that a series of Fund Shares have a number of shares
outstanding equal to at least one creation unit, the Exchange does not
explain why this is an appropriate substitute for its existing
standards. Creation unit sizes could be highly variable, since they are
determined at the discretion of the issuer of Fund Shares, and the
Exchange has not articulated how this new standard would effectively
support fair and orderly markets, address the risks of manipulation,
and otherwise be consistent with Section 6(b)(5) and other relevant
provisions of the Act.
    Finally, the Exchange takes the position that its surveillance
procedures and trading halt authority for Fund Shares would further
mitigate regulatory concerns. The Exchange, however, does not explain
in any detail the basis for this view, or how specifically these
existing procedures would effectively mitigate the risks addressed by
the minimum number of beneficial holders and minimum number of shares
requirements the Exchange is proposing to eliminate.
    Under the Commission's Rules of Practice, the ``burden to
demonstrate that a proposed rule change is consistent with the Exchange
Act and the rules and regulations issued thereunder . . . is on the
self-regulatory organization [`SRO'] that proposed the rule change.''
\13\ The description of a proposed rule change, its purpose and
operation, its effect, and a legal analysis of its consistency with
applicable

requirements must all be sufficiently detailed and specific to support
an affirmative Commission finding, and any failure of an SRO to provide
this information may result in the Commission not having a sufficient
basis to make an affirmative finding that a proposed rule change is
consistent with the Exchange Act and the applicable rules and
regulations.\14\
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    \13\ Rule 700(b)(3), Commission Rules of Practice, 17 CFR
201.700(b)(3).
    \14\ See id.
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    For these reasons, the Commission believes it is appropriate to
institute proceedings pursuant to Section 19(b)(2)(B) of the Act to
determine whether the proposal should be approved or disapproved.

IV. Commission's Solicitation of Comments

    The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal is
consistent with Section 6(b)(5) or any other provision of the Act, or
the rules and regulations thereunder. Although there do not appear to
be any issues relevant to approval or disapproval that would be
facilitated by an oral presentation of views, data, and arguments, the
Commission will consider, pursuant to Rule 19b-4, any request for an
opportunity to make an oral presentation.\15\
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    \15\ Section 19(b)(2) of the Act, as amended by the Securities
Act Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Act Amendments of 1975, Senate Comm. on
Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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    Interested persons are invited to submit written data, views, and
arguments regarding whether the proposal should be approved or
disapproved by October 29, 2020. Any person who wishes to file a
rebuttal to any other person's submission must file that rebuttal by
November 12, 2020. The Commission asks that commenters address the
sufficiency of the Exchange's statements in support of the proposal,
which are set forth in the Notice,\16\ in addition to any other
comments they may wish to submit about the proposed rule change.
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    \16\ See supra note 3.
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    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-NYSEArca-2020-56 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-NYSEArca-2020-56. 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 website (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 website 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 10:00 a.m. and
3:00 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. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-NYSEArca-2020-56 and should be submitted
by October 29, 2020. Rebuttal comments should be submitted by November
12, 2020.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-22248 Filed 10-7-20; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: November 13, 2008 (Volume 73, Number 220)]
[Notices]
[Page 67152]
[DOCID:fr13no08-32]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket Nos. EL08-87-000; PL09-3-000]

Electric Power Supply Association; Control and Affiliation for
Purposes of Market-Based Rate Requirements Under Section 205 of the
Federal Power Act and the Requirements of Section 203 of the Federal
Power Act; Notice Redocketing Proceeding

November 5, 2008.
    On September 2, 2008, the Electric Power Supply Association (EPSA)
filed a petition with the Commission requesting guidance with respect
to the question of when investments in publicly-held companies will be
deemed to convey ``control'' or to result in ``affiliation'' for
purposes of the Commission's market-based rate requirements under
section 205 of the Federal Power Act (FPA) and the requirements of
section 203 of the FPA. The filing was docketed as EL08-87-000.
    Examination of the filing shows that that EPSA's petition raises
issues of generic implication to the electric utility industry, and
thus should have been assigned a PL docket prefix indicating matters of
general applicability. By this notice, the above-referenced proceeding
is hereby redocketed as Docket No. PL09-3-000 and Docket No. EL08-87-
000 is hereby terminated. All pleadings filed in Docket No. EL08-87-000
will also be redocketed in the new docket number, Docket No. PL09-3-
000. As the instant proceeding is matter of general applicability,
interventions need not be filed.

Kimberly D. Bose,
Secretary.
 [FR Doc. E8-26898 Filed 11-12-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register Volume 83, Number 56 (Thursday, March 22, 2018)]
[Notices]
[Pages 12646-12649]
[FR Doc No: 2018-05786]

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DEPARTMENT OF TRANSPORTATION

Federal Railroad Administration

[Docket No. FRA-2018-0027]

Automation in the Railroad Industry

AGENCY: Federal Railroad Administration (FRA), Department of
Transportation (DOT).

ACTION: Request for Information (RFI).

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SUMMARY: FRA requests information and comment on the future of
automation in the railroad industry. FRA is interested in hearing from
industry stakeholders, the public, local and State governments, and any
other interested parties on the extent to which they believe railroad
operations can (and should) be automated, and the potential benefits,
costs, risks, and challenges to achieving such automation. FRA also
seeks comment on how the agency can best support the railroad
industry's development and implementation of new and emerging
technologies in automation that will lead to continuous safety
improvements and increased efficiencies in railroad operations.

DATES: Comments and information responsive to this request should be
received by May 7, 2018.

ADDRESSES: You may submit information and comments identified by the
docket number FRA-2018-0027 by any one of the following methods:
     Fax: 1-202-493-2251;
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590;
     Hand Delivery: U.S. Department of Transportation, Docket
Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey
Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays; or
     Electronically through the Federal eRulemaking Portal,
http://www.regulations.gov. Follow the online instructions for
submitting comments.
    Instructions: All submissions must include the agency name, docket
name, and docket number for this RFI (FRA-2018-0027). Note that all
comments and data received in response to this RFI will be posted
without change to http://www.regulations.gov, including any personal
information provided. Please see the Privacy Act heading in the
SUPPLEMENTARY INFORMATION section of this document for Privacy Act
information related to any submitted comments or materials.
    Docket: For access to the docket to read comments received, go to
http://www.regulations.gov at any time or to U.S. Department of
Transportation, Docket Operations, M-30, West Building Ground Floor,
Room W12-140, 1200 New Jersey Avenue SE, Washington, DC, between 9 a.m.
and 5 p.m., Monday through Friday, except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Peter Cipriano, Special Assistant to
the Administrator, Federal Railroad Administration, 1200 New Jersey
Avenue SE, Washington, DC 20590 (telephone:<PHONE_NUMBER>),
[email protected].

SUPPLEMENTARY INFORMATION:

I. Overview

    FRA seeks to understand the current stage and development of
automated railroad operations and how the agency can best position
itself to support the integration and implementation of new automation
technologies to increase the safety, reliability, and the capacity of
the nation's railroad system. As in other transportation modes, there
are varying levels of automation that already are, or could potentially
be, implemented in the railroad industry. Currently, U.S. passenger and
freight railroads do not have a fully autonomous rail operation in
revenue service; however, railroads commonly use automated systems for
dispatching, meet and pass trip planning, locomotive fuel trip time
optimization, and signaling and train control. Railroads conduct many
switching and yard operations by remote control and automated equipment
and track inspections technologies are used to augment

manual inspection methods. Modern locomotive cabs are equipped with
intelligent information systems designed to provide operating crews
with up-to-date situational awareness as train sensor data and alarms
are continuously updated and displayed in operator consoles within the
cab. Railroads often now utilize energy management technology (the
equivalent of automobile cruise-control) to optimize fuel consumption
based on specific operational and equipment factors, as well as
movement planner systems designed to optimize in real-time, train
movements on the rail network. Railroads are implementing statutorily
mandated positive train control technology (a processor-based/
communications-based train control system) to prevent train accidents
by automatically controlling train speeds and movements if a train
operator fails to take appropriate action in certain operational
scenarios. These various systems of automation and technologies have
transformed rail operations in recent years, improving railroad
operational safety and efficiency.
    FRA has helped developed many of these technologies and
enhancements to these technologies are currently underway to support
more advanced train control schemes and fully autonomous operations. In
the fall of 2017, the Association of American Railroads, the freight
rail industry's primary industry organization that focuses on policy,
research, standard setting and technology, formed a Technical Advisory
Group on autonomous train operations (ATO TAG). The focus of the ATO
TAG is to define industry standards for an interoperable system to
support enhanced safety and efficiency of autonomous train operations.
The ATO TAG intends to develop standardization to support common
interfaces and functions, such that technology may be applied in an
interoperable fashion, while also allowing some flexibility in the
specific design, implementation and packaging of the technology.
    Internationally, the only known fully-autonomous freight railroad
system is in Australia. The system is part of the Australia Rio Tinto
mining company and began fully-autonomous train operations on an
approximately 62-mile stretch of track in Western Australia. This Rio
Tinto train is equipped with a variety of sensors (e.g., radar,
cameras, kangaroo collisions sensors) and with a switch to toggle
between autonomous operation or operation with an operator on board.
    FRA seeks to understand the rail industry's plans for future
development and implementation of automated train systems and
technologies and the industry's plans and expectations related to
potential fully-automated rail operations. FRA is specifically
interested in the anticipated benefits, costs, risks, and challenges to
achieving the industry's desired level of automation. FRA also seeks to
understand how the rail industry's plans for future automation may
affect other stakeholders, including railroad employees, the traveling
public and freight shipping industry, railroad industry suppliers and
equipment manufacturers, communities through which railroads operate,
and any other interested parties.
    FRA also seeks comment on the appropriate taxonomy to use to
provide a baseline framework for the continued development and
implementation of automated technology in the railroad industry. For
example, both SAE, for on-road vehicles, and the International
Association of Public Transport's (UITP) for public transit fixed
guideway (rail) have developed taxonomies for their respective modes of
transportation.
    The SAE definitions divide vehicles into levels based on ``who does
what, when.'' Generally:
     At SAE Level 0, the driver does everything.
     At SAE Level 1, an automated system on the vehicle can
sometimes assist the driver conduct some parts of the driving task.
     At SAE Level 2, an automated system on the vehicle can
actually conduct some parts of the driving task, while the driver
continues to monitor the driving environment and performs the rest of
the driving task.
     At SAE Level 3, an automated system can both actually
conduct some parts of the driving task and monitor the driving
environment in some instances, but the driver must be ready to take
back control when the automated system requests.
     At SAE Level 4, an automated system can conduct the
driving task and monitor the driving environment, and the driver need
not take back control, but the automated system can operate only in
certain environments and under certain conditions.
     At SAE Level 5, the automated system can perform all
driving tasks, under all conditions that a driver could perform them.
    Using the SAE levels described above, the Department has drawn a
distinction for non-road vehicles between Levels 0-2 and 3-5 based on
whether the human driver or the automated system is primarily
responsible for monitoring the driving environment.
    Automatic Train Operation of public transit fixed guideway (rail)
systems is an operational safety enhancement to automate operations of
trains. It is mainly used on fixed guideway rail systems which are
easier to ensure safety of agency staff and passengers. Basically, each
grade defines distinct functions of train operation that are the
responsibility of agency staff and those that are the responsibility of
the rail system itself.
    Similar to SAE, UITP defines grades of automation (GoA) for fixed
guideway (rail) systems. Generally:
     At UITP Grade 0, on-sight train operation, similar to a
streetcar running in mixed traffic.
     At UITP Grade 1, manual train operation where a train
operator controls starting and stopping, operation of doors and
handling of emergencies or sudden diversions.
     At UITP Grade 2, semi-automatic train operation where
starting and stopping is automated, but the train operator or conductor
controls the doors, drives the train if needed and handles emergencies
(many ATO systems worldwide are Grade 2).
     At UITP Grade 3, driverless train operation where starting
and stopping are automated but a train attendant or conductor controls
the doors and drives the train in case of emergencies.
     At UITP Grade 4, unattended train operation where starting
and stopping, operation of doors and handling of emergencies are fully
automated without any on-train staff.
    FRA requests comment on the applicability of these or other
taxonomies for automation should be applied to railroads.

II. Questions Posed

    Although FRA seeks comments and relevant information and data on
all issues related to the development and continued implementation of
automated train systems and technologies and potentially fully
autonomous train operations, FRA specifically requests comment and data
in response to the following questions:

General Questions

    1. To what extent do railroads plan to automate operations? Do
railroads plan to implement fully autonomous rail vehicles (i.e.,
vehicles capable of sensing their environments and operating without
human input)? If so, for what types of operations?
    2. How do commenters envision the path to wide-scale development
and implementation of autonomous rail operations (or operations
increasingly reliant on automated train systems or

technologies)? What is the potential timeframe for technology prototype
availability for testing and for deployment of such technologies?
    3. As discussed above, the railroad industry is currently taking
steps in developing standards for automation. How does the railroad
industry currently define ``autonomous operations''? Would it be
helpful to develop automated rail taxonomy; a system of standards to
clarify and define different levels of automation in trains, as
currently exists for on-road vehicles and rail transit? What, if any,
efforts are already under way to develop such rail automation taxonomy?
Should FRA embrace any existing and defined levels of automation in the
railroad industry or other transportation modes such as highways or
public transit? For example, should FRA consider SAE Standard
J3016_201609 (see http://standards.sae.org/j3016_201609/), which
provides for six GoA for on-road vehicles, or the four GoA for public
transit fixed guideway vehicles?
    4. What limitations and/or risks (e.g., practical, economic,
safety, or other) are already known or anticipated in implementing
these types of technologies? How should the railroad industry
anticipate addressing these limitations and/or risks, and what efforts
are currently underway to address them? Are any mitigating efforts
expected in the future and what is the timeline for such efforts?
    5. What benefits and efficiencies (e.g., practical, economic,
safety, or other) do commenters anticipate that railroads will be able
to achieve by implementing these technologies?
    6. What societal benefits if any, could be expected to result from
the adoption of these technologies (e.g., environmental, or noise
reduction)? What societal disadvantages could occur?
    7. What, if anything, is needed from other railroad industry
participants (e.g., rail equipment and infrastructure suppliers,
manufacturers, maintainers) to support railroads' automation efforts?
    8. How does the state of automation of U.S. railroad operations
compare to that of railroads in other countries? What can be learned
from automation employed or under development in other countries? What
are the unique characteristics of U.S. railroad operations and/or
infrastructure as compared to railroads in other countries that may
affect the wide-scale automation of railroad operations in this
country?

Safety and/or Security Issues

    9. How do commenters believe these technologies could increase rail
safety?
    10. What processes do railroads have in place to identify potential
safety and/or security, including cybersecurity, risks arising during
the adoption of these technologies and that may result from the
adoption of such technologies?
    11. How should railroads plan to ensure identified safety and/or
security risks are adequately addressed during the development and
implementation of these new technologies? What is an acceptable level
of risk in this context?
    12. How should railroads plan to ensure the integration of these
technologies will not adversely affect, and will instead improve, the
safety and/or security of railroad operations?
    13. How do railroads plan to ensure safety and security from cyber
risks?
    14. How do the safety and/or security, including cyber risks, faced
by U.S. railroads implementing these technologies compare to the risks
faced by railroads operating in other countries? How have railroads in
other countries addressed or mitigated these risks? Are there
opportunities for cross-border collaboration to address such risks?

Infrastructure

    15. What are the infrastructure needs for effectively, safely, and
securely implementing these technologies? FRA is particularly
interested in wayside, communication, onboard, operating personnel,
testing, maintenance, certification, and data infrastructure needs, as
well as any other expected or anticipated infrastructure needs.
    16. How can the nation's existing rail infrastructure be leveraged
to support the implementation of new infrastructure, necessary for the
adoption of automated and autonomous operations?

Workforce Viability

    17. What is the potential impact of the adoption of these
technologies on the existing railroad industry workforce?
    18. Would the continued implementation of these technologies,
including fully autonomous rail vehicles, create new jobs and/or
eliminate the need for existing jobs in the railroad industry?
    19. What railroad employee training needs would likely result from
the adoption of these technologies? For example, if the technology
fails en route, will an onboard employee be trained to take over
operation of the vehicle manually or be required to repair the
technology en route?

Legal/Regulatory Issues

    20. What potential legal issues are raised by the development and
implementation of autonomous train systems and technologies within the
industry?
    21. What are the regulatory challenges (rail-specific or DOT-wide)
that must be addressed before autonomous rail vehicles can be made a
part of railroad operations in the United States?
    22. Are there current safety standards and/or regulations that
impede the development and/or implementation of automated train systems
or technologies in the railroad industry, including the development
and/or implementation of autonomous rail vehicles? If so, what are they
and how should they be addressed?

Opportunities for Joint Government/Industry Cooperation

    23. Are there current or anticipated railroad industry, private,
international, or State or local government pilot projects or research
initiatives involving automated train systems or technologies
potentially in need of FRA support? If so, what are the needs (e.g.,
regulatory, technical)?
    24. What data relevant to the development and integration of
automated train systems and technologies currently exists that could be
leveraged to address future government/industry research needs?

III. Public Participation

    FRA invites all interested parties to submit comments, data, and
information related to the specific questions listed in Section II
above and any other comments, data, or information relevant to issues
related to the development and implementation in the railroad industry
of new automated train systems or technologies.

How do I prepare and submit comments?

    Your comments should be written and in English. To ensure that your
comments are filed in the correct docket, please include docket number
FRA-2018-0027 in your comments.
    Please submit your comments to the docket following the instruction
given above under ADDRESSES. If you are submitting comments
electronically as a PDF (Adobe) file, we ask that the document
submitted be scanned using an Optical Character Recognition process,
thus allowing FRA to search your comments.

How do I request confidential treatment of my submission?

    Although FRA encourages the submission of information that can be
freely and publicly shared, if you wish to submit any information under
a claim of confidentiality, you must follow the procedures in 49 CFR
209.11.

Will FRA consider late comments?

    FRA will consider all comments received before the close of
business on the comment closing date indicated above under DATES. To
the extent possible, FRA will also consider comments after that date.

How can I read the comments submitted by other people?

    You may read the comments received at the address given above under
Comments. The hours of the docket are indicated above in the same
location. You may also read the comments on the internet, filed in the
docket number at the heading of this notice, at http://www.regulations.gov.
    Please note that, even after the comment closing date, FRA will
continue to file any relevant information it receives in the docket as
it becomes available. Further, some people may submit late comments.
Accordingly, FRA recommends that you periodically check the docket for
new material.

IV. Privacy Act Statement

    FRA notes that anyone is able to search (at www.regulations.gov)
the electronic form of all filings received into any of DOT's dockets
by the name of the individual submitting the filing (or signing the
filing, if submitted on behalf of an association, business, labor
union, or other organization). You may review DOT's complete Privacy
Act Statement published in the Federal Register on April 11, 2000
(Volume 65, Number 70, Pages 19477-78), or you may view the privacy
notice of regulations.gov at http://www.regulations.gov/#!privacyNotice.

    Authority:  49 U.S.C. 20101 et seq.

    Issued in Washington, DC, on March 16, 2018.
Juan D. Reyes, III,
Acting Deputy Administrator.
[FR Doc. 2018-05786 Filed 3-21-18; 8:45 am]
 BILLING CODE 4910-06-P


[Federal Register: April 9, 2008 (Volume 73, Number 69)]
[Notices]
[Page 19274-19276]
[DOCID:fr09ap08-93]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57611; File No. SR-NYSE-2008-20]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change and Amendments No. 1 and 2
Thereto Relating to Exchange Rule 36 (Communications Between Exchange
and Member's Offices) To Make Permanent an Existing Portable Phone
Pilot

April 3, 2008.
    Pursuant to 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 March 17, 2008, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been substantially prepared by the
Exchange. On March 27, 2008, the Exchange submitted Amendment No. 1 to
the proposed rule change.\3\ On April 2, 2008, the Exchange submitted
Amendment No. 2 to the proposed rule change.\4\ The Commission is
publishing this notice to solicit comments on the proposed rule change,
as amended, from interested persons.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange included the rule text of
Exchange Rule 36 as originally approved by the Commission as a pilot
and subsequently amended to include Registered Competitive Market
Makers (``RCMMs''). See notes 6 and 8 infra. Amendment No. 1
replaced the original filing in its entirety. See also note 4 infra.
    \4\ Amendment No. 2 replaced Amendment No. 1 in its entirety. In
Amendment No. 2, the Exchange included an inadvertently omitted
portion of the text of Exchange Rule 36. Amendment No. 2 amends
Exhibit 5 of the 19b-4 so that it accurately reflects the existing
portable phone pilot and the text of Exchange Rule 36 as it will
appear upon permanent approval of the pilot.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange is proposing to amend Exchange Rule 36 (Communications
Between Exchange Member's Offices) to make permanent the existing
portable phone pilot (the ``Pilot'').\5\
---------------------------------------------------------------------------

    \5\ See also note 9 infra. Member Education Bulletins (``MEBs'')
and acknowledgment forms are part of the rule proposal.
---------------------------------------------------------------------------

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. 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
    Through this rule change, the Exchange seeks to amend Exchange Rule
36 to allow Floor brokers and Registered Competitive Market-Makers
(``RCMMs'') \4\ to use Exchange authorized and provided portable phones
on the Exchange Floor, provided certain specified conditions are met.
Such usage has been permitted on a pilot basis. The current Pilot
expires on April 30, 2008, and the NYSE seeks to have the amendment to
Exchange Rule 36 made permanent.
---------------------------------------------------------------------------

    \4\ See Exchange Rule 107A, which defines and governs the
registration and dealings of RCMMs.
---------------------------------------------------------------------------

Background

    The Commission originally approved the Pilot to be implemented for
a six-month period \5\ beginning no later than June 23, 2003.\6\ Since
the inception of the Pilot, the Exchange has extended the Pilot nine
times, with the current Pilot set to expire on April 30, 2008.\7\ In
2006, the Exchange incorporated RCMMs into the Pilot and subsequently
amended the Pilot to allow RCMMs to use an Exchange authorized and
provided portable phone on the Exchange Floor to call to and receive
calls from their booths on the Exchange Floor.\8\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 47671 (April 11,
2003), 68 FR 19048 (April 17, 2003) (SR-NYSE-2002-11).
    \6\ See Securities Exchange Act Release No. 47992 (June 5,
2003), 68 FR 35047 (June 11, 2003) (SR-NYSE-2003-19) (delaying the
implementation date for portable phones from on or about May 1,
2003, to no later than June 23, 2003).
    \7\ See Securities Exchange Act Release Nos. 48919 (December 12,
2003), 68 FR 70853 (December 19, 2003) (SR-NYSE-2003-38) (extending
the Pilot for an additional six months ending on June 16, 2004);
49954 (July 1, 2004), 69 FR 41323 (July 8, 2004) (SR-NYSE-2004-30)
(extending the Pilot for an additional five months ending on
November 30, 2004); 50777 (December 1, 2004), 69 FR 71090 (December
8, 2004) (SR-NYSE-2004-67) (extending the Pilot for an additional
four months ending March 31, 2005); 51464 (March 31, 2005), 70 FR
17746 (April 7, 2005) (SR-NYSE-2005-20) (extending the Pilot for
additional four months ending July 31, 2005); 52188 (August 1,
2005), 70 FR 46252 (August 9, 2005) (SR-NYSE-2005-53) (extending the
Pilot for an additional six months ending January 31, 2006); 53277
(February 13, 2006), 71 FR 8877 (February 21, 2006) (SR-NYSE-2006-
03) (extending the Pilot for an additional six months ending July
31, 2006); 54276 (August 4, 2006), 71 FR 45885 (August 10, 2006)
(SR-NYSE-2006-55) (extending the Pilot for an additional six months
ending January 31, 2007); 55218 (January 31, 2007), 72 FR 6025
(February 8, 2007) (SR-NYSE-2007-05) (extending the Pilot for an
additional twelve months ending January 31, 2008); and 57249
(January 31, 2008), 73 FR 7024 (February 6, 2008) (SR-NYSE-2008-10)
(extending the Pilot for an additional three months ending April 30,
2008).
    \8\ See Securities Exchange Act Release Nos. 53213 (February 2,
2006), 71 FR 7103 (February 10, 2006) (SR-NYSE-2005-80) and 54215
(July 26, 2006), 71 FR 43551 (August 1, 2006) (SR-NYSE-2006-51).
---------------------------------------------------------------------------

    Exchange Rule 36 governs the establishment of telephone or
electronic communications between the Exchange Floor and any other
location. Prior to the Pilot, Exchange Rule 36 prohibited the use of
portable phone communications between the Exchange Floor and any off-
Floor location. The only approved communication by Floor brokers
between the Exchange Floor and an off-Floor location prior to the Pilot
was by means of a telephone located at a broker's booth. Communications
often involved a customer calling a broker at the booth for ``market
look'' information. Prior to the Pilot, a broker could not use a
portable phone in a trading Crowd at the point of sale to speak with a
person located off the Exchange Floor.
    Under the Pilot, sections .21 and .22 of Exchange Rule 36 delineate
the conditions under which Floor brokers and RCMMs, respectively, are
allowed to use an Exchange authorized and provided portable phone on
the Exchange Floor.\9\ Currently, under the

Pilot, with the approval of the Exchange, a Floor broker is permitted
to engage in direct voice communication from the point of sale to an
off-Floor location, such as a member firm's trading desk or the office
of one of the broker's customers. Such communications permit the broker
to accept orders consistent with Exchange rules, provide status and
oral execution reports as to orders previously received, as well as
``market look'' observations as historically have been routinely
transmitted from a broker's booth location.
---------------------------------------------------------------------------

    \9\ See MEBs 2005-20 (November 28, 2005) and 2005-23 (December
2, 2005). MEBs describe the conditions for the use of a portable
phone by Floor brokers and RCMMs, the acknowledgement procedure, and
the rule text. These MEBs were previously filed as exhibits with the
Commission in connection with the operation of the Pilot. See
Securities Exchange Act Release No. 53213 (February 2, 2006), 71 FR
7103 (February 10, 2006) (SR-NYSE-2005-80). Revised MEBs will be
sent to all Floor brokers and RCMMs utilizing portable phones
pursuant to Exchange Rule 36.
---------------------------------------------------------------------------

    Both incoming and outgoing calls are allowed, provided the
requirements of all other Exchange rules have been met. A Floor broker
is not permitted to represent and execute any order received as a
result of such voice communication unless the order is first properly
recorded by the member and entered into the Exchange's Front End
Systemic Capture (FESC) electronic database.\10\ In addition, Exchange
Rules require that Floor brokers receiving orders from the public over
portable phones must be properly qualified to engage in such direct
access business under Exchange Rules 342 and 345, among others.\11\
---------------------------------------------------------------------------

    \10\ See Exchange Rule 123(e). See also Securities Exchange Act
Release Nos. 43689 (December 7, 2000), 65 FR 79145 (December 18,
2000) (SR-NYSE-98-25) and 44943 (October 16, 2001), 66 FR 53820
(October 24, 2001) (SR-NYSE-2001-39) (discussing certain exceptions
to FESC, such as orders to offset an error, or a bona fide
arbitrage, which may be entered within 60 seconds after a trade is
executed).
    \11\ For more information regarding Exchange requirements for
conducting a public business on the Exchange Floor, see Information
Memos 01-41 (November 21, 2001), 01-18 (July 11, 2001) (available at
http://www.nyse.com), and 91-25 (July 8, 1991).
---------------------------------------------------------------------------

    It is impermissible for Floor brokers to use call-forwarding or
conference calling. Accordingly, Exchange authorized and provided
portable phones used by Floor brokers do not have call forwarding or
conference calling capabilities, and Floor brokers and their member
organizations must have procedures designed to deter anyone calling
their portable phone from using caller ID block or attempting to
conceal the phone number from which the call is being made. Moreover,
members and member organizations must make and retain records which
reflect compliance with these procedures.
    The Pilot also allows RCMMs to use an Exchange authorized portable
phone solely to call and receive calls from their booths on the
Exchange Floor, to communicate with their or their member
organizations' off-Floor office, and to communicate with the off-Floor
office of their clearing member organization to enter off-Floor orders
and to discuss matters related to the clearance and settlement of
transactions, provided the off-Floor office uses a wired phone line for
these discussions. RCMMs and their or their member organization's off-
Floor offices may not use portable phones to transmit to the Exchange
Floor orders for the purchase or sale of securities by public customers
or any other agency business.\12\ For both RCMMs and Floor brokers, use
of a portable phone on the Exchange Floor other than one authorized and
provided by the Exchange is prohibited.
---------------------------------------------------------------------------

    \12\ Allowing RCMMs acting as Floor brokers to use portable
phones would involve further discussions with the Commission and
would be the subject of a separate filing with the Commission.
---------------------------------------------------------------------------

    It is impermissible for RCMMs, their booth personnel, their member
organization's off-Floor office, and their clearing member
organization's off-Floor office to use call-forwarding or conference
calling. Accordingly, Exchange authorized and provided portable phones
used by RCMMs do not have call forwarding or conference calling
capabilities and booth phones used to make calls to and receive calls
from RCMMs are prohibited from having call forwarding or conference
calling features enabled. RCMMs and their member organizations must
implement procedures designed to deter their or their member
organization's off-Floor office and the off-Floor office of their
clearing member organization calling their portable phone from using
caller ID block or any other means designed to conceal the phone number
from which the call is being made.
    Use of the portable phone by Floor brokers and RCMMs pursuant to
sections .21 and .22 of Exchange Rule 36 must comply with all other
rules, policies, and procedures of both the federal securities laws and
the Exchange, including the record retention requirements, as set forth
in Exchange Rule 440 and SEC Rules 17a-3 and 17a-4. Further, every
Floor broker and RCMM must sign a written agreement consenting to
specified terms of usage in connection with the operation of the Pilot
and their use of the Exchange authorized and provided portable
phones.\13\
---------------------------------------------------------------------------

    \13\ Floor brokers and RCMMs agree to comply with sections .20,
.21, and .22 of Exchange Rule 36, all other rules, policies, and
procedures of both federal securities laws and the Exchange,
including the record retention requirements of Exchange Rule 440 and
Rules 17a-3 and 17a-4 under the Act, and acknowledge that the
Exchange has the right to request from their Exchange authorized
portable phone service provider any records relating to incoming and
outgoing calls that NYSE Regulation, Inc. deems necessary. Floor
brokers additionally agree that to the extent they are aware that a
customer or any other incoming caller is using a caller ID block,
the Floor broker will request in writing that the customer/caller
disable such block when calling the Floor broker. Such written
request must be documented and a copy of the same retained. RCMMs
acknowledge that they may only call and receive calls from the
locations delineated in section .22 of Exchange Rule 36. RCMMs
additionally agree to disable the functionality that allows call-
forwarding, conference calling, caller ID block, or any other means
to conceal the phone number from which the call is being made.
---------------------------------------------------------------------------

    Specialists are subject to separate restrictions in Exchange Rule
36 on their ability to engage in communications from the specialist
post to an off-Floor location.\14\ The amendments to Exchange Rule 36
proposed in this filing will not apply to specialists, who would
continue to be prohibited from communicating from the post to upstairs
trading desks or customers.\15\
---------------------------------------------------------------------------

    \14\ See Securities Exchange Act Release No. 46560 (September
26, 2002), 67 FR 62088 (October 3, 2002) (SR-NYSE-00-31) (discussing
restrictions on specialists' communications from the post).
    \15\ Exchange Rule 36.30 provides that, with the approval of the
Exchange, a specialist unit may maintain a telephone line at its
stock trading post location to the off-Floor offices of the
specialist unit or the unit's clearing firm. Such telephone
connection shall not be used for the purpose of transmitting to the
Exchange Floor orders for the purchase or sale of securities, but
may be used to enter options or futures hedging orders through the
unit's off-Floor office or the unit's clearing firm, or through a
member (on the Exchange Floor) of an options or futures exchange.
---------------------------------------------------------------------------

Pilot Program Results

    Currently, there are approximately 400 portable phone
subscribers.\16\ For a sample week of October 15 through October 19,
2007, an average of 2,518 calls/day were outgoing calls from portable
phones issued to Floor brokers and RCMMs. An average of 960 calls/day
were incoming calls to the portable phones. Of the outgoing calls from
portable phones, an average of 1,026 calls/day were calls to the booth
by Floor brokers and RCMMs, and 1,492 calls/day were calls by RCMMs to
the upstairs offices of their member organization and their clearing
member organization and calls of Floor brokers. Approximately 41% of
the outgoing calls from portable phones were calls to the booth by
Floor brokers and RCMMs.
---------------------------------------------------------------------------

    \16\ This data includes both Floor brokers and RCMMs.
---------------------------------------------------------------------------

    Of the 960 average incoming calls/day received, an average of 337
calls/day were calls to RCMMs from the upstairs offices of their member
organization and their clearing member organization and calls to Floor
brokers. An average of 623 calls/day were calls received from the
booth. Thus, approximately 65% of all incoming calls received were from
the

booth and the remaining 35% of incoming calls received were calls to
RCMMs from the upstairs offices of their member organization and their
clearing member organization and calls to Floor brokers.\17\
---------------------------------------------------------------------------

    \17\ The Exchange has received records of incoming and outgoing
telephone calls from January 31, 2007, through January 31, 2008, for
Floor brokers and RCMMs and will continue to receive records of such
telephone calls on a monthly basis.
---------------------------------------------------------------------------

    The Exchange believes that the Pilot is operating successfully in
that there is a reasonable degree of usage of portable phones. Based on
the Pilot, the Exchange has not identified any additional significant
regulatory issues to report at this time. Moreover, there have been no
administrative or technical problems, other than routine telephone
maintenance issues, that have resulted from the operation of the Pilot
over the past few months.

Proposal To Make Portable Phone Pilot Permanent

    The Exchange proposes to make permanent the amendment to Exchange
Rule 36 permitting a Floor broker and an RCMM to use an Exchange
authorized and issued portable phone on the Exchange Floor.
    The permanent incorporation of the Pilot's provisions will enable
the Exchange to continue to provide more direct, efficient access to
its trading crowds and customers, increase the speed of transmittal and
execution of orders, and provide an enhanced level of service to
customers in an increasingly competitive environment. In particular, by
enabling customers to speak directly to a Floor broker in a trading
crowd on an Exchange authorized and issued portable phone, the proposed
rule change will continue what has become a more expeditious and direct
free flow of information than the circuitous manner in which
information was transmitted prior to the Pilot.
    The Exchange believes that the successful operation of the Pilot
since 2003 for Floor brokers with the inclusion of RCMMs in 2006 amply
demonstrates that the Pilot facilitates communication on the Exchange
Floor for both Floor brokers and RCMMs without any corresponding
drawbacks. Therefore, the Exchange believes it is appropriate to amend
Exchange Rule 36 to make permanent the existing Pilot.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(5) of the Act \18\ 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 amendment to Exchange Rule 36
supports the mechanism of free and open markets by providing a means
for increased communication by Floor brokers and RCMMs to and from the
Exchange Floor.
---------------------------------------------------------------------------

    \18\ 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

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

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

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

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2008-20 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2008-20. 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 10
a.m. and 3 p.m. Copies of such filing also will be available for
inspection and copying at the principal office of the NYSE. 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-2008-20 and should be
submitted on or before April 30, 2008.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
---------------------------------------------------------------------------

    \19\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-7443 Filed 4-8-08; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register: May 14, 2009 (Volume 74, Number 92)]
[Notices]
[Page 22796-22798]
[DOCID:fr14my09-90]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59869; File No. SR-NYSE-2009-46]

Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by New York Stock Exchange LLC
Extending Until October 1, 2009 the Six-Month Pilot Program Which
Established a New Class of NYSE Market Participants Referred to as
``Supplemental Liquidity Providers'' and Is Designated as Exchange Rule
107B

May 6, 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 April 30, 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. 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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to extend until October 1, 2009, the six-
month pilot program (``Pilot'' or ``program'') which established a new
class of NYSE market participants referred to as ``Supplemental
Liquidity Providers'' (``SLPs'') and is designated as Exchange Rule
107B. 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
    The Exchange proposes to extend until October 1, 2009, the six-
month pilot program (``Pilot'' or ``program'') for ``Supplemental
Liquidity Providers'' (``SLPs'') under Rule 107B. The SLP pilot program
commenced operation on or about the date the SEC approved the NYSE
``New Market Model'' pilot \4\ which is scheduled to be in operation
until October 1, 2009. The Exchange proposes to extend the SLP pilot
until October 1, 2009, the termination date of the New Market Model
pilot, as the SLP program was designed to operate in the New Market
Model and was established to supplement the liquidity provided by
Designated Market Makers (``DMMs'') in the New Market Model.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 58845 (October 24,
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) (``New
Market Model'').
---------------------------------------------------------------------------

    SLPs have a 5% average quoting requirement per assigned security.
Additionally, if an SLP posts displayed or non-displayed liquidity in
its assigned securities that results in an execution, the Exchange will
pay the SLP a financial rebate. By requiring SLPs to quote at the NBB
or the NBO a percentage of the regular trading day in their assigned
securities, and by paying a rebate when the SLP's interest results in
an execution, the Exchange rewards aggressive liquidity providers in
the market. The Exchange contends that this quoting and rebate program
encourages the additional utilization of, and interaction with, the
NYSE and has provided customers with the premier venue for price
discovery, liquidity, competitive quotes and price improvement and
should, therefore, be extended until October 1, 2009.
    The Exchange believes that the SLP program has added meaningful
liquidity to the marketplace and improved both NYSE and overall market
quality. The Exchange will continue to monitor the efficacy of the
program during the proposed extended pilot period. In the future, the
Exchange may propose certain changes to Rule 107B, which will be the
subject of a 19(b)-4 rule filing and filed with the Commission. Until
such time that the Exchange proposes changes to Rule 107B, the Exchange
is requesting to extend the operation of Rule 107B until October 1,
2009.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Act'')
\5\ for this proposed rule change is the requirement under Section
6(b)(5) \6\ 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.
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    \5\ 15 U.S.C. 78f(a).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Exchange proposes to extend the SLP pilot until October 1,
2009, the termination date of the New Market Model pilot, as the SLP
program was designed to operate in the New Market Model and run
parallel with DMM trading activity. The SLP program has provided
benefits to all NYSE customers by bringing price discovery, liquidity,
competitive quotes and price improvement to the market and the Exchange
seeks to continue providing such benefits to its customer at least
until October 1, 2009 with an extension of the SLP pilot program.

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

    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 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\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does
not become operative for 30 days after the date of filing.\9\ 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 requested that the Commission waive
the 30-day operative delay and designate the proposed rule change
operative upon filing.
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    \9\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission 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. NYSE has satisfied this requirement.
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    The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The Commission notes that because the SLP pilot will expire on April
30, 2009, waiver of this time period is necessary so that no
interruption of the pilot will occur. Therefore, the Commission
designates the proposal operative upon filing.\10\
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    \10\ For purposes only of waiving the operative delay for this
proposal, the Commission has 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 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.\11\
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    \11\ 15 U.S.C. 78s(b)(3)(C).
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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-2009-46 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-2009-46. 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 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-2009-46 and should be submitted on or before June
4, 2009.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-11166 Filed 5-13-09; 8:45 am]

BILLING CODE 8010-01-P