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60216 Federal Register / Vol. 71, No.

197 / Thursday, October 12, 2006 / Notices

rule change, as amended, is consistent Commission to coincide with the as such orders are entering Exchange
with the Act and the rules and Exchange’s implementation of NYSE systems.5 Starting August 15, 2006,
regulations thereunder applicable to a HYBRID MARKETSM (‘‘Hybrid specialists were permitted to send
national securities exchange, and, in Market’’) 3 Phase 3 for the securities algorithmically-generated trading
particular, with Section 6(b)(5) of the identified in Exhibit 3 of its filing. The messages to interact with the Exchange
Act117 and Section 11A of the Act.118 text of the proposed rule change is quotation (‘‘hit bid/take offer’’), also
It is therefore ordered, pursuant to available on NYSE’s Web site (http:// without receipt of order information as
Section 19(b)(2) of the Act,119 that the www.nyse.com), at the principal office such orders are entering Exchange
proposed rule change (SR–NYSE–2006– of the Exchange, and at the systems.6
36) and Amendment Nos. 1 and 2 are Commission’s Public Reference Room. Phase 3 of the Hybrid Market, as
approved. approved, includes implementation of
II. Self-Regulatory Organization’s
For the Commission, by the Division of Statement of the Purpose of, and the following features:
Market Regulation, pursuant to delegated Statutory Basis for, the Proposed Rule • Automatic routing of orders to
authority.120 automated markets posting better bids
Nancy M. Morris, and offers in accordance with
Secretary. In its filing with the Commission, the Regulation NMS;
NYSE included statements concerning
[FR Doc. E6–16888 Filed 10–11–06; 8:45 am] • Availability of NYSE IOC orders for
the purpose of, and basis for, the
BILLING CODE 8011–01–P automatic executions;
proposed rule change and discussed any
comments it received on the proposed • Use of indicators to identify NYSE
rule change. The text of these statements quotations that are not immediately
SECURITIES AND EXCHANGE available for automatic execution;
COMMISSION may be examined at the places specified
in Item III below. The NYSE has • Implementation of gap quoting
[Release No. 34–54578; File No. SR–NYSE– prepared summaries, set forth in requirements;
2006–82] Sections A, B, and C below, of the most • Elimination of 1,099 size restriction
significant aspects of such statements. for automatic executions and increase in
Self-Regulatory Organizations; New size eligibility for automatic executions
York Stock Exchange LLC; Notice of A. Self-Regulatory Organization’s to 1 million shares; 7
Filing and Order Granting Accelerated Statement of the Purpose of, and • Elimination of 30-second restriction
Approval of a Proposed Rule Change Statutory Basis for, the Proposed Rule on the entry of auto ex orders on orders
Relating to A Pilot Until 10/31/06 to Put Change from the same person;
Into Operation Certain Rule Changes
Pending Before the Securities and
1. Purpose • Availability of automatic executions
Exchange Commission to Coincide The Commission approved the Hybrid through the close;
With the Exchange’s Implementation of Market on March 22, 2006.4 The • Elimination of Direct+ availability
Phase 3 of the NYSE HYBRID approved rules did not become effective only to straight limit orders;
MARKETSM immediately; rather they are being • Elimination of Direct+ suspensions
implemented in a series of phases over due to price (i.e., a trade at a price that
October 5, 2006. a period of time. would be more than five cents from the
Pursuant to Section 19(b)(1) of the Implementation of Phase 1 of the last trade in the stock on the Exchange);
Securities Exchange Act of 1934 Hybrid Market, which focused primarily • Elimination of Direct+ suspensions
(‘‘Act’’),1 and Rule 19b-4 thereunder,2 on the ability of Floor brokers to due to size (i.e., a 100-share published
notice is hereby given that on October electronically represent their customers’ bid or offer);
5, 2006 the New York Stock Exchange interest (‘‘e-Quote’’), was substantially • Conversion of marketable limit
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with completed on April 5, 2006. orders to auto ex orders; and
the Securities and Exchange Phase 2 of the Hybrid Market focused • Automatic executions of market
Commission (‘‘Commission’’ or ‘‘SEC’’) primarily on the ability of specialists to orders.8
the proposed rule change as described use their algorithmic systems to quote
in Items I and II below, which Items The Exchange intends to begin
and trade. The installation of software implementation of Phase 3 on October
have been prepared by the Exchange. necessary to implement Phase 2 of the
The Commission is publishing this 6, 2006. The Exchange has proposed
Hybrid Market has been installed Floor- changes to some of the rules already
notice and order to solicit comments on wide. Some specialist firms have been
the proposed rule change from approved for implementation in Phase
in the process of readying their systems 3 9 as well as moving the
interested persons and to approve the to quote and trade with receipt of order
proposed rule change on an accelerated implementation of sweeps and liquidity
information, while others have begun replenishment points (‘‘LRPs’’)
basis. quoting with receipt of such
I. Self-Regulatory Organization’s information. Phase 2 will continue to 5 See Securities Exchange Act Release No. 54024

Statement of the Terms of Substance of become operational concurrently with (June 21, 2006), 71 FR 36849 (June 28, 2006) (SR–
the Proposed Rule Change the roll out of Phase 3. In addition, NYSE–2006–44). This is effective until Phase 2 is
beginning June 21, 2006, specialists fully implemented.
The Exchange is proposing a pilot (the were permitted to algorithmically quote 6 See Securities Exchange Act Release No. 54316

‘‘Pilot’’) to put into operation certain (‘‘s-Quote’’) in their specialty securities,

(August 15, 2006), 71 FR 48569 (August 21, 2006)
rule changes pending before the (SR–NYSE–2006–59). This is effective until Phase
without the receipt of order information 2 is fully implemented.
7 See Securities Exchange Act Release No. 54520
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117 15 U.S.C. 78f(b)(5). 3 The Hybrid Market was approved on March 22, (September 27, 2006), 71 FR 57590 (September 29,
118 15 U.S.C. 78k–1. 2006. See Securities Exchange Act Release No. 2006) (SR–NYSE–2006–65) (proposing to amend
119 15 U.S.C. 78s(b)(2).
53539 (March 22, 2006), 71 FR 16353 (March 31, several Exchange Rules to clarify certain definitions
120 17 CFR 200.30–3(a)(12). and systemic processes (‘‘Omnibus Filing’’)).
2006) (SR–NYSE–2004–05) (‘‘Hybrid Market
1 15 U.S.C 78s(b)(1). Order’’). 8 Id.
2 17 CFR 240.19b–4. 4 Id. 9 See Omnibus Filing.

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Federal Register / Vol. 71, No. 197 / Thursday, October 12, 2006 / Notices 60217

originally included for Phase 4 to Phase Securities and Exchange Commission It might well be that with active
3.10 approval of the Pilot 16 and will competition among market makers and the
In addition, the Exchange has terminate on the close of business on elimination of trading advantages specialists
proposed modifications to other now enjoy, such a restriction on specialists’
October 31, 2006. dealings would become unnecessary.
Exchange Rules that the Exchange The Exchange plans to phase-in the Because trading patterns and market making
proposes to become operational as part securities in the Pilot, if approved, over behavior in the context of a national market
of Phase 3 and are the subject of other several weeks. However, Exchange Rule system cannot now be predicted, it appears
pending rule filings.11 The substantive 1002(P3) (‘‘Availability of Automatic appropriate to expand the Commission’s
proposed amendments in the Omnibus Execution Feature’’), which extends rulemaking authority in this area so that the
Filing, Stabilization Filing and Block Commission may define responsibilities and
automatic executions to the close, will restrict activities of specialists in response to
Cross Filing are necessary to a apply to all securities on the Exchange
successful implementation of Phase 3, changing market conditions.20
upon commencement of the Pilot.17
except the proposed changes in the The Exchange believes that the
To eliminate possible confusion as to
Omnibus filing applicable to ‘‘auction conditions for change that were
which Exchange Rules or sections
limit’’ and ‘‘auction market’’ orders. identified by Congress have largely
thereof apply to the Pilot securities, the come to pass, and that as a result, it is
These order types will not be available
Exchange has identified the rules that appropriate to redefine the scope of the
in Phase 3.
Accordingly, the Exchange proposes will be operational during the Pilot with specialist’s negative obligation. For
to implement on a pilot basis the a ‘‘P3.’’ example, the institutionalization of the
changes that the Exchange has proposed For purposes of the Pilot, the market, increased competition, and
in the Omnibus Filing, Stabilization Exchange further requests that the increased application of computer and
Filing, and the Block Cross Filing.12 The Commission re-interpret the specialist’s communication technology has
proposed amendments to rules negative obligation to eliminate the significantly diminished the time-and-
previously approved in the Hybrid requirement with respect to Exchange place advantages of specialists. As a
Market 13 and new proposals 14 are Rule 104(a) that each trade by the result, markets have seen increases in
discussed in detail in those filings. The specialist for the dealer account meet a the average daily trading volume and
Pilot would apply to a group of test of reasonable necessity.18 The the movement off the Floor of the
securities, known as Phase 3 Pilot Exchange believes that such an decision making that affects the
securities (‘‘Pilot securities’’).15 The interpretation is appropriate in view of direction and extent of movements in
Pilot would commence following the development of the national market the specialty stocks. There is also a
system over the past seventy years since dramatic increase in transparency with
10 The Commission notes that the Exchange has the interpretation was initially issued. respect to the specialist’s book through,
proposed changes to its sweep functionality and According to the Exchange, the among other things, Exchange initiatives
LRPs. Specifically, in the Omnibus Filing, the
Exchange proposes to amend NYSE Rule Commission has been granted specific like Exchange OPENBOOK.TM This
1000(d)(iii) to provide that during a sweep, an order authority by Congress to reinterpret the increased transparency gives all market
will trade with all interest at each price capable of negative obligation. Specifically, in participants, both on and off the Floor,
trading, before moving to the next price point. In a greater ability to see and react to
addition, the Exchange proposes to amend NYSE
1975, in connection with the 1975
Rule 1000(a)(iv) to implement a single LRP rather amendments 19 to the Act, Congress market changes.
than the two LRPs originally approved in the eliminated the negative obligation There has also been a significant
Hybrid Market Order. These Omnibus Filing clause from Section 11(b) of the Act and increase in competition in Exchange-
changes are included in the Pilot. listed securities. For example, unlike in
11 See Securities Exchange Act Release No. 54504 gave the Commission the flexibility to
(September 26, 2006), 71 FR 57011 (September 28, define dealer obligations for both previous years, Exchange specialists
2006) (SR–NYSE 2006–76) (proposing to amend the exchange members and over-the-counter must now compete with upstairs
specialist stabilization requirements set forth in market makers. In making the changes, liquidity providers and with multiple
Exchange Rule 104.10 (‘‘Stabilization Filing’’)); and OTC dealers, crossing networks and
SR–NYSE–2006–73 (filed on September 13, 2006) Congress noted that changes in the
(proposing to amend Exchange Rule 127 which marketplace might warrant changes in Alternative Trading Systems. As a result
governs the execution of a block cross transaction the scope of the dealer obligation: of UTP and dual listings, specialists also
at a price outside the prevailing NYSE quotation face competition from other national
(‘‘Block Cross Filing’’)). See also Omnibus Filing and regional exchanges. For all of these
16 The changes related to stop orders and stop
(proposing amendments to Exchange Rules related
to stop order and stop limit orders). limit orders proposed in the Omnibus Filing will reasons, the Exchange believes that it is
12 The amendments to Exchange rules proposed be implemented on October 16, 2006 pending SEC appropriate to reinterpret the negative
pursuant to the Omnibus Filing, Stabilization Filing approval of this Pilot, to give customers and obligation away from an emphasis on
and Block Cross Filing are attached to the filing, member organizations sufficient time to make any
changes necessary as a result of the elimination of
trade-by-trade necessity, and toward an
available on the Exchange’s Web site, as Exhibits
5A, 5B, and 5C respectively. In Exhibit 5 of the stop limit orders. approach based on patterns and
filing the Exchange proposes to retain NYSE Rule 17 The extension of automatic executions to the practices in the trading of specialty
104.10(7) and to add language to NYSE Rule close as set forth in NYSE Rule 1002 was approved securities for the dealer account.
104.10(5)(i)(a)(II)(a) to clarify that such transactions as part of the Hybrid Market filings. See Securities New York Stock Exchange Regulation
are other than those reaching across the market. Exchange Act Release No. 53539, supra note 3. As
These changes are not reflected in the Stabilization approved, NYSE Rule 1002 was always intended for (‘‘NYSER’’) has appropriate surveillance
Filing and Exhibit 5B. In addition, in Exhibit 5 of implementation in Phase 3. The amendments to procedures in place to surveil for
the filing, the Exchange proposes additional NYSE Rule 1002, set forth in the pending Omnibus compliance with the negative obligation
changes to Exchange Rule 127 that are also not Filing, are merely technical in nature, clarifying the by specialists. For example, NYSER will
reflected in the Block Cross Filing and Exhibit 5C. rule’s applicability, rather than the operation.
The Exchange intends to submit amendments to the 18 The Exchange is not seeking to have the
monitor, on a pattern and practice basis,
aforementioned filings to the Commission to reflect Commission eliminate trade-by-trade analysis with specialist activity that appears to cause
these changes. respect to rules specifically calling for such an or exacerbate an excessive price
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13 See Omnibus Filing.

analysis, such as rules relating to Prohibited trades movement in the market, as such
14 See Stabilization Filing, Block Cross Filing and under NYSE Rule 104.10(5) and Conditional trades
in inactive securities and NYSE Rule 104.10(6).
transactions would appear to be in
proposed amendments to stop orders and stop limit
orders contained in Omnibus Filing. 19 Securities Acts Amendments of 1975 (‘‘1975 violation with a specialist’s negative
15 Phase 3 Pilot securities will also be posted on Amendments’’), Pub. L. No. 94–29, 89 Stat. 97 (June
the Exchange’s Web site. 4, 1975). 20 S. Rep. No. 94–75, at 100 (1975).

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60218 Federal Register / Vol. 71, No. 197 / Thursday, October 12, 2006 / Notices

obligation. Additionally, the Division of the Pilot, the Exchange will be able to investors’ orders in the best market and
Market Surveillance of NYSER will revert to the pre-Pilot software within provide an opportunity for investors’
monitor for all subsequent action taken an average time of two minutes or less. orders to be executed without the
by the specialist, or lack thereof, to The Pilot will also enable the participation of a dealer.
cushion such price movement. As Exchange to be fully Regulation NMS 21-
B. Self-Regulatory Organization’s
today, the Exchange will in the context compliant by February 5, 2007 date and
of price volatility alerts, monitor for Statement on Burden on Competition
comply with its obligations under the
excessive price movements that may proposed NMS Linkage Plan.22 Without The Exchange does not believe that
involve a failure to comply with either this Pilot, it is unlikely the Exchange the proposed rule change will impose
the affirmative or negative obligation. will be able to meet either requirement. any burden on competition that is not
As the Exchange gains experience with The Exchange anticipates that the necessary or appropriate in furtherance
its new market structure, the Exchange Pilot will operate with minimal of the purposes of the Act.
will enhance existing surveillances and/ problems given the amount and degree C. Self-Regulatory Organization’s
or create new surveillances where of testing and training that has occurred Statement on Comments on the
necessary and appropriate to monitor to date. Accordingly, the Exchange Proposed Rule Change Received From
for compliance with the specialist believes that the extensiveness of the Members, Participants or Others
negative obligations. testing and training, the phase-in
The Exchange believes the Pilot will approach described above and the fall- The Exchange has neither solicited
prove beneficial from both a technology back capabilities of Exchange Systems nor received written comments on the
and a training perspective. The process provide significant assurances that the proposed rule change.25
will allow for a controlled and Pilot will operate as expected. However, III. Solicitation of Comments
moderated roll out of the new systems in the event systems or other problems
and capabilities. The Pilot will allow arise with the Pilot that adversely Interested persons are invited to
the Exchange to commence impact investors or impede the submit written data, views and
implementation of Hybrid Market Phase Exchange’s ability to maintain a fair and arguments concerning the foregoing,
3, as amended, therefore providing the orderly market, the Exchange will including whether the proposed rule
Exchange and users with real-time immediately terminate the Pilot in change is consistent with the Act.
testing of those functionalities. whole or in part, as appropriate, and Comments may be submitted by any of
Further, the Pilot will give the return trading to current operations the following methods:
Exchange the opportunity to identify under current NYSE rules. Electronic Comments
and address any system problems and to Finally, the Exchange represents that
identify and incorporate beneficial it will provide the Commission with any • Use the Commission’s Internet
system changes that become apparent as and all data and analysis the comment form (http://www.sec.gov/
a result of usage in real time and under Commission may request regarding the rules/sro.shtml); or
real market conditions. The ability to • Send an e-mail to rule-
operation of the rules governing
have such real time user interface will comments@sec.gov. Please include File
be invaluable, as it is impossible to Number SR–NYSE–2006–82 on the
accurately anticipate behavioral changes 2. Statutory Basis subject line.
in a development or mock-trading The Exchange believes that the Paper Comments
environment. In addition, the Pilot will proposed rule change is consistent with
allow users to gain essential practical • Send paper comments in triplicate
Section 6(b)(5) of the Act 23 that an
experience with the new systems and to Nancy M. Morris, Secretary,
exchange have rules that are designed to
processes in a well-modulated way. Securities and Exchange Commission,
promote just and equitable principles of
Prior to the Pilot, there has been Station Place, 100 F Street, NE.,
trade, to remove impediments to and
comprehensive training for both Floor Washington, DC 20549–1090.
perfect the mechanism of a free and
brokers and specialists, individually open market and a national market All submissions should refer to File
and together in a mock trading system and, in general, to protect Number SR–NYSE–2006–82. This file
environment. Training was conducted investors and the public interest. The number should be included on the
by the Exchange and was supplemented Exchange believes that the proposed subject line if e-mail is used. To help the
in most cases by firm-specific training rule change is also designed to support Commission process and review your
conducted by member organizations for the principles of Section 11A(a)(1) 24 of comments more efficiently, please use
their employees. The Exchange training the Act in that it seeks to assure only one method. The Commission will
environment was made available also to economically efficient execution of post all comments on the Commission’s
proprietary system vendors for their securities transactions, make it Internet Web site (http://www.sec.gov/
training sessions. practicable for brokers to execute rules/sro.shtml). Copies of the
In addition, testing has occurred at all submission, all subsequent
levels, including development testing, 21 See Securities Exchange Act Release No. 51808 amendments, all written statements
automation testing, SIAC testing, NYSE (June 9, 2005), 70 FR 37496 (June 29, 2005) (17 CFR with respect to the proposed rule
testing, integrated system testing and Parts 200, 201, 230, 240, 242, 249, and 270). change that are filed with the
code reviews, production environment 22 A ‘‘Plan for the Purpose of Creating and
Commission, and all written
testing, fall-back and recovery testing, Operating an Intermarket Communications Linkage
Pursuant to Section 11A(a)(3)(B) of the Securities communications relating to the
and regression and new functionality Exchange Act of 1934’’ to facilitate trades between proposed rule change between the
testing. different market centers. See Securities Exchange Commission and any person, other than
Moreover, the Exchange intends to Act Release No. 54551 (September 29, 2006). The those that may be withheld from the
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have available at all times during the Commission published notice of the NMS Linkage
Plan on July 28, 2006. See also Securities Exchange public in accordance with the
Pilot two versions of the operating Act Release No. 54239 (July 28, 2006), 71 FR 44328 provisions of 5 U.S.C. 552, will be
software—the new version that would (August 4, 2006), 17 CFR 242.608.
be operational and the original, pre-Pilot 23 15 U.S.C. 78f(b)(5). 25 The Commission notes that it has received a

version. If a problem develops during 24 15 U.S.C. 78k–1(a)(1). comment letter in response to the Omnibus Filing.

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Federal Register / Vol. 71, No. 197 / Thursday, October 12, 2006 / Notices 60219

available for inspection and copying in testing its new systems with this Pilot trade by the specialist for its dealer
the Commission’s Public Reference and comply with the NMS Linkage Plan. account meet a test of reasonable
Room. Copies of such filing also will be The NYSE explained in its filing that necessity. The Exchange has stated that
available for inspection and copying at it has tested these Hybrid Market it intends to amend the Stabilization
the principal office of the NYSE. All functions extensively but that it needs Filing to include such a request there as
comments received will be posted to test them in an actual trading well. The Commission notes that the
without change; the Commission does environment to ensure that they operate comment period for the Stabilization
not edit personal identifying as intended. Accordingly, NYSE Filing has not yet expired, and the
information from submissions. You represented that it does not anticipate
Commission specifically requests
should submit only information that any significant problems arising from
comment on the appropriateness of the
you wish to make available publicly. All the Pilot. However, NYSE will
immediately terminate the Pilot, in Exchange’s request to amend the
submissions should refer to File Commission’s interpretation that the
Number SR–NYSE–2006–82 and should whole or in part, as appropriate, should
any systems or other problems arise that specialist’s negative obligation be
be submitted on or before November 2,
adversely impact the protection of evaluated on a transaction-by-
investors or impede its ability to transaction basis.
IV. Commission’s Finding and Order maintain a fair and orderly market, and The Commission agrees with the
Granting Accelerated Approval of the return trading to its current operations NYSE that the national market system
Proposed Rule Change under current NYSE rules.27 has changed greatly in the nearly
The Commission finds that the A. Stabilization Filing seventy years since the Saperstein
proposed rule change is consistent with Interpretation was issued. The
the requirements of the Act and the The Commission is currently
Commission also agrees that increased
rules and regulations thereunder considering the Stabilization Filing. As
noted above, the Exchange has also automation and competition—both
applicable to a national securities within the Hybrid Market and in the
exchange.26 Specifically, the requested a temporary interpretation by
the Commission of the specialists’ markets generally—are significant
Commission finds that approval of the factors, among others, that must be
proposed rule change is consistent with negative obligation set forth in NYSE
Rule 104(a) to eliminate the requirement considered with regard to the scope of
Section 6(b)(5) of the Act because the specialists’ responsibilities and
proposal is designed to promote just and that each trade by a specialist meet a
test of reasonable necessity. NYSE Rule obligations. The Commission intends to
equitable principles of trade, to remove
104(a) states that ‘‘no specialist shall fully consider the NYSE’s request
impediments to and perfect the
effect on the Exchange purchases or relating to the transaction-by-transaction
mechanism of a free and open market
sales of any security in which such requirement of the Saperstein
and a national market system, and, in
specialist is registered, for any account Interpretation when it decides whether
general, to protect investors and the
in which he or his member organization to approve the Stabilization Filing, as
public interest.
* * * is directly or indirectly amended. However, the Commission
With this proposed rule change, the
interested, unless such dealings are preliminarily believes that the
Exchange has requested temporary
reasonably necessary to permit such Exchange’s request may have merit and,
approval by the Commission of certain
specialist to maintain a fair and orderly therefore, is permitting, as part of this
proposed amendments to the rules that
market * * *’’ In 1937, the Commission Pilot, the Exchange to review the
govern its Hybrid Market, so that it may
issued an interpretation (‘‘Saperstein specialists’ negative obligations on a
begin to implement Phase 3, with the
Interpretation’’) that among other things,
rules that the Exchange has proposed to pattern and practice basis, rather than
stated that each transaction by a
amend while these changes are pending specialist for his own account must on a transaction-by-transaction basis.
approval by the Commission. According meet the test of reasonable necessity.28 The Commission emphasizes that this
to the Exchange, this Pilot is necessary The Saperstein Interpretation made review applies solely to the
so that the Exchange can maintain its clear that specialist’s transactions for his interpretation of Exchange Rule 104(a)
planned implementation schedule for own account would be required to meet and notes that the specific requirements
the Hybrid Market and meet the the rule on a transaction-by-transaction and restrictions applicable to
Regulation NMS compliance dates. In basis, rather than on a review of such specialists, set forth in NYSE Rule
addition, this Pilot will allow NYSE to transactions generally. 104.10(5)(i)(b), Rule 104.10(5)(i)(c), and
comply with the new NMS Linkage In its filing, the NYSE requested that Rule 104.10(6), must be reviewed and
Plan. the Commission re-interpret the complied with for each individual
The Commission is considering each specialist’s negative obligation to transaction. Further, this temporary
of the proposed filings that are pending, eliminate the requirement that each interpretation applies solely to the Pilot
including comments received, if any,
and has not reached a decision on 27 The Exchange stated that it would be able to

whether they should be approved or revert back to pre-Pilot operations within an The Exchange represented that it will
disapproved. The Commission, average of two minutes or less. The Exchange conduct surveillance of specialist
represents that it intends to have available at all trading for compliance with their
however, believes that due to the times during the Pilot two versions of the operating
limited nature of the Pilot and its short software: (1) The new version that would be negative obligation. NYSE further
duration, it is consistent with the Act to operational during the Pilot and (2) the original, represented that it will enhance existing
allow NYSE to implement the Pilot so pre-Pilot version which would operational in case surveillance and/or create new
the Pilot prematurely needs to be terminated. The
that it may remain on schedule for Exchange will notify the public via its Web site if
surveillances as necessary and
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Regulation NMS compliance, begin the Pilot is terminated in whole or in part. In appropriate to monitor for compliance
addition, the Exchange will notify floor members at with the negative obligation. The
26 In approving this proposal, the Commission has the post if the Pilot is terminated in whole or in Commission wishes to emphasize that
considered the proposed rule’s impact on part.
efficiency, competition, and capital formation. 15 28 See Securities Exchange Release No. 1117
specialists remain subject to the
U.S.C. 78c(f). (March 30, 1937), at 4. restrictions set forth in the negative

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60220 Federal Register / Vol. 71, No. 197 / Thursday, October 12, 2006 / Notices

obligation with regard to proprietary SMALL BUSINESS ADMINISTRATION The number assigned for economic
trading.29 injury is 10634 0.
[Disaster Declaration # 10634] (Catalog of Federal Domestic Assistance
B. Accelerated Approval of the Pilot Number 59002).
Proposal Disaster # ZZ-00002; The Entire United
States and U.S. Territories Herbert L. Mitchell,
The Commission finds good cause, Associate Administrator for Disaster
AGENCY: U.S. Small Business Assistance.
pursuant to Section 19(b)(2) of the Administration.
Act,30 for approving the proposed rule [FR Doc. E6–16869 Filed 10–11–06; 8:45 am]
ACTION: Notice.
change prior to the thirtieth day after BILLING CODE 8025–01–P
the date of publication of the notice in SUMMARY: This is a notice of the Military
the Federal Register. The Pilot, which Reservist Economic Injury Disaster Loan
as discussed above is limited in scope Program (MREIDL), dated 10/1/2006. SMALL BUSINESS ADMINISTRATION
and duration, will allow the NYSE to DATES: Effective Date: 10/1/2006. Small Business Size Standards:
remain on schedule for compliance with MREIDL Loan Application Deadline Waiver of the Nonmanufacturer Rule
Regulation NMS, comply with the NMS Date: 90 days after the essential
Linkage Plan and to conduct real-time employee is discharged or released from AGENCY: U.S. Small Business
system and user testing of certain active duty. Administration.
features of the Hybrid Market. ADDRESSES: Submit completed loan ACTION: Notice of intent to waive the
According to NYSE, such testing should applications to: Nonmanufacturer Rule for Personal
be beneficial from both a technology U.S. Small Business Administration, Computers.
and a training perspective. Although Processing and Disbursement Center,
14925 Kingsport Road, Fort Worth, TX SUMMARY: The U.S. Small Business
preliminary steps have been taken—in Administration (SBA) is considering
the form of NYSE-provided training for granting a request for a waiver of the
both Floor brokers and specialists, Nonmanufacturer Rule for Personal
Escobar, Office of Disaster Assistance,
training by member organizations for Computers Manufacturing. According to
U.S. Small Business Administration,
their employees, and training by the request, no small business
409 3rd Street, SW., Suite 6050,
proprietary system vendors in the NYSE manufacturers are supplying this class
Washington, DC 20416.
trading environment for their training of product to the Federal government. If
SUPPLEMENTARY INFORMATION: Notice is granted, the waiver would allow
sessions—the Pilot should give the hereby given that as a result of Public
Exchange the opportunity to identify otherwise qualified regular dealers to
Law 106–50, the Veterans supply the products of any domestic
and address any system problems with Entrepreneurship and Small Business
these particular rules under the Hybrid manufacturer on a Federal contract set
Development Act of 1999, this notice aside for small businesses; service-
Market. Further, the Pilot should allow establishes the application filing period
users to gain essential practical disabled veteran-owned small business
for the Military Reservist Economic or SBA’s 8(a) Business Development
experience with the new systems and Injury Disaster Loan Program. Program.
processes. Therefore, the Commission Effective 10/1/2006, small businesses
finds that immediate implementation of employing military reservists may apply DATES: Comments and source
the Pilot, which is limited in both scope for economic injury disaster loans if information must be submitted October
and duration, should permit NYSE to those employees are called up to active 27, 2006.
remain on schedule to meet the duty during a period of military conflict ADDRESSES: You may submit comments
Regulation NMS compliance dates, existing on or after March 24, 1999 and and source information to Edith Butler,
comply with the NMS Linkage Plan and those employees are essential to the Program Analyst, U.S. Small Business
continue to implement its Hybrid success of the small business daily Administration, Office of Government
Market changes in an orderly manner. operations. Contracting, 409 3rd Street, SW., Suite
The purpose of the Military Reservist 8800, Washington, DC 20416.
V. Conclusion economic injury disaster loan program FOR FURTHER INFORMATION CONTACT:
(MREIDL) is to provide funds to eligible Edith Butler, Program Analyst, by
It is therefor ordered, pursuant to small businesses to meet its ordinary telephone at (202) 619–0422; by FAX at
Section 19(b)(2) of the Act, that the and necessary operating expenses that it (202) 481–1788; or by e-mail at
proposed rule change (SR–NYSE–2006– could have met, but is unable to meet, edith.butler@sba.gov.
82) is hereby approved on an because an essential employee was
accelerated basis until October 31, 2006. called-up to active duty in their role as SUPPLEMENTARY INFORMATION: Section
a military reservist. These loans are 8(a)(17) of the Small Business Act (Act),
For the Commission, by the Division of
intended only to provide the amount of 15 U.S.C. 637(a)(17), requires that
Market Regulation, by delegated authority.31
working capital needed by a small recipients of Federal contracts set aside
Nancy M. Morris, business to pay its necessary obligations for small businesses, service-disabled
Secretary. as they mature until operations return to veteran-owned small businesses, or
[FR Doc. E6–16897 Filed 10–11–06; 8:45 am] normal after the essential employee is SBA’s 8(a) Business Development
released from active duty. For Program provide the product of a small
information/applications contact 1– business manufacturer or processor, if
800–659–2955 or visit http:// the recipient is other than the actual
www.sba.gov. manufacturer or processor of the
rwilkins on PROD1PC63 with NOTICES

Applications for the Military Reservist product. This requirement is commonly

29 See also Hybrid Market Order for a discussion Economic Injury Disaster Loan Program referred to as the Nonmanufacturer
of the negative obligation, supra note 3. may be filed at the above address. Rule. The SBA regulations imposing
30 15 U.S.C. 78s(b)(2). The Interest Rate for eligible small this requirement are found at 13 CFR
31 17 CFR 200.30–3(a)(12). businesses is 4.000. 121.406(b). Section 8(a)(17)(b)(iv) of the

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