[Federal Register Volume 75, Number 69 (Monday, April 12, 2010)]
[Notices]
[Pages 18560-18561]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8220]
[[Page 18560]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61841; File No. SR-NYSEAmex-2010-33]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Extending the
Operation of Its Supplemental Liquidity Providers Pilot, Rule 107B--
NYSE Amex Equities Until the Earlier of the Securities and Exchange
Commission's Approval To Make Such Pilot Permanent or September 30,
2010
April 5, 2010.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on March 30, 2010, NYSE Amex LLC (``NYSE Amex'' 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.
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\1\ 15 U.S.C.78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend the operation of its Supplemental
Liquidity Providers Pilot (``SLP Pilot'' or ``Pilot'') (See Rule 107B--
NYSE Amex Equities) until the earlier of the Securities and Exchange
Commission's approval to make such Pilot permanent or September 30,
2010. The text of the proposed rule change is available on NYSE Amex's
Web site at http://www.nyse.com, on the Commission's Web site at http://www.sec.gov, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the 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 the operation of its Supplemental
Liquidity Providers Pilot \3\ approved by the Securities and Exchange
Commission (``SEC'' or ``Commission'') to operate until March 30, 2010,
until the earlier of the SEC's approval to make such Pilot permanent or
through September 30, 2010.
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\3\ See Securities Exchange Act Release No. 61308 (January 7,
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98)
(establishing the NYSE Amex Equities SLP Pilot). See also Securities
Exchange Act Release No. 58877 (October 29, 2008), 73 FR 65904
(November 5, 2008) (SR-NYSE-2008-108) (establishing the SLP Pilot).
See also Securities Exchange Act Release No. 59869 (May 6, 2009), 74
FR 22796 (May 14, 2009) (SR-NYSE-2009-46) (extending the operation
of the SLP Pilot to October 1, 2009). See also Securities Exchange
Act Release No. 60756 (October 1, 2009), 74 FR 51628 (October 7,
2009) (SR-NYSE-2009-100) (extending the operation of the New Market
Model and the SLP Pilots to November 30, 2009). See also Securities
Exchange Act Release No. 61075 (November 30, 2009), 74 FR 64112
(December 7, 2009) (SR-NYSE-2009-119) (extending the operation of
the SLP Pilot to March 30, 2010).
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Background
In October 2008, the New York Stock Exchange LLC (``NYSE'')
implemented significant changes to its market rules, execution
technology and the rights and obligations of its market participants
all of which were designed to improve execution quality on the NYSE.
These changes were all elements of the NYSE's and the Exchange's
enhanced market model referred to as the ``New Market Model'' (``NMM
Pilot'').\4\ The NYSE SLP Pilot was launched in coordination with the
NMM Pilot (see NYSE Rule 107B).
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\4\ See Securities Exchange Act Release No. 58845 (October 24,
2008) 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
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As part of the NMM Pilot, NYSE eliminated the function of
specialists on the Exchange creating a new category of market
participant, the Designated Market Maker or ``DMM.'' \5\ Separately,
the NYSE established the SLP Pilot, which established SLPs as a new
class of market participants to supplement the liquidity provided by
DMMs.\6\
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\5\ See NYSE Rule 103.
\6\ See NYSE and NYSE Amex Equities Rules 107B.
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The NYSE adopted NYSE Rule 107B governing SLPs as a six-month pilot
program commencing in November 2008. This NYSE pilot was extended
several times in the last 12 months, and most recently; the NYSE SLP
Pilot was extended to March 30, 2010.\7\ The NYSE is in the process of
requesting an extension of their SLP Pilot until September 30, 2010 or
until the Commission approves the pilot as permanent. The extension of
the NYSE SLP Pilot until September 30, 2010 runs parallel with the
extension of the NMM pilot: September 30, 2010, or until the Commission
approves the NMM Pilot as permanent.
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\7\ See Securities Exchange Act Release Nos. 58877 (October 29,
2008), 73 FR 65904 (November 5, 2008) (SR-NYSE-2008-108) (adopting
SLP pilot program); 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009)
(SR-NYSE-2009-46) (extending SLP pilot program until October 1,
2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009) (SR-
NYSE-2009-100) (extending SLP pilot program until November 30, 2009)
and SR-NYSE-2009-119 (extending SLP pilot program until March 30,
2010).
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Proposal To Extend the Operation of the NYSE Amex Equities SLP Pilot
NYSE Amex Equities established the SLP Pilot to provide incentives
for quoting, to enhance competition among the existing group of
liquidity providers, including the DMMs, and add new competitive market
participants. Rule 107B--NYSE Amex Equities is based on NYSE Rule 107B.
NYSE Amex Rule 107B was filed with the Commission on December 30, 2009,
as a ``me too'' filing for immediate effectiveness as a pilot
program.\8\ The NYSE Amex Equities SLP Pilot is scheduled to end
operation on March 30, 2010 or such earlier time as the Commission may
determine to make the rules permanent.
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\8\ See Securities Exchange Act Release No. 61308 (January 7,
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98).
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The Exchange believes that the SLP Pilot, in coordination with the
NMM Pilot and the NYSE SLP Pilot, allows the Exchange to provide its
market participants with a trading venue that utilizes an enhanced
market structure to encourage the addition of liquidity facilitate the
trading of larger orders more efficiently and operates to reward
aggressive liquidity providers. As such, the Exchange believes that the
rules governing the SLP Pilot (Rule 107B) should be made permanent.
Through this filing the Exchange seeks to extend the current
operation of the SLP Pilot until September 30, 2010, in order to allow
the Exchange to formally submit a filing to the Commission to convert
the Pilot rule to a permanent rule. The Exchange is currently preparing
a rule filing seeking permission to make the NYSE Amex Equities SLP
Pilot permanent, but does not expect that filing to be completed and
approved by the Commission before March 30, 2010.\9\
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\9\ The NMM Pilot was scheduled to expire on March 30, 2010 as
well. On March 12, 2010 the Exchange filed to extend the NMM Pilot
until September 30, 2010 (See Securities Exchange Act Release No.
61724 (March 17, 2010) (SR-NYSE-2010-25) (extending the operation of
the New Market Model Pilot to September 30, 2010).
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[[Page 18561]]
2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Act'')
for this proposed rule change is the requirement under Section 6(b)(5)
\10\ 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 Exchange
believes that the instant filing is consistent with these principles
because the SLP Pilot provides its market participants with a trading
venue that utilizes an enhanced market structure to encourage the
addition of liquidity and operates to reward aggressive liquidity
providers. Moreover, the instant filing requesting an extension of the
SLP Pilot will permit adequate time for: (i) The Exchange to prepare
and submit a filing to make the rules governing the SLP Pilot
permanent; (ii) public notice and comment; and (iii) completion of the
19b-4 approval process.
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\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change: (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) by its terms, does not become operative for 30 days from the
date on which it was filed, or such shorter time as the Commission may
designate, if consistent with the protection of investors and the
public interest, it has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the self-regulatory organization to submit to the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change, at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposal
may become operative immediately upon filing.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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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 pilot program will expire on
March 30, 2010, waiver of the operative delay is necessary so that no
interruption of the pilot program will occur. In addition, the
Commission notes that the Exchange has requested extensions of the
pilot to allow the Exchange time to formally request permanent approval
for the pilot. Therefore, the Commission designates the proposal
operative upon filing.\15\
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\15\ 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.
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 protected]. Please include
File Number SR-NYSEAmex-2010-33 on the subject line.
Paper Comments
Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEAmex-2010-33. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for Web site
viewing and printing in the Commission's Public Reference Room, 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
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-
NYSEAmex-2010-33 and should be submitted on or before May 3, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8220 Filed 4-9-10; 8:45 am]
BILLING CODE 8011-01-P