[Federal Register Volume 76, Number 3 (Wednesday, January 5, 2011)]
[Notices]
[Pages 611-612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-33255]
[[Page 611]]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63615; File No. SR-NYSEAmex-2010-123]
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 Until the
Earlier of the Securities and Exchange Commission Approval To Make Such
Pilot Permanent or August 1, 2011
December 29, 2010.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 20, 2010, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') 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\ 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 the operation of its Supplemental
Liquidity Providers Pilot (``SLP Pilot'' or ``Pilot'') (See Rule 107B--
NYSE Amex Equities), currently scheduled to expire on January 31, 2011,
until the earlier of the Securities and Exchange Commission's (``SEC''
or ``Commission'') approval to make such Pilot permanent or August 1,
2011. 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 the operation of its Supplemental
Liquidity Providers Pilot,\3\ currently scheduled to expire on January
31, 2011, until the earlier of Commission approval to make such Pilot
permanent or August 1, 2011.
---------------------------------------------------------------------------
\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 Nos. 61841 (April 5, 2010), 75 FR 18560 (April
12, 2010) (SR-NYSEAmex-2010-33) (extending the operation of the SLP
Pilot to September 30, 2010); 62814 (September 1, 2010), 75 FR 54671
(September 8, 2010) (SR-NYSEAmex-2010-88) (extending the operation
of the SLP Pilot to January 31, 2011); 58877 (October 29, 2008), 73
FR 65904 (November 5, 2008) (SR-NYSE-2008-108) (establishing the SLP
Pilot); 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); 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); 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); 61840 (April 5,
2010), 75 FR 18563 (April 12, 2010) (SR-NYSE-2010-28) (extending the
operation of the SLP Pilot to September 30, 2010); and 62813
(September 1, 2010), 75 FR 54686 (September 8, 2010) (SR-NYSE-2010-
62) (extending the operation of the SLP Pilot to January 31, 2011).
---------------------------------------------------------------------------
Background \4\
---------------------------------------------------------------------------
\4\ The information contained herein is a summary of the NMM
Pilot and the SLP Pilot. See supra note 1 [sic] and infra [sic] note
3 for a fuller description of those pilots.
---------------------------------------------------------------------------
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'').\5\ The NYSE SLP Pilot was launched in coordination with the
NMM Pilot (see NYSE Rule 107B).
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 58845 (October 24,
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
---------------------------------------------------------------------------
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.'' \6\ Separately,
the NYSE established the SLP Pilot, which established SLPs as a new
class of market participants to supplement the liquidity provided by
DMMs.\7\
---------------------------------------------------------------------------
\6\ See NYSE Rule 103.
\7\ See NYSE and NYSE Amex Equities Rules 107B.
---------------------------------------------------------------------------
The NYSE adopted NYSE Rule 107B governing SLPs as a six-month pilot
program commencing in November 2008. This NYSE pilot has been extended
several times, most recently to January 31, 2011.\8\ The NYSE is in the
process of requesting an extension of their SLP Pilot until August 1,
2011 or until the Commission approves the pilot as permanent.\9\ The
extension of the NYSE SLP Pilot until August 1, 2011 runs parallel with
the extension of the NMM pilot: August 1, 2011, or until the Commission
approves the NMM Pilot as permanent.
---------------------------------------------------------------------------
\8\ 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); 61075 (November 30, 2009), 74 FR 64112 (December 7, 2009)
(SR-NYSE-2009-119) (extending SLP pilot program until March 30,
2010); 61840 (April 5, 2010), 75 FR 18563 (April 12, 2010) (SR-NYSE-
2010-28) (extending the SLP Pilot until September 30, 2010); and
62813 (September 1, 2010), 75 FR 54686 (September 8, 2010) (SR-NYSE-
2010-62) (extending the SLP Pilot until January 31, 2011).
\9\ See SR-NYSE-2010-86.
---------------------------------------------------------------------------
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. NYSE Amex Equities Rule 107B 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.\10\ The NYSE Amex Equities SLP Pilot is scheduled to end
operation on January 31, 2011 or such earlier time as the Commission
may determine to make the rules permanent.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 61308 (January 7,
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98).
---------------------------------------------------------------------------
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 (NYSE Amex Equities Rule 107B) should be
made permanent.
Through this filing the Exchange seeks to extend the current
operation of the SLP Pilot until August 1, 2011, in order to allow the
Exchange to formally submit a filing to the Commission to
[[Page 612]]
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 January 31, 2011.\11\
---------------------------------------------------------------------------
\11\ The NMM Pilot was scheduled to expire on January 31, 2011
as well. On December 17, 2010 the NYSE filed to extend the NMM Pilot
[sic] until August 1, 2011 (See SR-NYSE-2010-85) (extending the
operation of the New Market Model Pilot to August 1, 2011).
---------------------------------------------------------------------------
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)
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.
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 this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
Section 19(b)(3)(A) of the Act \12\ and Rule 19b-4(f)(6)
thereunder.\13\
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires a self-regulatory organization to provide the Commission
with written notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Exchange has fulfilled this requirement.
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
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-2010-123 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-2010-123. 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 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 a.m. and 3 p.m. Copies of the filing also will be
available for inspection and copying at the principal office of the
Exchange.\14\ 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-2010-123 and should be submitted on or before January 26,
2011.
---------------------------------------------------------------------------
\14\ The text of the proposed rule change is available on the
Commission's Web site at http://www.sec.gov.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
---------------------------------------------------------------------------
\15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-33255 Filed 1-4-11; 8:45 am]
BILLING CODE 8011-01-P