[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Notices]
[Pages 23637-23638]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10090]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-64321; File No. SR-NYSEAmex-2011-11]
Self-Regulatory Organizations; NYSE Amex LLC; Order Approving a
Proposed Rule Change Amending Rule 103B--NYSE Amex Equities To Modify
the Application of the Exchange's Designated Market Maker Allocation
Policy in the Event of a Merger Involving One or More Listed Companies
April 21, 2011.
I. Introduction
On February 24, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to amend Rule 103B--NYSE Amex Equities (``Exchange
Equities Rule 103B'') to modify the application of the
[[Page 23638]]
Exchange's Designated Market Maker (``DMM'') allocation policy in the
event of a merger involving one or more listed companies. The proposed
rule change was published for comment in the Federal Register on March
10, 2011.\3\ The Commission received no comment letters on the
proposal. This order approves the proposed rule change.
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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. 64040 (March 4,
2011), 76 FR 13249.
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II. Description of the Proposed Rule Change
Currently, Policy Note VI(D)(1) to Exchange Equities Rule 103B
provides that when two NYSE Amex listed companies merge, the post-
merger listed company is assigned to the DMM in the company that is
determined to be the survivor-in-fact (dominant company). Where no
survivor-in-fact can be identified, the post-merger listed company may
select one of the DMM units trading the merging companies without the
security being referred for reallocation, or it may request that the
matter be referred for allocation through the allocation process
pursuant to Exchange Equities Rule 103B, Section III.
In addition, Policy Note VI(D)(3) to Exchange Equities Rule 103B
provides that in situations involving the merger of a listed company
and an unlisted company, where the unlisted company is determined to be
the survivor-in-fact, the post-merger listed company may choose to
remain registered with the DMM unit that had traded the listed company
entity in the merger, or it may request that the matter be referred for
allocation through the allocation process pursuant to Exchange Equities
Rule 103B.
The Exchange proposes to amend Policy Notes VI(D)(1) and (3) to
Exchange Equities Rule 103B to provide that in all listed company
mergers, either between two listed companies or a listed company and an
unlisted company, the management of the post-merger listed company will
be able to choose to retain either of the incumbent DMMs (in the case
of a merger between two listed companies) or the incumbent DMM (in the
case of a merger between a listed company and an unlisted company) or
request to have the security referred for reallocation. In no case will
the policy dictate that a post-merger listed company must retain an
incumbent DMM unless it chooses to do so.
The Exchange also proposes to amend Policy Notes VI(D)(1) and (3)
to provide that a DMM unit that is ineligible to receive a new
allocation due to its failure to meet the requirements of Exchange
Equities Rule 103B, Section II(D) and (E) will be eligible to be
selected in its capacity as the DMM for one of the two pre-merger
listed companies (in the case of a merger between two listed companies)
or in its capacity as DMM of the pre-merger listed company (in the case
of a merger between a listed company and an unlisted company), but will
not be eligible to participate in the allocation process if the post-
merger company requests that the matter be referred for allocation
through the allocation process pursuant to Exchange Equities Rule 103B,
Section III. In the event that such a situation were to arise, the
Exchange would inform the listed company of such DMM unit's
ineligibility under Exchange Equities Rule 103B, Section II(D) or (E).
III. Discussion and Findings
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\4\
In particular, the Commission finds that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\5\ which requires, among
other things, that the rules of a national securities exchange be
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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\4\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
\5\ 15 U.S.C. 78f(b)(5).
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The Commission believes that the proposed rule change is consistent
with the Act because it would provide post-merger listed companies with
greater flexibility with respect to the DMM allocation process in
connection with a merger.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\6\ that the proposed rule change (SR-NYSEAmex-2011-11) be, and
hereby is, approved.
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\6\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
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\7\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10090 Filed 4-26-11; 8:45 am]
BILLING CODE 8011-01-P