Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Operation of Its New Market Model Pilot Until the Earlier of Securities and Exchange Commission Approval To Make Such Pilot Permanent or March 30, 2010, 62368-62370 [E9-28350]
Download as PDF
62368
Federal Register / Vol. 74, No. 227 / Friday, November 27, 2009 / Notices
6(b) 10 of the Securities Exchange Act of
1934 (the ‘‘Act’’), in general, and
furthers the objectives of Section
6(b)(5) 11 in particular in that it is
designed to promote just and equitable
principles of trade, to prevent
fraudulent and manipulative acts, to
remove impediments to and to perfect
the mechanism for a free and open
market and a national market system
and, in general, to protect investors and
the public interest, by giving investors
more flexibility to closely tailor their
investment decisions.
from CBOE which is identical to the
current proposal in all material respects
and on which no comments were
received.15 Therefore, the proposal is
operative upon filing.
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.
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.
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:
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 does not: (i) Significantly affect
the protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days after the date of
the filing, 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 12 and Rule 19b–
4(f)(6) thereunder.13
The Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission hereby grants
that request.14 The Commission believes
that waiver of the operative delay is
consistent with the protection of
investors and the public interest
because it recently approved a proposal
10 15
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
12 15 U.S.C. 78s(b)(3)(A).
13 17 CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6) requires a self-regulatory organization to give
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 Commission
has waived this requirement in this case.
14 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
sroberts on DSKD5P82C1PROD with NOTICES
11 15
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18:08 Nov 25, 2009
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Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSEArca–2009–105 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–NYSEArca–2009–105. 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 (https://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 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; 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–NYSEArca–2009–105 and
should be submitted on or before
December 18, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28349 Filed 11–25–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61031; File No. SR–NYSE–
2009–113]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Extending the
Operation of Its New Market Model
Pilot Until the Earlier of Securities and
Exchange Commission Approval To
Make Such Pilot Permanent or March
30, 2010
November 19, 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
November 16, 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.
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 New Market Model
Pilot, currently scheduled to expire on
November 30, 2009, until the earlier of
Securities and Exchange Commission
approval to make such pilot permanent
or March 30, 2010. The text of the
proposed rule change is available at the
16 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
15 See Securities Exchange Act Release No. 60978,
supra note 4.
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Federal Register / Vol. 74, No. 227 / Friday, November 27, 2009 / Notices
Exchange, the Commission’s Public
Reference Room, and https://
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 New Market Model
Pilot 4 (‘‘NMM Pilot’’) approved by the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) currently
scheduled to expire on November 30,
2009 until the earlier of Securities and
Exchange Commission approval to make
such pilot permanent or March 30,
2010.
The Exchange notes that parallel
changes are proposed to be made to the
rules of the NYSE Amex LLC.5
Background 6
sroberts on DSKD5P82C1PROD with NOTICES
In October 2008, the 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
Exchange. These changes are all
elements of the Exchange’s enhanced
market model. Certain of the enhanced
market model changes were
implemented through a pilot program.
As part of the NMM Pilot, NYSE
eliminated the function of specialists on
the Exchange creating a new category of
market participant, the Designated
4 See Securities Exchange Act Release No. 58845
(October 24, 2008), 73 FR 64379 (October 29, 2008)
(SR–NYSE–2008–46); 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 NMM Pilot until the
earlier of Securities and Exchange Commission
approval to make such pilot permanent or
November 30, 2009).
5 See SR–NYSE Amex–2009–83.
6 The information contained herein is a summary
of the NMM Pilot, for a fuller description of the
pilots see supra note 1 [sic].
VerDate Nov<24>2008
18:08 Nov 25, 2009
Jkt 220001
Market Maker or DMM.7 The DMMs,
like specialists, have affirmative
obligations to make an orderly market,
including continuous quoting
requirements and obligations to re-enter
the market when reaching across to
execute against trading interest. Unlike
specialists, DMMs have a minimum
quoting requirement 8 in their assigned
securities and no longer have a negative
obligation. DMMs are also no longer
agents for public customer orders.9
In addition, the Exchange
implemented a system change that
allowed DMMs to create a schedule of
additional non-displayed liquidity at
various price points where the DMM is
willing to interact with interest and
provide price improvement to orders in
the Exchange’s system. This schedule is
known as the DMM Capital
Commitment Schedule (‘‘CCS’’).10 CCS
provides the Display Book® 11 with the
amount of shares that the DMM is
willing to trade at price points outside,
at and inside the Exchange BBO. CCS
interest is separate and distinct from
other DMM interest in that it serves as
the interest of last resort.
The NMM Pilot further modified the
logic for allocating executed shares
among market participants having
trading interest at a price point upon
execution of incoming orders. The
modified logic rewards displayed orders
that establish the Exchange’s best bid or
Exchange’s best offer. During the
operation of the NMM Pilot orders or
portions thereof that establish priority 12
retain that priority until the portion of
the order that established priority is
exhausted. Where no one order has
established priority, shares are
distributed among all market
participants on parity.
The NMM Pilot was originally
scheduled to end operation on October
1, 2009, or such earlier time as the
Commission may determine to make the
rules permanent. The Exchange filed to
extend the operation of the Pilot to
November 30, 2009, in order to prepare
a rule filing seeking permission to make
7 See
NYSE Rule 103.
NYSE Rules 104.
9 See NYSE Rule 60; See also NYSE Rules 104
and 1000.
10 See NYSE Rule 1000.
11 The Display Book® system is an order
management and execution facility. The Display
Book system receives and displays orders to the
DMMs, contains the order information, and
provides a mechanism to execute and report
transactions and publish the results to the
Consolidated Tape. The Display Book system is
connected to a number of other Exchange systems
for the purposes of comparison, surveillance, and
reporting information to customers and other
market data and national market systems.
12 See NYSE Rule 72(a)(ii).
8 See
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Fmt 4703
Sfmt 4703
62369
the above described changes
permanent.13 The Exchange is currently
still preparing such formal submission
but does not expect that filing to be
completed and approved by the
Commission before November 30, 2009.
Proposal To Extend the Operation of the
NMM Pilot
The NYSE established the NMM Pilot
to provide incentives for quoting, to
enhance competition among the existing
group of liquidity providers and to have
its market maker be a new competitive
market participant. The Exchange
believes that the NMM 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 NMM Pilot should be
made permanent. Through this filing the
Exchange seeks to extend the current
operation of the NMM Pilot until March
30, 2010, in order to allow the Exchange
time to formally submit a filing to the
Commission to convert the pilot rules to
permanent rules.
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 NMM Pilot
provides 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. Moreover, the
instant filing requesting an extension of
the Pilot will permit adequate time for:
(i) the Exchange to prepare and submit
a filing to make the rules governing the
NMM Pilot permanent; (ii) public notice
and comment; and (iii) completion of
the 19b–4 approval process.
13 See Securities Exchange Act Release No. 60756
(October 1, 2009), 74 FR 51628 (October 7, 2009)
(SR–NYSE–2009–100).
E:\FR\FM\27NON1.SGM
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62370
Federal Register / Vol. 74, No. 227 / Friday, November 27, 2009 / Notices
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 14 and Rule 19b–
4(f)(6) thereunder.15
A proposed rule change filed under
Rule 19b–4(f)(6) 16 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),17 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.
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 November 30,
2009, 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
14 15
U.S.C. 78s(b)(3)(A).
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.
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
sroberts on DSKD5P82C1PROD with NOTICES
15 17
VerDate Nov<24>2008
18:08 Nov 25, 2009
Jkt 220001
request permanent approval for the
pilot. Therefore, the Commission
designates the proposal operative upon
filing.18
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2009–113 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–2009–113. 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 (https://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
18 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).
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
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–
2009–113 and should be submitted on
or before December 18, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–28350 Filed 11–25–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–61036; File No. SR–
NYSEAmex–2009–84]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change to Amend the $1.00 Strike
Program to Allow Low-Strike LEAPS
November 19, 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 November
18, 2009, 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 Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Commentary .06 to Rule 903, Series of
Options Open for Trading to permit the
expansion of the $1.00 Strike Program.
The text of the proposed rule change is
attached as Exhibit 5 to the 19b–4 form.
A copy of this filing is available on the
Exchange’s Web site at https://
www.nyse.com, at the Exchange’s
principal office and at the Commission’s
Public Reference Room.
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
E:\FR\FM\27NON1.SGM
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Agencies
[Federal Register Volume 74, Number 227 (Friday, November 27, 2009)]
[Notices]
[Pages 62368-62370]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-28350]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61031; File No. SR-NYSE-2009-113]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Extending the Operation of Its New Market Model Pilot Until the Earlier
of Securities and Exchange Commission Approval To Make Such Pilot
Permanent or March 30, 2010
November 19, 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 November 16, 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 the operation of its New Market
Model Pilot, currently scheduled to expire on November 30, 2009, until
the earlier of Securities and Exchange Commission approval to make such
pilot permanent or March 30, 2010. The text of the proposed rule change
is available at the
[[Page 62369]]
Exchange, the Commission's Public Reference Room, and https://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 New Market
Model Pilot \4\ (``NMM Pilot'') approved by the Securities and Exchange
Commission (``SEC'' or ``Commission'') currently scheduled to expire on
November 30, 2009 until the earlier of Securities and Exchange
Commission approval to make such pilot permanent or March 30, 2010.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 58845 (October 24,
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46); 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 NMM Pilot until the earlier of Securities and Exchange
Commission approval to make such pilot permanent or November 30,
2009).
---------------------------------------------------------------------------
The Exchange notes that parallel changes are proposed to be made to
the rules of the NYSE Amex LLC.\5\
---------------------------------------------------------------------------
\5\ See SR-NYSE Amex-2009-83.
---------------------------------------------------------------------------
Background \6\
---------------------------------------------------------------------------
\6\ The information contained herein is a summary of the NMM
Pilot, for a fuller description of the pilots see supra note 1
[sic].
---------------------------------------------------------------------------
In October 2008, the 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 Exchange. These changes are all elements of the
Exchange's enhanced market model. Certain of the enhanced market model
changes were implemented through a pilot program.
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.\7\ The DMMs, like
specialists, have affirmative obligations to make an orderly market,
including continuous quoting requirements and obligations to re-enter
the market when reaching across to execute against trading interest.
Unlike specialists, DMMs have a minimum quoting requirement \8\ in
their assigned securities and no longer have a negative obligation.
DMMs are also no longer agents for public customer orders.\9\
---------------------------------------------------------------------------
\7\ See NYSE Rule 103.
\8\ See NYSE Rules 104.
\9\ See NYSE Rule 60; See also NYSE Rules 104 and 1000.
---------------------------------------------------------------------------
In addition, the Exchange implemented a system change that allowed
DMMs to create a schedule of additional non-displayed liquidity at
various price points where the DMM is willing to interact with interest
and provide price improvement to orders in the Exchange's system. This
schedule is known as the DMM Capital Commitment Schedule (``CCS'').\10\
CCS provides the Display Book[supreg] \11\ with the amount of shares
that the DMM is willing to trade at price points outside, at and inside
the Exchange BBO. CCS interest is separate and distinct from other DMM
interest in that it serves as the interest of last resort.
---------------------------------------------------------------------------
\10\ See NYSE Rule 1000.
\11\ The Display Book[supreg] system is an order management and
execution facility. The Display Book system receives and displays
orders to the DMMs, contains the order information, and provides a
mechanism to execute and report transactions and publish the results
to the Consolidated Tape. The Display Book system is connected to a
number of other Exchange systems for the purposes of comparison,
surveillance, and reporting information to customers and other
market data and national market systems.
---------------------------------------------------------------------------
The NMM Pilot further modified the logic for allocating executed
shares among market participants having trading interest at a price
point upon execution of incoming orders. The modified logic rewards
displayed orders that establish the Exchange's best bid or Exchange's
best offer. During the operation of the NMM Pilot orders or portions
thereof that establish priority \12\ retain that priority until the
portion of the order that established priority is exhausted. Where no
one order has established priority, shares are distributed among all
market participants on parity.
---------------------------------------------------------------------------
\12\ See NYSE Rule 72(a)(ii).
---------------------------------------------------------------------------
The NMM Pilot was originally scheduled to end operation on October
1, 2009, or such earlier time as the Commission may determine to make
the rules permanent. The Exchange filed to extend the operation of the
Pilot to November 30, 2009, in order to prepare a rule filing seeking
permission to make the above described changes permanent.\13\ The
Exchange is currently still preparing such formal submission but does
not expect that filing to be completed and approved by the Commission
before November 30, 2009.
---------------------------------------------------------------------------
\13\ See Securities Exchange Act Release No. 60756 (October 1,
2009), 74 FR 51628 (October 7, 2009) (SR-NYSE-2009-100).
---------------------------------------------------------------------------
Proposal To Extend the Operation of the NMM Pilot
The NYSE established the NMM Pilot to provide incentives for
quoting, to enhance competition among the existing group of liquidity
providers and to have its market maker be a new competitive market
participant. The Exchange believes that the NMM 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 NMM Pilot should be made
permanent. Through this filing the Exchange seeks to extend the current
operation of the NMM Pilot until March 30, 2010, in order to allow the
Exchange time to formally submit a filing to the Commission to convert
the pilot rules to permanent rules.
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 NMM Pilot provides 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.
Moreover, the instant filing requesting an extension of the Pilot will
permit adequate time for: (i) the Exchange to prepare and submit a
filing to make the rules governing the NMM Pilot permanent; (ii) public
notice and comment; and (iii) completion of the 19b-4 approval process.
[[Page 62370]]
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 \14\ and Rule 19b-4(f)(6) thereunder.\15\
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 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) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\17\ 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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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 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
November 30, 2009, 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.\18\
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\18\ 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 (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2009-113 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-2009-113. 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 (https://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-2009-113 and should be submitted on or before December 18, 2009.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-28350 Filed 11-25-09; 8:45 am]
BILLING CODE 8011-01-P