Self-Regulatory Organizations; NYSE Amex 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 August 1, 2011, 598-600 [2010-33259]
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<![CDATA[
598
Federal Register / Vol. 76, No. 3 / Wednesday, January 5, 2011 / Notices
Current old fee
2011 proposed fee
Par value
millions
Par value
millions
5,001 to 7,500 trades per month .............................................................................................................
7,501 to 10,000 trades per month ...........................................................................................................
10,001 to 12,500 trades per month .........................................................................................................
12,501 and over trades per month ..........................................................................................................
FICC states that the proposed rule
change is consistent with the
requirements of Section 17A of the Act 4
and the rules and regulations
thereunder because it updates FICC’s fee
schedule and provides for the equitable
allocation of fees among its participants.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
FICC has not solicited or received
written comments relating to the
proposed rule change. FICC will notify
the Commission of any comments it
receives.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 5 and Rule 19b–
4(f)(2) 6 because the proposed rule
change establishes or changes a due, fee,
or other charge applicable only to a
member. 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
jlentini on DSKJ8SOYB1PROD with NOTICES
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:
U.S.C. 78q–1.
note 2.
6 Supra note 3.
5 Supra
VerDate Mar<15>2010
16:26 Jan 04, 2011
Jkt 223001
• 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
No. SR–FICC–2010–10 on the subject
line.
Paper Comments
FICC does not believe that the
proposed rule change will have any
impact or impose any burden on
competition.
4 15
Electronic 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 No.
SR–FICC–2010–10. 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 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 filings
also will be available for inspection and
copying at FICC’s principal office and
on FICC’s Web site at https://
www.dtcc.com/legal/rule_filings/ficc/
2010.php. 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 submission
should refer to File No. SR–FICC–2010–
10 and should be submitted on or before
January 26, 2011.
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For the Commission by the Division of
Trading and Markets pursuant to delegated
authority.7
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–33252 Filed 1–4–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63620; File No. SR–
NYSEAmex–2010–122]
Self-Regulatory Organizations; NYSE
Amex 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 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
17, 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.
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
January 31, 2011, until the earlier of
Securities and Exchange Commission
(‘‘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
7 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
E:\FR\FM\05JAN1.SGM
05JAN1
Federal Register / Vol. 76, No. 3 / Wednesday, January 5, 2011 / Notices
Commission’s Public Reference Room,
and https://www.nyse.com.
rules of New York Stock Exchange
LLC.5
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
Background 6
In December 2008, NYSE Amex
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 that it implemented
through the NMM Pilot.
As part of the NMM Pilot, NYSE
Amex 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
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 Best Bid or
Best Offer (‘‘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
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
jlentini on DSKJ8SOYB1PROD with NOTICES
The Exchange proposes to extend the
operation of its New Market Model Pilot
(‘‘NMM Pilot’’) that was adopted
pursuant to its merger with the New
York Stock Exchange LLC.3 The NMM
Pilot was approved to operate until
October 1, 2009. The Exchange filed to
extend the operation of the Pilot to
November 30, 2009, March 30, 2010,
September 30, 2010 and January 31,
2011, respectively.4 The Exchange now
seeks to extend the operation of the
NMM Pilot, currently scheduled to
expire on January 31, 2011, until the
earlier of Commission approval to make
such pilot permanent or August 1, 2011.
The Exchange notes that parallel
changes are proposed to be made to the
3 NYSE Euronext acquired The Amex
Membership Corporation (‘‘AMC’’) pursuant to an
Agreement and Plan of Merger, dated January 17,
2008 (the ‘‘Merger’’). In connection with the Merger,
the Exchange’s predecessor, the American Stock
Exchange LLC (‘‘Amex’’), a subsidiary of AMC,
became a subsidiary of NYSE Euronext called NYSE
Alternext US LLC. See Securities Exchange Act
Release No. 58673 (September 29, 2008), 73 FR
57707 (October 3, 2008) (SR–NYSE–2008–60 and
SR–Amex-2008–62) (approving the Merger).
Subsequently NYSE Alternext US LLC was renamed
NYSE Amex LLC and continues to operate as a
national securities exchange registered under
Section 6 of the Securities Exchange Act of 1934,
as amended (the ‘‘Act’’). See Securities Exchange
Act Release No. 59575 (March 13, 2009), 74 FR
11803 (March 19, 2009) (SR–NYSEALTR–2009–24).
4 See Securities Exchange Act Release No. 60758
(October 1, 2009), 74 FR 51639 (October 7, 2009)
(SR–NYSEAmex-2009–65). See also Securities
Exchange Act Release Nos. 61030 (November 19,
2009), 74 FR 62365 (November 27, 2009) (SR–
NYSEAmex-2009–83); and 61725 (March 17, 2010),
75 FR 14223 (March 24, 2010) (SR–NYSEAmex2010–28); Securities Exchange Act Release No.
62820 (September 1, 2010), 75 FR 54935 (September
9, 2010) (SR–NYSEAmex-2010–86).
VerDate Mar<15>2010
16:26 Jan 04, 2011
Jkt 223001
5 See
SR–NYSE–2010–85.
information contained herein is a summary
of the NMM Pilot. See Securities Exchange Act
Release No. 58845 (October 24, 2008), 73 FR 64379
(October 29, 2008) (SR–NYSE–2008–46) for a fuller
description.
7 See NYSE Amex Equities Rule 103.
8 See NYSE Amex Equities Rule 104.
9 See NYSE Amex Equities Rule 60; see also
NYSE Amex Equities Rules 104 and 1000.
10 See NYSE Amex Equities 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.
6 The
PO 00000
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Fmt 4703
Sfmt 4703
599
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 BBO.
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 on four
occasions 13 in order to prepare a rule
filing seeking permission to make the
above described changes permanent.
The Exchange is currently still
preparing such formal submission but
does not expect that filing to be
completed and approved by the
Commission before January 31, 2011.
Proposal To Extend the Operation of the
NMM Pilot
NYSE Amex established the NMM
Pilot to provide incentives for quoting,
to enhance competition among the
existing group of liquidity providers and
add 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
August 1, 2011, 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
12 See
13 See
E:\FR\FM\05JAN1.SGM
NYSE Amex Equities Rule 72(a)(ii).
supra note 2 [sic].
05JAN1
600
Federal Register / Vol. 76, No. 3 / Wednesday, January 5, 2011 / Notices
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 NMM 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.
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 14 and
Rule 19b–4(f)(6) thereunder.15
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.
jlentini on DSKJ8SOYB1PROD with NOTICES
14 15
U.S.C. 78s(b)(3)(A).
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.
15 17
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16:26 Jan 04, 2011
Jkt 223001
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–NYSEAmex-2010–122 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.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.17
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010–33259 Filed 1–4–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–63614; File No. SR–NYSE–
2010–84]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Making
Permanent NYSE Rule 123C(9)(a)(1)
and Amending Rule 123C(9)(a)(1)(iii)
December 29, 2010.
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 December
All submissions should refer to File
20, 2010, New York Stock Exchange
Number SR–NYSEAmex-2010–122. This LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
file number should be included on the
with the Securities and Exchange
subject line if e-mail is used. To help the Commission (the ‘‘Commission’’) the
Commission process and review your
proposed rule change as described in
comments more efficiently, please use
Items I and II below, which Items have
only one method. The Commission will been prepared by the self-regulatory
post all comments on the Commission’s organization. The Commission is
Internet Web site (https://www.sec.gov/
publishing this notice to solicit
rules/sro.shtml). Copies of the
comments on the proposed rule change
submission, all subsequent
from interested persons.
amendments, all written statements
I. Self-Regulatory Organization’s
with respect to the proposed rule
Statement of the Terms of Substance of
change that are filed with the
the Proposed Rule Change
Commission, and all written
communications relating to the
The Exchange proposes to make
proposed rule change between the
permanent NYSE Rule 123C(9)(a)(1),
Commission and any person, other than which currently operates on a pilot
those that may be withheld from the
basis. The Exchange also proposes to
public in accordance with the
amend Rule 123C(9)(a)(1)(iii) to
provisions of 5 U.S.C. 552, will be
eliminate the requirement that only
available for website viewing and
Floor brokers can represent interest after
printing in the Commission’s Public
4:00 p.m. The text of the proposed rule
Reference Room, 100 F Street, NE.,
change is available at the Exchange, the
Washington, DC 20549, on official
Commission’s Public Reference Room,
business days between the hours of 10
https://www.sec.gov, and https://
a.m. and 3 p.m. Copies of the filing also www.nyse.com.
will be available for inspection and
II. Self-Regulatory Organization’s
copying at the principal office of the
Exchange.16 All comments received will Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
be posted without change; the
Change
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–2010–122 and should be
submitted on or before January 26, 2011.
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
17 17
16 The
text of the proposed rule change is
available on the Commission’s Web site at https://
www.sec.gov.
PO 00000
Frm 00064
Fmt 4703
Sfmt 4703
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\05JAN1.SGM
05JAN1
]]>Agencies
[Federal Register Volume 76, Number 3 (Wednesday, January 5, 2011)]
[Notices]
[Pages 598-600]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-33259]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-63620; File No. SR-NYSEAmex-2010-122]
Self-Regulatory Organizations; NYSE Amex 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 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 17, 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 New Market
Model Pilot, currently scheduled to expire on January 31, 2011, until
the earlier of Securities and Exchange Commission (``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
[[Page 599]]
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 (``NMM Pilot'') that was adopted pursuant to its merger
with the New York Stock Exchange LLC.\3\ The NMM Pilot was approved to
operate until October 1, 2009. The Exchange filed to extend the
operation of the Pilot to November 30, 2009, March 30, 2010, September
30, 2010 and January 31, 2011, respectively.\4\ The Exchange now seeks
to extend the operation of the NMM Pilot, currently scheduled to expire
on January 31, 2011, until the earlier of Commission approval to make
such pilot permanent or August 1, 2011.
---------------------------------------------------------------------------
\3\ NYSE Euronext acquired The Amex Membership Corporation
(``AMC'') pursuant to an Agreement and Plan of Merger, dated January
17, 2008 (the ``Merger''). In connection with the Merger, the
Exchange's predecessor, the American Stock Exchange LLC (``Amex''),
a subsidiary of AMC, became a subsidiary of NYSE Euronext called
NYSE Alternext US LLC. See Securities Exchange Act Release No. 58673
(September 29, 2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60
and SR-Amex-2008-62) (approving the Merger). Subsequently NYSE
Alternext US LLC was renamed NYSE Amex LLC and continues to operate
as a national securities exchange registered under Section 6 of the
Securities Exchange Act of 1934, as amended (the ``Act''). See
Securities Exchange Act Release No. 59575 (March 13, 2009), 74 FR
11803 (March 19, 2009) (SR-NYSEALTR-2009-24).
\4\ See Securities Exchange Act Release No. 60758 (October 1,
2009), 74 FR 51639 (October 7, 2009) (SR-NYSEAmex-2009-65). See also
Securities Exchange Act Release Nos. 61030 (November 19, 2009), 74
FR 62365 (November 27, 2009) (SR-NYSEAmex-2009-83); and 61725 (March
17, 2010), 75 FR 14223 (March 24, 2010) (SR-NYSEAmex-2010-28);
Securities Exchange Act Release No. 62820 (September 1, 2010), 75 FR
54935 (September 9, 2010) (SR-NYSEAmex-2010-86).
---------------------------------------------------------------------------
The Exchange notes that parallel changes are proposed to be made to
the rules of New York Stock Exchange LLC.\5\
---------------------------------------------------------------------------
\5\ See SR-NYSE-2010-85.
---------------------------------------------------------------------------
Background \6\
---------------------------------------------------------------------------
\6\ The information contained herein is a summary of the NMM
Pilot. See Securities Exchange Act Release No. 58845 (October 24,
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) for a fuller
description.
---------------------------------------------------------------------------
In December 2008, NYSE Amex 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 that it implemented through the NMM
Pilot.
As part of the NMM Pilot, NYSE Amex 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 Amex Equities Rule 103.
\8\ See NYSE Amex Equities Rule 104.
\9\ See NYSE Amex Equities Rule 60; see also NYSE Amex Equities
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[reg] \11\ with the amount of shares that
the DMM is willing to trade at price points outside, at and inside the
Exchange Best Bid or Best Offer (``BBO''). CCS interest is separate and
distinct from other DMM interest in that it serves as the interest of
last resort.
---------------------------------------------------------------------------
\10\ See NYSE Amex Equities 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.
---------------------------------------------------------------------------
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 BBO. 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.
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\12\ See NYSE Amex Equities Rule 72(a)(ii).
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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 on four occasions \13\ in order to prepare a rule filing seeking
permission to make the above described changes permanent. The Exchange
is currently still preparing such formal submission but does not expect
that filing to be completed and approved by the Commission before
January 31, 2011.
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\13\ See supra note 2 [sic].
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Proposal To Extend the Operation of the NMM Pilot
NYSE Amex established the NMM Pilot to provide incentives for
quoting, to enhance competition among the existing group of liquidity
providers and add 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 August 1, 2011, 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
[[Page 600]]
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 NMM 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.
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 \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 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.
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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 (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSEAmex-2010-122 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-2010-122. 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 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.\16\ 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-2010-122 and should be submitted on or before January 26,
2011.
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\16\ The text of the proposed rule change is available on the
Commission's Web site at https://www.sec.gov.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-33259 Filed 1-4-11; 8:45 am]
BILLING CODE 8011-01-P
