Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving a Proposed Rule Change Amending Exchange Rule 103B 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, 23637 [2011-10091]

Download as PDF Federal Register / Vol. 76, No. 81 / Wednesday, April 27, 2011 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64322; File No. SR–NYSE– 2011–09] Self-Regulatory Organizations; New York Stock Exchange LLC; Order Approving a Proposed Rule Change Amending Exchange Rule 103B 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, New York Stock Exchange LLC (‘‘NYSE’’ or ‘‘Exchange’’) 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 Exchange Rule 103B to modify the application of the 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. WReier-Aviles on DSKGBLS3C1PROD with NOTICES II. Description of the Proposed Rule Change Currently, Policy Note VI(D)(1) to Exchange Rule 103B provides that when two NYSE 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 Rule 103B, Section III. In addition, Policy Note VI(D)(3) to Exchange 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 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 64039 (March 4, 2011), 76 FR 13251. VerDate Mar<15>2010 15:36 Apr 26, 2011 Jkt 223001 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 Rule 103B. The Exchange proposes to amend Policy Notes VI(D)(1) and (3) to Exchange 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 postmerger 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 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 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 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 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). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 23637 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 Commission believes that the proposed rule change is consistent with the Act because it would provide listed companies involved in a merger with greater flexibility with respect to the DMM allocation process. Moreover, the Commission notes that Section 806.01 of the NYSE Listed Company Manual provides that a listed company can request a change of DMM at any time. Thus, giving post-merger listed companies greater control over the allocation decision in connection with a merger is consistent with the Exchange’s current DMM allocation policy. IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,6 that the proposed rule change (SR–NYSE–2011– 09) be, and hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–10091 Filed 4–26–11; 8:45 am] BILLING CODE 8011–01–P 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 6 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 7 17 E:\FR\FM\27APN1.SGM 27APN1

Agencies

[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Notices]
[Page 23637]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10091]



[[Page 23637]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64322; File No. SR-NYSE-2011-09]


Self-Regulatory Organizations; New York Stock Exchange LLC; Order 
Approving a Proposed Rule Change Amending Exchange Rule 103B 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, New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') 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 Exchange Rule 103B to modify the 
application of the 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 64039 (March 4, 
2011), 76 FR 13251.
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II. Description of the Proposed Rule Change

    Currently, Policy Note VI(D)(1) to Exchange Rule 103B provides that 
when two NYSE 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 Rule 
103B, Section III.
    In addition, Policy Note VI(D)(3) to Exchange 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 Rule 
103B.
    The Exchange proposes to amend Policy Notes VI(D)(1) and (3) to 
Exchange 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 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 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 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

    The Commission believes that the proposed rule change is consistent 
with the Act because it would provide listed companies involved in a 
merger with greater flexibility with respect to the DMM allocation 
process. Moreover, the Commission notes that Section 806.01 of the NYSE 
Listed Company Manual provides that a listed company can request a 
change of DMM at any time. Thus, giving post-merger listed companies 
greater control over the allocation decision in connection with a 
merger is consistent with the Exchange's current DMM allocation policy.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-NYSE-2011-09) 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\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10091 Filed 4-26-11; 8:45 am]
BILLING CODE 8011-01-P