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 January 31, 2012, 39453-39455 [2011-16887]

Download as PDF Federal Register / Vol. 76, No. 129 / Wednesday, July 6, 2011 / Notices 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–CHX–2011–14 on the subject line. sroberts on DSK5SPTVN1PROD with NOTICES 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–CHX–2011–14. 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 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–CHX– 2011–14 and should be submitted on or before July 27, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–16854 Filed 7–5–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64773; File No. SR– NYSEAmex–2011–43] 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 January 31, 2012 June 29, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 21, 2011, NYSE Amex LLC (‘‘NYSE Amex’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II, and III 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 the Substance of the Proposed Rule Change The Exchange proposes to extend the operation of its New Market Model Pilot, currently scheduled to expire on August 1, 2011, until the earlier of Securities and Exchange Commission (‘‘Commission’’) approval to make such pilot permanent or January 31, 2012. The text of the proposed rule change is available at the 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 Exchange 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 these statements may be examined at the places specified in Item IV below. The 1 15 10 17 CFR 200.30–3(a)(12). VerDate Mar<15>2010 18:17 Jul 05, 2011 2 17 Jkt 223001 PO 00000 U.S.C. 78s(b)(1). CFR 240.19b–4. Frm 00078 Fmt 4703 Sfmt 4703 39453 Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects 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 (‘‘NYSE’’).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, January 31, 2011, and August 1, 2011, respectively.4 The Exchange now seeks to extend the operation of the NMM Pilot, currently scheduled to expire on August 1, 2011, until the earlier of Commission approval to make such pilot permanent or January 31, 2012. The Exchange notes that parallel changes are proposed to be made to the rules of NYSE.5 Background 6 In December 2008, NYSE Amex implemented significant changes to its equities market rules, execution technology and the rights and obligations of its equities market participants all of which were designed 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); 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); and 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) (SR–NYSEAmex–2010–123). 5 See SR–NYSE–2010–29. 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. E:\FR\FM\06JYN1.SGM 06JYN1 39454 Federal Register / Vol. 76, No. 129 / Wednesday, July 6, 2011 / Notices 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 equity 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 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 7 See NYSE Amex Equities Rule 103. 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. 12 See NYSE Amex Equities Rule 72(a)(ii). sroberts on DSK5SPTVN1PROD with NOTICES 8 See VerDate Mar<15>2010 18:17 Jul 05, 2011 Jkt 223001 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 five 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 August 1, 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 January 31, 2012, 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 NMM Pilot will permit adequate PO 00000 13 See supra note 5. Frm 00079 Fmt 4703 Sfmt 4703 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 The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 14 and Rule 19b–4(f)(6) thereunder.15 Because the 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 prior to 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, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder.16 A proposed rule change filed under Rule 19b–4(f)(6) 17 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),18 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if 14 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 16 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. 17 17 CFR 240.19b–4(f)(6). 18 17 CFR 240.19b–4(f)(6)(iii). 15 17 E:\FR\FM\06JYN1.SGM 06JYN1 Federal Register / Vol. 76, No. 129 / Wednesday, July 6, 2011 / Notices 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–NYSEAmex–2011–43 on the subject line. Paper Comments sroberts on DSK5SPTVN1PROD with NOTICES • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. should be submitted on or before July 27, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.19 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–16887 Filed 7–5–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–64772; File No. SR– NYSEAmex–2011–44] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Operation of Its Supplemental Liquidity Providers Pilot Until the Earlier of the Securities and Exchange Commission’s Approval To Make Such Pilot Permanent or January 31, 2012 June 29, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on June 21, 2011, NYSE Amex LLC (‘‘NYSEAmex’’ or the ‘‘Exchange’’) filed with the All submissions should refer to File Number SR–NYSEAmex–2011–43. This Securities and Exchange Commission (‘‘Commission’’) the proposed rule file number should be included on the subject line if e-mail is used. To help the change as described in Items I, II, and III below, which Items have been Commission process and review your prepared by the Exchange. The comments more efficiently, please use only one method. The Commission will Commission is publishing this notice to post all comments on the Commission’s solicit comments on the proposed rule change from interested persons. Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the I. Self-Regulatory Organization’s submission, all subsequent Statement of the Terms of the Substance amendments, all written statements of the Proposed Rule Change with respect to the proposed rule The Exchange proposes to extend the change that are filed with the operation of its Supplemental Liquidity Commission, and all written Providers Pilot (‘‘SLP Pilot’’ or ‘‘Pilot’’) communications relating to the (See Rule 107B—NYSE Amex Equities), proposed rule change between the Commission and any person, other than currently scheduled to expire on August 1, 2011, until the earlier of the those that may be withheld from the Securities and Exchange Commission’s public in accordance with the (‘‘Commission’’) approval to make such provisions of 5 U.S.C. 552, will be Pilot permanent or January 31, 2012. available for Web site viewing and The text of the proposed rule change is printing in the Commission’s Public available at the Exchange, the Reference Room on official business Commission’s Public Reference Room, days between the hours of 10 a.m. and and https://www.nyse.com. 3 p.m. Copies of such filing also will be available for inspection and copying at II. Self-Regulatory Organization’s the principal offices of the Exchange. Statement of the Purpose of, and All comments received will be posted Statutory Basis for, the Proposed Rule without change; the Commission does Change not edit personal identifying In its filing with the Commission, the information from submissions. You Exchange included statements should submit only information that you wish to make available publicly. All 19 17 CFR 200.30–3(a)(12). submissions should refer to File 1 15 U.S.C. 78s(b)(1). Number SR–NYSEAmex–2011–43, and 2 17 CFR 240.19b–4. VerDate Mar<15>2010 18:17 Jul 05, 2011 Jkt 223001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 39455 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 these 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to extend the operation of its Supplemental Liquidity Providers Pilot,3 currently scheduled to expire on August 1, 2011, until the earlier of Commission approval to make such Pilot permanent or January 31, 2012. Background 4 In October 2008, the New York Stock Exchange LLC (‘‘NYSE’’) implemented significant changes to its market rules, execution technology and the rights and obligations of its market participants all of which were designed to improve execution quality on the NYSE. These changes were all elements of the NYSE’s and the Exchange’s enhanced market model referred to as the ‘‘New Market Model’’ (‘‘NMM Pilot’’).5 The NYSE SLP 3 See Securities Exchange Act Release No. 61308 (January 7, 2010), 75 FR 2573 (January 15, 2010) (SR–NYSEAmex–2009–98) (establishing the NYSE Amex Equities SLP Pilot). See also Securities Exchange Act Release Nos. 61841 (April 5, 2010), 75 FR 18560 (April 12, 2010) (SR–NYSEAmex– 2010–33) (extending the operation of the SLP Pilot to September 30, 2010); 62814 (September 1, 2010), 75 FR 54671 (September 8, 2010) (SR–NYSEAmex– 2010–88) (extending the operation of the SLP Pilot to January 31, 2011); 58877 (October 29, 2008), 73 FR 65904 (November 5, 2008) (SR–NYSE–2008– 108) (establishing the SLP Pilot); 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009) (SR–NYSE– 2009–46) (extending the operation of the SLP Pilot to October 1, 2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009) (SR–NYSE–2009–100) (extending the operation of the New Market Model and the SLP Pilots to November 30, 2009); 61075 (November 30, 2009), 74 FR 64112 (December 7, 2009) (SR–NYSE–2009–119) (extending the operation of the SLP Pilot to March 30, 2010); 61840 (April 5, 2010), 75 FR 18563 (April 12, 2010) (SR–NYSE–2010–28) (extending the operation of the SLP Pilot to September 30, 2010); 62813 (September 1, 2010), 75 FR 54686 (September 8, 2010) (SR–NYSE–2010–62) (extending the operation of the SLP Pilot to January 31, 2011); and 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) (SR–NYSEAmex–2010–123) (extending the operation of the SLP Pilot to August 1, 2011). 4 The information contained herein is a summary of the NMM Pilot and the SLP Pilot. See supra note 4 [sic] and infra note 6 [sic] for a fuller description of those pilots. 5 See Securities Exchange Act Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008) (SR–NYSE–2008–46). E:\FR\FM\06JYN1.SGM 06JYN1

Agencies

[Federal Register Volume 76, Number 129 (Wednesday, July 6, 2011)]
[Notices]
[Pages 39453-39455]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16887]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64773; File No. SR-NYSEAmex-2011-43]


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 
January 31, 2012

 June 29, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 21, 2011, NYSE Amex LLC (``NYSE Amex'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to extend the operation of its New Market 
Model Pilot, currently scheduled to expire on August 1, 2011, until the 
earlier of Securities and Exchange Commission (``Commission'') approval 
to make such pilot permanent or January 31, 2012. The text of the 
proposed rule change is available at the 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 Exchange 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 these 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 aspects 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 (``NYSE'').\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, January 31, 2011, and August 1, 2011, 
respectively.\4\ The Exchange now seeks to extend the operation of the 
NMM Pilot, currently scheduled to expire on August 1, 2011, until the 
earlier of Commission approval to make such pilot permanent or January 
31, 2012.
---------------------------------------------------------------------------

    \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); 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); and 63615 (December 
29, 2010), 76 FR 611 (January 5, 2011) (SR-NYSEAmex-2010-123).
---------------------------------------------------------------------------

    The Exchange notes that parallel changes are proposed to be made to 
the rules of NYSE.\5\
---------------------------------------------------------------------------

    \5\ See SR-NYSE-2010-29.
---------------------------------------------------------------------------

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 
equities market rules, execution technology and the rights and 
obligations of its equities market participants all of which were 
designed

[[Page 39454]]

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 
equity 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[supreg] \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.
---------------------------------------------------------------------------

    \12\ See NYSE Amex Equities 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 on five 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 
August 1, 2011.
---------------------------------------------------------------------------

    \13\ See supra note 5.
---------------------------------------------------------------------------

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 January 31, 2012, 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 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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\ 
Because the 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 prior to 
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, the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.\16\
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    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 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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    A proposed rule change filed under Rule 19b-4(f)(6) \17\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \17\ 17 CFR 240.19b-4(f)(6).
    \18\ 17 CFR 240.19b-4(f)(6)(iii).
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    At any time within 60 days of the filing of such proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if

[[Page 39455]]

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-2011-43 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-2011-43. 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 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 offices 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-NYSEAmex-2011-43, and should be submitted on or before 
July 27, 2011.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-16887 Filed 7-5-11; 8:45 am]
BILLING CODE 8011-01-P
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