Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend NYSE Rule 104(a)(1)(A) To Reflect That Designated Market Maker Unit Quoting Requirements Are Based on Consolidated Average Daily Volume, 76775-76777 [2011-31473]
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Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices
It is ordered:
1. The procedural schedule listed
below is hereby adopted.
2. Pursuant to 39 U.S.C. 505, James F.
Callow is designated officer of the
Commission (Public Representative) to
represent the interests of the general
public.
3. The Secretary shall arrange for
publication of this notice and order and
76775
Procedural Schedule in the Federal
Register.
By the Commission.
Shoshana M. Grove,
Secretary.
PROCEDURAL SCHEDULE
November
December
December
December
December
16, 2011 ..................................
1, 2011 ....................................
1, 2011 ....................................
27, 2011 ..................................
21, 2011 ..................................
January 10, 2012 ......................................
January 25, 2012 ......................................
February 1, 2012 ......................................
March 7, 2012 ...........................................
Filing of Appeal.
Deadline for the Postal Service to file the applicable administrative record in this appeal.
Deadline for the Postal Service to file any responsive pleading.
Deadline for notices to intervene (see 39 CFR 3001.111(b)).
Deadline for Petitioners’ Form 61 or initial brief in support of petition (see 39 CFR 3001.115(a) and
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Expiration of the Commission’s 120-day decisional schedule (see 39 U.S.C. 404(d)(5)).
[FR Doc. 2011–31538 Filed 12–7–11; 8:45 am]
BILLING CODE 7710–FW–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65864; File No. SR–
NYSEAMEX–2011–90]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Amend NYSE Rule
104(a)(1)(A) To Reflect That Designated
Market Maker Unit Quoting
Requirements Are Based on
Consolidated Average Daily Volume
mstockstill on DSK4VPTVN1PROD with NOTICES
December 2, 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 November
18, 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 and II below, which Items have
been prepared by the Exchange. The
Exchange has designated the proposed
rule change as constituting a noncontroversial rule change under Rule
19b–4(f)(6) under the Act,3 which
renders the proposal effective upon
filing with the Commission. 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).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
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15:59 Dec 07, 2011
Jkt 226001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Amex Equities Rule 104(a)(1)(A)
to reflect that, when determining the
specific percentage quoting requirement
applicable to a Designated Market
Maker unit (‘‘DMM unit’’), volume for
the particular security is based on
consolidated average daily volume
(‘‘CADV’’). 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
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 amend
NYSE Amex Equities Rule 104(a)(1)(A) 4
4 NYSE Amex Equities Rule 104 is currently in
effect during a pilot period (‘‘New Market Model
Pilot’’ or ‘‘NMM Pilot’’). The Exchange adopted the
NMM Pilot pursuant to its merger with the New
York Stock Exchange LLC (‘‘NYSE’’). See Securities
Exchange Act Release No. 59022 (November 26,
2008), 73 FR 73683 (December 3, 2008) (SR–
NYSEALTR–2008–10) (the ‘‘NYSE Amex NMM
PO 00000
Frm 00087
Fmt 4703
Sfmt 4703
to reflect that, when determining the
specific percentage quoting requirement
applicable to a DMM unit,5 volume for
the particular security is based on
CADV.6
A DMM unit must maintain a bid or
an offer at the National Best Bid and
National Best Offer (‘‘inside’’) a
minimum of either 5% or 10% of the
trading day, depending on trading
volume for the security. NYSE Amex
Equities Rule 104(a)(1)(A) currently
reflects for one of the calculations, but
not the other, that, when determining
the specific percentage quoting
requirement applicable to a DMM unit,
trading volume for the particular
security is based on volume ‘‘on the
Exchange.’’ The reference to ‘‘on the
Exchange’’ was inadvertently included
in the Exchange’s proposal to
implement the NMM Pilot, which was
based on the same language that was
approved by the Commission in the
Approval’’). See also Securities Exchange Act
Release No. 58845 (October 24, 2008), 73 FR 64379
(October 29, 2008) (SR–NYSE–2008–46) (the ‘‘NYSE
NMM Approval’’). The Exchange has extended the
operation of the NMM Pilot several times and it is
currently set to expire on January 31, 2012. See
Securities Exchange Act Release No. 64773 (June
29, 2011), 76 FR 39453 (July 6, 2011) (SR–
NYSEAmex–2011–43).
5 See NYSE Amex Equities Rule 98(b)(2). ‘‘DMM
unit’’ means any member organization, aggregation
unit within a member organization, or division or
department within an integrated proprietary
aggregation unit of a member organization that (i)
Has been approved by NYSE Regulation pursuant
to section (c) of NYSE Amex Equities Rule 98, (ii)
is eligible for allocations under NYSE Amex
Equities Rule 103B as a DMM unit in a security
listed or traded on the Exchange, and (iii) has met
all registration and qualification requirements for
DMM units assigned to such unit.
6 Given the multitude of venues where equity
securities trade, CADV is more reflective of the
trading characteristics of a security than the volume
on any single market.
E:\FR\FM\08DEN1.SGM
08DEN1
76776
Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices
NYSE NMM Approval.7 In this regard,
and as reflected in the NYSE NMM
Approval, the Exchange intended that
trading volume for a particular security
would be based on CADV when
determining the specific percentage
quoting requirement applicable to a
DMM unit.8
As proposed, NYSE Amex Equities
Rule 104(a)(1)(A) would reflect that,
with respect to maintaining a
continuous two-sided quote with
reasonable size, DMM units must
maintain a bid or an offer at the inside
at least 10% of the trading day for
securities in which the DMM unit is
registered with a consolidated average
daily volume of less than one million
shares, and at least 5% for securities in
which the DMM unit is registered with
a consolidated average daily volume
equal to or greater than one million
shares.
mstockstill on DSK4VPTVN1PROD with NOTICES
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Securities Exchange Act of 1934
(the ‘‘Act’’),9 in general, and furthers the
objectives of Section 6(b)(5) of the Act,10
in particular, because it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
7 NYSE has filed a similar proposal to similarly
change the text of NYSE Rule 104(a)(1)(A) from
volume ‘‘on the Exchange’’ to ‘‘consolidated’’
volume.
8 See NYSE NMM Approval at 64381, which
states that ‘‘[f]or securities that have a consolidated
average daily volume of less than one million
shares per calendar month, a DMM Unit must
maintain a bid or an offer at the NBBO for at least
10% of the trading day (calculated as an average
over the course of a calendar month). For securities
that have a consolidated average daily volume of
equal to or greater than one million shares per
calendar month, a DMM Unit must maintain a bid
or an offer at the NBBO for at least 5% or more of
the trading day (calculated as an average over the
courts (sic) of a calendar month.’’ See also NYSE
NMM Approval at n.71. A subsequent NYSE rule
change similarly noted that, ‘‘with respect to
maintaining a continuous two-sided quote with
reasonable size, DMMs must maintain a bid or offer
at the NBBO * * * at a prescribed level based on
the average daily volume of the security. Securities
that have a consolidated average daily volume of
less than one million shares per calendar month are
defined as Less Active Securities and securities that
have a consolidated average daily volume of equal
to or greater than one million shares per calendar
month are defined as More Active Securities. For
Less Active Securities, a [DMM] unit must maintain
a bid or an offer at the NBBO for at least 10% of
the trading day during a calendar month. For More
Active Securities, a [DMM] unit must maintain a
bid or an offer at the NBBO for at least 5% or more
of the trading day during a calendar month.’’ See
Securities Exchange Act Release No. 58971
(November 17, 2008), 73 FR 71070 (November 24,
2008) (SR–NYSE–2008–115) at n.5. CADV is
similarly used to differentiate between ‘‘more
active’’ and ‘‘less active’’ securities under NYSE
Amex Equities Rule 103B.
9 15 U.S.C. 78f(b).
10 15 U.S.C. 78f(b)(5).
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15:59 Dec 07, 2011
Jkt 226001
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. Specifically, the
proposed change would align the text of
NYSE Amex Equities Rule 104(a)(1)(A)
with the previously approved manner
by which to measure trading volume of
a particular security, as set forth in
NYSE Amex Equities Rule 103B, and
consistent with the NYSE NMM
Approval order, which also discussed
the use of CADV, and not just trading
volume on the Exchange, for purposes
of measuring the quoting requirement
applicable to a DMM unit.
trading volume on the Exchange.
Because CADV is more reflective of the
trading characteristics of a security than
the volume on any single market,
investors will benefit from
implementation of the proposed rule
change without undue delay. Therefore,
the Commission designates the proposal
operative upon filing.13
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.
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
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 significantly affect the
protection of investors or the public
interest, does not impose any significant
burden on competition, and, 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, it has
become effective pursuant to Section
19(b)(3)(A) of the Act 11 and Rule 19b–
4(f)(6) thereunder.12
The Exchange has requested that the
Commission waive the 30-day operative
delay. The Commission believes that
waiver of the operative delay is
consistent with the protection of
investors and the public interest. Such
waiver will allow the Exchange’s Rules
to immediately reflect the fact that
DMM unit quoting requirements are
calculated based on CADV rather than
11 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6). In addition, Rule 19b–
4(f)(6)(iii) requires the Exchange to give the
Commission written notice of the Exchange’s 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.
12 17
PO 00000
Frm 00088
Fmt 4703
Sfmt 4703
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 email to rulecomments@sec.gov. Please include File
Number SR–NYSEAMEX–2011–90 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–2011–90. This
file number should be included on the
subject line if email 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
13 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).
E:\FR\FM\08DEN1.SGM
08DEN1
Federal Register / Vol. 76, No. 236 / Thursday, December 8, 2011 / Notices
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 the filing will
also be available for inspection and
copying at the NYSE’s principal office
and on its Internet Web site at https://
www.nyse.com. 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
publicly available. All submissions
should refer to File Number SR–
NYSEAMEX–2011–90 and should be
submitted on or before December 29,
2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.14
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–31473 Filed 12–7–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65877; File No. SR–FINRA–
2011–069]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of
Proposed Rule Change Relating To
Post-Trade Transparency for Agency
Pass-Through Mortgage-Backed
Securities Traded TBA
December 2, 2011.
mstockstill on DSK4VPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 1 and Rule 19b-4 thereunder,2
notice is hereby given that, on
November 22, 2011, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by FINRA. 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
FINRA is proposing to amend FINRA
Rule 6730 to reduce the period to report
TRACE–Eligible Asset-Backed
14 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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15:59 Dec 07, 2011
Jkt 226001
Securities that are Agency Pass-Through
Mortgage-Backed Securities traded to be
announced (‘‘TBA’’) (‘‘TBA
transactions’’) in two stages; FINRA
Rule 6750, to provide for the
dissemination of TBA transactions;
FINRA Rule 7730, to establish fees for
real-time TBA transaction data and
historical TBA transaction data; and
FINRA Rule 6730 and FINRA Rule 7730,
to delete references to a pilot program
that is no longer in effect and to
incorporate other minor administrative,
technical or clarifying changes. FINRA
also proposes to establish a
dissemination protocol providing that,
for a TBA transaction in excess of $50
million, the size (volume) of the
transaction would be displayed in
disseminated TRACE data as $50
million plus.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA 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. FINRA 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
FINRA proposes amendments to the
Rule 6700 Series (the Trade Reporting
and Compliance Engine (‘‘TRACE’’)
rules) to provide greater transparency in
transactions in Asset-Backed Securities
that are TBA transactions.3 First, FINRA
proposes to amend Rule 6730 to reduce
the reporting period for TBA
transactions in two phases. Second,
FINRA proposes to amend Rule 6750 to
provide for the dissemination of
information on TBA transactions in realtime (i.e., immediately upon FINRA’s
receipt of the transaction report). Third,
in Rule 7730, FINRA proposes to
3 A TBA transaction is a transaction in a specific
type of Asset-Backed Security, an Agency PassThrough Mortgage-Backed Security as defined in
Rule 6710(v), traded ‘‘to be announced’’ as defined
in Rule 6710(u).
PO 00000
Frm 00089
Fmt 4703
Sfmt 4703
76777
establish fees: (i) For a data set of realtime TRACE disseminated TBA
transaction data at the same rates
currently in effect for similar real-time
TRACE disseminated data sets, and (ii)
for a data set of historic TRACE TBA
transaction data at the same rates
currently in effect for similar Historic
TRACE Data sets.4 FINRA also proposes
to delete references to a pilot program
that is no longer in effect and make
other minor technical, administrative or
clarifying amendments to Rule 6730 and
Rule 7730. Finally, FINRA proposes to
establish a limit or ‘‘cap’’ of $50 million
for disseminated TBA transactions as
part of FINRA’s dissemination policies
and protocols, so that the actual size of
a TBA transaction in excess of $50
million would be displayed as
‘‘$50MM+’’ in disseminated TRACE
data.
TBA Transactions
As defined in Rule 6710(v), an
Agency Pass-Through Mortgage-Backed
Security means:
a mortgage-backed security issued by an
Agency or a Government-Sponsored
Enterprise, for which the timely payment of
principal and interest is guaranteed by an
Agency or a Government-Sponsored
Enterprise, representing ownership interests
in a pool or pools of residential mortgage
loans with the security structured to ‘‘pass
through’’ the principal and interest payments
made by the mortgagees to the owners of the
pool(s) on a pro rata basis.5
As provided in Rule 6710(u), TBA
means:
‘‘to be announced’’ and refers to a
transaction in an Agency Pass-Through
Mortgage-Backed Security * * * where the
parties agree that the seller will deliver to the
buyer an Agency Pass-Through MortgageBacked Security of a specified face amount
and coupon from a specified Agency or
Government-Sponsored Enterprise program
representing a pool (or pools) of mortgages
(that are not specified by unique pool
number).
In a TBA transaction, the parties agree
on a price for delivering a given volume
of Agency Pass-Through MortgageBacked Securities at a specified future
date. The distinguishing feature of a
TBA transaction is that the actual
identity of the securities to be delivered
at settlement is not specified on the date
of execution (‘‘Trade Date’’). Instead, the
parties to the trade agree on only five
general parameters of the securities to
be delivered: issuer, mortgage type,
maturity, coupon, and month of
4 The term Historic TRACE Data is defined in
Rule 7730(f)(4).
5 The terms Agency and Government-Sponsored
Enterprise (GSE) are defined in, respectively, Rule
6710(k) and Rule 6710(n).
E:\FR\FM\08DEN1.SGM
08DEN1
]]>Agencies
[Federal Register Volume 76, Number 236 (Thursday, December 8, 2011)]
[Notices]
[Pages 76775-76777]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31473]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65864; File No. SR-NYSEAMEX-2011-90]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of a Proposed Rule Change To Amend NYSE
Rule 104(a)(1)(A) To Reflect That Designated Market Maker Unit Quoting
Requirements Are Based on Consolidated Average Daily Volume
December 2, 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 November 18, 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 and II below, which Items
have been prepared by the Exchange. The Exchange has designated the
proposed rule change as constituting a non-controversial rule change
under Rule 19b-4(f)(6) under the Act,\3\ which renders the proposal
effective upon filing with the Commission. 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.
\3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend NYSE Amex Equities Rule 104(a)(1)(A)
to reflect that, when determining the specific percentage quoting
requirement applicable to a Designated Market Maker unit (``DMM
unit''), volume for the particular security is based on consolidated
average daily volume (``CADV''). 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 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 amend NYSE Amex Equities Rule 104(a)(1)(A)
\4\ to reflect that, when determining the specific percentage quoting
requirement applicable to a DMM unit,\5\ volume for the particular
security is based on CADV.\6\
---------------------------------------------------------------------------
\4\ NYSE Amex Equities Rule 104 is currently in effect during a
pilot period (``New Market Model Pilot'' or ``NMM Pilot''). The
Exchange adopted the NMM Pilot pursuant to its merger with the New
York Stock Exchange LLC (``NYSE''). See Securities Exchange Act
Release No. 59022 (November 26, 2008), 73 FR 73683 (December 3,
2008) (SR-NYSEALTR-2008-10) (the ``NYSE Amex NMM Approval''). See
also Securities Exchange Act Release No. 58845 (October 24, 2008),
73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) (the ``NYSE NMM
Approval''). The Exchange has extended the operation of the NMM
Pilot several times and it is currently set to expire on January 31,
2012. See Securities Exchange Act Release No. 64773 (June 29, 2011),
76 FR 39453 (July 6, 2011) (SR-NYSEAmex-2011-43).
\5\ See NYSE Amex Equities Rule 98(b)(2). ``DMM unit'' means any
member organization, aggregation unit within a member organization,
or division or department within an integrated proprietary
aggregation unit of a member organization that (i) Has been approved
by NYSE Regulation pursuant to section (c) of NYSE Amex Equities
Rule 98, (ii) is eligible for allocations under NYSE Amex Equities
Rule 103B as a DMM unit in a security listed or traded on the
Exchange, and (iii) has met all registration and qualification
requirements for DMM units assigned to such unit.
\6\ Given the multitude of venues where equity securities trade,
CADV is more reflective of the trading characteristics of a security
than the volume on any single market.
---------------------------------------------------------------------------
A DMM unit must maintain a bid or an offer at the National Best Bid
and National Best Offer (``inside'') a minimum of either 5% or 10% of
the trading day, depending on trading volume for the security. NYSE
Amex Equities Rule 104(a)(1)(A) currently reflects for one of the
calculations, but not the other, that, when determining the specific
percentage quoting requirement applicable to a DMM unit, trading volume
for the particular security is based on volume ``on the Exchange.'' The
reference to ``on the Exchange'' was inadvertently included in the
Exchange's proposal to implement the NMM Pilot, which was based on the
same language that was approved by the Commission in the
[[Page 76776]]
NYSE NMM Approval.\7\ In this regard, and as reflected in the NYSE NMM
Approval, the Exchange intended that trading volume for a particular
security would be based on CADV when determining the specific
percentage quoting requirement applicable to a DMM unit.\8\
---------------------------------------------------------------------------
\7\ NYSE has filed a similar proposal to similarly change the
text of NYSE Rule 104(a)(1)(A) from volume ``on the Exchange'' to
``consolidated'' volume.
\8\ See NYSE NMM Approval at 64381, which states that ``[f]or
securities that have a consolidated average daily volume of less
than one million shares per calendar month, a DMM Unit must maintain
a bid or an offer at the NBBO for at least 10% of the trading day
(calculated as an average over the course of a calendar month). For
securities that have a consolidated average daily volume of equal to
or greater than one million shares per calendar month, a DMM Unit
must maintain a bid or an offer at the NBBO for at least 5% or more
of the trading day (calculated as an average over the courts (sic)
of a calendar month.'' See also NYSE NMM Approval at n.71. A
subsequent NYSE rule change similarly noted that, ``with respect to
maintaining a continuous two-sided quote with reasonable size, DMMs
must maintain a bid or offer at the NBBO * * * at a prescribed level
based on the average daily volume of the security. Securities that
have a consolidated average daily volume of less than one million
shares per calendar month are defined as Less Active Securities and
securities that have a consolidated average daily volume of equal to
or greater than one million shares per calendar month are defined as
More Active Securities. For Less Active Securities, a [DMM] unit
must maintain a bid or an offer at the NBBO for at least 10% of the
trading day during a calendar month. For More Active Securities, a
[DMM] unit must maintain a bid or an offer at the NBBO for at least
5% or more of the trading day during a calendar month.'' See
Securities Exchange Act Release No. 58971 (November 17, 2008), 73 FR
71070 (November 24, 2008) (SR-NYSE-2008-115) at n.5. CADV is
similarly used to differentiate between ``more active'' and ``less
active'' securities under NYSE Amex Equities Rule 103B.
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As proposed, NYSE Amex Equities Rule 104(a)(1)(A) would reflect
that, with respect to maintaining a continuous two-sided quote with
reasonable size, DMM units must maintain a bid or an offer at the
inside at least 10% of the trading day for securities in which the DMM
unit is registered with a consolidated average daily volume of less
than one million shares, and at least 5% for securities in which the
DMM unit is registered with a consolidated average daily volume equal
to or greater than one million shares.
2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\9\ in
general, and furthers the objectives of Section 6(b)(5) of the Act,\10\
in particular, because it is designed to prevent fraudulent and
manipulative acts and practices, 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. Specifically,
the proposed change would align the text of NYSE Amex Equities Rule
104(a)(1)(A) with the previously approved manner by which to measure
trading volume of a particular security, as set forth in NYSE Amex
Equities Rule 103B, and consistent with the NYSE NMM Approval order,
which also discussed the use of CADV, and not just trading volume on
the Exchange, for purposes of measuring the quoting requirement
applicable to a DMM unit.
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\9\ 15 U.S.C. 78f(b).
\10\ 15 U.S.C. 78f(b)(5).
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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 does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, 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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \11\ and Rule 19b-
4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's 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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The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the operative
delay is consistent with the protection of investors and the public
interest. Such waiver will allow the Exchange's Rules to immediately
reflect the fact that DMM unit quoting requirements are calculated
based on CADV rather than trading volume on the Exchange. Because CADV
is more reflective of the trading characteristics of a security than
the volume on any single market, investors will benefit from
implementation of the proposed rule change without undue delay.
Therefore, the Commission designates the proposal operative upon
filing.\13\
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\13\ 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).
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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 email to rule-comments@sec.gov. Please include
File Number SR-NYSEAMEX-2011-90 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-2011-90. This
file number should be included on the subject line if email 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
[[Page 76777]]
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 the
filing will also be available for inspection and copying at the NYSE's
principal office and on its Internet Web site at https://www.nyse.com.
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 publicly
available. All submissions should refer to File Number SR-NYSEAMEX-
2011-90 and should be submitted on or before December 29, 2011.
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\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31473 Filed 12-7-11; 8:45 am]
BILLING CODE 8011-01-P
