Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex Equities Rule 72 Priority of Bids and Offers and Allocation of Executions, 77038-77040 [2011-31602]
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77038
Federal Register / Vol. 76, No. 237 / Friday, December 9, 2011 / Notices
clearing agency for which the clearing
agency is seeking approval is subject to
regulation by another regulator.
V. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act, that the
proposed rule change (SR–CME–2011–
16) is approved on an accelerated basis.
For the Commission by the Division of
Trading and Markets, pursuant to delegated
authority.8
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–31641 Filed 12–8–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65884; File No. SR–SCCP–
2011–03]
Self-Regulatory Organizations; Stock
Clearing Corporation of Philadelphia;
Order Approving Proposed Rule
Change With Respect to an
Amendment to the By-Laws of The
NASDAQ OMX Group, Inc.
December 5, 2011.
I. Introduction
On October 11, 2011, Stock Clearing
Corporation of Philadelphia (‘‘SCCP’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change SR–SCCP–2011–
03 pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder.
The proposed rule change was
published for comment in the Federal
Register on October 28, 2011.3 The
Commission received no comment
letters regarding the proposal. For the
reasons discussed below, the
Commission is granting approval of the
proposed rule change.
II. Description
srobinson on DSK4SPTVN1PROD with NOTICES
The rule change will permit an
amendment to the by-laws of SCCP’s
parent corporation, The NASDAQ OMX
Group, Inc. (‘‘NASDAQ OMX’’).
NASDAQ OMX is seeking to amend
provisions of its by-laws pertaining to
the composition of committees of the
NASDAQ OMX Board of Directors.
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 34–65614
(October 24, 2011), 76 FR 67009 (October 28, 2011).
In its filing with the Commission, SCCP included
statements concerning the purpose of and basis for
the proposed rule change. The text of these
statements is incorporated into the discussion of the
proposed rule change in Section II below.
1 15
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First, NASDAQ OMX is amending the
compositional requirements of its Audit
Committee in Section 4.13(g) to provide
that the committee shall include three
or more directors. Currently, the
provision provides that the Audit
Committee shall be composed of either
four or five directors. Second, NASDAQ
OMX is proposing to amend the
compositional requirements of the
Nominating & Governance Committee in
Section 4.13(h) to replace a requirement
that the committee comprise four or five
members with a requirement to include
two or more members. Third, NASDAQ
OMX proposes to delete a paragraph of
the by-laws (Section 4.13(k)) that
pertains to the qualifications of
committee members who are not
directors. Finally, NASDAQ OMX is
correcting a typographical error in the
numbering of the provisions of Section
4.13(h) of the by-laws.
III. Discussion
Section 19(b)(2)(B) of the Act directs
the Commission to approve a proposed
rule change of a self-regulatory
organization if it finds that such
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to such organization.4 In
particular, Section 17A(b)(3)(A) 5 of the
Act requires, among other things, that
the clearing agency be so organized and
have the capacity to facilitate the
prompt and accurate clearance and
settlement of securities transactions, to
safeguard the securities and funds
which are in the custody or control of
such clearing agency or for which it is
responsible, and to comply with the
provisions of the Act and the rules and
regulations thereunder.
The proposed change would allow the
NASDAQ OMX Board of Directors
(‘‘Board’’) to determine the size of its
Audit Committee, so long as the Audit
Committee includes at least three
directors, as well as the size of its
Nominating & Governance Committee,
so long as the Nominating & Governance
Committee includes at least two
directors. The proposal is intended to
provide greater flexibility to the
NASDAQ OMX Board to determine the
appropriate size for these committees.
The proposal does not change any other
compositional requirements of either
the Audit Committee or the Nominating
& Governance Committee, including
independence requirements. Moreover,
the Commission notes that the proposal
does not alter the application of Section
4 15
5 15
PO 00000
U.S.C. 78s(b)(2)(B).
U.S.C. 78q–1(b)(3)(A).
Frm 00105
Fmt 4703
Sfmt 4703
10A of the Exchange Act 6 and Rule
10A–3 thereunder 7 to the NASDAQ
OMX Audit Committee.
The proposal also deletes an obsolete
section from, and corrects a
typographical error in, the NASDAQ
OMX by-laws, which are clarifying
revisions. For the foregoing reasons, the
Commission believes that the proposed
rule change is consistent with the Act.
The proposal also deletes an obsolete
section from, and corrects a
typographical error in, the NASDAQ
OMX by-laws, which are clarifying
revisions.
IV. Conclusion
On the basis of the foregoing, the
Commission finds that the proposal is
consistent with the requirements of the
Act and in particular with the
requirements of Section 17A of the Act
and the rules and regulations
thereunder.
It is therefore ordered, pursuant to
Section 19(b)(2) 8 of the Act, that the
proposed rule change (File No. SR–
SCCP–2011–03) be, and hereby is,
approved.9
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.10
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–31600 Filed 12–8–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65887; File No. SR–
NYSEAmex–2011–91]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending NYSE Amex
Equities Rule 72 Priority of Bids and
Offers and Allocation of Executions
December 5, 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 21, 2011, NYSE Amex LLC
(the ‘‘Exchange’’ or ‘‘NYSE Amex’’) filed
with the Securities and Exchange
Commission (‘‘Commission’’) the
6 15
U.S.C. 78j–1.
CFR 240.10A–3.
8 15 U.S.C. 78s(b)(2).
9 In approving the proposed rule change, the
Commission considered the proposal’s impact on
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
10 17 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\09DEN1.SGM
09DEN1
Federal Register / Vol. 76, No. 237 / Friday, December 9, 2011 / Notices
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Amex Equities Rule 72 (Priority
of Bids and Offers and Allocation of
Executions). The text of the proposed
rule change is available at the Exchange,
at https://www.nyse.com, at the
Commission’s Public Reference Room,
and at https://www.sec.gov.
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 72 (Priority
of Bids and Offers and Allocation of
Executions).5
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
5 The provisions of NYSE Amex Equities Rule 72
are in effect during a pilot (‘‘New Market Model
Pilot’’) that is set to end on January 31, 2012. The
Exchange adopted the New Market Model 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). See also Securities Exchange Act Release Nos.
60758 (October 1, 2009), 74 FR 51639 (October 7,
2009) (SR–NYSEAmex–2009–65) (extending Pilot to
November 30, 2009); 61030 (November 19, 2009),
74 FR 62365 (November 27, 2009) (SR–NYSEAmex–
2009–83) (extending Pilot to March 30, 2010);
61725 (March 17, 2010), 75 FR 14223 (March 24,
2010) (SR–NYSEAmex–2010–28) (extending Pilot to
September 30, 2010); 62820 (September 1, 2010), 75
FR 54935 (September 9, 2010) (SR–NYSEAmex2010–86) (extending Pilot to January 31, 2011);
srobinson on DSK4SPTVN1PROD with NOTICES
4 17
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77039
market, on the Exchange’s members,
and on investors generally.
Because of the related technology
changes that this proposed rule change
would require, the Exchange proposes
to announce the initial implementation
date and related roll-out schedule, if
applicable, via Trader Update.
As provided under NYSE Amex
Equities Rule 72(a)(ii), a bid or offer is
considered the ‘‘setting interest’’ when
it is established as the only displayable
bid or offer made at a particular price
and is the only displayable interest
when such price is or becomes the
Exchange best bid or offer (‘‘BBO’’).
Setting interest is entitled to priority for
allocation of executions at that price, as
provided for under NYSE Amex
Equities Rule 72. In this regard, and as
currently provided for under NYSE
Amex Equities Rule 72(a)(ii)(G), if nonpegging interest is the setting interest, it
retains its priority even if joined at that
price by a pegging e-Quote.6 If, however,
at the time non-pegging interest
becomes the Exchange BBO, an e-Quote
is pegging to such non-pegging interest,
all such interest is considered to be
entered simultaneously and, therefore,
no interest is considered the setting
interest.
Since implementing this rule as part
of the New Market Model Pilot, the
Exchange has determined that NYSE
Amex Equities Rule 72(a)(ii) may
currently disincentivize aggressive
displayed quoting by permitting pegging
e-Quotes to eliminate the priority to
which a non-pegging e-Quote might
otherwise be entitled. Specifically,
because pegging interest is not
displayed until it joins non-pegging
interest, the participant entering the
non-pegging interest is unaware that one
or more pegging e-Quotes at that price
may exist. Because the goal of the
setting interest, and related priority
given to such interest, is to create an
incentive for participants to display
aggressive prices, a participant may be
reluctant to enter such displayed
interest if a non-displayed pegging eQuote could impede such displayed
interest from receiving priority. The
Exchange therefore proposes to amend
NYSE Amex Equities Rule 72(a)(ii)(G) to
reflect that non-pegging interest that
becomes the Exchange BBO will be
considered the setting interest even if an
e-Quote is pegging to such non-pegging
interest.7 In this regard, the Exchange
believes that this proposed change
would enhance the New Market Model’s
positive impact on the Exchange’s
The proposed rule change is
consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),8 in general, and furthers the
objectives of Section 6(b)(5),9 in
particular, because it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, 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 proposed rule change meets
these requirements because it would
permit non-pegging interest that sets a
new BBO to be considered the setting
interest and therefore retain priority, as
provided for under NYSE Amex
Equities Rule 72, over a pegging e-Quote
that reacts and pegs to such non-pegging
interest. Accordingly, the proposal is
designed to incentivize and reward
aggressive displayed quoting by market
participants, which contributes to the
market quality of the Exchange. In this
regard, the Exchange believes that this
proposed change would enhance the
New Market Model’s positive impact on
the Exchange’s market, on the
Exchange’s members, and on investors
generally.
63615 (December 29, 2010), 76 FR 611 (January 5,
2011) (SR–NYSEAmex–2010–123) (extending Pilot
to August 1, 2011); and 64773 (June 29, 2011), 76
FR 39453 (July 6, 2011) (SR–NYSEAmex–2011–43)
(extending Pilot to January 31, 2012).
6 See Rule 70.26—Pegging for d-Quotes and
e-Quotes.
7 Non-pegging interest that is the setting interest
will continue to retain its priority even if joined at
that price by a pegging e-Quote. See id.
No written comments were solicited
or received with respect to the proposed
rule change.
PO 00000
Frm 00106
Fmt 4703
Sfmt 4703
2. Statutory Basis
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
8 15
9 15
E:\FR\FM\09DEN1.SGM
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
09DEN1
77040
Federal Register / Vol. 76, No. 237 / Friday, December 9, 2011 / Notices
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 10 and Rule 19b–
4(f)(6) thereunder.11
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–2011–91 on the subject
line.
srobinson on DSK4SPTVN1PROD 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–NYSEAmex–2011–91. 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
10 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.
11 17
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18:35 Dec 08, 2011
Jkt 226001
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 the filing also
will be available for inspection and
copying at the principal office of the
Exchange. All comments received will
be posted without change; the
Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEAmex–2011–91 and should be
submitted on or before December 30,
2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–31602 Filed 12–8–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65889; File No. SR–NYSE–
2011–60]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Amending
NYSE Rule 72 Priority of Bids and
Offers and Allocation of Executions
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 21, 2011, New York Stock
Exchange LLC (the ‘‘Exchange’’ or
‘‘NYSE’’) 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 filed the proposal as a
‘‘non-controversial’’ proposed rule
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
Frm 00107
Fmt 4703
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Rule 72 (Priority of Bids and
Offers and Allocation of Executions).
The text of the proposed rule change is
available at the Exchange, at https://
www.nyse.com, at the Commission’s
Public Reference Room, and at https://
www.sec.gov.
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 Rule 72 (Priority of Bids and
Offers and Allocation of Executions).5
As provided under Rule 72(a)(ii), a
bid or offer is considered the ‘‘setting
interest’’ when it is established as the
only displayable bid or offer made at a
particular price and is the only
3 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b-4(f)(6).
5 The provisions of Rule 72 are in effect during
a pilot (‘‘New Market Model Pilot’’) that is set to
end on January 31, 2012. See Securities Exchange
Act Release No. 58845 (October 24, 2008), 73 FR
64379 (October 29, 2008) (SR–NYSE–2008–46). See
also Securities Exchange Act Release Nos. 60756
(October 1, 2009), 74 FR 51628 (October 7, 2009)
(SR–NYSE–2009–100) (extending Pilot to November
30, 2009); 61031 (November 19, 2009), 74 FR 62368
(November 27, 2009) (SR–NYSE–2009–113)
(extending Pilot to March 30, 2010); 61724 (March
17, 2010), 75 FR 14221 (March 24, 2010) (SR–
NYSE–2010–25) (extending Pilot to September 30,
2010); 62819 (September 1, 2010), 75 FR 54937
(September 9, 2010) (SR–NYSE–2010–61)
(extending Pilot to January 31, 2011); 63616
(December 29, 2010), 76 FR 612 (January 5, 2011)
(SR–NYSE–2010–86) (extending Pilot to August 1,
2011); and 64761 (June 28, 2011), 76 FR 39147 (July
5, 2011) (SR–NYSE–2011–29) (extending Pilot to
January 31, 2012).
4 17
December 5, 2011.
PO 00000
change pursuant to Section
19(b)(3)(A)(iii) of the Act 3 and Rule
19b-4(f)(6) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
Sfmt 4703
E:\FR\FM\09DEN1.SGM
09DEN1
]]>Agencies
[Federal Register Volume 76, Number 237 (Friday, December 9, 2011)]
[Notices]
[Pages 77038-77040]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31602]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65887; File No. SR-NYSEAmex-2011-91]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex
Equities Rule 72 Priority of Bids and Offers and Allocation of
Executions
December 5, 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 21, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') filed with the Securities and Exchange Commission
(``Commission'') the
[[Page 77039]]
proposed rule change as described in Items I and II below, which Items
have been prepared by the Exchange. The Exchange filed the proposal as
a ``non-controversial'' proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 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 72 (Priority
of Bids and Offers and Allocation of Executions). The text of the
proposed rule change is available at the Exchange, at https://www.nyse.com, at the Commission's Public Reference Room, and at https://www.sec.gov.
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 72 (Priority
of Bids and Offers and Allocation of Executions).\5\
---------------------------------------------------------------------------
\5\ The provisions of NYSE Amex Equities Rule 72 are in effect
during a pilot (``New Market Model Pilot'') that is set to end on
January 31, 2012. The Exchange adopted the New Market Model 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). See
also Securities Exchange Act Release Nos. 60758 (October 1, 2009),
74 FR 51639 (October 7, 2009) (SR-NYSEAmex-2009-65) (extending Pilot
to November 30, 2009); 61030 (November 19, 2009), 74 FR 62365
(November 27, 2009) (SR-NYSEAmex-2009-83) (extending Pilot to March
30, 2010); 61725 (March 17, 2010), 75 FR 14223 (March 24, 2010) (SR-
NYSEAmex-2010-28) (extending Pilot to September 30, 2010); 62820
(September 1, 2010), 75 FR 54935 (September 9, 2010) (SR-NYSEAmex-
2010-86) (extending Pilot to January 31, 2011); 63615 (December 29,
2010), 76 FR 611 (January 5, 2011) (SR-NYSEAmex-2010-123) (extending
Pilot to August 1, 2011); and 64773 (June 29, 2011), 76 FR 39453
(July 6, 2011) (SR-NYSEAmex-2011-43) (extending Pilot to January 31,
2012).
---------------------------------------------------------------------------
As provided under NYSE Amex Equities Rule 72(a)(ii), a bid or offer
is considered the ``setting interest'' when it is established as the
only displayable bid or offer made at a particular price and is the
only displayable interest when such price is or becomes the Exchange
best bid or offer (``BBO''). Setting interest is entitled to priority
for allocation of executions at that price, as provided for under NYSE
Amex Equities Rule 72. In this regard, and as currently provided for
under NYSE Amex Equities Rule 72(a)(ii)(G), if non-pegging interest is
the setting interest, it retains its priority even if joined at that
price by a pegging e-Quote.\6\ If, however, at the time non-pegging
interest becomes the Exchange BBO, an e-Quote is pegging to such non-
pegging interest, all such interest is considered to be entered
simultaneously and, therefore, no interest is considered the setting
interest.
---------------------------------------------------------------------------
\6\ See Rule 70.26--Pegging for d-Quotes and e-Quotes.
---------------------------------------------------------------------------
Since implementing this rule as part of the New Market Model Pilot,
the Exchange has determined that NYSE Amex Equities Rule 72(a)(ii) may
currently disincentivize aggressive displayed quoting by permitting
pegging e-Quotes to eliminate the priority to which a non-pegging e-
Quote might otherwise be entitled. Specifically, because pegging
interest is not displayed until it joins non-pegging interest, the
participant entering the non-pegging interest is unaware that one or
more pegging e-Quotes at that price may exist. Because the goal of the
setting interest, and related priority given to such interest, is to
create an incentive for participants to display aggressive prices, a
participant may be reluctant to enter such displayed interest if a non-
displayed pegging e-Quote could impede such displayed interest from
receiving priority. The Exchange therefore proposes to amend NYSE Amex
Equities Rule 72(a)(ii)(G) to reflect that non-pegging interest that
becomes the Exchange BBO will be considered the setting interest even
if an e-Quote is pegging to such non-pegging interest.\7\ In this
regard, the Exchange believes that this proposed change would enhance
the New Market Model's positive impact on the Exchange's market, on the
Exchange's members, and on investors generally.
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\7\ Non-pegging interest that is the setting interest will
continue to retain its priority even if joined at that price by a
pegging e-Quote. See id.
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Because of the related technology changes that this proposed rule
change would require, the Exchange proposes to announce the initial
implementation date and related roll-out schedule, if applicable, via
Trader Update.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\8\ in general, and
furthers the objectives of Section 6(b)(5),\9\ in particular, because
it is designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in facilitating
transactions in securities, 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 proposed rule change meets these requirements because
it would permit non-pegging interest that sets a new BBO to be
considered the setting interest and therefore retain priority, as
provided for under NYSE Amex Equities Rule 72, over a pegging e-Quote
that reacts and pegs to such non-pegging interest. Accordingly, the
proposal is designed to incentivize and reward aggressive displayed
quoting by market participants, which contributes to the market quality
of the Exchange. In this regard, the Exchange believes that this
proposed change would enhance the New Market Model's positive impact on
the Exchange's market, on the Exchange's members, and on investors
generally.
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\8\ 15 U.S.C. 78f(b).
\9\ 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.
[[Page 77040]]
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 \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 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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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-2011-91 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-2011-91. 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 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 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-NYSEAmex-2011-91 and should
be submitted on or before December 30, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31602 Filed 12-8-11; 8:45 am]
BILLING CODE 8011-01-P
