Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Specifying in Its Rules an Existing Policy Related to the Application of NYSE Amex Options Rule 935NY, 77030-77032 [2011-31633]
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srobinson on DSK4SPTVN1PROD with NOTICES
77030
Federal Register / Vol. 76, No. 237 / Friday, December 9, 2011 / Notices
(44 U.S.C. 3501–3520), the Securities
and Exchange Commission (the
‘‘Commission’’) has submitted to the
Office of Management and Budget a
request for extension of the previously
approved collection of information
discussed below.
Section 19(a) (15 U.S.C. 80a–19(a)) of
the Investment Company Act of 1940
(the ‘‘Act’’) 1 makes it unlawful for any
registered investment company to pay
any dividend or similar distribution
from any source other than the
company’s net income, unless the
payment is accompanied by a written
statement to the company’s
shareholders which adequately
discloses the sources of the payment.
Section 19(a) authorizes the
Commission to prescribe the form of
such statement by rule.
Rule 19a–1 (17 CFR 270.19a–1) under
the Act, entitled ‘‘Written Statement to
Accompany Dividend Payments by
Management Companies,’’ sets forth
specific requirements for the
information that must be included in
statements made pursuant to section
19(a) by or on behalf of management
companies.2 The rule requires that the
statement indicate what portions of
distribution payments are made from
net income, net profits from the sale of
a security or other property (‘‘capital
gains’’) and paid-in capital. When any
part of the payment is made from capital
gains, rule 19a–1 also requires that the
statement disclose certain other
information relating to the appreciation
or depreciation of portfolio securities. If
an estimated portion is subsequently
determined to be significantly
inaccurate, a correction must be made
on a statement made pursuant to section
19(a) or in the first report to
shareholders following the discovery of
the inaccuracy.
The purpose of rule 19a–1 is to afford
fund shareholders adequate disclosure
of the sources from which distribution
payments are made. The rule is
intended to prevent shareholders from
confusing income dividends with
distributions made from capital sources.
Absent rule 19a–1, shareholders might
receive a false impression of fund gains.
Based on a review of filings made
with the Commission, the staff estimates
that approximately 9200 series of
registered investment companies that
are management companies may be
subject to rule 19a–1 each year,3 and
1 15
U.S.C. 80a.
4(3) of the Act (15 U.S.C. 80a–4(3))
defines ‘‘management company’’ as ‘‘any
investment company other than a face amount
certificate company or a unit investment trust.’’
3 This estimate is based on statistics compiled by
Commission staff as of May 31, 2011. The number
2 Section
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18:35 Dec 08, 2011
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that each portfolio on average mails two
statements per year to meet the
requirements of the rule.4 The staff
further estimates that the time needed to
make the determinations required by the
rule and to prepare the statement
required under the rule is
approximately 1 hour per statement.
The total annual burden for all
portfolios therefore is estimated to be
approximately 18,400 burden hours.
The staff estimates that approximately
one-third of the total annual burden
(6,133 hours) would be incurred by a
paralegal with an average hourly wage
rate of approximately $168 per hour,5
and approximately two-thirds of the
annual burden (12,267 hours) would be
incurred by a compliance clerk with an
average hourly wage rate of $67 per
hour.6 The staff therefore estimates that
the aggregate annual cost of complying
with the paperwork requirements of the
rule is approximately $1,852,233 ((6,133
hours × $168) + (12,267 hours × $67)).
To comply with state law, many
investment companies already must
distinguish the different sources from
which a shareholder distribution is paid
and disclose that information to
shareholders. Thus, many investment
companies would be required to
distinguish the sources of shareholder
dividends whether or not the
Commission required them to do so
under rule 19a–1.
The estimate of average burden hours
is made solely for the purposes of the
Paperwork Reduction Act, and is not
derived from a comprehensive or even
a representative survey or study of the
costs of Commission rules. Compliance
with the collection of information
required by rule 19a–1 is mandatory for
management companies that make
statements to shareholders pursuant to
section 19(a) of the Act. An agency may
of management investment company portfolios that
make distributions for which compliance with rule
19a–1 is required depends on a wide range of
factors and can vary greatly across years. Therefore,
the calculation of estimated burden hours is based
on the total number of management investment
company portfolios, each of which may be subject
to rule 19a–1.
4 A few portfolios make monthly distributions
from sources other than net income, so the rule
requires them to send out a statement 12 times a
year. Other portfolios never make such
distributions.
5 Hourly rates are derived from the Securities
Industry and Financial Markets Association
(‘‘SIFMA’’), Management and Professional Earnings
in the Securities Industry 2010, modified to account
for an 1800-hour work-year and multiplied by 5.35
to account for bonuses, firm size, employee
benefits, and overhead.
6 Hourly rates are derived from SIFMA’s Office
Salaries in the Securities Industry 2010, modified
to account for an 1800-hour work-year and
multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead.
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not conduct or sponsor, and a person is
not required to respond to, a collection
of information unless it displays a
currently valid control number.
The public may view the background
documentation for this information
collection at the following Web site,
https://www.reginfo.gov. Comments
should be directed to: (i) Desk Officer
for the Securities and Exchange
Commission, Office of Information and
Regulatory Affairs, Office of
Management and Budget, Room 10102,
New Executive Office Building,
Washington, DC 20503, or by sending an
email to:
Shagufta_Ahmed@omb.eop.gov; and (ii)
Thomas Bayer, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 6432 General Green Way,
Alexandria, VA 22312 or send an email
to: PRA_Mailbox@sec.gov. Comments
must be submitted to OMB within 30
days of this notice.
Dated: December 5, 2011.
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–31607 Filed 12–8–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65893; File No. SR–
NYSEAmex–2011–92]
Self-Regulatory Organizations; NYSE
Amex LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Specifying in Its Rules an
Existing Policy Related to the
Application of NYSE Amex Options
Rule 935NY
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 23, 2011, NYSE Amex LLC
(the ‘‘Exchange’’ or ‘‘NYSE Amex’’) 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 ‘‘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
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
E:\FR\FM\09DEN1.SGM
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Federal Register / Vol. 76, No. 237 / Friday, December 9, 2011 / Notices
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 specify in
its rules an existing policy related to the
application of NYSE Amex Options
Rule 935NY. The text of the proposed
rule change is available at the Exchange,
at https://www.nyse.com, 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
srobinson on DSK4SPTVN1PROD with NOTICES
1. Purpose
The Exchange proposes to specify in
its rules an existing policy related to the
application of NYSE Amex Options
Rule 935NY.
NYSE Amex Options Rule 935NY
provides, in part, that Users 5 may not
execute as principal orders they
represent as agent unless agency orders
are first exposed on the Exchange for at
least one second. This requirement gives
other market participants an
opportunity to participate in the
execution of orders before the entering
User executes them. The Exchange
recognizes, however, that because the
Exchange does not identify the User that
entered an order to the NYSE Amex
System, orders from the same ATP
Holder may inadvertently execute
against each other as a result of being
entered by different persons and/or
systems at the same ATP Holder.
Therefore, when enforcing NYSE Amex
Options Rule 935NY, the Exchange does
not consider the inadvertent interaction
of orders from the same ATP Holder
5 The term ‘‘User’’ means any ATP Holder that is
authorized to obtain access to the NYSE Amex
System pursuant to NYSE Amex Options Rule
902.1NY. See NYSE Amex Options Rule
900.2NY(87).
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Jkt 226001
within one second to be a violation of
the exposure requirement.
When investigating potential
violations of NYSE Amex Options Rule
935NY, the Exchange takes into
consideration whether orders that
executed against each other within one
second in the NYSE Amex System were
entered by persons, business units and/
or systems at the same ATP Holder that
did not have knowledge of the order in
the NYSE Amex System.6 Commonly,
ATP Holders are able to demonstrate
that orders were entered by individuals
or systems that did not have the ability
to know of the preexisting order in the
NYSE Amex System due to information
barriers in place at the time the orders
were entered.
The Exchange proposes to codify this
policy in Commentary .07 to NYSE
Amex Options Rule 935NY. Proposed
Commentary .07 would specify that
ATP Holders may demonstrate that
orders were entered without knowledge
of a preexisting order in the NYSE
Amex System represented by the same
ATP Holder by providing evidence that
effective information barriers between
the persons, business units and/or
systems entering the orders on the
Exchange were in existence at the time
the orders were entered. Commentary
.07 would require that such information
barriers be fully documented and
provided to the Exchange upon
request.7
2. Statutory Basis
The Exchange believes that 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)
of the Act,9 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. In
6 The Financial Industry Regulatory Authority,
Inc. (‘‘FINRA’’), on behalf of the Exchange and
pursuant to a Regulatory Services Agreement
(‘‘RSA’’), conducts routine surveillance to identify
instances when an order in the NYSE Amex System
is executed against an order entered by the same
ATP Holder within one second.
7 Information barrier documentation is reviewed
by FINRA on the Exchange’s behalf to evaluate
whether an ATP Holder has implemented processes
that are reasonably designed to prevent the flow of
pre-trade order information given the particular
structure of the ATP Holder. Additionally,
information barriers are reviewed as part of the
Exchange’s examination program, which is also
administered by FINRA pursuant to the RSA.
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(5).
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77031
particular, the Exchange believes that
codifying the Exchange’s policy that
appropriate information barriers may be
used to demonstrate that the execution
of two orders within one second was
inadvertent because the orders were
entered without knowledge of each
other, would clarify the intent and
application of NYSE Amex Options
Rule 935NY for ATP Holders.
The Exchange also believes that the
proposed rule change is consistent with
Section 6(b)(7) of the Act,10 which
requires the rules of an exchange to
provide a fair procedure for the
disciplining of members and persons
associated with members. In particular,
by specifying that the information
barriers must be fully documented for
the purpose of demonstrating that
orders were entered without knowledge
that there was a pre-existing unexecuted
agency or proprietary order on the
Exchange, ATP Holders would be better
prepared to properly respond to
requests for information by the
Exchange in the course of a regulatory
investigation. Moreover, while ATP
Holders are generally required to
provide information to the Exchange as
requested, specifying that ATP Holders
must provide written documentation
regarding information barriers within
the context of NYSE Amex Options Rule
935NY would require that all ATP
Holders adhere to the same standard for
demonstrating compliance with NYSE
Amex Options Rule 935NY.
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
10 15
E:\FR\FM\09DEN1.SGM
U.S.C. 78f(b)(7).
09DEN1
77032
Federal Register / Vol. 76, No. 237 / Friday, December 9, 2011 / Notices
become effective pursuant to Section
19(b)(3)(A) of the Act 11 and Rule 19b–
4(f)(6) thereunder.12
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 rulecomments@sec.gov. Please include File
Number SR–NYSEAmex–2011–92 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–2011–92. 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
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
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18:35 Dec 08, 2011
Jkt 226001
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–2011–92 and should be
submitted on or before December 30,
2011.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2011–31633 Filed 12–8–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–65878; File No. SR–
NASDAQ–2011–165]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Modify
NASDAQ’s Transaction Execution Fee
and Credit Schedule in Rule 7018
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
30, 2011, The NASDAQ Stock Market
LLC (‘‘NASDAQ’’ or the ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘Commission’’) 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 is proposing to modify
NASDAQ’s transaction execution fee
and credit schedule in Rule 7018.
NASDAQ proposes to implement the
proposed rule change on December 1,
2011. The text of the proposed rule
change is available on the Exchange’s
Web site at https://
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00099
Fmt 4703
Sfmt 4703
nasdaq.cchwallstreet.com/Filings, at the
principal office of the Exchange, 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, 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 III [sic]
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
NASDAQ is amending its fee and
credit schedule for transaction
executions in Rule 7018(a).3 First,
NASDAQ is expanding the criteria
under which a member may qualify for
its highest liquidity provider credit tier
($0.00295 per share executed for
displayed quotes/orders and $0.0015
per share executed for non-displayed
quotes/orders). Currently, a member
qualifies for this rebate tier if either (i)
the shares of liquidity provided in all
securities through one of its Market
Participant Identifiers (‘‘MPIDs’’)
represent more than 0.90% of the total
consolidated volume reported to all
consolidated transaction reporting plans
by all exchanges and trade reporting
facilities (‘‘Consolidated Volume’’) 4
during the month; or (ii) the member
provides shares of liquidity in all
securities during the month
representing more than 1.0% of
Consolidated Volume during the month
through one or more of its NASDAQ
Market Center MPIDs, and the member
has an average daily volume during the
month of more than 200,000 contracts of
liquidity accessed or provided through
one or more of its Nasdaq Options
Market MPIDs. Under the proposed
change, a member may also qualify for
this rebate tier if (i) it is a registered
market maker, through a single MPID, in
3 Rule 7018(a) applies to executions at $1 or more
per share.
4 In addition to the substantive changes that it is
proposing, NASDAQ is also (i) adopting the defined
term ‘‘Consolidated Volume’’ and introducing it
where appropriate throughout Rule 7018, and (ii)
making minor clarifying edits to the text of Rule
7018(a)(3).
E:\FR\FM\09DEN1.SGM
09DEN1
]]>Agencies
[Federal Register Volume 76, Number 237 (Friday, December 9, 2011)]
[Notices]
[Pages 77030-77032]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-31633]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65893; File No. SR-NYSEAmex-2011-92]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Specifying in Its
Rules an Existing Policy Related to the Application of NYSE Amex
Options Rule 935NY
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 23, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') 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 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
[[Page 77031]]
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 specify in its rules an existing policy
related to the application of NYSE Amex Options Rule 935NY. The text of
the proposed rule change is available at the Exchange, at https://www.nyse.com, 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 specify in its rules an existing policy
related to the application of NYSE Amex Options Rule 935NY.
NYSE Amex Options Rule 935NY provides, in part, that Users \5\ may
not execute as principal orders they represent as agent unless agency
orders are first exposed on the Exchange for at least one second. This
requirement gives other market participants an opportunity to
participate in the execution of orders before the entering User
executes them. The Exchange recognizes, however, that because the
Exchange does not identify the User that entered an order to the NYSE
Amex System, orders from the same ATP Holder may inadvertently execute
against each other as a result of being entered by different persons
and/or systems at the same ATP Holder. Therefore, when enforcing NYSE
Amex Options Rule 935NY, the Exchange does not consider the inadvertent
interaction of orders from the same ATP Holder within one second to be
a violation of the exposure requirement.
---------------------------------------------------------------------------
\5\ The term ``User'' means any ATP Holder that is authorized to
obtain access to the NYSE Amex System pursuant to NYSE Amex Options
Rule 902.1NY. See NYSE Amex Options Rule 900.2NY(87).
---------------------------------------------------------------------------
When investigating potential violations of NYSE Amex Options Rule
935NY, the Exchange takes into consideration whether orders that
executed against each other within one second in the NYSE Amex System
were entered by persons, business units and/or systems at the same ATP
Holder that did not have knowledge of the order in the NYSE Amex
System.\6\ Commonly, ATP Holders are able to demonstrate that orders
were entered by individuals or systems that did not have the ability to
know of the preexisting order in the NYSE Amex System due to
information barriers in place at the time the orders were entered.
---------------------------------------------------------------------------
\6\ The Financial Industry Regulatory Authority, Inc.
(``FINRA''), on behalf of the Exchange and pursuant to a Regulatory
Services Agreement (``RSA''), conducts routine surveillance to
identify instances when an order in the NYSE Amex System is executed
against an order entered by the same ATP Holder within one second.
---------------------------------------------------------------------------
The Exchange proposes to codify this policy in Commentary .07 to
NYSE Amex Options Rule 935NY. Proposed Commentary .07 would specify
that ATP Holders may demonstrate that orders were entered without
knowledge of a preexisting order in the NYSE Amex System represented by
the same ATP Holder by providing evidence that effective information
barriers between the persons, business units and/or systems entering
the orders on the Exchange were in existence at the time the orders
were entered. Commentary .07 would require that such information
barriers be fully documented and provided to the Exchange upon
request.\7\
---------------------------------------------------------------------------
\7\ Information barrier documentation is reviewed by FINRA on
the Exchange's behalf to evaluate whether an ATP Holder has
implemented processes that are reasonably designed to prevent the
flow of pre-trade order information given the particular structure
of the ATP Holder. Additionally, information barriers are reviewed
as part of the Exchange's examination program, which is also
administered by FINRA pursuant to the RSA.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes that 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)
of the Act,\9\ 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. In
particular, the Exchange believes that codifying the Exchange's policy
that appropriate information barriers may be used to demonstrate that
the execution of two orders within one second was inadvertent because
the orders were entered without knowledge of each other, would clarify
the intent and application of NYSE Amex Options Rule 935NY for ATP
Holders.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange also believes that the proposed rule change is
consistent with Section 6(b)(7) of the Act,\10\ which requires the
rules of an exchange to provide a fair procedure for the disciplining
of members and persons associated with members. In particular, by
specifying that the information barriers must be fully documented for
the purpose of demonstrating that orders were entered without knowledge
that there was a pre-existing unexecuted agency or proprietary order on
the Exchange, ATP Holders would be better prepared to properly respond
to requests for information by the Exchange in the course of a
regulatory investigation. Moreover, while ATP Holders are generally
required to provide information to the Exchange as requested,
specifying that ATP Holders must provide written documentation
regarding information barriers within the context of NYSE Amex Options
Rule 935NY would require that all ATP Holders adhere to the same
standard for demonstrating compliance with NYSE Amex Options Rule
935NY.
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\10\ 15 U.S.C. 78f(b)(7).
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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
[[Page 77032]]
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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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-2011-92 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-2011-92. 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-2011-92 and should
be submitted on or before December 30, 2011.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-31633 Filed 12-8-11; 8:45 am]
BILLING CODE 8011-01-P
