Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adopting the Text of Financial Industry Regulatory Authority Rule 5210, Which Prohibits the Publication of Manipulative or Deceptive Quotations or Transactions, as NYSE Amex Equities Rule 5210, 79728-79729 [2011-32816]

Download as PDF 79728 Federal Register / Vol. 76, No. 246 / Thursday, December 22, 2011 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–65953; File No. SR– NYSEAMEX–2011–93] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Adopting the Text of Financial Industry Regulatory Authority Rule 5210, Which Prohibits the Publication of Manipulative or Deceptive Quotations or Transactions, as NYSE Amex Equities Rule 5210 December 14, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1, and Rule 19b–4 2 thereunder, notice is hereby given that on December 7, 2011, NYSE Amex LLC (the ‘‘Exchange’’ or ‘‘NYSE Amex’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The Exchange proposes to adopt the text of Financial Industry Regulatory Authority (‘‘FINRA’’) Rule 5210, which prohibits the publication of manipulative or deceptive quotations or transactions, as NYSE Amex Equities Rule 5210. The text of the proposed rule change is available at the Exchange, the Commission’s Public Reference Room, and www.nyse.com. jlentini on DSK4TPTVN1PROD with NOTICES 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. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 19:17 Dec 21, 2011 Jkt 226001 1. Purpose The Exchange proposes to adopt the text of FINRA Rule 5210, which prohibits the publication of manipulative or deceptive quotations or transactions, as NYSE Amex Rule 5210.3 Background On July 30, 2007, the National Association of Securities Dealers, Inc. (‘‘NASD’’), and NYSE Regulation, Inc. (‘‘NYSER’’) consolidated their member firm regulation operations into a combined organization, FINRA, and entered into a Regulatory Services Agreement (‘‘RSA’’), under which FINRA agreed to perform certain regulatory functions of the Exchange on behalf of the Exchange. NYSE Amex became a party to the RSA effective December 15, 2008.4 On June 14, 2010, FINRA also assumed responsibility for performing the market surveillance and enforcement functions performed by NYSER. To facilitate FINRA’s performance of these enforcement functions and further harmonize the rules of FINRA and NYSE Amex, the Exchange is proposing to adopt the text of FINRA Rule 5210.5 FINRA Rule 5210 prohibits members from publishing or circulating, or causing to be published or circulated, any communication that purports to report any transaction as a purchase or sale of any security, unless such member believes that such transaction was a bona fide purchase or sale of such security. The Rule also prohibits members from publishing or circulating, or causing to be published or circulated, any communication that purports to quote the bid price or asked price for any security, unless the member believes that such quotation represents a bona fide bid for, or offer of, such security. The Exchange believes that the proposed rule change will strengthen FINRA’s ability to bring sanctions on 3 See Securities Exchange Act Release No. 60835 (Oct. 16, 2009), 74 FR 54616 (Oct. 22, 2009) (SR– FINRA–2009–055). The Exchange’s affiliates, New York Stock Exchange LLC and NYSE Arca, Inc., are proposing to adopt a substantially similar rule. 4 See Securities Exchange Act Release Nos. 56148 (July 26, 2007), 72 FR 42146 (August 1, 2007) (order approving the RSA); 56147 (July 26, 2007), 72 FR 42166 (August 1, 2007) (SR–NASD–2007–054) (order approving the incorporation of certain NYSE Rules as ‘‘Common Rules’’); and 60409 (July 30, 2009), 74 FR 39353 (August 6, 2009) (order approving the amended and restated RSA, adding NYSE Amex LLC as a party). 5 For consistency with Exchange rules, the Exchange proposes to change all references from ‘‘member’’ to ‘‘member organization.’’ PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 behalf of the Exchange against a member organization for engaging in manipulative forms of quoting behavior, for example, quote stuffing and layering. FINRA Rule 5210 (formerly NASD Rule 3310 and IM 3310) 6 was successfully used in the Acceptance, Waiver and Consent announced in September 2010 by FINRA against Trillium Brokerage Services and other individual Respondents.7 The Exchange believes that the proposed rule change would augment FINRA’s ability on behalf of the Exchange to take action against manipulative quoting behavior on the Exchange. 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, in that 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, and to remove impediments to and perfect the mechanism of a free and open market and a national market system. Specifically, the Exchange believes that the proposed rule change would provide an additional basis for bringing enforcement actions against Exchange member organizations that engage in deceptive and manipulative quoting activity. To the extent the Exchange has proposed changes that differ from the FINRA version of the Rules, such changes are technical in nature and do not change the substance of the FINRA Rule. 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. 6 See supra n. 3. http://www.finra.org/web/groups/industry/ @ip/@enf/@ad/documents/industry/p122044.pdf. 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). 7 See E:\FR\FM\22DEN1.SGM 22DEN1 Federal Register / Vol. 76, No. 246 / Thursday, December 22, 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 19b4(f)(6) thereunder.11 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 because such waiver will allow FINRA to more effectively carry out its enforcement activities on behalf of the Exchange. Therefore, the Commission designates the proposal operative upon filing.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 (http://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSEAMEX–2011–93 on the subject line. 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 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). 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– 2011–93. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR– NYSEAMEX–2011–93, and should be submitted on or before January 12, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–32816 Filed 12–21–11; 8:45 am] BILLING CODE 8011–01–P 10 15 jlentini on DSK4TPTVN1PROD with NOTICES 11 17 VerDate Mar<15>2010 19:17 Dec 21, 2011 Jkt 226001 13 17 PO 00000 CFR 200.30–3(a)(12). Frm 00084 Fmt 4703 Sfmt 4703 79729 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66001; File No. SR–ICC– 2011–03] Self-Regulatory Organizations; ICE Clear Credit LLC; Order Approving Proposed Rule Change To Adopt ICC’s Enhanced Margin Methodology December 16, 2011. I. Introduction On November 4, 2011, ICE Clear Credit LLC (‘‘ICC’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change SR–ICC–2011–03 pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder.2 The proposed rule change was published for comment in the Federal Register on November 10, 2011.3 The Commission received three comment letters regarding the proposal.4 For the reasons discussed below, the Commission is granting approval of the proposed rule change. II. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change This rule permits ICC to make certain modifications to its Risk Management Framework for clearing credit default swap (‘‘CDS’’) contracts. These modifications are collectively referred to as the ‘‘Portfolio Decomposition Model.’’ A fundamental aspect of ICC’s Portfolio Decomposition Model is the recognition that CDS contracts cleared by ICC referencing broad-based securities indices are essentially compositions of specific single-name CDS contracts. Under the Portfolio Decomposition Model, ICC would, among other things, decompose CDS contracts referencing broad-based 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Securities Exchange Act Release No. 34–65699 (November 7, 2011), 76 FR 70206 (November 10, 2011). In its filing with the Commission, ICC 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. 4 See comment letter from Michael Hisler, Swaps & Derivatives Market Association, dated December 5, 2011 (‘‘SDMA Letter’’) and comment letters from John Williams, Allen & Overy LLP, on behalf of Bank of America Merrill Lynch, Barclays Capital, BNP Paribas, Citi, Credit Suisse Securities (USA), Deutsche Bank AG, JPMorgan Chase & Co., Morgan Stanley and UBS Securities LLC, dated December 1, 2011 and December 5, 2011 (‘‘Allen & Overy Letters’’). Allen & Overy LLP’s December 5, 2011 letter amended its December 1, 2011 letter, with the sole change consisting of the addition of The Goldman Sachs Group, Inc., Nomura Securities International, and The Royal Bank of Scotland plc as signatories. 2 17 E:\FR\FM\22DEN1.SGM 22DEN1

Agencies

[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Notices]
[Pages 79728-79729]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-32816]



[[Page 79728]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65953; File No. SR-NYSEAMEX-2011-93]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Adopting the Text 
of Financial Industry Regulatory Authority Rule 5210, Which Prohibits 
the Publication of Manipulative or Deceptive Quotations or 
Transactions, as NYSE Amex Equities Rule 5210

December 14, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby 
given that on December 7, 2011, NYSE Amex LLC (the ``Exchange'' or 
``NYSE Amex'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. 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.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to adopt the text of Financial Industry 
Regulatory Authority (``FINRA'') Rule 5210, which prohibits the 
publication of manipulative or deceptive quotations or transactions, as 
NYSE Amex Equities Rule 5210. The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, and 
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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to adopt the text of FINRA Rule 5210, which 
prohibits the publication of manipulative or deceptive quotations or 
transactions, as NYSE Amex Rule 5210.\3\
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 60835 (Oct. 16, 
2009), 74 FR 54616 (Oct. 22, 2009) (SR-FINRA-2009-055). The 
Exchange's affiliates, New York Stock Exchange LLC and NYSE Arca, 
Inc., are proposing to adopt a substantially similar rule.
---------------------------------------------------------------------------

Background

    On July 30, 2007, the National Association of Securities Dealers, 
Inc. (``NASD''), and NYSE Regulation, Inc. (``NYSER'') consolidated 
their member firm regulation operations into a combined organization, 
FINRA, and entered into a Regulatory Services Agreement (``RSA''), 
under which FINRA agreed to perform certain regulatory functions of the 
Exchange on behalf of the Exchange. NYSE Amex became a party to the RSA 
effective December 15, 2008.\4\ On June 14, 2010, FINRA also assumed 
responsibility for performing the market surveillance and enforcement 
functions performed by NYSER. To facilitate FINRA's performance of 
these enforcement functions and further harmonize the rules of FINRA 
and NYSE Amex, the Exchange is proposing to adopt the text of FINRA 
Rule 5210.\5\ FINRA Rule 5210 prohibits members from publishing or 
circulating, or causing to be published or circulated, any 
communication that purports to report any transaction as a purchase or 
sale of any security, unless such member believes that such transaction 
was a bona fide purchase or sale of such security. The Rule also 
prohibits members from publishing or circulating, or causing to be 
published or circulated, any communication that purports to quote the 
bid price or asked price for any security, unless the member believes 
that such quotation represents a bona fide bid for, or offer of, such 
security.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release Nos. 56148 (July 26, 
2007), 72 FR 42146 (August 1, 2007) (order approving the RSA); 56147 
(July 26, 2007), 72 FR 42166 (August 1, 2007) (SR-NASD-2007-054) 
(order approving the incorporation of certain NYSE Rules as ``Common 
Rules''); and 60409 (July 30, 2009), 74 FR 39353 (August 6, 2009) 
(order approving the amended and restated RSA, adding NYSE Amex LLC 
as a party).
    \5\ For consistency with Exchange rules, the Exchange proposes 
to change all references from ``member'' to ``member organization.''
---------------------------------------------------------------------------

    The Exchange believes that the proposed rule change will strengthen 
FINRA's ability to bring sanctions on behalf of the Exchange against a 
member organization for engaging in manipulative forms of quoting 
behavior, for example, quote stuffing and layering. FINRA Rule 5210 
(formerly NASD Rule 3310 and IM 3310) \6\ was successfully used in the 
Acceptance, Waiver and Consent announced in September 2010 by FINRA 
against Trillium Brokerage Services and other individual 
Respondents.\7\ The Exchange believes that the proposed rule change 
would augment FINRA's ability on behalf of the Exchange to take action 
against manipulative quoting behavior on the Exchange.
---------------------------------------------------------------------------

    \6\ See supra n. 3.
    \7\ See http://www.finra.org/web/groups/industry/@ip/@enf/@ad/documents/industry/p122044.pdf.
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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, in that 
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, and to remove impediments to and perfect 
the mechanism of a free and open market and a national market system. 
Specifically, the Exchange believes that the proposed rule change would 
provide an additional basis for bringing enforcement actions against 
Exchange member organizations that engage in deceptive and manipulative 
quoting activity. To the extent the Exchange has proposed changes that 
differ from the FINRA version of the Rules, such changes are technical 
in nature and do not change the substance of the FINRA Rule.
---------------------------------------------------------------------------

    \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 79729]]

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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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 because such waiver will allow FINRA to more effectively carry 
out its enforcement activities on behalf of the Exchange. Therefore, 
the Commission designates the proposal operative upon filing.\12\
---------------------------------------------------------------------------

    \12\ 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).
---------------------------------------------------------------------------

    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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEAMEX-2011-93 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-2011-93. 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 (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, 
all written statements with respect to the proposed rule change that 
are filed with the Commission, and all written communications relating 
to the proposed rule change between the Commission and any person, 
other than those that may be withheld from the public in accordance 
with the provisions of 5 U.S.C. 552, will be available for Web site 
viewing and printing in the Commission's Public Reference Room, 100 F 
Street NE., Washington, DC 20549, on official business days between the 
hours of 10 a.m. and 3 p.m. Copies of such filing also will be 
available for inspection and copying at the principal office of the 
Exchange. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
publicly available. All submissions should refer to File Number SR-
NYSEAMEX-2011-93, and should be submitted on or before January 12, 
2012.


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
---------------------------------------------------------------------------

    \13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32816 Filed 12-21-11; 8:45 am]
BILLING CODE 8011-01-P