Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Rule 70, 82024-82026 [2011-33445]

Download as PDF 82024 Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices FINRA adopted Rule 6480 on a pilot basis on July 23, 2009.8 The pilot period currently expires on January 27, 2012.9 FINRA has filed the proposed rule change for immediate effectiveness. The implementation date of the proposed rule change will be January 27, 2012. 2. Statutory Basis FINRA believes that the proposed rule change is consistent with the provisions of Section 15A(b)(6) of the Act,10 which requires, among other things, that FINRA rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. FINRA believes that the proposed rule change is consistent with these requirements because it will continue to provide a process by which members can request, and FINRA can properly allocate, the use of additional MPIDs for displaying quotes and orders through the ADF or reporting trades to a TRF or the ORF. B. Self-Regulatory Organization’s Statement on Burden on Competition FINRA does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. wreier-aviles on DSK3TPTVN1PROD with NOTICES III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) Impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, it has become effective pursuant to Section 19(b)(3)(A) of the 8 See Securities Exchange Act Release No. 60414 (July 31, 2009), 74 FR 39721 (August 7, 2009). 9 See Securities Exchange Act Release No. 63729 (January 18, 2011), 76 FR 4403 (January 25, 2011); see also Securities Exchange Act Release No. 61297 (January 6, 2010), 75 FR 2173 (January 14, 2010). 10 15 U.S.C. 78o–3(b)(6). VerDate Mar<15>2010 15:12 Dec 28, 2011 Jkt 226001 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved. 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–FINRA–2011–074 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–FINRA–2011–074. 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 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 self-regulatory organization to submit to the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. FINRA has satisfied this requirement. 12 17 PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 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 FINRA. 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–FINRA–2011–074 and should be submitted on or before January 19, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–33447 Filed 12–28–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66031; File No. SR–NYSE– 2011–62] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Rule 70 December 22, 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 December 14, 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 ‘‘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. 13 17 CFR 200.30–3(a)(12). 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). 1 15 E:\FR\FM\29DEN1.SGM 29DEN1 Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Rule 70. The text of the proposed rule change is available at the Exchange, at www.nyse.com, the Commission’s Public Reference Room, and at 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. wreier-aviles on DSK3TPTVN1PROD with NOTICES 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 Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Rule 70. Paragraph (i) of Supplementary Material .26 states that an e-Quote may be set to provide that it will be available for execution at the national best bid (‘‘NBB’’) (for an e-Quote that represents a buy order) or at the national best offer (‘‘NBO’’) (for an e-Quote that represents a sell order) as the national best bid or offer (‘‘NBBO’’) changes, so long as the NBBO is at or within the e-Quote’s limit price. Paragraph (x) of Supplementary Material .26 further provides that, as long as the NBB or NBO is within the pegging price range selected by the Floor broker, the pegging e-Quote or dQuote will join the NBB or NBO as it is autoquoted. As such, pegging interest may peg to a price that may not be displayed at the Exchange. For example, if the NBB is $10.05 and the Exchange best bid is $10.04, a pegging e-Quote to buy will display at the Exchange at $10.05, thus creating a new Exchange best bid. Because pegging interest automatically pegs to the NBBO, under current rules and functionality, a pegging e-Quote could peg to an NBB or NBO that is locking or crossing an existing Exchange best bid or offer. For VerDate Mar<15>2010 15:12 Dec 28, 2011 Jkt 226001 example, if the Exchange best bid is $10.04 and the NBO locks it at $10.04, a pegging e-Quote to sell would peg to the $10.04 NBO price and then immediately execute against the Exchange’s best bid of $10.04. In such scenario, a pegging e-Quote, which is intended to be reactive, becomes taker interest. Similarly, if automatic executions on the buy (sell) side are suspended at the Exchange, for example, if a liquidity replenishment point is reached pursuant to NYSE Rule 1000, the NYSE would not be displaying a protected bid (offer) and therefore other markets could display a protected offer (bid) that crosses the Exchange best bid (offer). In such scenario, if the NBO moved to below the Exchange best bid of $10.04, a pegging e-Quote to sell would peg to that NBO, which would cross the Exchange best bid. The Exchange proposes to add new paragraph (x)(A) to Supplementary Material .26 to provide that a pegging eQuote or d-Quote to buy (sell) would not peg to an NBB (NBO) that is locking or crossing the Exchange best offer (bid), but would instead join the next available best-priced non-pegging interest that does not lock or cross the Exchange best offer (bid).5 Customers have requested this change because in the infrequent circumstances when the NBBO is locking or crossing the Exchange best bid or offer,6 customers do not want their pegging interest, for which the ultimate goal is to be passive liquidity for purposes of execution, to become taker interest. Because the next available best-priced non-pegging interest may be on an away market, the Exchange further proposes to amend paragraph (vii) to Supplementary .26 to specify that the non-pegging interest against which pegging interest pegs may either be available on the Exchange or may be a protected bid or offer on an away market. The Exchange believes that this is already implied in Supplementary .26, particularly because pegging interest can peg to the NBB or 5 When an exception to the prohibition against trade-throughs is in effect, pursuant to Rule 611(b)(4) of Regulation NMS, technically, there are no available protected bids or offers against which an e-Quote or d-Quote can peg. In such situations, the pegging interest would peg to the next available best-priced non-pegging interest on the Exchange that is within the price range selected by the Floor broker. 6 The Exchange would re-price pegging interest only if the NBBO is locking or crossing the Exchange best bid or offer and not if the NBBO is ‘‘locking’’ or ‘‘crossing’’ undisplayed liquidity at the Exchange. For example, where the Exchange best bid and offer is $10.02 and $10.04 and there is ‘‘dark’’ reserve buy interest at $10.03, if the NBO becomes $10.03, pegging sell interest will peg to the $10.03 NBO and will execute against the Exchange ‘‘dark’’ reserve interest priced at $10.03. PO 00000 Frm 00117 Fmt 4703 Sfmt 4703 82025 NBO, which may or may not be a displayed price at the Exchange,7 and is proposing this change only to add greater specificity to Supplementary Material .26. The Exchange also proposes to add new paragraph (x)(B) to Supplementary Material .26 to provide that the converse of paragraph (x) is also true. Specifically, if the NBB (NBO) is not within the pegging price range selected by the Floor broker, then a pegging eQuote or d-Quote to buy (sell) will join the next available best-priced nonpegging interest that is within the price range selected by the Floor broker. Finally, the Exchange proposes to amend paragraph (xiii) to Supplementary Material .26 to delete the text that permits Floor brokers to specify a maximum size validation for eQuotes and d-Quotes. Floor brokers have not availed themselves of this functionality and the Exchange has therefore decided to eliminate it from Supplementary Material .26. In addition, because pegging interest is considered when assessing the minimum volume size of same-side interest against which to peg, the Exchange proposes to delete the last sentence of paragraph (xiii) to Supplementary Material .26. 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. Specifically, the Exchange believes that the proposed changes to Supplementary Material .26 to NYSE Rule 70 would promote just and equitable principles of trade and remove impediments to, and perfect the 7 See Securities Exchange Act Release No. 61072 (November 30, 2009), 74 FR 64103 (December 7, 2009) (SR–NYSE–2009–106). 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). E:\FR\FM\29DEN1.SGM 29DEN1 82026 Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices mechanism of, a free and open market because they would reduce the potential for the Exchange best bid or offer to be locked or crossed. The proposed changes would also promote transparency by adding greater specificity with respect to the interest to which pegging e-Quotes and d-Quotes may peg and would remove text corresponding to a functionality that Floor brokers have not availed themselves of and therefore is no longer necessary to promote just and equitable principles of trade. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change does not significantly affect the protection of investors or the public interest, does not impose any significant burden on competition, and, by its terms, does not become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act 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. wreier-aviles on DSK3TPTVN1PROD with NOTICES IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, 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. VerDate Mar<15>2010 15:12 Dec 28, 2011 Jkt 226001 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–NYSE–2011–62 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–NYSE–2011–62. 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 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–NYSE– 2011–62 and should be submitted on or before January 19, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–33445 Filed 12–28–11; 8:45 am] BILLING CODE 8011–01–P 12 17 PO 00000 CFR 200.30–3(a)(12). Frm 00118 Fmt 4703 Sfmt 4703 DEPARTMENT OF STATE [Public Notice 6825] Shipping Coordinating Committee; Notice of Committee Meeting The Shipping Coordinating Committee (SHC) will conduct an open meeting at 9:30 a.m. on Wednesday, January 18, 2012, in Room 6103 of the United States Coast Guard Headquarters Building, 2100 2nd Street SW., Washington, DC 20593–7126. The primary purpose of the meeting is to prepare for the sixteenth Session of the International Maritime Organization’s (IMO) Bulk Liquids and Gases Subcommittee to be held at the IMO Headquarters, United Kingdom, January 30–February 3, 2012. The primary matters to be considered include: —Decisions of other IMO bodies —Evaluation of safety and pollution hazards of chemicals and preparation of consequential amendments —Development of guidelines and other documents for uniform implementation of the 2004 BWM Convention —Development of international measures for minimizing the transfer of invasive aquatic species through bio-fouling of ships —Development of international code of safety for ships using gases or other low flashpoint fuels —Development of revised IGC Code —Review of relevant non-mandatory instruments as a consequence of the amended MARPOL Annex VI and the NOX Technical Code —Development of a code for the transport and handling of limited amounts of hazardous and noxious liquid substances in bulk in offshore support vessels —Consideration of amendment to SOLAS to mandate enclosed space entry and rescue drills —Consideration of IACS unified interpretations —Casualty analysis —Biennial agenda and provisional agenda for BLG 17 —Election of Chairman and ViceChairman for 2013 —Any other business —Report to the Committees Members of the public may attend this meeting up to the seating capacity of the room. To facilitate the building security process, and to request reasonable accommodation, those who plan to attend should contact the meeting coordinator, Mr. Thomas Felleisen, by email at Thomas.J.Felleisen@uscg.mil, by phone E:\FR\FM\29DEN1.SGM 29DEN1

Agencies

[Federal Register Volume 76, Number 250 (Thursday, December 29, 2011)]
[Notices]
[Pages 82024-82026]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33445]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66031; File No. SR-NYSE-2011-62]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Amending Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) 
to NYSE Rule 70

December 22, 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 December 14, 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 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).

---------------------------------------------------------------------------

[[Page 82025]]

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

    The Exchange proposes to amend Supplementary Material .26 (Pegging 
for d-Quotes and e-Quotes) to NYSE Rule 70. The text of the proposed 
rule change is available at the Exchange, at www.nyse.com, the 
Commission's Public Reference Room, and at 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 Supplementary Material .26 (Pegging 
for d-Quotes and e-Quotes) to NYSE Rule 70.
    Paragraph (i) of Supplementary Material .26 states that an e-Quote 
may be set to provide that it will be available for execution at the 
national best bid (``NBB'') (for an e-Quote that represents a buy 
order) or at the national best offer (``NBO'') (for an e-Quote that 
represents a sell order) as the national best bid or offer (``NBBO'') 
changes, so long as the NBBO is at or within the e-Quote's limit price. 
Paragraph (x) of Supplementary Material .26 further provides that, as 
long as the NBB or NBO is within the pegging price range selected by 
the Floor broker, the pegging e-Quote or d-Quote will join the NBB or 
NBO as it is autoquoted. As such, pegging interest may peg to a price 
that may not be displayed at the Exchange. For example, if the NBB is 
$10.05 and the Exchange best bid is $10.04, a pegging e-Quote to buy 
will display at the Exchange at $10.05, thus creating a new Exchange 
best bid.
    Because pegging interest automatically pegs to the NBBO, under 
current rules and functionality, a pegging e-Quote could peg to an NBB 
or NBO that is locking or crossing an existing Exchange best bid or 
offer. For example, if the Exchange best bid is $10.04 and the NBO 
locks it at $10.04, a pegging e-Quote to sell would peg to the $10.04 
NBO price and then immediately execute against the Exchange's best bid 
of $10.04. In such scenario, a pegging e-Quote, which is intended to be 
reactive, becomes taker interest. Similarly, if automatic executions on 
the buy (sell) side are suspended at the Exchange, for example, if a 
liquidity replenishment point is reached pursuant to NYSE Rule 1000, 
the NYSE would not be displaying a protected bid (offer) and therefore 
other markets could display a protected offer (bid) that crosses the 
Exchange best bid (offer). In such scenario, if the NBO moved to below 
the Exchange best bid of $10.04, a pegging e-Quote to sell would peg to 
that NBO, which would cross the Exchange best bid.
    The Exchange proposes to add new paragraph (x)(A) to Supplementary 
Material .26 to provide that a pegging e-Quote or d-Quote to buy (sell) 
would not peg to an NBB (NBO) that is locking or crossing the Exchange 
best offer (bid), but would instead join the next available best-priced 
non-pegging interest that does not lock or cross the Exchange best 
offer (bid).\5\ Customers have requested this change because in the 
infrequent circumstances when the NBBO is locking or crossing the 
Exchange best bid or offer,\6\ customers do not want their pegging 
interest, for which the ultimate goal is to be passive liquidity for 
purposes of execution, to become taker interest. Because the next 
available best-priced non-pegging interest may be on an away market, 
the Exchange further proposes to amend paragraph (vii) to Supplementary 
.26 to specify that the non-pegging interest against which pegging 
interest pegs may either be available on the Exchange or may be a 
protected bid or offer on an away market. The Exchange believes that 
this is already implied in Supplementary .26, particularly because 
pegging interest can peg to the NBB or NBO, which may or may not be a 
displayed price at the Exchange,\7\ and is proposing this change only 
to add greater specificity to Supplementary Material .26.
---------------------------------------------------------------------------

    \5\ When an exception to the prohibition against trade-throughs 
is in effect, pursuant to Rule 611(b)(4) of Regulation NMS, 
technically, there are no available protected bids or offers against 
which an e-Quote or d-Quote can peg. In such situations, the pegging 
interest would peg to the next available best-priced non-pegging 
interest on the Exchange that is within the price range selected by 
the Floor broker.
    \6\ The Exchange would re-price pegging interest only if the 
NBBO is locking or crossing the Exchange best bid or offer and not 
if the NBBO is ``locking'' or ``crossing'' undisplayed liquidity at 
the Exchange. For example, where the Exchange best bid and offer is 
$10.02 and $10.04 and there is ``dark'' reserve buy interest at 
$10.03, if the NBO becomes $10.03, pegging sell interest will peg to 
the $10.03 NBO and will execute against the Exchange ``dark'' 
reserve interest priced at $10.03.
    \7\ See Securities Exchange Act Release No. 61072 (November 30, 
2009), 74 FR 64103 (December 7, 2009) (SR-NYSE-2009-106).
---------------------------------------------------------------------------

    The Exchange also proposes to add new paragraph (x)(B) to 
Supplementary Material .26 to provide that the converse of paragraph 
(x) is also true. Specifically, if the NBB (NBO) is not within the 
pegging price range selected by the Floor broker, then a pegging e-
Quote or d-Quote to buy (sell) will join the next available best-priced 
non-pegging interest that is within the price range selected by the 
Floor broker.
    Finally, the Exchange proposes to amend paragraph (xiii) to 
Supplementary Material .26 to delete the text that permits Floor 
brokers to specify a maximum size validation for e-Quotes and d-Quotes. 
Floor brokers have not availed themselves of this functionality and the 
Exchange has therefore decided to eliminate it from Supplementary 
Material .26. In addition, because pegging interest is considered when 
assessing the minimum volume size of same-side interest against which 
to peg, the Exchange proposes to delete the last sentence of paragraph 
(xiii) to Supplementary Material .26.
    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. Specifically, 
the Exchange believes that the proposed changes to Supplementary 
Material .26 to NYSE Rule 70 would promote just and equitable 
principles of trade and remove impediments to, and perfect the

[[Page 82026]]

mechanism of, a free and open market because they would reduce the 
potential for the Exchange best bid or offer to be locked or crossed. 
The proposed changes would also promote transparency by adding greater 
specificity with respect to the interest to which pegging e-Quotes and 
d-Quotes may peg and would remove text corresponding to a functionality 
that Floor brokers have not availed themselves of and therefore is no 
longer necessary to promote just and equitable principles of trade.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not significantly 
affect the protection of investors or the public interest, does not 
impose any significant burden on competition, and, by its terms, does 
not become operative for 30 days from the date on which it was filed, 
or such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \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.
---------------------------------------------------------------------------

    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-NYSE-2011-62 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-NYSE-2011-62. 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 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-NYSE-2011-62 and should be 
submitted on or before January 19, 2012.

    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. 2011-33445 Filed 12-28-11; 8:45 am]
BILLING CODE 8011-01-P