Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Amex Equities Rule 70, 82009-82011 [2011-33446]

Download as PDF Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act.7 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: wreier-aviles on DSK3TPTVN1PROD with NOTICES 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 No. SR–Phlx–2011–177 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 No. SR–Phlx–2011–177. 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 7 15 U.S.C. 78s(b)(3)(A)(ii). VerDate Mar<15>2010 15:12 Dec 28, 2011 Jkt 226001 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 available publicly. All submissions should refer to File No. SR–Phlx–2011– 177 and should be submitted on or before January 19, 2012. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.8 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–33379 Filed 12–28–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66032; File No. SR– NYSEAmex–2011–99] Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Amex Equities 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, 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 8 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 PO 00000 Frm 00101 Fmt 4703 Sfmt 4703 82009 comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE Amex Equities 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 Amex Equities 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 E:\FR\FM\29DEN1.SGM 29DEN1 82010 Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices wreier-aviles on DSK3TPTVN1PROD with NOTICES 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 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 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. VerDate Mar<15>2010 15:12 Dec 28, 2011 Jkt 226001 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. 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 7 See Securities Exchange Act Release No. 61081 (December 1, 2009), 74 FR 64105 (December 7, 2009) (SR–NYSEAmex-2009–76). 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(5). PO 00000 Frm 00102 Fmt 4703 Sfmt 4703 to NYSE Amex Equities Rule 70 would promote just and equitable principles of trade and remove impediments to, and perfect the 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. 10 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6)(iii) requires the Exchange to give the Commission written notice of the Exchange’s intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. The Exchange has satisfied this requirement. 11 17 E:\FR\FM\29DEN1.SGM 29DEN1 Federal Register / Vol. 76, No. 250 / Thursday, December 29, 2011 / Notices 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–2011–99 on the subject line. wreier-aviles on DSK3TPTVN1PROD 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–2011–99. 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– NYSEAmex–2011–99 and should be submitted on or before January 19, 2012. VerDate Mar<15>2010 15:12 Dec 28, 2011 Jkt 226001 For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–33446 Filed 12–28–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66036; File Nos. SR–NYSE– 2011–56; SR–NYSEAmex–2011–86] Self-Regulatory Organizations; New York Stock Exchange LLC; NYSE Amex LLC; Notice of Designation of a Longer Period for Commission Action on Proposed Rule Changes To Codify Certain Traditional Trading Floor Functions That May Be Performed by Designated Market Makers 82011 time to consider these proposed rule changes, which modify the rules applicable to DMMs and floor brokers, including, among other things, making certain market information such as disaggregated order information available to DMMs and floor brokers. Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,5 designates February 15, 2012, as the date by which the Commission should either approve or disapprove or institute proceedings to determine whether to disapprove the proposed rule changes. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2011–33378 Filed 12–28–11; 8:45 am] BILLING CODE 8011–01–P December 22, 2011. On October 31, 2011, the New York Stock Exchange LLC (‘‘NYSE’’) and NYSE Amex LLC (‘‘NYSE Amex’’) each filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 proposed rule changes to amend certain of their respective rules relating to Designated Market Makers (‘‘DMMs’’). The proposed rule changes were published for comment in the Federal Register on November 17, 2011.3 The Commission received no comment letters on the proposals. Section 19(b)(2) of the Act 4 provides that within 45 days of the publication of notice of the filing of a proposed rule change, or within such longer period up to 90 days as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or as to which the self-regulatory organization consents, the Commission shall either approve the proposed rule change, disapprove the proposed rule change, or institute proceedings to determine whether the proposed rule change should be disapproved. The 45th day for this filing is January 1, 2012. The Commission is extending this 45-day time period. The Commission finds it appropriate to designate a longer period within which to take action on the proposed rule changes so that it has sufficient 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 Securities Exchange Act Release Nos. 65735 (November 10, 2011), 76 FR 71405 (SR– NYSEAmex–2011–86); and 65736 (November 10, 2011), 76 FR 71399 (SR–NYSE–2011–56). 4 15 U.S.C. 78s(b)(2). 1 15 PO 00000 Frm 00103 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66034; File No. SR–BATS– 2011–51] Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of Proposed Rule Change To Implement a Competitive Liquidity Provider Program December 22, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 16, 2011, BATS Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BATS’’) 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 Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed with the Commission a proposal to adopt new Interpretation and Policy .02 to Rule 11.8 to implement a Competitive Liquidity Provider (‘‘CLP’’) program (the ‘‘CLP Program’’) to incent competitive and aggressive quoting by market makers registered with the Exchange (‘‘Market Makers’’) in Exchange-listed securities. 5 15 U.S.C. 78s(b)(2). CFR 200.30–3(a)(31). 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 6 17 E:\FR\FM\29DEN1.SGM 29DEN1

Agencies

[Federal Register Volume 76, Number 250 (Thursday, December 29, 2011)]
[Notices]
[Pages 82009-82011]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33446]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66032; File No. SR-NYSEAmex-2011-99]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending 
Supplementary Material .26 (Pegging for d-Quotes and e-Quotes) to NYSE 
Amex Equities 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, 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 comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    The Exchange proposes to amend Supplementary Material .26 (Pegging 
for d-Quotes and e-Quotes) to NYSE Amex Equities 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 Amex Equities 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

[[Page 82010]]

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. 61081 (December 1, 
2009), 74 FR 64105 (December 7, 2009) (SR-NYSEAmex-2009-76).
---------------------------------------------------------------------------

    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 Amex Equities Rule 70 would promote just and 
equitable principles of trade and remove impediments to, and perfect 
the 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.

[[Page 82011]]

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-2011-99 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-2011-99. 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-NYSEAmex-2011-99 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. 2011-33446 Filed 12-28-11; 8:45 am]
BILLING CODE 8011-01-P