Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rule 7.31 To Specify How the Immediate-or-Cancel Time-in-Force Instructions Are Applicable to an MPL Order, 24750-24752 [2012-9969]

Download as PDF 24750 Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices TRACE-Eligible Securities.23 Moreover, public dissemination of MBS TBA transaction information has heretofore not existed in the MBS TBA market. The dissemination caps allow FINRA to implement post-trade price transparency in that market incrementally. FINRA has represented that it will continue to review the volume of and liquidity in the MBS TBA market and, if warranted in the future, may recommend that the dissemination caps be set at higher levels in order to provide additional transparency. Lastly, the Commission finds that FINRA’s proposed fees for MBS TBA market and historic transaction data are consistent with Section 15A(b)(5) of the Act, which requires, among other things, that FINRA rules provide for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility or system which the association operates or controls. These fees are similar to those that currently apply to corporate debt securities and Agency Debt Securities.24 IV. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,25 that the proposed rule change (SR–FINRA– 2012–020) be, and it hereby is, approved. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.26 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–9840 Filed 4–24–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION pmangrum on DSK3VPTVN1PROD with NOTICES Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca Equities Rule 7.31 To Specify How the Immediate-or-Cancel Time-in-Force Instructions Are Applicable to an MPL Order Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 supra note 15. FINRA Rule 7730. 25 15 U.S.C. 78s(b)(2). 26 17 CFR 200.30–3(a)(12). I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE Arca Equities Rule 7.31 to specify how the immediate-or-cancel (‘‘IOC’’) time-in-force instructions are applicable to an MPL Order. The text of the proposed rule change is available at the Exchange, www.nyse.com, and the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item 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 [Release No. 34–66833; File No. SR– NYSEArca–2012–32] April 19, 2012. (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on April 10, 2012, NYSE Arca, Inc. (the ‘‘Exchange’’ or ‘‘NYSE Arca’’) 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 Exchange. The Exchange has designated the proposed rule change as constituting a rule change under Rule 19b–4(f)(6) under the Act,3 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. 1. Purpose The Exchange proposes to amend NYSE Arca Equities Rule 7.31 to specify how the IOC time-in-force instructions are applicable to an MPL Order. Background An MPL Order is a type of Working Order that has conditional or undisplayed price and/or size. As set forth in NYSE Arca Equities Rule 7.31(h)(5), an MPL Order is a Passive Liquidity Order that is priced at the midpoint of the PBBO and does not 23 See 24 See VerDate Mar<15>2010 15:14 Apr 24, 2012 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 17 CFR 240.19b–4(f)(6). 2 17 Jkt 226001 PO 00000 Frm 00080 Fmt 4703 Sfmt 4703 trade through a Protected Quotation. An MPL Order has a minimum order entry size of one share and Users may specify a minimum executable size for an MPL Order, which must be no less than one share. If an MPL Order has a specified minimum executable size, it will execute against an incoming order that meets the minimum executable size and is priced at or better than the midpoint of the PBBO. If the leaves quantity becomes less than the minimum size, the minimum executable size restriction will no longer be enforced on executions. If the market is locked or crossed, the MPL Order will wait for the market to unlock or uncross before becoming eligible to trade again. MPL Orders are ranked in time priority for the purposes of execution as long as the midpoint is within the limit range of the order. MPL Orders always execute at the midpoint and do not receive price improvement. MPL Orders are valid for any session, but do not participate in auctions. Unlike Passive Liquidity Orders, MPL Orders are not exclusive to lead market makers (‘‘LMM’’) for securities for which the Exchange is the primary market. Users that choose not to trade with MPL Orders may mark incoming limit orders with a ‘‘No Midpoint Execution’’ designator and such limit orders will ignore MPL Orders. MPL Orders do not route out of the Exchange to other market centers. NYSE Arca Equities Rule 7.31 sets forth the time-in-force conditions that are available for orders entered at the Exchange. One such time-in-force condition is the IOC condition, which provides that a market or limit order that is marked IOC is to be executed in whole or in part as soon as such order is received, and the portion not so executed is to be treated as cancelled. Proposed Rule Change The Exchange proposes to add NYSE Arca Equities Rule 7.31(h)(6) to specify how the IOC time-in-force conditions are applicable to an MPL Order (an ‘‘MPL–IOC Order’’). Because it is an MPL Order, the proposed MPL–IOC Order follows the same execution and priority rules of an MPL Order, including that it would be a Passive Liquidity Order that is priced at the midpoint of the PBBO, does not trade through Protected Quotations, always executes at the midpoint, does not receive price improvement, does not route to other market centers, is not limited to LMMs for securities listed on the Exchange, and will not trade with incoming limit orders with a ‘‘No Midpoint Execution’’ designator. E:\FR\FM\25APN1.SGM 25APN1 Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices pmangrum on DSK3VPTVN1PROD with NOTICES Because of the IOC attributes, certain elements of the MPL Order, by their terms, are not applicable to the proposed MPL–IOC Order. First, because an IOC order cancels if it does not immediately execute, Users will not be able to specify a minimum executable size for the proposed MPL– IOC Order. Along those lines, because an IOC order cancels if not immediately executed, the related aspect of the MPL Order concerning the leaves quantity of an MPL Order are also inapplicable. Second, if a proposed MPL–IOC order cannot immediately execute because the market is either locked or crossed, unlike an MPL Order, an MPL–IOC Order would cancel in such a situation. The Exchange proposes to identify these differences in proposed NYSE Arca Equities Rule 7.31(h)(6). In addition, because by definition, an IOC order executes upon arrival, a proposed MPL– IOC order would not execute against incoming interest, but against resting interest. The Exchange proposes one further distinction for the MPL–IOC Order. As noted above, the minimum share size for an MPL Order is one share. The Exchange proposes to require that an MPL–IOC Order have a minimum entry size of one round lot. The Exchange believes that this additional requirement will reduce the use of this order type by market participants that are seeking to discover hidden interest at the Exchange without any market risk. Because of the technology changes necessary to implement the proposed change, the Exchange will announce the implementation date of the MPL–IOC Order by Trader Update. 2. Statutory Basis The statutory basis for the proposed rule change is Section 6(b)(5) of the Securities Exchange Act of 1934 (the ‘‘Act’’),4 which requires the rules of an exchange to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest. The Exchange believes that the proposed rule change promotes just and equitable principles of trade because it would enable market participants to use the existing IOC time-in-force conditions with MPL Orders. The proposed rule change will also provide transparency in the Exchange rules of how the IOC time-inforce conditions will apply with MPL Orders and which aspects of the MPL Orders will be inapplicable. The Exchange further believes that the proposed rule change will perfect the mechanism of a free and open market because it adds additional flexibility in the use of the IOC time-in-force instructions with existing order types at the Exchange, thereby providing more flexibility to ETP Holders. Finally, the Exchange believes that the proposed requirement that an MPL–IOC order have a minimum entry size of one round lot will protect investors and the public interest because it will reduce the potential for market participants to use the MPL–IOC Order to probe the market for hidden interest without any significant risk. 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 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, provided that the self-regulatory organization has given the Commission written notice of its intent to file 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 proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 5 and Rule 19b–4(f)(6) thereunder.6 At any time within 60 days of the filing of such 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, 5 15 4 15 U.S.C. 78f(b). VerDate Mar<15>2010 15:14 Apr 24, 2012 6 17 Jkt 226001 PO 00000 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). Frm 00081 Fmt 4703 Sfmt 4703 24751 or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSEArca–2012–32 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–NYSEArca–2012–32. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–NYSEArca–2012–32 and should be submitted on or before May 16, 2012. E:\FR\FM\25APN1.SGM 25APN1 24752 Federal Register / Vol. 77, No. 80 / Wednesday, April 25, 2012 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.7 Elizabeth M. Murphy, Secretary. [FR Doc. 2012–9969 Filed 4–24–12; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–66834; File Nos. SR– EDGA–2012–08; SR–EDGX–2012–07; SR– ISE–2012–21] Self-Regulatory Organizations; EDGA Exchange, Inc.; EDGX Exchange, Inc.; International Securities Exchange, LLC; Order Granting Approval of Proposed Rule Change Relating to a Corporate Transaction in Which SIX Swiss Exchange AG Will Transfer Its Interest in ISE Holdings, Inc. to a Newly Formed Swiss Corporation, Eurex Global Derivatives AG April 19, 2012. I. Introduction On March 8, 2012, each of EDGA Exchange, Inc (‘‘EDGA’’), EDGX Exchange, Inc. (‘‘EDGX’’), International Securities Exchange, LLC (‘‘ISE’’ and, with EDGA and EDGX, the ‘‘Exchanges’’), filed with the Securities and Exchange Commission (‘‘Commission’’), pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (‘‘Act’’),2 and Rule 19b–4 thereunder,3 proposed rule changes regarding a corporate transaction (‘‘Transaction’’) in which SIX Swiss Exchange AG (‘‘SIX’’) will transfer its 50% indirect ownership interest of International Securities Holdings, Inc. (‘‘ISE Holdings’’) to a newly formed Swiss corporation, Eurex Global Derivatives AG (‘‘EGD’’), which will become a wholly-owned subsidiary of ¨ ¨ Deutsche Borse AG (‘‘Deutsche Borse’’), ¨ granting Deutsche Borse a 100% indirect ownership interest in ISE Holdings which, in turn, wholly owns ISE and holds a 31.54% indirect interest in each of EDGA and EDGX. The proposed rule changes were published for comment in the Federal Register on March 15, 2012.4 The Commission 7 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 15 U.S.C. 78a. 3 17 CFR 240.19b–4. 4 See Securities Exchange Act Release Nos. 66567 (March 9, 2012), 77 FR 15413 (March 15, 2012) (SR– EDGA–2012–08) (‘‘EDGA Notice’’); 66565 (March 9, 2012), 77 FR 15422 (March 15, 2012) (SR–EDGX– 2012–07) (‘‘EDGX Notice’’); 66566 (March 9, 2012), 77 FR 15417 (March 15, 2012) (SR–ISE–2012–21) (‘‘ISE Notice’’ and, with the EDGA Notice and EDGX Notice, the ‘‘Notices’’). pmangrum on DSK3VPTVN1PROD with NOTICES 1 15 VerDate Mar<15>2010 15:14 Apr 24, 2012 Jkt 226001 received no comment letters on the proposed rule changes. The Commission has reviewed carefully the proposed rule changes and finds that the proposed rule changes are consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange.5 In particular, the Commission finds that the proposed rule changes are consistent with Section 6(b) of the Act,6 which, among other things, requires a national securities exchange to be so organized and have the capacity to be able to carry out the purposes of the Act and to enforce compliance by its members and persons associated with its members with the provisions of the Act, the rules and regulations thereunder, and the rules of the exchange, and assure the fair representation of its members in the selection of its directors and administration of its affairs, and provide that one or more directors shall be representative of issuers and investors and not be associated with a member of the exchange, broker, or dealer. Section 6(b) of the Act 7 also requires that the rules of the exchange be designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. II. Discussion The Exchanges have submitted their proposed rule changes to (i) effect the Transaction in accordance with their respective corporate governance documents, (ii) amend and restate the Amended and Restated Trust Agreement (‘‘Trust’’), (iii) file the form of EGD Corporate Resolution (‘‘Resolution’’), (iv) file the form of Agreement and Consent by and between EGD and Eurex ¨ ¨ Zurich AG (‘‘Eurex Zurich’’) (‘‘Agreement and Consent’’) and (v) amend and restate the Amended and Restated Bylaws of ISE Holdings (‘‘Bylaws’’). A. Corporate Structure On December 17, 2007, ISE Holdings, the direct parent of ISE (and subsequent indirect parent of EDGA and EDGX), became a direct wholly-owned subsidiary of U.S. Exchange Holdings, Inc. (‘‘U.S. Exchange Holdings’’), which, in turn, is a wholly-owned subsidiary of Eurex Frankfurt AG (‘‘Eurex Frankfurt’’, 5 In approving the proposed rule changes, the Commission has considered their impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 6 15 U.S.C. 78f(b). 7 Id. PO 00000 Frm 00082 Fmt 4703 Sfmt 4703 ¨ and, with Deutsche Borse, the ‘‘German Upstream Owners’’).8 Eurex Frankfurt is a wholly-owned subsidiary of Eurex ¨ Zurich 9 which, in turn, is currently ¨ jointly owned by Deutsche Borse and SIX. SIX is owned by SIX Group AG (‘‘SIX Group’’). On December 23, 2008, ISE merged the ISE Stock Exchange, LLC, with and into Maple Merger Sub, LLC, a whollyowned subsidiary of Direct Edge Holdings LLC (‘‘Direct Edge’’).10 As part of the same transaction, ISE Holdings purchased a 31.54% equity interest in Direct Edge. On May 7, 2009, Direct Edge’s direct subsidiaries, EDGA and EDGX, each filed a Form 1 Application with the Commission, to own and operate registered national securities exchanges.11 On March 12, 2010, the Commission granted the Form 1 exchange registration applications of the EDGA and EDGX.12 ¨ On June 7, 2011, Deutsche Borse, SIX Group, and SIX signed a definitive agreement for the Transaction, which ¨ would give Deutsche Borse a 100% indirect ownership interest in the ¨ currently jointly-owned Eurex Zurich. ¨ Deutsche Borse currently has a 50% direct ownership interest in Eurex ¨ Zurich. After the Transaction closes, ¨ Deutsche Borse would also have a 100% direct ownership interest in EGD, which would have a 50% direct ownership ¨ interest in Eurex Zurich.13 Accordingly, SIX and SIX Group would no longer have an indirect ownership interest in the Exchanges. Section 19(b) of the Act and Rule 19b–4 thereunder require a selfregulatory organization (‘‘SRO’’) to file proposed rule changes with the Commission. Although the Upstream Owners are not SROs, the Resolution, the Trust and the Bylaws, along with other corporate documents, are rules of an exchange 14 if they are stated 8 See Securities and Exchange Act Release No. 56955 (December 13, 2007); 72 FR 71979 (December 19, 2007) (SR–ISE–2007–101). 9 Eurex Zurich and EGD, with the German ¨ Upstream Owners, are collectively referred to herein as the ‘‘non-U.S. Upstream Owners’’ and, with ISE Holdings, the ‘‘Upstream Owners’’. 10 See Securities and Exchange Act Release No. 59135 (December 22, 2008); 73 FR 79954 (December 30, 2008) (SR–ISE–2008–85). 11 See Securities and Exchange Act Release No. 60651 (September 11, 2009); 74 FR 47827 (September 17, 2009) (File Nos. 10–193 and 10– 194). 12 See Securities and Exchange Act Release No. 61698 (March 12, 2010); 75 FR 13151 (March 18, 2010) (approving File Nos. 10–194 and 10–196). 13 ISE Holdings would continue to be the sole member of ISE. 14 See Section 3(a)(27) of the Act, 15 U.S.C. 78c(a)(27). If EGD decides to change its Resolutions or governing documents, as applicable, EGD must E:\FR\FM\25APN1.SGM 25APN1

Agencies

[Federal Register Volume 77, Number 80 (Wednesday, April 25, 2012)]
[Notices]
[Pages 24750-24752]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9969]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66833; File No. SR-NYSEArca-2012-32]


Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Arca 
Equities Rule 7.31 To Specify How the Immediate-or-Cancel Time-in-Force 
Instructions Are Applicable to an MPL Order

April 19, 2012.
    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 April 10, 2012, NYSE Arca, Inc. (the ``Exchange'' or ``NYSE Arca'') 
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 Exchange. The Exchange has designated 
the proposed rule change as constituting a rule change under Rule 19b-
4(f)(6) under the Act,\3\ which renders the proposal effective upon 
filing with the Commission. 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\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    The Exchange proposes to amend NYSE Arca Equities Rule 7.31 to 
specify how the immediate-or-cancel (``IOC'') time-in-force 
instructions are applicable to an MPL Order. The text of the proposed 
rule change is available at the Exchange, www.nyse.com, and the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of those statements may be examined at 
the places specified in Item IV below. The Exchange has prepared 
summaries, set forth in sections A, B, and C below, of the most 
significant parts of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend NYSE Arca Equities Rule 7.31 to 
specify how the IOC time-in-force instructions are applicable to an MPL 
Order.
Background
    An MPL Order is a type of Working Order that has conditional or 
undisplayed price and/or size. As set forth in NYSE Arca Equities Rule 
7.31(h)(5), an MPL Order is a Passive Liquidity Order that is priced at 
the midpoint of the PBBO and does not trade through a Protected 
Quotation. An MPL Order has a minimum order entry size of one share and 
Users may specify a minimum executable size for an MPL Order, which 
must be no less than one share. If an MPL Order has a specified minimum 
executable size, it will execute against an incoming order that meets 
the minimum executable size and is priced at or better than the 
midpoint of the PBBO. If the leaves quantity becomes less than the 
minimum size, the minimum executable size restriction will no longer be 
enforced on executions.
    If the market is locked or crossed, the MPL Order will wait for the 
market to unlock or uncross before becoming eligible to trade again. 
MPL Orders are ranked in time priority for the purposes of execution as 
long as the midpoint is within the limit range of the order. MPL Orders 
always execute at the midpoint and do not receive price improvement. 
MPL Orders are valid for any session, but do not participate in 
auctions. Unlike Passive Liquidity Orders, MPL Orders are not exclusive 
to lead market makers (``LMM'') for securities for which the Exchange 
is the primary market. Users that choose not to trade with MPL Orders 
may mark incoming limit orders with a ``No Midpoint Execution'' 
designator and such limit orders will ignore MPL Orders. MPL Orders do 
not route out of the Exchange to other market centers.
    NYSE Arca Equities Rule 7.31 sets forth the time-in-force 
conditions that are available for orders entered at the Exchange. One 
such time-in-force condition is the IOC condition, which provides that 
a market or limit order that is marked IOC is to be executed in whole 
or in part as soon as such order is received, and the portion not so 
executed is to be treated as cancelled.
Proposed Rule Change
    The Exchange proposes to add NYSE Arca Equities Rule 7.31(h)(6) to 
specify how the IOC time-in-force conditions are applicable to an MPL 
Order (an ``MPL-IOC Order''). Because it is an MPL Order, the proposed 
MPL-IOC Order follows the same execution and priority rules of an MPL 
Order, including that it would be a Passive Liquidity Order that is 
priced at the midpoint of the PBBO, does not trade through Protected 
Quotations, always executes at the midpoint, does not receive price 
improvement, does not route to other market centers, is not limited to 
LMMs for securities listed on the Exchange, and will not trade with 
incoming limit orders with a ``No Midpoint Execution'' designator.

[[Page 24751]]

    Because of the IOC attributes, certain elements of the MPL Order, 
by their terms, are not applicable to the proposed MPL-IOC Order. 
First, because an IOC order cancels if it does not immediately execute, 
Users will not be able to specify a minimum executable size for the 
proposed MPL-IOC Order. Along those lines, because an IOC order cancels 
if not immediately executed, the related aspect of the MPL Order 
concerning the leaves quantity of an MPL Order are also inapplicable. 
Second, if a proposed MPL-IOC order cannot immediately execute because 
the market is either locked or crossed, unlike an MPL Order, an MPL-IOC 
Order would cancel in such a situation. The Exchange proposes to 
identify these differences in proposed NYSE Arca Equities Rule 
7.31(h)(6). In addition, because by definition, an IOC order executes 
upon arrival, a proposed MPL-IOC order would not execute against 
incoming interest, but against resting interest.
    The Exchange proposes one further distinction for the MPL-IOC 
Order. As noted above, the minimum share size for an MPL Order is one 
share. The Exchange proposes to require that an MPL-IOC Order have a 
minimum entry size of one round lot. The Exchange believes that this 
additional requirement will reduce the use of this order type by market 
participants that are seeking to discover hidden interest at the 
Exchange without any market risk.
    Because of the technology changes necessary to implement the 
proposed change, the Exchange will announce the implementation date of 
the MPL-IOC Order by Trader Update.
2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Securities Exchange Act of 1934 (the ``Act''),\4\ which requires 
the rules of an exchange to promote just and equitable principles of 
trade, to remove impediments to and perfect the mechanism of a free and 
open market and a national market system and, in general, to protect 
investors and the public interest. The Exchange believes that the 
proposed rule change promotes just and equitable principles of trade 
because it would enable market participants to use the existing IOC 
time-in-force conditions with MPL Orders. The proposed rule change will 
also provide transparency in the Exchange rules of how the IOC time-in-
force conditions will apply with MPL Orders and which aspects of the 
MPL Orders will be inapplicable. The Exchange further believes that the 
proposed rule change will perfect the mechanism of a free and open 
market because it adds additional flexibility in the use of the IOC 
time-in-force instructions with existing order types at the Exchange, 
thereby providing more flexibility to ETP Holders. Finally, the 
Exchange believes that the proposed requirement that an MPL-IOC order 
have a minimum entry size of one round lot will protect investors and 
the public interest because it will reduce the potential for market 
participants to use the MPL-IOC Order to probe the market for hidden 
interest without any significant risk.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
---------------------------------------------------------------------------

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 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, provided that the self-regulatory organization 
has given the Commission written notice of its intent to file 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 proposed rule change has become effective 
pursuant to Section 19(b)(3)(A) of the Act \5\ and Rule 19b-4(f)(6) 
thereunder.\6\ At any time within 60 days of the filing of such 
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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEArca-2012-32 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-NYSEArca-2012-32. This 
file number should be included on the subject line if email is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly.
    All submissions should refer to File Number SR-NYSEArca-2012-32 and 
should be submitted on or before May 16, 2012.


[[Page 24752]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2012-9969 Filed 4-24-12; 8:45 am]
BILLING CODE 8011-01-P
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