Self-Regulatory Organizations; NYSE Amex LLC; Order Approving a Proposed Rule Change Defining a Primary Specialist in Each Options Class and Modifying the Specialist Entitlement Accordingly, 42349-42350 [2012-17420]
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Federal Register / Vol. 77, No. 138 / Wednesday, July 18, 2012 / Notices
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 Section, 100 F Street NE.,
Washington, DC 20549–1090. Copies of
the filing will also be available for
inspection and copying at the
NYSEArca’s principal office and on its
Internet Web site at www.nyse.com. 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–2012–70 and
should be submitted on or before
August 8, 2012.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.8
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–17481 Filed 7–17–12; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67421; File No. SR–
NYSEAmex–2012–31]
Self-Regulatory Organizations; NYSE
Amex LLC; Order Approving a
Proposed Rule Change Defining a
Primary Specialist in Each Options
Class and Modifying the Specialist
Entitlement Accordingly
tkelley on DSK3SPTVN1PROD with NOTICES
July 12, 2012.
I. Introduction
On May 11, 2012, NYSE Amex LLC
(the ‘‘Exchange’’ or ‘‘NYSE Amex’’) 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 a proposed rule
change to define a Primary Specialist in
each options class and modify the
Specialist entitlement. The proposed
rule change was published for comment
in the Federal Register on May 31,
2012.3 The Commission received no
comment letters on the proposal. This
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 67057 (May
24, 2012), 77 FR 32157 (‘‘Notice’’).
1 15
VerDate Mar<15>2010
17:27 Jul 17, 2012
Jkt 226001
order approves the proposed rule
change.
II. Description of the Proposal
The Exchange proposes to amend
Rules 964NY and 964.2NY to define
Primary Specialists, and to modify the
order allocation entitlement amongst
Specialist Pool participants.
Rule 964NY sets forth the priority for
the allocation of incoming orders to
resting interest at a particular price in
the NYSE Amex System. Under the
current rule, the priority for the
allocation of incoming orders at the
same price is as follows: (1) resting
Customer orders; (2) Directed Order
Market Makers, provided they satisfy
the criteria to be eligible to receive a
Directed Order; (3) the Specialist Pool
(for non-Directed Orders); and (4) nonCustomer interest (on a size pro-rata
basis). As currently provided in Rule
964NY(b)(2)(C) and Rule 964.2NY, the
Specialist and e-Specialists in each class
compete in the Specialist Pool on a size
pro-rata basis, and do not compete for
the allocation of non-Directed Orders of
five contracts or fewer.4 Such orders are
allocated on a rotating basis (i.e., a
round robin) to a Specialist or eSpecialist in the Specialist Pool.
The Exchange now proposes to
designate a Primary Specialist from
amongst the Specialist Pool
participants. According to the Exchange,
the Primary Specialist will be
determined using objective evaluation
of the relative quote performance of
each Specialist and e-Specialist. The
evaluation will be conducted on a
quarterly basis and would include one
or more of the following factors: time
and size at the NBBO, average quote
width, average quote size, and the
relative share of electronic volume in a
given class of options.5 The Exchange
will issue a Regulatory Bulletin at least
five business days prior to each
evaluation period with the evaluation
criteria, including the relative weighting
of each factor.
Under the proposed rule change, the
Primary Specialist (instead of the
Specialist) would receive any additional
weighting in the size pro rata allocation
amongst Specialist Pool participants.
This additional weighting would be
determined by the Exchange, as is
currently the case. Additionally, under
the proposal, rather than a round robin
allocation of non-Directed Orders for
five contracts or fewer, all such orders
4 Under the rule, the Specialist’s pro-rata
allocation may receive additional weighting as
determined by the Exchange.
5 The first evaluation period may be longer or
shorter than a calendar quarter, depending on
Commission approval of the proposed rule change.
PO 00000
Frm 00095
Fmt 4703
Sfmt 4703
42349
would be allocated to the Primary
Specialist after any allocation to
Customers, not to exceed the size of the
Primary Specialist’s quote, provided the
Primary Specialist is quoting at the
NBBO. If the Primary Specialist’s quote
size is less than the order of five
contracts or fewer, any remaining
contracts after the Primary Specialist
receives its allocation will be allocated
in accordance with Rule 964NY(b)(2)(D)
(i.e., size pro rata). In addition, as is the
case under the current rule for the
Specialist Pool, if the Primary Specialist
is not quoting at the NBBO at the time
the order for five or fewer contracts
arrives, then the order will be executed
in accordance with the provision of
Rule 964NY(b)(2)(D).6
The Exchange stated that it will not
implement this proposal until it has
notified ATP Holders via Regulatory
Bulletin regarding the rule change. The
Exchange plans to issue notice
announcing the compliance date of the
rule change within 90 days from the
effective date of the rule change.7
III. Discussion
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder
applicable to a national securities
exchange.8 Specifically, the
Commission finds that the proposal is
consistent with Section 6(b)(5) of the
Act,9 in that it is designed to promote
just and equitable principles of trade, to
foster cooperation and coordination
with persons engaged in facilitating
transaction in securities, to remove
impediments and perfect the
mechanisms of a free and open market,
and, in general, to protect investors and
the public interest.
The Commission closely scrutinizes
exchange rule proposals to adopt or
amend participation guarantees where
such guarantees would rise to a level
that could have a material adverse
impact on quote competition within a
particular exchange.10 As noted by the
Exchange, the proposed rule change is
intended to enhance quote competition
6 The Exchange is also proposing to correct a
typographical error in Rule 964.2NY(b)(3)(A) by
changing the word ‘‘on’’ to ‘‘one.’’
7 See Notice, supra note 3, at 32158.
8 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
9 15 U.S.C. 78f(b)(5).
10 See Securities Exchange Act Release No. 44641
(August 2, 2001), 66 FR 41643 (August 8, 2001)
(SR–ISE–2001–17), at 41644–41645; see also
Securities Exchange Act Release No. 51818 (June
10, 2005), 70 FR 35146 (June 16, 2005) (SR–ISE–
2005–18), at 35149.
E:\FR\FM\18JYN1.SGM
18JYN1
42350
Federal Register / Vol. 77, No. 138 / Wednesday, July 18, 2012 / Notices
among the Specialist Pool participants
by creating a quarterly contest designed
to measure the quote performance of
Specialists and eSpecialists. The
Exchange states that the determination
of the winner of this quarterly contest
will be based on objective evaluation of
the relative quote performance of each
Specialist and eSpecialist and the
evaluation criteria will be announced in
advance of each evaluation period. The
Exchange notes that enhanced quote
competition should lead to narrower
spreads and more liquid markets,
thereby benefiting investors. Further,
notes the Exchange, narrower spreads
and more liquid markets should attract
more order flow to the exchange,
enhancing price discovery and generally
benefiting all participants on the
Exchange. For these reasons, the
Commission believes that the proposed
rule change is consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,11 that the
proposed rule change (SR–NYSEAmex–
2012–31) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Kevin M. O’Neill,
Deputy Secretary.
[FR Doc. 2012–17420 Filed 7–17–12; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–67422; File No. SR–BYX–
2012–013]
Self-Regulatory Organizations; BATS
Y-Exchange, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Related to Fees for Use
of BATS Y-Exchange, Inc.
tkelley on DSK3SPTVN1PROD with NOTICES
July 12, 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 February
8, 2012, BATS Y-Exchange, Inc. (‘‘BYX’’
or ‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the Exchange. The Commission is
publishing this notice to solicit
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
12 17
VerDate Mar<15>2010
17:27 Jul 17, 2012
Jkt 226001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend the
fee schedule applicable to Members 3
and non-members of the Exchange
pursuant to BYX Rules 15.1(a) and (c).
Changes to the fee schedule pursuant to
this proposal will be effective upon
filing.
The text of the proposed rule change
is available at the Exchange’s Web site
at https://www.batstrading.com, at the
principal office of the Exchange, and at
the Commission’s Public Reference
Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange 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 these
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
BILLING CODE 8011–01–P
11 15
comments on the proposed rule change
from interested persons.
1. Purpose
The Exchange proposes to modify its
fee schedule in order to: (i)
Accommodate an additional venue as
part of the Exchange’s ‘‘TRIM’’ routing
strategy; and (ii) commence charging for
logical ports used to enter orders into
Exchange systems and to receive data
from the Exchange. Each of these
proposed changes is described in further
detail below.
(i) TRIM Routing Strategy
The Exchange proposes to modify its
fee schedule in order to accommodate
an additional venue as part of the
Exchange’s ‘‘TRIM’’ routing strategy. As
defined in BYX Rule 11.13(a)(3)(G),
TRIM is a routing option under which
an order checks the System 4 for
available shares and then is sent to
3 A Member is any registered broker or dealer that
has been admitted to membership in the Exchange.
4 As defined in BYX Rule 1.5(aa), the System is
the electronic communications and trading facility
designated by the Board through which securities
orders of Users are consolidated for ranking,
execution and, when applicable, routing away.
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
destinations on the System routing
table. The TRIM routing strategy is
focused on seeking execution of orders
while minimizing execution costs by
routing to certain low cost execution
venues on the Exchange’s routing table.
Accordingly, the Exchange’s current
TRIM routing strategy will check the
Exchange’s order book and then route to
various venues on the Exchange’s
routing table, including NASDAQ OMX
BX, Inc. (‘‘NASDAQ BX’’), EDGA
EXCHANGE, Inc. (‘‘EDGA’’), the New
York Stock Exchange LLC (‘‘NYSE’’),
BATS Exchange, Inc. (‘‘BZX Exchange’’)
and certain alternative trading systems
available through the Exchange’s ‘‘DRT’’
strategy (‘‘DRT Venues’’).5 As of July 2,
2012, the Exchange plans to add an
additional execution venue, NASDAQ
OMX PSX (‘‘NASDAQ PSX’’), to the
TRIM routing strategy. The TRIM
routing strategy generally passes the
same execution fee assessed by the
applicable market center back to
Exchange Users.6 In order to add
NASDAQ PSX to the TRIM routing
strategy, the Exchange is proposing to
adopt pricing for executions through the
TRIM routing strategy of orders routed
to NASDAQ PSX.
Based on a recently filed proposal, as
of July 2, 2012, NASDAQ PSX does not
assess any charge to remove liquidity
from its order book for participants that
reach certain volume tiers.7 Because the
Exchange anticipates being able to reach
such tiers based on its routing practices,
the Exchange proposes neither to assess
any fee nor to provide any rebate for
TRIM orders that remove liquidity from
NASDAQ PSX.
(ii) Logical Port Fees
The Exchange also proposes to
commence charging fees to Members
and non-members for logical ports used
to enter orders into Exchange systems
and to receive data from the Exchange.
A logical port is also commonly referred
to as a TCP/IP port, and represents a
port established by the Exchange within
the Exchange’s system for trading and
billing purposes. Each logical port
5 As set forth in BYX Rule 11.13(a)(3)(E), DRT is
a routing option in which the entering firm
instructs the System to route to alternative trading
systems included in the System routing table.
Unless otherwise specified, DRT can be combined
with and function consistent with all other routing
options.
6 As defined in BYX Rule 1.5(cc), a User is any
Member or Sponsored Participant who is
authorized to obtain access to the System pursuant
to Rule 11.3. A Sponsored Participant is a firm that
is sponsored by a Member of the Exchange to access
the Exchange and that meets the criteria of
Exchange Rule 11.3.
7 See SR–Phlx–2012–87 (June 27, 2012). This
proposal was recently filed and will become
operative on July 2, 2012.
E:\FR\FM\18JYN1.SGM
18JYN1
]]>Agencies
[Federal Register Volume 77, Number 138 (Wednesday, July 18, 2012)]
[Notices]
[Pages 42349-42350]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-17420]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-67421; File No. SR-NYSEAmex-2012-31]
Self-Regulatory Organizations; NYSE Amex LLC; Order Approving a
Proposed Rule Change Defining a Primary Specialist in Each Options
Class and Modifying the Specialist Entitlement Accordingly
July 12, 2012.
I. Introduction
On May 11, 2012, NYSE Amex LLC (the ``Exchange'' or ``NYSE Amex'')
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\ a proposed rule change to
define a Primary Specialist in each options class and modify the
Specialist entitlement. The proposed rule change was published for
comment in the Federal Register on May 31, 2012.\3\ The Commission
received no comment letters on the proposal. This order approves the
proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Securities Exchange Act Release No. 67057 (May 24, 2012), 77
FR 32157 (``Notice'').
---------------------------------------------------------------------------
II. Description of the Proposal
The Exchange proposes to amend Rules 964NY and 964.2NY to define
Primary Specialists, and to modify the order allocation entitlement
amongst Specialist Pool participants.
Rule 964NY sets forth the priority for the allocation of incoming
orders to resting interest at a particular price in the NYSE Amex
System. Under the current rule, the priority for the allocation of
incoming orders at the same price is as follows: (1) resting Customer
orders; (2) Directed Order Market Makers, provided they satisfy the
criteria to be eligible to receive a Directed Order; (3) the Specialist
Pool (for non-Directed Orders); and (4) non-Customer interest (on a
size pro-rata basis). As currently provided in Rule 964NY(b)(2)(C) and
Rule 964.2NY, the Specialist and e-Specialists in each class compete in
the Specialist Pool on a size pro-rata basis, and do not compete for
the allocation of non-Directed Orders of five contracts or fewer.\4\
Such orders are allocated on a rotating basis (i.e., a round robin) to
a Specialist or e-Specialist in the Specialist Pool.
---------------------------------------------------------------------------
\4\ Under the rule, the Specialist's pro-rata allocation may
receive additional weighting as determined by the Exchange.
---------------------------------------------------------------------------
The Exchange now proposes to designate a Primary Specialist from
amongst the Specialist Pool participants. According to the Exchange,
the Primary Specialist will be determined using objective evaluation of
the relative quote performance of each Specialist and e-Specialist. The
evaluation will be conducted on a quarterly basis and would include one
or more of the following factors: time and size at the NBBO, average
quote width, average quote size, and the relative share of electronic
volume in a given class of options.\5\ The Exchange will issue a
Regulatory Bulletin at least five business days prior to each
evaluation period with the evaluation criteria, including the relative
weighting of each factor.
---------------------------------------------------------------------------
\5\ The first evaluation period may be longer or shorter than a
calendar quarter, depending on Commission approval of the proposed
rule change.
---------------------------------------------------------------------------
Under the proposed rule change, the Primary Specialist (instead of
the Specialist) would receive any additional weighting in the size pro
rata allocation amongst Specialist Pool participants. This additional
weighting would be determined by the Exchange, as is currently the
case. Additionally, under the proposal, rather than a round robin
allocation of non-Directed Orders for five contracts or fewer, all such
orders would be allocated to the Primary Specialist after any
allocation to Customers, not to exceed the size of the Primary
Specialist's quote, provided the Primary Specialist is quoting at the
NBBO. If the Primary Specialist's quote size is less than the order of
five contracts or fewer, any remaining contracts after the Primary
Specialist receives its allocation will be allocated in accordance with
Rule 964NY(b)(2)(D) (i.e., size pro rata). In addition, as is the case
under the current rule for the Specialist Pool, if the Primary
Specialist is not quoting at the NBBO at the time the order for five or
fewer contracts arrives, then the order will be executed in accordance
with the provision of Rule 964NY(b)(2)(D).\6\
---------------------------------------------------------------------------
\6\ The Exchange is also proposing to correct a typographical
error in Rule 964.2NY(b)(3)(A) by changing the word ``on'' to
``one.''
---------------------------------------------------------------------------
The Exchange stated that it will not implement this proposal until
it has notified ATP Holders via Regulatory Bulletin regarding the rule
change. The Exchange plans to issue notice announcing the compliance
date of the rule change within 90 days from the effective date of the
rule change.\7\
---------------------------------------------------------------------------
\7\ See Notice, supra note 3, at 32158.
---------------------------------------------------------------------------
III. Discussion
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\8\
Specifically, the Commission finds that the proposal is consistent with
Section 6(b)(5) of the Act,\9\ in that it is designed to promote just
and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transaction in
securities, to remove impediments and perfect the mechanisms of a free
and open market, and, in general, to protect investors and the public
interest.
---------------------------------------------------------------------------
\8\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission closely scrutinizes exchange rule proposals to adopt
or amend participation guarantees where such guarantees would rise to a
level that could have a material adverse impact on quote competition
within a particular exchange.\10\ As noted by the Exchange, the
proposed rule change is intended to enhance quote competition
[[Page 42350]]
among the Specialist Pool participants by creating a quarterly contest
designed to measure the quote performance of Specialists and
eSpecialists. The Exchange states that the determination of the winner
of this quarterly contest will be based on objective evaluation of the
relative quote performance of each Specialist and eSpecialist and the
evaluation criteria will be announced in advance of each evaluation
period. The Exchange notes that enhanced quote competition should lead
to narrower spreads and more liquid markets, thereby benefiting
investors. Further, notes the Exchange, narrower spreads and more
liquid markets should attract more order flow to the exchange,
enhancing price discovery and generally benefiting all participants on
the Exchange. For these reasons, the Commission believes that the
proposed rule change is consistent with the Act.
---------------------------------------------------------------------------
\10\ See Securities Exchange Act Release No. 44641 (August 2,
2001), 66 FR 41643 (August 8, 2001) (SR-ISE-2001-17), at 41644-
41645; see also Securities Exchange Act Release No. 51818 (June 10,
2005), 70 FR 35146 (June 16, 2005) (SR-ISE-2005-18), at 35149.
---------------------------------------------------------------------------
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-NYSEAmex-2012-31) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-17420 Filed 7-17-12; 8:45 am]
BILLING CODE 8011-01-P
