Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE MKT Rule 500-Equities To Extend the Operation of the Pilot Program That Allows Nasdaq Stock Market Securities To Be Traded on the Exchange Pursuant to a Grant of Unlisted Trading Privileges Until the Earlier of Securities and Exchange Commission Approval To Make Such Pilot Permanent or January 31, 2013, 45404-45406 [2012-18553]

Download as PDF 45404 Federal Register / Vol. 77, No. 147 / Tuesday, July 31, 2012 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67497; File No. SR– NYSEMKT–2012–25] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE MKT Rule 500—Equities To Extend the Operation of the Pilot Program That Allows Nasdaq Stock Market Securities To Be Traded on the Exchange Pursuant to a Grant of Unlisted Trading Privileges Until the Earlier of Securities and Exchange Commission Approval To Make Such Pilot Permanent or January 31, 2013 July 25, 2012. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on July 12, 2012, NYSE MKT LLC (‘‘NYSE MKT’’ or ‘‘Exchange’’) 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 self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. mstockstill on DSK4VPTVN1PROD with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE MKT Rule 500—Equities to extend the operation of the pilot program that allows Nasdaq Stock Market (‘‘Nasdaq’’) securities to be traded on the Exchange pursuant to a grant of unlisted trading privileges. The pilot is currently scheduled to expire on July 31, 2012; the Exchange proposes to extend it until the earlier of Securities and Exchange Commission (‘‘Commission’’) approval to make such pilot permanent or January 31, 2013. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.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 self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 VerDate Mar<15>2010 16:48 Jul 30, 2012 Jkt 226001 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 NYSE MKT Rules 500–525—Equities, as a pilot program, govern the trading of any Nasdaq-listed security on the Exchange pursuant to unlisted trading privileges (‘‘UTP Pilot Program’’).4 The Exchange hereby seeks to extend the operation of the UTP Pilot Program, currently scheduled to expire on July 31, 2012, until the earlier of Commission approval to make such pilot permanent or January 31, 2013. The UTP Pilot Program includes any security listed on Nasdaq that (i) is designated as an ‘‘eligible security’’ under the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for NasdaqListed Securities Traded on Exchanges on an Unlisted Trading Privilege Basis, as amended (‘‘UTP Plan’’),5 and (ii) has been admitted to dealings on the Exchange pursuant to a grant of unlisted trading privileges in accordance with Section 12(f) of the Securities Exchange Act of 1934, as amended (the ‘‘Act’’),6 (collectively, ‘‘Nasdaq Securities’’).7 4 See Securities Exchange Act Release No. 62479 (July 9, 2010), 75 FR 41264 (July 15, 2010) (SR– NYSEAmex–2010–31). See also Securities Exchange Act Release Nos. 62857 (September 7, 2010), 75 FR 55837 (September 14, 2010) (SR– NYSEAmex–2010–89); 63601 (December 22, 2010), 75 FR 82117 (December 29, 2010) (SR–NYSEAmex– 2010–124); 64746 (June 24, 2011), 76 FR 38446 (June 30, 2011) (SR–NYSEAmex–2011–45); and 66040 (December 23, 2011), 76 FR 82324 (December 30, 2011) (SR–NYSEAmex–2011–104). 5 See Securities Exchange Act Release No. 58863 (October 27, 2008), 73 FR 65417 (November 3, 2008) (File No. S7–24–89). The Exchange’s predecessor, the American Stock Exchange LLC, joined the UTP Plan in 2001. See Securities Exchange Act Release No. 55647 (April 19, 2007), 72 FR 20891 (April 26, 2007) (File No. S7–24–89). In March 2009, the Exchange changed its name to NYSE Amex LLC, and, in May 2012, the Exchange subsequently changed its name to NYSE MKT LLC. See Securities Exchange Act Release Nos. 59575 (March 13, 2009), 74 FR 11803 (March 19, 2009) (SR–NYSEALTR– 2009–24) and 67037 (May 21, 2012), 77 FR 31415 (May 25, 2012) (SR–NYSEAmex–2012–32). 6 15 U.S.C. 78l. 7 ‘‘Nasdaq Securities’’ is included within the definition of ‘‘security’’ as that term is used in the NYSE MKT Equities Rules. See NYSE MKT Rule 3—Equities. In accordance with this definition, Nasdaq Securities are admitted to dealings on the PO 00000 Frm 00077 Fmt 4703 Sfmt 4703 The Exchange notes that its New Market Model Pilot (‘‘NMM Pilot’’), which, among other things, eliminated the function of specialists on the Exchange and created a new category of market participant, the Designated Market Maker (‘‘DMM’’),8 is also scheduled to end on July 31, 2012.9 The timing of the operation of the UTP Pilot Program was designed to correspond to that of the NMM Pilot. In approving the UTP Pilot Program, the Commission acknowledged that the rules relating to DMM benefits and duties in trading Nasdaq Securities on the Exchange pursuant to the UTP Pilot Program are consistent with the Act 10 and noted the similarity to the NMM Pilot, particularly with respect to DMM obligations and benefits.11 Furthermore, the UTP Pilot Program rules pertaining to the assignment of securities to DMMs are substantially similar to the rules implemented through the NMM Pilot.12 The Exchange has similarly filed to extend the operation of the NMM Pilot until the earlier of Commission approval to make the NMM Pilot permanent or January 31, 2013.13 Extension of the UTP Pilot Program in tandem with the NMM Pilot, both from July 31, 2012 until the earlier of Commission approval to make such pilots permanent or January 31, 2013, will provide for the uninterrupted trading of Nasdaq Securities on the Exchange on a UTP basis and thus continue to encourage the additional utilization of, and interaction with, the Exchange, and provide market participants with improved price discovery, increased liquidity, more competitive quotes and greater price improvement for Nasdaq Securities. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Exchange on an ‘‘issued,’’ ‘‘when issued,’’ or ‘‘when distributed’’ basis. See NYSE MKT Rule 501— Equities. 8 See NYSE MKT Rule 103—Equities. 9 See Securities Exchange Act Release No. 60758 (October 1, 2009), 74 FR 51639 (October 7, 2009) (SR–NYSEAmex–2009–65). See also Securities Exchange Act Release Nos. 61030 (November 19, 2009), 74 FR 62365 (November 27, 2009) (SR– NYSEAmex–2009–83); 61725 (March 17, 2010), 75 FR 14223 (March 24, 2010) (SR–NYSEAmex–2010– 28); 62820 (September 1, 2010), 75 FR 54935 (September 9, 2010) (SR–NYSEAmex–2010–86); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) (SR–NYSEAmex–2010–123); 64773 (June 29, 2011), 76 FR 39453 (July 6, 2011) (SR–NYSEAmex– 2011–43); and 66042 (December 23, 2011), 76 FR 82326 (December 30, 2011) (SR–NYSEAmex–2011– 102). 10 15 U.S.C. 78a. 11 See SR–NYSEAmex–2010–31, supra note [4] [sic], at 41271. 12 Id. 13 See SR–NYSEMKT–2012–21. E:\FR\FM\31JYN1.SGM 31JYN1 Federal Register / Vol. 77, No. 147 / Tuesday, July 31, 2012 / Notices the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. In particular, the Exchange believes that its proposal to extend the UTP Pilot Program is consistent with (i) Section 6(b) of the Act,14 in general, and furthers the objectives of Section 6(b)(5) of the Act,15 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, 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) Section 11A(a)(1) of the Act,16 in that it seeks to ensure the economically efficient execution of securities transactions and fair competition among brokers and dealers and among exchange markets; and (iii) Section 12(f) of the Act,17 which governs the trading of securities pursuant to UTP consistent with the maintenance of fair and orderly markets, the protection of investors and the public interest, and the impact of extending the existing markets for such securities. Specifically, the Exchange believes that extending the UTP Pilot Program would provide for the uninterrupted trading of Nasdaq Securities on the Exchange on a UTP basis and thus continue to encourage the additional utilization of, and interaction with, the Exchange, thereby providing market participants with additional price discovery, increased liquidity, more competitive quotes and potentially greater price improvement for Nasdaq Securities. Additionally, under the UTP Pilot Program, Nasdaq Securities trade on the Exchange pursuant to rules governing the trading of ExchangeListed securities that previously have been approved by the Commission. Accordingly, this proposed rule change would permit the Exchange to extend the effectiveness of the UTP Pilot Program in tandem with the NMM Pilot, which the Exchange has similarly proposed to extend until the earlier of Commission approval to make such pilot permanent or January 31, 2013.18 mstockstill on DSK4VPTVN1PROD with NOTICES 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 14 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). 16 15 U.S.C. 78k–1(a)(1). 17 15 U.S.C. 78l(f). 18 See supra note 13. 15 15 VerDate Mar<15>2010 16:48 Jul 30, 2012 Jkt 226001 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 The Exchange has filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 19 and Rule 19b–4(f)(6) thereunder.20 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 prior to 30 days from the date on which it was filed, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b–4(f)(6)(iii) thereunder.21 A proposed rule change filed under Rule 19b–4(f)(6) 22 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),23 the Commission may designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would allow the pilot program to continue uninterrupted. Accordingly, the Commission hereby grants the Exchange’s request and designates the proposal operative upon filing.24 At any time within 60 days of the filing of such proposed rule change, the Commission summarily may temporarily suspend such rule change if U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). 21 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. 22 17 CFR 240.19b–4(f)(6). 23 17 CFR 240.19b–4(f)(6)(iii). 24 For purposes only of waiving the 30-day operative delay, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). PO 00000 19 15 20 17 Frm 00078 Fmt 4703 Sfmt 4703 45405 it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NYSEMKT–2012–25 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–NYSEMKT–2012–25. 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 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR– NYSEMKT–2012–25 and should be submitted on or before August 21, 2012. E:\FR\FM\31JYN1.SGM 31JYN1 45406 Federal Register / Vol. 77, No. 147 / Tuesday, July 31, 2012 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.25 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2012–18553 Filed 7–30–12; 8:45 am] BILLING CODE 8011–01–P A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–67495; File No. SR– NYSEMKT–2012–21] 1. Purpose Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Extending the Operation of Its New Market Model Pilot Until the Earlier of Securities and Exchange Commission Approval To Make Such Pilot Permanent or January 31, 2013 July 25, 2012. Pursuant to Section 19(b)(1) 1 of the Securities Exchange Act of 1934 (the ‘‘Act’’) 2 and Rule 19b–4 thereunder,3 notice is hereby given that on July 12, 2012, NYSE MKT LLC (‘‘NYSE MKT’’ or ‘‘Exchange’’) 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 self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the operation of its New Market Model Pilot, currently scheduled to expire on July 31, 2012, until the earlier of Securities and Exchange Commission (‘‘Commission’’) approval to make such pilot permanent or January 31, 2013. The text of the proposed rule change is available on the Exchange’s Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. mstockstill on DSK4VPTVN1PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received 25 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. 1 15 VerDate Mar<15>2010 16:48 Jul 30, 2012 Jkt 226001 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. The Exchange proposes to extend the operation of its New Market Model Pilot (‘‘NMM Pilot’’) that was adopted pursuant to its merger with the New York Stock Exchange LLC (‘‘NYSE’’).4 The NMM Pilot was approved to operate until October 1, 2009. The Exchange filed to extend the operation of the Pilot to November 30, 2009, March 30, 2010, September 30, 2010, January 31, 2011, August 1, 2011, January 31, 2012, and July 31, 2012, respectively.5 The Exchange now seeks to extend the operation of the NMM Pilot, currently scheduled to expire on July 31, 2012, until the earlier of Commission approval to make such pilot permanent or January 31, 2013. The Exchange notes that parallel changes are proposed to be made to the rules of NYSE.6 4 NYSE Euronext acquired The Amex Membership Corporation (‘‘AMC’’) pursuant to an Agreement and Plan of Merger, dated January 17, 2008 (the ‘‘Merger’’). In connection with the Merger, the Exchange’s predecessor, the American Stock Exchange LLC (‘‘Amex’’), a subsidiary of AMC, became a subsidiary of NYSE Euronext called NYSE Alternext US LLC. See Securities Exchange Act Release No. 58673 (September 29, 2008), 73 FR 57707 (October 3, 2008) (SR–NYSE–2008–60 and SR–Amex–2008–62) (approving the Merger). Subsequently, NYSE Alternext US LLC was renamed NYSE Amex LLC, which was then renamed NYSE MKT LLC and continues to operate as a national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as amended (the ‘‘Act’’). See Securities Exchange Act Release Nos. 59575 (March 13, 2009), 74 FR 11803 (March 19, 2009) (SR–NYSEALTR–2009–24) and 67037 (May 21, 2012), 77 FR 31415 (May 25, 2012) (SR–NYSEAmex–2012–32). 5 See Securities Exchange Act Release No. 60758 (October 1, 2009), 74 FR 51639 (October 7, 2009) (SR–NYSEAmex–2009–65). See also Securities Exchange Act Release Nos. 61030 (November 19, 2009), 74 FR 62365 (November 27, 2009) (SR– NYSEAmex–2009–83); 61725 (March 17, 2010), 75 FR 14223 (March 24, 2010) (SR–NYSEAmex–2010– 28); 62820 (September 1, 2010), 75 FR 54935 (September 9, 2010) (SR–NYSEAmex–2010–86); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) (SR–NYSEAmex–2010–123); 64773 (June 29, 2011), 76 FR 39453 (July 6, 2011) (SR–NYSEAmex– 2011–43); and 66042 (December 23, 2011), 76 FR 82326 (December 30, 2011) (SR–NYSEAmex–2011– 102). 6 See SR–NYSE–2012–26. PO 00000 Frm 00079 Fmt 4703 Sfmt 4703 Background 7 In December 2008, the Exchange implemented significant changes to its equities market rules, execution technology and the rights and obligations of its equities market participants all of which were designed to improve execution quality on the Exchange. These changes are all elements of the Exchange’s enhanced market model that it implemented through the NMM Pilot. As part of the NMM Pilot, the Exchange eliminated the function of equity specialists on the Exchange creating a new category of market participant, the Designated Market Maker or DMM.8 The DMMs, like specialists, have affirmative obligations to make an orderly market, including continuous quoting requirements and obligations to re-enter the market when reaching across to execute against trading interest. Unlike specialists, DMMs have a minimum quoting requirement 9 in their assigned securities and no longer have a negative obligation. DMMs are also no longer agents for public customer orders.10 In addition, the Exchange implemented a system change that allowed DMMs to create a schedule of additional non-displayed liquidity at various price points where the DMM is willing-to interact with interest and provide price improvement to orders in the Exchange’s system. This schedule is known as the DMM Capital Commitment Schedule (‘‘CCS’’).11 CCS provides the Display Book® 12 with the amount of shares that the DMM is willing to trade at price points outside, at and inside the Exchange Best Bid or Best Offer (‘‘BBO’’). CCS interest is separate and distinct from other DMM interest in that it serves as the interest of last resort. The NMM Pilot further modified the logic for allocating executed shares 7 The information contained herein is a summary of the NMM Pilot. See Securities Exchange Act Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008) (SR–NYSE–2008–46) for a fuller description. 8 See NYSE MKT Rule 103—Equities. 9 See NYSE MKT Rule 104—Equities. 10 See NYSE MKT Rule 60—Equities; see also NYSE MKT Rules 104—Equities and 1000— Equities. 11 See NYSE MKT Rule 1000—Equities. 12 The Display Book system is an order management and execution facility. The Display Book system receives and displays orders to the DMMs, contains the order information, and provides a mechanism to execute and report transactions and publish the results to the Consolidated Tape. The Display Book system is connected to a number of other Exchange systems for the purposes of comparison, surveillance, and reporting information to customers and other market data and national market systems. E:\FR\FM\31JYN1.SGM 31JYN1

Agencies

[Federal Register Volume 77, Number 147 (Tuesday, July 31, 2012)]
[Notices]
[Pages 45404-45406]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-18553]



[[Page 45404]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-67497; File No. SR-NYSEMKT-2012-25]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Amending NYSE MKT Rule 
500--Equities To Extend the Operation of the Pilot Program That Allows 
Nasdaq Stock Market Securities To Be Traded on the Exchange Pursuant to 
a Grant of Unlisted Trading Privileges Until the Earlier of Securities 
and Exchange Commission Approval To Make Such Pilot Permanent or 
January 31, 2013

July 25, 2012.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on July 12, 2012, NYSE MKT LLC (``NYSE MKT'' or 
``Exchange'') 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 self-regulatory 
organization. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend NYSE MKT Rule 500--Equities to 
extend the operation of the pilot program that allows Nasdaq Stock 
Market (``Nasdaq'') securities to be traded on the Exchange pursuant to 
a grant of unlisted trading privileges. The pilot is currently 
scheduled to expire on July 31, 2012; the Exchange proposes to extend 
it until the earlier of Securities and Exchange Commission 
(``Commission'') approval to make such pilot permanent or January 31, 
2013. The text of the proposed rule change is available on the 
Exchange's Web site at www.nyse.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 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
    NYSE MKT Rules 500-525--Equities, as a pilot program, govern the 
trading of any Nasdaq-listed security on the Exchange pursuant to 
unlisted trading privileges (``UTP Pilot Program'').\4\ The Exchange 
hereby seeks to extend the operation of the UTP Pilot Program, 
currently scheduled to expire on July 31, 2012, until the earlier of 
Commission approval to make such pilot permanent or January 31, 2013.
---------------------------------------------------------------------------

    \4\ See Securities Exchange Act Release No. 62479 (July 9, 
2010), 75 FR 41264 (July 15, 2010) (SR-NYSEAmex-2010-31). See also 
Securities Exchange Act Release Nos. 62857 (September 7, 2010), 75 
FR 55837 (September 14, 2010) (SR-NYSEAmex-2010-89); 63601 (December 
22, 2010), 75 FR 82117 (December 29, 2010) (SR-NYSEAmex-2010-124); 
64746 (June 24, 2011), 76 FR 38446 (June 30, 2011) (SR-NYSEAmex-
2011-45); and 66040 (December 23, 2011), 76 FR 82324 (December 30, 
2011) (SR-NYSEAmex-2011-104).
---------------------------------------------------------------------------

    The UTP Pilot Program includes any security listed on Nasdaq that 
(i) is designated as an ``eligible security'' under the Joint Self-
Regulatory Organization Plan Governing the Collection, Consolidation 
and Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading Privilege 
Basis, as amended (``UTP Plan''),\5\ and (ii) has been admitted to 
dealings on the Exchange pursuant to a grant of unlisted trading 
privileges in accordance with Section 12(f) of the Securities Exchange 
Act of 1934, as amended (the ``Act''),\6\ (collectively, ``Nasdaq 
Securities'').\7\
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 58863 (October 27, 
2008), 73 FR 65417 (November 3, 2008) (File No. S7-24-89). The 
Exchange's predecessor, the American Stock Exchange LLC, joined the 
UTP Plan in 2001. See Securities Exchange Act Release No. 55647 
(April 19, 2007), 72 FR 20891 (April 26, 2007) (File No. S7-24-89). 
In March 2009, the Exchange changed its name to NYSE Amex LLC, and, 
in May 2012, the Exchange subsequently changed its name to NYSE MKT 
LLC. See Securities Exchange Act Release Nos. 59575 (March 13, 
2009), 74 FR 11803 (March 19, 2009) (SR-NYSEALTR-2009-24) and 67037 
(May 21, 2012), 77 FR 31415 (May 25, 2012) (SR-NYSEAmex-2012-32).
    \6\ 15 U.S.C. 78l.
    \7\ ``Nasdaq Securities'' is included within the definition of 
``security'' as that term is used in the NYSE MKT Equities Rules. 
See NYSE MKT Rule 3--Equities. In accordance with this definition, 
Nasdaq Securities are admitted to dealings on the Exchange on an 
``issued,'' ``when issued,'' or ``when distributed'' basis. See NYSE 
MKT Rule 501--Equities.
---------------------------------------------------------------------------

    The Exchange notes that its New Market Model Pilot (``NMM Pilot''), 
which, among other things, eliminated the function of specialists on 
the Exchange and created a new category of market participant, the 
Designated Market Maker (``DMM''),\8\ is also scheduled to end on July 
31, 2012.\9\ The timing of the operation of the UTP Pilot Program was 
designed to correspond to that of the NMM Pilot. In approving the UTP 
Pilot Program, the Commission acknowledged that the rules relating to 
DMM benefits and duties in trading Nasdaq Securities on the Exchange 
pursuant to the UTP Pilot Program are consistent with the Act \10\ and 
noted the similarity to the NMM Pilot, particularly with respect to DMM 
obligations and benefits.\11\ Furthermore, the UTP Pilot Program rules 
pertaining to the assignment of securities to DMMs are substantially 
similar to the rules implemented through the NMM Pilot.\12\ The 
Exchange has similarly filed to extend the operation of the NMM Pilot 
until the earlier of Commission approval to make the NMM Pilot 
permanent or January 31, 2013.\13\
---------------------------------------------------------------------------

    \8\ See NYSE MKT Rule 103--Equities.
    \9\ See Securities Exchange Act Release No. 60758 (October 1, 
2009), 74 FR 51639 (October 7, 2009) (SR-NYSEAmex-2009-65). See also 
Securities Exchange Act Release Nos. 61030 (November 19, 2009), 74 
FR 62365 (November 27, 2009) (SR-NYSEAmex-2009-83); 61725 (March 17, 
2010), 75 FR 14223 (March 24, 2010) (SR-NYSEAmex-2010-28); 62820 
(September 1, 2010), 75 FR 54935 (September 9, 2010) (SR-NYSEAmex-
2010-86); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) 
(SR-NYSEAmex-2010-123); 64773 (June 29, 2011), 76 FR 39453 (July 6, 
2011) (SR-NYSEAmex-2011-43); and 66042 (December 23, 2011), 76 FR 
82326 (December 30, 2011) (SR-NYSEAmex-2011-102).
    \10\ 15 U.S.C. 78a.
    \11\ See SR-NYSEAmex-2010-31, supra note [4] [sic], at 41271.
    \12\ Id.
    \13\ See SR-NYSEMKT-2012-21.
---------------------------------------------------------------------------

    Extension of the UTP Pilot Program in tandem with the NMM Pilot, 
both from July 31, 2012 until the earlier of Commission approval to 
make such pilots permanent or January 31, 2013, will provide for the 
uninterrupted trading of Nasdaq Securities on the Exchange on a UTP 
basis and thus continue to encourage the additional utilization of, and 
interaction with, the Exchange, and provide market participants with 
improved price discovery, increased liquidity, more competitive quotes 
and greater price improvement for Nasdaq Securities.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with

[[Page 45405]]

the requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange. In particular, the 
Exchange believes that its proposal to extend the UTP Pilot Program is 
consistent with (i) Section 6(b) of the Act,\14\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\15\ in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, 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) Section 
11A(a)(1) of the Act,\16\ in that it seeks to ensure the economically 
efficient execution of securities transactions and fair competition 
among brokers and dealers and among exchange markets; and (iii) Section 
12(f) of the Act,\17\ which governs the trading of securities pursuant 
to UTP consistent with the maintenance of fair and orderly markets, the 
protection of investors and the public interest, and the impact of 
extending the existing markets for such securities.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ 15 U.S.C. 78k-1(a)(1).
    \17\ 15 U.S.C. 78l(f).
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    Specifically, the Exchange believes that extending the UTP Pilot 
Program would provide for the uninterrupted trading of Nasdaq 
Securities on the Exchange on a UTP basis and thus continue to 
encourage the additional utilization of, and interaction with, the 
Exchange, thereby providing market participants with additional price 
discovery, increased liquidity, more competitive quotes and potentially 
greater price improvement for Nasdaq Securities. Additionally, under 
the UTP Pilot Program, Nasdaq Securities trade on the Exchange pursuant 
to rules governing the trading of Exchange-Listed securities that 
previously have been approved by the Commission. Accordingly, this 
proposed rule change would permit the Exchange to extend the 
effectiveness of the UTP Pilot Program in tandem with the NMM Pilot, 
which the Exchange has similarly proposed to extend until the earlier 
of Commission approval to make such pilot permanent or January 31, 
2013.\18\
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    \18\ See supra note 13.
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B. Self-Regulatory Organization's Statement on Burden on Competition

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

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

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

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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \19\ and Rule 19b-4(f)(6) thereunder.\20\ 
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 prior to 
30 days from the date on which it was filed, the proposed rule change 
has become effective pursuant to Section 19(b)(3)(A) of the Act and 
Rule 19b-4(f)(6)(iii) thereunder.\21\
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    \19\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 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.
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    A proposed rule change filed under Rule 19b-4(f)(6) \22\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\23\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay so that the proposal 
may become operative immediately upon filing. The Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because such waiver 
would allow the pilot program to continue uninterrupted. Accordingly, 
the Commission hereby grants the Exchange's request and designates the 
proposal operative upon filing.\24\
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    \22\ 17 CFR 240.19b-4(f)(6).
    \23\ 17 CFR 240.19b-4(f)(6)(iii).
    \24\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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.

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-NYSEMKT-2012-25 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-NYSEMKT-2012-25. 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 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make publicly available. All 
submissions should refer to File Number SR-NYSEMKT-2012-25 and should 
be submitted on or before August 21, 2012.


[[Page 45406]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\25\
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    \25\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-18553 Filed 7-30-12; 8:45 am]
BILLING CODE 8011-01-P
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