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, 2014, 38766-38768 [2013-15342]

Download as PDF 38766 Federal Register / Vol. 78, No. 124 / Thursday, June 27, 2013 / Notices A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69812; File No. SR– NYSEMKT–2013–51] 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, 2014 June 20, 2013. 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 June 14, 2013, 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 Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the operation of its New Market Model Pilot, currently scheduled to expire on July 31, 2013, until the earlier of Securities and Exchange Commission (‘‘Commission’’) approval to make such pilot permanent or January 31, 2014. 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 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. 1 15 U.S.C. 78s(b)(1). U.S.C. 78a. 3 17 CFR 240.19b–4. 2 15 VerDate Mar<15>2010 18:12 Jun 26, 2013 Jkt 229001 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, July 31, 2012, January 31, 2013, and July 31, 2013, respectively.5 The Exchange now seeks to extend the operation of the NMM Pilot, currently scheduled to expire on July 31, 2013, until the earlier of Commission approval to make such pilot permanent or January 31, 2014. 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) (extending Pilot to March 30, 2010); 61725 (March 17, 2010), 75 FR 14223 (March 24, 2010) (SR–NYSEAmex–2010–28) (extending Pilot to September 1, 2010); 62820 (September 1, 2010), 75 FR 54935 (September 9, 2010) (SR– NYSEAmex–2010–86) (extending Pilot to January 31, 2011); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) (SR–NYSEAmex–2010–123) (extending Pilot to August 1, 2011); 64773 (June 29, 2011), 76 FR 39453 (July 6, 2011) (SR–NYSEAmex– 2011–43) (extending Pilot to January 31, 2012); 66042 (December 23, 2011), 76 FR 82326 (December 30, 2011) (SR–NYSEAmex–2011–102) (extending Pilot to July 31, 2012); 67495 (July 25, 2012), 77 FR 45406 (July 31, 2012) (SR–NYSEMKT–2012–21) (extending the Pilot to January 31, 2013); and 68559 (January 2, 2013), 78 FR 1286 (January 8, 2013) (SR– NYSEMKT–2012–84) (extending Pilot to July 31, 2013). 6 See SR–NYSE–2013–43. PO 00000 Frm 00085 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\27JNN1.SGM 27JNN1 Federal Register / Vol. 78, No. 124 / Thursday, June 27, 2013 / Notices among market participants having trading interest at a price point upon execution of incoming orders. The modified logic rewards displayed orders that establish the Exchange’s BBO. During the operation of the NMM Pilot, orders or portions thereof that establish priority 13 retain that priority until the portion of the order that established priority is exhausted. Where no one order has established priority, shares are distributed among all market participants on parity. The NMM Pilot was originally scheduled to end operation on October 1, 2009, or such earlier time as the Commission may determine to make the rules permanent. The Exchange filed to extend the operation of the Pilot on several occasions 14 in order to prepare a rule filing seeking permission to make the above described changes permanent. The Exchange is currently still preparing such formal submission but does not expect that filing to be completed and approved by the Commission before July 31, 2013. mstockstill on DSK4VPTVN1PROD with NOTICES Proposal To Extend the Operation of the NMM Pilot The Exchange established the NMM Pilot to provide incentives for quoting, to enhance competition among the existing group of liquidity providers and to add a new competitive market participant. The Exchange believes that the NMM Pilot allows the Exchange to provide its market participants with a trading venue that utilizes an enhanced market structure to encourage the addition of liquidity, facilitate the trading of larger orders more efficiently and operates to reward aggressive liquidity providers. As such, the Exchange believes that the rules governing the NMM Pilot should be made permanent. Through this filing the Exchange seeks to extend the current operation of the NMM Pilot until January 31, 2014, in order to allow the Exchange time to formally submit a filing to the Commission to convert the pilot rules to permanent rules. 2. Statutory Basis The basis under the Securities Exchange Act of 1934 (the ‘‘Act’’) for this proposed rule change is the requirement under Section 6(b)(5) that an exchange have rules that are 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 13 See 14 See NYSE MKT Rule 72(a)(ii)—Equities. supra note 5. VerDate Mar<15>2010 18:12 Jun 26, 2013 Jkt 229001 public interest. The Exchange believes that this filing is consistent with these principles because the NMM Pilot provides its market participants with a trading venue that utilizes an enhanced market structure to encourage the addition of liquidity, facilitate the trading of larger orders more efficiently and operates to reward aggressive liquidity providers. Moreover, requesting an extension of the NMM Pilot will permit adequate time for: (i) The Exchange to prepare and submit a filing to make the rules governing the NMM Pilot permanent; (ii) public notice and comment; and (iii) completion of the 19b–4 approval process. 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. The Exchange believes that extending the operation of the NMM Pilot will enhance competition among liquidity providers and thereby improve execution quality on the Exchange. 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 15 and Rule 19b–4(f)(6) thereunder.16 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, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to Section 19(b)(3)(A) 15 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) 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. 16 17 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 38767 of the Act and Rule 19b–4(f)(6)(iii) thereunder. 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 rulecomments@sec.gov. Please include File Number SR–NYSEMKT–2013–51 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–2013–51. 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 E:\FR\FM\27JNN1.SGM 27JNN1 38768 Federal Register / Vol. 78, No. 124 / Thursday, June 27, 2013 / Notices For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.17 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2013–15342 Filed 6–26–13; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–69826; File No. SR– NYSEArca–2013–66] Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Making Non-Substantive, Technical Amendments to Exchange Rule 6.62(o) Correcting Cross Reference to Exchange Rule 6.76B, and to Exchange Rule 6.76A To Correct Cross References to Exchange Rules 6.76A and 6.76B June 21, 2013. 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 June 20, 2013, 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 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 make nonsubstantive, technical amendments to Exchange Rule 6.62(o) to correct a cross reference to Exchange Rule 6.76B, and to Exchange Rule 6.76A to correct cross references to Exchange Rules 6.76A and 6.76B. 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, on the Commission’s Web site at https:// www.sec.gov, and at the Commission’s Public Reference Room. 17 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. 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. open market and, in general, to protect investors and the public interest. The Exchange believes it is appropriate to make technical corrections to its rules so that Exchange members and investors have a clear and accurate understanding of the meaning of the Exchange’s rules. The correction of the cross references in Rules 6.62(o) and 6.76A will serve to eliminate a potential source of confusion for Exchange Participants. A. Self-Regulatory Organization’s Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR– NYSEMKT–2013–51 and should be submitted on or before July 18, 2013. 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. 1. Purpose The Exchange is proposing to make a non-substantive, technical correction to Exchange Rule 6.62(o), in order to update a cross reference to Exchange Rule 6.76B. Current Rule 6.62(o) incorrectly cross references Rule 6.76B with respect to the routing instructions for NOW Orders. The Exchange proposes to correct the citation to cross reference Rule 6.76A. The Exchange is also proposing to make two non-substantive, technical corrections to Exchange Rule 6.76A(c)(1)(A), and to make the same two non-substantive, technical corrections to Exchange Rule 6.76A(c)(2)(C), in order to update cross references in each to Exchange Rules 6.76A and 6.76B. Current Rule 6.76A(c)(1)(A) and Rule 6.76A(c)(2)(C) each incorrectly cross references Rule 6.76A with respect to the order ranking and display provisions governing routing away. The Exchange proposes to correct the citation in each rule to cross reference Rule 6.76. Rule 6.76A(c)(1)(A) and Rule 6.76A(c)(2)(C) also each incorrectly cross references Rule 6.76B with respect to the order execution provisions governing routing away. The Exchange proposes to correct the citation in each rule to cross reference Rule 6.76A. 2. Statutory Basis The Exchange believes that the proposal is consistent with Section 6(b) of the Act,4 in general, and furthers the objectives of Section 6(b)(5),5 in particular, in that it is designed to promote just and equitable principles of trade, to remove impediments to, and perfect the mechanism of a free and 1 15 VerDate Mar<15>2010 18:12 Jun 26, 2013 4 15 5 15 Jkt 229001 PO 00000 U.S.C. 78f(b). U.S.C. 78f(b)(5). Frm 00087 Fmt 4703 Sfmt 4703 B. Self-Regulatory Organization’s Statement on Burden on Competition The proposed rule change is nonsubstantive and therefore does not implicate the competition analysis. 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 6 and Rule 19b–4(f)(6) thereunder.7 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, or such shorter time as the Commission may designate, if consistent with the protection of investors and the public interest, 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. A proposed rule change filed under Rule 19b–4(f)(6) 8 normally does not become operative prior to 30 days after the date of the filing. However, pursuant to Rule 19b–4(f)(6)(iii),9 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 6 15 U.S.C. 78s(b)(3)(A)(iii). CFR 240.19b–4(f)(6). In addition, Rule 19b– 4(f)(6) 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. 8 17 CFR 240.19b–4(f)(6). 9 17 CFR 240.19b–4(f)(6)(iii). 7 17 E:\FR\FM\27JNN1.SGM 27JNN1

Agencies

[Federal Register Volume 78, Number 124 (Thursday, June 27, 2013)]
[Notices]
[Pages 38766-38768]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-15342]



[[Page 38766]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69812; File No. SR-NYSEMKT-2013-51]


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, 2014

June 20, 2013.
    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 June 14, 2013, 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 Exchange. 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.
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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, 2013, until the 
earlier of Securities and Exchange Commission (``Commission'') approval 
to make such pilot permanent or January 31, 2014. 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
    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, 
July 31, 2012, January 31, 2013, and July 31, 2013, respectively.\5\ 
The Exchange now seeks to extend the operation of the NMM Pilot, 
currently scheduled to expire on July 31, 2013, until the earlier of 
Commission approval to make such pilot permanent or January 31, 2014.
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    \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) (extending Pilot 
to March 30, 2010); 61725 (March 17, 2010), 75 FR 14223 (March 24, 
2010) (SR-NYSEAmex-2010-28) (extending Pilot to September 1, 2010); 
62820 (September 1, 2010), 75 FR 54935 (September 9, 2010) (SR-
NYSEAmex-2010-86) (extending Pilot to January 31, 2011); 63615 
(December 29, 2010), 76 FR 611 (January 5, 2011) (SR-NYSEAmex-2010-
123) (extending Pilot to August 1, 2011); 64773 (June 29, 2011), 76 
FR 39453 (July 6, 2011) (SR-NYSEAmex-2011-43) (extending Pilot to 
January 31, 2012); 66042 (December 23, 2011), 76 FR 82326 (December 
30, 2011) (SR-NYSEAmex-2011-102) (extending Pilot to July 31, 2012); 
67495 (July 25, 2012), 77 FR 45406 (July 31, 2012) (SR-NYSEMKT-2012-
21) (extending the Pilot to January 31, 2013); and 68559 (January 2, 
2013), 78 FR 1286 (January 8, 2013) (SR-NYSEMKT-2012-84) (extending 
Pilot to July 31, 2013).
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    The Exchange notes that parallel changes are proposed to be made to 
the rules of NYSE.\6\
---------------------------------------------------------------------------

    \6\ See SR-NYSE-2013-43.
---------------------------------------------------------------------------

Background \7\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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[supreg] \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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    The NMM Pilot further modified the logic for allocating executed 
shares

[[Page 38767]]

among market participants having trading interest at a price point upon 
execution of incoming orders. The modified logic rewards displayed 
orders that establish the Exchange's BBO. During the operation of the 
NMM Pilot, orders or portions thereof that establish priority \13\ 
retain that priority until the portion of the order that established 
priority is exhausted. Where no one order has established priority, 
shares are distributed among all market participants on parity.
---------------------------------------------------------------------------

    \13\ See NYSE MKT Rule 72(a)(ii)--Equities.
---------------------------------------------------------------------------

    The NMM Pilot was originally scheduled to end operation on October 
1, 2009, or such earlier time as the Commission may determine to make 
the rules permanent. The Exchange filed to extend the operation of the 
Pilot on several occasions \14\ in order to prepare a rule filing 
seeking permission to make the above described changes permanent. The 
Exchange is currently still preparing such formal submission but does 
not expect that filing to be completed and approved by the Commission 
before July 31, 2013.
---------------------------------------------------------------------------

    \14\ See supra note 5.
---------------------------------------------------------------------------

Proposal To Extend the Operation of the NMM Pilot
    The Exchange established the NMM Pilot to provide incentives for 
quoting, to enhance competition among the existing group of liquidity 
providers and to add a new competitive market participant. The Exchange 
believes that the NMM Pilot allows the Exchange to provide its market 
participants with a trading venue that utilizes an enhanced market 
structure to encourage the addition of liquidity, facilitate the 
trading of larger orders more efficiently and operates to reward 
aggressive liquidity providers. As such, the Exchange believes that the 
rules governing the NMM Pilot should be made permanent. Through this 
filing the Exchange seeks to extend the current operation of the NMM 
Pilot until January 31, 2014, in order to allow the Exchange time to 
formally submit a filing to the Commission to convert the pilot rules 
to permanent rules.
2. Statutory Basis
    The basis under the Securities Exchange Act of 1934 (the ``Act'') 
for this proposed rule change is the requirement under Section 6(b)(5) 
that an exchange have rules that are 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. The Exchange 
believes that this filing is consistent with these principles because 
the NMM Pilot provides its market participants with a trading venue 
that utilizes an enhanced market structure to encourage the addition of 
liquidity, facilitate the trading of larger orders more efficiently and 
operates to reward aggressive liquidity providers. Moreover, requesting 
an extension of the NMM Pilot will permit adequate time for: (i) The 
Exchange to prepare and submit a filing to make the rules governing the 
NMM Pilot permanent; (ii) public notice and comment; and (iii) 
completion of the 19b-4 approval process.

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. The Exchange believes that 
extending the operation of the NMM Pilot will enhance competition among 
liquidity providers and thereby improve execution quality on the 
Exchange.

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 \15\ and Rule 19b-4(f)(6) thereunder.\16\ 
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, or such shorter time as 
the Commission may designate, if consistent with the protection of 
investors and the public interest, 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.
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    \15\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
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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    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-2013-51 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-2013-51. 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

[[Page 38768]]

submissions. You should submit only information that you wish to make 
publicly available. All submissions should refer to File Number SR-
NYSEMKT-2013-51 and should be submitted on or before July 18, 2013.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-15342 Filed 6-26-13; 8:45 am]
BILLING CODE 8011-01-P
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