Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Proposing To Extend the Operation of Its Supplemental Liquidity Providers Pilot, Currently Scheduled To Expire on January 31, 2014, Until the Earlier of the Securities and Exchange Commission's Approval To Make Such Pilot Permanent or July 31, 2014, 4364-4366 [2014-01425]

Download as PDF 4364 Federal Register / Vol. 79, No. 17 / Monday, January 27, 2014 / Notices The agenda for the meeting includes: Remarks from Commissioners; a recommendation from the Market Structure Subcommittee and the Investor as Purchaser Subcommittee regarding decimalization; discussion of crowdfunding; discussion of rebates and payments for order flow; and nonpublic subcommittee meetings. For further information, please contact the Office of the Secretary at (202) 551–5400. Dated: January 23, 2014. Elizabeth M. Murphy, Secretary. [FR Doc. 2014–01621 Filed 1–23–14; 4:15 pm] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Proposing To Extend the Operation of Its Supplemental Liquidity Providers Pilot, Currently Scheduled To Expire on January 31, 2014, Until the Earlier of the Securities and Exchange Commission’s Approval To Make Such Pilot Permanent or July 31, 2014 January 21, 2014. mstockstill on DSK4VPTVN1PROD with NOTICES 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 January 6, 2014 NYSE MKT LLC (‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 Supplemental Liquidity Providers Pilot (‘‘SLP Pilot’’ or ‘‘Pilot’’) (See Rule 107B—Equities), currently scheduled to expire on January 31, 2014, until the earlier of the Securities and Exchange Commission’s (‘‘Commission’’) approval to make such Pilot permanent or July 31, 2014. The text of the proposed rule change is available on the Exchange’s Web site 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Mar<15>2010 18:16 Jan 24, 2014 Jkt 232001 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 the Statutory Basis for, the Proposed Rule Change [Release No. 34–71361; File No. SR– NYSEMKT–2014–03] 1 15 at www.nyse.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 1. Purpose The Exchange proposes to extend the operation of its SLP Pilot,3 currently scheduled to expire on January 31, 2014, until the earlier of Commission approval to make such Pilot permanent or July 31, 2014. Background 4 In October 2008, the New York Stock Exchange LLC (‘‘NYSE’’) implemented significant changes to its market rules, execution technology and the rights and obligations of its market participants all of which were designed to improve execution quality on the NYSE. These changes were all elements of the NYSE’s 3 See Securities Exchange Act Release No. 61308 (January 7, 2010), 75 FR 2573 (January 15, 2010) (SR–NYSEAmex–2009–98) (establishing the NYSE Amex Equities SLP Pilot). See also Securities Exchange Act Release Nos. 61841 (April 5, 2010), 75 FR 18560 (April 12, 2010) (SR–NYSEAmex– 2010–33) (extending the operation of the SLP Pilot to September 30, 2010); 62814 (September 1, 2010), 75 FR 54671 (September 8, 2010) (SR–NYSEAmex– 2010–88) (extending the operation of the SLP Pilot to January 31, 2011); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) (SR–NYSEAmex–2010– 123) (extending the operation of the SLP Pilot to August 1, 2011); 64772 (June 29, 2011), 76 FR 39455 (July 6, 2011) (SR–NYSEAmex–2011–44) (extending the operation of the SLP Pilot to January 31, 2012); 66041 (December 23, 2011), 76 FR 82328 (December 30, 2011) (SR–NYSEAmex–011–103) (extending the operation of the SLP Pilot to July 31, 2012); 67496 (July 25, 2012), 77 FR 45390 (July 31, 2012) (SR– NYSEMKT–2012–22) (extending the operation of the SLP Pilot to January 31, 2013); 68557 (January 2, 2013), 78 FR 1284 (January 8, 2013) (SR– NYSEMKT–2012–85) (extending the operation of the SLP Pilot to July 31, 2013); and 69820 (June 21, 2013), 78 FR 38748 (June 27, 2013) (SR– NYSEMKT–2013–52) (extending the operation of the SLP Pilot to January 31, 2014). 4 The information contained herein is a summary of the NMM Pilot and the SLP Pilot. See supra note 3 and infra note 5 for a fuller description of those pilots. PO 00000 Frm 00044 Fmt 4703 Sfmt 4703 and the Exchange’s enhanced market model referred to as the ‘‘New Market Model’’ (‘‘NMM Pilot’’).5 The NYSE SLP Pilot was launched in coordination with the NMM Pilot (see NYSE Rule 107B). As part of the NMM Pilot, NYSE eliminated the function of specialists on the Exchange creating a new category of market participant, the Designated Market Maker or ‘‘DMM.’’ 6 Separately, the NYSE established the SLP Pilot, which established SLPs as a new class of market participants to supplement the liquidity provided by DMMs.7 The NYSE adopted NYSE Rule 107B governing SLPs as a six-month pilot program commencing in November 2008. This NYSE pilot has been extended several times, most recently to January 31, 2014.8 The NYSE is in the process of requesting an extension of their SLP Pilot until July 31, 2014 or until the Commission approves the pilot as permanent.9 The extension of the NYSE SLP Pilot until July 31, 2014 runs parallel with the extension of the NMM pilot until July 31, 2014, or until the Commission approves the NMM Pilot as permanent. 5 See Securities Exchange Act Release No. 58845 (October 24, 2008), 73 FR 64379 (October 29, 2008) (SR–NYSE–2008–46). 6 See NYSE Rule 103. 7 See NYSE Rule 107B and NYSE MKT Rule 107B—Equities. NYSE amended the monthly volume requirements to an ADV that is a specified percentage of NYSE CADV. See Securities Exchange Act Release No. 67759 (August 30, 2012), 77 FR 54939 (September 6, 2012) (SR–NYSE–2012–38). 8 See Securities Exchange Act Release Nos. 58877 (October 29, 2008), 73 FR 65904 (November 5, 2008) (SR–NYSE–2008–108) (adopting SLP Pilot program); 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009) (SR–NYSE–2009–46) (extending SLP Pilot program until October 1, 2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009) (SR–NYSE– 2009–100) (extending SLP Pilot program until November 30, 2009); 61075 (November 30, 2009), 74 FR 64112 (December 7, 2009) (SR–NYSE–2009– 119) (extending SLP Pilot program until March 30, 2010); 61840 (April 5, 2010), 75 FR 18563 (April 12, 2010) (SR–NYSE–2010–28) (extending the SLP Pilot until September 30, 2010); 62813 (September 1, 2010), 75 FR 54686 (September 8, 2010) (SR–NYSE– 2010–62) (extending the SLP Pilot until January 31, 2011); 63616 (December 29, 2010), 76 FR 612 (January 5, 2011) (SR–NYSE–2010–86) (extending the operation of the SLP Pilot to August 1, 2011); 64762 (June 28, 2011), 76 FR 39145 (July 5, 2011) (SR–NYSE–2011–30) (extending the operation of the SLP Pilot to January 31, 2012); 66045 (December 23, 2011), 76 FR 82342 (December 30, 2011) (SR– NYSE–2011–66) (extending the operation of the SLP Pilot to July 31, 2012); 67493 (July 25, 2012), 77 FR 45388 (July 31, 2012) (SR–NYSE–2012–27) (extending the operation of the SLP Pilot to January 31, 2013); 68560 (January 2, 2013), 78 FR 1280 (January 8, 2013) (SR–NYSE–2012–76) (extending the operation of the SLP Pilot to July 31, 2013); and 69819 (June 21, 2013), 78 FR 38764 (June 27, 2013) (SR–NYSE–2013–44) (extending the operation of the SLP Pilot to January 31, 2014). 9 See SR–NYSE–2014–03. E:\FR\FM\27JAN1.SGM 27JAN1 Federal Register / Vol. 79, No. 17 / Monday, January 27, 2014 / Notices Proposal to Extend the Operation of the NYSE MKT SLP Pilot The Exchange established the SLP Pilot to provide incentives for quoting, to enhance competition among the existing group of liquidity providers, including the DMMs, and add new competitive market participants. NYSE MKT Rule 107B—Equities is based on NYSE Rule 107B. NYSE MKT Rule 107B—Equities was filed with the Commission on December 30, 2009, as a ‘‘me too’’ filing for immediate effectiveness as a pilot program.10 The Exchange’s SLP Pilot is scheduled to end operation on January 31, 2014 or such earlier time as the Commission may determine to make the rules permanent. The Exchange believes that the SLP Pilot, in coordination with the NMM Pilot and the NYSE SLP 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 SLP Pilot (NYSE MKT Rule 107B—Equities) should be made permanent. Through this filing the Exchange seeks to extend the current operation of the SLP Pilot until July 31, 2014, in order to allow the Exchange to formally submit a filing to the Commission to convert the SLP Pilot rule to a permanent rule. The Exchange is currently preparing a rule filing seeking permission to make the Exchange’s SLP Pilot permanent, but does not expect that filing to be completed and approved by the Commission before January 31, 2014.11 The proposed change is not otherwise intended to address any other issues and the Exchange is not aware of any problems that member organizations would have in complying with the proposed change. mstockstill on DSK4VPTVN1PROD with NOTICES 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,12 in general, and furthers the objectives of Sections 6(b)(5) of the Act,13 in particular, because it is designed to prevent 10 See Securities Exchange Act Release No. 61308 (January 7, 2010), 75 FR 2573 (January 15, 2010) (SR–NYSEAmex–2009–98). 11 The NMM Pilot was scheduled to expire on January 31, 2014 as well. On January 6, 2014, the Exchange filed to extend the NMM Pilot until July 31, 2014 (See SR–NYSEMKT–2014–02). 12 15 U.S.C. 78f(b). 13 15 U.S.C. 78f(b)(5). VerDate Mar<15>2010 18:16 Jan 24, 2014 Jkt 232001 fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, to protect investors and the public interest and because it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange believes the proposed rule change is designed to facilitate transactions in securities and to remove impediments to, and perfect the mechanisms of, a free and open market and a national market system because the SLP Pilot provides its market participants with a trading venue that utilizes an enhanced market structure to encourage the addition of liquidity and operates to reward aggressive liquidity providers. The Exchange also believes the proposed rule change is designed to prevent fraudulent and manipulative acts and practices and to promote just and equitable principles of trade because it seeks to extend an existing pilot program. Moreover, requesting an extension of the SLP Pilot will permit adequate time for: (i) The Exchange to prepare and submit a filing to make the rules governing the SLP Pilot permanent; (ii) public notice and comment; and (iii) completion of the 19b–4 approval process. Finally, the Exchange believes that it is subject to significant competitive forces, as described below in the Exchange’s statement regarding the burden on competition. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization’s Statement on Burden on Competition In accordance with Section 6(b)(8) of the Act,14 the Exchange believes that the proposed rule change would not 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 SLP Pilot will enhance competition among liquidity providers and thereby improve execution quality on the Exchange. The Exchange will continue to monitor the efficacy of the program during the proposed extended pilot period. Finally, the Exchange notes that it operates in a highly competitive market in which market participants can 14 15 PO 00000 U.S.C. 78f(b)(8). Frm 00045 Fmt 4703 Sfmt 4703 4365 readily favor competing venues. In such an environment, the Exchange must continually review, and consider adjusting the services it offers and the requirements it imposes to remain competitive with other U.S. equity exchanges. For the reasons described above, the Exchange believes that the proposed rule change reflects this competitive environment. 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 foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act 15 and Rule 19b–4(f)(6) 16 thereunder because the proposal does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) by its terms, become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest.17 A proposed rule change filed under Rule 19b–4(f)(6) normally may not become operative prior to 30 days after the date of filing. However, Rule 19b– 4(f)(6)(iii) 18 permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has requested that the Commission waive the 30-day operative delay period. The Commission believes that waiver of the 30-day operative delay period is consistent with the protection of investors and the public interest because waiver would allow the pilot program to continue uninterrupted. Accordingly, the Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest, and designates the 15 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). 17 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. 18 17 CFR 240.19b–4(f)(6)(iii). 16 17 E:\FR\FM\27JAN1.SGM 27JAN1 4366 Federal Register / Vol. 79, No. 17 / Monday, January 27, 2014 / Notices proposed rule change to be operative upon filing with the Commission.19 At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.20 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: mstockstill on DSK4VPTVN1PROD with NOTICES 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–2013–03 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–2014–03. 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 19 For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 20 15 U.S.C. 78s(b)(3)(C). VerDate Mar<15>2010 18:16 Jan 24, 2014 Jkt 232001 inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR– NYSEMKT–2014–03 and should be submitted on or before February 18, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.21 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–01425 Filed 1–24–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71360; File No. SR–NYSE– 2014–02] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Amending Supplementary Material .20 to Rule 103 Which Sets Forth Net Liquid Assets Requirements for Member Organizations That Operate as Designated Market Maker Units January 21, 2014. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on January 6, 2014, the New York Stock Exchange LLC (the ‘‘Exchange’’ or ‘‘NYSE’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the selfregulatory 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 amend Supplementary Material .20 to Rule 103 (‘‘Rule 103.20’’), which sets forth net liquid assets requirements for member organizations that operate as Designated Market Maker (‘‘DMM’’) units (‘‘DMM units’’). 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 21 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00046 Fmt 4703 Sfmt 4703 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 aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Rule 103.20, which sets forth net liquid assets requirements for member organizations that operate as DMM units.3 Specifically, the Exchange proposes to change the types of financial assets and resources that would count toward meeting the net liquid assets requirement without reducing the level of the overall requirement and reorganize and add detail to the rule so that it is easier to understand. Current Rule Under Rule 103.20, the Exchange imposes a net liquid assets requirement on each DMM unit subject to Rule 104 that typically far exceeds the minimum net capital requirement applicable to a broker-dealer under Commission Rule 15c3–1 (‘‘SEC Net Capital Rule’’).4 The purpose of the Exchange’s requirement is to reasonably assure that each DMM unit maintains sufficient liquidity to carry out its obligation to maintain an orderly market in its assigned securities in times of market stress. The Exchange established the formula for the current net liquid assets requirement in July 2011, which results in the aggregate net 3 Pursuant to Rule 2(j), a DMM unit is defined as a member organization or unit within a member organization that has been approved to act as a DMM unit under Rule 98. Pursuant to Rule 2(i), a DMM is defined as an individual member, officer, partner, employee or associated person of a DMM unit who is approved by the Exchange to act in the capacity of a DMM. All references to rules herein are to NYSE rules, unless otherwise noted. 4 17 CFR 240.15c3–1. E:\FR\FM\27JAN1.SGM 27JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 79, Number 17 (Monday, January 27, 2014)]
[Notices]
[Pages 4364-4366]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-01425]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71361; File No. SR-NYSEMKT-2014-03]


Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and 
Immediate Effectiveness of Proposed Rule Change Proposing To Extend the 
Operation of Its Supplemental Liquidity Providers Pilot, Currently 
Scheduled To Expire on January 31, 2014, Until the Earlier of the 
Securities and Exchange Commission's Approval To Make Such Pilot 
Permanent or July 31, 2014

January 21, 2014.
    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 January 6, 2014 NYSE MKT LLC (``Exchange'' or ``NYSE MKT'') 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\ 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 Supplemental 
Liquidity Providers Pilot (``SLP Pilot'' or ``Pilot'') (See Rule 107B--
Equities), currently scheduled to expire on January 31, 2014, until the 
earlier of the Securities and Exchange Commission's (``Commission'') 
approval to make such Pilot permanent or July 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to extend the operation of its SLP Pilot,\3\ 
currently scheduled to expire on January 31, 2014, until the earlier of 
Commission approval to make such Pilot permanent or July 31, 2014.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 61308 (January 7, 
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98) 
(establishing the NYSE Amex Equities SLP Pilot). See also Securities 
Exchange Act Release Nos. 61841 (April 5, 2010), 75 FR 18560 (April 
12, 2010) (SR-NYSEAmex-2010-33) (extending the operation of the SLP 
Pilot to September 30, 2010); 62814 (September 1, 2010), 75 FR 54671 
(September 8, 2010) (SR-NYSEAmex-2010-88) (extending the operation 
of the SLP Pilot to January 31, 2011); 63615 (December 29, 2010), 76 
FR 611 (January 5, 2011) (SR-NYSEAmex-2010-123) (extending the 
operation of the SLP Pilot to August 1, 2011); 64772 (June 29, 
2011), 76 FR 39455 (July 6, 2011) (SR-NYSEAmex-2011-44) (extending 
the operation of the SLP Pilot to January 31, 2012); 66041 (December 
23, 2011), 76 FR 82328 (December 30, 2011) (SR-NYSEAmex-011-103) 
(extending the operation of the SLP Pilot to July 31, 2012); 67496 
(July 25, 2012), 77 FR 45390 (July 31, 2012) (SR-NYSEMKT-2012-22) 
(extending the operation of the SLP Pilot to January 31, 2013); 
68557 (January 2, 2013), 78 FR 1284 (January 8, 2013) (SR-NYSEMKT-
2012-85) (extending the operation of the SLP Pilot to July 31, 
2013); and 69820 (June 21, 2013), 78 FR 38748 (June 27, 2013) (SR-
NYSEMKT-2013-52) (extending the operation of the SLP Pilot to 
January 31, 2014).
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Background \4\
---------------------------------------------------------------------------

    \4\ The information contained herein is a summary of the NMM 
Pilot and the SLP Pilot. See supra note 3 and infra note 5 for a 
fuller description of those pilots.
---------------------------------------------------------------------------

    In October 2008, the New York Stock Exchange LLC (``NYSE'') 
implemented significant changes to its market rules, execution 
technology and the rights and obligations of its market participants 
all of which were designed to improve execution quality on the NYSE. 
These changes were all elements of the NYSE's and the Exchange's 
enhanced market model referred to as the ``New Market Model'' (``NMM 
Pilot'').\5\ The NYSE SLP Pilot was launched in coordination with the 
NMM Pilot (see NYSE Rule 107B).
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 58845 (October 24, 
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
---------------------------------------------------------------------------

    As part of the NMM Pilot, NYSE eliminated the function of 
specialists on the Exchange creating a new category of market 
participant, the Designated Market Maker or ``DMM.'' \6\ Separately, 
the NYSE established the SLP Pilot, which established SLPs as a new 
class of market participants to supplement the liquidity provided by 
DMMs.\7\
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    \6\ See NYSE Rule 103.
    \7\ See NYSE Rule 107B and NYSE MKT Rule 107B--Equities. NYSE 
amended the monthly volume requirements to an ADV that is a 
specified percentage of NYSE CADV. See Securities Exchange Act 
Release No. 67759 (August 30, 2012), 77 FR 54939 (September 6, 2012) 
(SR-NYSE-2012-38).
---------------------------------------------------------------------------

    The NYSE adopted NYSE Rule 107B governing SLPs as a six-month pilot 
program commencing in November 2008. This NYSE pilot has been extended 
several times, most recently to January 31, 2014.\8\ The NYSE is in the 
process of requesting an extension of their SLP Pilot until July 31, 
2014 or until the Commission approves the pilot as permanent.\9\ The 
extension of the NYSE SLP Pilot until July 31, 2014 runs parallel with 
the extension of the NMM pilot until July 31, 2014, or until the 
Commission approves the NMM Pilot as permanent.
---------------------------------------------------------------------------

    \8\ See Securities Exchange Act Release Nos. 58877 (October 29, 
2008), 73 FR 65904 (November 5, 2008) (SR-NYSE-2008-108) (adopting 
SLP Pilot program); 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009) 
(SR-NYSE-2009-46) (extending SLP Pilot program until October 1, 
2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009) (SR-
NYSE-2009-100) (extending SLP Pilot program until November 30, 
2009); 61075 (November 30, 2009), 74 FR 64112 (December 7, 2009) 
(SR-NYSE-2009-119) (extending SLP Pilot program until March 30, 
2010); 61840 (April 5, 2010), 75 FR 18563 (April 12, 2010) (SR-NYSE-
2010-28) (extending the SLP Pilot until September 30, 2010); 62813 
(September 1, 2010), 75 FR 54686 (September 8, 2010) (SR-NYSE-2010-
62) (extending the SLP Pilot until January 31, 2011); 63616 
(December 29, 2010), 76 FR 612 (January 5, 2011) (SR-NYSE-2010-86) 
(extending the operation of the SLP Pilot to August 1, 2011); 64762 
(June 28, 2011), 76 FR 39145 (July 5, 2011) (SR-NYSE-2011-30) 
(extending the operation of the SLP Pilot to January 31, 2012); 
66045 (December 23, 2011), 76 FR 82342 (December 30, 2011) (SR-NYSE-
2011-66) (extending the operation of the SLP Pilot to July 31, 
2012); 67493 (July 25, 2012), 77 FR 45388 (July 31, 2012) (SR-NYSE-
2012-27) (extending the operation of the SLP Pilot to January 31, 
2013); 68560 (January 2, 2013), 78 FR 1280 (January 8, 2013) (SR-
NYSE-2012-76) (extending the operation of the SLP Pilot to July 31, 
2013); and 69819 (June 21, 2013), 78 FR 38764 (June 27, 2013) (SR-
NYSE-2013-44) (extending the operation of the SLP Pilot to January 
31, 2014).
    \9\ See SR-NYSE-2014-03.

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[[Page 4365]]

Proposal to Extend the Operation of the NYSE MKT SLP Pilot
    The Exchange established the SLP Pilot to provide incentives for 
quoting, to enhance competition among the existing group of liquidity 
providers, including the DMMs, and add new competitive market 
participants. NYSE MKT Rule 107B--Equities is based on NYSE Rule 107B. 
NYSE MKT Rule 107B--Equities was filed with the Commission on December 
30, 2009, as a ``me too'' filing for immediate effectiveness as a pilot 
program.\10\ The Exchange's SLP Pilot is scheduled to end operation on 
January 31, 2014 or such earlier time as the Commission may determine 
to make the rules permanent.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 61308 (January 7, 
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98).
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    The Exchange believes that the SLP Pilot, in coordination with the 
NMM Pilot and the NYSE SLP 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 SLP Pilot (NYSE MKT Rule 107B--Equities) should be 
made permanent.
    Through this filing the Exchange seeks to extend the current 
operation of the SLP Pilot until July 31, 2014, in order to allow the 
Exchange to formally submit a filing to the Commission to convert the 
SLP Pilot rule to a permanent rule. The Exchange is currently preparing 
a rule filing seeking permission to make the Exchange's SLP Pilot 
permanent, but does not expect that filing to be completed and approved 
by the Commission before January 31, 2014.\11\
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    \11\ The NMM Pilot was scheduled to expire on January 31, 2014 
as well. On January 6, 2014, the Exchange filed to extend the NMM 
Pilot until July 31, 2014 (See SR-NYSEMKT-2014-02).
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    The proposed change is not otherwise intended to address any other 
issues and the Exchange is not aware of any problems that member 
organizations would have in complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\12\ in general, and furthers the 
objectives of Sections 6(b)(5) of the Act,\13\ in particular, because 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating, 
clearing, settling, processing information with respect to, and 
facilitating transactions in securities, to remove impediments to, and 
perfect the mechanisms of, a free and open market and a national market 
system and, in general, to protect investors and the public interest 
and because it is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
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    \12\ 15 U.S.C. 78f(b).
    \13\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed rule change is designed to 
facilitate transactions in securities and to remove impediments to, and 
perfect the mechanisms of, a free and open market and a national market 
system because the SLP Pilot provides its market participants with a 
trading venue that utilizes an enhanced market structure to encourage 
the addition of liquidity and operates to reward aggressive liquidity 
providers. The Exchange also believes the proposed rule change is 
designed to prevent fraudulent and manipulative acts and practices and 
to promote just and equitable principles of trade because it seeks to 
extend an existing pilot program. Moreover, requesting an extension of 
the SLP Pilot will permit adequate time for: (i) The Exchange to 
prepare and submit a filing to make the rules governing the SLP Pilot 
permanent; (ii) public notice and comment; and (iii) completion of the 
19b-4 approval process. Finally, the Exchange believes that it is 
subject to significant competitive forces, as described below in the 
Exchange's statement regarding the burden on competition. For these 
reasons, the Exchange believes that the proposal is consistent with the 
Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\14\ the Exchange 
believes that the proposed rule change would not 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 SLP Pilot will enhance competition among liquidity providers and 
thereby improve execution quality on the Exchange. The Exchange will 
continue to monitor the efficacy of the program during the proposed 
extended pilot period.
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    \14\ 15 U.S.C. 78f(b)(8).
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    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues. In such an environment, the Exchange must continually 
review, and consider adjusting the services it offers and the 
requirements it imposes to remain competitive with other U.S. equity 
exchanges. For the reasons described above, the Exchange believes that 
the proposed rule change reflects this competitive environment.

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 foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \15\ and Rule 19b-4(f)(6) \16\ thereunder 
because the proposal does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; and (iii) by its terms, become operative for 30 days 
from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest.\17\
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f)(6).
    \17\ 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) normally may 
not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \18\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay period. The Commission 
believes that waiver of the 30-day operative delay period is consistent 
with the protection of investors and the public interest because waiver 
would allow the pilot program to continue uninterrupted. Accordingly, 
the Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest, 
and designates the

[[Page 4366]]

proposed rule change to be operative upon filing with the 
Commission.\19\
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    \18\ 17 CFR 240.19b-4(f)(6)(iii).
    \19\ For purposes only of waiving the operative delay for this 
proposal, 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 the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act.\20\
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    \20\ 15 U.S.C. 78s(b)(3)(C).
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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-2013-03 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-2014-03. 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 available publicly. All 
submissions should refer to File Number SR-NYSEMKT-2014-03 and should 
be submitted on or before February 18, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\21\
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    \21\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-01425 Filed 1-24-14; 8:45 am]
BILLING CODE 8011-01-P

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