12202 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 

46 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4Orders subject to tick restrictions are sell ‘‘plus’’ 

and buy ‘‘minus’’ orders. See NYSE Amex Equities 

Rule 13. 

5Amendments to NYSE Amex Equities Rule 440B 

to implement the short sale price test restriction 

requirements of Rule 201 are the subject of a 

separate rule filing. See SR–NYSEAmex–2011–08. 

6Amendments to Regulation SHO, Securities 

Exchange Act Release No. 61595 (Feb. 26, 2010), 75 

FR 11232 (Mar. 10, 2010) (‘‘Rule 201 Adopting 

Release’’). In the Rule 201 Adopting Release, the 

Commission also adopted amendments to Rule 

200(g) of Regulation SHO to include a ‘‘short 

exempt’’ marking requirement. 17 CFR 242.200(g). 

See also Division of Trading and Markets: 

Responses to Frequently Asked Questions 

Concerning Rule 201 of Regulation SHO (‘‘T&M 

FAQs’’). 

7The term ‘‘covered security’’ shall have the same 

meaning as in Rule 201 of Regulation SHO. Rule 

201(a)(1) defines the term ‘‘covered security’’ to 

mean any ‘‘NMS stock’’ as defined under Rule 

600(b)(47) of Regulation NMS. Rule 600(b)(47) of 

Regulation NMS defines an ‘‘NMS stock’’ as ‘‘any 

NMS security other than an option.’’ Rule 600(b)(46) 

of Regulation NMS defines an ‘‘NMS security’’ as 

‘‘any security or class of securities for which 

transaction reports are collected, processed, and 

made available pursuant to an effective transaction 

reporting plan, or an effective national market 

system plan for reporting transactions in listed 

options.’’ 17 CFR 242.201(a)(1); 17 CFR 

242.600(b)(47); and 17 CFR 242.600(b)(46). 

8 17 CFR 242.201(b). 

9Rule 201 Adopting Release, 75 FR 11232. The 

Rule 201 compliance date, originally set for 

November 10, 2010, was extended to February 28, 

2011 in Securities Exchange Act Release No. 63247 

(Nov. 4, 2010), 75 FR 68702 (Nov. 9, 2010). The 

May 10th effective date and February 28th 

compliance date also apply to amended Rule 200(g). 

10Rule 201(a)(9) states that the term ‘‘trading 

center’’ shall have the same meaning as in Rule 

600(b)(78) of Regulation NMS. Rule 600(b)(78) 

defines a ‘‘trading center’’ as ‘‘a national securities 

exchange or national securities association that 

operates an SRO trading facility, an alternative 

trading system, an exchange market maker, an OTC 

market maker, or any other broker or dealer that 

executes orders internally by trading as principal or 

crossing orders as agent.’’ 17 CFR 242.600(b)(78). 

11The term ‘‘national best bid’’ shall have the 

same meaning as in Rule 201 of Regulation SHO. 

Rule 201(a)(4) states that such term shall have the 

same meaning as in Rule 600(b)(42) of Regulation 

NMS. 17 CFR 242.201(a)(4); 17 CFR 242.600(b)(42). 

12The term ‘‘listing market’’ shall have the same 

meaning as in Rule 201 of Regulation SHO. Rule 

201(a)(3) defines the term ‘‘listing market’’ to have 

the same meaning as the term ‘‘listing market’’ as 

defined in the effective transaction reporting plan 

for the covered security. 17 CFR 242.201(a)(3). See 

also 17 CFR 242.201(a)(2). 

13 17 CFR 242.201(b)(1)(i). 

14 17 CFR 242.201(b)(1)(ii). In addition, if the 

price of a covered security declines intra-day by at 

least 10% on a day on which the security is already 

subject to the short sale price test restriction of Rule 

201, the restriction will be re-triggered and, 

therefore, will continue in effect for the remainder 

of that day and the following day. See Rule 201 

Adopting Release, 75 FR 11232, 11253, n. 290. Rule 

201 does not place any limit on the frequency or 

number of times the circuit breaker can be retriggered with respect to a particular stock. See 

T&M FAQs, at Q&A 2.2. 

Reference Room, 100 F Street, NE., 

Washington, DC 20549–1090. Copies of 

the filing will also be available for 

inspection and copying at the 

Exchange’s principal office and on its 

Internet Web site at http:// 

www.nyse.com. All comments received 

will be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEAMEX–2011–08 and should be 

submitted on or before March 25, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.46

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4892 Filed 3–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63972; File No. SR– 

NYSEAMEX–2011–09] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Adopting Supplementary 

Material .20 to NYSE Amex Equities 

Rule 123C To Provide for the 

Treatment of Short Sale Orders at the 

Close 

February 25, 2011. 

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 February 

24, 2011, NYSE Amex LLC (the 

‘‘Exchange’’ or ‘‘NYSE Amex’’) 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 substantially 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 adopt 

Supplementary Material .20 to NYSE 

Amex Equities Rule 123C (The Closing 

Procedures) to provide for the treatment 

of short sale orders at the close, for 

purposes of execution priority, as orders 

subject to tick restrictions 4 during a 

period when a restriction on the prices 

at which covered securities may be sold 

short is in effect (‘‘Short Sale Price Test’’) 

under NYSE Amex Equities Rule 440B5

(which implements the provisions of 

Rule 201 of Regulation SHO (‘‘Rule 

201’’) under the Act). The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, and http:// 

www.nyse.com. 

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 

On February 26, 2010, the 

Commission adopted amendments to 

Rule 201.6 Among other things, the 

amendments establish a short salerelated circuit breaker that, if triggered 

with respect to a covered security,7

imposes a short sale price test.8

Amended Rule 201 became effective on 

May 10, 2010 and the compliance date 

for the Rule is February 28, 2011.9

Rule 201(b) requires that trading 

centers,10 including NYSE Amex, 

establish, maintain, and enforce written 

policies and procedures reasonably 

designed to prevent the execution or 

display of a short sale order of a covered 

security at a price that is less than or 

equal to the current national best bid 11

if the price of that covered security 

decreases by 10% or more from the 

covered security’s closing price as 

determined by the listing market 12 for 

the covered security as of the end of 

regular trading hours on the prior day.13

In addition, Rule 201(b) requires that 

trading centers establish, maintain, and 

enforce written policies and procedures 

reasonably designed to impose the Short 

Sale Price Test for the remainder of the 

day and the following day (including 

the close on both days) when a national 

best bid for the covered security is 

calculated and disseminated on a 

current and continuing basis by a plan 

processor pursuant to an effective 

national market system plan.14


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Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 12203 

15See paragraphs (f) and (g) of proposed Rule 

440B regarding the treatment of permissible and 

short exempt orders. See SR–NYSEAmex–2011–08. 

16Better priced interest means an order that is 

priced lower than the closing price (in the case of 

an order to sell) or priced higher than the closing 

price (in the case of an order to buy). 

17A market on close (‘‘MOC’’) order without tick 

restrictions must be executed in its entirety at the 

closing price. Marketable limit orders receive an 

execution subject to the availability of contra side 

volume. 

18References in NYSE Amex Equities Rule 

123C(7) to orders with tick restrictions mean sell 

‘‘plus’’ or buy ‘‘minus’’ orders, as defined in Rule 13. 

19Crowd interest means verbal floor broker 

interest at the market entered by the designated 

market maker (‘‘DMM’’) to interact with orders in 

the Display Book. See note 20 infra. 

20The Display Book system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

DMM, contains order information, and provides a 

mechanism to execute and report transactions and 

published reports 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. 21 DMM interest, including better priced DMM 

interest entered into the Display Book prior to the 

closing transaction that is eligible to participate in 

the closing transaction is always included in the 

hierarchy of execution as if it were interest equal 

to the price of the closing transaction. 

22For example, the last sale on the Exchange was 

at a price of $46.00 on a minus tick, the closing 

price is $46.01, all sell plus MOC orders are limited 

to the closing price of $46.01 because the closing 

transaction would be the next plus tick. 

23See Section 11(a)(1)(G) of the Act. G orders are 

orders for an Exchange member’s own account 

where the member meets a business mix test that 

requires it to be primarily engaged in the business 

of underwriting and distributing securities, selling 

securities to customers, and/or acting as a broker 

and provided more than 50% of its gross revenues 

is derived from such businesses and related 

activities. G orders on the Exchange are required to 

yield priority, parity and precedence to non-G 

orders. 

24See NYSE Amex Equities Rule 123C(7)(a). 

25These would include short sale orders that 

were already priced above the last published 

Exchange bid. 

26The Exchange will not be making any changes 

in its opening and re-opening procedures in 

connection with the implementation of the short 

sale price test restrictions of Rule 201. The presence 

of short sale price test restrictions will have no 

impact on the priority of orders eligible to 

participate in openings and re-openings. 

27See NYSE Amex Equities Rule 13 (defining Sell 

‘‘Plus’’–Buy ‘‘Minus’’ Orders). A sell ‘‘plus’’ order is 

an order to sell a specified amount of stock as long 

as the price of the trade is not lower than the price 

of the last sale if the last sale was a plus or zero 

plus tick, and is not lower than the last sale plus 

the minimum change in the price if the last sale was 

a minus or zero minus tick. A buy ‘‘minus’’ order 

is an order to buy a specified amount of stock as 

long as the price to be executed is not higher than 

the price of the last sale if the last sale was a minus 

or zero minus tick, and is not higher than the price 

of the last sale less than the minimum change in 

the price of the stock if the last sale was a plus tick 

or zero plus tick. 

28 15 U.S.C. 78f(b). 

29 15 U.S.C. 78f(b)(5). 

In order to implement the provisions 

of Rule 201, the Exchange has proposed 

amendments to NYSE Amex Equities 

Rule 440B to establish the protocols for 

determining when a Short Sale Price 

Test is to be triggered for a covered 

security where the Exchange is the 

listing market. The proposed Rule 440B 

amendments also provide that, except 

for certain permissible and short exempt 

orders,15 during the period a Short Sale 

Price Test is in effect for a covered 

security, Exchange systems will not 

execute or display a short sale order 

with respect to that security at a price 

that is less than or equal to the current 

national best bid. 

NYSE Amex Equities Rule 123C 

prescribes the method for determining 

the closing print to be reported to the 

Consolidated Tape for each security at 

the close of trading. Interest executed in 

the closing transaction is allocated 

pursuant to NYSE Amex Equities Rule 

72 and consistent with the hierarchy of 

allocation of trading interest in NYSE 

Amex Equities Rule 123C(7). In the 

hierarchy of allocation, better priced 

interest 16 must receive an execution in 

whole or in part (‘‘must execute 

interest’’) 17 in order for the security to 

close. Included in this category are MOC 

orders without tick restrictions, MOC 

orders with tick restrictions that are 

eligible to be executed at a price better 

than the closing price,18 better priced 

limit orders, better priced limit on close 

(‘‘LOC’’) orders with or without tick 

restrictions that are eligible for 

execution at a better price than the 

closing price and Crowd interest.19

After the ‘‘must execute interest’’ is 

satisfied, then any limit orders 

represented in the Display Book 20 at the 

closing price may be used to offset the 

remaining imbalance.21 Next eligible for 

execution in the hierarchy of allocation 

for the closing transaction are LOC 

orders without tick restrictions limited 

to the closing price, then MOC orders 

that have tick restrictions which limit 

the order’s price to the price of the 

closing transaction,22 followed by LOC 

orders limited to the price of the closing 

transaction that have tick restrictions, 

‘‘G’’ orders,23 and finally closing offset 

orders. 

The Exchange proposes to establish 

the execution priority for short sale 

orders at the close during a period when 

the Short Sale Price Test is in effect. As 

provided for in proposed NYSE Amex 

Equities Rule 440B(h)(3), when the 

Short Sale Price Test is in effect, 

Exchange systems will, in connection 

with the closing transaction, re-price all 

short sale market orders and short sale 

orders limited to the last published 

Exchange bid or lower to one minimum 

price increment above the last 

published Exchange bid. If the closing 

price will be at or below the last 

published Exchange bid, such re-priced 

short sale orders will not participate in 

the close. If the closing price is above 

the last published Exchange bid, the repriced short sale orders may participate 

in the closing transaction, depending on 

whether the proposed closing price is 

the same as the re-priced order, or if the 

re-priced order is priced better than the 

closing price. If the re-priced order is 

priced better than the closing price, 

such re-priced short sale order will 

participate in the closing transaction.24

If the re-priced order is priced at the 

same price as the closing price, such repriced short sale order plus all other 

short sale orders limited at that price 25

may (but are not required to) participate 

in the closing transaction consistent 

with how NYSE Amex Equities Rule 

123C(7)(b) treats market or limit orders 

with tick restrictions. 

The Exchange therefore proposes to 

add new Supplementary Material .20 to 

NYSE Amex Equities Rule 123C 

providing that short sale orders for a 

covered security during a period when 

a Short Sale Price Test is in effect will 

be treated, for purposes of execution at 

the close under NYSE Amex Equities 

Rule 123C(7)(b), as orders that have tick 

restrictions.26 Thus, short sale orders 

that are eligible to participate in the 

closing transaction and that are priced 

at the same price as the closing 

transaction will be treated in the same 

manner as sell ‘‘plus’’ and buy ‘‘minus’’ 

tick restrictive orders priced at the 

closing price.27 As a result, re-priced 

short sale orders priced at the closing 

price will be eligible for participation at 

the close following limit orders 

represented in the Display Book with a 

price equal to the closing price and LOC 

orders with a price equal to the closing 

price. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,28 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,29

in particular, in that it is designed to, 

among other things, prevent fraudulent 

and manipulative acts and practices, to 

promote just and equitable principles of 

trade, and, in general, to protect 

investors and the public interest. The 

proposal is designed to implement the 

provisions of Rule 201 of Regulation 

SHO by establishing, maintaining and 

enforcing written policies and 

procedures reasonably designed to 

prevent the execution or display of a 

short sale order of a covered security at 


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12204 Federal Register / Vol. 76, No. 43 / Friday, March 4, 2011 / Notices 

30 15 U.S.C. 78s(b)(3)(A)(iii). 

31 17 CFR 240.19b–4(f)(6). 

32 15 U.S.C. 78s(b)(3)(A)(iii). 

33 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change at least five business 

days prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

34 17 CFR 240.19b–4(f)(6). 

35 17 CFR 240.19b–4(f)(6)(iii). 

36For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. 15 U.S.C. 78c(f). 

37 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

the close in violation of the Short Sale 

Price Test established in that rule. To 

that end, the proposed rule change will, 

among other things, amend the 

Exchange’s procedures for determining 

the closing price by treating short sale 

orders as orders subject to tick 

restrictions during a period when a 

Short Sale Price Test is in effect. 

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 30 and Rule 

19b–4(f)(6) thereunder.31 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 32 and Rule 19b–4(f)(6)(iii) 

thereunder.33

A proposed rule change filed under 

Rule 19b–4(f)(6) 34 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),35 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 hereby grants 

the request.36 Waiving the 30-day 

operative delay will allow the Exchange 

to implement the proposed amendments 

by February 28, 2011, which, as noted 

by the Exchange, is the compliance date 

for amendments to Regulation SHO 

under the Act. By waiving the operative 

delay, the Exchange will be able to 

comply with the amendments to 

Regulation SHO by February 28, 2011. 

Therefore, the Commission believes it is 

consistent with the protection of 

investors and the public interest to 

waive the 30-day operative delay and 

designates the proposal as operative 

upon filing. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–NYSEAMEX–2011–09 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–NYSEAMEX–2011–09. This 

file number should be included on the 

subject line if e-mail 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 (http://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 20549–1090. Copies of 

the filing will also be available for 

inspection and copying at the 

Exchange’s principal office and on its 

Internet Web site at http:// 

www.nyse.com. All comments received 

will be posted without change; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

NYSEAMEX–2011–09 and should be 

submitted on or before March 25, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–4890 Filed 3–3–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63970; File No. SR–BYX– 

2011–004] 

Self-Regulatory Organizations; BATS 

Y-Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change by BATS Exchange, Inc. 

To Adopt BYX Rule 11.21, entitled 

‘‘Input of Accurate Information’’ 

February 25, 2011. 

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 February 

18, 2011, BATS Y-Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BYX’’) 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 Exchange has 

designated this proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A) of the 


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