Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Notices 13251 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4A company seeking to choose a DMM through 

the allocation process must select a minimum of 

three DMM units to interview from the pool of 

DMM units eligible to participate in the allocation 

process and must notify the Exchange of its choice 

of DMM within two business days of the interviews. 

Alternatively, the company can delegate to the 

Exchange the authority to select its DMM. In that 

case, the selection is made by an Exchange 

Selection Panel (‘‘ESP’’) comprised of senior 

management of the Exchange, Exchange floor 

operations staff and non-DMM Executive Floor 

Governors or Floor Governors. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64039; File No. SR–NYSE– 

2011–09] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change 

Amending Exchange Rule 103B To 

Modify the Application of the 

Exchange’s Designated Market Maker 

(‘‘DMM’’) Allocation Policy in the Event 

of a Merger Involving One or More 

Listed Companies 

March 4, 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, New York Stock Exchange 

LLC (‘‘NYSE’’ or the ‘‘Exchange’’) 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Exchange Rule 103B to modify the 

application of the Exchange’s 

Designated Market Maker (‘‘DMM’’) 

allocation policy in the event of a 

merger involving one or more listed 

companies. The text of the proposed 

rule change is available at the Exchange, 

the Commission’s Public Reference 

Room, on the Commission’s Web site at 

http://www.sec.gov, 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 

Policy Note VI(D)(1) to Exchange Rule 

103B provides that when two NYSE 

listed companies merge, the post-merger 

listed company is assigned to the DMM 

in the company that is determined to be 

the survivor-in-fact (dominant 

company). Under Exchange policy, the 

determination of which company is the 

survivor-in-fact is based on which of the 

merging companies provides the chief 

executive officer and a majority of the 

board of directors of the post-merger 

listed company. The policy focuses on 

the CEO and the make-up of the board 

of the post-merger listed company rather 

than on any criteria based on the 

relative sizes of the pre-merger 

companies because the Exchange 

believes that the post-merger listed 

company’s CEO and board will have the 

relationship with the DMM going 

forward and should therefore be 

comfortable with the DMM allocated to 

the post-merger listed company. Under 

the Exchange policy, no survivor-in-fact 

will be found if one of the merging 

companies provides the CEO and the 

other merging company provides a 

majority or half of the board of the postmerger listed company. Where no 

survivor-in-fact can be identified, the 

post-merger listed company may select 

one of the units trading the merging 

companies without the security being 

referred for reallocation, or it may 

request that the matter be referred for 

allocation through the allocation 

process pursuant to Exchange Rule 

103B, Section III. In addition, Policy 

Note VI(D)(3) provides that in situations 

involving the merger of a listed 

company and an unlisted company, 

where the unlisted company is 

determined to be the survivor-in-fact, 

the post-merger listed company may 

choose to remain registered with the 

DMM unit that had traded the listed 

company entity in the merger, or it may 

request that the matter be referred for 

allocation through the allocation 

process pursuant to Exchange Rule 

103B.4

The Exchange believes that the 

decision as to how the stock of a postmerger listed company is allocated 

should be made solely by the postmerger listed company itself, rather than 

on the basis of which company is 

determined to be the survivor-in-fact in 

the merger. The Exchange believes that 

it is important that the CEO and board 

of the post-merger listed company are 

comfortable with its assigned DMM and 

that it therefore makes sense to give the 

post-merger listed company as much 

control as possible over the allocation 

decision. Consequently, the Exchange 

proposes to amend Policy Note VI(D)(1) 

and (3) to provide that in all listed 

company mergers, either between two 

listed companies or a listed company 

and an unlisted company, the 

management of the post-merger listed 

company will be able to choose to retain 

either of the incumbent DMMs (in the 

case of a merger between two listed 

companies) or the incumbent DMM (in 

the case of a merger between a listed 

company and an unlisted company) or 

request to have the security referred for 

reallocation. In no case will the policy 

dictate that a post-merger listed 

company must retain an incumbent 

DMM unless it chooses to do so. The 

Exchange notes that Section 806.01 of 

the NYSE Listed Company Manual 

provides that a listed company can 

request a change of DMM at any time 

and that giving post-merger listed 

companies control over the allocation 

decision in connection with a merger is 

consistent with that approach. The 

Exchange also notes that the proposed 

rule change would only affect a very 

small number of companies and their 

DMMs, as it would be applicable only 

in the case of a merger transaction 

where one of the two merging 

companies would otherwise be deemed 

the ‘‘survivor-in-fact’’ under Exchange 

policies. 

The Exchange notes that Policy Note 

VI(D)(1) and (3) both provide that DMM 

units that are ineligible to receive a new 

allocation due to their failure to meet 

the requirements of Exchange Rule 

103B, Section II(D) and (E) will remain 

eligible to be selected pursuant to Policy 

Note VI(D)(1) or (3), as applicable. The 

Exchange proposes to amend the 

language in each section to clarify that 

its intent is that in such cases the 

applicable DMM unit will be eligible to 

be selected in its capacity as the DMM 

for one of the two pre-merger listed 

companies (in the case of a merger 

between two listed companies) or in its 

capacity as DMM of the pre-merger 


jdjones on DSK8KYBLC1PROD with NOTICES
13252 Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Notices 

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

6 15 U.S.C. 78a. 

7 15 U.S.C. 78f(b)(5). 

8 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

listed company (in the case of a merger 

between a listed company and an 

unlisted company), but will not be 

eligible to participate in the allocation 

process if the post-merger company 

requests that the matter be referred for 

allocation through the allocation 

process pursuant to NYSE Rule 103B, 

Section III. In the event that such a 

situation were to arise, the Exchange 

would inform the listed company of 

such DMM unit’s ineligibility under 

Exchange Rule 103B, Section II(D) or 

(E). 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) 5 of the Securities Exchange 

Act of 1934 (the ‘‘Act’’),6 in general, and 

furthers the objectives of Section 6(b)(5) 

of the Act,7 in particular in that it is 

designed 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 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 the proposed 

amendments are consistent with Section 

6(b)(5) of the Act in that their sole 

purpose is to provide more control over 

the DMM allocation process to 

companies involved in mergers, all 

DMMs are subject to the same Exchange 

rules and oversight when conducting 

their DMM activities, and the proposed 

amendments are consistent with Section 

806.01 of the Listed Company Manual 

as previously approved by the 

Commission. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) Institute proceedings to determine 

whether the proposed rule change 

should be disapproved. 

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–NYSE–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–NYSE–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 website 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 

a.m. and 3 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–NYSE– 

2011–09 and should be submitted on or 

before March 31, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5516 Filed 3–9–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64038; File No. SR–ISE– 

2011–12] 

Self-Regulatory Organizations; 

International Securities Exchange, 

LLC; Notice of Filing and Immediate 

Effectiveness of Proposed Rule 

Change Relating to Access Fees for 

Foreign Currency Options 

March 4, 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 

23, 2011, the International Securities 

Exchange, LLC (the ‘‘Exchange’’ or the 

‘‘ISE’’) 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 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 ISE is proposing to terminate an 

access fee charged to foreign currency 

(‘‘FX’’) options market makers. The text 

of the proposed rule change is available 

on the Exchange’s website (http:// 

www.ise.com), at the principal office of 

the Exchange, on the Commission’s 

website at http://www.sec.gov, and at 

the Commission’s Public Reference 

Room. 


jdjones on DSK8KYBLC1PROD with NOTICES