Federal Register / Vol. 76, No. 47 / Thursday, March 10, 2011 / Notices 13249 

11 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

12 15 U.S.C. 78o–3(b)(5). 

13 15 U.S.C. 78s(b)(2). 

14 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. 

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. 

III. Discussion and Commission’s 

Findings 

After carefully reviewing the 

proposed rule change, the Commission 

finds that the proposal is consistent 

with the requirements of the Act and the 

rules and regulations thereunder 

applicable to a national securities 

association.11 In particular, the 

Commission finds that the proposal is 

consistent with Section 15A(b)(5) of the 

Act,12 which requires that a national 

securities association have rules that 

provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and other persons 

using any facility or system that the 

association operates or controls. The 

Commission believes that the proposal 

is reasonably designed to impose 

equitable fees on members that transact 

in Asset-Backed Securities, where the 

principal value of the securities may 

decline over time. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,13 that the 

proposed rule change (SR–FINRA– 

2011–004), be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–5518 Filed 3–9–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64040; File No. SR– 

NYSEAmex–2011–11] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing of 

Proposed Rule Change Amending Rule 

103B—NYSE Amex Equities To Modify 

the Application of the Exchange’s 

Designated Market Maker 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, 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 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 

Rule 103B—NYSE Amex Equities 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 Rule 103B— 

NYSE Amex Equities provides that 

when two NYSE Amex listed companies 

merge, the post-merger listed company 

is assigned to the DMM in the company 

that is determined to be the survivor-infact (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 Rule 103B—NYSE 

Amex Equities, 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 Rule 103B—NYSE 

Amex Equities.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 


jdjones on DSK8KYBLC1PROD with NOTICES
13250 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). 

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 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 Rule 103B—NYSE 

Amex Equities, 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 

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 Rule 103B—NYSE 

Amex Equities, 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 Rule 103B—NYSE 

Amex Equities, 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 and all 

DMMs are subject to the same Exchange 

rules and oversight when conducting 

their DMM activities. 

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–NYSEAmex–2011–11 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–2011–11. 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, 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– 

NYSEAmex–2011–11 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. 2011–5517 Filed 3–9–11; 8:45 am] 

BILLING CODE 8011–01–P 


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