20396 Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Notices 

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 Commission 

notes that the Exchange has satisfied this 

requirement. 

10 17 CFR 240.19b–4(f)(6)(iii). 11 Id. 12For the purposes only of waiving the operative 

delay of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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.10 However, Rule 19b– 

4(f)(6) 11 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. 

The Commission has considered the 

Exchange’s request to waive the 30-day 

operative delay. The Commission 

believes that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest, as it will allow the pilot 

program to continue uninterrupted, 

thereby avoiding the investor confusion 

that could result from a temporary 

interruption in the pilot program.12 For 

this reason, the Commission designates 

the proposed rule change to be operative 

upon filing. 

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. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

change should be approved or 

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, as amended, 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–EDGA–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–EDGA–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 offices 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–EDGA–2011–11, and 

should be submitted on or before May 

3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8624 Filed 4–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64216; File No. SR– 

NYSEArca–2011–16] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Modifying Credits for 

Posting Liquidity for Certain 

Transactions and Imposing Routing 

Fees To Defray the Costs of Routing 

Orders to Away Markets 

April 6, 2011. 

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 April 1, 

2011, NYSE Arca, Inc. (‘‘NYSE Arca’’ or 

the ‘‘Exchange’’) 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 Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to modify 

credits for posting liquidity for certain 

transactions and impose routing fees to 

defray the costs of routing orders to 

away markets. The text of the proposed 

rule change is available at the Exchange, 

at 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. 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Notices 20397 

3 363 issues have been approved to trade in a 

minimum price variation of $0.01 as part of a Pilot 

Program (‘‘Penny Pilot’’) in accordance with NYSE 

Arca Rule 6.72. 

4See Phlx Price List, ‘‘Make/Take Pricing 

Program’’ at (http://www.nasdaqtrader.com/ 

Micro.aspx?id=PHLXPricing). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NYSE Arca proposes to modify its 

credits for posting liquidity in Penny 

Pilot issues.3 The Exchange also 

proposes to replace certain premium 

credits in high volume issues and 

volume tier pricing incentives for 

Customers and Market Makers in Penny 

Pilot issues with a Customer Monthly 

Posting Threshold structure in Penny 

Pilot issues that will provide increased 

credits in certain circumstances. In 

addition, the Exchange is proposing a 

routing fee and is also eliminating 

certain references to products that are 

no longer traded on the Exchange. 

Changes to Post Liquidity Credits 

Electronic transactions in Penny Pilot 

issues are assessed Take Liquidity fees 

and credited with Post Liquidity credits. 

The Exchange proposes to increase the 

Post Liquidity credit for Lead Market 

Makers and Market Makers from $0.30 

per contract to $0.32 per contract. The 

Exchange proposes to reduce the Post 

Liquidity credit for Firm and Broker 

Dealer Electronic orders from $0.25 per 

contract to $0.10 per contract to reflect 

the fact that attempts to attract Firm and 

Broker Dealer liquidity with higher 

posting credits have not proved fruitful 

because based on our observations, such 

entities are proprietary traders who seek 

opportunities and venues to trade 

against Customer order flow to capture 

the spread rather than trade based on 

rebates and fees. 

Lead Market Makers and Market 

Makers pay significantly higher OTP 

fees than OTP Holders that are Firm 

proprietary traders, while Broker 

Dealers that are not OTP Holders pay no 

OTP fee. The proposed difference in 

Posting Credits between these categories 

is intended to partially offset the 

difference in OTP costs. Additionally, 

Market Makers and Lead Market Makers 

have an affirmative continuous quoting 

obligation that does not apply to Firms 

and Broker Dealers. This obligation 

imposes greater costs and potentially 

greater risks on Market Makers and Lead 

Market Makers than the costs and risks 

realized by Firms and Broker Dealers, 

and Market Makers and Lead Market 

Makers should thus be rewarded with a 

greater posting credit. The proposed 

differential is less than that found on 

NASDAQ OMX PHLX (‘‘Phlx’’), a 

competing market, which provides an 

‘‘adding liquidity rebate’’ of $0.23 for 

market makers and $0.00 for Firms and 

Broker-Dealers, while charging an 

‘‘adding liquidity fee’’ of $0.00 for 

Market Makers, but $0.05 for Firms and 

Broker Dealers. The differential on Phlx 

between the two classifications of 

market participants is $0.28, while 

NYSE Arca proposes a differential of 

$0.22.4

The Exchange proposes to eliminate 

the ‘‘Premium Tier’’ of issues which 

received an additional $0.05 per 

contract Post Liquidity credit above the 

stated Post Liquidity rates. The 

Premium Tier distinction did not have 

the intended effect of increasing market 

share in these products, and the 

Exchange proposes a more streamlined 

fee schedule. 

In addition, the Exchange proposes to 

increase the Post Liquidity credit above 

the base Customer Post Liquidity credit 

of $0.25 per contract for OTP Holders 

that aggregate Customer orders that meet 

certain volume thresholds in Penny 

Pilot issues. An OTP Holder sending 

Customer orders that in the aggregate 

exceed 500,000 contracts executed in a 

month from posting liquidity will 

receive a posting credit of $0.32 per 

contract on all executions resulting from 

posted liquidity. If such aggregated 

Customer orders exceed 800,000 

contracts executed in a month from 

posting liquidity, the OTP Holder will 

receive a posting credit of $0.34 per 

contract on all executions resulting from 

posted liquidity. If such aggregated 

Customer orders exceed 1,200,000 

contracts executed in a month from 

posting liquidity, the OTP Holder will 

receive a posting credit of $0.38 per 

contract on all executions resulting from 

posted liquidity. The volume thresholds 

are intended to incentivize firms that 

route some Customer orders to the 

Exchange to increase the number of 

orders that are posted to achieve the 

next threshold. Increasing the number of 

orders posted on the Exchange will in 

turn provide tighter and more liquid 

markets, and therefore attract more 

business overall. 

It is possible for an OTP Holder 

routing Customer orders to the 

Exchange to reach a threshold that 

provides for a greater posting credit than 

that of a Market Maker or Lead Market 

Maker. Market Makers and Lead Market 

Makers incorporate Post Liquidity 

credits into their models for quote 

calculations based on their overhead 

costs and prefer to have a single credit 

apply across all similar transactions. 

OTP Holders who aggregate Customer 

business are subject to the relative level 

of activity of the industry, and thus may 

not have enough business in a particular 

month to meet a volume threshold. To 

the extent that Market Makers have an 

obligation to be present on the 

Exchange, but Customer order flow may 

be directed anywhere, the Exchange 

wishes to incentivize the directing of 

Customer order flow to NYSE Arca. As 

indicated above, Firms and Broker 

Dealers are proprietary traders that seek 

to trade with Customer order flow to 

capture the spread rather than trade 

based on rebates and fees. We have 

found over time that the higher Post 

Liquidity credit for such entities has not 

caused them to post more liquidity on 

the Exchange. To incentivize such 

entities to send order flow to the 

Exchange, we have determined to 

increase the incentive to send Customer 

order flow to the Exchange, which in 

turn is designed to attract more trading 

interest from such entities to trade with 

that Customer order flow, and enhance 

trading opportunities for all market 

participants. 

The Exchange proposes to eliminate 

the ‘‘Tiered Pricing For Penny Pilot 

Issues,’’ which provided escalating Take 

Discounts for Customer executions in 

certain volume ranges, and provided 

additional Post Credits for Market 

Maker executions in certain volume 

ranges. The Take Discounts for 

Customers did not encourage more 

business, because Customers generally 

only take liquidity if there is no charge, 

or if there is liquidity at the NBBO that 

does not have a fee. Because of this, 

there is no structural incentive to 

increase the amount of liquidity-taking 

order flow since the Take Discounts 

only eliminate a portion of the fee. The 

Penny Pilot Tiered Pricing, which 

provided increased posting credits for 

Market Makers with volume in certain 

tiers, was problematic in that Market 

Makers, as stated above, could not build 

the potential credit into their overhead 

models for quote calculations. Market 

Makers preferred a definite credit for the 

first contract rather than those over 

1,000,000. 

The Exchange believes the 

adjustments to the Post Liquidity credits 

will encourage Market Makers and 

Customers to post liquidity in Penny 

Pilot issues on NYSE Arca, thereby 

providing reduced market spreads 

overall and increasing available 

liquidity on the Exchange. 

Routing Fees 

In order to defray costs associated 

with non-Penny Pilot executions, the 


srobinson on DSKHWCL6B1PROD with NOTICES
20398 Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Notices 

5 15 U.S.C. 78f. 

6 15 U.S.C. 78f(b)(4). 

7See (http://www.nasdaqtrader.com/ 

Micro.aspx?id=OptionsPricing). NOM provides a 

rebate of $0.36 per contract for customers adding 

liquidity. 8 Id. NOM provides a rebate of $0.10 per contract 

for firms adding liquidity. In addition, we note that 

in July 2010, NASDAQ decreased its rebate for 

firms adding liquidity from $0.25 to $0.10 per 

contract. See Exchange Act Release No. 62543 (July 

21, 2010), 75 FR 44037 (July 27, 2010). 

9See supra note 7. 

Exchange is proposing a routing 

surcharge of $0.11 per contract for 

orders that are routed and executed at 

away market centers pursuant to order 

protection requirements of the Options 

Order Protection and Locked/Crossed 

Market Plan. In addition, the Exchange 

proposes to pass through any 

transaction fees charged by the 

destination exchange on executions of 

routed orders. This is a new fee for 

NYSE Arca options intended to offset 

the costs and fees of routing orders for 

execution in non-Penny Pilot issues. 

NYSE Arca pays a fee to its routing 

brokers, and in turn pays clearing fees 

to OCC to clear routed orders. At this 

time the fee is to be charged only to 

non-Penny Pilot issues, as orders in 

Penny Pilot issues which are routed are 

charged a take liquidity fee that offsets 

the cost of routing. 

Firms may avoid routing charges by 

either routing orders themselves directly 

to the away market that is at the NBBO, 

or by use of various order types on 

NYSE Arca which carry an instruction 

to not route the order. 

Deletion of Obsolete Reference 

The Exchange is also proposing to 

delete references to Foreign Currency 

Options in the Transaction Fee schedule 

and in endnote 6, as Foreign Currency 

Options are no longer listed on the 

Exchange. 

The proposed changes will be 

effective on April 1, 2011. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),5 in general, and Section 6(b)(4) 

of the Act,6 in particular, in that it is 

designed to provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

other persons using its facilities. In 

addition, the Exchange believes that the 

proposed rule change is consistent with 

Section 6(b)(5) of the Exchange Act in 

that it is not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The proposed changes to the fee 

schedule are equitable and reasonable in 

that they apply uniformly to all 

similarly situated market participants, 

are within the range of fees assessed by 

other exchanges employing similar 

pricing schemes, and are designed to 

increase liquidity at the Exchange. In 

particular, the proposed increase in the 

Post Liquidity credit from $0.30 to $0.32 

per contract for Lead Market Makers and 

Market Makers is equitable and 

reasonable because it is within the range 

of a rebate paid on the NASDAQ 

Options Market (‘‘NOM’’).7 Moreover, 

the Exchange is seeking to provide an 

additional incentive for Lead Market 

Makers and Market Makers to post 

liquidity on the Exchange. In addition, 

the proposed decrease in the Post 

Liquidity credit from $0.25 to $0.10 per 

contract for Firms and Broker Dealers is 

reasonable because it is consistent with 

a rebate paid on NOM and a similar 

decrease NOM imposed in July 2010.8

Further, as discussed above, the 

Exchange has observed that such 

entities are proprietary traders that seek 

to trade against Customer order flow to 

capture the spread rather than trade 

based on rebates and fees. 

The proposed differential in the Post 

Liquidity credits between the (1) Lead 

Market Maker/Market Maker, and 

(2) Firm/Broker Dealer Electronic 

categories, is equitable and not unfairly 

discriminatory in that it is intended to 

partially offset the significantly higher 

OTP fees paid by Lead Market Makers 

and Market Makers. Further, this 

differential is also equitable and not 

unfairly discriminatory in that it 

provides additional compensation for 

the affirmative continuous quoting 

obligation that Lead Market Makers and 

Market Makers have, but which does not 

apply to Firms and Broker Dealers. In 

addition, as noted above, the proposed 

differential will still be less than the 

equivalent differential at the Phlx, a 

competing market. 

Similarly, the proposed increase in 

Post Liquidity credits for OTP Holders 

that aggregate Customer orders that meet 

certain volume thresholds in Penny 

Pilot issues is equitable and reasonable 

in that it applies uniformly to all 

similarly situated OTP Holders that 

direct Customer orders to the Exchange 

and is very similar to rebates paid on 

NOM.9 The fact that an OTP Holder 

routing Customer orders to the 

Exchange may reach a threshold that 

provides for a greater posting credit than 

that of a Market Maker or Lead Market 

Maker is not inequitable or unfairly 

discriminatory because (1) Market 

Makers and Lead Market Makers prefer 

a fixed credit not dependent on volume 

for purposes of their models for quote 

calculations based on their overhead 

costs, and (2) the higher posting credits 

for the top two threshold levels (which 

would exceed the posting credit 

applicable to Market Makers and Lead 

Market Makers) is subject to the overall 

level of market activity and may not be 

reached in any given month. Moreover, 

the difference between (1) the Post 

Liquidity credits received by OTP 

Holders that aggregate Customer orders, 

and (2) the Post Liquidity credit 

received by Firms and Broker Dealers, is 

not inequitable or unfairly 

discriminatory because the Exchange 

believes that it has structured its fee 

schedule in a manner to attract order 

flow from all such entities. In this 

regard, the Exchange has found that the 

higher Post Liquidity credit for Firms 

and Broker Dealers has not caused them 

to send additional order flow to the 

Exchange. Based on its observations, the 

Exchange believes that such entities 

focus on the ability to trade with 

Customer order flow to capture the 

spread rather than on rebates and fees. 

Accordingly, the Exchange is proposing 

to increase the Post Liquidity credits for 

Customer order flow to attract such 

order flow to the Exchange. With the 

anticipated increase in such order flow 

to the Exchange, the Exchange expects 

to attract additional order flow from 

Firms and Broker Dealers to trade with 

such order flow. 

The imposition of routing fees in nonPenny Pilot issues is reasonable in that 

it is intended to defray the significant 

cost of routing orders, and these charges 

may be avoided by direct routing of an 

order to the away market that is at the 

NBBO or by the use of do-not-route 

order types on NYSE Arca. The routing 

fees are equitable and not unfairly 

discriminatory in that they are applied 

in an identical manner to all market 

participants with similarly situated 

orders. 

Overall, the proposed changes to the 

fee schedule are structured to increase 

incentives for posting liquidity in Penny 

Pilot names so that the overall market is 

more competitive and spreads are 

tighter. 

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. 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Notices 20399 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(2). 

12 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. 

4See Securities Exchange Act Release No. 62886 

(September 10, 2010), 75 FR 56613 (September 16, 

2010) (SR–NYSEArca–2010–58). See also Securities 

Exchange Act Release No. 63482 (December 9, 

2010), 75 FR 78331 (December 15, 2010) (SR– 

NYSEArca–2010–113). 

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 is effective 

upon filing pursuant to Section 

19(b)(3)(A) 10 of the Act and 

subparagraph (f)(2) of Rule 19b–4 11

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

NYSE Arca. 

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–NYSEArca–2011–16 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–NYSEArca–2011–16. 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 the 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– 

NYSEArca–2011–16 and should be 

submitted on or before May 3, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Cathy H. Ahn, 

Deputy Secretary. 

[FR Doc. 2011–8732 Filed 4–11–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–64234; File No. SR– 

NYSEArca–2011–15] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Rule 7.10, Clearly Erroneous 

Executions, To Extend the Effective 

Date of the Pilot Until the Earlier of 

August 11, 2011 or the Date on Which 

a Limit Up/Limit Down Mechanism To 

Address Extraordinary Market 

Volatility, if Adopted, Applies 

April 7, 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 March 

31, 2011, NYSE Arca, Inc. (the 

‘‘Exchange’’ or ‘‘NYSE Arca’’) filed with 

the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by the self-regulatory 

organization. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

NYSE Arca Rule 7.10, which governs 

clearly erroneous executions, to extend 

the effective date of the pilot by which 

portions of such Rule operate until the 

earlier of August 11, 2011 or the date on 

which a limit up/limit down 

mechanism to address extraordinary 

market volatility, if adopted, applies. 

The pilot is currently scheduled to 

expire on April 11, 2011. The text of the 

proposed rule change is available at the 

Exchange, the Commission’s Public 

Reference Room, 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 

The Exchange proposes to amend 

NYSE Arca Equities Rule 7.10, which 

governs clearly erroneous executions, to 

extend the effective date of the pilot by 

which portions of such Rule operate, 

until the earlier of August 11, 2011 or 

the date on which a limit up/limit down 

mechanism to address extraordinary 

market volatility, if adopted, applies. 

The pilot is currently scheduled to 

expire on April 11, 2011.4

On September 10, 2010, the 

Commission approved, on a pilot basis, 

market-wide amendments to exchanges’ 

rules for clearly erroneous executions to 

set forth clearer standards and curtail 

discretion with respect to breaking 


srobinson on DSKHWCL6B1PROD with NOTICES