80088 Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices 

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

11 17 CFR 240.19b–4(f)(1). 

12 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 59281 

(January 22, 2009), 74 FR 5014 (January 28, 2009) 

(order approving SR–NYSE–2008–120) (‘‘Approval 

Order’’). 

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 proposed rule change 

will take effect upon filing with the 

Commission pursuant to Section 

19(b)(3)(A)(i) of the Act 10 and Rule 19b– 

4(f)(1) thereunder,11 because it 

constitutes a stated policy, practice, or 

interpretation with respect to the 

meaning, administration, or 

enforcement of an existing rule. 

Specifically, the change proposed 

herein would reflect that Exchange 

systems enforce compliance with Rule 

123C(2) and (3) and therefore clarify 

that Exchange members and member 

organizations are not responsible for 

ensuring such compliance. 

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. 

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–2010–110 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–2010–110. 

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– 

NYSEAmex–2010–110 and should be 

submitted on or before January 11, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31926 Filed 12–20–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63545; File No. SR–NYSE– 

2010–82] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Extend for 

12 Months the Pilot Program 

Permitting the Exchange’s Ownership 

Interest in BIDS Holdings L.P. (BIDS) 

and the Affiliation of BIDS With the 

New York Block Exchange LLC 

December 14, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’)F 1F and Rule 19b–4 thereunder,2

notice is hereby given that, on December 

9, 2010, the 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 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 extend for 

an additional 12 months the January 22, 

2011 expiration date of the pilot 

program that provides an exception to 

NYSE Rule 2B by permitting the 

Exchange’s equity ownership interest in 

BIDS Holdings L.P. (‘‘BIDS’’), which is 

the parent company of a member of the 

Exchange, and BIDS’s affiliation with 

the New York Block Exchange LLC, an 

affiliate of the Exchange. There is no 

proposed rule text. 

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 January 22, 2009, the Commission 

approved the governance structure 

proposed by the Exchange with respect 

to the New York Block Exchange 

(‘‘NYBX’’), a new electronic trading 

facility of the Exchange for NYSE-listed 

securities that was established by means 

of a joint venture between the Exchange 

and BIDS.3 The governance structure 

that was approved is reflected in the 

Limited Liability Company Agreement 

of New York Block Exchange LLC (the 

‘‘Company’’), the entity that owns and 

operates NYBX. Under the governance 

structure approved by the Commission, 

the Exchange and BIDS each own a 50% 

economic interest in the Company. In 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices 80089 

4NYSE Rule 2B provides, in relevant part, that: 

‘‘[w]ithout prior SEC approval, the Exchange or any 

entity with which it is affiliated shall not, directly 

or indirectly, acquire or maintain an ownership 

interest in a member organization. In addition, a 

member organization shall not be or become an 

affiliate of the Exchange, or an affiliate of any 

affiliate of the Exchange.* * * The term affiliate 

shall have the meaning specified in Rule 12b–2 

under the Act.’’ 

5Specifically, the Company is an affiliate of the 

Exchange, and BIDS Trading is an affiliate of the 

Company based on their common control by BIDS. 

The affiliation in each case is the result of the 50% 

ownership interest in the Company by each of the 

Exchange and BIDS. 

6See Approval Order, 74 FR at 5018. 

7 Id. at 5019. 

8See Securities Exchange Act Release No. 61409 

(January 22, 2010), 75 FR 4889 (January 29, 2010) 

(File No. SR–NYSE–2010–04). 

9Another condition for the exception to NYSE 

Rule 2B specified in the Approval Order was that 

the Exchange’s equity interest in BIDS must remain 

less than 9%, absent prior Commission approval of 

any increase. See id. at 5018. Subsequently, the 

Commission approved a proposal by the Exchange 

to slightly increase the ceiling on its equity 

ownership in BIDS to less than 10%, and that will 

be the applicable limitation during the extension of 

the pilot period. See Securities Exchange Act 

Release No. 61257 (December 30, 2009), 75 FR 500 

(January 5, 2010) (order approving SR–NYSE–2009– 

116). 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78. 

12 15 U.S.C. 78f(b)(1). 

13 15 U.S.C. 78f(b)(5). 

14See Approval Order, 74 FR at 5018–5019. 

15 Id. at 5018. 

16 Id. at 5019. 

addition, the Exchange, through its 

wholly-owned subsidiary NYSE Market, 

Inc., owns less than 10% of the 

aggregate limited partnership interest in 

BIDS. BIDS is the parent company of 

BIDS Trading, L.P. (‘‘BIDS Trading’’), 

which became a member of the 

Exchange in connection with the 

establishment of NYBX. 

The foregoing ownership 

arrangements would violate NYSE Rule 

2B without an exception from the 

Commission.4 First, the Exchange’s 

indirect ownership interest in BIDS 

Trading violates the prohibition in Rule 

2B against the Exchange maintaining an 

ownership interest in a member 

organization. Second, BIDS Trading is 

an affiliate of an affiliate of the 

Exchange,5 which violates the 

prohibition in Rule 2B against a member 

of the Exchange having such status. 

Consequently, in the Approval Order, 

the Commission permitted an exception 

to these two potential violations of 

NYSE Rule 2B, subject to a number of 

limitations and conditions. One of the 

conditions for Commission approval 

was that the proposed exception from 

NYSE Rule 2B to permit NYSE’s 

indirect ownership/interest in BIDS 

Trading and BIDS Trading’s affiliation 

with the Company (which is an affiliate 

of NYSE) would be for a pilot period of 

12 months.6

In discussing the pilot basis of the 

exception to NYSE Rule 2B, the 

Approval Order noted that the pilot 

period ‘‘will provide NYSE and the 

Commission an opportunity to assess 

whether there might be any adverse 

consequences of the exception and 

whether a permanent exception is 

warranted.’’ 7 The original 12-month 

pilot period expired on January 22, 2010 

and was extended for an additional 12 

months to January 22, 2011 by a rule 

filing made by the Exchange on January 

11, 2010 and noticed in a release by the 

Commission dated January 22, 2010.8

While the Exchange believes that the 

experience to date operating under the 

exception to Rule 2B fully justifies 

making the exception permanent, the 

Exchange now seeks to extend the 

ending date for the pilot program for 

another 12 months to January 22, 2012 

to allow additional time, if necessary, 

for the Commission to obtain and 

review the information it needs in order 

to make its determination regarding any 

adverse consequences of the exception 

and whether a permanent exception is 

warranted. During the proposed 

extension of the pilot program period, 

the Exchange’s current indirect 

ownership interest in BIDS Trading 9

and BIDS Trading’s affiliation with the 

Company would continue to be 

permitted. 

If the Commission should determine 

prior to the end of the extended pilot 

period that a permanent exception to 

NYSE Rule 2B is warranted, the 

Exchange would have the option of 

submitting a proposed rule change to 

accomplish this and simultaneously 

terminate the pilot program. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) 10 of the Act,11 in general, 

and furthers the objectives of Section 

6(b)(1) 12 of the Act, which requires a 

national securities exchange to be so 

organized and have the capacity to carry 

out the purposes of the Act and to 

comply, and to enforce compliance by 

its members and persons associated 

with its members, with the provisions of 

the Act. The Exchange further believes 

that the proposed rule change is also 

consistent with, and furthers the 

objectives of, Section 6(b)(5) 13 of the 

Act, in that 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 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. 

In the Approval Order, the 

Commission determined that the 

proposed exception from NYSE Rule 2B 

to permit NYSE’s indirect ownership 

interest in BIDS Trading and BIDS 

Trading’s affiliation with the Company 

was consistent with the Act, including 

Section 6(b)(5) thereof.14 As the basis for 

its determination, the Commission cited 

the specific limitations and conditions 

listed in the Approval Order to which 

its approval of the exception to NYSE 

Rule 2B was subject,15 stating: ‘‘These 

conditions appear reasonably designed 

to mitigate concerns about potential 

conflicts of interest and unfair 

competitive advantage. * * * These 

conditions appear reasonably designed 

to promote robust and independent 

regulation of BIDS. * * * The 

Commission believes that, taken 

together, these conditions are 

reasonably designed to mitigate 

potential conflicts between the 

Exchange’s commercial interest in BIDS 

and its regulatory responsibilities with 

respect to BIDS.’’ 16 Because these same 

limitations and conditions will continue 

to be applicable during the additional 

extension of the pilot period, other than 

the ending date of the pilot period and 

the aforementioned small increase in 

the ceiling on the Exchange’s equity 

interest in BIDS, the Exchange believes 

that the exception from NYSE Rule 2B 

described above will continue to be 

consistent with the Act during that 

extension. 

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 foregoing proposal has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act and Rule 19b–4(f)(6) 

thereunder because it does not: (i) 

Significantly affect the protection of 


srobinson on DSKHWCL6B1PROD with NOTICES
80090 Federal Register / Vol. 75, No. 244 / Tuesday, December 21, 2010 / Notices 

17 In addition, Rule 19b–4(f)(6) requires the 

Exchange to give the Commission written notice of 

its 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 satisfied this requirement. 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78f. 

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

investors or the public interest; (ii) 

impose any significant burden on 

competition; and (iii) 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

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. 

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–2010–82 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–2010–82. 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–NYSE– 

2010–82 and should be submitted on or 

before January 11, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority. 18

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–31931 Filed 12–20–10; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63553; File No. SR– 

NYSEAmex–2010–119] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NYSE 

Amex LLC To Establish Royalty Fees 

for Non-Customer Executions in 

Options Based on the KBW Bank Index 

December 15, 2010. 

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 December 

10, 2010, NYSE Amex LLC. (‘‘NYSE 

Amex’’ 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 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 establish 

royalty fees for non-Customer 

executions in options based on the KBW 

Bank Index, symbol BKX. The text of 

the proposed rule change is available on 

the Exchange’s Web site at http:// 

www.nyse.com, at the Exchange’s 

principal office, on the Commission’s 

Web site at http://www.sec.gov, 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 

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 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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Schedule of Fees and Charges (‘‘Fee 

Schedule’’) to implement new royalty 

fees of $0.10 per contract associated 

with executions in options based on the 

KBW Bank Index (BKX). The fees are 

intended to be effective on Monday, 

December 13, 2010 when the Exchange 

expects to commence trading of these 

options. The Exchange has entered into 

a licensing agreement with Keefe, 

Bruyette & Woods, Inc. (‘‘KBW’’), the 

firm that created and maintains the 

index, and will pay a fee to KBW on 

every contract traded on the Exchange. 

As with other royalty fees charged by 

the Exchange, these fees reflect the passthrough charges associated with the 

licensing of this product. The Exchange 

notes that royalty fees do not apply to 

public Customer orders in these 

products. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,3

in general, and Section 6(b)(4) of the 

Act,4 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. The proposed 

changes to the Fee Schedule are 

equitable in that they apply uniformly 


srobinson on DSKHWCL6B1PROD with NOTICES