Federal Register / Vol. 76, No. 3 / Wednesday, January 5, 2011 / Notices 609 

70 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. 

4The Exchange notes that parallel changes are 

proposed to be made to the rules of New York Stock 

Exchange LLC. See SR–NYSE–2010–84. 

5See Securities Exchange Act Release Nos. 59755 

(April 13, 2009), 74 FR 18009 (April 20, 2009) (SR– 

NYSEAltr–2009–15) (order granting approval of the 

Pilot); 60808 (October 9, 2009), 74 FR 53539 

(October 19, 2009) (SR–NYSEAmex–2009–70) 

(extending the operation of the Pilot to December 

31, 2009); 61265 (December 31, 2009), 75 FR 1094 

(January 8, 2010) (SR–NYSEAmex–2009–96) 

(extending the operation of the Pilot from December 

31, 2009 to March 1, 2010); 61611 (March 1, 2010), 

75 FR 10530 (March 8, 2010) (SR–NYSEAmex– 

2010–15) (extending the operation of the Pilot from 

March 1, 2010 to June 1, 2010); 62293 (June 15, 

2010), 75 FR 35862 (June 23, 2010) (SR– 

NYSEAmex–2010–50) (extending the operation of 

the Pilot from June 1, 2010 to December 1, 2010); 

and SR–NYSEAmex–2010–113 (filed November 30, 

2010) (extending the operation of the Pilot from 

December 1, 2010 to June 1, 2011). 

6 In addition, the Exchange proposes to make a 

technical change to the text of Rule 123C(9)(a)(1)(v). 

7See SR–NYSEAmex–2010–113 (filed November 

30, 2010) (extending the operation of the Pilot from 

December 1, 2010 to June 1, 2011). 

8Prior to implementation of this rule change, the 

Exchange will issue guidance in the form of an 

Information Memo that member organizations 

entering interest will be responsible for complying 

with Rule 123C(9)(a)(1)(iii). 

MSRB–2010–10), be, and it hereby is, 

approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.70

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33269 Filed 1–4–11; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–63613; File No. SR– 

NYSEAmex–2010–121] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Making Permanent NYSE 

Amex Equities Rule 123C(9)(a)(1) and 

Amending Rule 123C(9)(a)(1)(iii) 

December 29, 2010. 

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 December 

20, 2010, 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 make 

permanent NYSE Amex Equities Rule 

123C(9)(a)(1), which currently operates 

on a pilot basis. The Exchange also 

proposes to amend Rule 

123C(9)(a)(1)(iii) to eliminate the 

requirement that only Floor brokers can 

represent interest after 4 p.m. The text 

of the proposed rule change is available 

at the Exchange, the Commission’s 

Public Reference Room, 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 make 

permanent NYSE Amex Equities Rule 

123C(9)(a)(1),4 which has operated on a 

pilot basis and allows the Exchange to 

temporarily suspend certain rule 

requirements at the close when extreme 

order imbalances may cause significant 

dislocation to the closing price 

(‘‘Extreme Order Imbalances Pilot’’ or 

‘‘Pilot’’).5 The Pilot has recently been 

extended to June 1, 2011. In addition, in 

connection with proposing to make the 

rule permanent, the Exchange proposes 

to amend Rule 123C(9)(a)(1)(iii) to 

eliminate the requirement that only 

Floor brokers can represent interest after 

4:00 p.m. and to make technical 

amendments related to the obligations 

of member firms entering interest 

pursuant to Rule 123C(9)(a)(1).6

Background 

Pursuant to NYSE Amex Equities Rule 

123C(9)(a)(1), the Exchange may 

suspend NYSE Amex Equities Rule 52 

(Hours of Operation) to resolve an 

extreme order imbalance that may result 

in a price dislocation at the close as a 

result of an order entered into Exchange 

systems, or represented to a Designated 

Market Maker (‘‘DMM’’) orally at or near 

the close. NYSE Amex Equities Rule 

123C(9)(a)(1) was intended to be and 

has been invoked to attract offsetting 

interest in rare circumstances where 

there exists an extreme imbalance at the 

close such that a DMM is unable to 

close the security without significantly 

dislocating the price. 

As a condition of the approval to 

operate the Pilot, the Exchange 

committed to provide the Commission 

with information regarding: (i) How 

often an NYSE Amex Equities Rule 52 

temporary suspension pursuant to the 

Pilot was invoked during the six months 

following its approval; and (ii) the 

Exchange’s determination as to how to 

proceed with technical modifications to 

reconfigure Exchange systems to accept 

orders electronically after 4 p.m. As the 

Exchange has previously noted in filings 

with the Commission, the Pilot has been 

invoked only twice in NYSE Amexlisted securities.7

Proposal To Make Permanent the 

Operation of the Extreme Order 

Imbalance Rule 

The Exchange has completed and 

tested the system modifications 

necessary to accept orders electronically 

after 4 p.m. The Exchange therefore 

proposes to make Rule 123C(9)(a)(1), as 

amended, permanent beginning on 

January 3, 2011. 

Because the Exchange can now accept 

orders electronically after 4 p.m., the 

Exchange proposes to amend Rule 

123C(9)(a)(iii) to eliminate the 

restriction that only Floor brokers can 

represent offsetting interest in response 

to a solicitation of interest pursuant to 

the Rule. The Exchange further proposes 

to make technical changes to Rule 

123C(9)(a)(1)(iii) to identify what 

interest may be entered in response to 

a solicitation, i.e., it must be offsetting 

interest, a limit order priced no worse 

than the last sale, and irrevocable. 

Market participants sending in interest 

electronically in response to a 

solicitation after 4 p.m. are responsible 

for assuring compliance with all 

provisions of subsection (iii), including 

that such interest must be on the 

opposite side of the imbalance, must be 

limit priced no worse than the last sale, 

and must be irrevocable. Failure to 

abide by these requirements could 

subject a market participant to 

regulatory review and possible 

disciplinary action.8

The Exchange also proposes to amend 

Rule 123C(9)(a)(iv) to make clear that all 


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610 Federal Register / Vol. 76, No. 3 / Wednesday, January 5, 2011 / Notices 

9 15 U.S.C. 78f(b)(5). 

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

11 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires that a self-regulatory 

organization submit to 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 filing of the proposed rule change, or 

such shorter time as designated by the Commission. 

The Exchange has satisfied this requirement. 

12For purposes only of waiving the 30-day 

operative delay, 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). 

offsetting interest solicited pursuant to 

the Rule will be executed consistent 

with Rule 72(c), which governs the 

allocation of executions among market 

participants. 

2. Statutory Basis 

The basis under the Act for this 

proposed rule change is the requirement 

under Section 6(b)(5) 9 that an Exchange 

have rules that are designed to promote 

just and equitable principles of trade, 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 this filing is consistent with these 

principles because the proposed rule 

change will increase the ability of 

market participants to enter trading 

interest designed to prevent significant 

dislocation to closing prices that could 

result from extreme order imbalances. 

The Exchange further believes that this 

filing is consistent with these principles 

in that it expands the field of market 

participants that can directly enter 

interest in response to a solicitation of 

offsetting interest after 4 p.m. pursuant 

to Rule 123C(9)(a)(1). 

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 

Because the foregoing 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 for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

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

19b–4(f)(6)(iii) thereunder.11 The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposal may become operative 

immediately upon filing. 

The Exchange reports in connection 

with this proposal to make permanent 

Rule 123C(9)(a)(1) that it has completed 

testing of a functionality that would 

enable the electronic submission of 

orders after 4 p.m., and thus now 

proposes to remove the requirement that 

all interest entered after 4 p.m. in 

response to a DMM’s solicitation of 

interest to offset an extreme order 

imbalance must be represented by Floor 

brokers. The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because doing so would allow the 

benefits of the new systems 

modifications allowing all market 

participants to enter orders 

electronically (rather than solely 

through a Floor broker) during a Rule 

123C(9)(a)(1) suspended close to be 

realized immediately.12 Accordingly, 

the Commission waives the 30-day 

operative delay requirement and 

designates the proposed rule change 

operative upon filing with the 

Commission. 

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–2010–121 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–2010–121. 

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 

publicly available. All submissions 

should refer to File Number SR– 

NYSEAmex–2010–121 and should be 

submitted on or before January 26, 2011. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–33253 Filed 1–4–11; 8:45 am] 

BILLING CODE 8011–01–P 


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