51628 Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices 

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

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 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the Act 6

in general and furthers the objectives of 

Section 6(b)(5) of the Act 7 in particular 

in that it should promote just and 

equitable principles of trade, serve to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and 

protect investors and the public interest. 

The proposed rule change will help 

generate greater complex order flow for 

the Exchange and provide additional 

incentives for Market-Makers to trade 

with that order flow, which in turn adds 

depth and liquidity to CBOE’s markets. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition 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 35 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 Exchange consents, 

the Commission will: 

(A) By order approve such 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–CBOE–2009–070 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–CBOE–2009–070. 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 inspection and copying 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 CBOE. 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–CBOE–2009–070 and 

should be submitted on or before 

October 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.8

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24078 Filed 10–6–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60756; File No. SR–NYSE– 

2009–100] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by New York 

Stock Exchange LLC Extending the 

Operation of Its New Market Model 

Pilot and Supplemental Liquidity 

Providers Pilot, Until the Earlier of 

Securities and Exchange Commission 

Approval to Make Such Pilots 

Permanent or November 30, 2009 

October 1, 2009. 

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 

September 30, 2009, 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 extend the 

operation of its New Market Model Pilot 

and Supplemental Liquidity Providers 

Pilot, until the earlier of Securities and 

Exchange Commission approval to make 

such pilots permanent or November 30, 

2009. The text of the proposed rule 

change is available at the Exchange, the 

Commission’s Public Reference Room, 

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. 


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Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices 51629 

4See Securities Exchange Act Release No. 58845 

(October 24, 2008), 73 FR 64379 (October 29, 2008) 

(SR–NYSE–2008–46). 

5See Securities Exchange Act Release No. 58877 

(October 29, 2008), 73 FR 65904 (November 5, 2008) 

(SR–NYSE–2008–108) (establishing the SLP Pilot). 

See also Securities Exchange Act Release No. 59869 

(May 6, 2009), 74 FR 22796 (May 14, 2009) (SR– 

NYSE–2009–46) (extending the operation of the 

SLP Pilot to October 1, 2009). 

6See SR–NYSE Amex-2009–65. 

7The information contained herein is a summary 

of the NMM Pilot and the SLP Pilot, for a fuller 

description of those pilots see supra notes 4 and 5. 

8See NYSE Rule 103. 

9See NYSE Rules 104. 

10See NYSE Rule 60; see also NYSE Rules 104 

and 1000. 

11See NYSE Rule 1000. 12The Display Book® system is an order 

management and execution facility. The Display 

Book system receives and displays orders to the 

DMMs, contains the order information, and 

provides a mechanism to execute and report 

transactions and publish the results to the 

Consolidated Tape. The Display Book system is 

connected to a number of other Exchange systems 

for the purposes of comparison, surveillance, and 

reporting information to customers and other 

market data and national market systems. 13See NYSE Rule 72(a)(ii). 14See NYSE Rule 107B. 15See NYSE Rule 107B Section (f) and NYSE Rule 

107B Section (i)(1)(C)(iii). 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to extend the 

operation of its New Market Model 

Pilot 4 (‘‘NMM Pilot’’) and Supplemental 

Liquidity Providers Pilot 5 (‘‘SLP Pilot’’) 

approved by the Securities and 

Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) to operate until October 

1, 2009, until the earlier of Securities 

and Exchange Commission approval to 

make such pilots permanent or 

November 30, 2009. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of the NYSE Amex LLC.6

Background 7

In October 2008, the NYSE 

implemented significant changes to its 

market rules, execution technology and 

the rights and obligations of its market 

participants all of which were designed 

to improve execution quality on the 

Exchange. These changes are all 

elements of the Exchange’s enhanced 

market model. These changes were 

implemented through pilots. 

As part of the NMM Pilot, NYSE 

eliminated the function of specialists on 

the Exchange creating a new category of 

market participant, the Designated 

Market Maker or DMM.8 The DMMs, 

like specialists, have affirmative 

obligations to make an orderly market, 

including continuous quoting 

requirements and obligations to re-enter 

the market when reaching across to 

execute against trading interest. Unlike 

specialists, DMMs have a minimum 

quoting requirement 9 in their assigned 

securities and no longer have a negative 

obligation. DMMs are also no longer 

agents for public customer orders.10

In addition, the Exchange 

implemented a system change that 

allowed DMMs to create a schedule of 

additional non-displayed liquidity at 

various price points where the DMM is 

willing to interact with interest and 

provide price improvement to orders in 

the Exchange’s system. This schedule is 

known as the DMM Capital 

Commitment Schedule (‘‘CCS’’).11 CCS 

provides the Display Book ® 12 with the 

amount of shares that the DMM is 

willing to trade at price points outside, 

at and inside the Exchange BBO. CCS 

interest is separate and distinct from 

other DMM interest in that it serves as 

the interest of last resort. 

The NMM Pilot further modified the 

logic for allocating executed shares 

among market participants having 

trading interest at a price point upon 

execution of incoming orders. The 

modified logic rewards displayed orders 

that establish the Exchange’s best bid or 

Exchange’s best offer. During the 

operation of the NMM Pilot orders or 

portions thereof that establish priority 13

retain that priority until the portion of 

the order that established priority is 

exhausted. Where no one order has 

established priority, shares are 

distributed among all market 

participants on parity. 

Separately, the NYSE established a 

pilot of SLPs. Through the operation of 

the SLP Pilot, NYSE also established 

SLPs as a new class of market 

participants to supplement the liquidity 

provided by DMMs.14 Unlike DMMs, 

SLPs do not have affirmative 

obligations; may only enter orders 

electronically from off the Floor of the 

Exchange, and may only enter such 

orders directly into Exchange systems 

and facilities designated for this 

purpose. Similar to DMMs, SLPs have 

quoting requirements,15 may only enter 

orders for their proprietary account of 

the SLP member organization and may 

not handle orders from public 

customers or otherwise act on an agency 

basis in their capacity as an SLP. 

A member organization that acts as an 

SLP is not permitted to act as a DMM 

on the Floor of the Exchange in the 

same security. Thus, a member 

organization that acts as a DMM on the 

Floor may not also act as an SLP in 

those securities registered to the DMM 

unit. 

The NMM Pilot and the SLP Pilot are 

scheduled to end operation on October 

1, 2009 or such earlier time as the 

Commission may determine to make the 

rules permanent. The Exchange is 

currently preparing a rule filing seeking 

permission to make the above described 

changes permanent but does not expect 

that filing to be completed and 

approved by the Commission before 

October 1, 2009. 

Proposal To Extend the Operation of the 

NMM Pilot and SLP Pilot 

The NYSE established both the NMM 

Pilot and the SLP Pilot to provide 

incentives for quoting, to enhance 

competition among the existing group of 

liquidity providers and add new 

competitive market participants. The 

Exchange believes that both the NMM 

Pilot and the SLP Pilot allow the 

Exchange to provide its market 

participants with a trading venue that 

utilizes an enhanced market structure to 

encourage the addition of liquidity, 

facilitate the trading of larger orders 

more efficiently and operates to reward 

aggressive liquidity providers. As such, 

the Exchange believes that the rules 

governing the NMM Pilot and the SLP 

Pilot should be made permanent. 

Through this filing the Exchange seeks 

to extend the current operation of the 

NMM Pilot and the SLP Pilot until 

November 30, 2009, in order to allow 

the Exchange to formally submit a filing 

to the Commission to convert the pilot 

rules to permanent rules. 

2. Statutory Basis 

The basis under the Securities 

Exchange Act of 1934 (the ‘‘Act’’) for 

this proposed rule change is the 

requirement under Section 6(b)(5) 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 the instant filing is consistent with 

these principles because the NMM Pilot 

and the SLP Pilot provide its market 

participants with a trading venue that 

utilizes an enhanced market structure to 

encourage the addition of liquidity, 

facilitate the trading of larger orders 

more efficiently and operates to reward 

aggressive liquidity providers. 

Moreover, the instant filing requesting 

an extension of each individual Pilot 

will permit adequate time for: (i) The 

Exchange to prepare and submit a filing 

to make the rules governing the NMM 

Pilot and the SLP Pilot permanent; (ii) 

public notice and comment; and (iii) 


erowe on DSK5CLS3C1PROD with NOTICES
51630 Federal Register / Vol. 74, No. 193 / Wednesday, October 7, 2009 / Notices 

16 15 U.S.C. 78s(b)(3)(A)(iii). 

17 17 CFR 240.19b–4(f)(6). 

18 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires the self-regulatory organization 

to 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 date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. The 

Exchange has satisfied this requirement. 

19 17 CFR 240.19b–4(f)(6). 

20 17 CFR 240.19b–4(f)(6)(iii). 

21For purposes only of waiving the operative 

delay for this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

completion of the 19b–4 approval 

process. 

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 Exchange has filed the proposed 

rule change pursuant to Section 

19(b)(3)(A)(iii) of the Act 16 and Rule 

19b–4(f)(6) thereunder.17 Because the 

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 

prior to 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, the 

proposed rule change has become 

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

of the Act and Rule 19b–4(f)(6)(iii) 

thereunder.18

A proposed rule change filed under 

Rule 19b–4(f)(6) 19 normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),20 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. 

The Commission believes that 

waiving the 30-day operative delay is 

consistent with the protection of 

investors and the public interest. The 

Commission notes that because the pilot 

programs will expire on October 1, 

2009, waiver of the operative delay is 

necessary so that no interruption of the 

pilot programs will occur. In addition, 

the Commission notes that the Exchange 

has requested extensions of the pilots to 

allow the Exchange time to formally 

request permanent approval for the 

pilots. Therefore, the Commission 

designates the proposal operative upon 

filing.21

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

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–2009–100 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–2009–100. 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 inspection and copying in 

the Commission’s Public Reference 

Room 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– 

2009–100 and should be submitted on 

or before October 28, 2009. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. E9–24083 Filed 10–6–09; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–60751; File No. SR– 

NYSEAmex–2009–67] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Extending the Pilot 

Period To Receive Inbound Routes of 

Orders from Archipelago Securities 

LLC 

September 30, 2009. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) and Rule 19b–4 thereunder,2

notice is hereby given that, on 

September 30, 2009, 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 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 extend the 

pilot period of the Exchange’s prior 

approvals to receive inbound routes of 

orders from Archipelago Securities LLC 


erowe on DSK5CLS3C1PROD with NOTICES