[Federal Register Volume 77, Number 11 (Wednesday, January 18, 2012)]
[Notices]
[Pages 2587-2588]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-777]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66137; File No. SR-NYSEAmex-2011-106]


Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex 
Equities Rule 128, Which Governs Clearly Erroneous Executions, To 
Extend the Effective Date of The Pilot by Which Portions of Such Rule 
Operate Until July 31, 2012

January 11, 2012.
    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 28, 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Amex Equities Rule 128, which 
governs clearly erroneous executions, to extend the effective date of 
the pilot by which portions of such Rule operate until July 31, 2012. 
The text of the proposed rule change is available at the Exchange, the 
Commission's Public Reference Room, www.nyse.com, and www.sec.gov.

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 Amex Equities Rule 128, which 
governs clearly erroneous executions, to extend the effective date of 
the pilot by which portions of such Rule operate, until July 31, 2012. 
The pilot is currently scheduled to expire on January 31, 2012.\4\
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    \4\ See Securities Exchange Act Release No. 62886 (September 10, 
2010), 75 FR 56613 (September 16, 2010) (SR-NYSEAmex-2010-60). See 
also Securities Exchange Act Release Nos. 63480 (December 9, 2010), 
75 FR 78333 (December 15, 2010) (SR-NYSEAmex-2010-116); 64233 (April 
7, 2011), 76 FR 20736 (April 13, 2011) (SR-NYSEAmex-2011-24); and 
65066 (August 9, 2011), 76 FR 50506 (August 15, 2011) (SR-NYSEAmex-
2011-58).
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    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 erroneous trades. In connection with this pilot 
initiative, the Exchange amended NYSE Amex Equities Rule 128(c), 
(e)(2), (f), and (g). The amendments provide for uniform treatment of 
clearly erroneous execution reviews (1) in Multi-Stock Events \5\ 
involving twenty or more securities, and (2) in the event transactions 
occur that result in the issuance of an individual security trading 
pause by the primary market and subsequent transactions that occur 
before the trading pause is in effect on the Exchange.\6\ The 
amendments also eliminated appeals of certain rulings made in 
conjunction with other exchanges with respect to clearly erroneous 
transactions and limited the Exchange's discretion to deviate from 
Numerical Guidelines set

[[Page 2588]]

forth in the Rule in the event of system disruptions or malfunctions.
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    \5\ Terms not defined herein are defined in NYSE Amex Equities 
Rule 128.
    \6\ Separately, the Exchange has proposed extending the 
effective date of the trading pause pilot under NYSE Amex Equities 
Rule 80C, which requires to the Exchange to pause trading in an 
individual security listed on the Exchange if the price moves by a 
specified percentage as compared to prices of that security in the 
preceding five-minute period during a trading day. See SR-NYSEAmex-
2011-105.
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    If the pilot were not extended, the prior versions of paragraphs 
(c), (e)(2), (f), and (g) of NYSE Amex Equities Rule 128 would be in 
effect, and the NYSE Amex would have different rules than other 
exchanges and greater discretion in connection with breaking clearly 
erroneous transactions. The Exchange proposes to extend the pilot 
amendments to NYSE Amex Equities Rule 128 until July 31, 2012 in order 
to maintain uniform rules across markets and allow the pilot to 
continue to operate without interruption during the same period that 
the Rule 80C trading pause rule pilot is also in effect. Extension of 
the pilot would permit the Exchange, other national securities 
exchanges and the Commission to further assess the effect of the pilot 
on the marketplace, including whether additional measures should be 
added, whether the parameters of the rule should be modified or whether 
other initiatives should be adopted in lieu of the current pilot.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \7\ of the 
Act, in general, and furthers the objectives of Section 6(b)(5) \8\ in 
particular 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 mechanism of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest. More specifically, the NYSE Amex believes that the 
extension of the pilot would help assure that the determination of 
whether a clearly erroneous trade has occurred will be based on clear 
and objective criteria, and that the resolution of the incident will 
occur promptly through a transparent process. The proposed rule change 
would also help assure consistent results in handling erroneous trades 
across the U.S. markets, thus furthering fair and orderly markets, the 
protection of investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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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 \9\ and Rule 19b-4(f)(6) thereunder.\10\ 
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.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6). Pursuant to Rule 19b-4(f)(6)(iii) 
under the Act, the Exchange is required 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 has satisfied this requirement.
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    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

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#c0b2b5aca5eda3afadada5aeb4b380b3a5a3eea7afb6"><span class="__cf_email__" data-cfemail="1b696e777e36787476767e756f685b687e78357c746d">[email protected]</span></a>. Please include 
File No. SR-NYSEAmex-2011-106 on the subject line.

Paper Comments

    <bullet> 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 No. SR-NYSEAmex-2011-106. This 
file number should be included on the subject line if email 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 No. SR-NYSEAmex-2011-106 and should be 
submitted on or before February 8, 2012.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-777 Filed 1-17-12; 8:45 am]
BILLING CODE 8011-01-P


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