23534 Federal Register / Vol. 77, No. 76 / Thursday, April 19, 2012 / Notices 

13 15 U.S.C. 78f(b)(1) and 15 U.S.C. 78f(b)(6). 

14The Commission believes that it is appropriate 

to include in NYSE Amex Rule 476A references to 

rules that are currently operating on a pilot basis. 

15The Commission also recognizes that the 

Exchange proposes to harmonize its Rule 476A List 

with the NYSE Minor Rule Violation Plan by 

adding violations not currently included in the Rule 

476A List. 

16See NYSE Amex Rule 476A(d). 

17 15 U.S.C. 78f(b)(7) and 15 U.S.C. 78f(d)(1). 

18 17 CFR 240.19d–1(c)(2). 

19 15 U.S.C. 78s(b)(2). 

20 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 

3(a)(44). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

Sections 6(b)(1) and 6(b)(6) of the Act,13

which require that an exchange enforce 

compliance with, and have rules that 

provide appropriate discipline for 

violations of, the Act, the rules and 

regulations thereunder, and Exchange 

rules. As an initial matter, the proposed 

rule change will further these objectives 

through its clarification of the list of 

Exchange rule violations that are subject 

to NYSE Amex Rule 476A by updating 

rule titles and rule references, deleting 

references to rules that have been 

deleted, updating descriptions of rules 

that have been amended, and fixing a 

typographical error. 

Further, the Commission recognizes 

that the proposed rule change will 

render violations of DMM obligations 

under Rule 104 that were not previously 

on the Rule 476A List,14 as well as 

violations of DMM obligations under 

Rule 123D, as eligible for treatment as 

minor violations.15 However, the 

Commission notes that designating a 

rule as subject to the Minor Rule 

Violation Plan does not signify that 

violation of the rule will always be 

deemed a minor violation. As noted by 

the Exchange, Rule 476A preserves the 

Exchange’s discretion to seek formal 

discipline, as warranted, when 

transgressions of rules designated as 

eligible for the Minor Rule Violation 

Plan are found to be more serious. Thus, 

the Exchange will remain able to 

require, on a case-by-case basis, formal 

disciplinary action for any particular 

violation. Therefore, the Commission 

believes that the proposed rule change 

will not compromise the Exchange’s 

ability to seek more stringent sanctions 

for the more serious violations of Rules 

104 and 123D. 

In addition, because NYSE Amex Rule 

476A provides procedural rights to a 

person fined under the rule, entitling 

the person to contest the fine and 

receive a full disciplinary proceeding,16

the Commission believes that NYSE 

Amex Rule 476A, as amended by this 

proposed rule change, will provide a 

fair procedure for the disciplining of 

Exchange members and persons 

associated with members, consistent 

with Sections 6(b)(7) and 6(d)(1) of the 

Act.17

Finally, the Commission finds that the 

proposed rule change is consistent with 

the public interest, the protection of 

investors, or is otherwise in furtherance 

of the purposes of the Act, as required 

by Rule 19d–1(c)(2) under the Act,18

which governs minor rule violation 

plans. The Commission believes that the 

proposed changes to NYSE Amex Rule 

476A will strengthen the Exchange’s 

ability to carry out its oversight and 

enforcement responsibilities as a selfregulatory organization, in cases where 

full disciplinary proceedings are 

unsuitable in view of the nature of a 

particular violation. 

In approving this proposed rule 

change, the Commission emphasizes 

that in no way should the amendment 

of the rule be seen as minimizing the 

importance of compliance with 

Exchange rules and all other rules 

subject to the imposition of fines under 

NYSE Amex Rule 476A. The 

Commission believes that the violation 

of any self-regulatory organization’s 

rules, as well as Commission rules, is a 

serious matter. However, NYSE Amex 

Rule 476A provides a reasonable means 

of addressing rule violations that do not 

rise to the level of requiring formal 

disciplinary proceedings, while 

providing greater flexibility in handling 

certain violations. The Commission 

expects that the Exchange will continue 

to conduct surveillance with due 

diligence and make a determination 

based on its findings, on a case by-case 

basis, of whether a violation requires 

formal disciplinary action under NYSE 

Amex Rule 476. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,19 that the 

proposed rule change (SR–NYSEAmex– 

2012–10) be, and hereby is, approved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–9408 Filed 4–18–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66810; File No. SR– 

NYSEArca–2012–30] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Equities Rule 7.31(h)(4) To Make 

Passive Liquidity Orders in ExchangeListed Securities Available to All 

Users, Regardless of Whether a Lead 

Market Maker Is Assigned to the 

Security 

April 13, 2012. 

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 3, 

2012, 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 Exchange. The Exchange has 

designated the proposed rule change as 

constituting a rule change under Rule 

19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with the Commission. 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 Equities Rule 7.31(h)(4) to 

make Passive Liquidity Orders (‘‘PL 

Orders’’) in Exchange-listed securities 

available to all Users, regardless of 

whether a Lead Market Maker (‘‘LMM’’) 

is assigned to the security. The text of 

the proposed rule change is available at 

the Exchange, www.nyse.com, and 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 

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, 

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Federal Register / Vol. 77, No. 76 / Thursday, April 19, 2012 / Notices 23535 

4See NYSE Arca Equities Rule 7.31(h)(4). 

5The Exchange also proposes to remove certain 

text from NYSE Arca Equities Rule 7.37(a)(1) and 

(b)(1)(A) that would be rendered obsolete by the 

proposed amendment to NYSE Arca Equities Rule 

7.31(h)(4). 

6See Securities Exchange Act Release No. 54511 

(September 26, 2006), 71 FR 58460, 58461 (October 

3, 2006) (SR–PCX–2005–53). 

7 Id. 

8 Id. 

9 Id. at 58462. 

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

11 15 U.S.C. 78f(b)(5). 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(6). 

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 

NYSE Arca Equities Rule 7.31(h)(4) to 

make PL Orders in Exchange-listed 

securities available to all Users, 

regardless of whether an LMM is 

assigned to the security. 

A PL Order is an order to buy or sell 

a stated amount of a security at a 

specified, undisplayed price.4 In 

securities where the NYSE Arca 

Marketplace is the primary listings 

market and there is an LMM assigned to 

the security that complies with certain 

display requirements, a PL Order is 

currently available only to the LMM for 

such security. In all other securities 

traded on the Exchange, whether duallylisted securities or securities traded 

pursuant to unlisted trading privileges, 

a PL Order is available to all Users. The 

Exchange proposes to amend NYSE 

Arca Equities Rule 7.31(h)(4) to remove 

the text therein that limits the use of PL 

Orders in Exchange-listed securities to 

the assigned LMM, thereby making PL 

Orders available to all Users, regardless 

of whether an LMM is assigned to the 

security.5

The PL Order was initially designed 

to attract liquidity to the Exchange by 

permitting market participants to 

express their trading interest more 

accurately than was possible with other 

order types available at the time.6 PL 

Orders were also designed to offer 

potential price improvement to 

incoming marketable orders submitted 

by any User.7 The Exchange originally 

believed that restricting the use of the 

PL Order in Exchange-listed securities 

to LMMs was appropriate because 

LMMs would be subject to certain 

minimum display requirements in 

proximity to the Exchange’s Best Bid 

and Offer (‘‘BBO’’).8 The Exchange 

believed that these requirements could 

enhance depth and liquidity at or near 

the Exchange’s BBO.9

After significant experience with the 

use of PL Orders on the Exchange, both 

by LMMs and other Users, the Exchange 

believes that PL Orders in Exchangelisted securities should be available to 

all Users, regardless of whether an LMM 

is assigned to the security. In this 

regard, experience has shown that 

LMMs in Exchange-listed securities 

generally do not utilize PL Orders in 

their assigned securities. In contrast, the 

Exchange has recently received requests 

from ETP Holders to permit PL Orders 

in Exchange-listed securities to be 

entered by Users other than the LMM 

assigned to the security. 

The proposed rule change would 

enhance the tools available to Users 

when entering their trading interest by 

making PL Orders in Exchange-listed 

securities available to all Users, 

including LMMs. The Exchange believes 

that the proposed rule change would not 

disadvantage LMMs, which generally do 

not utilize the PL Order type, but would 

remain able to do so going forward, 

albeit without the exclusivity that is 

currently available. Furthermore, the 

Exchange believes that the elimination 

of this exclusivity, and the display 

requirements related thereto, would not 

have a detrimental impact on the quality 

of the Exchange’s market, because, as 

discussed above, LMMs generally do not 

utilize the PL Order. Instead, the 

proposed rule change could improve the 

quality of the Exchange’s market by 

increasing the potential for price 

improvement on the Exchange in 

Exchange-listed securities. 

Because of the related technology 

changes that this proposed rule change 

would require, the Exchange proposes 

to announce the initial implementation 

date via Trader Update. 

2. Statutory Basis 

The proposed rule change is 

consistent with Section 6(b) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),10 in general, and furthers the 

objectives of Section 6(b)(5),11 in 

particular, because 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. The Exchange believes 

that the proposed rule change meets 

these requirements because it would 

promote just and equitable principles of 

trade and remove impediments to the 

mechanism of a free and open market by 

expanding the universe of Users that 

could submit PL Orders in Exchangelisted securities. The Exchange further 

believes that by expanding access to PL 

Orders in Exchange-listed securities to 

all Users, the Exchange will further 

promote just and equitable principles of 

trade. Conversely, the Exchange believes 

that the proposed rule change would not 

disadvantage LMMs, which generally do 

not utilize the PL Order type, because 

they would remain able to use PL 

Orders in Exchange-listed securities. 

Furthermore, the Exchange believes that 

the elimination of this exclusivity 

would further the goals of a free and 

open market and national market system 

by increasing the potential for price 

improvement in Exchange-listed 

securities. 

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 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 if 

consistent with the protection of 

investors and the public interest, 

provided that the self-regulatory 

organization has given the Commission 

written notice of its intent to file 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 proposed rule change 

has become effective pursuant to 

Section 19(b)(3)(A) of the Act 12 and 

Rule 19b–4(f)(6) thereunder.13 At any 

time within 60 days of the filing of such 

proposed rule change, the Commission 

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23536 Federal Register / Vol. 77, No. 76 / Thursday, April 19, 2012 / Notices 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 17 CFR 240.19b–4(f)(6). 

4An Auction-Only Order is executable during the 

next auction following entry of the order. If the 

order is not executed in the auction, the balance is 

cancelled. An Auction-Only Order is only available 

for auctions that take place on the Exchange. 

Auction-Only Orders are not routed to other 

exchanges and are cancelled where the next auction 

after entry of the order is cancelled or does not 

occur. An Auction-Only Order may not be 

designated as good until cancelled. 

5The Market Order Auction is described in NYSE 

Arca Equities Rule 7.35(c). 

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 email to rulecomments@sec.gov. Please include File 

Number SR–NYSEArca–2012–30 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–2012–30. 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 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–2012–30 and 

should be submitted on or before May 

10, 2012. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2012–9409 Filed 4–18–12; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–66811; File No. SR– 

NYSEArca–2012–29] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending NYSE Arca 

Equities Rule 7.31(t) To Provide for 

Limit-on-Open Orders and Market-onOpen Orders 

April 13, 2012. 

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 3, 

2012, 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 Exchange. The Exchange has 

designated the proposed rule change as 

constituting a rule change under Rule 

19b–4(f)(6) under the Act,3 which 

renders the proposal effective upon 

filing with the Commission. 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 Equities Rule 7.31(t) to 

provide for Limit-on-Open Orders 

(‘‘LOO Orders’’) and Market-on-Open 

Orders (‘‘MOO Orders’’). The text of the 

proposed rule change is available at the 

Exchange, www.nyse.com, and 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 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

NYSE Arca Equities Rule 7.31(t) to 

provide for LOO and MOO Orders. 

NYSE Arca Equities Rule 7.31(t) 

currently provides for Auction-Only 

Orders, which are limit or market orders 

that are only executed within an 

auction.4 As proposed, LOO and MOO 

Orders would be defined under NYSE 

Arca Equities Rule 7.31(t)(1) and (2), 

respectively, as specific types of 

Auction-Only Orders. More specifically, 

a LOO Order would be defined as an 

Auction-Only Limit Order that is to be 

executed only during the Market Order 

Auction, which is the auction that 

opens the Core Trading Session on the 

Exchange for Exchange-listed 

securities.5 Any portion of a LOO Order 

that remains unfilled after completion of 

the Market Order Auction would be 

cancelled. A MOO Order would be 

defined as an Auction-Only Market 

Order that is to be executed only during 

the Market Order Auction. As with LOO 

Orders, any portion of a MOO Order 

that remains unfilled after completion of 

the Market Order Auction would be 

cancelled. MOO and LOO orders would 

not participate in the Opening Auction, 

as defined in NYSE Arca Equities Rule 

7.35(b), the Closing Auction, as defined 

in NYSE Arca Equities Rule 7.35(e), or 

mstockstill on DSK4VPTVN1PROD with NOTICES