1286 Federal Register / Vol. 78, No. 5 / Tuesday, January 8, 2013 / Notices 

16 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. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5NYSE Euronext acquired The Amex 

Membership Corporation (‘‘AMC’’) pursuant to an 

Agreement and Plan of Merger, dated January 17, 

2008 (the ‘‘Merger’’). In connection with the Merger, 

the Exchange’s predecessor, the American Stock 

Exchange LLC (‘‘Amex’’), a subsidiary of AMC, 

became a subsidiary of NYSE Euronext called NYSE 

Alternext US LLC. See Securities Exchange Act 

Release No. 58673 (September 29, 2008), 73 FR 

57707 (October 3, 2008) (SR–NYSE–2008–60 and 

SR–Amex–2008–62) (approving the Merger). 

Subsequently, NYSE Alternext US LLC was 

renamed NYSE Amex LLC, which was then 

renamed NYSE MKT LLC and continues to operate 

as a national securities exchange registered under 

Section 6 of the Securities Exchange Act of 1934, 

as amended (the ‘‘Act’’). See Securities Exchange 

Act Release Nos. 59575 (March 13, 2009), 74 FR 

11803 (March 19, 2009) (SR–NYSEALTR–2009–24) 

and 67037 (May 21, 2012), 77 FR 31415 (May 25, 

2012) (SR–NYSEAmex–2012–32). 

6See Securities Exchange Act Release No. 60758 

(October 1, 2009), 74 FR 51639 (October 7, 2009) 

(SR–NYSEAmex–2009–65). See also Securities 

Exchange Act Release Nos. 61030 (November 19, 

2009), 74 FR 62365 (November 27, 2009) (SR– 

NYSEAmex–2009–83) (extending Pilot to March 30, 

2010); 61725 (March 17, 2010), 75 FR 14223 (March 

24, 2010) (SR–NYSEAmex–2010–28) (extending 

Pilot to September 1, 2010); 62820 (September 1, 

2010), 75 FR 54935 (September 9, 2010) (SR– 

NYSEAmex–2010–86) (extending Pilot to January 

31, 2011); 63615 (December 29, 2010), 76 FR 611 

(January 5, 2011) (SR–NYSEAmex–2010–123) 

(extending Pilot to August 1, 2011); 64773 (June 29, 

2011), 76 FR 39453 (July 6, 2011) (SR–NYSEAmex– 

2011–43) (extending Pilot to January 31, 2012); 

66042 (December 23, 2011), 76 FR 82326 (December 

30, 2011) (SR–NYSEAmex–2011–102) (extending 

Pilot to July 31, 2012); and 67495 (July 25, 2012), 

77 FR 45406 (July 31, 2012) (SR–NYSEMKT–2012– 

21) (extending the Pilot to January 31, 2013). 

7See SR–NYSE–2012–75. 

8The information contained herein is a summary 

of the NMM Pilot. See Securities Exchange Act 

Release No. 58845 (October 24, 2008), 73 FR 64379 

(October 29, 2008) (SR–NYSE–2008–46) for a fuller 

description. 

9See NYSE MKT Rule 103—Equities. 

10See NYSE MKT Rule 104—Equities. 

11See NYSE MKT Rule 60—Equities; see also 

NYSE MKT Rules 104—Equities and 1000— 

Equities. 

business days between the hours of 

10:00 a.m. and 3:00 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– 

NYSEMKT–2012–85 and should be 

submitted on or before January 29, 2013. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2013–00078 Filed 1–7–13; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–68559; File No. SR– 

NYSEMKT–2012–84] 

Self-Regulatory Organizations; NYSE 

MKT LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Extending the Operation 

of Its New Market Model Pilot Until the 

Earlier of Securities and Exchange 

Commission Approval To Make Such 

Pilot Permanent or July 31, 2013 

January 2, 2013. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on December 

18, 2012, NYSE MKT LLC (the 

‘‘Exchange’’ or ‘‘NYSE MKT’’) 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 filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 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, currently scheduled to expire on 

January 31, 2013, until the earlier of 

Securities and Exchange Commission 

(‘‘Commission’’) approval to make such 

pilot permanent or July 31, 2013. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, 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 

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 extend the 

operation of its New Market Model Pilot 

(‘‘NMM Pilot’’) that was adopted 

pursuant to its merger with the New 

York Stock Exchange LLC (‘‘NYSE’’).5

The NMM Pilot was approved to operate 

until October 1, 2009. The Exchange 

filed to extend the operation of the Pilot 

to November 30, 2009, March 30, 2010, 

September 30, 2010, January 31, 2011, 

August 1, 2011, January 31, 2012, July 

31, 2012, and January 31, 2013, 

respectively.6 The Exchange now seeks 

to extend the operation of the NMM 

Pilot, currently scheduled to expire on 

January 31, 2013, until the earlier of 

Commission approval to make such 

pilot permanent or July 31, 2013. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of NYSE.7

Background 8

In December 2008, the Exchange 

implemented significant changes to its 

equities market rules, execution 

technology and the rights and 

obligations of its equities 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 that it implemented 

through the NMM Pilot. 

As part of the NMM Pilot, the 

Exchange eliminated the function of 

equity specialists on the Exchange 

creating a new category of market 

participant, the Designated Market 

Maker or DMM.9 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 10 in their assigned 

securities and no longer have a negative 

obligation. DMMs are also no longer 

agents for public customer orders.11

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 


srobinson on DSK4SPTVN1PROD with 
Federal Register / Vol. 78, No. 5 / Tuesday, January 8, 2013 / Notices 1287 

12See NYSE MKT Rule 1000—Equities. 

13The 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. 

14See NYSE MKT Rule 72(a)(ii)—Equities. 

15See supra note 6. 

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

17 17 CFR 240.19b–4(f)(6). 

known as the DMM Capital 

Commitment Schedule (‘‘CCS’’).12 CCS 

provides the Display Book® 13 with the 

amount of shares that the DMM is 

willing to trade at price points outside, 

at and inside the Exchange Best Bid or 

Best Offer (‘‘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 BBO. 

During the operation of the NMM Pilot, 

orders or portions thereof that establish 

priority 14 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. 

The NMM Pilot was originally 

scheduled to end operation on October 

1, 2009, or such earlier time as the 

Commission may determine to make the 

rules permanent. The Exchange filed to 

extend the operation of the Pilot on 

several occasions 15 in order to prepare 

a rule filing seeking permission to make 

the above described changes permanent. 

The Exchange is currently still 

preparing such formal submission but 

does not expect that filing to be 

completed and approved by the 

Commission before January 31, 2013. 

Proposal To Extend the Operation of the 

NMM Pilot 

The Exchange established the NMM 

Pilot to provide incentives for quoting, 

to enhance competition among the 

existing group of liquidity providers and 

to add a new competitive market 

participant. The Exchange believes that 

the NMM Pilot allows 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 should be 

made permanent. Through this filing the 

Exchange seeks to extend the current 

operation of the NMM Pilot until July 

31, 2013, in order to allow the Exchange 

time 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 this filing is consistent with these 

principles because the NMM Pilot 

provides 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, 

requesting an extension of the NMM 

Pilot will permit adequate time for: (i) 

The Exchange to prepare and submit a 

filing to make the rules governing the 

NMM Pilot permanent; (ii) public notice 

and comment; and (iii) 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 

Because the foregoing proposed rule 

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 16 and 

Rule 19b–4(f)(6) thereunder.17

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 

• 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–NYSEMKT–2012–84 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–NYSEMKT–2012–84. 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 


srobinson on DSK4SPTVN1PROD with 
1288 Federal Register / Vol. 78, No. 5 / Tuesday, January 8, 2013 / Notices 

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. 78s(b)(3)(A)(iii). 

4 17 CFR 240.19b–4(f)(6). 

5See Securities Exchange Act Release No. 58845 

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

(SR–NYSE–2008–46). See also Securities Exchange 

Act Release Nos. 60756 (October 1, 2009), 74 FR 

51628 (October 7, 2009) (SR–NYSE–2009–100) 

(extending Pilot to November 30, 2009); 61031 

(November 19, 2009), 74 FR 62368 (November 27, 

2009) (SR–NYSE–2009–113) (extending Pilot to 

March 30, 2010); 61724 (March 17, 2010), 75 FR 

14221 (March 24, 2010) (SR–NYSE–2010–25) 

(extending Pilot to September 30, 2010); 62819 

(September 1, 2010), 75 FR 54937 (September 9, 

2010) (SR–NYSE–2010–61) (extending Pilot to 

January 31, 2011); 63616 (December 29, 2010), 76 

FR 612 (January 5, 2011) (SR–NYSE–2010–86) 

(extending Pilot to August 1, 2011); 64761 (June 28, 

2011), 76 FR 39147 (July 5, 2011) (SR–NYSE–2011– 

29) (extending Pilot to January 31, 2012); 66046 

(December 23, 2011), 76 FR 82340 (December 30, 

2011) (SR–NYSE–2011–65) (extending Pilot to July 

31, 2012); and 67494 (July 25, 2012), 77 FR 45408 

(July 31, 2012) (SR–NYSE–2012–26) (extending 

Pilot to January 31, 2013). 

6See SR–NYSEMKT–2012–84. 

7The information contained herein is a summary 

of the NMM Pilot. See supra note 5 for a fuller 

description. 

8See NYSE Rule 103. 

9See NYSE Rule 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. 

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 

10:00 a.m. and 3:00 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– 

NYSEMKT–2012–84 and should be 

submitted on or before January 29, 2013. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Kevin M. O’Neill, 

Deputy Secretary. 

[FR Doc. 2013–00080 Filed 1–7–13; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–68558; File No. SR–NYSE– 

2012–75] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change Extending the 

Operation of Its New Market Model 

Pilot Until the Earlier of Securities and 

Exchange Commission Approval To 

Make Such Pilot Permanent or July 31, 

2013 

January 2, 2013. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on December 

18, 2012, New York Stock Exchange 

LLC (the ‘‘Exchange’’ or ‘‘NYSE’’) 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 filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 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, currently scheduled to expire on 

January 31, 2013, until the earlier of 

Securities and Exchange Commission 

(‘‘Commission’’) approval to make such 

pilot permanent or July 31, 2013. The 

text of the proposed rule change is 

available on the Exchange’s Web site at 

www.nyse.com, at the principal office of 

the Exchange, 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 

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 extend the 

operation of its New Market Model Pilot 

(‘‘NMM Pilot’’),5 currently scheduled to 

expire on January 31, 2013, until the 

earlier of Commission approval to make 

such pilot permanent or July 31, 2013. 

The Exchange notes that parallel 

changes are proposed to be made to the 

rules of NYSE MKT 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. Certain of the enhanced 

market model changes were 

implemented through a pilot program. 

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 Best Bid or 

Best Offer (‘‘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 


srobinson on DSK4SPTVN1PROD with