Federal Register / Vol. 75, No. 172 / Tuesday, September 7, 2010 / Notices 54407 

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

2 17 CFR 240.19b–4. 

3The pilot is currently scheduled to end on 

September 30, 2010. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62792; File No. SR– 

NYSEAmex–2010–85] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Amending Rule 107B— 

NYSE Amex Equities To Revise the 

Quoting Requirement 

August 30, 2010. 

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 August 

26, 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 amend 

Rule 107B—NYSE Amex Equities 

(‘‘Supplemental Liquidity Providers’’) 

(‘‘SLPs’’), which is a pilot program, to 

revise the quoting requirement. The text 

of the proposed rule change is available 

on the Exchange’s Web site at http:// 

www.nyse.com, at the Exchange’s 

principal office, at the Commission’s 

Public Reference Room, and on the 

Commission’s Web site at http:// 

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 

Rule 107B—NYSE Amex Equities, 

which is a pilot program, to eliminate 

the ability for an SLP to earn a rebate 

if it maintains a quote at the National 

Best Bid (‘‘NBB’’) or National Best Offer 

(‘‘NBO’’) an average of 3% in an assigned 

SLP security. Instead, an SLP would be 

eligible to earn a rebate only if it meets 

the 5% quoting requirement currently 

set forth in the rule. The Exchange also 

proposes to clarify which mnemonics 

that a member organization may use for 

the SLP trading activity to enable a 

member organization to use the same 

mnemonic for non-SLP trading activity. 

Rule 107B provides for a class of 

market participants referred to as 

Supplemental Liquidity Providers or 

‘‘SLPs.’’ 3 Approved Exchange member 

organizations are eligible to be an SLP. 

SLPs supplement the liquidity provided 

by Designated Market Makers (‘‘DMMs’’). 

SLPs have monthly quoting 

requirements that may qualify them to 

receive SLP rebates, which are larger 

than the general rebate available to nonSLP market participants. 

The goal of the SLP program is to 

encourage participants to quote more 

often and to add displayed liquidity to 

the market. Thus, Rule 107B(a) requires 

that an SLP maintain a bid and/or an 

offer at the NBB or NBO averaging at 

least 5% of the trading day for each 

assigned security. Notwithstanding the 

5% quoting requirement, an SLP can 

earn a financial rebate if it maintains a 

quote an average of 3% in an assigned 

SLP security. 

If an SLP fails to meet a 3% average 

quoting requirement in its assigned 

securities, the SLP is not eligible for SLP 

rebates on executions for that month. 

Further, if an SLP fails to meet its 5% 

average quoting requirement in its 

assigned securities for three (3) 

consecutive months (not including the 

first month of SLP operation), the SLP 

Liaison Committee may, in its 

discretion, impose the following nonregulatory penalties: (1) Revocation of 

the affected security(ies); (2) each time 

a security(ies) is revoked for failure to 

meet the quoting requirement for a 

particular security, revocation of an 

additional unaffected security; and/or 

(3) disqualification from the SLP 

program. 

The Exchange proposes to eliminate 

the ability of an SLP to earn a rebate if 

it maintains a quote in assigned SLP 

securities at the NBB or NBO at least 

3%, up to, but not including 5% of the 

time. Instead, to align the rebate with 

the 5% quoting requirement set forth in 

Rule 107B(a), as proposed, an SLP 

would not be able to earn a rebate 

unless it maintained a quote at the NBB 

or NBO an average of 5% of the trading 

day. The Exchange proposes to make 

conforming amendments to Rule 

107B(i)(1)(A) and (B) by deleting the last 

sentence of each paragraph as no longer 

necessary. The Exchange believes that 

this proposed change strengthens the 

SLP program by ensuring that rebates 

are paid only if the SLP meets the 

minimum quoting requirement of an 

SLP. 

The Exchange also proposes to amend 

the operational pre-qualifications for an 

SLP. Among other things, the Exchange 

requires pursuant to Rule 107B(c)(1) 

that an SLP use a unique mnemonic for 

its SLP business, which enables the 

Exchange to identify SLP transactions 

for billing and regulatory purposes. The 

Exchange proposes to revise this 

requirement to clarify that the member 

organization must identify to the 

Exchange mnemonics that identify the 

SLP trading activity in assigned SLP 

securities. As proposed, because all 

order flow in an assigned SLP security 

using that mnemonic will be treated as 

SLP volume, a member organization 

may not use such identified mnemonics 

for trading activity at the Exchange in 

assigned SLP securities that is not SLP 

trading activity. However, to enable the 

member organization to use the same 

mnemonic for both SLP and non-SLP 

trading activity in different securities, 

an SLP may use mnemonics used for 

SLP trading for trading activity in 

securities not assigned to the SLP. As 

further proposed, the rule would specify 

that if the member organization does not 

identify such mnemonics to the 

Exchange, the member organization will 

not receive credit for such SLP trading. 

The Exchange proposes to make a 

conforming amendment to Rule 

107B(f)(2). 

In addition to the above proposed 

changes, the Exchange proposes to make 

clarifying amendments to Rule 107B. 

First, because FINRA now conducts all 

market regulation functions on behalf of 

the Exchange, the Exchange proposes to 

delete references to the ‘‘Division of 

Market Surveillance,’’ and replace it 

with a reference to FINRA (see Section 

(e) of the Rule). Second, the Exchange 

proposes to revise section (g)(2)(A) of 

the rule, to provide that a DMM unit 

shall not also act as an SLP in the same 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1
54408 Federal Register / Vol. 75, No. 172 / Tuesday, September 7, 2010 / Notices 

4As noted above, the SLP program is a pilot 

program currently set to expire on September 30, 

2010. The Exchange intends to file to make the 

program permanent or extend the pilot program so 

that it can continue past September 30, 2010. 

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

6 15 U.S.C. 78f(b)(5). 

7 15 U.S.C. 78s(b)(3)(A)(iii). 

8 17 CFR 240.19b–4(f)(6). 

9 15 U.S.C. 78s(b)(3)(A). 

10 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires the Exchange to give the 

Commission written notice of the Exchange’s intent 

to file the proposed rule change along with a brief 

description and the 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 the pre-filing requirement. 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

securities in which it is registered as a 

DMM. The Exchange does not need to 

spell out the term ‘‘designated market 

maker’’ as it, and the term DMM unit, 

are defined terms in Rule 2. 

The Exchange proposes to implement 

these changes on October 1, 2010.4

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),5 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,6

in particular, in that it is designed to 

prevent fraudulent and manipulative 

acts and practices, 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 

the proposed Rule is consistent with 

these principles in that it seeks to 

increase the trading performance of 

SLPs, which will benefit all market 

participants. 

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 7 and Rule 

19b–4(f)(6) thereunder.8 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 9 and Rule 

19b–4(f)(6)(iii) thereunder.10

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–2010–85 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–2010–85. 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 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– 

NYSEAmex–2010–85 and should be 

submitted on or before September 28, 

2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–22206 Filed 9–3–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62793; File No. SR–CBOE– 

2010–076] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Its Fees 

Schedule 

August 30, 2010. 

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 August 

17, 2010, Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. 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 its 

Fees Schedule relating to routing 

charges. The text of the proposed rule 

change is available on the Exchange’s 

Web site (http://www.cboe.org/legal), at 


wwoods2 on DSK1DXX6B1PROD with NOTICES_PART 1