58462 Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Notices 

11 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The term Designated Percentage is defined in 

proposed Rule 7.23(a)(1)(B)(iii). 

4See Securities Exchange Act Release No. 62252 

(June 10, 2010), 75 FR 34186 (June 16, 2010) (SR– 

NYSEArca–2010–41). See also Securities Exchange 

Act Release No. 62884 (September 10, 2010), 75 FR 

56618 (September 16, 2010) (SR–NYSEArca–2010– 

61). See also Rule 7.11. 

and that the elimination of ‘‘stub quotes’’ 

is important for the protection of 

investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change imposes any 

burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the 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–BATS–2010–025 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BATS–2010–025. 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 website (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 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 publicly available. All 

submissions should refer to File 

Number SR–BATS–2010–025 and 

should be submitted on or before 

October 15, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.11

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23955 Filed 9–23–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62946; File No. SR– 

NYSEArca–2010–83] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing of a 

Proposed Rule Change Amending 

NYSE Arca Equities Rule 7.23 To 

Adopt Pricing Obligations for ETP 

Holders Who Are Registered as Market 

Makers 

September 20, 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 

September 17, 2010, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or the ‘‘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 

NYSE Arca Equities Rule 7.23 to adopt 

pricing obligations for ETP Holders who 

are registered as Market Makers. 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. 

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 7.23 to adopt 

pricing obligations for Market Makers. 

Under the proposal, the Exchange will 

require Market Makers to continuously 

maintain two-sided Q Order trading 

interest within a Designated 

Percentage 3 from the National Best Bid 

and National Best Offer (‘‘NBBO’’) for 

each security in which they are 

registered. These pricing obligations are 

intended to eliminate trade executions 

against Market Maker placeholder Q 

Orders traditionally priced far away 

from the inside market, commonly 

known as ‘‘stub quotes.’’ They are also 

intended to augment and work in 

conjunction with Trading Pauses in 

individual securities due to 

extraordinary market volatility, which 

are already in place on a pilot basis for 

stocks in the S&P 500® Index and the 

Russell 1000® Index, under Exchange 

Rule 7.11.4


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Notices 58463 

5 17 CFR 240.603. 

6 17 CFR 240.600. 

7See Rule 7.31(k)(1). 

8See Rule 7.31(k)(1)(A)(3). 

9The Exchange represents that within 90 days 

from the date of this filing it will submit a proposed 

rule change with the Commission to either remove 

the text of Rule 7.31(k)(1)(A)(4), which states that 

a ‘‘Q Order entered with reserve size * * * will 

automatically repost with the original display size 

and $10 below the original bid or $10 above the 

original offer, but never below $0.01,’’ or amend 

such text so that a Q Order entered with reserve size 

will repost with a price consistent with the 

Designated Percentage proposed herein. 

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

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

12 15 U.S.C. 78k–1(a)(1). 

Under the proposal, the Exchange will 

require Market Makers to enter and 

maintain Q Orders priced no more than 

the Designated Percentage away from 

the NBBO. Permissible Q Orders are 

determined by the individual character 

of the security, the time of day in which 

the Q Order is entered, and other factors 

which are summarized below. 

For purposes of the proposed rule, 

Designated Percentage shall mean the 

Threshold Move as defined under Rule 

7.11 less two (2) percentage points. 

Because the Threshold Move across all 

exchanges is currently 10%, a Market 

Maker’s Q Order in a security may not 

be more than 8% away from NBBO. 

Once a permissible Q Order is entered, 

it may rest without adjustment until 

such time as it is more than the Defined 

Limit away from the NBBO. For 

purposes of the proposed rule, the 

Designated Limit shall mean the 

Threshold Move as defined under Rule 

7.11 less one-half percentage point (i.e., 

9.5%). If the Market Maker’s resting 

interest exceeds the Defined Limit, the 

Market Maker must enter new interest at 

a price not more than the Designated 

Percentage of 8% away from the NBBO 

(or identify to the Corporation current 

resting interest that satisfies the Market 

Maker’s obligation). For times during 

the trading day when a Trading Pause 

is not in effect under Rule 7.11 (e.g., 

before 6:45 a.m. and after 12:35 p.m. 

Pacific Time), the Designated Percentage 

calculation will assume a trigger 

percentage of 22%. Therefore, a Market 

Maker must maintain a Q Order no 

further than 20% away from the NBBO 

and the Q Order may rest without 

adjustment until it is more than 21.5% 

from the NBBO. In the absence of an 

NBBO, the above calculations will 

remain the same, but will use the last 

reported sale from the single plan 

processor responsible for consolidation 

of information for the security pursuant 

to Rule 603 of Regulation NMS.5

For securities that are not subject to 

Trading Pauses, the Designated 

Percentage will assume a trigger 

percentage of 32% and apply the same 

2% reduction. Thus, Market Makers 

registered in those securities shall be 

required to maintain Q Order interest no 

more than 30% away from NBBO. As 

with securities subject to Trading 

Pauses, once a permissible Q Order is 

entered it may rest without adjustment 

until such time as it becomes more than 

the Defined Limit away from the NBBO 

(31.5%), whereupon the Market Maker 

must enter new interest at a price not 

more than the Designated Percentage of 

30% away from the NBBO (or identify 

to the Corporation current resting 

interest that satisfies the Market Maker’s 

obligation). The Exchange proposes that 

these requirements shall apply to NMS 

stocks (as defined in Rule 600 under 

Regulation NMS) 6 during the trading 

day. 

Nothing in the proposal shall 

preclude a Market Maker from entering 

Q Order interest at price levels that are 

closer to the NBBO than the levels 

required under the proposal. 

The Exchange also proposes to amend 

Rule 7.31 (Orders and Modifiers) with 

regards to Q Orders. A Q Order is a limit 

order submitted to the NYSE Arca 

Marketplace by a Market Maker, and 

designated by a Market Maker as a ‘‘Q 

Order’’ through such means as the 

Corporation shall specify.7 Market 

Makers utilize Q Orders to satisfy their 

obligation to maintain continuous, twosided interest in securities in which 

they are registered to trade. The 

proposed amendment to Rule 7.23 

requires that the ‘‘standard Q,’’ which is 

currently defined as having a price of 

$0.01 bid and 2 times the previous day’s 

close for the offer, be eliminated as an 

available order type.8 The Exchange 

proposes to reserve this subsection for 

possible future use.9

The Exchange also proposes to 

include language at the end of Rule 

7.31(k) stating that ‘‘nothing in [the] 

Rule shall be construed to relieve a 

Market Maker of any of its obligations 

pursuant to Rule 7.23.’’ The Exchange 

believes that the addition of this rule 

text will make clear that, while certain 

Q Orders may be submitted and/or 

repost with prices that are beyond the 

Designated Percentages and Defined 

Limits, respectively, proposed in Rule 

7.23, Market Makers shall remain 

obligated to satisfy their Two-Sided 

Obligation, as proposed in Rule 

7.23(a)(1). 

The Exchange also proposes to make 

certain non-substantive stylistic changes 

to Rule 7.23(a)(2)–(a)(5). These proposed 

changes do not alter the substance or 

form of the existing rule text. 

2. Statutory Basis 

The Exchange believes that its 

proposal 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) of the Act,11

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 

that the proposed rule change also is 

consistent with the principles of Section 

11A(a)(1) 12 of the Act in that it seeks to 

assure fair competition among brokers 

and dealers and among exchange 

markets. The Exchange believes the 

proposed rule change meets these 

requirements in that it promotes 

transparency and uniformity concerning 

pricing obligations across markets for 

certain 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 

Within 45 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 self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

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 


srobinson on DSKHWCL6B1PROD with NOTICES
58464 Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Notices 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange’s corporate affiliate, New York 

Stock Exchange LLC (‘‘NYSE’’), submitted a 

companion rule filing proposing corresponding 

amendments to NYSE Rule 476A. See SR–NYSE– 

2010–66. 

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–NYSEArca–2010–83 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

Station Place, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–NYSEArca–2010–83. 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 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 publicly available. All 

submissions should refer to File 

Number SR–NYSEArca–2010–83 and 

should be submitted on or before 

October 15, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23969 Filed 9–23–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62941; File No. SR– 

NYSEAmex–2010–94] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change to Add Certain Rules to 

the List of Exchange Rule Violations 

and Fines Applicable Thereto 

September 20, 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 

September 9, 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 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 

NYSE Amex Disciplinary Rule 476A to 

add certain rules to Part 1A: List of 

Exchange Rule Violations and Fines 

Applicable Thereto (‘‘Minor Rule 

Violation Plan’’). 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 

NYSE Amex Disciplinary Rule 476A to 

add certain rules to Part 1A of its Minor 

Rule Violation Plan to reflect approved 

changes to Exchange rules.3

Specifically, in connection with the 

Exchange’s process to harmonize certain 

Exchange rules with rules of the 

Financial Industry Regulatory 

Authority, Inc. (‘‘FINRA’’), the Exchange 

has deleted certain Exchange rules and 

replaced them with new rules that have 

different rule numbers. The Exchange 

proposes this rule filing to add the new 

rule references to the Minor Rule 

Violation Plan for those rules that have 

been added as part of the FINRA 

harmonization process. The Exchange 

will not delete the old rule references in 

the Minor Rule Violation Plan so that 

violations of prior Exchange rules that 

occurred before the amendments 

described below took effect still fall 

under the jurisdiction of the Minor Rule 

Violation Plan. 

In connection with the harmonization 

process, the Exchange adopted the 

following new NYSE Amex Equities 

Rules, which correspond with the samenumbered consolidated FINRA Rules, 

and which replaced prior Exchange 

rules: 

• Rule 2150—NYSE Amex Equities 

(Improper Use of Customers’ Securities 

or Funds; Prohibition Against 

Guarantees and Sharing in Accounts) 

replaced old Rules 352(a)–(d)—NYSE 

Amex Equities; 

• Rule 3130—NYSE Amex Equities 

(Annual Certification of Compliance 

and Supervisory Processes) replaced, in 

relevant part, old Rules 342.30(d)– and 

(e)-NYSE Amex Equities and Rule 

Interpretation 311(b)(5)—NYSE Amex 

Equities; 

• Rule 3310—NYSE Amex Equities 

(Anti-Money Laundering Compliance 

Program) replaced old Rule 445—NYSE 

Amex Equities; 

• Rule 4110—NYSE Amex Equities 

(Capital Compliance) replaced, in 


srobinson on DSKHWCL6B1PROD with NOTICES