Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Notices 58453 

4See Securities Exchange Act Release Nos. 59965 

(May 21, 2009), 74 FR 25783 (May 29, 2009) (SR– 

NYSE–2009–25) (adopting, inter alia, NYSE Rules 

3130, 4560, 5190); 61158 (December 11, 2009), 74 

FR 67942 (December 21, 2009) (SR–NYSE–2009– 

123) (adopting NYSE Rule 2150); 61273 (December 

31, 2009), 75 FR 1091 (January 8, 2010) (SR–NYSE– 

2009–134) (adopting NYSE Rule 3310); 61557 

(February 22, 2010), 75 FR 9472 (March 2, 2010) 

(SR–NYSE–2010–10) (adopting, inter alia, NYSE 

Rules 4110, 4521). See also NYSE and NYSE Amex 

Information Memoranda 09–24 (June 2, 2009); 10– 

09 (February 18, 2010); 10–12 (March 11, 2010). 

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

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

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

8 17 CFR 240.19b–4(f)(3). 

9 17 CFR 200.30–3(a)(12); 200.30–3(a)(44). 

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

2 17 CFR 240.19b–4. 

• Rule 4521 (Notifications, 

Questionnaires and Reports) replaced, 

in relevant part, old Rule 421; 

• Rule 4560 (Short-Interest Reporting) 

replaced old Rules 421(1) and 421.10; 

and 

• Rule 5190 (Notification 

Requirements for Offering Participants) 

replaced old Rule 392.4

These old Rules, or certain provisions 

thereof, are subject to the Exchange’s 

Minor Rule Violation Plan under NYSE 

Rule 476A. At the time the new Rules 

were adopted to replace the old 

Exchange Rules, however, they were not 

added to the Exchange’s Minor Rule 

Violation Plan. The Exchange therefore 

proposes to update the Exchange’s 

Minor Rule Violation Plan under NYSE 

Rule 476A by adding the new rule 

references identified above. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with, 

and furthers the objectives of, Section 

6(b)(5) of the Act,5 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 proposed rule 

change also furthers the objectives of 

Section 6(b)(6) of the Act,6 in that it 

provides for appropriate discipline for 

violations of Exchange rules and 

regulations. 

The Exchange believes that the 

proposed rule change will provide the 

Exchange with greater regulatory 

flexibility to enforce the prescriptions of 

certain rules in a more informal manner 

while also preserving the Exchange’s 

discretion to seek formal discipline for 

more serious transgressions as 

warranted. 

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) of the Act 7 and Rule 19b– 

4(f)(3) thereunder.8 Because the 

proposed rule change is concerned 

solely with the administration of the 

Exchange, the proposed rule change has 

become immediately effective upon 

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

the Act and Rule 19b–4(f)(3) thereunder. 

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–NYSE–2010–66 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–NYSE–2010–66. 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–NYSE– 

2010–66 and should be submitted on or 

before October 15, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.9

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23908 Filed 9–23–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62947; File No. SR– 

NYSEAmex–2010–96] 

Self-Regulatory Organizations; NYSE 

Amex LLC; Notice of Filing of a 

Proposed Rule Change Amending 

NYSE Amex Equities Rule 104 To 

Adopt Pricing Obligations for 

Designated 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 Amex LLC 

(‘‘NYSE Amex’’ 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 


srobinson on DSKHWCL6B1PROD with NOTICES
58454 Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Notices 

3The term Designated Percentage is defined in 

proposed Rule 104(a)(1)(B)(iii). 

4See Securities Exchange Act Release No. 62252 

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

NYSEAmex–2010–46). See also Securities 

Exchange Act Release No. 62884 (September 10, 

2010), 75 FR 56618 (September 16, 2010) (SR– 

NYSEAmex–2010–63). See also Rule 80C. 5 17 CFR 240.603. 

6 17 CFR 240.600. 

7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 15 U.S.C. 78k–1(a)(1). 

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 Equities Rule 104 to adopt 

pricing obligations for Designated 

Market Makers (‘‘DMMs’’). 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 Amex Equities Rule 104 to adopt 

pricing obligations for DMMs. Under the 

proposal, the Exchange will require 

DMMs to continuously maintain twosided bid and offer 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 DMM 

placeholder quotations 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 80C.4

Under the proposal, the Exchange will 

require DMMs to enter and maintain 

quotes priced no more than the 

Designated Percentage away from the 

NBBO. Permissible quotes are 

determined by the individual character 

of the security, the time of day in which 

the quote 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 

80C less two (2) percentage points. 

Because the Threshold Move across all 

exchanges is currently 10%, a DMM’s 

quote in a security may not be more 

than 8% away from NBBO. Once a 

permissible quote 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 80C less one-half 

percentage point (i.e. 9.5%). If the 

DMM’s resting interest exceeds the 

Defined Limit the DMM must enter new 

interest at a price not more than the 

Designated Percentage of 8% away from 

the NBBO (or identify to the Exchange 

current resting interest that satisfies the 

DMM’s obligation). For times during the 

trading day when a Trading Pause is not 

in effect under Rule 80C (e.g., before 

9:45 a.m. and after 3:35 p.m.), the 

Designated Percentage calculation will 

assume a trigger percentage of 22%. 

Therefore, a DMM must maintain a 

quote no further than 20% away from 

the NBBO and the quote 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, DMMs registered 

in those securities shall be required to 

maintain quotes no more than 30% 

away from NBBO. As with securities 

subject to Trading Pauses, once a 

permissible quote 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 DMM must enter new 

interest at a price not more than the 

Designated Percentage of 30% away 

from the NBBO (or identify to the 

Exchange current resting interest that 

satisfies the DMM’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 DMM from quoting at price 

levels that are closer to the NBBO than 

the levels required under the proposal. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Securities Exchange Act of 1934 

(the ‘‘Act’’),7 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,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 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) 9 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 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 185 / Friday, September 24, 2010 / Notices 58455 

10 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 104(a)(1)(B)(iii). 

4See Securities Exchange Act Release No. 62252 

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

NYSE–2010–39). See also Securities Exchange Act 

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

56618 (September 16, 2010) (SR–NYSE–2010–49). 

See also Rule 80C. 

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 

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–2010–96 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–NYSEAmex–2010–96. 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–NYSEAmex–2010–96 and 

should be submitted on or before 

October 15, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.10

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23970 Filed 9–23–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62948; File No. SR–NYSE– 

2010–69] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of a Proposed Rule Change 

Amending Rule 104 To Adopt Pricing 

Obligations for Designated 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, New York Stock 

Exchange LLC (‘‘NYSE’’ 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 

Rule 104 to adopt pricing obligations for 

Designated Market Makers (‘‘DMMs’’). 

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 

Rule 104 to adopt pricing obligations for 

DMMs. Under the proposal, the 

Exchange will require DMMs to 

continuously maintain two-sided bid 

and offer 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 DMM placeholder quotations 

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 80C.4

Under the proposal, the Exchange will 

require DMMs to enter and maintain 

quotes priced no more than the 

Designated Percentage away from the 

NBBO. Permissible quotes are 

determined by the individual character 

of the security, the time of day in which 

the quote 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 

80C less two (2) percentage points. 

Because the Threshold Move across all 

exchanges is currently 10%, a DMM’s 

quote in a security may not be more 

than 8% away from NBBO. Once a 

permissible quote 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 80C less one-half 

percentage point (i.e. 9.5%). If the 

DMM’s resting interest exceeds the 

Defined Limit the DMM must enter new 

interest at a price not more than the 

Designated Percentage of 8% away from 

the NBBO (or identify to the Exchange 

current resting interest that satisfies the 


srobinson on DSKHWCL6B1PROD with NOTICES