Document ID: SEC-2011-0940-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2011-07-06T04:00Z

[Federal Register Volume 76, Number 129 (Wednesday, July 6, 2011)]
[Notices]
[Pages 39455-39457]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-16888]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64772; File No. SR-NYSEAmex-2011-44]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Extending the 
Operation of Its Supplemental Liquidity Providers Pilot Until the 
Earlier of the Securities and Exchange Commission's Approval To Make 
Such Pilot Permanent or January 31, 2012

 June 29, 2011.
    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 June 21, 2011, NYSE Amex LLC (``NYSEAmex'' or the ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange proposes to extend the operation of its Supplemental 
Liquidity Providers Pilot (``SLP Pilot'' or ``Pilot'') (See Rule 107B--
NYSE Amex Equities), currently scheduled to expire on August 1, 2011, 
until the earlier of the Securities and Exchange Commission's 
(``Commission'') approval to make such Pilot permanent or January 31, 
2012. 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 Exchange 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 these 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 aspects 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 Supplemental 
Liquidity Providers Pilot,\3\ currently scheduled to expire on August 
1, 2011, until the earlier of Commission approval to make such Pilot 
permanent or January 31, 2012.
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    \3\ See Securities Exchange Act Release No. 61308 (January 7, 
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98) 
(establishing the NYSE Amex Equities SLP Pilot). See also Securities 
Exchange Act Release Nos. 61841 (April 5, 2010), 75 FR 18560 (April 
12, 2010) (SR-NYSEAmex-2010-33) (extending the operation of the SLP 
Pilot to September 30, 2010); 62814 (September 1, 2010), 75 FR 54671 
(September 8, 2010) (SR-NYSEAmex-2010-88) (extending the operation 
of the SLP Pilot to January 31, 2011); 58877 (October 29, 2008), 73 
FR 65904 (November 5, 2008) (SR-NYSE-2008-108) (establishing the SLP 
Pilot); 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009) (SR-NYSE-
2009-46) (extending the operation of the SLP Pilot to October 1, 
2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009) (SR-
NYSE-2009-100) (extending the operation of the New Market Model and 
the SLP Pilots to November 30, 2009); 61075 (November 30, 2009), 74 
FR 64112 (December 7, 2009) (SR-NYSE-2009-119) (extending the 
operation of the SLP Pilot to March 30, 2010); 61840 (April 5, 
2010), 75 FR 18563 (April 12, 2010) (SR-NYSE-2010-28) (extending the 
operation of the SLP Pilot to September 30, 2010); 62813 (September 
1, 2010), 75 FR 54686 (September 8, 2010) (SR-NYSE-2010-62) 
(extending the operation of the SLP Pilot to January 31, 2011); and 
63615 (December 29, 2010), 76 FR 611 (January 5, 2011) (SR-NYSEAmex-
2010-123) (extending the operation of the SLP Pilot to August 1, 
2011).
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Background \4\
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    \4\ The information contained herein is a summary of the NMM 
Pilot and the SLP Pilot. See supra note 4 [sic] and infra note 6 
[sic] for a fuller description of those pilots.
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    In October 2008, the New York Stock Exchange LLC (``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 NYSE. 
These changes were all elements of the NYSE's and the Exchange's 
enhanced market model referred to as the ``New Market Model'' (``NMM 
Pilot'').\5\ The NYSE SLP

[[Page 39456]]

Pilot was launched in coordination with the NMM Pilot (see NYSE Rule 
107B).
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    \5\ See Securities Exchange Act Release No. 58845 (October 24, 
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
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    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.'' \6\ Separately, 
the NYSE established the SLP Pilot, which established SLPs as a new 
class of market participants to supplement the liquidity provided by 
DMMs.\7\
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    \6\ See NYSE Rule 103.
    \7\ See NYSE and NYSE Amex Equities Rules 107B.
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    The NYSE adopted NYSE Rule 107B governing SLPs as a six-month pilot 
program commencing in November 2008. This NYSE pilot has been extended 
several times, most recently to August 1, 2011.\8\ The NYSE is in the 
process of requesting an extension of their SLP Pilot until January 31, 
2012 or until the Commission approves the pilot as permanent.\9\ The 
extension of the NYSE SLP Pilot until January 31, 2012 runs parallel 
with the extension of the NMM pilot until January 31, 2012, or until 
the Commission approves the NMM Pilot as permanent.
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    \8\ See Securities Exchange Act Release Nos. 58877 (October 29, 
2008), 73 FR 65904 (November 5, 2008) (SR-NYSE-2008-108) (adopting 
SLP pilot program); 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009) 
(SR-NYSE-2009-46) (extending SLP pilot program until October 1, 
2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009) (SR-
NYSE-2009-100) (extending SLP pilot program until November 30, 
2009); 61075 (November 30, 2009), 74 FR 64112 (December 7, 2009) 
(SR-NYSE-2009-119) (extending SLP pilot program until March 30, 
2010); 61840 (April 5, 2010), 75 FR 18563 (April 12, 2010) (SR-NYSE-
2010-28) (extending the SLP Pilot until September 30, 2010); 62813 
(September 1, 2010), 75 FR 54686 (September 8, 2010) (SR-NYSE-2010-
62) (extending the SLP Pilot until January 31, 2011); and 63616 
(December 29, 2010), 76 FR 612 (January 5, 2011) (SR-NYSE-2010-86) 
(extending the operation of the SLP Pilot to August 1, 2011).
    \9\ See SR-NYSE-2011-30.
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Proposal to Extend the Operation of the NYSE Amex Equities SLP Pilot
    NYSE Amex Equities established the SLP Pilot to provide incentives 
for quoting, to enhance competition among the existing group of 
liquidity providers, including the DMMs, and add new competitive market 
participants. NYSE Amex Equities Rule 107B is based on NYSE Rule 107B. 
NYSE Amex Rule 107B was filed with the Commission on December 30, 2009, 
as a ``me too'' filing for immediate effectiveness as a pilot 
program.\10\ The NYSE Amex Equities SLP Pilot is scheduled to end 
operation on August 1, 2011 or such earlier time as the Commission may 
determine to make the rules permanent.
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    \10\ See Securities Exchange Act Release No. 61308 (January 7, 
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98).
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    The Exchange believes that the SLP Pilot, in coordination with the 
NMM Pilot and the NYSE SLP 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 SLP Pilot (NYSE Amex Equities Rule 107B) should be 
made permanent.
    Through this filing the Exchange seeks to extend the current 
operation of the SLP Pilot until January 31, 2012, in order to allow 
the Exchange to formally submit a filing to the Commission to convert 
the Pilot rule to a permanent rule. The Exchange is currently preparing 
a rule filing seeking permission to make the NYSE Amex Equities SLP 
Pilot permanent, but does not expect that filing to be completed and 
approved by the Commission before August 1, 2011.\11\
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    \11\ The NMM Pilot was scheduled to expire on August 1, 2011 as 
well. On June 21, 2011, the NYSE filed to extend the NMM Pilot until 
January 31, 2012 (See SR-NYSE-2011-29) (extending the operation of 
the New Market Model Pilot to January 31, 2012).
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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 the instant filing is consistent with these principles 
because the SLP Pilot provides its market participants with a trading 
venue that utilizes an enhanced market structure to encourage the 
addition of liquidity and operates to reward aggressive liquidity 
providers. Moreover, the instant filing requesting an extension of the 
SLP Pilot will permit adequate time for: (i) The Exchange to prepare 
and submit a filing to make the rules governing the SLP 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

    The Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \12\ and Rule 19b-4(f)(6) thereunder.\13\ 
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 and Rule 19b-
4(f)(6)(iii) thereunder.\14\
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    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to provide the Commission 
with written notice of its intent to file the proposed rule change, 
along with a brief description and 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 fulfilled this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) \15\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\16\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest.
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    \15\ 17 CFR 240.19b-4(f)(6).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
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    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:

[[Page 39457]]

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-NYSEAmex-2011-44 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-2011-44. 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 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 offices 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-2011-44, and should be submitted on or before 
July 27, 2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-16888 Filed 7-5-11; 8:45 am]
BILLING CODE 8011-01-P