Document ID: SEC-2010-0550-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2010-04-12T04:00Z

[Federal Register: April 12, 2010 (Volume 75, Number 69)]
[Notices]               
[Page 18556-18558]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ap10-109]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61849; File No. SR-NYSEAmex-2010-30]

 
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Its Fee 
Schedule

April 6, 2010.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that, on March 31, 2010, NYSE Amex LLC (``NYSE Amex'' or the 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the self-regulatory 
organization. Amex filed the proposal pursuant to Section 19(b)(3)(A) 
\4\ of the Act and Rule 19b-4(f)(2) \5\ thereunder. 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\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to revise the manner in which marketing 
charges are made available to Specialists for Non-Directed orders. The 
text of the proposed rule change is available on the Commission's Web 
site at http://www.sec.gov. A copy of this filing is available on the 
Exchange's Web site at http://www.nyse.com, at the Exchange's principal 
office 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

[[Page 18557]]

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 purpose of this filing is to introduce a quantitative, 
performance based measure to be used in the allocation of the pool of 
monies created from the collection of marketing charges on electronic 
Non-Directed orders.
    Presently, marketing charges are collected by the Exchange on all 
electronically executed customer orders where a market maker is on the 
contra side. The Exchange pools the marketing fees and then distributes 
it to payment accepting firms (order flow providers) at the direction 
of the Specialist, e-Specialist, or Directed Market Maker.\6\
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    \6\ See Securities Exchange Act Release No. 59478 (February 27, 
2009) 74 FR 9857 (March 6, 2009) (SR-NYSEALTR-2009-19).
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    For those orders that are directed to a specific Specialist, e-
Specialist, or market maker (Directed orders), the Exchange pools the 
marketing fees and then distributes it to payment accepting firms 
designated by the ATP holder that the order was directed to. 
Electronically executed customer orders that are not directed to a 
specific ATP holder (Non-Directed orders) that result in the collection 
of marketing charges, create a pool of monies made available to the 
Specialist in that particular option.
    The Exchange recently introduced an e-Specialist program,\7\ and 
seeks to ensure that those ATP holders are recognized for providing 
competitive quotes and attracting order flow to the Exchange. To do so 
the Exchange proposes that the pool of monies resulting from the 
collection of marketing charges on electronic Non-Directed orders be 
controlled by the Specialist or the e-Specialist with superior volume 
performance over a trailing quarterly review period for distribution by 
the Exchange at the direction of such Specialist or e-Specialist to 
eligible payment accepting firms. In making this determination the 
Exchange will, on a class by class basis, evaluate Specialist and e-
Specialist performance based on the number of electronic contracts 
executed at NYSE Amex per class. The Specialist/e-Specialist with the 
most electronic contracts executed on NYSE Amex per class will control 
the pool of marketing charges collected on the issue for the ensuing 
quarter. The Exchange may determine in the future to include additional 
metrics in the performance calculus subject to the submission of a 
subsequent filing to the Commission and upon notice via Regulatory 
Bulletin to the participants prior to the next quarterly evaluation 
period. The calculation used at the beginning of a calendar quarter 
will remain in effect for the duration of that calendar quarter. Each 
quarter the calculation will be performed to determine if control of 
that pool of monies belongs to either the Specialist or e-Specialist. 
In the event that the better performing party no longer quotes in that 
issue, control of the pool will default to whoever the assigned 
Specialist is in the subsequent quarter. If there is no Specialist 
assigned, but there is an e-Specialist assigned, the e-Specialist shall 
have control of these monies.
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    \7\ See NYSE Amex Rule 927.4NY (e-Specialists).
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    The Exchange believes that this is an appropriate means of 
allocating control of the pool of monies created by the collection of 
marketing charges as it rewards those ATP holders who are providing 
competitive quotes and attracting order flow to the Exchange. The 
Exchange further believes that this change benefits customers by 
incentivizing greater competition amongst specialists and e-specialists 
to provide tighter spreads and attract greater order flow.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6 of the Securities Exchange Act of 1934 
(the ``Act''),\8\ in general, and Section 6(b)(4) of the Act,\9\ in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members and other persons using its facilities.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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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 foregoing rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) \10\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \11\ thereunder, because it establishes a due, fee, or other 
charge imposed by the NYSE Amex.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission may summarily abrogate 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 rule-comments@sec.gov. Please include 
File Number SR-NYSEAmex-2010-30 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-2010-30. 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

[[Page 18558]]

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-2010-30 and should be submitted 
on or before May 3, 2010.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8223 Filed 4-9-10; 8:45 am]
BILLING CODE 8011-01-P