Document ID: SEC-2011-0592-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2011-04-27T04:00Z

[Federal Register Volume 76, Number 81 (Wednesday, April 27, 2011)]
[Notices]
[Pages 23637-23638]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-10090]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64321; File No. SR-NYSEAmex-2011-11]

Self-Regulatory Organizations; NYSE Amex LLC; Order Approving a 
Proposed Rule Change Amending Rule 103B--NYSE Amex Equities To Modify 
the Application of the Exchange's Designated Market Maker Allocation 
Policy in the Event of a Merger Involving One or More Listed Companies

April 21, 2011.

I. Introduction

    On February 24, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE 
Amex'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Rule 103B--NYSE Amex Equities (``Exchange 
Equities Rule 103B'') to modify the application of the

[[Page 23638]]

Exchange's Designated Market Maker (``DMM'') allocation policy in the 
event of a merger involving one or more listed companies. The proposed 
rule change was published for comment in the Federal Register on March 
10, 2011.\3\ The Commission received no comment letters on the 
proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 64040 (March 4, 
2011), 76 FR 13249.
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II. Description of the Proposed Rule Change

    Currently, Policy Note VI(D)(1) to Exchange Equities Rule 103B 
provides that when two NYSE Amex listed companies merge, the post-
merger listed company is assigned to the DMM in the company that is 
determined to be the survivor-in-fact (dominant company). Where no 
survivor-in-fact can be identified, the post-merger listed company may 
select one of the DMM units trading the merging companies without the 
security being referred for reallocation, or it may request that the 
matter be referred for allocation through the allocation process 
pursuant to Exchange Equities Rule 103B, Section III.
    In addition, Policy Note VI(D)(3) to Exchange Equities Rule 103B 
provides that in situations involving the merger of a listed company 
and an unlisted company, where the unlisted company is determined to be 
the survivor-in-fact, the post-merger listed company may choose to 
remain registered with the DMM unit that had traded the listed company 
entity in the merger, or it may request that the matter be referred for 
allocation through the allocation process pursuant to Exchange Equities 
Rule 103B.
    The Exchange proposes to amend Policy Notes VI(D)(1) and (3) to 
Exchange Equities Rule 103B to provide that in all listed company 
mergers, either between two listed companies or a listed company and an 
unlisted company, the management of the post-merger listed company will 
be able to choose to retain either of the incumbent DMMs (in the case 
of a merger between two listed companies) or the incumbent DMM (in the 
case of a merger between a listed company and an unlisted company) or 
request to have the security referred for reallocation. In no case will 
the policy dictate that a post-merger listed company must retain an 
incumbent DMM unless it chooses to do so.
    The Exchange also proposes to amend Policy Notes VI(D)(1) and (3) 
to provide that a DMM unit that is ineligible to receive a new 
allocation due to its failure to meet the requirements of Exchange 
Equities Rule 103B, Section II(D) and (E) will be eligible to be 
selected in its capacity as the DMM for one of the two pre-merger 
listed companies (in the case of a merger between two listed companies) 
or in its capacity as DMM of the pre-merger listed company (in the case 
of a merger between a listed company and an unlisted company), but will 
not be eligible to participate in the allocation process if the post-
merger company requests that the matter be referred for allocation 
through the allocation process pursuant to Exchange Equities Rule 103B, 
Section III. In the event that such a situation were to arise, the 
Exchange would inform the listed company of such DMM unit's 
ineligibility under Exchange Equities Rule 103B, Section II(D) or (E).

III. Discussion and Findings

    After careful review, the Commission finds that the proposed rule 
change is consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange.\4\ 
In particular, the Commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\5\ which requires, among 
other things, that the rules of a national securities exchange be 
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.
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    \4\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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    The Commission believes that the proposed rule change is consistent 
with the Act because it would provide post-merger listed companies with 
greater flexibility with respect to the DMM allocation process in 
connection with a merger.

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-NYSEAmex-2011-11) be, and 
hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-10090 Filed 4-26-11; 8:45 am]
BILLING CODE 8011-01-P