Document ID: SEC-2011-0039-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2011-01-11T05:00Z

[Federal Register: January 11, 2011 (Volume 76, Number 7)]
[Notices]               
[Page 1656-1657]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11ja11-93]                         

[[Page 1656]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-63644; File No. SR-NYSEAmex-2010-125]

 
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending the 
Exchange Price List

January 5, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on December 22, 2010, NYSE Amex LLC (``NYSE Amex'' or 
``Exchange'') 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.
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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 Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its 2011 Price List for equities 
(``Price List'') to increase (i) the fees charged to customers and 
floor brokers for taking liquidity in Exchange-listed securities priced 
at $1.00 or more and (ii) the credits to customers and floor brokers 
for adding liquidity in Exchange-listed securities priced at $1.00 or 
more. The Exchange also proposes to modify the fees and credits 
applicable to Designated Market Makers (``DMMs''), including the 
creation of a two-tiered credit structure, based on consolidated 
average daily volume (``CADV'') in all Exchange-listed stocks, for 
adding liquidity in Exchange-listed securities priced at $1.00 or more, 
and the addition of a flat fee of $100 per month (in addition to the 
current rate on transactions) in issues for which the DMM has met its 
10% quoting requirement and whose CADV is less than 50,000 shares per 
day. Finally, the Exchange proposes to increase the credits applicable 
to Supplemental Liquidity Providers (``SLPs'') when adding liquidity to 
the Exchange in securities priced at $1.00 or more. The amended pricing 
will take effect on January 3, 2011. The text of the proposed rule 
change is available at the Exchange, at http://www.nyse.com, 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List for equities to 
increase (i) the fees charged to customers and floor brokers for taking 
liquidity in Exchange-listed securities priced at $1.00 or more and 
(ii) the credits to customers and floor brokers for adding liquidity in 
Exchange-listed securities priced at $1.00 or more.
    Customers and floor brokers, with certain exceptions, are currently 
charged a fee of $0.0025 per share for transactions in Exchange-listed 
securities priced at $1.00 or more that take liquidity from the 
Exchange. Under the proposal, the fee will be increased to $0.0028 per 
share for such transactions.
    Customers and floor brokers currently receive a credit of $0.0015 
per share for transactions in Exchange-listed securities priced at 
$1.00 or more that add liquidity to the Exchange. Under the proposal, 
the credit will be increased to $0.0016 per share for such 
transactions.
    The Exchange proposes to further amend its Price List for equities 
to modify the fees and credits applicable to DMMs. Currently, DMMs are 
charged a fee of $0.0015 per share for transactions in Exchange-listed 
securities priced at $1.00 or more that take liquidity from the 
Exchange. Under the proposal, the fee will be increased to $0.0016 per 
share for transactions that take liquidity.
    Additionally, DMMs currently receive a credit of $0.0035 per share 
for transactions in Exchange-listed securities priced at $1.00 or more 
that add liquidity to the Exchange. The Exchange is proposing to 
replace this with a two-tiered structure based on the CADV in all 
Exchange-listed stocks during the current month. CADV for these 
purposes includes all U.S. trading of Amex-listed stocks across all 
trading platforms whose volume is included in published numbers, not 
just shares traded on the Exchange during that month.\3\ Under the 
proposal the credit will be $0.0042 per share for transactions in 
Exchange-listed securities priced at $1.00 or more that add liquidity, 
if the CADV in all Exchange-listed stocks during the current month is 
equal to or greater than 135 million shares per day. The credit will be 
$0.0045 per share for such transactions if the CADV in all Exchange-
listed stocks during the current month is less than 135 million shares 
per day. The higher credit of $0.0045 per share provided when the CADV 
in Amex-listed stocks is under 135 million shares will provide the DMMs 
with a greater incentive to provide liquidity when the markets in Amex-
listed stocks are less active. This tiered structure, with a higher 
credit per share in lower-volume months and a lower credit per share in 
higher volume months, is also expected to result in more consistent 
month-to-month payments to DMMs by the Exchange.\4\ The Exchange is 
also adding a footnote stating that, for purposes of determining these 
liquidity credits that are based on the CADV in all Exchange-listed 
stocks in the current month, ADV calculations will exclude early 
closing days.\5\
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    \3\ See e-mail from William Love, Chief Counsel, NYSE Euronext, 
to Nathan Saunders, Special Counsel, and Andrew Madar, Special 
Counsel, Commission, dated January 4, 2011.
    \4\ Id.
    \5\ The New York Stock Exchange has had a similar footnote in 
its equities price list in the recent past, excluding early closing 
days in certain calculations based on average daily volume for a 
group of stocks. See, e.g., Exhibit 5, footnote 9, in File No. SR-
NYSE-2010-34.
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    For transactions in Exchange-listed securities priced below $1.00 
that add liquidity to the Exchange, DMMs currently receive a credit of 
0.15% of the total dollar value of the transaction. The Exchange is 
proposing that the credit for such transactions be increased to 0.25% 
of the total dollar value of the transaction.
    Further, for a less active security with a CADV during the current 
month of less than 50,000 shares per day for which the DMM has met its 
10% quoting requirement in that month, the Exchange is proposing to pay 
the DMM a monthly credit of $100 for each such security in addition to 
the current rate on transactions in that security. This additional flat 
dollar credit will supplement the DMM rebate in securities that do not 
trade actively. This flat monthly credit will be applicable to all 
Exchange-listed stocks regardless of price.

[[Page 1657]]

    Finally, the Exchange proposes to increase the credits applicable 
to SLPs when adding liquidity to the Exchange in Exchange-listed 
securities priced at $1.00 or more. For such transactions in which the 
SLP also meets the 5% average or more quoting requirement in an 
assigned security pursuant to Rule 107B (the ``5% quoting 
requirement''), the credit per share for the SLP will increase from the 
current rate of $0.0020 to $0.0027. For such transactions in which the 
SLP does not meet the 5% quoting requirement, the credit per share for 
the SLP will increase from the current rate of $0.0015 to $0.0016.
    The Exchange has also expanded the heading of the first section of 
the Price List relating to fees and credits applicable to DMMs in 
Exchange-listed securities to clarify that this section describing DMM 
fees and credits relates only to securities priced at $1.00 or more per 
share. This is a clean-up change and is not substantive in nature.
    These changes are intended to be effective immediately for all 
transactions beginning January 3, 2011.
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''),\6\ in general, and Section 6(b)(4) of the Act,\7\ 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. The Exchange believes 
that the proposal does not constitute an inequitable allocation of 
fees, as all similarly situated member organizations will be subject to 
the same fee structure and access to the Exchange's market is offered 
on fair and non-discriminatory terms. The Exchange believes that the 
proposed amendments to its equities Price List represent an equitable 
allocation of dues and fees in that the proposed increased credit of 
$0.0001 per share for adding liquidity is the same for floor brokers 
and customers, as is the increase of $0.0003 per share in the charge 
when taking liquidity. The Exchange further notes that the new equity 
per share credit of $0.0016 for adding liquidity is exactly the same 
for both customers and floor brokers, as is the new equity per share 
charge of $0.0028 for taking liquidity.\8\
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    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
    \8\ See e-mail from William Love, Chief Counsel, NYSE Euronext, 
to Nathan Saunders, Special Counsel, and Andrew Madar, Special 
Counsel, Commission, dated January 3, 2011.
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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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed on its members by NYSE Amex.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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 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. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule change should be approved or 
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 rule-comments@sec.gov. Please include 
File Number SR-NYSEAmex-2010-125 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-2010-125. 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 website 
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-2010-125 and should be submitted on or before February 1, 
2011.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-322 Filed 1-10-11; 8:45 am]
BILLING CODE 8011-01-P