Document ID: SEC-2011-1392-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2011-09-16T04:00Z

[Federal Register Volume 76, Number 180 (Friday, September 16, 2011)]
[Notices]
[Pages 57793-57795]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23771]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65314; File No. SR-NYSEAmex-2011-69]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending Its 
Options Fee Schedule To Add Clarifying Language With Respect to 
Marketing Charges Generally and Marketing Charges for Directed Orders, 
and To Add New and Clarifying Language With Respect to Marketing 
Charges for Electronic Complex Orders

September 12, 2011.
    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 September 6, 2011, NYSE Amex LLC (the ``Exchange'' or 
``NYSE Amex'') 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. 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.
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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 Options Fee Schedule (the 
``Schedule'') to add clarifying language with respect to marketing 
charges generally and marketing charges for Directed Orders, and to add 
new and clarifying language with respect to marketing charges for 
Electronic Complex Orders. The text of the proposed rule change is 
available at the Exchange, the Commission's Public Reference Room, on 
the Commission's Web site at http://www.sec.gov, 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 current Schedule in footnote 11 describes the distribution of 
the pool of monies for marketing charges for non-Directed Orders, but 
does not include any language addressing the marketing charges for 
Directed Orders or Electronic Complex Orders. Currently, the pool of 
monies resulting from collection of marketing charges on electronic 
Directed Orders is controlled by the NYSE Amex Options Market Maker to 
which the order was directed.\4\ In addition, Electronic Complex Orders 
are treated in the same manner as non-Directed Orders, and 
consequently, the pool of monies resulting from collection of marketing 
charges on such orders is controlled by a Specialist or e-
Specialist.\5\
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    \4\ See, e.g., Securities Exchange Act Release No. 61849 (April 
6, 2010), 75 FR 18556 (April 12, 2010) (SR-NYSEAmex-2010-30).
    \5\ The Exchange recently reinstituted the standard marketing 
charges for Electronic Complex Order executions that had been 
temporarily waived in July 2010. See Securities Exchange Act Release 
No. 64524 (May 19, 2011), 76 FR 30412 (May 25, 2011) (SR-NYSEAmex-
2011-30). The Exchange had been informed by several Order Flow 
Providers that the absence of marketing charges for Customer 
executions in the complex order book was hindering their ability to 
route complex order flow to the Exchange, particularly since 
competing exchanges do allow for the collection of marketing charges 
on complex orders. Consequently, the Exchange recently resumed its 
prior practice of treating Electronic Complex Orders in the same 
manner as any other orders for the purpose of assessing payment for 
order flow charges in order to remain competitive.

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[[Page 57794]]

    After reviewing the current Schedule and the manner in which 
marketing charges are handled for Electronic Complex Orders, the 
Exchange has determined to add clarifying language to the Schedule with 
respect to marketing charges generally and marketing charges for 
Directed Orders, and to add new and clarifying language to it with 
respect to marketing charges for Electronic Complex Orders.\6\ The 
changes to the Schedule are described below.
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    \6\ NYSE Amex is not proposing to change the amount of the 
marketing charges as part of this rule change.
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    First, the Exchange proposes to amend footnote 11 of its Schedule 
to add a clarifying introductory statement that the footnote applies 
only to marketing charges.
    Second, the current text in footnote 11 relating to the collection 
and distribution of marketing charges for non-Directed Orders would 
remain unchanged. That text provides that the pool of monies resulting 
from the collection of marketing charges on electronic non-Directed 
Order flow is controlled by the Specialist or the e-Specialist with 
superior volume performance over the previous quarter 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, on a class by class basis, evaluates Specialist and e-
Specialist performance based on the number of electronic contracts 
executed at NYSE Amex per class. The Specialist/ e-Specialist with the 
best volume performance controls the pool of marketing charges 
collected on electronic non-Directed Order flow for these issues for 
the following quarter.
    Third, the Exchange proposes to add text thereafter stating its 
existing policy that the pool of monies resulting from collection of 
marketing charges on electronic Directed Order flow will be controlled 
by the NYSE Amex Options Market Maker to which the order was directed, 
and distributed by the Exchange at the direction of such NYSE Amex 
Options Market Maker to payment accepting firms.
    Fourth, the Exchange proposes to add new text to footnote 11 
stating that an ATP Holder that submits an Electronic Complex Order to 
the Exchange may designate an NYSE Amex Options Market Maker to receive 
the marketing charge and the pool of monies resulting from the 
collection of such marketing charges will be distributed by the 
Exchange at the direction of such NYSE Amex Options Market Maker to 
payment accepting firms. If an ATP Holder submits an Electronic Complex 
Order to the Exchange without designating an NYSE Amex Options Market 
Maker, the pool of monies resulting from the collection of such 
marketing charges will be distributed in the same manner as non-
Directed Order flow, as is currently the practice (and as described 
above).
    Finally, the Exchange proposes technical changes to footnote 11 to 
correct references to defined terms.
    The Exchange is not proposing any change to NYSE Amex Options Rule 
900.3NY(s), which sets forth the definition of Directed Order, NYSE 
Amex Options Rule 964.1NY, which discusses the conditions NYSE Amex 
Options Specialists and Market Makers must meet to receive Directed 
Orders, or NYSE Amex Options Rule 980NY, which governs Electronic 
Complex Order trading and provides that the Specialist Pool and 
Directed Order Market Maker guaranteed participation afforded in NYSE 
Amex Options Rule 964NY does not apply to executions against an 
Electronic Complex Order. The proposed change would only affect the 
distribution of the pool of monies resulting from marketing charges for 
Electronic Complex Orders.
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''),\7\ in general, and Section 6(b)(4) of the Act,\8\ 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 clarifying changes to the Schedule described above will 
provide more transparency to the marketing charge practices on the 
Exchange. The Exchange also believes that providing ATP Holders with 
the option to submit Electronic Complex Orders to the Exchange and 
designate an NYSE Amex Options Market Maker to direct the resulting 
marketing charges will help to attract additional Electronic Complex 
Orders to the Exchange, which will benefit all market participants. The 
Exchange operates in a highly competitive market comprised of nine U.S. 
options exchanges in which sophisticated and knowledgeable market 
participants can readily send order flow to competing exchanges if they 
deem fee levels at a particular exchange to be excessive or 
discriminatory.
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    \7\ 15 U.S.C. 78f(b). [sic]
    \8\ 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) \9\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \10\ thereunder, because it establishes a due, fee, or other charge 
imposed by the 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 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:

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-2011-69 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-2011-69. This

[[Page 57795]]

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 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-2011-69 and should be submitted on or before 
October 7, 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. 2011-23771 Filed 9-15-11; 8:45 am]
BILLING CODE 8011-01-P