Document ID: SEC-2012-0169-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2012-01-31T05:00Z

[Federal Register Volume 77, Number 20 (Tuesday, January 31, 2012)]
[Notices]
[Pages 4848-4850]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-2036]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66237; File No. SR-NYSEAmex-2012-02]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Amending NYSE Amex 
Options Rule 902NY To Create a Reserve Floor Market Maker Amex Trading 
Permit

January 25, 2012.
    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 January 24, 2012, NYSE Amex LLC (the ``Exchange'' or ``NYSE Amex'') 
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 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\ 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 NYSE Amex Options Rule 902NY to 
create a Reserve Floor Market Maker Amex Trading Permit (``Reserve 
ATP''). The text of the proposed rule change is available at the 
Exchange, the Commission's Public Reference Room, and 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 Exchange proposes to amend NYSE Amex Options Rule 902NY to 
create a Reserve ATP.
    Under the current Fee Schedule, an ATP Holder \3\ acting as a 
Market Maker must pay $5,000 per month per Amex Trading Permit 
(``ATP'').\4\ In order to act as a Floor Market Maker, an individual 
must be specifically named on the relevant Market Maker's ATP. On some 
occasions, a Floor Market Maker may be absent from the floor due to 
illness or other unexpected absence, in which case the ATP Holder may 
wish to have a Market Maker Authorized Trader \5\ (``MMAT'') employee 
engage in open outcry trading to cover for the absent Floor Market 
Maker. However, at present the ATP Holder cannot do so unless the MMAT 
employee is specifically named on the relevant ATP, and it may not be 
economical for the ATP Holder to maintain an additional ATP to address 
such unexpected or limited situations or to complete the approval 
process for an additional ATP in a timely way when a short-term need 
arises. In such cases, the ATP Holder must carry out its 
responsibilities with fewer than the optimal number of Floor Market 
Makers on the trading floor. For example, currently under NYSE Amex 
Rule 923NY, a total of four ATPs are required to stream quotes 
electronically into all option issues traded on the Exchange. 
Additionally, each ATP can have an individual named to act as a Floor 
Market Maker in open outcry trading on the Floor of the Exchange. Thus, 
an ATP Holder with four ATPs may stream quotes in every option issue on 
the Exchange and have four

[[Page 4849]]

individuals conduct trading in open outcry on the trading Floor as 
Floor Market Makers. If one of those four individuals is unavailable 
due to sickness, vacation or other reason, the ATP Holder is required 
to pay for an additional ATP (presently $5,000) in order to have 
another individual trade in open outcry as a Floor Market Maker. If the 
ATP Holder activates an individual on an ATP for any portion of a 
month, even as little as one day, the ATP Holder is charged the full 
$5,000 monthly ATP fee.
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    \3\ An ``ATP Holder'' is a natural person, sole proprietorship, 
partnership, corporation, limited liability company or other 
organization, in good standing, that has been issued an Amex Trading 
Permit. See NYSE Amex Rule 900.2NY(5).
    \4\ The fee is calculated based on the maximum number of ATPs 
held by the ATP Holder during the calendar month.
    \5\ A ``Market Maker Authorized Trader'' is an authorized trader 
who performs market making activities pursuant to Rule 920NY on 
behalf of an ATP Holder registered as a Market Maker. See NYSE Amex 
Rule 900.2NY(37). A Market Maker Authorized Trader must meet the 
same registration requirements as a Floor Market Maker before they 
can be designated as a Market Maker Authorized Trader. See NYSE Amex 
Rule 921.1NY.
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    The Exchange believes that an option should be available to Market 
Maker firms to address the short-term absence of an employee in a more 
economical way, which also would assist the Exchange in maintaining 
fair and orderly markets. In addition, certain Market Maker firms have 
requested that the Exchange amend the present system to address the 
issue of an absent Floor Market Maker. Accordingly, the Exchange 
proposes to create a Reserve ATP under which an ATP Holder would be 
permitted to have a qualified MMAT employee cover for the absent Floor 
Market Maker under the firm's ATP, effectively empowering the 
individual acting as a qualified MMAT to act as a Floor Market Maker in 
lieu of the absent individual until such time as the absent Floor 
Market Maker returns. When a Floor Market Maker is or will be absent, 
an ATP Holder that maintains a Reserve ATP would be required to provide 
written notice to the Exchange that it will utilize such Reserve ATP, 
at least a day in advance of the utilization. The notice will identify 
both the Floor Market Maker who will not be utilizing the ATP Holder's 
ATP and the MMAT who will be acting as the substitute Floor Market 
Maker. While the notice is in effect, only the specifically named MMAT 
acting as a substitute Floor Market Maker will be authorized to utilize 
the ATP. When the original Floor Market Maker returns, the ATP Holder 
will provide written notice to the Exchange, and, as of the date 
specified in the notice, the original Floor Market Maker may resume 
reliance on the ATP and the MMAT will no longer be able to utilize the 
ATP. In this manner, an ATP Holder that has purchased the four ATPs 
required to quote every issue on the Exchange would have the ability to 
ensure it has sufficient Floor Market Maker coverage in the event of an 
absence, without having to incur the full $5,000 ATP fee, by instead 
paying a Reserve ATP fee of $175 per month, which would be established 
by a separate fee filing with the Commission. The proposed fee would be 
assessed to an ATP Holder for each MMAT in its employ whom the ATP 
Holder wishes to be eligible to be named to the ATP to act as a Floor 
Market Maker to cover for another Floor Market Maker who is otherwise 
unable to be at work that day.
    Any natural person to whom a Reserve ATP is issued would be 
required, as of the date of notice, to (a) be fully qualified and 
approved by the Exchange to be an ATP Holder authorized as an MMAT; and 
(b) meet all of the requirements of an ATP Holder under the Exchange's 
rules.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\6\ in general, and furthers the objectives of Section 6(b)(5),\7\ 
in particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system. Specifically, the Exchange 
believes that the proposed rule change would provide a method for ATP 
Holders to have fully qualified personnel step in to handle other 
employees' absences without requiring the ATP Holders to pay the full 
fee every month for the ATPs used by such substitute persons, thereby 
contributing to the efficient use of ATP Holder personnel and 
resources, and fair and orderly markets. Additionally, the Exchange 
notes that it is filing this rule change to respond to the Market Maker 
firms that have requested a solution to the issues they face when they 
have an absent Floor Market Maker.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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 Exchange has filed the proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \8\ and Rule 19b-4(f)(6) thereunder.\9\ 
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.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \9\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \10\ normally 
does not become operative prior to 30 days after the date of the 
filing. However, pursuant to Rule 19b4(f)(6)(iii),\11\ 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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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 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:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NYSEAmex-2012-02 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.

[[Page 4850]]

All submissions should refer to File Number SR-NYSEAmex-2012-02. This 
file number should be included on the subject line if email 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, 100 F Street NW., 
Washington, DC 20549, 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-2012-02 and should 
be submitted on or before February 21, 2012.

    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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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-2036 Filed 1-30-12; 8:45 am]
BILLING CODE 8011-01-P