Document ID: SEC-2011-2052-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2011-12-30T05:00Z

[Federal Register Volume 76, Number 251 (Friday, December 30, 2011)]
[Notices]
[Pages 82344-82346]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33582]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66044; File No. SR-NYSEAmex-2011-100]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Amending NYSE 
Amex Equities Rule 103B, Which Governs the Allocation of Securities to 
DMMs

December 23, 2011.
    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 December 15, 2011, NYSE Amex LLC (``Exchange'' or ``NYSE Amex'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Amex Equities Rule 103B, which 
governs the allocation of securities to DMMs. 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 Equities Rule 103B, which 
governs the allocation of securities to DMMs. Specifically, as 
described in more detail below, the Exchange proposes to extend the 
effective period of an allocation decision from six to twelve months, 
to permit an issuer to submit a written letter to an Exchange Selection 
Panel (``ESP'') expressing a preference for a DMM if the issuer has 
delegated authority to the Exchange to select the DMM unit, align the 
quiet period rule, and to make other conforming changes.
    First, the Exchange proposes to amend NYSE Amex Equities Rule 
103(VI)(H), the Allocation Sunset Policy, to extend the effective 
period of an allocation decision from six to twelve months. The 
Exchange believes that extending the time period that allocation 
decisions remain effective is necessary because in some instances it is 
taking initial public offerings (``IPOs'') longer than six months to 
occur after the allocation process. Extending the effective period to 
twelve months will eliminate the need for a new IPO listing to repeat 
the allocation process if the six-month effective period has lapsed and 
thereby contribute to efficiency in the allocation process.
    Second, in those instances in which an issuer has delegated 
authority to the Exchange to select the DMM unit for the issuer under 
NYSE Amex Equities Rule 103B(III)(B), the Exchange proposes to permit 
the ESP to consider, as part of the selection process, written 
submissions from the issuer that express the issuer's preference.\3\ 
The written submission from the issuer would be non-binding on the ESP. 
The Exchange previously allowed a listing company to supply a letter to 
an allocation committee, but eliminated this part of the rule when the 
Exchange streamlined the allocation process.\4\ The Exchange believes 
that allowing the issuer to provide a non-binding, written submission 
would better inform the ESP during the allocation process.
---------------------------------------------------------------------------

    \3\ Under NYSE Amex Equities Rule 103B(III), an issuer may 
either select its DMM unit directly or delegate authority to the 
Exchange to select its DMM unit.
    \4\ See Securities Exchange Act Release No. 59022 (November 26, 
2008), 73 FR 73683 (December 3, 2008) (SR-NYSEALTR-2008-10).
---------------------------------------------------------------------------

    Third, the Exchange also proposes to align the quiet period rule 
text so that the quiet period is triggered at the appropriate point, 
whether the issuer selects the DMM unit itself or delegates authority 
to the Exchange to select the DMM unit. Currently, NYSE Amex Equities 
Rule 103B(III)(A)(2) provides that, if the issuer selects the DMM unit, 
no DMM unit, or any individuals acting on its behalf, may have any 
contact with any listing company once the Exchange provides written 
notice to DMM units that the listing company is listing on the

[[Page 82345]]

Exchange. NYSE Amex Equities Rule 103B(III)(B)(1) provides that if the 
DMM unit is selected by the Exchange, then individuals associated with 
the DMM units may not communicate about the DMM unit selection process 
with members of the ESP from the time the issuer delegates the 
assignment responsibility to the Exchange until the ESP announces its 
assignment decision, but doesn't address communication with the issuer. 
To make the quiet periods more consistent regardless of the issuer's 
election, the Exchange proposes to amend NYSE Amex Equities Rule 
103B(III) to provide that after the Exchange provides written notice to 
DMM units that the issuer is listing on the Exchange, no individual 
associated with a DMM unit may contact the issuer, or the ESP if 
applicable, until the allocation is made, except as otherwise provided 
in the Rule (e.g., as permitted during the interview). The Exchange 
further proposes to add that, consistent with the manner by which the 
issuer selects a DMM unit, the ESP may also interview individuals 
associated with the DMM unit. The Exchange proposes a conforming change 
to delete the current quiet period text in NYSE Amex Equities Rule 
103B(III)(A)(2) and NYSE Amex Equities Rule 103B(III)(B)(1).
    Finally, the Exchange proposes to amend NYSE Amex Equities Rule 
103B(III)(B)(1). Currently, the Rule provides that an ESP consist of: 
(a) At least one member of the Exchange's Senior Management, as 
designated by the Chief Executive Officer of the Exchange or his or her 
designee; (b) any combination of two Exchange Senior Management or 
Exchange Floor Operations Staff, to be designated by the Executive 
Vice-President of Exchange Floor Operations or his/her designee; and 
(c) any combination of three non-DMM Executive Floor Governors or non-
DMM Floor Governors for a total of six members. The Exchange proposes 
to eliminate the reference to including non-DMM Executive Floor 
Governors in order to streamline the Rule. Executive Floor Governors 
are considered a subset of Floor Governors, and therefore both 
references are not necessary in the Rule.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\5\ in general, and 
furthers the objectives of Section 6(b)(5),\6\ 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 extending the sunset period 
from six to 12 months will foster cooperation and coordination with 
person engaged in facilitating securities transactions and will remove 
impediments to a free and open market because it recognizes that all 
IPOs may not be brought to market in a six month period and avoids 
repeating administrative steps in the listing process, thereby 
promoting efficient use of the Exchange's resources. The proposed rule 
change also supports just and equitable principles of trade by 
providing issuers with a greater opportunity for input in the 
allocation process. In addition, aligning the quiet periods under the 
Rule will promote consistency, fairness, and objectivity in the 
allocation process. Finally, the Exchange believes that the change to 
the rule text concerning the composition of the ESP is technical in 
nature and simply removes a redundancy.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 \7\ and Rule 19b-4(f)(6) thereunder.\8\ 
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, 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.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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-2011-100 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-2011-100. 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 NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing will also 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

[[Page 82346]]

submissions. You should submit only information that you wish to make 
publicly available. All submissions should refer to File Number SR-
NYSEAmex-2011-100 and should be submitted on or before January 20, 
2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33582 Filed 12-29-11; 8:45 am]
BILLING CODE 8011-01-P