Document ID: SEC-2011-2050-0001
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 82324-82325]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-33578]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66040; File No. SR-NYSEAmex-2011-104]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change Amending NYSE 
Amex Equities Rule 500 To Extend the Operation of the Pilot Program 
That Allows Nasdaq Stock Market Securities To Be Traded on the Exchange 
Pursuant to a Grant of Unlisted Trading Privileges Until the Earlier of 
Securities and Exchange Commission Approval To Make Such Pilot 
Permanent or July 31, 2012

December 23, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on December 16, 2011, 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 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.
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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 YSE Amex Equities Rule 500 to extend 
the operation of the pilot program that allows Nasdaq Stock Market 
(``Nasdaq'') securities to be traded on the Exchange pursuant to a 
grant of unlisted trading privileges. The pilot is currently scheduled 
to expire on January 31, 2012; the Exchange proposes to extend it until 
the earlier of Securities and Exchange Commission (``Commission'') 
approval to make such pilot permanent or July 31, 2012. 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
    NYSE Amex Equities Rules 500-525, as a pilot program, govern the 
trading of any Nasdaq-listed security on the Exchange pursuant to 
unlisted trading privileges (``UTP Pilot Program'').\3\ The Exchange 
hereby seeks to extend the operation of the UTP Pilot Program, 
currently scheduled to expire on January 31, 2012, until the earlier of 
Commission approval to make such pilot permanent or July 31, 2012.
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    \3\ See Securities Exchange Act Release No. 62479 (July 9, 
2010), 75 FR 41264 (July 15, 2010) (SR-NYSEAmex-2010-31). See also 
Securities Exchange Act Release Nos. 62857 (September 7, 2010), 75 
FR 55837 (September 14, 2010) (SR-NYSEAmex-2010-89); 63601 (December 
22, 2010), 75 FR 82117 (December 29, 2010) (SR-NYSEAmex-2010-124) 
and 64746 (June 24, 2011), 76 FR 38446 (June 30, 2011) (SR-NYSEAmex-
2011-45).
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    The UTP Pilot Program includes any security listed on Nasdaq that 
(i) is designated as an ``eligible security'' under the Joint Self-
Regulatory Organization Plan Governing the Collection, Consolidation 
and Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading Privilege 
Basis, as amended (``UTP Plan''),\4\ and (ii) has been admitted to 
dealings on the Exchange pursuant to a grant of unlisted trading 
privileges in accordance with Section 12(f) of the Securities Exchange 
Act of 1934, as amended (the ``Act''),\5\ (collectively, ``Nasdaq 
Securities'').\6\
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    \4\ See Securities Exchange Act Release No. 58863 (October 27, 
2008), 73 FR 65417 (November 3, 2008) (File No. S7-24-89). The 
Exchange's predecessor, the American Stock Exchange LLC, joined the 
UTP Plan in 2001. See Securities Exchange Act Release No. 55647 
(April 19, 2007), 72 FR 20891 (April 26, 2007) (File No. S7-24-89). 
In March 2009, the Exchange changed its name to NYSE Amex LLC. See 
Securities Exchange Act Release No. 59575 (March 13, 2009), 74 FR 
11803 (March 19, 2009) (SR-NYSEALTR-2009-24).
    \5\ 15 U.S.C. 78l.
    \6\ ``Nasdaq Securities'' is included within the definition of 
``security'' as that term is used in the NYSE Amex Equities Rules. 
See NYSE Amex Equities Rule 3. In accordance with this definition, 
Nasdaq Securities are admitted to dealings on the Exchange on an 
``issued,'' ``when issued,'' or ``when distributed'' basis. See NYSE 
Amex Equities Rule 501.
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    The Exchange notes that its New Market Model Pilot (``NMM Pilot''), 
which, among other things, eliminated the function of specialists on 
the Exchange and created a new category of market participant, the 
Designated Market Maker (``DMM''),\7\ is also scheduled to end on 
January 31, 2012.\8\ The timing of the operation of the UTP Pilot 
Program was designed to correspond to that of the NMM Pilot. In 
approving the UTP Pilot Program, the Commission acknowledged that the 
rules relating to DMM benefits and duties in trading Nasdaq Securities 
on the Exchange pursuant to the UTP Pilot Program are consistent with 
the Act \9\ and noted the similarity to the NMM Pilot, particularly 
with respect to DMM obligations and benefits.\10\ Furthermore, the UTP 
Pilot Program rules pertaining to the assignment of securities to DMMs 
are substantially similar to the rules implemented through the NMM 
Pilot.\11\ The Exchange has similarly filed to extend the operation of 
the NMM Pilot until the earlier of Commission approval to make the NMM 
Pilot permanent or July 31, 2012.\12\
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    \7\ See NYSE Amex Equities Rule 103.
    \8\ See Securities Exchange Act Release No. 60758 (October 1, 
2009), 74 FR 51639 (October 7, 2009) (SR-NYSEAmex-2009-65). See also 
Securities Exchange Act Release Nos. 61030 (November 19, 2009), 74 
FR 62365 (November 27, 2009) (SR-NYSEAmex-2009-83); 61725 (March 17, 
2010), 75 FR 14223 (March 24, 2010) (SR-NYSEAmex-2010-28); 62820 
(September 1, 2010), 75 FR 54935 (September 9, 2010) (SR-NYSEAmex-
2010-86); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011) 
(SR-NYSEAmex-2010-123) and 64773 (June 29, 2011), 76 FR 39453 (July 
6, 2011) (SR-NYSEAmex-2011-43).
    \9\ 15 U.S.C. 78.
    \10\ See SR-NYSEAmex-2010-31, supra note [3] [sic], at 41271.
    \11\ Id.
    \12\ See SR-NYSEAmex-2011-102.
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    Extension of the UTP Pilot Program in tandem with the NMM Pilot, 
both from January 31, 2012 until the earlier of Commission approval to 
make such pilots permanent or July 31, 2012, will provide for the 
uninterrupted trading of Nasdaq Securities on the Exchange on a UTP 
basis and thus continue to encourage the additional utilization of, and 
interaction with, the NYSE Amex Equities market, and provide market 
participants with improved price

[[Page 82325]]

discovery, increased liquidity, more competitive quotes and greater 
price improvement for Nasdaq Securities.
2. Statutory Basis
    The Exchange believes 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. In particular, 
the Exchange believes that its proposal to extend the UTP Pilot Program 
is consistent with (i) Section 6(b) of the Act,\13\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\14\ in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, 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; (ii) Section 
11A(a)(1) of the Act,\15\ in that it seeks to ensure the economically 
efficient execution of securities transactions and fair competition 
among brokers and dealers and among exchange markets; and (iii) Section 
12(f) of the Act,\16\ which governs the trading of securities pursuant 
to UTP consistent with the maintenance of fair and orderly markets, the 
protection of investors and the public interest, and the impact of 
extending the existing markets for such securities.
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    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
    \15\ 15 U.S.C. 78k-1(a)(1).
    \16\ 15 U.S.C. 78l(f).
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    Specifically, the Exchange believes that extending the UTP Pilot 
Program would provide for the uninterrupted trading of Nasdaq 
Securities on the Exchange on a UTP basis and thus continue to 
encourage the additional utilization of, and interaction with, the NYSE 
Amex Equities market, thereby providing market participants with 
additional price discovery, increased liquidity, more competitive 
quotes and potentially greater price improvement for Nasdaq Securities. 
Additionally, under the UTP Pilot Program, Nasdaq Securities trade on 
the Exchange pursuant to rules governing the trading of Exchange-Listed 
securities that previously have been approved by the Commission. 
Accordingly, this proposed rule change would permit the Exchange to 
extend the effectiveness of the UTP Pilot Program in tandem with the 
NMM Pilot, which the Exchange has similarly proposed to extend until 
the earlier of Commission approval to make such pilot permanent or July 
31, 2012.\17\
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    \17\ See supra note 13.
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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 \18\ and Rule 19b-4(f)(6) thereunder.\19\ 
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.
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    \18\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \19\ 17 CFR 240.19b-4(f)(6).
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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-2011-104 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-2011-104. 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 NYSE's principal office and on its 
Internet Web site at www.nyse.com. 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 publicly available. All submissions should refer to 
File Number SR-NYSEAmex-2011-104 and should be submitted on or before 
January 20, 2012.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-33578 Filed 12-29-11; 8:45 am]
BILLING CODE 8011-01-P