Document ID: SEC-2012-0454-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: NYSE Amex LLC
Posted Date: 2012-03-20T04:00Z

[Federal Register Volume 77, Number 54 (Tuesday, March 20, 2012)]
[Notices]
[Pages 16302-16304]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-6708]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-66599; File No. SR-NYSEAmex-2012-17]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
and Immediate Effectiveness of Proposed Rule Change Implementing Fee 
Changes Relating to Trading Nasdaq Securities Pursuant to Unlisted 
Trading Privileges

March 14, 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 March 1, 2012, NYSE Amex LLC (``NYSE Amex'' or ``Exchange'') 
filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to

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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 2012 Price List (``Price List'') 
for certain fees relating to trading securities listed on the Nasdaq 
Stock Market LLC (``Nasdaq securities'') pursuant to unlisted trading 
privileges (``UTP''). The text of the proposed rule change is available 
at the Exchange, www.nyse.com, and the Commission's Public Reference 
Room.

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 Exchange 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 these 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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Price List for certain fees 
relating to trading Nasdaq securities pursuant to UTP. The amended 
pricing will become operative on March 1, 2012.
    Currently, market participants and Designated Market Makers 
(``DMMs'') are charged a fee of $0.0004 per share for orders in Nasdaq 
securities with a share price of $1 or more and a fee of 0.20% of total 
dollar value of the transaction for orders in Nasdaq securities with a 
share price below $1 traded pursuant to UTP that take liquidity. Under 
the proposal, the fee will be $0.0027 per share for orders with a share 
price of $1 or more that take liquidity and 0.30% of total dollar value 
of the transaction for orders with a share price below $1 that take 
liquidity.
    Currently, market participants and DMMs are charged a fee of 
$0.0025 per share for orders in Nasdaq securities with a share price of 
$1 or more and a fee of 0.20% of total dollar value of the transaction 
for orders in Nasdaq securities with a share price below $1 that route 
to other markets. Under the proposal, the fee will be $0.0027 per share 
for such orders with a share price of $1 or more and .30% of total 
dollar value of the transaction for such orders with a share price 
below $1.
    Market participants, other than DMMs and Supplemental Liquidity 
Providers (``SLPs''), that provide liquidity in Nasdaq securities with 
a share price of $1 or more traded pursuant to UTP are currently paid a 
rebate of $0.0010 per share. Under the proposal, such market 
participants will be paid a rebate of $0.0030 per share.
    Currently, for orders in Nasdaq securities with a share price of $1 
or more traded pursuant to UTP that provide liquidity, DMMs are paid a 
rebate of $0.0020 per share, SLPs that meet their quoting requirements 
pursuant to NYSE Amex Rule 107B are paid a rebate of $0.0011 per share, 
and SLPs that do not meet their quoting requirements are paid a rebate 
of $0.0010 per share. Under the proposal, the rebate for such orders 
will be $0.0031 per share for DMMs, $0.0031 per share for SLPs that 
meet their quoting requirements, and $0.0030 per share for SLPs that 
provide liquidity but do not meet their quoting requirements.\3\
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    \3\ The Exchange notes that the proposed rebates will be the 
same as the rebates that were in place prior to September 1, 2011. 
See Securities Exchange Act Release No. 65283 (September 7, 2011), 
76 FR 56850 (September 14, 2011) (SR-NYSEAmex-2011-67).
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    Currently, market participants and SLPs are paid a rebate of 
$0.0020 per share for executions of displayed liquidity in Nasdaq 
securities with a share price of $1 or more when they are adding 
liquidity in orders that originally display a minimum of 2,000 shares 
with a trading price of at least $5.00 per share, as long as the order 
is not cancelled in an amount that would reduce the original displayed 
amount below 2,000 shares. Under the proposal, market participants and 
SLPs will be paid a rebate of $0.0036 per share for executions of 
displayed liquidity in Nasdaq securities with a share price of $1 or 
more when they are adding liquidity in orders that originally display a 
minimum of 2,000 shares with a trading price of at least $5.00 per 
share, as long as the order is not cancelled in an amount that would 
reduce the original displayed amount below 2,000 shares.
    Currently, DMMs receive a rebate of $0.0020 per share in Nasdaq 
securities with a share price of $1 or more traded pursuant to UTP for 
executions of the displayed portions of s-Quotes that provide liquidity 
and display 2,000 shares or more at the time of execution with a 
trading price of at least $5.00 per share. Under the proposal, DMMs 
will be paid a rebate of $0.0036 per share for executions of the 
displayed portions of s-Quotes that provide liquidity and display 2,000 
shares or more at the time of execution with a trading price of at 
least $5.00 per share.
    The Exchange also proposes a technical change to remove language in 
the Price List that references reduced fees for market participants 
that meet certain average daily executed volume requirements; those 
reduced fees were eliminated in September 2011 and this text was 
inadvertently not removed at that time.\4\ The Exchange proposes to 
include a reference within the Price List to the last date on which the 
Price List was amended.
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    \4\ See id.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of Section 6(b) of the Securities Exchange Act of 
1934 (the ``Act''),\5\ in general, and Section 6(b)(4) of the Act,\6\ 
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 market participants will be charged or 
credited the same amount and access to the Exchange's market is offered 
on fair and non-discriminatory terms.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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    With respect to the increased credits for providing liquidity, the 
Exchange believes that the credits will attract more volume to the 
Exchange from participants that are seeking to lower their overall 
transaction costs and thereby will result in a more competitive market 
in the trading of Nasdaq securities pursuant to UTP. The Exchange 
further believes that the increases in the fees for DMMs, SLPs, and 
market participants for taking liquidity are appropriate in light of 
the increase in credits for providing liquidity. The Exchange also 
believes that it is reasonable not to increase the credits for 
providing liquidity in Nasdaq securities with a share price below $1 
because there are only a small number of issues that trade below $1, 
these shares are thinly traded, and increased credits could have the 
potential of being greater than the spread, creating an inappropriate 
incentive to trade.
    The Exchange believes that raising the fee for routing to other 
markets for

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orders in Nasdaq securities with a share price of $1 or more to $0.0027 
is reasonable because the fee is lower than the fee previously charged 
by the Exchange \7\ and lower than routing fees charged by other 
markets, including BATS BYX with its CYCLE routing fee of $0.0028 per 
share.\8\ The Exchange believes that raising the fee for routing to 
other markets for orders in Nasdaq securities with a share price below 
$1 to 0.30% of total dollar value of the transaction is reasonable 
because it will cover the costs associated with routing orders away 
from the Exchange.
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    \7\ See supra note 4.
    \8\ See BATS BYX Exchange Fee Schedule, available at http://batstrading.com/resources/regulation/rule_book/BYX_Fee_Schedule.pdf.
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    With respect to the increase in rebates to DMMs, SLPs, and market 
participants for providing liquidity in 2,000 or more share orders for 
securities priced at $5 or more, the Exchange believes that the 
proposed rebates are fair given that the Exchange is increasing the fee 
for taking liquidity. The Exchange believes the fee change will attract 
more displayed liquidity, lower transaction costs, and improve overall 
trading.
    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues if they deem fee levels at a particular venue to be 
excessive. In such an environment, the Exchange must continually adjust 
its fees to remain competitive with other exchanges and with 
alternative trading systems that have been exempted from compliance 
with the statutory standards applicable to exchanges. The Exchange 
believes that the proposed rule change reflects this competitive 
environment because it will broaden the conditions under which 
customers may qualify for higher liquidity provider credits.

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 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 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 email to rule-comments@sec.gov. Please include 
File No. SR-NYSEAmex-2012-17 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 No. SR-NYSEAmex-2012-17. 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 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 No. SR-NYSEAmex-2012-17 and should be 
submitted on or before April 10, 2012.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-6708 Filed 3-19-12; 8:45 am]
BILLING CODE 8011-01-P