[Federal Register Volume 75, Number 69 (Monday, April 12, 2010)]
[Notices]
[Pages 18563-18565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8219]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61840; File No. SR-NYSE-2010-28]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Extending the Operation of Its Supplemental Liquidity Providers Pilot,
NYSE Rule 107B Until the Earlier of the Securities and Exchange
Commission's Approval To Make Such Pilot Permanent or September 30,
2010
April 5, 2010.
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 March 30, 2010, New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``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 extend the operation of its Supplemental
Liquidity Providers Pilot (``SLP Pilot'' or ``Pilot'') (see Rule 107B),
until the earlier of the Securities and Exchange Commission's approval
to make such pilot permanent or September 30, 2010. The text of the
proposed rule change is available on NYSE's Web site at http://www.nyse.com, on the Commission's Web site at http://www.sec.gov, and
at 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 self-regulatory organization
included
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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 extend the operation of its Supplemental
Liquidity Providers Pilot \3\ approved by the Securities and Exchange
Commission (``SEC'' or ``Commission'') to operate until March 30, 2010,
until the earlier of the SEC's approval to make such pilot permanent or
through September 30, 2010.
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\3\ See Securities Exchange Act Release No. 58877 (October 29,
2008), 73 FR 65904 (November 5, 2008) (SR-NYSE-2008-108)
(establishing the SLP Pilot). See also Securities Exchange Act
Release No. 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009) (SR-
NYSE-2009-46) (extending the operation of the SLP Pilot to October
1, 2009). See also Securities Exchange Act Release No. 60756
(October 1, 2009), 74 FR 51628 (October 7, 2009) (SR-NYSE-2009-100)
(extending the operation of the New Market Model and the SLP Pilots
to November 30, 2009). See also Securities Exchange Act Release No.
61075 (November 30, 2009), 74 FR 64112 (December 7, 2009) (SR-NYSE-
2009-119) (extending the operation of the SLP Pilot to March 30,
2010).
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Background \4\
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\4\ The information contained herein is a summary of the NMM
Pilot and the SLP Pilot, for a fuller description of those pilots
see supra notes 1 and 2 [sic].
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In October 2008, the NYSE implemented significant changes to its
market rules, execution technology and the rights and obligations of
its market participants all of which were designed to improve execution
quality on the Exchange. These changes are all elements of the
Exchange's enhanced market model referred to as the ``New Market
Model'' (``NMM Pilot'').\5\ The SLP Pilot was launched in coordination
with the NMM Pilot (see Rule 107B).
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\5\ See Securities Exchange Act Release No. 58845 (October 24,
2008) 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
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As part of the NMM Pilot, NYSE eliminated the function of
specialists on the Exchange creating a new category of market
participant, the Designated Market Maker or DMM.\6\ Separately, the
NYSE established the SLP Pilot, which established SLPs as a new class
of market participants to supplement the liquidity provided by DMMs.\7\
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\6\ See NYSE Rule 103.
\7\ See NYSE Rules 107B.
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The SLP Pilot is scheduled to end operation on March 30, 2010 or
such earlier time as the Commission may determine to make the rules
permanent. The Exchange is currently preparing a rule filing seeking
permission to make the SLP Pilot permanent, but does not expect that
filing to be completed and approved by the Commission before March 30,
2010.\8\
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\8\ The NMM Pilot was scheduled to expire on March 30, 2010. On
March 12, 2010 the Exchange filed to extend the NMM Pilot until
September 30, 2010 (See Securities Exchange Act Release No. 61724
(March 17, 2010) (SR-NYSE-2010-25) (extending the operation of the
New Market Model Pilot to September 30, 2010); See also Securities
Exchange Act Release No. 61031 (November 19, 2009) (SR-NYSE-2009-
113) (extending the operation of the New Market Model Pilot to March
30, 2010).
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Proposal To Extend the Operation of the SLP Pilot
The NYSE established the SLP Pilot to provide incentives for
quoting, to enhance competition among the existing group of liquidity
providers, including the DMMs, and add new competitive market
participants. The Exchange believes that the SLP Pilot, in coordination
with the NMM Pilot, allows the Exchange to provide its market
participants with a trading venue that utilizes an enhanced market
structure to encourage the addition of liquidity, facilitate the
trading of larger orders more efficiently and operates to reward
aggressive liquidity providers. As such, the Exchange believes that the
rules governing the SLP Pilot (Rule 107B) should be made permanent.
Through this filing the Exchange seeks to extend the current operation
of the SLP Pilot until September 30, 2010, in order to allow the
Exchange to formally submit a filing to the Commission to convert the
pilot rule to a permanent rule.\9\
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\9\ The NYSE Amex SLP Pilot (NYSE Amex Equities Rule 107B) is
also being extended until September 30, 2010 or until the Commission
approves it as permanent (See SR-NYSEAmex-2010-33).
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2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Act'')
for this proposed rule change is the requirement under Section 6(b)(5)
\10\ that an exchange have rules that are designed 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. The Exchange
believes that the instant filing is consistent with these principles
because the SLP Pilot provides its market participants with a trading
venue that utilizes an enhanced market structure to encourage the
addition of liquidity and operates to reward aggressive liquidity
providers. Moreover, the instant filing requesting an extension of the
SLP Pilot will permit adequate time for: (i) The Exchange to prepare
and submit a filing to make the rules governing the SLP Pilot
permanent; (ii) public notice and comment; and (iii) completion of the
19b-4 approval process.
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\10\ 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
Because the foregoing proposed rule change: (i) Does not
significantly affect the protection of investors or the public
interest; (ii) does not impose any significant burden on competition;
and (iii) by its terms, does not become operative for 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, it has become effective pursuant to Section
19(b)(3)(A) of the Act \11\ and Rule 19b-4(f)(6) thereunder.\12\
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires the self-regulatory organization to submit to the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change, at least five business days prior to the date of filing of
the proposed rule change, or such shorter time as designated by the
Commission. The Exchange has satisfied this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \13\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\14\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that
[[Page 18565]]
the proposal may become operative immediately upon filing.
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\13\ 17 CFR 240.19b-4(f)(6).
\14\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest.
The Commission notes that because the pilot program will expire on
March 30, 2010, waiver of the operative delay is necessary so that no
interruption of the pilot program will occur. In addition, the
Commission notes that the Exchange has requested extensions of the
pilot to allow the Exchange time to formally request permanent approval
for the pilot. Therefore, the Commission designates the proposal
operative upon filing.\15\
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\15\ For purposes only of waiving the operative delay for this
proposal, the Commission has considered the proposed rule's impact
on efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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 [email protected]. Please include
File Number SR-NYSE-2010-28 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-NYSE-2010-28. This 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, 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 Number SR-NYSE-2010-28 and should be
submitted on or before May 3, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-8219 Filed 4-9-10; 8:45 am]
BILLING CODE 8011-01-P