[Federal Register Volume 77, Number 60 (Wednesday, March 28, 2012)]
[Notices]
[Pages 18875-18876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7382]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-66642; File No. SR-NYSEArca-2012-19]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Proposed Rule Change To Amend Commentary .01 to NYSE Arca Rule 6.35
March 22, 2012.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on March 9, 2012, NYSE Arca, Inc. (the ``Exchange'' or
``NYSE Arca'') 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\ 15 U.S.C. 78a.
\3\ 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 proposes to [sic] amend Commentary .01 to
NYSE Arca Rule 6.35. 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 Commentary .01 to NYSE Arca Rule
6.35 to allow certain cross trades effected on the Trading Floor to
count toward the Market Maker's appointment trading requirement and to
make non-substantive changes to NYSE Arca Rules 6.35, 6.37, 6.84, and
10.12.
Under NYSE Arca Rule 6.35, a Market maker is required to effect at
least 75% of its trading activity (measured in terms of contract volume
per quarter) in classes within the Market Maker's appointment.
Commentary .01 to NYSE Arca Rule 6.35 clarifies that a Market Maker's
trades effected on the Trading Floor to accommodate cross trades
executed pursuant to NYSE Arca Rule 6.47 do not count for or against
the Market Maker's 75% requirement, regardless of whether the trades
are in issues within or without the Market Maker's appointment.
The Exchange is proposing to amend Commentary .01 to NYSE Arca Rule
6.35 to allow a Market Maker's trades effected on the Trading Floor to
accommodate cross trades executed pursuant to NYSE Arca Rule 6.47 to
count toward the Market Maker's 75% requirement, regardless of whether
the trades are in issues within or without the Market Maker's
appointment.
Transactions of a Market Maker should constitute a course of
dealings reasonably calculated to contribute to the maintenance of a
fair and orderly market.\4\ Market Makers located on the Trading Floor,
when trading in option classes other than those to which they are
appointed, must continue to fulfill Market Maker obligations for that
class as if they were appointed to such class. In addition, when
present anywhere on the Options Trading Floor, with regard to all
securities traded on the Trading Floor, not just those to which they
are appointed, Market Makers may be required to undertake the general
obligations of a Market Maker at any time in response to a demand from
a Trading Official.\5\ The Exchange believes that a Market Maker
engaging in such trading is fulfilling Market Maker obligations in
addition to providing liquidity to the market and the opportunity for
price improvement, and it is appropriate to encourage such activity by
counting it toward the 75% requirement.
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\4\ See e.g., NYSE Arca Rule 6.37(a).
\5\ See e.g., NYSE Arca Rule 6.37(c).
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In addition, the Exchange notes that the proposed rule change is
similar to NYSE Amex LLC Options Rule 923NY(i), which permits all floor
trades executed by Floor Market Makers [sic] a designated Trading Zone,
not just those to which they hold an appointment, to count toward the
Market Maker's 75% requirement. While NYSE Arca Market Makers are not
appointed to a designated Trading Zone, they are subject to certain
Market Maker obligations in all classes of options while located on the
Trading Floor. As such, NYSE Arca believes that counting all floor
trades, executed to accommodate cross transactions, is consistent with
the application of NYSE Amex Rule 923NY(i) when calculating compliance
with the 75% ``in appointment'' requirement.
NYSE Arca is also proposing non-substantive changes to NYSE Arca
Rules 6.35, 6.37, 6.84, and 10.12. The Exchange proposes to replace the
term ``Primary Appointment'' which is not a defined term with the word
``appointment'' as it is used elsewhere in NYSE Arca Rule 6.35.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \6\ of the
Act, in general, and furthers the objectives of Section 6(b)(5),\7\ in
particular, in that the proposal 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 regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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. Specifically, the proposed
rule change will remove impediments to and perfect the mechanism of a
free and open market by providing an appropriate incentive for Market
Makers to provide greater liquidity and the opportunity for price
improvement on the Trading Floor, thereby benefiting all market
participants.
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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
[[Page 18876]]
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
Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
(A) By order approve or disapprove such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be 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 [email protected]. Please include
File Number SR-NYSEArca-2012-19 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-NYSEArca-2012-19. 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 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-NYSEArca-2012-19 and should
be submitted on or before April 18, 2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\8\
Kevin M. O'Neill,
Deputy Secretary.
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\8\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2012-7382 Filed 3-27-12; 8:45 am]
BILLING CODE 8011-01-P