[Federal Register Volume 78, Number 111 (Monday, June 10, 2013)]
[Notices]
[Pages 34687-34689]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-13657]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69696; File No. SR-NYSEMKT-2013-46]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change To Amend Rule 1000--
Equities To Revise the Manner by Which the Exchange Will Phase Out the
Functionality Associated With Liquidity Replenishment Points in
Connection With the Implementation of the Limit Up-Limit Down Plan
June 4, 2013.
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 May 31, 2013 NYSE MKT LLC (the ``Exchange'' or ``NYSE
MKT'') 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 amend Rule 1000--Equities to revise the
manner by which the Exchange will phase out the functionality
associated with liquidity replenishment points (``LRPs'') in connection
with the implementation of the Limit Up-Limit Down Plan (the ``Plan'').
The text of the proposed rule change is available on the Exchange's Web
site at www.nyse.com, at the principal office of the Exchange, 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
[[Page 34688]]
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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
On April 2, 2013, the Exchange filed to amend Rule 1000--Equities
to provide that it would phase out the functionality associated with
LRPs to coincide with the implementation of the Plan by specifying
that, beginning on April 8, 2013, LRPs will no longer be in effect for
Tier 1 NMS Stocks, and beginning on the earlier of August 1, 2013 or
such date as Phase II of the Plan is implemented, LRPs will no longer
be in effect for all NMS stocks.\4\ The operative date of the LRP
Filing was April 8, 2013.
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\4\ See Securities Exchange Act Release No. 69294 (April 4,
2013), 78 FR 21441 (April 10, 2013) (SR-NYSEMKT-2013-33) (``LRP
Filing'').
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The Exchange noted in the LRP Filing that it would phase out the
LRP functionality for securities as they are covered by the Plan in
coordination with the Plan's Phase I and Phase II implementation
timelines and that LRPs would remain in place for any securities not
covered by the Plan. Because Phase I of the Plan is in effect only from
9:45 a.m. to 3:30 p.m. Eastern, under the current rule, between 9:30
and 9:45 a.m. Eastern and 3:30 and 4:00 p.m. Eastern, Tier 1 NMS Stocks
are neither covered by the Plan nor have available LRP functionality.
The Exchange therefore proposes to amend Rule 1000--Equities to
specify that LRPs will no longer be in effect for Tier 1 NMS Stocks
from the time the first Price Band under the Plan is published for a
Tier 1 NMS Stock until 3:30 p.m. Eastern (or 30 minutes before the
close on any day that the scheduled close of trading on the Exchange is
earlier than 4:00 p.m. Eastern). As proposed, LRPs would be available
for Tier 1 NMS Stocks from opening until such time the Exchange
receives a Price Band under the Plan for such stock, at which point LRP
functionality would end. The Exchange would re-engage LRP functionality
for such Tier 1 NMS Stocks at 3:30 p.m. Eastern, or, 30 minutes before
the close on any day that the scheduled close of trading on the
Exchange is earlier than 4:00 p.m. Eastern.\5\
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\5\ The Exchange is scheduled to close at 1:00 p.m. Eastern on
July 3, 2013.
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The Exchange further proposes to amend how it would phase out LRP
functionality in connection with Phase II of the Plan. Rule 1000--
Equities currently provides that LRPs will be discontinued for all NMS
Stocks on the earlier of August 1, 2013 or such date as Phase II of the
Limit Up-Limit Down Plan is implemented. Because the implementation of
Phase II is currently scheduled to begin on August 5, 2013, and will be
a roll-out implementation that will take several weeks, the Exchange
believes that the ``earlier of'' language would require the Exchange to
disable all LRP functionality on August 1, 2013, regardless of whether
an NMS Stock is subject to Phase II of the Plan.
Because the intent of the LRP Filing was to ensure that stocks not
covered by the Plan would have LRP functionality, the Exchange proposes
to amend Rule 1000--Equities to provide that LRPs will be discontinued
in their entirety on such date as Phase II of the Plan is implemented
for an NMS Stock. As amended, LRP functionality would remain available
for an NMS Stock (either full day or only for the post-open/pre-close
periods for Tier 1 NMS Stocks) until such time it is covered by Phase
II of the Plan, regardless of when Phase II is implemented for such NMS
Stock.
Because of the technology changes associated with this rule
proposal, the Exchange will implement this proposed change over a short
roll-out period and will announce by Trader Update when the LRP
functionality will be available for specific Tier 1 NMS Stocks.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of Section 6(b) of the Act,\6\ in general, and
Section 6(b)(5) of the Act,\7\ in particular, in that it is designed to
prevent fraudulent and manipulative acts and practices, to promote just
and equitable principles of trade, and to remove impediments to and
perfect the mechanism for a free and open market and a national market
system. The Exchange believes that the proposed rule change would
remove impediments to and perfect the mechanism of a free and open
market by ensuring that an NMS Stock will be covered either by LRP
functionality or the Plan during the duration of Phase I of the Plan
and implementation of Phase II of the Plan, and therefore an NMS Stock
listed on the Exchange will be protected from significant price
dislocation at all times.
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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 a burden on competition because the proposed rule change would
reinstate LRPs only during such period when an NMS Stock is not covered
by the Plan, and therefore is consistent with Exchange operations prior
to implementation of Phase I of the Plan.
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 \8\ and Rule 19b-4(f)(6) thereunder.\9\
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, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, 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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\8\ 15 U.S.C. 78s(b)(3)(A)(iii).
\9\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires the Exchange to give the Commission written notice of the
Exchange's 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) \10\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\11\ 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 the proposal
may become operative immediately upon
[[Page 34689]]
filing. The Exchange stated that it anticipates that the technology
changes associated with this rule proposal would be available on or
about June 6, 2013 and the Exchange anticipates that it would be able
to complete the technology roll out before June 21, 2013, which is an
Expiration Friday. The Exchange stated that it believes that the waiver
of the operative delay is consistent with investor protection and the
public interest because it will enable LRP functionality for those
periods when Tier 1 and Tier 2 NMS Stocks are not covered by the Plan.
Based on the Exchange's statements, the Commission believes that
waiving the operative delay is consistent with the protection of
investors and the public interest. Accordingly, the Commission hereby
grants the Exchange's request and waives the 30-day operative
delay.\12\
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\10\ 17 CFR 240.19b-4(f)(6).
\11\ 17 CFR 240.19b-4(f)(6)(iii).
\12\ For purposes only of waiving the operative delay, 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 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 [email protected]. Please include
File No. SR-NYSEMKT-2013-46 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-NYSEMKT-2013-46. 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
10:00 a.m. and 3:00 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-NYSEMKT-2013-46 and should be
submitted on or before July 1, 2013.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-13657 Filed 6-7-13; 8:45 am]
BILLING CODE 8011-01-P