[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Notices]
[Pages 79728-79729]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32816]
[[Page 79728]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-65953; File No. SR-NYSEAMEX-2011-93]
Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Adopting the Text
of Financial Industry Regulatory Authority Rule 5210, Which Prohibits
the Publication of Manipulative or Deceptive Quotations or
Transactions, as NYSE Amex Equities Rule 5210
December 14, 2011.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'') \1\, and Rule 19b-4 \2\ thereunder, notice is hereby
given that on December 7, 2011, NYSE Amex LLC (the ``Exchange'' or
``NYSE Amex'') 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 the
Substance of the Proposed Rule Change
The Exchange proposes to adopt the text of Financial Industry
Regulatory Authority (``FINRA'') Rule 5210, which prohibits the
publication of manipulative or deceptive quotations or transactions, as
NYSE Amex Equities Rule 5210. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to adopt the text of FINRA Rule 5210, which
prohibits the publication of manipulative or deceptive quotations or
transactions, as NYSE Amex Rule 5210.\3\
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\3\ See Securities Exchange Act Release No. 60835 (Oct. 16,
2009), 74 FR 54616 (Oct. 22, 2009) (SR-FINRA-2009-055). The
Exchange's affiliates, New York Stock Exchange LLC and NYSE Arca,
Inc., are proposing to adopt a substantially similar rule.
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Background
On July 30, 2007, the National Association of Securities Dealers,
Inc. (``NASD''), and NYSE Regulation, Inc. (``NYSER'') consolidated
their member firm regulation operations into a combined organization,
FINRA, and entered into a Regulatory Services Agreement (``RSA''),
under which FINRA agreed to perform certain regulatory functions of the
Exchange on behalf of the Exchange. NYSE Amex became a party to the RSA
effective December 15, 2008.\4\ On June 14, 2010, FINRA also assumed
responsibility for performing the market surveillance and enforcement
functions performed by NYSER. To facilitate FINRA's performance of
these enforcement functions and further harmonize the rules of FINRA
and NYSE Amex, the Exchange is proposing to adopt the text of FINRA
Rule 5210.\5\ FINRA Rule 5210 prohibits members from publishing or
circulating, or causing to be published or circulated, any
communication that purports to report any transaction as a purchase or
sale of any security, unless such member believes that such transaction
was a bona fide purchase or sale of such security. The Rule also
prohibits members from publishing or circulating, or causing to be
published or circulated, any communication that purports to quote the
bid price or asked price for any security, unless the member believes
that such quotation represents a bona fide bid for, or offer of, such
security.
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\4\ See Securities Exchange Act Release Nos. 56148 (July 26,
2007), 72 FR 42146 (August 1, 2007) (order approving the RSA); 56147
(July 26, 2007), 72 FR 42166 (August 1, 2007) (SR-NASD-2007-054)
(order approving the incorporation of certain NYSE Rules as ``Common
Rules''); and 60409 (July 30, 2009), 74 FR 39353 (August 6, 2009)
(order approving the amended and restated RSA, adding NYSE Amex LLC
as a party).
\5\ For consistency with Exchange rules, the Exchange proposes
to change all references from ``member'' to ``member organization.''
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The Exchange believes that the proposed rule change will strengthen
FINRA's ability to bring sanctions on behalf of the Exchange against a
member organization for engaging in manipulative forms of quoting
behavior, for example, quote stuffing and layering. FINRA Rule 5210
(formerly NASD Rule 3310 and IM 3310) \6\ was successfully used in the
Acceptance, Waiver and Consent announced in September 2010 by FINRA
against Trillium Brokerage Services and other individual
Respondents.\7\ The Exchange believes that the proposed rule change
would augment FINRA's ability on behalf of the Exchange to take action
against manipulative quoting behavior on the Exchange.
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\6\ See supra n. 3.
\7\ See http://www.finra.org/web/groups/industry/@ip/@enf/@ad/documents/industry/p122044.pdf.
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) of the
Securities Exchange Act of 1934 (the ``Act''),\8\ in general, and
furthers the objectives of Section 6(b)(5),\9\ in particular, in that
it 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 facilitating
transactions in securities, and to remove impediments to and perfect
the mechanism of a free and open market and a national market system.
Specifically, the Exchange believes that the proposed rule change would
provide an additional basis for bringing enforcement actions against
Exchange member organizations that engage in deceptive and manipulative
quoting activity. To the extent the Exchange has proposed changes that
differ from the FINRA version of the Rules, such changes are technical
in nature and do not change the substance of the FINRA Rule.
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\8\ 15 U.S.C. 78f(b).
\9\ 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.
[[Page 79729]]
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not significantly
affect the protection of investors or the public interest, does not
impose any significant burden on competition, and, 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, it has become
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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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The Exchange has requested that the Commission waive the 30-day
operative delay. The Commission believes that waiver of the operative
delay is consistent with the protection of investors and the public
interest because such waiver will allow FINRA to more effectively carry
out its enforcement activities on behalf of the Exchange. Therefore,
the Commission designates the proposal operative upon filing.\12\
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\12\ For purposes only of waiving the 30-day 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 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.
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-NYSEAMEX-2011-93 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-2011-93. 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
publicly available. All submissions should refer to File Number SR-
NYSEAMEX-2011-93, and should be submitted on or before January 12,
2012.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32816 Filed 12-21-11; 8:45 am]
BILLING CODE 8011-01-P