[Federal Register Volume 74, Number 106 (Thursday, June 4, 2009)]
[Notices]
[Pages 26907-26911]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13000]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-60001; File No. SR-NYSEAmex-2009-21]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by NYSE Amex LLC Amending NYSE 
Amex Equities Rule 123E To Be More Consistent With the Exchange's 
Current Designated Market Maker System

May 29, 2009.
    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 22, 2009, 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 Exchange. NYSE Amex filed 
the proposed rule change pursuant to Section 19(b)(3)(A) of the Act \4\ 
and Rule 19b-4(f)(6) thereunder,\5\ which renders it effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend NYSE Amex Equities Rule 123E (``DMM 
Combination Review Policy'') to be more consistent with the Exchange's 
current Designated Market Maker (``DMM'') system. The text of the 
proposed rule change is available at the Exchange, the Commission's 
Public Reference Room, and http://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 NYSE Amex Equities Rule 123E (``DMM 
Combination Review Policy'') to be more consistent with the Exchange's 
current Designated Market Maker (``DMM'') system. These amendments are 
proposed to conform to amendments filed by the New York Stock Exchange 
LLC (``NYSE'').\6\
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 59383 (February 11, 
2009), 74 FR 7947 (February 20, 2009) (SR-NYSE-2009-07).
---------------------------------------------------------------------------

    I. Background
    As described more fully in a related rule filing,\7\ NYSE Euronext 
acquired The Amex Membership Corporation (``AMC'') pursuant to an 
Agreement and Plan of Merger, dated January 17, 2008 (the ``Merger''). 
In connection with the Merger, the Exchange's predecessor, the American 
Stock Exchange LLC (``Amex''), a subsidiary of AMC, became a subsidiary 
of NYSE Euronext now called NYSE Amex LLC, and continues to operate as 
a national securities exchange registered under Section 6 of the 
Securities Exchange Act of 1934, as amended (the ``Act'').\8\ The 
effective date of the Merger was October 1, 2008.
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 58673 (September 29, 
2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60 and SR-Amex 
2008-62) (approving the Merger).
    \8\ 15 U.S.C. 78f.
---------------------------------------------------------------------------

    In connection with the Merger, on December 1, 2008, the Exchange 
relocated all equities trading conducted on the Exchange legacy trading 
systems and facilities located at 86 Trinity Place, New York, New York, 
to trading systems and facilities located at 11 Wall Street, New York, 
New York (the ``Equities Relocation''). The Exchange's equity trading 
systems and facilities at 11 Wall Street (the ``NYSE Amex Trading 
Systems'') are operated by the NYSE on behalf of the Exchange.\9\
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation).
---------------------------------------------------------------------------

    As part of the Equities Relocation, NYSE Amex adopted NYSE Rules 1-
1004, subject to such changes as necessary to apply the Rules to the 
Exchange, as the NYSE Amex Equities Rules to govern trading on the NYSE 
Amex Trading Systems.\10\ The NYSE

[[Page 26908]]

Amex Equities Rules, which became operative on December 1, 2008, are 
substantially identical to the current NYSE Rules 1-1004 and the 
Exchange continues to update the NYSE Amex Equities Rules as necessary 
to conform with rule changes to corresponding NYSE Rules filed by the 
NYSE.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release No. 58705 (October 1, 
2008), 73 FR 58995 (October 8, 2008) (SR-Amex 2008-63) (approving 
the Equities Relocation); Securities Exchange Act Release No. 58833 
(October 22, 2008), 73 FR 64642 (October 30, 2008) (SR-NYSE-2008-
106) and Securities Exchange Act Release No. 58839 (October 23, 
2008), 73 FR 64645 (October 30, 2008) (SR-NYSEALTR-2008-03) 
(implementing the Bonds Relocation); Securities Exchange Act Release 
No. 59022 (November 26, 2008), 73 FR 73683 (December 3, 2008) (SR-
NYSEALTR-2008-10) (adopting amendments to NYSE Amex Equities Rules 
to track changes to corresponding NYSE Rules); Securities Exchange 
Act Release No. 59027 (November 28, 2008), 73 FR 73681 (December 3, 
2008) (SR-NYSEALTR-2008-11) (adopting amendments to Rule 62--NYSE 
Amex Equities to track changes to corresponding NYSE Rule 62).
---------------------------------------------------------------------------

    II. NYSE Amex Equities Rule 123E
    Currently, pursuant to NYSE Amex Equities Rule 123E, the Exchange 
is responsible for reviewing proposed DMM unit combinations, subject to 
certain considerations, when the proposed DMM unit combination would 
result in an aggregate of more than five percent (``Tier 1 
combination''), 10 percent (``Tier 2 combination'') or 15 percent or 
more (``Tier 3 combination'') in any one of four concentration 
measures: (1) Common stocks listed on the Exchange; (2) the 250 most 
active listed common stocks; (3) the total trading volume of common 
stock listed on the Exchange; and (4) the total dollar value of common 
stock listed on the Exchange.
    Where a proposed combination involves or would result in a DMM unit 
accounting for more than five percent of any of the ``concentration 
measures,'' the Exchange is required to review the proposed combination 
to take into consideration:
    (1) The effects of the proposed combination in terms of the 
following criteria:
    (a) Strengthening the capital base of the resulting DMM unit;
    (b) minimizing both the potential for financial failure and the 
negative consequences of any such failure on the DMM system as a whole; 
and
    (c) maintaining or increasing operational efficiencies;
    (2) commitment to the Exchange market, focusing on whether the 
constituent DMM units have worked to support, strengthen and advance 
the Exchange, its agency/auction market and its competitiveness in 
relation to other markets; and
    (3) the effect of the proposed combination on overall concentration 
of DMM units.
    Where a DMM unit currently exceeds five percent of any 
concentration measure, and then proposes a combination that would not 
result in increasing its concentration measure by more than two 
percentage points, or not result in the combined unit moving into a 
higher tier classification, the Exchange shall not review the proposed 
combination.
    When a proposed combination has a concentration percentage of 10% 
or higher in any of the four measures set forth above, NYSE Amex 
Equities Rule 123E(c)(1)(a)(i)-(iv) requires the combined entity to 
prove by a preponderance of the evidence that the proposed combination: 
(1) Would not create or foster concentration in the DMM business 
detrimental to the Exchange and its markets; (2) would foster 
competition among DMM units; (3) would enhance the performance of the 
constituent DMM unit and the quality of market of stocks involved; and 
(4) would demonstrate that, if approved, the proposed combination is 
otherwise in the public interest.
    Moreover, pursuant to NYSE Amex Equities Rule 123E(d), proposed 
combinations that would result in the DMM units accounting for more 
than 10% of a concentration measure require the proponents of the 
combination to submit an operational certification prepared by an 
independent, nationally recognized management consulting organization 
with respect to all aspects of the unit's management and 
operations.\11\ The proponents must also submit an acceptable risk 
management plan with respect to any line of business in which they 
engage.
---------------------------------------------------------------------------

    \11\ The initial rationale behind this additional requirement 
was to minimize the risk of financial and/or operational failure of 
larger specialist units.
---------------------------------------------------------------------------

    If the proposed combination has a concentration percentage greater 
than 15%, NYSE Amex Equities Rule 123E(c)(1)(b)(i)-(iv) further 
requires the combined entity to prove that the measures set forth for 
combination of 10% are satisfied by clear and convincing evidence.
    III. Proposed Amendments to NYSE Amex Equities Rule 123E
    The Exchange proposes to amend the DMM Combination review to more 
clearly define what constitutes a DMM Combination that requires review 
and approval by the Exchange. The Exchange further seeks to clarify the 
administrative process associated with that review.
    The Exchange proposes to amend NYSE Amex Equities Rule 123E to 
eliminate the current ``Tier'' system as the mechanism for determining 
the nature of the review for a proposed DMM combination. Today, there 
are four DMM units approved to operate on the Exchange; as such, any 
proposed combination has the potential to have significant impact on 
the Exchange's ability to maintain its DMM system and to provide a fair 
and orderly market place. Accordingly, the Exchange proposes to 
eliminate threshold concentration levels as the instigating factor for 
the Exchange to review a proposed DMM combination. Pursuant to proposed 
NYSE Amex Equities Rule 123E(a), any ``proposed combination'' must be 
approved by the Exchange.
    Proposed NYSE Amex Equities Rule 123E(b) defines a ``proposed 
combination'' to include changes to the current DMM unit business that 
has the potential to have a significant impact on the Exchange's 
market. As such, the Exchange will review when: (1) Two or more DMM 
units merge or otherwise combine their businesses with the result that 
the total number of existing DMM units will be reduced; (2) two or more 
DMM units combine their businesses with the result that the existing 
number of DMM units is not reduced, but one or more of the surviving 
units is substantially reduced in size; or (3) a DMM unit merges or 
otherwise combines with a non-DMM business resulting in a change of 
control of the existing DMM unit.\12\
---------------------------------------------------------------------------

    \12\ The current provisions of NYSE Amex Equities Rule 
123E(g)(4) will be deleted and not incorporated in the text of the 
proposed definition of ``proposed combination.'' NYSE Amex Equities 
Rule 123E(g)(4) includes as a definition of a DMM combination: ``an 
individual DMM leaving an existing unit and proposing to take 
securities with him or her to join another existing unit.'' 
Securities allocated on the Exchange are assigned to DMM units 
pursuant to NYSE Amex Equities Rule 103B with an individual employed 
by the unit assigned as the DMM. As such, the individual DMM on the 
NYSE [sic] is not permitted to take securities with him or her if 
the DMM becomes employed by another DMM unit. Accordingly, this 
concept is not being carried over into proposed NYSE Amex Equities 
Rule 123E.
---------------------------------------------------------------------------

    The current rule does not specify where the correspondence 
regarding a proposed combination should be directed. Through this 
amendment, the Exchange would require the proponents of a proposed 
combination to direct the correspondence to the Office of the Corporate 
Secretary.\13\ This department will be able to coordinate and 
facilitate the timely review of the request.
---------------------------------------------------------------------------

    \13\ See proposed NYSE Amex Equities Rule 123E(c).
---------------------------------------------------------------------------

    Similar to the current rule, the written submission should address 
all of the factors for review as well as: (1) Performance in any 
securities received through previous combinations or transfers of 
registrations during the

[[Page 26909]]

preceding two years; (2) whether the resulting DMM unit will maintain 
staffing adequate to the needs of the market place; (3) whether the 
proposed combined unit will have a real-time surveillance system that 
monitors DMM trading and uses exception alerts to detect unusual trades 
or trading patterns; (4) whether the proposed combined unit will have 
disaster recovery facilities for its computer network and software; (5) 
whether it has designated specific individuals to handle unusual 
situations on the Floor (if so, the names of the individuals); (6) 
whether the combined unit will employ a ``zone'' or other management 
system on the Floor (with identification of the names of the 
individuals and their specific responsibilities, as applicable); and 
(7) whether the combined unit will designate a senior staff member to 
be responsible for reviewing DMM performance data, with specific 
procedures for correcting any deficiencies identified.\14\
---------------------------------------------------------------------------

    \14\ Id.
---------------------------------------------------------------------------

    The Exchange further proposes to rescind the requirement to submit 
an operational certification prepared by an independent, nationally 
recognized management consulting organization with respect to all 
aspects of the firm's management and operations for proposed 
combinations as it related to proposed combinations of 10% or higher, 
as required by NYSE Amex Equities Rule 123E(d).
    The Exchange believes that the management and operational concerns 
contemplated by this requirement do not exist today. Specifically, the 
Exchange submits that its current rules already address and monitor the 
management and operational requirements originally contemplated by the 
performance of an independent consultant and therefore, such outside 
certification is duplicative and unnecessary.
    As a result of the New Multi-Party Regulatory Services Agreement 
(``Multi-Party RSA'') signed by FINRA, NYSE and NYSE Amex on October 1, 
2008, FINRA oversees NYSE and NYSE Amex Member Firm Regulation and 
carefully reviews organizations seeking membership with FINRA, NYSE and 
NYSE Amex.\15\ All prospective member organizations are required to 
comply with the Securities and Exchange Act of 1934 as well as its 
rules with regard to the creation and preservation of books and 
records, the corporate structure of the proposed member organization, 
the supervision and control, and the net capital requirements of the 
proposed member organization. Furthermore, these rules require annual 
audits of the member organization's financial statements by an 
independent public account and the submission of an audited financial 
and operational report to the respective Exchanges.\16\
---------------------------------------------------------------------------

    \15\ On July 30, 2007, NASD and NYSE Regulation, Inc. 
consolidated their member firm regulation operations into a combined 
organization, FINRA. Pursuant to Rule 17d-2 under the Securities 
Exchange Act of 1934, as amended (the ``Exchange Act''), NYSE, NYSE 
Regulation, Inc., and NASD entered into an agreement (the 
``Agreement'') to reduce regulatory duplication for firms that are 
members of FINRA and also members of NYSE on or after July 30, 2007 
(``Dual Members''), by allocating to FINRA certain regulatory 
responsibilities for selected NYSE rules. The Agreement includes a 
list of all of those NYSE rules for which FINRA has assumed 
regulatory responsibilities (``Common Rules''). NYSE and NYSE Amex 
entered into a regulatory contract under which NYSE Regulation 
performs regulatory functions on behalf of NYSE Amex. Some of those 
contracted regulatory functions will be performed by FINRA, pursuant 
to the Multi-Party RSA.
    Pursuant to NYSE Rule 2, approved member organizations of NYSE 
Amex are approved as NYSE member organizations. Likewise, NYSE Amex 
Equities Rule 2 provides that approved NYSE member organizations are 
approved NYSE Amex member organizations. Both NYSE and NYSE Amex 
Equities Rule 2(b) define a member organization as a registered 
broker or dealer that is a member of FINRA and approved by its 
respective Exchange as a member organization.
    \16\ See, e.g., NYSE, NYSE Amex Equities and FINRA Rules 104, 
311, 325-328, 382, and 418.
---------------------------------------------------------------------------

    The structure and regulatory concerns that accompany applications 
for membership on the Exchange in today's market have been carefully 
considered and addressed in the FINRA and NYSE Consolidated Rules. 
These Rules create a multi-tiered level of review to ensure that 
requirements related to appropriate managerial and financial 
capabilities for DMM units are in place from the onset of membership 
with the Exchange to the approval of members as DMMs.
    For example, NYSE Amex Equities Rules 98, 103, and 104 set forth 
various criteria required for the operation, management and 
responsibilities of a DMM unit on the Exchange.
    There are currently two versions of NYSE Amex Equities Rule 98 in 
the NYSE Amex Equities Rulebook. In either form, NYSE Amex Equities 
Rule 98 governs the relationship between a DMM unit and its approved 
persons (both versions of NYSE Amex Equities Rule 98) or the other 
departments, divisions or aggregation units of the member organization 
that operate an NYSE Amex DMM unit (Current NYSE Amex Equities Rule 
98). NYSE Amex Equities Rule 98 Former applies to those DMM member 
organizations and associated approved persons that were approved before 
October 1, 2008 for an exemption under Amex Rule 193, which was the 
Amex analog to NYSE Amex Equities Rule 98.
    When an NYSE Amex DMM unit either operates within a larger member 
organization with other business units or has approved persons, NYSE 
Amex Equities Rule 98 provides additional regulatory authority for NYSE 
Regulation, Inc. and FINRA to review the structure of a member 
organization's information barriers between the DMM unit and the rest 
of the member organization. Additionally, NYSE Amex Equities Rule 98 
requires that these DMM units maintain the necessary net capital 
requirements in compliance with NYSE Amex Equities Rule 103.20, 
separate and apart from the rest of the member organization.\17\
---------------------------------------------------------------------------

    \17\ NYSE Amex Equities Rule 98 is not intended to assess the 
fitness of a DMM unit; rather, it assesses whether the DMM unit is 
properly walled off from approved persons or a parent member 
organization. If a DMM unit is a stand-alone business without any 
affiliates, approved persons, or parent company, NYSE Amex Equities 
Rule 98 is inapplicable. Currently, two of the four NYSE Amex DMM 
units are stand-alone firms and therefore not subject to NYSE Amex 
Equities Rule 98.
---------------------------------------------------------------------------

    NYSE Amex Equities Rule 103 sets forth the criteria that an 
Exchange member must satisfy in order to apply as a DMM unit. As part 
of the approval process, the Exchange reviews the member organization's 
market making ability and the capital available for market making. NYSE 
Amex Equities Rule 103.20 imposes stringent net capital requirements 
for all DMM units and requires the DMM unit to immediately notify 
FINRA, on behalf of NYSE Regulation, if it is unable to comply with 
these prescribed requirements. DMM units that anticipate falling below 
the warning level of its tentative capital requirements must notify the 
Exchange, which will work closely with the DMM unit in order to develop 
a written plan to assist the DMM unit in meeting its capital 
requirement.\18\ Thereafter, compliance with the established plan is 
monitored by the Exchange and FINRA. These net capital requirements 
apply to all DMM units whether these units are stand-alone businesses 
or part of a larger member organization.
---------------------------------------------------------------------------

    \18\ NYSE Amex Equities Rule 103.20(a)(x).
---------------------------------------------------------------------------

    NYSE Amex Equities Rule 104 sets forth the dealings and 
responsibilities of DMMs and requires the DMM units to maintain 
compliance at all times with NYSE [sic] and SEC regulations. NYSE 
Regulation's Division of Market Surveillance and FINRA reviews assess 
whether DMM units are complying with their obligations as DMMs.
    Once approved as a DMM unit, FINRA and NYSE Regulation continue to 
monitor for compliance with these rules. FINRA reviews a DMM unit's

[[Page 26910]]

compliance with net capital requirements on a daily basis and examines 
DMM units on an annual basis for compliance with Exchange rules. The 
Exchange submits that the FINRA and NYSE [sic] rules applicable to 
DMMs, combined with the FINRA exam program, provide for appropriate 
monitoring and review of organizations seeking initial membership to 
the Exchange and the ability to operate as a DMM on the Exchange on an 
ongoing basis. This regulatory structure obviates the need for an 
independent consultant to perform a review of a proposed combination's 
management and operational efficiencies. The Exchange therefore 
believes that the requirement for an independent, nationally recognized 
management consulting organization review with respect to all aspects 
of the proposed combined entity's management and operations is no 
longer warranted.
    The Exchange further seeks to make the criteria for the Exchange's 
review of a proposed combination consistent with the requirements for 
operating a DMM unit. Under the proposed rule change, the Exchange will 
review whether the proposed combined entity will be able to comply with 
the provisions of NYSE Amex Equities Rule 103B, Section II \19\ which 
sets forth the process of allocating securities to the DMM units. The 
Exchange will further review the proposed combination to determine 
whether that proposed combination can comply with the provisions of 
NYSE Amex Equities Rules 98, 103 and 104 which set forth the 
requirements for the operation of a DMM unit. Additionally, the 
Exchange proposes to retain the criteria set forth in the current 
process and include as part of its review: (1) Whether the proposed 
combination minimizes both the potential for financial failure and the 
negative consequences of any such failure on the DMM system as a whole; 
(2) whether the proposed combination maintains or increases operational 
efficiencies; (3) the surviving DMM unit's commitment to the Exchange's 
market; and (4) the effect of the proposed combination on overall 
concentration of DMM units.\20\
---------------------------------------------------------------------------

    \19\ The NYSE established an allocation system based on a single 
objective measure to determine a DMM unit's eligibility to 
participate in the allocation process. See Securities Exchange 
Release No. 58363 (August 14, 2008), 73 FR 49514 (August 21, 2008) 
(SR-NYSE-2008-52). NYSE Amex adopted this allocation policy pursuant 
to the Equities Relocation.
    \20\ In addition, the Exchange seeks to eliminate references to 
certain legacy programs that were operated by the NYSE that no 
longer exist. Specifically, NYSE Amex Equities Rule 123E, 
Supplementary Material .10(a) refers to participation in a ``FACTS'' 
program.
---------------------------------------------------------------------------

    The Exchange's ultimate determination to approve or disapprove a 
proposed combination will be based upon a determination that the 
proposed combination has satisfied the criteria set forth in proposed 
NYSE Amex Equities Rule 123E(d)(1)-(5) and the Exchange determines that 
the proposed combination would: (1) Not create or foster concentration 
in the DMM business detrimental to the Exchange and its markets; (2) 
foster competition among DMM units; and (3) enhance the performance of 
the constituent DMM unit and the quality of the markets in the 
securities involved.\21\ The Exchange may condition its approval upon 
compliance by the resulting DMM unit with any steps the Exchange may 
specify to address any concerns it may have in regard to considerations 
of the above criteria.
---------------------------------------------------------------------------

    \21\ See Proposed NYSE Amex Equities Rule 123E(f).
---------------------------------------------------------------------------

    To ensure the fairness of the new process, pursuant to proposed 
NYSE Amex Equities Rule 123E(f), the Exchange must approve or 
disapprove a proposed combination within ten (10) business days of the 
written submission. The Exchange reserves the right to extend its 
review process if the information submitted by the proponents of the 
DMM combination is inadequate or requires additional time to review in 
order for the Exchange to reach a decision.
    In any instance where the Exchange does not approve a proposed 
combination, the proponents of such proposed combination have a right 
to have such decision reviewed by the Exchange's Board of Directors.

Conclusion

    The Exchange believes that the proposed modifications to the 
Exchange's current administrative procedures relating to the review of 
a proposed DMM combination reflect the current operational structure of 
DMM systems on the Exchange. These proposed modifications also clarify 
what constitutes a proposed combination and amends the criteria used to 
review the proposed combination. Moreover, by establishing a deadline 
for the completion of the review and a right to appeal to the Exchange 
Board of Directors, NYSE Amex believes that its process will be fair 
and allow member organizations to properly manage their business 
initiatives.
    Finally, the Exchange notes that these proposed amendments would 
conform the DMM Combination Policy of NYSE Amex Equities Rule 123E to 
the DMM Combination Policy of its affiliated exchange, the New York 
Stock Exchange LLC.
2. Statutory Basis
    The basis under the Act for the proposed rule change is the 
requirement under Section 6(b)(5),\22\ which requires that an exchange 
have rules that are designed 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. The proposed rule change is 
consistent with these objectives in that it enables the Exchange to 
further enhance the process by which it reviews proposed combinations 
of DMM units. Through the instant filing to make its internal 
administrative process related to the Exchange review of a proposed DMM 
combination consistent with the underlying requirements for DMMs and 
maintaining criteria that fosters the DMM system, the Exchange believes 
that it is facilitating transactions.
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    Specifically, the Exchange believes that the proposed changes to 
the DMM combination review process are necessary to facilitate the 
continuation of its DMM system which allows the Exchange to provide its 
market participants with a market maker that is responsible for: (i) 
Providing liquidity to the market when there is a recognized need for 
additional liquidity; (ii) bridging the gap between supply/demand by 
purchasing when no one else is buying or selling when no one else is 
selling; and (iii) overall maintaining a fair and orderly market, that 
ultimately removes impediments to and perfects the mechanism of a free 
and open market and a national market system and, in general, protects 
investors and the public interest.

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.

[[Page 26911]]

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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms, does not become operative for 30 days after the 
date of filing, 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 \23\ and Rule 19b-4(f)(6) thereunder.\24\
---------------------------------------------------------------------------

    \23\ 15 U.S.C. 78s(b)(3)(A).
    \24\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing.\25\ However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. The Exchange requested that the Commission waive 
the 30-day operative delay and designate the proposed rule change 
operative upon filing.
---------------------------------------------------------------------------

    \25\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the 
Commission 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.
---------------------------------------------------------------------------

    The Exchange believes that the instant filing is non-controversial 
because the proposed amendments remove impediments to and perfect the 
mechanism of a free and open market and a national market system by 
creating systems and procedures for the Exchange to efficiently 
evaluate and approve proposed DMM combinations in light of the evolving 
market system. The Commission notes that these proposed amendments 
would conform the DMM Combination Review Policy of NYSE Amex Equities 
Rule 123E to the DMM Combination Review Policy of its affiliated 
exchange, NYSE.
    The Exchange believes that good cause exists to justify waiver of 
the 30-day operative delay in order to immediately eliminate the 
disparity between NYSE's and NYSEAmex's DMM Combination Review Policies 
and to immediately allow the Exchange to implement procedures for 
reviewing proposed mergers, acquisitions and other combinations between 
or among DMM units that are appropriate in the current marketplace. The 
proposed rule changes update the combination review policy that was 
created in 1994, for the NYSE market structure, which did not 
adequately contemplate the conditions of today's market.
    Additionally, the Exchange believes that good cause exists to 
justify waiver of the 30-day operative delay in order to avoid 
potential delays in proposed DMM combinations that would support, 
strengthen, and advance the Exchange and its market, and would 
ultimately benefit its investors and the public interest. The Exchange 
believes that this proposed rule change provides guidelines to proposed 
combinations and ensures that these proposed combinations do not foster 
business detrimental to the Exchange, but also enhances the performance 
of the DMM unit and the quality of markets. By doing so, the Exchange 
believes, this proposed rule change ultimately protects the customers 
and the public interest and should be immediately effective in order to 
promote investor protection.
    In light of the forgoing, the Commission believes that waiving the 
30-day operative delay is consistent with the protection of investors 
and the public interest. Therefore, the Commission designates the 
proposal operative upon filing.\26\
---------------------------------------------------------------------------

    \26\ 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).
---------------------------------------------------------------------------

    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.\27\
---------------------------------------------------------------------------

    \27\ 15 U.S.C. 78s(b)(3)(C).
---------------------------------------------------------------------------

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-NYSEAmex-2009-21 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-2009-21. 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 inspection 
and copying in the Commission's Public Reference Room 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-NYSEAmex-2009-21 and should be submitted on or before 
June 25, 2009.
---------------------------------------------------------------------------

    \28\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\28\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-13000 Filed 6-3-09; 8:45 am]
BILLING CODE 8010-01-P