[Federal Register Volume 76, Number 246 (Thursday, December 22, 2011)]
[Notices]
[Pages 79726-79727]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32817]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65995; File No. SR-NYSE-2011-63]


Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Extending the Bond Trading License and the Bond Liquidity Provider 
Pilot Program Until the Earlier of the Approval of the Securities and 
Exchange Commission to Make Such Pilot Permanent or January 19, 2013

December 16, 2011.
    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 December 8, 2011, 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, 
II, and III 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 extend the bond trading license and the 
Bond Liquidity Provider pilot program, which is currently scheduled to 
expire on January 19, 2012, until the earlier of the approval of the 
Securities and Exchange Commission (``Commission'') to make such pilot 
permanent or January 19, 2013. 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 extend the bond trading license and the 
Bond Liquidity Provider (``BLP'') pilot program, which is currently 
scheduled to expire on January 19, 2012, until the earlier of the 
Commission's approval to make such pilot permanent or January 19, 2013.
    On November 23, 2010, NYSE submitted a proposed rule change to 
establish a twelve-month pilot program to (1) adopt new Rule 87 to 
create a bond trading license for member organizations that desire to 
trade only debt securities on the NYSE, and (2) adopt new Rule 88 to 
establish BLPs, a new class of debt market participants.\4\ The 
proposed rule change was approved on January 19, 2011.\5\ The purpose 
of pilot program is to encourage market participants to bring 
additional liquidity to the Exchange's bond marketplace by providing 
incentives for quoting and adding liquidity to the market and to offer 
investors an alternative to over-the-counter trading for debt 
securities. Under Rule 87, a member organization that chooses to trade 
only bonds, or a new member organization that desires to trade only 
bonds, may apply for a bond trading license, which is available to any 
approved NYSE member organization. Under Rule 88, the Exchange provides 
incentives for

[[Page 79727]]

quoting and adding liquidity to the bond market in the form of rebates 
to BLPs that provide liquidity to the Exchange's bond market. The 
Exchange believes that the rebates encourage the additional utilization 
of, and interaction with, the NYSE; improve price discovery and 
liquidity; and encourage competitive quotes and price improvement 
opportunities. These incentives encourage BLPs to make more liquid and 
competitive markets. In return, BLPs must meet certain qualification 
and quoting obligations under the Rule.
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    \4\ See Securities Exchange Act Release No. 63444 (Dec. 6, 
2010), 75 FR 77024 (Dec. 10, 2011) (SR-NYSE-2010-74).
    \5\ See Securities Exchange Act Release No. 63736 (Jan. 19, 
2011), 76 FR 4959 (Jan. 27, 2011) (SR-NYSE-2010-74).
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    Through this filing, the Exchange seeks to extend the current 
operation of the pilot program until January 19, 2013. The Exchange 
believes that the program has added meaningful liquidity to the 
marketplace and improved both NYSE and overall market quality. The 
Exchange will continue to monitor the efficacy of the program during 
the proposed extended pilot period.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Securities Exchange Act of 1934 (the ``Act''),\6\ in 
general, and furthers the objectives of 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, 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 the proposed rule change is consistent with these principles 
in that it seeks to extend a pilot rule that expands the number of 
member organizations that can trade debt securities on the NYSE and 
creates incentives for BLPs to provide additional liquidity to the bond 
market, thereby promoting competition and a free and open market. The 
Exchange believes that investors benefit from increased transparency, 
competition, and liquidity in its bond marketplace.
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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 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

    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).
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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 19b4(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.
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    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 17 CFR 240.19b-4(f)(6)(iii).
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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 Number SR-NYSE-2011-63 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-2011-63. 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-NYSE-2011-63 and should be 
submitted on or before January 12, 2012.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2011-32817 Filed 12-21-11; 8:45 am]
BILLING CODE 8011-01-P