[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