[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