[Federal Register Volume 78, Number 124 (Thursday, June 27, 2013)]
[Notices]
[Pages 38764-38765]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15368]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-69819; File No. SR-NYSE-2013-44]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Extending the Operation of Its Supplemental Liquidity Providers Pilot,
Until the Earlier of the Securities and Exchange Commission's Approval
To Make Such Pilot Permanent or January 31, 2014
June 21, 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 June 17, 2013, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by the Exchange. 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 proposes to [sic] extend the operation of
its Supplemental Liquidity Providers Pilot (``SLP Pilot'' or ``Pilot'')
(See Rule 107B), currently scheduled to expire on July 31, 2013, until
the earlier of the Securities and Exchange Commission's
(``Commission'') approval to make such Pilot permanent or January 31,
2014. 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, 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 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 operation of its SLP Pilot,\4\
currently scheduled to expire on July 31, 2013, until the earlier of
Commission approval to make such Pilot permanent or January 31, 2014.
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\4\ See Securities Exchange Act Release No. 58877 (October 29,
2008), 73 FR 65904 (November 5, 2008) (SR-NYSE-2008-108)
(establishing the SLP Pilot). See also Securities Exchange Act
Release Nos. 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009) (SR-
NYSE-2009-46) (extending the operation of the SLP Pilot to October
1, 2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009)
(SR-NYSE-2009-100) (extending the operation of the NMM and the SLP
Pilots to November 30, 2009); 61075 (November 30, 2009), 74 FR 64112
(December 7, 2009) (SR-NYSE-2009-119) (extending the operation of
the SLP Pilot to March 30, 2010); 61840 (April 5, 2010), 75 FR 18563
(April 12, 2010) (SR-NYSE-2010-28) (extending the operation of the
SLP Pilot to September 30, 2010); 62813 (September 1, 2010), 75 FR
54686 (September 8, 2010) (SR-NYSE-2010-62) (extending the operation
of the SLP Pilot to January 31, 2011); 63616 (December 29, 2010), 76
FR 612 (January 5, 2011) (SR-NYSE-2010-86) (extending the operation
of the SLP Pilot to August 1, 2011); 64762 (June 28, 2011), 76 FR
39145 (July 5, 2011) (SR-NYSE-2011-30) (extending the operation of
the SLP Pilot to January 31, 2012); 66045 (December 23, 2011), 76 FR
82342 (December 30, 2011) (SR-NYSE-2011-66) (extending the operation
of the SLP Pilot to July 31, 2012); 67493 (July 25, 2012), 77 FR
45388 (July 31, 2012) (SR-NYSE-2012-27) (extending the operation of
the SLP Pilot to January 31, 2013); and 68560 (January 2, 2013), 78
FR 1280 (January 8, 2013) (SR-NYSE-2012-76) (extending the operation
of the SLP Pilot to July 31, 2013).
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Background \5\
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\5\ The information contained herein is a summary of the NMM
Pilot and the SLP Pilot. See supra note 4 for a fuller description
of those pilots.
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In October 2008, the NYSE implemented significant changes to its
market rules, execution technology and the rights and obligations of
its market participants all of which were designed to improve execution
quality on the Exchange. These changes are all elements of the
Exchange's enhanced market model referred to as the ``New Market
Model'' (``NMM Pilot'').\6\ The SLP Pilot was launched in coordination
with the NMM Pilot (see Rule 107B).
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\6\ See Securities Exchange Act Release No. 58845 (October 24,
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
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As part of the NMM Pilot, NYSE eliminated the function of
specialists on the Exchange creating a new category of market
participant, the Designated Market Maker or DMM.\7\ Separately, the
NYSE established the SLP Pilot, which established SLPs as a new class
of market participants to supplement the liquidity provided by DMMs.\8\
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\7\ See NYSE Rule 103.
\8\ See NYSE Rule 107B. The Exchange amended the monthly volume
requirements to an ADV that is a specified percentage of NYSE CADV.
See Securities Exchange Act Release No. 67759 (August 30, 2012), 77
FR 54939 (September 6, 2012) (SR-NYSE-2012-38).
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The SLP Pilot is scheduled to end operation on July 31, 2013 or
such earlier time as the Commission may determine to make the rules
permanent. The Exchange is currently preparing a rule filing seeking
permission to make the SLP Pilot permanent, but does not expect that
filing to be completed and approved by the Commission before July 31,
2013.\9\
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\9\ The NMM Pilot was scheduled to expire on July 31, 2013. On
June 14, 2013 the Exchange filed to extend the NMM Pilot until
January 31, 2014. See (SR-NYSE-2013-42). See also Securities
Exchange Act Release Nos. 78 FR 1288 (January 8, 2013) (SR-NYSE-
2012-75) (extending the operation of the NMM Pilot to July 31,
2013), 67494 (July 25, 2012), 77 FR 45408 (July 31, 2012) (SR-NYSE-
2012-26) (extending the operation of the NMM Pilot to January 31,
2013); 66046 (December 23, 2011), 76 FR 82340 (December 30, 2011)
(SR-NYSE-2011-65) (extending the operation of the NMM Pilot to July
31, 2012); 64761 (June 28, 2011) 76 FR 39147 (July 5, 2011) (SR-
NYSE-2011-29) (extending the operation of the NMM Pilot to January
31, 2012); 63618 (December 29, 2010) 76 FR 617 (January 5, 2011)
(SR-NYSE-2010-85) (extending the operation of the NMM Pilot to
August 1, 2011); 62819 (September 1, 2010), 75 FR 54937 (September
9, 2010) (SR-NYSE-2010-61) (extending the operation of the NMM Pilot
to January 31, 2011); 61724 (March 17, 2010), 75 FR 14221 (SR-NYSE-
2010-25) (extending the operation of the NMM Pilot to September 30,
2010); and 61031 (November 19, 2009), 74 FR 62368 (SR-NYSE-2009-113)
(extending the operation of the NMM Pilot to March 30, 2010).
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Proposal To Extend the Operation of the SLP Pilot
The NYSE established the SLP Pilot to provide incentives for
quoting, to enhance competition among the existing group of liquidity
providers, including the DMMs, and add new competitive market
participants. The Exchange believes that the SLP Pilot, in
[[Page 38765]]
coordination with the NMM Pilot, allows the Exchange to provide its
market participants with a trading venue that utilizes an enhanced
market structure to encourage the addition of liquidity, facilitate the
trading of larger orders more efficiently and operates to reward
aggressive liquidity providers. As such, the Exchange believes that the
rules governing the SLP Pilot (Rule 107B) should be made permanent.
Through this filing the Exchange seeks to extend the current operation
of the SLP Pilot until January 31, 2014, in order to allow the Exchange
to formally submit a filing to the Commission to convert the Pilot rule
to a permanent rule.\10\
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\10\ The NYSE MKT SLP Pilot (NYSE MKT Rule 107B--Equities) is
also being extended until January 31, 2014 or until the Commission
approves it as permanent (See SR-NYSEMKT-2013-52).
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2. Statutory Basis
The basis under the Securities Exchange Act of 1934 (the ``Act'')
for this proposed rule change is the requirement under Section 6(b)(5)
that an exchange have rules that are designed 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 that the instant filing is consistent with these principles
because the SLP Pilot provides its market participants with a trading
venue that utilizes an enhanced market structure to encourage the
addition of liquidity and operates to reward aggressive liquidity
providers. Moreover, the instant filing requesting an extension of the
SLP Pilot will permit adequate time for: (i) the Exchange to prepare
and submit a filing to make the rules governing the SLP Pilot
permanent; (ii) public notice and comment; and (iii) completion of the
19b-4 approval process.
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. The Exchange believes that
extending the operation of the SLP Pilot will enhance competition among
liquidity providers and thereby improve execution quality on the
Exchange.
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 \11\ and Rule 19b-4(f)(6) thereunder.\12\
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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\11\ 15 U.S.C. 78s(b)(3)(A)(iii).
\12\ 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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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-2013-44 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-2013-44. 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 publicly available. All
submissions should refer to File Number SR-NYSE-2013-44 and should be
submitted on or before July 18, 2013.
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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2013-15368 Filed 6-26-13; 8:45 am]
BILLING CODE 8011-01-P