[Federal Register Volume 78, Number 5 (Tuesday, January 8, 2013)]
[Notices]
[Pages 1290-1292]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00082]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-68561; File No. SR-NYSEMKT-2012-86]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending NYSE MKT Rule
500--Equities To Extend the Operation of the Pilot Program That Allows
Nasdaq Stock Market (``Nasdaq'') Securities To Be Traded on the
Exchange Pursuant to a Grant of Unlisted Trading Privileges
January 2, 2013.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 18, 2012, 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 Exchange. The Exchange
filed the proposal as a ``non-controversial'' proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-
4(f)(6) thereunder.\4\ 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\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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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 NYSE MKT Rule 500--Equities to
Extend the Operation of the Pilot Program that Allows Nasdaq Stock
Market (``Nasdaq'') Securities to be Traded on the Exchange Pursuant to
a Grant of Unlisted Trading Privileges. 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 the
Statutory Basis for, the Proposed Rule Change
1. Purpose
NYSE MKT Rules 500-525--Equities, as a pilot program, govern the
trading of any Nasdaq-listed security on the Exchange pursuant to
unlisted trading privileges (``UTP Pilot Program'').\5\ The Exchange
hereby seeks to extend the operation of the UTP Pilot Program,
currently scheduled to expire on January 31, 2013, until the earlier of
Commission approval to make such pilot permanent or July 31, 2013.
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\5\ See Securities Exchange Act Release No. 62479 (July 9,
2010), 75 FR 41264 (July 15, 2010) (SR-NYSEAmex-2010-31). See also
Securities Exchange Act Release Nos. 62857 (September 7, 2010), 75
FR 55837 (September 14, 2010) (SR-NYSEAmex-2010-89); 63601 (December
22, 2010), 75 FR 82117 (December 29, 2010) (SR-NYSEAmex-2010-124);
64746 (June 24, 2011), 76 FR 38446 (June 30, 2011) (SR-NYSEAmex-
2011-45); 66040 (December 23, 2011), 76 FR 82324 (December 30, 2011)
(SR-NYSEAmex-2011-104); and 67497 (July 25, 2012), 77 FR 45404 (July
31, 2012) (SR-NYSEMKT-2012-25).
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The UTP Pilot Program includes any security listed on Nasdaq that
(i) is designated as an ``eligible security'' under the Joint Self-
Regulatory Organization Plan Governing the Collection, Consolidation
and Dissemination of Quotation and Transaction Information for Nasdaq-
Listed Securities Traded on Exchanges on an Unlisted Trading Privilege
Basis, as amended (``UTP Plan''),\6\ and (ii) has been admitted to
dealings on the Exchange pursuant to a grant of unlisted trading
privileges in accordance with Section 12(f) of the Securities Exchange
Act of 1934, as amended (the ``Act''),\7\ (collectively, ``Nasdaq
Securities'').\8\
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\6\ See Securities Exchange Act Release No. 58863 (October 27,
2008), 73 FR 65417 (November 3, 2008) (File No. S7-24-89). The
Exchange's predecessor, the American Stock Exchange LLC, joined the
UTP Plan in 2001. See Securities Exchange Act Release No. 55647
(April 19, 2007), 72 FR 20891 (April 26, 2007) (File No. S7-24-89).
In March 2009, the Exchange changed its name to NYSE Amex LLC, and,
in May 2012, the Exchange subsequently changed its name to NYSE MKT
LLC. See Securities Exchange Act Release Nos. 59575 (March 13,
2009), 74 FR 11803 (March 19, 2009) (SR-NYSEALTR-2009-24) and 67037
(May 21, 2012), 77 FR 31415 (May 25, 2012) (SR-NYSEAmex-2012-32).
\7\ 15 U.S.C. 78l.
\8\ ``Nasdaq Securities'' is included within the definition of
``security'' as that term is used in the NYSE MKT Equities Rules.
See NYSE MKT Rule 3--Equities. In accordance with this definition,
Nasdaq Securities are admitted to dealings on the Exchange on an
``issued,'' ``when issued,'' or ``when distributed'' basis. See NYSE
MKT Rule 501--Equities.
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The Exchange notes that its New Market Model Pilot (``NMM Pilot''),
which, among other things, eliminated the function of specialists on
the Exchange and created a new category of market participant, the
Designated Market Maker (``DMM''),\9\ is also scheduled to end on
January 31, 2013.\10\ The timing of the operation of the UTP Pilot
Program was designed to correspond to that of the NMM Pilot. In
approving the UTP Pilot Program, the Commission acknowledged that the
rules relating to DMM benefits and duties in trading Nasdaq Securities
on the Exchange pursuant to the UTP Pilot
[[Page 1291]]
Program are consistent with the Act \11\ and noted the similarity to
the NMM Pilot, particularly with respect to DMM obligations and
benefits.\12\ Furthermore, the UTP Pilot Program rules pertaining to
the assignment of securities to DMMs are substantially similar to the
rules implemented through the NMM Pilot.\13\ The Exchange has similarly
filed to extend the operation of the NMM Pilot until the earlier of
Commission approval to make the NMM Pilot permanent or July 31,
2013.\14\
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\9\ See NYSE MKT Rule 103--Equities.
\10\ See Securities Exchange Act Release No. 60758 (October 1,
2009), 74 FR 51639 (October 7, 2009) (SR-NYSEAmex-2009-65). See also
Securities Exchange Act Release Nos. 61030 (November 19, 2009), 74
FR 62365 (November 27, 2009) (SR-NYSEAmex-2009-83); 61725 (March 17,
2010), 75 FR 14223 (March 24, 2010) (SR-NYSEAmex-2010-28); 62820
(September 1, 2010), 75 FR 54935 (September 9, 2010) (SR-NYSEAmex-
2010-86); 63615 (December 29, 2010), 76 FR 611 (January 5, 2011)
(SR-NYSEAmex-2010-123); 64773 (June 29, 2011), 76 FR 39453 (July 6,
2011) (SR-NYSEAmex-2011-43); 66042 (December 23, 2011), 76 FR 82326
(December 30, 2011) (SR-NYSEAmex-2011-102); and 67495 (July 25,
2012), 77 FR 45406 (July 31, 2012) (SR-NYSEMKT-2012-21).
\11\ 15 U.S.C. 78.
\12\ See SR-NYSEAmex-2010-31, supra note 5, at 41271.
\13\ Id.
\14\ See SR-NYSEMKT-2012-84.
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Extension of the UTP Pilot Program in tandem with the NMM Pilot,
both from January 31, 2013 until the earlier of Commission approval to
make such pilots permanent or July 31, 2013, will provide for the
uninterrupted trading of Nasdaq Securities on the Exchange on a UTP
basis and thus continue to encourage the additional utilization of, and
interaction with, the Exchange, and provide market participants with
improved price discovery, increased liquidity, more competitive quotes
and greater price improvement for Nasdaq Securities.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange. In particular,
the Exchange believes that its proposal to extend the UTP Pilot Program
is consistent with (i) Section 6(b) of the Act,\15\ in general, and
furthers the objectives of Section 6(b)(5) of the Act,\16\ 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; (ii) Section
11A(a)(1) of the Act,\17\ in that it seeks to ensure the economically
efficient execution of securities transactions and fair competition
among brokers and dealers and among exchange markets; and (iii) Section
12(f) of the Act,\18\ which governs the trading of securities pursuant
to UTP consistent with the maintenance of fair and orderly markets, the
protection of investors and the public interest, and the impact of
extending the existing markets for such securities.
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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ 15 U.S.C. 78k-1(a)(1).
\18\ 15 U.S.C. 78l(f).
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Specifically, the Exchange believes that extending the UTP Pilot
Program would provide for the uninterrupted trading of Nasdaq
Securities on the Exchange on a UTP basis and thus continue to
encourage the additional utilization of, and interaction with, the
Exchange, thereby providing market participants with additional price
discovery, increased liquidity, more competitive quotes and potentially
greater price improvement for Nasdaq Securities. Additionally, under
the UTP Pilot Program, Nasdaq Securities trade on the Exchange pursuant
to rules governing the trading of Exchange-Listed securities that
previously have been approved by the Commission. Accordingly, this
proposed rule change would permit the Exchange to extend the
effectiveness of the UTP Pilot Program in tandem with the NMM Pilot,
which the Exchange has similarly proposed to extend until the earlier
of Commission approval to make such pilot permanent or July 31,
2013.\19\
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\19\ See supra note 14.
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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
Because the foregoing proposed rule does not (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
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, provided that the self-regulatory
organization has given the Commission written notice of its intent to
file 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 proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 17 CFR 240.19b-4(f)(6).
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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 rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2012-86 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-NYSEMKT-2012-86. 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
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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-NYSEMKT-2012-86 and should
be submitted on or before January 29, 2013.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00082 Filed 1-7-13; 8:45 am]
BILLING CODE 8011-01-P