[Federal Register Volume 78, Number 5 (Tuesday, January 8, 2013)]
[Notices]
[Pages 1284-1286]
[FR Doc No: 2013-00078]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-68557; File No. SR-NYSEMKT-2012-85]

Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Extending the Operation
of Its Supplemental Liquidity Providers Pilot (Rule 107B--Equities)
Until the Earlier of the Securities and Exchange Commission's Approval
To Make Such Pilot Permanent or July 31, 2013

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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to extend the operation of its Supplemental
Liquidity Providers Pilot (``SLP Pilot'' or ``Pilot'') (See Rule 107B--
Equities), currently scheduled to expire on January 31, 2013, until the
earlier of the Securities and Exchange Commission's (``Commission'')
approval to make such Pilot permanent or July 31, 2013. 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
    The Exchange proposes to extend the operation of its SLP Pilot,\5\
currently scheduled to expire on January 31, 2013, until the earlier of
Commission approval to make such Pilot permanent or July 31, 2013.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 61308 (January 7,
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98)
(establishing the NYSE Amex Equities SLP Pilot). See also Securities
Exchange Act Release Nos. 61841 (April 5, 2010), 75 FR 18560 (April
12, 2010) (SR-NYSEAmex-2010-33) (extending the operation of the SLP
Pilot to September 30, 2010); 62814 (September 1, 2010), 75 FR 54671
(September 8, 2010) (SR-NYSEAmex-2010-88) (extending the operation
of the SLP Pilot to January 31, 2011); 63615 (December 29, 2010), 76
FR 611 (January 5, 2011) (SR-NYSEAmex-2010-123) (extending the
operation of the SLP Pilot to August 1, 2011); 64772 (June 29,
2011), 76 FR 39455 (July 6, 2011) (SR-NYSEAmex-2011-44) (extending
the operation of the SLP Pilot to January 31, 2012); 66041 (December
23, 2011), 76 FR 82328 (December 30, 2011) (SR-NYSEAmex-2011-103)
(extending the operation of the SLP Pilot to July 31, 2012); and
67496 (July 25, 2012), 77 FR 45390 (July 31, 2012) (SR-NYSEMKT-2012-
22) (extending the operation of the SLP Pilot to January 31, 2013).
---------------------------------------------------------------------------

Background \6\
---------------------------------------------------------------------------

    \6\ The information contained herein is a summary of the NMM
Pilot and the SLP Pilot. See supra note 5 and Infra note 7 for a
fuller description of those pilots.
---------------------------------------------------------------------------

    In October 2008, the New York Stock Exchange LLC (``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 NYSE.
These changes were all elements of the NYSE's and the Exchange's
enhanced market model referred to as the ``New Market Model'' (``NMM
Pilot'').\7\ The NYSE SLP Pilot was launched in coordination with the
NMM Pilot (see NYSE Rule 107B).
---------------------------------------------------------------------------

    \7\ See Securities Exchange Act Release No. 58845 (October 24,
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46).
---------------------------------------------------------------------------

    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.'' \8\ Separately,
the NYSE established the SLP Pilot, which established SLPs as a new
class of market participants to supplement the liquidity provided by
DMMs.\9\
---------------------------------------------------------------------------

    \8\ See NYSE Rule 103.
    \9\ See NYSE Rule 107B and NYSE MKT Rule 107B--Equities. NYSE
amended the monthly volume requirements to an ADV that is a
specified percentage of NYSE CADV. See Securities Exchange Act
Release No. 67759 (August 20, 2012), 77 FR 54939 (September 6, 2012)
(SR-NYSEMKT-2012-38).
---------------------------------------------------------------------------

    The NYSE adopted NYSE Rule 107B governing SLPs as a six-month pilot
program commencing in November 2008. This NYSE pilot has been extended
several times, most recently to January 31, 2013.\10\ The NYSE is in
the

process of requesting an extension of their SLP Pilot until July 31,
2013 or until the Commission approves the pilot as permanent.\11\ The
extension of the NYSE SLP Pilot until July 31, 2013 runs parallel with
the extension of the NMM pilot until July 31, 2013, or until the
Commission approves the NMM Pilot as permanent.
---------------------------------------------------------------------------

    \10\ See Securities Exchange Act Release Nos. 58877 (October 29,
2008), 73 FR 65904 (November 5, 2008) (SR-NYSE-2008-108) (adopting
SLP Pilot program); 59869 (May 6, 2009), 74 FR 22796 (May 14, 2009)
(SR-NYSE-2009-46) (extending SLP Pilot program until October 1,
2009); 60756 (October 1, 2009), 74 FR 51628 (October 7, 2009) (SR-
NYSE-2009-100) (extending SLP Pilot program until November 30,
2009); 61075 (November 30, 2009), 74 FR 64112 (December 7, 2009)
(SR-NYSE-2009-119) (extending SLP Pilot program until March 30,
2010); 61840 (April 5, 2010), 75 FR 18563 (April 12, 2010) (SR-NYSE-
2010-28) (extending the SLP Pilot until September 30, 2010); 62813
(September 1, 2010), 75 FR 54686 (September 8, 2010) (SR-NYSE-2010-
62) (extending the SLP Pilot until 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); and 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).
    \11\ See SR-NYSE-2012-76.
---------------------------------------------------------------------------

Proposal To Extend the Operation of the NYSE MKT SLP Pilot
    The Exchange 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. NYSE MKT Rule 107B--Equities is based on NYSE Rule 107B.
NYSE MKT Rule 107B--Equities was filed with the Commission on December
30, 2009, as a ``me too'' filing for immediate effectiveness as a pilot
program.\12\ The Exchange's SLP Pilot is scheduled to end operation on
January 31, 2013 or such earlier time as the Commission may determine
to make the rules permanent.
---------------------------------------------------------------------------

    \12\ See Securities Exchange Act Release No. 61308 (January 7,
2010), 75 FR 2573 (January 15, 2010) (SR-NYSEAmex-2009-98).
---------------------------------------------------------------------------

    The Exchange believes that the SLP Pilot, in coordination with the
NMM Pilot and the NYSE SLP 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 (NYSE MKT Rule 107B--Equities) should be
made permanent.
    Through this filing the Exchange seeks to extend the current
operation of the SLP Pilot until July 31, 2013, in order to allow the
Exchange to formally submit a filing to the Commission to convert the
SLP Pilot rule to a permanent rule. The Exchange is currently preparing
a rule filing seeking permission to make the Exchange's SLP Pilot
permanent, but does not expect that filing to be completed and approved
by the Commission before January 31, 2013.\13\
---------------------------------------------------------------------------

    \13\ The NMM Pilot was scheduled to expire on January 31, 2013
as well. On December 18, 2012, the Exchange filed to extend the NMM
Pilot until July 31, 2013 (See SR-NYSEMKT-2012-84).
---------------------------------------------------------------------------

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.

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 \14\ and Rule 19b-
4(f)(6) thereunder.\15\
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    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_ADDRESS>Please include
File Number SR-NYSEMKT-2012-85 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-2012-85. 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 Number SR-NYSEMKT-2012-85 and should be submitted on or before
January 29, 2013.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-00078 Filed 1-7-13; 8:45 am]
BILLING CODE 8011-01-P