
[Federal Register Volume 76, Number 222 (Thursday, November 17, 2011)]
[Notices]
[Pages 71405-71410]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29678]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-65735; File No. SR-NYSEAmex-2011-86]


 Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing 
of Proposed Rule Change To Codify Certain Traditional Trading Floor 
Functions That May Be Performed by Designated Market Makers

November 10, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on October 31, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE Amex'') 
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 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\ 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 NYSE Amex Equities Rule 104 to 
codify certain traditional Trading Floor \3\ functions that may be 
performed by Designated Market Makers (``DMMs''),\4\ to make Exchange 
systems available to DMMs that would provide DMMs with certain market 
information, to amend the Exchange's rules governing the ability of 
DMMs to provide market information to Floor brokers, and to make 
conforming amendments to other rules. The text of the proposed rule 
change is available at the Exchange, the Commission's Public Reference 
Room, and www.nyse.com.
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    \3\ NYSE Amex Equities Rule 6A defines the term ``Trading 
Floor'' to mean, in relevant part, ``the restricted-access physical 
areas designated by the Exchange for the trading of securities.''
    \4\ NYSE Amex Equities Rule 2(i) defines the term ``DMM'' to 
mean an individual member, officer, partner, employee or associated 
person of a DMM unit who is approved by the Exchange to act in the 
capacity of a DMM. NYSE Amex Equities Rule 2(j) defines the term 
``DMM unit'' as a member organization or unit within a member 
organization that has been approved to act as a DMM unit under NYSE 
Amex Equities Rule 98.
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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.

[[Page 71406]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend NYSE Amex Equities Rule 104 to 
codify certain traditional Trading Floor functions that may be 
performed by DMMs. These functions were previously described in the 
Floor Official Manual for the New York Stock Exchange LLC (``NYSE''). 
NYSE Amex conformed its equity trading rules and practices to those of 
the NYSE when it became a subsidiary of NYSE Euronext on October 1, 
2008.\5\ In addition, the Exchange proposes to amend its rules to make 
Exchange systems available to DMMs that would provide DMMs with certain 
market information about securities in which the DMM is registered. The 
Exchange also proposes to amend its rules governing the ability of DMMs 
to provide market information to Floor brokers. Finally, the Exchange 
proposes to make clarifying and conforming amendments to other 
rules.\6\
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    \5\ See Securities Exchange Act Release No. 58673 (September 29, 
2008), 73 FR 57707 (October 3, 2008) (SR-NYSE-2008-60 and SR-Amex 
2008-62) (approving the merger).
    \6\ NYSE has submitted substantially the same proposed rule 
change to the Commission. See SR-NYSE-2011-56.
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Background
    On October 24, 2008, the Commission approved, as a pilot program, 
certain of the rules that govern the current operation of the NYSE.\7\ 
These rules are all elements of the NYSE's ``New Market Model.'' \8\ 
The New Market Model pilot rules include NYSE Rule 104, which sets 
forth certain affirmative obligations of DMMs, the category of market 
participant that replaced specialists. DMMs have obligations with 
respect to the quality of the markets in securities to which they are 
assigned that are similar to certain obligations formerly held by 
specialists. NYSE Amex adopted amendments to implement the New Market 
Model, including amendments to NYSE Amex Equities Rule 104, on November 
26, 2008.\9\
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    \7\ See Securities Exchange Act Release No. 48845 (October 24, 
2008), 73 FR 64379 (October 29, 2008) (SR-NYSE-2008-46) (``New 
Market Model Approval Order'').
    \8\ The New Market Model pilot is currently scheduled to expire 
on January 31, 2012. See Securities Exchange Act Release No. 64773 
(June 29, 2011), 76 FR 39453 (July 6, 2011) (SR-NYSE-2011-43).
    \9\ See Securities Exchange Act Release No. 59022 (November 26, 
2008), 73 FR 73683 December 3, 2008) (SR-NYSEALTR-2008-10).
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    In addition to their trading functions, DMMs provide support on the 
Trading Floor to assist in the efficient operation of the Exchange 
market and maintain fair and orderly markets. These Trading Floor 
functions were performed by specialists before the New Market Model was 
adopted, and the functions were described in the Exchange's Floor 
Official Manual.\10\ Under the New Market Model, there continues to be 
a need for DMMs to be permitted to perform these Trading Floor 
functions. As such, the Exchange proposes to codify these Trading Floor 
functions into NYSE Amex Equities Rule 104 by adding a new subparagraph 
(j)(i).\11\
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    \10\ See 2004 Floor Official Manual, Market Surveillance June 
2004 Edition, Chapter Two, Section I.A. at 7 (``specialist helps 
ensure that such markets are fair, orderly, operationally efficient 
and competitive with all other markets in those securities''), 
Section I.B.3. at 10-11 (``[i]n opening and reopening trading in a 
listed security, a specialist should * * * [s]erve as the market 
coordinator for the securities in which the specialist is registered 
by exercising leadership and managing trading crowd activity and 
promptly identifying unusual market conditions that may affect 
orderly trading in those securities, seeking the advice and 
assistance of Floor Officials when appropriate'' and ``[a]ct as a 
catalyst in the markets for the securities in which the specialist 
is registered, making all reasonable efforts to bring buyers and 
sellers together to facilitate the public pricing of orders, without 
acting as principal unless reasonably necessary''), Section I.B.4. 
at 11 (``In view of the specialist's central position in the 
Exchange's continuous two-way agency auction market, a specialist 
should proceed as follows * * * [e]qually and impartially provide 
accurate and timely market information to all inquiring members in a 
professional and courteous manner.''), and Section I.B.5. at 12 (A 
specialist should ``[p]romptly provide information when necessary to 
research the status of an order or a questioned trade and cooperate 
with other members in resolving and adjusting errors.''). Relevant 
excerpts of the 2004 Floor Official Manual are attached as Exhibit 3 
of this filing.
    \11\ The Exchange proposes to redesignate the rule text 
currently set forth in section (j) as section (k) of NYSE Amex 
Equities Rule 104.
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DMM Trading Floor Functions
    There are four categories of Trading Floor functions that DMMs may 
perform: (1) Maintaining order among Floor brokers manually trading at 
the DMM's assigned panel; (2) bringing Floor brokers together to 
facilitate trading; (3) assisting Floor brokers with respect to their 
orders; and (4) researching the status of orders or questioned trades.
    First, a DMM may maintain order among Floor brokers manually 
trading at the DMM's assigned panel. For example, where there is 
significant agency interest in a security, the DMM may help Floor 
Officials maintain order by managing trading crowd activity and 
facilitating the execution of one or more Floor broker's orders trading 
at the post.
    Second, a DMM may bring Floor brokers together to facilitate 
trading, which may include the DMM acting as a buyer or seller. This 
function is consistent with the floor-based nature of the Exchange's 
hybrid market. For example, if a DMM is aware that a Floor broker 
representing buying interest inquired about selling interest in one of 
his or her assigned securities and later a Floor broker representing 
selling interest makes an inquiry about buying interest, the assigned 
DMM may inform the Floor broker representing the buying interest of the 
other Floor broker's selling interest. In addition, the DMM itself may 
provide contra-side interest to a Floor broker representing interest at 
the post.
    Third, DMMs may assist Floor brokers with respect to their orders 
by providing information regarding the status of a Floor broker's 
orders, helping to resolve errors or questioned trades, adjusting 
errors, and cancelling or inputting Floor broker agency interest on 
behalf of a Floor broker. For example, if a Floor broker's handheld 
device is not operational, the DMM may assist the Floor broker by 
entering or canceling broker interest on the Floor broker's behalf.\12\
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    \12\ The Exchange maintains records of whether a Floor broker's 
order is entered or cancelled by Exchange systems under such 
circumstances.
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    Fourth, DMMs may research the status of orders or questioned 
trades. DMMs may do so on their own initiative or at the request of the 
Exchange or a Floor broker when a Floor broker's hand-held device is 
not operational, when there is activity indicating that a potentially 
erroneous order was entered or a potentially erroneous trade was 
executed, or when there otherwise is an indication that improper 
activity may be occurring.
DMM Access to Exchange Systems
    The Exchange proposes to amend NYSE Amex Equities Rule 104 to add 
new subparagraph (j)(ii), which would state that the Exchange may make 
systems available to a DMM at the post that display the following types 
of information about securities in which the DMM is registered: (A) 
Aggregated information about buying and selling interest; \13\ (B) 
disaggregated information about the price and size of any individual 
order or Floor broker agency interest file, also known as ``e-Quotes,''

[[Page 71407]]

except that Exchange systems would not make available to DMMs 
information about any order or e-Quote, or portion thereof, that a 
market participant has elected not to display to a DMM; and (C) post-
trade information. For the latter two categories, the DMM would have 
access to entering and clearing firm information and, as applicable, 
the badge number of the Floor broker representing the order. The 
systems would not contain any information about the ultimate customer 
(i.e., the name of the member or member organization's customer) in a 
transaction. Aggregated information about buying and selling interest 
and post-trade information are currently available to DMMs.
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    \13\ Exchange systems make available to DMMs aggregate 
information about the following interest in securities in which the 
DMM is registered: (a) All displayable interest submitted by off-
Floor participants; (b) all Minimum Display Reserve Orders, 
including the reserve portion; (c) all displayable Floor broker 
agency interest files (``e-Quotes''); (d) all Minimum Display 
Reserve e-Quotes, including the reserve portion; and (e) the reserve 
quantity of Non-Display Reserve e-Quotes, unless the Floor broker 
elects to exclude that reserve quantity from availability to the 
DMM.
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    Under the proposed rule change, Exchange systems would make 
available to DMMs disaggregated information about the following 
interest in securities in which the DMM is registered: (a) The price 
and size of all displayable interest submitted by off-Floor 
participants; and (b) all e-Quotes, including reserve e-Quotes, that 
the Floor broker has not elected to exclude from availability to the 
DMM.\14\ The Exchange believes that it is appropriate to provide DMMs 
with this disaggregated order information because the information will 
assist DMMs in carrying out their Trading Floor functions as described 
above. For example, access to the disaggregated order information will 
increase DMMs' ability to assist Floor brokers with respect to their 
orders and researching the status of orders or questioned trades. In 
addition, providing DMMs with access to the disaggregated order 
information will contribute to the DMMs' ability to carry out their 
responsibility for managing the auction market process at the Exchange, 
which includes the function of bringing buyers and sellers together to 
facilitate trading. In addition, the proposed rule change would have no 
impact on the Exchange's priority and parity rules; DMM manual 
transactions would continue to be required to yield to intra-day public 
customer orders pursuant to NYSE Amex Equities Rule 72(c)(xi). The 
Exchange further notes that the manner by which the DMM would access 
disaggregated order information is limited. For example, a DMM can 
access the disaggregated order information only while located at the 
post on the Trading Floor. In addition, DMMs' ability to access the 
disaggregated order information is largely manual, in that the DMM must 
query the specific information about a particular security, which 
limits the number of securities about which disaggregated order 
information can be accessed at any given time. Exchange systems would 
not provide any information to the algorithmic trading systems of any 
DMM unit,\15\ and would not support any electronic dissemination of the 
disaggregated order information to other market participants. The 
Exchange notes that market participants who do not want the DMM to have 
access to disaggregated order information have the option to 
electronically enter dark interest that is not visible to the DMM in 
disaggregated form. The Exchange also notes that the proposed rule 
change would specifically prohibit DMMs from using any trading 
information available to them in Exchange systems, including 
disaggregated order information, in a manner that would violate the 
Exchange rules or federal securities laws or regulations.\16\
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    \14\ The Exchange previously permitted DMMs to have access to 
Exchange systems that contained the disaggregated order information 
described above. The Exchange stopped making such information 
available to DMMs on January 19, 2011. See Information Memo 11-03.
    \15\ The order information in these systems would be available 
for a DMM to view manually at the post and as such is different from 
the advance order-by-order information that DMM trading algorithms 
previously received before implementation of the New Market Model 
pilot (sometimes referred to as ``the look''). Under the proposed 
rule change, as is the case today, DMM trading algorithms would have 
the same information with respect to orders entered on the Exchange, 
Floor broker agency interest files or reserve interest as is 
disseminated to the public by the Exchange. See NYSE Amex Equities 
Rule 104(b)(iii).
    \16\ See Proposed NYSE Amex Equities Rule 104(j)(ii).
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    In addition, the Exchange notes that any non-public market 
information that a DMM receives through Exchange systems would be 
subject to specific restrictions as ``non-public order information'' 
\17\ under NYSE Amex Equities Rule 98. For example, NYSE Amex Equities 
Rule 98(c)(2)(A) would require DMMs to maintain the confidentiality of 
any such non-public market information and would prohibit the DMM 
member organization's departments, divisions, or aggregation units that 
are not part of the DMM unit, including investment banking, research, 
and customer-facing departments, from having access to that 
information. In addition, NYSE Amex Equities Rule 98 sets forth 
restrictions on access to non-public order information by the off-Floor 
locations of a DMM unit, including restrictions on the ability of a DMM 
located on the Trading Floor from communicating directly with off-Floor 
individuals or systems responsible for making off-Floor trading 
decisions.\18\
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    \17\ NYSE Amex Equities Rule 98(b)(7) defines the term ``non-
public order'' to mean ``any order, whether expressed electronically 
or verbally, or any information regarding a reasonably imminent non-
public transaction or series of transactions entered or intended for 
entry or execution on the Exchange and which is not publicly 
available on a real-time basis via an Exchange-provided datafeed, 
such as NYSE OpenBook[supreg] or otherwise not publicly available. 
Non-public orders include order information at the opening, re-
openings, the close, when the security is trading in slow mode, and 
order information in the NYSE Display Book[supreg] that is not 
available via NYSE OpenBook[supreg].''
    \18\ See NYSE Amex Equities Rules 98(d)(2)(B)(i)-(iii), 
(f)(1)(A)(i)-(ii), and (f)(3)(C)(ii). In addition, NYSE Amex 
Equities Rule 98(c)(2)(A)(ii) provides that a DMM may make available 
to a Floor broker associated with an approved person or member 
organization any information that the DMM would be permitted to 
provide under Exchange rules to an unaffiliated Floor broker.
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    The Exchange believes that the proposed rule change would 
contribute substantially to the fair and orderly operation of the 
Exchange Trading Floor, and that the benefits of that contribution 
would significantly outweigh any incremental benefit to the DMMs by 
virtue of having access to disaggregated order information. DMM 
assistance at the post through the performance of the Trading Floor 
functions is an invaluable resource to minimize any disruption to the 
market, particularly if the Exchange is experiencing a systems issue; 
the Exchange systems that provide disaggregated order information play 
a pivotal role in that assistance, for example by allowing DMMs to 
enter or cancel orders on behalf of Floor brokers. Allowing DMMs to 
have access to those Exchange systems to perform the Trading Floor 
functions is more efficient than diverting Exchange resources to attend 
to individual Floor broker issues, particularly when the DMMs are ready 
and able to perform the same functions. In contrast, the proposed rule 
change would provide DMMs with a disaggregated format of information 
that they already have access to on an aggregated basis. Any potential 
value to having order information on a disaggregated basis is mitigated 
by the fact that DMMs only have information about orders at the 
Exchange, which represent just a portion of the overall volume of 
trading in Exchange-listed stocks across the market. The information is 
likely to be stale upon receipt to the DMMs, thereby diminishing any 
likelihood that the information would be useful to DMMs in connection 
with their electronic or algorithmic trading. For example, the DMMs 
would have to use a manual process to access the information, the DMMs' 
access to disaggregated information at any given time would be limited 
to a single stock, and the information would not be dynamically updated 
to the DMM, in real time or

[[Page 71408]]

otherwise. In addition, as described above, all intra-day manual trades 
entered by the DMM yield to public orders pursuant to NYSE Amex 
Equities Rule 72 and DMMs are restricted from sharing order information 
pursuant to NYSE Amex Equities Rule 98, both of which limit any 
potential for the DMMs to use the disaggregated order information in 
connection with their manual trading.
Conforming Amendments
    To reflect the information that would be available to DMMs through 
Exchange systems, the Exchange proposes amendments to NYSE Amex 
Equities Rules 70(e), (f) and (i) and 70.25(a)(vii) to specify which 
information is available to a DMM through Exchange systems. The 
Exchange also proposes changes to NYSE Amex Equities Rule 70 to specify 
what information about e-Quotes is available to the DMM.
    In addition, the Exchange proposes to delete NYSE Amex Equities 
Rule 104(a)(6), which currently provides that DMMs, trading assistants 
and anyone acting on their behalf are prohibited from using the Display 
Book[supreg] system to access information about Floor broker agency 
interest excluded from the aggregated agency interest and Minimum 
Display Reserve Order information other than for the purpose of 
effecting transactions that are reasonably imminent where such Floor 
broker agency and Minimum Display Reserve Order interest information is 
necessary to effect such transaction.
Ability of DMMs To Provide Market Information on the Trading Floor
    The Exchange proposes to modify the terms under which DMMs would be 
permitted to provide market information to Floor brokers and visitors 
on the Trading Floor. Specifically, NYSE Amex Equities Rule 104(j)(iii) 
would permit a DMM to provide the market information to which he or she 
has access under proposed NYSE Amex Equities Rule 104(j)(ii) to: (1) A 
Floor broker in response to an inquiry in the normal course of 
business; or (2) a visitor to the Trading Floor for the purpose of 
demonstrating methods of trading. This aspect of the proposal builds on 
and modifies current NYSE Amex Equities Rule 115, and the Exchange 
therefore proposes to delete that Rule, which covers the same 
subject.\19\
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    \19\ NYSE Amex Equities Rule 115 will be redesignated as 
``Reserved.'' The Exchange further proposes to make conforming 
amendments to NYSE Amex Equities Rules 13 and 104(a)(6).
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    Currently, NYSE Amex Equities Rule 115 provides that a DMM may 
disclose market information for three purposes. First, a DMM may 
disclose market information for the purpose of demonstrating the 
methods of trading to visitors to the Trading Floor. This aspect of 
current NYSE Amex Equities Rule 115 would be replicated in proposed 
NYSE Amex Equities Rule 104(j)(iii)(B). Second, a DMM may disclose 
market information to other market centers in order to facilitate the 
operation of the Intermarket Trading System (``ITS''). This text is 
obsolete as the ITS Plan has been eliminated and therefore would not be 
included in amended NYSE Amex Equities Rule 104.\20\ Third, a DMM may, 
while acting in a market making capacity, provide information about 
buying or selling interest in the market, including (a) Aggregated 
buying or selling interest contained in Floor broker agency interest 
files other than interest the broker has chosen to exclude from the 
aggregated buying and selling interest, (b) aggregated interest of 
Minimum Display Reserve Orders and (c) the interest included in DMM 
interest files, excluding Capital Commitment Schedule (``CCS'') 
interest as described in NYSE Amex Equities Rule 1000(c), in response 
to an inquiry from a member conducting a market probe \21\ in the 
normal course of business.
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    \20\ See Securities Exchange Act Release No. 55397 (March 5, 
2007), 72 FR 11066 (March 12, 2007) (Intermarket Trading System; 
Notice of Filing and Immediate Effectiveness of the Twenty Fourth 
Amendment to the ITS Plan Relating to the Elimination of the ITS 
Plan).
    \21\ Generally, a market probe refers to when a Floor broker is 
seeking to ascertain the depth of the market in a security to 
determine at what price point a security may trade. However, it is a 
term of art whose meaning is not codified.
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    Proposed NYSE Amex Equities Rule 104(j)(iii) would permit DMMs to 
provide Floor brokers not only with the same aggregated order 
information that DMMs currently are permitted to provide under NYSE 
Amex Equities Rule 115 but also with the disaggregated and post-trade 
order information described above.\22\ Broadening the scope of 
information that DMMs can provide Floor brokers will assist DMMs with 
carrying out their historical function of bringing Floor brokers 
together to facilitate trading. In addition, the Exchange notes that 
NYSE Amex Equities Rule 115 allowed Exchange specialists to provide 
disaggregated order information to Floor brokers prior to adoption of 
the Hybrid Market.\23\ Moreover, as noted above, both Floor brokers and 
off-Floor participants have the ability to enter partially or 
completely ``dark'' orders that are not visible to the DMM, and DMMs 
therefore would be unable to disseminate information about such 
``dark'' orders or the dark portion of the orders in response to an 
inquiry from a Floor broker. When providing information, the individual 
DMM is responsible for fairly and impartially providing accurate and 
timely information to all inquiring Floor brokers about buying and 
selling interest in his or her assigned security.
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    \22\ Because DMMs on the Trading Floor do not have access to CCS 
interest information, the proposed rule does not specify that DMMs 
would not be disseminating such information.
    \23\ See NYSE Regulation Information Memo 05-5 (stating that, 
under NYSE Rule 115, specialists may disclose the identity of the 
members or member organizations representing any orders entrusted to 
the specialist). The NYSE amended Rule 115 in connection with the 
Hybrid Market because at that time, there was no way for Floor 
brokers to enter fully dark electronic interest. Now that NYSE and 
Exchange systems can accept fully dark electronic interest from both 
Floor brokers and off-Floor participants, the Hybrid Market change 
to NYSE Rule 115 has been obviated.
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    Proposed NYSE Amex Equities Rule 104(j)(iii) also would permit a 
DMM to provide market information to a Floor broker in response to a 
specific request by the Floor broker to the DMM at the post, rather 
than specifying that the information must be provided ``in response to 
an inquiry from a member conducting a market probe in the normal course 
of business,'' as currently provided in NYSE Amex Equities Rule 115. 
The Exchange believes that the term ``market probe'' no longer 
accurately reflects the manner in which DMMs and Floor brokers interact 
on the Trading Floor. Rather, the Exchange believes that the Floor 
broker's normal course of business, as an agent for customers, includes 
both seeking market probes into the depth of the market as well as 
seeking out willing contra-side buyers and sellers in a particular 
security. In addition, the rule would specify that a Floor broker may 
not submit an inquiry to the DMM by electronic means and that the DMM 
may not use electronic means to transmit market information to a Floor 
broker in response an inquiry. Under the proposed rule change, Floor 
brokers would not have access to Exchange systems that provide 
disaggregated order information, and they would only be able to access 
such market information through a direct interaction with a DMM at the 
post.
    The Exchange believes that providing Floor brokers with access to 
the disaggregated order information would serve a valuable function by 
increasing the ability of Floor brokers to source liquidity and provide 
price discovery for block transactions. In particular, the ability of 
Floor brokers to receive the disaggregated order information should,

[[Page 71409]]

in turn, enhance their ability to facilitate transactions for their 
customers by identifying market participants with trading interest that 
could trade with the Floor brokers' customers. Floor brokers have 
historically served this role on behalf of their customers, which 
include institutional clients and block-trading desks, and they 
continue to perform this agency function today. The Exchange notes that 
Floor brokers continue to be subject to their existing obligations with 
respect to Floor trading and access to information. In particular, 
Floor brokers remain subject to the restrictions in Section 11(a) of 
the Securities Exchange Act of 1934 (the ``Act'') and the rule 
thereunder, which effectively prohibit Floor brokers from effecting 
transactions for their own account, the account of an associated 
person, or an account with respect to which the member, member 
organization, or an associated person thereof exercises investment 
discretion.\24\
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    \24\ See also NYSE Amex Equities Rule 90.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of Section 6(b) of the Act,\25\ in general, and 
Section 6(b)(5) of the Act,\26\ in particular, in that it is designed 
to foster cooperation and coordination with persons engaged in 
regulating, clearing, settling, processing information with respect to, 
and facilitating transactions in securities, to remove impediments to 
and perfect the mechanism for a free and open market and a national 
market system and, in general, to protect investors and the public 
interest. In particular, the proposed rule change clarifies that DMMs 
may perform certain defined Trading Floor functions, which were 
previously performed by specialists, in furtherance of the efficient, 
fair, and orderly operation of the Exchange. In addition, increasing 
the amount of information, including disaggregated order information, 
that a DMM is permitted to view and provide to Floor brokers would 
further the ability of DMMs to carry out the defined Trading Floor 
functions and, as a result, is designed to remove impediments to and 
perfect the mechanism of a free and open market through the efficient 
operation of the Exchange, in particular by facilitating the bringing 
of buyers and sellers together. Although a vast majority of the 
transactions executed on the Exchange are automated, Floor brokers 
continue to play an important role for customers in those transactions 
that require the expertise of a professional trading floor agent, 
including engaging in price discovery and sourcing liquidity for block 
transactions. While the disaggregated order information that would be 
available to DMMs and Floor brokers under the proposed rule change is 
important to them in carrying out their unique roles in a floor trading 
environment, the Exchange believes this information would not be 
material to market participants executing automated orders. In 
addition, the means of access by DMMs and Floor brokers to the 
disaggregated order information is largely manual. Accordingly, the 
Exchange believes that access to disaggregated order information as set 
forth in this proposed rule change provides no unfair advantage to DMMs 
or Floor brokers. In addition, as noted above, DMMs would be 
specifically prohibited from using the market information available 
through Exchange systems for any purpose that would violate Exchange 
rules or federal securities laws or regulations.
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    \25\ 15 U.S.C. 78f(b).
    \26\ 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

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) As the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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-NYSEAmex-2011-86 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-NYSEAmex-2011-86. 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 NW., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. The text of the proposed rule change is available on 
the Commission's Web site at http://www.sec.gov. 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-NYSEAmex-2011-86 and should be submitted on or before December 8, 
2011.


[[Page 71410]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
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    \27\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-29678 Filed 11-16-11; 8:45 am]
BILLING CODE 8011-01-P


