Daily Rules, Proposed Rules, and Notices of the Federal Government
The Exchange proposes to amend NYSE Arca Rule 6.62(cc) to make available the Post No Preference Light Only Quotation ("PNPLO Quotation") to options classes not participating in the penny pilot ("non-Penny Pilot Issues"). The text of the proposed rule change is available on the Exchange's Web site at
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.
The Exchange proposes to amend Rule 6.62(cc) to make available the Post No Preference Light Only Quotation ("PNPLO Quotation") to non-Penny Pilot Issues.
A PNPLO Quotation is an electronic Market Maker quotation that, upon initial entry into the NYSE Arca System, is only eligible to execute against displayed liquidity on the Consolidated Book.
Currently, the PNPLO Quotation is only available for options classes participating in the Penny Pilot Program. Market Makers may only submit PNPLO Quotation orders for options classes in the Penny Pilot Program. The Exchange now proposes to allow the use of the PNPLO Quotation by Market Makers for quoting in non-Penny classes as well.
In the initial Notice, the Exchange stated that Market Makers on NYSE Arca in penny pilot issues receive post liquidity credits for electronic
On October 25, 2012, the Exchange filed for immediate effectiveness a proposed rule change to provide Post-Take pricing for electronic transactions in all non-Penny issues.
The Exchange sees no reason to continue to treat equally positioned Market Makers differently by making the PNPLO Quotation functionality available based on whether they are quoting in Penny classes versus non-Penny classes. The Exchange notes that all market participants, including Market Makers, already have the ability to avoid trading with non-displayed liquidity by entering PNP-Light Orders, which have existed on the Exchange since 2009.
The Exchange notes that the Commission also has found that the current Rule was not unfairly discriminatory.
The Exchange will announce the implementation date of the proposed rule change in a Trader Update to be published no later than 90 days following the date of filing. The implementation date will be no later than 90 days following publication of the Trader Update announcing the date of filing.
The proposed rule change is consistent with Section 6(b)
Like the existing Price Improving Quote and the existing PNPLO Quotation for Penny classes, the proposed PNPLO Quotation would provide a Market Maker with the ability to control its interactions with contra-side liquidity.
The Exchange believes that allowing Market Makers to use the PNPLO Quotation for non-Penny classes is just, equitable and not unfairly discriminatory. For example, the PNPLO Quotation treats all similarly situated market participants the same in that it would be available for use by all Market Makers on the Exchange. Moreover, the Exchange notes that all market participants, including Market Makers, already have the ability to avoid trading with non-displayed liquidity by entering PNP-Light Orders, which have existed on the Exchange since 2009.
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.
No written comments were solicited or received with respect to the proposed rule change.
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
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:
* Use the Commission's Internet comment form (
* Send an email to
* Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.