February 24, 2012.
On October 19, 2011, New York Stock Exchange LLC (“NYSE”) and NYSE Amex LLC (“NYSE Amex” and together with NYSE, the “Exchanges”) each filed with the Securities and Exchange Commission (“Commission”) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) 
and Rule 19b-4 thereunder,
a proposed rule change to establish a Retail Liquidity Program (“Program”) on a pilot basis for a period of one year from the date of implementation, if approved. The proposed rule changes were published for comment in the Federal Register on November 9, 2011.
The Commission received 28 comments on the NYSE proposal 
and 4 comments on the NYSE Amex proposal.
On December 19, 2011, the Commission designated a longer period for Commission action on the proposed rule change, until February 7, 2012.
In connection with the proposals, the Exchanges requested exemptive relief from Rule 612(c) of Regulation NMS,
which prohibits a national securities exchange from accepting or ranking certain orders based on an increment smaller than the minimum pricing increment.
The Exchanges submitted a consolidated response letter on January 3, 2012.
On January 17, 2012, each Exchange filed Amendment No. 1 to its proposal.
On February 7, 2012, the Commission instituted proceedings to determine whether to disapprove the proposed rule changes, as modified by Amendment No. 1.
The comment period for the Commission's Order Instituting Proceedings is set to expire on March 5, 2012, and the Exchanges' rebuttal period is scheduled to close on March 19, 2012.
On February 16, 2012, the Exchanges filed Partial Amendment No. 2 to the proposed rule changes.
The Commission is publishing this notice to solicit comments on the proposed rule changes, as modified by Amendment No. 2, from interested persons.
II. Description of the Partial Amendment No. 2
In Amendment No. 2, the Exchanges propose to make three changes to proposed Rule 107C, which establishes the Retail Liquidity Provider program: (1) Limit the definition of “Retail Order”; (2) modify the definition of the Retail Liquidity Identifier; and (3) clarify the treatment of odd lots, round lots, and part of a round lot orders.
First, the Exchanges propose to amend proposed Rule 107C(a)(3) to remove from the definition of “Retail Order” proprietary orders of Retail Member Organizations 
that result from liquidating a position acquired from the internalization of orders that otherwise meet the definition of “Retail Order.” As amended, the definition of “Retail Order” thus would be limited to “an agency order that originates from a natural person and is submitted to the Exchange by an RMO, provided that no change is made to the terms of the order with respect to price or side of market and the order does not originate from a trading algorithm or any other computerized methodology.”
Second, the Exchanges would add language to the definitions of “Retail Order” and “Retail Price Improvement Order” (“RPI”) in proposed Rules 107C(a)(3) and 107C(a)(4), respectively, to clarify that both may include odd lot, round lot, and part of round lot orders. The Exchanges explain further in the Amendment that RPIs would be ranked and allocated according to price and time of entry into the Exchange systems consistent with Exchange Rule 55, 61, and 72, and therefore without regard to whether the size entered is an odd lot, round lot, or part of round lot amount. Similarly, the Exchanges explain that Retail Orders would interact with RPIs according to the priority and allocation rules of the Program and without regard to whether they are odd lots, round lots, or parts of round lots. According to the Amendment, Retail Orders may be designated as Type 1, Type 2, or Type 3 under proposed Rule 107C(k) without regard to the size of the order. However, the Exchanges note that, pursuant to the rules of the Consolidated Tape Association, executions less than a round lot will not print to the tape or be considered the last sale.
Third, the Exchanges would amend proposed Rule 107C(j) to add to the definition of Retail Liquidity Identifier that the identifier shall reflect the symbol for the particular security and the side (buy or sell) of the RPI interest, but shall not include the price or size of the RPI interest. The previously proposed definition of the Retail Liquidity Identifier did not contain these details. Rather, it said only that an identifier shall be disseminated through proprietary data feeds or as appropriate through the Consolidation Quote System when RPI interest priced at least $0.001 better than the best protected bid or best protected offer 
for a particular security is available in Exchange systems.
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule changes, as modified by Amendment No. 2, are consistent with the Act. Comments may be submitted by any of the following methods:
- 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-2011-55 or NYSEAmex-2011-84. 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 changes that are filed with the Commission, and all written communications relating to the proposed rule changes 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 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at 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-2011-55 or SR-NYSEAmex-2011-84 and should be submitted on or before March 22, 2012.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.16
Kevin M. O'Neill,
[FR Doc. 2012-4913 Filed 2-29-12; 8:45 am]
BILLING CODE 8011-01-P