SEC Extends Exemptive Relief to NYSE and NYSE MKT LLC from Regulation NMS Rule Regarding Retail Liquidity Programs

The SEC issued an order extending exemptive relief to New York Stock Exchange LLC ("NYSE") and NYSE MKT LLC ("NYSE MKT" and, together with the NYSE, the "Exchanges") from the requirements of Rule 612 of Regulation NMS (the "Sub-Penny Rule") regarding the Exchanges' Retail Liquidity Programs (the "Programs").

The Programs allow designated market participants, known as Retail Liquidity Providers, to provide price improvement to retail orders in sub-penny increments and subsequently for such orders to receive price-time priority over the Exchanges' otherwise protected best bids or offers. The Exchanges cited recent increased participation in the Programs and the need for additional time to analyze data concerning the Programs, which the Exchanges have committed themselves to providing to the SEC.

The Sub-Penny Rule prohibits national security exchanges (such as NYSE and NYSE MKT), among other trading venues, from accepting bids or offers in sub-penny increments in any NMS stock priced equal to or greater than $1.00. By offering the Programs without the SEC's exemptive relief, the Exchanges would be in violation of the Sub-Penny Rule.

See: Order Granting Extension of Exemptive Relief; Order Extending Pilot Period for Exchange's Retail Liquidity Program; Order Granting Approval of Retail Liquidity Program.