Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change by NASDAQ OMX PHLX, Inc. Relating to Administration of Certain Rules in Respect of Index Data Dissemination, 13498-13501 [E9-6826]
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Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Notices
threshold to a higher amount,52 and one
suggested requiring the reporting of all
settlements regardless of dollar
amount.53
FINRA believes that a dollar threshold
within the questions is appropriate to
address those instances where matters
are settled for a nuisance value; at the
same time, FINRA is not persuaded by
the comments suggesting that an
increase to greater than $15,000 is
warranted at this time.
(c) Proposed Revisions to Form U5 To
Allow Firms To Amend the ‘‘Reason for
Termination’’ and the ‘‘Date of
Termination’’
Eight commenters responded to the
proposal to allow firms to amend the
‘‘Reason for Termination’’ and ‘‘Date of
Termination.’’ 54 Six commenters
affirmatively supported this proposal on
the basis that it would result in more
accurate information being reported to
regulators and recorded in the CRD
system.55 Of the two commenters that
generally opposed this proposal, one
opposed allowing firms to amend the
Reason for Termination or Date of
Termination except in cases of clerical
error.56 The other commenter supported
allowing changes to the Date of
Termination, but opposed allowing
changes to the Reason for Termination
based on a concern about the potential
for abuse by firms.57
FINRA believes that a firm should
have the ability to correct inaccurate
information that it filed on a Form U5
regarding terminations through an
amendment to that original Form filing.
FINRA also believes that limiting such
changes to clerical errors is unnecessary
in light of: (1) the attendant requirement
that firms provide a reason for the Form
U5 amendment; and (2) the monitoring
of such amendments by FINRA and
other regulators. FINRA believes that
such monitoring, in particular, will
protect against any potential misuse by
firms.
(d) Proposed Technical and Conforming
Changes to the Forms
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No commenters opposed the proposed
technical and conforming changes to the
Forms, and four commenters
affirmatively supported them.58
52 ARM; R. Long/Wachovia; Williams/
Woodforest.
53 PIABA.
54 ARM; FSI; Gross/Pace; Jacobson/Cornell;
NASAA; Nationwide; PIABA; ProEquities.
55 ARM; FSI; Gross/Pace; NASAA; Nationwide;
ProEquities.
56 Jacobson/Cornell.
57 PIABA.
58 FSI; Gross/Pace; NASAA; Nationwide.
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III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 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 such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
of the filing also will be available for
inspection and copying at the principal
office of FINRA. 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–FINRA–
2009–008 and should be submitted on
or before April 17, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.59
Florence E Harmon,
Deputy Secretary.
[FR Doc. E9–6830 Filed 3–26–09; 8:45 am]
BILLING CODE 8010–01–P
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–FINRA–2009–008 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59611; File No. SR–Phlx–
2009–22]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of a Proposed Rule Change by
NASDAQ OMX PHLX, Inc. Relating to
Administration of Certain Rules in
Respect of Index Data Dissemination
March 20, 2009.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 2 thereunder,
Paper Comments
notice is hereby given that on March 16,
2009, NASDAQ OMX PHLX, Inc.
• Send paper comments in triplicate
(‘‘Phlx’’ or ‘‘Exchange’’) filed with the
to Elizabeth M. Murphy, Secretary,
Securities and Exchange Commission
Securities and Exchange Commission,
(‘‘SEC’’ or ‘‘Commission’’) the proposed
100 F Street, NE., Washington, DC
rule change as described in Items I, II,
20549–1090.
and III, below, which Items have been
All submissions should refer to File
prepared by the Exchange. The
Number SR–FINRA–2009–008. This file
Commission is publishing this notice to
number should be included on the
solicit comments on the proposed rule
subject line if e-mail is used. To help the
change from interested persons.
Commission process and review your
I. Self-Regulatory Organization’s
comments more efficiently, please use
only one method. The Commission will Statement of the Terms of Substance of
post all comments on the Commission’s the Proposed Rule Change
Internet Web site (https://www.sec.gov/
The Exchange proposes to reflect in
rules/sro.shtml). Copies of the
the administration of its rules the
submission, all subsequent
expected discontinuation by the
amendments, all written statements
NASDAQ OMX Futures Exchange, Inc.
with respect to the proposed rule
(‘‘NFX’’) of index value distribution
change that are filed with the
over NFX’s Market Data Distribution
Commission, and all written
Network (‘‘MDDN’’). Index values will
communications relating to the
continue to be distributed via another
proposed rule change between the
NASDAQ OMX data dissemination
Commission and any person, other than service, and the discontinuation of
those that may be withheld from the
MDDN index value dissemination will
public in accordance with the
not have any impact on the listing or
provisions of 5 U.S.C. 552, will be
trading of any instruments on the
available for inspection and copying in
the Commission’s Public Reference
59 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
Room, on official business days between
2 17 CFR 240.19b–4.
the hours of 10 a.m. and 3 p.m. Copies
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Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Notices
Exchange, or on any facility of a
national securities exchange within the
meaning of the Act. The Exchange is not
proposing to amend the text of any
rules, but simply to change the
administration of certain rules, as
described below.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://www.nasdaqtrader.com/
micro.aspx?id=PHLXRulefilings.
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
Exchange 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 these
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 aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
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Currently, the values of the
Exchange’s various proprietary indexes
are disseminated in parallel over two
separate data services operated by The
NASDAQ OMX Group, Inc. (‘‘NASDAQ
OMX’’).3 These values are included both
in NFX’s MDDN 4 and NASDAQ OMX’s
data dissemination service. The purpose
of this filing is to reflect the pending
discontinuation by NFX of its index
data dissemination service over MDDN
as redundant and unnecessary.5
3 NASDAQ OMX acquired the Exchange on July
24, 2008. NFX, which was previously known as the
Philadelphia Board of Trade and became a
subsidiary of NASDAQ OMX on the same date, is
a Designated Contract Market within the meaning
of the Commodities Exchange Act.
4 MDDN is an Internet protocol multicast
network, which was developed by NFX for the
purpose of, among other things, transmitting
current and closing index values.
5 The Exchange’s rule book and fee schedule do
not reference MDDN. As explained herein, MDDN
is not a service being provided by the Exchange
(rather, it is a service of NFX, a designated contract
market under the Commodities Exchange Act), and
even if MDDN were an Exchange-supplied service,
it would not constitute a facility of a national
securities exchange, making its inclusion in the
Exchange’s rule book unnecessary. See, e.g.,
Securities Exchange Act Release No. 34–58897
(November 3, 2008), 73 FR 66952 (November 12,
2008) (SR–NASDAQ–2008–018) (NASDAQ’s index
dissemination service is not a facility of a national
securities exchange, and its terms are not rules that
must be filed with the Commission).
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Exchange rules condition the listing
and trading of index options on, among
other things, the dissemination of
underlying index values periodically
during the trading day and closing
index values after the close of the
trading day. Rule 1009A(b)(10) provides
that the current underlying index value
for narrow-based indexes will be
reported at least once every fifteen
seconds during the time the index
options are traded on the Exchange.6
Additionally, Rule 1100A(a) provides
that the Exchange shall disseminate or
shall assure that the closing index value
is disseminated after the close of
business and the current index value is
disseminated from time-to-time on days
on which transactions in index options
are made on the Exchange.7
The Exchange lists options on several
proprietary indexes.8 Under this
proposed rule change, discontinuation
of the MDDN index value dissemination
service will not affect the eligibility of
such options to be listed and traded
because dissemination of the underlying
index data will not stop and will not be
interrupted. All index values included
in MDDN are currently also being
disseminated over another NASDAQ
OMX index dissemination service,
making the MDDN index dissemination
duplicative and no longer necessary.9 In
the future, the Exchange will continue
dissemination of its index data either
through NASDAQ OMX’s index
6 See also Rule 1009A(c)(1) (regarding reporting
requirements for continued listing of narrow-based
indexes underlying options); and Rules
1009A(d)(11) and 1109A(e)(1) (regarding reporting
requirements for initial and continued listing of
broad-based indexes underlying options).
7 See also Securities Exchange Act Release No.
53790 (May 11, 2006), 71 FR 28737 (May 17, 2006)
(SR–Phlx–2006–04) (regarding, among other things,
transmission over MDDN of current and closing
index values underlying four index options that
were approved by Commission order: XAU, OSX,
SOX, and UTY).
8 The proprietary indexes listed on the Exchange
include: PHLX Chemicals Index (XCM); PHLX
Defense Sector (DFX); PHLX Drug Sector (RXS);
PHLX Europe Sector (XEX); PHLX Gold/Silver
Sector (XAU); PHLX Housing Sector (HGX); PHLX
Marine Shipping Index (SHX); PHLX Medical
Device Index (MXZ); PHLX Oil Service Sector
(OSX); PHLX Semiconductor Sector (SOX); PHLX
Sports Index (SXP); and PHLX Utility Sector (UTY).
DFX, RXS, HGX, OSX, and SOX are listed and
options are traded pursuant to Rule 1009(A), which
provides for trading of options on indexes pursuant
to Rule 19b–4(e) of the Act. XAU and UTY, being
two of the oldest indexes that pre-date Rule 19b–
4(e), are listed and options are traded pursuant to
Commission orders. See Securities Exchange Act
Release Nos. 20437 (December 2, 1983), 48 FR
55229 (December 9, 1983) (XAU); and 24889
(September 9, 1987), 52 FR 35021 (September 16,
1987) (UTY). XCM, XEX, SHX, MXZ, and SXP are
no longer listed or traded and have no open options
interest.
9 It is expected that other MDDN data streams will
continue to operate as a service of NFX to distribute
NFX trading data.
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13499
dissemination service or through one or
more other (NASDAQ OMX-owned or
unrelated) major market data vendors.10
The Exchange believes that, just like
NASDAQ’s index dissemination
service,11 NFX’s MDDN index
dissemination service is not a facility of
any national securities exchange within
the meaning of the Act and that the
Exchange is not required under Section
19(b)(1) of the Act 12 and Rule 19b–4
thereunder 13 to file rule changes
regarding administration of such
service. If, at a later date, the Exchange
proposed to modify the manner in
which it disseminates index values,
causing the relevant index
dissemination service to fit within the
definition of a facility of an exchange,
or the Exchange proposed to tie the fees
for receiving data from the index
dissemination service to fees for usage
of exchange services (to include, for
example, listing and trading), the
Exchange would file a proposed rule
change with the Commission.14
2. Statutory Basis
The Exchange believes that its
proposal is consistent with Section 6(b)
of the Act 15 in general, and furthers the
objectives of Section 6(b)(5) of the Act 16
in particular, in that it is 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 by
clarifying how underlying index data is
to be disseminated.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
10 As is the case with the values of proprietary
indexes, current and closing index values of certain
non-proprietary indexes underlying options listed
on the Exchange (Hapoalim American Israeli Index,
SIG Coal Producers Index, SIG Energy MLP Index,
and SIG Oil Production & Exploration Index) and
data regarding foreign currencies underlying
options listed on the Exchange (Australian dollars,
British pounds, Canadian dollars, Euros, Japanese
Yen and Swiss Francs) will likewise continue to be
distributed over the NASDAQ OMX index
dissemination service or one or more other
(NASDAQ OMX-owned or unrelated) major market
data vendors.
11 See Securities Exchange Act Release No. 34–
58897 (November 3, 2008), 73 FR 66952 (November
12, 2008) (SR–NASDAQ–2008–018) (NASDAQ’s
index dissemination service is not a facility of a
national securities exchange, and its terms are not
rules that must be filed with the Commission).
12 15 U.S.C. 78s(b)(1).
13 17 CFR 240.19b–4.
14 See Securities Exchange Act Release No. 58897
(November 3, 2008), 73 FR 66952 (November 12,
2008) (SR–NASDAQ–2008–018).
15 15 U.S.C. 78f(b).
16 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Notices
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
mstockstill on PROD1PC66 with NOTICES
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and paragraph (f)(1) of Rule
19b–4 thereunder. Pursuant to the Act,
the proposed rule change has been
designated by the Exchange as
constituting a stated policy, practice, or
interpretation with respect to the
meaning, administration, or
enforcement of an existing rule.
Specifically, as described above, the
Exchange has stated how it will
administer the enumerated portions of
Phlx Rules 1009A and 1100A in light of
the discontinuation of index data
dissemination over NFX’s MDDN. At
any time within 60 days of the filing of
the proposed rule change, the
Commission may summarily abrogate
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.
As discussed above, the Exchange
believes that the MDDN index
dissemination service is not a ‘‘facility
of a national securities exchange,’’ and
the terms and conditions of this service
are therefore not included in the text of
the Exchange’s rules. Because of this, no
changes are being made to the Exchange
rule book or fee schedule, and this filing
should be viewed as a statement of how
the Exchange will administer its
existing rules in light of the impending
discontinuation of a non-exchange
service (MDDN index dissemination) by
a sister company (NFX).
It must be noted in this regard that
rule changes to discontinue important
exchange services (as opposed to nonexchange services, as is the case here)
have in the past been accepted by the
Commission on immediately effective
basis under paragraph (f)(1) of Rule 19–
b(4).17 It stands to reason that
discontinuation of a non-exchange
17 See, e.g. , Securities Exchange Act Release No.
58613 (Sept. 22, 2008), 73 FR 57181 (Oct. 1, 2008)
(SR–PHLX–2008–065) (immediately effective filing
to change the administration of Exchange rules as
a result of the shutdown of the entire XLE equity
trading).
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17:13 Mar 26, 2009
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service should receive the same
treatment under paragraph (f)(1).
In its recent interpretive guidance
regarding the self-regulatory
organizations’ rule filing process, the
Commission stated that certain SRO
proposals ‘‘may be filed as an
immediately effective rule so long as it
is based on and similar to another SRO’s
rule’’ and raises no new policy issues.18
Filings in this category are eligible to be
submitted under paragraph (f)(6) of Rule
19b–4.19 As explained below, paragraph
(f)(6) could serve as a separate basis for
this filing’s designation under Rule
19(b)(3), but the Exchange believes that
designation under paragraph (f)(1) is
more appropriate in this case.
The Commission recently approved
removal of index dissemination from
the rule book of another exchange,
NASDAQ,20 and in its impact, the
present filing is similar to the NASDAQ
filing. With the shut-down of MDDN
index dissemination, both the PHLX
and NASDAQ index values will
continue to be distributed by the same
index dissemination service, and since
that service is not a facility of any
national securities exchange (either
NASDAQ or PHLX), its terms are not
rules of an exchange within the meaning
of the Act. This similarity to another
SRO’s rule makes the present filing
eligible for immediate effectiveness
under paragraph (f)(6) of Rule 19(b)(4).
However, unlike the NASDAQ
proposal, the present filing does not
require any modifications to codified
rule text and relates to a service that is
being proposed for discontinuation. As
explained above, even when the service
to be discontinued is an important
facility of a national securities
exchange, its discontinuation has in the
past been accepted as immediately
effective under paragraph (f)(1) of Rule
19b–4. Based on prior Commission
practice, while paragraph (f)(6) of Rule
19b–4 would certainly apply to this
filing, paragraph (f)(1) of this Rule is the
appropriate basis for its immediate
effectiveness.
Based on the foregoing, the Exchange
designates this filing as immediately
effective under paragraph (f)(1) of Rule
19b–4. It is expected that notice of the
impending discontinuation of MDDN
index dissemination will be given as
soon as practicable and the actual
18 Securities Exchange Act Release No. 58092
(July 3, 2008), 73 FR 40144 (July 11, 2008).
19 17 CFR 240.19b–4(f)(6).
20 Securities Exchange Act Release No. 58897
(November 3, 2008), 73 FR 66952 (November 12,
2008) (SR–NASDAQ–2008–018) (NASDAQ’s index
dissemination service is not a facility of a national
securities exchange, and its terms are not rules that
must be filed with the Commission).
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discontinuation will occur shortly
thereafter, on a timetable that would
minimize any possible inconvenience to
its users.
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–Phlx–2009–22 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–Phlx–2009–22. This file
number should be included on the
subject line if e-mail 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 (https://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 inspection and copying in
the Commission’s Public Reference
Room on official business days between
the hours of 10 a.m. and 3 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–Phlx–
2009–22 and should be submitted on or
before April 17, 2009.
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Federal Register / Vol. 74, No. 58 / Friday, March 27, 2009 / Notices
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.21
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–6826 Filed 3–26–09; 8:45 am]
BILLING CODE 8010–01–P
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
Statutory Basis for, the Proposed Rule
Change
1. Purpose
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59614; File No. SR–
NYSEALTR–2009–27]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by NYSE
Alternext U.S. LLC Amending NYSE
Alternext Equities Rule 124 To Execute
the Odd-Lot Portion of a Part of a
Round-Lot Order Pursuant to the Same
Pricing Methodology Used for Odd-Lot
Orders
March 20, 2009.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on March
11, 2009, NYSE Alternext U.S. LLC (the
‘‘Exchange’’ or ‘‘NYSE Alternext’’) filed
with the Securities and Exchange
Commission (the ‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the selfregulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
NYSE Alternext Equities Rule 124 (OddLot Orders) to execute the odd-lot
portion of a part of a round-lot (‘‘PRL’’)
order pursuant to the same pricing
methodology used for odd-lot orders.
mstockstill on PROD1PC66 with NOTICES
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,
21 17
CFR 200.30–3(a)(12).
U.S.C.78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
1 15
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Through this filing the Exchange
seeks to amend NYSE Alternext Equities
Rule 124 (Odd-Lot Orders) to execute
the odd-lot portion of a part of a roundlot (‘‘PRL’’) order pursuant to the same
pricing methodology used for odd-lot
orders.4
These amendments are proposed to
conform to amendments filed by the
New York Stock Exchange (‘‘NYSE’’).5
Background
As described more fully in a related
rule filing,6 NYSE Euronext acquired
The Amex Membership Corporation
(‘‘AMC’’) pursuant to an Agreement and
Plan of Merger, dated January 17, 2008
(the ‘‘Merger’’). In connection with the
Merger, the Exchange’s predecessor, the
American Stock Exchange LLC
(‘‘Amex’’), a subsidiary of AMC, became
a subsidiary of NYSE Euronext called
NYSE Alternext U.S. LLC, and
continues to operate as a national
securities exchange registered under
Section 6 of the Securities Exchange Act
of 1934, as amended (the ‘‘Act’’).7 The
effective date of the Merger was October
1, 2008.
In connection with the Merger, on
December 1, 2008, the Exchange
relocated all equities trading conducted
on the Exchange legacy trading systems
and facilities located at 86 Trinity Place,
New York, New York (the ‘‘86 Trinity
Trading Systems’’), to trading systems
and facilities located at 11 Wall Street,
New York, New York (the ‘‘Equities
Relocation’’). The Exchange’s equity
trading systems and facilities at 11 Wall
Street (the ‘‘NYSE Alternext Trading
Systems’’) are operated by the NYSE on
behalf of the Exchange.8
4 PRL orders are for a size within the standard
unit (round-lot) of trading, which is 100 shares for
most stocks, but contains a portion that is smaller
than the standard unit of trading, e.g. 199 shares.
It should be noted that for certain securities trading
on the NYSE Alternext Trading Systems the
standard unit of trading is 10 shares.
5 See SR–NYSE–2009–27 (to be filed March 11,
2009).
6 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).
7 15 U.S.C. 78f.
8 See Securities Exchange Act Release No. 58705
(October 1, 2008), 73 FR 58995 (October 8, 2008)
(SR–Amex 2008–63) (approving the Equities
Relocation).
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13501
In order to implement the Equities
Relocation, the Exchange adopted Rules
1–1004 of the New York Stock Exchange
LLC as the NYSE Alternext Equities
Rules to govern the equities trading on
the NYSE Alternext Trading Systems.
Current Execution of Odd-Lot Orders
Currently, odd-lot orders on the
Exchange are processed in a separate
system on the Exchange from the
Exchange systems that execute roundlot orders. Odd-lots are executed
systemically by Exchange systems
designated solely for odd-lot orders (the
‘‘Odd-lot System’’).9 The odd-lot System
executes all odd-lot orders against the
DMM as the contra party.10
Pursuant to NYSE Alternext Equities
Rule 124(c), after odd-lot market orders
and marketable odd-lot limit orders are
received by the Odd-lot System, they are
automatically executed at the price of
the next round-lot transaction in the
subject security on the Exchange.
Specifically, marketable odd-lot orders
and marketable odd-lot limit orders are
executed in time priority of receipt at
the price of the next round-lot
transaction, pursuant to the net process
described in footnote 14 [sic]. The
imbalance of marketable odd-lot orders
that do not receive an execution as a
result of the netting provision are
executed in time priority of receipt at
the price of the NBBO, subject to a
volume limitation.11 Any imbalances of
odd-lot limit orders that were nonmarketable upon receipt that
subsequently become marketable
receive an execution at their limit
price.12 Marketable odd-lot orders
which would otherwise receive a partial
9 See
NYSE Alternext Equities Rule 124(a).
Odd-lot orders are in effect netted against
one another and executed; however, since the DMM
is buying the same amount that he or she is selling,
there is no economic consequence to the DMM in
this type of pairing-off of orders. Any imbalance of
buy or sell odd-lot market orders are executed
against the DMM, up to the size of the round-lot
transaction or the BID/OFFER size which ever is
less.
11 The volume limitation in section (c) of the rule
is defined as the lesser of either the number of
shares in the last round-lot transaction or the
number of shares available at the national best bid
(in the case of an odd-lot order to sell), or the
national best offer (in the case of an odd-lot order
to buy).
12 Pursuant to NYSE Alternext Equities Rule
124(d) odd-lot limit orders that are non-marketable
upon receipt that become marketable are eligible to
be netted and executed at the price of the next
round-lot transaction. If odd-lot limit orders do not
receive an execution pursuant to the netting
provision, then the orders are eligible to be
executed, at its limit price, subject to the volume
limitation of section (c) of the rule.
10 Id.
E:\FR\FM\27MRN1.SGM
27MRN1
]]>Agencies
[Federal Register Volume 74, Number 58 (Friday, March 27, 2009)]
[Notices]
[Pages 13498-13501]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-6826]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59611; File No. SR-Phlx-2009-22]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of a Proposed Rule Change by NASDAQ OMX PHLX, Inc.
Relating to Administration of Certain Rules in Respect of Index Data
Dissemination
March 20, 2009.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on March 16, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'') the proposed rule change as described in
Items I, II, and III, below, which Items have been prepared by the
Exchange. 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 reflect in the administration of its rules
the expected discontinuation by the NASDAQ OMX Futures Exchange, Inc.
(``NFX'') of index value distribution over NFX's Market Data
Distribution Network (``MDDN''). Index values will continue to be
distributed via another NASDAQ OMX data dissemination service, and the
discontinuation of MDDN index value dissemination will not have any
impact on the listing or trading of any instruments on the
[[Page 13499]]
Exchange, or on any facility of a national securities exchange within
the meaning of the Act. The Exchange is not proposing to amend the text
of any rules, but simply to change the administration of certain rules,
as described below.
The text of the proposed rule change is available on the Exchange's
Web site at https://www.nasdaqtrader.com/micro.aspx?id=PHLXRulefilings.
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 Exchange 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 these 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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Currently, the values of the Exchange's various proprietary indexes
are disseminated in parallel over two separate data services operated
by The NASDAQ OMX Group, Inc. (``NASDAQ OMX'').\3\ These values are
included both in NFX's MDDN \4\ and NASDAQ OMX's data dissemination
service. The purpose of this filing is to reflect the pending
discontinuation by NFX of its index data dissemination service over
MDDN as redundant and unnecessary.\5\
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\3\ NASDAQ OMX acquired the Exchange on July 24, 2008. NFX,
which was previously known as the Philadelphia Board of Trade and
became a subsidiary of NASDAQ OMX on the same date, is a Designated
Contract Market within the meaning of the Commodities Exchange Act.
\4\ MDDN is an Internet protocol multicast network, which was
developed by NFX for the purpose of, among other things,
transmitting current and closing index values.
\5\ The Exchange's rule book and fee schedule do not reference
MDDN. As explained herein, MDDN is not a service being provided by
the Exchange (rather, it is a service of NFX, a designated contract
market under the Commodities Exchange Act), and even if MDDN were an
Exchange-supplied service, it would not constitute a facility of a
national securities exchange, making its inclusion in the Exchange's
rule book unnecessary. See, e.g., Securities Exchange Act Release
No. 34-58897 (November 3, 2008), 73 FR 66952 (November 12, 2008)
(SR-NASDAQ-2008-018) (NASDAQ's index dissemination service is not a
facility of a national securities exchange, and its terms are not
rules that must be filed with the Commission).
---------------------------------------------------------------------------
Exchange rules condition the listing and trading of index options
on, among other things, the dissemination of underlying index values
periodically during the trading day and closing index values after the
close of the trading day. Rule 1009A(b)(10) provides that the current
underlying index value for narrow-based indexes will be reported at
least once every fifteen seconds during the time the index options are
traded on the Exchange.\6\ Additionally, Rule 1100A(a) provides that
the Exchange shall disseminate or shall assure that the closing index
value is disseminated after the close of business and the current index
value is disseminated from time-to-time on days on which transactions
in index options are made on the Exchange.\7\
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\6\ See also Rule 1009A(c)(1) (regarding reporting requirements
for continued listing of narrow-based indexes underlying options);
and Rules 1009A(d)(11) and 1109A(e)(1) (regarding reporting
requirements for initial and continued listing of broad-based
indexes underlying options).
\7\ See also Securities Exchange Act Release No. 53790 (May 11,
2006), 71 FR 28737 (May 17, 2006) (SR-Phlx-2006-04) (regarding,
among other things, transmission over MDDN of current and closing
index values underlying four index options that were approved by
Commission order: XAU, OSX, SOX, and UTY).
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The Exchange lists options on several proprietary indexes.\8\ Under
this proposed rule change, discontinuation of the MDDN index value
dissemination service will not affect the eligibility of such options
to be listed and traded because dissemination of the underlying index
data will not stop and will not be interrupted. All index values
included in MDDN are currently also being disseminated over another
NASDAQ OMX index dissemination service, making the MDDN index
dissemination duplicative and no longer necessary.\9\ In the future,
the Exchange will continue dissemination of its index data either
through NASDAQ OMX's index dissemination service or through one or more
other (NASDAQ OMX-owned or unrelated) major market data vendors.\10\
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\8\ The proprietary indexes listed on the Exchange include: PHLX
Chemicals Index (XCM); PHLX Defense Sector (DFX); PHLX Drug Sector
(RXS); PHLX Europe Sector (XEX); PHLX Gold/Silver Sector (XAU); PHLX
Housing Sector (HGX); PHLX Marine Shipping Index (SHX); PHLX Medical
Device Index (MXZ); PHLX Oil Service Sector (OSX); PHLX
Semiconductor Sector (SOX); PHLX Sports Index (SXP); and PHLX
Utility Sector (UTY). DFX, RXS, HGX, OSX, and SOX are listed and
options are traded pursuant to Rule 1009(A), which provides for
trading of options on indexes pursuant to Rule 19b-4(e) of the Act.
XAU and UTY, being two of the oldest indexes that pre-date Rule 19b-
4(e), are listed and options are traded pursuant to Commission
orders. See Securities Exchange Act Release Nos. 20437 (December 2,
1983), 48 FR 55229 (December 9, 1983) (XAU); and 24889 (September 9,
1987), 52 FR 35021 (September 16, 1987) (UTY). XCM, XEX, SHX, MXZ,
and SXP are no longer listed or traded and have no open options
interest.
\9\ It is expected that other MDDN data streams will continue to
operate as a service of NFX to distribute NFX trading data.
\10\ As is the case with the values of proprietary indexes,
current and closing index values of certain non-proprietary indexes
underlying options listed on the Exchange (Hapoalim American Israeli
Index, SIG Coal Producers Index, SIG Energy MLP Index, and SIG Oil
Production & Exploration Index) and data regarding foreign
currencies underlying options listed on the Exchange (Australian
dollars, British pounds, Canadian dollars, Euros, Japanese Yen and
Swiss Francs) will likewise continue to be distributed over the
NASDAQ OMX index dissemination service or one or more other (NASDAQ
OMX-owned or unrelated) major market data vendors.
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The Exchange believes that, just like NASDAQ's index dissemination
service,\11\ NFX's MDDN index dissemination service is not a facility
of any national securities exchange within the meaning of the Act and
that the Exchange is not required under Section 19(b)(1) of the Act
\12\ and Rule 19b-4 thereunder \13\ to file rule changes regarding
administration of such service. If, at a later date, the Exchange
proposed to modify the manner in which it disseminates index values,
causing the relevant index dissemination service to fit within the
definition of a facility of an exchange, or the Exchange proposed to
tie the fees for receiving data from the index dissemination service to
fees for usage of exchange services (to include, for example, listing
and trading), the Exchange would file a proposed rule change with the
Commission.\14\
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\11\ See Securities Exchange Act Release No. 34-58897 (November
3, 2008), 73 FR 66952 (November 12, 2008) (SR-NASDAQ-2008-018)
(NASDAQ's index dissemination service is not a facility of a
national securities exchange, and its terms are not rules that must
be filed with the Commission).
\12\ 15 U.S.C. 78s(b)(1).
\13\ 17 CFR 240.19b-4.
\14\ See Securities Exchange Act Release No. 58897 (November 3,
2008), 73 FR 66952 (November 12, 2008) (SR-NASDAQ-2008-018).
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2. Statutory Basis
The Exchange believes that its proposal is consistent with Section
6(b) of the Act \15\ in general, and furthers the objectives of Section
6(b)(5) of the Act \16\ in particular, in that it is 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 by clarifying how underlying index data is to be disseminated.
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\15\ 15 U.S.C. 78f(b).
\16\ 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
[[Page 13500]]
any burden on competition 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 either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act and paragraph (f)(1) of Rule 19b-4 thereunder.
Pursuant to the Act, the proposed rule change has been designated by
the Exchange as constituting a stated policy, practice, or
interpretation with respect to the meaning, administration, or
enforcement of an existing rule. Specifically, as described above, the
Exchange has stated how it will administer the enumerated portions of
Phlx Rules 1009A and 1100A in light of the discontinuation of index
data dissemination over NFX's MDDN. At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate 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.
As discussed above, the Exchange believes that the MDDN index
dissemination service is not a ``facility of a national securities
exchange,'' and the terms and conditions of this service are therefore
not included in the text of the Exchange's rules. Because of this, no
changes are being made to the Exchange rule book or fee schedule, and
this filing should be viewed as a statement of how the Exchange will
administer its existing rules in light of the impending discontinuation
of a non-exchange service (MDDN index dissemination) by a sister
company (NFX).
It must be noted in this regard that rule changes to discontinue
important exchange services (as opposed to non-exchange services, as is
the case here) have in the past been accepted by the Commission on
immediately effective basis under paragraph (f)(1) of Rule 19-b(4).\17\
It stands to reason that discontinuation of a non-exchange service
should receive the same treatment under paragraph (f)(1).
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\17\ See, e.g. , Securities Exchange Act Release No. 58613
(Sept. 22, 2008), 73 FR 57181 (Oct. 1, 2008) (SR-PHLX-2008-065)
(immediately effective filing to change the administration of
Exchange rules as a result of the shutdown of the entire XLE equity
trading).
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In its recent interpretive guidance regarding the self-regulatory
organizations' rule filing process, the Commission stated that certain
SRO proposals ``may be filed as an immediately effective rule so long
as it is based on and similar to another SRO's rule'' and raises no new
policy issues.\18\ Filings in this category are eligible to be
submitted under paragraph (f)(6) of Rule 19b-4.\19\ As explained below,
paragraph (f)(6) could serve as a separate basis for this filing's
designation under Rule 19(b)(3), but the Exchange believes that
designation under paragraph (f)(1) is more appropriate in this case.
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\18\ Securities Exchange Act Release No. 58092 (July 3, 2008),
73 FR 40144 (July 11, 2008).
\19\ 17 CFR 240.19b-4(f)(6).
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The Commission recently approved removal of index dissemination
from the rule book of another exchange, NASDAQ,\20\ and in its impact,
the present filing is similar to the NASDAQ filing. With the shut-down
of MDDN index dissemination, both the PHLX and NASDAQ index values will
continue to be distributed by the same index dissemination service, and
since that service is not a facility of any national securities
exchange (either NASDAQ or PHLX), its terms are not rules of an
exchange within the meaning of the Act. This similarity to another
SRO's rule makes the present filing eligible for immediate
effectiveness under paragraph (f)(6) of Rule 19(b)(4).
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\20\ Securities Exchange Act Release No. 58897 (November 3,
2008), 73 FR 66952 (November 12, 2008) (SR-NASDAQ-2008-018)
(NASDAQ's index dissemination service is not a facility of a
national securities exchange, and its terms are not rules that must
be filed with the Commission).
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However, unlike the NASDAQ proposal, the present filing does not
require any modifications to codified rule text and relates to a
service that is being proposed for discontinuation. As explained above,
even when the service to be discontinued is an important facility of a
national securities exchange, its discontinuation has in the past been
accepted as immediately effective under paragraph (f)(1) of Rule 19b-4.
Based on prior Commission practice, while paragraph (f)(6) of Rule 19b-
4 would certainly apply to this filing, paragraph (f)(1) of this Rule
is the appropriate basis for its immediate effectiveness.
Based on the foregoing, the Exchange designates this filing as
immediately effective under paragraph (f)(1) of Rule 19b-4. It is
expected that notice of the impending discontinuation of MDDN index
dissemination will be given as soon as practicable and the actual
discontinuation will occur shortly thereafter, on a timetable that
would minimize any possible inconvenience to its users.
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 (https://www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Phlx-2009-22 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-Phlx-2009-22. This file
number should be included on the subject line if e-mail 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 (https://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 inspection and
copying in the Commission's Public Reference Room on official business
days between the hours of 10 a.m. and 3 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-
Phlx-2009-22 and should be submitted on or before April 17, 2009.
[[Page 13501]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-6826 Filed 3-26-09; 8:45 am]
BILLING CODE 8010-01-P
