Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order Approving Proposed Rule Change Allowing Entry of Orders Into the PIP at a Price Matching the National Best Bid or Offer, 15551-15552 [E9-7588]
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Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices
trading the Shares. Specifically, the
Bulletin will discuss the following: (1)
The procedures for purchases and
redemptions of Shares in Creation Unit
aggregations (and that Shares are not
individually redeemable); (2) NYSE
Arca Equities Rule 9.2(a), which
imposes a duty of due diligence on its
ETP Holders to learn the essential facts
relating to every customer prior to
trading the Shares; (3) the risks involved
in trading the Shares during the
Opening and Late Trading Sessions
when an updated Portfolio Indicative
Value will not be calculated or publicly
disseminated; (4) how information
regarding the Portfolio Indicative Value
is disseminated; (5) the requirement that
ETP Holders deliver a prospectus to
investors purchasing newly issued
Shares prior to or concurrently with the
confirmation of a transaction; and (6)
trading information.
In addition, the Bulletin will
reference that the Fund is subject to
various fees and expenses described in
the Registration Statement. The Bulletin
will discuss any exemptive, no-action,
and interpretive relief granted by the
Commission from any rules under the
Exchange Act. The Bulletin will also
disclose that the NAV for the Shares
will be calculated after 4 p.m. Eastern
Time each trading day.
2. Statutory Basis
The basis under the Exchange Act for
this proposed rule change is the
requirement under Section 6(b)(5) 15
that an exchange have rules that are
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to remove impediments to, and
perfect the mechanism of a free and
open market and, in general, to protect
investors and the public interest. The
Exchange believes that the proposed
rule change will facilitate the listing and
trading of an additional type of actively
managed exchange-traded product that
will enhance competition among market
participants, to the benefit of investors
and the marketplace.
pwalker on PROD1PC71 with NOTICES
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.
15 15
U.S.C. 78f(b)(5).
VerDate Nov<24>2008
19:48 Apr 03, 2009
Jkt 217001
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 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 the proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
The Exchange has requested accelerated
approval of this proposed rule change
prior to the 30th day after the date of
publication of notice in the Federal
Register. The Commission is
considering granting accelerated
approval of the proposed rule change at
the end of a 15-day comment period.
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
15551
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, 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 will also be available
for inspection and copying at NYSE
Arca’s principal office and on its
Internet Web site at https://
www.nyse.com. 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–
NYSEArca–2009–22 and should be
submitted on or before April 27, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7585 Filed 4–3–09; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59654; File No. SR–BX–
2009–008]
• 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–NYSEArca–2009–22 on the
subject line.
Self-Regulatory Organizations;
NASDAQ OMX BX, Inc.; Order
Approving Proposed Rule Change
Allowing Entry of Orders Into the PIP
at a Price Matching the National Best
Bid or Offer
Paper Comments
I. Introduction
On February 9, 2009, NASDAQ OMX
BX, Inc. (the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
allow Exchange Options Participants to
enter orders into the Price Improvement
Period (‘‘PIP’’) at a price that matches
• 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–NYSEArca–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/
PO 00000
Frm 00123
Fmt 4703
Sfmt 4703
March 30, 2009.
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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06APN1
15552
Federal Register / Vol. 74, No. 64 / Monday, April 6, 2009 / Notices
the national best bid or offer (‘‘NBBO’’).
The proposed rule change was
published for comment in the Federal
Register on February 23, 2009.3 The
Commission received no comments on
the proposal. This order approves the
proposed rule change.
II. Description of the Proposal
pwalker on PROD1PC71 with NOTICES
The Exchange’s PIP currently allows
Options Participants to enter two-sided
orders for execution at a price that
improves upon the NBBO.4 The
customer side of the order (‘‘PIP Order’’)
is submitted to the PIP with a matching
guaranteed contra order (the ‘‘Primary
Improvement Order’’), equal to the full
size of the PIP Order. Under the current
rules of the Boston Options Exchange
Group, LLC (‘‘BOX’’), the Primary
Improvement Order must represent a
higher bid (lower offer) than that of the
NBBO at the time of the commencement
of the PIP. The PIP Order is then
exposed to all Options Participants to
give them an opportunity to participate
in the trade at the proposed cross price
or better.
The Exchange proposes to modify its
rules to permit an Options Participant to
enter a Primary Improvement Order into
the PIP at a price that is equal to the
NBBO at the time of the commencement
of the PIP. In addition, the Exchange
proposes that, at the commencement of
the PIP, all quotes and orders on the
BOX Book prior to the PIP Broadcast
that are equal to or better than 5 the
Primary Improvement Order price (i.e.,
the PIP start price), except any
proprietary quote or order from the
Options Participant who submitted the
Primary Improvement Order,6 will be
immediately executed against the PIP
Order in price/time priority.7 At the
conclusion of the PIP, the PIP Order will
be matched against the best prevailing
quote(s) or order(s) on BOX in
accordance with the current PIP rule,
except the Exchange proposes that any
3 See Securities Exchange Act Release No. 59407
(February 13, 2009), 74 FR 8132.
4 See BOX Rules Chapter V, Section 18(e).
5 BOX has clarified that there are two types of
quotes/orders that could have a price better than the
PIP start price: (1) An Auto Auction Order
(‘‘AAO’’); and (2) an order that is in the process of
being filtered by the BOX Trading Host pursuant to
BOX Rules Chapter V, Section 16. Electronic mail
from Wayne Pestone, Chief Legal Officer, Boston
Options Exchange, dated March 30, 2009.
6 These proprietary quotes or orders will continue
to be available for execution with all other types of
quotes and orders as currently permissible under
BOX Rules.
7 See proposed BOX Rules Chapter V, Section
18(e)(i). Orders on the BOX Book will include AAO
Limit Orders on the BOX Book. The AAO will
immediately execute against the PIP Order at the
AAO Limit Order Price (i.e. the displayed price at
the minimum trading increment).
VerDate Nov<24>2008
19:48 Apr 03, 2009
Jkt 217001
pre-PIP Broadcast proprietary quote or
order from the Options Participant who
submitted the Primary Improvement
Order will not be executed against the
PIP Order.8
III. Discussion
After careful review, the Commission
finds that the proposed rule change is
consistent with the requirements of the
Act and the rules and regulations
thereunder applicable to a national
securities exchange and, in particular,
with Section 6(b)(5) of the Act,9 which
requires, among other things, that the
rules of a national securities exchange
be designed to prevent fraudulent and
manipulative acts and practices, 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.10
The Commission believes that the
proposed rule change will continue to
provide customers with an opportunity
for price improvement over the NBBO.11
The Commission notes that once a
Primary Improvement Order is
submitted into the PIP auction, the
Primary Improvement Order may not be
cancelled.12 Therefore, the PIP Order
submitted to the PIP auction will be
guaranteed an execution price of at least
the NBBO and, moreover, will be given
an opportunity for execution at a price
better than the NBBO. Further, BOX’s
current rules provide for broad
participation in a PIP auction,13 which
should provide the opportunity for a
meaningful, competitive auction.
Moreover, the Commission believes that
the proposal may encourage increased
participation in the PIP by BOX
members willing to trade with the PIP
Order at the NBBO but not better than
the NBBO. Increased participation
would decrease the proportion of a PIP
8 See proposed BOX Rules Chapter V, Section
18(e)(iii).
9 15 U.S.C. 78f(b)(5).
10 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact on efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
11 The Commission notes that it also recently
approved an ISE proposed rule change that permits
ISE members to enter an order into the PIM at a
price that is equal to the NBBO when the ISE’s best
bid or offer is inferior to the NBBO. See Securities
Exchange Act Release No. 57847 (May 21, 2008), 73
FR 30987 (May 29, 2008) (SR–ISE–2008–29).
12 See BOX Rules Chapter V, Section 18(e)(ii).
13 See BOX Rules, Chapter V, Section 18(e)(i).
Specifically, BOX’s PIP permits market-makers to
submit competing orders for their own account and
all non-market-maker members (referred to as
‘‘Order Flow Providers’’) to submit competing
orders for their own account or for the account of
public customers or non-market-maker brokerdealers.
PO 00000
Frm 00124
Fmt 4703
Sfmt 4703
Order that would be internalized by the
submitting Options Participant.
The Commission also notes that the
proposal will maintain the priority of
pre-existing orders on the BOX Book by
providing that all quotes and orders on
the BOX Book prior to the PIP Broadcast
that are equal to or better than the
Primary Improvement Order price will
be immediately executed against the PIP
Order in price/time priority (except any
proprietary quote or order from the
Options Participant that submitted the
Primary Improvement Order). Further,
the Commission notes that by
precluding these proprietary orders and
quotes from immediately executing
against the PIP Order, the proposal is
consistent with BOX rules that provide
that an Options Participant may not
execute as principal an order it
represents as agent unless the agency
order is given an opportunity to first
interact with other trading interest.14
Accordingly, the Commission finds
that the proposed rule change is
consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,15 that the
proposed rule change (SR–BX–2009–
008) be, and hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–7588 Filed 4–3–09; 8:45 am]
BILLING CODE
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–59663; File No. SR–
NASDAQ–2009–018]
Self-Regulatory Organizations; The
NASDAQ Stock Market LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Revisions and Restructuring of the
NASDAQ Listing Rules
March 31, 2009.
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 March 12,
2009, The NASDAQ Stock Market LLC
(‘‘Nasdaq’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
14 See
BOX Rules, Chapter V, Section 17.
U.S.C. 78s(b)(2).
16 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
15 15
E:\FR\FM\06APN1.SGM
06APN1
]]>Agencies
[Federal Register Volume 74, Number 64 (Monday, April 6, 2009)]
[Notices]
[Pages 15551-15552]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-7588]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-59654; File No. SR-BX-2009-008]
Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Order
Approving Proposed Rule Change Allowing Entry of Orders Into the PIP at
a Price Matching the National Best Bid or Offer
March 30, 2009.
I. Introduction
On February 9, 2009, NASDAQ OMX BX, Inc. (the ``Exchange'') filed
with the Securities and Exchange Commission (``Commission''), pursuant
to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act'')
\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change to allow
Exchange Options Participants to enter orders into the Price
Improvement Period (``PIP'') at a price that matches
[[Page 15552]]
the national best bid or offer (``NBBO''). The proposed rule change was
published for comment in the Federal Register on February 23, 2009.\3\
The Commission received no comments on the proposal. This order
approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 59407 (February 13,
2009), 74 FR 8132.
---------------------------------------------------------------------------
II. Description of the Proposal
The Exchange's PIP currently allows Options Participants to enter
two-sided orders for execution at a price that improves upon the
NBBO.\4\ The customer side of the order (``PIP Order'') is submitted to
the PIP with a matching guaranteed contra order (the ``Primary
Improvement Order''), equal to the full size of the PIP Order. Under
the current rules of the Boston Options Exchange Group, LLC (``BOX''),
the Primary Improvement Order must represent a higher bid (lower offer)
than that of the NBBO at the time of the commencement of the PIP. The
PIP Order is then exposed to all Options Participants to give them an
opportunity to participate in the trade at the proposed cross price or
better.
---------------------------------------------------------------------------
\4\ See BOX Rules Chapter V, Section 18(e).
---------------------------------------------------------------------------
The Exchange proposes to modify its rules to permit an Options
Participant to enter a Primary Improvement Order into the PIP at a
price that is equal to the NBBO at the time of the commencement of the
PIP. In addition, the Exchange proposes that, at the commencement of
the PIP, all quotes and orders on the BOX Book prior to the PIP
Broadcast that are equal to or better than \5\ the Primary Improvement
Order price (i.e., the PIP start price), except any proprietary quote
or order from the Options Participant who submitted the Primary
Improvement Order,\6\ will be immediately executed against the PIP
Order in price/time priority.\7\ At the conclusion of the PIP, the PIP
Order will be matched against the best prevailing quote(s) or order(s)
on BOX in accordance with the current PIP rule, except the Exchange
proposes that any pre-PIP Broadcast proprietary quote or order from the
Options Participant who submitted the Primary Improvement Order will
not be executed against the PIP Order.\8\
---------------------------------------------------------------------------
\5\ BOX has clarified that there are two types of quotes/orders
that could have a price better than the PIP start price: (1) An Auto
Auction Order (``AAO''); and (2) an order that is in the process of
being filtered by the BOX Trading Host pursuant to BOX Rules Chapter
V, Section 16. Electronic mail from Wayne Pestone, Chief Legal
Officer, Boston Options Exchange, dated March 30, 2009.
\6\ These proprietary quotes or orders will continue to be
available for execution with all other types of quotes and orders as
currently permissible under BOX Rules.
\7\ See proposed BOX Rules Chapter V, Section 18(e)(i). Orders
on the BOX Book will include AAO Limit Orders on the BOX Book. The
AAO will immediately execute against the PIP Order at the AAO Limit
Order Price (i.e. the displayed price at the minimum trading
increment).
\8\ See proposed BOX Rules Chapter V, Section 18(e)(iii).
---------------------------------------------------------------------------
III. Discussion
After careful review, the Commission finds that the proposed rule
change is consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange
and, in particular, with Section 6(b)(5) of the Act,\9\ which requires,
among other things, that the rules of a national securities exchange be
designed to prevent fraudulent and manipulative acts and practices, 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.\10\
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78f(b)(5).
\10\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
The Commission believes that the proposed rule change will continue
to provide customers with an opportunity for price improvement over the
NBBO.\11\ The Commission notes that once a Primary Improvement Order is
submitted into the PIP auction, the Primary Improvement Order may not
be cancelled.\12\ Therefore, the PIP Order submitted to the PIP auction
will be guaranteed an execution price of at least the NBBO and,
moreover, will be given an opportunity for execution at a price better
than the NBBO. Further, BOX's current rules provide for broad
participation in a PIP auction,\13\ which should provide the
opportunity for a meaningful, competitive auction. Moreover, the
Commission believes that the proposal may encourage increased
participation in the PIP by BOX members willing to trade with the PIP
Order at the NBBO but not better than the NBBO. Increased participation
would decrease the proportion of a PIP Order that would be internalized
by the submitting Options Participant.
---------------------------------------------------------------------------
\11\ The Commission notes that it also recently approved an ISE
proposed rule change that permits ISE members to enter an order into
the PIM at a price that is equal to the NBBO when the ISE's best bid
or offer is inferior to the NBBO. See Securities Exchange Act
Release No. 57847 (May 21, 2008), 73 FR 30987 (May 29, 2008) (SR-
ISE-2008-29).
\12\ See BOX Rules Chapter V, Section 18(e)(ii).
\13\ See BOX Rules, Chapter V, Section 18(e)(i). Specifically,
BOX's PIP permits market-makers to submit competing orders for their
own account and all non-market-maker members (referred to as ``Order
Flow Providers'') to submit competing orders for their own account
or for the account of public customers or non-market-maker broker-
dealers.
---------------------------------------------------------------------------
The Commission also notes that the proposal will maintain the
priority of pre-existing orders on the BOX Book by providing that all
quotes and orders on the BOX Book prior to the PIP Broadcast that are
equal to or better than the Primary Improvement Order price will be
immediately executed against the PIP Order in price/time priority
(except any proprietary quote or order from the Options Participant
that submitted the Primary Improvement Order). Further, the Commission
notes that by precluding these proprietary orders and quotes from
immediately executing against the PIP Order, the proposal is consistent
with BOX rules that provide that an Options Participant may not execute
as principal an order it represents as agent unless the agency order is
given an opportunity to first interact with other trading interest.\14\
---------------------------------------------------------------------------
\14\ See BOX Rules, Chapter V, Section 17.
---------------------------------------------------------------------------
Accordingly, the Commission finds that the proposed rule change is
consistent with the Act.
IV. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\15\ that the proposed rule change (SR-BX-2009-008) be, and hereby
is, approved.
---------------------------------------------------------------------------
\15\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
---------------------------------------------------------------------------
\16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-7588 Filed 4-3-09; 8:45 am]
BILLING CODE
