Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Order Granting Approval of Proposed Rule Change Relating to the Rejection of Undisplayed Odd-Lot Orders From the Exchange's Matching System, 37076-37077 [E9-17766]
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37076
Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Notices
such prior approval.’’ 16 Nasdaq believes
the proposed rule change is ‘‘based on
and similar to’’ the rule changes
recently approved in the Affiliation
Orders and furthers efforts to effectively
address the concerns previously
identified by the Commission regarding
the potential for conflicts of interest and
informational advantages when an
exchange is affiliated with one of its
market participants.17
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.18
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
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 also will be available
for inspection and copying at the
principal office of Nasdaq. 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–NASDAQ–2009–065 and
should be submitted on or before
August 17, 2009.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–17767 Filed 7–24–09; 8:45 am]
• 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–NASDAQ–2009–065 on the
subject line.
BILLING CODE 8010–01–P
Paper Comments
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Order
Granting Approval of Proposed Rule
Change Relating to the Rejection of
Undisplayed Odd-Lot Orders From the
Exchange’s Matching System
jlentini on DSKJ8SOYB1PROD with NOTICES
• 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–NASDAQ–2009–065. 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
16 Id.
at 40149.
the Affiliation Orders, supra note 8.
18 For purposes of calculating the 60-day period
within which the Commission may summarily
abrogate the proposed rule change under Section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on July 17, 2009, the date
on which Nasdaq submitted Amendment No. 2. See
15 U.S.C. 78s(b)(3)(C).
17 See
VerDate Nov<24>2008
19:02 Jul 24, 2009
Jkt 217001
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60353; File No. SR–CHX–
2009–02]
July 21, 2009.
On June 2, 2009, the Chicago Stock
Exchange, Inc. (‘‘CHX’’ or 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:
(1) Allow Exchange customers to specify
whether odd-lot orders and unexecuted
odd-lot remainders, that are not able to
be immediately displayed, should
remain in, or be rejected from, the
Exchange’s Matching System, and (2)
add a generic routing rule to clarify how
any orders that are rejected from the
Exchange’s Matching System, and
routed away according to Participant
instructions, will be handled. The
PO 00000
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
Frm 00080
Fmt 4703
Sfmt 4703
proposed rule change was published for
comment in the Federal Register on
June 17, 2009.3 The Commission
received no comments on the proposed
rule change. This order approves the
proposed rule change.
The Exchange proposes to amend
CHX Article 20, Rule 8 to allow
Exchange Participants to specify
whether odd-lot orders and unexecuted
odd-lot remainders, that are not able to
be immediately displayed, should
remain in, or be rejected from, the
Exchange’s Matching System. This
preference could be set by the
Participant on both a default and order
by order basis. Orders remaining in the
Matching System will continue to be
ranked at the price and time at which
they were originally received. Orders
that are rejected from the Matching
System shall either be sent back to the
order sender or be routed to another
destination according to each
Participant’s instructions 4 or, if
designated ‘‘do not route,’’
automatically cancelled. The Exchange
also proposes that Participants that elect
to have orders routed to another
destination pursuant to this rule, or
pursuant to Article 20, Rule 5
(‘‘Prevention of Trade-throughs’’), agree
to be bound by such transactions.
In addition, the Exchange proposes to
add a generic routing rule to clarify how
any orders that are rejected from the
Exchange’s Matching System, and
routed away according to Participant
instructions, will be handled. The use of
routing services is optional and is
available only to exchange Participants.
In such cases, the Participant will be
responsible for ensuring that it has a
relationship with its chosen
destinations to permit the requested
access. The Exchange shall not have
responsibility for the handling of the
order by the other destination, but will
report any execution or cancellation of
the order by the other destination to the
Participant that submitted the order,
will notify the other venue of any
cancellations or changes to the order
submitted by the order-sending
Participant and, if requested by the
Participant and its chosen destination,
will flip any executions into the
Participants account, as necessary, and
3 See Securities Exchange Act Release No. 60083
(June 10, 2009), 74 FR 28739.
4 The Exchange notes that orders rejected in
accordance with this rule will be routed in the same
manner as those rejected under the NMS tradethrough validation rule (Exchange Article 20, Rule
5, Interpretations and Policies .03), which has
already been approved by the Commission.
E:\FR\FM\27JYN1.SGM
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Federal Register / Vol. 74, No. 142 / Monday, July 27, 2009 / Notices
jlentini on DSKJ8SOYB1PROD with NOTICES
report that second leg of the awaymarket transaction to clearing.5
The Exchange will provide its Routing
Services pursuant to the proposed rule
and three separate agreements, to the
extent that they are applicable to a
specific routing decision and deemed
necessary by the Exchange and/or a
third-party broker-dealer providing
connectivity to other markets. The
Exchange will provide such Routing
Services in compliance with its rules
and with the provisions of the Act and
the rules thereunder, including, but not
limited to, the requirements of Sections
6(b)(4) 6 and (5) 7 of the Act that the
rules of a national securities exchange
provide for the equitable allocation of
dues, fees and other charges among its
members and issues and other persons
using its facilities, and not be designed
to permit unfair discrimination between
customers, issuers, brokers or dealers.
The Commission finds that the
proposed rule change is consistent with
the requirements of the Act and the
rules and regulations thereunder that
are applicable to a national securities
exchange.8 In particular, the
Commission believes that the proposed
rule change is consistent with Section
6(b)(5) of the Act,9 in that it is designed
to promote just and equitable principles
of trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, 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.
The Commission believes that the
proposed rule change may increase the
efficiency of Exchange Participants in
seeking to execute their customers’
orders that are ineligible for execution
or display in the Exchange’s Matching
System. In particular, odd-lot orders
5 For example, if the Exchange routes a
participant’s buy order to the participant’s chosen
destination (Router ABC) and Router ABC gets an
execution of that order in another market against
market maker XYZ, the first leg of the transaction
(ABC buying from XYZ) will be reported to clearing
by the other market. The Router ABC would send
an execution report back to the Exchange (for
routing to the original order-sending participant).
Under this proposal, if the participant and Router
ABC had requested, the Exchange would take the
execution report and create a clearing-only record,
flipping the execution from Router ABC’s account
to the account of the order-sending participant
(ABC selling to the order-sending participant).
6 15 U.S.C. 78f(b)(4)
7 15 U.S.C. 78f(b)(5)
8 In approving this rule, the Commission notes
that it has considered the proposed rule’s impact on
efficiency, competition, and capital formation. See
15 U.S.C. 78c(f).
9 15 U.S.C. 78f(b)(5).
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19:02 Jul 24, 2009
Jkt 217001
that are not immediately displayed in
the Matching System or orders that
otherwise would be cancelled back to a
participant may be sent directly to a
destination chosen by the participant for
handling. The Commission notes that
the Exchange’s proposed generic routing
rule will operate in the same manner as
its current routing rule for orders
rejected by the Exchange’s Matching
System under its NMS trade-through
validation rule,10 which was previously
approved by the Commission.11
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,12 that the
proposed rule change (SR–CHX–2009–
02) be, and it hereby is, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.13
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–17766 Filed 7–24–09; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–60348; File No. SR–FINRA–
2009–019]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Order Approving
Proposed Rule Change To Adopt
FINRA Rules 1010 (Electronic Filing
Requirements for Uniform Forms) and
2263 (Arbitration Disclosure to
Associated Persons Signing or
Acknowledging Form U4) in the
Consolidated FINRA Rulebook
July 20, 2009.
I. Introduction
On April 7, 2009, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) (f/k/a ‘‘NASD’’) 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 adopt, subject to certain
amendments, NASD Rule 1140
(Electronic Filing Rules) as new FINRA
Rule 1010 (Electronic Filing
Requirements for Uniform Forms) and
NASD Rule 3080 (Disclosure to
Associated Persons When Signing Form
10 See CHX Rules Article 20, Rule 5,
Interpretations and Policies .03.
11 See Securities Exchange Act Release No. 54963
(December 19, 2006), 71 FR 77834 (December 17,
2006) (SR–CHX–2006–30).
12 15 U.S.C. 78s(b)(2).
13 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
PO 00000
Frm 00081
Fmt 4703
Sfmt 4703
37077
U–4) as new FINRA Rule 2263
(Arbitration Disclosure to Associated
Persons Signing or Acknowledging
Form U4) in the consolidated FINRA
rulebook. The proposal was published
for comment in the Federal Register on
April 24, 2009.3 The Commission
received one comment letter, on May
15, 2009, on the proposal.4 FINRA
responded to the commenter on July 8,
2009.5 This order approves the
proposed rule change.
II. Description of the Proposal
Proposed FINRA Rule 1010
NASD’s Rule 1140 specifies that an
electronic initial and transfer Form U4
must be based on a signed Form U4, but
the rule does not expressly state that the
signatures must be manual. The
proposed rule would require that every
initial Form U4 and every Form U4 filed
to transfer a registered person’s
association from one firm to another
firm be based on an original, manuallysigned Form U4 provided to the member
by the person on whose behalf the Form
U4 is being filed.6
The proposed rule change also
modifies the signature requirement with
respect to amendments to disclosure
information in the Form U4. NASD’s
Rule 1140 requires the associated
person on whose behalf the filing is
made to sign amendments to Form U4
that provide disclosure information.
Proposed FINRA Rule 1010 would
permit a firm to file amendments to the
Form U4 disclosure information without
obtaining the registered person’s manual
signature if the firm uses reasonable
efforts to i) provide the registered
person with a copy of the amended
disclosure information before filing and
ii) obtain the registered person’s written
acknowledgment that the information
has been received and reviewed, which
may be accomplished electronically,
before filing.7
3 See Securities Exchange Act Release No. 59784
(April 17, 2009), 74 FR 18779 (April 24, 2009)
(‘‘Notice’’).
4 See letter to Florence E. Harmon, Deputy
Secretary, Commission, from Bari Havlik, Senior
Vice President and Chief Compliance Officer,
Charles Schwab & Co., Inc., dated May 15, 2009
(‘‘Schwab Letter’’).
5 See letter to Elizabeth M. Murphy, Secretary,
Commission, from Patricia Albrecht, Assistant
General Counsel, FINRA, dated July 8, 2009
(‘‘Response Letter’’).
6 Member firms use the Central Registration
Depository (CRD), a Web based system, to submit
the form on behalf of the associated person by
typing the person’s name into the signature box on
the electronic form.
7 The member, as part of its recordkeeping
requirements pursuant to Rule 17a–4(e)(1) under
the Act, would be required to retain the written
acknowledgment and make it available promptly
upon request.
E:\FR\FM\27JYN1.SGM
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]]>Agencies
[Federal Register Volume 74, Number 142 (Monday, July 27, 2009)]
[Notices]
[Pages 37076-37077]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-17766]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-60353; File No. SR-CHX-2009-02]
Self-Regulatory Organizations; Chicago Stock Exchange, Inc.;
Order Granting Approval of Proposed Rule Change Relating to the
Rejection of Undisplayed Odd-Lot Orders From the Exchange's Matching
System
July 21, 2009.
On June 2, 2009, the Chicago Stock Exchange, Inc. (``CHX'' or 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: (1) Allow Exchange customers to specify
whether odd-lot orders and unexecuted odd-lot remainders, that are not
able to be immediately displayed, should remain in, or be rejected
from, the Exchange's Matching System, and (2) add a generic routing
rule to clarify how any orders that are rejected from the Exchange's
Matching System, and routed away according to Participant instructions,
will be handled. The proposed rule change was published for comment in
the Federal Register on June 17, 2009.\3\ The Commission received no
comments on the proposed rule change. 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. 60083 (June 10,
2009), 74 FR 28739.
---------------------------------------------------------------------------
The Exchange proposes to amend CHX Article 20, Rule 8 to allow
Exchange Participants to specify whether odd-lot orders and unexecuted
odd-lot remainders, that are not able to be immediately displayed,
should remain in, or be rejected from, the Exchange's Matching System.
This preference could be set by the Participant on both a default and
order by order basis. Orders remaining in the Matching System will
continue to be ranked at the price and time at which they were
originally received. Orders that are rejected from the Matching System
shall either be sent back to the order sender or be routed to another
destination according to each Participant's instructions \4\ or, if
designated ``do not route,'' automatically cancelled. The Exchange also
proposes that Participants that elect to have orders routed to another
destination pursuant to this rule, or pursuant to Article 20, Rule 5
(``Prevention of Trade-throughs''), agree to be bound by such
transactions.
---------------------------------------------------------------------------
\4\ The Exchange notes that orders rejected in accordance with
this rule will be routed in the same manner as those rejected under
the NMS trade-through validation rule (Exchange Article 20, Rule 5,
Interpretations and Policies .03), which has already been approved
by the Commission.
---------------------------------------------------------------------------
In addition, the Exchange proposes to add a generic routing rule to
clarify how any orders that are rejected from the Exchange's Matching
System, and routed away according to Participant instructions, will be
handled. The use of routing services is optional and is available only
to exchange Participants. In such cases, the Participant will be
responsible for ensuring that it has a relationship with its chosen
destinations to permit the requested access. The Exchange shall not
have responsibility for the handling of the order by the other
destination, but will report any execution or cancellation of the order
by the other destination to the Participant that submitted the order,
will notify the other venue of any cancellations or changes to the
order submitted by the order-sending Participant and, if requested by
the Participant and its chosen destination, will flip any executions
into the Participants account, as necessary, and
[[Page 37077]]
report that second leg of the away-market transaction to clearing.\5\
---------------------------------------------------------------------------
\5\ For example, if the Exchange routes a participant's buy
order to the participant's chosen destination (Router ABC) and
Router ABC gets an execution of that order in another market against
market maker XYZ, the first leg of the transaction (ABC buying from
XYZ) will be reported to clearing by the other market. The Router
ABC would send an execution report back to the Exchange (for routing
to the original order-sending participant). Under this proposal, if
the participant and Router ABC had requested, the Exchange would
take the execution report and create a clearing-only record,
flipping the execution from Router ABC's account to the account of
the order-sending participant (ABC selling to the order-sending
participant).
---------------------------------------------------------------------------
The Exchange will provide its Routing Services pursuant to the
proposed rule and three separate agreements, to the extent that they
are applicable to a specific routing decision and deemed necessary by
the Exchange and/or a third-party broker-dealer providing connectivity
to other markets. The Exchange will provide such Routing Services in
compliance with its rules and with the provisions of the Act and the
rules thereunder, including, but not limited to, the requirements of
Sections 6(b)(4) \6\ and (5) \7\ of the Act that the rules of a
national securities exchange provide for the equitable allocation of
dues, fees and other charges among its members and issues and other
persons using its facilities, and not be designed to permit unfair
discrimination between customers, issuers, brokers or dealers.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(4)
\7\ 15 U.S.C. 78f(b)(5)
---------------------------------------------------------------------------
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder that are applicable to a national securities exchange.\8\ In
particular, the Commission believes that the proposed rule change is
consistent with Section 6(b)(5) of the Act,\9\ in that it is designed
to promote just and equitable principles of trade, to foster
cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, 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.
---------------------------------------------------------------------------
\8\ In approving this rule, the Commission notes that it has
considered the proposed rule's impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Commission believes that the proposed rule change may increase
the efficiency of Exchange Participants in seeking to execute their
customers' orders that are ineligible for execution or display in the
Exchange's Matching System. In particular, odd-lot orders that are not
immediately displayed in the Matching System or orders that otherwise
would be cancelled back to a participant may be sent directly to a
destination chosen by the participant for handling. The Commission
notes that the Exchange's proposed generic routing rule will operate in
the same manner as its current routing rule for orders rejected by the
Exchange's Matching System under its NMS trade-through validation
rule,\10\ which was previously approved by the Commission.\11\
---------------------------------------------------------------------------
\10\ See CHX Rules Article 20, Rule 5, Interpretations and
Policies .03.
\11\ See Securities Exchange Act Release No. 54963 (December 19,
2006), 71 FR 77834 (December 17, 2006) (SR-CHX-2006-30).
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-CHX-2009-02) be, and it
hereby is, approved.
---------------------------------------------------------------------------
\12\ 15 U.S.C. 78s(b)(2).
\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-17766 Filed 7-24-09; 8:45 am]
BILLING CODE 8010-01-P
