Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to a Technical Change to the Exchange's Complex Order Program, 501-502 [E9-31344]
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Federal Register / Vol. 75, No. 2 / Tuesday, January 5, 2010 / Notices
In the Approval Order, the
Commission determined that the
exception from NYSE Rule 2B to permit
NYSE’s indirect interest in BIDS
Trading and BIDS Trading’s affiliation
with an affiliate of the Exchange is
consistent with the Act, because the
limitations and conditions stipulated
appear reasonably designed to mitigate
concerns about potential conflicts of
interest and unfair competitive
advantage. Further, the Commission
determined that these conditions appear
reasonably designed to promote robust
and independent regulation of BIDS
Trading.
The Commission has consistently
expressed concern that an affiliation of
an exchange with, or an ownership of,
one of its members could raise a
potential conflict of interest and impede
its self-regulatory responsibilities with
respect to such member. Although the
Exchange proposes a small increase in
the ceiling of its equity ownership of
BIDS, the Commission notes that all of
the other limitations and conditions
would continue to apply, and the
exceptions to NYSE Rule 2B would
continue to be on a pilot basis. Further,
the increase in the Exchange’s equity
ownership does not appear sufficiently
large to raise additional or new
concerns. Therefore, the Commission
continues to find that the exception
from NYSE Rule 2B described above
would continue to be consistent with
the Act.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,14 that the
proposed rule change (SR–NYSE–2009–
116) is hereby approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.15
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–31343 Filed 1–4–10; 8:45 am]
SECURITIES AND EXCHANGE
COMMISSION
srobinson on DSKHWCL6B1PROD with PROPOSALS
[Release No. 34–61258; File No. SR–Phlx–
2009–107]
Self-Regulatory Organizations;
NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to a
Technical Change to the Exchange’s
Complex Order Program
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to terminate a
feature of its complex order program.
The text of the proposed rule change
is available on the Exchange’s Web site
at https://
nasdaqomxphlx.cchwallstreet.com/
NASDAQOMXPHLX/Filings/, on the
Commission’s Web site at https://
www.sec.gov, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
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,
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
BILLING CODE 8011–01–P
December 30, 2009.
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on December
29, 2009, NASDAQ OMX PHLX, Inc.
(‘‘Phlx’’ or the ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the Exchange.
The Phlx filed the proposed rule change
pursuant to Section 19(b)(3)(A)(iii) of
the Act 3 and Rule 19b–4(f)(6)
thereunder.4 The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
1. Purpose
The purpose of the proposed rule
change is to discontinue a feature of the
Exchange’s complex orders system,
sometimes called ‘‘NBBO protection.’’
This feature enables a complex order to
be designated as ineligible for execution
at a price that is inferior to the NBBO
for the individual components of the
order. Otherwise, the existing rules
permit COLA-eligible orders (defined in
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(iii).
4 17 CFR 240.19b–4(f)(6).
2 17
14 15
15 17
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
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16:41 Jan 04, 2010
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501
the rule) to be executed without
consideration of any prices that might
be available on other exchanges trading
the same options contracts.5
This feature is mentioned several
times in the rules, referring to various
points in the Exchange’s complex order
processing where an order is executable
but for this designation. In the original
proposal adopting complex orders, the
Exchange stated that the purpose of this
provision is to provide a method to
protect each component of a Complex
Order from trading through the National
Best Bid and/or Offer (‘‘NBBO’’) in that
option series, until such time that the
order is placed on the complex order
book.6 The Exchange believes that the
feature has never been used.
Accordingly, the Exchange believes that
the proposal is a simple change to
eliminate a feature.
2. Statutory Basis
The Exchange believes the proposed
rule change is consistent with Section
6(b) of the Act 7 in general, and furthers
the objectives of Section 6(b)(5) of the
Act 8 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
removing a feature that the Exchange
believes has not been taken advantage of
by users.
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 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 comments were either solicited or
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The proposed rule change is
designated by the Exchange as a ‘‘noncontroversial’’ rule pursuant to Section
5 See
e.g., Rule 1080.08(e)(i)(B).
Exchange Act Release No. 58099 (July
3, 2008), 73 FR 39769 (July 10, 2008) (SR–Phlx–
2008–50) (Notice of Filing of Proposed Rule Change
Relating to Complex Orders). The description of
how this feature operates during the Complex Order
Live Auction (‘‘COLA’’) appears at 73 FR 39772.
7 15 U.S.C. 78f(b).
8 15 U.S.C. 78f(b)(5).
6 Securities
E:\FR\FM\05JAN1.SGM
05JAN1
502
Federal Register / Vol. 75, No. 2 / Tuesday, January 5, 2010 / Notices
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 the 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–Phlx2009–107 and should be submitted on
or before January 26, 2010.
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:
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.12
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9–31344 Filed 1–4–10; 8:45 am]
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–2009–107 on the
subject line.
srobinson on DSKHWCL6B1PROD with PROPOSALS
19(b)(3)(A) of the Act 9 and
subparagraph (f)(6) of Rule 19b–4
thereunder,10 because the proposed rule
change: (1) Does not significantly affect
the protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date on which it was
filed, or such shorter time as the
Commission may designate if consistent
with the protection of investors and the
public interest, provided that the
Exchange has given the Commission
written notice of its intent to file the
proposed rule change at least five
business days prior to the date of filing
of the proposed rule change.11
Consequently, the rule is being filed for
immediate effectiveness.
At any time within 60 days of the
filing of such 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.
SECURITIES AND EXCHANGE
COMMISSION
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–2009–107. 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
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
11 As required under Rule 19b–4(f)(6)(iii), the
Exchange has provided the Commission with
written notice of its intent to file the proposed rule
change at least five business days prior to the filing
date of this proposal.
10 17
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16:41 Jan 04, 2010
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BILLING CODE 8011–01–P
[Release No. 34–61259; File No. SR–CBOE–
2009–025]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Order Approving
Proposed Rule Change, as Modified by
Amendment No. 1, Related to the
Simple Auction Liaison (SAL)
December 30, 2009.
I. Introduction
On May 4, 2009, the Chicago Board
Options Exchange, Incorporated
(‘‘CBOE’’ or ‘‘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
amend CBOE Rule 6.13A to revise the
Designated Primary Market-Maker
(‘‘DPM’’)/Lead Market-Maker (‘‘LMM’’)
participation entitlement formula that is
12 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
PO 00000
Frm 00167
Fmt 4703
Sfmt 4703
applicable to Simple Auction Liaison
(‘‘SAL’’) executions in Hybrid 3.0
classes on a one-year pilot basis. On
November 13, 2009, CBOE filed
Amendment No. 1 to the proposed rule
change, which replaced the original
filing in its entirety. The proposed rule
change, as modified by Amendment No.
1, was published for comment in the
Federal Register on November 24,
2009.3 The Commission received no
comment letters on the proposal. This
order approves the proposed rule
change, as modified by Amendment No.
1.
II. Description of the Proposal
CBOE Rule 6.13A governs the
operation of the Exchange’s SAL system.
SAL is a feature within CBOE’s Hybrid
System that auctions marketable orders
for price improvement over the national
best bid or offer (‘‘NBBO’’). For Hybrid
3.0 Classes in which SAL is activated,4
the Exchange determines, on a class-byclass basis, which electronic matching
algorithm from CBOE Rule 6.45B shall
apply to SAL executions (e.g., pro-rata,
price-time, UMA priority with public
customer, participation entitlement and/
or market turner priority overlays).5
The Exchange also may establish, on
a class-by-class basis, a DPM/LMM
participation entitlement that is
applicable only to SAL executions.6
Pursuant to CBOE Rules 8.15B and 8.87,
the participation entitlement generally
is 50% when there is one other MarketMaker also quoting at the best bid/offer
on the Exchange, 40% when there are
two Market-Makers also quoting at the
best bid/offer on the Exchange, and 30%
when there are three or more MarketMakers also quoting at the best bid/offer
on the Exchange. In addition, the
participation entitlement must be in
compliance with Rule 6.45B(a)(i)(2).7 In
relevant part, Rule 6.45B(a)(i)(2)
provides that the DPM or LMM may not
be allocated a total quantity greater than
the quantity that it is quoting (including
orders not part of quotes) at that price.8
Further, if pro-rata priority is in effect
and the DPM or LMM’s allocation of an
order pursuant to its participation
entitlement is greater than its percentage
share of quotes/orders at the best price
at the time that the participation
3 Securities Exchange Act Release No. 61024
(November 18, 2009), 74 FR 61395.
4 Currently, SPX (options on the S&P 500 Index)
is the only Hybrid 3.0 class. Telephone call between
Angelo Evangelou, Assistant General Counsel,
CBOE, and Sara Hawkins, Special Counsel, Division
of Trading and Markets, Commission, on December
14, 2009.
5 See CBOE Rule 6.13A, Interpretation .04(ii).
6 Id.
7 Id.
8 See CBOE Rule 6.45B(a)(i)(2)(B).
E:\FR\FM\05JAN1.SGM
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]]>Agencies
[Federal Register Volume 75, Number 2 (Tuesday, January 5, 2010)]
[Notices]
[Pages 501-502]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-31344]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-61258; File No. SR-Phlx-2009-107]
Self-Regulatory Organizations; NASDAQ OMX PHLX, Inc.; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change Relating to
a Technical Change to the Exchange's Complex Order Program
December 30, 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 December 29, 2009, NASDAQ OMX PHLX, Inc. (``Phlx'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The Phlx
filed the proposed rule change pursuant to Section 19(b)(3)(A)(iii) of
the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to terminate a feature of its complex order
program.
The text of the proposed rule change is available on the Exchange's
Web site at https://nasdaqomxphlx.cchwallstreet.com/NASDAQOMXPHLX/Filings/, on the Commission's Web site at https://www.sec.gov, at the
principal office of the Exchange, and at the Commission's Public
Reference Room.
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, 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
The purpose of the proposed rule change is to discontinue a feature
of the Exchange's complex orders system, sometimes called ``NBBO
protection.'' This feature enables a complex order to be designated as
ineligible for execution at a price that is inferior to the NBBO for
the individual components of the order. Otherwise, the existing rules
permit COLA-eligible orders (defined in the rule) to be executed
without consideration of any prices that might be available on other
exchanges trading the same options contracts.\5\
---------------------------------------------------------------------------
\5\ See e.g., Rule 1080.08(e)(i)(B).
---------------------------------------------------------------------------
This feature is mentioned several times in the rules, referring to
various points in the Exchange's complex order processing where an
order is executable but for this designation. In the original proposal
adopting complex orders, the Exchange stated that the purpose of this
provision is to provide a method to protect each component of a Complex
Order from trading through the National Best Bid and/or Offer
(``NBBO'') in that option series, until such time that the order is
placed on the complex order book.\6\ The Exchange believes that the
feature has never been used. Accordingly, the Exchange believes that
the proposal is a simple change to eliminate a feature.
---------------------------------------------------------------------------
\6\ Securities Exchange Act Release No. 58099 (July 3, 2008), 73
FR 39769 (July 10, 2008) (SR-Phlx-2008-50) (Notice of Filing of
Proposed Rule Change Relating to Complex Orders). The description of
how this feature operates during the Complex Order Live Auction
(``COLA'') appears at 73 FR 39772.
---------------------------------------------------------------------------
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section 6(b) of the Act \7\ in general, and furthers the objectives of
Section 6(b)(5) of the Act \8\ 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 removing a feature that the Exchange believes has not been
taken advantage of by users.
---------------------------------------------------------------------------
\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
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 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 comments were either solicited or received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change is designated by the Exchange as a ``non-
controversial'' rule pursuant to Section
[[Page 502]]
19(b)(3)(A) of the Act \9\ and subparagraph (f)(6) of Rule 19b-4
thereunder,\10\ because the proposed rule change: (1) Does not
significantly affect the protection of investors or the public
interest; (2) does not impose any significant burden on competition;
and (3) does not become operative for 30 days from the date on which it
was filed, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest,
provided that the Exchange has given the Commission written notice of
its intent to file the proposed rule change at least five business days
prior to the date of filing of the proposed rule change.\11\
Consequently, the rule is being filed for immediate effectiveness.
---------------------------------------------------------------------------
\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
\11\ As required under Rule 19b-4(f)(6)(iii), the Exchange has
provided the Commission with written notice of its intent to file
the proposed rule change at least five business days prior to the
filing date of this proposal.
---------------------------------------------------------------------------
At any time within 60 days of the filing of such 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.
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-2009-107 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-2009-107. 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 the 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-2009-107 and should be submitted on or before January 26, 2010.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
---------------------------------------------------------------------------
\12\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-31344 Filed 1-4-10; 8:45 am]
BILLING CODE 8011-01-P
